As filed with the Securities and Exchange Commission on June 4, 2021
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-03023
FORUM FUNDS
Three Canal Plaza, Suite 600
Portland, Maine 04101
Jessica Chase, Principal Executive Officer
Three Canal Plaza, Suite 600
Portland, Maine 04101
207-347-2000
Date of fiscal year end: March 31
Date of reporting period: April 1, 2020 – March 31, 2021
ITEM 1. REPORT TO STOCKHOLDERS.
Annual
Report
March
31,
2021
The
views
in
this
report
were
those
of
Absolute
Investment
Advisers
LLC
(“AIA”
and
“Absolute”),
the
investment
adviser
to
the
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund
(each
a
“Fund”
and
collectively
the
“Funds”)
as
of
March
31,
2021,
and
may
not
reflect
their
views
on
the
date
this
report
is
first
published
or
any
time
thereafter.
These
views
are
intended
to
assist
shareholders
in
understanding
their
investment
in
the
Funds
and
do
not
constitute
investment
advice.
None
of
the
information
presented
should
be
construed
as
an
offer
to
sell
or
recommendation
of
any
security
mentioned
herein.
The
Funds
utilize
a
multi-manager
strategy.
For
a
complete
description
of
each
Fund’s
principal
investment
risks
please
refer
to
its
respective
prospectus.
Although
each
Fund’s
strategy
is
different,
each
Fund
is
subject
to
the
following
risks:
Small-
and
medium-sized
company
risk;
foreign
or
emerging
markets
securities
risk
which
involves
special
risks,
including
the
volatility
of
currency
exchange
rates
and,
in
some
cases,
limited
geographic
focus,
political
and
economic
instability,
and
relatively
illiquid
markets;
interest
rate
risk;
and
high
yield,
lower-rated
(junk)
bonds
risk.
Other
principal
risks
include
investing
in
initial
public
offerings;
selling
securities
short
with
the
risk
of
magnified
capital
losses;
investing
in
derivatives
which
can
be
volatile
and
involve
various
types
and
degrees
of
risks;
and
investing
in
options
and
futures
which
are
subject
to
special
risks
and
may
not
fully
protect
a
Fund
against
declines
in
the
value
of
its
stocks.
In
addition,
an
option
writing
strategy
limits
the
upside
profit
potential
normally
associated
with
stocks.
Futures
trading
is
very
speculative,
largely
due
to
the
traditional
volatility
of
futures
prices.
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month-end,
call
the
Fund
at
888-99-ABSOLUTE.
The
S&P
500®
Index
(“S&P
500”)
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index
is
a
broad
based
measurement
of
the
U.S.
dollar-denominated,
investment-grade,
fixed-rate,
SEC
registered
taxable
bond
market.
The
HFRX
Global
Hedge
Fund
Index
is
a
broad-based
measurement
of
the
performance
of
the
hedge
fund
universe;
it
is
comprised
of
eight
strategies
-
convertible
arbitrage,
distressed
securities,
equity
hedge,
equity
market
neutral,
event
driven,
macro,
merger
arbitrage,
and
relative
value
arbitrage.
The
strategies
are
asset-weighted
based
on
the
distribution
of
assets
in
the
hedge
fund
industry.
The
MSCI
World
Index
measures
the
performance
of
a
diverse
range
of
24
developed
countries’
stock
markets
including
the
United
States
and
Canada,
and
countries
in
Europe,
the
Middle
East;
Asia
and
the
Pacific.
The
HFRX
Equity
Hedge
Index
measures
the
performance
of
strategies
that
maintain
positions
both
long
and
short
in
primarily
equity
and
equity
derivative
securities.
The
HFRX
Fixed
Income
Convertible
Arbitrage
Index
measures
the
performance
of
hedge
fund
strategies
that
are
predicated
on
realizing
of
a
spread
between
related
instruments
at
least
one
of
which
is
a
convertible
fixed
income
instrument.
The
iBoxx
High
Yield
Index
consists
of
liquid
USD
high
yield
bonds,
selected
to
provide
a
balanced
representation
of
the
broad
USD
high
yield
corporate
bond
universe.
The
total
return
of
the
indices
include
the
reinvestment
of
dividends
and
income.
The
total
return
of
each
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
indices
do
not
include
expenses.
The
Funds
are
professionally
managed,
while
the
indices
are
unmanaged
and
are
not
available
for
investment.
The
price-to-sales
(P/S)
ratio
shows
how
much
investors
are
willing
to
pay
per
dollar
of
sales
for
a
stock.
The
P/S
ratio
is
calculated
by
dividing
the
stock
price
by
the
underlying
company’s
sales
per
share.
Margin
Debt
to
GDP
is
the
ratio
of
FINRA
total
debit
balances
for
margin
accounts
to
total
US
Gross
Domestic
Product.
Alpha
is
the
measure
of
performance
on
a
risk-adjusted
(beta)
basis.
Alpha
takes
the
volatility
(price
risk)
of
a
fund
and
compares
its
risk-
adjusted
performance
to
a
benchmark
index.
The
excess
return
of
the
fund
relative
to
the
return
of
the
benchmark
index
is
a
fund’s
alpha.
Beta
is
a
measure
of
a
fund’s
relative
volatility
as
compared
to
the
S&P
500
which
by
definition
is
1.00.
Accordingly
a
fund
with
a
1.10
beta
is
expected
to
perform
10%
better
than
the
S&P
500
in
up
markets
and
10%
worse
in
down
markets.
The
HFR
Indices
are
equally
weighted
performance
indexes,
utilized
by
numerous
hedge
fund
managers
as
a
benchmark
for
their
own
hedge
funds.
One
cannot
invest
directly
in
an
index.
Absolute
Strategies
Fund,
Absolute
Funds,
and
Absolute
Investment
Advisers
are
registered
service
marks.
Other
marks
referred
to
herein
are
the
trademarks,
service
marks
or
registered
trademarks
of
their
respective
owners.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
1
Absolute
Funds
Dear
Shareholder,
We
are
pleased
to
present
the
Annual
Report
for
the
Absolute
Strategies
Fund,
Absolute
Convertible
Arbitrage
Fund
and
the
Absolute
Capital
Opportunities
Fund
(the
“Funds”
or
“Absolute
Funds”)
for
the
year
ended
March
31,
2021.
The
Adviser
has
maintained
a
consistent
philosophy
and
discipline
since
inception
in
2005.
Our
Funds
have
focused
on
strategies
to
create
various
forms
of
alpha
(returns
independent
of
broad
markets)
in
both
equity
and
credit
markets.
Focusing
on
alpha,
whether
it
be
long
only,
neutral
or
short
biased,
can
assist
investors
and
asset
allocators
achieve
diversification.
While
not
all
market
cycles
provide
a
beneficial
backdrop
for
achieving
“defensive”
performance,
our
patient,
disciplined
approach
has
historically
thrived
during
difficult
environments.
Each
of
the
Funds
performed
very
well
during
the
difficult
market
environment
in
Q1
2020
where
the
S&P
500
declined
by
over
19%.
The
Absolute
Strategies
Fund
was
up
3.58%
in
the
quarter,
the
Absolute
Capital
Opportunities
Fund
was
up
1.71%,
and
the
Absolute
Convertible
Arbitrage
Fund
was
down
only
2.18%.
However,
the
overall
market
bottomed
near
the
end
of
that
period
(March
31,
2020),
and
index
investments
recouped
large
losses
quickly
versus
our
Funds
which
were
positioned
defensively.
As
such,
the
performance
period
of
the
past
12
months
is
quite
skewed
by
the
COVID-19
crash
recovery
for
passive,
beta
investments.
Absolute
Strategies
Fund
The
Strategies
Fund
returned
-5.97%
during
the
period.
By
comparison,
the
HFRX
Global
Hedge
Fund
Index
returned
16.15%.
The
bulk
of
the
performance
variations
were
due
to
indices
recovering
from
the
COVID-19
crash
bottom
in
early
April
of
last
year
while
the
Fund
maintained
a
more
neutral
position.
The
Fund
was
positioned
with
an
overall
net
short
position
heading
into
the
crash
in
February
2020,
but
moved
to
a
more
neutral
bias
soon
after
the
market
bottom.
Even
with
the
strong
market
rally,
the
Fund
was
able
to
return
a
positive
result
for
the
year
2020.
However,
the
strong
performance
of
the
S&P
500
through
November
caused
a
speculative
fervor
in
most
everything
leading
into
January
2021.
As
a
result,
the
Fund
returned
to
a
net
short
position
in
the
4th
quarter,
which
hampered
performance.
Performance
benefited
directly
from
a
long
portfolio
concentrated
equity
positions.
Dupont
De
Nemours,
Berkshire
Hathaway,
Quanta,
Carmax
and
Corteva
were
larger
gainers
in
the
Fund
during
the
period.
Liberty
Global,
Kirkland
Lake
Gold,
AON,
Delta
Airlines
and
Equity
Commonwealth
were
detractors.
Fund
performance
was
also
aided
by
positions
in
call
options
in
equity
index
ETFs,
while
put
options
and
short
index
futures
positions
and
hedges
were
detractors.
The
Adviser
believes
the
end
of
this
overall
market
cycle
could
be
very
significant,
and
may
result
in
the
S&P
500
reversing
down
below
the
March
2020
lows,
and
possibly
substantially
lower;
this
would
amount
to
market
losses
of
at
least
50%.
It
is
also
easy
to
believe
the
market
has
potential
for
a
continued
melt-up,
especially
given
the
timing
of
the
most
recent
stimulus
checks.
Many
investors
tried
their
luck
with
small
spec
stocks
but
could
add
this
new
found
money
back
into
large
cap
stocks.
As
such
we
have
tried
to
maintain
some
patience
regarding
our
positioning
by
allocating
to
a
substantial
net
short
position
in
market
indices
paired
with
shorter
term
upside
call
options.
This
provides
the
portfolio
with
a
hedge
against
further
speculative
impulses
while
maintaining
our
longer
term
positioning.
Should
markets
begin
a
new
bear
market,
we
intend
to
initiate
an
aggressive
short
position.
Much
of
the
reasoning
for
the
Absolute
Strategy
Fund’s
positioning
is
outlined
in
the
Market
Outlook
commentary
below.
Absolute
Capital
Opportunities
Fund
The
Capital
Opportunities
Fund
returned
5.41%
during
the
period.
By
comparison,
the
HFRX
Equity
Hedge
Index
returned
23.88%.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
2
Absolute
Funds
Performance
benefited
from
a
mix
of
the
long
portfolio,
which
is
made
up
of
a
number
of
value-based
single
stocks,
and
hedges,
which
are
option-based
with
volatility
as
a
factor.
Quanta,
Carmax,
and
General
Motors
were
positive
contributors
among
single
stocks.
Aon,
Delta
Airlines,
and
United
Airlines
were
detractors.
Going
forward,
the
Fund
is
positioned
in
a
low
net
manner
to
potentially
take
advantage
of
out-performance
of
the
long
portfolio,
hedges
on
both
the
downside
and
upside,
or
a
spike
in
market
volatility.
Absolute
Convertible
Arbitrage
Fund
The
Absolute
Convertible
Arbitrage
Fund
returned
13.12%
during
the
period.
By
comparison,
the
HFRX
Fixed
Income
Convertible
Arbitrage
Index
returned
25.44%.
It
is
worth
noting
that
hedge
funds
within
the
HFRX
index
are
likely
using
leverage
to
boost
returns.
Performance
benefited
from
the
Fund’s
opportunistic
approach.
The
Fund
was
positioned
somewhat
defensively
going
into
the
market
drawdown
in
Q1
2020
which
enabled
it
to
take
advantage
when
the
convertibles
market
became
dislocated.
Gains
were
well
diversified.
Microstrategy,
Chart
Industries,
and
Wayfair
were
among
winners.
K12,
Kadmon,
and
Nova
were
small
detractors.
Convertible
bonds
have
undergone
a
surge
of
issuance
over
the
last
several
years,
effectively
doubling
the
size
of
the
market.
This
has
provided
an
excellent
back
drop
for
opportunities
going
forward.
Market
Outlook
It
is
difficult
to
continuously
write
sound
analysis
about
markets
that
are
almost
solely
driven
by
central
bank
money
printing
and
investor
speculation.
And
now
we
need
to
add
a
few
new
items
of
froth
to
categorize
under
“animal
spirits”
that
redefine
historical
financial
manias.
These
latest
iterations
of
speculative
fervor
are
truly
beyond
belief.
Within
the
past
few
months
we
have
seen
wild
speculation
and
stock
price
manipulation
in
real
time
by
young
retail
investors
trying
to,
in
their
words,
“take
down
Wall
Street.”
Many
of
these
small
speculators
turned
to
the
investing
world
simply
because
their
sports-betting
hobbies
were
put
on
hold
due
to
the
pandemic
sports
shutdowns.
Using
their
gaming
and
gambling
capabilities,
they
developed
an
impressive
network
of
stock
speculators
through
the
Robinhood
trading
app,
Reddit
chat
boards
and
other
primary
social
media
outlets.
This
unknown
gang
of
revolutionaries
produced
a
populist
uprising
through
a
constant
stream
of
social
media
momentum
that
soon
caught
the
attention
of
larger,
professional
speculators.
Many
high-flying
stocks
went
up
5-10
fold
in
a
matter
of
weeks
before
crashing
back
to
reality.
The
most
notable
was
Game
Stop.
Game
Stop’s
stock
price
went
from
$20
to
over
$500
in
roughly
10
days,
then
dropped
back
to
as
low
as
$50
a
few
days
later.
The
story
was
on
every
evening
news
program
and
overnight
riches
were
the
talk
of
the
nation.
In
the
end,
many
retail
investors
were
crushed.
But
the
throng
of
gamblers
were
successful
in
causing
Wall
Street
headaches.
They
forced
short-covering
losses
for
many,
including
rock-star
hedge
fund
Melvin
Capital
Management
that
needed
to
be
bailed
out
after
a
53%
loss
in
January
alone.
There
were
other
speculative
themes
that
did
not
receive
as
much
media
attention.
There
was
the
boom
in
prices
and
funding
of
new
finance
vehicles
that
act
as
publicly
traded
“blank-check”
companies,
formally
known
as
special
purpose
acquisition
companies
(SPACs).
SPACs
act
as
a
financing
shell
for
future,
unknown
IPOs.
Media
celebrities
and
athletes
started
using
their
fame
to
promote
new
SPACs
to
collect
fees
on
billions
of
dollars
raised.
On
top
of
a
record
year
in
2020,
300
new
SPACs
raised
$100
billion
in
the
first
quarter
of
2021
alone.
Longtime
investor
Jeremy
Gratham
called
SPACs,
“a
license
to
rip
investors
off.”
The
crypto-world
also
kept
pace
with
the
mania
as
Bitcoin
advanced
over
300%
since
October.
But
the
real
winner
was
an
obscure
coin
called
Dogecoin
(DOGE).
DOGE
was
also
promoted
by
celebrities
on
social
media
and
instantly
took
on
hero
status
with
a
continuous
flow
of
DOGE
“rocketship”
memes.
One
championed
effort
was
a
meme
of
Elon
Musk,
Gene
Simmons
and
Snoop
Dogg;
DOGE
rose
roughly
1000%
in
less
than
2
weeks.
Then
there
was
the
crypto
boom
in
“non-fungible
tokens”
(NFTs).
NFTs
simply
place
a
blockchain
identifier
on
virtual
art
and
other
digital
collectibles.
They
appear
to
be
an
attempt
at
creating
artificial
scarcity
and
have
no
real
value.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
3
Absolute
Funds
In
our
opinion,
many
of
these
episodes
and
this
craze
in
speculative
creativity
puts
1929,
1999
and
2007
to
shame.
It’s
never
been
easier
for
anyone
to
speculate
in
anything
at
any
time,
day
or
night.
In
fact,
since
mid-March
2020
one
gaming
stock,
Penn
National,
rose
nearly
3000%,
before
cooling
off
in
the
past
month.
It’s
difficult
not
to
draw
comparisons
between
this
era
and
the
Tulip
mania
of
1637.
Perhaps
the
important
event
from
a
signal
perspective
is
the
spectacular
fall
of
Bill
Hwang’s
Archegos
Capital
Management.
Market
cycles
have
always
produced
single-fund
blow-ups
from
over-leverage,
complexity,
and
margin
calls.
Long-Term
Capital
and
Bear
Stearns’
sub-prime
Funds
come
to
mind
from
more
recent
bubbles.
But
it’s
hard
to
imagine
a
relatively
unknown
$20
billion
hedge
fund
simply
leveraging
up
high-beta
growth
stocks
resulting
in
such
a
destructive
loss
of
capital.
Hwang
was
using
swaps
to
leverage
his
investment
portfolio
up
to
$100
billion,
an
enormous
sum.
Several
banks
took
huge
losses
to
cover
the
margin
and
swap
debts.
Considering
this
implosion
took
place
under
fairly
tame
market
conditions,
investors
should
question
what
could
come
should
a
larger,
more
volatile
event
take
place.
On
top
of
the
other
speculative
concerns
and
hedge
fund
blow
ups,
this
is
a
“tip
of
the
iceberg”
event
that
results
in
banks
reigning
in
margin
and
speculative
borrowing
across
the
entire
investment
landscape.
It
is
usually
a
warning
signal
for
what’s
to
come.
It
has
been
a
long
time
since
price
and
value
mattered.
We
are
well
beyond
the
debt
and
valuation
levels
of
1929
and
1999.
Incredibly,
total
U.S.
debt
is
over
$77
trillion
($620,000
per
household).
At
the
2000
bubble
peak
the
liability
was
$260,000
per
household
and
at
the
peak
of
the
2007
housing
bubble,
$475,000.
Most
Americans
have
no
idea
what
these
archaic
measures
really
mean.
Many
professional
investors
do,
but
they
no
longer
pay
much
attention
to
them.
As
such
it
has
become
somewhat
meaningless
to
belabor
relative
valuation
statistics
at
this
point
(see
chart
below
if
curious).
We
are
only
able
to
judge
the
size
of
the
overall
bubble
environment
based
on
more
anecdotal
blow-
off
levels
of
greed
and
speculation:
nightly
news
headlines,
celebrity
pitchmen,
record
margin
debt/GDP
(see
chart
on
next
page),
record
household
equity
allocations,
new
era
proclamations,
hero-worshiping
of
fund
managers,
and
numerous
investing
cults.
On
those
fronts,
we
seem
to
be
nearing
what
would
equate
to
the
end
of
a
larger
financial
cycle
that
has
accumulated
over
the
last
20+
years.
This
means,
from
a
technical
standpoint,
we
are
nearing
the
end
of
a
market
Supercycle
that
dates
back
many
decades.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
4
Absolute
Funds
Sincerely,
Jay
Compson
Portfolio
Manager
Absolute
Investment
Advisers
LLC
ABSOLUTE
STRATEGIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2021
5
Absolute
Funds
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$25,000
investment
in
Institutional
Shares,
including
reinvested
dividends
and
distributions,
in
Absolute
Strategies
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmarks,
S&P
500
Index
(“S&P
500”),
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index
(“Barclays
Index”),
the
HFRX
Global
Hedge
Fund
Index
(“HFRX”)
and
the
MSCI
World
Index
(“MSCI
World”),
over
the
past
ten
fiscal
years.
The
S&P
500®
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
Barclays
Index
is
a
broad
based
measurement
of
the
U.S.
dollar-denominated,
investment-
grade,
fixed-rate,
SEC
registered
taxable
bond
market.
The
HFRX
is
a
broad-based
measurement
of
the
performance
of
the
hedge
fund
universe;
it
is
comprised
of
eight
strategies
-
convertible
arbitrage,
distressed
securities,
equity
hedge,
equity
market
neutral,
event
driven,
macro,
merger
arbitrage,
and
relative
value
arbitrage.
The
strategies
are
asset-weighted
based
on
the
distribution
of
assets
in
the
hedge
fund
industry.
The
MSCI
World
measures
the
performance
of
a
diverse
range
of
24
developed
countries’
stock
markets
including
the
United
States
and
Canada,
and
countries
in
Europe,
the
Middle
East;
Asia
and
the
Pacific.
The
total
return
of
the
indices
include
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
indices
do
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
indices
are
unmanaged
and
are
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$25,000
Investment
Absolute
Strategies
Fund
vs.
S&P
500®
Index,
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index,
HFRX
Global
Hedge
Fund
Index
and
MSCI
World
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
2.37%.
Excluding
the
effect
of
expenses
attributable
to
dividends
and
interest
on
short
sales
and
acquired
fund
fees
and
expenses,
the
Fund's
total
annual
operating
expense
ratio
would
be
2.20%.
However,
the
Fund’s
adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses)
to
1.99%
for
Institutional
Shares,
through
August
1,
2022
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
adviser
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
Expense
Cap
and
(ii)
the
Expense
Cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
Total
Average
Annual
Total
Returns
Periods
Ended
March
31,
2021
One
Year
Five
Year
Ten
Year
Absolute
Strategies
Fund
Institutional
Shares
-5.97%
-2.75%
-0.90%
S&P
500®
Index
56.35%
16.29%
13.91%
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index
0.71%
3.10%
3.44%
HFRX
Global
Hedge
Fund
Index
16.15%
3.95%
1.35%
MSCI
World
Index
54.03%
13.36%
9.88%
ABSOLUTE
STRATEGIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2021
6
Absolute
Funds
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
period,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
To
the
extent
that
the
Fund
invests
in
another
fund
sponsored
by
the
Fund's
adviser
or
its
affiliates,
the
adviser
may
waive
certain
fees
and
expenses.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(888)
992-2765.
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2021
7
Absolute
Funds
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$25,000
investment,
including
reinvested
dividends
and
distributions,
in
the
Absolute
Capital
Opportunities
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmarks,
the
HFRX
Equity
Hedge
Index
(“HFRX
Equity”)
and
the
S&P
500
Index
(“S&P
500”),
since
inception.
HFRX
Equity
measures
the
performance
of
strategies
that
maintain
positions
both
long
and
short
in
primarily
equity
and
equity
derivative
securities.
The
S&P
500
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
total
return
of
the
indices
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
indices
do
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
indices
are
unmanaged
and
are
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$25,000
Investment
Absolute
Capital
Opportunities
Fund
vs.
HFRX
Equity
Hedge
Index
and
S&P
500
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.91%.
Excluding
the
effect
of
expenses
attributable
to
dividends
and
interest
on
short
sales
and
acquired
fund
fees
and
expenses,
the
Fund's
total
annual
operating
expense
ratio
would
be
1.84%.
However,
the
Fund’s
adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses)
to
1.75%,
through
August
1,
2022
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
adviser
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
Expense
Cap
and
(ii)
the
Expense
Cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
period,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(888)
992-2765.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2021
One
Year
Five
Year
Since
Inception
12/30/15
Absolute
Capital
Opportunities
Fund
5.41%
5.61%
5.75%
HFRX
Equity
Hedge
Index
23.88%
4.08%
3.26%
S&P
500®
Index
56.35%
16.29%
15.54%
Absolute
Funds
8
Absolute
Funds
THIS
PAGE
INTENTIONALLY
LEFT
BLANK
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2021
9
Absolute
Funds
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$25,000
investment,
including
reinvested
dividends
and
distributions,
in
Institutional
Shares
of
Absolute
Convertible
Arbitrage
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmarks,
HFRX
Fixed
Income
Convertible
Arbitrage
Index
("HFRX
Fixed
Income"),
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index
("Barclays
Index"),
IBoxx
High
Yield
Index
("iBoxx
Index")
and
the
S&P
500
Index
("S&P
500"),
over
the
past
ten
fiscal
years.
The
HFRX
Fixed
Income
measures
the
performance
of
hedge
fund
strategies
that
are
predicated
on
realizing
a
spread
between
related
instruments
at
least
one
of
which
is
a
convertible
fixed
income
instrument.
The
iBoxx
Index
consists
of
liquid
USD
high
yield
bonds,
selected
to
provide
a
balanced
representation
of
the
broad
USD
high
yield
corporate
bond
universe.
The
S&P
500®
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
Barclays
Index
is
a
broad
based
measurement
of
the
U.S.
dollar-denominated,
investment-grade,
fixed-
rate,
SEC
registered
taxable
bond
market.
The
total
return
of
the
indices
include
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
indices
do
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
indices
are
unmanaged
and
are
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$25,000
Investment
Absolute
Convertible
Arbitrage
Fund
-
Institutional
Shares
vs.
HFRX
Fixed
Income
Convertible
Arbitrage
Index,
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index,
iBoxx
High
Yield
Index
and
S&P
500
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.67%.
Excluding
the
effect
of
expenses
attributable
to
dividends
and
interest
on
short
sales
and
acquired
fund
fees
and
expenses,
the
Fund's
total
annual
operating
expense
ratio
would
be
1.58%.
However,
the
Fund’s
Adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
to
1.20%,
through
August
1,
2022
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
Adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
Adviser
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
Expense
Cap
and
(ii)
the
Expense
Cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
period,
Average
Annual
Total
Returns
Periods
Ended
March
31,
2021
One
Year
Five
Year
Ten
Year
Absolute
Convertible
Arbitrage
Fund
-
Institutional
Shares
13.12%
7.43%
4.59%
HFRX
Fixed
Income
Convertible
Arbitrage
Index
25.44%
7.19%
3.47%
Bloomberg
Barclays
U.S.
Aggregate
Bond
Index
0.71%
3.10%
3.44%
iBoxx
High
Yield
Index
19.74%
7.15%
5.73%
S&P
500®
Index
56.35%
16.29%
13.91%
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2021
10
Absolute
Funds
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(888)
992-2765.
On
August
14,
2017,
a
hedge
fund
managed
by
Mohican
Financial
Management
LLC
reorganized
into
the
Fund.
The
Fund’s
performance
for
periods
prior
to
the
commencement
of
operations
is
that
of
the
hedge
fund
and
is
based
on
calculations
that
are
different
from
the
standardized
method
of
calculations
adopted
by
the
SEC.
The
performance
of
the
hedge
fund
was
calculated
net
of
the
hedge
fund’s
fees
and
expenses.
The
performance
of
the
hedge
fund
is
not
the
performance
of
the
Fund,
has
not
been
restated
to
reflect
the
fees,
estimated
expenses
and
fee
waivers
and/or
expense
limitations
of
the
Fund,
and
is
not
necessarily
indicative
of
the
Fund’s
future
performance.
If
the
performance
of
the
hedge
fund
had
been
restated
to
reflect
the
applicable
fees
and
expenses
of
the
Fund,
the
performance
may
have
been
lower.
The
hedge
fund
was
not
registered
under
the
Investment
Company
Act
of
1940
(“1940
Act”)
and
was
not
subject
to
certain
investment
limitations,
diversification
requirements
and
other
restrictions
imposed
by
the
1940
Act
and
the
Internal
Revenue
Code
of
1986,
which,
if
applicable,
may
have
adversely
affected
its
performance.
ABSOLUTE
STRATEGIES
FUND
PORTFOLIO
HOLDINGS
SUMMARY
(Unaudited)
March
31,
2021
11
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
futures
contracts
and
purchased
options
,
cash, prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
futures
contracts
and
purchased
options represent
6.5%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Common
Stock
24.9%
Asset
Backed
Obligations
0.3%
Investment
Companies
50.0%
Money
Market
Fund
17.9%
Purchased
Options
0.6%
Other
Assets
&
Liabilities,
Net
*
6.3%
100.0%
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2021
12
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
24.9%
Communication
Services
-
0.7%
9,500
Comcast
Corp.,
Class A
$
514,045
Consumer
Discretionary
-
2.3%
500
Graham
Holdings
Co.,
Class B
281,220
4,000
Starbucks
Corp.
437,080
4,500
The
TJX
Cos.,
Inc.
297,675
11,000
Unilever
PLC,
ADR
614,130
1,630,105
Consumer
Staples
-
1.6%
2,500
Diageo
PLC,
ADR
410,525
8,000
Ingredion,
Inc.
719,360
1,129,885
Energy
-
1.5%
30,000
Enbridge,
Inc.
1,092,000
Financials
-
6.4%
900
Alleghany
Corp.
(a)
563,661
7,000
Berkshire
Hathaway,
Inc.,
Class B
(a)
1,788,290
2,500
Jones
Lang
LaSalle,
Inc.
(a)
447,600
20,000
Loews
Corp.
1,025,600
4,750
The
Travelers
Cos.,
Inc.
714,400
4,539,551
Health
Care
-
2.0%
3,600
Medtronic
PLC
425,268
20,000
Pfizer,
Inc.
724,600
700
UnitedHealth
Group,
Inc.
260,449
3,101
Viatris,
Inc.
(a)
43,321
1,453,638
Industrials
-
0.5%
2,500
Expeditors
International
of
Washington,
Inc.
269,225
9,000
Mueller
Water
Products,
Inc.,
Class A
125,010
394,235
Information
Technology
-
2.3%
8,500
Cerner
Corp.
610,980
15,000
Cisco
Systems,
Inc./Delaware
775,650
2,500
Guidewire
Software,
Inc.
(a)
254,075
1,640,705
Materials
-
5.5%
11,000
Agnico
Eagle
Mines,
Ltd.
635,910
30,000
Barrick
Gold
Corp.
594,000
17,000
Corteva,
Inc.
792,540
14,000
DuPont
de
Nemours,
Inc.
1,081,920
12,000
Kirkland
Lake
Gold,
Ltd.
405,600
13,500
Pan
American
Silver
Corp.
405,405
3,915,375
Real
Estate
-
0.9%
22,000
Equity
Commonwealth
REIT
611,600
Utilities
-
1.2%
11,005
Dominion
Energy,
Inc.
