As filed with the Securities and Exchange Commission on May 31, 2022
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-03023
FORUM FUNDS
Three Canal Plaza, Suite 600
Portland, Maine 04101
Jessica Chase, Principal Executive Officer
Three Canal Plaza, Suite 600
Portland, Maine 04101
207-347-2000
Date of fiscal year end: March 31
Date of reporting period: April 1, 2021 – March 31, 2022
ITEM 1. REPORT TO STOCKHOLDERS.
Annual
Report
March
31,
2022
The
views
in
this
report
were
those
of
Absolute
Investment
Advisers
LLC
(“AIA”
and
“Absolute”),
the
investment
adviser
to
the
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund
(each
a
“Fund”
and
collectively
the
“Funds”)
as
of
March
31,
2022,
and
may
not
reflect
their
views
on
the
date
this
report
is
first
published
or
any
time
thereafter.
These
views
are
intended
to
assist
shareholders
in
understanding
their
investment
in
the
Funds
and
do
not
constitute
investment
advice.
None
of
the
information
presented
should
be
construed
as
an
offer
to
sell
or
recommendation
of
any
security
mentioned
herein.
The
Funds
utilize
a
multi-manager
strategy.
For
a
complete
description
of
each
Fund’s
principal
investment
risks
please
refer
to
its
respective
prospectus.
Although
each
Fund’s
strategy
is
different,
each
Fund
is
subject
to
the
following
risks:
Small-
and
medium-sized
company
risk;
foreign
or
emerging
markets
securities
risk
which
involves
special
risks,
including
the
volatility
of
currency
exchange
rates
and,
in
some
cases,
limited
geographic
focus,
political
and
economic
instability,
and
relatively
illiquid
markets;
interest
rate
risk;
and
high
yield,
lower-rated
(junk)
bonds
risk.
Other
principal
risks
include
investing
in
initial
public
offerings;
selling
securities
short
with
the
risk
of
magnified
capital
losses;
investing
in
derivatives
which
can
be
volatile
and
involve
various
types
and
degrees
of
risks;
and
investing
in
options
and
futures
which
are
subject
to
special
risks
and
may
not
fully
protect
a
Fund
against
declines
in
the
value
of
its
stocks.
In
addition,
an
option
writing
strategy
limits
the
upside
profit
potential
normally
associated
with
stocks.
Futures
trading
is
very
speculative,
largely
due
to
the
traditional
volatility
of
futures
prices.
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month-end,
call
the
Fund
at
888-99-ABSOLUTE.
The
S&P
500®
Index
(“S&P
500”)
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
Bloomberg
U.S.
Aggregate
Bond
Index
is
a
broad
based
measurement
of
the
U.S.
dollar-denominated,
investment-grade,
fixed-rate,
SEC
registered
taxable
bond
market.
The
HFRX
Global
Hedge
Fund
Index
is
a
broad-based
measurement
of
the
performance
of
the
hedge
fund
universe;
it
is
comprised
of
all
eligible
hedge
fund
strategies;
including
but
not
limited
to
convertible
arbitrage,
distressed
securities,
equity
hedge,
equity
market
neutral,
event
driven,
macro,
merger
arbitrage,
and
relative
value
arbitrage.
The
strategies
are
asset-weighted
based
on
the
distribution
of
assets
in
the
hedge
fund
industry.
The
MSCI
World
Index
measures
the
performance
of
a
diverse
range
of
23
developed
countries’
stock
markets
including
the
United
States
and
Canada,
and
countries
in
Europe,
the
Middle
East,
Asia
and
the
Pacific.
The
HFRX
Equity
Hedge
Index
measures
the
performance
of
strategies
that
maintain
positions
both
long
and
short
in
primarily
equity
and
equity
derivative
securities.
The
HFRX
Fixed
Income
Convertible
Arbitrage
Index
measures
the
performance
of
hedge
fund
strategies
that
are
predicated
on
realization
of
a
spread
between
related
instruments
in
which
one
or
multiple
components
of
the
spread
is
a
convertible
fixed
income
instrument.
The
iBoxx
High
Yield
Index
consists
of
liquid
USD
high
yield
bonds,
selected
to
provide
a
balanced
representation
of
the
broad
USD
high
yield
corporate
bond
universe.
The
total
return
of
the
indices
include
the
reinvestment
of
dividends
and
income.
The
total
return
of
each
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
indices
do
not
include
expenses.
The
Funds
are
professionally
managed,
while
the
indices
are
unmanaged
and
are
not
available
for
investment.
The
HFR
Indices
are
equally
weighted
performance
indexes,
utilized
by
numerous
hedge
fund
managers
as
a
benchmark
for
their
own
hedge
funds.
One
cannot
invest
directly
in
an
index.
Alpha
takes
the
volatility
(price
risk)
of
a
fund
and
compares
its
risk-adjusted
performance
to
a
benchmark
index.
The
excess
return
of
the
fund
relative
to
the
return
of
the
benchmark
index
is
a
fund’s
alpha.
A
basis
point
is
a
standard
measure
for
interest
rates
and
other
percentages
in
finance
and
represents
0.01%.
Absolute
Strategies
Fund,
Absolute
Funds,
and
Absolute
Investment
Advisers
are
registered
service
marks.
Other
marks
referred
to
herein
are
the
trademarks,
service
marks
or
registered
trademarks
of
their
respective
owners.
Fund
holdings
and
sector
allocations
are
subject
to
change
and
should
not
be
considered
a
recommendation
to
buy
or
sell
any
security.
Please
see
the
Schedule
of
Investments
in
this
report
for
a
complete
list
of
fund
holdings.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
1
Absolute
Funds
Dear
Shareholder,
We
are
pleased
to
present
the
Annual
Report
for
the
Absolute
Strategies
Fund,
Absolute
Convertible
Arbitrage
Fund
and
the
Absolute
Capital
Opportunities
Fund
(the
“Funds”
or
“Absolute
Funds”)
for
the
year
ended
March
31,
2022
(the
“period”).
The
Adviser
has
maintained
a
consistent
philosophy
and
discipline
since
its
inception
in
2005.
Our
Funds
have
focused
on
strategies
to
create
various
forms
of
alpha
in
both
equity
and
credit
markets.
Focusing
on
alpha,
whether
it
be
long
only,
neutral
or
short
biased,
can
assist
investors
and
asset
allocators
achieve
diversification.
Each
of
the
Funds
have
been
positioned
very
defensively
and,
as
such,
performed
very
well
during
the
current
volatile
market
environment.
While
not
all
market
cycles
provide
a
beneficial
backdrop
for
achieving
“defensive”
performance,
our
patient,
disciplined
approach
thrives
during
difficult
environments.
Absolute
Convertible
Arbitrage
Fund
The
Absolute
Convertible
Arbitrage
Fund
returned
1.13%
during
the
period.
By
comparison,
the
HFRX
Fixed
Income
Convertible
Arbitrage
Index
returned
-2.82%.
The
Fund
has
performed
quite
well
as
markets
have
dropped
in
the
year-
to-date
period.
From
December
31,
2021
through
April
30,
2022,
the
Fund
is
down
-1.25%
compared
to
-6.76%
for
the
HFRX
Fixed
Income
Convertible
Arbitrage
Index.
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month-end,
call
the
Fund
at
888-99-ABSOLUTE.
Performance
benefited
from
the
Fund’s
risk
management
approach,
particularly
during
Q1
2022,
as
the
Fund
has
been
positioned
somewhat
defensively
relative
to
many
other
fixed
income
and
convertible
securities
strategies.
Gains
were
well
diversified.
Perficient,
Vocera
Communications
and
Vertex
Energy
were
among
winners.
Smile
Direct
Club,
BridgeBio
Pharma
and
Lucid
Group
were
detractors.
The
overall
fixed
income
market
continues
to
be
hampered
by
inflation
and
interest
rates.
Inflation
expectations,
rising
treasury
yields
and
the
Federal
Reserve
rate
hikes
will
very
likely
dominate
the
investment
backdrop
in
2022.
The
market
expects
the
Fed
to
increase
fed
funds
at
least
75-100
basis
points
in
2022,
with
further
rate
increases
in
2023
and
2024.
Higher
Fed
Funds
rates
are
good
for
the
convertible
arbitrage
strategy
as
rebate
rates
for
short
stock
positions
should
become
positive
again
after
2
years
in
negative
territory.
Additionally,
we
expect
that
higher
rates
will
force
companies
to
issue
convertible
securities
with
higher
coupon
rates
again,
which
combined
with
positive
rebate
rates,
may
earn
a
profit
on
the
difference
between
the
return
and
the
interest
owed
for
those
investments
for
the
strategy.
After
a
40-year
bull
market
for
bonds
and
a
huge
run
for
equity
valuations
supported
by
very
low
yields/discount
rates,
we
could
be
at
a
major
inflection
point
for
long
only
investments
as
they
could
face
years
of
stiff
headwinds
from
the
Federal
Reserve.
Alternative,
hedged,
actively
managed,
niche,
idiosyncratic
strategies
could
quickly
become
the
best
way
to
preserve
capital
and
make
modest
positive
returns
without
“fighting
the
Fed.”
Convertible
securities
are
attractive,
risk
controlled,
securities
given
their
relatively
short
duration
and
hybrid
nature.
The
convertible
arbitrage
strategy
could
prove
to
be
an
effective
ballast
for
a
portfolio
during
difficult
times
given
its
tightly
hedged
nature
and
its
non-directional
balanced
approach.
Fortunately,
the
opportunity
set
for
convertibles
is
healthy
as
issuance
remains
strong
and
default
rates
remain
low.
And
as
mentioned
previously,
the
difference
between
the
return
and
the
interest
owed
for
those
investments
will
likely
become
a
larger
component
of
the
strategy’s
return
as
coupons
on
new
convertible
bonds
go
higher
and
stock
loan
rebates
become
positive
again.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
2
Absolute
Funds
Absolute
Capital
Opportunities
Fund
The
Absolute
Capital
Opportunities
Fund
returned
-5.08%
during
the
period.
By
comparison,
the
HFRX
Equity
Hedge
Index
returned
8.92%.
The
Fund
has
performed
quite
well
as
markets
have
dropped
in
the
year-to-date
period.
From
December
31,
2021
through
April
30,
2022,
the
Fund
is
down
-0.89%
compared
to
-2.03%
for
the
HFRX
Equity
Hedge
Index.
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
the
original
cost.
To
obtain
performance
information
current
to
the
most
recent
month-end,
call
the
Fund
at
888-99-ABSOLUTE.
Performance
benefited
from
a
mix
of
the
long
portfolio,
which
is
made
up
of
a
number
of
value-based
single
stocks,
and
hedges,
which
are
option-based
with
volatility
as
a
factor.
Apple,
Blackstone
and
Quanta
Services
were
positive
contributors
among
single
stocks.
Meta
Platforms,
General
Motors
and
Walt
Disney
were
detractors.
Index
Options
were
both
gainers
and
detractors.
Throughout
2021,
equity
markets
rose
at
a
more
or
less
uninterrupted
pace.
By
year-end,
the
S&P
500
had
returned
nearly
29%
and
the
largest
drawdown
during
the
year
was
a
mere
5%.
In
stock
market
environments
such
as
these,
expected
volatility
usually
wanes
as
investors
become
more
complacent,
thus
the
cost
of
hedging
using
our
strategies
also
usually
wanes.
When
this
happens,
we
can
purchase
downside
and
upside
hedges
(both
are
important
for
an
absolute
return
strategy)
in
larger
amounts
with
smaller
gaps
and
shorter
timeframes.
In
essence,
we
believe
that
the
payoff
profiles
we
are
able
to
construct
with
our
hedging
are
significantly
better
during
times
like
these.
Complacent,
steady,
upward
stock
markets
are
usually
the
friend
of
the
option
buyer,
whether
hedging
against
euphoria
(when
net
short)
or
Armageddon
(when
net
long).
However,
this
“normal”
relationship
between
option
pricing
and
the
prevailing
equity
market
environment
failed
to
hold
in
2021.
Despite
investors
taking
a
seemingly
optimistic
view
of
the
future,
pushing
the
prices
of
equities
ever
higher,
implied
volatility
remained
stubbornly
high,
making
our
hedging
program
abnormally
expensive.
Even
so,
we
decided
to
pay
the
price
for
these
hedges
because
we
thought
it
was
consistent
with
the
Fund’s
long-
term
objectives.
We
believed
that
some
caution
was
warranted
as
inflation
rose
and
the
Fed
pivoted
to
a
less
accommodative
stance.
We
also
believed
that
“normal”
market
volatility
would
eventually
generate
a
payoff
on
our
hedging
that
was
worth
the
cost.
That
moment
never
came
in
2021.
Thus,
the
Fund
experienced
the
worst-case
scenario
–
our
hedging
(especially
downside
protection)
was
both
expensive
to
buy
and
proved
to
be
completely
unnecessary.
After
a
20+
year
history
of
managing
the
strategy,
we
realize
that
there
will
be
periods
of
time
where
our
longs
are
out
of
favor
or
our
hedging
results
are
less
than
satisfactory.
Nevertheless,
we
remain
confident
that
the
Fund
is
well-
positioned and
serves
a
beneficial
role
in
an
investor’s
overall
investment
portfolio
over
full
market
cycles.
Absolute
Strategies
Fund
The
Strategies
Fund
return
-7.96%
during
the
period.
By
comparison,
the
HFRX
Global
Hedge
Fund
Index
returned
0.95%.
The
Fund
has
performed
quite
well
as
markets
have
dropped
in
the
year-to-date
period.
From
December
31,
2021
through
April
30,
2022,
the
Fund
is
up
7.16%
compared
to
-12.92%
for
the
S&P
500
Index
and
-2.24%
for
the
HFRX
Global
Hedge
Fund
Index.
During
the
period,
the
Fund
was
positioned
with
an
overall
net
short
position
which
detracted
from
performance.
However,
this
defensive
positioning
was
due
to
a
dramatic
overvaluation
of
equity
markets
following
Covid-19
stimulus.
This
stimulus
and
money
printing
drove
markets
to
extremely
high
levels,
but
now
have
succumbed
to
a
steady
rise
in
inflation
and
interest
rates.
We
believe
markets
have
just
begun
a
lengthy
bear
market
cycle
that
may
last
into
2023,
or
beyond.
ABSOLUTE
FUNDS
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
3
Absolute
Funds
For
the
period,
performance
benefited
directly
from
a
long
portfolio
of
concentrated
equity
positions.
Berkshire
Hathaway,
Pfizer,
and
Loews
Corp
were
positive
contributors.
Pan
American
Silver,
Medronic,
and
Equity
Commonwealth
were
detractors.
Index
Futures
and
Options
were
both
gainers
and
detractors.
The
Adviser
believes
markets
may
be
reaching
the
end
of
this
overall
market
cycle,
and
this
could
be
a
very
significant
peak
resulting
in
an
extended
bear
market.
We
anticipate
equity
markets
may
lose
signficantly
during
this
market
cycle.
It
is
also
easy
to
believe
the
market
has
potential
for
a
continued
bull
market,
but
this
time
the
Federal
Reserve
is
not
on
the
side
of
buyers.
Many
investors
tried
their
luck
with
popular
growth
stocks
but
many
of
these
are
already
down
60-80%
since
their
peaks
in
2021.
We
intend
to
maintain
an
aggressive
short
position
during
this
cycle
while
seeking
to
generate
positive
returns,
and
much
improved
returns
compared
to
recent
years.
It
has
been
a
long
time
since
price
and
value
mattered.
We
are
well
beyond
the
debt
and
valuation
levels
of
1929
and
1999.
We
seem
to
have
reached
the
end
of
a
larger
financial
cycle
that
has
accumulated
over
the
last
20+
years
of
money
printing.
We
believe
that
central
banks
are
completely
cornered
and,
from
a
technical
standpoint,
the
end
of
a
market
Supercycle
that
dates
back
many
decades
may
be
about
to
reverse.
Sincerely,
Absolute
Investment
Advisers
LLC
ABSOLUTE
STRATEGIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2022
4
Absolute
Funds
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$25,000
investment
in
Institutional
Shares,
including
reinvested
dividends
and
distributions,
in
Absolute
Strategies
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmarks,
S&P
500
Index
(“S&P
500”),
Bloomberg
U.S.
Aggregate
Bond
Index
("U.S.
Aggregate
Index”),
the
HFRX
Global
Hedge
Fund
Index
(“HFRX”)
and
the
MSCI
World
Index
(“MSCI
World”),
over
the
past
ten
fiscal
years.
The
S&P
500
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
U.S.
Aggregate
Index
is
a
broad
based
measurement
of
the
U.S.
dollar-denominated,
investment-grade,
fixed-rate,
SEC
registered
taxable
bond
market.
The
HFRX
is
a
broad-based
measurement
of
the
performance
of
the
hedge
fund
universe;
it
is
comprised
of
all
eligible
hedge
fund
strategies;
including
but
not
limited
to
convertible
arbitrage,
distressed
securities,
equity
hedge,
equity
market
neutral,
event
driven,
macro,
merger
arbitrage,
and
relative
value
arbitrage.
The
strategies
are
asset-weighted
based
on
the
distribution
of
assets
in
the
hedge
fund
industry.
The
MSCI
World
measures
the
performance
of
a
diverse
range
of
23
developed
countries’
stock
markets
including
the
United
States
and
Canada,
and
countries
in
Europe,
the
Middle
East,
Asia
and
the
Pacific.
The
total
return
of
the
indices
include
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
indices
do
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
indices
are
unmanaged
and
are
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$25,000
Investment
Absolute
Strategies
Fund
vs.
S&P
500®
Index,
Bloomberg
U.S.
Aggregate
Bond
Index,
HFRX
Global
Hedge
Fund
Index
and
MSCI
World
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
2.75%
and
the
total
annual
fund
operating
expense
ratio
after
fee
waivers
and/or
reimbursement
(net)
is
2.14%.
However,
the
Fund’s
adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Fund
as
a
result
of
the
Fund's
investment
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
to
1.99%
for
Institutional
Shares,
through
August
1,
2023
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
Adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
(other
than
advisory
fees
waived
by
the
Adviser
related
to
the
Fund's
investment
in
other
pooled
vehicles
sponsored
by
the
Adviser)
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
Average
Annual
Total
Returns
Periods
Ended
March
31,
2022
One
Year
Five
Year
Ten
Year
Absolute
Strategies
Fund
-7.96%
-3.69%
-2.03%
S&P
500®
Index
15.65%
15.99%
14.64%
Bloomberg
U.S.
Aggregate
Bond
Index
-4.15%
2.14%
2.24%
HFRX
Global
Hedge
Fund
Index
0.95%
2.90%
2.12%
MSCI
World
Index
10.12%
12.42%
10.88%
ABSOLUTE
STRATEGIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2022
5
Absolute
Funds
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
or
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
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
(888)
992-2765.
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2022
6
Absolute
Funds
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$25,000
investment,
including
reinvested
dividends
and
distributions,
in
the
Absolute
Capital
Opportunities
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmarks,
the
HFRX
Equity
Hedge
Index
(“HFRX
Equity”)
and
the
S&P
500
Index
(“S&P
500”),
since
inception.
HFRX
Equity
measures
the
performance
of
strategies
that
maintain
positions
both
long
and
short
in
primarily
equity
and
equity
derivative
securities.
The
S&P
500
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
total
return
of
the
indices
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
indices
do
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
indices
are
unmanaged
and
are
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$25,000
Investment
Absolute
Capital
Opportunities
Fund
vs.
HFRX
Equity
Hedge
Index
and
S&P
500
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.89%
and
the
total
annual
fund
operating
expense
ratio
after
fee
waivers
and/or
reimbursement
(net)
is
1.62%.
However,
the
Fund’s
adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses)
to
1.49%,
through
August
1,
2022
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
Adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
Adviser
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement,
and
does
not
cause
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
or
(ii)
the
expense
cap
in
place
at
the
time
the
fees/
expenses
were
waived/reimbursed.
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
(888)
992-2765.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2022
One
Year
Five
Year
Since
Inception
12/30/15
Absolute
Capital
Opportunities
Fund
-5.08%
3.02%
3.94%
HFRX
Equity
Hedge
Index
8.92%
4.66%
4.14%
S&P
500®
Index
15.65%
15.99%
15.56%
Absolute
Funds
7
Absolute
Funds
THIS
PAGE
INTENTIONALLY
LEFT
BLANK
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2022
8
Absolute
Funds
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$25,000
investment,
including
reinvested
dividends
and
distributions,
in
Institutional
Shares
of
Absolute
Convertible
Arbitrage
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmarks,
HFRX
Fixed
Income
Convertible
Arbitrage
Index
("HFRX
Fixed
Income"),
Bloomberg
U.S.
Aggregate
Bond
Index
("U.S.
Aggregate
Index"),
iBoxx
High
Yield
Index
("iBoxx
Index")
and
the
S&P
500
Index
("S&P
500"),
over
the
past
ten
fiscal
years.
The
HFRX
Fixed
Income
measures
the
performance
of
hedge
fund
strategies
that
are
predicated
on
realization
of
a
spread
between
related
instruments
in
which
one
or
multiple
components
of
the
spread
is
a
convertible
fixed
income
instrument.
The
iBoxx
Index
consists
of
liquid
USD
high
yield
bonds,
selected
to
provide
a
balanced
representation
of
the
broad
USD
high
yield
corporate
bond
universe.
The
S&P
500
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
U.S.
Aggregate
Index
is
a
broad
based
measurement
of
the
U.S.
dollar-denominated,
investment-grade,
fixed-rate,
SEC
registered
taxable
bond
market.
The
total
return
of
the
indices
include
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
indices
do
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
indices
are
unmanaged
and
are
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$25,000
Investment
Absolute
Convertible
Arbitrage
Fund
-
Institutional
Shares
vs.
HFRX
Fixed
Income
Convertible
Arbitrage
Index,
Bloomberg
U.S.
Aggregate
Bond
Index,
iBoxx
High
Yield
Index
and
S&P
500
Index
*Absolute
Convertible
Arbitrage
Fund
–
Investor
Shares
commenced
operations
on
April
1,
2021.
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.90%
and
2.15%
for
Institutional
Shares
and
Investor
Shares,
respectively,
and
the
total
annual
fund
operating
expense
ratio
after
fee
waivers
and/or
reimbursement
(net)
is
1.59%
and
1.84%
for
Institutional
Shares
and
Invetor
Shares,
respectively.
However,
the
Fund’s
Adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
to
1.20%
and
1.45%
of
the
Institutional
Shares
and
Investor
Shares,
respectively,
through
August
1,
2022
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
Adviser
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
Adviser
pursuant
to
the
Expense
Cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement,
and
does
not
cause
Average
Annual
Total
Returns
Periods
Ended
March
31,
2022
One
Year
Five
Year
Ten
Year
Absolute
Convertible
Arbitrage
Fund
-
Institutional
Shares
1.13%
4.97%
4.40%
Absolute
Convertible
Arbitrage
Fund
-
Investor
Shares*
0.86%
N/A
N/A
HFRX
Fixed
Income
Convertible
Arbitrage
Index
-2.82%
4.64%
3.45%
Bloomberg
U.S.
Aggregate
Bond
Index
-4.15%
2.14%
2.24%
iBoxx
High
Yield
Index
-0.77%
4.18%
4.97%
S&P
500®
Index
15.65%
15.99%
14.64%
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2022
9
Absolute
Funds
the
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
or
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
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
(888)
992-2765.
On
August
14,
2017,
a
hedge
fund
managed
by
Mohican
Financial
Management
LLC
reorganized
into
the
Fund.
The
Fund’s
performance
for
periods
prior
to
the
commencement
of
operations
is
that
of
the
hedge
fund
and
is
based
on
calculations
that
are
different
from
the
standardized
method
of
calculations
adopted
by
the
SEC.
The
performance
of
the
hedge
fund
was
calculated
net
of
the
hedge
fund’s
fees
and
expenses.
The
performance
of
the
hedge
fund
is
not
the
performance
of
the
Fund,
has
not
been
restated
to
reflect
the
fees,
estimated
expenses
and
fee
waivers
and/or
expense
limitations
of
the
Fund,
and
is
not
necessarily
indicative
of
the
Fund’s
future
performance.
If
the
performance
of
the
hedge
fund
had
been
restated
to
reflect
the
applicable
fees
and
expenses
of
the
Fund,
the
performance
may
have
been
lower.
The
hedge
fund
was
not
registered
under
the
Investment
Company
Act
of
1940
(“1940
Act”)
and
was
not
subject
to
certain
investment
limitations,
diversification
requirements
and
other
restrictions
imposed
by
the
1940
Act
and
the
Internal
Revenue
Code
of
1986,
which,
if
applicable,
may
have
adversely
affected
its
performance.
ABSOLUTE
STRATEGIES
FUND
PORTFOLIO
HOLDINGS
SUMMARY
(Unaudited)
March
31,
2022
10
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
futures
contracts
and
call
and
put
options
written,
cash, prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
futures
contracts
and
call
and
put
options
written represent
6.4%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Asset
Backed
Obligations
0.6%
Investment
Companies
43.4%
Exchange
Traded
Fund
1.0%
Money
Market
Fund
47.0%
Purchased
Options
1.4%
Written
Options
(0.2)%
Other
Assets
&
Liabilities,
Net
*
6.8%
100.0%
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2022
11
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Asset
Backed
Obligations
-
0.6%
$
29,485
Adjustable
Rate
Mortgage
Trust,
Series 2005-12 2A1
(a)
2.92%
03/25/36
$
25,535
14,626
Adjustable
Rate
Mortgage
Trust,
Series 2006-1 3A3
(a)
2.78
03/25/36
12,891
8,270
Banc
of
America
Funding
Corp.,
Series 2006-E 2A1
(a)
2.65
06/20/36
7,964
16,704
Banc
of
America
Funding
Corp.,
Series 2007-E 4A1
(a)
3.21
07/20/47
17,108
32,031
CitiMortgage
Alternative
Loan
Trust,
Series 2006-A7 1A12
6.00
12/25/36
30,937
11,840
CitiMortgage
Alternative
Loan
Trust,
Series 2007-A4 1A6
5.75
04/25/37
11,358
10,467
Countrywide
Alternative
Loan
Trust,
Series 2005-50CB 1A1
5.50
11/25/35
9,619
13,599
Countrywide
Home
Loan
Mortgage
Pass-Through
Trust,
Series 2007-HY5 1A1
(a)
3.43
09/25/47
12,555
29,894
IndyMac
Index
Mortgage
Loan
Trust,
Series 2006-AR25 3A1
(a)
3.07
09/25/36
23,076
7,460
JPMorgan
Mortgage
Trust,
Series 2007-A2 4A1M
(a)
3.03
04/25/37
6,922
16,287
Structured
Adjustable
Rate
Mortgage
Loan
Trust,
Series 2007-3 3A1
(a)
3.11
04/25/47
9,773
Total
Asset
Backed
Obligations
(Cost
$119,053)
167,738
Shares
Security
Description
Value
Investment
Companies
-
43.4%
689,232
Absolute
Capital
Opportunities
Fund
(b)(c)
6,954,355
568,483
Absolute
Convertible
Arbitrage
Fund
(b)
6,321,531
Total
Investment
Companies
(Cost
$12,775,051)
13,275,886
Shares
Security
Description
Value
Exchange
Traded
Fund
-
1.0%
9,763
Absolute
Core
Strategy
ETF
(b)
(Cost
$285,026)
292,109
Shares
Security
Description
Value
Money
Market
Fund
-
47.0%
14,378,624
First
American
Treasury
Obligations
Fund,
Class X,
0.01%
(d)(e)(f)
(Cost
$14,378,624)
14,378,624
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
1.4%
Call
Options
Purchased
-
0.4%
500
Invesco
QQQ
Trust
ETF
(c)
$
378.00
04/22
$
18,900,000
68,500
200
SPDR
S&P
500
ETF
Trust
(c)
460.00
04/22
9,200,000
53,200
Total
Call
Options
Purchased
(Premiums
Paid
$203,620)
121,700
Put
Options
Purchased
-
1.0%
250
Energy
Select
Sector
SPDR
Fund
ETF
(c)
60.00
05/22
1,911,000
3,750
500
SPDR
S&P
500
ETF
Trust
(c)
380.00
05/22
22,582,000
63,000
500
SPDR
S&P
500
ETF
Trust
(c)
400.00
06/22
22,582,000
230,000
Total
Put
Options
Purchased
(Premiums
Paid
$735,257)
296,750
Total
Purchased
Options
(Premiums
Paid
$938,877)
418,450
Investments,
at
value
-
93.4%
(Cost
$28,496,631)
$
28,532,807
Total
Written
Options
-
(0.2)%
(Premiums
Received
$(208,464))
(53,250)
Other
Assets
&
Liabilities,
Net
-
6.8%
2,083,162
Net
Assets
-
100.0%
$
30,562,719
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2022
12
Absolute
Funds
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Written
Options
-
(0.2)%
Call
Options
Written
-
(0.1)%
(500)
Invesco
QQQ
Trust
ETF
$
388.00
04/22
$
18,127,000
$
(20,500)
(200)
SPDR
S&P
500
ETF
Trust
470.00
04/22
9,032,800
(10,000)
Total
Call
Options
Written
(Premiums
Received
$(59,179))
(30,500)
Put
Options
Written
-
(0.1)%
(500)
SPDR
S&P
500
ETF
Trust
(Premiums
Received
$(149,285))
330.00
05/22
16,500,000
(22,750)
Total
Written
Options
-
(0.2)%
(Premiums
Received
$(208,464))
$
(53,250)
ABSOLUTE
STRATEGIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2022
13
Absolute
Funds
See
Notes
to
Financial
Statements.
At
March
31,
2022
,
the
Fund
held
the
following
exchange
traded
futures
contracts:
Affiliated
investments
are
investments
that
are
managed
by
the
adviser,
and
are
noted
in
the
Absolute
Strategies
Fund’s
Schedule
of
Investments.
Transactions
during
the
period
with
affiliates
were
as
follows:
At
March
31,
2022,
the
value
of
investments
in
affiliated
companies
was
$13,567,995
representing
44.4%
of
net
assets,
and
the
total
cost
was
$13,060,077.
Net
unrealized
appreciation
was
$507,918,
the
net
change
in
unrealized
depreciation
was
$(1,950,050)
net
realized
gain
was
$1,292,559,
total
capital
gain
distributions
were
$222,498
and
investment
income
was
$0.
ETF
Exchange
Traded
Fund
(a)
Variable
rate
security,
the
interest
rate
of
which
adjusts
periodically
based
on
changes
in
current
interest
rates.
Rate
represented
is
as
of
March
31,
2022.
(b)
Affiliated
Company.
(c)
Non-income
producing
security.
(d)
All
or
a
portion
of
this
security
is
held
as
collateral
for
written
options.
(e)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2022.
(f)
The
Fund
currently
invests
a
portion
of
its
assets
in
First
American
Treasury
Obligations
Fund,
Class
X.
The
Fund
may
redeem
its
investment
from
First
American
Treasury
Obligations
Fund,
Class
X
at
any
time
if
the
Advisor
determines
that
it
is
in
the
best
interest
of
the
Fund
and
its
shareholders
to
do
so.
The
performance
of
the
Fund
may
be
directly
affected
by
the
performance
of
First
American
Treasury
Obligations
Fund,
Class
X.
The
financial
statements
of
First
American
Treasury
Obligations
Fund,
Class
X,
including
the
portfolio
of
investments,
can
be
found
at
First
American
Treasury
Obligations
Fund,
Class
X’s
website
www.firstamericanfunds.
com
or
the
Securities
and
Exchange
Commission’s
website
www.sec.gov
and
should
be
read
in
conjunction
with
the
Fund’s
financial
statements.
As
of
March
31,
2022,
the
Fund’s
net
assets
invested
in
First
American
Treasury
Obligations
Fund,
Class
X
were
47.0%.
Contracts
Description
Expiration
Date
Notional
Contract
Value
Value
Net
Unrealized
Appreciation
(35)
NASDAQ
100
E-mini
Future
06/17/22
$
(10,572,731)
$
(10,408,125)
$
164,606
(5)
S&P
500
E-mini
Future
06/17/22
(1,154,617)
(1,132,688)
21,929
$
(11,727,348)
$
(11,540,813)
$
186,535
Exchange
Traded
Fund
Absolute
Core
Strategy
ETF
Balance
3/31/2021
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Appreciation
Balance
3/31/2022
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
–
20,763
(11,000)
–
9,763
Cost
$
–
$
610,473
$
(325,447)
$
–
$
285,026
$
827
$
–
$
–
Value
–
–
–
7,083
292,109
Investment
Companies
Absolute
Capital
Opportunities
Fund
Balance
3/31/2021
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Appreciation
Balance
3/31/2022
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
1,602,172
–
(912,940)
–
689,232
Cost
$
16,436,136
$
–
$
(9,543,812)
$
–
$
6,892,324
$
(43,813)
$
–
$
–
Value
17,031,091
–
–
(532,924)
6,954,355
Absolute
Convertible
Arbitrage
Fund
Balance
3/31/2021
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
3/31/2022
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
1,647,945
110,126
(1,189,588)
–
568,483
Cost
$
16,824,683
$
1,222,498
$
(12,164,454)
$
–
$
5,882,727
$
1,335,545
$
222,498
$
–
Value
18,687,696
–
–
(1,424,209)
6,321,531
ABSOLUTE
STRATEGIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2022
14
Absolute
Funds
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
other
financial
instruments
and
liabilities
as
of
March
31,
2022.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
* Other
Financial
Instruments
are
derivatives
not
reflected
in
the
Schedule
of
Investments,
such
as
futures,
which
are
valued
at
the
unrealized
appreciation/(depreciation) at
year
end.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Asset
Backed
Obligations
$
–
$
167,738
$
–
$
167,738
Investment
Companies
13,275,886
–
–
13,275,886
Exchange
Traded
Fund
292,109
–
–
292,109
Money
Market
Fund
–
14,378,624
–
14,378,624
Purchased
Options
233,750
184,700
–
418,450
Investments
at
Value
$
13,801,745
$
14,731,062
$
–
$
28,532,807
Other
Financial
Instruments*
Futures
186,535
–
–
186,535
Total
Other
Financial
Instruments*
$
186,535
$
–
$
–
$
186,535
Total
Assets
$
13,988,280
$
14,731,062
$
–
$
28,719,342
Liabilities
Written
Options
(30,500)
(22,750)
–
(53,250)
Total
Liabilities
$
(30,500)
$
(22,750)
$
–
$
(53,250)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
PORTFOLIO
HOLDINGS
SUMMARY
(Unaudited)
March
31,
2022
15
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
call
and
put
options
written,
prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
call
and
put
options
written
represent
11.5% of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Common
Stock
57.1%
Money
Market
Fund
38.8%
Purchased
Options
1.2%
Written
Options
(9.2)%
Other
Assets
&
Liabilities,
Net
*
12.1%
100.0%
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2022
16
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
57.1%
Communication
Services
-
9.3%
860
Alphabet,
Inc.,
Class A
(a)(b)
$
2,391,961
645
Alphabet,
Inc.,
Class C
(a)(b)
1,801,478
3,321
Charter
Communications,
Inc.,
Class A
(a)
1,811,672
29,515
Discovery,
Inc.,
Class C
(a)
736,990
8,901
Liberty
Media
Corp.-Liberty
SiriusXM
(a)
406,865
15,881
Meta
Platforms,
Inc.,
Class A
(a)(b)
3,531,299
11,171
Motorola
Solutions,
Inc.
