<PAGE>
MONARCH FUNDS
- --------------------------------------------------
Treasury Cash Fund
Government Cash Fund
Cash Fund
ANNUAL REPORT
August 31, 1996
- --------------------------------------------------------------------------------
Dear Shareholders:
Monarch Funds ended its 1996 fiscal year with assets in excess of $700
million. During the year we maintained a constant $1.00 share price, strong
yields and responsible investment management. We are proud of the Funds'
consistent performance as we approach our 4th anniversary.
In the spring of this year, the economy began to gain momentum, resulting in
an increase in GDP of 4.8% for the second quarter. Market expectations were that
the Federal Reserve Bank would tighten interest rates sometime over the summer
because of this fast economic growth. However, the Federal Reserve felt that
economic growth would slow in the third and fourth quarters of this year.
Subsequently there were no signs of increasing inflation, and they chose not to
tighten interest rates. Our portfolio manager approached this market environment
by keeping a relatively short average life in order to protect shareholders in
the event of a Federal Reserve tightening. Conversely, maturities were extended
when no Federal Reserve action appeared imminent.
Our oldest and largest Fund continued to be our performance leader. For the
twelve months ended August 31, 1996, GOVERNMENT CASH FUND/UNIVERSAL SHARES was
ranked #2 OF 136 funds in total return according to the September issue of Money
Market Insight-Registered Trademark-, a service of IBC Financial Data, Inc., as
listed in its Money Fund Report Averages-TM---Institutional Only, Government
Only category. However, past performance is no guarantee of future results.
The management of Monarch Funds and I remain committed to serving your
financial needs and objectives. We wish to thank you for your continued
confidence and support.
Sincerely,
[SIG]
John Y. Keffer
Chairman
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF MONARCH FUNDS
<S> <C>
Independent Auditors' Report........... 2
Statements of Assets and Liabilities... 3
Statements of Operations............... 4
Statements of Changes in Net Assets.... 5
Notes to Financial Statements.......... 6
Financial Highlights................... 9
FINANCIAL STATEMENTS OF CORE TRUST
(DELAWARE)
Independent Auditors' Report........... 10
Schedules of Investments............... 11
Statements of Assets and Liabilities... 15
Statements of Operations............... 16
Statements of Changes in Net Assets.... 16
Notes to Financial Statements.......... 17
</TABLE>
- --------------------------------------------------------------------------------
THERE CAN BE NO ASSURANCE THAT ANY FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
FUND SHARES ARE NOT OBLIGATIONS, DEPOSITS OR ACCOUNTS OF, OR ENDORSED OR
GUARANTEED BY, ANY BANK OR ANY AFFILIATE OF A BANK AND ARE NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FDIC, THE FEDERAL RESERVE SYSTEM OR ANY
OTHER FEDERAL AGENCY.
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION ONLY TO CURRENT SHAREHOLD-
ERS AND TO OTHERS WHO HAVE RECEIVED A COPY OF A MONARCH FUNDS PROSPECTUS.
<PAGE>
MONARCH FUNDS
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
Monarch Funds
We have audited the accompanying statements of assets and liabilities of
Treasury Cash Fund, Government Cash Fund, and Cash Fund, portfolios of Monarch
Funds (the Funds), as of August 31, 1996, the related statements of operations
for the year then ended, statements of changes in net assets for each of the
years in the two-year period then ended and financial highlights for each of the
years or periods presented on pages 8 and 9. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Treasury Cash Fund, Government Cash Fund, and Cash Fund as of August 31, 1996,
the results of their operations for the year then ended, changes in their net
assets for each of the years in the two-year period then ended and financial
highlights for each of the years or periods presented on pages 8 and 9 in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
October 11, 1996
2
<PAGE>
MONARCH FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
------------- --------------- --------------
<S> <C> <C> <C>
ASSETS:
Investment in Portfolios of Core Trust (Delaware), at value.... $ 83,471,666 $ 508,099,794 $ 126,282,923
------------- --------------- --------------
LIABILITIES:
Accrued expenses and other liabilities......................... 15,695 322,332 82,081
Dividends payable.............................................. 215,817 2,154,355 464,968
------------- --------------- --------------
Total liabilities................................................ 231,512 2,476,687 547,049
------------- --------------- --------------
NET ASSETS....................................................... $ 83,240,154 $ 505,623,107 $ 125,735,874
------------- --------------- --------------
------------- --------------- --------------
COMPONENTS OF NET ASSETS:
Capital paid in................................................ $ 83,236,680 $ 505,655,465 $ 125,746,722
Accumulated net realized gain (loss)........................... 3,474 (32,358) (10,848)
------------- --------------- --------------
NET ASSETS....................................................... $ 83,240,154 $ 505,623,107 $ 125,735,874
------------- --------------- --------------
------------- --------------- --------------
NET ASSETS BY CLASS OF SHARES:
Universal Shares............................................... -- 248,985,876 3,272,369
Institutional Shares........................................... 79,259,999 256,243,809 89,732,820
Investor Shares................................................ 3,980,155 393,422 32,730,685
------------- --------------- --------------
NET ASSETS....................................................... $ 83,240,154 $ 505,623,107 $ 125,735,874
------------- --------------- --------------
------------- --------------- --------------
SHARES OUTSTANDING:
Universal Shares............................................... -- 249,010,624 3,272,212
Institutional Shares........................................... 79,256,691 256,251,428 89,740,780
Investor Shares................................................ 3,979,989 393,413 32,733,730
NET ASSET VALUE PER SHARE........................................ $ 1.00 $ 1.00 $ 1.00
</TABLE>
See notes to financial statements.
