<PAGE>
MONARCH FUNDS
- ---------------------------------------------
TREASURY CASH FUND
GOVERNMENT CASH FUND
CASH FUND
SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
February 29, 1996
Dear Shareholders:
Monarch Funds' investors seek safety of principal, high yields, a constant
$1.00 per share price and responsible, competent investment management. For the
six months ended February 29, 1996, we are pleased to report that Treasury Cash
Fund, Government Cash Fund and Cash Fund once again fulfilled the expectations
of our shareholders.
During the period beginning August 31, 1995, the Federal Reserve Bank
continued its interest rate easing trend which it had started the previous
spring. The Federal Funds rate was cut in December and again in January,
bringing the rate to 5.25%; and the Funds' average life was extended in
September to take advantage of this easing of rates. However, our portfolio
manager believed that by February, the economy had begun to gain strength and
that there would be no further easing by the Federal Reserve Bank for the
balance of the year. As a result of this, the average life of the Funds was
shortened to less than 10 days. Subsequent economic indicators have indeed shown
that the economy is substantially stronger than most observers had thought, and
interest rates have risen to reflect this change in perspective. Our current
short average life has enabled the Funds to invest at these higher rates.
For the twelve months ended December 31, 1995, GOVERNMENT CASH
FUND/UNIVERSAL SHARES continued its top performance. The January issue of Money
Market Insight-Registered Trademark-, a service of IBC/Donoghue, Inc., ranked
the Fund #1 OF 128 funds in total return for this period as listed in its Money
Fund Report Averages-TM- -- Institutional Only, Government Only category.
<TABLE>
<CAPTION>
TOTAL RETURN IBC/DONOGHUE, INC. RANKING
------------- ----------------------------
<S> <C> <C>
Calendar Year 1993 3.24% 1 of 84
Calendar Year 1994 4.30% 1 of 109
Calendar Year 1995 6.01% 1 of 128
</TABLE>
These results reflect the voluntary waiver of certain fees by affiliates of
our distributor and include the reinvestment of all dividends. In 1995, two
other funds had the same total return. Without any waivers, the rankings would
have been lower and total returns for 1993, 1994 and 1995 would have been
approximately 3.00%, 4.04% and 5.92%, respectively. Also for the twelve months
ended December 31, 1995, CASH FUND/UNIVERSAL SHARES was ranked #22 OF 100 funds
listed in the Money Fund Report Averages-TM- -- First Tier, Institutional Only
category. Of course, PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
The management of Monarch Funds and I thank you for your continued
confidence as we look forward to a prosperous remainder of 1996.
Sincerely,
[SIG]
John Y. Keffer
Chairman
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
MONARCH FUNDS
- ------------------
<S> <C>
Statements of Assets and Liabilities............. 2
Statements of Operations......................... 3
Statements of Changes in Net Assets.............. 4
Notes to Financial Statements.................... 5
CORE TRUST (DELAWARE)
- -------------------------------------------------
Schedules of Investments......................... 9
Statements of Assets and Liabilities............. 12
Statements of Operations......................... 13
Statements of Changes in Net Assets.............. 13
Notes to Financial Statements.................... 14
</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 SHAREHOLDERS AND TO
OTHERS WHO HAVE RECEIVED A COPY OF A MONARCH FUNDS PROSPECTUS.
