FORUM PROSPECTUS
FUNDS INVESTOR SHARES
JANUARY 5, 2001
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND
FIVE MONEY MARKET FUNDS THAT,
SEEK TO PROVIDE HIGH CURRENT
INCOME TO THE EXTENT CONSISTENT
WITH THE PRESERVATION OF CAPITAL
AND THE MAINTENANCE OF LIQUIDITY.
IN ADDITION, DAILY ASSETS
MUNICIPAL FUND SEEKS TO PROVIDE
HIGH CURRENT INCOME THAT IS EXEMPT
FROM FEDERAL INCOME TAX.
THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE FUNDS'
SHARES OR DETERMINED WHETHER THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
[Edgarization of graphic representation of a globe, atlas, and calendar]
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TABLE OF CONTENTS
SUMMARY 2
PERFORMANCE 4
FEE TABLES 5
MANAGEMENT 6
YOUR ACCOUNT 7
How To Contact the Funds 7
General Information 7
Buying Shares 7
Selling Shares 9
Exchange Privileges 10
OTHER INFORMATION 11
FINANCIAL HIGHLIGHTS 12
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SUMMARY
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CONCEPTS TO This Prospectus offers Investor Shares of five money market funds - Daily Assets Treasury
UNDERSTAND Obligations Fund, Daily Assets Government Fund, Daily Assets Government Obligations Fund, Daily
Assets Cash Fund and Daily Assets Municipal Fund (each a "Fund"). Investor Shares are designed
MONEY MARKET SECURITY means for retail investors.
a high credit quality,
short-term, U.S. dollar INVESTMENT OBJECTIVES
denominated debt security.
The investment objective of each Fund, except Daily Assets Municipal Fund, is to provide high
TREASURY SECURITY current income to the extent consistent with the preservation of capital and the maintenance of
means a security that is liquidity. The investment objective of Daily Assets Municipal Fund is to provide high current
issued or guaranteed by income that is exempt from Federal income taxes to the extent consistent with the preservation of
the U.S. Treasury. capital and the maintenance of liquidity.
GOVERNMENT SECURITY means a PRINCIPAL INVESTMENT STRATEGIES
security that is issued or
guaranteed by the U.S. Each Fund invests in a diversified portfolio of Money Market Securities and:
Government, its agencies or o seeks to maintain a stable net asset value of $1.00 per share
instrumentalities. o invests in securities with remaining maturities of 397 days or less
o maintains a dollar weighted average maturity of its investments of 90 days or less
REPURCHASE AGREEMENT means
a transaction in which Each Fund invests substantially all of its assets in another mutual fund (each a "Portfolio,"
securities are purchased and collectively, the "Portfolios"), which has the same investment objective and substantially
and simultaneously similar investment policies. Each Portfolio in which a Fund invests and its primary
committed to be resold to investments are:
another party at an
agreed-upon date and at a FUND/PORTFOLIO PRIMARY INVESTMENTS
price reflecting a market Daily Assets Treasury Obligations Treasury Securities and Repurchase Agreements backed
rate of interest. Fund/Treasury Cash Portfolio by Treasury Securities
MUNICIPAL SECURITY means Daily Assets Government Government Securities that generally are exempt from
a security the interest Fund/Government Portfolio state and local income taxes
on which is exempt from
Federal income tax. Daily Assets Government Government Securities and Repurchase Agreements
Obligations Fund/Government Cash backed by Government Securities
Portfolio
Daily Assets Cash Fund/Cash A broad spectrum of Money Market Securities including:
Portfolio o securities issued by financial institutions, such as
certificates of deposits, bankers' acceptances and
time deposits
o securities issued by domestic companies, such as
commercial paper
o Government Securities
o Repurchase Agreements
Daily Assets Municipal Municipal Securities
Fund/Municipal Cash Portfolio
The investment adviser for each Portfolio (the "Adviser") continuously monitors economic
factors such as interest rate outlooks and technical factors such as prevailing interest rates and
Federal Reserve policy to determine an appropriate maturity profile for the Portfolio's
investments. The Adviser searches for securities that satisfy the maturity profile of a Portfolio
and that provide the greatest potential return relative to the risk of the security.
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Daily Assets Municipal Fund has substantial exposure to Municipal Securities
that are supported by various types of third-party credit and liquidity
enhancements. These investments are often comprised of long-term Municipal
Securities structured to allow the owner the option to sell the security back to
the issuer at par or a modest premium. Many of these investments have interest
rates that are reset periodically. The Adviser reviews and considers these
factors in its investment decisions and will only purchase a Municipal Security
if it believes that third-party credit and liquidity supporters possess minimal
credit risk. Up to 20% of the Fund's total assets may be invested in securities
the interest from which is not exempt from Federal income tax.
The Adviser may sell a Money Market Security if:
o Revised economic forecasts or interest rate outlook requires a
repositioning of a Portfolio
o The security subsequently fails to meet the Adviser's investment
criteria
o Funds are needed for another purpose
PRINCIPAL RISKS OF INVESTING IN A FUND
An investment in a Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although each Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in a Fund. There is
no assurance that any Fund will achieve its investment objective. An investment
in a Fund is not by itself a complete or balanced investment program.
The principal risks of investing in a Fund are:
INTEREST RATE RISK Interest rates may affect the value of a Portfolio's
investments. Increases in interest rates may cause a decline in value. In
addition, those increases may cause a Fund's investment performance to
underperform currently available investments.
CREDIT RISK The value of a security held by a Portfolio may decline if the
security's credit rating is downgraded or credit quality otherwise falls. In the
worst case, an issuer of a security or a repurchase agreement counterparty may
default or otherwise be unable to make timely payments of interest or principal.
Not all Government Securities are supported by the full faith and credit of the
U.S. Government.
MANAGEMENT RISK As with all mutual funds, the Adviser may make poor investment
decisions.
LOCAL ECONOMIC/POLITICAL RISK Changes in state or regional economies or politics
can adversely affect the value of the Municipal Securities issued in that
location. Up to 35% of Daily Assets Municipal Fund's assets may be exposed to
Municipal Securities whose issuers are located in one state or territory.
The above risks can result in a decrease in the value of a security or all the
securities owned by a Portfolio and, therefore, cause a change in the Fund's
$1.00 per share value. These risks also can result in lower investment
performance of a Fund.
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PERFORMANCE
The following charts and tables provide some indication of the risks of
investing in a Fund's Investor Shares by showing changes in performance and
investment returns from year to year. PERFORMANCE INFORMATION PRESENTED HERE
REPRESENTS ONLY PAST PERFORMANCE AND DOES NOT NECESSARILY INDICATE FUTURE
RESULTS.
The following charts show the annual total return for each full calendar year
that the Funds' Investor Shares have operated.
YEAR ENDED 12/31
DAILY ASSETS TREASURY OBLIGATIONS FUND
Best Quarter: 1.42% (quarter ended 9/30/00)
Worst Quarter 0.91% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 4.03%
2000 5.44%
DAILY ASSETS GOVERNMENT FUND
Best Quarter: 1.47% (quarter ended 12/31/00)
Worst Quarter 1.04% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 4.50%
2000 5.71%
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
Best Quarter: 1.45% (quarter ended 9/30/00)
Worst Quarter 1.00% (quarter ended 6/30/99)
[EDGAR Representation of bar chart]
1999 4.33%
2000 5.61%
DAILY ASSETS CASH FUND
Best Quarter: 1.47% (quarter ended 9/30/00)
Worst Quarter 1.01% (quarter ended 6/30/99)
[EDGAR Representation of bar chart]
1999 4.43%
2000 5.68%
DAILY ASSETS MUNICIPAL FUND
Best Quarter: 0.88% (quarter ended 6/30/00)
Worst Quarter 0.51% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 2.93%
2000 3.24%
The following table lists the Investor Shares' average annual total return as of
December 31, 2000.
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1 YEAR SINCE INCEPTION INCEPTION DATE
DAILY ASSETS TREASURY OBLIGATIONS FUND 5.44% 4.68% 8/6/98
DAILY ASSETS GOVERNMENT FUND 5.71% 5.02% 9/29/98
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND 5.61% 4.93% 8/6/98
DAILY ASSETS CASH FUND 5.68% 5.02% 8/6/98
DAILY ASSETS MUNICIPAL FUND 3.24% 2.78% 8/6/98
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FEE TABLES
The following tables describe the various fees and expenses that you will pay if
you invest in Investor Shares of a Fund. There are no charges to purchase or
redeem Fund shares.
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ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
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DAILY ASSETS DAILY DAILY ASSETS DAILY DAILY
TREASURY ASSETS GOVERNMENT ASSETS ASSETS
OBLIGATIONS GOVERNMENT OBLIGATIONS CASH MUNICIPAL FUND
FUND FUND FUND FUND
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Management Fees (1) 0.13% 0.15% 0.13% 0.13% 0.15%
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Distribution (Rule 12b-1) Fees 0.30% 0.15% 0.30% 0.30% 0.30%
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Other Expenses 56.59% 3.98% 5.81% 1.41% 18.49%
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TOTAL ANNUAL FUND OPERATING EXPENSES (2) 57.02% 4.28% 6.24% 1.84% 18.94%
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Fee Waivers and Expense Reimbursements (3) 56.12% 3.53% 5.34% 0.94% 18.04%
-------------------------------------------------
NET EXPENSES 0.90% 0.75% 0.90% 0.90% 0.90%
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(1) INCLUDES ALL INVESTMENT ADVISORY AND ADMINISTRATION FEES.
(2) BASED ON AMOUNTS INCURRED DURING EACH FUND'S LAST FISCAL YEAR ENDED AUGUST
31, 2000 STATED AS A PERCENTAGE OF AVERAGE NET ASSETS PRIOR TO FEE WAIVERS
AND EXPENSE REIMBURSEMENTS. EACH FUND'S EXPENSES INCLUDE ITS PRO-RATA SHARE
OF THE EXPENSES OF ITS CORRESPONDING PORTFOLIO.
(3) BASED ON CERTAIN CONTRACTUAL FEE WAIVERS AND EXPENSE REIMBURSEMENTS
CURRENTLY IN EFFECT THAT MAY DECREASE AFTER DECEMBER 31, 2001.
EXAMPLE
The following is a hypothetical example intended to help you compare the cost of
investing in Investor Shares of a Fund to the cost of investing in other mutual
funds. The example assumes that you invest $10,000 in a Fund's Investor Shares
for the time periods indicated and then redeem all of your shares at the end of
those periods. The example also assumes that your investment has a 5% annual
return, that the Net Expenses (through December 31, 2001) and Total Annual Fund
Operating Expenses (thereafter) remain as stated in the above table and that
distributions are reinvested. Although your actual costs may be higher or lower,
under these assumptions your costs would be:
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DAILY ASSETS DAILY ASSETS DAILY ASSETS DAILY ASSETS DAILY ASSETS
TREASURY GOVERNMENT GOVERNMENT CASH MUNICIPAL
OBLIGATIONS FUND FUND OBLIGATIONS FUND FUND FUND
1 year $92 $77 $92 $92 $92
3 years $11,945 $1,298 $1,857 $579 $5,172
5 years $13,382 $2,179 $3,059 $995 $7,600
10 years $13,801 $4,437 $5,936 $2,159 $11,261
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MANAGEMENT
Each Fund is a series of Forum Funds (the "Trust"), an open-end, management
investment company. The business of the Trust and of each Fund is managed under
the direction of the Board of Trustees (the "Board"). The Board formulates the
general policies of each Fund and meets periodically to review each Fund's
performance, monitor investment activities and practices and discuss other
matters affecting each Fund. Additional information about the Board and the
Trust's executive officers is in the Statement of Additional Information
("SAI").
THE ADVISER
Each Portfolio's investment adviser is Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101. The Adviser is a privately owned company
controlled by John Y. Keffer. The Adviser makes investment decisions for each
Portfolio. In addition to the Portfolios, the Adviser manages two taxable and
three tax-free bond funds.
During the Funds' last fiscal year, the aggregate advisory fees paid to the
Adviser from each Portfolio, as a percentage of average net assets, were:
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PORTFOLIO TREASURY CASH GOVERNMENT GOVERNMENT CASH CASH MUNICIPAL CASH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
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ADVISORY FEE 0.03% 0.05% 0.03% 0.03% 0.05%
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Each Fund pays its pro-rata share of its corresponding Portfolio's advisory fee,
which is based on the percentage of the Portfolio's net assets held by the Fund.
OTHER SERVICE PROVIDERS
The Forum Financial Group ("Forum") of companies provides various services to
each Fund. As of October 31, 2000, Forum provided administration and
distribution services to investment companies and collective investment funds
with assets of approximately $123 billion.
Forum Fund Services, LLC, a registered broker-dealer and member of the National
Association of Securities Dealers, Inc., is the distributor (principal
underwriter) of each Fund's shares. The distributor acts as the representative
of the Trust in connection with the offering of each Fund's shares. The
distributor may enter into arrangements with banks, broker-dealers or other
financial institutions through which investors may purchase or redeem shares and
may, at its own expense, compensate persons who provide services in connection
with the sale or expected sale of each Fund's shares.
Each Fund has adopted a distribution or Rule 12b-1 plan under which the Fund
pays fees for the distribution of Investor Shares and the servicing of
shareholder accounts. Because Investor Shares pay distribution fees on an
ongoing basis, your investment cost over time may be higher than paying other
types of sales charges. Forum Administrative Services, LLC ("FAdS") provides
administrative services to each Fund, Forum Accounting Services, LLC is each
Fund's fund accountant, and Forum Shareholder Services, LLC (the "Transfer
Agent") is each Fund's transfer agent. The Trust has adopted a shareholder
servicing plan under which the Trust pays FAdS a fee for providing shareholder
service activities that is not otherwise provided by the Transfer Agent. FAdS
may pay this fee to various financial institutions that provide shareholder
servicing to their customers invested in Investor Shares.
FUND EXPENSES
Each Fund pays for its own expenses and bears its pro-rata share of expenses of
the Portfolio in which the Fund invests. Expenses of Investor Shares include the
shares' own expenses as well as Trust expenses that are allocated among each
Fund, their classes of shares and all other funds of the Trust. The Adviser or
other service provider may waive all or any portion of their fees and reimburse
certain expenses of a Fund. Any fee waiver or expense reimbursement increases
investment performance of a Fund and its applicable share classes for the period
during which the waiver or reimbursement is in effect.
Certain service providers of each Fund have undertaken through December 31, 2001
to waive a portion of their fees and reimburse Fund expenses in order to limit
total operating expenses (excluding taxes, interest, portfolio transaction
expenses and extraordinary expenses) of the Investor Shares of each Fund to no
more than 0.75% of the average daily net assets for Daily Assets Government Fund
and 0.90% of the average daily net assets for each other Fund.
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YOUR ACCOUNT
HOW TO CONTACT THE FUNDS
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WRITE TO US AT: ACH OR WIRE INVESTMENTS TO:
Forum Shareholder Services, LLC Bankers Trust Company
Attn: (Fund Name - Investor Shares) New York, New York
P.O. Box 446 ABA #021001033
Portland, Maine 04112 FOR CREDIT TO:
Forum Shareholder Services, LLC
TELEPHONE US AT: Account # 01-465-547
(800) 94FORUM or Re: (Fund Name) - Investor Shares
(800) 943-6786 (Toll Free) (Your Name)
(207) 879-0001 (Your Account Number)
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GENERAL INFORMATION
You may purchase or sell (redeem) shares at the net asset value of a share
("NAV") next calculated after the Transfer Agent receives your request in proper
form accompanied by funds on deposit at a Federal Reserve Bank ("Federal
Funds"). Investments are not accepted or invested by a Fund during the period
before the receipt of Federal Funds.
Shares become entitled to receive distributions on the day of purchase if the
order and payment are received in proper form by the Transfer Agent as follows:
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ORDER MUST BE PAYMENT MUST BE
RECEIVED BY RECEIVED BY
DAILY ASSETS GOVERNMENT FUND 12:00 P.M., Eastern time 4:00 P.M., Eastern time
.............................................................................................................
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND 2:00 P.M., Eastern time 4:00 P.M., Eastern time
</TABLE>
On days that the Bond Market Association recommends an early close of the
government securities market or that those markets or the Federal Reserve Bank
of San Francisco closes early, the Trust may advance the time by which the
Transfer Agent must receive completed purchase and redemption orders.
If you purchase shares directly from a Fund, you will receive monthly statements
and a confirmation of each transaction. You should verify the accuracy of all
transactions in your account as soon as you receive your confirmations.
Each Fund reserves the right to waive minimum investment amounts and may
temporarily suspend (during unusual market conditions) or discontinue any
service or privilege.
WHEN AND HOW NAV IS DETERMINED Each Fund calculates its NAV as of 4:00 P.M.,
Eastern time on each weekday except Federal holidays and other days that the
Federal Reserve Bank of San Francisco is closed. The time at which the NAV is
calculated may change in case of an emergency. In order to maintain a stable NAV
of $1.00 per share, each Fund (and the Portfolios in which they invest) values
the securities in its portfolio on an amortized cost basis.
TRANSACTIONS THROUGH THIRD PARTIES If you invest through a broker or other
financial institution, the policies and fees charged by that institution may be
different than those of a Fund. Financial institutions may charge transaction
fees and may set different minimum investments or limitations on buying or
selling shares. These institutions also may provide you with certain shareholder
services such as periodic account statements and trade confirmations. Consult a
representative of your financial institution for more information.
