FORUM ANNUAL REPORT
FUNDS August 31, 1999
DAILY ASSETS TREASURY
OBLIGATIONS FUND
DAILY ASSETS
GOVERNMENT FUND
DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS
MUNICIPAL FUND
[ACROPOLIS GRAPHIC]
<PAGE>
Table of Contents
A Message to Our Shareholders............................................... 1
FINANCIAL STATEMENTS OF FORUM FUNDS
Independent Auditors Report................................................. 2
Statements of Assets and Liabilities........................................ 3
Statements of Operations.................................................... 4
Statements of Changes in Net Assets......................................... 5
Financial Highlights........................................................ 7
Notes to Financial Statements............................................... 9
FINANCIAL STATEMENTS OF CORE TRUST (DELAWARE)
Independent Auditors Report................................................ 13
Schedules of Investments:
Treasury Cash Portfolio................................................ 14
Government Portfolio................................................... 15
Government Cash Portfolio.............................................. 16
Cash Portfolio......................................................... 17
Municipal Cash Portfolio............................................... 18
Notes to Schedules of Investments.......................................... 20
Statements of Assets and Liabilities....................................... 21
Statements of Operations................................................... 22
Statements of Changes in Net Assets........................................ 23
Notes to Financial Statements.............................................. 24
<PAGE>
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[FORUM LOGO]
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND
ANNUAL REPORT
AUGUST 31, 1999
- --------------------------------------------------------------------------------
Dear Shareholders:
The Daily Assets Funds continued to expand in total net assets, increasing 33%
to $311 million during the fiscal year. Most notably, Daily Assets Cash Fund
leaped 191% to $98 million and Daily Assets Government Obligations Fund grew
176% to $49 million. Success of the Daily Assets Funds is not limited to growth
in assets. Throughout the year, the Daily Assets Funds have consistently
received high rankings in their respective categories by IBC Financial Data,
Inc.
We are again pleased to report IBC's Money Fund ReportTM listed two of our funds
as top performing money funds ranked by August 1999 monthly yield. Daily Assets
Government Fund Institutional Shares was ranked #5 out of 217 funds in the
Government Institutional Category. Daily Assets Municipal Fund Institutional
Shares was ranked #7 out of 81 funds in the Tax-Free Institutional Category. As
usual, we caution you to remember that investment return will fluctuate and past
performance is not a guarantee of future results.
The Daily Assets Funds have fared well over the last twelve months. Yields
remained competitive despite two Federal Funds rate increases since the
beginning of 1999. Our portfolio management team kept the Daily Assets Funds
positioned to respond to market conditions throughout the fiscal year. With
respect to the century change, we also want to reassure you that the Daily
Assets Funds' service providers stand ready to respond quickly to any Y2K
related issues that may arise.
Your continued confidence and support are truly appreciated as we begin our
eighth year of operations. As always, our primary concerns are outstanding
performance and maintenance of your $1.00 per share price through skilled
portfolio management. Please feel free to call us with your questions or
comments at (207) 879-0001.
Sincerely,
/S/ John Y. Keffer
John Y. Keffer
Chairman
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT
$1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
FORUM FUNDS (R)
<PAGE>
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INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
Forum Funds
We have audited the accompanying statements of assets and liabilities of Daily
Assets Treasury Obligations Fund, Daily Assets Government Fund, Daily Assets
Government Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal
Fund, five series of Forum Funds (the Funds), as of August 31, 1999, and the
related statements of operations for the year then ended, statements of changes
in net assets for each of the years or periods in the two-year period then
ended, and the financial highlights for the year ended August 31, 1999 and the
period from January 22, 1998 to August 31, 1998 for Daily Assets Treasury
Obligations Fund, each of the years in the two-year period ended August 31, 1999
and the period from April 1, 1997 to August 31, 1997 for Daily Assets Government
Fund, the year then ended and the period from January 30, 1998 to August 31,
1998 for Daily Assets Government Obligations Fund, each of the years in the
two-year period then ended and the period from October 1, 1996 to August 31,
1997 for Daily Assets Cash Fund and the year then ended and the period from June
25, 1998 to August 31, 1998 for Daily Assets Municipal Fund. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for each of the years in the three-year period ended March 31, 1997
for Daily Assets Government Fund were audited by other auditors whose report
dated May 9, 1997 expressed an unqualified opinion on those financial
highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Daily
Asset Treasury Obligations Fund, Daily Assets Government Fund, Daily Assets
Government Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal
Fund, as of August 31, 1999, the results of their operations, changes in their
net assets and financial highlights for the periods indicated above, in
conformity with generally accepted accounting principles.
/S/ KPMG LLP
Boston, Massachusetts
October 8, 1999
2 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
DAILY ASSETS DAILY ASSETS
TREASURY DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS
OBLIGATIONS GOVERNMENT OBLIGATIONS CASH MUNICIPAL
FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- ---------------
ASSETS:
Investments in Portfolios
at value (Notes 1 & 2) $ 105,093,745 $ 35,340,504 $ 49,139,035 $ 98,329,142 $ 24,058,089
Organization costs, net of
amortization (Note 2) 3,976 - 4,984 - -
--------------- --------------- --------------- -------------- ---------------
Total assets 105,097,721 35,340,504 49,144,019 98,329,142 24,058,089
--------------- --------------- --------------- -------------- ---------------
LIABILITIES:
Dividends payable 352,577 127,361 134,606 202,070 54,247
Accrued expenses 47,933 25,090 44,257 82,340 9,186
-------------- --------------- --------------- -------------- ---------------
Total liabilities 400,510 152,451 178,863 284,410 63,433
--------------- --------------- --------------- -------------- ---------------
NET ASSETS $ 104,697,211 $ 35,188,053 $ 48,965,156 $ 98,044,732 $ 23,994,656
=============== =============== =============== ============== ===============
COMPONENTS OF NET ASSETS:
Paid in capital $ 104,700,393 $ 35,192,745 $ 48,964,172 $ 98,044,898 $ 23,998,051
Undistributed net investment income 2,499 21,264 - 48 -
Accumulated net realized gain (loss) (5,681) (25,956) 984 (214) (3,395)
--------------- --------------- --------------- -------------- ---------------
NET ASSETS $ 104,697,211 $ 35,188,053 $ 48,965,156 $ 98,044,732 $ 23,994,656
=============== =============== =============== ============== ===============
NET ASSETS BY SHARE CLASS:
Institutional Shares $ 86,295,249 $ 28,709,167 $ 26,626,565 $ 38,925,575 $ 20,623,831
Institutional Service Shares 18,369,374 5,775,403 22,328,027 58,661,029 3,294,977
Investor Shares 32,588 703,483 10,564 458,128 75,848
--------------- --------------- --------------- -------------- ---------------
NET ASSETS $ 104,697,211 $ 35,188,053 $ 48,965,156 $ 98,044,732 $ 23,994,656
=============== =============== =============== ============== ===============
SHARES OF BENEFICIAL INTEREST:
Institutional Shares 86,298,133 28,713,409 26,625,809 38,925,697 20,626,839
Institutional Service Shares 18,369,670 5,775,966 22,327,800 58,661,073 3,295,358
Investor Shares 32,590 703,550 10,563 458,128 75,856
NET ASSET VALUE PER SHARE
(OFFERING AND REDEMPTION
PRICE PER SHARE) $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
</TABLE>
See Notes to Financial Statements. 3 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
DAILY ASSETS DAILY ASSETS
TREASURY DAILY ASSETS GOVERNMENT DAILY ASSETS DAILY ASSETS
OBLIGATIONS GOVERNMENT OBLIGATIONS CASH MUNICIPAL
FUND FUND FUND FUND FUND
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME
ALLOCATED FROM PORTFOLIOS:
Interest income $ 5,014,890 $ 2,016,080 $ 2,233,508 $ 3,642,356 $ 900,527
Net expenses (146,806) (60,478) (52,746) (86,194) (9,644)
---------------- --------------- --------------- --------------- -------------
Net investment income allocated from
Portfolios (Note 2) 4,868,084 1,955,602 2,180,762 3,556,162 890,883
---------------- --------------- --------------- --------------- -------------
