As filed with the Securities and Exchange Commission on November 2, 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: August 31
Date of reporting period: September 1, 2020 – August 31, 2021
ITEM 1. REPORT TO STOCKHOLDERS.
Annual
Report
August
31,
2021
MAI
Managed
Volatility
Fund
Managed
By
MAI
Capital
Management,
LLC
TABLE
OF
CONTENTS
IMPORTANT
INFORMATION
The
views
expressed
in
this
report
are
those
of
the
MAI
Managed
Volatility
Fund
(the
“Fund”)
managers
as
of
August
31,
2021,
and
may
not
reflect
their
views
on
the
date
this
report
is
first
published
or
anytime
thereafter.
These
views
are
intended
to
assist
shareholders
of
the
Fund
in
understanding
their
investments
in
the
Fund
and
do
not
constitute
investment
advice.
An
investment
in
the
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal
amount
invested.
The
Fund
may
invest
in
securities
issued
by
smaller
and
medium-sized
companies,
which
typically
involves
greater
risk
than
investing
in
larger,
more
established
companies.
Selling
call
options
risk
occurs
if
the
Fund
is
required
to
sell
an
underlying
security
and
forego
gains
if
the
market
price
exceeds
the
exercise
price
before
the
expiration
date.
Selling
put
options
risk
occurs
if
the
Fund
is
required
to
buy
an
underlying
security
and
forego
gains
if
the
market
price
is
below
the
exercise
price
before
the
expiration
date.
Option
risks
include,
but
are
not
limited
to,
the
possibility
of
an
imperfect
correlation
between
the
movement
in
the
options’
prices
and
that
of
the
securities/indices
hedged
(or
used
for
cover),
which
may
render
a
given
hedge
unable
to
achieve
its
objective;
possible
loss
of
the
premium
paid
for
options;
and
potential
inability
to
benefit
from
the
appreciation
of
an
underlying
security
above
the
exercise
price.
ADRs
(“American
Depositary
Receipt”)
may
be
subject
to
international
trade,
currency,
political,
regulatory
and
diplomatic
risks.
The
Fund
is
also
subject
to
other
risks,
such
as
fixed-income
securities
risk,
which
are
detailed
in
the
Fund’s
prospectus.
Diversification
does
not
assure
a
profit
or
protect
against
a
loss
in
a
declining
market.
A
put
is
an
option
contract
giving
the
owner
the
right,
but
not
the
obligation,
to
sell
a
specified
amount
of
an
underlying
asset
at
a
set
price
within
a
specified
time.
A
cash-secured
put
is
a
put
for
which
the
writer
deposits
an
amount
of
cash
equal
to
the
option’s
exercise
price.
A
call
is
an
option
contract
giving
the
owner
the
right
(but
not
the
obligation)
to
buy
a
specified
amount
of
an
underlying
security
at
a
specified
price
within
a
specified
time.
A
covered
call
is
an
options
strategy
whereby
an
investor
holds
a
(long)
position
in
an
asset
and
writes
(sells)
call
options
on
that
same
asset
in
an
effort
to,
potentially,
generate
increased
income
from
the
asset.
A
call
option
is
out-of-the-money
if
the
stock
price
is
below
its
strike
price
and
a
put
option
is
out-of-the-money
if
the
stock
price
is
above
its
strike
price.
The
spread
to
strike
price
is
the
difference
between
the
current
price
of
the
security
and
the
strike
price.
Strike
price
is
the
price
at
which
a
specific
options
contract
can
be
exercised.
Beta
is
a
measure
of
a
fund’s
sensitivity
to
market
movements.
A
portfolio
with
a
beta
greater
than
1
is
more
volatile
than
the
market,
and
a
portfolio
with
a
beta
less
than
1
is
less
volatile
than
the
market.
Premium
realized
through
the
sale
of
options
is
not
distributable
as
quarterly
income.
Sharpe
ratio
measures
risk-adjusted
performance.
The
greater
a
portfolio’s
sharpe
ratio,
the
better
its
risk-adjusted
performance
has
been.
Standard
deviation
is
a
statistical
measure
of
the
volatility
of
the
fund’s
returns.
In
general,
the
higher
the
standard
deviation,
the
greater
the
volatility
of
the
return.
The
CBOE
S&P
500
BuyWrite
Index
(BXM)
tracks
the
performance
of
a
hypothetical
at-the-money
buy-write
strategy
on
the
S&P
500.
Data
is
available
on
the
index
going
back
to
June
30,
1986.
One
cannot
invest
directly
in
an
index.
A
Message
to
Our
Shareholders
(Unaudited)
1
Performance
Chart
and
Analysis
(Unaudited)
3
Schedule
of
Investments
4
Schedule
of
Call
and
Put
Options
Written
7
Notes
to
Schedules
of
Investments
and
Call
and
Put
Options
Written
8
Statement
of
Assets
and
Liabilities
10
Statement
of
Operations
11
Statements
of
Changes
in
Net
Assets
12
Financial
Highlights
13
Notes
to
Financial
Statements
15
Report
of
Independent
Registered
Public
Accounting
Firm
22
Additional
Information
(Unaudited)
23
1
MAI
Managed
Volatility
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
August
31,
2021
Dear
Shareholder,
The
MAI
Managed
Volatility
Fund
(the
"Fund")
seeks
to
achieve
income
and
long-term
capital
appreciation;
however
we
differ
from
a
traditional
long
equity
fund
in
our
lower
equity
exposure
and
use
of
an
option
overlay
strategy
in
which
we
sell
covered
calls
and
cash
secured
puts.
Premiums
received
from
writing
options
provide
a
potential
source
of
return
to
the
Fund
that
is
not
dependent
on
economic
growth.
For
the
fiscal
year
ending
August
31,
2021,
the
Fund's
Institutional
Class
returned
15.12%.
Over
the
same
period,
the
S&P
500®
Index
(the
"S&P
500")
gained
31.17%.
During
the
fiscal
year,
the
CBOE
Volatility
Index
(“VIX”),
a
measure
of
market
risk,
declined
by
almost
38%
as
it
started
the
fiscal
year
at
26.41
hit
a
low
of
15.07
on
July
2,
spiked
to
a
high
of
40.28
on
October
28,
and
closed
the
fiscal
year
at
16.48.
The
Fund’s
limited
equity
allocation,
combined
with
strong
positive
performance
of
stocks
amid
decreasing
volatility,
were
the
primary
drivers
of
the
gap
between
the
Fund’s
performance
and
that
of
the
market.
Volatility
was
significantly
higher
during
the
first
quarter
of
the
fiscal
year
as
investors
were
faced
with
significant
economic
uncertainty
due
to
the
COVID-19
pandemic.
