<PAGE>
FORUM FUNDS
SEMI-ANNUAL REPORT
FEBRUARY 28, 1997
DAILY ASSETS
CASH FUND
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TABLE OF CONTENTS
<S> <C>
Page
A Message to Our Shareholders.... 1
FINANCIAL STATEMENTS OF THE FORUM
DAILY ASSETS CASH FUND
Statement of Assets and
Liabilities.................... 2
Statement of Operations.......... 3
Statement of Changes in Net
Assets......................... 4
Notes to Financial Statements.... 5
Financial Highlights............. 7
FINANCIAL STATEMENTS OF CORE
TRUST (DELAWARE)
Schedule of Investments:
Cash Portfolio................. 9
Statement of Assets and
Liabilities.................... 10
Statement of Operations.......... 11
Statement of Changes in Net
Assets......................... 12
Notes to Financial Statements.... 13
Financial Highlights............. 15
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i
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FORUM FUNDS
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<S> <C>
DAILY ASSETS CASH FUND SHAREHOLDER INQUIRIES
Forum Financial Corp.
P.O. Box 446
Portland, Maine 04112
207-879-0001
</TABLE>
[LOGO]
April 11, 1997 SEMI-ANNUAL REPORT
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Dear Shareholders:
I am pleased to present this report on the operations of the Forum Fund's
Daily Assets Cash money market fund for the period ended February 28, 1997. We
introduced the Fund last fall as a cash management vehicle for those investors
who might benefit from higher yields than our Daily Assets Treasury Fund.
The economy remained strong through 1996 and as 1997 began. Although the
markets greeted the year on a positive note, it was not long before economic
strength became a concern. Though inflationary signs were not evident in
Consumer price Index figures, expectations were beginning to change. Market
participants became very concerned about interest rates following remarks by
Federal Reserve Bank Chairman Alan Greenspan. In his view, the economy was too
strong, the stock market was too high, and in all likelihood he was going to do
something about it. As expected, when the Fed met in early April, interest rates
were ratcheted up 0.25%.
During this period, the Fund maintained a relatively short average maturity
in order to protect shareholders. Nevertheless, the Fund achieved favorable
yields. The Fund's total return since its inception on October 1, 1996 until
February 28, 1997, was 2.06%, or 5.11% on an annualized basis. As of February
28, 1997, the Fund had seven-day and thirty-day simple yields of 4.95% and 4.94%
respectively.
We believe that, in the first five months of its existence, the Daily Assets
Cash Fund has fulfilled your expectations for a vehicle for the management of
your cash reserves that provides high current income consistent with the
preservation of principal. The management of Forum Funds and I thank you for
your confidence, and remain committed to serving your financial needs and
objectives.
Sincerely,
[SIGNATURE]
John Y. Keffer
Chairman
THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
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DAILY ASSETS CASH FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997 (Unaudited)
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<TABLE>
<S> <C>
ASSETS:
Investments in Cash Portfolio
of Core Trust (Delaware)(Note
2) (cost $7,601,196).......... $7,601,196
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LIABILITIES:
Dividends payable.............. 27,323
Accrued fees and other
expenses...................... 2,061
-----------
Total liabilities.................. 29,384
-----------
NET ASSETS......................... $7,571,812
-----------
-----------
COMPONENTS OF NET ASSETS:
Paid in capital................ 7,571,806
Accumulated net realized gain
(loss)........................ 6
-----------
NET ASSETS......................... $7,571,812
-----------
-----------
SHARES OF BENEFICIAL INTEREST...... 7,571,806
-----------
-----------
NET ASSET VALUE PER SHARE
(OFFERING AND REDEMPTION PRICE
PER SHARE)....................... $ 1.00
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</TABLE>
See Notes to Financial Statements. 2 FORUM FUNDS
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DAILY ASSETS CASH FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD OCTOBER 1, 1996 THROUGH FEBRUARY 28, 1997 (Unaudited)
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INVESTMENT INCOME ALLOCATED FROM
CASH PORTFOLIO OF CORE TRUST
(DELAWARE):
Interest Income................ $ 125,432
Net Expenses................... (3,441)
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Net investment income allocated
from Cash Portfolio of Core
Trust (Delaware) (Note 2)..... 121,991
----------
EXPENSES:
Management (Note 3)............ 2,296
Transfer agent (Note 3)........ 10,764
