As filed with the Securities and Exchange Commission on February 26, 2021
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON
, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-03023
FORUM FUNDS
Three Canal Plaza, Suite 600
Portland
, Maine 04101
Jessica Chase, Principal Executive Officer
Three Canal Plaza, Suite 600
Portland
, Maine 04101
207-347-2000
Date of fiscal year end: December 31
Date of reporting period: January 1, 2020 – December 31, 2020
ITEM 1. REPORT TO STOCKHOLDERS.
Lisanti
Small
Cap
Growth
Fund
Annual
Report
December
31,
2020
Lisanti
Small
Cap
Growth
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
December
31,
2020
1
Dear
Shareholder,
The
second
half
of
2020
saw
smaller
growth
stocks
continue
to
appreciate
very
strongly.
The
Russell
2000
Growth
Index
rose
over
38.88%,
as
investors
began
to
look
towards
re-opening
and
it
became
clear
that
vaccines
would
be
effective
against
the
Coronavirus.
The
fourth
quarter
of
2020
was
particularly
strong
for
smaller
growth
companies;
the
Russell
2000
Growth
Index
rose
29.61%,
as
the
United
States
moved
closer
to
vaccine
distribution,
and
the
Democrats
won
the
Presidential
election.
The
Lisanti
Small
Cap
Growth
Fund
(“Fund”)
outperformed
its
benchmark,
the
Russell
2000
Growth
Index,
(“Index”),
returning
40.99%
net
versus
38.88%
for
the
Index.
During
the
six
month
period,
Health-Care
was
of
most
benefit
to
the
Fund,
followed
by
Consumer
Staples,
while
the
Consumer
Discretionary
and
Communications
Services
sectors
detracted
from
performance.
Early
in
the
pandemic,
we
overweighted
the
“work
from
home”
beneficiaries
of
the
crisis.
However,
the
“growth
cyclical”
areas
of
the
economy
were
hit
much
harder
than
the
companies
perceived
to
have
defensive
growth
characteristics.
Our
process
pushes
us
to
look
for
companies
that
are
being
“mispriced”
relative
to
their
growth
prospects.
Thus,
as
we
moved
through
the
year,
we
tilted
more
towards
the
growth
cyclicals,
which
included
Consumer
Discretionary
and
Semiconductors.
As
the
effects
of
the
Coronavirus
on
the
economy
began
to
become
clearer,
the
market
bifurcated:
those
companies
that
were
perceived
to
be
beneficiaries
of
the
“shelter
in
place”
orders
outperformed,
while
those
that
were
perceived
to
be
victims
of
these
orders
declined
precipitously.
As
the
economy
began
to
reopen,
the
market
broadened
out
to
include
some
of
the
more
economically
challenged
sectors;
however,
the
companies
viewed
as
winners
in
this
pandemic
continued
to
outperform.
As
we
look
toward
2021
and
the
next
few
years,
we
have
several
observations
on
the
investing
landscape:
Having
a
Democrat
in
the
White
House,
combined
with
a
majority,
however
slim,
in
the
Senate
and
Congress
creates
an
environment
which
may
lead
to
more
government
programs
to
help
the
economy
recover
from
the
crisis
and
address
some
of
the
economic
inequities
the
move
toward
a
digital
economy
has
created.
Indeed,
the
new
Administration
strikes
us
as
the
first
in
a
long
time
that
will
use
government
policy
to
effect
economic
change.
It
has
been
many
years
since
we
have
seen
this
strategy
employed
to
the
extent
we
believe
it
will
be
attempted
with
the
new
Administration,
based
on
our
research,
and
we
believe
it
will
cause
some
opportunities
and
dislocations
within
different
sectors
of
the
economy
as
we
move
through
the
next
four
years.
As
our
economy
and
society
attempt
to
return
to
the
“new
normal”,
we
find
it
useful
to
remember
that
the
six
economic
crises
we
have
experienced
in
our
career
have
had
several
commonalities:
Lisanti
Small
Cap
Growth
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
December
31,
2020
2
We
believe
that
this
crisis
will
accelerate
the
changes
that
have
been
occurring
more
slowly
before
the
pandemic.
We
are
particularly
focused
on
companies
that
will
benefit
from
the
social
and
economic
trends
that,
based
on
our
research,
we
believe
will
accelerate
as
a
result
of
the
pandemic
and
be
lasting:
A
More
Digital
World:
We
believe
that
the
pandemic
caused
many
companies
and
consumers
to
move
many
aspects
of
their
business
processes/lives
online.
For
businesses,
we
saw
a
swift
pivot
to
digital
marketing,
with
virtual
training
and
sales
calls
becoming
a
fact
of
life.
For
consumers,
ordering
everything
online
became
an
essential
part
of
life,
particularly
in
the
more
populated
cities
or
for
those
individuals
deemed
at
higher
risk.
The
Biotech
Revolution:
We
believe
that
the
pandemic
has
focused
investor
attention
on
the
progress
that
has
been
made
in
the
development
of
biotechnology
drugs
over
the
past
decade.
With
the
advent
of
targeted
therapies,
drug
development
has
become
much
more
precise,
shortening
time
to
market
and
improving
the
success
of
biotech
drug
development
dramatically.
We
believe
that
the
same
transformation
is
occurring
in
diagnostic
tools,
enabling
earlier
identification
of
disease.
Our
research
indicates
that
the
integration
of
artificial
intelligence
(“AI”)
will
further
accelerate
the
development
cycle
and
further
improve
the
accuracy
of
identification
and
effectiveness
of
medicine,
enabling
a
“virtuous
circle”
where
accelerating
innovation
drives
increasing
returns.
The
Ubiquitous
Semiconductor:
We
believe
that
demand
for
semiconductors
is
about
to
take
a
secular
jump
upwards.
Semiconductors
have
long
been
viewed
(and
priced)
as
“growth
cyclicals.”
However,
the
advent
of
AI,
and
the
continued
global
rollout
of
the
5G
wireless
infrastructure,
which
was
interrupted
by
the
pandemic,
1)
When
the
Government
and
the
Federal
Reserve
want
a
particular
outcome,
they
usually
get
it—although
it
may
take
longer
and
be
messier
than
the
investors
like.
(Our
observation
is
that
getting
a
large
number
of
people
to
work
together
is
a
messy,
difficult
task
and
watching
it
unfold
can
be
nerve-wracking.)
2)
Human
emotions
go
through
a
cycle—disbelief,
disregard,
shock,
fear,
and,
ultimately,
despair,
before
coming
out
the
other
side.
The
financial
markets
also
go
through
a
similar
cycle,
which
requires
time
and
tends
to
create
volatility.
3)
In
every
crisis,
there
is
a
part
of
the
economy
that
is
secularly
disadvantaged
and
does
not
recover
until
it
restructures,
cut
costs,
etc.
In
2000-2003,
it
was
technology;
in
2008-2009,
it
was
housing
and
banks;
in
this
crisis,
it
appears
to
be
those
industries
related
to
leisure
activities
that
will
be
impacted
by
the
virus—airlines,
hotels,
restaurants,
etc.
The
important
point,
in
our
opinion,
is
that
other
parts
of
the
economy
continued
to
grow,
and
eventually
offset
the
decline
of
these
industries—the
economy
adapted
and
recovered,
regardless.
Lisanti
Small
Cap
Growth
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
December
31,
2020
3
are
both
significant
drivers
of
growth
by
themselves.
Combined,
they
could
create
very
powerful
tailwinds
for
many
years
for
semiconductor
companies.
We
look
for
companies
that
have
three
components:
strong
secular
trends
driving
their
growth
(secular
growth
stocks);
companies
that
are
able
to
drive
growth
through
their
own
internal
initiatives
(structural
growth
stocks);
and
those
companies
that
are
in
the
midst
of
operational
improvements/turnarounds
(transformational
growth).
Within
those
“three
buckets”,
we
are
particularly
focused
on
companies
benefitting
from
the
above
secular
tailwinds.
We
are
struck
by
the
innovation
and
creativity
we
have
seen
from
companies
we
have
researched
over
the
past
year;
we
believe
that
this
may
be
a
precursor
to
an
economy
that
emerges
reinvigorated,
buttressed
by
consumer
spending
and
government
support,
driven
by
innovation.
This
would
imply
that
productivity
improves
sharply
and
therefore
growth
is
much
stronger
for
longer
than
economists
and
strategists
are
currently
predicting.
While
we
have
no
crystal
ball,
we
believe
that
this
scenario
is
indeed
possible;
were
it
to
become
reality,
we
believe
it
would
be
extremely
positive
for
smaller
growth
companies.
As
we
look
out
to
2021,
we
continue
to
expect
more
dispersion
among
returns
for
individual
stocks,
which
we
believe
will
make
2021
(once
again)
a
stock
picker’s
market.
We
continue
to
expect
companies
to
see
their
“earnings
recovery”
at
different
times:
for
some
companies,
the
earnings
recovery
will
come
in
2021,
while
for
some
companies
and
sectors
it
may
not
appear
until
2023.
If
this
thesis
is
correct,
we
believe
it
provides
a
great
backdrop
for
an
active
manager.
We
continue
to
believe
the
environment
will
contain
a
lot
of
cross
currents,
as
cyclical
and
secular
trends
intersect
and
the
government
becomes
more
involved
in
the
economy
than
it
has
been
previously;
we
expect
the
market
to
be
volatile
at
times,
as
investors
sort
through
the
implications
of
these
changes.
We
remain
vigilant
as
to
the
risks
in
the
market
and
focused
on
identifying
those
companies
whose
returns
are
being
driven
by
secular,
structural,
and
transformative
changes.
We
continue
to
work
hard
on
your
behalf;
we
thank
you
for
your
investment
in
the
Fund
and
the
opportunity
to
do
so.
All
of
us
at
Lisanti
Capital
Growth
wish
that
you
and
yours
stay
safe
and
well
through
this
situation.
Sincerely,
Mary
Lisanti
,
CFA
President
&
Portfolio
Manager
Lisanti
Small
Cap
Growth
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
December
31,
2020
4
IMPORTANT
RISKS
AND
DISCLOSURES
An
investment
in
the
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal
amount
invested.
The
Fund
invests
in
smaller
companies,
which
carry
greater
risk
than
is
associated
with
larger
companies
for
various
reasons
such
as
narrower
markets,
limited
financial
resources
and
less
liquid
stock.
The
Fund’s
investments
in
growth
securities
may
be
more
sensitive
to
company
earnings
and
more
volatile
than
the
market
in
general.
Investments
in
technology
companies
are
vulnerable
to
factors
affecting
that
sector,
such
as
dependency
on
consumer
and
business
acceptance
as
new
technology
evolves.
Investments
in
the
Industrial
sector
can
be
significantly
affected
by
business
cycle
fluctuations,
worldwide
economy
growth,
government
and
corporate
spending
and
others.
Investments
in
Health-Care
companies
may
be
affected
by
government
regulations
and
government
health-care
programs,
changes
in
the
cost
of
medical
products
and
services,
limited
product
lines,
product
liability
claims,
and
patent
protection,
among
other
factors.
The
views
in
this
report
were
those
of
the
Fund
manager
as
of
December
31,
2020
,
and
may
not
necessarily
reflect
her
views
on
the
date
this
report
is
first
published
or
anytime
thereafter.
These
views
are
intended
to
assist
shareholders
in
understanding
the
Fund’s
investment
methodology
and
do
not
constitute
investment
advice.
Although
the
Fund
manager
believes
she
has
a
reasonable
basis
for
any
opinions
or
views
expressed,
actual
results
may
differ,
sometimes
significantly
so,
from
those
expected
or
expressed.
All
current
and
future
holdings
of
the
Fund
are
subject
to
risk
and
are
subject
to
change.
Lisanti
Small
Cap
Growth
Fund
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
December
31,
2020
5
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
the
Lisanti
Small
Cap
Growth
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
Russell
2000
Growth
Index
(“Russell
2000
Growth”),
over
the
past
ten
fiscal
years.
The
Russell
2000
Growth,
the
Fund‘s
primary
performance
benchmark,
measures
the
performance
of
those
Russell
2000
Growth
companies
with
higher
price-to-value
ratios
and
higher
forecasted
growth
values.
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
Lisanti
Small
Cap
Growth
Fund
vs.
Russell
2000
Growth
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.98%.
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,
proxy
expenses,
and
extraordinary
expenses)
to
1.35%,
through
April
30,
2021
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
adviser
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
Expense
Cap
and
(ii)
the
Expense
Cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
Shares
redeemed
or
exchanged
within
30
days
of
purchase
will
be
charged
a
1.00%
redemption
fee.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(800)
441-7031.
Average
Annual
Total
Returns
Periods
Ended
December
31,
2020
One
Year
Five
Year
Ten
Year
Lisanti
Small
Cap
Growth
Fund
52.85%
20.90%
15.61%
Russell
2000
Growth
Index
34.63%
16.36%
13.48%
Lisanti
Small
Cap
Growth
Fund
SCHEDULE
OF
INVESTMENTS
December
31,
2020
6
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
96.4%
Communication
Services
-
1.2%
6,845
Cardlytics,
Inc.
(a)
$
977,261
Consumer
Discretionary
-
16.7%
41,935
Academy
Sports
&
Outdoors,
Inc.
(a)
869,313
18,270
Bed
Bath
&
Beyond,
Inc.
324,475
30,395
Boot
Barn
Holdings,
Inc.
(a)
1,317,927
6,950
Brinker
International,
Inc.
393,161
18,075
Crocs,
Inc.
(a)
1,132,580
2,045
Deckers
Outdoor
Corp.
(a)
586,465
6,875
Five
Below,
Inc.
(a)
1,202,988
8,785
Floor
&
Decor
Holdings,
Inc.,
Class A
(a)
815,687
36,155
Leslie's,
Inc.
(a)
1,003,301
3,055
Lithia
Motors,
Inc.,
Class A
894,107
15,760
National
Vision
Holdings,
Inc.
(a)
713,770
4,680
Planet
Fitness,
Inc.,
Class A
(a)
363,308
6,815
Stitch
Fix,
Inc.,
Class A
(a)
400,177
12,520
Tapestry,
Inc.
389,122
13,050
Texas
Roadhouse,
Inc.
1,019,988
10,905
The
Cheesecake
Factory,
Inc.
404,139
4,525
The
Children's
Place,
Inc.
(a)
226,702
3,195
TopBuild
Corp.
(a)
588,136
17,285
YETI
Holdings,
Inc.
(a)
1,183,504
13,828,850
Consumer
Staples
-
1.6%
9,200
Freshpet,
Inc.
(a)
1,306,308
Energy
-
2.2%
13,310
Array
Technologies,
Inc.
(a)
574,194
23,645
TPI
Composites,
Inc.
(a)
1,247,983
1,822,177
Financial
Services
-
1.5%
6,168
Kinsale
Capital
Group,
Inc.
1,234,402
Financials
-
2.1%
3,660
Goosehead
Insurance,
Inc.,
Class A
456,622
13,470
Green
Dot
Corp.,
Class A
(a)
751,626
4,175
Lemonade,
Inc.
(a)
511,437
1,719,685
Health-Care
-
1.2%
49,195
Ocular
Therapeutix,
Inc.
(a)
1,018,337
Health-Care
Equipment
&
Services
-
11.8%
19,615
AdaptHealth
Corp.
(a)
736,740
9,115
BioLife
Solutions,
Inc.
(a)
363,597
8,695
Certara,
Inc.
(a)
293,195
7,145
Eargo,
Inc.
(a)
320,239
13,315
Inari
Medical,
Inc.
(a)
1,162,266
Shares
Security
Description
Value
Health-Care
Equipment
&
Services
-
11.8%
(continued)
7,685
Inspire
Medical
Systems,
Inc.
(a)
$
1,445,472
7,400
Nevro
Corp.
(a)
1,280,940
26,805
Pulmonx
Corp.
(a)
1,850,081
9,250
Schrodinger,
Inc./U.S.
(a)
732,415
9,600
Shockwave
Medical,
Inc.
(a)
995,712
21,280
SI-BONE,
Inc.
(a)
636,272
9,816,929
Industrials
-
20.0%
11,585
Advanced
Drainage
Systems,
Inc.
968,274
7,770
Advanced
Energy
Industries,
Inc.
(a)
753,457
8,460
Allegiant
Travel
Co.
1,600,970
12,340
Astec
Industries,
Inc.
714,239
20,185
Builders
FirstSource,
Inc.
(a)
823,750
8,510
Casella
Waste
Systems,
Inc.
(a)
527,195
10,560
Chart
Industries,
Inc.
(a)
1,243,862
8,145
CryoPort,
Inc.
(a)
357,403
3,080
Generac
Holdings,
Inc.