835,941
Total
Common
Stock
(Cost
$13,409,177)
17,757,080
Principal
Security
Description
Rate
Maturity
Value
Asset
Backed
Obligations
-
0.3%
$
33,383
Adjustable
Rate
Mortgage
Trust,
Series 2005-12 2A1
(b)
3.00%
03/25/36
29,879
18,969
Adjustable
Rate
Mortgage
Trust,
Series 2006-1 3A3
(b)
2.82
03/25/36
17,200
11,049
Banc
of
America
Funding
Corp.,
Series 2006-E 2A1
(b)
3.45
06/20/36
10,756
17,965
Banc
of
America
Funding
Corp.,
Series 2007-E 4A1
(b)
3.20
07/20/47
18,497
40,395
CitiMortgage
Alternative
Loan
Trust,
Series 2006-A7 1A12
6.00
12/25/36
40,395
15,451
CitiMortgage
Alternative
Loan
Trust,
Series 2007-A4 1A6
5.75
04/25/37
15,344
14,626
Countrywide
Alternative
Loan
Trust,
Series 2005-50CB 1A1
5.50
11/25/35
13,980
19,395
Countrywide
Home
Loan
Mortgage
Pass-Through
Trust,
Series 2007-HY5 1A1
(b)
3.46
09/25/47
18,259
35,224
IndyMac
Index
Mortgage
Loan
Trust,
Series 2006-AR25 3A1
(b)
3.22
09/25/36
29,001
10,573
JPMorgan
Mortgage
Trust,
Series 2007-A2 4A1M
(b)
3.10
04/25/37
9,780
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2021
13
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Asset
Backed
Obligations
-
0.3%
$
18,652
Structured
Adjustable
Rate
Mortgage
Loan
Trust,
Series 2007-3 3A1
(b)
3.72%
04/25/47
$
12,422
Total
Asset
Backed
Obligations
(Cost
$145,614)
215,513
Shares
Security
Description
Value
Investment
Companies
-
50.0%
1,602,172
Absolute
Capital
Opportunities
Fund
(c)
17,031,091
1,647,945
Absolute
Convertible
Arbitrage
Fund
(a)(c)
18,687,696
Total
Investment
Companies
(Cost
$33,260,819)
35,718,787
Shares
Security
Description
Value
Money
Market
Fund
-
17.9%
12,772,008
BlackRock
Liquidity
Funds
T-Fund
Portfolio,
Institutional
Shares,
0.03%
(d)
(Cost
$12,772,008)
12,772,008
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
0.6%
Call
Options
Purchased
-
0.5%
500
Invesco
QQQ
Trust
ETF
$
345.00
05/21
$
17,250,000
83,750
250
Invesco
QQQ
Trust
ETF
350.00
06/21
8,750,000
58,750
750
SPDR
S&P
500
ETF
Trust
400.00
04/21
30,000,000
200,625
Total
Call
Options
Purchased
(Premiums
Paid
$327,963)
343,125
Put
Options
Purchased
-
0.1%
1,000
SPDR
S&P
500
ETF
Trust
350.00
04/21
39,633,000
1,000
1,000
SPDR
S&P
500
ETF
Trust
330.00
04/21
39,633,000
1,000
1,000
SPDR
S&P
500
ETF
Trust
330.00
04/21
39,633,000
13,500
13
Tesla,
Inc.
500.00
09/21
868,309
55,575
30
Tesla,
Inc.
300.00
09/21
2,003,790
21,000
Total
Put
Options
Purchased
(Premiums
Paid
$304,368)
92,075
Total
Purchased
Options
(Premiums
Paid
$632,331)
435,200
Investments,
at
value
-
93.7%
(Cost
$60,219,949)
$
66,898,588
Other
Assets
&
Liabilities,
Net
-
6.3%
4,479,398
Net
Assets
-
100.0%
$
71,377,986
ABSOLUTE
STRATEGIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
March
31,
2021
14
Absolute
Funds
See
Notes
to
Financial
Statements.
At
March
31,
2021
,
the
Fund
held
the
following
exchange
traded
futures
contracts:
Affiliated
investments
are
investments
that
are
managed
by
the
adviser,
and
are
noted
in
the
Absolute
Strategies
Fund’s
Schedule
of
Investments.
Transactions
during
the
period
with
affiliates
were
as
follows:
At
March
31,
2021,
the
value
of
investments
in
affiliated
companies
was
$35,718,787
representing
50.05%
of
net
assets,
and
the
total
cost
was
$33,260,819.
Net
unrealized
depreciation
was
$(82,552),
net
realized
gain
was
$408,213,
total
capital
gain
distributions
were
$2,955,364
and
investment
income
was
$24,658.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
other
financial
instruments
and
liabilities
as
of
March
31,
2021.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
ADR
American
Depositary
Receipt
ETF
Exchange
Traded
Fund
PLC
Public
Limited
Company
REIT
Real
Estate
Investment
Trust
(a)
Non-income
producing
security.
(b)
Variable
rate
security,
the
interest
rate
of
which
adjusts
periodically
based
on
changes
in
current
interest
rates.
Rate
represented
is
as
of
March
31,
2021.
(c)
Affiliated
Company.
(d)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2021.
Contracts
Description
Expiration
Date
Notional
Contract
Value
Value
Net
Unrealized
Depreciation
(20)
DJIA
E-mini
Future
06/18/21
$
(3,280,885)
$
(3,289,800)
$
(8,915)
(170)
S&P
500
E-mini
Future
06/18/21
(33,582,702)
(33,722,900)
(140,198)
$
(36,863,587)
$
(37,012,700)
$
(149,113)
Investment
Companies
Absolute
Capital
Opportunities
Fund
Balance
3/31/2020
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Appreciation
Balance
3/31/2021
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
1,285,087
399,119
(82,034)
–
1,602,172
Cost
$
4,357,658
$
(883,511)
$
–
$
16,436,136
$
116,489
$
2,351,727
$
5,931
Value
15,292,540
–
–
(1,735,596)
17,031,091
Absolute
Convertible
Arbitrage
Fund
Balance
3/31/2020
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
3/31/2021
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
1,901,218
55,925
(309,198)
–
1,647,945
Cost
$
622,364
$
(3,208,276)
$
–
$
16,824,683
$
291,724
$
603,637
$
18,727
Value
19,620,564
–
–
1,653,044
18,687,696
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Common
Stock
Communication
Services
$
514,045
$
–
$
–
$
514,045
Consumer
Discretionary
1,630,105
–
–
1,630,105
Consumer
Staples
1,129,885
–
–
1,129,885
Energy
1,092,000
–
–
1,092,000
Financials
4,539,551
–
–
4,539,551
Health
Care
1,453,638
–
–
1,453,638
Industrials
394,235
–
–
394,235
Information
Technology
1,640,705
–
–
1,640,705
Materials
3,915,375
–
–
3,915,375
Real
Estate
611,600
–
–
611,600
Utilities
835,941
–
–
835,941
Asset
Backed
Obligations
–
215,513
–
215,513
Investment
Companies
35,718,787
–
–
35,718,787
ABSOLUTE
STRATEGIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
March
31,
2021
15
Absolute
Funds
See
Notes
to
Financial
Statements.
* Other
Financial
Instruments
are
derivatives
not
reflected
in
the
Schedule
of
Investments,
such
as
futures,
which
are
valued
at
the
unrealized
appreciation/(depreciation) at
year
end.
Level
1
Level
2
Level
3
Total
Money
Market
Fund
$
–
$
12,772,008
$
–
$
12,772,008
Purchased
Options
77,575
357,625
–
435,200
Investments
at
Value
$
53,553,442
$
13,345,146
$
–
$
66,898,588
Total
Assets
$
53,553,442
$
13,345,146
$
–
$
66,898,588
Liabilities
Other
Financial
Instruments*
Futures
(149,113)
–
–
(149,113)
Total
Other
Financial
Instruments*
$
(149,113)
$
–
$
–
$
(149,113)
Total
Liabilities
$
(149,113)
$
–
$
–
$
(149,113)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
PORTFOLIO
HOLDINGS
SUMMARY
(Unaudited)
March
31,
2021
16
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
call
and
put
options
purchased
and
written,
prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
call
and
put
options
purchased
and
written
represent
0.0% of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Common
Stock
52.3%
Money
Market
Fund
48.7%
Purchased
Options
3.5%
Written
Options
(3.9)%
Other
Assets
&
Liabilities,
Net
*
(0.6)%
100.0%
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2021
17
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
52.3%
Communication
Services
-
7.0%
860
Alphabet,
Inc.,
Class A
(a)(b)
$
1,773,767
645
Alphabet,
Inc.,
Class C
(a)(b)
1,334,266
1,686
Charter
Communications,
Inc.,
Class A
(a)
1,040,296
7,436
Facebook,
Inc.,
Class A
(a)(b)
2,190,125
4,426
Liberty
Media
Corp.-Liberty
SiriusXM
(a)
195,098
11,171
Motorola
Solutions,
Inc.
2,100,707
8,634,259
Consumer
Discretionary
-
13.6%
473
Amazon.com,
Inc.
(a)
1,463,500
483
Booking
Holdings,
Inc.
(a)
1,125,313
9,271
CarMax,
Inc.
(a)
1,229,891
7,555
Expedia
Group,
Inc.
(a)
1,300,367
33,900
General
Motors
Co.
(a)(b)
1,947,894
55,330
Gildan
Activewear,
Inc.
(a)
1,696,418
12,219
Hasbro,
Inc.
1,174,490
9,121
Lowe's
Cos.,
Inc.
1,734,632
8,362
Mohawk
Industries,
Inc.
(a)(b)
1,608,096
199
NVR,
Inc.
(a)
937,475
3,901
Spark
Networks
SE,
ADR
(a)
29,062
14,190
The
Kroger
Co.
510,698
10,523
The
Walt
Disney
Co.
(a)
1,941,704
16,699,540
Consumer
Staples
-
2.7%
39,810
Coty,
Inc.,
Class A
(a)
358,688
32,630
Philip
Morris
International,
Inc.
2,895,586
3,254,274
Financials
-
13.4%
18,835
American
Express
Co.
2,664,023
9,302
Aon
PLC,
Class A
2,140,483
11,725
Apollo
Global
Management,
Inc.
551,192
7,454
Berkshire
Hathaway,
Inc.,
Class B
(a)(b)
1,904,274
14,466
CBRE
Group,
Inc.,
Class A
(a)
1,144,405
5,852
Citigroup,
Inc.
425,733
9,171
JPMorgan
Chase
&
Co.
1,396,102
17,774
Northern
Trust
Corp.
1,868,225
26,751
The
Blackstone
Group,
Inc.,
Class A
1,993,752
19,185
The
Charles
Schwab
Corp.
1,250,478
5,566
Visa,
Inc.,
Class A
1,178,489
16,517,156
Health
Care
-
1.7%
6,854
Becton
Dickinson
and
Co.
1,666,550
14,859
Covetrus,
Inc.
(a)
445,324
2,111,874
Industrials
-
6.0%
21,943
Jacobs
Engineering
Group,
Inc.
2,836,572
4,618
Keysight
Technologies,
Inc.
(a)
662,221
2,666
Lockheed
Martin
Corp.
985,087
33,022
Quanta
Services,
Inc.
(b)
2,905,275
7,389,155
Information
Technology
-
7.9%
29,307
Apple,
Inc.
3,579,850
3,862
Arista
Networks,
Inc.
(a)
1,165,899
6,656
Autodesk,
Inc.
(a)
1,844,711
15,215
GoDaddy,
Inc.,
Class A
(a)
1,180,988
3,592
salesforce.com,
Inc.
(a)
761,037
16,471
SS&C
Technologies
Holdings,
Inc.
1,150,829
9,683,314
Total
Common
Stock
(Cost
$45,297,464)
64,289,572
Money
Market
Fund
-
48.7%
59,860,736
BlackRock
Liquidity
Funds
T-Fund
Portfolio,
Institutional
Shares,
0.03%
(c)(d)
(Cost
$59,860,736)
59,860,736
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2021
18
Absolute
Funds
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
3.5%
Call
Options
Purchased
-
2.5%
63
AbbVie,
Inc.
$
87.50
01/22
$
551,250
$
137,088
21
Becton
Dickinson
and
Co.
230.00
01/22
483,000
59,850
56
Bristol-Myers
Squibb
Co.
60.00
01/22
336,000
36,120
64
Bristol-Myers
Squibb
Co.
45.00
01/22
288,000
119,872
129
Comcast
Corp.
55.00
01/22
709,500
53,535
87
CVS
Health
Corp.
57.50
01/22
500,250
159,210
253
General
Motors
Co.
55.00
06/21
1,391,500
144,716
1,551
General
Motors
Co.
75.00
09/21
11,632,500
260,568
290
Merck
&
Co.,
Inc.
92.50
07/21
2,682,500
8,700
62
Merck
&
Co.,
Inc.
92.50
01/22
573,500
8,432
113
Mondelez
International,
Inc.
50.00
01/23
565,000
124,300
365
Morgan
Stanley
90.00
06/21
3,285,000
33,580
138
Morgan
Stanley
60.00
01/23
828,000
299,805
72
Occidental
Petroleum
Corp.
30.00
01/22
216,000
38,520
123
Philip
Morris
International,
Inc.
75.00
01/22
922,500
190,650
3,682
SPDR
S&P
500
ETF
Trust
415.00
04/21
152,803,000
279,832
5,155
SPDR
S&P
500
ETF
Trust
410.00
04/21
211,355,000
752,630
155
The
Coca-Cola
Co.
45.00
01/23
697,500
146,785
32
United
Parcel
Service,
Inc.
155.00
01/22
496,000
76,640
2,675
Verizon
Communications,
Inc.
65.00
07/21
17,387,500
61,525
69
Walgreens
Boots
Alliance,
Inc.
37.50
01/22
258,750
123,165
Total
Call
Options
Purchased
(Premiums
Paid
$3,033,058)
3,115,523
Put
Options
Purchased
-
1.0%
3,317
SPDR
S&P
500
ETF
Trust
375.00
04/21
131,462,661
789,446
2,580
SPDR
S&P
500
ETF
Trust
365.00
04/21
102,253,140
390,870
Total
Put
Options
Purchased
(Premiums
Paid
$1,136,917)
1,180,316
Total
Purchased
Options
(Premiums
Paid
$4,169,975)
4,295,839
Investments,
at
value
-
104.5%
(Cost
$109,328,175)
$
128,446,147
Total
Written
Options
-
(3.9)%
(Premiums
Received
$(4,806,492))
(4,809,674)
Other
Assets
&
Liabilities,
Net
-
(0.6)%
(694,742)
Net
Assets
-
100.0%
$
122,941,731
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2021
19
Absolute
Funds
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Written
Options
-
(3.9)%
Call
Options
Written
-
(3.3)%
(2,641)
SPDR
S&P
500
ETF
Trust
$
385.00
04/21
$
104,670,753
$
(3,949,616)
(69)
Walgreens
Boots
Alliance,
Inc.
50.00
01/22
378,810
(57,960)
Total
Call
Options
Written
(Premiums
Received
$(3,750,408))
(4,007,576)
Put
Options
Written
-
(0.6)%
(51)
Apollo
Global
Management,
Inc.
45.00
01/22
229,500
(24,225)
(131)
Camping
World
Holdings,
Inc.
30.00
01/22
393,000
(64,845)
(158)
Comcast
Corp.
40.00
01/22
632,000
(22,594)
(87)
Discovery,
Inc.
35.00
12/21
304,500
(52,200)
(122)
General
Motors
Co.
75.00
01/22
915,000
(248,880)
(239)
Invesco
QQQ
Trust
ETF
300.00
05/21
7,170,000
(69,788)
(28)
Johnson
&
Johnson
150.00
07/21
420,000
(5,180)
(26)
Merck
&
Co.,
Inc.
85.00
01/22
221,000
(30,095)
(97)
Merck
&
Co.,
Inc.
65.00
01/22
630,500
(19,303)
(67)
MGM
Resorts
International
35.00
06/21
234,500
(13,333)
(134)
MGM
Resorts
International
31.00
09/21
415,400
(27,068)
(84)
MGM
Resorts
International
40.00
01/22
336,000
(60,480)
(91)
Morgan
Stanley
75.00
01/22
682,500
(67,795)
(224)
Philip
Morris
International,
Inc.
55.00
01/22
1,232,000
(18,592)
(134)
Verizon
Communications,
Inc.
60.00
01/22
804,000
(77,720)
Total
Put
Options
Written
(Premiums
Received
$(1,056,084))
(802,098)
Total
Written
Options
-
(3.9)%
(Premiums
Received
$(4,806,492))
$
(4,809,674)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2021
20
Absolute
Funds
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
other
financial
instruments
and
liabilities
as
of
March
31,
2021.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
* Other
Financial
Instruments
are
derivatives
not
reflected
in
the
Schedules
of
Investments
and
Call
and
Put
Options
Written,
such
as
written
options,
which
are
reported
at
their
market
value at
year
end.
ADR
American
Depositary
Receipt
ETF
Exchange
Traded
Fund
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
(b)
All
or
a
portion
of
this
security
is
held
as
collateral
for
written
options.
(c)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2021.
(d)
The
Fund
currently
invests
a
portion
of
its
assets
in
BlackRock
Liquidity
Funds
T-Fund
Portfolio.
The
Fund
may
redeem
its
investment
from
BlackRock
Liquidity
Funds
T-Fund
Portfolio
at
any
time
if
the
Advisor
determines
that
it
is
in
the
best
interest
of
the
Fund
and
its
shareholders
to
do
so.
The
performance
of
the
Fund
may
be
directly
affected
by
the
performance
of
BlackRock
Liquidity
Funds
T-Fund
Portfolio.
The
financial
statements
of
BlackRock
Liquidity
Funds
T-Fund
Portfolio,
including
the
portfolio
of
investments,
can
be
found
at
BlackRock
Liquidity
Funds
T-Fund
Portfolio’s
website
www.blackrock.com
or
the
Securities
and
Exchange
Commission’s
website
www.sec.gov
and
should
be
read
in
conjunction
with
the
Fund’s
financial
statements.
As
of
March
31,
2021,
the
Fund’s
net
assets
invested
in
BlackRock
Liquidity
Funds
T-Fund
Portfolio
were
48.7%.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Common
Stock
Communication
Services
$
8,634,259
$
–
$
–
$
8,634,259
Consumer
Discretionary
16,699,540
–
–
16,699,540
Consumer
Staples
3,254,274
–
–
3,254,274
Financials
16,517,156
–
–
16,517,156
Health
Care
2,111,874
–
–
2,111,874
Industrials
7,389,155
–
–
7,389,155
Information
Technology
9,683,314
–
–
9,683,314
Money
Market
Fund
–
59,860,736
–
59,860,736
Purchased
Options
3,047,209
1,248,630
–
4,295,839
Investments
at
Value
$
67,336,781
$
61,109,366
$
–
$
128,446,147
Total
Assets
$
67,336,781
$
61,109,366
$
–
$
128,446,147
Liabilities
Other
Financial
Instruments*
Written
Options
(629,919)
(4,179,755)
–
(4,809,674)
Total
Liabilities
$
(629,919)
$
(4,179,755)
$
–
$
(4,809,674)
Absolute
Convertible
Arbitrage
Fund
Portfolio
Holdings
Summary
(Unaudited)
March
31,
2021
21
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
securities
sold
short
and
futures,
cash,
prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
securities
sold
short
and
futures
represent 46.9%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Long
Positions
Corporate
Convertible
Bonds
85.7%
Money
Market
Fund
18.3%
Short
Positions
Common
Stock
(50.2)%
Other
Assets
&
Liabilities,
Net
*
46.2%
100.0%
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2021
22
Absolute
Funds
See
Notes
to
Financial
Statements.
‘ll
Principal
Security
Description
Rate
Maturity
Value
Long
Positions
-
104.0%
Corporate
Convertible
Bonds
-
85.7%
Communication
Services
-
11.0%
$
1,000,000
21Vianet
Group,
Inc.
(a)(b)
0.00%
02/01/26
$
943,500
1,000,000
FireEye,
Inc.
(c)
1.63
06/01/35
995,509
1,273,000
FireEye,
Inc.
(c)
0.88
06/01/24
1,440,081
2,000,000
Harmonic,
Inc.
(c)
2.00
09/01/24
2,257,600
1,500,000
Infinera
Corp.
(c)
2.13
09/01/24
1,785,264
2,500,000
Infinera
Corp.
2.50
03/01/27
3,622,066
4,000,000
InterDigital,
Inc.
2.00
06/01/24
4,267,706
500,000
Liberty
Broadband
Corp.
(a)
1.25
09/30/50
491,500
1,500,000
Liberty
Media
Corp.
(a)
0.50
12/01/50
1,739,250
3,000,000
Limelight
Networks,
Inc.
(a)
3.50
08/01/25
2,766,000
1,000,000
Okta,
Inc.
(a)
0.38
06/15/26
1,171,250
2,000,000
PagerDuty,
Inc.
(a)
1.25
07/01/25
2,511,250
3,000,000
Palo
Alto
Networks,
Inc.
(a)
0.38
06/01/25
3,712,500
2,000,000
Proofpoint,
Inc.
(c)
0.25
08/15/24
2,143,750
4,678,000
Q2
Holdings,
Inc.
(c)
0.75
06/01/26
6,119,292
2,500,000
RingCentral,
Inc.
(a)(b)
0.00
03/15/26
2,540,625
2,970,000
TechTarget,
Inc.
(a)
0.13
12/15/25
3,520,044
661,000
Twitter,
Inc.
0.25
06/15/24
879,989
2,000,000
Twitter,
Inc.
(a)(b)
0.00
03/15/26
1,900,000
1,702,000
Twitter,
Inc.,
Series 2014
1.00
09/15/21
1,769,016
1,720,000
Vonage
Holdings
Corp.
1.75
06/01/24
1,812,278
48,388,470
Consumer
Discretionary
-
17.0%
1,500,000
2U,
Inc.
(a)
2.25
05/01/25
2,359,500
3,000,000
Airbnb,
Inc.
(a)(b)
0.00
03/15/26
3,147,000
2,000,000
Alarm.com
Holdings,
Inc.
(a)(b)
1.66
-
1.81
01/15/26
1,865,000
3,882,000
American
Airlines
Group,
Inc.
(c)
6.50
07/01/25
6,686,745
1,000,000
American
Eagle
Outfitters,
Inc.
(a)(c)
3.75
04/15/25
3,431,250
2,670,000
Callaway
Golf
Co.
(a)
2.75
05/01/26
4,582,387
1,500,000
Chegg,
Inc.
(a)(b)
0.00
09/01/26
1,620,000
2,000,000
Dick's
Sporting
Goods,
Inc.
(a)
3.25
04/15/25
4,592,500
1,150,000
DraftKings,
Inc.
(a)(b)
0.00
03/15/28
1,143,675
1,500,000
Eventbrite,
Inc.
(a)
5.00
12/01/25
2,936,872
1,500,000
Eventbrite,
Inc.
(a)
0.75
09/15/26
1,556,250
2,000,000
Fiverr
International,
Ltd.
(a)(b)
0.00
11/01/25
2,506,200
2,500,000
Groupon,
Inc.
(a)
1.13
03/15/26
2,514,062
1,000,000
IMAX
Corp.
(a)
0.50
04/01/26
993,800
2,000,000
Lyft,
Inc.
(a)
1.50
05/15/25
3,550,000
2,500,000
National
Vision
Holdings,
Inc.
(a)
2.50
05/15/25
3,921,875
1,000,000
NCL
Corp.,
Ltd.
(a)
6.00
05/15/24
2,222,500
1,000,000
Penn
National
Gaming,
Inc.
(c)
2.75
05/15/26
4,515,000
2,300,000
PetIQ,
Inc.
(a)
4.00
06/01/26
3,270,313
1,000,000
Royal
Caribbean
Cruises,
Ltd.
(a)
4.25
06/15/23
1,410,500
1,000,000
Royal
Caribbean
Cruises,
Ltd.
(a)
2.88
11/15/23
1,304,000
500,000
Spirit
Airlines,
Inc.
4.75
05/15/25
1,534,500
3,000,000
Stride,
Inc.
(a)
1.13
09/01/27
2,771,400
1,050,000
The
Marcus
Corp.
(a)
5.00
09/15/25
2,106,009
3,000,000
The
RealReal,
Inc.
(a)
1.00
03/01/28
3,000,000
3,000,000
Wayfair,
Inc.
(a)
0.63
10/01/25
3,217,500
1,000,000
Zillow
Group,
Inc.
2.75
05/15/25
2,080,000
74,838,838
Consumer
Staples
-
1.7%
3,550,000
Flexion
Therapeutics,
Inc.
(c)
3.38
05/01/24
3,251,433
3,000,000
FTI
Consulting,
Inc.
(c)
2.00
08/15/23
4,389,000
7,640,433
Energy
-
1.9%
2,000,000
Enphase
Energy,
Inc.
(a)(b)
0.15
03/01/28
1,854,952
4,500,000
Helix
Energy
Solutions
Group,
Inc.
(c)
6.75
02/15/26
5,225,400
500,000
Newpark
Resources,
Inc.
(c)
4.00
12/01/21
497,500
1,000,000
Oil
States
International,
Inc.
(a)
4.75
04/01/26
944,906
8,522,758
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2021
23
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Financials
-
2.0%
$
2,842,000
Encore
Capital
Group,
Inc.
(c)
3.25%
10/01/25
$
3,509,863
1,000,000
GEO
Corrections
Holdings,
Inc.
(a)
6.50
02/23/26
1,049,230
2,000,000
Pinduoduo,
Inc.
(b)
0.00
12/01/25
2,126,940
1,500,000
Redfin
Corp.
(a)(b)
0.00
10/15/25
1,761,563
500,000
Repay
Holdings
Corp.
(a)(b)
0.00
02/01/26
491,250
8,938,846
Health
Care
-
15.5%
1,000,000
Accolade,
Inc.
(a)
0.50
04/01/26
1,099,375
2,500,000
Allscripts
Healthcare
Solutions,
Inc.
(c)
0.88
01/01/27
3,274,315
1,500,000
Avid
SPV,
LLC
(a)
1.25
03/15/26
1,599,465
1,500,000
Bridgebio
Pharma,
Inc.
(c)
2.50
03/15/27
2,481,600
2,000,000
Bridgebio
Pharma,
Inc.
(a)
2.25
02/01/29
1,909,798
3,000,000
CONMED
Corp.
(c)
2.63
02/01/24
4,704,359
3,500,000
CryoLife,
Inc.
(a)
4.25
07/01/25
4,208,750
2,000,000
Cutera,
Inc.
(a)
2.25
03/15/26
2,256,200
500,000
Envista
Holdings
Corp.
(a)
2.38
06/01/25
1,024,400
2,077,000
Exact
Sciences
Corp.
(c)
1.00
01/15/25
3,898,269
2,050,000
Glaukos
Corp.
(a)
2.75
06/15/27
3,462,040
2,000,000
Gossamer
Bio,
Inc.
(c)
5.00
06/01/27
1,795,000
1,450,000
Health
Catalyst,
Inc.
(a)
2.50
04/15/25
2,472,250
1,750,000
Heska
Corp.
(a)
3.75
09/15/26
3,602,900
1,000,000
Invacare
Corp.
(a)
4.25
03/15/26
1,001,837
2,500,000
Jazz
Investments
I,
Ltd.
(a)
2.00
06/15/26
3,221,875
2,000,000
Kadmon
Holdings,
Inc.
(a)
3.63
02/15/27
1,748,978
3,100,000
MannKind
Corp.
(a)
2.50
03/01/26
3,142,625
505,000
Natera,
Inc.
(a)
2.25
05/01/27
1,383,069
2,000,000
NuVasive,
Inc.
0.38
03/15/25
2,047,500
3,000,000
Pacira
BioSciences,
Inc.
(a)
0.75
08/01/25
3,648,900
1,150,000
Revance
Therapeutics,
Inc.
1.75
02/15/27
1,294,504
2,026,000
SmileDirectClub,
Inc.
(a)(b)
1.95
-
2.83
02/01/26
1,784,146
3,000,000
Tabula
Rasa
HealthCare,
Inc.
1.75
02/15/26
3,045,000
1,750,000
Travere
Therapeutics,
Inc.
(c)
2.50
09/15/25
1,809,062
3,650,000
Varex
Imaging
Corp.
(a)
4.00
06/01/25
4,523,719
1,800,000
Zogenix,
Inc.
(a)
2.75
10/01/27
1,983,375
68,423,311
Industrials
-
12.3%
1,000,000
Bloom
Energy
Corp.
(a)
2.50
08/15/25
1,836,628
2,205,000
Chart
Industries,
Inc.
(a)
1.00
11/15/24
5,483,559
2,000,000
GoPro,
Inc.
(a)
1.25
11/15/25
2,897,600
5,000,000
Granite
Construction,
Inc.
(c)
2.75
11/01/24
6,962,034
2,499,000
II-VI,
Inc.
(c)
0.25
09/01/22
3,818,784
4,495,000
Itron,
Inc.
(a)(b)
0.00
03/15/26
4,500,619
1,939,000
Kaman
Corp.
(c)
3.25
05/01/24
2,111,571
3,000,000
KBR,
Inc.
(c)
2.50
11/01/23
4,745,625
956,000
Knowles
Corp.
3.25
11/01/21
1,127,506
2,700,000
Mesa
Laboratories,
Inc.
(c)
1.38
08/15/25
2,975,130
4,001,000
SMART
Global
Holdings,
Inc.