2,705,616
565
Netflix,
Inc.
(a)
211,643
13,597,524
Consumer
Discretionary
-
15.2%
1,200
Alibaba
Group
Holding,
Ltd.,
ADR
(a)
130,560
1,142
Amazon.com,
Inc.
(a)(b)
3,722,863
909
Booking
Holdings,
Inc.
(a)
2,134,741
11,221
CarMax,
Inc.
(a)(b)
1,082,602
11,450
Dollar
Tree,
Inc.
(a)
1,833,718
7,555
Expedia
Group,
Inc.
(a)
1,478,287
6,710
Fisker,
Inc.
(a)
86,559
7,056
Foot
Locker,
Inc.
209,281
73,461
General
Motors
Co.
(a)(b)
3,213,184
39,630
Gildan
Activewear,
Inc.
1,485,332
16,109
Hasbro,
Inc.
1,319,649
44,860
Las
Vegas
Sands
Corp.
(a)
1,743,708
6,421
Lowe's
Cos.,
Inc.
1,298,262
7,300
MGM
Resorts
International
306,162
3,901
Spark
Networks
SE,
ADR
(a)
10,884
15,638
The
Walt
Disney
Co.
(a)(b)
2,144,908
22,200,700
Consumer
Staples
-
2.1%
32,630
Philip
Morris
International,
Inc.
3,065,262
Energy
-
0.4%
2,300
Pioneer
Natural
Resources
Co.
(c)
575,069
Financials
-
11.9%
9,870
American
Express
Co.
(b)
1,845,690
5,600
Aon
PLC,
Class A
1,823,528
11,379
Berkshire
Hathaway,
Inc.,
Class B
(a)(b)
4,015,763
13,541
Blackstone,
Inc.,
Class A
(b)
1,718,894
5,852
Citigroup,
Inc.
312,497
9,171
JPMorgan
Chase
&
Co.
1,250,191
10,659
Northern
Trust
Corp.
1,241,240
29,045
The
Charles
Schwab
Corp.
(c)
2,448,784
12,101
Visa,
Inc.,
Class A
2,683,639
1,500
Zillow
Group,
Inc.,
Class C
(a)
73,935
17,414,161
Health
Care
-
2.4%
11,284
Becton
Dickinson
and
Co.
3,001,544
21,704
Covetrus,
Inc.
(a)
364,410
2,892
Semler
Scientific,
Inc.
(a)
143,328
3,509,282
Industrials
-
4.6%
24,750
Hayward
Holdings,
Inc.
(a)
411,345
9,577
Jacobs
Engineering
Group,
Inc.
1,319,807
5,140
KB
Home
166,433
5,623
Keysight
Technologies,
Inc.
(a)(c)
888,265
21,857
Quanta
Services,
Inc.
(b)
2,876,600
5,265
United
Parcel
Service,
Inc.,
Class B
1,129,132
6,791,582
Information
Technology
-
11.2%
5,200
Activision
Blizzard,
Inc.
(c)
416,572
29,307
Apple,
Inc.
(b)(c)
5,117,295
14,613
Arista
Networks,
Inc.
(a)
2,030,915
7,371
Autodesk,
Inc.
(a)
1,579,974
15,215
GoDaddy,
Inc.,
Class A
(a)
1,273,496
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2022
17
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Information
Technology
-
11.2%
(continued)
10,112
salesforce.com,
Inc.
(a)
$
2,146,980
11,490
Splunk,
Inc.
(a)
1,707,529
5,500
Spotify
Technology
SA
(a)
830,610
16,471
SS&C
Technologies
Holdings,
Inc.
1,235,654
16,339,025
Total
Common
Stock
(Cost
$62,193,848)
83,492,605
Shares
Security
Description
Value
Money
Market
Fund
-
38.8%
56,785,619
First
American
Treasury
Obligations
Fund,
Class X,
0.01%
(d)(e)
(Cost
$56,785,619)
56,785,619
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
1.2%
Call
Options
Purchased
-
1.1%
19
Alibaba
Group
Holding,
Ltd.
(a)
$
180.00
01/24
$
342,000
24,035
306
Bristol-Myers
Squibb
Co.
(a)
70.00
06/22
2,142,000
137,700
299
Bristol-Myers
Squibb
Co.
(a)
80.00
07/22
2,392,000
17,192
407
Citigroup,
Inc.
(a)
80.00
06/22
3,256,000
1,628
633
Citigroup,
Inc.
(a)
72.50
06/22
4,589,250
4,431
365
CVS
Health
Corp.
(a)
105.00
06/22
3,832,500
96,360
112
EOG
Resources,
Inc.
(a)
97.00
04/22
1,086,400
251,720
269
General
Motors
Co.
(a)
75.00
06/22
2,017,500
269
250
General
Motors
Co.
(a)
65.00
06/22
1,625,000
2,250
55
Merck
&
Co.,
Inc.
(a)
95.00
04/22
522,500
110
55
Merck
&
Co.,
Inc.
(a)
100.00
06/22
550,000
330
424
Merck
&
Co.,
Inc.
(a)
95.00
06/22
4,028,000
6,360
48
Meta
Platforms,
Inc.
(a)
345.00
07/22
1,656,000
2,976
174
Morgan
Stanley
(a)
110.00
07/22
1,914,000
6,612
60
Morgan
Stanley
(a)
60.00
01/23
360,000
171,000
64
PayPal
Holdings,
Inc.
(a)
140.00
07/22
896,000
20,480
209
Philip
Morris
International,
Inc.
(a)
120.00
06/22
2,508,000
1,881
170
Philip
Morris
International,
Inc.
(a)
105.00
06/22
1,785,000
9,010
21
Pioneer
Natural
Resources
Co.
(a)
210.00
05/22
441,000
90,825
11,812
SPDR
S&P
500
ETF
Trust
(a)
472.00
04/22
557,526,400
395,702
1,653
SPDR
S&P
500
ETF
Trust
(a)
520.00
06/22
85,956,000
34,713
826
SPDR
S&P
500
ETF
Trust
(a)
500.00
06/22
41,300,000
66,080
77
The
Coca-Cola
Co.
(a)
45.00
01/23
346,500
134,365
161
Walgreens
Boots
Alliance,
Inc.
(a)
45.00
01/23
724,500
71,645
Total
Call
Options
Purchased
(Premiums
Paid
$3,388,361)
1,547,674
Put
Options
Purchased
-
0.1%
3,182
SPDR
S&P
500
ETF
Trust
(a)
408.00
04/22
143,711,848
116,143
1,817
SPDR
S&P
500
ETF
Trust
(a)
390.00
04/22
82,062,988
42,700
Total
Put
Options
Purchased
(Premiums
Paid
$3,642,322)
158,843
Total
Purchased
Options
(Premiums
Paid
$7,030,683)
1,706,517
Investments,
at
value
-
97.1%
(Cost
$126,010,150)
$
141,984,741
Total
Written
Options
-
(9.2)%
(Premiums
Received
$(7,341,413))
(13,484,305)
Other
Assets
&
Liabilities,
Net
-
12.1%
17,765,458
Net
Assets
-
100.0%
$
146,265,894
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2022
18
Absolute
Funds
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Written
Options
-
(9.2)%
Call
Options
Written
-
(7.5)%
(52)
Activision
Blizzard,
Inc.
$
95.00
01/24
$
416,572
$
(10,660)
(65)
Apple,
Inc.
150.00
01/23
1,134,965
(229,775)
(13)
Keysight
Technologies,
Inc.
165.00
01/23
205,361
(22,100)
(21)
Pioneer
Natural
Resources
Co.
250.00
05/22
525,063
(30,345)
(23)
Pioneer
Natural
Resources
Co.
230.00
01/23
575,069
(87,515)
(2,726)
SPDR
S&P
500
ETF
Trust
415.00
04/22
123,117,064
(10,549,620)
(58)
The
Charles
Schwab
Corp.
85.00
01/23
488,998
(58,580)
Total
Call
Options
Written
(Premiums
Received
$(5,225,927))
(10,988,595)
Put
Options
Written
-
(1.7)%
(29)
Activision
Blizzard,
Inc.
95.00
01/24
275,500
(44,153)
(52)
Activision
Blizzard,
Inc.
65.00
01/24
338,000
(20,852)
(19)
Adobe,
Inc.
465.00
01/23
883,500
(106,780)
(10)
Alibaba
Group
Holding,
Ltd.
150.00
01/23
150,000
(47,850)
(6)
Alibaba
Group
Holding,
Ltd.
120.00
01/23
72,000
(15,690)
(25)
Analog
Devices,
Inc.
150.00
09/22
375,000
(19,700)
(20)
Autodesk,
Inc.
220.00
06/22
440,000
(35,950)
(69)
Bed
Bath
&
Beyond,
Inc.
20.00
01/23
138,000
(49,335)
(70)
Bristol-Myers
Squibb
Co.
65.00
01/23
455,000
(19,600)
(85)
Bristol-Myers
Squibb
Co.
52.50
01/23
446,250
(7,225)
(130)
Camping
World
Holdings,
Inc.
36.00
06/22
468,000
(121,550)
(28)
Carvana
Co.
180.00
01/23
504,000
(203,630)
(150)
Citigroup,
Inc.
60.00
01/23
900,000
(148,500)
(78)
Comcast
Corp.
57.50
01/23
448,500
(92,430)
(90)
CVS
Health
Corp.
90.00
01/23
810,000
(45,000)
(51)
EOG
Resources,
Inc.
87.00
01/23
443,700
(27,030)
(42)
EOG
Resources,
Inc.
72.00
01/23
302,400
(11,256)
(39)
Fisker,
Inc.
17.50
01/23
68,250
(27,983)
(83)
General
Motors
Co.
60.00
01/23
498,000
(142,967)
(96)
General
Motors
Co.
50.00
01/23
480,000
(90,240)
(53)
Las
Vegas
Sands
Corp.
35.00
01/23
185,500
(21,995)
(20)
Merck
&
Co.,
Inc.
90.00
01/23
180,000
(22,750)
(116)
Merck
&
Co.,
Inc.
80.00
01/23
928,000
(64,496)
(13)
Meta
Platforms,
Inc.
330.00
06/22
429,000
(140,302)
(16)
Meta
Platforms,
Inc.
280.00
01/23
448,000
(106,080)
(247)
MGM
Resorts
International
40.00
01/23
988,000
(125,353)
(41)
Morgan
Stanley
95.00
01/23
389,500
(59,553)
(6)
Netflix,
Inc.
350.00
01/23
210,000
(23,496)
(161)
Paramount
Global
27.00
01/23
434,700
(28,175)
(9)
PayPal
Holdings,
Inc.
175.00
09/22
157,500
(53,617)
(9)
PayPal
Holdings,
Inc.
130.00
01/23
117,000
(21,960)
(20)
PayPal
Holdings,
Inc.
115.00
01/24
230,000
(44,080)
(35)
Peloton
Interactive,
Inc.
35.00
01/23
122,500
(43,050)
(17)
Penn
National
Gaming,
Inc.
45.00
01/23
76,500
(16,532)
(34)
Philip
Morris
International,
Inc.
95.00
01/23
323,000
(33,915)
(60)
Philip
Morris
International,
Inc.
80.00
01/23
480,000
(23,400)
(14)
Pioneer
Natural
Resources
Co.
190.00
01/23
266,000
(20,090)
(15)
Pioneer
Natural
Resources
Co.
150.00
01/23
225,000
(8,250)
(22)
salesforce.com,
Inc.
200.00
01/23
440,000
(41,305)
(6)
The
Boston
Beer
Co.,
Inc.
420.00
01/23
252,000
(43,860)
(118)
The
Gap,
Inc.
18.00
08/22
212,400
(54,575)
(33)
The
Walt
Disney
Co.
155.00
01/23
511,500
(79,035)
(10)
Wayfair,
Inc.
150.00
01/23
150,000
(51,800)
(189)
Weber,
Inc.
7.50
12/22
141,750
(21,735)
(29)
Zillow
Group,
Inc.
70.00
01/23
203,000
(68,585)
Total
Put
Options
Written
(Premiums
Received
$(2,115,486))
(2,495,710)
Total
Written
Options
-
(9.2)%
(Premiums
Received
$(7,341,413))
$
(13,484,305)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
CALL
AND
PUT
OPTIONS
WRITTEN
March
31,
2022
19
Absolute
Funds
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
other
financial
instruments
and
liabilities
as
of
March
31,
2022.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
ADR
American
Depositary
Receipt
ETF
Exchange
Traded
Fund
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
(b)
All
or
a
portion
of
this
security
is
held
as
collateral
for
written
options.
(c)
Subject
to
written
call
option.
(d)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2022.
(e)
The
Fund
currently
invests
a
portion
of
its
assets
in
First
American
Treasury
Obligations
Fund,
Class
X.
The
Fund
may
redeem
its
investment
from
First
American
Treasury
Obligations
Fund,
Class
X
at
any
time
if
the
Advisor
determines
that
it
is
in
the
best
interest
of
the
Fund
and
its
shareholders
to
do
so.
The
performance
of
the
Fund
may
be
directly
affected
by
the
performance
of
First
American
Treasury
Obligations
Fund,
Class
X.
The
financial
statements
of
First
American
Treasury
Obligations
Fund,
Class
X,
including
the
portfolio
of
investments,
can
be
found
at
First
American
Treasury
Obligations
Fund,
Class
X’s
website
www.firstamericanfunds.
com
or
the
Securities
and
Exchange
Commission’s
website
www.sec.gov
and
should
be
read
in
conjunction
with
the
Fund’s
financial
statements.
As
of
March
31,
2022,
the
Fund’s
net
assets
invested
in
First
American
Treasury
Obligations
Fund,
Class
X
were
38.8%.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Common
Stock
Communication
Services
$
13,597,524
$
–
$
–
$
13,597,524
Consumer
Discretionary
22,200,700
–
–
22,200,700
Consumer
Staples
3,065,262
–
–
3,065,262
Energy
575,069
–
–
575,069
Financials
17,414,161
–
–
17,414,161
Health
Care
3,509,282
–
–
3,509,282
Industrials
6,791,582
–
–
6,791,582
Information
Technology
16,339,025
–
–
16,339,025
Money
Market
Fund
–
56,785,619
–
56,785,619
Purchased
Options
717,393
989,124
–
1,706,517
Investments
at
Value
$
84,209,998
$
57,774,743
$
–
$
141,984,741
Total
Assets
$
84,209,998
$
57,774,743
$
–
$
141,984,741
Liabilities
Written
Options
(939,497)
(12,544,808)
–
(13,484,305)
Total
Liabilities
$
(939,497)
$
(12,544,808)
$
–
$
(13,484,305)
Absolute
Convertible
Arbitrage
Fund
Portfolio
Holdings
Summary
(Unaudited)
March
31,
2022
20
Absolute
Funds
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
securities
sold
short
and
futures,
cash,
prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
securities
sold
short
and
futures
represent 43.8
%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Long
Positions
Corporate
Convertible
Bonds
92.6%
Corporate
Non-Convertible
Bond
0.8%
Money
Market
Fund
3.8%
Short
Positions
Common
Stock
(41.7)%
Other
Assets
&
Liabilities,
Net
*
44.5%
100.0%
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2022
21
Absolute
Funds
See
Notes
to
Financial
Statements.
‘ll
Principal
Security
Description
Rate
Maturity
Value
Long
Positions
-
97.2%
Fixed
Income
Securities
-
93.4%
Corporate
Convertible
Bonds
-
92.6%
Communication
Services
-
9.4%
$
3,750,000
Harmonic,
Inc.
(a)
2.00%
09/01/24
$
4,807,500
9,000,000
Infinera
Corp.
2.50
03/01/27
12,411,000
5,542,000
InterDigital,
Inc.
2.00
06/01/24
5,708,260
1,061,000
Mandiant,
Inc.
(a)
1.63
06/01/35
1,061,011
3,922,000
Mandiant,
Inc.
0.88
06/01/24
4,338,712
5,100,000
Palo
Alto
Networks,
Inc.
0.38
06/01/25
10,766,100
6,655,000
Perficient,
Inc.
(b)
0.13
11/15/26
5,979,518
6,338,000
Q2
Holdings,
Inc.
(a)
0.75
06/01/26
6,325,324
6,000,000
TechTarget,
Inc.
(b)(c)
0.03
12/15/26
5,445,000
7,000,000
Twitter,
Inc.
(c)
3.63
03/15/26
5,911,500
5,000,000
Wix.com,
Ltd.
(c)
2.99 -
3.08
08/15/25
4,365,000
67,118,925
Consumer
Discretionary
-
16.3%
3,300,000
2U,
Inc.
2.25
05/01/25
2,788,500
5,000,000
Airbnb,
Inc.
(c)
0.04
03/15/26
4,858,464
7,000,000
Alarm.com
Holdings,
Inc.
(c)
1.40 -
2.77
01/15/26
5,950,000
6,245,000
American
Airlines
Group,
Inc.
(a)
6.50
07/01/25
8,574,385
2,000,000
American
Eagle
Outfitters,
Inc.
(a)
3.75
04/15/25
4,195,400
2,447,000
Callaway
Golf
Co.
2.75
05/01/26
3,698,029
6,000,000
Chegg,
Inc.
(c)
4.50
09/01/26
4,932,000
8,500,000
Cracker
Barrel
Old
Country
Store,
Inc.
(b)
0.63
06/15/26
7,798,750
1,500,000
Eventbrite,
Inc.
5.00
12/01/25
2,204,062
5,000,000
Eventbrite,
Inc.
0.75
09/15/26
4,407,500
6,000,000
Fisker,
Inc.
(b)
2.50
09/15/26
5,081,250
3,500,000
Groupon,
Inc.
(b)
1.13
03/15/26
2,774,691
7,940,000
IMAX
Corp.
(b)
0.50
04/01/26
7,582,700
5,186,000
LCI
Industries
1.13
05/15/26
4,768,527
5,000,000
Lucid
Group,
Inc.
(b)
1.25
12/15/26
3,858,721
7,000,000
Luminar
Technologies,
Inc.
(b)
1.25
12/15/26
7,086,268
1,000,000
NCL
Corp.,
Ltd.
(b)
2.50
02/15/27
957,000
4,250,000
NCL
Corp.,
Ltd.
(b)
1.13
02/15/27
3,927,000
1,000,000
Penn
National
Gaming,
Inc.
(a)
2.75
05/15/26
2,016,000
1,025,000
Royal
Caribbean
Cruises,
Ltd.
4.25
06/15/23
1,344,082
1,000,000
Royal
Caribbean
Cruises,
Ltd.
2.88
11/15/23
1,214,000
500,000
Spirit
Airlines,
Inc.
4.75
05/15/25
983,750
2,439,000
Spirit
Airlines,
Inc.
(a)
1.00
05/15/26
2,199,978
6,715,000
Stride,
Inc.
1.13
09/01/27
6,694,855
6,000,000
Upwork,
Inc.
(b)
0.25
08/15/26
4,929,000
6,000,000
Virgin
Galactic
Holdings,
Inc.
(b)
2.50
02/01/27
5,793,000
3,000,000
Vroom,
Inc.
(b)
0.75
07/01/26
1,402,022
4,460,000
Wayfair,
Inc.
0.63
10/01/25
3,683,960
115,703,894
Consumer
Staples
-
2.0%
4,600,000
FTI
Consulting,
Inc.
(a)
2.00
08/15/23
7,327,399
6,121,000
MGP
Ingredients,
Inc.
(b)
1.88
11/15/41
6,914,978
14,242,377
Energy
-
3.4%
5,752,000
Helix
Energy
Solutions
Group,
Inc.
(a)
6.75
02/15/26
6,618,827
4,000,000
Oil
States
International,
Inc.
(b)
4.75
04/01/26
4,107,500
6,000,000
Peabody
Energy
Corp.
(b)
3.25
03/01/28
8,831,722
6,000,000
Stem,
Inc.
(b)
0.50
12/01/28
4,480,200
24,038,249
Financials
-
2.0%
3,000,000
Affirm
Holdings,
Inc.
(b)(c)
3.43 -
6.05
11/15/26
2,100,000
2,842,000
Encore
Capital
Group,
Inc.
(a)
3.25
10/01/25
4,702,089
3,780,000
Realogy
Group,
LLC/Realogy
Co.-Issuer
Corp.
(b)
0.25
06/15/26
3,463,425
3,500,000
Redfin
Corp.
(c)
2.80
10/15/25
2,596,563
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2022
22
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Financials
-
2.0%
(continued)
$
2,000,000
Redfin
Corp.
(b)
0.50%
04/01/27
$
1,347,000
14,209,077
Health
Care
-
16.3%
6,000,000
1Life
Healthcare,
Inc.
3.00
06/15/25
5,208,000
6,000,000
Accuray,
Inc.
(b)
3.75
06/01/26
5,893,119
5,755,000
Allscripts
Healthcare
Solutions,
Inc.
(a)
0.88
01/01/27
10,197,860
4,000,000
Alphatec
Holdings,
Inc.
(b)
0.75
08/01/26
3,855,000
6,500,000
Artivion,
Inc.
4.25
07/01/25
7,605,000
3,225,000
Ascendis
Pharma
A/S
(b)
2.25
04/01/28
3,315,703
5,000,000
Bridgebio
Pharma,
Inc.
2.25
02/01/29
2,340,000
4,035,000
CONMED
Corp.
(a)
2.63
02/01/24
6,954,322
2,077,000
Exact
Sciences
Corp.
(a)
1.00
01/15/25
2,523,555
3,150,000
Gossamer
Bio,
Inc.
(a)
5.00
06/01/27
2,531,025
6,000,000
Inotiv,
Inc.
(b)
3.25
10/15/27
5,719,171
5,759,000
Insmed,
Inc.
0.75
06/01/28
5,580,471
4,000,000
Invacare
Corp.
4.25
03/15/26
2,120,000
3,500,000
Jazz
Investments
I,
Ltd.
2.00
06/15/26
4,260,973
5,000,000
MannKind
Corp.
2.50
03/01/26
4,952,500
6,000,000
Novocure,
Ltd.
(c)
3.44 -
3.54
11/01/25
5,475,000
4,274,000
NuVasive,
Inc.
0.38
03/15/25
4,132,424
5,000,000
Pacira
BioSciences,
Inc.
0.75
08/01/25
6,218,750
5,326,000
PetIQ,
Inc.
4.00
06/01/26
6,374,556
3,626,000
SmileDirectClub,
Inc.
(b)(c)
2.76 -
8.31
02/01/26
1,274,120
5,000,000
Tabula
Rasa
HealthCare,
Inc.
1.75
02/15/26
3,747,786
1,839,000
Travere
Therapeutics,
Inc.
(a)
2.50
09/15/25
1,921,755
4,000,000
Travere
Therapeutics,
Inc.
2.25
03/01/29
4,258,000
7,225,000
Varex
Imaging
Corp.
4.00
06/01/25
9,148,656
115,607,746
Industrials
-
13.9%
1,000,000
Bloom
Energy
Corp.
2.50
08/15/25
1,656,300
2,180,000
Chart
Industries,
Inc.
(b)
1.00
11/15/24
6,425,550
6,400,000
CryoPort,
Inc.
(b)
0.75
12/01/26
5,059,200
2,000,000
GoPro,
Inc.
(b)
1.25
11/15/25
2,339,497
7,000,000
Granite
Construction,
Inc.
(a)
2.75
11/01/24
8,335,250
2,500,000
II-VI,
Inc.
(a)
0.25
09/01/22
3,865,000
7,558,000
Itron,
Inc.
(c)
5.70
03/15/26
6,428,079
5,943,000
John
Bean
Technologies
Corp.
(b)
0.25
05/15/26
5,737,967
2,508,000
Kaman
Corp.
(a)
3.25
05/01/24
2,586,500
5,620,000
KBR,
Inc.
(a)
2.50
11/01/23
12,223,500
5,200,000
Mesa
Laboratories,
Inc.
(a)
1.38
08/15/25
5,592,600
2,400,000
Patrick
Industries,
Inc.
(b)
1.75
12/01/28
2,160,000
6,000,000
SMART
Global
Holdings,
Inc.
2.25
02/15/26
8,769,920
9,000,000
The
Greenbrier
Cos.,
Inc.
(b)
2.88
04/15/28
10,414,638
4,598,000
The
Middleby
Corp.
1.00
09/01/25
6,353,861
1,000,000
Vertex
Energy,
Inc.
(b)
6.25
10/01/27
1,758,585
6,061,000
Winnebago
Industries,
Inc.
1.50
04/01/25
6,639,825
3,000,000
Xometry,
Inc.
(b)
1.00
02/01/27
2,752,500
99,098,772
Information
Technology
-
28.7%
7,560,000
Alteryx,
Inc.
1.00
08/01/26
6,648,075
7,000,000
Avalara,
Inc.
(b)
0.25
08/01/26
6,006,000
7,000,000
Bandwidth,
Inc.
(b)
0.50
04/01/28
4,623,500
7,500,000
Bentley
Systems,
Inc.
(b)
0.38
07/01/27
6,547,500
2,500,000
Blackline,
Inc.
0.13
08/01/24
2,967,250
7,500,000
Blackline,
Inc.
(c)
3.26
03/15/26
6,375,000
6,700,000
Box,
Inc.
(c)
0.00
01/15/26
8,488,900
7,000,000
Coupa
Software,
Inc.
0.38
06/15/26
5,908,000
6,000,000
DigitalOcean
Holdings,
Inc.
(b)(c)
5.23
12/01/26
4,773,000
3,000,000
Dropbox,
Inc.
(c)
0.06
03/01/26
2,814,000
1,876,000
Envestnet,
Inc.
(a)
1.75
06/01/23
2,248,855
5,450,000
Envestnet,
Inc.
(b)
0.75
08/15/25
5,320,562
1,500,000
Evolent
Health,
Inc.
(a)
3.50
12/01/24
2,751,750
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
March
31,
2022
23
Absolute
Funds
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Information
Technology
-
28.7%
(continued)
$
3,901,000
Evolent
Health,
Inc.
1.50%
10/15/25
$
4,615,273
7,000,000
Fastly,
Inc.
(c)
1.84 -
7.06
03/15/26
5,260,500
8,500,000
Five9,
Inc.
0.50
06/01/25
9,231,000
5,000,000
Fiverr
International,
Ltd.
(c)
4.50
11/01/25
4,267,500
5,500,000
Guidewire
Software,
Inc.
(a)
1.25
03/15/25
5,779,400
2,500,000
HubSpot,
Inc.
0.38
06/01/25
4,465,000
2,850,000
Impinj,
Inc.
(a)
2.00
12/15/26
5,801,460
3,570,000
Impinj,
Inc.
(b)
1.13
05/15/27
3,366,956
2,000,000
Limelight
Networks,
Inc.
3.50
08/01/25
2,087,080
5,797,000
LivePerson,
Inc.
(c)
5.05
12/15/26
4,623,554
5,000,000
Lumentum
Holdings,
Inc.
0.50
12/15/26
5,819,401
6,000,000
Magnite,
Inc.
0.25
03/15/26
4,770,679
1,500,000
MicroStrategy,
Inc.
(c)
5.83
02/15/27
1,079,067
4,478,000
Mitek
Systems,
Inc.
(b)
0.75
02/01/26
4,494,793
7,000,000
Model
N,
Inc.
2.63
06/01/25
7,714,000
5,000,000
New
Relic,
Inc.
0.50
05/01/23
5,025,000
2,000,000
PagerDuty,
Inc.
1.25
07/01/25
2,311,000
5,977,000
Parsons
Corp.
0.25
08/15/25
6,324,313
5,705,000
Porch
Group,
Inc.
(b)
0.75
09/15/26
3,808,087
6,500,000
Progress
Software
Corp.
(b)
1.00
04/15/26
6,493,500
3,860,000
PROS
Holdings,
Inc.
2.25
09/15/27
4,097,390
2,946,000
Rapid7,
Inc.
2.25
05/01/25
5,588,194
5,000,000
Unity
Software,
Inc.
(b)(c)
1.77 -
2.05
11/15/26
4,121,250
3,000,000
Veeco
Instruments,
Inc.
3.75
06/01/27
6,313,200
5,500,000
Verint
Systems,
Inc.
(b)
0.25
04/15/26
5,762,805
6,000,000
Veritone,
Inc.
(b)
1.75
11/15/26
5,154,036
5,000,000
Workiva,
Inc.
1.13
08/15/26
8,065,625
2,000,000
Zynga,
Inc.
(a)
0.25
06/01/24
2,441,250
204,353,705
Materials
-
0.6%
3,134,000
SSR
Mining,
Inc.
2.50
04/01/39
4,371,930
Total
Corporate
Convertible
Bonds
(Cost
$659,275,865)
658,744,675
Corporate
Non-Convertible
Bond
-
0.8%
Materials
-
0.8%
3,700,000
Century
Aluminum
Co.
(b)
(Cost
$3,986,522)
2.75
05/01/28
5,929,250
Total
Fixed
Income
Securities
(Cost
$663,262,387)
664,673,925
Shares
Security
Description
Value
Money
Market
Fund
-
3.8%
26,648,091
First
American
Treasury
Obligations
Fund,
Class X,
0.01%
(a)(d)
(Cost
$26,648,091)
26,648,091
Total
Long
Positions
-
97.2%
(Cost
$689,910,478)
691,322,016
Total
Short
Positions
-
(41.7)%
(Proceeds
$(311,140,645))
(296,470,943)
Other
Assets
&
Liabilities,
Net
-
44.5%
316,552,931
Net
Assets
-
100.0%
$
711,404,004
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2022
24
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Short
Positions
-
(41.7)%
Common
Stock
-
(41.7)%
Communication
Services
-
(4.1)%
(281,930)
Harmonic,
Inc.
$
(2,619,130)
(869,201)
Infinera
Corp.
(7,535,973)
(24,000)
InterDigital,
Inc.
(1,531,200)
(58,143)
Limelight
Networks,
Inc.
(303,506)
(61,700)
Mandiant,
Inc.
(1,376,527)
(27,925)
PagerDuty,
Inc.
(954,756)
(16,045)
Palo
Alto
Networks,
Inc.
(9,988,173)
(38,783)
Q2
Holdings,
Inc.
(2,390,972)
(24,900)
TechTarget,
Inc.
(2,023,872)
(6,750)
Twitter,
Inc.
(261,157)
(1,348)
Wix.com,
Ltd.
(140,812)
(29,126,078)
Consumer
Discretionary
-
(6.6)%
(51,595)
2U,
Inc.
(685,181)
(6,867)
Airbnb,
Inc.,
Class A
(1,179,476)
(18,176)
Alarm.com
Holdings,
Inc.
(1,207,977)
(314,744)
American
Airlines
Group,
Inc.
(5,744,078)
(220,100)
American
Eagle
Outfitters,
Inc.
(3,697,680)
(110,500)
Callaway
Golf
Co.
(2,587,910)
(9,870)
Chegg,
Inc.
(358,083)
(21,364)
Cracker
Barrel
Old
Country
Store,
Inc.
(2,536,548)
(176,800)
Eventbrite,
Inc.,
Class A
(2,611,336)
(196,961)
Fisker,
Inc.
(2,540,797)
(8,167)
Fiverr
International,
Ltd.
(621,264)
(23,700)
Groupon,
Inc.
(455,751)
(153,454)
IMAX
Corp.
(2,904,884)
(14,200)
LCI
Industries
(1,474,102)
(47,082)
Lucid
Group,
Inc.
(1,195,883)
(233,356)
Luminar
Technologies,
Inc.
(3,647,354)
(92,620)
Norwegian
Cruise
Line
Holdings,
Ltd.
(2,026,526)
(38,000)
Penn
National
Gaming,
Inc.
(1,611,960)
(17,822)
Royal
Caribbean
Cruises,
Ltd.
(1,493,127)
(53,070)
Spirit
Airlines,
Inc.
(1,160,641)
(68,300)
Stride,
Inc.
(2,481,339)
(39,274)
Upwork,
Inc.
(912,728)
(351,822)
Virgin
Galactic
Holdings,
Inc.
(3,476,001)
(24,300)
Vroom,
Inc.
(64,638)
(2,250)
Wayfair,
Inc.,
Class A
(249,255)
(46,924,519)
Consumer
Staples
-
(1.3)%
(39,519)
FTI
Consulting,
Inc.
