As filed with the Securities and Exchange Commission on July 7, 2023
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
Zachary Tackett, Principal Executive Officer
Three Canal Plaza, Suite 600
Portland, Maine 04101
207-347-2000
Date of fiscal year end March 31, 2023
Date of reporting period: April 1, 2022 – March 31, 2023
Explanatory Note: The registrant is filing this amendment to its filing on Form N-CSR for the year ended March 31, 2023, which was originally filed with the Securities and Exchange Commission on June 5, 2023 (Accession Number), solely to include the exhibit 13(a)(4) – Change in Independent Registered Public Accounting Firm.
0001435109-23-000102
ITEM 1. REPORT TO STOCKHOLDERS.
Annual
Report
March
31,
2023
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,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Flexible
Fund
(each
a
“Fund”
and
collectively
the
“Funds”)
as
of
March
31,
2023,
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
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
all
eligible
hedge
fund
strategies;
including
but
not
limited
to
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
23
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
realization
of
a
spread
between
related
instruments
in
which
one
or
multiple
components
of
the
spread
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
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.
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.
A
basis
point
is
a
standard
measure
for
interest
rates
and
other
percentages
in
finance
and
represents
0.01%.
Delta
Hedged
is
a
trading
strategy
that
reduces
the
directional
risk
associated
with
the
price
movements
of
an
underlying
asset.
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.
Fund
holdings
and
sector
allocations
are
subject
to
change
and
should
not
be
considered
a
recommendation
to
buy
or
sell
any
security.
Please
see
the
Schedule
of
Investments
in
this
report
for
a
complete
list
of
fund
holdings.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
1
Absolute
Funds
Dear
Shareholder,
We
are
pleased
to
present
the
Annual
Report
for
the
Absolute
Strategies
Fund,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Capital
Opportunities
Fund
and
the
Absolute
Flexible
Fund
(individually
a
“Fund”
and
collectively
the
“Funds”
or
“Absolute
Funds”)
for
the
year
ended
March
31,
2023
(the
“Period”).
The
Adviser
has
maintained
a
consistent
philosophy
and
discipline
since
inception
in
2005.
The
Adviser
focuses
on
strategies
to
create
various
forms
of
alpha
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,
we
believe
that
our
patient,
disciplined
approach
thrives
during
difficult
environments.
Each
of
the
Funds
have
been
positioned
defensively
and,
as
such,
we
expect
the
Funds
to
perform
well
during
periods
of
market
volatility.
Absolute
Convertible
Arbitrage
Fund
The
Absolute
Convertible
Arbitrage
Fund
returned
1.30%
during
the
period.
By
comparison,
the
HFRX
Fixed
Income
Convertible
Arbitrage
Index
returned
-5.89%.
Secondary
benchmarks,
the
Bloomberg
U.S.
Aggregate
Bond
Index
(-4.78%)
and
the
iBoxx
High
Yield
Index
(-3.25%),
were
down
in
the
period
as
well.
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
Fund’s
performance
benefitted
from
security
selection
as
well
as
a
small
interest
rate
hedge,
which
mitigated
the
impact
of
rising
interest
rates
over
the
last
year.
Among
convertible
arbitrage
trades,
Helix
Energy
Solutions
and
Coupa
Software
were
positive
contributors.
SmileDirectClub,
Inotiv,
and
Fisker
were
among
declining
trades.
The
positive
carry
in
the
portfolio
continues
to
improve
as
new
convertible
deals
get
priced
with
much
higher
coupons
than
in
recent
years.
And,
equally
as
important,
the
rebates
we
receive
on
our
stock
short
positions
continue
to
improve
in
lockstep
with
rising
Federal
Funds
Rates.
Convertible
valuations
are
currently
below
fair
value
and
convertible
spreads
are
significantly
wider
than
high
yield.
With
the
markets
in
a
place
where
it
seems
there
is
an
equal
chance
of
things
going
any
which
way,
we
believe
the
Fund’s
investors
will
find
comfort
in
what
we
believe
are
attractively
priced,
hybrid,
idiosyncratic,
hedged
strategy
with
positive
static
carry
that
has
a
history
of
withstanding
whipsaws
from
macro
events.
Further,
we
believe
that
our
specialization
in
this
market,
and
our
years
of
accumulated
research
in
the
companies
we
follow,
enable
us
to
take
advantage
of
dislocations
in
credit
that
may
increase
if
the
Fed
pushes
the
U.S.
economy
into
recession.
Absolute
Capital
Opportunities
Fund
The
Absolute
Capital
Opportunities
Fund
returned
-5.45%
during
the
period.
By
comparison,
the
HFRX
Equity
Hedge
Index
returned
-2.12%.
Also
notable
is
that
the
S&P
500®
Index
was
down
7.73%
over
the
Period.
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.
Index
options
on
the
S&P
500,
used
for
hedging
purposes,
were
responsible
for
the
largest
gains
and
losses
for
the
Fund
over
the
period.
Among
single
name
positions,
Berkshire
Hathaway,
Quanta
Services,
and
Las
Vegas
Sands
were
larger
gainers.
Amazon,
Meta
Platforms,
and
Walt
Disney
were
detractors.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
2
Absolute
Funds
In
terms
of
stock
selection,
the
Fund
suffered
from
the
long
portfolio’s
under-performance
versus
the
broader
equity
market.
However,
we
continue
to
have
confidence
in
the
Fund’s
portfolio
of
competitively-advantaged
businesses
with
strong
long-term
prospects.
We
believe
stock
price
volatility
does
not
match
the
change
in
intrinsic
value
for
most
of
our
businesses.
If
we
owned
them
privately,
we
would
continue
to
feel
quite
good
about
their
ability
to
compound
capital
over
the
coming
years
and
would
be
pleased
that
many
portfolio
companies
are
improving
their
competitive
positions
within
their
industries
during
this
difficult
economic
backdrop.
In
other
words,
while
we
do
not
like
the
short-
term
underperformance,
we
believe
it
is
a
function
of
market
volatility,
not
a
permanent
impairment
of
capital.
Also,
in
our
opinion
it
was
an
unusual
year
for
our
portfolio
hedges
where
the
cost
was
higher
than
usual.
As
we
adjusted
the
Fund’s
exposures
as
the
broader
equity
market
sold
off
throughout
2022,
we
made
the
judgement
that
we
had
not
yet
reached
a
valuation
level
supportive
of
substantially
reducing
the
downside
protection.
In
this
regard,
we
chose
to
reduce
the
Fund’s
participation
in
a
broad-based
equity
market
rally
and
make
the
Fund
more
dependent
on
relative
upside
performance.
For
approximately
the
last
seven
years,
we
believe
financial
markets
faced
highly
unusual
risks
given
a
near-zero
interest
rate
environment.
While
the
path
of
future
returns
is
always
uncertain,
we
believe
that
we
remain
well
positioned
for
the
ups
and
downs
that
lie
ahead.
Absolute
Strategies
Fund
The
Strategies
Fund
returned
-0.99%
during
the
period.
By
comparison,
the
HFRX
Global
Hedge
Fund
Index
returned
-3.10%.
The
Fund
performed
quite
well
during
the
difficult
2022
calendar
year,
returning
8.48%,
compared
to
-18.11%
for
the
S&P
500
Index
and
-4.41%
for
the
HFRX
Global
Hedge
Fund
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
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.
During
the
period,
the
Fund
was
positioned
with
an
overall
net
short
position
which
helped
performance.
Largest
gainers
were
index
futures
shorts,
while
certain
option
hedges
detracted
from
performance.
Allocations
to
the
Absolute
Convertible
Opportunities
Fund
provided
positive
performance,
while
the
allocations
to
Absolute
Capital
Opportunities
and
Absolute
Select
Value
Funds
declined
during
the
period.
This
defensive
positioning
was
due
to
a
dramatic
overvaluation
of
equity
markets
following
years
of
government
stimulus
and
money
printing.
We
believe
markets
continue
to
be
highly
overvalued
and
are
in
the
midst
of
a
lengthy
bear
market
cycle
that
could
last
many
years.
The
Adviser
believes
that
by
many
measures
markets
continue
to
be
priced
well
beyond
the
debt
and
valuation
levels
of
1929
and
1999.
On
those
fronts,
we
may
have
reached
the
end
of
a
larger
financial
cycle
that
has
accumulated
over
the
last
20+
years
of
money
printing,
and
has
central
banks
completely
cornered.
From
a
technical
standpoint,
the
end
of
a
market
cycle
that
dates
back
many
decades
could
be
reversing.
We
intend
to
maintain
an
aggressive
short
position
during
this
cycle
while
seeking
to
generate
positive
returns
during
volatile
periods,
and
improved
returns
compared
to
recent
years.
Absolute
Flexible
Fund
The
Absolute
Flexible
Fund
was
launched
on
June
30,
2022.
From
that
date
until
March
31,
2023
the
Fund
returned
5.37%.
By
comparison,
the
Bloomberg
U.S.
Aggregate
Bond
Index
returned
-0.09%
and
the
S&P
500
Index
returned
9.98%.
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
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
3
Absolute
Funds
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
bulk
of
the
performance
was
driven
by
price
appreciation
of
convertible
securities
held,
both
on
an
outright
basis
and
relative
to
the
underlying
equity
hedge.
Several
securities
in
the
portfolio
were
of
companies
that
were
taken
over
for
cash
which
also
contributed
to
positive
performance.
Helix
Energy
Solutions,
Veritone,
and
Coupa
Software
were
among
larger
positive
contributors.
Fisker,
Lumentum,
and
Five9
were
among
negative
contributors.
The
Fund
utilizes
a
flexible
approach
to
investing
in
convertible
bonds
where
the
exposures
can
range
from
long
only
to
partially
hedged
to
fully
delta
hedged.
Delta
hedging
attempts
to
remove
the
equity
sensitivity
from
the
convertible
bonds.
The
Fund
benefitted
by
having
a
long
bias
during
the
period
as
convertible
prices
appreciated.
Sincerely,
Absolute
Investment
Advisers
LLC
ABSOLUTE
STRATEGIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2023
4
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
U.S.
Aggregate
Bond
Index
("U.S.
Aggregate
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
U.S.
Aggregate
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
all
eligible
hedge
fund
strategies;
including
but
not
limited
to
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
23
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
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.
For
the
most
recent
month-end
performance,
please
call
(888)
992-2765.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
2.91%
and
the
total
annual
fund
operating
expense
ratio
after
fee
waivers
and/or
reimbursement
(net)
is
2.28%.
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
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Fund
as
a
result
of
the
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
to
1.99%
for
Institutional
Shares,
through
August
1,
2023
(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
(other
than
advisory
fees
waived
by
the
Adviser
related
to
the
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
Absolute)
and
expenses
reimbursed
by
the
Adviser
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
Average
Annual
Total
Returns
Periods
Ended
March
31,
2023
One
Year
Five
Year
Ten
Year
Absolute
Strategies
Fund
Institutional
Shares
-0.99%
-3.00%
-2.28%
S&P
500®
Index
-7.73%
11.19%
12.24%
Bloomberg
U.S.
Aggregate
Bond
Index
-4.78%
0.91%
1.36%
HFRX
Global
Hedge
Fund
Index
-3.10%
1.61%
1.45%
MSCI
World
Index
-7.02%
8.01%
8.85%
ABSOLUTE
STRATEGIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2023
5
Absolute
Funds
waiver
or
expense
reimbursement,
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(after
the
recoupment
has
been
taken
into
account)
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
or
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
The
Adviser
has
contractually
agreed
to
waive
its
investment
advisory
fees
related
to
any
Fund
assets
invested
in
pooled
vehicles
sponsored
by
it.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
year,
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.
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2023
6
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”),
the
HFRX
Equity
Market
Neutral
Index
("HFRX
Equity
Market
Neutral")
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
HFRX
Equity
Market
Neutral
measures
the
performance
of
an
index
of
strategies
that
employ
sophisticated
quantitative
techniques
of
analyzing
price
data
to
ascertain
information
about
future
price
movement
and
relationships
between
securities
and
select
securities
for
purchase
and
sale.
These
can
include
both
Factor-based
and
Statistical
Arbitrage/Trading
strategies.
Factor-based
investment
strategies
include
strategies
in
which
the
investment
thesis
is
predicated
on
the
systematic
analysis
of
common
relationships
between
securities.
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,
HFRX
Equity
Market
Neutral
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.
For
the
most
recent
month-end
performance,
please
call
(888)
992-2765.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.79%
and
the
total
annual
fund
operating
expense
ratio
after
fee
waivers
and/or
reimbursement
(net)
is
1.63%.
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
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Fund
as
a
result
of
the
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
to
1.49%,
through
August
1,
2023
(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
(other
than
advisory
fees
waived
by
the
Adviser
related
to
the
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
Absolute)
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
(after
the
recoupment
has
been
taken
into
account)
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
or
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
Average
Annual
Total
Returns
Periods
Ended
March
31,
2023
One
Year
Five
Year
Since
Inception
12/30/15
Absolute
Capital
Opportunities
Fund
-5.45%
-0.78%
2.59%
HFRX
Equity
Hedge
Index
-2.12%
2.56%
3.26%
HFRX
Equity
Market
Neutral
Index
-0.31%
-1.80%
-1.64%
S&P
500®
Index
-7.73%
11.19%
12.03%
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2023
7
Absolute
Funds
waived/reimbursed.
The
Adviser
has
contractually
agreed
to
waive
its
investment
advisory
fees
related
to
any
Fund
assets
invested
in
pooled
vehicles
sponsored
by
it.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
year,
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.
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2023
8
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
U.S.
Aggregate
Bond
Index
("U.S.
Aggregate
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
realization
of
a
spread
between
related
instruments
in
which
one
or
multiple
components
of
the
spread
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
U.S.
Aggregate
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
U.S.
Aggregate
Bond
Index,
iBoxx
High
Yield
Index
and
S&P
500
Index
*Absolute
Convertible
Arbitrage
Fund
–
Investor
Shares
commenced
operations
on
April
1,
2021.
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.
For
the
most
recent
month-end
performance,
please
call
(888)
992-2765.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.75%
and
2.16%
for
Institutional
Shares
and
Investor
Shares,
respectively,
and
the
total
annual
fund
operating
expense
ratio
after
fee
waivers
and/or
reimbursement
(net)
is
1.51%
and
1.77%
for
Institutional
Shares
and
Investor
Shares,
respectively.
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
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Fund
as
a
result
of
the
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
to
1.20%
and
1.45%
of
the
Institutional
Shares
and
Investor
Shares,
respectively,
through
August
1,
2023
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Average
Annual
Total
Returns
Periods
Ended
March
31,
2023
One
Year
Five
Year
Ten
Year
Absolute
Convertible
Arbitrage
Fund
-
Institutional
Shares
1.30%
4.04%
4.19%
Absolute
Convertible
Arbitrage
Fund
-
Investor
Shares*
1.01%
N/A
N/A
HFRX
Fixed
Income
Convertible
Arbitrage
Index
-5.89%
2.43%
2.12%
Bloomberg
U.S.
Aggregate
Bond
Index
-4.78%
0.91%
1.36%
iBoxx
High
Yield
Index
-3.25%
2.92%
3.49%
S&P
500®
Index
-7.73%
11.19%
12.24%
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2023
9
Absolute
Funds
Trustees.
The
Adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
(other
than
advisory
fees
waived
by
the
Adviser
related
to
the
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
Absolute)
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
(after
the
recoupment
has
been
taken
into
account)
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
or
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
The
Adviser
has
contractually
agreed
to
waive
its
investment
advisory
fees
related
to
any
Fund
assets
invested
in
pooled
vehicles
sponsored
by
it.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
year,
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.
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
FLEXIBLE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2023
10
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
Flexible
Fund
(the”Fund”)
compared
with
the
performance
of
the
benchmarks,
the
Bloomberg
U.S.
Aggregate
Bond
Index
(“U.S.
Aggregate
Index”)
and
the
S&P
500
Index
(“S&P
500”),
since
inception.
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
U.S.
Aggregate
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
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
Flexible
Fund
vs.
Bloomberg
U.S,
Aggregate
Bond
Index
and
S&P
500
Index
*Absolute
Flexible
Fund
–
Institutional
Shares
commenced
operations
on
June
30,
2022.
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.
For
the
most
recent
month-end
performance,
please
call
(888)
992-2765.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
2.36%
and
the
total
annual
fund
operating
expense
ratio
after
fee
waivers
and/or
reimbursement
(net)
is
1.74%.
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
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Fund
as
a
result
of
the
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
to
1.49%,
through
August
1,
2023
(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
(other
than
advisory
fees
waived
by
the
Adviser
related
to
the
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
Absolute)
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
(after
the
recoupment
has
been
taken
into
account)
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
or
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
The
Adviser
has
contractually
agreed
to
waive
its
investment
advisory
fees
related
to
any
Fund
assets
invested
in
pooled
vehicles
sponsored
by
it.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
year,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
The
performance
table
Average
Annual
Total
Returns
Periods
Ended
March
31,
2023
Since
Inception
06/30/22
Absolute
Flexible
Fund
–
Institutional
Shares*
5.37%
Bloomberg
U.S.
Aggregate
Bond
Index
-0.09%
S&P
500®
Index
9.98%
ABSOLUTE
FLEXIBLE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2023
11
Absolute
Funds
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.
ABSOLUTE
STRATEGIES
FUND
PORTFOLIO
HOLDINGS
SUMMARY
(Unaudited)
March
31,
2023
12
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
futures
contracts
and
call
and
put
options
written,
cash, prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
securities
sold
short,
futures
contracts
and
call
and
put
options
written represent
11
.2%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Long
Positions
Asset
Backed
Obligations
0.4%
Investment
Companies
39.7%
Exchange
Traded
Funds
3.8%
Publically
Traded
Partnership
1.0%
Money
Market
Fund
43.4%
Purchased
Options
1.3%
Short
Positions
Common
Stock
(1.3)%
Written
Options
(0.1)%
Other
Assets
&
Liabilities,
Net
*
11.8%
100.0%
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2023
13
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Long
Positions
-
89.6%
Asset
Backed
Obligations
-
0.4%
$
25,899
Adjustable
Rate
Mortgage
Trust,
Series 2005-12 2A1
(a)
3.82%
03/25/36
$
18,862
10,692
Adjustable
Rate
Mortgage
Trust,
Series 2006-1 3A3
(a)
3.77
03/25/36
8,597
6,598
Banc
of
America
Funding
Corp.,
Series 2006-E 2A1
(a)
3.56
06/20/36
5,863
14,822
Banc
of
America
Funding
Corp.,
Series 2007-E 4A1
(a)
3.74
07/20/47
13,591
26,746
CitiMortgage
Alternative
Loan
Trust,
Series 2006-A7 1A12
6.00
12/25/36
22,980
10,261
CitiMortgage
Alternative
Loan
Trust,
Series 2007-A4 1A6
5.75
04/25/37
9,315
8,910
Countrywide
Alternative
Loan
Trust,
Series 2005-50CB 1A1
5.50
11/25/35
7,374
12,330
Countrywide
Home
Loan
Mortgage
Pass-Through
Trust,
Series 2007-HY5 1A1
(a)
4.02
09/25/47
8,903
27,991
IndyMac
Index
Mortgage
Loan
Trust,
Series 2006-AR25 3A1
(a)
3.58
09/25/36
18,553
6,582
JPMorgan
Mortgage
Trust,
Series 2007-A2 4A1M
(a)
3.79
04/25/37
5,284
13,584
Structured
Adjustable
Rate
Mortgage
Loan
Trust,
Series 2007-3 3A1
(a)
3.75
04/25/47
6,494
Total
Asset
Backed
Obligations
(Cost
$104,289)
125,816
Shares
Security
Description
Value
Investment
Companies
-
39.7%
689,143
Absolute
Capital
Opportunities
Fund
(b)(c)
6,574,422
110,377
Absolute
Convertible
Arbitrage
Fund
(b)(c)
1,203,114
510,497
Absolute
Flexible
Fund
(b)
5,268,325
Total
Investment
Companies
(Cost
$13,126,321)
13,045,861
Exchange
Traded
Funds
-
3.8%
39,364
Absolute
Select
Value
ETF
(b)(d)
1,099,830
2,000
ETFMG
Prime
Junior
Silver
Miners
ETF
(d)
22,240
4,000
VanEck
Gold
Miners
ETF/USA
(d)
129,400
Total
Exchange
Traded
Funds
(Cost
$1,259,285)
1,251,470
Publically
Traded
Partnership
-
1.0%
5,000
U.S.
Oil
Fund
LP
ETF
(c)
(Cost
$311,942)
332,200
Money
Market
Fund
-
43.4%
14,250,074
First
American
Treasury
Obligations
Fund,
Class X,
4.72%
(d)(e)
(Cost
$14,250,074)
14,250,074
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
1.3%
Call
Options
Purchased
-
0.7%
500
Invesco
QQQ
Trust
ETF
$
325.00
04/23
$
16,250,000
104,500
300
SPDR
S&P
500
ETF
Trust
415.00
04/23
12,450,000
121,800
Total
Call
Options
Purchased
(Premiums
Paid
$120,339)
226,300
Put
Options
Purchased
-
0.6%
500
Apple,
Inc.
135.00
05/23
8,245,000
31,500
300
Meta
Platforms,
Inc.
150.00
06/23
6,358,200
47,400
200
NVIDIA
Corp.
195.00
05/23
5,555,400
18,600
2,000
Pfizer,
Inc.
27.50
06/23
8,160,000
12,000
500
Pfizer,
Inc.
35.00
01/24
2,040,000
69,000
100
Tesla,
Inc.
90.00
06/23
2,074,600
4,150
Total
Put
Options
Purchased
(Premiums
Paid
$602,882)
182,650
Total
Purchased
Options
(Premiums
Paid
$723,221)
408,950
Total
Long
Positions
-
89.6%
(Cost
$29,775,132)
29,414,371
Total
Short
Positions
-
(1.3)%
(Proceeds
$(274,221))
(414,920)
Total
Written
Options
-
(0.1)%
(Premiums
Received
$(26,391))
(32,100)
Other
Assets
&
Liabilities,
Net
-
11.8%
3,865,806
Net
Assets
-
100.0%
$
32,833,157
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
SECURITIES
SOLD
SHORT
March
31,
2023
14
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Short
Positions
-
(1.3)%
Common
Stock
-
(1.3)%
Consumer
Discretionary
-
(1.3)%
(2,000)
Tesla,
Inc.
(Proceeds
$(274,221))
$
(414,920)
Total
Short
Positions
-
(1.3)%
(Proceeds
$(274,221))
$
(414,920)
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
CALL
OPTIONS
WRITTEN
March
31,
2023
15
Absolute
Funds
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Written
Options
-
(0.1)%
Call
Options
Written
-
(0.1)%
(300)
SPDR
S&P
500
ETF
Trust
(Premiums
Received
$(26,391))
$
425.00
04/23
$
12,750,000
$
(32,100)
Total
Written
Options
-
(0.1)%
(Premiums
Received
$(26,391))
$
(32,100)
ABSOLUTE
STRATEGIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS,
SECURITIES
SOLD
SHORT
AND
CALL
OPTIONS
WRITTEN
March
31,
2023
16
Absolute
Funds
See
Notes
to
Financial
Statements.
At
March
31,
2023
,
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,
2023,
the
value
of
investments
in
affiliated
companies
was
$14,145,691
representing
43.1%
of
net
assets,
and
the
total
cost
was
$14,260,834.
Net
unrealized
depreciation
was
$(115,143),
the
net
change
in
unrealized
depreciation
was
$(623,061),
net
realized
gain
was
$195,801,
total
capital
gain
distributions
were
$20,729
and
investment
income
was
$132,964.
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,
2023.
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.
ETF
Exchange
Traded
Fund
LP
Limited
Partnership
(a)
Variable
rate
security,
the
interest
rate
of
which
adjusts
periodically
based
on
changes
in
current
interest
rates.
Rate
represented
is
as
of
March
31,
2023.
(b)
Affiliated
Company.
(c)
Non-income
producing
security.
(d)
All
or
a
portion
of
this
security
is
held
as
collateral
for
written
options.
(e)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2023.
