<PAGE>
THE CRM FUNDS
- ------------------------------------
- ------------------------------------
FUND INFORMATION: SHAREHOLDER ACCOUNT INFORMATION:
Forum Fund Services, LLC Forum Shareholder Services, LLC
Two Portland Square P.O. Box 446
Portland, ME 04101 Portland, ME 04112
(800)-CRM-2883 (800)-844-8258
(800)-276-2883 (207) 879-8910
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT MARCH 31, 1999
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
Other than the conflict in Kosovo, the big news during the last six months was
the Dow Jones closing above the 10,000 mark. The lesser-known fact is that few
active managers were able to tangibly taste the benefits of this latter historic
event. In fact, the average diversified U.S. stock mutual fund (including large,
medium and small stocks, both value and growth) underperformed the Dow's gain of
25.85% and the S&P 500 Index gain of 27.32%. The dramatic narrowness of the
market that characterized 1998 has continued to swell to unprecedented levels
rather than abating. Only three of the thirty stocks within the Dow contributed
more than half of the gains in the index so far this year. The Value Line Index,
on the other hand, which measures the average performance of 1,700 major stocks,
actually declined by -6.4% over the same period. Within the S&P 500 Index,
approximately twenty stocks contributed all of the performance during the first
three months of the year, with the remaining 480 stocks rendering each other
null and void. Only two stocks, Microsoft and America Online, contributed an
alarming one third of the S&P 500 Index performance.
Furthermore, the disparity that widened last year between large stocks and small
stocks, growth stocks and value stocks has continued to expand in 1999. Large
growth stocks have gained a staggering 16.66% over the last twelve months, while
small value stocks have declined -22.03%. If history is to teach us anything,
however, it is that the market and its underlying segments are indeed a current
with a conforming ebb and flow. And while we cannot predict at what point in
time or exactly what event will transpire to effect a reversal of fortune,
surely this party, like all others, shall come to an end. As such, we remain
dedicated to our philosophy and mindful of long-term market cycles. That being
said, the current environment, while difficult in terms of short-term
performance of value investors, is one in which an abundance of opportunity
exists. The lack of attention given to value stocks, and in particular smaller
issues, creates an inefficient marketplace in which we continue to find quality
businesses selling at considerable discounts to both broad market multiples and
industry specific comparables.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING
SMALL VS. LARGE AND GROWTH VS. VALUE SIX MONTHS ONE YEAR THREE YEARS
<S> <C> <C> <C>
Large Stocks (Russell 1000 Index) 26.90% 16.66% 26.81%
Small Stocks (Russell 2000 Index) 10.00% (16.26%) 7.72%
Small Value Stocks (R2000 Value) (1.50%) (22.03%) 8.98%
Small Growth Stocks (R2000 Growth) 21.56% (11.04%) 5.76%
</TABLE>
For the six months ended March 31, 1999, Investor shares of the Small Cap Value
Fund, the Large Cap Value Fund and the Value Fund provided total returns of
- -6.66%, 15.26% and 12.55%, respectively. These returns compare to a -1.50% and
an 18.28% return for the Russell 2000 Value and Russell 1000 Value Indices,
respectively.
INVESTOR SHARE OPERATIONS FOR THE SMALL CAP VALUE, LARGE CAP VALUE AND VALUE
FUNDS COMMENCED 1/27/98, 8/25/98 AND 1/06/98, RESPECTIVELY.
- --------------------------------------------------------------------------------
THE CRM FUNDS
<PAGE>
In the CRM Large Cap Value Fund, the five most positive contributors to
performance were MCI Worldcom, Sun Microsystems, First Data Corp., General
Motors and MediaOne Group, Inc.
This reflects, among other things, a fourth quarter 1998 rally in technology and
utility stocks and a first quarter 1999 rally in financial service and auto
stocks. By the end of the first quarter the fund was nearly "fully invested."
The best performing issues in the CRM Small Cap Value Fund over the last six
months include CommScope, DII Group and Americredit. Our largest recent
additions to the portfolio include Americredit, Systems & Computer Technology,
Terex Corporation, Central Garden & Pet and Tektronix. Several issues that we
recently moved out of the portfolio include Bindley Western, which had tripled
in price over an eighteen-month period and reached our target price, and GTECH
Holdings, due to poor operating performance and concerns over management
direction.
Despite milestone records for many of the narrowly driven indices such as the
S&P 500 and Dow Jones, the U.S. economy continues to look favorable relative to
many other investment opportunities. The shrinking trade deficit and
overwhelming consumer spending fueled an annualized growth in gross domestic
product (GDP) of 4.8% in the fourth quarter of 1998. Early reports show a
continued annualized growth in GDP during the first quarter of 3%, fueled in
part by a recovery in U.S. manufacturing. Many pundits contend that despite the
short-term recovery of markets such as Japan and Mexico, the volatility in Asian
and emerging markets is far from over and have new concerns over the
post-convergence boom in Europe following the recently unified currency. In
light of this we hold fast to our conviction regarding companies that rely less
on foreign expansion and customer base than domestic growth and are more
insulated from such overseas volatility, as evinced by our sale of Glenayre
Technologies.
The daily volatility in stocks has created a stock-pickers market, and we
continue to see opportunities within most of the underlying sectors.
Furthermore, we are increasingly looking for smaller companies who might be
acquired by larger companies whose stock prices have not only driven a wedge
between valuations of large and small stocks, but have given large companies
tremendous currency to effect acquisitions. We hope to benefit from some of this
continued market consolidation. And while much of the world is focused on
momentum stocks at inflated valuations, we maintain our philosophy of buying
understandable, sound businesses at inexpensive relative prices, a strategy that
has proven the test of time over our twenty-five years of experience.
Sincerely,
The CRM Funds Cramer Rosenthal McGlynn, LLC
/s/ Fred M. Filoon /s/ Ronald H. McGlynn /s/ Jay B. Abramson
Fred M. Filoon Ronald H. McGlynn Jay B. Abramson
President President and CEO Executive Vice President
The Russell 3000-Registered Trademark- Index measures the performance of the
3,000 largest U.S. companies, based on total market capitalization. The Russell
1000-Registered Trademark- Index measures the performance of the 1,000 largest
companies in the Russell 3000-Registered Trademark- Index. The Russell
2000-Registered Trademark-Index measures the performance of the 2,000 smallest
companies in the Russell 3000-Registered Trademark- Index. Russell MidCap-TM-
Index measures the performance of the 800 smallest companies in the Russell
1000-Registered Trademark- Index. The Russell 2500-TM- Index measures the
performance of the 2,500 smallest companies in the Russell
3000-Registered Trademark- Index. The Russell 2000-Registered Trademark- Value
Index measures the performance of those Russell 2000-Registered Trademark-
companies with lower price-to-book ratios and lower forecasted growth values.
