<PAGE>
M O N A R C H F U N D S
- --------------------------------------
- --------------------------------------
Treasury Cash Fund
Government Cash Fund
Cash Fund
ANNUAL REPORT
August 31, 1999
- --------------------------------------------------------------------------------
Dear Shareholders:
We are pleased to report that during the past year combined assets of the
Monarch Funds hit the $2 billion mark. We ended the year at over $1.9 billion -
up from $1.5 billion since our semi-annual report at the end of February. In
addition to this growth, we are again pleased to report that Monarch's
Government Cash Fund, our oldest fund and performance leader, continued to
exhibit truly impressive performance. For the five years ended September 30,
1999, Universal Shares of the Fund were ranked #1 for total return out of 50
funds in the Government and Agencies Institutional category (as tracked by IBC
Financial Data, Inc.'s MONEY FUND REPORT AVERAGES-TM- for that period)(1). As
usual, we caution you to remember that investment return will fluctuate and past
performance is not a guarantee of future results.
This past year was also successful for Treasury Cash Fund and Cash Fund.
Investor Shares' assets in these funds nearly doubled since last year,
increasing from $240 million to over $500 million. Offered since late 1995, this
share class has lower investment minimums as well as check writing privileges,
features designed to appeal to a broader range of investors. Universal and
Institutional Shares, which are designed and customized to meet the needs of the
business community, also continue to attract new investors.
The Funds have fared well over the last twelve months. Yields remained
competitive despite two Federal Funds rate increases since the beginning of
1999. Our portfolio management team kept the Funds positioned to respond to
market conditions throughout the fiscal year. We also want to reassure you that
the Funds' service providers have established contingency plans, which are being
tested, and that they stand ready to respond quickly to any Y2K related issues
that may arise. Key staff will also be on hand the weekend of January 1 and 2 to
verify that all programs and systems are working.
Your continued confidence and support are truly appreciated as we approach our
eighth year. Outstanding performance and maintenance of your $1.00 per share
price through skilled portfolio management are, as always, our primary concerns.
Please feel free to call us with your questions or comments at (800) 754-8757.
Sincerely,
/s/ John Y. Keffer
John Y. Keffer
Chairman
(1)The Fund also ranked #9 out of 93 funds for the year ended September 30,
1999.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF MONARCH FUNDS
<S> <C>
Independent Auditors' Report.............. 2
Statements of Assets and Liabilities...... 3
Statements of Operations.................. 4
Statements of Changes in Net Assets....... 5
Financial Highlights...................... 6
Notes to Financial Statements............. 7
FINANCIAL STATEMENTS OF CORE TRUST
(DELAWARE)............................... 10
</TABLE>
- --------------------------------------------------------------------------------
ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS. AN INVESTMENT IN
THE FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY, AND IS NOT ENDORSED OR GUARANTEED BY
ANY BANK OR ANY AFFILIATE OF A BANK. THIS REPORT IS AUTHORIZED FOR DISTRIBUTION
ONLY TO CURRENT SHAREHOLDERS AND TO OTHERS WHO HAVE RECEIVED A COPY OF A MONARCH
FUNDS PROSPECTUS.
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
Monarch Funds
We have audited the accompanying statements of assets and liabilities of
Treasury Cash Fund, Government Cash Fund, and Cash Fund, each a series of
Monarch Funds (the Funds), as of August 31, 1999, and the related statements of
operations for the year then ended, statements of changes in net assets for each
of the years in the two-year period then ended and financial highlights for each
of the years or periods in the five-year period then ended. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Treasury Cash Fund, Government Cash Fund, and Cash Fund, as of August 31, 1999,
the results of their operations for the year then ended, changes in their net
assets for each of the years in the two-year period then ended and financial
highlights for each of the years or periods in the five-year period then ended,
in conformity with generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
October 8, 1999
2
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
---- ---- ----
<S> <C> <C> <C>
ASSETS:
Investment in Portfolios at value (Notes 1 and
2).............................................. $288,047,582 $734,323,278 $938,573,107
Prepaid expenses.................................. 3,206 14,655 9,521
------------ ------------ ------------
Total assets........................................ 288,050,788 734,337,933 938,582,628
------------ ------------ ------------
LIABILITIES:
Dividends payable................................. 104,642 1,310,249 562,385
Payable to Administrator (Note 3)................. 8,219 18,689 23,131
Accrued expenses.................................. 179,851 221,530 462,273
------------ ------------ ------------
Total liabilities................................... 292,712 1,550,468 1,047,789
------------ ------------ ------------
NET ASSETS.......................................... $287,758,076 $732,787,465 $937,534,839
============ ============ ============
COMPONENTS OF NET ASSETS:
Paid in capital................................... $287,751,243 $732,870,294 $937,553,982
Undistributed (distributions in excess of) net
investment income............................... 12,848 (34,950) --
Accumulated net realized loss..................... (6,015) (47,879) (19,143)
------------ ------------ ------------
NET ASSETS.......................................... $287,758,076 $732,787,465 $937,534,839
============ ============ ============
NET ASSETS BY CLASS OF SHARES:
Universal Shares.................................. $ -- $277,548,471 $ 98,705,414
Institutional Shares.............................. 55,134,251 455,238,994 569,408,703
Investor Shares................................... 232,623,825 -- 269,420,722
------------ ------------ ------------
NET ASSETS.......................................... $287,758,076 $732,787,465 $937,534,839
============ ============ ============
SHARES OF BENEFICIAL INTEREST:
Universal Shares.................................. -- 277,600,810 98,705,805
Institutional Shares.............................. 55,129,247 455,269,485 569,421,752
Investor Shares................................... 232,621,997 -- 269,426,422
NET ASSET VALUE PER SHARE (OFFERING AND
REDEMPTION PRICE PER SHARE)....................... $ 1.00 $ 1.00 $ 1.00
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
---- ---- ----
<S> <C> <C> <C>
NET INVESTMENT INCOME ALLOCATED FROM
PORTFOLIOS:
Interest income..................................... $9,747,355 $42,068,211 $35,858,734
Net expenses........................................ (276,821) (1,001,339) (848,701)
---------- ----------- -----------
Net investment income allocated from Portfolios (Note
2)................................................... 9,470,534 41,066,872 35,010,033
---------- ----------- -----------
EXPENSES:
Administration (Note 3).............................
Universal Shares.................................. -- 148,197 31,563
Institutional Shares.............................. 34,861 266,729 197,840
Investor Shares................................... 65,363 -- 119,819
Transfer Agent (Note 3).............................
