FORUM FUNDS INC, 485APOS, 1998-03-24

FORUM FUNDS INC
485APOS, 1998-03-24

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As filed with the Securities and Exchange Commission on March 24, 1998
File No. 2-67052
File No. 811-3023
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 60

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 62
--------------------------------------------

FORUM FUNDS
(Formerly Forum Funds, Inc.)
(Exact Name of Registrant as Specified in its Charter)

Two Portland Square, Portland, Maine 04101
(Address of Principal Executive Office)

Registrant's Telephone Number, including Area Code: 207-879-1900
---------------------------------------------------------------------

David I. Goldstein, Esq.
Forum Financial Services, Inc.
Two Portland Square, Portland, Maine 04101
(Name and Address of Agent for Service)

Copies of Communications to:
Anthony C.J. Nuland, Esq.
Seward & Kissel
1200 G Street, N.W.
Washington, D.C. 20005
------------------------------------

It is proposed that this filing will become effective:

_____ immediately upon filing pursuant to Rule 485, paragraph (b)
_____ on ________________ pursuant to Rule 485, paragraph (b)
__X__ 60 days after filing pursuant to Rule 485, paragraph (a)(i)
_____ 75 days after filing pursuant to Rule 485, paragraph (a)(ii)
_____ on [ ] pursuant to Rule 485, paragraph (a)(ii)
_____ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment

Title of Securities being registered: Institutional Shares, Institutional
Service Shares and Investor Shares of Daily Assets Treasury Obligations Fund,
Daily Assets Government Fund, Daily Assets Government Obligations Fund, Daily
Assets Cash Fund and Daily Assets Municipal Fund. All funds of the Registrant
that are being registered are structured as master-feeder funds. This amendment
is also executed by Core Trust (Delaware).

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<PAGE>

CROSS REFERENCE SHEET

PART A
(Prospectus offering shares of money market funds)
<TABLE>
<S> <C> <C>
FORM N-1A LOCATION IN PROSPECTUS
ITEM NUMBER (CAPTION)
- ----------- ------------------------
Item 1. Cover Page: Cover Page

Item 2. Synopsis: Prospectus Summary

Item 3. Condensed Financial
Information: Not Applicable

Item 4. General Description
of Registrant: Prospectus Summary; Investment Objective and
Policies; Other Information

Item 5. Management of the Fund: Prospectus Summary; Management

Item 6. Capital Stock and
Other Securities Investment Objective and Policies; Dividends and
Tax Matters; Other Information - The Trust and
its Shares

Item 7. Purchase of Securities
Being Offered: Purchases and Redemptions of Shares; Other
Information - Determination of Net Asset Value;
Management

Item 8. Redemption or Repurchase
of Shares: Purchases and Redemptions of Shares

Item 9. Pending Legal Proceedings Not Applicable

</TABLE>

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<PAGE>

CROSS REFERENCE SHEET

PART B
(SAI offering shares of money market funds)
<TABLE>
<S> <C> <C>
LOCATION IN STATEMENT
FORM N-1A OF ADDITIONAL INFORMATION
ITEM NUMBER (CAPTION)
- ----------- --------------------------
Item 10. Cover Page: Cover Page

Item 11. Table of Contents: Cover Page

Item 12. General Information and History: Management; Other Information

Item 13. Investment Objectives and
Policies: Investment Policies; Investment Limitations

Item 14. Management of the Registrant: Management

Item 15. Control Persons and
Principal Holders of
Securities: Other Information

Item 16. Investment Advisory
and Other Services: Management; Other Information - Custodian,
Counsel, Auditors

Item 17. Brokerage Allocation
and Other Practices: Portfolio Transactions

Item 18. Capital Stock and
Other Securities: Determination of Net Asset Value

Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered: Determination of Net Asset Value; Additional
Purchase and Redemption Information

Item 20. Tax Status: Taxation

Item 21. Underwriters: Management

Item 22. Calculation of
Performance Data: Performance Data

Item 23. Financial Statements: Not Applicable

</TABLE>

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<PAGE>

PROSPECTUS
May __, 1998

FORUM FUNDS
Daily Assets Treasury Obligations Fund

Daily Assets Government Fund
(formerly Daily Assets Treasury Fund)
Daily Assets Government Obligations Fund
(formerly Daily Assets Government Fund)
Daily Assets Cash Fund
Daily Assets Municipal Fund

This Prospectus offers Institutional Shares of Daily Assets Treasury Obligations
Fund, Daily Assets Government Fund, Daily Assets Government Obligations Fund,
Daily Assets Cash Fund and Daily Assets Municipal Fund (each a "Fund"). Each
Fund is a diversified no-load, money market portfolio of Forum Funds (the
"Trust"), a registered open-end, management investment company. Each Fund seeks
to provide its shareholders with high current income (which, in the case of
Daily Assets Municipal Fund, is exempt from federal income taxes) to the extent
consistent with the preservation of capital and the maintenance of liquidity.

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

DAILY ASSETS TREASURY OBLIGATIONS FUND invests substantially all of
its assets in obligations of the U.S. Treasury and in repurchase
agreements backed by these obligations.
DAILY ASSETS GOVERNMENT FUND invests substantially all of its assets
in obligations of the U.S. Government, its agencies and
instrumentalities with a view toward providing income that is
generally considered exempt from state and local income taxes.
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND invests substantially all of
its assets in obligations of the U.S. Government, its agencies and
instrumentalities and in repurchase agreements backed by these
obligations.
DAILY ASSETS CASH FUND invests in a broad spectrum of high-quality
money market instruments. DAILY ASSETS MUNICIPAL FUND invests
primarily in high-quality obligations of the states, territories and
possessions of the U.S. and of their subdivisions, authorities and
corporations ("municipal securities") with a view toward providing
income that is exempt from federal income taxes.

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<PAGE>

(http://www.sec.gov). The SAI, which is incorporated into this Prospectus by
reference, also is available without charge by contacting the Funds' transfer
agent, Forum Financial Corp., at P.O. Box 446, Portland, Maine 04112, (207)
879-0001 or (800) 94FORUM.

Investors should read this Prospectus and retain it for future reference.

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

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TABLE OF CONTENTS
1. Prospectus Summary.............................. 5. Purchases and Redemptions of Shares.............
2. Financial Highlights............................ 6. Distributions and Tax Matters...................
3. Investment Objectives and Policies.............. 7. Other Information...............................
4. Management......................................
</TABLE>
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5
<PAGE>

1. PROSPECTUS SUMMARY

HIGHLIGHTS OF THE FUNDS

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

Daily Assets Treasury Obligations Fund Treasury Cash Portfolio
Daily Assets Government Fund Government Portfolio
Daily Assets Government Obligations Fund Government Cash Portfolio
Daily Assets Cash Fund Cash Portfolio
Daily Assets Municipal Fund Municipal Cash Portfolio

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

MANAGEMENT. Forum Administrative Services, LLC ("FAS") supervises the overall
management of the Funds and the Portfolios and Forum Financial Services, Inc.
("FFSI") is the distributor of the Funds' shares. Forum Investment Advisors, LLC
("Forum Advisors") is the investment adviser of each Portfolio and provides
professional management of the Portfolios' investments. The Funds' transfer
agent, dividend disbursing agent and shareholder servicing agent is Forum
Financial Corp. (the "Transfer Agent"). See "Management" for a description of
the services provided and fees charged to the Funds.

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

6
<PAGE>

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

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

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

EXPENSES OF INVESTING IN THE FUNDS

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

ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)(1)
<TABLE>
<S> <C> <C> <C> <C> <C>

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

(1) For a further description of the various expenses incurred in the operation
of the Funds and the Portfolios, see "Management." The amount of fees and
expenses for each Fund is based on estimated annualized expenses for the Funds'
fiscal year ending August 31, 1998. Each Fund's expenses include the Fund's pro
rata portion of all expenses of its corresponding Portfolio, which are borne
indirectly by Fund shareholders.
(2) Management Fees include all administration fees and investment advisory fees
incurred by the Funds and the Portfolios; as long as its assets are invested in
a Portfolio, a Fund pays no investment advisory fees directly.
(3) Absent estimated reimbursements by Forum Advisors and its affiliates, Other
Expenses and Total Fund Operating Expenses would be: 0.15% and 0.29%,
respectively, for Daily Assets Treasury Obligations Fund; 0.17 % and 0.32%,
respectively, for Daily Assets Government Fund; 0.17% and 0.31%, respectively,
for Daily Assets Government Obligations Fund; 0.19% and

7
<PAGE>

0.33%, respectively, for Daily Assets Cash Fund; 0.19% and 0.34%, respectively,
for Daily Assets Municipal Fund. Expense reimbursements are voluntary and may
be reduced or eliminated at any time.

EXAMPLE

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

One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Each Fund $2 $6 $11 $26

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

8
<PAGE>

2. FINANCIAL HIGHLIGHTS

As of the date hereof, Institutional Shares were not offered. The following
information represents selected data for a single outstanding Institutional
Service Share of Daily Assets Treasury Obligations Fund, Daily Assets Government
Fund, Daily Assets Government Obligations Fund and Daily Assets Cash Fund. Those
classes were the first offered by the respective Funds and, accordingly,
represent data since each Fund's inception. Information for the period ended
August 31, 1997, was audited by __________, independent auditors. Information
for prior periods was audited by other independent auditors and information for
the period ended February 28, 1998 is unaudited. The financial statements and
independent auditors' report thereon for the fiscal year ended August 31, 1997
and the financial statements for the semi-annual period ended February 28, 1998
are incorporated by reference into the SAI and may be obtained from the Trust
without charge. Daily Assets Municipal Fund commenced operations on ________.

As of February 28, 1998, Treasury Cash Portfolio, Government Portfolio,
Government Cash Portfolio and Cash Portfolio had net assets of $_______;
$_______; $_______ and $_______, respectively.

9
<PAGE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Ratio to Average Net Assets
---------------------------
Beginning Distributions Ending Net
Net Asset Net From Net Asset Net
Value Per Investment Investment Value Net Investment
Share Income Income Per Share Expenses Income
----- ------ ------ --------- -------- ------
DAILY ASSETS TREASURY OBLIGATIONS FUND
INSTITUTIONAL SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00

DAILY ASSETS GOVERNMENT FUND
INSTITUTIONAL SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00
April 1, 1997 to August 31, 1997 1.00 0.02 (0.02) 1.00 0.50%(2) 4.76%(2)
Year Ended March 31, 1997 1.00 0.05 (0.05) 1.00 0.50% 4.70%
Year Ended March 31, 1996 1.00 0.05 (0.05) 1.00 0.50% 5.01%
Year Ended March 31, 1995 1.00 0.04 (0.04) 1.00 0.37% 4.45%
Year Ended March 31, 1994 1.00 0.03 (0.03) 1.00 0.33% 2.82%
July 1, 1992 to March 31, 1993 1.00 0.02 (0.02) 1.00 0.32%(2) 2.92%(2)

DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
INSTITUTIONAL SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00

DAILY ASSETS CASH FUND
INSTITUTIONAL SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00
October 1, 1996 to August 31, 1997 1.00 0.05 (0.05) 1.00 0.52%(2) 5.06(2)%

</TABLE>

Ratio of

Net Assets Gross
End of Expenses
Period to Average
Total (000s Net Assets
Return Omitted) (1)
------ -------- -------

2.01% 44,116 0.95%(2)
4.80% 43,975 0.99%
5.18% 43,103 1.06%
4.45% 36,329 1.10%
2.83% 26,505 1.17%
3.13%(2) 4,687 2.43%(2)

4.70% 12,076 1.22%(2)
</TABLE>

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

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<PAGE>

3. INVESTMENT OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE

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

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

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

INVESTMENT POLICIES

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

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

11
<PAGE>

various privately operated facilities that is backed only by the assets and
revenues of the non-governmental user, the non-governmental user will be deemed
to be the sole issuer of the security.

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

DAILY ASSETS TREASURY OBLIGATIONS FUND

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

DAILY ASSETS GOVERNMENT FUND

Government Portfolio seeks to attain its investment objective by investing
substantially all of its assets in U.S. Government Securities. The Portfolio
invests with a view toward providing income that is generally considered exempt
from state and local income taxes. [The Portfolio will purchase a U.S.
Government Security (other than a Treasury Security) only if that security has a
remaining maturity of thirteen months or less.]

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

The U.S. Government Securities in which the Portfolio may invest include
securities supported primarily or solely by the creditworthiness of the issuer.
There is no guarantee that the U.S.

12
<PAGE>

government will support securities not backed by its full faith and credit.
Accordingly, although these securities have historically involved little risk of
loss of principal if held to maturity, they may involve more risk than
securities backed by the U.S. government's full faith and credit.

DAILY ASSETS GOVERNMENT OBLIGATIONS FUND

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

DAILY ASSETS CASH FUND

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

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

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

13
<PAGE>

DAILY ASSETS MUNICIPAL FUND

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

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

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

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

14
<PAGE>

rate and the rate, as determined by a remarketing or similar agent, that would
cause the securities, coupled with the tender option, to trade at par on the
date of the interest rate determination. These bonds effectively provide the
holder with a demand obligation that bears interest at the prevailing short-term
municipal securities interest rate.

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

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

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

15
<PAGE>

have special risks not normally associated with other municipal securities.
Municipal leases (which normally provide for title to the leased assets to pass
eventually to the government issuer) have evolved as a means for governmental
issuers to acquire property and equipment without meeting the constitutional and
statutory requirements for the issuance of debt. The debt-issuance limitations
of many state constitutions and statutes are deemed to be inapplicable because
of the inclusion in many leases or contracts of "non-appropriation" clauses that
provide that the governmental issuer has no obligation to make future payments
under the lease or contract unless money is appropriated for such purpose by the
appropriate legislative body on a yearly or other periodic basis.

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

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

ADDITIONAL INVESTMENT POLICIES

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

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

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

16
<PAGE>

with sellers which Forum Advisors believes present minimal credit risks in
accordance with guidelines established by the Core Trust Board. In the event
that a seller defaulted on its repurchase obligation, however, a Portfolio might
suffer a loss.

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

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

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

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

17
<PAGE>

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

4. MANAGEMENT

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

ADMINISTRATION AND DISTRIBUTION

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

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

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

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<PAGE>

provided administration services to registered investment companies with assets
of approximately $30 billion.

INVESTMENT ADVISER

Subject to the general supervision of the Core Trust Board, Forum Advisors makes
investment decisions for each Portfolio and monitors the Portfolios'
investments. Forum Advisors, which is located at Two Portland Square, Portland,
Maine 04101, provides investment advisory services to five other mutual funds.
Prior to January 2, 1998, Linden Asset Management, Inc. ("Linden") served as
investment adviser to Treasury Cash Portfolio, Government Cash Portfolio and
Cash Portfolio and provided professional management of those Portfolios'
investments, and Forum Advisors, Inc. served as investment adviser to Government
Portfolio and provided professional management of that Portfolio's investments.
Linden and Forum Advisors, Inc. also acted as investment subadvisors to each
Portfolio that they did not manage on a daily basis. On January 2, 1998, Forum
Advisors, Inc. acquired Linden and reorganized into a new company named Forum
Investment Advisors, LLC.

Anthony R. Fischer, Jr. is primarily responsible for the day-to-day management
of the Portfolios. Mr. Fischer was the sole stockholder and President of Linden
Asset Management, Inc. from 1992 until January 2, 1998. He has been primarily
responsible for the day-to-day management of Treasury Cash Portfolio, Government
Cash Portfolio, Cash Portfolio and Municipal Cash Portfolio since their
inception. Mr. Fischer has over twenty-five years experience in the money market
industry and during that time has managed money market investment portfolios for
various banks and investment firms.

For its services, Forum Advisors receives an advisory fee at an annual rate of
0.05% of Government Portfolio's and Municipal Cash Portfolio's average daily net
assets For services provided to Treasury Cash Portfolio, Government Cash
Portfolio and Cash Portfolio, Forum Advisors receives an advisory fee based upon
the total average daily net assets of those Portfolios ("Total Portfolio
Assets"). Forum Advisors' fee is calculated at an annual rate on a cumulative
basis as follows: 0.06% of the first $200 million of Total Portfolio Assets,
0.04% of the next $300 million of Total Portfolio Assets, and 0.03% of the
remaining Total Portfolio Assets. A Fund's expenses include the Fund's pro rata
portion of the advisory fee paid by the corresponding Portfolio.

SHAREHOLDER SERVICING

Shareholder inquiries and communications concerning the Funds may be directed to
the Transfer Agent at the address and telephone numbers on the first page of
this Prospectus. The Transfer Agent maintains an account for each shareholder of
the Funds (unless such accounts are maintained by sub-transfer agents or
processing agents) and performs other transfer agency and related functions. The
Transfer Agent is authorized to subcontract any or all of its functions to one
or more qualified sub-transfer agents or processing agents, which may be its
affiliates, who agree to comply with the terms of the Transfer Agent's agreement
with the Trust. The Transfer Agent may pay those agents for their services, but
no such payment will increase the Transfer Agent's compensation from the Trust.
For its services, the Transfer Agent is paid a transfer

19
<PAGE>

agent fee at an annual rate of 0.05% of the average daily net assets of each
Fund attributable to Institutional Shares plus $12,000 per year for each Fund
and certain account and additional class charges and is reimbursed for certain
expenses incurred on behalf of the Funds.

EXPENSES OF THE FUNDS

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

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

5. PURCHASES AND REDEMPTIONS OF SHARES

GENERAL INFORMATION

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

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

Fund shares become entitled to receive distributions on the day the purchase
order is accepted if the order and payment are received by the Transfer Agent as
follows:
<TABLE>
<S> <C> <C>
ORDER MUST BE RECEIVED BY PAYMENT MUST BE RECEIVED BY
------------------------- ---------------------------

Daily Assets Government Fund and

Daily Assets Municipal Fund 12:00 p.m., Eastern time 4:00 p.m., Eastern time
All other Funds 2:00 p.m., Eastern time 4:00 p.m., Eastern time
</TABLE>

20
<PAGE>

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

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

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

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

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

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

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<PAGE>

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

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

PURCHASE AND REDEMPTION PROCEDURES

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

INITIAL PURCHASE OF SHARES

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

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

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

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

22
<PAGE>

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

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

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

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

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

SUBSEQUENT PURCHASES OF SHARES

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

23
<PAGE>

shareholders may authorize amounts of $250 or more to be debited from their bank
account and invested in the Fund monthly or quarterly. Shareholders may
terminate their automatic investments or change the amount to be invested at any
time by written notification to the Transfer Agent.

REDEMPTION OF SHARES

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

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

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

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

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

24
<PAGE>

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

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

EXCHANGES

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

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

The Trust (and Federal tax law) treats an exchange as a redemption of the shares
owned and the purchase of the shares of the fund being acquired. Accordingly, a
shareholder may realize a capital gain or loss with respect to the shares
redeemed. Redemptions and purchases are effected at the respective net asset
values of the two funds as next determined following receipt of proper
instructions and all necessary supporting documents by the fund whose shares are
being exchanged. The exchange privilege may be modified materially or terminated
by the Trust at any time upon 60 days' notice to shareholders.

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

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

25
<PAGE>

the shareholder's shares are registered and the shareholder's social security or
taxpayer identification number.

6. DISTRIBUTIONS AND TAX MATTERS

DISTRIBUTIONS

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

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

TAXES

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

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

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

DAILY ASSETS MUNICIPAL FUND. Distributions paid by Daily Assets Municipal Fund
out of federally tax-exempt interest income earned by the Fund ("exempt-interest
dividends") generally

26
<PAGE>

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

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

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

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

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

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

27
<PAGE>

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

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

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

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

7. OTHER INFORMATION

PERFORMANCE INFORMATION

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

28
<PAGE>

market performance. The comparative material found in a Fund's advertisements,
sales literature, or reports to shareholders may contain performance rankings.
This material is not to be considered representative or indicative of future
performance.

BANKING LAW MATTERS

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

DETERMINATION OF NET ASSET VALUE

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

THE TRUST AND ITS SHARES

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

29
<PAGE>

procedures for the removal of Trustees. There are no conversion or preemptive
rights in connection with shares of the Trust. All shares when issued in
accordance with the terms of the offering will be fully paid and nonassessable.
Shares are redeemable at net asset value, at the option of the shareholders. A
shareholder in a fund is entitled to the shareholder's pro rata share of all
distributions arising from that fund's assets and, upon redeeming shares, will
receive the portion of the fund's net assets represented by the redeemed shares.

From time to time certain shareholders may own a large percentage of shares of a
Fund. Accordingly, those shareholders may be able to greatly affect (if not
determine) the outcome of any shareholder vote.

FUND STRUCTURE

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

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

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

30
<PAGE>

and other applicable law, a Fund will solicit proxies from shareholders of the
Fund and will vote its interest in a Portfolio in proportion to the votes cast
by its shareholders. There can be no assurance that any issue that receives a
majority of the votes cast by a Fund's shareholders will receive a majority of
votes cast by all investors in the Portfolio.

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

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

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

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<PAGE>

PROSPECTUS
May __, 1998

FORUM FUNDS
Daily Assets Treasury Obligations Fund

Daily Assets Government Fund
(formerly Daily Assets Treasury Fund)
Daily Assets Government Obligations Fund
(formerly Daily Assets Government Fund)
Daily Assets Cash Fund
Daily Assets Municipal Fund

- --------------------------------------------------------------------------------
This Prospectus offers Institutional Service Shares of Daily Assets Treasury
Fund, Daily Assets Treasury Obligations Fund, Daily Assets Government Fund,
Daily Assets Cash Fund and Daily Assets Municipal Fund (each a "Fund"). Each
Fund is a diversified no-load, money market portfolio of Forum Funds (the
"Trust"), a registered, open-end, management investment company. Each Fund seeks
to provide its shareholders with high current income (which, in the case of
Daily Assets Municipal Fund, is exempt from federal income taxes) to the extent
consistent with the preservation of capital and the maintenance of liquidity.

DAILY ASSETS TREASURY OBLIGATIONS FUND invests substantially all of
its assets in obligations of the U.S. Treasury and in repurchase
agreements backed by these obligations.
DAILY ASSETS GOVERNMENT FUND invests substantially all of its assets
in obligations of the U.S. Government, its agencies and
instrumentalities with a view toward providing income that is
generally considered exempt from state and local income taxes.
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND invests substantially all of
its assets in obligations of the U.S. Government, its agencies and
instrumentalities and in repurchase agreements backed by these
obligations.
DAILY ASSETS CASH FUND invests in a broad spectrum of high-quality
money market instruments.
DAILY ASSETS MUNICIPAL FUND invests primarily in high-quality
obligations of the states, territories and possessions of the U.S. and
of their subdivisions, authorities and corporations ("municipal
securities") with a view toward providing income that is exempt from
federal income taxes.

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<PAGE>

Investors should read this Prospectus and retain it for future reference.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
TABLE OF CONTENTS
1. Prospectus Summary.............................. 5. Purchases and Redemptions of Shares.............
2. Financial Highlights............................ 6. Distributions and Tax Matters...................
3. Investment Objectives and Policies.............. 7. Other Information...............................
4. Management......................................
</TABLE>
- --------------------------------------------------------------------------------

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<PAGE>

1. PROSPECTUS SUMMARY

HIGHLIGHTS OF THE FUNDS

This prospectus offers shares of the Institutional Service class ("Institutional
Service Shares") of each of the Funds. Institutional Services Shares are offered
solely through banks, trust companies and certain other financial institutions,
and their affiliates and correspondents, for investment of their funds or funds
for which they act in a fiduciary, agency or custodial capacity. The Funds
operate in accordance with the provisions of Rule 2a-7 under the Investment
Company Act of 1940 (the "1940 Act"). Each Fund invests all of its investable
assets in a separate portfolio (each a "Portfolio") of Core Trust (Delaware), an
open-end, management investment company ("Core Trust") as follows:

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

SHAREHOLDER SERVICING AND DISTRIBUTION. The Trust has adopted a Shareholder
Service Plan relating to Institutional Service Shares under which FAS is
compensated for various shareholder servicing activities. See "Management -
Shareholder Servicing" and "- Administration and Distribution."

PURCHASES AND REDEMPTIONS. The minimum initial investment in Institutional
Service Shares is $100,000. Institutional Service Shares may be purchased and
redeemed Monday through Friday, between 9:00 a.m. and 6:00 p.m., Eastern time,
except on Federal holidays and days that the Federal Reserve Bank of San
Francisco (Boston in the case of Daily Assets Government Fund and Daily Assets
Municipal Fund) is closed ("Fund Business Days"). To be eligible to receive
that day's income, purchase orders must be received by the Transfer Agent in
good order no later

34
<PAGE>

than 2:00 p.m., Eastern time (noon in the case of Daily Assets Government Fund
and Daily Assets Municipal Fund). Shareholders may have redemption proceeds
over $5,000 transferred by bank wire to a designated bank account. To be able to
receive redemption proceeds by wire on the day of the redemption, redemption
orders must be received by the Transfer Agent in good order no later than 2:00
p.m., Eastern time (noon in the case of Daily Assets Government Fund and Daily
Assets Municipal Fund). All times may be changed without notice by Fund
management due to market activities. See "Purchase and Redemption of Shares."