EXPENSES:
Administration (Note 3)
Institutional Service Shares 3,464 3,507 6,772 15,440 1,298
Institutional Shares 48,992 16,365 15,401 20,198 12,988
Investor Shares 9 237 5 108 24
Transfer Agent (Note 3)
Institutional Service Shares 19,157 21,102 26,211 44,383 14,718
Institutional Shares 63,155 29,243 28,042 33,137 25,585
Investor Shares 12,098 12,707 12,062 13,095 12,173
Shareholder services (Note 3)
Institutional Service Shares 17,320 17,533 33,862 77,200 6,491
Investor Shares 45 1,186 26 540 120
Distribution - Investor Shares (Note 3) 49 712 26 640 139
Accounting (Note 3) 37,250 37,250 37,250 37,250 37,250
Legal 9,120 3,308 3,561 4,053 2,391
Audit 4,925 4,925 4,925 4,925 4,925
Trustees 7,361 3,032 3,413 5,366 2,153
Compliance 11,728 24,246 14,808 23,539 8,663
Amortization of organization costs (Note 1,173 - 1,427 - -
2)
Miscellaneous 14,011 10,262 7,097 12,358 4,020
---------------- --------------- --------------- --------------- --------------
Total expenses 249,857 185,615 194,888 292,232 132,938
Expenses reimbursed and
fees waived (Note 4) (169,116) (145,362) (125,130) (156,331) (117,633)
---------------- --------------- --------------- --------------- --------------
Net expenses 80,741 40,253 69,758 135,901 15,305
---------------- --------------- --------------- --------------- --------------
NET INVESTMENT INCOME 4,787,343 1,915,349 2,111,004 3,420,261 875,578
NET REALIZED GAIN (LOSS) ON
INVESTMENTS ALLOCATED
FROM PORTFOLIOS (Note 2) (5,681) (5,049) 1,020 (123) (3,395)
---------------- --------------- --------------- --------------- --------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 4,781,662 $ 1,910,300 $ 2,112,024 $ 3,420,138 $ 872,183
================ =============== =============== =============== ==============
</TABLE>
See Notes to Financial Statements. 4 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR OR PERIOD ENDED AUGUST 31, 1998 AND THE YEAR ENDED AUGUST 31,1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DAILY ASSETS DAILY ASSETS
TREASURY DAILY ASSETS GOVERNMENT
OBLIGATIONS GOVERNMENT OBLIGATIONS
FUND FUND FUND
--------------- --------------- -----------------
NET ASSETS - AUGUST 31, 1997 (NOTE 1) $ - $ 44,115,791 $ -
- ------------------------------------- ----------------- ---------------- ----------------
Net investment income 2,653,495 2,364,632 444,768
Net realized gain (loss) on investments allocated from Portfolios 2,499 (21,087) (36)
----------------- ---------------- ----------------
Net increase in net assets from operations 2,655,994 2,343,545 444,732
----------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income-Institutional Shares (2,599,828) (301,047) (403,077)
Net investment income-Institutional Service Shares (53,641) (2,063,585) (41,665)
Net investment income-Investor Shares (26) - (26)
Total distributions to shareholders (2,653,495) (2,364,632) (444,768)
----------------- ---------------- ----------------
CAPITAL SHARE TRANSACTIONS (at $1.00 per share):
Sale of shares-Institutional Shares 236,954,772 40,977,001 30,385,904
Sale of shares-Institutional Service Shares 8,052,682 152,633,913 14,873,215
Sale of shares-Investor Shares 10,100 - 10,100
Reinvestment of distributions-Institutional Shares - 1,072 -
Reinvestment of distributions-Institutional Service Shares 223 210,659 9,382
Reinvestment of distributions-Investor Shares 26 - 26
Redemption of shares-Institutional Shares (126,395,885) (4,883,200) (15,033,804)
Redemption of shares-Institutional Service Shares (3,605,025) (187,454,210) (12,492,821)
----------------- ---------------- ----------------
Net increase from capital share transactions 115,016,893 1,485,235 17,752,002
----------------- ---------------- ----------------
Net increase in net assets 115,019,392 1,464,148 17,751,966
----------------- ---------------- ----------------
NET ASSETS - AUGUST 31, 1998 (INCLUDING (A)) 115,019,392 45,579,939 17,751,966
- -------------------------------------------- ----------------- ---------------- ----------------
OPERATIONS:
Net investment income 4,787,343 1,915,349 2,111,004
Net realized gain (loss) on investments allocated from Portfolios (5,681) (5,049) 1,020
----------------- ---------------- ----------------
Net increase in net assets from operations 4,781,662 1,910,300 2,112,024
----------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income-Institutional Shares (4,483,542) (1,574,915) (1,495,037)
Net investment income-Institutional Service Shares (300,597) (318,474) (615,530)
Net investment income-Investor Shares (705) (20,150) (437)
Net realized gain on investments--Institutional Shares (2,437) - -
Net realized gain on investments--Institutional Service Shares (62) (1,810) -
----------------- ---------------- ----------------
Total distributions to shareholders (4,787,343) (1,915,349) (2,111,004)
----------------- ---------------- ----------------
CAPITAL SHARE TRANSACTIONS (at $1.00 per share):
Sale of shares-Institutional Shares 369,559,185 30,771,529 78,503,113
Sale of shares-Institutional Service Shares 40,662,099 24,286,868 183,158,610
Sale of shares-Investor Shares 26,758 2,002,096 -
Reinvestment of distributions-Institutional Shares - 4,597 -
Reinvestment of distributions-Institutional Service Shares 98,927 266,959 358,305
Reinvestment of distributions-Investor Shares 706 18,772 437
Redemption of shares-Institutional Shares (393,819,939) (38,157,589) (67,229,404)
Redemption of shares-Institutional Service Shares (26,839,236) (28,262,648) (163,578,891)
Redemption of shares-Investor Shares (5,000) (1,317,421) -
----------------- ---------------- ----------------
Net increase (decrease) from capital share transactions (10,316,500) (10,386,837) 31,212,170
----------------- ---------------- ----------------
Net increase (decrease) in net assets (10,322,181) (10,391,886) 31,213,190
----------------- ---------------- ----------------
NET ASSETS - AUGUST 31, 1999 (INCLUDING (B)) $ 104,697,211 $ 35,188,053 $ 48,965,156
- -------------------------------------------- ================= ================ ================
(A) Accumulated undistributed net investment income, August 31, 1998 $ - $ 19,454 $ -
================= ================ ================
(B) Accumulated undistributed net investment income, August 31, 1999 $ 2,499 $ 21,264 $ -
================= ================ ================
</TABLE>
See Notes to Financial Statements. 5 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR OR PERIOD ENDED AUGUST 31, 1998 AND THE YEAR ENDED AUGUST 31, 1999
(concluded)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
DAILY ASSETS DAILY ASSETS
CASH MUNICIPAL
FUND FUND
---------------------- ----------------------
NET ASSETS - AUGUST 31, 1997 (NOTE 1) $ 12,076,074 $ -
- ------------------------------------- ---------------------- ----------------------
OPERATIONS:
Net investment income 986,258 122,133
Net realized loss on investments allocated from Portfolios (43) -
---------------------- ----------------------
Net increase in net assets from operations 986,215 122,133
---------------------- ----------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income-Institutional Shares (363,971) (122,106)
Net investment income-Institutional Service Shares (622,260) (14)
Net investment income-Investor Shares (27) (13)
---------------------- ----------------------
Total distributions to shareholders (986,258) (122,133)
---------------------- ----------------------
CAPITAL SHARE TRANSACTIONS (at $1.00 per share):
Sale of shares-Institutional Shares 56,561,878 29,216,681
Sale of shares-Institutional Service Shares 46,338,416 10,005
Sale of shares-Investor Shares 10,100 10,100
Reinvestment of distributions-Institutional Shares - 34,192
Reinvestment of distributions-Institutional Service Shares 32,247 14
Reinvestment of distributions-Investor Shares 26 13
Redemption of shares-Institutional Shares (28,166,064) (8,477,699)
Redemption of shares-Institutional Service Shares (53,211,560) -
---------------------- ----------------------
Net increase from capital share transactions 21,565,043 20,793,306
---------------------- ----------------------
Net increase in net assets 21,565,000 20,793,306
---------------------- ----------------------
NET ASSETS - AUGUST 31, 1998 (INCLUDING (A)) 33,641,074 20,793,306
- -------------------------------------------- ---------------------- ----------------------
OPERATIONS:
Net investment income 3,420,261 875,578
Net realized loss on investments allocated from Portfolio (123) (3,395)
---------------------- ----------------------
---------------------- ----------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income-Institutional Shares (1,992,738) (805,513)
Net investment income-Institutional Service Shares (1,418,542) (68,996)
Net investment income-Investor Shares (8,933) (1,069)
Net realized gain on investments--Institutional Service Shares (48) -
---------------------- ----------------------
Total distributions to shareholders (3,420,261) (875,578)
---------------------- ----------------------
CAPITAL SHARE TRANSACTIONS (at $1.00 per share):
Sale of shares-Institutional Shares 229,434,759 105,434,496
