<PAGE>
M O N A R C H F U N D S
- --------------------------------------
- --------------------------------------
Treasury Cash Fund
Government Cash Fund
Cash Fund
SEMI-ANNUAL REPORT
February 28, 1998
- --------------------------------------------------------------------------------
Dear Shareholders:
Monarch Funds reached several milestones in 1997. Total assets in the Funds
reached just over $1 billion on December 24, 1997. Assets have continued to rise
since then, exceeding $1.3 billion in early February. In addition, our oldest
fund and performance leader, Government Cash Fund Universal Shares, marked its
5th anniversary at the end of October, and was ranked #1 for total return out of
70 funds in the Government-Only Institutions-Only category tracked by IBC
Financial Data, Inc.'s MONEY FUND REPORT AVERAGES-TM- for the five years ended
December 31, 1997, and ranked #4 of 163 funds for the 1997 calendar year. As
always, WE REMIND YOU THAT INVESTMENT RETURN WILL FLUCTUATE AND PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
We seek to provide investors with high yields and a constant $1.00 net asset
value through prudent investment management. For the past year, the portfolio
manager has kept average maturities relatively short in order to maintain
liquidity for any sudden withdrawals or changes in Federal Reserve Policy.
Our commitment to you was strengthened further on January 2, 1998, when Forum
Investment Advisors, LLC, became investment adviser to the Core Trust (Delaware)
master portfolios in which your Funds invest. While the adviser's name has
changed, the professionals providing portfolio management services to your Funds
have not. Forum acquired Linden Asset Management, Inc., adviser since the Funds'
inception, and has retained Linden's founder as a member of its team of
professionals.
As we head into our 6th year of operations, we remain committed to helping you
meet your financial goals. The management of Monarch Funds and I thank you for
your continued confidence.
Sincerely,
John Y. Keffer
Chairman
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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
Financial Highlights.......................... 5
Notes to Financial Statements................. 6
FINANCIAL STATEMENTS OF CORE TRUST (DELAWARE)
- ---------------------------------------------------------
Schedules of Investments...................... 10
Statements of Assets and Liabilities.......... 13
Statements of Operations...................... 14
Statements of Changes in Net Assets........... 15
Notes to Financial Statements................. 16
</TABLE>
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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, 1998 (Unaudited)
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<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)......................................................... $ 106,990,217 $ 598,230,259 $ 378,452,565
-------------- --------------- --------------
LIABILITIES:
Dividends payable............................................. 108,196 922,603 308,440
Payable to administrator (Note 3)............................. 17,897 28,792 13,735
Accrued expenses.............................................. 32,783 199,020 166,355
-------------- --------------- --------------
Total Liabilities............................................... 158,876 1,150,415 488,530
-------------- --------------- --------------
NET ASSETS...................................................... $ 106,831,341 $ 597,079,844 $ 377,964,035
-------------- --------------- --------------
-------------- --------------- --------------
COMPONENTS OF NET ASSETS:
Paid in capital............................................... $ 106,820,449 $ 597,184,616 $ 377,980,091
Undistributed (distribution in excess of) net investment
income...................................................... 3,473 (34,793) --
Accumulated net realized gain (loss).......................... 7,419 (69,979) (16,056)
-------------- --------------- --------------
NET ASSETS...................................................... $ 106,831,341 $ 597,079,844 $ 377,964,035
-------------- --------------- --------------
-------------- --------------- --------------
NET ASSETS BY CLASS OF SHARES:
Universal Shares.............................................. $ -- $ 229,663,080 $ 9,370,065
Institutional Shares.......................................... 61,285,645 367,416,764 206,086,772
Investor Shares............................................... 45,545,696 -- 162,507,198
-------------- --------------- --------------
NET ASSETS...................................................... $ 106,831,341 $ 597,079,844 $ 377,964,035
-------------- --------------- --------------
-------------- --------------- --------------
SHARES OF BENEFICIAL INTEREST:
Universal Shares.............................................. -- 229,723,891 9,369,996
Institutional Shares.......................................... 61,279,054 367,461,145 206,098,075
Investor Shares............................................... 45,541,394 -- 162,512,017
NET ASSET VALUE PER SHARE (OFFERING AND REDEMPTION PRICE PER
SHARE)........................................................ $ 1.00 $ 1.00 $ 1.00
(a) Cost of Investments......................................... $ 106,990,217 $ 598,230,259 $ 378,452,565
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
MONARCH FUNDS
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STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998 (Unaudited)
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<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
------------ --------------- ------------
<S> <C> <C> <C>
NET INVESTMENT INCOME ALLOCATED FROM PORTFOLIOS OF CORE TRUST
(DELAWARE)
Interest income.................................................... $ 2,385,794 $ 15,517,500 $ 8,454,696
Net expenses....................................................... (64,754) (378,232) (217,948)
------------ --------------- ------------
Net investment income allocated from Portfolios of Core Trust
(Delaware) (Note 2).............................................. 2,321,040 15,139,268 8,236,748
------------ --------------- ------------
EXPENSES:
Administration (Note 3)............................................ 21,729 135,987 73,912
Transfer agent (Note 3)
Universal Shares................................................. -- 63,367 6,762
Institutional Shares............................................. 53,483 352,053 171,194
Investor Shares.................................................. 43,394 -- 123,850
Shareholder services (Note 3)......................................
