As filed with the Securities and Exchange Commission on December 2, 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, 2022 – September 30, 2022
ITEM 1. REPORT TO STOCKHOLDERS.
September
30,
2022
(Unaudited)
Absolute
Strategies
Fund,
Absolute
Funds,
and
Absolute
Investment
Advisers
are
registered
service
marks.
Other
marks
referred
to
herein
are
the
trademarks,
service
marks
or
registered
trademarks
of
their
respective
owners.
ABSOLUTE
STRATEGIES
FUND
PORTFOLIO
HOLDINGS
SUMMARY
September
30,
2022
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
futures
contracts,
purchased
options
and
put
options
written,
cash, prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
futures
contracts
and
put
options
written represent
15.7%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Asset
Backed
Obligations
0.4%
Investment
Companies
35.7%
Exchange
Traded
Funds
2.0%
Money
Market
Fund
44.4%
Purchased
Options
2.1%
Written
Options
(0.3)%
Other
Assets
&
Liabilities,
Net
*
15.7%
100.0%
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
INVESTMENTS
September
30,
2022
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Asset
Backed
Obligations
-
0.4%
$
26,422
Adjustable
Rate
Mortgage
Trust,
Series 2005-12 2A1
(a)
3.12%
03/25/36
$
20,355
12,102
Adjustable
Rate
Mortgage
Trust,
Series 2006-1 3A3
(a)
2.96
03/25/36
10,167
7,271
Banc
of
America
Funding
Corp.,
Series 2006-E 2A1
(a)
3.46
06/20/36
6,674
15,019
Banc
of
America
Funding
Corp.,
Series 2007-E 4A1
(a)
3.75
07/20/47
14,495
28,750
CitiMortgage
Alternative
Loan
Trust,
Series 2006-A7 1A12
6.00
12/25/36
23,734
10,650
CitiMortgage
Alternative
Loan
Trust,
Series 2007-A4 1A6
5.75
04/25/37
9,473
9,095
Countrywide
Alternative
Loan
Trust,
Series 2005-50CB 1A1
5.50
11/25/35
7,536
12,885
Countrywide
Home
Loan
Mortgage
Pass-Through
Trust,
Series 2007-HY5 1A1
(a)
3.86
09/25/47
10,588
28,701
IndyMac
Index
Mortgage
Loan
Trust,
Series 2006-AR25 3A1
(a)
3.46
09/25/36
20,281
6,723
JPMorgan
Mortgage
Trust,
Series 2007-A2 4A1M
(a)
3.16
04/25/37
5,945
14,507
Structured
Adjustable
Rate
Mortgage
Loan
Trust,
Series 2007-3 3A1
(a)
3.43
04/25/47
7,678
Total
Asset
Backed
Obligations
(Cost
$108,354)
136,926
Shares
Security
Description
Value
Investment
Companies
-
35.7%
689,143
Absolute
Capital
Opportunities
Fund
(b)(c)
6,898,319
107,086
Absolute
Convertible
Arbitrage
Fund
(c)
1,165,094
500,000
Absolute
Flexible
Fund
(b)(c)
4,955,000
Total
Investment
Companies
(Cost
$12,984,092)
13,018,413
Shares
Security
Description
Value
Exchange
Traded
Funds
-
2.0%
26,763
Absolute
Select
Value
ETF
(b)
672,715
2,000
VanEck
Gold
Miners
ETF/USA
48,240
Total
Exchange
Traded
Funds
(Cost
$833,154)
720,955
Shares
Security
Description
Value
Money
Market
Fund
-
44.4%
16,188,900
First
American
Treasury
Obligations
Fund,
Class X,
2.87%
(d)
(Cost
$16,188,900)
16,188,900
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
2.1%
Call
Options
Purchased
-
0.1%
200
SPDR
S&P
500
ETF
Trust
$
405.00
10/22
$
8,100,000
200
500
SPDR
S&P
500
ETF
Trust
400.00
10/22
20,000,000
13,000
250
SPDR
S&P
500
ETF
Trust
390.00
10/22
9,750,000
18,000
Total
Call
Options
Purchased
(Premiums
Paid
$232,140)
31,200
Put
Options
Purchased
-
2.0%
500
Apple,
Inc.
125.00
11/22
6,910,000
154,000
500
Apple,
Inc.