(a)
700,423
5,770
John
Bean
Technologies
Corp.
657,030
15,190
Kornit
Digital,
Ltd.
(a)
1,353,885
19,770
Montrose
Environmental
Group,
Inc.
(a)
612,079
19,005
nLight,
Inc.
(a)
620,513
10,425
Patrick
Industries,
Inc.
712,549
25,395
Plug
Power,
Inc.
(a)
861,144
2,490
RBC
Bearings,
Inc.
(a)
445,810
7,205
Saia,
Inc.
(a)
1,302,664
7,365
SiteOne
Landscape
Supply,
Inc.
(a)
1,168,310
21,175
Terex
Corp.
738,796
14,540
The
Shyft
Group,
Inc.
412,645
16,574,998
Information
Technology
-
5.3%
8,330
Cerence,
Inc.
(a)
836,998
22,070
MACOM
Technology
Solutions
Holdings,
Inc.
(a)
1,214,733
2,060
Monolithic
Power
Systems,
Inc.
754,434
9,740
Varonis
Systems,
Inc.
(a)
1,593,561
4,399,726
Materials
-
1.0%
43,950
Livent
Corp.
(a)
828,018
Pharmaceuticals,
Biotechnology
&
Life
Sciences
-
15.0%
3,420
908
Devices,
Inc.
(a)
194,769
21,305
Amicus
Therapeutics,
Inc.
(a)
491,933
16,215
Apellis
Pharmaceuticals,
Inc.
(a)
927,498
7,325
Arrowhead
Pharmaceuticals,
Inc.
(a)
562,047
9,675
CareDx,
Inc.
(a)
700,954
15,140
Denali
Therapeutics,
Inc.
(a)
1,268,126
5,315
Mirati
Therapeutics,
Inc.
(a)
1,167,387
13,240
NanoString
Technologies,
Inc.
(a)
885,491
Lisanti
Small
Cap
Growth
Fund
SCHEDULE
OF
INVESTMENTS
December
31,
2020
7
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
December
31,
2020.
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
is
Common
Stock.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
Shares
Security
Description
Value
Pharmaceuticals,
Biotechnology
&
Life
Sciences
-
15.0%
(continued)
16,890
Natera,
Inc.
(a)
$
1,680,893
15,630
NeoGenomics,
Inc.
(a)
841,519
5,315
Repligen
Corp.
(a)
1,018,513
11,530
Rocket
Pharmaceuticals,
Inc.
(a)
632,305
7,040
Turning
Point
Therapeutics,
Inc.
(a)
857,824
8,525
Veracyte,
Inc.
(a)
417,214
27,005
Vericel
Corp.
(a)
833,914
12,480,387
Technology
-
16.8%
6,555
Ambarella,
Inc.
(a)
601,880
24,835
Asana,
Inc.
(a)
733,874
4,785
Brooks
Automation,
Inc.
324,662
190
C3.ai,
Inc.,
Class A
(a)
26,363
9,095
Health
Catalyst,
Inc.
(a)
395,905
21,870
II-VI,
Inc.
(a)
1,661,245
29,125
Lattice
Semiconductor
Corp.
(a)
1,334,508
6,310
Lightspeed
POS,
Inc.
(a)
444,161
49,885
MaxLinear,
Inc.
(a)
1,905,108
24,755
PagerDuty,
Inc.
(a)
1,032,284
6,280
Q2
Holdings,
Inc.
(a)
794,608
15,445
Sailpoint
Technologies
Holdings,
Inc.
(a)
822,292
10,405
Semtech
Corp.
(a)
750,096
13,010
SiTime
Corp.
(a)
1,456,209
21,590
Sprout
Social,
Inc.,
Class A
(a)
980,402
24,570
SunPower
Corp.
(a)
629,975
13,893,572
Total
Common
Stock
(Cost
$58,721,241)
79,900,650
Investments,
at
value
-
96.4%
(Cost
$58,721,241)
$
79,900,650
Other
Assets
&
Liabilities,
Net
-
3.6%
3,024,815
Net
Assets
-
100.0%
$
82,925,465
(a)
Non-income
producing
security.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
79,900,650
Level
2
-
Other
Significant
Observable
Inputs
–
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
79,900,650
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Total
Investments
Communication
Services
1.2%
Consumer
Discretionary
17.3%
Consumer
Staples
1.6%
Energy
2.3%
Financial
Services
1.6%
Financials
2.2%
Health-Care
1.3%
Health-Care
Equipment
&
Services
12.3%
Industrials
20.7%
Information
Technology
5.5%
Materials
1.0%
Pharmaceuticals,
Biotechnology
&
Life
Sciences
15.6%
Technology
17.4%
100.0%
Lisanti
Small
Cap
Growth
Fund
STATEMENT
OF
ASSETS
AND
LIABILITIES
December
31,
2020
8
See
Notes
to
Financial
Statements.
ASSETS
Investments,
at
value
(Cost
$58,721,241)
$
79,900,650
Cash
7,508,370
Receivables:
Fund
shares
sold
10,445
Dividends
and
interest
1,443
Prepaid
expenses
11,924
Total
Assets
87,432,832
LIABILITIES
Payables:
Investment
securities
purchased
4,366,585
Fund
shares
redeemed
18,247
Accrued
Liabilities:
Investment
adviser
fees
59,923
Fund
services
fees
13,127
Other
expenses
49,485
Total
Liabilities
4,507,367
NET
ASSETS
$
82,925,465
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
51,201,465
Distributable
earnings
31,724,000
NET
ASSETS
$
82,925,465
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
2,678,441
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE*
$
30.96
*
Shares
redeemed
or
exchanged
within
30
days
of
purchase
are
charged
a
1.00%
redemption
fee.
Lisanti
Small
Cap
Growth
Fund
STATEMENT
OF
OPERATIONS
YEAR
ENDED
DECEMBER
31,
2020
9
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
$
109,610
Interest
income
4,340
Total
Investment
Income
113,950
EXPENSES
Investment
adviser
fees
607,950
Fund
services
fees
240,618
Shareholder
service
fees
159,987
Custodian
fees
7,281
Registration
fees
25,694
Professional
fees
41,026
Trustees'
fees
and
expenses
4,715
Other
expenses
52,296
Total
Expenses
1,139,567
Fees
waived
(275,568)
Net
Expenses
863,999
NET
INVESTMENT
LOSS
(750,049)
NET
REALIZED
AND
UNREALIZED
GAIN
Net
realized
gain
on
investments
17,663,499
Net
change
in
unrealized
appreciation
on
investments
15,685,158
NET
REALIZED
AND
UNREALIZED
GAIN
33,348,657
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
32,598,608
Lisanti
Small
Cap
Growth
Fund
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
10
See
Notes
to
Financial
Statements.
For
the
Years
Ended
December
31,
2020
2019
OPERATIONS
Net
investment
loss
$
(750,049)
$
(529,405)
Net
realized
gain
17,663,499
2,271,514
Net
change
in
unrealized
appreciation
15,685,158
7,315,554
Increase
in
Net
Assets
Resulting
from
Operations
32,598,608
9,057,663
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(6,061,866)
(1,076,692)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
29,986,098
14,463,091
Reinvestment
of
distributions
5,223,300
998,703
Redemption
of
shares
(29,460,550)
(6,607,821)
Redemption
fees
2,383
1,741
Increase
in
Net
Assets
from
Capital
Share
Transactions
5,751,231
8,855,714
Increase
in
Net
Assets
32,287,973
16,836,685
NET
ASSETS
Beginning
of
Year
50,637,492
33,800,807
End
of
Year
$
82,925,465
$
50,637,492
SHARE
TRANSACTIONS
Sale
of
shares
1,334,920
683,112
Reinvestment
of
distributions
177,724
46,734
Redemption
of
shares
(1,161,159)
(311,546)
Increase
in
Shares
351,485
418,300
Lisanti
Small
Cap
Growth
Fund
FINANCIAL
HIGHLIGHTS
11
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
December
31,
2020
2019
2018
2017
2016
NET
ASSET
VALUE,
Beginning
of
Year
$
21.76
$
17.71
$
18.81
$
18.74
$
17.75
INVESTMENT
OPERATIONS
Net
investment
loss
(a)
(0.28)
(0.25)
(0.21)
(0.33)
(0.25)
Net
realized
and
unrealized
gain
(loss)
11.66
4.78
(0.12)
5.43
1.55
Total
from
Investment
Operations
11.38
4.53
(0.33)
5.10
1.30
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
realized
gain
(2.18)
(0.48)
(0.77)
(5.03)
(0.31)
Total
Distributions
to
Shareholders
(2.18)
(0.48)
(0.77)
(5.03)
(0.31)
REDEMPTION
FEES(a)
0.00(b)
0.00(b)
0.00(b)
0.00(b)
0.00(b)
NET
ASSET
VALUE,
End
of
Year
$
30.96
$
21.76
$
17.71
$
18.81
$
18.74
TOTAL
RETURN
52.85%
25.62%
(1.90)%
27.78%
7.32%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
82,925
$
50,637
$
33,801
$
13,919
$
24,022
Ratios
to
Average
Net
Assets:
Net
investment
loss
(1.17)%
(1.20)%
(1.02)%
(1.61)%
(1.49)%
Net
expenses
1.35%
1.35%
1.37%
1.80%
1.80%
Gross
expenses
(c)
1.78%
1.98%
2.32%
3.15%
2.48%
PORTFOLIO
TURNOVER
RATE
314%
252%
220%
294%
268%
footertext
(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.
Lisanti
Small
Cap
Growth
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
12
Organization
The
Lisanti
Small
Cap
Growth
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
February
27,
2004.
The
Fund
seeks
maximum
capital
appreciation.
Prior
to
February
1,
2018,
the
Fund
was
named
Dinosaur
Lisanti
Small
Cap
Growth
Fund.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
4,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Lisanti
Small
Cap
Growth
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
13
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
December
31,
2020,
for
the
Fund’s
investments
is
included
in
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
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
quarterly.
Distributions
to
shareholders
of
net
capital
gains
and
foreign
currency
gains,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
Lisanti
Small
Cap
Growth
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
14
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
December
31,
2020,
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.
Redemption
Fees
–
A
shareholder
who
redeems
or
exchanges
shares
within
30
days
of
purchase
will
incur
a
redemption
fee
of
1.00%
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.
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
December
31,
2020,
the
Fund
had
$7,258,370
at
MUFG
Union
Bank,
N.A.
that
exceeded
the
FDIC
insurance
limit.
Lisanti
Small
Cap
Growth
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
15
Fees
and
Expenses
Investment
Adviser
–
Lisanti
Capital
Growth,
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
0.95%
of
the
Fund’s
average
daily
net
assets.
Shareholder
Service
Plan
–
The
Trust
has
adopted
a
shareholder
service
plan
for
the
Fund
under
which
the
Fund
may
reimburse
the
Fund’s
administrator
for
amounts
paid
by
the
administrator
for
providing
shareholder
service
activities
that
are
not
otherwise
provided
by
the
transfer
agent.
The
Fund’s
administrator
may
make
such
payments
to
various
financial
institutions,
including
the
Adviser,
that
provide
shareholder
servicing
to
their
customers
invested
in
the
Fund
in
amounts
of
up
to
0.25%
annually
of
the
average
daily
net
assets
of
the
Fund.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
the
Fund’s
distributor
(the
“Distributor”).
The
Fund
does
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings,
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statement
of
Operations.
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
$31,000
($41,000
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.
Fees
Waived
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
expenses
to
limit
total
annual
fund
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
proxy
expenses,
and
extraordinary
expenses)
to
1.35%
through
April
30,
2021.
Other
Fund
service
providers
have
voluntarily
agreed
to
waive
a
portion
of
their
fees.
The
contractual
waivers
may
only
be
raised
or
eliminated
with
the
consent
of
the
Board
and
voluntary
fee
waivers
may
be
reduced
or
eliminated
at
any
time.
For
the
year
ended
December
31,
2020
,
fees
waived
were
as
follows:
Lisanti
Small
Cap
Growth
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
16
The
Adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
Adviser
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement,
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap
and
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
As
of
December
31,
2020,
$460,331
is
subject
to
recapture
by
the
Adviser.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
year
ended
December
31,
2020,
totaled
$192,287,835
and
$195,280,915,
respectively.
Federal
Income
Tax
As
of
December
31,
2020,
the
cost
of
investments
for
federal
income
tax
purposes
is
$58,859,076
and
the
components
of
net
unrealized
appreciation
consists
of:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
As
of
December
31,
2020,
distributable
earnings
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
wash
sales.
Investment
Adviser
Fees
Waived
Other
Waivers
Total
Fees
Waived
$
160,744
$
114,824
$
275,568
Gross
Unrealized
Appreciation
$
21,671,451
Gross
Unrealized
Depreciation
(629,877)
Net
Unrealized
Appreciation
$
21,041,574
2020
2019
Ordinary
Income
$
4,560,285
$
–
Long-Term
Capital
Gain
1,501,581
1,076,692
$
6,061,866
$
1,076,692
Undistributed
Ordinary
Income
$
9,633,754
Undistributed
Long-Term
Gain
1,048,672
Net
Unrealized
Appreciation
21,041,574
Total
$
31,724,000
Lisanti
Small
Cap
Growth
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
17
Subsequent
Events
The
global
outbreak
of
the
COVID-19
virus
has
caused
negative
effects
on
many
companies,
sectors,
countries,
regions,
and
financial
markets
in
general,
and
uncertainty
exists
as
to
its
long-term
implications.
The
effects
of
the
pandemic
may
adversely
impact
the
Fund's
assets
and
performance.
The
financial
statements
do
not
include
any
adjustments
that
might
result
from
the
outcome
of
this
uncertainty.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
18
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Lisanti
Small
Cap
Growth
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
Lisanti
Small
Cap
Growth
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedule
of
investments,
as
of
December
31,
2020,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2020,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“
PCAOB
”
)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
19
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2020
by
correspondence
with
the
custodian
and
broker
or
by
other
auditing
procedures
where
replies
from
brokers
were
not
received.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2008.
Philadelphia,
Pennsylvania
February
16,
2021
Lisanti
Small
Cap
Growth
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
20
Investment
Advisory
Agreement
Approval
At
the
September
11,
2020
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
Lisanti
Small
Cap
Growth
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
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
the
Fund
by
the
Adviser,
including
information
on
the
investment
performance
of
the
Fund
and
the
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
fee
enables
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
a
senior
representative
of
the
Adviser
and
a
discussion
with
the
Adviser
about
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
manager
and
other
personnel
at
the
Adviser
providing
services
to
the
Fund,
as
well
as
the
investment
philosophy
and
decision-making
process
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
and
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
to
be
provided
to
the
Fund
under
the
Advisory
Agreement.
Lisanti
Small
Cap
Growth
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
21
Performance
In
connection
with
a
presentation
by
the
Adviser
regarding
its
approach
to
managing
the
Fund,
the
Board
considered
the
performance
of
the
Fund
compared
to
its
primary
benchmark
index
and
compared
to
an
independent
peer
group
of
funds
identified
by
Broadridge
Financial
Solutions,
Inc.
(“Broadridge”)
as
having
characteristics
similar
to
the
Fund
(“Peer
Group”).
The
Board
observed
that
the
Fund
outperformed
the
Russell
2000
Growth
Index,
the
Fund’s
primary
benchmark
index,
for
the
one-,
three-,
five-,
and
10-year
periods
ended
June
30,
2020,
and
for
the
period
since
the
Fund’s
inception
on
February
27,
2004.
The
Board
also
observed
that,
based
on
the
information
provided
by
Broadridge,
the
Fund
outperformed
the
median
of
the
funds
in
the
Peer
Group
for
the
one-,
and
three-year
periods
and
underperformed
the
median
of
the
funds
in
the
Peer
Group
for
the
five-year
period
ended
June
30,
2020.
The
Board
noted
the
Adviser’s
representations
that
stock
selection,
coupled
with
the
Fund’s
bias
toward
stocks
with
smaller
market
capitalization
than
those
held
by
the
funds
included
in
the
Peer
Group,
were
the
primary
drivers
of
the
Fund’s
relative
outperformance.
Based
on
the
foregoing
and
other
applicable
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
the
actual
advisory
fee
rate
and
actual
total
expense
ratio
of
the
Fund
compared
to
its
Broadridge
Peer
Group.
The
Board
observed
that
the
Adviser’s
actual
advisory
fee
rate
and
the
Fund’s
actual
total
expense
ratio
were
each
higher
than
the
median
of
the
funds
in
the
Peer
Group.
The
Board
observed,
however,
that
the
Adviser’s
actual
advisory
fee
rate
and
the
Fund’s
actual
total
expense
ratio
were
close
to
the
medians
of
the
funds
in
the
Peer
Group.