Furthermore,
the
Presidential
and
Congressional
elections
caused
additional
investor
angst.
Volatility
moderated
with
the
successful
introduction
of
the
vaccine
and
once
the
election
outcome
was
decided.
After
dealing
with
a
9.5%
pullback
in
September
and
a
7.5%
in
October,
remarkably
the
market
did
not
even
experience
a
5%
pullback
for
the
remainder
of
the
fiscal
year.
While
the
averages
remained
buoyant,
we
did
see
swings
in
the
relative
performance
of
large-cap
versus
small
cap
and
growth
versus
value
investing.
The
bond
market
also
saw
dramatic
changes
as
U.S.
10-year
Treasuries
began
the
fiscal
year
at
0.70%
crossed
1.00%
in
early
January,
topped
out
at
1.74%
at
the
end
of
March
and
finished
the
fiscal
year
at
1.31%.
But
through
it
all,
the
equity
market
indices
hardly
wavered.
At
this
stage
of
the
economic
cycle
and
after
the
returns
we
have
captured
over
the
past
18
months,
we
have
taken
a
conservative
stance.
We
have
modestly
lowered
the
amount
of
options
we
have
written,
pro-actively
closed
out
positions
when
the
remaining
return
on
our
collateral
is
low,
and
have
maintained
a
shorter
than
average
duration.
We
are
proud
to
share
with
you
that
we
have
achieved
a
5-star
rating
from
Morningstar
for
our
trailing
ten-year
performance.
When
we
started
the
mutual
fund
in
the
fall
of
2010
we
set
out
to
deliver
attractive
risk-adjusted
returns
to
our
investors
by
utilizing
what
we
felt
was
an
underappreciated
mechanism
–
the
options
market.
Achieving
this
honor
feels
like
validation
of
our
original
goal
and
we
look
forward
to
dutifully
working
on
the
same
goal
over
the
next
ten
years.
We
thank
you
for
your
support.
Sincerely,
Seth
E.
Shalov
Kurt
D.
Nye
Richard
J.
Buoncore
2
MAI
Managed
Volatility
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
August
31,
2021
Morningstar
assigns
the
Fund
to
its
Options
Trading
category.
The
Institutional
Shares
(MAIPX)
earned
4
stars
for
the
Morningstar
Overall
Rating
among
85
funds
in
the
U.S.-domiciled
Options
Trading
category,
3
stars
for
3-year
rating
among
85
funds,
3
stars
for
5-year
rating
among
55
funds,
and
5
stars
for
10-year
rating
among
11
funds.
Ratings
are
based
on
risk
adjusted
returns.
The
Morningstar
Rating™
for
funds,
or
“star
rating”,
is
calculated
for
managed
products
(including
mutual
funds,
variable
annuity
and
variable
life
subaccounts,
exchange-traded
funds,
closed-end
funds,
and
separate
accounts)
with
at
least
a
three-year
history.
Exchange-traded
funds
and
open-
ended
mutual
funds
are
considered
a
single
population
for
comparative
purposes.
It
is
calculated
based
on
a
Morningstar
Risk-Adjusted
Return
measure
that
accounts
for
variation
in
a
managed
product’s
monthly
excess
performance,
placing
more
emphasis
on
downward
variations
and
rewarding
consistent
performance.
The
top
10%
of
products
in
each
product
category
receive
5
stars,
the
next
22.5%
receive
4
stars,
the
next
35%
receive
3
stars,
the
next
22.5%
receive
2
stars,
and
the
bottom
10%
receive
1
star.
The
Overall
Morningstar
Rating
for
a
managed
product
is
derived
from
a
weighted
average
of
the
performance
figures
associated
with
its
three-,
five-,
and
10-year
(if
applicable)
Morningstar
Rating
metrics.
The
weights
are:
100%
three-year
rating
for
36-59
months
of
total
returns,
60%
five-year
rating/40%
three-year
rating
for
60-119
months
of
total
returns,
and
50%
10-year
rating/30%
five-year
rating/20%
three-year
rating
for
120
or
more
months
of
total
returns.
While
the
10-year
overall
star
rating
formula
seems
to
give
the
most
weight
to
the
10-year
period,
the
most
recent
three-year
period
actually
has
the
greatest
impact
because
it
is
included
in
all
three
rating
periods.
©2021
Morningstar,
Inc.
All
Rights
Reserved.
The
information
herein:
(1)
is
proprietary
to
Morningstar
and/or
its
content
providers;
(2)
may
not
be
copied
or
distributed;
and
(3)
is
not
warranted
to
be
accurate,
complete
or
timely.
Neither
Morningstar
nor
its
content
providers
are
responsible
for
any
damages
or
losses
arising
from
any
use
of
this
information.
Past
performance
is
no
guarantee
of
future
results.
3
MAI
Managed
Volatility
Fund
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
August
31,
2021
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$50,000
investment
in
the
Institutional
Class,
including
reinvested
dividends
and
distributions,
in
the
MAI
Managed
Volatility
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
the
S&P
500
Index
(“S&P
500”),
since
inception.
The
S&P
500
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
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
$50,000
Investment
MAI
Managed
Volatility
Fund
-
Institutional
Class
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
ratios
(gross)
for
Institutional
Class
and
Investor
Class
are
1.17%
and
6.84%,
respectively.
However,
the
Fund’s
adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
acquired
fund
fees
and
expenses,
dividends
on
short
sales,
brokerage
costs,
and
extraordinary
expenses)
to
0.99%
and
1.24%,
for
the
Institutional
Class
and
Investor
Class,
respectively,
through
January
1,
2022
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
net
operating
expenses
after
fee
waiver
and/or
expense
reimbursements
are
1.05%
and
1.30%
for
the
Institutional
Class
and
Investor
Class,
respectively.
The
adviser
may
recoup
from
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
adviser
pursuant
to
the
Expense
Cap
if
such
recoupment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(after
the
recoupment
has
been
taken
into
account)
to
exceed
the
lesser
of
(i)
the
then-current
Expense
Cap
and
(ii)
the
Expense
Cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
year,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(877)
414-7884.
Average
Annual
Total
Returns
Periods
Ended
August
31,
2021
One
Year
Five
Year
Ten
Year
Since
Inception*
MAI
Managed
Volatility
Fund
-
Institutional
Class
15.12%
7.12%
6.58%
6.33%
MAI
Managed
Volatility
Fund
-
Investor
Class
14.79%
6.84%
6.33%
6.01%
S&P
500®
Index
(since
September
23,
2010)
31.17%
18.02%
16.34%
15.89%
*
Institutional
Class
and
Investor
Class
commenced
operations
on
September
23,
2010,
and
December
2,
2010,
respectively.