Contracts
Description
Expiration
Date
Notional
Contract
Value
Value
Net
Unrealized
Depreciation
(85)
S&P
500
E-mini
Future
06/16/23
$
(17,087,750)
$
(17,585,438)
$
(497,688)
Exchange
Traded
Fund
Absolute
Select
Value
ETF
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
3/31/2023
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
9,763
34,601
(5,000)
–
39,364
Cost
$
285,026
$
999,847
$
(150,360)
$
–
$
1,134,513
$
(10,193)
$
–
$
8,417
Value
292,109
–
–
(41,766)
1,099,830
Investment
Companies
Absolute
Capital
Opportunities
Fund
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
3/31/2023
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
689,232
–
(89)
–
689,143
Cost
$
6,892,324
$
–
$
(896)
$
–
$
6,891,428
$
(896)
$
–
$
–
Value
6,954,355
–
–
(379,037)
6,574,422
Absolute
Convertible
Arbitrage
Fund
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
3/31/2023
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
568,483
3,574
(461,680)
–
110,377
Cost
$
5,882,727
$
38,640
$
(4,793,109)
$
–
$
1,128,258
$
206,890
$
20,729
$
17,911
Value
6,321,531
–
–
(363,948)
1,203,114
Absolute
Flexible
Fund
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Appreciation
Balance
3/31/2023
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
–
510,497
–
510,497
Cost
$
–
$
5,106,635
$
–
$
5,106,635
$
–
$
–
$
106,636
Value
$
–
–
–
$
161,690
5,268,325
ABSOLUTE
STRATEGIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS,
SECURITIES
SOLD
SHORT
AND
CALL
OPTIONS
WRITTEN
March
31,
2023
17
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)
and
written
options
which
are
valued
at
their
market
value at
year
end.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Asset
Backed
Obligations
$
–
$
125,816
$
–
$
125,816
Investment
Companies
13,045,861
–
–
13,045,861
Exchange
Traded
Funds
1,251,470
–
–
1,251,470
Publically
Traded
Partnership
332,200
–
–
332,200
Money
Market
Fund
–
14,250,074
–
14,250,074
Purchased
Options
408,950
–
–
408,950
Investments
at
Value
$
15,038,481
$
14,375,890
$
–
$
29,414,371
Total
Assets
$
15,038,481
$
14,375,890
$
–
$
29,414,371
Liabilities
Securities
Sold
Short
Common
Stock
$
(414,920)
$
–
$
–
$
(414,920)
Written
Options
(32,100)
–
–
(32,100)
$
(447,020)
$
–
$
–
$
(447,020)
Other
Financial
Instruments*
Futures
(497,688)
–
–
(497,688)
Total
Liabilities
$
(944,708)
$
–
$
–
$
(944,708)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
PORTFOLIO
HOLDINGS
SUMMARY
(Unaudited)
March
31,
2023
18
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
call
and
put
options
written,
prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
call
and
put
options
written
represent
3.1% of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Common
Stock
84.0%
Money
Market
Funds
19.7%
Purchased
Options
1.6%
Written
Options
(6.3)%
Other
Assets
&
Liabilities,
Net
*
1.0%
100.0%
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2023
19
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
84.0%
Communication
Services
-
13.1%
20,110
Alphabet,
Inc.,
Class A
(a)(b)
$
2,086,010
9,995
Alphabet,
Inc.,
Class C
(a)(b)(c)
1,039,480
6,006
Charter
Communications,
Inc.,
Class A
(a)(c)
2,147,806
7,800
Comcast
Corp.,
Class A
295,698
8,901
Liberty
Media
Corp.-Liberty
SiriusXM
(a)
250,029
18,506
Meta
Platforms,
Inc.,
Class A
(a)(b)(c)
3,922,162
8,091
Motorola
Solutions,
Inc.
2,315,078
37,825
Warner
Bros
Discovery,
Inc.
(a)
571,157
12,627,420
Consumer
Discretionary
-
21.8%
2,800
Alibaba
Group
Holding,
Ltd.,
ADR
(a)
286,104
22,845
Amazon.com,
Inc.
(a)(b)
2,359,660
27,861
CarMax,
Inc.
(a)(b)
1,790,905
2,800
Carvana
Co.
(a)
27,412
12,690
Dollar
Tree,
Inc.
(a)
1,821,650
6,255
Expedia
Group,
Inc.
(a)
606,923
10,610
Fisker,
Inc.
(a)
65,145
99,961
General
Motors
Co.
(b)
3,666,569
47,930
Gildan
Activewear,
Inc.
1,590,797
14,749
Hasbro,
Inc.
791,874
24,550
Las
Vegas
Sands
Corp.
(a)
1,410,398
7,441
Lowe's
Cos.,
Inc.
1,487,977
19,600
MGM
Resorts
International
(c)
870,632
23,182
PACCAR,
Inc.
1,696,922
16,100
Paramount
Global,
Class B
359,191
3,901
Spark
Networks
SE,
ADR
(a)
2,616
21,883
The
Walt
Disney
Co.
(a)(b)(c)
2,191,145
1,000
Wayfair,
Inc.,
Class A
(a)
34,340
21,060,260
Consumer
Staples
-
2.7%
26,770
Philip
Morris
International,
Inc.
2,603,382
Energy
-
3.5%
13,765
EOG
Resources,
Inc.
1,577,882
15,280
Occidental
Petroleum
Corp.
953,930
4,165
Pioneer
Natural
Resources
Co.
850,660
3,382,472
Financials
-
17.9%
4,675
AerCap
Holdings
NV
(a)
262,875
7,255
Ally
Financial,
Inc.
(c)
184,930
10,245
American
Express
Co.
(b)
1,689,913
2,995
Aon
PLC,
Class A
944,294
24,600
Bank
of
America
Corp.
(c)
703,560
8,944
Berkshire
Hathaway,
Inc.,
Class B
(a)(b)
2,761,639
13,066
Blackstone,
Inc.,
Class A
(b)(c)
1,147,717
13,405
Citigroup,
Inc.
628,561
15,600
Intercontinental
Exchange,
Inc.
1,626,924
17,836
JPMorgan
Chase
&
Co.
2,324,209
3,800
PayPal
Holdings,
Inc.
(a)
288,572
5,205
Rocket
Cos.,
Inc.,
Class A
(a)
47,157
40,286
The
Charles
Schwab
Corp.
2,110,181
10,816
Visa,
Inc.,
Class A
2,438,575
4,400
Zillow
Group,
Inc.,
Class C
(a)(c)
195,668
17,354,775
Health
Care
-
3.5%
10,594
Becton
Dickinson
&
Co.
2,622,439
4,740
Johnson
&
Johnson
734,700
2,892
Semler
Scientific,
Inc.
(a)
77,505
3,434,644
Industrials
-
4.7%
46,690
Hayward
Holdings,
Inc.
(a)
547,207
17,742
Jacobs
Solutions,
Inc.
2,084,862
6,868
Keysight
Technologies,
Inc.
(a)
1,109,045
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2023
20
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Industrials
-
4.7%
(continued)
4,275
United
Parcel
Service,
Inc.,
Class B
$
829,307
4,570,421
Information
Technology
-
15.4%
6,885
Activision
Blizzard,
Inc.
(c)
589,287
1,900
Adobe,
Inc.
(a)(c)
732,203
12,135
Analog
Devices,
Inc.
2,393,265
23,808
Apple,
Inc.
(b)
3,925,939
6,218
Arista
Networks,
Inc.
(a)
1,043,753
6,191
Autodesk,
Inc.
(a)
1,288,719
16,310
GoDaddy,
Inc.,
Class A
(a)
1,267,613
7,400
Intel
Corp.
(c)
241,758
9,132
Salesforce,
Inc.
(a)
1,824,391
9,835
Splunk,
Inc.
(a)
942,980
4,590
Spotify
Technology
SA
(a)
613,316
14,863,224
Materials
-
1.4%
10,105
PPG
Industries,
Inc.
1,349,826
Total
Common
Stock
(Cost
$70,521,564)
81,246,424
Shares
Security
Description
Value
Money
Market
Funds
-
19.7%
3,791
Dreyfus
Treasury
Securities
Cash
Management
Fund,
Institutional
Shares,
3.64%
(d)
3,791
19,059,452
First
American
Treasury
Obligations
Fund,
Class X,
4.72%
(d)
19,059,452
Total
Money
Market
Funds
(Cost
$19,063,243)
19,063,243
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
1.6%
Call
Options
Purchased
-
0.6%
19
Alibaba
Group
Holding,
Ltd.
$
180.00
01/24
$
342,000
4,560
49
Alphabet,
Inc.
100.00
06/23
490,000
45,325
393
Bank
of
America
Corp.
33.00
06/23
1,296,900
11,790
748
General
Motors
Co.
50.00
04/23
3,740,000
748
22
Live
Nation
Entertainment,
Inc.
60.00
01/24
132,000
35,860
63
Occidental
Petroleum
Corp.
60.00
06/23
378,000
36,855
1,556
SPDR
S&P
500
ETF
Trust
420.00
04/23
65,352,000
343,876
345
The
Coca-Cola
Co.
62.50
05/23
2,156,250
46,230
Total
Call
Options
Purchased
(Premiums
Paid
$728,704)
525,244
Put
Options
Purchased
-
1.0%
2,137
SPDR
S&P
500
ETF
Trust
393.00
04/23
87,486,643
395,345
6,212
SPDR
S&P
500
ETF
Trust
380.00
04/23
254,313,068
484,536
3,887
SPDR
S&P
500
ETF
Trust
360.00
04/23
159,129,893
108,836
Total
Put
Options
Purchased
(Premiums
Paid
$4,443,031)
988,717
Total
Purchased
Options
(Premiums
Paid
$5,171,735)
1,513,961
Investments,
at
value
-
105.3%
(Cost
$94,756,542)
$
101,823,628
Total
Written
Options
-
(6.3)%
(Premiums
Received
$(7,273,366))
(6,081,268)
Other
Assets
&
Liabilities,
Net
-
1.0%
938,617
Net
Assets
-
100.0%
$
96,680,977
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2023
21
Absolute
Funds
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Written
Options
-
(6.3)%
Call
Options
Written
-
(5.3)%
(52)
Activision
Blizzard,
Inc.
$
95.00
01/24
$
445,068
$
(13,364)
(19)
Adobe,
Inc.
400.00
10/23
732,203
(66,927)
(72)
Ally
Financial,
Inc.
40.00
09/23
183,528
(2,664)
(49)
Alphabet,
Inc.,
Class
C
120.00
06/23
509,600
(7,252)
(393)
Bank
of
America
Corp.
37.00
06/23
1,123,980
(1,965)
(23)
Blackstone,
Inc.
105.00
01/24
202,032
(12,535)
(3)
Charter
Communications,
Inc.
440.00
06/23
107,283
(765)
(8)
Charter
Communications,
Inc.
370.00
01/24
286,088
(37,440)
(74)
Intel
Corp.
35.00
10/23
241,758
(20,424)
(100)
Meta
Platforms,
Inc.
200.00
09/23
2,119,400
(335,000)
(103)
MGM
Resorts
International
50.00
09/23
457,526
(24,823)
(1,675)
SPDR
S&P
500
ETF
Trust
395.00
06/23
68,572,825
(4,325,688)
(104)
The
Walt
Disney
Co.
90.00
01/24
1,041,352
(197,600)
(44)
Zillow
Group,
Inc.
50.00
01/24
195,668
(26,400)
Total
Call
Options
Written
(Premiums
Received
$(4,275,217))
(5,072,847)
Put
Options
Written
-
(1.0)%
(52)
Activision
Blizzard,
Inc.
65.00
01/24
338,000
(7,748)
(14)
Alphabet,
Inc.,
Class
C
85.00
06/24
119,000
(7,910)
(14)
Amazon.com,
Inc.
85.00
01/24
119,000
(7,350)
(13)
Bank
of
America
Corp.
40.00
06/23
52,000
(14,950)
(131)
Bank
of
America
Corp.
30.00
01/24
393,000
(47,815)
(39)
Bristol-Myers
Squibb
Co.
75.00
01/24
292,500
(31,161)
(39)
Bristol-Myers
Squibb
Co.
70.00
01/24
273,000
(20,280)
(43)
Capri
Holdings,
Ltd.
47.50
08/23
204,250
(21,371)
(106)
CVS
Health
Corp.
90.00
01/24
954,000
(175,960)
(69)
Lyft,
Inc.
10.00
01/24
69,000
(17,250)
(28)
Meta
Platforms,
Inc.
95.00
01/24
266,000
(4,060)
(103)
MGM
Resorts
International
35.00
01/24
360,500
(20,909)
(12)
Netflix,
Inc.
220.00
01/24
264,000
(11,460)
(70)
Occidental
Petroleum
Corp.
62.50
01/24
437,500
(53,200)
(63)
Occidental
Petroleum
Corp.
45.00
01/24
283,500
(12,474)
(2,137)
SPDR
S&P
500
ETF
Trust
384.00
04/23
82,060,800
(213,700)
(6,212)
SPDR
S&P
500
ETF
Trust
370.00
04/23
229,844,000
(273,328)
(12)
The
Goldman
Sachs
Group,
Inc.
330.00
09/23
396,000
(29,730)
(83)
Wells
Fargo
&
Co.
40.00
09/23
332,000
(37,765)
Total
Put
Options
Written
(Premiums
Received
$(2,998,149))
(1,008,421)
Total
Written
Options
-
(6.3)%
(Premiums
Received
$(7,273,366))
$
(6,081,268)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2023
22
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,
2023.
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
(a)
Non-income
producing
security.
(b)
All
or
a
portion
of
this
security
is
held
as
collateral
for
written
options.
(c)
Subject
to
call
option
written
by
the
Fund.
(d)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2023.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Common
Stock
Communication
Services
$
12,627,420
$
–
$
–
$
12,627,420
Consumer
Discretionary
21,060,260
–
–
21,060,260
Consumer
Staples
2,603,382
–
–
2,603,382
Energy
3,382,472
–
–
3,382,472
Financials
17,354,775
–
–
17,354,775
Health
Care
3,434,644
–
–
3,434,644
Industrials
4,570,421
–
–
4,570,421
Information
Technology
14,863,224
–
–
14,863,224
Materials
1,349,826
–
–
1,349,826
Money
Market
Funds
–
19,063,243
–
19,063,243
Purchased
Options
1,501,423
12,538
–
1,513,961
Investments
at
Value
$
82,747,847
$
19,075,781
$
–
$
101,823,628
Total
Assets
$
82,747,847
$
19,075,781
$
–
$
101,823,628
Liabilities
Written
Options
(1,625,007)
(4,456,261)
–
(6,081,268)
Total
Liabilities
$
(1,625,007)
$
(4,456,261)
$
–
$
(6,081,268)
Absolute
Convertible
Arbitrage
Fund
Portfolio
Holdings
Summary
(Unaudited)
March
31,
2023
23
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 40.0%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Long
Positions
Corporate
Convertible
Bonds
84.3%
Corporate
Non-Convertible
Bond
0.2%
Investment
Company
1.5%
Money
Market
Fund
7.9%
Short
Positions
Common
Stock
(35.7)%
Other
Assets
&
Liabilities,
Net
*
41.8%
100.0%
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2023
24
Absolute
Funds
See
Notes
to
Financial
Statements.
l
Principal
Security
Description
Rate
Maturity
Value
Long
Positions
-
93.9%
Fixed
Income
Securities
-
84.5%
Corporate
Convertible
Bonds
-
84.3%
Communication
Services
-
4.9%
$
1,000,000
Infinera
Corp.
2.13%
09/01/24
$
1,022,000
10,000,000
Infinera
Corp.
2.50
03/01/27
12,251,827
2,000,000
Infinera
Corp.
(a)
3.75
08/01/28
2,710,000
5,542,000
InterDigital,
Inc.
2.00
06/01/24
5,749,825
5,000,000
InterDigital,
Inc.
(a)
3.50
06/01/27
5,615,000
4,500,000
Q2
Holdings,
Inc.
0.13
11/15/25
3,728,673
6,000,000
Q2
Holdings,
Inc.
(b)
0.75
06/01/26
4,857,000
8,000,000
TechTarget,
Inc.
(c)
8.07
12/15/26
6,216,000
6,000,000
Upwork,
Inc.
0.25
08/15/26
4,730,382
6,200,000
Wayfair,
Inc.
(a)
3.25
09/15/27
5,294,800
52,175,507
Consumer
Discretionary
-
11.7%
8,110,000
Alarm.com
Holdings,
Inc.
(c)
1.40 -
5.07
01/15/26
6,882,832
8,245,000
American
Airlines
Group,
Inc.
(b)
6.50
07/01/25
9,568,322
2,660,000
Carnival
Corp.
(a)
5.75
12/01/27
2,884,770
10,339,000
Cracker
Barrel
Old
Country
Store,
Inc.
0.63
06/15/26
9,330,948
1,250,000
Eventbrite,
Inc.
5.00
12/01/25
1,290,520
6,000,000
Fisker,
Inc.
(a)
2.50
09/15/26
2,931,035
6,000,000
Fiverr
International,
Ltd.
(c)
7.88
11/01/25
5,010,232
7,000,000
Freshpet,
Inc.
(a)
3.00
04/01/28
8,153,250
2,000,000
Groupon,
Inc.
1.13
03/15/26
790,026
9,940,000
IMAX
Corp.
0.50
04/01/26
9,351,645
2,900,000
indie
Semiconductor,
Inc.
(a)
4.50
11/15/27
4,253,331
7,186,000
LCI
Industries
1.13
05/15/26
6,564,411
6,000,000
Live
Nation
Entertainment,
Inc.
(a)
3.13
01/15/29
5,898,000
5,000,000
Lucid
Group,
Inc.
(a)
1.25
12/15/26
2,842,500
10,000,000
Luminar
Technologies,
Inc.
(a)
1.25
12/15/26
6,569,167
5,000,000
Marriott
Vacations
Worldwide
Corp.
(a)
3.25
12/15/27
4,887,500
6,000,000
National
Vision
Holdings,
Inc.
2.50
05/15/25
5,772,000
1,250,000
NCL
Corp.,
Ltd.
2.50
02/15/27
944,375
5,175,000
NCL
Corp.,
Ltd.
1.13
02/15/27
3,706,113
1,000,000
Penn
Entertainment,
Inc.
(b)
2.75
05/15/26
1,442,000
1,000,000
Royal
Caribbean
Cruises,
Ltd.
2.88
11/15/23
1,029,500
2,500,000
Royal
Caribbean
Cruises,
Ltd.
(a)
6.00
08/15/25
3,823,750
648,000
Spirit
Airlines,
Inc.
4.75
05/15/25
1,074,829
5,715,000
Stride,
Inc.
1.13
09/01/27
5,690,908
7,409,000
Topgolf
Callaway
Brands
Corp.
2.75
05/01/26
10,157,739
6,000,000
Virgin
Galactic
Holdings,
Inc.
(a)
2.50
02/01/27
2,880,000
123,729,703
Consumer
Staples
-
2.2%
2,922,000
FTI
Consulting,
Inc.
(b)
2.00
08/15/23
5,705,205
10,680,000
MGP
Ingredients,
Inc.
1.88
11/15/41
12,629,100
5,000,000
The
Chefs'
Warehouse,
Inc.
(a)
2.38
12/15/28
5,123,689
23,457,994
Energy
-
6.9%
8,500,000
Array
Technologies,
Inc.
1.00
12/01/28
9,386,281
9,000,000
Green
Plains,
Inc.
2.25
03/15/27
10,915,016
8,983,000
Helix
Energy
Solutions
Group,
Inc.
(b)
6.75
02/15/26
12,328,745
8,500,000
Northern
Oil
and
Gas,
Inc.
(a)
3.63
04/15/29
9,116,201
7,000,000
Oil
States
International,
Inc.
4.75
04/01/26
7,818,333
9,000,000
Peabody
Energy
Corp.
3.25
03/01/28
13,711,500
6,000,000
Stem,
Inc.
(a)
4.25
04/01/30
6,021,000
3,000,000
Stem,
Inc.
(a)
0.50
12/01/28
1,709,848
2,500,000
Sunnova
Energy
International,
Inc.
(a)
2.63
02/15/28
1,813,800
72,820,724
Financials
-
1.0%
6,000,000
Encore
Capital
Group,
Inc.
(a)
4.00
03/15/29
6,024,000
3,750,000
EZCORP,
Inc.
(a)
3.75
12/15/29
3,701,853
2,000,000
Redfin
Corp.
0.50
04/01/27
1,236,987
10,962,840
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2023
25
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Health
Care
-
18.2%
$
8,000,000
Accuray,
Inc.
3.75%
06/01/26
$
7,140,086
8,000,000
Alphatec
Holdings,
Inc.
0.75
08/01/26
8,550,000
9,000,000
Artivion,
Inc.
4.25
07/01/25
8,140,458
4,997,000
Ascendis
Pharma
A/S
(a)
2.25
04/01/28
4,872,640
2,700,000
Assertio
Holdings,
Inc.
(a)
6.50
09/01/27
4,959,102
4,750,000
Bridgebio
Pharma,
Inc.
2.25
02/01/29
3,074,920
4,115,000
CONMED
Corp.
(b)
2.63
02/01/24
5,075,852
7,880,000
CONMED
Corp.
(a)
2.25
06/15/27
7,844,540
7,250,000
Cutera,
Inc.
(a)
2.25
06/01/28
5,392,890
2,750,000
Cutera,
Inc.
(a)
4.00
06/01/29
2,025,175
7,095,000
Exact
Sciences
Corp.
0.38
03/15/27
6,637,228
3,150,000
Gossamer
Bio,
Inc.
(b)
5.00
06/01/27
869,124
9,000,000
Halozyme
Therapeutics,
Inc.
(a)
1.00
08/15/28
8,527,500
5,000,000
Inotiv,
Inc.
3.25
10/15/27
2,205,237
8,425,000
Insmed,
Inc.
0.75
06/01/28
6,550,028
8,000,000
Integer
Holdings
Corp.
(a)
2.13
02/15/28
8,748,000
7,500,000
Integra
LifeSciences
Holdings
Corp.
0.50
08/15/25
7,331,886
5,416,000
Ironwood
Pharmaceuticals,
Inc.
0.75
06/15/24
5,481,569
7,500,000
Jazz
Investments
I,
Ltd.
2.00
06/15/26
8,343,750
4,615,000
Lantheus
Holdings,
Inc.
(a)
2.63
12/15/27
6,002,051
9,000,000
MannKind
Corp.
2.50
03/01/26
9,380,732
11,000,000
NextGen
Healthcare,
Inc.
(a)
3.75
11/15/27
10,903,272
4,856,000
Novocure,
Ltd.
(c)
3.47 -
5.30
11/01/25
4,222,246
4,882,000
NuVasive,
Inc.
0.38
03/15/25
4,323,011
9,000,000
Omnicell,
Inc.
0.25
09/15/25
8,316,000
5,000,000
Pacira
BioSciences,
Inc.
0.75
08/01/25
4,596,875
7,826,000
PetIQ,
Inc.
4.00
06/01/26
6,859,489
5,626,000
SmileDirectClub,
Inc.
(a)(c)
2.76 -
59.01
02/01/26
590,730
3,086,000
Tabula
Rasa
HealthCare,
Inc.
1.75
02/15/26
2,571,883
9,000,000
Varex
Imaging
Corp.
4.00
06/01/25
9,969,075
11,255,000
Veradigm,
Inc.
(b)
0.88
01/01/27
12,690,012
192,195,361
Industrials
-
10.8%
9,000,000
Axon
Enterprise,
Inc.
(a)
0.50
12/15/27
10,588,500
8,274,000
Camtek,
Ltd./Israel
(a)(c)
3.57 -
6.92
12/01/26
6,875,694
1,280,000
Chart
Industries,
Inc.
1.00
11/15/24
2,766,720
8,120,000
CryoPort,
Inc.
(a)
0.75
12/01/26
6,348,003
1,500,000
FARO
Technologies,
Inc.
(a)
5.50
02/01/28
1,441,692
7,500,000
GoPro,
Inc.
1.25
11/15/25
6,794,314
9,000,000
Itron,
Inc.
(c)
15.33
03/15/26
7,492,500
10,139,000
John
Bean
Technologies
Corp.