The
Board
also
noted
that
the
Adviser
implemented
reductions
in
the
contractual
advisory
fee
rate
and
expense
cap
for
the
Fund
in
2018.
Based
on
the
foregoing
and
other
applicable
considerations,
the
Board
concluded
that
the
Adviser’s
advisory
fee
rate
charged
to
the
Fund
was
reasonable.
Cost
of
Services
and
Profitability
The
Board
evaluated
information
provided
by
the
Adviser
regarding
the
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
information
provided
by
the
Adviser
regarding
the
costs
and
profitability
of
its
Fund
activities.
The
Board
noted
the
Adviser’s
representation
that,
although
the
Adviser
did
not
maintain
separately
identifiable
profit
and
loss
information
for
the
Fund
relative
to
its
other
advisory
businesses,
the
Adviser
believed
that
it’s
anticipated
profit
margin
from
the
Fund
was
reasonable
considering
the
services
provided
and
that
the
Fund
required
significantly
more
attention
and
resources
than
other
accounts
managed
by
the
Adviser.
The
Board
also
noted
the
Adviser’s
representation
that
the
Adviser
was
subsidizing
the
Fund’s
operations
by
forgoing
a
portion
of
its
advisory
fee.
Based
on
these
and
other
applicable
considerations,
including
financial
statements
from
the
Adviser
indicating
its
profitability
and
expenses
from
overall
operations,
the
Board
concluded
that
the
Adviser’s
costs
of
services
and
profits
attributable
to
management
of
the
Fund
were
reasonable.
Lisanti
Small
Cap
Growth
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
22
Economies
of
Scale
The
Board
evaluated
whether
the
Fund
would
benefit
from
any
economies
of
scale.
In
this
regard,
the
Board
considered
the
Fund’s
fee
structure,
asset
size,
and
net
expense
ratio.
The
Board
also
considered
the
Adviser’s
representation
that
the
Fund
could
potentially
benefit
from
economies
of
scale
if
its
assets
were
to
increase
but
that,
in
light
of
the
Fund’s
low
asset
level
and
the
costly,
research-intensive
nature
of
the
Fund’s
investment
strategy,
the
Adviser
was
not
proposing
breakpoints
in
the
advisory
fee
at
this
time.
Based
on
the
foregoing
and
other
applicable
considerations,
and
considering
the
size
of
the
Fund,
the
Board
determined
that
the
asset
level
of
the
Fund
was
not
consistent
with
the
existence
of
economies
of
scale
and
that
economies
of
scale
were
not
a
material
factor
to
consider
in
approving
the
continuation
of
the
Advisory
Agreement.
Other
Benefits
The
Board
noted
the
Adviser’s
representation
that
it
would
be
receiving
a
benefit
arising
from
the
use
of
soft
dollars
in
connection
with
Fund
trades
for
the
acquisition
of
research
that
would
benefit
not
only
the
Fund,
but
potentially
other
clients
of
the
Adviser.
The
Board
concluded
that
the
other
benefits
received
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.
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
advisory
arrangement,
as
outlined
in
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.
Liquidity
Risk
Management
Program
The
Fund
has
adopted
and
implemented
a
written
liquidity
risk
management
program,
as
required
by
Rule
22e-4
(the
“Liquidity
Rule”)
under
the
Investment
Company
Act
of
1940,
as
amended.
The
liquidity
risk
management
program
is
reasonably
designed
to
assess
and
manage
the
Fund’s
liquidity
risk,
taking
into
consideration,
among
other
factors,
the
Fund's
investment
strategy
and
the
liquidity
of
the
portfolio
investments
during
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources.
The
Board
approved
the
designation
of
the
Trust’s
Valuation
Committee
as
the
administrator
of
the
liquidity
risk
management
program
(the
“Program
Administrator”).
The
Program
Administrator
is
responsible
for
the
administration
and
oversight
of
the
program
and
for
reporting
to
the
Board
on
at
least
an
annual
basis
regarding,
among
other
things,
the
program’s
operation,
adequacy,
and
effectiveness.
The
Program
Lisanti
Small
Cap
Growth
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
23
Administrator
assessed
the
Fund’s
liquidity
risk
profile
based
on
information
gathered
for
the
period
June
1,
2019
through
June
30,
2020
in
order
to
prepare
a
written
report
to
the
Board
for
review
at
its
meeting
held
on
September
11,
2020.
The
Program
Administrator’s
written
report
stated
that:
(i)
the
Fund
is
able
to
meet
redemptions
in
normal
and
reasonably
foreseeable
stressed
conditions
and
without
significant
dilution
of
remaining
shareholders’
interests
in
the
Fund;
(ii)
the
Fund's
strategy
is
appropriate
for
an
open-end
mutual
fund;
(iii)
the
liquidity
classification
determinations
regarding
the
Fund's
portfolio
investments,
which
take
into
account
a
variety
of
factors
and
may
incorporate
analysis
from
one
or
more
third-party
data
vendors,
remained
appropriate;
(iv)
the
Fund
did
not
approach
the
internal
triggers
set
forth
in
the
liquidity
risk
management
program
or
the
regulatory
percentage
limitation
(15%)
on
holdings
in
illiquid
investments;
(v)
it
continues
to
be
appropriate
to
not
set
a
“highly
liquid
investment
minimum”
for
the
Fund
because
the
Fund
primarily
holds
“highly
liquid
investments”;
and
(vi)
the
liquidity
risk
management
program
remains
reasonably
designed
and
adequately
implemented
to
prevent
violations
of
the
Liquidity
Rule.
The
report
also
reviewed
the
changes
to
the
Program
since
its
inception.
No
significant
liquidity
events
impacting
the
Fund
or
proposed
changes
to
the
Program
were
noted
in
the
report.
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)
441-7031
and
on
the
U.S.
Securities
and
Exchange
Commission's
(the
"SEC")
website
at
www.sec.gov.
The
Fund’s
proxy
voting
record
for
the
most
recent
twelve-month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(800)
441-7031
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund,
you
incur
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
July
1,
2020
through
December
31,
2020.
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
Lisanti
Small
Cap
Growth
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
24
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.
In
addition,
if
these
transactional
costs
had
been
included,
your
costs
would
have
been
higher.
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
0.
62
%
of
its
income
dividend
distributed
as
qualifying
for
the
corporate
dividends-
received
deduction
(DRD)
and
0.
60
%
for
the
qualified
dividend
rate
(QDI)
as
defined
in
Section
1(h)(11)
of
the
Code.
The
Fund
also
designates
100.00
%
as
short-term
capital
gain
dividends
exempt
from
U.S.
tax
for
foreign
shareholders
(QSD).
The
Fund
paid
long-term
capital
gain
dividends
of
$1,501,581.
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
Beginning
Account
Value
July
1,
2020
Ending
Account
Value
December
31,
2020
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,409.95
$
8.18
1.35%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,018.35
$
6.85
1.35%
*
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
(184)
divided
by
366
to
reflect
the
half-year
period.
Lisanti
Small
Cap
Growth
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
25
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)
441-7031.
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-2008.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
since
2017;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-
Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Lisanti
Small
Cap
Growth
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
26
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019.
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-
2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-
2019.
Todd
Proulx
Born:
1978
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-
2019.
Carlyn
Edgar
Born:
1963
Vice
President
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019;
Chief
Compliance
Officer,
2008-2016.
Dennis
Mason
Born:
1967
Chief
Compliance
Officer
Since
2016
Fund
Compliance
Officer,
Apex
Fund
Services
since
2019;
Fund
Compliance
Officer,
Atlantic
Fund
Services
2013-2019.
Lisanti
Small
Cap
Growth
Fund
P.O.
Box
588
Portland,
ME
04112
(800)
441-7031
www.lisantismallcap.com
Investment
Adviser
Lisanti
Capital
Growth,
LLC
475
Park
Avenue
South,
9th
Floor
New
York,
NY
10016
Distributor
Foreside
Fund
Services,
LLC
Three
Canal
Plaza
Suite
100
Portland,
ME
04101
www.foreside.com
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
risks,
objectives,
fees
and
expenses,
experience
of
its
management
and
other
information.
228
-
ANR
-
1220
Annual
Report
DECEMBER
31,
2020
Table
of
Contents
A
Message
to
Our
Shareholders
(Unaudited)
1
Performance
Chart
and
Analysis
(Unaudited)
7
Schedule
of
Investments
8
Statement
of
Assets
and
Liabilities
11
Statement
of
Operations
12
Statements
of
Changes
in
Net
Assets
13
Financial
Highlights
14
Notes
to
Financial
Statements
15
Report
of
Independent
Registered
Public
Accounting
Firm
21
Additional
Information
(Unaudited)
22
1
Polaris
Global
Value
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
DECEMBER
31,
2020
Dear
Fellow
Shareholder,
No
one
could
have
expected
2020
to
be
the
year
of
a
pandemic,
replete
with
country
lockdowns,
rising
unemployment,
trade
wars,
political
turmoil
and
volatile
oil
prices.
Yet,
each
of
these
developments
rippled
through
the
global
economy,
with
investor
optimism
souring
as
the
first
effects
of
COVID-19
took
hold.
Governments
and
central
banks
initiated
unprecedented
monetary
and
fiscal
policies,
hoping
to
boost
industries
hardest
hit.
Still,
many
companies
cratered
in
the
first
quarter
of
2020,
falling
into
bear
market
territory,
only
to
begin
their
slow
climb
out
of
the
trough
in
the
second
quarter.
The
third
and
fourth
quarters
heated
up.
For
the
year
ending
2020,
the
MSCI
World
Index
(the
“benchmark”)
rose
15.90%,
while
the
Polaris
Global
Value
Fund
(the
“Fund”)
was
up
6.68%.
Underperformance
was
attributable
to
lackluster
results
in
the
overweight
financial
sector,
as
well
as
notable
losses
in
energy,
consumer
staples
and
industrials.
At
the
country
level,
the
portfolio
outperformed
in
Canada,
France,
Finland,
Belgium,
Norway
and
Austria;
yet
these
modest
weightings
did
little
to
absorb
the
underperformance
and
underweight
in
a
robust
U.S.
market.
While
full
year
performance
was
underwhelming,
we
are
pleased
to
have
markedly
outperformed
in
the
fourth
quarter;
we
believe
that
the
Fund
is
well
positioned
for
the
fits
and
spurts
of
a
2021
recovery.
We
would
be
remiss
in
not
mentioning
that
2020
was
one
of
the
worst
years
in
history
for
value
stocks,
as
world
markets
were
driven
by
high
flyer
stocks
and
FAANGs
(Facebook,
Amazon,
Apple,
Netflix
and
Google),
shunning
the
fundamentally
strong
but
less
glamorous
sectors
like
materials,
industrials
and
financials.
In
this
context,
the
Fund
outperformed
the
MSCI
World
Value
Index,
which
was
down
-1.16%.
*Inception-to-date
(Inception
7/31/1989)
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.
Returns
for
more
than
one
year
are
annualized.
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
(888)
263-5594.
Short-term
performance
is
not
a
good
indication
of
the
Fund's
future
performance,
and
an
investment
should
not
be
made
based
solely
on
returns.
As
stated
in
the
current
prospectus,
the
Fund’s
total
annual
operating
expense
ratio
is
1.23%.
The
Fund’s
annual
operating
expense
ratio
has
been
reduced
to
0.99%,
effective
as
of
January
1,
2014
through
April
30,
2021,
due
to
the
Adviser’s
contractual
agreement
to
waive
its
fee
and/or
reimburse
expenses
to
limit
Total
Annual
Fund
Operating
Expenses.
Shares
redeemed
or
exchanged
within
180
days
of
purchase
will
be
charged
a
1.00%
fee.
Fund
performance
returns
shown
do
not
reflect
this
fee;
if
reflected,
the
returns
would
have
been
lower.
2020
PERFORMANCE
ANALYSIS:
At
the
beginning
of
the
COVID-19
crisis,
we
conducted
an
intensive
research
effort,
selling
richly
valued
companies
and
raising
cash
in
anticipation
of
a
market
downturn.
We
sold
Wesco
International,
Infosys,
Hewlett
Packard,
L
Brands,
JM
Smucker,
Kone
OYJ
and
a
number
of
other
companies
on
valuation,
making
space
for
more
than
two
dozen
buys.
Some
of
2020
Annualized
As
of December
31,
2020
YTD
Q
IV
Q
III
Q
II
Q
I
1
Yr
3
Yrs
5
Yrs
10
Yrs
15
Yrs
20
Yrs
ITD
Polaris
Global
Value
Fund
6.68%
26.22%
4.37%
18.66%
-31.75%
6.68%
4.59%
9.03%
9.46%
6.57%
8.93%
9.36%
MSCI
World
Index,
net
dividends
reinvested
15.90%
13.96%
7.93%
19.36%
-21.05%
15.90%
10.54%
12.19%
9.87%
7.33%
6.02%
7.08%
2
Polaris
Global
Value
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
DECEMBER
31,
2020
the
cash
was
redeployed
starting
in
late
March
to
invest
in
higher
quality
companies
with
more
upside
potential.
Immense
volatility
brought
the
likes
of
Crocs
Inc.,
Antofagasta,
Bunzl
and
Laboratory
Corp.
of
America
into
the
“value”
price
range.
Many
of
the
new
purchases
were
centered
in
the
consumer
discretionary
sector,
including
CROCS,
Tapestry,
Zhongsheng
Group
Holdings,
Dometic
Group
and
Darden
Restaurants.
Crocs
was
one
of
the
biggest
contributors
to
overall
portfolio
performance,
up
more
than
100%
as
management
indicated
a
faster
than
anticipated
recovery
in
certain
regional
stores,
with
record
U.S.
sales
revenues
stemming
from
Crocs’
direct-to-consumer
(digital)
platform.
The
footwear
company
also
outlined
its
COVID-19
safety
efforts
at
distribution
centers,
while
shoring
up
balance
sheets
and
reducing
capital
expenditures
in
the
near
term.
Tapestry
Inc.
(the
parent
company
for
Coach,
Kate
Spade
and
Stuart
Weitzman
brands)
increased
revenue,
expanded
gross
margins,
and
accelerated
e-commerce
sales.
Zhongsheng
Group,
one
of
the
largest
Chinese
car
dealerships,
cited
great
secular
tailwinds
in
luxury
car
sales,
aftermarket
products
and
dealer
services.
Darden
Restaurants,
the
parent
of
Capital
Grille,
Olive
Garden
and
Longhorn
Steakhouse
restaurant
chains,
noted
positive
sales
trends
in
its
takeout/
delivery
service
and
slowly
began
re-opening
brick-and-mortar
sites
with
much
success.
Climate
control
and
convenience
products
maker
for
recreational
vehicles
(RVs),
Dometic
Group,
capitalized
on
the
RV
travel
craze
as
consumers
sought
vacation
alternatives.
Dometic’s
aftermarket
sales
held
up
well,
while
its
cost
cutting
and
efficiency
measures
improved
margins.
In
the
third
quarter
of
2020,
Dometic
and
Darden
were
sold
at
a
healthy
profit,
as
each
reached
Polaris’
valuation
limits.
U.K.
homebuilders
detracted
from
sector
gains.
Taylor
Wimpey
PLC
and
Bellway
PLC
went
into
the
crisis
in
great
shape,
with
good
control
of
inventory,
build
rates,
selling
prices
and
financing.
The
subsequent
U.K.
lockdown
shut
down
construction
sites,
with
the
homebuilders
announcing
fewer
completions
due
to
COVID-19
distancing
restrictions.
This
short-term
headwind
is
expected
to
reverse
course
in
the
second
half
of
2021;
in
fact,
homebuilders
were
already
showing
upward
momentum
as
of
the
fourth
quarter
2020.
Most
of
materials
sector
holdings
were
in
positive
territory,
led
by
new
portfolio
additions,
Antofagasta
PLC
and
HeidelbergCement
AG.
Favorable
supply-demand
metrics
boosted
Antofagasta,
a
leading
Chilean
copper
and
gold
miner.
Demand
for
cement
remained
relatively
stable,
per
Germany
supplier,
HeidelbergCement.
Canadian
methanol
producer,
Methanex,
posted
steady
gains
as
methanol
prices
recovered
from
second
quarter
2020
lows.
The
company
referenced
improving
methanol
demand
within
Europe
and
Asia,
specifically
in
China.
The
fundamentals
(resumption
of
building
in
China,
increased
industrial
demand)
underscoring
the
rise
in
commodity
prices
may
translate
into
strong
performance
in
other
material
sector
companies
in
a
post
COVID-19
world;
therefore,
the
Fund
maintains
an
overweight
position
in
materials.