2.25
02/15/26
5,268,917
3,337,000
The
Greenbrier
Cos.,
Inc.
(c)
2.88
02/01/24
3,645,673
1,500,000
The
Middleby
Corp.
(a)
1.00
09/01/25
2,117,813
2,000,000
Veoneer,
Inc.
4.00
06/01/24
2,661,250
2,751,000
Winnebago
Industries,
Inc.
1.50
04/01/25
3,823,890
53,976,599
Information
Technology
-
23.5%
2,500,000
Bandwidth,
Inc.
(a)
0.50
04/01/28
2,437,500
3,000,000
Blackline,
Inc.
(a)(b)
0.00
03/15/26
2,926,875
1,770,000
Box,
Inc.
(a)(b)
0.00
01/15/26
2,012,269
1,570,000
Cloudflare,
Inc.
(a)
0.75
05/15/25
3,109,581
2,500,000
Coupa
Software,
Inc.
(a)
0.38
06/15/26
2,837,500
1,500,000
Cree,
Inc.
(a)
1.75
05/01/26
3,550,350
1,000,000
Dropbox,
Inc.
(a)(b)
0.06
03/01/26
1,033,125
1,522,000
Envestnet,
Inc.
(c)
1.75
06/01/23
1,878,148
1,000,000
Envestnet,
Inc.
(a)
0.75
08/15/25
1,001,244
1,000,000
Everbridge,
Inc.
(c)
0.13
12/15/24
1,276,875
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2021
24
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Information
Technology
-
23.5%
(continued)
$
1,500,000
Evolent
Health,
Inc.
(a)(c)
3.50%
12/01/24
$
2,002,500
2,011,000
Evolent
Health,
Inc.
1.50
10/15/25
1,921,762
5,000,000
Five9,
Inc.
(a)
0.50
06/01/25
6,700,000
2,000,000
Guidewire
Software,
Inc.
(c)
1.25
03/15/25
2,260,000
1,500,000
HubSpot,
Inc.
(a)
0.38
06/01/25
2,582,813
1,500,000
Impinj,
Inc.
(c)
2.00
12/15/26
2,711,250
2,500,000
Insight
Enterprises,
Inc.
(c)
0.75
02/15/25
3,685,564
2,000,000
LivePerson,
Inc.
(a)(b)
0.00
12/15/26
2,025,000
2,000,000
Lumentum
Holdings,
Inc.
0.50
12/15/26
2,336,200
1,000,000
MACOM
Technology
Solutions
Holdings,
Inc.
(a)
0.25
03/15/26
1,015,989
2,430,000
MicroStrategy,
Inc.
(a)
0.75
12/15/25
4,653,068
1,000,000
MicroStrategy,
Inc.
(a)(b)
0.00
02/15/27
840,000
1,950,000
Mitek
Systems,
Inc.
(a)
0.75
02/01/26
1,953,656
3,500,000
Model
N,
Inc.
(a)
2.63
06/01/25
4,530,330
3,000,000
MongoDB,
Inc.
0.25
01/15/26
4,335,000
3,500,000
Nova
Measuring
Instruments,
Ltd.
(a)(b)
0.00
10/15/25
4,641,875
1,000,000
Omnicell,
Inc.
(a)
0.25
09/15/25
1,430,000
3,000,000
Perficient,
Inc.
(a)
1.25
08/01/25
3,882,770
2,000,000
PROS
Holdings,
Inc.
(a)
2.25
09/15/27
2,531,250
2,000,000
Rapid7,
Inc.
(a)
2.25
05/01/25
2,843,800
2,000,000
Splunk,
Inc.
1.13
09/15/25
2,361,250
1,300,000
Spotify
USA,
Inc.
(a)(b)
0.00
03/15/26
1,236,300
400,000
Varonis
Systems,
Inc.
(a)
1.25
08/15/25
711,500
3,000,000
Veeco
Instruments,
Inc.
(a)
3.75
06/01/27
5,038,125
5,000,000
Vocera
Communications,
Inc.
(a)
0.50
09/15/26
4,603,125
4,500,000
Workiva,
Inc.
1.13
08/15/26
5,956,142
2,000,000
Zynga,
Inc.
(c)
0.25
06/01/24
2,747,600
103,600,336
Materials
-
0.8%
2,910,000
SSR
Mining,
Inc.
2.50
04/01/39
3,419,250
Total
Corporate
Convertible
Bonds
(Cost
$322,057,335)
377,748,841
Shares
Security
Description
Value
Money
Market
Fund
-
18.3%
80,702,302
BlackRock
Liquidity
Funds
T-Fund
Portfolio,
Institutional
Shares,
0.03%
(d)
(Cost
$80,702,302)
80,702,302
Total
Long
Positions
-
104.0%
(Cost
$402,759,637)
458,451,143
Total
Short
Positions
-
(50.2)%
(Proceeds
$(190,430,050))
(221,203,211)
Other
Assets
&
Liabilities,
Net
-
46.2%
203,725,623
Net
Assets
-
100.0%
$
440,973,555
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2021
25
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Short
Positions
-
(50.2)%
Common
Stock
-
(50.2)%
Communication
Services
-
(4.9)%
(9,200)
21Vianet
Group,
Inc.,
ADR
$
(297,160)
(120)
Charter
Communications,
Inc.,
Class A
(74,042)
(28,500)
FireEye,
Inc.
(557,745)
(143,550)
Harmonic,
Inc.
(1,125,432)
(370,153)
Infinera
Corp.
(3,564,573)
(16,800)
InterDigital,
Inc.
(1,065,960)
(150,794)
Limelight
Networks,
Inc.
(538,335)
(2,700)
Okta,
Inc.
(595,161)
(37,802)
PagerDuty,
Inc.
(1,520,775)
(7,347)
Palo
Alto
Networks,
Inc.
(2,366,175)
(7,665)
Proofpoint,
Inc.
(964,180)
(41,522)
Q2
Holdings,
Inc.
(4,160,504)
(3,424)
RingCentral,
Inc.,
Class A
(1,019,941)
(30,500)
TechTarget,
Inc.
(2,118,225)
(17,507)
Twitter,
Inc.
(1,113,971)
(46,600)
Vonage
Holdings
Corp.
(550,812)
(21,632,991)
Consumer
Discretionary
-
(11.0)%
(42,755)
2U,
Inc.
(1,634,524)
(5,558)
Airbnb,
Inc.
(1,044,571)
(6,800)
Alarm.com
Holdings,
Inc.
(587,384)
(202,975)
American
Airlines
Group,
Inc.
(4,851,102)
(106,500)
American
Eagle
Outfitters,
Inc.
(3,114,060)
(122,700)
Callaway
Golf
Co.
(3,282,225)
(9,539)
Chegg,
Inc.
(817,111)
(50,579)
Dick's
Sporting
Goods,
Inc.
(3,851,591)
(7,908)
DraftKings,
Inc.
(484,998)
(131,709)
Eventbrite,
Inc.,
Class A
(2,918,671)
(7,206)
Fiverr
International,
Ltd.
(1,564,999)
(22,700)
Groupon,
Inc.
(1,147,371)
(18,400)
IMAX
Corp.
(369,840)
(10,300)
Live
Nation
Entertainment,
Inc.
(871,895)
(42,829)
Lyft,
Inc.,
Class A
(2,705,936)
(69,058)
National
Vision
Holdings,
Inc.
(3,026,812)
(62,000)
Norwegian
Cruise
Line
Holdings,
Ltd.
(1,710,580)
(40,300)
Penn
National
Gaming,
Inc.
(4,225,052)
(57,800)
PetIQ,
Inc.
(2,038,028)
(18,742)
Royal
Caribbean
Cruises,
Ltd.
(1,604,503)
(35,600)
Spirit
Airlines,
Inc.
(1,313,640)
(29,100)
Stride,
Inc.
(876,201)
(83,100)
The
Marcus
Corp.
(1,661,169)
(60,400)
The
RealReal,
Inc.
(1,366,852)
(4,150)
Wayfair,
Inc.,
Class A
(1,306,213)
(48,375,328)
Consumer
Staples
-
(0.8)%
(40,000)
Flexion
Therapeutics,
Inc.
(358,000)
(21,357)
FTI
Consulting,
Inc.
(2,992,329)
(3,350,329)
Energy
-
(0.6)%
(4,290)
Enphase
Energy,
Inc.
(695,666)
(419,195)
Helix
Energy
Solutions
Group,
Inc.
(2,116,935)
(15,000)
Oil
States
International,
Inc.
(90,450)
(2,903,051)
Financials
-
(1.4)%
(52,000)
Encore
Capital
Group,
Inc.
(2,091,960)
(6,668)
Pinduoduo,
Inc.,
ADR
(892,712)
(13,800)
Redfin
Corp.
(918,942)
(8,000)
Repay
Holdings
Corp.
(187,840)
(67,766)
The
GEO
Group,
Inc.
REIT
(525,864)
(12,850)
Zillow
Group,
Inc.,
Class C
(1,665,874)
(6,283,192)
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2021
26
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Health
Care
-
(9.1)%
(13,300)
Accolade,
Inc.
$
(603,421)
(140,400)
Allscripts
Healthcare
Solutions,
Inc.
(2,108,106)
(46,000)
Avid
Bioservices,
Inc.
(838,580)
(42,703)
Bridgebio
Pharma,
Inc.
(2,630,505)
(25,974)
CONMED
Corp.
(3,391,945)
(108,000)
CryoLife,
Inc.
(2,438,640)
(42,600)
Cutera,
Inc.
(1,280,130)
(20,400)
Envista
Holdings
Corp.
(832,320)
(21,900)
Exact
Sciences
Corp.
(2,885,982)
(29,500)
Glaukos
Corp.
(2,475,935)
(80,000)
Gossamer
Bio,
Inc.
(740,000)
(40,200)
Health
Catalyst,
Inc.
(1,880,154)
(18,150)
Heska
Corp.
(3,057,549)
(44,400)
Invacare
Corp.
(356,088)
(11,642)
Jazz
Pharmaceuticals
PLC
(1,913,596)
(195,500)
Kadmon
Holdings,
Inc.
(760,495)
(297,200)
MannKind
Corp.
(1,165,024)
(12,000)
Natera,
Inc.
(1,218,480)
(8,500)
NuVasive,
Inc.
(557,260)
(29,592)
Pacira
BioSciences,
Inc.
(2,074,103)
(25,295)
Revance
Therapeutics,
Inc.
(706,995)
(61,700)
SmileDirectClub,
Inc.
(636,127)
(22,650)
Tabula
Rasa
HealthCare,
Inc.
(1,043,032)
(24,300)
Travere
Therapeutics,
Inc.
(606,771)
(137,425)
Varex
Imaging
Corp.
(2,815,838)
(51,600)
Zogenix,
Inc.
(1,007,232)
(40,024,308)
Industrials
-
(7.8)%
(52,200)
Bloom
Energy
Corp.,
Class A
(1,412,010)
(34,400)
Chart
Industries,
Inc.
(4,896,840)
(163,860)
GoPro,
Inc.,
Class A
(1,907,330)
(116,430)
Granite
Construction,
Inc.
(4,686,307)
(46,905)
II-VI,
Inc.
(3,206,895)
(20,098)
Itron,
Inc.
(1,781,688)
(11,900)
Kaman
Corp.
(610,351)
(91,029)
KBR,
Inc.
(3,494,603)
(31,900)
Knowles
Corp.
(667,348)
(6,137)
Mesa
Laboratories,
Inc.
(1,494,360)
(76,499)
SMART
Global
Holdings,
Inc.
(3,520,484)
(26,848)
The
Greenbrier
Cos.,
Inc.
(1,267,763)
(8,910)
The
Middleby
Corp.
(1,476,833)
(65,428)
Veoneer,
Inc.
(1,601,677)
(30,800)
Winnebago
Industries,
Inc.
(2,362,668)
(34,387,157)
Information
Technology
-
(14.3)%
(9,023)
Bandwidth,
Inc.,
Class A
(1,143,575)
(10,160)
BlackLine,
Inc.
(1,101,344)
(42,371)
Box,
Inc.
(972,838)
(36,572)
Cloudflare,
Inc.,
Class A
(2,569,549)
(5,894)
Coupa
Software,
Inc.
(1,499,905)
(29,037)
Cree,
Inc.
(3,139,771)
(9,378)
Dropbox,
Inc.,
Class A
(250,017)
(16,612)
Envestnet,
Inc.
(1,199,885)
(7,077)
Everbridge,
Inc.
(857,591)
(76,117)
Evolent
Health,
Inc.,
Class A
(1,537,563)
(28,091)
Five9,
Inc.
(4,391,466)
(11,489)
Guidewire
Software,
Inc.
(1,167,627)
(4,356)
HubSpot,
Inc.
(1,978,539)
(35,600)
Impinj,
Inc.
(2,024,572)
(29,083)
Insight
Enterprises,
Inc.
(2,775,100)
(17,398)
LivePerson,
Inc.
(917,571)
(13,924)
Lumentum
Holdings,
Inc.
(1,271,957)
(6,850)
MACOM
Technology
Solutions
Holdings,
Inc.
(397,437)
(5,764)
MicroStrategy,
Inc.
(3,912,603)
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2021
27
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Information
Technology
-
(14.3)%
(continued)
(53,600)
Mitek
Systems,
Inc.
$
(781,488)
(80,750)
Model
N,
Inc.
(2,844,822)
(11,639)
MongoDB,
Inc.
(3,112,618)
(35,966)
Nova
Measuring
Instruments,
Ltd.
(3,273,266)
(8,400)
Omnicell,
Inc.
(1,090,908)
(41,662)
Perficient,
Inc.
(2,446,393)
(35,700)
PROS
Holdings,
Inc.
(1,517,250)
(24,694)
Rapid7,
Inc.
(1,842,419)
(9,171)
Splunk,
Inc.
(1,242,487)
(881)
Spotify
Technology
SA
(236,064)
(11,250)
Varonis
Systems,
Inc.
(577,575)
(171,375)
Veeco
Instruments,
Inc.
(3,554,318)
(47,700)
Vocera
Communications,
Inc.
(1,834,542)
(43,082)
Workiva,
Inc.
(3,802,417)
(170,325)
Zynga,
Inc.
(1,739,018)
(63,004,495)
Materials
-
(0.3)%
(87,000)
SSR
Mining,
Inc.
(1,242,360)
Total
Common
Stock
(Proceeds
$(190,430,050))
(221,203,211)
Total
Short
Positions
-
(50.2)%
(Proceeds
$(190,430,050))
$
(221,203,211)
Absolute
Convertible
Arbitrage
Fund
Notes
to
Schedules
of
Investments
and
Securities
Sold
Short
March
31,
2021
28
Absolute
Funds
See
Notes
to
Financial
Statements.
At
March
31,
2021,
the
Fund
held
the
following
exchange
traded
futures
contracts:
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
liabilities
as
of
March
31,
2021.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
*
Other
Financial
Instruments
are
derivatives
not
reflected
in
the
Schedule
of
Investments,
such
as
futures,
which
are
valued
at
the
unrealized
appreciation/(depreciation)
at
year
end.
ADR
American
Depositary
Receipt
LLC
Limited
Liability
Company
PLC
Public
Limited
Company
REIT
Real
Estate
Investment
Trust
(a)
Security
exempt
from
registration
under
Rule
144A
under
the
Securities
Act
of
1933.
At
year
end,
the
value
of
these
securities
amounted
to
$220,460,879
or
50.0%
of
net
assets.
(b)
Zero
coupon
bond.
Interest
rate
presented
is
yield
to
maturity.
(c)
All
or
a
portion
of
this
security
is
held
as
collateral
for
securities
sold
short.
(d)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2021.
Contracts
Description
Expiration
Date
Notional
Contract
Value
Value
Net
Unrealized
Appreciation
(400)
U.S.
Treasury
5
Year
Note
Future
06/30/21
$
(49,847,110)
$
(49,359,375)
$
487,735
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Corporate
Convertible
Bonds
$
–
$
377,748,841
$
–
$
377,748,841
Money
Market
Fund
–
80,702,302
–
80,702,302
Investments
at
Value
$
–
$
458,451,143
$
–
$
458,451,143
Other
Financial
Instruments*
Futures
487,735
–
–
487,735
Total
Assets
$
487,735
$
458,451,143
$
–
$
458,938,878
Liabilities
Securities
Sold
Short
Common
Stock
$
(221,203,211)
$
–
$
–
$
(221,203,211)
Securities
Sold
Short
$
(221,203,211)
$
–
$
–
$
(221,203,211)
Total
Liabilities
$
(221,203,211)
$
–
$
–
$
(221,203,211)
ABSOLUTE
FUNDS
STATEMENTS
OF
ASSETS
AND
LIABILITIES
March
31,
2021
29
Absolute
Funds
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
ASSETS
Investments,
at
value
(Cost
$26,959,130,
$109,328,175
and
$402,759,637,
respectively)
$
31,179,801
$
128,446,147
$
458,451,143
Investments
in
affiliates,
at
value
(Cost
$33,260,819,
$0
and
$0,
respectively)
35,718,787
–
–
$
66,898,588
$
128,446,147
$
458,451,143
Deposits
with
broker
for
securities
sold
short
–
–
205,342,147
Deposits
with
broker
for
options
2,043,161
1,019,898
–
Deposits
with
broker
for
futures
2,585,544
–
1,589,413
Receivables:
Fund
shares
sold
55
586,136
1,874,473
Investment
securities
sold
174,481
94,491
13,749,622
Dividends
and
interest
55,032
76,664
1,317,559
Prepaid
expenses
7,529
13,051
12,477
Total
Assets
71,764,390
130,236,387
682,336,834
LIABILITIES
Call
options
written,
at
value
(Premiums
received
$0,
$3,750,408
and
$0,
respectively)
–
4,007,576
–
Put
options
written,
at
value
(Premiums
received
$0,
$1,056,084
and
$0,
respectively)
–
802,098
–
Securities
sold
short,
at
value
(Proceeds
$0,
$0
and
$190,430,050,
respectively)
–
–
221,203,211
Payables:
Investment
securities
purchased
174,018
2,255,843
19,627,802
Fund
shares
redeemed
93,434
14,882
80,754
Due
to
custodian
–
–
1,602
Dividends
on
securities
sold
short
–
–
19,847
Other
payables
–
–
3,134
Accrued
Liabilities:
Investment
adviser
fees
57,492
163,795
314,111
Fund
services
fees
14,858
10,151
32,681
Other
expenses
46,602
40,311
80,137
Total
Liabilities
386,404
7,294,656
241,363,279
NET
ASSETS
$
71,377,986
$
122,941,731
$
440,973,555
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
103,436,257
$
131,212,377
$
423,842,515
Distributable
earnings
(32,058,271)
(8,270,646)
17,131,040
NET
ASSETS
$
71,377,986
$
122,941,731
$
440,973,555
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
Institutional
Shares
9,059,608
11,566,701
38,893,978
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
Institutional
Shares
(based
on
net
assets
of
$71,377,986,
$122,941,731
and
$440,973,555,
respectively)
$
7.88
$
10.63
$
11.34
ABSOLUTE
FUNDS
STATEMENTS
OF
OPERATIONS
For
the
Year
Ended
March
31,
2021
30
Absolute
Funds
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
INVESTMENT
INCOME
Dividend
income
(net
of
foreign
withholding
taxes
of
$21,194,
$0
and
$0,
respectively)
$
433,473
$
473,305
$
10,689
Dividend
income
from
affiliated
investments
24,658
–
–
Interest
income
25,941
31
3,566,607
Total
Investment
Income
484,072
473,336
3,577,296
EXPENSES
Investment
adviser
fees
1,219,031
1,130,625
2,824,748
Fund
services
fees
112,039
108,930
290,462
Transfer
agent
fees
Institutional
Shares
97,496
1,343
31,070
Custodian
fees
29,476
13,942
25,717
Registration
fees
Institutional
Shares
21,225
31,310
45,059
Professional
fees
53,343
51,546
90,985
Trustees'
fees
and
expenses
5,163
4,988
7,724
Dividend
expense
on
securities
sold
short
–
–
189,542
Interest
expense
18,558
46,337
700,703
Other
expenses
131,301
78,000
237,726
Total
Expenses
1,687,632
1,467,021
4,443,736
Fees
waived
(461,575)
(7,404)
(484,929)
Net
Expenses
1,226,057
1,459,617
3,958,807
NET
INVESTMENT
INCOME
(LOSS)
(741,985)
(986,281)
(381,511)
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
(loss)
on:
Investments
in
unaffiliated
issuers
(3,592,912)
(15,811,720)
42,693,310
Investments
in
affiliated
issuers
408,213
–
–
Capital
gain
distributions
from
affiliated
issuers
2,955,364
–
–
Foreign
currency
transactions
7,934
–
–
Securities
sold
short
–
(12,488)
(40,616,113)
Written
options
2,360,476
(10,739,464)
–
Futures
(12,124,725)
–
104,317
Net
realized
gain
(loss)
(9,985,650)
(26,563,672)
2,181,514
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
in
unaffiliated
issuers
6,096,827
28,633,890
62,342,096
Investments
in
affiliated
issuers
(82,552)
–
–
Foreign
currency
translations
1,011
284
–
Securities
sold
short
–
–
(40,192,454)
Written
options
(282,444)
1,345,539
–
Futures
316,227
–
487,735
Net
change
in
unrealized
appreciation
(depreciation)
6,049,069
29,979,713
22,637,377
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
(3,936,581)
3,416,041
24,818,891
INCREASE
(DECREASE)
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(4,678,566)
$
2,429,760
$
24,437,380
ABSOLUTE
FUNDS
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
31
Absolute
Funds
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
For
the
Years
Ended
March
31,
For
the
Years
Ended
March
31,
2021
2020
2021
2020
OPERATIONS
Net
investment
income
(loss)
$
(741,985)
$
(339,455)
$
(986,281)
$
218,785
Net
realized
gain
(loss)
(9,985,650)
6,623,651
(26,563,672)
13,341,775
Net
change
in
unrealized
appreciation
(depreciation)
6,049,069
(3,603,407)
29,979,713
(11,848,916)
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(4,678,566)
2,680,789
2,429,760
1,711,644
DISTRIBUTIONS
TO
SHAREHOLDERS
Institutional
Shares
–
(69,093)
(12,497,480)
–
Total
Distributions
Paid
–
(69,093)
(12,497,480)
–
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
36,984,948
20,207,372
74,777,605
22,028,521
Reinvestment
of
distributions:
Institutional
Shares
–
67,819
12,193,376
–
Redemption
of
shares:
Institutional
Shares
(29,467,747)
(42,395,224)
(11,911,765)
(16,748,388)
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
7,517,201
(22,120,033)
75,059,216
5,280,133
Increase
(Decrease)
in
Net
Assets
2,838,635
(19,508,337)
64,991,496
6,991,777
NET
ASSETS
Beginning
of
Year
68,539,351
88,047,688
57,950,235
50,958,458
End
of
Year
$
71,377,986
$
68,539,351
$
122,941,731
$
57,950,235
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
4,472,113
2,504,402
6,597,114
1,874,814
Reinvestment
of
distributions:
Institutional
Shares
–
8,240
1,120,454
–
Redemption
of
shares:
Institutional
Shares
(3,594,603)
(5,198,972)
(1,022,296)
(1,434,800)
Increase
(Decrease)
in
Shares
877,510
(2,686,330)
6,695,272
440,014
ABSOLUTE
FUNDS
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
32
Absolute
Funds
See
Notes
to
Financial
Statements.
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
For
the
Years
Ended
March
31,
2021
2020
OPERATIONS
Net
investment
income
(loss)
$
(381,511)
$
978,201
Net
realized
gain
2,181,514
1,461,285
Net
change
in
unrealized
appreciation
(depreciation)
22,637,377
(1,253,428)
Increase
in
Net
Assets
Resulting
from
Operations
24,437,380
1,186,058
DISTRIBUTIONS
TO
SHAREHOLDERS
Institutional
Shares
(7,382,120)
(3,645,511)
Total
Distributions
Paid
(7,382,120)
(3,645,511)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
315,924,202
76,553,072
Reinvestment
of
distributions:
Institutional
Shares
6,662,266
3,358,316
Redemption
of
shares:
Institutional
Shares
(38,533,525)
(26,354,257)
Increase
in
Net
Assets
from
Capital
Share
Transactions
284,052,943
53,557,131
Increase
in
Net
Assets
301,108,203
51,097,678
NET
ASSETS
Beginning
of
Year
139,865,352
88,767,674
End
of
Year
$
440,973,555
$
139,865,352
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
28,186,467
7,267,996
Reinvestment
of
distributions:
Institutional
Shares
598,493
318,065
Redemption
of
shares:
Institutional
Shares
(3,438,031)
(2,499,519)
Increase
in
Shares
25,346,929
5,086,542
ABSOLUTE
FUNDS
FINANCIAL
HIGHLIGHTS
33
Absolute
Funds
See
Notes
to
Financial
Statements.
Investment
Operations
Distributions
to
Shareholders
from:
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period.
Period
Ended
Net
Asset
Value,
Beginning
of
Period
Net
Investment
Income
(Loss)(a)
Net
Realized
and
Unrealized
Gains
(Losses)
on
Investments
Total
from
Investment
Operations
Net
Investment
Income
Net
Realized
Gains
Total
Distribution
to
Shareholders
Net
Asset
Value,
End
of
Period
Total
Return
ABSOLUTE
STRATEGIES
FUND
INSTITUTIONAL
SHARES
3/31/2021
$
8.38
$
(
0.
08)
(
$
0.
42
)
(
$
0.50)
$
—
$
—
$
—
$
7.88
(5.97)
%
3/31/2020
8.10
(
0.03)
0.32
0.29
(
0.01)
—
(
0.01)
8.38
3.54
3/31/2019
8.37
0.04
(
0.31)
(
0.27)
—
—
—
8.10
(3.23)
3/31/2018
8.76
(
0.07)
(
0.32)
(
0.39)
—
—
—
8.37
(4.45)
3/31/2017
10.40
(
0.10)
(
0.23)
(
0.33)
—
(
1.31)
(
1.31)
8.76
(3.40)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
INSTITUTIONAL
SHARES
3/31/2021
$
11.90
(
0.14)
0.82
0.68
(
0.00)
(c)
(
1.95)
(
1.95)
10.63
5.41
3/31/2020
11.50
0.04
0.36
0.40
—
—
—
11.90
3.48
3/31/2019
12.52
(
0.12)
(
0.13)
(
0.25)
—
(
0.77)
(
0.77)
11.50
(1.78)
3/31/2018
10.97
(
0.15)
1.70
1.55
—
—
—
12.52
14.13
3/31/2017
10.21
(
0.16)
0.92
0.76
—
—
—
10.97
7.44
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
INSTITUTIONAL
SHARES
3/31/2021
$
10.32
(
0.02)
1.37
1.35
(
0.01)
(
0.32)
(
0.33)
11.34
13.12
3/31/2020
10.49
0.08
0.05
0.13
(
0.11)
(
0.19)
(
0.30)
10.32
1.18
3/31/2019
10.29
0.10
0.30
0.40
(
0.05)
(
0.15)
(
0.20)
10.49
3.95
3/31/2018(d)
10.00
0.02(e)
0.29(e)
0.31
—
(
0.02)
(
0.02)
10.29
3.14
(f)
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
(b)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
(c)
Amount
represents
less
than
$0.005.
(d)
Commencement
of
operations
was
August
14,
2017.
(e)
Net
investment
income
and
net
realized
and
unrealized
gain
(loss)
on
investments
for
the
period
ended
March
31,
2018
was
restated.
See
Note
2
of
the
March
31,
2018
Annual
Report.
(f)
Not
annualized.
(g)
Annualized.
ABSOLUTE
FUNDS
FINANCIAL
HIGHLIGHTS
34
Absolute
Funds
See
Notes
to
Financial
Statements.
Ratios/Supplemental
Data
(Ratios
to
Average
Net
Assets)
Net
Assets,
End
of
Period
(000's)
Net
Investment
Income
(Loss)
Net
Expenses
Dividend
and
Interest
Expenses
Net
Expenses
without
Dividend
and
Interest
Expenses
Gross
Expenses(b)
Portfolio
Turnover
$
71,3
78
(0.97)
%
1.60%
0.02%
1.58%
2.21%
23%
68,539
(0.42)
1.52
0.02
1.50
2.22
45
88,048
0.49
1.67
0.05
1.62
2.31
33
166,373
(0.87)
2.78
0.82
1.96
2.94
86
501,866
(0.99)
2.86
0.95
1.91
2.89
72
122,942
(1.22)%
1.81%
0.06%
1.75%
1.8
2
%
140%
57,950
0.37
1.78
0.03
1.75
1.87
46
50,958
(0.99)
3.02
1.27
1.75
3.21
23
32,338
(1.30)
2.66
0.86
1.79
3.52
66
14,188
(1.53)
2.62
0.70
1.92
3.70
29
440,974
(0.16)%
1.68%
0.38%
1.30%
1.88%
93%
139,865
0.77
1.59
0.07
1.52
1.78
95
88,768
0.95
1.91
0.31
1.60
2.16
121
56,065
0.35(e)(g)
2.23(g)
0.60(g)
1.63(g)
3.13(g)
76(f)
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
35
Absolute
Funds
Organization
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund
(individually,
a
“Fund”
and
collectively,
the
“Funds”)
are
diversified
portfolios
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
each
Fund’s
shares
of
beneficial
interest
without
par
value.
Absolute
Strategies
Fund
currently
offers
Institutional
Shares.
Institutional
Shares
commenced
operations
on
July
11,
2005.
