<PAGE>
ANNUAL REPORT JUNE 30, 1997
- ------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CUTLER EQUITY INCOME FUND Cutler & Company, LLC Forum Financial Corp.
CUTLER APPROVED LIST EQUITY FUND 503 Airport Road Two Portland Square
Medford, OR 97504 Portland, Maine 04101
</TABLE>
- --------------------------------------------------------------------------------
To The Cutler Trust Shareholders:
We are pleased to present our 1997 Annual Report for the fiscal year ending June
30, 1997. This has been an extraordinary year for the markets, with the S&P 500
Index of Common Stocks showing a total return of 34.68%. We are especially
pleased with the results of our Equity Income and Approved List Funds when
measured against this market.
Our Equity Income Fund's total return of 37.65% was significantly better than
the 26.73% total return of the Lipper Equity Income Index of Funds.* Because of
this performance, Lipper Analytical Services awarded the Fund the "A" ranking
given to the top 20 percent of Funds in its peer group.+ In fact, we ranked
first out of 172 in Lipper's Equity Income category for the period.
The Equity Income Fund also received an A ranking from Lipper for the three year
period ending June 30, 1997, and was second among the 97 funds in the category.
Morningstar awarded the Fund its Five Star (*****) rating for the same period,
placing it in the top 10 percent of the 1997 domestic equity funds monitored by
Morningstar.++
Our Approved List Fund also showed good results for the year, outperforming the
average of its mutual fund peer group, although it lagged behind the general
market somewhat. The Fund's total return of 31.18% was better than the 27.07%
total return of the Lipper Growth & Income Index of Funds, but trailing the
returns exhibited by the S&P.
We continue to believe that, in times of fluctuating market and economic
uncertainty, investors will be rewarded by conservative stock selection with a
bias toward companies offering dividend yield and higher market capitalization,
and operating with a global reach and in less regulated industries. We
appreciate your confidence in our management. As always, if you have any
questions, please let us help.
Sincerely,
<TABLE>
<S> <C>
/s/ Ken Cutler /s/ Brooke Ashland
Kenneth R. Cutler Brooke Cutler Ashland
Chairman of the Board Chief Executive Officer
The Cutler Trust Cutler & Company, LLC
</TABLE>
- ------------------------
* Past performance is no guarantee of future results. The Lipper Equity Income
Fund index is an index of 30 equity income funds; individuals cannot invest
directly in this index. Total return reflects reinvestment of all dividends,
income and capital gains. Investment return and principal value of an investment
in the Cutler Funds will fluctuate so that when redeemed, shares may be worth
more or less than their original cost.
+ Lipper classifies mutual funds by investment objectives defined in the Wall
Street Journal.
++ Morningstar proprietary ratings reflect historical risk-adjusted performance
as of June 30, 1997. These ratings are subject to change monthly and are
calculated from the Funds three year average annual returns in excess of 90-day
Treasury Bill returns with appropriate fee adjustments and a risk factor that
reflects fund performance below 90-day Treasury bill Returns. Ten percent of the
funds in an investment category receive 5 stars and the next 22.5 receive 4
stars. During the period reported, fee waivers and expense reimbursements
increased the Fund's return.
1
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
INVESTMENT ADVISOR'S REPORT JUNE 30, 1997
- --------------------------------------------------------------------------------
For the moment, America seems to be enjoying the best of all worlds. Any
literate and willing worker can find a job, companies make increasing profits
just by intelligently holding out their hand, and miraculously prices don't go
up (except for things you buy).
We are dealing with a worldwide flow of financial transactions of such size, and
traveling at such speed, as to be only vaguely comprehensible. It is easy to see
why irrational exuberance can dance around the margins.
Over many years we have discussed the relationship of the Dow Jones Industrial
Average to the Gross Domestic Product. This seems to have served as a
"rationality ratio." Two years ago we noted that the Dow was equal to
approximately 70% of the GDP expressed in billions. Last year it was 75%, and
this year about 97%. The rational parameters seem to be between 60% and 140%. By
this measure, however imperfect, the blue-chip sector appears worthy of close
attention but not alarm.
It is in this context that we view the performance of the portfolios of The
Cutler Trust. Throughout the year, we felt quite confident in owning large, high
quality companies capable of participating in, and reflecting the long term
growth of, the domestic, and to a growing extent, the global economy. We were
also aware, however, that these are also the types of companies with the market
liquidity that allows us to shift with change.
EQUITY INCOME FUND
During the year our investment discipline for the Equity Income Fund remained
unchanged. We stressed quality, capitalization, and yield biases. Nevertheless,
we remained very cautious in our portfolio selection process, and at year end we
held 7.9% of the portfolio in U.S. Treasury bills. This liquidity allows us to
move quickly in order to add to or rebalance the Fund's holding when the price
is right.
Our discipline was rewarded by the Equity Income Fund's excellent performance.
For the year ending June 30, 1997, the Fund outperformed the average of its
mutual fund peer group as well as the general stock market. The Fund's total
return of 37.65% was significantly better than the 26.73% total return of the
Lipper Equity Income Index of Funds (in fact, we ranked first out of 172 in that
category for the period), and the 34.68% achieved by the S&P 500 Index of Common
Stocks.
