MONARCH FUNDS, 485APOS, 1998-02-23

MONARCH FUNDS
485APOS, 1998-02-23

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As filed with the Securities and Exchange Commission on February 23, 1998

File No. 33-49570
File No. 811-6742

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 16
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 17

MONARCH FUNDS
(Exact Name of Registrant as Specified in its Charter)

Two Portland Square, Portland, Maine 04101
(Address of Principal Executive Office)

Registrant's Telephone Number, including Area Code: 207-879-1900

David I. Goldstein, Esq.
Forum Financial Services, Inc.
Two Portland Square, Portland, Maine 04101
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

_____ immediately upon filing pursuant to Rule 485, paragraph (b)
_____ on [ ] pursuant to Rule 485, paragraph (b)
_____ 60 days after filing pursuant to Rule 485, paragraph (a)(i)
_____ on [ ] pursuant to Rule 485, paragraph (a)(i)
__X__ 75 days after filing pursuant to Rule 485, paragraph (a)(ii)
_____ on [ ] pursuant to Rule 485, paragraph (a)(ii)

_____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment

EACH FUND OF THE REGISTRANT IS CURRENTLY STRUCTURED AS A MASTER-FEEDER FUND.
THIS AMENDMENT INCLUDES A MANUALLY EXECUTED SIGNATURE PAGE FOR THE MASTER FUNDS,
EACH A SERIES OF CORE TRUST (DELAWARE).

<PAGE>

CROSS REFERENCE SHEET
(Crown Cash Fund)
<TABLE>
<S> <C> <C>
FORM N-1A LOCATION IN PROSPECTUS
ITEM NO. (CAPTION)
- ---------- ------------------------
PART A

Item 1. Cover Page Cover Page

Item 2. Synopsis Fund Expenses

Item 3. Condensed Financial Financial Highlights; Other Information
Information

Item 4. General Description of Registrant Cover Page, Investment Objective and Policies;
Other Information

Item 5. Management of the Fund Management

Item 5A. Management's Discussion of Not Applicable
Fund Performance

Item 6. Capital Stock and Investment Objective and Policies;
Other Securities Distributions and Tax Matters; Other Information;
Purchases and Redemptions of Shares

Item 7. Purchase of Securities Purchases and redemptions of Shares; Other
Being Offered Information; Management

Item 8. Redemption or Repurchase Purchases and Redemptions of Shares

Item 9. Pending Legal Proceedings Not Applicable

</TABLE>

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<PAGE>

CROSS REFERENCE SHEET
(Crown Cash Fund)
<TABLE>
<S> <C> <C>
LOCATION IN STATEMENT
FORM N-1A OF ADDITIONAL INFORMATION
ITEM NO. (CAPTION)
- --------- --------------------------
PART B

Item 10. Cover Page Cover Page

Item 11. Table of Contents Cover Page

Item 12. General Information and History Management

Item 13. Investment Objectives and Policies Investment Policies; Investment Limitations

Item 14. Management of the Fund Management; Other Information

Item 15. Control Persons and Principal Management; Other Information
Holders of Securities

Item 16. Investment Advisory and Other Management; Other Information
Services

Item 17. Brokerage Allocation Portfolio Transactions
and Other Practices

Item 18. Capital Stock and Other Securities Other Information

Item 19. Purchase, Redemption and Pricing Other Information; Additional Purchase
of Securities Being Offered and Redemption Information

Item 20. Tax Status Taxation

Item 21. Underwriters Management

Item 22. Calculation of Performance Data Performance Data

Item 23. Financial Statements Financial Statements
</TABLE>

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<PAGE>

CROWN CASH FUND

PROSPECTUS
MAY __, 1998

This Prospectus offers shares of Crown Cash Fund (the "Fund"). The Fund is a
diversified money market series of Monarch Funds (the "Trust"), an open-end,
management investment company. The Fund seeks to provide its shareholders with
high current income to the extent consistent with the preservation of capital
and the maintenance of liquidity. The Fund invests all of its investable assets
in Treasury Portfolio (the "Portfolio"). The Portfolio is a separate series of
Core Trust (Delaware) ("Core Trust"), an open-end, management investment
company. See "Other Information - Fund Structure." Accordingly, the Fund's
investment experience will correspond directly with that of the Portfolio.
Through the Portfolio:

Crown Cash Fund invests primarily in obligations of the U.S. Treasury
and certain agencies and instrumentalities of the U.S. Government with
a view toward providing income that is generally considered exempt from
state and local income taxes.

Shares of the Fund may only be purchased through certain financial institutions.
See "Management -- Shareholder Servicing and Distribution."

This Prospectus sets forth concisely the information concerning the Trust and
the Fund that a prospective investor should know before investing. Investors
should read this Prospectus and retain it for future reference. The Trust has
filed with the Securities and Exchange Commission ("SEC") a Statement of
Additional Information dated May __, 1998 ("SAI"), which contains more detailed
information about the Trust and the Fund and which is available together with
other related materials for reference on the SEC's Internet Web Site
(http://www.sec.gov). The SAI, which is incorporated into the Prospectus by
reference, also is available without charge by contacting the Trust's
distributor, Forum Financial Services, Inc. ("FFSI"), at Two Portland Square,
Portland, Maine 04101.

TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
PAGE PAGE
---- ----
1. Fund Expenses........................... 2 5. Purchases and Redemptions of Shares..... 6
2. Financial Highlights.................... 2 6. Distributions and Tax Matters........... 8
3. Investment Objective and Policies....... 2 7. Other Information....................... 9
4. Management.............................. 4
</TABLE>

THERE CAN BE NO ASSURANCE THAT THE 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 FDICC, THE FEDERAL RESERVE SYSTEM OR ANY
OTHER FEDERAL AGENCY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

1. FUND EXPENSES

The purpose of the following table is to assist investors in understanding the
various expenses that an investor in the Fund will bear directly or indirectly.
There are no transaction expenses associated with purchases or redemptions of
Fund shares. For a further description of the various expenses incurred in the
operation of the Fund and the Portfolio, see "Management." All information
includes the Fund's pro rata portion of the expenses of the Portfolio. "Other
Expenses" are estimated for the Fund's first fiscal year ending August 31, 1998.

ANNUAL OPERATING EXPENSES (as a percentage of average net assets.

Management Rule 12b-1 Other Total Operating
Fees (1) Fees (2) Expenses Expenses
-------- -------- -------- --------
0.20% 0.75% 0.60% 1.55%

(1) Includes all advisory and administration fees.

(2) Shareholders may pay Rule 12b-1 fees totaling in the aggregate more than the
economic equivalent of the maximum front-end sales charge permitted by the rules
of the National Association of Securities Dealers, Inc.

EXAMPLE. You would pay directly or indirectly the following expenses on a $1,000
investment in the Fund, assuming a 5% annual return and redemption at the end of
each period:

One Year Three Years Five Years Ten Years
$8 $26 $46 $103

The example is based on the expenses listed in the table above and assumes the
reinvestment of all distributions. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR RETURN.
ACTUAL EXPENSES AND RETURN MAY BE GREATER OR LESS THAN INDICATED.

2. FINANCIAL HIGHLIGHTS

As of the date hereof, the Fund had not commenced operations. Accordingly, the
Fund has no financial highlights. As of February 28, 1997, the net assets of
Treasury Portfolio was $__________.

3. INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE

The investment objective of the Fund is to provide high current income to the
extent consistent with the preservation of capital and the maintenance of
liquidity. THERE CAN BE NO ASSURANCE THAT THE FUND OR THE PORTFOLIO WILL ACHIEVE
ITS INVESTMENT OBJECTIVE OR MAINTAIN A STABLE NET ASSET VALUE.

The Fund currently seeks to achieve its investment objective by investing all of
its investable assets in the Portfolio, which has the same investment objective
and substantially similar investment policies. Therefore, although the following
discusses investment policies of the Portfolio (and the responsibilities of Core
Trust's board of trustees (the "Core Trust Board")), it applies equally to the
Fund (and the Trust's board of trustees (the "Board")).

INVESTMENT POLICIES

TREASURY PORTFOLIO. Treasury Portfolio seeks to attain its investment objective
by investing primarily in Treasury Securities. Under normal market conditions,
the Portfolio will invest at least 65% of its total assets in Treasury
Securities. The Portfolio may also invest in other U.S. Government Securities.
The Portfolio invests with a view toward providing income that is generally
considered exempt from state and local income taxes.

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<PAGE>

Among the U.S. Government Securities in which the Portfolio may invest are
obligations of the Farm Credit System, Farm Credit System Financial Assistance
Corporation, Federal Financing Bank, Federal Home Loan Banks, General Services
Administration, Student Loan Marketing Association, and Tennessee Valley
Authority. Income on these obligations and the obligations of certain other
agencies and instrumentalities is generally not subject to state and local
income taxes by Federal law. In addition, the income received by Fund
shareholders that is attributable to these investments will also be exempt in
most states from state and local income taxes. Shareholders should determine
through consultation with their own tax advisers whether and to what extent
dividends payable by the Fund from interest received with respect to its
investments will be considered to be exempt from state and local income taxes in
the shareholder's state. Shareholders similarly should determine whether the
capital gain and other income, if any, payable by the Fund will be subject to
state and local income taxes in the shareholder's state. See "Distributions and
Tax Matters."

The U.S. Government Securities in which the Portfolio may invest include
securities supported primarily or solely by the creditworthiness of the issuer.
There is no guarantee that the U.S. government will support securities not
backed by its full faith and credit. Accordingly, although these securities have
historically involved little risk of loss of principal if held to maturity, they
may involve more risk than securities backed by the U.S. government's full faith
and credit.

Although the Portfolio only invests in high quality money market instruments, an
investment in the Portfolio is subject to risk even if all securities in the
Portfolio's portfolio are paid in full at maturity. All money market
instruments, including U.S. Government Securities, can change in value when
there is a change in interest rates, the issuer's actual or perceived
creditworthiness or the issuer's ability to meet its obligations.

GENERAL. The Fund and the Portfolio operate in accordance with the provisions of
Rule 2a-7 under the Investment Company Act of 1940 (the "1940 Act"). The
Portfolio invests only in high quality, U.S. dollar-denominated short-term money
market instruments that are determined by the Adviser, pursuant to procedures
adopted by the Core Trust Board, to be eligible for purchase and to present
minimal credit risks. High quality instruments include those that (i) are rated
(or, if unrated, are issued by an issuer with comparable outstanding short-term
debt that is rated) in the highest rating category by two nationally recognized
statistical rating organizations ("NRSROs") or, if only one NRSRO has issued a
rating, by that NRSRO or (ii) are otherwise unrated and determined by the
Adviser to be of comparable quality. A description of the rating categories of
certain NRSROs, such as Standard & Poor's Corporation and Moody's Investors
Service, Inc., is contained in the SAI.

The Portfolio invests only in instruments that have a remaining maturity of 397
days or less (as calculated under Rule 2a-7 under the 1940 Act) and maintains a
dollar-weighted average portfolio maturity of 90 days or less. Except to the
limited extent permitted by Rule 2a-7 and except for U.S. Government Securities,
the Portfolio will not invest more than 5% of its total assets in the securities
of any one issuer. As used in this prospectus, "U.S. Government Securities"
means obligations issued or guaranteed as to principal and interest by the
United States Government, its agencies or instrumentalities and "Treasury
Securities" means U.S. Treasury bills and notes and other U.S. Government
Securities which are guaranteed as to principal and interest by the U.S.
Treasury.

ADDITIONAL INVESTMENT POLICIES

The Fund's and the Portfolio's investment objective and certain investment
limitations, as described in the SAI, may not be changed without approval of the
holders of a majority of the Fund's or Portfolio's, as applicable, outstanding
voting securities (as defined in the 1940 Act). Except as otherwise indicated in
this prospectus or in the SAI, investment policies of the Fund or the Portfolio
may be changed by the applicable board of trustees without shareholder approval.
The Portfolio may borrow money for temporary or emergency purposes (including
the meeting of redemption requests), but not in excess of 33 1/3% of the value
of the Portfolio's total assets. Borrowing for purposes other than meeting
redemption requests will not exceed 5% of the value of the Portfolio's total
assets. The Portfolio is permitted to hold cash in any amount pending investment
in securities and may invest in other investment companies that intend to comply
with Rule 2a-7 and have substantially similar investment objectives and
policies. To the extent the Portfolio invests in other money funds, it will
indirectly bear the expenses of those funds. A further description of the Fund's
and the Portfolio's investment policies is contained in the SAI.

5
<PAGE>

REPURCHASE AGREEMENTS. The Portfolio may seek additional income or liquidity by
entering into repurchase agreements. Repurchase agreements are transactions in
which the Portfolio purchases a security and simultaneously commits to resell
that security to the seller at an agreed-upon price on an agreed-upon future
date, normally one to seven days later. Because the income from repurchase
agreements is generally subject to state and local income taxes, the Portfolio
does not expect to enter into these investments often.

LIQUIDITY. To ensure adequate liquidity, the Portfolio may not invest more than
10% of its net assets in illiquid securities, including repurchase agreements
not entitling the Portfolio to payment of principal within seven days. There may
not be an active secondary market for securities held by the Portfolio. The
value of securities that have a limited market tend to fluctuate more than those
that have an active market. For this reason, the Portfolio could suffer a loss
with respect to such securities. The Adviser monitors the liquidity of the
Portfolio's investments, but there can be no guarantee that an active secondary
market will exist.

WHEN-ISSUED SECURITIES. In order to assure itself of being able to obtain
securities at prices which the Adviser believes might not be available at a
future time, the Portfolio may purchase securities on a when-issued or delayed
delivery basis. Securities so purchased are subject to market price fluctuation
and no interest on the securities accrues to the Portfolio until delivery and
payment take place. Accordingly, the value of the securities on the delivery
date may be more or less than the purchase price. Commitments for when-issued or
delayed delivery transactions will be entered into only when the Portfolio has
the intention of actually acquiring the securities. Failure by the other party
to deliver a security purchased by the Portfolio may result in a loss or missed
opportunity to make an alternative investment.

VARIABLE AND FLOATING RATE SECURITIES. The securities in which the Portfolio
invests may have variable or floating rates of interest. These securities pay
interest at rates that are adjusted periodically according to a specified
formula, usually with reference to some interest rate index or market interest
rate. The interest paid on these securities is a function primarily of the index
or market rate upon which the interest rate adjustments are based. Securities
with ultimate maturities of greater than 397 days may be purchased only in
accordance with the provisions to Rule 2a-7. Under that Rule, only those
long-term instruments that have demand features that comply with certain
requirements and certain long-term U.S. Government Securities may be purchased.
Similar to fixed rate debt instruments, variable and floating rate instruments
are subject to changes in value based on changes in market interest rates or
changes in the issuer's creditworthiness.