The Russell 2000-Registered Trademark- Growth Index measures the performance of
those Russell 2000-Registered Trademark- companies with higher price-to-book
ratios and higher forecasted growth values. Lastly, the Russell
1000-Registered Trademark- Value Index measures the performance of those Russell
1000-Registered Trademark- companies with lower price-to-book ratios and lower
forecasted growth values.
These indices do not include the effect of any expenses, which have been
deducted from each Fund's return. All of the indices are unmanaged and
capitalization weighted and are not available for investment. Total return and
principal value of an investment in a Fund will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. Total
return for a Fund assumes reinvestment of dividends and distributions.
PAST PERFORMANCE CANNOT PREDICT NOR GUARANTEE FUTURE RESULTS.
- --------------------------------------------------------------------------------
THE CRM FUNDS
2
<PAGE>
- --------------------------------------------------------------------------------
CRM SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
<C> <S> <C>
COMMON STOCK (98.6%)
AEROSPACE (1.2%)
219,500 OEA, Inc.*.............................. $ 1,810,875
-------------
AUTOMOTIVE PARTS AND EQUIPMENT (0.6%)
105,000 Safety Components International,
Inc.*.................................. 905,625
-------------
BANKING AND FINANCIAL (5.7%)
254,000 AmeriCredit Corp.*...................... 3,333,750
150,000 Community First Bankshares, Inc......... 3,000,000
126,000 Pilgrim America Capital Corp.*.......... 2,394,000
-------------
8,727,750
-------------
BUILDING AND CONSTRUCTION (3.5%)
270,000 Morrison Knudsen Corp.*................. 2,683,125
233,600 Walter Industries, Inc.*................ 2,628,000
-------------
5,311,125
-------------
BUSINESS SERVICES (9.8%)
457,200 Caribiner International, Inc.*.......... 4,171,950
300,700 LGS Group, Inc.*........................ 2,330,425
413,400 R.H. Donnelley Corp..................... 6,020,625
114,200 World Color Press, Inc.*................ 2,426,750
-------------
14,949,750
-------------
COMMUNICATIONS (8.3%)
302,100 Allen Telecom, Inc.*.................... 1,831,481
170,000 COMSAT Corp............................. 4,919,375
130,000 Young Broadcasting Corp.*............... 5,931,250
-------------
12,682,106
-------------
CONSUMER CYCLICALS (2.7%)
415,400 Loews Cineplex Entertainment*........... 4,128,038
-------------
CONSUMER PRODUCTS (4.6%)
206,600 Central Garden & Pet Co.*............... 3,486,375
241,000 Gibson Greetings, Inc.*................. 1,762,312
115,476 United Stationers, Inc.*................ 1,761,009
-------------
7,009,696
-------------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
<C> <S> <C>
ELECTRONIC EQUIPMENT AND COMPONENTS (9.3%)
210,000 CommScope, Inc.*........................ $ 4,396,875
194,200 DII Group, Inc.*........................ 5,680,350
164,300 Tektronix, Inc.......................... 4,148,575
-------------
14,225,800
-------------
ENERGY EXPLORATION AND DISTRIBUTION (3.5%)
180,000 EEX Corp.*.............................. 877,500
77,500 Equitable Resources, Inc................ 2,019,843
184,400 Nuevo Energy Co.*....................... 2,489,400
-------------
5,386,743
-------------
FINANCIAL SERVICES (2.5%)
252,000 Richmond County Financial Corp.......... 3,732,750
-------------
HEALTH CARE (2.8%)
192,300 Acuson Corp.*........................... 2,872,481
46,000 CONMED Corp.*........................... 1,426,000
-------------
4,298,481
-------------
INDUSTRIAL AND COMMERCIAL MACHINERY (5.6%)
396,000 MagneTek, Inc.*......................... 3,316,500
74,800 Millipore Corp.......................... 1,804,550
142,800 Terex Corp.*............................ 3,445,050
-------------
8,566,100
-------------
INDUSTRIAL TECHNOLOGY (4.6%)
308,100 Safety Kleen Corp.*..................... 4,082,325
227,300 UNOVA, Inc.*............................ 2,997,519
-------------
7,079,844
-------------
MEDICAL AND HEALTH TECHNOLOGY AND SERVICES (0.8%)
85,200 ADAC Laboratories*...................... 1,160,850
-------------
METAL INDUSTRIES (1.5%)
38,500 Schnitzer Steel Industries, Inc......... 457,188
229,300 WHX Corp.*.............................. 1,805,737
-------------
2,262,925
-------------
POLLUTION CONTROL (2.2%)
166,200 Superior Services, Inc.*................ 3,292,837
-------------
</TABLE>
* Non-income producing security.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
3
<PAGE>
- --------------------------------------------------------------------------------
CRM SMALL CAP VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
REAL ESTATE (1.3%)
<C> <S> <C>
139,266 Insignia Financial Group, Inc., "A"*.... $ 1,958,428
-------------
REAL ESTATE INVESTMENT TRUST (3.1%)
177,000 SL Green Realty Corp.................... 3,329,813
232,000 Ventas, Inc............................. 1,392,000
-------------
4,721,813
-------------
RESTAURANTS AND LODGING (3.1%)
468,300 Prime Hospitality Corp.*................ 4,653,731
-------------
RETAIL (3.3%)
168,000 Shopko Stores, Inc.*.................... 5,019,000
-------------
SCHOOLS (0.3%)
15,000 Career Education Corp.*................. 519,375
-------------
TECHNOLOGY (12.8%)
152,100 ChoicePoint, Inc.*...................... 7,585,988
70,900 GTECH Holdings Corp.*................... 1,728,187
289,000 Symantec Corp.*......................... 4,894,938
523,900 Systems & Computer Technology Corp.*.... 5,329,000
-------------
19,538,113
-------------
TRANSPORTATION EQUIPMENT (1.9%)
190,600 Mascotech, Inc.......................... 2,954,300
-------------
UTILITIES (3.6%)
205,400 Avista Corp............................. 3,341,451
127,300 Public Service Co. of New Mexico........ 2,164,101
-------------
5,505,552
-------------
TOTAL COMMON STOCK (COST, $159,184,278).............. $ 150,401,607
-------------
<CAPTION>
PRINCIPAL SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -------------
<C> <S> <C>
SHORT-TERM HOLDINGS (1.4%)
CASH MANAGEMENT ACCOUNTS (1.1%)
1,706,995 Forum Daily Assets Cash Fund............ $ 1,706,995
-------------
COMMERCIAL PAPER (0.2%)
250,000 Ford Motor Credit Co.,4.78%, 4/01/99.... 250,000
-------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (0.1%)
250,000 Federal National Mortgage Assn., 4.73%,
4/06/99................................ 249,836
-------------
TOTAL SHORT-TERM HOLDINGS, AT AMORTIZED COST......... $ 2,206,831
-------------
TOTAL INVESTMENTS (100.0%) (COST $161,391,108)....... $ 152,608,438
-------------
-------------
</TABLE>
* Non-income producing security.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
4
<PAGE>
- --------------------------------------------------------------------------------
CRM LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
COMMON STOCK (88.7%)
AEROSPACE (2.4%)