0.25
05/15/26
9,292,393
1,608,000
Kaman
Corp.
3.25
05/01/24
1,524,384
5,620,000
KBR,
Inc.
(b)
2.50
11/01/23
12,231,930
9,982,000
Mesa
Laboratories,
Inc.
(b)
1.38
08/15/25
9,277,650
8,400,000
Patrick
Industries,
Inc.
1.75
12/01/28
7,627,200
11,000,000
The
Greenbrier
Cos.,
Inc.
2.88
04/15/28
9,388,500
5,000,000
The
Middleby
Corp.
1.00
09/01/25
6,226,322
9,096,000
Winnebago
Industries,
Inc.
1.50
04/01/25
10,046,532
9,500,000
Xometry,
Inc.
1.00
02/01/27
6,366,900
114,289,234
Information
Technology
-
25.4%
8,000,000
Altair
Engineering,
Inc.
(a)
1.75
06/15/27
9,356,000
8,000,000
Alteryx,
Inc.
1.00
08/01/26
6,820,000
3,000,000
Bandwidth,
Inc.
0.25
03/01/26
2,342,290
7,240,000
Bandwidth,
Inc.
0.50
04/01/28
4,706,000
10,710,000
Bentley
Systems,
Inc.
0.38
07/01/27
9,092,790
3,500,000
Blackline,
Inc.
0.13
08/01/24
3,852,503
7,500,000
Blackline,
Inc.
(c)
3.26
03/15/26
6,393,750
9,348,000
Box,
Inc.
(c)
0.00
01/15/26
10,932,486
7,500,000
Confluent,
Inc.
(c)
6.45 -
7.46
01/15/27
5,961,594
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2023
26
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Information
Technology
-
25.4%
(continued)
$
8,000,000
CyberArk
Software,
Ltd.
(c)
0.00
11/15/24
$
8,991,934
7,000,000
Digital
Ocean
Holdings,
Inc.
(c)
6.58
12/01/26
5,531,825
9,700,000
Dropbox,
Inc.
(c)
4.11
03/01/26
8,710,203
7,186,000
Envestnet,
Inc.
0.75%
08/15/25
6,516,804
4,690,000
Envestnet,
Inc.
(a)
2.63
12/01/27
4,922,155
400,000
Everbridge,
Inc.
0.13
12/15/24
364,500
5,000,000
Everbridge,
Inc.
(c)
20.27
03/15/26
4,159,375
8,000,000
Fastly,
Inc.
(c)
1.84 -
8.45
03/15/26
6,384,000
9,075,000
Five9,
Inc.
0.50
06/01/25
8,376,736
6,500,000
Guidewire
Software,
Inc.
(b)
1.25
03/15/25
6,366,750
4,070,000
Impinj,
Inc.
1.13
05/15/27
5,797,091
5,797,000
LivePerson,
Inc.
(c)
5.05
12/15/26
3,478,200
10,000,000
Lumentum
Holdings,
Inc.
0.50
12/15/26
8,700,000
6,500,000
Magnite,
Inc.
0.25
03/15/26
5,258,038
2,450,000
Mitek
Systems,
Inc.
0.75
02/01/26
2,022,205
7,000,000
Model
N,
Inc.
2.63
06/01/25
8,526,875
2,000,000
Model
N,
Inc.
(a)
1.88
03/15/28
2,054,079
5,500,000
ON
Semiconductor
Corp.
(a)
0.50
03/01/29
5,745,343
8,000,000
Parsons
Corp.
0.25
08/15/25
8,856,000
11,107,000
Perficient,
Inc.
0.13
11/15/26
8,879,921
2,000,000
Porch
Group,
Inc.
(a)
0.75
09/15/26
1,090,000
10,150,000
Progress
Software
Corp.
1.00
04/15/26
11,093,950
9,360,000
PROS
Holdings,
Inc.
2.25
09/15/27
8,952,840
3,000,000
Rapid7,
Inc.
2.25
05/01/25
3,085,500
1,164,000
Rapid7,
Inc.
0.25
03/15/27
1,016,793
10,850,000
Semtech
Corp.
(a)
1.63
11/01/27
9,960,300
10,003,000
SMART
Global
Holdings,
Inc.
2.25
02/15/26
10,947,033
5,000,000
Unity
Software,
Inc.
(c)
1.77 -
2.05
11/15/26
3,897,500
3,200,000
Veeco
Instruments,
Inc.
3.75
06/01/27
5,317,446
8,625,000
Verint
Systems,
Inc.
0.25
04/15/26
7,670,859
7,000,000
Veritone,
Inc.
1.75
11/15/26
4,822,226
5,000,000
Wolfspeed,
Inc.
0.25
02/15/28
4,190,000
2,000,000
Wolfspeed,
Inc.
(a)
1.88
12/01/29
1,781,000
10,675,000
Workiva,
Inc.
1.13
08/15/26
15,080,360
268,005,254
Materials
-
1.9%
3,700,000
Century
Aluminum
Co.
2.75
05/01/28
3,022,153
7,000,000
MP
Materials
Corp.
(a)
0.25
04/01/26
6,612,633
9,389,000
SSR
Mining,
Inc.
2.50
04/01/39
10,327,900
19,962,686
Utilities
-
1.3%
12,266,000
Ormat
Technologies,
Inc.
(a)
2.50
07/15/27
13,768,585
Total
Corporate
Convertible
Bonds
(Cost
$941,651,769)
891,367,888
Corporate
Non-Convertible
Bond
-
0.2%
Information
Technology
-
0.2%
2,000,000
Alteryx,
Inc.
(a)
(Cost
$2,007,194)
8.75
03/15/28
2,014,740
Total
Fixed
Income
Securities
(Cost
$943,658,963)
893,382,628
Shares
Security
Description
Value
Investment
Company
-
1.5%
1,531,490
Absolute
Flexible
Fund
(d)
(Cost
$15,319,907)
15,804,975
Money
Market
Fund
-
7.9%
83,203,468
First
American
Treasury
Obligations
Fund,
Class X,
4.72%
(b)(e)
(Cost
$83,203,468)
83,203,468
Total
Long
Positions
-
93.9%
(Cost
$1,042,182,338)
992,391,071
Total
Short
Positions
-
(35.7)%
(Proceeds
$(440,215,147))
(376,998,903)
Other
Assets
&
Liabilities,
Net
-
41.8%
441,926,214
Net
Assets
-
100.0%
$
1,057,318,382
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2023
27
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Short
Positions
-
(35.7)%
Common
Stock
-
(35.7)%
Communication
Services
-
(1.3)%
(1,124,650)
Infinera
Corp.
$
(8,727,284)
(47,937)
InterDigital,
Inc.
(3,494,608)
(34,115)
Q2
Holdings,
Inc.
(839,911)
(21,500)
TechTarget,
Inc.
(776,580)
(13,838,383)
Consumer
Discretionary
-
(5.3)%
(18,938)
Alarm.com
Holdings,
Inc.
(952,203)
(375,353)
American
Airlines
Group,
Inc.
(5,536,457)
(154,000)
Carnival
Corp.
(1,563,100)
(31,016)
Cracker
Barrel
Old
Country
Store,
Inc.
(3,523,417)
(51,000)
Eventbrite,
Inc.,
Class A
(437,580)
(166,851)
Fisker,
Inc.
(1,024,465)
(2,724)
Fiverr
International,
Ltd.
(95,122)
(76,200)
Freshpet,
Inc.
(5,043,678)
(5,500)
Groupon,
Inc.
(23,155)
(172,376)
IMAX
Corp.
(3,306,172)
(288,296)
indie
Semiconductor,
Inc.,
Class A
(3,041,523)
(22,000)
LCI
Industries
(2,417,140)
(36,639)
Live
Nation
Entertainment,
Inc.
(2,564,730)
(54,590)
Lucid
Group,
Inc.
(438,904)
(279,411)
Luminar
Technologies,
Inc.
(1,813,377)
(17,204)
Marriott
Vacations
Worldwide
Corp.
(2,320,131)
(92,012)
National
Vision
Holdings,
Inc.
(1,733,506)
(103,040)
Norwegian
Cruise
Line
Holdings,
Ltd.
(1,385,888)
(34,400)
Penn
Entertainment,
Inc.
(1,020,304)
(44,800)
Royal
Caribbean
Cruises,
Ltd.
(2,925,440)
(45,600)
Spirit
Airlines,
Inc.
(782,952)
(68,000)
Stride,
Inc.
(2,669,000)
(304,000)
Topgolf
Callaway
Brands
Corp.
(6,572,480)
(21,347)
Upwork,
Inc.
(241,648)
(351,822)
Virgin
Galactic
Holdings,
Inc.
(1,424,879)
(76,500)
Wayfair,
Inc.,
Class A
(2,627,010)
(55,484,261)
Consumer
Staples
-
(1.6)%
(27,839)
FTI
Consulting,
Inc.
(5,494,027)
(85,078)
MGP
Ingredients,
Inc.
(8,228,744)
(83,851)
The
Chefs'
Warehouse,
Inc.
(2,855,126)
(16,577,897)
Energy
-
(3.9)%
(290,536)
Array
Technologies,
Inc.
(6,356,928)
(214,000)
Green
Plains,
Inc.
(6,631,860)
(776,257)
Helix
Energy
Solutions
Group,
Inc.
(6,008,229)
(156,592)
Northern
Oil
and
Gas,
Inc.
(4,752,567)
(361,508)
Oil
States
International,
Inc.
(3,011,362)
(402,649)
Peabody
Energy
Corp.
(10,307,814)
(652,344)
Stem,
Inc.
(3,698,791)
(48,600)
Sunnova
Energy
International,
Inc.
(759,132)
(41,526,683)
Financials
-
(0.5)%
(64,000)
Encore
Capital
Group,
Inc.
(3,228,800)
(250,000)
EZCORP,
Inc.,
Class A
(2,150,000)
(7,900)
Redfin
Corp.
(71,574)
(5,450,374)
Health
Care
-
(7.7)%
(531,500)
Accuray,
Inc.
(1,578,555)
(263,643)
Alphatec
Holdings,
Inc.
(4,112,831)
(189,240)
Artivion,
Inc.
(2,479,044)
(20,100)
Ascendis
Pharma
A/S,
ADR
(2,155,122)
(544,000)
Assertio
Holdings,
Inc.
(3,465,280)
(31,200)
Bridgebio
Pharma,
Inc.
(517,296)
(65,178)
CONMED
Corp.
(6,769,387)
(130,100)
Cutera,
Inc.
(3,072,962)
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2023
28
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Health
Care
-
(7.7)%
(continued)
(32,400)
Exact
Sciences
Corp.
$
(2,197,044)
(132,000)
Gossamer
Bio,
Inc.
(166,320)
(106,500)
Halozyme
Therapeutics,
Inc.
(4,067,235)
(75,600)
Inotiv,
Inc.
(327,348)
(186,000)
Insmed,
Inc.
(3,171,300)
(63,767)
Integer
Holdings
Corp.
(4,941,943)
(54,240)
Integra
LifeSciences
Holdings
Corp.
(3,113,918)
(173,767)
Ironwood
Pharmaceuticals,
Inc.
(1,828,029)
(32,490)
Jazz
Pharmaceuticals
PLC
(4,754,262)
(42,300)
Lantheus
Holdings,
Inc.
(3,492,288)
(1,180,000)
MannKind
Corp.
(4,838,000)
(261,519)
NextGen
Healthcare,
Inc.
(4,553,046)
(9,300)
Novocure,
Ltd.
(559,302)
(10,700)
NuVasive,
Inc.
(442,017)
(41,708)
Omnicell,
Inc.
(2,447,008)
(30,298)
Pacira
BioSciences,
Inc.
(1,236,461)
(91,700)
PetIQ,
Inc.
(1,049,048)
(81,000)
SmileDirectClub,
Inc.
(34,830)
(9,396)
Tabula
Rasa
HealthCare,
Inc.
(52,524)
(288,507)
Varex
Imaging
Corp.
(5,247,942)
(654,000)
Veradigm,
Inc.
(8,534,700)
(81,205,042)
Industrials
-
(4.8)%
(29,266)
Axon
Enterprise,
Inc.
(6,580,460)
(65,842)
Camtek,
Ltd./Israel
(1,866,621)
(20,950)
Chart
Industries,
Inc.
(2,627,130)
(13,624)
CryoPort,
Inc.
(326,976)
(14,000)
FARO
Technologies,
Inc.
(344,540)
(318,000)
GoPro,
Inc.,
Class A
(1,599,540)
(26,173)
Itron,
Inc.
(1,451,293)
(26,900)
John
Bean
Technologies
Corp.
(2,939,901)
(2,800)
Kaman
Corp.
(64,008)
(214,952)
KBR,
Inc.
(11,833,108)
(13,800)
Mesa
Laboratories,
Inc.
(2,411,274)
(56,000)
Patrick
Industries,
Inc.
(3,853,360)
(117,902)
The
Greenbrier
Cos.,
Inc.
(3,792,907)
(29,100)
The
Middleby
Corp.
(4,266,351)
(91,500)
Winnebago
Industries,
Inc.
(5,279,550)
(111,121)
Xometry,
Inc.,
Class A
(1,663,481)
(50,900,500)
Information
Technology
-
(9.0)%
(75,869)
Altair
Engineering,
Inc.,
Class A
(5,470,914)
(8,220)
Alteryx,
Inc.,
Class A
(483,665)
(21,534)
Bandwidth,
Inc.,
Class A
(327,317)
(57,106)
Bentley
Systems,
Inc.,
Class B
(2,454,987)
(44,409)
BlackLine,
Inc.
(2,982,064)
(271,041)
Box,
Inc.
(7,261,188)
(16,940)
Confluent,
Inc.,
Class A
(407,746)
(27,905)
CyberArk
Software,
Ltd.
(4,129,382)
(10,070)
DigitalOcean
Holdings,
Inc.
(394,442)
(95,533)
Dropbox,
Inc.,
Class A
(2,065,423)
(57,900)
Envestnet,
Inc.
(3,396,993)
(1,000)
Everbridge,
Inc.
(34,670)
(13,164)
Fastly,
Inc.,
Class A
(233,793)
(20,185)
Five9,
Inc.
(1,459,174)
(19,740)
Guidewire
Software,
Inc.
(1,619,667)
(28,100)
Impinj,
Inc.
(3,808,112)
(19,044)
LivePerson,
Inc.
(83,984)
(47,373)
Lumentum
Holdings,
Inc.
(2,558,616)
(13,000)
Magnite,
Inc.
(120,380)
(59,000)
Mitek
Systems,
Inc.
(565,810)
(146,010)
Model
N,
Inc.
(4,886,955)
(37,100)
ON
Semiconductor
Corp.
(3,054,072)
(117,642)
Parsons
Corp.
(5,263,303)
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2023
29
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Information
Technology
-
(9.0)%
(continued)
(19,949)
Perficient,
Inc.
$
(1,440,118)
(29,000)
Porch
Group,
Inc.
(41,470)
(117,400)
Progress
Software
Corp.
(6,744,630)
(136,000)
PROS
Holdings,
Inc.
(3,726,400)
(19,151)
Rapid7,
Inc.
(879,222)
(191,200)
Semtech
Corp.
(4,615,568)
(293,468)
SMART
Global
Holdings,
Inc.
(5,059,388)
(4,072)
Unity
Software,
Inc.
(132,096)
(188,400)
Veeco
Instruments,
Inc.
(3,980,892)
(54,500)
Verint
Systems,
Inc.
(2,029,580)
(76,272)
Veritone,
Inc.
(444,666)
(39,692)
Wolfspeed,
Inc.
(2,577,995)
(97,798)
Workiva,
Inc.
(10,015,493)
(94,750,175)
Materials
-
(0.8)%
(140,000)
Century
Aluminum
Co.
(1,400,000)
(90,981)
MP
Materials
Corp.
(2,564,754)
(309,500)
SSR
Mining,
Inc.
(4,679,640)
(8,644,394)
Utilities
-
(0.8)%
(101,701)
Ormat
Technologies,
Inc.
(8,621,194)
Total
Common
Stock
(Proceeds
$(440,215,147))
(376,998,903)
Total
Short
Positions
-
(35.7)%
(Proceeds
$(440,215,147))
$
(376,998,903)
Absolute
Convertible
Arbitrage
Fund
Notes
to
Schedules
of
Investments
and
Securities
Sold
Short
March
31,
2023
30
Absolute
Funds
See
Notes
to
Financial
Statements.
At
March
31,
2023,
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
Convertible
Arbitrage
Fund’s
Schedule
of
Investments.
Transactions
during
the
period
with
affiliates
were
as
follows:
At
March
31,
2023,
the
value
of
investments
in
affiliated
companies
was
$15,804,975
representing
1.5%
of
net
assets,
and
the
total
cost
was
$15,319,907.
Net
unrealized
appreciation/(depreciation)
was
$485,068,
the
net
change
in
unrealized
appreciation/(depreciation)
was
$485,068
net
realized
gain/(loss)
was
$0,
total
capital
gain
distributions
were
$0
and
investment
income
was
$319,907.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
liabilities
as
of
March
31,
2023.
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
PLC
Public
Limited
Company
(a)
Security
exempt
from
registration
under
Rule
144A
under
the
Securities
Act
of
1933.
At
the
period
end,
the
value
of
these
securities
amounted
to
$234,678,118
or
22.2%
of
net
assets.
(b)
All
or
a
portion
of
this
security
is
held
as
collateral
for
securities
sold
short.
(c)
Zero
coupon
bond.
Interest
rate
presented
is
yield
to
maturity.
(d)
Affiliated
Company.
(e)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2023.
Contracts
Description
Expiration
Date
Notional
Contract
Value
Value
Net
Unrealized
Depreciation
(600)
US
Treasury
5
Year
Note
Future
06/30/23
$
(64,353,950)
$
(65,704,688)
$
(1,350,738)
Investment
Company
Absolute
Flexible
Fund
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Appreciation/
(Depreciation)
Balance
3/31/2023
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
–
1,531,490
–
1,531,490
Cost
$
–
$
15,319,907
$
–
$
15,319,907
$
–
$
–
$
319,907
Value
$
–
–
–
$
485,068
15,804,975
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Corporate
Convertible
Bonds
$
–
$
891,367,888
$
–
$
891,367,888
Corporate
Non-Convertible
Bond
–
2,014,740
–
2,014,740
Investment
Company
15,804,975
–
–
15,804,975
Money
Market
Fund
–
83,203,468
–
83,203,468
Investments
at
Value
$
15,804,975
$
976,586,096
$
–
$
992,391,071
Total
Assets
$
15,804,975
$
976,586,096
$
–
$
992,391,071
Liabilities
Securities
Sold
Short
Common
Stock
$
(376,998,903)
$
–
$
–
$
(376,998,903)
Other
Financial
Instruments*
Futures
(1,350,738)
–
–
(1,350,738)
Total
Liabilities
$
(378,349,641)
$
–
$
–
$
(378,349,641)
Absolute
Flexible
Fund
Portfolio
Holdings
Summary
(Unaudited)
March
31,
2023
31
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
securities
sold
short,
cash,
prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
securities
sold
short
represent
15.3%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Long
Positions
Corporate
Convertible
Bonds
98.4%
Money
Market
Fund
0.8%
Short
Positions
Common
Stock
(14.5)%
Other
Assets
&
Liabilities,
Net
*
15.3%
100.0%
Absolute
Flexible
Fund
Schedule
of
Investments
March
31,
2023
32
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Long
Positions
-99.2%
Corporate
Convertible
Bonds
-
98.4%
Communication
Services
-
15.5%
$
1,000,000
Infinera
Corp.
2.13%
09/01/24
$
1,022,000
1,000,000
Q2
Holdings,
Inc.
(a)
0.13
11/15/25
828,594
1,000,000
TechTarget,
Inc.
(a)(b)
4.95 -
5.66
12/15/26
777,000
890,000
Upwork,
Inc.
0.25
08/15/26
701,673
3,329,267
Consumer
Discretionary
-
6.7%
1,000,000
Fisker,
Inc.
(c)
2.50
09/15/26
488,506
1,000,000
IMAX
Corp.
0.50
04/01/26
940,809
1,429,315
Energy
-
6.4%
1,000,000
Helix
Energy
Solutions
Group,
Inc.
6.75
02/15/26
1,372,453
Health
Care
-
8.6%
1,000,000
Accuray,
Inc.
(a)
3.75
06/01/26
892,511
250,000
Bridgebio
Pharma,
Inc.
2.25
02/01/29
161,838
900,000
PetIQ,
Inc.
4.00
06/01/26
788,850
1,843,199
Industrials
-
13.4%
1,000,000
CryoPort,
Inc.
(a)(c)
0.75
12/01/26
781,774
1,000,000
Itron,
Inc.
(b)
5.44 -
5.53
03/15/26
832,500
632,000
John
Bean
Technologies
Corp.
0.25
05/15/26
579,228
1,000,000
Xometry,
Inc.
1.00
02/01/27
670,200
2,863,702
Information
Technology
-
47.8%
700,000
Altair
Engineering,
Inc.
(c)
1.75
06/15/27
818,650
1,100,000
Alteryx,
Inc.
1.00
08/01/26
937,750
1,000,000
Bandwidth,
Inc.
0.25
03/01/26
780,763
1,000,000
Bentley
Systems,
Inc.
0.38
07/01/27
849,000
1,000,000
Confluent,
Inc.
(b)
6.45
01/15/27
794,879
562,000
Dropbox,
Inc.
(b)
2.33 -
2.93
03/01/26
504,653
1,000,000
Envestnet,
Inc.
0.75
08/15/25
906,875
500,000
Fastly,
Inc.
(b)
8.43
03/15/26
399,000
1,000,000
Five9,
Inc.
(a)
0.50
06/01/25
923,056
1,000,000
Lumentum
Holdings,
Inc.
0.50
12/15/26
870,000
1,000,000
Magnite,
Inc.
0.25
03/15/26
808,929
1,000,000
Perficient,
Inc.
0.13
11/15/26
799,489
1,258,000
Veritone,
Inc.
1.75
11/15/26
866,623
10,259,667
Total
Corporate
Convertible
Bonds
(Cost
$20,991,453)
21,097,603
Shares
Security
Description
Value
Money
Market
Fund
-
0.8%
162,458
First
American
Treasury
Obligations
Fund,
Class X,
4.72%
(d)
(Cost
$162,458)
162,458
Total
Long
Positions
-
99.2%
(Cost
$21,153,911)
21,260,061
Total
Short
Positions
-
(14.5)%
(Proceeds
$(3,201,889))
(3,101,323)
Other
Assets
&
Liabilities,
Net
-
15.3%
3,279,094
Net
Assets
-
100.0%
$
21,437,832
Absolute
Flexible
Fund
Schedule
of
Securities
Sold
Short
March
31,
2023
33
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Short
Positions
-
(14.5)%
Common
Stock
-
(14.5)%
Communication
Services
-
(1.2)%
(17,700)
Infinera
Corp.
$
(137,352)
(800)
Q2
Holdings,
Inc.
(19,696)
(3,000)
TechTarget,
Inc.
(108,360)
(265,408)
Consumer
Discretionary
-
(1.8)%
(10,000)
Fisker,
Inc.
(61,400)
(14,350)
IMAX
Corp.
(275,233)
(4,350)
Upwork,
Inc.
(49,242)
(385,875)
Energy
-
(1.6)%
(43,345)
Helix
Energy
Solutions
Group,
Inc.
(335,491)
Health
Care
-
(1.4)%
(50,000)
Accuray,
Inc.
(148,500)
(1,100)
Bridgebio
Pharma,
Inc.
(18,238)
(11,400)
PetIQ,
Inc.
(130,416)
(297,154)
Industrials
-
(2.1)%
(1,876)
CryoPort,
Inc.
(45,024)
(2,415)
Itron,
Inc.
(133,912)
(1,400)
John
Bean
Technologies
Corp.
(153,006)
(7,120)
Xometry,
Inc.,
Class A
(106,586)
(438,528)
Information
Technology
-
(6.4)%
(5,631)
Altair
Engineering,
Inc.,
Class A
(406,051)
(1,000)
Alteryx,
Inc.,
Class A
(58,840)
(3,000)
Bentley
Systems,
Inc.,
Class B
(128,970)
(1,600)
Confluent,
Inc.,
Class A
(38,512)
(3,550)
Dropbox,
Inc.,
Class A
(76,751)
(2,500)
Envestnet,
Inc.