(6,213,177)
(38,486)
MGP
Ingredients,
Inc.
(3,294,017)
(9,507,194)
Energy
-
(1.6)%
(385,532)
Helix
Energy
Solutions
Group,
Inc.
(1,842,843)
(205,687)
Oil
States
International,
Inc.
(1,429,525)
(263,630)
Peabody
Energy
Corp.
(6,466,844)
(123,526)
Stem,
Inc.
(1,360,021)
(11,099,233)
Financials
-
(0.8)%
(6,952)
Affirm
Holdings,
Inc.
(321,739)
(58,500)
Encore
Capital
Group,
Inc.
(3,669,705)
(87,500)
Realogy
Holdings
Corp.
(1,372,000)
(27,600)
Redfin
Corp.
(497,904)
(5,861,348)
Health
Care
-
(7.2)%
(36,800)
1Life
Healthcare,
Inc.
(407,744)
(515,356)
Accuray,
Inc.
(1,705,829)
(359,000)
Allscripts
Healthcare
Solutions,
Inc.
(8,084,680)
(111,000)
Alphatec
Holdings,
Inc.
(1,276,500)
(172,000)
Artivion,
Inc.
(3,677,360)
(11,800)
Ascendis
Pharma
A/S,
ADR
(1,384,848)
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2022
25
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Health
Care
-
(7.2)%
(continued)
(29,039)
Bridgebio
Pharma,
Inc.
$
(294,746)
(39,755)
CONMED
Corp.
(5,905,605)
(16,300)
Exact
Sciences
Corp.
(1,139,696)
(149,000)
Gossamer
Bio,
Inc.
(1,293,320)
(79,874)
Inotiv,
Inc.
(2,091,101)
(114,000)
Insmed,
Inc.
(2,679,000)
(262,500)
Invacare
Corp.
(370,125)
(14,147)
Jazz
Pharmaceuticals
PLC
(2,202,264)
(578,000)
MannKind
Corp.
(2,127,040)
(14,900)
Novocure,
Ltd.
(1,234,465)
(15,400)
NuVasive,
Inc.
(873,180)
(46,282)
Pacira
BioSciences,
Inc.
(3,532,242)
(91,300)
PetIQ,
Inc.
(2,227,720)
(69,500)
SmileDirectClub,
Inc.
(180,005)
(22,000)
Tabula
Rasa
HealthCare,
Inc.
(126,720)
(109,800)
Travere
Therapeutics,
Inc.
(2,829,546)
(266,549)
Varex
Imaging
Corp.
(5,674,828)
(51,318,564)
Industrials
-
(8.0)%
(51,300)
Bloom
Energy
Corp.,
Class A
(1,238,895)
(35,400)
Chart
Industries,
Inc.
(6,080,658)
(23,400)
CryoPort,
Inc.
(816,894)
(137,500)
GoPro,
Inc.,
Class A
(1,172,875)
(134,338)
Granite
Construction,
Inc.
(4,406,286)
(47,736)
II-VI,
Inc.
(3,460,383)
(23,471)
Itron,
Inc.
(1,236,452)
(16,700)
John
Bean
Technologies
Corp.
(1,978,449)
(6,500)
Kaman
Corp.
(282,620)
(208,191)
KBR,
Inc.
(11,394,293)
(11,250)
Mesa
Laboratories,
Inc.
(2,867,400)
(13,950)
Patrick
Industries,
Inc.
(841,185)
(231,662)
SMART
Global
Holdings,
Inc.
(5,983,830)
(95,901)
The
Greenbrier
Cos.,
Inc.
(4,939,861)
(28,500)
The
Middleby
Corp.
(4,672,290)
(124,500)
Vertex
Energy,
Inc.
(1,237,530)
(58,700)
Winnebago
Industries,
Inc.
(3,171,561)
(32,400)
Xometry,
Inc.,
Class A
(1,190,700)
(56,972,162)
Information
Technology
-
(11.1)%
(8,409)
Alteryx,
Inc.,
Class A
(601,496)
(10,700)
Avalara,
Inc.
(1,064,757)
(15,614)
Bandwidth,
Inc.,
Class A
(505,737)
(42,231)
Bentley
Systems,
Inc.,
Class B
(1,865,766)
(42,409)
BlackLine,
Inc.
(3,105,187)
(182,509)
Box,
Inc.
(5,303,712)
(9,342)
Coupa
Software,
Inc.
(949,427)
(14,054)
DigitalOcean
Holdings,
Inc.
(813,024)
(31,558)
Dropbox,
Inc.,
Class A
(733,723)
(33,400)
Envestnet,
Inc.
(2,486,296)
(133,492)
Evolent
Health,
Inc.,
Class A
(4,311,792)
(14,110)
Fastly,
Inc.,
Class A
(245,232)
(33,456)
Five9,
Inc.
(3,693,542)
(25,263)
Guidewire
Software,
Inc.
(2,390,385)
(7,408)
HubSpot,
Inc.
(3,518,356)
(89,290)
Impinj,
Inc.
(5,673,487)
(29,192)
LivePerson,
Inc.
(712,869)
(33,937)
Lumentum
Holdings,
Inc.
(3,312,251)
(20,000)
Magnite,
Inc.
(264,200)
(600)
MicroStrategy,
Inc.
(291,792)
(110,000)
Mitek
Systems,
Inc.
(1,613,700)
(110,274)
Model
N,
Inc.
(2,966,371)
(8,225)
New
Relic,
Inc.
(550,088)
(72,402)
Parsons
Corp.
(2,801,957)
(17,557)
Perficient,
Inc.
(1,932,850)
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
March
31,
2022
26
Absolute
Funds
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Information
Technology
-
(11.1)%
(continued)
(112,700)
Porch
Group,
Inc.
$
(782,701)
(57,389)
Progress
Software
Corp.
(2,702,448)
(60,100)
PROS
Holdings,
Inc.
(2,001,931)
(41,001)
Rapid7,
Inc.
(4,560,951)
(5,692)
Unity
Software,
Inc.
(564,703)
(181,700)
Veeco
Instruments,
Inc.
(4,940,423)
(46,000)
Verint
Systems,
Inc.
(2,378,200)
(90,496)
Veritone,
Inc.
(1,654,267)
(51,496)
Workiva,
Inc.
(6,076,528)
(147,222)
Zynga,
Inc.
(1,360,331)
(78,730,480)
Materials
-
(1.0)%
(164,000)
Century
Aluminum
Co.
(4,314,840)
(120,300)
SSR
Mining,
Inc.
(2,616,525)
(6,931,365)
Total
Common
Stock
(Proceeds
$(311,140,645))
(296,470,943)
Total
Short
Positions
-
(41.7)%
(Proceeds
$(311,140,645))
$
(296,470,943)
Absolute
Convertible
Arbitrage
Fund
Notes
to
Schedules
of
Investments
and
Securities
Sold
Short
March
31,
2022
27
Absolute
Funds
See
Notes
to
Financial
Statements.
At
March
31,
2022,
the
Fund
held
the
following
exchange
traded
futures
contracts:
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
liabilities
as
of
March
31,
2022.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
*
Other
Financial
Instruments
are
derivatives
not
reflected
in
the
Schedule
of
Investments,
such
as
futures,
which
are
valued
at
the
unrealized
appreciation/(depreciation)
at
year
end.
ADR
American
Depositary
Receipt
LLC
Limited
Liability
Company
PLC
Public
Limited
Company
(a)
All
or
a
portion
of
this
security
is
held
as
collateral
for
securities
sold
short.
(b)
Security
exempt
from
registration
under
Rule
144A
under
the
Securities
Act
of
1933.
At
the
period
end,
the
value
of
these
securities
amounted
to
$216,966,034
or
30.5%
of
net
assets.
(c)
Zero
coupon
bond.
Interest
rate
presented
is
yield
to
maturity.
(d)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2022.
Contracts
Description
Expiration
Date
Notional
Contract
Value
Value
Net
Unrealized
Appreciation
(700)
U.S.
Treasury
5
Year
Note
Future
06/30/22
$
(82,205,431)
$
(80,281,250)
$
1,924,181
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Corporate
Convertible
Bonds
$
–
$
658,744,675
$
–
$
658,744,675
Corporate
Non-Convertible
Bond
–
5,929,250
–
5,929,250
Money
Market
Fund
–
26,648,091
–
26,648,091
Investments
at
Value
$
–
$
691,322,016
$
–
$
691,322,016
Other
Financial
Instruments*
Futures
1,924,181
–
–
1,924,181
Total
Assets
$
1,924,181
$
691,322,016
$
–
$
693,246,197
Liabilities
Securities
Sold
Short
Common
Stock
$
(296,470,943)
$
–
$
–
$
(296,470,943)
Securities
Sold
Short
$
(296,470,943)
$
–
$
–
$
(296,470,943)
Total
Liabilities
$
(296,470,943)
$
–
$
–
$
(296,470,943)
ABSOLUTE
FUNDS
STATEMENTS
OF
ASSETS
AND
LIABILITIES
March
31,
2022
28
Absolute
Funds
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
ASSETS
Investments,
at
value
(Cost
$15,436,554,
$126,010,150
and
$689,910,478,
respectively)
$
14,964,812
$
141,984,741
$
691,322,016
Investments
in
affiliates,
at
value
(Cost
$13,060,077,
$0
and
$0,
respectively)
13,567,995
–
–
Total
investments
$
28,532,807
$
141,984,741
$
691,322,016
Cash
10
98,710
–
Deposits
with
broker
for
securities
sold
short
(a)
–
–
305,461,829
Deposits
with
broker
for
options
(b)
543,282
16,757,086
–
Deposits
with
broker
for
futures
(c)
1,411,267
–
6,400,739
Receivables:
Fund
shares
sold
–
780,944
2,900,348
Investment
securities
sold
180,514
555,596
4,045,672
Dividends
and
interest
36,523
72,581
2,443,966
Prepaid
expenses
12,956
13,648
20,554
Total
Assets
30,717,359
160,263,306
1,012,595,124
LIABILITIES
Call
options
written,
at
value
(Premiums
received
$59,179,
$5,225,927
and
$0,
respectively)
30,500
10,988,595
–
Put
options
written,
at
value
(Premiums
received
$149,285,
$2,115,486
and
$0,
respectively)
22,750
2,495,710
–
Securities
sold
short,
at
value
(Proceeds
$0,
$0
and
$311,140,645,
respectively)
–
–
296,470,943
Payables:
Investment
securities
purchased
–
215,766
3,551,859
Fund
shares
redeemed
31,462
98,562
381,857
Due
to
custodian
–
–
232
Dividends
on
securities
sold
short
–
–
58,542
Accrued
Liabilities:
Investment
adviser
fees
22,496
147,101
551,139
Fund
services
fees
11,783
9,837
48,098
Other
expenses
35,649
41,841
128,450
Total
Liabilities
154,640
13,997,412
301,191,120
NET
ASSETS
$
30,562,719
$
146,265,894
$
711,404,004
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
67,777,719
$
160,128,813
$
706,196,223
Distributable
earnings
(37,215,000)
(13,862,919)
5,207,781
NET
ASSETS
$
30,562,719
$
146,265,894
$
711,404,004
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
Institutional
Shares
4,321,018
14,497,267
61,225,835
Investor
Shares
–
–
2,752,671
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
Institutional
Shares
(based
on
net
assets
of
$30,562,719,
$146,265,894
and
$680,871,117,
respectively)
$
7.07
$
10.09
$
11.12
Investor
Shares
(based
on
net
assets
of
$0,
$0
and
$30,532,887,
respectively)
$
–
$
–
$
11.09
(a)
Broker
is
Wells
Fargo
&
Co.
and
Jefferies.
(b)
Broker
is
Citigroup
Global
Markets,
Inc.
in
the
Absolute
Strategies
Fund
and
Pershing
LLC
in
the
Absolute
Capital
Opportunities
Fund.
(c)
Broker
is
ED&F
Man
Capital
Markets,
Inc.
ABSOLUTE
FUNDS
STATEMENTS
OF
OPERATIONS
FOR
THE
YEAR
ENDED
MARCH
31,
2022
29
Absolute
Funds
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$11,734,
$5,498
and
$0,
respectively)
$
225,345
$
639,958
$
4,171
Interest
income
24,381
–
8,850,314
Total
Investment
Income
249,726
639,958
8,854,485
EXPENSES
Investment
adviser
fees
731,809
1,887,325
6,591,400
Fund
services
fees
59,319
117,750
429,724
Transfer
agent
fees:
Institutional
Shares
95,249
1,687
53,243
Investor
Shares
–
–
151
Distribution
fees:
Institutional
Shares
–
–
24,375
Custodian
fees
14,421
16,109
55,100
Registration
fees:
Institutional
Shares
24,846
29,936
51,658
Investor
Shares
–
–
8,042
Professional
fees
33,312
47,871
110,689
Trustees'
fees
and
expenses
4,720
5,990
11,979
Dividend
expense
on
securities
sold
short
–
–
510,343
Interest
expense
23,951
106,960
1,200,450
Other
expenses
95,486
123,959
580,273
Total
Expenses
1,083,113
2,337,587
9,627,427
Fees
waived
(294,109)
(216,003)
(1,300,864)
Net
Expenses
789,004
2,121,584
8,326,563
NET
INVESTMENT
INCOME
(LOSS)
(539,278)
(1,481,626)
527,922
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
(loss)
on:
Investments
in
unaffiliated
issuers
3,936,068
(2,107,500)
44,640,529
Investments
in
affiliated
issuers
1,292,559
–
–
Capital
gain
distributions
from
affiliate
222,498
–
–
Foreign
currency
transactions
(8,048)
–
–
Securities
sold
short
–
–
(35,490,099)
Written
options
709,179
5,870,212
–
Futures
(3,693,983)
–
3,381,816
Net
realized
gain
2,458,273
3,762,712
12,532,246
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
in
unaffiliated
issuers
(4,692,413)
(3,143,381)
(54,279,968)
Investments
in
affiliated
issuers
(1,950,050)
–
–
Foreign
currency
translations
(420)
(270)
–
Securities
sold
short
–
–
45,442,863
Written
options
155,214
(6,139,710)
–
Futures
335,648
–
1,436,446
Net
change
in
unrealized
appreciation
(depreciation)
(6,152,021)
(9,283,361)
(7,400,659)
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
(3,693,748)
(5,520,649)
5,131,587
INCREASE
(DECREASE)
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(4,233,026)
$
(7,002,275)
$
5,659,509
ABSOLUTE
FUNDS
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
30
Absolute
Funds
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
For
the
Years
Ended
March
31,
For
the
Years
Ended
March
31,
2022
2021
2022
2021
OPERATIONS
Net
investment
loss
$
(539,278)
$
(741,985)
$
(1,481,626)
$
(986,281)
Net
realized
gain
(loss)
2,458,273
(9,985,650)
3,762,712
(26,563,672)
Net
change
in
unrealized
appreciation
(depreciation)
(6,152,021)
6,049,069
(9,283,361)
29,979,713
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(4,233,026)
(4,678,566)
(7,002,275)
2,429,760
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(1,341,849)
–
–
(12,497,480)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
6,686,810
36,984,948
55,625,689
74,777,605
Reinvestment
of
distributions:
Institutional
Shares
1,319,672
–
–
12,193,376
Redemption
of
shares:
Institutional
Shares
(43,246,874)
(29,467,747)
(25,299,251)
(11,911,765)
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
(35,240,392)
7,517,201
30,326,438
75,059,216
Increase
(Decrease)
in
Net
Assets
(40,815,267)
2,838,635
23,324,163
64,991,496
NET
ASSETS
Beginning
of
Year
71,377,986
68,539,351
122,941,731
57,950,235
End
of
Year
$
30,562,719
$
71,377,986
$
146,265,894
$
122,941,731
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
900,005
4,472,113
5,379,652
6,597,114
Reinvestment
of
distributions:
Institutional
Shares
178,575
–
–
1,120,454
Redemption
of
shares:
Institutional
Shares
(5,817,170)
(3,594,603)
(2,449,086)
(1,022,296)
Increase
(Decrease)
in
Shares
(4,738,590)
877,510
2,930,566
6,695,272
ABSOLUTE
FUNDS
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
31
Absolute
Funds
See
Notes
to
Financial
Statements.
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
For
the
Years
Ended
March
31,
2022
2021
OPERATIONS
Net
investment
income
(loss)
$
527,922
$
(381,511)
Net
realized
gain
12,532,246
2,181,514
Net
change
in
unrealized
appreciation
(depreciation)
(7,400,659)
22,637,377
Increase
in
Net
Assets
Resulting
from
Operations
5,659,509
24,437,380
DISTRIBUTIONS
TO
SHAREHOLDERS
Institutional
Shares
(17,303,308)
(7,382,120)
Investor
Shares
(279,460)
–
Total
Distributions
Paid
(17,582,768)
(7,382,120)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
411,242,309
315,924,202
Investor
Shares
36,250,465
–
Reinvestment
of
distributions:
Institutional
Shares
15,535,771
6,662,266
Investor
Shares
279,460
–
Redemption
of
shares:
Institutional
Shares
(175,203,296)
(38,533,525)
Investor
Shares
(5,751,001)
–
Increase
in
Net
Assets
from
Capital
Share
Transactions
282,353,708
284,052,943
Increase
in
Net
Assets
270,430,449
301,108,203
NET
ASSETS
Beginning
of
Year
440,973,555
139,865,352
End
of
Year
$
711,404,004
$
440,973,555
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
36,522,582
28,186,467
Investor
Shares
3,245,120
–
Reinvestment
of
distributions:
Institutional
Shares
1,393,207
598,493
Investor
Shares
25,109
–
Redemption
of
shares:
Institutional
Shares
(15,583,932)
(3,438,031)
Investor
Shares
(517,558)
–
Increase
in
Shares
25,084,528
25,346,929
ABSOLUTE
FUNDS
FINANCIAL
HIGHLIGHTS
32
Absolute
Funds
See
Notes
to
Financial
Statements.
Investment
Operations
Distributions
to
Shareholders
from:
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period.
Period
Ended
Net
Asset
Value,
Beginning
of
Period
Net
Investment
Income
(Loss)(a)
Net
Realized
and
Unrealized
Gains
(Losses)
on
Investments
Total
from
Investment
Operations
Net
Investment
Income
Net
Realized
Gains
Total
Distribution
to
Shareholders
Net
Asset
Value,
End
of
Period
Total
Return
ABSOLUTE
STRATEGIES
FUND
INSTITUTIONAL
SHARES
3/31/2022
$
7.88
(
$
0.09)
(
$
0.53)
(
$
0.62)
(
$
0.19)
$
—
(
$
0.19)
$
7.07
(7.96)
%
3/31/2021
8.38
(
0.08)
(
0.42)
(
0.50)
—
—
—
7.88
(5.97)
3/31/2020
8.10
(
0.03)
0.32
0.29
(
0.01)
—
(
0.01)
8.38
3.54
3/31/2019
8.37
0.04
(
0.31)
(
0.27)
—
—
—
8.10
(3.23)
3/31/2018
8.76
(
0.07)
(
0.32)
(
0.39)
—
—
—
8.37
(4.45)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
INSTITUTIONAL
SHARES
3/31/2022
$
10.63
(
0.11)
(
0.43)
(
0.54)
—
—
—
10.09
(5.08)
3/31/2021
11.90
(
0.14)
0.82
0.68
(
0.00)
(c)
(
1.95)
(
1.95)
10.63
5.41
3/31/2020
11.50
0.04
0.36
0.40
—
—
—
11.90
3.48
3/31/2019
12.52
(
0.12)
(
0.13)
(
0.25)
—
(
0.77)
(
0.77)
11.50
(1.78)
3/31/2018
10.97
(
0.15)
1.70
1.55
—
—
—
12.52
14.13
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
INSTITUTIONAL
SHARES
3/31/2022
$
11.34
0.01
0.12
0.13
—
(
0.35)
(
0.35)
11.12
1.13
3/31/2021
10.32
(
0.02)
1.37
1.35
(
0.01)
(
0.32)
(
0.33)
11.34
13.12
3/31/2020
10.49
0.08
0.05
0.13
(
0.11)
(
0.19)
(
0.30)
10.32
1.18
3/31/2019
10.29
0.10
0.30
0.40
(
0.05)
(
0.15)
(
0.20)
10.49
3.95
3/31/2018(d)
10.00
0.02(e)
0.29(e)
0.31
—
(
0.02)
(
0.02)
10.29
3.14
(f)
INVESTOR
SHARES
3/31/2022(h)
$
11.34
0.00
0.10
0.10
—
(
0.35)
(
0.35)
11.09
0.86
(f)
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
(b)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
(c)
Amount
represents
less
than
$0.005.
(d)
Commencement
of
operations
was
August
14,
2017.
(e)
Net
investment
income
and
net
realized
and
unrealized
gain
(loss)
on
investments
for
the
period
ended
March
31,
2018
was
restated.
See
Note
2
of
the
March
31,
2018
Annual
Report.
(f)
Not
annualized.
(g)
Annualized.
(h)
Commencement
of
operations
was
April
1,
2021.
(
i
)
Portfolio
turnover
is
calculated
for
the
Fund
as
a
whole.
ABSOLUTE
FUNDS
FINANCIAL
HIGHLIGHTS
33
Absolute
Funds
See
Notes
to
Financial
Statements.
Ratios/Supplemental
Data
(Ratios
to
Average
Net
Assets)
Net
Assets,
End
of
Period
(000's)
Net
Investment
Income
(Loss)
Net
Expenses
Dividend
and
Interest
Expenses
Net
Expenses
without
Dividend
and
Interest
Expenses
Gross
Expenses(b)
Portfolio
Turnover
$
30,563
(1.15)%
1.69%
0.05%
1.64%
2.32%
11%
71,378
(0.97)
1.60
0.02
1.58
2.21
23
68,539
(0.42)
1.52
0.02
1.50
2.22
45
88,048
0.49
1.67
0.05
1.62
2.31
33
166,373
(0.87)
2.78
0.82
1.96
2.94
86
146,266
(1.10)%
1.57%
0.08%
1.49%
1.73%
30%
122,942
(1.22)
1.81
0.06
1.75
1.82
140
57,950
0.37
1.78
0.03
1.75
1.87
46
50,958
(0.99)
3.02
1.27
1.75
3.21
23
32,338
(1.30)
2.66
0.86
1.79
3.52
66
680,871
0.10%
1.51%
0.31%
1.20%
1.75%
4
5
%
440,974
(0.16)
1.68
0.38
1.30
1.88
93
139,865
0.77
1.59
0.07
1.52
1.78
95
88,768
0.95
1.91
0.31
1.60
2.16
121
56,065
0.35(
e
)(g)
2.23(g)
0.60(g)
1.63(g)
3.13(g)
76(f)
30,533
(0.01)%
(g)
1.77%
(g)
0.32%
(g)
1.45%
(g)
2.16%
(g)
4
5
%
(
i
)
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
34
Absolute
Funds
Note
1.
Organization
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund
(individually,
a
“Fund”
and
collectively,
the
“Funds”)
are
diversified
portfolios
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
each
Fund’s
shares
of
beneficial
interest
without
par
value.
Absolute
Strategies
Fund
currently
offers
Institutional
Shares.
Institutional
Shares
commenced
operations
on
July
11,
2005.
Absolute
Strategies
Fund
seeks
to
achieve
long-
term
capital
appreciation
with
an
emphasis
on
absolute
(positive)
returns
and
low
sensitivity
to
traditional
financial
market
indices,
such
as
the
S&P
500
Index.
Absolute
Capital
Opportunities
Fund
currently
offers
Institutional
Shares.
Absolute
Capital
Opportunities
Fund
commenced
operations
on
December
30,
2015.
Absolute
Capital
Opportunities
Fund
seeks
to
achieve
long-term
capital
appreciation
with
a
lower
sensitivity
to
traditional
financial
market
indices,
such
as
the
S&P
500
Index.
Absolute
Convertible
Arbitrage
Fund
currently
offers
Institutional
Shares
and
Investor
Shares.
Absolute
Convertible
Arbitrage
Fund
commenced
operations
on
August
14,
2017,
after
it
acquired
the
net
assets
of
the
Mohican
VCA
Fund,
LP,
a
privately
offered
hedge
fund
(the
“Predecessor
Fund”),
in
exchange
for
Fund
shares.
The
Predecessor
Fund
commenced
operations
in
2002.
Absolute
Convertible
Arbitrage
Fund
seeks
to
achieve
positive
absolute
returns
over
the
long-term
with
low
volatility
when
compared
to
traditional
market
indices.
The
Predecessor
Fund
had
an
investment
objective
and
strategies
that
were,
in
all
material
respects,
identical
to
those
of
the
Absolute
Convertible
Arbitrage
Fund.
On
August
14,
2017,
the
Predecessor
Fund
reorganized
into
the
Absolute
Convertible
Arbitrage
Fund.
The
reorganization
of
net
assets
from
this
transaction
was
as
follows:
In
addition
to
the
securities
transferred
in,
as
noted
above,
$5,895,941
of
cash
and
other
receivables
were
also
transferred
in
as
part
of
the
reorganization.
The
Absolute
Convertible
Arbitrage
Fund
Investor
Shares
commenced
operations
on
April
1,
2021.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Funds
are
investment
companies
and
follow
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
Accounting
Standards
Codification
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
each
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Futures
contracts
are
valued
at
the
day’s
settlement
price
on
the
exchange
where
the
contract
is
traded.
Forward
currency
contracts
are
generally
valued
based
on
interpolation
of
forward
curve
data
points
obtained
from
major
banking
institutions
that
deal
in
foreign
currencies
and
currency
dealers.
Exchange-traded
options
for
which
the
last
quoted
sale
price
is
outside
the
closing
bid
and
ask
price
will
be
valued
at
the
mean
of
the
closing
bid
and
ask
price.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
Date
of
Contribution
Net
Assets
Shares
Market
Value
of
Investments
August
14,
2017
$16,686,633
1,668,929
$10,790,692
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
35
Absolute
Funds
Each
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
3,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
each
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
each
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-
based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
NAV
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
each
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
each
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
March
31,
2022,
for
each
Fund’s
investments
is
included
in
each
Fund’s
Notes
to
Schedules
of
Investments,
Securities
Sold
Short
and
Call
and
Put
Options
Written.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
and
expense
are
recorded
on
the
ex-dividend
date.
Non-cash
dividend
income
is
recorded
at
the
fair
market
value
of
the
securities
received.
Foreign
dividend
income
and
expense
are
recorded
on
the
ex-dividend
date
or
as
soon
as
possible
after
determining
the
existence
of
a
dividend
declaration
after
exercising
reasonable
due
diligence.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Each
Fund
estimates
components
of
distributions
from
real
estate
investment
trusts
(“REITs”).
Distributions
received
in
excess
of
income
are
recorded
as
a
reduction
of
the
cost
of
the
related
investments.
Foreign
Currency
Translations
–
Foreign
currency
amounts
are
translated
into
U.S.
dollars
as
follows:
(1)
assets
and
liabilities
at
the
rate
of
exchange
at
the
end
of
the
respective
period;
and
(2)
purchases
and
sales
of
securities
and
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
36
Absolute
Funds
income
and
expenses
at
the
rate
of
exchange
prevailing
on
the
dates
of
such
transactions.
The
portion
of
the
results
of
operations
arising
from
changes
in
the
exchange
rates
and
the
portion
due
to
fluctuations
arising
from
changes
in
the
market
prices
of
securities
are
not
isolated.
Such
fluctuations
are
included
with
the
net
realized
and
unrealized
gain
or
loss
on
investments.
Foreign
Currency
Transactions
–
Each
Fund
may
enter
into
transactions
to
purchase
or
sell
foreign
currency
contracts
and
options
on
foreign
currency.
Forward
currency
contracts
are
agreements
to
exchange
one
currency
for
another
at
a
future
date
and
at
a
specified
price.
A
fund
may
use
forward
currency
contracts
to
facilitate
transactions
in
foreign
securities,
to
manage
a
fund’s
foreign
currency
exposure
and
to
protect
the
U.S.
dollar
value
of
its
underlying
portfolio
securities
against
the
effect
of
possible
adverse
movements
in
foreign
exchange
rates.
These
contracts
are
intrinsically
valued
daily
based
on
forward
rates,
and
a
fund’s
net
equity
therein,
representing
unrealized
gain
or
loss
on
the
contracts
as
measured
by
the
difference
between
the
forward
foreign
exchange
rates
at
the
dates
of
entry
into
the
contracts
and
the
forward
rates
at
the
reporting
date,
is
recorded
as
a
component
of
NAV.
These
instruments
involve
market
risk,
credit
risk,
or
both
kinds
of
risks,
in
excess
of
the
amount
recognized
in
the
Statements
of
Assets
and
Liabilities.
Risks
arise
from
the
possible
inability
of
counterparties
to
meet
the
terms
of
their
contracts
and
from
movement
in
currency
and
securities
values
and
interest
rates.
Due
to
the
risks
associated
with
these
transactions,
a
fund
could
incur
losses
up
to
the
entire
contract
amount,
which
may
exceed
the
net
unrealized
value
included
in
its
NAV.
Futures
Contracts
–
Each
Fund
may
purchase
futures
contracts
to
gain
exposure
to
market
changes,
which
may
be
more
efficient
or
cost
effective
than
actually
buying
the
securities.
A
futures
contract
is
an
agreement
between
parties
to
buy
or
sell
a
security
at
a
set
price
on
a
future
date.
Upon
entering
into
such
a
contract,
a
fund
is
required
to
pledge
to
the
broker
an
amount
of
cash,
U.S.
Government
obligations
or
other
high-quality
debt
securities
equal
to
the
minimum
“initial
margin”
requirements
of
the
exchange
on
which
the
futures
contract
is
traded.
Pursuant
to
the
contract,
the
Fund
agrees
to
receive
from
or
pay
to
the
broker
an
amount
of
cash
equal
to
the
daily
fluctuation
in
the
value
of
the
contract.
Such
receipts
or
payments
are
known
as
“variation
margin”
and
are
recorded
by
the
Fund
as
unrealized
gains
or
losses.
When
the
contract
is
closed,
the
Fund
records
a
realized
gain
or
loss
equal
to
the
difference
between
the
value
of
the
contract
at
the
time
it
was
opened
and
value
at
the
time
it
was
closed.
Risks
of
entering
into
futures
contracts
include
the
possibility
that
there
may
be
an
illiquid
market
and
that
a
change
in
the
value
of
the
contract
may
not
correlate
with
changes
in
the
value
of
the
underlying
securities.
Notional
amounts
of
each
individual
futures
contract
outstanding
as
of
March
31,
2022,
for
Absolute
Strategies
Fund
and
Absolute
Convertible
Arbitrage
Fund,
are
disclosed
in
the
Notes
to
Schedule
of
Investments
and
Securities
Sold
Short.
Securities
Sold
Short
–
Each
Fund
may
sell
a
security
short
to
increase
investment
returns.
Each
Fund
may
also
sell
a
security
short
in
anticipation
of
a
decline
in
the
market
value
of
a
security.
A
short
sale
is
a
transaction
in
which
the
Fund
sells
a
security
that
it
does
not
own.
To
complete
the
transaction,
the
Fund
must
borrow
the
security
in
order
to
deliver
it
to
the
buyer.
The
Fund
must
replace
the
borrowed
security
by
purchasing
it
at
market
price
at
the
time
of
replacement;
the
price
may
be
higher
or
lower
than
the
price
at
which
the
Fund
sold
the
security.
The
Fund
incurs
a
loss
from
a
short
sale
if
the
price
of
the
security
increases
between
the
date
of
the
short
sale
and
the
date
on
which
the
Fund
replaces
the
borrowed
security.
The
Fund
realizes
a
profit
if
the
price
of
the
security
declines
between
those
dates.
Until
the
Fund
replaces
the
borrowed
security,
the
Fund
will
maintain
on
its
books
and
records
cash
and
long
securities
to
sufficiently
cover
its
short
position
on
a
daily
basis.
The
collateral
for
the
securities
sold
short
includes
the
Deposits
with
Brokers
as
shown
on
the
Statements
of
Assets
and
Liabilities
and
the
securities
held
long
as
shown
on
the
Schedules
of
Investments.
Dividends
and
interest
paid
on
securities
sold
short
are
recorded
as
an
expense
on
the
Statements
of
Operations.
Purchased
Options
–
When
a
fund
purchases
an
option,
an
amount
equal
to
the
premium
paid
by
the
fund
is
recorded
as
an
investment
and
is
subsequently
adjusted
to
the
current
value
of
the
option
purchased.
If
an
option
expires
on
the
stipulated
expiration
date
or
if
the
fund
enters
into
a
closing
sale
transaction,
a
gain
or
loss
is
realized.
If
a
call
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
37
Absolute
Funds
option
is
exercised,
the
cost
of
the
security
acquired
is
increased
by
the
premium
paid
for
the
call.
If
a
put
option
is
exercised,
a
gain
or
loss
is
realized
from
the
sale
of
the
underlying
security,
and
the
proceeds
from
such
sale
are
decreased
by
the
premium
originally
paid.
Purchased
options
are
non-income
producing
securities.
The
values
of
each
individual
purchased
option
outstanding
as
of
March
31,
2022,
for
each
Fund,
if
any,
are
disclosed
in
each
Fund’s
Schedule
of
Investments.
Written
Options
–
When
a
fund
writes
an
option,
an
amount
equal
to
the
premium
received
by
the
fund
is
recorded
as
a
liability
and
is
subsequently
adjusted
to
the
current
value
of
the
option
written.
Premiums
received
from
writing
options
that
expire
unexercised
are
treated
by
the
fund
on
the
expiration
date
as
realized
gain
from
written
options.