Institutional Shares............................................. 30,667 272,037 132,023
Investor Shares.................................................. 38,220 -- 95,439
Legal (Note 3)..................................................... 698 6,535 1,562
Audit.............................................................. 1,101 2,883 1,268
Trustees........................................................... 1,377 9,636 4,511
Distribution--Investor Shares (Note 3)............................. 48,017 -- 148,999
Registration....................................................... 5,165 11,959 6,020
Reporting.......................................................... 202 2,235 1,001
Miscellaneous...................................................... 906 4,855 1,886
------------ --------------- ------------
Total expenses....................................................... 244,959 861,547 768,427
Fees waived (Note 4)............................................... (42,565) (83,161) (15,763)
------------ --------------- ------------
Net expenses......................................................... 202,394 778,386 752,664
------------ --------------- ------------
NET INVESTMENT INCOME................................................ 2,118,646 14,360,882 7,484,084
------------ --------------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS ALLOCATED FROM PORTFOLIOS OF
CORE TRUST (DELAWARE)............................................... 4,978 (41,998) 3,443
------------ --------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. $ 2,123,624 $ 14,318,884 $ 7,487,527
------------ --------------- ------------
------------ --------------- ------------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1997 AND THE SIX MONTHS ENDED FEBRUARY 28, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
------------- --------------- -------------
<S> <C> <C> <C>
NET ASSETS--August 31, 1996........................................... $ 83,240,154 $ 505,623,107 $ 125,735,874
------------- --------------- -------------
OPERATIONS:
Net investment income............................................... 2,336,255 26,012,083 8,819,230
Net realized gain (loss) on investments allocated from Portfolios of
Core Trust (Delaware)............................................. 2,441 (27,824) (8,648)
------------- --------------- -------------
Net increase (decrease) in net assets resulting from operations... 2,338,696 25,984,259 8,810,582
------------- --------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income--Universal Shares............................. -- (13,169,327) (295,284)
Net investment income--Institutional Shares......................... (1,812,820) (12,841,956) (5,826,021)
Net investment income--Investor Shares.............................. (523,435) (800) (2,697,925)
Net realized gain on investments--Universal Shares.................. -- (1,239) --
Net realized gain on investments--Institutional Shares.............. -- (1,352) --
------------- --------------- -------------
Total distributions to shareholders............................... (2,336,255) (26,014,674) (8,819,230)
------------- --------------- -------------
CAPITAL SHARES TRANSACTIONS (at $1.00 per share):
Sale of shares--Universal Shares.................................... -- 4,703,891,858 793,431,000
Sale of shares--Institutional Shares................................ 616,183,130 2,069,478,692 771,736,564
Sale of shares--Investor Shares..................................... 119,376,333 -- 571,922,876
Reinvestment of distributions--Universal Shares..................... -- 7,159,556 311,720
Reinvestment of distributions--Institutional Shares................. 273,560 8,379,532 2,475,428
Reinvestment of distributions--Investor Shares...................... 533,844 1,725 2,834,309
Redemption of shares--Universal Shares.............................. -- (4,729,611,744) (778,562,054)
Redemption of shares--Institutional Shares.......................... (654,886,646) (2,088,930,438) (711,898,289)
Redemption of shares--Investor Shares............................... (93,774,543) (395,138) (531,004,291)
------------- --------------- -------------
Net increase (decrease) from capital transactions................. (12,294,322) (30,025,957) 121,247,263
------------- --------------- -------------
Net increase (decrease) in net assets............................. (12,291,881) (30,056,372) 121,238,615
------------- --------------- -------------
NET ASSETS--August 31, 1997........................................... 70,948,273 475,566,735 246,974,489
------------- --------------- -------------
OPERATIONS:
Net investment income............................................... 2,118,646 14,360,882 7,484,084
Net realized gain (loss) on investments allocated from Portfolios of
Core Trust (Delaware)............................................. 4,978 (41,998) 3,443
------------- --------------- -------------
Net increase (decrease) in net assets resulting from operations... 2,123,624 14,318,884 7,487,527
------------- --------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income--Universal Shares............................. -- (5,540,387) (286,489)
Net investment income--Institutional Shares......................... (1,222,555) (8,820,495) (4,276,874)
Net investment income--Investor Shares.............................. (896,091) -- (2,920,721)
------------- --------------- -------------
Total distributions to shareholders............................... (2,118,646) (14,360,882) (7,484,084)
------------- --------------- -------------
CAPITAL SHARES TRANSACTIONS (at $1.00 per share):
Sale of shares--Universal Shares.................................... -- 2,397,506,749 481,528,200
Sale of shares--Institutional Shares................................ 326,953,944 1,361,493,136 263,844,422
Sale of shares--Investor Shares..................................... 118,810,383 -- 636,373,650
Reinvestment of distributions--Universal Shares..................... -- 2,659,776 286,489
Reinvestment of distributions--Institutional Shares................. 474,325 5,115,415 1,960,152
Reinvestment of distributions--Investor Shares...................... 892,835 -- 2,920,645
Redemption of shares--Universal Shares.............................. -- (2,400,893,349) (490,897,571)
Redemption of shares--Institutional Shares.......................... (306,975,950) (1,244,326,620) (211,760,982)
Redemption of shares--Investor Shares............................... (104,277,447) -- (553,268,902)