In
information
technology,
Samsung
Electronics
and
SK
Hynix
both
logged
30%+
annual
returns
as
DRAM
chip
prices
trended
higher.
A
replacement
cycle
in
data
servers,
Chinese
inventory
rebuilding
and
a
recent
Micron
fab
disruption
were
the
primary
drivers
for
this
chip
price
projection.
Additionally,
SK
Hynix’s
purchase
of
Intel’s
NAND
business
may
bring
better
supply
discipline,
taking
one
competitor
out
of
the
industry.
In
other
news,
Samsung
cited
its
television
division
as
a
strong
revenue
generator
due
to
stay-at-home
mandates.
Plans
to
scrap
its
QLED/LCD
televisions
have
been
backburnered
while
Samsung
capitalizes
on
demand.
Arrow
Electronics,
a
recent
addition
to
the
portfolio,
added
to
gains
as
the
company
capitalized
on
demand
trends
in
Asia.
With
inklings
of
a
COVID-19
crisis
unfolding
in
the
months
of
December
2019
and
January
2020,
we
identified
medical
testing
companies
as
critical
in
diagnosing
potential
spread
of
the
virus.
We
added
to
our
long-standing
investment,
Quest
3
Polaris
Global
Value
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
DECEMBER
31,
2020
Diagnostics,
and
purchased
Laboratory
Corp
of
America,
Germany’s
Fresenius
SE
(supply
chain
of
essential
drugs
and
mask
purification
methods)
and
Alexion
Pharmaceuticals.
All
of
the
new
buys
were
up
more
than
25%
for
the
year.
Industrial
sector
returns
formed
into
a
barbell,
with
three
2020
purchases,
Bunzl
PLC,
Ryanair
Holdings
and
Valmet
OYJ
up
in
excess
of
40%,
while
Babcock
International
and
Trevi
Finanziaria
detracted.
Bunzl
reinstated
dividends
after
reporting
higher
pre-tax
profits
in
the
first
half
of
2020,
as
its
grocery
and
cleaning/safety
divisions
rose.
The
company
also
announced
two
acquisitions.
Irish
low-cost
airline,
Ryanair
Holdings
PLC,
dropped
precipitously
as
travel
halted
at
the
beginning
of
the
pandemic;
Polaris
snapped
up
this
cash-flow
heavy
company
on
the
expectation
of
participating
in
a
rebound.
Polaris
subsequently
sold
the
company’s
stock
after
a
healthy
gain.
Trevi,
the
Italian
engineering
and
foundation
driller,
underwent
a
complete
financial
and
operational
restructuring.
The
stock
jumped
more
than
150%
in
the
second
quarter
as
one
of
the
Fund’s
top
performers,
but
relinquished
some
of
this
gain
in
the
third
quarter.
Trevi
may
face
some
near-term
headwinds,
as
governmental
infrastructure
spending
is
postponed
in
deference
to
immediate
COVID-19
related
needs
of
citizens.
Babcock
International,
the
U.K.
engineering
services
firm
that
supports
local
defense,
emergency
services
and
civil
nuclear
sectors,
noted
declining
profits
due
to
new
distancing
requirements
on
ship
repair
worksites.
The
stock
price
slipped
further
after
Babcock
announced
the
end
of
its
long-term
contract
with
Britain’s
Nuclear
Decommissioning
Authority.
With
a
large
overweight
and
modest
underperformance,
financials
detracted
most
from
returns
during
the
year.
Substantial
flows
into
the
safest
debt
instruments
drove
interest
rates,
from
Treasury
bills
to
30-year
government
bonds,
to
less
than
1%
on
March
9,
2020.
In
an
effort
to
coordinate
central
bank
rates
with
these
extreme
market
rates,
the
U.S.
Federal
Reserve
cut
interest
rates
to
essentially
zero
and
launched
a
purchase
program,
buying
Treasuries
and
mortgage-backed
securities
whose
prices
were
subject
to
potential
drops
in
value.
Bank
stocks
declined
sharply
on
expectations
of
lower
interest
margins
and
higher
credit
losses
due
to
higher
unemployment
and
companies
likely
entering
financial
distress.
By
July
and
August,
financials
recovered
modestly,
with
September
bringing
another
dip
on
increased
COVID-19
cases.
Many
banks
encountered
lower
net
interest
margins
and
slower
loan
growth,
while
concerns
swirled
about
stimulus
running
dry,
raising
the
risk
of
defaults.
To
counteract
these
issues,
banks
set
aside
large
reserves
and
capital
to
absorb
potential
losses;
many
had
the
highest
capital
ratios
and
loan
loss
reserves
in
more
than
20
years.
By
the
fourth
quarter,
U.S.
banks
gained
on
news
of
vaccine
approvals
and
renewed
government
stimulus,
staving
off
concerns
about
loan
losses
and
bankruptcies.
Several
banks
reduced
loan
loss
provisions
and
reported
fewer
loan
deferral
balances
and
non-performing
loans,
propping
up
Webster
Financial,
Ameris
Bancorp
and
Puerto
Rico-based
Popular
Inc.
The
Federal
Reserve
also
completed
its
2020
bank
stress
testing,
indicating
banks
were
sufficiently
capitalized;
this
may
signal
the
resumption
of
capital
return
policies
and
buybacks
for
larger
U.S.
institutions
like
Capital
One
Financial
and
JPMorgan
Chase.
Nordic
banks,
including
DNB
ASA
and
Svenska
Handelsbanken,
performed
well
as
local
regulators
decided
to
soften
their
dividend
payouts
stance.
Bancolombia
recovered
most
of
2020’s
lost
ground
with
a
sharp
gain
in
December
on
the
back
of
a
Moody’s
rating
affirmation
and
a
stronger
Colombian
peso.
Overall,
it
was
gratifying
to
see
the
recovery
in
financials,
as
we
remained
resolute
in
our
financial
models
and
analysis,
even
as
the
banks
tumbled
earlier
in
2020
amid
emotional
investor
selling.
Few
industries
were
more
impacted
by
COVID-19
than
travel
and
leisure,
from
airlines
and
hotels
to
restaurants
and
entertainment
venues.
Cineworld
Group
was
down
30%
in
October
as
it
shuttered
all
of
its
theaters
in
the
U.S.
and
U.K.
By
December,
Cineworld’s
stock
partially
recouped
declines,
gaining
68%,
as
the
company
refinanced
debt
with
10%
dilution
4
Polaris
Global
Value
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
DECEMBER
31,
2020
to
shareholders.
While
streaming
platforms
are
now
popular
by
default,
we
believe
consumers
will
embrace
the
theatrical
experience
when
lockdowns
are
lifted
as
has
been
the
case
in
countries
like
China
and
Japan.
The
following
table
shows
the
Fund’s
asset
allocation
at
December
31,
2020.
Table
may
not
cross
foot
due
to
rounding.
INVESTMENT
ENVIRONMENT
AND
STRATEGY:
We
recognize
that
we
are
not
“out
of
the
woods”
yet
with
the
COVID-19
pandemic,
as
the
next
waves
and
strains
of
the
virus
cause
country
lockdowns.
So
far
in
2021,
we
have
already
seen
a
moratorium
on
social
activities
in
the
U.K.
until
mid-
February;
Canada
is
hinting
at
stronger
enforcement
measures;
France
instituted
a
12-hour
curfew;
and
Germany
posted
harder
restrictions
across
all
16
federal
states.
The
U.S.
isn’t
far
behind,
with
many
states
mandating
stay-at-home
orders.
Yet,
we
don’t
believe
that
any
lockdown
scenario
will
have
the
same
gravity
as
it
did
in
the
first
quarter
of
last
year.
Vaccines
are
in
distribution,
global
citizens
have
dealt
with
the
virus
for
nearly
a
year
and
most
public
companies
learned
to
adapt
to
the
new
working
condition,
focusing
on
e-commerce
and
operational
restructuring.
When
economies
turn
the
corner,
many
highly-efficient
businesses
will
be
positioned
for
impressive
growth.
We
are
making
every
effort
to
build
a
Fund
portfolio
of
these
types
of
companies;
we
expect
admirable
performance
(like
that
of
the
fourth
quarter
2020)
to
follow.
We
express
our
heartfelt
sympathy
for
the
many
people
who
have
suffered
and/or
succumbed
to
the
COVID-19
virus.
We
recognize
and
give
high
praise
to
the
many
health
care
professionals
and
other
essential
workers
worldwide
across
many
industries,
who
made
heroic
efforts
to
save
other
people’s
lives.
As
always,
we
welcome
your
questions
and
comments.
MSCI
World
Index
Portfolio
Weight
Energy
Utilities
Materials
Industrials
Consumer
Discretionary
Consumer
Staples
Health
Care
Financials
Info.
Tech.
Comm.
Services
Real
Estate
Cash
N.
America
69.2%
41.0%
1.9%
2.2%
2.6%
1.0%
4.9%
1.9%
7.9%
11.5%
5.0%
2.1%
0.0%
0.0%
Japan
7.8%
6.4%
0.0%
0.0%
0.7%
0.0%
2.4%
1.2%
0.0%
1.0%
0.0%
1.1%
0.0%
0.0%
Other
Asia
3.6%
10.5%
0.0%
0.0%
0.0%
1.0%
2.5%
0.2%
0.0%
1.0%
4.8%
1.0%
0.0%
0.0%
Europe
17.1%
30.2%
0.0%
0.0%
8.1%
5.1%
5.9%
2.1%
2.0%
3.3%
0.0%
3.8%
0.0%
0.0%
Scandinavia
2.3%
7.2%
0.0%
0.0%
1.1%
2.5%
0.4%
0.0%
0.0%
3.3%
0.0%
0.0%
0.0%
0.0%
Africa
&
S.
America
0.0%
2.7%
0.0%
0.0%
1.6%
0.0%
0.0%
0.0%
0.0%
1.1%
0.0%
0.0%
0.0%
0.0%
Cash
0.0%
1.9%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.7%
Portfolio
Totals
100.0%
1.9%
2.2%
14.1%
9.5%
16.1%
5.4%
9.9%
21.2%
9.9%
7.9%
0.0%
0.7%
MSCI
World
Weight
2.7%
3.1%
4.5%
10.5%
12.2%
7.6%
13.0%
12.8%
22.1%
8.9%
2.6%
0.0%
5
Polaris
Global
Value
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
DECEMBER
31,
2020
Sincerely,
Bernard
R.
Horn,
Jr.,
Shareholder
and
Portfolio
Manager
As
of
December
31,
2020
,
the
Fund’s
largest
equity
holdings
and
the
percentages
they
represent
in
the
Fund’s
portfolio
market
value
were
as
follows
and
are
subject
to
change:
The
Fund’s
annual
performance
as
compared
to
the
benchmark
has
been
as
follows:
Historical
Calendar
Year
Annual
Returns
(years
ended
December
31)
Percentage
of
Issuer
Total
Market
Value
Samsung
Electronics
Co.,
Ltd.
2.30%
Antofagasta
PLC
1.66%
SK
Hynix,
Inc.
1.58%
Methanex
Corp.
1.56%
Magna
International,
Inc.
1.51%
Percentage
of
Issuer
Total
Market
Value
Sony
Corp.
1.43%
Publicis
Groupe
SA
1.42%
Bellway
PLC
1.42%
Webster
Financial
Corp.
1.39%
Kia
Motors
Corp.
1.39%
Polaris
Global
Value
Fund
MSCI
World
Index
2020
6.6
8
%
15.90%
2019
22.79%
27.67%
2018
-12.66%
-8.71%
2017
20.61%
22.40%
2016
11.67%
7.51%
2015
1.55%
-0.87%
2014
3.68%
4.94%
2013
36.94%
26.68%
2012
21.00%
15.83%
2011
-8.16%
-5.54%
2010
20.64%
11.76%
2009
35.46%
29.99%
2008
-46.19%
-40.71%
2007
-3.97%
9.04%
2006
24.57%
20.07%
2005
10.52%
9.49%
Polaris
Global
Value
Fund
MSCI
World
Index
2004
23.63%
14.72%
2003
47.06%
33.11%
2002
3.82%
-19.89%
2001
2.21%
-16.82%
2000
-5.82%
-13.18%
1999
16.50%
24.94%
1998
-8.85%
24.34%
1997
34.55%
15.76%
1996
23.34%
13.48%
1995
31.82%
20.72%
1994
-2.78%
5.08%
1993
25.70%
22.50%
1992
9.78%
-5.23%
1991
17.18%
18.28%
1990
-11.74%
-17.02%
6
Polaris
Global
Value
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
DECEMBER
31,
2020
IMPORTANT
INFORMATION
The
Fund
invests
in
securities
of
foreign
issuers,
including
issuers
located
in
countries
with
emerging
capital
markets.
Investments
in
such
securities
entail
certain
risks
not
associated
with
investments
in
domestic
securities,
such
as
volatility
of
currency
exchange
rates,
and
in
some
cases,
political
and
economic
instability
and
relatively
illiquid
markets.
These
risks
are
greater
for
emerging
markets.
Options
trading
involves
risk
and
is
not
suitable
for
all
investors.
Fund
performance
includes
reinvestment
of
dividends
and
capital
gains.
During
the
period,
some
of
the
Fund’s
fees
were
waived
or
expenses
reimbursed.
In
the
absence
of
these
waivers
and
reimbursements,
performance
figures
would
be
lower.
On
June
1,
1998,
a
limited
partnership
managed
by
the
adviser
reorganized
into
the
Fund.
The
predecessor
limited
partnership
maintained
an
investment
objective
and
investment
policies
that
were,
in
all
material
respects,
equivalent
to
those
of
the
Fund.
The
Fund’s
performance
for
the
periods
before
June
1,
1998
is
that
of
the
limited
partnership
and
includes
the
expenses
of
the
limited
partnership.
If
the
limited
partnership’s
performance
had
been
readjusted
to
reflect
the
second
year
expenses
of
the
Fund,
the
Fund’s
performance
for
all
the
periods
would
have
been
lower.
The
limited
partnership
was
not
registered
under
the
Investment
Company
Act
of
1940
and
was
not
subject
to
certain
investment
limitations,
diversification
requirements,
and
other
restrictions
imposed
by
the
1940
Act
and
the
Internal
Revenue
Code,
which,
if
applicable,
may
have
adversely
affected
its
performance.
The
MSCI
World
Index,
net
dividends
reinvested
measures
the
performance
of
a
diverse
range
of
global
stock
markets
in
the
United
States,
Canada,
Europe,
Australia,
New
Zealand
and
the
Far
East.
The
MSCI
World
Index
is
unmanaged
and
includes
reinvestment
of
dividends
after
deduction
of
withholding
taxes.
The
MSCI
World
Value
Index
captures
large-
and
mid-cap
securities
exhibiting
overall
value
style
characteristics
across
23
developed
market
countries.
One
cannot
invest
directly
in
an
index
or
an
average.
The
views
in
this
letter
were
those
of
the
Fund
manager
as
of
December
31,
2020
and
may
not
reflect
the
views
of
the
manager
after
the
publication
date.
These
views
are
intended
to
assist
shareholders
of
the
Fund
in
understanding
their
investment
and
do
not
constitute
investment
advice.
7
Polaris
Global
Value
Fund
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
DECEMBER
31,
2020
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
the
Polaris
Global
Value
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
MSCI
World
Index,
over
the
past
ten
fiscal
years.
The
MSCI
World
Index
captures
large
and
mid
cap
representation
across
23
developed
markets
countries:
Australia,
Austria,
Belgium,
Canada,
Denmark,
Finland,
France,
Germany,
Hong
Kong,
Ireland,
Israel,
Italy,
Japan,
the
Netherlands,
New
Zealand,
Norway,
Portugal,
Singapore,
Spain,
Sweden,
Switzerland,
the
United
Kingdom
and
the
United
States.
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
Polaris
Global
Value
Fund
vs.
MSCI
World
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.23%.
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
expense
on
short
sales,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses)
to
0.99%,
through
April
30,
2021
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
During
the
period,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
Shares
redeemed
or
exchanged
within
180
days
of
purchase
will
be
charged
a
1.00%
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.
Because
of
ongoing
market
volatility,
Fund
performance
may
be
subject
to
substantial
short-term
changes.
For
the
most
recent
month-end
performance,
please
call
(888)
263-5594.
Average
Annual
Total
Returns
Years
Ended
December
31,
2020
One
Year
Five
Year
Ten
Year
Polaris
Global
Value
Fund
6.68%
9.03%
9.46%
MSCI
World
Index
15.90%
12.19%
9.87%
Polaris
Global
Value
Fund
SCHEDULE
OF
INVESTMENTS
DECEMBER
31,
2020
8
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
98.1%
Austria
-
0.8%
78,400
ANDRITZ
AG
$
3,589,736
Belgium
-
1.1%
42,670
Solvay
SA,
Class A
5,050,142
Canada
-
4.1%
94,707
Magna
International,
Inc.