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

EXPENSES OF INVESTING IN THE FUNDS

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

ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)(1)
<TABLE>
<S> <C> <C> <C> <C> <C>

Daily Assets Daily Assets Daily Assets Daily Assets Daily Assets
Treasury Government Government Cash Municipal
Obligations Fund Fund Obligations Fund Fund Fund
------------------ -------- ---------------- -------- ------------
Management Fees(2) 0.14% 0.15% 0.14% 0.14% 0.15%
Other Expenses(3)
(after expense reimbursements) 0.31% 0.30% 0.31% 0.31% 0.30%
----- ----- ----- ----- -----
Total Operating Expenses 0.45% 0.45% 0.45% 0.45% 0.45%
</TABLE>

(1) For a further description of the various expenses incurred in the operation
of the Funds and the Portfolios, see "Management." The amount of fees and
expenses for Daily Assets Government Fund and Daily Assets Cash Fund is based on
the Fund's expenses for its last fiscal year ended

35
<PAGE>

August 31, 1997 restated to reflect current fees; the amount of expenses for
each other Fund is based on estimated annualized expenses for those Funds'
fiscal year ending August 31, 1998. Each Fund's expenses include the Fund's pro
rata portion of all expenses of its corresponding Portfolio, which are borne
indirectly by Fund shareholders.
(2) Management Fees include all administration fees and investment advisory fees
incurred by the Funds and the Portfolios; as long as its assets are invested in
a Portfolio, a Fund pays no investment advisory fees directly.
(3) Absent estimated reimbursements by Forum Advisors and its affiliates, Other
Expenses and Total Fund Operating Expenses would be: 0.36% and 0.50%,
respectively, for Daily Assets Treasury Obligations Fund; 0.40% and 0.55%,
respectively, for Daily Assets Government Fund; 0.40% and 0.54%, respectively,
for Daily Assets Government Obligations Fund; 0.43% and 0.57%, respectively, for
Daily Assets Cash Fund; 0.43% and 0.58%, respectively, for Daily Assets
Municipal Fund. Expense reimbursements are voluntary and may be reduced or
eliminated at any time.

EXAMPLE

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

One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Each Fund $5 $14 $25 $57

2. FINANCIAL HIGHLIGHTS

The following information represents selected data for a single outstanding
Institutional Service Share of each Fund other than Daily Assets Municipal Fund
which commenced operations on ________. Information for the period ended August
31, 1997, was audited by___________, independent auditors. Information for prior
periods was audited by other independent auditors and information for the period
ended February 28, 1998 is unaudited. The financial statements and independent
auditors' report thereon for the fiscal year ended August 31, 1997 and the
financial statements for the semi-annual period ended February 28, 1998 are
incorporated by reference into the SAI and may be obtained from the Trust
without charge.

As of February 28, 1998, Treasury Cash Portfolio, Government Portfolio,
Government Cash Portfolio and Cash Portfolio had net assets of $_______;
$_______; $_______ and $_______, respectively.

36
<PAGE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Ratio to Average Net Assets
---------------------------
Beginning Distributions Ending Net
Net Asset Net From Net Asset Net
Value Per Investment Investment Value Net Investment
Share Income Income Per Share Expenses Income
----- ------ ------ --------- -------- ------
DAILY ASSETS TREASURY OBLIGATIONS FUND
INSTITUTIONAL SERVICE SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00

DAILY ASSETS GOVERNMENT FUND
INSTITUTIONAL SERVICE SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00
April 1, 1997 to August 31, 1997 1.00 0.02 (0.02) 1.00 0.50%(2) 4.76%(2)
Year Ended March 31, 1997 1.00 0.05 (0.05) 1.00 0.50% 4.70%
Year Ended March 31, 1996 1.00 0.05 (0.05) 1.00 0.50% 5.01%
Year Ended March 31, 1995 1.00 0.04 (0.04) 1.00 0.37% 4.45%
Year Ended March 31, 1994 1.00 0.03 (0.03) 1.00 0.33% 2.82%
July 1, 1992 to March 31, 1993 1.00 0.02 (0.02) 1.00 0.32%(2) 2.92%(2)

DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
INSTITUTIONAL SERVICE SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00

DAILY ASSETS CASH FUND
INSTITUTIONAL SERVICE SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00
October 1, 1996 to August 31, 1997 1.00 0.05 (0.05) 1.00 0.52%(2) 5.06(2)%

</TABLE>

Ratio of

Net Assets Gross
End of Expenses
Period to Average
Total (000s Net Assets
Return Omitted) (1)
------ -------- -------

2.01% 44,116 0.95%(2)
4.80% 43,975 0.99%
5.18% 43,103 1.06%
4.45% 36,329 1.10%
2.83% 26,505 1.17%
3.13%(2) 4,687 2.43%(2)

4.70% 12,076 1.22%(2)
</TABLE>

37
<PAGE>

3. INVESTMENT OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE

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

INVESTMENT POLICIES

38
<PAGE>

various privately operated facilities that is backed only by the assets and
revenues of the non-governmental user, the non-governmental user will be deemed
to be the sole issuer of the security.

DAILY ASSETS TREASURY OBLIGATIONS FUND

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

DAILY ASSETS GOVERNMENT FUND

The U.S. Government Securities in which the Portfolio may invest include
securities supported primarily or solely by the creditworthiness of the issuer.
There is no guarantee that the U.S.

39
<PAGE>

DAILY ASSETS GOVERNMENT OBLIGATIONS FUND

DAILY ASSETS CASH FUND

40
<PAGE>

DAILY ASSETS MUNICIPAL FUND

41
<PAGE>

42
<PAGE>

ADDITIONAL INVESTMENT POLICIES

43
<PAGE>

44
<PAGE>

4. MANAGEMENT

ADMINISTRATION AND DISTRIBUTION

45
<PAGE>

provided administration services to registered investment companies with assets
of approximately $30 billion.

INVESTMENT ADVISER

SHAREHOLDER SERVICING

TRANSFER AND DIVIDEND DISBURSING AGENT. Shareholder inquiries and communications
concerning the Funds may be directed to the Transfer Agent at the address and
telephone numbers on the first page of this Prospectus. The Transfer Agent
maintains an account for each shareholder of the Funds (unless such accounts are
maintained by sub-transfer agents or processing agents) and performs other
transfer agency and related functions. The Transfer Agent is authorized to
subcontract any or all of its functions to one or more qualified sub-transfer
agents or processing agents, which may be its affiliates, who agree to comply
with the terms of the Transfer Agent's agreement with the Trust. The Transfer
Agent may pay those agents for their services, but no such payment will increase
the Transfer Agent's compensation from the Trust.

46
<PAGE>

For its services, the Transfer Agent is paid a transfer agent fee at an annual
rate of 0.10% of the average daily net assets of each Fund attributable to
Institutional Service Shares plus $12,000 per year for each Fund and certain
account and additional class charges and is reimbursed for certain expenses
incurred on behalf of the Funds.

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

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

EXPENSES OF THE FUNDS

5. PURCHASES AND REDEMPTIONS OF SHARES

GENERAL INFORMATION

47
<PAGE>

privilege, upon appropriate notice to shareholders, and may charge a fee for
certain shareholder services, although no such fees are currently contemplated.

Fund shares become entitled to receive distributions on the day the purchase
order is accepted if the order and payment are received by the Transfer Agent as
follows:
<TABLE>
<S> <C> <C>
Order Must be Received by Payment Must be Received by
------------------------- ---------------------------

Daily Assets Government Fund and

Daily Assets Municipal Fund 12:00 p.m., Eastern time 4:00 p.m., Eastern time
All other Funds 2:00 p.m., Eastern time 4:00 p.m., Eastern time
</TABLE>

48
<PAGE>

the Trust may advance the time by which the Transfer Agent must receive
completed wire redemption orders.

PURCHASE AND REDEMPTION PROCEDURES

INITIAL PURCHASE OF SHARES

There is a $100,000 minimum for total initial investments through of by any
financial institution in each Fund.

49
<PAGE>

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

50
<PAGE>

their institution. Investors who purchase Fund shares through a Processing
Organization may or may not be the shareholder of record and, subject to their
institution's and the Fund's procedures, may have Fund shares transferred into
their name. Certain Processing Organizations may enter purchase orders with
payment to follow.

SUBSEQUENT PURCHASES OF SHARES

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

REDEMPTION OF SHARES

51
<PAGE>

EXCHANGES

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

52
<PAGE>

may only exchange into a Fund if that Fund's shares may legally be sold in the
shareholder's state of residence.

The Trust (and Federal tax law) treats an exchange as a redemption of the shares
owned and the purchase of the shares of the fund being acquired. Accordingly, a
shareholder may realize a capital gain or loss with respect to the shares
redeemed. Redemptions and purchases are effected at the respective net asset
values of the two Funds as next determined following receipt of proper
instructions and all necessary supporting documents by the Fund whose shares are
being exchanged. The exchange privilege may be modified materially or terminated
by the Trust at any time upon 60 days' notice to shareholders.

6. DISTRIBUTIONS AND TAX MATTERS

DISTRIBUTIONS

53
<PAGE>

TAXES

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

54
<PAGE>

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

The foregoing is only a summary of some of the important Federal and state tax
considerations generally affecting the Funds and their shareholders. There may
be other Federal, state or local tax

55
<PAGE>

considerations applicable to a particular investor. Prospective investors are
urged to consult their tax advisers.

7. OTHER INFORMATION

PERFORMANCE INFORMATION

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

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

BANKING LAW MATTERS

DETERMINATION OF NET ASSET VALUE

56
<PAGE>

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

THE TRUST AND ITS SHARES

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

FUND STRUCTURE

OTHER CLASSES OF SHARES. In addition to Institutional Service Shares, each Fund
may create and issue shares of other classes of securities. Each Fund currently
has two other classes of shares authorized, Institutional Shares and Investor
Shares. Institutional Shares have an investment minimum of $1,000,000. Investor
Shares are offered to the general public, have a $10,000 minimum investment and
bear shareholder service and distribution fees. Institutional Shares incur less
expenses and Investor Shares incur more expenses than Institutional Service
Shares. See, "Additional Information" below. Except for certain differences,
each share of each class represents an undivided, proportionate interest in a
Fund. Each share of each Fund is entitled to

57
<PAGE>

participate equally in distributions and the proceeds of any liquidation of that
Fund except that, due to the differing expenses borne by the various classes,
the amount of distributions will differ among the classes.

58
<PAGE>

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

59
<PAGE>

PROSPECTUS
May __, 1998

FORUM FUNDS
Daily Assets Treasury Obligations Fund

Daily Assets Government Fund
(formerly Daily Assets Treasury Fund)
Daily Assets Government Obligations Fund
(formerly Daily Assets Government Fund)
Daily Assets Cash Fund
Daily Assets Municipal Fund

- --------------------------------------------------------------------------------
This Prospectus offers Investor Shares of Daily Assets Treasury Fund, Daily
Assets Treasury Obligations Fund, Daily Assets Government Fund, Daily Assets
Cash Fund and Daily Assets Municipal Fund (each a "Fund"). Each Fund is a
diversified no-load, money market portfolio of Forum Funds (the "Trust"), a
registered, open-end, management investment company. Each Fund seeks to provide
its shareholders with high current income (which, in the case of Daily Assets
Municipal Fund, is exempt from federal income taxes) to the extent consistent
with the preservation of capital and the maintenance of liquidity.

DAILY ASSETS TREASURY OBLIGATIONS FUND invests substantially all of
its assets in obligations of the U.S. Treasury and in repurchase
agreements backed by these obligations.
DAILY ASSETS GOVERNMENT FUND invests substantially all of its assets
in obligations of the U.S. Government, its agencies and
instrumentalities with a view toward providing income that is
generally considered exempt from state and local income taxes.
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND invests substantially all of
its assets in obligations of the U.S. Government, its agencies and
instrumentalities and in repurchase agreements backed by these
obligations.
DAILY ASSETS CASH FUND invests in a broad spectrum of high-quality
money market instruments.
DAILY ASSETS MUNICIPAL FUND invests primarily in high-quality
obligations of the states, territories and possessions of the U.S. and
of their subdivisions, authorities and corporations ("municipal
securities") with a view toward providing income that is exempt from
federal income taxes.

This Prospectus sets forth concisely the information concerning the Trust and
the Funds that a prospective investor should know before investing. The Trust
has filed with the Securities and Exchange Commission ("SEC") a Statement of
Additional Information dated May __, 1998 (the "SAI"), which contains more
detailed information about the Trust and the Funds and is available together
with other related materials for reference on the SEC's Internet Web Site
(http://www.sec.gov). The SAI, which is incorporated into this Prospectus by
reference, also is available without charge by contacting the Funds' transfer
agent, Forum Financial Corp., at P.O. Box 446, Portland, Maine 04112, (207)
879-0001 or (800) 94FORUM.

Investors should read this Prospectus and retain it for future reference.

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

60
<PAGE>

1. Prospectus Summary.............................. 5. Purchases and Redemptions of Shares.............
2. Financial Highlights............................ 6. Distributions and Tax Matters...................
3. Investment Objectives and Policies.............. 7. Other Information...............................
4. Management......................................

</TABLE>
- --------------------------------------------------------------------------------

61
<PAGE>

1. PROSPECTUS SUMMARY

HIGHLIGHTS OF THE FUNDS

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

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

MANAGEMENT. Forum Administrative Services, LLC ("FAS") supervises the overall
management of the Funds and the Portfolios and Forum Financial Services, Inc.
("FFSI") is the distributor of the Funds' shares. Forum Investment Advisors, LLC
("Forum Advisors") is the investment adviser of each Portfolio and and provides
professional management of the Portfolios' investments. The Funds' transfer
agent, dividend disbursing agent and shareholder servicing agent is Forum
Financial Corp. (the "Transfer Agent"). See "Management" for a description of
the services provided and fees charged to the Funds.

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

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

EXCHANGES. Shareholders of a Fund may exchange Investor Shares without charge
for Investor Shares of the other Funds and for the shares of other certain other
mutual funds not offered by this Prospectus. See "Purchases and Redemptions of
Shares - Exchanges."

62
<PAGE>

EXPENSES OF INVESTING IN THE FUNDS

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

EXPENSES OF INVESTING IN THE FUNDS

ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)(1)
<TABLE>
<S> <C> <C> <C> <C> <C>

Other Expenses(3)

(after expense reimbursements) 0.46% 0.45% 0.46% 0.46% 0.45%
----- ----- ----- ----- -----
Total Operating Expenses 0.75% 0.75% 0.75% 0.75% 0.75%
</TABLE>

(1) For a further description of the various expenses incurred in the operation
of the Funds and the Portfolios, see "Management." The amount of fees and
expenses for each Fund is based on estimated annualized expenses for the Funds'
fiscal year ending August 31, 1998. Each Fund's expenses include the Fund's pro
rata portion of all expenses of its corresponding Portfolio, which are borne
indirectly by Fund shareholders.
(2) Management Fees include all administration fees and investment advisory fees
incurred by the Funds and the Portfolios; as long as its assets are invested in
a Portfolio, a Fund pays no investment advisory fees directly.
(3) Absent estimated reimbursements by Forum Advisors and its affiliates, Other
Expenses and Total Fund Operating Expenses would be: 0.70% and 0.99%,
respectively, for Daily Assets Treasury Obligations Fund; 0.75% and 1.05%,
respectively, for Daily Assets Government Fund; 0.75% and 1.04%, respectively,
for Daily Assets Government Obligations Fund; 0.80% and 1.09%, respectively, for
Daily Assets Cash Fund; 0.80% and 1.10%, respectively, for Daily Assets
Municipal Fund. Expense reimbursements are voluntary and may be reduced or
eliminated at any time.

EXAMPLE

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

One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
Each Fund $8 $24 $42 $93

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<PAGE>

2. FINANCIAL HIGHLIGHTS

As of the date hereof, Investor Shares were not offered. The following
information represents selected data for a single outstanding Institutional
Service Share of Daily Assets Treasury Obligations Fund, Daily Assets Government
Fund, Daily Assets Government Obligations Fund and Daily Assets Cash Fund. Those
classes were the first offered by the respective Funds and, accordingly,
represent data since each Fund's inception. Information for the period ended
August 31, 1997, was audited by __________, independent auditors. Information
for prior periods was audited by other independent auditors and information for
the period ended February 28, 1998 is unaudited. The financial statements and
independent auditors' report thereon for the fiscal year ended August 31, 1997
and the financial statements for the semi-annual period ended February 28, 1998
are incorporated by reference into the SAI and may be obtained from the Trust
without charge. Daily Assets Municipal Fund commenced operations on ________.

As of February 28, 1998, Treasury Cash Portfolio, Government Portfolio,
Government Cash Portfolio and Cash Portfolio had net assets of $_______;
$_______; $_______ and $_______, respectively.

64
<PAGE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Ratio to Average Net Assets
---------------------------
Beginning Distributions Ending Net
Net Asset Net From Net Asset Net
Value Per Investment Investment Value Net Investment
Share Income Income Per Share Expenses Income
----- ------ ------ --------- -------- ------
DAILY ASSETS TREASURY OBLIGATIONS FUND
INVESTOR SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00

DAILY ASSETS GOVERNMENT FUND
INVESTOR SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00
April 1, 1997 to August 31, 1997 1.00 0.02 (0.02) 1.00 0.50%(2) 4.76%(2)
Year Ended March 31, 1997 1.00 0.05 (0.05) 1.00 0.50% 4.70%
Year Ended March 31, 1996 1.00 0.05 (0.05) 1.00 0.50% 5.01%
Year Ended March 31, 1995 1.00 0.04 (0.04) 1.00 0.37% 4.45%
Year Ended March 31, 1994 1.00 0.03 (0.03) 1.00 0.33% 2.82%
July 1, 1992 to March 31, 1993 1.00 0.02 (0.02) 1.00 0.32%(2) 2.92%(2)

DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
INVESTOR SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00

DAILY ASSETS CASH FUND
INVESTOR SHARES
Sept. 1, 1997 to February 28, 1998 $1.00 $1.00
October 1, 1996 to August 31, 1997 1.00 0.05 (0.05) 1.00 0.52%(2) 5.06(2)%

</TABLE>

Ratio of

Net Assets Gross
End of Expenses
Period to Average
Total (000s Net Assets
Return Omitted) (1)
------ -------- -------

2.01% 44,116 0.95%(2)
4.80% 43,975 0.99%
5.18% 43,103 1.06%
4.45% 36,329 1.10%
2.83% 26,505 1.17%
3.13%(2) 4,687 2.43%(2)

4.70% 12,076 1.22%(2)
</TABLE>

65
<PAGE>

3. INVESTMENT OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE

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

INVESTMENT POLICIES

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

66
<PAGE>

DAILY ASSETS TREASURY OBLIGATIONS FUND

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

DAILY ASSETS GOVERNMENT FUND

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

DAILY ASSETS GOVERNMENT OBLIGATIONS FUND

DAILY ASSETS CASH FUND

67
<PAGE>

international trade. Time deposits are non-negotiable deposits with a banking
institution that earn a specified interest rate over a given period.
Certificates of deposit and fixed time deposits, which are payable at the stated
maturity date and bear a fixed rate of interest, generally may be withdrawn on
demand by the Portfolio but may be subject to early withdrawal penalties which
could reduce the Portfolio's yield.

DAILY ASSETS MUNICIPAL FUND

68
<PAGE>

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

ADDITIONAL INVESTMENT POLICIES

69
<PAGE>

Portfolio's, as applicable, outstanding voting securities (as defined in the
1940 Act). Except as otherwise indicated herein or in the SAI, investment
policies of a Fund or a Portfolio may be changed by the applicable board of
trustees without shareholder approval. Each Portfolio is permitted to hold cash
in any amount pending investment in securities and may invest in other
investment companies that intend to comply with Rule 2a-7 and have substantially
similar investment objectives and policies. A further description of the Funds'
and the Portfolios' investment policies is contained in the SAI.

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<PAGE>

4. MANAGEMENT

ADMINISTRATION AND DISTRIBUTION

FFSI acts as the agent of the Trust in connection with the offering of shares of
the Funds. FFSI is a registered broker-dealer and is a member of the National
Association of Securities Dealers, Inc. In order to facilitate the distribution
of Investor Shares, the Trust has adopted a plan of distribution (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act with respect to each Fund's Investor
Shares. Under the Plan, Forum receives a fee at an annual rate of 0.15% of the
average daily net assets of each Fund attributable to Investor Shares as
compensation for Forum's services as distributor. From this amount, Forum may
make payments to various financial institutions, including broker-dealers, banks
and trust companies as compensation for services or reimbursement of expenses in
connection with the distribution of shares or the provision of various
shareholder services. If the distribution related expenses of Forum exceed its
Rule 12b-1 fees for any Fund, the Fund will not be obligated to pay Forum an
additional amount and if Forum's distribution related expenses are less than its
Rule 12b-1 fees, Forum will realize a profit.

INVESTMENT ADVISER

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<PAGE>

Portland, Maine 04101, provides investment advisory services to five other
mutual funds. Prior to January 2, 1998, Linden Asset Management, Inc. ("Linden")
served as investment adviser to Treasury Cash Portfolio, Government Cash
Portfolio and Cash Portfolio and provided professional management of those
Portfolios' investments, and Forum Advisors, Inc. served as investment adviser
to Government Portfolio and provided professional management of that Portfolio's
investments. Linden and Forum Advisors, Inc. also acted as investment
subadvisors to each Portfolio that they did not manage on a daily basis. On
January 2, 1998, Forum Advisors, Inc. acquired Linden and reorganized into a new
company named Forum Investment Advisors, LLC.

SHAREHOLDER SERVICING

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

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<PAGE>

EXPENSES OF THE FUNDS

5. PURCHASES AND REDEMPTIONS OF SHARES

GENERAL INFORMATION

Fund shares become entitled to receive distributions on the day the purchase
order is accepted if the order and payment are received by the Transfer Agent as
follows:
<TABLE>
<S> <C> <C>
Order Must be Received by Payment Must be Received by
------------------------- ---------------------------

Daily Assets Government Fund and
Daily Assets Municipal Fund 12:00 p.m., Eastern time 4:00 p.m., Eastern time
All other Funds 2:00 p.m., Eastern time 4:00 p.m., Eastern time
</TABLE>

For wire redemption orders received after 12:00 p.m., Eastern time, in the case
of Daily Assets Government Fund

73
<PAGE>

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

PURCHASE AND REDEMPTION PROCEDURES

INITIAL PURCHASE OF SHARES

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

BY BANK WIRE. To make an initial investment in a Fund using the wire system for
transmittal of money among banks,

74
<PAGE>

an investor should first telephone the Trust at 800-94FORUM (800-943-6786) or
(207) 879-0001 to obtain an account number. The investor should then instruct a
bank to wire the investor's money immediately to:

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

SUBSEQUENT PURCHASES OF SHARES

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

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

REDEMPTION OF SHARES

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

EXCHANGES

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

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make, but each Fund reserves the right to limit excessive exchanges by any
shareholder. See "Additional Purchase and Redemption Information" in the SAI.

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

INDIVIDUAL RETIREMENT ACCOUNTS

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

6. DISTRIBUTIONS AND TAX MATTERS

DISTRIBUTIONS

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

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

TAXES

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

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

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7. OTHER INFORMATION

PERFORMANCE INFORMATION

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

BANKING LAW MATTERS

Banking laws and regulations generally permit a bank or bank affiliate to
purchase shares of an investment company as

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

DETERMINATION OF NET ASSET VALUE

THE TRUST AND ITS SHARES

FUND STRUCTURE

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

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FORUM FUNDS

DAILY ASSETS TREASURY OBLIGATIONS FUND

DAILY ASSETS GOVERNMENT FUND
(FORMERLY KNOWN AS DAILY ASSETS TREASURY FUND)
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
(FORMERLY KNOWN AS DAILY ASSETS GOVERNMENT FUND)

DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND

Account Information and
Shareholder Servicing: Distributor:
Forum Financial Corp. Forum Financial Services, Inc.
P.O. Box 446 Two Portland Square
Portland, Maine 04112 Portland, Maine 04101
(207) 879-0001 (207) 879-1900
- ------------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION
May __, 1998

This Statement of Additional Information supplements the Prospectuses dated May
__, 1998, offering Investor Shares, Institutional Service Shares and
Institutional Shares of Daily Assets Treasury Obligations Fund, Daily Assets
Government Fund, Daily Assets Government Obligations Fund, Daily Assets Cash
Fund and Daily Assets Municipal Fund, five portfolios of the Trust, and should
be read only in conjunction with the applicable Prospectus, a copy of which may
be obtained by an investor without charge by contacting the Trust's Distributor
at the address listed above.

TABLE OF CONTENTS
PAGE

1. General
2. Investment Policies
3. Investment Limitations
4. Investment by Financial Institutions
5. Performance Data
6. Management
7. Determination of Net Asset Value
8. Portfolio Transactions
9. Additional Purchase and Redemption Information
10. Taxation
11. Other Information
12. Financial Statements

Appendix A - Description of Securities Ratings
Appendix B - Performance Information
Appendix C - Miscellaneous Tables

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.

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1. GENERAL

THE TRUST

The Trust is registered with the SEC as an open-end, management, investment
company and was organized as a business trust under the laws of the State of
Delaware on August 29, 1995. On January 5, 1996 the Trust succeeded to the
assets and liabilities of Forum Funds, Inc. Forum Funds, Inc. was incorporated
on March 24, 1980 and assumed the name of Forum Funds, Inc. on March 16, 1987.
The Board has the authority to issue an unlimited number of shares of beneficial
interest of separate series with no par value per share and to create separate
classes of shares within each series. The Trust currently offers shares of 26
series. The series of the Trust are as follows:

<TABLE>
<S> <C> <C>
Daily Assets Treasury Obligations Fund Payson Value Fund
Daily Assets Government Fund Payson Balanced Fund.
Daily Assets Government Obligations Fund
Daily Assets Cash Fund Austin Global Equity Fund
Daily Assets Municipal Fund Oak Hall Equity Fund

Investors Bond Fund Quadra Limited Maturity Treasury Fund
TaxSaver Bond Fund Quadra Value Equity Fund
Investors High Grade Bond Fund Quadra Growth Fund
Maine Municipal Bond Fund Quadra International Equity Fund
New Hampshire Bond Fund Quadra Opportunistic Bond Fund

Investors Index Fund Polaris Global Value Fund
Investors Equity Fund
Investors Growth Fund
Small Company Opportunities Fund
International Fund
Emerging Markets Fund
</TABLE>

DEFINITIONS

As used in this Statement of Additional Information, the following terms shall
have the meanings listed:

"Adviser" means Forum Investment Advisors, LLC.