------------- --------------- -------------
Net increase (decrease) from capital transactions................. 35,878,090 121,555,107 130,986,103
------------- --------------- -------------
Net increase (decrease) in net assets............................. 35,883,068 121,513,109 130,989,546
------------- --------------- -------------
NET ASSETS--February 28, 1998 (Unaudited)............................. $ 106,831,341 $ 597,079,844 $ 377,964,035
------------- --------------- -------------
------------- --------------- -------------
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
MONARCH FUNDS
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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 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 28, 1998
(b)................................. $ 1.00 $ 0.03 $ (0.03) $ 1.00 0.45%(c) 5.04%(c)
Year Ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.45% 4.89%
Year Ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.45% 5.01%
Year Ended August 31, 1995.......... 1.00 0.05 (0.05) 1.00 0.42% 5.18%
Year Ended August 31, 1994.......... 1.00 0.03 (0.03) 1.00 0.42% 3.03%
Period Ended August 31, 1993 (e).... 1.00 -- -- 1.00 0.45%(c) 2.65%(c)
Investor Shares
Period Ended February 28, 1998
(b)................................. 1.00 0.02 (0.02) 1.00 0.83%(c) 4.67%(c)
Year Ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.83% 4.55%
Period Ended August 31, 1996 (e).... 1.00 0.04 (0.04) 1.00 0.83%(c) 4.50%(c)
GOVERNMENT CASH FUND
Universal Shares
Period Ended February 28, 1998
(b)................................. 1.00 0.03 (0.03) 1.00 0.18%(c) 5.52%(c)
Year Ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.17% 5.35%
Year Ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.19% 5.43%
Year Ended August 31, 1995.......... 1.00 0.06 (0.06) 1.00 0.24% 5.46%
Year Ended August 31, 1994.......... 1.00 0.04 (0.04) 1.00 0.28% 3.48%
Period Ended August 31, 1993 (e).... 1.00 0.03 (0.03) 1.00 0.21%(c) 3.19%(c)
Institutional Shares
Period Ended February 28, 1998
(b)................................. 1.00 0.03 (0.03) 1.00 0.57%(c) 5.14%(c)
Year Ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.57% 4.95%
Year Ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.57% 5.06%
Year Ended August 31, 1995.......... 1.00 0.05 (0.05) 1.00 0.54% 5.39%
Year Ended August 31, 1994.......... 1.00 0.03 (0.03) 1.00 0.56% 3.45%
Period Ended August 31, 1993 (e).... 1.00 -- -- 1.00 0.53%(c) 2.91%(c)
CASH FUND
Universal Shares
Period Ended February 28, 1998
(b)................................. 1.00 0.03 (0.03) 1.00 0.18%(c) 5.54%(c)
Year Ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.23% 5.32%
Year Ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.27% 5.48%
Year Ended August 31, 1995.......... 1.00 0.06 (0.06) 1.00 0.27% 5.59%
Year Ended August 31, 1994.......... 1.00 0.04 (0.04) 1.00 0.27% 3.50%
Period Ended August 31, 1993 (e).... 1.00 0.03 (0.03) 1.00 0.25%(c) 3.29%(c)
Institutional Shares
Period Ended February 28, 1998
(b)................................. 1.00 0.03 (0.03) 1.00 0.57%(c) 5.15%(c)
Year Ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.57% 4.97%
Year Ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.57% 5.10%
Year Ended August 31, 1995.......... 1.00 0.05 (0.05) 1.00 0.54% 5.33%
Year Ended August 31, 1994.......... 1.00 0.03 (0.03) 1.00 0.54% 3.43%
Period Ended August 31, 1993 (e).... 1.00 -- -- 1.00 0.53%(c) 2.94%(c)
Investor Shares
Period Ended February 28, 1998
(b)................................. 1.00 0.02 (0.02) 1.00 0.83%(c) 4.90%(c)
Year Ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.83% 4.72%
Year Ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.83% 4.68%
Period Ended August 31, 1995 (e).... 1.00 0.01 (0.01) 1.00 0.84%(c) 5.32%(c)
<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 28, 1998
(b)................................. 2.53%(d) $ 61,286 0.63%(c)
Year Ended August 31, 1997.......... 4.98% 40,830 0.66%
Year Ended August 31, 1996.......... 5.15% 79,259 0.69%
Year Ended August 31, 1995.......... 5.28% 28,530 0.86%
Year Ended August 31, 1994.......... 3.11% 41,194 0.74%
Period Ended August 31, 1993 (e).... 2.81%(c) 39,660 1.09%(c)
Investor Shares
Period Ended February 28, 1998
(b)................................. 2.34%(d) 45,546 0.87%(c)
Year Ended August 31, 1997.......... 4.58% 30,118 0.97%
Period Ended August 31, 1996 (e).... 4.00% 3,980 1.33%(c)
GOVERNMENT CASH FUND
Universal Shares
Period Ended February 28, 1998
(b)................................. 2.77%(d) 229,663 0.26%(c)
Year Ended August 31, 1997.......... 5.49% 230,410 0.26%
Year Ended August 31, 1996.......... 5.59% 248,986 0.28%
Year Ended August 31, 1995.......... 5.78% 182,546 0.52%
Year Ended August 31, 1994.......... 3.64% 158,798 0.49%
Period Ended August 31, 1993 (e).... 3.23%(c) 158,516 0.52%(c)
Institutional Shares
Period Ended February 28, 1998
(b)................................. 2.57%(d) 367,417 0.57%(c)
Year Ended August 31, 1997.......... 5.06% 245,157 0.57%
Year Ended August 31, 1996.......... 5.18% 256,244 0.57%
Year Ended August 31, 1995.......... 5.46% 186,620 0.66%
Year Ended August 31, 1994.......... 3.35% 61,738 0.68%
Period Ended August 31, 1993 (e).... 2.89%(c) 31,483 1.04%(c)
CASH FUND
Universal Shares
Period Ended February 28, 1998
(b)................................. 2.78%(d) 9,370 0.34%(c)
Year Ended August 31, 1997.......... 5.43% 18,453 0.47%
Year Ended August 31, 1996.......... 5.53% 3,272 0.43%
Year Ended August 31, 1995.......... 5.75% 26,525 0.56%
Year Ended August 31, 1994.......... 3.69% 22,105 0.55%
Period Ended August 31, 1993 (e).... 3.36%(c) 47,854 0.62%(c)
Institutional Shares
Period Ended February 28, 1998
(b)................................. 2.58%(d) 206,087 0.58%(c)
Year Ended August 31, 1997.......... 5.07% 152,041 0.60%
Year Ended August 31, 1996.......... 5.22% 89,733 0.60%
Year Ended August 31, 1995.......... 5.23% 73,802 0.69%
Year Ended August 31, 1994.......... 3.40% 55,771 0.72%
Period Ended August 31, 1993 (e).... 2.97%(c) 34,383 1.07%(c)
Investor Shares
Period Ended February 28, 1998
(b)................................. 2.45%(d) 162,507 0.83%(c)
Year Ended August 31, 1997.......... 4.81% 76,480 0.85%
Year Ended August 31, 1996.......... 4.95% 32,731 0.96%
Period Ended August 31, 1995 (e).... 5.14%(c) 4,665 3.76%(c)
</TABLE>
(a) During each period, certain 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) Unaudited.