The Portfolio may not purchase a variable or floating rate security whose
interest rate is adjusted based on a long-term interest rate or index, on more
than one interest rate or index, or on an interest rate or index that materially
lags short-term market rates (these prohibited securities are often referred to
as "derivative" securities). All variable and floating rate securities purchased
by the Portfolio will have an interest rate that is adjusted based on a single
short-term rate or index, such as the Prime Rate.

4. MANAGEMENT

The business of the Trust is managed under the direction of the Board and the
business of Core Trust is managed under the direction of the Core Trust Board.
The Board formulates the general policies of the Fund and meets periodically to
review the results of the Fund, monitor investment activities and practices and
discuss other matters affecting the Fund and the Trust. The SAI contains general
background information about the trustees and officers of the Trust and of Core
Trust.

INVESTMENT ADVISER AND ADMINISTRATION

Subject to the general supervision of the Core Trust Board, Forum Investment
Advisors, LLC (the "Adviser") makes investment decisions for the Portfolio and
monitors the Portfolio's investments. In addition to the Portfolio, the Adviser
currently provides investment advisory services to ten other mutual funds,
including four other money market funds. Under supervision of the Adviser, Mr.
Anthony R. Fischer, Jr. acts as each Portfolio's portfolio

6
<PAGE>

manager pursuant to a consulting agreement with the Adviser. For its services,
the Adviser receives from the Portfolio a fee at an annual rate of 0.05% of the
Portfolio's daily net assets.

Forum Administrative Services, LLC ("Forum") supervises the overall management
of the Trust, including overseeing the Trust's receipt of services, advising the
Trust and the Trustees on matters concerning the Trust and its affairs, and
providing the Trust with general office facilities and certain persons to serve
as officers. For these services and facilities, Forum receives a fee at an
annual rate of 0.10% of the Fund's average daily net assets. Forum also serves
as administrator of Core Trust and provides administrative services for the
Portfolio that are similar to those provided to the Fund. For its administrative
services to the Portfolio, Forum receives a fee at an annual rate of 0.05% of
the Portfolio's average daily net assets. An affiliate of Forum provides certain
interestholder recordkeeping and portfolio accounting services to the Portfolio
and is compensated $48,000 per year plus certain additional fees depending on
the number of investors in the Portfolio and the investments made by the
Portfolio.

As of the date hereof Forum and its affiliates acted as administrator and
distributor of registered investment companies with assets of approximately $34
billion. As of the date of this Prospectus, Forum, FFSI, the Adviser and the
Trust's transfer agent were each directly controlled by John Y. Keffer, an
officer and Trustee of the Trust and of Core Trust. Each of these companies is
located at Two Portland Square, Portland, Maine 04101.

SHAREHOLDER SERVICING AND DISTRIBUTION

TRANSFER AND DIVIDEND DISBURSING AGENT. Forum Shareholder Services, LLC (the
"Transfer Agent"), a registered transfer agent, is the Fund's transfer agent and
dividend disbursing agent. The Transfer Agent maintains an account for each
shareholder of the Fund (unless such accounts are maintained by sub-transfer
agents or processing agents) and performs other transfer agency and related
functions.

The Transfer Agent is authorized to subcontract any or all of its functions to
one or more qualified sub-transfer agents or processing agents, which may be its
affiliates, who agree to comply with the terms of the Transfer Agent's agreement
with the Trust. The Transfer Agent may pay those agents for their services, but
no such payment will increase the Transfer Agent's compensation from the Trust.
For its services, the Transfer Agent is paid a transfer agent fee at an annual
rate of 0.20% of the Fund's average daily net assets plus $12,000 per year and
is reimbursed for certain expenses incurred on behalf of the Fund.

PARTICIPATING ORGANIZATIONS. The Trust has entered into a shareholder service
and distribution plan (the "Plan") with Forum which provides that, as
compensation for Forum's shareholder service and distribution activities, the
Trust shall pay Forum a fee at an annual rate of 1.00% of the Fund's average
daily net assets. Forum is authorized to enter into service agreements pursuant
to which a financial intermediary such as a bank (a "Participating
Organization"), on behalf of its customers, performs the services described in
the Plan. As compensation for its services, the Participating Organization is
paid a fee by Forum of up to 1.00% of the Fund's average daily net assets owned
by customers of the Participating Organization. Certain Participating
Organizations may be sub-transfer or processing agents.

The following services are among those that Forum or a Participating
Organization provides under the Plan: (i) process unlimited drafts drawn against
customers' Fund accounts, (ii) permit investors to open and maintain accounts
without any investment minimum, (ii) process purchase and redemption requests,
(iii) transfer redemption proceeds to another account at the Participating
Organization, (iv) answer customer inquiries regarding the manner in which
transactions in Fund shares may be effected and other matters pertaining to the
Fund's services; (v) provide necessary personnel and facilities to establish and
maintain shareholder accounts and records; (vi) inform shareholders and
potential shareholders of the attributes of the Fund and how these attributes
may be used. These services are provided by a Participating Organization without
the imposition of any additional fees on the shareholder (other than overdraft
and similar fees).

DISTRIBUTION. FFSI, a registered broker-dealer and member of the National
Association of Securities Dealers, Inc., serves as the Fund's distributor. FFSI
acts as the agent of the Trust in connection with the offering of shares of the

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Fund. In order to facilitate the distribution of Fund shares and compensate
Participating Organizations for their distribution efforts, 0.75% of the Fund's
average daily net assets paid under the Plan is paid to Forum pursuant to Rule
12b-1 under the 1940 Act. This payment is commonly referred to as a
"distribution fee." If the expenses of Forum in carrying out its duties under
the Plan exceed the fees paid under the Plan, the Fund will not be obligated to
pay Forum an additional amount; if Forum's expenses are less than the fees paid
under the Plan, Forum will realize a profit. A similar analyses applies to each
of the Fund's and Portfolio's service providers in connection with their
respective fees.

EXPENSES

The Fund bears all of its expenses, which include Trust expenses attributable to
the Fund, which are allocated to the Fund, and expenses not specifically
attributable to any fund of the Trust , which are allocated among the Fund and
other funds of the Trust in proportion to their average net assets. Each service
provider may elect to waive (or continue to waive) all or a portion of its fees
and may reimburse the Fund for certain expenses. Any such waivers or
reimbursements will have the effect of increasing the Fund's performance for the
period during which the waiver or reimbursement is in effect. No fee waivers may
be recouped at a later date.

Total operating expenses of the Fund are higher than most other money market
funds due to the nature of the shareholder and distribution services provided
under the Plan. The Fund's expenses include insurance premiums for the Trust,
its Trustees and officers and fidelity bond premiums; fees of the Adviser,
Forum, the Transfer Agent and fees of the Fund's or Portfolio's other service
providers (such as lawyers, auditors and custodians); costs of preparing and
printing the fund's prospectus, SAI and shareholder reports and delivering them
to existing shareholders; expenses of meetings of shareholders; fees and
expenses of the Trust's Trustees and officers; and Federal and state
registration fees and related expenses.

5. PURCHASES AND REDEMPTIONS OF SHARES

GENERAL PURCHASE INFORMATION

All transactions in Fund shares are effected through the Transfer Agent, which
accepts orders for purchases only from Participating Organizations. There is no
minimum initial investment or minimum subsequent investment. Shareholders of
record will receive from the Trust monthly statements listing all account
activity during the statement period. The Trust reserves the right in the future
to modify, limit or terminate any shareholder privilege upon appropriate notice.
No share certificates are issued by the Fund.

Fund shares are sold on a continuous basis at their next determined net asset
value on all Fund Business Days. Fund shares are issued immediately following
the next determination of the Fund's net asset value made after an order for the
shares in proper form is received by the Transfer Agent from a Participating
Organization. The Trust reserves the right to reject any subscription for the
purchase of Fund shares.

Purchase orders will be accepted on Fund Business Days until 3:00 p.m., Pacific
time. In order to receive distributions for the day of investment, orders must
be received by the Transfer Agent by [9:00 a.m.], Pacific time. If a purchase
order is transmitted to the Transfer Agent after [9:00 a.m.], Pacific time, the
investor will not receive a distribution on that day. On days that the New York
Stock Exchange or Boston Federal Reserve Bank closes early or the Public
Securities Association recommends that the government securities markets close
early, the Trust may advance the time by which the Transfer Agent must receive
completed purchase orders and the cut-off time described above.

GENERAL REDEMPTION INFORMATION

Fund shares may be redeemed without charge at their next determined net asset
value on any Fund Business Day following acceptance by the Transfer Agent of the
redemption order in proper form (and any supporting documentation which the
Transfer Agent may require) from a Participating Organization. There is no
minimum period of investment and no restriction on the frequency of redemptions.
The right of redemption may not be

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suspended nor the payment dates postponed except when the New York Stock
Exchange is closed (or when trading thereon is restricted) for any reason other
than its customary weekend or holiday closings or under any emergency or other
circumstance as determined by the SEC.

Redemption proceeds to the Fund from the Portfolio may be made wholly or
partially in portfolio securities if the Adviser determines it to be in the best
interests of the Portfolio. Similarly, redemption proceeds from the Fund may be
made wholly or partially in portfolio securities if it is determined to be in
the best interests of the Fund.

Redemption orders will be accepted on Fund Business Days until 3:00 p.m.,
Pacific time. In order to receive redemption proceeds by wire that day, a
redemption order must be received by the Transfer Agent by [9:00 a.m.], Pacific
time. For redemption orders received after [9:00 a.m.], Pacific time, the
Transfer Agent will wire proceeds to the Participating Organization the next
Fund Business Day. On days that the New York Stock Exchange or Boston Federal
Reserve Bank closes early or the Public Securities Association recommends that
the government securities markets close early, the Trust may advance the time by
which the Transfer Agent must receive completed redemption orders in order for
the Participating Organization to receive redemption proceeds by wire that day.

PURCHASE AND REDEMPTION PROCEDURES

PARTICIPATING ORGANIZATIONS. As noted above, Fund shares only may be purchased
and redeemed through certain financial intermediaries, such as banks. These
Participating Organizations may act as processing agents or sub-transfer agents.
Investors should obtain the materials necessary to open an account from their
Participating Organization. All investments in the Fund must be made by
Participating Organizations using the Federal wire system for transmittal of
money among banks. Redemption proceeds are paid to the applicable Participating
Organization using the Federal wire system for transmittal of money among banks
immediately following any redemption. Participating Organizations are
responsible for promptly transmitting purchase, redemption and other requests to
the Fund.

Investors are subject to the procedures of their Participating Organization.
These procedures will not include any investment minimum or any cutoff time
different than described in this Prospectus. These procedures, however, may
include other restrictions in addition to, or different from, those described in
this Prospectus. Investors should read this Prospectus in conjunction with any
materials and information provided by their Participating Organization. No
Participating Organization may charge any purchase or redemption fee or any fee
in connection with draft writing privileges (other than overdraft and similar
fees). Investors may or may not be the shareholder of record.

CHECK WRITING PRIVILEGES. Shareholders who may elect check writing privileges
through their participating Organization. Shareholders will be provided with
redemption drafts ("checks") drawn on either the Fund's or the shareholder's
Participating Organization's account. When a check is presented for payment, the
number of shares required to cover the amount of the check will be redeemed from
the shareholder's account. If the amount of a check is greater than the value of
the shares owned by the shareholder, the check will not be honored. Shareholders
will be subject to the Trust's and their Participating Organization's rules and
regulations governing the check writing privilege, as amended from time to time.
There is no fees for writing checks (other than overdraft and similar fees) and
no minimum check amount.

6. DISTRIBUTIONS AND TAX MATTERS

DISTRIBUTIONS

Distributions of the Fund's net investment income are declared daily and paid
monthly following the close of the last Fund Business Day of the month. Net
capital gain realized by the Fund, if any, will be distributed annually. Fund
shares become entitled to receive distributions on the day the shares are issued
as described under "Purchases of Shares - General Information." Shares redeemed
are not entitled to receive distributions declared on or after the day on which
the redemption becomes effective. All distributions are reinvested in additional
Fund shares.

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TAX MATTERS

TAXATION OF THE FUND. The Fund intends to continue to qualify to be taxed as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended. Accordingly, the Fund will not be liable for Federal income taxes on
the net investment income and capital gain distributed to its shareholders.
Because the Fund intends to distribute all of its net investment income and net
capital gain each year, the Fund should also avoid Federal excise taxes.

TAXATION OF THE PORTFOLIO. The Portfolio is not required to pay Federal income
taxes on its net investment income and capital gain, as it is treated as a
partnership for Federal income tax purposes. All interest, distributions and
gains and losses of the Portfolio are deemed to be "passed through" to the Fund
in proportion to the Fund's holdings of the Portfolio, regardless of whether the
interest, distributions or gains have been distributed by the Portfolio or
losses have been realized by the Portfolio.

FEDERAL TAXATION OF SHAREHOLDERS. Distributions paid by the Fund out of
Federally tax-exempt interest income earned by the Fund ("exempt-interest
dividends") generally will not be subject to Federal income tax in the hands of
the Fund's shareholders. Substantially all of the distributions paid by the Fund
are anticipated to be exempt-interest dividends. Persons who are "substantial
users" or "related persons" thereof of facilities financed by private activity
securities held by the Fund, however, may be subject to Federal income tax on
their pro rata share of the interest income from those securities and should
consult their tax advisers before purchasing Shares. Exempt-interest dividends
are included in the "adjusted current earnings" of corporations for purposes of
the AMT.

Distributions paid by the Fund out of its net investment income (including
realized net short-term capital gain) are taxable to the shareholders of the
Fund as ordinary income. Distributions of net capital gain, if any, realized by
the Fund are taxable to shareholders as capital gain, regardless of the length
of time the Fund shares were held by the shareholder at the time of
distribution. Different capital gain rates will apply depending on the holding
period of the securities sold by the Fund that generated the gain.

Interest on indebtedness incurred by shareholders to purchase or carry shares of
the Fund generally is not deductible for Federal income tax purposes. Under
rules for determining when borrowed funds are used for purchasing or carrying
particular assets, shares of the Fund may be considered to have been purchased
or carried with borrowed funds even though those funds are not directly linked
to the shares.

STATE TAXATION OF SHAREHOLDERS. The Fund's investment policies are structured to
provide shareholders, to the extent permissible by Federal and state law, with
income that is exempt or excluded from income taxation at the state and local
level. Most states (by statute, judicial decision or administrative action) do
not tax dividends from a regulated investment company that are attributable to
interest on obligations of the U.S. Treasury and certain U.S. Government
agencies and instrumentalities if the interest on those obligations would not be
taxable to a shareholder that held the obligation directly. As a result,
substantially all distributions paid by the Fund to shareholders will be exempt
or excluded from state income taxes.

