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FORUM
FUNDS
ANNUAL REPORT
MARCH 31, 1999
Investors High Grade
Bond Fund
Investors Bond Fund
TaxSaver Bond Fund
Maine Municipal
Bond Fund
New Hampshire
Bond Fund
Investors Growth Fund
Payson Balanced Fund
Payson Value Fund
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TABLE OF CONTENTS MARCH 31, 1999
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A Message to Our Shareholders..................... 1
Discussion: Forum Investment Advisors, LLC........ 2
Discussion: H.M. Payson & Co...................... 4
Forum Funds Performance........................... 5
FINANCIAL STATEMENTS OF THE FORUM FUNDS
Schedules of Investments:
Investors High Grade Bond Fund.................. 8
Investors Bond Fund............................. 9
TaxSaver Bond Fund.............................. 11
Maine Municipal Bond Fund....................... 14
New Hampshire Bond Fund......................... 19
Investors Growth Fund........................... 22
Payson Balanced Fund............................ 23
Payson Value Fund............................... 25
Notes to Schedule of Investments.................. 26
Statements of Assets and Liabilities.............. 28
Statements of Operations.......................... 30
Statements of Changes in Net Assets............... 32
Financial Highlights.............................. 36
Notes to Financial Statements..................... 40
Independent Auditors' Report...................... 45
FORUM FUNDS-Registered Trademark-
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A MESSAGE TO OUR SHAREHOLDERS
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March 31, 1999
Dear Investor,
We would like to open this annual report for the 1999 fiscal year by
thanking Forum Funds (the "Funds") shareholders for the continued confidence
they have placed in the Funds. More than $250 million is now invested in these
Funds, and we want to assure you that your investment is being prudently
invested by the advisers. Each adviser manages these relatively conservative
Funds to meet the specific objectives described in the prospectuses, goals that
match those of our investors.
In our last report at the end of September 1998, we drew your attention to
the great economic instability in world markets. The crises in Russia, the Far
East and Brazil contributed to the Federal Reserve Bank Board's decision to ease
the Federal Funds Rate three times for a total of 75 basis points. This action
provided the stimulus to keep the U.S. economy on track and, with investor
confidence renewed, financial markets rallied significantly.
The volatility of the markets over the past twelve months has also been
accompanied by a narrowness in the markets rarely seen, which had an inevitable
impact on our Funds (performance figures for each of the Funds are in a table on
a following page). In spite of this, all three of our tax exempt bond funds
performed well relative to their benchmark. TaxSaver Bond Fund, Maine Municipal
Bond Fund and New Hampshire Bond Fund provided investors total returns of 4.95%,
5.19% and 5.61%, respectively, not including the impact of sales charges. By
contrast, their benchmark, the Morningstar Municipal-National Average, had a
total return of 4.81% during the same twelve-month period.
We invite you to read the adviser comments on market conditions on the
following pages and to review the remainder of this Annual Report for further
details about the fiscal year. As always, we remain committed to working to earn
the confidence you have placed in us. Should you have questions, please discuss
them with your investment professional or call us at (207) 879-0001. Thank you
for your trust.
Sincerely,
/S/ JOHN Y. KEFFER
JOHN Y. KEFFER
PRESIDENT
FORUM FUNDS-Registered Trademark-
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DISCUSSION: FORUM INVESTMENT ADVISORS, LLC
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Both domestic and foreign financial markets have gone through such upheavals
in the last year that standing back and trying to see things in perspective
should help us all separate hard facts from fantasies. Forum Investment Advisors
would like to share with you its appraisal of past events and its evaluation of
current and future trends. One possible source of confusion about market
conditions in the last year has been the focus of many news commentaries: If the
evening news were our only source of information about the financial markets we
might reach the conclusion that everyone in America has been making a fortune in
the markets. The reality is quite different, both for most Americans and the
stock and bond markets. Yes, fortunes have been made, but for most people, the
struggle to save continues as usual and investors have ridden waves of
volatility and wild speculation.
DEALING WITH GLOBAL TURMOIL
In the global financial village we now inhabit, events around the world
inevitably impact our domestic bond and stock markets. The Federal Reserve Bank
Board, noting disturbances from Asia to Russia to Latin America and the
resultant credit crunch in the United States, voted to reduce the Fed Funds Rate
a total of three times. This action proved to be the medicine the markets needed
to get their legs back under them, thus giving investors beneficial
opportunities. When global economies appeared to be ailing, the extremely narrow
interest rate spreads between the government and corporate markets widened
dramatically. In managing the bond funds we have tried to take advantage of the
opening created, moving out of treasury and government securities into
undervalued corporate bonds. Forum Investment Advisors is pleased with the
performance of the bond funds we manage, details of which are given in the
following pages. The tax-exempt bond funds, operating in markets less impacted
by the global disruptions, all outperformed their benchmarks. As one would
expect, the higher credit quality of the taxable Investors High Grade Bond Fund
led it to stronger performance versus Investors Bond Fund and against its
benchmark. Investors Bond Fund slightly underperformed its benchmark during the
one-year period.
Buffeted by the global turmoil, the stock market turned down significantly
in the fall. The Fed Funds Rate cuts, however, provided the impetus needed to
turn the market back up. Before long, the Dow 10,000 wait was on and the media
was rewarded when that goal was reached and then left behind. The Standard &
Poors 500 Index ("S&P 500") also reached new high followed by new high. But
looking beyond the indices and beyond all the media hype over Internet stocks, a
somewhat different story emerges--in reality what we have is a two tiered
market.
The S&P 500 rocketed to new heights fired largely by a very few stocks, and
those a handful of the very biggest companies with the most extreme valuations.
Growth, size and liquidity have been in fashion and investors have been willing
to pay almost any price to get it. It has been written that in 1998 more than
25% of the return the S&P 500 earned came from just five stocks, the five
largest stocks in the index, all of which sport historically high price/earnings
multiples. Without those five, returns were markedly lower. Given the extreme
valuations of those five, Investors Growth Fund was not an owner of those
companies, and for good reason: We seek good companies that are showing earnings
growth, but we want to purchase such companies at reasonable valuations. So
although the total return for the Fund did not meet the return of its benchmark
during the past year, the portfolio of companies owned continues to meet the
growth objective. Our perspective is that the discipline of seeking only
reasonably valued growing companies will provide appropriate rewards over the
long run.
2 FORUM FUNDS-Registered Trademark-
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DISCUSSION: FORUM INVESTMENT ADVISORS, LLC (CONTINUED)
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OUTLOOK
Market forecasting per se is not something we indulge in. Instead we look
for signs of change and try to bring experience to bear on interpreting the
meaning of change. As this is written, we are monitoring selective commodity
price increases and global economies for signals of strengthening so great as to
cause inflationary pressures. At this point, we do not think they are in
evidence, and given current conditions we do not believe Federal Reserve policy
is likely to change in the near term. However, should growth conditions improve
we think the bond market will quickly react and rates will trend higher. The
economic situation, coupled with the valuation gulf in the two tiered market,
will also impact the stock market. We expect that growth beyond that seen in the
very biggest companies will be recognized and that the gap between the most
richly priced stocks and the rest of the market will be narrowed. We believe
that investors will be rewarded if they have properly matched their own
objectives with the specific Forum Funds in which they have chosen to invest.
Forum Investment Advisors, LLC
Investment Adviser
3 FORUM FUNDS-Registered Trademark-
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DISCUSSION: H.M. PAYSON & CO.
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In the twelve months ended March 31, 1999, investors have seen it all. With
the Dow Jones Industrial Average breaking the mystical 10,000 point barrier as
the period ended, one might expect this report would amount to another mundane
recitation of continued generous returns for all investors. Yet, the reality of
the past year has been quite different.
During early 1998, the Asian financial and economic crisis worsened
considerably. As it did, signs of a spreading global malaise proliferated,
raising concerns about the potential negative impact on the otherwise resilient
U.S. economy. During the summer of '98, financial markets around the world went
into a tailspin, driven by fears of Russian and Latin American currency crises
and defaults. Sensational stories of mysterious "hedge funds" bringing the world
to its knees fanned the flames. In early October, however, the world's central
banks, led by the Federal Reserve, intervened with a series of interest rate
cuts. With liquidity and confidence restored, the U.S. stock market made a
remarkable recovery into the first quarter of 1999.
Yet, the celebrated recovery was astonishingly uneven. The difference in
returns between the very largest stocks and the rest of the market had never
been greater, as evidenced by the difficulty most professional managers have had
in keeping pace with the widely-followed indices. Many stocks, down fifty
percent or more during the decline, have seen only modest gains since.
Because our valuation work diverted us from many of the large capitalization
issues that continued to lead the market, the results for the Payson Funds when
compared with the widely followed indices were disappointing. For the one-year
period ending March 31, 1999, the Payson Value Fund and the Payson Balanced Fund
produced total returns after all expenses of (4.57%) and (8.20%), respectively.
For the five-year period ending March 31, 1999, the Payson Value Fund and the
Payson Balanced Fund experienced total returns of 16.35% and 11.21%,
respectively. Since inception, the Payson Value Fund has had an annualized total
return of 15.65%; the Payson Balanced Fund 11.05%(1). Adjusted for the 4%
maximum sales charge, the total returns for the one-year, five-year and since
inception periods would have been (8.39%), 15.41% and 14.95%, respectively, for
the Payson Value Fund, and (11.88%), 10.31% and 10.43% for the Payson Balanced
Fund(2).
In closing, we note the dramatic shift that has taken place in the few weeks
since the end of the reporting period. Issues that have been deeply out of favor
for many months (basic materials, energy and capital goods) have enjoyed large
percentage gains, while some of the leaders of the recent surge (technology,
pharmaceuticals and consumer multinationals) have seen notable declines. While
the economy continues to look healthy, we suspect that investors will
increasingly question the excessive valuations awarded to the select few issues
that have led thus far, and focus on the wealth of values available in the
broader market. As that happens, we believe Payson fund shareholders will stand
to benefit. In the meantime, we thank you again for your continued confidence.
H.M. Payson & Co.
Investment Adviser
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(1) Through 3/31/99. Payson Value Fund inception, 7/31/92; Payson Balanced Fund,
11/25/91. Performance data quoted represents past performance and is no
guarantee of future results. You should realize that investment return and
principal value will fluctuate, so that shares, when redeemed, may be worth more
or less than their original cost. Returns include the reinvestment of dividends
and capital gain distributions. Forum Financial Services, Inc., Distributor.
(2) Total returns have been restated to reflect the current maximum initial 4%
sales charge. Prior to 8/01/96, Fund shares were offered without a sales charge.
Thus, actual total returns for purchases of shares during that period would have
been higher than noted.
During the periods discussed, various fees and expenses were waived and
reimbursed. Had these waivers and reimbursements not occurred, the performance
of each fund would have been lower.
4 FORUM FUNDS-Registered Trademark-
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FORUM FUNDS PERFORMANCE
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The following table and charts provide performance figures for the Forum Funds.
The table covers the past fiscal year, while the charts show the funds' progress
since the inception of their operations.
SUMMARY PERFORMANCE INDICATORS
12 MONTH TOTAL RETURN -- PERIOD ENDING MARCH 31, 1999
<TABLE>
<CAPTION>
FORUM VS.
FORUM INDEX INDEX
----------- -------------- ------------
<S> <C> <C> <C>
Investors High Grade Bond Fund............................................... 6.12% 5.43%(1) 0.69%
Investors Bond Fund.......................................................... 4.45% 4.81%(2) -0.36%
TaxSaver Bond Fund........................................................... 4.95% 4.81%(3) 0.14%
Maine Municipal Bond Fund.................................................... 5.19% 4.81%(3) 0.38%
New Hampshire Bond Fund...................................................... 5.61% 4.81%(3) 0.80%
Investors Growth Fund........................................................ 6.25% 9.74%(4) -3.49%
Payson Balanced Fund......................................................... -8.20% 5.74%(5) -13.94%
Payson Value Fund............................................................ -4.57% 7.63%(6) -12.20%
(1) MORNINGSTAR Corporate Bond-High Quality Funds Average:
265 Funds Rated
(2) MORNINGSTAR Corporate Bond-General Funds Average:
561 Funds Rated
(3) MORNINGSTAR Municipal Bond-National Funds Average:
550 Funds Rated
(4) MORNINGSTAR Growth Funds Average:
1,704 Funds Rated
(5) MORNINGSTAR Balanced Funds Average:
426 Funds Rated
(6) MORNINGSTAR Growth & Income Funds Average:
763 Funds Rated
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. FORUM AND MORNINGSTAR RETURN
FIGURES DO NOT INCLUDE THE EFFECT OF SALES CHARGES. DURING THE PERIOD CERTAIN