Absolute
Strategies
Fund
seeks
to
achieve
long-
term
capital
appreciation
with
an
emphasis
on
absolute
(positive)
returns
and
low
sensitivity
to
traditional
financial
market
indices,
such
as
the
S&P
500
Index.
Absolute
Capital
Opportunities
Fund
currently
offers
Institutional
Shares.
Absolute
Capital
Opportunities
Fund
commenced
operations
on
December
30,
2015.
Absolute
Capital
Opportunities
Fund
seeks
to
achieve
long-term
capital
appreciation
with
a
lower
sensitivity
to
traditional
financial
market
indices,
such
as
the
S&P
500
Index.
Absolute
Convertible
Arbitrage
Fund
currently
offers
Institutional
Shares
and
Investor
Shares.
Absolute
Convertible
Arbitrage
Fund
commenced
operations
on
August
14,
2017,
after
it
acquired
the
net
assets
of
the
Mohican
VCA
Fund,
LP,
a
privately
offered
hedge
fund
(the
“Predecessor
Fund”),
in
exchange
for
Fund
shares.
The
Predecessor
Fund
commenced
operations
in
2002.
Absolute
Convertible
Arbitrage
Fund
seeks
to
achieve
positive
absolute
returns
over
the
long-term
with
low
volatility
when
compared
to
traditional
market
indices.
The
Predecessor
Fund
had
an
investment
objective
and
strategies
that
were,
in
all
material
respects,
identical
to
those
of
the
Absolute
Convertible
Arbitrage
Fund.
On
August
14,
2017,
the
Predecessor
Fund
reorganized
into
the
Absolute
Convertible
Arbitrage
Fund.
The
reorganization
of
net
assets
from
this
transaction
was
as
follows:
In
addition
to
the
securities
transferred
in,
as
noted
above,
$5,895,941
of
cash
and
other
receivables
were
also
transferred
in
as
part
of
the
reorganization.
As
of
March
31,
2021,
the
Absolute
Convertible
Arbitrage
Fund
Investor
Shares
had
not
commenced
operations.
Summary
of
Significant
Accounting
Policies
The
Funds
are
investment
companies
and
follow
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
each
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Futures
contracts
are
valued
at
the
day’s
settlement
price
on
the
exchange
where
the
contract
is
traded.
Forward
currency
contracts
are
generally
valued
based
on
interpolation
of
forward
curve
data
points
obtained
from
major
banking
institutions
that
deal
in
foreign
currencies
and
currency
dealers.
Exchange-traded
options
for
which
the
last
quoted
sale
price
is
outside
the
closing
bid
and
ask
price
will
be
valued
at
the
mean
of
the
closing
bid
and
ask
price.
Shares
of
non-exchange
traded
open-end
Date
of
Contribution
Net
Assets
Shares
Market
Value
of
Investments
August
14,
2017
$16,686,633
1,668,929
$10,790,692
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
36
Absolute
Funds
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
Each
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
3,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
each
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
each
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-
based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
NAV
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
each
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
each
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
March
31,
2021,
for
each
Fund’s
investments
is
included
in
each
Fund’s
Notes
to
Schedules
of
Investments,
Securities
Sold
Short
and
Call
and
Put
Options
Written.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
and
expense
are
recorded
on
the
ex-dividend
date.
Non-cash
dividend
income
is
recorded
at
the
fair
market
value
of
the
securities
received.
Foreign
dividend
income
and
expense
are
recorded
on
the
ex-dividend
date
or
as
soon
as
possible
after
determining
the
existence
of
a
dividend
declaration
after
exercising
reasonable
due
diligence.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Each
Fund
estimates
components
of
distributions
from
real
estate
investment
trusts
(“REITs”).
Distributions
received
in
excess
of
income
are
recorded
as
a
reduction
of
the
cost
of
the
related
investments.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
37
Absolute
Funds
Foreign
Currency
Translations
–
Foreign
currency
amounts
are
translated
into
U.S.
dollars
as
follows:
(1)
assets
and
liabilities
at
the
rate
of
exchange
at
the
end
of
the
respective
period;
and
(2)
purchases
and
sales
of
securities
and
income
and
expenses
at
the
rate
of
exchange
prevailing
on
the
dates
of
such
transactions.
The
portion
of
the
results
of
operations
arising
from
changes
in
the
exchange
rates
and
the
portion
due
to
fluctuations
arising
from
changes
in
the
market
prices
of
securities
are
not
isolated.
Such
fluctuations
are
included
with
the
net
realized
and
unrealized
gain
or
loss
on
investments.
Foreign
Currency
Transactions
–
Each
Fund
may
enter
into
transactions
to
purchase
or
sell
foreign
currency
contracts
and
options
on
foreign
currency.
Forward
currency
contracts
are
agreements
to
exchange
one
currency
for
another
at
a
future
date
and
at
a
specified
price.
A
fund
may
use
forward
currency
contracts
to
facilitate
transactions
in
foreign
securities,
to
manage
a
fund’s
foreign
currency
exposure
and
to
protect
the
U.S.
dollar
value
of
its
underlying
portfolio
securities
against
the
effect
of
possible
adverse
movements
in
foreign
exchange
rates.
These
contracts
are
intrinsically
valued
daily
based
on
forward
rates,
and
a
fund’s
net
equity
therein,
representing
unrealized
gain
or
loss
on
the
contracts
as
measured
by
the
difference
between
the
forward
foreign
exchange
rates
at
the
dates
of
entry
into
the
contracts
and
the
forward
rates
at
the
reporting
date,
is
recorded
as
a
component
of
NAV.
These
instruments
involve
market
risk,
credit
risk,
or
both
kinds
of
risks,
in
excess
of
the
amount
recognized
in
the
Statements
of
Assets
and
Liabilities.
Risks
arise
from
the
possible
inability
of
counterparties
to
meet
the
terms
of
their
contracts
and
from
movement
in
currency
and
securities
values
and
interest
rates.
Due
to
the
risks
associated
with
these
transactions,
a
fund
could
incur
losses
up
to
the
entire
contract
amount,
which
may
exceed
the
net
unrealized
value
included
in
its
NAV.
Futures
Contracts
–
Each
Fund
may
purchase
futures
contracts
to
gain
exposure
to
market
changes,
which
may
be
more
efficient
or
cost
effective
than
actually
buying
the
securities.
A
futures
contract
is
an
agreement
between
parties
to
buy
or
sell
a
security
at
a
set
price
on
a
future
date.
Upon
entering
into
such
a
contract,
a
fund
is
required
to
pledge
to
the
broker
an
amount
of
cash,
U.S.
Government
obligations
or
other
high-quality
debt
securities
equal
to
the
minimum
“initial
margin”
requirements
of
the
exchange
on
which
the
futures
contract
is
traded.
Pursuant
to
the
contract,
the
Fund
agrees
to
receive
from
or
pay
to
the
broker
an
amount
of
cash
equal
to
the
daily
fluctuation
in
the
value
of
the
contract.
Such
receipts
or
payments
are
known
as
“variation
margin”
and
are
recorded
by
the
Fund
as
unrealized
gains
or
losses.
When
the
contract
is
closed,
the
Fund
records
a
realized
gain
or
loss
equal
to
the
difference
between
the
value
of
the
contract
at
the
time
it
was
opened
and
value
at
the
time
it
was
closed.
Risks
of
entering
into
futures
contracts
include
the
possibility
that
there
may
be
an
illiquid
market
and
that
a
change
in
the
value
of
the
contract
may
not
correlate
with
changes
in
the
value
of
the
underlying
securities.
Notional
amounts
of
each
individual
futures
contract
outstanding
as
of
March
31,
2021,
for
Absolute
Strategies
Fund
and
Absolute
Convertible
Arbitrage
Fund,
are
disclosed
in
the
Notes
to
Schedule
of
Investments
and
Securities
Sold
Short.
Securities
Sold
Short
–
Each
Fund
may
sell
a
security
short
to
increase
investment
returns.
Each
Fund
may
also
sell
a
security
short
in
anticipation
of
a
decline
in
the
market
value
of
a
security.
A
short
sale
is
a
transaction
in
which
the
Fund
sells
a
security
that
it
does
not
own.
To
complete
the
transaction,
the
Fund
must
borrow
the
security
in
order
to
deliver
it
to
the
buyer.
The
Fund
must
replace
the
borrowed
security
by
purchasing
it
at
market
price
at
the
time
of
replacement;
the
price
may
be
higher
or
lower
than
the
price
at
which
the
Fund
sold
the
security.
The
Fund
incurs
a
loss
from
a
short
sale
if
the
price
of
the
security
increases
between
the
date
of
the
short
sale
and
the
date
on
which
the
Fund
replaces
the
borrowed
security.
The
Fund
realizes
a
profit
if
the
price
of
the
security
declines
between
those
dates.
Until
the
Fund
replaces
the
borrowed
security,
the
Fund
will
maintain
on
its
books
and
records
cash
and
long
securities
to
sufficiently
cover
its
short
position
on
a
daily
basis.
The
collateral
for
the
securities
sold
short
includes
the
Deposits
with
Brokers
as
shown
on
the
Statements
of
Assets
and
Liabilities
and
the
securities
held
long
as
shown
on
the
Schedules
of
Investments.
Dividends
and
interest
paid
on
securities
sold
short
are
recorded
as
an
expense
on
the
Statements
of
Operations.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
38
Absolute
Funds
Purchased
Options
–
When
a
fund
purchases
an
option,
an
amount
equal
to
the
premium
paid
by
the
fund
is
recorded
as
an
investment
and
is
subsequently
adjusted
to
the
current
value
of
the
option
purchased.
If
an
option
expires
on
the
stipulated
expiration
date
or
if
the
fund
enters
into
a
closing
sale
transaction,
a
gain
or
loss
is
realized.
If
a
call
option
is
exercised,
the
cost
of
the
security
acquired
is
increased
by
the
premium
paid
for
the
call.
If
a
put
option
is
exercised,
a
gain
or
loss
is
realized
from
the
sale
of
the
underlying
security,
and
the
proceeds
from
such
sale
are
decreased
by
the
premium
originally
paid.
Purchased
options
are
non-income
producing
securities.
The
values
of
each
individual
purchased
option
outstanding
as
of
March
31,
2021,
for
each
Fund,
if
any,
are
disclosed
in
each
Fund’s
Schedule
of
Investments.
Written
Options
–
When
a
fund
writes
an
option,
an
amount
equal
to
the
premium
received
by
the
fund
is
recorded
as
a
liability
and
is
subsequently
adjusted
to
the
current
value
of
the
option
written.
Premiums
received
from
writing
options
that
expire
unexercised
are
treated
by
the
fund
on
the
expiration
date
as
realized
gain
from
written
options.
The
difference
between
the
premium
and
the
amount
paid
on
effecting
a
closing
purchase
transaction,
including
brokerage
commissions,
is
also
treated
as
a
realized
gain,
or
if
the
premium
is
less
than
the
amount
paid
for
the
closing
purchase
transaction,
as
a
realized
loss.
If
a
call
option
is
exercised,
the
premium
is
added
to
the
proceeds
from
the
sale
of
the
underlying
security
in
determining
whether
the
fund
has
realized
a
gain
or
loss.
If
a
put
option
is
exercised,
the
premium
reduces
the
cost
basis
of
the
securities
purchased
by
the
fund.
The
fund,
as
writer
of
an
option,
bears
the
market
risk
of
an
unfavorable
change
in
the
price
of
the
security
underlying
the
written
option.
Written
options
are
non-income
producing
securities.
The
values
of
each
individual
written
option
outstanding
as
of
March
31,
2021,
for
each
Fund,
if
any,
are
disclosed
in
each
Fund’s
Schedule
of
Call
and
Put
Options
Written.
Restricted
Securities
–
Each
Fund
may
invest
in
securities
that
are
subject
to
legal
or
contractual
restrictions
on
resale
(“restricted
securities”).
Restricted
securities
may
be
resold
in
transactions
that
are
exempt
from
registration
under
the
Federal
securities
laws
or
if
the
securities
are
registered
to
the
public.
The
sale
or
other
disposition
of
these
securities
may
involve
additional
expenses
and
the
prompt
sale
of
these
securities
at
an
acceptable
price
may
be
difficult.
Information
regarding
restricted
securities
held
by
each
Fund
is
included
in
their
Schedule
of
Investments,
if
applicable.
When-Issued
Transactions
–
Each
Fund
may
purchase
securities
on
a
forward
commitment
or
‘when-issued’
basis.
A
fund
records
a
when-issued
transaction
on
the
trade
date
and
will
segregate
with
the
custodian
qualifying
assets
that
have
a
value
sufficient
to
make
payment
for
the
securities
purchased.
Securities
purchased
on
a
when-issued
basis
are
marked-to-market
daily
and
the
fund
begins
earning
interest
on
the
settlement
date.
Losses
may
arise
due
to
changes
in
the
market
value
of
the
underlying
securities
or
if
the
counterparty
does
not
perform
under
the
contract.
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
semi-annually.
Distributions
to
shareholders
of
net
capital
gains
and
foreign
currency
gains,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
each
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
each
Fund.
Federal
Taxes
–
Each
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
their
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
their
net
investment
income
and
capital
gains,
if
any,
the
Funds
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
Each
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
Each
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
March
31,
2021,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-recognition
or
disclosure.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
39
Absolute
Funds
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
Absolute
Convertible
Arbitrage
Fund's
class-specific
expenses
are
charged
to
the
operations
of
that
class
of
shares.
Income
and
expenses
(other
than
expenses
attributable
to
a
specific
class)
and
realized
and
unrealized
gains
or
losses
on
investments
are
allocated
to
each
class
of
shares
based
on
the
class’
respective
net
assets
to
the
total
net
assets
of
the
Fund.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
each
Fund
enters
into
contracts
that
provide
general
indemnifications
by
each
Fund
to
the
counterparty
to
the
contract.
Each
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
each
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
Each
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
each
Fund’s
balance
sheet.
Fees
and
Expenses
Investment
Adviser
–
Absolute
Investment
Advisers
LLC
(the
“Adviser”)
is
the
investment
adviser
to
each
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee
from
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund
at
an
annual
rate
of
1.60%,
1.40%
and
1.20%,
respectively,
of
each
Fund’s
average
daily
net
assets.
Each
sub-advisory
fee,
calculated
as
a
percentage
of
each
Fund’s
average
daily
net
assets
managed
by
each
subadviser,
is
paid
by
the
Adviser.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
each
Fund’s
distributor
(the
“Distributor”).
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings,
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Absolute
Convertible
Arbitrage
Fund
has
adopted
a
Distribution
Plan
(the
“Plan”)
for
Investor
Shares
of
the
Fund
in
accordance
with
Rule
12b-1
of
the
Act.
Under
the
Plan,
Investor
Shares
are
subject
to
a
Rule
12b-1
fee
of
up
to
0.25%
of
the
Investor
Shares
average
daily
net
assets.
As
of
March
31,
2021,
Investor
Shares
were
not
operational
and
therefore
the
Absolute
Convertible
Arbitrage
Fund
is
not
currently
paying
12b-1
fees.
The
Absolute
Strategies
Fund
and
Absolute
Capital
Opportunities
Fund
do
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Absolute
Strategies
Fund
and
Absolute
Capital
Opportunities
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services
to
the
Absolute
Strategies
Fund
and
Absolute
Capital
Opportunities
Fund.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
each
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statements
of
Operations.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
each
Fund
pays
Apex
customary
fees
for
its
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
each
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
The
Trust
pays
each
independent
Trustee
an
annual
retainer
of
$31,000
for
services
to
the
Trust
($41,000
for
the
Chairman).
The
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-pocket
expenses
incurred
in
connection
with
his
or
her
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
The
amount
of
Trustees’
fees
attributable
to
each
Fund
is
disclosed
in
the
Statements
of
Operations.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
each
Fund.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
40
Absolute
Funds
Expense
Reimbursement
and
Fees
Waived
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
total
annual
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Strategies
Fund
to
1.99%,
through
August
1,
2022.
For
the
year
ended
March
31,
2021,
the
Adviser
did
not
waive
any
fees
or
reimburse
expenses
in
the
Absolute
Strategies
Fund
pursuant
to
this
agreement.
During
the
year,
Absolute
Strategies
Fund
invested
in
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund.
As
of
March
31,
2021,
Absolute
Strategies
Fund
owned
approximately
13.9%
and
4.2%
of
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund,
respectively.
The
Adviser
has
agreed
to
waive
fees
owed
to
it
by
the
Absolute
Strategies
Fund
in
an
amount
equal
to
the
fee
it
receives
from
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund
based
on
Absolute
Strategies
Fund’s
investment
in
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund.
For
the
year
ended
March
31,
2021,
the
Adviser
waived
fees
of
$461,575
related
to
these
affiliated
investments
and
these
waivers
are
not
subject
to
recoupment.
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
expenses
to
limit
total
annual
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Capital
Opportunities
Fund
to
1.75%
through
August
1,
2022.
In
addition,
the
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
expenses
to
limit
total
annual
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Capital
Opportunities
Fund
to
1.49%
when
the
Absolute
Capital
Opportunities
Fund
reaches
$125
million
in
assets
under
management.
The
Adviser
waived
fees
of
$7,404
for
Absolute
Capital
Opportunities
Fund
for
the
year
ended
March
31,
2021.
The
Adviser
has
also
contractually
agreed
to
waive
its
fee
and/or
reimburse
expenses
to
limit
total
annual
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Convertible
Arbitrage
Fund
to
1.40%
and
1.45%
of
the
Institutional
Shares
and
Investor
Shares,
respectively,
through
August
1,
2022.
In
addition,
the
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
expenses
to
limit
total
annual
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Convertible
Arbitrage
Fund
Institutional
Shares
to
1.20%
when
the
Absolute
Convertible
Arbitrage
Fund
Institutional
Shares
reaches
$250
million
in
assets
under
management.
Other
service
providers
have
voluntarily
agreed
to
waive
a
portion
their
fees.
The
Adviser
waived
fees
of
$423,179
and
other
service
providers
waived
fees
of
$61,750,
for
Absolute
Convertible
Arbitrage
Fund,
for
the
year
ended
March
31,
2021.
The
Funds
may
repay
the
Adviser
for
fees
waived
and
expenses
reimbursed
pursuant
to
the
expense
cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
total
annual
fund
operating
expenses
after
fee
waiver
and/or
expense
reimbursement
of
the
Funds
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
and
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
As
of
March
31,
2021,
$0,
$146,480
and
$696,871
for
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund,
respectively,
is
subject
to
recapture
by
the
Adviser.
Other
waivers
are
not
eligible
for
recoupment.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
year
ended
March
31,
2021
,
were
as
follows:
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
41
Absolute
Funds
Summary
of
Derivative
Activity
The
volume
of
open
derivative
positions
may
vary
on
a
daily
basis
as
each
Fund
transacts
derivative
contracts
in
order
to
achieve
the
exposure
desired
by
the
Adviser.
The
notional
value
of
activity
for
the
year
ended
March
31,
2021
,
for
any
derivative
type
during
the
year
is
as
follows:
Each
Fund’s
use
of
derivatives
for
the
year
ended
March
31,
2021
,
was
limited
to
options
and
futures
contracts.
Following
is
a
summary
of
the
effect
of
derivatives
on
the
Statements
of
Assets
and
Liabilities
as
of
March
31,
2021
:
Absolute
Strategies
Fund
Absolute
Capital
Opportunities
Fund
Absolute
Convertible
Arbitrage
Fund
Non-U.S.
Government
Obligations
Purchases
Sales
Absolute
Strategies
Fund
$
12,237,666
$
17,720,345
Absolute
Capital
Opportunities
Fund
66,824,282
60,772,053
Absolute
Convertible
Arbitrage
Fund
351,673,650
199,419,670
Absolute
Strategies
Fund
Absolute
Capital
Opportunities
Fund
Absolute
Convertible
Arbitrage
Fund
Futures
Contracts
$
2,996,818,045
$
–
$
(115,214,616)
Purchased
Options
24,275,107
42,343,592
–
Written
Options
(8,589,868)
(88,075,103)
–
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
$
435,200
Liability
derivatives:
Unrealized
depreciation
on
futures*
(149,113)
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
$
4,295,839
Liability
derivatives:
Call
options
written
$
(4,007,576)
Put
options
written
(802,098)
Total
liability
derivatives
$
(4,809,674)
Location:
Interest
Risk
Asset
derivatives:
Unrealized
appreciation
on
futures*
$
487,735
*
Balance
is
included
in
the
deposits
with
broker
for
futures
on
the
Statements
of
Assets
and
Liabilities.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
42
Absolute
Funds
Realized
and
unrealized
gains
and
losses
on
derivatives
contracts
for
the
year
ended
March
31,
2021
,
are
recorded
by
each
Fund
in
the
following
locations
on
the
Statements
of
Operations:
Absolute
Strategies
Fund
Absolute
Capital
Opportunities
Fund
Absolute
Convertible
Arbitrage
Fund
Location:
Equity
Contracts
Interest
Contracts
Total
Net
realized
gain
(loss)
on:
Investments
$
(4,659,748)
$
–
$
(4,659,748)
Written
options
2,360,476
–
2,360,476
Futures
(12,172,694)
47,969
(12,124,725)
Total
net
realized
gain
(loss)
$
(14,471,966)
$
47,969
$
(14,423,997)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
$
739,537
$
–
$
739,537
Written
options
(282,444)
–
(282,444)
Futures
285,083
31,144
316,227
Total
net
change
in
unrealized
appreciation
(depreciation)
$
742,176
$
31,144
$
773,320
Location:
Equity
Contracts
Net
realized
gain
(loss)
on:
Investments
$
(12,228,552)
Written
options
(10,739,464)
Total
net
realized
gain
(loss)
$
(22,968,016)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
$
3,390,105
Written
options
1,345,539
Total
net
change
in
unrealized
appreciation
(depreciation)
$
4,735,644
Location:
Interest
Contracts
Net
realized
gain
(loss)
on:
Futures
$
104,317
Total
net
realized
gain
(loss)
$
104,317
Net
change
in
unrealized
appreciation
(depreciation)
on:
Futures
$
487,735
Total
net
change
in
unrealized
appreciation
(depreciation)
$
487,735
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
43
Absolute
Funds
Asset
(Liability)
amounts
shown
in
the
table
below
represent
amounts
for
derivative
related
investments
at
March
31,
2021.
These
amounts
may
be
collateralized
by
cash
or
financial
instruments.
Federal
Income
Tax
As
of
March
31,
2021,
cost
for
federal
income
tax
and
net
unrealized
appreciation
consists
of:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
*Amount
represents
long-term
equalization.
As
of
March
31,
2021,
distributable
earnings
(accumulated
loss)
on
a
tax
basis
were
as
follows:
Gross
Asset
(Liability)
as
Presented
in
the
Statement
of
Assets
and
Liabilities
Derivatives
Available
for
Offset
Financial
Instruments
(Received)
Pledged*
Cash
Collateral
(Received)
Pledged*
Net
Amount
Absolute
Strategies
Fund
Assets:
Over-the-counter
derivatives**
$
435,200
$
–
$
–
$
–
$
435,200
Unrealized
depreciation
on
futures***
–
(149,113)
–
149,113
–
Absolute
Capital
Opportunities
Fund
Assets:
Over-the-counter
derivatives**
4,295,839
–
–
–
4,295,839
Liabilities:
Over-the-counter
derivatives**
(4,809,674)
–
4,809,674
–
–
Absolute
Convertible
Arbitrage
Fund
Assets:
Unrealized
appreciation
on
futures***
487,735
–
–
–
487,735
*
The
actual
financial
instruments
and
cash
collateral
(received)
pledged
may
be
in
excess
of
the
amounts
shown
in
the
table.
The
table
only
reflects
collateral
amounts
up
to
the
amount
of
the
financial
instrument
disclosed
on
the
Statements
of
Assets
and
Liabilities.
**
Over-the-counter
derivatives
may
consist
of
options.
The
amounts
disclosed
above
represent
the
exposure
to
one
or
more
counterparties.
For
further
detail
on
individual
derivative
contracts
and
the
corresponding
unrealized
appreciation
(depreciation),
see
the
Schedule
of
Call
and
Put
Options
Written.
***
Balance
is
included
in
the
deposits
with
broker
for
futures
on
the
Statements
of
Assets
and
Liabilities.
Tax
Cost
of
Investments
Gross
Unrealized
Appreciation
Gross
Unrealized
Depreciation
Net
Unrealized
Appreciation
Absolute
Strategies
Fund
$
60,247,772
$
7,141,966
$
(491,150)
$
6,650,816
Absolute
Capital
Opportunities
Fund
106,253,898
18,390,230
(1,007,655)
17,382,575
Absolute
Convertible
Arbitrage
Fund
228,966,719
54,070,507
(45,789,294)
8,281,213
Ordinary
Income
Long-Term
Capital
Gain
Total
Absolute
Strategies
Fund
2021
$
–
$
–
$
–
2020
69,093
–
69,093
Absolute
Capital
Opportunities
Fund
2021
12,275,193
222,287
12,497,480
2020
–
320,000*
320,000
Absolute
Convertible
Arbitrage
Fund
2021
158,181
7,223,939
7,382,120
2020
1,273,016
2,372,495
3,645,511
Undistributed
Ordinary
Income
Undistributed
Long-Term
Gain
Capital
and
Other
Losses
Unrealized
Appreciation/
(Depreciation)
Total
Absolute
Strategies
Fund
$
1,341,793
$
–
$
(40,051,357)
$
6,651,293
$
(32,058,271)
Absolute
Capital
Opportunities
Fund
–
–
(25,653,408)
17,382,762
(8,270,646)
Absolute
Convertible
Arbitrage
Fund
271,581
8,578,246
–
8,281,213
17,131,040
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
44
Absolute
Funds
The
difference
between
components
of
distributable
earnings
on
a
tax
basis
and
the
amounts
reflected
in
the
Statements
of
Assets
and
Liabilities
are
primarily
due
to
return
of
capital
on
equity
securities,
convertible
bond
deemed
dividends,
wash
sales,
futures,
constructive
sales,
convertible
bond
premium
amortization,
straddles
and
cover
loss
deferrals.
As
of
March
31,
2021,
the
Absolute
Strategies
Fund
and
the
Absolute
Capital
Opportunities
Fund
have
$5,889,627
and
$2,177,332,
respectively,
of
available
long-term
capital
loss
carryforwards
and
$34,161,730
and
$23,128,304,
respectively,
of
available
short-term
capital
loss
carryforwards
that
have
no
expiration
date.
For
tax
purposes,
the
current
deferred
late
year
ordinary
loss
was
$347,772
for
Absolute
Capital
Opportunities
Fund
(realized
during
the
period
January
1,
2021
through
March
31,
2021).
These
losses
will
be
recognized
for
tax
purposes
on
the
first
business
day
of
the
Fund’s
next
fiscal
year,
April
1,
2021.
On
the
Statements
of
Assets
and
Liabilities,
as
a
result
of
permanent
book
to
tax
differences,
certain
amounts
have
been
reclassified
for
the
year
ended
March
31,
2021.
The
following
reclassifications
were
the
result
of
book
to
tax
differences
resulting
from
net
operating
loss
and
organization
cost
amortization
and
have
no
impact
on
the
net
assets
of
each
Fund.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
through
the
date
these
financial
statements
were
issued
have
been
evaluated
for
potential
impact,
and
each
Fund
has
had
no
such
events.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
Distributable
Earnings
Paid-in-Capital
Absolute
Strategies
Fund
$
(92)
$
92
Absolute
Capital
Opportunities
Fund
664,692
(664,692)
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
45
Absolute
Funds
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
and
Absolute
Convertible
Arbitrage
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statements
of
assets
and
liabilities
of
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
and
Absolute
Convertible
Arbitrage
Fund,
each
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Funds”),
including
the
schedules
of
investments,
as
of
March
31,
2021,
and
the
related
statements
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended,
the
financial
highlights
as
noted
in
the
table
below,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Funds
as
of
March
31,
2021,
and
the
results
of
their
operations
for
the
year
then
ended,
the
changes
in
their
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
their
financial
highlights
for
each
of
the
periods
noted
in
the
table
below,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Funds'
management.
Our
responsibility
is
to
express
an
opinion
on
the
Funds’
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Funds
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Funds
are
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
their
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Funds’
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
March
31,
2021
by
correspondence
with
the
custodian,
brokers,
or
by
other
appropriate
auditing
procedures
where
replies
from
brokers
were
not
received.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
May
27,
2021
Financial
Highlights
Absolute
Strategies
Fund
For
each
of
the
years
in
the
five-year
period
ended
March
31,
2021
Absolute
Capital
Opportunities
Fund
For
each
of
the
years
in
the
five-year
period
ended
March
31,
2021
Absolute
Convertible
Arbitrage
Fund
For
each
of
the
years
in
the
three-year
period
ended
March
31,
2021
and
for
the
period
August
14,
2017
(commencement
of
operations)
to
March
31,
2018
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
46
Absolute
Funds
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
each
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
each
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(888)
992-2765
and
on
the
U.S.
Securities
and
Exchange
Commission’s
(the
“SEC”)
website
at
www.sec.gov.
Each
Fund’s
proxy
voting
record
for
the
most
recent
twelve-month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(888)
992-2765
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
Each
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Funds
,
you
incur
ongoing
costs,
including
management
fees,
distribution
(12b-1)
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Funds
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
October
1,
2020
through
March
31,
2021.
Actual
Expenses
–
The
first
line
of
the
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
in
this
line,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
first
line
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
the
period.
Hypothetical
Example
for
Comparison
Purposes
–
The
second
line
of
the
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
each
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
each
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
each
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only.