MAI
Managed
Volatility
Fund
SCHEDULE
OF
INVESTMENTS
August
31,
2021
4
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
56.6%
Communication
Services
-
7.2%
1,433
Alphabet,
Inc.,
Class A
(a)
$
4,147,030
34,293
AT&T,
Inc.
940,314
32,172
Comcast
Corp.,
Class A
1,952,197
7,289
Facebook,
Inc.,
Class A
(a)(b)
2,765,301
10,041
The
Walt
Disney
Co.
(a)
1,820,433
17,941
Verizon
Communications,
Inc.
986,755
12,612,030
Consumer
Discretionary
-
5.4%
1,118
Amazon.com,
Inc.
(a)
3,880,343
2,814
McDonald's
Corp.
668,212
10,544
NIKE,
Inc.,
Class B
1,737,019
10,011
The
Home
Depot,
Inc.
(c)
3,265,388
9,550,962
Consumer
Staples
-
3.7%
11,233
Altria
Group,
Inc.
564,234
5,660
Anheuser-Busch
InBev
SA/NV,
ADR
346,675
1,270
Costco
Wholesale
Corp.
578,472
5,376
Diageo
PLC,
ADR
1,032,783
15,152
Mondelez
International,
Inc.,
Class A
940,485
9,224
PepsiCo.,
Inc.
1,442,541
4,882
The
Procter
&
Gamble
Co.
695,148
5,755
Walmart,
Inc.
852,316
6,452,654
Energy
-
1.5%
4,159
Chevron
Corp.
402,466
4,761
EOG
Resources,
Inc.
321,463
7,329
Exxon
Mobil
Corp.
399,577
48,133
Kinder
Morgan,
Inc.
783,124
5,807
Marathon
Petroleum
Corp.
344,181
3,323
Occidental
Petroleum
Corp.
85,368
8,894
Schlumberger
NV
249,388
2,585,567
Financials
-
6.3%
52,675
Bank
of
America
Corp.
2,199,181
4,184
Berkshire
Hathaway,
Inc.,
Class B
(a)
1,195,662
7,060
Chubb,
Ltd.
1,298,475
11,965
Citigroup,
Inc.
860,403
12,857
JPMorgan
Chase
&
Co.
2,056,477
14,790
MetLife,
Inc.
916,980
12,732
The
Charles
Schwab
Corp.
927,526
13,795
U.S.
Bancorp
791,695
19,495
Wells
Fargo
&
Co.
890,922
11,137,321
Health
Care
-
7.8%
15,837
Abbott
Laboratories
2,001,322
9,442
AbbVie,
Inc.
1,140,405
7,031
Amgen,
Inc.
1,585,701
11,136
Bristol-Myers
Squibb
Co.
744,553
9,531
CVS
Health
Corp.
823,383
9,690
Johnson
&
Johnson
1,677,630
10,745
Medtronic
PLC
1,434,242
6,765
Merck
&
Co.,
Inc.
516,102
676
Organon
&
Co.
22,910
20,839
Pfizer,
Inc.
960,053
6,703
UnitedHealth
Group,
Inc.
(c)
2,790,258
2,585
Viatris,
Inc.
37,818
13,734,377
MAI
Managed
Volatility
Fund
SCHEDULE
OF
INVESTMENTS
August
31,
2021
5
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Industrials
-
4.1%
5,392
Carrier
Global
Corp.
$
310,579
9,007
Honeywell
International,
Inc.
2,088,813
2,696
Otis
Worldwide
Corp.
248,625
14,637
Raytheon
Technologies
Corp.
1,240,632
3,529
The
Boeing
Co.
(a)
774,616
4,919
Union
Pacific
Corp.
1,066,636
7,679
United
Parcel
Service,
Inc.,
Class B
1,502,243
7,232,144
Information
Technology
-
17.3%
6,178
Advanced
Micro
Devices,
Inc.
(a)
684,028
40,860
Apple,
Inc.
(c)
6,203,774
2,387
Broadcom,
Inc.
1,186,840
27,517
Cisco
Systems,
Inc./Delaware
1,624,053
961
Fortinet,
Inc.
(a)
302,850
15,389
Intel
Corp.
831,929
2,669
Intuit,
Inc.
1,510,948
19,736
Microsoft
Corp.
(c)
5,957,904
6,724
NVIDIA
Corp.
(b)
1,505,167
24,562
Oracle
Corp.
2,189,211
12,656
QUALCOMM,
Inc.
1,856,509
2,444
ServiceNow,
Inc.
(a)
1,573,056
14,260
Visa,
Inc.,
Class A
(c)
3,266,966
11,649
Xilinx,
Inc.
(b)(d)
1,812,468
30,505,703
Materials
-
0.3%
2,318
Air
Products
and
Chemicals,
Inc.
624,724
Real
Estate
-
1.2%
4,439
American
Tower
Corp.
REIT
1,296,943
25,155
Weyerhaeuser
Co.
REIT
905,580
2,202,523
Utilities
-
1.8%
37,380
NextEra
Energy,
Inc.
(c)
3,139,546
Total
Common
Stock
(Cost
$54,160,456)
99,777,551
Principal
Security
Description
Rate
Maturity
Value
U.S.
Government
&
Agency
Obligations
-
4.3%
U.S.
Treasury
Securities
-
4.3%
$
7,500,000
U.S.
Treasury
Note
(c)
(Cost
$7,478,906)
1.50%
11/30/21
7,526,883
Shares
Security
Description
Exercise
Price
Exp.
Date
Value
Warrants
-
0.0%
415
Occidental
Petroleum
Corp.
(a)
(Cost
$0)
$
22.00
08/03/27
4,200
Shares
Security
Description
Value
Money
Market
Fund
-
39.6%
69,726,920
First
American
Government
Obligations
Fund,
Class X,
0.03%
(e)
(Cost
$69,726,920)
69,726,920
MAI
Managed
Volatility
Fund
SCHEDULE
OF
INVESTMENTS
August
31,
2021
6
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
0.1%
Put
Options
Purchased
-
0.1%
16
CBOE
S&P
500
INDEX
S&P
500
$
4200.00
12/21
$
7,236,288
$
140,160
5
CBOE
S&P
500
INDEX
S&P
500
4000.00
12/21
2,261,340
30,550
Total
Put
Options
Purchased
(Premiums
Paid
$303,084)
170,710
Total
Purchased
Options
(Premiums
Paid
$303,084)
170,710
Investments,
at
value
-
100.6%
(Cost
$131,669,366)
$
177,206,264
Total
Written
Options
-
(2.0)%
(Premiums
Received
$(3,007,692))
(3,505,733)
Other
Assets
&
Liabilities,
Net
-
1.4%
2,409,568
Net
Assets
-
100.0%
$
176,110,099
MAI
Managed
Volatility
Fund
SCHEDULE
OF
CALL
AND
PUT
OPTIONS
WRITTEN
August
31,
2021
7
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Written
Options
-
(2.0)%
Call
Options
Written
-
(1.9)%
(28)
CBOE
S&P
500
INDEX
S&P
500
$
4,400.00
09/21
$
(12,663,504)
$
(376,180)
(11)
CBOE
S&P
500
INDEX
S&P
500
4,380.00
09/21
(4,974,948)
(168,740)
(51)
CBOE
S&P
500
INDEX
S&P
500
4,430.00
09/21
(23,065,668)
(587,010)
(45)
CBOE
S&P
500
INDEX
S&P
500
4,400.00
09/21
(20,352,060)
(705,690)
(31)
CBOE
S&P
500
INDEX
S&P
500
4,450.00
10/21
(14,020,308)
(411,370)
(45)
CBOE
S&P
500
INDEX
S&P
500
4,400.00
10/21
(20,352,060)
(778,500)
(25)
Facebook,
Inc.