3
<PAGE>
MONARCH FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
------------ --------------- ------------
<S> <C> <C> <C>
NET INVESTMENT INCOME ALLOCATED FROM PORTFOLIOS OF CORE TRUST
(DELAWARE)
Interest income.................................................... $ 2,093,289 $ 25,938,232 $ 6,342,523
Net expenses....................................................... 57,312 630,236 168,818
------------ --------------- ------------
Net investment income from Portfolios of Core Trust (Delaware)....... $ 2,035,977 $ 25,307,996 $ 6,173,705
------------ --------------- ------------
EXPENSES:
Management......................................................... 19,198 230,547 56,125
Transfer agent..................................................... 94,832 649,734 242,331
Shareholder services............................................... 57,593 378,210 158,740
Legal.............................................................. 2,804 32,914 8,039
Trustees........................................................... 839 10,502 2,863
Distribution....................................................... 5,089 340 37,340
Registration....................................................... 16,931 51,430 15,758
Other.............................................................. 3,190 46,127 8,432
------------ --------------- ------------
Total expenses....................................................... 200,476 1,399,804 529,628
Expenses reimbursed and fees waived.................................. (78,679) (187,274) (41,268)
------------ --------------- ------------
Net expenses......................................................... 121,797 1,212,530 488,360
------------ --------------- ------------
NET INVESTMENT INCOME................................................ 1,914,180 24,095,466 5,685,345
------------ --------------- ------------
REALIZED GAIN ON INVESTMENTS ALLOCATED FROM PORTFOLIOS OF CORE TRUST
(DELAWARE).......................................................... 3,474 11,721 6,420
------------ --------------- ------------
INCREASE IN NET ASSETS FROM OPERATIONS............................... $ 1,917,654 $ 24,107,187 $ 5,691,765
------------ --------------- ------------
------------ --------------- ------------
</TABLE>
See notes to financial statements.
4
<PAGE>
MONARCH FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED AUGUST 31, 1995 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
--------------- ----------------- ---------------
<S> <C> <C> <C>
NET ASSETS--August 31, 1994.................................. $ 41,194,039 $ 220,535,595 $ 77,875,325
--------------- ----------------- ---------------
OPERATIONS:
Net investment income...................................... 1,122,945 11,753,651 4,828,226
Realized gain (loss) on investments........................ 8,770 (4,812) 7,730
--------------- ----------------- ---------------
1,131,715 11,748,839 4,835,956
--------------- ----------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income--Universal Shares.................... -- (3,112,120) (1,308,183)
Net investment income--Institutional Shares................ (1,122,945) (8,641,531) (3,505,678)
Net investment income--Investor Shares..................... -- -- (14,365)
--------------- ----------------- ---------------
(1,122,945) (11,753,651) (4,828,226)
--------------- ----------------- ---------------
CAPITAL SHARES TRANSACTIONS:
Sale of shares--Universal Shares........................... -- 1,500,895,516 488,366,520
Sale of shares--Institutional Shares....................... 415,123,664 1,315,601,127 363,002,382
Sale of shares--Investor Shares............................ -- -- 23,115,458
Reinvested dividends--Universal Shares..................... -- 1,461,957 738,546
Reinvested dividends--Institutional Shares................. 149,839 4,941,878 661,328
Reinvested dividends--Investor Shares...................... -- -- 7,618
Redemption of shares--Universal Shares..................... -- (1,478,607,602) (484,685,820)
Redemption of shares--Institutional Shares................. (427,945,998) (1,195,657,288) (345,638,957)
Redemption of shares--Investor Shares...................... -- -- (18,458,048)
--------------- ----------------- ---------------
(12,672,495) 148,635,588 27,109,027
--------------- ----------------- ---------------
NET ASSETS--August 31, 1995.................................. $ 28,530,314 $ 369,166,371 $ 104,992,082
--------------- ----------------- ---------------
OPERATIONS:
Net investment income...................................... 1,914,180 24,095,466 5,685,345
Realized gain on investments............................... 3,474 11,721 6,420
--------------- ----------------- ---------------
1,917,654 24,107,187 5,691,765
--------------- ----------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income--Universal Shares.................... -- (11,339,957) (352,288)
Net investment income--Institutional Shares................ (1,822,829) (12,749,225) (4,633,913)
Net investment income--Investor Shares..................... (91,351) (6,284) (699,144)
Realized capital gain--Institutional Shares................ (6,930) -- --
Realized capital gain--Investor Shares..................... (332) -- --
--------------- ----------------- ---------------
(1,921,442) (24,095,466) (5,685,345)
--------------- ----------------- ---------------
CAPITAL SHARES TRANSACTIONS:
Sale of shares--Universal Shares........................... -- 3,821,065,840 475,099,981
Sale of shares--Institutional Shares....................... 740,875,976 2,249,757,121 489,479,393
Sale of shares--Investor Shares............................ 22,912,928 500,001 219,952,023
Reinvested dividends--Universal Shares..................... -- 5,401,509 284,455
Reinvested dividends--Institutional Shares................. 285,067 8,492,380 2,092,801
Reinvested dividends--Investor Shares...................... 68,620 4,978 574,912
Redemption of shares--Universal Shares..................... -- (3,760,033,346) (498,649,996)
Redemption of shares--Institutional Shares................. (690,427,404) (2,188,631,902) (475,637,963)
Redemption of shares--Investor Shares...................... (19,001,559) (111,566) (192,458,234)
--------------- ----------------- ---------------
54,713,628 136,445,015 20,737,372
--------------- ----------------- ---------------
NET ASSETS--August 31, 1996.................................. $ 83,240,154 $ 505,623,107 $ 125,735,874
--------------- ----------------- ---------------
--------------- ----------------- ---------------
</TABLE>
See notes to financial statements.
5
<PAGE>
MONARCH FUNDS
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF ORGANIZATION
Monarch Funds (the "Trust") was formed as a Delaware business trust on July
10, 1992. The Trust, which is registered as an open-end, management investment
company under the Investment Company Act of 1940 (the "Act"), currently has
three diversified investment portfolios, Treasury Cash Fund, Government Cash
Fund and Cash Fund (each a "Fund" and collectively the "Funds"). The Funds are
authorized under the Trust's Trust Instrument to issue an unlimited number of
shares of beneficial interest without par value. Each Fund currently is
authorized to issue three classes of shares, Universal Shares, Institutional
Shares and Investor Shares. The Trust commenced the offering of each class of
shares as follows and no other class of shares currently is outstanding.
<TABLE>
<S> <C>
Treasury Cash Fund (Institutional Shares) July 12, 1993
Treasury Cash Fund (Investor Shares) October 25, 1995
Government Cash Fund (Universal Shares) October 29, 1992
Government Cash Fund (Institutional Shares) July 15, 1993
Cash Fund (Universal Shares) December 1, 1992
Cash Fund (Institutional Shares) July 15, 1993
Cash Fund (Investor Shares) June 16, 1995
</TABLE>
The Trust previously offered Investor Shares of Government Cash Fund. As of
September 17, 1996 there were no Government Cash Fund Investor Shares
outstanding.