(146,675)
(500)
Fastly,
Inc.,
Class A
(8,880)
(2,000)
Five9,
Inc.
(144,580)
(4,700)
Lumentum
Holdings,
Inc.
(253,847)
(100)
Magnite,
Inc.
(926)
(730)
Perficient,
Inc.
(52,699)
(10,658)
Veritone,
Inc.
(62,136)
(1,378,867)
Total
Common
Stock
(Proceeds
$(3,201,889))
(3,101,323)
Total
Short
Positions
-
(14.5)%
(Proceeds
$(3,201,889))
$
(3,101,323)
Absolute
Flexible
Fund
Notes
to
Schedules
of
Investments
and
Securities
Sold
Short
March
31,
2023
34
Absolute
Funds
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
liabilities
as
of
March
31,
2023.
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.
(a)
All
or
a
portion
of
this
security
is
held
as
collateral
for
securities
sold
short.
(b)
Zero
coupon
bond.
Interest
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
$2,088,930
or
9.7%
of
net
assets.
(d)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2023.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Corporate
Convertible
Bonds
$
–
$
21,097,603
$
–
$
21,097,603
Money
Market
Fund
–
162,458
–
162,458
Investments
at
Value
$
–
$
21,260,061
$
–
$
21,260,061
Total
Assets
$
–
$
21,260,061
$
–
$
21,260,061
Liabilities
Securities
Sold
Short
Common
Stock
$
(3,101,323)
$
–
$
–
$
(3,101,323)
Total
Liabilities
$
(3,101,323)
$
–
$
–
$
(3,101,323)
ABSOLUTE
FUNDS
STATEMENTS
OF
ASSETS
AND
LIABILITIES
March
31,
2023
35
Absolute
Funds
See
Notes
to
Financial
Statements.
(a)
Broker
is
Wells
Fargo
&
Co.
(b)
Broker
is
Citigroup
Global
Markets,
Inc.
in
the
Absolute
Strategies
Fund,
Pershing
LLC
in
the
Absolute
Capital
Opportunities
Fund
and
Jefferies
in
the
Absolute
Convertible
Arbitrage
Fund.
(c)
Broker
is
Marex
Capital
Markets,
Inc.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
ABSOLUTE
FLEXIBLE
FUND
ASSETS
Investments,
at
value
(Cost
$15,514,298,
$94,756,542,
$1,026,862,431
and
$21,153,911,
respectively)
$
15,268,680
$
101,823,628
$
976,586,096
$
21,260,061
Investments
in
affiliates,
at
value
(Cost
$14,260,834,
$0,
$15,319,907
and
$0,
respectively)
14,145,691
–
15,804,975
–
$
29,414,371
$
101,823,628
$
992,391,071
$
21,260,061
Cash
6,727
200,205
–
29,575
Deposits
with
broker
for
securities
sold
short
(a)
361,144
–
365,712,628
3,273,444
Deposits
with
broker
for
options
(b)
380,747
2,992,505
47,115,121
–
Deposits
with
broker
for
futures
(c)
2,937,423
–
10,941,327
–
Receivables:
Fund
shares
sold
5,004
–
15,503,546
–
Investment
securities
sold
270,273
–
13,847,032
–
Dividends
and
interest
90,199
126,539
5,660,909
75,840
Prepaid
expenses
10,514
11,650
19,695
1,938
Deferred
offering
costs
–
–
–
9,162
Total
Assets
33,476,402
105,154,527
1,451,191,329
24,650,020
LIABILITIES
Call
options
written,
at
value
(Premiums
received
$26,391,
$4,275,217,
$0
and
$0,
respectively)
32,100
5,072,847
–
–
Put
options
written,
at
value
(Premiums
received
$0,
$2,998,149,
$0
and
$0,
respectively)
–
1,008,421
–
–
Securities
sold
short,
at
value
(Proceeds
$274,221,
$0,
$440,215,147
and
$3,201,889,
respectively)
414,920
–
376,998,903
3,101,323
Payables:
Investment
securities
purchased
95,523
–
11,165,255
–
Fund
shares
redeemed
28,702
2,242,838
455,023
–
Due
to
custodian
–
–
4,031,428
–
Dividends
on
securities
sold
short
–
–
95,512
–
Accrued
Liabilities:
Investment
adviser
fees
23,828
102,130
829,395
72,598
Fund
services
fees
11,970
6,762
58,287
2,664
Other
expenses
36,202
40,552
239,144
35,603
Total
Liabilities
643,245
8,473,550
393,872,947
3,212,188
NET
ASSETS
$
32,833,157
$
96,680,977
$
1,057,318,382
$
21,437,832
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
70,198,750
$
117,720,613
$
1,066,922,745
$
20,784,017
Distributable
Earnings
(Accumulated
loss)
(37,365,593)
(21,039,636)
(9,604,363)
653,815
NET
ASSETS
$
32,833,157
$
96,680,977
$
1,057,318,382
$
21,437,832
SHARES
OF
BENEFICIAL
INTERST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
Institutional
Shares
4,693,539
10,130,275
71,856,126
2,077,767
Investor
Shares
–
–
25,253,159
–
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
Institutional
Shares
(based
on
net
assets
of
$32,833,157,
$96,680,977,
$783,027,724
and
$21,437,832,
respectively)
$
7.00
$
9.54
$
10.90
$
10.32
Investor
Shares
(based
on
net
assets
of
$0,
$0,
$274,290,658
and
$0,
respectively)
$
–
$
–
$
10.86
$
–
ABSOLUTE
FUNDS
STATEMENTS
OF
OPERATIONS
FOR
THE
YEAR
OR
PERIOD*
ENDED
MARCH
31,
2023
36
Absolute
Funds
See
Notes
to
Financial
Statements.
*Absolute
Flexible
Fund
commenced
operations
on
June
30,
2022.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
ABSOLUTE
FLEXIBLE
FUND
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$540,
$8,012,
$0
and
$0,
respectively)
$
394,330
$
1,816,460
$
1,632,740
$
65,847
Dividend
income
from
affiliated
investments
132,964
–
319,907
–
Interest
income
21,905
–
27,954,363
786,362
Total
Investment
Income
549,199
1,816,460
29,907,010
852,209
EXPENSES
Investment
adviser
fees
464,595
1,855,215
10,643,542
218,532
Fund
services
fees
45,117
100,085
544,339
22,977
Transfer
agent
fees
Institutional
Shares
98,591
4,179
95,478
2,875
Investor
Shares
–
–
3,003
–
Distribution
fees
Institutional
Shares
–
–
387,014
–
Custodian
fees
15,393
14,617
81,055
4,977
Registration
fees
Institutional
Shares
22,920
24,529
39,143
407
Investor
Shares
–
–
20,665
–
Professional
fees
38,119
54,785
183,064
69,869
Trustees'
fees
and
expenses
5,802
8,125
23,468
2,861
Offering
costs
–
–
–
27,484
Dividend
expense
on
securities
sold
short
–
–
1,144,334
762
Interest
expense
6,572
73,796
–
–
Other
expenses
80,697
128,556
951,450
29,211
Total
Expenses
777,806
2,263,887
14,116,555
379,955
Fees
waived
(183,839)
(215,615)
(1,938,343)
(146,612)
Net
Expenses
593,967
2,048,272
12,178,212
233,343
NET
INVESTMENT
INCOME
(LOSS)
(44,768)
(231,812)
17,728,798
618,866
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
(loss)
on:
Investments
in
unaffiliated
issuers
(1,734,044)
(35,200,296)
(13,722,945)
236,535
Investments
in
affiliated
issuers
195,801
–
–
–
Capital
gain
distribution
from
affiliated
issuer
20,729
–
–
–
Securities
sold
short
84,625
–
11,155,299
25,714
Written
options
314,710
29,367,654
–
–
Futures
2,227,068
–
7,827,681
–
Net
realized
gain
(loss)
1,108,889
(5,832,642)
5,260,035
262,249
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
in
unaffiliated
issuers
226,124
(8,907,505)
(51,687,873)
106,150
Investments
in
affiliated
issuers
(623,061)
–
485,068
–
Foreign
currency
translations
(240)
(86)
–
–
Securities
sold
short
(140,699)
–
48,546,542
100,566
Written
options
(160,923)
7,334,990
–
–
Futures
(684,223)
–
(3,274,919)
–
Net
change
in
unrealized
appreciation
(depreciation)
(1,383,022)
(1,572,601)
(5,931,182)
206,716
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
(274,133)
(7,405,243)
(671,147)
468,965
INCREASE
(DECREASE)
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(318,901)
$
(7,637,055)
$
17,057,651
$
1,087,831
ABSOLUTE
FUNDS
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
37
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,
2023
2022
2023
2022
OPERATIONS
Net
investment
loss
$
(44,768)
$
(539,278)
$
(231,812)
$
(1,481,626)
Net
realized
gain
(loss)
1,108,889
2,458,273
(5,832,642)
3,762,712
Net
change
in
unrealized
appreciation
(depreciation)
(1,383,022)
(6,152,021)
(1,572,601)
(9,283,361)
Decrease
in
Net
Assets
Resulting
from
Operations
(318,901)
(4,233,026)
(7,637,055)
(7,002,275)
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
–
(1,341,849)
–
–
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
9,781,860
6,686,810
32,211,215
55,625,689
Reinvestment
of
distributions:
Institutional
Shares
–
1,319,672
–
–
Redemption
of
shares:
Institutional
Shares
(7,192,521)
(43,246,874)
(74,159,077)
(25,299,251)
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
2,589,339
(35,240,392)
(41,947,862)
30,326,438
Increase
(Decrease)
in
Net
Assets
2,270,438
(40,815,267)
(49,584,917)
23,324,163
NET
ASSETS
Beginning
of
Year
30,562,719
71,377,986
146,265,894
122,941,731
End
of
Year
$
32,833,157
$
30,562,719
$
96,680,977
$
146,265,894
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
1,356,256
900,005
3,254,150
5,379,652
Reinvestment
of
distributions:
Institutional
Shares
–
178,575
–
–
Redemption
of
shares:
Institutional
Shares
(983,735)
(5,817,170)
(7,621,142)
(2,449,086)
Increase
(Decrease)
in
Shares
372,521
(4,738,590)
(4,366,992)
2,930,566
ABSOLUTE
FUNDS
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
38
Absolute
Funds
See
Notes
to
Financial
Statements.
*Commencement
of
operations.
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
ABSOLUTE
FLEXIBLE
FUND
For
the
Years
Ended
March
31,
June
30,
2022*
through
March
31,
2023
2023
2022
OPERATIONS
Net
investment
income
$
17,728,798
$
527,922
$
618,866
Net
realized
gain
5,260,035
12,532,246
262,249
Net
change
in
unrealized
appreciation
(depreciation)
(5,931,182)
(7,400,659)
206,716
Increase
in
Net
Assets
Resulting
from
Operations
17,057,651
5,659,509
1,087,831
DISTRIBUTIONS
TO
SHAREHOLDERS
Institutional
Shares
(24,625,866)
(17,303,308)
(434,016)
Investor
Shares
(7,243,929)
(279,460)
–
Total
Distributions
Paid
(31,869,795)
(17,582,768)
(434,016)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
351,645,129
411,242,309
20,350,011
Investor
Shares
248,352,894
36,250,465
–
Reinvestment
of
distributions:
Institutional
Shares
19,509,262
15,535,771
434,016
Investor
Shares
7,242,919
279,460
–
Redemption
of
shares:
Institutional
Shares
(254,565,141)
(175,203,296)
(10)
Investor
Shares
(11,458,541)
(5,751,001)
–
Increase
in
Net
Assets
from
Capital
Share
Transactions
360,726,522
282,353,708
20,784,017
Increase
in
Net
Assets
345,914,378
270,430,449
21,437,832
NET
ASSETS
Beginning
of
Year/Period
711,404,004
440,973,555
–
End
of
Year/Period
$
1,057,318,382
$
711,404,004
$
21,437,832
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
32,192,388
36,522,582
2,035,046
Investor
Shares
22,885,727
3,245,120
–
Reinvestment
of
distributions:
Institutional
Shares
1,805,002
1,393,207
42,722
Investor
Shares
671,597
25,109
–
Redemption
of
shares:
Institutional
Shares
(23,367,099)
(15,583,932)
(1)
Investor
Shares
(1,056,836)
(517,558)
–
Increase
in
Shares
33,130,779
25,084,528
2,077,767
Absolute
Funds
39
Absolute
Funds
THIS
PAGE
INTENTIONALLY
LEFT
BLANK
ABSOLUTE
FUNDS
FINANCIAL
HIGHLIGHTS
40
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
3/31/2023
$
7.07
(
$
0.01)
(
$
0.06)
(
$
0.07)
$
—
$
—
$
—
$
7.00
(0.99)
%
3/31/2022
7.88
(
0.09)
(
0.53)
(
0.62)
(
0.19)
—
(
0.19)
7.07
(7.96)
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)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
INSTITUTIONAL
SHARES
3/31/2023
10.09
(
0.02)
(
0.53)
(
0.55)
—
—
—
9.54
(5.45)
3/31/2022
10.63
(
0.11)
(
0.43)
(
0.54)
—
—
—
10.09
(5.08)
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)
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
INSTITUTIONAL
SHARES
3/31/2023
11.12
0.21
(
0.07)
0.14
(
0.14)
(
0.22)
(
0.36)
10.90
1.30
3/31/2022
11.34
0.01
0.12
0.13
—
(
0.35)
(
0.35)
11.12
1.13
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
INVESTOR
SHARES
3/31/2023
11.09
0.24
(
0.14)
0.10
(
0.11)
(
0.22)
(
0.33)
10.86
1.01
3/31/2022
(e)
11.34
0.00
(
c
)
0.10
0.10
—
(
0.35)
(
0.35)
11.09
0.86(f)
ABSOLUTE
FLEXIBLE
FUND
INSTITUTIONAL
SHARES
3/31/2023
(h)
10.00
0.30
0.23
0.
53
(0.17)
(0.04)
(0.21)
10.32
5.37(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)
Portfolio
turnover
is
calculated
for
the
Fund
as
a
whole.
(e)
Commencement
of
operations
was
April
1,
2021.
(f)
Not
annualized.
(g)
Annualized.
(h)
Commencement
of
operations
was
June
30,
2022.
ABSOLUTE
FUNDS
FINANCIAL
HIGHLIGHTS
41
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
$
32,833
(0.13)%
1.79%
0.02%
1.77%
2.34%
42%
30,563
(1.15)
1.69
0.05
1.64
2.32
11
71,378
(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
96,681
(0.17)
1.55
0.06
1.49
1.71
120
146,266
(1.10)
1.57
0.08
1.49
1.73
30
122,942
(1.22)
1.81
0.06
1.75
1.82
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
783,028
1.96
1.33
0.13
1.20
1.54
34
680,871
0.10
1.51
0.31
1.20
1.75
45
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
274,291
2.20
1.5
8
0.13
1.45
1.82
34(d)
30,533
(0.01)(g)
1.77(g)
0.32(g)
1.45(g)
2.16(g)
45(d)(f)
21,438
3.96(g)
1.49(g)
0.00(g)
1.49(g)
2.43(g)
21(f)
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
42
Absolute
Funds
Note
1.
Organization
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Flexible
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
Flexible
Fund
currently
offers
Institutional
Shares.
Absolute
Flexible
Fund
commenced
operations
on
June
30,
2022
and
seeks
to
achieve
positive
absolute
returns
over
the
long-term
with
low
volatility
when
compared
to
traditional
market
indices.
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
Absolute
Convertible
Arbitrage
Fund
Investor
Shares
commenced
operations
on
April
1,
2021.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Funds
are
investment
companies
and
follow
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
Accounting
Standards
Codification
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
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.
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Trust’s
Board
of
Trustees
(the
“Board”)
has
designated
the
Adviser,
as
defined
in
Note
3,
as
each
Fund’s
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
each
Fund.
The
Adviser
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Adviser’s
fair
value
determinations.
The
Adviser
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Adviser
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
43
Absolute
Funds
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Board
has
approved
the
Adviser’s
fair
valuation
procedures
as
a
part
of
each
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Adviser
provides
fair
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
Adviser
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,
2023,
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.
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.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
44
Absolute
Funds
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,
2023,
for
Absolute
Strategies
Fund
and
Absolute
Convertible
Arbitrage
Fund,
are
disclosed
in
the
Notes
to
Schedule
of
Investments,
Securities
Sold
Short
and
Call
and
Put
Options
Written.
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.
Purchased
Options
–
When
a
fund
purchases
an
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.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
45
Absolute
Funds
The
values
of
each
individual
purchased
option
outstanding
as
of
March
31,
2023,
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,
2023,
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
its
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,
2023,
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.
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.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
46
Absolute
Funds
Offering
Costs
–
Offering
costs
for
the
Absolute
Flexible
Fund
of
$36,646
consisted
of
fees
related
to
the
mailing
and
printing
of
the
initial
prospectus,
certain
startup
legal
costs,
and
initial
registration
filings.
Such
costs
are
amortized
over
a
twelve-month
period
beginning
with
the
commencement
of
operations
of
the
Absolute
Flexible
Fund.
During
the
period
ended
March
31,
2023,
the
Absolute
Flexible
Fund
expensed
$27,484.
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.
Note
3.
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,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Flexible
Fund
at
an
annual
rate
of
1.40%,
1.40%,
1.20%
and
1.40%,
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
(the
“Distributor”)
acts
as
the
agent
of
the
Trust
in
connection
with
the
continuous
offering
of
shares
of
the
Funds.
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.
The
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Flexible
Fund
do
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Flexible
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services
to
the
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Flexible
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
–
Each
Independent
Trustee’s
annual
retainer
is
$45,000
($55,000
for
the
Chairman),
and
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.
Note
4.
Expense
Reimbursement
and
Fees
Waived
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Absolute
Strategies
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
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Absolute
Strategies
Fund
as
a
result
of
the
Absolute
Strategies
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
47
Absolute
Funds
Strategies
Fund
to
1.99%,
through
August
1,
2023.
During
the
year,
Absolute
Strategies
Fund
invested
in
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Flexible
Fund
and
the
Absolute
Select
Value
ETF.
As
of
March
31,
2023,
Absolute
Strategies
Fund
owned
approximately
6.8%,
0.1%,
25.4%
and
1.2%
of
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Flexible
Fund
and
Absolute
Select
Value
ETF,
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,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Flexible
Fund
and
Absolute
Select
Value
ETF
based
on
Absolute
Strategies
Fund’s
investment
in
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Flexible
Fund
and
Absolute
Select
Value
ETF.
For
the
year
ended
March
31,
2023,
the
Adviser
waived
fees
of
$183,839
related
to
these
affiliated
investments
and
this
waiver
is
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
other
than
those
attributable
to
investment
advisory
fees
incurred
by
the
applicable
Fund
as
a
result
of
that
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Capital
Opportunities
Fund
and
Absolute
Flexible
Fund
to
1.49%
through
August
1,
2023.
The
Adviser
waived
fees
of
$215,615
for
Absolute
Capital
Opportunities
Fund
for
the
year
ended
March
31,
2023.
The
Adviser
waived
fees
of
$146,612
for
Absolute
Flexible
Fund
for
the
period
June
30,
2022
(commencement
of
operations)
through
March
31,
2023.
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
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Absolute
Convertible
Arbitrage
Fund
as
a
result
of
the
Absolute
Convertible
Arbitrage
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Convertible
Arbitrage
Fund
to
1.20%
and
1.45%
of
the
Institutional
Shares
and
Investor
Shares,
respectively,
through
August
1,
2023.
The
Adviser
waived
fees
of
$1,438,427
and
$337,314
for
Absolute
Convertible
Arbitrage
Fund
Institutional
and
Investor
Shares,
respectively,
for
the
year
ended
March
31,
2023.
In
addition,
the
Adviser
has
agreed
to
reimburse
fees
owed
to
it
by
the
Absolute
Convertible
Arbitrage
Fund
in
an
amount
equal
to
the
fee
it
receives
from
Absolute
Flexible
Fund
based
on
Absolute
Convertible
Arbitrage
Fund’s
investment
in
Absolute
Flexible
Fund.
As
of
March
31,
2023,
Absolute
Convertible
Arbitrage
Fund
owned
approximately
73.7%
of
Absolute
Flexible
Fund.
For
the
year
ended
March
31,
2023,
the
Adviser
waived
fees
of
$132,572
and
$28,030
for
Absolute
Convertible
Arbitrage
Fund
Institutional
and
Investor
Shares,
respectively,
related
to
this
affiliated
investment
and
this
waiver
is
not
subject
to
recoupment.
Other
Fund
service
providers
have
voluntarily
agreed
to
waive
a
portion
of
their
fees
for
Absolute
Convertible
Arbitrage.
Other
Fund
service
providers
waived
fees
of
$1,667
and
$333
for
Absolute
Convertible
Arbitrage
Fund
Institutional
and
Investor
Shares,
respectively
for
the
year
ended
March
31,
2023.
The
Funds
may
repay
the
Adviser
for
fees
waived
(other
than
advisory
fees
waived
by
the
Adviser
related
to
the
Absolute
Strategies
Fund
and
Absolute
Convertible
Arbitrage’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser)
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,
2023,
$0,
$439,022,
$3,499,783
and
$146,612
for
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Flexible
Fund,
respectively,
is
subject
to
recapture
by
the
Adviser.
Other
waivers
are
not
eligible
for
recoupment.
Note
5.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
year
or
period
ended
March
31,
2023
,
were
as
follows:
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
48
Absolute
Funds
Note
6.
Summary
of
Derivative
Activity
The
Funds
may
invest
in
certain
derivatives,
as
detailed
below,
to
meet
their
respective
investment
objectives.
Each
Fund’s
use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk
and
management
risk.
They
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
of
the
derivative
may
not
correlate
perfectly
with
the
underlying
asset,
rate
or
index.
In
some
cases,
a
Fund
could
lose
more
than
the
principal
amount
invested
by
investing
in
a
derivative
instrument.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances
and
there
can
be
no
assurance
that
a
Fund
will
engage
in
these
transactions
to
reduce
exposure
to
other
risks
when
doing
so
would
be
beneficial.
The
Funds
may
also
utilize
certain
derivative
instruments
and
investment
techniques
for
risk
management
or
hedging
purposes.
There
is
no
assurance
that
such
risk
management
and
hedging
strategies
will
be
successful,
as
such
success
will
depend
on,
among
other
factors,
the
Adviser’s
ability
to
predict
the
future
correlation,
if
any,
between
the
performance
of
the
instruments
utilized
for
hedging
purposes
and
the
performance
of
the
investments
being
hedged.
The
following
provides
more
information
on
specific
types
of
derivatives
and
activity
in
each
Fund:
The
use
of
derivative
instruments
by
the
Absolute
Strategies
Fund
for
the
year
ended
March
31,
2023,
related
to
the
use
of
futures
contracts
and
purchased
and
written
options.
The
Absolute
Strategies
Fund
utilized
such
derivative
instruments
in
order
to
generate
absolute
return
and
to
implement
selective
hedging
and
to
manage
risk
exposure.
The
use
of
derivative
instruments
by
the
Absolute
Capital
Opportunities
Fund
for
the
year
ended
March
31,
2023,
related
to
the
use
of
purchased
and
written
options.
The
Absolute
Capital
Opportunities
Fund
utilized
such
options
in
order
to
manage
or
enhance
return
(including
through
leverage),
to
obtain
leverage
for
speculative
purposes,
and
to
implement
selective
hedging
and
to
manage
risk
exposure.
The
use
of
derivative
instruments
by
the
Absolute
Convertible
Arbitrage
Fund
for
the
year
ended
March
31,
2023,
related
to
the
use
of
futures
contracts.
The
Absolute
Convertible
Arbitrage
Fund
utilized
futures
contracts
in
order
to
generate
absolute,
risk-adjusted
returns,
to
obtain
leverage
for
speculative
purposes,
to
gain
exposure
to
certain
asset
classes
(in
which
case
the
derivatives
may
have
economic
characteristics
similar
to
those
of
the
reference
asset),
and
to
implement
selective
hedging
and
to
manage
risk
exposure.