BUYING SHARES
HOW TO MAKE PAYMENTS All investments must be in U.S. dollars and checks must be
drawn on U.S. banks.
CHECKS For individual, sole proprietorship, joint, Uniform Gift to
Minors Act ("UGMA") or Uniform Transfers to Minors Act ("UTMA")
accounts, make checks payable to "Forum Funds" or to one or more owners
of the account and endorsed to "Forum Funds." For all other accounts,
your check must be made payable on its face to "Forum Funds." No other
method of check payment is acceptable (for instance, you may not pay by
traveler's check).
AUTOMATED CLEARING HOUSE ("ACH") Instruct your financial institution to
transfer funds through the "Automated Clearing House" system.
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WIRES Instruct your financial institution to make a Federal Funds wire
payment to us.
Your financial institution may charge you a fee for ACH or wire services.
MINIMUM INVESTMENTS Each Fund accepts payments in the following minimum amounts
for Investor Shares:
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MINIMUM INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT
Standard Accounts $10,000 $500
Traditional and Roth IRA Accounts $2,000 $250
Accounts With Systematic Investment Plans $250 $250
Exchanges $2,000 $250
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ACCOUNT REQUIREMENTS
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TYPE OF ACCOUNT REQUIREMENT
INDIVIDUAL, SOLE PROPRIETORSHIP AND JOINT ACCOUNTS o Instructions must be signed by all persons required to
Individual accounts are owned by one person, as are sole sign exactly as their names appear on the account
proprietorship accounts. Joint accounts have two or more
owners (tenants)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) o Depending on state laws, you can set up a custodial
These custodial accounts provide a way to give money to a account under the UGMA or UTMA
child and obtain tax benefits o The custodian must sign instructions in a manner
indicating custodial capacity
BUSINESS ENTITIES o Submit a Corporate/Organization Resolution form or
similar document
TRUSTS o The trust must be established before an account
can be opened
o Provide a certified trust document, or the pages
from the trust document, that identify the trustees
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INVESTMENT PROCEDURES
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HOW TO OPEN AN ACCOUNT HOW TO ADD TO YOUR ACCOUNT
BY CHECK BY CHECK
o Call or write us for an account application (and o Fill out an investment slip from a confirmation or write
Corporate/Organization Resolution form, if applicable) us a letter
o Complete the application (and resolution form) o Write your account number on your check
o Mail us your application (and resolution form) and a o Mail us the slip (or your letter) and the check
check
BY WIRE BY WIRE
o Call or write us for an account application (and o Call to notify us of your incoming wire
Corporate/Organization Resolution form, if applicable) o Instruct your bank to wire your money to us
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your original application (and resolution
form)
o Instruct your financial institution to wire your
money to us
BY ACH PAYMENT
o Call or write us for an account application (and
Corporate/Organization Resolution form, if applicable)
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your original application (and resolution form)
o Instruct your financial institution to send an ACH
payment to us
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SYSTEMATIC INVESTMENTS You may invest a specified amount of money in a Fund once
or twice a month on specified dates. These payments are taken from your bank
account by ACH payment. Systematic investments must be for at least $250.
LIMITATIONS ON PURCHASES Each Fund reserves the right to refuse any purchase
(including exchange) request, particularly requests that could adversely affect
a Fund or its operations.
CANCELED OR FAILED PAYMENTS Each Fund accepts checks and ACH payments at full
value subject to collection. If a Fund does not receive your payment for shares
or you pay with a check or by ACH that does not clear, your purchase will be
canceled. You will be responsible for any losses or expenses incurred by a Fund,
the Transfer Agent or distributor and the Fund may redeem shares you own in the
account (or another identically registered account that you maintain with the
Transfer Agent) as reimbursement.
SELLING SHARES
Generally, a Fund will send redemption proceeds to you immediately after
receiving your redemption request in proper form.
Shares are not entitled to receive distributions declared on or after the day on
which a redemption order is accepted by the Transfer Agent.
HOW TO SELL SHARES FROM YOUR ACCOUNT
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o [Fund name] - Investor Shares
o The dollar amount or number of shares you want to sell
o How and where to send the redemption proceeds
o Obtain a signature guarantee (if required)
o Obtain other documentation (if required)
o Mail us your request and documentation
BY WIRE
o Wire redemptions are only available if your redemption is for $5,000 or
more and you did not decline wire redemption privileges on your account
application
o Call us with your request (unless you declined telephone redemption
privileges on your account application) (See "By Telephone") OR
o Mail us your request (See "By Mail")
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which the account is registered
o Additional form of identification
o Redemption proceeds will be:
o Mailed to you OR
o Wired to you (unless you declined wire redemption privileges on your
account application) (See "By Wire")
SYSTEMATICALLY
o Complete the systematic withdrawal section of the application
o Attach a voided check to your application
o Mail us your completed application
WIRE REDEMPTION PRIVILEGES You may redeem your shares by wire unless you
declined wire redemption privileges on your account application. The minimum
amount that may be redeemed by wire is $5,000. If the Transfer Agent receives
your wire redemption order after 12:00 P.M., Eastern time (or other time as may
be determined) for Daily Assets Government Fund, or after 2:00 P.M., Eastern
time (or other time as may be determined) for each other Fund, the Transfer
Agent will wire proceeds to you on the next Fund business day.
TELEPHONE REDEMPTION PRIVILEGES You may redeem your shares by telephone unless
you declined telephone redemption privileges on your account application. You
may be responsible for any fraudulent telephone order as long as the Transfer
Agent takes reasonable measures to verify the order.
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SYSTEMATIC WITHDRAWALS You may redeem a specified amount of money from your
account once a month on a specified date. These payments are sent from your
account to a designated bank account by ACH payment. Systematic withdrawals must
be for at least $250.
SIGNATURE GUARANTEE REQUIREMENTS To protect you and each Fund against fraud,
signatures on certain requests must have a "signature guarantee." A signature
guarantee verifies the authenticity of your signature. You can obtain one from
most banking institutions or securities brokers, but not from a notary public.
For requests made in writing, a signature guarantee is required for any of the
following:
o Sales of over $50,000 worth of shares
o Changes to a shareholder's record name
o Redemptions from an account for which the address or account
registration has changed within the last 30 days
o Sending redemption proceeds to any person, address, brokerage firm or
bank account not on record
o Sending redemption proceeds to an account with a different
registration (name or ownership) from yours
o Changes to systematic investment or withdrawal, distribution,
telephone redemption or exchange option or any other election in
connection with your account
SMALL ACCOUNTS If the value of your account falls below $5,000 ($500 for IRA
accounts), a Fund may ask you to increase your balance. If the account value is
still below $5,000 ($500 for IRAs) after 60 days, a Fund may close your account
and send you the proceeds.
REDEMPTIONS IN KIND Each Fund reserves the right to pay redemption proceeds in
portfolio securities rather than cash.
EXCHANGE PRIVILEGES
You may exchange your Investor Shares of a Fund for Investor Shares of another
Fund or for shares of certain other funds. For a list of other funds available
for exchange, you may call the Transfer Agent. If you exchange into a fund that
has a sales charge, you will have to pay that fund's sales charge. If you
exchange into a fund that has no sales charge, you will not have to pay a sales
charge at the time of exchange.
REQUIREMENTS You may exchange only between identically registered accounts
(name(s), address and taxpayer ID number). New accounts opened through an
exchange will be assigned the same shareholder privileges as the initial
account. You may exchange your shares by mail or by telephone, unless you
declined telephone redemption privileges on your account application. You may be
responsible for any fraudulent telephone order as long as the Transfer Agent
takes reasonable measures to verify the order.
HOW TO EXCHANGE
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number(s)
o The names of each fund and share class which you are exchanging
o The dollar amount or number of shares you want to sell (and exchange)
o Open a new account and complete an account application if you are
requesting different shareholder privileges
o Obtain a signature guarantee, if required
o Mail us your request and documentation
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number(s)
o Exact name(s) in which account is registered
o Additional form of identification
RETIREMENT ACCOUNTS
Each Fund (except Daily Assets Municipal Fund) offers IRA accounts, including
traditional and Roth IRAs. Each Fund may also be appropriate for other
retirement plans. Before investing in any IRA or other retirement plan, you
should consult your tax adviser. Whenever making an investment in an IRA, be
sure to indicate the year for which the contribution is made.
10
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
OTHER INFORMATION
ADDITIONAL INVESTMENT POLICIES
Each Fund and Portfolio operates in accordance with "Rule 2a-7" under the
Investment Company Act of 1940. All restrictions relating to maturity, credit
and diversification are interpreted in accordance with that rule.
A Portfolio may from time to time take temporary defensive positions in response
to adverse market, economic, political or other conditions. For instance, a
Portfolio may hold cash in any amount. Each Portfolio may invest a limited
amount in other money market mutual funds that have substantially similar
policies.
Securities in which a Portfolio invests may have variable or floating rates of
interest. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. Each Portfolio limits these securities to those
with an interest rate that is adjusted based solely on a single short-term rate
or index, such as the Prime Rate.
CORE AND GATEWAY(R)
Each Fund is a "gateway" fund in a "Core and Gateway" structure. Each Fund
invests substantially all of its assets in a corresponding Portfolio, each of
which is a series of Core Trust (Delaware) ("Core Trust"). A Fund may withdraw
its entire investment from a Portfolio at any time the Board decides it is in
the Fund's best interest to do so.
The Board of Trustees of Core Trust formulates the general policies of each
Portfolio and meets periodically to review each Portfolio's performance, monitor
investment activities and practices and discuss other matters affecting each
Portfolio. Additional information about the Core Trust board and executive
officers is in the SAI.
CLASSES OF SHARES
In addition to Investors Shares, each Fund offers Institutional Shares and
Institutional Service Shares. Institutional Shares are designed for
institutional investors and Institutional Service Shares are sold to banks,
trust companies and certain other financial institutions for their own and their
customer accounts. You may obtain prospectuses describing these classes of
shares by contacting the Transfer Agent. Each class has different fees and
investment minimums.
DISTRIBUTIONS
Each Fund declares distributions from its net investment income daily and pays
these distributions monthly. In addition, each Fund pays capital gain
distributions, if any, at least annually.
All distributions are reinvested in additional shares, unless you elect to
receive distributions in cash. For Federal income tax purposes, distributions
are treated the same whether they are received in cash or reinvested.
TAXES
GENERAL Each Fund intends to operate in a manner such that it will not be liable
for Federal income or excise tax.
A Fund's distribution of net income (including short-term capital gain) is
taxable to you as ordinary income. A Fund's distribution of long-term capital
gain, if any, is taxable to you as long-term capital gain regardless of how long
you have held Fund shares. Distributions may also be subject to certain state
and local taxes.
Each Fund will send you information about the income tax status of distributions
paid during the year shortly after December 31 of each year. For further
information about the tax effects of investing in a Fund, including state and
local tax matters, please see the SAI and consult your tax adviser.
DAILY ASSETS MUNICIPAL FUND It is anticipated that substantially all of the
Fund's net investment income will be "tax-exempt interest income." Generally,
you are not subject to Federal income tax on these distributions. Distributions
of other investment income and short-term capital gain are taxable to you as
ordinary income. It is anticipated that substantially all of the Fund's net
income will be exempt from Federal income tax. All distributions may be subject
to certain state and local taxes.
If you are a "substantial user" or a "related person" of a substantial user of
facilities financed by "private activity" securities held by the Fund, you may
have to pay Federal income tax on your pro-rata share of the net income
generated from these securities. Distributions of interest income on certain
private activity bonds are an item of tax preference for purposes of individual
and corporate Federal alternative minimum tax.
11
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FORUM FUNDS
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FINANCIAL HIGHLIGHTS
The following table is intended to help you understand the performance of
Investor Shares of each Fund. Total returns in the table represents the rate an
investor would have earned on an investment in a Fund (assuming the reinvestment
of all distributions). Prior to the operation of Investor Shares, Daily Assets
Government Fund and Daily Assets Cash Fund offered Institutional Service Shares.
Performance information for this class is also included in the table. The total
return of Investor Shares would have been lower than that of Institutional
Shares because of the higher expenses of Investor Shares. This information has
been audited by KPMG LLP. Each Fund's financial statements and independent
auditors' report are included in the Annual Report dated August 31, 2000, which
is available upon request, without charge.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED DATA FOR A SINGLE SHARE RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------- -----------------------------------------
Net Ratios to
Beginning Distributions Distributions Ending Assets at Average Net Assets
Net Asset Net From Net From Net Net End of ------------------------------
Value Per Investment Investment Realized Asset Period Net
Share Income Income Gain Value per Total (000's Net Investment Gross
Share Return Omitted) Expenses Income Expenses(a)
DAILY ASSETS TREASURY
OBLIGATIONS FUND
INVESTOR SHARES
Year Ended August 31, 2000 $1.00 0.05 (0.05) - $1.00 5.00% $25 0.90% 4.81% 57.02%
Year Ended August 31, 1999 1.00 0.04 (0.04) -(d) 1.00 4.00% 33 0.87% 3.87% 100.05%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 0.33% 10 0.78%(c) 5.06%(c) 727.11%(c)
1998 (b)
DAILY ASSETS GOVERNMENT
FUND(E)
INVESTOR SHARES
Year Ended August 31, 2000 1.00 0.05 (0.05) - 1.00 5.35% 442 0.75% 5.12% 4.28%
Period Ended August 31, 1.00 0.04 (0.04) -(d) 1.00 4.43% 703 0.75%(c) 4.25%(c) 5.45%(c)
1999(b)
INSTITUTIONAL SERVICE
SHARES
Year Ended August 31, 1999 1.00 0.05 (0.05) - 1.00 4.66% 5,775 0.45% 4.57% 1.15%
Year Ended August 31, 1998 1.00 0.05 (0.05) - 1.00 5.04% 9,485 0.46% 4.93% 0.91%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 2.01% 44,116 0.50%(c) 4.76%(c) 0.95%(c)
1997(e)
Year Ended March 31, 1997 1.00 0.05 (0.05) - 1.00 4.80% 43,975 0.50% 4.70% 0.99%
Year Ended March 31, 1996 1.00 0.05 (0.05) - 1.00 5.18% 43,103 0.50% 5.01% 1.06%
DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
INVESTOR SHARES
Year Ended August 31, 2000 1.00 0.05 (0.05) -(d) 1.00 5.21% 406 0.90% 5.33% 6.24%
Year Ended August 31, 1999 1.00 0.04 (0.04) - 1.00 4.32% 11 0.84% 4.24% 148.94%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 0.35% 10 0.78%(c) 5.06%(c) 766.21%(c)
1998 (b)
DAILY ASSETS CASH FUND
INVESTOR SHARES
Year Ended August 31, 2000 1.00 0.05 (0.05) - 1.00 5.31% 4,333 0.90% 5.58% 1.84%
Year Ended August 31, 1999 1.00 0.04 (0.04) - 1.00 4.40% 458 0.90% 4.13% 9.24%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 0.37% 10 0.78%(c) 5.25%(c) 709.02%(c)
1998 (b)
INSTITUTIONAL SERVICE SHARES
INVESTOR SHARES
Year Ended August 31, 1998 1.00 0.05 (0.05) - 1.00 5.34% 5,235 0.46% 5.22% 0.90%
Period Ended August 31, 1.00 0.05 (0.05) - 1.00 4.70% 12,076 0.52%(c) 5.06%(c) 1.22%(c)
1997(b)
DAILY ASSETS MUNICIPAL
FUND
Year Ended August 31, 2000 1.00 0.03 (0.03) - 1.00 2.99% 89 0.90% 2.96% 18.94%
Year Ended August 31, 1999 1.00 0.02 (0.02) - 1.00 2.36% 76 0.88% 2.23% 33.51%
Period Ended August 31, 1.00 0.01 (0.01) - 1.00 0.18% 10 0.78%(c) 2.53%(c) 749.20%(c)
1998 (b)
</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) INVESTOR SHARES OF DAILY ASSETS TREASURY OBLIGATIONS FUND COMMENCED
OPERATIONS ON AUGUST 6, 1998, INVESTOR SHARES OF DAILY ASSETS GOVERNMENT
FUND COMMENCED OPERATIONS ON SEPTEMBER 29, 1998 AND INVESTOR SHARES OF
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND, DAILY ASSETS CASH FUND AND DAILY
ASSETS MUNICIPAL FUND COMMENCED OPERATIONS ON AUGUST 6, 1998. INSTITUTIONAL
SERVICE SHARES OF DAILY ASSETS CASH FUND COMMENCED OPERATIONS ON OCTOBER 6,
1996.
(C) ANNUALIZED.
(D) LESS THAN $0.01 PER SHARE.
(E) THE FUND CHANGED ITS FISCAL YEAR END TO AUGUST 31 DURING THE PERIOD.
12
<PAGE>
<TABLE>
<S> <C>
FOR MORE INFORMATION FORUM
FUNDS
The following documents are available free upon request:
INVESTOR SHARES
ANNUAL/SEMI-ANNUAL REPORTS
Additional information about each Fund's investments
is available in the Funds' annual and semi-annual reports to shareholders. DAILY ASSETS TREASURY
OBLIGATIONS FUND
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
The SAI provides more detailed information about each Fund DAILY ASSETS GOVERNMENT FUND
and is incorporated by reference into
this Prospectus. DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
CONTACTING THE FUNDS
You can get a free copy of both reports and the SAI, DAILY ASSETS CASH FUND
request other information and discuss
your questions about each Fund DAILY ASSETS MUNICIPAL FUND
by contacting the Funds at:
Forum Shareholder Services, LLC
P.O. Box 446
Portland, Maine 04112
800-94FORUM or 800-943-6786
207-879-0001
SECURITIES AND EXCHANGE COMMISSION INFORMATION You can
also review each Fund's reports (when available)
and the SAIs at the Public Reference Room of the
Securities and Exchange Commission ("SEC").