MASTER FEEDER ARRANGEMENT-Each Fund currently seeks to achieve its investment
objective by investing all of its investable assets in a separate portfolio of
Core Trust (Delaware)("Core Trust") which has the same investment objective and
policies as the Fund. Core Trust is an open-end, management investment company
and the portfolios in which the Funds invest, Treasury Cash Portfolio,
Government Cash Portfolio and Cash Portfolio (the "Portfolios"), are all
diversified. The Funds account for their investment in a Portfolio as
partnership investments and record their share of the Portfolio's income,
expense and realized gains and losses daily. This is commonly referred to as a
master-feeder arrangement. The financial statements of the Portfolios are
included elsewhere in this annual report. Except for nominal amounts invested in
each Portfolio by the Funds' manager, the Funds currently own all of the
interests in their respective portfolio.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust's financial statements are prepared in accordance with generally
accepted accounting principles ("GAAP") which permit management to make
estimates and assumptions at the date of the financial statements and are based,
in part, on the following accounting policies. However, these estimates may
differ from actual results. The Funds' fiscal year end is August 31.
PORTFOLIO VALUATION-The Trust determines the net asset value per share of each
Fund as of 1:00 p.m., Pacific time, on each Fund business day utilizing the
amortized cost method pursuant to Rule 2a-7 under the Act. Under this method,
investment in a Portfolio is valued at cost.
SECURITY TRANSACTIONS-Security transactions are recorded on the trade date. The
cost basis of investments for Federal income tax purposes at August 31, 1996 is
the same as for financial reporting purposes.
CLASS SPECIFIC EXPENSES-Each share of each class of a Fund represents an
undivided, proportionate interest in the Fund. The Funds' class specific
expenses include shareholder service fees, transfer agent fees and certain other
expenses as determined by the Trust's Board of Trustees (the "Board").
Institutional Shares, which are offered solely through banks, trust companies
and other financial institutions, and Investor Shares incur shareholder service
fees and Investor Shares incur distribution fees. In addition, there are
differences between the classes of shares with respect to the minimum investment
required and voting rights.
FEDERAL TAXES-Each Fund has qualified, and intends to continue to qualify, as a
regulated investment company under the Internal Revenue Code of 1986, as
amended, by complying with the applicable requirements thereof. Each Fund
distributes all of its taxable income. Therefore, no Federal income tax
provision is required. As of August 31, 1996, Cash Fund had a capital loss
carryforward available to offset future capital gains as follows:
<TABLE>
<S> <C>
Cash Fund (Expires 2003)............................................................ $ 10,850
</TABLE>
DIVIDENDS TO SHAREHOLDERS-Dividends to shareholders from each class of each
Fund's net investment income are declared daily and distributed monthly. Net
capital gain realized by a Fund is distributed at least annually.
6
<PAGE>
MONARCH FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
AUGUST 31, 1996
- --------------------------------------------------------------------------------
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISERS-The investment adviser to each Portfolio is Linden Asset
Management, Inc. (the "Adviser"). Pursuant to investment advisory agreements
with respect to each Portfolio among Core Trust, the Adviser and Forum Advisors,
Inc. ("Forum Advisors"), the Adviser may delegate responsibility for portfolio
management to Forum Advisors. A Fund may withdraw its investment from a
Portfolio at any time if the Board determines that it is in the best interest of
the Fund and its shareholders to do so. In the event a Fund were to make such a
withdrawal, the Trust has retained the Adviser and Forum Advisors to act as
investment advisers to the Funds. Neither the Adviser nor Forum Advisors
receives any advisory fees with respect to a Fund as long as the Fund remains
completely invested in the Portfolio.
MANAGER-The manager of the Trust is Forum Financial Services, Inc. ("Forum"), a
registered broker-dealer and a member of the National Association of Securities
Dealers, Inc. For its management services and facilities, Forum receives from
each Fund a management fee at an annual rate of 0.05% of the average daily net
assets of the Fund. In addition, certain legal expenses were charged to the
Trust by Forum. For the year ended August 31, 1996, the respective amounts in
Treasury Cash Fund, Government Cash Fund and Cash Fund were $213, $4,010, and
$937.
TRANSFER AGENT AND SHAREHOLDER SERVICE AGENTS-The transfer agent and dividend
disbursing agent for the Funds is Forum Financial Corp. (the "Transfer
Agent").The Transfer Agent is paid a transfer agent fee at an annual rate of
0.20% of the average daily net assets of Institutional Shares and Investor
Shares of the Funds and 0.05% of the average daily net assets of Universal
Shares of each Fund, plus $12,000 per year and certain account and additional
class charges. For the year ended August 31, 1996, transfer agency fees for
Treasury Cash Fund were $82,722 and $12,110 for Institutional Shares and
Investor Shares, respectively, for Government Cash Fund were $127,832, $518,144
and $3,758 for Universal Shares, Institutional Shares and Investor Shares,
respectively, and for Cash Fund were $11,705, $191,176 and $39,450 for Universal
Shares, Institutional Shares and Investor Shares, respectively. The Trust has
adopted a shareholder service plan with respect to Institutional Shares and
Investor Shares under which the Trust pays Forum a shareholder servicing fee at
an annual rate of 0.15% of the average daily net assets of Institutional Shares
and Investor Shares of each Fund. Forum may pay any or all amounts of these
payments to various institutions which provide shareholder servicing to their
customers who hold Institutional Shares or Investor Shares. For the year ended
August 31, 1996, shareholder service fees for Treasury Cash Fund were $54,540
and $3,053 for Institutional Shares and Investor Shares, respectively, for
Government Cash Fund were $378,006 and $204 for Institutional Shares and
Investor Shares, respectively, and for Cash Fund were $136,337 and $22,403 for
Institutional Shares and Investor Shares, respectively.
DISTRIBUTOR-Forum acts as the Trust's distributor pursuant to a separate
distribution agreement with the Trust. The Trust has adopted a plan of
distribution pursuant to Rule 12b-1 under the Act with respect to Investor
Shares under which the Trust pays Forum a distribution fee at an annual rate of
0.25% of the average daily net assets of Investor Shares of each Fund. Forum may
pay any or all amounts of these payments to various institutions which provide
distribution or shareholder services for Investor Shares. The Plan obligates the
Funds to pay Forum as compensation for Forum's distributions and shareholder
services and not as reimbursement for certain expenses incurred.
7
<PAGE>
MONARCH FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
AUGUST 31, 1996
- --------------------------------------------------------------------------------
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES.