6,704,413
149,837
Methanex
Corp.
6,885,039
88,504
The
Toronto-Dominion
Bank
5,000,556
18,590,008
Chile
-
1.6%
373,000
Antofagasta
PLC
7,347,671
China
-
1.0%
2,139,000
Weichai
Power
Co.,
Ltd.
4,293,203
Colombia
-
1.1%
491,900
Bancolombia
SA
5,037,816
Finland
-
0.7%
113,195
Valmet
OYJ
3,230,330
France
-
3.8%
36,300
Cie
Generale
des
Etablissements
Michelin
SCA
4,654,102
54,107
IPSOS
1,824,355
125,890
Publicis
Groupe
SA
6,268,625
45,053
Vinci
SA
4,477,973
17,225,055
Germany
-
7.8%
71,500
BASF
SE
5,653,161
261,742
Deutsche
Telekom
AG
4,781,968
95,800
Fresenius
SE
&
Co.
KGaA
4,428,570
31,300
Hannover
Rueck
SE
4,982,365
66,600
HeidelbergCement
AG
4,980,975
72,316
LANXESS
AG
5,544,523
16,600
Muenchener
Rueckversicherungs-
Gesellschaft
AG
in
Muenchen,
Class R
4,923,836
35,295,398
Ireland
-
0.9%
2,455,441
Greencore
Group
PLC
3,911,857
Italy
-
0.8%
2,399,507
TREVI
-
Finanziaria
Industriale
SpA
(a)
3,476,591
Japan
-
6.4%
133,300
Asahi
Group
Holdings,
Ltd.
5,478,913
419,000
Daicel
Corp.
3,055,610
169,000
Honda
Motor
Co.,
Ltd.
4,709,675
Shares
Security
Description
Value
Japan
-
6.4%
(continued)
159,900
KDDI
Corp.
$
4,747,987
63,300
Sony
Corp.
6,305,172
146,900
Sumitomo
Mitsui
Trust
Holdings,
Inc.
4,519,891
28,817,248
Norway
-
3.3%
262,696
DNB
ASA
(a)
5,147,148
329,537
SpareBank
1
SR-Bank
ASA
(a)
3,497,433
167,854
Sparebanken
Vest
1,417,340
116,600
Yara
International
ASA
4,841,193
14,903,114
Puerto
Rico
-
1.3%
105,900
Popular,
Inc.
5,964,288
Singapore
-
0.8%
210,135
United
Overseas
Bank,
Ltd.
3,591,820
South
Korea
-
7.5%
21,200
Hyundai
Mobis
Co.,
Ltd.
4,986,284
107,000
Kia
Motors
Corp.
6,146,368
12,600
KT&G
Corp.
963,877
429,315
LG
Uplus
Corp.
4,643,700
136,459
Samsung
Electronics
Co.,
Ltd.
10,175,071
64,100
SK
Hynix,
Inc.
6,992,405
33,907,705
Sweden
-
3.2%
125,200
Duni
AB,
Class A
(a)
1,640,401
103,203
Loomis
AB
2,837,342
195,400
SKF
AB,
Class B
5,068,107
460,533
Svenska
Handelsbanken
AB,
Class A
(a)
4,623,466
14,169,316
Switzerland
-
2.1%
31,544
Chubb,
Ltd.
4,855,253
47,900
Novartis
AG
4,525,963
9,381,216
Taiwan
-
1.1%
640,000
Catcher
Technology
Co.,
Ltd.
4,692,149
Thailand
-
0.2%
350,800
Siam
Commercial
Bank
PCL
1,024,533
United
Kingdom
-
12.9%
393,000
Amcor
PLC
4,625,610
708,411
Babcock
International
Group
PLC
(a)
2,711,538
154,971
Bellway
PLC
6,262,324
146,218
Bunzl
PLC
4,884,857
4,681,050
Cineworld
Group
PLC
(a)
4,103,259
107,600
Coca-Cola
European
Partners
PLC
5,361,708
524,647
Inchcape
PLC
(a)
4,616,824
18,713
Linde
PLC
4,931,063
Polaris
Global
Value
Fund
SCHEDULE
OF
INVESTMENTS
DECEMBER
31,
2020
9
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
December
31,
2020.
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
United
Kingdom
-
12.9%
(continued)
251,426
Mondi
PLC
$
5,912,075
60,228
Next
PLC
(a)
5,836,160
678,559
Signature
Aviation
PLC
(a)
3,591,089
2,390,262
Taylor
Wimpey
PLC
(a)
5,419,480
58,255,987
United
States
-
35.6%
45,651
AbbVie,
Inc.
4,891,505
37,800
Alexion
Pharmaceuticals,
Inc.
(a)
5,905,872
82,400
ALLETE,
Inc.
5,103,856
112,450
Ameris
Bancorp
4,280,971
14,900
Anthem,
Inc.
4,784,241
52,500
Arrow
Electronics,
Inc.
(a)
5,108,250
87,200
Avnet,
Inc.
3,061,592
87,600
Berry
Global
Group,
Inc.
(a)
4,922,244
103,900
Brookline
Bancorp,
Inc.
1,250,956
14,800
Cambridge
Bancorp
1,032,300
54,900
Capital
One
Financial
Corp.
5,426,865
52,651
Carter's,
Inc.
4,952,880
325,900
Cinemark
Holdings,
Inc.
5,673,919
169,774
Colony
Bankcorp,
Inc.
2,487,189
79,976
Crocs,
Inc.
(a)
5,011,296
71,200
CVS
Health
Corp.
4,862,960
99,900
Dime
Community
Bancshares,
Inc.
1,575,423
162,100
Franklin
Resources,
Inc.
4,050,879
30,767
General
Dynamics
Corp.
4,578,745
52,700
Ingredion,
Inc.
4,145,909
86,900
Intel
Corp.
4,329,358
133,463
International
Bancshares
Corp.
4,996,855
40,200
JPMorgan
Chase
&
Co.
5,108,214
26,300
Laboratory
Corp.
of
America
Holdings
(a)
5,353,365
28,000
M&T
Bank
Corp.
3,564,400
99,582
Marathon
Petroleum
Corp.
4,118,711
21,900
Microsoft
Corp.
4,870,998
61,776
NextEra
Energy,
Inc.
4,766,018
50,700
Premier
Financial
Corp.
1,166,100
41,033
Quest
Diagnostics,
Inc.
4,889,903
55,800
Science
Applications
International
Corp.
5,280,912
168,900
Tapestry,
Inc.
5,249,412
221,300
The
Williams
Cos.,
Inc.
4,437,065
71,200
Tyson
Foods,
Inc.,
Class A
4,588,128
13,768
UnitedHealth
Group,
Inc.
4,828,162
61,751
Verizon
Communications,
Inc.
3,627,871
146,338
Webster
Financial
Corp.
6,168,147
160,451,471
Total
Common
Stock
(Cost
$360,497,617)
442,206,654
Shares
Security
Description
Exercise
Price
Exp.
Date
Value
Warrants
-
0.0%
10,863
TREVI
-
Finanziaria
Industriale
SpA
(a)
(Cost
$1,001,311)
$
0.01
05/05/25
$
70,866
Investments,
at
value
-
98.1%
(Cost
$361,498,928)
$
442,277,520
Other
Assets
&
Liabilities,
Net
-
1.9%
8,461,399
Net
Assets
-
100.0%
$
450,738,919
PCL
Public
Company
Limited
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
Polaris
Global
Value
Fund
SCHEDULE
OF
INVESTMENTS
DECEMBER
31,
2020
10
See
Notes
to
Financial
Statements.
Level
1
Level
2
Level
3
Total
Investments
at
Value
Common
Stock
Austria
$
3,589,736
$
–
$
–
$
3,589,736
Belgium
5,050,142
–
–
5,050,142
Canada
18,590,008
–
–
18,590,008
Chile
7,347,671
–
–
7,347,671
China
4,293,203
–
–
4,293,203
Colombia
5,037,816
–
–
5,037,816
Finland
3,230,330
–
–
3,230,330
France
17,225,055
–
–
17,225,055
Germany
35,295,398
–
–
35,295,398
Ireland
3,911,857
–
–
3,911,857
Italy
3,476,591
–
–
3,476,591
Japan
28,817,248
–
–
28,817,248
Norway
14,903,114
–
–
14,903,114
Puerto
Rico
5,964,288
–
–
5,964,288
Singapore
3,591,820
–
–
3,591,820
South
Korea
33,907,705
–
–
33,907,705
Sweden
14,169,316
–
–
14,169,316
Switzerland
9,381,216
–
–
9,381,216
Taiwan
4,692,149
–
–
4,692,149
Thailand
–
1,024,533
–
1,024,533
United
Kingdom
58,255,987
–
–
58,255,987
United
States
160,451,471
–
–
160,451,471
Warrants
70,866
–
–
70,866
Investments
at
Value
$
441,252,987
$
1,024,533
$
–
$
442,277,520
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Total
Investments
Communication
Services
8.1%
Consumer
Discretionary
16.4%
Consumer
Staples
5.5%
Energy
1.9%
Financials
21.6%
Health
Care
10.1%
Industrials
9.7%
Information
Technology
10.1%
Materials
14.4%
Utilities
2.2%
Warrants
0.0%
100.0%
11
Polaris
Global
Value
Fund
STATEMENT
OF
ASSETS
AND
LIABILITIES
DECEMBER
31,
2020
See
Notes
to
Financial
Statements.
*
Shares
redeemed
or
exchanged
within
180
days
of
purchase
are
charged
a
1.00%
redemption
fee.
ASSETS
Investments,
at
value
(Cost
$361,498,928)
$
442,277,520
Cash
8,115,187
Receivables:
Fund
shares
sold
168,455
Dividends
and
interest
1,274,058
Prepaid
expenses
13,119
Total
Assets
451,848,339
LIABILITIES
Payables:
Fund
shares
redeemed
363,617
Distributions
payable
347,298
Accrued
Liabilities:
Investment
adviser
fees
285,847
Fund
services
fees
40,841
Other
expenses
71,817
Total
Liabilities
1,109,420
NET
ASSETS
$
450,738,919
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
373,577,687
Distributable
earnings
77,161,232
NET
ASSETS
$
450,738,919
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
15,480,900
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE*
$
29.12
12
Polaris
Global
Value
Fund
STATEMENT
OF
OPERATIONS
YEAR
ENDED
DECEMBER
31,
2020
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$990,295)
$
9,043,950
Interest
income
22,956
Total
Investment
Income
9,066,906
EXPENSES
Investment
adviser
fees
3,880,772
Fund
services
fees
514,632
Custodian
fees
107,478
Registration
fees
25,220
Professional
fees
65,977
Trustees'
fees
and
expenses
13,519
Other
expenses
226,392
Total
Expenses
4,833,990
Fees
waived
(992,034)
Net
Expenses
3,841,956
NET
INVESTMENT
INCOME
5,224,950
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
loss
on:
Investments
(2,912,638)
Foreign
currency
transactions
(45,958)
Net
realized
loss
(2,958,596)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
18,835,066
Foreign
currency
translations
37,779
Net
change
in
unrealized
appreciation
(depreciation)
18,872,845
NET
REALIZED
AND
UNREALIZED
GAIN
15,914,249
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
21,139,199
13
Polaris
Global
Value
Fund
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
See
Notes
to
Financial
Statements.
For
the
Years
Ended
December
31,
2020
2019
OPERATIONS
Net
investment
income
$
5,224,950
$
10,625,040
Net
realized
gain
(loss)
(2,958,596)
6,694,842
Net
change
in
unrealized
appreciation
(depreciation)
18,872,845
74,850,623
Increase
in
Net
Assets
Resulting
from
Operations
21,139,199
92,170,505
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(6,905,258)
(16,913,601)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
79,862,710
32,560,718
Reinvestment
of
distributions
6,452,739
15,585,854
Redemption
of
shares
(118,715,995)
(76,691,213)
Redemption
fees
23,683
8,300
Decrease
in
Net
Assets
from
Capital
Share
Transactions
(32,376,863)
(28,536,341)
Increase
(Decrease)
in
Net
Assets
(18,142,922)
46,720,563
NET
ASSETS
Beginning
of
Year
468,881,841
422,161,278
End
of
Year
$
450,738,919
$
468,881,841
SHARE
TRANSACTIONS
Sale
of
shares
3,494,534
1,242,993
Reinvestment
of
distributions
222,842
559,936
Redemption
of
shares
(5,152,538)
(2,917,239)
Decrease
in
Shares
(1,435,162)
(1,114,310)
14
Polaris
Global
Value
Fund
FINANCIAL
HIGHLIGHTS
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
December
31,
2020
2019
2018
2017
2016
NET
ASSET
VALUE,
Beginning
of
Year
$
27.72
$
23.41
$
27.71
$
23.32
$
21.16
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.32
0.62
0.47
0.37
0.32
Net
realized
and
unrealized
gain
(loss)
1.53
4.72
(3.97)
4.43
2.15
Total
from
Investment
Operations
1.85
5.34
(3.50)
4.80
2.47
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.34)
(0.68)
(0.77)
(0.41)
(0.31)
Net
realized
gain
(0.11)
(0.35)
(0.03)
–
–
Total
Distributions
to
Shareholders
(0.45)
(1.03)
(0.80)
(0.41)
(0.31)
REDEMPTION
FEES(a)
0.00(b)
0.00(b)
0.00(b)
0.00(b)
0.00(b)
NET
ASSET
VALUE,
End
of
Year
$
29.12
$
27.72
$
23.41
$
27.71
$
23.32
TOTAL
RETURN
6.68%
22.79%
(12.66)%
20.61%
11.67%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
450,739
$
468,882
$
422,161
$
544,750
$
382,336
Ratios
to
Average
Net
Assets:
Net
investment
income
1.34%
2.35%
1.74%
1.45%
1.48%
Net
expenses
0.99%
0.99%
0.99%
0.99%
0.99%
Gross
expenses
(c)
1.24%
1.23%
1.23%
1.24%
1.27%
PORTFOLIO
TURNOVER
RATE
57%
10%
22%
48%
33%
(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.
15
Polaris
Global
Value
Fund
NOTES
TO
FINANCIAL
STATEMENTS
DECEMBER
31,
2020
Organization
The
Polaris
Global
Value
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
June
1,
1998
after
it
acquired
the
net
assets
of
Global
Value
Limited
Partnership
(the
“Partnership”),
in
exchange
for
Fund
shares.
The
Partnership
commenced
operations
on
July
31,
1989.
The
Fund
seeks
capital
appreciation.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Forward
currency
contracts
are
generally
valued
based
on
interpolation
of
forward
curve
data
points
obtained
from
major
banking
institutions
that
deal
in
foreign
currencies
and
currency
dealers.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
4,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
16
Polaris
Global
Value
Fund
NOTES
TO
FINANCIAL
STATEMENTS
DECEMBER
31,
2020
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
December
31,
2020,
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.
Foreign
Currency
Translations
–
Foreign
currency
amounts
are
translated
into
U.S.
dollars
as
follows:
(1)
assets
and
liabilities
at
the
rate
of
exchange
at
the
end
of
the
respective
period;
and
(2)
purchases
and
sales
of
securities
and
income
and
expenses
at
the
rate
of
exchange
prevailing
on
the
dates
of
such
transactions.
The
portion
of
the
results
of
operations
arising
from
changes
in
the
exchange
rates
and
the
portion
due
to
fluctuations
arising
from
changes
in
the
market
prices
of
securities
are
not
isolated.
Such
fluctuations
are
included
with
the
net
realized
and
unrealized
gain
or
loss
on
investments.
Foreign
Currency
Transactions
–
The
Fund
may
enter
into
transactions
to
purchase
or
sell
foreign
currency
contracts
and
options
on
foreign
currency.
Forward
currency
contracts
are
agreements
to
exchange
one
currency
for
another
at
a
future
date
and
at
a
specified
price.
A
fund
may
use
forward
currency
contracts
to
facilitate
transactions
in
foreign
securities,
to
17
Polaris
Global
Value
Fund
NOTES
TO
FINANCIAL
STATEMENTS
DECEMBER
31,
2020
manage
a
fund’s
foreign
currency
exposure
and
to
protect
the
U.S.
dollar
value
of
its
underlying
portfolio
securities
against
the
effect
of
possible
adverse
movements
in
foreign
exchange
rates.