16,300 Lockheed Martin Corp.................... $ 614,306
-----------
AUTOMOTIVE (1.9%)
5,600 General Motors Corp..................... 486,500
-----------
BANKING AND FINANCIAL (7.8%)
5,000 Banc One Corp........................... 275,313
8,000 Bank of New York Co., Inc. (The)........ 287,500
12,500 CIT Group, Inc. (The)................... 382,031
4,900 Chase Manhattan Corp. (The)............. 398,431
2,000 Merrill Lynch & Co., Inc................ 176,875
7,000 Summit Bancorp.......................... 273,000
5,000 Torchmark Corp.......................... 158,125
-----------
1,951,275
-----------
BUSINESS SERVICES (6.1%)
27,700 Cendant Corp............................ 436,275
11,400 Ceridian Corp.*......................... 416,813
15,800 First Data Corp......................... 675,450
-----------
1,528,538
-----------
CHEMICALS AND ALLIED PRODUCTS (2.1%)
3,300 Air Products and Chemicals, Inc......... 113,025
3,000 du Pont (E.I.) de Nemours & Co.......... 174,188
7,500 Rohm & Haas Co.......................... 251,719
-----------
538,932
-----------
COMMUNICATIONS (7.8%)
4,300 AT&T Corp............................... 343,194
3,500 Bell Atlantic Corp...................... 180,906
3,500 GTE Corp................................ 211,750
6,300 MCI Worldcom, Inc.*..................... 557,944
8,400 MediaOne Group, Inc.*................... 533,400
3,000 SBC Telecommunications, Inc............. 141,375
-----------
1,968,569
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
COMPUTER EQUIPMENT (5.1%)
5,500 Ascend Communications, Inc.*............ $ 460,281
4,100 Hewlett-Packard Co...................... 278,031
3,000 IBM Corp................................ 531,750
-----------
1,270,062
-----------
CONSUMER DURABLES (2.4%)
3,000 Maytag Corp............................. 181,125
9,000 Newell Co............................... 427,500
-----------
608,625
-----------
CONSUMER PRODUCTS (3.9%)
4,800 Johnson & Johnson....................... 449,700
2,000 Procter & Gamble Co..................... 195,875
4,900 Warner Lambert Co....................... 324,319
-----------
969,894
-----------
DEFENSE ELECTRONICS (2.4%)
3,000 Raytheon Co., "A"....................... 173,250
7,300 Raytheon Co., "B"....................... 427,963
-----------
601,213
-----------
ELECTRONIC EQUIPMENT AND COMPONENTS (3.3%)
4,000 Honeywell, Inc. 303,250
6,500 Koninklijke (Royal) Philips Electronics
NV 535,844
-----------
839,094
-----------
FINANCIAL SERVICES (2.9%)
6,300 Federal Home Loan Mortgage Corp......... 359,887
5,400 Federal National Mortgage Assn.......... 373,950
-----------
733,837
-----------
FOOD AND BEVERAGE PRODUCTS (3.0%)
7,800 ConAgra, Inc............................ 199,387
2,000 General Mills, Inc...................... 151,125
10,300 PepsiCo, Inc............................ 403,631
-----------
754,143
-----------
</TABLE>
* Non-income producing security.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
5
<PAGE>
- --------------------------------------------------------------------------------
CRM LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
HEALTH CARE (4.5%)
<C> <S> <C>
6,200 Aetna Life & Casualty, Inc.............. $ 514,600
3,000 Baxter International, Inc............... 198,000
40,900 HealthSouth Corp........................ 424,337
-----------
1,136,937
-----------
INDUSTRIAL AND COMMERCIAL MACHINERY (0.6%)
3,000 Ingersoll-Rand Co....................... 148,875
-----------
INSURANCE (4.0%)
8,000 Allstate Corp........................... 296,500
2,500 American General Corp................... 176,250
4,000 Equitable Cos., Inc..................... 280,000
3,400 Marsh & McLennan Cos., Inc.............. 252,238
-----------
1,004,988
-----------
MEDICAL AND HEALTH TECHNOLOGY AND SERVICES (0.9%)
3,500 McKesson HBOC, Inc...................... 231,000
-----------
MINING (0.3%)
1,300 Phelps Dodge Corp....................... 64,025
-----------
OIL AND GAS EXTRACTION (2.2%)
4,000 Enron Corp.............................. 257,000
5,000 Schlumberger Ltd........................ 300,937
-----------
557,937
-----------
PAPER AND ALLIED PRODUCTS (1.5%)
8,900 International Paper Co.................. 375,469
-----------
PETROLEUM REFINING AND RELATED INDUSTRIES (1.1%)
2,000 Mobil Corp.............................. 176,000
2,000 Royal Dutch Petroleum Co................ 104,000
-----------
280,000
-----------
PHARMACEUTICALS (5.1%)
10,200 American Home Products Corp............. 665,550
3,000 Bristol-Myers Squibb Co................. 192,937
5,400 Merck & Co., Inc........................ 433,012
-----------
1,291,499
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
POLLUTION CONTROL (0.9%)
5,000 Waste Management, Inc................... $ 221,875
-----------
RESTAURANTS AND LODGING (1.7%)
15,000 Starwood Hotels & Resorts............... 428,437
-----------
RETAIL (1.6%)
18,000 K-Mart Corp.*........................... 302,625
2,000 Sears, Roebuck and Co................... 90,375
-----------
393,000
-----------
TECHNOLOGY (8.5%)
8,500 Cadence Design Systems, Inc.*........... 218,875
2,800 Microsoft Corp.*........................ 250,950
11,100 Sterling Commerce, Inc.*................ 341,325
2,900 Sun Microsystems, Inc.*................. 362,319
15,000 3COM Corp.*............................. 349,687
2,000 Texas Instruments, Inc.................. 198,500
8,000 Xerox Corp.............................. 427,000
-----------
2,148,656
-----------
TRANSPORTATION (1.3%)
2,000 AMR Corp.*.............................. 117,125
6,000 Burlington Northern Santa Fe Corp....... 197,250
-----------
314,375
-----------
UTILITIES (1.9%)
6,500 Entergy Corp............................ 178,750
6,500 FirstEnergy Corp........................ 181,594
6,000 Sempra Energy........................... 115,125
-----------
475,469
-----------
WHOLESALE-TRADE NONDURABLE GOODS (1.5%)
14,500 Sysco Corp.............................. 381,531
-----------
TOTAL COMMON STOCK (COST, $20,451,899)............... $22,319,061
-----------
</TABLE>
* Non-income producing security.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
6
<PAGE>
- --------------------------------------------------------------------------------
CRM LARGE CAP VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
SHORT-TERM HOLDINGS (11.3%)
CASH MANAGEMENT ACCOUNTS (2.3%)
582,984 Forum Daily Assets Cash Fund............ $ 582,984
-----------
COMMERCIAL PAPER (4.0%)
100,000 Allmerica Financial Corp, 4.9%,
4/08/99................................ 99,905
150,000 Ford Motor Credit Co., 4.73%, 4/01/99... 150,000
200,000 General Electric Capital Corp., 4.85%,
4/07/99................................ 199,838
100,000 General Motors Acceptance Corp., 4.72%,
4/01/99................................ 100,000
100,000 GTE Funding, 4.89%, 4/05/99............. 99,946
100,000 Merrill Lynch & Co., Inc., 4.95%,
4/07/99................................ 99,918