Sale of shares-Institutional Service Shares 409,749,879 22,597,633
Sale of shares-Investor Shares 587,671 64,674
Reinvestment of distributions-Institutional Shares 59,332 48,954
Reinvestment of distributions-Institutional Service Shares 868,037 68,997
Reinvestment of distributions-Investor Shares 6,493 1,067
Redemption of shares-Institutional Shares (218,964,209) (105,629,785)
Redemption of shares-Institutional Service Shares (357,192,027) (19,381,291)
Redemption of shares-Investor Shares (146,154) -
---------------------- ----------------------
Net increase from capital share transactions 64,403,781 3,204,745
---------------------- ----------------------
Net increase in net assets 64,403,658 3,201,350
---------------------- ----------------------
NET ASSETS - AUGUST 31, 1999 (INCLUDING (B)) $ 98,044,732 $ 23,994,656
- -------------------------------------------- ====================== ======================
(A) Accumulated undistributed net investment income, August 31, 1998 $ - $ -
====================== ======================
(B) Accumulated undistributed net investment income, August 31, 1999 $ 48 $ -
====================== ======================
</TABLE>
See Notes to Financial Statements. 6 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
These financial highlights reflect selected data for a share of each class of
each Fund outstanding during the years or periods indicated.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE RATIO TO
NET ASSETS AVERAGE
DISTRIBUTIONS ----------------- NET ASSETS
BEGINNING NET FROM NET ENDING NET NET ASSETS AT ----------
NET ASSET INVESTMENT INVESTMENT NET ASSET NET INVESTMENT TOTAL END OF PERIOD GROSS
VALUE INCOME INCOME VALUE EXPENSES INCOME RETURN (000'S OMITTED)EXPENSES(A)
----- ------ ------ ----- -------- ------ ------ --------------- ----------
DAILY ASSETS TREASURY
OBLIGATIONS FUND
Institutional Shares
Year Ended August 31, 1999 $ 1.00 0.05 (0.05) $ 1.00 0.20% 4.58% 4.67% $ 86,295 0.32%
Period Ended August 31, 1998 (b) 1.00 0.03 (0.03) 1.00 0.20% (c) 5.41% (c) 3.34% 110,561 0.47% (c)
Institutional Service Shares
Year Ended August 31, 1999 1.00 0.04 (0.04) 1.00 0.45% 4.34% 4.46% 18,369 0.89%
Period Ended August 31, 1998 (b) 1.00 0.02 (0.02) 1.00 0.45% (c) 5.16% (c) 2.19% 4,448 1.53% (c)
Investor Shares
Year Ended August 31, 1999 1.00 0.04 (0.04) 1.00 0.87% 3.87% 4.00% 33 100.05%
Period Ended August 31, 1998 (b) 1.00 0.02 (0.02) 1.00 0.78% (c) 5.06% (c) 0.33% 10 727.11% (c)
DAILY ASSETS
GOVERNMENT FUND
Institutional Shares
Year Ended August 31, 1999 1.00 0.05 (0.05) 1.00 0.20% 4.81% 4.92% 28,709 0.61%
Period Ended August 31, 1998 (b) 1.00 0.01 (0.01) 1.00 0.20% (c) 5.26% (c) 0.89% 36,095 0.69% (c)
Institutional Service Shares
Year Ended August 31, 1999 1.00 0.05 (0.05) 1.00 0.45% 4.57% 4.66% 5,775 1.15%
Year Ended August 31, 1998 1.00 0.05 (0.05) 1.00 0.46% 4.93% 5.04% 9,485 0.91%
Period Ended August 31, 1997 (d) 1.00 0.02 (0.02) 1.00 0.50% (c) 4.76% (c) 2.01% 44,116 0.95% (c)
Year Ended March 31, 1997 1.00 0.05 (0.05) 1.00 0.50% 4.70% 4.80% 43,975 0.99%
Year Ended March 31, 1996 1.00 0.05 (0.05) 1.00 0.50% 5.01% 5.18% 43,103 1.06%
Year Ended March 31, 1995 1.00 0.04 (0.04) 1.00 0.37% 4.45% 4.45% 36,329 1.10%
Investor Shares
Period Ended August 31, 1999 (b) 1.00 0.04 (0.04) 1.00 0.75% (c) 4.25% (c) 4.43% 703 5.45% (c)
DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
Institutional Shares
Year Ended August 31, 1999 1.00 0.05 (0.05) 1.00 0.20% 4.85% 4.98% 26,627 0.40%
Period Ended August 31, 1998 (b) 1.00 0.03 (0.03) 1.00 0.20% (c) 5.43% (c) 3.24% 15,352 0.74% (c)
Institutional Service Shares
Year Ended August 31, 1999 1.00 0.05 (0.05) 1.00 0.45% 4.54% 4.72% 22,328 0.80%
Period Ended August 31, 1998 (b) 1.00 0.02 (0.02) 1.00 0.45% (c) 5.16% (c) 2.22% 2,390 2.13% (c)
Year Ended August 31, 1999 1.00 0.04 (0.04) 1.00 0.84% 4.24% 4.32% 11 148.94%
Period Ended August 31, 1998 (b) 1.00 0.02 (0.02) 1.00 0.78% (c) 5.06% (c) 0.35% 10 766.21% (c)
</TABLE>
(a) The ratio of Gross Expenses to Average Net Assets reflects the expense ratio
excluding any fee waivers and expense reimbursements for the Fund and its
corresponding Portfolio.
(b) See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(c) Annualized.
(d) Effective June 19, 1997, the Fund changed its fiscal year end from March 31
to August 31.
See Notes to Financial Statements. 7 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (concluded)
- --------------------------------------------------------------------------------
These financial highlights reflect selected data for a share of each class of
each Fund outstanding during the years or periods indicated.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RATIOS TO AVERAGE RATIO TO
NET ASSETS AVERAGE
DISTRIBUTIONS ----------------- NET ASSETS
BEGINNING NET FROM NET ENDING NET NET ASSETS AT ----------
NET ASSET INVESTMENT INVESTMENT NET ASSET NET INVESTMENT TOTAL END OF PERIOD GROSS
VALUE INCOME INCOME VALUE EXPENSES INCOME RETURN (000'S OMITTED)EXPENSES(A)
----- ------ ------ ----- -------- ------ ------ --------------- ----------
DAILY ASSETS CASH FUND
Institutional Shares
Year Ended August 31, 1999 $ 1.00 0.05 (0.05) $ 1.00 0.20% 4.93% 5.07% $ 38,926 0.35%
Period Ended August 31, 1998 (b) 1.00 0.03 (0.03) 1.00 0.20% (c) 5.46% (c) 2.70% 28,396 0.68% (c)
Institutional Service Shares
Year Ended August 31, 1999 1.00 0.05 (0.05) 1.00 0.45% 4.59% 4.81% 58,661 0.70%
Year Ended August 31, 1998 1.00 0.05 (0.05) 1.00 0.46% 5.22% 5.34% 5,235 0.90%
Period Ended August 31, 1997 (b) 1.00 0.05 (0.05) 1.00 0.52% (c) 5.06% (c) 4.70% 12,076 1.22% (c)
Investor Shares
Year Ended August 31, 1999 1.00 0.04 (0.04) 1.00 0.90% 4.13% 4.40% 458 9.24%
Period Ended August 31, 1998 (b) 1.00 0.02 (0.02) 1.00 0.78% (c) 5.25% (c) 0.37% 10 709.02% (c)
DAILY ASSETS
MUNICIPAL FUND
Institutional Shares
Year Ended August 31, 1999 1.00 0.03 (0.03) 1.00 0.05% 3.10% 3.15% 20,624 0.72%
Period Ended August 31, 1998 (b) 1.00 0.01 (0.01) 1.00 0.12% (c) 3.16% (c) 0.59% 20,773 1.26% (c)
Institutional Service Shares
Year Ended August 31, 1999 1.00 0.03 (0.03) 1.00 0.45% 2.66% 2.77% 3,295 1.21%
Period Ended August 31, 1998 (b) 1.00 1.00 0.59% (c) 2.76% (c) 0.20% 10 721.84% (c)
- -
Investor Shares
Year Ended August 31, 1999 1.00 0.02 (0.02) 1.00 0.88% 2.23% 2.36% 76 33.51%
Period Ended August 31, 1998 (b) 1.00 0.01 (0.01) 1.00 0.78% (c) 2.53% (c) 0.18% 10 749.20% (c)
</TABLE>
(a) The ratio of Gross Expenses to Average Net Assets reflects the expense ratio
excluding any fee waivers and expense reimbursements for the Fund and its
corresponding Portfolio.
(b) See Note 1 of Notes to Financial Statements for date of commencement of
operations.
(c) Annualized.
See Notes to Financial Statements. 8 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
AUGUST 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 nineteen active investment
portfolios. These financial statements relate to Daily Assets Treasury
Obligations Fund, Daily Assets Government Fund, Daily Assets Government
Obligations Fund, Daily Assets Cash Fund and Daily Assets Municipal Fund
(individually, a "Fund", and collectively, "the Funds"), each of which is
diversified. The Funds are authorized under the Trust's Trust Instrument to
issue an unlimited number of shares of beneficial interest without par value.
Each Fund currently is authorized to issue three classes of shares:
Institutional Shares, Institutional Service Shares, and Investor Shares. The
Trust commenced the offering of each class of shares as follows and no other
class of shares currently is outstanding:
<TABLE>
<S> <C>
Daily Assets Treasury Obligations Fund (Institutional Shares) January 22, 1998
Daily Assets Treasury Obligations Fund (Institutional Service Shares) April 1, 1998
Daily Assets Treasury Obligations Fund (Investor Shares) August 6, 1998
Daily Assets Government Fund (Institutional Shares) July 1, 1998
Daily Assets Government Fund (Institutional Service Shares) July 1, 1992
Daily Assets Government Fund (Investor Shares) August 6, 1998
Daily Assets Government Obligations Fund (Institutional Shares) January 30, 1998
Daily Assets Government Obligations Fund (Institutional Service Shares) March 30, 1998
Daily Assets Government Obligations Fund (Investor Shares) August 6, 1998
Daily Assets Cash Fund (Institutional Shares) March 13, 1998
Daily Assets Cash Fund (Institutional Service Shares) October 1, 1996
Daily Assets Cash Fund (Investor Shares) August 6, 1998
Daily Assets Municipal Fund (Institutional Shares) June 25, 1998
Daily Assets Municipal Fund (Institutional Service Shares) August 6, 1998
Daily Assets Municipal Fund (Investor Shares) August 6, 1998
</TABLE>
MASTER-FEEDER ARRANGEMENT - Each Fund currently seeks to achieve its investment
objective by investing all its investable assets in a separate portfolio
(individually, a "Portfolio" and collectively, the "Portfolios") of Core Trust
(Delaware) ("Core Trust"), a registered open-end management investment company
that has the same investment objective and substantially similar policies as the
Fund. Accordingly, each Portfolio directly acquires securities, and a Fund
investing in the Portfolio acquires an indirect interest in those securities.