Universal Shares.................................. -- 187,820 40,499
Institutional Shares.............................. 149,403 1,084,918 803,870
Investor Shares................................... 273,259 -- 488,963
Shareholder Services (Note 3).......................
Institutional Shares.............................. 139,443 1,066,916 791,359
Investor Shares................................... 261,452 -- 479,276
Distribution--Investor Shares (Note 3).............. 326,815 -- 599,096
Legal............................................... 2,876 13,160 9,753
Audit............................................... 3,735 8,240 7,299
Trustees............................................ 5,610 25,663 19,206
Miscellaneous....................................... 57,226 50,902 124,936
---------- ----------- -----------
Total expenses........................................ 1,320,043 2,852,545 3,713,479
Fees waived (Note 4)................................ (194,361) (267,621) (191,030)
---------- ----------- -----------
Net expenses.......................................... 1,125,682 2,584,924 3,522,449
---------- ----------- -----------
NET INVESTMENT INCOME................................. 8,344,852 38,481,948 31,487,584
NET REALIZED GAIN (LOSS) ON INVESTMENTS
ALLOCATED FROM PORTFOLIOS (Note 2)................... (6,015) 23,462 (540)
---------- ----------- -----------
NET INCREASE IN NET ASSETS FROM OPERATIONS............ $8,338,837 $38,505,410 $31,487,044
========== =========== ===========
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED AUGUST 31, 1998 AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
FUND FUND FUND
---- ---- ----
<S> <C> <C> <C>
NET ASSETS--AUGUST 31, 1997........................................... $ 70,948,273 $ 475,566,735 $ 246,974,489
- ---------------------------- --------------- --------------- ---------------
OPERATIONS:
Net investment income............................................... 4,847,158 32,746,304 20,646,746
Net realized gain (loss) on investments allocated from Portfolios... 6,934 (43,518) 896
--------------- --------------- ---------------
Net increase in net assets from operations............................ 4,854,092 32,702,786 20,647,642
--------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income--Universal Shares............................. -- (12,434,504) (2,829,163)
Net investment income--Institutional Shares......................... (2,730,320) (20,311,800) (11,009,468)
Net investment income--Investor Shares.............................. (2,116,838) -- (6,808,115)
--------------- --------------- ---------------
Total distributions to shareholders................................... (4,847,158) (32,746,304) (20,646,746)
--------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS (at $1.00 per share):
Sale of shares--Universal Shares.................................... -- 5,089,256,401 1,364,748,919
Sale of shares--Institutional Shares................................ 792,223,786 2,912,199,423 774,989,103
Sale of shares--Investor Shares..................................... 337,141,622 -- 1,421,668,593
Reinvestment of distributions--Universal Shares..................... -- 6,626,988 2,264,797
Reinvestment of distributions--Institutional Shares................. 899,824 10,058,549 5,703,260
Reinvestment of distributions--Investor Shares...................... 2,094,927 -- 6,808,022
Redemption of shares--Universal Shares.............................. -- (5,072,628,157) (1,293,795,619)
Redemption of shares--Institutional Shares.......................... (742,834,980) (2,723,774,548) (633,514,099)
Redemption of shares--Investor Shares............................... (311,401,119) -- (1,323,203,441)
--------------- --------------- ---------------
Net increase from capital transactions................................ 78,124,060 221,738,656 325,669,535
--------------- --------------- ---------------
Net increase in net assets............................................ 78,130,994 221,695,138 325,670,431
--------------- --------------- ---------------
NET ASSETS--AUGUST 31, 1998 (INCLUDING (A))........................... 149,079,267 697,261,873 572,644,920
- ------------------------------------------ --------------- --------------- ---------------
OPERATIONS:
Net investment income............................................... 8,344,852 38,481,948 31,487,584
Net realized gain (loss) on investments allocated from Portfolios... (6,015) 23,462 (540)
--------------- --------------- ---------------
Net increase in net assets from operations............................ 8,338,837 38,505,410 31,487,044
--------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income--Universal Shares............................. -- (14,457,237) (3,148,222)
Net investment income--Institutional Shares......................... (3,087,529) (24,024,711) (18,027,323)
Net investment income--Investor Shares.............................. (5,244,477) -- (10,312,039)
Net realized gain on investments--Institutional Shares.............. (2,466) -- --
Net realized gain on investments--Investor Shares................... (10,380) -- --
--------------- --------------- ---------------
Total distributions to shareholders................................... (8,344,852) (38,481,948) (31,487,584)
--------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS (at $1.00 per share):
Sale of shares--Universal Shares.................................... -- 4,992,484,737 1,617,048,054
Sale of shares--Institutional Shares................................ 1,124,348,109 3,506,430,546 1,884,729,920
Sale of shares--Investor Shares..................................... 942,002,721 -- 1,768,540,044
Reinvestment of distributions--Universal Shares..................... -- 8,688,552 2,084,403
Reinvestment of distributions--Institutional Shares................. 618,067 12,692,772 11,407,856
Reinvestment of distributions--Investor Shares...................... 5,248,499 -- 10,302,231
Redemption of shares--Universal Shares.............................. -- (4,977,278,007) (1,612,097,627)
Redemption of shares--Institutional Shares.......................... (1,160,952,295) (3,507,516,470) (1,625,948,769)
Redemption of shares--Investor Shares............................... (772,580,277) -- (1,691,175,653)
--------------- --------------- ---------------
Net increase from capital transactions................................ 138,684,824 35,502,130 364,890,459