For the year ended August 31, 1996, Forum and the Transfer Agent waived fees
in each Fund, and Forum reimbursed expenses in each Fund, as follows:
<TABLE>
<CAPTION>
MANAGEMENT TRANSFER SHAREHOLDER REIMBURSED
FEE AGENT FEE SERVICE FEE EXPENSES
------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Treasury Cash Fund
Institutional Shares................................... $ 8,289 $ 27,391 $ 24,768 $ 9,106
Investor Shares........................................ 1,018 6,511 511 1,085
Government Cash Fund.....................................
Universal Shares....................................... 104,477 56,482 N/A 22,546
Institutional Shares................................... -- -- -- --
Investor Shares........................................ 81 3,575 -- 113
Cash Fund
Universal Shares....................................... 3,212 5,875 N/A --
Institutional Shares................................... -- -- 14,708 --
Investor Shares........................................ 507 7,425 3,752 5,789
</TABLE>
NOTE 5. FINANCIAL HIGHLIGHTS
Following is selected data for a share of each class of each Fund
outstanding during the periods indicated.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE
NET ASSETS
BEGINNING DIVIDENDS -------------------------------
NET ASSET NET FROM NET ENDING NET NET
VALUE PER INVESTMENT INVESTMENT ASSET VALUE INVESTMENT
SHARE INCOME INCOME PER SHARE EXPENSES INCOME
------------- ------------- ------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
TREASURY CASH FUND
Institutional Shares
Year Ended August 31, 1996......... $ 1.00 $ 0.05 $ (0.05) $ 1.00 0.45% 5.01%
Year Ended August 31, 1995......... 1.00 0.05 (0.05) 1.00 0.42% 5.18%
Year Ended August 31, 1994......... 1.00 0.03 (0.03) 1.00 0.42% 3.03%
July 12, 1993 to August 31, 1993... 1.00 -- -- 1.00 0.45%(b) 2.65%(b)
Investor Shares........................
October 25, 1995 to August 31,
1996............................. 1.00 0.04 (0.04) 1.00 0.83%(b) 4.50%(b)
GOVERNMENT CASH FUND
Universal Shares
Year Ended August 31, 1996......... 1.00 0.05 (0.05) 1.00 0.19% 5.43%
Year Ended August 31, 1995......... 1.00 0.06 (0.06) 1.00 0.24% 5.46%
Year Ended August 31, 1994......... 1.00 0.04 (0.04) 1.00 0.28% 3.48%
October 29, 1992 to August 31,
1993............................. 1.00 0.03 (0.03) 1.00 0.21%(b) 3.19%(b)
Institutional Shares
Year Ended August 31, 1996......... 1.00 0.05 (0.05) 1.00 0.57% 5.06%
Year Ended August 31, 1995......... 1.00 0.05 (0.05) 1.00 0.54% 5.39%
Year Ended August 31, 1994......... 1.00 0.03 (0.03) 1.00 0.56% 3.45%
July 15, 1993 to August 31, 1993... 1.00 -- -- 1.00 0.53%(b) 2.91%(b)
Investor Shares
March 21, 1996 to August 31, 1996.. 1.00 0.02 (0.02) 1.00 0.83%(b) 4.50%(b)
<CAPTION>
RATIO TO
NET ASSETS AVERAGE NET
AT END OF ASSETS
PERIOD ----------------
TOTAL (000'S GROSS
RETURN OMITTED) EXPENSES(A)
------------- ----------- ----------------
<S> <C> <C> <C>
TREASURY CASH FUND
Institutional Shares
Year Ended August 31, 1996......... 5.15% $ 79,259 0.69%
Year Ended August 31, 1995......... 5.28% 28,530 0.86%
Year Ended August 31, 1994......... 3.11% 41,194 0.74%
July 12, 1993 to August 31, 1993... 2.81%(b) 39,660 1.09%(b)
Investor Shares........................
October 25, 1995 to August 31,
1996............................. 4.00% 3,980 1.33%(b)
GOVERNMENT CASH FUND
Universal Shares
Year Ended August 31, 1996......... 5.59% 248,986 0.28%
Year Ended August 31, 1995......... 5.78% 182,546 0.52%
Year Ended August 31, 1994......... 3.64% 158,798 0.49%
October 29, 1992 to August 31,
1993............................. 3.23%(b) 158,516 0.52%(b)
Institutional Shares
Year Ended August 31, 1996......... 5.18% 256,244 0.57%
Year Ended August 31, 1995......... 5.46% 186,620 0.66%
Year Ended August 31, 1994......... 3.35% 61,738 0.68%
July 15, 1993 to August 31, 1993... 2.89%(b) 31,483 1.04%(b)
Investor Shares
March 21, 1996 to August 31, 1996.. 2.02% 393 3.53%(b)
</TABLE>
8
<PAGE>
MONARCH FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
AUGUST 31, 1996
- --------------------------------------------------------------------------------
NOTE 5. FINANCIAL HIGHLIGHTS (CONTINUED)
Following is selected data for a share of each class of each Fund outstanding
during the periods indicated.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE
NET ASSETS
BEGINNING DIVIDENDS -------------------------------
NET ASSET NET FROM NET ENDING NET NET
VALUE PER INVESTMENT INVESTMENT ASSET VALUE INVESTMENT
SHARE INCOME INCOME PER SHARE EXPENSES INCOME
------------- ------------- ------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
CASH FUND
Universal Shares
Year Ended August 31, 1996......... $ 1.00 $ 0.05 $ (0.05) $ 1.00 0.27% 5.48%
Year Ended August 31, 1995......... 1.00 0.06 (0.06) 1.00 0.27% 5.59%
Year Ended August 31, 1994......... 1.00 0.04 (0.04) 1.00 0.27% 3.50%
December 1, 1992 to August 31,
1993............................. 1.00 0.03 (0.03) 1.00 0.25%(b) 3.29%(b)
Institutional Shares
Year Ended August 31, 1996......... 1.00 0.05 (0.05) 1.00 0.57% 5.10%
Year Ended August 31, 1995......... 1.00 0.05 (0.05) 1.00 0.54% 5.33%
Year Ended August 31, 1994......... 1.00 0.03 (0.03) 1.00 0.54% 3.43%
July 15, 1993 to August 31, 1993... 1.00 -- -- 1.00 0.53%(b) 2.94%(b)
Investor Shares
Year Ended August 31, 1996......... 1.00 0.05 (0.05) 1.00 0.83% 4.68%
June 16, 1995 to August 31, 1995... 1.00 0.01 (0.01) 1.00 0.84%(b) 5.32%(b)
<CAPTION>
RATIO TO
NET ASSETS AVERAGE NET
AT END OF ASSETS
PERIOD ----------------
TOTAL (000'S GROSS
RETURN OMITTED) EXPENSES(A)
------------- ----------- ----------------
<S> <C> <C> <C>
CASH FUND
Universal Shares
Year Ended August 31, 1996......... 5.53% $ 3,272 0.43%
Year Ended August 31, 1995......... 5.75% 26,525 0.56%
Year Ended August 31, 1994......... 3.69% 22,105 0.55%
December 1, 1992 to August 31,
1993............................. 3.36%(b) 47,854 0.62%(b)
Institutional Shares
Year Ended August 31, 1996......... 5.22% 89,733 0.60%
Year Ended August 31, 1995......... 5.23% 73,802 0.69%
Year Ended August 31, 1994......... 3.40% 55,771 0.72%
July 15, 1993 to August 31, 1993... 2.97%(b) 34,383 1.07%(b)
Investor Shares
Year Ended August 31, 1996......... 4.95% 32,731 0.96%
June 16, 1995 to August 31, 1995... 5.14%(b) 4,665 3.76%(b)
</TABLE>
(a) During each period, various fees and expenses were waived and reimbursed,
respectively. The ratio of Gross Expenses to Average Net Assets reflects the
expense ratio in the absence of any waivers and reimbursements for the Fund
and its respective Portfolio.