Therefore,
the
second
line
of
the
table
is
useful
in
comparing
ongoing
costs
only
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
47
Absolute
Funds
Federal
Tax
Status
of
Dividends
Declared
during
the
Fiscal
Year
For
federal
income
tax
purposes,
dividends
from
short-term
capital
gains
are
classified
as
ordinary
income.
The
Absolute
Capital
Opportunities
Fund
designates
3
.
35
%
of
its
income
dividend
distributed
as
qualifying
for
the
corporate
dividends-received
deduction
(DRD)
and
3
.
72
%
for
the
qualified
dividend
rate
(QDI)
as
defined
in
section
1(h)(11)
of
the
Code.
The
Absolute
Capital
Opportunities
Fund
also
designates
0
.
22
%
of
its
income
dividends
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII)
and
99.78%
as
short-term
capital
dividends
exempt
from
U.S.
tax
for
foreign
shareholders
as
(QSD).
The
Absolute
Convertible
Arbitrage
Fund
designates
88
.
00
%
of
its
income
dividends
as
QII.
Pursuant
to
Section
852(b)(3)
of
the
Internal
Revenue
Code,
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund
designated
$222,287
and
$7,223,939,
as
long-term
capital
gain
dividends,
respectively.
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
Each
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(888)
992-2765.
Beginning
Account
Value
October
1,
2020
Ending
Account
Value
March
31,
2021
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Absolute
Strategies
Fund
Actual
$
1,000.00
$
963.32
$
7.59
1.55%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,017.20
$
7.80
1.55%
Absolute
Capital
Opportunities
Fund
Actual
$
1,000.00
$
1,003.13
$
8.74
1.75%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,016.21
$
8.80
1.75%
Absolute
Convertible
Arbitrage
Fund
Institutional
Shares
Actual
$
1,000.00
$
1,043.19
$
6.37
1.25%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,018.70
$
6.29
1.25%
*
Expenses
are
equal
to
the
Fund’s
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
the
number
of
days
in
the
most
recent
fiscal
half-year
(182)
divided
by
365
to
reflect
the
half-year
period.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
48
Absolute
Funds
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-2008.
3
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
since
2017;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
3
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-2010.
3
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
3
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019.
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-
2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-
2019.
Todd
Proulx
Born:
1978
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-
2019.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
P.O.
BOX
588
PORTLAND,
MAINE
04112
(888)
992-2765
(TOLL
FREE)
(888)
99-ABSOLUTE
(TOLL
FREE)
INVESTMENT
ADVISER
Absolute
Investment
Advisers
LLC
4
North
Street,
Suite
2
Hingham,
Massachusetts
02043
www.absoluteadvisers.com
TRANSFER
AGENT
Apex
Fund
Services
P.O.
Box
588
Portland,
Maine
04112
(888)
992-2765
(Toll
Free)
(888)
99-ABSOLUTE
(Toll
Free)
www.theapexgroup.com
DISTRIBUTOR
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
Maine
04101
www.foreside.com
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Funds.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Funds’
risks,
objectives,
fees
and
expenses,
experience
of
its
managements
and
other
information.
212-ANR-0321
Beck,
Mack
&
Oliver
LLC
Annual
Report
March
31,
2021
Beck,
Mack
&
Oliver
Partners
Fund
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
1
Dear
Fellow
Shareholder:
The
Beck,
Mack
&
Oliver
Partners
Fund
(the
“Partners
Fund”)
returned
+81.97%
net
of
fees
and
expenses
for
the
fiscal
year
ended
March
31,
2021
(the
“Fiscal
Year”),
resulting
in
a
net
asset
value
of
$16.77.
By
comparison,
during
the
Fiscal
Year,
the
S&P
500
Index
(the
“S&P
500”),
which
is
the
Partners
Fund’s
principal
benchmark,
returned
+56.35%.
Performance
Update
March
of
2020
was
when
the
world
began
to
realize
that
the
specter
of
COVID-19
was
not
a
regional
disease
outbreak
but
a
devastating
global
pandemic.
During
that
month
the
S&P
500
generated
a
total
return
of
-12.35%,
which
was
its
worst
monthly
performance
since
October
2008,
when
the
failures
of
Lehman
Brothers,
AIG,
and
several
other
financial
institutions
cascaded
into
a
global
financial
crisis.
Hence,
total
returns
during
the
Fiscal
Year,
for
both
the
S&P
500
and
the
Partners
Fund,
are
measured
from
a
depressed,
crisis-induced
starting
point.
Perhaps
more
remarkable
than
the
sharp
decline
in
the
equity
market
experienced
during
March
of
last
year
was
the
powerful
snapback
over
the
next
several
months,
with
the
S&P
500
reaching
a
new
all-time
high
in
August
despite
the
ongoing
pandemic,
widespread
“lockdowns,”
high
unemployment,
and
an
economy
operating
deeply
below
its
potential.
Various
factors
contributed
to
this
impressive
recovery,
including
the
subsiding
of
fear
and
panic
as
we
learned
more
about
COVID-19
and
the
various
economic
stimulus
programs
approved
by
Congress,
but
the
most
consequential
may
have
been
the
extraordinary
intervention
by
the
Federal
Reserve,
which
reduced
interest
rates
essentially
to
zero
and
provided
liquidity
backstops
to
a
wide
range
of
markets.
As
depicted
in
the
table
below,
through
the
five
months
ended
August
31,
2020,
the
S&P
500
generated
a
total
return
of
+36.49%,
but
during
this
period
of
overall
equity
market
appreciation
there
was
a
pronounced
divergence
between
“value”
and
“growth,”
with
the
former
underperforming
the
latter
by
26.51%.
1
We
believe
that
much
of
this
performance
divergence
was
a
function
of
newly
created
market
liquidity
being
channeled
into
the
largest
and
most
liquid
equities,
the
ability
of
primarily
technology-oriented
companies
to
thrive
in
the
new
lockdown
environment
while
more
cyclically
sensitive
businesses
struggled,
the
impact
of
lower
interest
rates
on
the
valuation
of
long-duration
securities,
and
a
substantial
increase
in
retail
trading
activity.
During
this
time,
the
Partners
Fund
outperformed
value
but
underperformed
the
S&P
500.
The
relationship
between
value
and
growth
began
to
change
around
Labor
Day
and
accelerated
after
favorable
phase
3
clinical
data
for
two
COVID-19
vaccines
were
released
in
November.
The
potential
for
safe
and
efficacious
vaccines
to
accelerate
an
economic
reopening
and
a
more
general
“return
to
normal,”
coupled
with
a
valuation
divergence
between
different
segments
of
the
market
that
had
grown
to
extreme
levels,
catalyzed
a
shift
back
into
sectors,
such
as
financials
and
industrials,
that
had
been
so
adversely
affected
by
the
pandemic
and
its
consequences.
From
the
end
of
August
through
the
end
of
the
Fiscal
Year,
value
outperformed
growth
by
16.05%,
while
the
Partners
Fund
outperformed
the
S&P
500
by
24.98%.
While
the
shift
back
towards
value
provided
a
performance
tailwind
for
the
Partners
Fund
during
the
latter
half
of
the
Fiscal
Year,
its
large
outperformance
relative
to
the
S&P
500
was
also
the
result
of
specific
security
selection.
1
Total
return
comparisons
between
“value”
and
“growth”
are
based
on
the
S&P
500
Value
Index
and
the
S&P
500
Growth
Index,
respectively.
As
we
have
commented
in
prior
shareholder
letters,
while
we
do
not
believe
that
there
is
any
absolute
distinction
between
growth
and
value,
we
believe
the
investment
strategy
of
the
Partners
Fund—which
emphasizes
long-term
business
fundamentals
and
seeks
to
purchase
securities
at
a
discount
to
their
intrinsic
value—has
more
of
a
value
orientation.
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
2
(Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.)
Largest
Positive
&
Negative
Contributors
The
table
below
indicates
the
largest
positive
and
negative
contributors
to
investment
performance
as
well
as
the
total
returns
of
the
respective
securities
during
the
Fiscal
Year.
2
Largest
Positive
Contributors
A
significant
portion
of
the
share
price
appreciation
in
BlackBerry,
Ltd.
(“BlackBerry”)
during
the
Fiscal
Year
occurred
in
the
days
following
the
announcement
in
early
December
that
BlackBerry
and
Amazon
Web
Services
(“AWS”)
had
entered
into
a
multi-year
agreement
to
develop
and
market
an
“intelligent
vehicle”
platform,
which
would
be
called
BlackBerry
IVY.
IVY
will
leverage
BlackBerry’s
QNX
real-time
operating
system
and
create
a
cloud-based
ecosystem
in
which
data
will
be
captured,
analyzed,
and
integrated
with
vehicle
applications.
An
element
of
our
investment
thesis
in
BlackBerry
has
been
the
underappreciated
value
of
QNX,
which
is
already
in
more
than
175
million
vehicles
throughout
the
globe.
We
believe
the
imprimatur
from
AWS
is
an
important
validation
of
QNX.
BlackBerry’s
share
price
appreciated
substantially
in
January
on
unusually
elevated
trading
volume,
and
we
took
advantage
of
the
rally
by
selling
a
majority
of
the
position.
We
discussed
the
strong
performance
of
Advanced
Drainage
Systems
in
our
shareholder
letter
for
the
six-month
semi-
annual
period
ended
September
30,
2020
(the
“Semi-Annual
Letter”).
Our
investment
thesis
continues
to
play
out
nicely
and
we
have
modestly
reduced
the
position
size
in
response
to
further
share
price
appreciation.
2
Total
return
refers
to
the
security’s
total
return
during
the
Fiscal
Year.
Contribution
refers
to
the
total
return
of
the
Partners
Fund’s
ownership
within
the
Fiscal
Year
multiplied
by
the
percentage
of
the
Partners
Fund’s
net
assets
that
the
security
represents.
Total
Returns
3/31/20
–
8/31/20
8/31/20
–
3/31/21
3/31/20
–
3/31/21
Partners
Fund
+30.42%
+39.53%
+81.97%
S&P
500
Index
+36.49%
+14.55%
+56.35%
Partners
Fund
vs.
S&P
500
Index
-6.07%
+24.98%
+25.62%
S&P
500
Value
Index
(“Value”)
+21.48%
+23.76%
+50.35%
S&P
500
Growth
Index
(“Growth”)
+47.99%
+7.71%
+59.41%
Value
vs.
Growth
-26.51%
+16.05%
-9.06%
Largest
Positive
Contributors
Largest
Negative
Contributors
Position
Contribution
Total
Return
Position
Contribution
Total
Return
BlackBerry,
Ltd.
+6.50%
+104.12%
Grifols
-0.22%
-13.13%
Advanced
Drainage
Systems
+5.04%
+253.22%
AgroFresh
Solutions
0.00%
+1.01%
Matador
Resources
Co.
+4.72%
+846.64%
Fiserv
+0.28%
+25.32%
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
3
Matador
Resources
Co.
(“Matador”)
underwent
a
remarkable
recovery
during
the
Fiscal
Year.
After
declining
nearly
75%
in
March
of
2020,
Matador’s
share
price
ended
the
Fiscal
Year
at
nearly
10
times
its
level
at
the
beginning
of
the
Fiscal
Year.
The
company
benefited
from
a
recovering
oil
market
as
well
as
ongoing
production
growth,
a
continued
buildout
of
the
midstream
business,
and
improving
cash
flow
(including
the
initiation
of
a
dividend).
As
the
share
price
increased,
we
sold
some
stock
in
order
to
manage
the
position
size
and
the
overall
energy
sector
exposure
of
the
Partners
Fund.
Including
the
three
positive
contributors
noted
above,
eight
of
the
Partners
Fund’s
positions
more
than
doubled
during
the
Fiscal
Year.
3
Largest
Negative
Contributors
We
discussed
the
Grifols
investment
in
the
Semi-Annual
Letter.
While
plasma
collection
volumes
have
begun
to
recover
in-line
with
our
expectations,
the
stock
has
continued
to
trade
at
a
discounted
valuation.
We
still
believe
that
Grifols
is
an
excellent
business,
but
we
are
evaluating
whether
it
makes
sense
to
maintain
a
position
in
light
of
the
ongoing
share
price
underperformance,
dual-class
share
structure,
and
lack
of
catalysts.
We
look
forward
to
updating
you
in
our
next
shareholder
letter.
As
discussed
in
the
Semi-Annual
Letter,
the
AgroFresh
Solutions
warrants
expired
on
July
31,
2020.
As
discussed
in
more
detail
in
the
following
section,
we
initiated
a
new
position
in
Fiserv
late
in
the
Fiscal
Year,
hence
its
contribution
to
investment
performance
primarily
reflects
a
short
holding
period.
New
&
Exited
Positions
The
table
below
indicates
the
four
new
positions
that
were
initiated
and
the
one
position
that
was
exited
during
the
Fiscal
Year.
CAE
is
the
largest
outsourced
provider
of
flight
simulators
and
pilot
training
services
to
commercial
airlines
as
well
as
to
the
business
jet
and
defense
aviation
industries.
CAE
is
a
beneficiary
of
the
long-term
growth
in
revenue
passenger
miles
and
of
an
ongoing
shift
towards
greater
outsourcing
of
pilot
training.
We
were
impressed
with
the
company’s
resilience
during
the
severe
travel
slowdown
in
2020,
as
pilots
must
complete
regular
training,
regardless
of
the
number
of
hours
they
spend
in
the
air,
in
order
to
maintain
safety
certifications
with
the
Federal
Aviation
Administration.
We
expect
CAE
to
benefit
from
a
cyclical
rebound
in
travel
and
a
looming
pilot
shortage.
Subsequent
to
the
initiation
of
our
investment,
which
represented
a
3
I.e.,
these
positions
generated
a
total
return
of
at
least
100%
during
the
Fiscal
Year.
New
Positions
Exited
Positions
CAE
AgroFresh
Solutions
Fiserv
Hilton
Worldwide
Holdings
Mastercard
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
4
mid-teens
multiple
of
our
estimate
of
normalized
earnings,
the
company
announced
the
acquisition
of
the
military
training
business
of
L3Harris
Technologies,
which
we
expect
to
be
highly
accretive.
Toward
the
end
of
the
Fiscal
Year,
we
initiated
a
new
investment
in
Fiserv,
which
is
a
payments
and
financial
technology
company.
We
had
long
been
admirers
of
Frank
Bisignano,
who
worked
for
Jamie
Dimon
at
JPMorgan
for
many
years.
Bisignano
then
became
CEO
of
First
Data
Corp.,
which
is
a
merchant
acquiring
business.
He
successfully
turned
around
First
Data
Corp.,
which
was
then
acquired
by
Fiserv,
and
Bisignano
became
CEO
of
the
combined
company.
We
believe
that
Fiserv
has
a
strong
competitive
position
in
the
payments
industry,
which
is
benefiting
from
powerful
secular
tailwinds,
and
we
expect
the
company
to
generate
double-digit
earnings
growth
for
many
years.
Our
average
purchase
price
represents
a
high-teens
multiple
of
forward
earnings.
Please
see
the
Semi-Annual
Letter
for
a
discussion
of
the
investments
in
Hilton
Worldwide
Holdings
and
Mastercard
and
the
exit
from
AgroFresh
Solutions.
Other
Portfolio
Observations
As
of
the
end
of
the
Fiscal
Year,
the
Partners
Fund
held
28
equity
positions,
with
the
10
largest
positions
representing
53.5%
of
net
assets.
This
compares
to
25
equity
positions,
with
the
10
largest
positions
representing
62.2%
of
net
assets,
as
of
March
31,
2020.
As
of
the
end
of
the
Fiscal
Year,
the
largest
sector
exposures
were
financials
(30.0%
of
net
assets),
industrials
(16.6%),
and
healthcare
(16.3%),
and
cash
represented
approximately
1%
of
net
assets.
As
of
the
end
of
the
Fiscal
Year,
the
Partners
Fund
had
an
estimated
net
capital
loss
of
approximately
$12.9
million,
or
approximately
$4.55
per
share.
Outlook
&
Conclusion
The
continued
strength
of
the
S&P
500
suggests
that
the
equity
market
has
priced
in
an
ongoing
normalization
of
economic
activity
and
business
conditions.
The
Federal
Reserve
has
kept
short-term
policy
rates
near
zero,
but
long-term
bond
yields
have
risen
sharply
over
the
last
few
months,
as
the
bond
market
has
begun
to
price
in
the
risks
of
higher
inflation
and
of
eventually
higher
policy
rates.
The
Federal
Reserve
and
the
Biden
administration
have
argued
that
any
inflationary
trend
that
may
already
be
underway
will
prove
to
be
“transitory.”
The
prospective
returns
of
long-term
bonds
will
depend
a
lot
on
whether
that
turns
out
to
be
true.
There
are
several
inflationary
factors
at
play
right
now,
including
industry
supply
constraints,
strengthened
household
balance
sheets,
pent-up
consumer
demand,
worsening
fiscal
deficits,
a
tightening
labor
market,
and
rising
commodity
prices.
On
the
demand
side,
many
households
in
the
last
several
months
have
managed
to
pay
down
debt
and
accumulate
savings,
and
people
are
eager
to
reengage
in
activities
such
as
travel.
On
the
supply
side,
industry
bottlenecks
and
higher
commodity
prices
are
placing
pressure
on
goods
inflation,
while
a
tighter
labor
market
is
placing
pressure
on
inflation
in
services.
And
expectations
of
inflation,
once
they
get
going,
can
lead
to
the
thing
itself,
in
turn
reinforcing
those
expectations.
We
would
submit
that
the
risk
of
undesirably
faster
and/or
more
persistent
inflation,
over
the
next
several
months,
is
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
5
substantially
greater
than
its
opposite.
At
the
level
of
investment
research
and
portfolio
management,
that
underscores
for
us
the
importance
of
owning
companies
with
pricing
power.
Overall,
we
feel
good
about
the
direction
of
the
economy,
but
it
seems
that
this
positive
outlook
is
largely
already
reflected
in
equity
valuations,
with
the
S&P
500
trading
at
more
than
20x
estimates
of
next
year’s
earnings,
while
we
continue
to
observe
speculative
behavior
in
various
parts
of
the
market.
We
believe
that
owning
high-quality
equities
at
cheap
to
reasonable
valuations
remains
the
best
way
to
compound
wealth
over
time,
and
we
are
having
some
success
finding
new
investment
opportunities
that
meet
those
criteria.
Thank
you
for
your
continued
support.
Yours
sincerely,
Appendix:
Historical
Performance
Total
returns
for
the
Partners
Fund
and
the
S&P
500
Index
for
the
periods
ended
March
31,
2021,
were
as
follows:
(Performance
data
quoted
represent
past
performance
and
are
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
Shares
redeemed
or
exchanged
within
60
days
of
purchase
will
be
charged
a
2.00%
redemption
fee.
As
stated
in
the
current
prospectus,
the
Partners
Fund’s
annual
operating
expense
ratio
(gross)
is
1.80%.
However,
the
Partners
Fund’s
adviser
has
agreed
to
contractually
waive
its
fees
and/or
reimburse
expenses
to
limit
total
operating
expenses
to
1.00%
through
at
least
July
31,
2021;
otherwise
performance
shown
would
have
been
lower.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
Returns
greater
than
one
year
are
annualized.)
*Excludes
performance
prior
to
the
Partners
Fund’s
reorganization
from
a
limited
partnership.
Robert
C.
Beck
Richard
C.
Fitzgerald
Annualized
Returns
One
Year
Three
Years
Five
Years
Ten
Years
Since
12/01/2009
Reorg*
Partners
Fund
+81.97%
+13.59%
+13.79%
+8.23%
+9.69%
S&P
500
Index
+56.35%
+16.78%
+16.29%
+13.91%
+14.23%
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2021
6
IMPORTANT
RISKS
AND
DISCLOSURE:
There
is
no
assurance
that
the
Partners
Fund
will
achieve
its
investment
objective.
An
investment
in
the
Partners
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal
amount
invested.
The
risks
associated
with
the
Partners
Fund
include:
equity
and
convertible
securities
risk,
foreign
investments
risk,
management
risk,
fixed-income
securities
risk,
non-
investment
grade
securities
risk,
liquidity
risk,
non-diversification
risk,
high-yield
securities
risk
and
business
development
company
risk.
The
Partners
Fund
may
invest
in
small
and
mid-sized
capitalization
companies
meaning
that
these
companies
carry
greater
risk
than
is
customarily
associated
with
larger
companies
for
various
reasons
such
as
narrower
markets,
limited
financial
resources
and
less
liquid
stock.
The
S&P
500
Index
is
a
broad-based,
unmanaged
measurement
of
changes
in
stock
market
conditions
based
on
the
average
of
500
widely
held
common
stocks.
The
S&P
500
Growth
Index
is
a
subset
of
the
S&P
500
Index
that
measures
stocks
using
three
factors:
sales
growth,
the
ratio
of
earnings
change
to
price
and
momentum.
The
S&P
500
Value
Index
is
a
subset
of
the
S&P
500
Index
that
measures
value
stocks
using
three
factors:
the
ratios
of
book
value,
earnings
and
sales
to
price.
The
total
return
of
the
S&P
500
Index,
S&P
Growth
Index,
S&P
Value
Index
and
of
the
Partners
Fund
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Partners
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
S&P
500
Index,
S&P
Growth
Index
and
S&P
Value
Index
do
not
include
expenses.
The
Partners
Fund
is
professionally
managed
while
the
S&P
500
Index,
S&P
500
Growth
Index
and
S&P
Value
Index
are
unmanaged
and
are
not
available
for
investment.
It
is
not
possible
to
invest
directly
in
an
index.
This
letter
may
contain
discussions
about
certain
investments
both
held
and
not
held
in
the
portfolio.
All
current
and
future
holdings
are
subject
to
risk
and
to
change.
The
views
in
this
report
were
those
of
the
Partners
Fund
managers
as
of
March
31,
2021,
and
may
not
reflect
their
views
on
the
date
this
report
is
first
published
or
any
time
thereafter.
These
views
are
intended
to
assist
shareholders
in
understanding
their
investment
in
the
Partners
Fund
and
do
not
constitute
investment
advice.
On
December
1,
2009,
a
limited
partnership
managed
by
the
adviser
reorganized
into
the
Partners
Fund.
The
predecessor
limited
partnership
maintained
an
investment
objective
and
investment
policies
that
were,
in
all
material
respects,
equivalent
to
those
of
the
Partners
Fund.
The
Partners
Fund’s
performance
for
the
periods
before
December
1,
2009
is
that
of
the
limited
partnership
and
includes
the
expenses
of
the
limited
partnership,
which
were
lower
than
the
Partners
Fund’s
current
expenses,
except
for
2008
where
the
expenses
of
the
limited
partnership
were
higher.
The
performance
prior
to
December
1,
2009
is
based
on
calculations
that
are
different
from
the
standardized
method
of
calculations
by
the
SEC.
If
the
limited
partnership’s
performance
had
been
readjusted
to
reflect
the
estimated
expenses
of
the
Partners
Fund
for
its
first
fiscal
year,
the
performance
would
have
been
lower.
The
limited
partnership
was
not
registered
under
the
Investment
Company
Act
of
1940
(“1940
Act”)
and
was
not
subject
to
certain
investment
limitations,
diversification
requirements,
and
other
restrictions
imposed
by
the
1940
Act
and
the
Internal
Revenue
Code
of
1986,
which,
if
applicable,
may
have
adversely
affected
its
performance.
Fund
holdings
and
sector
allocations
are
subject
to
change
and
should
not
be
considered
a
recommendation
to
buy
or
sell
any
security.
For
a
complete
list
of
fund
holdings,
please
refer
to
the
Schedule
of
Investments
in
this
report.
Beck,
Mack
&
Oliver
Partners
Fund
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2021
7
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
Beck,
Mack
&
Oliver
Partners
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
S&P
500®
Index
(the
“S&P
500”),
over
the
past
10
fiscal
years.
The
S&P
500®
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
a
$10,000
Investment
Beck,
Mack
&
Oliver
Partners
Fund
vs.
S&P
500
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.80%.
However,
the
Fund’s
adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses
and
extraordinary
expenses)
to
1.00%,
through
at
least
July
31,
2021
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
During
the
period,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
Shares
redeemed
or
exchanged
within
60
days
of
purchase
will
be
charged
a
2.00%
redemption
fee.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2021
One
Year
Five
Year
Ten
Year
Beck,
Mack
&
Oliver
Partners
Fund
81.97%
13.79%
8.23%
S&P
500®
Index
56.35%
16.29%
13.91%
Beck,
Mack
&
Oliver
Partners
Fund
PORTFOLIO
PROFILE
(Unaudited)
March
31,
2021
8
PORTFOLIO
HOLDINGS
%
of
Total
Investments
Beck,
Mack
&
Oliver
Partners
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2021
9
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
March
31,
2021.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
The
Level
1
value
displayed
in
this
table
includes
Common
Stock.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
Shares
Security
Description
Value
Common
Stock
-
98.8%
Communication
Services
-
15.7%
1,300
Alphabet,
Inc.,
Class C
(a)
$
2,689,219
65,000
Discovery,
Inc.,
Class C
(a)
2,397,850
176,000
Lumen
Technologies,
Inc.
2,349,600
7,436,669
Consumer
Discretionary
-
1.5%
6,000
Hilton
Worldwide
Holdings,
Inc.
(a)
725,520
Energy
-
5.0%
70,000
Enterprise
Products
Partners
LP
1,541,400
35,000
Matador
Resources
Co.
820,750
2,362,150
Financials
-
30.0%
51,000
Apollo
Global
Management,
Inc.
2,397,510
6,000
Credit
Acceptance
Corp.
(a)
2,161,380
11,500
Enstar
Group,
Ltd.
(a)
2,837,395
16,000
JPMorgan
Chase
&
Co.
2,435,680
45,000
The
Blackstone
Group,
Inc.,
Class A
3,353,850
16,000
The
Charles
Schwab
Corp.
1,042,880
14,228,695
Health
Care
-
16.3%
6,000
Abbott
Laboratories
719,040
28,000
Grifols
SA,
ADR
484,120
9,000
Laboratory
Corp.
of
America
Holdings
(a)
2,295,270
65,000
RadNet,
Inc.
(a)
1,413,750
160,000
Teva
Pharmaceutical
Industries,
Ltd.,
ADR
(a)
1,846,400
3,500
Waters
Corp.
(a)
994,595
7,753,175
Industrials
-
16.6%
17,000
Advanced
Drainage
Systems,
Inc.
1,757,630
14,000
Armstrong
World
Industries,
Inc.
1,261,260
25,000
Ashtead
Group
PLC
1,515,000
65,000
CAE,
Inc.
(a)
1,851,850
19,000
Westinghouse
Air
Brake
Technologies
Corp.
1,504,040
7,889,780
Information
Technology
-
11.7%
72,600
BlackBerry,
Ltd.
(a)
612,018
10,000
Fiserv,
Inc.
(a)
1,190,400
3,500
Mastercard,
Inc.,
Class A
1,246,175
10,500
Microsoft
Corp.
2,475,585
5,524,178
Shares
Security
Description
Value
Materials
-
2.0%
1,300
The
Sherwin-Williams
Co.
$
959,413
Total
Common
Stock
(Cost
$28,868,830)
46,879,580
Investments,
at
value
-
98.8%
(Cost
$28,868,830)
$
46,879,580
Other
Assets
&
Liabilities,
Net
-
1.2%
584,040
Net
Assets
-
100.0%
$
47,463,620
ADR
American
Depositary
Receipt
LP
Limited
Partnership
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
46,879,580
Level
2
-
Other
Significant
Observable
Inputs
–
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
46,879,580
Beck,
Mack
&
Oliver
Partners
Fund
STATEMENT
OF
ASSETS
AND
LIABILITIES
March
31,
2021
10
See
Notes
to
Financial
Statements.
*
Shares
redeemed
or
exchanged
within
60
days
of
purchase
are
charged
a
2.00%
redemption
fee.
ASSETS
Investments,
at
value
(Cost
$28,868,830)
$
46,879,580
Cash
754,689
Receivables:
Fund
shares
sold
16,895
Dividends
and
interest
891
Prepaid
expenses
9,001
Total
Assets
47,661,056
LIABILITIES
Payables:
Investment
securities
purchased
107,741
Fund
shares
redeemed
23,860
Accrued
Liabilities:
Investment
adviser
fees
18,258
Fund
services
fees
15,018
Other
expenses
32,559
Total
Liabilities
197,436
NET
ASSETS
$
47,463,620
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
41,659,290
Distributable
earnings
5,804,330
NET
ASSETS
$
47,463,620
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
2,830,236
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE*
$
16.77
Beck,
Mack
&
Oliver
Partners
Fund
STATEMENT
OF
OPERATIONS
For
the
Year
Ended
March
31,
2021
11
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$1,504)
$
663,994
Interest
income
451
Total
Investment
Income
664,445
EXPENSES
Investment
adviser
fees
364,865
Fund
services
fees
180,291
Custodian
fees
10,106
Registration
fees
21,171
Professional
fees
40,398
Trustees'
fees
and
expenses
4,163
Other
expenses
59,262
Total
Expenses
680,256
Fees
waived
(315,392)
Net
Expenses
364,864
NET
INVESTMENT
INCOME
299,581
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
(loss)
on:
Investments
3,281,161
Foreign
currency
transactions
(139)
Net
realized
gain
3,281,022
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
18,045,226
NET
REALIZED
AND
UNREALIZED
GAIN
21,326,248
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
21,625,829
Beck,
Mack
&
Oliver
Partners
Fund
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
12
See
Notes
to
Financial
Statements.