100.00
02/23
6,910,000
115,000
1,000
Financial
Select
Sector
SPDR
Fund
ETF
31.00
12/22
3,036,000
186,500
250
SPDR
S&P
500
ETF
Trust
360.00
11/22
8,929,500
285,000
Total
Put
Options
Purchased
(Premiums
Paid
$525,393)
740,500
Total
Purchased
Options
(Premiums
Paid
$757,533)
771,700
Investments,
at
value
-
84.6%
(Cost
$30,872,033)
$
30,836,894
Total
Written
Options
-
(0.3)%
(Premiums
Received
$(88,991))
(120,250)
Other
Assets
&
Liabilities,
Net
-
15.7%
5,738,887
Net
Assets
-
100.0%
$
36,455,531
ABSOLUTE
STRATEGIES
FUND
SCHEDULE
OF
PUT
OPTIONS
WRITTEN
September
30,
2022
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Written
Options
-
(0.3)%
Put
Options
Written
-
(0.3)%
(250)
SPDR
S&P
500
ETF
Trust
(Premiums
Received
$(88,991))
$
340.00
11/22
$
8,500,000
$
(120,250)
Total
Written
Options
-
(0.3)%
(Premiums
Received
$(88,991))
$
(120,250)
ABSOLUTE
STRATEGIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
PUT
OPTIONS
WRITTEN
September
30,
2022
See
Notes
to
Financial
Statements.
At
September
30,
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
September
30,
2022,
the
value
of
investments
in
affiliated
companies
was
$13,691,128
representing
43.4%
of
net
assets,
and
the
total
cost
was
$13,765,836.
Net
unrealized
depreciation
was
$(74,708),
the
net
change
in
unrealized
depreciation
was
$(582,626),
net
realized
gain
was
$205,994,
total
capital
gain
distributions
were
$0
and
investment
income
was
$5,559.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
other
financial
instruments
and
liabilities
as
of
September
30,
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.
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
September
30,
2022.
(b)
Affiliated
Company.
(c)
Non-income
producing
security.
(d)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
September
30,
2022.
Contracts
Description
Expiration
Date
Notional
Contract
Value
Value
Net
Unrealized
Appreciation
(50)
S&P
500
E-mini
Future
12/16/22
$
(9,771,498)
$
(9,003,750)
$
767,748
Exchange
Traded
Fund
Absolute
Select
Value
ETF
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
9/30/2022
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
9,763
17,000
–
–
26,763
Cost
$
285,026
$
496,718
$
–
$
–
$
781,744
$
–
$
–
$
2,513
Value
292,109
–
–
(116,112)
672,715
Investment
Companies
Absolute
Capital
Opportunities
Fund
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
6/30/2022
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
689,232
–
(89)
–
689,143
Cost
$
6,892,324
$
–
$
(896)
$
–
$
6,891,428
$
(896)
$
–
$
–
Value
6,954,355
–
–
(55,140)
6,898,319
Absolute
Convertible
Arbitrage
Fund
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
6/30/2022
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
568,483
283
(461,680)
–
107,086
Cost
$
5,882,727
$
3,047
$
(4,793,110)
$
–
$
1,092,664
$
206,890
$
–
$
3,046
Value
6,321,531
–
–
(366,374)
1,165,094
Absolute
Flexible
Fund
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
6/30/2022
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
–
500,000
–
500,000
Cost
$
–
$
5,000,000
$
–
$
–
$
5,000,000
$
–
$
–
$
–
Value
$
–
–
–
(45,000)
4,955,000
ABSOLUTE
STRATEGIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
PUT
OPTIONS
WRITTEN
September
30,
2022
See
Notes
to
Financial
Statements.