Each Fund accounts for its investment in a Portfolio as a partnership
investment, and records daily its share of the Portfolio's income, expenses and
realized and unrealized gain and loss. In addition, each Fund incurs its own
expenses. Each Fund may withdraw its investment from its corresponding Portfolio
at any time if the Trust's Board of Trustees (the "Board") determines that it is
in the best interest of the Fund and its shareholders to do so. This is commonly
referred to as a master-feeder arrangement.
The financial statements of the Portfolios are included elsewhere in this report
and should be read in conjunction with the Funds' financial statements. As of
August 31, 1999, Daily Assets Government Fund owned substantially all the
interests of Government Portfolio; the percentage of Treasury Cash Portfolio
owned by Daily Assets Treasury Obligations Fund was 26.7%; the percentage of
Government Cash Portfolio owned by Daily Assets Government Obligations Fund was
6.3%; the percentage of Cash Portfolio owned by Daily Assets Cash Fund was 9.5%;
and Daily Assets Municipal Fund owned substantially all the interests of
Municipal Cash Portfolio.
9 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999 (Continued)
- --------------------------------------------------------------------------------
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 during the fiscal
period. Actual results could differ from those estimates. The following
summarizes the significant accounting policies of the Funds:
SECURITY VALUATION - Each Fund determines its net asset value per share as of
4:00 p.m., Eastern time, on each Fund business day. Each Fund records its
investment in its Portfolio at value. The valuation of securities held in the
Portfolios is discussed in the Notes to Financial Statements of Core Trust
(Delaware), which are included elsewhere in this report.
INVESTMENT INCOME AND EXPENSES - Each Fund records daily its pro rata share of
each Portfolio's income, expenses and realized gain and loss. In addition, each
Fund accrues its own expenses.
ORGANIZATION COSTS - The costs incurred by the Daily Assets Treasury Obligations
Fund and Daily Assets Government Obligations 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.
CLASS SPECIFIC EXPENSES - Each share of each class of a Fund represents an
undivided, proportionate interest in the Fund. The Funds' class specific
expenses include administration fees, shareholder servicing fees, transfer agent
fees and certain other expenses as determined by the Trust's Board.
Institutional Shares and Investor Shares incur shareholder servicing fees and
Investor Shares incur distribution fees. In addition, there are differences
between the classes of shares with respect to the minimum investment required.
FEDERAL TAXES - Each Fund intends to continue to qualify each year as a
regulated investment company and distribute all its net investment income. In
addition, by distributing in each calendar year substantially all its net
investment income, capital gain and certain other amounts, each Fund will not be
subject to a federal excise tax. Therefore, no federal income or excise tax
provision is required.
As of August 31, 1999, Daily Assets Government Fund had capital loss carryovers
available to offset future capital gains, in the amounts of $19,024, expiring in
August 2006 and $986, expiring in August 2007.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions to shareholders of net investment
income are declared daily and paid monthly. Net capital gain, if any, is
distributed to shareholders at least annually. Distributions are based on
amounts calculated in accordance with applicable income tax regulations, 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 each Fund or Portfolio, timing differences and differing
characterizations of distributions made by the Fund.
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER - The investment adviser of each Portfolio is Forum
Investment Advisors, LLC ("Forum Advisors"). Forum Advisors receives an advisory
fee from Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio
based upon the total average daily net assets of those Portfolios ("Total
Portfolio Assets") that is calculated on a cumulative basis at the following
annual rates: 0.06% for the first $200 million of Total Portfolio Assets, 0.04%
of the next $300 million of Total Portfolio Assets and 0.03% of the remaining
Total Portfolio Assets. Forum Advisors receives an advisory fee from Government
Portfolio and Municipal Cash Portfolio at an annual rate of 0.05% of the average
daily net assets of each Portfolio.
10 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999 (Continued)
- --------------------------------------------------------------------------------
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES (CONCLUDED)
ADMINISTRATOR - The administrator of the Funds is Forum Administrative Services,
LLC ("FAdS"). For its administrative services and facilities, FAdS receives from
each Fund a fee at an annual rate of 0.05% of the average daily net assets
attributable to the Institutional Shares, Institutional Service Shares and
Investor Shares of the Fund. In addition, certain legal expenses are charged to
the Funds by FAdS.
TRANSFER AGENT - The transfer agent and dividend disbursing agent for the Funds
is Forum Shareholder Services, LLC ("FSS"). FSS is paid a transfer agent fee at
an annual rate of 0.05%, 0.10% and 0.25% of the average daily net assets
attributable to the Institutional Shares, Institutional Service Shares and
Investor Shares of each Fund, respectively, plus certain account and additional
Fund charges.
SHAREHOLDER SERVICE AGENT - The Trust has adopted a shareholder servicing plan
with respect to Institutional Service Shares and Investor Shares under which the
Trust pays FAdS a shareholder servicing fee at an annual rate of 0.25% of the
average daily net assets attributable to the Institutional Services Shares and
Investor Shares of each Fund. FAdS may pay any or all amounts of these payments
to various institutions that provide shareholder servicing to their customers
who hold Institutional Service Shares or Investor Shares.
DISTRIBUTOR - Forum Fund Services, LLC ("FFS"), a registered broker-dealer and a
member of the National Association of Securities Dealers, Inc, acts as each
Fund's distributor. The Trust has adopted a Distribution Plan pursuant to Rule
12b-1 under the Act with respect to the Investor Shares under which the Trust
may pay FFS a distribution fee at an annual rate of up to 0.15% of the average
daily net assets of the Investor Share class of Daily Assets Government Fund
and, effective January 1, 1999, up to 0.50% of the average daily net assets of
the Investor Share class of each other Fund (See Note 5). The Board's approval
of the plan, however, is subject to the condition that FFS would not charge a
distribution fee of more than 0.30% of the average daily assets of each Fund
(except Daily Assets Government Fund) without seeking Board approval. FFS may
pay any or all amounts of these payments to various institutions that provide
distribution or shareholder services for Investor Shares. The plan obligates the
Funds to pay FFS as compensation for FFS's services and not as reimbursement for
certain expenses incurred. Prior to March 1, 1999, Forum Financial Services,
Inc., provided distribution services to the Funds for similar compensation.
OTHER SERVICE PROVIDERS - Forum Accounting Services, LLC ("FAcS") provides fund
accounting services to the Funds. For its accounting services, FAcS receives
from each Fund an annual fee of $36,000, plus certain additional charges.
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
FAdS, FSS, FFS and FAcS have voluntarily waived a portion of their fees and FAdS
has also assumed certain expenses of the Funds. For the fiscal year ended August
31, 1999, fees waived and expenses reimbursed were as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Administration Transfer Shareholder 12b-1 Accounting Reimbursed
FEE AGENT FEE SERVICE FEE FEE FEE EXPENSES TOTAL
--- --------- ----------- --- --- -------- -----
Daily Assets Treasury Obligations Fund $52,465 $56,168 $17,365 $49 $37,250 $5,819 $169,116
------- ------- ------- ---
Institutional Service Shares 3,464 7,223 17,320 -
Institutional Shares 48,992 36,847 - -
Investor Shares 9 12,098 45 49
Daily Assets Government Fund 20,109 52,137 18,719 712 37,250 16,435 145,362
------ ------ ------ ---
Institutional Service Shares 3,507 11,025 17,533 -
Institutional Shares 16,365 28,424 - -
Investor Shares 237 12,688 1,186 712
</TABLE>
11 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999 (Concluded)
- --------------------------------------------------------------------------------
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES (CONCLUDED)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Administration Transfer Shareholder 12b-1 Accounting Reimbursed
FEE AGENT FEE SERVICE FEE FEE FEE EXPENSES TOTAL
--- --------- ----------- --- --- -------- -----
Daily Assets Government Obligations Fund $22,178 $32,621 $29,885 $26 $37,250 $3,170 $125,130
------- ------- ------- ---
Institutional Service Shares 6,772 - 29,859 -
Institutional Shares 15,401 20,559 - -
Investor Shares 5 12,062 26 26
Daily Assets Cash Fund 35,746 32,028 47,124 640 37,250 3,543 156,331
------ ------ ------ ---
Institutional Service Shares 15,440 - 46,584 -
Institutional Shares 20,198 18,933 - -
Investor Shares 108 13,095 540 640
Daily Assets Municipal Fund 14,310 45,829 6,611 139 37,250 13,494 117,633
------ ------ ----- ---
Institutional Service Shares 1,298 8,585 6,491 -
Institutional Shares 12,988 25,072 - -
Investor Shares 24 12,172 120 139
</TABLE>
NOTE 5. SHAREHOLDERS ACTION VIA CONSENT
Pursuant to a consent and action in lieu of a meeting of shareholders dated
December 22,1998, shareholders of the Investor Share Class of Daily Assets
Treasury Obligations Fund, Daily Assets Government Obligations Fund, Daily
Assets Cash Fund, and Daily Assets Municipal Fund approved a Distribution Plan
between Forum Funds and Forum Fund Services, LLC, effective January 1, 1999,
which authorizes a payment of up to 0.50% of the average daily net assets of the
Investor Class of each named Fund.