Accounting (Note 3)............ 5,000
Legal (Note 3)................. 602
Registration................... 1,406
Audit.......................... 3,000
Miscellaneous.................. 1,209
----------
Total expenses..................... 24,277
----------
Expenses reimbursed and fees waived
(Note 4)......................... (15,095)
----------
Net expenses....................... 9,182
----------
NET INVESTMENT INCOME.............. 112,809
----------
NET REALIZED GAIN ON INVESTMENTS
SOLD............................. 6
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ $ 112,815
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</TABLE>
See Notes to Financial Statements. 3 FORUM FUNDS
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DAILY ASSETS CASH FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED FEBRUARY 28, 1997 (Unaudited)
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NET ASSETS (a)........... $ --
-------------
OPERATIONS:
Net investment
income............... 112,809
Net realized gain
(loss) on investments
sold................. 6
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Net increase (decrease)
in net assets
resulting from
operations........... 112,815
-------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income............... (112,809)
-------------
CAPITAL SHARE
TRANSACTIONS (at $1.00
per share):
Sale of shares......... 15,141,761
Reinvestment of
distributions........ 291
Redemption of shares... (7,570,246)
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Net increase
(decrease) in
capital
transactions........ 7,571,806
-------------
Net increase
(decrease).......... 7,571,812
-------------
NET ASSETS -- FEBRUARY
28, 1997............... $ 7,571,812
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</TABLE>
(a) See Notes to Financial Statements for commencement of operations.
See Notes to Financial Statements. 4 FORUM FUNDS
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DAILY ASSETS CASH FUND
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1997 (Unaudited)
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NOTE 1. ORGANIZATION
Forum Funds (the "Trust") is an open-end management investment company organized
as a Delaware business trust. The Trust currently has eleven active investment
portfolios. The Trust Instrument of the Trust authorizes each Fund to issue an
unlimited number of shares of beneficial interest without par value. Included in
this report is Daily Assets Cash Fund (the "Fund"), a diversified portfolio that
commenced operations on October 1, 1996.
MASTER FEEDER ARRANGEMENT-The Fund currently seeks to achieve its investment
objective by investing all of its investable assets in a separate portfolio of
Core Trust (Delaware)("Core Trust"). Core Trust is an open-end, management
investment company and the portfolio in which the Fund invests is the Cash
Portfolio, a diversified portfolio that has the same investment objective and
policies as the Fund. The value of the Fund's investment in the Cash Portfolio
reflects the Fund's proportionate interest in the net assets of the Cash
Portfolio. The Fund accounts for its investment in Cash Portfolio as a
partnership investment and records its share of the Portfolio's income, expense
and realized gain and loss daily. This is commonly referred to as a
master-feeder arrangement.
The performance of the Fund is directly affected by the performance of the Cash
Portfolio. The financial statements of the Cash Portfolio, including the
schedule of investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statements. The percentage of the
Cash Portfolio owned by the Daily Assets Cash Fund at February 28, 1997, was
approximately 4.0%.
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, the 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 but
are expected to be immaterial.
The following represent significant accounting policies of the Fund:
SECURITY VALUATION-The Trust records its investment in the Portfolio at value.
Valuation of securities held by the Portfolio is discussed in Note 2 of the
Portfolio Notes to Financial Statements, which are included elsewhere in this
report.
INVESTMENT INCOME AND EXPENSES-The Trust records daily its pro rata share of the
Portfolios' income, expenses and realized gain and loss. In addition, the Fund
accrues its own expenses.
DISTRIBUTIONS TO SHAREHOLDERS-Distributions to shareholders of net investment
income are declared daily and paid monthly. Net capital gain, if any, is
distributed to shareholders at least annually. Distributions are based on
amounts calculated in accordance with applicable income tax regulations.
FEDERAL TAXES-The 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, the Fund will not be
subject to a federal excise tax. Therefore, no Federal income or excise tax
provision is required.