A
futures
contract
is
a
bilateral
agreement
where
one
party
agrees
to
accept,
and
the
other
party
agrees
to
make,
delivery
of
cash
or
underlying
securities
or
commodities,
as
called
for
in
the
contract,
at
a
specified
date
and
at
an
agreed
upon
price.
An
index
futures
contract
involves
the
delivery
of
an
amount
of
cash
equal
to
a
specified
dollar
amount
multiplied
by
the
difference
between
the
index
value
at
the
close
of
trading
of
the
contract
and
at
the
price
designated
by
the
futures
contract.
Generally,
these
futures
contracts
are
closed
out
prior
to
the
expiration
date
of
the
contracts.
A
public
market
exists
in
futures
contracts
covering
certain
indexes,
financial
instruments
and
foreign
currencies.
A
call
option
is
a
contract
under
which
the
purchaser
of
the
call
option,
in
return
for
a
premium
paid,
has
the
right
to
buy
the
security
(or
index)
underlying
the
option
at
a
specified
price
at
any
time
during
the
term
of
the
option.
The
writer
of
the
call
option,
who
receives
the
premium,
has
the
obligation
upon
exercise
of
the
option
to
deliver
the
underlying
security
against
payment
of
the
exercise
price.
A
put
option
gives
its
purchaser,
in
return
for
a
premium,
Non-U.S.
Government
Obligations
Purchases
Sales
Absolute
Strategies
Fund
$
7,060,415
$
5,730,643
Absolute
Capital
Opportunities
Fund
104,385,415
98,145,363
Absolute
Convertible
Arbitrage
Fund
568,192,440
265,867,550
Absolute
Flexible
Fund
23,563,212
3,351,769
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
49
Absolute
Funds
the
right
to
sell
the
underlying
security
at
a
specified
price
during
the
term
of
the
option.
The
writer
of
the
put,
who
receives
the
premium,
has
the
obligation
to
buy,
upon
exercise
of
the
option,
the
underlying
security
(or
a
cash
amount
equal
to
the
value
of
the
index)
at
the
exercise
price.
The
amount
of
a
premium
received
or
paid
for
an
option
is
based
upon
certain
factors
including
the
market
price
of
the
underlying
security,
the
relationship
of
the
exercise
price
to
the
market
price,
the
historical
price
volatility
of
the
underlying
security,
the
option
period
and
interest
rates.
Options
on
futures
contracts
are
similar
to
options
on
securities
except
that
an
option
on
a
futures
contract
gives
the
purchaser
the
right,
in
return
for
the
premium
paid,
to
assume
a
position
in
a
futures
contract
at
a
specified
exercise
price
at
any
time
during
the
period
of
the
option.
Upon
exercise
of
the
option,
the
delivery
of
the
futures
position
to
the
holder
of
the
option
will
be
accompanied
by
transfer
to
the
holder
of
an
accumulated
balance
representing
the
amount
by
which
the
market
price
of
the
futures
contract
exceeds,
in
the
case
of
a
call,
or
is
less
than,
in
the
case
of
a
put,
the
exercise
price
of
the
option
on
the
future.
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.
Premiums
received
on
purchased
and
written
options
and
notional
value
of
activity
for
futures
contracts
for
the
year
ended
March
31,
2023,
for
any
derivative
type
during
the
year
is
as
follows:
Following
is
a
summary
of
the
effect
of
derivatives
on
the
Statements
of
Assets
and
Liabilities
as
of
March
31,
2023
:
Absolute
Strategies
Fund
Absolute
Capital
Opportunities
Fund
Absolute
Convertible
Arbitrage
Fund
Absolute
Strategies
Fund
Absolute
Capital
Opportunities
Fund
Absolute
Convertible
Arbitrage
Fund
Futures
Contracts
$
4,079,126,021
$
–
$
346,563,272
Purchased
Options
17,148,772
60,150,391
–
Written
Options
(2,957,889)
(84,064,620)
–
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
–
purchased
options
$
408,950
Liability
derivatives:
Call
options
written,
at
value
$
(32,100)
Unrealized
depreciation
on
futures*
(497,688)
Total
liability
derivatives
$
(529,788)
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
–
purchased
options
$
1,513,961
Liability
derivatives:
Call
options
written,
at
value
$
(5,072,847)
Put
options
written,
at
value
(1,008,421)
Total
liability
derivatives
$
(6,081,268)
Location:
Interest
Risk
Liability
derivatives:
Unrealized
depreciation
on
futures*
$
(1,350,738)
*
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,
2023
50
Absolute
Funds
Realized
and
unrealized
gains
and
losses
on
derivatives
contracts
for
the
year
ended
March
31,
2023
,
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:
Derivative
Type
Equity
Contracts
Net
realized
gain
(loss)
on:
Investments
in
unaffiliated
issuers
Purchased
options
$
(1,797,004)
Written
options
Written
options
314,710
Futures
Futures
2,227,068
Total
net
realized
gain
(loss)
$
744,774
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
in
unaffiliated
issuers
Purchased
options
$
206,156
Written
options
Written
options
(160,923)
Futures
Futures
(684,223)
Total
net
change
in
unrealized
appreciation
(depreciation)
$
(638,990)
Location:
Derivative
Type
Equity
Contracts
Net
realized
gain
(loss)
on:
Investments
in
unaffiliated
issuers
Purchased
options
$
(36,965,964)
Written
options
Written
options
29,367,654
Total
net
realized
gain
(loss)
$
(7,598,310)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
in
unaffiliated
issuers
Purchased
options
$
1,666,392
Written
options
Written
options
7,334,990
Total
net
change
in
unrealized
appreciation
(depreciation)
$
9,001,382
Location:
Derivative
Type
Interest
Contracts
Net
realized
gain
(loss)
on:
Futures
Futures
$
7,827,681
Total
net
realized
gain
(loss)
$
7,827,681
Net
change
in
unrealized
appreciation
(depreciation)
on:
Futures
Futures
$
(3,274,919)
Total
net
change
in
unrealized
appreciation
(depreciation)
$
(3,274,919)
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
51
Absolute
Funds
Asset
(Liability)
amounts
shown
in
the
table
below
represent
amounts
for
derivative
related
investments
at
March
31,
2023
.
These
amounts
may
be
collateralized
by
cash
or
financial
instruments.
Note
7.
Federal
Income
Tax
As
of
March
31,
2023,
cost
for
federal
income
tax
and
net
unrealized
appreciation
(depreciation)
consists
of:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
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**
$
408,950
$
–
$
–
$
–
$
408,950
Liabilities:
Unrealized
depreciation
on
futures***
(497,688)
–
497,688
–
–
Over-the-counter
derivatives**
(32,100)
–
32,100
–
–
Absolute
Capital
Opportunities
Fund
Assets:
Over-the-counter
derivatives**
1,513,961
–
–
–
1,513,961
Liabilities:
Over-the-counter
derivatives**
(6,081,268)
–
6,081,268
–
–
Absolute
Convertible
Arbitrage
Fund
Liabilities:
Unrealized
depreciation
on
futures***
(1,350,738)
–
1,350,738
–
–
*
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
Investments
and
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
(Depreciation)
Absolute
Strategies
Fund
$
29,514,408
$
418,342
$
(965,399)
$
(547,057)
Absolute
Capital
Opportunities
Fund
91,242,178
15,522,011
(11,021,829)
4,500,182
Absolute
Convertible
Arbitrage
Fund
630,791,329
104,731,382
(120,130,543)
(15,399,161)
Absolute
Flexible
Fund
17,985,086
1,535,230
(1,361,578)
173,652
Ordinary
Income
Long-Term
Capital
Gain
Total
Absolute
Strategies
Fund
2023
$
–
$
–
$
–
2022
1,341,849
–
1,341,849
Absolute
Convertible
Arbitrage
Fund
2023
14,436,705
17,433,090
31,869,795
2022
271,581
17,311,187
17,582,768
Absolute
Flexible
Fund
2023
434,016
–
434,016
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
52
Absolute
Funds
As
of
March
31,
2023,
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
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,
cover
loss
deferrals,
contingent
payment
debt
instruments
and
deferred
business
interest
expense.
As
of
March
31,
2023,
the
Absolute
Strategies
Fund
and
the
Absolute
Capital
Opportunities
Fund
have
$36,818,353
and
$25,313,622
of
available
short-term
capital
loss
carryforwards,
respectively.
For
tax
purposes,
the
current
deferred
post
October
short-term
and
long-term
losses
are
$1,808,917
for
the
Absolute
Convertible
Arbitrage
Fund
(realized
during
the
period
November
1,
2022
through
March
31,
2023).
These
losses
will
be
recognized
for
tax
purposes
on
the
first
business
day
of
the
Fund’s
current
fiscal
year,
April
1,
2023.
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,
2023.
The
following
reclassifications
were
the
result
of
book
to
tax
differences
resulting
from
net
operating
loss
and
have
no
impact
on
the
net
assets
of
each
Fund.
Note
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
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.
Undistributed
Ordinary
Income
Capital
and
Other
Losses
Unrealized
Appreciation
(Depreciation)
Other
Temporary
Differences
Total
Absolute
Strategies
Fund
$
–
$
(36,818,353)
$
(547,240)
$
–
$
(37,365,593)
Absolute
Capital
Opportunities
Fund
–
(25,313,622)
4,500,013
(226,027)
(21,039,636)
Absolute
Convertible
Arbitrage
Fund
7,603,715
(1,808,917)
(15,399,161)
–
(9,604,363)
Absolute
Flexible
Fund
480,163
–
173,652
–
653,815
Distributable
Earnings
Paid-in-Capital
Absolute
Strategies
Fund
$
168,308
$
(168,308)
Absolute
Capital
Opportunities
Fund
460,338
(460,338)
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
53
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
and
Absolute
Flexible
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statements
of
assets
and
liabilities,
including
the
schedules
of
investments,
securities
sold
short,
call
options
written,
and
call
and
put
options
written,
where
applicable,
of
Forum
Funds,
comprising
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
and
Absolute
Flexible
Fund
(the
“Funds”),
as
of
March
31,
2023,
and
the
related
statements
of
operations
and
changes
in
net
assets,
the
related
notes,
and
the
financial
highlights
for
the
periods
presented
below
(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,
2023,
and
the
results
of
their
operations,
changes
in
net
assets,
and
the
financial
highlights
for
the
periods
presented
below,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
The
Funds’
financial
statements
and
financial
highlights
for
the
years
ended
March
31,
2022,
and
prior,
were
audited
by
other
auditors
whose
report
dated
May
27,
2022,
expressed
an
unqualified
opinion
on
those
financial
statements
and
financial
highlights.
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
laws
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.
Our
audits
included
performing
procedures
to
assess
the
risks
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,
2023,
by
correspondence
with
the
custodian,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
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.
Cohen
and
Company
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2023.
Philadelphia,
Pennsylvania
May
30,
2023
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
The
statements
of
operations,
changes
in
net
assets,
and
the
financial
highlights
for
the
year
ended
March
31,
2023
Absolute
Flexible
Fund
The
statements
of
operations,
changes
in
net
assets,
and
the
financial
highlights
for
the
period
June
30,
2022
(commencement
of
operations)
to
March
31,
2023
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
54
Absolute
Funds
Investment
Advisory
Agreement
Approval
At
the
December
9,
2022
Board
meeting,
the
Board,
including
the
Independent
Trustees,
considered
the
approval
of
the
investment
advisory
agreement
between
the
Adviser
and
the
Trust,
as
it
pertains
to
the
Absolute
Capital
Opportunities
Fund
(the
“Opportunities
Fund”),
Absolute
Convertible
Arbitrage
Fund
(the
“Convertible
Arbitrage
Fund”)
and
the
Absolute
Strategies
Fund
(the
“Strategies
Fund”)
(each
a
“Fund”
and
collectively
the
“Funds”)
(the
“Advisory
Agreement”)
and
the
subadvisory
agreement
between
the
Adviser
and
its
subadviser,
Kovitz
Investment
Group
Partners,
LLC
(the
“Subadviser”)
(the
“Subadvisory
Agreement”).
In
preparation
for
its
deliberations,
the
Board
requested
and
reviewed
written
responses
from
the
Adviser
and
Subadviser
to
due
diligence
questionnaires
circulated
on
the
Board's
behalf
concerning
the
services
provided
by
the
Adviser
and
Subadviser.
The
Board
also
discussed
the
materials
with
Fund
counsel
and,
as
necessary,
with
the
Trust's
administrator.
During
its
deliberations,
the
Board
also
received
an
oral
presentation
from
the
Adviser
and
was
assisted
by
the
advice
of
Trustee
counsel.
At
the
meeting,
the
Board
reviewed,
among
other
matters:
(1)
the
nature,
extent
and
quality
of
the
services
provided
to
each
of
the
Funds
by
the
Adviser
and
Subadviser,
including
information
on
the
investment
performance
of
each
Fund
and
Subadviser;
(2)
the
costs
of
the
services
provided
and
profitability
to
the
Adviser
with
respect
to
its
relationship
with
each
of
the
Funds;
(3)
the
advisory
fee
and
net
expense
ratio
of
each
of
the
Funds
compared
to
those
of
relevant
peer
groups
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
each
of
the
Funds
grows
and
whether
the
advisory
fees
enable
each
of
the
Funds’
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
other
benefits
received
by
the
Adviser
and
Subadviser
from
their
respective
relationships
with
the
Funds.
In
addition,
the
Board
recognized
that
the
evaluation
process
with
respect
to
the
Adviser
and
Subadviser
was
an
ongoing
one
and,
in
this
regard,
the
Board
considered
information
provided
by
the
Adviser,
including
about
Subadviser
performance,
at
regularly
scheduled
meetings
during
the
past
year.
Nature,
Extent
and
Quality
of
Services
Based
on
written
materials
received
from
the
Adviser
and
Subadviser,
a
presentation
from
senior
representatives
of
the
Adviser,
and
a
discussion
with
the
Adviser
about
the
personnel,
operations
and
financial
condition
of
the
Adviser
and
Subadviser,
the
Board
considered
the
quality
of
services
to
be
provided
by
the
Adviser
under
the
Advisory
Agreement
and
by
the
Subadviser
under
its
Subadvisory
Agreement.
In
this
regard,
the
Board
considered
information
regarding
the
experience,
qualifications
and
professional
background
of
the
portfolio
managers
and
other
personnel
at
the
Adviser
and
Subadviser
providing
services
to
the
Funds;
the
investment
philosophy
and
decision-making
processes
of
the
Adviser
and
Subadviser;
the
capability
of
the
Adviser’s
senior
management
and
staff;
the
overall
quality
of
the
Adviser’s
and
Subadviser’s
services,
including
over
the
long
term,
with
respect
to
regulatory
compliance;
and
the
Adviser’s
and
Subadviser’s
representations
regarding
its
financial
condition,
including
that
each
firm
is
in
sufficiently
stable
financial
condition
to
allow
the
firm
to
provide
quality
advisory
services
to
the
applicable
Fund(s).
The
Board
also
considered
the
Adviser’s
analysis
of
and
recommendation
to
approve
the
continuance
of
the
Subadvisory
Agreement
with
the
Subadviser.
Based
on
the
presentation
and
the
materials
provided
by
the
Adviser
and
Subadviser
in
connection
with
the
Board’s
consideration
of
the
renewal
of
each
of
the
Advisory
Agreement
and
the
Subadvisory
Agreement,
the
Board
concluded
that,
overall,
it
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
to
the
Funds
by
the
Adviser
under
the
Advisory
Agreement
and
the
Subadviser
under
its
Subadvisory
Agreement.
Performance
In
connection
with
a
presentation
by
the
Adviser
regarding
its
approach
to
managing
the
Funds,
including
the
Funds’
investment
objectives
and
strategies
and
the
Adviser’s
assessment
of
the
Subadviser’s
services,
the
Board
reviewed
the
performance
of
the
Funds
compared
to
their
respective
benchmark
indices.
The
Board
observed
that
the
Strategies
Fund
outperformed
its
primary
benchmark
index,
the
S&P
500
Index,
for
the
one-year
period
ended
September
30,
2022,
and
underperformed
its
primary
benchmark
index
for
each
of
the
three-,
five-,
and
10-year
periods
ended
September
30,
2022,
and
for
the
period
since
the
Strategies
Fund’s
inception
on
July
27,
2005.
The
Board
observed
that
the
Opportunities
Fund
outperformed
its
primary
benchmark
index,
the
HFRX
Equity
Hedge
Index,
for
the
one-
year
period
ended
September
30,
2022
and
for
the
period
since
the
Opportunities
Fund’s
inception
on
December
30,
2015,
and
underperformed
the
primary
benchmark
index
for
the
three-
and
five-year
periods
ended
September
30,
2022.
The
Board
observed
that
the
Arbitrage
Fund
outperformed
its
primary
benchmark
index,
the
HFRX
Fixed
Income
Convertible
Arbitrage
Index,
for
the
one-,
three-,
five-,
and
10-year
periods
ended
September
30,
2022,
and
for
the
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
55
Absolute
Funds
period
since
the
Arbitrage
Fund’s
inception
on
September
30,
2002,
though
the
Board
noted
that
the
Arbitrage
Fund’s
performance
for
periods
prior
to
August
2017
was
that
of
the
Arbitrage
Fund’s
predecessor
private
fund.
The
Board
noted
the
Adviser’s
representation
that
it
was
not
the
objective
of
the
Funds
to
outperform
specific
market
indices
because
the
Funds
employ
investment
strategies
that
are
intended
to
seek
positive
returns
over
a
complete
market
cycle,
inclusive
of
market
downturns,
irrespective
of
any
benchmark
or
market
performance.
The
Board
also
noted
the
Adviser’s
representation
that
the
performance
of
the
Strategies
Fund,
in
particular,
tends
to
deviate
from
the
performance
of
equity
indices,
in
part,
because
the
Strategies
Fund’s
portfolio
is
generally
comprised
of
a
dynamic
balance
of
both
long
and
short
positions,
unlike
its
benchmark
index
and,
in
part,
because
the
Strategies
Fund’s
investment
strategies
include
a
countercyclical
component
that
is
designed
to
outperform
in
declining
markets
but
tends
to
cause
the
Strategies
Fund
to
underperform
in
rising
markets.
The
Board
then
considered
market
conditions
since
2008
and
noted
that,
with
the
exception
of
the
latest
one-year
period,
markets
have
tended
to
rise.
At
the
request
of
the
Adviser,
the
Board
also
considered
the
performance
of
the
Strategies
Fund
compared
to
the
HFRX
Global
Hedge
Fund
Index,
a
secondary
index
for
the
Strategies
Fund
that
the
Adviser
uses
as
a
broad-based
measure
of
performance.
In
that
respect,
the
Board
noted
that
the
Strategies
Fund
had
outperformed
the
HFRX
Global
Hedge
Fund
Index
for
the
one-year
period
ended
September
30,
2022,
and
underperformed
the
HFRX
Global
Hedge
Fund
Index
for
the
three-,
five-,
and
10-year
periods
ended
September
30,
2022.
With
respect
to
the
Opportunities
Fund,
the
Board
noted
the
Adviser’s
representation
that
outperformance
during
the
one-year
period
could
be
attributed,
at
least
in
part,
to
the
fact
that
hedged
strategies,
such
as
that
employed
by
the
Opportunities
Fund,
outperformed
long-
only
strategies
during
the
year,
with
the
significant
decline
in
the
S&P
500
Index
over
the
same
period.
The
Board
noted
the
Adviser’s
representation
that,
over
the
three-
and
five-year
periods,
the
Opportunities
Fund’s
bias
toward
value
stocks
remained
out
of
favor
in
the
market,
as
growth
stocks
outperformed
value
stocks
over
those
time
frames,
leading
to
underperformance
relative
to
the
index.
With
respect
to
the
Arbitrage
Fund,
the
Board
noted
the
Adviser’s
representation
that
the
Arbitrage
Fund’s
low
sensitivity
to
interest
rates
was
a
consistent
contributing
factor
to
the
Fund’s
performance
relative
to
the
primary
benchmark
index,
which
was
adversely
affected
by
the
volatile
interest
rate
environment
prevailing
during
the
most
recent
one-,
three-,
and
five-year
periods,
and
that,
overall,
Absolute
remained
pleased
with
the
performance
of
the
Arbitrage
Fund.
The
Board
also
considered
each
Fund’s
performance
relative
to
a
peer
group
of
funds
identified
by
Strategic
Insight
(“Strategic
Insight”)
as
having
characteristics
similar
to
those
of
the
applicable
Fund.
The
Board
observed
that
the
Strategies
Fund
outperformed
the
average
of
its
Strategic
Insight
peers
for
the
one-year
period
ended
September
30,
2022,
and
underperformed
the
average
of
its
Strategic
Insight
peers
for
the
three-
and
five-year
periods
ended
September
30,
2022.
The
Board
noted
the
Adviser’s
representation
that
its
unique
approach
to
managing
the
Strategies
Fund
made
it
difficult
to
identify
an
appropriate
peer
group,
as
well
as
the
Adviser’s
explanation
as
to
how
the
Strategic
Insight
peers
differed
from
the
Strategies
Fund.
The
Board
noted,
for
example,
that
the
Strategies
Fund’s
positioning
allowed
it
to
perform
well
during
broad
market
drawdowns,
such
as
the
market
environment
experienced
during
2022,
but
perform
poorly
when
the
broader
markets
appreciate
significantly,
as
they
did
during
most
of
the
three-,
five-,
and
10-year
periods
under
review.
The
Board
observed
that
the
Opportunities
Fund
underperformed
the
average
of
its
Strategic
Insight
peers
for
the
one-
and
three-year
periods
ended
September
30,
2022,
and
outperformed
the
average
of
its
Strategic
Insight
peers
for
the
five-year
period
ended
September
30,
2022.
The
Board
noted
the
Adviser’s
representation
that
the
Strategic
Insight
peers
were
not
the
most
suitable
comparison
for
the
Opportunities
Fund
due
to
the
Opportunities
Fund’s
flexible,
opportunistic
exposure
to
the
overall
equity
markets,
as
compared
to
the
long/short
equity
and
market
neutral
peers
included
in
the
Opportunities
Fund’s
Strategic
Insight
peer
group.
The
Board
noted
the
Adviser’s
representation
that
the
Opportunities
Fund’s
Morningstar
category
had
recently
been
changed
in
view
of
the
Fund’s
investment
strategy,
which
provides
for
dynamic
exposure
to
the
broader
equity
markets
depending
on
market
conditions,
and
that,
relatedly,
the
Adviser
had
been
unable
to
identify
a
more
suitable
group
of
peer
funds
to
compare
against
the
performance
of
the
Opportunities
Fund
due
to
the
dynamic
nature
of
the
Fund’s
investment
strategy.
The
Board
observed
that
the
Arbitrage
Fund
outperformed
the
average
of
its
Strategic
Insight
peers
for
the
one-
and
five-year
periods
ended
September
30,
2022
and
underperformed
the
average
of
its
Strategic
Insight
peers
for
the
three-year
period
ended
September
30,
2022.
The
Board
noted
the
Adviser’s
representation
that,
within
the
Arbitrage
Fund’s
Strategic
Insight
peer
group,
there
were
only
a
limited
number
of
other
mutual
funds
that
employed
a
pureplay
convertible
arbitrage
strategy
similar
to
that
of
the
Arbitrage
Fund,
whereas
the
majority
of
the
Strategic
Insight
peers
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
56
Absolute
Funds
employ
a
mix
of
convertible
arbitrage,
global
macro,
and
long
credit
strategies
and,
as
a
result,
the
performance
of
the
Arbitrage
Fund
would
likely
be
different
from
the
Strategic
Insight
peers
over
any
period
of
time.
In
considering
the
renewal
of
the
Subadvisory
Agreement,
the
Board
considered
the
Adviser’s
assessment
of
the
Subadviser’s
performance,
noting
that
the
Adviser
had
expressed
satisfaction
with
the
performance
of
the
Subadviser
in
a
difficult
market
environment.
The
Board
also
considered
the
Adviser’s
explanation
that,
standing
alone,
the
Subadviser
should
not
necessarily
be
expected
to
perform
in
line
with
the
market
or
with
the
Fund’s
benchmark
index.