NOTE 6. FEDERAL INCOME TAX STATUS OF DIVIDENDS
All dividends distributed by Daily Assets Municipal Fund for the year ended
August 31, 1999, are exempt from federal income tax, other than alternative
minimum tax.
12 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
The Trustees and Interestholders
Core Trust (Delaware)
We have audited the accompanying statements of assets and liabilities of
Treasury Cash Portfolio, Government Portfolio, Government Cash Portfolio, Cash
Portfolio and Municipal Cash Portfolio, five series of Core Trust (Delaware)
(the Portfolios), including the schedules of investments, as of August 31, 1999,
and the related statements of operations for the year then ended and the
statements of changes in net assets for each of the years in the two-year period
then ended for Treasury Cash Portfolio, Government Portfolio, Government Cash
Portfolio, Cash Portfolio, and the year then ended and the period from June 25,
1998 (commencement of operations) to August 31, 1999 for Municipal Cash
Portfolio. These financial statements are the responsibility of the Portfolios'
management. Our responsibility is to express an opinion on these financial
statements based on our audits. The income and expense ratios for the periods
indicated in Note 5 ending prior to April 1, 1997 for Government Portfolio, were
audited by other auditors whose report dated May 9, 1997 expressed an
unqualified opinion on those income and expense ratios.
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 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 August 31, 1999 by correspondence with
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, the financial statements referred to above present fairly, in
all material respects, the financial position of Treasury Cash Portfolio,
Government Portfolio, Government Cash Portfolio, Cash Portfolio and Municipal
Cash Portfolio as of August 31, 1999, the results of their operations for the
year then ended and the changes in their net assets for each of the years or
periods in the two-year period then ended, in conformity with generally accepted
accounting principles.
/S/ KPMG LLP
Boston, Massachusetts
October 8, 1999
13 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - TREASURY CASH PORTFOLIO
AUGUST 31, 1999
- --------------------------------------------------------------------------------
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------- --------------------------------------- -----------------
U.S. TREASURY BILLS (A) (76.1%)
$ 250,000,000 5.27%, 9/15/99 $ 249,497,362
50,000,000 4.53%, 10/21/99 49,692,361
-----------------
Total U.S. Treasury Bills 299,189,723
-----------------
REPURCHASE AGREEMENTS (23.9%)
47,965,000 Bear, Stearns & Co., Inc., 5.42%,
9/01/99, to be repurchased at
$47,972,221; collateralized by various
U.S. Treasury Obligations. 47,965,000
46,000,000 Donaldson, Lufkin & Jenrette Securities
Corp., 5.42%, 9/01/99, to be
repurchased at $46,006,926;
collateralized by various U.S. Treasury
Obligations. 46,000,000
-----------------
Total Repurchase Agreements 93,965,000
-----------------
Total Investments (100%) at Amortized Cost (+) $ 393,154,723
=================
(+) Tax cost of investments is $393,154,723.
See Notes to Financial Statements
and Notes to Schedules of Investments. 14 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - GOVERNMENT PORTFOLIO
AUGUST 31, 1999
- --------------------------------------------------------------------------------
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------ -------------------------------------------- ------------
FEDERAL HOME LOAN BANK - DISCOUNT NOTES (A) (32.7%)
$ 4,000,000 5.03%, 9/02/99 $ 3,999,451
2,000,000 5.10%, 9/03/99 1,999,442
2,500,000 5.13%, 9/03/99 2,499,299
1,000,000 5.01%, 9/17/99 997,822
2,000,000 5.11%, 9/21/99 1,994,459
-------------
Total Federal Home Loan Bank - Discount Notes 11,490,473
-------------
U.S. AGENCY FLOATING RATE DEMAND NOTES (B) (65.6%)
5,000,000 Federal Home Loan Bank, 5.45%, 4/07/00 5,000,000
5,000,000 Student Loan Marketing Assn., 5.37%, 9/16/99 5,000,000
8,000,000 Student Loan Marketing Assn., 5.45%, 1/20/00 8,000,000
5,000,000 Student Loan Marketing Assn., 5.58%, 3/03/00 5,000,000
-------------
-------------
Total U.S. Agency Floating Rate Demand Notes
23,000,000
-------------
CASH MANAGEMENT ACCOUNTS (1.7%)
592,519 Dreyfus Treasury Prime Cash
Management Fund, "A", 4.59% yield 592,519
-------------
Total Investments (100.0%) at Amortized Cost (+) $ 35,082,992
=============
(+) Tax cost of investments is $35,085,336.
See Notes to Financial Statements
and Notes to Schedules of Investments. 15 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - GOVERNMENT CASH PORTFOLIO
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
FACE SECURITY FACE SECURITY
AMOUNT DESCRIPTION VALUE AMOUNT DESCRIPTION VALUE
- ----------------- ------------------------------ ----------------- ---------------- ---------------------------- -----------
U.S. GOVERNMENT SECURITIES (77.2%) SMALL BUSINESS ADMINISTRATION (CONCLUDED)
FEDERAL HOME LOAN BANK (B) (5.1%) $ 1,012,969 Pool #503120, 5.88%, 11/25/20 $1,012,969
$ 25,000,000 5.69%, 2/25/00 $25,000,000 361,205 Pool #503121, 5.88%, 8/25/15 361,205
15,000,000 5.45%, 4/7/00 15,000,000 1,216,165 Pool #503232, 5.63%, 2/25/15 1,216,165
----------------- 712,890 Pool #503278, 5.63%, 2/25/21 712,895
Total Federal Home Loan Bank 40,000,000 2,042,472 Pool #503431, 5.75%, 7/25/21 2,043,556
----------------- 2,324,921 Pool #503461, 5.75%, 9/25/21 2,326,149
1,184,693 Pool #503472, 5.75%, 8/25/21 1,185,259
FEDERAL HOME LOAN BANK - DISCOUNT 666,516 Pool #503553, 5.63%, 11/25/21 664,930
NOTES (A) (19.0%) 4,930,935 Pool #503671, 5.63%, 3/25/22 4,930,935
50,000,000 5.02%, 9/3/99 49,986,069 1,393,582 Pool #503754, 5.63%, 5/25/22 1,393,582
20,000,000 4.71%, 10/6/99 19,908,515 830,604 Pool #503780, 5.63%, 3/25/22 831,725
30,000,000 4.72%, 11/3/99 29,752,200 3,959,273 Pool #503882, 5.50%, 9/25/22 3,954,484
25,000,000 4.70%, 1/26/00 24,520,210 2,803,638 Pool #503892, 5.63%, 7/25/22 2,809,834
25,000,000 5.44%, 2/24/00 24,335,112 4,937,236 Pool #503909, 5.50%, 10/25/22 4,934,322
----------------- 2,209,203 Pool #504015, 5.50%, 1/25/23 2,208,605
Total Federal Home Loan Bank - Discount Notes 148,502,106 4,907,928 Pool #504062, 5.50%, 2/25/23 4,907,928
----------------- 3,882,474 Pool #504074, 5.50%, 2/25/23 3,882,474
1,813,264 Pool #504203, 5.63%, 7/25/13 1,819,568
FEDERAL NATIONAL MORTGAGE ASSOCIATION - DISCOUNT 1,565,582 Pool #504269, 5.63%, 5/25/15 1,568,973
NOTES (A) (38.6%) 1,350,122 Pool #504345, 5.63%, 5/25/18 1,350,122
28,940,000 5.00%, 9/2/99 28,935,977 5,671,146 Pool #504366, 5.38%, 2/25/24 5,665,731
111,103,000 4.97%, 9/14/99 110,903,601 ------------
30,000,000 4.71%, 10/7/99 29,858,850 Total Small Business Administration 66,557,997
28,000,000 4.72%, 10/8/99 27,864,313 ------------
55,000,000 4.70%, 10/12/99 54,705,684
25,000,000 5.41%, 2/24/00 24,338,779 STUDENT LOAN MARKETING ASSOCIATION (B) (6.0%)
25,000,000 5.42%, 2/25/00 24,333,793 15,000,000 5.37%, 11/5/99 15,000,000
Total Federal National Mortgage Association- ----------------- 12,000,000 5.45%, 1/20/00 12,000,000
Discount Notes 300,940,997 20,000,000 5.58%, 3/3/00 20,000,000
----------------- ---------------
Total Student Loan Marketing Association 47,000,000
---------------
Total U.S. Government Securities 603,001,100
---------------
SMALL BUSINESS ADMINISTRATION (B) (8.5%)
246,263 Pool #500545, 7.88%, 3/25/03 246,263
676,416 Pool #501077, 6.50%, 11/25/14 678,217
2,029,893 Pool #501308, 6.50%, 10/25/15 2,067,172
1,733,279 Pool #501543, 6.38%, 7/25/16 1,735,763 REPURCHASE AGREEMENTS (22.8%)
366,961 Pool #501628, 7.88%, 9/25/04 366,961 100,000,000 Bear, Stearns & Co., Inc., 5.35%,
739,972 Pool #501690, 6.13%, 12/25/16 743,772 9/7/99, to be repurchased
899,960 Pool #501898, 6.25%, 6/25/17 904,664 at $100,104,028; collateralized
3,964,934 Pool #502150, 6.00%, 2/25/18 4,016,621 by various U.S. Government
228,101 Pool #502161, 6.00%, 2/25/18 228,101 Agency Securities. 100,000,000
2,074,259 Pool #502208, 6.00%, 2/25/18 2,100,836
729,826 Pool #502306, 6.00%, 2/25/18 737,153 78,240,000 Salomon Smith Barney, 5.42%,
1,026,988 Pool #502613, 6.00%, 4/25/19 1,026,988 9/1/99, to be repurchased at
654,176 Pool #503058, 5.88%, 7/25/15 654,176 $78,251,779; collateralized by
1,269,899 Pool #503082, 5.88%, 8/25/20 1,269,899 various U.S. Treasury Securities. 78,240,000
-------------
Total Repurchase Agreements 178,240,000
-------------
Total Investments (100%) at Amortized Cost (+) $781,241,100
=============
(+) Tax cost of investments is $781,241,440.