(b) Annualized.
SPECIAL MEETING OF SHAREHOLDERS (UNAUDITED)
The following matters were submitted to a vote of shareholders of each Fund
at a special meeting of shareholders held November 30, 1995. Proposal
1--Election of Robert M. Franko as a new Trustee of the Trust; and approval of
continuation of terms of office for Rudolph I. Estrada, Maurice J. DeWald, John
Y. Keffer and Jack J. Singer as Trustees of the Trust. Proposal 2--Ratification
of the selection of KPMG Peat Marwick LLP as the independent auditors of each
Fund for the Funds' fiscal year ending August 31, 1996. Votes were cast as
follows: Proposal 1-- 202,566,558 For (all Nominees); 6,263,939 Against;
3,011,359 Abstained; Proposal 2--205,452,918 For; 6,388,939 Against; 0
Abstained.
9
<PAGE>
CORE TRUST (DELAWARE)
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Trustees and Partners
Core Trust (Delaware)
We have audited the accompanying statements of assets and liabilities of
Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio,
portfolios of Core Trust (Delaware)(the Portfolios) including the schedules of
investments, as of August 31, 1996, and the related statements of operations and
statements of changes in net assets for the year then ended. These financial
statements are the responsibility of the Portfolios' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of August 31, 1996 by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Treasury Cash Portfolio.
Government Cash Portfolio and Cash Portfolio as of August 31, 1996, and the
results of their operations and changes in their net assets for the year then
ended in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
October 11, 1996
10
<PAGE>
CORE TRUST (DELAWARE)
SCHEDULES OF INVESTMENTS
AUGUST 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------- -------------
<C> <S> <C>
TREASURY CASH PORTFOLIO
U.S. TREASURY OBLIGATIONS (68.2%)
$ 5,000,000 U.S. Treasury Bills, 5.169%
yield, due 9/19/96......... $ 4,988,733
1,000,000 U.S. Treasury Bills, 5.232%
yield, due 9/19/96......... 997,756
30,000,000 U.S. Treasury Bills, 5.15%
yield, due 9/19/96......... 29,932,667
11,155,000 U.S. Treasury Bills, 5.17%
yield, due 9/19/96......... 11,129,864
2,500,000 U.S. Treasury Bills, 5.324%
yield, due 1/9/97.......... 2,454,490
3,000,000 U.S. Treasury Bills, 5.129%
yield, due 9/12/96......... 2,996,213
500,000 U.S. Treasury Bills, 5.297%
yield, due 10/24/96........ 496,388
500,000 U.S. Treasury Bills, 5.306%
yield, due 10/17/96........ 496,883
1,000,000 U.S. Treasury Bills, 5.324%
yield, due 10/31/96........ 991,751
2,500,000 U.S. Treasury Bills, 5.326%
yield, due 1/23/97......... 2,449,462
-------------
Total U.S. Treasury Obligations 56,934,207
-------------
REPURCHASE AGREEMENTS (26.2%)
6,000,000 Bank of America, 5.10%, to be
repurchased for $6,003,400
on 9/3/96 (collateralized
by $5,845,000 U.S. Treasury
Bills, 7.50%, due
11/15/16).................. 6,000,000
10,000,000 Bank of America, 5.23%, to be
repurchased for $10,005,811
on 9/3/96 (collateralized
by $7,180,000 U.S. Treasury
Bills, 11.25%, due
2/15/15)................... 10,000,000
5,860,000 Nomura Securities, 5.20%, to
be repurchased for
$5,863,385 on 9/3/96
(collateralized by
$5,915,000 U.S. Treasury
Notes, 6.00%, due
5/31/98)................... 5,860,000
-------------
Total Repurchase Agreements............... 21,860,000
-------------
SHORT-TERM HOLDINGS (5.6%)
2,000,000 Dreyfus Treasury Cash
Management Fund............ 2,000,000
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------- -------------
<C> <S> <C>
$ 2,661,000 Dreyfus Treasury Prime Cash
Management Fund............ $ 2,661,000
-------------
Total Short-term Holdings 4,661,000
-------------
Total Investments (100.0%) $ 83,455,207
-------------
-------------
GOVERNMENT CASH PORTFOLIO
U.S. GOVERNMENT SECURITIES (72.1%)
20,000,000 Federal Farm Credit Bank,
5.249% yield, due 9/3/96... 20,000,000
20,000,000 Federal Farm Credit Bank,
5.272% yield, due 9/5/96... 19,994,243
31,100,000 Federal Farm Credit Bank,
5.41% yield, due
10/17/96................... 30,899,872
20,000,000 Federal Home Loan Bank,
5.426% yield, due
10/30/96................... 19,833,117
21,975,000 Federal Home Loan Bank,
5.374% yield, due
11/13/96................... 21,748,768
10,000,000 Federal Home Loan Bank,
5.405% yield, due
10/31/96................... 9,915,417
10,635,000 Federal Home Loan Bank,
5.381% yield, due
9/30/96.................... 10,593,125
16,200,000 Federal National Mortgage
Association, 5.349% yield,
due 9/17/96................ 16,167,051
7,160,000 Federal National Mortgage
Association, 5.389% yield,
due 10/11/96............... 7,120,322
5,000,000 Federal National Mortgage
Association, 5.406% yield,
due 10/18/96............... 4,967,125
8,340,000 Federal National Mortgage
Association, 5.375% yield,
due 10/21/96............... 8,281,843
14,405,000 Federal National Mortgage
Association, 5.378% yield,
due 10/24/96............... 14,297,846
12,155,000 Federal National Mortgage
Association, 5.381% yield,
due 10/28/96............... 12,057,650
10,000,000 Federal National Mortgage
Association, 5.40% yield,
due 11/8/96................ 9,903,934
30,000,000 Federal National Mortgage
Association, 5.414% yield,
due 11/12/96............... 29,693,751
35,000,000 Federal National Mortgage
Association, 5.492% yield,
due 1/7/97................. 34,353,200
450,979 Small Business Administration
Adjustable Rate Pool
500545, 8.125%, due
3/25/03.................... 456,721
</TABLE>
See notes to financial statements.