FEES AND EXPENSES WERE WAIVED BY THE SERVICE PROVIDERS. WITHOUT THESE WAIVERS
TOTAL RETURNS WOULD HAVE BEEN LOWER. IF THE MAXIMUM SALES CHARGE WAS REFLECTED
AND IF THERE HAD BEEN NO FEE WAIVERS, THE QUOTED PERFORMANCE WOULD BE LOWER.
5 FORUM FUNDS-Registered Trademark-
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FORUM FUNDS PERFORMANCE (CONTINUED)
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These charts reflect a comparison in the change in value of a $10,000
investment, including applicable sales charges, in Investors High Grade Bond
Fund, Investors Bond Fund, TaxSaver Bond Fund, and Maine Municipal Bond Fund,
including reinvestment of dividends and distributions, to each Fund's related
securities index, since the Funds' inception. The Lehman Intermediate
Corporate/Government Index is a market index of fixed-rate government and
investment grade securities with maturities of up to 10 years. The Lehman 10
Year Municipal Index is a market index of investment grade municipal fixed-rate
debt securities with an average maturity of 10 years. Investment return and
principal value of an investment in the Funds will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. PAST PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT INCLUDING SALES CHARGE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
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<CAPTION>
INVESTORS HIGH GRADE BOND FUND VS. LEHMAN BROTHERS
INTERMEDIATE CORPORATE/GOVERNMENT BOND INDEX
<S> <C> <C>
INVESTORS HIGH GRADE BOND FUND LEHMAN INDEX
2/98 $9,625 $10,000
3/98 $9,610 $10,032
4/98 $9,626 $10,082
5/98 $9,721 $10,156
6/98 $9,795 $10,221
7/98 $9,812 $10,257
8/98 $9,989 $10,418
9/98 $10,244 $10,679
10/98 $10,224 $10,668
11/98 $10,253 $10,667
12/98 $10,282 $10,710
1/99 $10,332 $10,769
2/99 $10,140 $10,611
3/99 $10,198 $10,690
Average Annual Total Return on 3/31/99
1 Year: 2.14%
Since Inception on 3/16/98: 1.90%
Value on 3/31/99
Investors High Grade Bond Fund: $10,198
Lehman Index: $10,690
<CAPTION>
INVESTORS HIGH GRADE BOND FUND VS. LEHMAN BROTHERS
INTERMEDIATE CORPORATE/GOVERNMENT BOND INDEX
<S> <C> <C> <C> <C>
2/98
3/98
4/98
5/98
6/98
7/98
8/98
9/98
10/98
11/98
12/98
1/99
2/99
3/99
Average Annual Total Return on 3/31/99
1 Year:
Since Inception on 3/16/98:
Value on 3/31/99
Investors High Grade Bond Fund:
Lehman Index:
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INVESTORS BOND FUND VS. LEHMAN
INTERMEDIATE CORPORATE/GOVERNMENT INDEX
<S> <C> <C>
INVESTORS BOND FUND LEHMAN INDEX
9/89 $9,625 $10,000
10/89 $9,775 $10,212
11/89 $9,833 $10,309
12/89 $9,882 $10,337
1/90 $9,821 $10,271
2/90 $9,885 $10,309
3/90 $9,896 $10,322
4/90 $9,824 $10,286
5/90 $10,057 $10,512
6/90 $10,202 $10,653
7/90 $10,344 $10,801
8/90 $10,268 $10,757
9/90 $10,363 $10,840
10/90 $10,448 $10,965
11/90 $10,665 $11,132
12/90 $10,824 $11,285
1/91 $10,921 $11,399
2/91 $10,983 $11,490
3/91 $11,060 $11,568
4/91 $11,234 $11,694
5/91 $11,368 $11,765
6/91 $11,325 $11,774
7/91 $11,545 $11,904
8/91 $11,763 $12,132
9/91 $12,015 $12,340
10/91 $12,071 $12,481
11/91 $12,168 $12,625
12/91 $12,569 $12,933
1/92 $12,411 $12,815
2/92 $12,490 $12,865
3/92 $12,488 $12,815
4/92 $12,575 $12,927
5/92 $12,796 $13,128
6/92 $13,015 $13,322
7/92 $13,312 $13,587
8/92 $13,368 $13,723
9/92 $13,551 $13,910
10/92 $13,381 $13,729
11/92 $13,360 $13,681
12/92 $13,507 $13,860
1/93 $13,774 $14,130
2/93 $14,062 $14,354
3/93 $14,180 $14,411
4/93 $14,297 $14,526
5/93 $14,329 $14,494
6/93 $14,596 $14,722
7/93 $14,719 $14,757
8/93 $15,039 $14,992
9/93 $15,157 $15,055
10/93 $15,222 $15,096
11/93 $15,092 $15,011
12/93 $15,199 $15,080
1/94 $15,451 $15,247
2/94 $15,168 $15,022
3/94 $14,846 $14,774
4/94 $14,704 $14,673
5/94 $14,720 $14,684
6/94 $14,722 $14,685
7/94 $15,011 $14,897
8/94 $15,071 $14,943
9/94 $14,900 $14,805
10/94 $14,828 $14,804
11/94 $14,842 $14,737
12/94 $14,860 $14,789
1/95 $14,895 $15,039
2/95 $15,288 $15,350
3/95 $15,522 $15,438
4/95 $15,691 $15,628
5/95 $16,072 $16,100
6/95 $16,128 $16,207
7/95 $16,065 $16,209
8/95 $16,166 $16,357
9/95 $16,317 $16,474
10/95 $16,367 $16,657
11/95 $16,645 $16,875
12/95 $16,901 $17,053
1/96 $17,019 $17,199
2/96 $16,947 $16,998
3/96 $17,048 $16,911
4/96 $17,014 $16,852
5/96 $17,060 $16,839
6/96 $17,314 $17,017
7/96 $17,304 $17,068
8/96 $17,389 $17,082
9/96 $17,587 $17,319
10/96 $17,808 $17,626
11/96 $18,120 $17,859
12/96 $18,063 $17,744
1/97 $18,190 $17,813
2/97 $18,241 $17,847
3/97 $18,272 $17,724
4/97 $18,460 $17,931
5/97 $18,569 $18,080
6/97 $18,780 $18,245
7/97 $19,113 $18,615
8/97 $19,069 $18,522
9/97 $19,257 $18,737
10/97 $19,603 $18,945
11/97 $19,779 $18,987
12/97 $20,012 $19,139
1/98 $20,172 $19,389
2/98 $20,186 $19,374
3/98 $20,278 $19,436
4/98 $20,298 $19,533
5/98 $20,514 $19,676
6/98 $20,703 $19,801
7/98 $20,692 $19,871
8/98 $20,971 $20,183
9/98 $21,262 $20,689
10/98 $21,040 $20,669
11/98 $21,142 $20,667
12/98 $21,238 $20,749
1/99 $21,369 $20,863
2/99 $20,962 $20,557
3/99 $21,180 $20,711
Average Annual Total Return on 3/31/99
1 Year: 0.53%
5 Year: 6.55%
Since Inception on 10/2/89: 8.22%
Value on 3/31/99
Investors Bond Fund: $21,180
Lehman Index: $20,711
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TAXSAVER BOND FUND VS. LEHMAN
10 YEAR MUNICIPAL INDEX
<S> <C> <C>
TAXSAVER BOND FUND LEHMAN INDEX
9/89 $9,625 $10,000
10/89 $9,656 $10,114
11/89 $9,748 $10,283
12/89 $9,816 $10,389
1/90 $9,819 $10,358
2/90 $9,897 $10,430
3/90 $9,913 $10,413
4/90 $9,838 $10,483
5/90 $10,035 $10,711
6/90 $10,133 $10,811
7/90 $10,270 $10,962
8/90 $10,179 $10,804
9/90 $10,168 $10,806
10/90 $10,309 $11,044
11/90 $10,472 $11,269
12/90 $10,510 $11,296
1/91 $10,620 $11,482
2/91 $10,685 $11,581
3/91 $10,735 $11,575
4/91 $10,868 $11,735
5/91 $10,920 $11,823
6/91 $10,974 $11,809
7/91 $11,068 $11,933
8/91 $11,169 $12,094
9/91 $11,294 $12,279
10/91 $11,389 $12,379
11/91 $11,431 $12,400
12/91 $11,619 $12,664
1/92 $11,642 $12,690
2/92 $11,678 $12,671
3/92 $11,696 $12,652
4/92 $11,806 $12,772
5/92 $11,931 $12,922
6/92 $12,110 $13,145
7/92 $12,386 $13,577
8/92 $12,316 $13,416
9/92 $12,363 $13,528
10/92 $12,298 $13,390
11/92 $12,511 $13,635
12/92 $12,651 $13,793
1/93 $12,766 $14,025
2/93 $13,148 $14,538
3/93 $13,015 $14,326
4/93 $13,127 $14,462
5/93 $13,197 $14,512
6/93 $13,379 $14,798
7/93 $13,404 $14,835
8/93 $13,635 $15,142
9/93 $13,806 $15,329
10/93 $13,866 $15,353
11/93 $13,784 $15,227
12/93 $13,981 $15,552
1/94 $14,128 $15,743
2/94 $13,906 $15,312
3/94 $13,699 $14,724
4/94 $13,691 $14,909
5/94 $13,845 $15,005
6/94 $13,763 $14,940
7/94 $14,004 $15,191
8/94 $14,016 $15,250
9/94 $13,826 $15,044
10/94 $13,739 $14,825
11/94 $13,598 $14,545
12/94 $13,862 $14,806
1/95 $14,161 $15,190
2/95 $14,445 $15,620
3/95 $14,545 $15,831
4/95 $14,578 $15,850
5/95 $14,926 $16,352
6/95 $14,870 $16,251
7/95 $14,963 $16,490
8/95 $15,117 $16,714
9/95 $15,187 $16,821
10/95 $15,312 $17,014
11/95 $15,539 $17,242
12/95 $15,705 $17,347
1/96 $15,788 $17,523
2/96 $15,751 $17,305
3/96 $15,616 $17,245
4/96 $15,594 $17,196
5/96 $15,624 $17,360
6/96 $15,747 $17,526
7/96 $15,893 $17,695
8/96 $15,910 $17,695
9/96 $16,065 $17,877
10/96 $16,182 $18,102
11/96 $16,407 $18,468
12/96 $16,379 $18,385
1/97 $16,409 $18,456
2/97 $16,537 $18,630
3/97 $16,419 $18,380
4/97 $16,506 $18,516
5/97 $16,673 $18,779
6/97 $16,822 $18,986
7/97 $17,196 $19,519
8/97 $17,079 $19,330
9/97 $17,230 $19,576
10/97 $17,320 $19,679
11/97 $17,407 $19,770
12/97 $17,589 $20,082
1/98 $17,725 $20,305
2/98 $17,739 $20,303
3/98 $17,692 $20,289
4/98 $17,628 $20,177
5/98 $17,896 $20,520
6/98 $17,947 $20,596
7/98 $17,983 $20,629
8/98 $18,217 $20,988
9/98 $18,433 $21,301
10/98 $18,383 $21,309
11/98 $18,431 $21,373
12/98 $18,483 $21,439
1/99 $18,658 $21,768
2/99 $18,584 $21,572
3/99 $18,567 $21,561
Average Annual Total Return on 3/31/99
1 Year: 1.01%
5 Year: 5.46%
Since Inception on 10/2/89: 6.73%
Value on 3/31/99
TaxSaver Bond Fund: $18,567
Lehman Index: $21,561
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MAINE MUNICIPAL BOND FUND VS. LEHMAN
10 YEAR MUNICIPAL INDEX
<S> <C> <C>
MAINE MUNICIPAL BOND FUND LEHMAN INDEX
11/91 $9,750 $10,000
12/91 $9,945 $10,213
1/92 $9,951 $10,234
2/92 $9,910 $10,219
3/92 $9,912 $10,204
4/92 $10,022 $10,301
5/92 $10,135 $10,421
6/92 $10,296 $10,602
7/92 $10,635 $10,949
8/92 $10,520 $10,820
9/92 $10,569 $10,910
10/92 $10,424 $10,799
11/92 $10,634 $10,996
12/92 $10,760 $11,124
1/93 $10,887 $11,311
2/93 $11,232 $11,725
3/93 $11,081 $11,553
4/93 $11,194 $11,663
5/93 $11,238 $11,704
6/93 $11,401 $11,935
7/93 $11,438 $11,964
8/93 $11,675 $12,212
9/93 $11,818 $12,362
10/93 $11,855 $12,382
11/93 $11,749 $12,281
12/93 $11,956 $12,542
1/94 $12,078 $12,696
2/94 $11,803 $12,348
3/94 $11,460 $11,874
4/94 $11,482 $12,024
5/94 $11,594 $12,101
6/94 $11,541 $12,049
7/94 $11,724 $12,251
8/94 $11,761 $12,299
9/94 $11,599 $12,133
10/94 $11,385 $11,956
11/94 $11,185 $11,730
12/94 $11,455 $11,941
1/95 $11,745 $12,250
2/95 $12,058 $12,597
3/95 $12,183 $12,767
4/95 $12,217 $12,782
5/95 $12,583 $13,188
6/95 $12,518 $13,106
7/95 $12,624 $13,298
8/95 $12,746 $13,479
9/95 $12,798 $13,566
10/95 $12,907 $13,722
11/95 $13,077 $13,905
12/95 $13,203 $13,990
1/96 $13,302 $14,132
2/96 $13,267 $13,956
3/96 $13,077 $13,907
4/96 $13,068 $13,869
5/96 $13,086 $14,000
6/96 $13,160 $14,135
7/96 $13,288 $14,270
8/96 $13,296 $14,270
9/96 $13,407 $14,417
10/96 $13,524 $14,599
11/96 $13,717 $14,894
12/96 $13,684 $14,827
1/97 $13,741 $14,885
2/97 $13,842 $15,025
3/97 $13,728 $14,823
4/97 $13,782 $14,933
5/97 $13,927 $15,145
6/97 $14,059 $15,312
7/97 $14,349 $15,742
8/97 $14,236 $15,589
9/97 $14,369 $15,787
10/97 $14,439 $15,871
11/97 $14,493 $15,944
12/97 $14,677 $16,196
1/98 $14,801 $16,376
2/98 $14,800 $16,374
3/98 $14,818 $16,362
4/98 $14,766 $16,272
5/98 $14,958 $16,549
6/98 $15,000 $16,610
7/98 $15,043 $16,637
8/98 $15,263 $16,926
9/98 $15,428 $17,179
10/98 $15,430 $17,185
11/98 $15,458 $17,237
12/98 $15,504 $17,290
1/99 $15,673 $17,555
2/99 $15,599 $17,397
3/99 $15,587 $17,388
Average Annual Total Return on 3/31/99
1 Year: 2.56%
5 Year: 5.81%
Since Inception on 12/5/91: 6.25%
Value on 3/31/99
Maine Municipal Bond Fund: $15,587
Lehman Index: $17,388
</TABLE>
6 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FORUM FUNDS PERFORMANCE (CONTINUED)
- --------------------------------------------------------------------------------
These charts reflect a comparison in the change in value of a $10,000
investment, including applicable sales charges, in New Hampshire Bond Fund,
Investors Growth Fund, Payson Balanced Fund and Payson Value Fund, including
reinvestment of dividends and distributions, to each Fund's related securities
index, since the Funds' inception. The Lehman 10 Year Municipal Index is a
market index of investment grade municipal fixed-rate debt securities with an
average maturity of 10 years. The Standard and Poor's 500 Composite Index ("S&P
500") is a market weighted index composed of 500 large capitalization companies
and reflects the reinvestment of dividends. Investment return and principal
value of an investment in the Funds will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. PAST
PERFORMANCE IS NOT PREDICTIVE NOR A GUARANTEE OF FUTURE RESULTS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT INCLUDING SALES CHARGE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NEW HAMPSHIRE BOND FUND VS. LEHMAN
10 YEAR MUNICIPAL INDEX
<S> <C> <C>
NEW HAMPSHIRE BOND FUND LEHMAN INDEX
12/92 $9,750 $10,000
1/93 $9,746 $10,168
2/93 $10,119 $10,540
3/93 $9,881 $10,386
4/93 $10,008 $10,485
5/93 $10,077 $10,522
6/93 $10,278 $10,729
7/93 $10,334 $10,756
8/93 $10,607 $10,978
9/93 $10,760 $11,113
10/93 $10,754 $11,131
11/93 $10,664 $11,040
12/93 $10,906 $11,275
1/94 $11,028 $11,414
2/94 $10,726 $11,101
3/94 $10,350 $10,675
4/94 $10,379 $10,809
5/94 $10,485 $10,878
6/94 $10,433 $10,832
7/94 $10,623 $11,014
8/94 $10,654 $11,057
9/94 $10,508 $10,907
10/94 $10,346 $10,748
11/94 $10,197 $10,545
12/94 $10,406 $10,735
1/95 $10,664 $11,013
2/95 $10,934 $11,324
3/95 $11,005 $11,477
4/95 $11,025 $11,491
5/95 $11,378 $11,855
6/95 $11,315 $11,782
7/95 $11,402 $11,955
8/95 $11,525 $12,118
9/95 $11,582 $12,195
10/95 $11,692 $12,335
11/95 $11,849 $12,501
12/95 $11,942 $12,577
1/96 $12,043 $12,704
2/96 $11,984 $12,546
3/96 $11,815 $12,503
4/96 $11,792 $12,468
5/96 $11,785 $12,586
6/96 $11,874 $12,707
7/96 $11,980 $12,829
8/96 $11,984 $12,829
9/96 $12,109 $12,961
10/96 $12,228 $13,124
11/96 $12,417 $13,389
12/96 $12,370 $13,329
1/97 $12,408 $13,381
2/97 $12,499 $13,507
3/97 $12,354 $13,326
4/97 $12,414 $13,424
5/97 $12,583 $13,615
6/97 $12,703 $13,765
7/97 $12,995 $14,152
8/97 $12,885 $14,014
9/97 $13,018 $14,192
10/97 $13,080 $14,268
11/97 $13,139 $14,333
12/97 $13,315 $14,560
1/98 $13,426 $14,721
2/98 $13,459 $14,720
3/98 $13,446 $14,710
4/98 $13,420 $14,629
5/98 $13,608 $14,877
6/98 $13,644 $14,932
7/98 $13,683 $14,956
8/98 $13,885 $15,216
9/98 $14,036 $15,443
10/98 $14,060 $15,449
11/98 $14,083 $15,496
12/98 $14,131 $15,544
1/99 $14,273 $15,782
2/99 $14,215 $15,640
3/99 $14,200 $15,632
Average Annual Total Return on 3/31/99
1 Year: 2.97%
5 Year: 5.99%
Since Inception on 12/31/92: 5.77%
Value on 3/31/99
New Hampshire Bond Fund: $14,200
Lehman Index: $15,632
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INVESTORS GROWTH FUND VS. S&P 500 INDEX
INVESTORS GROWTH FUND S&P 500 INDEX
<S> <C> <C> <C> <C>
11/97 $9,600 $10,000
12/97 $9,802 $10,172
1/98 $9,917 $10,284
2/98 $10,474 $11,025
3/98 $10,896 $11,589
4/98 $10,925 $11,706
5/98 $10,694 $11,505
6/98 $10,884 $11,972
7/98 $10,585 $11,845
8/98 $9,226 $10,134
9/98 $9,776 $10,784
10/98 $10,375 $11,660
11/98 $10,858 $12,367
12/98 $11,434 $13,079
1/99 $11,584 $13,625
2/99 $11,354 $13,202
3/99 $11,577 $13,730
Average Annual Total Return on 3/31/99
1 Year: 2.00%
Since Inception on 11/12/97: 11.94%
Value on 3/31/99
Investors Growth Fund: $11,577
S&P 500 Index: $13,730
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PAYSON BALANCED FUND VS. S&P 500 INDEX
PAYSON BALANCED FUND S&P 500 INDEX
<S> <C> <C> <C> <C>
11/91 $9,600 $10,000
12/91 $10,147 $11,142
1/92 $9,974 $10,934
2/92 $10,061 $11,076
3/92 $9,897 $10,861
4/92 $9,994 $11,179
5/92 $10,091 $11,234
6/92 $10,004 $11,067
7/92 $10,297 $11,519
8/92 $10,199 $11,283
9/92 $10,355 $11,416
10/92 $10,267 $11,455
11/92 $10,582 $11,844
12/92 $10,887 $11,989
1/93 $11,075 $12,089
2/93 $11,205 $12,254
3/93 $11,393 $12,513
4/93 $11,323 $12,210
5/93 $11,513 $12,536
6/93 $11,843 $12,573
7/93 $11,914 $12,522
8/93 $12,377 $12,996
9/93 $12,407 $12,894
10/93 $12,488 $13,160
11/93 $12,336 $13,035
12/93 $12,625 $13,193
1/94 $13,069 $13,641
2/94 $12,821 $13,271
3/94 $12,191 $12,693
4/94 $12,160 $12,856
5/94 $12,212 $13,066
6/94 $11,827 $12,746
7/94 $12,163 $13,165
8/94 $12,562 $13,704
9/94 $12,299 $13,369
10/94 $12,310 $13,668
11/94 $11,886 $13,171
12/94 $12,095 $13,366
1/95 $12,289 $13,713
2/95 $12,751 $14,246
3/95 $12,923 $14,666
4/95 $13,075 $15,098
5/95 $13,509 $15,700
6/95 $13,607 $16,064
7/95 $13,859 $16,597
8/95 $14,078 $16,638
9/95 $14,473 $17,340
10/95 $14,605 $17,278
11/95 $15,113 $18,036
12/95 $15,522 $18,383
1/96 $15,795 $19,008
2/96 $15,716 $19,185
3/96 $15,727 $19,370
4/96 $15,750 $19,655
5/96 $15,819 $20,161
6/96 $15,727 $20,238
7/96 $15,137 $19,344
8/96 $15,496 $19,753
9/96 $16,039 $20,864
10/96 $16,412 $21,439
11/96 $17,262 $23,058
12/96 $17,260 $22,601
1/97 $17,623 $24,013
2/97 $17,752 $24,201
3/97 $17,208 $23,209
4/97 $17,704 $24,593