</TABLE>
See Notes to Financial Statements
and Notes to Schedules of Investments. 16 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - CASH PORTFOLIO
AUGUST 31,1999
- --------------------------------------------------------------------------------
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- --------------------- -------------------------------------- ----------------
U.S. GOVERNMENT SECURITIES (8.0%)
FEDERAL HOME LOAN BANK (B) (2.4%)
$ 25,000,000 5.69%, 2/25/00 $ 25,000,000
----------------
SMALL BUSINESS ADMINISTRATION (B) (4.1%)
156,062 Pool #500536, 7.00%, 5/25/13 157,210
417,975 Pool #500730, 7.88%, 2/25/04 420,926
933,834 Pool #501733, 6.00%, 2/25/17 946,112
705,234 Pool #501989, 6.13%, 10/25/12 708,042
142,581 Pool #502914, 6.00%, 3/25/15 142,707
1,444,820 Pool #503121, 5.88%, 8/25/15 1,444,820
3,166,579 Pool #503429, 5.75%, 6/25/16 3,166,579
581,230 Pool #503461, 5.75%, 9/25/21 581,545
2,455,550 Pool #503553, 5.63%, 11/25/21 2,449,135
2,090,373 Pool #503754, 5.63%, 5/25/22 2,090,373
3,783,635 Pool #503882, 5.50%, 9/25/22 3,779,054
4,228,835 Pool #503912, 5.50%, 10/25/22 4,226,095
4,220,496 Pool #504015, 5.50%, 1/25/23 4,219,237
17,868,320 Pool #504366, 5.38%, 2/26/24 17,851,081
-----------------
Total Small Business Administration 42,182,916
-----------------
STUDENT LOAN MARKETING ASSOCIATION (B) (1.5%)
15,000,000 4.89%, 11/5/99 15,000,000
----------------
Total U.S. Government Securities 82,182,916
----------------
COMMERCIAL PAPER (56.1%)
20,000,000 American Express Credit Corp.,
5.39%, 10/25/99 19,841,900
20,000,000 American Express Credit Corp.,
5.90%, 2/23/00 19,450,696
20,000,000 American Home Products, 5.95%,
2/25/00 19,439,501
20,000,000 Associates Corp. of North America,
5.41%, 10/25/99 19,841,301
20,000,000 Associates Corp. of North America,
5.92%, 2/24/00 19,445,600
30,000,000 CIT Group Holdings, Inc., 5.19%,
9/2/99 29,995,750
20,000,000 CIT Group Holdings, Inc., 5.22%,
9/7/99 19,982,933
40,000,000 Daimler Chrysler, 5.21%, 9/8/99
39,960,256
35,000,000 Ford Motor Credit Corp., 5.21%,
9/2/99 34,995,013
15,000,000 Ford Motor Credit Corp., 5.90%,
1/24/00 14,656,834
10,000,000 General Electric Capital Corp.,
5.23%, 9/2/99 9,998,572
25,000,000 General Electric Capital Corp.,
5.19%, 9/3/99 24,992,931
15,000,000 General Electric Capital Corp.,
5.92%, 2/22/00 14,588,925
10,000,000 General Dynamics Corp., 5.42%,
10/25/99 9,920,500
10,000,000 General Dynamics Corp., 5.48%,
11/23/99 9,877,114
15,000,000 General Motors Acceptance Corp.,
5.94%, 2/24/00 14,582,734
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- --------------------- -------------------------------------- ----------------
COMMERCIAL PAPER (CONCLUDED)
$ 10,000,000 Goldman Sachs, 4.90%, 9/1/99 $ 10,000,000
10,000,000 Goldman Sachs, 4.90%, 9/13/99 9,984,000
30,000,000 JP Morgan, 4.92%, 10/8/99 29,852,000
30,000,000 Lucent Technologies, Inc., 5.36%, 29,855,350
10/4/99
19,800,000 Monsanto Co., 4.92%, 9/8/99 19,781,443
20,000,000 Procter & Gamble Co., 5.20%, 9/7/99 19,983,000
10,000,000 Procter & Gamble Co., 5.44%, 11/12/99 9,894,000
40,000,000 Prudential Funding Corp., 5.41%, 39,676,723
10/26/99
40,000,000 Salomon Smith Barney, 5.23%, 9/2/99 39,994,289
25,000,000 UBS Finance (Delaware), Inc., 4.91%, 24,863,049
10/12/99
25,000,000 Walt Disney, 5.02%, 9/15/99 24,952,458
----------------
Total Commercial Paper 580,406,872
----------------
CORPORATE NOTES (B) (9.7%)
25,000,000 BA Securities, Inc., 5.50%, 3/23/00 25,000,000
15,000,000 Bear, Stearns & Co., Inc., 5.36%, 15,000,000
1/6/00
15,000,000 Bear, Stearns & Co., Inc., 5.28%, 15,000,000
4/7/00
20,000,000 Chase Manhattan Corp., 5.47%, 1/14/00 19,995,553
5,000,000 General Motors Acceptance Corp., 5.18%, 5,000,014
9/20/99
20,000,000 Goldman Sachs Group L.P., 5.44%, 20,000,000
1/7/00 ----------------
Total Corporate Notes 99,995,567
----------------
REPURCHASE AGREEMENTS (26.2%)
10,000,000 BA Securities, Inc., 5.48%, 9/1/99,
to be repurchased at $10,001,522;
collateralized by various U.S.
Treasury Notes. 10,000,000
125,000,000 Bear, Stearns & Co., Inc., 5.35%,
9/7/99, to be repurchased at
$125,130,034; collateralized by
various U.S. Government
Agency Securities. 125,000,000
50,000,000 Donaldson Lufkin Jenrette, 5.42%,
9/1/99, to be repurchased at
$50,007,528; collateralized by
various U.S. Treasury Strips, I/O 50,000,000
86,090,000 Salomon Smith Barney, 5.42%,
9/1/99 to be repurchased at
$86,102,961.33; collateralized
by various U.S. Treasury Securities. 86,090,000
----------------
Total Repurchase Agreements 271,090,000
================
Total Investments (100%) at Amortized Cost (+) $ 1,033,675,355
================
(+) Tax cost of investments is $1,033,676,989.
