<PAGE>
MONARCH FUNDS
- --------------------------------------
- --------------------------------------
Treasury Cash Fund
Government Cash Fund
Cash Fund
SEMI-ANNUAL REPORT
February 28, 1997
- --------------------------------------------------------------------------------
Dear Shareholders:
We seek to provide Monarch Funds' investors with favorable yields and a constant
$1.00 share price through the skilled and responsible investment management they
have come to expect. I am pleased to report that the Funds' consistently strong
performance has continued during the first half of our 1996-97 fiscal year.
Interest rates during the six months beginning August 31, 1996, remained
essentially unchanged. The Federal Funds rate remained at 5.25% throughout the
period which was marked only by expectations of rising and falling interest
rates. Since there was no expected Federal Reserve Bank action, average
maturities for the Funds were extended to take advantage of a somewhat steeper
yield curve.
We are pleased to announce that for the year ended December 31, 1996, our
performance leader, Government Cash Fund-- Universal Shares ranked #1 for total
return out of 147 funds in the Government-Only Institutions-Only category
tracked by IBC Financial Data, Inc.'s MONEY FUND REPORT AVERAGES-TM-.
<TABLE>
<CAPTION>
IBC FINANCIAL DATA, INC.
TOTAL RETURN 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
Calendar Year 1996........................................... 5.43% 1 of 147
</TABLE>
These results reflect the waiver of certain fees by affiliates of our
distributor, Forum Financial Services, Inc., and include the reinvestment of all
dividends. In 1995, two other funds had the same total return. These waivers may
be terminated or modified at any time, and, in their absence, rankings would
have been lower. Without any waivers, total returns for 1993, 1994, 1995 and
1996 would have been approximately 3.00%, 4.04%, 5.92% and 5.33%, respectively.
HOWEVER, PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
In addition to Universal and Institutional Shares, which were designed and
customized for the needs of the business community, Monarch Funds also offers
Investor Shares. With lower investment minimums and available checkwriting
privileges, this share class has appealed to a broad range of retail investors.
Since first being offered in late 1995, Investor Shares of Treasury Cash Fund
and Cash Fund have grown to more than $50 million in net assets combined.
The management of Monarch Funds and I thank you for your participation. We look
forward to helping you meet your financial goals during what we hope will be a
prosperous remainder of 1997.
Sincerely,
[SIG]
John Y. Keffer
Chairman
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF 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
Financial Highlights.......................... 8
FINANCIAL STATEMENTS OF CORE TRUST (DELAWARE)
- ---------------------------------------------------------
Schedules of Investments...................... 9
Statements of Assets and Liabilities.......... 12
Statements of Operations...................... 13
Statements of Changes in Net Assets........... 14
Notes to Financial Statements................. 15
Financial Highlights.......................... 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 SHAREHOLDERS AND TO
OTHERS WHO HAVE RECEIVED A COPY OF A MONARCH FUNDS PROSPECTUS.
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
------------- --------------- --------------
<S> <C> <C> <C>
ASSETS:
Investment in Portfolios of Core Trust (Delaware) at value
(a).......................................................... $ 29,013,271 $ 524,068,022 $ 178,408,808
Prepaid expenses (Note 4)...................................... 17,293 -- --
------------- --------------- --------------
Total Assets..................................................... 29,030,564 524,068,022 178,408,808
------------- --------------- --------------
LIABILITIES:
Dividends payable.............................................. 106,440 1,975,460 584,377
Payable to related parties (Note 3)............................ -- 137,001 66,438
------------- --------------- --------------
Total Liabilities................................................ 106,440 2,112,461 650,815
------------- --------------- --------------
NET ASSETS....................................................... $ 28,924,124 $ 521,955,561 $ 177,757,993
------------- --------------- --------------
------------- --------------- --------------
COMPONENTS OF NET ASSETS:
Paid in capital................................................ $ 28,922,866 $ 522,020,011 $ 177,777,368
Accumulated net realized gain (loss)........................... 1,258 (64,450) (19,375)
------------- --------------- --------------
NET ASSETS....................................................... $ 28,924,124 $ 521,955,561 $ 177,757,993
------------- --------------- --------------
------------- --------------- --------------
NET ASSETS BY CLASS OF SHARES:
Universal Shares............................................... $ -- $ 274,404,016 $ 350,411
Institutional Shares........................................... 24,363,689 247,551,545 120,532,862
Investor Shares................................................ 4,560,435 -- 56,874,720
------------- --------------- --------------
NET ASSETS....................................................... $ 28,924,124 $ 521,955,561 $ 177,757,993
------------- --------------- --------------
------------- --------------- --------------
SHARES OF BENEFICIAL INTEREST:
Universal Shares............................................... -- 274,437,900 350,449
Institutional Shares........................................... 24,362,629 247,582,111 120,546,000
Investor Shares................................................ 4,560,237 -- 56,880,919
NET ASSET VALUE PER SHARE (OFFERING AND REDEMPTION PRICE PER
SHARE)......................................................... $ 1.00 $ 1.00 $ 1.00
(a) Cost of Investments.......................................... $ 29,013,271 $ 524,068,022 $ 178,408,808
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT CASH
CASH FUND FUND CASH FUND
----------- --------------- ------------
<S> <C> <C> <C>
NET INVESTMENT INCOME ALLOCATED FROM PORTFOLIOS OF CORE TRUST
(DELAWARE):
Interest income.................................................... $ 991,508 $ 13,508,508 $ 4,424,430
Net expenses....................................................... (28,256) (339,974) (121,358)
----------- --------------- ------------
Net investment income allocated from Portfolios of Core Trust
(Delaware).......................................................... 963,252 13,168,534 4,303,072
----------- --------------- ------------
EXPENSES:
Management (Note 3)................................................ 9,417 124,008 40,490
Transfer agent (Note 3)
Universal Shares................................................. -- 66,625 5,361
Institutional Shares............................................. 38,262 281,824 115,458
Investor Shares.................................................. 9,191 -- 51,076
Shareholder services (Note 3)
Institutional Shares............................................. 24,885 204,779 82,708