The scheduled hours of operation of the Public Reference Room may
be obtained by calling the SEC at (202) 942-8090.
You can get copies of this information for a fee, by
e-mailing or writing to:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
E-mail address: [email protected]
[Edgarized graphic - Column Head]
Free copies of the reports and SAIs are available from the
SEC's Web site at www.sec.gov.
FORUM FUNDS
P.O. Box 446
Portland, Maine 04112
800-94FORUM or
800-943-6786
207-879-0001
Investment Company Act File No. 811-3023
</TABLE>
<PAGE>
FORUM PROSPECTUS
FUNDS INSTITUTIONAL SHARES
JANUARY 5, 2001
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND
FIVE MONEY MARKET FUNDS THAT,
SEEK TO PROVIDE HIGH CURRENT
INCOME TO THE EXTENT CONSISTENT
WITH THE PRESERVATION OF CAPITAL
AND THE MAINTENANCE OF LIQUIDITY.
IN ADDITION, DAILY ASSETS
MUNICIPAL FUND SEEKS TO PROVIDE
HIGH CURRENT INCOME THAT IS EXEMPT
FROM FEDERAL INCOME TAX.
THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE FUNDS'
SHARES OR DETERMINED WHETHER THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
[Edgarization of graphic representation of a globe, atlas, and calendar]
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
TABLE OF CONTENTS
SUMMARY 2
PERFORMANCE 4
FEE TABLES 5
MANAGEMENT 6
YOUR ACCOUNT 7
How To Contact the Funds 7
General Information 7
Buying Shares 8
Selling Shares 9
Exchange Privileges 10
OTHER INFORMATION 11
FINANCIAL HIGHLIGHTS 12
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
SUMMARY
<TABLE>
<S> <C>
CONCEPTS TO This Prospectus offers Institutional Shares of five money market funds - Daily Assets Treasury
UNDERSTAND Obligations Fund, Daily Assets Government Fund, Daily Assets Government Obligations Fund, Daily
Assets Cash Fund and Daily Assets Municipal Fund (each a "Fund"). Institutional Shares are designed
MONEY MARKET SECURITY means for institutional investors.
a high credit quality,
short-term, U.S. dollar INVESTMENT OBJECTIVES
denominated debt security.
The investment objective of each Fund, except Daily Assets Municipal Fund, is to provide high
TREASURY SECURITY current income to the extent consistent with the preservation of capital and the maintenance of
means a security that is liquidity. The investment objective of Daily Assets Municipal Fund is to provide high current
issued or guaranteed by income that is exempt from Federal income taxes to the extent consistent with the preservation of
the U.S. Treasury. capital and the maintenance of liquidity.
GOVERNMENT SECURITY means a PRINCIPAL INVESTMENT STRATEGIES
security that is issued or
guaranteed by the U.S. Each Fund invests in a diversified portfolio of Money Market Securities and:
Government, its agencies or o seeks to maintain a stable net asset value of $1.00 per share
instrumentalities. o invests in securities with remaining maturities of 397 days or less
o maintains a dollar weighted average maturity of its investments of 90 days or less
REPURCHASE AGREEMENT means
a transaction in which Each Fund invests substantially all of its assets in another mutual fund (each a "Portfolio,"
securities are purchased and collectively, the "Portfolios"), which has the same investment objective and substantially
and simultaneously similar investment policies. Each Portfolio in which a Fund invests and its primary
committed to be resold to investments are:
another party at an
agreed-upon date and at a FUND/PORTFOLIO PRIMARY INVESTMENTS
price reflecting a market Daily Assets Treasury Obligations Treasury Securities and Repurchase Agreements backed
rate of interest. Fund/Treasury Cash Portfolio by Treasury Securities
MUNICIPAL SECURITY means Daily Assets Government Government Securities that generally are exempt from
a security the interest Fund/Government Portfolio state and local income taxes
on which is exempt from
Federal income tax. Daily Assets Government Government Securities and Repurchase Agreements
Obligations Fund/Government Cash backed by Government Securities
Portfolio
Daily Assets Cash Fund/Cash A broad spectrum of Money Market Securities including:
Portfolio o securities issued by financial institutions, such as
certificates of deposits, bankers' acceptances and
time deposits
o securities issued by domestic companies, such as
commercial paper
o Government Securities
o Repurchase Agreements
Daily Assets Municipal Municipal Securities
Fund/Municipal Cash Portfolio
The investment adviser for each Portfolio (the "Adviser") continuously monitors economic
factors such as interest rate outlooks and technical factors such as prevailing interest rates and
Federal Reserve policy to determine an appropriate maturity profile for the Portfolio's
investments. The Adviser searches for securities that satisfy the maturity profile of a Portfolio
and that provide the greatest potential return relative to the risk of the security.
</TABLE>
2
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
Daily Assets Municipal Fund has substantial exposure to Municipal Securities
that are supported by various types of third-party credit and liquidity
enhancements. These investments are often comprised of long-term Municipal
Securities structured to allow the owner the option to sell the security back to
the issuer at par or a modest premium. Many of these investments have interest
rates that are reset periodically. The Adviser reviews and considers these
factors in its investment decisions and will only purchase a Municipal Security
if it believes that third-party credit and liquidity supporters possess minimal
credit risk. Up to 20% of the Fund's total assets may be invested in securities
the interest from which is not exempt from Federal income tax.
The Adviser may sell a Money Market Security if:
o Revised economic forecasts or interest rate outlook requires a
repositioning of a Portfolio
o The security subsequently fails to meet the Adviser's investment
criteria
o Funds are needed for another purpose
PRINCIPAL RISKS OF INVESTING IN A FUND
An investment in a Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although each Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in a Fund. There is
no assurance that any Fund will achieve its investment objective. An investment
in a Fund is not by itself a complete or balanced investment program.
The principal risks of investing in a Fund are:
INTEREST RATE RISK Interest rates may affect the value of a Portfolio's
investments. Increases in interest rates may cause a decline in value. In
addition, those increases may cause the Fund's investment performance to
underperform currently available investments.
CREDIT RISK The value of a security held by a Portfolio may decline if the
security's credit rating is downgraded or credit quality otherwise falls. In the
worst case, an issuer of a security or a repurchase agreement counterparty may
default or otherwise be unable to make timely payments of interest or principal.
Not all Government Securities are supported by the full faith and credit of the
U.S. Government.
MANAGEMENT RISK As with all mutual funds, the Adviser may make poor investment
decisions.
LOCAL ECONOMIC/POLITICAL RISK Changes in state or regional economies or politics
can adversely affect the value of the Municipal Securities issued in that
location. Up to 35% of Daily Assets Municipal Fund's assets maybe exposed to
Municipal Securities whose issuers are located in one state or territory.
The above risks can result in a decrease in the value of a security or all the
securities owned by a Portfolio and, therefore, cause a change in the Fund's
$1.00 per share value. These risks also can result in lower investment
performance of a Fund.
3
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
PERFORMANCE
The following charts and tables provide some indication of the risks of
investing in a Fund's Institutional Shares by showing changes in performance and
investment returns from year to year. PERFORMANCE INFORMATION PRESENTED HERE
REPRESENTS ONLY PAST PERFORMANCE AND DOES NOT NECESSARILY INDICATE FUTURE
RESULTS.
The following charts show the annual total return for each full calendar year
that the Funds' Institutional Shares have operated.
YEAR ENDED 12/31
DAILY ASSETS TREASURY OBLIGATIONS FUND
Best Quarter: 1.60% (quarter ended 9/30/00)
Worst Quarter 1.08% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 4.76%
2000 6.18%
DAILY ASSETS GOVERNMENT FUND
Best Quarter: 1.61% (quarter ended 12/31/00)
Worst Quarter 1.17% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 5.07%
2000 6.29%
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
Best Quarter: 1.63% (quarter ended 9/30/00)
Worst Quarter 1.17% (quarter ended 6/30/99)
[EDGAR Representation of bar chart]
1999 5.05%
2000 6.35%
DAILY ASSETS CASH FUND
Best Quarter: 1.65% (quarter ended 9/30/00)
Worst Quarter 1.19% (quarter ended 6/30/99)
[EDGAR Representation of bar chart]
1999 5.15%
2000 6.42%
DAILY ASSETS MUNICIPAL FUND
Best Quarter: 1.11% (quarter ended 6/30/00)
Worst Quarter 0.72% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 3.29%
2000 4.16%
The following table lists the Institutional Shares' average annual total return
as of December 31, 2000.
<TABLE>
<S> <C> <C> <C>
1 YEAR SINCE INCEPTION INCEPTION DATE
DAILY ASSETS TREASURY OBLIGATIONS FUND 6.18% 5.42% 1/22/98
DAILY ASSETS GOVERNMENT FUND 6.29% 5.57% 7/1/98
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND 6.35% 5.62% 1/30/98
DAILY ASSETS CASH FUND 6.42% 5.71% 3/13/98
DAILY ASSETS MUNICIPAL FUND 4.16% 3.62% 6/25/98
</TABLE>
4
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
FEE TABLES
The following table describes the various fees and expenses that you will pay if
you invest in Institutional Shares of a Fund. There are no charges to purchase
or redeem Fund shares.
<TABLE>
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
-------------------------------------------------------------------------------------------------------------------------------
DAILY ASSETS DAILY DAILY ASSETS DAILY DAILY
TREASURY ASSETS GOVERNMENT ASSETS ASSETS
OBLIGATIONS GOVERNMENT OBLIGATIONS CASH MUNICIPAL FUND
FUND FUND FUND FUND
-------------------------------------------------
Management Fees (1) 0.13% 0.15% 0.13% 0.13% 0.15%
-------------------------------------------------
Distribution (Rule 12b-1) Fees None None None None None
-------------------------------------------------
Other Expenses 0.20% 0.50% 0.24% 0.21% 0.73%
-------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES (2) 0.33% 0.65% 0.37% 0.34% 0.88%
-------------------------------------------------
Fee Waivers and Expense Reimbursements (3) 0.13% 0.45% 0.17% 0.14% 0.73%
-------------------------------------------------
NET EXPENSES 0.20% 0.20% 0.20% 0.20% 0.15%
-------------------------------------------------
</TABLE>
(1) INCLUDES ALL INVESTMENT ADVISORY AND ADMINISTRATION FEES.
(2) BASED ON AMOUNTS INCURRED DURING EACH FUND'S LAST FISCAL YEAR ENDED AUGUST
31, 2000 STATED AS A PERCENTAGE OF AVERAGE NET ASSETS PRIOR TO FEE WAIVERS
AND EXPENSE REIMBURSEMENTS. EACH FUND'S EXPENSES INCLUDE ITS PRO-RATA SHARE
OF THE EXPENSES OF ITS CORRESPONDING PORTFOLIO.
(3) BASED ON CERTAIN CONTRACTUAL FEE WAIVERS AND EXPENSE REIMBURSEMENTS
CURRENTLY IN EFFECT THAT MAY DECREASE AFTER DECEMBER 31, 2001.
EXAMPLE
The following is a hypothetical example intended to help you compare the cost of
investing in Institutional Shares of a Fund to the cost of investing in other
mutual funds. The example assumes that you invest $10,000 in a Fund's
Institutional Shares for the time periods indicated and then redeem all of your
shares at the end of those periods. The example also assumes that your
investment has a 5% annual return, that the Net Expenses (through December 31,
2001) and Total Annual Fund Operating Expenses (thereafter) remain as stated in
the above table and that distributions are reinvested. Although your actual
costs may be higher or lower, under these assumptions your costs would be:
<TABLE>
<S> <C> <C> <C> <C> <C>
DAILY ASSETS DAILY DAILY ASSETS DAILY ASSETS DAILY ASSETS
TREASURY ASSETS GOVERNMENT GOVERNMENT CASH MUNICIPAL
OBLIGATIONS FUND FUND OBLIGATIONS FUND FUND FUND
1 year $20 $20 $20 $20 $15
3 years $128 $173 $137 $131 $248
5 years $208 $328 $226 $212 $455
10 years $440 $777 $486 $451 $1,054
</TABLE>
5
<PAGE>
FORUM FUNDS
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MANAGEMENT
Each Fund is a series of Forum Funds (the "Trust"), an open-end, management
investment company. The business of the Trust and of each Fund is managed under
the direction of the Board of Trustees (the "Board"). The Board formulates the
general policies of each Fund and meets periodically to review each Fund's
performance, monitor investment activities and practices and discuss other
matters affecting each Fund. Additional information about the Board and the
Trust's executive officers is in the Statement of Additional Information (the
"SAI").
THE ADVISER
Each Portfolio's investment adviser is Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101. The Adviser is a privately owned company
controlled by John Y. Keffer. The Adviser makes investment decisions for each
Portfolio. In addition to the Portfolios, the Adviser manages two taxable and
three tax-free bond funds
During the Funds' last fiscal year, the aggregate advisory fees paid to the
Adviser from each Portfolio, as a percentage of average net assets, were:
<TABLE>
<S> <C> <C> <C> <C> <C>
PORTFOLIO TREASURY CASH GOVERNMENT GOVERNMENT CASH CASH MUNICIPAL CASH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------------------------------------------------
ADVISORY FEE 0.03% 0.05% 0.03% 0.03% 0.05%
</TABLE>
Each Fund pays its pro-rata share of its corresponding Portfolio's advisory fee,
which is based on the percentage of the Portfolio's net assets held by the Fund.
OTHER SERVICE PROVIDERS
The Forum Financial Group ("Forum") of companies provides various services to
each Fund. As of October 31, 2000, Forum provided administration and
distribution services to investment companies and collective investment funds
with assets of approximately $123 billion.
Forum Fund Services, LLC, a registered broker-dealer and member of the National
Association of Securities Dealers, Inc., is the distributor (principal
underwriter) of each Fund's shares. The distributor acts as the representative
of the Trust in connection with the offering of each Fund's shares. The
distributor may enter into arrangements with banks, broker-dealers or other
financial institutions through which investors may purchase or redeem shares and
may, at its own expense, compensate persons who provide services in connection
with the sale or expected sale of each Fund's shares.
Forum Administrative Services, LLC ("FAdS") provides administrative services to
each Fund, Forum Accounting Services, LLC is each Fund's fund accountant and
Forum Shareholder Services, LLC (the "Transfer Agent") is each Fund's transfer
agent.
FUND EXPENSES
Each Fund pays for its own expenses and bears its pro-rata share of expenses of
the Portfolio in which the Fund invests. Expenses of Institutional Shares
include the shares' own expenses as well as Trust expenses that are allocated
among each Fund, their classes of shares and all other funds of the Trust. The
Adviser and other service providers may waive all or any portion of their fees
and reimburse certain expenses of a Fund. Any fee waiver or expense
reimbursement increases investment performance of a Fund and its applicable
share classes for the period during which the waiver or reimbursement is in
effect.
Certain service providers of each Fund have undertaken, through December 31,
2001, to waive a portion of their fees and reimburse expenses in order to limit
total operating expenses (excluding taxes, interest, portfolio transaction
expenses and extraordinary expenses) of the Institutional Shares of Daily Assets
Municipal Fund to no more than 0.15% of the average daily net assets and to no
more than 0.20% of the average daily net assets of each other Fund.
6
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
YOUR ACCOUNT
HOW TO CONTACT THE FUNDS
<TABLE>
<S> <C>
WRITE TO US AT: ACH OR WIRE INVESTMENTS TO:
Forum Shareholder Services, LLC Bankers Trust Company
Attn: (Fund Name - Institutional Shares) New York, New York
P.O. Box 446 ABA #021001033
Portland, Maine 04112 FOR CREDIT TO:
Forum Shareholder Services, LLC
TELEPHONE US AT: Account # 01-465-547
(800) 94FORUM or Re: (Fund Name) - Institutional Shares
(800) 943-6786 (Toll Free) (Your Name)
(207) 879-0001 (Your Account Number)
</TABLE>
GENERAL INFORMATION
You may purchase or sell (redeem) shares at the net asset value of a share
("NAV") next calculated after the Transfer Agent receives your request in proper
form accompanied by funds on deposit at a Federal Reserve Bank ("Federal Funds).
Investments are not accepted or invested by a Fund during the period before the
receipt of Federal Funds.
Shares become entitled to receive distributions on the day of purchase if the
order and payment are received in proper form by the Transfer Agent as follows:
<TABLE>
<S> <C> <C>
ORDER MUST BE PAYMENT MUST BE
RECEIVED BY RECEIVED BY
DAILY ASSETS GOVERNMENT FUND 12:00 P.M., Eastern time 4:00 P.M., Eastern time
.............................................................................................................
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND 2:00 P.M., Eastern time 4:00 P.M., Eastern time
</TABLE>
On days that the Bond Market Association recommends an early close of the
government securities market or that those markets or Federal Reserve Bank of
San Francisco closes early, the Trust may advance the time by which the Transfer
Agent must receive completed purchase and redemption orders.
If you purchase shares directly from a Fund, you will receive monthly statements
and a confirmation of each transaction. You should verify the accuracy of all
transactions in your account as soon as you receive your confirmations.
Each Fund reserves the right to waive minimum investment amounts and may
temporarily suspend (during unusual market conditions) or discontinue any
service or privilege.