See Notes to Financial Statements
and Notes to Schedules of Investments. 17 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - MUNICIPAL CASH PORTFOLIO
AUGUST 31, 1999
- --------------------------------------------------------------------------------
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------ --------------------------------------- -------------------
MUNICIPAL SECURITIES (B) (100%)
ALABAMA (7.1%)
$ 1,100,000 Huntsville, AL, Health Care Authority $ 1,100,000
RV, Series A, MBIA insured, 3.25% V/R,
6/1/27
University of AL, Birmingham, Hospital
600,000 RV, Series B, 3.15% V/R, 10/1/07 600,000
-------------------
1,700,000
-------------------
ARIZONA (4.2%)
Arizona Health Facilities Authority RV,
1,000,000 Pooled Loan Programs, FGIC insured, 1,000,000
3.32% V/R, 10/1/15
-------------------
CONNECTICUT
(4.2%)
Connecticut Health & Education
1,000,000 Facilities Authority RV, Yale 1,000,000
University, Series T, 3.15% V/R, 7/1/29
-------------------
FLORIDA (7.9%)
Alachua County, FL, Health Facilites
1,000,000 RV, Shands Teaching Hospital, Series B, 1,000,000
3.30% V/R, 12/1/26
Tampa, FL, Occupational License Tax RV,
900,000 Series A, FGIC-SPI insured, 3.30% V/R, 900,000
10/1/18
-------------------
1,900,000
-------------------
GEORGIA (6.6%)
Burke County, GA, Pollution Control RV,
1,600,000 Oglethorpe Power Corp., 3.20% V/R, 1,600,000
1/1/16
-------------------
HAWAII (4.2%)
State of Hawaii, Budget & Finance RV,
1,000,000 Queens Health Systems, Series A, 3.30% 1,000,000
V/R, 7/1/26
-------------------
ILLINOIS (4.2%)
Illinois HFA RV, Advocate Health Care,
1,000,000 Series B, 3.35% V/R, 8/15/22 1,000,000
-------------------
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------ --------------------------------------- -------------------
MUNICIPAL SECURITIES (CONTINUED)
INDIANA (8.4%)
$ 1,000,000 Indiana HFA RV, Clarian Health $ 1,000,000
Partners, Series B, 3.25% V/R, 2/15/26
Indianapolis, IN, LOC, Public
1,000,000 Improvement Bond Bank RV, Series B, 1,008,316
5.00%, 2/1/00
-------------------
2,008,316
KENTUCKY (4.2%)
Kentucky EDA, Hospital Facilities RV,
1,000,000 Health Alliance Project, Series C, MBIA 1,000,000
insured, 3.32% V/R, 1/1/22
-------------------
MARYLAND (5.0%)
State of Maryland, Waste Disposal
1,200,000 Authority Resource RV, Harford County, 1,200,000
3.10% V/R, 1/1/08
-------------------
MINNESOTA
(4.8%)
Minneapolis, MN, Special SD, Series A,
1,150,000 4.38%, 2/1/00 1,156,471
-------------------
NEVADA (4.2%)
Clark County, NV, Airport Improvement
1,000,000 RV, Series A, MBIA insured, 3.20% V/R, 1,000,000
7/1/12
-------------------
NEW JERSEY
(4.2%)
New Jersey EDA, Water Facilities RV,
1,000,000 Elizabethtown Water Co. Project, Series 1,000,000
B, AMBAC insured, 2.75% V/R, 6/1/27
-------------------
NEW MEXICO (1.7%)
University of New Mexico RV, AMBAC
400,000 insured, 3.20% V/R, 6/1/06 400,000
-------------------
NORTH CAROLINA
(6.2%)
Charlotte, NC, Airport RV, Series A,
1,500,000 MBIA insured, 3.30% V/R, 7/1/17 1,500,000
-------------------
See Notes to Financial Statements
and Notes to Schedules of Investments. 18 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS - MUNICIPAL CASH PORTFOLIO (concluded)
AUGUST 31, 1999
- --------------------------------------------------------------------------------
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------------ --------------------------------------- -------------------
MUNICIPAL SECURITIES (CONCLUDED)
PENNSYLVANIA
(8.3%)
$ 1,000,000 Pennsylvania State HEHFA, Health $ 1,000,000
Services RV, University of
Pennsylvania, Series B, 3.30% V/R,
1/1/24
York County, PA, IDA, PCR Bonds, Public
1,000,000 Service Electric & Gas, Series A, MBIA 1,000,000
insured, 3.25% V/R, 9/1/20
-------------------
2,000,000
-------------------
TEXAS (10.4%)
Harris County, TX, Health Facilities
1,000,000 Development Corp., Hospital RV, 1,000,000
Memorial Hospital Systems Project, MBIA
insured, Series B, 3.25% V/R, 6/1/24
South Texas, TX, HEFA RV, MBIA insured,
500,000 3.30% V/R, 12/1/27 500,000
Texas State, GO Bonds, Veterans Housing
1,000,000 Assistance Fund I, 3.20% V/R, 12/1/16 1,000,000
-------------------
-------------------
2,500,000
-------------------
WASHINGTON
(4.2%)
State of Washington, GO Bonds, Series
1,000,000 VR 96B, 3.25% V/R, 6/1/20 1,000,000
-------------------
Total Investments (100%) at Amortized Cost (+) $ 23,964,787
===================
(+) Tax cost of investments is $23,964,787.
See Notes to Financial Statements
and Notes to Schedules of Investments. 19 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO SCHEDULES OF INVESTMENTS
- --------------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corporation
EDA Economic Development Authority
FGIC Financial Guaranty Insurance Company
FGIC- SPI Financial Guaranty Insurance Company-Securities Purchase, Inc.
GO General Obligation
HEFA Higher Education Facilities Authority
HEHFA Higher Education & Health Facilities Authority
HFA Housing Finance Authority
IDA Industrial Development Authority
I/O Interest Only
LOC Letter of Credit
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
RV Revenue Bonds
SD School District
V/R Variable Rate
(A) Annualized yields at time of purchase.
(B) Certain 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 August
31, 1999.
See Notes to Financial Statements. 20 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES - PORTFOLIOS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TREASURY GOVERNMENT MUNICIPAL
CASH GOVERNMENT CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- --------------- ---------------- ---------------- ---------------
ASSETS:
Investments (Note 2):
Securities at amortized cost $ 299,189,723 $ 35,082,992 $ 603,001,100 $ 762,585,355 $ 23,964,787
Repurchase agreements at cost 93,965,000 - 178,240,000 271,090,000 -
---------------- --------------- ---------------- ---------------- ---------------
Total investments, at amortized value 393,154,723 35,082,992 781,241,100 1,033,675,355 23,964,787
Cash 15,495 - 18,055 14,704 582
Interest and other receivables 14,147 279,481 2,295,486 3,319,722 89,223
Receivable from Administrator (Note 4) - - - - 30,219
Organization costs, net of
amortization (Note 2) 239 - 4,390 1,187 -
---------------- --------------- ---------------- ---------------- ---------------
Total assets 393,184,604 35,362,473 783,559,031 1,037,010,968 24,084,811
---------------- --------------- ---------------- ---------------- ---------------
LIABILITIES:
Payable to Adviser (Note 3) 11,130 - 24,362 29,640 8,452
Payable to Administrator (Note 3) 16,373 1,509 35,839 43,602 -
Accrued expenses and other liabilities 15,773 20,355 36,414 35,478 18,070
---------------- --------------- ---------------- ---------------- ---------------
Total liabilities 43,276 21,864 96,615 108,720 26,522
---------------- --------------- ---------------- ---------------- ---------------
NET ASSETS $ 393,141,328 $ 35,340,609 $ 783,462,416 $ 1,036,902,248 $ 24,058,289
================ =============== ================ ================ ===============
</TABLE>
See Notes to Financial Statements. 21 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS - PORTFOLIOS
FOR THE YEAR ENDED AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
TREASURY GOVERNMENT MUNICIPAL
CASH GOVERNMENT CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- ---------------- --------------- -------------
INVESTMENT INCOME:
Interest income $ 14,762,244 $ 2,020,339 $ 44,301,720 $ 39,501,086 $ 900,528
--------------- --------------- ---------------- --------------- -------------
EXPENSES:
Investment advisory (Note 3) 105,930 20,197 303,532 266,660 14,330
Administration (Note 3) 153,011 20,197 438,060 385,799 14,330
Custody 72,732 9,137 208,434 183,044 7,165
Accounting (Note 3) 49,500 49,500 49,500 49,500 49,500
Legal 1,593 389 4,778 6,916 513
Audit 7,459 14,343 19,381 17,133 14,315
Trustees 492 74 1,495 1,337 48
Rating fees 22,000 6,000 - - -
Amortization of organization costs
(Note 2) 240 - 4,389 1,187 -
Miscellaneous 10,667 854 24,517 23,320 489
--------------- --------------- ---------------- --------------- -------------
Total expenses 423,624 120,691 1,054,086 934,896 100,690
Expenses reimbursed and fees waived
(Note 4) - (60,096) - - (91,046)
--------------- --------------- ---------------- --------------- -------------
Net expenses 423,624 60,595 1,054,086 934,896 9,644
--------------- --------------- ---------------- --------------- -------------
NET INVESTMENT INCOME 14,338,620 1,959,744 43,247,634 38,566,190 890,884
NET REALIZED GAIN (LOSS) ON
INVESTMENTS SOLD (11,696) (5,051) 24,483 (663) (3,395)
--------------- --------------- ---------------- --------------- -------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 14,326,924 $ 1,954,693 $ 43,272,117 $ 38,565,527 $ 887,489
=============== =============== ================ =============== =============
</TABLE>
See Notes to Financial Statements. 22 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS - PORTFOLIOS
FOR THE YEAR OR PERIOD ENDED AUGUST 31, 1998 AND THE YEAR ENDED AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
TREASURY GOVERNMENT MUNICIPAL
CASH GOVERNMENT CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- -------------- --------------- ---------------- --------------
NET ASSETS - AUGUST 31, 1997 (NOTE 1) $ 71,102,520 $ 44,321,412 $ 476,768,745 $ 259,491,011 $ -
- ------------------------------------- ---------------- -------------- --------------- ---------------- --------------
OPERATIONS:
Net investment income 8,001,296 2,506,524 35,098,110 23,621,908 123,211
Net realized gain (loss) on investments sold 9,432 (21,088) (43,555) 853 -
---------------- -------------- --------------- ---------------- --------------
Net increase in net assets from operation 8,010,728 2,485,436 35,054,555 23,622,761 123,211
---------------- -------------- --------------- ---------------- --------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Contributions 630,794,381 145,773,098 1,930,394,761 1,309,647,918 22,849,987
Withdrawals (445,062,682) (145,816,960) (1,725,093,704) (985,420,846) (2,138,724)
---------------- -------------- --------------- ---------------- --------------
Net transactions in investors' beneficial
interests 185,731,699 (43,862) 205,301,057 324,227,072 20,711,263
---------------- -------------- --------------- ---------------- --------------
Net increase in net assets 193,742,427 2,441,574 240,355,612 347,849,833 20,834,474
---------------- -------------- --------------- ---------------- --------------
NET ASSETS - AUGUST 31, 1998 264,844,947 46,762,986 717,124,357 607,340,844 20,834,474
- ----------------------------- ---------------- -------------- --------------- ---------------- --------------
OPERATIONS:
Net investment income 14,338,620 1,959,744 43,247,634 38,566,190 890,884
Net realized gain (loss) on investments sold (11,696) (5,051) 24,483 (663) (3,395)
---------------- -------------- --------------- ---------------- --------------
Net increase in net assets from operations 14,326,924 1,954,693 43,272,117 38,565,527 887,489
---------------- -------------- --------------- ---------------- --------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Contributions 1,235,422,406 35,329,739 2,886,646,104 2,464,999,269 36,409,301
Withdrawals (1,121,452,949) (48,706,809) (2,863,580,162) (2,074,003,392) (34,072,975)
---------------- -------------- --------------- ---------------- --------------
Net transactions in investors' beneficial
interests 113,969,457 (13,377,070) 23,065,942 390,995,877 2,336,326
---------------- -------------- --------------- ---------------- --------------
Net increase (decrease) in net assets 128,296,381 (11,422,377) 66,338,059 429,561,404 3,223,815
---------------- -------------- --------------- ---------------- --------------
NET ASSETS - AUGUST 31, 1999 $ 393,141,328 $ 35,340,609 $ 783,462,416 $ 1,036,902,248 $ 24,058,289
- ---------------------------- ================ =============== =============== ================= ==============
</TABLE>
See Notes to Financial Statements. 23 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - PORTFOLIOS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF ORGANIZATION
Core Trust (Delaware) ("Core Trust") was organized as a Delaware business trust
on September 1, 1994. Core Trust, which is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"Act"), currently has twenty-one separate investment portfolios. These financial
statements relate to Treasury Cash Portfolio, Government Portfolio, Government
Cash Portfolio, Cash Portfolio and Municipal Cash Portfolio (individually, a
"Portfolio" and, collectively, the "Portfolios"), each of which is diversified.