--------------- --------------- ---------------
Net increase in net assets............................................ 138,678,809 35,525,592 364,889,919
--------------- --------------- ---------------
NET ASSETS--AUGUST 31, 1999 (INCLUDING (B))........................... $ 287,758,076 $ 732,787,465 $ 937,534,839
- ------------------------------------------ =============== =============== ===============
(A) Undistributed (distributions in excess of) net investment income,
August 31, 1998....................................................... $ -- $ (34,950) $ --
(B) Undistributed (distributions in excess of) net investment income,
August 31, 1999....................................................... $ 12,848 $ (34,950) $ --
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
These financial highlights reflect selected data for a share of each class of
each Fund outstanding during the years or periods indicated.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE
NET ASSETS
BEGINNING DISTRIBUTIONS -----------------------
NET ASSET NET FROM NET ENDING NET NET
VALUE PER INVESTMENT INVESTMENT ASSET VALUE NET INVESTMENT
SHARE INCOME INCOME PER SHARE EXPENSES INCOME
----- ------ ------ --------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
TREASURY CASH FUND
Institutional Shares
Year ended August 31, 1999.......... $ 1.00 $ 0.04 $ (0.04) $ 1.00 0.45% 4.43%
Year ended August 31, 1998.......... 1.00 0.05 (0.05) 1.00 0.45% 5.00%
Year ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.45% 4.89%
Year ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.45% 5.01%
Year ended August 31, 1995.......... 1.00 0.05 (0.05) 1.00 0.42% 5.18%
Investor Shares
Year ended August 31, 1999.......... 1.00 0.04 (0.04) 1.00 0.83% 4.02%
Year ended August 31, 1998.......... 1.00 0.05 (0.05) 1.00 0.82% 4.62%
Year ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.83% 4.55%
October 25, 1995 - August 31,
1996................................ 1.00 0.04 (0.04) 1.00 0.83%(b) 4.50%(b)
GOVERNMENT CASH FUND
Universal Shares
Year ended August 31, 1999.......... 1.00 0.05 (0.05) 1.00 0.18% 4.88%
Year ended August 31, 1998.......... 1.00 0.05 (0.05) 1.00 0.18% 5.48%
Year ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.17% 5.35%
Year ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.19% 5.43%
Year ended August 31, 1995.......... 1.00 0.06 (0.06) 1.00 0.24% 5.46%
Institutional Shares
Year ended August 31, 1999.......... 1.00 0.05 (0.05) 1.00 0.57% 4.50%
Year ended August 31, 1998.......... 1.00 0.05 (0.05) 1.00 0.57% 5.09%
Year ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.57% 4.95%
Year ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.57% 5.06%
Year ended August 31, 1995.......... 1.00 0.05 (0.05) 1.00 0.54% 5.39%
CASH FUND
Universal Shares
Year ended August 31, 1999.......... 1.00 0.05 (0.05) 1.00 0.18% 4.99%
Year ended August 31, 1998.......... 1.00 0.06 (0.06) 1.00 0.18% 5.48%
Year ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.23% 5.32%
Year ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.27% 5.48%
Year ended August 31, 1995.......... 1.00 0.06 (0.06) 1.00 0.27% 5.59%
Institutional Shares
Year ended August 31, 1999.......... 1.00 0.05 (0.05) 1.00 0.57% 4.56%
Year ended August 31, 1998.......... 1.00 0.05 (0.05) 1.00 0.57% 5.11%
Year ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.57% 4.97%
Year ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.57% 5.10%
Year ended August 31, 1995.......... 1.00 0.05 (0.05) 1.00 0.54% 5.33%
Investor Shares
Year ended August 31, 1999.......... 1.00 0.04 (0.04) 1.00 0.83% 4.30%
Year ended August 31, 1998.......... 1.00 0.05 (0.05) 1.00 0.83% 4.86%
Year ended August 31, 1997.......... 1.00 0.05 (0.05) 1.00 0.83% 4.72%
Year ended August 31, 1996.......... 1.00 0.05 (0.05) 1.00 0.83% 4.68%
June 16, 1995 - August 31, 1995..... 1.00 0.01 (0.01) 1.00 0.84%(b) 5.32%(b)
<CAPTION>
RATIO TO
NET ASSETS AVERAGE NET
AT END OF ASSETS
PERIOD ------
TOTAL (000'S GROSS
RETURN OMITTED) EXPENSES(A)
------ -------- -----------
<S> <C> <C> <C>
TREASURY CASH FUND
Institutional Shares
Year ended August 31, 1999.......... 4.50% $ 55,134 0.62%
Year ended August 31, 1998.......... 5.11% 91,122 0.67%
Year ended August 31, 1997.......... 4.98% 40,830 0.66%
Year ended August 31, 1996.......... 5.15% 79,259 0.69%
Year ended August 31, 1995.......... 5.28% 28,530 0.86%
Investor Shares
Year ended August 31, 1999.......... 4.10% 232,624 0.89%
Year ended August 31, 1998.......... 4.72% 57,957 0.91%
Year ended August 31, 1997.......... 4.58% 30,118 0.97%
October 25, 1995 - August 31,
1996................................ 4.00% 3,980 1.33%(b)
GOVERNMENT CASH FUND
Universal Shares
Year ended August 31, 1999.......... 5.00% 277,548 0.25%
Year ended August 31, 1998.......... 5.63% 253,644 0.26%
Year ended August 31, 1997.......... 5.49% 230,410 0.26%
Year ended August 31, 1996.......... 5.59% 248,986 0.28%
Year ended August 31, 1995.......... 5.78% 182,546 0.52%
Institutional Shares
Year ended August 31, 1999.......... 4.59% 455,239 0.59%
Year ended August 31, 1998.......... 5.22% 443,618 0.58%
Year ended August 31, 1997.......... 5.06% 245,157 0.57%
Year ended August 31, 1996.......... 5.18% 256,244 0.57%
Year ended August 31, 1995.......... 5.46% 186,620 0.66%
CASH FUND
Universal Shares
Year ended August 31, 1999.......... 5.09% 98,705 0.25%
Year ended August 31, 1998.......... 5.65% 91,671 0.29%
Year ended August 31, 1997.......... 5.43% 18,453 0.47%
Year ended August 31, 1996.......... 5.53% 3,272 0.43%
Year ended August 31, 1995.......... 5.75% 26,525 0.56%
Institutional Shares
Year ended August 31, 1999.......... 4.68% 569,409 0.60%
Year ended August 31, 1998.......... 5.24% 299,220 0.61%
Year ended August 31, 1997.......... 5.07% 152,041 0.60%
Year ended August 31, 1996.......... 5.22% 89,733 0.60%
Year ended August 31, 1995.......... 5.23% 73,802 0.69%
Investor Shares
Year ended August 31, 1999.......... 4.41% 269,421 0.85%
Year ended August 31, 1998.......... 4.97% 181,754 0.86%
Year ended August 31, 1997.......... 4.81% 76,480 0.85%
Year ended August 31, 1996.......... 4.95% 32,731 0.96%
June 16, 1995 - August 31, 1995..... 1.13% 4,665 3.76%(b)
</TABLE>
(a) The ratio of Gross Expenses to Average Net Assets reflects the expense
ratio excluding any fee waivers and expense reimbursements for the Fund and
its corresponding Portfolio.