Shareholders are advised to consult with their tax advisers concerning the
application of state and local taxes to investments in a Fund which may differ
from the Federal income tax consequences.

GENERAL. The Fund is required by Federal law to withhold 31% of reportable
payments (which may include income and capital gain distributions) paid to a
non-corporate shareholder unless that shareholder certifies in writing that the
social security or other tax identification number provided is correct and that
the shareholder is not subject to backup withholding.

Shortly after the close of each year, a statement is sent to each shareholder of
the Fund advising the shareholder of the portions of total distributions paid to
the shareholder that is derived from each type of obligation in which the Fund
has invested. These portions are determined for the entire year and on a monthly
basis and, thus, are an annual or monthly average, rather than a day-by-day
determination for each shareholder.

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The foregoing is only a summary of some of the important Federal and state tax
considerations generally affecting the Fund and its shareholders. There may be
other Federal, state or local tax considerations applicable to a particular
investor. Prospective investors are urged to consult their tax advisors.

7. OTHER INFORMATION

FUND PERFORMANCE

The Fund's performance may be advertised. All performance information is based
on historical results, is not intended to indicate future performance and,
unless otherwise indicated, is net of all expenses. The Fund may advertise
yield, which shows the rate of income the Fund has earned on its investments as
a percentage of the Fund's share price. To calculate yield, the Fund takes the
interest income it earned from its portfolio of investments for a specified
period (net of expenses), divides it by the average number of shares entitled to
receive distributions, and expresses the result as an annualized percentage rate
based on the Fund's share price at the end of the period. The Fund's compounded
annualized yield assumes the reinvestment of distributions paid by the Fund,
and, therefore will be somewhat higher than the annualized yield for the same
period. The Fund's performance will vary. The Fund's advertisements may also
reference ratings and rankings among similar funds by independent evaluators
such as Morningstar, Lipper Analytical Services, Inc. or IBC Financial Data,
Inc. In addition, the performance of the Fund may be compared to recognized
indices of market performance. The comparative material found in the Fund's
advertisements, sales literature, or reports to shareholders may contain
performance rankings. This material is not to be considered representative or
indicative of future performance.

DETERMINATION OF NET ASSET VALUE

The Trust determines the net asset value per share of the Fund as of 1:00 p.m.,
Pacific time, on each Fund Business Day. Net asset value per share is determined
by dividing the value of the Fund's net assets (the value of its interest in the
Portfolio and other assets less its liabilities) by the number of shares
outstanding at the time the determination is made. In order to more easily
maintain a stable net asset value per share, the Portfolio's portfolio
securities are valued at their amortized cost (acquisition cost adjusted for
amortization of premium or accretion of discount) in accordance with Rule 2a-7.
The Portfolio will only value its portfolio securities using this method if the
Core Trust Board believes that it fairly reflects the market-based net asset
value per share. The Portfolio's other assets, if any, are valued at fair value
by or under the direction of the Core Trust Board.

THE TRUST AND ITS SHARES

The Trust is registered with the SEC as an open-end, management investment
company and was organized as a Delaware business trust on July 10, 1992. The
Board has the authority to issue an unlimited number of shares of beneficial
interest of separate series with no par value per share and to create classes of
shares within each series. Besides the Fund, three other series of shares are
currently authorized.

As of the date hereof, by virtue of its initial investment in the Fund Forum may
be deemed to be controlling persons of the Fund. From time to time various
shareholders may own a large percentage of the Fund's shares. These shareholders
may become controlling persons of the Fund or the Trust, and may be able to
greatly affect (if not determine) the outcome of any shareholder vote.

Shares issued by the Trust have no conversion, subscription or preemptive
rights. Voting rights are not cumulative and the shares of each series of the
Trust will be voted separately except when an aggregate vote is required by law.
The Trust is not required to hold annual meetings of shareholders, and it is
anticipated that shareholder meetings will be held only when specifically
required by law. Shareholders have available procedures for requiring the
Trustees to call a meeting and for removing Trustees.

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FUND STRUCTURE

CORE TRUST STRUCTURE. The Fund invests all of its assets in the Portfolio, which
is a series of Core Trust. Core Trust is a business trust organized under the
laws of the State of Delaware in September 1994 and registered under the 1940
Act as an open-end, management investment company. Accordingly, the Portfolio
directly acquires its own securities and the Fund acquires an indirect interest
in those securities. The assets of the Portfolio belong only to, and the
liabilities of the Portfolio are borne solely by, the Portfolio and no other
portfolio of Core Trust. Upon liquidation of the Portfolio, investors in the
Portfolio would be entitled to share pro rata in the net assets of the Portfolio
available for distribution to investors.

THE PORTFOLIO. The Fund's investment in the Portfolio is in the form of a
non-transferable beneficial interest. As of the date of this Prospectus, besides
the Fund, Daily Assets Treasury Fund, another investment company, invests in the
Portfolio. All investors in the Portfolio will invest on the same terms and
conditions as the Fund and will pay a proportionate share of the Portfolio's
expenses. The Portfolios normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in the Portfolio will be entitled to
vote in proportion to the relative value of its interest in the Portfolio. On
most issues subject to a vote of investors, as required by the 1940 Act and
other applicable law, the Fund will solicit proxies from its shareholders and
will vote its interest in the Portfolio in proportion to the votes cast by its
shareholders. There can be no assurance that any issue that receives a majority
of the votes cast by the Fund's shareholders will receive a majority of votes
cast by all investors in the Portfolio.

CONSIDERATIONS OF INVESTING IN THE PORTFOLIO. The Fund's investment in the
Portfolio may be affected by the actions of other investors in the Portfolio.
For example, if other investors redeemed their interest in the Portfolio, the
Portfolio's remaining investors (including the Fund) might, as a result,
experience higher pro rata operating expenses. The Fund may withdraw its entire
investment from the Portfolio at any time if the Board determines that it is in
the best interests of the Fund and its shareholders to do so. The Fund might
withdraw, for example, if other investors in the Portfolio, by a vote of
shareholders, changed the investment objective or policies of the Portfolio in a
manner not acceptable to the Board or not permissible by the Fund. A withdrawal
could result in a distribution in kind of portfolio securities (as opposed to a
cash distribution) by the Portfolio. That distribution could result in a less
diversified portfolio of investments for the Fund, resulting in increased risk,
and could affect adversely the liquidity of the Fund's portfolio. If the Fund
decided to convert those securities to cash, it would incur transaction costs.
If the Fund withdrew its investment from the Portfolio, the Board would consider
what action might be taken, including the management of the Fund's assets in
accordance with its investment objective and policies by the Adviser or the
investment of all of the Fund's investable assets in another pooled investment
entity having substantially the same investment objective as the Fund.

ADDITIONAL INFORMATION. Any other investment company that invests in the
Portfolio may have a different expense ratio and different sales charges,
including distribution fees, and each investment company's performance will be
affected by its expenses and sales charges. For more information on any other
investment companies that invest in the Portfolio, investors may contact FFSI at
800-754-8757. An investor may also contact their Participating Organization to
obtain information about any other investment company investing in the
Portfolio.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE SAI AND THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFERING OF THE FUND'S
SHARES, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER
MAY NOT LAWFULLY BE MADE.

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CROWN CASH FUND

STATEMENT OF ADDITIONAL INFORMATION
MAY __, 1998

This Statement of Additional Information supplements the Prospectus (dated May
__, 1998) offering shares of Crown Cash Fund, a portfolio of the Trust, and
should be read only in conjunction with the Prospectus, a copy of which may be
obtained without charge by contacting the Trust at P.O. Box 446, Portland, Maine
04101.

TABLE OF CONTENTS

Page
----

1. Investment Policies 2
2. Investment Limitations 6
3. Performance Data and Advertising 9
4. Management 11
5. Portfolio Transactions 18
6. Additional Purchase and Redemption Information 19
7. Taxation 20
8. Other Information 20
9. Financial Statements 23

Appendix A - Description of Certain Securities Ratings A-1
Appendix B - Performance Information B-1
Appendix C - Miscellaneous Tables C-1

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DEFINITIONS

As used in this Statement of Additional Information, the following terms shall
have the meanings listed:

"Adviser" means Forum Investment Advisors, LLC.

"Board" means the Board of Trustees of the Trust.

"Core Trust" means Core Trust (Delaware).

"Core Trust Board" means the Board of Trustees of Core Trust.

"FFSI" means Forum Financial Services, Inc.

"Forum" means Forum Administrative Services, LLC.

"Forum Accounting" means Forum Accounting Services, LLC.

"Fund" means Crown Cash Fund.

"Fund Business Day" shall have the meaning ascribed thereto in the
Prospectus of the Fund.

"NRSRO" means a nationally recognized statistical rating organization.

"Participating Organization" shall have the meaning ascribed thereto in
the Prospectus of the Fund.

"Plan" means the Shareholder Service and Distribution Plan relating to
the Fund.

"Portfolio" means Treasury Portfolio.

"SAI" means this Statement of Additional Information.

"SEC" means the U.S. Securities and Exchange Commission.

"Transfer Agent" means Forum Shareholder Services, LLC.

"Trust" means Monarch Funds.

"U.S. Government Securities" shall have the meaning ascribed thereto in
the Prospectus of the Fund.

"1940 Act" means the Investment Company Act of 1940, as amended.

1. INVESTMENT POLICIES

The Fund currently seeks to achieve its investment objective by investing all of
its investable assets in Treasury Portfolio of Core Trust. The Portfolio
commenced operations on December 5, 1995.

The Fund has an investment policy that allows it to invest all of its investable
assets in the Portfolio. The investment policies of the Fund and the Portfolio
are substantially identical. Therefore, although this and the following sections
discuss the investment policies of the Portfolio (and the responsibilities of
the Core Trust Board), it applies equally to the Fund (and the Board).

Following is information pertaining to the investment policies of the Portfolio,
which supplements the investment policy information contained in the Fund's
Prospectus.

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<PAGE>

Debt securities with longer maturities tend to produce higher yields and are
generally subject to greater price movements than obligations with shorter
maturities. An increase in interest rates will generally reduce the market value
of portfolio investments, and a decline in interest rates will generally
increase the value of portfolio investments.

The Portfolio invests at least 95% of its total assets in securities in the
highest rating category (as determined pursuant to Rule 2a-7 under the 1940
Act).

The Portfolio will purchase a U.S. Government Security (other than a Treasury
Security) only if that security has a remaining maturity of thirteen months or
less.

RATINGS AS INVESTMENT CRITERIA

Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation
("S&P") and other NRSROs are private services that provide ratings of the credit
quality of debt obligations. A description of the higher quality ratings
assigned to debt securities by several NRSROs is included in Appendix A to this
SAI. The Portfolio uses these ratings in determining whether to purchase, sell
or hold a security. It should be emphasized, however, that ratings are general
and not absolute standards of quality. Consequently, securities with the same
maturity, interest rate and rating may have different market prices. Subsequent
to its purchase by the Portfolio, an issue of securities may cease to be rated
or its rating may be reduced. The Adviser, and in certain cases the Core Trust
Board, will consider such an event in determining whether the Portfolio should
continue to hold the obligation. Credit ratings attempt to evaluate the safety
of principal and interest payments and do not evaluate the risks of fluctuations
in market value. Also, rating agencies may fail to make timely changes in credit
ratings in response to developments and events, so that an issuer's current
financial condition may be better or worse than the rating indicates.

MORTGAGE BACKED SECURITIES

The Portfolios may purchase adjustable rate mortgage backed or other asset
backed securities that are U.S. Government Securities. These securities directly
or indirectly represent a participation in, or are secured by and payable from,
adjustable rate mortgage or other loans which may be secured by real estate or
other assets. Unlike traditional debt instruments, payments on these securities
include both interest and a partial payment of principal. Prepayments of the
principal of underlying loans may shorten the effective maturities of these
securities. Some adjustable rate U.S. Government Securities (or the underlying
loans) are subject to caps or floors that limit the maximum change in interest
rate during a specified period or over the life of the security.

Adjustable rate mortgage backed securities ("MBSs") are securities that have
interest rates that are reset at periodic intervals, usually by reference to
some interest rate index or market interest rate. The Portfolio will only invest
in adjustable rate MBSs that are U.S. Government Securities. MBSs represent an
interest in a pool of mortgages made by lenders such as commercial banks,
savings associations, mortgage bankers and mortgage brokers and may be issued by
governmental or government-related entities or by non-governmental entities such
as commercial banks, savings associations, mortgage bankers and other secondary
market issuers.

Interests in pools of MBSs differ from other forms of debt securities which
normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. In contrast, MBSs
provide periodic payments which consist of interest and, in most cases,
principal. In effect, these payments are a "pass-through" of the periodic
payments and optional prepayments made by the individual borrowers on their
mortgage loans, net of any fees paid to the issuer or guarantor of such
securities. Additional payments to holders of MBSs are caused by prepayments
resulting from the sale of the underlying property or the refinancing or
foreclosure of the underlying mortgage loans. Such prepayments may significantly
shorten the effective maturities of MBSs, and occur more often during periods of
declining interest rates.

Although the rate adjustment feature of MBSs may act as a buffer to reduce sharp
changes in the value of MBSs, these securities are still subject to changes in
value based on changes in market interest rates or changes in the

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<PAGE>

issuer's creditworthiness. Because the interest rate is reset only periodically,
changes in the interest rate on MBSs may lag behind changes prevailing market
interest rates. Also, some MBSs (or the underlying mortgages) are subject to
caps or floors that limit the maximum change in interest rate during a specified
period or over the life of the security.

During the periods of declining interest rates, income to the Portfolio derived
from mortgages which are not prepared will decrease as the coupon rate resets
along with the decline in interest rates in contrast to the income on fixed-rate
mortgages, which will remain constant. At times, some of the MBSs in which the
Portfolio will invest will have higher-than-market interest rates, and will
therefore be purchased at a premium above their par value. Unscheduled
prepayments, which are made at par, will cause the Portfolio to suffer a loss
equal to the unamortized premium, if any.

During periods of rising interest rates, changes in the coupon rates of the
mortgages underlying the Portfolio's investments may lag behind changes in
market interest rates. This may result in a slightly lower value until the
coupons reset to market rates. Many MBSs in the Portfolio's portfolios will have
"caps" that limit the maximum amount by which the interest rate paid by the
borrower may change at each reset date or over the life of the loan and
fluctuation in interest rates above these levels could cause these securities to
"cap out" and to behave more like fixed-rate debt securities.