<PAGE>
MONARCH FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
FOR SIX MONTHS ENDED FEBRUARY 29, 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
(Note 1)..................................................... $ 43,739,103 $ 483,222,491 $ 107,945,319
------------- --------------- --------------
LIABILITIES:
Accrued expenses and other payables............................ 9,748 141,197 41,106
Dividends payable.............................................. 153,088 2,004,916 348,220
------------- --------------- --------------
Total liabilities................................................ 162,836 2,146,113 389,326
------------- --------------- --------------
NET ASSETS....................................................... $ 43,576,267 $ 481,076,378 $ 107,555,993
------------- --------------- --------------
------------- --------------- --------------
COMPONENTS OF NET ASSETS:
Capital paid in................................................ $ 43,565,532 $ 481,111,395 $ 107,571,249
Accumulated net realized gain (loss)........................... 10,735 (35,017) (15,256)
------------- --------------- --------------
NET ASSETS....................................................... $ 43,576,267 $ 481,076,378 $ 107,555,993
------------- --------------- --------------
------------- --------------- --------------
NET ASSETS BY CLASS OF SHARES:
Universal Shares............................................... -- 238,555,476 1,122,980
Institutional Shares........................................... 42,643,802 242,520,902 94,211,150
Investor Shares................................................ 932,465 -- 12,221,863
------------- --------------- --------------
NET ASSETS....................................................... $ 43,576,267 $ 481,076,378 $ 107,555,993
------------- --------------- --------------
------------- --------------- --------------
SHARES OUTSTANDING:
Universal Shares............................................... -- 238,581,502 1,123,409
Institutional Shares........................................... 42,633,143 242,529,894 94,226,146
Investor Shares................................................ 932,390 -- 12,221,694
NET ASSET VALUE PER SHARE........................................ $ 1.00 $ 1.00 $ 1.00
</TABLE>
See notes to financial statements
2
<PAGE>
MONARCH FUNDS
STATEMENTS OF OPERATIONS
FOR SIX MONTHS ENDED FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
----------- --------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Net investment income from
Portfolios of Core Trust (Delaware).............................. $ 959,336 $ 12,579,631 $ 2,933,387
----------- --------------- ------------
EXPENSES:
Management......................................................... 8,737 111,401 25,748
Transfer agent..................................................... 43,293 314,185 110,255
Shareholder services............................................... 26,213 185,686 71,366
Legal.............................................................. 1,382 16,530 4,030
Trustees........................................................... 604 7,485 2,114
Distribution....................................................... 397 -- 4,046
Registration....................................................... 2,234 14,676 7,698
Other.............................................................. 539 6,874 5,704
----------- --------------- ------------
Total expenses....................................................... 83,399 656,837 230,961
Fees waived.......................................................... (31,589) (124,637) (24,987)
----------- --------------- ------------
Net expenses......................................................... 51,810 532,200 205,974
----------- --------------- ------------
NET INVESTMENT INCOME................................................ 907,526 12,047,431 2,727,413
----------- --------------- ------------
REALIZED GAIN ON INVESTMENTS......................................... 3,473 9,062 2,012
----------- --------------- ------------
INCREASE IN NET ASSETS FROM OPERATIONS............................... $ 910,999 $ 12,056,493 $ 2,729,425
----------- --------------- ------------
----------- --------------- ------------
</TABLE>
See notes to financial statements
3
<PAGE>
MONARCH FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR YEAR ENDED AUGUST 31, 1995 AND
SIX MONTHS ENDED FEBRUARY 29, 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
Cost of shares repurchased--Universal Shares............... -- (1,478,607,602) (484,685,820)
Cost of shares repurchased--Institutional Shares........... (427,945,998) (1,195,657,288) (345,638,957)
Cost of shares repurchased--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...................................... 907,526 12,047,431 2,727,413
Realized gain on investment................................ 3,473 9,062 2,012
--------------- ----------------- ---------------
910,999 12,056,493 2,729,425
--------------- ----------------- ---------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income--Universal Shares.................... -- (5,552,301) (221,536)
Net investment income--Institutional Shares................ (899,894) (6,495,130) (2,426,407)
Net investment income--Investor Shares..................... (7,632) -- (79,470)
--------------- ----------------- ---------------
(907,526) (12,047,431) (2,727,413)
--------------- ----------------- ---------------
CAPITAL SHARES TRANSACTIONS:
Sale of shares--Universal Shares........................... -- 1,518,553,425 234,195,367
Sale of shares--Institutional Shares....................... 345,220,801 860,006,547 244,789,482
Sale of shares--Investor Shares............................ 9,352,535 -- 72,807,137
Reinvested dividends--Universal Shares..................... -- 1,915,474 168,999
Reinvested dividends--Institutional Shares................. 128,962 4,394,313 1,072,639
Reinvested dividends--Investor Shares...................... 5,082 -- 51,923
Cost of shares repurchased--Universal Shares............... -- (1,464,464,017) (259,778,729)
Cost of shares repurchased--Institutional Shares........... (331,239,673) (808,504,797) (225,442,524)
Cost of shares repurchased--Investor Shares................ (8,425,227) -- (65,302,395)
--------------- ----------------- ---------------
15,042,480 111,900,945 2,561,899
--------------- ----------------- ---------------
NET ASSETS--February 29, 1996................................ $ 43,576,267 $ 481,076,378 $ 107,555,993
--------------- ----------------- ---------------
--------------- ----------------- ---------------
</TABLE>
See notes to financial statements
4
<PAGE>
MONARCH FUNDS
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 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 (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>
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 in this semi-annual report.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust's financial statements are prepared in accordance with generally
accepted accounting principles ("GAAP") and are based, in part, on the following
accounting policies. The Funds' fiscal year end is August 31.