For
the
Years
Ended
March
31,
2021
2020
OPERATIONS
Net
investment
income
$
299,581
$
375,942
Net
realized
gain
3,281,022
973,106
Net
change
in
unrealized
appreciation
(depreciation)
18,045,226
(6,886,696)
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
21,625,829
(5,537,648)
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(226,061)
(169,312)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
2,122,530
2,047,266
Reinvestment
of
distributions
207,017
155,007
Redemption
of
shares
(3,428,732)
(6,094,701)
Redemption
fees
1,706
1,211
Decrease
in
Net
Assets
from
Capital
Share
Transactions
(1,097,479)
(3,891,217)
Increase
(Decrease)
in
Net
Assets
20,302,289
(9,598,177)
NET
ASSETS
Beginning
of
Year
27,161,331
36,759,508
End
of
Year
$
47,463,620
$
27,161,331
SHARE
TRANSACTIONS
Sale
of
shares
146,695
161,470
Reinvestment
of
distributions
15,177
11,869
Redemption
of
shares
(261,730)
(514,573)
Decrease
in
Shares
(99,858)
(341,234)
Beck,
Mack
&
Oliver
Partners
Fund
FINANCIAL
HIGHLIGHTS
13
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
March
31,
2021
2020
2019
2018
2017
NET
ASSET
VALUE,
Beginning
of
Year
$
9.27
$
11.24
$
11.56
$
10.26
$
8.98
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.10
0.12
0.14
0.13
0.08
Net
realized
and
unrealized
gain
(loss)
7.48
(2.03)
(0.46)
1.18
1.30
Total
from
Investment
Operations
7.58
(1.91)
(0.32)
1.31
1.38
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.08)
(0.06)
–
(0.01)
(0.10)
Total
Distributions
to
Shareholders
(0.08)
(0.06)
–
(0.01)
(0.10)
REDEMPTION
FEES(a)
0.00(b)
0.00(b)
0.00(b)
0.00(b)
0.00(b)
NET
ASSET
VALUE,
End
of
Year
$
16.77
$
9.27
$
11.24
$
11.56
$
10.26
TOTAL
RETURN
81.97%
(17.17)%
(2.77)%
12.77%
15.45%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
47,464
$
27,161
$
36,760
$
38,368
$
37,769
Ratios
to
Average
Net
Assets:
Net
investment
income
0.82%
1.01%
1.19%
1.17%
0.80%
Net
expenses
1.00%
1.00%
1.00%
1.00%
1.00%
Gross
expenses
(c)
1.86%
1.80%
1.74%
1.76%
1.81%
PORTFOLIO
TURNOVER
RATE
18%
10%
17%
19%
26%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
(b)
Less
than
$0.01
per
share.
(c)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
14
Organization
The
Beck,
Mack
&
Oliver
Partners
Fund
(the
“Fund”)
is
a
non-diversified
portfolio
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
the
Fund’s
shares
of
beneficial
interest
without
par
value.
The
Fund
commenced
operations
on
December
1,
2009,
after
it
acquired
the
net
assets
of
BMO
Partners
Fund,
L.P.
(the
“Partnership”),
in
exchange
for
Fund
shares.
The
Partnership
commenced
operations
in
1991.
The
Fund
seeks
long-term
capital
appreciation
with
the
preservation
of
capital.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
4,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
15
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
NAV
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
March
31,
2021,
for
the
Fund’s
investments
is
included
at
the
end
of
the
Fund’s
schedule
of
investments.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Foreign
dividend
income
is
recorded
on
the
ex-
dividend
date
or
as
soon
as
possible
after
determining
the
existence
of
a
dividend
declaration
after
exercising
reasonable
due
diligence.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Distributions
to
Shareholders
–
The
Fund
declares
any
dividends
from
net
investment
income
and
pays
them
annually.
Any
net
capital
gains
and
net
foreign
currency
gains
realized
by
the
Fund
are
distributed
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
Federal
Taxes
–
The
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income
and
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
16
capital
gains,
if
any,
the
Fund
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
The
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
The
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
March
31,
2021,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-recognition
or
disclosure.
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
Redemption
Fees
–
A
shareholder
who
redeems
or
exchanges
shares
within
60
days
of
purchase
will
incur
a
redemption
fee
of
2.00%
of
the
current
NAV
of
shares
redeemed
or
exchanged,
subject
to
certain
limitations.
The
fee
is
charged
for
the
benefit
of
the
remaining
shareholders
and
will
be
paid
to
the
Fund
to
help
offset
transaction
costs.
The
fee
is
accounted
for
as
an
addition
to
paid-in
capital.
The
Fund
reserves
the
right
to
modify
the
terms
of
or
terminate
the
fee
at
any
time.
There
are
limited
exceptions
to
the
imposition
of
the
redemption
fee.
Redemption
fees
incurred
for
the
Fund,
if
any,
are
reflected
on
the
Statements
of
Changes
in
Net
Assets.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
the
Fund
enters
into
contracts
that
provide
general
indemnifications
by
the
Fund
to
the
counterparty
to
the
contract.
The
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
the
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
The
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
the
Fund’s
balance
sheet.
Cash
–
Concentration
in
Uninsured
Account
For
cash
management
purposes,
the
Fund
may
concentrate
cash
with
the
Fund’s
custodian.
This
typically
results
in
cash
balances
exceeding
the
Federal
Deposit
Insurance
Corporation
(“FDIC”)
insurance
limits.
As
of
March
31,
2021,
the
Fund
had
$504,689
at
MUFG
Union
Bank,
N.A.
that
exceeded
the
FDIC
insurance
limit.
Fees
and
Expenses
Investment
Adviser
–
Beck,
Mack
&
Oliver
LLC
(the
“Adviser”)
is
the
investment
adviser
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee,
payable
monthly,
from
the
Fund
at
an
annual
rate
of
1.00%
of
the
Fund’s
average
daily
net
assets.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
the
Fund’s
distributor
(the
“Distributor”).
The
Fund
does
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings,
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statement
of
Operations.
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
17
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
the
Fund
pays
Apex
customary
fees
for
its
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
the
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
The
Trust
pays
each
independent
Trustee
an
annual
retainer
of
$31,000
for
services
to
the
Trust
($41,000
for
the
Chairman).
The
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-
pocket
expenses
incurred
in
connection
with
his
or
her
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
The
amount
of
Trustees’
fees
attributable
to
the
Fund
is
disclosed
in
the
Statement
of
Operations.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
the
Fund.
Expense
Reimbursement
and
Fees
Waived
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses
and
extraordinary
expenses
)
to
1.00%
,
through
at
least
July
31,
2021.
During
the
year
ended
March
31,
2021
,
fees
waived
were
$
315
,
392
.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments,
during
the
year
ended
March
31,
2021
were
$6,470,611
and
$7,988,313
respectively.
Federal
Income
Tax
As
of
March
31,
2021,
the
cost
of
investments
for
federal
income
tax
purposes
is
$28,184,699 and
the
components
of
net
unrealized appreciation were
as
follows:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
Gross
Unrealized
Appreciation
$
20,632,331
Gross
Unrealized
Depreciation
(1,937,450)
Net
Unrealized
Appreciation
$
18,694,881
Ordinary
Income
2021
$
226,061
2020
$
169,312
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
18
As
of
March
31,
2021
,
distributable
earnings
(accumulated
loss)
on
a
tax
basis
were
as
follows:
The
difference
between
components
of
distributable
earnings
on
a
tax
basis
and
the
amounts
reflected
in
the
Statement
of
Assets
and
Liabilities
are
primarily
due
to
partnerships,
wash
sales
and
return
of
capital
on
equity
securities.
As
of
March
31,
2021,
the
Fund
had
$4,9
71
,
970
of
available
short-term
capital
loss
carryforwards
and
$
7
,
9
18
,
581
of
available
long-term
capital
loss
carryforwards
that
have
no
expiration
date.
On
the
Statement
of
Assets
and
Liabilities,
as
a
result
of
permanent
book
to
tax
differences,
certain
amounts
have
been
reclassified
for
the
year
ended
March
31,
2021
.
The
following
reclassification
was
the
result
of
investments
in
partnerships
and
net
operating
loss
and
has
no
impact
on
the
net
assets
of
the
Fund.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
through
the
date
these
financial
statements
were
issued
have
been
evaluated
for
potential
impact,
and
the
Fund
has
had
no
such
events.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
Capital
and
Other
Losses
$
(12,890,551)
Net
Unrealized
Appreciation
18,694,881
Total
$
5,804,330
Distributable
Earnings
$
10,360
Paid-in-Capital
(10,360)
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
19
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Beck,
Mack
&
Oliver
Partners
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
Beck,
Mack
&
Oliver
Partners
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedule
of
investments,
as
of
March
31,
2021,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
March
31,
2021,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
March
31,
2021
by
correspondence
with
the
custodian,
brokers,
or
by
other
appropriate
auditing
procedures
where
replies
from
brokers
were
not
received.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
May
25,
2021
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
20
Investment
Advisory
Agreement
Approval
At
the
March
12,
2021
Board
meeting,
the
Board,
including
the
Independent
Trustees,
considered
the
approval
of
the
continuance
of
the
investment
advisory
agreement
between
the
Adviser
and
the
Trust
pertaining
to
the
Fund
(the
“Advisory
Agreement”).
In
preparation
for
its
deliberations,
the
Board
requested
and
reviewed
written
responses
from
the
Adviser
to
a
due
diligence
questionnaire
circulated
on
the
Board’s
behalf
concerning
the
services
provided
by
the
Adviser.
The
Board
also
discussed
the
materials
with
Fund
counsel
and,
as
necessary,
with
the
Trust’s
administrator.
During
its
deliberations,
the
Board
received
an
oral
presentation
from
the
Adviser,
and
was
advised
by
Trustee
counsel.
At
the
meeting,
the
Board
reviewed,
among
other
matters:
(1)
the
nature,
extent
and
quality
of
the
services
provided
to
the
Fund
by
the
Adviser,
including
information
on
the
investment
performance
of
the
Fund
and
Adviser;
(2)
the
costs
of
the
services
provided
and
profitability
to
the
Adviser
of
its
relationship
with
the
Fund;
(3)
the
advisory
fee
and
total
expense
ratio
of
the
Fund
compared
to
a
relevant
peer
group
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
the
Fund
grows
and
whether
the
advisory
fees
enable
the
Fund’s
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Fund.
In
addition,
the
Board
recognized
that
the
evaluation
process
with
respect
to
the
Adviser
was
an
ongoing
one
and,
in
this
regard,
the
Board
considered
information
provided
by
the
Adviser
at
regularly
scheduled
meetings
during
the
past
year.
Nature,
Extent
and
Quality
of
Services
Based
on
written
materials
received,
a
presentation
from
senior
representatives
of
the
Adviser,
and
a
discussion
with
the
Adviser
regarding
the
Adviser’s
personnel,
operations
and
financial
condition,
the
Board
considered
the
quality
of
services
provided
by
the
Adviser
under
the
Advisory
Agreement.
In
this
regard,
the
Board
considered
information
regarding
the
experience,
qualifications
and
professional
background
of
the
portfolio
managers
at
the
Adviser
with
principal
responsibility
for
the
Fund's
investments
as
well
as
the
investment
philosophy
and
decision-making
processes
of
the
Adviser
and
the
capability
and
integrity
of
the
Adviser’s
senior
management
and
staff.
The
Board
considered
also
the
adequacy
of
the
Adviser’s
resources.
The
Board
noted
the
Adviser’s
representations
that
the
firm
is
in
stable
financial
condition,
that
the
firm
is
able
to
meet
its
expense
reimbursement
obligations
to
the
Fund,
and
that
the
Adviser
has
the
operational
capability
and
the
necessary
staffing
and
experience
to
continue
providing
high-
quality
investment
advisory
services
to
the
Fund.
Based
on
the
presentation
and
the
materials
provided
by
the
Adviser
in
connection
with
the
Board’s
consideration
of
the
renewal
of
the
Advisory
Agreement,
among
other
relevant
factors,
the
Board
concluded
that,
overall,
it
was
satisfied
with
the
nature,
extent,
and
quality
of
services
provided
to
the
Fund
under
the
Advisory
Agreement.
Performance
In
connection
with
a
presentation
by
the
Adviser
regarding
its
approach
to
managing
the
Fund,
the
Board
reviewed
the
performance
of
the
Fund
compared
to
its
primary
benchmark
index.
The
Board
observed
that
the
Fund
underperformed
the
S&P
500
Index,
the
Fund’s
primary
benchmark
index,
for
the
one-,
three-,
five-,
and
10-year
periods
ended
December
31,
2020,
and
for
the
period
since
the
Fund’s
inception
on
April
19,
1991.
The
Board
also
considered
the
Fund’s
performance
relative
to
an
independent
peer
group
identified
by
Broadridge
Financial
Solutions,
Inc.
(“Broadridge”)
as
having
characteristics
similar
to
those
of
the
Fund.
The
Board
observed
that,
based
on
the
information
provided
by
Broadridge,
the
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
21
Fund
outperformed
the
median
of
its
Broadridge
Peers
for
the
one-
and
three-year
periods
ended
December
31,
2020,
and
underperformed
the
median
of
its
Broadridge
Peers
for
the
five-year
period
ended
December
31,
2020.
The
Board
noted
the
Adviser’s
representation
that
the
Fund’s
underperformance
over
the
one-year
period
relative
to
the
benchmark
could
be
attributed
to
the
Fund’s
“value”
orientation
during
a
period
in
which
“growth”
stocks
significantly
outperformed
“value”
stocks.
The
Board
noted
the
Adviser’s
representation
that
the
Fund’s
underperformance
over
the
longer
term
could
be
attributed,
at
least
in
part,
to
underperformance
during
the
fourth
quarter
of
calendar
year
2018,
which
had
a
disproportionate
effect
on
the
Fund’s
longer-term
performance.
The
Board
further
noted
the
Adviser’s
representation
that
the
Fund’s
relative
underperformance
over
the
last
five-
and
ten-year
periods
was
partially
a
function
of
the
Fund’s
performance
during
2014
and
2015,
when
the
Fund
had
a
different
primary
portfolio
manager,
as
well
as
the
underperformance
during
the
fourth
quarter
of
2018.
In
addition,
the
Board
observed
that
the
Fund’s
relative
performance
has
been
negatively
affected
by
the
outperformance
of
“growth”
over
“value”
over
the
last
ten
years.
The
Board
noted
the
Adviser’s
representation
that
the
Fund’s
overall
performance
had
improved
since
2016,
when
the
current
primary
portfolio
manager
assumed
responsibility
for
the
day-to-day
management
of
the
Fund,
and
that
the
Fund
was
outperforming
the
benchmark
by
approximately
16%
year-to-date,
as
of
the
date
of
the
Board
meeting.
At
the
request
of
the
Adviser,
the
Board
also
considered
the
Fund’s
performance
relative
to
an
additional
group
of
funds
identified
by
the
Adviser
as
having
investment
strategies
and
portfolio
compositions
more
comparable
to
those
of
the
Fund
than
the
Broadridge
peers
(“Comparable
Fund
Peers”).
In
that
regard,
the
Board
observed
that,
although
the
Fund
generally
underperformed
the
average
of
the
Comparable
Fund
Peers
over
the
one-,
three-,
and
five-year
periods
ended
December
31,
2020,
the
Fund
was
significantly
outperforming
the
Comparable
Fund
Peers
year-to-date
in
2021.
In
consideration
of
the
Adviser’s
investment
style
and
the
foregoing
performance
information,
among
other
considerations,
the
Board
determined
that
the
Fund
and
its
shareholders
could
benefit
from
the
Adviser’s
continued
management
of
the
Fund.
Compensation
The
Board
evaluated
the
Adviser’s
compensation
for
providing
advisory
services
to
the
Fund
and
analyzed
comparative
information
on
actual
advisory
fee
rates
and
actual
total
expenses
of
the
Fund’s
Broadridge
peer
group.
The
Board
observed
that
the
Adviser’s
actual
advisory
fee
rate
and
actual
total
expense
ratio
were
each
less
than
the
median
of
the
Broadridge
peer
group.
The
Board
also
noted
the
Adviser’s
representation
that
the
advisory
fee
rate
charged
to
the
Partners
Fund
was
consistent
with
the
fee
charged
by
the
Adviser
to
its
separately
managed
accounts
with
comparable
investment
strategies
and
levels
of
assets
under
management.
Based
on
the
foregoing,
among
other
relevant
factors,
the
Board
concluded
that
the
Adviser’s
advisory
fee
rate
charged
to
the
Fund
was
reasonable.
Costs
of
Services
and
Profitability
The
Board
considered
information
provided
by
the
Adviser
regarding
its
costs
of
services
and
its
profitability
with
respect
to
the
Fund.
In
this
regard,
the
Board
considered
the
Adviser’s
resources
devoted
to
the
Fund,
as
well
as
the
Adviser’s
discussion
of
the
aggregate
costs
and
profitability
of
its
mutual
fund
activities.
The
Board
considered
also
the
Adviser’s
representation
that
the
Adviser
does
not
conduct
a
formal,
comprehensive
cost
allocation
with
respect
to
its
mutual
fund
activities
and
separately
managed
accounts
but
that
the
Adviser
believed
that
the
Fund
was
comparatively
less
profitable
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
22
than
the
Adviser’s
separately
managed
accounts
as
a
result
of
the
low
level
of
the
Fund’s
assets,
costs
incurred
in
connection
with
regulatory
compliance
applicable
to
registered
investment
companies,
and
the
expense
cap
currently
in
place.
Based
on
these
and
other
applicable
considerations,
the
Board
concluded
that
the
Adviser’s
profits
attributable
to
the
management
of
the
Fund
were
reasonable.
Economies
of
Scale
The
Board
considered
whether
the
Fund
would
benefit
from
any
economies
of
scale.
In
this
regard,
the
Board
considered
the
Fund’s
fee
structure,
asset
size,
and
net
expense
ratio.
The
Board
noted
the
Adviser’s
representation
that
the
Fund
could
potentially
benefit
from
economies
of
scale
at
higher
asset
levels
but
that,
in
light
of
the
Fund’s
current
asset
levels
and
because
the
Adviser
was
already
waiving
a
portion
of
its
contractual
advisory
fee
in
order
to
keep
the
Fund’s
expenses
at
or
below
the
agreed-upon
expense
cap,
the
Adviser
was
not
proposing
breakpoints
in
the
advisory
fee
at
this
time.
Based
on
the
foregoing
information
and
other
applicable
considerations,
the
Board
concluded
that
the
asset
level
of
the
Fund
was
not
consistent
with
the
existence
of
economies
of
scale
and
that
economies
of
scale
were
not
a
material
factor
to
consider
in
renewing
the
Advisory
Agreement.
Other
Benefits
The
Board
noted
the
Adviser’s
representation
that,
other
than
its
contractual
advisory
fees
and
the
soft
dollar
benefits
accrued
from
Fund
brokerage
commissions,
the
Adviser
does
not
benefit
in
a
material
way
from
its
relationship
with
the
Fund.
Based
on
the
foregoing
representation,
the
Board
concluded
that
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Fund
were
not
a
material
factor
to
consider
in
approving
the
continuation
of
the
Advisory
Agreement.
Conclusion
The
Board
did
not
identify
any
single
factor
as
being
of
paramount
importance,
and
different
Trustees
may
have
given
different
weight
to
different
factors.
The
Board
reviewed
a
memorandum
from
Fund
Counsel
discussing
the
legal
standards
applicable
to
its
consideration
of
the
Advisory
Agreement.
Based
on
its
review,
including
consideration
of
each
of
the
factors
referenced
above,
the
Board
determined,
in
the
exercise
of
its
reasonable
business
judgment,
that
the
contractual
fee
under
the
Advisory
Agreement
was
fair
and
reasonable
in
light
of
the
services
performed
or
to
be
performed,
expenses
incurred
or
to
be
incurred
and
such
other
matters
as
the
Board
considered
relevant.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(800)
943-6786
and
on
the
U.S.
Securities
and
Exchange
Commission's
("SEC")
website
at
www.sec.gov.
The
Fund’s
proxy
voting
record
for
the
most
recent
twelve-
month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(800)
943-6786
and
on
the
SEC’s
website
at
www.sec.gov.
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
23
Availability
of
Quarterly
Portfolio
Schedules
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund,
you
incur
two
types
of
costs:
(1)
transaction
costs,
including
redemption
fees
and
exchange
fees,
and
(2)
ongoing
costs,
including
management
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund,
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
October
1,
2020
through
March
31,
2021.
Actual
Expenses
–
The
first
line
of
the
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
in
this
line,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
first
line
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
the
period.
Hypothetical
Example
for
Comparison
Purposes
–
The
second
line
of
the
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
the
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only
and
do
not
reflect
any
transactional
costs,
such
as
redemption
fees
and
exchange
fees.
Therefore,
the
second
line
of
the
table
is
useful
in
comparing
ongoing
costs
only
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
Beginning
Account
Value
October
1,
2020
Ending
Account
Value
March
31,
2021
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,461.79
$
6.14
1.00%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,019.95
$
5.04
1.00%
*
Expenses
are
equal
to
the
Fund’s
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
the
number
of
days
in
the
most
recent
fiscal
half-year
(182)
divided
by
365
to
reflect
the
half-year
period.
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
24
Federal
Tax
Status
of
Dividends
Declared
during
the
Fiscal
Year
The
Fund
designates
100.00
%
of
its
income
dividend
distributed
as
qualifying
for
the
corporate
dividends-received
deduction
(DRD)
and
100.00
%
for
the
qualified
dividend
rate
(QDI)
as
defined
in
Section
1(h)(11)
of
the
Internal
Revenue
Code.
The
Fund
also
designates
0.55
%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(800)
943-6786.
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-
2008.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
since
2017;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-
Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-
2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
25
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019.
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-
Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-
2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Todd
Proulx
Born:
1978
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
FOR
MORE
INFORMATION
Investment
Adviser
Beck,
Mack
&
Oliver
LLC
565
Fifth
Ave,
19th
Floor
New
York,
NY
10017
www.beckmack.com
Transfer
Agent
Apex
Fund
Services,
LLC
P.O.
Box
588
Portland,
ME
04112
www.theapexgroup.com
Distributor
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
ME
04101
www.foreside.com
Beck,
Mack
&
Oliver
Partners
Fund
P.O.
Box
588
Portland,
ME
04112
(800)
943-6786
www.beckmack.com
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
risks,
objectives,
fees
and
expenses,
experience
of
its
management,
and
other
information.
229-ANR-0321
Payson
Total
Return
Fund
ANNUAL
REPORT
//
March
31,
2021
Payson
Total
Return
Fund
Table
of
Contents
March
31,
2021
IMPORTANT
INFORMATION
An
investment
in
the
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal.
Other
Fund
risks
include
equity
risk,
convertible
securities
risk,
debt
securities
risk,
technology
sector
risk,
exchange-traded
funds
risk,
interest
rate
risk,
credit
risk,
inflation
indexed
security
risk,
U.S.
government
securities
risk,
value
investment
risk,
mortgage-related
and
other
asset-backed
securities
risk,
and
foreign
investments
risk.
Foreign
investing
involves
certain
risks
and
increased
volatility
not
associated
with
investing
solely
in
the
U.S.,
including
currency
fluctuations,
economic
or
financial
instability,
lack
of
timely
or
reliable
financial
information
or
unfavorable
political
or
legal
developments.
Mortgage-related
and
other
asset-backed
securities
risks
include
extension
risk
and
prepayment
risk.
In
addition,
the
Fund
invests
in
midcap
companies,
which
pose
greater
risks
than
those
associated
with
larger,
more
established
companies.
There
is
no
assurance
that
the
Fund
will
achieve
its
investment
objective.
A
Message
to
Our
Shareholders
(Unaudited)
1
Performance
Chart
and
Analysis
(Unaudited)
3
Schedule
of
Investments
4
Statement
of
Assets
and
Liabilities
6
Statement
of
Operations
7
Statements
of
Changes
in
Net
Assets
8
Financial
Highlights
9
Notes
to
Financial
Statements
10
Report
of
Independent
Registered
Public
Accounting
Firm
15
Additional
Information
(Unaudited)
17
Payson
Total
Return
Fund
A
Message
to
Our
Shareholders
(Unaudited)
March
31,
2021
1
Dear
Payson
Total
Return
Fund
Shareholder,
Last
year’s
Payson
Total
Return
Fund’s
(the
“Fund”)
Annual
Letter
to
Shareholders
ended
on
an
optimistic
note
even
though
investors
were
only
a
couple
of
weeks
out
from
the
market
setting
a
breathtaking
low
during
the
Covid-19
economic
fallout.
Although
the
managers
of
the
Fund
embrace
market
volatility
and
all
the
opportunities
it
typically
provides,
the
economic
collapse
from
the
pandemic
and
the
market’s
subsequent
nosedive
were
enough
to
shake
the
nerves
of
any
investor
regardless
of
their
experience.
As
suggested
in
last
year’s
letter
however,
global
central
banks
responded
aggressively
in
concert
with
international
government
stimulus
programs,
and
this
unbridled
liquidity
pumped
into
world
economies
has
unleashed
an
equally
stunning
rebound
in
economic
activity
and
in
turn
a
spectacular
recovery
in
stock
prices.
The
Payson
Total
Return
Fund
more
than
participated
in
this
recovery
posting
a
one
year
ending
March
31,
2021
total
return
of
61.37%.
These
results
compare
favorably
to
the
S&P
500®
Index
(the
“Index”)
results
for
the
same
period
which
totaled
56.35%.
Today’s
investing
environment
is
starkly
different
from
the
opportunities
of
a
year
ago.
Although
the
pandemic
remains
a
global
phenomenon
and
continues
to
weigh
on
the
recovery,
the
successful
rollout
of
the
vaccination
program
will
provide
further
traction
to
a
hopeful
return
to
a
sense
of
normalcy.
With
that
rebound
however
may
come
new
risks
and
headwinds
to
the
market.
US
Interest
rates
dropped
to
historic
lows
this
past
fall
but
have
begun
to
churn
higher
as
supply
chain
bottlenecks
and
rising
commodity
prices
raise
inflation
concerns.
In
addition,
the
new
Biden
administration
is
taking
advantage
of
its
current
political
leverage
to
expand
federal
programs
which
they
plan
to
fund
through
higher
taxes.
Higher
Inflation,
interest
rates
and
taxes
are
typically
not
well
received
by
a
market,
particularly
by
one
that
trades
at
above
average
valuations.
Investors
have
begun
to
respond
to
these
developments,
rotating
out
of
sectors
that
led
the
market
during
the
pandemic
such
as
technology
and
health
care
and
into
more
reasonably
priced
stocks
of
companies
more
leveraged
to
an
expanding
economy.
The
managers
of
the
Fund
continue
to
focus
on
the
underlying
characteristics
of
the
Fund
portfolio
seeking
companies
that
generate
strong
cash
flows
while
sustaining
above
average
profit
margins.
Importantly,
the
managers
also
pay
strict
attention
to
a
variety
of
valuation
measures
when
selecting
stocks
and
making
portfolio
adjustments.
For
some
time,
this
commitment
to
maintaining
strong
relative
characteristics
has
led
to
a
comparatively
heavy
concentration
in
technology
stocks.
This
commitment
combined
with
the
stocks
the
Fund
invested
within
the
information
technology
sector
were
the
biggest
contributor
to
the
Fund’s
relative
performance
in
the
past
fiscal
year.
Although
this
sector
remains
the
largest
in
the
Fund,
as
it
does
with
the
Index,
valuations
have
become
so
stretched
in
this
sector
the
managers
have
begun
to
find
superior
valuations
in
other
areas
and
have
selectively
trimmed
certain
holdings.
The
top
five
contributors
to
the
Fund’s
performance
this
past
year
based
on
their
weights
in
the
portfolio
relative
to
the
Index
were
HP
Inc.,
Lam
Research
Corp.,
Thor
Industries
Inc.,
Discover
Financial
Services,
and
WEX
Inc.
The
five
stocks
that
detracted
from
the
Fund’s
return
based
on
their
weights
in
the
portfolio
relative
to
the
Index
include
Intel
Corp.,
Leidos
Holdings,
Inc.,
Amgen
Inc.,
Johnson
&
Johnson,
and
Merck
&
Co.,
Inc.
Payson
Total
Return
Fund
A
Message
to
Our
Shareholders
(Unaudited)
March
31,
2021
2
Last
year
was
a
year
of
extraordinary
and
unprecedented
developments
and
responses
on
a
global
scale.
The
coming
year
appears
to
be
one
of
a
return
to
stability
and,
to
some
degree,
normalcy
although
it’s
unlikely
the
world
will
return
to
its
pre
pandemic
state.
New
challenges
and
headwinds
will
invariably
surface
and
the
managers
will
respond
accordingly
while
maintaining
the
disciplined
process
that
has
proven
to
provide
attractive
shareholder
returns
over
the
long
term.
Payson
Total
Return
Fund
Performance
Chart
and
Analysis
(Unaudited)
March
31,
2021
3
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
Payson
Total
Return
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
S&P
500®
Index
(the
“S&P
500®”),
over
the
past
ten
fiscal
years.
The
S&P
500®
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$10,000
Investment
Payson
Total
Return
Fund
vs.
S&P
500®
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
0.86%.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(800)
805-8258.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2021
One
Year
Five
Year
Ten
Year
Payson
Total
Return
Fund
61.37%
17.81%
12.47%
S&P
500®
Index
56.35%
16.29%
13.91%
Payson
Total
Return
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2021
See
Notes
to
Financial
Statements.