380.00
09/21
(948,450)
(15,400)
(48)
NVIDIA
Corp.
220.00
11/21
(1,074,480)
(84,768)
(80)
Xilinx,
Inc.
135.00
09/21
(1,244,720)
(170,200)
Total
Call
Options
Written
(Premiums
Received
$(2,390,520))
(3,297,858)
Put
Options
Written
-
(0.1)%
(30)
CBOE
S&P
500
INDEX
S&P
500
4,075.00
09/21
(12,225,000)
(4,575)
(40)
CBOE
S&P
500
INDEX
S&P
500
4,200.00
09/21
(16,800,000)
(26,360)
(50)
CBOE
S&P
500
INDEX
S&P
500
4,200.00
09/21
(21,000,000)
(78,000)
(10)
CBOE
S&P
500
INDEX
S&P
500
3,800.00
01/21
(3,800,000)
(43,150)
(6)
CBOE
S&P
500
INDEX
S&P
500
3,700.00
01/21
(2,220,000)
(21,840)
(5)
CBOE
S&P
500
INDEX
S&P
500
3,300.00
01/21
(1,650,000)
(9,425)
(100)
NETLease
Corporate
Real
Estate
ETF
28.00
01/22
(280,000)
(2,100)
(100)
Realty
Income
Corp.
62.50
09/21
(625,000)
(750)
(75)
Xilinx,
Inc.
150.00
09/21
(1,125,000)
(21,675)
Total
Put
Options
Written
(Premiums
Received
$(617,172))
(207,875)
Total
Written
Options
-
(2.0)%
(Premiums
Received
$(3,007,692))
$
(3,505,733)
MAI
Managed
Volatility
Fund
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
CALL
AND
PUT
OPTIONS
WRITTEN
August
31,
2021
8
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
other
financial
instruments
and
liabilities
as
of
August
31,
2021.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
ADR
American
Depositary
Receipt
ETF
Exchange-Traded
Fund
PLC
Public
Limited
Company
REIT
Real
Estate
Investment
Trust
(a)
Non-income
producing
security.
(b)
Subject
to
call
option
written
by
the
Fund.
(c)
All
or
a
portion
of
this
security
is
held
as
collateral
for
written
options.
(d)
Subject
to
put
option
written
by
the
Fund.
(e)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
August
31,
2021.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Common
Stock
Communication
Services
$
12,612,030
$
–
$
–
$
12,612,030
Consumer
Discretionary
9,550,962
–
–
9,550,962
Consumer
Staples
6,452,654
–
–
6,452,654
Energy
2,585,567
–
–
2,585,567
Financials
11,137,321
–
–
11,137,321
Health
Care
13,734,377
–
–
13,734,377
Industrials
7,232,144
–
–
7,232,144
Information
Technology
30,505,703
–
–
30,505,703
Materials
624,724
–
–
624,724
Real
Estate
2,202,523
–
–
2,202,523
Utilities
3,139,546
–
–
3,139,546
U.S.
Government
&
Agency
Obligations
–
7,526,883
–
7,526,883
Warrants
4,200
–
–
4,200
Money
Market
Fund
–
69,726,920
–
69,726,920
Purchased
Options
–
170,710
–
170,710
Investments
at
Value
$
99,781,751
$
77,424,513
$
–
$
177,206,264
Total
Assets
$
99,781,751
$
77,424,513
$
–
$
177,206,264
Liabilities
Other
Financial
Instruments*
Written
Options
(834,318)
(2,671,415)
–
(3,505,733)
Total
Liabilities
$
(834,318)
$
(2,671,415)
$
–
$
(3,505,733)
*
Other
Financial
Instruments
are
derivative
instruments
reflected
in
separate
schedules
such
as
written
options,
which
appear
in
the
Schedule
of
Call
and
Put
Options
Written
and
are
valued
at
their
market
value
at
year
end.
MAI
Managed
Volatility
Fund
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
CALL
AND
PUT
OPTIONS
WRITTEN
August
31,
2021
9
See
Notes
to
Financial
Statements.
**Used
to
meet
the
collateral
requirements
of
a
tri-party
agreement
between
the
prime
broker,
custodian
and
the
Fund.
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Total
Net
Assets
Common
Stock
56.6
%
U.S.
Government
&
Agency
Obligations
4.3
%
Warrants
0.0
%
Money
Market
Fund**
39.6
%
Purchased
Options
0.1
%
Written
Options
(2.0)%
Other
Assets
&
Liabilities,
Net
1.4
%
100.0%
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Common
Stock
Communication
Services
12.6%
Consumer
Discretionary
9.6%
Consumer
Staples
6.5%
Energy
2.6%
Financials
11.2%
Health
Care
13.8%
Industrials
7.2%
Information
Technology
30.6%
Materials
0.6%
Real
Estate
2.2%
Utilities
3.1%
100.0%
MAI
Managed
Volatility
Fund
STATEMENT
OF
ASSETS
AND
LIABILITIES
August
31,
2021
10
See
Notes
to
Financial
Statements.
*
$1,802,474
was
held
at
Interactive
Brokers
LLC.