The
difference
between
the
premium
and
the
amount
paid
on
effecting
a
closing
purchase
transaction,
including
brokerage
commissions,
is
also
treated
as
a
realized
gain,
or
if
the
premium
is
less
than
the
amount
paid
for
the
closing
purchase
transaction,
as
a
realized
loss.
If
a
call
option
is
exercised,
the
premium
is
added
to
the
proceeds
from
the
sale
of
the
underlying
security
in
determining
whether
the
fund
has
realized
a
gain
or
loss.
If
a
put
option
is
exercised,
the
premium
reduces
the
cost
basis
of
the
securities
purchased
by
the
fund.
The
fund,
as
writer
of
an
option,
bears
the
market
risk
of
an
unfavorable
change
in
the
price
of
the
security
underlying
the
written
option.
Written
options
are
non-income
producing
securities.
The
values
of
each
individual
written
option
outstanding
as
of
March
31,
2022,
for
each
Fund,
if
any,
are
disclosed
in
each
Fund’s
Schedule
of
Call
and
Put
Options
Written.
Restricted
Securities
–
Each
Fund
may
invest
in
securities
that
are
subject
to
legal
or
contractual
restrictions
on
resale
(“restricted
securities”).
Restricted
securities
may
be
resold
in
transactions
that
are
exempt
from
registration
under
the
Federal
securities
laws
or
if
the
securities
are
registered
to
the
public.
The
sale
or
other
disposition
of
these
securities
may
involve
additional
expenses
and
the
prompt
sale
of
these
securities
at
an
acceptable
price
may
be
difficult.
Information
regarding
restricted
securities
held
by
each
Fund
is
included
in
their
Schedule
of
Investments,
if
applicable.
When-Issued
Transactions
–
Each
Fund
may
purchase
securities
on
a
forward
commitment
or
‘when-issued’
basis.
A
fund
records
a
when-issued
transaction
on
the
trade
date
and
will
segregate
with
the
custodian
qualifying
assets
that
have
a
value
sufficient
to
make
payment
for
the
securities
purchased.
Securities
purchased
on
a
when-issued
basis
are
marked-to-market
daily
and
the
fund
begins
earning
interest
on
the
settlement
date.
Losses
may
arise
due
to
changes
in
the
market
value
of
the
underlying
securities
or
if
the
counterparty
does
not
perform
under
the
contract.
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
semi-annually.
Distributions
to
shareholders
of
net
capital
gains
and
foreign
currency
gains,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
each
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
each
Fund.
Federal
Taxes
–
Each
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
their
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
their
net
investment
income
and
capital
gains,
if
any,
the
Funds
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
Each
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
Each
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
March
31,
2022,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-recognition
or
disclosure.
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
38
Absolute
Funds
Absolute
Convertible
Arbitrage
Fund's
class-specific
expenses
are
charged
to
the
operations
of
that
class
of
shares.
Income
and
expenses
(other
than
expenses
attributable
to
a
specific
class)
and
realized
and
unrealized
gains
or
losses
on
investments
are
allocated
to
each
class
of
shares
based
on
the
class’
respective
net
assets
to
the
total
net
assets
of
the
Fund.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
each
Fund
enters
into
contracts
that
provide
general
indemnifications
by
each
Fund
to
the
counterparty
to
the
contract.
Each
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
each
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
Each
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
each
Fund’s
balance
sheet.
Note
3.
Fees
and
Expenses
Investment
Adviser
–
Absolute
Investment
Advisers
LLC
(the
“Adviser”)
is
the
investment
adviser
to
each
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee
from
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund
at
an
annual
rate
of
1.40%
and
1.20%,
respectively,
of
each
Fund’s
average
daily
net
assets.
For
the
period
April
1,
2021
through
December
31,
2021,
the
Adviser
received
an
advisory
fee
from
Absolute
Strategies
Fund
of
1.60%
of
Absolute
Strategies
Fund’s
average
daily
net
assets.
Effective
January
1,
2022,
the
Adviser
receives
an
advisory
fee
from
Absolute
Strategies
Fund
of
1.40%
of
Absolute
Strategies
Fund’s
average
daily
net
assets.
Each
sub-advisory
fee,
calculated
as
a
percentage
of
each
Fund’s
average
daily
net
assets
managed
by
each
subadviser,
is
paid
by
the
Adviser.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
each
Fund’s
distributor
(the
“Distributor”).
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Absolute
Convertible
Arbitrage
Fund
has
adopted
a
Distribution
Plan
(the
“Plan”)
for
Investor
Shares
of
the
Fund
in
accordance
with
Rule
12b-1
of
the
Act.
Under
the
Plan,
Investor
Shares
are
subject
to
a
Rule
12b-1
fee
of
up
to
0.25%
of
the
Investor
Shares
average
daily
net
assets.
The
Absolute
Strategies
Fund
and
Absolute
Capital
Opportunities
Fund
do
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Absolute
Strategies
Fund
and
Absolute
Capital
Opportunities
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services
to
the
Absolute
Strategies
Fund
and
Absolute
Capital
Opportunities
Fund.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
each
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statements
of
Operations.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
each
Fund
pays
Apex
customary
fees
for
its
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
each
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
Through
the
calendar
year
ended
December
31,
2021,
each
Independent
Trustee’s
annual
retainer
was
$31,000
($41,000
for
the
Chairman).
Effective
January
1,
2022,
each
Independent
Trustee’s
annual
retainer
is
$45,000
($55,000
for
the
Chairman),
and
the
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-pocket
expenses
incurred
in
connection
with
his
or
her
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
The
amount
of
Trustees’
fees
attributable
to
each
Fund
is
disclosed
in
the
Statements
of
Operations.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
each
Fund.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
39
Absolute
Funds
Note
4.
Expense
Reimbursement
and
Fees
Waived
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Absolute
Strategies
Fund
expenses
to
limit
total
annual
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Absolute
Strategies
Fund
as
a
result
of
the
Absolute
Strategies
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Strategies
Fund
to
1.99%,
through
August
1,
2023.
During
the
year,
Absolute
Strategies
Fund
invested
in
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
the
Absolute
Core
Strategy
ETF.
As
of
March
31,
2022,
Absolute
Strategies
Fund
owned
approximately
4.8%,
0.9%
and
0.5%
of
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Core
Strategy
ETF,
respectively.
The
Adviser
has
agreed
to
waive
fees
owed
to
it
by
the
Absolute
Strategies
Fund
in
an
amount
equal
to
the
fee
it
receives
from
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Core
Strategy
ETF
based
on
Absolute
Strategies
Fund’s
investment
in
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Core
Strategy
ETF.
For
the
year
ended
March
31,
2022,
the
Adviser
waived
fees
of
related
to
these
affiliated
investments
and
these
waivers
are
not
subject
to
recoupment.
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
expenses
to
limit
total
annual
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Capital
Opportunities
Fund
to
1.49%
through
August
1,
2022.
The
Adviser
waived
fees
of
$216,003
for
Absolute
Capital
Opportunities
Fund
for
the
year
ended
March
31,
2022.
The
Adviser
has
also
contractually
agreed
to
waive
its
fee
and/or
reimburse
expenses
to
limit
total
annual
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
dividend
and
interest
expenses
on
short
sales,
acquired
fund
fees
and
expenses,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Convertible
Arbitrage
Fund
to
1.20%
and
1.45%
of
the
Institutional
Shares
and
Investor
Shares,
respectively,
through
August
1,
2022.
The
Adviser
waived
fees
of
$1,262,396
and
$38,468
for
Absolute
Convertible
Arbitrage
Fund
Institutional
and
Investor
Shares,
respectively,
for
the
year
ended
March
31,
2022.
The
Funds
may
repay
the
Adviser
for
fees
waived
(other
than
advisory
fees
waived
by
the
Adviser
related
to
the
Absolute
Strategies
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser)
and
expenses
reimbursed
pursuant
to
the
expense
cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
total
annual
fund
operating
expenses
after
fee
waiver
and/or
expense
reimbursement
of
the
Funds
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
and
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
As
of
March
31,
2022,
$0,
$278,503
and
$1,881,543
for
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Convertible
Arbitrage
Fund,
respectively,
is
subject
to
recapture
by
the
Adviser.
Other
waivers
are
not
eligible
for
recoupment.
Note
5.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
year
ended
March
31,
2022
,
were
as
follows:
Non-U.S.
Government
Obligations
Purchases
Sales
Absolute
Strategies
Fund
$
3,687,923
$
44,554,929
Absolute
Capital
Opportunities
Fund
31,541,472
22,554,504
Absolute
Convertible
Arbitrage
Fund
522,815,469
228,282,363
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
40
Absolute
Funds
Note
6.
Summary
of
Derivative
Activity
The
volume
of
open
derivative
positions
may
vary
on
a
daily
basis
as
each
Fund
transacts
derivative
contracts
in
order
to
achieve
the
exposure
desired
by
the
Adviser.
The
notional
value
of
activity
for
the
year
ended
March
31,
2022
,
for
any
derivative
type
during
the
year
is
as
follows:
Each
Fund’s
use
of
derivatives
for
the
year
ended
March
31,
2022
,
was
limited
to
options
and
futures
contracts.
Following
is
a
summary
of
the
effect
of
derivatives
on
the
Statements
of
Assets
and
Liabilities
as
of
March
31,
2022
:
Absolute
Strategies
Fund
Absolute
Capital
Opportunities
Fund
Absolute
Convertible
Arbitrage
Fund
Absolute
Strategies
Fund
Absolute
Capital
Opportunities
Fund
Absolute
Convertible
Arbitrage
Fund
Futures
Contracts
$
3,566,533,429
$
–
$
314,871,731
Purchased
Options
16,042,589
50,105,310
–
Written
Options
(4,353,284)
(74,558,278)
–
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
–
purchased
options
$
418,450
Unrealized
appreciation
on
futures*
186,535
Total
asset
derivatives
$
604,985
Liability
derivatives:
Call
options
written
$
(30,500)
Put
options
written
(22,750)
Total
liability
derivatives
$
(53,250)
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
–
purchased
options
$
1,706,517
Liability
derivatives:
Call
options
written
$
(10,988,595)
Put
options
written
(2,495,710)
Total
liability
derivatives
$
(13,484,305)
Location:
Interest
Risk
Asset
derivatives:
Unrealized
appreciation
on
futures*
$
1,924,181
*
Balance
is
included
in
the
deposits
with
broker
for
futures
on
the
Statements
of
Assets
and
Liabilities.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
41
Absolute
Funds
Realized
and
unrealized
gains
and
losses
on
derivatives
contracts
for
the
year
ended
March
31,
2022
,
are
recorded
by
each
Fund
in
the
following
locations
on
the
Statements
of
Operations:
Absolute
Strategies
Fund
Absolute
Capital
Opportunities
Fund
Absolute
Convertible
Arbitrage
Fund
Location:
Equity
Contracts
Net
realized
gain
(loss)
on:
Investments
–
purchased
options
$
(2,104,357)
Written
options
709,179
Futures
(3,693,983)
Total
net
realized
gain
(loss)
$
(5,089,161)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
–
purchased
options
$
(323,296)
Written
options
155,214
Futures
335,648
Total
net
change
in
unrealized
appreciation
(depreciation)
$
167,566
Location:
Equity
Contracts
Net
realized
gain
(loss)
on:
Investments
$
(8,212,058)
Written
options
5,870,212
Total
net
realized
gain
(loss)
$
(2,341,846)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
$
(5,450,030)
Written
options
(6,139,710)
Total
net
change
in
unrealized
appreciation
(depreciation)
$
(11,589,740)
Location:
Interest
Contracts
Net
realized
gain
(loss)
on:
Futures
$
3,381,816
Total
net
realized
gain
(loss)
$
3,381,816
Net
change
in
unrealized
appreciation
(depreciation)
on:
Futures
$
1,436,446
Total
net
change
in
unrealized
appreciation
(depreciation)
$
1,436,446
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
42
Absolute
Funds
Asset
(Liability)
amounts
shown
in
the
table
below
represent
amounts
for
derivative
related
investments
at
March
31,
2022
.
These
amounts
may
be
collateralized
by
cash
or
financial
instruments.
Note
7.
Federal
Income
Tax
As
of
March
31,
2022,
cost
for
federal
income
tax
and
net
unrealized
appreciation
(depreciation)
consists
of:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
Gross
Asset
(Liability)
as
Presented
in
the
Statement
of
Assets
and
Liabilities
Derivatives
Available
for
Offset
Financial
Instruments
(Received)
Pledged*
Cash
Collateral
(Received)
Pledged*
Net
Amount
Absolute
Strategies
Fund
Assets:
Over-the-counter
derivatives**
$
418,450
$
–
$
–
$
–
$
418,450
Unrealized
appreciation
on
futures***
186,535
–
–
–
186,535
Liabilities:
Over-the-counter
derivatives**
(53,250)
–
53,250
–
–
Absolute
Capital
Opportunities
Fund
Assets:
Over-the-counter
derivatives**
1,706,517
–
–
–
1,706,517
Liabilities:
Over-the-counter
derivatives**
(13,484,305)
–
13,484,305
–
–
Absolute
Convertible
Arbitrage
Fund
Assets:
Unrealized
appreciation
on
futures***
1,924,181
–
–
–
1,924,181
*
The
actual
financial
instruments
and
cash
collateral
(received)
pledged
may
be
in
excess
of
the
amounts
shown
in
the
table.
The
table
only
reflects
collateral
amounts
up
to
the
amount
of
the
financial
instrument
disclosed
on
the
Statements
of
Assets
and
Liabilities.
**
Over-the-counter
derivatives
may
consist
of
options.
The
amounts
disclosed
above
represent
the
exposure
to
one
or
more
counterparties.
For
further
detail
on
individual
derivative
contracts
and
the
corresponding
unrealized
appreciation
(depreciation),
see
the
Schedule
of
Investments
and
Call
and
Put
Options
Written.
***
Balance
is
included
in
the
deposits
with
broker
for
futures
on
the
Statements
of
Assets
and
Liabilities.
Tax
Cost
of
Investments
Gross
Unrealized
Appreciation
Gross
Unrealized
Depreciation
Net
Unrealized
Appreciation
(Depreciation)
Absolute
Strategies
Fund
$
28,289,868
$
711,228
$
(521,539)
$
189,689
Absolute
Capital
Opportunities
Fund
120,895,802
22,773,896
(15,169,262)
7,604,634
Absolute
Convertible
Arbitrage
Fund
404,775,383
73,909,726
(83,834,036)
(9,924,310)
Ordinary
Income
Long-Term
Capital
Gain
Total
Absolute
Strategies
Fund
2022
$
1,341,849
$
–
$
1,341,849
2021
–
–
–
Absolute
Capital
Opportunities
Fund
2022
–
–
–
2021
12,275,193
222,287
12,497,480
Absolute
Convertible
Arbitrage
Fund
2022
271,581
17,311,187
17,582,768
2021
158,181
7,223,939
7,382,120
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
43
Absolute
Funds
As
of
March
31,
2022,
distributable
earnings
(accumulated
loss)
on
a
tax
basis
were
as
follows:
The
difference
between
components
of
distributable
earnings
on
a
tax
basis
and
the
amounts
reflected
in
the
Statements
of
Assets
and
Liabilities
are
primarily
due
to
return
of
capital
on
equity
securities,
convertible
bond
deemed
dividends,
wash
sales,
futures,
constructive
sales,
convertible
bond
premium
amortization,
straddles,
cover
loss
deferrals,
short
dividends
and
deferred
business
interest
expense.
As
of
March
31,
2022,
the
Absolute
Strategies
Fund
and
the
Absolute
Capital
Opportunities
Fund
have
$36,465,634
and
$21,037,623,
respectively
of
available
short-term
capital
loss
carryforwards
and
$814,745
and
$0,
respectively,
of
available
long-term
capital
loss
carryforwards
that
have
no
expiration
date.
For
tax
purposes,
the
current
deferred
late
year
ordinary
loss
was
$124,367
and
$277,616
for
the
Absolute
Strategies
Fund
and
Absolute
Capital
Opportunities
Fund,
respectively,
(realized
during
the
period
January
1,
2022
through
March
31,
2022).
These
losses
will
be
recognized
for
tax
purposes
on
the
first
business
day
of
the
Fund’s
next
fiscal
year,
April
1,
2022.
On
the
Statements
of
Assets
and
Liabilities,
as
a
result
of
permanent
book
to
tax
differences,
certain
amounts
have
been
reclassified
for
the
year
ended
March
31,
2022.
The
following
reclassifications
were
the
result
of
book
to
tax
differences
resulting
from
net
operating
loss
and
have
no
impact
on
the
net
assets
of
each
Fund.
Note
8.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
through
the
date
these
financial
statements
were
issued
have
been
evaluated
for
potential
impact,
and
each
Fund
has
had
no
such
events.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
Undistributed
Ordinary
Income
Undistributed
Long-Term
Gain
Capital
and
Other
Losses
Unrealized
Appreciation
(Depreciation)
Other
Temporary
Differences
Total
Absolute
Strategies
Fund
$
–
$
–
$
(37,404,746)
$
189,746
$
–
$
(37,215,000)
Absolute
Capital
Opportunities
Fund
–
–
(21,315,239)
7,604,551
(152,231)
(13,862,919)
Absolute
Convertible
Arbitrage
Fund
656,258
14,475,833
–
(9,924,310)
–
5,207,781
Distributable
Earnings
Paid-in-Capital
Absolute
Strategies
Fund
$
418,146
$
(418,146)
Absolute
Capital
Opportunities
Fund
1,410,002
(1,410,002)
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
44
Absolute
Funds
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
and
Absolute
Convertible
Arbitrage
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statements
of
assets
and
liabilities
of
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
and
Absolute
Convertible
Arbitrage
Fund,
each
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Funds”),
including
the
schedules
of
investments,
as
of
March
31,
2022,
and
the
related
statements
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended,
the
financial
highlights
as
noted
in
the
table
below,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Funds
as
of
March
31,
2022,
and
the
results
of
their
operations
for
the
year
then
ended,
the
changes
in
their
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
their
financial
highlights
for
each
of
the
periods
noted
in
the
table
below,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Funds'
management.
Our
responsibility
is
to
express
an
opinion
on
the
Funds’
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Funds
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Funds
are
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
their
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Funds’
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
March
31,
2022
by
correspondence
with
the
custodian,
brokers,
or
by
other
appropriate
auditing
procedures
where
replies
from
brokers
were
not
received.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
May
27,
2022
Financial
Highlights
Absolute
Strategies
Fund
For
each
of
the
years
in
the
five-year
period
ended
March
31,
2022
Absolute
Capital
Opportunities
Fund
For
each
of
the
years
in
the
five-year
period
ended
March
31,
2022
Absolute
Convertible
Arbitrage
Fund
Institutional
Class:
For
each
of
the
years
in
the
four-year
period
ended
March
31,
2022
and
for
the
period
August
14,
2017
(commencement
of
operations)
to
March
31,
2018
Investor
Class:
For
the
period
April
1,
2021
(commencement
of
operations)
to
March
31,
2022
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
45
Absolute
Funds
Investment
Advisory
Agreement
Approval
At
the
December
10,
2021
Board
meeting,
the
Board,
including
the
Independent
Trustees,
considered
the
approval
of
the
continuance
of
the
investment
advisory
agreement
between
Absolute
Investment
Advisers
LLC
(the
“Adviser”)
and
the
Trust
pertaining
to
the
Funds
(the
“Advisory
Agreement”)
and
the
subadvisory
agreements
between
the
Adviser
and
its
subadvisers,
Kovitz
Investment
Group
Partners,
LLC
and
St.
James
Investment
Company,
LLC
(the
“Subadvisers”)
(the
"Subadvisory
Agreements").
In
preparation
for
its
deliberations,
the
Board
requested
and
reviewed
written
responses
from
the
Adviser
and
Subadvisers
to
due
diligence
questionnaires
circulated
on
the
Board's
behalf
concerning
the
services
provided
by
the
Adviser
and
each
Subadviser.
The
Board
also
discussed
the
materials
with
Fund
counsel
and,
as
necessary,
with
the
Trust's
administrator.
During
its
deliberations,
the
Board
also
received
an
oral
presentation
from
the
Adviser
and
was
assisted
by
the
advice
of
Trustee
counsel.
At
the
meeting,
the
Board
reviewed,
among
other
matters:
(1)
the
nature,
extent
and
quality
of
the
services
provided
to
each
of
the
Funds
by
the
Adviser
and
Subadvisers,
including
information
on
the
investment
performance
of
each
Fund
and
Subadvisers;
(2)
the
costs
of
the
services
provided
and
profitability
to
the
Adviser
with
respect
to
its
relationship
with
each
of
the
Funds;
(3)
the
advisory
fee
and
net
expense
ratio
of
each
of
the
Funds
compared
to
those
of
relevant
peer
groups
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
each
of
the
Funds
grows
and
whether
the
advisory
fees
enable
each
of
the
Funds’
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
other
benefits
received
by
the
Adviser
and
Subadvisers
from
their
respective
relationships
with
the
Funds.
In
addition,
the
Board
recognized
that
the
evaluation
process
with
respect
to
the
Adviser
and
each
Subadviser
was
an
ongoing
one
and,
in
this
regard,
the
Board
considered
information
provided
by
the
Adviser,
including
about
Subadviser
performance,
at
regularly
scheduled
meetings
during
the
past
year.
Nature,
Extent
and
Quality
of
Services
Based
on
written
materials
received
from
the
Adviser
and
each
Subadviser,
a
presentation
from
senior
representatives
of
the
Adviser,
and
a
discussion
with
the
Adviser
about
the
personnel,
operations
and
financial
condition
of
the
Adviser
and
each
Subadviser,
the
Board
considered
the
quality
of
services
to
be
provided
by
the
Adviser
under
the
Advisory
Agreement
and
by
each
Subadviser
under
its
Subadvisory
Agreement.
In
this
regard,
the
Board
considered
information
regarding
the
experience,
qualifications
and
professional
background
of
the
portfolio
managers
and
other
personnel
at
the
Adviser
and
the
Subadvisers
with
principal
responsibility
for
the
Funds’
investments;
the
investment
philosophy
and
decision-making
processes
of
the
Adviser;
the
capability
and
integrity
of
the
Adviser’s
senior
management
and
staff;
the
quality
of
the
Adviser’s
and
each
Subadviser’s
services
with
respect
to
regulatory
compliance;
and
the
Adviser’s
and
each
Subadvisers’
representations
regarding
its
financial
condition,
including
that
each
firm’s
financial
condition
would
not
impair
its
ability
to
provide
high-quality
advisory
services
to
the
applicable
Fund.
The
Board
also
considered
the
Adviser’s
analysis
of
and
recommendations
regarding
each
Subadviser.
Based
on
the
presentation
and
the
materials
provided
by
the
Adviser
and
each
Subadviser,
among
other
relevant
considerations,
the
Board
concluded
that,
overall,
it
was
satisfied
with
the
nature,
extent
and
quality
of
services
provided
to
the
Funds
by
the
Adviser
under
the
Advisory
Agreement
and
each
Subadviser
under
its
Subadvisory
Agreement.
Performance
In
connection
with
a
presentation
by
the
Adviser
regarding
its
approach
to
managing
the
Funds,
including
the
Fund’s
investment
objectives
and
strategies
and
the
Adviser’s
assessment
of
the
Subadvisers’
services,
the
Board
reviewed
the
performance
of
the
Funds
compared
to
their
respective
benchmark
indices.
The
Board
observed
that
the
Strategies
Fund
underperformed
its
primary
benchmark
index,
the
S&P
500
Index,
for
the
one-,
three-,
five-,
and
10-year
periods
ended
September
30,
2021,
and
for
the
period
since
the
Strategies
Fund’s
inception
on
July
27,
2005.
The
Board
observed
that
the
Opportunities
Fund
underperformed
its
primary
benchmark
index,
the
HFRX
Equity
Hedge
Index,
for
the
one-,
three-,
and
five-year
periods
ended
September
30,
2021
and
outperformed
the
benchmark
for
the
period
since
the
Opportunities
Fund’s
inception
on
December
30,
2015.
The
Board
observed
that
the
Arbitrage
Fund
underperformed
its
primary
benchmark
index,
the
HFRX
Fixed
Income
Convertible
Arbitrage
Index,
for
the
one-,
three-,
and
five-year
periods
ended
September
30,
2021,
and
outperformed
the
primary
benchmark
index
for
the
10-
year
period
ended
September
30,
2021
and
for
the
period
since
the
Arbitrage
Fund’s
inception
on
September
30,
2002,
though
the
Board
noted
that
the
Arbitrage
Fund’s
performance
for
periods
prior
to
August
2017
was
that
of
the
Arbitrage
Fund’s
predecessor
private
fund.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
46
Absolute
Funds
The
Board
noted
the
Adviser’s
representation
that
it
was
not
the
objective
of
the
Funds
to
outperform
specific
market
indices
because
the
Funds
employ
unique
investment
strategies
that
are
intended
to
seek
positive
returns
over
a
complete
market
cycle,
including
in
particular
market
downturns,
irrespective
of
any
benchmark
or
market
performance.
The
Board
also
noted
the
Adviser’s
representation
that
the
performance
of
the
Strategies
Fund,
in
particular,
tends
to
deviate
from
the
performance
of
equity
indices,
in
part,
because
the
Strategies
Fund’s
portfolio
is
generally
comprised
of
a
balance
of
both
long
and
short
positions,
unlike
its
benchmark
index
and,
in
part,
because
the
Strategies
Fund’s
investment
strategies
include
a
countercyclical
component
that
is
designed
to
outperform
in
declining
markets
but
tends
to
cause
the
Strategies
Fund
to
underperform
in
rising
markets.
The
Board
then
considered
market
conditions
since
2008
and
noted
that,
during
that
time,
markets
have
tended
to
rise.
With
respect
to
the
Opportunities
Fund,
the
Board
noted
the
Adviser’s
representation
that
the
Opportunities
Fund’s
bias
toward
value
stocks
remained
out
of
favor
in
the
market,
as
growth
stocks
continued
to
outperform
value
stocks
during
the
periods
under
review.
The
Board
also
noted
the
Adviser’s
representation
that
the
Opportunities
Fund’s
underperformance
relative
to
its
primary
benchmark
index
could
also
be
attributed,
in
part,
to
the
Opportunities
Fund’s
secondary
bias
towards
long
volatility,
which
was
unable
to
generate
returns
during
the
latest
12-month
period.
With
respect
to
the
Arbitrage
Fund,
the
Board
noted
the
Adviser’s
representation
that,
unlike
the
Arbitrage
Fund,
the
hedge
funds
comprising
the
benchmark
index
utilized
leverage
when
deploying
their
convertible
arbitrage
strategies,
thereby
magnifying
gains
and
outperformance
relative
to
the
Arbitrage
Fund,
but
that
the
Adviser
was
nonetheless
pleased
with
the
Arbitrage
Fund’s
overall
performance
during
the
period
and
the
Arbitrage
Fund’s
low
sensitivity
to
interest
rates
relative
to
the
benchmark
index.
The
Board
also
considered
each
Fund’s
performance
relative
to
a
peer
group
of
funds
identified
by
Strategic
Insight
(“Strategic
Insight”)
as
having
characteristics
similar
to
those
of
the
applicable
Fund.
The
Board
observed
that
the
Strategies
Fund
underperformed
the
average
of
its
Strategic
Insight
peers
for
the
one-,
three-,
five-,
and
10-year
periods
ended
September
30,
2021.
The
Board
noted
the
Adviser’s
representation
that
its
unique
approach
to
managing
the
Strategies
Fund
made
it
difficult
to
identify
an
appropriate
peer
group,
as
well
as
the
Adviser’s
explanation
as
to
how
the
Strategic
Insight
peers
differed
from
the
Strategies
Fund.
The
Board
noted,
for
example,
that
the
Strategies
Fund’s
positioning
allowed
it
to
perform
well
during
broad
market
drawdowns,
such
as
the
first
quarter
of
2020,
but
perform
poorly
when
the
broader
markets
appreciate
significantly,
as
they
did
during
most
of
the
period
under
review.
The
Board
observed
that
the
Opportunities
Fund
underperformed
the
average
of
its
Strategic
Insight
peers
for
the
one-,
three-,
and
five-year
periods
ended
September
30,
2021.
The
Board
noted
the
Adviser’s
representation
that
the
Strategic
Insight
peers
were
not
the
most
suitable
comparison
for
the
Opportunities
Fund
due
to
the
Opportunities
Fund’s
lesser
relative
exposure
to
the
overall
equity
markets
and
the
existence
of
options
in
the
Opportunities
Fund’s
portfolio
that
provide
for
long
volatility
exposure,
allowing
the
Opportunities
Fund
to
outperform
in
difficult
market
environments,
such
as
the
first
quarter
of
2020,
but
underperform
in
rising
equity
markets
with
declining
volatility,
like
the
market
environment
over
the
last
year.
The
Board
also
observed
that
the
Arbitrage
Fund
underperformed
the
average
of
its
Strategic
Insight
peers
for
the
one-
,
three-,
and
five-year
periods
ended
September
30,
2021.
The
Board
noted
the
Adviser’s
representation
that,
within
the
Arbitrage
Fund’s
Strategic
Insight
peer
group,
there
was
only
one
other
mutual
fund
that
employed
a
pureplay
convertible
arbitrage
strategy
similar
to
that
of
the
Arbitrage
Fund,
whereas
the
majority
of
the
Strategic
Insight
peers
employ
a
mix
of
convertible
arbitrage,
global
macro,
and
long
credit
strategies
and,
as
a
result,
the
performance
of
the
Arbitrage
Fund
would
likely
be
different
from
the
Strategic
Insight
peers
over
any
period
of
time
as
a
result.
The
Board
also
considered
the
Adviser’s
assessment
of
each
Subadviser’s
performance,
noting
that
the
Adviser
had
expressed
satisfaction
with
the
performance
of
each
Subadviser.
The
Board
acknowledged
the
Adviser’s
representation
that
the
different
Subadvisers
could
be
expected
to
achieve
different
performance
results
in
light
of
the
differences
in
their
strategies,
allocated
assets,
and
market
environment.
The
Board
also
considered
the
Adviser’s
explanation
that,
standing
alone,
no
Subadviser
should
necessarily
be
expected
to
perform
in
line
with
the
market
or
with
the
relevant
Fund’s
benchmark
index(es).
In
this
regard,
the
Board
noted
the
Adviser’s
responsibility
for
allocating
the
Opportunities
Fund’s
and
Strategies
Fund’s
assets
among
one
or
more
Subadvisers
on
an
ongoing
basis
and
the
Adviser’s
active
management
of
a
separate
sleeve
of
the
portfolio
for
the
Strategies
Fund
in
order
for
the
Fund
to
achieve
its
investment
objective.
In
view
of
the
respective
roles
of
the
Adviser
and
Subadvisers,
the
Board
determined
that
it
was
appropriate
to
give
substantial
weight
to
the
Adviser’s
evaluation
of
the
contribution
of
each
Subadviser
to
the
performance
of
the
applicable
Fund
as
a
whole.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
47
Absolute
Funds
In
light
of
the
above
and
other
relevant
considerations,
the
Board
concluded
that
the
Funds
and
their
shareholders
could
benefit
from
the
Adviser’s
and
Subadvisers’
continued
management
of
the
Funds
under
the
Advisory
Agreement
and
each
of
the
Subadvisory
Agreements.
Compensation
The
Board
evaluated
the
Adviser's
compensation
for
providing
advisory
services
to
each
of
the
Funds
and
analyzed
comparative
information
on
the
actual
advisory
fee
rates
and
actual
total
expenses
of
the
relevant
Strategic
Insight
peer
group.
The
Board
observed
that
advisory
fee
rates
for
the
Arbitrage
Fund
and
Opportunities
Fund
were
each
higher
than
the
median
of
their
respective
Strategic
Insight
peer
groups
and
the
advisory
fee
rate
for
the
Strategies
Fund
was
lower
than
the
median
of
the
Strategic
Insight
peer
group.
The
Board
observed
that
the
net
expense
ratios
for
each
of
the
Arbitrage
Fund
and
Opportunities
Fund
were
lower
than
the
median
of
their
respective
Strategic
Insight
peer
groups
and
the
net
expense
ratio
for
the
Strategies
Fund
was
higher
than
the
median
of
its
Strategic
Insight
peer
group.
The
Board
considered
that
the
Adviser
had
imposed
contractual
expense
caps
on
the
total
expense
ratio
for
each
of
the
Funds
in
an
effort
to
ensure
that
the
expenses
of
the
Funds
remained
competitive.
With
respect
to
the
Opportunities
Fund,
the
Board
noted
that
its
contractual
advisory
fee
rate
had
been
lowered
in
2018
and
the
contractual
expense
cap
had
been
lowered
effective
November
25,
2020.
With
respect
to
the
Arbitrage
Fund,
the
Board
also
noted
that
its
contractual
advisory
fee
rate
had
been
lowered
effective
January
2,
2020,
and
that
its
contractual
expense
cap
for
Institutional
Shares
had
been
lowered
effective
April
12,
2021.
With
respect
to
the
Strategies
Fund,
the
Board
noted
that
the
Adviser
was
proposing
to
lower
the
contractual
advisory
fee
rate
from
1.60%
to
1.40%,
effective
January
1,
2022.
In
addition,
with
respect
to
the
Strategies
Fund,
the
Board
noted
that
the
Adviser
manages
an
ETF
with
an
investment
objective
that
is
substantially
similar
to
that
of
the
Strategies
Fund
but
that
pays
a
lower
advisory
fee
rate
and
has
a
lower
net
expense
ratio
than
the
Strategies
Fund.
However,
the
Board
noted
that
there
existed
several
differences
between
the
ETF
and
the
Strategies
Fund,
including
that
the
ETF
does
not
employ
a
multi-manager,
whereby
the
Adviser
is
responsible
for
continually
considering
the
appropriateness
of
revising
the
Fund’s
subadviser
line-up,
and
that
the
Adviser
does
not
actively
trade
a
sleeve
of
the
ETF.