WHEN AND HOW NAV IS DETERMINED Each Fund calculates its NAV as of 4:00 P.M.,
Eastern time on each weekday except Federal holidays and other days that the
Federal Reserve Bank of San Francisco is closed. The time at which the NAV is
calculated may change in case of an emergency. In order to maintain a stable NAV
of $1.00 per share, each Fund (and the Portfolios in which they invest) values
the securities in its portfolio on an amortized cost basis.
TRANSACTIONS THROUGH THIRD PARTIES If you invest through a broker or other
financial institution, the policies and fees charged by that institution may be
different than those of a Fund. Financial institutions may charge transaction
fees and may set different minimum investments or limitations on buying or
selling shares. These institutions also may provide you with certain shareholder
services such as periodic account statements and trade confirmations. Consult a
representative of your financial institution for more information.
7
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FORUM FUNDS
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BUYING SHARES
HOW TO MAKE PAYMENTS All investments must be in U.S. dollars and checks must be
drawn on U.S. banks.
CHECKS Make checks payable to "Forum Funds". No other method of check
payment is acceptable.
AUTOMATED CLEARING HOUSE ("ACH") Instruct your financial institution
to transfer funds through the "Automated Clearing House" system.
WIRES Instruct your financial institution to make a Federal Funds wire
payment to us.
Your financial institution may charge you a fee for ACH or wire services.
MINIMUM INVESTMENTS Each Fund accepts payments in the following minimum amounts
for Institutional Shares:
MINIMUM INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT
Standard Accounts $1,000,000 $250
ACCOUNT REQUIREMENTS
<TABLE>
<S> <C>
TYPE OF ACCOUNT REQUIREMENT
INDIVIDUAL, SOLE PROPRIETORSHIP AND JOINT ACCOUNTS o Instructions must be signed by all persons required to
Individual accounts are owned by one person, as are sole sign exactly as their names appear on the account
proprietorship accounts. Joint accounts have two or more
owners (tenants)
BUSINESS ENTITIES o Submit a Corporate/Organization Resolution form or
similar document
TRUSTS o The trust must be established before an account
can be opened
o Provide a certified trust document, or the pages
from the trust document, that identify the trustees
</TABLE>
INVESTMENT PROCEDURES
<TABLE>
<S> <C>
HOW TO OPEN AN ACCOUNT HOW TO ADD TO YOUR ACCOUNT
BY CHECK BY CHECK
o Call or write us for an account application (and o Fill out an investment slip from a confirmation or write
Corporate/Organization Resolution form, if applicable) us a letter
o Complete the application (and resolution form) o Write your account number on your check
o Mail us your application (and resolution form) and a o Mail us the slip (or your letter) and the check
check
BY WIRE BY WIRE
o Call or write us for an account application (and o Call to notify us of your incoming wire
Corporate/Organization Resolution form, if applicable) o Instruct your bank to wire your money to us
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your original application (and resolution
form)
o Instruct your financial institution to wire your
money to us
BY ACH PAYMENT
o Call or write us for an account application (and
Corporate/Organization Resolution form, if applicable)
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your original application (and resolution form)
o Instruct your financial institution to send an ACH
payment to us
</TABLE>
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LIMITATIONS ON PURCHASES Each Fund reserves the right to refuse any purchase
(including exchange) request, particularly requests that could adversely affect
a Fund or its operations.
CANCELED OR FAILED PAYMENTS Each Fund accepts checks and ACH payments at full
value subject to collection. If a Fund does not receive your payment for shares
or you pay with a check or by ACH that does not clear, your purchase will be
canceled. You will be responsible for any losses or expenses incurred by a Fund,
the Transfer Agent or distributor and the Fund may redeem shares you own in the
account (or another identically registered account that you maintain with the
Transfer Agent) as reimbursement.
SELLING SHARES
Generally, a Fund will send redemption proceeds to you immediately after
receiving your redemption request in proper form. Shares are not entitled to
receive distributions declared on or after the day in which a redemption order
is accepted by the Transfer Agent.
HOW TO SELL SHARES FROM YOUR ACCOUNT
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o [Fund name] - Investor Shares
o The dollar amount or number of shares you want to sell
o How and where to send the redemption proceeds
o Obtain a signature guarantee (if required)
o Obtain other documentation (if required)
o Mail us your request and documentation
BY WIRE
o Wire redemptions are only available if your redemption is for $5,000 or
more and you did not decline wire redemption privileges on your account
application
o Call us with your request (unless you declined telephone redemption
privileges on your account application) (See "By Telephone") OR
o Mail us your request (See "By Mail")
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which the account is registered
o Additional form of identification
o Redemption proceeds will be:
o Mailed to you OR
o Wired to you (unless you declined wire redemption privileges on your
account application) (See "By Wire")
WIRE REDEMPTION PRIVILEGES You may redeem your shares by wire unless you
declined wire redemption privileges on your account application. The minimum
amount that may be redeemed by wire is $5,000. If the Transfer Agent receives
your wire redemption order after 12:00 P.M., Eastern time (or other time as may
be determined) for Daily Assets Government Fund or after 2:00 P.M., Eastern time
(or other time as may be determined) for each other Fund, the Transfer Agent
will wire proceeds to you on the next Fund business day.
TELEPHONE REDEMPTION PRIVILEGES You may redeem your shares by telephone unless
you declined telephone redemption privileges on your account application. You
may be responsible for any fraudulent telephone order as long as the Transfer
Agent takes reasonable measures to verify the order.
9
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SIGNATURE GUARANTEE REQUIREMENTS To protect you and each Fund against fraud,
signatures on certain requests must have a "signature guarantee." A signature
guarantee verifies the authenticity of your signature. You can obtain one from
most banking institutions or securities brokers, but not from a notary public.
For requests made in writing, a signature guarantee is required for any of the
following:
o Sales of over $50,000 worth of shares
o Changes to a shareholder's record name
o Redemptions from an account for which the address or account
registration has changed within the last 30 days
o Sending redemption proceeds to any person, address, brokerage firm or
bank account not on record
o Sending redemption proceeds to an account with a different
registration (name or ownership) from yours
o Changes to distribution, telephone redemption or exchange option or
any other election in connection with your account
SMALL ACCOUNTS If the value of your account falls below $100,000, a Fund may ask
you to increase your balance. If the account value is still below $100,000 after
60 days, a Fund may close your account and send you the proceeds.
REDEMPTIONS IN KIND Each Fund reserves the right to pay redemption proceeds in
portfolio securities rather than cash.
EXCHANGE PRIVILEGES
You may exchange your Institutional Shares of a Fund for Institutional Shares of
another Fund.
REQUIREMENTS You may exchange only between identically registered accounts
(name(s), address and taxpayer ID number). New accounts opened through an
exchange will be assigned the same shareholder privileges as the initial
account. You may exchange your shares by mail or by telephone, unless you
declined telephone redemption privileges on your account application. You may be
responsible for any fraudulent telephone order as long as the Transfer Agent
takes reasonable measures to verify the order.
HOW TO EXCHANGE
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number(s)
o The names of each fund and share class which you are exchanging
o The dollar amount or number of shares you want to sell (and exchange)
o Open a new account and complete an account application if you are
requesting different shareholder privileges
o Obtain a signature guarantee, if required
o Mail us your request and documentation
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number(s)
o Exact name(s) in which account is registered
o Additional form of identification
10
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OTHER INFORMATION
ADDITIONAL INVESTMENT POLICIES
Each Fund and Portfolio operates in accordance with "Rule 2a-7" under the
Investment Company Act of 1940. All restrictions relating to maturity, credit
and diversification are interpreted in accordance with that rule.
A Portfolio may from time to time take temporary defensive positions in response
to adverse market, economic, political or other conditions. For instance, a
Portfolio may hold cash in any amount. Each Portfolio may invest in other money
market mutual funds that have substantially similar policies.
Securities in which a Portfolio invests may have variable or floating rates of
interest. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. Each Portfolio limits these securities to those
with an interest rate that is adjusted based solely on a single short-term rate
or index, such as the Prime Rate.
CORE AND GATEWAY(R)
Each Fund is a "gateway" fund in a "Core and Gateway" structure. Each Fund
invests substantially all of its assets in a corresponding Portfolio, each of
which is a series of Core Trust (Delaware) ("Core Trust"). A Fund may withdraw
its entire investment from a Portfolio at any time that the Board decides it is
in the Fund's best interest to do so.
The Board of Trustees of Core Trust formulates the general policies of each
Portfolio and meets periodically to review each Portfolio's performance, monitor
investment activities and practices and discuss other matters affecting each
Portfolio. Additional information about the Core Trust board and executive
officers is in the SAI.
CLASSES OF SHARES
In addition to Institutional Shares, each Fund also offers Investor Shares and
Institutional Service Shares. Investor Shares are designed for retail investors
and Institutional Service Shares are sold to banks, trust companies and certain
other financial institutions for their own and their customer accounts. You may
obtain prospectuses describing these classes of shares by contacting the
Transfer Agent. Each class has different fees and investment minimums.
DISTRIBUTIONS
Each Fund declares distributions from its net investment income daily and pays
these distributions monthly. In addition, each Fund pays capital gain
distributions, if any, at least annually.
All distributions are reinvested in additional shares, unless you elect to
receive distributions in cash. For Federal income tax purposes, distributions
are treated the same whether they are received in cash or reinvested.
TAXES
GENERAL Each Fund intends to operate in a manner such that it will not be liable
for Federal income or excise tax.
A Fund's distribution of net income (including short-term capital gain) is
taxable to you as ordinary income. A Fund's distribution of long-term capital
gain, if any, is taxable to you as long-term capital gain regardless of how long
you have held Fund shares. Distributions may also be subject to certain state
and local taxes.
Each Fund will send you information about the income tax status of distributions
paid during the year shortly after December 31 of each year. For further
information about the tax effects of investing in a Fund, including state and
local tax matters, please see the SAI and consult your tax adviser.
DAILY ASSETS MUNICIPAL FUND It is anticipated that substantially all of the
Fund's net income will be "tax-exempt interest income." Generally, you are not
subject to Federal income tax on these distributions. Distributions of other
investment income and short-term capital gain are taxable to you as ordinary
income. It is anticipated that substantially all of the Fund's net income will
be exempt from Federal income tax. All distributions may be subject to certain
state and local taxes.
If you are a "substantial user" or a "related person" of a substantial user of
facilities financed by "private activity" securities held by the Fund, you may
have to pay Federal income tax on your pro-rata share of the net income
generated from these securities. Distributions of interest income on certain
private activity bonds are an item of tax preference for purposes of individual
and corporate Federal alternative minimum tax.
11
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FINANCIAL HIGHLIGHTS
The following table is intended to help you understand the performance of
Institutional Shares of each Fund. Total return in the table represents the rate
an investor would have earned on an investment in a Fund's Institutional Shares
(assuming the reinvestment of all distributions). Prior to the operation of
Institutional Shares, Daily Assets Government Fund and Daily Assets Cash Fund
offered Institutional Service Shares. Performance information for this class is
also included in the following table. This information has been audited by KPMG
LLP. Each Fund's financial statements and independent auditors' report are
included in the Annual Report dated August 31, 2000, which is available upon
request, without charge.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED DATA FOR A SINGLE SHARE RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------- -----------------------------------------
Net Ratios to
Beginning Distributions Distributions Ending Assets at Average Net Assets
Net Asset Net From Net From Net Net End of ------------------------------
Value Per Investment Investment Realized Asset Period Net
Share Income Income Gain Value per Total (000's Net Investment Gross
Share Return Omitted) Expenses Income Expenses(a)
DAILY ASSETS TREASURY
OBLIGATIONS FUND
INSTITUTIONAL SHARES
Year Ended August 31, 2000 $1.00 0.06 (0.06) - $1.00 5.74% $108,372 0.20% 5.65% 0.33%
Year Ended August 31, 1999 1.00 0.05 (0.05) -(d) 1.00 4.67% 86,295 0.20% 4.58% 0.32%
Period Ended August 31, 1.00 0.03 (0.03) - 1.00 3.34% 110,561 0.20%(c) 5.41%(c) 0.47%(c)
1998 (b)
DAILY ASSETS GOVERNMENT
FUND
INSTITUTIONAL SHARES
Year Ended August 31, 2000 1.00 0.06 (0.06) - 1.00 5.93% 39,777 0.20% 5.78% 0.65%
Year Ended August 31, 1999 1.00 0.05 (0.05) - 1.00 4.92% 28,709 0.20% 4.81% 0.61%
Period Ended August 31, 1.00 0.01 (0.01) - 1.00 0.89% 36,095 0.20%(c) 5.26%(c) 0.69%(c)
1998 (b)
INSTITUTIONAL SERVICE
SHARES
Year Ended August 31, 1998 1.00 0.05 (0.05) - 1.00 5.04% 9,485 0.46% 4.93% 0.91%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 2.01% 44,116 0.50%(c) 4.76%(c) 0.95%(c)
1997(e)
Year Ended March 31, 1997 1.00 0.05 (0.05) - 1.00 4.80% 43,975 0.50% 4.70% 0.99%
Year Ended March 31, 1996 1.00 0.05 (0.05) - 1.00 5.18% 43,103 0.50% 5.01% 1.06%
DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
INSTITUTIONAL SHARES
Year Ended August 31, 2000 1.00 0.06 (0.06) -(d) 1.00 5.94% 34,909 0.20% 5.83% 0.37%
Year Ended August 31, 1999 1.00 0.05 (0.05) - 1.00 4.98% 26,627 0.20% 4.85% 0.40%
Period Ended August 31, 1.00 0.03 (0.03) - 1.00 3.24% 15,352 0.20%(c) 5.43%(c) 0.74%(c)
1998 (b)
DAILY ASSETS CASH FUND
INSTITUTIONAL SHARES
Year Ended August 31, 2000 1.00 0.06 (0.06) - 1.00 6.05% 42,165 0.20% 5.93% 0.34%
Year Ended August 31, 1999 1.00 0.05 (0.05) - 1.00 5.07% 38,926 0.20% 4.93% 0.35%
Period Ended August 31, 1.00 0.03 (0.03) - 1.00 2.70% 28,396 0.20%(c) 5.46%(c) 0.68%(c)
1998 (b)
INSTITUTIONAL SERVICE
SHARES
Year Ended August 31, 1998 1.00 0.05 (0.05) - 1.00 5.34% 5,235 0.46% 5.22% 0.90%
Period Ended August 31, 1.00 0.05 (0.05) - 1.00 4.70% 12,076 0.52%(c) 5.06%(c) 1.22%(c)
1997(b)
DAILY ASSETS MUNICIPAL
FUND
INSTITUTIONAL SHARES
Year Ended August 31, 2000 1.00 0.04 (0.04) - 1.00 3.92% 20,980 0.00% 3.83% 0.88%
Year Ended August 31, 1999 1.00 0.03 (0.03) - 1.00 3.15% 20,624 0.05% 3.10% 0.72%
Period Ended August 31, 1.00 0.01 (0.01) - 1.00 0.59% 20,773 0.12%(c) 3.16%(c) 1.26%(c)
1998 (b)
</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) INSTITUTIONAL SHARES OF DAILY ASSETS TREASURY OBLIGATIONS FUND, DAILY
ASSETS GOVERNMENT FUND, DAILY ASSETS GOVERNMENT OBLIGATIONS FUND, DAILY
ASSETS CASH FUND AND DAILY ASSETS MUNICIPAL FUND COMMENCED OPERATIONS ON
JANUARY 22, 1998, JULY 1, 1998, JANUARY 30, 1998, MARCH 13, 1998 AND JUNE
25, 1998 RESPECTIVELY. INSTITUTIONAL SERVICE SHARES OF DAILY ASSETS CASH
FUND COMMENCED OPERATIONS ON OCTOBER 1, 1996.
(C) ANNUALIZED.
(D) LESS THAN $0.01 PER SHARE.
(E) THE FUND CHANGED ITS FISCAL YEAR END TO AUGUST 31 DURING THE PERIOD.
12
<PAGE>
<TABLE>
<S> <C>
FOR MORE INFORMATION FORUM
FUNDS
The following documents are available free upon request:
INSTITUTIONAL SHARES
ANNUAL/SEMI-ANNUAL REPORTS
Additional information about each Fund's investments
is available in the Funds' annual and semi-annual reports to shareholders. DAILY ASSETS TREASURY
OBLIGATIONS FUND
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
The SAI provides more detailed information about each Fund DAILY ASSETS GOVERNMENT FUND
and is incorporated by reference into
this Prospectus. DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
CONTACTING THE FUNDS
You can get a free copy of both reports and the SAI, DAILY ASSETS CASH FUND
request other information and discuss
your questions about each Fund DAILY ASSETS MUNICIPAL FUND
by contacting the Funds at:
Forum Shareholder Services, LLC
P.O. Box 446
Portland, Maine 04112
800-94FORUM or 800-943-6786
207-879-0001
SECURITIES AND EXCHANGE COMMISSION INFORMATION You can
also review each Fund's reports (when available)
and the SAIs at the Public Reference Room of the
Securities and Exchange Commission ("SEC").
The scheduled hours of operation of the Public Reference Room may
be obtained by calling the SEC at (202) 942-8090.
You can get copies of this information for a fee, by
e-mailing or writing to:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
E-mail address: [email protected]
[Edgarized graphic - Column Head]
Free copies of the reports and SAIs are available from the
SEC's Web site at www.sec.gov.