5/97 $18,669 $26,089
6/97 $19,112 $27,257
7/97 $20,384 $29,426
8/97 $20,135 $27,778
9/97 $20,896 $29,299
10/97 $20,248 $28,321
11/97 $20,671 $29,631
12/97 $20,883 $30,140
1/98 $20,975 $30,473
2/98 $22,023 $32,669
3/98 $22,590 $34,341
4/98 $22,621 $34,686
5/98 $21,796 $34,091
6/98 $21,279 $35,474
7/98 $20,357 $35,098
8/98 $17,837 $30,030
9/98 $18,670 $31,954
10/98 $20,155 $34,550
11/98 $20,944 $36,644
12/98 $21,621 $38,754
1/99 $21,439 $40,374
2/99 $20,268 $39,119
3/99 $20,737 $40,683
Average Annual Total Return on 3/31/99
1 Year: (11.88%)
5 Year: 10.31%
Since Inception on 11/25/91: 10.43%
Value on 3/31/99
Payson Balanced Fund: $20,737
S&P 500 Index: $40,683
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PAYSON VALUE FUND VS. S&P 500 INDEX
PAYSON VALUE FUND S&P 500 INDEX
<S> <C> <C> <C> <C>
7/92 $9,600 $10,000
8/92 $9,389 $9,796
9/92 $9,466 $9,911
10/92 $9,408 $9,945
11/92 $9,899 $10,282
12/92 $10,274 $10,409
1/93 $10,497 $10,495
2/93 $10,497 $10,638
3/93 $10,661 $10,863
4/93 $10,487 $10,600
5/93 $10,768 $10,883
6/93 $10,952 $10,915
7/93 $11,175 $10,871
8/93 $11,622 $11,283
9/93 $11,680 $11,194
10/93 $12,031 $11,425
11/93 $11,914 $11,316
12/93 $12,265 $11,453
1/94 $12,882 $11,842
2/94 $12,627 $11,521
3/94 $11,874 $11,020
4/94 $12,011 $11,161
5/94 $12,070 $11,344
6/94 $11,541 $11,066
7/94 $11,984 $11,429
8/94 $12,603 $11,897
9/94 $12,269 $11,606
10/94 $12,308 $11,866
11/94 $11,736 $11,435
12/94 $11,815 $11,604
1/95 $11,944 $11,905
2/95 $12,410 $12,368
3/95 $12,648 $12,732
4/95 $12,738 $13,107
5/95 $13,166 $13,630
6/95 $13,345 $13,946
7/95 $13,824 $14,409
8/95 $13,854 $14,445
9/95 $14,254 $15,054
10/95 $14,184 $15,000
11/95 $14,766 $15,658
12/95 $15,144 $15,960
1/96 $15,647 $16,502
2/96 $15,798 $16,656
3/96 $16,161 $16,816
4/96 $16,221 $17,064
5/96 $16,413 $17,503
6/96 $16,383 $17,570
7/96 $15,471 $16,794
8/96 $16,049 $17,149
9/96 $16,768 $18,113
10/96 $17,175 $18,612
11/96 $18,141 $20,018
12/96 $18,014 $19,621
1/97 $18,558 $20,846
2/97 $18,716 $21,010
3/97 $18,263 $20,148
4/97 $18,921 $21,350
5/97 $20,055 $22,649
6/97 $20,827 $23,663
7/97 $22,133 $25,546
8/97 $21,452 $24,116
9/97 $22,917 $25,436
10/97 $22,269 $24,587
11/97 $23,134 $25,724
12/97 $23,711 $26,166
1/98 $23,845 $26,455
2/98 $25,399 $28,362
3/98 $26,533 $29,813
4/98 $26,631 $30,113
5/98 $25,639 $29,596
6/98 $25,398 $30,797
7/98 $24,149 $30,470
8/98 $20,096 $26,070
9/98 $21,461 $27,740
10/98 $23,044 $29,995
11/98 $23,878 $31,812
12/98 $25,083 $33,644
1/99 $25,332 $35,050
2/99 $24,322 $33,961
3/99 $25,320 $35,319
Average Annual Total Return on 3/31/99
1 Year: (8.39%)
5 Year: 15.41%
Since Inception on 7/31/92: 14.95%
Value on 3/31/99
Payson Value Fund: $25,320
S&P 500 Index: $35,319
</TABLE>
7 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
INVESTORS HIGH GRADE BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS & NOTES (18.0%)
$ 1,000,000 ABN Amro Bank, North America Finance,
Inc., 8.25%, 8/3/09................... $ 1,072,370
500,000 BankAmerica Corp., 8.13%, 2/1/02........ 527,915
500,000 Dean Witter Discover, 6.25%, 3/15/00.... 503,510
2,000,000 Lehman Brothers Holdings, Inc., 8.50%,
8/1/15................................ 2,144,940
2,000,000 Mercantile Banc Corp., 7.30%, 6/15/07... 2,107,900
-----------
Total Corporate Bonds & Notes
(cost $6,176,991) 6,356,635
-----------
GOVERNMENT AGENCY NOTES (6.9%)
FHLB (3.8%)
1,350,000 6.56%, 4/15/99.......................... 1,350,783
FHLMC (0.9%)
300,000 6.60%, 11/12/99......................... 303,009
FNMA (2.2%)
750,000 7.50%, 2/11/02.......................... 792,390
-----------
Total Government Agency Notes
(cost $2,422,079) 2,446,182
-----------
GOVERNMENT MORTGAGE BACKED SECURITIES (13.6%)
GNMA (13.6%)
797,525 Pool 382828, 6.50%, 4/15/28............. 794,032
544,410 Pool 400138, 6.50%, 4/15/28............. 542,026
112,451 Pool 430637, 6.50%, 4/15/28............. 111,958
233,506 Pool 462566, 6.50%, 3/15/28............. 232,483
43,671 Pool 463682, 6.50%, 3/15/28............. 43,479
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GOVERNMENT MORTGAGE BACKED SECURITIES, CONTINUED
$ 841,069 Pool 463821, 6.50%, 4/15/28............. $ 837,384
1,054,184 Pool 463822, 6.50%, 4/15/28............. 1,049,567
643,672 Pool 468812, 6.50%, 4/15/28............. 640,853
70,692 Pool 473533, 6.50%, 4/15/28............. 70,383
214,025 Pool 473541, 6.50%, 4/15/28............. 213,088
293,352 Pool 474630, 6.50%, 4/15/28............. 292,067
-----------
Total Government Mortgage Backed Securities
(cost $4,848,559) 4,827,320
-----------
U.S. TREASURY OBLIGATIONS (59.2%)
U.S TREASURY BONDS (10.6%)
4,000,000 5.25%, 11/15/28......................... 3,738,280
-----------
U.S. TREASURY NOTES (48.6%)
1,000,000 5.88%, 2/15/04.......................... 1,030,412
2,000,000 7.25%, 5/15/04.......................... 2,180,240
3,000,000 6.50%, 8/15/05.......................... 3,185,730
10,000,000 5.88%, 11/15/05......................... 10,288,800
500,000 6.25%, 2/15/07.......................... 526,605
-----------
Total U.S. Treasury Notes 17,211,787
-----------
Total U.S. Treasury Obligations
(cost $20,992,577) 20,950,067
-----------
SHORT-TERM HOLDINGS (2.3%)
814,927 Dreyfus Government Cash Management Fund
(cost $814,927)..................... 814,927
-----------
Total Investments (100.0%)
(cost $35,255,133) $35,395,131
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 8 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
INVESTORS BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (1.9%)
FHLMC (0.3%)
$ 171,386 Series 90 135-A, 8.75%, 5/15/00......... $ 174,079
-----------
OTHER (1.6%)
164,950 Merrill Lynch Mortgage Investors, Inc.,
Series 89 E, 9.40%, 9/15/09........... 174,074
942,292 RTC, Series 92 C8 D, 8.84%, 12/25/23
(b)................................... 936,403
-----------
Total Other 1,110,477
-----------
Total Collateralized Mortgage Obligations
(cost $1,256,127) 1,284,556
-----------
CORPORATE BONDS & NOTES (72.3%)
1,725,000 ABN Amro Bank, North America Finance,
Inc., 8.25%, 8/1/09................... 1,849,838
750,000 Associates Corp. of North America,
6.63%, 6/15/05........................ 772,297
500,000 Bank One Corp., 8.10%, 3/1/02........... 530,275
2,000,000 Bank United, 8.00%, 3/15/09............. 2,023,179
1,000,000 BankAmerica Corp., 7.13%, 5/1/06........ 1,049,910
1,500,000 Bankers Trust New York Co., 7.25%,
10/15/11.............................. 1,551,150
500,000 Bear Stearns Cos., Inc., 6.75%,
4/15/03............................... 507,880
250,000 Boeing Co., 6.35%, 6/15/03.............. 254,282
3,000,000 CBS, Inc., ACA insured, 7.63%, 1/1/02... 3,095,010
4,250,000 Chase Capital, 5.90% V/R, 8/1/28........ 4,137,100
500,000 Chase Manhattan Bank, N.A., 9.75%,
11/1/01............................... 548,230
7,000,000 Comerica Bank, 8.38%, 7/15/24........... 7,637,630
1,000,000 Commercial Credit Co., 7.88%, 7/15/04... 1,076,570
1,000,000 Commercial Credit Co., 7.38%, 4/15/05... 1,051,140
1,500,000 Conseco, Inc., 6.40%, 6/15/01........... 1,481,505
3,000,000 Conseco, Inc., 8.70%, 11/15/26.......... 2,795,712
1,500,000 Cummins Engine Co., Inc., 6.45%,
3/1/05................................ 1,471,140
1,000,000 Dow Chemical Co., 8.63%, 4/1/06......... 1,103,650
500,000 Dupont Corp., 8.13%, 3/15/04............ 547,955
500,000 First Chicago NBD Corp., 6.13%,
2/15/06............................... 496,785
1,000,000 Ford Motor Credit Co., 7.50%, 6/15/04... 1,065,940
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS & NOTES (CONTINUED)
$ 1,500,000 Ford Motor Credit Co., 6.13%, 1/9/06.... $ 1,494,510
400,000 International Lease Finance Corp.,
8.38%, 12/15/04....................... 439,728
500,000 J.P. Morgan & Co., Inc., 7.63%,
9/15/04............................... 531,275
1,000,000 J.P. Morgan & Co., Inc., 6.25%,
12/15/05.............................. 999,350
2,500,000 Lehman Brothers Holdings, 7.20%,
8/15/09............................... 2,528,750
1,000,000 Leucadia Capital Trust I, 8.65%,
1/15/27............................... 891,229
750,000 Merchants National Corp. (a National
City Corp. subsidiary), 9.88%,
10/1/99............................... 767,070
500,000 Merrill Lynch & Co., Inc., 7.00%,
3/15/06............................... 522,550
500,000 Merrill Lynch & Co., Inc., 7.00%,
1/15/07............................... 523,065
500,000 Morgan Stanley Group, Inc., 6.75%,
3/4/03................................ 514,970
250,000 Norwest Financial, Inc., 6.13%,
8/1/03................................ 253,325
1,000,000 NTC Capital, 5.55% V/R, 1/15/27......... 977,500
500,000 Paine Webber, Inc., 9.25%, 12/15/01..... 536,425
700,000 Republic New York Corp., 8.38%,
2/15/07............................... 781,046
1,000,000 Sears Roebuck Acceptance Corp., 6.70%,
11/15/06.............................. 1,021,380
500,000 Security Pacific Corp., 6.00%, 5/1/00... 502,900
500,000 Southern New England Telephone, 7.13%,
8/1/07................................ 536,700
-----------
Total Corporate Bonds & Notes
(cost $49,345,341) 48,868,951
-----------
GOVERNMENT MORTGAGE BACKED SECURITIES (7.3%)
FHLMC (0.1%)
63,996 Pool 502128, 9.00%, 10/1/04............. 66,536
-----------
GNMA (7.2%)
86,834 Pool 406467, 6.50%, 3/15/26............. 86,454
151,389 Pool 452743, 6.50%, 12/15/27............ 150,726
1,634,125 Pool 462480, 6.50%, 1/15/28............. 1,626,967
491,397 Pool 462903, 6.50%, 2/15/28 489,245
</TABLE>
See Notes to Schedule of Investments. 9 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
INVESTORS BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
GNMA (CONTINUED)
<C> <S> <C>
$ 2,542,288 Pool 463821, 6.50%, 4/15/28 $ 2,531,154
-----------
Total GNMA 4,884,546
-----------
Total Government Mortgage Backed Securities
(cost $4,971,770) 4,951,082
-----------
MUNICIPAL BONDS (4.0%)
1,197,467 Coffee County, GA, Hospital Authority
RV, Taxable Anticipation Certificates,
Series B, ACA insured, 9.00%, 12/1/12
(b)................................... 1,369,136
1,293,265 Coffee County, GA, Hospital Authority
RV, Taxable Anticipation Certificates,
Series B, 9.00%, 12/1/12 (b).......... 1,317,993
-----------
Total Municipal Bonds
(cost $2,632,872) 2,687,129
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
U.S. TREASURY BONDS (8.3%)
$ 6,000,000 U.S. Treasury Bond, 5.25%, 11/15/28
(cost $5,805,000)................... $ 5,598,750
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
- --------------------
<C> <S> <C>
PREFERRED STOCK (5.8%)
4,000,000 Irwin Financial Corp., Capital Trust
I..................................... 1,070,000
6,850,000 NCBE Capital Trust...................... 1,755,312
8,000,000 Simmons First National Corp............. 1,080,000
-----------
Total Preferred Stock
(cost $3,738,301) 3,905,312
-----------
SHORT-TERM HOLDINGS (0.4%)
256,630 Dreyfus Government Cash Management Fund
(cost $256,630)..................... 256,630
-----------
Total Investments (100.0%)
(cost $68,006,041) $67,552,410
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 10 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (99.5%)
CALIFORNIA (3.2%)
$ 1,000,000 Fresno, CA, Union SD, Series A, MBIA
insured, 6.55%, 8/1/20................ $ 1,182,440
-----------
COLORADO (3.5%)
1,000,000 Douglas County, CO, SD #1, GO Bonds,
Series A, 8.00%, 12/15/09............. 1,305,130
-----------
ILLINOIS (4.0%)
1,000,000 Illinois State, GO Bonds RV, 5.70%,
4/1/10................................ 1,076,480
450,000 Illinois Development Finance Authority
RV, Community Rehabilitation Providers
Facilities Acquisition Program, Series
92, 6.44%, 8/1/12..................... 400,770
-----------
1,477,250
-----------
INDIANA (1.4%)
100,000 Hendricks, IN, Economic Development
Income Tax RV, Series A, 5.95%,
7/1/99................................ 100,678
100,000 Indiana Bond Bank RV, Special Program,
Series A2, Sumitomo Bank Ltd., LOC,
6.30%, 1/1/00......................... 102,151
100,000 Indiana Health Facilities Financing
Authority Hospital RV, Community
Hospital of Indiana, Series A & B,
MBIA insured, 6.35%, 7/1/03........... 108,849
100,000 Indiana Transportation Financial
Authority Airport Facilities Lease RV,
Series A, 6.00%, 11/1/01.............. 105,306
100,000 Monroe County, IN, School Building Corp.
RV, First Mortgage, 5.80%, 1/15/00.... 101,970
-----------
518,954
-----------
KENTUCKY (3.2%)
1,000,000 Kenton County, KY, Water District RV,
6.00%, 2/1/17......................... 1,086,250
100,000 Kentucky Housing Corp., Housing RV,
Series B, 5.05%, 7/1/06............... 103,795
-----------
1,190,045
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
LOUISIANA (3.8%)
$ 1,000,000 Louisiana Public Facilities Authority
RV, Extended Care Facilities Authority
Comm-Care Corp., 11.00%, 2/1/14....... $ 1,408,200
-----------
MARYLAND (1.7%)
625,000 Maryland State EDA Health Care
Facilities RV, Crescent Cities
Project, Series A, 5.30%, 12/20/18.... 633,944
-----------
MICHIGAN (7.2%)
250,000 Comstock Park, MI, Public Schools GO
Bonds, 6.00%, 5/1/06.................. 278,043
1,000,000 Grand Rapids, MI, Water Supply RV, FGIC
insured, 6.50%, 1/1/15................ 1,063,330
200,000 Michigan, Muni Bond Authority RV, Series
G, AMBAC insured, 6.20%, 11/1/04...... 222,712
1,000,000 Michigan State, Strategic FD LTD, 6.50%,
2/15/02............................... 1,079,740
-----------
2,643,825
-----------
MISSOURI (4.3%)
1,000,000 Kansas City, MO, IDA RV, Owens-Illinois,
PJ-Conv, 4.90%, 12/31/08.............. 1,006,870
500,000 Sikeston, Missouri, Electric RV, 6.00%,
6/1/16................................ 567,380
-----------
1,574,250
-----------
MONTANA (2.9%)
1,000,000 Forsyth, MT, PCR RV Refunding, Montana
Power Co., Series A, AMBAC insured,
6.13%, 5/01/23........................ 1,087,000
-----------
NEBRASKA (2.9%)
1,000,000 Douglas County, NE, SD #17, GO Bonds,
Millard, MBIA insured, 6.25%,
10/1/17............................... 1,089,020
-----------
NEW HAMPSHIRE (0.9%)
320,000 New Hampshire State, GO Bonds, Capital
Improvement, Series A, 5.13%,
10/1/17............................... 325,344
-----------
</TABLE>
See Notes to Schedule of Investments. 11 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
NEW JERSEY (3.0%)
$ 1,000,000 Essex County, NJ, Improvement Authority
RV, Utilities System East Orange
Franchise, MBIA insured, 6.00%,
7/1/18................................ $ 1,096,330
-----------
NEW YORK (1.0%)
350,000 New York State Thruway Authority,
Service Contract RV, Local Highway and
Bridge Project, 5.75%, 4/1/06......... 378,970
-----------
NORTH CAROLINA (2.1%)
750,000 Mecklenburg County, NC, Industrial
Facilities & PCR Financing Authority
RV, Fluor Corp. Project, 5.25%,
12/1/09............................... 772,275
-----------
OHIO (27.2%)
1,000,000 Butler County, OH, Transportation RV,
Improvement District, Series A, FSA
insured, 6.00%, 4/1/11................ 1,124,200
1,000,000 Cleveland, OH Public Power, 7.00%,
11/15/01.............................. 1,089,870
2,000,000 Hamilton, OH, Electrical System Mortgage
RV, Series A, FGIC insured, 6.00%,
10/15/23.............................. 2,163,080
700,000 Lakota, OH, SD UTGO Bonds, AMBAC
insured, 6.25%, 12/1/14............... 792,414
750,000 Montgomery County, OH, GO Bonds, 5.30%,
12/1/10............................... 797,355
795,000 Northwest, OH, SD LOC, GO Bonds, FGIC
insured, 5.50%, 12/1/12............... 866,518
500,000 Ohio State Air Quality Development
Authority, PCR, Cleveland Electric Co.