USE OF ESTIMATES--The preparation of financial statements in conformity with
GAAP requires the Funds' management to make estimates and assumptions that
affect certain reported amounts. Actual results may differ from those estimates.
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.
PURCHASES AND REDEMPTIONS OF SHARES--Purchases and redemptions of the Funds'
shares are effected at the time of determination of net asset value next
following the receipt of any purchase or redemption order, in proper form, by
the Trust's transfer agent.
SECURITY TRANSACTIONS--Security transactions are recorded on the trade date.
The cost of investments for Federal income tax purposes at February 29, 1996 is
the same as for financial reporting purposes.
EXPENSE ALLOCATION--Expenses incurred with respect to any two or more Funds
are allocated in proportion to the net assets of those Funds except where
another more appropriate allocation of expenses can be made. Expenses directly
attributable to a Fund are allocated to that Fund.
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
5
<PAGE>
MONARCH FUNDS
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
thereof. Each Fund distributes all of its taxable income. Therefore, no Federal
income tax provision is required. As of February 29, 1996, certain of the Funds
have capital loss carryforwards available to offset future capital gains as
follows:
<TABLE>
<S> <C>
Cash Fund (Expires 2003).................................................... $ 17,268
Government Cash Fund (Expires 2003)......................................... $ 4,813
</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, unless offset by any available capital loss
carryforwards, is distributed at least annually.
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 the Subadviser. 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 or Forum Advisors
receive 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 period ended February 29, 1996, the
respective amounts in Treasury Cash Fund, Government Cash Fund, and Cash Fund
were $213, $4,010, and $937, respectively.
TRANSFER AGENT AND SHAREHOLDER SERVICE AGENTS--The transfer agent and
dividend disbursing agent of 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 the Institutional Shares and Investor
Shares of the Funds and 0.05% of the average daily net assets of the Universal
Shares of each Fund, plus $12,000 per year and certain account and additional
class charges. For the period ended February 29, 1996, transfer agency fees for
Treasury Cash Fund were $39,774 and $3,519 for Institutional Shares and Investor
Shares, respectively, for Government Cash Fund were $59,408 and $254,777 for
Universal Shares and Institutional Shares, respectively, and for Cash Fund were
$6,311, $96,623, and $7,321 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 the 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 period ended February 29, 1996, shareholder service
fees for Treasury Cash Fund were $25,975 and $238 for Institutional Shares and
Investor Shares, respectively, and for Cash Fund were $68,938 and $2,428 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 1940 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.
6
<PAGE>
MONARCH FUNDS
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
NOTE 4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
For the period ended February 29, 1996, Forum and the Transfer Agent waived
fees in each Fund as follows:
<TABLE>
<CAPTION>
TRANSFER
MANAGEMENT AGENT SHAREHOLDER DISTRIBUTION
FEE FEE SERVICE FEE FEES
------------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
Treasury Cash Fund
Institutional Shares................. $ 3,356 $ 14,297 $ 13,339 $ --
Investor Shares...................... 80 80 40 397
Government Cash Fund
Universal Shares..................... 25,093 23,851 N/A --
Institutional Shares................. -- 44,710 30,983 --
Cash Fund
Universal Shares..................... -- 1,960 N/A --
Institutional Shares................. -- 767 422 --
Investor Shares...................... -- 9,676 12,127 35
</TABLE>
NOTE 5. SPECIAL MEETING OF SHAREHOLDERS
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. Francko 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 KMPG 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.