These
contracts
are
intrinsically
valued
daily
based
on
forward
rates,
and
a
fund’s
net
equity
therein,
representing
unrealized
gain
or
loss
on
the
contracts
as
measured
by
the
difference
between
the
forward
foreign
exchange
rates
at
the
dates
of
entry
into
the
contracts
and
the
forward
rates
at
the
reporting
date,
is
recorded
as
a
component
of
NAV.
These
instruments
involve
market
risk,
credit
risk,
or
both
kinds
of
risks,
in
excess
of
the
amount
recognized
in
the
Statement
of
Assets
and
Liabilities.
Risks
arise
from
the
possible
inability
of
counterparties
to
meet
the
terms
of
their
contracts
and
from
movement
in
currency
and
securities
values
and
interest
rates.
Due
to
the
risks
associated
with
these
transactions,
a
fund
could
incur
losses
up
to
the
entire
contract
amount,
which
may
exceed
the
net
unrealized
value
included
in
its
NAV.
Distributions
to
Shareholders
–
The
Fund
declares
any
dividends
from
net
investment
income
and
pays
them
annually.
Any
net
capital
gains
and
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
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
December
31,
2020,
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
180
days
of
purchase
will
incur
a
redemption
fee
of
1.00%
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
18
Polaris
Global
Value
Fund
NOTES
TO
FINANCIAL
STATEMENTS
DECEMBER
31,
2020
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
The
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
the
Fund’s
balance
sheet.
Cash
–
Concentration
in
Uninsured
Account
For
cash
management
purposes,
the
Fund
may
concentrate
cash
with
the
Fund’s
custodian.
This
typically
results
in
cash
balances
exceeding
the
Federal
Deposit
Insurance
Corporation
(“FDIC”)
insurance
limits.
As
of
December
31,
2020,
the
Fund
had
$7,865,187
at
MUFG
Union
Bank,
N.A.
that
exceeded
the
FDIC
insurance
limit.
Fees
and
Expenses
Investment
Adviser
–
Polaris
Capital
Management,
LLC
(the
“Adviser”)
is
the
investment
adviser
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee,
payable
monthly,
from
the
Fund
at
an
annual
rate
of
1.00%
of
the
Fund’s
average
daily
net
assets.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
the
Fund’s
distributor
(the
“Distributor”).
The
Fund
does
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings,
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statement
of
Operations.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
the
Fund
pays
Apex
customary
fees
for
its
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
the
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
The
Trust
pays
each
independent
Trustee
an
annual
retainer
of
$31,000
for
services
to
the
Trust
($41,000
for
the
Chairman).
The
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-
pocket
expenses
incurred
in
connection
with
his
or
her
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
The
amount
of
Trustees’
fees
attributable
to
the
Fund
is
disclosed
in
the
Statement
of
Operations.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
the
Fund.
Fees
Waived
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
annual
operating
expenses
to
0.99%
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expense
on
short
sales,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses),
through
April
30,
2021.
Other
fund
service
providers
have
voluntarily
agreed
to
waive
and
reimburse
a
portion
of
their
fees.
These
voluntary
fee
waivers
and
reimbursements
19
Polaris
Global
Value
Fund
NOTES
TO
FINANCIAL
STATEMENTS
DECEMBER
31,
2020
may
be
reduced
or
eliminated
at
any
time.
Other
Waivers
are
not
eligible
for
recoupment.
For
the
year
ended
December
31,
2020
,
fees
waived
were
as
follows:
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
year
ended
December
31,
2020,
were
$217,153,007
and
$257,132,885,
respectively.
Federal
Income
Tax
As
of
December
31,
2020,
the
cost
of
investments
for
federal
income
tax
purposes
is
$364,756,860 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
December
31,
2020,
distributable
earnings
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
passive
foreign
investment
company
transactions,
wash
sales
and
return
of
capital
on
equity
securities.
As
of
December
31,
2020
,
the
Fund
had
$
1,166,745
of
available
long-term
capital
loss
carryforwards
that
have
no
expiration
date.
Investment
Adviser
Fees
Waived
Other
Waivers
Total
Fees
Waived
$
939,534
$
52,500
$
992,034
Gross
Unrealized
Appreciation
$
98,836,250
Gross
Unrealized
Depreciation
(21,315,590)
Net
Unrealized
Appreciation
$
77,520,660
2020
2019
Ordinary
Income
$
5,253,692
$
12,000,245
Long-Term
Capital
Gain
1,651,566
4,913,356
$
6,905,258
$
16,913,601
Undistributed
Ordinary
Income
$
765,020
Capital
and
Other
Losses
(1,166,745)
Unrealized
Appreciation
77,562,957
Total
$
77,161,232
20
Polaris
Global
Value
Fund
NOTES
TO
FINANCIAL
STATEMENTS
DECEMBER
31,
2020
Subsequent
Events
The
global
outbreak
of
the
COVID-19
virus
has
caused
negative
effects
on
many
companies,
sectors,
countries,
regions,
and
financial
markets
in
general,
and
uncertainty
exists
as
to
its
long-term
implications.
The
effects
of
the
pandemic
may
adversely
impact
the
Fund's
assets
and
performance.
The
financial
statements
do
not
include
any
adjustments
that
might
result
from
the
outcome
of
this
uncertainty.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
21
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Polaris
Global
Value
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
Polaris
Global
Value
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedule
of
investments,
as
of
December
31,
2020,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2020,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2020
by
correspondence
with
the
custodian.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2008.
Philadelphia,
Pennsylvania
February
22,
2021
22
Polaris
Global
Value
Fund
ADDITIONAL
INFORMATION
(Unaudited)
DECEMBER
31,
2020
Liquidity
Risk
Management
Program
The
Fund
has
adopted
and
implemented
a
written
liquidity
risk
management
program,
as
required
by
Rule
22e-4
(the
“Liquidity
Rule”)
under
the
Investment
Company
Act
of
1940,
as
amended.
The
liquidity
risk
management
program
is
reasonably
designed
to
assess
and
manage
the
Fund’s
liquidity
risk,
taking
into
consideration,
among
other
factors,
the
Fund's
investment
strategy
and
the
liquidity
of
the
portfolio
investments
during
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections
and
its
cash
holdings
and
access
to
other
funding
sources.
The
Board
approved
the
designation
of
the
Trust’s
Valuation
Committee
as
the
administrator
of
the
liquidity
risk
management
program
(the
“Program
Administrator”).
The
Program
Administrator
is
responsible
for
the
administration
and
oversight
of
the
program
and
for
reporting
to
the
Board
on
at
least
an
annual
basis
regarding,
among
other
things,
the
program’s
operation,
adequacy,
and
effectiveness.
The
Program
Administrator
assessed
the
Fund’s
liquidity
risk
profile
based
on
information
gathered
for
the
period
June
1,
2019
through
June
30,
2020
in
order
to
prepare
a
written
report
to
the
Board
for
review
at
its
meeting
held
on
September
11,
2020.
The
Program
Administrator’s
written
report
stated
that:
(i)
the
Fund
is
able
to
meet
redemptions
in
normal
and
reasonably
foreseeable
stressed
conditions
and
without
significant
dilution
of
remaining
shareholders’
interests
in
the
Fund;
(ii)
the
Fund's
strategy
is
appropriate
for
an
open-end
mutual
fund;
(iii)
the
liquidity
classification
determinations
regarding
the
Fund's
portfolio
investments,
which
take
into
account
a
variety
of
factors
and
may
incorporate
analysis
from
one
or
more
third-party
data
vendors,
remained
appropriate;
(iv)
the
Fund
did
not
approach
the
internal
triggers
set
forth
in
the
liquidity
risk
management
program
or
the
regulatory
percentage
limitation
(15%)
on
holdings
in
illiquid
investments;
(v)
it
continues
to
be
appropriate
to
not
set
a
“highly
liquid
investment
minimum”
for
the
Fund
because
the
Fund
primarily
holds
“highly
liquid
investments”;
and
(vi)
the
liquidity
risk
management
program
remains
reasonably
designed
and
adequately
implemented
to
prevent
violations
of
the
Liquidity
Rule.
The
report
also
reviewed
the
changes
to
the
Program
since
its
inception.
No
significant
liquidity
events
impacting
the
Fund
or
proposed
changes
to
the
Program
were
noted
in
the
report.
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
(888)
263-5594,
on
the
Fund's
website
at
www.polarisfunds.com,
and
on
the
SEC’s
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
(888)
263-5594,
on
the
Fund's
website
at
www.polarisfunds.com,
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.
23
Polaris
Global
Value
Fund
ADDITIONAL
INFORMATION
(Unaudited)
DECEMBER
31,
2020
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
July
1,
2020
through
December
31,
2020.
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.
In
addition,
if
these
fees
were
included,
your
costs
would
have
been
higher.
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
44.34
%
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
Code.
The
Fund
also
designates
Beginning
Account
Value
July
1,
2020
Ending
Account
Value
December
31,
2020
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,317.30
$
5.77
0.99%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,020.16
$
5.03
0.99%
*
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
(184)
divided
by
366
to
reflect
the
half-year
period.
24
Polaris
Global
Value
Fund
ADDITIONAL
INFORMATION
(Unaudited)
DECEMBER
31,
2020
0.29
%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
The
Fund
paid
long-term
capital
gain
dividends
of
$1,651,566.
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
(888)
263-5594
or
visit
the
Fund's
website
at
www.polarisfunds.com.
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-
2008.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
since
2017;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-
Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-
2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
25
Polaris
Global
Value
Fund
ADDITIONAL
INFORMATION
(Unaudited)
DECEMBER
31,
2020
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019.
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-
Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-
2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Todd
Proulx
Born:
1978
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Carlyn
Edgar
Born:
1963
Vice
President
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019;
Chief
Compliance
Officer,
2008-2016.
Dennis
Mason
Born:
1967
Chief
Compliance
Officer
Since
2016
Fund
Compliance
Officer,
Apex
Fund
Services
since
2019;
Fund
Compliance
Officer,
Atlantic
Fund
Services
2013-2019.
Annual
Report
DECEMBER
31,
2020
INVESTMENT
ADVISER
Polaris
Capital
Management,
LLC
121
High
Street
Boston,
MA
02110-2475
DISTRIBUTOR
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
ME
04101
www.foreside.com
TRANSFER
AGENT
Apex
Fund
Services
P.O.
Box
588
Portland,
ME
04112
www.theapexgroup.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.
225-ANR-1220
BEEHX
Annual
Report
December
31,
2020
Table
of
Contents
The
views
expressed
in
this
report
are
those
of
the
investment
advisor
of
The
BeeHive
Fund
(the
“Fund”)
as
of
December
31,
2020
and
may
not
reflect
its
views
on
the
date
this
report
is
first
published
or
any
time
thereafter.
These
views
are
intended
to
assist
shareholders
of
the
Fund
in
understanding
their
investments
in
the
Fund
and
do
not
constitute
investment
advice.
The
Fund
is
subject
to
various
forms
of
risk,
including
the
possible
loss
of
principal.
Investing
in
foreign
securities
entails
risks
not
associated
with
domestic
equities,
including
economic
and
political
instability
and
currency
fluctuations.
Investing
in
fixed
income
securities
includes
the
risk
that
rising
interest
rates
will
cause
a
decline
in
values.
Focused
investments
in
particular
industries
or
market
sectors
can
entail
increased
volatility
and
greater
market
risk
than
is
the
case
with
more
broadly
diversified
investments.
Investments
in
securities
of
small
and
mid-capitalization
companies
involve
the
possibility
of
greater
volatility
than
investments
in
larger
capitalization
companies.
Investments
in
American
Depositary
Receipts
involve
many
of
the
same
risks
as
investing
in
foreign
securities.
A
Message
to
Our
Shareholders
(Unaudited)
1
Performance
Chart
and
Analysis
(Unaudited)
4
Schedule
of
Investments
5
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
14
Additional
Information
(Unaudited)
15
The
BeeHive
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
December
31,
2020
1
Dear
Shareholders,
“Never
in
recent
memory
have
the
events
of
a
single
24-hour
period
so
shaken
two
presidencies,
the
very
Capitol
of
the
United
States
and
the
nation
itself
as
they
did
on
Wednesday.”
–
Gerald
Seib,
The
Wall
Street
Journal
,
January
7,
2021
“U.S.
stock
futures
rose
Thursday
as
investors
looked
past
the
political
unrest
to
focus
instead
on
prospects
for
higher
government
spending.”
–
Joe
Wallace
and
Xie
Yu,
The
Wall
Street
Journal,
updated
January
7,
2021
at
8:45am
ET
“The
central,
befuddling
economic
reality
of
the
United
States
at
the
close
of
2020
is
that
everything
is
terrible
in
the
world,
while
everything
is
wonderful
in
the
financial
markets.”
–
The
Upshot
,
January
1,
2021
The
first
two
passages
above
appeared
in
the
online
edition
of
The
Wall
Street
Journal
on
January
7,
just
hours
after
order
was
restored
on
Capitol
Hill.
The
juxtaposition
somehow
falls
neatly
in
line
with
the
last
year
of
extraordinary
extremes.
The
third
paragraph
pinpoints
the
issue
that
we
have
been
addressing
since
the
second
quarter
of
2020:
the
apparent,
jarring
disconnect
between
financial
markets
and
the
“real”
economy.
The
explanation
remains
consistent:
money.
We
have
written
about
the
explosion
in
the
money
supply.
There
is
simply
more
money
than
can
be
absorbed
by
the
economy.
It
has
found
its
way
into
financial
markets
leading
to
rising
asset
prices.
For
this
we
can
look
to
two
key
policies
of
the
Federal
Reserve
(Fed),
the
setting
of
short-term
interest
rates
and
the
bond
buying
program
known
as
Quantitative
Easing
(QE).
As
we
know,
the
Fed
has
set
the
short-term
rate
at
near-zero.
In
its
QE
program,
the
Fed
has
been
purchasing
$80
billion
of
U.S.
Treasury
securities
and
$40
billion
of
U.S.
Government
sponsored
securities
every
month.
By
injecting
$120
billion
in
cash
every
month
back
into
financial
markets,
QE
keeps
interest
rates
low
and
investors
flush
with
cash.
We
can
think
of
this
as
the
first
dose
of
an
economic
vaccine,
aimed
at
steadying
markets
and
protecting
the
financial
system.
The
booster
shot
came
in
the
form
of
fiscal
stimulus:
government
programs
that
put
money
directly
into
the
hands
of
citizens
and
businesses.
The
CARES
Act,
with
its
Paycheck
Protection
Program,
enhanced
unemployment
benefits,
and
stimulus
checks
injected
stunning
sums.
While
some
of
this
money
went
into
the
economy,
much
of
it
found
its
way
into
personal
savings
and
into
financial
markets.
Largely
thanks
to
government
programs,
disposable
personal
income
actually
increased
by
about
$1
trillion
from
March
through
November
of
2020.
1
At
the
same
time,
personal
consumption
dropped
by
more
than
$500
billion.
1
The
total
increase
in
personal
savings
was
greater
than
$1.5
trillion.
We
can
trace
this
money
into
the
stock
market
in
several
ways.
According
to
some
estimates,
individual
investors
(so-called
“retail
investors”)
opened
more
than
10
million
new
brokerage
accounts
in
2020
and
accounted
for
approximately
25%
of
average
daily
trading
volume
since
the
pandemic
began.
Three
million
of
those
accounts
have
been
attributed
to
Robinhood
Markets,
the
app-
based
trading
platform
aimed
at
first-time
investors.
Even
staid
old
firms
like
Morgan
Stanley
and
Charles
Schwab
are
trying
to
increase
their
exposure
to
individual
traders
by
acquiring
firms
like
E-Trade
and
TD
Ameritrade,
respectively.
As
might
be
expected,
inexperienced
investors
and
traders
have
introduced
a
more
speculative
tone
to
the
market.
In
2020,
nearly
400
stocks
increased
more
than
100%,
more
than
half
of
which
are
expected
to
lose
money
for
the
year.
Privately
held
companies
rushed
to
take
advantage
of
this
environment;
there
were
nearly
500
initial
public
offerings
over
the
year.
Some
were
household
names
like
Airbnb.
Some
were
unfamiliar
like
QuantumScape
or
XPeng.
Still
others
had
no
stated
business
at
all.
248
Special
Purpose
Acquisition
Companies
(with
the
unfortunate
moniker
“SPAC”
and
referred
to
as
blank
check
companies)
raised
a
total
of
$83
billion
(nearly
twice
as
much
as
the
previous
ten
years
combined)
to
invest
in
undisclosed
or
undetermined
businesses
at
some
point
in
the
future).
All
in
all,
more
companies
went
public
in
2020
than
in
1999
at
the
height
of
the
dot-com
bubble.
1
U.S.