(c) Annualized.
(d) Not annualized.
(e) See Note 1 for the date each share class commenced operations.
See Notes to Financial Statements.
5
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1998 (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>
The Trust previously offered Investor Shares of Government Cash Fund. As of
September 17, 1996, there were no Government Cash Fund Investor Shares
outstanding.
MASTER FEEDER ARRANGEMENT-Each Fund currently seeks to achieve its investment
objective by investing all of its investable assets in a separate portfolio of
Core Trust (Delaware) ("Core Trust") which has the same investment objective and
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
(each a "Portfolio" and collectively the "Portfolios"), are all diversified. 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, including the schedule of investments, are
included elsewhere in this report and should be read in conjunction with the
Funds' financial statements. As of February 28, 1998, the percentage of Treasury
Cash Portfolio owned by Treasury Cash Fund was 63.6%; the percentage of
Government Cash Portfolio owned by Government Cash Fund was 99.2%; and the
percentage of Cash Portfolio owned by Cash Fund was 96.6%.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Funds' financial statements are prepared in accordance with generally
accepted accounting principles which require 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.
The following represent significant accounting policies of the Funds:
SECURITY VALUATION-Each Fund determines its net asset value per share as of 1:00
p.m., Pacific time, on each Fund business day. Each Fund records its investment
in its Portfolio at value. Valuation of securities held in the Portfolios is
discussed in the Notes to the Financial Statements of Core Trust.
INVESTMENT INCOME AND EXPENSES-Each Fund records daily its prorata share of its
Portfolio's 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
6
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FEBRUARY 28, 1998 (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 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 gain 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.
As of February 28, 1998, certain of the Funds had capital loss carryovers
available to offset future capital gains as follows:
<TABLE>
<S> <C>
Cash Fund (Expires 2003).................... $ 10,581
Cash Fund (Expires 2005).................... 8,527
Government Cash Fund (Expires 2005)......... 27,824
</TABLE>
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 income tax regulations.
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER-The investment adviser to each Portfolio is Forum Investment
Advisors, LLC ("Forum Advisors"). Prior to January 2, 1998 Linden Asset
Management, Inc. served as investment adviser to each Portfolio. Effective
January 2, 1998, Forum Advisors, Inc. reorganized as Forum Advisors. A Fund may
withdraw its investment from its Portfolio at any time if the Board determines
that it is in the best interest of the Fund and its shareholders to do so.
ADMINISTRATOR-The administrator of the Funds is Forum Administrative Services,
LLC ("Forum"). For its administrative services and facilities, Forum receives
from each Fund an administration fee at an annual rate of 0.05% of the average
daily net assets of the Fund. In addition, certain legal expenses are charged to
the Funds by Forum. For the period ended February 28, 1998, the respective
amounts charged to Treasury Cash Fund, Government Cash Fund and Cash Fund were
$88, $553 and $282. A previous management agreement in effect with Forum
Financial Services, Inc. ("FFSI") during the period was identical in all
material terms, including fees, to the current agreement with Forum.
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 each
Fund 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 entered into a shareholder service agreement with respect to
Institutional Shares and Investor Shares under which the Trust pays Forum a
shareholder servicing fee at an annual rate of 0.20% 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-FFSI, a registered broker-dealer and a member of the National
Association of Securities Dealers, Inc., acts as each Fund's distributor. 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 FFSI a distribution
fee at an annual rate of 0.25% of the average daily net assets of Investor
Shares of each Fund. FFSI may pay any or all
7
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (concluded)
FEBRUARY 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
amounts of these payments to various institutions which provide distribution or
shareholder services for Investor Shares. The Plan obligates the Funds to pay
FFSI as compensation for FFSI's services and not as reimbursement for certain
expenses incurred.
NOTE 4. WAIVER OF FEES
Forum, FFSI and the Transfer Agent have voluntarily waived a portion of their
fees. For the period ended February 28, 1998, fees waived were as follows:
<TABLE>
<CAPTION>
ADMINISTRATION DISTRIBUTION TRANSFER SHAREHOLDER
FEE FEE AGENT FEE SERVICE FEE TOTAL
-------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Treasury Cash Fund
Institutional Shares $ -- $ -- $ 38,539 $ -- $ 38,539
Investor Shares -- 4,026 -- -- 4,026
Government Cash Fund
Universal Shares 33,047 -- 50,114 -- 83,161
Institutional Shares -- -- -- -- --
Cash Fund
Universal Shares 1,768 -- 6,762 -- 8,530
Institutional Shares -- -- -- 7,233 7,233
Investor Shares -- -- -- -- --
</TABLE>
NOTE 5. SPECIAL MEETING OF SHAREHOLDERS
The following matter was submitted to a vote of shareholders of Treasury Cash
Fund, Government Cash Fund and Cash Fund at a special meeting held December 12,
1997 and then continued on December 18, 1997: to approve a new Investment
Advisory Agreement between Core Trust and Forum Advisors with respect to
Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio. Shares of
each of the Funds were voted as follows: Treasury Cash Fund - 58,795,398 For;
215,956 Against; 0 Abstained; Government Cash Fund - 175,365,665 For; 0 Against;
1,714,095 Abstained; Cash Fund - 137,726,363 For; 3,000 Against; 5,210,719
Abstained.
