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Previous: FIDELITY ADVISOR SERIES VII, 497, 1998-12-01 |
Next: CARNEGIE GOVERNMENT SECURITIES TRUST, 497J, 1998-12-01 |
------
THE QUADRA FUNDS
------
QUADRA GROWTH FUND
SEMI-ANNUAL REPORT
(Unaudited)
09.30.98
<PAGE>
Table of Contents
Schedule of Investments:
QUADRA Growth Fund .....................................................2
Statement of Assets and Liabilities.........................................5
Statement of Operations.....................................................6
Statement of Changes in Net Assets..........................................7
Financial Highlights........................................................8
Notes to Financial Statements...............................................9
<PAGE>
- --------------------------------------------------------------------------------
QUADRA GROWTH FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SHARES SECURITY DESCRIPTION VALUE
- -------------------- ----------------------------------------------------------------------- --------------------
COMMON STOCK (82.3%)
APPAREL & ACCESSORY STORES (4.0%)
3,500 Ross Stores, Inc. $ 100,188
6,800 TJX Cos., Inc. 121,125
--------------------
221,313
--------------------
APPAREL & OTHER FINISHED PRODUCT MADE FROM FABRICS & SIMILAR MATERIALS (1.9%)
2,600 Tommy Hilfiger Corp. (a) 106,600
--------------------
BUILDING & CONSTRUCTION PRODUCTS (2.0%)
9,630 Johns Manville Corp. 109,541
--------------------
BUSINESS SERVICES (6.7%)
2,100 BMC Software, Inc. (a) 126,131
4,900 Cadence Design Systems (a) 125,256
2,800 Robert Half International (a) 120,926
--------------------
--------------------
372,313
--------------------
CHEMICALS & ALLIED PRODUCTS (4.0%)
1,550 Amgen, Inc. (a) 117,121
4,600 Solutia, Inc. 103,787
--------------------
--------------------
220,908
--------------------
COMMUNICATIONS (4.3%)
2,000 AT&T Corp. 116,876
1,600 BellSouth Corp. 120,400
--------------------
--------------------
237,276
--------------------
DEPOSITORY INSTITUTIONS (6.2%)
2,000 Comerica, Inc. 109,626
4,500 Dime Bancorp, Inc. 113,906
1,600 Fleet Financial Group 117,500
--------------------
--------------------
341,032
--------------------
EATING & DRINKING PLACES (2.2%)
7,500 Darden Restaurants, Inc. 120,000
--------------------
ELECTRIC, GAS & SANITARY SERVICES (2.3%)
2,800 DTE Energy Co. 126,525
--------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT (1.9%)
1,500 Lucent Technologies, Inc. 103,593
--------------------
</TABLE>
See Notes to Financial Statements. 2
<PAGE>
- --------------------------------------------------------------------------------
QUADRA GROWTH FUND
SCHEDULE OF INVESTMENTS (continued)
SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SHARES SECURITY DESCRIPTION VALUE
- -------------------- ----------------------------------------------------------------------- --------------------
FOOD & KINDRED PRODUCTS (2.2%)
2,050 Quaker Oats Co. $ 120,950
--------------------
FURNITURE & FIXTURES (1.7%)
4,700 Herman Miller, Inc. 92,825
--------------------
GENERAL MERCHANDISE STORES (2.1%)
3,200 Dayton Hudson Corp. 114,400
--------------------
HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION - CONTRACTORS (1.9%)
3,700 Halliburton Co. 105,681
--------------------
INDUSTRIAL & COMMERCIAL MACHINERY (10.4%)
1,900 EMC Corp. (a) 108,657
3,000 Ingersoll Rand Co. 113,813
1,730 Lexmark International Group, Inc. (a) 119,910
2,700 Sundstrand Corp. 125,213
4,900 Unisys Corp. (a) 111,475
--------------------
--------------------
579,068
--------------------
INSURANCE CARRIERS (3.8%)
2,330 Equitable Cos., Inc. 96,403
1,500 PacifiCare Health Systems, Inc. (a) 111,750
--------------------
--------------------
208,153
--------------------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS (2.1%)
1,500 Eastman Kodak Co. 115,968
--------------------
MISCELLANEOUS RETAIL (2.1%)
2,400 Costco Cos., Inc. (a) 113,700
--------------------
PETROLEUM REFINING & RELATED INDUSTRIES (4.2%)
2,400 Ashland, Inc. 111,000
1,700 Exxon Corp. 119,319
--------------------
--------------------
230,319
--------------------
PHARMACEUTICAL PREPARATIONS (6.4%)
4,100 Mylan Laboratories 120,950
1,100 Schering-Plough Corp. 113,918
2,360 Watson Pharmaceuticals, Inc. (a) 119,770
--------------------
--------------------
354,638
--------------------
</TABLE>
See Notes to Financial Statements. 3
<PAGE>
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QUADRA GROWTH FUND