Investor Shares.................................................. 3,365 -- 35,006
Legal (Note 3)..................................................... 373 10,668 1,701
Audit.............................................................. 1,130 5,240 2,594
Trustees........................................................... 293 4,234 1,474
Distribution (Note 3).............................................. 5,611 -- 58,344
Registration....................................................... 16,315 12,018 17,431
Miscellaneous...................................................... 927 14,125 3,629
----------- --------------- ------------
Total expenses....................................................... 109,769 723,521 415,272
Fees waived (Note 4)................................................. (44,851) (97,424) (23,153)
----------- --------------- ------------
Net expenses......................................................... 64,918 626,097 392,119
----------- --------------- ------------
NET INVESTMENT INCOME................................................ 898,334 12,542,437 3,910,953
----------- --------------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM PORTFOLIOS OF
CORE TRUST (DELAWARE)............................................... (2,216) (29,501) (8,527)
----------- --------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. $ 896,118 $ 12,512,936 $ 3,902,426
----------- --------------- ------------
----------- --------------- ------------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1996 AND
THE SIX MONTHS ENDED FEBRUARY 28, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY CASH GOVERNMENT CASH
FUND FUND CASH FUND
------------- --------------- -------------
<S> <C> <C> <C>
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
Net realized gain (loss) on investments sold........................ 3,474 11,721 6,420
------------- --------------- -------------
Net increase (decrease) in net assets resulting from operations... 1,917,654 24,107,187 5,691,765
------------- --------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
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--Investors Shares............................. (91,351) (6,284) (699,144)
Net realized gain on investments--Institutional Shares.............. (6,930) -- --
Net realized gain on investments--Investors Shares.................. (332) -- --
------------- --------------- -------------
Total distributions to shareholders............................... (1,921,442) (24,095,466) (5,685,345)
------------- --------------- -------------
CAPITAL SHARES TRANSACTIONS (at $1.00 per share):
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--Investors Shares.................................... 22,912,928 500,001 219,952,023
Reinvestment of distributions--Universal Shares..................... -- 5,401,509 284,455
Reinvestment of distributions--Institutional Shares................. 285,067 8,492,380 2,092,801
Reinvestment of distributions--Investors 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--Investors Shares.............................. (19,001,559) (111,566) (192,458,234)
------------- --------------- -------------
Net increase (decrease) in capital transactions................... 54,713,628 136,445,015 20,737,372
------------- --------------- -------------
Net increase (decrease)........................................... 54,709,840 136,456,736 20,743,792
------------- --------------- -------------
NET ASSETS--August 31, 1996........................................... 83,240,154 505,623,107 125,735,874
------------- --------------- -------------
OPERATIONS:
Net investment income............................................... 898,334 12,542,437 3,910,953
Net realized gain (loss) on investments sold........................ (2,216) (29,501) (8,527)
------------- --------------- -------------
Net increase (decrease) in net assets resulting from operations... 896,118 12,512,936 3,902,426
------------- --------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income--Universal Shares............................. -- (5,881,871) (130,043)
Net investment income--Institutional Shares......................... (798,738) (6,659,866) (2,697,960)
Net investment income--Investors Shares............................. (99,596) (700) (1,082,950)
Net realized gain on investments--Universal Shares.................. -- (1,239) --
Net realized gain on investments--Institutional Shares.............. -- (1,352) --
Net realized gain on investments--Investors Shares.................. -- -- --
------------- --------------- -------------
Total distributions to shareholders............................... (898,334) (12,545,028) (3,910,953)
------------- --------------- -------------
CAPITAL SHARES TRANSACTIONS (at $1.00 per share):
Sale of shares--Universal Shares.................................... -- 2,505,091,525 359,431,000
Sale of shares--Institutional Shares................................ 275,794,000 1,130,993,477 325,135,076
Sale of shares--Investors Shares.................................... 24,265,695 -- 294,767,271
Reinvestment of distributions--Universal Shares..................... -- 2,712,751 128,291
Reinvestment of distributions--Institutional Shares................. 72,567 4,139,872 991,872
Reinvestment of distributions--Investors Shares..................... 98,154 1,725 1,016,726
Redemption of shares--Universal Shares.............................. -- (2,482,377,000) (362,481,054)
Redemption of shares--Institutional Shares.......................... (330,760,631) (1,144,197,804) (295,321,727)
Redemption of shares--Investors Shares.............................. (23,783,599) -- (271,636,809)
------------- --------------- -------------
Net increase (decrease) in capital transactions................... (54,313,814) 16,364,546 52,030,646
------------- --------------- -------------
Net increase (decrease)........................................... (54,316,030) 16,332,454 52,022,119
------------- --------------- -------------
NET ASSETS--February 28, 1997 (Unaudited)............................. $ 28,924,124 $ 521,955,561 $ 177,757,993
------------- --------------- -------------
------------- --------------- -------------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
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>
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
substantially similar policies as the Fund. Core Trust also is registered as 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. 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. The Funds account for their
investment in a Portfolio as partnership investments. This is commonly referred
to as a master-feeder arrangement. The financial statements of the Portfolios
are included elsewhere in this report. Except for Cash Fund, the Funds own
substantially all of the interests in their respective Portfolio. The percentage
of Cash Portfolio owned by Cash Fund at February 28, 1997, was approximately
96%.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Trust's financial statements are prepared in accordance with generally
accepted accounting principles which requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates, but any differences are expected to be immaterial.