Project, FGIC insured, 8.00%,
12/1/13............................... 569,300
1,500,000 Ohio State Turnpike Community, RV,
Series A, 5.50%, 2/15/24.............. 1,609,335
555,000 Shelby County, OH, Hospital Facilities
RV, Wilson Memorial Hospital, ETM USG,
6.40%, 12/1/03........................ 588,245
435,000 Washington County, OH, Hospital
Refunding RV, Shelby General Hospital,
6.88%, 7/1/03......................... 460,295
-----------
10,060,612
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
OKLAHOMA (0.7%)
$ 250,000 Claremore, OK, Public Works Authority
Capital Improvement RV, MBIA insured,
5.00%, 6/1/05......................... $ 263,180
-----------
PENNSYLVANIA (8.3%)
550,000 Allegheny County, PA, Hospital
Development Authority, Health Care RV,
Allegheny Valley School Project,
7.25%, 2/1/03......................... 572,561
1,000,000 Allegheny County, PA, Hospital
Development Authority, Health Center
RV, Series 90, West Penn Hospital
Foundation, 8.00%, 1/1/05............. 1,044,550
500,000 Bucks County, PA, IDA RV, Personal Care,
ETM USG, Series A, 10.00%, 5/15/19.... 808,165
350,000 Erie-Western Pennsylvania Port
Authority, Pennsylvania Refunding RV,
8.25%, 6/15/00........................ 369,842
110,000 Pennsylvania HEFA RV, Medical College of
Pennsylvania, Series 91 B, 7.25%,
3/1/05................................ 119,439
125,000 Washington County, PA, IDA RV,
Presbyterian Medical Center, FHA
insured, 6.50%, 1/15/02............... 134,099
-----------
3,048,656
-----------
PUERTO RICO (8.1%)
1,000,000 Commonwealth of Puerto Rico, GO Bonds,
Improvements Bonds, 5.50%, 7/1/13..... 1,075,320
750,000 Puerto Rico Commonwealth, GO Bonds, MBIA
insured, 5.75%, 7/1/10................ 840,090
400,000 Puerto Rico Public Finance Corp.,
Commonwealth Appropriations RV, Series
A, 5.38%, 6/1/18...................... 426,247
20,000 Puerto Rico, Industrial, Medical &
Environmental RV, Abbott Chemicals,
Inc. Project, 6.50%, 7/1/09........... 20,488
550,000 University of Puerto Rico RV, Series N,
MBIA insured, 6.25%, 6/1/04........... 611,958
-----------
2,974,103
-----------
</TABLE>
See Notes to Schedule of Investments. 12 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
TAXSAVER BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
VIRGIN ISLANDS (0.4%)
$ 135,000 Virgin Islands, VI, Water & Power
Authority, Electric System RV, 5.25%,
7/1/06................................ $ 142,262
-----------
WASHINGTON (5.9%)
1,190,000 Pierce County, WA, HFA RV, Pooled,
6.00%, 12/1/28........................ 1,191,344
1,000,000 Vancouver, WA, HFA RV, Housing-
Sub-Springbrook Square=B, 6.00%,
3/1/31................................ 994,310
-----------
2,185,654
-----------
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
WEST VIRGINIA (3.8%)
$ 1,300,000 Monongalia County, WV,
Pollution RV, Potomac Edison
Co. Fort Martin, Series B,
5.95%, 4/1/13......................... $ 1,386,359
-----------
Total Municipal Bonds (cost $35,755,555) 36,743,803
-----------
<CAPTION>
SHARES
- --------------------
<C> <S> <C>
SHORT-TERM HOLDINGS (0.5%)
184,380 Boston 1784 Tax Free Money Market Fund
(cost $184,380)....................... 184,380
-----------
Total Investments (100.0%)
(cost $35,939,935) $36,928,183
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 13 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS (98.9%)
GENERAL OBLIGATION--BOND BANK (3.9%)
$ 10,000 Maine Muni Bond Bank, Series C, 6.45%,
11/1/01............................... $ 10,711
25,000 Maine Muni Bond Bank, Series D, 5.90%,
11/1/00............................... 25,989
90,000 Maine Muni Bond Bank, Series E, 5.70%,
11/1/11............................... 97,171
50,000 Maine Muni Bond Bank, Series 89B, 7.40%,
11/1/14, P/R 11/1/99 @ 102............ 52,210
150,000 Maine Muni Bond Bank, Series 90 B,
7.20%, 11/1/15, P/R USG, 11/1/00 @
102................................... 161,762
25,000 Maine Muni Bond Bank, Series 90 D,
7.38%, 11/1/10, P/R USG, 11/1/00 @
102................................... 27,026
210,000 Maine Muni Bond Bank, Series 90B, 7.20%,
11/1/07, P/R 11/1/00 @ 102............ 226,467
50,000 Maine Muni Bond Bank, Series 90B, 7.20%,
11/1/11, P/R 11/1/00 @ 102............ 53,921
100,000 Maine Muni Bond Bank, Series 92B, 6.65%,
11/1/07............................... 111,726
85,000 Maine Muni Bond Bank, Series 92B, 6.75%,
11/1/12............................... 95,037
100,000 Maine Muni Bond Bank, Series 92C, 5.80%,
11/1/99............................... 101,558
150,000 Maine Muni Bond Bank, Series 92E, 5.80%,
11/1/04............................... 161,973
20,000 Maine Muni Bond Bank, Series 93 A,
5.00%, 6/1/03......................... 21,078
80,000 Maine Muni Bond Bank, Sewer & Water
Bonds, SRF Program, Series 91 A,
7.20%, 11/1/13, P/R USG, 11/1/01 @
102................................... 88,512
-----------
1,235,141
-----------
GENERAL OBLIGATION--LOCAL (17.9%)
100,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 5.75%,
10/1/01............................... 104,683
25,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 5.85%,
10/1/02............................... 26,543
150,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.00%,
10/1/03............................... 161,700
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--LOCAL, CONTINUED
$ 100,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.10%,
10/1/04............................... $ 107,891
250,000 Bangor, ME, LTGO Bonds, Bangor
International Airport Project, 6.35%,
10/1/07............................... 270,245
100,000 Bangor, ME, UTGO Bonds, 5.20%,
11/1/00............................... 102,975
60,000 Bangor, ME, UTGO Bonds, 5.50%, 9/1/24... 64,934
175,000 Bar Harbor, ME, UTGO Bonds, 6.20%,
6/1/05................................ 194,784
75,000 Bar Harbor, ME, UTGO Bonds, 6.45%,
6/1/09................................ 86,987
30,000 Bath, ME, UTGO Bonds, 7.45%, 12/1/07.... 36,936
20,000 Bath, ME, UTGO Bonds, 7.50%, 12/1/08.... 25,026
25,000 Bath, ME, UTGO Bonds, 5.63%, 3/1/09..... 27,191
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/03................................ 53,917
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/04................................ 54,582
50,000 Brewer, ME, UTGO Bonds, Series A, 6.10%,
1/1/05................................ 54,344
50,000 Brewer, ME, UTGO Bonds, Series A, 6.20%,
1/1/06................................ 54,334
50,000 Brunswick, ME, Tax Increment GO Bonds,
BTI Project, 5.50%, 11/1/08........... 54,298
250,000 Cape Elizabeth, ME, GO Bonds, 5.75%,
10/15/09.............................. 276,410
100,000 Cape Elizabeth, ME, GO Bonds, 5.90%,
10/15/12.............................. 111,304
25,000 Cape Elizabeth, ME, GO Bonds, 5.90%,
10/15/14.............................. 27,826
100,000 Cumberland County, ME, UTGO Bonds,
6.50%, 2/1/03, P/R USG, 2/1/01 @
102................................... 107,101
250,000 Cumberland County, ME, UTGO Bonds,
5.25%, 2/1/07......................... 264,048
25,000 Ellsworth, ME, UTGO Bonds, 7.20%,
7/1/08................................ 30,188
250,000 Freeport, ME, UTGO Bonds, 7.25%,
9/1/04................................ 289,470
20,000 Freeport, ME, UTGO Bonds, 7.25%,
9/1/10................................ 25,057
</TABLE>
See Notes to Schedule of Investments. 14 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--LOCAL, CONTINUED
$ 40,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
Insured, 6.40%, 9/1/04................ $ 44,514
215,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
Insured, 6.60%, 9/1/06................ 240,632
50,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.65%, 9/1/07................ 56,041
70,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.65%, 9/1/08................ 78,457
35,000 Old Orchard Beach, ME, UTGO Bonds, MBIA
insured, 6.65%, 9/1/10................ 39,228
50,000 Portland, ME, GO Bonds, 12.10%,
7/1/99................................ 51,103
50,000 Portland, ME, GO Bonds, 10.50%,
11/1/99............................... 52,119
500,000 Portland, ME, GO Bonds, 6.20%, 4/1/05... 559,180
50,000 Portland, ME, GO Bonds, 12.60%,
11/1/05............................... 73,953
100,000 Portland, ME, GO Bonds, 7.25%,
12/1/05............................... 118,416
790,000 Portland, ME, GO Bonds, 5.30%,
6/13/13............................... 823,583
25,000 Portland, ME, GO Bonds, 6.50%, 4/1/14... 28,382
10,000 Rockland ME, GO bonds, 6.00%, 10/1/00... 10,347
25,000 Rockland ME, GO bonds, 6.00%, 10/1/01... 26,273
150,000 South Portland, ME, GO Bonds, 5.80%,
9/1/08................................ 169,311
40,000 South Portland, ME, GO Bonds, 5.80%,
9/1/11................................ 45,394
25,000 Westbrook, ME, UTGO Bonds, 6.75%,
11/15/04.............................. 28,544
75,000 Windham, ME, UTGO Bonds, 0.05%,
6/15/08............................... 50,865
130,000 Winslow, ME, GO Bonds, Crowe Rope
Industries Project, Series A, 5.50%,
3/1/07................................ 139,064
20,000 Winslow, ME, UTGO Bonds, AMBAC insured,
6.90%, 10/1/08 21,978
50,000 Winslow, ME, UTGO Bonds, SD, AMBAC
Insured, 7.00%,
10/1/10............................... 55,065
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
GENERAL OBLIGATION--LOCAL, CONTINUED
$ 25,000 Winthrop, ME, UTGO Bonds, 5.10%,
8/1/04................................ $ 26,388
25,000 Winthrop, ME, UTGO Bonds, 5.20%,
8/1/05................................ 26,612
25,000 Winthrop, ME, UTGO Bonds, 5.30%,
8/1/06................................ 26,835
25,000 Winthrop, ME, UTGO Bonds, 5.40%,
8/1/07................................ 27,077
250,000 Yarmouth, ME, GO Bonds, AMBAC insured,
5.25%, 11/15/09....................... 267,755
35,000 York, ME, SD, UTGO Bonds, AMBAC insured,
6.40%, 3/1/03......................... 37,525
-----------
5,737,415
-----------
GENERAL OBLIGATION--PUERTO RICO (7.2%)
1,040,000 Puerto Rico, GO Bonds, MBIA insured,
6.50%, 7/1/04......................... 1,169,012
525,000 Puerto Rico, GO Bonds, Series 93,
MBIA-IBC insured, 5.50%, 7/1/08....... 577,043
495,000 Puerto Rico Commonwealth, GO, MBIA
insured, 5.75%, 7/1/10................ 554,459
-----------
2,300,514
-----------
GENERAL OBLIGATION--STATE (1.9%)
100,000 Maine, UTGO Bonds, 8.50%, 3/1/00........ 104,780
100,000 Maine, UTGO Bonds, 7.50%, 12/15/00...... 106,839
50,000 Maine, UTGO Bonds, 8.00%, 5/1/01........ 54,430
90,000 Maine, UTGO Bonds, 6.40%, 7/1/02........ 97,408
25,000 Maine, UTGO Bonds, 7.50%, 12/15/02...... 28,232
100,000 Maine, UTGO Bonds, 6.50%, 7/1/03........ 110,518
100,000 Maine, UTGO Bonds, Highway Improvements,
8.00%, 5/1/02......................... 112,308
-----------
614,515
-----------
REVENUE--GUAM (9.5%)
800,000 Guam Government LO Highway RV, Series A,
FSA insured, 6.25%, 5/1/07............ 869,512
25,000 Guam Government LO Highway RV, Series 92
A, FSA insured, 5.60%, 5/1/00......... 25,645
</TABLE>
See Notes to Schedule of Investments. 15 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
REVENUE--GUAM, CONTINUED
$ 75,000 Guam Government Water System RV, CGIC
insured, 6.85%,
7/1/99................................ $ 75,698
1,895,000 Guam Power Authority RV, Series A, AMBAC
insured, 6.30%, 10/1/12............... 2,066,760
-----------
3,037,615
-----------
REVENUE--HEALTH & EDUCATION (19.0%)
25,000 Maine Educational Loan Authority,
Educational Loan RV, Supplemental
Education Loan Program, Series 92 A-1,
6.80%, 12/1/07........................ 26,606
60,000 Maine Educational Loan Authority,
Educational Loan RV, Supplemental
Education Loan Program, Series 92 A-1,
7.00%, 12/1/16........................ 63,611
20,000 Maine Educational Loan Authority,
Educational Loan RV, Supplemental
Education Loan Program, Series 92 A-2,
7.15%, 12/1/16........................ 21,267
25,000 Maine Educational Loan Authority, Series
A, Student Loan Refunding RV, 6.35%,
5/1/05................................ 25,938
45,000 Maine Educational Loan Authority,
Student Loan Refunding RV, 6.90%,
11/1/03............................... 47,241
140,000 Maine HEHFA RV, Cedar Nursing Home, FHA
insured, 7.90%, 8/1/32, P/R 2/1/00 @
102................................... 148,054
100,000 Maine HEHFA RV, Colby College Issue,
FGIC insured, 6.20%, 7/1/99........... 100,771
250,000 Maine HEHFA RV, Coves Edge Nursing Home,
10.00%, 8/1/20, P/R 8/1/00 @ 103...... 278,698
100,000 Maine HEHFA RV, FSA insured, 6.10%,
7/1/01................................ 105,131
55,000 Maine HEHFA RV, Kennebec Valley Medical
Center, FGIC insured, 7.00%, 7/1/15... 58,556
10,000 Maine HEHFA RV, Kennebec Valley Medical
Center, FGIC insured, 7.00%, 7/1/05... 10,647
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
REVENUE--HEALTH & EDUCATION, CONTINUED
$ 195,000 Maine HEHFA RV, Maine Medical Center,
ETM USG, 6.00%, 10/1/13............... $ 219,372
50,000 Maine HEHFA RV, Prerefunded Series A,
6.10%, 7/1/03......................... 54,487
175,000 Maine HEHFA RV, Prerefunded, Series A,
FSA insured, 5.50%, 7/1/07............ 189,228
415,000 Maine HEHFA RV, Saint Mary's General
Hospital, 8.50%, 7/1/09, P/R 7/1/99 @
102................................... 428,587
25,000 Maine HEHFA RV, Series A, 5.25%,
7/1/11................................ 26,337
550,000 Maine HEHFA RV, Series A, FSA insured,
5.25%, 7/1/10......................... 579,618
100,000 Maine HEHFA RV, Series B, FSA insured,
5.88%, 7/1/06......................... 106,637
450,000 Maine HEHFA RV, Series B, FSA insured,
5.55%, 7/1/08......................... 477,761
335,000 Maine HEHFA RV, Series B, MBIA insured,
5.00%, 7/1/10......................... 345,010
510,000 Maine HEHFA RV, Series D, FSA insured,
5.30%, 7/1/07......................... 539,978
25,000 Maine HEHFA RV, Southern Maine Medical
Center, AMBAC insured, 7.20%,
5/1/06................................ 26,480
15,000 Maine HEHFA RV, Southern Maine Medical
Center, AMBAC insured, 7.30%,
5/1/14................................ 15,881
100,000 Maine HEHFA RV, U/R Balance Series A,
6.10%, 7/1/03......................... 108,223
325,000 Maine HEHFA RV, U/R Balance, Series A,
FSA insured, 5.50%, 7/1/07............ 346,980
950,000 Maine Veterans' Homes Revenue Bonds,
6.80%, 10/1/05........................ 1,014,330
500,000 Puerto Rico, PBA, Guaranteed Public
Education and Health Facilities RV,
Series M, FSA insured, 5.70%,
7/1/09................................ 558,155
60,000 University of Maine System RV, 7.20%,
9/1/09, P/R USG,
9/1/99 @ 102.......................... 62,194
105,000 University of Maine System RV, 7.25%,
9/1/19, P/R USG,
9/1/99 @ 102.......................... 108,858
-----------
6,094,636
-----------
</TABLE>
See Notes to Schedule of Investments. 16 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
REVENUE--HOUSING (4.1%)
$ 40,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 88 D-5, 7.45%, 11/15/11........ $ 42,574
200,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 88 D-6, 7.25%, 11/15/19........ 210,286
5,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 89 A-1, 7.63%, 11/15/24........ 5,129
30,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 89 A-2. 7.30%, 11/15/16........ 30,870
110,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 90 A-5, Remarketed 5/13/93,
6.20%, 11/15/16....................... 115,111
185,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 92 C, 6.55%, 11/15/12.......... 193,993
50,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 93 A-1, 5.05%, 11/15/06........ 51,549
300,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 94 A-2, 5.20%, 11/15/08........ 308,716
250,000 Maine HSG AUTH RV, Mortgage Purchase,
Series 94 C-1, 6.20%, 11/15/07........ 263,630
50,000 Maine HSG AUTH RV, SFM Refunding RV,
Series 91-1, 6.90%, 11/1/07........... 52,692
25,000 Maine HSG AUTH RV, Series 91 A, FSA
insured, 7.40%, 11/15/22.............. 26,352
-----------
1,300,902
-----------
REVENUE--INDUSTRIAL (8.6%)
15,000 Bath, ME, Sewer Improvements RV, 7.40%,
12/1/06............................... 18,158
25,000 Bucksport, ME, Solid Waste Disposal RV,
Champion International Corp. Project,
6.25%, 5/1/10, remarketed 5/1/93...... 26,394
530,000 East Millinocket, ME, PC Revenue Bonds,
Great Northern Nekoosa Corp. Project,
ETM USG, 6.70%, 6/1/04................ 576,131
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
REVENUE--INDUSTRIAL, CONTINUED
$ 165,000 Kennebec, ME, Water District RV, 7.00%,
12/1/14, P/R USG, 12/1/01 @ 101.50.... $ 181,774
40,000 Kennebec, ME, Water District RV, 7.00%,
12/1/20, P/R USD, 12/1/01 @ 101.50.... 44,067
15,000 Kennebunk, ME, Sewer District RV Bonds,
7.10%, 1/1/06......................... 17,382
500,000 Maine Finance Authority RV, Boise
Cascade Corp. Project, 7.90%,
6/1/15................................ 526,060
1,250,000 Skowhegan ME, PCR Bonds, Scott Paper Co.