7
<PAGE>
MONARCH FUNDS
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
NOTE 6. 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
Period Ended February 29, 1996..... $ 1.00 $ 0.03 $ (0.03) $ 1.00 0.28%(b) 5.21%(b)
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%
Year Ended August 31, 1993(c)...... 1.00 -- -- 1.00 0.45%(b) 2.65%(b)
Investor Shares
Period Ended February 29, 1996(c).. 1.00 0.02 (0.02) 1.00 2.38%(b) 4.89%(b)
GOVERNMENT CASH FUND
Universal Shares
Period Ended February 29, 1996..... 1.00 0.03 (0.03) 1.00 0.08%(b) 5.61%(b)
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%
Year Ended August 31, 1993(c)...... 1.00 0.03 (0.03) 1.00 0.21%(b) 3.19%(b)
Institutional Shares
Period Ended February 29, 1996..... 1.00 0.03 (0.03) 1.00 0.37%(b) 5.25%(b)
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%
Year Ended August 31, 1993(c)...... 1.00 -- -- 1.00 0.53%(b) 2.91%(b)
CASH FUND
Universal Shares
Period Ended February 29, 1996..... 1.00 0.03 (0.03) 1.00 0.21%(b) 5.65%(b)
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%
Year Ended August 31, 1993(c)...... 1.00 0.03 (0.03) 1.00 0.25%(b) 3.29%(b)
Institutional Shares
Period Ended February 29, 1996..... 1.00 0.03 (0.03) 1.00 0.40%(b) 5.28%(b)
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%
Year Ended August 31, 1993(c)...... 1.00 -- -- 1.00 0.53%(b) 2.94%(b)
Investor Shares
Period Ended February 29, 1996..... 1.00 0.02 (0.02) 1.00 0.88%(b) 4.91%(b)
Year Ended August 31, 1995(c)...... 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>
TREASURY CASH FUND
Institutional Shares
Period Ended February 29, 1996..... 5.32%(b) $ 42,644 0.46%(b)
Year Ended August 31, 1995......... 5.28% 28,530 0.86%
Year Ended August 31, 1994......... 3.11% 41,194 0.74%
Year Ended August 31, 1993(c)...... 2.61%(b) 39,660 1.09%(b)
Investor Shares
Period Ended February 29, 1996(c).. 4.94%(b) 932 2.74%(b)
GOVERNMENT CASH FUND
Universal Shares
Period Ended February 29, 1996..... 5.78%(b) 238,555 0.12%(b)
Year Ended August 31, 1995......... 5.78% 182,546 0.52%
Year Ended August 31, 1994......... 3.64% 158,798 0.49%
Year Ended August 31, 1993(c)...... 3.23%(b) 158,516 0.52%(b)
Institutional Shares
Period Ended February 29, 1996..... 5.37%(b) 242,521 0.43%(b)
Year Ended August 31, 1995......... 5.46% 186,620 0.66%
Year Ended August 31, 1994......... 3.35% 61,738 0.68%
Year Ended August 31, 1993(c)...... 2.89%(b) 31,483 1.04%(b)
CASH FUND
Universal Shares
Period Ended February 29, 1996..... 5.71%(b) 1,123 0.26%(b)
Year Ended August 31, 1995......... 5.75% 28,525 0.56%
Year Ended August 31, 1994......... 3.69% 22,105 0.55%
Year Ended August 31, 1993(c)...... 3.38%(b) 47,854 0.62%(b)
Institutional Shares
Period Ended February 29, 1996..... 5.41%(b) 94,211 0.45%(b)
Year Ended August 31, 1995......... 5.23% 73,802 0.69%
Year Ended August 31, 1994......... 3.40% 56,771 0.72%
Year Ended August 31, 1993(c)...... 2.97%(b) 34,383 1.07%(b)
Investor Shares
Period Ended February 29, 1996..... 5.13%(b) 12,222 0.97%(b)
Year Ended August 31, 1995(c)...... 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.
(b)Annualized.
(c)See Note 1 for date when each share class commenced operations.