The Portfolio may purchase collateralized mortgage obligations ("CMOs"), which
are collateralized by MBSs or by pools of conventional mortgages. CMOs are
typically structured with a number of classes or series that have different
maturities and are generally retired in sequence. Each class of bonds receives
periodic interest payments according to the coupon rate on the bonds. However,
all monthly principal payments and any prepayments from the collateral pool are
paid first to the "Class I" bondholders. The principal payments are such that
the Class 1 bonds will be completely repaid no later than, for example, five
years after the offering date. Thereafter, all payments of principal are
allocated to the next most senior class of bonds until that class of bonds has
been fully repaid. Although full payoff of each class of bonds is contractually
required by a certain date, any or all classes of bonds may be paid off sooner
than expected because of an acceleration in pre-payments of the obligations
comprising the collateral pool.

Since the inception of the mortgage-related pass-through security in 1970, the
market for these securities has expanded considerably. The size of the primary
issuance market and active participation in the secondary market by securities
dealers and many types of investors make government and government-related
pass-through pools highly liquid.

Government or private entities may create new types of MBSs in response to
changes in the market or changes in government regulation of such securities. As
new types of these securities are developed and offered to investors, the
Adviser may, consistent with the investment objective and policies of the
Portfolio, consider making investments in such new types of securities.

WHEN-ISSUED SECURITIES AND DELAYED DELIVERY SECURITIES

The Portfolio may purchase securities on an when-issued or delayed delivery
basis. In those cases, the purchase price and the interest rate payable on the
securities are fixed on the transaction date and delivery and payment may take
place a month or more after the date of the transaction. At the time, the
Portfolio makes the commitment to purchase securities on a when-issued or
delayed delivery basis, the Portfolio will record the transaction as a purchase
and thereafter reflect the value each day of such securities in determining its
net asset value. If the Portfolio chooses to dispose of the right to acquire a
when-issued security prior to its acquisition, it could, as with the disposition
of any other portfolio obligation, incur a gain or loss due to market
fluctuation. Failure of an issuer to deliver the security may result in the
Portfolio incurring a loss or missing an opportunity to make an alternative
investment. When the Portfolio agrees to purchase a security on a when-issued or
delayed delivery basis, its custodian will maintain in a segregated account
cash, U.S. Government Securities or other liquid securities with a market value
at all times at least equal to the amount of the Portfolio's commitment.

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<PAGE>

ILLIQUID SECURITIES

The Portfolio may invest up to 10% of its net assets in illiquid securities. The
term "illiquid securities" for this purchase means repurchase agreements not
entitling the holder to payment of principal within seven days and securities
that are illiquid by virtue of legal or contractual restrictions on resale or
the absence of a readily available market.

The Core Trust Board has ultimate responsibility for determining whether
specific securities are liquid or illiquid. The Core Trust Board has delegated
the function of making day-to-day determination of liquidity to the Adviser and,
with respect to certain types of restricted securities which may be deemed to be
illiquid, has adopted guidelines to be followed by the Adviser. The Adviser
takes into account a number of factors in reaching liquidity decisions,
including but not limited to (1) the frequency of trades and quotations of the
security; (2) the number of dealers willing to purchase or sell the security and
the number of other potential buyers; (3) the willingness of dealers to
undertake to make a market in the security; (4) the nature of the marketplace
trades, including the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer; (5) whether the security is
registered; and (6) if the security is not traded in the United States, whether
it can be freely traded in a liquid foreign securities market. The Adviser
monitors the liquidity of the securities in the Portfolio's portfolio and
reports periodically to the Core Trust Board.

Certificates of deposit and fixed time deposits that carry an early withdrawal
penalty or mature in greater than seven days are treated by the Portfolio as
illiquid securities if there is no readily available market for the instrument.

The Portfolio is prohibited from purchasing restricted securities. See
"Investment Limitations" below.

REPURCHASE AGREEMENTS AND SECURITIES LOANS

The Portfolio may seek additional income or liquidity by entering into
repurchase agreements. Repurchase agreements are transactions in which the
Portfolio purchases a security and simultaneously commits to resell that
security to the seller at an agreed-upon price on an agreed-upon future date,
normally one to seven days later. The resale price reflects a market rate of
interest that is not related to the coupon rate or maturity of the purchased
security.

In order to obtain additional income, the Portfolio may from time to time lend
securities from its portfolio to brokers, dealers and financial institutions.
Securities loans must be callable at any time and must be continuously secured
by collateral from the borrower in the form of cash or U.S. Government
Securities. The Portfolio receives fees in respect of securities loans from the
borrower or interest from investing the cash collateral. The Portfolio may pay
fees to arrange the loans.

In connection with entering into repurchase agreements and securities loans, the
Portfolio requires continual maintenance by Core Trust's custodian of the market
value of the underlying collateral in amounts equal to, or in excess of, the
repurchase price plus the transaction costs (including loss of interest) that
the Portfolio could expect to incur upon liquidation of the collateral if the
counterparty defaults. The Portfolio's use of repurchase agreements and
securities lending entails certain risks not associated with direct investments
in securities. For instance, in the event that bankruptcy or similar proceedings
were commenced against a counterparty in these transactions or a counterparty
defaulted on its obligations, the Portfolio might suffer a loss. Failure by the
other party to deliver a security purchased by the Portfolio may result in a
missed opportunity to make an alternative investment. The Adviser monitors the
creditworthiness of counterparties to these transactions under the Core Trust
Board's general supervision and pursuant to specific Core Trust Board adopted
procedures. The Adviser intends to enter into these transactions only when it
believes that the counterparties present minimal credit risks and the income to
be earned from the transaction justifies the attendant risks.

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VARIABLE AND FLOATING RATE SECURITIES

The yield of variable and floating rate securities varies in relation to changes
in specific money market rates, such as the Prime rate. A "variable" interest
rate adjusts at predetermined intervals (for example, daily, weekly or monthly),
while a "floating" interest rate adjusts whenever a specified benchmark rate
(such as the bank prime lending rate) changes. These changes are reflected in
adjustments to the yields of the variable and floating rate securities, and
different securities may have different adjustment rates. Accordingly, as
interest rates increase or decrease, the capital appreciation or depreciation
may be less on these obligations than for fixed rates obligations. To the extent
that the Portfolio invests in long-term variable or floating rate securities,
the Adviser believes that the Portfolio may be able to take advantage of the
higher yield that is usually paid on long-term securities.

The Portfolio may not purchase a variable or floating rate security whose
interest rate is adjusted based on a long-term interest rate or index, on two
interest rates or indexes, on an interest rate or index that materially lags
short-term market rates. All variable and floating rate securities purchased by
the Portfolio have an interest rate that is adjusted based on a single
short-term rate or index, such as the Prime rate.

INVESTMENT COMPANY SECURITIES

In connection with managing its cash position, the Portfolios may invest in the
securities of other investment companies that are money market funds within the
limits proscribed by the 1940 Act. Under normal circumstances, the Portfolio
invests up to 15% of its assets in money market funds. The Portfolio only
invests in money market funds when it has excess cash and the Adviser believes
that the investment is in the best interest of the Portfolio. In addition to the
Portfolio's expenses (including the various fees), as a shareholder in another
investment company, the Portfolio bears its pro rata portion of the other
investment company's expenses (including fees). Those expenses are not part of
the Portfolio's (or Fund's) expense ratio, but rather are reflected in the yield
of the investment in the money market fund.

ZERO-COUPON SECURITIES.

The Portfolio may invest in zero-coupon securities such as Treasury bills and
separately traded principal and interest components of Treasury Securities
issued or guaranteed under the U.S. Treasury's Separate Trading of Registered
Interest and Principal of Securities ("STRIPS") program. These securities are
sold at original issue discount and pay no interest to holders prior to
maturity. Because of this, zero-coupon securities may be subject to greater
fluctuation of market value than the other securities in which the Portfolio may
invest. All zero-coupon securities in which the Portfolio invests will have a
maturity of less than 13 months.

The Portfolio (and thus the Fund) must include a portion of the original issue
discount of zero-coupon securities, if any, as income even though these
securities do not pay any interest until maturity. Because the Fund distributes
all of its net investment income, the Fund may have to sell portfolio securities
to distribute imputed income, which may occur at a time when the Adviser would
not have chosen to sell such securities and which may result in a taxable gain
or loss.

2. INVESTMENT LIMITATIONS

GENERAL

Fundamental investment limitations of the Fund or of the Portfolio cannot be
changed without the affirmative vote of the lesser of (i) more than 50% of the
outstanding interests of the respective Fund or Portfolio or (ii) 67% of the
shares of the Fund or Portfolio present or represented at a shareholders or
interestholders meeting at which the holders of more than 50% of the outstanding
interests of the Fund or Portfolio are present or represented.

Except as required by the 1940 Act, if a percentage restriction on investment or
utilization of assets is adhered to at the time an investment is made, a later
change in percentage resulting from a change in the market values of the Fund's
or the Portfolio's assets, the change in status of a security or purchases and
redemptions of shares will not be considered a violation of the limitation.

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<PAGE>

The Fund and the Portfolio have adopted a policy (fundamental in the case of the
Portfolio) which provides that, notwithstanding any other investment policy or
restriction (whether fundamental or not), the Fund or Portfolio may invest all
of its assets in the securities of a single pooled investment fund having
substantially the same investment objectives, policies and restrictions as the
Fund or Portfolio, as applicable.

FUNDAMENTAL POLICIES

The Portfolio has adopted the following fundamental investment limitations. The
Portfolio may not:

(1) With respect to 75% of its assets, purchase securities, other than U.S.
Government Securities, of any one issuer if more than 5% of the value
of the Portfolio's total assets would at the time of purchase be
invested in any one issuer.

(2) Purchase securities, other than U.S. Government Securities, if more
than 25% of the value of the Portfolio's total assets would be invested
in securities of issuers conducting their principal business activity
in the same industry, provided that consumer finance companies and
industrial finance companies are considered to be separate industries
and that there is no limit on the purchase of the securities of
domestic commercial banks.

(3) Act as an underwriter of securities of other issuers, except to the
extent that, in connection with the disposition of portfolio
securities, the Portfolio may be deemed to be an underwriter for
purposes of the Securities Act of 1933.

(4) Purchase or sell real estate or any interest therein, except that the
Portfolio may invest in debt obligations secured by real estate or
interests therein or issued by companies that invest in real estate or
interests therein.

(5) Purchase or sell physical commodities or contracts relating to physical
commodities, provided that currencies and currency-related contracts
will not be deemed to be physical commodities.

(6) Borrow money, except for temporary or emergency purposes (including the
meeting of redemption requests). Total borrowings may not exceed 33
1/3% of the Portfolio's total assets and borrowing for purposes other
than meeting redemptions may not exceed 5% of the value of each the
Portfolio's total assets. Outstanding borrowings in excess of 5% of the
value of the Portfolio's total assets must be repaid before any
subsequent investments are made by the Portfolio.

(7) Issue senior securities except pursuant to Section 18 of the 1940 Act
and except that the Portfolio may borrow money subject to investment
limitations specified in the Portfolio's Prospectus.

(8) Make loans, except that the Portfolio may (i) purchase debt securities
which are otherwise permissible investments, (ii) enter into repurchase
agreements and (iii) lend portfolio securities. The Portfolio may not
lend portfolio securities in an amount greater than 33 1/3% of the
value of its total assets.

(9) Pledge, mortgage or hypothecate its assets, except to secure permitted
indebtedness. Collateralized loans of securities are not deemed to be
pledges or hypothecations for this purpose.

(10) Write put and call options.

(11) Invest for the purpose of exercising control over any person.

(12) Purchase restricted securities.

19
<PAGE>

For purposes of limitation (2): (i) loan participations are considered to be
issued by both the issuing bank and the underlying corporate borrower; (ii)
utility companies are divided according to their services (for example, gas, gas
transmission, electric and telephone will each be considered a separate
industry); and (iii) financial service companies will be classified according to
the end users of their services, for example, automobile finance, bank finance
and diversified finance will each be considered a separate industry.

The Fund has adopted the following fundamental investment limitations. The Fund
may not:

(1) With respect to 75% of its assets, purchase securities, other than U.S.
Government Securities and securities of investment companies, of any
one issuer if more than 5% of the value of the Fund's total assets
would at the time of purchase be invested in any one issuer.

(2) Purchase securities, other than U.S. Government Securities and
securities of investment companies, if more than 25% of the value of
the Fund's total assets would be invested in securities of issuers
conducting their principal business activity in the same industry,
provided that consumer finance companies and industrial finance
companies are considered to be separate industries and that there is no
limit on the purchase of the securities of domestic commercial banks.

(3) Act as an underwriter of securities of other issuers, except to the
extent that, in connection with the disposition of portfolio
securities, the Fund may be deemed to be an underwriter for purposes of
the Securities Act of 1933.

(4) Purchase or sell real estate or any interest therein, except that the
Fund may invest in debt obligations secured by real estate or interests
therein or issued by companies that invest in real estate or interests
therein.

(5) Purchase or sell physical commodities or contracts relating to physical
commodities, provided that currencies and currency-related contracts
will not be deemed to be physical commodities.

(6) Borrow money, except for temporary or emergency purposes (including the
meeting of redemption requests). Total borrowings may not exceed 33
1/3% of the Fund's total assets and borrowing for purposes other than
meeting redemptions may not exceed 5% of the value of the Fund's total
assets.

(7) Issue senior securities except pursuant to Section 18 of the 1940
Act and except that the Fund may borrow money subject to its investment
limitations.

(8) Make loans, except that the Fund may (i) purchase debt securities which
are otherwise permissible investments, (ii) enter into repurchase
agreements and (iii) lend portfolio securities.

NONFUNDAMENTAL POLICIES

The Portfolio has adopted the following nonfundamental investment limitations
that may be changed by the Core Trust Board without interestholder approval. The
Portfolio may not:

(a) Purchase securities having voting rights, except the Portfolio may
invest in securities of other investment companies to the extent
permitted by the 1940 Act.

20
<PAGE>

(b) Purchase securities on margin, or make short sales of securities,
except for the use of short-term credit necessary for the clearance of
purchases and sales of portfolio securities.

(c) Invest in securities (other than fully-collateralized debt obligations)
issued by companies that have conducted continuous operations for less
than three years, including the operations of predecessors, unless
guaranteed as to principal and interest by an issuer in whose
securities the Portfolio could invest.

(d) Invest in or hold securities of any issuer if officers and Trustees of
Core Trust or the Adviser, individually owning beneficially more than
1/2 of 1% of the securities of the issuer, in the aggregate own more
than 5% of the issuer's securities.