In
this
regard,
the
Board
noted
the
Adviser’s
responsibility
for
allocating
the
Opportunities
Fund’s
assets
to,
and
away
from,
the
Subadviser
on
an
ongoing
basis
in
order
to
achieve
the
desired
levels
of
exposure
for
the
Fund.
In
view
of
the
respective
roles
of
the
Adviser
and
Subadviser,
the
Board
determined
that
it
was
appropriate
to
give
substantial
weight
to
the
Adviser’s
evaluation
of
the
contribution
of
the
Subadviser
to
the
Opportunities
Fund
as
a
whole.
In
light
of
the
above
and
other
relevant
considerations,
the
Board
concluded
that
the
Funds
and
their
shareholders
could
benefit
from
the
Adviser’s
and
Subadviser’s
continued
management
of
the
applicable
Funds
under
the
Advisory
Agreement
and
the
Subadvisory
Agreement.
Compensation
The
Board
evaluated
the
Adviser's
compensation
for
providing
advisory
services
to
each
of
the
Funds
and
analyzed
comparative
information
on
the
actual
advisory
fee
rates
and
actual
total
expenses
of
each
Fund
compared
to
the
relevant
Strategic
Insight
peer
group.
The
Board
observed
that
advisory
fee
rates
for
the
Arbitrage
Fund
and
Opportunities
Fund
were
each
higher
than
the
median
of
their
respective
Strategic
Insight
peer
groups
and
the
advisory
fee
rate
for
the
Strategies
Fund
was
lower
than
the
median
of
the
Strategic
Insight
peer
group.
The
Board
observed
that
the
net
expense
ratios
for
each
of
the
Arbitrage
Fund
and
Opportunities
Fund
were
lower
than
the
median
of
their
respective
Strategic
Insight
peer
groups
and
the
net
expense
ratio
for
the
Strategies
Fund
was
higher
than
the
median
of
its
Strategic
Insight
peer
group.
The
Board
considered
that
the
Adviser
had
imposed
contractual
expense
caps
on
the
total
expense
ratio
for
each
of
the
Funds
in
an
effort
to
ensure
that
the
expenses
of
the
Funds
remained
competitive.
With
respect
to
the
Opportunities
Fund,
the
Board
noted
that
its
contractual
advisory
fee
rate
had
been
lowered
in
2018
and
the
contractual
expense
cap
had
been
lowered
effective
April
12,
2021.
With
respect
to
the
Arbitrage
Fund,
the
Board
also
noted
that
its
contractual
advisory
fee
rate
had
been
lowered
effective
January
2,
2020,
and
that
its
contractual
expense
cap
for
Institutional
Shares
had
been
lowered
effective
April
12,
2021.
With
respect
to
the
Strategies
Fund,
the
Board
noted
that
its
contractual
advisory
fee
rate
had
been
lowered
effective
January
1,
2022.
In
addition,
with
respect
to
the
Strategies
Fund,
the
Board
noted
that
the
Adviser
manages
an
ETF
with
an
investment
objective
that
is
substantially
similar
to
that
of
the
Strategies
Fund
but
that
pays
a
lower
advisory
fee
rate
and
has
a
lower
net
expense
ratio
than
the
Strategies
Fund.
However,
the
Board
noted
that
there
existed
several
differences
between
the
ETF
and
the
Strategies
Fund,
including
that
the
ETF
does
not
employ
a
multi-manager
structure,
whereby
the
Adviser
is
responsible
for
continually
considering
the
appropriateness
of
revising
the
Fund’s
subadviser
line-up,
and
that
the
Adviser
does
not
actively
trade
a
sleeve
of
the
ETF.
The
Board
also
noted
the
Adviser’s
representation
that
fee
compression
in
the
ETF
industry
required
the
Adviser
to
accept
a
lower
advisory
fee
rate
for
the
ETF,
even
if
a
higher
fee
rate
would
be
fair
in
light
of
the
nature
and
quality
of
services
it
provides
to
the
ETF.
Further,
with
respect
to
all
of
the
Funds,
the
Board
recognized
that
the
Adviser’s
fees
do
not
include
performance
and
similar
fees
paid
by
hedge
funds
and
other
vehicles
with
which
the
Funds
compete
given
the
hedge
fund-like
nature
of
the
Funds’
strategies.
Finally,
the
Board
noted
that
the
Adviser
pays
the
Subadviser
out
of
its
advisory
fee.
Under
these
circumstances,
the
Board
concluded
that
it
was
difficult
to
make
meaningful
comparisons
between
the
Funds’
actual
advisory
fee
rates
and
net
expense
ratios
and
those
of
the
Funds’
respective
Strategic
Insight
peers
due
to,
among
other
things,
variations
between
the
services
provided
by
the
Adviser
to
the
Funds
and
those
provided
to
the
Strategic
Insight
peer
group
funds
by
their
advisers.
Based
on
the
foregoing
and
other
applicable
considerations,
the
Board
concluded
that
the
advisory
fee
rates
to
be
charged
to
the
Funds
under
the
Advisory
Agreement
appeared
to
be
reasonable.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
57
Absolute
Funds
Cost
of
Services
and
Profitability
The
Board
considered
information
provided
by
the
Adviser
regarding
the
costs
of
services
and
its
profitability
with
respect
to
each
of
the
Funds.
In
this
regard,
the
Board
considered
the
Adviser’s
resources
devoted
to
each
of
the
Funds
as
well
as
the
Adviser’s
discussion
of
the
costs
and
profitability
of
its
fund
activities,
including
the
percentage
and
amount
of
the
Adviser’s
fee
that
the
Adviser
retained
and
the
percentage
and
amount
of
the
Adviser’s
fee
that
was
paid
to
the
Subadviser.
Based
on
these
and
other
applicable
considerations,
the
Board
concluded
that
the
Adviser’s
profits
attributable
to
the
management
of
each
of
the
Funds
were
reasonable.
The
Board
did
not
consider
information
regarding
the
costs
of
services
provided
or
profits
realized
by
the
Subadviser
from
its
relationship
with
the
Opportunities
Fund,
noting
instead
the
arms-length
nature
of
the
relationship
between
the
Adviser
and
the
Subadviser
with
respect
to
the
negotiation
of
the
subadvisory
fee
rate,
and
that
the
Adviser,
and
not
the
Fund,
was
responsible
for
paying
the
subadvisory
fees
due
under
the
Subadvisory
Agreement.
Under
these
circumstances,
the
Board
concluded
that
the
Subadviser’s
profitability
was
not
a
material
factor
in
determining
whether
to
approve
the
continuance
of
the
Subadvisory
Agreement.
Economies
of
Scale
The
Board
considered
whether
the
Funds
could
benefit
from
economies
of
scale.
In
this
regard,
the
Board
considered
the
fee
structure,
asset
size,
and
expense
cap
of
each
of
the
Funds.
The
Board
considered
the
Adviser’s
representation
that
each
of
the
Funds
could
potentially
benefit
from
economies
of
scale
as
assets
grow
and
noted
past
actions
by
the
Adviser
to
lower
the
expense
caps
and
advisory
fee
rates
applicable
to
the
Funds.
With
respect
to
the
Strategies
Fund,
the
Board
noted
that
the
Fund’s
assets
had
declined
over
the
last
year
and
that
the
Adviser
had
lowered
the
contractual
advisory
fee
rate
from
1.60%
to
1.40%,
effective
January
1,
2022.
With
respect
to
the
Opportunities
Fund,
the
Board
noted
the
current
low
relative
asset
level
of
the
Fund,
the
reduction
in
the
Adviser’s
contractual
advisory
fee
rate
in
2018,
and
the
reduction
in
the
expense
cap
from
1.75%
to
1.49%
that
took
effect
on
April
12,
2021.
With
respect
to
the
Arbitrage
Fund,
the
Board
noted
that
the
Adviser
had
reduced
the
advisory
fee
rate
from
1.40%
to
1.20%,
effective
December
23,
2019,
and
had
lowered
the
contractual
expense
cap
from
1.40%
to
1.20%,
effective
November
25,
2020.
Based
on
the
foregoing
and
other
applicable
considerations,
including
the
size
of
the
Funds,
the
Board
concluded
that
any
existing
economies
of
scale
were
addressed
in
the
Funds’
expense
cap
structure
and
that
the
information
presented
was
consistent
with
the
approval
of
the
Advisory
Agreement
at
current
fee
levels.
Other
Benefits
The
Board
noted
the
Adviser’s
representation
that,
aside
from
its
contractual
advisory
fees,
it
does
not
benefit
in
a
material
way
from
its
relationship
with
the
Funds.
Based
on
the
foregoing
representation,
the
Board
concluded
that
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Funds
were
not
a
material
factor
in
approving
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.
When
considering
the
renewal
of
the
Subadvisory
Agreement,
the
Board
gave
significant
weight
to
the
Adviser’s
recommendation
that
the
Subadvisory
Agreement
be
renewed
and
to
the
Adviser’s
representation
that
the
reappointment
of
the
Subadviser
would
positively
contribute
to
the
Adviser’s
successful
execution
of
the
sub-advised
Fund’s
overall
strategies.
The
Board
reviewed
a
memorandum
from
Fund
counsel
discussing
the
legal
standards
applicable
to
its
consideration
of
the
Advisory
Agreement
and
Subadvisory
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
advisory
arrangement,
as
outlined
in
the
Advisory
Agreement
and
in
the
Subadvisory
Agreement,
was
fair
and
reasonable
in
light
of
the
services
performed,
expenses
incurred
and
such
other
matters
as
the
Board
considered
relevant.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
58
Absolute
Funds
Change
in
Independent
Registered
Public
Accounting
Firm
On
March
9,
2023,
BBD
LLP
(“BBD”)
ceased
to
serve
as
the
independent
registered
public
accounting
firm
of
the
Funds,
each
a
series
of
Forum
Funds.
The
Audit
Committee
of
the
Board
of
Directors
approved
the
replacement
of
BBD
as
a
result
of
Cohen
&
Company,
Ltd.’s
(“Cohen”)
acquisition
of
BBD’s
investment
management
group.
The
reports
of
BBD
on
the
financial
statements
of
the
Funds
as
of
and
for
the
fiscal
years
ended
March
31,
2022
and
March
31,
2021
did
not
contain
an
adverse
opinion
or
a
disclaimer
of
opinion,
and
were
not
qualified
or
modified
as
to
uncertainties,
audit
scope
or
accounting
principles.
During
the
years
ended
March
31,
2022
and
March
31,
2021,
and
during
the
subsequent
interim
period
through
March
9,
2023:
(i)
there
were
no
disagreements
between
the
Trust
and
BBD
on
any
matter
of
accounting
principles
or
practices,
financial
statement
disclosure,
or
auditing
scope
or
procedure,
which
disagreements,
if
not
resolved
to
the
satisfaction
of
BBD,
would
have
caused
it
to
make
reference
to
the
subject
matter
of
the
disagreements
in
its
report
on
the
financial
statements
of
the
Funds
for
such
years
or
interim
period;
and
(ii)
there
were
no
“reportable
events,”
as
defined
in
Item
304(a)(1)(v)
of
Regulation
S-K
under
the
Securities
Exchange
Act
of
1934,
as
amended.
The
Trust
requested
that
BBD
furnish
it
with
a
letter
addressed
to
the
U.S.
Securities
and
Exchange
Commission
stating
that
it
agrees
with
the
above
statements.
A
copy
of
such
letter
is
filed
as
an
exhibit
to
Form
N-CSR.
On
March
17,
2023,
the
Audit
Committee
of
the
Board
of
Directors
also
recommended
and
approved
the
appointment
of
Cohen
as
the
Fund’s
independent
registered
public
accounting
firm
for
the
fiscal
year
ending
March
31,
2023.
During
the
fiscal
years
ended
March
31,
2022
and
March
31,
2021,
and
during
the
subsequent
interim
period
through
March
9,
2023,
neither
the
Trust,
nor
anyone
acting
on
its
behalf,
consulted
with
Cohen
on
behalf
of
the
of
Funds
regarding
the
application
of
accounting
principles
to
a
specified
transaction
(either
completed
or
proposed),
the
type
of
audit
opinion
that
might
be
rendered
on
each
Fund’s
financial
statements,
or
any
matter
that
was
either:
(i)
the
subject
of
a
“disagreement,”
as
defined
in
Item
304(a)(1)(iv)
of
Regulation
S-K
and
the
instructions
thereto;
or
(ii)
"reportable
events,"
as
defined
in
Item
304(a)(1)(v)
of
Regulation
S-K.
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,
2022
through
March
31,
2023.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
59
Absolute
Funds
Beginning
Account
Value
October
1,
2022
Ending
Account
Value
March
31,
2023
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Absolute
Strategies
Fund
Actual
$
1,000.00
$
921.05
$
8.38
1.75%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,016.21
$
8.80
1.75%
Absolute
Capital
Opportunities
Fund
Actual
$
1,000.00
$
953.05
$
7.26
1.49%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,017.50
$
7.49
1.49%
Absolute
Convertible
Arbitrage
Fund
Institutional
Shares
Actual
$
1,000.00
$
1,032.63
$
6.08
1.20%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,018.95
$
6.04
1.20%
Investor
Shares
Actual
$
1,000.00
$
1,031.03
$
7.34
1.45%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,017.70
$
7.29
1.45%
Absolute
Flexible
Fund
Actual
$
1,000.00
$
1,063.24
$
7.66
1.49%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,017.50
$
7.49
1.49%
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.
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
Convertible
Abitrage
Fund
and
Absolute
Flexible
Fund
designate
76.84%
and
81.60
%,
respectively,
of
each
Fund’s
income
dividends
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
The
Absolute
Convertible
Abitrage
Fund
and
Absolute
Flexible
Fund
designate
18.78
%
and
18.4
0
%,
of
its
income
dividends
as
short-term
capital
dividends
exempt
from
U.S.
tax
for
foreign
shareholders
as
(QSD).
Pursuant
to
Section
852(b)(3)
of
the
Internal
Revenue
Code,
the
Absolute
Convertible
Arbitrage
Fund
designated
$17,433,090
as
long-term
capital
gain
dividends.
*
Expenses
are
equal
to
each
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
period
(182)
divided
by
365
to
reflect
the
period.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
60
Absolute
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.
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.
(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.
4
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
since
2021;
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
2017-
2021.
4
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.
4
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.
4
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
Five
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.
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.apexgroup.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-0323
Beck
Mack
+
Oliver
LLC
Annual
Report
March
31,
2023
Beck
Mack
+
Oliver
Partners
Fund
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
1
Dear
Fellow
Shareholder:
The
Beck
Mack
+
Oliver
Partners
Fund
(the
“Partners
Fund”)
returned
-11.96%
net
of
fees
and
expenses
for
the
fiscal
year
ended
March
31,
2023
(the
“Fiscal
Year”),
resulting
in
a
net
asset
value
of
$17.32.
By
comparison,
during
the
Fiscal
Year,
the
S&P
500
Index
(the
“S&P
500”),
which
is
the
Partners
Fund’s
principal
benchmark,
returned
-7.73%.
Performance
Update
The
Fiscal
Year
ended
on
a
volatile
and
disappointing
note
amid
the
turmoil
in
the
US
banking
system,
which
culminated
in
the
failures
of
Silicon
Valley
Bank
and
Signature
Bank.
The
Partners
Fund
outperformed
a
down
market
during
the
first
11
months
of
the
Fiscal
Year,
and
then
underperformed
during
the
final
month,
as
illustrated
in
the
table
below.
We
do
not
believe
that
the
Partners
Fund’s
underperformance
during
the
final
month
of
the
Fiscal
Year
represents
a
permanent
loss
of
capital.
Notwithstanding
the
difficult
way
in
which
the
Fiscal
Year
ended,
overall
we
remain
pleased
with
the
Partners
Fund’s
performance
over
the
last
few
years.
During
the
three
years
ended
March
31,
2023,
the
total
return
of
the
Partners
Fund
is
+23.42%
annualized
vs.
+18.60%
for
the
S&P
500.
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.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
Manager
Succession
We
are
excited
to
announce
that,
effective
April
1,
2023,
John
C.
Ellis
has
succeeded
Robert
C.
Beck
as
co-portfolio
manager
of
the
Partners
Fund,
joining
Richard
C.
Fitzgerald
in
that
capacity.
Messrs.
Ellis
and
Beck
are
co-managing
partners
of
Beck
Mack
+
Oliver
LLC,
which
is
the
investment
adviser
of
the
Partners
Fund,
and
Mr.
Ellis’s
involvement
with
the
Partners
Fund
is
part
of
a
planned
succession
process.
Messrs.
Ellis,
Beck,
and
Fitzgerald
are
all
partners
of
Beck
Mack
+
Oliver
LLC.
Total
Returns
3/31/22
–
2/28/23
2/28/23
–
3/31/23
3/31/22
–
3/31/23
Partners
Fund
-9.47%
-2.75%
-11.96%
S&P
500
-11.00%
+3.67%
-7.73%
Total
Returns
3/31/20
–
3/31/21
3/31/21
–
3/31/22
3/31/22
–
3/31/23
3-Year
Annualized
Partners
Fund
+81.97%
+17.35%
-11.96%
+23.42%
S&P
500
+56.35%
+15.65%
-7.73%
+18.60%
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
2
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.
1
We
initiated
a
position
in
First
Data
towards
the
end
of
the
fiscal
year
ended
March
31,
2021.
As
we
noted
at
the
time,
we
were
impressed
with
CEO
Frank
Bisignano,
who
was
a
longtime
executive
at
JPMorgan
Chase
before
taking
the
helm
at
First
Data,
a
merchant
acquiring
business.
Bisignano
successfully
turned
around
First
Data,
which
was
subsequently
acquired
by
Fiserv,
and
Bisignano
became
CEO
of
the
combined
company,
which
we
believed
held
a
strong
competitive
position
in
the
payments
and
financial
technology
industry.
We
also
initiated
a
position
in
Arthur
J.
Gallagher
(“AJG”)
during
the
fiscal
year
ended
March
31,
2021.
And
as
we
noted
at
the
time,
AJG,
which
is
one
of
the
world’s
largest
insurance
brokers,
had
thrived
under
the
careful
stewardship
of
the
Gallagher
family,
consistently
delivering
organic
growth
over
a
long
period
of
time,
supplemented
by
an
effective
strategy
of
acquiring
smaller
brokers.
In
the
case
of
both
Fiserv
and
AJG,
we
believe
that
our
initial
investment
represented
an
attractive
multiple
of
earnings
and
cash
flow,
especially
in
the
context
of
expected
future
growth
and
the
quality
of
the
underlying
business.
During
the
Fiscal
Year,
despite
various
economic
headwinds
and
volatile
financial
markets,
both
companies
continued
to
deliver
solid
operational
and
financial
performance.
The
Partners
Fund
has
had
a
multiyear
investment
in
the
alternative
asset
managers
Apollo
Global
Management
(“Apollo”)
and
Blackstone.
We
believe
that
these
two
companies
benefit
from
their
global
scale,
multi-decade
track
record
of
generating
superior
investment
results,
best-in-class
fundraising
and
distribution,
and
excellent
management,
all
of
which
have
contributed
to
ongoing
growth
in
fee-related
earnings.
Given
that
they
are
in
the
same
industry,
it
is
striking
that
Apollo
was
one
of
our
largest
positive
contributors
during
the
Fiscal
Year,
while
Blackstone
was
one
of
our
largest
detractors.
We
believe
that
some
of
this
performance
dispersion
is
a
function
of
contemporaneous
factors—e.g.,
(i)
rising
interest
rate
were
more
of
a
boon
for
Apollo,
given
its
greater
orientation
towards
credit
and
insurance,
and
(ii)
Blackstone’s
highly
successful
non-traded
real
estate
investment
trust,
known
as
BREIT,
experienced
some
outflows
during
the
latter
part
of
the
Fiscal
Year.
However,
during
the
fiscal
year
ended
1
Contribution
refers
to
how
much
the
position
contributed
to,
or
detracted
from,
the
Partners
Fund’s
investment
performance
during
the
Fiscal
Year.
Total
return
refers
to
the
security’s
total
return
during
the
entire
Fiscal
Year.
Largest
Positive
Contributors
Largest
Negative
Contributors
Position
Contribution
Total
Return
Position
Contribution
Total
Return
Fiserv
+0.81%
+11.47%
Blackstone
-2.01%
-27.67%
Apollo
Global
Management
+0.75%
+4.57%
Warner
Bros.
Discovery
-1.72%
-39.53%
Arthur
J.
Gallagher
+0.62%
+10.83%
Alphabet
-1.61%
-25.53%
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
3
March
31,
2022,
Blackstone
and
Apollo
generated
total
returns
of
+76.22%
and
+35.91%,
respectively.
Thus,
their
respective
total
returns
during
the
Fiscal
Year
may
also
represent
some
degree
of
mean-reversion.
During
the
two
years
ended
March
31,
2023,
Blackstone
and
Apollo
generated
annualized
total
returns
of
+12.89%
and
+19.21%,
respectively,
while
the
S&P
generated
an
annualized
total
return
of
+3.28%.
We
have
discussed
our
investment
in
Warner
Bros.
Discovery
in
recent
shareholder
letters,
including
in
our
letter
for
the
semi-annual
period
ended
September
30,
2022
(the
“September
2022
Letter”).
In
that
letter,
we
wrote,
“We
remain
confident
in
the
management
team’s
ability
to
successfully
integrate
the
two
companies,
achieve
substantial
expense
synergies,
generate
strong
cash
flow,
and
rapidly
pay
down
debt,
the
realization
of
which
we
believe
will
act
as
a
positive
catalyst
for
the
stock.”
Since
then,
the
company
has
demonstrated
tangible
progress
along
these
lines,
which
we
expect
to
continue.
Although
the
stock
was
a
material
underperformer
during
the
Fiscal
Year,
its
more
recent
returns
reflect
the
progress
the
company
is
making:
from
December
31,
2022,
to
the
end
of
the
Fiscal
Year,
Warner
Bros.
Discovery
generated
a
total
return
of
+59.28%.
The
Partners
Fund
has
had
a
multiyear
investment
in
Alphabet,
which
comprises
digital
advertising,
YouTube,
public
cloud
computing,
the
Android
operating
system,
the
Play
app
store,
and
various
other
businesses
and
technologies.
We
believe
that
Alphabet’s
digital
advertising
business,
whose
core
is
tied
to
the
ubiquitous
Google
search
engine,
is
one
of
the
best
businesses
of
all
time.
Alphabet
has
generated
outstanding
growth
in
its
revenues,
earnings,
and
cash
flow
over
a
long
period
of
time,
and
we
expect
these
trends
to
continue.
The
valuation
of
the
stock,
however,
has
been
buffeted
by
multiple
headwinds,
including
antitrust
litigation
and
regulatory
change,
competition
(e.g.,
TikTok),
technological
disruption
(e.g.,
artificial
intelligence
“chatbots”),
and
macroeconomic
deceleration.
Since
the
inception
of
our
investment,
Alphabet
has
generated
attractive
total
returns,
and
we
continue
to
view
the
stock
as
among
our
highest-conviction
investments.
New
&
Exited
Positions
The
table
below
indicates
the
two
new
positions
that
were
initiated
and
the
four
positions
that
were
exited
during
the
Fiscal
Year.
We
discussed
our
new
investment
in
Ferguson
in
the
September
2022
Letter.
Since
then,
we
have
been
pleased
with
the
performance
of
both
the
business
and
the
stock.
We
recently
made
a
new
investment
in
Zurn
Elkay
Water
Solutions
(“Zurn”),
which
is
a
market
leader
in
the
US
commercial
plumbing
industry.
Key
products
include
backflow
preventers,
valves,
touchless
toilets
and
sinks,
and
touchless
bottle
fillers
that
are
common
in
airports
and
gyms.
The
company’s
offerings
tend
to
be
highly
specified
by
architects,
and
Zurn
enjoys
a
number
one
or
two
market
position
in
nearly
all
major
products
that
it
manufactures.
We
believe
that
the
company
is
likely
to
continue
to
generate
strong
organic
revenue
growth
for
many
years
to
come
and
that
we
were
able
to
initiate
an
investment
at
a
compelling
multiple
of
earnings
and
cash
flow.