* Other
Financial
Instruments
are
derivatives
not
reflected
in
the
Schedule
of
Investments,
such
as
futures,
which
are
valued
at
the
unrealized
appreciation/(depreciation)
and
written
options,
which
are
reported
at
their
market
value at
period
end.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Asset
Backed
Obligations
$
–
$
136,926
$
–
$
136,926
Investment
Companies
13,018,413
–
–
13,018,413
Exchange
Traded
Funds
720,955
–
–
720,955
Money
Market
Fund
–
16,188,900
–
16,188,900
Purchased
Options
585,200
186,500
–
771,700
Investments
at
Value
$
14,324,568
$
16,512,326
$
–
$
30,836,894
Other
Financial
Instruments*
Futures
767,748
–
–
767,748
Total
Other
Financial
Instruments*
$
767,748
$
–
$
–
$
767,748
Total
Assets
$
15,092,316
$
16,512,326
$
–
$
31,604,642
Liabilities
Other
Financial
Instruments*
Written
Options
–
(120,250)
–
(120,250)
Total
Other
Financial
Instruments*
$
–
$
(120,250)
$
–
$
(120,250)
Total
Liabilities
$
–
$
(120,250)
$
–
$
(120,250)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
PORTFOLIO
HOLDINGS
SUMMARY
September
30,
2022
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
call
and
put
options
written,
cash, prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
call
and
put
options
written
represent
4.3
% of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Common
Stock
53.5%
Money
Market
Funds
36.8%
Purchased
Options
8.5%
Written
Options
(2.7)%
Other
Assets
&
Liabilities,
Net
*
3.9%
100.0%
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
INVESTMENTS
September
30,
2022
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Common
Stock
-
53.5%
Communication
Services
-
6.8%
17,200
Alphabet,
Inc.,
Class A
(a)(b)
$
1,645,180
12,900
Alphabet,
Inc.,
Class C
(a)(b)
1,240,335
3,321
Charter
Communications,
Inc.,
Class A
(a)
1,007,425
2,500
Comcast
Corp.,
Class A
(c)
73,325
8,901
Liberty
Media
Corp.-Liberty
SiriusXM
(a)
338,861
18,781
Meta
Platforms,
Inc.,
Class A
(a)(b)
2,548,206
11,171
Motorola
Solutions,
Inc.
2,501,969
565
Netflix,
Inc.
(a)(c)
133,024
29,515
Warner
Bros
Discovery,
Inc.
(a)(c)
339,422
9,827,747
Consumer
Discretionary
-
14.0%
2,200
Alibaba
Group
Holding,
Ltd.,
ADR
(a)(c)
175,978
22,840
Amazon.com,
Inc.
(a)(b)
2,580,920
30,156
CarMax,
Inc.
(a)(b)
1,990,899
2,800
Carvana
Co.
(a)
56,840
14,340
Dollar
Tree,
Inc.
(a)
1,951,674
7,555
Expedia
Group,
Inc.
(a)
707,828
6,710
Fisker,
Inc.
(a)(c)
50,661
7,056
Foot
Locker,
Inc.
219,653
91,361
General
Motors
Co.
(b)
2,931,774
46,415
Gildan
Activewear,
Inc.
1,312,152
16,109
Hasbro,
Inc.
1,086,069
44,860
Las
Vegas
Sands
Corp.
(a)
1,683,147
6,421
Lowe's
Cos.,
Inc.
1,205,928
7,300
MGM
Resorts
International
(c)
216,956
20,650
PACCAR,
Inc.
1,728,199
3,500
Peloton
Interactive,
Inc.,
Class A
(a)
24,255
3,901
Spark
Networks
SE,
ADR
(a)
7,451
11,800
The
Gap,
Inc.
96,878
24,168
The
Walt
Disney
Co.
(a)(b)
2,279,767
1,000
Wayfair,
Inc.,
Class A
(a)(c)
32,550
20,339,579
Consumer
Staples
-
1.0%
25,740
Coty,
Inc.,
Class A
(a)
162,677
15,595
Philip
Morris
International,
Inc.
(c)
1,294,541
1,457,218
Energy
-
2.4%
14,240
EOG
Resources,
Inc.
(d)
1,591,035
17,755
Occidental
Petroleum
Corp.
(c)(d)
1,091,045
3,700
Pioneer
Natural
Resources
Co.
(d)
801,161
3,483,241
Financials
-
12.4%
4,675
AerCap
Holdings
NV
(a)
197,893
4,455
Ally
Financial,
Inc.
123,982
6,490
American
Express
Co.
(b)
875,566
5,600
Aon
PLC,
Class A
1,500,072
18,299
Berkshire
Hathaway,
Inc.,
Class B
(a)(b)
4,886,199
13,541
Blackstone,
Inc.,
Class A
(b)
1,133,382
21,700
Intercontinental
Exchange,
Inc.