"Board" means the Board of Trustees of the Trust.

"Core Trust" means Core Trust (Delaware).

"Core Trust Board" means the Board of Trustees of Core Trust.

"FAS" means Forum Administrative Services, LLC

"FFC" means Forum Financial Corp.

"FFSI" means Forum Financial Services, Inc.

"Forum Accounting" means Forum Accounting Services, LLC.

"Fund" means Daily Assets Treasury Obligations Fund, Daily Assets Government
Fund, Daily Assets Government Obligations Fund, Daily Assets Cash Fund or Daily
Assets Municipal Fund.

"Fund Business Day" has the meaning ascribed thereto in the current Prospectus
of the Funds.

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"NRSRO" means a nationally recognized statistical rating organization.

"Portfolio" means Treasury Cash Portfolio, Government Portfolio, Government Cash
Portfolio, Cash Portfolio or Municipal Cash Portfolio, each a portfolio of Core
Trust.

"SAI" means this Statement of Additional Information.

"SEC" means the U.S. Securities and Exchange Commission.

"Treasury Securities" has the meaning ascribed thereto by the current Prospectus
of the Funds.

"Trust" means Forum Funds.

"U.S. Government Securities" has the meaning ascribed thereto by the current
Prospectus of the Funds.

"1940 Act" means the Investment Company Act of 1940, as amended.

2. INVESTMENT POLICIES

Each Fund currently seeks to achieve its investment objective by investing all
of its investable assets in its corresponding Portfolio. The corresponding
Portfolios of each Fund are:

Fund Portfolio
---- ---------
Daily Assets Treasury Obligations Fund Treasury Cash Portfolio
Daily Assets Government Fund Government Portfolio
Daily Assets Government Obligations Fund Government Cash Portfolio
Daily Assets Cash Fund Cash Portfolio
Daily Assets Municipal Fund Municipal Cash Portfolio

Each Fund has an investment policy that allows it to invest all of its
investable assets in its corresponding Portfolio. All other investment policies
of each Fund and its corresponding Portfolio are identical. Therefore, although
this and the following sections provide supplemental information regarding the
investment policies of the Portfolios (and the responsibilities of the Core
Trust Board), they apply equally to the investment policies of the Funds (and
the responsibilities of the Board). Information with respect to Daily Assets
Government Fund for periods prior to December 5, 1995 (for instance, investment
advisory fees paid), the date that Fund began investing in Treasury Portfolio,
reflects information with respect to the Fund and the Fund's direct investment
in securities.

Debt securities with longer maturities tend to produce higher yields and are
generally subject to greater price movements than obligations with shorter
maturities. An increase in interest rates will generally reduce the market value
of portfolio investments, and a decline in interest rates will generally
increase the value of portfolio investments.

Each Portfolio invests at least 95% of its total assets in securities in the
highest rating category (as determined pursuant to Rule 2a-7 under the 1940
Act).

Government Cash Portfolio and Cash Portfolio currently are prohibited from
purchasing any security issued by the Federal Home Loan Mortgage Corporation.
This does not prohibit the Portfolios from entering into repurchase agreements
collateralized with securities issued by the Federal Home Loan Mortgage
Corporation.

Except for U.S. Government Securities and to the limited extent otherwise
permitted by Rule 2a-7 under the 1940 Act, the Portfolios may not invest more
than five percent of their total assets in (i) the securities of any one issuer
or (ii) securities that are rated (or are issued by an issuer with comparable
outstanding short-term debt that is rated) in the second highest rating category
or are unrated and determined by an Adviser to be of comparable quality.

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RATINGS AS INVESTMENT CRITERIA

Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation
("S&P") and other NRSROs are private services that provide ratings of the credit
quality of debt obligations. A description of the higher quality ratings
assigned to debt securities by several NRSROs is included in Appendix A to this
SAI. The Portfolios use these ratings in determining whether to purchase, sell
or hold a security. It should be emphasized, however, that ratings are general
and are not absolute standards of quality. Consequently, securities with the
same maturity, interest rate and rating may have different market prices.
Subsequent to its purchase by a Portfolio, an issue of securities may cease to
be rated or its rating may be reduced. A Portfolio's Adviser, and in certain
cases the Core Trust Board, will consider such an event in determining whether
the Portfolio should continue to hold the obligation. Credit ratings attempt to
evaluate the safety of principal and interest payments and do not evaluate the
risks of fluctuations in market value. Also, rating agencies may fail to make
timely changes in credit ratings in response to developments and events, so that
an issuer's current financial condition may be better or worse than the rating
indicates.

ADJUSTABLE RATE MORTGAGE/ASSET BACKED SECURITIES

The Portfolios may purchase adjustable rate mortgage backed or other asset
backed securities that are U.S. Government Securities. Treasury Cash Portfolio
may purchase mortgage backed or asset backed securities that are U.S. Treasury
Securities. These types of securities directly or indirectly represent a
participation in, or are secured by and payable from, adjustable rate mortgages
or other loans which may be secured by real estate or other assets. Unlike
traditional debt instruments, payments on these securities include both interest
and a partial payment of principal. Prepayments of the principal of underlying
loans may shorten the effective maturities of these securities. Some adjustable
rate securities (or the underlying loans) are subject to caps or floors that
limit the maximum change in interest rate during a specified period or over the
life of the security.

Adjustable rate mortgage backed securities ("MBSs") are securities that have
interest rates that are reset at periodic intervals, usually by reference to
some interest rate index or market interest rate. MBSs represent interests in
pools of mortgages made by lenders such as commercial banks, savings
associations, mortgage bankers and mortgage brokers and may be issued by
governmental or government-related entities or by non-governmental entities such
as commercial banks, savings associations, mortgage bankers and other secondary
market issuers.

MBSs differ from other forms of debt securities, which normally provide for
periodic payment of interest in fixed amounts with principal payments at
maturity or specified call dates in that MBSs provide periodic payments which
consist of interest and, in most cases, principal. In effect, these payments are
a "pass-through" of the periodic payments and optional prepayments made by the
individual borrowers on their mortgage loans, net of any fees paid to the issuer
or guarantor of such securities. Additional payments to holders of MBSs are
caused by prepayments resulting from the sale of the underlying property or the
refinancing or foreclosure of the underlying mortgage loans. Such prepayments
may significantly shorten the effective maturities of MBSs, and occur more often
during periods of declining interest rates.

Although the rate adjustment feature of MBSs may act as a buffer to reduce sharp
changes in the value of MBSs, these securities are still subject to changes in
value based on changes in market interest rates or changes in the issuer's
creditworthiness. Because the interest rate is reset only periodically, changes
in the interest rate on MBSs may lag behind changes in prevailing market
interest rates. Also, some MBSs (or the underlying mortgages) are subject to
caps or floors that limit the maximum change in interest rate during a specified
period or over the life of the security.

During periods of declining interest rates, income to the Portfolios derived
from mortgages which are not prepaid will decrease as the coupon rate resets
along with the decline in interest rates in contrast to the income on fixed-rate
mortgages, which will remain constant. At times, some of the MBSs in which the
Portfolios will invest will have higher-than-market interest rates, and will
therefore be purchased at a premium above their par value. Unscheduled

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prepayments, which are made at par, will cause the Portfolios to suffer a loss
equal to the unamortized premium, if any.

During periods of rising interest rates, changes in the coupon rates of the
mortgages underlying the Portfolios' investments may lag behind changes in
market interest rates. This may result in a slightly lower value until the
coupons reset to market rates. Many MBSs in the Portfolios' portfolios will have
"caps" that limit the maximum amount by which the interest rate paid by the
borrower may change at each reset date or over the life of the loan and
fluctuation in interest rates above these levels could cause these securities to
"cap out" and to behave more like fixed-rate debt securities.

The Portfolios may purchase collateralized mortgage obligations ("CMOs"), which
are collateralized by MBSs or by pools of conventional mortgages. CMOs are
typically structured with a number of classes or series that have different
maturities and are generally retired in sequence. Each class of bonds receives
periodic interest payments according to the coupon rate on the bonds. However,
all monthly principal payments and any prepayments from the collateral pool are
paid first to the "Class 1" bondholders. The principal payments are such that
the Class 1 bonds will be completely repaid no later than, for example, five
years after the offering date. Thereafter, all payments of principal are
allocated to the next most senior class of bonds until that class of bonds has
been fully repaid. Although full payoff of each class of bonds is contractually
required by a certain date, any or all classes of bonds may be paid off sooner
than expected because of an acceleration in pre-payments of the obligations
comprising the collateral pool.

Since the inception of the mortgage-related pass-through security in 1970, the
market for these securities has expanded considerably. The size of the primary
issuance market and active participation in the secondary market by securities
dealers and many types of investors make government and government-related
pass-through pools highly liquid.

Governmental or private entities may create new types of MBSs in response to
changes in the market or changes in government regulation of such securities. As
new types of these securities are developed and offered to investors, the
Adviser may, consistent with the investment objective and policies of a
Portfolio, consider making investments in such new types of securities.

SMALL BUSINESS ADMINISTRATION SECURITIES. Government Cash Portfolio and Cash
Portfolio may purchase securities issued by the Small Business Administration
("SBA"). SBA securities are variable rate securities that carry the full faith
and credit of the United States Government, and generally have an interest rate
that resets monthly or quarterly based on a spread to the Prime rate. SBA
securities generally have maturities at issue of up to 30 years. No Portfolio
may purchase an SBA security if, immediately after the purchase, (i) the
Portfolio would have more than 15% of its net assets invested in SBA securities
or (ii) either the unamortized premium or unaccreted discount on SBA securities
held by the Portfolio divided by the sum of the premium or discount securities'
par amount, respectively, would exceed 2.5% (0.025).

WHEN-ISSUED SECURITIES AND DELAYED DELIVERY SECURITIES

Each Portfolio may purchase securities on a when-issued or delayed delivery
basis. In those cases, the purchase price and the interest rate payable on the
securities are fixed on the transaction date and delivery and payment may take
place a month or more after the date of the transaction. At the time a Portfolio
makes the commitment to purchase securities on a when-issued or delayed delivery
basis, the Portfolio will record the transactions as a purchase and thereafter
reflect the value each day of such securities in determining its net asset
value. If a Portfolio chooses to dispose of the right to acquire a when-issued
security prior to its acquisition, it could, as with the disposition of any
other portfolio obligation, incur a gain or loss due to market fluctuation.
Failure of an issuer to deliver the security may result in the Portfolio
incurring a loss or missing an opportunity to make an alternative investment.
When a Portfolio agrees to purchase a security on a when-issued or delayed
delivery basis, its custodian will set aside and maintain in a segregated
account cash, U.S. Government Securities or other liquid assets with a market
value at all times at least equal to the amount of its commitment.

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<PAGE>

Core Trust's custodian will set aside and maintain in a segregated account cash
and securities with a market value at all times equal to the amount of each
Portfolio's forward commitment obligations.

ILLIQUID SECURITIES

Each Portfolio may invest up to 10% of its net assets in illiquid securities.
The term "illiquid securities" for this purpose means repurchase agreements not
entitling the holder to payment of principal within seven days and securities
that are illiquid by virtue of legal or contractual restrictions on resale or
the absence of a readily available market.

The Core Trust Board has ultimate responsibility for determining whether
specific securities are liquid or illiquid. The Core Trust Board has delegated
the function of making day-to-day determinations of liquidity to the Advisers
and, with respect to certain types of restricted securities which may be deemed
to be liquid, has adopted guidelines to be followed by the Advisers. The
Advisers take into account a number of factors in reaching liquidity decisions,
including but not limited to (1) the frequency of trades and quotations for the
security; (2) the number of dealers willing to purchase or sell the security and
the number of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security; (4) the nature of the marketplace
trades, including the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer; (5) whether the security is
registered; and (6) if the security is not traded in the United States, whether
it can be freely traded in a liquid foreign securities market. The Advisers
monitor the liquidity of the securities in each Portfolio's portfolio and report
periodically to the Core Trust Board.

Certificates of deposit and other fixed time deposits that carry an early
withdrawal penalty or mature in greater than seven days are treated by the
Portfolio as illiquid securities if there is no readily available market for the
instrument.

REPURCHASE AGREEMENTS AND SECURITIES LENDING

In order to obtain additional income, the Portfolios may from time to time lend
securities from their portfolio to brokers, dealers and financial institutions.
Securities loans must be callable at any time and must be continuously secured
by collateral from the borrower in the form of cash or U.S. Government
Securities. The Portfolios receive fees in respect of securities loans from the
borrower or interest from investing the cash collateral. The Portfolios may pay
fees to arrange the loans. The Portfolios may not lend portfolio securities in
an amount greater than 33 1/3% of the value of their total assets.

In connection with entering into repurchase agreements and securities loans, the
Portfolios require continual maintenance by Core Trust's custodian of the market
value of the underlying collateral in amounts equal to, or in excess of, the
repurchase price plus the transaction costs (including loss of interest) that
the Portfolios could expect to incur upon liquidation of the collateral if the
counterparty defaults. The Portfolios' use of securities lending entails certain
risks not associated with direct investments in securities. For instance, in the
event that bankruptcy or similar proceedings were commenced against a
counterparty in these transactions or a counterparty defaulted on its
obligations, a Portfolio might suffer a loss. Failure by the other party to
deliver a security purchased by a Portfolio may result in a missed opportunity
to make an alternative investment. The Adviser monitors the creditworthiness of
counterparties to these transactions under the Core Trust Board's general
supervision and pursuant to specific Core Trust Board adopted procedures and
intend to enter into these transactions only when they believe the
counterparties present minimal credit risks and the income to be earned from the
transaction justifies the attendant risks.

VARIABLE AND FLOATING RATE SECURITIES

The yield of variable and floating rate securities varies in relation to changes
in specific money market rates, such as the Prime Rate. A "variable" interest
rate adjusts at predetermined intervals (for example, daily, weekly or monthly),
while a "floating" interest rate adjusts whenever a specified benchmark rate
(such as the bank prime lending rate) changes. These changes are reflected in
adjustments to the yields of the variable and floating rate securities, and
different securities may have different adjustment rates. Accordingly, as
interest rates increase or decrease, the capital appreciation or depreciation
may be less on these obligations than for fixed rate obligations.

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To the extent that the Portfolios invest in long-term variable or floating rate
securities, the Adviser believes that the Portfolios may be able to take
advantage of the higher yield that is usually paid on long-term securities.

Cash Portfolio also may purchase variable and floating rate master notes of
corporations, which are unsecured obligations redeemable upon notice that permit
investment of fluctuating amounts at varying rates of interest pursuant to
direct arrangement with the issuer of the instrument. These obligations include
master demand notes that permit investment of fluctuating amounts at varying
rates of interest pursuant to direct arrangement with the issuer of the
instrument. The issuer of these obligations often has the right, after a given
period, to prepay their outstanding principal amount of the obligations upon a
specified number of days' notice. These obligations generally are not traded,
nor generally is there an established secondary market for these obligations. To
the extent a demand note does not have a seven day or shorter demand feature and
there is no readily available market for the obligation, it is treated as an
illiquid security.

INVESTMENT COMPANY SECURITIES

In connection with managing their cash position, the Portfolios may invest in
the securities of other investment companies that are money market funds within
the limits proscribed by the 1940 Act. Under normal circumstances, each
Portfolio may invest up to 15% of its assets in money market funds. The
Portfolio only invests in money market funds when it has excess cash and the
Adviser believes that the investment is in the best interest of the Portfolio.
In addition to the Portfolio's expenses (including the various fees), as a
shareholder in another investment company, the Portfolio bears its pro rata
portion of the other investment company's expenses (including fees). Those
expenses are not part of the Portfolio's (or Fund's) expense ratio, but rather
are reflected in the yield of the investment in the money market fund.

ZERO-COUPON SECURITIES.

Government Portfolio may invest in zero-coupon securities such as Treasury bills
and separately traded principal and interest components of Treasury Securities
issued or guaranteed under the U.S. Treasury's Separate Trading of Registered
Interest and Principal of Securities ("STRIPS") program. These securities are
sold at original issue discount and pay no interest to holders prior to
maturity. Because of this, zero-coupon securities may be subject to greater
fluctuation of market value than the other securities in which the Portfolios
may invest. All zero-coupon securities in which the Portfolio invests will have
a maturity of less than 13 months.

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

3. INVESTMENT LIMITATIONS

Fundamental investment limitations of a Fund or of a Portfolio cannot be changed
without the affirmative vote of the lesser of (i) more than 50% of the
outstanding interests of the respective Fund or Portfolio or (ii) 67% of the
shares of the Fund or Portfolio present or represented at a shareholders or
interestholders meeting at which the holders of more than 50% of the outstanding
interests of the Fund or Portfolio are present or represented.

Except as required by the 1940 Act, if a percentage restriction on investment or
utilization of assets is adhered to at the time an investment is made, a later
change in percentage resulting from a change in the market values of a
Portfolio's assets, the change in status of a security or purchases and
redemptions of shares will not be considered a violation of the limitation.

Each Fund has adopted the same fundamental and nonfundamental investment
limitations as its corresponding Portfolio. In addition, the Portfolios and the
Funds have adopted a fundamental policy which provides that, notwithstanding any
other investment policy or restriction (whether fundamental), the Portfolio or
Fund, as

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applicable, may invest all of its assets in the securities of a single pooled
investment fund having substantially the same investment objectives, policies
and restrictions as the Fund or Portfolio, as applicable.

GOVERNMENT PORTFOLIO - FUNDAMENTAL POLICIES

Government Portfolio has adopted the following
fundamental investment limitations which are in
addition to those contained in the Prospectuses of
Daily Assets Government Fund and which may not be
changed without shareholder approval. The Portfolio

may not:

(1) DIVERSIFICATION. With respect to 75% of its assets, purchase
securities, other than U.S. Government Securities, of any one issuer if
more than 5% of the value of the Portfolio's total assets would at the
time of purchase be invested in any one issuer.

(2) CONCENTRATION. Purchase securities, other
than U.S. Government Securities, if more than 25% of the value of the
Portfolio's total assets would be invested in securities of issuers
conducting their principal business activity in the same industry,
provided that consumer finance companies and industrial finance
companies are considered to be separate industries and that there is no
limit on the purchase of the securities of domestic commercial banks.

(3) UNDERWRITING. Act as an underwriter of securities of other issuers,
except to the extent that, in connection with the disposition of
portfolio securities, the Portfolio may be deemed to be an underwriter
for purposes of the Securities Act of 1933.

(4) REAL ESTATE. Purchase or sell (i) real estate
or any interest therein, except that the Portfolio may invest in debt
obligations secured by real estate or interests therein or issued by
companies that invest in real estate or interests therein and (ii) real
property (including limited partnership interests, but excluding
readily marketable interests in real estate investment trusts or
readily marketable securities of companies which invest in real
estate.)

(5) COMMODITIES. Purchase or sell physical commodities or contracts
relating to physical commodities, provided that currencies and
currency-related contracts will not be deemed to be physical
commodities.

(6) BORROWING. Borrow money, except for temporary
or emergency purposes (including the meeting of redemption requests).
Total borrowings may not exceed 33 1/3% of the Portfolio's total assets
and borrowing for purposes other than meeting redemptions may not
exceed 5% of the value of each the Portfolio's total assets.
Outstanding borrowings in excess of 5% of the value of the Portfolio's
total assets must be repaid before any subsequent investments are made
by the Portfolio.

(7) SENIOR SECURITIES. Issue senior securities except pursuant to Section
18 of the 1940 Act and except that the Portfolio may borrow money
subject to investment limitations specified in the Portfolio's
Prospectus.

(8) LENDING. Make loans, except that the
Portfolio may (i) purchase debt securities which are otherwise
permissible investments, (ii) enter into repurchase agreements and
(iii) lend portfolio securities. The Portfolio may not lend portfolio
securities in an amount greater than 33 1/3% of the value of its total
assets.

(9) PLEDGING. Pledge, mortgage or hypothecate its assets, except to secure
permitted indebtedness. Collateralized loans of securities are not
deemed to be pledges or hypothecations for this purpose.

(10) OPTIONS. Write put and call options.

(11) INVEST FOR CONTROL. Invest for the purpose of exercising control over
any person.

(12) RESTRICTED SECURITIES. Purchase restricted
securities.

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GOVERNMENT PORTFOLIO - NONFUNDAMENTAL POLICIES

Government Portfolio has adopted the following nonfundamental investment
limitations that may be changed by the Core Trust Board without shareholder
approval. The Portfolio may not:

(a) SECURITIES WITH VOTING RIGHTS. Purchase securities having voting
rights, except the Portfolio may invest in securities of other
investment companies to the extent permitted by the 1940 Act.

(b) MARGIN; SHORT SALES. Purchase securities on margin, or make short sales
of securities, except for the use of short-term credit necessary for
the clearance of purchases and sales of portfolio securities.

(c) LIQUIDITY. Acquire securities or invest in
repurchase agreements with respect to any securities if, as a result,
more than 10% of the Portfolio's net assets (taken at current value)
would be invested in repurchase agreements not entitling the holder to
payment of principal within seven days and in securities that are
illiquid by virtue of legal or contractual restrictions on resale or
the absence of a readily available market.

TREASURY CASH PORTFOLIO, GOVERNMENT CASH PORTFOLIO,
CASH PORTFOLIO
AND MUNICIPAL CASH PORTFOLIO -- FUNDAMENTAL POLICIES

Treasury Cash Portfolio, Government Cash Portfolio, Cash Portfolio and Municipal
Cash Portfolio have adopted the following fundamental investment limitations
which are in addition to those contained in the Prospectuses offering Daily
Assets Treasury Obligations Fund, Daily Assets Government Obligations Fund,
Daily Assets Cash Fund and Daily Assets Municipal Fund and which may not be
changed without shareholder approval. No Portfolio may:

(1) DIVERSIFICATION. With respect to 75% of its
assets, purchase a security other than a U.S. Government Security (or,
in the case of Municipal cash Portfolio, other than a security of an
investment company) if, as a result, more than 5% of the Portfolio's
total assets would be invested in the securities of a single issuer.

(2) CONCENTRATION. Purchase securities if,
immediately after the purchase, more than 25% of the value of the
Portfolio's total assets would be invested in the securities of issuers
having their principal business activities in the same industry;
provided, however, that there is no limit on investments in U.S.
Government Securities.

(3) UNDERWRITING. Underwrite securities of other issuers, except to the
extent that the Portfolio may be considered to be acting as an
underwriter in connection with the disposition of portfolio securities.

(4) REAL ESTATE. Purchase or sell real estate or any interest therein,
except that the Portfolio may invest in debt obligations secured by
real estate or interests therein or issued by companies that invest in
real estate or interests therein.

(6) BORROWING. Borrow money, except for temporary or emergency purposes
(including the meeting of redemption requests) and except for entering
into reverse repurchase agreements, provided that borrowings do not
exceed 33 1/3% of the value of the Portfolio's total assets.

(7) SENIOR SECURITIES. Issue senior securities except as appropriate to
evidence indebtedness that the Portfolio is permitted to incur, and
provided that the Portfolio may issue shares of additional series or
classes that the Trustees may establish.

(8) LENDING. Make loans except for loans of portfolio securities, through
the use of repurchase agreements, and through the purchase of debt
securities that are otherwise permitted investments.

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(9) THRIFT INVESTOR LIMITATIONS. With respect to
Government Cash Portfolio, purchase or hold any security that (i) a
Federally chartered savings association may not invest in, sell,
redeem, hold or otherwise deal pursuant to law or regulation, without
limit as to percentage of the association's assets and (ii) pursuant to
12 C.F.R. Section 566.1 would cause shares of the Portfolio not to be
deemed to be short term liquid assets when owned by Federally chartered
savings associations.

For purposes of limitation (2): (i) loan participations are considered to be
issued by both the issuing bank and the underlying corporate borrower; (ii)
utility companies are divided according to their services (for example, gas, gas
transmission, electric and telephone will each be considered a separate
industry); and (iii) financial service companies will be classified according to
the end users of their services, for example, automobile finance, bank finance
and diversified finance will each be considered a separate industry.

TREASURY CASH PORTFOLIO, GOVERNMENT CASH PORTFOLIO,
CASH PORTFOLIO
AND MUNICIPAL CASH PORTFOLIO - NONFUNDAMENTAL POLICIES

Treasury Cash Portfolio, Government Cash Portfolio, Cash Portfolio and Municipal
Cash Portfolio - have adopted the following nonfundamental investment
limitations that may be changed by the Core Trust Board without shareholder
approval. Each Portfolio may not:

(a) DIVERSIFICATION. With respect to 100% of its assets, purchase a
security other than a U.S. Government Security if, as a result, more
than 5% of the Portfolio's total assets would be invested in the
securities of a single issuer, unless the investment is permitted by
Rule 2a-7 under the 1940 Act.

(b) BORROWING. Purchase securities for investment
while any borrowing equaling 5% or more of the Portfolio's total assets
is outstanding; and if at any time the Portfolio's borrowings exceed
the Portfolio's investment limitations due to a decline in net assets,
such borrowings will be promptly (within three days) reduced to the
extent necessary to comply with the limitations. Borrowing for purposes
other than meeting redemption requests will not exceed 5% of the value
of the Portfolio's total assets.

(c) Purchase securities that have voting rights, except the Portfolio may
invest in securities of other investment companies to the extent
permitted by the 1940 Act.

(d) MARGIN; SHORT SALES. Purchase securities on margin, or make short sales
of securities, except for the use of short-term credit necessary for
the clearance of purchases and sales of portfolio securities.