11
<PAGE>
CORE TRUST (DELAWARE)
SCHEDULES OF INVESTMENTS (continued)
AUGUST 31, 1996
- --------------------------------------------------------------------------------
GOVERNMENT CASH PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------- -------------
U.S. GOVERNMENT SECURITIES, CONTINUED:
<C> <S> <C>
$ 479,552 Small Business Administration
Adjustable Rate Pool
500746, 7.50%, due
11/25/01................... $ 481,681
1,811,159 Small Business Administration
Adjustable Rate Pool
501077, 6.75%, due
11/25/14................... 1,827,997
2,658,903 Small Business Administration
Adjustable Rate Pool
501284, 7.375%, due
8/25/15.................... 2,728,423
2,964,822 Small Business Administration
Adjustable Rate Pool
501308, 6.75%, due
10/25/15................... 3,043,677
6,598,765 Small Business Administration
Adjustable Rate Pool
501543, 6.625%, due
7/25/16.................... 6,632,293
772,711 Small Business Administration
Adjustable Rate Pool
501628, 8.125%, due
9/25/04.................... 784,180
2,464,646 Small Business Administration
Adjustable Rate Pool
501898, 6.50%, due
6/25/17.................... 2,477,421
7,837,721 Small Business Administration
Adjustable Rate Pool
502150, 6.25%, due
2/25/18.................... 7,968,626
1,204,414 Small Business Administration
Adjustable Rate Pool
502208, 6.25%, due
2/25/18.................... 1,224,419
4,483,723 Small Business Administration
Adjustable Rate Pool
502161, 6.25%, due
2/25/18.................... 4,560,093
2,338,315 Small Business Administration
Adjustable Rate Pool
502306, 6.25%, due
2/25/18.................... 2,378,452
1,330,856 Small Business Administration
Adjustable Rate Pool
503058, 6.125%, due
7/25/15.................... 1,330,856
2,017,381 Small Business Administration
Adjustable Rate Pool
503082, 6.125%, due
8/25/20.................... 2,017,381
2,467,999 Small Business Administration
Adjustable Rate Pool
503120, 6.125%, due
11/25/20................... 2,467,999
490,207 Small Business Administration
Adjustable Rate Pool
503121, 6.125%, due
8/25/15.................... 490,207
3,109,631 Small Business Administration
Adjustable Rate Pool
503232, 5.875%, due
2/25/15.................... 3,109,631
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------- -------------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES, CONTINUED:
$ 1,490,937 Small Business Administration
Adjustable Rate Pool
503278, 5.875% due
2/25/21.................... $ 1,490,912
4,241,613 Small Business Administration
Adjustable Rate Pool
502613, 6.25%, due
4/25/19.................... 4,241,613
2,989,501 Small Business Administration
Adjustable Rate Pool
503431, 6.00%, due
7/25/21.................... 2,991,366
1,694,082 Small Business Administration
Adjustable Rate Pool
501690, 6.375%, due
12/25/16................... 1,708,436
5,000,000 Student Loan Marketing
Association, 5.42% variable
rate, due 1/13/99.......... 5,000,000
18,000,000 Student Loan Marketing
Association, 5.56% variable
rate, due 1/21/98.......... 18,000,000
10,000,000 Student Loan Marketing
Association, 5.40% variable
rate, due 11/10/98......... 10,000,000
8,000,000 Student Loan Marketing
Association, 5.40% variable
rate, due 8/20/98.......... 8,000,000
-------------
Total U.S. Government Securities.......... 365,239,648
-------------
REPURCHASE AGREEMENTS (27.9%)
21,360,000 Bank of America, 5.25%, to be
repurchased for $21,372,460
on 9/3/96 (collateralized
by $22,160,000 Federal
National Mortgage
Association, 0%, due
12/27/96).................. 21,360,000
50,000,000 Bear, Stearns & Co., Inc.,
5.30%, to be repurchased
for $50,051,527 on 9/3/96
(collateralized by
$9,210,000 Federal Home
Loan Mortgage Corporation
1844 S1, 7.224%, due
7/16/22; $17,150,000
Federal National Mortgage
Association, 6.585%, due
10/25/08; $36,050,000
Federal Home Loan Mortgage
Corporation 1478 S3,
6.548%, due 3/15/08;
Federal Home Loan Mortgage
Corporation D74001, 8.00%,
due 8/1/26)................ 50,000,000
</TABLE>
See notes to financial statements.