1,960,595
24,026
JPMorgan
Chase
&
Co.
2,510,717
900
PayPal
Holdings,
Inc.
(a)(c)
77,463
5,205
Rocket
Cos.,
Inc.,
Class
A
(a)
32,895
33,270
The
Charles
Schwab
Corp.
(c)
2,391,115
12,101
Visa,
Inc.,
Class A
2,149,743
4,400
Zillow
Group,
Inc.,
Class C
(a)
125,884
17,965,506
Health
Care
-
1.6%
9,824
Becton
Dickinson
and
Co.
2,189,082
2,892
Semler
Scientific,
Inc.
(a)
108,595
2,297,677
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
INVESTMENTS
September
30,
2022
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Industrials
-
3.8%
45,480
Hayward
Holdings,
Inc.
(a)
$
403,408
17,812
Jacobs
Solutions,
Inc.
1,932,424
5,140
KB
Home
133,229
5,623
Keysight
Technologies,
Inc.
(a)
884,835
9,942
Quanta
Services,
Inc.
(b)
1,266,511
5,265
United
Parcel
Service,
Inc.,
Class B
850,508
5,470,915
Information
Technology
-
11.5%
8,100
Activision
Blizzard,
Inc.
(c)(d)
602,154
1,900
Adobe,
Inc.
(a)
522,880
18,135
Analog
Devices,
Inc.
2,526,931
29,307
Apple,
Inc.
(b)(d)
4,050,227
14,613
Arista
Networks,
Inc.
(a)
1,649,662
9,371
Autodesk,
Inc.
(a)
1,750,503
15,215
GoDaddy,
Inc.,
Class A
(a)
1,078,439
17,032
Salesforce,
Inc.
(a)(c)
2,449,883
11,490
Splunk,
Inc.
(a)
864,048
5,500
Spotify
Technology
SA
(a)
474,650
16,471
SS&C
Technologies
Holdings,
Inc.
786,490
16,755,867
Total
Common
Stock
(Cost
$80,395,646)
77,597,750
Shares
Security
Description
Value
Money
Market
Funds
-
36.8%
12,011,790
Dreyfus
Treasury
Securities
Cash
Management
Fund,
Institutional
Shares,
1.71%
(e)
12,011,790
41,284,176
First
American
Treasury
Obligations
Fund,
Class X,
2.87%
(e)(f)
41,284,176
Total
Money
Market
Funds
(Cost
$53,295,966)
53,295,966
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Purchased
Options
-
8.5%
Call
Options
Purchased
-
0.2%
19
Alibaba
Group
Holding,
Ltd.
$
180.00
01/24
$
342,000
4,864
227
Bristol-Myers
Squibb
Co.
80.00
03/23
1,816,000
37,228
60
Morgan
Stanley
60.00
01/23
360,000
122,460
163
Occidental
Petroleum
Corp.
70.00
03/23
1,141,000
98,289
3,992
SPDR
S&P
500
ETF
Trust
435.00
11/22
173,652,000
11,976
4,489
SPDR
S&P
500
ETF
Trust
425.00
11/22
190,782,500
31,423
161
Walgreens
Boots
Alliance,
Inc.
45.00
01/23
724,500
1,610
Total
Call
Options
Purchased
(Premiums
Paid
$1,430,356)
307,850
Put
Options
Purchased
-
8.3%
2,993
SPDR
S&P
500
ETF
Trust
380.00
11/22
106,903,974
7,038,040
2,993
SPDR
S&P
500
ETF
Trust
370.00
11/22
106,903,974
4,984,841
Total
Put
Options
Purchased
(Premiums
Paid
$4,436,470)
12,022,881
Total
Purchased
Options
(Premiums
Paid
$5,866,826)
12,330,731
Investments,
at
value
-
98.8%
(Cost
$139,558,438)
$
143,224,447
Total
Written
Options
-
(2.7)%
(Premiums
Received
$(7,959,708))
(3,941,245)
Other
Assets
&
Liabilities,
Net
-
3.9%
5,723,362
Net
Assets
-
100.0%
$
145,006,564
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
SCHEDULE
OF
CALL
AND
PUT
OPTIONS
WRITTEN
September
30,
2022
See
Notes
to
Financial
Statements.