The following represent significant accounting policies of the Funds:
SECURITY 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. The Trust records
its investment in the Portfolios at value. Valuation of securities held in the
Portfolios are discussed in the Notes to the Financial Statements of Core Trust
which are included elsewhere in this report.
INVESTMENT INCOME AND EXPENSES-The Trust records daily its prorata share of the
Portfolios' income, expenses and realized gain and loss. In addition, the Fund
accrues its own expenses.
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
5
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
certain other expenses as determined by the Trust's Board of Trustees (the
"Board"). Institutional Shares 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 intends to qualify and continue to qualify each year as
a regulated investment company and distribute all of its taxable income. In
addition, by distributing in each calendar year substantially all of its net
investment income, capital gains and certain other amounts, if any, each Fund
will not be subject to a Federal excise tax. Therefore, no Federal income or
excise tax provision is required.
DISTRIBUTIONS TO SHAREHOLDERS-Distributions to shareholders of net investment
income are declared daily and paid monthly. Net capital gain, if any, is
distributed to shareholders at least annually. Distributions are based on
amounts calculated in accordance with applicable Federal income tax regulations.
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.
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 Treasury
Cash Fund, Government Cash Fund and Cash Fund by Forum in the amount of $218,
$2,780 and $926 respectively.
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 certain account and additional class charges.
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.
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 distribution and shareholder
services and not as reimbursement for certain expenses incurred.
6
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 4. WAIVER OF FEES
Forum and the Transfer Agent have voluntarily waived a portion of their fees, so
that total expenses of the Funds would not exceed certain limitations. For the
period ended February 28, 1997, fees waived were as follows:
<TABLE>
<CAPTION>
MANAGEMENT TRANSFER SHAREHOLDER
FEE AGENT FEE SERVICE FEE
------------ ----------- -----------
<S> <C> <C> <C>
Treasury Cash Fund $ 8,635 $ 25,691 $ 10,525
Government Cash Fund 55,749 41,675 N/A
Cash Fund 1,252 3,037 18,864
</TABLE>
NOTE 5. SPECIAL MEETING OF SHAREHOLDERS
The following matter was submitted to a vote of shareholders of each Fund at a
special meeting of shareholders held December 27, 1996: To authorize the Trust,
on behalf of the Funds, to vote at a meeting of the interestholders of Core
Trust (Delaware) to approve an amendment to the Investment Advisory Agreement
between Core Trust (Delaware) and Linden Asset Management, Inc. to increase the
investment advisory fee with respect to Treasury Cash Portfolio, Government Cash
Portfolio and Cash Portfolio. Votes were cast as follows: Treasury Cash
Fund--12,693,830 For; 546,054 Against; 0 Abstained; Government Cash
Fund--195,861,387 For; 40,639,951 Against; 41,946,637 Abstained; and Cash
Fund--57,837,208 For; 45,980,925 Against; 142,400 Abstained.