5 FORUM FUNDS
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DAILY ASSETS CASH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 1997 (Unaudited)
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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, SERVICING FEES AND OTHER TRANSACTIONS
INVESTMENT ADVISER-The investment adviser of the Portfolio is Linden Asset
Management, Inc. (the "Adviser"). Pursuant to investment advisory agreements
with respect to the Portfolio among Core Trust, the Adviser and Forum Advisors,
Inc. ("Forum Advisors"), the Adviser may delegate responsibility for portfolio
management to Forum Advisors. The Fund may withdraw its investment from the
Portfolio at any time if the Board determines that it is in the best interest of
the Fund and its shareholders to do so. In the event the Fund were to make such
a withdrawal, the Trust has retained the Adviser and Forum Advisors to act as
investment advisers to the Fund. Neither the Adviser nor Forum Advisors receive
any advisory fees with respect to the Fund as long as the Fund remains
completely invested in the Portfolio.
MANAGEMENT AND OTHER SERVICES-Forum Financial Corp. ("FFC"), an affiliate of
Forum Advisors, serves as the Funds transfer agent and dividend disbursing
agent, and for those services receives an annual rate of 0.25% of the average
daily net assets of the Fund and an annual fee of $12,000 plus account and
series charges, plus certain amounts based upon the number and types of
portfolio transactions within the Fund.
The manager of the Trust is Forum Financial Services, Inc. ("the Manager"), an
affiliate of Forum Advisors, 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 the Fund at an annual rate of 0.10% of the
average daily net assets of the Fund. In addition, certain legal expenses were
charged to the Trust by the Manager. The Manager also acts as the distributor of
the Fund's shares.
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Manager and FFC have voluntarily waived a portion of their fees and assumed
certain expenses of the Fund so that total expenses of the Fund would not exceed
a certain limitation including its allocation of expenses from the Portfolio.
For the period ended February 28, 1997, the Manager and FFC waived fees were
$2,296 and $5,188, respectively, and the Manager reimbursed expenses were
$7,445.
6 FORUM FUNDS
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FINANCIAL HIGHLIGHTS
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<TABLE>
<CAPTION>
DAILY ASSETS
CASH FUND
SELECTED PER
SHARE DATA AND
RATIOS
FOR A SHARE
OUTSTANDING
THROUGHOUT EACH PERIOD ENDED
PERIOD 2/28/97(D)
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<S> <C>
Net Asset Value,
Beginning of
Period (a).... $1.00
-------------
Investment
Operations
Net Investment
Income
(Loss)....... 0.02
Net Realized
and
Unrealized
Gain (Loss)
on
Investments... 0.00
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Total from
Investment
Operations.... 0.02
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Distributions
from
Net Investment
Income....... (0.02)
Net Realized
Gain on
Investments... 0.00
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Total
Distributions... (0.02)
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Net Asset Value,
End of
Period........ $ 1.00
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Total Return
(b)........... 5.11%(c)
Ratio/Supplementary
Data:
Net Assets at
End of Period
(000's
omitted)...... $7,572
Ratios to
Average Net
Assets:
Expenses
including
reimbursement/waiver... 0.55%(c)
Expenses
excluding
reimbursement/waiver... 1.21%(c)
Net
investment
income
(loss)
including
reimbursement/waiver... 4.91%(c)
</TABLE>
(a) Date of commencement of operations October 1, 1996.
(b) Total return calculation does not include sales charges.
(c) Annualized.
(d) Unaudited.
See Notes to Financial Statements. 7 FORUM FUNDS
<PAGE>
CORE TRUST (DELAWARE)
SEMI-ANNUAL REPORT
FEBRUARY 28, 1997 (UNAUDITED)
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CASH PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (Unaudited)
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<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
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<C> <S> <C>