Bureau
of
Economic
Analysis
The
BeeHive
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
December
31,
2020
2
To
be
sure,
not
all
retail
investing
was
speculative;
individuals
also
directed
their
increasing
savings
into
more
orthodox
investments.
Robinhood
discloses
the
100
most
popular
holdings
of
its
clients.
Among
the
top
twenty,
Amazon,
Alphabet
(Google),
Microsoft,
Facebook,
Coca
Cola,
Nike
and
GM
join
Virgin
Galactic
Holdings
and
Peloton
Interactive.
As
has
been
the
case
since
stocks
began
to
rebound
in
late
March,
the
overall
strength
of
benchmarks
like
the
S&P
500
has
claimed
the
headlines.
Through
the
third
quarter
of
2020,
stock
performance
had
been
dominated
by
a
small
handful
of
the
largest
technology
companies.
The
BeeHive
Fund’s
investments
benefited
from
this
trend
to
a
certain
extent.
Though
the
Fund
does
have
meaningful
investments
in
large
technology
and
e-commerce
providers,
its
portfolio
exposure
is
not
as
extreme
as
the
S&P
500.
Your
Fund
also
benefited
from
strong
returns
from
such
diverse
resources
as
healthcare,
beverage
cans,
home
appliances
and
select
foreign
stocks.
While
the
first
six
months
of
the
year
saw
a
high
level
of
trading
activity
in
the
Fund’s
portfolio,
during
the
second
half
of
the
year
portfolio
moves
were
more
modest.
We
trimmed
some
big
winners
and
reinvested
the
proceeds
in
companies
that
we
believe
will
generate
attractive
future
returns.
We
added
to
the
Fund’s
position
in
Fiserv
(FISV),
which
we
believe
is
well
valued
given
our
expectation
of
a
long
runway
of
growth
from
the
continued
shift
towards
electronic
payments
(away
from
cash),
as
well
as
increasing
the
Fund’s
holdings
in
Intercontinental
Exchange
(ICE)
and
General
Motors
(GM).
We
initiated
new
positions
in
innovative
prescription
drug
management
company,
Tabula
Rasa
Healthcare
(TRHC),
and
global
insurance
broker,
Aon.
Aon
is
in
the
middle
of
a
merger
with
Willis
Tower
Watson,
which
once
completed
should
position
the
company
well
to
serve
clients
as
economic
activity
recovers.
Market
leadership
in
the
fourth
quarter
shifted
away
from
S&P
500
dominant
technology
companies.
With
the
nearly
back-to-
back
announcements
of
two
effective
vaccines,
investors
seemed
to
factor
in
a
more
robust
economic
recovery.
In
the
period
since
the
first
announcement
(November
9),
former
laggards
became
leaders.
Small
stocks
outperformed
large;
economically
sensitive
sectors
like
financials
(particularly
banks),
energy
and
industrials
showed
signs
of
life.
Longer
term
interest
rates
even
crept
higher,
as
the
yield
on
the
ten-year
U.S.
Treasury
note
rose
from
0.77%
to
0.92%
at
year
end.
Looking
forward,
we
remain
guardedly
optimistic
for
two
reasons.
The
primary
factor
is
that
monetary
conditions
have
not,
nor
are
likely
to
change.
Central
bankers,
especially
in
the
U.S.,
have
explicitly
noted
no
plans
to
raise
interest
rates
or
to
reduce
bond
purchases
for
at
least
twelve
months.
Even
then,
we
believe
the
removal
of
accommodation
will
be
slow
and
well
telegraphed.
The
mountain
of
money
they
have
created
will
continue
to
grow
and
find
its
way
into
financial
assets.
Despite
this,
at
some
point
we
will
likely
hear
the
sounds
of
speculative
bubbles
popping.
We
believe,
eventually,
first
time
investors
will
learn
the
hard
lesson
that
valuation
does
in
fact
matter,
and
many
will
withdraw
from
the
market,
seeking
“safer
havens”
for
what
remains
of
their
capital.
But
in
their
place,
we
are
likely
to
see
reinvigorated
corporate
buying.
Since
the
onset
of
the
pandemic,
companies
spent
less
money
purchasing
their
own
shares
(down
41%
through
the
third
quarter)
or
acquiring
businesses
(down
30%).
This
was
the
result
of
prudently
safeguarding
liquidity
in
the
face
of
great
uncertainty.
However,
new
or
increased
stock
buyback
plans
are
already
in
the
works.
In
December
alone,
JPMorgan
and
ten
other
companies
announced
plans
to
repurchase
shares
for
a
combined
total
of
more
than
$75
billion.
Likewise,
merger
and
acquisition
(M&A)
activity
is
picking
up
with
new
deals
almost
daily.
M&A
bankers
are
reporting
strong
deal
pipelines,
as
well.
With
sponsor
firms
like
Carlyle,
Blackstone
and
others
flush
with
investor
cash,
private
equity
activity
should
pick
up
as
well,
creating
further
demand
for
stocks.
Secondly,
we
see
a
broadening
set
of
attractive
investment
opportunities.
A
generally
improving
economy
should
benefit
many
more
than
just
the
largest
handful
of
companies.
We
believe
investors
will
be
less
desperate
to
chase
“new”
business
models
at
any
cost
and
more
inclined
to
weigh
valuation
and
financial
productivity.
The
pandemic
has
changed
many
habits
and
routines
(this
letter
is
being
written
and
edited
from
bedrooms,
living
rooms
and
basements).
Some
changes
will
endure;
some
will
not.
It
will
be
unusually
difficult
to
forecast
many
behaviors,
which
creates
the
kind
of
uncertainty
that
leads
to
opportunity.
The
BeeHive
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
December
31,
2020
3
We
believe
this
environment
favors
our
approach.
We
think
our
intensive
research,
whether
focused
on
stocks
or
bonds,
will
be
rewarded.
Rather
than
becoming
enamored
with
high-flying
story
stocks
(cloud-computing,
electric
delivery
vans,
e-commerce
platforms,
etc.),
we
will
maintain
the
discipline
of
long-term
investing
in
real
businesses
with
strong
and
growing
earnings
and
cash
flow.
We
firmly
believe
this
is
the
best
way
to
grow
capital
in
good
times
and
preserve
it
during
challenging
periods.
Regards,
Spears
Abacus
The
BeeHive
Fund
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
December
31,
2020
4
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
The
BeeHive
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
S&P
500
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
S&P
500
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
S&P
500
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$10,000
Investment
in
The
BeeHive
Fund
vs.
S&P
500®
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
0.99%.
However,
the
Fund’s
advisor 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
taxes,
interest,
portfolio
transaction
expenses
and
extraordinary
expenses)
to
0.99%,
through
April
30,
2021
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
advisor
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
advisor
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
Expense
Cap
and
(ii)
the
Expense
Cap
in
place
at
the
time
the
fees/expenses
were
waived/
reimbursed.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(866)
684-4915.
Average
Annual
Total
Returns
Periods
Ended
December
31,
2020
One
Year
Five
Year
Ten
Year
The
BeeHive
Fund
15.59%
10.57%
9.65%
S&P
500®
Index
18.40%
15.22%
13.88%
The
BeeHive
Fund
SCHEDULE
OF
INVESTMENTS
December
31,
2020
5
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
December
31,
2020.
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
is
Common
Stock.
The
Level
2
value
displayed
in
this
table
is
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
-
96.2%
Consumer
Discretionary
-
17.4%
14,550
Alibaba
Group
Holding,
Ltd.,
ADR
(a)
$
3,386,222
35,760
Aptiv
PLC
4,659,170
98,520
Comcast
Corp.,
Class A
5,162,448
109,550
General
Motors
Co.
4,561,662
108,720
Prosus
NV,
ADR
2,358,137
56,513
Restaurant
Brands
International,
Inc.
3,453,509
13,930
Whirlpool
Corp.
2,514,226
26,095,374
Consumer
Staples
-
7.1%
81,940
Mondelez
International,
Inc.,
Class A
4,791,032
49,750
Nestle
SA,
ADR
5,860,550
10,651,582
Financials
-
13.8%
15,320
Aon
PLC,
Class A
3,236,656
11,720
Berkshire
Hathaway,
Inc.,
Class B
(a)
2,717,516
36,970
Chubb,
Ltd.
5,690,422
42,950
Intercontinental
Exchange,
Inc.
4,951,706
31,610
JPMorgan
Chase
&
Co.
4,016,683
20,612,983
Healthcare
-
11.3%
15,555
Becton
Dickinson
and
Co.
3,892,172
17,055
Gilead
Sciences,
Inc.
993,625
30,411
Tabula
Rasa
HealthCare,
Inc.
(a)
1,302,807
23,010
Thermo
Fisher
Scientific,
Inc.
10,717,598
16,906,202
Industrials
-
7.1%
61,030
Berry
Global
Group,
Inc.
(a)
3,429,276
106,770
BrightView
Holdings,
Inc.
(a)
1,614,362
25,000
Danaher
Corp.
5,553,500
10,597,138
Materials
-
7.0%
42,910
Ball
Corp.
3,998,354
63,950
Crown
Holdings,
Inc.
(a)
6,407,790
10,406,144
Real
Estate
-
1.9%
28,530
Prologis,
Inc.
REIT
2,843,300
Software
&
Services
-
25.4%
3,082
Alphabet,
Inc.,
Class A
(a)
5,401,637
2,251
Alphabet,
Inc.,
Class C
(a)
3,943,482
87,110
CDK
Global,
Inc.
4,514,911
39,990
Fiserv,
Inc.
(a)
4,553,261
57,755
Microsoft
Corp.
12,845,867
104,780
Oracle
Corp.
6,778,218
38,037,376
Technology
Hardware
&
Equipment
-
5.2%
59,200
Apple,
Inc.
7,855,247
Total
Common
Stock
(Cost
$65,526,203)
144,005,346
Money
Market
Fund
-
3.9%
5,878,862
Goldman
Sachs
Financial
Square
Treasury
Instruments
Fund,
Institutional
Shares,
0.01%
(b)
(Cost
$5,878,862)
5,878,862
Investments,
at
value
-
100.1%
(Cost
$71,405,065)
$
149,884,208
Other
Assets
&
Liabilities,
Net
-
(0.1)%
(196,516)
Net
Assets
-
100.0%
$
149,687,692
ADR
American
Depositary
Receipt
PLC
Public
Limited
Company
REIT
Real
Estate
Investment
Trust
(a)
Non-income
producing
security.
(b)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
December
31,
2020.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
144,005,346
Level
2
-
Other
Significant
Observable
Inputs
5,878,862
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
149,884,208
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Total
Investments
Consumer
Discretionary
17.4%
Consumer
Staples
7.1%
Financials
13.8%
Healthcare
11.3%
Industrials
7.1%
Materials
6.9%
Real
Estate
1.9%
Software
&
Services
25.4%
Technology
Hardware
&
Equipment
5.2%
Money
Market
Fund
3.9%
100.0%
The
BeeHive
Fund
STATEMENT
OF
ASSETS
AND
LIABILITIES
December
31,
2020
6
See
Notes
to
Financial
Statements.
ASSETS
Investments,
at
value
(Cost
$71,405,065)
$
149,884,208
Receivables:
Dividends
89,218
Prepaid
expenses
6,238
Total
Assets
149,979,664
LIABILITIES
Payables:
Investment
securities
purchased
140,783
Fund
shares
redeemed
2
Distributions
payable
7,321
Accrued
Liabilities:
Investment
advisor
fees
96,391
Fund
services
fees
18,309
Other
expenses
29,166
Total
Liabilities
291,972
NET
ASSETS
$
149,687,692
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
70,109,492
Distributable
earnings
79,578,200
NET
ASSETS
$
149,687,692
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
7,746,942
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
$
19.32
The
BeeHive
Fund
STATEMENT
OF
OPERATIONS
FOR
THE
YEAR
ENDED
DECEMBER
31,
2020
7
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$15,190)
$
1,578,024
Interest
income
15,385
Total
Investment
Income
1,593,409
EXPENSES
Investment
advisor
fees
987,210
Fund
services
fees
197,514
Custodian
fees
13,644
Registration
fees
8,721
Professional
fees
43,983
Trustees’
fees
and
expenses
6,595
Other
expenses
43,814
Total
Expenses
1,301,481
Fees
waived
(13,321)
Net
Expenses
1,288,160
NET
INVESTMENT
INCOME
305,249
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
on
investments
3,342,991
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
16,524,482
NET
REALIZED
AND
UNREALIZED
GAIN
19,867,473
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
20,172,722
The
BeeHive
Fund
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
8
See
Notes
to
Financial
Statements.
For
the
Years
Ended
December
31,
2020
2019
OPERATIONS
Net
investment
income
$
305,249
$
1,856,214
Net
realized
gain
3,342,991
4,037,210
Net
change
in
unrealized
appreciation
(depreciation)
16,524,482
31,168,173
Increase
in
Net
Assets
Resulting
from
Operations
20,172,722
37,061,597
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
distributions
paid
(2,477,905)
(6,428,176)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
2,018,346
1,995,129
Reinvestment
of
distributions
2,411,269
6,253,232
Redemption
of
shares
(6,851,713)
(9,872,543)
Decrease
in
Net
Assets
from
Capital
Share
Transactions
(2,422,098)
(1,624,182)
Increase
in
Net
Assets
15,272,719
29,009,239
NET
ASSETS
Beginning
of
year
134,414,973
105,405,734
End
of
year
$
149,687,692
$
134,414,973
SHARE
TRANSACTIONS
Sale
of
shares
117,749
130,793
Reinvestment
of
distributions
126,913
369,229
Redemption
of
shares
(403,672)
(642,004)
Decrease
in
Shares
(159,010)
(141,982)
The
BeeHive
Fund
FINANCIAL
HIGHLIGHTS
9
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
December
31,
2020
2019
2018
2017
2016
NET
ASSET
VALUE,
Beginning
of
Year
$
17.00
$
13.10
$
15.23
$
14.26
$
13.64
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.04
0.24
0.13
0.10
0.13
Net
realized
and
unrealized
gain
(loss)
2.61
4.50
(1.79)
1.48
0.70
Total
from
Investment
Operations
2.65
4.74
(1.66)
1.58
0.83
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.04)
(0.24)
(0.13)
(0.09)
(0.13)
Net
realized
gain
(0.29)
(0.60)
(0.34)
(0.52)
(0.08)
Total
Distributions
to
Shareholders
(0.33)
(0.84)
(0.47)
(0.61)
(0.21)
NET
ASSET
VALUE,
End
of
Year
$
19.32
$
17.00
$
13.10
$
15.23
$
14.26
TOTAL
RETURN
15.59%
36.28%
(10.98)%
11.07%
6.11%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
149,688
$
134,415
$
105,406
$
130,876
$
117,849
Ratios
to
Average
Net
Assets:
Net
investment
income
0.23%
1.49%
0.84%
0.64%
0.99%
Net
expenses
0.98%
0.98%
0.99%
0.99%(b)
0.99%
Gross
expenses
0.99%(c)
0.98%(c)
0.99%(c)
0.99%
1.00%(c)
PORTFOLIO
TURNOVER
RATE
22%
10%
10%
14%
15%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
(b)
Ratio
includes
waivers
and
previously
waived
investment
advisory
fees
recovered. The
impact
of
the
recovered
fees
may
cause
a
higher
net
expense
ratio.
(c)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
The
BeeHive
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
10
Organization
The
BeeHive
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
September
2,
2008.
The
Fund
seeks
capital
appreciation.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Advisor,
as
defined
in
Note
3,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Advisor
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Advisor
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
NAV
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
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.
The
BeeHive
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
11
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
December
31,
2020,
for
the
Fund’s
investments
is
included
at
the
end
of
the
Fund’s
Schedule
of
Investments.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Non-cash
dividend
income
is
recorded
at
the
fair
market
value
of
the
securities
received.
Foreign
dividend
income
is
recorded
on
the
ex-dividend
date
or
as
soon
as
possible
after
determining
the
existence
of
a
dividend
declaration
after
exercising
reasonable
due
diligence.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Distributions
to
Shareholders
–
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
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
December
31,
2020,
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.
Fees
and
Expenses
Investment
Advisor
–
Spears
Abacus
Advisors
LLC
(the
“Advisor”)
is
the
investment
advisor
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Advisor
receives
an
advisory
fee,
payable
monthly,
from
the
Fund
at
an
annual
rate
of
0.75%
of
the
Fund’s
average
daily
net
assets.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
the
Fund’s
distributor
(the
“Distributor”).
The
Distributor
is
not
affiliated
with
the
Advisor
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings,
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
The
Fund
has
adopted
a
distribution
plan
in
accordance
with
Rule
12b-1
of
the
Act.
The
Fund
may
pay
the
Distributor
and/or
any
other
entity
as
authorized
by
the
Board
a
fee
up
to
0.25%
of
the
Fund’s
average
daily
net
assets.