APPROVED LIST FUND
Our Approved List Fund also showed good results for the year, outperforming the
average of its mutual fund peer group, but not the general market. The Fund's
total return of 31.18% was better than the 27.07% total return of the Lipper
Growth & Income Index of Funds, but lagged the S&P 500.
Our approach to investing for the Approved List Fund remained the same as it has
since its inception. We hold the majority of stocks on Cutler's & Company's
"approved list." During the year, the companies on this list had a higher market
capitalization, lower price to earnings ratio, and higher dividend yield than
the companies of the S&P 500. Even though we hold 100 issues in the Fund, we are
being quite selective in the levels held in each issue, generally maintaining
equal weightings among the Fund's stocks. We remain optimistic on the economic
front, with corporate earnings advancing and inflation in check. Should the
outlook change, we will respond prudently.
2
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
JUNE 30, 1997
- --------------------------------------------------------------------------------
These charts reflect a comparison of changes in value of a $10,000 investment in
the Cutler Equity Income Fund and Cutler Approved List Equity Fund since
inception, including reinvestment of all dividends and distributions, and the
performance of the Standard & Poor's 500 composite stock index ("S&P 500"). The
index does not reflect expenses, which have been deducted from the Fund's
return.
The S&P 500 is a market weighted index composed of 500 large capitalizaton
companies and reflects the reinvestment of dividends. Shares may be worth more
or less at redemption than at original purchase. Past performance is not
predictive nor a guarantee of future results.
Cutler Equity Income Fund
vs. Standard & Poor's 500
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN VALUE
<S> <C> <C> <C>
One Year Since Inception 6/30/97
Cutler Equity Fund 37.65% 16.49% $ 19,888
S&P 500 Index 34.68% 20.02% $ 22,735
S&P 500 Index Cutler Equity Fund
12/31/92 $10,000 $10,000
Jan-93 $10,084 $9,770
Feb-93 $10,221 $9,920
Mar-93 $10,437 $10,110
Apr-93 $10,184 $9,869
May-93 $10,456 $9,979
Jun-93 $10,486 $10,045
Jul-93 $10,444 $10,135
Aug-93 $10,840 $10,549
Sep-93 $10,754 $10,585
Oct-93 $10,976 $10,838
Nov-93 $10,872 $10,534
Dec-93 $11,004 $10,509
Jan-94 $11,378 $10,733
Feb-94 $11,069 $10,315
Mar-94 $10,587 $9,896
Apr-94 $10,723 $9,999
May-94 $10,898 $10,164
Jun-94 $10,632 $9,907
Jul-94 $10,980 $10,114
Aug-94 $11,430 $10,487
Sep-94 $11,151 $10,259
Oct-94 $11,400 $10,395
Nov-94 $10,986 $10,071
Dec-94 $11,148 $10,205
Jan-95 $11,437 $10,744
Feb-95 $11,883 $11,019
Mar-95 $12,233 $11,146
Apr-95 $12,593 $11,390
May-95 $13,095 $11,837
Jun-95 $13,399 $11,752
Jul-95 $13,843 $11,892
Aug-95 $13,878 $11,967
Sep-95 $14,463 $12,653
Oct-95 $14,411 $12,599
Nov-95 $15,043 $13,151
Dec-95 $15,333 $13,718
Jan-96 $15,854 $13,960
Feb-96 $16,002 $13,938
Mar-96 $16,156 $14,136
Apr-96 $16,394 $14,103
May-96 $16,816 $14,336
Jun-96 $16,880 $14,447
Jul-96 $16,135 $14,046
Aug-96 $16,475 $14,180
Sep-96 $17,402 $15,016
Oct-96 $17,882 $15,824
Nov-96 $19,232 $16,745
Dec-96 $18,851 $16,226
Jan-97 $20,028 $17,234
Feb-97 $20,186 $17,739
Mar-97 $19,358 $17,147
Apr-97 $20,512 $18,061
May-97 $21,760 $18,900
Jun-97 $22,735 $19,888
</TABLE>
Cutler Approved List Equity Fund
vs. Standard & Poor's 500
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN VALUE
<S> <C> <C> <C>
One Year Since Inception 6/30/97
Cutler Approved List 31.18% 16.44% $ 19,851
S&P 500 Index 34.68% 20.02% $ 22,735
S&P 500 Index Cutler Approved List
31-Dec-92 $10,000 $10,000
Jan-93 $10,084 $9,770
Feb-93 $10,221 $9,950
Mar-93 $10,437 $10,100
Apr-93 $10,184 $9,989
May-93 $10,456 $10,150
Jun-93 $10,486 $10,165
Jul-93 $10,444 $10,055
Aug-93 $10,840 $10,478
Sep-93 $10,754 $10,352
Oct-93 $10,976 $10,544
Nov-93 $10,872 $10,392
Dec-93 $11,004 $10,499
Jan-94 $11,378 $10,661
Feb-94 $11,069 $10,356
Mar-94 $10,587 $9,995
Apr-94 $10,723 $10,108
May-94 $10,898 $10,271
Jun-94 $10,632 $10,056
Jul-94 $10,980 $10,313
Aug-94 $11,430 $10,797
Sep-94 $11,151 $10,540
Oct-94 $11,400 $10,674
Nov-94 $10,986 $10,364
Dec-94 $11,148 $10,584
Jan-95 $11,437 $10,906
Feb-95 $11,883 $11,291
Mar-95 $12,233 $11,510
Apr-95 $12,593 $11,740
May-95 $13,095 $12,148
Jun-95 $13,399 $12,302
Jul-95 $13,843 $12,533
Aug-95 $13,878 $12,596
Sep-95 $14,463 $13,150
Oct-95 $14,411 $13,087
Nov-95 $15,043 $13,773
Dec-95 $15,333 $14,097
Jan-96 $15,854 $14,511