ASSETS
Investments,
at
value
(Cost
$131,669,366)
$
177,206,264
Cash
4,621
Deposits
with
broker*
1,802,474
Receivables:
Fund
shares
sold
583,614
Dividends
and
interest
177,902
Prepaid
expenses
24,650
Total
Assets
179,799,525
LIABILITIES
Call
options
written,
at
value
(Premiums
received
$2,390,520)
3,297,858
Put
options
written,
at
value
(Premiums
received
$617,172)
207,875
Payables:
Fund
shares
redeemed
6,144
Accrued
Liabilities:
Investment
adviser
fees
104,710
Fund
services
fees
22,063
Other
expenses
50,776
Total
Liabilities
3,689,426
NET
ASSETS
$
176,110,099
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
140,160,091
Distributable
earnings
35,950,008
NET
ASSETS
$
176,110,099
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
Institutional
Shares
12,709,821
Investor
Shares
29,721
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
Institutional
Shares
(based
on
net
assets
of
$175,685,562)
$
13.82
Investor
Shares
(based
on
net
assets
of
$424,537)
$
14.28
MAI
Managed
Volatility
Fund
STATEMENT
OF
OPERATIONS
YEAR
ENDED
AUGUST
31,
2021
11
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$443)
$
1,566,448
Interest
income
159,346
Total
Investment
Income
1,725,794
EXPENSES
Investment
adviser
fees
1,224,276
Fund
services
fees
240,066
Transfer
agent
fees:
Institutional
Shares
9,749
Investor
Shares
2,677
Non
12b-1
shareholder
servicing
fees:
Institutional
Shares
140,450
Investor
Shares
437
Distribution
fees:
Investor
Shares
833
Custodian
fees
19,104
Registration
fees:
Institutional
Shares
17,709
Investor
Shares
17,785
Professional
fees
44,629
Trustees'
fees
and
expenses
6,374
Interest
expense
70,828
Other
expenses
64,090
Total
Expenses
1,859,007
Fees
waived
(171,305)
Net
Expenses
1,687,702
NET
INVESTMENT
INCOME
38,092
NET
REALIZED
AND
UNREALIZED
GAIN
Net
realized
gain
on:
Investments
273,781
Written
options
272,836
Net
realized
gain
546,617
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
21,362,048
Written
options
953,414
Net
change
in
unrealized
appreciation
(depreciation)
22,315,462
NET
REALIZED
AND
UNREALIZED
GAIN
22,862,079
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
22,900,171
MAI
Managed
Volatility
Fund
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
12
See
Notes
to
Financial
Statements.
For
the
Years
Ended
August
31,
2021
2020
OPERATIONS
Net
investment
income
$
38,092
$
1,119,032
Net
realized
gain
(loss)
546,617
(7,158,569)
Net
change
in
unrealized
appreciation
(depreciation)
22,315,462
8,470,879
Increase
in
Net
Assets
Resulting
from
Operations
22,900,171
2,431,342
DISTRIBUTIONS
TO
SHAREHOLDERS
Institutional
Shares
(68,916)
(2,193,901)
Investor
Shares
–
(2,480)
Total
Distributions
Paid
(68,916)
(2,196,381)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
25,962,476
41,903,360
Investor
Shares
213,299
16,383
Reinvestment
of
distributions:
Institutional
Shares
68,529
2,161,228
Investor
Shares
–
2,480
Redemption
of
shares:
Institutional
Shares
(29,296,847)
(32,831,280)
Investor
Shares
(147,934)
(167,556)
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
(3,200,477)
11,084,615
Increase
in
Net
Assets
19,630,778
11,319,576
NET
ASSETS
Beginning
of
Year
156,479,321
145,159,745
End
of
Year
$
176,110,099
$
156,479,321
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
1,966,231
3,542,807
Investor
Shares
15,393
1,523
Reinvestment
of
distributions:
Institutional
Shares
5,507
183,359
Investor
Shares
–
197
Redemption
of
shares:
Institutional
Shares
(2,263,196)
(2,889,476)
Investor
Shares
(10,969)
(13,543)
Increase
(Decrease)
in
Shares
(287,034)
824,867
MAI
Managed
Volatility
Fund
FINANCIAL
HIGHLIGHTS
13
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
August
31,
2021
2020
2019
2018
2017
INSTITUTIONAL
CLASS
NET
ASSET
VALUE,
Beginning
of
Year
$
12.01
$
11.90
$
11.87
$
11.15
$
10.57
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.00
(b)
0.09
0.16
0.10
0.06
Net
realized
and
unrealized
gain
1.82
0.19
0.21
0.89
0.59
Total
from
Investment
Operations
1.82
0.28
0.37
0.99
0.65
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.01)
(0.11)
(0.14)
(0.08)
(0.04)
Net
realized
gain
–
(0.06)
(0.20)
(0.19)
(0.03)
Total
Distributions
to
Shareholders
(0.01)
(0.17)
(0.34)
(0.27)
(0.07)
NET
ASSET
VALUE,
End
of
Year
$
13.82
$
12.01
$
11.90
$
11.87
$
11.15
TOTAL
RETURN
15.12%
2.42%
3.33%
9.02%
6.20%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
175,686
$
156,165
$
144,705
$
127,214
$
117,287
Ratios
to
Average
Net
Assets:
Net
investment
income
0.02%
0.73%
1.38%
0.85%
0.59%
Net
expenses
1.03%
1.00%
0.99%
0.99%
0.99%
Interest
expense
0.04%
0.01%
–%
–%
–%
Net
expense
without
interest
expense
0.99%
0.99%
0.99%
0.99%
0.99%
Gross
expenses
(c)
1.12%
1.12%
1.10%
1.13%
1.14%
PORTFOLIO
TURNOVER
RATE
0%
22%
1%
21%
60%
(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.
MAI
Managed
Volatility
Fund
FINANCIAL
HIGHLIGHTS
14
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
August
31,
2021
2020
2019
2018
2017
INVESTOR
CLASS
NET
ASSET
VALUE,
Beginning
of
Year
$
12.44
$
12.24
$
12.11
$
11.31
$
10.71
INVESTMENT
OPERATIONS
Net
investment
income
(loss)
(a)
(0.03)
0.06
0.13
0.07
0.04
Net
realized
and
unrealized
gain
1.87
0.21
0.22
0.92
0.59
Total
from
Investment
Operations
1.84
0.27
0.35
0.99
0.63
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
–
(0.01)
(0.02)
–
–
Net
realized
gain
–
(0.06)
(0.20)
(0.19)
(0.03)
Total
Distributions
to
Shareholders
–
(0.07)
(0.22)
(0.19)
(0.03)
NET
ASSET
VALUE,
End
of
Year
$
14.28
$
12.44
$
12.24
$
12.11
$
11.31
TOTAL
RETURN
14.79%
2.22%
2.98%
8.81%
5.89%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
425
$
315
$
454
$
486
$
635
Ratios
to
Average
Net
Assets:
Net
investment
income
(loss)
(0.23)%
0.48%
1.12%
0.57%
0.33%
Net
expenses
1.28%
1.25%
1.24%
1.24%
1.24%
Interest
expense
0.04%
0.01%
–%
–%
–%
Net
expenses
without
interest
expense
1.24%
1.24%
1.24%
1.24%
1.24%
Gross
expenses
(b)
8.12%
6.78%
5.56%
5.53%
4.62%
PORTFOLIO
TURNOVER
RATE
0%
22%
1%
21%
60%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
(b)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
15
MAI
Managed
Volatility
Fund
NOTES
TO
FINANCIAL
STATEMENTS
August
31,
2021
Note
1.