8
<PAGE>
CORE TRUST (DELAWARE)
SEMI-ANNUAL REPORT
FEBRUARY 28, 1998
Treasury Cash Portfolio
Government Cash Portfolio
Cash Portfolio
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
TREASURY CASH PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<C> <S> <C>
U.S. TREASURY BILLS (A) (59.0%)
100,000,000 5.39%, 4/23/98 $ 99,239,031
------------
REPURCHASE AGREEMENTS (41.0%)
22,940,000 BancAmerica Robertson
Stephens, 5.60%, 3/2/98, to
be repurchased at
$22,950,705; Collateralized
by $22,830,000 UST Notes,
6.75%, 6/30/99 22,940,000
23,000,000 Donaldson, Lufkin & Jenrette,
Inc., 5.60%, 3/2/98, to be
repurchased at $23,010,733;
Collateralized by
$44,443,000 UST Strips,
0.00%, 2/15/09 23,000,000
23,000,000 Merrill Lynch & Co., Inc.,
5.55%, 3/2/98 to be
repurchased at $23,010,638;
Collateralized by
$23,285,000 UST Notes,
6.00%, 8/13/99 23,000,000
------------
Total Repurchase Agreements 68,940,000
------------
Total Investments (100.0%) $168,179,031
------------
------------
</TABLE>
(A) Annualized yields at time of purchase.
UST--U.S. Treasury
See Notes to Financial Statements.
10
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
GOVERNMENT CASH PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C>
U.S. GOVERNMENT SECURITIES (55.4%)
FEDERAL FARM CREDIT BANK (B) (3.0%)
18,000,000 5.46%, 4/1/99................. $ 18,000,000
------------
FEDERAL HOME LOAN BANK--DISCOUNT NOTES (A) (4.1%)
25,000,000 5.71%, 3/23/98................ 24,918,917
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--DISCOUNT NOTES (A)
(24.9%)
100,000,000 5.77%, 3/12/98................ 99,844,168
8,644,000 5.76%, 3/30/98................ 8,606,485
41,287,000 5.75%, 4/24/98................ 40,949,136
------------
Total Federal National Mortgage
Association-- Discount Notes 149,399,789
------------
SMALL BUSINESS ADMINISTRATION (B) (13.1%)
367,225 Pool# 500545, 8.38%,
3/25/03..................... 367,924
359,182 Pool# 500746, 7.75%,
11/25/01.................... 359,182
1,296,725 Pool# 501077, 7.00%,
11/25/14.................... 1,306,411
2,502,148 Pool# 501308, 7.00%,
10/25/15.................... 2,558,171
3,205,054 Pool# 501543, 6.88%,
7/25/16..................... 3,217,801
451,264 Pool# 501628, 8.38%,
9/25/04..................... 451,264
1,387,042 Pool# 501690, 6.63%,
9/25/16..................... 1,397,388
1,952,856 Pool# 501898, 6.75%,
7/25/17..................... 1,961,585
5,855,393 Pool# 502150, 6.50%,
2/25/18..................... 5,948,530
588,475 Pool# 502161, 6.50%,
2/25/18..................... 590,794
3,275,510 Pool# 502208, 6.50%,
2/25/18..................... 3,326,146
2,257,850 Pool# 502306, 6.50%,
2/25/18..................... 2,293,855
3,125,598 Pool# 502613, 6.50%,
4/25/19..................... 3,125,598
1,110,529 Pool# 503058, 6.38%,
7/25/15..................... 1,110,529
1,729,059 Pool# 503082, 6.38%,
8/25/20..................... 1,729,059
2,001,262 Pool# 503120, 6.38%,
11/25/20.................... 2,001,262
469,061 Pool# 503121, 6.38%,
8/25/15..................... 469,061
2,824,681 Pool# 503232, 6.13%,
12/25/15.................... 2,824,681
1,227,750 Pool# 503278, 6.13%,
2/25/21..................... 1,227,725
2,928,767 Pool# 503431, 6.25%,
7/25/21..................... 2,930,488
3,612,813 Pool# 503461, 6.25%,
9/25/21..................... 3,614,944
2,727,262 Pool# 503472, 6.25%,
8/25/21..................... 2,728,851
1,184,734 Pool# 503553, 6.13%,
11/25/21.................... 1,181,748
5,085,129 Pool# 503671, 6.13%,
3/25/22..................... 5,085,129
1,890,426 Pool# 503754, 6.13%,
5/25/22..................... 1,890,426
1,205,692 Pool# 503780, 6.13%,
3/25/22..................... 1,207,179
5,201,281 Pool# 503882, 6.00%,
9/25/22..................... 5,194,883
4,399,525 Pool# 503892, 6.13%,
7/25/22..................... 4,410,347
5,973,557 Pool# 503909, 6.00%,
10/25/22.................... 5,969,872
3,000,000 Pool# 504015, 6.00%,
1/25/23..................... 2,999,066
5,293,209 Pool# 504062, 6.00%,
2/25/23..................... 5,293,209
------------
Total Small Business Administration 78,773,108
------------
STUDENT LOAN MARKETING ASSOCIATION (10.3%)
57,050,000 5.68%, 6/18/98................ 57,050,000
5,000,000 5.49%, 1/13/99................ 5,000,000
------------
Total Student Loan Marketing Association 62,050,000
------------
Total U.S. Government Securities 333,141,814
------------
REPURCHASE AGREEMENTS (42.7%)
101,650,000 BancAmerica Robertson
Stephens, 5.66%, 3/2/98, to
be repurchased at
$101,697,945; Collateralized
by; $15,850,000 multiple
FFCB Discount Notes, 0.00%,
4/28/98 to 5/8/98;
$25,825,000 multiple FHLB
Bonds, 5.05% to 6.03%,
2/6/01 to 8/27/01;
$12,000,000 FHLB Discount
Notes, 0.00%, 5/1/98; and
$50,000,000 UST Notes,
5.63%, 12/31/99............. $101,650,000
125,000,000 Bear Stearns & Co., Inc .,