The
Board
also
noted
the
Adviser’s
representation
that
the
fee
compression
in
the
ETF
industry
required
the
Adviser
to
accept
a
lower
advisory
fee
rate
for
the
ETF,
even
if
a
higher
fee
rate
would
be
fair
in
light
of
the
nature
and
quality
of
services
it
provides
to
the
ETF.
Further,
with
respect
to
all
of
the
Funds,
the
Board
recognized
that
the
Adviser’s
fees
do
not
include
performance
and
similar
fees
paid
by
hedge
funds
and
other
vehicles
with
which
the
Funds
compete
given
the
hedge
fund-like
nature
of
the
Funds’
strategies.
Finally,
the
Board
noted
that
the
Adviser
pays
each
Subadviser
out
of
its
advisory
fee.
Under
these
circumstances,
the
Board
concluded
that
it
was
difficult
to
make
meaningful
comparisons
between
the
Funds’
actual
advisory
fee
rates
and
net
expense
ratios
and
those
of
the
Funds’
respective
Strategic
Insight
peers
due
to,
among
other
things,
variations
between
the
services
provided
by
the
Adviser
to
the
Funds
and
those
provided
to
the
Strategic
Insight
peer
group
funds
by
their
advisers.
Based
on
the
foregoing
and
other
applicable
considerations,
the
Board
concluded
that
the
advisory
fee
rates
to
be
charged
to
the
Funds
under
the
Advisory
Agreement
appeared
to
be
reasonable.
Cost
of
Services
and
Profitability
The
Board
considered
information
provided
by
the
Adviser
regarding
the
costs
of
services
and
its
profitability
with
respect
to
each
of
the
Funds.
In
this
regard,
the
Board
considered
the
Adviser’s
resources
devoted
to
each
of
the
Funds
as
well
as
the
Adviser’s
discussion
of
the
costs
and
profitability
of
its
fund
activities,
including
the
percentage
and
amount
of
the
Adviser’s
fee
that
the
Adviser
retained
and
the
percentage
and
amount
of
the
Adviser’s
fee
that
was
paid
to
the
Subadvisers.
Based
on
these
and
other
applicable
considerations,
the
Board
concluded
that
the
Adviser’s
profits
attributable
to
the
management
of
each
of
the
Funds
were
reasonable.
The
Board
did
not
consider
information
regarding
the
costs
of
services
provided
or
profits
realized
by
each
Subadviser
from
its
relationship
with
the
Funds,
noting
instead
the
arms-length
nature
of
the
relationship
between
the
Adviser
and
the
Subadvisers
with
respect
to
the
negotiation
of
the
subadvisory
fee
rate
on
behalf
of
each
Fund
and
that
the
Adviser,
and
not
the
Fund,
was
responsible
for
paying
the
subadvisory
fees
due
under
each
Subadvisory
Agreement.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
48
Absolute
Funds
Under
these
circumstances,
the
Board
concluded
that
each
Subadviser’s
profitability
was
not
a
material
factor
in
determining
whether
to
approve
the
continuance
of
the
Subadvisory
Agreements.
Economies
of
Scale
The
Board
considered
whether
the
Funds
could
benefit
from
economies
of
scale.
In
this
regard,
the
Board
considered
the
fee
structure,
asset
size,
and
expense
cap
of
each
of
the
Funds.
The
Board
considered
the
Adviser’s
representation
that
each
of
the
Funds
could
potentially
benefit
from
economies
of
scale
as
assets
grow
and
noted
recent
actions
by
the
Adviser
to
lower
the
expense
caps
and
advisory
fee
rates
applicable
to
the
Funds.
With
respect
to
the
Strategies
Fund,
the
Board
noted
that
the
Fund’s
assets
had
declined
over
the
last
year
and
that
the
Adviser
was
proposing
to
lower
the
contractual
advisory
fee
rate
from
1.60%
to
1.40%,
effective
January
1,
2022.
With
respect
to
the
Opportunities
Fund,
the
Board
noted
the
current
low
relative
asset
level
of
the
Fund,
the
reduction
in
the
Adviser’s
contractual
advisory
fee
rate
in
2018,
and
the
reduction
in
the
expense
cap
from
1.75%
to
1.49%
that
took
effect
on
April
12,
2021.
With
respect
to
the
Arbitrage
Fund,
the
Board
noted
that
the
Adviser
had
reduced
the
advisory
fee
rate
from
1.40%
to
1.20%,
effective
December
23,
2019,
and
had
lowered
the
contractual
expense
cap
from
1.40%
to
1.20%,
effective
November
25,
2020.
Based
on
the
foregoing
and
other
applicable
considerations,
including
the
size
of
the
Funds,
the
Board
concluded
that
any
existing
economies
of
scale
were
addressed
in
the
Funds’
expense
cap
structure
and
that
the
information
presented
was
consistent
with
the
approval
of
the
Advisory
Agreement
at
current
fee
levels.
Other
Benefits
The
Board
noted
the
Adviser’s
representation
that,
aside
from
its
contractual
advisory
fees,
it
does
not
benefit
in
a
material
way
from
its
relationship
with
the
Funds.
Based
on
the
foregoing
representation,
the
Board
concluded
that
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Funds
were
not
a
material
factor
in
approving
the
Advisory
Agreement.
Conclusion
The
Board
did
not
identify
any
single
factor
as
being
of
paramount
importance,
and
different
Trustees
may
have
given
different
weight
to
different
factors.
When
considering
the
renewal
of
the
Subadvisory
Agreements,
the
Board
gave
significant
weight
to
the
Adviser’s
recommendation
that
each
Subadvisory
Agreement
be
renewed
and
to
the
Adviser’s
representation
that
the
reappointment
of
the
Subadvisers
would
positively
contribute
to
the
Adviser’s
successful
execution
of
those
sub-advised
Funds’
overall
strategies.
The
Board
reviewed
a
memorandum
from
Fund
counsel
discussing
the
legal
standards
applicable
to
its
consideration
of
the
Advisory
Agreement
and
Subadvisory
Agreements.
Based
on
its
review,
including
consideration
of
each
of
the
factors
referenced
above,
the
Board
determined,
in
the
exercise
of
its
reasonable
business
judgment,
that
the
advisory
arrangement,
as
outlined
in
the
Advisory
Agreement
and
in
each
Subadvisory
Agreement,
was
fair
and
reasonable
in
light
of
the
services
performed,
expenses
incurred
and
such
other
matters
as
the
Board
considered
relevant.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
each
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
each
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(888)
992-2765
and
on
the
U.S.
Securities
and
Exchange
Commission’s
(the
“SEC”)
website
at
www.sec.gov.
Each
Fund’s
proxy
voting
record
for
the
most
recent
twelve-month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(888)
992-2765
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
Each
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
49
Absolute
Funds
Shareholder
Expense
Example
As
a
shareholder
of
the
Funds
,
you
incur
ongoing
costs,
including
management
fees,
distribution
(12b-1)
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Funds
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
October
1,
2021
through
March
31,
2022.
Actual
Expenses
–
The
first
line
of
the
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
in
this
line,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
first
line
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
the
period.
Hypothetical
Example
for
Comparison
Purposes
–
The
second
line
of
the
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
each
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
each
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
each
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only.
Therefore,
the
second
line
of
the
table
is
useful
in
comparing
ongoing
costs
only
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
Federal
Tax
Status
of
Dividends
Declared
during
the
Fiscal
Year
For
federal
income
tax
purposes,
dividends
from
short-term
capital
gains
are
classified
as
ordinary
income.
The
Absolute
Strategies
Fund
designates
13.34
%
of
its
income
dividend
distributed
as
qualifying
for
the
corporate
dividends-received
deduction
(DRD)
and
27.02
%
for
the
qualified
dividend
rate
(QDI)
as
defined
in
section
1(h)(11)
of
the
Code.
The
Absolute
Strategies
Fund
also
designates
1
.
01
%
of
its
income
dividends
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
Beginning
Account
Value
October
1,
2021
Ending
Account
Value
March
31,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Absolute
Strategies
Fund
Actual
$
1,000.00
$
968.49
$
8.29
1.69%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,016.50
$
8.50
1.69%
Absolute
Capital
Opportunities
Fund
Actual
$
1,000.00
$
985.35
$
7.77
1.57%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,017.10
$
7.90
1.57%
Absolute
Convertible
Arbitrage
Fund
Institutional
Shares
Actual
$
1,000.00
$
1,001.57
$
7.54
1.51%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,017.40
$
7.59
1.51%
Investor
Shares
Actual
$
1,000.00
$
1,000.67
$
8.83
1.77%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,016.11
$
8.90
1.77%
*
Expenses
are
equal
to
the
Fund’s
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
the
number
of
days
in
the
most
recent
fiscal
half-year
(182)
divided
by
365
to
reflect
the
half-year
period.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
50
Absolute
Funds
The
Absolute
Convertible
Arbitrage
Fund
designates
100
.00
%
of
its
income
dividends
as
short-term
capital
dividends
exempt
from
U.S.
tax
for
foreign
shareholders
as
(QSD).
Pursuant
to
Section
852(b)(3)
of
the
Internal
Revenue
Code,
the
Absolute
Convertible
Arbitrage
Fund
designated
$17,311,187
as
long-term
capital
gain
dividends.
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
Each
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(888)
992-2765.
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-2008.
3
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
2017-
2021;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
3
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-2010.
3
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
3
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
51
Absolute
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.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
P.O.
BOX
588
PORTLAND,
MAINE
04112
(888)
992-2765
(TOLL
FREE)
(888)
99-ABSOLUTE
(TOLL
FREE)
INVESTMENT
ADVISER
Absolute
Investment
Advisers
LLC
4
North
Street,
Suite
2
Hingham,
Massachusetts
02043
www.absoluteadvisers.com
TRANSFER
AGENT
Apex
Fund
Services
P.O.
Box
588
Portland,
Maine
04112
(888)
992-2765
(Toll
Free)
(888)
99-ABSOLUTE
(Toll
Free)
www.apexgroup.com
DISTRIBUTOR
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
Maine
04101
www.foreside.com
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Funds.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Funds’
risks,
objectives,
fees
and
expenses,
experience
of
its
managements
and
other
information.
212-ANR-0322
Beck,
Mack
&
Oliver
LLC
Annual
Report
March
31,
2022
Beck,
Mack
&
Oliver
Partners
Fund
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
1
Dear
Fellow
Shareholder:
The
Beck,
Mack
&
Oliver
Partners
Fund
(the
“Partners
Fund”)
returned
+17.35%
net
of
fees
and
expenses
for
the
fiscal
year
ended
March
31,
2022
(the
“Fiscal
Year”),
resulting
in
a
net
asset
value
of
$19.68.
By
comparison,
during
the
Fiscal
Year,
the
S&P
500
Index
(the
��S&P
500”),
which
is
the
Partners
Fund’s
principal
benchmark,
returned
+15.65%.
Performance
Update
We
were
pleased
with
the
investment
performance
of
the
Partners
Fund
during
the
Fiscal
Year,
both
in
absolute
terms
and
relative
to
the
S&P
500.
Many
of
our
largest
positions
generated
outsized
total
returns,
and,
with
few
exceptions,
we
believe
that
our
portfolio
of
businesses
continues
to
compound
intrinsic
value
at
attractive
rates.
During
the
Fiscal
Year,
we
initiated
four
new
investments,
which
we
believe
have
improved
the
quality
of
the
portfolio.
The
Fiscal
Year
was
the
second
consecutive
fiscal
year
in
which
the
Partners
Fund
has
outperformed
the
S&P
500.
During
the
two-year
period
ended
March
31,
2022,
the
Partners
Fund
has
generated
a
cumulative
return
of
+113.55%
vs.
+80.81%
for
the
S&P
500.
Performance
data
quoted
represent
past
performance
and
are
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor's
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
Largest
Positive
&
Negative
Contributors
The
table
below
indicates
the
largest
positive
and
negative
contributors
to
investment
performance
as
well
as
the
total
returns
of
the
respective
securities
during
the
Fiscal
Year.
1
Largest
Positive
Contributors
Blackstone
(“BX”)
and
Credit
Acceptance
Corp.
(“CACC”)
have
been
core
positions
for
the
Partners
Fund
for
the
last
several
years,
and
we
have
written
about
these
investments
in
multiple
prior
shareholder
letters.
2
In
our
opinion,
both
BX
and
Apollo
Global
Management
(“APO”),
which
was
the
fifth
largest
positive
contributor
during
the
Fiscal
Year,
are
the
two
most
compelling
businesses
within
the
alternative
asset
management
industry,
which
continues
to
benefit
from
a
number
of
1
Contribution
refers
to
how
much
the
position
contributed
to,
or
detracted
from,
the
Partners
Fund’s
investment
performance
during
the
Fiscal
Year.
Total
return
refers
to
the
security’s
total
return
during
the
entire
Fiscal
Year.
2
For
instance,
please
see
the
shareholder
letter
for
the
semi-annual
period
ended
September
30,
2021
(“September
2021
Letter”),
for
a
discussion
of
CACC
and
BX.
Largest
Positive
Contributors
Largest
Negative
Contributors
Position
Contribution
Total
Return
Position
Contribution
Total
Return
Blackstone
+4.99%
+76.22%
Discovery
-1.71%
-32.31%
Credit
Acceptance
Corp.
+2.27%
+52.78%
Teva
Pharmaceutical
Industries
-0.69%
-18.63%
BlackBerry
+2.02%
-11.51%
Black
Knight
-0.60%
-21.62%
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
2
tailwinds.
We
have
been
impressed
in
particular
with
BX’s
ongoing
ability
to
scale
its
real
estate,
credit,
and
private
equity
platforms
and
with
the
growth
opportunities
created
by
APO’s
recently
closed
acquisition
of
Athene
Holding.
Separately,
CACC
continues
to
execute
extremely
well—with
strong
collections,
disciplined
underwriting,
and
significant
share
repurchases—in
what
is
a
challenging
competitive
environment.
Please
see
the
“Exited
Positions”
section
below
and
the
September
2021
Letter
for
a
discussion
of
BlackBerry.
Largest
Negative
Contributors
We
have
written
about
Discovery
(“DISCK”)
and
Teva
Pharmaceutical
Industries
(“TEVA”)
in
prior
shareholder
letters,
including
the
September
2021
Letter.
During
the
Fiscal
Year
DISCK
generated
a
total
shareholder
return
of
-32.31%,
which
was
disappointing
to
us,
but
for
context
the
stock
did
generate
a
total
shareholder
return
of
+110.32%
during
the
fiscal
year
ended
March
31,
2021.
We
attribute
much
of
the
stock’s
underperformance
during
the
Fiscal
Year
to
the
lengthy
regulatory
review
and
related
closing
processes
associated
with
the
company’s
merger
with
WarnerMedia,
which
was
announced
in
May
2021
and
closed
subsequent
to
the
end
of
the
Fiscal
Year.
This
transaction
brings
together
DISCK’s
nonfiction
and
lifestyle
assets—such
as
the
Discovery
Channel,
HGTV,
and
the
Food
Network—and
HBO,
TNT,
Warner
Bros.,
and
other
iconic
brands
from
WarnerMedia.
We
believe
that
this
combination
creates
a
content
powerhouse
capable
of
successfully
competing,
on
a
global
scale
and
in
both
linear
and
streaming
formats,
with
the
likes
of
Disney
and
Netflix.
We
further
believe
that
there
will
be
substantial
financial
value-creation
via
the
realization
of
expense
and
revenue
synergies,
cash
flow
optimization,
and
rapid
debt
paydown,
which
will,
in
time,
accrue
to
the
benefit
of
stockholders.
The
principal
overhang
on
TEVA’s
share
price
continues
to
be
the
opioid-related
litigation.
We
have
been
encouraged
by
recent
developments
in
the
litigation,
but
do
not
expect
the
overhang
to
be
lifted
until
the
litigation
is
definitively
resolved.
And
though
this
process
has
taken
significantly
longer
than
we
originally
anticipated,
our
expectation
today
is
that
its
conclusion
is
months
rather
than
years
away.
In
the
meantime,
we
have
been
pleased
with
the
performance
of
the
underlying
generic
pharmaceuticals
business
and
retain
a
great
deal
of
confidence
in
the
management
team.
Please
see
the
following
section
for
a
discussion
of
Black
Knight.
New
&
Exited
Positions
The
table
below
indicates
the
new
positions
that
were
initiated
and
the
positions
that
were
exited
during
the
Fiscal
Year.
New
Positions
Black
Knight
(“BKI”)
provides
software
and
related
technology
for
the
mortgage
origination
and
servicing
industry.
The
company
operates
the
largest
mortgage
servicing
platform,
which
generates
a
growing
stream
of
recurring
revenue
based
on
long-term
customer
relationships,
and
has
a
meaningful
opportunity
to
expand
the
market
share
of
its
mortgage
loan
origination
system,
the
adoption
of
which
can
substantially
reduce
the
amount
that
it
costs
a
customer
to
originate
a
mortgage.
These
origination
costs
have
risen
dramatically
over
the
last
15
years
or
so,
which
is
partly
a
result
of
greater
regulatory
burdens
faced
by
the
originators,
which
include
the
biggest
banks.
At
the
same
time,
technological
innovation
New
Positions
Exited
Positions
Arthur
J
Gallagher
Armstrong
World
Industries
Black
Knight
BlackBerry
CoStar
Group
Grifols
Tricon
Residential
Wabtec
Corp.
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
3
has
improved
the
functionality
of
Black
Knight’s
software-based
origination
system,
which
we
believe
will
lead
to
ongoing
customer
adoption.
CoStar
Group
(“CSGP”)
has
the
largest
repository
of
commercial
real
estate
data,
subscriptions
to
which
it
sells
to
a
broad
range
of
customers,
including
brokers,
owners,
lenders,
investors,
appraisers,
and
regulators.
The
company
also
operates
online
marketplaces
with
listings
of
apartment
vacancies
and
commercial
properties.
We
believe
that
each
of
these
businesses
benefits
from
CSGP’s
common
ownership
of
them,
as
data
from
one
can
enrich
the
services
of
the
others,
and
that
all
of
them
have
highly
compelling
long-term
growth
prospects.
We
had
followed
both
BKI
and
CSGP
for
a
period
of
time
prior
to
our
recent
investments
in
them.
In
each
case,
we
had
arrived
at
favorable
conclusions
regarding
the
core
business,
the
growth
opportunity,
and
the
quality
and
alignment
of
the
management
team,
but
hesitated
in
response
to
valuations
that
appeared
largely
to
reflect
these
conclusions.
Following
a
subsequent
decline
in
the
share
prices,
however,
we
re-underwrote
our
fundamental
investment
theses
and
were
excited
to
initiate
new
positions
in
what
we
believe
are
great
businesses
at
attractive
valuations.
Due
to
volatility
in
the
share
price
subsequent
to
our
initial
purchase,
we
bought
additional
shares
of
BKI
at
even
lower
prices.
We
discussed
our
new
investments
in
Arthur
J
Gallagher
and
Tricon
Residential
in
the
September
2021
Letter.
In
each
case,
we
are
happy
with
the
underlying
business
performance
and
total
shareholder
return.
Exited
Positions
Our
exits
from
Armstrong
World
Industries
(“AWI”)
and
Wabtec
Corp.
(“WAB”),
two
industrial
positions
that
we
initiated
in
calendar
2017,
were
motivated
primarily
by
the
need
to
fund
new
investments
rather
than
by
valuation
considerations
or
any
fundamental
changes
in
the
businesses.
We
simply
have
greater
conviction
elsewhere
in
the
portfolio,
including
in
other
industrial
investments.
For
instance,
during
the
Fiscal
Year
we
purchased
more
shares
of
both
Ashtead
Group
and
CAE.
3
By
contrast,
our
exit
from
BlackBerry,
which
we
discussed
in
the
September
2021
Letter,
was
prompted
by
an
extraordinary
increase
in
its
share
price;
and
our
exit
from
Grifols,
which
we
discussed
in
the
March
2021
Letter,
was
due
to
a
loss
of
conviction
in
the
investment
thesis.
Other
Portfolio
Observations
As
of
the
end
of
the
Fiscal
Year,
the
Partners
Fund
held
28
equity
positions,
with
the
10
largest
positions
representing
52.9%
of
net
assets.
This
compares
to
28
equity
positions,
with
the
10
largest
positions
representing
53.5%
of
net
assets,
as
of
March
31,
2021.
As
of
the
end
of
the
Fiscal
Year,
the
largest
sector
exposures
were
financials
(34.5%
of
net
assets),
information
technology
(18.0%),
and
communication
services
(13.8%),
and
cash
represented
less
than
1%
of
net
assets.
As
of
the
end
of
the
Fiscal
Year,
the
Partners
Fund
had
an
estimated
net
capital
loss
carryforwards
of
approximately
$8.2
million,
or
approximately
$2.70
per
share.
We
regard
this
loss
carryforwards
as
a
source
of
future
value
for
the
Partners
Fund’s
shareholders,
as
it
may
be
utilized
to
offset
future
realized
capital
gains.
3
Please
see
the
shareholder
letters
for
the
fiscal
year
ended
March
31,
2020,
and
for
the
fiscal
year
ended
March
31,
2021
(“the
March
2021
Letter),
respectively.
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
4
Outlook
&
Conclusion
In
the
September
2021
Letter,
we
observed
that
an
economy
characterized
by
faster
inflation
underscores
the
importance
of
owning
businesses
with
pricing
power,
which
tend
to
be
better
positioned
to
protect
their
profit
margins,
and
hence
their
rate
of
earnings
growth,
in
the
face
of
cost
pressures.
We
also
discussed
the
potential
for
higher
nominal
interest
rates
to
put
pressure
on
equity
valuations,
where
the
greatest
impact
would
likely
be
on
equities
that
trade
at
particularly
high
multiples
and/or
those
whose
projected
cash
flows
are
weighted
far
into
the
future.
We
believe
that
the
Partners
Fund’s
portfolio,
including
the
four
new
investments
mentioned
above,
comprises
businesses
that,
on
the
whole,
have
strong
pricing
power,
consistent
profitability,
and
valuations
that
range
from
cheap
to
reasonable.
We
spend
most
of
our
time
analyzing
businesses
and
picking
individual
stocks,
and
we
generally
eschew
prognosticating
about
the
near-term
direction
of
the
financial
markets
or
the
broader
economy.
For
one
thing,
we
believe
that
our
core
competence
resides
in
the
former,
so
we
allocate
our
time
in
such
a
way
as
to
maximize
our
competitive
advantage.
For
another,
the
successful
identification
of
great
businesses
at
reasonable
prices
should
itself
mitigate
the
impact
of
short-term
vagaries
of
the
market
or
the
economy
on
our
long-term
investment
returns.
We
nevertheless
closely
monitor
economic
and
market
conditions,
which
have
become
more
challenging
in
recent
months.
Inflation
has
accelerated
to
an
uncomfortable
rate,
which
has
prompted
the
Federal
Reserve
to
begin
to
change
US
monetary
policy.
We
believe
that
faster
inflation
will
manifest
in
a
number
of
ways,
including
credit
deterioration
among
lower-
income
households
and
volatility
in
foreign
exchange
markets.
We
further
believe
that
the
interest
rates
under
the
Federal
Reserve’s
control
may
not
quite
have
the
impact
on
inflation
that
they
have
had
in
prior
cycles,
as
changes
in
interest
rates
tend
to
discourage
consumption
and
investment
that
rely
on
debt
financing,
but
do
not
have
an
obvious
relationship
with
clogged
ports,
commodity
shortages,
or
scarce
labor.
Finally,
we
are
wary
of
the
Federal
Reserve’s
stated
intention
to
reduce
the
size
of
its
nearly
$9
billion
balance
sheet,
which
we
believe
is
fraught
not
only
with
uncertainty
regarding
its
practical
implementation
but
also
a
lack
of
conceptual
clarity
on
the
underlying
objective.
In
any
case,
we
expect
the
Federal
Reserve
to
raise
short-term
interest
rates
and
shrink
its
balance
sheet
at
least
until
the
occurrence
of
a
recession,
a
bear
market
or
other
financial
disturbance,
or
a
deceleration
of
inflation.
Thank
you
for
your
support.
Yours
sincerely,
Robert
C.
Beck
Richard
C.
Fitzgerald
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
5
Appendix:
Historical
Performance
Total
returns
for
the
Partners
Fund
and
the
S&P
500
for
the
periods
ended
March
31,
2022,
were
as
follows:
Performance
data
quoted
represent
past
performance
and
are
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
Shares
redeemed
or
exchanged
within
60
days
of
purchase
will
be
charged
a
2.00%
redemption
fee.
As
stated
in
the
current
prospectus,
the
Partners
Fund’s
annual
operating
expense
ratio
(gross)
is
1.86%
However,
the
Partners
Fund’s
adviser
has
agreed
to
contractually
waive
its
fees
and/or
reimburse
expenses
to
limit
total
operating
expenses
to
1.00%
through
at
least
July
31,
2022;
otherwise
performance
shown
would
have
been
lower.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
Returns
greater
than
one
year
are
annualized.
IMPORTANT
RISKS
AND
DISCLOSURE:
There
is
no
assurance
that
the
Partners
Fund
will
achieve
its
investment
objective.
An
investment
in
the
Partners
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal
amount
invested.
The
risks
associated
with
the
Partners
Fund
include:
equity
and
convertible
securities
risk,
foreign
securities
risk,
management
risk,
fixed
income
securities
risk,
noninvestment
grade
securities
risk,
liquidity
risk,
non-diversification
risk,
and
business
development
risk.
The
Partners
Fund
may
invest
in
small
and
mid-sized
capitalization
companies,
and
such
companies
may
carry
greater
risk
than
is
customarily
associated
with
larger
companies
for
various
reasons,
such
as
narrower
markets,
limited
financial
resources,
and
less
liquid
stock.
The
Partners
Fund
may
invest
in
large
capitalization
companies,
and
such
companies
may
underperform
other
segments
of
the
market
for
various
reasons,
such
as
lower
responsiveness
to
competitive
challenges
or
opportunities
and
an
inability
to
attain
high
growth
rates
during
periods
of
economic
expansion.
The
S&P
500
Index
is
a
broad-based,
unmanaged
measurement
of
changes
in
stock
market
conditions
based
on
the
average
of
500
widely
held
common
stocks.
The
total
returns
of
the
S&P
500
Index
and
of
the
Partners
Fund
include
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Partners
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
S&P
500
Index
does
not
include
expenses.
The
Partners
Fund
is
professionally
managed
while
the
S&P
500
Index
is
unmanaged
and
is
not
available
for
investment.
It
is
not
possible
to
invest
directly
in
an
index.
This
letter
may
contain
discussions
about
certain
investments
both
held
and
not
held
in
the
portfolio.
All
current
and
future
holdings
are
subject
to
risk
and
to
change.
The
views
in
this
report
were
those
of
the
Partners
Fund
managers
as
of
March
31,
2022,
and
may
not
reflect
their
views
on
the
date
this
report
is
first
published
or
any
time
thereafter.
These
views
are
intended
to
assist
shareholders
in
understanding
their
investment
in
the
Partners
Fund
and
do
not
constitute
investment
advice.
On
December
1,
2009,
a
limited
partnership
managed
by
the
adviser
reorganized
into
the
Partners
Fund.
The
predecessor
limited
partnership
maintained
an
investment
objective
and
investment
policies
that
were,
in
all
material
respects,
equivalent
to
those
of
the
Partners
Fund.
The
Partners
Fund’s
performance
for
the
periods
before
December
1,
2009,
is
that
of
the
Annualized
Returns
One
Year
Three
Years
Five
Years
Ten
Years
Since
Inception
April
19,
1991
Partners
Fund
+17.35%
+20.94%
+14.17%
+8.95%
+9.14%
S&P
500
+15.65%
+18.92%
+15.99%
+14.64%
+10.51%
Outlook
&
Conclusion
In
the
September
2021
Letter,
we
observed
that
an
economy
characterized
by
faster
inflation
underscores
the
importance
of
owning
businesses
with
pricing
power,
which
tend
to
be
better
positioned
to
protect
their
profit
margins,
and
hence
their
rate
of
earnings
growth,
in
the
face
of
cost
pressures.
We
also
discussed
the
potential
for
higher
nominal
interest
rates
to
put
pressure
on
equity
valuations,
where
the
greatest
impact
would
likely
be
on
equities
that
trade
at
particularly
high
multiples
and/or
those
whose
projected
cash
flows
are
weighted
far
into
the
future.
We
believe
that
the
Partners
Fund’s
portfolio,
including
the
four
new
investments
mentioned
above,
comprises
businesses
that,
on
the
whole,
have
strong
pricing
power,
consistent
profitability,
and
valuations
that
range
from
cheap
to
reasonable.
We
spend
most
of
our
time
analyzing
businesses
and
picking
individual
stocks,
and
we
generally
eschew
prognosticating
about
the
near-term
direction
of
the
financial
markets
or
the
broader
economy.
For
one
thing,
we
believe
that
our
core
competence
resides
in
the
former,
so
we
allocate
our
time
in
such
a
way
as
to
maximize
our
competitive
advantage.
For
another,
the
successful
identification
of
great
businesses
at
reasonable
prices
should
itself
mitigate
the
impact
of
short-term
vagaries
of
the
market
or
the
economy
on
our
long-term
investment
returns.
We
nevertheless
closely
monitor
economic
and
market
conditions,
which
have
become
more
challenging
in
recent
months.
Inflation
has
accelerated
to
an
uncomfortable
rate,
which
has
prompted
the
Federal
Reserve
to
begin
to
change
US
monetary
policy.
We
believe
that
faster
inflation
will
manifest
in
a
number
of
ways,
including
credit
deterioration
among
lower-
income
households
and
volatility
in
foreign
exchange
markets.
We
further
believe
that
the
interest
rates
under
the
Federal
Reserve’s
control
may
not
quite
have
the
impact
on
inflation
that
they
have
had
in
prior
cycles,
as
changes
in
interest
rates
tend
to
discourage
consumption
and
investment
that
rely
on
debt
financing,
but
do
not
have
an
obvious
relationship
with
clogged
ports,
commodity
shortages,
or
scarce
labor.
Finally,
we
are
wary
of
the
Federal
Reserve’s
stated
intention
to
reduce
the
size
of
its
nearly
$9
billion
balance
sheet,
which
we
believe
is
fraught
not
only
with
uncertainty
regarding
its
practical
implementation
but
also
a
lack
of
conceptual
clarity
on
the
underlying
objective.
In
any
case,
we
expect
the
Federal
Reserve
to
raise
short-term
interest
rates
and
shrink
its
balance
sheet
at
least
until
the
occurrence
of
a
recession,
a
bear
market
or
other
financial
disturbance,
or
a
deceleration
of
inflation.
Thank
you
for
your
support.
Yours
sincerely,
Robert
C.
Beck
Richard
C.
Fitzgerald
Beck,
Mack
&
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
(Unaudited)
March
31,
2022
6
limited
partnership
and
includes
the
expenses
of
the
limited
partnership,
which
were
lower
than
the
Partners
Fund’s
current
expenses,
except
for
2008
where
the
expenses
of
the
limited
partnership
were
higher.
The
performance
prior
to
December
1,
2009,
is
based
on
calculations
that
are
different
from
the
standardized
method
of
calculations
by
the
SEC.
If
the
limited
partnership’s
performance
had
been
readjusted
to
reflect
the
estimated
expenses
of
the
Partners
Fund
for
its
first
Fiscal
Year,
the
performance
would
have
been
lower.
The
limited
partnership
was
not
registered
under
the
Investment
Company
Act
of
1940
(“1940
Act”)
and
was
not
subject
to
certain
investment
limitations,
diversification
requirements,
and
other
restrictions
imposed
by
the
1940
Act
and
the
Internal
Revenue
Code
of
1986,
which,
if
applicable,
may
have
adversely
affected
its
performance.
Fund
holdings
and/or
sector
allocations
are
subject
to
change
at
any
time
and
should
not
be
considered
a
recommendation
to
buy
or
sell
any
security.
Current
and
future
holdings
are
subject
to
risk.
For
a
complete
list
of
fund
holdings,
please
refer
to
the
Schedule
of
Investments
in
this
report.
Beck,
Mack
&
Oliver
Partners
Fund
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2022
7
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
Beck,
Mack
&
Oliver
Partners
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
S&P
500®
Index
(the
“S&P
500”),
over
the
past
10
fiscal
years.
The
S&P
500
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
a
$10,000
Investment
Beck,
Mack
&
Oliver
Partners
Fund
vs.
S&P
500
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.86%.
However,
the
Fund’s
adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses
and
extraordinary
expenses)
to
1.00%,
through
at
least
July
31,
2022
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
During
the
year,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
Shares
redeemed
or
exchanged
within
60
days
of
purchase
will
be
charged
a
2.00%
redemption
fee.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2022
One
Year
Five
Year
Ten
Year
Beck
Mack
&
Oliver
Partners
Fund
17.35%
14.17%
8.95%
S&P
500®
Index
15.65%
15.99%
14.64%
Beck,
Mack
&
Oliver
Partners
Fund
PORTFOLIO
PROFILE
(Unaudited)
March
31,
2022
8
PORTFOLIO
HOLDINGS
%
of
Total
Investments
Beck,
Mack
&
Oliver
Partners
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2022
9
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
March
31,
2022.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
The
Level
1
value
displayed
in
this
table
includes
Common
Stock.
The
Level
2
value
displayed
in
this
table
includes
a
Money
Market
Fund.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
Shares
Security
Description
Value
Common
Stock
-
99.5%
Communication
Services
-
13.8%
1,300
Alphabet,
Inc.,
Class C
(a)
$
3,630,887
105,000
Discovery,
Inc.,
Class C
(a)
2,621,850
176,000
Lumen
Technologies,
Inc.