150,000 MetLife Funding, Inc., 4.84%, 4/05/99... 149,919
100,000 Procter & Gamble Co., 4.83%, 4/05/99.... 99,946
-----------
Total Commercial Paper............................... 999,472
-----------
<CAPTION>
PRINCIPAL SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
SHORT-TERM HOLDINGS -- CONTINUED
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (5.0%)
500,000 Federal National Mortgage Assn., 4.73%,
4/06/99................................ $ 499,672
250,000 U.S. Treasury Bill, 4.37%, 4/01/99...... 250,000
500,000 U.S. Treasury Bill, 4.63%, 4/22/99...... 498,650
-----------
Total U.S. Government and Agency Obligations......... 1,248,322
-----------
TOTAL SHORT-TERM HOLDINGS, AT AMORTIZED COST......... $ 2,830,778
-----------
TOTAL INVESTMENTS (100.0%) (COST $23,282,677)........ $25,149,839
-----------
-----------
</TABLE>
* Non-income producing security.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
7
<PAGE>
- --------------------------------------------------------------------------------
CRM VALUE FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
COMMON STOCK (86.3%)
AEROSPACE (2.3%)
10,000 Coltec Industries....................... $ 181,875
-----------
APPAREL (2.0%)
7,700 Polo Ralph Lauren Corp.*................ 153,038
-----------
AUTOMOTIVE (4.9%)
3,000 General Motors Corp..................... 260,625
14,000 Safety Components International,
Inc.*.................................. 120,750
-----------
381,375
-----------
BANKING AND FINANCIAL (10.1%)
4,000 Allmerica Financial Corp................ 220,250
6,000 Bank of New York Co., Inc. (The)........ 215,625
6,100 CIT Group, Inc. (The)................... 186,431
2,000 Chase Manhattan Corp. (The)............. 162,625
-----------
784,931
-----------
BASIC MATERIALS (3.4%)
15,300 Johns Manville Corp..................... 263,925
-----------
BUSINESS SERVICES (5.5%)
12,000 Cendant Corp............................ 189,000
14,000 Convergys Corp.......................... 239,750
-----------
428,750
-----------
CHEMICALS AND ALLIED PRODUCTS (1.5%)
3,300 Arch Chemicals, Inc.*................... 55,275
6,600 Olin Corp............................... 66,412
-----------
121,687
-----------
COMMUNICATIONS (6.2%)
14,000 Cincinnati Bell, Inc.................... 314,125
6,000 COMSAT Corp............................. 173,625
-----------
487,750
-----------
<CAPTION>
SECURITY
SHARES DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
CONSUMER PRODUCTS (3.5%)
4,600 Fortune Brands, Inc..................... $ 177,963
6,000 United Stationers, Inc.*................ 91,500
-----------
269,463
-----------
ELECTRONIC EQUIPMENT AND COMPONENTS (4.2%)
6,800 Raychem Corp............................ 153,425
6,900 Tektronix, Inc.......................... 174,225
-----------
327,650
-----------
FINANCIAL SERVICES (2.0%)
2,800 Federal Home Loan Mortgage Corp......... 159,950
-----------
FOOD AND BEVERAGE PRODUCTS (3.9%)
14,700 Chiquita Brands International, Inc...... 149,756
4,000 PepsiCo, Inc............................ 156,750
-----------
306,506
-----------
HEALTH CARE (11.3%)
6,100 HCR Manor Care.......................... 139,156
27,400 HealthSouth Corp........................ 284,275
9,000 Humana, Inc.*........................... 155,250
4,000 Wellpoint Health Networks, Inc.*........ 303,250
-----------
881,931
-----------
INDUSTRIAL AND COMMERCIAL MACHINERY (2.5%)
4,000 Ingersoll-Rand Co....................... 198,500
-----------
INDUSTRIAL TECHNOLOGIES (1.3%)
7,500 Safety Kleen Corp.*..................... 99,375
-----------
PETROLEUM REFINING (2.5%)
8,000 Conoco, Inc............................. 196,500
-----------
REAL ESTATE INVESTMENT TRUST (2.2%)
5,000 Vornado Realty Trust.................... 172,500
-----------
RESTAURANTS AND LODGING (2.6%)
7,200 Starwood Hotels & Resorts............... 205,650
-----------
</TABLE>
* Non-income producing security.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
8
<PAGE>
- --------------------------------------------------------------------------------
CRM VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES/ SECURITY
WARRANTS DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
RETAIL (7.2%)
16,000 K-Mart Corp.*........................... $ 269,000
1,800 Meyer (Fred), Inc.*..................... 105,975
2,900 Tandy Corp.............................. 185,056
-----------
560,031
-----------
TECHNOLOGY (3.9%)
2,900 Sterling Commerce, Inc.*................ 89,175
4,000 Xerox Corp.............................. 213,500
-----------
302,675
-----------
UTILITIES (3.3%)
3,500 Montana Power Co........................ 257,469
-----------
TOTAL COMMON STOCK (COST, $6,426,052)................ $ 6,741,531
-----------
WARRANT (0.3%)
5,000 Golden State Bancorp, Inc. (COST,
$28,841)............................... $ 24,219
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- -----------
<C> <S> <C>
SHORT-TERM HOLDINGS (13.4%)
CASH MANAGEMENT ACCOUNTS (3.8%)
299,046 Forum Daily Assets Cash Fund............ $ 299,046
-----------
COMMERCIAL PAPER (3.2%)
150,000 Anheuser-Busch Cos., Inc., 4.81%,
4/05/99................................ 149,920
100,000 Caterpillar Financial Services Corp.,
4.97%, 4/06/99......................... 99,930
-----------
Total Commercial Paper............................... 249,850
-----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (6.4%)
400,000 U.S. Treasury Bill, 4.35%, 4/01/99...... 400,000
100,000 U.S. Treasury Bill, 4.63%, 4/22/99...... 99,730
-----------
Total U.S. Government and Agency Obligations......... 499,730
-----------
TOTAL SHORT-TERM HOLDINGS, AT AMORTIZED COST......... $ 1,048,626
-----------
TOTAL INVESTMENTS (100.0%) (COST $7,503,519)......... $ 7,814,376
-----------
-----------
</TABLE>
* Non-income producing security.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
9
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP LARGE CAP
VALUE FUND VALUE FUND VALUE FUND
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2)
Investments, at cost................................ $161,391,108 $23,282,677 $ 7,503,519
Net unrealized appreciation (depreciation).......... (8,782,670) 1,867,162 310,857
------------ ----------- -----------
Total investments, at value............................. 152,608,438 25,149,839 7,814,376
Receivable for securities sold.......................... 2,681,011 -- --
Receivable for Fund shares sold......................... 159,990 -- --
Interest, dividends and other receivables............... 92,055 29,625 21,925
Organization costs, net (Note 2)........................ 26,073 -- 22,581
------------ ----------- -----------
Total assets................................................ 155,567,567 25,179,464 7,858,882
------------ ----------- -----------
LIABILITIES:
Dividends payable....................................... 210 -- --