5.60%, 3/2/98, to be
repurchased at $125,058,333;
Collateralized by
$50,000,000 FHLB 186 PO,
0.00%, 7/15/27; $18,985,000
FNMA 222 IO, 7.00%, 6/25/23;
$32,505,000 FNMA 267 PO,
0.00%, 10/25/24; $3,470,000
FNMA 272 PO, 0.00%, 6/25/26;
and $50,705,000 multiple
FNMA 282 IO, 7.00%,
9/1/25...................... 125,000,000
30,000,000 Smith Barney, 5.67%, 3/2/98,
to be repurchased at
$30,014,175; Collateralized
by $41,769,000 FNMA 289-1,
0.00%, 10/30/27............. 30,000,000
------------
Total Repurchase Agreements 256,650,000
------------
SHORT-TERM INVESTMENTS (1.9%)
11,331,000 Dreyfus Treasury Cash
Management Fund 11,331,000
------------
Total Investments (100.0%) $601,122,814
------------
------------
</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, 1998.
FFCB--Federal Farm Credit Bank
FHLB--Federal Home Loan Bank
FNMA--Federal National Mortgage Association
UST--U.S. Treasury
See Notes to Financial Statements.
11
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
CASH PORTFOLIO
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES (24.6%)
FEDERAL HOME LOAN BANK--DISCOUNT NOTES (A) (15.4%)
60,000,000 5.45%, 3/2/98................. $ 60,000,000
------------
SMALL BUSINESS ADMINISTRATION (B) (9.2%)
353,335 Pool# 500536, 7.50%,
5/25/13..................... 359,357
571,759 Pool# 500730, 8.38%,
2/25/04..................... 582,432
19,148 Pool# 501256, 7.45%,
7/25/98..................... 19,148
1,361,739 Pool# 501733, 6.50%,
2/25/17..................... 1,385,325
1,138,183 Pool# 501989, 6.63%,
10/25/12.................... 1,144,493
428,693 Pool# 502914, 6.50%,
3/25/15..................... 429,146
1,876,244 Pool# 503121, 6.38%,
8/25/15..................... 1,876,244
5,597,145 Pool# 503429, 6.25%,
6/25/16..................... 5,597,145
903,203 Pool# 503461, 6.25%,
9/25/21..................... 903,743
4,364,747 Pool# 503553, 6.13%,
11/25/21.................... 4,353,095
2,835,639 Pool# 503754, 6.13%,
5/25/22..................... 2,835,639
4,970,546 Pool# 503882, 6.00%,
9/25/22..................... 4,964,424
5,686,363 Pool# 503912, 6.00%,
10/25/22.................... 5,682,854
5,731,247 Pool# 504015, 6.00%,
1/25/23..................... 5,729,463
------------
Total Small Business Administration 35,862,508
------------
Total U.S. Government Securities 95,862,508
------------
BANK NOTES (B) (2.0%)
8,000,000 Bankers Trust New York Corp.,
5.66%, 7/21/98.............. 7,999,063
------------
CERTIFICATES OF DEPOSITS (B) (1.0%)
4,000,000 Bankers Trust New York Corp.,
5.64%, 9/11/98.............. 3,999,766
------------
COMMERCIAL PAPER (A) (25.3%)
15,000,000 Associates Corp. of North
America, 5.49%, 4/9/98...... 14,913,075
5,000,000 Ford Motor Credit Corp.,
5.49%, 4/10/98.............. 4,970,264
15,000,000 General Electric Capital
Corp., 5.52%, 4/6/98........ 14,919,500
8,000,000 International Lease Finance
Corp., 5.41%, 6/18/98....... 7,870,160
5,000,000 Merrill Lynch & Co., Inc.,
5.46%, 5/19/98.............. 4,940,850
10,500,000 Monsanto Co., 5.41%,
6/23/98..................... 10,321,696
12,000,000 Morgan Stanley Dean Witter,
5.58%, 6/16/98 (B) 12,000,000
12,000,000 Prudential Funding, 5.68%,
3/16/98..................... 11,973,493
17,000,000 Salomon Smith Barney Holdings,
5.45%, 5/15/98.............. 16,809,553
------------
Total Commercial Paper 98,718,591
------------
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<C> <S> <C>
CORPORATE NOTES (7.9%)
6,000,000 BancAmerica Robertson
Stephens, 5.65%, 4/16/98.... $ 6,000,000
15,000,000 Bear Stearns & Co., Inc.,
5.73%, 1/6/99............... 15,000,000
5,000,000 Merrill Lynch & Co., Inc.,
5.63%, 3/4/98............... 5,000,000
5,000,000 Merrill Lynch & Co., Inc.,
5.68%, 7/24/98.............. 5,000,000
------------
Total Corporate Notes 31,000,000
------------
REPURCHASE AGREEMENTS (35.6%)
64,075,000 BancAmerica Robertson
Stephens, 5.66%, 3/2/98, to
be repurchased at
$64,105,222; Collateralized
by $66,000,000 multiple FNMA
Discount Notes, 0.00%,
3/12/98 to 8/24/98.......... 64,075,000
75,000,000 Bear Stearns & Co., Inc .,
5.60%, 3/2/98, to be
repurchased at $75,035,000;
Collateralized by $4,921,664
FHLMC 52 PC, 0.00%, 4/25/24;
$17,800,000 FHLMC 1910 ZV,
8.00%, 10/15/22; $14,846,000
FHLMC 1933 PN, 0.00%,
2/15/27; $7,815,000 FHLMC
1967 PA, 0.00%, 12/15/23;
$7,835,000 FHLMC 1976 PO,
0.00%, 7/15/27; $11,464,000
FHLMC 2003 BPG, 0.00%,
10/17/27; $11,551,053 FHLMC
2003 BPO, 0.00%, 10/17/27;
$13,546,341 FHLMC 2003 B,
0.00%, 10/15/27; and
$2,380,000 FHLMC 2028 PO,
0.00%, 1/15/28 75,000,000
------------
Total Repurchase Agreements 139,075,000
------------
SHORT-TERM INVESTMENTS (3.6%)
14,140,000 Dreyfus Cash Management Plus
Fund 14,140,000
------------
Total Investments (100.0%) $390,794,928
------------
------------
</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, 1998.