(b) Annualized.
See Notes to Financial Statements.
6
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF ORGANIZATION
Monarch Funds (the "Trust") was organized as a Delaware business trust on July
10, 1992. The Trust, which is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, (the "Act"),
currently has three diversified investment portfolios, Treasury Cash Fund,
Government Cash Fund and Cash Fund (individually, a "Fund" and, collectively,
the "Funds"). The Funds are authorized under the Trust's Trust Instrument to
issue an unlimited number of shares of beneficial interest without par value.
Each Fund currently is authorized to issue three classes of shares, Universal
Shares, Institutional Shares and Investor Shares. The Trust commenced the
offering of each class of shares as follows and no other class of shares
currently is outstanding:
<TABLE>
<S> <C>
Treasury Cash Fund (Institutional Shares) July 12, 1993
Treasury Cash Fund (Investor Shares) October 25, 1995
Government Cash Fund (Universal Shares) October 29, 1992
Government Cash Fund (Institutional Shares) July 15, 1993
Cash Fund (Universal Shares) December 1, 1992
Cash Fund (Institutional Shares) July 15, 1993
Cash Fund (Investor Shares) June 16, 1995
</TABLE>
MASTER FEEDER ARRANGEMENT-Each Fund currently seeks to achieve its investment
objective by investing all its investable assets in a separate portfolio
(individually, a "Portfolio" and, collectively, the "Portfolios") of Core Trust
(Delaware) ("Core Trust"), a registered open-end management investment company
that has the same investment objective and substantially similar policies as the
Fund. Accordingly, each Portfolio directly acquires securities, and a Fund
investing in the Portfolio acquires an indirect interest in those securities.
Each Fund accounts for its investment in a Portfolio as a partnership
investment, and records daily its share of the Portfolio's income, expenses and
realized and unrealized gain and loss. Each Fund may withdraw its investment
from its corresponding Portfolio at any time if the Trust's Board of Trustees
(the "Board") determines that it is in the best interest of the Fund and its
shareholders to do so. This is commonly referred to as a master-feeder
arrangement.
The financial statements of the Portfolios are included elsewhere in this report
and should be read in conjunction with the Funds' financial statements. As of
August 31, 1999, the percentage of Treasury Cash Portfolio owned by Treasury
Cash Fund was 73.3%; the percentage of Government Cash Portfolio owned by
Government Cash Fund was 93.7%; and the percentage of Cash Portfolio owned by
Cash Fund was 90.5%.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are prepared in accordance with generally accepted
accounting principles which require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets during the fiscal
period. Actual results could differ from those estimates. The following
summarizes the significant accounting policies of the Funds:
SECURITY VALUATION-Each Fund determines its net asset value per share as of 1:00
p.m., Pacific time, on each business day. Each Fund records its investment in
its Portfolio at value. Valuation of securities held in the Portfolios is
discussed in the Notes to Financial Statements of Core Trust (Delaware), which
are included elsewhere in this report.
INVESTMENT INCOME AND EXPENSES-Each Fund records daily its pro rata share of its
Portfolio's income, expenses and realized gain and loss. In addition, each Fund
accrues its own expenses.
7
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
CLASS SPECIFIC EXPENSES-Each share of each class of a Fund represents an
undivided, proportionate interest in the Fund. The Funds' class specific
expenses include administration fees, shareholder servicing fees, transfer agent
fees and certain other expenses as determined by the Board. Institutional Shares
and Investor Shares incur shareholder servicing fees and Investor Shares incur
distribution fees. In addition, there are differences between the classes of
shares with respect to the minimum investment required.
FEDERAL TAXES-Each Fund intends to continue to qualify each year as a regulated
investment company and distribute all its net investment income. In addition, by
distributing in each calendar year substantially all its net investment income,
capital gain and certain other amounts, each Fund will not be subject to a
federal excise tax. Therefore, no federal income or excise tax provision is
required.
As of August 31, 1999, certain Funds had capital loss carryovers available to
offset future capital gains as follows: Cash Fund - $6,210 expiring in 2004 and
$10,851 expiring in 2005; Government Cash Fund - $6,661 expiring in 2005 and
$40,840 expiring in 2006.
DISTRIBUTIONS TO SHAREHOLDERS-Distributions to shareholders of net investment
income are declared daily and paid monthly. Net capital gain, if any, is
distributed to shareholders at least annually. Distributions are based on
amounts calculated in accordance with applicable income tax regulations, which
may differ from generally accepted accounting principles. These differences are
due primarily to differing treatments of income and gain on various investment
securities held by each Fund or Portfolio, timing differences and differing
characterizations of distributions made by the Fund.
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER-The investment adviser of each Portfolio is Forum Investment
Advisors, LLC ("Forum Advisors"). Forum Advisors receives an advisory fee from
each Portfolio based upon the total average daily net assets of the Portfolios
("Total Portfolio Assets") that is calculated on a cumulative basis at the
following annual rates: 0.06% for the first $200 million of Total Portfolio
Assets, 0.04% of the next $300 million of Total Portfolio Assets and 0.03% of
the remaining Total Portfolio Assets.
ADMINISTRATOR-The administrator of each Fund is Forum Administrative Services,
LLC ("FAdS"). For its administrative services and facilities, FAdS receives from
each Fund an administration fee at an annual rate of 0.05% of the Fund's average
daily net assets. In addition, certain legal expenses are charged to the Funds
by FAdS.
TRANSFER AGENT-The transfer agent and dividend disbursing agent for the Funds is
Forum Shareholder Services, LLC ("FSS"). FSS is paid a transfer agent fee at an
annual rate of 0.20% of the average daily net assets of Institutional Shares and
Investor Shares of each Fund and 0.05% of the average daily net assets of
Universal Shares of each Fund, plus certain account and additional Fund and
class charges.
SHAREHOLDER SERVICE AGENT-The Trust has adopted a shareholder servicing plan
with respect to Institutional Shares and Investor Shares under which the Trust
pays FAdS a shareholder servicing fee at an annual rate of 0.20% of the average
daily net assets attributable to Institutional Shares and Investor Shares of
each Fund. FAdS may pay any or all amounts of these fees to various institutions
that provide shareholder servicing to their customers who hold Institutional
Shares or Investor Shares.