We
discussed
our
exits
from
Black
Knight,
CAE,
and
Matador
in
the
September
2022
Letter.
We
subsequently
also
exited
Lumen
Technologies
(“Lumen”).
For
many
years,
Lumen
struggled
with
revenue
growth
headwinds,
while
generating
New
Positions
Exited
Positions
Ferguson
Black
Knight
Zurn
Elkay
Water
Solutions
CAE
Lumen
Technologies
Matador
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
4
significant
amounts
of
cash
flow.
More
recently,
it
announced
or
completed
multiple
divestitures
and
brought
in
a
new
CEO.
Although
the
stock
remains
cheap
in
our
opinion,
we
believe
that
cash
flow
will
be
under
pressure
in
the
coming
quarters
as
the
new
CEO
invests
for
growth,
and
moreover
we
simply
believe
that
there
are
better
opportunities
elsewhere
in
the
portfolio,
including
our
more
recent
investments
noted
above.
Other
Portfolio
Observations
As
of
the
end
of
the
Fiscal
Year,
the
Partners
Fund
held
26
equity
positions,
with
the
10
largest
positions
representing
55.6%
of
net
assets.
This
compares
to
28
equity
positions,
with
the
10
largest
positions
representing
52.9%
of
net
assets,
as
of
March
31,
2022.
As
of
the
end
of
the
Fiscal
Year,
the
largest
sector
exposures
were
financials
(45.6%
of
net
assets),
healthcare
(13.2%),
and
industrials
(12.2%),
and
cash
represented
less
than
1%
of
net
assets.
As
of
the
end
of
the
Fiscal
Year,
the
Partners
Fund
had
an
estimated
net
capital
loss
carryforward
of
approximately
$10.9
million,
or
approximately
$3.78
per
share.
We
regard
this
carryforward
as
a
potentially
significant
source
of
future
value
for
the
Partners
Fund’s
shareholders,
as
it
may
be
utilized
to
offset
future
realized
capital
gains.
Outlook
&
Conclusion
Prior
to
the
recent
turmoil
in
the
US
banking
system,
we
were
reasonably
constructive
on
the
economic
outlook,
believing
that
(i)
while
growth
was
decelerating,
the
probability
of
something
worse
than
a
mild
recession
remained
low,
and
(ii)
inflation
appeared
to
be
moving
the
right
direction.
As
of
this
writing,
it
appears
that
there
is
no
longer
an
acute
crisis
afflicting
the
banking
system,
but
we
expect
the
negative
economic
consequences
of
the
crisis
to
linger
for
some
time.
In
particular,
we
expect
depository
institutions
of
all
kinds
to
be
more
conservative
in
their
underwriting
and
extension
of
credit,
which
will
act
as
a
headwind
on
economic
growth.
In
our
opinion,
it
is
not
that
a
deep
or
prolonged
recession
has
necessarily
become
the
most
likely
outcome,
but
the
probabilities
attaching
to
various
economic
scenarios
have
shifted
in
a
negative
direction.
Regardless
of
the
economic
environment,
we
continue
to
select
for
high-quality
company-specific
investments—i.e.,
those
businesses
that
can
compound
their
earnings
at
solid
rates
over
long
periods
of
time,
enjoy
durable
competitive
advantages,
and
are
led
by
capable
and
well-aligned
management
teams.
Within
this
subset
of
excellent
businesses,
we
look
to
initiate
investments
when
the
stocks
are
trading
at
a
compelling
multiple
of
earnings
and
cash
flow,
with
the
overarching
goal
of
owning
great
businesses
at
attractive
valuations.
Thank
you
for
your
support.
Yours
sincerely,
John
C.
Ellis
Richard
C.
Fitzgerald
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
5
Appendix:
Historical
Performance
Total
returns
for
the
Partners
Fund
and
the
S&P
500
for
the
periods
ended
March
31,
2023,
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
1.58%.
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,
2023;
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.
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
securities
risk,
management
risk,
fixed
income
securities
risk,
noninvestment
grade
securities
risk,
liquidity
risk,
non-diversification
risk,
and
business
development
risk.
The
Partners
Fund
may
invest
in
small
and
mid-sized
capitalization
companies,
and
such
companies
may
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
Partners
Fund
may
invest
in
large
capitalization
companies,
and
such
companies
may
underperform
other
segments
of
the
market
for
various
reasons,
such
as
lower
responsiveness
to
competitive
challenges
or
opportunities
and
an
inability
to
attain
high
growth
rates
during
periods
of
economic
expansion.
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
total
returns
of
the
S&P
500
Index
and
of
the
Partners
Fund
include
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
does
not
include
expenses.
The
Partners
Fund
is
professionally
managed
while
the
S&P
500
Index
is
unmanaged
and
is
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,
2023,
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
Annualized
Returns
One
Year
Three
Years
Five
Years
Ten
Years
Since
Inception
April
19,
1991
Partners
Fund
-11.96%
+23.42%
+8.65%
+5.90%
+8.41%
S&P
500
-7.73%
+18.60%
+11.19%
+12.24%
+9.89%
significant
amounts
of
cash
flow.
More
recently,
it
announced
or
completed
multiple
divestitures
and
brought
in
a
new
CEO.
Although
the
stock
remains
cheap
in
our
opinion,
we
believe
that
cash
flow
will
be
under
pressure
in
the
coming
quarters
as
the
new
CEO
invests
for
growth,
and
moreover
we
simply
believe
that
there
are
better
opportunities
elsewhere
in
the
portfolio,
including
our
more
recent
investments
noted
above.
Other
Portfolio
Observations
As
of
the
end
of
the
Fiscal
Year,
the
Partners
Fund
held
26
equity
positions,
with
the
10
largest
positions
representing
55.6%
of
net
assets.
This
compares
to
28
equity
positions,
with
the
10
largest
positions
representing
52.9%
of
net
assets,
as
of
March
31,
2022.
As
of
the
end
of
the
Fiscal
Year,
the
largest
sector
exposures
were
financials
(45.6%
of
net
assets),
healthcare
(13.2%),
and
industrials
(12.2%),
and
cash
represented
less
than
1%
of
net
assets.
As
of
the
end
of
the
Fiscal
Year,
the
Partners
Fund
had
an
estimated
net
capital
loss
carryforward
of
approximately
$10.9
million,
or
approximately
$3.78
per
share.
We
regard
this
carryforward
as
a
potentially
significant
source
of
future
value
for
the
Partners
Fund’s
shareholders,
as
it
may
be
utilized
to
offset
future
realized
capital
gains.
Outlook
&
Conclusion
Prior
to
the
recent
turmoil
in
the
US
banking
system,
we
were
reasonably
constructive
on
the
economic
outlook,
believing
that
(i)
while
growth
was
decelerating,
the
probability
of
something
worse
than
a
mild
recession
remained
low,
and
(ii)
inflation
appeared
to
be
moving
the
right
direction.
As
of
this
writing,
it
appears
that
there
is
no
longer
an
acute
crisis
afflicting
the
banking
system,
but
we
expect
the
negative
economic
consequences
of
the
crisis
to
linger
for
some
time.
In
particular,
we
expect
depository
institutions
of
all
kinds
to
be
more
conservative
in
their
underwriting
and
extension
of
credit,
which
will
act
as
a
headwind
on
economic
growth.
In
our
opinion,
it
is
not
that
a
deep
or
prolonged
recession
has
necessarily
become
the
most
likely
outcome,
but
the
probabilities
attaching
to
various
economic
scenarios
have
shifted
in
a
negative
direction.
Regardless
of
the
economic
environment,
we
continue
to
select
for
high-quality
company-specific
investments—i.e.,
those
businesses
that
can
compound
their
earnings
at
solid
rates
over
long
periods
of
time,
enjoy
durable
competitive
advantages,
and
are
led
by
capable
and
well-aligned
management
teams.
Within
this
subset
of
excellent
businesses,
we
look
to
initiate
investments
when
the
stocks
are
trading
at
a
compelling
multiple
of
earnings
and
cash
flow,
with
the
overarching
goal
of
owning
great
businesses
at
attractive
valuations.
Thank
you
for
your
support.
Yours
sincerely,
John
C.
Ellis
Richard
C.
Fitzgerald
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2023
6
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/or
sector
allocations
are
subject
to
change
at
any
time
and
should
not
be
considered
a
recommendation
to
buy
or
sell
any
security.
Current
and
future
holdings
are
subject
to
risk.
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,
2023
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.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
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,
acquired
fund
fees
and
expenses
and
extraordinary
expenses)
to
1.00%,
through
at
least
July
31,
2023
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
During
the
year,
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.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2023
One
Year
Five
Year
Ten
Year
Beck
Mack
+
Oliver
Partners
Fund
-11.96%
8.65%
5.90%
S&P
500®
Index
-7.73%
11.19%
12.24%
Beck
Mack
+
Oliver
Partners
Fund
PORTFOLIO
PROFILE
(Unaudited)
March
31,
2023
8
PORTFOLIO
HOLDINGS
%
of
Total
Investments
Beck
Mack
+
Oliver
Partners
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2023
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,
2023.
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.
The
Level
2
value
displayed
in
this
table
includes
a
Money
Market
Fund.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
Shares
Security
Description
Value
Common
Stock
-
99.4%
Communication
Services
-
9.7%
26,000
Alphabet,
Inc.,
Class C
(a)
$
2,704,000
140,000
Warner
Bros
Discovery,
Inc.
(a)
2,114,000
4,818,000
Consumer
Discretionary
-
3.1%
11,000
Hilton
Worldwide
Holdings,
Inc.
1,549,570
Energy
-
3.6%
70,000
Enterprise
Products
Partners
LP
1,813,000
Financials
-
45.6%
51,000
Apollo
Global
Management,
Inc.
3,221,160
13,000
Arthur
J
Gallagher
&
Co.
2,487,030
37,000
Blackstone,
Inc.,
Class A
3,250,080
6,000
Credit
Acceptance
Corp.
(a)
2,616,240
12,000
Enstar
Group,
Ltd.
(a)
2,781,480
23,000
Fiserv,
Inc.
(a)
2,599,690
12,000
JPMorgan
Chase
&
Co.
1,563,720
6,750
Mastercard,
Inc.,
Class A
2,453,018
35,000
The
Charles
Schwab
Corp.
1,833,300
22,805,718
Health
Care
-
13.2%
6,000
Abbott
Laboratories
607,560
9,000
Laboratory
Corp.
of
America
Holdings
2,064,780
84,000
RadNet,
Inc.
(a)
2,102,520
100,000
Teva
Pharmaceutical
Industries,
Ltd.,
ADR
(a)
885,000
3,000
Waters
Corp.
(a)
928,890
6,588,750
Industrials
-
12.2%
7,000
Advanced
Drainage
Systems,
Inc.
589,470
43,000
Ashtead
Group
PLC
2,648,800
11,000
Ferguson
PLC
1,471,250
65,000
Zurn
Elkay
Water
Solutions
Corp.
1,388,400
6,097,920
Information
Technology
-
8.3%
16,000
CoStar
Group,
Inc.
(a)
1,101,600
10,500
Microsoft
Corp.
3,027,150
4,128,750
Materials
-
2.0%
4,500
The
Sherwin-Williams
Co.
1,011,465
Real
Estate
-
1.7%
110,000
Tricon
Residential,
Inc.
852,500
Total
Common
Stock
(Cost
$32,928,554)
49,665,673
Shares
Security
Description
Value
Money
Market
Fund
-
0.6%
303,619
First
American
Government
Obligations
Fund,
Class X,
4.65%
(b)
(Cost
$303,619)
$
303,619
Investments,
at
value
-
100.0%
(Cost
$33,232,173)
$
49,969,292
Other
Assets
&
Liabilities,
Net
-
0.0%
(5,826)
Net
Assets
-
100.0%
$
49,963,466
ADR
American
Depositary
Receipt
LP
Limited
Partnership
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
(b)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2023.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
49,665,673
Level
2
-
Other
Significant
Observable
Inputs
303,619
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
49,969,292
Beck
Mack
+
Oliver
Partners
Fund
STATEMENT
OF
ASSETS
AND
LIABILITIES
March
31,
2023
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
$33,232,173)
$
49,969,292
Receivables:
Fund
shares
sold
25,000
Dividends
15,066
Prepaid
expenses
10,221
Total
Assets
50,019,579
LIABILITIES
Accrued
Liabilities:
Investment
adviser
fees
8,858
Fund
services
fees
15,047
Other
expenses
32,208
Total
Liabilities
56,113
NET
ASSETS
$
49,963,466
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
43,040,792
Distributable
Earnings
6,922,674
NET
ASSETS
$
49,963,466
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
2,884,810
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE*
$
17.32
Beck
Mack
+
Oliver
Partners
Fund
STATEMENT
OF
OPERATIONS
FOR
THE
YEAR
ENDED
MARCH
31,
2023
11
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$3,045)
$
724,935
Total
Investment
Income
724,935
EXPENSES
Investment
adviser
fees
502,930
Fund
services
fees
180,605
Custodian
fees
10,267
Registration
fees
21,527
Professional
fees
41,517
Trustees'
fees
and
expenses
5,942
Other
expenses
79,844
Total
Expenses
842,632
Fees
waived
(339,703)
Net
Expenses
502,929
NET
INVESTMENT
INCOME
222,006
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
loss
on:
Investments
(2,735,819)
Foreign
currency
transactions
(964)
Net
realized
loss
(2,736,783)
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
(4,496,538)
NET
REALIZED
AND
UNREALIZED
LOSS
(7,233,321)
DECREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(7,011,315)
Beck
Mack
+
Oliver
Partners
Fund
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
12
See
Notes
to
Financial
Statements.
For
the
Years
Ended
March
31,
2023
2022
OPERATIONS
Net
investment
income
$
222,006
$
177,809
Net
realized
gain
(loss)
(2,736,783)
4,746,128
Net
change
in
unrealized
appreciation
(depreciation)
(4,496,538)
3,222,907
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(7,011,315)
8,146,844
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(17,575)
–
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
2,249,501
14,461,428
Reinvestment
of
distributions
16,536
–
Redemption
of
shares
(4,758,998)
(10,612,972)
Redemption
fees
2,132
24,265
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
(2,490,829)
3,872,721
Increase
(Decrease)
in
Net
Assets
(9,519,719)
12,019,565
NET
ASSETS
Beginning
of
Year
59,483,185
47,463,620
End
of
Year
$
49,963,466
$
59,483,185
SHARE
TRANSACTIONS
Sale
of
shares
129,698
726,905
Reinvestment
of
distributions
1,000
–
Redemption
of
shares
(268,263)
(534,766)
Increase
(Decrease)
in
Shares
(137,565)
192,139
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,
2023
2022
2021
2020
2019
NET
ASSET
VALUE,
Beginning
of
Year
$
19.68
$
16.77
$
9.27
$
11.24
$
11.56
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.08
0.06
0.10
0.12
0.14
Net
realized
and
unrealized
gain
(loss)
(2.43)
2.84
7.48
(2.03)
(0.46)
Total
from
Investment
Operations
(2.35)
2.90
7.58
(1.91)
(0.32)
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.01)
–
(0.08)
(0.06)
–
Total
Distributions
to
Shareholders
(0.01)
–
(0.08)
(0.06)
–
REDEMPTION
FEES(a)
0.00(b)
0.01
0.00(b)
0.00(b)
0.00(b)
NET
ASSET
VALUE,
End
of
Year
$
17.32
$
19.68
$
16.77
$
9.27
$
11.24
TOTAL
RETURN
(11.96)%
17.35%
81.97%
(17.17)%
(2.77)%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
49,963
$
59,483
$
47,464
$
27,161
$
36,760
Ratios
to
Average
Net
Assets:
Net
investment
income
0.44%
0.30%
0.82%
1.01%
1.19%
Net
expenses
1.00%
1.00%
1.00%
1.00%
1.00%
Gross
expenses
(c)
1.68%
1.58%
1.86%
1.80%
1.74%
PORTFOLIO
TURNOVER
RATE
11%
15%
18%
10%
17%
(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,
2023
14
Note
1.
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.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
Accounting
Standards
Codification
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.
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Trust’s
Board
of
Trustees
(the
“Board”)
has
designated
the
Adviser,
as
defined
in
Note
3,
as
the
Fund’s
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
the
Fund.
The
Adviser
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Adviser’s
fair
value
determinations.
The
Adviser
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Adviser
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
Board
has
approved
the
Adviser’s
fair
valuation
procedures
as
a
part
of
the
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Adviser
provides
fair
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
Adviser
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,
2023
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,
2023,
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,
2023
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,
2023,
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.
Note
3.
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
(the
“Distributor”)
acts
as
the
agent
of
the
Trust
in
connection
with
the
continuous
offering
of
shares
of
the
Fund.
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.
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.
Beck
Mack
+
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
17
Trustees
and
Officers
–
Each
Independent
Trustee’s
annual
retainer
is
$45,000
($55,000
for
the
Chairman),
and
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.
Note
4.
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,
2023.
During
the
year
ended
March
31,
2023,
fees
waived
were
$339,703.
Note
5.
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,
2023
were
$5,767,137
and
$8,080,027,
respectively.
Note
6.
Federal
Income
Tax
As
of
March
31,
2023,
the
cost
of
investments
for
federal
income
tax
purposes
is
$32,165,181 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:
As
of
March
31,
2023,
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.
Gross
Unrealized
Appreciation
$
19,914,445
Gross
Unrealized
Depreciation
(2,110,334)
Net
Unrealized
Appreciation
$
17,804,111
Ordinary
Income
2023
$
17,575
2022
0
Undistributed
Ordinary
Income
$
18,044
Capital
and
Other
Losses
(10,899,481)
Unrealized
Appreciation
17,804,111
Total
$
6,922,674
Beck
Mack
+
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2023
18
As
of
March
31,
2023,
the
Fund
had
$4,
874
,
5
4
5
of
available
short-term
capital
loss
carryforwards
and
$
6
,
024
,
936
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,
2023
.
The
following
reclassification
was
the
result
of
investments
in
partnerships
and
has
no
impact
on
the
net
assets
of
the
Fund.
Note
7.
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.
Distributable
Earnings
$
222
Paid-in-Capital
(222)
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,
including
the
schedule
of
investments,
of
Forum
Funds,
comprising
Beck
Mack
+
Oliver
Partners
Fund
(formerly
Beck,
Mack
&
Oliver
Partners
Fund)
(the
“Fund”),
as
of
March
31,
2023,
and
the
related
statements
of
operations
and
changes
in
net
assets,
the
related
notes,
and
the
financial
highlights
for
the
year
then
ended
(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,
2023,
and
the
results
of
its
operations,
changes
in
net
assets,
and
the
financial
highlights
for
the
year
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
The
Fund’s
financial
statements
and
financial
highlights
for
the
years
ended
March
31,
2022,
and
prior,
were
audited
by
other
auditors
whose
report
dated
May
27,
2022,
expressed
an
unqualified
opinion
on
those
financial
statements
and
financial
highlights.
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
audit.
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
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audit
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement
whether
due
to
error
or
fraud.
Our
audit
included
performing
procedures
to
assess
the
risks
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,
2023,
by
correspondence
with
the
custodian.
Our
audit
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
audit
provides
a
reasonable
basis
for
our
opinion.
We
have
served
as
the
Fund’s
auditor
since
2023.
Cohen
&
Company
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2023.
Philadelphia,
Pennsylvania
May
30,
2023
Beck
Mack
+
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
20
Investment
Advisory
Agreement
Approval
At
the
March
17,
2023
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
independent
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
as
compared
to
those
of
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
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
who
had
historically
had
and,
separately,
who
going
forward
would
have,
principal
responsibility
for
the
Fund’s
investments.
The
Board
also
considered
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-,
five-,
and
10-year
periods
ended
December
31,
2022,
and
for
the
period
since
the
Partners
Fund’s
inception
on
April
19,
1991,
and
outperformed
the
primary
benchmark
index
for
the
three-year
period
ended
December
31,
2022.
The
Board
also
considered
the
Fund’s
performance
relative
to
Beck
Mack
+
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
21
an
independent
peer
group
identified
by
Strategic
Insight,
Inc.
(“Strategic
Insight
Peers”)
as
having
characteristics
similar
to
those
of
the
Fund.
The
Board
observed
that
the
Fund
underperformed
the
average
of
its
Strategic
Insight
Peers
for
the
one-,
five-,
and
10-year
periods
ended
December
31,
2022
and
outperformed
the
average
of
its
Strategic
Insight
Peers
for
the
three-year
period
ended
December
31,
2022.
Noting
the
Adviser’s
representation
that
the
Strategic
Insight
Peers
were
not
the
most
apt
comparison
for
the
Fund,
the
Board
also
considered
the
performance
of
the
Fund
as
compared
to
a
group
of
mutual
funds
identified
by
the
Adviser
as
being
more
representative
of
the
Fund’s
investment
strategy
than
the
Strategic
Insight
Peers
(the
“Adviser
Peers”).
The
Board
observed
that
the
Fund
underperformed
the
average
of
the
Adviser
Peers
for
the
one-year
period
ended
December
31,
2022
and
outperformed
the
average
of
the
Adviser
Peers
for
each
of
the
three-
and
five-year
periods
ended
December
31,
2022.
The
Board
considered
the
Adviser’s
representation
that
the
Fund’s
underperformance
over
the
one-year
period
relative
to
the
benchmark
index
could
be
attributed,
in
part,
to
stock
selection
within
the
energy
sector
and
the
Fund’s
lack
of
exposure
to
the
utilities
sector,
the
two
sectors
that
drove
overall
market
performance
during
2022.
The
Board
also
noted
the
Adviser’s
representation
that
the
Fund’s
relative
underperformance
on
a
one-year
basis
could
also
reflect
a
degree
of
mean-reversion,
as
the
Fund
significantly
outperformed
the
benchmark
during
calendar
year
2021
and
underperformed
the
benchmark
during
the
calendar
year
2022,
even
though
the
composition
of
the
Fund’s
investment
portfolio
did
not
change
significantly
during
2022.
Finally,
the
Board
noted
that
the
Fund
had
outperformed
the
benchmark
index
on
a
two-,
three-,
and
four-year
basis
due
to,
among
other
factors,
its
stock
selection
during
those
periods.
With
respect
to
the
Fund’s
performance
over
longer
periods,
the
Board
considered
the
Adviser’s
representation
that
Fund’s
relative
underperformance
over
the
five-
and
10-year
periods
was
partially
a
function
of
the
Fund’s
underperformance
during
the
fourth
quarter
of
calendar
year
2018,
which
had
a
disproportionate
effect
on
the
Fund’s
longer-term
performance,
as
well
as
the
Fund’s
underperformance
during
2014
and
2015,
when
a
different
individual
had
primary
portfolio
management
responsibilities
for
the
Fund.
The
Board
also
considered
the
Adviser’s
representation
that
the
Fund’s
relative
performance
has
been
negatively
affected
by
the
outperformance
of
growth-style
investing
over
value-style
investing
over
the
last
ten
years.
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
net
advisory
fee
rates
and
net
expense
ratios
in
the
Fund’s
Strategic
Insight
Peers.
The
Board
observed
that
the
Adviser’s
net
advisory
fee
rate
and
net
total
expense
ratio
were
each
less
than
the
median
of
the
Strategic
Insight
Peer
group.
The
Board
also
noted
the
Adviser’s
representation
that
the
contractual
advisory
fee
rate
charged
to
the
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.
Beck
Mack
+
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
22
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
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
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
expense
cap
arrangements.
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
the
advisory
fee
remained
reasonable
in
light
of
the
current
information
provided
to
the
Board
with
respect
to
economies
of
scale.
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.
Beck
Mack
+
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
23
Change
in
Independent
Registered
Public
Accounting
Firm
On
March
9,
2023,
BBD
LLP
(“BBD”)
ceased
to
serve
as
the
independent
registered
public
accounting
firm
of
the
Fund,
a
series
of
Forum
Funds.
The
Audit
Committee
of
the
Board
of
Directors
approved
the
replacement
of
BBD
as
a
result
of
Cohen
&
Company,
Ltd.’s
(“Cohen”)
acquisition
of
BBD’s
investment
management
group.