(e) LIQUIDITY. Acquire securities or invest in
repurchase agreements with respect to any securities if, as a result,
more than 10% of the Portfolio's net assets (taken at current value)
would be invested in repurchase agreements not entitling the holder to
payment of principal within seven days and in securities that are
illiquid by virtue of legal or contractual restrictions on resale or
the absence of a readily available market.

4. INVESTMENTS BY FINANCIAL INSTITUTIONS

INVESTMENT BY SHAREHOLDERS THAT ARE BANKS - DAILY
ASSETS GOVERNMENT OBLIGATIONS FUND

Government Cash Portfolio invests only in instruments which, if held directly by
a bank or bank holding company organized under the laws of the United States or
any state thereof, would be assigned to a risk-weight category of no more than
20% under the current risk based capital guidelines adopted by the Federal bank
regulators (the "Guidelines"). In the event that the Guidelines are revised, the
Portfolio's portfolio will be modified accordingly, including by disposing of
portfolio securities or other instruments that no longer qualify under the
Guidelines. In addition, the Portfolio does not intend to hold in its portfolio
any securities or instruments that would be subject to restriction as to amount
held by a National bank under Title 12, Section 24 (Seventh) of the United
States Code. If the Portfolio's portfolio includes any instruments that would be
subject to a restriction as to amount held by a National bank, investment in the
Portfolio may be limited.

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The Guidelines provide that shares of an investment fund are generally assigned
to the risk-weight category applicable to the highest risk-weighted security or
instrument that the fund is permitted to hold. Accordingly, Portfolio shares
should qualify for a 20% risk weighting under the Guidelines. The Guidelines
also provide that, in the case of an investment fund whose shares should qualify
for a risk weighting below 100% due to limitations on the assets which it is
permitted to hold, bank examiners may review the treatment of the shares to
ensure that they have been assigned an appropriate risk-weight. In this
connection, the Guidelines provide that, regardless of the composition of an
investment fund's assets, shares of a fund may be assigned to the 100%
risk-weight category if it is determined that the fund engages in activities
that appear to be speculative in nature or has any other characteristics that
are inconsistent with a lower risk weighting. The Adviser has no reason to
believe that such a determination would be made with respect to the Portfolio.
Their are various subjective criteria for making this determination and,
therefore, it is not possible to provide any assurance as to how Portfolio
shares will be evaluated by bank examiners.

Before acquiring Fund shares, prospective investors that are banks or bank
holding companies, particularly those that are organized under the laws of any
country other than the United States or of any state, territory or other
political subdivision of the United States, and prospective investors that are
U.S. branches and agencies of foreign banks or Edge Corporations, should consult
all applicable laws, regulations and policies, as well as appropriate regulatory
bodies, to confirm that an investment in Fund Shares is permissible and in
compliance with any applicable investment or other limits.

Fund shares held by National banks are generally required to be revalued
periodically and reported at the lower of cost or market value. Such shares may
also be subject to special regulatory reporting, accounting and tax treatment.
In addition, a bank may be required to obtain specific approval from its board
of directors before acquiring Fund shares, and thereafter may be required to
review its investment in a Fund for the purpose of verifying compliance with
applicable Federal banking laws, regulations and policies.

National banks generally must review their holdings of shares of a Fund at least
quarterly to ensure compliance with established bank policies and legal
requirements. Upon request, the Portfolios will make available to the Funds
investors information relating to the size and composition of their portfolio
for the purpose of providing Fund shareholders with this information.

INVESTMENT BY SHAREHOLDERS THAT ARE CREDIT UNIONS -
DAILY ASSETS TREASURY OBLIGATIONS FUND AND DAILY ASSETS
GOVERNMENT OBLIGATIONS FUND

Treasury Cash Portfolio and Government Cash Portfolio limit their investments to
investments that are legally permissible for Federally chartered credit unions
under applicable provisions

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of the Federal Credit Union Act (including 12 U.S.C. Section 1757(7), (8) and
(15)) and the applicable rules and regulations of the National Credit Union
Administration (including 12 C.F.R. Part 703, Investment and Deposit
Activities), as such statutes and rules and regulations may be amended. The
Portfolios limit their investments to U.S. Government Securities (including
Treasury STRIPS) and repurchase agreements fully collateralized by U.S.
Government Securities. Certain U.S. Government Securities owned by a Portfolio
may be mortgage or asset backed, but, except to reduce interest rate risk, no
such security will be (i) a stripped mortgage backed security ("SMBS"), (ii) a
collateralized mortgage obligation ("CMO") or real estate mortgage investment
conduit ("REMIC") that meets any of the tests outlined in 12 C.F.R. Section
703.5(g) or (iii) a residual interest in a CMO or REMIC. In order to reduce
interest rate risk, the Portfolios may purchase a SMBS, CMO, REMIC or residual
interest in a CMO or REMIC but only in accordance with 12 C.F.R. Section
703.5(i). Treasury Cash Portfolio and Government Cash Portfolio have no current
intention to make any such investment. The Portfolios also may invest in reverse
repurchase agreements in accordance with 12 C.F.R. 703.4(e) to the extent
otherwise permitted hereunder and in the Prospectus.

INVESTMENTS BY SHAREHOLDERS THAT ARE SAVINGS
ASSOCIATIONS - DAILY ASSETS TREASURY OBLIGATIONS FUND
AND DAILY ASSETS GOVERNMENT OBLIGATIONS PORTFOLIO

Treasury Cash Portfolio and Government Cash Portfolio limit their investments to
investments that are legally permissible for Federally chartered savings
associations without limit as to percentage under applicable provisions of the
Home Owners' Loan Act (including 12 U.S.C. Section 1464) and the applicable
rules and regulations of the Office of Thrift Supervision, as such statutes and
rules and regulations may be amended. In addition, the Portfolios limit their
investments to investments that are permissible for an open-end investment
company to hold and would permit shares of the investment company to qualify as
liquid assets under 12 C.F.R. Section 566.1(g) and as short-term liquid assets
under 12 C.F.R. Section 566.1(h). These policies may be amended only by approval
of a Portfolio's interestholders or Fund's shareholders, as applicable.

5. PERFORMANCE DATA

For a listing of certain performance data as of August 31, 1997, see Appendix B.

YIELD INFORMATION

Each Fund may provide current annualized and effective annualized yield
quotations for each class based on its daily dividends. These quotations may
from time to time be used in advertisements, shareholder reports or other
communications to shareholders. All performance information supplied by a Fund
is historical and is not intended to indicate future returns.

In performance advertising the Funds may compare any of their performance
information with data published by independent evaluators such as Morningstar,
Lipper Analytical Services, Inc., IBC/Donoghue, Inc. or CDA/Wiesenberger or
other companies which track the investment performance of investment companies
("Fund Tracking Companies"). The Funds may also compare any of their performance
information with the performance of recognized stock, bond and other indices.
The Funds may also refer in such materials to mutual fund performance rankings
and other data published by Fund Tracking Companies. Performance advertising may
also refer to discussions of a Fund and comparative mutual fund data and ratings
reported in independent periodicals, such as newspapers and financial magazines.

Any current yield quotation of a class of a Fund which is used in such a manner
as to be subject to the provisions of Rule 482(d) under the Securities Act of
1933, as amended, shall consist of an annualized historical yield, carried at
least to the nearest hundredth of one percent, based on a specific
seven-calendar-day period and shall be calculated by dividing the net change
during the seven-day period in the value of an account having a balance of one
share at the beginning of the period by the value of the account at the
beginning of the period, and multiplying the quotient by 365/7. For this
purpose, the net change in account value would reflect the value of additional
shares purchased with dividends declared on the original share and dividends
declared on both the original share and any such additional shares, but would
not reflect any realized gains or losses from the sale of securities or any
unrealized appreciation or depreciation on portfolio securities. In addition,
any effective annualized yield quotation used by a Fund shall be calculated by
compounding the current yield quotation for such period by adding 1 to the
product, raising the sum to a power equal to 365/7, and subtracting 1 from the
result.

Although published yield information is useful to investors in reviewing a
class' performance, investors should be aware that each Fund's yield fluctuates
from day to day and that the class' yield for any given period is not an
indication or representation by the Fund of future yields or rates of return on
the Fund's shares. Also, Participating Organizations (as that term is used in
the Prospectus) may charge their customers direct fees in connection with an
investment in a Fund, which will have the effect of reducing the class' net
yield to those shareholders. The yields of a class are not fixed or guaranteed,
and an investment in the Fund is not insured or guaranteed. Accordingly, yield
information may not necessarily be used to compare shares of the Fund with
investment alternatives which, like money market instruments or bank accounts,
may provide a fixed rate of interest. Also, it may not be appropriate directly
to compare a Fund's yield information to similar information of investment
alternatives which are insured or guaranteed.

Income calculated for the purpose of determining a class' yield differs from
income as determined for other accounting purposes. Because of the different
accounting methods used, and because of the compounding assumed in yield
calculations, the yield quoted for a class may differ from the rate of
distribution the class paid over the same period or the rate of income reported
in the Fund's financial statements.

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<PAGE>

OTHER PERFORMANCE AND SALES LITERATURE MATTERS

Total returns quoted in sales literature reflect all aspects of a Fund's return,
including the effect of reinvesting dividends and capital gain distributions.
Average annual returns generally are calculated by determining the growth or
decline in value of a hypothetical historical investment in a Fund over a stated
period, and then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in value had been
constant over the period. While average annual returns are a convenient means of
comparing investment alternatives, investors should realize that the performance
is not constant over time but changes from year to year, and that average annual
returns represent averaged figures as opposed to the actual year-to-year
performance of the Funds.

Average annual total return is calculated by finding the average annual
compounded rates of return of a hypothetical investment over such periods
according to the following formula:

P(1+T)n = ERV

Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the value, at the end
of the applicable period, of a hypothetical $1,000 payment
made at the beginning of the applicable period.

OTHER ADVERTISING MATTERS

The Funds may advertise other forms of performance. For example, average annual
and cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of investments,
and/or a series of redemptions over any time period. Total returns may be broken
down into their components of income and capital (including capital gains and
changes in share price) in order to illustrate the relationship of the se
factors and their contributions to total return. Any performance information may
be presented numerically or in a table, graph or similar illustration.

A Fund may also include various information in its advertisements. Information
included in the Fund's advertisements may include, but is not limited to: (i)
the Fund's (or the Fund's corresponding Portfolios) portfolio holdings and
portfolio allocation as of certain dates, such as portfolio diversification by
instrument type, by instrument or by maturity, (ii) descriptions of the
portfolio managers of the Fund or the Fund's corresponding Portfolio and the
portfolio management staff of the Adviser or summaries of the views of the
portfolio managers with respect to the financial markets, (iii) the results of a
hypothetical investment in a Fund over a given number of years, including the
amount that the investment would be at the end of the period, (iv) the effects
of earning Federally and, if applicable, state tax-exempt income from the Fund
or investing in a tax-deferred account, such as an individual retirement account
and (v) the net asset value, net assets or number of shareholders of a Fund as
of one or more dates.

In connection with its advertisements a Fund may provide "shareholders' letters"
which serve to provide shareholders or investors an introduction into the
Fund's, the Portfolio's, the Trust's, the Core Trust's or any of the Trust's or
the Core Trust's service providers' policies or business practices.

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<PAGE>

6. MANAGEMENT

TRUSTEES AND OFFICERS OF THE TRUST

The trustees and officers of the Trust and their principal occupations during
the past five years are set forth below. Each Trustee who is an "interested
person" (as defined by the 1940 Act) of the Trust is indicated by an asterisk.

John Y. Keffer,* Chairman and President (age 54)

President, Forum Financial Group, LLC (mutual fund services company
holding company). Mr. Keffer is also a director and/or officer of
various registered investment companies for which the various Forum
Financial Group of Companies provides services. His address is Two
Portland Square, Portland, Maine 04101.

Costas Azariadis, Trustee (age 53)

Professor of Economics, University of California, Los Angeles, since
July 1992. Prior thereto, Dr. Azariadis was Professor of Economics at
the University of Pennsylvania. His address is Department of
Economics, University of California, Los Angeles, 405 Hilgard Avenue,
Los Angeles, California 90024.

James C. Cheng, Trustee (age 54)

President of Technology Marketing Associates (a marketing consulting
company) since September 1991. Prior thereto, Mr. Cheng was President
and Chief Executive Officer of Network Dynamics, Incorporated (a
software development company). His address is 27 Temple Street,
Belmont, Massachusetts 02178.

J. Michael Parish, Trustee (age 53)

Partner at the law firm of Winthrop Stimson Putnam & Roberts since
1989. Prior thereto, he was a partner at LeBoeuf, Lamb, Leiby &
MacRae, a law firm of which he was a member from 1974 to 1989. His
address is 40 Wall Street, New York, New York 10005.

David I. Goldstein, Vice President and Secretary (age 36)

General Counsel, Forum Financial Group, LLC, with which he has been
associated since 1991. Mr. Goldstein also serves as an officer of
various registered investment companies for which the various Forum
Financial Group of Companies provides services. His address is Two
Portland Square, Portland, Maine 04101.

Mark D. Kaplan, Vice President, Assistant Treasurer and Assistant Secretary
(age 41)

Managing Director at Forum Financial Services, Inc. since September
1995. Prior thereto, Mr. Kaplan was Managing Director and Director of
Research at H.M. Payson & Co. His address is Two Portland Square,
Portland, Maine 04101.

Sara M. Morris, Treasurer (age 35)

Chief Financial Officer, Forum Financial Group, LLC, with which she
has been associated since 1994. Prior thereto, from 1991 to 1994, Ms.
Clark was Controller of Wright Express Corporation (a national credit
card company) and for six years prior thereto was employed at Deloitte
& Touche LLP as an accountant. Ms. Clark is also an officer of various
registered investment companies for which the Forum Financial Group of
companies provides services. Her address is Two Portland Square,
Portland, Maine 04101.

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<PAGE>

Max Berueffy, Assistant Secretary (age 44)

Counsel, Forum Administrative Services, LLC, with which he has been
associated since 1994. Prior thereto, Mr. Berueffy was on the staff of
the U.S. Securities and Exchange Commission for seven years, first in
the appellate branch of the Office of the General Counsel, then as a
counsel to Commissioner Grundfest and finally as a senior special
counsel in the Division of Investment Management. Mr. Berueffy also
serves as an officer of various registered investment companies for
which the various Forum Financial Group of Companies provides
services. His address is Two Portland Square, Portland, Maine 04101.

Cheryl O. Tumlin, Assistant Secretary (age 31)

Assistant Counsel, Forum Financial Services, Inc., with which she has
been associated since July 1996. Prior thereto, Ms. Tumlin was on the
staff of the U.S. Securities and Exchange Commission as an attorney in
the Division of Market Regulation and prior thereto Ms. Tumlin was an
associate with the law firm of Robinson Silverman Pearce Aronsohn &
Berman in New York, New York. Ms. Tumlin is also Assistant Secretary
of various registered investment companies for which Forum
Administrative Services, LLC or Forum Financial Services, Inc. serves
as manager, administrator and/or distributor. Her address is Two
Portland Square, Portland, Maine 04101.

TRUSTEES AND OFFICERS OF CORE TRUST

The Trustees and officers of Core Trust and their principal occupations during
the past five years are set forth below. Each of the Trustees of the Trust is
also a Trustee of Core Trust and several officers of the Trust serve as officers
of Core Trust . Each Trustee who is an "interested person" (as defined by the
1940 Act) of Core Trust is indicated by an asterisk. Accordingly, for background
information pertaining to the Trustees and these officers, see "Trustees and
Officers of the Trust" above.

John Y. Keffer,* Chairman and President.

Costas Azariadis, Trustee.

James C. Cheng, Trustee.

J. Michael Parish, Trustee.

Thomas G. Sheehan, Vice President and Assistant Secretary (age 43)

Director, Relationship Management, Forum Financial Group, LLC, since
October, 1993. Prior thereto, Mr. Sheehan was a Special Counsel in the
Division of Investment Management of the U.S. Securities and Exchange
Commission in Washington, D.C. His address is Two Portland Square,
Portland, Maine 04101.

Sara M. Morris, Treasurer

David I. Goldstein, Secretary

TRUSTEE COMPENSATION

THE TRUST. Each Trustee of the Trust (other than John Y. Keffer, who is an
interested person of the Trust) is paid $1,000 for each Board meeting attended
(whether in person or by electronic communication) and $1,000 for each committee
meeting attended on a date when a Board meeting is not held. As of March 31,
1997, in addition to the $1,000 for each Board meeting attended, each Trustee is
paid $100 per active portfolio of the Trust. To the extent a meeting relates to
only certain portfolios of the Trust, Trustees are paid the $100 fee only with
respect to those portfolios. Trustees are also reimbursed for travel and related
expenses incurred in attending meetings of the Board. No officer of the Trust is
compensated by the Trust.

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<PAGE>

The following table provides the aggregate compensation paid to each Trustee.
The Trust has not adopted any form of retirement plan covering Trustees or
officers. Information is presented for the twelve months ended August 31, 1997.

<TABLE>
<S> <C> <C> <C> <C>
Accrue Annual
Aggregate Pension Benefits Upon Total
Trustee Compensation Benefits Retirement Compensation
------- ------------- -------- ---------- ------------
Mr. Keffer None None None None

Mr. Azariadis $____ None None $____
Mr. Cheng $____ None None $____
Mr. Parish $____ None None $____
</TABLE>

CORE TRUST. Each of the Trustees of the Trust is also a Trustee of Core Trust.
Each Trustee of Core Trust is paid $1,000 for each meeting of the Core Trust
Board attended (whether in person or by electronic communication) plus $100 for
each active portfolio of Core Trust and is paid $1000 for each committee meeting
attended on a date when the Core Trust Board meeting is not held. As of August
31, 1997, there were fifteen active portfolios of Core Trust (including certain
of the Portfolios). Trustees are also reimbursed for travel and related expenses
incurred in attending meetings of the Core Trust Board. No officer of Core Trust
is compensated or reimbursed for expenses by Core Trust. Since commencement of
the Trust's operations, Mr. Keffer has not accepted any fees for his services as
Trustee. Core Trust trustee expenses were less than $5,000 for the twelve months
ended August 31, 1997.

The following table provides the aggregate compensation paid to each trustee of
Core Trust for the twelve months ended August 31, 1997. Core Trust has not
adopted any form of retirement plan covering trustees or officers of Core Trust.
<TABLE>
<S> <C> <C> <C> <C>
Accrued Annual
Aggregate Pension Benefits Upon Total
Trustee Compensation Benefits Retirement Compensation
------- ------------ --------- ------------- -------------
Mr. Keffer None None None None
Mr. Azariadis $7,900 None None $7,900
Mr. Parish $7,900 None None $7,900
Mr. Cheng $7,900 None None $7,900
</TABLE>

Each Trustee of Core Trust (other than John Y. Keffer, who is an interested
person of Core Trust) is paid $1,000 for each Core Trust Board meeting attended
(whether in person or by electronic communication) plus $100 per active
portfolio of Core Trust and is paid $1,000 for each committee meeting attended
on a date when a Core Trust Board meeting is not held. To the extent a meeting
relates to only certain portfolios of Core Trust, trustees are paid the $100 fee
only with respect to those portfolios. Core Trust trustees are also reimbursed
for travel and related expenses incurred in attending meetings of the Core Trust
Board. For the fiscal year of the Portfolios ended August 31, 1997, each Core
Trust trustee received fees totaling $2,238.

INVESTMENT ADVISERS

The Adviser furnishes to the Portfolios at its own expense all services,
facilities and personnel necessary in connection with managing the Portfolios'
investments and effecting portfolio transactions for the Portfolios, pursuant to
an investment advisory agreement between the Adviser and Core Trust (an
"Advisory Agreement"). The Advisory Agreement provides, with respect to each
Portfolio, for an initial term of one year from its effective date and for its
continuance in effect for successive twelve-month periods thereafter, provided
the Advisory Agreement is specifically approved at least annually by the Core
Trust Board or by vote of the interestholders of the Portfolios, and in either
case by a majority of the Trustees who are not parties to the Advisory Agreement
or interested persons of any such party.

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Prior to January 2, 1998, Linden Asset Management, Inc. ("Linden") served as
investment adviser to Treasury Cash Portfolio, Government Cash Portfolio and
Cash Portfolio, and Forum Advisors, Inc. served as investment adviser to
Government Portfolio. Linden and Forum Advisors, Inc. also acted as investment
subadvisors to each Portfolio that they did not manage on a daily basis. On
January 2, 1998, Forum Advisors, Inc. acquired Linden and reorganized into a new
company named Forum Investment Advisors, LLC. These transactions have not
effected any change in advisory staff, portfolio managers, or advisory fees, or
any other material change.

Table 1 in Appendix C shows the dollar amount of fees paid under the investment
advisory agreements between Core Trust and Linden and between Core Trust and
Forum Advisors, Inc., as applicable, with respect to each Portfolio or, prior to
Daily Assets Government Fund investing in Government Portfolio, the dollar
amount of fees paid under the Investment Advisory Agreement between the Trust
and Forum Advisors, Inc. with respect to the Fund. This information is provided
for the past three years (or shorter time a Fund or Portfolio has been
operational).

The Advisory Agreement is terminable without penalty by Core Trust with respect
to the Portfolio on 60 days' written notice when authorized either by vote of
the Portfolio's interestholders or by a vote of a majority of the Core Trust
Board, or by the Adviser on not more than 60 days' nor less than 30 days'
written notice, and will automatically terminate in the event of its assignment.
The Advisory Agreement also provides that, with respect to a Portfolio, the
Adviser shall not be liable for any error of judgment or mistake of law or for
any act or omission in the performance of its duties to the Portfolio, except
for willful misfeasance, bad faith or gross negligence in the performance of the
Adviser's duties or by reason of reckless disregard of its obligations and
duties under the Advisory Agreement. The Advisory Agreement provides that the
Adviser may render services to others.

For its services, the Adviser receives an advisory fee at an annual rate of
0.05% of Government Portfolio's and Municipal Cash Portfolio's average daily net
assets For services provided to Treasury Cash Portfolio, Government Cash
Portfolio and Cash Portfolio, the Adviser receives an advisory fee based upon
the total average daily net assets of those Portfolios ("Total Portfolio
Assets"). The Adviser's fee is calculated at an annual rate on a cumulative
basis as follows: 0.06% of the first $200 million of Total Portfolio Assets,
0.04% of the next $300 million of Total Portfolio Assets, and 0.03% of the
remaining Total Portfolio Assets.

Prior to January 15, 1996, Forum Advisors, Inc. acted as Daily Assets Government
Fund's investment adviser under an investment advisory agreement with Forum
Funds, Inc. Under that investment advisory agreement, Forum Advisors, Inc.
received a fee at an annual rate of 0.20% of the average daily net assets of the
Fund.

In addition to receiving an advisory fee from a Portfolio it advises, the
Adviser may also act and be compensated as investment manager for its clients
with respect to assets which are invested in the Portfolio. In some instances
the Adviser may elect to credit against any investment management fee received
from a client who is also a shareholder in the Portfolio an amount equal to all
or a portion of the fees received by the Adviser or any affiliate of the Adviser
from the Portfolio with respect to the client's assets invested in the
Portfolio.

The Trust has confirmed its obligation to pay all of its expenses, including:
interest charges, taxes, brokerage fees and commissions; certain insurance
premiums; fees, interest charges and expenses of the custodian, transfer agent
and dividend disbursing agent; telecommunications expenses; auditing, legal and
compliance expenses; costs of forming the trust and maintaining corporate
existence; costs of preparing and printing the Trust's prospectuses, statements
of additional information, account application forms and shareholder reports and
delivering them to existing and prospective shareholders; costs of maintaining
books of original entry for portfolio and fund accounting and other required
books and accounts and of calculating the net asset value of shares of the
Funds; costs of reproduction, stationery and supplies; compensation of Trustees,
officers and employees of the Trust and costs of other personnel performing
services for the Trust; costs of corporate meetings; SEC registration fees and
related expenses; state securities laws registration fees and related expenses;
and fees payable to an investment adviser under an investment advisory
agreement.

Anthony R. Fischer, Jr., is primarily responsible for the day-to-day management
of the Portfolios. Mr. Fischer was the sole stockholder, director and officer of
Linden from 1992 until its acquisition by the Adviser. He has been primarily

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responsible for the day-to-day management of Treasury Cash Portfolio, Government
Cash Portfolio and Cash Portfolio since their inception. Mr. Fischer has over
twenty-five years experience in the money market industry. From 1984 through
1989, Mr. Fischer served as Senior Vice President and Treasurer of United
California Savings Bank, Santa Ana, California, and prior thereto, as a Manager
for five years at PaineWebber Jackson & Curtis, New York, New York.

ADMINISTRATION

Table 2 in Appendix C shows the dollar amount of fees paid for administrative
services by the Funds and the Portfolios. This information is provided for the
past three years (or shorter time a Fund or Portfolio has been operational).

THE TRUST. Pursuant to an administration agreement (the "Trust Administration
Agreement"), FAS supervises the overall management of the Trust (which includes,
among other responsibilities, negotiation of contracts and fees with, and
monitoring of performance and billing of, the transfer agent and custodian and
arranging for maintenance of books and records of the Trust) and provides the
Trust with general office facilities. The Trust Administration Agreement may be
terminated by either party without penalty on 60 days' written notice and may
not be assigned except upon written consent by both parties. The Trust
Administration Agreement also provides that FAS shall not be liable for any
error of judgment or mistake of law or for any act or omission in the
administration or management of the Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of FAS's duties or by reason of
reckless disregard of its obligations and duties under the Trust Administration
Agreement. Prior to June 19, 1997, FFSI provided administration services to the
Trust.