Feb-96 $16,002 $14,574
Mar-96 $16,156 $14,662
Apr-96 $16,394 $14,768
May-96 $16,816 $15,055
Jun-96 $16,880 $15,132
Jul-96 $16,135 $14,481
Aug-96 $16,475 $14,727
Sep-96 $17,402 $15,551
Oct-96 $17,882 $15,883
Nov-96 $19,232 $16,869
Dec-96 $18,851 $16,478
Jan-97 $20,028 $17,254
Feb-97 $20,186 $17,653
Mar-97 $19,358 $17,074
Apr-97 $20,512 $17,982
May-97 $21,760 $18,879
Jun-97 $22,735 $19,851
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCK (90.0%)
BANKS (3.5%)
21,000 J.P. Morgan & Co., Inc. $2,191,877
----------
CHEMICALS (8.8%)
20,100 Clorox Co. 2,653,200
44,800 E.I. du Pont de Nemours & Co. 2,816,800
----------
5,470,000
----------
COMPUTER & OFFICE EQUIPMENT (6.4%)
35,500 Pitney Bowes, Inc. 2,467,250
25,000 Rockwell International Corp. 1,475,000
----------
3,942,250
----------
DRUGS & PHARMACEUTICALS (12.3%)
36,000 Bristol-Myers Squibb Co. 2,916,000
28,000 Eli Lilly & Co. 3,060,730
16,500 Merck & Co., Inc. 1,707,750
----------
7,684,480
----------
ELECTRICAL MACHINERY (8.5%)
43,000 Emerson Electric Co. 2,367,688
45,400 General Electric Co. 2,968,025
----------
5,335,713
----------
FINANCIAL SERVICES (4.3%)
37,200 Marsh & McLennan Cos., Inc. 2,655,150
----------
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
FOOD & SOFT DRINKS (6.7%)
32,000 Campbell Soup Co. $1,600,000
55,100 H.J. Heinz Co. 2,541,493
----------
4,141,493
----------
FOREST PRODUCTS (3.0%)
36,300 Weyerhaeuser Co. 1,887,600
----------
GLASS, OTHER BUILDING MATERIALS (3.3%)
35,000 PPG Industries, Inc. 2,034,375
----------
INSTRUMENTS & RELATED PRODUCTS (1.7%)
14,000 Eastman Kodak Co. 1,074,500
----------
LIFE INSURANCE (3.8%)
36,900 Lincoln National Corp. 2,375,447
----------
PETROLEUM PRODUCTS (8.0%)
32,300 Chevron Corp. 2,388,184
42,400 Exxon Corp. 2,607,600
----------
4,995,784
----------
PRINTING & PUBLISHING (4.3%)
27,300 Gannett Co., Inc. 2,695,875
----------
SOAPS (2.9%)
13,000 Procter & Gamble Co. 1,836,250
----------
SPECIALITY CHEMICAL PRODUCTS (4.5%)
27,700 Minnesota Mining & Manufacturing Co. 2,825,400
----------
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
TRANSPORTATION EQUIPMENT (4.5%)
33,800 United Technologies Corp. $2,805,400
----------
VOICE & DATA TRANSMISSION (3.5%)
47,600 BellSouth Corp. 2,207,451
----------
TOTAL COMMON STOCK (COST $35,348,941) 56,159,045
----------
U.S. GOVERNMENT OBLIGATIONS (7.9%)
U.S. TREASURY BILLS
5,000,000 5.36% yield, 8/21/97 4,964,088
----------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $4,964,088) 4,964,088
----------
SHORT TERM HOLDINGS (2.1%)
24,435 Boston 1784 Institutional US Treasury Money Market Fund 24,435
1,306,160 Forum Daily Assets Treasury Fund 1,306,160
----------
TOTAL SHORT TERM HOLDINGS (COST $1,330,595) 1,330,595
----------
TOTAL INVESTMENTS (100.0%) (COST $41,643,624) $62,453,728
----------
----------
</TABLE>
6
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER APPROVED LIST EQUITY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCK (93.9%)
ALCOHOLIC BEVERAGES (0.9%)
8,000 Anheuser-Busch Cos., Inc. $ 335,385
----------
AMUSEMENT AND RECREATION SERVICES (0.4%)
2,000 The Walt Disney Co. 160,500
----------
BANKS (6.4%)
7,535 Banc One Corp. 364,978
4,200 First Union Corp. 388,500
3,300 J.P. Morgan & Co., Inc. 344,441
6,800 NationsBank Corp. 438,600
7,700 Norwest Corp. 433,125
5,500 Wachovia Corp. 320,722
----------
2,290,366
----------
BUSINESS SERVICES (0.8%)
6,400 Automatic Data Processing, Inc. 300,800
----------
CHEMICALS (7.2%)
5,100 Air Products & Chemicals, Inc. 414,375
3,300 Clorox Co. 435,600
3,000 Dow Chemical Co. 261,375
7,600 E.I. du Pont de Nemours & Co. 477,850
2,000 Great Lakes Chemical Corp. 104,750
8,000 Monsanto Co. 344,500
7,100 Morton International, Inc. 214,333
3,900 Rohm & Haas Co. 351,247
----------
2,604,030
----------
</TABLE>
7
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER APPROVED LIST EQUITY FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
COMMUNICATIONS EQUIPMENT (1.5%)
2,393 Lucent Technologies, Inc. $ 172,445
4,800 Motorola, Inc. 364,800
----------
537,245
----------
COMPUTER & OFFICE EQUIPMENT (2.8%)
5,800 Hewlett-Packard Co. 324,800
5,600 Pitney Bowes, Inc. 389,200
5,100 Rockwell International Corp. 300,900
----------
1,014,900
----------
DRUGS & PHARMACEUTICALS (10.4%)
6,000 Abbott Laboratories 400,501
6,000 Bristol-Myers Squibb Co. 486,000
4,500 Eli Lilly & Co. 491,909
6,400 Johnson & Johnson 412,000
4,200 Merck & Co., Inc. 434,700
4,000 Pfizer, Inc. 478,000
9,600 Schering-Plough Corp. 459,600