4
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
March
31,
2021.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
97.6%
Consumer
Discretionary
-
8.5%
30,610
Polaris,
Inc.
$
4,086,435
8,600
The
Home
Depot,
Inc.
2,625,150
30,480
Thor
Industries,
Inc.
4,106,875
17,000
Whirlpool
Corp.
3,745,950
14,564,410
Consumer
Staples
-
3.1%
11,410
Thermo
Fisher
Scientific,
Inc.
5,207,296
Financials
-
21.3%
20,700
American
Express
Co.
2,927,808
17,320
Aon
PLC,
Class A
3,985,505
32,220
Berkshire
Hathaway,
Inc.,
Class B (a)
8,231,243
22,516
JPMorgan
Chase
&
Co.
3,427,611
17,310
Mastercard,
Inc.,
Class A
6,163,225
10,350
S&P
Global,
Inc.
3,652,205
152,500
The
Western
Union
Co.
3,760,650
20,000
Visa,
Inc.,
Class A
4,234,600
36,382,847
Health
Care
-
16.8%
37,625
AbbVie,
Inc.
4,071,777
22,215
Amgen,
Inc.
5,527,314
13,100
Danaher
Corp.
2,948,548
42,330
Johnson
&
Johnson
6,956,935
39,045
Merck
&
Co.,
Inc.
3,009,979
50,650
Pfizer,
Inc.
1,835,050
11,680
UnitedHealth
Group,
Inc.
4,345,778
28,695,381
Industrials
-
11.2%
22,000
AMETEK,
Inc.
2,810,060
21,810
CSX
Corp.
2,102,920
9,600
Cummins,
Inc.
2,487,456
13,925
Generac
Holdings,
Inc. (a)
4,559,741
12,900
Honeywell
International,
Inc.
2,800,203
8,650
Otis
Worldwide
Corp.
592,093
49,740
Raytheon
Technologies
Corp.
3,843,410
19,195,883
Shares
Security
Description
Value
Information
Technology
-
36.7%
13,779
Accenture
PLC,
Class A
$
3,806,449
5,640
Alphabet,
Inc.,
Class A (a)
11,632,613
12,180
Broadcom,
Inc.
5,647,379
11,430
Broadridge
Financial
Solutions,
Inc.
1,749,933
25,830
CDW
Corp.
4,281,322
11,567
Facebook,
Inc.,
Class A (a)
3,406,829
16,410
Fidelity
National
Information
Services,
Inc.
2,307,410
283,530
HP,
Inc.
9,002,078
10,055
Lam
Research
Corp.
5,985,138
27,260
Microsoft
Corp.
6,427,090
5,940
NVIDIA
Corp.
3,171,544
11,600
NXP
Semiconductors
NV
2,335,544
15,590
Texas
Instruments,
Inc.
2,946,354
62,699,683
Total
Common
Stock
(Cost
$101,455,858)
166,745,500
Investments,
at
value
-
97.6%
(Cost
$101,455,858)
$
166,745,500
Other
Assets
&
Liabilities,
Net
-
2.4%
4,078,074
Net
Assets
-
100.0%
$
170,823,574
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
Payson
Total
Return
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2021
See
Notes
to
Financial
Statements.
5
The
Level
1
value
displayed
in
this
table
is
Common
Stock.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
166,745,500
Level
2
-
Other
Significant
Observable
Inputs
–
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
166,745,500
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Total
Investments
Consumer
Discretionary
8.8%
Consumer
Staples
3.1%
Financials
21.8%
Health
Care
17.2%
Industrials
11.5%
Information
Technology
37.6%
100.0%
Payson
Total
Return
Fund
Statement
of
Assets
and
Liabilities
March
31,
2021
See
Notes
to
Financial
Statements.
6
ASSETS
Investments,
at
value
(Cost
$101,455,858)
$
166,745,500
Cash
2,765,809
Receivables:
Fund
shares
sold
199,625
Investment
securities
sold
1,279,518
Dividends
and
interest
133,851
Prepaid
expenses
10,226
Total
Assets
171,134,529
LIABILITIES
Payables:
Fund
shares
redeemed
27,476
Distributions
payable
143,228
Accrued
Liabilities:
Investment
adviser
fees
84,943
Fund
services
fees
20,186
Other
expenses
35,122
Total
Liabilities
310,955
NET
ASSETS
$
170,823,574
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
87,071,938
Distributable
earnings
83,751,636
NET
ASSETS
$
170,823,574
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
6,280,825
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
$
27.20
Payson
Total
Return
Fund
Statement
of
Operations
Year
Ended
March
31,
2021
See
Notes
to
Financial
Statements.
7
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$1,305)
$
2,233,775
Interest
income
1,460
Total
Investment
Income
2,235,235
EXPENSES
Investment
adviser
fees
852,395
Fund
services
fees
215,060
Custodian
fees
15,502
Registration
fees
22,981
Professional
fees
43,614
Trustees'
fees
and
expenses
6,381
Other
expenses
52,951
Total
Expenses
1,208,884
NET
INVESTMENT
INCOME
1,026,351
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
on
investments
28,613,671
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
34,851,367
NET
REALIZED
AND
UNREALIZED
GAIN
63,465,038
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
64,491,389
Payson
Total
Return
Fund
Statements
of
Changes
in
Net
Assets
See
Notes
to
Financial
Statements.
8
For
the
Years
Ended
March
31,
2021
2020
OPERATIONS
Net
investment
income
$
1,026,351
$
867,578
Net
realized
gain
28,613,671
452,524
Net
change
in
unrealized
appreciation
(depreciation)
34,851,367
(7,489,749)
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
64,491,389
(6,169,647)
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(11,060,753)
(867,572)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
13,861,490
18,427,705
Reinvestment
of
distributions
10,021,490
377,018
Redemption
of
shares
(10,965,094)
(16,202,815)
Increase
in
Net
Assets
from
Capital
Share
Transactions
12,917,886
2,601,908
Increase
(Decrease)
in
Net
Assets
66,348,522
(4,435,311)
NET
ASSETS
Beginning
of
Year
104,475,052
108,910,363
End
of
Year
$
170,823,574
$
104,475,052
SHARE
TRANSACTIONS
Sale
of
shares
569,849
889,432
Reinvestment
of
distributions
410,282
18,985
Redemption
of
shares
(450,298)
(779,474)
Increase
in
Shares
529,833
128,943
Payson
Total
Return
Fund
Financial
Highlights
See
Notes
to
Financial
Statements.
9
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
March
31,
2021
2020
2019
2018
2017
NET
ASSET
VALUE,
Beginning
of
Year
$
18.17
$
19.37
$
17.76
$
16.14
$
13.94
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.17
0.15
0.13
0.14
0.16
Net
realized
and
unrealized
gain
(loss)
10.75
(1.20)
1.61
2.33
2.25
Total
from
Investment
Operations
10.92
(1.05)
1.74
2.47
2.41
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.17)
(0.15)
(0.13)
(0.12)
(0.21)
Net
realized
gain
(1.72)
–
–
(0.73)
–
Total
Distributions
to
Shareholders
(1.89)
(0.15)
(0.13)
(0.85)
(0.21)
NET
ASSET
VALUE,
End
of
Year
$
27.20
$
18.17
$
19.37
$
17.76
$
16.14
TOTAL
RETURN
61.37%
(5.48)%
9.83%
15.39%
17.41%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
170,824
$
104,475
$
108,910
$
95,489
$
78,888
Ratios
to
Average
Net
Assets:
Net
investment
income
0.72%
0.74%
0.71%
0.82%
1.10%
Net
expenses
0.85%
0.86%
0.89%
0.94%
0.98%
PORTFOLIO
TURNOVER
RATE
64%
25%
27%
38%
30%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2021
10
Organization
The
Payson
Total
Return
Fund
(the
“Fund”)
is
a
diversified
portfolio
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
the
Fund’s
shares
of
beneficial
interest
without
par
value.
The
Fund
commenced
operations
on
November
25,
1991.
The
Fund
seeks
a
combination
of
high
current
income
and
capital
appreciation.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
4,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2021
11
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
net
asset
value
(“NAV”)
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
March
31,
2021,
for
the
Fund’s
investments
is
included
at
the
end
of
the
Fund’s
Schedule
of
Investments.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Non-cash
dividend
income
is
recorded
at
the
fair
market
value
of
the
securities
received.
Foreign
dividend
income
is
recorded
on
the
ex-dividend
date
or
as
soon
as
possible
after
determining
the
existence
of
a
dividend
declaration
after
exercising
reasonable
due
diligence.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
quarterly.
Distributions
to
shareholders
of
net
capital
gains
and
net
foreign
currency
gains,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2021
12
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
Federal
Taxes
–
The
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income
and
capital
gains,
if
any,
the
Fund
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
The
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
The
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
March
31,
2021,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-
recognition
or
disclosure.
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
the
Fund
enters
into
contracts
that
provide
general
indemnifications
by
the
Fund
to
the
counterparty
to
the
contract.
The
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
the
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
The
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
the
Fund’s
balance
sheet.
Cash
–
Concentration
in
Uninsured
Account
For
cash
management
purposes,
the
Fund
may
concentrate
cash
with
the
Fund’s
custodian.
This
typically
results
in
cash
balances
exceeding
the
Federal
Deposit
Insurance
Corporation
(“FDIC”)
insurance
limits.
As
of
March
31,
2021,
the
Fund
had
$2,515,809
at
MUFG
Union
Bank,
N.A.
that
exceeded
the
FDIC
insurance
limit.
Fees
and
Expenses
Investment
Adviser
–
H.M.
Payson
&
Co.
(the
“Adviser”)
is
the
investment
adviser
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee,
payable
monthly,
from
the
Fund
at
an
annual
rate
of
0.60%
of
the
Fund’s
average
daily
net
assets.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
the
Fund’s
distributor
(the
“Distributor”).
The
Fund
does
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services.
The
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2021
13
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings,
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statement
of
Operations.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
the
Fund
pays
Apex
customary
fees
for
its
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
the
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
The
Trust
pays
each
independent
Trustee
an
annual
retainer
of
$31,000
for
services
to
the
Trust
($41,000
for
the
Chairman).
The
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-pocket
expenses
incurred
in
connection
with
his
or
her
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
The
amount
of
Trustees’
fees
attributable
to
the
Fund
is
disclosed
in
the
Statement
of
Operations.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
the
Fund.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments,
during
the
year
ended
March
31,
2021
were
$88,441,845
and
$89,616,023,
respectively.
Federal
Income
Tax
As
of
March
31,
2021,
the
cost
of
investments
for
federal
income
tax
purposes
is
$101,455,858 and
the
components
of
net
unrealized appreciation were
as
follows:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
Gross
Unrealized
Appreciation
$
65,552,756
Gross
Unrealized
Depreciation
(263,114)
Net
Unrealized
Appreciation
$
65,289,642
2021
2020
Ordinary
Income
$
2,675,613
$
819,539
Long-Term
Capital
Gain
8,395,525
–
$
11,071,138
$
819,539
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2021
14
As
of
March
31,
2021
,
distributable
earnings
(accumulated
loss)
on
a
tax
basis
were
as
follows:
The
difference
between
components
of
distributable
earnings
on
a
tax
basis
and
the
amounts
reflected
in
the
Statement
of
Assets
and
Liabilities
are
primarily
due
to
treatment
of
distributions
payable.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
through
the
date
these
financial
statements
were
issued
have
been
evaluated
for
potential
impact,
and
the
Fund
has
had
no
such
events.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
Undistributed
Ordinary
Income
$
2,147,927
Undistributed
Long-Term
Gain
16,457,295
Net
Unrealized
Appreciation
65,289,642
Other
Temporary
Differences
(143,228)
Total
$
83,751,636
Report
of
Independent
Registered
Public
Accounting
Firm
15
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Payson
Total
Return
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
Payson
Total
Return
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”
),
including
the
schedule
of
investments
,
as
of
March
31,
2021,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”
).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
March
31,
2021,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(
“PCAOB”
)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Report
of
Independent
Registered
Public
Accounting
Firm
16
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
March
31,
2021
by
correspondence
with
the
custodian.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
May
25,
2021
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2021
17
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(800)
805-
8258
and
on
the
SEC
website
at
www.sec.gov.
The
Fund’s
proxy
voting
record
for
the
most
recent
twelve-
month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(800)
805-8258
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund
,
you
incur
ongoing
costs,
including
management
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
October
1,
2020
through
March
31,
2021.
Actual
Expenses
–
The
first
line
of
the
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
in
this
line,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
first
line
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
the
period.
Hypothetical
Example
for
Comparison
Purposes
–
The
second
line
of
the
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
the
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only.
Therefore,
the
second
line
of
the
table
is
useful
in
comparing
ongoing
costs
only
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2021
18
Federal
Tax
Status
of
Dividends
Declared
during
the
Fiscal
Year
For
federal
income
tax
purposes,
dividends
from
short-term
capital
gains
are
classified
as
ordinary
income.
The
Fund
designates
49.12
%
of
its
income
dividend
distributed
as
qualifying
for
the
corporate
dividends
received
deduction
(DRD)
and
50.29
%
for
the
qualified
dividend
rate
(QDI)
as
defined
in
Section
1(h)(11)
of
the
Code.
The
Fund
also
designates
0.06
%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
The
Fund
also
designates
61.20%
as
short-term
capital
gains
dividends
exempt
from
US
tax
for
foreign
shareholders
(QSD).
The
Fund
paid
long-term
capital
gain
dividends
of
$8,395,525.
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(800)
805-8258.
Beginning
Account
Value
October
1,
2020
Ending
Account
Value
March
31,
2021
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,204.66
$
4.67
0.85%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,020.69
$
4.28
0.85%
*
Expenses
are
equal
to
the
Fund’s
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
the
number
of
days
in
the
most
recent
fiscal
half-year
(182)
divided
by
365
to
reflect
the
half-year
period.
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2021
19
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-2008.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
since
2017;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-
Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2021
20
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019.
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-
2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-
2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Todd
Proulx
Born:
1978
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-
2019.
800
805
8258
//
hmpayson.com
FOR
MORE
INFORMATION
Payson
Total
Return
Fund
P.O.
Box
588
Portland,
Maine
04112
(800)
805-8258
(toll
free)
www.hmpayson.com
Transfer
Agent
Apex
Fund
Services
P.O.
Box
588
Portland,
Maine
04112
www.theapexgroup.com
Distributor
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
Maine
04101
www.foreside.com
Investment
Company
Act
File
No.
811-03023
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
risks,
objectives,
fees
and
expenses,
experience
of
its
management,
and
other
information.
800
805
8258
//
hmpayson.com
230-ANR-0321
Merk
Hard
Currency
Fund
®
Investor
Shares
(MERKX)
Institutional
Shares
(MHCIX)
Annual
Report
March
31,
2021
1
1
Dear
Shareholder,
We
present
the
annual
report
for
the
Merk
Hard
Currency
Fund®
with
respect
to
the
period
April
1,
2020
through
March
31,
2021
(the
“Period”).
The
Merk
Hard
Currency
Fund
seeks
to
profit
from
a
rise
in
hard
currencies
relative
to
the
U.S.
dollar.
Merk
Investments
LLC
(the
“Adviser”)
will
determine
currency
allocations
based
on
its
analysis
of
monetary
policies
pursued
by
central
banks
and
economic
environments.
The
Fund’s
performance
data
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
Please
visit
www.merkfunds.com
for
most
recent
month
end
performance.
The
Fund’s
expense
ratio
for
the
Investor
Shares
is
1.36%.
Merk
Hard
Currency
Fund
In
Q2
2020,
the
U.S.
dollar
was
weaker
versus
all
other
G10
(group
of
11
industrialized
nations
that
have
similar
economic
interests)
currencies
and
gold.
The
dollar
may
have
been
weaker
in
part
due
to
a
relative
easing
of
global
credit
conditions,
in
part
driven
by
central
banks.
The
Fund
was
up
5.87%
for
the
quarter.
The
biggest
contributors
were
the
Australian
dollar
and
the
Norwegian
krone.
During
the
period
,
the
Fund
increased
the
Australian
dollar
and
Japanese
yen
positions,
and
reduced
the
Canadian
dollar,
Swedish
krona,
and
gold
positions.
In
Q3
2020,
the
U.S.
dollar
was
again
weaker
versus
all
other
G10
currencies
and
gold.
The
continued
global
economic
rebound
and
Federal
Reserve
(“Fed”)
policy
communication
likely
contributed
to
the
dollar’s
weakness.
The
Fund
was
up
3.10%
for
the
quarter.
The
biggest
contributors
were
the
Australian
dollar
and
the
Swedish
krona.
During
the
quarter,
the
Fund
increased
the
Canadian
dollar
and
Japanese
yen
positions,
and
reduced
the
New
Zealand
dollar
position.
In
Q4
2020,
the
U.S.
dollar
was
again
weaker
versus
all
other
G10
currencies
and
gold.
The
continued
global
economic
rebound
and
Fed
policy
communication
likely
contributed
to
the
dollar’s
weakness.
The
Fund
was
up
5.70%
for
the
quarter.
The
biggest
contributors
were
the
Australian
dollar,
the
Norwegian
krone,
and
the
Swedish
krona.
During
the
quarter,
the
Fund
reduced
the
Canadian
dollar
and
gold
positions.
In
Q1
2021,
the
U.S.
dollar
strengthened
against
most
other
G10
currencies
and
gold.
The
movement
in
real
interest
rate
differentials,
quite
possibly
driven
by
U.S.
vaccination
ramp-up
and
a
gradual
reopening
of
the
U.S.
economy,
was
positive
for
the
dollar
versus
gold
and
other
currencies.
The
oil
producing
countries
of
Canada
and
Norway
benefited
from
the
rise
in
oil
prices
in
Q1.
The
Canadian
dollar,
Norwegian
krone,
and
the
British
pound
were
the
only
currencies
in
the
G10
that
appreciated
versus
the
dollar
in
Q1.
During
the
quarter,
the
Fund
added
to
the
New
Zealand
dollar
and
euro
positions,
and
reduced
the
gold,
Japanese
yen,
and
Canadian
dollar
positions.
We
maintain
our
Q2
2020
call
that
we
are
in
a
new
secular
dollar
bear
market
that
we
think
may
last
for
several
years.
After
a
counter-
trend
dollar
rally
in
Q1
2021,
we
think
the
dollar
may
well
continue
the
longer-term
weakening
trend
it
started
in
late
March
2020.
As
vaccination
ramps
up
outside
the
U.S.,
we
believe
the
globally
synchronized
recovery
will
likely
be
a
headwind
for
the
dollar
and
a
tailwind
for
foreign
currencies.
We
think
the
Fund
is
well
positioned
for
what
we
see
as
an
ongoing
secular
dollar
bear
market.
In
this
context,
investors
may
want
to
consider
whether
the
Merk
Hard
Currency
Fund
can
add
valuable
diversification
to
their
portfolio.
In
this
context,
we
encourage
investors
to
consider
whether
the
Merk
Funds
may
help
diversify
their
portfolios.
As
of
March
31,
2021
(annualized
return)
1
year
5
year
10
year
Since
inception
5/10/05
Merk
Hard
Currency
Fund
Investor
Shares
(MERKX)
12.09%
-0.17%
-1.83%
+1.25%
JPMorgan
3-Month
Global
Cash
Index
(“reference
basket”)
8.03%
0.20%
-1.65%
+0.76%
A
Message
To
Our
Shareholders
(Unaudited)
March
31,
2021
2
Sincerely,
Axel
G.
Merk
President
&
Chief
Investment
Officer
The
views
in
this
Report
were
those
of
the
Fund
Manager
as
of
March
31,
2021
and
may
not
reflect
the
views
of
the
Manager
on
the
date
this
Report
is
first
published
or
anytime
thereafter.
These
views
are
intended
to
assist
shareholders
of
the
Fund
in
understanding
their
investments
in
a
Fund
and
do
not
constitute
investment
advice.
The
Fund’s
performance
is
influenced
by
changes
in
exchange
rates
of
currencies
to
which
the
Fund
may
have
had
exposure
to
through
derivatives.
Over
time,
the
Fund
seeks
to
generate
more
gains
from
securities
than
derivatives.
Since
the
Fund
is
primarily
exposed
to
foreign
currencies,
changes
in
currency
exchange
rates
will
affect
the
value
of
what
the
respective
Fund
owns
and
the
price
of
the
Fund’s
shares.
Investing
in
foreign
instruments
bears
a
greater
risk
than
investing
in
domestic
instruments
for
reasons
such
as
volatility
of
currency
exchange
rates
and,
in
some
cases,
limited
geographic
focus,
political
and
economic
instability,
and
relatively
illiquid
markets.
The
Fund
is
subject
to
interest
rate
risk,
which
is
the
risk
that
debt
securities
in
a
Fund’s
portfolio
will
decline
in
value
because
of
increases
in
market
interest
rates.
As
a
non-diversified
fund,
the
Merk
Hard
Currency
Fund
will
be
subject
to
more
investment
risk
and
potential
for
volatility
than
a
diversified
fund
because
its
portfolio
may,
at
times,
focus
on
a
limited
number
of
issuers.
The
Fund
may
also
invest
in
derivative
securities,
which
can
be
volatile
and
involve
various
types
and
degrees
of
risk.
The
JPMorgan
3-Month
Global
Cash
Index
tracks
total
returns
of
three-month
constant
maturity
euro-currency
deposits.
The
euro-
currency
deposits
are
the
only
short-term
securities
consistent
across
all
markets
in
terms
of
liquidity,
maturity
and
credit
quality.
The
index
is
unmanaged
and
includes
reinvested
distributions.
One
cannot
invest
directly
in
an
index,
nor
is
an
index
representative
of
the
Fund's
portfolio.
JPMorgan
does
not
sponsor,
endorse
or
promote
the
Merk
Hard
Currency
Fund
in
connection
with
any
reference
to
the
JPMorgan
3-Month
Global
Cash
Index.
JPMorgan
makes
no
representation
or
warranty,
express
or
implied
regarding
the
advisability
of
investing
in
securities
generally
or
in
any
product
particularly
or
the
ability
of
the
JPMorgan
3-Month
Global
Cash
Index
to
track
general
bond
market
performance.
3
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment
in
Investor
Shares,
including
reinvested
dividends
and
distributions,
in
the
Merk
Hard
Currency
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
JPMorgan
3-Month
Global
Cash
Index,
over
the
past
ten
fiscal
years.
The
JPMorgan
3-Month
Global
Cash
Index
tracks
total
returns
of
three-month
constant
maturity
euro-currency
deposits.
The
euro-currency
deposits
are
the
only
short-term
securities
consistent
across
all
markets
in
terms
of
liquidity,
maturity
and
credit
quality.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$10,000
Investment
Merk
Hard
Currency
Fund-Investor
Shares
vs.
JPMorgan
3-Month
Global
Cash
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratios
(gross)
for
Investor
Shares
and
Institutional
Shares
are
1.36%
and
1.11%,
respectively.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(866)
637-5386
or
visit
www.merkfunds.com.
Ten
Years
(03/31/2011-03/31/2021)
Average
Annual
Total
Returns
Periods
Ended
March
31,
2021
One
Year
Five
Year
Ten
Year
Merk
Hard
Currency
Fund
Investor
Shares
12.09%
-0.17%
-1.83%
Merk
Hard
Currency
Fund
Institutional
Shares
12.24%
0.06%
-1.59%
JPMorgan
3-Month
Global
Cash
Index
8.03%
0.20%
-1.65%
Merk
Hard
Currency
Fund
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2021
4
See
Notes
to
Financial
Statements.
MERK
HARD
CURRENCY
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2021
Principal
Security
Description
Currency
Rate
Maturity
Value
in
USD
Foreign
Bonds
-
62.4%
(a)
Non-U.S.
Government
-
Australia
-
5.0%
$
3,800,000
Australia
Government
Bond
AUD
2.000
%
12/21/21
$
2,926,806
Non-U.S.
Government
-
New
Zealand
-
5.3%
4,400,000
New
Zealand
Government
Bond
NZD
6.000
05/15/21
3,092,074
Non-U.S.
Government
-
Sweden
-
4.3%
21,000,000
Sweden
Government
Bond
SEK
3.500
06/01/22
2,511,166
Non-U.S.
Government
Agency
-
Sweden
-
12.6%
64,000,000
Kommuninvest
I
Sverige
AB,
MTN
SEK
1.000
09/15/21
7,368,231
Non-
U.S.Government
Agency
-
Germany
-
6.0%
30,000,000
Kreditanstalt
fuer
Wiederaufbau
,
EMTN
NOK
1.125
05/12/22
3,533,344
Regional
Agencies
-
Australia
-
4.2%
3,200,000
Western
Australian
Treasury
Corp.
AUD
7.000
07/15/21
2,477,400
Regional
Authority
-
Australia
-
4.5%
3,500,000
New
South
Wales
Treasury
Corp.
AUD
4.000
04/08/21
2,659,005
Regional
Authority
-
Canada
-
16.3%
3,000,000
Province
of
Alberta
Canada
CAD
1.350
09/01/21
2,399,355
2,600,000
Province
of
British
Columbia
Canada
CAD
3.250
12/18/21
2,113,806
3,000,000
Province
of
New
Brunswick
Canada
CAD
3.350
12/03/21
2,437,599
3,000,000
Province
of
Saskatchewan
Canada
CAD
9.600
02/04/22
2,573,765
9,524,525
Supranational
Bank
-
Luxembourg
-
4.2%
2,000,000
European
Financial
Stability
Facility,
EMTN
EUR
3.500
02/04/22
2,427,677
Total
Foreign
Bonds
(Cost
$35,586,783)
36,520,228
Foreign
Treasury
Securities
-
14.7%
(a)
Non-U.S.
Government
-
Canada
-
3.4%
2,500,000
Canadian
Treasury
Bill
(b)
CAD
0.076
05/13/21
1,989,158
Non-U.S.
Government
-
Norway
-
11.3%
56,500,000
Norway
Treasury
Bill
(b)(c)
NOK
0.112
-
0.130
12/15/21
6,597,327
Total
Foreign
Treasury
Securities
(Cost
$8,610,554)
8,586,485
U.S.
Government
&
Agency
Obligations
-
13.7%
(a)
U.S.
Treasury
Securities
-
13.7%
8,000,000
U.S.
Treasury
Bill
(d)
(Cost
$7,999,650)
USD
0.075
04/22/21
7,999,976
Shares
Security
Description
Currency
Value
in
USD
Exchange
Traded
Product
-
1.8%
61,300
VanEck
Merk
Gold
Trust
ETF
(e)(f)
(Cost
$654,071)
USD
1,019,419
Shares
Security
Description
Currency
Rate
Value
in
USD
Money
Market
Fund
-
0.4%
258,009
Morgan
Stanley
Institutional
Liquidity
Funds
Treasury
Securities
Portfolio,
Institutional
Class
(g)
(Cost
$258,009)
USD
0.010
258,009
Investments,
at
value
-
93.0%
(Cost
$53,109,067)
$
54,384,117
Foreign
Currencies
– 6.6%
(Cost
$3,859,045)
3,857,607
Net
Unrealized
Gain/Loss
on
Forward
Currency
Contracts
–
(0.2)%
(87,207)
Other
Assets
&
Liabilities,
Net
– 0.6%
336,748
NET
ASSETS
– 100.0%
$
58,491,265
EMTN
European
Medium
Term
Note
ETF
Exchange
Traded
Fund
MTN
Medium
Term
Note
(a)
All
or
a
portion
of
these
securities
are
segregated
to
cover
outstanding
forward
currency
contract
exposure.
(b)
Rate
presented
is
yield
to
maturity.
(c)
Security
exempt
from
registration
under
Rule
144A
under
the
Securities
Act
of
1933.
At
the
period
end,
the
value
of
these
securities
amounted
to
$6,597,327
or
11.3%
of
net
assets.
5
See
Notes
to
Financial
Statements.
Affiliated
investments
are
investments
that
are
managed
by
the
Adviser,
and
are
noted
in
the
Merk
Hard
Currency
Fund’s
Schedule
of
Investments.
Transactions
during
the
period
with
affiliates
were
as
follows:
As
of
March
31,
2021,
the
Merk
Hard
Currency
Fund
had
the
following
forward
currency
contracts
outstanding:
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
other
financial
instruments
and
liabilities
as
of
March
31,
2021.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
(d)
Zero
coupon
bond.
Interest
rate
presented
is
yield
to
maturity.
(e)
Affiliate.
(f)
Non-income
producing
security.
(g)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2021.
Exchange
Traded
Product
VanEck
Merk
Gold
Trust
ETF
Balance
3/31/2020
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
3/31/2021
Realized
Gain
Investment
Income
Shares
247,800
–
(186,500)
–
61,300
Cost
$
2,970,915
$
–
$
(2,316,844)
$
–
$
654,071
$
879,708
$
–
Value
3,813,642
–
–
(477,379)
1,019,419
Counterparty
Contracts
to
Purchase/(Sell)
Settlement
Date
Settlement
Value
Net
Unrealized
Appreciation
(Depreciation)
BNY
Mellon
Capital
Markets,
LLC
(1,800,000)
British
Pound
Sterling
04/07/21
$
(2,482,766)
$
1,228
1,800,000
British
Pound
Sterling
04/14/21
2,482,818
(1,220)
(655,000,000)
Japanese
Yen
04/07/21
(5,914,333)
(1,672)
(50,000,000)
Japanese
Yen
04/14/21
(451,794)
156
655,000,000
Japanese
Yen
04/14/21
5,914,713
1,742
RBC
Capital
Markets,
LLC
1,800,000
British
Pound
Sterling
04/07/21
2,468,014
13,523
655,000,000
Japanese
Yen
04/07/21
6,016,969
(100,964)
$
(87,207)
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Foreign
Bonds
$
–
$
36,520,228
$
–
$
36,520,228
Foreign
Treasury
Securities
–
8,586,485
–
8,586,485
U.S.