7
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
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 DISTRIBUTIONS -------------
NET ASSET NET FROM NET ENDING NET
VALUE PER INVESTMENT INVESTMENT ASSET VALUE
SHARE INCOME INCOME PER SHARE EXPENSES
----------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
TREASURY CASH FUND
Institutional Shares
Period Ended February 28, 1997 (d)....... $ 1.00 $ 0.02 ($ 0.02) $ 1.00 0.45%(b)
Year Ended August 31, 1996............... 1.00 0.05 (0.05) 1.00 0.45%
Year Ended August 31, 1995............... 1.00 0.05 (0.05) 1.00 0.42%
Year Ended August 31, 1994............... 1.00 0.03 (0.03) 1.00 0.42%
Year Ended August 31, 1993 (c)........... 1.00 -- -- 1.00 0.45%(b)
Investor Shares
Period Ended February 28, 1997 (d)....... 1.00 0.02 (0.02) 1.00 0.83%(b)
Year Ended August 31, 1996 (c)........... 1.00 0.04 (0.04) 1.00 0.83%(b)
GOVERNMENT CASH FUND
Universal Shares
Period Ended February 28, 1997 (d)....... 1.00 0.03 (0.03) 1.00 0.17%(b)
Year Ended August 31, 1996............... 1.00 0.05 (0.05) 1.00 0.19%
Year Ended August 31, 1995............... 1.00 0.06 (0.06) 1.00 0.24%
Year Ended August 31, 1994............... 1.00 0.04 (0.04) 1.00 0.28%
Year Ended August 31, 1993 (c)........... 1.00 0.03 (0.03) 1.00 0.21%(b)
Institutional Shares
Period Ended February 28, 1997 (d)....... 1.00 0.02 (0.02) 1.00 0.57%(b)
Year Ended August 31, 1996............... 1.00 0.05 (0.05) 1.00 0.57%
Year Ended August 31, 1995............... 1.00 0.05 (0.05) 1.00 0.54%
Year Ended August 31, 1994............... 1.00 0.03 (0.03) 1.00 0.56%
Year Ended August 31, 1993 (c)........... 1.00 -- -- 1.00 0.53%(b)
CASH FUND
Universal Shares
Period Ended February 28, 1997 (d)....... 1.00 0.03 (0.03) 1.00 0.27%(b)
Year Ended August 31, 1996............... 1.00 0.05 (0.05) 1.00 0.27%
Year Ended August 31, 1995............... 1.00 0.06 (0.06) 1.00 0.27%
Year Ended August 31, 1994............... 1.00 0.04 (0.04) 1.00 0.27%
Year Ended August 31, 1993 (c)........... 1.00 0.03 (0.03) 1.00 0.25%(b)
Institutional Shares
Period Ended February 28, 1997 (d)....... 1.00 0.02 (0.02) 1.00 0.57%(b)
Year Ended August 31, 1996............... 1.00 0.05 (0.05) 1.00 0.57%
Year Ended August 31, 1995............... 1.00 0.05 (0.05) 1.00 0.54%
Year Ended August 31, 1994............... 1.00 0.03 (0.03) 1.00 0.54%
Year Ended August 31, 1993 (c)........... 1.00 -- -- 1.00 0.53%(b)
Investor Shares
Period Ended February 28, 1997 (d)....... 1.00 0.02 (0.02) 1.00 0.82%(b)
Year Ended August 31, 1996............... 1.00 0.05 (0.05) 1.00 0.83%
Year Ended August 31, 1995 (c)........... 1.00 0.01 (0.01) 1.00 0.84%(b)
<CAPTION>
RATIO TO
NET ASSETS AVERAGE NET
AT END OF ASSETS
NET PERIOD ---------------
INVESTMENT TOTAL (000'S GROSS
INCOME RETURN OMITTED) EXPENSES(A)
--------------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
TREASURY CASH FUND
Institutional Shares
Period Ended February 28, 1997 (d)....... 4.81%(b) 4.86%(b) $ 24,364 0.72%(b)
Year Ended August 31, 1996............... 5.01% 5.15% 79,259 0.69%
Year Ended August 31, 1995............... 5.18% 5.28% 28,530 0.86%
Year Ended August 31, 1994............... 3.03% 3.11% 41,194 0.74%
Year Ended August 31, 1993 (c)........... 2.65%(b) 2.81%(b) 39,660 1.09%(b)
Investor Shares
Period Ended February 28, 1997 (d)....... 4.44%(b) 4.48%(b) 4,560 1.07%(b)
Year Ended August 31, 1996 (c)........... 4.50%(b) 4.00% 3,980 1.33%(b)
GOVERNMENT CASH FUND
Universal Shares
Period Ended February 28, 1997 (d)....... 5.28%(b) 5.34%(b) 274,404 0.26%(b)
Year Ended August 31, 1996............... 5.43% 5.59% 248,986 0.28%
Year Ended August 31, 1995............... 5.46% 5.78% 182,546 0.52%
Year Ended August 31, 1994............... 3.48% 3.64% 158,798 0.49%
Year Ended August 31, 1993 (c)........... 3.19%(b) 3.23%(b) 158,516 0.52%(b)
Institutional Shares
Period Ended February 28, 1997 (d)....... 4.88%(b) 4.92%(b) 247,552 0.57%(b)
Year Ended August 31, 1996............... 5.06% 5.18% 256,244 0.57%
Year Ended August 31, 1995............... 5.39% 5.46% 186,620 0.66%
Year Ended August 31, 1994............... 3.45% 3.35% 61,738 0.68%
Year Ended August 31, 1993 (c)........... 2.91%(b) 2.89%(b) 31,483 1.04%(b)
CASH FUND
Universal Shares
Period Ended February 28, 1997 (d)....... 5.19%(b) 5.24%(b) 350 0.45%(b)
Year Ended August 31, 1996............... 5.48% 5.53% 3,272 0.43%
Year Ended August 31, 1995............... 5.59% 5.75% 26,525 0.56%
Year Ended August 31, 1994............... 3.50% 3.69% 22,105 0.55%
Year Ended August 31, 1993 (c)........... 3.29%(b) 3.36%(b) 47,854 0.62%(b)
Institutional Shares
Period Ended February 28, 1997 (d)....... 4.89%(b) 4.94%(b) 120,533 0.61%(b)
Year Ended August 31, 1996............... 5.10% 5.22% 89,733 0.60%
Year Ended August 31, 1995............... 5.33% 5.23% 73,802 0.69%
Year Ended August 31, 1994............... 3.43% 3.40% 55,771 0.72%
Year Ended August 31, 1993 (c)........... 2.94%(b) 2.97%(b) 34,383 1.07%(b)
Investor Shares
Period Ended February 28, 1997 (d)....... 4.64%(b) 4.68%(b) 56,875 0.84%(b)
Year Ended August 31, 1996............... 4.68% 4.95% 32,731 0.96%
Year Ended August 31, 1995 (c)........... 5.32%(b) 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 excluding any waivers and reimbursements for the Fund and its
corresponding Portfolio.