(e) Invest in interests in oil or gas or interests in other mineral
exploration or development programs.

The Fund has adopted the following nonfundamental investment limitations that
may be changed by the Board without shareholder approval. The Fund may not:

(a) Purchase securities having voting rights, except the Fund may invest in
securities of other investment companies to the extent permitted by the
1940 Act.

(b) Purchase securities on margin, or make short sales of securities,
except for the use of short-term credit necessary for the clearance of
purchases and sales of portfolio securities.

(d) Invest in or hold securities of any issuer if officers and Trustees of
the Trust, individually owning beneficially more than 1/2 of 1% of the
securities of the issuer, in the aggregate own more than 5% of the
issuer's securities.

(e) Invest in interests in oil or gas or interests in other mineral
exploration or development programs.

(f) Purchase securities for investment while any borrowing equaling 5% or
more of the Fund's total assets is outstanding; and if at any time the
Fund's borrowings exceed the Fund's investment limitations due to a
decline in net assets, such borrowings will be promptly (within three
days) reduced to the extent necessary to comply with the Fund's
limitations.

(g) Pledge, mortgage or hypothecate its assets, except to secure permitted
indebtedness. Collateralized loans of securities are not deemed to be
pledges or hypothecations for this purpose.

(h) Lend portfolio securities in an amount greater than 33 1/3% of the
value of its total assets.

(i) Write put and call options.

(j) Invest for the purpose of exercising control over any person.

(k) Purchase restricted securities.

3. PERFORMANCE DATA AND ADVERTISING

As of the date hereof, the Fund had not commenced operations.

YIELD INFORMATION

21
<PAGE>

The Fund may provide current annualized and effective annualized yield
quotations based on its daily distributions. These quotations may from time to
time be used in advertisements, shareholder reports or other communications to
shareholders. All performance information supplied by the Fund is historical and
is not intended to indicate future returns.

In performance advertising, the Fund may compare any of their performance
information with data published by independent evaluators such as Morningstar,
Lipper Analytical Services, Inc., IBC Financial Data, Inc. or CDA/Wiesenberger
or other companies which track the investment performance of investment
companies ("Fund Tracking Companies"). The Fund may also compare any of their
performance information with the performance of recognized stock, bond and other
indexes. The Fund may also refer in such materials to mutual fund performance
rankings and other data published by Fund Tracking Companies. Performance
advertising may also refer to discussion of the Fund and comparative mutual fund
data and ratings reported in independent periodicals, such as newspapers and
financial magazines.

Any current yield quotation of the Fund which is used in such a manner as to be
subject to the provisions of Rule 482(d) under the Securities Act of 1933, as
amended, shall consist of an annualized historical yield, carried at least to
the nearest hundredth of one percent, based on a specific seven-calendar-day
period and shall be calculated by dividing the net change during the seven-day
period in the value of an account having a balance of one share at the beginning
of the period by the value of the account at the beginning of the period, and
multiplying the quotient by 365/7. For this purpose, the net change in account
value would reflect the value of additional shares purchased with distributions
declared on the original share and distributions declared on both the original
share and any such additional shares, but would not reflect any realized gains
or losses from the sale of securities or any unrealized appreciation or
depreciation on portfolio securities. In addition, any effective annualized
yield quotation used by the Fund shall be calculated by compounding the current
yield quotation for such period by adding 1 to the product, raising the sum to a
power equal to 365/7, and subtracting 1 from the result.

Although published yield information is useful to investors in reviewing
performance, investors should be aware that the Fund's yield fluctuates from day
to day and that the class' yield for any given period is not an indication or
representation by the Fund of future yields or rates of return on the Fund's
shares. Fund yields are not fixed or guaranteed, and an investment in the Fund
is not insured or guaranteed. Accordingly, yield information may not necessarily
be used to compare shares of the Fund with investment alternatives which, like
money market instruments or bank accounts, may provide a fixed rate of interest.
Also, it may not be appropriate directly to compare the Fund's yield information
to similar information of investment alternatives which are insured or
guaranteed.

OTHER PERFORMANCE AND SALES LITERATURE MATTERS

Total returns quoted in sales literature reflect all aspects of the Fund's
return, including the effect of reinvesting capital gain distributions. Average
annual returns generally are calculated by determining the growth or decline in
value of a hypothetical historical investment in the Fund over a stated period,
and then calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. While average annual returns are a convenient means of
comparing investment alternatives, investors should realize that the performance
is not constant over time but changes from year to year, and that average annual
returns represent averaged figures as opposed to the actual year-to-year
performance of the Fund.

Average annual total return is calculated by finding the average annual
compounded rates of return of a hypothetical investment, over such periods
according to the following formula:

P(1+T)n = ERV

Where:
P = a hypothetical initial payment of $1,000
T = average annual total return

22
<PAGE>
n = number of years
ERV = ending redeemable value: ERV is the value, at the end of
the applicable period, of a hypothetical $1,000 payment made
at the beginning of the applicable period.

OTHER ADVERTISING MATTERS

The Fund may advertise other forms of performance. For example, average annual
and cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of investments,
and/or a series of redemptions over any time period. Total returns may be broken
down into their components of income and capital (including capital gains and
changes in share price) in order to illustrate the relationship of se factors
and their contributions to total return. Any performance information may be
presented numerically or in a table, graph or similar illustration.

The Fund may also include various information in their advertisements.
Information included in the Fund's advertisements may include, but is not
limited to (i) portfolio holdings and portfolio allocation as of certain dates,
such as portfolio diversification by instrument type, by instrument or by
maturity, (ii) descriptions of the portfolio managers of the Fund or the
Portfolio and the portfolio management staff of the Adviser or summaries of the
views of the portfolio managers with respect to the financial markets, (iii) the
results of a hypothetical investment in the Fund over a given number of years,
including the amount that the investment would be at the end of the period, (iv)
the effects of earning Federally and, if applicable, state tax-exempt income
from the Fund or investing in a tax-deferred account, such as an individual
retirement account and (v) the net asset value, net assets or number of
shareholders of the Fund as of one or more dates.

In connection with its advertisements the Fund may provide "shareholders
letters" which serve to provide shareholders or investors an introduction into
the Fund's, the Portfolio's, the Trust's, Core Trust's or any of the Trust's of
Core Trust's service provider's policies or business practices.

4. MANAGEMENT

TRUSTEES AND OFFICERS OF THE TRUST

The Trustees and Officers of the Trust and their principal occupation during the
past five years are set forth below. Each Trustee who is an "interested person"
(as defined by the 1940 Act) of the Trust is indicated by an asterisk.

Rudolph I. Estrada, Trustee (age 49)

President and Chief Executive Officer of The Summit Group, a banking and
business consulting company, since 1987. Mr. Estrada was also a Presidential
appointee to the White House Commission on Small Business in 1993. He is also
Professor (Adjunct) of Finance and Management and Director of the Small Business
Institute at California State University; Chairman, Los Angeles County Office of
Education Personnel Commission; and Director, Foothill Thrift & Loan, Augura,
California. His address is 625 Fair Oaks Avenue, South Pasadena, California
91030.

Maurice J. DeWald, Trustee (age 57)

Chief Executive Officer and Chairman, Verity Financial Group, Inc. (a financial
advisory firm) since May 1991. Prior thereto, Mr. DeWald was managing partner of
KPMG Peat Marwick LLP (an international accounting firm). Mr. DeWald also serves
as a director of National Medical Enterprises and Dai-Ichi Kangyo Bank of
California. His address is 19200 Von Karman Avenue, Suite 400, Irvine,
California 92715.

Robert F. Franko, Trustee (age 50)

President of Imperial Financial Group, Inc. since April 1997 and Chairman of
Imperial Trust Company since March 1995. From July 1995 to May 1997 Mr. Franko
was Executive Vice President and Chief Financial Officer of

23
<PAGE>

Imperial Bank and Imperial Bancorp. and held various positions with other
Imperial Bancorp. subsidiaries. Prior thereto, Mr. Franko serves in various
capacities with the Springfield and Morningside Groups, including President and
Chief Executive Officer of Springfield Bank & Trust Limited, Gibraltar and
Managing Director of Springfield Securities Limited. His address is 1840 Century
Park East, 10th Floor, Los Angeles, California 90067.

John Y. Keffer,* Trustee, Chairman and President (age 55)

President, Forum Financial Group, LLC (mutual fund services company holding
company). Mr. Keffer is also a director and/or officer of various registered
investment companies for which the various Forum Financial Group of Companies
provides services. His address is Two Portland Square, Portland, Maine 04101.

Jack J. Singer, Trustee (age 53)

Senior Vice President, Imperial Bank since November 1987. Prior thereto, Mr.
Singer was Vice President of First Interstate Bank Ltd. His address is 9920
South LaCienega Boulevard, Inglewood, California 90301.

David I. Goldstein, Vice President and Secretary (age 36)

General Counsel, Forum Financial Group, LLC, with which he has been associated
since 1991. Prior thereto, Mr. Goldstein was associated with the law firm of
Kirkpatrick & Lockhart LLP. Mr. Goldstein also serves as an officer of various
registered investment companies for which the various Forum Financial Group of
Companies provides services. His address is Two Portland Square, Portland, Maine
04101.

Sara M. Morris, Treasurer (age 35)

Chief Financial Officer, Forum Financial Group, LLC, with which she has been
associated since 1994. Prior thereto, from 1991 to 1994, Ms. Clark was
Controller of Wright Express Corporation (a national credit card company) and
for six years prior thereto was employed at Deloitte & Touche LLP as an
accountant. Ms. Clark is also an officer of various registered investment
companies for which the Forum Financial Group of companies provides services.
Her address is Two Portland Square, Portland, Maine 04101.

Beth P. Hanson, Assistant Secretary (age 31)

Corporate Administrator, Forum Financial Group, LLC, with which she has been
associated since 1995. Prior thereto, Ms. Hanson was an English language
instructor with the Overseas Training Center, Inc. in Osaka, Japan. Her address
is Two Portland Square, Portland, Maine 04101.

TRUSTEES AND OFFICERS OF CORE TRUST

The Trustees and officers of Core Trust and their principal occupations during
the past five years are set forth below. Each Trustee who is an "interested
person" (as defined by the 1940 Act) of Core Trust is indicated by an asterisk.
Messrs., Keffer and Goldstein, officers of Core Trust, all currently serve as
officers of the Trust. Accordingly, for background information pertaining to
these officers, see "Trustees and Officers of the Trust" above.

John Y. Keffer*, Chairman and President

Costas Azariadis, Trustee (age 54)

Professor of Economics, University of California, Los Angeles, since July 1992.
Prior thereto, Dr. Azariadis was Professor of Economics at the University of
Pennsylvania. His address is Department of Economics, University of California,
Los Angeles, 405 Hilgard Avenue, Los Angeles, California 90024.

24
<PAGE>

James C. Cheng, Trustee (age 55)

President of Technology Marketing Associates (a marketing consulting company)
since September 1991. Prior thereto, Mr. Cheng was President and Chief Executive
Officer of Network Dynamics, Incorporated (a software development company). His
address is Two Portland Square, Portland, Maine 04101.

J. Michael Parish, Trustee (age 54)

Partner at the law firm of Reid & Priest. Prior to 1995, Mr. Parish was a
partner at Winthrop Stimson Putnam & Roberts since 1989. His address is 40 West
57th Street, New York, New York 10019.

Sara M. Morris, Vice President and Treasurer (age 34)

David I. Goldstein, Vice President and Secretary

Thomas G. Sheehan, Vice President and Assistant Secretary (age 43)

Director, Relationship Management, Forum Financial Group, LLC, since October,
1993. Prior thereto, Mr. Sheehan was a Special Counsel in the Division of
Investment Management of the U.S. Securities and Exchange Commission in
Washington, D.C. His address is Two Portland Square, Portland, Maine 04101.

TRUSTEE AND OFFICER COMPENSATION

Each Trustee of the Trust is paid $2,000 for each Board meeting attended
(whether in person or by electronic communication) and is paid $2,000 for each
Committee meeting attended on a date when a Board meeting is not held. Trustees
are also reimbursed for travel and related expenses incurred in attending
meetings of the Board. No officer of the Trust is compensated by the Trust, but
officers are reimbursed for travel and related expenses incurred in attending
meetings of the Board. Since commencement of the Trust's operations, Messrs.
Keffer, Singer and Franko have not accepted any fees for their services as
Trustees.

The following table provides the aggregate compensation paid to each Trustee for
the twelve months ended August 31, 1997. The Trust has not adopted any form of
retirement plan covering Trustees or officers.

25
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Accrued Annual
Aggregate Pension Benefits Upon Total
Trustee Compensation Benefits Retirement Compensation
------- ------------ -------- ---------- ------------
Mr. DeWald $7,000 None None $7,000
Mr. Estrada $7,000 None None $7,000
Mr. Franko None None None None
Mr. Keffer None None None None
Mr. Singer None None None None
</TABLE>

Each Trustee of Core Trust is paid $1,000 for each meeting of the Core Trust
Board attended (whether in person or by electronic communication) plus $100 for
each active portfolio of Core Trust and is paid $1000 for each committee meeting
attended on a date when the Core Trust Board meeting is not held. As of August
31, 1997, there were fifteen active portfolios of Core Trust (including the
Portfolios). Trustees are also reimbursed for travel and related expenses
incurred in attending meetings of the Core Trust Board. No officer of Core Trust
is compensated or reimbursed for expenses by Core Trust. Since commencement of
the Trust's operations, Mr. Keffer has not accepted any fees for his services as
Trustee. Core Trust trustee expenses were less than $5,000 for the twelve months
ended August 31, 1997.

The following table provides the aggregate compensation paid to each trustee of
Core Trust for the twelve months ended August 31, 1997. Core Trust has not
adopted any form of retirement plan covering trustees or officers of Core Trust.

26
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Accrued Annual
Aggregate Pension Benefits Upon Total
Trustee Compensation Benefits Retirement Compensation
------- ------------ -------- ---------- ------------
Mr. Azariadis $7,900 None None $7,900
Mr. Parish $7,900 None None $7,900
Mr. Cheng $7,900 None None $7,900
Mr. Keffer None None None None
</TABLE>

INVESTMENT ADVISER

The Fund does not have an investment adviser. In the event that the Board
determines it is in the best interest of the Fund to withdraw its investment
from the Portfolio, the Board will determine whether to invest in a similar
portfolio or to directly retain an investment adviser. Shareholder approval of a
new investment advisory agreement between the Trust and the Adviser would not be
necessary, provided that the agreement is substantially similar to the current
Investment Advisory Agreement of Core Trust with respect to the Portfolio.