DISTRIBUTOR-Forum Fund Services, LLC ("FFS"), a registered broker-dealer and a
member of the National Association of Securities Dealers, Inc., acts as each
Fund's distributor. The Trust has adopted a Distribution Plan pursuant to Rule
12b-1 under the Act with respect to Investor Shares under which the Trust pays
FFS a distribution fee at an annual rate of 0.25% of the average daily net
assets of Investor Shares of each Fund. FFS may pay any or all amounts of these
payments to various institutions that provide distribution or shareholder
services for Investor Shares. The plan obligates the Funds to pay FFS as
compensation for FFS's
8
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
services and not as reimbursement for certain expenses incurred. Prior to
January 16, 1999, Forum Financial Services, Inc. provided distribution services
to the Funds for which it received the same compensation as FFS.
NOTE 4. WAIVER OF FEES
FAdS, FSS and FFS (and the Funds' predecessor distributor) have voluntarily
waived a portion of their fees. For the year ended August 31, 1999, the Funds'
service providers voluntarily waived fees as follows: Investor Shares
shareholder servicing fee: Treasury Cash Fund, $75,916, and Cash Fund, $32,940;
Institutional Shares shareholder servicing fee: Treasury Cash Fund, $118,445,
Government Cash Fund, $73,895, and Cash Fund, $114,258; Universal Shares
administration and transfer agent fees: Government Cash Fund, $45,529 and
$148,197, respectively, and Cash Fund, $12,269 and $31,563, respectively.
9
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Interestholders
Core Trust (Delaware)
We have audited the accompanying statements of assets and liabilities of
Treasury Cash Portfolio, Government Cash Portfolio, and Cash Portfolio, each a
series of Core Trust (Delaware) (the Portfolios), including the schedules of
investments, as of August 31, 1999, and the related statements of operations for
the year then ended and the statements of changes in net assets for each of the
years in the two-year period then ended. These financial statements are the
responsibility of the Portfolios' management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of August 31, 1999 by correspondence with
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Treasury Cash Portfolio,
Government Cash Portfolio, and Cash Portfolio as of August 31, 1999, the results
of their operations for the year then ended and the changes in their net assets
for each of the years in the two-year period then ended, in conformity with
generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
October 8, 1999
10
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- TREASURY CASH PORTFOLIO
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------ ------------
<C> <S> <C>
U.S. TREASURY BILLS (A) (76.1%)
$250,000,000 5.27%, 9/15/99................ $249,497,362
50,000,000 4.53%, 10/21/99............... 49,692,361
------------
Total U.S. Treasury Bills 299,189,723
------------
REPURCHASE AGREEMENTS (23.9%)
47,965,000 Bear, Stearns & Co., Inc.,
5.42%, 9/01/99, to be
repurchased at $47,972,221;
collateralized entirely by
various U.S. Treasury
Securities.................. 47,965,000
46,000,000 Donaldson, Lufkin & Jenrette
Securities Corp., 5.42%,
9/01/99, to be repurchased
at $46,006,926;
collateralized entirely by
various U.S. Treasury
Securities.................. 46,000,000
------------
Total Repurchase Agreements 93,965,000
------------
Total Investments (100%) at Amortized $393,154,723
Cost(+)
============
</TABLE>
(A) Annualized yields at time of purchase.
(+) Tax cost of investments is $393,154,723.
See Notes to Financial Statements.
11
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- GOVERNMENT CASH PORTFOLIO
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<C> <S> <C>
U. S. GOVERNMENT SECURITIES (77.2%)
FEDERAL HOME LOAN BANK (B) (5.1%)
$25,000,000 5.69%, 2/25/00................ $ 25,000,000
15,000,000 5.45%, 4/7/00................. 15,000,000
------------
Total Federal Home Loan Bank 40,000,000
------------
FEDERAL HOME LOAN BANK--DISCOUNT NOTES (A) (19.0%)
50,000,000 5.02%, 9/3/99................. 49,986,069
20,000,000 4.71%, 10/6/99................ 19,908,515
30,000,000 4.72%, 11/3/99................ 29,752,200
25,000,000 4.70%, 1/26/00................ 24,520,210
25,000,000 5.44%, 2/24/00................ 24,335,112
------------
Total Federal Home Loan Bank--Discount
Notes 148,502,106
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--DISCOUNT NOTES (A)
(38.6%)
28,940,000 5.00%, 9/2/99................. 28,935,977
111,103,000 4.97%, 9/14/99................ 110,903,601
30,000,000 4.71%, 10/7/99................ 29,858,850
28,000,000 4.72%, 10/8/99................ 27,864,313
55,000,000 4.70%, 10/12/99............... 54,705,684
25,000,000 5.41%, 2/24/00................ 24,338,779
25,000,000 5.42%, 2/25/00................ 24,333,793
------------
Total Federal National Mortgage
Association--Discount Notes 300,940,997
------------
SMALL BUSINESS ADMINISTRATION (B) (8.5%)
246,263 Pool #500545, 7.88%,
3/25/03..................... 246,263
676,416 Pool #501077, 6.50%,
11/25/14.................... 678,217
2,029,893 Pool #501308, 6.50%,
10/25/15.................... 2,067,172
1,733,279 Pool #501543, 6.38%,
7/25/16..................... 1,735,763
366,961 Pool #501628, 7.88%,
9/25/04..................... 366,961
739,972 Pool #501690, 6.13%,
12/25/16.................... 743,772
899,960 Pool #501898, 6.25%,
6/25/17..................... 904,664
3,964,934 Pool #502150, 6.00%,
2/25/18..................... 4,016,621
228,101 Pool #502161, 6.00%,
2/25/18..................... 228,101
2,074,259 Pool #502208, 6.00%,
2/25/18..................... 2,100,836
729,826 Pool #502306, 6.00%,
2/25/18..................... 737,153
1,026,988 Pool #502613, 6.00%,
4/25/19..................... 1,026,988
654,176 Pool #503058, 5.88%,
7/25/15..................... 654,176
1,269,899 Pool #503082, 5.88%,
8/25/20..................... 1,269,899
1,012,969 Pool #503120, 5.88%,
11/25/20.................... 1,012,969
361,205 Pool #503121, 5.88%,
8/25/15..................... 361,205
1,216,165 Pool #503232, 5.63%,
2/25/15..................... 1,216,165
712,890 Pool #503278, 5.63%,
2/25/21..................... 712,895
2,042,472 Pool #503431, 5.75%,
7/25/21..................... 2,043,556
</TABLE>
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<C> <S> <C>
SMALL BUSINESS ADMINISTRATION, CONTINUED:
$ 2,324,921 Pool #503461, 5.75%,
9/25/21..................... $ 2,326,149
1,184,693 Pool #503472, 5.75%,