U.S. GOVERNMENT SECURITIES (43.2%)
FEDERAL FARM CREDIT BANK (A) (4.3%)
$ 8,000,000 5.415%, 5/16/97......................... $ 7,914,490
-----------
FEDERAL HOME LOAN BANK (A) (16.4%)
5,000,000 5.441%, 3/31/97......................... 4,979,661
10,000,000 5.483%, 7/31/97......................... 9,780,625
11,065,000 5.413%, 8/13/97......................... 10,804,482
5,000,000 5.378%, 8/14/97......................... 4,882,240
-----------
Total Federal Home Loan Bank 30,447,008
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (A) (8.0%)
10,000,000 5.364%, 3/5/97.......................... 9,997,100
5,000,000 5.45%, 6/30/97.......................... 4,913,065
-----------
Total Federal National Mortgage Association 14,910,165
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SMALL BUSINESS ADMINISTRATION (B)(10.2%)
383,953 Pool# 500536, 7.25%, 5/25/13............ 391,127
716,594 Pool# 500730, 8.125%, 2/25/04........... 734,234
48,764 Pool# 500737, 7.50%, 12/25/97........... 48,764
96,166 Pool# 501256, 7.20%, 7/25/98............ 96,166
1,553,412 Pool# 501733, 6.25%, 2/25/17............ 1,579,383
1,622,937 Pool# 501989, 6.375%, 10/25/12.......... 1,634,080
442,137 Pool# 502914, 6.25%, 3/25/15............ 442,722
1,933,086 Pool# 503121, 6.125%, 8/25/15........... 1,933,086
6,076,987 Pool# 503429, 6.00%, 6/25/16............ 6,076,987
935,412 Pool# 503461, 6.00%, 9/25/21............ 936,011
4,992,503 Pool# 503553, 5.875%, 11/25/21.......... 4,980,096
-----------
Total Small Business Administration 18,852,656
-----------
STUDENT LOAN MARKETING ASSOCIATION (B)(4.3%)
6,000,000 5.49%, 1/21/98.......................... 6,000,000
2,000,000 5.44%, 2/17/98.......................... 2,000,000
-----------
Total Student Loan Marketing Association 8,000,000
-----------
Total U.S. Government Securities 80,124,319
-----------
BANKER'S ACCEPTANCES (A)(4.3%)
8,000,000 Bank of America, 5.385%, 4/17/97........ 7,947,100
-----------
COMMERCIAL PAPER (A)(14.1%)
5,810,000 Banca CRT Financial Corp., 5.583%,
3/27/97............................... 5,788,929
2,500,000 Duff & Phelps Utility and Corp. Bond
Trust, Inc., 5.628%, 6/12/97.......... 2,461,986
10,000,000 Ford Motor Credit Corp., 5.481%,
4/2/97................................ 9,955,667
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
$ 8,000,000 General Electric Capital Corp., 5.461%,
3/3/97................................ $ 8,000,000
-----------
Total Commercial Paper 26,206,582
-----------
CORPORATE NOTES (5.4%)
5,000,000 Bear, Stearns & Co., Inc., 5.468%
variable rate, 5/14/97................ 5,000,000
5,000,000 Bear, Stearns & Co., Inc., 5.438%
variable rate, 1/6/98................. 5,000,000
-----------
Total Corporate Notes 10,000,000
-----------
REPURCHASE AGREEMENTS (32.1%)
9,690,000 Bank of America, 5.35%, 3/3/97, to be
repurchased at $9,694,320;
Collateralized by $10,190,000 U.S.
Treasury Strip Notes, 0%, due
5/15/06............................... 9,690,000
20,000,000 Nomura Securities, 5.43%, 3/3/97, to be
repurchased at $20,009,050;
Collateralized by $15,000,000 Federal
Home Loan Mortgage Corporation 1569 C,
0%, due 1/15/22; $18,665,000 Federal
National Mortgage Association 1993-132
A, 0%, due 10/25/22................... 20,000,000
30,000,000 Smith Barney, 5.37%, 3/3/97, to be
repurchased at $30,013,425;
Collateralized by $50,800,000, Federal
National Mortgage Association 273 PO,
0%, due 7/1/26........................ 30,000,000
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Total Repurchase Agreements 59,690,000
-----------
<CAPTION>
SHARES
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<C> <S> <C>
SHORT-TERM HOLDINGS (0.9%)
1,652,000 Dreyfus Cash Management Plus Fund....... 1,652,000
-----------
Total Investments (100.0%) $185,620,001
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</TABLE>
(A) Annualized yields at time of purchase.
(B) 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 February 28, 1997.
See Notes to Financial Statements. 9 CORE TRUST (DELAWARE)
<PAGE>
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CASH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997 (Unaudited)
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<TABLE>
<S> <C>
ASSETS:
Investments: (Note 2)................................................................................