Organization
The
MAI
Managed
Volatility
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
currently
offers
two
classes
of
shares:
Institutional
Class
and
Investor
Class.
Institutional
Class
and
Investor
Class
commenced
operations
on
September
23,
2010,
and
December
2,
2010,
respectively.
The
Fund’s
investment
objective
is
income
and
long-term
capital
appreciation.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
(“FASB”)
Accounting
Standards
Codification
(“ASC”)
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Exchange-traded
options
for
which
the
last
quoted
sale
price
is
outside
the
closing
bid
and
ask
price
will
be
valued
at
the
mean
of
the
closing
bid
and
ask
price.
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
3,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
16
MAI
Managed
Volatility
Fund
NOTES
TO
FINANCIAL
STATEMENTS
August
31,
2021
valuation
could
result
in
a
different
Net
Asset
Value
(“NAV”)
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
August
31,
2021,
for
the
Fund’s
investments
is
included
in
the
Fund’s
Notes
to
Schedules
of
Investments
and
Call
and
Put
Options
Written.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
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.
Written
Options
–
When
a
fund
writes
an
option,
an
amount
equal
to
the
premium
received
by
the
fund
is
recorded
as
a
liability
and
is
subsequently
adjusted
to
the
current
value
of
the
option
written.
Premiums
received
from
writing
options
that
expire
unexercised
are
treated
by
the
fund
on
the
expiration
date
as
realized
gain
from
written
options.
The
difference
between
the
premium
and
the
amount
paid
on
effecting
a
closing
purchase
transaction,
including
brokerage
commissions,
is
also
treated
as
a
realized
gain,
or
if
the
premium
is
less
than
the
amount
paid
for
the
closing
purchase
transaction,
as
a
realized
loss.
If
a
call
option
is
exercised,
the
premium
is
added
to
the
proceeds
from
the
sale
of
the
underlying
security
in
determining
whether
the
fund
has
realized
a
gain
or
loss.
If
a
put
option
is
exercised,
the
premium
reduces
the
cost
basis
of
the
securities
purchased
by
the
fund.
The
fund,
as
writer
of
an
option,
bears
the
market
risk
of
an
unfavorable
change
in
the
price
of
the
security
underlying
the
written
option.
Written
options
are
non-income
producing
securities.
The
values
of
each
individual
written
option
outstanding
as
of
August
31,
2021,
are
disclosed
in
the
Fund’s
Schedule
of
Call
and
Put
Options
Written.
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
at
least
quarterly.
Distributions
to
shareholders
of
net
capital
gains,
if
any,
are
17
MAI
Managed
Volatility
Fund
NOTES
TO
FINANCIAL
STATEMENTS
August
31,
2021
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
Federal
Taxes
–
The
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income
and
capital
gains,
if
any,
the
Fund
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
The
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
The
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
August
31,
2021,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-recognition
or
disclosure.
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
The
Fund's
class-specific
expenses
are
charged
to
the
operations
of
that
class
of
shares.
Income
and
expenses
(other
than
expenses
attributable
to
a
specific
class)
and
realized
and
unrealized
gains
or
losses
on
investments
are
allocated
to
each
class
of
shares
based
on
the
class’
respective
net
assets
to
the
total
net
assets
of
the
Fund.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
the
Fund
enters
into
contracts
that
provide
general
indemnifications
by
the
Fund
to
the
counterparty
to
the
contract.
The
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
the
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
The
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
the
Fund’s
balance
sheet.
Note
3.
Fees
and
Expenses
Investment
Adviser
–
MAI
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
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
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.
The
Trust
has
adopted
a
Rule
12b-1
plan
under
which
the
Fund
pays
the
Distributor
a
fee
up
to
0.25%
of
the
average
daily
net
assets
of
the
Investor
Class
for
distribution
services
and/or
the
servicing
of
shareholder
accounts.
Because
the
Investor
Class
pays
distribution
fees
on
an
ongoing
basis,
over
time
these
fees
will
increase
the
cost
of
your
investment
and
may
cost
you
more
than
paying
other
types
of
sales
charges.
The
Distributor
may
pay
any
fee
received
under
the
Rule
12b-1
plan
to
the
Adviser
or
other
financial
intermediaries
that
provide
distribution
and
shareholder
services
with
respect
to
Investor
Class
shares.
In
addition
to
paying
fees
under
the
Rule
12b-1
plan,
the
Fund
may
pay
service
fees
to
financial
intermediaries
for
administration,
recordkeeping
and
other
shareholder
services
associated
with
shareholders
whose
shares
are
held
of
record
in
omnibus
accounts,
other
group
accounts
or
accounts
traded
through
registered
securities
clearing
agents.
If
the
Fund
pays
18
MAI
Managed
Volatility
Fund
NOTES
TO
FINANCIAL
STATEMENTS
August
31,
2021
shareholder
service
fees
on
an
ongoing
basis,
over
time
these
fees
will
increase
the
cost
of
your
investment.
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.
Note
4.
Expense
Reimbursements
and
Fees
Waived
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
acquired
fund
fees
and
expenses,
dividends
on
short
sales,
brokerage
costs,
and
extraordinary
expenses
)
to
0.99%
and
1.24%,
of
the
Institutional
Class
and
Investor
Class,
respectively
,
through
at
least
January
1,
2022.
The
contractual
waivers
may
be
changed
or
eliminated
at
any
time
with
consent
of
the
Board.
During
the
year
ended
August
31,
2021,
expenses
waived
were
$171,305.
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
of
a
class
(after
the
recoupment
has
been
taken
into
account)
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
August
31,
2021,
$548,559
is
subject
to
recapture
by
the
adviser
.
Note
5.
Security
Transactions
Investment
transactions
for
the
year
ended
August
31,
2021,
excluding
U.S.
Government
and
Agency
securities
and
short-term
investments,
were
as
follows:
Note
6.
Summary
of
Derivative
Activity
The
volume
of
open
derivative
positions
may
vary
on
a
daily
basis
as
the
Fund
transacts
derivative
contracts
in
order
to
achieve
the
exposure
desired
by
the
Adviser.
Premiums
received
on
purchased
Non-U.S.