Project, 5.90%, 11/1/13............... 1,351,985
25,000 Wells Sanitation District, ME, Sewer RV,
6.75%, 3/1/00......................... 25,774
-----------
2,767,725
-----------
REVENUE--OTHER (0.1%)
10,000 Maine Court Facilities Authority Lease
Rental RV, 7.15%, 8/1/07, P/R USG,
8/1/00 @ 102.......................... 10,697
-----------
REVENUE--PUERTO RICO (17.6%)
15,000 Puerto Rico, Highway & Transportation
Authority RV, Series U, 5.88%,
7/1/99................................ 15,100
20,000 Puerto Rico, Industrial, Medical &
Environmental RV, Abbott Chemicals,
Inc. Project, 6.50%, 7/1/09........... 20,488
500,000 Puerto Rico, Industrial, Tourist,
Education, Medical & Environmental RV,
Series A, MBIA insured, 5.00%,
10/1/11............................... 521,570
300,000 Puerto Rico, Infrastructure Financing
Authority, U/R Balance RV, Series A,
7.60%, 7/1/00......................... 306,972
3,555,000 Puerto Rico, Public Finance Corp.,
Commonwealth Appropriations RV, Series
A, 5.38%, 6/1/18...................... 3,788,275
870,000 University of Puerto Rico RV, Series N,
MBIA insured, 6.25%, 6/1/04........... 968,006
-----------
5,620,411
-----------
REVENUE--TRANSPORTATION (3.1%)
180,000 Maine State Turnpike Authority RV, MBIA
insured, 6.00%, 7/1/11................ 200,761
</TABLE>
See Notes to Schedule of Investments. 17 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
MAINE MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
REVENUE--TRANSPORTATION, CONTINUED
$ 700,000 Maine State Turnpike Authority RV, MBIA
insured, 6.00%, 7/1/14................ $ 780,738
-----------
981,499
-----------
REVENUE--VIRGIN ISLANDS (6.0%)
80,000 Virgin Islands, HSG AUTH RV, SFM, GNMA
Mortgage-Backed, 6.00%, 3/1/07........ 83,029
785,000 Virgin Islands, PFA RV, Series 89 A,
7.30%, 10/1/18, P/R USG 10/1/00 @
101................................... 1,003,575
20,000 Virgin Islands, PFA RV, Series B, Coll
by USG, 7.25%, 10/1/07,
P/R 10/1/00 @ 101..................... 21,348
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
REVENUE--VIRGIN ISLANDS, CONTINUED
$ 40,000 Virgin Islands, PFA RV, Sub Lien Fund
Loan Notes, Series D, 6.00%,
10/1/05............................... $ 41,755
250,000 Virgin Islands, Water & Power Authority,
Electric System RV, 5.25%, 7/1/08..... 262,785
500,000 Virgin Islands, Water & Power Authority,
Electric System RV, 5.25%, 7/1/06..... 526,895
-----------
1,939,387
-----------
Total Municipal Bonds
(cost $30,433,145) 31,640,457
-----------
<CAPTION>
SHARES
- --------------------
<C> <S> <C>
SHORT-TERM HOLDINGS (1.1%)
352,075 Boston 1784 Tax Free Money Market Fund
(cost $352,075)....................... 352,075
-----------
Total Investments (100.0%)
(cost $30,785,220) $31,992,532
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 18 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ------------
<C> <S> <C>
MUNICIPAL BONDS (98.7%)
GENERAL OBLIGATION--BOND BANK (3.6%)
$ 5,000 New Hampshire Muni Bond Bank, Pinkerton
Academy Project, 5.25%, 6/1/07........ $ 5,278
25,000 New Hampshire Muni Bond Bank, Series 89
B, 6.70%, 7/15/04,
P/R USG 7/15/99 @ 102................. 25,753
25,000 New Hampshire Muni Bond Bank, Series 90
A, 6.90%, 1/15/05..................... 26,217
20,000 New Hampshire Muni Bond Bank, Series 90
D, 6.90%, 7/15/03..................... 21,287
25,000 New Hampshire Muni Bond Bank, Series 91
E, 6.90%, 8/15/06..................... 27,336
25,000 New Hampshire Muni Bond Bank, Series 91
K, 6.75%, 1/15/08,
P/R USG 1/15/01 @ 102................. 26,840
10,000 New Hampshire Muni Bond Bank, Series 92
D, State Guaranteed, 6.00%, 1/15/11... 10,937
50,000 New Hampshire Muni Bond Bank, Series 92
H, 6.35%, 7/15/06..................... 54,543
175,000 New Hampshire Muni Bond Bank, Series 92
H, 6.50%, 7/15/08..................... 191,702
50,000 New Hampshire Muni Bond Bank, Series 94
A, 5.15%, 11/1/08..................... 52,608
85,000 New Hampshire Muni Bond Bank, Series 94
C, State Guaranteed, 5.80%, 8/15/08... 93,180
------------
535,681
------------
GENERAL OBLIGATION--LOCAL (19.4%)
155,000 Bedford, NH, UTGO Bonds, 6.70%,
8/1/12................................ 169,676
225,000 Belknap County, NH, GO Bonds, MBIA
insured, 5.20%, 6/15/13............... 234,041
50,000 Concord, NH, GO Bonds, FGIC insured,
6.05%, 10/15/08....................... 55,533
100,000 Concord, NH, GO Bonds, SD, 4.70%,
10/15/10.............................. 104,030
100,000 Concord, NH, UTGO Bonds, MBIA insured,
5.00%, 1/15/09........................ 103,868
100,000 Concord, NH, UTGO Bonds, MBIA insured,
5.00%, 1/15/09........................ 104,447
50,000 Exeter, NH, UTGO Bonds, 5.10%,
6/15/05............................... 52,951
25,000 Exeter, NH, UTGO Bonds, 5.30%,
6/15/08............................... 26,951
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ------------
<C> <S> <C>
GENERAL OBLIGATION--LOCAL, CONTINUED
$ 140,000 Exeter, NH, UTGO Bonds, Sewer
Improvements, 6.25%, 1/15/09.......... $ 150,539
90,000 Farmington, NH, GO Bonds, SD, AMBAC
insured, 5.55%, 2/15/02............... 94,594
50,000 Franklin, NH, GO Bonds, MBIA insured,
5.20%, 10/1/07........................ 53,019
100,000 Goffstown, NH, GO Bonds, SD, AMBAC
insured, 5.25%, 8/15/11............... 104,307
25,000 Hudson, NH, Educational Facilities RV,
SD, Lot B, 7.30%, 12/15/06............ 30,108
20,000 Hudson, NH, Educational Facilities RV,
SD, Lot B, 7.30%, 12/15/08............ 24,717
45,000 Keene, NH, UTGO Bonds, 5.15%,
10/15/11.............................. 47,743
25,000 Lisbon, NH, UTGO Bonds, SD, 5.60%,
2/1/10................................ 26,280
50,000 Londonderry, NH, UTGO Bonds, 5.40%,
1/15/14............................... 52,233
250,000 Manchester, NH, UTGO Bonds, Public
Improvement Bonds, 5.50%, 11/1/12..... 264,668
15,000 Manchester, NH, UTGO Bonds, Series 93 A,
5.00%, 7/1/04......................... 15,801
250,000 Manchester, NH, UTGO Bonds, Series 93 A,
5.30%, 7/1/07......................... 264,927
20,000 Nashua, NH, UTGO Bonds, 5.70%,
7/15/07............................... 21,257
15,000 Nashua, NH, UTGO Bonds, 6.80%, 7/1/09... 16,333
100,000 Nashua, NH, UTGO Bonds, AMBAC insured,
5.35%, 7/15/06........................ 107,703
35,000 Nashua, NH, UTGO Bonds, FGIC insured,
5.25%, 11/2/09........................ 37,139
100,000 Nashua, NH, UTGO Bonds, Public
Improvement Bonds, 6.80%, 7/1/07...... 108,889
10,000 Nashua, NH, UTGO Bonds, Public
Improvement Bonds, 6.70%, 11/1/07..... 10,405
50,000 Oyster River, NH, GO Bonds, Cooperative
SD State Guaranteed, Lot A, 5.75%,
6/15/07............................... 54,552
</TABLE>
See Notes to Schedule of Investments. 19 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ------------
<C> <S> <C>
GENERAL OBLIGATION--LOCAL, CONTINUED
$ 100,000 Oyster River, NH, GO Bonds, Cooperative
SD State Guaranteed, Lot A, 5.85%,
6/15/08............................... $ 109,222
30,000 Salem, NH, GO Bonds, MBIA insured,
6.45%, 3/1/04......................... 31,941
400,000 Stratham, NH, GO Bonds, SD, AMBAC
insured, 5.10%, 1/15/08............... 426,964
------------
2,904,838
------------
GENERAL OBLIGATION--PUERTO RICO (0.8%)
110,000 Puerto Rico, GO Bonds, MBIA insured,
6.50%, 7/1/04......................... 123,646
------------
GENERAL OBLIGATION--STATE (7.3%)
10,000 New Hampshire, GO Bonds, 6.00%,
9/1/05................................ 11,079
350,000 New Hampshire, State Capital Improvement
GO Bonds, 5.50%, 12/1/06.............. 381,402
680,000 New Hampshire, State Capital Improvement
GO Bonds, 5.13%, 10/1/17.............. 691,356
------------
1,083,837
------------
REVENUE--GUAM (2.9%)
200,000 Guam Government LO Highway RV, Series 92
A, FSA insured, 6.25%, 5/1/07......... 217,378
200,000 Guam Power Authority RV, Series A, AMBAC
insured, 6.30%, 10/1/12............... 218,128
------------
435,506
------------
REVENUE--HEALTH & EDUCATION (22.3%)
15,000 Mascenic, NH, Regional SD #1, Lot C,
AMBAC insured, 7.20%, 12/15/07........ 18,277
250,000 New Hampshire, HEHFA RV, 6.00%,
10/1/13............................... 268,904
50,000 New Hampshire, HEHFA RV (Concord
Hospital Issue), AMBAC insured, 5.40%,
10/1/06............................... 53,843
35,000 New Hampshire, HEHFA RV (Elliot Hospital
of Manchester), 6.50%, 10/1/11........ 37,635
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ------------
<C> <S> <C>
REVENUE--HEALTH & EDUCATION, CONTINUED
$ 460,000 New Hampshire, HEHFA RV (Elliot Hospital
of Manchester), FGIC insured, 6.25%,
10/1/21............................... $ 493,046
100,000 New Hampshire, HEHFA RV (Exeter
Hospital), 5.25%, 10/1/00............. 102,381
50,000 New Hampshire, HEHFA RV (Exeter
Hospital/Healthcare Issue), 5.50%,
10/1/13............................... 52,885
255,000 New Hampshire, HEHFA RV (Franklin Pierce
College), Series 94, 5.50%, 10/1/04... 270,076
5,000 New Hampshire, HEHFA RV (Hitchcock
Clinic Issue), MBIA insured, 6.00%,
7/1/15................................ 5,349
1,000,000 New Hampshire, HEHFA RV (Kendal at
Hanover Issue), LOC, 5.80%, 10/1/14... 1,026,300
85,000 New Hampshire, HEHFA RV (Lakes Region
Hospital Association), 5.75%,
1/1/11................................ 91,099
15,000 New Hampshire, HEHFA RV (Mary Hitchcock
Memorial Hospital), 4.90%, 8/15/01.... 15,402
50,000 New Hampshire, HEHFA RV (Nashua Memorial
Hospital), 5.50%, 10/1/02............. 52,038
400,000 New Hampshire, HEHFA RV (River Woods at
Exeter), 9.00%, 3/1/23................ 489,672
125,000 New Hampshire, HEHFA RV (Rivier
College), 6.90%, 1/1/13............... 139,815
30,000 New Hampshire, HEHFA RV (University
System of New Hampshire), MBIA
insured, Series 92, 6.00%, 7/1/07..... 32,432
175,000 New Hampshire, HEHFA RV
(Wentworth-Douglass Hospital), 5.40%,
1/1/07................................ 185,479
------------
3,334,633
------------
REVENUE--HOUSING (7.4%)
475,000 New Hampshire, HSG AUTH RV, MFHR,
FHA/VA/RECD MTGS LOC, 5.60%, 7/1/03... 497,596
10,000 New Hampshire, HSG AUTH RV, SFM, 6.75%,
7/1/04................................ 10,438
</TABLE>
See Notes to Schedule of Investments. 20 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NEW HAMPSHIRE BOND FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ------------
<C> <S> <C>
REVENUE--HOUSING, CONTINUED
$ 85,000 New Hampshire, HSG AUTH RV, SFM, Series
A, 5.25%, 1/1/07...................... $ 87,175
95,000 New Hampshire, HSG AUTH RV, SFM, Series
B, 5.90%, 1/1/07...................... 99,034
85,000 New Hampshire, HSG AUTH RV, SFM, Series
B, 6.00%, 1/1/08...................... 88,180
95,000 New Hampshire, HSG AUTH RV, SFM, Series
B, 6.00%, 7/1/08...................... 98,713
125,000 New Hampshire, HSG AUTH RV, SFM, Series
SB, 4.85%, 1/1/05..................... 127,687
90,000 New Hampshire, HSG AUTH RV, SFM, Series
SB, 4.95%, 1/1/06..................... 92,056
------------
1,100,879
------------
REVENUE--INDUSTRIAL (0.1%)
10,000 New Hampshire, IDA Solid Waste Disposal
RV, Canal Electric Co. Project, FGIC
insured, 7.38%, 12/1/20............... 10,741
------------
REVENUE--OTHER (1.6%)
225,000 Manchester, NH, General Improvement RV,
Series B, MBIA insured, 5.00%,
1/2/09................................ 232,616
------------
REVENUE--PUERTO RICO (8.1%)
60,000 Puerto Rico, Industrial, Medical &
Enviromental RV (Abbott Chemicals,
Inc. Project), 6.50%, 7/1/09.......... 61,464
25,000 Puerto Rico, Infrastructure Financing
Authority RV, U/R Balance, Series 88
A, 7.75%, 7/1/08...................... 25,584
50,000 Puerto Rico, Highway & Transportation
RV, Series U, 5.88%, 7/1/99........... 50,333
775,000 Puerto Rico, PBA, Guaranteed Public
Education & Health Facilities RV,
Series 93 M, FSA insured, 5.70%,
7/1/09................................ 865,140
<CAPTION>
SECURITY
FACE AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ ------------
<C> <S> <C>
REVENUE--PUERTO RICO, CONTINUED
$ 45,000 Puerto Rico, PFA, Commonwealth
Appropriations RV, 5.38%, 6/1/18...... $ 47,953
145,000 University of Puerto Rico, RV, Series N,
MBIA insured, 6.25%, 6/1/04........... 161,334
------------
1,211,808
------------
REVENUE--TRANSPORTATION (13.4%)
1,175,000 New Hampshire State Turnpike System RV,
Series A, 6.75%, 11/1/11.............. 1,367,007
550,000 New Hampshire State Turnpike System RV,
Series A, FGIC insured, 7.00%,
11/1/06............................... 637,032
------------
2,004,039
------------
REVENUE--VIRGIN ISLANDS (11.8%)
325,000 Virgin Islands, PFA RV, Series 89 A,
7.30%, 10/1/18, P/R USG 10/1/00 @
101................................... 415,493
10,000 Virgin Islands, PFA RV, Series B, COLL
by USG, 7.25%, 10/1/07................ 10,674
1,170,000 Virgin Islands, PFA RV, Sub Lein Fund
Loan Notes, Series D, 6.00%,
10/1/05............................... 1,221,398
115,000 Virgin Islands, Water & Power Authority
Electric System RV, 5.25%, 7/1/06..... 121,187
------------
1,768,752
------------
Total Municipal Bonds (cost $14,279,150) 14,746,976
------------
SHORT-TERM HOLDINGS (1.3%)
200,000 New Hampshire, HEHFA, Revenue Muni
Demand Notes, FGIC insured, 3.00% V/R,
7/1/21 (a) (cost $200,000)............ 200,000
------------
Total Investments (cost $14,479,150) $14,946,976
------------
------------
</TABLE>
See Notes to Schedule of Investments. 21 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
INVESTORS GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCK (98.4%)
AMUSEMENT & RECREATION SERVICES (1.6%)
15,000 Walt Disney Co.......................... $ 466,875
-----------
BUSINESS SERVICES (10.2%)
8,000 Automatic Data Processing, Inc.......... 331,000
6,000 Computer Sciences Corp.(c).............. 331,125
15,000 Fiserv, Inc.(c)......................... 804,375
30,000 Ogden Corp.............................. 721,875
30,000 Oracle Corp.(c)......................... 791,250
-----------
2,979,625
-----------
CHEMICALS & ALLIED PRODUCTS (12.2%)
16,000 Abbott Laboratories..................... 749,000
16,000 Air Products & Chemicals................ 548,000
7,000 Du Pont (E.I.) de Nemours............... 406,437
8,000 Johnson & Johnson....................... 749,500
13,800 Merck & Company, Inc.................... 1,106,588
-----------
3,559,525
-----------
COMMUNICATIONS (8.4%)
10,000 AT&T Corp............................... 798,125
12,000 Airtouch Communications, Inc.(c)........ 1,159,500
10,200 SBC Communications, Inc................. 480,675
-----------
2,438,300
-----------
DEPOSITORY INSTITUTIONS (7.3%)
9,136 BankAmerica Corp........................ 645,230
20,000 First Indiana Bank...................... 380,000
22,000 Washington Federal, Inc................. 462,000
18,000 Wells Fargo Co.......................... 631,124
-----------
2,118,354
-----------
EATING & DRINKING PLACES (7.2%)
30,000 Tricon Global Restaurants, Inc.(c)...... 2,107,500
-----------
ELECTRIC, GAS & SANITARY SERVICES (1.4%)
15,000 SIGCORP, Inc............................ 410,625
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT (5.7%)
15,000 General Electric Co..................... 1,659,375
-----------
FOOD & KINDRED PRODUCTS (1.5%)
11,000 PepsiCo, Inc............................ 431,063
-----------
HOLDING & OTHER INVESTMENTS (1.3%)
157 Berkshire Hathaway Class B(c)........... 369,107
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (8.3%)
20,000 Compaq Computer Corp.................... 633,750
6,000 IBM Corp................................ 1,063,500
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT, CONTINUED
40,000 Quantum Corp.(c)........................ $ 720,000
-----------
2,417,250
-----------
INSURANCE CARRIERS (4.2%)
10,125 American International Group, Inc....... 1,221,328
-----------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS (2.2%)
12,000 Xerox Corp.............................. 640,500
-----------
MISCELLANEOUS RETAIL (2.2%)
20,000 Barnes & Noble, Inc.(c)................. 642,500
-----------
NONDEPOSITORY CREDIT INSTITUTIONS (2.4%)
10,000 Fannie Mae.............................. 692,500
-----------
OIL & GAS EXTRACTION (1.9%)
9,000 Schlumberger, Ltd....................... 541,688
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (4.2%)
10,000 Exxon Corp.............................. 705,625
6,000 Mobil Corp.............................. 528,000
-----------
1,233,625
-----------
PHARMACEUTICAL PREPARATIONS (3.1%)
14,000 American Home Products.................. 913,500
-----------
RUBBER & MISCELLANEOUS PLASTIC PRODUCTS (2.8%)
14,000 Nike, Inc., Class B..................... 807,625
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (3.0%)
10,000 Merrill Lynch & Co., Inc................ 884,375
-----------
TRANSPORTATION EQUIPMENT (5.5%)
9,352 Daimler Chrysler AG(c).................. 802,519
6,000 United Technologies Corp................ 812,625
-----------
1,615,144
-----------
WHOLESALE TRADE--NONDURABLE GOODS (1.8%)
8,000 Unilever N.V. -- N.Y. Shares............ 531,500
-----------
Total Common Stock
(cost $11,985,830) 28,681,884
-----------
SHORT-TERM HOLDINGS (1.6%)
467,027 Dreyfus Government Cash Management Fund
(cost $467,027)....................... 467,027
-----------
Total Investments (100.0%)
(cost $12,452,857) $29,148,911
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 22 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCK (67.0%)
AUTOMOTIVE SERVICES (2.0%)
17,500 Ryder System, Inc....................... $ 483,438
-----------
COMMUNICATIONS (5.3%)
7,200 AT&T Corp............................... 574,650
10,230 Telefonos De Mexico SA ADR.............. 670,064
-----------
1,244,714
-----------
DEPOSITORY INSTITUTIONS (2.8%)
6,450 Chase Manhattan Corp.................... 524,465
8,000 Peoples Heritage Financial Group........ 144,000
-----------
668,465
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT (2.9%)
19,990 Harris Corp............................. 572,214
1,000 Intel Corp.............................. 119,125
-----------
691,339
-----------
FINANCIAL SERVICES (2.6%)
9,499 Citigroup, Inc.......................... 606,749
-----------
FOOD STORES (2.2%)
11,000 Bestfoods, Inc.......................... 517,000
-----------
HEALTH SERVICES (2.3%)
57,690 Beverly Enterprises, Inc.(c)............ 295,661
13,350 Tenet Healthcare Corp.(c)............... 252,816
-----------
548,477
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (9.8%)
15,300 Compaq Computer Corp.................... 484,819
13,900 Dover Corp.............................. 456,962
8,200 Hewlett-Packard Co...................... 556,063
19,200 Quantum Corp.(c)........................ 345,600
29,560 Timken Co............................... 480,350
-----------
2,323,794
-----------
INSURANCE CARRIERS (4.9%)
12,800 Allstate Corp........................... 474,400
22,700 Conseco, Inc............................ 700,863
-----------
1,175,263
-----------
MEASURING, ANALYZING & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS (1.9%)
7,700 Litton Industries, Inc.(c).............. 442,750
-----------
NONDEPOSITORY CREDIT INSTITUTIONS (0.4%)
1,400 Fannie Mae.............................. 96,950
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
OIL & GAS EXTRACTION (6.5%)
50,975 ENSCO International, Inc................ $ 678,605
6,000 Schlumberger, Ltd....................... 361,125
18,200 USX-Marathon Group, Inc................. 500,500
-----------
1,540,230
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (5.1%)