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
See Notes to Financial Statements.
12
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
-------------- --------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments: (Note 2)
Securities at amortized cost................................ $ 99,239,031 $ 344,472,814 $ 251,719,928
Repurchase agreements at amortized cost..................... 68,940,000 256,650,000 139,075,000
-------------- --------------- --------------
Total investments at value................................ 168,179,031 601,122,814 390,794,928
Cash.......................................................... 15,756 13,520 20,163
Interest and other receivables................................ 6,751 2,162,658 1,047,222
Organization costs, net of amortization (Note 2).............. 598 10,974 2,968
-------------- --------------- --------------
Total Assets.................................................... 168,202,136 603,309,966 391,865,281
-------------- --------------- --------------
LIABILITIES:
Payable to adviser (Note 3)................................... 4,681 17,651 10,925
Payable to administrator (Note 3)............................. 5,929 23,311 14,428
Accrued expenses and other liabilities........................ 8,300 66,874 32,409
-------------- --------------- --------------
Total Liabilities............................................... 18,910 107,836 57,762
-------------- --------------- --------------
NET ASSETS...................................................... $ 168,183,226 $ 603,202,130 $ 391,807,519
-------------- --------------- --------------
-------------- --------------- --------------
COMPONENTS OF NET ASSETS:
Investors' capital............................................ $ 168,183,226 $ 603,202,130 $ 391,807,519
-------------- --------------- --------------
NET ASSETS...................................................... $ 168,183,226 $ 603,202,130 $ 391,807,519
-------------- --------------- --------------
-------------- --------------- --------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income.................................................. $2,745,991 $ 15,538,689 $8,776,150
------------ --------------- ------------
EXPENSES:
Investment advisory (Note 3)..................................... 19,655 107,682 60,092
Administration (Note 3).......................................... 25,035 136,511 76,452
Custody.......................................................... 12,518 68,255 38,226
Accounting (Note 3).............................................. 21,735 24,000 24,000
Legal (Note 3)................................................... 3,252 5,624 3,653
Audit............................................................ 792 24,935 17,644
Trustees......................................................... 229 1,507 762
Amortization of organization costs............................... 120 2,195 594
Miscellaneous.................................................... 1,507 8,039 4,808
------------ --------------- ------------
Total expenses..................................................... 84,843 378,748 226,231
Fees waived (Note 4)............................................. (10,258) -- --
------------ --------------- ------------
Net expenses....................................................... 74,585 378,748 226,231
------------ --------------- ------------
NET INVESTMENT INCOME.............................................. 2,671,406 15,159,941 8,549,919
------------ --------------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS SOLD....................... 5,849 (41,998) 3,538
------------ --------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $2,677,255 $ 15,117,943 $8,553,457
------------ --------------- ------------
------------ --------------- ------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31, 1997 AND THE SIX MONTHS ENDED FEBRUARY 28, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ----------------- ---------------
<S> <C> <C> <C>
NET ASSETS--August 31, 1996................................. $ 83,471,666 $ 508,099,794 $ 126,282,923
--------------- ----------------- ---------------
OPERATIONS:
Net investment income..................................... 2,525,129 27,216,340 10,105,993
Net realized gain (loss) on investments sold.............. 2,441 (27,824) (8,648)
--------------- ----------------- ---------------
Net increase (decrease) in net assets resulting from
operations............................................ 2,527,570 27,188,516 10,097,345
--------------- ----------------- ---------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions............................................. 292,088,302 1,552,918,166 633,698,622
Withdrawals............................................... (306,985,018) (1,611,437,731) (510,587,879)
--------------- ----------------- ---------------
Net transactions in investors' beneficial interests..... (14,896,716) (58,519,565) 123,110,743
--------------- ----------------- ---------------
Net increase (decrease) in net assets................... (12,369,146) (31,331,049) 133,208,088
--------------- ----------------- ---------------
NET ASSETS--August 31, 1997 71,102,520 476,768,745 259,491,011
--------------- ----------------- ---------------
OPERATIONS:
Net investment income..................................... 2,671,406 15,159,941 8,549,919
Net realized gain (loss) on investments sold.............. 5,849 (41,998) 3,538
--------------- ----------------- ---------------
Net increase (decrease) in net assets resulting from
operations............................................ 2,677,255 15,117,943 8,553,457
--------------- ----------------- ---------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions............................................. 235,362,177 876,396,178 479,088,723
Withdrawals............................................... (140,958,726) (765,080,736) (355,325,672)
--------------- ----------------- ---------------
Net transactions in investors' beneficial interests..... 94,403,451 111,315,442 123,763,051
--------------- ----------------- ---------------
Net increase (decrease) in net assets................... 97,080,706 126,433,385 132,316,508
--------------- ----------------- ---------------
NET ASSETS--February 28, 1998 (Unaudited)................... $ 168,183,226 $ 603,202,130 $ 391,807,519
--------------- ----------------- ---------------
--------------- ----------------- ---------------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
CORE TRUST (DELAWARE)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF ORGANIZATION
Core Trust (Delaware) ("Core Trust") was organized 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 21 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 require 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.