12
<PAGE>
CORE TRUST (DELAWARE)
SCHEDULES OF INVESTMENTS (continued)
AUGUST 31, 1996
- --------------------------------------------------------------------------------
GOVERNMENT CASH PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------- -------------
REPURCHASE AGREEMENTS, CONTINUED:
<C> <S> <C>
$20,000,000 Nomura Securities, 5.28%, to
be repurchased for
$20,011,733.33 on 9/3/96
(collateralized by
$70,740,000 Federal
National Mortgage
Association 250 IO, 7.00%,
due 10/25/23).............. $ 20,000,000
20,000,000 Nomura Securities, 5.30%, to
be repurchased for
$20,020,611 on 9/3/96
(collateralized by Federal
National Mortgage
Association 1993 21 E, 0%,
due 8/25/23)............... 20,000,000
30,000,000 Smith Barney, 5.30%, to be
repurchased for $30,030,916
on 9/3/96 (collateralized
by Federal National
Mortgage Association 93 146
D, 0%, due 5/25/23; Federal
National Mortgage
Association 93 177C, 0%,
due 9/25/23) 30,000,000
-------------
Total Repurchase Agreements 141,360,000
-------------
Total Investments (100.0%) $ 506,599,648
-------------
-------------
CASH PORTFOLIO
U.S. GOVERNMENT SECURITIES (40.8%)
10,000,000 Federal Home Loan Bank,
5.374% yield, due
11/13/96................... 9,897,050
10,000,000 Federal National Mortgage
Association, 5.414% yield,
due 11/12/96............... 9,897,917
10,000,000 Federal National Mortgage
Association, 5.493% yield,
due 1/7/97................. 9,815,201
390,100 Small Business Administration
Adjustable Rate Pool
500536, 5.00%, due
5/25/13.................... 397,641
754,464 Small Business Administration
Adjustable Rate Pool
500730, 4.35%, due
2/25/04.................... 775,335
81,500 Small Business Administration
Adjustable Rate Pool
500737, 4.43%, due
12/25/97................... 81,500
129,920 Small Business Administration
Adjustable Rate Pool
501256, 4.36%, due
7/25/98.................... 129,920
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------- -------------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES, CONTINUED:
$ 2,075,182 Small Business Administration
Adjustable Rate Pool
501733, 6.003%, due
2/25/17.................... $ 2,111,279
1,652,926 Small Business Administration
Adjustable Rate Pool
501989, 3.92%, due
10/25/12................... 1,664,691
531,608 Small Business Administration
Adjustable Rate Pool
502914, 6.948%, due
3/25/15.................... 532,233
1,960,828 Small Business Administration
Adjustable Rate Pool
503121, 6.625%, due
8/25/15.................... 1,960,828
6,146,123 Small Business Administration
Adjustable Rate Pool
503429, 6.00%, due
6/25/16.................... 6,146,123
6,000,000 Student Loan Marketing
Association, 5.56% variable
rate, due 1/21/98.......... 6,000,000
2,000,000 Student Loan Marketing
Association, 5.51% variable
rate, due 2/17/98.......... 2,000,000
-------------
Total U.S. Government Securities 51,409,718
-------------
BANKER'S ACCEPTANCES (4.7%)
6,000,000 Bank of America, 5.45%, due
10/17/96................... 5,961,133
-------------
Total Banker's Acceptances 5,961,133
-------------
COMMERCIAL PAPER (31.5%)
6,000,000 American Express Credit
Corporation, 5.45% yield,
due 11/20/96............... 5,931,230
5,000,000 Banca CRT, 5.487% yield, due
11/12/96................... 4,948,180
6,000,000 Ford Motor Credit Company,
5.50% yield, due
11/04/96................... 5,944,820
6,000,000 G.E. Capital Credit
Corporation, 5.54% yield,
due 12/3/96................ 5,918,859
5,000,000 International Lease Finance
Corporation, 5.43% yield,
due 9/24/96................ 4,984,527
6,000,000 Merrill Lynch & Co., Inc.,
5.444% yield, due
10/17/96................... 5,961,133
6,000,000 Smith Barney, 5.412% yield,
due 10/17/96............... 5,961,280
-------------
Total Commercial Paper.................... 39,650,029
-------------
CORPORATE NOTES (4.0%)
5,000,000 Bear, Stearns & Co., Inc.,
5.068% variable rate, due
5/14/97.................... 5,000,000
-------------
Total Corporate Notes 5,000,000
-------------
</TABLE>
See notes to financial statements.
13
<PAGE>
CORE TRUST (DELAWARE)
SCHEDULES OF INVESTMENTS (continued)
AUGUST 31, 1996
- --------------------------------------------------------------------------------
CASH PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------- -------------
REPURCHASE AGREEMENTS (19.0%)
<C> <S> <C>
$14,990,000 Bank of America, 5.25%, to be
repurchased for $14,998,744
on 9/3/96 (collateralized
by $15,630,000 Federal Home
Loan Bank, 5.50%, due
1/24/97)................... $ 14,990,000
8,940,000 Nomura Securities, 5.28%, to
be repurchased for
$8,945,244 on 9/3/96
(collateralized by
$30,500,000 Federal
National Mortgage
Association 249 IO, 6.50%,
due (10/25/23)............. 8,940,000
-------------
Total Repurchase Agreements 23,930,000
-------------
Total Investments (100.0%) $ 125,950,880
-------------
-------------
</TABLE>
See notes to financial statements.
14
<PAGE>
CORE TRUST (DELAWARE)
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
------------- --------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments, at value.......................................... $ 83,455,207 $ 506,599,648 $ 125,950,880
Cash........................................................... 7,167 32,011 35,404
Interest and other receivables................................. 15,207 1,550,658 308,633
Organization costs, net of amortization........................ 977 17,558 4,749
------------- --------------- --------------
Total assets..................................................... 83,478,558 508,199,875 126,299,666
------------- --------------- --------------
LIABILITIES:
Accrued expenses and other payables............................ 6,892 100,081 16,743
------------- --------------- --------------
NET ASSETS....................................................... $ 83,471,666 $ 508,099,794 $ 126,282,923
------------- --------------- --------------
------------- --------------- --------------
</TABLE>
See notes to financial statements.
15
<PAGE>
CORE TRUST (DELAWARE)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................................... $2,093,289 $ 25,938,232 $6,342,523
------------ --------------- ------------
EXPENSES:
Advisory.......................................................... 12,930 156,552 38,083
Management........................................................ 19,202 230,634 56,113
Custody........................................................... 9,601 115,317 28,057
Accounting........................................................ 28,518 42,000 42,000
Officer Insurance................................................. 1,288 15,796 4,125
Auditing.......................................................... 3,418 31,168 8,415
Other............................................................. 2,310 38,769 6,982
------------ --------------- ------------
Total expenses...................................................... 77,267 630,236 183,775
Expenses reimbursed and fees waived................................. (19,955) -- (14,957)
------------ --------------- ------------
Net expenses........................................................ 57,312 630,236 168,818
------------ --------------- ------------
NET INVESTMENT INCOME............................................... 2,035,977 25,307,996 6,173,705
------------ --------------- ------------
REALIZED GAIN ON INVESTMENTS........................................ 3,474 11,721 6,420
------------ --------------- ------------
INCREASE IN NET ASSETS FROM OPERATIONS.............................. $2,039,451 $ 25,319,717 $6,180,125
------------ --------------- ------------
------------ --------------- ------------
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ----------------- ---------------
<S> <C> <C> <C>
NET ASSETS--September 1, 1995................................ $ -- $ -- $ --
OPERATIONS:
Net investment income...................................... 2,035,977 25,307,996 6,173,705
Realized gain on investments............................... 3,474 11,721 6,420
--------------- ----------------- ---------------
2,039,451 25,319,717 6,180,125
--------------- ----------------- ---------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions.............................................. 338,723,762 1,854,582,628 466,894,348
Withdrawals................................................ (257,291,547) (1,371,802,551) (346,791,550)
--------------- ----------------- ---------------
81,432,215 482,780,077 120,102,798
--------------- ----------------- ---------------
NET ASSETS--August 31, 1996.................................. $ 83,471,666 $ 508,099,794 $ 126,282,923
--------------- ----------------- ---------------
--------------- ----------------- ---------------
</TABLE>
See notes to financial statements.