FORUM FUNDS
P.O. Box 446
Portland, Maine 04112
800-94FORUM or
800-943-6786
207-879-0001
Investment Company Act File No. 811-3023
</TABLE>
<PAGE>
FORUM PROSPECTUS
FUNDS INSTITUTIONAL SERVICE SHARES
JANUARY 5, 2001
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND
FIVE MONEY MARKET FUNDS THAT,
SEEK TO PROVIDE HIGH CURRENT
INCOME TO THE EXTENT CONSISTENT
WITH THE PRESERVATION OF CAPITAL
AND THE MAINTENANCE OF LIQUIDITY.
IN ADDITION, DAILY ASSETS
MUNICIPAL FUND SEEKS TO PROVIDE
HIGH CURRENT INCOME THAT IS EXEMPT
FROM FEDERAL INCOME TAX.
THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE FUNDS'
SHARES OR DETERMINED WHETHER THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
[Edgarization of graphic representation of a globe, atlas, and calendar]
<PAGE>
FORUM FUNDS
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TABLE OF CONTENTS
SUMMARY 2
PERFORMANCE 4
FEE TABLES 5
MANAGEMENT 6
YOUR ACCOUNT 7
How To Contact the Funds 7
General Information 7
Buying Shares 8
Selling Shares 9
Exchange Privileges 10
OTHER INFORMATION 11
FINANCIAL HIGHLIGHTS 12
<PAGE>
FORUM FUNDS
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SUMMARY
<TABLE>
<S> <C>
CONCEPTS TO This Prospectus offers Institutional Service Shares of five money market funds - Daily Assets Treasury
UNDERSTAND Obligations Fund, Daily Assets Government Fund, Daily Assets Government Obligations Fund, Daily
Assets Cash Fund and Daily Assets Municipal Fund (each a "Fund"). Institutional Shares are sold to
MONEY MARKET SECURITY means banks, trust companies and certain other financial institutions for their own and customer accounts.
a high credit quality,
short-term, U.S. dollar INVESTMENT OBJECTIVES
denominated debt security.
The investment objective of each Fund, except Daily Assets Municipal Fund, is to provide high
TREASURY SECURITY current income to the extent consistent with the preservation of capital and the maintenance of
means a security that is liquidity. The investment objective of Daily Assets Municipal Fund is to provide high current
issued or guaranteed by income that is exempt from Federal income taxes to the extent consistent with the preservation of
the U.S. Treasury. capital and the maintenance of liquidity.
GOVERNMENT SECURITY means a PRINCIPAL INVESTMENT STRATEGIES
security that is issued or
guaranteed by the U.S. Each Fund invests in a diversified portfolio of Money Market Securities and:
Government, its agencies or o seeks to maintain a stable net asset value of $1.00 per share
instrumentalities. o invests in securities with remaining maturities of 397 days or less
o maintains a dollar weighted average maturity of its investments of 90 days or less
REPURCHASE AGREEMENT means
a transaction in which Each Fund invests substantially all of its assets in another mutual fund (each a "Portfolio,"
securities are purchased and collectively, the "Portfolios"), which has the same investment objective and substantially
and simultaneously similar investment policies. Each Portfolio in which a Fund invests and its primary
committed to be resold to investments are:
another party at an
agreed-upon date and at a FUND/PORTFOLIO PRIMARY INVESTMENTS
price reflecting a market Daily Assets Treasury Obligations Treasury Securities and Repurchase Agreements backed
rate of interest. Fund/Treasury Cash Portfolio by Treasury Securities
MUNICIPAL SECURITY means Daily Assets Government Government Securities that generally are exempt from
a security the interest Fund/Government Portfolio state and local income taxes
on which is exempt from
Federal income tax. Daily Assets Government Government Securities and Repurchase Agreements
Obligations Fund/Government Cash backed by Government Securities
Portfolio
Daily Assets Cash Fund/Cash A broad spectrum of Money Market Securities including:
Portfolio o securities issued by financial institutions, such as
certificates of deposits, bankers' acceptances and
time deposits
o securities issued by domestic companies, such as
commercial paper
o Government Securities
o Repurchase Agreements
Daily Assets Municipal Municipal Securities
Fund/Municipal Cash Portfolio
The investment adviser for each Portfolio (the "Adviser") continuously monitors economic
factors such as interest rate outlooks and technical factors such as prevailing interest rates and
Federal Reserve policy to determine an appropriate maturity profile for the Portfolio's
investments. The Adviser searches for securities that satisfy the maturity profile of a Portfolio
and that provide the greatest potential return relative to the risk of the security.
</TABLE>
2
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Daily Assets Municipal Fund has substantial exposure to Municipal Securities
that are supported by various types of third-party credit and liquidity
enhancements. These investments are often comprised of long-term Municipal
Securities structured to allow the owner the option to sell the security back to
the issuer at par or a modest premium. Many of these investments have interest
rates that are reset periodically. The Adviser reviews and considers these
factors in its investment decisions and will only purchase a Municipal Security
if it believes that third-party credit and liquidity supporters possess minimal
credit risk. Up to 20% of the Fund's total assets may be invested in securities
the interest from which is not exempt from Federal income tax.
The Adviser may sell a Money Market Security if:
o Revised economic forecasts or interest rate outlook requires a
repositioning of a Portfolio
o The security subsequently fails to meet the Adviser's investment
criteria
o Funds are needed for another purpose
PRINCIPAL RISKS OF INVESTING IN A FUND
An investment in a Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although each Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in a Fund. There is
no assurance that any Fund will achieve its investment objective. An investment
in a Fund is not by itself a complete or balanced investment program.
The principal risks of investing in a Fund are:
INTEREST RATE RISK Interest rates affect the value of a Portfolio's investments.
Increases in interest rates may cause a decline in the value of a Portfolio's
investments. In addition, those increases may cause the Fund's investment
performance to underperform currently available investments.
CREDIT RISK The value of a security held by a Portfolio may decline if the
security's credit rating is downgraded or the security's credit quality
otherwise falls. In the worst case, an issuer of a security or a repurchase
agreement counterparty may default or otherwise be unable to make timely
payments of interest or principal. Not all Government Securities are supported
by the full faith and credit of the U.S. Government.
MANAGEMENT RISK As with all mutual funds, the Adviser may make poor investment
decisions.
LOCAL ECONOMIC/POLITICAL RISK Changes in state or regional economies or politics
can adversely affect the value of the Municipal Securities issued in that
location. Up to 35% of Daily Assets Municipal Fund's assets may be exposed to
Municipal Securities whose issuers are located in one state or territory.
The above risks can result in a decrease in the value of a security or all the
securities owned by a Portfolio and, therefore, cause a change in the Fund's
$1.00 per share value. These risks also can result in lower investment
performance of a Fund.
3
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FORUM FUNDS
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PERFORMANCE
The following charts and tables provide some indication of the risks of
investing in a Fund's Institutional Service Shares by showing changes in
performance and investment returns from year to year. PERFORMANCE INFORMATION
PRESENTED HERE REPRESENTS ONLY PAST PERFORMANCE AND DOES NOT NECESSARILY
INDICATE FUTURE RESULTS.
The following charts show the annual total return for each full calendar year
that the Funds' Institutional Service Shares have operated.
YEAR ENDED 12/31
DAILY ASSETS TREASURY OBLIGATIONS FUND
Best Quarter: 1.53% (quarter ended 9/30/00)
Worst Quarter 1.02% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 4.50%
2000 5.92%
DAILY ASSETS GOVERNMENT FUND
Best Quarter: 1.54% (quarter ended 9/30/00)
Worst Quarter 0.69% (quarter ended 6/30/93)
[EDGAR Representation of bar chart]
1993 2.83%
1994 3.80%
1995 5.36%
1996 4.82%
1997 4.87%
1998 4.97%
1999 4.81%
2000 6.03%
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
Best Quarter: 1.57% (quarter ended 9/30/00)
Worst Quarter 1.11% (quarter ended 6/30/99)
[EDGAR Representation of bar chart]
1999 4.78%
2000 6.09%
DAILY ASSETS CASH FUND
Best Quarter: 1.58% (quarter ended 9/30/00)
Worst Quarter 1.12% (quarter ended 6/30/99)
[EDGAR Representation of bar chart]
1997 5.23%
1998 5.26%
1999 4.89%
2000 6.15%
DAILY ASSETS MUNICIPAL FUND
Best Quarter: 0.99% (quarter ended 6/30/00)
Worst Quarter 0.62% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 2.84%
2000 3.70%
The following table lists the Institutional Service Shares' average annual total
return as of December 31, 2000.
<TABLE>
<S> <C> <C> <C> <C>
1 YEAR 5 YEAR SINCE INCEPTION INCEPTION DATE
DAILY ASSETS TREASURY OBLIGATIONS FUND 5.92% N/A 5.15% 4/1/98
DAILY ASSETS GOVERNMENT FUND 6.03% 5.27% 4.60% 7/1/92
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND 6.09% N/A 5.36% 3/30/98
DAILY ASSETS CASH FUND 6.15% 5.44 5.37% 10/1/96
DAILY ASSETS MUNICIPAL FUND 3.70% N/A 3.21% 8/6/98
</TABLE>
4
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
FEE TABLES
The following tables describe the various fees and expenses that you will pay if
you invest in Institutional Service Shares of a Fund. There are no charges to
purchase or redeem Fund shares.
<TABLE>
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
-------------------------------------------------
DAILY ASSETS DAILY DAILY ASSETS DAILY DAILY
TREASURY ASSETS GOVERNMENT ASSETS ASSETS
OBLIGATIONS GOVERNMENT OBLIGATIONS CASH MUNICIPAL FUND
FUND FUND FUND FUND
-------------------------------------------------
Management Fees (1) 0.13% 0.15% 0.13% 0.13% 0.15%
-------------------------------------------------
Distribution (Rule 12b-1) Fees None None None None None
-------------------------------------------------
Other Expenses 0.65% 1.22% 0.57% 0.52% 1.81%
-------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES (2) 0.78% 1.37% 0.70% 0.65% 1.96%
-------------------------------------------------
Fee Waivers and Expense Reimbursements (3) 0.33% 0.92% 0.25% 0.20% 1.51%
-------------------------------------------------
NET EXPENSES 0.45% 0.45% 0.45% 0.45% 0.45%
-------------------------------------------------
</TABLE>
(1) INCLUDES ALL INVESTMENT ADVISORY AND ADMINISTRATION FEES.
(2) BASED ON AMOUNTS INCURRED DURING EACH FUND'S LAST FISCAL YEAR ENDED AUGUST
31, 2000 STATED AS A PERCENTAGE OF AVERAGE NET ASSETS PRIOR TO FEE WAIVERS
AND EXPENSE REIMBURSEMENTS. EACH FUND'S EXPENSES INCLUDE ITS PRO-RATA SHARE
OF THE EXPENSES OF ITS CORRESPONDING PORTFOLIO.
(3) BASED ON CERTAIN CONTRACTUAL FEE WAIVERS AND EXPENSE REIMBURSEMENTS
CURRENTLY IN EFFECT THAT MAY DECREASE AFTER DECEMBER 31, 2001.
EXAMPLE
The following is a hypothetical example intended to help you compare the cost of
investing in Institutional Service Shares of a Fund to the cost of investing in
other mutual funds. The example assumes that you invest $10,000 in a Fund's
Institutional Service Shares for the time periods indicated and then redeem all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% annual return, that the Net Expenses (through December 31,
2001) and Total Annual Fund Operating Expenses (thereafter) remain as stated in
the above table and that distributions are reinvested. Although your actual
costs may be higher or lower, under these assumptions your costs would be:
<TABLE>
<S> <C> <C> <C> <C> <C>
DAILY ASSETS DAILY ASSETS DAILY ASSETS DAILY ASSETS DAILY ASSETS
TREASURY GOVERNMENT GOVERNMENT CASH MUNICIPAL
OBLIGATIONS FUND FUND OBLIGATIONS FUND FUND FUND
1 year $46 $46 $46 $46 $46
3 years $226 $353 $209 $200 $478
5 years $411 $672 $375 $357 $926
10 years $945 $1,575 $856 $812 $2,171
</TABLE>
5
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
MANAGEMENT
Each Fund is a series of Forum Funds (the "Trust"), an open-end, management
investment company. The business of the Trust and of each Fund is managed under
the direction of the Board of Trustees (the "Board"). The Board formulates the
general policies of each Fund and meets periodically to review each Fund's
performance, monitor investment activities and practices and discuss other
matters affecting each Fund. Additional information about the Board and the
Trust's executive officers is in the Statement of Additional Information
("SAI").
THE ADVISER
Each Portfolio's investment adviser is Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101. The Adviser is a privately owned company
controlled by John Y. Keffer. The Adviser makes investment decisions for each
Portfolio. In addition to the Portfolios, the Adviser advises two taxable and
three tax-free bond funds.
During the Funds' last fiscal year, the aggregate advisory fees paid to the
Adviser from each Portfolio, as a percentage of average net assets, were:
<TABLE>
<S> <C> <C> <C> <C> <C>
PORTFOLIO TREASURY CASH GOVERNMENT GOVERNMENT CASH CASH MUNICIPAL CASH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------------------------------------------------
ADVISORY FEE 0.03% 0.05% 0.03% 0.03% 0.05%
</TABLE>
Each Fund pays its pro-rata share of its corresponding Portfolio's advisory fee,
which is based on the percentage of the Portfolio's net assets held by the Fund.
OTHER SERVICE PROVIDERS
The Forum Financial Group ("Forum") of companies provides various services to
each Fund. As of October 31, 2000, Forum provided administration and
distribution services to investment companies and collective investment funds
with assets of approximately $123 billion.
Forum Fund Services, LLC, a registered broker-dealer and member of the National
Association of Securities Dealers, Inc., is the distributor (principal
underwriter) of each Fund's shares. The distributor acts as the representative
of the Trust in connection with the offering of each Fund's shares. The
distributor may enter into arrangements with banks, broker-dealers or other
financial institutions through which investors may purchase or redeem shares and
may, at its own expense, compensate persons who provide services in connection
with the sale or expected sale of each Fund's shares.
Forum Administrative Services, LLC ("FAdS") provides administrative services to
each Fund, Forum Accounting Services, LLC is each Fund's fund accountant and
Forum Shareholder Services, LLC (the "Transfer Agent") is each Fund's transfer
agent. The Trust has adopted a shareholder servicing plan under which the Trust
pays FAdS a fee for providing shareholder services that are not otherwise
provided by the Transfer Agent. FAdS may pay this fee to various financial
institutions that provide shareholder servicing to their customers invested in
Institutional Service Shares.
FUND EXPENSES
Each Fund pays for its own expenses and bears its pro-rata share of expenses of
the Portfolio in which the Fund invests. Expenses of Institutional Service
Shares include the shares' own expenses as well as Trust expenses that are
allocated among each Fund, their classes of shares and the other funds of the
Trust. The Adviser and other service providers may waive all or any portion of
their fees and reimburse certain expenses of a Fund. Any fee waiver or expense
reimbursement increases investment performance of a Fund and its applicable
share classes for the period during which the waiver or reimbursement is in
effect.
Certain service providers of each Fund have undertaken through December 31, 2001
to waive a portion of their fees and reimburse expenses in order to limit total
operating expenses (excluding taxes, interest, portfolio transaction expenses
and extraordinary expenses) of Institutional Service Shares of each Fund to no
more than 0.45% of the average daily net assets.
6
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
YOUR ACCOUNT
HOW TO CONTACT THE FUNDS
<TABLE>
<S> <C>
WRITE TO US AT: ACH OR WIRE INVESTMENTS TO:
Forum Shareholder Services, LLC Bankers Trust Company
Attn: (Fund Name - Institutional Service Shares) New York, New York
P.O. Box 446 ABA #021001033
Portland, Maine 04112 FOR CREDIT TO:
Forum Shareholder Services, LLC
TELEPHONE US AT: Account # 01-465-547
(800) 94FORUM or Re: (Fund Name) - Institutional Service Shares
(800) 943-6786 (Toll Free) (Your Name)
(207) 879-0001 (Your Account Number)
</TABLE>
GENERAL INFORMATION
You may purchase or sell (redeem) shares at the net asset value of a share
("NAV") next calculated after the Transfer Agent receives your request in proper
form accompanied by funds on deposit at a Federal Reserve Bank ("Federal
Funds"). Investments are not accepted or invested by a Fund during the period
before the receipt of Federal Funds.
Shares become entitled to receive distributions on the day of purchase if the
order and payment are received in proper form by the Transfer Agent as follows:
<TABLE>
<S> <C> <C>
ORDER MUST BE PAYMENT MUST BE
RECEIVED BY RECEIVED BY
DAILY ASSETS GOVERNMENT FUND 12:00 P.M., Eastern time 4:00 P.M., Eastern time
.............................................................................................................
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND 2:00 P.M., Eastern time 4:00 P.M., Eastern time
</TABLE>
On days that the Bond Market Association recommends an early close of the
government securities market or that those markets or the Federal Reserve Bank
of San Francisco closes early, the Trust may advance the time by which the
Transfer Agent must receive completed purchase and redemption orders.
If you purchase shares directly from a Fund, you will receive monthly statements
and a confirmation of each transaction. You should verify the accuracy of all
transactions in your account as soon as you receive your confirmations.
Each Fund reserves the right to waive minimum investment amounts and may
temporarily suspend (during unusual market conditions) or discontinue any
service or privilege.