FAS provides persons satisfactory to the Board to serve as officers of the
Trust. Those officers, as well as certain other employees and Trustees of the
Trust, may be Trustees, officers or employees of (and persons providing services
to the Trust may include) FAS, FFSI, their affiliates or affiliates of the
Adviser.

CORE TRUST. Pursuant to a management agreement with Core Trust (the "Core Trust
Management Agreement"), FAS supervises the overall management of Core Trust
(which includes, among other responsibilities, negotiation of contracts and fees
with, and monitoring of performance and billing of, the custodian and arranging
for maintenance of books and records of Core Trust) and provides Core Trust with
general office facilities. The Core Trust Management Agreement provides, with
respect to the Portfolios, for an initial term of one year from its effective
date and for its continuance in effect for successive twelve-month periods
thereafter, provided the agreement is specifically approved at least annually by
the Core Trust Board or by the interestholders of the Portfolios, and in either
case by a majority of the Trustees who are not parties to the Core Trust
Management Agreement or interested persons of any such party. Prior to November
15, 1997, FFSI provided administration services to Core Trust.

The Core Trust Management Agreement terminates automatically if it is assigned
and may be terminated without penalty with respect to the Portfolio by vote of a
Portfolio's shareholders or by either party on 60 days' written notice. The Core
Trust Management Agreement also provides that FAS shall not be liable for any
error of judgment or mistake of law or for any act or omission in the
administration or management of Core Trust, except for willful misfeasance, bad
faith or gross negligence in the performance of Forum's duties or by reason of
reckless disregard of its obligations and duties under the Core Trust Management
Agreement.

At the request of the Core Trust Board, FAS provides persons satisfactory to the
Core Trust Board to serve as officers of Core Trust.

DISTRIBUTION

FFSI was incorporated under the laws of the State of Delaware on February 7,
1986 and serves as distributor of shares of the Funds pursuant to a Distribution
Agreement between FFSI and the Trust (the "Distribution Agreement"). The
Distribution Agreement provides, with respect to each Fund, for an initial term
of one year from its effective date and for its continuance in effect for
successive twelve-month periods thereafter, provided the Distribution Agreement
is specifically approved at least annually by the Board or by the shareholders
of the Fund,

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and in either case by a majority of the Trustees who are not parties to the
Distribution Agreement or interested persons of any such party.

The Distribution Agreement terminates automatically if it is assigned and may be
terminated without penalty with respect to each Fund by vote of the Fund's
shareholders or by either party on 60 days' written notice. The Distribution
Agreement also provides that FFSI shall not be liable for any error of judgment
or mistake of law or for any act or omission in the performance of services to
the Trust, except for willful misfeasance, bad faith or gross negligence in the
performance of FFSI's duties or by reason of reckless disregard of its
obligations and duties under the Distribution Agreement.

With respect to any class that has adopted a distribution plan, the Distribution
Agreement is also terminable upon similar notice by a majority of the Trustees
who (i) are not interested persons of the Trust and (ii) have no direct or
indirect financial interest in the operation of that distribution plan or in the
Distribution Agreement ("Qualified Trustees").

FFSI acts as sole placement agent for interests in the Portfolios and receives
no compensation for those services from the portfolios.

INVESTOR CLASS DISTRIBUTION PLAN. In accordance with Rule 12b-1 under the 1940
Act, with respect to the Investor Class of each Fund, the Trust adopted a
distribution plan (the "Investor Class Plan") which provides for the payment to
Forum of a Rule 12b-1 fee at the annual rate of 0.15% of the average daily net
assets of the Investor class of each Fund as compensation for Forum's services
as distributor.

The Investor Class Plan provides that all written agreements relating to that
plan must be approved by the Board, including a majority of the Qualified
Trustees. In addition, the Investor Class Plan (as well as the Distribution
Agreement) requires the Trust and Forum to prepare and submit to the Board, at
least quarterly, and the Board will review, written reports setting forth all
amounts expended under the Investor Class Plan and identifying the activities
for which those expenditures were made.

The Investor Class Plan provides that it will remain in effect for one year from
the date of its adoption and thereafter shall continue in effect provided it is
approved at least annually by the shareholders or by the Board, including a
majority of the Qualified Trustees. The Investor Class Plan further provides
that it may not be amended to increase materially the costs which may be borne
by the Trust for distribution pursuant to the Investor Class Plan without
shareholder approval and that other material amendments of the Investor Class
Plan must be approved by the Qualified Trustees. The Investor Class Plan may be
terminated at any time by the Board, by a majority of the Qualified Trustees, or
by a Fund's Investor class shareholders.

Table 3 in Appendix C shows the dollar amount of fees payable under the Investor
Class Plan with respect to each Fund. This information is provided for the past
three years (or shorter time a Fund has been operational).

TRANSFER AGENT

FFC acts as transfer agent of the Trust pursuant to a transfer agency agreement
with the Trust (the "Transfer Agency Agreement"). The Transfer Agency Agreement
provides, with respect to the Funds, for an initial term of one year from its
effective date and for its continuance in effect for successive twelve-month
periods thereafter, provided that the Transfer Agency Agreement is specifically
approved at least annually by the Board or by a vote of the shareholders of each
Fund, and in either case by a majority of the Trustees who are not parties to
the Transfer Agency Agreement or interested persons of any such party at a
meeting called for the purpose of voting on the Transfer Agency Agreement.

Among the responsibilities of FFC as transfer agent for the Trust are: (1)
answering customer inquiries regarding account status and history, the manner in
which purchases and redemptions of shares of each Fund may be effected and
certain other matters pertaining to each Fund; (2) assisting shareholders in
initiating and changing account designations and addresses; (3) providing
necessary personnel and facilities to establish and maintain shareholder

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accounts and records, assisting in processing purchase and redemption
transactions and receiving wired funds; (4) transmitting and receiving funds in
connection with customer orders to purchase or redeem shares; (5) verifying
shareholder signatures in connection with changes in the registration of
shareholder accounts; (6) furnishing periodic statements and confirmations of
purchases and redemptions; (7) arranging for the transmission of proxy
statements, annual reports, prospectuses and other communications from the Trust
to its shareholders; (8) arranging for the receipt, tabulation and transmission
to the Trust of proxies executed by shareholders with respect to meetings of
shareholders of the Trust; and (9) providing such other related services as the
Trust or a shareholder may reasonably request.

FFC or any sub-transfer agent or processing agent may also act and receive
compensation as custodian, investment manager, nominee, agent or fiduciary for
its customers or clients who are shareholders of a Fund with respect to assets
invested in that Fund. FFC or any sub-transfer agent or other processing agent
may elect to credit against the fees payable to it by its clients or customers
all or a portion of any fee received from the Trust or from the Transfer Agent
with respect to assets of those customers or clients invested in the Portfolio.
FFC, FAS or sub-transfer agents or processing agents retained by the FFC may be
Processing Organizations (as defined in the Prospectus) and, in the case of
sub-transfer agents or processing agents, may also be affiliated persons of FFC
or FAS.

For its services under the Transfer Agency Agreement, FFC receives an annual fee
from each Fund of (i) 0.02% of each Fund's average daily net assets attributable
to institutional Shares and 0.25% of each Fund's average daily net assets
attributable to Institutional Service Shares and Investor Shares (computed and
paid monthly in arrears by the Fund), (ii) $12,000 per year (computed and paid
monthly in arrears by the Fund) and (iii) Annual Shareholder Account Fees of
$125 per shareholder account in Institutional Shares and $18.00 per shareholder
account in Institutional Service Shares and Investor Shares (computed as of the
last business day of the prior month).

Table 4 in Appendix C shows the dollar amount of fees paid for transfer agency
services by the Funds. This information is provided for the past three years (or
shorter time a Fund has been operational).

SHAREHOLDER SERVICE PLAN AND AGREEMENTS

The Trust has adopted a shareholder service plan ("Shareholder Service Plan")
with respect to the Institutional Service class and the Investor class of each
Fund which provides that FAS may obtain the services of financial institutions
to act as shareholder servicing agents for their customers invested in those
classes. The Shareholder Service Plan was effective on November 15, 1997 for the
Institutional Service class of those Funds then operating.

The Shareholder Service Plan provides that all written agreements relating to
that plan must be approved by the Board, including a majority of the Qualified
Trustees. In addition, the Shareholder Service Plan (as well as the various
shareholder service agreements) requires the Trust and FAS to prepare and submit
to the Board, at least quarterly, and the Board will review written reports
setting forth all amounts expended under the plan and identifying the activities
for which those expenditures were made.

The Shareholder Service Plan provides that it will remain in effect for one year
from the date of its adoption and thereafter shall continue in effect provided
it is approved at least annually by the shareholders or by the Board. The
Shareholder Service Plan further provides material amendments of the plan must
be approved by the Qualified Trustees. The Shareholder Service Plan may be
terminated at any time by the Board or by a majority of the Qualified Trustees.

The Trust may enter into shareholder servicing agreements with various
Shareholder Servicing Agents pursuant to which those agents, as agent for their
customers, may agree among other things to: (i) answer shareholder inquiries
regarding the manner in which purchases, exchanges and redemptions of shares of
the Trust may be effected and other matters pertaining to the Trust's services;
(ii) provide necessary personnel and facilities to establish and maintain
shareholder accounts and records; (iii) assist shareholders in arranging for
processing purchase, exchange and redemption transactions; (iv) arrange for the
wiring of funds; (v) guarantee shareholder signatures in connection with
redemption orders and transfers and changes in shareholder-designated accounts;
(vi) integrate periodic

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statements with other shareholder transactions; and (vii) provide such other
related services as the shareholder may request.

As Participating Organizations, some Shareholder Servicing Agents also may
impose certain conditions on their customers, subject to the terms of the
Trust's Prospectus, in addition to or different from those imposed by the Trust,
such as requiring a minimum initial investment or by charging their customers a
direct fee for their services. Some Shareholder Servicing Agents may also act
and receive compensation for acting as custodian, investment manager, nominee,
agent or fiduciary for its customers or clients who are shareholders of the
Funds with respect to assets invested in the Funds. These Shareholder Servicing
Agents may elect to credit against the fees payable to it by its clients or
customers all or a portion of any fee received from the Trust with respect to
assets of those customers or clients invested in the Funds.

Table 5 in Appendix C shows the dollar amount of fees paid under the Shareholder
Service Plan with respect to Institutional Service Shares and Investor Shares of
each Fund services by the Funds. This information is provided for the past three
years (or shorter time a Fund has been operational).

FUND ACCOUNTING

Pursuant to a Fund Accounting Agreement, Forum Accounting provides the Funds
with accounting services, including the calculation of the Fund's net asset
value. For these services, Forum Accounting receives an annual fee ranging from
$12,000 to $36,000 depending upon the number of securities in which the Fund
invests and the number of classes in the Fund. Pursuant to a Fund Accounting
Agreement with Core Trust, Forum Accounting also provides portfolio accounting
services to each Portfolio, including the calculation of each Portfolio's net
asset value. For these services, Forum Accounting receives an annual fee of
$48,000 per year plus surcharges depending upon the amount and type of the
Portfolio's portfolio transactions and positions. The Fee for Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio is the lesser of 0.05%
of the average daily net assets of the Portfolios or $48,000 plus, for each
investor in a Portfolio above one (excluding FFSI and its affiliates), $6,000
per year.

Forum Accounting is required to use its best judgment and efforts in rendering
fund accounting services and is not be liable to Core Trust for any action or
inaction in the absence of bad faith, willful misconduct or gross negligence.
Forum Accounting is not responsible or liable for any failure or delay in
performance of its fund accounting obligations arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control and Core
Trust has agreed to indemnify and hold harmless Forum Accounting, its employees,
agents, officers and directors against and from any and all claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs, charges, counsel
fees and other expenses of every nature and character arising out of or in any
way related to Forum Accounting's actions taken or failures to act with respect
to a Portfolio or based, if applicable, upon information, instructions or
requests with respect to a Portfolio given or made to Forum Accounting by an
officer of the Trust duly authorized. This indemnification does not apply to
Forum Accounting actions taken or failures to act in cases of Forum Accounting's
own bad faith, willful misconduct or gross negligence.

Table 6 in Appendix C shows the dollar amount of fees paid for accounting
services by the Funds and the Portfolios. This information is provided for the
past three years (or shorter time a Fund or Portfolio has been operational).

FORUM FINANCIAL GROUP

Each of Forum, the Adviser, FFSI, the Transfer Agent
and Forum Accounting are members of the Forum Financial
Group of Companies. Each of these companies are
affiliated through the common control by John Y. Keffer.

7. DETERMINATION OF NET ASSET VALUE

The Funds do not determine net asset value on the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans' Day,

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Thanksgiving and Christmas. Purchases and redemptions are effected at the time
of the next determination of net asset value following the receipt of any
purchase or redemption order.

Pursuant to the rules of the SEC, both the Board and the Core Trust Board have
established procedures to stabilize each Fund's and each Portfolio's, as
applicable, net asset value at $1.00 per share. These procedures include a
review of the extent of any deviation of net asset value per share as a result
of fluctuating interest rates, based on available market rates, from each Fund's
and Portfolio's, as applicable, $1.00 amortized cost price per share. Should
that deviation exceed 1/2 of 1%, the Board and the Core Trust Board,
respectively, will consider whether any action should be initiated to eliminate
or reduce material dilution or other unfair results to shareholders. Such action
may include redemption of shares in kind, selling portfolio securities prior to
maturity, reducing or withholding dividends and utilizing a net asset value per
share as determined by using available market quotations.

In determining the approximate market value of portfolio investments, the
Portfolios may employ outside organizations, which may use a matrix or formula
method that takes into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula method not been used. All cash, receivables and current payables are
carried at their face value.

Each investor in a Portfolio, including the Funds, may add to or reduce its
investment in that Portfolio on each business day of the Portfolios (which
corresponds to Fund Business Days). The Portfolios maintain the same Business
Days as do the Funds. As of the close of regular trading on any Fund Business
Day, the value of a Fund's beneficial interest in a Portfolio is determined by
multiplying the net asset value of the Portfolio by the percentage, effective
for that day, which represents the Fund's share of the aggregate beneficial
interests in the Portfolio. Any additions or reductions, which are to be
effected as of the close of the Fund Business Day, are then effected. The Fund's
percentage of the aggregate beneficial interests in the Portfolio are then
recomputed as the percentage equal to the fraction (i) the numerator of which is
the value of the Fund's investment in the Portfolio as of the close of the Fund
Business Day plus or minus, as the case may be, the amount of net additions to
or reductions from the Fund's investment in the Portfolio effected as of that
time, and (ii) the denominator of which is the aggregate net asset value of the
Portfolio as of the close of the Fund Business Day plus or minus, as the case
may be, the amount of net additions to or reductions from the aggregate
investments in the Portfolio by all investors in the Portfolio. The percentage
determined is then applied to determine the value of the Fund's interest in the
Portfolio as of the close of the next Fund Business Day.

8. PORTFOLIO TRANSACTIONS

Purchases and sales of portfolio securities for the Portfolio usually are
principal transactions. Portfolio securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities. There
usually are no brokerage commissions paid for such purchases. Although Core
Trust does not anticipate that the Portfolio will pay any amounts of commission,
in the event the Portfolio pays brokerage commissions or other
transaction-related compensation, the payments may be made to broker-dealers who
pay expenses of the Portfolio that it would otherwise be obligated to pay
itself. Any transaction for which the Portfolio pays transaction-related
compensation will be effected at the best price and execution available, taking
into account the amount of any payments made on behalf of the Portfolio by the
broker-dealer effecting the transaction. Purchases from underwriters of
portfolio securities include a commission or concession paid by the issuer to
the underwriter, and purchases from dealers serving as market makers include the
spread between the bid and asked prices.

Since each Fund's and Portfolio's inception, no brokerage fees were paid by any
Fund (during those periods of the Funds invested directly in securities), nor
any Portfolio.

Allocations of transactions to dealers and the frequency of transactions are
determined for each Portfolio by the Advisers in their best judgment and in a
manner deemed to be in the best interest of shareholders of that Portfolio
rather than by any formula. The primary consideration is prompt execution of
orders in an effective manner and at the most favorable price available to the
Portfolio.

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Investment decisions for the Portfolios will be made independently from those
for any other account or investment company that is or may in the future become
managed by an Adviser or their respective affiliates. If, however, a Portfolio
and other investment companies or accounts managed by an Adviser are
contemporaneously engaged in the purchase or sale of the same security, the
transactions may be averaged as to price and allocated equitably to each
account. In some cases, this policy might adversely affect the price paid or
received by a Portfolio or the size of the position obtainable for the
Portfolio. In addition, when purchases or sales of the same security for a
Portfolio and for other investment companies managed by an Adviser occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large denomination purchases or sales.

No portfolio transactions are executed with the Adviser or any of its
affiliates.

9. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Shares of the Funds are sold on a continuous basis by the distributor without
any sales charge.

In addition to the situations described in the Prospectus, the Trust may redeem
shares involuntarily to reimburse a Fund for any loss sustained by reason of the
failure of a shareholder to make full payment for shares purchased by the
shareholder or to collect any charge relating to transactions effected for the
benefit of a shareholder which is applicable to a Fund's shares as provided in
the Prospectus from time to time.

The Trust has filed a formal election with the SEC pursuant to which the Funds
will only effect a redemption in portfolio securities in kind if a shareholder
is redeeming more than $250,000 or 1% of the Fund's total net assets, whichever
is less, during any 90-day period.

The Funds may wire proceeds of redemptions to shareholders that have elected
wire redemption privileges only if the wired amount is greater than $5,000. In
addition, the Funds will only wire redemption proceeds to financial institutions
located in the United States.

By use of the telephone redemption or exchange privilege, the shareholder
authorizes FFC to act upon the instruction of any person representing himself to
either be, or to have the authority to act on behalf of, the investor and
believed by FFC to be genuine. The records of FFC of such instructions are
binding.

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

EXCHANGE PRIVILEGE

The exchange privilege permits shareholders of the Funds to exchange their
shares for shares of any Participating Fund, which includes (i) the same class
of the other Funds and (ii) any other mutual fund for which Forum or its
affiliates act as investment adviser, manager or distributor and which
participates in the Trust's exchange privilege program.

Exchange transactions are made on the basis of relative net asset values per
share at the time of the exchange transaction plus any applicable sales charge
of the Participating Fund whose shares are acquired. Exchanges are accomplished
by (i) a redemption of the shares of the Fund exchanged at the next
determination of that Fund's net asset value after the exchange order in proper
form (including any necessary supporting documents required by the Fund whose
shares are being exchanged) is accepted by the Transfer Agent and (ii) a
purchase of the shares of the fund acquired at the next determination of that
fund's net asset value after (or occurring simultaneously with) the time of
redemption.

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Shares of any Participating Fund may be exchanged without a sales charge for
shares of any Participating Fund that are offered without a sales charge. If the
Participating Fund whose shares are purchased in the exchange transaction
imposes a higher sales charge the shareholder will be required to pay the sales
charge on the purchased shares. Shareholders are entitled to any reduced sales
charges of the Participating Fund into which they are exchanging to the extent
those reduced sales charges would be applicable to that shareholder's purchase
of shares.

The Funds do not charge for the exchange privilege and there is currently no
limit on the number of exchanges a shareholder may make, but each Fund reserves
the right to limit excessive exchanges by any shareholder. A pattern of frequent
exchanges may be deemed by the Transfer Agent to be contrary to the best
interests of the Fund's other shareholders and, at the discretion of the
Transfer Agent, may be limited by that Fund's refusal to accept additional
exchanges from the investor.

The terms of the exchange privilege are subject to change, and the privilege may
be terminated by any Participating Fund or the Trust. However the privilege will
not be terminated, and no material change that restricts the availability of the
privilege to shareholders will be implemented, without 60 days' advance notice
to shareholders. No notice need be given of an amendment whose only material
effect is to reduce amount of sales charge required to be paid on the exchange
and no notice need be given if redemptions of shares of a Fund are suspended or
a Fund temporarily delays or ceases the sale of its shares.

INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT

The Funds (other than Daily Assets Municipal Fund) offer an individual
retirement plan (the "IRA") for individuals who wish to use shares of a Fund as
a medium for funding individual retirement savings. Under the IRA, distributions
of net investment income and capital gain will be automatically reinvested in
the IRA established for the investor. The Funds' custodian furnishes custodial
services to the IRAs for a service fee. Shareholders wishing to invest in a Fund
through an IRA should contact the Transfer Agent for further information.

10. TAXATION

Qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended, does not involve governmental supervision of management or
investment practices or policies. The information set forth in the Prospectuses
and the following discussion relate solely to Federal income taxes on
distributions and other distributions by the Funds and assumes that the Funds
each qualify for treatment as a regulated investment company. Investors should
consult their own counsel for further details and for the application of
Federal, state and local tax laws to the investor's particular situation.

In order to continue to qualify for treatment as a regulated investment company
under the Internal Revenue Code, a Fund must distribute to its shareholders for
each taxable year at least 90% of its net investment income and must meet
several additional requirements. Among these requirements are the following: (1)
the Fund must derive at least 90% of its gross income each taxable year from
distributions, interest, payments with respect to securities loans, gains from
the sale or other disposition of securities and certain other income; (2)
subject to certain exceptions, at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets must be represented
by cash and cash items, securities of investment companies, U.S. Government
Securities and other securities, with these other securities limited, in respect
of any one issuer, to an amount that does not exceed 5% of the value of the
Fund's total assets; and (3) subject to certain exceptions, at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than securities of investment
companies and U.S. Government Securities) of any one issuer.

The Funds expect to derive substantially all of their gross income (exclusive of
capital gain) from sources other than dividends. Accordingly, it is expected
that none of the Funds' dividends or distributions will qualify for the
dividends-received deduction for corporations.

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<PAGE>

Distributions declared by the Fund in October, November, or December of any year
and payable to shareholders of record on a date in such a month will be deemed
to have been paid by the Fund and received by the shareholders on December 31 of
the year declared if paid by the Fund during the following January.

11. OTHER INFORMATION

CUSTODIAN

Pursuant to a Custodian Agreement with Core Trust, BankBoston N.A., 100 Federal
Street, Boston, Massachusetts 02106, acts as the custodian of Government
Portfolio's and Municipal Cash Portfolio's assets. Pursuant to a Custodian
Agreement with Core Trust, Imperial Trust Company, 201 North Figueroa Street,
Suite 610, Los Angeles, California 90012, acts as the custodian of each other
Portfolio's assets. The custodians' responsibilities include safeguarding and
controlling the Portfolios cash and securities and determining income payable on
and collecting interest on Portfolio investments.

COUNSEL

Legal matters in connection with the issuance of beneficial interest of the
Trust are passed upon by Seward & Kissel, 1200 G Street, N.W., Washington, D.C.
20005.

AUDITORS

KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts 02110, independent
auditors, acts as auditors for the Funds and as auditors for the Portfolios.

THE TRUST AND ITS SHARES

The Trust is a business trust organized under Delaware law. Delaware law
provides that shareholders shall be entitled to the same limitations of personal
liability extended to stockholders of private corporations for profit. The
securities regulators of some states, however, have indicated that they and the
courts in their state may decline to apply Delaware law on this point.

The Trust Instrument contains an express disclaimer of shareholder liability for
the debts, liabilities, obligations, and expenses of the Trust and requires that
a disclaimer be given in each contract entered into or executed by the Trust or
the Trustees. The Trust Instrument provides for indemnification out of each
series' property of any shareholder or former shareholder held personally liable
for the obligations of the series. The Trust Instrument also provides that each
series shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the series and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which Delaware law does not
apply, no contractual limitation of liability was in effect and the portfolio is
unable to meet its obligations. (FAS) believes that, in view of the above, there
is no risk of personal liability to shareholders.

The Trust Instrument further provides that the Trustees shall not be liable to
any person other than the Trust or its shareholders; moreover, the Trustees
shall not be liable for any conduct whatsoever, provided that a Trustee is not
protected against any liability to which he would otherwise by subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.

The Board is required to call a meeting of shareholders for the purpose of
voting upon the removal of any trustee when so requested in writing by the
shareholders of record holding at least 10% of the Trust's outstanding shares.

Each series' capital consists of shares of beneficial interest. Shares are fully
paid and nonassessable, except as set forth above with respect to Trustee and
shareholder liability. Shareholders representing 10% or more of the Trust or a
series may, as set forth in the Trust Instrument, call meetings of the Trust or
series for any purpose related to the Trust or series, as the case may be,
including, in the case of a meeting of the entire Trust, the purpose of voting
on

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<PAGE>

removal of one or more Trustees. The Trust or any series may be terminated upon
the sale of its assets to, or merger with, another open-end management
investment company or series thereof, or upon liquidation and distribution of
its assets. Generally such terminations must be approved by the vote of the
holders of a majority of the outstanding shares of the Trust or the series;
however, the Trustees may, without prior shareholder approval, change the form
of organization of the Trust by merger, consolidation or incorporation. If not
so terminated or reorganized, the Trust and its series will continue
indefinitely. Under the Trust Instrument, the Trustees may, without shareholder
vote, cause the Trust to merge or consolidate into one or more trusts,
partnerships or corporations or cause the Trust to merge or consolidate into one
or more trusts, partnerships or corporations or cause the Trust to be
incorporated under Delaware law, so long as the surviving entity is an open-end
management investment company that will succeed to or assume the Trust's
registration statement.

