FORUM FUNDS, N-30D, 1999-08-05

FORUM FUNDS
N-30D, 1999-08-05

Previous: ENSCO INTERNATIONAL INC, 10-Q, 1999-08-05

Next: SHELTER PROPERTIES I LTD PARTNERSHIP, 10QSB, 1999-08-05

FORUM ----------------------------------------
FUNDS ANNUAL REPORT
----------------------------------------
MAY 31, 1999

INVESTORS EQUITY FUND

EQUITY INDEX FUND

<PAGE>

TABLE OF CONTENTS

A Message to Our Shareholders.......................................... 1

FORUM FUNDS

Fund Performance....................................................... 3

Independent Auditors' Report .......................................... 4

Schedules of Investments:
Investors Equity Fund............................................... 5
Equity Index Fund................................................... 5

Statements of Assets and Liabilities................................... 6

Statements of Operations............................................... 7

Statements of Changes in Net Assets.................................... 8

Financial Highlights................................................... 9

Notes to Financial Statements.......................................... 10

INDEX PORTFOLIO

Independent Auditors' Report .......................................... 14

Schedule of Investments:
Index Portfolio..................................................... 15

Statement of Assets and Liabilities.................................... 21

Statement of Operations................................................ 22

Statements of Changes in Net Assets.................................... 23

Financial Highlights................................................... 23

Notes to Financial Statements.......................................... 24

<PAGE>

FORUM FUNDS(R)
- --------------------------------------------------------------------------------

[LOGO]
INVESTORS EQUITY FUND
EQUITY INDEX FUND

May 31, 1999 ANNUAL REPORT
- --------------------------------------------------------------------------------

Dear Investor:

This Annual Report covers two of the Forum equity funds, Investors Equity Fund
and Equity Index Fund, and reviews their performance for the fiscal year ended
May 31, 1999. As of this date, the two funds have combined total assets of
nearly $43 million.

INVESTORS EQUITY FUND
- ---------------------
For the fiscal year ending May 31, 1999, the Investors Equity Fund achieved a
total return of 24.21% (not including the effect of the Fund's maximum 4% sales
charge). This compares favorably to the 21.04% total return of the Standard &
Poor's 500 Index and the Morningstar Growth Funds Average of 14.10% for the same
period.*

The Fund's investment approach remained the same during the twelve-month period
as the Fund managers continued to invest in high quality, growth oriented, large
capitalization stocks. The Fund maintained overweight positions in the
technology, health care and consumer cyclical sectors but de-emphasized
utilities (electric and gas), energy and other commodity related businesses. The
Fund's managers intend to continue this strategy in the current fiscal year.

Despite an anticipated slowdown in both the U.S. and European economies, the
Fund's managers expect growth in the U.S. GDP of around 3%. Although a
combination of factors acted to drag down growth in U.S.-based corporate profits
in 1998, earnings are likely to improve during the current fiscal year. The 1998
slowdown was primarily the result of economic recessions and depressions in
Southeast Asia, which in turn led to a slowing in Latin America. These factors,
together with the translation effects of the strong U.S. Dollar and continued
weak earnings in commodity oriented industries, contributed to a moderate
slowing in the second half of 1998.

As the Fund enters a new fiscal year, the managers expect these factors to have
less of a negative impact on overall corporate profits and for the year to year
comparisons to become easier. Inflation is likely to remain low and interest
rates are likely to stabilize after their recent peaks in the May/June period of
1999. They believe that strong companies with consistent growth in earnings,
achieved through market share gains and new products, will advance. By contrast,
companies that rely on pricing to increase profits will face another difficult
year.

EQUITY INDEX FUND
- -----------------
During the fiscal year ended May 31, 1999, the Fund experienced a gain of 20.98%
(not including the effect of the Fund's maximum 4% sales charge).* In seeking to
achieve its objective--to replicate the return of the S&P 500 Index with a
minimum of tracking error--the Fund invests substantially all of its assets in
Index Portfolio, a series of Core Trust (Delaware), another open-end management
investment company. Index Portfolio invests in all 500 securities that make up
the S&P 500 Index and in the same weightings as in the S&P 500 Index. Index
Portfolio also invests in S&P 500 futures. In addition to its investment in the
Index Portfolio, the Fund maintains a small portion of its assets in cash,
mainly to satisfy shareholders' cash flows.

<PAGE>

- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION & ANALYSIS (CONTINUED)
MAY 31, 1999
- --------------------------------------------------------------------------------

IN CONCLUSION
- -------------
Because various segments of the market have suffered severe performance
fluctuations in the last year, we again remind you that as an investor you
should remain focused on your long-term goals and not be diverted by short-term,
potentially risky ventures. Investors should also take a long-term look at major
market trends. In the last year the market has been driven largely by
investments in companies with the largest market capitalizations. Over the last
few months, however, we have seen a shift to smaller and medium capitalization
companies. And although growth stocks also drove the market for most of 1998,
value stocks rebounded significantly during the last quarter of the year. As
usual, we suggest that you work with your financial professional to determine
the appropriate asset investment mix that is likely to meet your needs.

Thank you for your confidence in Forum Funds. We will continue to provide you
with the high quality investment service that you have grown accustomed. If you
have questions, please discuss them with your investment professional, or call
us at (207) 879-0001.

Sincerely,

/s/ John Y. Keffer

John Y. Keffer,
Chairman

*PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 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 HAD BEEN
REFLECTED AND IF THERE HAD BEEN NO FEE WAIVERS, THE QUOTED PERFORMANCE WOULD
HAVE BEEN LOWER. ADDITIONAL PERFORMANCE FIGURES FOR THE FUNDS CAN BE FOUND IN
THE FORUM FUNDS PERFORMANCE CHARTS & ANALYSIS SECTION OF THIS REPORT.

THE S & P 500 INDEX IS A GROUP OF UNMANAGED SECURITIES WIDELY REGARDED BY
INVESTORS TO BE REPRESENTATIVE OF THE MARKET IN GENERAL. THE MORNINGSTAR
PROSPECTUS OBJECTIVE FOR GROWTH FUNDS AVERAGE REFLECTS THE 12-MONTH AVERAGE
TOTAL RETURN OF 1,637 GROWTH MUTUAL FUNDS AS REPORTED BY MORNINGSTAR, INC.TM ONE
CANNOT INVEST DIRECTLY IN AN INDEX.

THE VIEWS IN THIS REPORT WERE THOSE OF THE FUNDS' MANAGERS AS OF MAY 31, 1999,
AND MAY NOT REFLECT THE VIEWS OF THE MANAGERS ON THE DATE THIS REPORT IS FIRST
PUBLISHED OR ANY TIME THEREAFTER. THESE VIEWS ARE INTENDED TO ASSIST
SHAREHOLDERS OF THE FUNDS IN UNDERSTANDING THEIR INVESTMENT IN THE FUNDS AND DO
NOT CONSTITUTE INVESTMENT ADVICE.

2
<PAGE>

- --------------------------------------------------------------------------------
PERFORMANCE CHARTS & ANALYSIS
MAY 31, 1999
- --------------------------------------------------------------------------------

COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT

These charts reflect the change in value of a $10,000 investment, including
reinvested dividends and distributions, in Investors Equity Fund and Equity
Index Fund, compared to the Standard and Poor's 500 Composite Index ("S&P 500
Index"), since each Fund's inception. The S&P 500 Index is a market weighted
index composed of 500 large capitalization companies. The total return of each
Fund includes operating expenses and a 4.00% sales charge that reduce returns,
while the total return of the S&P 500 Index does not include expenses and sales
charges. Each Fund is professionally managed while the S&P 500 Index is
unmanaged and is not available for investment. Investment return and principal
value of an investment in each Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.

PERFORMANCE INFORMATION PRESENTED HERE REPRESENTS ONLY PAST PERFORMANCE AND DOES
NOT NECESSARILY INDICATE FUTURE RESULTS.

INVESTORS EQUITY FUND VS. S&P 500 INDEX

Average Annual Total Return on 5/31/99
- --------------------------------------
One Year: 19.24%
Since Inception on 12/17/97: 23.77%

Investment Value on 5/31/99
- ---------------------------
Investors Equity Fund: $13,629
S&P 500 Index: $13,926

[EDGAR REPRESENTATION OF GRAPH CHART]

Investors Equity Fund S&P 500 Index
11/30/97 9,600.00 10,000.00
12/31/97 9,724.80 10,171.61
01/31/98 9,926.40 10,284.00
02/28/98 10,588.80 11,025.30
03/31/98 11,059.20 11,589.44
04/30/98 11,251.20 11,705.99
05/31/98 10,972.80 11,505.00
06/30/98 11,702.40 11,971.97
07/31/98 11,395.20 11,844.83
08/31/98 9,849.60 10,134.43
09/30/98 10,502.40 10,783.72
10/31/98 11,404.80 11,660.10
11/30/98 12,249.34 12,366.50
12/31/98 13,240.06 13,078.66
01/31/99 14,007.75 13,625.36
02/28/99 13,481.94 13,202.02
03/31/99 13,818.46 13,730.08
04/30/99 13,955.17 14,261.79
05/31/99 13,629.16 13,925.50

EQUITY INDEX FUND VS. S&P 500 INDEX

Average Annual Total Return on 5/31/99
- ---------------------------------------
One Year: 16.14%
Since Inception on 12/24/97: 23.79%

Investment Value on 5/31/99
- ----------------------------
Equity Index Fund: $13,577
S&P 500 Index: $13,926

[EDGAR REPRESENTATION OF GRAPH CHART]

Equity Index Fund S&P 500 Index
11/30/97 9,600.00 10,000.00
12/31/97 9,926.40 10,171.61
01/31/98 10,041.60 10,284.00
02/28/98 10,761.60 11,025.30
03/31/98 11,308.80 11,589.44
04/30/98 11,424.00 11,705.99
05/31/98 11,222.40 11,505.00
06/30/98 11,673.60 11,971.97
07/31/98 11,548.80 11,844.83
08/31/98 9,878.40 10,134.43
09/30/98 10,560.00 10,783.72
10/31/98 11,395.20 11,660.10
11/30/98 12,086.40 12,366.50
12/31/98 12,791.57 13,078.66
01/31/99 13,285.79 13,625.36
02/28/99 12,878.78 13,202.02
03/31/99 13,382.69 13,730.08
04/30/99 13,905.99 14,261.79
05/31/99 13,576.51 13,925.50

3 FORUM FUNDS(R)
<PAGE>

- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
MAY 31, 1999
- --------------------------------------------------------------------------------