SCHEDULE OF INVESTMENTS (concluded)
SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SHARES SECURITY DESCRIPTION VALUE
- -------------------- ----------------------------------------------------------------------- --------------------
PRINTING, PUBLISHING & ALLIED INDUSTRIES (2.0%)
2,100 Gannett Co., Inc. $ 112,481
--------------------
TRANSPORTATION BY AIR (2.0%)
1,700 UAL Corp. (a) 110,181
--------------------
TRANSPORTATION EQUIPMENT (3.9%)
2,200 General Dynamics Corp. 110,413
2,600 Paccar, Inc. 107,088
--------------------
--------------------
217,501
--------------------
WATER TRANSPORTATION (2.0%)
4,200 Royal Caribbean Cruises Ltd. 111,562
--------------------
TOTAL COMMON STOCK (COST $5,129,217) 4,546,528
--------------------
SHORT-TERM INVESTMENTS (17.7%)
979,631 The Collateralized Master Repurchase
Agreement Program, Collateralized by
U.S. Treasury Obligations
(cost $979,631) 979,631
--------------------
TOTAL INVESTMENTS (100.0%) (COST $6,108,848) $ 5,526,159
====================
</TABLE>
- --------------------
(a) Non-income producing security.
See Notes to Financial Statements. 4
<PAGE>
- --------------------------------------------------------------------------------
QUADRA GROWTH FUND
STATEMENT OF ASSETS & LIABILITIES
SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
QUADRA
GROWTH
FUND
---------------------
ASSETS:
Investments (Note 2):
Investments at cost $ 6,108,848
Net unrealized appreciation (depreciation) (582,689)
---------------------
Total investments at value 5,526,159
Interest, dividends and other receivables 6,892
Receivable for investments sold 369,753
Organization costs, net of amortization (Note 2) 24,550
---------------------
Total Assets 5,927,354
---------------------
LIABILITIES:
Payable for Shares Redeemed 352,864
Accrued expenses and other liabilities 921,617
---------------------
Total Liabilities 1,274,481
---------------------
NET ASSETS $ 4,652,873
=====================
COMPONENTS OF NET ASSETS:
Paid in capital $ 5,171,513
Undistributed net investment income 495
Unrealized appreciation (depreciation) on investments (582,689)
Accumulated net realized gain (loss) 63,554
---------------------
NET ASSETS $ 4,652,873
=====================
SHARES OF BENEFICIAL INTEREST: 458,697
=====================
NET ASSET VALUE (OFFERING AND REDEMPTION PRICE
PER SHARE): $ 10.14
=====================
</TABLE>
See Notes to Financial Statements. 5
<PAGE>
- --------------------------------------------------------------------------------
QUADRA GROWTH FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
QUADRA
GROWTH
FUND
---------------------
INVESTMENT INCOME:
Interest income $ 8,722
Dividend income 32,730
---------------------
Total Investment Income 41,452
---------------------
EXPENSES:
Advisory (Note 3) 31,619
Administration (Note 3) 20,000
Transfer agent (Note 3) 12,148
Custody 2,274
Accounting (Note 3) 19,000
Legal 4,123
Trustees 2,164
Registration 1,563
Amortization of organization costs (Note 2) 3,000
Miscellaneous 1,538
---------------------
Total Expenses 97,429
Expenses assumed and fees waived (Note 5) (65,773)
---------------------
Net Expenses 31,656
---------------------
NET INVESTMENT INCOME (LOSS) 9,796
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments sold 71,045
Net change in unrealized appreciation (depreciation)
on investments (844,244)
---------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (773,199)
---------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (763,403)
=====================
</TABLE>
See Notes to Financial Statements. 6
<PAGE>
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QUADRA GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIODS ENDED MARCH 31 AND SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
QUADRA
GROWTH
FUND
----------------
NET ASSETS - COMMENCEMENT OF OPERATIONS (Note 1) $ 10
- ------------------------------------------------ ----------------
OPERATIONS:
Net investment income (loss) 4,818
Net realized gain (loss) on investments sold (7,490)
Net change in unrealized appreciation (depreciation) on
investments 261,555
----------------
Net increase (decrease) in net assets resulting from operations 258,883
----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,219)
----------------
Total distributions to shareholders (1,219)
----------------
CAPITAL SHARE TRANSACTIONS (a):
Sale of shares 3,517,545
Reinvestment of distributions 1,219
Redemption of shares (54,541)