WHEN AND HOW NAV IS DETERMINED Each Fund calculates its NAV at 4:00 P.M.,
Eastern time on each weekday except Federal holidays and other days that the
Federal Reserve Bank of San Francisco is closed. The time at which the NAV is
calculated may change in case of an emergency. In order to maintain a stable NAV
of $1.00 per share, each Fund (and the Portfolios in which they invest) values
the securities in its portfolio on an amortized cost basis.
TRANSACTIONS THROUGH THIRD PARTIES If you invest through a broker or other
financial institution, the policies and fees charged by that institution may be
different than those of a Fund. Financial institutions may charge transaction
fees and may set different minimum investments or limitations on buying or
selling shares. These institutions also may provide you with certain shareholder
services such as periodic account statements and trade confirmations. Consult a
representative of your financial institution for more information.
BUYING SHARES
HOW TO MAKE PAYMENTS All investments must be in U.S. dollars and checks must be
drawn on U.S. banks.
CHECKS For individual, sole proprietorship, joint, Uniform Gift to
Minors Act ("UGMA") or Uniform Transfers to Minors Act ("UTMA")
accounts, make checks payable to "Forum Funds" or to one or more owners
of the account and endorsed to "Forum Funds." For all other accounts,
the check must be made payable on its face to "Forum Funds." No other
method of check payment is acceptable (for instance, you may not pay by
traveler's check).
AUTOMATED CLEARING HOUSE ("ACH") Instruct your financial institution to
transfer funds through the "Automated Clearing House" system.
7
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
WIRES Instruct your financial institution to make a Federal Funds wire
payment to us.
Your financial institution may charge you a fee for ACH or wire services.
MINIMUM INVESTMENTS Each Fund accepts payments in the following minimum amounts
for Institutional Service Shares:
MINIMUM INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT
Standard Accounts $100,000 $250
ACCOUNT REQUIREMENTS
<TABLE>
<S> <C>
TYPE OF ACCOUNT REQUIREMENT
INDIVIDUAL, SOLE PROPRIETORSHIP AND JOINT ACCOUNTS o Instructions must be signed by all persons required to
Individual accounts are owned by one person, as are sole sign exactly as their names appear on the account
proprietorship accounts. Joint accounts have two or more
owners (tenants)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) o Depending on state laws, you can set up a custodial
These custodial accounts provide a way to give money to a account under the UGMA or UTMA
child and obtain tax benefits o The custodian must sign instructions in a manner
indicating custodial capacity
BUSINESS ENTITIES o Submit a Corporate/Organization Resolution form or
similar document
TRUSTS o The trust must be established before an account
can be opened
o Provide a certified trust document, or the pages
from the trust document, that identify the trustees
</TABLE>
INVESTMENT PROCEDURES
<TABLE>
<S> <C>
HOW TO OPEN AN ACCOUNT HOW TO ADD TO YOUR ACCOUNT
BY CHECK BY CHECK
o Call or write us for an account application (and o Fill out an investment slip from a confirmation or write
Corporate/Organization Resolution form, if applicable) us a letter
o Complete the application (and resolution form) o Write your account number on your check
o Mail us your application (and resolution form) and a o Mail us the slip (or your letter) and the check
check
BY WIRE BY WIRE
o Call or write us for an account application (and o Call to notify us of your incoming wire
Corporate/Organization Resolution form, if applicable) o Instruct your bank to wire your money to us
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your original application (and resolution
form)
o Instruct your financial institution to wire your
money to us
BY ACH PAYMENT
o Call or write us for an account application (and
Corporate/Organization Resolution form, if applicable)
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your original application (and resolution form)
o Instruct your financial institution to send an ACH
payment to us
</TABLE>
8
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
LIMITATIONS ON PURCHASES Each Fund reserves the right to refuse any purchase
(including exchange) request, particularly requests that could adversely affect
a Fund or its operations.
CANCELED OR FAILED PAYMENTS Each Fund accepts checks and ACH payments at full
value subject to collection. If a Fund does not receive your payment for shares
or you pay with a check or by ACH that does not clear, your purchase will be
canceled. You will be responsible for any losses or expenses incurred by a Fund,
the Transfer Agent or distributor and the Fund may redeem shares you own in the
account (or another identically registered account that you maintain with the
Transfer Agent) as reimbursement.
SELLING SHARES
Generally, a Fund will send redemption proceeds to you immediately after
receiving your redemption request in proper form.
Shares are not entitled to receive distributions declared on or after the day on
which a redemption order is accepted by the Transfer Agent.
HOW TO SELL SHARES FROM YOUR ACCOUNT
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o [Fund name] - Investor Shares
o The dollar amount or number of shares you want to sell
o How and where to send the redemption proceeds
o Obtain a signature guarantee (if required)
o Obtain other documentation (if required)
o Mail us your request and documentation
BY WIRE
o Wire redemptions are only available if your redemption is for $5,000 or
more and you did not decline wire redemption privileges on your account
application
o Call us with your request (unless you declined telephone redemption
privileges on your account application) (See "By Telephone") OR
o Mail us your request (See "By Mail")
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which the account is registered
o Additional form of identification
o Redemption proceeds will be:
o Mailed to you OR
o Wired to you (unless you declined wire redemption privileges on your
account application) (See "By Wire")
WIRE REDEMPTION PRIVILEGES You may redeem your shares by wire unless you
declined wire redemption privileges on your account application. The minimum
amount that may be redeemed by wire is $5,000. If the Transfer Agent receives
your wire redemption order after 12:00 P.M., Eastern time (or other time as may
be determined) for Daily Assets Government Fund or after 2:00 P.M., Eastern time
(or other time as may be determined) for each other Fund, the Transfer Agent
will wire proceeds to you on the next Fund business day.
TELEPHONE REDEMPTION PRIVILEGES You may redeem your shares by telephone unless
you declined telephone redemption privileges on your account application. You
may be responsible for any fraudulent telephone order as long as the Transfer
Agent takes reasonable measures to verify the order.
9
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
SIGNATURE GUARANTEE REQUIREMENTS To protect you and each Fund against fraud,
signatures on certain requests must have a "signature guarantee." A signature
guarantee verifies the authenticity of your signature. You can obtain one from
most banking institutions or securities brokers, but not from a notary public.
For requests made in writing, a signature guarantee is required for any of the
following:
o Sales of over $50,000 worth of shares
o Changes to a shareholder's record name
o Redemptions from an account for which the address or account
registration has changed within the last 30 days
o Sending redemption proceeds to any person, address, brokerage firm or
bank account not on record
o Sending redemption proceeds to an account with a different
registration (name or ownership) from yours
o Changes to systematic investment or withdrawal, distribution,
telephone redemption or exchange option or any other election in
connection with your account
SMALL ACCOUNTS If the value of your account falls below $100,000, a Fund may ask
you to increase your balance. If the account value is still below $100,000 after
60 days, a Fund may close your account and send you the proceeds.
REDEMPTIONS IN KIND Each Fund reserves the right to pay redemption proceeds in
portfolio securities rather than cash.
EXCHANGE PRIVILEGES
You may exchange your Institutional Service Shares of a Fund for Institutional
Service Shares of another Fund.
REQUIREMENTS You may exchange only between identically registered accounts
(name(s), address and taxpayer ID number). New accounts opened through an
exchange will be assigned the same shareholder privileges as the initial
account. You may exchange your shares by mail or by telephone, unless you
declined telephone redemption privileges on your account application. You may be
responsible for any fraudulent telephone order as long as the Transfer Agent
takes reasonable measures to verify the order.
HOW TO EXCHANGE
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number(s)
o The names of each fund and share class which you are exchanging
o The dollar amount or number of shares you want to sell (and exchange)
o Open a new account and complete an account application if you are
requesting different shareholder privileges
o Obtain a signature guarantee, if required
o Mail us your request and documentation
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number(s)
o Exact name(s) in which account is registered
o Additional form of identification
10
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
OTHER INFORMATION
ADDITIONAL INVESTMENT POLICIES
Each Fund and Portfolio operates in accordance with "Rule 2a-7" under the
Investment Company Act of 1940. All restrictions relating to maturity, credit
and diversification are interpreted in accordance with that rule.
A Portfolio may from time to time take temporary defensive positions in response
to adverse market, economic, political or other conditions. For instance, a
Portfolio may hold cash in any amount. Each Portfolio may invest in other money
market mutual funds that have substantially similar policies.
Securities in which a Portfolio invests may have variable or floating rates of
interest. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. Each Portfolio limits these securities to those
with an interest rate that is adjusted based solely on a single short-term rate
or index, such as the Prime Rate.
CORE AND GATEWAY(R)
Each Fund is a "gateway" fund in a "Core and Gateway" structure. Each Fund
invests substantially all of its assets in a corresponding Portfolio, each of
which is a series of Core Trust (Delaware) ("Core Trust"). A Fund may withdraw
its entire investment from a Portfolio at any time that the Board decides it is
in the Fund's best interest to do so.
The Board of Trustees of Core Trust formulates the general policies of each
Portfolio and meets periodically to review each Portfolio's performance, monitor
investment activities and practices and discuss other matters affecting each
Portfolio. Additional information about the Core Trust's board and executive
officers is in the SAI.
CLASSES OF SHARES
In addition to Institutional Service Shares, each Fund also offers Investor
Shares and Institutional Shares. Investor Shares are designed for retail
investors and Institutional Shares are designed for institutional investors. You
may obtain prospectuses describing these classes of shares by contacting the
Transfer Agent. Each class has different fees and investment minimums.
DISTRIBUTIONS
Each Fund declares distributions from its net investment income daily and pays
these distributions monthly. In addition, each Fund pays capital gain
distributions, if any, at least annually.
All distributions are reinvested in additional shares, unless you elect to
receive distributions in cash. For Federal income tax purposes, distributions
are treated the same whether they are received in cash or reinvested.
TAXES
GENERAL Each Fund intends to operate in a manner such that it will not be liable
for Federal income or excise tax.
A Fund's distribution of net income (including short-term capital gain) is
taxable to you as ordinary income. A Fund's distribution of long-term capital
gain, if any, is taxable to you as long-term capital gain regardless of how long
you have held Fund shares. Distributions may also be subject to certain state
and local taxes.
Each Fund will send you information about the income tax status of distributions
paid during the year shortly after December 31 of each year. For further
information about the tax effects of investing in a Fund, including state and
local tax matters, please see the SAI and consult your tax adviser.
DAILY ASSETS MUNICIPAL FUND It is anticipated that substantially all of the
Fund's net investment income will be "tax-exempt interest income." Generally,
you are not subject to Federal income tax on these distributions. Distributions
of other investment income and short-term capital gain are taxable to you as
ordinary income. It is anticipated that substantially all of the Fund's net
income will be exempt from Federal income tax. All distributions may be subject
to certain state and local taxes.
If you are a "substantial user" or a "related person" of a substantial user of
facilities financed by "private activity" securities held by the Fund, you may
have to pay Federal income tax on your pro-rata share of the net income
generated from these securities. Distributions of interest income on certain
private activity bonds are an item of tax preference for purposes of individual
and corporate Federal alternative minimum tax.
11
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following table is intended to help you understand the performance of
Institutional Service Shares of each Fund. Total return in the table represents
the rate an investor would have earned on an investment in a Fund's
Institutional Service Shares (assuming the reinvestment of all distributions).
This information has been audited by KPMG LLP. Each Fund's financial statements
and independent auditors' report are included in the Annual Report dated August
31, 2000, which is available upon request, without charge.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED DATA FOR A SINGLE SHARE RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------- ------------------------------------------
Net Ratios to
Beginning Distributions Distributions Ending Assets at Average Net Assets
Net Asset Net From Net From Net Net End of ------------------------------
Value Per Investment Investment Realized Asset Period Net
Share Income Income Gain Value per Total (000's Net Investment Gross
Share Return Omitted) Expenses Income Expenses(a)
DAILY ASSETS TREASURY
OBLIGATIONS FUND
Year Ended August 31, 2000 $1.00 0.05 (0.05) - $1.00 5.48% $7,374 0.45% 5.25% 0.78%
Year Ended August 31, 1999 1.00 0.04 (0.04) - 1.00 4.46% 18,369 0.45% 4.34% 0.89%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 2.19% 4,448 0.45%(c) 5.16%(c) 1.53%(c)
1998 (b)
DAILY ASSETS GOVERNMENT
FUND
Year Ended August 31, 2000 1.00 0.06 (0.06) - 1.00 5.66% 3,140 0.45% 5.44% 1.37%
Year Ended August 31, 1999 1.00 0.05 (0.05) - 1.00 4.66% 5,775 0.45% 4.57% 1.15%
Year Ended August 31, 1998 1.00 0.05 (0.05) - 1.00 5.04% 9,485 0.46% 4.93% 0.91%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 2.01% 44,116 0.50%(c) 4.76%(c) 0.95%(c)
1997 (e)
Year Ended March 31, 1997 1.00 0.05 (0.05) - 1.00 4.80% 43,975 0.50% 4.70% 0.99%
Year Ended March 31, 1996 1.00 0.05 (0.05) - 1.00 5.18% 43,103 0.50% 5.01% 1.06%
DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
Year Ended August 31, 2000 1.00 0.06 (0.06) -(d) 1.00 5.68% 57,347 0.45% 5.67% 0.70%
Year Ended August 31, 1999 1.00 0.05 (0.05) - 1.00 4.72% 22,328 0.45% 4.54% 0.80%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 2.22% 2,390 0.45%(c) 5.16%(c) 2.13%(c)
1998 (b)
DAILY ASSETS CASH FUND
Year Ended August 31, 2000 1.00 0.06 (0.06) - 1.00 5.78% 52,428 0.45% 5.61% 0.66%
Year Ended August 31, 1999 1.00 0.05 (0.05) -(d) 1.00 4.81% 58,661 0.45% 4.59% 0.70%
Year Ended August 31, 1998 1.00 0.05 (0.05) - 1.00 5.34% 5,235 0.46% 5.22% 0.90%
Period Ended August 31, 1.00 0.05 (0.05) - 1.00 4.70% 12,076 0.52%(c) 5.06%(c) 1.22%(c)
1997 (b)
DAILY ASSETS MUNICIPAL
FUND
Year Ended August 31, 2000 1.00 0.03 (0.03) - 1.00 3.45% 1,520 0.45% 3.32% 1.96%
Year Ended August 31, 1999 1.00 0.03 (0.03) - 1.00 2.77% 3,295 0.45% 2.66% 1.21%
Period Ended August 31, 1.00 - - - 1.00 0.20% 10 0.59%(c) 2.76%(c) 721.84%(c)
1998 (b)
</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) INSTITUTIONAL SERVICE SHARES OF DAILY ASSETS TREASURY OBLIGATIONS FUND,
DAILY ASSETS GOVERNMENT FUND, DAILY ASSETS GOVERNMENT OBLIGATIONS FUND,
DAILY ASSETS CASH FUND AND DAILY ASSETS MUNICIPAL FUND COMMENCED OPERATIONS
ON APRIL 1, 1998, JULY 1, 1992, MARCH 30, 1998, OCTOBER 1, 1996 AND AUGUST
6, 1998, RESPECTIVELY.
(C) ANNUALIZED.
(D) LESS THAN $0.01 PER SHARE.
(E) THE FUND CHANGED ITS FISCAL YEAR END TO AUGUST 31 DURING THIS PERIOD.
12
<PAGE>
<TABLE>
<S> <C>
FOR MORE INFORMATION FORUM
FUNDS
The following documents are available free upon request:
INSTITUTIONAL
SERVICE SHARES
ANNUAL/SEMI-ANNUAL REPORTS
Additional information about each Fund's investments
is available in the Funds' annual and semi-annual reports to shareholders. DAILY ASSETS TREASURY
OBLIGATIONS FUND
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
The SAI provides more detailed information about each Fund DAILY ASSETS GOVERNMENT FUND
and is incorporated by reference into
this Prospectus. DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
CONTACTING THE FUNDS
You can get a free copy of both reports and the SAI, DAILY ASSETS CASH FUND
request other information and discuss
your questions about each Fund DAILY ASSETS MUNICIPAL FUND
by contacting the Funds at:
Forum Shareholder Services, LLC
P.O. Box 446
Portland, Maine 04112
800-94FORUM or 800-943-6786
207-879-0001
SECURITIES AND EXCHANGE COMMISSION INFORMATION You can
also review each Fund's reports (when available)
and the SAIs at the Public Reference Room of the
Securities and Exchange Commission ("SEC").
The scheduled hours of operation of the Public Reference Room may
be obtained by calling the SEC at (202) 942-8090.
You can get copies of this information for a fee, by
e-mailing or writing to:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
E-mail address: [email protected]
[Edgarized graphic - Column Head]
Free copies of the reports and SAIs are available from the
SEC's Web site at www.sec.gov.
FORUM FUNDS
P.O. Box 446
Portland, Maine 04112
800-94FORUM or
800-943-6786
207-879-0001
Investment Company Act File No. 811-3023
</TABLE>
<PAGE>
FORUM PROSPECTUS
FUNDS INSTITUTIONAL SHARES
JANUARY 5, 2001
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND
FIVE MONEY MARKET FUNDS THAT
SEEK TO PROVIDE HIGH CURRENT
INCOME TO THE EXTENT CONSISTENT
WITH THE PRESERVATION OF CAPITAL
AND THE MAINTENANCE OF LIQUIDITY.
IN ADDITION, DAILY ASSETS
MUNICIPAL FUND SEEKS TO PROVIDE
HIGH CURRENT INCOME THAT IS EXEMPT
FROM FEDERAL INCOME TAX.
THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE FUNDS'
SHARES OR DETERMINED WHETHER THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
[Edgarization of graphic representation of a globe, atlas, and calendar]
<PAGE>
FORUM FUNDS
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TABLE OF CONTENTS
SUMMARY 2
PERFORMANCE 4
FEE TABLES 5
MANAGEMENT 6
YOUR ACCOUNT 7
How To Contact the Funds 7
General Information 7
Buying Shares 8
Selling Shares 9
Exchange Privileges 10
OTHER INFORMATION 11
FINANCIAL HIGHLIGHTS 12
<PAGE>
FORUM FUNDS
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SUMMARY
<TABLE>
<S> <C>
CONCEPTS TO This Prospectus offers Institutional Shares of five money market funds - Daily Assets Treasury
UNDERSTAND Obligations Fund, Daily Assets Government Fund, Daily Assets Government Obligations Fund, Daily
Assets Cash Fund and Daily Assets Municipal Fund (each a "Fund"). Institutional Shares are designed
MONEY MARKET SECURITY means for institutional investors.
a high credit quality,
short-term, U.S. dollar INVESTMENT OBJECTIVES
denominated debt security.
The investment objective of each Fund, except Daily Assets Municipal Fund, is to provide high
TREASURY SECURITY current income to the extent consistent with the preservation of capital and the maintenance of
means a security that is liquidity. The investment objective of Daily Assets Municipal Fund is to provide high current
issued or guaranteed by income that is exempt from Federal income taxes to the extent consistent with the preservation of
the U.S. Treasury. capital and the maintenance of liquidity.
GOVERNMENT SECURITY means a PRINCIPAL INVESTMENT STRATEGIES
security that is issued or
guaranteed by the U.S. Each Fund invests in a diversified portfolio of Money Market Securities and:
Government, its agencies or o seeks to maintain a stable net asset value of $1.00 per share
instrumentalities. o invests in securities with remaining maturities of 397 days or less
o maintains a dollar weighted average maturity of its investments of 90 days or less
REPURCHASE AGREEMENT means
a transaction in which Each Fund invests substantially all of its assets in another mutual fund (each a "Portfolio,"
securities are purchased and collectively, the "Portfolios"), which has the same investment objective and substantially
and simultaneously similar investment policies. Each Portfolio in which a Fund invests and its primary
committed to be resold to investments are:
another party at an
agreed-upon date and at a FUND/PORTFOLIO PRIMARY INVESTMENTS
price reflecting a market Daily Assets Treasury Obligations Treasury Securities and Repurchase Agreements backed
rate of interest. Fund/Treasury Cash Portfolio by Treasury Securities
MUNICIPAL SECURITY means Daily Assets Government Government Securities that generally are exempt from
a security the interest Fund/Government Portfolio state and local income taxes
on which is exempt from
Federal income tax. Daily Assets Government Government Securities and Repurchase Agreements
Obligations Fund/Government Cash backed by Government Securities
Portfolio
Daily Assets Cash Fund/Cash A broad spectrum of Money Market Securities including:
Portfolio o securities issued by financial institutions, such as
certificates of deposits, bankers' acceptances and
time deposits
o securities issued by domestic companies, such as
commercial paper
o Government Securities
o Repurchase Agreements
Daily Assets Municipal Municipal Securities
Fund/Municipal Cash Portfolio
The investment adviser for each Portfolio (the "Adviser") continuously monitors economic
factors such as interest rate outlooks and technical factors such as prevailing interest rates and
Federal Reserve policy to determine an appropriate maturity profile for the Portfolio's
investments. The Adviser searches for securities that satisfy the maturity profile of a Portfolio
and that provide the greatest potential return relative to the risk of the security.
</TABLE>
2
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
Daily Assets Municipal Fund has substantial exposure to Municipal Securities
that are supported by various types of third-party credit and liquidity
enhancements. These investments are often comprised of long-term Municipal
Securities structured to allow the owner the option to sell the security back to
the issuer at par or a modest premium. Many of these investments have interest
rates that are reset periodically. The Adviser reviews and considers these
factors in its investment decisions and will only purchase a Municipal Security
if it believes that third-party credit and liquidity supporters possess minimal
credit risk. Up to 20% of the Fund's total assets may be invested in securities
the interest from which is not exempt from Federal income tax.
The Adviser may sell a Money Market Security if:
o Revised economic forecasts or interest rate outlook requires a
repositioning of a Portfolio
o The security subsequently fails to meet the Adviser's investment
criteria
o Funds are needed for another purpose
PRINCIPAL RISKS OF INVESTING IN A FUND
An investment in a Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although each Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in a Fund. There is
no assurance that any Fund will achieve its investment objective. An investment
in a Fund is not by itself a complete or balanced investment program.
The principal risks of investing in a Fund are:
INTEREST RATE RISK Interest rates affect the value of a Portfolio's investments.
Increases in interest rates may cause a decline in the value of a Portfolio's
investments. In addition, those increases may cause the Fund's investment
performance to underperform currently available investments.
CREDIT RISK The value of a security held by a Portfolio may decline if the
security's credit rating is downgraded or the security's credit quality
otherwise falls. In the worst case, an issuer of a security or a repurchase
agreement counterparty may default or otherwise be unable to make timely
payments of interest or principal. Not all Government Securities are supported
by the full faith and credit of the U.S. Government.
MANAGEMENT RISK As with all mutual funds, the Adviser may make poor investment
decisions.
LOCAL ECONOMIC/POLITICAL RISK Changes in state or regional economies or politics
can adversely affect the value of the Municipal Securities issued in that
location. Up to 35% of Daily Assets Municipal Fund's assets may be exposed to
Municipal Securities whose issuers are located in one state or territory.
The above risks can result in a decrease in the value of a security or all the
securities owned by a Portfolio and, therefore, cause a change in the Fund's
$1.00 per share value. These risks also can result in lower investment
performance of a Fund.
3
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
PERFORMANCE
The following charts and tables provide some indication of the risks of
investing in a Fund's Institutional Service Shares by showing changes in
performance and investment returns from year to year. PERFORMANCE INFORMATION
PRESENTED HERE REPRESENTS ONLY PAST PERFORMANCE AND DOES NOT NECESSARILY
INDICATE FUTURE RESULTS.
The following charts show the annual total return for each full calendar year
that the Funds' Institutional Service Shares have operated.
YEAR ENDED 12/31
DAILY ASSETS TREASURY OBLIGATIONS FUND
Best Quarter: 1.53% (quarter ended 9/30/00)
Worst Quarter 1.02% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 4.50%
2000 5.92%
DAILY ASSETS GOVERNMENT FUND
Best Quarter: 1.54% (quarter ended 9/30/00)
Worst Quarter 0.69% (quarter ended 6/30/93)
[EDGAR Representation of bar chart]
1993 2.83%
1994 3.80%
1995 5.36%
1996 4.82%
1997 4.87%
1998 4.97%
1999 4.81%
2000 6.03%
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
Best Quarter: 1.57% (quarter ended 9/30/00)
Worst Quarter 1.11% (quarter ended 6/30/99)
[EDGAR Representation of bar chart]
1999 4.78%
2000 6.09%
DAILY ASSETS CASH FUND
Best Quarter: 1.58% (quarter ended 9/30/00)
Worst Quarter 1.12% (quarter ended 6/30/99)
[EDGAR Representation of bar chart]
1997 5.23%
1998 5.26%
1999 4.89%
2000 6.15%
DAILY ASSETS MUNICIPAL FUND
Best Quarter: 0.99% (quarter ended 6/30/00)
Worst Quarter 0.62% (quarter ended 3/31/99)
[EDGAR Representation of bar chart]
1999 2.84%
2000 3.70%
The following table lists the Institutional Service Shares' average annual total
return as of December 31, 2000.
<TABLE>
<S> <C> <C> <C> <C>
1 YEAR 5 YEAR SINCE INCEPTION INCEPTION DATE
DAILY ASSETS TREASURY OBLIGATIONS FUND 5.92% N/A 5.15% 4/1/98
DAILY ASSETS GOVERNMENT FUND 6.03% 5.27% 4.60% 7/1/92
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND 6.09% N/A 5.36% 3/30/98
DAILY ASSETS CASH FUND 6.15% 5.44 5.37% 10/1/96
DAILY ASSETS MUNICIPAL FUND 3.70% N/A 3.21% 8/6/98
</TABLE>
4
<PAGE>
FORUM FUNDS
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FEE TABLES
The following tables describe the various fees and expenses that you will pay if
you invest in Institutional Service Shares of a Fund. There are no charges to
purchase or redeem Fund shares.
<TABLE>
<S> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
-------------------------------------------------
DAILY ASSETS DAILY DAILY ASSETS DAILY DAILY
TREASURY ASSETS GOVERNMENT ASSETS ASSETS
OBLIGATIONS GOVERNMENT OBLIGATIONS CASH MUNICIPAL FUND
FUND FUND FUND FUND
-------------------------------------------------
Management Fees (1) 0.13% 0.15% 0.13% 0.13% 0.15%
-------------------------------------------------
Distribution (Rule 12b-1) Fees None None None None None
-------------------------------------------------
Other Expenses 0.65% 1.22% 0.57% 0.52% 1.81%
-------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES (2) 0.78% 1.37% 0.70% 0.65% 1.96%
-------------------------------------------------
Fee Waivers and Expense Reimbursements (3) 0.33% 0.92% 0.25% 0.20% 1.51%
-------------------------------------------------
NET EXPENSES 0.45% 0.45% 0.45% 0.45% 0.45%
-------------------------------------------------
</TABLE>
(1) INCLUDES ALL INVESTMENT ADVISORY AND ADMINISTRATION FEES.
(2) BASEDON AMOUNTS INCURRED DURING EACH FUND'S LAST FISCAL YEAR ENDED AUGUST
31, 2000 STATED AS A PERCENTAGE OF AVERAGE NET ASSETS PRIOR TO FEE WAIVERS
AND EXPENSE REIMBURSEMENTS. EACH FUND'S EXPENSES INCLUDE ITS PRO-RATA SHARE
OF THE EXPENSES OF ITS CORRESPONDING PORTFOLIO.
(3) BASED ON CERTAIN CONTRACTUAL FEE WAIVERS AND EXPENSE REIMBURSEMENTS
CURRENTLY IN EFFECT THAT MAY DECREASE AFTER DECEMBER 31, 2001.
EXAMPLE
The following is a hypothetical example intended to help you compare the cost of
investing in Institutional Service Shares of a Fund to the cost of investing in
other mutual funds. The example assumes that you invest $10,000 in a Fund's
Institutional Service Shares for the time periods indicated and then redeem all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% annual return, that the Net Expenses (through December 31,
2001) and Total Annual Fund Operating Expenses (thereafter) remain as stated in
the above table and that distributions are reinvested. Although your actual
costs may be higher or lower, under these assumptions your costs would be:
<TABLE>
<S> <C> <C> <C> <C> <C>
DAILY ASSETS DAILY ASSETS DAILY ASSETS DAILY ASSETS DAILY ASSETS
TREASURY GOVERNMENT GOVERNMENT CASH MUNICIPAL
OBLIGATIONS FUND FUND OBLIGATIONS FUND FUND FUND
1 year $46 $46 $46 $46 $46
3 years $226 $353 $209 $200 $478
5 years $411 $672 $375 $357 $926
10 years $945 $1,575 $856 $812 $2,171
</TABLE>
5
<PAGE>
FORUM FUNDS
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MANAGEMENT
Each Fund is a series of Forum Funds (the "Trust"), an open-end, management
investment company. The business of the Trust and of each Fund is managed under
the direction of the Board of Trustees (the "Board"). The Board formulates the
general policies of each Fund and meets periodically to review each Fund's
performance, monitor investment activities and practices and discuss other
matters affecting each Fund. Additional information about the Board and the
Trust's executive officers is in the Statement of Additional Information
("SAI").
THE ADVISER
Each Portfolio's investment adviser is Forum Investment Advisors, LLC, Two
Portland Square, Portland, Maine 04101. The Adviser is a privately owned company
controlled by John Y. Keffer. The Adviser makes investment decisions for each
Portfolio. In addition to the Portfolios, the Adviser advises two taxable and
three tax-free bond funds.
During the Funds' last fiscal year, the aggregate advisory fees paid to the
Adviser from each Portfolio, as a percentage of average net assets, were:
<TABLE>
<S> <C> <C> <C> <C> <C>
PORTFOLIO TREASURY CASH GOVERNMENT GOVERNMENT CASH CASH MUNICIPAL CASH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------------------------------------------------
ADVISORY FEE 0.03% 0.05% 0.03% 0.03% 0.05%
</TABLE>
Each Fund pays its pro-rata share of its corresponding Portfolio's advisory fee,
which is based on the percentage of the Portfolio's net assets held by the Fund.
OTHER SERVICE PROVIDERS
The Forum Financial Group ("Forum") of companies provides various services to
each Fund. As of October 31, 2000, Forum provided administration and
distribution services to investment companies and collective investment funds
with assets of approximately $123 billion.
Forum Fund Services, LLC, a registered broker-dealer and member of the National
Association of Securities Dealers, Inc., is the distributor (principal
underwriter) of each Fund's shares. The distributor acts as the representative
of the Trust in connection with the offering of each Fund's shares. The
distributor may enter into arrangements with banks, broker-dealers or other
financial institutions through which investors may purchase or redeem shares and
may, at its own expense, compensate persons who provide services in connection
with the sale or expected sale of each Fund's shares.
Forum Administrative Services, LLC ("FAdS") provides administrative services to
each Fund, Forum Accounting Services, LLC is each Fund's fund accountant and
Forum Shareholder Services, LLC (the "Transfer Agent") is each Fund's transfer
agent. The Trust has adopted a shareholder servicing plan under which the Trust
pays FAdS a fee for providing shareholder services that are not otherwise
provided by the Transfer Agent. FAdS may pay this fee to various financial
institutions that provide shareholder servicing to their customers invested in
Institutional Service Shares.
FUND EXPENSES
Each Fund pays for its own expenses and bears its pro-rata share of expenses of
the Portfolio in which the Fund invests. Expenses of Institutional Service
Shares include the shares' own expenses as well as Trust expenses that are
allocated among each Fund, their classes of shares and the other funds of the
Trust. The Adviser and other service providers may waive all or any portion of
their fees and reimburse certain expenses of a Fund. Any fee waiver or expense
reimbursement increases investment performance of a Fund and its applicable
share classes for the period during which the waiver or reimbursement is in
effect.
Certain service providers of each Fund have undertaken through December 31, 2001
to waive a portion of their fees and reimburse expenses in order to limit total
operating expenses (excluding taxes, interest, portfolio transaction expenses
and extraordinary expenses) of Institutional Service Shares of each Fund to no
more than 0.45% of the average daily net assets.
6
<PAGE>
FORUM FUNDS
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YOUR ACCOUNT
HOW TO CONTACT THE FUNDS
<TABLE>
<S> <C>
WRITE TO US AT: ACH OR WIRE INVESTMENTS TO:
Forum Shareholder Services, LLC Bankers Trust Company
Attn: (Fund Name - Investor Shares) New York, New York
P.O. Box 446 ABA #021001033
Portland, Maine 04112 FOR CREDIT TO:
Forum Shareholder Services, LLC
TELEPHONE US AT: Account # 01-465-547
(800) 94FORUM or Re: (Fund Name) - Institutional Service Shares
(800) 943-6786 (Toll Free) (Your Name)
(207) 879-0001 (Your Account Number)
</TABLE>
GENERAL INFORMATION
You may purchase or sell (redeem) shares at the net asset value of a share
("NAV") next calculated after the Transfer Agent receives your request in proper
form accompanied by funds on deposit at a Federal Reserve Bank ("Federal
Funds"). Investments are not accepted or invested by a Fund during the period
before the receipt of Federal Funds.
Shares become entitled to receive distributions on the day of purchase if the
order and payment are received in proper form by the Transfer Agent as follows:
<TABLE>
<S> <C> <C>
ORDER MUST BE PAYMENT MUST BE
RECEIVED BY RECEIVED BY
DAILY ASSETS GOVERNMENT FUND 12:00 P.M., Eastern time 4:00 P.M., Eastern time
.............................................................................................................
DAILY ASSETS TREASURY OBLIGATIONS FUND
DAILY ASSETS GOVERNMENT OBLIGATIONS FUND
DAILY ASSETS CASH FUND
DAILY ASSETS MUNICIPAL FUND 2:00 P.M., Eastern time 4:00 P.M., Eastern time
</TABLE>
On days that the Bond Market Association recommends an early close of the
government securities market or that those markets or the Federal Reserve Bank
of San Francisco closes early, the Trust may advance the time by which the
Transfer Agent must receive completed purchase and redemption orders.
If you purchase shares directly from a Fund, you will receive monthly statements
and a confirmation of each transaction. You should verify the accuracy of all
transactions in your account as soon as you receive your confirmations.
Each Fund reserves the right to waive minimum investment amounts and may
temporarily suspend (during unusual market conditions) or discontinue any
service or privilege.
WHEN AND HOW NAV IS DETERMINED Each Fund calculates its NAV at 4:00 P.M.,
Eastern time on each weekday except Federal holidays and other days that the
Federal Reserve Bank of San Francisco is closed. The time at which the NAV is
calculated may change in case of an emergency. In order to maintain a stable NAV
of $1.00 per share, each Fund (and the Portfolios in which they invest) values
the securities in its portfolio on an amortized cost basis.