8
<PAGE>
CORE TRUST (DELAWARE)
SCHEDULES OF INVESTMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY CASH PORTFOLIO
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS (7.9%):
$ 500,000 U.S. Treasury Bills, 5.525% yield, due 4/18/96.... $ 496,463
500,000 U.S. Treasury Bills, 5.495% yield, due 5/2/96..... 495,467
1,500,000 U.S. Treasury Bills, 5.494% yield, due 5/9/96..... 1,484,808
1,000,000 U.S. Treasury Bills, 5.505% yield, due 5/16/96.... 988,864
------------
Total U.S. Treasury Obligations 3,465,602
------------
REPURCHASE AGREEMENTS (92.1%):
10,260,000 Bank of America, 5.41%, to be repurchased for
$10,260,000 plus accrued interest on 3/1/96
(collateralized by $8,225,000 U.S. Treasury
Notes B, 8.75%, due 5/15/17).................... 10,260,000
10,000,000 Donaldson, Lufkin, Jennerette, 5.40%, to be
repurchased for $10,000,000 plus accrued
interest on 3/1/96 (collateralized by
$44,038,000 U.S. Treasury Strips, due
8/15/17)........................................ 10,000,000
10,000,000 Smith Barney, 5.36%, to be repurchased for
$10,000,000 plus accrued interest on 3/1/96
(collateralized by $10,090,000 U.S. Treasury
Notes , 6.625%, due 3/31/97).................... 10,000,000
10,000,000 HSBC Securities, Inc., 5.45%, to be repurchased
for $10,000,000 plus accrued interest on 3/1/96
(collateralized by $10,060,000 U.S. Treasury
Notes, 6.25%, due 8/15/00)...................... 10,000,000
------------
Total Repurchase Agreements 40,260,000
------------
Total Investments (100.0%) $ 43,725,602
------------
------------
GOVERNMENT CASH PORTFOLIO
U.S. GOVERNMENT SECURITIES (32.8%):
12,000,000 Federal Farm Credit Bank, 5.725% yield, due
4/17/96......................................... 11,914,146
23,000,000 Federal Home Loan Bank, 5.714% yield, due
4/25/96......................................... 22,807,966
18,000,000 Federal National Mortgage Association, 5.707%
yield, due 3/25/96.............................. 17,934,120
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------- ------------
<C> <S> <C>
$ 8,800,000 Federal National Mortgage Association, 5.713%
yield, due 4/5/96............................... $ 8,753,116
532,518 Small Business Administration Adjustable Rate Pool
500545, 8.375%, due 3/25/03..................... 541,997
620,245 Small Business Administration Adjustable Rate Pool
500746, 7.75%, due 11/25/01..................... 623,951
1,904,342 Small Business Administration Adjustable Rate Pool
501077, 6.75%, due 11/25/14..................... 1,922,718
2,690,700 Small Business Administration Adjustable Rate Pool
501284, 7.375%, due 8/25/15..................... 2,763,095
3,567,029 Small Business Administration Adjustable Rate Pool
501308, 4.50%, due 10/25/15..................... 3,662,858
6,152,934 Small Business Administration Adjustable Rate Pool
501543, 6.875%, due 7/25/16..................... 7,769,406
806,226 Small Business Administration Adjustable Rate Pool
506128, 8.375%, due 9/25/04..................... 822,761
1,728,786 Small Business Administration Adjustable Rate Pool
501690, 6.625%, due 9/25/16..................... 1,743,860
2,576,278 Small Business Administration Adjustable Rate Pool
501898, 6.50%, due 6/25/17...................... 2,591,639
8,136,544 Small Business Administration Adjustable Rate Pool
502150, 6.50%, due 2/25/18...................... 8,274,623
1,411,880 Small Business Administration Adjustable Rate Pool
502161, 6.25%, due 2/25/18...................... 1,437,171
4,735,874 Small Business Administration Adjustable Rate Pool
502208, 6.50%, due 2/25/18...................... 4,818,507
4,200,709 Small Business Administration Adjustable Rate Pool
502320, 6.313%, due 8/25/18..................... 4,203,128
4,470,043 Small Business Administration Adjustable Rate Pool
502613, 6.25%, due 4/25/19...................... 4,470,043
1,349,218 Small Business Administration Adjustable Rate Pool
503058, 6.375%, due 7/25/15..................... 1,349,218
</TABLE>
9
<PAGE>
CORE TRUST (DELAWARE)
SCHEDULES OF INVESTMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GOVERNMENT CASH PORTFOLIO (CONTINUED)
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES (CONTINUED):
$ 2,387,023 Small Business Administration Adjustable Rate Pool
503082, 6.375%, due 8/25/20..................... $ 2,387,023
2,489,857 Small Business Administration Adjustable Rate Pool
503120, 6.375%, due 11/25/20.................... 2,489,857
496,870 Small Business Administration Adjustable Rate Pool
503121, 6.375%, due 8/25/15..................... 496,870
3,145,320 Small Business Administration Adjustable Rate Pool
503232, 6.125%, due 2/25/15..................... 3,145,320
18,000,000 Student Loan Marketing Association, 5.34% variable
rate, due 1/21/98............................... 18,000,000
8,000,000 Student Loan Marketing Association, 5.18% variable
rate, due 8/20/98............................... 8,000,000
10,000,000 Student Loan Marketing Association, 5.18% variable
rate, due 11/10/98.............................. 10,000,000
5,000,000 Student Loan Marketing Association, 5.20% variable
rate, due 1/13/99............................... 5,000,000
------------
Total U.S. Government Securities 157,923,393
------------
REPURCHASE AGREEMENTS (67.2%):
100,000,000 Bear, Stearns & Co., Inc., 5.25% to be repurchased
for $100,00,000 plus accrued interest on 3/4/96
(collateralized by $8,555,000 Federal Home Loan
Mortgage Corporation 1603 SA, 4.56%, due
10/15/23; $5,335,000 Federal National Mortgage
Association 93197 S4, 5.92%, due 10/25/08;
$12,800,000 Federal National Mortgage
Association 93118 S4, 8.524%, due 7/25/08;
$18,000,000 Federal Home Loan Mortgage
Corporation 1640 S3, 7.844%, due 1/15/08;
$18,900,000 Federal National Mortgage
Association 93197 S1, 5.969%, due 10/25/08;
Federal Home Loan Mortgage Corporation 1478 S3,
6.602%, due 3/15/08; $37,941,224 Federal Home
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------- ------------
<C> <S> <C>
Loan Mortgage Corporation 1601 S3, 6.096%, due
10/15/08)....................................... $100,000,000
$ 58,565,000 HSBC Securities, Inc., 5.45%, to be repurchased
for $58,565,000 plus accrued interest on 3/1/96
(collateralized by $40,000,000 U.S. Treasury
Notes, 5.625%, due 5/15/06; $19,880,000 U.S.