To the Board of Trustees and Shareholders,
Forum Funds:

We have audited the accompanying statements of assets and liabilities including
the schedules of investments of Investors Equity Fund and Equity Index Fund (the
"Funds") (two of the series comprising the Forum Funds) (the "Trust") as of May
31, 1999, and the related statement of operations for the year then ended, and
the statements of changes in net assets, and the financial highlights for the
years ended May 31, 1999 and 1998. 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 the securities owned as of
May 31, 1999 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the aforementioned
Funds as of May 31, 1999, and the results of their operations, the changes in
their net assets and their financial highlights for the stated periods, in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
Boston, Massachusetts
July 16, 1999

4 FORUM FUNDS(R)
<PAGE>

- --------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS
MAY 31, 1999
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------- -------------------------------------------------------------
INVESTORS EQUITY FUND INVESTORS EQUITY FUND - CONTINUED
- ---------------------------------------------------------- -------------------------------------------------------------
COMMON STOCKS (95.0%)

SHARES SECURITY DESCRIPTION VALUE SHARES SECURITY DESCRIPTION VALUE
- ---------------------------------------------------------- -------------------------------------------------------------

APPAREL AND ACCESSORY STORES (2.9%) INDUSTRIAL AND COMMERCIAL MACHINERY
15,000 Gap, Inc. $ 938,438 AND COMPUTER EQUIPMENT (9.4%)
-----------
BANKS AND CREDIT INSTITUTIONS (5.2%) 11,400 Applied Materials, Inc. (a) $ 626,288
42,000 MBNA Corp. 1,160,250 15,000 Cisco Systems, Inc. (a) 1,633,125
13,000 Wells Fargo & Co. 520,000 14,000 Solectron Corp. (a) 766,500
----------- ------------------
1,680,250 3,025,913
----------- ------------------
BUILDING MATERIALS (2.3%) INSURANCE (4.2%)
13,200 Home Depot, Inc. 750,750 11,962 American International Group, Inc. 1,367,406
----------- ------------------
BUSINESS SERVICES (13.5%) MEASURING, ANALYZING, AND CONTROLLING
28,800 Automatic Data Processing, Inc. 1,186,200 INSTRUMENTS; PHOTOGRAPHIC, MEDICAL
17,000 Ecolab, Inc. 722,500 AND OPTICAL GOODS (3.1%)
13,050 Interpublic Group Cos., Inc. 988,538 14,300 Medtronic, Inc. 1,015,300
------------------
18,000 Microsoft Corp. (a) 1,452,375 OIL REFINING AND RELATED INDUSTRIES (3.6%)
-----------
4,349,613 14,700 Exxon Corp. 1,174,163
----------- ------------------
CHEMICALS AND ALLIED PRODUCTS (6.6%) PHARMACEUTICAL PREPARATIONS (11.5%)
20,000 Gillette Co. 1,020,000 19,800 Abbott Laboratories 894,713
11,800 The Procter & Gamble Co. 1,101,825 10,200 American Home Products Corp. 587,775
-----------
2,121,825 12,800 Merck & Co., Inc. 864,000
-----------
COMMUNICATIONS (6.4%) 8,100 Pfizer, Inc. 866,700
9,500 Ameritech Corp. 625,219 11,200 Schering-Plough Corp. 504,700
------------------
------------------
18,000 BellSouth Corp. 849,375 3,717,888
------------------
11,400 SBC Communications, Inc. 582,825 RETAIL (1.7%)
-----------
2,057,419 19,000 Staples, Inc. (a) 546,250
----------- ------------------
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT AND TRANSPORTATION - WATER (2.3%)
COMPONENTS, EXCEPT COMPUTER EQUIPMENT (6.7%) 18,000 Carnival Corp. 738,000
------------------
8,550 General Electric Co. 869,428
24,050 Intel Corp. 1,300,203 TOTAL COMMON STOCK (COST $13,371,559) 30,698,212
----------- ------------------
2,169,631
-----------
FABRICATED METAL PRODUCTS (3.8%) SHORT-TERM INVESTMENTS (5.0%)
10,000 Danaher Corp. 604,375 Principal Amount
8,000 Illinois Tool Works 614,000 (000 Omitted)
----------- -------------------------------------------------------------
1,218,375 $ 1,615 BT Investment Money Market
-----------
FINANCIAL INSTITUTIONS (4.7%) (Cost $1,614,572) $ 1,614,572
------------------
14,925 Federal National Mortgage Assn. 1,014,900
6,000 Merrill Lynch & Co., Inc. 504,000 Total Investments (100.0%) (Cost $14, 986,131) $ 32,312,784
----------- ==================
1,518,900
-----------
FOOD AND BEVERAGES (1.6%)
-------------------------------------------------------------
7,500 The Coca Cola Co. 512,344 EQUITY INDEX FUND
----------- -------------------------------------------------------------
GROCERY STORES (2.5%) INVESTMENT COMPANY (100.0%)
14,000 Kroger Co. (a) 819,875
-----------
FURNITURE AND FIXTURES (3.0%) Security Description Value
-------------------------------------------------------------
37,000 Leggett & Platt 975,875 Index Portfolio of Core Trust (Delaware)
-----------
(Cost $8,924,057) $ 11,128,709
==================
</TABLE>

- -----------------------------------------------

(a) Non-income producing security.

See Notes to Financial Statements. 5 FORUM FUNDS(R)
<PAGE>

- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>

INVESTORS EQUITY
EQUITY INDEX
FUND FUND
------------------------ ------------------------
ASSETS
Investments (Notes 1 and 2)
Investments, at cost $ 14,986,131 $ 8,924,057
Net unrealized appreciation 17,326,653 2,204,652
------------------------ ------------------------
Total investments, at value 32,312,784 11,128,709

Interest, dividends and other receivables 31,701 -
Receivable for Fund shares sold 4,800 -
Receivable from administrator (Note 4) - 15,975
Organization costs, net of amortization (Note 2) 2,413 1,879
------------------------ ------------------------
Total Assets 32,351,698 11,146,563
------------------------ ------------------------

LIABILITIES
Payable for Fund shares redeemed 27,793 -
Payable to investment adviser (Note 3) 22,312 -
Payable to other related parties (Note 3) 62,026 -
Accrued expenses and other liabilities 105,392 19,195
------------------------ ------------------------
Total Liabilities 217,523 19,195
------------------------ ------------------------

NET ASSETS $ 32,134,175 $ 11,127,368
======================== ========================

COMPONENTS OF NET ASSETS
Paid-in capital $ 12,406,217 $ 8,904,048
Accumulated undistributed net investment income - 51,775
Unrealized appreciation on investments 17,326,653 2,204,652
Accumulated net realized gain (loss) on investments 2,401,305 (33,107)
------------------------ ------------------------

NET ASSETS $ 32,134,175 $ 11,127,368
======================== ========================

SHARES OF BENEFICIAL INTEREST 2,480,350 794,180

NET ASSET VALUE, AND
REDEMPTION PRICE PER SHARE $12.96 $14.01

OFFERING PRICE PER SHARE
(NAV / (1 - MAXIMUM SALES LOAD) $13.50 $14.59

MAXIMUM SALES CHARGE 4.00% 4.00%
</TABLE>

See Notes to Financial Statements. 6 FORUM FUNDS(R)
<PAGE>

- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
YEAR ENDED MAY 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>

INVESTORS EQUITY
EQUITY INDEX
FUND FUND
--------------------- ---------------------

INVESTMENT INCOME
Interest income $ 35,815 $ -
Dividend income 285,012 -
Interest income allocated from the Portfolio (Note 1) - 9,040
Dividend income allocated from the Portfolio (Note 1) - 107,505
Securities lending income allocated from the Portfolio (Note 1) - 2,023
Net expenses allocated from the Portfolio (Note 1) - (13,852)
--------------------- ---------------------
Total Investment Income 320,827 104,716
--------------------- ---------------------

EXPENSES
Investment advisory (Note 3) 201,585 -
Administrative (Note 3) 62,026 15,594
Transfer agency (Note 3) 89,880 31,635
Custody 8,013 -
Accounting (Note 3) 36,000 12,000
Audit 17,122 10,577
Legal 9,913 2,893
Trustees 2,163 532
Compliance 1,869 2,871
Amortization of organization costs (Note 2) 680 528
Miscellaneous 18,688 3,914
--------------------- ---------------------
Total Expenses 447,939 80,544
Expenses reimbursed and fees waived (Note 4) (106,979) (75,003)
--------------------- ---------------------
Net Expenses 340,960 5,541
--------------------- ---------------------

NET INVESTMENT INCOME (LOSS) (20,133) 99,175
--------------------- ---------------------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES TRANSACTIONS
Net Realized Gain on Investments 4,243,115 -
Net Realized Gain on Investment in the Portfolio (Note 1) - 20,665
Net Realized Loss on Futures Transactions
from Investments in the Portfolio (Note 1) - (52,199)
--------------------- ---------------------
Net Realized Gain (Loss) from Investments 4,243,115 (31,534)
--------------------- ---------------------

Net Change in Unrealized Appreciation on Investments 2,435,455 -
Net Change in Unrealized Appreciation
on Investments in the Portfolio (Note 1) - 1,570,917
Net Change in Unrealized Appreciation on Futures
Transactions from Investment in the Portfolio (Note 1) - 71,860
--------------------- ---------------------
Net Change in Unrealized Appreciation on Investments
and Futures Transactions 2,435,455 1,642,777
--------------------- ---------------------

NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 6,678,570 1,611,243
--------------------- ---------------------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 6,658,437 $ 1,710,418
===================== =====================
</TABLE>

See Notes to Financial Statements. 7 FORUM FUNDS(R)

<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
PERIODS ENDED MAY 31, 1998 AND YEARS ENDED MAY 31, 1999
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
INVESTORS EQUITY
EQUITY INDEX
FUND FUND
--------------------------------- ----------------------------

Amount Shares Amount Shares
NET ASSETS - Beginning of Period (a) $ - $ -

OPERATIONS
Net investment income 5,853 28,354
Net realized gain (loss) from investments sold 725,398 (23)
Net change in unrealized appreciation
of investments 194,080 561,875
---------------- ---------------
Net increase in net assets resulting from operations 925,331 590,206
---------------- ---------------

CAPITAL SHARE TRANSACTIONS
Sale of shares 1,706,570 165,127 4,452,945 431,467
Transactions due to acquisition (Note 6) 29,163,312 2,613,200 - -
Redemption of shares (1,704,870) (146,883) (5,545) (500)
---------------- --------------- --------------- ----------
Net increase from capital share transactions 29,165,012 2,631,444 4,447,400 430,967
---------------- =============== --------------- ==========
Net increase in net assets 30,090,343 5,037,606
---------------- ---------------