4,700 Warner-Lambert Co. 583,975
----------
3,746,685
----------
DRUGSTORES (1.2%)
8,000 Walgreen Co. 429,001
----------
DURABLE GOODS-WHOLESALE (0.8%)
3,500 W.W. Grainger, Inc. 273,657
----------
ELECTRIC, GAS & UTILITY COMPANIES (2.7%)
9,500 Baltimore Gas and Electric Co. 253,533
5,000 Consolidated Natural Gas Co. 269,064
5,000 Duke Energy Corp. 239,690
7,000 Florida Progress Corp. 219,188
----------
981,475
----------
</TABLE>
8
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER APPROVED LIST EQUITY FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
ELECTRICAL MACHINERY (3.1%)
6,100 AMP, Inc. $ 254,676
6,800 Emerson Electric Co. 374,428
7,200 General Electric Co. 470,700
----------
1,099,804
----------
FABRICATED METAL PRODUCTS (3.2%)
4,300 Gillette Co. 407,425
8,200 Illinois Tool Works, Inc. 409,491
8,000 Stanley Works 320,000
----------
1,136,916
----------
FINANCIAL SERVICES (1.2%)
6,000 Marsh & McLennan Cos., Inc. 428,250
----------
FOOD & SOFT DRINKS (9.6%)
13,000 Archer Daniels Midland Co. 305,506
3,200 CPC International, Inc. 295,403
9,000 Campbell Soup Co. 450,000
6,400 Coca-Cola Co. 432,000
4,600 General Mills, Inc. 299,580
7,750 H.J. Heinz Co. 357,472
6,500 Hershey Foods Corp. 359,532
3,300 Kellogg Co. 282,565
8,800 PepsiCo, Inc. 330,553
8,000 Sara Lee Corp. 333,003
----------
3,445,614
----------
FOREST PRODUCTS (2.6%)
6,800 Kimberly Clark Corp. 338,300
8,900 Westvaco Corp. 279,797
6,200 Weyerhaeuser Co. 322,400
----------
940,497
----------
</TABLE>
9
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER APPROVED LIST EQUITY FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
GENERAL MERCHANDISE TRADE (2.5%)
4,900 J.C. Penney Co., Inc. $ 255,722
5,000 May Department Stores Co. 236,250
11,500 Wal-Mart Stores, Inc. 388,845
----------
880,817
----------
GLASS, OTHER BUILDING MATERIALS (1.8%)
6,500 Corning, Inc. 361,567
5,000 PPG Industries, Inc. 290,627
----------
652,194
----------
GROCERY STORES (1.4%)
7,000 Albertson's, Inc. 255,500
7,000 Winn-Dixie Stores, Inc. 260,750
----------
516,250
----------
INDUSTRIAL AND COMMERCIAL MACHINERY (1.0%)
5,900 Dover Corp. 362,850
----------
INSTRUMENTS & RELATED PRODUCTS (1.5%)
7,600 Becton, Dickinson & Co. 384,751
2,000 Eastman Kodak Co. 153,500
----------
538,251
----------
LIFE INSURANCE (2.1%)
8,250 Aon Corp. 426,940
5,300 Lincoln National Corp. 341,189
----------
768,129
----------
MANUFACTURING CONGLOMERATES (0.9%)
7,000 Hillenbrand Industries 332,500
----------
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER APPROVED LIST EQUITY FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
PETROLEUM PRODUCTS (4.0%)
3,800 Amoco Corp. $ 330,367
5,100 Chevron Corp. 377,085
6,600 Exxon Corp. 405,900
4,800 Mobil Corp. 335,401
----------
1,448,753
----------
PRIMARY METAL PRODUCTS (0.3%)
2,000 Nucor Corp. 113,000
----------
PRINTING & PUBLISHING (4.5%)
2,000 Dow Jones & Co., Inc. 80,375
4,200 Gannett Co., Inc. 414,750
7,000 Knight-Ridder, Inc. 343,440
6,000 McGraw-Hill Cos., Inc. 352,878
2,000 R.R. Donnelley & Sons Co. 73,250
7,000 Tribune Co. 336,441
----------
1,601,134
----------
PROPERTY & CASUALTY INSURANCE (4.8%)
3,000 Allstate Corp. 219,000
2,950 American International Group, Inc. 440,657
5,800 Chubb Corp. 387,876
1,700 General Re Corp. 309,400
4,700 St. Paul Cos., Inc. 358,375
----------
1,715,308
----------
RESTAURANTS (0.4%)
3,000 McDonald's Corp. 144,938
----------
SECURITIES, BROKERS, DEALERS, & ADVISORS (1.5%)
8,800 Merrill Lynch & Co., Inc 524,700
----------
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER APPROVED LIST EQUITY FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
SOAPS (2.5%)
6,800 Colgate-Palmolive Co. $ 443,700
3,200 Procter & Gamble Co. 452,001
----------
895,701
----------
SPECIALITY CHEMICAL PRODUCTS (1.9%)
5,000 International Flavors & Fragrances, Inc. 252,500
4,000 Minnesota Mining & Manufacturing Co. 408,000
----------
660,500
----------
TRANSPORTATION EQUIPMENT (3.1%)
6,600 Boeing Co. 350,215
7,400 Johnson Controls, Inc. 303,865
5,400 United Technologies Corp. 448,200
----------
1,102,280
----------
VOICE & DATA TRANSMISSION (4.1%)
4,300 AT&T Corp. 150,770
4,600 Ameritech Corp. 312,515
4,400 Bell Atlantic Corp. 333,852
7,400 BellSouth Corp. 343,176
5,400 SBC Communications, Inc. 334,129
----------
1,474,442
----------
WHOLESALE TRADE-NONDURABLE GOODS (0.8%)
7,700 Sysco Corp. 281,050
----------
TOTAL COMMON STOCK (COST $18,742,813) 33,737,922
----------