FUND STRUCTURE

CORE AND GATEWAY. The Funds seek to achieve their objective by investing all of
their investable assets in a separate portfolio of a registered, open-end
management investment company with substantially the same investment objective
and policies as the Fund. This "Core and Gateway" fund structure is an
arrangement whereby one or more investment companies or other collective
investment vehicles that share investment objectives -- but offer their shares
through distinct distribution channels -- pool their assets by investing in a
single investment company having substantially the same investment objective and
policies (a "Core Portfolio"). This means that the only investment securities
that will be held by a Fund will be the Fund's interest in the Core Portfolio.
This structure permits other collective investment vehicles to invest
collectively in a Core Portfolio, allowing for greater economies of scale in
managing operations of the single Core Portfolio. The Board retains the right to
withdraw a Fund's investments from a Core Portfolio at any time; the Fund would
then resume investing directly in individual securities of other issuers or
could re-invest all of its assets in another Core Portfolio.

FUND SHAREHOLDERS' VOTING RIGHTS. A Core Portfolio normally will not hold
meetings of its investors except as required under the 1940 Act. As a
shareholder in a Core Portfolio, a Fund is entitled to vote in proportion to its
relative interest in the Core Portfolio. On any issue, a Fund will vote its
shares in a Core Portfolio in proportion to the votes cast by its shareholders.
If there are other investors in a Core Portfolio, there can be no assurance that
any issue that receives a majority of the votes cast by the Fund's shareholders
will receive a majority of votes cast by all Core Portfolio shareholders.
Generally, a Fund will hold a meeting of its shareholders to obtain instructions
on how to vote its interest in a Core Portfolio when the Core Portfolio is
conducting a meeting of its shareholders. However, subject to applicable
statutory and regulatory requirements, a Fund will not seek instructions from
its shareholders with respect to (i) any proposal relating to a Core Portfolio
that, if made with respect to the Fund, would not require the vote of Fund
shareholders, or (ii) any proposal relating to the Core Portfolio that is
identical to a proposal previously approved by the Fund's shareholders.

In addition to a vote to remove a trustee or change a fundamental policy,
examples of matters that will require approval of shareholders of a Core
Portfolio include, subject to applicable statutory and regulatory requirements:
the election of trustees; approval of an investment advisory contract; the
dissolution of a Core Portfolio; certain amendments of the organizational
documents for the Core Portfolio; a merger, consolidation or sale of
substantially all of a Core Portfolio's assets; or any additional matters
required or authorized by the charter or trust instrument and by-laws of a Core
Portfolio or any registration statement of a Core Portfolio, or as the directors
or trustees of the Core Portfolio may consider desirable. The board of trustees
of a Core Portfolio will typically reserve the power to change nonfundamental
policies without prior shareholder approval.

CONSIDERATIONS OF INVESTING IN A PORTFOLIO. A Fund's investment in a Core
Portfolio may be affected by the actions of other large investors in the Core
Portfolio, if any. For example, if the Core Portfolio had a large investor other
than the Fund that redeemed its interest in the Core Portfolio, the Core
Portfolio's remaining investors (including the Fund) might, as a result,
experience higher pro rata operating expenses, thereby producing lower returns.
A Fund may withdraw its entire investment from the Core Portfolio at any time,
if the Board determines that it is in the best interests of the Fund and its
shareholders to do so. A Fund might withdraw, for example, if other investors in
the Core Portfolio, by a vote of shareholders, changed the investment objective
or policies of the Core Portfolio in a manner not acceptable to the Board. A
withdrawal could result in a distribution in kind of portfolio securities (as

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<PAGE>

opposed to a cash distribution) by the Core Portfolio. That distribution could
result in a less diversified portfolio of investments for the Fund and could
affect adversely the liquidity of the Fund's portfolio. If the Fund decided to
convert those securities to cash, it normally would incur transaction costs. If
a Fund withdrew its investment from the Core Portfolio, the Board would consider
what action might be taken, including the management of the Fund's assets in
accordance with its investment objective and policies by the Adviser or the
investment of all of the Fund's investable assets in another pooled investment
entity having substantially the same investment objective as the Fund.

12. FINANCIAL STATEMENTS

AUGUST 31, 1997 ANNUAL REPORT

The Statements of Assets and Liabilities, Statements of Operations, Statements
of Changes in Net Assets, notes thereto and Financial Highlights of Daily Assets
Government Fund (formerly known as Daily Assets Treasury Fund) and Daily Assets
Cash Fund for the fiscal year ended August 31, 1997 and the Independent
Auditors' Report thereon (included in the Annual Report to Shareholders), which
are delivered along with this SAI, are incorporated herein by reference. Also
incorporated by reference into this SAI are the Schedules of Investments,
Statements of Assets and Liabilities, Statements of Operations, Statements of
Changes in Net Assets, and notes thereto, of Government Portfolio (formerly
known as Treasury Portfolio) and Cash Portfolio for the fiscal year ended August
31, 1997 and the Independent Auditors' Report thereon.

FEBRUARY 28, 1998 SEMI-ANNUAL REPORT

The Statements of Assets and Liabilities, Statements of Operations, Statements
of Changes in Net Assets, notes thereto and Financial Highlights of Daily Assets
Government Fund (formerly known as Daily Assets Treasury Fund) and Daily Assets
Cash Fund for the semi-annual period ended February 28, 1998 (included in the
Semi-Annual Report to Shareholders), which are delivered along with this SAI,
are incorporated herein by reference. Also incorporated by reference into this
SAI are the Schedules of Investments, Statements of Assets and Liabilities,
Statements of Operations, Statements of Changes in Net Assets, and notes
thereto, of Government Portfolio (formerly known as Treasury Portfolio) and Cash
Portfolio for the semi-annual period ended February 28, 1998.

The Statements of Assets and Liabilities, Statements of Operations, Statements
of Changes in Net Assets, notes thereto and Financial Highlights of Daily Assets
Treasury Obligations Fund and Daily Assets Government Obligations Fund (formerly
known as Daily Assets Government Fund) for the semi-annual period ended February
28, 1998 (included in the Semi-Annual Report to Shareholders), which are
delivered along with this SAI, are incorporated herein by reference. Also
incorporated by reference into this SAI are the Schedules of Investments,
Statements of Assets and Liabilities, Statements of Operations, Statements of
Changes in Net Assets, and notes thereto, of Treasury Cash Portfolio and
Government Cash Portfolio for the semi-annual period February 28, 1998.

DAILY ASSETS MUNICIPAL FUND

As Daily Assets Municipal Fund and Municipal Cash Portfolio had not as of
February 28, 1998 commenced operations, no financial statements are available.

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<PAGE>

APPENDIX A - DESCRIPTION OF SECURITIES RATINGS

CORPORATE BONDS

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S"). Bonds which are rated Aaa are
judged by Moody's to be of the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest payments
are protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the fundamentally strong
position of such issues.

Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment some time in the future.

Note: Those bonds in the Aa and A groups which Moody's
believes possess the strongest investment attributes
are designated by the symbols Aa1 and A1.

STANDARD AND POOR'S CORPORATION ("S&P"). Bonds rated AAA have the highest rating
assigned by S&P. Capacity to pay interest and repay principal is extremely
strong.

Bonds rated AA have a very strong capacity to pay interest and repay principal
and differ from the highest rated issues only in small degree.

Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt rated in higher rated
categories.

Note: The ratings for AA and A may be modified by the addition of a plus (+) or
minus (-) sign to show the relative standing within the rating category.

FITCH INVESTORS SERVICE, INC. ("FITCH"). AAA Bonds are considered to be
investment grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.

AA Bonds are considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated AAA. Because bonds rated in the AAA
and AA categories are not significantly vulnerable to foreseeable future
developments, shorter-term debt of these issuers is generally rate F-1+.

A Bonds are considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

Plus (+) and minus (-) signs are used with a rating symbol to indicate the
relative position of a credit within the rating category. Plus and minus signs,
however, are not used in the AAA categories.

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<PAGE>

COMMERCIAL PAPER

MOODY'S INVESTORS SERVICE, INC. Moody's two highest ratings for short-term debt,
including commercial paper, are Prime-1 and Prime-2. Both are judged investment
grade, to indicate the relative repayment ability of rated issuers.

Issuers rated Prime-1 have a superior ability for repayment of senior short-term
debt obligations. Prime-1 repayment ability will often be evidenced by many of
the following characteristics:

-- Leading market positions in well-established industries.
-- High rates of return on funds employed.
-- Conservative capitalization structure with moderate reliance
on debt and ample asset protection.
-- Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.
-- Well-established access to a range of financial markets and
assured sources of alternate liquidity.

Issuers rated Prime-2 by Moody's have a strong ability for repayment of senior
short-term debt obligations. This will normally be evidenced by many of the
characteristics of issuers rated Prime-1 but to a lesser degree. Earnings trends
and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

STANDARD AND POOR'S CORPORATION. S&P's two highest commercial paper ratings are
A and B. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety. An A-1 designation
indicates that the degree of safety regarding timely payment is either
overwhelming or very strong. Those issues determined to possess overwhelming
safety characteristics are denoted with a plus (+) sign designation. The
capacity for timely payment on issues with an A-2 designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1. A-3 issues have a satisfactory capacity for timely payment. They are,
however, somewhat more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations. Issues rated B
are regarded as having only an adequate capacity for timely payment. However,
such capacity may be damaged by changing conditions or short-term adversities.

FITCH INVESTORS SERVICE, INC. Fitch's short-term ratings apply to debt
obligations that are payable on demand or have original maturities of generally
up to three years, including commercial paper, certificates of deposit,
medium-term notes, and municipal and investment notes.

F-1+. Issues assigned this rating are regarded as having the strongest degree of
assurance for timely payment.

F-1. Issues assigned this rating reflect an assurance of timely payment only
slightly less in degree than issues rated F-1+.

F-2. Issues assigned this rating have a satisfactory degree of assurance for
timely payment, but the margin of safety is not as great as for issues assigned
F-1+ or F-1 ratings.

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<PAGE>

APPENDIX B - PERFORMANCE INFORMATION

For the seven day period ended August 31, 1997, the annualized yields of each of
the classes of the Funds that were then operating were as follows:
<TABLE>
<S> <C> <C> <C> <C>
TAX EQUIVALENT TAX EQUIVALENT
CURRENT YIELD EFFECTIVE YIELD CURRENT YIELD EFFECTIVE YIELD
DAILY ASSETS TREASURY
OBLIGATIONS FUND

Investor Shares -- -- -- --
Institutional Service Shares -- -- -- --
Institutional Shares -- -- -- --
DAILY ASSETS GOVERNMENT FUND
Investor Shares -- -- -- --
Institutional Service Shares 4.76% 4.87% -- --
Institutional Shares -- -- -- --
DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
Investor Shares -- -- -- --
Institutional Service Shares -- -- -- --
Institutional Shares -- -- -- --

DAILY ASSETS CASH FUND
Investor Shares -- -- -- --
Institutional Service Shares 5.19% 5.33% -- --
Institutional Shares -- -- -- --

DAILY ASSETS MUNICIPAL FUND
Investor Shares -- -- -- --
DAILY ASSETS MUNICIPAL FUND

Investor Shares -- -- -- --
Institutional Service Shares -- -- -- --
Institutional Shares -- -- -- --
</TABLE>

As of August 31, 1997, there were no outstanding Institutional Shares, Investor
Shares or Institutional Service Shares of each Fund other than Daily Assets
Government Fund and Daily Assets Cash Fund.

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<PAGE>

APPENDIX C- MISCELLANEOUS TABLES

TABLE 1 - INVESTMENT ADVISORY FEES ($)

<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
TREASURY CASH PORTFOLIO

Year ended August 31, 1997 0
Year ended August 31, 1996 12,930 0 12,930
GOVERNMENT PORTFOLIO
Period ended August 31, 1997 9,064 0 9,064
Year ended March 31, 1997 20,637 0 20,637
Year ended March 31, 1996 69,466 0 69,466
Year ended March 31, 1995 59,382 53,382 6,000

GOVERNMENT CASH PORTFOLIO

Year ended August 31, 1997 196,857 0 196,857
Year ended August 31, 1996 156,552 0 156,552
CASH PORTFOLIO
Year ended August 31, 1997 72,872 0 72,872
Year ended August 31, 1996 38,083 0 38,083

MUNICIPAL CASH PORTFOLIO
Year ended August 31, 1997 -- -- --

</TABLE>

112
<PAGE>

TABLE 2 - ADMINISTRATION FEES ($)

<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
TREASURY CASH PORTFOLIO

Year ended August 31, 1997 24,287 14,346 9,941
Year ended August 31, 1996 19,198 9,307 9,891
GOVERNMENT PORTFOLIO
Period ended August 31, 1997 18,128 18,128 0
Year ended March 31, 1997 41,274 41,274 0
Year ended March 31, 1996(1)

GOVERNMENT CASH PORTFOLIO

Year ended August 31, 1997 252,821 0 252,821
Year ended August 31, 1996 230,547 104,558 125,989
CASH PORTFOLIO
Year ended August 31, 1997 92,652 7,621 85,031
Year ended August 31, 1996 56,125 3,719 52,406

MUNICIPAL CASH PORTFOLIO
Year ended August 31, 1997 -- -- --

DAILY ASSETS TREASURY OBLIGATIONS FUND
Year ended August 31, 1997 -- -- --
DAILY ASSETS GOVERNMENT FUND

Period ended August 31, 1997 18,123 0 18,123
Year ended March 31, 1997 41,232 7,453 33,779
Year ended March 31, 1996
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND

Year ended August 31, 1997 -- -- --
DAILY ASSETS CASH FUND

Year ended August 31, 1997 7,453 7,453 0
DAILY ASSETS MUNICIPAL FUND

Year ended August 31, 1997 -- -- --
</TABLE>

113
<PAGE>

TABLE 3 - INVESTOR SHARES RULE 12B-1 FEES ($)

<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
DAILY ASSETS TREASURY OBLIGATIONS FUND
Year ended August 31, 1997 -- -- --
DAILY ASSETS GOVERNMENT FUND

Period ended August 31, 1997 -- -- --
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND

Year ended August 31, 1997 -- -- --
DAILY ASSETS CASH FUND
Period ended August 31, 1997 -- -- --
DAILY ASSETS MUNICIPAL FUND
Year ended August 31, 1997 -- -- --
</TABLE>

For the fiscal year ended August 31, 1997, no Investor Shares were outstanding
and, accordingly, no fees were payable under the Investor Class Plan.

114
<PAGE>

TABLE 4 - TRANSFER AGENCY FEES ($)

<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
DAILY ASSETS TREASURY OBLIGATIONS FUND
Institutional Service Shares
Year ended August 31, 1997 -- -- --
DAILY ASSETS GOVERNMENT FUND
Institutional Service Shares

Period ended August 31, 1997 50,810 44,054 6,756
Year ended March 31, 1997 116,051 101,485 14,566
Year ended March 31, 1996 110,792 96,881 13,911
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
Institutional Service Shares

Year ended August 31, 1997 -- -- --
DAILY ASSETS CASH FUND
Institutional Service Shares

Period ended August 31, 1997 29,772 17,766 12,006

DAILY ASSETS MUNICIPAL FUND
Institutional Service Shares
Year ended August 31, 1997 -- -- --
</TABLE>

As of August 31, 1997, there were no outstanding Institutional Shares, Investor
Shares or Institutional Service Shares of each Fund other than Daily Assets
Government Fund and Daily Assets Cash Fund.

115
<PAGE>

TABLE 5 - SHAREHOLDER SERVICE FEES ($)

<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
DAILY ASSETS TREASURY OBLIGATIONS FUND
Institutional Service Shares

Year ended August 31, 1997 -- -- --
Investor Shares

Period ended August 31, 1997 -- -- --
DAILY ASSETS GOVERNMENT FUND
Institutional Service Shares

Period ended August 31, 1997 -- -- --
Investor Shares
Period ended August 31, 1997 -- -- --
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
Institutional Service Shares

Year ended August 31, 1997 -- -- --
Investor Shares
Period ended August 31, 1997 -- -- --
DAILY ASSETS CASH FUND
Institutional Service Shares
Year ended August 31, 1997 -- -- --
Investor Shares
Period ended August 31, 1997 -- -- --
DAILY ASSETS MUNICIPAL FUND
Institutional Service Shares
Year ended August 31, 1997 -- -- --
Investor Shares
Period ended August 31, 1997 -- -- --
</TABLE>

As of August 31, 1997, there were no outstanding Investor Shares and no
effective Shareholder Plan with respect to Institutional Service Shares of any
Fund.

116
<PAGE>

TABLE 6 - FUND ACCOUNTING FEES ($)

<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
TREASURY CASH PORTFOLIO

Year ended August 31, 1997 24,279 0 24,279
Year ended August 31, 1996 28,518 19,955 8,563
GOVERNMENT PORTFOLIO
Period ended August 31, 1997 20,000 0 20,000
Year ended March 31, 1997 48,000 0 48,000
Year ended March 31, 1996(1)

GOVERNMENT CASH PORTFOLIO

Year ended August 31, 1997 48,000 0 48,000
Year ended August 31, 1996 42,000 0 42,000
CASH PORTFOLIO
Year ended August 31, 1997 48,000 0 48,000
Year ended August 31, 1996 42,000 14,957 27,043

MUNICIPAL CASH PORTFOLIO
Year ended August 31, 1997 -- -- --
DAILY ASSETS TREASURY OBLIGATIONS FUND
Year ended August 31, 1997 -- -- --
DAILY ASSETS GOVERNMENT FUND

Period ended August 31, 1997 5,000 0 5,000
Year ended March 31, 1997 12,000 0 12,000
Year ended March 31, 1996
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND

Year ended August 31, 1997 -- -- --
DAILY ASSETS CASH FUND
Year ended August 31, 1997
DAILY ASSETS MUNICIPAL FUND
Year ended August 31, 1997 -- -- --
</TABLE>

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<PAGE>

TABLE 7 - 5% SHAREHOLDERS

As of May 1, 1998, the officers and Trustees of the Trust as a group owned less
than 1% of the outstanding shares of each Fund. Also as of that date, the
shareholders listed below owned more than 5% of each Fund. Shareholders owning
25% or more of the shares of a Fund or of the Trust as a whole may be deemed to
be controlling persons. By reason of their substantial holdings of shares, these
persons may be able to require the Trust to hold a shareholder meeting to vote
on certain issues and may be able to determine the outcome of any shareholder
vote. As noted, certain of these shareholders are known to the Trust to hold
their shares of record only and have no beneficial interest, including the right
to vote, in the shares.
<TABLE>
<S> <C> <C>
PERCENTAGE OF PERCENTAGE OF SHARES OF
SHARES OWNED FUND OWNED

DAILY ASSETS GOVERNMENT FUND
Institutional Service Shares
H.M. Payson & Co. Custody Account
P.O. Box 31, Portland, ME 04112
H.M. Payson & Co. Custody Account
P.O. Box 31, Portland, ME 04112

DAILY ASSETS CASH FUND

Institutional Service Shares
H.M. Payson & Co. Custody Account
P.O. Box 31, Portland, ME 04112
H.M. Payson & Co. Custody Account
P.O. Box 31, Portland, ME 04112

</TABLE>

118
<PAGE>

STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1997
DAILY ASSETS DAILY ASSETS
TREASURY CASH
FUND FUND
------------------------------ -------------------------
ASSETS:
Investments in Portfolios of Core Trust (Delaware) at value (a) $ 44,321,412 $ 12,129,179
------------------------------ -------------------------

LIABILITIES:
Dividends payable 166,355 49,579
Payable to related parties (Note 3) 3,769 -
Accrued expenses and other liabilities 35,497 3,526
------------------------------ -------------------------
Total Liabilities 205,621 53,105
------------------------------ -------------------------
NET ASSETS $ 44,115,791 $ 12,076,074
============================== =========================
COMPONENTS OF NET ASSETS:
Paid in capital 44,094,527 12,076,074
Undistributed net investment income 19,454 -
Accumulated net realized gain (loss) 1,810 -
------------------------------ -------------------------
NET ASSETS $ 44,115,791 $ 12,076,074
============================== =========================
SHARES OF BENEFICIAL INTEREST: 44,094,527 12,076,074

NET ASSET VALUE PER SHARE
(OFFERING AND REDEMPTION PRICE PER SHARE): $ 1.00 $ 1.00

(a) Cost of Investments. $ 44,321,412 $ 12,129,179

</TABLE>

See Notes to Financial Statements. FORUM FUNDS(R)

119
<PAGE>

STATEMENTS OF OPERATIONS
<TABLE>
<S> <C> <C> <C>
DAILY ASSETS DAILY ASSETS
TREASURY DAILY ASSETS CASH
FUND TREASURY FUND
FOR THE PERIOD FUND FOR THE PERIOD
APRIL 1, 1997 FOR THE YEAR OCTOBER 1, 1996
THROUGH ENDED THROUGH
AUGUST 31, 1997 MARCH 31, 1997 AUGUST 31, 1997
------------------------- ------------------------- --------------------
INVESTMENT INCOME ALLOCATED FROM
PORTFOLIOS OF CORE TRUST (DELAWARE):
Interest Income $ 952,989 $ 2,143,644 $ 415,538
Net expenses (27,195) (61,917) (11,052)
------------------------- ------------------------- --------------------
Net investment income allocated from Portfolios of
Core Trust (Delaware) (Note 2) 925,794 2,081,727 404,486
------------------------- ------------------------- --------------------
EXPENSES:
Management (Note 3) 18,123 41,232 7,453
Transfer agent (Note 3) 50,810 116,051 29,772
Accounting (Note 3) 5,000 12,000 11,000
Audit 7,500 9,500 8,500
Legal (Note 3) 8,658 26,406 4,475
Trustees 1,047 3,270 463
Registration 4,990 20,852 8,172
Reporting 4,493 33,887 8,250
Miscellaneous 6,863 7,091 1,422
------------------------- ------------------------- --------------------
Total expenses 107,484 270,289 79,507
Expenses reimbursed and fees waived (Note 4) (44,054) (125,976) (52,035)
------------------------- ------------------------- --------------------
Net expenses 63,430 144,313 27,472
------------------------- ------------------------- --------------------
NET INVESTMENT INCOME 862,364 1,937,414 377,014
------------------------- ------------------------- --------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
ALLOCATED FROM PORTFOLIOS OF
CORE TRUST (DELAWARE) 15,133 (1,082) -
------------------------- ------------------------- --------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 877,497 $ 1,936,332 $ 377,014
========================= ========================= ====================
</TABLE>

See Notes to Financial Statements. FORUM FUNDS(R)

120
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<S> <C> <C> <C>
DAILY ASSETS
TREASURY DAILY ASSETS DAILY ASSETS
FUND TREASURY TREASURY
FOR THE PERIOD FUND FUND
APRIL 1, 1997 FOR THE YEAR FOR THE YEAR
THROUGH ENDED ENDED
AUGUST 31, 1997 MARCH 31, 1997 MARCH 31, 1996
----------------------- --------------------- ----------------------------
NET ASSETS - BEGINNING OF PERIOD $ 43,975,152 $ 43,102,929 $ 36,328,855
--------------------------------- ----------------------- --------------------- ----------------------------
OPERATIONS:
Net investment income 862,364 1,937,414 1,966,077
Net realized gain (loss) allocated from
Portfolios of Core Trust (Delaware) 15,133 (1,082) (12,241)
----------------------- --------------------- ----------------------------
Net increase (decrease) in net assets
resulting from operations 877,497 1,936,332 1,953,836
----------------------- --------------------- ----------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (862,364) (1,937,414) (1,967,071)
----------------------- --------------------- ----------------------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Sale of shares 35,543,377 93,585,220 83,226,136
Reinvestment of distributions 68,736 94,618 56,702
Redemption of shares (35,486,607) (92,806,533) (76,495,529)
----------------------- --------------------- ----------------------------
Net increase (decrease) from capital
transactions 125,506 873,305 6,787,309
----------------------- --------------------- ----------------------------
Net increase (decrease) 140,639 872,223 6,774,074
----------------------- --------------------- ----------------------------
NET ASSETS - END OF PERIOD $ 44,115,791 $ 43,975,152 $ 43,102,929
-------------------------- ======================= ===================== ============================
</TABLE>

See Notes to Financial Statements. FORUM FUNDS(R)

121
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<S> <C> <C>
DAILY ASSETS
CASH
FUND
FOR THE PERIOD
OCTOBER 1, 1996
THROUGH
AUGUST 31, 1997
-------------------------------
NET ASSETS - BEGINNING OF PERIOD $ -
------------------------------- -------------------------------
OPERATIONS:
Net investment income 377,014
-------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (377,014)
-------------------------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Sale of shares 32,622,774
Reinvestment of distributions 12,391
Redemption of shares (20,559,091)
-------------------------------
Net increase (decrease) from capital
transactions 12,076,074
-------------------------------
Net increase (decrease) 12,076,074
-------------------------------
NET ASSETS - END OF PERIOD $ 12,076,074
-------------------------- ===============================
</TABLE>

See Notes to Financial Statements. FORUM FUNDS(R)

<PAGE>

FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS
FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
DAILY ASSETS DAILY ASSETS
TREASURY CASH
FUND FUND
---------------------------------------------------------------------- ------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED
AUGUST 31, MARCH 31, AUGUST 31,
------------------------------------------------------------------ ------------------------
1997 (a) 1997 1996 1995 1994 1993 (b) 1997 (b)
Net Asset Value, Beginning of
Period $ 1.00 $1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- -------- -------- --------- ---------------
Investment Operations
Net Investment Income (Loss) 0.02 0.05 0.05 0.04 0.03 0.02 0.05
--------- --------- --------- -------- -------- --------- ---------------
Distributions From
Net Investment Income (0.02) (0.05) (0.05) (0.04) (0.03) (0.02) (0.05)
--------- --------- --------- -------- -------- --------- ---------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $1.00 $ 1.00 $1.00 $ 1.00 $ 1.00
========= ========= ========= ======== ======== ========= ===============
Total Return 2.01% (c) 4.80% 5.18% 4.45% 2.83% 3.13% (d) 4.70% (c)

Ratio/Supplementary Data
Net Assets at End of Period (000'S
omitted) $44,116 $43,975 $43,103 $36,329 $26,505 $4,687 $12,076
Ratios to Average Net Assets:
Expenses including
reimbursement/waiver 0.50% (d) 0.50% 0.50% 0.37% 0.33% 0.22% (d) 0.52% (d)
Expenses excluding
reimbursement/waiver (e) 0.95% (d) 0.99% 1.06% 1.10% 1.17% 2.43% (d) 1.22% (d)
Net investment income (loss) including
reimbursement/waiver 4.76% (d) 4.70% 5.01% 4.45% 2.82% 2.92% (d) 5.06% (d)
</TABLE>

(a) Effective June 19, 1997, Daily Assets Treasury Fund changed its year end
from March 31 to August 31.
(b) See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(c) Not Annualized.
(d) Annualized.
(e) During each period, various fees and expenses were waived and reimbursed,
respectively. The ratio of Gross Expenses to Average Net Assets reflects
the expense ratio excluding any waivers and reimbursements for the Fund and
its corresponding Portfolio.