----------------
Net increase (decrease) from capital transactions 3,464,223
----------------
Net increase (decrease) in net assets 3,721,887
----------------
NET ASSETS - MARCH 31, 1998 (Including (b)) $ 3,721,897
- ------------------------------------------- ================
OPERATIONS:
Net investment income (loss) 9,796
Net realized gain (loss) on investments sold 71,045
investments (844,244)
----------------
Net increase (decrease) in net assets resulting from operations (763,403)
----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (12,900)
----------------
Total distributions to shareholders (12,900)
----------------
CAPITAL SHARE TRANSACTIONS (c):
Sale of shares 3,222,335
Reinvestment of distributions 12,597
Redemption of shares (1,527,653)
----------------
Net increase (decrease) from capital transactions 1,707,279
----------------
Net increase (decrease) in net assets 930,976
----------------
NET ASSETS - SEPTEMBER 30, 1998 (Including (d)) $ 4,652,873
- ----------------------------------------------- ================
(a) Shares Issued (Redeemed)
Sale of shares 330,663
Reinvestment of distributions 118
Redemption of shares (4,831)
================
Net increase (decrease) in shares 325,950
================
(b) Accumulated undistributed net investment income $ 3,599
(c) Shares Issued (Redeemed)
Sale of shares 276,265
Reinvestment of distributions 1,201
Redemption of shares (144,719)
----------------
Net increase (decrease) in shares 132,747
================
(d) Accumulated undistributed net investment income $ 495
</TABLE>
See Notes to Financial Statements. 7
<PAGE>
- --------------------------------------------------------------------------------
QUADRA GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected per share data and ratios for a share outstanding throughout the
period.
<TABLE>
<S> <C> <C>
QUADRA
GROWTH
FUND
----------------------------------------
For the Period For the Period
Ended November 4, 1997
September 30, 1998 to March 31, 1998
-------------------- ------------------
Net Asset Value, Beginning of Period $11.42 $10.00
Investment Operations
Net Investment Income (Loss) 0.07 0.01
Net Realized and Unrealized Gain (Loss) on Investments (1.33) 1.41
Total from Investment Operations (1.26) 1.42
Distributions from Net Investment Income (0.02) - (a)
Net Asset Value, End of Period $10.14 $11.42
==================== ==================
Total Return (11.21%) 14.23%
Ratio/Supplementary Data:
Net Assets at End of Period (000's omitted) $4,653 $3,722
Ratios to Average Net Assets: (b)
Expenses including assumption of expenses/waivers 1.00% 1.00%
Expenses excluding assumption of expenses/waivers 3.08% 12.16%
Net investment income (loss) including assumption of expenses/waivers 0.31% 0.83%
Average commission rate (c) $0.0492 $0.0591
Portfolio Turnover Rate 78.83% 21.81%
</TABLE>
- --------------------------------------------------------------------------
(a) Less than $0.01 per share.
(b) Annualized.
(c) Amount represents the average commission per share paid to brokers on the
purchase and sale of equity securities.
See Notes to Financial Statements. 8
<PAGE>
- --------------------------------------------------------------------------------
QUADRA GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
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 twenty-two
active investment portfolios (the "Funds"). The Trust Instrument of the Trust
authorizes each Fund to issue an unlimited number of shares of beneficial
interest without par value. Included in this report is Quadra Growth Fund (the
"Fund"), a diversified portfolio of the Trust. Commencement of operations for
Quadra Growth Fund was November 4, 1997. Effective September 16, 1998, the Trust
ceased the offering of the Fund. In addition, effective September 28, 1998, the
Trust terminated the exchange privileges applicable to the Fund.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates. The following represent significant accounting policies of the Fund:
SECURITY VALUATION - Securities held by the Fund for which market quotations are
readily available are valued using the last reported sales price provided by
independent pricing services. If no sales are reported, the mean of the last bid
and asked price is used. In the absence of readily available market quotations,
securities are valued at fair value as determined by the Board of Trustees.
Securities with a maturity of 60 days or less are valued at amortized cost.