Government
Obligations
Purchases
Sales
$
468,712
$
1,967,034
19
MAI
Managed
Volatility
Fund
NOTES
TO
FINANCIAL
STATEMENTS
August
31,
2021
and
written
options
for
the
year
ended
August
31,
2021,
for
any
derivative
type
that
was
held
during
the
year
is
as
follows:
The
Fund’s
use
of
derivatives
during
the
year
ended
August
31,
2021
,
was
limited
to
purchased
and
written
options.
Following
is
a
summary
of
the
effect
of
derivatives
on
the
Statement
of
Assets
and
Liabilities
as
of
August
31,
2021
:
Realized
and
unrealized
gains
and
losses
on
derivatives
contracts
during
the
year
ended
August
31,
2021
by
the
Fund
are
recorded
in
the
following
locations
on
the
Statement
of
Operations:
Purchased
Options
$
558,839
Written
Options
(31,988,093)
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
$
170,710
Liability
derivatives:
Call
options
written,
at
value
$
(3,297,858)
Put
options
written,
at
value
(207,875)
Total
liability
derivatives
$
(3,505,733)
Location:
Equity
Risk
Net
realized
gain
(loss)
on:
Investments
Purchased
options
–
Equity
Risk
$
(38,136)
Written
options
–
Equity
Risk
272,836
Total
net
realized
gain
$
234,700
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
Purchased
options
–
Equity
Risk
$
(132,374)
Written
options
–
Equity
Risk
953,414
Total
net
change
in
unrealized
appreciation
(depreciation)
$
821,040
20
MAI
Managed
Volatility
Fund
NOTES
TO
FINANCIAL
STATEMENTS
August
31,
2021
Asset
(Liability)
amounts
shown
in
the
table
below
represent
amounts
for
derivative
related
investments
at
August
31,
2021
.
These
amounts
may
be
collateralized
by
cash
or
financial
instruments.
Note
7.
Federal
Income
Tax
As
of
August
31,
2021,
the
cost
of
investments
for
federal
income
tax
purposes
is
$129,894,130
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
August
31,
2021,
distributable
earnings
(accumulated
loss)
on
a
tax
basis
were
as
follows:
The
difference
between
components
of
distributable
earnings
on
a
tax
basis
and
the
amounts
reflected
in
the
Statement
of
Assets
and
Liabilities
are
primarily
due
to
temporary
book/tax
differences
related
to
wash
sales,
straddles,
index
options
and
equity
return
of
capital.
On
the
Statements
of
Assets
and
Liabilities,
as
a
result
of
permanent
book
to
tax
differences,
certain
amounts
have
been
reclassified
for
the
year
ended
August
31,
2021.
The
following
reclassifications
were
the
result
of
dividend
reclassifications
and
have
no
impact
on
the
net
assets
of
the
Fund.
Gross
Asset
(Liability)
as
Presented
in
the
Statement
of
Assets
and
Liabilities
Financial
Instruments
(Received)
Pledged*
Cash
Collateral
(Received)
Pledged*
Net
Amount
Assets:
Over-the-counter
derivatives**
$
170,710
$
–
$
–
$
170,710
Liabilities:
Over-the-counter
derivatives**
(3,505,733)
3,505,733
–
–
*
The
actual
financial
instruments
and
cash
collateral
(received)
pledged
may
be
in
excess
of
the
amounts
shown
in
the
table.
The
table
only
reflects
collateral
amounts
up
to
the
amount
of
the
financial
instrument
disclosed
on
the
Statement
of
Assets
and
Liabilities
**
Over-the-counter
derivatives
may
consist
of
purchased
and
written
options
contracts.
The
amounts
disclosed
above
represent
the
exposure
to
one
or
more
counterparties.
For
further
detail
on
individual
derivative
contracts
and
the
corresponding
unrealized
appreciation
(depreciation),
see
the
Schedule
of
Call
and
Put
Options
Written.
Gross
Unrealized
Appreciation
$
47,095,692
Gross
Unrealized
Depreciation
(3,289,291)
Net
Unrealized
Appreciation
$
43,806,401
2021
2020
Ordinary
Income
$
68,916
$
1,766,787
Long-Term
Capital
Gain
–
429,594
$
68,916
$
2,196,381
Capital
and
Other
Losses
$
(7,856,393)
Unrealized
Appreciation
43,806,401
Total
$
35,950,008
Paid-in-Capital
$
(3)
Distributable
Earnings
3
21
MAI
Managed
Volatility
Fund
NOTES
TO
FINANCIAL
STATEMENTS
August
31,
2021
For
tax
purposes,
the
current
year
late
year
ordinary
loss
was
$
30,179
(realized
during
the
period
January
1,
2021
through
August
31,
2021).
This
loss
will
be
recognized
for
tax
purposes
on
the
first
business
day
of
the
Fund’s
current
fiscal
year,
September
1,
2021.
As
of
August
31,
2021,
the
Fund
had
$2,955,206
in
short-term
capital
loss
carryforwards
and
$4,871,008
in
long-term
capital
loss
carryforwards
to
reduce
the
Fund’s
taxable
income
arising
from
future
net
realized
gains
on
investments.
The
capital
loss
carryforwards
have
no
expiration
date.
Note
8.
Underlying
Investments
in
Other
Pooled
Investment
Vehicles
The
performance
of
the
Fund
may
be
directly
affected
by
the
performance
of
the
First
American
Government
Obligations
Fund,
Class
X
Shares.
As
of
August
31,
2021,
the
percentage
of
net
assets
invested
in
the
First
American
Government
Obligations
Fund,
Class
X
Shares
was
39.6%.
The
latest
financial
statements
for
the
First
American
Government
Obligations
Fund,
Class
X
Shares
can
be
found
at
www.sec.gov.
Note
9.
Subsequent
Events
In
August
2021,
the
Adviser
advised
the
Board
of
Trustees
(“Board”)
of
the
Trust
that
the
Adviser
had
entered
into
a
definitive
agreement
with
Galway
Insurance
Holdings,
LP
(“Galway”)
whereby
Galway
would
acquire
a
controlling
interest
in
the
Adviser
(the
“Transaction”).
The
Transaction
is
expected
to
cause
the
Adviser
to
experience
a
change
of
control,
resulting
in
the
automatic
termination
of
the
original
investment
advisory
agreement
between
the
Trust
and
the
Adviser.
In
anticipation
of
the
change
in
control
of
the
Adviser,
and
to
provide
for
continuity
of
management,
on
September
9,
2021,
the
Board
approved
the
reappointment
of
the
Adviser
as
the
Fund’s
investment
adviser
pursuant
to
an
Interim
Investment
Advisory
Agreement
between
the
Trust,
on
behalf
of
the
Fund,
and
the
Adviser
(the
“Interim
Agreement”),
effective
upon
the
close
of
the
Transaction.