(b) Annualized.
(c) See Note 1 for the date each share class commenced operations.
(d) Unaudited.
8
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
TREASURY CASH PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------- -----------
<C> <S> <C>
U.S. TREASURY BILLS (A) (65.0%)
$5,000,000 5.028%, 4/3/97................. $ 4,978,752
4,000,000 5.303%, 4/24/97................ 3,970,534
5,000,000 5.119%, 5/15/97................ 4,949,356
5,000,000 5.192%, 5/29/97................ 4,938,920
-----------
Total U.S. Treasury Bills 18,837,562
-----------
REPURCHASE AGREEMENTS (35.0%)
5,000,000 Nomura Securities, 5.30%,
3/3/97, to be repurchased at
$5,002,208; Collateralized by
$5,040,000 U.S. Treasury
Note, 6.375%, due 1/15/20.... 5,000,000
5,150,000 Smith Barney, 5.30%, 3/4/97, to
be repurchased at $5,153,033;
Collateralized by $4,775,000
U.S. Treasury Note, 7.875%,
due 11/15/04................. 5,150,000
-----------
Total Repurchase Agreements 10,150,000
-----------
Total Investments (100.0%) $28,987,562
-----------
-----------
</TABLE>
(A)Annualized yields at time of purchase.
See Notes to Financial Statements.
9
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
GOVERNMENT CASH PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES (70.8%)
FEDERAL HOME LOAN BANK (A)(29.4%)
$4,215,000 5.411%, 3/5/97................. $ 4,213,775
1,665,000 5.416%, 3/11/97................ 1,663,065
10,005,000 5.44%, 3/27/97................. 9,970,116
5,000,000 5.441%, 3/31/97................ 4,979,661
21,000,000 5.419%, 7/3/97................. 20,627,799
30,000,000 5.483%, 7/31/97................ 29,341,875
15,030,000 5.411%, 8/11/97................ 14,680,469
45,000,000 5.413%, 8/13/97................ 43,940,500
25,000,000 5.378%, 8/14/97................ 24,411,196
-----------
Total Federal Home Loan Bank 153,828,456
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (A)(22.3%)
5,000,000 5.41%, 3/3/97.................. 5,000,000
9,630,000 5.413%, 3/6/97................. 9,625,811
3,305,000 5.415%, 3/10/97................ 3,301,639
3,385,000 5.417%, 3/11/97................ 3,381,073
20,000,000 5.418%, 3/24/97................ 19,938,983
21,000,000 5.446%, 4/4/97................. 20,902,187
15,000,000 5.456%, 4/28/97................ 14,877,734
20,000,000 5.351%, 5/2/97................. 19,827,667
20,000,000 5.45%, 6/30/97................. 19,652,256
-----------
Total Federal National Mortgage Association 116,507,350
-----------
SMALL BUSINESS ADMINISTRATION (B)(11.3%)
424,080 Pool# 500545, 8.125%,
3/25/03...................... 428,135
440,812 Pool# 500746, 7.50%,
11/25/01..................... 440,812
1,689,241 Pool# 501077, 6.75%,
11/25/14..................... 1,704,441
2,053,231 Pool# 501284, 7.375%,
8/25/15...................... 2,111,105
2,624,648 Pool# 501308, 6.75%,
10/25/15..................... 2,695,598
5,972,994 Pool# 501543, 6.625%,
7/25/16...................... 6,000,308
501,513 Pool# 501628, 8.125%,
9/25/04...................... 502,322
1,515,628 Pool# 501690, 6.375%,
12/25/16..................... 1,527,969
2,000,632 Pool# 501898, 6.50%, 7/25/17... 2,010,636
7,749,108 Pool# 502150, 6.25%, 2/25/18... 7,874,479
1,109,792 Pool# 502161, 6.25%, 2/25/18... 1,123,917
4,373,358 Pool# 502208, 6.25%, 2/25/18... 4,446,589
2,311,878 Pool# 502306, 6.25%, 2/25/18... 2,350,640
3,646,487 Pool# 502613, 6.25%, 4/25/19... 3,646,487
1,311,745 Pool# 503058, 6.125%,
7/25/15...................... 1,311,745
1,813,583 Pool# 503082, 6.125%,
8/25/20...................... 1,813,583
2,445,182 Pool# 503120, 6.125%,
11/25/20..................... 2,445,182
483,272 Pool# 503121, 6.125%,
8/25/15...................... 483,272
3,065,387 Pool# 503232, 5.875%,
12/25/15..................... 3,065,387
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------- -----------
<C> <S> <C>
SMALL BUSINESS ADMINISTRATION , CONTINUED:
$1,412,129 Pool# 503278, 5.875%,
2/25/21...................... $ 1,412,103
2,983,022 Pool# 503431, 6.00%, 7/25/21... 2,984,850
3,741,649 Pool# 503461, 6.00%, 9/25/21... 3,744,025
3,514,413 Pool# 503472, 6.00%, 8/25/21... 3,516,577
1,355,128 Pool# 503553, 5.875%,
11/25/21..................... 1,351,755
-----------
Total Small Business Administration 58,991,917
-----------
STUDENT LOAN MARKETING ASSOCIATION (B)(7.8%)
8,000,000 5.33%, 8/20/98................. 8,000,000
10,000,000 5.33%, 11/10/98................ 10,000,000
18,000,000 5.49%, 1/21/98................. 18,000,000
5,000,000 5.35%, 1/13/99................. 5,000,000
-----------
Total Student Loan Marketing Association 41,000,000
-----------
Total U.S. Government Securities 370,327,723
-----------
REPURCHASE AGREEMENTS (29.2%)
72,400,000 Bank of America, 5.35%, 3/3/97,
to be repurchased at