The Adviser furnishes at its own expense all services, facilities and personnel
necessary in connection with managing the Portfolio's investments and effecting
portfolio transactions for the Portfolio. The Investment Advisory Agreement
between Core Trust and the Adviser will continue in effect only if its
continuance is specifically approved at least annually by the Core Trust Board
or by vote of the Portfolio's shareholders, and in either case, by a majority of
the Core Trust trustees who are not parties to the Investment Advisory Agreement
or interested persons of any such party at a meeting called for the purpose of
voting on the Investment Advisory Agreement.

The Investment Advisory Agreement is terminable without penalty by Core Trust
with respect to the Portfolio on 60 days' written notice when authorized either
by vote of the Portfolio's interestholders or by a vote of a majority of the
Core Trust Board, or by the Adviser on 60 days' written notice and will
automatically terminate in the event of its assignment. The Investment Advisory
Agreement also provides that, with respect to the Portfolio, the Adviser shall
not be liable for any error of judgment or mistake of law or for any act or
omission in the performance of the Adviser's duties or by reason of reckless
disregard of the Adviser's obligations and duties under the Investment Advisory
Agreement.

The Adviser may carry out any of its obligations under the Investment Advisory
Agreement by employing, subject to the supervision of the Core Trust Board, one
or more subadvisers who are registered as investment advisers or who are exempt
from registration. The Investment Advisory Agreement provides that the Adviser
shall not be liable for any act or omission of any subadviser except with
respect to matters as to which the Adviser specifically assumes responsibility
in writing. There are currently no investment subadvisory agreements with
respect to the Portfolio.

The Adviser was established in 1987 and is indirectly wholly-owned and
controlled by John Y. Keffer. In connection with the January 2, 1998 acquisition
of Linden Asset Management, Inc., the Adviser has entered into a consulting
agreement with a new company solely owned by Anthony R. Fischer, Jr., former
owner, president and sole director of Linden, under which Mr. Fischer provides
portfolio management services to the Portfolio under the supervision of the
Adviser. Mr. Fischer has over 20 years experience in managing pools of assets.
He has managed the Portfolio's assets since January 2, 1998 and other money
market funds formerly advised by Linden since October 1992. Prior thereto, he
was as Senior Vice President and Treasurer of United California Savings Bank,
Santa Ana, California from 1984 to 1989 and, immediately prior thereto, as a
Manager for five years at PaineWebber Jackson & Curtis, New York, New York.

Table 1 in Appendix C shows the dollar amount of investment advisory fees paid
by the Portfolio.

ADMINISTRATION

27
<PAGE>

Forum supervises the overall management of the Trust (which includes, among
other responsibilities, negotiation of contracts and fees with, and monitoring
of performance and billing of, the transfer agent and custodian and arranging
for maintenance of books and records of the Trust), and provides the Trust with
general office facilities pursuant to an Administration Agreement with the
Trust. The Administration Agreement will remain in effect for a period of twelve
months with respect to the Fund and thereafter is automatically renewed each
year for an additional term of one year.

The Administration Agreement terminates automatically if it is assigned and may
be terminated without penalty with respect to the Fund by vote of that Fund's
shareholders or by either party on not more than 60 days' written notice. The
Administration Agreement provides that Forum shall not be liable for any error
of judgment or mistake of law or for any act or omission in the administration
or management of the Trust, except for willful misfeasance, bad faith or gross
negligence in the performance of Forum's duties or by reason of reckless
disregard of its obligations and duties under the Administration Agreement.

At the request of the Board, Forum provides persons satisfactory to the Board to
serve as officers of the Trust. Similarly, at the request of the Core Trust
Board, Forum provides persons satisfactory to the Core Trust Board to serve as
officers of Core Trust. Those officers, as well as certain other employees and
Trustees of the Trust and Core Trust, may be directors, officers or employees of
Forum, the Adviser, FFSI or their affiliates.

Table 2 in Appendix C shows the dollar amount of administration fees paid by the
Fund.

Forum provides substantially similar administration services to the Portfolio
pursuant to an administration agreement with Core Trust. The provisions of that
agreement are substantially similar to those of the Trust's Administration
Agreement.

Table 2 of Appendix C shows the dollar amount of administration fees paid by the
Portfolio. Prior to June 1, 1997, FFSI acted as administrator of Core Trust
under an agreement substantially identical to the administration agreement
between Core Trust and Forum.

DISTRIBUTOR

FFSI is the Trust's distributor and acts as the agent of the Trust in connection
with the offering of shares of the Fund pursuant to a Distribution Agreement
with the Trust. With respect to the Fund, the Distribution Agreement will
continue in effect for twelve months and will continue in effect thereafter only
if its continuance is specifically approved at least annually by the Board or by
vote of the shareholders entitled to vote thereon, and in either case, by a
majority of the Trustees who (i) are not parties to the Distribution Agreement,
(ii) are not interested persons of any such party or of the Trust and (iii) have
no direct or indirect financial interest in the operation of the Plan or in the
Distribution Agreement, at a meeting called for the purpose of voting on the
Distribution Agreement. All subscriptions for shares obtained by FFSI are
directed to the Trust for acceptance and are not binding on the Trust until
accepted by it. FFSI receives no compensation or reimbursement of expenses for
the distribution services provided pursuant to the Distribution Agreement except
as may be paid with respect to the Plan.

The Distribution Agreement provides that FFSI shall not be liable for any error
of judgment or mistake of law or in any event whatsoever, except for willful
misfeasance, bad faith or gross negligence in the performance of FFSI's duties
or by reason of reckless disregard of its obligations and duties under the
Distribution Agreement.

The Distribution Agreement is terminable with respect to the Fund without
penalty by the Trust on 60 days' written notice when authorized either by vote
of the Fund's shareholders or by a vote of a majority of the Board, or by FFSI
on 60 days' written notice, and will automatically terminate in the event of its
assignment. The Distribution Agreement is also terminable upon similar notice by
a majority of the Trustees who (i) are not interested persons of the Trust and
(ii) have no direct or indirect financial interest in the operation of the Plan
or in the Distribution Agreement ("Qualified Trustees"). The Distribution
Agreement will automatically terminate in the event of its assignment.

28
<PAGE>

FFSI acts as sole placement agent for interests in the Portfolio and receives no
compensation for those services from the Portfolios.

Certain states permit shares to be purchased and redeemed only through
registered broker-dealers, including FFSI.

FFSI is not paid a fee for its services as distributor except in accordance with
the plan as described below.

EXPENSES

The Trust pays all of its expenses, including: interest charges, taxes,
brokerage fees and commissions; expenses of issue, repurchase and redemption of
shares; premiums of insurance for the Trust, its Trustees and officers and
fidelity bond premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's administrator, investment advisers, custodian,
transfer agent and fund accountant; fees of pricing, interest, distribution,
credit and other reporting services; costs of membership in trade associations;
telecommunications expenses; funds transmission expenses; auditing, legal and
compliance expenses; costs of forming the Trust and maintaining its existence;
costs of preparing and printing the Trust's prospectuses, statements of
additional information and shareholder reports and delivering them to existing
shareholders; expenses of meetings of shareholders and proxy solicitations
therefore; costs of maintaining books and accounts and preparing tax returns;
costs of reproduction, stationery and supplies; fees and expenses of the Trust's
Trustees; compensation of the Trust's officers and employees who are not
employees of the Adviser, FFSI or their respective affiliates and costs of other
personnel (who may be employees of the Adviser, FFSI or their respective
affiliates) performing services for the Trust; costs of Trustee meetings; SEC
registration fees and related expenses; and state or foreign securities laws
registration fees and related expenses.

Fund expenses also include the Fund's pro rata portion of expenses of the
Portfolio.

SHAREHOLDER SERVICE AND DISTRIBUTION PLAN

The Trust has entered into the Plan with Forum. Under the Plan, the Trust pays
Forum a fee of 1.00% of the Fund's average daily net assets. Under the Plan
Forum performs certain shareholder servicing and distribution services. Forum is
authorized to enter into service agreements pursuant to which a Participating
Organization, on behalf of its customers, performs the services described in the
Plan. As compensation for its services, a Participating Organization is paid a
fee by Forum. As of the date hereof, the only Participating Organization was
Imperial Financial Group, Inc. and its affiliates.

To the extent Forum is paid a fee for its distribution services under the Plan,
the Plan comports with Rule 12b-1 under the 1940 Act.

The Plan provides that all written agreements relating to the Plan must be
approved by the Board, including a majority of the Qualified Trustees. In
addition, the Plan (as well as the Distribution Agreement) requires the Trust
and Forum to prepare and submit to the Board, at least quarterly, and the Board
will review, written reports setting forth all amounts expended under the Plan
and identifying the activities for which those expenditures were made.

The Plan provides that it will remain in effect for one year from the date of
its adoption and thereafter shall continue in effect provided it is approved at
least annually by the shareholders or by the Board, including a majority of the
Qualified Trustees. The Plan further provides that it may not be amended to
increase materially the costs which may be borne by the Trust for distribution
pursuant to the Plan without shareholder approval and that other material
amendments of the Plan must be approved by the Qualified Trustees. The Plan may
be terminated at any time by the Board, by a majority of the Qualified Trustees,
or by the Fund's shareholders.

In adopting the Plan, the Trustees considered among other things whether (i) the
Plan is in the best interests of the Fund and its shareholders, (ii) the
services to be performed pursuant to the Plan are required for the operation of
the Fund, (iii) Forum and the expected Participating Organizations can provide
services at least equal, in nature and quality, to those provided by others
providing similar services, and (iv) the fees for such services are fair and

29
<PAGE>

reasonable in light of the usual and customary charges made by other entities,
especially non-affiliated entities, for services of the same nature and quality.

It is expected that substantially all amounts paid to Forum under the Plan will
be paid out to various Participating Organizations not affiliated with Forum for
their distribution and shareholder services.

Table 3 in Appendix C shows the dollar amount of fees paid under the Plan.

TRANSFER AGENT

Forum Shareholder Services, LLC acts as transfer agent and distribution
disbursing agent for the Trust pursuant to a Transfer Agency Agreement. The
Transfer Agency Agreement is automatically renewed each year for an additional
term of one year.

Among the responsibilities of the Transfer Agent as transfer agent for the Trust
are, with respect to shareholders of record: (1) answering customer inquiries
regarding account status and history, the manner in which purchases and
redemptions of shares of the Fund may be effected and certain other matters
pertaining to the Fund; (2) assisting shareholders in initiating and changing
account designations and addresses; (3) providing necessary personnel and
facilities to establish and maintain shareholder accounts and records, assisting
in processing purchase and redemption transactions and receiving wired funds;
(4) transmitting and receiving funds in connection with customer orders to
purchase or redeem shares; (5) verifying shareholder signatures in connection
with changes in the registration of shareholder accounts; (6) furnishing
periodic statements and confirmations of purchases and redemptions; (7)
arranging for the transmission of proxy statements, annual reports, prospectuses
and other communications from the Trust to its shareholders; (8) arranging for
the receipt, tabulation and transmission to the Trust of proxies executed by
shareholders with respect to meetings of shareholders of the Trust; and (9)
providing such other related services as the Trust or a shareholder may
reasonably request.

The Transfer Agent or any sub-transfer agent or processing agent may also act
and receive compensation for acting as custodian, investment manager, nominee,
agent or fiduciary for its customers or clients who are shareholders of the Fund
with respect to assets invested in the Fund. The Transfer Agent or any
sub-transfer agent or other processing agent may elect to credit against the
fees payable to it by its clients or customers all or a portion of any fee
received from the Trust or from the Transfer Agent with respect to assets of
those customers or clients invested in the Fund. The Transfer Agent, FFSI or
sub-transfer agents or processing agents retained by the Transfer Agent may be
Participating Organizations and, in the case of sub-transfer agents or
processing agents, may also be affiliated persons of the Transfer Agent.

For its transfer agency services, the Transfer Agent receives an annual fee from
the Fund of 0.20% of the Fund's average daily net assets plus $12,000.

Table 4 in Appendix C shows the dollar amount of fees paid under the Transfer
Agent Agreement.

FUND ACCOUNTANT

Forum Accounting provides accounting services for the Fund and interestholder
recordkeeper and accounting services for the Portfolio.

Under its agreement with Core Trust, Forum Accounting prepares and maintains
books and records of the Portfolio on behalf of Core Trust that are required to
be maintained under the 1940 Act, calculates the net asset value per unit of the
Portfolio (and each investor therein) and prepares periodic reports to
interestholders of the Portfolio and the SEC. For these services and its
services as interestholder recordkeeper of the Portfolio, wherein it accounts
for the interest of each investor in the Portfolio. Forum Accounting receives
from Core Trust with respect to the Portfolio a fee of $48,000 plus, for each
five investors in the Portfolio above one (excluding Forum and its affiliates),
$6,000 per year. In addition, Forum Accounting is paid an additional $12,000 per
year if more than 25% of the Portfolio's

30
<PAGE>

total assets are invested in asset backed securities, the Portfolio has more
than 100 security positions or the Portfolio has a monthly portfolio turnover
rate of 10% or greater.

Forum Accounting is required to use its best judgment and efforts in rendering
fund accounting services and is not be liable to Core Trust for any action or
inaction in the absence of bad faith, willful misconduct or gross negligence.
Forum Accounting is not responsible or liable for any failure or delay in
performance of its fund accounting obligations arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control and Core
Trust has agreed to indemnify and hold harmless Forum Accounting, its employees,
agents, officers and directors against and from any and all claims, demands,
actions, suits, judgments, liabilities, losses, damages, costs, charges, counsel
fees and other expenses of every nature and character arising out of or in any
way related to Forum Accounting's actions taken or failures to act with respect
to the Portfolio or based, if applicable, upon information, instructions or
requests with respect to the Portfolio given or made to Forum Accounting by an
officer of Core Trust duly authorized. This indemnification does not apply to
Forum Accounting's actions taken or failures to act in cases of Forum
Accounting's own bad faith, willful misconduct or gross negligence.

The Trust has retained Forum Accounting as fund accountant to the Fund under
arrangements and agreements substantially similar to the arrangements and
agreements described above with respect to the Portfolios. No fee is payable for
fund accounting services to the Fund (a fee may be charged, subject to Board
approval).

Table 5 in Appendix C shows the dollar amount of fees paid under the
Interestholder Recordkeeper and Fund Accounting Agreement with respect to the
Portfolio.

FORUM FINANCIAL GROUP

Each of Forum, the Adviser, FFSI, the Transfer Agent and Forum Accounting are
members of the Forum Financial Group of Companies. Each of these companies are
affiliated through the common control by John Y. Keffer.