Payable for securities purchased........................ 1,215,540 -- --
Payable for Fund shares redeemed........................ 269,323 -- --
Payable to Investment adviser (Note 3).................. 98,194 15,803 --
Payable to Administrator (Note 3)....................... 12,916 3,161 804
Payable to Shareholder servicing agent (Note 3)......... 18,131 -- --
Payable to Custodian.................................... 9,678 5,450 2,543
Accrued expenses and other liabilities.................. 92,711 52,906 47,082
------------ ----------- -----------
Total liabilities........................................... 1,716,703 77,320 50,429
------------ ----------- -----------
NET ASSETS.................................................. $153,850,864 $25,102,144 $ 7,808,453
------------ ----------- -----------
------------ ----------- -----------
COMPONENTS OF NET ASSETS:
Paid-in capital......................................... $185,032,402 $23,224,473 $ 8,249,795
Undistributed net investment income..................... 130,610 -- 3,421
Net unrealized appreciation (depreciation).............. (8,782,670) 1,867,162 310,857
Accumulated undistributed net realized gain (loss)...... (22,529,478) 10,509 (755,620)
------------ ----------- -----------
NET ASSETS.................................................. $153,850,864 $25,102,144 $ 7,808,453
------------ ----------- -----------
------------ ----------- -----------
NET ASSETS BY SHARE CLASS:
Investor Shares......................................... $ 82,264,758 $25,102,144 $ 7,808,453
Institutional Shares.................................... 71,586,106 -- --
------------ ----------- -----------
$153,850,864 $25,102,144 $ 7,808,453
------------ ----------- -----------
------------ ----------- -----------
SHARES OF BENEFICIAL INTEREST OUTSTANDING:
Investor Shares......................................... 6,481,127 2,182,909 746,017
Institutional Shares.................................... 5,584,874 -- --
NET ASSET VALUE (OFFERING PRICE AND REDEMPTION PRICE) PER
SHARE:
Investor Shares......................................... $ 12.70 $ 11.50 $ 10.47
Institutional Shares.................................... $ 12.82 -- --
</TABLE>
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
10
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP LARGE CAP
VALUE FUND VALUE FUND VALUE FUND
------------ ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends............................................... $ 953,063 $ 118,290 $ 37,286
Interest................................................ 355,318 87,564 33,487
------------ ----------- -----------
Total investment income..................................... 1,308,381 205,854 70,773
------------ ----------- -----------
EXPENSES:
Investment advisory fees (Note 3)....................... 665,772 72,843 30,306
Shareholder services (Note 3)........................... 134,583 24,281 10,102
Administration fees (Note 3)............................ 81,782 14,569 6,061
Transfer agent services (Note 3)........................ 97,941 23,603 18,093
Professional services................................... 26,949 11,377 7,710
Registration fees....................................... 19,834 12,975 6,146
Accounting services (Note 3)............................ 28,000 18,000 20,000
Custody fees............................................ 21,399 12,103 6,284
Trustee fees and expenses (Note 3)...................... 12,773 1,240 552
Amortization of organization costs (Note 2)............. 8,691 -- 3,000
Miscellaneous........................................... 26,373 3,733 1,643
------------ ----------- -----------
Total expenses.............................................. 1,124,097 194,724 109,897
Expenses reimbursed and fees waived (Note 4)............ -- (49,194) (49,392)
------------ ----------- -----------
Net expenses................................................ 1,124,097 145,530 60,505
------------ ----------- -----------
NET INVESTMENT INCOME....................................... 184,284 60,324 10,268
------------ ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments sold............ (18,308,487) 46,656 (560,492)
Net change in unrealized appreciation (depreciation).... 5,480,964 1,810,682 1,478,958
------------ ----------- -----------
Net realized and unrealized gain (loss) on investments...... (12,827,523) 1,857,338 918,466
------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................. $(12,643,239) $ 1,917,662 $ 928,734
------------ ----------- -----------
------------ ----------- -----------
</TABLE>
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
11
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND LARGE CAP VALUE FUND
-------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
MARCH 31, 1999 SEPTEMBER 30, MARCH 31, 1999 SEPTEMBER 30,
(UNAUDITED) 1998 (UNAUDITED) 1998 (a)
----------------- ------------- ----------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS--BEGINNING OF PERIOD............................. $ 179,175,027 $144,000,755 $ 10,667,761 $ --
----------------- ------------- ----------------- -------------
OPERATIONS:
Net investment income (loss)............................ 184,284 (550,558) 60,324 14,671
Net realized gain (loss) on investments sold............ (18,308,487) (3,867,578) 46,656 (23,760)
Net change in unrealized appreciation (depreciation).... 5,480,964 (39,373,134) 1,810,682 56,480
----------------- ------------- ----------------- -------------
Net increase (decrease) in net assets resulting
from operations.................................... (12,643,239) (43,791,270) 1,917,662 47,391
----------------- ------------- ----------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income--Investor Shares.................. (32,526) -- (74,995) --
Net Investment Income--Institutional Shares............. (21,148) -- -- --
Net realized gain on investments--Investor Shares....... -- (7,725,721) (12,387) --
Return of capital--Investor Shares...................... -- (212,312) -- --
----------------- ------------- ----------------- -------------
Net decrease in net assets resulting from
distributions to shareholders...................... (53,674) (7,938,033) (87,382) --
----------------- ------------- ----------------- -------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares--Investor Shares......................... 13,694,138 86,883,053 14,848,634 10,620,370
Sale of shares--Institutional Shares.................... 38,008,552 64,007,466 -- --
Reinvestment of distributions--Investor Shares.......... 29,606 7,442,799 87,380 --
Reinvestment of distributions--Institutional Shares..... 17,473 -- -- --
Redemption of shares--Investor Shares................... (53,623,153) (67,420,738) (2,331,911) --
Redemption of shares--Institutional Shares.............. (10,753,866) (4,009,005) -- --