Treasury Notes, 6.125%, due 9/30/00)............ 58,565,000
70,000,000 Nomura Securities, 5.25%, to be repurchased for
$70,000,000 plus accrued interest on 3/4/96
(collateralized by $28,435,000 Federal National
Mortgage Association 264 PO, 0%, due 7/25/24;
$28,640,000 Federal National Mortgage
Association 92-12 SA, 9.18%, due 1/25/22;
$45,905,000 Federal National Mortgage
Association 1993 13J, 0%, due 6/25/23).......... 70,000,000
25,000,000 Nomura Securities, 5.46%, to be repurchased for
$25,000,000 plus accrued interest on 3/1/96
(collateralized by $20,290,000 Federal Home Loan
Mortgage Corporation,6.039%,due 9/15/23;
$17,315,000 Federal Home Loan Mortgage
Corporation,6.72%, due 8/15/23)................. 25,000,000
70,000,000 Smith Barney, 5.25%, to be repurchased for
$70,000,000 plus accrued interest on 3/4/96
(collateralized by $29,640,000 Federal National
Mortgage Association, 5.30%, due 9/25/13;
$27,163,000 Federal National Mortgage
Association, 3.50%, due 4/25/06; $12,300,000
Federal Home Loan Mortgage Corporation 1353,
5.56%, due 8/5/07).............................. 70,000,000
------------
Total Repurchase Agreements 323,565,000
------------
Total Investments (100.0%) $481,488,393
------------
------------
</TABLE>
10
<PAGE>
CORE TRUST (DELAWARE)
SCHEDULES OF INVESTMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH PORTFOLIO
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES (30.1%):
$ 3,000,000 Federal Farm Credit Bank, 5.724% yield, due
4/17/96......................................... $ 2,978,536
2,000,000 Federal Home Loan Bank, 5.714% yield, due
4/25/96......................................... 1,983,091
2,000,000 Federal National Mortgage Association, 5.708%
yield, due 3/25/96.............................. 1,992,680
2,000,000 Federal National Mortgage Association, 5.713%
yield, due 4/5/96............................... 1,989,345
395,979 Small Business Administration Adjustable Rate Pool
500536, 7.50%, due 5/25/13...................... 403,893
818,156 Small Business Administration Adjustable Rate Pool
500730 8.375%, due 2/25/04...................... 843,890
112,004 Small Business Administration Adjustable Rate Pool
500737, 7.75%, due 12/25/97..................... 112,004
25,450 Small Business Administration Adjustable Rate Pool
500976, 7.50%, due 6/25/99...................... 25,450
221,869 Small Business Administration Adjustable Rate Pool
501256, 7.45%, due 7/25/98...................... 221,869
2,099,703 Small Business Administration Adjustable Rate Pool
501733, 6.50%, due 2/25/17...................... 2,137,099
1,681,747 Small Business Administration Adjustable Rate Pool
501989, 6.625%, due 10/25/12.................... 1,694,145
3,163,367 Small Business Administration Adjustable Rate Pool
502320, 6.313%, due 8/25/18..................... 3,165,193
4,254,853 Small Business Administration Adjustable Rate Pool
502321, 6.063%, due 7/25/18..................... 4,257,209
539,062 Small Business Administration Adjustable Rate Pool
502914, 6.50%, due 3/25/15...................... 539,714
1,987,481 Small Business Administration Adjustable Rate Pool
503121, 6.375%, due 8/25/15..................... 1,987,481
6,000,000 Student Loan Marketing Association, 5.34% variable
rate, due 1/21/98............................... 6,000,000
2,000,000 Student Loan Marketing Association, 5.29% variable
rate, due 2/17/98............................... 2,000,000
------------
Total U.S. Government Securities 32,331,599
------------
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------- ------------
<C> <S> <C>
COMMERCIAL PAPER (11.0%):
$ 6,000,000 Bankers Trust New York Corporation, 5.20% yield,
due 7/9/96...................................... $ 5,887,334
6,000,000 Ford Motor Credit Company, 5.20% yield, due
5/16/96......................................... 5,934,134
------------
Total Commercial Paper 11,821,468
------------
CORPORATE NOTES (11.2%):
4,000,000 Bear, Stearns & Co., Inc., 5.60% variable rate,
due 5/2/96...................................... 4,000,000
4,000,000 General Electric Capital Corporation, 5.45%
variable rate, due 6/7/96....................... 4,000,000
4,000,000 Merrill Lynch & Co., Inc., 5.55% variable rate,
due 5/1/96...................................... 4,000,000
------------
Total Corporate Notes 12,000,000
------------
REPURCHASE AGREEMENTS (47.0%):