5. PORTFOLIO TRANSACTIONS

Purchases and sales of portfolio securities for the Portfolio usually are
principal transactions. Portfolio securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities.
Purchases from underwriters of portfolio securities include a commission or
concession paid by the issuer to the underwriter, and purchases from dealers
serving as market makers include the spread between the bid and asked price.
There usually are no brokerage commissions paid for any purchases. Since the
Portfolio's inception, no brokerage fees were paid by the Portfolio. While Core
Trust does not anticipate that the Portfolio will pay any amounts of commission,
in the event the Portfolio pays brokerage commissions or other
transaction-related compensation, the payments may be made to broker-dealers who
pay expenses of the Portfolio that it would otherwise be obligated to pay
itself. Any transaction for which the Portfolio pays transaction-related
compensation will be effected at the best price and execution available, taking
into account the amount of any payments made on behalf of the Portfolio by the
broker-dealer effecting the transaction.

Allocations of transactions to dealers and the frequency of transactions are
determined for the Portfolio by the Adviser in its best judgment and in a manner
deemed to be in the best interest of shareholders of the Portfolio rather than
by any formula. The primary consideration is prompt execution of orders in an
effective manner and at the most favorable price available to the Portfolio.

Investment decisions for the Portfolio will be made independently from those for
any other account or investment company that is or may in the future become
managed by the Adviser or its affiliates. If, however, the Portfolio and other
investment companies or accounts managed by the Adviser are contemporaneously
engaged in the purchase or sale of the same security, the transactions may be
averaged as to price and allocated equitably to each account. In some cases,
this policy might adversely affect the price paid or received by the Portfolio
or the size of the position obtainable for the Portfolio. In addition, when
purchases or sales of the same security for the Portfolio and for other
investment companies managed by the Adviser occur contemporaneously, the
purchase or sale orders may be aggregated in order to obtain any price
advantages available to large denomination purchases or sales.

31
<PAGE>

6. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

For each shareholder of record of the Trust, the Transfer Agent, as the
shareholder's agent, establishes an open account to which all shares purchased
by the shareholder are credited, together with all distributions that are
reinvested in additional shares.

Shares of the Fund are sold on a continuous basis by the distributor without any
sales charge except the distribution fee paid under the Plan. Shareholders may
effect purchases or redemptions or request any shareholder privilege in person
at the offices of the Transfer Agent, which are located at Two Portland Square,
Portland, Maine 04101.

Investors who are not shareholders of record may nonetheless have the right to
vote shares depending upon their arrangement with the Participating Organization
that holds their shares.

Certain Participating Organizations may enter purchase orders with payment to
follow.

BANKING LAW INFORMATION

Banking laws and regulations generally permit a bank or bank affiliate to
purchase shares of an investment company as agent for and upon the order of a
customer and permit a bank or bank affiliate to serve as a Participating
Organization or perform sub-transfer agent or similar services for the Trust and
its shareholders. If a bank or bank affiliate were prohibited from performing
all or a part of the foregoing services, its shareholder customers would be
permitted to remain shareholders of the Trust and alternative means for
continuing to serve them would be sought.

REDEMPTION-IN-KIND

Redemptions may be made wholly or partially in portfolio securities if the Board
determines that payment in cash would be detrimental to the best interests of
the Fund. The Trust has filed an election with the SEC pursuant to which the
Fund will only consider effecting a redemption in portfolio securities if the
particular shareholder is redeeming more than $250,000 or 1% of the Fund's net
asset value, whichever is less, during any 90-day period.
Core Trust has filed a similar election.

PURCHASING SHARES OTHER THAN BY BANK WIRE

In addition to the situations described in the Prospectus, the Trust may redeem
shares involuntarily to reimburse the Fund for any loss sustained by reason of
the failure of a shareholder to make full payment for shares purchased by the
shareholder or to collect any charge relating to transactions effected for the
benefit of a shareholder which is applicable to the Fund's shares as provided in
the Prospectus from time to time.

CHECK WRITING

Because of the difficulty of determining in advance the exact value of a
shareholder's Fund account, a shareholder may not use a redemption draft
("check") to close a Fund account. There are currently no charges for the check
writing privilege, but a shareholder's Fund account will be charged a fee for
stopping payment of a check upon a Shareholder's request or if a check cannot be
honored because of insufficient funds or other valid reasons. All drafts are
payable through Imperial Bank and the checkwriting privilege is subject to such
rules as Imperial Bank may from to time adopt.

If a shareholder (including Participating Organizations) may redeem shares by
telephoning the Transfer Agent, as long as the Trust employs reasonable
procedures to insure that telephone orders are genuine (which include recording
certain transactions and the use of immediate written confirmation by facsimile
or otherwise), the Trust, the Transfer Agent and FFSI are not responsible for
the authenticity of telephone instructions or losses, if any, resulting from
unauthorized telephone redemption requests. Shareholders (including
Participating Organizations) should verify the accuracy of telephone
instructions immediately upon receipt of confirmation statements.

32
<PAGE>

7. TAXATION

Qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended, does not involve governmental supervision of management or
investment practices or policies. The information set forth in the Prospectus
and the following discussion relate solely to Federal income taxes on
distributions and other distributions by the Fund and assumes that the Fund
qualifies for treatment as a regulated investment company. Investors should
consult their own counsel for further details and for the application of
Federal, state and local tax laws to the investor's particular situation.

In order to continue to qualify for treatment as a regulated investment company
under the Internal Revenue Code, the Fund must distribute to its shareholders
for each taxable year at least 90% of its net investment income and must meet
several additional requirements. Among these requirements are the following: (1)
the Fund must derive at least 90% of its gross income each taxable year from
distributions, interest, payments with respect to securities loans, gains from
the sale or other disposition of securities and certain other income; (2)
subject to certain exceptions, at the close of each quarter of the Fund's
taxable year, at least 50% of the value of its total assets must be represented
by cash and cash items, securities of investment companies, U.S. Government
Securities and other securities, with these other securities limited, in respect
of any one issuer, to an amount that does not exceed 5% of the value of the
Fund's total assets, and (3) subject to certain exceptions, at the close of each
quarter of the Fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than securities of investment
companies and U.S. Government Securities) of any one issuer.

The Fund expects to derive substantially all of its gross income (exclusive of
capital gains) from sources other than dividends. Accordingly, it is expected
that the Fund's distributions will qualify for the dividends-received deduction
for corporations.

Distributions declared by the Fund in October, November, or December of any year
and payable to shareholders of record on a date in such a month will be deemed
to have been paid by the Fund and received by the shareholders on December 31 of
the year declared if paid by the Fund during the following January.

8. OTHER INFORMATION

DETERMINATION OF NET ASSET VALUE

The Trust and the Portfolio do not determine net asset value on the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Memorial
Day, Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving and
Christmas.

Pursuant to the rules of the SEC, both the Board and the Core Trust Board have
established procedures to stabilize the Fund's and the Portfolio's, as
applicable, net asset value at $1.00 per share. These procedures include a
review of the extent of any deviation of net asset value per share as a result
of fluctuating interest rates, based on available market rates, from the Fund's
and Portfolio's, as applicable, $1.00 amortized cost price per share. Should
that deviation exceed 1/2 of 1%, the Board and the Core Trust Board,
respectively, will consider whether any action should be initiated to eliminate
or reduce material dilution or other unfair results to shareholders. Such action
may include redemption of shares in kind, selling portfolio securities prior to
maturity, reducing or withholding distributions and utilizing a net asset value
per share as determined by using available market quotations.

In determining the appropriate market value of portfolio investments, the
Portfolio may employ outside organizations, which may use a matrix or formula
method that takes into consideration market indices, matrices, yield curves and
other specific adjustments. This may result in the securities being valued at a
price different from the price that would have been determined had the matrix or
formula method not been used. All cash, receivables and current payables are
carried at their face value.

33
<PAGE>

Each investor in the Portfolio including the Fund, may add to or reduce its
investment in the Portfolio on each Fund Business Day. The Portfolio maintains
the same business days as does the Fund. As of the close of regular trading on
any Fund Business Day, the value of the Fund's beneficial interest in the
Portfolio is determined by multiplying the net asset value of the Portfolio by
the percentage, effective for that day, which represents the Fund's share of the
aggregate beneficial interests in the Portfolio. Any additions or reductions,
which are to be effected as of the close of the Fund Business Day, are then
effected. The Fund's percentage of the aggregate beneficial interests in the
Portfolio are then recomputed as the percentage equal to the fraction (i) the
numerator of which is the value of the Fund's investment in the Portfolio as of
the close of the Fund Business Day plus or minus, as the case may be, the amount
of net additions to or reductions from the Fund's investment in the Portfolio
effected as of that time, and (ii) the denominator of which is the aggregate net
asset value of the Portfolio as of the close of the Fund Business Day plus or
minus, as the case may be, the amount of net additions to or reductions from the
aggregate investments in the Portfolio by all investors in the Portfolio. The
percentage determined is then applied to determine the value of the Fund's
interest in the Portfolio as of the close of the next Fund Business Day.

CUSTODIAN

Pursuant to a Custodian Agreement with Core Trust, BankBoston, 100 Federal
Street, Boston, Massachusetts 02106, acts as the custodian of the Portfolio's
assets. The custodian's responsibilities include safeguarding and controlling
the Portfolio's cash and securities and determining income payable on and
collecting interest on Portfolio investments.

AUDITORS

[ ], independent auditors, acts as auditors for the Fund and as auditors
for the Portfolio.

MASTER FEEDER ARRANGEMENT

The Fund seeks to achieve its objective by investing all of its investable
assets in a separate portfolio of a registered, open-end management investment
company with substantially the same investment objective and policies as the
Fund. This "Core and Gateway" fund structure is an arrangement whereby one or
more investment companies or other collective investment vehicles that share
investment objectives -- but offer their shares through distinct distribution
channels -- pool their assets by investing in a single investment company having
substantially the same investment objective and policies. This means that the
only investment securities that will be held by the Fund will be the Fund's
interest in the Portfolio. This structure permits other collective investment
vehicles and institutional investors to invest collectively in the Portfolio,
allowing for greater economies of scale in managing operations of the Portfolio.
The Board retains the right to withdraw the Fund's investments from the
Portfolio at any time; the Fund would then resume investing directly in
individual securities of other issuers or could re-invest all of its assets in
another similar portfolio.

The Board may withdraw the Fund's assets from the Portfolio if it determines
that to be in the best interests of the Fund. The inability of the Fund that
withdrew its assets from the Portfolio to find a suitable investment adviser, in
the event the Board decided not to permit the Adviser to manage the Fund's
assets could have a significant impact on shareholders of the Fund. Each
investor in the Portfolio, including the Fund, under certain unusual
circumstances may be deemed to be liable for all obligations of the Portfolio,
but not any other portfolio of Core Trust. The risk to an investor in the
Portfolio of incurring financial loss on account of such liability, however,
would be limited to circumstances in which the Portfolio was unable to meet its
obligations.

SHAREHOLDERS' VOTING RIGHTS

The Portfolio normally will not hold meetings of its investors except as
required under the 1940 Act. As an interestholder in the Portfolio, the Fund is
entitled to vote in proportion to its relative interest in the Portfolio. On any
issue, the Fund will vote its shares in the Portfolio in proportion to the votes
cast by its shareholders. If there are other investors in the Portfolio, there
can be no assurance that any issue that receives a majority of the votes cast by
the Fund's shareholders will receive a majority of votes cast by all Portfolio
interestholders. Generally, the Fund

34
<PAGE>

will hold a meeting of its shareholders to obtain instructions on how to vote
its interest in the Portfolio when the Portfolio is conducting a meeting of its
interestholders. However, subject to applicable statutory and regulatory
requirements, the Fund will not seek instructions from its shareholders with
respect to (i) any proposal relating to the Portfolio that, if made with respect
to the Fund, would not require the vote of Fund shareholders, or (ii) any
proposal relating to the Portfolio that is identical to a proposal previously
approved by the Fund's shareholders.

In addition to a vote to remove a trustee or change a fundamental policy,
examples of matters that will require approval of interestholders of the
Portfolio include, subject to applicable statutory and regulatory requirements:
the election of trustees; approval of an investment advisory agreement; the
dissolution of the Portfolio; certain amendments of the organizational documents
for Core Trust; a merger, consolidation or sale of substantially all of the
Portfolio's assets; or any additional matters required or authorized by the
trust instrument and by-laws of Core Trust, or as the trustees of Core Trust may
consider desirable.

THE TRUST AND ITS SHAREHOLDERS

The Trust is a business trust organized under Delaware law. Delaware law
provides that shareholders shall be entitled to the same limitations of personal
liability extended to stockholders of private corporations for profit. The
courts in various states may decline to apply Delaware law on this point.

The Trust Instrument contains an express disclaimer of shareholder liability for
the debts, liabilities, obligations, and expenses of the Trust and requires that
a disclaimer be given in each contract entered into or executed by the Trust or
the Trustees. The Trust Instrument provides for indemnification out of each
series' property of any shareholder or former shareholder held personally liable
for the obligations of the series. The Trust Instrument also provides that each
series shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the series and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which Delaware law does not
apply, no contractual limitation of liability was in effect and the portfolio is
unable to meet its obligations. FFSI believes that, in view of the above, there
is no risk of personal liability to shareholders.

The Trust Instrument further provides that the Trustees shall not be liable to
any person other than the Trust or its shareholders; moreover, the Trustees
shall not be liable for any conduct whatsoever, provided that a Trustee is not
protected against any liability to which he would otherwise by subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.

The Board is required to call a meeting of shareholders for the purpose of
voting upon the removal of any trustee when so requested in writing by the
shareholders of record holding at least 10% of the Trust's outstanding shares.

Each series capital consists of shares of beneficial interest. Shares are fully
paid and nonassessable, except as set forth above with respect to Trustee and
shareholder liability. Shareholders representing 10% or more of the Trust or a
series may, as set forth in the Trust Instrument, call meetings of the Trust or
series for any purpose related to the Trust or series, as the case may be,
including, in the case of a meeting of the entire Trust, the purpose of voting
on removal of one or more Trustees.

Generally termination of the Trust must be approved by the vote of the holders
of a majority of the outstanding shares of the Trust. The Trustees may, without
prior shareholder approval, change the form of organization of the Trust by
merger, consolidation or incorporation. If not so terminated or reorganized, the
Trust and its series will continue indefinitely. Under the Trust Instrument, the
Trustees may, without shareholder vote, cause the Trust to merge or consolidate
into one or more trusts, partnerships or corporations or cause the Trust to
merge or consolidate into one or more trusts, partnerships or corporations or
cause the Trust to be incorporated under Delaware law, so long as the surviving
entity is an open-end management investment company that will succeed to or
assume the Trust's registration statement.