NET ASSETS - MAY 31, 1998 (A) 30,090,343 5,037,606
---------------- ---------------

OPERATIONS
Net investment income (loss) (20,133) 99,175
Net realized gain (loss) on investments sold 4,243,115 (31,534)
Net change in unrealized appreciation
of investments 2,435,455 1,642,777
---------------- ---------------
Net increase in net assets resulting from operations 6,658,437 1,710,418
---------------- ---------------

DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (5,924) (75,754)
From net realized gain from investments (2,567,208) (1,550)
---------------- ---------------
Total distributions to shareholders (2,573,132) (77,304)
---------------- ---------------

CAPITAL SHARE TRANSACTIONS
Sale of shares 2,270,010 185,166 5,660,156 450,517
Reinvestment of distributions 2,414,394 216,957 77,304 6,272
Redemption of shares (6,725,877) (553,217) (1,280,812) (93,576)
---------------- =============== --------------- ==========
Net increase (decrease) in capital share transactions (2,041,473) (151,094) 4,456,648 363,213
---------------- =============== --------------- ==========
Net increase in net assets 2,043,832 6,089,762
---------------- ---------------

NET ASSETS - MAY 31, 1999 (B) $ 32,134,175 $ 11,127,368
================ ===============

(A) Including accumulated undistributed net
investment income, May 31, 1998 $ 5,923 $ 28,354
================ ===============
(B) Including accumulated undistributed net
investment income, May 31, 1999 $ - $ 51,775
================ ===============
</TABLE>

- ------------------------------------------------------

(a) See Notes to Financial Statements for commencement of operations (Note 1).

See Notes to Financial Statements. 8 FORUM FUNDS(R)

<PAGE>

- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

Selected per share data for an average share outstanding throughout each period:

<TABLE>
<S> <C> <C> <C> <C>
INVESTORS EQUITY
EQUITY INDEX
FUND FUND
------------------------------- -----------------------------
Year Ended Period Ended Year Ended Period Ended
May 31, Ended May 31, May 31, Ended May 31,
1999 1998 (a) 1999 1998 (a)
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share, Beginning of Period $ 11.43 $ 10.00 $ 11.69 $ 10.00
-------------- -------------- ------------- -----------
Investment Operations
Net investment income (loss) (b) (0.01) - (h) 0.16 0.07
Net realized and unrealized gain
on investments 2.60 1.43 2.27 1.62
-------------- -------------- ------------- -----------
Total from Investment Operations 2.59 1.43 2.43 1.69
-------------- -------------- ------------- -----------

Distributions To Shareholders from
Net investment income - (f) - (0.11) -
Net realized gain on investments (1.06) - - (g) -
-------------- -------------- ------------- -----------
Total distributions to shareholders (1.06) (0.11)
-------------- -------------- ------------- -----------

Net Asset Value Per Share, End of Period $ 12.96 $ 11.43 $ 14.01 $ 11.69
============== ============== ============= ===========
Total Return (c) 24.21% 14.30% 20.98% 16.90%

Ratios/Supplementary Data:
Net Assets at End of Period (000 omitted) $32,134 $30,090 $11,127 $5,038
Ratios to Average Net Assets (b):
Expenses including reimbursement/
waiver of fees 1.10% 1.10% (d) 0.25% 0.25% (d)
Expenses excluding reimbursement/
waiver of fees 1.44% 2.09% (d) 1.26% 2.25% (d)
Net investment income (loss) including
reimbursement/waiver of fees (0.06)% 0.09% (d) 1.27% 1.41% (d)

Portfolio turnover rate 16% 11% 4% (e) 7% (e)
</TABLE>

- ------------------------------------

(a) See Notes to Financial Statements for commencement of operations (Note 1).
(b) Includes the Fund's proportionate share of income and expenses of the
Portfolio for the Equity Index Fund.
(c) Total return calculations do not include sales charges and would have been
lower had certain expenses not been waived or reimbursed during the period
shown (Note 4).
(d) Annualized.
(e) Information presented is that of the Portfolio in which the Fund invests
(Note 1).
(f) Distributions per share were actually $0.002250.
(g) Distributions per share were actually $0.002332.
(h) Net investment income per share was actually $0.002224.

See Notes to Financial Statements. 9 FORUM FUNDS(R)
<PAGE>

- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1999
- --------------------------------------------------------------------------------

NOTE 1. SUMMARY OF ORGANIZATION

Forum Funds(R) (the "Trust") is a Delaware business trust that is registered as
an open-end, management investment company under the Investment Company Act of
1940, as amended (the "Act"). The Trust currently has seventeen active
investment portfolios. Included in this report is Investors Equity Fund and
Equity Index Fund (individually, each a "Fund", and collectively, "the Funds"),
each a diversified portfolio. Under its Trust Instrument, the Trust is
authorized to issue an unlimited number of each Funds' shares of beneficial
interest without par value. Commencement of operations for each Fund was as
follows:

Investors Equity Fund December 17, 1997
Equity Index Fund December 24, 1997

MASTER FEEDER ARRANGEMENT - Equity Index Fund seeks to achieve its investment
objective by investing all its investable assets in Index Portfolio (the
"Portfolio"), a separate diversified portfolio of Core Trust (Delaware) ("Core
Trust"), a registered, open-end management investment company. This is commonly
referred to as a master-feeder arrangement. The Portfolio directly acquires
portfolio securities and the Fund investing in the Portfolio acquires an
indirect interest in those securities. The Fund accounts for its investment in
the Portfolio as a partnership investment and records daily its share of the
Portfolio's income, expenses, realized and unrealized gain or loss. In addition,
the Fund incurs its own expenses. The Fund may withdraw its investment from the
Portfolio at any time if the Trust's Board of Trustees determines that it is in
the best interest of the Fund and its shareholders to do so. The financial
statements of the Portfolio, including its schedule of investments, are in this
report, and should be read in conjunction with the Fund's financial statements.
The Equity Index Fund's ownership interest in the Index Portfolio was 0.61% as
of May 31, 1999.

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 amounts could differ from those
estimates.

The following summarizes the significant accounting policies of the Funds:

SECURITY VALUATION - The Trust determines the net asset value per share of each
Fund as of the close of the regular trading day on the New York Stock Exchange,
on each Fund business day. Securities, other than short-term securities, held by
Investors Equity Fund and for which market quotations are readily available are
valued using the last reported sales price provided by independent pricing
services. If no sales price is 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 held
by Investors Equity Fund that have a maturity of 60 days or less are valued at
amortized cost, which approximates market value. Equity Index Fund records its
investment in the Portfolio at value. The value of such an investment reflects
the Fund's proportionate interest in the net assets of the Portfolio. The
valuation of securities held in the Portfolio is discussed in the Notes to the
Financial Statements of the Portfolio, which are included elsewhere in this
report.

SECURITY TRANSACTIONS AND INVESTMENT INCOME - Investment transactions are
accounted for on trade date. Dividend income is recorded on the ex-dividend
date. Interest income is recorded as earned. Identified cost of investments sold
is used to determine gain or loss for both financial statement and federal
income tax purposes.

REPURCHASE AGREEMENTS - Investors Equity Fund may invest in repurchase
agreements. The Fund, through its custodian, receives delivery of the underlying
securities, whose market value must always equal or exceed the repurchase price.
In the event of default, the Fund may have difficulties with the disposition of
such securities.

DISTRIBUTIONS TO SHAREHOLDERS - Distributions to shareholders of net investment
income and net capital gain, if any, are declared and paid at least annually.
Distributions are based on amounts calculated in accordance with applicable
income

10 FORUM FUNDS(R)
<PAGE>

- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1999
- --------------------------------------------------------------------------------

tax regulations, which may differ from generally accepted accounting principles.
These differences are due primarily to differing treatments of income and gain
on various investment securities held by the Fund, timing differences and
differing characterizations of distributions made by the funds.

ORGANIZATION COSTS - Costs incurred by each Fund in connection with its
organization are amortized using the straight-line method over a five-year
period.

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 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 of its funds. Expenses that are directly
attributable to more than one Fund are allocated among the respective funds in
proportion to each fund's average daily net assets.

NOTE 3. ADVISORY FEES, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES

INVESTMENT ADVISER - The investment adviser for Investors Equity Fund is H.M.
Payson & Co. ("Payson"). Pursuant to an Investment Advisory Agreement, Payson
receives an advisory fee from the Fund at an annual rate of 0.65% of the Fund's
average daily net assets. Payson has entered into an investment sub-advisory
agreement with Peoples Heritage Bank ("Peoples") under which Peoples exercises
certain investment discretion over the assets (or a portion of assets) of the
Fund. For its sub-advisory services, Payson pays a fee to Peoples at an annual
rate of 0.25% of the Fund's average daily net assets.

The investment adviser for Index Portfolio, the Core Trust portfolio in which
Equity Index Fund invests, is Norwest Investment Management, Inc. ("Norwest"), a
wholly owned subsidiary of Norwest Bank Minnesota, N.A. ("Norwest Bank").
Norwest Bank is a subsidiary of Wells Fargo & Company, a national bank holding
company. Pursuant to an Investment Advisory Agreement, Norwest receives an
advisory fee at an annual rate of 0.15% of the Portfolio's average daily net
assets. Equity Index Fund pays its pro rata portion of the advisory fees
incurred by Index Portfolio.

ADMINISTRATOR - The administrator for each Fund is Forum Administrative
Services, LLC ("FAdS"). For its services, FAdS receives a fee at an annual rate
of 0.20% of the average daily net assets of each Fund.

TRANSFER AGENT - Forum Shareholder Services, LLC ("FSS") serves as the Trust's
transfer agent and dividend disbursing agent. FSS receives an annual fee from
each Fund of $12,000, plus 0.25% of the average daily net assets of each Fund,
and an annual shareholder account fee of $18 per shareholder account.

DISTRIBUTOR - Forum Fund Services, LLC ("FFS"), a registered broker-dealer and a
member of the National Association of Securities Dealers, Inc., is the Funds'
distributor. For its services, FFS receives, and may reallocate to certain
financial institutions, the sales charges paid on purchases or sales of each
Fund's shares.