16
<PAGE>
CORE TRUST (DELAWARE)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF ORGANIZATION
Core Trust (Delaware)("Core Trust") was formed as a Delaware business trust
on November 11, 1994. Core Trust, which is registered as an open-end, management
investment company under the Investment Company Act of 1940 (the "Act"),
currently has eight separate investment portfolios. These financial statements
relate to Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio
(each a "Portfolio" and collectively the "Portfolios"), each of which is
diversified. The Portfolios commenced operations on September 1, 1995. Interests
in the Portfolios are sold in private placement transactions without any sales
charge to institutional clients, including open-end, management investment
companies.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Core Trust's financial statements are prepared in accordance with generally
accepted accounting principles ("GAAP") which permit management to make
estimates and assumptions at the date of the financial statements and are based,
in part, on the following accounting policies. However, these estimates may
differ from actual results. The Portfolios' fiscal year end is August 31.
PORTFOLIO VALUATION-Core Trust determines the net asset value per share of each
Portfolio as of 1:00 p.m., Pacific time, on each business day utilizing the
amortized cost method pursuant to Rule 2a-7 under the Act. Under this method,
all investments purchased at a discount or premium are valued by accreting or
amortizing, respectively, the difference between the original purchase price and
the maturity value of the investment over the period to the investment's
maturity.
REPURCHASE AGREEMENTS-The Portfolios may purchase portfolio securities from
financial institutions deemed to be creditworthy by the investment adviser
subject to the seller's agreement to repurchase and the Portfolio's agreement to
resell such securities. Securities purchased subject to repurchase agreements
are maintained by Core Trust and must have, at all times, an aggregate market
value greater than or equal to the repurchase price plus accrued interest.
VARIABLE RATE SECURITIES-For variable rate securities, the interest rate varies
to reflect current market conditions. The rates shown in the Schedules of
Investments are the effective rates on August 31, 1996. The maturity dates shown
represent the final maturities. For purposes of Rule 2a-7, certain government
and short-term corporate securities are deemed to have a maturity of the period
remaining until the next readjustment of the interest rate and certain
securities with demand features are deemed to have a maturity of the longer of
the demand period or the period remaining until the next readjustment of the
interest rate.
ORGANIZATIONAL COSTS-The costs incurred by each Portfolio in connection with its
organization have been capitalized and are being amortized using the
straight-line method over a five year period beginning on the commencement of
the Portfolios' operations. These costs were paid by Forum Financial Corp. and
were reimbursed by the Portfolios.
FEDERAL TAXES-Each Portfolio is treated as a partnership for Federal income tax
purposes. Any interest, dividends, gains or losses of a Portfolio are deemed to
be passed through to the Portfolio's interestholders. As partnerships, no
Federal income tax provision is required.
SECURITIES TRANSACTIONS, INTEREST INCOME AND REALIZED GAINS AND
LOSSES-Securities transactions are recorded on a trade date basis, interest
income is accrued as earned and realized gains and losses on investments sold
are recorded on the basis of identified cost. The cost basis of investments for
Federal income tax purposes at August 31, 1996 is the same as for financial
accounting purposes.
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISERS-The investment adviser to each Portfolio is Linden Asset
Management, Inc. (the "Adviser"). Pursuant to investment advisory agreements
with respect to each Portfolio, the Adviser receives from each Portfolio an
advisory fee based upon the total average daily net assets of the Portfolios
("Total Portfolio Assets") that is calculated on a cumulative basis as follows:
0.05% for the first $200 million of Total Portfolio Assets, 0.03% of the next
$300 million of Total Portfolio Assets, and 0.02% of the remaining Total
Portfolio Assets. The minimum total annual advisory fee is $50,000. Pursuant to
investment advisory agreements with respect to each Portfolio among Core Trust,
the Adviser and Forum Advisors, Inc. ("Forum Advisors"), the Adviser may
delegate responsibility for portfolio management to Forum Advisors. To the
extent the Adviser has so delegated its responsibilities, the Adviser pays its
advisory fee to Forum Advisors.
17
<PAGE>
CORE TRUST (DELAWARE)
NOTES TO FINANCIAL STATEMENTS (continued)
AUGUST 31, 1996
- --------------------------------------------------------------------------------
ADMINISTRATOR-The administrator of Core Trust is Forum Financial Services, Inc.
("Forum"), a registered broker-dealer and a member of the National Association
of Securities Dealers, Inc. For its administrative services and facilities,
Forum receives from each Portfolio an administration fee at an annual rate of
0.05% of the average daily net assets of the Portfolio. In addition, certain
legal expenses were charged to Core Trust by Forum. For the year ended August
31, 1996, the respective amounts in Treasury Cash Portfolio, Government Cash
Portfolio and Cash Portfolio were $126, $1,492 and $345.
OTHER SERVICE PROVIDERS-The interestholder record keeper and fund accountant of
the Portfolios is Forum Financial Corp. (the "Accountant"). The Accountant is
paid an annual accounting fee of the lesser of 0.05% of the average daily net
assets of the Portfolio on an annualized basis or $48,000, plus certain
additional charges for each interestholder in the Portfolio. For the year ended
August 31, 1996, the Accountant waived fees of $19,955 and $14,957 in Treasury
Cash Portfolio and Cash Portfolio, respectively.
PLACEMENT AGENT-Forum acts as Core Trust's placement agent pursuant to a
separate agreement with Core Trust and receives no compensation for these
services.
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