See Notes to Financial Statements. FORUM FUNDS(R)

122
<PAGE>

NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1997
- - ------------------------------------------------------------------------------

NOTE 1. ORGANIZATION

Forum Funds(R) (the "Trust") is an open-end management investment company
organized as a Delaware business trust. The Trust currently has fourteen 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 are Daily Assets Treasury Fund and Daily Assets Cash
Fund (each a "Fund" and collectively "the Funds"), each of which is a
diversified fund that commenced operations on July 1, 1992 and October 1, 1996,
respectively.

Effective June 19, 1997, Daily Assets Treasury Fund changed its fiscal year end
from March 31 to August 31.

MASTER FEEDER ARRANGEMENT - Daily Assets Treasury Fund and Daily Assets Cash
Fund seek to achieve their investment objectives by investing all of their
investable assets in Treasury Portfolio and Cash Portfolio, respectively,
separate diversified portfolios of Core Trust (Delaware) ("Core Trust"), a
registered open-end management investment company. Each of the Funds has the
same investment objective and substantially similar policies as the respective
Core Trust Portfolio (each a "Portfolio" and collectively the "Portfolios"), in
which it invests. A Fund may withdraw its investments from a Portfolio at any
time if the Trust's Board of Trustees (the "Board") determines that it is in the
best interest of the Fund and its shareholders to do so. The Funds account for
their investments in a Portfolio as partnership investments. This is commonly
referred to as a master-feeder arrangement.

The performance of the Funds is directly affected by the performance of their
respective Portfolios. The financial statements of Treasury Portfolio and Cash
Portfolio, including the schedule of investments, are included elsewhere in this
report and should be read in conjunction with the Funds' financial statements.
Substantially all of Treasury Portfolio was owned by Daily Assets Treasury Fund
and the percentage of Cash Portfolio owned by Daily Assets Cash Fund was
approximately 4.7% as of August 31, 1997.

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 periods. Actual results could differ from those estimates, but
are expected to be immaterial.

The following represent significant accounting policies of the Funds:

SECURITY VALUATION - Each Fund records its investment in the Portfolios at
value. Valuation of securities held in the Portfolios are discussed in the
Portfolios Notes to Financial Statements of Core Trust, which are included
elsewhere in this report.

INVESTMENT INCOME AND EXPENSES - Each Fund records daily its pro rata share of
each Portfolio's income, expenses and realized gain and loss. In addition, each
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 federal 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.

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.

FORUM FUNDS(R)

123
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
AUGUST 31, 1997
- - ------------------------------------------------------------------------------

NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS

INVESTMENT ADVISER - Forum Advisors, Inc.(R) ("Forum Advisors") is the
investment adviser of Treasury Portfolio and provides professional management of
that Portfolio's investments. The investment adviser of Cash Portfolio is Linden
Asset Management, Inc. ("Linden") and provides professional management of that
Portfolio's investments. Forum Advisors and Linden each provide certain
subadvisory assistance for the Portfolios they do not directly advise. The Funds
may withdraw their investment from the Portfolio at any time if the Board
determines that it is in the best interest of the Funds and their shareholders
to do so. In the event the Funds were to make such a withdrawal, the Trust has
retained Forum Advisors and Linden to act as investment advisers to the Funds.
Neither Forum Advisors nor Linden receive any advisory fees with respect to the
Funds as long as the Funds remain completely invested in the Portfolios.

MANAGEMENT AND OTHER SERVICES - Forum Financial Corp.(R) ("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 plus account and service charges.
Forum Accounting Services, Limited Liability Company ("FACS"), an affiliate of
FFC and Forum Advisors, provides fund accounting services to the Funds. For its
services, FAcS receives from each Fund an annual fee of $12,000 plus certain
amounts based upon the number and types of portfolio transactions within each
Fund.

Effective June 19, 1997, the manager of the Trust is Forum Administrative
Services, Limited Liability Company ("FAdS"), a registered broker-dealer and a
member of the National Association of Securities Dealers, Inc. FAdS receives a
management fee for its services to each Fund at an annual rate of 0.10% of the
average daily net assets of each Fund. In addition, certain legal expenses are
charged to the Funds by FAdS. For the periods ended August 31, 1997, the
respective amounts charged to Daily Assets Treasury Fund and Daily Assets Cash
Fund were $464 and $420. Forum Financial Services, Inc. ("FFSI") acts as the
distributor of the Funds' shares. Prior to June 19, 1997, FFSI also served as
manager of the Trust pursuant to the same terms and compensation as FAdS.

NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES

FFC and FAdS have voluntarily undertaken to waive a portion of their fees and
assume certain expenses of the Funds so that total expenses of the Funds would
not exceed certain limitations including each Funds allocation of expenses from
its corresponding Portfolio. Prior to June 19, 1997, FFSI, as manager of the
Trust, voluntarily waived a portion of its fees. For the periods ended August
31, 1997, waived fees and reimbursement of expenses were as follows:
<TABLE>

<S> <C> <C> <C> <C>
Expenses
Reimbursed Fees Waived
---------- -----------------------
FFSI and FAdS FFC FFSI and FAdS Total
------------- --- ------------- ------
Daily Assets Treasury Fund $ - $44,054 $ - $44,054
Daily Assets Cash Fund 26,816 17,766 7,453 52,035
</TABLE>

FORUM FUNDS(R)

124
<PAGE>

INDEPENDENT AUDITORS' REPORT
- - ------------------------------------------------------------------------------

The Board of Trustees and Shareholders
Forum Funds

We have audited the accompanying statements of assets and liabilities of Daily
Assets Treasury Fund and Daily Assets Cash Fund, series of Forum Funds (the
Funds) as of August 31, 1997, and the related statements of operations, changes
in net assets and financial highlights, for the period from April 1, 1997 to
August 31, 1997 for Daily Assets Treasury Fund and for the period from October
1, 1996 (commencement of operations) to August 31, 1997 for Daily Assets Cash
Fund. These financial statements and financial highlights are the responsibility
of the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The statement
of operations for the year ended March 31, 1997, statements of changes in net
assets for each of the years in the two-year period ended March 31, 1997, and
the financial highlights for each of the years in the four-year period ended
March 31, 1997 and for the period from July 1, 1992 (commencement of operations)
to March 31, 1993 for Daily Assets Treasury Fund were audited by other auditors
whose report dated May 9, 1997 expressed an unqualified opinion on those
financial statements and financial highlights.

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 and financial highlights. 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Daily
Assets Treasury Fund and Daily Assets Cash Fund, as of August 31, 1997, the
results of their operations, changes in their net assets and their financial
highlights for the years or periods specified in the first paragraph above, in
conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Boston, Massachusetts
October 3, 1997

125
<PAGE>

PART C
OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(A) FINANCIAL STATEMENTS.

Included in the Prospectus:

For Institutional Shares, Institutional Service Shares and Investor
Shares of Daily Assets Treasury Obligations Fund, Daily Assets
Government Fund, Daily Assets Government Obligations Fund, Daily Assets
Cash Fund, Daily Assets Municipal Fund:

Financial Highlights

Included in the Statement of Additional Information:

For Institutional Shares, Institutional Service Shares and Investor Shares
of Daily Assets Treasury Obligations Fund, Daily Assets Government Fund,
Daily Assets Government Obligations Fund, Daily Assets Cash Fund, Daily
Assets Municipal Fund:

The Funds' Statements of Assets and Liabilities, Statements of
Operations, Statements of Changes in Net Assets, notes to
financial statements, Financial Highlights for the year ended
August 31, 1997, and the Schedules of Investments, Statements
of Assets and Liabilities, Statements of Operations,
Statements of Changes in Net Assets, notes to financial
statements for Treasury Portfolio and Cash Portfolio, series
of Core Trust (Delaware), for the year ended August 31, 1997,
both of which were filed as part of the Funds' annual report
to shareholders with the Securities and Exchange Commission on
November 12, 1997, accession number 0001004402-97-000179
pursuant to Rule 30b2-1 under the Investment Company Act of
1940, as amended.

(B) EXHIBITS.

NOTE: * Indicates that the exhibit is incorporated herein by reference. All
references to a Post-Effective Amendment ("PEA") or Pre-Effective Amendment
("PreEA") are to PEAs and PreEAs to Registrant's Registration Statement on Form
N-1A, File No. 2-67052.

(1)* Trust Instrument of Registrant dated August 29, 1995 (filed as
Exhibit (1) to PEA No. 34 via EDGAR on May 9, 1996, accession
number 0000912057-96-008780).
(2)* By-Laws of Registrant (filed as Exhibit (2) to PEA No. 43 via EDGAR on
July 31, 1997, accession number 0000912057-97-025707)
(3) None.
(4) Sections 2.04 and 2.06 of Registrant's Trust Instrument provide as
follows:

"Section 2.04 Transfer of Shares. Except as otherwise provided
by the Trustees, Shares shall be transferable on the records
of the Trust only by the record holder thereof or by his agent
thereunto duly authorized in writing, upon delivery to the
Trustees or the Trust's transfer agent of a duly executed
instrument of transfer and such evidence of the genuineness of
such execution and authorization and of such other matters as
may be required by the Trustees. Upon such delivery the
transfer shall be recorded on the register of the Trust. Until
such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor the Trust, nor any transfer agent or
registrar nor any officer, employee or agent of the Trust
shall be affected by any notice of the proposed transfer.

"Section 2.06 Establishment of Series. The Trust created
hereby shall consist of one or more Series and separate and
distinct records shall be maintained by the Trust for each
Series and the assets associated with any such Series shall be
held and accounted for separately from the assets of the Trust
or any other Series. The Trustees shall have full power and
authority, in their sole discretion, and without obtaining any
prior authorization or vote of the Shareholders of any Series
of the Trust, to establish and designate and to change in any
manner any such Series of Shares or any classes of initial or
additional Series and to fix such preferences, voting powers,

126
<PAGE>

rights and privileges of such Series or classes thereof as the
Trustees may from time to time determine, to divide or combine
the Shares or any Series or classes thereof into a greater or
lesser number, to classify or reclassify any issued Shares or
any Series or classes thereof into one or more Series or
classes of Shares, and to take such other action with respect
to the Shares as the Trustees may deem desirable. The
establishment and designation of any Series shall be effective
upon the adoption of a resolution by a majority of the
Trustees setting forth such establishment and designation and
the relative rights and preferences of the Shares of such
Series. A Series may issue any number of Shares and need not
issue shares. At any time that there are no Shares outstanding
of any particular Series previously established and
designated, the Trustees may by a majority vote abolish that
Series and the establishment and designation thereof.

"All references to Shares in this Trust Instrument shall be
deemed to be Shares of any or all Series, or classes thereof,
as the context may require. All provisions herein relating to
the Trust shall apply equally to each Series of the Trust, and
each class thereof, except as the context otherwise requires.

"Each Share of a Series of the Trust shall represent an equal
beneficial interest in the net assets of such Series. Each
holder of Shares of a Series shall be entitled to receive his
pro rata share of all distributions made with respect to such
Series. Upon redemption of his Shares, such Shareholder shall
be paid solely out of the funds and property of such Series of
the Trust."

(5) (a)* Form of Investment Advisory Agreement between Registrant and H.M.
Payson & Co. relating to the Payson Value Fund and the Payson
Balanced Fund (filed as Exhibit 5(b) to PEA No. 33 via EDGAR on
January 5, 1996, accession number 0000912057-96-000216).
(b)* Investment Advisory Agreement between Registrant and Quadra
Capital Partners, L.P. (filed as Exhibit (5)(c) to PEA No. 41 via
EDGAR on December 31, 1996, accession number
0000912057-96-030646).
(c)* Investment Subadvisory Agreement between Quadra Capital Partners,
L.P. and Anhalt/O'Connell, Inc. (filed as Exhibit (5)(d) to PEA
No. 41 via EDGAR on December 31, 1996, accession number
0000912057-96-030646).
(d)* Investment Subadvisory Agreement between Quadra Capital Partners,
L.P. and Carl Domino Associates, L.P. (filed as Exhibit (5)(e) to
PEA No. 41 via EDGAR on December 31, 1996, accession number
0000912057-96-030646).
(e)* Investment Subadvisory Agreement between Quadra Capital Partners,
L.P. and McDonald Investment Management, Inc. (filed as Exhibit
(5)(f) to PEA No. 41 via EDGAR on December 31, 1996, accession
number 0000912057-96-030646).
(f)* Investment Subadvisory Agreement between Quadra Capital Partners,
L.P. and LM Capital Management, Inc. (filed as Exhibit (5)(g) to
PEA No. 41 via EDGAR on December 31, 1996, accession number
0000912057-96-030646).
(g)* Investment Advisory Agreement between Registrant and Austin
Investment Management, Inc. (filed as Exhibit (5)(j) to PEA No.
43 via EDGAR on July 31, 1997, accession number
0000912057-97-025707).
(h)* Investment Advisory Agreement between Registrant and Oak Hall
Capital Advisors, Inc. (filed as Exhibit (5)(k) to PEA No. 43 via
EDGAR on July 31, 1997, accession number 0000912057-97-025707).
(i)* Investment Advisory Agreement between Norwest Bank Minnesota,
N.A. and Core Trust (Delaware) relating to Index Portfolio (filed
as Exhibit 5(a) to Amendment No. 5 the Registration Statement of
Core Trust (Delaware), File No. 811-8858, via EDGAR on September
30, 1996, accession number 0000912057-96-021568).
(j)* Investment Advisory Agreement between Schroder Capital Management
International, Inc. and Schroder Capital Funds, relating to
Schroder U.S. Smaller Companies Portfolio, International Equity
Fund and Schroder Emerging Markets Fund Institutional Portfolio
(filed as Exhibit 5 to Amendment No. 1 to the Registration
Statement of Schroder Capital Funds, File No. 811-9130, via EDGAR
on August 9, 1996, accesssion number 0000898432-96-000341.

127
<PAGE>

(k)* Form of Investment Advisory Agreement between Core Trust
(Delware) and Forum Investment Advisors, LLC relating to Treasury
Portfolio, Treasury Cash Portfolio, Cash Portfolio, Government
Cash Portfolio and Municipal Cash Portfolio (filed as Exhibit
5(n) to PEA No. 52 via EDGAR on November 24, 1997, accession
number 0001047469-97-005953).
(l)* Investment Advisory Agreement between Core Trust (Delaware) and
Schroder Capital Management International Inc. relating to
International Portfolio (filed as Exhibit 5(b) to Amendment No. 5
to the Registration Statement of Core Trust (Delaware), File No.
811-8858, via EDGAR on September 30, 1996, accession number
0000912057-96-021568).
(m)* Investment Advisory Agreement between Registrant and Forum
Investment Advisors, LLC (filed as Exhibit 5(p) to PEA 56 via
EDGAR on December 31, 1997, accession number
0001004402-97-000281).

(6) (a)* Form of Selected Dealer Agreement between Forum Financial
Services, Inc. and securities brokers (filed as Exhibit 6(c) to
PEA 21).
(b)* Form of Bank Affiliated Selected Dealer Agreement between Forum
Financial Services, Inc. and bank affiliates (filed as Exhibit
6(d) of PEA 21).
(c)* Distribution Agreement between Registrant and Forum Financial
Services, Inc. (filed as Exhibit 6(f) to PEA No. 43 via EDGAR on
July 31, 1997, accession number 0000912057-97-025707).
(7) None.

(8) (a)* Form of Transfer Agency Agreement between Registrant and Forum
Financial Corp. (filed as Exhibit 8(a) to PEA No. 33 via EDGAR on
January 5, 1996, accession number 0000912057-96-000216).
(b)* Form of Custodian Agreement between Registrant and The First
National Bank of Boston (filed as Exhibit 8(b) to PEA No. 33 via
EDGAR on January 5, 1996, accession number 0000912057-96-000216).
(9) (a)* Administration Agreement between Registrant and Forum
Administrative Services, LLC (filed as Exhibit 6(e) to PEA No. 43
via EDGAR on July 31, 1997, accession number
0000912057-97-025707).
(b)* Shareholder Service Plan of Registrant relating to Quadra Funds
and Form of Shareholder Service Agreement relating to Quadra
Funds (filed as Exhibit 9(b) to PEA No. 49 via EDGAR on November
5, 1997, accession number 0001004402-97-000163).
(c)* Form of Shareholder Service Plan of Registrant and Form of
Shareholder Service Agreement relating to the Daily Assets
Treasury Fund, Daily Assets Cash Fund, Daily Assets Government
Fund, Daily Assets Municipal Fund and Daily Assets Treasury
Obligations Fund (filed as Exhibit 9(c) to PEA No. 50 via EDGAR
on November 12, 1997, accession no. 0001004402-97-000189).
(10)*Opinion of Seward & Kissel dated January 5, 1996 (filed as Exhibit 10 of
PEA No. 33 via EDGAR on January 5, 1996, accession number
0000912057-96-000216).
(11) None.
(12) None.
(13)*Investment Representation letter of Reich & Tang, Inc. as original
purchaser of shares of Registrant (filed as Exhibit 13 to Registration
Statement).
(14)*Form of Disclosure Statement and Custodial Account Agreement applicable to
individual retirement accounts (filed as Exhibit 14 of PEA No. 21).
(15) (a)* Form of Rule 12b-1 Plan adopted by the Registrant (filed as
Exhibit 15 of PEA No. 16).
(b)* Rule 12b-1 Plan adopted by the Registrant with respect to the
Payson Value Fund and the Payson Balanced Fund (filed as Exhibit
8(c) of PEA No. 20).
(16) Schedule of Sample Performance Calculations (filed as Exhibit 16 to PEA No.
43 via EDGAR on July 31, 1997, accession number 0000912057-97-025707).
(17) Financial Data Schedules (filed herewith).
(18)

Other Exhibits*:

128
<PAGE>

Powers of Attorney (filed as Exhibit 99 to PEA No. 34 via EDGAR on May
9, 1996, accession number 0000912057-96-008780).

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF DECEMBER 31, 1997

TITLE OF CLASS NUMBER OF HOLDERS
-------------- -----------------

Investors High Grade Bond Fund 0
Investors Bond Fund 55
TaxSaver Bond Fund 40
Maine Municipal Bond Fund 391
New Hampshire Bond Fund 81

Daily Assets Treasury Obligations Fund 2
Daily Assets Government Fund 96
Daily Assets Government Obligations Fund 2
Daily Assets Cash Fund 22
Daily Assets Municipal Fund 3

Payson Value Fund 326
Payson Balanced Fund 378

Austin Global Equity Fund 13
Oak Hall Small Cap Contrarian Fund 186

Quadra Limited Maturity Treasury Fund 3
Quadra Value Equity Fund 14
Quadra Growth Fund 7
Quadra International Equity Fund 8
Quadra Opportunistic Bond Fund 6

Equity Index Fund 2
Investors Equity Fund 2
Investors Growth Fund 2
Small Company Opportunities Fund 0
International Equity Fund 1
Emerging Markets Fund 1

ITEM 27. INDEMNIFICATION.

In accordance with Section 3803 of the Delaware Business Trust Act, Section 5.2
of Registrant's Trust Instrument provides as follows:

"5.2. INDEMNIFICATION.

"(a) Subject to the exceptions and limitations contained in Section
(b) below:

"(i) Every Person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by
law against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action,

129
<PAGE>

suit or proceeding in which he becomes involved as a party or
otherwise by virtue of being or having been a Trustee or
officer and against amounts paid or incurred by him in the
settlement thereof;

"(ii) The words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or
threatened while in office or thereafter, and the words
"liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.

"(b) No indemnification shall be provided hereunder to a Covered
Person:

"(i) Who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust
or its Holders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved
in the conduct of the Covered Person's office or (B) not to
have acted in good faith in the reasonable belief that Covered
Person's action was in the best interest of the Trust; or

"(ii) In the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the
Trustee's or officer's office,

"(A) By the court or other body approving the
settlement;

"(B) By at least a majority of those Trustees who are
neither Interested Persons of the Trust nor are
parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type
inquiry); or

"(C) By written opinion of independent legal counsel
based upon a review of readily available facts (as
opposed to a full trial-type inquiry);

provided, however, that any Holder may, by appropriate legal
proceedings, challenge any such determination by the Trustees or by independent
counsel.

"(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be a Covered Person and shall inure to the benefit of
the heirs, executors and administrators of such a person. Nothing
contained herein shall affect any rights to indemnification to which
Trust personnel, other than Covered Persons, and other persons may be
entitled by contract or otherwise under law.

"(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character
described in paragraph (a) of this Section 5.2 may be paid by the Trust
or Series from time to time prior to final disposition thereof upon
receipt of an undertaking by or on behalf of such Covered Person that
such amount will be paid over by him to the Trust or Series if it is
ultimately determined that he is not entitled to indemnification under
this Section 5.2; provided, however, that either (a) such Covered
Person shall have provided appropriate security for such undertaking,
(b) the Trust is insured against losses arising out of any such advance
payments or (c) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or
independent legal counsel in a written opinion, shall have determined,
based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to
believe that such Covered Person will be found entitled to
indemnification under this Section 5.2.

"(e) Conditional advancing of indemnification monies under this Section
5.2 for actions based upon the 1940 Act may be made only on the
following conditions: (i) the advances must be limited to amounts used,

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or to be used, for the preparation or presentation of a defense to the
action, including costs connected with the preparation of a settlement;
(ii) advances may be made only upon receipt of a written promise by, or
on behalf of, the recipient to repay that amount of the advance which
exceeds that amount which it is ultimately determined that he is
entitled to receive from the Trust by reason of indemnification; and
(iii) (a) such promise must be secured by a surety bond, other suitable
insurance or an equivalent form of security which assures that any
repayments may be obtained by the Trust without delay or litigation,
which bond, insurance or other form of security must be provided by the
recipient of the advance, or (b) a majority of a quorum of the Trust's
disinterested, non-party Trustees, or an independent legal counsel in a
written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be
found entitled to indemnification.

"(f) In case any Holder or former Holder of any Series shall be held to
be personally liable solely by reason of the Holder or former Holder
being or having been a Holder of that Series and not because of the
Holder or former Holder acts or omissions or for some other reason, the
Holder or former Holder (or the Holder or former Holder's heirs,
executors, administrators or other legal representatives, or, in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all
loss and expense arising from such liability. The Trust, on behalf of
the affected Series, shall, upon request by the Holder, assume the
defense of any claim made against the Holder for any act or obligation
of the Series and satisfy any judgment thereon from the assets of the
Series."

Paragraph 4 of each Investment Advisory Agreement provides in substance as
follows:

"4. We shall expect of you, and you will give us the benefit of, your
best judgment and efforts in rendering these services to us, and we
agree as an inducement to your undertaking these services that you
shall not be liable hereunder for any mistake of judgment or in any
event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, you against
any liability to us or and to our security holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties
hereunder."

Paragraphs 3(f) and (g) and paragraph 5 of the Management and Distribution
Agreement provide as follows:

"(f) We agree to indemnify, defend and hold you, your several officers
and directors, and any person who controls you within the meaning of
Section 15 of the Securities Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which you, your
officers and directors or any such controlling person may incur, under
the Securities Act, or under common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in
our Registration Statement or Prospectus in effect from time to time
under the Securities Act or arising out of or based upon any alleged
omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not
misleading; provided, however, that in no event shall anything
contained in this paragraph 3(f) be so construed as to protect you
against any liability to us or our security holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of your duties, or by reason of
your reckless disregard of your obligations and duties under this
paragraph. Our agreement to indemnify you, your officers and directors
and any such controlling person as aforesaid is expressly conditioned
upon our being notified of any action brought against you, your
officers and directors or any such controlling person, such
notification to be given by letter or by telegram addressed to us at
our principal office in New York, New York, and sent to us by the
person against whom such action is brought within ten days after the
summons or other first legal process shall have been served. The
failure so to notify us of any such action shall not relieve us from
any liability which we may have to the person against whom such action
is brought by reason of any such alleged untrue statement or omission
otherwise than on account of our indemnity agreement contained in this
paragraph 3(f). We will be entitled to assume the defense of any suit

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<PAGE>

brought to enforce any such claim, and to retain counsel of good
standing chosen by us and approved by you. In the event we do elect to
assume the defense of any such suit and retain counsel of good standing
approved by you, the defendant or defendants in such suit shall bear
the fees and expenses of any additional counsel retained by any of
them; but in case we do not elect to assume the defense of any such
suit, or in case you do not approve of counsel chosen by us, we will
reimburse you or the controlling person or persons named as defendant
or defendants in such suit, for the fees and expenses of any counsel
retained by you or them. Our indemnification agreement contained in
this paragraph 3(f) and our representations and warranties in this
agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of you, your
officers and directors or any controlling person and shall survive the
sale of any shares of our common stock made pursuant to subscriptions
obtained by you. This agreement of indemnity will inure exclusively to
your benefit, to the benefit of your successors and assigns, and to the
benefit of your officers and directors and any controlling persons and
their successors and assigns. We agree promptly to notify you of the
commencement of any litigation or proceeding against us in connection
with the issue and sale of any shares of our common stock.