Investments at cost................................................................................ $ 125,930,001
Repurchase agreements at cost...................................................................... 59,690,000
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Total investments at value....................................................................... 185,620,001
Cash................................................................................................. 25,504
Interest and other receivables....................................................................... 380,158
Organization costs, net of amortization (Note 2)..................................................... 4,155
-------------
Total Assets............................................................................................. 186,029,818
-------------
LIABILITIES:
Payable to Adviser (Note 3).......................................................................... 5,938
Payable to other related parties (Note 3)............................................................ 13,876
-------------
Total Liabilities........................................................................................ 19,814
-------------
NET ASSETS............................................................................................... $ 186,010,004
-------------
-------------
COMPONENTS OF NET ASSETS:
Investors' capital................................................................................... $ 186,012,104
Accumulated net realized gain (loss)................................................................. (2,100)
-------------
NET ASSETS............................................................................................... $ 186,010,004
-------------
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</TABLE>
See Notes to Financial Statements. 10 CORE TRUST (DELAWARE)
<PAGE>
CASH PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1997 (Unaudited)
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<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income......................................................................................... $4,549,861
----------
EXPENSES:
Investment advisory (Note 3)............................................................................ 30,314
Administration (Note 3)................................................................................. 41,595
Custody................................................................................................. 20,798
Accounting (Note 3)..................................................................................... 24,000
Audit................................................................................................... 5,496
Trustee and Officer Insurance........................................................................... 3,611
Legal (Note 3).......................................................................................... 1,857
Trustees................................................................................................ 1,505
Miscellaneous........................................................................................... 1,453
----------
Total expenses.............................................................................................. 130,629
Fees waived (Note 4).................................................................................... (5,830)
----------
Net expenses................................................................................................ 124,799
----------
NET INVESTMENT INCOME....................................................................................... 4,425,062
----------
NET REALIZED GAIN (LOSS) ON INVESTMENTS SOLD................................................................ (8,520)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................................ $4,416,542
----------
----------
</TABLE>
See Notes to Financial Statements. 11 CORE TRUST (DELAWARE)
<PAGE>
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CASH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1996
AND THE SIX MONTHS ENDED FEBRUARY 28, 1997
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<TABLE>
<S> <C>
NET ASSETS--September 1, 1995............................................................................ $ --
-------------
OPERATIONS:
Net investment income.................................................................................. 6,173,705
Net realized gain (loss) on investments sold........................................................... 6,420
-------------
Net increase (decrease) in net assets resulting from operations...................................... 6,180,125
-------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions.......................................................................................... 466,894,348
Withdrawals............................................................................................ (346,791,550)
-------------
Net Transactions in Investors' Beneficial Interests.................................................. 120,102,798
-------------
Net increase (decrease).............................................................................. 126,282,923
-------------
NET ASSETS--August 31, 1996.............................................................................. 126,282,923
-------------
OPERATIONS:
Net investment income.................................................................................. 4,425,062
Net realized gain (loss) on investments sold........................................................... (8,520)
-------------
Net increase (decrease) in net assets resulting from operations...................................... 4,416,542
-------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions.......................................................................................... 295,447,184
Withdrawals............................................................................................ (240,136,645)
-------------
Net Transactions in Investors' Beneficial Interests.................................................. 55,310,539
-------------
Net increase (decrease).............................................................................. 59,727,081
-------------
NET ASSETS--February 28, 1997 (Unaudited)................................................................ $ 186,010,004
-------------
-------------
</TABLE>
See Notes to Financial Statements. 12 CORE TRUST (DELAWARE)
<PAGE>
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CASH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1997 (Unaudited)
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NOTE 1. SUMMARY OF ORGANIZATION
Core Trust (Delaware) ("Core Trust") was formed as a Delaware business trust 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
relates to Cash Portfolio (the "Portfolio"), a diversified portfolio of Core
Trust which commenced operations on September 1, 1995. Interest in Cash
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 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, but
any differences are expected to be immaterial.
PORTFOLIO VALUATION-Core Trust determines the net asset value per share as of
1:00 p.m., Pacific 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.
REPURCHASE AGREEMENTS-The Portfolio may invest in repurchase agreements. The
Portfolio, through its custodian, receives delivery of the underlying
securities, whose market value must always equal or exceed the repurchase price
plus accrued interest. The investment adviser is responsible for determining the
value of the underlying securities at all times. In the event of default, the
Portfolio may have difficulties with the disposition of such securities.
ORGANIZATIONAL COSTS-The costs incurred by the Portfolio in connection with its
organization have been capitalized and are being amortized using the
straight-line method over a five year period beginning on the commencement of
the Portfolio's operations. These costs were paid by Forum Financial Corp. and
were reimbursed by the Portfolio.
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 are 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.