OTHER SERVICE PROVIDERS - Forum Accounting Services, LLC ("FAcS") provides fund
accounting services to each Fund. For its services, FAcS receives an annual fee
of $36,000 for Investors Equity Fund, plus certain amounts based upon the number
and type of portfolio transactions made by a Fund. FAcS is compensated $12,000
annually by Equity Index Fund for its services.

11 FORUM FUNDS(R)

<PAGE>

- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
MAY 31, 1999
- --------------------------------------------------------------------------------

NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES

Certain service providers of each Fund have voluntarily undertaken to waive a
portion of their fees and reimburse certain expenses of each Fund so that total
expenses of each Fund would not exceed certain limitations. Fee waivers and
expense reimbursements may be reduced or eliminated at any time. For the year
ended May 31, 1999, expenses reimbursed and fees waived were as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Total
Expenses
Expenses Reimbursed
Reimbursed Fees Waived and Fees
--------------------------------------------------
FAdS FSS FAdS FAcS Payson Waived
--------------- ----------- ------------ ------------- ----------- -----------------
Investors Equity Fund $ - $ - $ - $ - $106,979 $106,979
Equity Index Fund 15,975 31,434 15,594 12,000 - 75,003
-----------------
$181,982
=================
</TABLE>

NOTE 5. SECURITY TRANSACTIONS

The cost of purchases and proceeds from sales of investment securities, other
than short-term investments, held by Investors Equity Fund were $4,725,463 and
$10,370,675, respectively, during the year ended May 31, 1999. Refer to the
Portfolio's financial statements for disclosure of the purchases and sales
figures of the Portfolio in which Equity Index Fund invests.

For federal income tax purposes, the tax basis of investment securities owned as
of May 31, 1999 in the Investors Equity Fund, was $14,986,131, and the net
unrealized appreciation of investment securities was $17,326,653. The aggregate
gross unrealized appreciation for all securities in which there was an excess of
market value over tax cost was $17,375,693, and the aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over
market value was $49,040.

NOTE 6. ACQUISITIONS

As of March 16, 1998, Investors Equity Fund acquired all of the net assets of
the Bank of New Hampshire CTF Balanced Fund's equity segment ("acquired fund").
The net assets and unrealized gain associated with the acquired fund immediately
prior to acquisition were $29,163,311 and $14,697,118, respectively. The shares
issued as a result of the acquisition were 2,613,200.

The net assets of Investors Equity Fund immediately after acquisition were
$30,683,052.

NOTE 7. FEDERAL TAX STATUS OF DIVIDENDS DECLARED DURING THE FISCAL YEAR
(UNAUDITED)

Income Dividends - All the income and any short-term capital gain dividends paid
by the Equity Index Fund were ordinary income for federal income tax purposes.
The percentage of qualifying dividends eligible for the corporate dividends
received deduction was 100.00%.

Capital Gain Dividends - Investors Equity Fund and Equity Index Fund declared
long-term capital gains of $2,513,284 and $1,274, respectively, for the fiscal
year ended May 31, 1999.

12 FORUM FUNDS(R)
<PAGE>

ANNUAL REPORT

MAY 31, 1999

-----------------

- INDEX PORTFOLIO -

<PAGE>

CORE TRUST (DELAWARE)(R)
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
MAY 31, 1999
- --------------------------------------------------------------------------------

To the Board of Trustees and Partners
Core Trust (Delaware)

We have audited the accompanying statement of assets and liabilities of
Core Trust (Delaware) Index Portfolio ("Portfolio"), including the schedule of
investments, as of May 31, 1999, and the related statements of operations,
changes in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Portfolio's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The statement
of changes in net assets for the year ended May 31, 1998 and the financial
highlights for each of the years or periods in the four-year period ended May
31, 1998 were audited by other auditors, whose report dated July 21, 1998
expressed an unqualified opinion on that statement and those financial
highlights.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of May 31, 1999, by correspondence with the custodian and
brokers. 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Portfolio as of May 31, 1999, the results of its operations,
changes in its net assets, and financial highlights for the year ended May 31,
1999, in conformity with generally accepted accounting principles.

/s/ KPMG LLP

Boston, Massachusetts
July 16, 1999

14
<PAGE>

INDEX PORTFOLIO
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
MAY 31, 1999

COMMON STOCKS (96.7%)
<TABLE>
<S> <C> <C> <C> <C> <C>
SHARES SECURITY DESCRIPTION VALUE SHARES SECURITY DESCRIPTION VALUE
- ----------------------------------------------------------- --------------------------------------------------------
AGRICULTURE (0.1%) BUSINESS SERVICES - CONTINUED
39,700 Pioneer Hi-Bred 28,500 Cabletron Systems, Inc.* $ 423,942
International, Inc. $1,488,750
-----------------
APPAREL (0.1%) 127,400 Cendant Corp. 2,348,941
10,700 Liz Claiborne, Inc.# 385,200 23,700 Ceridian Corp. 782,100
19,900 V.F. Corp. 915,400 89,301 Computer Associates
-----------------
1,300,600 International, Inc. 4,225,008
-----------------
AUTOMOTIVE (0.1%) 26,300 Computer Sciences Corp.* 1,701,288
24,900 Autozone, Inc.* 720,549 60,900 Compuware Corp.* 1,891,707
8,700 Pep Boys - Manny, Moe & Jack 164,219 27,400 Dun & Bradstreet Corp. 959,000
11,900 Ryder System, Inc. 285,600 7,500 EG&G, Inc. 222,659
-----------------
1,170,368 81,700 Electronic Data Systems Corp. 4,595,625
-----------------
BANKS AND CREDIT COMPANIES (6.8%) 24,400 Equifax, Inc. 878,400
29,550 AmSouth Bancorp. 838,482 73,400 First Data Corp. 3,298,417
286,874 Bank of America Corp. 18,557,171 52,800 IMS Health, Inc. 1,300,200
126,100 Bank of New York Co., Inc. 4,508,075 23,100 Interpublic Group of Cos., Inc. 1,749,828
194,938 Bank One Corp. 11,026,182 45,922 McKesson HBOC, Inc.# 1,564,217
49,100 BankBoston Corp. 2,326,114 836,800 Microsoft Corp.* 67,518,113
15,800 Bankers Trust Corp. 1,462,490 56,000 Novell, Inc.* 1,316,000
51,500 BB&T Corp.# 1,879,750 27,900 Omnicom Group, Inc. 1,953,000
140,300 Chase Manhattan Corp. 10,171,750 238,625 Oracle Corp.* 5,920,884
25,800 Comerica, Inc. 1,559,289 44,400 Parametric Technology Co.* 616,052
44,100 Fifth Third Bancorp 3,007,069 40,650 Paychex, Inc. 1,204,257
164,286 First Union Corp. 7,567,430 38,600 PeopleSoft, Inc.* 624,838
114,300 Firstar Corp.# 3,293,268 4,400 Shared Medical Systems Corp.# 289,300
94,200 Fleet Financial Group, Inc. 3,873,976 127,600 Sun Microsystems, Inc.* 7,624,100
9,500 Golden West Financial Corp. 901,320 30,900 UST, Inc. 942,450
---------------
34,930 Huntington Bancshares, Inc. 1,209,453 143,073,791
---------------
28,900 J.P. Morgan & Co., Inc. 4,026,134 CHEMICALS AND ALLIED PRODUCTS (11.6%)
75,400 KeyCorp 2,620,150 251,600 Abbott Laboratories 11,369,183
86,600 Mellon Bank Corp. 3,090,540 38,000 Air Products and Chemicals, Inc.1,558,000
26,100 Mercantile Bancorp 1,525,220 9,500 Alberto Culver Co. 251,159
54,100 National City Corp. 3,580,747 10,900 Allergan, Inc.# 1,013,700
18,500 Northern Trust Corp. 1,671,939 16,500 ALZA Corp.*# 588,846
49,900 PNC Bank Corp. 2,856,775 43,600 Avon Products, Inc. 2,155,481
36,700 Regions Financial Corp. 1,390,015 47,400 Baxter International, Inc. 3,060,267
17,700 Republic New York Corp. 1,202,499 329,400 Bristol-Myers Squibb Co. 22,605,076
27,400 SouthTrust Corp. 1,066,888 19,500 Clorox Co. 1,968,285
26,600 State Street Corp. 2,028,250 48,500 Colgate-Palmolive Co. 4,843,939
28,700 Summit Bancorp# 1,174,907 36,700 Dow Chemical Co. 4,459,050
53,100 Suntrust Banks, Inc. 3,584,250 186,600 du Pont (E.I.) de Nemours & Co.12,210,642
44,250 Synovus Financial Corp. 890,532 13,100 Eastman Chemical Co. 663,194
120,778 U.S. Bancorp 3,925,288 21,500 Ecolab, Inc. 913,750
22,800 Union Planters Corp. 941,926 182,300 Eli Lilly & Co. 13,023,060
33,600 Wachovia Corp. 2,965,200 5,400 FMC Corp. 357,417
98,336 Washington Mutual, Inc. 3,755,214 12,300 Goodrich (B.F.) Co.# 498,150
272,600 Wells Fargo Co. 10,904,000 9,800 Great Lakes Chemical Corp. 442,841
-----------------
125,382,293 16,600 Hercules, Inc.# 579,965
-----------------
BUILDING MATERIALS (1.0%) 17,500 International Flavors &
244,400 Home Depot, Inc. 13,900,255 Fragrances, Inc. 719,693
18,000 Louisiana-Pacific Corp. 364,500 222,900 Johnson & Johnson 20,646,119
67,984 Lowe's Cos., Inc. 3,530,925 11,800 Mallinckrodt, Inc. 408,582
-----------------
17,795,680 395,000 Merck & Co., Inc. 26,662,500
-----------------
BUSINESS SERVICES (7.8%) 103,900 Monsanto Co.# 4,311,850
59,500 3COM Corp.* 1,636,250 20,100 Morton International, Inc. 783,900
10,100 Adobe Systems, Inc. 748,666 10,900 Nalco Chemical Co. 365,150
170,300 America Online, Inc.# 20,329,563 215,200 Pfizer, Inc. 23,026,400
9,800 Autodesk Inc. 270,731 84,200 Pharmacia & Upjohn, Inc. 4,667,841
102,100 Automatic Data Processing, Inc. 4,205,249 29,100 PPG Industries, Inc. 1,766,008
39,100 BMC Software, Inc.* 1,933,006 26,100 Praxair, Inc. 1,274,010