As
required
by
the
federal
securities
laws,
the
Interim
Agreement
includes
an
escrow
arrangement
that
provides
for
a
mechanism
to
hold
the
advisory
fees
earned
by
the
Adviser
in
an
interest-bearing
escrow
account,
pending
shareholder
approval
of
a
new
investment
advisory
agreement
between
the
Trust,
on
behalf
of
the
Fund,
and
the
Adviser.
If
the
shareholders
approve
a
new
investment
advisory
agreement,
the
amount
in
the
escrow
account
(including
interest
earned)
will
be
paid
to
the
Adviser.
The
Interim
Agreement
will
remain
in
effect
until
the
earlier
of
(i)
150
days
from
September
30,
2021
and
(ii)
the
date
that
the
Fund’s
shareholders
approve
a
new
investment
advisory
agreement
for
the
Fund.
On
September
9,
2021,
the
Board
also
approved
a
new
investment
advisory
agreement
between
the
Trust,
on
behalf
of
the
Fund,
and
the
Adviser
(the
“New
Agreement”)
and
determined
to
submit
the
New
Agreement
to
the
Fund’s
shareholders
for
their
approval.
The
New
Agreement
will
replace
the
Interim
Agreement
if
the
shareholders
approve
the
New
Agreement
at
the
special
meeting
of
shareholders
scheduled
to
take
place
on
or
about
December
3,
2021.
Additional
information
regarding
the
New
Agreement
is
expected
to
be
provided
in
connection
with
the
solicitation
of
Fund
shareholder
approval
of
the
New
Agreement,
including
a
proxy
statement
to
be
sent
to
shareholders
of
the
Fund,
as
of
September
30,
2021.
22
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
MAI
Managed
Volatility
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
MAI
Managed
Volatility
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedules
of
investments
and
call
and
put
options
written,
as
of
August
31,
2021,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
August
31,
2021,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
August
31,
2021
by
correspondence
with
the
custodian
and
broker.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
October
25
,
2021
23
MAI
Managed
Volatility
Fund
ADDITIONAL
INFORMATION
(Unaudited)
August
31,
2021
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
(877)
414-7884
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
(877)
414-7884
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund
,
you
incur
ongoing
costs,
including
management
fees,
distribution
(12b-
1)
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
March
1,
2021
through
August
31,
2021.
Actual
Expenses
–
The
first
line
under
each
share
class
of
the
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
in
this
line,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
first
line
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
the
period.
Hypothetical
Example
for
Comparison
Purposes
–
The
second
line
under
each
share
class
of
the
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
the
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only.
Therefore,
the
second
line
of
the
table
is
useful
in
comparing
ongoing
costs
only
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
24
MAI
Managed
Volatility
Fund
ADDITIONAL
INFORMATION
(Unaudited)
August
31,
2021
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
7.84%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(877)
414-7884.
Beginning
Account
Value
March
1,
2021
Ending
Account
Value
August
31,
2021
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Institutional
Shares
Actual
$
1,000.00
$
1,077.16
$
5.18
0.99%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,020.21
$
5.04
0.99%
Investor
Shares
Actual
$
1,000.00
$
1,076.11
$
6.49
1.24%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,018.95
$
6.31
1.24%
*
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
365
to
reflect
the
half-year
period.
25
MAI
Managed
Volatility
Fund
ADDITIONAL
INFORMATION
(Unaudited)
August
31,
2021
(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
In-
vestors
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
In-
vestors
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
In-
vestors
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
In-
vestors
Funds
26
MAI
Managed
Volatility
Fund
ADDITIONAL
INFORMATION
(Unaudited)
August
31,
2021
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019.
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Todd
Proulx
Born:
1978
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
MAI
Managed
Volatility
Fund
Investor
Class
(DIVPX)
Institutional
Class
(MAIPX)
INVESTMENT
ADVISER
MAI
Capital
Management,
LLC
1360
E.
Ninth
Street,
Suite
1100
Cleveland,
OH
44114
TRANSFER
AGENT
Apex
Fund
Services
P.O.
Box
588
Portland,
ME
04112
www.apexgroup.com
DISTRIBUTOR
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
ME
04101
www.foreside.com
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
risks,
objectives,
fees
and
expenses,
experience
of
its
management
and
other
information.
244-ANR-0821
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 no member of the Audit Committee is an "audit committee financial expert" as that term is defined under applicable regulatory guidelines.
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 $15,000 in 2020 and $15,000 in 2021.
(b) Audit-Related Fees – The aggregate fees billed in the Reporting Periods for assurance and related services rendered by the principal accountant that were reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item 4 were $0 in 2020 and $0 in 2021.
(c) Tax Fees - The aggregate fees billed in the Reporting Periods for professional services rendered by the principal accountant to the Registrant for tax compliance, tax advice and tax planning were $3,000 in 2020 and $3,000 in 2021. These services consisted of review or preparation of U.S. federal, state, local and excise tax returns.
(d) All Other Fees - The aggregate fees billed in the Reporting Periods for products and services provided by the principal accountant to the Registrant, other than the services reported in paragraphs (a) through (c) of this Item, were $0 in 2020 and $0 in 2021.
(e) (1) The Audit Committee reviews and approves in advance all audit and “permissible non-audit services” (as that term is defined by the rules and regulations of the Securities and Exchange Commission) to be rendered to a series of the Registrant (each, a “Series”). In addition, the Audit Committee reviews and approves in advance all “permissible non-audit services” to be provided to an investment adviser (not including any sub-adviser) of a Series, or an affiliate of such investment adviser, that is controlling, controlled by or under common control with the investment adviser and provides on-going services to the Registrant (“Affiliate”), by the Series’ principal accountant if the engagement relates directly to the operations and financial reporting of the Series. The Audit Committee considers whether fees paid by a Series’ investment adviser or an Affiliate to the Series’ principal accountant for audit and permissible non-audit services are consistent with the principal accountant’s independence.
(e) (2) No services included in (b) - (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable
(g) The aggregate non-audit fees billed by the principal accountant for services rendered to the Registrant for the Reporting Periods were $0 in 2020 and $0 in 2021. There were no fees billed in either of the Reporting Periods for non-audit services rendered by the principal accountant to the Registrant’s investment adviser or any Affiliate.
(h) During the Reporting Period, the Registrant's principal accountant provided no non-audit services to the investment advisers or any entity controlling, controlled by or under common control with the investment advisers to the series of the Registrant to which this report relates.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) Included as part of report to shareholders under Item 1.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
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: | October 28, 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: | October 28, 2021 |
By: | /s/ Karen Shaw | |
Karen Shaw, Principal Financial Officer | ||
Date: | October 28, 2021 |