----------------- ------------- ----------------- -------------
Net increase (decrease) from capital transactions... (12,627,250) 86,903,575 12,604,103 10,620,370
----------------- ------------- ----------------- -------------
Total increase (decrease) in net assets............. (25,324,163) 35,174,272 14,434,383 10,667,761
----------------- ------------- ----------------- -------------
NET ASSETS--END OF PERIOD................................... $ 153,850,864 $179,175,027 $ 25,102,144 $10,667,761
----------------- ------------- ----------------- -------------
----------------- ------------- ----------------- -------------
Accumulated undistributed net investment income............. $ 130,610 $ -- $ -- $ 14,671
----------------- ------------- ----------------- -------------
----------------- ------------- ----------------- -------------
<CAPTION>
CAPITAL SHARE TRANSACTIONS: SHARES SHARES SHARES SHARES
----------------- ------------- ----------------- -------------
<S> <C> <C> <C> <C>
Sale of shares--Investor Shares......................... 979,033 5,036,141 1,548,191 1,064,174
Sale of shares--Institutional Shares.................... 2,865,379 3,750,486 -- --
Reinvestment of distributions--Investor Shares.......... 2,144 473,135 7,656 --
Reinvestment of distributions--Institutional Shares..... 1,254 -- -- --
Redemption of shares--Investor Shares................... (4,117,696) (4,034,611) (437,112) --
Redemption of shares--Institutional Shares.............. (798,150) (234,095) -- --
----------------- ------------- ----------------- -------------
Net increase (decrease) in shares..................... (1,068,036) 4,991,056 1,118,735 1,064,174
----------------- ------------- ----------------- -------------
----------------- ------------- ----------------- -------------
</TABLE>
(a) See Note 1 of Notes to Financial Statements for commencement of operations.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
12
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE FUND
--------------------------------
SIX MONTHS ENDED PERIOD ENDED
MARCH 31, 1999 SEPTEMBER 30,
(UNAUDITED) 1998 (a)
----------------- -------------
<S> <C> <C>
NET ASSETS--BEGINNING OF PERIOD............................. $ 7,116,296 $ 100
----------------- -------------
OPERATIONS:
Net investment income................................... 10,268 19,876
Net realized loss on investments sold................... (560,492) (195,128)
Net change in unrealized appreciation (depreciation).... 1,478,958 (1,168,101)
----------------- -------------
Net increase (decrease) in net assets resulting from
operations........................................... 928,734 (1,343,353)
----------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income--Investor Shares.................. (26,723) --
----------------- -------------
Net decrease in net assets resulting from
distributions to shareholders........................ (26,723) --
----------------- -------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares--Investor Shares......................... 2,598,283 11,976,249
Reinvestment of distributions--Investor Shares.......... 26,683 --
Redemption of shares--Investor Shares................... (2,834,820) (3,516,700)
----------------- -------------
Net increase (decrease) from capital transactions... (209,854) 8,459,549
----------------- -------------
Total increase in net assets........................ 692,157 7,116,196
----------------- -------------
NET ASSETS--END OF PERIOD................................... $ 7,808,453 $ 7,116,296
----------------- -------------
----------------- -------------
Accumulated undistributed net investment income............. $ 3,421 $ 19,876
----------------- -------------
----------------- -------------
<CAPTION>
CAPITAL SHARE TRANSACTIONS: SHARES SHARES
----------------- -------------
<S> <C> <C>
Sale of shares--Investor Shares......................... 253,824 1,103,650
Reinvestment of distributions--Investor Shares.......... 2,505 --
Redemption of shares--Investor Shares................... (273,246) (340,726)
----------------- -------------
Net increase (decrease) in shares..................... (16,917) 762,924
----------------- -------------
----------------- -------------
</TABLE>
(a) See Note 1 of Notes to Financial Statements for commencement of operations.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
13
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONTAINED BELOW IS PER SHARE OPERATING PERFORMANCE DATA FOR AN AVERAGE SHARE OF
BENEFICIAL INTEREST OUTSTANDING, TOTAL INVESTMENT RETURN, RATIOS TO AVERAGE NET
ASSETS AND OTHER SUPPLEMENTAL DATA FOR EACH PERIOD INDICATED.
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
----------------------------------------------------------
INVESTOR SHARES
----------------------------------------------------------
SIX MONTHS
ENDED MARCH YEAR ENDED YEAR ENDED YEAR ENDED
31, 1999 SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
UNAUDITED 1998 1997 1996
------------ ------------- ------------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period...................... $ 13.61 $ 17.68 $ 13.71 $ 10.00
------------ ------------- ------------- -------
Investment Operations
Net investment income (loss).......................... 0.01 (0.06) (0.06) (0.02)
Net realized and unrealized gain (loss) on
investments.......................................... (0.92) (3.15) 4.89 3.73
------------ ------------- ------------- -------
Total from investment operations.......................... (0.91) (3.21) 4.83 3.71
------------ ------------- ------------- -------
Distributions from
Net investment income................................. --(a) -- -- --(a)
Net realized gain on investments...................... -- (0.84) (0.86) --
Return of capital..................................... -- (0.02) -- --
------------ ------------- ------------- -------
Total distributions....................................... -- (0.86) (0.86) --
------------ ------------- ------------- -------
Net asset value, end of period............................ $ 12.70 $ 13.61 $ 17.68 $ 13.71
------------ ------------- ------------- -------
------------ ------------- ------------- -------
Total Return.............................................. (6.66)% (18.81)% 37.14 % 37.15 %
Ratio/Supplemental data:
Ratios to average net assets:
Expenses, including reimbursement/waiver.............. 1.39%(b) 1.38 % 1.50 % 1.49 %
Expenses, excluding reimbursement/waiver.............. 1.39%(b) 1.38 % 1.50 % 1.98 %
Net investment income (loss), including
reimbursement/waiver................................. 0.09%(b) (0.34)% (0.56)% (0.40)%
Portfolio turnover rate................................... 44.01% 57.32 % 98.91 % 111.18 %
Net assets at end of period (000's omitted)............... $ 82,265 $ 130,929 $ 144,001 $ 45,385
</TABLE>
(a) Less than $0.01 per share.