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER APPROVED LIST EQUITY FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C>
SHORT TERM HOLDINGS (6.1%)
917,111 Boston 1784 Institutional US Treasury Money Market Fund $ 917,111
1,280,605 Forum Daily Assets Treasury Fund 1,280,605
----------
TOTAL SHORT TERM HOLDINGS (COST $2,197,716) 2,197,716
----------
TOTAL INVESTMENTS (100.0%) (COST $20,940,529) $35,935,638
----------
----------
</TABLE>
13
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
STATEMENTS OF ASSETS & LIABLILITIES
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CUTLER CUTLER
EQUITY APPROVED
INCOME LIST EQUITY
FUND FUND
---------------- ----------------
<S> <C> <C>
ASSETS:
Investments (Note 2)
Investments at cost $41,643,624 $20,940,529
Net unrealized appreciation (depreciation) 20,810,104 14,995,109
---------------- ----------------
Total investments at value 62,453,728 35,935,638
Interest, dividends and other receivables 83,096 46,953
Receivable for Fund shares sold 91,775 6,344
---------------- ----------------
Total Assets 62,628,599 35,988,935
---------------- ----------------
LIABILITIES:
Dividends payable 3,262 1,922
Payable for securities purchased -- 657,044
Payable to custodian 2,114 --
Payable for Fund shares redeemed 9,665 4,000
Payable to Investment Adviser 37,904 21,460
Accrued fees and other expenses 52,720 27,128
---------------- ----------------
Total Liabilities 105,665 711,554
---------------- ----------------
NET ASSETS $62,522,934 $35,277,381
---------------- ----------------
---------------- ----------------
COMPONENTS OF NET ASSETS:
Paid in Capital $39,934,871 $19,480,940
Undistributed net investment income (loss) 14,978 2,749
Net unrealized appreciation (depreciation) on
investments 20,810,104 14,995,109
Accumulated net realized gain (loss) on investments 1,762,981 798,583
---------------- ----------------
NET ASSETS $62,522,934 $35,277,381
---------------- ----------------
---------------- ----------------
Shares of Beneficial Interest, No Par Value 3,893,863 1,924,574
NET ASSET VALUE, offering price and redemption
price per share $16.06 $18.33
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CUTLER CUTLER
EQUITY APPROVED
INCOME LIST EQUITY
FUND FUND
---------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Dividend income $1,337,812 $699,184
Interest income 120,667 38,061
---------------- ----------------
Total Investment Income 1,458,479 737,245
---------------- ----------------
EXPENSES:
Advisory fees (Note 3) 385,655 230,877
Management fees (Note 3) 51,421 30,783
Transfer agent fees (Note 3) 15,479 14,317
Shareholder services fees (Note 3) 1,219 --
Custodian fees 10,171 9,178
Accounting fee (Note 3) 37,000 44,000
Legal fees (Note 3) 5,346 2,789
Audit fee 15,893 16,169
Trustees fee 14,627 8,929
Miscellaneous 63,309 29,023
---------------- ----------------
Total Expenses 600,120 386,065
Fees waived (Note 5) -- (1,780)
---------------- ----------------
Net Expenses 600,120 384,285
---------------- ----------------
NET INVESTMENT INCOME (LOSS) 858,359 352,960
---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments sold 2,878,813 817,421
Net change in unrealized appreciation (depreciation) on
investments 13,036,026 7,342,804
---------------- ----------------
NET GAIN (LOSS) ON INVESTMENTS 15,914,839 8,160,225
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $16,773,198 $8,513,185
---------------- ----------------
---------------- ----------------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CUTLER CUTLER
EQUITY APPROVED
INCOME LIST EQUITY
FUND FUND
------------------------ ------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET ASSETS -- BEGINNING OF PERIOD $46,285,366 $41,469,577 $30,247,807 $21,889,870
----------- ----------- ----------- -----------
OPERATIONS:
Net investment income (loss) 858,359 1,263,474 352,960 446,083
Net realized gain (loss) on investments sold 2,878,813 3,083,405 817,421 305,373
Net change in unrealized appreciation
(depreciation) on investments 13,036,026 4,913,660 7,342,804 4,740,968
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 16,773,198 9,260,539 8,513,185 5,492,424
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income (869,845) (1,277,607) (361,715) (436,925)
Net realized capital gain on investments (4,115,498) (535,464) (94,208) --
----------- ----------- ----------- -----------
Total distributions to shareholders (4,985,343) (1,813,071) (455,923) (436,925)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Sale of shares 5,928,772 5,500,429 2,668,009 5,890,195