6,475 Chevron Corp............................ 572,633
17,400 Sunoco, Inc............................. 627,487
-----------
1,200,120
-----------
PRIMARY METAL INDUSTRIES (1.5%)
15,000 USX-US Steel Group...................... 352,500
-----------
PRINTING & PUBLISHING (0.6%)
7,600 Banta Corp.............................. 144,400
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (2.4%)
6,450 Merrill Lynch & Co., Inc................ 570,422
-----------
TOBACCO PRODUCTS (2.4%)
15,900 Philip Morris Cos., Inc................. 559,481
-----------
TRANSPORTATION EQUIPMENT (6.6%)
31,700 Brunswick Corp.......................... 604,281
10,725 Dana Corp............................... 407,550
18,900 Fleetwood Enterprises, Inc.............. 541,013
-----------
1,552,844
-----------
WHOLESALE TRADE-DURABLE GOODS (1.9%)
30,000 Arrow Electronics, Inc.(c).............. 450,000
-----------
WHOLESALE TRADE-NONDURABLE GOODS (2.9%)
10,371 McKesson HBOC, Inc...................... 684,486
-----------
Total Common Stock
(cost $15,592,705) 15,853,422
-----------
<CAPTION>
FACE
AMOUNT
- --------------------
<C> <S> <C>
CORPORATE BONDS & NOTES (16.7%)
$ 200,000 Associates Corp. of North America,
6.10%, 1/15/05........................ 199,083
100,000 Avco Financial Services, 7.38%,
8/15/01............................... 103,416
150,000 Bear Stearns Cos., 6.63%, 1/15/04....... 151,849
200,000 Boeing Co., 6.35%, 6/15/03.............. 202,869
200,000 Chase Manhattan Corp., 6.25%, 1/15/06... 198,458
250,000 Crown Cork & Seal Co., 6.75%,
12/15/03.............................. 252,050
190,000 GMAC, 5.90%, 1/17/00.................... 190,733
</TABLE>
See Notes to Schedule of Investments. 23 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON BALANCED FUND
SCHEDULE OF INVESTMENTS (continued)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
$ 100,000 Household Finance Corp., 7.63%,
6/15/99............................... $ 100,451
400,000 Korea Development Bank, 7.25%,
5/15/06............................... 382,054
200,000 Lockheed Martin Corp., 6.85%, 5/15/01... 204,526
200,000 MCI Worldcom, Inc., 6.13%, 8/15/01...... 201,988
200,000 Morgan Stanley Dean Witter & Co., 5.75%,
2/15/01............................... 199,685
200,000 New York Telephone Co., 6.00%,
4/15/08............................... 202,204
65,000 PepsiCo, Inc., 6.25%, 9/1/99............ 65,306
177,000 Philip Morris Cos., Inc., 7.63%,
5/15/02............................... 185,657
300,000 Potomac Electric Power Co., 5.63%,
10/15/03.............................. 297,873
200,000 Sears Roebuck Acceptance Corp., 6.75%,
9/15/05............................... 204,896
300,000 Sony Corp., 6.13%, 3/4/03............... 303,817
100,000 Wachovia Corp., 7.00%, 12/15/99......... 101,116
100,000 WMX Technologies, Inc., 8.25%,
11/15/99.............................. 101,549
100,000 WMX Technologies, Inc., 6.70%, 5/1/01... 101,518
-----------
Total Corporate Bonds & Notes
(cost $3,965,804) 3,951,098
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS (3.4%)
FHLMC (1.7%)
200,000 Series 1491 GC, 6.90%, 11/15/21......... 203,620
200,000 Series 1678 C, 6.00%, 8/15/08........... 200,886
-----------
Total FHLMC 404,506
-----------
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
FNMA (1.7%)
$ 400,000 Series 1992-184 C, 7.00%, 10/25/21...... $ 410,228
-----------
Total Collarteralized Mortgage Obligations
(cost $798,125) 814,734
-----------
GOVERNMENT AGENCY NOTES (0.9%)
200,000 Federal Farm Credit, 6.25%, 10/30/02
(cost $210,500)....................... 204,651
-----------
MORTGAGE BACKED SECURITIES (1.7%)
GNMA (1.7%)
102,635 Pool 394795, 7.50%, 10/15/10............ 107,051
294,508 Pool 457827, 6.00%, 10/15/13............ 293,820
-----------
Total Mortgage Backed Securities
(cost $402,869) 400,871
-----------
U.S. TREASURY OBLIGATIONS (5.3%)
U.S. TREASURY BILLS (2.0%)
500,000 4.58%, 2/3/00........................... 481,220
-----------
U.S. TREASURY NOTES (3.3%)
125,000 6.38%, 6/30/99.......................... 125,703
400,000 5.38%, 7/31/00.......................... 402,126
250,000 4.25%, 11/15/03......................... 240,781
-----------
Total U.S. Treasury Notes 768,610
-----------
Total U.S. Treasury Obligations
(cost $1,249,443) 1,249,830
-----------
SHORT-TERM HOLDINGS (5.0%)
1,182,061 Dreyfus Government Cash Management
Fund.................................. 1,182,061
520 Merrimac Treasury Plus.................. 520
-----------
Total Short-Term Holdings
(cost $1,182,581) 1,182,581
-----------
Total Investments (100.0%)
(cost $23,402,027) $23,657,187
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 24 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
PAYSON VALUE FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCK (97.6%)
CHEMICALS & ALLIED PRODUCTS (10.1%)
12,000 Air Products & Chemicals................ $ 411,000
12,000 Bristol-Myers Squibb Co................. 771,750
12,000 Schering-Plough Corp.................... 663,750
-----------
1,846,500
-----------
COMMUNICATIONS (14.0%)
10,000 AT&T Corp............................... 798,124
8,000 GTE Corp................................ 484,000
12,000 MediaOne Group, Inc.(c)................. 762,000
8,000 Telefonos De Mexico SA ADR.............. 524,000
-----------
2,568,124
-----------
DEPOSITORY INSTITUTIONS (6.8%)
13,330 Wells Fargo Co.......................... 467,382
10,000 BankBoston Corp......................... 433,125
5,000 JSB Financial, Inc...................... 250,625
5,000 Peoples Heritage Financial Group........ 90,000
-----------
1,241,132
-----------
ELECTRIC, GAS, & SANITARY SERVICES (0.9%)
5,000 New Century Energies, Inc............... 170,313
-----------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER
EQUIPMENT (9.8%)
10,000 Harris Corp............................. 286,250
6,000 Intel................................... 714,750
8,000 Texas Instruments, Inc.................. 794,000
-----------
1,795,000
-----------
FINANCIAL SERVICES (3.8%)
10,999 Citigroup, Inc.......................... 702,561
-----------
FOOD STORES (5.2%)
8,000 Bestfoods, Inc.......................... 376,000
30,000 Ruddick Corp............................ 585,000
-----------
961,000
-----------
HEALTH SERVICES (3.1%)
35,000 Beverly Enterprises, Inc.(c)............ 179,375
20,000 Tenet Healthcare Corp.(c)............... 378,750
-----------
558,125
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT (6.7%)
15,000 Compaq Computer Corp.................... 475,313
10,000 Cooper Cameron Corp..................... 338,750
25,000 Timken Co............................... 406,250
-----------
1,220,313
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ------------------------------------------------------------ -----------
<C> <S> <C>
INSURANCE CARRIERS (2.3%)
8,000 American Bankers Insurance.............. $ 416,000
-----------
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL &
OPTICAL GOODS (2.5%)
8,000 Litton Industries, Inc.(c).............. 460,000
-----------
MISCELLANEOUS RETAIL (3.0%)
16,000 TJX Co., Inc............................ 544,000
-----------
OIL & GAS EXTRACTION (2.2%)
30,000 ENSCO International, Inc................ 399,375
-----------
PAPER & ALLIED PRODUCTS (3.5%)
17,000 Willamette Industries, Inc.............. 641,750
-----------
PETROLEUM REFINING & RELATED INDUSTRIES (7.6%)
4,000 Chevron Corp............................ 353,750
6,000 Mobil Corp.............................. 528,000
11,000 Phillips Petroleum Co................... 519,750
-----------
1,401,500
-----------
PRIMARY METAL INDUSTRIES (1.3%)
10,000 USX-US Steel Group...................... 235,000
-----------
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS (3.8%)
12,000 Nike, Inc. Class B...................... 692,250
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES (4.5%)
9,000 Edwards (A.G.), Inc..................... 294,188
6,000 Merrill Lynch & Co., Inc................ 530,625
-----------
824,813
-----------
TOBACCO PRODUCTS (2.3%)
12,000 Philip Morris Cos., Inc................. 422,250
-----------
TRANSPORTATION EQUIPMENT (4.2%)
3,741 Daimler Chrysler (A.G.)(c).............. 321,025
12,000 Dana Corp............................... 456,000
-----------
777,025
-----------
Total Common Stock
(cost $12,946,933) 17,877,031
-----------
SHORT-TERM HOLDINGS (2.4%)
446,678 Dreyfus Government Cash Management Fund
(cost $446,678)....................... 446,678
-----------
Total Investments (100.0%)
(cost $13,393,611) $18,323,709
-----------
-----------
</TABLE>
See Notes to Schedule of Investments. 25 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
(a) Certain variable rate securities are deemed to have a maturity remaining
until the next readjustment of the interest rate or the longer of the demand
period or readjustment. The interest rates shown reflect the rate in effect
on March 31, 1999.
(b) Securities that may be resold to "qualified institutional buyers" under rule
144A or securities offered pursuant to 4(2) of the Securities Act of 1933,
as amended.
(c) Non-income producing securities.
<TABLE>
<S> <C>
ACA American Capital Assets
ADR American Depositary Receipts
AMBAC American Municipal Bond Assurance Corporation
CGIC Capital Guaranty Insurance Company
COLL Collateralized
CP Commercial Paper
EDA Economic Development Authority
ETM Escrowed to Maturity
FGIC Financial Guaranty Insurance Company
FHA Federal Housing Authority
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Fannie Mae
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
HEFA Higher Education Facilities Authority
HEHFA Higher Education & Health Facilities Authority
HFA Housing Finance Authority
HSG AUTH State Housing Authority
IBC Insured Bond Certification
IDA Industrial Development Authority
LO Limited Obligation
LOC Letter of Credit
LTGO Limited Tax General Obligation
MBIA Municipal Bond Insurance Association
MFHR Multi-Family Housing Revenue
MTGS Mortgages
Muni Municipal
NBD National Bank Detroit
P/R Prerefunded
PBA Public Building Authority
PCR Pollution Control Revenue
PFA Public Finance Authority
RECD Royal Economic & Community Development
RV Revenue Bonds
RTC Resolution Trust Company
SD School District
SFM Single Family Mortgage
VA Veterans Administration
V/R Variable Rate
U/R Unrefunded
USG U.S. Governments
UTGO Unlimited Tax General Obligation
</TABLE>
See Notes to Financial Statements. 26 FORUM FUNDS-Registered Trademark-
<PAGE>
(This page has been left blank intentionally.)
FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE
INVESTORS INVESTORS TAXSAVER MUNICIPAL
HIGH GRADE BOND BOND BOND
BOND FUND FUND FUND FUND
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost.......... $ 35,255,133 $68,006,041 $35,939,935 $30,785,220
Net unrealized appreciation
(depreciation).............. 139,998 (453,631) 988,248 1,207,312
------------- ----------- ----------- -----------
Total investments at
value..................... 35,395,131 67,552,410 36,928,183 31,992,532
Interest, dividends and other
receivables................... 569,567 1,163,606 646,618 609,875
Receivable for securities
sold.......................... -- 4,314,333 -- --
Receivable for fund shares
sold.......................... -- 1,064 -- 122,612
Organization costs, net of
amortization (Note 2)......... 4,087 -- -- --
------------- ----------- ----------- -----------
Total assets....................... 35,968,785 73,031,413 37,574,801 32,725,019
------------- ----------- ----------- -----------
LIABILITIES:
Dividends payable.............. 165,605 390,241 102,436 27,744
Payable for securities
purchased..................... -- 2,028,067 -- --
Payable to adviser (Note 3).... 12,169 24,054 12,826 11,022
Payable for fund shares
redeemed...................... -- -- -- 9,610
Accrued expenses and other
liabilities................... 37,302 143,514 12,360 17,397
------------- ----------- ----------- -----------
Total liabilities.................. 215,076 2,585,876 127,622 65,773
------------- ----------- ----------- -----------
NET ASSETS......................... $ 35,753,709 $70,445,537 $37,447,179 $32,659,246
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
COMPONENTS OF NET ASSETS:
Paid in capital................ $ 35,420,587 $70,545,021 $36,360,469 $31,430,529
Undistributed net investment
income........................ -- -- 8,267 --
Unrealized appreciation
(depreciation) on
investments................... 139,998 (453,631) 988,248 1,207,312
Accumulated net realized
gain.......................... 193,124 354,147 90,195 21,405
------------- ----------- ----------- -----------
NET ASSETS......................... $ 35,753,709 $70,445,537 $37,447,179 $32,659,246
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
SHARES OF BENEFICIAL INTEREST...... 3,602,945 6,827,259 3,529,978 2,950,414
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE................... $ 9.92 $ 10.32 $ 10.61 $ 11.07
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
OFFERING PRICE PER SHARE (NAV
DIVIDED BY (1 - MAXIMUM SALES
LOAD)............................. $ 10.31 $ 10.72 $ 11.02 $ 11.35
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
MAXIMUM SALES LOAD................. 3.75% 3.75% 3.75% 2.50%
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
</TABLE>
See Notes to Financial Statements. 28 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW HAMPSHIRE INVESTORS PAYSON PAYSON
BOND GROWTH BALANCED VALUE
FUND FUND FUND FUND
-------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost.......... $ 14,479,150 $12,452,857 $23,402,027 $13,393,611
Net unrealized
appreciation................ 467,826 16,696,054 255,160 4,930,098
-------------- ----------- ----------- -----------
Total investments at
value..................... 14,946,976 29,148,911 23,657,187 18,323,709
Cash........................... 5,503 -- -- --
Interest, dividends and other
receivables................... 285,592 33,305 119,623 28,737
Receivable for securities
sold.......................... -- -- 374,204 --
Receivable for fund shares
sold.......................... -- -- 1,662 4,069
Organization costs, net of
amortization (Note 2)......... -- 11,298 -- --
-------------- ----------- ----------- -----------
Total assets....................... 15,238,071 29,193,514 24,152,676 18,356,515
-------------- ----------- ----------- -----------
LIABILITIES:
Dividends payable.............. 3,115 7,521 53,469 4,296
Payable for securities
purchased..................... -- -- 806,204 --
Payable to adviser (Note 3).... 5,161 16,221 -- --
Payable to administrator (Note
3)............................ -- -- 17,467 27,455
Payable for fund shares
redeemed...................... -- -- 4,782 3,690
Accrued expenses and other
liabilities................... 2,581 63,179 81,681 67,718
-------------- ----------- ----------- -----------
Total liabilities.................. 10,857 86,921 963,603 103,159
-------------- ----------- ----------- -----------
NET ASSETS......................... $ 15,227,214 $29,106,593 $23,189,073 $18,253,356
-------------- ----------- ----------- -----------
-------------- ----------- ----------- -----------
COMPONENTS OF NET ASSETS:
Paid in capital................ $ 14,761,036 $11,251,508 $22,517,463 $12,749,663
Undistributed net investment
income........................ 489 107 -- --
Unrealized appreciation on
investments................... 467,826 16,696,054 255,160 4,930,098
Accumulated net realized gain
(loss)........................ (2,137 ) 1,158,924 416,450 573,595
-------------- ----------- ----------- -----------
NET ASSETS......................... $ 15,227,214 $29,106,593 $23,189,073 $18,253,356
-------------- ----------- ----------- -----------
-------------- ----------- ----------- -----------
SHARES OF BENEFICIAL INTEREST...... 1,410,478 2,508,416 1,857,478 945,585
-------------- ----------- ----------- -----------
-------------- ----------- ----------- -----------
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE................... $ 10.80 $ 11.60 $ 12.48 $ 19.30
-------------- ----------- ----------- -----------
-------------- ----------- ----------- -----------
OFFERING PRICE PER SHARE (NAV
DIVIDED BY (1 - MAXIMUM SALES
LOAD)............................. $ 11.08 $ 12.08 $ 13.00 $ 20.10
-------------- ----------- ----------- -----------
-------------- ----------- ----------- -----------
MAXIMUM SALES LOAD................. 2.50% 4.00% 4.00% 4.00%
-------------- ----------- ----------- -----------
-------------- ----------- ----------- -----------
</TABLE>
See Notes to Financial Statements. 29 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTORS MAINE
HIGH GRADE INVESTORS TAXSAVER MUNICIPAL
BOND FUND BOND FUND BOND FUND BOND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income...... $2,240,472 $5,437,642 $2,002,923 $1,504,520
Dividend income...... -- 325,374 -- --
----------- ----------- ----------- -----------
Total investment
income.................. 2,240,472 5,763,016 2,002,923 1,504,520
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory
(Note 3)............ 140,442 328,113 157,824 119,844
Administrative (Note
3).................. 70,221 164,056 78,912 59,922
Transfer agency (Note
3).................. 99,845 218,175 111,354 96,618
Custody.............. 8,150 19,728 9,915 7,268
Accounting (Note
3).................. 40,000 40,000 38,000 48,000
Audit................ 14,500 20,000 17,000 17,500
Legal................ 3,381 10,609 3,556 9,047
Trustees............. 2,128 5,185 2,407 1,780
Amortization of
organization costs
(Note 2)............ 1,031 -- -- --
Miscellaneous........ 12,409 29,334 19,826 36,679
----------- ----------- ----------- -----------
Total expenses........... 392,107 835,200 438,794 396,658
Expenses reimbursed and
fees waived (Note 4).... (146,313) (260,912) (202,062) (216,903)
----------- ----------- ----------- -----------
Net expenses............. 245,794 574,288 236,732 179,755
----------- ----------- ----------- -----------
NET INVESTMENT INCOME.... 1,994,678 5,188,728 1,766,191 1,324,765
----------- ----------- ----------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on
investments sold.... 435,100 432,794 344,151 131,277
Net change in
unrealized
appreciation
(depreciation) on
investments......... (355,589) (1,925,913) (212,501) 43,413
----------- ----------- ----------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS.......... 79,511 (1,493,119) 131,650 174,690
----------- ----------- ----------- -----------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS.............. $2,074,189 $3,695,609 $1,897,841 $1,499,455
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
See Notes to Financial Statements. 30 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEAR ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW HAMPSHIRE INVESTORS PAYSON PAYSON VALUE
BOND FUND GROWTH FUND BALANCED FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $ 695,131 $ 88,365 $ 432,783 $ 24,042
Dividend income........... -- 424,524 320,246 310,028
------------- ------------- ------------- -------------
Total investment income....... 695,131 512,889 753,029 334,070
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory (Note
3)....................... 57,031 207,130 140,477 148,850
Administrative (Note 3)... 28,516 63,732 46,826 37,213
Transfer agency (Note
3)....................... 50,028 91,741 77,383 65,203
Custody................... 3,555 8,377 7,681 5,611