Contracts
Security
Description
Strike
Price
Exp.
Date
Notional
Contract
Value
Value
Written
Options
-
(2.7)%
Call
Options
Written
-
(0.5)%
(52)
Activision
Blizzard,
Inc.
$
95.00
01/24
$
386,568
$
(4,212)
(65)
Apple,
Inc.
150.00
01/23
898,300
(44,525)
(70)
EOG
Resources,
Inc.
138.50
04/23
782,110
(47,950)
(163)
Occidental
Petroleum
Corp.
100.00
03/23
1,001,635
(16,626)
(23)
Pioneer
Natural
Resources
Co.
230.00
01/23
498,019
(33,465)
(1,496)
SPDR
S&P
500
ETF
Trust
410.00
11/22
53,434,128
(29,920)
(2,993)
SPDR
S&P
500
ETF
Trust
385.00
11/22
106,903,974
(565,677)
Total
Call
Options
Written
(Premiums
Received
$(6,280,724))
(742,375)
Put
Options
Written
-
(2.2)%
(52)
Activision
Blizzard,
Inc.
65.00
01/24
338,000
(27,040)
(6)
Alibaba
Group
Holding,
Ltd.
120.00
01/23
72,000
(24,315)
(124)
Bank
of
America
Corp.
40.00
06/23
496,000
(125,860)
(135)
Bank
of
America
Corp.
38.00
06/23
513,000
(114,075)
(70)
Bristol-Myers
Squibb
Co.
65.00
01/23
455,000
(13,475)
(39)
Bristol-Myers
Squibb
Co.
70.00
01/24
273,000
(28,470)
(150)
Citigroup,
Inc.
60.00
01/23
900,000
(279,000)
(53)
Comcast
Corp.
57.50
01/23
304,750
(149,990)
(90)
CVS
Health
Corp.
90.00
01/23
810,000
(34,200)
(39)
Fisker,
Inc.
17.50
01/23
68,250
(40,170)
(74)
Intel
Corp.
40.00
01/23
296,000
(106,560)
(116)
Merck
&
Co.,
Inc.
80.00
01/23
928,000
(30,914)
(123)
MGM
Resorts
International
40.00
01/23
492,000
(129,765)
(124)
MGM
Resorts
International
35.00
01/23
434,000
(79,732)
(41)
Morgan
Stanley
95.00
01/23
389,500
(70,725)
(12)
Netflix,
Inc.
220.00
01/24
264,000
(53,430)
(70)
Occidental
Petroleum
Corp.
62.50
01/24
437,500
(95,200)
(161)
Paramount
Global
27.00
01/23
434,700
(133,147)
(9)
PayPal
Holdings,
Inc.
130.00
01/23
117,000
(39,578)
(20)
PayPal
Holdings,
Inc.
115.00
01/24
230,000
(70,800)
(17)
Penn
Entertainment,
Inc.
45.00
01/23
76,500
(30,005)
(34)
Philip
Morris
International,
Inc.
95.00
01/23
323,000
(45,560)
(60)
Philip
Morris
International,
Inc.
80.00
01/23
480,000
(26,400)
(22)
Salesforce,
Inc.
200.00
01/23
440,000
(123,915)
(999)
SPDR
S&P
500
ETF
Trust
355.00
11/22
35,464,500
(929,070)
(141)
The
Charles
Schwab
Corp.
75.00
01/23
1,057,500
(105,186)
(39)
The
Scotts
Miracle-Gro
Co.
70.00
03/23
273,000
(109,980)
(127)
Warner
Bros
Discovery,
Inc.
22.50
01/24
285,750
(142,240)
(189)
Weber,
Inc.
7.50
12/22
141,750
(40,068)
Total
Put
Options
Written
(Premiums
Received
$(1,678,984))
(3,198,870)
Total
Written
Options
-
(2.7)%
(Premiums
Received
$(7,959,708))
$
(3,941,245)
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
NOTES
TO
SCHEDULES
OF
INVESTMENTS
AND
CALL
AND
PUT
OPTIONS
WRITTEN
September
30,
2022
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
September
30,
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
written
options,
which
are
reported
at
their
market
value at
period
end.
ADR
American
Depositary
Receipt
ETF
Exchange
Traded
Fund
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
(b)
All
or
a
portion
of
this
security
is
held
as
collateral
for
written
options.