REPURCHASE AGREEMENTS - The Fund may invest in repurchase agreements. The Fund,
through its custodian, receives delivery of the underlying collateral, whose
market value must always equal or exceed the repurchase price. The investment
adviser is responsible for determining the value of the underlying collateral at
all times. In the event of a default, the Fund may have difficulty with the
disposition of any securities held as collateral.
INTEREST AND DIVIDEND INCOME - Interest income is accrued as earned. Dividends
on securities held by the Fund are recorded on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions of net investment income and
capital gains, if any, are declared and paid at least annually by the Fund.
Distributions are based on amounts calculated in accordance with applicable
income tax regulations.
ORGANIZATION COSTS - The costs incurred by the Fund in connection with its
organization have been capitalized and are being amortized using the
straight-line method over a five-year period beginning on the commencement of
the Fund's operations.
FEDERAL TAXES - The Fund intends to qualify and continue to qualify each year as
a regulated investment company and distribute all of its taxable income. In
addition, by distributing in each calendar year substantially all of its net
investment income, capital gain and certain other amounts, if any, the Fund will
not be subject to a federal excise tax. Therefore, no federal income tax
provision is required.
EXPENSE ALLOCATION - The Trust accounts separately for the assets, liabilities
and operations of the Fund. Expenses that are directly attributable to more than
one Fund are allocated among the respective Funds.
REALIZED GAIN AND LOSS - Security transactions are recorded on trade date.
Realized gain and loss on investments sold are determined on the basis of
identified cost.
9
<PAGE>
- --------------------------------------------------------------------------------
QUADRA GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (concluded)
SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
NOTE 3. ADVISORY FEES, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The investment adviser to the Fund is Quadra Capital
Partners, LLC (the "Adviser"). Pursuant to an Investment Advisory Agreement, the
Adviser receives an annual advisory fee of 1.00% of the average daily net assets
of the Fund.
Quadra has entered into an investment sub-advisory agreement with Smith Asset
Management Group, L.P., which manages Quadra Growth Fund. Fees related to
sub-advisory services are borne directly by the Adviser and do not increase the
fees paid by shareholders to the Fund.
ADMINISTRATOR - The administrator of the Fund is Forum Administrative Services,
LLC ("FAdS"). Pursuant to an Administration Agreement, the Administrator
receives a fee from the Fund at an annual rate of 0.10% of the first $50 million
of the Fund's average daily net assets and 0.05% of the average daily net assets
over $50 million.
DISTRIBUTOR - The distributor of the Fund is Forum Financial Services, Inc.
("FFSI"), a registered broker-dealer and a member of the National Association of
Security Dealers, Inc. FFSI receives no compensation for its services.
TRANSFER AGENT - Forum Shareholder Services, LLC ("FSS") serves as the Fund's
transfer agent and dividend disbursing agent. For its services in these
capacities, FSS receives $24,000 per year, plus certain shareholder account
fees.
SHAREHOLDER SERVICING AGENT - The Trust has adopted a shareholder servicing plan
with respect to the Fund under which the Trust pays FAdS a shareholder servicing
fee at an annual rate of 0.25% of the average daily net assets of the Fund. FadS
may pay any or all amounts of these payments to various institutions that
provide shareholder services to their clients who invest in the Fund.
OTHER SERVICE PROVIDERS - Forum Accounting Services, LLC ("FAcS") is the Fund's
fund accountant and for its services receives an annual fee of $36,000 plus
certain adjustments based on the type and volume of portfolio transactions.
NOTE 4. SECURITY TRANSACTIONS
The cost of purchases and the proceeds from sales (including maturities) of
securities (excluding short-term investments) for the period ended September 30,
1998 were $5,977,108 and $4,333,296, respectively.
For federal income tax purposes, the tax basis of investment securities owned,
as of September 30, 1998, was $6,108,848 and the net unrealized depreciation of
investment securities was $582,689. The aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax cost
was $245,150 and the aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value was $827,839.
NOTE 5. WAIVER OF FEES AND ASSUMPTION OF EXPENSES
The Adviser and FAdS have voluntarily undertaken to waive a portion of their
fees and assume certain expenses of the Fund so that total expenses of the Fund
would not exceed a certain limitation. For the period ended September 30, 1998,
the Adviser waived fees of $31,619 and FAdS and the Adviser assumed expenses of
$3,000 and $31,154, respectively. The Adviser and FAdS, at their discretion, may
revise or discontinue the voluntary waivers. As of the date hereof, the Adviser
has maintained the Fund's ratio of expenses to average net assets at 1.00%.
10
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