Government
&
Agency
Obligations
–
7,999,976
–
7,999,976
Exchange
Traded
Product
1,019,419
–
–
1,019,419
Money
Market
Fund
–
258,009
–
258,009
Investments,
at
value
$
1,019,419
$
53,364,698
$
–
$
54,384,117
Other
Financial
Instruments
*
Forward
Currency
Contracts
–
16,649
–
16,649
Total
Assets
$
1,019,419
$
53,381,347
$
–
$
54,400,766
Liabilities
Other
Financial
Instruments
*
Forward
Currency
Contracts
$
–
$
(103,856)
$
–
$
(103,856)
Total
Liabilities
$
–
$
(103,856)
$
–
$
(103,856)
*
Other
Financial
Instruments
are
derivatives
not
reflected
in
the
Schedule
of
Investments,
such
as
forward
currency
contracts,
which
are
valued
at
the
unrealized
appreciation
(depreciation)
at
year
end.
6
See
Notes
to
Financial
Statements.
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Net
Assets
Foreign
Bonds
62.4%
Foreign
Treasury
Securities
14.7%
U.S.
Government
&
Agency
Obligations
13.7%
Exchange
Traded
Product
1.8%
Money
Market
Fund
0.4%
Foreign
Currencies
6.6%
Net
Unrealized
Gain/Loss
on
Forward
Currency
Contracts
(0.2)%
Other
Assets
and
Liabilities,
Net
0.6%
100.0%
7
See
Notes
to
Financial
Statements.
MERK
HARD
CURRENCY
FUND
ASSETS
Total
Investments,
at
value
(Cost
$52,454,996,
respectively)
$
53,364,698
Total
Investments
in
affiliates,
at
value
(Cost
$654,071,
respectively)
1,019,419
Total
Investments,
at
value
(Cost
$53,109,067,
respectively)
54,384,117
Foreign
currency
(Cost
$3,859,045,
respectively)
3,857,607
Receivables:
Fund
shares
sold
10,920
Dividends
and
interest
406,498
Unrealized
gain
on
forward
currency
contracts
16,649
Total
Assets
58,675,791
LIABILITIES
Unrealized
loss
on
forward
currency
contracts
103,856
Payables:
Fund
shares
redeemed
22,251
Accrued
Liabilities:
Investment
adviser
fees
45,256
Distribution
fees
10,617
Other
expenses
2,546
Total
Liabilities
184,526
NET
ASSETS
$
58,491,265
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
65,
702,859
Accumulated
Loss
(7,211,594
)
NET
ASSETS
$
58,491,265
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
Investor
Shares
5,136,712
Institutional
Shares
972,687
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
Investor
Shares
(based
on
net
assets
of
$49,033,114,
respectively)
$
9.55
Institutional
Shares
(based
on
net
assets
of
$9,458,151,
respectively)
$
9.72
STATEMENT
OF
ASSETS
AND
LIABILITIES
March
31,
2021
8
See
Notes
to
Financial
Statements.
MERK
HARD
CURRENCY
FUND
INVESTMENT
INCOME
Dividend
income
$
1,131
Interest
income
(Net
of
foreign
withholding
taxes
of
$27,868,
respectively)
1,221,921
Net
amortization
expense
(1,087,423)
Total
Investment
Income
135,629
EXPENSES
Investment
adviser
fees
597,430
Non
12b-1
shareholder
servicing
fees:
Investor
Shares
25,027
Institutional
Shares
4,844
Distribution
fees:
Investor
Shares
125,141
Interest
expense
18,460
Total
Expenses
770,902
Fees
waived
(10,620)
Net
Expenses
760,282
NET
INVESTMENT
LOSS
(624,653)
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
on:
Investments
in
unaffiliated
issuers
1,400,106
Investments
in
affiliated
issuers
879,708
Foreign
currency
transactions
610,492
Net
realized
gain
2,890,306
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
in
unaffiliated
issuers
5,059,348
Investments
in
affiliated
issuers
(477,379)
Foreign
currency
translations
(134,516)
Net
change
in
unrealized
appreciation
(depreciation)
4,447,453
NET
REALIZED
AND
UNREALIZED
GAIN
7,337,759
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
6,713,106
STATEMENT
OF
OPERATIONS
YEAR
ENDED
MARCH
31,
2021
9
See
Notes
to
Financial
Statements.
MERK
HARD
CURRENCY
FUND
For
the
Year
Ended
March
31,
2021
For
the
Year
Ended
March
31,
2020
OPERATIONS
Net
investment
loss
$
(624,653)
$
(384,743)
Net
realized
gain
(loss)
2,890,306
(1,891,103)
Net
change
in
unrealized
appreciation
(depreciation)
4,447,453
(2,423,817)
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
6,713,106
(4,699,663)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Investor
Shares
6,595,74
2
6,203,686
Institutional
Shares
1,073,350
7,480,445
Redemption
of
shares:
Investor
Shares
(12,915,229)
(17,494,592)
Institutional
Shares
(6,238,951)
(9,264,220)
Decrease
in
Net
Assets
from
Capital
Share
Transactions
(11,485,088
)
(13,074,681)
Decrease
in
Net
Assets
(4,771,982
)
(17,774,344)
NET
ASSETS
Beginning
of
Year
63,263,24
7
81,037,591
End
of
Year
$
58,491,265
$
63,263,247
SHARE
TRANSACTIONS
Sale
of
shares:
Investor
Shares
714,946
695,440
Institutional
Shares
116,750
815,447
Redemption
of
shares:
Investor
Shares
(1,416,182)
(1,952,757)
Institutional
Shares
(709,742)
(1,034,048)
Decrease
in
Shares
(1,294,228)
(1,475,918)
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
10
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
March
31,
2021
2020
2019
2018
2017
INVESTOR
SHARES
NET
ASSET
VALUE,
Beginning
of
Year
$
8.52
$
9.10
$
10.06
$
9.27
$
9.81
INVESTMENT
OPERATIONS
Net
investment
loss
(a)
(0.10)
(0.05)
(0.08)
(0.12)
(0.12)
Net
realized
and
unrealized
gain
(loss)
1.13
(0.53)
(0.80)
1.00
(0.42)
Total
from
Investment
Operations
1.03
(0.58)
(0.88)
0.88
(0.54)
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
–
–
(0.08)
(0.09)
–
NET
ASSET
VALUE,
End
of
Year
$
9.55
$
8.52
$
9.10
$
10.06
$
9.27
TOTAL
RETURN
12.09%
(6.37)%
(8.73)%
9.54%
(5.50)%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000's
omitted)
$49,033
$49,712
$64,575
$85,874
$92,355
Ratios
to
Average
Net
Assets:
Net
investment
loss
(1.08)
%
(0.57)%
(0.88)%
(1.21)%
(1.27)%
Net
expenses
1.31%
1.34%
1.35%
1.27%
1.24%
Interest
expenses
0.03%
0.06%
0.08%
–%
–%
Net
expenses
without
interest
expenses
1.28%
1.28%
1.27%
1.27%
1.24%
Gross
expenses
(b)
1.33%
1.36%
1.38%
1.30%
1.30%
PORTFOLIO
TURNOVER
RATE
(c)
107%
53%
65%
35%
81%
INSTITUTIONAL
SHARES
NET
ASSET
VALUE,
Beginning
of
Year
$
8.6
6
$
9.23
$
10.18
$
9.38
$
9.90
INVESTMENT
OPERATIONS
Net
investment
loss
(a)
(
0.
08)
(0.03)
(0.06)
(0.10)
(0.10)
Net
realized
and
unrealized
gain
(loss)
1.1
4
(0.54)
(0.80)
1.02
(0.42)
Total
from
Investment
Operations
1.0
6
(0.57)
(0.86)
0.92
(0.52)
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
–
–
(0.09)
(0.12)
–
NET
ASSET
VALUE,
End
of
Year
$
9.72
$
8.66
$
9.23
$
10.18
$
9.38
TOTAL
RETURN
12.24
%
(6.18)%
(d)
(8.47)%
9.82%
(5.25)%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000's
omitted)
$9,458
$13,551
$16,462
$22,624
$17,821
Ratios
to
Average
Net
Assets:
Net
investment
loss
(0.83)
%
(0.31)%
(0.64)%
(0.95)%
(1.02)%
Net
expenses
1.06%
1.09%
1.10%
1.02%
0.99%
Interest
expenses
0.03%
0.06%
0.08%
–%
–%
Net
expenses
without
interest
expenses
1.03%
1.03%
1.02%
1.02%
0.99%
Gross
expenses
(b)
1.08%
1.11%
1.13%
1.05%
1.05%
PORTFOLIO
TURNOVER
RATE
(c)
107%
53%
65%
35%
81%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
(b)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
(c)
The
portfolio
turnover
rate
is
calculated
without
regard
to
any
securities
whose
maturities
or
expiration
dates
at
the
time
of
acquisition
were
one
year
or
less.
(d)
Includes
adjustments
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
and,
consequently,
the
net
asset
values
for
financial
reporting
purposes
and
the
returns
based
upon
those
net
asset
values
may
differ
from
the
net
asset
values
and
returns
for
shareholder
transactions.
Financial
Highlights
11
11
Organization
The
Merk
Hard
Currency
Fund
(the
“Fund”)
is
a
non-diversified
portfolio
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
the
Fund’s
shares
of
beneficial
interest
without
par
value.
The
Fund
currently
offers
two
classes
of
shares:
Investor
Shares
and
Institutional
Shares.
The
Fund
seeks
to
profit
from
a
rise
in
hard
currencies
relative
to
the
U.S.
dollar.
The
Fund’s
Investor
Shares
and
Institutional
Shares
commenced
operations
on
May
10,
2005
and
April
1,
2010,
respectively.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Futures
contracts
are
valued
at
the
day’s
settlement
price
on
the
exchange
where
the
contract
is
traded.
Forward
currency
contracts
are
generally
valued
based
on
interpolation
of
forward
curve
data
points
obtained
from
major
banking
institutions
that
deal
in
foreign
currencies
and
currency
dealers.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust's
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
3,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
NAV
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2021
12
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
March
31,
2021,
for
the
Fund’s
investments
is
included
at
the
end
of
the
Fund’s
Schedule
of
Investments.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Foreign
Currency
Translations
–
Foreign
currency
amounts
are
translated
into
U.S.
dollars
as
follows:
(1)
assets
and
liabilities
at
the
rate
of
exchange
at
the
end
of
the
respective
period;
and
(2)
purchases
and
sales
of
securities
and
income
and
expenses
at
the
rate
of
exchange
prevailing
on
the
dates
of
such
transactions.
The
portion
of
the
results
of
operations
arising
from
changes
in
the
exchange
rates
and
the
portion
due
to
fluctuations
arising
from
changes
in
the
market
prices
of
securities
are
not
isolated.
Such
fluctuations
are
included
with
the
net
realized
and
unrealized
gain
or
loss
on
investments.
Foreign
Currency
Transactions
–
The
Fund
may
enter
into
transactions
to
purchase
or
sell
foreign
currency
contracts
and
options
on
foreign
currency.
Forward
currency
contracts
are
agreements
to
exchange
one
currency
for
another
at
a
future
date
and
at
a
specified
price.
A
fund
may
use
forward
currency
contracts
to
facilitate
transactions
in
foreign
securities,
to
manage
a
fund’s
foreign
currency
exposure
and
to
protect
the
U.S.
dollar
value
of
its
underlying
portfolio
securities
against
the
effect
of
possible
adverse
movements
in
foreign
exchange
rates.
These
contracts
are
intrinsically
valued
daily
based
on
forward
rates,
and
a
fund’s
net
equity
therein,
representing
unrealized
gain
or
loss
on
the
contracts
as
measured
by
the
difference
between
the
forward
foreign
exchange
rates
at
the
dates
of
entry
into
the
contracts
and
the
forward
rates
at
the
reporting
date,
is
recorded
as
a
component
of
NAV.
These
instruments
involve
market
risk,
credit
risk,
or
both
kinds
of
risks,
in
excess
of
the
amount
recognized
in
the
Statement
of
Assets
and
Liabilities.
Risks
arise
from
the
possible
inability
of
counterparties
to
meet
the
terms
of
their
contracts
and
from
movement
in
currency
and
securities
values
and
interest
rates.
Due
to
the
risks
associated
with
these
transactions,
a
fund
could
incur
losses
up
to
the
entire
contract
amount,
which
may
exceed
the
net
unrealized
value
included
in
its
NAV.
The
values
of
each
individual
forward
currency
contract
outstanding
as
of
March
31,
2021,
are
disclosed
in
the
Fund’s
Schedule
of
Investments.
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
quarterly.
Distributions
to
shareholders
of
net
capital
gains
and
foreign
currency
gains,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
Federal
Taxes
–
The
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income
and
capital
gains,
if
any,
the
Fund
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
The
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
The
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
March
31,
2021,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-recognition
or
disclosure.
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
13
The
Fund's
class-specific
expenses
are
charged
to
the
operations
of
that
class
of
shares.
Income
and
expenses
(other
than
expenses
attributable
to
a
specific
class)
and
realized
and
unrealized
gains
or
losses
on
investments
are
allocated
to
each
class
of
shares
based
on
the
class’
respective
net
assets
to
the
total
net
assets
of
the
Fund.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
the
Fund
enters
into
contracts
that
provide
general
indemnifications
by
the
Fund
to
the
counterparty
to
the
contract.
The
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
the
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
The
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
the
Fund’s
balance
sheet.
Fees
and
Expenses
Investment
Adviser
–
Merk
Investments
LLC
(the
“Adviser”)
is
the
investment
adviser
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee
from
the
Fund
at
an
annual
rate
of
1.00%
of
the
Fund’s
average
daily
net
assets.
Under
the
terms
of
the
Investment
Advisory
Agreement
for
the
Fund,
the
Adviser
is
obligated
to
pay
all
expenses
of
the
Fund
except
Board-approved
shareholder
servicing
fees,
borrowing
costs,
taxes,
brokerage
costs,
commissions,
and
extraordinary
and
non-recurring
expenses
and
expenses
that
the
Fund
is
authorized
to
pay
under
Rule
12b-1.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
the
Fund’s
distributor
(the
“Distributor”).
The
Fund
has
adopted
a
Distribution
Plan
(the
“Plan”)
for
Investor
Shares
in
accordance
with
Rule
12b-1
of
the
Act.
Under
the
Plan,
the
Fund
pays
the
Distributor
and/or
any
other
entity
as
authorized
by
the
Board
a
fee
of
up
to
0.25%
of
the
average
daily
net
assets
of
Investor
Shares.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings,
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
the
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
The
Trust
pays
each
independent
Trustee
an
annual
retainer
of
$31,000
for
services
to
the
Trust
($41,000
for
the
Chairman).
The
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-pocket
expenses
incurred
in
connection
with
his
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
the
Fund.
Pursuant
to
the
terms
of
the
investment
advisory
agreement,
the
Trustees'
fees
attributable
to
the
Fund
are
paid
by
the
Adviser.
Fees
Waived
During
the
fiscal
year,
the
Fund
invested
in
VanEck
Merk
Gold
Trust
ETF,
an
exchange
traded
product
sponsored
by
the
Adviser.
As
of
March
31,
2021
,
the
Fund
owned
approximately
0.24%
of
VanEck
Merk
Gold
Trust
ETF.
The
Adviser
has
agreed
to
waive
fees
in
an
amount
equal
to
the
fee
it
receives
from
VanEck
Merk
Gold
Trust
ETF
based
on
the
Fund’s
investment
in
VanEck
Merk
Gold
Trust
ETF
(NYSE:OUNZ).
For
the
year
ended
March
31,
2021
,
the
Adviser
waived
fees
of
$10,620
for
the
Fund.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
year
ended
March
31,
2021
,
were
as
follows:
Summary
of
Derivative
Activity
The
volume
of
open
derivative
positions
may
vary
on
a
daily
basis
as
the
Fund
transacts
derivative
contracts
in
order
to
achieve
the
exposure
desired
by
the
Adviser.
The
total
notional
value
of
activity
for
the
year
ended
March
31,
2021
for
any
derivative
type
that
was
held
during
the
year
is
as
follows:
Purchases
Sales
$
27,209,016
$
33,900,076
Forward
Currency
Contracts
$
920,815,026
14
The
Fund’s
use
of
derivatives
during
the
year
ended
March
31,
2021
,
was
limited
to
forward
currency
contracts.
Following
is
a
summary
of
the
effect
of
derivatives
on
the
Statement
of
Assets
and
Liabilities
for
the
Fund
as
of
March
31,
2021
:
Realized
and
unrealized
gains
and
losses
on
derivatives
contracts
during
the
year
ended
March
31,
2021,
by
the
Fund
are
recorded
in
the
following
locations
on
the
Statement
of
Operations:
The
Fund
is
subject
to
enforceable
master
netting
agreements,
or
netting
arrangements,
with
certain
counterparties.
These
agreements
govern
the
terms
of
certain
transactions,
and
reduce
the
counterparty
risk
associated
with
relevant
transactions
by
specifying
offsetting
mechanisms
and
collateral
posting
arrangements
at
pre-arranged
exposure
levels.
Master
netting
agreements
may
not
be
specific
to
each
different
asset
type;
in
such
instances,
they
would
allow
the
Fund
to
close
out
and
net
its
total
exposure
to
a
specified
counterparty
in
the
event
of
a
default
with
respect
to
any
and
all
the
transactions
governed
under
a
single
agreement
with
the
counterparty.
Collateral
terms
are
contract
specific
for
forward
currency
contracts.
Although
collateral
or
margin
requirements
may
differ
by
type
of
derivative
or
investment,
as
applicable,
the
Fund
typically
receives
cash
posted
as
collateral
(with
rights
of
rehypothecation)
or
agrees
to
have
such
collateral
posted
to
a
third
party
custodian
under
a
tri-party
arrangement
that
enables
the
Fund
to
take
control
of
such
collateral
in
the
event
of
a
counterparty
default.
ISDA
Agreements
govern
OTC
derivative
transactions
entered
into
by
the
Fund
and
select
counterparties.
ISDA
Agreements
maintain
provisions
for
general
obligations,
representations,
agreements,
collateral
and
events
of
default
or
termination.
Under
the
Fund’s
separate
and
distinct
ISDA
Agreements
for
forward
currency
contracts,
the
Fund
may
be
required
to
post
collateral
on
derivatives
if
the
Fund
is
in
a
net
liability
position
with
the
counterparty.
Additionally,
counterparties
may
immediately
terminate
derivatives
contracts
if
the
Fund
fails
to
maintain
sufficient
asset
coverage
for
its
contracts.
An
election
to
terminate
early
could
be
material
to
the
financial
statements.
In
limited
circumstances,
the
ISDA
Agreement
may
contain
additional
provisions
that
add
additional
counterparty
protection
beyond
coverage
of
existing
daily
exposure
if
the
counterparty
has
a
decline
in
credit
quality
below
a
predefined
level.
These
amounts,
if
any,
may
be
segregated
with
a
third
party
custodian.
The
gross
fair
value
of
OTC
derivative
instruments,
amounts
available
for
offset,
collateral
received
or
pledged
and
net
exposure
by
instrument
as
of
period
end,
is
disclosed
below.
The
following
table
presents,
as
of
March
31,
2021,
the
gross
and
net
derivative
assets
and
liabilities
that
are
netted
on
the
statement
of
assets
and
liabilities
or
that
are
subject
to
a
master
netting
agreement.
The
table
also
presents
information
about
the
related
collateral
amounts.
Location:
Currency
Contracts
Asset
derivatives:
Unrealized
gain
on
forward
currency
contracts
$
16,649
Liability
derivatives:
Unrealized
loss
on
forward
currency
contracts
$
(103,856)
Location:
Currency
Contracts
Net
realized
gain
on:
Foreign
currency
transactions
$
233,990
Net
change
in
unrealized
appreciation
(depreciation)
on:
Foreign
currency
translations
$
(226
,763)
Gross
Asset
(Liability)
as
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
(Received)
Pledged*
Cash
Collateral
(Received)
Pledged*
Net
Amount
Assets:
Over-the-counter
derivatives**
$
16,649
$
–
$
–
$
16,649
Liabilities:
Over-the-counter
derivatives**
$
(103,856)
$
103,856
$
–
$
–
*
The
actual
financial
instruments
and
cash
collateral
(received)
pledged
may
be
in
excess
of
the
amounts
shown
in
the
table.
The
table
only
reflects
collateral
amounts
up
to
the
amount
of
the
financial
instrument
disclosed
on
the
Statement
of
Assets
and
Liabilities.
**
Over-the-counter
derivatives
may
consist
of
forward
currency
contracts.
The
amounts
disclosed
above
represent
the
exposure
to
one
or
more
counterparties.
For
further
detail
on
individual
derivative
contracts
and
the
corresponding
unrealized
appreciation
(depreciation),
see
the
Schedule
of
Investments.
15
Federal
Income
Tax
As
of
March
31,
2021
,
the
cost
for
federal
income
tax
purposes
is
$53,099,121
and
the
components
of
net
unrealized
appreciation
was
as
follows:
As
of
March
31,
2021
,
accumulated
loss
on
a
tax
basis
were
as
follows:
The
difference
between
components
of
accumulated
loss
on
a
tax
basis
and
the
amounts
reflected
in
the
Statement
of
Assets
and
Liabilities
are
primarily
due
to
grantor
trust
adjustments
and
forward
contracts.
As
of
March
31,
2021
,
the
Fund
had
$521,510
in
short
term
capital
loss
carryforwards
and
$7,967,067
available
in
long
term
capital
loss
carry
forwards
that
have
no
expiration
date.
For
the
year
ended
March
31,
2021
,
the
Fund
recorded
the
following
reclassifications
to
the
accounts
listed
below.
The
reclassifications
were
primarily
as
a
result
of
net
operating
losses.
Underlying
Investments
in
Other
Pooled
Investment
Vehicles
The
Fund
currently
invests
a
portion
of
its
assets
in
the
VanEck
Merk
Gold
Trust
ETF.
The
Fund
may
eliminate
its
investments
at
any
time
if
the
Adviser
determines
that
it
is
in
the
best
interest
of
the
Fund
and
its
shareholders.
The
performance
of
the
Fund
may
be
directly
affected
by
the
performance
of
the
VanEck
Merk
Gold
Trust
ETF.
The
financial
statements
of
the
VanEck
Merk
Gold
Trust
ETF,
including
the
schedule
of
investments,
can
be
found
at
the
Merk
Funds
website
www.merkfunds.
com
,
or
the
Securities
and
Exchange
Commission’s
website
www.sec.gov
and
should
be
read
in
conjunction
with
the
Fund’s
financial
statements.
As
of
March
31,
2021
the
percentage
of
the
Fund’s
net
assets
invested
in
the
VanEck
Merk
Gold
Trust
ETF
was
1.8
%
.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
through
the
date
these
financial
statements
were
issued
have
been
evaluated
for
potential
impact,
and
the
Fund
has
had
no
such
events.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
Gross
Unrealized
Appreciation
$
1,700,263
Gross
Unrealized
Depreciation
(415,267)
Net
Unrealized
Appreciation
$
1,284,996
Capital
and
Other
Losses
Unrealized
Appreciation
Total
$
(8,488,577)
$
1,276,983
$
(7,211,594)
Paid-in-Capital
$
(163,908
)
Accumulated
Loss
$
163,908
16
16
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Merk
Hard
Currency
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
Merk
Hard
Currency
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedule
of
investments,
as
of
March
31,
2021,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
March
31,
2021,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
March
31,
2021
by
correspondence
with
the
custodian
and
broker.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
May
25,
2021
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
17
17
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(866)
637-5386
and
on
the
U.S.
Securities
and
Exchange
Commission’s
(the
“SEC”)
website
at
www.sec.gov.
The
Fund’s
proxy
voting
record
for
the
most
recent
twelve-month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(866)
637-5386
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund
,
you
incur
ongoing
costs,
including
management
fees,
distribution
and/or
service
(12b-1)
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
October
1,
2020
through
March
31,
2021.
Actual
Expenses
–
The
first
line
under
each
share
class
of
the
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
in
this
line,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
first
line
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
the
period.
Hypothetical
Example
for
Comparison
Purposes
–
The
second
line
under
each
share
class
of
the
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
the
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only.
Therefore,
the
second
line
of
the
table
is
useful
in
comparing
ongoing
costs
only
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(866)
637-5386.
Beginning
Account
Value
October
1,
2020
Ending
Account
Value
March
31,
2021
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Investor
Shares
Actual
$
1,000.00
$
1,026.88
$
6.52
1.29%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,018.50
$
6.49
1.29%
Institutional
Shares
Actual
$
1,000.00
$
1,027.48
$
5.26
1.04%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,019.75
$
5.24
1.04%
*
Expenses
are
equal
to
the
Fund’s
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
the
number
of
days
in
the
most
recent
fiscal
half-year
(182)
divided
by
365
to
reflect
the
half-year
period.
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2021
18
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-2008.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
since
2017;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-
2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
19
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019.
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-
2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-
2019.
Todd
Proulx
Born:
1978
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-
2019.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
FOR
MORE
INFORMATION
Merk
Hard
Currency
Fund
®
P.O.
BOX
588
PORTLAND,
ME
04112
208-ANR-0321
INVESTMENT
ADVISER
Merk
Investments
LLC
555
Bryant
Street
#455
Palo
Alto,
CA
94301
www.merkfunds.com
TRANSFER
AGENT
Apex
Fund
Services
P.O.
Box
588
Portland,
ME
04112
www.theapexgroup.com
DISTRIBUTOR
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
ME
04101
www.foreside.com
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
risks,
objectives,
fees
and
expenses,
experience
of
its
management
and
other
information.
ITEM 2. CODE OF ETHICS.
(a) As of the end of the period covered by this report, Forum Funds (the “Registrant”) has adopted a code of ethics, which applies to its Principal Executive Officer and Principal Financial Officer (the “Code of Ethics”).
(c) There have been no amendments to the Registrant’s Code of Ethics during the period covered by this report.
(d) There have been no waivers to the Registrant’s Code of Ethics during the period covered by this report.
(e) Not applicable.
(f) (1) A copy of the Code of Ethics is being filed under Item 13(a) hereto.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees has determined that Mr. Mark Moyer is an "audit committee financial expert" as that term is defined under applicable regulatory guidelines. Mr. Moyer is a non- “interested” Trustee (as defined in Section 2(a)(19) under the Investment Company Act of 1940, as amended (the “Act”)), and serves as Chairman of the Audit Committee.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees - The aggregate fees billed for each of the last two fiscal years (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant for the audit of the Registrant’s annual financial statements, or services that are normally provided by the principal accountant in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $100,500 in 2020 and $100,500 in 2021.
(b) Audit-Related Fees – The aggregate fees billed in the Reporting Periods for assurance and related services rendered by the principal accountant that were reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item 4 were $0 in 2020 and $0 in 2021.
(c) Tax Fees - The aggregate fees billed in the Reporting Periods for professional services rendered by the principal accountant to the Registrant for tax compliance, tax advice and tax planning were $18,000 in 2020 and $18,000 in 2021. These services consisted of review or preparation of U.S. federal, state, local and excise tax returns.
(d) All Other Fees - The aggregate fees billed in the Reporting Periods for products and services provided by the principal accountant to the Registrant, other than the services reported in paragraphs (a) through (c) of this Item, were $0 in 2020 and $0 in 2021.
(e) (1) The Audit Committee reviews and approves in advance all audit and “permissible non-audit services” (as that term is defined by the rules and regulations of the Securities and Exchange Commission) to be rendered to a series of the Registrant (each, a “Series”). In addition, the Audit Committee reviews and approves in advance all “permissible non-audit services” to be provided to an investment adviser (not including any sub-adviser) of a Series, or an affiliate of such investment adviser, that is controlling, controlled by or under common control with the investment adviser and provides on-going services to the Registrant (“Affiliate”), by the Series’ principal accountant if the engagement relates directly to the operations and financial reporting of the Series. The Audit Committee considers whether fees paid by a Series’ investment adviser or an Affiliate to the Series’ principal accountant for audit and permissible non-audit services are consistent with the principal accountant’s independence.
(e) (2) No services included in (b) - (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable
(g) The aggregate non-audit fees billed by the principal accountant for services rendered to the Registrant for the Reporting Periods were $0 in 2020 and $0 in 2021. There were no fees billed in either of the Reporting Periods for non-audit services rendered by the principal accountant to the Registrant’s investment adviser or any Affiliate.
(h) During the Reporting Period, the Registrant's principal accountant provided no non-audit services to the investment advisers or any entity controlling, controlled by or under common control with the investment advisers to the series of the Registrant to which this report relates.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. INVESTMENTS.
(a) Included as part of report to shareholders under Item 1.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
TEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Registrant does not accept nominees to the board of trustees from shareholders.
ITEM 11. CONTROLS AND PROCEDURES
(a) The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act are effective, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in
Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) Code of Ethics.
(a)(3) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Forum Funds
By | /s/ Jessica Chase | |
Jessica Chase, Principal Executive Officer | ||
Date | 6/1/2021 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By | /s/ Jessica Chase | |
Jessica Chase, Principal Executive Officer | ||
Date | 6/1/2021 |
By | /s/ Karen Shaw | |
Karen Shaw, Principal Financial Officer | ||
Date | 6/1/2021 |