SECURITIES TRANSACTIONS, INTEREST INCOME AND REALIZED GAIN AND LOSS-Security
transactions are recorded on a trade date basis, interest income is accrued as
earned and realized gain and loss on investments sold are recorded on the basis
of identified cost. The cost basis of investments for Federal income tax
purposes at February 28, 1997 is the same as for financial accounting purposes.
13 CORE TRUST (DELAWARE)
<PAGE>
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CASH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER-The investment adviser of the Portfolio is Linden Asset
Management, Inc. (the "Adviser"). Effective January 1, 1997, pursuant to
investment advisory agreement, the Adviser receives from the Portfolio an
advisory fee based upon the total average daily net assets ("Total Portfolio
Assets") that is calculated on a cumulative basis as follows: 0.06% for the
first $200 million of Total Portfolio Assets, 0.04% of the next $300 million of
Total Portfolio Assets, and 0.03% of the remaining Total Portfolio Assets. The
minimum total annual advisory fee is $50,000.
Prior to January 1, 1997, the Adviser received from the Portfolio an advisory
fee based upon Total Portfolio Assets that was calculated on a cumulative basis
as follows: 0.05% for the first $200 million of Total Portfolio Assets, 0.03% of
the next $300 million of Total Portfolio Assets, and 0.02% of the remaining
Total Portfolio Assets.
Pursuant to an investment advisory agreement among the Trust, the Adviser and
Forum Advisors, Inc. ("Forum Advisors"), the Adviser may delegate responsibility
for portfolio management to Forum Advisors. To the extent the Adviser has so
delegated its responsibilities, the Adviser pays its advisory fee to Forum
Advisors.
ADMINISTRATOR-The administrator of Core Trust is Forum Financial Services, Inc.
("Forum"), a registered broker-dealer and a member of the National Association
of Securities Dealers, Inc. For its administrative services and facilities,
Forum receives from the Portfolio an administration fee at an annual rate of
0.05% of the average daily net assets of the Portfolio. In addition, certain
legal expenses were charged to the Portfolio by Forum for the period ended
February 28, 1997 in the amount of $1,227.
OTHER SERVICE PROVIDERS-The interestholder record keeper and fund accountant of
the Portfolio is Forum Financial Corp. ("FFC"). FFC is paid an annual accounting
fee of the lesser of an annual rate 0.05% of the average daily net assets of the
Portfolio on an annualized basis or $48,000, plus certain additional charges for
each interestholder in the Portfolio.
PLACEMENT AGENT-Forum acts as Core Trust's placement agent pursuant to a
separate agreement with Core Trust and receives no compensation for these
services.
NOTE 4. WAIVER OF FEES
Forum has voluntarily waived a portion of its fees, so that total expenses of
the Portfolio would not exceed certain limitations. For the period ended
February 28, 1997, Forum waived management fees in the amount of $5,830.
NOTE 5. SPECIAL MEETING OF INTERESTHOLDERS
The following matter was submitted to a vote of interestholders of the Portfolio
at a special meeting held December 27, 1996: To approve an amendment to the
Investment Advisory Agreement between Core Trust (Delaware) and Linden Asset
Management, Inc. to increase the investment advisory fee with respect to the
Portfolio. Interests in the Portfolio were voted as follows: 58.63% For; 41.37%
Against; 0% Abstained.
14 CORE TRUST (DELAWARE)
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Portfolio performance for the period ended February 28, 1997. All percentages
are annualized.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
---------------------------------------
NET
INVESTMENT GROSS
EXPENSES INCOME EXPENSES (A)
----------- ----------- -------------
<S> <C> <C> <C>
Cash Portfolio................................................................. 0.15% 5.32% 0.16%
</TABLE>
(a) During the period, various fees and expenses were waived. The ratio of
Gross Expenses to Average Net Assets reflects the expense ratio excluding
any waivers.
See notes to financial statements. 15 CORE TRUST (DELAWARE)
<PAGE>
DISTRIBUTOR
Forum Financial Services, Inc.
TRANSFER AGENT
Forum Financial Corp.
[LOGO]
FORUM FUNDS
P.O. Box 446
Portland, ME 04112
207-879-0001 (IN PORTLAND, ME)
800-94FORUM (ELSEWHERE)
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION ONLY
TO CURRENT SHAREHOLDERS AND TO OTHERS WHO HAVE
RECEIVED A COPY OF A FORUM FUNDS PROSPECTUS.