TRANSACTIONS THROUGH THIRD PARTIES If you invest through a broker or other
financial institution, the policies and fees charged by that institution may be
different than those of a Fund. Financial institutions may charge transaction
fees and may set different minimum investments or limitations on buying or
selling shares. These institutions also may provide you with certain shareholder
services such as periodic account statements and trade confirmations. Consult a
representative of your financial institution for more information.
BUYING SHARES
HOW TO MAKE PAYMENTS All investments must be in U.S. dollars and checks must be
drawn on U.S. banks.
CHECKS For individual, sole proprietorship, joint, Uniform Gift to
Minors Act ("UGMA") or Uniform Transfers to Minors Act ("UTMA")
accounts, make checks payable to "Forum Funds" or to one or more owners
of the account and endorsed to "Forum Funds." For all other accounts,
the check must be made payable on its face to "Forum Funds." No other
method of check payment is acceptable (for instance, you may not pay by
traveler's check).
AUTOMATED CLEARING HOUSE ("ACH") Instruct your financial institution to
transfer funds through the "Automated Clearing House" system.
7
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
WIRES Instruct your financial institution to make a Federal Funds wire
payment to us.
Your financial institution may charge you a fee for ACH or wire services.
MINIMUM INVESTMENTS Each Fund accepts payments in the following minimum amounts
for Institutional Service Shares:
MINIMUM INITIAL INVESTMENT MINIMUM ADDITIONAL INVESTMENT
Standard Accounts $100,000 $250
ACCOUNT REQUIREMENTS
<TABLE>
<S> <C>
TYPE OF ACCOUNT REQUIREMENT
INDIVIDUAL, SOLE PROPRIETORSHIP AND JOINT ACCOUNTS o Instructions must be signed by all persons required to
Individual accounts are owned by one person, as are sole sign exactly as their names appear on the account
proprietorship accounts. Joint accounts have two or more
owners (tenants)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) o Depending on state laws, you can set up a custodial
These custodial accounts provide a way to give money to a account under the UGMA or UTMA
child and obtain tax benefits o The custodian must sign instructions in a manner
indicating custodial capacity
BUSINESS ENTITIES o Submit a Corporate/Organization Resolution form or
similar document
TRUSTS o The trust must be established before an account
can be opened
o Provide a certified trust document, or the pages
from the trust document, that identify the trustees
</TABLE>
INVESTMENT PROCEDURES
<TABLE>
<S> <C>
HOW TO OPEN AN ACCOUNT HOW TO ADD TO YOUR ACCOUNT
BY CHECK BY CHECK
o Call or write us for an account application (and o Fill out an investment slip from a confirmation or write
Corporate/Organization Resolution form, if applicable) us a letter
o Complete the application (and resolution form) o Write your account number on your check
o Mail us your application (and resolution form) and a o Mail us the slip (or your letter) and the check
check
BY WIRE BY WIRE
o Call or write us for an account application (and o Call to notify us of your incoming wire
Corporate/Organization Resolution form, if applicable) o Instruct your bank to wire your money to us
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your original application (and resolution
form)
o Instruct your financial institution to wire your
money to us
BY ACH PAYMENT
o Call or write us for an account application (and
Corporate/Organization Resolution form, if applicable)
o Complete the application (and resolution form)
o Call us to fax the completed application (and resolution
form) and we will assign you an account number
o Mail us your original application (and resolution form)
o Instruct your financial institution to send an ACH
payment to us
</TABLE>
8
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
LIMITATIONS ON PURCHASES Each Fund reserves the right to refuse any purchase
(including exchange) request, particularly requests that could adversely affect
a Fund or its operations.
CANCELED OR FAILED PAYMENTS Each Fund accepts checks and ACH payments at full
value subject to collection. If a Fund does not receive your payment for shares
or you pay with a check or by ACH that does not clear, your purchase will be
canceled. You will be responsible for any losses or expenses incurred by a Fund,
the Transfer Agent or distributor and the Fund may redeem shares you own in the
account (or another identically registered account that you maintain with the
Transfer Agent) as reimbursement.
SELLING SHARES
Generally, a Fund will send redemption proceeds to you immediately after
receiving your redemption request in proper form.
Shares are not entitled to receive distributions declared on or after the day on
which a redemption order is accepted by the Transfer Agent.
HOW TO SELL SHARES FROM YOUR ACCOUNT
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number
o [Fund name] - Investor Shares
o The dollar amount or number of shares you want to sell
o How and where to send the redemption proceeds
o Obtain a signature guarantee (if required)
o Obtain other documentation (if required)
o Mail us your request and documentation
BY WIRE
o Wire redemptions are only available if your redemption is for $5,000 or
more and you did not decline wire redemption privileges on your account
application
o Call us with your request (unless you declined telephone redemption
privileges on your account application) (See "By Telephone") OR
o Mail us your request (See "By Mail")
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number
o Exact name(s) in which the account is registered
o Additional form of identification
o Redemption proceeds will be:
o Mailed to you OR
o Wired to you (unless you declined wire redemption privileges on your
account application) (See "By Wire")
WIRE REDEMPTION PRIVILEGES You may redeem your shares by wire unless you
declined wire redemption privileges on your account application. The minimum
amount that may be redeemed by wire is $5,000. If the Transfer Agent receives
your wire redemption order after 12:00 P.M., Eastern time (or other time as may
be determined) for Daily Assets Government Fund or after 2:00 P.M., Eastern time
(or other time as may be determined) for each other Fund, the Transfer Agent
will wire proceeds to you on the next Fund business day.
TELEPHONE REDEMPTION PRIVILEGES You may redeem your shares by telephone unless
you declined telephone redemption privileges on your account application. You
may be responsible for any fraudulent telephone order as long as the Transfer
Agent takes reasonable measures to verify the order.
9
<PAGE>
FORUM FUNDS
--------------------------------------------------------------------------------
SIGNATURE GUARANTEE REQUIREMENTS To protect you and each Fund against fraud,
signatures on certain requests must have a "signature guarantee." A signature
guarantee verifies the authenticity of your signature. You can obtain one from
most banking institutions or securities brokers, but not from a notary public.
For requests made in writing, a signature guarantee is required for any of the
following:
o Sales of over $50,000 worth of shares
o Changes to a shareholder's record name
o Redemptions from an account for which the address or account
registration has changed within the last 30 days
o Sending redemption proceeds to any person, address, brokerage firm or
bank account not on record
o Sending redemption proceeds to an account with a different
registration (name or ownership) from yours
o Changes to systematic investment or withdrawal, distribution,
telephone redemption or exchange option or any other election in
connection with your account
SMALL ACCOUNTS If the value of your account falls below $100,000, a Fund may ask
you to increase your balance. If the account value is still below $100,000 after
60 days, a Fund may close your account and send you the proceeds.
REDEMPTIONS IN KIND Each Fund reserves the right to pay redemption proceeds in
portfolio securities rather than cash.
EXCHANGE PRIVILEGES
You may exchange your Institutional Service Shares of a Fund for Institutional
Service Shares of another Fund.
REQUIREMENTS You may exchange only between identically registered accounts
(name(s), address and taxpayer ID number). New accounts opened through an
exchange will be assigned the same shareholder privileges as the initial
account. You may exchange your shares by mail or by telephone, unless you
declined telephone redemption privileges on your account application. You may be
responsible for any fraudulent telephone order as long as the Transfer Agent
takes reasonable measures to verify the order.
HOW TO EXCHANGE
BY MAIL
o Prepare a written request including:
o Your name(s) and signature(s)
o Your account number(s)
o The names of each fund and share class which you are exchanging
o The dollar amount or number of shares you want to sell (and exchange)
o Open a new account and complete an account application if you are
requesting different shareholder privileges
o Obtain a signature guarantee, if required
o Mail us your request and documentation
BY TELEPHONE
o Call us with your request (unless you declined telephone redemption
privileges on your account application)
o Provide the following information:
o Your account number(s)
o Exact name(s) in which account is registered
o Additional form of identification
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FORUM FUNDS
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OTHER INFORMATION
ADDITIONAL INVESTMENT POLICIES
Each Fund and Portfolio operates in accordance with "Rule 2a-7" under the
Investment Company Act of 1940. All restrictions relating to maturity, credit
and diversification are interpreted in accordance with that rule.
A Portfolio may from time to time take temporary defensive positions in response
to adverse market, economic, political or other conditions. For instance, a
Portfolio may hold cash in any amount. Each Portfolio may invest in other money
market mutual funds that have substantially similar policies.
Securities in which a Portfolio invests may have variable or floating rates of
interest. These securities pay interest at rates that are adjusted periodically
according to a specified formula, usually with reference to some interest rate
index or market interest rate. Each Portfolio limits these securities to those
with an interest rate that is adjusted based solely on a single short-term rate
or index, such as the Prime Rate.
CORE AND GATEWAY(R)
Each Fund is a "gateway" fund in a "Core and Gateway" structure. Each Fund
invests substantially all of its assets in a corresponding Portfolio, each of
which is a series of Core Trust (Delaware) ("Core Trust"). A Fund may withdraw
its entire investment from a Portfolio at any time that the Board decides it is
in the Fund's best interest to do so.
The Board of Trustees of Core Trust formulates the general policies of each
Portfolio and meets periodically to review each Portfolio's performance, monitor
investment activities and practices and discuss other matters affecting each
Portfolio. Additional information about the Core Trust's board and executive
officers is in the SAI.
CLASSES OF SHARES
In addition to Institutional Service Shares, each Fund also offers Investor
Shares and Institutional Shares. Investor Shares are designed for retail
investors and Institutional Shares are designed for institutional investors. You
may obtain prospectuses describing these classes of shares by contacting the
Transfer Agent. Each class has different fees and investment minimums.
DISTRIBUTIONS
Each Fund declares distributions from its net investment income daily and pays
these distributions monthly. In addition, each Fund pays capital gain
distributions, if any, at least annually.
All distributions are reinvested in additional shares, unless you elect to
receive distributions in cash. For Federal income tax purposes, distributions
are treated the same whether they are received in cash or reinvested.
TAXES
GENERAL Each Fund intends to operate in a manner such that it will not be liable
for Federal income or excise tax.
A Fund's distribution of net income (including short-term capital gain) is
taxable to you as ordinary income. A Fund's distribution of long-term capital
gain, if any, is taxable to you as long-term capital gain regardless of how long
you have held Fund shares. Distributions may also be subject to certain state
and local taxes.
Each Fund will send you information about the income tax status of distributions
paid during the year shortly after December 31 of each year. For further
information about the tax effects of investing in a Fund, including state and
local tax matters, please see the SAI and consult your tax adviser.
DAILY ASSETS MUNICIPAL FUND It is anticipated that substantially all of the
Fund's net investment income will be "tax-exempt interest income." Generally,
you are not subject to Federal income tax on these distributions. Distributions
of other investment income and short-term capital gain are taxable to you as
ordinary income. It is anticipated that substantially all of the Fund's net
income will be exempt from Federal income tax. All distributions may be subject
to certain state and local taxes.
If you are a "substantial user" or a "related person" of a substantial user of
facilities financed by "private activity" securities held by the Fund, you may
have to pay Federal income tax on your pro-rata share of the net income
generated from these securities. Distributions of interest income on certain
private activity bonds are an item of tax preference for purposes of individual
and corporate Federal alternative minimum tax.
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FORUM FUNDS
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FINANCIAL HIGHLIGHTS
The following table is intended to help you understand the performance of
Institutional Service Shares of each Fund. Total return in the table represents
the rate an investor would have earned on an investment in a Fund's
Institutional Service Shares (assuming the reinvestment of all distributions).
This information has been audited by KPMG LLP. Each Fund's financial statements
and independent auditors' report are included in the Annual Report dated August
31, 2000, which is available upon request, without charge.
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SELECTED DATA FOR A SINGLE SHARE RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------- -----------------------------------------
Net Ratios to
Beginning Distributions Distributions Ending Assets at Average Net Assets
Net Asset Net From Net From Net Net End of ------------------------------
Value Per Investment Investment Realized Asset Period Net
Share Income Income Gain Value per Total (000's Net Investment Gross
Share Return Omitted) Expenses Income Expenses(a)
DAILY ASSETS TREASURY
OBLIGATIONS FUND
Year Ended August 31, 2000 $1.00 0.05 (0.05) - $1.00 5.48% $7,374 0.45% 5.25% 0.78%
Year Ended August 31, 1999 1.00 0.04 (0.04) - 1.00 4.46% 18,369 0.45% 4.34% 0.89%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 2.19% 4,448 0.45%(c) 5.16%(c) 1.53%(c)
1998 (b)
DAILY ASSETS GOVERNMENT
FUND
Year Ended August 31, 2000 1.00 0.06 (0.06) - 1.00 5.66% 3,140 0.45% 5.44% 1.37%
Year Ended August 31, 1999 1.00 0.05 (0.05) - 1.00 4.66% 5,775 0.45% 4.57% 1.15%
Year Ended August 31, 1998 1.00 0.05 (0.05) - 1.00 5.04% 9,485 0.46% 4.93% 0.91%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 2.01% 44,116 0.50%(c) 4.76%(c) 0.95%(c)
1997 (e)
Year Ended March 31, 1997 1.00 0.05 (0.05) - 1.00 4.80% 43,975 0.50% 4.70% 0.99%
Year Ended March 31, 1996 1.00 0.05 (0.05) - 1.00 5.18% 43,103 0.50% 5.01% 1.06%
DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
Year Ended August 31, 2000 1.00 0.06 (0.06) -(d) 1.00 5.68% 57,347 0.45% 5.67% 0.70%
Year Ended August 31, 1999 1.00 0.05 (0.05) - 1.00 4.72% 22,328 0.45% 4.54% 0.80%
Period Ended August 31, 1.00 0.02 (0.02) - 1.00 2.22% 2,390 0.45%(c) 5.16%(c) 2.13%(c)
1998 (b)
DAILY ASSETS CASH FUND
Year Ended August 31, 2000 1.00 0.06 (0.06) - 1.00 5.78% 52,428 0.45% 5.61% 0.66%
Year Ended August 31, 1999 1.00 0.05 (0.05) -(d) 1.00 4.81% 58,661 0.45% 4.59% 0.70%
Year Ended August 31, 1998 1.00 0.05 (0.05) - 1.00 5.34% 5,235 0.46% 5.22% 0.90%
Period Ended August 31, 1.00 0.05 (0.05) - 1.00 4.70% 12,076 0.52%(c) 5.06%(c) 1.22%(c)
1997 (b)
DAILY ASSETS MUNICIPAL
FUND
Year Ended August 31, 2000 1.00 0.03 (0.03) - 1.00 3.45% 1,520 0.45% 3.32% 1.96%
Year Ended August 31, 1999 1.00 0.03 (0.03) - 1.00 2.77% 3,295 0.45% 2.66% 1.21%
Period Ended August 31, 1.00 - - - 1.00 0.20% 10 0.59%(c) 2.76%(c) 721.84%(c)
1998 (b)
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(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) INSTITUTIONAL SERVICE SHARES OF DAILY ASSETS TREASURY OBLIGATIONS FUND,
DAILY ASSETS GOVERNMENT FUND, DAILY ASSETS GOVERNMENT OBLIGATIONS FUND,
DAILY ASSETS CASH FUND AND DAILY ASSETS MUNICIPAL FUND COMMENCED OPERATIONS
ON APRIL 1, 1998, JULY 1, 1992, MARCH 30, 1998, OCTOBER 1, 1996 AND AUGUST
6, 1998, RESPECTIVELY.
(C) ANNUALIZED.
(D) LESS THAN $0.01 PER SHARE.
(E) THE FUND CHANGED ITS FISCAL YEAR END TO AUGUST 31 DURING THIS PERIOD.
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FOR MORE INFORMATION FORUM
FUNDS
The following documents are available free upon request:
INSTITUTIONAL
SERVICE SHARES
ANNUAL/SEMI-ANNUAL REPORTS
Additional information about each Fund's investments
is available in the Funds' annual and semi-annual reports to shareholders. DAILY ASSETS TREASURY
OBLIGATIONS FUND
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
The SAI provides more detailed information about each Fund DAILY ASSETS GOVERNMENT FUND
and is incorporated by reference into
this Prospectus. DAILY ASSETS GOVERNMENT
OBLIGATIONS FUND
CONTACTING THE FUNDS
You can get a free copy of both reports and the SAI, DAILY ASSETS CASH FUND
request other information and discuss
your questions about each Fund DAILY ASSETS MUNICIPAL FUND
by contacting the Funds at:
Forum Shareholder Services, LLC
P.O. Box 446
Portland, Maine 04112
800-94FORUM or 800-943-6786
207-879-0001
SECURITIES AND EXCHANGE COMMISSION INFORMATION You can
also review each Fund's reports (when available)
and the SAIs at the Public Reference Room of the
Securities and Exchange Commission ("SEC").
The scheduled hours of operation of the Public Reference Room may
be obtained by calling the SEC at (202) 942-8090.
You can get copies of this information for a fee, by
e-mailing or writing to:
Public Reference Room
Securities and Exchange Commission
Washington, D.C. 20549-0102
E-mail address: [email protected]
[Edgarized graphic - Column Head]
Free copies of the reports and SAIs are available from the
SEC's Web site at www.sec.gov.
FORUM FUNDS
P.O. Box 446
Portland, Maine 04112
800-94FORUM or
800-943-6786
207-879-0001
Investment Company Act File No. 811-3023
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