1,983,520
8,236,257
Consumer
Discretionary
-
2.3%
9,000
Hilton
Worldwide
Holdings,
Inc.
(a)
1,365,660
Energy
-
3.9%
70,000
Enterprise
Products
Partners
LP
1,806,700
10,000
Matador
Resources
Co.
529,800
2,336,500
Financials
-
34.5%
51,000
Apollo
Global
Management,
Inc.
3,161,490
13,000
Arthur
J
Gallagher
&
Co.
2,269,800
37,000
Blackstone,
Inc.,
Class A
4,696,780
6,000
Credit
Acceptance
Corp.
(a)
3,302,220
12,000
Enstar
Group,
Ltd.
(a)
3,133,800
16,000
JPMorgan
Chase
&
Co.
2,181,120
21,000
The
Charles
Schwab
Corp.
1,770,510
20,515,720
Health
Care
-
13.6%
6,000
Abbott
Laboratories
710,160
9,000
Laboratory
Corp.
of
America
Holdings
(a)
2,372,940
84,000
RadNet,
Inc.
(a)
1,879,080
215,000
Teva
Pharmaceutical
Industries,
Ltd.,
ADR
(a)
2,018,850
3,500
Waters
Corp.
(a)
1,086,365
8,067,395
Industrials
-
10.2%
10,000
Advanced
Drainage
Systems,
Inc.
1,188,100
36,000
Ashtead
Group
PLC
2,275,200
100,000
CAE,
Inc.
(a)
2,608,000
6,071,300
Information
Technology
-
18.0%
30,000
Black
Knight,
Inc.
(a)
1,739,700
10,000
CoStar
Group,
Inc.
(a)
666,100
26,000
Fiserv,
Inc.
(a)
2,636,400
6,750
Mastercard,
Inc.,
Class A
2,412,315
10,500
Microsoft
Corp.
3,237,255
10,691,770
Materials
-
1.6%
3,900
The
Sherwin-Williams
Co.
973,518
Real
Estate
-
1.6%
60,000
Tricon
Residential,
Inc.
952,800
Total
Common
Stock
(Cost
$37,977,263)
59,210,920
Shares
Security
Description
Value
Money
Market
Fund
-
0.4%
215,608
First
American
Government
Obligations
Fund,
Class X,
0.19%
(b)
(Cost
$215,608)
$
215,608
Investments,
at
value
-
99.9%
(Cost
$38,192,871)
$
59,426,528
Other
Assets
&
Liabilities,
Net
-
0.1%
56,657
Net
Assets
-
100.0%
$
59,483,185
ADR
American
Depositary
Receipt
LP
Limited
Partnership
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
(b)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2022.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
59,210,920
Level
2
-
Other
Significant
Observable
Inputs
215,608
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
59,426,528
Beck,
Mack
&
Oliver
Partners
Fund
STATEMENT
OF
ASSETS
AND
LIABILITIES
March
31,
2022
10
See
Notes
to
Financial
Statements.
*
Shares
redeemed
or
exchanged
within
60
days
of
purchase
are
charged
a
2.00%
redemption
fee.
ASSETS
Investments,
at
value
(Cost
$38,192,871)
$
59,426,528
Receivables:
Fund
shares
sold
6,498
Investment
securities
sold
107,136
Dividends
2,978
Prepaid
expenses
10,292
Total
Assets
59,553,432
LIABILITIES
Payables:
Fund
shares
redeemed
5,200
Accrued
Liabilities:
Investment
adviser
fees
16,847
Fund
services
fees
15,010
Other
expenses
33,190
Total
Liabilities
70,247
NET
ASSETS
$
59,483,185
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
45,531,843
Distributable
earnings
13,951,342
NET
ASSETS
$
59,483,185
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
3,022,375
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE*
$
19.68
Beck,
Mack
&
Oliver
Partners
Fund
STATEMENT
OF
OPERATIONS
FOR
THE
YEAR
ENDED
MARCH
31,
2022
11
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$2,280)
$
769,654
Interest
income
203
Total
Investment
Income
769,857
EXPENSES
Investment
adviser
fees
592,048
Fund
services
fees
180,104
Custodian
fees
10,227
Registration
fees
21,735
Professional
fees
37,287
Trustees'
fees
and
expenses
4,790
Other
expenses
88,602
Total
Expenses
934,793
Fees
waived
(342,745)
Net
Expenses
592,048
NET
INVESTMENT
INCOME
177,809
NET
REALIZED
AND
UNREALIZED
GAIN
Net
realized
gain
on:
Investments
4,746,114
Foreign
currency
transactions
14
Net
realized
gain
4,746,128
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
3,222,907
NET
REALIZED
AND
UNREALIZED
GAIN
7,969,035
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
8,146,844
Beck,
Mack
&
Oliver
Partners
Fund
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
12
See
Notes
to
Financial
Statements.
For
the
Years
Ended
March
31,
2022
2021
OPERATIONS
Net
investment
income
$
177,809
$
299,581
Net
realized
gain
4,746,128
3,281,022
Net
change
in
unrealized
appreciation
(depreciation)
3,222,907
18,045,226
Increase
in
Net
Assets
Resulting
from
Operations
8,146,844
21,625,829
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
–
(226,061)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
14,461,428
2,122,530
Reinvestment
of
distributions
–
207,017
Redemption
of
shares
(10,612,972)
(3,428,732)
Redemption
fees
24,265
1,706
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
3,872,721
(1,097,479)
Increase
in
Net
Assets
12,019,565
20,302,289
NET
ASSETS
Beginning
of
Year
47,463,620
27,161,331
End
of
Year
$
59,483,185
$
47,463,620
SHARE
TRANSACTIONS
Sale
of
shares
726,905
146,695
Reinvestment
of
distributions
–
15,177
Redemption
of
shares
(534,766)
(261,730)
Increase
(Decrease)
in
Shares
192,139
(99,858)
Beck,
Mack
&
Oliver
Partners
Fund
FINANCIAL
HIGHLIGHTS
13
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
March
31,
2022
2021
2020
2019
2018
NET
ASSET
VALUE,
Beginning
of
Year
$
16.77
$
9.27
$
11.24
$
11.56
$
10.26
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.06
0.10
0.12
0.14
0.13
Net
realized
and
unrealized
gain
(loss)
2.84
7.48
(2.03)
(0.46)
1.18
Total
from
Investment
Operations
2.90
7.58
(1.91)
(0.32)
1.31
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
–
(0.08)
(0.06)
–
(0.01)
Total
Distributions
to
Shareholders
–
(0.08)
(0.06)
–
(0.01)
REDEMPTION
FEES(a)
0.01
0.00(b)
0.00(b)
0.00(b)
0.00(b)
NET
ASSET
VALUE,
End
of
Year
$
19.68
$
16.77
$
9.27
$
11.24
$
11.56
TOTAL
RETURN
17.35%
81.97%
(17.17)%
(2.77)%
12.77%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
59,483
$
47,464
$
27,161
$
36,760
$
38,368
Ratios
to
Average
Net
Assets:
Net
investment
income
0.30%
0.82%
1.01%
1.19%
1.17%
Net
expenses
1.00%
1.00%
1.00%
1.00%
1.00%
Gross
expenses
(c)
1.58%
1.86%
1.80%
1.74%
1.76%
PORTFOLIO
TURNOVER
RATE
15%
18%
10%
17%
19%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
(b)
Less
than
$0.01
per
share.
(c)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
14
Note
1.
Organization
The
Beck,
Mack
&
Oliver
Partners
Fund
(the
“Fund”)
is
a
non-diversified
portfolio
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
the
Fund’s
shares
of
beneficial
interest
without
par
value.
The
Fund
commenced
operations
on
December
1,
2009,
after
it
acquired
the
net
assets
of
BMO
Partners
Fund,
L.P.
(the
“Partnership”),
in
exchange
for
Fund
shares.
The
Partnership
commenced
operations
in
1991.
The
Fund
seeks
long-term
capital
appreciation
with
the
preservation
of
capital.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
Accounting
Standards
Codification
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
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.
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
15
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
NAV
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
March
31,
2022,
for
the
Fund’s
investments
is
included
at
the
end
of
the
Fund’s
schedule
of
investments.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Foreign
dividend
income
is
recorded
on
the
ex-
dividend
date
or
as
soon
as
possible
after
determining
the
existence
of
a
dividend
declaration
after
exercising
reasonable
due
diligence.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Distributions
to
Shareholders
–
The
Fund
declares
any
dividends
from
net
investment
income
and
pays
them
annually.
Any
net
capital
gains
and
net
foreign
currency
gains
realized
by
the
Fund
are
distributed
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
Federal
Taxes
–
The
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income
and
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
16
capital
gains,
if
any,
the
Fund
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
The
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
The
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
March
31,
2022,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-recognition
or
disclosure.
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
Redemption
Fees
–
A
shareholder
who
redeems
or
exchanges
shares
within
60
days
of
purchase
will
incur
a
redemption
fee
of
2.00%
of
the
current
NAV
of
shares
redeemed
or
exchanged,
subject
to
certain
limitations.
The
fee
is
charged
for
the
benefit
of
the
remaining
shareholders
and
will
be
paid
to
the
Fund
to
help
offset
transaction
costs.
The
fee
is
accounted
for
as
an
addition
to
paid-in
capital.
The
Fund
reserves
the
right
to
modify
the
terms
of
or
terminate
the
fee
at
any
time.
There
are
limited
exceptions
to
the
imposition
of
the
redemption
fee.
Redemption
fees
incurred
for
the
Fund,
if
any,
are
reflected
on
the
Statements
of
Changes
in
Net
Assets.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
the
Fund
enters
into
contracts
that
provide
general
indemnifications
by
the
Fund
to
the
counterparty
to
the
contract.
The
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
the
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
The
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
the
Fund’s
balance
sheet.
Note
3.
Fees
and
Expenses
Investment
Adviser
–
Beck,
Mack
&
Oliver
LLC
(the
“Adviser”)
is
the
investment
adviser
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee,
payable
monthly,
from
the
Fund
at
an
annual
rate
of
1.00%
of
the
Fund’s
average
daily
net
assets.
Distribution
–
Foreside
Fund
Services,
LLC
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.
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
17
Trustees
and
Officers
–
Through
the
calendar
year
ended
December
31,
2021,
each
Independent
Trustee’s
annual
retainer
was
$31,000
($41,000
for
the
Chairman).
Effective
January
1,
2022,
each
Independent
Trustee’s
annual
retainer
is
$45,000
($55,000
for
the
Chairman),
and
the
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-
pocket
expenses
incurred
in
connection
with
his
or
her
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
The
amount
of
Trustees’
fees
attributable
to
the
Fund
is
disclosed
in
the
Statement
of
Operations.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
the
Fund.
Note
4.
Expense
Reimbursement
and
Fees
Waived
The
Adviser
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses
and
extraordinary
expenses
)
to
1.00%
,
through
at
least
July
31,
2022.
During
the
year
ended
March
31,
2022,
fees
waived
were
$342,7
45.
Note
5.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments,
during
the
year
ended
March
31,
2022
were
$13,225,434
and
$8,863,012
respectively.
Note
6.
Federal
Income
Tax
As
of
March
31,
2022,
the
cost
of
investments
for
federal
income
tax
purposes
is
$37,336,318 and
the
components
of
net
unrealized appreciation were
as
follows:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
As
of
March
31,
2022,
distributable
earnings
(accumulated
loss)
on
a
tax
basis
were
as
follows:
Gross
Unrealized
Appreciation
$
25,414,752
Gross
Unrealized
Depreciation
(3,324,542)
Net
Unrealized
Appreciation
$
22,090,210
Ordinary
Income
2022
$
0
2021
226,061
Undistributed
Ordinary
Income
$
17,575
Capital
and
Other
Losses
(8,156,443)
Unrealized
Appreciation
22,090,210
Total
$
13,951,342
Beck,
Mack
&
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
18
The
difference
between
components
of
distributable
earnings
on
a
tax
basis
and
the
amounts
reflected
in
the
Statement
of
Assets
and
Liabilities
are
primarily
due
to
partnerships,
wash
sales
and
return
of
capital
on
equity
securities.
As
of
March
31,
2022,
the
Fund
had
$4,
607
,
580
of
available
short-term
capital
loss
carryforwards
and
$
3
,
54
8
,
863
of
available
long-term
capital
loss
carryforwards
that
have
no
expiration
date.
On
the
Statement
of
Assets
and
Liabilities,
as
a
result
of
permanent
book
to
tax
differences,
certain
amounts
have
been
reclassified
for
the
year
ended
March
31,
2022
.
The
following
reclassification
was
the
result
of
investments
in
partnerships
and
has
no
impact
on
the
net
assets
of
the
Fund.
Note
7.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
through
the
date
these
financial
statements
were
issued
have
been
evaluated
for
potential
impact,
and
the
Fund
has
had
no
such
events.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
Distributable
Earnings
$
168
Paid-in-Capital
(168)
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
19
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Beck,
Mack
&
Oliver
Partners
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
Beck,
Mack
&
Oliver
Partners
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedule
of
investments,
as
of
March
31,
2022,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
March
31,
2022,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
March
31,
2022
by
correspondence
with
the
custodian.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
May
27,
2022
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
20
Investment
Advisory
Agreement
Approval
At
the
March
18,
2022
Board
meeting,
the
Board,
including
the
Independent
Trustees,
considered
the
approval
of
the
continuance
of
the
investment
advisory
agreement
between
the
Adviser
and
the
Trust
pertaining
to
the
Fund
(the
“Advisory
Agreement”).
In
preparation
for
its
deliberations,
the
Board
requested
and
reviewed
written
responses
from
the
Adviser
to
a
due
diligence
questionnaire
circulated
on
the
Board’s
behalf
concerning
the
services
provided
by
the
Adviser.
The
Board
also
discussed
the
materials
with
Fund
counsel
and,
as
necessary,
with
the
Trust’s
administrator.
During
its
deliberations,
the
Board
received
an
oral
presentation
from
the
Adviser,
and
was
advised
by
Trustee
counsel.
At
the
meeting,
the
Board
reviewed,
among
other
matters:
(1)
the
nature,
extent
and
quality
of
the
services
provided
to
the
Fund
by
the
Adviser,
including
information
on
the
investment
performance
of
the
Fund
and
Adviser;
(2)
the
costs
of
the
services
provided
and
profitability
to
the
Adviser
of
its
relationship
with
the
Fund;
(3)
the
advisory
fee
and
total
expense
ratio
of
the
Fund
compared
to
a
relevant
peer
group
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
the
Fund
grows
and
whether
the
advisory
fees
enable
the
Fund’s
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Fund.
In
addition,
the
Board
recognized
that
the
evaluation
process
with
respect
to
the
Adviser
was
an
ongoing
one
and,
in
this
regard,
the
Board
considered
information
provided
by
the
Adviser
at
regularly
scheduled
meetings
during
the
past
year.
Nature,
Extent
and
Quality
of
Services
Based
on
written
materials
received,
a
presentation
from
senior
representatives
of
the
Adviser,
and
a
discussion
with
the
Adviser
regarding
the
Adviser’s
personnel,
operations
and
financial
condition,
the
Board
considered
the
quality
of
services
provided
by
the
Adviser
under
the
Advisory
Agreement.
In
this
regard,
the
Board
considered
information
regarding
the
experience,
qualifications
and
professional
background
of
the
portfolio
managers
at
the
Adviser
with
principal
responsibility
for
the
Fund's
investments
as
well
as
the
investment
philosophy
and
decision-making
processes
of
the
Adviser
and
the
capability
and
integrity
of
the
Adviser’s
senior
management
and
staff.
The
Board
considered
also
the
adequacy
of
the
Adviser’s
resources.
The
Board
noted
the
Adviser’s
representations
that
the
firm
is
in
stable
financial
condition,
that
the
firm
is
able
to
meet
its
expense
reimbursement
obligations
to
the
Fund,
and
that
the
Adviser
has
the
operational
capability
and
the
necessary
staffing
and
experience
to
continue
providing
high-
quality
investment
advisory
services
to
the
Fund.
Based
on
the
presentation
and
the
materials
provided
by
the
Adviser
in
connection
with
the
Board’s
consideration
of
the
renewal
of
the
Advisory
Agreement,
among
other
relevant
factors,
the
Board
concluded
that,
overall,
it
was
satisfied
with
the
nature,
extent,
and
quality
of
services
provided
to
the
Fund
under
the
Advisory
Agreement.
Performance
In
connection
with
a
presentation
by
the
Adviser
regarding
its
approach
to
managing
the
Fund,
the
Board
reviewed
the
performance
of
the
Fund
compared
to
its
primary
benchmark
index.
The
Board
observed
that
the
Fund
outperformed
the
S&P
500
Index,
the
Fund’s
primary
benchmark
index,
for
the
one-
and
three-year
periods
ended
December
31,
2021,
and
underperformed
the
primary
benchmark
index
for
the
five-
and
10-year
periods
ended
December
31,
2021,
and
for
the
period
since
the
Fund’s
inception
on
April
19,
1991.
The
Board
also
considered
the
Fund’s
performance
relative
to
an
independent
peer
group
identified
by
Strategic
Insight,
Inc.
(“Strategic
Insight
Peers”)
as
having
characteristics
similar
to
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
21
those
of
the
Fund.
The
Board
observed
that,
based
on
the
information
provided
by
Strategic
Insight,
the
Fund
outperformed
the
average
of
its
Strategic
Insight
Peers
for
the
one-
and
three-year
periods
ended
December
31,
2021,
and
underperformed
the
average
of
its
Strategic
Insight
Peers
for
the
five-
and
ten-year
periods
ended
December
31,
2021.
With
respect
to
the
Fund’s
short-term
performance,
the
Board
considered
the
Adviser’s
representation
that
relative
outperformance
over
the
one-
and
three-year
periods
reflected
broad-based
strength
throughout
the
portfolio
due
to
favorable
stock
selection.
With
respect
to
the
Fund’s
performance
over
longer
periods,
the
Board
considered
the
Adviser’s
representation
that
Fund’s
relative
underperformance
over
the
five-
and
10-year
periods
was
primarily
a
function
of
the
Fund’s
underperformance
during
the
fourth
quarter
of
calendar
year
2018,
which
had
a
disproportionate
effect
on
the
Fund’s
longer-term
performance,
as
well
as
the
Fund’s
underperformance
during
2014
and
2015,
a
period
during
which
a
different
individual
had
primary
portfolio
management
responsibilities
for
the
Fund.
The
Board
also
considered
the
Adviser’s
representation
that
the
Fund’s
relative
performance
has
been
negatively
affected
by
the
outperformance
of
growth-style
investing
over
value-style
investing
over
the
last
ten
years.
The
Board
observed
that
the
Fund’s
performance
had
improved
since
2016,
when
the
Adviser
had
replaced
the
portfolio
manager
with
primary
responsibility
for
the
day-to-
day
management
of
the
Fund.
In
consideration
of
the
Adviser’s
investment
style
and
the
foregoing
performance
information,
among
other
considerations,
the
Board
determined
that
the
Fund
and
its
shareholders
could
benefit
from
the
Adviser’s
continued
management
of
the
Fund.
Compensation
The
Board
evaluated
the
Adviser’s
compensation
for
providing
advisory
services
to
the
Fund
and
analyzed
comparative
information
on
actual
advisory
fee
rates
and
net
expense
ratios
in
the
Fund’s
Strategic
Insight
peer
group.
The
Board
observed
that
the
Adviser’s
actual
advisory
fee
rate
and
total
expense
ratio
were
each
less
than
the
median
of
the
Strategic
Insight
peer
group.
The
Board
also
noted
the
Adviser’s
representation
that
the
advisory
fee
rate
charged
to
the
Fund
was
consistent
with
the
fee
charged
by
the
Adviser
to
its
separately
managed
accounts
with
comparable
investment
strategies
and
levels
of
assets
under
management.
Based
on
the
foregoing,
among
other
relevant
factors,
the
Board
concluded
that
the
Adviser’s
advisory
fee
rate
charged
to
the
Fund
was
reasonable.
Costs
of
Services
and
Profitability
The
Board
considered
information
provided
by
the
Adviser
regarding
its
costs
of
services
and
its
profitability
with
respect
to
the
Fund.
In
this
regard,
the
Board
considered
the
Adviser’s
resources
devoted
to
the
Fund,
as
well
as
the
Adviser’s
discussion
of
the
aggregate
costs
and
profitability
of
its
mutual
fund
activities.
The
Board
considered
also
the
Adviser’s
representation
that
the
Adviser
does
not
conduct
a
formal,
comprehensive
cost
allocation
with
respect
to
its
mutual
fund
activities
and
separately
managed
accounts
but
that
the
Adviser
believed
that
the
Fund
was
comparatively
less
profitable
than
the
Adviser’s
separately
managed
accounts
as
a
result
of
the
low
level
of
the
Fund’s
assets,
costs
incurred
in
connection
with
regulatory
compliance
applicable
to
registered
investment
companies,
and
the
expense
cap
currently
in
place.
Based
on
these
and
other
applicable
considerations,
the
Board
concluded
that
the
Adviser’s
profits
attributable
to
the
management
of
the
Fund
were
reasonable.
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
22
Economies
of
Scale
The
Board
considered
whether
the
Fund
would
benefit
from
any
economies
of
scale.
In
this
regard,
the
Board
considered
the
Fund’s
fee
structure,
asset
size,
and
expense
cap
arrangements.
The
Board
noted
the
Adviser’s
representation
that
the
Fund
could
potentially
benefit
from
economies
of
scale
at
higher
asset
levels
but
that,
in
light
of
the
Fund’s
current
asset
levels
and
because
the
Adviser
was
already
waiving
a
portion
of
its
contractual
advisory
fee
in
order
to
keep
the
Fund’s
expenses
at
or
below
the
agreed-upon
expense
cap,
the
Adviser
was
not
proposing
breakpoints
in
the
advisory
fee
at
this
time.
Based
on
the
foregoing
information
and
other
applicable
considerations,
the
Board
concluded
that
the
asset
level
of
the
Fund
was
not
consistent
with
the
existence
of
economies
of
scale
and
that
the
advisory
fee
remained
reasonable
in
light
of
the
current
information
provided
to
the
Board
with
respect
to
economies
of
scale.
Other
Benefits
The
Board
noted
the
Adviser’s
representation
that,
other
than
its
contractual
advisory
fees
and
the
soft
dollar
benefits
accrued
from
Fund
brokerage
commissions,
the
Adviser
does
not
benefit
in
a
material
way
from
its
relationship
with
the
Fund.
Based
on
the
foregoing
representation,
the
Board
concluded
that
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Fund
were
not
a
material
factor
to
consider
in
approving
the
continuation
of
the
Advisory
Agreement.
Conclusion
The
Board
did
not
identify
any
single
factor
as
being
of
paramount
importance,
and
different
Trustees
may
have
given
different
weight
to
different
factors.
The
Board
reviewed
a
memorandum
from
Fund
Counsel
discussing
the
legal
standards
applicable
to
its
consideration
of
the
Advisory
Agreement.
Based
on
its
review,
including
consideration
of
each
of
the
factors
referenced
above,
the
Board
determined,
in
the
exercise
of
its
reasonable
business
judgment,
that
the
contractual
fee
under
the
Advisory
Agreement
was
fair
and
reasonable
in
light
of
the
services
performed
or
to
be
performed,
expenses
incurred
or
to
be
incurred
and
such
other
matters
as
the
Board
considered
relevant.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(800)
943-6786
and
on
the
U.S.
Securities
and
Exchange
Commission's
("SEC")
website
at
www.sec.gov.
The
Fund’s
proxy
voting
record
for
the
most
recent
twelve-
month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(800)
943-6786
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
23
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund,
you
incur
two
types
of
costs:
(1)
transaction
costs,
including
redemption
fees
and
exchange
fees,
and
(2)
ongoing
costs,
including
management
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund,
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
October
1,
2021
through
March
31,
2022.
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.
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
Beginning
Account
Value
October
1,
2021
Ending
Account
Value
March
31,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,011.30
$
5.01
1.00%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,019.95
$
5.04
1.00%
*
Expenses
are
equal
to
the
Fund’s
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
the
number
of
days
in
the
most
recent
fiscal
half-year
(182)
divided
by
365
to
reflect
the
half-year
period.
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
24
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(800)
943-6786.
(1)
Jessica
Chase
is
currently
an
interested
person
of
the
Trust,
as
defined
in
the
1940
Act,
due
to
her
affiliation
with
Apex
Fund
Services
and
her
role
as
President
of
the
Trust.
Apex
Fund
Services
is
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC.
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
Five
Years
Number
of
Series
in
Fund
Complex
Overseen
By
Trustee
Other
Directorships
Held
By
Trustee
During
Past
Five
Years
Independent
Trustees
David
Tucker
Born:
1958
Trustee;
Chairman
of
the
Board
Since
2011
and
Chairman
since
2018
Director,
Blue
Sky
Experience
(a
charitable
endeavor)
since
2008;
Senior
Vice
President
&
General
Counsel,
American
Century
Companies
(an
investment
management
firm)
1998-
2008.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Mark
D.
Moyer
Born:
1959
Trustee;
Chairman
of
the
Audit
Committee
Since
2018
Chief
Financial
Officer,
Freedom
House
(a
NGO
advocating
political
freedom
and
democracy)
2017-2021;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-
Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-
2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Beck,
Mack
&
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
25
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-
Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-
2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
FOR
MORE
INFORMATION
Investment
Adviser
Beck,
Mack
&
Oliver
LLC
565
Fifth
Ave,
19th
Floor
New
York,
NY
10017
www.beckmack.com
Transfer
Agent
Apex
Fund
Services,
LLC
P.O.
Box
588
Portland,
ME
04112
www.theapexgroup.com
Distributor
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
ME
04101
www.foreside.com
Beck,
Mack
&
Oliver
Partners
Fund
P.O.
Box
588
Portland,
ME
04112
(800)
943-6786
www.beckmack.com
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
risks,
objectives,
fees
and
expenses,
experience
of
its
management,
and
other
information.
229-ANR-0322
Payson
Total
Return
Fund
ANNUAL
REPORT
//
March
31,
2022
Payson
Total
Return
Fund
Table
of
Contents
March
31,
2022
IMPORTANT
INFORMATION
An
investment
in
the
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal.
Other
Fund
risks
include
equity
risk,
sector
risk,
convertible
securities
risk,
debt
securities
risk,
technology
sector
risk,
exchange-
traded
funds
risk,
interest
rate
risk,
credit
risk,
inflation
indexed
security
risk,
U.S.
government
securities
risk,
value
investment
risk,
mortgage-related
and
other
asset-backed
securities
risk,
and
foreign
investments
risk.
Foreign
investing
involves
certain
risks
and
increased
volatility
not
associated
with
investing
solely
in
the
U.S.,
including
currency
fluctuations,
economic
or
financial
instability,
lack
of
timely
or
reliable
financial
information
or
unfavorable
political
or
legal
developments.
Mortgage-related
and
other
asset-
backed
securities
risks
include
extension
risk
and
prepayment
risk.
In
addition,
the
Fund
invests
in
midcap
companies,
which
pose
greater
risks
than
those
associated
with
larger,
more
established
companies.
There
is
no
assurance
that
the
Fund
will
achieve
its
investment
objective.
A
Message
to
Our
Shareholders
(Unaudited)
1
Performance
Chart
and
Analysis
(Unaudited)
3
Schedule
of
Investments
4
Statement
of
Assets
and
Liabilities
6
Statement
of
Operations
7
Statements
of
Changes
in
Net
Assets
8
Financial
Highlights
9
Notes
to
Financial
Statements
10
Report
of
Independent
Registered
Public
Accounting
Firm
15
Additional
Information
(Unaudited)
17
Payson
Total
Return
Fund
A
Message
to
Our
Shareholders
(Unaudited)
March
31,
2022
1
Dear
Payson
Total
Return
Fund
Shareholder,
The
past
fiscal
year
ending
March
31,
2022
for
the
Payson
Total
Return
Fund
(the
“Fund”)
could
almost
be
described
as
a
tale
of
two
markets.
For
the
first
three
quarters,
Fund
shareholders
enjoyed
strong
results
as
stock
prices
rose
in
sympathy
with
U.S.
companies
generating
strong
corporate
earnings
and
cash
flow.
The
economy
continued
to
recover
from
the
pandemic
disruptions
and
underlying
demand
in
all
sectors
of
the
economy
was
positive,
if
not
robust.
However,
as
the
Fund’s
annual
letter
from
the
prior
year
warned,
inflationary
pressures
were
beginning
to
build
due
to
supply
chain
disruptions,
an
accommodative
Federal
Reserve,
and
a
U.S.
Congress
legislating
tremendous
amounts
of
recovery
funds
into
the
economy.
The
tide
turned
in
the
final
quarter
of
the
fiscal
year,
marked
by
significant
change
on
many
fronts,
and
stock
prices
responded
predictably
lower.
The
combination
of
higher
inflation,
higher
interest
rates
and,
of
course,
the
sudden
outbreak
of
war
in
Ukraine,
have
led
to
a
reassessment
of
global
economic
growth,
which
in
turn
has
triggered
stock
market
volatility.
Thanks
in
large
part
to
extraordinary
monetary
and
fiscal
stimulus,
corporate
earnings
have
been
very
strong
for
several
years
with
the
brief
exception
of
the
Covid
outbreak
in
2020.
This
has
led
to
rising
stock
valuations
as
investors
were
willing
to
pay
higher
multiples
for
presumed
higher
growth.
Much
of
the
drawdown
investors
have
witnessed
if
not
experienced
since
the
beginning
of
the
calendar
year
has
been
due
to
a
compression
of
these
multiples.
A
dramatic
rise
in
inflation
typically
erodes
profit
margins
and
earnings
growth,
bringing
into
question
future
growth;
naturally
investors
are
less
willing
to
pay
high
multiples
in
such
an
environment.
We
believe
these
are
the
primary
issues
weighing
on
investors’
minds
these
days
and
it’s
no
surprise,
given
the
high
level
of
uncertainty
as
to
how
all
these
uses
will
play
out,
that
stocks
and
the
Fund
declined
in
value
the
last
quarter.
For
the
year
ending
March
31,
2022,
the
Fund
generated
a
total
return
of
14.82%
as
compared
to
the
S
&
P
500®
Index
(the
“Index”),
which
for
the
same
time
period
produced
a
total
return
of
15.65%.
The
managers
of
the
Fund
have
remained
disciplined
throughout
the
year,
continuing
to
focus
on
the
underlying
characteristics
of
the
stocks
held
in
the
Fund
portfolio.
As
the
year
unfolded,
the
managers
grew
increasingly
concerned
about
rising
valuations
and
reduced,
if
not
eliminated,
some
holdings
that
they
deemed
too
expensive
relative
to
their
earnings
and
cash
flow
production.
At
the
same
time,
they
found
opportunities
in
other
sectors
and
high-quality
companies
trading
at
more
reasonable
valuations.
From
a
sector
perspective
the
portfolio
remains
overweight
technology
and
health
care
and
that
decision
was
a
benefit
to
the
portfolio.
The
managers
chose
to
initiate
a
modest
position
in
energy
stocks
during
the
second
half
of
the
fiscal
year
and
that
too
proved
a
good
choice.
On
the
other
hand,
by
not
owning
stocks
in
the
real
estate
sector
and
choosing
to
overweight
Financials,
relative
results
suffered.
On
an
individual
holdings
basis,
the
largest
contributors
to
the
Fund’s
results
were
Broadcom,
Inc.,
Aon
PLC,
Class
A,
Berkshire
Hathaway,
Inc.,
Class
B,
Alphabet,
Inc.,
Class
A,
and
UnitedHealth
Group,
Inc.
The
stock
holdings
that
were
the
worst
contributors
the
to
the
Fund’s
relative
results
were
Lam
Research
Corp.,
Polaris,
Inc.,
Meta
Platforms,
Inc.,
Class
A,
Amgen,
Inc.,
and
Western
Union
Co.
The
Fund
no
longer
holds
shares
of
Polaris,
Inc.
and
Western
Union
Co.
Payson
Total
Return
Fund
A
Message
to
Our
Shareholders
(Unaudited)
March
31,
2022
2
Except
for
the
onset
of
the
Covid
pandemic,
investors
have
generally
enjoyed
a
relatively
benign
environment
the
last
several
years
thanks
in
large
part
to
a
low
interest
rate
environment
and
a
Congress
taking
extraordinary
measures
to
ensure
economic
stability.
Thankfully,
it
would
appear
we
are
likely
now
leaving
Covid
behind.
But
with
declining
unemployment
levels,
strengthening
consumer
demand,
and
the
Ukrainian
war
helping
to
fuel
inflationary
pressures,
central
banks
across
the
globe
are
tightening
interest
rates
in
response.
With
all
this,
investors
are
now
confronting
a
new
set
of
challenges
and
hazards.
As
is
always
the
case,
the
managers
of
the
Fund
will
stick
to
their
disciplined
process
and
continue
to
respond
to
these
challenges
by
seeking
to
take
advantage
of
opportunities
while
avoiding
undue
risks.
Payson
Total
Return
Fund
Performance
Chart
and
Analysis
(Unaudited)
March
31,
2022
3
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
Payson
Total
Return
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
S&P
500
Index
(the
“S&P
500”),
over
the
past
ten
fiscal
years.
The
S&P
500
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$10,000
Investment
Payson
Total
Return
Fund
vs.
S&P
500®
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
0.85%.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(800)
805-8258.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2022
One
Year
Five
Year
Ten
Year
Payson
Total
Return
Fund
14.82%
17.29%
12.82%
S&P
500®
Index
15.65%
15.99%
14.64%
Payson
Total
Return
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2022
See
Notes
to
Financial
Statements.
4
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
March
31,
2022.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
99.6%
Consumer
Discretionary
-
1.8%
13,700
The
Home
Depot,
Inc.