(c)
Subject
to
put
option
written
by
the
Fund.
(d)
Subject
to
call
option
written
by
the
Fund.
(e)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
September
30,
2022.
(f)
The
Fund
currently
invests
a
portion
of
its
assets
in
First
American
Treasury
Obligations
Fund.
The
Fund
may
redeem
its
investment
from
First
American
Treasury
Obligations
Fund
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,
including
the
portfolio
of
investments,
can
be
found
at
First
American
Treasury
Obligations
Fund’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
September
30,
2022,
the
Fund’s
net
assets
invested
in
First
American
Treasury
Obligations
Fund
were
28.4%.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Common
Stock
Communication
Services
$
9,827,747
$
–
$
–
$
9,827,747
Consumer
Discretionary
20,339,579
–
–
20,339,579
Consumer
Staples
1,457,218
–
–
1,457,218
Energy
3,483,241
–
–
3,483,241
Financials
17,965,506
–
–
17,965,506
Health
Care
2,297,677
–
–
2,297,677
Industrials
5,470,915
–
–
5,470,915
Information
Technology
16,755,867
–
–
16,755,867
Money
Market
Funds
–
53,295,966
–
53,295,966
Purchased
Options
307,850
12,022,881
–
12,330,731
Investments
at
Value
$
77,905,600
$
65,318,847
$
–
$
143,224,447
Total
Assets
$
77,905,600
$
65,318,847
$
–
$
143,224,447
Liabilities
Other
Financial
Instruments*
Written
Options
(2,418,053)
(1,523,192)
–
(3,941,245)
Total
Liabilities
$
(2,418,053)
$
(1,523,192)
$
–
$
(3,941,245)
Absolute
Convertible
Arbitrage
Fund
Portfolio
Holdings
Summary
September
30,
2022
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
securities
sold
short
and
futures
,
cash,
prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
securities
sold
short
and
futures
represent 40.8%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Long
Positions
Corporate
Convertible
Bonds
85.5%
Corporate
Non-Convertible
Bond
0.2%
Investment
Company
1.7%
Exchange
Traded
Fund
0.4%
Money
Market
Fund
4.7%
Short
Positions
Common
Stock
(33.7)%
Other
Assets
&
Liabilities,
Net
*
41.2%
100.0%
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
September
30,
2022
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Long
Positions
-
92.5%
Fixed
Income
Securities
-
85.7%
Corporate
Convertible
Bonds
-
85.5%
Communication
Services
-
8.2%
$
2,750,000
Harmonic,
Inc.
(a)
2.00%
09/01/24
$
4,358,086
1,000,000
Infinera
Corp.
2.13
09/01/24
916,500
10,000,000
Infinera
Corp.
2.50
03/01/27
9,172,167
2,000,000
Infinera
Corp.
(b)
3.75
08/01/28
1,987,000
5,542,000
InterDigital,
Inc.
2.00
06/01/24
5,202,552
3,500,000
InterDigital,
Inc.
(b)
3.50
06/01/27
3,059,000
5,100,000
Palo
Alto
Networks,
Inc.
0.38
06/01/25
8,644,500
9,000,000
Perficient,
Inc.
(b)
0.13
11/15/26
6,705,000
4,500,000
Q2
Holdings,
Inc.
0.13
11/15/25
3,600,000
7,338,000
Q2
Holdings,
Inc.
(a)
0.75
06/01/26
5,837,379
7,500,000
TechTarget,
Inc.
(b)(c)
5.66
12/15/26
5,831,199
6,000,000
Twitter,
Inc.
(c)
3.63
03/15/26
5,522,545
6,000,000
Upwork,
Inc.
0.25
08/15/26
4,410,300
2,000,000
Wayfair,
Inc.
(b)
3.25
09/15/27
1,587,000
6,150,000
Wix.com,
Ltd.
(c)
2.99 -
7.60
08/15/25
5,175,225
72,008,453
Consumer
Discretionary
-
12.1%
3,300,000
2U,
Inc.
2.25
05/01/25
2,264,703
7,000,000
Airbnb,
Inc.
(c)
2.28
03/15/26
5,831,000
8,110,000
Alarm.com
Holdings,
Inc.