8/25/21..................... 1,185,259
666,516 Pool #503553, 5.63%,
11/25/21.................... 664,930
4,930,935 Pool #503671, 5.63%,
3/25/22..................... 4,930,935
1,393,582 Pool #503754, 5.63%,
5/25/22..................... 1,393,582
830,604 Pool #503780, 5.63%,
3/25/22..................... 831,725
3,959,273 Pool #503882, 5.50%,
9/25/22..................... 3,954,484
2,803,638 Pool #503892, 5.63%,
7/25/22..................... 2,809,834
4,937,236 Pool #503909, 5.50%,
10/25/22.................... 4,934,322
2,209,203 Pool #504015, 5.50%,
1/25/23..................... 2,208,605
4,907,928 Pool #504062, 5.50%,
2/25/23..................... 4,907,928
3,882,474 Pool #504074, 5.50%,
2/25/23..................... 3,882,474
1,813,264 Pool #504203, 5.63%,
7/25/13..................... 1,819,568
1,565,582 Pool #504269, 5.63%,
5/25/15..................... 1,568,973
1,350,122 Pool #504345, 5.63%,
5/25/18..................... 1,350,122
5,671,146 Pool #504366, 5.38%,
2/25/24..................... 5,665,731
------------
Total Small Business Administration 66,557,997
------------
STUDENT LOAN MARKETING ASSOCIATION (B) (6.0%)
15,000,000 5.37%, 11/5/99................ 15,000,000
12,000,000 5.45%, 1/20/00................ 12,000,000
20,000,000 5.58%, 3/3/00................. 20,000,000
------------
Total Student Loan Marketing Association 47,000,000
------------
Total U.S. Government Securities 603,001,100
------------
REPUCHASE AGREEMENTS (22.8%)
100,000,000 Bear, Stearns & Co., Inc.,
5.35%, 9/7/99, to be
repurchased at $100,104,028;
collateralized entirely by
various U.S. Government
Agency Securities 100,000,000
78,240,000 Salomon Smith Barney, 5.42%,
9/1/99, to be repurchased at
$78,251,779; collateralized
entirely by various U.S.
Treasury Securities......... 78,240,000
------------
Total Repurchase Agreements 178,240,000
------------
Total Investments (100%) at Amortized $781,241,100
Cost(+)
============
</TABLE>
(A) Annualized yields at time of purchase.
(B) Certain securities are deemed to have a maturity remaining until the next
adjustment of the interest rate, or the longer of the demand period or
readjustment. The interest rates shown reflect the rate in effect on August
31, 1999.
(+) Tax cost of investments is $781,241,440.
See Notes to Financial Statements.
12
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- CASH PORTFOLIO
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- --------------
<C> <S> <C>
U. S. GOVERNMENT SECURITIES (8.0%)
FEDERAL HOME LOAN BANK (B) (2.4%)
$25,000,000 5.69%, 2/25/00.......................... $ 25,000,000
--------------
SMALL BUSINESS ADMINISTRATION (B) (4.1%)
156,062 Pool #500536, 7.00%, 5/25/13............ 157,210
417,975 Pool #500730, 7.88%, 2/25/04............ 420,926
933,834 Pool #501733, 6.00%, 2/25/17............ 946,112
705,234 Pool #501989, 6.13%, 10/25/12........... 708,042
142,581 Pool #502914, 6.00%, 3/25/15............ 142,707
1,444,820 Pool #503121, 5.88%, 8/25/15............ 1,444,820
3,166,579 Pool #503429, 5.75%, 6/25/16............ 3,166,579
581,230 Pool #503461, 5.75%, 9/25/21............ 581,545
2,455,550 Pool #503553, 5.63%, 11/25/21........... 2,449,135
2,090,373 Pool #503754, 5.63%, 5/25/22............ 2,090,373
3,783,635 Pool #503882, 5.50%, 9/25/22............ 3,779,054
4,228,835 Pool #503912, 5.50%, 10/25/22........... 4,226,095
4,220,496 Pool #504015, 5.50%, 1/25/23............ 4,219,237
17,868,320 Pool #504366, 5.38%, 2/26/24............ 17,851,081
--------------
Total Small Business Administration 42,182,916
--------------
STUDENT LOAN MARKETING ASSOCIATION (B) (1.5%)
15,000,000 5.37%, 11/5/99.......................... 15,000,000
--------------
Total U.S. Government Securities 82,182,916
--------------
COMMERCIAL PAPER (A) (56.1%)
20,000,000 American Express Credit Corp., 5.39%,
10/25/99.............................. 19,841,900
20,000,000 American Express Credit Corp., 5.90%,
2/23/00............................... 19,450,696
20,000,000 American Home Products, 5.95%,
2/25/00............................... 19,439,501
20,000,000 Associates Corp. of North America,
5.41%, 10/25/99....................... 19,841,301
20,000,000 Associates Corp. of North America,
5.92%, 2/24/00........................ 19,445,600
30,000,000 CIT Group Holdings, Inc., 5.19%,
9/2/99................................ 29,995,750
20,000,000 CIT Group Holdings, Inc., 5.22%,
9/7/99................................ 19,982,933
40,000,000 Daimler Chrysler, 5.21%, 9/8/99......... 39,960,256
35,000,000 Ford Motor Credit Corp.,
5.21%, 9/2/99......................... 34,995,013
15,000,000 Ford Motor Credit Corp.,
5.90%, 1/24/00........................ 14,656,834
10,000,000 General Electric Capital Corp., 5.23%,
9/2/99................................ 9,998,572
</TABLE>
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- --------------
<C> <S> <C>
$25,000,000 General Electric Capital Corp., 5.19%,
9/3/99................................ $ 24,992,931
15,000,000 General Electric Capital Corp., 5.92%,
2/22/00............................... 14,588,925
10,000,000 General Dynamics Corp.,
5.42%, 10/25/99....................... 9,920,500
10,000,000 General Dynamics Corp.,
5.48%, 11/23/99....................... 9,877,114
15,000,000 General Motors Acceptance Corp., 5.94%,
2/24/00............................... 14,582,734
10,000,000 Goldman Sachs, 4.90%, 9/1/99............ 10,000,000
10,000,000 Goldman Sachs, 4.90%, 9/13/99........... 9,984,000
30,000,000 JP Morgan, 4.92%, 10/8/99............... 29,852,000
30,000,000 Lucent Technologies, Inc., 5.36%,
10/4/99............................... 29,855,350
19,800,000 Monsanto Co., 4.92%, 9/8/99............. 19,781,443
20,000,000 Procter & Gamble Co.,
5.20%, 9/7/99......................... 19,983,000
10,000,000 Procter & Gamble Co.,
5.44%, 11/12/99....................... 9,894,000
40,000,000 Prudential Funding Corp., 5.41%,
10/26/99.............................. 39,676,723
40,000,000 Salomon Smith Barney,
5.23%, 9/2/99......................... 39,994,289
25,000,000 UBS Finance (Delaware), Inc., 4.91%,
10/12/99.............................. 24,863,049
25,000,000 Walt Disney, 5.02%, 9/15/99............. 24,952,458
--------------
Total Commercial Paper 580,406,872
--------------
CORPORATE NOTES (B) (9.7%)
25,000,000 BA Securities, Inc.,
5.50%, 3/23/00........................ 25,000,000
15,000,000 Bear, Stearns & Co., Inc.,
5.36%, 1/6/00......................... 15,000,000
15,000,000 Bear, Stearns & Co., Inc.,
5.28%, 4/7/00......................... 15,000,000
20,000,000 Chase Manhattan Corp.,