The
Fund
has
suspended
payments
under
its
Rule
12b-1
plan
until
further
notice
and
has
not
paid
any
distribution
fees
to
date.
The
Fund
may
remove
the
suspension
and
make
payments
under
the
Rule
12b-1
plan
at
any
time,
subject
to
Board
approval.
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
The
BeeHive
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
12
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
$31,000
($41,000
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.
Expense
Reimbursement
and
Fees
Waived
The
Advisor
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
taxes,
interest,
portfolio
transaction
expenses
and
extraordinary
expenses)
to
0.99%
of
the
Fund’s
average
daily
net
assets
through
April
30,
2021
(“the
Expense
Cap”).
For
the
year
ended
December
31,
2020,
fees
waived
were
$13,321.
The
Advisor
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
Advisor
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
Fund
(after
giving
effect
to
the
recouped
amount)
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
December
31,
2020
,
$20,95
1
is
subject
to
recapture
by
the
Advisor.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
year
ended
December
31,
2020
totaled
$26,584,670
and
$33,943,842,
respectively.
Federal
Income
Tax
As
of
December
31,
2020,
cost
for
federal
income
tax
purposes
is
$71,425,044
and
net
unrealized
appreciation
consists
of:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
As
of
December
31,
2020,
distributable
earnings
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
wash
sales.
Gross
Unrealized
Appreciation
$
78,580,283
Gross
Unrealized
Depreciation
(121,119)
Net
Unrealized
Appreciation
$
78,459,164
2020
2019
Ordinary
Income
$
275,761
$
1,872,808
Long-Term
Capital
Gain
2,202,144
4,555,368
$
2,477,905
$
6,428,176
Undistributed
Ordinary
Income
$
24,992
Undistributed
Long-Term
Gain
1,094,044
Net
Unrealized
Appreciation
78,459,164
Total
$
79,578,200
The
BeeHive
Fund
NOTES
TO
FINANCIAL
STATEMENTS
December
31,
2020
13
Subsequent
Events
The
global
outbreak
of
the
COVID-19
virus
has
caused
negative
effects
on
many
companies,
sectors,
countries,
regions,
and
financial
markets
in
general,
and
uncertainty
exists
as
to
its
long-term
implications.
The
effects
of
the
pandemic
may
adversely
impact
the
Fund’s
assets
and
performance.
The
financial
statements
do
not
include
any
adjustments
that
might
result
from
the
outcome
of
this
uncertainty.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
14
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
The
BeeHive
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
The
BeeHive
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedule
of
investments,
as
of
December
31,
2020,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
December
31,
2020,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund’s
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
December
31,
2020
by
correspondence
with
the
custodian
and
broker.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
of
more
of
the
Funds
in
the
Forum
Funds
since
2008.
Philadelphia,
Pennsylvania
February
16
,
2021
The
BeeHive
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
15
Investment
Advisory
Agreement
Approval
At
a
meeting
held
on
September
11,
2020,
the
Board
of
Trustees
(the
“Board”)
of
Forum
Funds
(the
“Trust),
including
the
trustees
who
are
not
parties
to
the
agreement
or
interested
persons
of
any
such
party
(other
than
as
trustees
of
the
Trust)
(the
“Independent
Trustees”),
considered
the
approval
of
the
continuance
of
the
investment
advisory
agreement
between
the
Advisor
and
the
Trust
pertaining
to
the
Fund
(the
“Advisory
Agreement”).
In
preparation
for
its
deliberations,
the
Board
requested
and
reviewed
written
responses
from
the
Advisor
to
a
due
diligence
questionnaire
circulated
on
the
Board’s
behalf
concerning
the
services
provided
by
the
Advisor.
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
Advisor,
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
the
Fund
by
the
Advisor,
including
information
on
the
investment
performance
of
the
Fund;
(2)
the
costs
of
the
services
provided
and
profitability
to
the
Advisor
with
respect
to
its
relationship
with
the
Fund;
(3)
the
advisory
fee
and
total
expense
ratio
of
the
Fund
compared
to
a
relevant
peer
group
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
the
Fund
grows
and
whether
the
advisory
fee
enables
the
Fund’s
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
other
benefits
received
by
the
Advisor
from
its
relationship
with
the
Fund.
In
addition,
the
Board
recognized
that
the
evaluation
process
with
respect
to
the
Advisor
was
an
ongoing
one,
and,
in
this
regard,
the
Board
considered
information
provided
by
the
Advisor
at
regularly
scheduled
meetings
during
the
past
year.
Nature,
Extent
and
Quality
of
Services
Based
on
written
materials
received,
a
presentation
from
senior
representatives
of
the
Advisor
and
a
discussion
with
the
Advisor
about
the
Advisor’s
personnel,
operations
and
financial
condition,
the
Board
considered
the
quality
of
services
provided
by
the
Advisor
under
the
Advisory
Agreement.
In
this
regard,
the
Board
considered
information
regarding
the
experience,
qualifications
and
professional
background
of
the
portfolio
managers
and
other
personnel
at
the
Advisor
providing
services
to
the
Fund,
as
well
as
the
investment
philosophy
and
decision-making
process
of
the
Advisor
and
the
capability
and
integrity
of
the
Advisor’s
senior
management
and
staff.
The
Board
considered
also
the
adequacy
of
the
Advisor’s
resources.
The
Board
noted
the
Advisor’s
representation
that
the
firm
is
financially
stable
and
that
the
Advisor’s
financial
condition
will
not
impair
its
ability
to
provide
high-quality
advisory
services
to
the
Fund.
Based
on
the
presentation
and
the
materials
provided
by
the
Advisor
in
connection
with
the
Board’s
consideration
of
the
renewal
of
the
Advisory
Agreement,
the
Board
concluded
that,
overall,
it
was
satisfied
with
the
nature,
extent
and
quality
of
services
to
be
provided
to
the
Fund
under
the
Advisory
Agreement.
Performance
In
connection
with
a
presentation
by
the
Advisor
regarding
its
approach
to
managing
the
Fund,
the
Board
reviewed
the
performance
of
the
Fund
compared
to
its
primary
benchmark.
The
Board
observed
that
the
Fund
underperformed
its
primary
benchmark,
the
S&P
500
Index,
for
the
one-,
three-
and
five-,
and
ten-year
periods
ended
June
30,
2020,
and
for
the
period
since
the
Fund’s
inception
on
September
2,
2008.
The
Board
also
considered
the
Fund’s
performance
relative
to
an
independent
peer
group
of
funds
identified
by
Broadridge
Financial
Solutions,
Inc.
(“Broadridge”)
as
having
characteristics
similar
to
the
Fund,
noting
that,
based
on
the
information
provided
by
Broadridge,
the
Fund
underperformed
the
median
of
its
Broadridge
peer
group
for
the
one-,
three-
and
five-year
periods
ended
June
30,
2020.
The
Board
noted
the
Advisor’s
representation
that,
although
the
Fund
does
hold
some
positions
that
benefitted
from
the
strong
market
preference
for
growth
and
momentum
investments
over
value
investments
during
the
past
one-,
three-,
and
five-year
periods,
the
Advisor’s
discipline
of
investing
in
growing
businesses
at
reasonable
valuations
resulted
in
the
Fund’s
having
higher
exposure
to
stocks
with
“value”
attributes,
which
have
fairly
consistently
underperformed
growth
stocks
for
the
last
several
years.
The
Board
also
noted
the
Advisor’s
representation
that
the
Fund
was
overweight
certain
underperforming
sectors
relative
to
the
benchmark
and
peers
during
the
period.
The
Board
noted
further
the
Advisor’s
representation
that
the
Fund’s
conservative
cash
position,
as
well
as
attention
to
the
tax
implications
for
shareholders
of
sales
of
investments
with
large
unrealized
capital
gains,
limited
upside
performance
relative
to
the
benchmark
and
peers,
and
that
Fund’s
underperformance
during
the
six-month
period
ended
December
31,
2017
had
a
disproportionately
negative
impact
on
the
Fund’s
longer
term
performance.
Finally,
the
Board
noted
the
Advisor’s
The
BeeHive
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
16
representation
that
the
Advisor
remained
committed
to
its
investment
discipline,
including
during
periods
in
which
the
Fund’s
investment
strategy
may
be
out
of
favor
with
investors.
Based
on
the
foregoing,
including
the
Advisor’s
representations
regarding
the
Fund’s
recent
performance
and
other
applicable
considerations,
the
Board
determined
that
the
Fund
and
its
shareholders
could
benefit
from
the
Advisor’s
continued
management
of
the
Fund.
Compensation
The
Board
evaluated
the
Advisor’s
compensation
for
providing
advisory
services
to
the
Fund
and
analyzed
comparative
information
on
actual
advisory
fee
rates
and
actual
total
expense
ratios
of
the
Fund
compared
to
its
Broadridge
peer
group.
The
Board
noted
that
each
of
the
actual
advisory
fee
and
actual
total
expenses
for
the
Fund
was
higher
than
the
median
of
the
peer
group,
though
the
Board
noted
that
the
actual
advisory
fee
rates
and
actual
total
expense
ratios
for
each
of
the
Broadridge
peers,
including
the
Fund,
were
within
a
narrow
range.
In
addition,
the
Board
noted
that
the
Advisor
had
contractually
agreed
to
waive
its
fees
or
reimburse
Fund
expenses
to
the
extent
necessary
to
keep
the
total
expenses
of
the
Fund
competitive.
Based
on
the
foregoing
and
other
applicable
considerations,
the
Board
concluded
that
the
Advisor’s
advisory
fee
rate
charged
to
the
Fund
was
reasonable.
Cost
of
Services
and
Profitability
The
Board
considered
information
provided
by
the
Advisor
regarding
the
costs
of
services
and
its
profitability
with
respect
to
the
Fund.
In
this
regard,
the
Board
considered
the
Advisor’s
resources
devoted
to
the
Fund,
as
well
as
the
Advisor’s
discussion
of
costs
and
profitability
of
Fund
activities.
The
Board
noted
the
Advisor’s
representation
that
it
did
not
maintain
separately
identifiable
profit
and
loss
information
for
the
Fund.
Based
on
other
applicable
considerations,
however,
including
financial
statements
from
the
Advisor
indicating
its
profitability
and
expenses
from
overall
operations
and
the
Advisor’s
representation
that
the
Fund
required
significantly
more
attention
and
resources
than
the
other
accounts
managed
by
the
Advisor,
the
Board
concluded
that
the
Advisor’s
costs
of
services
and
profits
attributable
to
management
of
the
Fund
were
reasonable.
Economies
of
Scale
The
Board
evaluated
whether
the
Fund
would
benefit
from
any
economies
of
scale.
In
this
regard,
the
Board
considered
the
Fund’s
fee
structure,
asset
size,
and
net
expense
ratio.
The
Board
the
Advisor’s
representation
that
the
Fund
could
potentially
benefit
from
economies
of
scale
if
its
assets
were
to
increase
but
that,
in
light
of
the
Fund’s
relatively
low
asset
level
and
because
the
Advisor
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
Advisor
was
not
proposing
breakpoints
in
the
advisory
fee
at
this
time.
Based
on
the
foregoing
and
other
applicable
considerations,
and
considering
the
size
of
the
Fund,
the
Board
determined
that
the
asset
level
of
the
Fund
was
not
consistent
with
the
existence
of
economies
of
scale
and
that
economies
of
scale
were
not
a
material
factor
to
consider
in
approving
the
continuation
of
the
Advisory
Agreement.
Other
Benefits
The
Board
noted
the
Advisor’s
representation
that,
aside
from
its
contractual
advisory
fees,
it
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
Advisor
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
advisory
arrangement,
as
outlined
in
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.
The
BeeHive
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
17
Liquidity
Risk
Management
Program
The
Fund
has
adopted
and
implemented
a
written
liquidity
risk
management
program,
as
required
by
Rule
22e-4
(the
“Liquidity
Rule”)
under
the
Investment
Company
Act
of
1940,
as
amended.
The
liquidity
risk
management
program
is
reasonably
designed
to
assess
and
manage
the
Fund’s
liquidity
risk,
taking
into
consideration,
among
other
factors,
the
Fund’s
investment
strategy
and
the
liquidity
of
the
portfolio
investments
during
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections
and
its
cash
holdings
and
access
to
other
funding
sources.
The
Board
approved
the
designation
of
the
Trust’s
Valuation
Committee
as
the
administrator
of
the
liquidity
risk
management
program
(the
“Program
Administrator”).
The
Program
Administrator
is
responsible
for
the
administration
and
oversight
of
the
program
and
for
reporting
to
the
Board
on
at
least
an
annual
basis
regarding,
among
other
things,
the
program’s
operation,
adequacy,
and
effectiveness.
The
Program
Administrator
assessed
the
Fund’s
liquidity
risk
profile
based
on
information
gathered
for
the
period
June
1,
2019
through
June
30,
2020
in
order
to
prepare
a
written
report
to
the
Board
for
review
at
its
meeting
held
on
September
11,
2020.
The
Program
Administrator’s
written
report
stated
that:
(i)
the
Fund
is
able
to
meet
redemptions
in
normal
and
reasonably
foreseeable
stressed
conditions
and
without
significant
dilution
of
remaining
shareholders’
interests
in
the
Fund;
(ii)
the
Fund’s
strategy
is
appropriate
for
an
open-end
mutual
fund;
(iii)
the
liquidity
classification
determinations
regarding
the
Fund’s
portfolio
investments,
which
take
into
account
a
variety
of
factors
and
may
incorporate
analysis
from
one
or
more
third-party
data
vendors,
remained
appropriate;
(iv)
the
Fund
did
not
approach
the
internal
triggers
set
forth
in
the
liquidity
risk
management
program
or
the
regulatory
percentage
limitation
(15%)
on
holdings
in
illiquid
investments;
(v)
it
continues
to
be
appropriate
to
not
set
a
“highly
liquid
investment
minimum”
for
the
Fund
because
the
Fund
primarily
holds
“highly
liquid
investments”;
and
(vi)
the
liquidity
risk
management
program
remains
reasonably
designed
and
adequately
implemented
to
prevent
violations
of
the
Liquidity
Rule.
The
report
also
reviewed
the
changes
to
the
Program
since
its
inception.
No
significant
liquidity
events
impacting
the
Fund
or
proposed
changes
to
the
Program
were
noted
in
the
report.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(866)
684-4915
and
on
the
U.S.
Securities
and
Exchange
Commission’s
(the
“SEC”)
website
at
www.sec.gov.
The
Fund’s
proxy
voting
record
for
the
most
recent
twelve-month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(866)
684-4915
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.
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
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
Code.
The
Fund
also
designates
0.97%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
The
Fund
paid
long-term
capital
gain
dividends
of
$2,202,144.
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
BeeHive
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
18
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
July
1,
2020
through
December
31,
2020.
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.
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(866)
684-4915.
Beginning
Account
Value
July
1,
2020
Ending
Account
Value
December
31,
2020
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,231.98
$
5.50
0.98%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,020.21
$
4.98
0.98%
*
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
(184)
divided
by
366
to
reflect
the
half-year
period.
The
BeeHive
Fund
ADDITIONAL
INFORMATION
(Unaudited)
December
31,
2020
19
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-
2008.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
since
2017;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-
2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019.
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-
Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-
2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Todd
Proulx
Born:
1978
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Carlyn
Edgar
Born:
1963
Vice
President
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019;
Chief
Compliance
Officer,
2008-2016.
Dennis
Mason
Born:
1967
Chief
Compliance
Officer
Since
2016
Fund
Compliance
Officer,
Apex
Fund
Services
since
2019;
Fund
Compliance
Officer,
Atlantic
Fund
Services
2013-2019.
THE
BEEHIVE
FUND
P.O
Box
588
Portland,
Maine
04112
(866)
684-4915
(toll
free)
The
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.
Distributor
Foreside
Fund
Services,
LLC
Three
Canal
Plaza
Suite
100
Portland,
Maine
04101
www.foreside.com
237-ANR-1220
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 $44,900 in 2019 and $44,900 in 2020.
(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 2019 and $0 in 2020.
(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 $9,000 in 2019 and $9,000 in 2020. 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 2019 and $0 in 2020.
(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 2018 and $0 in 2019. 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 Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in
Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
(a)(3) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Forum Funds
By: | /s/ Jessica Chase | |
Jessica Chase, Principal Executive Officer | ||
Date: | February 19, 2021 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Jessica Chase | |
Jessica Chase, Principal Executive Officer | ||
Date: | February 19, 2021 |
By: | /s/ Karen Shaw | |
Karen Shaw, Principal Financial Officer | ||
Date: | February 19, 2021 |