"(g) You agree to indemnify, defend and hold us, our several officers
and directors, and person who controls us within the meaning of Section
15 of the Securities Act, free and harmless from and against any and
all claims, demands, liabilities, and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which we, our
officers or directors, or any such controlling person may incur under
the Act or under common law or otherwise, but only to the extent that
such liability, or expense incurred by us, our officers or directors or
such controlling person resulting from such claims or demands shall
arise out of or be based upon any alleged untrue statement of a
material fact contained in information furnished in writing by you in
your capacity as distributor to us for use in our Registration
Statement or Prospectus in effect from time to time under the Act, or
shall arise out of or be based upon any alleged omission to state a
material fact in connection with such information required to be stated
in the Registration Statement or Prospectus or necessary to make such
information not misleading. Your agreement to indemnify us, our
officers and directors, and any such controlling person as aforesaid is
expressly conditioned upon your being notified of any action brought
against us, our officers or directors or any such controlling person,
such notification to be given by letter or telegram addressed to you at
your principal office in New York, New York, and sent to you by the
person against whom such action is brought, within ten days after the
summons or other first legal process shall have been served. You shall
have a right to control the defense of such action, with counsel of
your own choosing, satisfactory to us, if such action is based solely
upon such alleged misstatement or omission on your part, and in any
other event you and we, our officers or directors or such controlling
person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify
you of any such action shall not relieve you from any liability which
you may have to us, to our officers or directors, or to such
controlling person by reason of any such untrue statement or omission
on your part otherwise than on account of your indemnity agreement
contained in this paragraph 3(g).

"5 We shall expect of you, and you will give us the benefit of, your
best judgment and efforts in rendering these services to us, and we
agree as an inducement to your undertaking these services that you
shall not be liable hereunder for any mistake of judgment or in any
event whatsoever, except for lack of good faith, provided that nothing
herein shall be deemed to protect, or purport to protect, you against
any liability to us or to our security holders to which you would
otherwise be subject by reason or willful misfeasance, bad faith or
gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties
hereunder."

Section 9(a) of the Distribution Services Agreement provides:

"The Company agrees to indemnify, defend and hold the Underwriter, and
any person who controls the Underwriter within the meaning of Section
15 of the Securities Act, free and harmless from and against any and
all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Underwriter or

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<PAGE>

any such controlling person may incur, under the Securities Act or
under common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in the Company's
Registration Statement or the Prospectus or Statement of Additional
Information in effect from time to time under the Securities Act and
relating to the Fund or arising out of or based upon any alleged
omission to state a material fact required to be stated in any thereof
or necessary to make the statements in any thereof not misleading;
provided, however, that in no event shall anything herein contained be
so construed as to protect the Underwriter against any liability to the
Company or its security holders to which the Underwriter would
otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of the
Underwriter's reckless disregard of its obligations and duties under
this agreement. The Company's agreement to indemnify the Underwriter
and any controlling person as aforesaid is expressly conditioned upon
the Company's being notified of the commencement of any action brought
against the Underwriter or any such controlling person, such
notification to be given by letter or by telegram addressed to the
Company at its principal office in New York, New York, and sent to the
Company by the person against whom such action is brought within ten
days after the summons or other first legal process shall have been
served. The Company will be entitled to assume the defense of any suit
brought to enforce any such claim, and to retain counsel of good
standing chosen by the Company and approved by the Underwriter. In the
event the Company elects to assume the defense of any such suit and
retain counsel of good standing approved by the Underwriter, the
defendants in the suit shall bear the fees and expenses of any
additional counsel retained by any of them; but in case the Company
does not elect to assume the defense of the suit or in case the
Underwriter does not approve of counsel chosen by the Company, the
Company will reimburse the Underwriter or the controlling person or
persons named defendant or defendants in the suit for the fees and
expenses of any counsel retained by the Underwriter or such person. The
indemnification agreement contained in this Section 9 shall remain
operative and in full force and effect regardless of any investigation
made by or on behalf of the Underwriter or any controlling person and
shall survive the sale of the Fund's shares made pursuant to
subscriptions obtained by the Underwriter. This agreement of indemnity
will inure exclusively to the benefit of the Underwriter, to the
benefit of its successors and assigns, and to the benefit of any
controlling persons and their successors and assigns. The Company
agrees promptly to notify the Underwriter of the Underwriter of the
commencement of any litigation or proceeding against the Company in
connection with the issue and sale of any of shares of the Fund. The
failure to do so notify the Company of the commencement of any such
action shall not relieve the Company from any liability which it may
have to the person against whom the action is brought by reason of any
alleged untrue statement or omission otherwise than on account of the
indemnity agreement contained in this Section 9."

In so far as indemnification for liabilities arising under the Securities Act of
1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
the Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS.

Forum Investment Advisors, LLC

The description of Forum Investment Advisors, LLC (investment adviser
to each of Daily Assets Treasury Obligations Fund, Daily Assets
Government Fund, Daily Assets Government Obligations Fund, Daily Assets
Cash Fund, Daily Assets Municipal Fund, Investors High Grade Bond Fund,
Investors Bond Fund, TaxSaver Bond Fund, Maine Municipal Bond Fund, New
Hampshire Bond Fund and Investors Growth Fund) in the Prospectuses and

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Statements of Additional Information, constituting certain of Parts A
and B, respectively, of this Registration Statement, are incorporated
by reference herein.

The following are the members of Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101, including their business
connections which are of a substantial nature.

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Forum Holdings Corp. I, Member.
Forum Trust, LLC., Member.

Both Forum Holdings Corp. and Forum Financial Group, LLC are
controlled by John Y. Keffer, Chairman and President of the
Registrant. Mr. Keffer is President of Forum Financial Group, LLC. Mr.
Keffer is also a director and/or officer of various registered
investment companies for which the various Forum Financial Group of
Companies provides services.

The following are the officers of Forum Investment Advisors, LLC,
including their business connections which are of a substantial
nature. Each officer may serve as an officer of various registered
investment companies for which the Forum Financial Group of Companies
provides services.

William J. Lewis, Director.

Director of Forum Investment Advisors, LLC.

Sara M. Morris, Treasurer.

Chief Financial Officer, Forum Financial Group, LLC. Ms. Morris
serves as an officer of several other Forum affiliated companies.

David I. Goldstein, Secretary.

General Counsel, Forum Financial Group, LLC. Mr. Goldstein serves
as an officer of several other Forum affiliated companies.

Dana A. Lukens, Assistant Secretary.

Corporate Counsel, Forum Financial Group, LLC. Mr. Lukens also
serves as an officer of several other Forum affiliated companies.

Margaret J. Fenderson, Assistant Treasurer.

Corporate Accounting Manager, Forum Financial Group, LLC. Ms.
Fenderson also serves as an officer of several other Forum
affiliated companies.

H.M. Payson & Co.

The description of H.M. Payson & Co. in the Prospectuses and
Statements of Additional Information, with respect to the Payson Value
Fund, Payson Balanced Fund and investors Equity Fund, constituting
certain of Parts A and B, respectively, of this Registration
Statement, are incorporated by reference herein.

The following are the directors and principal executive officers of
H.M. Payson & Co., including their business connections which are of a
substantial nature. The address of H.M. Payson & Co. is One Portland
Square, Portland, Maine 04101.

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<PAGE>

Adrian L. Asherman, Managing Director.

Portfolio Manager of H.M. Payson & Co. since 1955, General
Partner from 1964 to 1987 and Managing Director since 1987. His
address is One Portland Square, Portland, Maine 04101.

John C. Downing, Managing Director and Treasurer.

Portfolio Manger of H.M. Payson since 1983 and Managing Director
since 1992. Mr. Downing has been associated with H.M. Payson
since 1983. His address is One Portland Square, Portland, Maine
04101.

William A. Macleod, Managing Director.

Portfolio Manager of H.M. Payson & Co. since 1984 and Managing
Director since 1989. His address is One Portland Square,
Portland, Maine 04101.

Thomas M. Pierce, Managing Director.

Portfolio Manager of H.M. Payson & Co. since 1975, General
Partner from 1981 to 1987 and Managing Director since 1987. His
address is One Portland Square, Portland, Maine 04101.

Peter E. Robbins, Managing Director.

Portfolio Manager of H.M. Payson & Co. since 1992, except for the
period from January 1988 to October 1990. During that period, Mr.
Robbins was president of Mariner Capital Group, a real estate
development and non-financial asset management business. General
Partner of H.M. Payson & Co. from 1986 to 1987, and Managing
Director from 1987 to 1988, and since 1993.

John H. Walker, Managing Director and President.

Portfolio Manager of H.M. Payson & Co. since 1967, General
Partner from 1974 to 1987, and Managing Director since 1987. Mr.
Walker is also a Director of York Holding Company and York
Insurance Company. His address is One Portland Square, Portland,
Maine 04101.

Teresa M. Esposito, Managing Director.

Managing Director of H.M. Payson & Co. since 1995. Her address is
One Portland Square, Portland, Maine 04101.

John C. Knox, Managing Director.

Managing Director of H.M. Payson & Co. since 1995. His address is
One Portland Square, Portland, Maine 04101.

Harold J. Dixon, Managing Director and Secretary.

Managing Director of H.M. Payson & Co. since 1995. His address is
One Portland Square, Portland, Maine 04101.

Laura McDill, Managing Director.

Managing Director of H.M. Payson & Co. since 1995. Her address is
One Portland Square, Portland, Maine 04101.

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<PAGE>

Austin Investment Management, Inc.

The description of Austin Investment Management, Inc. in the Prospectus
and Statement of Additional Information with respect to the Austin
Global Equity Fund, constituting certain of Parts A and B,
respectively, of this Registration Statement, are incorporated by
reference herein.

The following is the director and principal executive officer of Austin
Investment Management, Inc. 375 Park Avenue, New York, New York 10152,
including his business connections which are of a substantial nature.

Peter Vlachos, Director, President Treasurer and Secretary

[Oak Hall Capital Advisors, LLP

The description of Oak Hall Capital Advisors, LLP in the Prospectus and
Statement of Additional Information with respect to Oak Hall Small Cap
Contrarian Fund, constituting part of Parts A and B, respectively, of
this Registration Statement are incorporated by reference herein.

The following are the directors and principal executive officers of,
Oak Hall Capital Advisors, Inc. 122 East 42nd Street, New York, New
York 10168, including their business connections which are of a
substantial nature.

Alexander G. Anagnos, Director and Portfolio Manager.

Consultant to American Services Corporation and Financial Advisor
to WR Family Associates.

Lewis G. Cole, Director.

Partner, the Law Firm of Strook, Strook & Lavan.

John J. Hock, Executive Vice President.

Charles D. Klein, Portfolio Manager.

Director, American Securities Corporation and Financial Advisor
to WR Family Associates.

David P. Steinmann, Executive Vice President, Secretary and Treasurer.

Administrator WR Family Associates and Secretary and Treasurer of
American Securities Corporation.]

Carl Domino Associates, L.P.

The description of Carl Domino Associates, L.P. in the Prospectus and
Statement of Additional Information with respect to the Quadra Value
Equity Fund, constituting certain of Parts A and B, respectively, of
this Registration Statement, are incorporated by reference herein.

The following are the directors and principal executive officers of,
Carl Domino Associates, L.P., 580 Village Blvd., West Palm Beach, FL
33409 including their business connections which are of a substantial
nature.

Carl J. Domino, Managing Partner & Portfolio Manager.

Paul Scoville, Jr., Senior Portfolio Manager.

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<PAGE>

Ann Fritts Syring, Senior Portfolio Manager.

John Wagstaff-Callahan, Senior Portfolio Manager.

Prior to joining Carl Domino Associates, L.P., Mr.
Wagstaff-Callahan was a Trustee with Batterymarch Financial
Management, Boston, Massachusetts.

Stephen Krider Kent, Jr., Senior Portfolio Manager.

Prior to joining Carl Domino Associates, L.P., Mr. Kent was a
Senior Portfolio Manager with Gamble, Jones Holbrook & Bent,
Carlsbad, California.

Anhalt/O'Connell, Inc.

The description of Anhalt/O'Connell, Inc. in the Prospectus and
Statement of Additional Information with respect to the Quadra Limited
Maturity Treasury Fund, constituting certain of Parts A and B,
respectively, of this Registration Statement, are incorporated by
reference herein.

The following are the directors and principal executive officers of,
Anhalt/O'Connell, Inc., 345 South Figueroa Street, Suite 303, Los
Angeles, CA, including their business connections which are of a
substantial nature.

Paul Edward Anhalt, Managing Director and Chairman.

Mr. Anhalt is also a partner of Anhalt/O'Connell, a partnership,
and was formerly Managing Director and Consulting Economist of
Trust Company of the West.

Michael Frederick O'Connell, Managing Director

Mr. O'Connell is also a partner of Anhalt/O'Connell, a
partnership, and was formerly Managing Director of Trust
Company of the West and Vice President of Institutional
Research Services, Inc., a registered broker-dealer.

LM Capital Management, Inc.

The description of LM Capital Management, Inc. in the Prospectus and
Statement of Additional Information with respect to the Quadra
Opportunistic Bond Fund, constituting certain of Parts A and B,
respectively, of this Registration Statement, are incorporated by
reference herein.

The following are the directors and principal executive officers of, LM
Capital Management, Inc., including their business connections which
are of a substantial nature.

Luis Malzel, Managing Director.

John Chalker, Managing Director

McDonald Investment Management, Inc.

The description of McDonald Investment Management, Inc. in the
Prospectus and Statement of Additional Information with respect to the
Quadra International Equity Fund, constituting certain of Parts A and
B, respectively, of this Registration Statement, are incorporated by
reference herein.

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<PAGE>

The following are the directors and principal executive officers of
McDonald Investment Management, Inc., including their business
connections which are of a substantial nature.

John McDonald, President and Chief Investment Officer.

Ron Belcot, Vice President - Research and Trading.

Bill Hallman, Vice President.

Ray DiBernardo, Vice President., Managing Director

Mr. DiBernardo was formerly a portfolio manager with Royal Trust.

Smith Asset Management Group, L.P.

The description of Smith Asset Management Group, L.P. in the Prospectus
and Statement of Additional Information with respect to the Quadra
Growth Fund, constituting certain of Parts A and B, respectively, of
this Registration Statement, are incorporated by reference herein.

The following are the directors and principal executive officers of
Smith Asset Management Group, L.P., including their business
connections which are of a substantial nature.

Mr. Stephen Smith, Chief Investment Officer

Norwest Investment Management, Inc.

The description of Norwest Investment Management, Inc. ("NIM") in the
Prospectus and Statement of Additional Information for Equity Index
Fund, constituting certain of Parts A and B, respectively, of this
Registration Statement, are incorporated by reference herein.

The following are the directors and principal executive officers of
NIM, including their business connections which are of a substantial
nature. The address of Norwest Corporation, the parent of Norwest Bank
Minnesota, N.A. ("Norwest Bank"), which is the parent of NIM, is
Norwest Center, Sixth Street and Marquette Avenue, Minneapolis, MN
55479. Unless otherwise indicated below, the principal business address
of any company with which the directors and principal executive
officers are connected is also Sixth Street and Marquette Avenue,
Minneapolis, MN 55479.

P. Jay Kiedrowski, Chairman, Chief Executive Officer and President, has
been affiliated with NIM since 1989. Mr. Kiedrowski is also Executive
Vice President of Norwest Bank Minnesota, N.A., and has served in
various capacities as an employee of Norwest Bank Minnesota, N.A.
and/or its affiliates since August, 1987.

James W. Paulsen, Chief Investment Officer, has served in this capacity
since January, 1997.

Stephen P. Gianoli, Senior Vice President and Chief Executive Officer
has been affiliated with NIM in various capacities since 1986.

David S. Lunt, Vice President and Senior Portfolio Manager has been
affiliated with NIM since 1997.

Richard C. Villars, Vice President and Senior Portfolio Manager has
been affiliated with NIM since 1997.

Lee K. Chase, Vice President, has been affiliated with NIM since 1997.

Andrew Owen, Vice President, has been affiliated with NIM since 1997.

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<PAGE>

Eileen A. Kuhry, Investment Compliance Specialist, has been affiliated
with NIM since 2997.

Schroder Capital Management International Inc.

The description of Schroder Capital Management International Inc.
("Schroder") in the Prospectus Statement of Additional Information
relating to International Equity Fund and Emerging Markets Fund,
constituting certain of Parts A and B, respectively, of this
Registration Statement, are incorporated by reference herein.

The following are the directors and principal officers of Schroder,
including their business connections of a substantial nature. The
address of each company listed, unless otherwise noted, is 33 Gutter
Lane, London EC2V 8AS, United Kingdom. Schroder Capital Management
International Limited ("Schroder Ltd.") is a United Kingdom affiliate
of Schroder which provides investment management services international
clients located principally in the United States.

David M. Salisbury. Chief Executive Officer, Director and Chairman of
SCMI; Joint Chief Executive and Director of Schroder Ltd.

Richard R. Foulkes. Deputy Chairman/Executive Vice President of SCMI.
Mr. Foulkes is also a Director of Schroder Ltd.

John A. Troiano. Chief Executive and Director of SCMI. Mr. Troiano is
also a Director of Schroder Ltd.

David Gibson. Senior Vice President and Director of SCMI. Director of
Schroder Capital Management and Senior Vice President of Schroder Ltd.

John S. Ager. Senior Vice President and Director of SCMI. Mr. Ager is
also a Director of Schroder Ltd.

Sharon L. Haugh. Executive Vice President and Director of SCMI,
Director and Chairman of Schroder Advisors Inc., and Director of
Schroder Ltd.

Gavin D.L. Ralston. Senior Vice President and Managing Director of
SCMI; Director of Schroder Ltd.

Mark J. Smith. Senior Vice President and Director of SCMI. Mr. Smith
is also Director of Schroder Ltd.

Robert G. Davy. Senior Vice President. Mr. Davy is also a Director of
Schroder Ltd. and an officer of open end investment companies for
which SCMI and/or its affiliates provide investment services.

Jane P. Lucas. Senior Vice President and Director of SCMI; Director of
Schroder Advisors Inc.; Director of Schroder Capital Management.

C. John Govett. Director of SCMI; Group Managing Director of Schroder
Ltd. And Director of Schroders plc.

Phillipa J. Gould. Senior Vice President and Director of SCMI.

Louise Croset. First Vice President and Director of SCMI, also First
Vice President of Schroder Ltd.

Abdallah Nauphal, Group Vice President and Director of SCMI.

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ITEM 29. PRINCIPAL UNDERWRITER.

(a) Forum Financial Services, Inc., Registrant's underwriter, serves as
underwriter for the following investment companies registered under the
investment Company Act of 1940, as amended.:
<TABLE>
<S> <C>
The CRM Funds BT Alex. Brown Cash Reserve Fund, Inc.
The Cutler Trust Flag Investors Telephone Income Fund, Inc.
Forum Funds Flag Investors International Fund, Inc.
The Highland Family of Funds Flag Investors Emerging Growth Fund, Inc.
Norwest Advantage Funds Total Return U.S. Treasury Fund, Inc.
Norwest Select Funds Managed Municipal Fund, Inc.
Monarch Funds Flag Investors Value Builder Fund, Inc.
Sound Shore Fund, Inc. Flag Investors Real Estate Securities Fund, Inc.
Memorial Funds Flag Investors Equity Partners Fund, Inc.
Flag Investors Maryland Intermediate Tax-Free
Income Fund, Inc.
Flag Investors Short-Intermediate Income Fund, Inc.
The Glenmede Portfolios
The Glenmede Fund, Inc.
</TABLE>

(b) The following directors and officers of Forum Financial Services, Inc.,
Registrant's underwriter, hold the following positions with registrant.
Their business address is Two Portland Square, Portland, Maine 04101.
<TABLE>
<S> <C> <C>
Name Position with Underwriter Position with Registrant
---- ------------------------- ------------------------
John Y. Keffer President Chairman and President
David I. Goldstein Secretary Vice President
Sara M. Morris Treasurer Treasurer
</TABLE>

ITEM 30. LOCATION OF BOOKS AND RECORDS.

The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules
thereunder are maintained at the offices of Forum Administrative Services, LLC
and Forum Financial Corp., Two Portland Square, Portland, Maine 04101. The
records required to be maintained under Rule 31a-1(b)(1) with respect to
journals of receipts and deliveries of securities and receipts and disbursements
of cash are maintained at the offices of the Registrant's custodian, The First
National Bank of Boston, 100 Federal Street, Boston, Massachusetts 02106. The
records required to be maintained under Rule 31a-1(b)(5), (6) and (9) are
maintained at the offices of the Registrant's adviser or subadviser, as listed
in Item 28 hereof.

ITEM 31. MANAGEMENT SERVICES.

Not Applicable.

ITEM 32. UNDERTAKINGS.

(i) With respect to each series of Registrant, Registrant undertakes to
file a post-effective amendment, using financial statements which need
not be certified, within four to six months from the latter of (i) the
effective date of Registrant's Registration Statement under the
Securities Act of 1933 relating to the series or (ii) the commencement
of the public offering of shares of the series; and

141
<PAGE>

(i) Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to
shareholders relating to the portfolio or class thereof to which the
prospectus relates upon request and without charge.

142
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(a) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Portland, and State of Maine on the 18th day of
March, 1998.

FORUM FUNDS

By: /s/ John Y. Keffer
--------------------------
John Y. Keffer, President

Pursuant to the requirements of the Securities Act of 1933, this amendment to
the Registrant's Registration Statement has been signed below by the following
persons on the 18th day of March, 1998.

SIGNATURES TITLE

(a) Principal Executive Officer

/s/ John Y. Keffer President
---------------------------- and Chairman
John Y. Keffer

(b) Principal Financial and Accounting Officer

/s/ Sara M. Morris Treasurer
-------------------------------
Sara M. Morris

/s/ John Y. Keffer Trustee
-------------------------------
John Y. Keffer

James C. Cheng* Trustee
J. Michael Parish* Trustee
Costas Azariadis* Trustee

By: /s/ John Y. Keffer
-------------------------------
John Y. Keffer
Attorney in Fact*

143
<PAGE>

SIGNATURES

On behalf of Core Trust (Delaware), being duly authorized, I have duly caused
this amendment to the Registration Statement of Forum Funds to be signed in the
City of Portland, State of Maine on the 18th day of March, 1998.

CORE TRUST (DELAWARE)

By: /s/ John Y. Keffer
--------------------------
John Y. Keffer, President

This amendment to the Registration Statement of Forum Funds has been signed
below by the following persons in the capacities indicated on the 18th day of
March, 1998.

SIGNATURES TITLE

(a) Principal Executive Officer

/s/ John Y. Keffer Chairman
-------------------------- and President
John Y. Keffer

(b) Principal Financial and Accounting Officer

/s/ Sara M. Morris Treasurer
--------------------------
Sara M. Morris

/s/ John Y. Keffer Trustee
--------------------------
John Y. Keffer

Costas Azariadis* Trustee
J. Michael Parish* Trustee
James C. Cheng* Trustee

By: /s/ John Y. Keffer
----------------------------
John Y. Keffer
Attorney in Fact*

144
<PAGE>

INDEX TO EXHIBITS

Sequential
Exhibit Page Number
- ------- -----------

(17) Financial Date Schedules for Daily Assets Cash
Fund and Daily Assets Treasury Fund

145

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORUM
FUNDS, INC. ANNUAL REPORT DATED AUGUST 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH REPORT.
</LEGEND>
<CIK> 0000315774
<NAME> FORUM FUNDS, INC.
<SERIES>
<NUMBER> 019
<NAME> DAILY ASSETS CASH FUND

<S> <C>
<PERIOD-TYPE> 11-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> OCT-01-1997
<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 12,129,179
<INVESTMENTS-AT-VALUE> 12,129,179
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,129,179
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 53,105
<TOTAL-LIABILITIES> 53,105
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,076,074
<SHARES-COMMON-STOCK> 12,076,074
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 12,076,074
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 415,538
<OTHER-INCOME> (11,052)
<EXPENSES-NET> 27,472
<NET-INVESTMENT-INCOME> 377,014
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 377,014
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 377,014
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 32,622,774
<NUMBER-OF-SHARES-REDEEMED> 20,559,091
<SHARES-REINVESTED> 12,391
<NET-CHANGE-IN-ASSETS> 12,076,074
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 79,507
<AVERAGE-NET-ASSETS> 8,120,355
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .52
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> AUG-01-1997
<INVESTMENTS-AT-COST> 44,321,412
<INVESTMENTS-AT-VALUE> 44,321,412
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 44,321,412
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 205,621
<TOTAL-LIABILITIES> 205,621
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 44,094,527
<SHARES-COMMON-STOCK> 44,094,527
<SHARES-COMMON-PRIOR> 43,969,021
<ACCUMULATED-NII-CURRENT> 19,454
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,810
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 44,115,791
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 952,989
<OTHER-INCOME> (27,195)
<EXPENSES-NET> 63,430
<NET-INVESTMENT-INCOME> 862,364
<REALIZED-GAINS-CURRENT> 15,133
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 877,497
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 862,364
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 35,543,377
<NUMBER-OF-SHARES-REDEEMED> 35,486,607
<SHARES-REINVESTED> 68,736
<NET-CHANGE-IN-ASSETS> 140,639
<ACCUMULATED-NII-PRIOR> 19,454
<ACCUMULATED-GAINS-PRIOR> (13,323)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 107,484
<AVERAGE-NET-ASSETS> 43,234,196
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .02
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>