$72,432,278; Collateralized
by $73,900,000 Federal Home
Loan Mortgage Corporation
Discount Notes, 6.00%, due
3/3/97....................... 72,400,000
40,000,000 Nomura Securities, 5.32%,
3/3/97, to be repurchased at
$40,041,378; Collateralized
by $64,600,000 Federal Home
Loan Mortgage Corporation 177
PO, 0%, due 7/1/26........... 40,000,000
40,000,000 Smith Barney, 5.37%, 3/3/97, to
be repurchased at
$40,017,900; Collateralized
by $67,500,000 Federal
National Mortgage Association
273 PO, 0%, due 7/1/26....... 40,000,000
-----------
Total Repurchase Agreements 152,400,000
-----------
Total Investments (100.0%) $522,727,723
-----------
-----------
</TABLE>
(A) Annualized yields at time of purchase.
(B) Certain securities are deemed to have a maturity remaining until the next
readjustment of the interest rate or the longer of the demand period or
readjustment. The interest rates shown reflect the rate in effect on
February 28, 1997.
See Notes to Financial Statements.
10
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
CASH PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES (43.2%)
FEDERAL FARM CREDIT BANK (A) (4.3%)
$8,000,000 5.415%, 5/16/97................ $ 7,914,490
FEDERAL HOME LOAN BANK (A) (16.4%)
5,000,000 5.441%, 3/31/97................ 4,979,661
10,000,000 5.483%, 7/31/97................ 9,780,625
11,065,000 5.413%, 8/13/97................ 10,804,482
5,000,000 5.378%, 8/14/97................ 4,882,240
-----------
Total Federal Home Loan Bank 30,447,008
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (A) (8.0%)
10,000,000 5.364%, 3/5/97................. 9,997,100
5,000,000 5.45%, 6/30/97................. 4,913,065
-----------
Total Federal National Mortgage Association 14,910,165
-----------
SMALL BUSINESS ADMINISTRATION (B)(10.2%)
383,953 Pool# 500536, 7.25%, 5/25/13... 391,127
716,594 Pool# 500730, 8.125%,
2/25/04...................... 734,234
48,764 Pool# 500737, 7.50%,
12/25/97..................... 48,764
96,166 Pool# 501256, 7.20%, 7/25/98... 96,166
1,553,412 Pool# 501733, 6.25%, 2/25/17... 1,579,383
1,622,937 Pool# 501989, 6.375%,
10/25/12..................... 1,634,080
442,137 Pool# 502914, 6.25%, 3/25/15... 442,722
1,933,086 Pool# 503121, 6.125%,
8/25/15...................... 1,933,086
6,076,987 Pool# 503429, 6.00%, 6/25/16... 6,076,987
935,412 Pool# 503461, 6.00%, 9/25/21... 936,011
4,992,503 Pool# 503553, 5.875%,
11/25/21..................... 4,980,096
-----------
Total Small Business Administration 18,852,656
-----------
STUDENT LOAN MARKETING ASSOCIATION (B)(4.3%)
6,000,000 5.49%, 1/21/98................. 6,000,000
2,000,000 5.44%, 2/17/98................. 2,000,000
-----------
Total Student Loan Marketing Association 8,000,000
-----------
Total U.S. Government Securities 80,124,319
-----------
BANKER'S ACCEPTANCES (A)(4.3%)
8,000,000 Bank of America, 5.385%,
4/17/97...................... 7,947,100
COMMERCIAL PAPER (A)(14.1%)
5,810,000 Banca CRT Financial
Corporation, 5.583%,
3/27/97...................... 5,788,929
2,500,000 Duff & Phelps Utility and
Corporate Bond Trust, Inc.,
5.628%, 6/12/97.............. 2,461,986
10,000,000 Ford Motor Credit Corporation,
5.481%, 4/2/97............... 9,955,667
8,000,000 General Electric Capital
Corporation, 5.461%,
3/3/97....................... 8,000,000
-----------
Total Commercial Paper 26,206,582
-----------
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------- -----------
<C> <S> <C>
CORPORATE NOTES (5.4%)
$5,000,000 Bear, Stearns & Co., Inc.,
5.468% variable rate,
5/14/97...................... $ 5,000,000
5,000,000 Bear, Stearns & Co., Inc.,
5.438% variable rate,
1/6/98....................... 5,000,000
-----------
Total Corporate Notes 10,000,000
-----------
REPURCHASE AGREEMENTS (32.1%)
9,690,000 Bank of America, 5.35%, 3/3/97,
to be repurchased at
$9,694,320; Collateralized by
$10,190,000 U.S. Treasury
Strip Notes, 0%, due
5/15/06...................... 9,690,000
20,000,000 Nomura Securities, 5.43%,
3/3/97, to be repurchased at
$20,009,050; Collateralized
by $15,000,000 Federal Home
Loan Mortgage Corporation
1569 C, 0%, due 1/15/22;
$18,665,000 Federal National
Mortgage Association 1993-132
A, 0%, due 10/25/22.......... 20,000,000
30,000,000 Smith Barney, 5.37%, 3/3/97, to
be repurchased at
$30,013,425; Collateralized
by $50,800,000, Federal
National Mortgage Association
273 PO, 0%, due 7/1/26....... 30,000,000
-----------
Total Repurchase Agreements 59,690,000
-----------
<CAPTION>
SHARES
- ----------
<C> <S> <C>
SHORT-TERM HOLDINGS (0.9%)
1,652,000 Dreyfus Cash Management Plus
Fund......................... 1,652,000
-----------
Total Investments (100.0%) $185,620,001
-----------
-----------
</TABLE>
(A) Annualized yields at time of purchase.