5.47%, 1/14/00........................ 19,995,553
5,000,000 General Motors Acceptance Corp., 5.18%,
9/20/99............................... 5,000,014
20,000,000 Goldman Sachs Group, Inc., 5.44%,
1/7/00................................ 20,000,000
--------------
Total Corporate Notes 99,995,567
--------------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS -- CASH PORTFOLIO (continued)
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE SECURITY
AMOUNT DESCRIPTION VALUE
- ----------- ---------------------------------------- --------------
<C> <S> <C>
REPURCHASE AGREEMENTS (26.2%)
$10,000,000 BA Securities, Inc.,
5.48%, 9/1/99, to be repurchased at
$10,001,522; collateralized entirely
by various U.S. Treasury Notes........ $ 10,000,000
125,000,000 Bear, Stearns & Co., Inc.,
5.35%, 9/7/99, to be repurchased at
$125,130,034; collateralized entirely
by various U.S. Government Agency
Securities............................ 125,000,000
50,000,000 Donaldson, Lufkin & Jenrette,
5.42%, 9/1/99, to be repurchased at
$50,007,528; collateralized entirely
by various U.S. Treasury Strips,
I/O................................... 50,000,000
86,090,000 Salomon Smith Barney,
5.42%, 9/1/99, to be repurchased at
$86,102,961; collateralized entirely
by various U.S. Treasury
Securities............................ 86,090,000
--------------
Total Repurchase Agreements 271,090,000
--------------
Total Investments (100%) at Amortized Cost(+)
$1,033,675,355
==============
</TABLE>
(A) Annualized yields at time of purchase.
(B) Certain securities are deemed to have a maturity remaining until the next
adjustment of the interest rate or the longer of the demand period or
readjustment. The interest rates shown reflect the rate in effect on August
31, 1999.
(+) Tax cost of investments is $1,033,676,989.
I/O Interest only.
See Notes to Financial Statements.
14
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES -- PORTFOLIOS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Securities at amortized cost........ $299,189,723 $603,001,100 $ 762,585,355
Repurchase agreements at cost....... 93,965,000 178,240,000 271,090,000
------------ ------------ --------------
Total investments at amortized cost..... 393,154,723 781,241,100 1,033,675,355
Cash.................................. 15,495 18,055 14,704
Interest and other receivables........ 14,147 2,295,486 3,319,722
Organization costs, net of
amortization (Note 2)............... 239 4,390 1,187
------------ ------------ --------------
Total assets............................ 393,184,604 783,559,031 1,037,010,968
------------ ------------ --------------
LIABILITIES:
Payable to Adviser (Note 3)........... 11,130 24,362 29,640
Payable to Administrator (Note 3)..... 16,373 35,839 43,602
Accrued expenses...................... 15,773 36,414 35,478
------------ ------------ --------------
Total liabilities....................... 43,276 96,615 108,720
------------ ------------ --------------
NET ASSETS.............................. $393,141,328 $783,462,416 $1,036,902,248
============ ============ ==============
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS -- PORTFOLIOS
FOR THE YEAR ENDED AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income.................................... $14,762,244 $44,301,720 $39,501,086
----------- ----------- -----------
EXPENSES:
Investment advisory (Note 3)....................... 105,930 303,532 266,660
Administration (Note 3)............................ 153,011 438,060 385,799
Custody............................................ 72,732 208,434 183,044
Accounting (Note 3)................................ 49,500 49,500 49,500
Legal.............................................. 1,593 4,778 6,916
Audit.............................................. 7,459 19,381 17,133
Trustees........................................... 492 1,495 1,337
Rating fees........................................ 22,000 -- --
Amortization of organization costs (Note 2)........ 240 4,389 1,187
Miscellaneous...................................... 10,667 24,517 23,320
----------- ----------- -----------
Total expenses....................................... 423,624 1,054,086 934,896
----------- ----------- -----------
NET INVESTMENT INCOME................................ 14,338,620 43,247,634 38,566,190
NET REALIZED GAIN (LOSS) ON INVESTMENTS SOLD......... (11,696) 24,483 (663)
----------- ----------- -----------
NET INCREASE IN NET ASSETS FROM OPERATIONS........... $14,326,924 $43,272,117 $38,565,527
=========== =========== ===========
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS -- PORTFOLIOS
FOR THE YEARS ENDED AUGUST 31, 1998 AND 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
CASH CASH CASH
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- --------------- ---------------
<S> <C> <C> <C>
NET ASSETS--AUGUST 31, 1997.................. $ 71,102,520 $ 476,768,745 $ 259,491,011
- ---------------------------- --------------- --------------- ---------------
OPERATIONS:
Net investment income...................... 8,001,296 35,098,110 23,621,908
Net realized gain (loss) on investments
sold..................................... 9,432 (43,555) 853
--------------- --------------- ---------------
Net increase in net assets from operations... 8,010,728 35,054,555 23,622,761
--------------- --------------- ---------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Contributions.............................. 630,794,381 1,930,394,761 1,309,647,918
Withdrawals................................ (445,062,682) (1,725,093,704) (985,420,846)
--------------- --------------- ---------------
Net transactions in investors' beneficial
interests................................... 185,731,699 205,301,057 324,227,072
--------------- --------------- ---------------
Net increase in net assets................... 193,742,427 240,355,612 347,849,833
--------------- --------------- ---------------
NET ASSETS--AUGUST 31, 1998.................. 264,844,947 717,124,357 607,340,844
- ---------------------------- --------------- --------------- ---------------
OPERATIONS:
Net investment income...................... 14,338,620 43,247,634 38,566,190
Net realized gain (loss) on investments
sold..................................... (11,696) 24,483 (663)
--------------- --------------- ---------------
Net increase in net assets from operations... 14,326,924 43,272,117 38,565,527
--------------- --------------- ---------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Contributions.............................. 1,235,422,406 2,886,646,104 2,464,999,269