Reinvestment of distributions 4,927,163 1,796,759 448,402 427,059
Redemption of shares (6,406,222) (9,928,867) (6,144,099) (3,014,816)
----------- ----------- ----------- -----------
Net increase (decrease) from capital share
transactions 4,449,713 (2,631,679) (3,027,688) 3,302,438
----------- ----------- ----------- -----------
Net increase (decrease) in net assets 16,237,568 4,815,789 5,029,574 8,357,937
----------- ----------- ----------- -----------
NET ASSETS -- END OF PERIOD
(Including line A) $62,522,934 $46,285,366 $35,277,381 $30,247,807
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
(A) Accumulated undistributed net investment
income (loss) $ 14,978 $ 20,754 $ 2,749 $ 11,504
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
SHARE ACTIVITY
Sale of shares 409,218 453,150 163,153 467,208
Reinvestment of distributions 373,516 144,973 28,801 31,973
Redemption of shares (462,361) (809,714) (399,951) (235,675)
----------- ----------- ----------- -----------
Net increase (decrease) in shares 320,373 (211,591) (207,997) 263,506
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
- --------------------------------------------------------------------------------
NOTE 1 ORGANIZATION
The Cutler Trust (the "Trust") was organized on October 2, 1992, as an
open-end, management investment company under the Investment Company Act of
1940. The Trust currently has two diversified investment portfolios
(individually a "Fund" and collectively the "Funds"). The Cutler Equity Income
Fund, Cutler Approved List Equity Fund, and Cutler Government Securities Fund
each commenced operations on December 30, 1992. On December 27, 1996, the
Cutler Government Securities Fund ceased operations.
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets
from operations during the fiscal period. Actual results could differ from
those estimates.
The following represent significant accounting policies of the Funds:
SECURITY VALUATION -- The Trust determines the net asset value per share of
each Fund as of the close of regular trading on the New York Stock Exchange
(currently 4:00 P.M., Eastern time) on each Fund Business Day, as defined in
the Funds' prospectus. Securities with a maturity of 60 days or less are
valued at amortized cost. Other securities for which market quotations are
readily available are valued using the last reported sales price provided by
independent pricing services. If no sale is reported, the mean of the last bid
and asked price is used. If no mean price is available, the last bid price is
used. In the absence of readily available market quotations, securities are
valued at fair value using procedures approved by the Trust's Board of
Trustees.
INVESTMENT INCOME -- Dividend income is recorded on the ex-dividend date.
Interest income is recorded on an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income, if any,
are declared and paid quarterly by the Funds. Capital gain distributions, if
any, are distributed to shareholders at least annually. Distributions are
based on amounts calculated in accordance with applicable federal income tax
regulations.
FEDERAL TAXES -- The Funds intend to qualify and continue to qualify each year
as regulated investment companies and distribute all of their taxable income.
In addition, by distributing in each calendar year substantially all of their
net investment income, capital gain and certain other amounts, if any, the
Funds will not be subject to a federal excise tax. Therefore, no federal
income or excise tax provision is required.
17
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
NOTES TO FINANCIAL STATEMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
EXPENSE ALLOCATION -- The Trust accounts separately for the assets and
liabilities and operations of each Fund. Expenses that are directly
attributable to more than one Fund are allocated among the respective Funds.
REALIZED GAIN AND LOSS -- Security transactions are recorded on a trade date
basis. 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 to the Funds is Cutler & Company
LLC ("Adviser"). Pursuant to an Investment Advisory Agreement effective May 1,
1996, the Adviser receives an advisory fee from each of Cutler Equity Income
Fund and Cutler Approved List Equity Fund at an annual rate of 0.75% of each
Fund's average daily net assets. Prior to May 1, 1996, the advisory fee for
Cutler Equity Income Fund and Cutler Approved List Equity Fund was 0.50%.