</TABLE>

See Notes to Financial Statements. 15 Core Trust (Delaware)
<PAGE>

- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - CONTINUED
MAY 31, 1999

COMMON STOCKS - CONTINUED
<TABLE>
<S> <C> <C> <C> <C> <C>

SHARES SECURITY DESCRIPTION VALUE SHARES SECURITY DESCRIPTION VALUE
- --------------------------------------------------------- --------------------------------------------------------
CHEMICALS AND ALLIED PRODUCTS - CONTINUED FINANCIAL INSTITUTIONS (3.9%)
220,100 Procter & Gamble Co. $ 20,551,840 75,000 American Express Co. $ 9,089,067
27,800 Rohm & Haas Co.# 1,115,479 120,694 Associates First Capital Corp. 4,948,454
243,600 Schering-Plough Corp.# 10,977,226 18,410 Bear Stearns Cos., Inc. 816,944
28,500 Sherwin-Williams Co. 878,163 10,900 Capital One Financial Corp. 1,642,495
16,600 Sigma Aldrich 531,200 66,475 Charles Schwab Corp. 7,033,886
22,000 Union Carbide Corp.# 1,128,878 53,183 Conseco, Inc.# 1,625,409
12,200 W.R. Grace & Co.* 217,314 18,700 Countrywide Credit
Industries, Inc. 769,040
136,200 Warner-Lambert Co. 8,444,400 171,900 Fannie Mae 11,689,200
15,800 Watson Pharmaceuticals, Inc.* 605,338 112,500 Federal Home Loan
-----------------
211,643,896 Mortgage Corp. 6,560,157
-----------------
CONSTRUCTION (0.0%) 41,800 Franklin Resources, Inc. 1,818,300
9,900 Centex Corp.# 366,922 80,106 Household International, Inc. 3,474,602
8,000 Kaufman & Broad Home Corp. 193,006 18,900 Lehman Brothers Holding, Inc. 1,032,413
7,200 Pulte Corp. 171,454 132,902 MBNA Corp. 3,671,365
-----------------
731,382 58,800 Merrill Lynch & Co., Inc 4,939,200
-----------------
ELECTRONICS AND ELECTRICAL EQUIPMENT (8.5%) 95,800 Morgan Stanley-
24,000 Advanced Micro Devices, Inc. 444,000 Dean Witter & Co. 9,244,703
13,700 Andrew Corp.* 212,351 27,400 SLM Holding Corp. 1,137,100
36,000 Ascend Communications, Inc.* 3,336,751 20,700 Transamerica Corp. 1,518,863
---------------
15,700 Cooper Industries, Inc. 778,134 71,011,198
---------------
72,500 Emerson Electric Co. 4,630,939 FOOD AND BEVERAGES (4.5%)
543,300 General Electric Co. 55,246,827 6,100 Adolph Coors Co. 289,750
27,700 General Instrument Corp.* 1,071,646 79,300 Anheuser-Busch Cos., Inc. 5,793,863
13,100 Harris Corp. 495,347 98,077 Archer Daniels Midland Co. 1,471,157
9,300 Honeywell, Inc. 880,014 47,400 Bestfoods, Inc. 2,370,000
552,800 Intel Corp. 29,885,753 11,400 Brown-Forman Corp. 760,241
23,500 LSI Logic Corp.* 870,970 73,700 Campbell Soup Co.# 3,252,014
438,200 Lucent Technologies, Inc.# 24,922,630 408,700 Coca-Cola Co.# 27,919,325
14,900 Maytag Corp. 1,051,382 70,400 Coca-Cola Enterprises, Inc. 2,552,000
41,000 Micron Technology, Inc. 1,555,438 81,200 ConAgra, Inc.# 2,116,280
99,500 Motorola, Inc. 8,239,848 25,400 General Mills, Inc. 2,041,530
27,700 National Semiconductor Corp.* 536,691 60,000 Heinz (H.J.) Co. 2,898,753
6,900 National Service Industries 254,009 23,700 Hershey Foods Corp. 1,285,725
109,980 Nortel Networks Corp.# 8,248,500 67,200 Kellogg Co. 2,331,006
12,800 Raychem Corp. 444,800 243,200 PepsiCo, Inc. 8,709,603
12,500 Scientific-Atlanta, Inc. 441,407 22,600 Quaker Oats Co. 1,493,016
64,400 Tellabs, Inc.* 3,767,400 54,400 Ralston-Ralston Purina Group 1,482,400
64,600 Texas Instruments, Inc.# 7,065,627 53,800 RJR Nabisco Holdings Corp. 1,664,439
9,400 Thomas & Betts Corp.# 402,441 151,100 Sara Lee Corp. 3,626,400
12,600 Whirlpool Corp. 812,700 66,100 Seagram Co. Ltd.# 3,433,070
-----------------
155,595,605 94,824 Unilever NV - NY Shares# 6,193,023
-----------------
ENTERTAINMENT (0.7%) 19,300 Wrigley (Wm) Jr. Co.# 1,680,310
---------------
21,000 Harrah's Entertainment, Inc.# 454,131 83,363,905
---------------
36,000 Unicom Corp. 1,523,252 FURNITURE AND FIXTURES (0.1%)
340,800 Walt Disney Co.# 9,925,806 56,300 Masco Corp. 1,608,074
----------------- ---------------
11,903,189 GROCERY STORES (0.7%)
-----------------
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY 40,700 Albertson's, Inc.# 2,177,450
AND TRANSPORTATION EQUIPMENT (0.8%) 45,600 American Stores Co. 1,504,800
5,100 Ball Corp. 248,312 6,400 Great Atlantic & Pacific Tea Co. 209,600
11,350 Crane Co. 341,209 68,200 Kroger Co.*# 3,993,970
20,300 Crown Cork & Seal Co., Inc. 636,916 80,600 Safeway, Inc.*# 3,747,900
22,200 Danaher Corp. 1,341,714 24,600 Winn-Dixie Stores, Inc.# 880,992
---------------
28,300 Fortune Brands, Inc. 1,156,770 12,514,712
---------------
183,900 Gillette Co. 9,378,900 HEALTH SERVICES (0.3%)
17,950 Parker-Hannifin Corp. 784,194 107,000 Columbia HCA Healthcare Corp. 2,521,190
10,900 Snap-On, Inc. 394,447 18,400 HCR Manor Care, Inc.* 492,200
14,700 Stanley Works 478,673 70,200 HEALTHSOUTH Corp.*# 938,928
-----------------
14,761,135 5,631 Lifepoint Hospitals, Inc.* 56,310
-----------------

</TABLE>

See Notes to Financial Statements. 16 Core Trust (Delaware)
<PAGE>

- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - CONTINUED
MAY 31, 1999

COMMON STOCKS - CONTINUED
<TABLE>
<S> <C> <C> <C> <C> <C>

SHARES SECURITY DESCRIPTION VALUE SHARES SECURITY DESCRIPTION VALUE
- ----------------------------------------------------------- --------------------------------------------------------
HEALTH SERVICES - CONTINUED INSURANCE - CONTINUED
51,400 Tenet Healthcare Corp.* $ 1,259,300 27,700 Cincinnati Financial Corp. $ 1,140,896
5,631 Triad Hospitals, Inc.* 57,018 374,341 Citigroup, Inc. 24,799,967
-----------------
5,324,946 38,700 Hartford Financial
Services Group 2,447,775
-----------------
HEAVY CONSTRUCTION OTHER THAN 27,700 Humana, Inc. 347,982
BUILDING CONSTRUCTION-CONTRACTORS (0.1%) 17,550 Jefferson-Pilot Corp. 1,187,917
12,500 Fluor Corp. 465,625 16,700 Lincoln National Corp. 1,699,225
6,800 Foster Wheeler Corp. 93,500 18,900 Loews Corp. 1,536,809
44,900 Halliburton Co. 1,857,738 42,650 Marsh & McLennan Cos., Inc. 3,102,790
-----------------
2,416,863 16,400 MBIA, Inc. 1,120,330
-----------------
INDUSTRIAL AND COMMERCIAL MACHINERY 18,100 MGIC Investment Corp. 871,065
AND COMPUTER EQUIPMENT (8.5%) 12,000 Progressive Corp. 1,684,502
22,600 Apple Computer, Inc.*# 995,814 22,400 Provident Companies, Inc. 875,001
61,200 Applied Materials, Inc.* 3,362,180 23,450 Providian Financial Corp. 2,249,738
54,270 Baker Hughes, Inc. 1,689,160 22,600 Safeco Corp. 992,990
14,500 Black & Decker Corp. 825,597 39,156 St. Paul Cos., Inc.# 1,392,492
3,900 Briggs & Stratton Corp. 243,750 23,300 Torchmark Corp. 777,640
15,200 Brunswick Corp. 364,800 30,900 United Healthcare Corp. 1,799,925
12,300 Case Corp. 578,100 23,000 Unum Corp. 1,237,690
---------------
59,500 Caterpillar, Inc. 3,265,066 91,803,776
---------------
6,400 Cincinnati Milacron, Inc. 136,400 LODGING (0.1%)
261,800 Cisco Systems, Inc.* 28,503,477 43,300 Hilton Hotels Corp. 595,375
279,693 Compaq Computer Corp. 6,625,232 40,200 Marriott International, "A" 1,530,115
7,000 Cummins Engine Co., Inc. 354,381 32,600 Mirage Resorts, Inc.* 668,300
---------------
8,300 Data General Corp.* 108,944 2,793,790
---------------
39,500 Deere & Co. 1,503,469 MEASURING, ANALYZING, AND CONTROLLING INSTRUMENTS;
421,800 Dell Computer Corp.*# 14,525,738 PHOTOGRAPHIC, MEDICAL AND OPTICAL GOODS (1.9%)
37,000 Dover Corp. 1,394,442 8,900 Bard (C.R.), Inc. 406,622
83,200 EMC Corp.* 8,288,804 9,300 Bausch & Lomb, Inc. 710,294
25,900 Gateway 2000, Inc.*# 1,575,045 41,200 Becton, Dickinson and Co. 1,596,500
28,000 Halliburton Co. 1,158,504 18,700 Biomet, Inc. 746,835
7,900 Harnischfeger Industries, Inc. 56,783 65,100 Boston Scientific Corp.*# 2,469,737
32,600 Hasbro, Inc. 933,175 53,700 Eastman Kodak Co. 3,631,469
168,300 Hewlett-Packard Co. 15,872,797 49,900 Guidant Corp. 2,495,000
306,000 IBM Corp. 35,591,627 11,600 Honeywell, Inc. 1,097,653
27,200 Ingersoll-Rand Co. 1,732,302 14,100 Johnson Controls, Inc. 889,186
15,100 ITT Industries, Inc. 570,025 14,500 KLA-Tencor Corp.* 659,750
5,800 Jostens, Inc. 122,531 96,800 Medtronic, Inc. 6,872,800
69,100 Mattel, Inc.# 1,826,837 7,300 Millipore Corp. 243,644
9,800 McDermott International, Inc. 251,130 4,150 PE Corp - Celera Genomics Group* 70,550
1,300 NACCO Industries, Inc. 97,016 8,300 PE Corp - PE Biosystems Group 927,009
20,700 Pall Corp. 415,296 7,300 Polaroid Corp. 154,218
45,200 Pitney Bowes, Inc. 2,881,500 55,900 Raytheon Co., "B" 3,804,695
40,400 Seagate Technology, Inc.* 1,219,576 13,900 St. Jude Medical, Inc. 469,996
31,100 Silicon Graphics, Inc.* 384,869 7,750 Tektronix, Inc. 179,703
41,700 Solectron Corp.* 2,283,075 26,300 Thermo Electron Corp. 502,992
16,400 Tandy Corp. 1,353,000 108,700 Xerox Corp.# 6,107,590
---------------
28,200 Tenneco Inc. 657,415 34,036,243
---------------
10,300 Timken Co. 211,798 METALS AND MINING (0.6%)
136,801 Tyco International Ltd.# 11,952,993 37,700 Alcan Aluminum Ltd. 1,055,600
43,300 Unisys Corp.* 1,642,699 60,900 Alcoa, Inc.# 3,349,500
-----------------
155,555,347 32,600 Allegheny Teledyne, Inc. 666,264
-----------------
INSURANCE (5.0%) 6,600 ASARCO, Inc. 106,013
23,700 Aetna Life & Casualty, Inc. 2,152,259 61,800 Barrick Gold Corp.# 1,066,050
44,000 AFLAC, Inc. 2,244,000 38,100 Battle Mountain Gold Co. 92,870
136,000 Allstate Corp. 4,955,503 21,600 Bethlehem Steel Corp.* 179,551
41,700 American General Corp. 3,012,825 15,100 Cyprus Amax Minerals Co. 189,697
203,607 American International Group, Inc. 23,274,711 20,800 Engelhard Corp. 421,200
42,300 Aon Corp. 1,818,900 27,400 Freeport-McMoRan Copper &
27,000 Chubb Corp. 1,891,694 Gold, Inc., "B" 387,031
34,200 CIGNA Corp. 3,189,150
</TABLE>