(B) Certain securities are deemed to have a maturity remaining until the next
readjustment of the interest rate or the longer of the demand period or
readjustment. The interest rates shown reflect the rate in effect on
February 28, 1997.
See Notes to Financial Statements.
11
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
------------- --------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments: (Note 2)
Investments at cost.......................................... $ 18,837,562 $ 370,327,723 $ 125,930,001
Repurchase agreements at cost................................ 10,150,000 152,400,000 59,690,000
------------- --------------- --------------
Total investments at value................................. 28,987,562 522,727,723 185,620,001
Cash........................................................... 21,010 21,778 25,504
Interest and other receivables................................. 4,483 1,376,657 380,158
Organization costs, net of amortization (Note 2)............... 838 15,363 4,155
------------- --------------- --------------
Total Assets..................................................... 29,013,893 524,141,521 186,029,818
------------- --------------- --------------
LIABILITIES:
Payable to Adviser (Note 3).................................... 456 17,782 5,938
Payable to other related parties (Note 3)...................... 166 55,717 13,876
------------- --------------- --------------
Total Liabilities................................................ 622 73,499 19,814
------------- --------------- --------------
NET ASSETS....................................................... $ 29,013,271 $ 524,068,022 $ 186,010,004
------------- --------------- --------------
------------- --------------- --------------
COMPONENTS OF NET ASSETS:
Investors' capital............................................. $ 29,012,013 $ 524,085,802 $ 186,012,104
Accumulated net realized gain (loss)........................... 1,258 (17,780) (2,100)
------------- --------------- --------------
NET ASSETS....................................................... $ 29,013,271 $ 524,068,022 $ 186,010,004
------------- --------------- --------------
------------- --------------- --------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income.................................................. $ 991,508 $ 13,508,508 $4,549,861
------------ --------------- ------------
EXPENSES:
Investment advisory (Note 3)..................................... 6,690 89,622 30,314
Administration (Note 3).......................................... 9,418 124,051 41,595
Custody.......................................................... 4,709 62,025 20,798
Accounting (Note 3).............................................. 9,411 24,000 24,000
Audit............................................................ 1,112 12,442 5,496
Trustee and Officer Insurance.................................... 913 13,518 3,611
Legal (Note 3)................................................... 489 6,103 1,857
Trustees......................................................... 608 3,929 1,505
Miscellaneous.................................................... 341 4,284 1,453
------------ --------------- ------------
Total expenses..................................................... 33,691 339,974 130,629
Fees waived (Note 4)............................................... (5,435) -- (5,830)
------------ --------------- ------------
Net expenses....................................................... 28,256 339,974 124,799
------------ --------------- ------------
NET INVESTMENT INCOME.............................................. 963,252 13,168,534 4,425,062
------------ --------------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS SOLD....................... (2,216) (29,501) (8,520)
------------ --------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $ 961,036 $ 13,139,033 $4,416,542
------------ --------------- ------------
------------ --------------- ------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1996 AND
THE SIX MONTHS ENDED FEBRUARY 28, 1997
- --------------------------------------------------------------------------------
<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
Net realized gain (loss) on investments sold.............. 3,474 11,721 6,420
--------------- ----------------- ---------------
Net increase (decrease) in net assets resulting from
operations............................................ 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)
--------------- ----------------- ---------------
Net transactions in Investors' Beneficial Interests..... 81,432,215 482,780,077 120,102,798
--------------- ----------------- ---------------
Net increase (decrease)................................. 83,471,666 508,099,794 126,282,923
--------------- ----------------- ---------------
NET ASSETS--August 31, 1996 83,471,666 508,099,794 126,282,923
--------------- ----------------- ---------------
OPERATIONS:
Net investment income..................................... 963,252 13,168,534 4,425,062
Net realized gain (loss) on investments sold.............. (2,216) (29,501) (8,520)
--------------- ----------------- ---------------
Net increase (decrease) in net assets resulting from
operations............................................ 961,036 13,139,033 4,416,542
--------------- ----------------- ---------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions 90,962,876 879,048,770 295,447,184
Withdrawals............................................... (146,382,307) (876,219,575) (240,136,645)
--------------- ----------------- ---------------
Net transactions in Investors' Beneficial Interests..... (55,419,431) 2,829,195 55,310,539
--------------- ----------------- ---------------
Net increase (decrease)................................. (54,458,395) 15,968,228 59,727,081
--------------- ----------------- ---------------
NET ASSETS--February 28, 1997 (Unaudited)................... $ 29,013,271 $ 524,068,022 $ 186,010,004
--------------- ----------------- ---------------
--------------- ----------------- ---------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF ORGANIZATION
Core Trust (Delaware) ("Core Trust") was formed as a Delaware business trust on
September 1, 1994. Core Trust, which is registered as an open-end, management
investment company under the Investment Company Act of 1940 (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
The Portfolios' financial statements are prepared in accordance with generally
accepted accounting principles which requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates, but any differences are expected to be immaterial.