Government Portfolio commenced operations on February 21, 1996, Municipal Cash
Portfolio commenced operations on June 25, 1998, and the other Portfolios
commenced operations on September 1, 1995. Interests in the Portfolios are sold
in private placement transactions without any sales charge to institutional
clients, including open-end management investment companies. On May 25, 1998,
Treasury Portfolio was renamed Government Portfolio.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of increase and decrease in net assets from operations
during the fiscal period. Actual results could differ from those estimates. The
following represent significant accounting policies of the Portfolios:
SECURITY VALUATION - Each Portfolio determines its net asset value per share as
of 4:00 p.m., Eastern time, on each Portfolio business day, utilizing the
amortized cost method pursuant to Rule 2a-7 under the Act. Under this method,
all investments purchased at a discount or premium are valued by accreting or
amortizing, respectively, the difference between the original purchase price and
the maturity value of the investment over the period to the investment's
maturity.
REPURCHASE AGREEMENTS - Treasury Cash Portfolio, Government Cash Portfolio, and
Cash Portfolio invest in repurchase agreements. Each of these Portfolios,
through its custodian, receives delivery of the underlying collateral, whose
market value must always equal or exceed the repurchase price. The investment
adviser is responsible for determining the value of the underlying collateral.
In the event of default, a Portfolio may have difficulties with the disposition
of any such securities held as collateral.
ORGANIZATION COSTS - The costs incurred by Treasury Cash Portfolio, Government
Cash Portfolio and Cash Portfolio in connection with their organization have
been capitalized and are being amortized using the straight-line method over a
five year period beginning on the commencement of each Portfolio's operations.
FEDERAL TAXES - The Portfolios are not required to pay federal income taxes on
their net investment income and net capital gain as they are treated as
partnerships for federal income tax purposes. All interest, dividends, gain and
loss of the Portfolios are deemed to have been "passed through" to the
interestholders in proportion to their holdings in the Portfolios regardless of
whether such interest, dividends or gain have been distributed by the
Portfolios.
SECURITIES TRANSACTIONS, INTEREST INCOME AND REALIZED GAIN AND LOSS - Securities
transactions are recorded on the trade date. Interest income is accrued as
earned and realized gain and loss on investments sold are recorded on the basis
of identified cost.
24 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - PORTFOLIOS (Continued)
AUGUST 31, 1999
- --------------------------------------------------------------------------------
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER - The investment adviser of each Portfolio is Forum
Investment Advisors, LLC ("Forum Advisors"). Forum Advisors receives an advisory
fee from Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio
based upon the total average daily net assets of those Portfolios ("Total
Portfolio Assets") that is calculated on a cumulative basis at the following
annual rates: 0.06% for the first $200 million of Total Portfolio Assets, 0.04%
of the next $300 million of Total Portfolio Assets and 0.03% of the remaining
Total Portfolio Assets. Forum Advisors receives an advisory fee from Government
Portfolio and Municipal Cash Portfolio at an annual rate of 0.05% of the average
daily net assets of each Portfolio.
ADMINISTRATOR - The administrator of each Portfolio is Forum Administrative
Services, LLC ("FAdS"). For its administrative services and facilities, FAdS
receives from each Portfolio an administration fee at an annual rate of 0.05% of
the average daily net assets of each Portfolio. In addition, certain legal
expenses are charged to the Portfolios by FAdS.
PLACEMENT AGENT - Forum Fund Services, Inc. ("FFS"), a registered broker-dealer
and a member of the National Association of Securities Dealers, Inc., acts as
each Portfolio's placement agent but receives no fee for this service.
OTHER SERVICE PROVIDER - Forum Accounting Services, LLC ("FAcS") serves as the
Portfolios' fund accountant and interestholder recordkeeper. For these services,
FAcS receives a fee from Treasury Cash, Government Cash and Cash Portfolios
based on the lesser of $4,000/month or 0.05% of the Portfolio's average annual
daily net assets, plus additional charges. Government Portfolio and Municipal
Cash Portfolio each pay a fee of $48,000 per year, plus certain additional
charges.
NOTE 4. WAIVER OF FEES
For the year ended August 31, 1999, FAdS and FAcS voluntarily waived a portion
of their fees for certain Portfolios as follows: Government Portfolio
administration fees of $20,197 and accounting fees of $39,899; Municipal Cash
Portfolio administration fees of $14,330 and accounting fees of $46,497. FAdS
also reimbursed certain expenses of Municipal Cash Portfolio in the amount of
$30,219.
25 FORUM FUNDS(R)
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - PORTFOLIOS (Concluded)
AUGUST 31, 1999
- --------------------------------------------------------------------------------
NOTE 5. INCOME AND EXPENSE RATIOS
Income and expense ratios are presented below. During certain periods, various
fees were waived and expenses reimbursed. The ratio of Gross Expenses to Average
Net Assets reflects the expense ratio excluding waivers and reimbursements, if
any.
<TABLE>
<S> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS
Net
Investment Net Gross
INCOME EXPENSES EXPENSES
Treasury Cash Portfolio
Year Ended August 31, 1999............................................... 4.69% 0.14% 0.14%
Year Ended August 31, 1998............................................... 5.34% 0.15% 0.17%
Year Ended August 31, 1997............................................... 5.20% 0.15% 0.18%
Year Ended August 31, 1996............................................... 5.30% 0.15% 0.20%
Government Portfolio
Year Ended August 31, 1999............................................... 4.85% 0.15% 0.30%
Year Ended August 31, 1998............................................... 5.26% 0.15% 0.29%
Period Ended August 31, 1997 (a) (b)..................................... 5.11% 0.15% 0.36%
Year Ended March 31, 1997................................................ 5.04% 0.15% 0.33%
Period Ended March 31, 1996 (a).......................................... 4.99% 0.15% 0.60%
Government Cash Portfolio
Year Ended August 31, 1999............................................... 4.94% 0.12% 0.12%
Year Ended August 31, 1998............................................... 5.52% 0.13% 0.13%
Year Ended August 31, 1997............................................... 5.38% 0.14% 0.14%
Year Ended August 31, 1996............................................... 5.49% 0.14% 0.14%
Cash Portfolio
Year Ended August 31, 1999............................................... 5.00% 0.12% 0.12%
Year Ended August 31, 1998............................................... 5.55% 0.13% 0.13%
Year Ended August 31, 1997............................................... 5.45% 0.15% 0.15%
Year Ended August 31, 1996............................................... 5.50% 0.15% 0.16%
Municipal Cash Portfolio
Year Ended August 31, 1999............................................... 3.11% 0.03% 0.35%
Period Ended August 31, 1998 (a)......................................... 3.18% 0.09% 0.61%
</TABLE>
(a) Annualized.
(b) Effective June 19, 1997, Government Portfolio changed its fiscal year end
from March 31 to August 31.
26 FORUM FUNDS(R)
<PAGE>
FOR MORE INFORMATION FORUM
FUNDS
DAILY ASSETS TREASURY
OBLIGATIONS FUND
DAILY ASSETS
GOVERNMENT FUND
DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS
MUNICIPAL FUND
TRANSFER AGENT
Forum Shareholder Services, LLC
Two Portland Square
Portland, ME 04101
DISTRIBUTOR
Forum Fund Services, LLC
Two Portland Square
Portland, ME 04101
[FORUM LOGO]
FORUM FUNDS
P.O. Box 446
Portland, Me 04112
800-94FORUM (Shareholder Services)
800-95FORUM (Dealer Services)
207-879-0001
www.forumfunds.com
This report is authorized for distribution only to shareholdes and to others who
have received a copy of the Funds' prospectus.