The following represent significant accounting policies of the Portfolios:
PORTFOLIO VALUATION-Each Portfolio's net asset value per share is calculated on
each business day utilizing the amortized cost method pursuant to Rule 2a-7
under the Act. Net asset value per share is calculated at 1:00 p.m., Pacific
Time. 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. In the event of default, the Portfolio could
possibly have difficulties with the disposition of the underlying 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-Investment
securities transactions are recorded on trade date. Interest income is accrued
as earned. 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, 1998 is the same as for financial accounting purposes.
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER-The investment adviser for each Portfolio is Forum Investment
Advisors, LLC ("Forum Advisors"). Prior to January 2, 1998, Linden Asset
Management, Inc. served as investment adviser to
16
<PAGE>
CORE TRUST (DELAWARE)
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NOTES TO FINANCIAL STATEMENTS (continued)
FEBRUARY 28, 1998 (Unaudited)
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Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio. Effective
January 2, 1998, Forum Advisors, Inc. reorganized as Forum Advisors. Forum
Advisors receives an advisory fee from each Portfolio based upon the total
average daily net assets of the Portfolios ("Total Portfolio Assets") that is
calculated on a cumulative basis at the following annual rates: 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.
ADMINISTRATOR-The administrator of each Portfolio is Forum Administrative
Services, LLC ("Forum"). 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 are charged to the Portfolios by Forum. For the period ended February
28, 1998, the respective amounts charged to Treasury Cash Portfolio, Government
Cash Portfolio and Cash Portfolio were $48, $319 and $162.
OTHER SERVICE PROVIDERS-Forum Accounting Services, LLC ("FAcS") serves as the
Portfolios' fund accountant and interestholder recordkeeper. For these services
FAcS receives a fee from each Portfolio of the lesser of an annual rate of 0.05%
of the average daily net assets of the Portfolio or $48,000 per year, plus
additional amounts depending on the number and type of portfolio transactions
and number of interest holders.
PLACEMENT AGENT-Forum Financial Services, Inc. ("FFSI"), a registered
broker-dealer and a member of the National Association of Securities Dealers,
Inc., acts as each Portfolio's placement agent.
NOTE 4. WAIVER OF FEES
For the six months ended February 28, 1998, Forum voluntarily waived
administration fees for Treasury Cash Portfolio in the amount of $10,258.
NOTE 5. INCOME AND EXPENSE RATIOS
Portfolio income and expense ratios for the six months ended February 28, 1998
and previous fiscal periods are presented below. During certain periods, various
fees were waived and expenses reimbursed. The ratio of Gross Expenses to Average
Net Assets reflects the expense ratio excluding waivers and reimbursements, if
any.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
-------------------------------------
NET
INVESTMENT GROSS
EXPENSES INCOME EXPENSES
----------- ----------- -----------
<S> <C> <C> <C>
Treasury Cash Portfolio
Period Ended February 28, 1998 (a)............................................ 0.15% 5.34% 0.17%
Year Ended August 31, 1997.................................................... 0.15% 5.20% 0.18%
Year Ended August 31, 1996.................................................... 0.15% 5.30% 0.20%
Government Cash Portfolio
Period Ended February 28, 1998 (a)............................................ 0.14% 5.55% 0.14%
Year Ended August 31, 1997.................................................... 0.14% 5.38% 0.14%
Year Ended August 31, 1996.................................................... 0.14% 5.49% 0.14%
Cash Portfolio
Period Ended February 28, 1998 (a)............................................ 0.15% 5.59% 0.15%
Year Ended August 31, 1997.................................................... 0.15% 5.45% 0.15%
Year Ended August 31, 1996.................................................... 0.15% 5.50% 0.16%
(a) Annualized.
</TABLE>
17
<PAGE>
CORE TRUST (DELAWARE)
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NOTES TO FINANCIAL STATEMENTS (concluded)
FEBRUARY 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 6. SPECIAL MEETING OF INTERESTHOLDERS
The following matter was submitted to a vote of interestholders of Treasury Cash
Portfolio, Government Cash Portfolio and Cash Portfolio at a special meeting
held December 12, 1997 and then continued on December 18, 1997: to approve a new
Investment Advisory Agreement between Core Trust and Forum Advisors with respect
to Treasury Cash Portfolio, Government Cash Portfolio and Cash Portfolio.
Interests in each of the Portfolios were voted as follows: Treasury Cash
Portfolio - 99.63% For; 0.37% Against; 0.00% Abstained; Government Cash
Portfolio - 99.00% For; 1.00% Against; 0.00% Abstained; Cash Portfolio - 96.45%
For; 3.55% Against; 0.00% Abstained.
18