Withdrawals................................ (1,121,452,949) (2,863,580,162) (2,074,003,392)
--------------- --------------- ---------------
Net transactions in investors' beneficial
interests................................... 113,969,457 23,065,942 390,995,877
--------------- --------------- ---------------
Net increase in net assets................... 128,296,381 66,338,059 429,561,404
--------------- --------------- ---------------
NET ASSETS--AUGUST 31, 1999.................. $ 393,141,328 $ 783,462,416 $ 1,036,902,248
- ------------------------------ =============== =============== ===============
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- PORTFOLIOS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF ORGANIZATION
Core Trust (Delaware) ("Core Trust") was organized as a Delaware business trust
on September 1, 1994. Core Trust, which is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"Act"), currently has twenty-one separate investment portfolios. These financial
statements relate to Treasury Cash Portfolio, Government Cash Portfolio, and
Cash Portfolio (individually, a "Portfolio" and, collectively, the
"Portfolios"), each of which is diversified. The Portfolios commenced operations
on September 1, 1995. Interests in the Portfolios are sold in private placement
transactions without any sales charge to institutional clients, including
open-end management investment companies.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates. The following summarizes the significant accounting policies of the
Portfolios:
SECURITY VALUATION-Each Portfolio determines its net asset value per share as of
1:00 p.m., Pacific time, on each business day, utilizing the amortized cost
method pursuant to Rule 2a-7 under the Act. Under this method, all investments
purchased at a discount or premium are valued by accreting or amortizing,
respectively, the difference between the original purchase price and the
maturity value of the investment over the period to the investment's maturity.
REPURCHASE AGREEMENTS-Each Portfolio may invest in repurchase agreements. Each
Portfolio, through its custodian, receives delivery of the underlying
collateral, whose market value always equals or exceeds the repurchase price
plus expected transaction costs. The investment adviser is responsible for
determining the value of the underlying collateral. In the event of default, a
Portfolio may have difficulty with the disposition of any such securities held
as collateral.
ORGANIZATION COSTS-The costs incurred by each Portfolio in connection with its
organization have been capitalized and are being amortized using the
straight-line method over a five-year period beginning on the commencement of
each Portfolio's operations.
FEDERAL TAXES-The Portfolios are not required to pay federal income taxes on
their net investment income and net capital gain as they are treated as
partnerships for federal income tax purposes. All interest, dividends, gain and
loss of the Portfolios are deemed to have been "passed through" to the
interestholders in proportion to their holdings in the Portfolios regardless of
whether such interest, dividends or gain have been distributed by the
Portfolios.
SECURITIES TRANSACTIONS, INTEREST INCOME AND REALIZED GAIN AND LOSS-Securities
transactions are recorded on the trade date. Interest income is accrued as
earned and realized gain and loss on investments sold are recorded on the basis
of identified cost.
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER-The investment adviser of each Portfolio is Forum Investment
Advisors, LLC ("Forum Advisors"). Forum Advisors receives an advisory fee from
each Portfolio based upon the total average daily net assets of the Portfolios
("Total Portfolio Assets") that is calculated on a cumulative basis at the
following annual rates: 0.06% for the first $200 million of Total Portfolio
Assets, 0.04% of the next $300 million of Total Portfolio Assets and 0.03% of
the remaining Total Portfolio Assets.
18
<PAGE>
MONARCH FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS -- PORTFOLIOS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
ADMINISTRATOR-The administrator of each Portfolio is Forum Administrative
Services, LLC ("FAdS"). For its administrative services and facilities, FAdS
receives from each Portfolio a fee at an annual rate of 0.05% of the Portfolio's
average daily net assets. In addition, certain legal expenses are charged to the
Portfolios by FAdS.
PLACEMENT AGENT-Forum Fund Services, LLC, a registered broker-dealer and a
member of the National Association of Securities Dealers, Inc., acts as each
Portfolio's placement agent, but receives no fee for this service.
OTHER SERVICE PROVIDER-Forum Accounting Services, LLC ("FAcS") serves as the
Portfolios' fund accountant and interestholder recordkeeper. For these services,
FAcS receives a fee from Treasury Cash, Government Cash and Cash Portfolios
based on the lesser of $4,000 per month or 0.05% of the Portfolio's average
annual daily net assets, plus certain additional charges.
NOTE 4. INCOME AND EXPENSE RATIOS
Income and expense ratios are presented below. During certain periods, various
fees were waived and expenses reimbursed. The ratio of Gross Expenses to Average
Net Assets reflects the expense ratio excluding waivers and reimbursements, if
any.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
--------------------------------
NET
INVESTMENT NET GROSS
INCOME EXPENSES EXPENSES
---------- -------- --------
<S> <C> <C> <C>
Treasury Cash Portfolio
Year Ended August 31, 1999................................ 4.69% 0.14% 0.14%
Year Ended August 31, 1998................................ 5.34% 0.15% 0.17%
Year Ended August 31, 1997................................ 5.20% 0.15% 0.18%
Year Ended August 31, 1996................................ 5.30% 0.15% 0.20%
Government Cash Portfolio
Year Ended August 31, 1999................................ 4.94% 0.12% 0.12%
Year Ended August 31, 1998................................ 5.52% 0.13% 0.13%
Year Ended August 31, 1997................................ 5.38% 0.14% 0.14%
Year Ended August 31, 1996................................ 5.49% 0.14% 0.14%
Cash Portfolio
Year Ended August 31, 1999................................ 5.00% 0.12% 0.12%
Year Ended August 31, 1998................................ 5.55% 0.13% 0.13%
Year Ended August 31, 1997................................ 5.45% 0.15% 0.15%
Year Ended August 31, 1996................................ 5.50% 0.15% 0.16%
</TABLE>
19