See Notes to Financial Statements. 17 Core Trust (Delaware)
<PAGE>

- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - CONTINUED
MAY 31, 1999

COMMON STOCKS - CONTINUED
<TABLE>
<S> <C> <C> <C> <C> <C>

SHARES SECURITY DESCRIPTION VALUE SHARES SECURITY DESCRIPTION VALUE
- --------------------------------------------------------- --------------------------------------------------------
METALS AND MINING - CONTINUED PHARMACEUTICAL PREPARATIONS - CONTINUED
43,100 Homestake Mining Co.# $ 336,720 84,400 Amgen, Inc.* $ 5,338,300
---------------
30,000 Inco, Ltd. 427,500 17,929,363
---------------
27,700 Newmont Mining Corp. 493,407 PRINTING AND PUBLISHING (1.6%)
14,500 Nucor Corp. 724,096 11,600 American Greetings Corp. 332,056
9,600 Phelps Dodge Corp. 497,402 13,300 Deluxe Corp. 479,633
71,780 Placer Dome, Inc.# 798,559 15,500 Dow Jones & Co., Inc. 813,750
10,700 Reynolds Metals Co. 569,108 46,700 Gannett Co., Inc. 3,374,075
14,600 USX-U.S. Steel Group, Inc. 393,292 13,000 Knight-Ridder, Inc.# 684,941
15,300 Worthington Industries, Inc. 196,035 32,700 McGraw-Hill Cos., Inc. 1,696,313
-----------------
11,949,895 8,700 Meredith Corp. 303,961
-----------------
OIL AND GAS EXTRACTION (0.6%) 30,200 New York Times Co. 1,030,575
21,000 Anadarko Petroleum Corp. 787,500 22,300 R.R. Donnelley & Sons Co. 808,375
18,400 Apache Corp. 662,400 203,400 Time Warner, Inc.# 13,843,919
29,452 Burlington Resources, Inc. 1,264,596 12,000 Times Mirror Co. 707,251
8,200 Helmerich & Payne, Inc. 191,164 19,700 Tribune Co. 1,555,072
57,400 Occidental Petroleum Corp. 1,212,583 115,400 Viacom, Inc., "B"* 4,442,900
---------------
13,900 Rowan Cos., Inc. 234,570 30,072,821
---------------
90,500 Schlumberger Ltd. 5,446,975 RESTAURANTS (0.6%)
41,600 Union Pacific Resources 22,800 Darden Restaurants, Inc. 485,926
Group, Inc.# 579,802 224,400 McDonald's Corp. 8,639,400
-----------------
10,379,590 25,350 Tricon Global Restaurants, Inc.*1,476,641
-----------------
OIL REFINING AND RELATED INDUSTRIES (5.1%) 20,700 Wendy's International, Inc. 564,075
---------------
---------------
15,000 Amerada Hess Corp. 899,066 11,166,042
---------------
12,300 Ashland, Inc. 501,225 RETAIL (0.6%)
54,000 Atlantic Richfield Co. 4,519,130 94,500 Gap, Inc. 5,912,156
108,200 Chevron Corp. 10,028,792 37,500 Limited, Inc. 1,832,817
403,000 Exxon Corp. 32,189,629 23,600 Nordstrom, Inc.# 837,800
14,336 Kerr-McGee Corp. 666,629 53,500 TJX Cos., Inc. 1,605,000
---------------
129,300 Mobil Corp. 13,091,625 10,187,773
---------------
42,200 Phillips Petroleum Co. 2,212,867 RUBBER AND PLASTIC PRODUCTS (0.6%)
355,400 Royal Dutch Petroleum Co. 20,102,313 6,700 Armstrong World Industries 390,275
15,500 Sunoco, Inc. 471,783 12,600 Cooper Tire and Rubber Co. 299,250
88,600 Texaco, Inc.# 5,803,300 25,800 Goodyear Tire & Rubber Co. 1,539,943
40,000 Unocal Corp. 1,590,000 41,400 Illinois Tool Works, Inc.# 3,177,450
51,000 USX-Marathon Group, Inc. 1,526,817 46,528 Newell Rubbermaid, Inc. 1,884,390
-----------------
93,603,176 46,900 Nike, Inc. , "B" 2,857,972
-----------------
PAPER AND ALLIED PRODUCTS (1.3%) 9,400 Reebok International Ltd. 186,829
19,300 Avery Dennison Corp. 1,155,590 13,853 Sealed Air Corp.*# 860,619
8,700 Bemis Co., Inc. 328,425 9,600 Tupperware Corp. 213,600
---------------
9,400 Boise Cascade Corp. 372,482 11,410,328
---------------
15,800 Champion International Corp. 809,750 STONE, CLAY, GLASS AND CONCRETE PRODUCTS (0.2%)
36,500 Fort James Corp. 1,336,819 40,500 Corning, Inc. 2,212,319
14,600 Georgia-Pacific Group 1,261,988 9,000 Owens Corning 354,382
24,500 IKON Office Solutions, Inc. 341,473 25,700 Owens-Illinois, Inc.* 783,850
---------------
67,979 International Paper Co.# 3,398,950 3,350,551
---------------
89,800 Kimberly-Clark Corp. 5,270,145 STORES (3.6%)
16,800 Mead Corp. 627,903 18,100 Consolidated Stores Corp.* 622,190
66,700 Minnesota Mining and 16,600 Circuit City Stores 1,192,091
Manufacturing Co. 5,719,525 36,200 Costco Cos., Inc.*# 2,624,501
9,200 Temple-Inland, Inc. 616,400 64,600 CVS Corp. 2,971,600
16,600 Westvaco Corp. 474,141 73,100 Dayton Hudson Corp. 4,605,300
33,000 Weyerhaeuser Co. 2,048,064 17,700 Dilliards, Inc. 621,717
18,400 Willamette Industries, Inc. 779,703 36,689 Dollar General Corp. 974,511
-----------------
24,541,358 34,800 Federated Department
-----------------
PERSONAL SERVICES (0.1%) Stores, Inc.*# 1,896,600
16,200 H&R Block, Inc. 780,641 11,800 Harcourt General, Inc.# 580,415
45,300 Service Corp. International# 869,197 43,700 J.C. Penney Co., Inc. 2,258,746
-----------------
1,649,838 81,700 KMart Corp. 1,256,143
-----------------
PHARMACEUTICAL PREPARATIONS (1.0%) 26,200 Kohl's Corp.* 1,786,513
218,500 American Home Products Corp. 12,591,063
</TABLE>