35
<PAGE>

SHAREHOLDINGS

As of April 1, 1998, the officers and trustees of the Trust as a group owned
less than 1% of the outstanding shares of the Fund.

Table 6 to Appendix C lists the persons who owned of record 5% or more of the
outstanding shares of the Fund.

9. FINANCIAL STATEMENTS

As of the date hereof the Fund had not commenced operations. Accordingly, no
financial statements of the Fund were available.

36
<PAGE>

APPENDIX A - DESCRIPTION OF CERTAIN SECURITIES RATINGS

1. CORPORATE BONDS

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")

Bonds which are rated Aaa are judged by Moody's to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

STANDARD & POOR'S CORPORATION ("S&P")

Bonds rated AAA have the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

Bonds rated AA have a very strong capacity to pay interest and repay principal
and differ from the highest rated issues only in small degree.

FITCH INVESTORS SERVICE, INC. ("FITCH")

AAA Bonds are considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.

A Bonds are considered to be investment grade of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

Plus and minus signs are used with a rating symbol to indicate the relative
level of credit quality within the rating category. Plus and minus signs,
however, are not used in the AAA category.

2. COMMERCIAL PAPER

MOODY'S INVESTORS SERVICE, INC.

Moody's two highest ratings for short-term debt, including commercial paper, are
Prime-1 and Prime-2; both are judged investment grade, to indicate the relative
repayment ability of rated issuers.

Issuers (or supporting institutions) rated Prime-1 have a superior ability for
repayment of senior short-term debt obligations. Prime-1 repayment ability will
often be evidenced by many of the following characteristics:

Leading market positions in well-established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt
and ample asset protection.
Broad margins in earnings, coverage of fixed financial charges and
high internal cash generation.
Well-established access to a range of financial markets and assured
sources of alternate liquidity.

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<PAGE>

Issuers rated Prime-2 by Moody's have a strong ability for repayment of senior
short-term debt obligations. This will normally be evidenced by many of the
characteristics of issuers rated Prime-1 but to a lesser degree. Earnings trends
and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

STANDARD & POOR'S CORPORATION

S&P's two highest commercial paper ratings are A and B. Issues in this category
are delineated with the numbers 1, 2 and 3 to indicate the relative degree of
safety. An A-1 designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus (+) sign designation. The capacity for
timely payment on issues with an A-2 designation is satisfactory. However, the
relative degree of safety is not as high as for issues designated A-1. A-3
issues have an adequate capacity for timely payment. They are, however, somewhat
more vulnerable to the adverse effects of changes in circumstances than
obligations carrying the higher designations. Issues rated B are regarded as
having only a speculative capacity for timely payment.

FITCH INVESTORS SERVICE, INC.

Fitch's short-term ratings apply to debt obligations that are payable on demand
or have original maturities of generally up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.

F-1+. Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1. Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.

F-2. Good Credit Quality. Issues assigned this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great as for
issues assigned F-1+ or F-1 ratings.

38
<PAGE>

APPENDIX B - PERFORMANCE INFORMATION

Not Applicable.

39
<PAGE>

APPENDIX C - MISCELLANEOUS TABLES

The following tables indicate the fees paid to the Fund's and the Portfolio's
various service providers for the last three fiscal periods or shorter period,
as applicable. The Portfolio commenced operations on December 5, 1995. As of the
date hereof, the Fund had not commenced operations.

TABLE 1 - INVESTMENT ADVISORY FEES
<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
TREASURY PORTFOLIO
Period ended August 31, 1997 $9,064 $0 $9,064
Year ended March 31, 1997 $20,637 $0 $20,637
Year ended March 31, 1996 $69,466 $0 $69,466
</TABLE>

TABLE 2 - ADMINISTRATION FEES
<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
TREASURY PORTFOLIO
Period ended August 31, 1997 $18,128 $18,128 $0
Year ended March 31, 1997 41,274 $41,274 $0
Year ended March 31, 1996
</TABLE>

TABLE 3 - SHAREHOLDER SERVICE AND DISTRIBUTION FEES

Not Applicable.

TABLE 4 - TRANSFER AGENT FEES

Not Applicable.

TABLE 5 - PORTFOLIO ACCOUNTING FEES
<TABLE>
<S> <C> <C> <C>
GROSS FEE FEE WAIVED NET FEE PAID
TREASURY PORTFOLIO
Period ended August 31, 1997 $20,000 $0 $20,000
Year ended March 31, 1997 $48,000 $0 $48,000
Year ended March 31, 1996
</TABLE>

TABLE 6 - 5% SHAREHOLDERS

As of April 1, 1998, no shares of the Fund were outstanding.

40
<PAGE>

PART C
OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(A) FINANCIAL STATEMENTS.

Included in the Prospectus (Crown Cash Fund):

Not Applicable.

Incorporated by Reference into the Statement of Additional Information
(Crown Cash Fund):

Not Applicable.

(B) EXHIBITS.

(1) Trust Instrument (Note A).
(2) Bylaws (Note A).
(3) None.
(4) Form of Certificate for Shares (Note A).
(5) None.
(6) Distribution Agreement between Registrant and Forum Financial
Services, Inc. -- Treasury Cash Fund, Government Cash Fund and
Cash Fund (Note A).
(7) None.
(8) Custodian Agreement between Registrant and Imperial Trust
Company (Note A).
(9) (a) Administration Agreement between Registrant and Forum
Administrative Services, LLC (Note A).
(b) Transfer Agency Agreement between Registrant and
Forum Financial Corp. (Note A).
(c) Shareholder Service Plan -- Treasury Cash Fund,
Government Cash Fund and Cash Fund (Note A).
(d) Fund Accounting Agreement between Registrant and
Forum Accounting Services, LLC (Note A).
(10) Opinion of Kirkpatrick & Lockhart LLP (Note A).
(11) Not Applicable.
(12) None.
(13) Investment Representation letter (Note A).
(14) None.
(15) (a) Rule 12b-1 Plan -- Treasury Cash Fund, Government
Cash Fund and Cash Fund (Note A).
(b) Shareholder Service and Distribution Plan -- Crown
Cash Fund (to be filed by subsequent amendment).
(16) Schedule for Computation of Performance (Note A).
(17) Not applicable.
(18) Rule 18f-3 Plan (Note A).

Other Exhibits:
(A) Powers of Attorney, Maurice J. DeWald, Jack J. Singer,
John Y. Keffer, Rudolph I. Estrada and
Robert M. Franko, Trustees of Registrant (Note A).
(B) Powers of Attorney, John Y. Keffer, James C. Cheng,
J. Michael Parish and Costas Azariadis, Trustee of
Core Trust (Delaware) (Note A).

Note A: Filed as an exhibit to Post-Effective Amendment No. 15 to Registrant's
Registration Statement on Form N-1A, file number 33-49750, on December 19, 1997,
and incorporated herein by reference.

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<PAGE>

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

Due to the ownership interest of Cash Fund, Government Cash Fund and Treasury
Cash Fund of Cash Portfolio, Government Cash Portfolio and Treasury Cash
Portfolio of Core Trust (Delaware), the Funds may be deemed to control those
portfolios.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES AS OF FEBRUARY 20, 1997.

Title of Class of Shares
of Beneficial Interest Number of Holders
---------------------- -----------------

Cash Fund
Universal Class 2
Institutional Class 43
Investor Class 15
Government Cash Fund
Universal Class 40
Institutional Class 184
Investor Class 0
Treasury Cash Fund
Universal Class 0
Institutional Class 24
Investor Class 30
Crown Cash Fund 0

ITEM 27. INDEMNIFICATION.

The Registrant's response to Item 27 of Post-Effective Amendment No. 4 to
Registration Statement on Form N-1A filed on January 15, 1994 (file number
33-49570) is incorporated herein by reference.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS.

The description of Forum Investment Advisors, LLC (investment adviser to each of
Treasury Cash Portfolio, Government Cash Portfolio, Cash Portfolio and Treasury
Portfolio of Core Trust (Delaware)) under the caption "Management" in the
Prospectuses and Statements of Additional Information, constituting certain of
Parts A and B, respectively, of this Registration Statement, are incorporated by
reference herein.

The following are the members of Forum Investment Advisors, LLC, Two Portland
Square, Portland, Maine 04101, including their business connections which are of
a substantial nature.

Forum Holdings Corp., Member.
Forum Financial Group, LLC., Member.

Both Forum Holdings Corp. and Forum Financial Group, LLC are controlled by John
Y. Keffer, Chairman and President of the Registrant. Mr. Keffer is President of
Forum Financial Group, LLC. Mr. Keffer is also a director and/or officer of
various registered investment companies for which the various Forum Financial
Group of Companies provides services.

The following are the officers of Forum Investment Advisors, LLC, including
their business connections which are of a substantial nature. Each officer may
serve as an officer of various registered investment companies for which the
Forum Financial Group of Companies provides services.

42
<PAGE>

William J. Lewis, Director.
Director of Forum Investment Advisors, LLC.

Sara M. Morris, Treasurer.
Chief Financial Officer, Forum Financial Group, LLC. Ms. Morris serves
as an officer of several other Forum affiliated companies.

David I. Goldstein, Secretary.
General Counsel, Forum Financial Group, LLC. Mr. Goldstein serves as
an officer of several other Forum affiliated companies.

Dana A. Lukens, Assistant Secretary.
Corporate Counsel, Forum Financial Group, LLC. Mr. Lukens also serves
as an officer of several other Forum affiliated companies.

Margaret J. Fenderson, Assistant Treasurer.
Corporate Accounting Manager, Forum Financial Group, LLC. Ms.
Fenderson also serves as an officer of several other Forum affiliated
companies.

ITEM 29. PRINCIPAL UNDERWRITERS.

(a) Forum Financial Services, Inc., Registrant's underwriter, serves as
underwriter for the following investment companies registered under the
investment Company Act of 1940, as amended.:
<TABLE>
<S> <C>
The CRM Funds BT Alex. Brown Cash Reserve Fund, Inc.
The Cutler Trust Flag Investors Telephone Income Fund, Inc.
Forum Funds Flag Investors International Fund, Inc.
The Highland Family of Funds Flag Investors Emerging Growth Fund, Inc.
Norwest Advantage Funds Total Return U.S. Treasury Fund, Inc.
Norwest Select Funds Managed Municipal Fund, Inc.
Monarch Funds Flag Investors Value Builder Fund, Inc.
Sound Shore Fund, Inc. Flag Investors Real Estate Securities Fund, Inc.
Flag Investors Equity Partners Fund, Inc.
Flag Investors Maryland Intermediate Tax-Free
Income Fund, Inc.
Flag Investors Short-Intermediate Income Fund, Inc.
The Glenmede Portfolios
The Glenmede Fund, Inc.
</TABLE>

(b) the following directors and officers of Forum Financial Services, Inc.,
Registrant's underwriter, hold the following positions with registrant. Their
business address is Two Portland Square, Portland, Maine 04101.
<TABLE>
<S> <C> <C>
Name Position with Underwriter Position with Registrant
---- ------------------------- ------------------------
John Y. Keffer President Chairman and President
David I. Goldstein Secretary Vice President
Sara M. Morris Treasurer Treasurer
</TABLE>

ITEM 30. LOCATION OF BOOKS AND RECORDS.

The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules
thereunder are maintained at the offices of Forum Financial Services, Inc., Two
Portland Square, Portland, Maine 04101, and Forum Financial Corp., Two Portland
Square,

43
<PAGE>

Portland, Maine 04101. The records required to be maintained under Rule
31a-1(b)(1) with respect to journals of receipts and deliveries of securities
and receipts and disbursements of cash are maintained at the offices of the
Registrant's custodian, as listed under "Custodian" in Part B to this
Registration Statement. The records required to be maintained under Rule
31a-1(b)(5), (6) and (9) are maintained at the offices of the Registrant's
adviser, as listed in Item 28 hereof.

ITEM 31. MANAGEMENT SERVICES.

Not Applicable.

ITEM 32. UNDERTAKINGS.

Registrant undertakes to:

(i) contain in its Trust Instrument or Bylaws provisions for assisting
shareholder communications and for the removal of trustees
substantially similar to those provided for in Section 16(c) of the
Investment Company Act of 1940, except to the extent such provisions
are mandatory or prohibited under applicable Delaware law.

(ii) file a post-effective amendment, using noncertified financial
statements, within four to six months from the effective date of this
Post Effective Amendment Number 16 with respect to Crown Cash Fund.

44
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, Registrant has duly caused this amendment to its
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Portland and State of Maine on the 19th day of
February, 1998.

MONARCH FUNDS

By: /s/ John Y. Keffer
--------------------
John Y. Keffer
President

Pursuant to the requirements of the Securities Act of 1933, this amendment to
the Registration Statement has been signed below by the following persons on the
19th day of February, 1998.

SIGNATURES TITLE

(a) Principal Executive Officer

/s/ John Y. Keffer Chairman, President
----------------------------
John Y. Keffer

(b) Principal Financial and Accounting Officer

/s/ Sara M. Morris Treasurer
----------------------------
Sara M. Morris

/s/ John Y. Keffer Trustee
----------------------------
John Y. Keffer

Rudolph I. Estrada Trustee
Maurice J. DeWald Trustee
Robert M. Franko Trustee
Jack J. Singer Trustee

By: /s/ John Y. Keffer
-------------------------
John Y. Keffer
Attorney in Fact*

* Pursuant to powers of attorney filed as Exhibits A, C, H and I to the
Registrant's Registration Statement.

45
<PAGE>

SIGNATURES

On behalf of Core Trust (Delaware), being duly authorized, I have duly caused
this amendment to the Registration Statement of Monarch Funds to be signed in
the City of Portland, State of Maine on the 19th day of February, 1998.

CORE TRUST (DELAWARE)

By: /s/ John Y. Keffer
------------------------
John Y. Keffer
President

This amendment to the Registration Statement of Core Trust (Delaware) has been
signed below by the following persons in the capacities indicated on the 19th of
February, 1998.

SIGNATURES TITLE

(a) Principal Executive Officer

/s/ John Y. Keffer Chairman and
----------------------------- President
John Y. Keffer

(b) Principal Financial and
Accounting Officer

/s/ Sara M. Morris Treasurer
-----------------------------
Sara M. Morris

/s/ John Y. Keffer Chairman
-----------------------------
John Y. Keffer

Costas Azariadis Trustee
J. Michael Parish Trustee
James C. Cheng Trustee

By: /s/ John Y. Keffer
--------------------------
John Y. Keffer*
Attorney in Fact

* Pursuant to powers of attorney filed as Exhibits F and G to this Registration
Statement.

46
<PAGE>

INDEX TO EXHIBITS

Sequential
Exhibit Page Number
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