$
4,100,821
Consumer
Staples
-
11.3%
92,000
Bristol-Myers
Squibb
Co.
6,718,760
92,070
CVS
Health
Corp.
9,318,405
15,240
Thermo
Fisher
Scientific,
Inc.
9,001,506
25,038,671
Energy
-
6.2%
17,538
Chevron
Corp.
2,855,713
68,163
Devon
Energy
Corp.
4,030,478
27,300
Pioneer
Natural
Resources
Co.
6,825,819
13,712,010
Financials
-
22.0%
25,870
American
Express
Co.
4,837,690
27,000
Aon
PLC,
Class A
8,792,010
39,450
Berkshire
Hathaway,
Inc.,
Class B (a)
13,922,299
20,000
JPMorgan
Chase
&
Co.
2,726,400
18,455
Mastercard,
Inc.,
Class A
6,595,448
19,275
S&P
Global,
Inc.
7,906,220
19,000
Visa,
Inc.,
Class A
4,213,630
48,993,697
Health
Care
-
16.4%
36,735
AbbVie,
Inc.
5,955,111
12,634
Amgen,
Inc.
3,055,154
8,625
Danaher
Corp.
2,529,971
28,950
Johnson
&
Johnson
5,130,809
23,000
Laboratory
Corp.
of
America
Holdings (a)
6,064,180
65,000
Pfizer,
Inc.
3,365,050
20,290
UnitedHealth
Group,
Inc.
10,347,291
36,447,566
Industrials
-
4.9%
26,600
AMETEK,
Inc.
3,542,588
12,035
Honeywell
International,
Inc.
2,341,770
20,000
L3Harris
Technologies,
Inc.
4,969,400
10,853,758
Shares
Security
Description
Value
Information
Technology
-
37.0%
11,220
Accenture
PLC,
Class A
$
3,783,720
6,350
Adobe,
Inc. (a)
2,893,187
6,360
Alphabet,
Inc.,
Class A (a)
17,689,386
20,000
Broadcom,
Inc.
12,593,600
36,865
CDW
Corp.
6,594,780
181,700
HP,
Inc.
6,595,710
8,385
Lam
Research
Corp.
4,507,860
19,315
Meta
Platforms,
Inc.,
Class A (a)
4,294,883
23,215
Microsoft
Corp.
7,157,417
22,625
NVIDIA
Corp.
6,173,458
19,785
NXP
Semiconductors
NV
3,661,808
34,980
Texas
Instruments,
Inc.
6,418,130
82,363,939
Total
Common
Stock
(Cost
$137,170,178)
221,510,462
Investments,
at
value
-
99.6%
(Cost
$137,170,178)
$
221,510,462
Other
Assets
&
Liabilities,
Net
-
0.4%
833,759
Net
Assets
-
100.0%
$
222,344,221
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
221,510,462
Level
2
-
Other
Significant
Observable
Inputs
–
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
221,510,462
Payson
Total
Return
Fund
SCHEDULE
OF
INVESTMENTS
March
31,
2022
See
Notes
to
Financial
Statements.
5
The
Level
1
value
displayed
in
this
table
is
Common
Stock.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Total
Investments
Consumer
Discretionary
1.8%
Consumer
Staples
11.3%
Energy
6.2%
Financials
22.1%
Health
Care
16.5%
Industrials
4.9%
Information
Technology
37.2%
100.0%
Payson
Total
Return
Fund
Statement
of
Assets
and
Liabilities
March
31,
2022
See
Notes
to
Financial
Statements.
6
ASSETS
Investments,
at
value
(Cost
$137,170,178)
$
221,510,462
Cash
829,039
Receivables:
Fund
shares
sold
49,579
Investment
securities
sold
4,969,459
Dividends
and
interest
144,625
Prepaid
expenses
11,234
Total
Assets
227,514,398
LIABILITIES
Payables:
Investment
securities
purchased
4,678,748
Fund
shares
redeemed
140,780
Distributions
payable
170,070
Accrued
Liabilities:
Investment
adviser
fees
110,345
Fund
services
fees
25,241
Other
expenses
44,993
Total
Liabilities
5,170,177
NET
ASSETS
$
222,344,221
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
136,591,827
Distributable
earnings
85,752,394
NET
ASSETS
$
222,344,221
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
8,086,418
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
$
27.50
Payson
Total
Return
Fund
Statement
of
Operations
YEAR
ENDED
MARCH
31,
2022
See
Notes
to
Financial
Statements.
7
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$9,547)
$
3,010,462
Interest
income
935
Total
Investment
Income
3,011,397
EXPENSES
Investment
adviser
fees
1,370,961
Fund
services
fees
319,159
Custodian
fees
27,867
Registration
fees
26,758
Professional
fees
43,640
Trustees'
fees
and
expenses
7,411
Other
expenses
68,736
Total
Expenses
1,864,532
NET
INVESTMENT
INCOME
1,146,865
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
on
investments
8,833,278
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
19,050,642
NET
REALIZED
AND
UNREALIZED
GAIN
27,883,920
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
29,030,785
Payson
Total
Return
Fund
Statements
of
Changes
in
Net
Assets
See
Notes
to
Financial
Statements.
8
For
the
Years
Ended
March
31,
2022
2021
OPERATIONS
Net
investment
income
$
1,146,865
$
1,026,351
Net
realized
gain
8,833,278
28,613,671
Net
change
in
unrealized
appreciation
(depreciation)
19,050,642
34,851,367
Increase
in
Net
Assets
Resulting
from
Operations
29,030,785
64,491,389
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(27,030,027)
(11,060,753)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
106,438,422
13,861,490
Reinvestment
of
distributions
25,286,406
10,021,490
Redemption
of
shares
(82,204,939)
(10,965,094)
Increase
in
Net
Assets
from
Capital
Share
Transactions
49,519,889
12,917,886
Increase
in
Net
Assets
51,520,647
66,348,522
NET
ASSETS
Beginning
of
Year
170,823,574
104,475,052
End
of
Year
$
222,344,221
$
170,823,574
SHARE
TRANSACTIONS
Sale
of
shares
3,737,849
569,849
Reinvestment
of
distributions
907,730
410,282
Redemption
of
shares
(2,839,986)
(450,298)
Increase
in
Shares
1,805,593
529,833
Payson
Total
Return
Fund
Financial
Highlights
See
Notes
to
Financial
Statements.
9
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
March
31,
2022
2021
2020
2019
2018
NET
ASSET
VALUE,
Beginning
of
Year
$
27.20
$
18.17
$
19.37
$
17.76
$
16.14
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.14
0.17
0.15
0.13
0.14
Net
realized
and
unrealized
gain
(loss)
3.92
10.75
(1.20)
1.61
2.33
Total
from
Investment
Operations
4.06
10.92
(1.05)
1.74
2.47
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.14)
(0.17)
(0.15)
(0.13)
(0.12)
Net
realized
gain
(3.62)
(1.72)
–
–
(0.73)
Total
Distributions
to
Shareholders
(3.76)
(1.89)
(0.15)
(0.13)
(0.85)
NET
ASSET
VALUE,
End
of
Year
$
27.50
$
27.20
$
18.17
$
19.37
$
17.76
TOTAL
RETURN
14.82%
61.37%
(5.48)%
9.83%
15.39%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000s
omitted)
$
222,344
$
170,824
$
104,475
$
108,910
$
95,489
Ratios
to
Average
Net
Assets:
Net
investment
income
0.50%
0.72%
0.74%
0.71%
0.82%
Net
expenses
0.82%
0.85%
0.86%
0.89%
0.94%
PORTFOLIO
TURNOVER
RATE
87%
64%
25%
27%
38%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2022
10
Note
1.
Organization
The
Payson
Total
Return
Fund
(the
“Fund”)
is
a
diversified
portfolio
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
the
Fund’s
shares
of
beneficial
interest
without
par
value.
The
Fund
commenced
operations
on
November
25,
1991.
The
Fund
seeks
a
combination
of
high
current
income
and
capital
appreciation.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
Accounting
Standards
Codification
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust’s
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
4,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2022
11
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
net
asset
value
(“NAV”)
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
March
31,
2022,
for
the
Fund’s
investments
is
included
at
the
end
of
the
Fund’s
Schedule
of
Investments.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Non-cash
dividend
income
is
recorded
at
the
fair
market
value
of
the
securities
received.
Foreign
dividend
income
is
recorded
on
the
ex-dividend
date
or
as
soon
as
possible
after
determining
the
existence
of
a
dividend
declaration
after
exercising
reasonable
due
diligence.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
quarterly.
Distributions
to
shareholders
of
net
capital
gains
and
net
foreign
currency
gains,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2022
12
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
Federal
Taxes
–
The
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income
and
capital
gains,
if
any,
the
Fund
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
The
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
The
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
March
31,
2022,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-
recognition
or
disclosure.
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
the
Fund
enters
into
contracts
that
provide
general
indemnifications
by
the
Fund
to
the
counterparty
to
the
contract.
The
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
the
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
The
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
the
Fund’s
balance
sheet.
Note
3.
Cash
–
Concentration
in
Uninsured
Account
For
cash
management
purposes,
the
Fund
may
concentrate
cash
with
the
Fund’s
custodian.
This
typically
results
in
cash
balances
exceeding
the
Federal
Deposit
Insurance
Corporation
(“FDIC”)
insurance
limits.
As
of
March
31,
2022,
the
Fund
had
$579,039
at
U.S.
Bank,
N.A.
that
exceeded
the
FDIC
insurance
limit.
Note
4.
Fees
and
Expenses
Investment
Adviser
–
H.M.
Payson
&
Co.
(the
“Adviser”)
is
the
investment
adviser
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee,
payable
monthly,
from
the
Fund
at
an
annual
rate
of
0.60%
of
the
Fund’s
average
daily
net
assets.
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.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2022
13
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
–
Through
the
calendar
year
ended
December
31,
2021,
each
Independent
Trustee’s
annual
retainer
was
$31,000
($41,000
for
the
Chairman).
Effective
January
1,
2022,
each
Independent
Trustee’s
annual
retainer
is
$45,000
($55,000
for
the
Chairman),
and
the
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-pocket
expenses
incurred
in
connection
with
his
or
her
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
The
amount
of
Trustees’
fees
attributable
to
the
Fund
is
disclosed
in
the
Statement
of
Operations.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
the
Fund.
Note
5.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments,
during
the
year
ended
March
31,
2022
were
$220,500,913
and
$193,619,325,
respectively.
Note
6.
Federal
Income
Tax
As
of
March
31,
2022,
the
cost
of
investments
for
federal
income
tax
purposes
is
$137,170,178
and
the
components
of
net
unrealized
appreciation
were
as
follows:
Distributions
paid
during
the
fiscal
years
ended
as
noted
were
characterized
for
tax
purposes
as
follows:
Gross
Unrealized
Appreciation
$
84,775,130
Gross
Unrealized
Depreciation
(434,846)
Net
Unrealized
Appreciation
$
84,340,284
2022
2021
Ordinary
Income
$
5,176,793
$
2,675,613
Long-Term
Capital
Gain
21,826,392
8,395,525
$
27,003,185
$
11,071,138
Payson
Total
Return
Fund
Notes
to
Financial
Statements
March
31,
2022
14
As
of
March
31,
2022
,
distributable
earnings
(accumulated
loss)
on
a
tax
basis
were
as
follows:
The
difference
between
components
of
distributable
earnings
on
a
tax
basis
and
the
amounts
reflected
in
the
Statement
of
Assets
and
Liabilities
are
primarily
due
to
treatment
of
distributions
payable.
For
tax
purposes,
the
current
year
post-October
loss
was
$
1,783,634
for
the
Fund
(realized
during
the
period
November
1,
2021
through
March
31,
2022).
This
loss
will
be
recognized
for
tax
purposes
the
first
business
day
of
the
Fund’s
next
fiscal
year,
April
1,
2022.
Note
7.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
through
the
date
these
financial
statements
were
issued
have
been
evaluated
for
potential
impact,
and
the
Fund
has
had
no
such
events.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
Undistributed
Ordinary
Income
$
170,051
Undistributed
Long-Term
Gain
3,195,763
Capital
and
Other
Losses
(1,783,634)
Unrealized
Appreciation
84,340,284
Other
Temporary
Differences
(170,070)
Total
$
85,752,394
Report
of
Independent
Registered
Public
Accounting
Firm
15
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Payson
Total
Return
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
Payson
Total
Return
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedule
of
investments,
as
of
March
31,
2022,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
March
31,
2022,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Report
of
Independent
Registered
Public
Accounting
Firm
16
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
March
31,
2022
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
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
May
26,
2022
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2022
17
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(800)
805-
8258
and
on
the
SEC
website
at
www.sec.gov.
The
Fund’s
proxy
voting
record
for
the
most
recent
twelve-
month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(800)
805-8258
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund
,
you
incur
ongoing
costs,
including
management
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
October
1,
2021
through
March
31,
2022.
Actual
Expenses
–
The
first
line
of
the
table
below
provides
information
about
actual
account
values
and
actual
expenses.
You
may
use
the
information
in
this
line,
together
with
the
amount
you
invested,
to
estimate
the
expenses
that
you
paid
over
the
period.
Simply
divide
your
account
value
by
$1,000
(for
example,
an
$8,600
account
value
divided
by
$1,000
=
8.6),
then
multiply
the
result
by
the
number
in
the
first
line
under
the
heading
entitled
“Expenses
Paid
During
Period”
to
estimate
the
expenses
you
paid
on
your
account
during
the
period.
Hypothetical
Example
for
Comparison
Purposes
–
The
second
line
of
the
table
below
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
the
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
the
expenses
shown
in
the
table
are
meant
to
highlight
your
ongoing
costs
only.
Therefore,
the
second
line
of
the
table
is
useful
in
comparing
ongoing
costs
only
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2022
18
Federal
Tax
Status
of
Dividends
Declared
during
the
Fiscal
Year
For
federal
income
tax
purposes,
dividends
from
short-term
capital
gains
are
classified
as
ordinary
income.
The
Fund
designates
68.84
%
of
its
income
dividend
distributed
as
qualifying
for
the
corporate
dividends
received
deduction
(DRD)
and
71.48
%
for
the
qualified
dividend
rate
(QDI)
as
defined
in
Section
1(h)(11)
of
the
Code.
The
Fund
also
designates
0.01
%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
The
Fund
also
designates
78.39
%
as
short-term
capital
gains
dividends
exempt
from
US
tax
for
foreign
shareholders
(QSD).
The
Fund
paid
long-term
capital
gain
dividends
of
$21,826,392.
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(800)
805-8258.
Beginning
Account
Value
October
1,
2021
Ending
Account
Value
March
31,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
1,075.22
$
4.35
0.84%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,020.74
$
4.23
0.84%
*
Expenses
are
equal
to
the
Fund’s
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
the
number
of
days
in
the
most
recent
fiscal
half-year
(182)
divided
by
365
to
reflect
the
half-year
period.
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2022
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)
2017-2021;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-
Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Payson
Total
Return
Fund
Additional
Information
(Unaudited)
March
31,
2022
20
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-
2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-
2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-2019.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-
2019.
800
805
8258
//
hmpayson.com
FOR
MORE
INFORMATION
Payson
Total
Return
Fund
P.O.
Box
588
Portland,
Maine
04112
(800)
805-8258
(toll
free)
www.hmpayson.com
Transfer
Agent
Apex
Fund
Services
P.O.
Box
588
Portland,
Maine
04112
www.apexgroup.com
Distributor
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
Maine
04101
www.foreside.com
Investment
Company
Act
File
No.
811-03023
This
report
is
submitted
for
the
general
information
of
the
shareholders
of
the
Fund.
It
is
not
authorized
for
distribution
to
prospective
investors
unless
preceded
or
accompanied
by
an
effective
prospectus,
which
includes
information
regarding
the
Fund’s
risks,
objectives,
fees
and
expenses,
experience
of
its
management,
and
other
information.
800
805
8258
//
hmpayson.com
230-ANR-0322
Merk
Hard
Currency
Fund
®
Investor
Shares
(MERKX)
Institutional
Shares
(MHCIX)
Annual
Report
March
31,
2022
1
1
Dear
Shareholder,
We
present
the
annual
report
for
the
Merk
Hard
Currency
Fund®
with
respect
to
the
period
April
1,
2021
through
March
31,
2022
(the
“Period”).
The
Merk
Hard
Currency
Fund
seeks
to
profit
from
a
rise
in
hard
currencies
relative
to
the
U.S.
dollar.
Merk
Investments
LLC
(the
“Adviser”)
will
determine
currency
allocations
based
on
its
analysis
of
monetary
policies
pursued
by
central
banks
and
economic
environments.
The
Fund’s
performance
data
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
an
investor’s
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
Please
visit
www.merkfunds.com
for
most
recent
month
end
performance.
The
Fund’s
expense
ratio
for
the
Investor
Shares
is
1.33%.
Merk
Hard
Currency
Fund
In
Q2
2021,
the
U.S.
dollar
was
mixed
versus
G10
currencies
and
gold.
Gold
was
the
best
performer,
up
3.65%
for
the
quarter.
The
Australian
dollar
was
the
worst
performer,
down
1.32%.
Australia
started
going
back
into
Covid
-related
lockdowns
towards
the
end
of
the
second
quarter.
Fund
performance
was
relatively
flat
for
the
period
(+0.10%).
During
the
quarter,
the
Fund
reduced
the
Japanese
yen
position.
In
Q3
2021,
the
U.S.
dollar
was
stronger
versus
all
other
G10
currencies
and
gold.
The
Japanese
yen
was
the
best
performer,
down
only
0.16%.
The
Australian
dollar
was
the
worst
performer,
down
3.61%.
Australia
was
particularly
negatively
impacted
by
the
delta
Covid
wave
and
a
weak
economy
in
the
third
quarter.
Fund
performance
was
negative,
down
2.51%
for
the
period.
During
the
quarter,
the
Fund
increased
the
New
Zealand
dollar
and
British
pound
positions
and
reduced
the
Swedish
krona
and
Japanese
yen
positions.
In
Q4
2021,
the
U.S.
dollar
was
mixed
versus
G10
currencies
and
gold.
Gold
was
the
best
performer,
up
4.11%
for
the
quarter.
The
Japanese
yen
was
the
worst
performer,
down
3.29%.
Fund
performance
was
negative,
down
1.25%
for
the
period.
During
the
quarter,
the
Fund
reduced
the
Japanese
yen
and
euro
positions.
In
Q1
2022,
the
U.S.
dollar
was
mixed
versus
G10
currencies
and
down
versus
gold.
Gold
was
again
the
best
performer
for
the
quarter,
up
5.92%.
The
Japanese
yen
was
again
the
worst
performer,
down
5.44%.
Fund
performance
was
negative,
down
0.67%
for
the
period.
During
the
quarter,
the
Fund
decreased
the
Swedish
krona
and
Japanese
yen
positions
and
increased
the
Australian
dollar
and
New
Zealand
dollar
positions.
Over
the
past
quarter,
the
dollar
index
moved
higher
as
the
euro,
Japanese
yen,
and
British
pound
all
declined
versus
the
dollar.
The
Fed
became
significantly
more
hawkish
(improving
real
rates
for
the
US)
and
the
Russian
invasion
of
Ukraine
catalyzed
flight
into
the
dollar.
In
Q1,
global
growth
was
in
a
weakening
trend,
which
in
our
analysis
has
often
been
associated
with
a
stronger
dollar.
However,
our
analysis
suggests
the
dollar
has
historically
often
weakened
after
the
first
Fed
rate
hike
with
inevitable
ups
and
downs
along
the
way.
As
global
supply-chains
improve,
we
believe
a
global
growth
upswing
will
likely
be
a
headwind
for
the
dollar
and
a
tailwind
for
foreign
currencies.
All
of
this
is
in
a
context
where
we
believe
the
Federal
Reserve,
despite
its
hawkishness,
is
late
and
too
timid
in
tightening
policy.
In
practice,
this
may
translate
to
elevated
volatility
in
all
markets,
including
the
currency
markets.
An
unstable
dynamic
might
develop
between
an
effort
to
counter
inflationary
pressures
and
an
attempt
to
engineer
a
“soft
landing.”
We
think
the
Fund
is
well
positioned
for
what
we
see
as
an
ongoing
secular
dollar
bear
market.
In
this
context,
investors
may
want
to
consider
whether
the
Merk
Hard
Currency
Fund
can
add
valuable
diversification
to
their
portfolio.
As
of
March
31,
2022
(annualized
return)
1
year
5
year
10
year
Since
inception
5/10/05
Merk
Hard
Currency
Fund
Investor
Shares
(MERKX)
-4.27%
0.07%
-2.10%
0.92%
JPMorgan
3-Month
Global
Cash
Index
(“reference
basket”)
-5.00%
0.26%
-1.94%
0.41%
A
Message
To
Our
Shareholders
(Unaudited)
March
31,
2022
2
In
this
context,
we
encourage
investors
to
consider
whether
the
Merk
Funds
may
help
diversify
their
portfolios.
Sincerely,
Axel
G.
Merk
President
&
Chief
Investment
Officer
The
views
in
this
Report
were
those
of
the
Fund
Manager
as
of
March
31,
2022
and
may
not
reflect
the
views
of
the
Manager
on
the
date
this
Report
is
first
published
or
anytime
thereafter.
These
views
are
intended
to
assist
shareholders
of
the
Fund
in
understanding
their
investments
in
a
Fund
and
do
not
constitute
investment
advice.
The
Fund’s
performance
is
influenced
by
changes
in
exchange
rates
of
currencies
to
which
the
Fund
may
have
had
exposure
to
through
derivatives.
Over
time,
the
Fund
seeks
to
generate
more
gains
from
securities
than
derivatives.
Since
the
Fund
is
primarily
exposed
to
foreign
currencies,
changes
in
currency
exchange
rates
will
affect
the
value
of
what
the
respective
Fund
owns
and
the
price
of
the
Fund’s
shares.
Investing
in
foreign
instruments
bears
a
greater
risk
than
investing
in
domestic
instruments
for
reasons
such
as
volatility
of
currency
exchange
rates
and,
in
some
cases,
limited
geographic
focus,
political
and
economic
instability,
and
relatively
illiquid
markets.
The
Fund
is
subject
to
interest
rate
risk,
which
is
the
risk
that
debt
securities
in
a
Fund’s
portfolio
will
decline
in
value
because
of
increases
in
market
interest
rates.
As
a
non-diversified
fund,
the
Merk
Hard
Currency
Fund
will
be
subject
to
more
investment
risk
and
potential
for
volatility
than
a
diversified
fund
because
its
portfolio
may,
at
times,
focus
on
a
limited
number
of
issuers.
The
Fund
may
also
invest
in
derivative
securities,
which
can
be
volatile
and
involve
various
types
and
degrees
of
risk.
The
JPMorgan
3-Month
Global
Cash
Index
tracks
total
returns
of
three-month
constant
maturity
euro-currency
deposits.
The
euro-
currency
deposits
are
the
only
short-term
securities
consistent
across
all
markets
in
terms
of
liquidity,
maturity
and
credit
quality.
The
index
is
unmanaged
and
includes
reinvested
distributions.
One
cannot
invest
directly
in
an
index,
nor
is
an
index
representative
of
the
Fund's
portfolio.
JPMorgan
does
not
sponsor,
endorse
or
promote
the
Merk
Hard
Currency
Fund
in
connection
with
any
reference
to
the
JPMorgan
3-Month
Global
Cash
Index.
JPMorgan
makes
no
representation
or
warranty,
express
or
implied,
regarding
the
advisability
of
investing
in
securities
generally
or
in
any
product
particularly
or
the
ability
of
the
JPMorgan
3-Month
Global
Cash
Index
to
track
general
bond
market
performance.
3
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment
in
Investor
Shares,
including
reinvested
dividends
and
distributions,
in
the
Merk
Hard
Currency
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
JPMorgan
3-Month
Global
Cash
Index,
over
the
past
ten
fiscal
years.
The
JPMorgan
3-Month
Global
Cash
Index
tracks
total
returns
of
three-month
constant
maturity
euro-currency
deposits.
The
euro-currency
deposits
are
the
only
short-term
securities
consistent
across
all
markets
in
terms
of
liquidity,
maturity
and
credit
quality.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$10,000
Investment
Merk
Hard
Currency
Fund-Investor
Shares
vs.
JPMorgan
3-Month
Global
Cash
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratios
(gross)
for
Investor
Shares
and
Institutional
Shares
are
1.33%
and
1.08%,
respectively.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
For
the
most
recent
month-end
performance,
please
call
(866)
637-5386
or
visit
www.merkfunds.com.
Ten
Years
(03/31/2012-03/31/2022)
Average
Annual
Total
Returns
Periods
Ended
March
31,
2022
One
Year
Five
Year
Ten
Year
Merk
Hard
Currency
Fund
Investor
Shares
-4.27%
0.07%
-2.10%
Merk
Hard
Currency
Fund
Institutional
Shares
-3.90%
0.34%
-1.83%
JPMorgan
3-Month
Global
Cash
Index
-5.00%
0.26%
-1.94%
Merk
Hard
Currency
Fund
PERFORMANCE
CHART
AND
ANALYSIS
(Unaudited)
March
31,
2022
4
See
Notes
to
Financial
Statements.
MERK
HARD
CURRENCY
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2022
Principal
Security
Description
Currency
Rate
Maturity
Value
in
USD
Foreign
Bonds
-
70.6%
(a)
Non-U.S.
Government
-
Australia
-
5.8%
$
3,900,000
Australia
Government
Bond
AUD
2.250
%
11/21/22
$
2,949,472
Non-U.S.
Government
-
Austria
-
4.3%
2,000,000
Republic
of
Austria
Government
Bond
(b)
EUR
3.650
04/20/22
2,216,748
Non-U.S.
Government
-
New
Zealand
-
11.5%
8,200,000
New
Zealand
Government
Bond
NZD
5.500
04/15/23
5,859,830
Non-
U.S.Government
Agency
-
Germany
-
6.7%
30,000,000
Kreditanstalt
fuer
Wiederaufbau
,
EMTN
NOK
1.125
05/12/22
3,407,863
Non-
U.S.Government
Agency
-
Sweden
-
10.2%
49,000,000
Kommuninvest
I
Sverige
AB,
MTN
SEK
0.250
06/01/22
5,213,621
Regional
Agencies
-
Australia
-
7.3%
3,200,000
Queensland
Treasury
Corp.
AUD
6.000
07/21/22
2,435,410
1,700,000
Treasury
Corp.
of
Victoria
AUD
6.000
10/17/22
1,309,392
3,744,802
Regional
Authority
-
Australia
-
2.6%
1,700,000
New
South
Wales
Treasury
Corp.
AUD
4.000
04/20/23
1,310,957
Regional
Authority
-
Canada
-
18.0%
3,000,000
Province
of
Alberta
Canada
CAD
1.600
09/01/22
2,404,679
2,500,000
Province
of
British
Columbia
Canada
CAD
2.700
12/18/22
2,016,538
3,000,000
Province
of
New
Brunswick
Canada
CAD
1.550
05/04/22
2,401,584
2,900,000
Province
of
Saskatchewan
Canada
CAD
3.200
06/03/24
2,352,917
9,175,718
Supranational
Bank
-
Luxembourg
-
4.2%
1,900,000
European
Financial
Stability
Facility,
EMTN
EUR
1.875
05/23/23
2,151,741
Total
Foreign
Bonds
(Cost
$36,817,918)
36,030,752
Foreign
Treasury
Securities
-
16.1%
(a)
Non-U.S.
Government
-
Canada
-
4.5%
2,900,000
Canadian
Treasury
Bill
(c)
CAD
0.448
04/14/22
2,319,420
Non-U.S.
Government
-
Norway
-
11.6%
52,000,000
Norway
Treasury
Bill
(b)(c)
NOK
0.440
06/15/22
5,897,780
Total
Foreign
Treasury
Securities
(Cost
$8,019,180)
8,217,200
U.S.
Government
&
Agency
Obligations
-
6.8%
(a)
U.S.
Treasury
Securities
-
6.8%
3,500,000
U.S.
Treasury
Bill
(d)
(Cost
$3,499,683)
USD
0.163
04/21/22
3,499,772
Shares
Security
Description
Currency
Value
in
USD
Exchange
Traded
Product
-
0.8%
21,300
VanEck
Merk
Gold
Trust
ETF
(e)(f)
(Cost
$227,271)
USD
401,079
Shares
Security
Description
Currency
Rate
Value
in
USD
Money
Market
Fund
-
2.1%
1,084,583
Morgan
Stanley
Institutional
Liquidity
Funds
Treasury
Securities
Portfolio,
Institutional
Class
(g)
(Cost
$1,084,583)
USD
0.08
0
1,084,583
Investments,
at
value
-
96.4%
(Cost
$49,648,635)
$
49,233,386
Foreign
Currencies
– 2.9%
(Cost
$1,448,845)
1,483,936
Net
Unrealized
Gain/Loss
on
Forward
Currency
Contracts
–
(0.1)%
(68,624)
Other
Assets
&
Liabilities,
Net
– 0.8%
418,57
0
NET
ASSETS
– 100.0%
$
51,067,2
68
EMTN
European
Medium
Term
Note
ETF
Exchange
Traded
Fund
MTN
Medium
Term
Note
(a)
All
or
a
portion
of
these
securities
are
segregated
to
cover
outstanding
forward
currency
contract
exposure.
(b)
Security
exempt
from
registration
under
Rule
144A
under
the
Securities
Act
of
1933.
At
the
period
end,
the
value
of
these
securities
amounted
to
$8,114,528
or
15.9%
of
net
assets.
5
See
Notes
to
Financial
Statements.
Affiliated
investments
are
investments
that
are
managed
by
the
Adviser,
and
are
noted
in
the
Merk
Hard
Currency
Fund’s
Schedule
of
Investments.
Transactions
during
the
period
with
affiliates
were
as
follows:
As
of
March
31,
2022,
the
Merk
Hard
Currency
Fund
had
the
following
forward
currency
contracts
outstanding:
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
other
financial
instruments
and
liabilities
as
of
March
31,
2022.
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.
(c)
Rate
presented
is
yield
to
maturity.
(d)
Zero
coupon
bond.
Interest
rate
presented
is
yield
to
maturity.
(e)
Affiliate.
(f)
Non-income
producing
security.
(g)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
March
31,
2022.
Exchange
Traded
Product
VanEck
Merk
Gold
Trust
ETF
Balance
3/31/2021
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
3/31/2022
Realized
Gain
Investment
Income
Shares/
Principal
61,300
–
(40,000)
–
21,300
Cost
$
654,071
$
–
$
(426,800)
$
–
$
227,271
$
317,185
$
–
Value
1,019,419
–
–
(191,540)
401,079
Counterparty
Contracts
to
Purchase/(Sell)
Settlement
Date
Settlement
Value
Net
Unrealized
Appreciation
(Depreciation)
BNY
Mellon
Capital
Markets,
LLC
(2,100,000)
British
Pound
Sterling
04/06/22
$
(2,764,728)
$
6,169
2,100,000
British
Pound
Sterling
04/06/22
2,747,115
11,444
2,100,000
British
Pound
Sterling
04/20/22
2,764,465
(6,151)
1,600,000
Euro
04/20/22
1,781,117
(10,073)
240,000,000
Japanese
Yen
04/06/22
2,029,708
(58,062)
RBC
Capital
Markets,
LLC
(240,000,000)
Japanese
Yen
04/06/22
(1,959,696)
(11,951)
$
(68,624)
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Foreign
Bonds
$
–
$
36,030,752
$
–
$
36,030,752
Foreign
Treasury
Securities
–
8,217,200
–
8,217,200
U.S.
Government
&
Agency
Obligations
–
3,499,772
–
3,499,772
Exchange
Traded
Product
401,079
–
–
401,079
Money
Market
Fund
–
1,084,583
–
1,084,583
Investments,
at
value
$
401,079
$
48,832,307
$
–
$
49,233,386
Other
Financial
Instruments
*
Forward
Currency
Contracts
–
17,613
–
17,613
Total
Assets
$
401,079
$
48,849,920
$
–
$
49,250,999
Liabilities
Other
Financial
Instruments
*
Forward
Currency
Contracts
$
–
$
(86,237)
$
–
$
(86,237)
Total
Liabilities
$
–
$
(86,237)
$
–
$
(86,237)
*
Other
Financial
Instruments
are
derivatives
not
reflected
in
the
Schedule
of
Investments,
such
as
forward
currency
contracts,
which
are
valued
at
the
unrealized
appreciation
(depreciation)
at
year
end.
6
See
Notes
to
Financial
Statements.
PORTFOLIO
HOLDINGS
(Unaudited)
%
of
Net
Assets
Foreign
Bonds
70.6%
Foreign
Treasury
Securities
16.1%
U.S.
Government
&
Agency
Obligations
6.8%
Exchange
Traded
Product
0.8%
Money
Market
Fund
2.1%
Foreign
Currencies
2.9%
Net
Unrealized
Gain/Loss
on
Forward
Currency
Contracts
(0.1)%
Other
Assets
and
Liabilities,
Net
0.8%
100.0%
7
See
Notes
to
Financial
Statements.