See Notes to Financial Statements. 18 Core Trust (Delaware)
<PAGE>

- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - CONTINUED
MAY 31, 1999

COMMON STOCKS - CONTINUED
<TABLE>
<S> <C> <C> <C> <C> <C>

SHARES SECURITY DESCRIPTION VALUE SHARES SECURITY DESCRIPTION VALUE
- ----------------------------------------------------------- --------------------------------------------------------
STORES - CONTINUED TRANSPORTATION EQUIPMENT - CONTINUED
6,500 Longs Drug Stores, Inc. $ 226,284 93,698 Delphi Automotive Systems Corp.* $1,838,818
58,050 May Department Stores Co. 2,514,293 11,800 Eaton Corp. 1,028,817
42,900 Rite Aid Corp. 1,072,500 5,700 Fleetwood Enterprises, Inc. 144,999
63,500 Sears, Roebuck and Co. 3,036,097 200,600 Ford Motor Co. 11,446,742
76,400 Staples, Inc.* 2,196,501 21,000 General Dynamics Corp. 1,380,750
41,600 Toys "R" Us, Inc.* 959,403 108,500 General Motors Corp. 7,486,500
165,500 Walgreen Co.# 3,847,875 65,000 Lockheed Martin Corp.# 2,628,443
737,200 Wal-Mart Stores, Inc.# 31,423,150 11,000 Navistar International Corp.* 543,131
-----------------
66,666,430 11,400 Northrop Grumman Corp. 769,500
-----------------
TELECOMMUNICATIONS (9.7%) 12,900 PACCAR, Inc. 726,436
94,900 Airtouch Communications, Inc.* 9,537,450 31,500 Rockwell International Corp. 1,738,408
45,600 Alltel Corp. 3,268,953 26,200 Textron, Inc. 2,333,442
182,200 Ameritech Corp. 11,991,044 19,900 TRW, Inc. 996,249
521,661 AT&T Corp.# 28,951,854 74,800 United Technologies Corp. 4,642,280
---------------
257,374 Bell Atlantic Corp. 14,091,230 51,059,502
---------------
323,300 BellSouth Corp. 15,255,723 UTILITIES - ELECTRIC, GAS AND SANITARY SERVICES (3.2%)
117,100 CBS Corp. 4,888,925 31,600 AES Corp.# 1,572,100
22,800 CenturyTel, Inc. 873,525 22,800 Ameren Corp. 933,378
53,600 Clear Channel 31,800 American Electric Power Co. 1,379,332
Communications, Inc.# 3,540,952 26,200 Browning-Ferris Industries 1,087,300
122,600 Comcast Corp., "A"# 4,720,100 25,100 Carolina Power & Light Co. 1,098,125
28,400 Frontier Corp. 1,494,553 35,300 Central & Southwest Corp. 908,975
160,000 GTE Corp. 10,090,004 26,300 CINergy Corp. 897,493
11,900 King World Productions, Inc. 397,164 19,500 CMS Energy Corp.# 906,750
303,895 MCI Worldcom, Inc.*# 26,248,937 35,300 Coastal Corp. 1,361,260
100,600 MediaOne Group, Inc.* 7,431,833 13,850 Columbia Energy Group 740,975
47,700 Nextel Communications, Inc.*# 1,758,940 38,600 Consolidated Edison Co. 1,874,514
324,300 SBC Communications, Inc. 16,579,840 15,900 Consolidated Natural Gas Co. 945,059
74,100 Sprint Corp. (FON Group) 8,354,775 24,700 Constellation Energy Group 770,334
72,900 Sprint Corp. (PCS Group)* 3,280,500 32,400 Dominion Resources, Inc. 1,399,278
83,419 US West, Inc. 4,509,841 24,000 DTE Energy Co. 1,045,502
-----------------
177,266,143 60,000 Duke Energy Corp. 3,618,751
-----------------
TEXTILES (0.0%) 3,700 Eastern Enterprises 128,347
12,000 Fruit of the Loom, Inc.* 123,750 58,500 Edison International 1,608,750
5,900 Russell Corp. 138,285 58,200 Enron Corp. 4,154,037
2,900 Springs Industries, Inc., "A" 114,918 40,800 Entergy Corp.# 1,323,451
-----------------
376,953 39,300 FirstEnergy Corp. 1,250,234
-----------------
TRANSPORTATION - RAILROADS (0.5%) 29,900 FPL Group, Inc. 1,739,810
77,700 Burlington Northern Santa Fe Corp.2,408,700 21,200 GPU, Inc. 923,527
36,000 CSX Corp. 1,689,754 54,800 Laidlaw, Inc. 383,600
18,200 Kansas City Southern 19,000 New Century Energies, Inc. 768,314
Industries, Inc. 1,023,750 31,100 Niagara Mohawk Holdings, Inc. 462,618
62,800 Norfolk Southern Corp. 2,056,700 7,900 Nicor, Inc. 297,241
41,000 Union Pacific Corp. 2,339,564 25,300 Northern States Power Co.# 659,387
-----------------
9,518,468 5,200 Oneok, Inc. 156,000
-----------------
TOBACCO PRODUCTS (0.9%) 49,300 PacifiCorp 896,647
403,600 Philip Morris Cos., Inc. 15,563,826 37,100 Peco Energy Co. 1,815,583
-----------------
TRANSPORTATION - AIRLINES (0.5%) 5,800 People's Energy Corp. 223,300
30,200 AMR Corp.* 1,964,895 63,400 PG&E Corp. 2,139,750
23,500 Delta Airlines, Inc.# 1,348,313 25,100 PP&L Resources, Inc. 753,000
49,000 FDX Corp.* 2,698,068 37,000 Public Service Enterprise
55,750 Southwest Airlines Co. 1,787,486 Group, Inc. 1,551,688
14,500 US Airways Group, Inc. 704,157 47,224 Reliant Energy, Inc. 1,440,335
-----------------
8,502,919 39,850 Sempra Energy# 856,781
-----------------
Transportation - Water (0.2%) 18,300 Sonat, Inc. 648,511
98,700 Carnival Corp. 4,046,700 115,600 Southern Co. 3,280,159
-----------------
Transportation Equipment (2.8%) 46,822 Texas Utilities Co. 2,106,990
92,400 Allied-Signal, Inc. 5,364,981 99,267 Waste Management, Inc. 5,248,478
155,520 Boeing Co.# 6,570,726 70,900 Williams Cos., Inc. 3,673,507
---------------
27,492 Dana Corp. 1,419,280 59,029,171
---------------
</TABLE>

See Notes to Financial Statements. 19 Core Trust (Delaware)

<PAGE>

- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - CONTINUED
MAY 31, 1999
<TABLE>
<S> <C> <C> <C>
COMMON STOCKS - CONTINUED SHORT-TERM INVESTMENTS (2.9%)
PRINCIPAL AMOUNT
SHARES SECURITY DESCRIPTION VALUE (000 OMITTED) SECURITY DESCRIPTION VALUE
- ----------------------------------------------------------- --------------------------------------------------------
WHOLESALE TRADE-DURABLE GOODS (0.1%) UNIT INVESTMENT TRUSTS (0.0%)
29,800 Genuine Parts Co. $ 1,003,889 1 S & P 500, Depository Receipts
15,700 Grainger (W.W.), Inc. 833,085 (Cost $141,212) $ 143,223
---------------
4,800 Potlatch Corp. 189,004 TIME DEPOSITS (2.9%)
-----------------
2,025,978 52,736 Societe Generale, Grand Cayman,
-----------------
WHOLESALE TRADE-NONDURABLE GOODS (0.3%) 4.50%, 6/1/99, at Cost 52,735,996
---------------
45,100 Cardinal Health, Inc. 2,722,913
19,900 Supervalu, Inc. 482,575 Total Short-Term Investments
55,200 Sysco Corp. 1,638,755 (Cost $52,877,209) 52,879,219
----------------- ---------------
4,844,243
-----------------
Total Common Stocks (COST $998,685,912) 1,770,416,611 Total Investments (100.0%)
----------------- (COST $1,058,670,021) $ 1,830,417,018
===============
</TABLE>

BONDS (0.4%)
PRINCIPAL AMOUNT
(000 OMITTED) SECURITY DESCRIPTION VALUE
- -----------------------------------------------------------
CORPORATE (0.2%)
2,000 NationsBank Corp., 5.12%
V/R, 7/1/04+ $ 2,012,006
2,000 Spintab AB, 5.50% V/R, 12/20/04+ 2,000,000
-----------------
Total Corporate Notes 4,012,006
-----------------
U.S. TREASURY OBLIGATIONS (0.2%)
2,130 U.S. T-Bill, 3.96% - 4.55%,
9/16/99 2,100,247
265 U.S. T-Bill, 4.46% - 4.79%,
11/12/99 259,229
785 U.S. T-Bill, 4.44%, 4/27/00 749,706
-----------------
Total U.S. Treasury Obligations 3,109,182
-----------------

Total Bonds (Cost $7,106,901) 7,121,188
-----------------

FINANCIAL FUTURES CONTRACTS++ (0.0%)

<TABLE>
<S> <C> <C> <C>
POSITION CONTRACTS INDEX UNREALIZED LOSS
- -------------------------------------------------------------------------------------------------------------------------
Long 162 S & P 500 Futures, Expiring June 18, 1999 (notional value, $ (935,700)
$52,536,600) ===============
</TABLE>

- -----------------------------------------------------------

* Non-income producing security.
+ Floating Rate Demand Note.
++ At May 31, 1999, $3,180,000 of U.S. Treasury Bills, 9/16/99 -
4/27/00, with a market value of $3,109,182 were pledged to cover
margin requirements for open futures contracts.
# Part or all of this investment is on loan. See Note 6 of Notes to
Financial Statements.
V/R Variable rate -These securities are deemed to have a maturity remaining
until the next adjustment of the interest rate or the longer of the
demand period or readjustment. The interest rates shown reflect the
rate in effect on May 31, 1999.

See Notes to Financial Statements. 20 Core Trust (Delaware)
<PAGE>

Index Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999

<TABLE>
<S> <C>
ASSETS
Investments (Note 2)
Investments, at cost $ 1,058,670,021
Net unrealized appreciation 771,746,997
----------------------
Total investments, at value 1,830,417,018

Collateral for securities loaned (Notes 2 and 6) 170,332,749
Net receivable for daily variation margin on
financial futures contracts (Note 2) 474,950
Receivable for investments sold 122,435
Receivable for dividends, and interest and other receivables 3,005,438
Organization costs, net of amortization (Note 2) 2,749
----------------------
Total Assets 2,004,355,339
----------------------

LIABILITIES
Payable for investments purchased 3,105,409
Payable for securities loaned (Notes 2 and 6) 170,332,749
Payable to custodian (Note 3) 17,076
Payable to investment adviser (Note 3) 237,027
Payable to administrator (Note 3) 4,436
Accrued expenses and other liabilities 17,235
----------------------
Total Liabilities 173,713,932
----------------------

NET ASSETS $ 1,830,641,407
======================
</TABLE>

See Notes to Financial Statements. 21 Core Trust (Delaware)
<PAGE>

INDEX PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS

<TABLE>
<S> <C>
YEAR ENDED
MAY 31, 1999
--------------------
INVESTMENT INCOME
Dividend income $ 21,699,973
Interest income 1,826,068
Securities lending income (Note 2) 412,363
--------------------
Total Investment Income 23,938,404
--------------------

EXPENSES
Advisory (Note 3) 2,351,029
Administration (Note 3) 783,676
Custody (Note 3) 171,735
Accounting (Note 3) 153,500
Legal 5,734
Audit 36,331
Trustees 2,934
Pricing 28,971
Amortization of organization costs (Note 2) 6,072
Miscellaneous 35,927
--------------------
Total Expenses 3,575,909
Fees waived (Note 4) (779,240)
--------------------
Net Expenses 2,796,669
--------------------

NET INVESTMENT INCOME 21,141,735
--------------------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain from securities 21,545,068
Realized gain from financial futures transactions 4,808,254
--------------------
Net realized gain from Investments 26,353,322
--------------------

Net change in unrealized appreciation of securities 248,662,572
Net change in unrealized depreciation of
financial futures transactions (1,352,724)
--------------------
Net change in unrealized appreciation of Investments 247,309,848
--------------------