The
reports
of
BBD
on
the
financial
statements
of
the
Fund
as
of
and
for
the
fiscal
years
ended
March
31,
2021
and
March
31,
2022
did
not
contain
an
adverse
opinion
or
a
disclaimer
of
opinion,
and
were
not
qualified
or
modified
as
to
uncertainties,
audit
scope
or
accounting
principles.
During
the
years
ended
March
31,
2021
and
March
31,
2022,
and
during
the
subsequent
interim
period
through
March
9,
2023:
(i)
there
were
no
disagreements
between
the
Trust
and
BBD
on
any
matter
of
accounting
principles
or
practices,
financial
statement
disclosure,
or
auditing
scope
or
procedure,
which
disagreements,
if
not
resolved
to
the
satisfaction
of
BBD,
would
have
caused
it
to
make
reference
to
the
subject
matter
of
the
disagreements
in
its
report
on
the
financial
statements
of
the
Fund
for
such
years
or
interim
period;
and
(ii)
there
were
no
“reportable
events,”
as
defined
in
Item
304(a)(1)(v)
of
Regulation
S-K
under
the
Securities
Exchange
Act
of
1934,
as
amended.
The
Trust
requested
that
BBD
furnish
it
with
a
letter
addressed
to
the
U.S.
Securities
and
Exchange
Commission
stating
that
it
agrees
with
the
above
statements.
A
copy
of
such
letter
is
filed
as
an
exhibit
to
Form
N-CSR.
On
March
17,
2023,
the
Audit
Committee
of
the
Board
of
Directors
also
recommended
and
approved
the
appointment
of
Cohen
as
the
Fund’s
independent
registered
public
accounting
firm
for
the
fiscal
year
ending
March
31,
2023.
During
the
fiscal
years
ended
March
31,
2021
and
March
31,
2022,
and
during
the
subsequent
interim
period
through
March
9,
2023,
neither
the
Trust,
nor
anyone
acting
on
its
behalf,
consulted
with
Cohen
on
behalf
of
the
of
Fund
regarding
the
application
of
accounting
principles
to
a
specified
transaction
(either
completed
or
proposed),
the
type
of
audit
opinion
that
might
be
rendered
on
the
Fund’s
financial
statements,
or
any
matter
that
was
either:
(i)
the
subject
of
a
“disagreement,”
as
defined
in
Item
304(a)(1)(iv)
of
Regulation
S-K
and
the
instructions
thereto;
or
(ii)
"reportable
events,"
as
defined
in
Item
304(a)(1)(v)
of
Regulation
S-K.
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.
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.
Beck
Mack
+
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2023
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.
46
%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
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,
2022
through
March
31,
2023.
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,
2022
Ending
Account
Value
March
31,
2023
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,136.16
$
5.33
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,
2023
25
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
Independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
since
2021;
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
2017-2021.
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,
2023
26
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
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.
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.apexgroup.com
Distributor
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
ME
04101
www.acaglobal.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-0323
Payson
Total
Return
Fund
ANNUAL
REPORT
//
March
31,
2023
Payson
Total
Return
Fund
Table
of
Contents
March
31,
2023
IMPORTANT
INFORMATION
An
investment
in
the
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal.
Other
Fund
risks
include
equity
risk,
sector
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,
2023
1
Dear
Payson
Total
Return
Fund
Shareholder,
As
was
the
case
with
the
prior
fiscal
year
for
the
Payson
Total
Return
Fund
(the
Fund),
inflation
and
interest
rates
were
the
primary
drivers
of
stock
and
bond
returns
for
the
Fund’s
fiscal
year
ended
March
31,
2023
(the
“period”).
Even
though
consumers
and
businesses
have
seen
a
meaningful
reduction
in
core
inflation,
which
peaked
in
the
spring
of
2022,
the
Federal
Reserve
has
remained
committed
to
tightening
monetary
policy
to
bring
inflation
down
to
its
long-term
target
of
around
2%.
This
policy
is
designed
to
cool
demand
in
order
to
bring
it
back
into
equilibrium
with
supply.
Naturally,
this
tightening
policy
tends
to
put
pressure
on
corporate
earnings
growth
and
margins,
two
critical
factors
that
influence
stock
valuations,
or
what
investors
are
willing
to
pay
for
a
company’s
anticipated
earnings
and
cash
flow.
All
these
factors
contributed
to
a
challenging
year
for
both
the
US
stock
market
and
the
Payson
Total
Return
Fund.
For
the
past
fiscal
year
ended
March
of
2023,
the
Fund
generated
a
total
return
of
-7.81%.
These
results
were
slightly
less
than
those
posted
by
the
S&P
500
Index
(the
Index)
for
the
same
period,
which
produced
total
returns
of
-7.73%.
With
the
rapidly
changing
interest
rate
dynamics
described
above,
investors
witnessed
dramatic
changes
in
market
leadership
over
the
course
of
the
past
year.
As
the
economy
started
to
slow
in
response
to
the
rise
in
interest
rates,
investors
once
again
returned
to
the
larger
capitalized
companies
within
the
Index.
Given
their
size
relative
to
the
other
Index
constituents,
these
companies
tend
to
have
an
outsized
influence
over
the
market’s
performance.
With
slowing
earnings
growth
becoming
more
evident,
investors
seem
to
have
sought
out
the
safety
of
the
technology
sector
on
the
expectation
that
demand
for
their
products
and
services
will
hold
up
even
if
the
economy
continues
to
recede.
Although
these
companies
are
currently
well
represented
in
the
Fund,
the
Fund’s
portfolio
managers
also
found
value
in
other
sectors
with
attractive
characteristics,
but
these
companies
failed
to
generate
returns
that
matched
that
of
the
larger
technology
companies
particularly
in
the
second
half
of
the
period.
The
portfolio
managers
of
the
Fund,
who
have
been
at
its
helm
for
many
years,
remain
committed
to
the
disciplined
approach
that’s
been
in
place
since
the
Fund’s
inception.
That
approach
involves
constructing
and
maintaining
a
portfolio
of
companies
that
collectively
seek
to
have
superior
characteristics
relative
to
the
Index.
Broadly
speaking,
the
managers
focus
on
the
highest
quality
companies
they
can
find
as
defined
by
high
and
sustainable
margins
and
cash
flow.
Typically,
stocks
with
these
traits
tend
to
perform
well
over
the
long
run
and,
in
particular,
in
down
markets
when
investors
tend
to
flock
to
higher
quality
stocks
with
an
eye
towards
reducing
portfolio
risk.
Importantly,
the
managers
also
evaluate
how
the
companies
they
select
deploy
that
cash
flow,
seeking
out
companies
that
enhance
shareholder
value
whether
it
be
through
timely
stock
repurchases,
above
average
dividend
growth
or
strategic
acquisitions.
Finally,
the
managers
consistently
overlay
valuation
work,
assessing
whether
the
market
is
properly
pricing
these
stocks
given
their
estimate
of
sustainable
cash
flow
growth.
When
evaluating
the
sector
exposures
this
past
fiscal
year
for
the
Fund,
its
higher
than
benchmark
exposures
to
technology
stocks
continued
to
add
positively
to
the
performance
this
past
fiscal
year.
Specifically,
both
CDW
Corporation
and
Broadcom
Inc.
ranked
in
the
top
five
for
positive
contributors
and
the
Fund
continues
to
hold
these
two
stocks.
On
the
other
hand,
the
managers
chose
to
increase
the
weight
in
Health
Care
Payson
Total
Return
Fund
A
Message
to
Our
Shareholders
(Unaudited)
March
31,
2023
2
stocks
throughout
the
period
which
in
fact
helped
results
in
the
first
half
but
ultimately
underperformed
the
market.
The
Fund’s
overweight
in
this
sector
was
the
primary
factor
in
the
Fund’s
underperformance.
CVS
Health
Corp.,
which
has
since
been
sold
from
the
portfolio,
was
the
worst
performing
stock
in
the
Fund
during
the
period.
The
stock
market
bottomed
in
the
fall
of
2022
and
stock
prices
have
begun
to
rise
with
the
growing
expectation
that,
with
the
fall
in
inflation
and
growing
signs
the
economy
is
in
fact
slowing,
the
Federal
Reserve’s
tightening
cycle
may
have
concluded.
In
fact,
many
investors
anticipate
they
may
soon
be
forced
to
cut
interest
rates
to
avoid
a
deep
recession.
Although
the
Fund
managers
avoid
speculating
about
changes
in
Fed
policy
and
the
future
direction
of
interest
rates,
they
do
believe
the
Fed’s
priority
is
to
wring
out
inflationary
expectations,
which
could
take
longer
than
many
investors
expect.
As
such,
the
Fund
managers
remain
cautious
but
committed
to
the
disciplined
approach
that
has
produced
long-term
competitive
returns
for
its
investors.
Payson
Total
Return
Fund
Performance
Chart
and
Analysis
(Unaudited)
March
31,
2023
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.
For
the
most
recent
month-end
performance,
please
call
(800)
805-8258.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
0.82%.
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.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2023
One
Year
Five
Year
Ten
Year
Payson
Total
Return
Fund
-7.81%
12.14%
11.37%
S&P
500®
Index
-7.73%
11.19%
12.24%
Payson
Total
Return
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2023
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,
2023.
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
-
99.6%
Consumer
Discretionary
-
9.1%
3,050
AutoZone,
Inc. (a)
$
7,497,358
28,230
Polaris,
Inc.
3,123,085
37,300
The
Home
Depot,
Inc.
11,007,976
21,628,419
Consumer
Staples
-
7.9%
136,400
Bristol-Myers
Squibb
Co.
9,453,884
45,000
CVS
Health
Corp.
3,343,950
10,325
Thermo
Fisher
Scientific,
Inc.
5,951,020
18,748,854
Energy
-
5.3%
37,160
Chevron
Corp.
6,063,025
70,390
Devon
Energy
Corp.
3,562,438
14,645
Pioneer
Natural
Resources
Co.
2,991,095
12,616,558
Financials
-
16.9%
25,870
American
Express
Co.
4,267,256
21,065
Aon
PLC,
Class A
6,641,584
41,650
Berkshire
Hathaway,
Inc.,
Class B (a)
12,860,271
20,510
Mastercard,
Inc.,
Class A
7,453,539
40,725
Visa,
Inc.,
Class A
9,181,859
40,404,509
Health
Care
-
15.6%
36,735
AbbVie,
Inc.
5,854,457
21,630
Amgen,
Inc.
5,229,052
8,625
Danaher
Corp.
2,173,845
53,300
Johnson
&
Johnson
8,261,500
132,000
Pfizer,
Inc.
5,385,600
21,730
UnitedHealth
Group,
Inc.
10,269,381
37,173,835
Industrials
-
7.1%
47,150
AMETEK,
Inc.
6,852,309
24,237
L3Harris
Technologies,
Inc.
4,756,269
64,000
Otis
Worldwide
Corp.
5,401,600
17,010,178
Shares
Security
Description
Value
Information
Technology
-
37.7%
11,220
Accenture
PLC,
Class A
$
3,206,788
133,700
Alphabet,
Inc.,
Class A (a)
13,868,701
71,425
Apple,
Inc.
11,777,982
24,560
Broadcom,
Inc.
15,756,222
44,010
CDW
Corp.
8,577,109
168,726
HP,
Inc.
4,952,108
18,000
Lam
Research
Corp.
9,542,160
23,215
Microsoft
Corp.
6,692,885
13,800
NVIDIA
Corp.
3,833,226
40,000
Taiwan
Semiconductor
Manufacturing
Co.,
Ltd.,
ADR
3,720,800
42,760
Texas
Instruments,
Inc.
7,953,788
89,881,769
Total
Common
Stock
(Cost
$174,400,145)
237,464,122
Investments,
at
value
-
99.6%
(Cost
$174,400,145)
$
237,464,122
Other
Assets
&
Liabilities,
Net
-
0.4%
951,213
Net
Assets
-
100.0%
$
238,415,335
ADR
American
Depositary
Receipt
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
237,464,122
Level
2
-
Other
Significant
Observable
Inputs
–
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
237,464,122
Payson
Total
Return
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2023
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.
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Total
Investments
Consumer
Discretionary
9.1%
Consumer
Staples
7.9%
Energy
5.3%
Financials
17.0%
Health
Care
15.7%
Industrials
7.2%
Information
Technology
37.8%
100.0%
Payson
Total
Return
Fund
Statement
of
Assets
and
Liabilities
March
31,
2023
See
Notes
to
Financial
Statements.
6
ASSETS
Investments,
at
value
(Cost
$174,400,145)
$
237,464,122
Cash
1,059,755
Receivables:
Fund
shares
sold
342,619
Dividends
and
interest
144,850
Prepaid
expenses
10,833
Total
Assets
239,022,179
LIABILITIES
Payables:
Fund
shares
redeemed
119,204
Distributions
payable
290,534
Accrued
Liabilities:
Investment
adviser
fees
127,712
Fund
services
fees
29,460
Other
expenses
39,934
Total
Liabilities
606,844
NET
ASSETS
$
238,415,335
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
175,549,218
Distributable
Earnings
62,866,117
NET
ASSETS
$
238,415,335
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
9,632,398
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
$
24.75
Payson
Total
Return
Fund
Statement
of
Operations
YEAR
ENDED
MARCH
31,
2023
See
Notes
to
Financial
Statements.
7
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$8,993)
$
4,588,386
Interest
income
269,381
Total
Investment
Income
4,857,767
EXPENSES
Investment
adviser
fees
1,467,751
Fund
services
fees
342,536
Custodian
fees
25,543
Registration
fees
25,137
Professional
fees
50,479
Trustees'
fees
and
expenses
9,847
Other
expenses
73,218
Total
Expenses
1,994,511
NET
INVESTMENT
INCOME
2,863,256
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
on
investments
1,585,856
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
(21,276,307)
NET
REALIZED
AND
UNREALIZED
LOSS
(19,690,451)
DECREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(16,827,195)
Payson
Total
Return
Fund
Statements
of
Changes
in
Net
Assets
See
Notes
to
Financial
Statements.
8
For
the
Years
Ended
March
31,
2023
2022
OPERATIONS
Net
investment
income
$
2,863,256
$
1,146,865
Net
realized
gain
1,585,856
8,833,278
Net
change
in
unrealized
appreciation
(depreciation)
(21,276,307)
19,050,642
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(16,827,195)
29,030,785
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(6,059,082)
(27,030,027)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
79,389,467
106,438,422
Reinvestment
of
distributions
4,924,970
25,286,406
Redemption
of
shares
(45,357,046)
(82,204,939)
Increase
in
Net
Assets
from
Capital
Share
Transactions
38,957,391
49,519,889
Increase
in
Net
Assets
16,071,114
51,520,647
NET
ASSETS
Beginning
of
Year
222,344,221
170,823,574
End
of
Year
$
238,415,335
$
222,344,221
SHARE
TRANSACTIONS
Sale
of
shares
3,211,535
3,737,849
Reinvestment
of
distributions
199,667
907,730
Redemption
of
shares
(1,865,222)
(2,839,986)
Increase
in
Shares
1,545,980
1,805,593
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,
2023
2022
2021
2020
2019
NET
ASSET
VALUE,
Beginning
of
Year
$
27.50
$
27.20
$
18.17
$
19.37
$
17.76
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.29
0.14
0.17
0.15
0.13
Net
realized
and
unrealized
gain
(loss)
(2.45)
3.92
10.75
(1.20)
1.61
Total
from
Investment
Operations
(2.16)
4.06
10.92
(1.05)
1.74
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.28)
(0.14)
(0.17)
(0.15)
(0.13)
Net
realized
gain
(0.31)
(3.62)
(1.72)
–
–
Total
Distributions
to
Shareholders
(0.59)
(3.76)
(1.89)
(0.15)
(0.13)
NET
ASSET
VALUE,
End
of
Year
$
24.75
$
27.50
$
27.20
$
18.17
$
19.37
TOTAL
RETURN
(7.81)%
14.82%
61.37%
(5.48)%
9.83%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
238,415
$
222,344
$
170,824
$
104,475
$
108,910
Ratios
to
Average
Net
Assets:
Net
investment
income
1.17%
0.50%
0.72%
0.74%
0.71%
Net
expenses
0.82%
0.82%
0.85%
0.86%
0.89%
PORTFOLIO
TURNOVER
RATE
51%
87%
64%
25%
27%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2023
10
Note
1.
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.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
Accounting
Standards
Codification
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.
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Trust’s
Board
of
Trustees
(the
“Board”)
has
designated
the
Adviser,
as
defined
in
Note
4,
as
the
Fund’s
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
the
Fund.
The
Adviser
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Adviser’s
fair
value
determinations.
The
Adviser
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Adviser
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
Board
has
approved
the
Adviser’s
fair
valuation
procedures
as
a
part
of
the
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Adviser
provides
fair
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
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2023
11
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Adviser
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
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,
2023,
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.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2023
12
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,
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,
2023,
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.
Note
3.
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,
2023,
the
Fund
had
$809,755
at
U.S.
Bank,
N.A.
that
exceeded
the
FDIC
insurance
limit.
Note
4.
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.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2023
13
Distribution
–
Foreside
Fund
Services,
LLC
(the
“Distributor”)
acts
as
the
agent
of
the
Trust
in
connection
with
the
continuous
offering
of
shares
of
the
Fund.
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.
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
–
Each
Independent
Trustee’s
annual
retainer
is
$45,000
($55,000
for
the
Chairman),
and
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.
Note
5.
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,
2023
were
$155,026,735
and
$119,387,412,
respectively.
Note
6.
Federal
Income
Tax
As
of
March
31,
2023,
the
cost
of
investments
for
federal
income
tax
purposes
is
$174,400,145 and
the
components
of
net
unrealized appreciation were
as
follows:
Gross
Unrealized
Appreciation
$
67,343,025
Gross
Unrealized
Depreciation
(4,279,048)
Net
Unrealized
Appreciation
$
63,063,977
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2023
14
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
As
of
March
31,
2023
,
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.
As
of
March
31,
2023,
the
Fund
had
$197,778
of
available
short-term
capital
loss
carryforwards
that
have
no
expiration
date.
Note
7.
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.
2023
2022
Ordinary
Income
$
2,742,855
$
5,176,793
Long-Term
Capital
Gain
3,195,763
21,826,392
$
5,938,618
$
27,003,185
Undistributed
Ordinary
Income
$
290,452
Capital
and
Other
Losses
(197,778)
Unrealized
Appreciation
63,063,977
Other
Temporary
Differences
(290,534)
Total
$
62,866,117
Report
of
Independent
Registered
Public
Accounting
Firm
15
To
the
Shareholders
of
Payson
Total
Return
Fund
and
Board
of
Trustees
of
Forum
Funds
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities,
including
the
schedule
of
investments,
of
Forum
Funds,
comprising
Payson
Total
Return
Fund
(the
“Fund”),
as
of
March
31,
2023,
and
the
related
statements
of
operations
and
changes
in
net
assets,
the
related
notes,
and
the
financial
highlights
for
the
year
then
ended
(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,
2023,
and
the
results
of
its
operations,
changes
in
net
assets,
and
the
financial
highlights
for
the
year
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
The
Fund’s
financial
statements
and
financial
highlights
for
the
years
ended
March
31,
2022,
and
prior,
were
audited
by
other
auditors
whose
report
dated
May
26,
2022,
expressed
an
unqualified
opinion
on
those
financial
statements
and
financial
highlights.
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
audit.
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
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audit
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement
whether
due
to
error
or
fraud.
Report
of
Independent
Registered
Public
Accounting
Firm
16
Our
audit
included
performing
procedures
to
assess
the
risks
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,
2023,
by
correspondence
with
the
custodian.
Our
audit
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
audit
provides
a
reasonable
basis
for
our
opinion.
We
have
served
as
the
Fund’s
auditor
since
2023.
COHEN
&
COMPANY,
LTD.
Philadelphia,
Pennsylvania
May
30,
2023
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2023
17
Change
in
Independent
Registered
Public
Accounting
Firm
On
March
9,
2023,
BBD
LLP
(“BBD”)
ceased
to
serve
as
the
independent
registered
public
accounting
firm
of
the
Fund,
a
series
of
Forum
Funds.
The
Audit
Committee
of
the
Board
of
Directors
approved
the
replacement
of
BBD
as
a
result
of
Cohen
&
Company,
Ltd.’s
(“Cohen”)
acquisition
of
BBD’s
investment
management
group.
The
reports
of
BBD
on
the
financial
statements
of
the
Fund
as
of
and
for
the
fiscal
years
ended
March
31,
2022
and
March
31,
2021
did
not
contain
an
adverse
opinion
or
a
disclaimer
of
opinion,
and
were
not
qualified
or
modified
as
to
uncertainties,
audit
scope
or
accounting
principles.
During
the
years
ended
March
31,
2022
and
March
31,
2021,
and
during
the
subsequent
interim
period
through
March
9,
2023:
(i)
there
were
no
disagreements
between
the
Trust
and
BBD
on
any
matter
of
accounting
principles
or
practices,
financial
statement
disclosure,
or
auditing
scope
or
procedure,
which
disagreements,
if
not
resolved
to
the
satisfaction
of
BBD,
would
have
caused
it
to
make
reference
to
the
subject
matter
of
the
disagreements
in
its
report
on
the
financial
statements
of
the
Fund
for
such
years
or
interim
period;
and
(ii)
there
were
no
“reportable
events,”
as
defined
in
Item
304(a)(1)(v)
of
Regulation
S-K
under
the
Securities
Exchange
Act
of
1934,
as
amended.
The
Trust
requested
that
BBD
furnish
it
with
a
letter
addressed
to
the
U.S.
Securities
and
Exchange
Commission
stating
that
it
agrees
with
the
above
statements.
A
copy
of
such
letter
is
filed
as
an
exhibit
to
Form
N-CSR.
On
March
17,
2023,
the
Audit
Committee
of
the
Board
of
Directors
also
recommended
and
approved
the
appointment
of
Cohen
as
the
Fund’s
independent
registered
public
accounting
firm
for
the
fiscal
year
ending
March
31,
2023.
During
the
fiscal
years
ended
March
31,
2022
and
March
31,
2021,
and
during
the
subsequent
interim
period
through
March
9,
2023,
neither
the
Trust,
nor
anyone
acting
on
its
behalf,
consulted
with
Cohen
on
behalf
of
the
of
Fund
regarding
the
application
of
accounting
principles
to
a
specified
transaction
(either
completed
or
proposed),
the
type
of
audit
opinion
that
might
be
rendered
on
the
Fund’s
financial
statements,
or
any
matter
that
was
either:
(i)
the
subject
of
a
“disagreement,”
as
defined
in
Item
304(a)(1)(iv)
of
Regulation
S-K
and
the
instructions
thereto;
or
(ii)
"reportable
events,"
as
defined
in
Item
304(a)(1)(v)
of
Regulation
S-K.
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.
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2023
18
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,
2022
through
March
31,
2023.
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,
2023
19
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
99.07
%
of
its
income
dividend
distributed
as
qualifying
for
the
corporate
dividends
received
deduction
(DRD)
and
99.30
%
for
the
qualified
dividend
rate
(QDI)
as
defined
in
Section
1(h)(11)
of
the
Code.
The
Fund
also
designates
5.20
%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
The
Fund
paid
long-term
capital
gain
dividends
of
$3,195,763.
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,
2022
Ending
Account
Value
March
31,
2023
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,128.40
$
4.35
0.82%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,020.84
$
4.13
0.82%
*
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,
2023
20
(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
Independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
since
2021;
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
2017-2021.
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,
2023
21
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
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.
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.apexgroup.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-0323
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 $79,300 in 2022 and $99,600 in 2023.
(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 2022 and $0 in 2023.
(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 $15,000 in 2022 and $18,600 in 2023. 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 2022 and $0 in 2023.
(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 2022 and $0 in 2023. 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.
ITEM 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 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)(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/ Zachary Tackett | |
Zachary Tackett, Principal Executive Officer | ||
Date: | July 7, 2023 |
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/ Zachary Tackett | |
Zachary Tackett, Principal Executive Officer | ||
Date: | July 7, 2023 |
By: | /s/ Karen Shaw | |
Karen Shaw, Principal Financial Officer | ||
Date: | July 7, 2023 |