20,455,000 HSBC Securities, Inc., 5.45%, to be repurchased
for $20,455,000 plus accrued interest on 3/1/96
(collateralized by $20,600,000 U.S. Treasury
Notes, 6.25%, due 5/31/00)...................... 20,455,000
15,000,000 Nomura Securities, 5.25%, to be repurchased for
$15,000,000 plus accrued interest on 3/4/96
(collateralized by $22,225,000 Federal National
Mortgage Association 73, 0%, due 7/25/20)....... 15,000,000
15,000,000 Smith Barney, 5.25%, to be repurchased for
$15,000,000 plus accrued interest on 3/4/96
(collateralized by $39,673,191 Federal National
Mortgage Association 70225, 7.50%, due 8/1/18;
$9,000,000 Federal National Mortgage Association
190073, 7.50%, due 10/1/08)..................... 15,000,000
------------
Total Repurchase Agreements 50,455,000
------------
SHORT-TERM HOLDINGS (0.7%):
717,000 Dreyfus Cash Management Plus Fund................. 717,000
------------
Total Short-term Holdings 717,000
------------
Total Investments (100.0%) $107,325,067
------------
------------
</TABLE>
11
<PAGE>
CORE TRUST ( DELAWARE)
STATEMENTS OF ASSETS AND LIABILITIES
FOR SIX MONTHS ENDED FEBRUARY 29,1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
------------- --------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Note 1)................................. $ 43,725,602 $ 481,488,393 $ 107,325,067
Cash........................................................... 11,127 14,911 3,043
Interest and other receivables................................. 6,045 1,805,924 624,496
Organization costs, net of amortization........................ 1,077 19,752 5,342
------------- --------------- --------------
Total assets..................................................... 43,743,851 483,328,980 107,957,948
------------- --------------- --------------
LIABILITIES:
Accrued expenses and other payables............................ 4,748 106,489 12,629
------------- --------------- --------------
NET ASSETS....................................................... $ 43,739,103 $ 483,222,491 $ 107,945,319
------------- --------------- --------------
------------- --------------- --------------
COMPONENTS OF NET ASSETS:
Interest holders' capital...................................... $ 43,735,630 $ 483,213,429 $ 107,943,307
Accumulated net realized gains................................. 3,473 9,062 2,012
------------- --------------- --------------
NET ASSETS....................................................... $ 43,739,103 $ 483,222,491 $ 107,945,319
------------- --------------- --------------
------------- --------------- --------------
</TABLE>
See notes to financial statements
12
<PAGE>
CORE TRUST (DELAWARE)
STATEMENTS OF OPERATIONS
FOR SIX MONTHS ENDED FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................................... $ 985,175 $ 12,914,887 $3,010,847
------------ --------------- ------------
EXPENSES:
Advisory.......................................................... 6,138 78,272 18,207
Management........................................................ 8,740 111,435 25,747
Custodian......................................................... 4,370 55,718 12,873
Accounting........................................................ 18,000 18,500 19,000
Legal............................................................. 880 10,485 2,503
Trustees.......................................................... 136 1,629 384
Trustee & Officer Insurance....................................... 1,286 15,775 4,120
Auditing.......................................................... 164 1,873 463
Other............................................................. 146 41,569 723
------------ --------------- ------------
Total expenses...................................................... 39,860 335,256 84,020
Expenses reimbursed and fees waived................................. (14,021) -- (6,560)
------------ --------------- ------------
Net expenses........................................................ 25,839 335,256 77,460
------------ --------------- ------------
NET INVESTMENT INCOME............................................... 959,336 12,579,631 2,933,387
------------ --------------- ------------
REALIZED GAIN ON INVESTMENTS........................................ 3,473 9,062 2,012
------------ --------------- ------------
INCREASE IN NET ASSETS FROM OPERATIONS.............................. $ 962,809 $ 12,588,693 $2,935,399