MANAGER -- The Trust has entered into a management agreement with Forum
Administrative Services, Limited Liability Company ("FAdS"). For its services
FAdS is entitled to compensation of 0.10% of the Funds' average daily net
assets. A previous management agreement in effect with Forum Financial
Services, Inc. ("FFSI") during the period was identical in all material terms
including fees. In addition, certain legal expenses were charged to the Trust
by FAdS in the amount of $640.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT -- Forum Financial Corp. ("FFC")
an affiliate of FAdS and FFSI, provides services as the Trust's transfer agent
and dividend disbursing agent to each Fund pursuant to a separate agreement.
OTHER SERVICES PROVIDERS -- FFC provides portfolio accounting services to each
Fund pursuant to a separate agreement with the Trust. FFSI, a registered
broker-dealer, acts as the Trust's distributor pursuant to a Distribution
Agreement with the Trust for which it receives no compensation.
NOTE 4 TRANSACTIONS OF SECURITIES
The cost of securities purchased and the proceeds from sales of securities
(excluding short term securities) for the year ended June 30, 1997 were as
follows:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
------------------ -------------------
<S> <C> <C>
Cutler Equity Income Fund $11,357,383 $16,838,027
Cutler Approved List Equity Fund 1,157,086 5,322,483
</TABLE>
18
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
NOTES TO FINANCIAL STATEMENTS (continued)
JUNE 30, 1997
- --------------------------------------------------------------------------------
For federal income tax purposes, the tax basis of investment securities owned,
the aggregate gross unrealized appreciation and the aggregate gross unrealized
depreciation as of June 30, 1997 were as follows:
<TABLE>
<CAPTION>
Unrealized Unrealized Net
Tax Cost Appreciation Depreciation Appreciation
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cutler Equity Income Fund $41,643,624 $20,939,680 $ 129,576 $20,810,104
Cutler Approved List Equity Fund 20,959,033 15,005,517 28,912 14,976,605
</TABLE>
NOTE 5 WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Adviser may waive voluntarily a portion of its fee and assume certain
expenses of Cutler Equity Income Fund and Cutler Approved List Equity Fund so
that fees paid for investment advisory services will not exceed 1.25% of the
respective Fund's average daily net assets on an annual basis. FAdS and FFC
may waive voluntarily all or a portion of their fees, from time to time. For
the year ended June 30, 1997, FFC waived fees totaling $1,780 on behalf of the
Cutler Approved List Equity Fund.
19
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected per share data and
ratios for a share outstanding
throughout the period.
<TABLE>
<CAPTION>
CUTLER EQUITY
INCOME FUND
------------------------------------------------------
Year Ended June 30,
------------------------------------------------------
1997 1996 1995 1994 1993(a)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.95 $ 10.96 $ 9.56 $9.95 $ 10.00
-------- -------- -------- -------- --------
Investment Operations
Net Investment Income (Loss) 0.24 0.35 0.36(b) 0.27 0.10
Net Realized and Unrealized Gain
(Loss) on Investments 4.30 2.13 1.40 (0.40) (0.05)
-------- -------- -------- -------- --------
Total from Investment Operations 4.54 2.48 1.76 (0.13) 0.05
-------- -------- -------- -------- --------
Distributions From
Net Investment Income (0.24) (0.35) (0.34) (0.26) (0.10)
Net Realized Gain on Investments (1.19) (0.14) (0.02) -- --
-------- -------- -------- -------- --------
Total Distributions (1.43) (0.49) (0.36) (0.26) (0.10)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 16.06 $ 12.95 $ 10.96 $9.56 $ 9.95
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return 37.65% 22.93% 18.63% (1.37%) 0.90%(c)
Ratio/Suplementary Data
Net assets at the end of year (in
thousands) $62,523 $46,285 $41,470 $19,706 $2,853
Ratios to Average Net Assets:
Expenses including
reimbursement/waiver 1.17% 0.98% 0.97% 1.00% 0.98%(c)
Expenses excluding
reimbursement/waiver 1.17% 0.98% 0.97% 1.45% 3.69%(c)
Net investment income 1.67% 2.81% 3.49% 3.49% 2.23%(c)
Portfolio turnover rate 23.22% 57.08% 43.37% 42.83% 32.04%
Average brokerage commission rate (d) $0.0509 $0.0525 N/A N/A N/A
<CAPTION>
CUTLER APPROVED
LIST FUND
------------------------------------------------------
Year Ended June 30,
------------------------------------------------------
1997 1996 1995 1994 1993(a)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 14.18 $ 11.71 $ 9.78 $ 10.09 $ 10.00
-------- -------- -------- -------- --------
Investment Operations
Net Investment Income (Loss) 0.18 0.21 0.24(b) 0.21 0.08
Net Realized and Unrealized Gain
(Loss) on Investments 4.20 2.47 1.92 (0.31) 0.09
-------- -------- -------- -------- --------
Total from Investment Operations 4.38 2.68 2.16 (0.10) 0.17
-------- -------- -------- -------- --------
Distributions From
Net Investment Income (0.18) (0.21) (0.23) (0.21) (0.08)
Net Realized Gain on Investments (0.05) 0.00 -- -- --
-------- -------- -------- -------- --------
Total Distributions (0.23) (0.21) (0.23) (0.21) (0.08)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 18.33 $ 14.18 $ 11.71 $ 9.78 $ 10.09
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total return 31.18% 23.01% 22.33% (1.07%) 3.31%(c)
Ratio/Suplementary Data
Net assets at the end of year (in
thousands) $35,277 $30,248 $21,890 $12,620 $3,618
Ratios to Average Net Assets:
Expenses including
reimbursement/waiver 1.25% 1.05% 1.00% 1.00% 0.98%(c)
Expenses excluding
reimbursement/waiver 1.25% 1.13% 1.23% 1.78% 4.53%(c)
Net investment income 1.15% 1.65% 2.20% 2.43% 2.27%(c)
Portfolio turnover rate 3.86% 8.97% 23.42% 22.27% 10.88%
Average brokerage commission rate (d) $0.0600 $0.0569 N/A N/A N/A
</TABLE>
(a) See Note 1 for applicable date of inception.