(b) Annualized.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
14
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONTAINED BELOW IS PER SHARE OPERATING PERFORMANCE DATA FOR AN AVERAGE SHARE OF
BENEFICIAL INTEREST OUTSTANDING, TOTAL INVESTMENT RETURN, RATIOS TO AVERAGE NET
ASSETS AND OTHER SUPPLEMENTAL DATA FOR EACH PERIOD INDICATED.
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
----------------------------
INSTITUTIONAL SHARES
----------------------------
SIX MONTHS
ENDED MARCH PERIOD ENDED
31, 1999 SEPTEMBER 30,
UNAUDITED 1998 (a)
------------ --------------
<S> <C> <C>
Net asset value, beginning of period..................................................... $ 13.72 $ 15.99
------------ -------
Investment Operations
Net investment income................................................................ 0.03 0.01
Net realized and unrealized loss on investments...................................... (0.93) (2.28)
------------ -------
Total from investment operations......................................................... (0.90) (2.27)
------------ -------
Distributions from
Net investment income................................................................ --(c) --
Net realized gain on investments..................................................... -- --
------------ -------
Total distributions...................................................................... -- --
------------ -------
Net asset value, end of period........................................................... $ 12.82 $ 13.72
------------ -------
------------ -------
Total Return............................................................................. (6.53)% (14.20)%
Ratio/Supplemental data:
Ratios to average net assets:
Expenses, including reimbursement/waiver............................................. 1.07 %(b 1.15%(b)
Expenses, excluding reimbursement/waiver............................................. 1.07 %(b 1.23%(b)
Net investment income, including reimbursement/waiver................................ 0.40 %(b 0.08%(b)
Portfolio turnover rate.................................................................. 44.01% 57.32%
Net assets at end of period (000's omitted).............................................. $ 71,586 $ 48,246
</TABLE>
(a) See Note 1 of Notes to Financial Statements for commencement of
operations.
(b) Annualized.
(c) Less than $0.01 per share.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
15
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONTAINED BELOW IS PER SHARE OPERATING PERFORMANCE DATA FOR AN AVERAGE SHARE OF
BENEFICIAL INTEREST OUTSTANDING, TOTAL INVESTMENT RETURN, RATIOS TO AVERAGE NET
ASSETS AND OTHER SUPPLEMENTAL DATA FOR EACH
PERIOD INDICATED.
<TABLE>
<CAPTION>
LARGE CAP VALUE FUND VALUE FUND
---------------------------- ------------------------------
INVESTOR SHARES INVESTOR SHARES
---------------------------- ------------------------------
SIX MONTHS SIX MONTHS
ENDED MARCH PERIOD ENDED ENDED MARCH PERIOD ENDED
31, 1999 SEPTEMBER 30, 31, 1999 SEPTEMBER 30,
UNAUDITED 1998 (a) UNAUDITED 1998 (a)
------------ -------------- ------------- ---------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period......................... $ 10.02 $ 10.00 $ 9.33 $ 10.00
------------ ------- ------ ------
Investment Operations
Net investment income.................................... 0.04 0.01 0.01 0.03
Net realized and unrealized gain (loss) on investments... 1.50 0.01 1.17 (0.70)
------------ ------- ------ ------
Total from investment operations............................. 1.54 0.02 1.18 (0.67)
------------ ------- ------ ------
Distributions from
Net investment income.................................... (0.05) -- (0.04) --
Net realized gain on investments......................... (0.01) -- -- --
------------ ------- ------ ------
Total distributions.......................................... (0.06) -- (0.04) --
------------ ------- ------ ------
Net asset value, end of period............................... $ 11.50 $ 10.02 $ 10.47 $ 9.33
------------ ------- ------ ------
------------ ------- ------ ------
Total Return................................................. 15.26% 0.20% 12.55% (6.70)%
Ratio/Supplemental data:
Ratios to average net assets:
Expenses, including reimbursement/waiver................. 1.50%(b) 1.50%(b) 1.50%(b) 1.50%(b)
Expenses, excluding reimbursement/waiver................. 2.00%(b) 3.95%(b) 2.72%(b) 3.22%(b)
Net investment income (loss), including
reimbursement/waiver.................................... 0.62%(b) 1.78%(b) 0.25%(b) 0.38%(b)
Portfolio turnover rate...................................... 22.68% 6.98% 68.69% 125.73%
Net assets at end of period (000's omitted).................. $ 25,102 $ 10,668 $ 7,808 $ 7,116
</TABLE>
(a) See Note 1 of Notes to Financial Statements for commencement of
operations.
(b) Annualized.
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES. THE CRM FUNDS
16
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. ORGANIZATION
The CRM Funds (the "Trust") is an open-end management investment company
organized as a Delaware business trust. The Trust currently has four active
diversified investment portfolios. These financial statements relate to Small
Cap Value Fund, Large Cap Value Fund and Value Fund (each, a "Fund" and,
collectively, the "Funds"), each of which issues Investor Shares. Small Cap
Value Fund also issues Institutional Shares. The Trust Instrument of the Trust
authorizes each Fund to issue an unlimited number of shares of beneficial
interest of $0.001 par value. The classes of each Fund and their respective
dates of commencement of operations are as follows:
<TABLE>
<S> <C>
Small Cap Value Fund (Investor Shares)................................ October 1, 1995
Small Cap Value Fund (Institutional Shares)........................... January 27, 1998
Large Cap Value Fund (Investor Shares)................................ August 25, 1998
Value Fund (Investor Shares).......................................... January 6, 1998
</TABLE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles which require management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates.