------------ --------------- ------------
------------ --------------- ------------
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
FOR SIX MONTHS ENDED FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ---------------- ---------------
<S> <C> <C> <C>
NET ASSETS--September 1, 1995 $ -- $ -- $ --
OPERATIONS:
Net investment income...................................... 959,336 12,579,631 2,933,387
Realized gain on investments............................... 3,473 9,062 2,012
--------------- ---------------- ---------------
962,809 12,588,693 2,935,399
--------------- ---------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Contributions.............................................. 178,709,057 1,198,570,637 278,726,940
Withdrawals................................................ (135,932,763) (727,936,839) (173,717,020)
--------------- ---------------- ---------------
42,776,294 470,633,798 105,009,920
--------------- ---------------- ---------------
NET ASSETS--February 29, 1996................................ $ 43,739,103 $ 483,222,491 $ 107,945,319
--------------- ---------------- ---------------
--------------- ---------------- ---------------
</TABLE>
See notes to financial statements
13
<PAGE>
CORE TRUST (DELAWARE)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF ORGANIZATION
Core Trust (Delaware)("Core Trust") was formed as a Delaware business trust
on November 11, 1994 and is registered as an open-end management investment
company. Core Trust 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") and are based, in part, on the following
accounting policies. The Portfolios' fiscal year end is August 31.
USE OF ESTIMATES--The preparation of financial statements in conformity with
GAAP requires the Portfolios' management to make estimates and assumptions that
affect certain reported amounts. Actual results may differ from those estimates.
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 February 29, 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 and 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.
EXPENSE ALLOCATION--Expenses incurred with respect to any two or more
portfolios of Core Trust are allocated in proportion to the net assets of such
portfolios except where another more appropriate allocation of expenses can be
made. Expenses directly attributable to a Portfolio are allocated to that
Portfolio.
FEDERAL INCOME TAX--Each Portfolio is treated as a partnership for Federal
income tax purposes. Any interest, dividends, gains or losses of a Portfolios
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 for Federal income
tax purposes 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
14
<PAGE>
CORE TRUST (DELAWARE)
NOTES TO FINANCIAL STATEMENTS (continued)
FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES (CONTINUED)
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.
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
period ended February 29, 1996, the respective amounts in Treasury Cash
Portfolio, Government Cash Portfolio, and Cash Portfolio were $126, $1,492, and
$345, respectively.
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.
PLACEMENT AGENT--Forum acts as Core Trust's placement agent pursuant to a
separate agreement with Core Trust.
NOTE 4. FINANCIAL HIGHLIGHTS
Following is the ratios of expenses, gross expenses and net investment
income to average net assets for each Portfolio for the periods indicated. The
ratio of gross expenses to average net assets reflects the expense ratio in the
absence of applicable waivers and reimbursements, if any. All percentages are
annualized.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
---------------------------------------------
NET
GROSS INVESTMENT
EXPENSES EXPENSES INCOME
------------- ------------- ---------------
<S> <C> <C> <C>
Treasury Cash Portfolio
9/1/95 to 2/29/96...................................... 0.07% 0.11% 2.73%
Government Cash Portfolio
9/1/95 to 2/29/96...................................... 0.07% 0.07% 2.81%
Cash Portfolio
9/1/95 to 2/29/96...................................... 0.08% 0.08% 2.83%
</TABLE>
For the period ended February 29, 1996, Forum voluntarily reimbursed
expenses amounting to $5,281 in Treasury Cash Portfolio. During the same period,
Forum waived fees of $8,740 and $6,560 in Treasury Cash Portfolio and Cash
Portfolio, respectively.
15