ASSETS
Total
Investments,
at
value
(Cost
$49,421,364,
respectively)
$
48,832,307
Total
Investments
in
affiliates,
at
value
(Cost
$227,271,
respectively)
401,079
Total
Investments,
at
value
(Cost
$49,648,635,
respectively)
$
49,233,386
Foreign
currency
(Cost
$1,448,845,
respectively)
1,483,936
Receivables:
Fund
shares
sold
24,136
Dividends
and
interest
452,172
Unrealized
gain
on
forward
currency
contracts
17,613
Total
Assets
51,211,243
LIABILITIES
Unrealized
loss
on
forward
currency
contracts
86,237
Payables:
Fund
shares
redeemed
35,524
Accrued
Liabilities:
Investment
adviser
fees
11,157
Distribution
fees
8,895
Other
expenses
2,162
Total
Liabilities
143,975
NET
ASSETS
$
51,067,268
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
6
0,816,630
Accumulated
Loss
(
9,749,
36
2
)
NET
ASSETS
$
51,067,268
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
Investor
Shares
4,704,350
Institutional
Shares
1,000,778
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
Investor
Shares
(based
on
net
assets
of
$41,964,266,
respectively)
$
8.92
Institutional
Shares
(based
on
net
assets
of
$9,103,002,
respectively)
$
9.10
STATEMENT
OF
ASSETS
AND
LIABILITIES
March
31,
2022
8
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
$
77
Interest
income
(Net
of
foreign
withholding
taxes
of
$26,761,
respectively)
1,214,969
Net
amortization
expense
(1,196,464)
Total
Investment
Income
18,582
EXPENSES
Investment
adviser
fees
555,719
Non
12b-1
shareholder
servicing
fees:
Investor
Shares
22,960
Institutional
Shares
4,827
Distribution
fees:
Investor
Shares
114,796
Interest
expense
9,039
Total
Expenses
707,341
Fees
waived
(2,665)
Net
Expenses
704,676
NET
INVESTMENT
LOSS
(686,094)
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
(loss)
on:
Investments
in
unaffiliated
issuers
108,460
Investments
in
affiliated
issuers
317,185
Foreign
currency
transactions
(491,718)
Net
realized
loss
(66,073)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
in
unaffiliated
issuers
(1,498,759
)
Investments
in
affiliated
issuers
(191,540)
Foreign
currency
translations
61,84
7
Net
change
in
unrealized
appreciation
(depreciation)
(1,628,452)
NET
REALIZED
AND
UNREALIZED
LOSS
(1,694,525)
DECREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(2,380,619)
STATEMENT
OF
OPERATIONS
YEAR
ENDED
MARCH
31,
2022
9
See
Notes
to
Financial
Statements.
For
the
Year
Ended
March
31,
2022
For
the
Year
Ended
March
31,
2021
OPERATIONS
Net
investment
loss
$
(686,094)
$
(624,653)
Net
realized
gain
(loss)
(66,073)
2,890,306
Net
change
in
unrealized
appreciation
(depreciation)
(1,628,452)
4,447,453
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(2,380,619)
6,713,106
DISTRIBUTIONS
TO
SHAREHOLDERS
Investor
Shares
(1,060,948)
–
Institutional
Shares
(238,664)
–
Total
Distributions
to
Shareholders
(1,299,612)
–
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Investor
Shares
4,678,703
6,595,742
Institutional
Shares
2,262,622
1,073,350
Reinvestment
of
distributions:
Investor
Shares
1,028,190
–
Institutional
Shares
231,220
–
Redemption
of
shares:
Investor
Shares
(9,747,347)
(12,915,229)
Institutional
Shares
(2,197,154)
(6,238,951)
Decrease
in
Net
Assets
from
Capital
Share
Transactions
(3,743,766)
(11,485,088)
Decrease
in
Net
Assets
(7,423,997)
(4,771,982)
NET
ASSETS
Beginning
of
Year
58,491,265
63,263,247
End
of
Year
$
51,067,268
$
58,491,265
SHARE
TRANSACTIONS
Sale
of
shares:
Investor
Shares
506,949
714,946
Institutional
Shares
234,535
116,750
Reinvestment
of
distributions:
Investor
Shares
114,882
–
Institutional
Shares
25,353
–
Redemption
of
shares:
Investor
Shares
(1,054,193)
(1,416,182)
Institutional
Shares
(231,797)
(709,742)
Decrease
in
Shares
(404,271)
(1,294,228)
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
10
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
year
.
For
the
Years
Ended
March
31,
2022
2021
2020
2019
2018
INVESTOR
SHARES
NET
ASSET
VALUE,
Beginning
of
Year
$
9.55
$
8.52
$
9.10
$
10.06
$
9.27
INVESTMENT
OPERATIONS
Net
investment
loss
(a)
(0.12)
(0.10)
(0.05)
(0.08)
(0.12)
Net
realized
and
unrealized
gain
(loss)
(0.29)
1.13
(0.53)
(0.80)
1.00
Total
from
Investment
Operations
(0.41)
1.03
(0.58)
(0.88)
0.88
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.22)
–
–
(0.08)
(0.09)
NET
ASSET
VALUE,
End
of
Year
$
8.92
$
9.55
$
8.52
$
9.10
$
10.06
TOTAL
RETURN
(4.27)%
12.09%
(6.37)%
(8.73)%
9.54%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000's
omitted)
$41,964
$49,033
$49,712
$64,575
$85,874
Ratios
to
Average
Net
Assets:
Net
investment
loss
(1.28)%
(1.08)
%
(0.57)%
(0.88)%
(1.21)%
Net
expenses
1.31%
1.31%
1.34%
1.35%
1.27%
Interest
expenses
0.02
%
0.03%
0.06%
0.08%
–%
Net
expenses
without
interest
expenses
1.
29
%
1.28%
1.28%
1.27%
1.27%
Gross
expenses
(b)
1.32%
1.33%
1.36%
1.38%
1.30%
PORTFOLIO
TURNOVER
RATE
(c)
68%
107%
53%
65%
35%
INSTITUTIONAL
SHARES
NET
ASSET
VALUE,
Beginning
of
Year
$
9.72
$
8.6
6
$
9.23
$
10.18
$
9.38
INVESTMENT
OPERATIONS
Net
investment
loss
(a)
(0.10)
(0.08)
(0.03)
(0.06)
(0.10)
Net
realized
and
unrealized
gain
(loss)
(0.28)
1.14
(0.54)
(0.80)
1.02
Total
from
Investment
Operations
(0.38)
1.0
6
(0.57)
(0.86)
0.92
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.24)
–
–
(0.09)
(0.12)
NET
ASSET
VALUE,
End
of
Year
$
9.10
$
9.72
$
8.66
$
9.23
$
10.18
TOTAL
RETURN
(3.90)%
12.
24
%
(6.18)%
(d)
(8.47)%
9.82%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Year
(000's
omitted)
$9,103
$9,458
$13,551
$16,462
$22,624
Ratios
to
Average
Net
Assets:
Net
investment
loss
(1.03)%
(0.83)
%
(0.31)%
(0.64)%
(0.95)%
Net
expenses
1.06%
1.06%
1.09%
1.10%
1.02%
Interest
expenses
0.0
2
%
0.03%
0.06%
0.08%
–%
Net
expenses
without
interest
expenses
1.0
4
%
1.03%
1.03%
1.02%
1.02%
Gross
expenses
(b)
1.07%
1.08%
1.11%
1.13%
1.05%
PORTFOLIO
TURNOVER
RATE
(c)
68%
107%
53%
65%
35%
(a)
Calculated
based
on
average
shares
outstanding
during
each
year.
(b)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
(c)
The
portfolio
turnover
rate
is
calculated
without
regard
to
any
securities
whose
maturities
or
expiration
dates
at
the
time
of
acquisition
were
one
year
or
less.
(d)
Includes
adjustments
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
and,
consequently,
the
net
asset
values
for
financial
reporting
purposes
and
the
returns
based
upon
those
net
asset
values
may
differ
from
the
net
asset
values
and
returns
for
shareholder
transactions.
Financial
Highlights
11
11
Note
1.
Organization
The
Merk
Hard
Currency
Fund
(the
“Fund”)
is
a
non-diversified
portfolio
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
the
Fund’s
shares
of
beneficial
interest
without
par
value.
The
Fund
currently
offers
two
classes
of
shares:
Investor
Shares
and
Institutional
Shares.
The
Fund
seeks
to
profit
from
a
rise
in
hard
currencies
relative
to
the
U.S.
dollar.
The
Fund’s
Investor
Shares
and
Institutional
Shares
commenced
operations
on
May
10,
2005
and
April
1,
2010,
respectively.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Fund
is
an
investment
company
and
follows
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
Accounting
Standards
Codification
Topic
946,
“Financial
Services
–
Investment
Companies.”
These
financial
statements
are
prepared
in
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
(“GAAP”),
which
require
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities,
the
disclosure
of
contingent
liabilities
at
the
date
of
the
financial
statements,
and
the
reported
amounts
of
increases
and
decreases
in
net
assets
from
operations
during
the
fiscal
year.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Futures
contracts
are
valued
at
the
day’s
settlement
price
on
the
exchange
where
the
contract
is
traded.
Forward
currency
contracts
are
generally
valued
based
on
interpolation
of
forward
curve
data
points
obtained
from
major
banking
institutions
that
deal
in
foreign
currencies
and
currency
dealers.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
The
Fund
values
its
investments
at
fair
value
pursuant
to
procedures
adopted
by
the
Trust's
Board
of
Trustees
(the
“Board”)
if
(1)
market
quotations
are
not
readily
available
or
(2)
the
Adviser,
as
defined
in
Note
3,
believes
that
the
values
available
are
unreliable.
The
Trust’s
Valuation
Committee,
as
defined
in
the
Fund’s
registration
statement,
performs
certain
functions
as
they
relate
to
the
administration
and
oversight
of
the
Fund’s
valuation
procedures.
Under
these
procedures,
the
Valuation
Committee
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Valuation
Committee
may
work
with
the
Adviser
to
provide
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Valuation
Committee
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
NAV
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2022
12
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
March
31,
2022,
for
the
Fund’s
investments
is
included
at
the
end
of
the
Fund’s
Schedule
of
Investments.
Security
Transactions,
Investment
Income
and
Realized
Gain
and
Loss
–
Investment
transactions
are
accounted
for
on
the
trade
date.
Dividend
income
is
recorded
on
the
ex-dividend
date.
Income
and
capital
gains
on
some
foreign
securities
may
be
subject
to
foreign
withholding
taxes,
which
are
accrued
as
applicable.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par
and
discount
is
accreted
to
maturity
using
the
effective
interest
method.
Identified
cost
of
investments
sold
is
used
to
determine
the
gain
and
loss
for
both
financial
statement
and
federal
income
tax
purposes.
Foreign
Currency
Translations
–
Foreign
currency
amounts
are
translated
into
U.S.
dollars
as
follows:
(1)
assets
and
liabilities
at
the
rate
of
exchange
at
the
end
of
the
respective
period;
and
(2)
purchases
and
sales
of
securities
and
income
and
expenses
at
the
rate
of
exchange
prevailing
on
the
dates
of
such
transactions.
The
portion
of
the
results
of
operations
arising
from
changes
in
the
exchange
rates
and
the
portion
due
to
fluctuations
arising
from
changes
in
the
market
prices
of
securities
are
not
isolated.
Such
fluctuations
are
included
with
the
net
realized
and
unrealized
gain
or
loss
on
investments.
Foreign
Currency
Transactions
–
The
Fund
may
enter
into
transactions
to
purchase
or
sell
foreign
currency
contracts
and
options
on
foreign
currency.
Forward
currency
contracts
are
agreements
to
exchange
one
currency
for
another
at
a
future
date
and
at
a
specified
price.
A
fund
may
use
forward
currency
contracts
to
facilitate
transactions
in
foreign
securities,
to
manage
a
fund’s
foreign
currency
exposure
and
to
protect
the
U.S.
dollar
value
of
its
underlying
portfolio
securities
against
the
effect
of
possible
adverse
movements
in
foreign
exchange
rates.
These
contracts
are
intrinsically
valued
daily
based
on
forward
rates,
and
a
fund’s
net
equity
therein,
representing
unrealized
gain
or
loss
on
the
contracts
as
measured
by
the
difference
between
the
forward
foreign
exchange
rates
at
the
dates
of
entry
into
the
contracts
and
the
forward
rates
at
the
reporting
date,
is
recorded
as
a
component
of
NAV.
These
instruments
involve
market
risk,
credit
risk,
or
both
kinds
of
risks,
in
excess
of
the
amount
recognized
in
the
Statement
of
Assets
and
Liabilities.
Risks
arise
from
the
possible
inability
of
counterparties
to
meet
the
terms
of
their
contracts
and
from
movement
in
currency
and
securities
values
and
interest
rates.
Due
to
the
risks
associated
with
these
transactions,
a
fund
could
incur
losses
up
to
the
entire
contract
amount,
which
may
exceed
the
net
unrealized
value
included
in
its
NAV.
The
values
of
each
individual
forward
currency
contract
outstanding
as
of
March
31,
2022,
are
disclosed
in
the
Fund’s
Schedule
of
Investments.
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
quarterly.
Distributions
to
shareholders
of
net
capital
gains
and
foreign
currency
gains,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
Federal
Taxes
–
The
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income
and
capital
gains,
if
any,
the
Fund
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
The
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
The
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
March
31,
2022,
there
are
no
uncertain
tax
positions
that
would
require
financial
statement
recognition,
de-recognition
or
disclosure.
Income
and
Expense
Allocation
–
The
Trust
accounts
separately
for
the
assets,
liabilities
and
operations
of
each
of
its
investment
portfolios.
Expenses
that
are
directly
attributable
to
more
than
one
investment
portfolio
are
allocated
among
the
respective
investment
portfolios
in
an
equitable
manner.
13
The
Fund's
class-specific
expenses
are
charged
to
the
operations
of
that
class
of
shares.
Income
and
expenses
(other
than
expenses
attributable
to
a
specific
class)
and
realized
and
unrealized
gains
or
losses
on
investments
are
allocated
to
each
class
of
shares
based
on
the
class’
respective
net
assets
to
the
total
net
assets
of
the
Fund.
Commitments
and
Contingencies
–
In
the
normal
course
of
business,
the
Fund
enters
into
contracts
that
provide
general
indemnifications
by
the
Fund
to
the
counterparty
to
the
contract.
The
Fund’s
maximum
exposure
under
these
arrangements
is
dependent
on
future
claims
that
may
be
made
against
the
Fund
and,
therefore,
cannot
be
estimated;
however,
based
on
experience,
the
risk
of
loss
from
such
claims
is
considered
remote.
The
Fund
has
determined
that
none
of
these
arrangements
requires
disclosure
on
the
Fund’s
balance
sheet.
Note
3.
Fees
and
Expenses
Investment
Adviser
–
Merk
Investments
LLC
(the
“Adviser”)
is
the
investment
adviser
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee
from
the
Fund
at
an
annual
rate
of
1.00%
of
the
Fund’s
average
daily
net
assets.
Under
the
terms
of
the
Investment
Advisory
Agreement
for
the
Fund,
the
Adviser
is
obligated
to
pay
all
expenses
of
the
Fund
except
Board-approved
shareholder
servicing
fees,
borrowing
costs,
taxes,
brokerage
costs,
commissions,
and
extraordinary
and
non-recurring
expenses
and
expenses
that
the
Fund
is
authorized
to
pay
under
Rule
12b-1.
Distribution
–
Foreside
Fund
Services,
LLC
serves
as
the
Fund’s
distributor
(the
“Distributor”).
The
Fund
has
adopted
a
Distribution
Plan
(the
“Plan”)
for
Investor
Shares
in
accordance
with
Rule
12b-1
of
the
Act.
Under
the
Plan,
the
Fund
pays
the
Distributor
and/or
any
other
entity
as
authorized
by
the
Board
a
fee
of
up
to
0.25%
of
the
average
daily
net
assets
of
Investor
Shares.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
the
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
Through
the
calendar
year
ended
December
31,
2021,
the
Trust
paid
each
Independent
Trustee
an
annual
retainer
of
$31,000
for
services
to
the
Trust
($41,000
for
the
Chairman).
Effective
January
1,
2022,
the
Trust
will
pay
each
Independent
Trustee
an
annual
retainer
of
$45,000
for
services
to
the
Trust
($55,000
for
the
Chairman).
The
Audit
Committee
Chairman
receives
an
additional
$2,000
annually.
The
Trustees
and
Chairman
may
receive
additional
fees
for
special
Board
meetings.
Each
Trustee
is
also
reimbursed
for
all
reasonable
out-of-pocket
expenses
incurred
in
connection
with
his
duties
as
a
Trustee,
including
travel
and
related
expenses
incurred
in
attending
Board
meetings.
Certain
officers
of
the
Trust
are
also
officers
or
employees
of
the
above
named
service
providers,
and
during
their
terms
of
office
received
no
compensation
from
the
Fund.
Pursuant
to
the
terms
of
the
investment
advisory
agreement,
the
Trustees'
fees
attributable
to
the
Fund
are
paid
by
the
Adviser.
Note
4.
Fees
Waived
During
the
fiscal
year,
the
Fund
invested
in
VanEck
Merk
Gold
Trust
ETF,
an
exchange
traded
product
sponsored
by
the
Adviser.
As
of
March
31,
2022
,
the
Fund
owned
approximately
0.06%
of
VanEck
Merk
Gold
Trust
ETF.
The
Adviser
has
agreed
to
waive
fees
in
an
amount
equal
to
the
fee
it
receives
from
VanEck
Merk
Gold
Trust
ETF
based
on
the
Fund’s
investment
in
VanEck
Merk
Gold
Trust
ETF
(NYSE:OUNZ).
For
the
year
ended
March
31,
2022
,
the
Adviser
waived
fees
of
$2,665
for
the
Fund.
Note
5.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
year
ended
March
31,
2022
,
were
as
follows:
Purchases
Sales
$
17,152,697
$
18,159,744
14
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.
The
total
notional
value
of
activity
for
the
year
ended
March
31,
2022
for
any
derivative
type
that
was
held
during
the
year
is
as
follows:
The
Fund’s
use
of
derivatives
during
the
year
ended
March
31,
2022
,
was
limited
to
forward
currency
contracts.
Following
is
a
summary
of
the
effect
of
derivatives
on
the
Statement
of
Assets
and
Liabilities
for
the
Fund
as
of
March
31,
2022
:
Realized
and
unrealized
gains
and
losses
on
derivatives
contracts
during
the
year
ended
March
31,
2022,
by
the
Fund
are
recorded
in
the
following
locations
on
the
Statement
of
Operations:
The
Fund
is
subject
to
enforceable
master
netting
agreements,
or
netting
arrangements,
with
certain
counterparties.
These
agreements
govern
the
terms
of
certain
transactions,
and
reduce
the
counterparty
risk
associated
with
relevant
transactions
by
specifying
offsetting
mechanisms
and
collateral
posting
arrangements
at
pre-arranged
exposure
levels.
Master
netting
agreements
may
not
be
specific
to
each
different
asset
type;
in
such
instances,
they
would
allow
the
Fund
to
close
out
and
net
its
total
exposure
to
a
specified
counterparty
in
the
event
of
a
default
with
respect
to
any
and
all
the
transactions
governed
under
a
single
agreement
with
the
counterparty.
Collateral
terms
are
contract
specific
for
forward
currency
contracts.
Although
collateral
or
margin
requirements
may
differ
by
type
of
derivative
or
investment,
as
applicable,
the
Fund
typically
receives
cash
posted
as
collateral
(with
rights
of
rehypothecation)
or
agrees
to
have
such
collateral
posted
to
a
third
party
custodian
under
a
tri-party
arrangement
that
enables
the
Fund
to
take
control
of
such
collateral
in
the
event
of
a
counterparty
default.
ISDA
Agreements
govern
OTC
derivative
transactions
entered
into
by
the
Fund
and
select
counterparties.
ISDA
Agreements
maintain
provisions
for
general
obligations,
representations,
agreements,
collateral
and
events
of
default
or
termination.
Under
the
Fund’s
separate
and
distinct
ISDA
Agreements
for
forward
currency
contracts,
the
Fund
may
be
required
to
post
collateral
on
derivatives
if
the
Fund
is
in
a
net
liability
position
with
the
counterparty.
Additionally,
counterparties
may
immediately
terminate
derivatives
contracts
if
the
Fund
fails
to
maintain
sufficient
asset
coverage
for
its
contracts.
An
election
to
terminate
early
could
be
material
to
the
financial
statements.
In
limited
circumstances,
the
ISDA
Agreement
may
contain
additional
provisions
that
add
additional
counterparty
protection
beyond
coverage
of
existing
daily
exposure
if
the
counterparty
has
a
decline
in
credit
quality
below
a
predefined
level.
These
amounts,
if
any,
may
be
segregated
with
a
third
party
custodian.
The
gross
fair
value
of
OTC
derivative
instruments,
amounts
available
for
offset,
collateral
received
or
pledged
and
net
exposure
by
instrument
as
of
period
end,
is
disclosed
below.
The
following
table
presents,
as
of
March
31,
2022,
the
gross
and
net
derivative
assets
and
liabilities
that
are
netted
on
the
statement
of
assets
and
liabilities
or
that
are
subject
to
a
master
netting
agreement.
The
table
also
presents
information
about
the
related
collateral
amounts.
Forward
Currency
Contracts
$
458
,520,245
Location:
Currency
Contracts
Asset
derivatives:
Unrealized
gain
on
forward
currency
contracts
$
1
7,613
Liability
derivatives:
Unrealized
loss
on
forward
currency
contracts
$
86,237
Location:
Currency
Contracts
Net
realized
gain
(loss)
on:
Foreign
currency
transactions
$
(
4
24,650
)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Foreign
currency
translations
(
18,583
)
Gross
Asset
(Liability)
as
Presented
in
the
Statements
of
Assets
and
Liabilities
Financial
Instruments
(Received)
Pledged*
Cash
Collateral
(Received)
Pledged*
Net
Amount
Merk
Hard
Currency
Fund
Assets:
Over-the-counter
derivatives**
$
17,613
$
–
$
–
$
17,613
Liabilities:
Over-the-counter
derivatives**
$
(
86,237
)
$
86,237
$
–
$
–
15
Note
7.
Federal
Income
Tax
As
of
March
31,
2022
,
the
cost
for
federal
income
tax
purposes
is
$49,644,621
and
the
components
of
net
unrealized
depreciation
was
as
follows:
Distributions
paid
during
the
fiscal
year
were
characterized
for
tax
purposes
as
follows:
As
of
March
31,
2022
,
accumulated
loss
on
a
tax
basis
were
as
follows:
The
difference
between
components
of
accumulated
loss
on
a
tax
basis
and
the
amounts
reflected
in
the
Statement
of
Assets
and
Liabilities
are
primarily
due
to
grantor
trust
adjustments
and
forward
contracts.
For
tax
purposes,
the
prior
year
deferred
late
year
ordinary
loss
was
$1,209,652
(realized
during
the
period
November
1,
2021
through
March
31,
2022
).
This
loss
was
recognized
for
tax
purposes
on
the
first
business
day
of
the
Fund’s
next
fiscal
year,
April
1,
202
2
.
As
of
March
31,
2022
,
the
Fund
had
$521,635
in
short
term
capital
loss
carryforwards
and
$7,642,091
available
in
long
term
capital
loss
carry
forwards
that
have
no
expiration
date.
For
the
year
ended
March
31,
2022,
the
Fund
recorded
the
following
reclassifications
to
the
accounts
listed
below.
The
reclassifications
were
primarily
a
result
of
a
taxable
overdistribution
in
order
to
distribute
the
Fund’s
excise
tax
requirement.
Note
8.
Underlying
Investments
in
Other
Pooled
Investment
Vehicles
The
Fund
currently
invests
a
portion
of
its
assets
in
the
VanEck
Merk
Gold
Trust
ETF.
The
Fund
may
eliminate
its
investments
at
any
time
if
the
Adviser
determines
that
it
is
in
the
best
interest
of
the
Fund
and
its
shareholders.
The
performance
of
the
Fund
may
be
directly
affected
by
the
performance
of
the
VanEck
Merk
Gold
Trust
ETF.
The
financial
statements
of
the
VanEck
Merk
Gold
Trust
ETF,
including
the
schedule
of
investments,
can
be
found
at
the
Merk
Funds
website
www.merkfunds.
com
,
or
the
Securities
and
Exchange
Commission’s
website
www.sec.gov
and
should
be
read
in
conjunction
with
the
Fund’s
financial
statements.
As
of
March
31,
2022
the
percentage
of
the
Fund’s
net
assets
invested
in
the
VanEck
Merk
Gold
Trust
ETF
was
0.8%
.
Note
9.
Subsequent
Events
Subsequent
events
occurring
after
the
date
of
this
report
through
the
date
these
financial
statements
were
issued
have
been
evaluated
for
potential
impact,
and
the
Fund
has
had
no
such
events.
Management
has
evaluated
the
need
for
additional
disclosures
and/or
adjustments
resulting
from
subsequent
events.
Based
on
this
evaluation,
no
additional
disclosures
or
adjustments
were
required
to
the
financial
statements
as
of
the
date
the
financial
statements
were
issued.
*
The
actual
financial
instruments
and
cash
collateral
(received)
pledged
may
be
in
excess
of
the
amounts
shown
in
the
table.
The
table
only
reflects
collateral
amounts
up
to
the
amount
of
the
financial
instrument
disclosed
on
the
Statement
of
Assets
and
Liabilities.
**
Over-the-counter
derivatives
may
consist
of
forward
currency
contracts.
The
amounts
disclosed
above
represent
the
exposure
to
one
or
more
counterparties.
For
further
detail
on
individual
derivative
contracts
and
the
corresponding
unrealized
appreciation
(depreciation),
see
the
Schedule
of
Investments.
Gross
Unrealized
Appreciation
$
716,614
Gross
Unrealized
Depreciation
(1,127,849)
Net
Unrealized
Depreciation
$
(411,235)
Ordinary
Income
$
1,299,612
Capital
and
Other
Losses
Unrealized
Depreciation
Total
$
(9,373,378)
$
(375,984)
$
(9,749,362)
Distributable
Earnings
$
1,142,463
Paid-in-Capital
$
(1,142,463)
16
16
To
the
Board
of
Trustees
of
Forum
Funds
and
the
Shareholders
of
Merk
Hard
Currency
Fund
Opinion
on
the
Financial
Statements
We
have
audited
the
accompanying
statement
of
assets
and
liabilities
of
Merk
Hard
Currency
Fund,
a
series
of
shares
of
beneficial
interest
in
Forum
Funds
(the
“Fund”),
including
the
schedule
of
investments,
as
of
March
31,
2022,
and
the
related
statement
of
operations
for
the
year
then
ended,
the
statements
of
changes
in
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
the
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
and
the
related
notes
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Fund
as
of
March
31,
2022,
and
the
results
of
its
operations
for
the
year
then
ended,
the
changes
in
its
net
assets
for
each
of
the
years
in
the
two-year
period
then
ended
and
its
financial
highlights
for
each
of
the
years
in
the
five-year
period
then
ended,
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinion
These
financial
statements
are
the
responsibility
of
the
Fund’s
management.
Our
responsibility
is
to
express
an
opinion
on
the
Fund's
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Fund
in
accordance
with
the
U.S.
federal
securities
law
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
The
Fund
is
not
required
to
have,
nor
were
we
engaged
to
perform,
an
audit
of
its
internal
control
over
financial
reporting.
As
part
of
our
audits,
we
are
required
to
obtain
an
understanding
of
internal
control
over
financial
reporting
but
not
for
the
purpose
of
expressing
an
opinion
on
the
effectiveness
of
the
Fund’s
internal
control
over
financial
reporting.
Accordingly,
we
express
no
such
opinion.
Our
audits
included
performing
procedures
to
assess
the
risk
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
March
31,
2022
by
correspondence
with
the
custodian
and
broker.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinion.
BBD,
LLP
We
have
served
as
the
auditor
of
one
or
more
of
the
Funds
in
the
Forum
Funds
since
2009.
Philadelphia,
Pennsylvania
May
26,
2022
REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
March
31,
2022
17
17
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(866)
637-5386
and
on
the
U.S.
Securities
and
Exchange
Commission’s
(the
“SEC”)
website
at
www.sec.gov.
The
Fund’s
proxy
voting
record
for
the
most
recent
twelve-month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(866)
637-5386
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
The
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Fund
,
you
incur
ongoing
costs,
including
management
fees,
distribution
and/or
service
(12b-1)
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Fund
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
October
1,
2021
through
March
31,
2022.
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.
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
0.26%
as
qualified
interest
income
exempt
from
U.S.
tax
for
foreign
shareholders
(QII).
Beginning
Account
Value
October
1,
2021
Ending
Account
Value
March
31,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Investor
Shares
Actual
$
1,000.00
$
980.92
$
6.42
1.30%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,018.45
$
6.54
1.30%
Institutional
Shares
Actual
$
1,000.00
$
983.26
$
5.19
1.05%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,019.70
$
5.29
1.05%
*
Expenses
are
equal
to
the
Fund’s
annualized
expense
ratio
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
the
number
of
days
in
the
most
recent
fiscal
half-year
(182)
divided
by
365
to
reflect
the
half-year
period.
ADDITIONAL
INFORMATION
(Unaudited)
March
31,
2022
18
Trustees
and
Officers
of
the
Trust
The
Board
is
responsible
for
oversight
of
the
management
of
the
Trust’s
business
affairs
and
of
the
exercise
of
all
the
Trust’s
powers
except
those
reserved
for
the
shareholders.
The
following
table
provides
information
about
each
Trustee
and
certain
officers
of
the
Trust.
Each
Trustee
and
officer
holds
office
until
the
person
resigns,
is
removed
or
is
replaced.
Unless
otherwise
noted,
the
persons
have
held
their
principal
occupations
for
more
than
five
years.
The
address
for
all
Trustees
and
officers
is
Three
Canal
Plaza,
Suite
600,
Portland,
Maine
04101.
The
Fund’s
Statement
of
Additional
Information
includes
additional
information
about
the
Trustees
and
is
available,
without
charge
and
upon
request,
by
calling
(866)
637-5386.
(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)
2017-2021;
independent
consultant
providing
interim
CFO
services,
principally
to
non-profit
organizations,
2011-
2017.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Jennifer
Brown-Strabley
Born:
1964
Trustee
Since
2018
Principal,
Portland
Global
Advisors
(a
registered
investment
adviser),
1996-2010.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
Interested
Trustees
(1)
Jessica
Chase
Born:
1970
Trustee
Since
2018
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
1
Trustee,
Forum
Funds
II
and
U.S.
Global
Investors
Funds
19
Name
and
Year
of
Birth
Position
with
the
Trust
Length
of
Time
Served
Principal
Occupation(s)
During
Past
5
Years
Officers
Jessica
Chase
Born:
1970
President;
Principal
Executive
Officer
Since
2015
Director,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Karen
Shaw
Born:
1972
Treasurer;
Principal
Financial
Officer
Since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Zachary
Tackett
Born:
1988
Vice
President;
Secretary
and
Anti-Money
Laundering
Compliance
Officer
Since
2014
Senior
Counsel,
Apex
Fund
Services
since
2019;
Counsel,
Atlantic
Fund
Services
2014-2019.
Michael
J.
McKeen
Born:
1971
Vice
President
Since
2009
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
Timothy
Bowden
Born:
1969
Vice
President
Since
2009
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2008-
2019.
Geoffrey
Ney
Born:
1975
Vice
President
Since
2013
Manager,
Apex
Fund
Services
since
2019;
Manager,
Atlantic
Fund
Services
2013-
2019.
Carlyn
Edgar
Born:
1963
Chief
Compliance
Officer
and
Vice
President
Chief
Compliance
Officer
2008-2016
and
2021-current;
Vice
President
since
2008
Senior
Vice
President,
Apex
Fund
Services
since
2019;
Senior
Vice
President,
Atlantic
Fund
Services
2008-2019.
FOR
MORE
INFORMATION
Merk
Hard
Currency
Fund
®
P.O.
BOX
588
PORTLAND,
ME
04112
208-ANR-0322
INVESTMENT
ADVISER
Merk
Investments
LLC
1150
Chestnut
Street
Menlo
Park,
CA
94025
www.merkfunds.com
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.
ITEM 2. CODE OF ETHICS.
(a) As of the end of the period covered by this report, Forum Funds (the “Registrant”) has adopted a code of ethics, which applies to its Principal Executive Officer and Principal Financial Officer (the “Code of Ethics”).
(c) There have been no amendments to the Registrant’s Code of Ethics during the period covered by this report.
(d) There have been no waivers to the Registrant’s Code of Ethics during the period covered by this report.
(e) Not applicable.
(f) (1) A copy of the Code of Ethics is being filed under Item 13(a) hereto.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees has determined that Mr. Mark Moyer is an "audit committee financial expert" as that term is defined under applicable regulatory guidelines. Mr. Moyer is a non- “interested” Trustee (as defined in Section 2(a)(19) under the Investment Company Act of 1940, as amended (the “Act”)), and serves as Chairman of the Audit Committee.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees - The aggregate fees billed for each of the last two fiscal years (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant for the audit of the Registrant’s annual financial statements, or services that are normally provided by the principal accountant in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $100,500 in 2021 and $100,500 in 2022.
(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 2021 and $0 in 2022.
(c) Tax Fees - The aggregate fees billed in the Reporting Periods for professional services rendered by the principal accountant to the Registrant for tax compliance, tax advice and tax planning were $18,000 in 2021 and $18,000 in 2022. 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 2021 and $0 in 2022.
(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 2021 and $0 in 2022. There were no fees billed in either of the Reporting Periods for non-audit services rendered by the principal accountant to the Registrant’s investment adviser or any Affiliate.
(h) During the Reporting Period, the Registrant's principal accountant provided no non-audit services to the investment advisers or any entity controlling, controlled by or under common control with the investment advisers to the series of the Registrant to which this report relates.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. INVESTMENTS.
(a) Included as part of report to shareholders under Item 1.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
TEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Registrant does not accept nominees to the board of trustees from shareholders.
ITEM 11. CONTROLS AND PROCEDURES
(a) The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act are effective, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in
Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) Code of Ethics.
(a)(3) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Forum Funds
By | /s/ Jessica Chase | |
Jessica Chase, Principal Executive Officer | ||
Date | May 27, 2022 |
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 | May 27, 2022 |
By | /s/ Karen Shaw | |
Karen Shaw, Principal Financial Officer | ||
Date | May 27, 2022 |