(b) Calculated using the weighted average number of shares outstanding.
(c) Annualized.
(d) For the fiscal years beginning on or after September 1, 1995, the Fund is
required to disclose average commission per share paid to brokers on the
purchase or sale of equity securities.
20
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees
The Cutler Trust
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of The Cutler Trust, consisting of the Cutler
Equity Income Fund and Cutler Approved List Equity Fund, as of June 30, 1997,
the related statements of operations for the year then ended, and of changes in
net assets for each of the two years in the period then ended and the financial
highlights for each of the four years in the period then ended and for the
period December 30, 1992 (commencement of investment operations) to June 30,
1993. These financial statements and financial highlights are the responsibility
of The Trust's 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. Our procedures included confirmation of the securities owned as of
June 30, 1997 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
portfolios constituting The Cutler Trust as of June 30, 1997, the results of
their operations, the changes in their net assets, and the financial highlights
for the above stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
July 22, 1997
21
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
OTHER INFORMATION (unaudited)
JUNE 30, 1997
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF DIVIDENDS DECLARED DURING THE FISCAL YEAR
Income Dividends -- All of the income and any short term capital gain dividends
paid by each Fund were ordinary income for federal income tax purposes. 100% of
the income dividends of Cutler Equity Income Fund and Cutler Approved List
Equity Fund were qualifying dividends for the corporate dividends received
deduction.
Capital Gain Dividends -- Cutler Equity Income Fund and Cutler Approved List
Equity Fund declared long term capital gain dividends of $3,430,967 and $94,208,
respectively, for the fiscal year ended June 30, 1997.
22
<PAGE>
- --------------------------------------------------------------------------------
THE CUTLER TRUST
TRUSTEES OF THE CUTLER TRUST
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
KENNETH R. CUTLER
[PHOTO] Principal portfolio manager of the Equity Income Fund and Approved List Equity
Fund, and of institutional equity portfolios managed separately by Cutler &
Company LLC with objectives similar to the Funds.
JOHN Y. KEFFER
[PHOTO] Chairman, Forum Financial Corp., Transfer Agent, Forum Financial Services,
Inc., Distributor and Forum Administrative Services, LLC, Manager for both
funds.
BROOKE CUTLER ASHLAND
[PHOTO] Chief Executive Officer, Cutler & Company LLC, Investment Adviser to the
trust.
DR. HATTEN S. YODER, JR.
[PHOTO] Chairman Emeritus, Geophysical Laboratory, Carnegie Institute of Washington,
and consultant to the Los Alamos National Laboratory. A member of the National
Academy of Sciences, and many national and international scientific bodies.
ROBERT B. WATTS, JR.
[PHOTO] Attorney in private practice. Formerly a senior level officer, counsel and
corporate secretary with over 25 years of corporate, divisional and board
level experience with two Fortune 100 companies.
</TABLE>
23
<PAGE>
THE CUTLER TRUST
- ------------------------------------------------------------------------
TABLE OF CONTENTS
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Chairman's Letter to the Shareholders....... 1
Investment Advisor's Report................. 2
Comparison of Change in Value of $10,000
Investment................................ 3
Cutler Equity Income Fund Portfolio......... 4
Cutler Approved List Equity Fund
Portfolio................................. 7
Statements of Assets and Liabilities........ 14
Statements of Operations.................... 15
Statements of Changes in Net Assets......... 16
Notes to Financial Statements............... 17
Financial Highlights (Per Share Data)....... 20
Report of Independent Auditors.............. 21
Other Information........................... 22
Trustees of the Cutler Trust................ 23
</TABLE>
Distributor
Forum Financial Services, Inc.
CUTLER & COMPANY LLC
INVESTMENT MANAGEMENT
INVESTMENT ADVISER TO THE TRUST
503 Airport Road, Medford, OR 97504
(800) 228-8537 - (541) 770-9000
Fax: (541) 779-0006
info @ cutler.com
- ------------------------------------------------
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
- -------------------------------------------
CUTLER EQUITY
INCOME FUND
CUTLER APPROVED LIST
EQUITY FUND
ANNUAL REPORT
---------------
June 30, 1997