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 273,663,170
--------------------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 294,804,905
====================
</TABLE>

See Notes to Financial Statements. 22 Core Trust (Delaware)
<PAGE>

INDEX PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<S> <C> <C>
Year Ended May 31,
-----------------------------------------
1999 1998
------------------- -------------------

Net Assets, Beginning of Period $1,385,279,923 $ 455,992,618
------------------- -------------------

OPERATIONS
Net investment income 21,141,735 18,212,835
Net realized gain from investments sold 26,353,322 40,577,843
Net change in unrealized appreciation
of investments 247,309,848 232,315,725
------------------- -------------------
Net increase in net assets
resulting from operations 294,804,905 291,106,403
------------------- -------------------

TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions (Note 7) 338,399,367 791,000,962
Withdrawals (187,842,788) (152,820,060)
------------------- -------------------
Net increase from transactions
in investors' beneficial interest 150,556,579 638,180,902
------------------- -------------------
Net increase in net assets 445,361,484 929,287,305
------------------- -------------------

NET ASSETS, END OF PERIOD $1,830,641,407 $1,385,279,923
=================== ===================
</TABLE>

FINANCIAL HIGHLIGHTS

Portfolio performance for the following periods:
<TABLE>
<S> <C> <C> <C> <C> <C>
Period Ended
----------------------------
Year Ended May 31, May 31, October 31,
-----------------------------------------------------
1999 1998 1997 1996 (b) 1995 (a)
- ---------------------------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets (c):
Expenses, including waiver of fees 0.18% 0.19% 0.11% 0.17% 0.17%
Expenses, excluding waiver of fees 0.23% 0.24% 0.31% 0.32% 0.33%
Net investment income,
including waiver of fees 1.35% 1.60% 2.03% 2.35% 2.42%

Portfolio Turnover Rate 4% 7% 7% 7% 8%
</TABLE>

- ------------------------------------------

(a) For the period November 11, 1994 (commencement of operations) through
October 31, 1995.
(b) For the seven months November 1, 1995 through May 31, 1996.
(c) Ratios for periods of less than one year are annualized.

See Notes to Financial Statements. 23 Core Trust (Delaware)
<PAGE>

NOTE 1. ORGANIZATION

Core Trust (Delaware) ("Core Trust") is organized as a Delaware business trust
and is registered as an open-end management investment company under the
Investment Company Act of 1940 (the "Act"). Core Trust currently has twenty-two
separate investment portfolios. Included in this report is Index Portfolio (the
"Portfolio"), which is a diversified portfolio that commenced operations on
November 11, 1994. Interests in the Portfolio are sold in private placement
transactions without any sales charges to qualified investors, including
open-end management investment companies.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following summarizes the significant accounting policies of the Portfolio:

SECURITIES VALUATION - The Portfolio determines its net asset value at 4:00 pm
EST on each portfolio business dayShort-term securities that mature in sixty
days or less are valued at amortized cost. Equity securities for which market
quotations are readily available are valued using the reported sales price
provided by independent pricing services. If no sales are reported, the mean of
the last bid and ask price is used. If no mean price is available, the last bid
price is used. Fixed income and other securities, for which market quotations
are readily available, are valued using the mean of the last bid and ask price
provided by independent pricing services. If no mean price is available, the
last bid price is used. In the absence of readily available market quotations,
securities are valued at fair value determined in accordance with procedures
adopted by the Core Trust Board of Trustees.

SECURITY TRANSACTIONS AND INVESTMENT INCOME - Investment transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date. Interest income, including amortization of premium or accretion of
discount, is recorded as earned. Identified cost of investments sold is used to
determine realized gain or loss for both financial statement and federal income
tax purposes.

FUTURES CONTRACTS - The Portfolio may invest in futures contracts to enhance
return and to hedge against a decline in the value of securities. A futures
contract is an agreement between two parties to buy and sell a security at a set
price on a future date. Upon entering into such a contract, the Portfolio is
required to pledge to the broker an amount of cash or securities equal to the
minimum "initial margin" requirements of the exchange on which the contract is
traded. Pursuant to the contract, the Portfolio agrees to receive from, or pay
to, the broker an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as "variation margin" and are
recorded by the Portfolio as unrealized gain or loss. When the contract is
closed, the Portfolio records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at the
time it was closed. The potential risk to the Portfolio is that the change in
value of the underlying securities may not correlate to the change in value of
the contracts.

FEDERAL TAXES - The Portfolio is not required to pay federal income taxes on its
net investment income and net capital gain because it is treated as a
partnership for federal income tax purposes. All interest, dividends, gain or
loss of the Portfolio is deemed to have been "passed through" to the interest
holders in proportion to their holdings of the Portfolio regardless of whether
such interest, dividends or gain have been distributed by the Portfolio.

EXPENSE ALLOCATION - Core Trust accounts separately for the assets and
liabilities and operations of each of its portfolios. Expenses that are directly
attributable to more than one portfolio are allocated among the respective
portfolios.

ORGANIZATION COSTS - Costs incurred by the Portfolio in connection with its
organization have been and are amortized using the straight-line method over a
five-year period beginning on the commencement of the Portfolio's operations.

REPURCHASE AGREEMENTS - The Portfolio may invest in repurchase agreements. The
Portfolio, through its custodian, receives delivery of the underlying
securities, whose market value must always exceed the repurchase price. In the
event of default, the Portfolio may have difficulties with the distribution of
the collateral.

24 CORE TRUST (DELAWARE)
<PAGE>

SECURITY LOANS - The Portfolio may receive fees or retain a portion of interest
on the investment securities or cash received as collateral for lending
securities. The Portfolio also continues to receive interest or dividends on the
securities loaned. Security loans are secured by collateral whose market value
must always exceed the market value of the securities loaned, plus accrued
interest. Gain or loss in the market price of the securities loaned that may
occur during the term of the loan is reflected in the value of the Portfolio.

NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES

INVESTMENT ADVISER - The investment adviser for the Portfolio is Norwest
Investment Management, Inc. ("Adviser"), a wholly owned subsidiary of Norwest
Bank Minnesota, N.A. ("Norwest"). Norwest is a subsidiary of Wells Fargo &
Company. Pursuant to an Investment Advisory Agreement, the Adviser receives an
advisory fee at an annual rate of 0.15% of the Portfolio's average daily net
assets.

ADMINISTRATION AND OTHER SERVICE PROVIDERS - The administrator to the Portfolio
is Forum Administrative Services, LLC ("FAdS"). For its services, FAdS receives
a fee at an annual rate of 0.05% of the Portfolio's average daily net assets.

Norwest serves as the custodian for the Portfolio. For its custody services,
Norwest receives a fee at an annual rate of 0.02% of the first $100 million of
the Portfolio's average daily net assets, declining to 0.01% of the average
daily net assets of the Portfolio in excess of $200 million. Norwest also
receives fees for providing services in connection with the securities lending
program.

Forum Accounting Services, LLC, an affiliate of FAdS, provides portfolio
accounting and interest holder recordkeeping services to the Portfolio.

NOTE 4. WAIVERS

For the year ended May 31, 1999, FAdS waived fees of $779,240.

NOTE 5. SECURITIES TRANSACTIONS

The cost of purchases and the proceeds from sales (including maturities) of
securities (excluding short-term investments) during the year ended May 31,
1999, were $208,621,074 and $55,255,404, respectively. The federal tax cost
basis of investments and related gross unrealized appreciation and depreciation
for federal income tax purposes as of May 31, 1999, were $1,059,195,734,
$807,923,181, and $36,701,897, respectively.

NOTE 6. PORTFOLIO SECURITIES LOANED

As of May 31, 1999, the Portfolio had loaned portfolio investments in return for
cash collateral, which was invested in various short-term fixed income
securities. The risk to the Portfolio from securities lending is that the
borrower may not provide additional collateral when required, or return the
securities when due or when called for by the portfolio. The value of the
securities on loan aggregated $158,451,323, and the value of the related
collateral was $170,332,749.

NOTE 7. CONTRIBUTION OF SECURITIES

After the close of business on May 31, 1997, in connection with the commencement
of operations of certain portfolios of Core Trust on June 1, 1997, interest
holders at the time contributed net assets and unrealized gain of $512,437,536
and $115,520,269, respectively, to the Portfolio.

NOTE 8. PORTFOLIO REORGANIZATION

On April 22, 1999, the Board of Trustees of Core Trust approved the
reorganization of the Portfolio into a separate portfolio of Wells Fargo Core
Trust, another open-end registered management investment company. The Wells
Fargo Core Trust portfolio will have substantially similar investment objectives
and policies as the Portfolio. The reorganization is part of a plan to
centralize the management of the Norwest Portfolios and Norwest Advantage Funds,
the principal interest holder of the Norwest Portfolios, under a common Board of
Trustees. Pursuant to Core Trust's Trust Instrument, the the reorganization

25 CORE TRUST (DELAWARE)
<PAGE>

does not require interest holder approval.

NOTE 9. CHANGES IN CERTIFYING ACCOUNTANT

On November 10, 1998, Pricewaterhouse Coopers LLP ("Coopers") resigned as
auditor for Index Portfolio. The Board of Trustees accepted the resignation of
Coopers and approved KPMG LLP ("KPMG") as the new auditors of the Portfolio at
its November 10, 1998 meeting.

The decision to replace Coopers with KPMG was motivated by the fact that KPMG
already serves as independent auditor for sixteen other series of the Trust.
Coopers' principal accountant's report on the Portfolio's financial statements
for the past two fiscal years contained no adverse opinion or disclaimer of
opinion, nor was it qualified or modified as to uncertainty, audit scope or
accounting principles. There were no disagreements with Coopers during the past
two fiscal years, or through the date of its resignation, on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure.

26 CORE TRUST (DELAWARE)

<PAGE>

- --------------------------------
FOR MORE INFORMATION FORUM
- -------------------------------- FUNDS

INVESTORS EQUITY FUND
EQUITY INDEX FUND

TRANSFER AGENT
Forum Shareholder Services, LLC
Two Portland Square
Portland, ME 04101

DISTRIBUTOR
Forum Fund Services, LLC
Two Portland Square
Portland, ME 04101

[Logo]

FORUM FUNDS
P.O. Box 446
Portland, Maine 04112
800-943-6786
800-94FORUM
207-879-0001
www.forumfunds.com

This report is authorized for distribution only to shareholders and
to others who have received a copy of the Funds' prospectus.