PORTFOLIO VALUATION-Core Trust determines the net asset value per share of each
Portfolio as of 1:00 p.m., Pacific time, on each Portfolio business day
utilizing the amortized cost method pursuant to Rule 2a-7 under the Act. Under
this method, all investments purchased at a discount or premium are valued by
accreting or amortizing, respectively, the difference between the original
purchase price and the maturity value of the investment over the period to the
investment's maturity.
REPURCHASE AGREEMENTS-The Portfolios may invest in repurchase agreements. Each
Portfolio, through its custodian, receives delivery of the underlying
securities, whose market value must always equal or exceed the repurchase price
plus accrued interest. The investment adviser is responsible for determining the
value of the underlying securities at all times. In the event of default, the
Portfolio may have difficulties with the disposition of such securities.
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
each Portfolio's operations. These costs were paid by Forum Financial Corp. and
were reimbursed by the Portfolios.
FEDERAL TAXES-The Portfolios are not required to pay Federal income taxes on
their net investment income and net capital gain, as they are treated as
partnerships for Federal income tax purposes. All interest, dividends, gain and
loss of a Portfolio are deemed to have been "passed through" to the partners in
proportion to their holdings of the Portfolio regardless of whether such
interest, dividends or gain has been distributed by the Portfolio.
SECURITIES TRANSACTIONS, INTEREST INCOME AND REALIZED GAIN AND LOSS-Securities
transactions are recorded on a trade date basis, interest income is accrued as
earned and realized gain and loss on investments sold are recorded on the basis
of identified cost. The cost basis of investments for Federal income tax
purposes at February 28, 1997 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"). Effective January 1, 1997, 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
15
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FEBRUARY 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
assets of the Portfolios ("Total Portfolio Assets") that is calculated on a
cumulative basis as follows: 0.06% for the first $200 million of Total Portfolio
Assets, 0.04% of the next $300 million of Total Portfolio Assets, and 0.03% of
the remaining Total Portfolio Assets. The minimum total annual advisory fee is
$50,000.
Prior to January 1, 1997, the Adviser received from each Portfolio an advisory
fee based upon Total Portfolio Assets that was 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.
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 Treasury Cash Portfolio, Government Cash
Portfolio and Cash Portfolio by Forum for the period ended February 28, 1997 in
the amount of $366, $3,865 and $1,227, respectively.
OTHER SERVICE PROVIDERS-The interestholder record keeper and fund accountant of
the Portfolios is Forum Financial Corp. ("FFC"). FFC is paid an annual
accounting fee of the lesser of an annual rate of 0.05% of the average daily net
assets of the Portfolio 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 and receives no compensation for these
services.
NOTE 4. WAIVER OF FEES
Forum has voluntarily waived a portion of its fees, so that total expenses of
the Portfolios would not exceed certain limitations. For the period ended
February 28, 1997, Forum waived management fees for Treasury Cash Portfolio and
Cash Portfolio in the amount of $5,435 and $5,830, respectively.
NOTE 5. SPECIAL MEETING OF INTERESTHOLDERS
The following matter was submitted to a vote of interestholders of each
Portfolio at a special meeting held December 27, 1996: To approve an amendment
to the Investment Advisory Agreement between Core Trust (Delaware) and Linden
Asset Management, Inc. to increase the investment advisory fee with respect to
the Portfolios. Interests in each of the Portfolios were voted as follows:
Treasury Cash Portfolio--95.88% For; 4.12% Against; 0% Abstained; Government
Cash Portfolio--70.34% For; 29.66% Against; 0% Abstained; and Cash
Portfolio--58.63% For; 41.37% Against; 0% Abstained.
16
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Portfolio performance for the period ended February 28, 1997. All percentages
are annualized.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
--------------------------------------------------
NET
INVESTMENT GROSS
EXPENSES INCOME EXPENSES (A)
----------- --------------------- --------------
<S> <C> <C> <C>
Treasury Cash Portfolio........................................ 0.15% 5.11% 0.18%
Government Cash Portfolio...................................... 0.14% 5.31% 0.14%
Cash Portfolio................................................. 0.15% 5.32% 0.16%
</TABLE>
(a) During the period, various fees were waived. The ratio of Gross Expenses to
Average Net Assets reflects the expense ratio excluding any waivers.
17