The following represent significant accounting policies of the Funds:
SECURITY VALUATION--Securities, other than short-term securities, held by
the Funds for which market quotations are readily available are valued using
the last reported sales price provided by independent pricing services. If
no sales are reported, the mean of the last bid and asked price is used. In
the absence of readily available market quotations, securities are valued at
fair value as determined by the Board of Trustees. As of March 31, 1999, the
Funds held no positions in fair valued securities. Securities with a
maturity of 60 days or less are valued at amortized cost.
REALIZED GAIN AND LOSS--Security transactions are accounted for on a trade
date basis and realized gain and loss on investments sold are determined on
the basis of identified cost.
INTEREST AND DIVIDEND INCOME--Interest income is accrued as earned.
Dividends on securities held by the Funds are recorded on the ex-dividend
date.
DISTRIBUTIONS TO SHAREHOLDERS--Distributions to shareholders from net
investment income are declared and paid at least annually by all Funds,
except Large Cap Value Fund, for which dividends representing the net
- --------------------------------------------------------------------------------
THE CRM FUNDS
17
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
investment income are declared and paid at least quarterly. Distributions to
shareholders from net capital gains, if any, are declared and paid at least
annually. Distributions are based on amounts calculated in accordance with
applicable income tax regulations.
ORGANIZATION COSTS--The costs incurred by the Funds in connection with their
organization and registration of shares prior to June 30, 1998, have been
capitalized and are being amortized using the straight-line method over a
five-year period beginning with the commencement of the Funds' operations.
FEDERAL TAXES--Each Fund intends to continue to qualify each year as a
regulated investment company under Subchapter M of the Internal Revenue
Code. In addition, by distributing in each calendar year substantially all
its net investment income, capital gains and certain other amounts, if any,
each Fund will not be subject to a federal excise tax. Since the Funds
intend to meet these minimum distribution requirements, no federal income
tax provision is currently required.
3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser to the Funds is Cramer Rosenthal McGlynn, LLC (the
"Adviser"). The Adviser receives monthly, from each Fund, an advisory fee at an
annual rate of 0.75% of the average daily net assets of each Fund.
On behalf of each Fund, the Trust has entered into an Administration Agreement
with Forum Administrative Services, LLC ("FAdS"). For its services, FAdS
receives a fee computed and paid monthly at an annual rate of 0.15% of the
average daily net assets of each Fund for the first $50 million in assets, 0.10%
for the next $50 million in assets and 0.05% thereafter.
Forum Shareholder Services, LLC ("Transfer Agent"), an affiliate of FAdS, serves
as each Fund's transfer agent and dividend disbursing agent, for which it
receives a fee of $24,000 per year per Fund, plus 0.10% of the average daily net
assets of the Investor Share class of the Small Cap Value Fund, Large Cap Value
Fund, and Value Fund.
Pursuant to a separate Distribution Agreement, Forum Fund Services, LLC acts as
distributor of the Funds' shares and is not paid any fee for its distribution
services.
Forum Accounting Services, LLC ("FAcS") serves as the fund accountant for each
Fund. For these services, FAcS receives a fee of $36,000 per year, per Fund,
plus certain class charges and certain amounts based upon the number and types
of portfolio transactions within each Fund.
The Trust has adopted a Shareholder Servicing Plan which allows it to obtain the
services of the Adviser and other qualified financial institutions to act as
shareholder servicing agents for their customers. Under this plan,
- --------------------------------------------------------------------------------
THE CRM FUNDS
18
<PAGE>
- --------------------------------------------------------------------------------
THE CRM FUNDS
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the Trust pays shareholder-servicing agents, including the Adviser, up to 0.25%
of the average daily net assets of the Investor Share class of the Small Cap
Value Fund, Large Cap Value Fund, and Value Fund attributable to accounts for
which the agent provides shareholder services.
Each Trustee, who was not an "affiliated person" as defined in the Investment
Company Act of 1940, received from the Fund an annual fee of $10,000, plus out
of pocket expenses.
4. WAIVER OF FEES
The Adviser and Transfer Agent have voluntarily waived a portion of their fees
and assumed certain expenses of the Funds. For the period ended March 31, 1999,
fees waived were as follows:
<TABLE>
<CAPTION>
INVESTMENT SHAREHOLDER TRANSFER
ADVISORY FEE SERVICES FEE AGENT FEE TOTAL
------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
Large Cap Value Fund.......................... $ 43,194 $ -- $ 6,000 $49,194
Value Fund.................................... 30,306 10,102 8,984 49,392
</TABLE>
5. SECURITIES TRANSACTIONS
The cost of securities purchased and the proceeds from sales of securities,
other than short-term securities, for the period ended March 31, 1999, were as
follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
-------------- -------------
<S> <C> <C>
Small Cap Value Fund...................................................... $83,257,938 $75,295,908
Large Cap Value Fund...................................................... 18,334,490 3,619,847
Value Fund................................................................ 4,892,865 4,800,638
</TABLE>
For federal income tax purposes, the tax basis of investment securities owned,
the aggregate gross unrealized appreciation, the aggregate gross unrealized
depreciation and net unrealized appreciation (depreciation) as of March 31,
1999, were as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C>
Small Cap Value Fund................... $161,391,108 $16,723,910 $25,506,580 $ (8,782,670)
Large Cap Value Fund................... 23,282,677 2,941,804 1,074,642 1,867,162
Value Fund............................. 7,503,519 919,072 608,215 310,857
</TABLE>
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THE CRM FUNDS
19
<PAGE>
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TRUSTEES
John E. Appelt
Fred M. Filoon
Louis Klein, Jr.
Clement C. Moore, II
INVESTMENT ADVISER
Cramer Rosenthal McGlynn, LLC
707 Westchester Avenue
White Plains, NY 10604
ADMINISTRATOR
Forum Administrative Services, LLC
Two Portland Square
Portland, ME 04101
LEGAL COUNSEL
Kramer, Levin, Naftalis & Frankel, LLP
919 Third Avenue
New York, NY 10022
INVESTOR INFORMATION: (800) CRM-2883
HTTP://WWW.CRMFUNDS.COM
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION ONLY TO
SHAREHOLDERS AND TO OTHERS WHO HAVE RECEIVED CURRENT PROSPECTUSES OF THE CRM
FUNDS.
[RECYCLE LOGO] This report has been printed on recycled paper.
- -------------------------------------------
- -------------------------------------------
CRM
FUNDS
[LOGO]
SMALL CAP
VALUE FUND
LARGE CAP
VALUE FUND
VALUE FUND
Investor Shares
SEMI-ANNUAL REPORT
March 31, 1999
[LOGO]
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