Accounting (Note 3)....... 37,000 37,000 38,000 36,000
Audit..................... 15,500 17,000 15,000 15,000
Legal..................... 3,141 14,207 3,193 2,586
Trustees.................. 833 2,031 1,421 1,169
Amortization of
organization costs (Note
2)....................... -- 3,035 -- --
Miscellaneous............. 21,962 13,820 18,724 14,551
------------- ------------- ------------- -------------
Total expenses................ 217,566 458,073 348,705 326,183
Expenses reimbursed and fees
waived (Note 4)............. (132,026) (107,764) (79,449) (56,477)
------------- ------------- ------------- -------------
Net expenses.................. 85,540 350,309 269,256 269,706
------------- ------------- ------------- -------------
NET INVESTMENT INCOME......... 609,591 162,580 483,773 64,364
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on
investments sold......... 66,571 2,117,054 518,177 781,466
Net change in unrealized
appreciation
(depreciation) on
investments.............. 78,878 (611,134) (2,942,947) (1,860,529)
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS................. 145,449 1,505,920 (2,424,770) (1,079,063)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................. $ 755,040 $ 1,668,500 $ (1,940,997) $ (1,014,699)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See Notes to Financial Statements. 31 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED MARCH 31, 1998 AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTORS HIGH GRADE BOND INVESTORS BOND FUND TAXSAVER BOND FUND
FUND
---------------------------- ---------------------------- ----------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
-------------- ----------- -------------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS--MARCH 31,
1997................... $ -- $ 22,190,244 $ 17,757,007
- ------------------------- -------------- -------------- --------------
OPERATIONS:
Net investment
income................ 83,022 2,799,300 1,262,855
Net realized gain on
investments sold...... -- 407,860 431,531
Net change in
unrealized
appreciation
(depreciation) on
investments (Note
7).................... (120,183) 619,147 12,927
-------------- -------------- --------------
Net increase (decrease)
in net assets
resulting from
operations............ (37,161) 3,826,307 1,707,313
-------------- -------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income................ (83,022) (2,799,300) (1,254,588)
Net realized gain on
investments........... -- -- (10,731)
-------------- -------------- --------------
Total distributions
to shareholders..... (83,022) (2,799,300) (1,265,319)
-------------- -------------- --------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares......... 142,651 14,291 25,408,790 2,422,519 5,953,473 558,559
Transactions due to
acquisition (Note
7).................... 34,168,816 3,416,882 45,203,440 4,284,687 19,211,589 1,780,499
Reinvestment of
distributions......... -- -- 243,656 23,408 351,873 32,851
Redemption of shares... (154,387) (15,443) (8,475,106) (811,636) (4,512,629) (419,873)
-------------- ----------- -------------- ----------- -------------- -----------
Net increase from
capital
transactions.......... 34,157,080 3,415,730 62,380,780 5,918,978 21,004,306 1,952,036
-------------- ----------- -------------- ----------- -------------- -----------
----------- ----------- -----------
Net increase in net
assets................ 34,036,897 63,407,787 21,446,300
-------------- -------------- --------------
NET ASSETS--MARCH 31,
1998
- -------------------------
(Including line (A))... 34,036,897 85,598,031 39,203,307
-------------- -------------- --------------
OPERATIONS:
Net investment
income................ 1,994,678 5,188,728 1,766,191
Net realized gain on
investments sold...... 435,100 432,794 344,151
Net change in
unrealized
appreciation
(depreciation) on
investments........... (355,589) (1,925,913) (212,501)
-------------- -------------- --------------
Net increase in net
assets resulting from
operations............ 2,074,189 3,695,609 1,897,841
-------------- -------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income................ (1,994,678) (5,188,728) (1,766,191)
Net realized gain on
investments........... (241,976) (345,772) (670,152)
-------------- -------------- --------------
Total distributions to
shareholders.......... (2,236,654) (5,534,500) (2,436,343)
-------------- -------------- --------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares......... 4,773,805 474,584 10,233,451 968,455 6,929,842 643,641
Reinvestment of
distributions......... 7,098 705 1,009,827 95,802 955,881 88,946
Redemption of shares... (2,901,626) (288,074) (24,556,881) (2,334,616) (9,103,349) (847,842)
-------------- ----------- -------------- ----------- -------------- -----------
Net increase (decrease)
from capital
transactions.......... 1,879,277 187,215 (13,313,603) (1,270,359) (1,217,626) (115,255)
-------------- ----------- -------------- ----------- -------------- -----------
----------- ----------- -----------
Net increase (decrease)
in net assets......... 1,716,812 (15,152,494) (1,756,128)
-------------- -------------- --------------
NET ASSETS--MARCH 31,
1999
- -------------------------
(Including line (B))... $ 35,753,709 $ 70,445,537 $ 37,447,179
-------------- -------------- --------------
-------------- -------------- --------------
(A) Accumulated
undistributed
(distribution in
excess of) net
investment income,
March 31, 1998....... $ -- $ (4,904) $ 8,267
-------------- -------------- --------------
-------------- -------------- --------------
(B) Accumulated
undistributed
(distribution in
excess of) net
investment income,
March 31, 1999....... $ -- $ -- $ 8,267
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
See Notes to Financial Statements. 32 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED MARCH 31, 1998 AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAINE MUNICIPAL BOND FUND NEW HAMPSHIRE BOND FUND INVESTORS GROWTH FUND
-------------------------- -------------------------- ---------------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
-------------- --------- -------------- --------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS--MARCH 31, 1997 $ 25,827,495 $ 8,690,680 $ --
- -------------------------- -------------- -------------- --------------
OPERATIONS:
Net investment income... 1,249,323 486,791 87,832
Net realized gain on
investments sold....... 85,991 28,990 --
Net change in unrealized
appreciation on
investments (Note 7)... 692,888 381,519 3,816,203
-------------- -------------- --------------
Net increase in net
assets resulting from
operations............. 2,028,202 897,300 3,904,035
-------------- -------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income... (1,249,323) (486,791) --
Net realized gain on
investments............ (15,537) (3,158) --
-------------- -------------- --------------
Total distributions to
shareholders........... (1,264,860) (489,949) --
-------------- -------------- --------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares.......... 4,686,863 427,434 4,626,698 440,871 4,277,148 410,190
Transactions due to
acquisition (Note 7)... -- -- -- -- 26,936,473 2,693,647
Reinvestment of
distributions.......... 926,235 84,744 450,170 42,708 -- --
Redemption of shares.... (4,007,882) (366,259) (1,266,972) (124,158) (1,218,718) (116,800)
-------------- --------- -------------- --------- -------------- ----------
Net increase from
capital transactions... 1,605,216 145,919 3,809,896 359,421 29,994,903 2,987,037
-------------- --------- -------------- --------- -------------- ----------
--------- --------- ----------
Net increase in net
assets................. 2,368,558 4,217,247 33,898,938
-------------- -------------- --------------
NET ASSETS--MARCH 31, 1998
- --------------------------
(Including line (A)).... 28,196,053 12,907,927 33,898,938
-------------- -------------- --------------
OPERATIONS:
Net investment income... 1,324,765 609,591 162,580
Net realized gain on
investments sold....... 131,277 66,571 2,117,054
Net change in unrealized
appreciation
(depreciation) on
investments............ 43,413 78,878 (611,134)
-------------- -------------- --------------
Net increase in net
assets resulting from
operations............. 1,499,455 755,040 1,668,500
-------------- -------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income... (1,324,765) (609,591) (250,935)
Net realized gain on
investments............ (139,593) (80,795) (958,130)
-------------- -------------- --------------
Total distributions to
shareholders........... (1,464,358) (690,386) (1,209,065)
-------------- -------------- --------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares.......... 8,330,979 749,695 3,245,202 299,466 3,186,657 288,754
Reinvestment of
distributions.......... 1,110,210 99,752 655,830 60,443 957,833 90,618
Redemption of shares.... (5,013,093) (451,679) (1,646,399) (151,894) (9,396,270) (857,993)
-------------- --------- -------------- --------- -------------- ----------
Net increase (decrease)
from capital
transactions........... 4,428,096 397,768 2,254,633 208,015 (5,251,780) (478,621)
-------------- --------- -------------- --------- -------------- ----------
--------- --------- ----------
Net increase (decrease)
in net assets.......... 4,463,193 2,319,287 (4,792,345)
-------------- -------------- --------------
NET ASSETS--MARCH 31, 1999
- --------------------------
(Including line (B)).... $ 32,659,246 $ 15,227,214 $ 29,106,593
-------------- -------------- --------------
-------------- -------------- --------------
(A) Accumulated
undistributed
(distribution in
excess of) net
investment income,
March 31, 1998........ $ -- $ 489 $ 88,462
-------------- -------------- --------------
-------------- -------------- --------------
(B) Accumulated
undistributed
(distribution in
excess of) net
investment income,
March 31, 1999........ $ -- $ 489 $ 107
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
See Notes to Financial Statements. 33 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE YEARS ENDED MARCH 31, 1998 AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAYSON BALANCED FUND PAYSON VALUE FUND
--------------------------- ---------------------------
AMOUNT SHARES AMOUNT SHARES
-------------- ---------- -------------- ----------
<S> <C> <C> <C> <C>
NET ASSETS--MARCH 31,
1997................... $ 18,163,143 $ 13,108,968
- ------------------------- -------------- --------------
OPERATIONS:
Net investment
income................ 566,112 101,763
Net realized gain on
investments sold...... 3,327,732 1,827,572
Net change in
unrealized
appreciation on
investments........... 1,901,486 4,127,867
-------------- --------------
Net increase in net
assets resulting from
operations............ 5,795,330 6,057,202
-------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income................ (566,112) (101,763)
Net realized gain on
investments........... (2,798,475) (1,140,141)
-------------- --------------
Total distributions to
shareholders.......... (3,364,587) (1,241,904)
-------------- --------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares......... 3,548,584 245,496 3,200,541 167,428
Reinvestment of
distributions......... 2,130,618 155,750 737,950 39,454
Redemption of shares... (1,833,253) (124,233) (1,944,400) (101,877)
-------------- ---------- -------------- ----------
Net increase from
capital
transactions.......... 3,845,949 277,013 1,994,091 105,005
-------------- ---------- -------------- ----------
---------- ----------
Net increase in net
assets................ 6,276,692 6,809,389
-------------- --------------
NET ASSETS--MARCH 31,
1998
- -------------------------
(Including line (A))... 24,439,835 19,918,357
-------------- --------------
OPERATIONS:
Net investment
income................ 483,773 64,364
Net realized gain on
investments sold...... 518,177 781,466
Net change in
unrealized
appreciation
(depreciation) on
investments........... (2,942,947) (1,860,529)
-------------- --------------
Net increase (decrease)
in net assets
resulting from
operations............ (1,940,997) (1,014,699)
-------------- --------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
(Note 9).............. (479,543) (48,604)
Net realized gain on
investments (Note
9).................... (1,489,464) (1,152,328)
-------------- --------------
Total distributions to
shareholders.......... (1,969,007) (1,200,932)
-------------- --------------
CAPITAL SHARE
TRANSACTIONS:
Sale of shares......... 4,382,937 336,775 3,053,741 155,011
Reinvestment of
distributions......... 1,354,224 109,002 721,359 40,271
Redemption of shares... (3,077,919) (241,118) (3,224,470) (168,743)
-------------- ---------- -------------- ----------
Net increase from
capital
transactions.......... 2,659,242 204,659 550,630 26,539
-------------- ---------- -------------- ----------
---------- ----------
Net increase (decrease)
in net assets......... (1,250,762) (1,665,001)
-------------- --------------
NET ASSETS--MARCH 31,
1999
- -------------------------
(Including line (B))... $ 23,189,073 $ 18,253,356
-------------- --------------
-------------- --------------
(A) Accumulated
undistributed
(distribution in
excess of) net
investment income,
March 31, 1998....... $ (3,069) $ (15,760)
-------------- --------------
-------------- --------------
(B) Accumulated
undistributed
(distribution in
excess of) net
investment income,
March 31, 1999....... $ -- $ --
-------------- --------------
-------------- --------------
</TABLE>
See Notes to Financial Statements. 34 FORUM FUNDS-Registered Trademark-
<PAGE>
(This page has been left blank intentionally.)
FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS ENDING
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET NET ASSET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT VALUE PER
SHARE (LOSS) INVESTMENTS INCOME GAINS SHARE
--------- ---------- -------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTORS HIGH GRADE BOND FUND
- --------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... $ 9.96 $ 0.57 $ 0.03 $(0.57) $(0.07) $ 9.92
March 16, 1998(a) to March 31, 1998..... 10.00 0.02 (0.04) (0.02) -- 9.96
INVESTORS BOND FUND
- --------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 10.57 0.67 (0.21) (0.67) (0.04) 10.32
April 1, 1997 to March 31, 1998......... 10.19 0.71 0.38 (0.71) -- 10.57
April 1, 1996 to March 31, 1997......... 10.21 0.71 -- (0.71) (0.02) 10.19
April 1, 1995 to March 31, 1996......... 10.00 0.74 0.21 (0.74) -- 10.21
April 1, 1994 to March 31, 1995......... 10.38 0.82 (0.38) (0.82) -- 10.00
TAXSAVER BOND FUND
- --------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 10.75 0.48 0.04 (0.48) (0.18) 10.61
April 1, 1997 to March 31, 1998......... 10.49 0.53 0.27 (0.53) (0.01) 10.75
April 1, 1996 to March 31, 1997......... 10.57 0.56 (0.03) (0.56) (0.05) 10.49
April 1, 1995 to March 31, 1996......... 10.39 0.57 0.18 (0.57) -- 10.57
April 1, 1994 to March 31, 1995......... 10.35 0.57 0.04 (0.57) -- 10.39
MAINE MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 11.05 0.49 0.07 (0.49) (0.05) 11.07
April 1, 1997 to March 31, 1998......... 10.73 0.51 0.33 (0.51) (0.01) 11.05
April 1, 1996 to March 31, 1997......... 10.72 0.51 0.01 (0.51) -- 10.73
April 1, 1995 to March 31, 1996......... 10.47 0.51 0.25 (0.51) -- 10.72
April 1, 1994 to March 31, 1995......... 10.37 0.52 0.11 (0.52) (0.01) 10.47
(a) Date of commencement of operations.
(b) Total return calculations do not include sales charge.
(c) Annualized.
</TABLE>
See Notes to Financial Statements. 36 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF THE FUNDS
OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS NET
------------------------------------- ASSETS AT
NET END OF
INVESTMENT PORTFOLIO PERIOD
INCOME NET GROSS TOTAL TURNOVER (000'S
(LOSS) EXPENSES EXPENSES RETURN(b) RATE OMITTED)
--------- ---------- -------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 5.68% 0.70% 1.12% 6.12% 172.60% $35,754
March 16, 1998(a) to March 31, 1998..... 5.56%(c) 0.70%(c) 3.00%(c) (0.16%) -- 34,037
- ----------------------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 6.33% 0.70% 1.02% 4.45% 98.36% 70,446
April 1, 1997 to March 31, 1998......... 6.52% 0.70% 1.22% 10.98% 116.65% 85,598
April 1, 1996 to March 31, 1997......... 6.94% 0.70% 1.45% 7.18% 79.42% 22,190
April 1, 1995 to March 31, 1996......... 7.29% 0.43% 1.36% 9.84% 42.89% 25,676
April 1, 1994 to March 31, 1995......... 8.19% 0.75% 1.33% 4.55% 48.17% 25,890
- ----------------------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 4.48% 0.60% 1.11% 4.95% 61.60% 37,447
April 1, 1997 to March 31, 1998......... 4.95% 0.60% 1.36% 7.75% 92.87% 39,203
April 1, 1996 to March 31, 1997......... 5.28% 0.60% 1.53% 5.15% 34.19% 17,757
April 1, 1995 to March 31, 1996......... 5.35% 0.60% 1.48% 7.36% 61.61% 17,915
April 1, 1994 to March 31, 1995......... 5.62% 0.60% 1.45% 6.18% 63.85% 16,018
- ----------------------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 4.42% 0.60% 1.32% 5.19% 28.61% 32,659
April 1, 1997 to March 31, 1998......... 4.65% 0.60% 1.48% 7.94% 16.34% 28,196
April 1, 1996 to March 31, 1997......... 4.77% 0.60% 1.56% 4.98% 21.18% 25,827
April 1, 1995 to March 31, 1996......... 4.73% 0.60% 1.48% 7.34% 34.07% 26,044
April 1, 1994 to March 31, 1995......... 5.08% 0.50% 1.40% 6.31% 31.55% 25,525
</TABLE>
See Notes to Financial Statements. 37 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS ENDING
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET NET ASSET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT VALUE PER
SHARE (LOSS) INVESTMENTS INCOME GAINS SHARE
--------- ---------- -------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
NEW HAMPSHIRE BOND FUND
- --------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... $10.73 $ 0.46 $ 0.13 $(0.46) $(0.06) $10.80
April 1, 1997 to March 31, 1998......... 10.31 0.47 0.43 (0.48) -- 10.73
April 1, 1996 to March 31, 1997......... 10.33 0.48 (0.02) (0.48) -- 10.31
April 1, 1995 to March 31, 1996......... 10.08 0.48 0.25 (0.48) -- 10.33
April 1, 1994 to March 31, 1995......... 9.96 0.49 0.12 (0.49) -- 10.08
INVESTORS GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 11.35 0.06 0.61 (0.09) (0.33) 11.60
December 12, 1997(a) to March 31,
1998................................... 10.00 0.03 1.32 -- -- 11.35
PAYSON BALANCED FUND
- --------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 14.79 0.28 (1.51) (0.28) (0.80) 12.48
April 1, 1997 to March 31, 1998......... 13.20 0.37 3.52 (0.37) (1.93) 14.79
April 1, 1996 to March 31, 1997......... 13.70 0.42 0.84 (0.42) (1.34) 13.20
April 1, 1995 to March 31, 1996......... 11.90 0.43 2.12 (0.43) (0.32) 13.70
April 1, 1994 to March 31, 1995......... 11.71 0.44 0.24 (0.44) (0.05) 11.90
PAYSON VALUE FUND
- --------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 21.67 0.07 (1.16) (0.07) (1.21) 19.30
April 1, 1997 to March 31, 1998......... 16.10 0.12 6.93 (0.12) (1.36) 21.67
April 1, 1996 to March 31, 1997......... 15.99 0.21 1.80 (0.20) (1.70) 16.10
April 1, 1995 to March 31, 1996......... 12.71 0.21 3.29 (0.21) (0.01) 15.99
April 1, 1994 to March 31, 1995......... 12.11 0.18 0.60 (0.18) -- 12.71
(a) Date of commencement of operations.
(b) Total return calculations do not include sales charge.
(c) Annualized.
</TABLE>
See Notes to Financial Statements. 38 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF THE FUNDS
OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS NET
------------------------------------- ASSETS AT
NET END OF
INVESTMENT PORTFOLIO PERIOD
INCOME NET GROSS TOTAL TURNOVER (000'S
(LOSS) EXPENSES EXPENSES RETURN(b) RATE OMITTED)
--------- ---------- -------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 4.28% 0.60% 1.53% 5.61% 41.78% $15,227
April 1, 1997 to March 31, 1998......... 4.45% 0.60% 1.81% 8.84% 22.99% 12,908
April 1, 1996 to March 31, 1997......... 4.65% 0.60% 2.22% 4.56% 53.46% 8,691
April 1, 1995 to March 31, 1996......... 4.65% 0.60% 2.26% 7.36% 34.31% 6,903
April 1, 1994 to March 31, 1995......... 4.95% 0.46% 2.19% 6.32% 37.59% 5,276
- ----------------------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 0.51% 1.10% 1.44% 6.25% 26.82% 29,107
December 12, 1997(a) to March 31,
1998.................................... 0.96%(c) 1.10%(c) 1.56%(c) 13.50% -- 33,899
- ----------------------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 2.07% 1.15% 1.49% (8.20%) 99.59% 23,189
April 1, 1997 to March 31, 1998......... 2.58% 1.15% 1.57% 31.27% 66.13% 24,440
April 1, 1996 to March 31, 1997......... 3.07% 1.15% 1.67% 9.42% 52.93% 18,163
April 1, 1995 to March 31, 1996......... 3.25% 1.15% 1.70% 21.70% 61.77% 17,455
April 1, 1994 to March 31, 1995......... 3.91% 1.15% 1.72% 6.00% 50.06% 13,872
- ----------------------------------------------------------------------------------------------------------------------------------
April 1, 1998 to March 31, 1999......... 0.35% 1.45% 1.75% (4.57%) 40.82% 18,253
April 1, 1997 to March 31, 1998......... 0.62% 1.45% 1.87% 45.28% 38.85% 19,918
April 1, 1996 to March 31, 1997......... 1.30% 1.45% 2.07% 13.01% 24.13% 13,109
April 1, 1995 to March 31, 1996......... 1.47% 1.45% 2.16% 27.77% 53.06% 10,319
April 1, 1994 to March 31, 1995......... 1.59% 1.46% 2.25% 6.52% 27.20% 7,960
</TABLE>
See Notes to Financial Statements. 39 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Forum Funds-Registered Trademark- (the "Trust") is an open-end management
investment company organized as a Delaware business trust. The Trust currently
has twenty-two active investment portfolios (each a "Series"). These financial
statements relate to the following Series (each a "Fund"), which commenced
operations on the dates indicated:
<TABLE>
<S> <C>
Investors High Grade Bond Fund March 16, 1998
Investors Bond Fund October 2, 1989
TaxSaver Bond Fund October 2, 1989
Maine Municipal Bond Fund December 5, 1991
New Hampshire Bond Fund December 31, 1992
Investors Growth Fund December 12, 1997
Payson Balanced Fund November 25, 1991
Payson Value Fund July 31, 1992
</TABLE>
The Trust Instrument of the Trust authorizes each Fund to issue an unlimited
number of shares of beneficial interest without par value. Investors High Grade
Bond Fund, Payson Balanced Fund, Payson Value Fund and Investors Growth Fund are
diversified portfolios. All other Funds are non-diversified.
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 these
estimates. The following represent significant accounting policies of the Funds:
SECURITY VALUATION-Securities held by the Funds for which market quotations are
readily available are valued using the last reported sales price provided by
independent pricing services. If no sales are reported, the mean of the last bid
and asked price is used. In the absence of readily available market quotations,
securities are valued at fair value as determined by the Board of Trustees.
Securities with a maturity of 60 days or less held by the Funds are valued at
amortized cost.
REPURCHASE AGREEMENTS-Each Fund may invest in repurchase agreements. The Funds,
through their custodian, receive delivery of the underlying securities, whose
market value must always equal or exceed the repurchase price. The investment
adviser is responsible for determining the value of the underlying securities at
all times. In the event of default, a Fund may have difficulties disposing of
such securities.
INTEREST AND DIVIDEND INCOME-Interest income is accrued as earned. Dividends on
securities held by the Funds are recorded on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS-Distributions of net investment income to
shareholders are declared daily and paid monthly by all Funds except Payson
Balanced Fund and Payson Value Fund, for which dividends are declared and paid
quarterly and Investors Growth Fund, for which dividends are declared and paid
annually.
40 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999
- --------------------------------------------------------------------------------
Net capital gains, if any, are distributed to shareholders at least annually.
Distributions are based on amounts calculated in accordance with applicable
income tax regulations, which may differ from generally accepted accounting
principles.
ORGANIZATION COSTS-The costs incurred by Investors High Grade Bond Fund and
Investors Growth Fund in connection with their organization and registration of
shares have been capitalized and are being amortized using the straight-line
method over a five year period beginning with the commencement of the Funds'
operations.
FEDERAL TAXES-Each Fund intends to qualify each year as a regulated investment
company and distribute all its taxable income. In addition, by distributing in
each calendar year substantially all its net investment income, capital gains
and certain other amounts, if any, each Fund will not be subject to a federal
excise tax. Therefore, no federal income or excise tax provision is required.
EXPENSE ALLOCATION-The Trust accounts separately for the assets and liabilities
and operations of each Series. Expenses that are directly attributable to more
than one Series are allocated among the respective Series.
REALIZED GAIN AND LOSS-Security transactions are recorded on trade date.
Realized gain and loss on investments sold are recorded on the basis of
identified cost.
NOTE 3. ADVISORY FEES, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISERS-The investment adviser for Investors High Grade Bond Fund,
Investors Bond Fund, TaxSaver Bond Fund, Maine Municipal Bond Fund, New
Hampshire Bond Fund and Investors Growth Fund is Forum Investment Advisors, LLC
("Forum Advisors"). Forum Advisors receives an advisory fee of 0.40% of the
average daily net assets from each of Investors High Grade Bond Fund, Investors
Bond Fund, TaxSaver Bond Fund, Maine Municipal Bond Fund and New Hampshire Bond
Fund and 0.65% of the average daily net assets from Investors Growth Fund. The
investment adviser for Payson Balanced Fund and Payson Value Fund is H.M. Payson
& Co. ("Payson"). Payson receives an advisory fee of 0.60% and 0.80% of the
average daily net assets of Payson Balanced Fund and Payson Value Fund,
respectively.
ADMINISTRATOR-The administrator of the Funds, Forum Administrative Services, LLC
("FAdS"), receives a management fee for its services to the Funds at an annual
rate of 0.20% of the average daily net assets of each Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT-Forum Shareholder Services, LLC
("FSS") serves as the Funds' transfer agent and dividend disbursing agent. For
these services, FSS receives an annual fee of $12,000, plus 0.25% of the average
daily net assets of each Fund, plus certain shareholder account fees.
DISTRIBUTOR-As of January 1, 1999, Forum Financial Services, Inc. ("FFSI"), a
registered broker-dealer and a member of the National Association of Securities
Dealers, Inc., acts as the distributor of the Funds' shares. FFS receives and
may reallow to certain institutions the sales charge paid on purchases of the
Funds' shares.
For the fiscal year ended March 31, 1999, FFSI reallowed $19,024 and $630 in
commissions to certain financial institutions regarding purchases of Maine
Municipal Bond Fund and New Hampshire Bond Fund,
41 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999
- --------------------------------------------------------------------------------
respectively. FFSI retained net commissions of $150, $119, $8, $146, $141, and
$394 from purchases of Investors High Grade Bond Fund, Investors Bond Fund,
TaxSaver Bond Fund, Maine Municipal Bond Fund, New Hampshire Bond Fund and
Payson Value Fund, respectively.
OTHER SERVICE PROVIDERS-Forum Accounting Services, LLC ("FAcS") serves as the
Trust's fund accountant. FAcS is compensated for such services at an amount of
$36,000 per year, per Fund, plus certain amounts based upon the asset level of a
Fund, as well as the number and types of portfolio transactions of a Fund.
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
FSS, FAcS, FAdS and Payson have voluntarily undertaken to waive a portion of
their fees and assume certain expenses of the Funds so that total expenses of
the Funds would not exceed a certain limitation. FSS, FAdS and Payson, at their
discretion, may revise or discontinue the voluntary waivers. For the year ended
March 31, 1999, expenses reimbursed and fees waived were as follows:
<TABLE>
<CAPTION>
EXPENSES
REIMBURSED FEES WAIVED
------------ --------------------------------------------
FAdS PAYSON FSS FAcS FAdS TOTAL
------------ --------- --------- --------- ----------- EXPENSES REIMBURSED
AND FEES WAIVED
----------------------
<S> <C> <C> <C> <C> <C> <C>
Investors High Grade Bond Fund... $ -- $ -- $ 76,092 $ -- $ 70,221 $ 146,313
Investors Bond Fund.............. -- -- 96,856 -- 164,056 260,912
TaxSaver Bond Fund............... 25,416 -- 97,734 -- 78,912 202,062
Maine Municipal Bond Fund........ 34,177 -- 74,804 48,000 59,922 216,903
New Hampshire Bond Fund.......... 30,088 -- 36,422 37,000 28,516 132,026
Investors Growth Fund............ -- -- 44,032 -- 63,732 107,764
Payson Balanced Fund............. -- 50,090 -- -- 29,359 79,449
Payson Value Fund................ -- 46,719 -- -- 9,758 56,477
</TABLE>
42 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999
- --------------------------------------------------------------------------------
NOTE 5. SECURITY TRANSACTIONS
Cost of purchases and proceeds from sales of securities (including maturities)
of portfolio securities (excluding short-term investments) during the year ended
March 31, 1999, were as follows:
<TABLE>
<CAPTION>
PROCEEDS COST OF PROCEEDS OF
FROM SALES GOV'T GOV'T
COST OF AND OBLIGATIONS OBLIGATIONS
PURCHASES MATURITIES PURCHASES SALES
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Investors High Grade Bond Fund.......... $60,436,626 $58,387,513 $49,867,187 $ 47,820,938
Investors Bond Fund..................... 80,111,708 76,636,506 45,939,590 42,775,539
TaxSaver Bond Fund...................... 23,840,102 25,303,120 -- --
Maine Municipal Bond Fund............... 12,462,500 8,247,461 -- --
New Hampshire Bond Fund................. 8,019,652 5,855,818 -- --
Investors Growth Fund................... 8,044,135 12,007,529 -- --
Payson Balanced Fund.................... 24,194,469 22,668,467 1,969,675 4,161,006
Payson Value Fund....................... 7,374,224 7,548,320 -- --
</TABLE>
For federal income tax purposes, the tax basis of investment securities owned as
of March 31, 1999, the aggregate gross unrealized appreciation for all
securities in which there was an excess of market value over tax cost and the
aggregate gross unrealized depreciation for all securities in which there was an
excess of tax cost over market value were as follows:
<TABLE>
<CAPTION>
NET
UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ---------- ------------
<S> <C> <C> <C> <C>
Investors High Grade Bond
Fund....................... $ 32,255,133 $ 407,012 $ 267,014 $ 139,998
Investors Bond Fund......... 68,006,041 892,720 1,346,351 (453,631)
TaxSaver Bond Fund.......... 35,939,935 1,083,778 95,530 998,248
Maine Municipal Bond Fund... 30,786,326 1,225,616 19,410 1,206,206
New Hampshire Bond Fund..... 14,482,791 469,542 5,357 464,185
Investors Growth Fund....... 12,452,857 17,377,294 681,240 16,696,054
Payson Balanced Fund........ 23,402,027 1,974,881 1,719,721 255,160
Payson Value Fund........... 13,393,611 6,090,932 1,160,834 4,930,098
</TABLE>
NOTE 6. CONCENTRATION OF RISK
The Maine Municipal Bond Fund and New Hampshire Bond Fund invest substantially
all their assets in debt obligations of issuers located in the states of Maine
and New Hampshire, respectively. The issuers' abilities to meet their
obligations may be affected by Maine and Hew Hampshire economic or political
developments.
43 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
MARCH 31, 1999
- --------------------------------------------------------------------------------
NOTE 7. ACQUISITION OF FUNDS
As of December 11, 1997, Investors Bond Fund acquired all the net assets of NCBE
Fixed Income Trust Fund for Qualified Pension and Profit Sharing Retirement
Plans and Trusts and NCBE Fixed Income Common Trust Fund. TaxSaver Bond Fund
acquired all the net assets of NCBE Municipal Bond Common Trust Fund. Investors
Growth Fund acquired all the net assets of NCBE Discretionary Common Trust Fund
and NCBE Equity Common Trust Fund for Self-Employed Individuals' Retirement
Plans and Trusts. In addition, as of March 16, 1998, Investors High Grade Bond
Fund acquired all the net assets of the CTF Income Fund and the net assets of
the CTF Balanced Fund's fixed income segment. The net assets, unrealized gain
(loss) and shares associated with each acquired fund immediately prior to
acquisition were as follows:
<TABLE>
<CAPTION>
UNREALIZED
ACQUIRED FUNDS NET ASSETS GAIN/(LOSS) SHARES ACQUIRED
- -------------------------------------------------------------------- -------------- -------------- ----------------
<S> <C> <C> <C>
NCBE Fixed Income Trust Fund for Qualified Pension and Profit
Sharing Retirement Plans and Trusts................................ $ 19,803,770 $ -- 1,877,135
NCBE Fixed Income Common Trust Fund................................. 25,399,670 582,690 2,407,552
NCBE Municipal Bond Common Trust Fund............................... 19,211,589 711,932 1,780,499
NCBE Discretionary Common Trust Fund................................ 22,784,623 13,490,984 2,278,462
NCBE Equity Common Trust Fund for Self-Employed Individuals'
Retirement Plans and Trusts........................................ 4,151,850 -- 415,185
CTF Income Fund..................................................... 15,238,632 299,777 1,523,863
CTF Balanced Fund (fixed income segment)............................ 18,930,184 315,993 1,893,018
</TABLE>
The net assets of Investors Bond Fund, TaxSaver Bond Fund, Investors Growth
Fund, and Investors High Grade Bond Fund immediately after the acquisition were:
$75,178,000; $39,858,760; $26,936,473 and $34,168,816, respectively.
NOTE 8. FEDERAL TAX STATUS OF DIVIDENDS DECLARED DURING THE FISCAL YEAR
(UNAUDITED)
<TABLE>
<CAPTION>
LONG TERM QUALIFYING ORDINARY EXEMPT
CAPITAL GAIN DIVIDENDS INCOME INTEREST
------------ ----------- --------- ---------
<S> <C> <C> <C> <C>
Investors High Grade Bond Fund............................. 0.069345 -- 100.00% --
Investors Bond Fund........................................ -- -- 100.00% --
TaxSaver Bond Fund......................................... 0.156494 -- -- 100.00%
Maine Municipal Bond Fund.................................. 0.031232 -- -- 100.00%
New Hampshire Bond Fund.................................... 0.023847 -- -- 100.00%
Investors Growth Fund...................................... 0.333576 100.00% -- --
Payson Balanced Fund....................................... 0.481781 56.50% 43.50% --
Payson Value Fund.......................................... 1.192552 100.00% -- --
</TABLE>
For federal income tax purposes, dividends from short-term capital gains are
classified as ordinary income.
NOTE 9. REDESIGNATION OF NET INVESTMENT INCOME DISTRIBUTION (UNAUDITED)
The Payson Balanced Fund and Payson Value Fund have redesignated $4,293 and
$15,784 of their March 31, 1999 net investment income distributions to long term
capital gain distributions, respectively.
44 FORUM FUNDS-Registered Trademark-
<PAGE>
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS,
FORUM FUNDS:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the Investors High Grade Bond Fund,
Investors Bond Fund, TaxSaver Bond Fund, Maine Municipal Bond Fund, New
Hampshire Bond Fund, Investors Growth Fund, Payson Balanced Fund and Payson
Value Fund (certain of the series constituting Forum Funds), (the "Funds") as of
March 31, 1999, the related statements of operations for the year then ended,
the statements of changes in net assets for the years ended March 31, 1999 and
March 31, 1998 and the financial highlights for each of the years in the
five-year period ended March 31, 1999. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1999 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the aforementioned
Funds, as of March 31, 1999, the results of their operations, the changes in
their net assets, and their financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Boston, MA
May 7, 1999
45 FORUM FUNDS-Registered Trademark-
<PAGE>
[LOGO]
ADMINISTRATOR
FORUM ADMINISTRATIVE SERVICES, LLC
TRANSFER AGENT
FORUM SHAREHOLDER SERVICES, LLC
FORUM FUNDS
P.O. BOX 446
PORTLAND, ME 04112
207-879-0001 (IN PORTLAND, ME)
800-94FORUM (ELSEWHERE)
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION TO SHAREHOLDERS AND OTHERS
WHO HAVE RECEIVED A COPY OF THE FORUM FUNDS' PROSPECTUS.