(c)
1.40 -
5.07
01/15/26
6,670,475
6,245,000
American
Airlines
Group,
Inc.
(a)
6.50
07/01/25
6,329,307
2,144,000
American
Eagle
Outfitters,
Inc.
(a)
3.75
04/15/25
2,934,600
6,814,000
Chegg,
Inc.
(c)
7.53
09/01/26
5,205,787
10,000,000
Cracker
Barrel
Old
Country
Store,
Inc.
0.63
06/15/26
8,343,000
1,500,000
Eventbrite,
Inc.
5.00
12/01/25
1,385,625
5,000,000
Eventbrite,
Inc.
0.75
09/15/26
3,422,103
6,000,000
Fisker,
Inc.
(b)
2.50
09/15/26
3,124,965
6,000,000
Fiverr
International,
Ltd.
(c)
6.95
11/01/25
4,717,800
3,500,000
Groupon,
Inc.
1.13
03/15/26
2,217,103
9,190,000
IMAX
Corp.
0.50
04/01/26
7,616,672
5,186,000
LCI
Industries
1.13
05/15/26
4,454,774
5,000,000
Lucid
Group,
Inc.
(b)
1.25
12/15/26
3,050,000
9,000,000
Luminar
Technologies,
Inc.
(b)
1.25
12/15/26
5,746,500
4,000,000
National
Vision
Holdings,
Inc.
2.50
05/15/25
4,965,200
1,250,000
NCL
Corp.,
Ltd.
(b)
2.50
02/15/27
821,875
5,150,000
NCL
Corp.,
Ltd.
(b)
1.13
02/15/27
3,251,051
1,000,000
Penn
Entertainment,
Inc.
(a)
2.75
05/15/26
1,404,500
1,000,000
Royal
Caribbean
Cruises,
Ltd.
2.88
11/15/23
939,500
5,500,000
Royal
Caribbean
Cruises,
Ltd.
(b)
6.00
08/15/25
5,821,750
500,000
Spirit
Airlines,
Inc.
4.75
05/15/25
871,900
7,715,000
Stride,
Inc.
1.13
09/01/27
7,865,443
2,697,000
Topgolf
Callaway
Brands
Corp.
2.75
05/01/26
3,492,615
6,000,000
Virgin
Galactic
Holdings,
Inc.
(b)
2.50
02/01/27
3,348,000
106,096,248
Consumer
Staples
-
2.4%
4,922,000
FTI
Consulting,
Inc.
(a)
2.00
08/15/23
8,143,941
10,121,000
MGP
Ingredients,
Inc.
(b)
1.88
11/15/41
12,638,799
20,782,740
Energy
-
6.4%
7,500,000
Enphase
Energy,
Inc.
(c)
2.31
03/01/28
8,940,000
5,000,000
Green
Plains,
Inc.
2.25
03/15/27
5,767,500
8,510,000
Helix
Energy
Solutions
Group,
Inc.
(a)
6.75
02/15/26
8,658,925
9,000,000
Oil
States
International,
Inc.
4.75
04/01/26
7,263,000
8,000,000
Peabody
Energy
Corp.
(b)
3.25
03/01/28
11,776,000
4,000,000
SolarEdge
Technologies,
Inc.
(c)
3.31
09/15/25
4,374,000
7,890,000
Stem,
Inc.
(b)
0.50
12/01/28
5,893,830
3,500,000
Sunnova
Energy
International,
Inc.
(b)
2.63
02/15/28
3,129,000
55,802,255
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
September
30,
2022
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Financials
-
0.2%
$
1,500,000
Redfin
Corp.
(c)
2.80%
10/15/25
$
887,850
2,000,000
Redfin
Corp.
0.50
04/01/27
984,148
1,871,998
Health
Care
-
17.2%
6,000,000
1Life
Healthcare,
Inc.
3.00
06/15/25
5,835,000
8,000,000
Accuray,
Inc.
3.75
06/01/26
6,691,398
11,255,000
Allscripts
Healthcare
Solutions,
Inc.
(a)
0.88
01/01/27
14,350,125
1,000,000
Alnylam
Pharmaceuticals,
Inc.
(b)
1.00
09/15/27
976,000
6,000,000
Alphatec
Holdings,
Inc.
0.75
08/01/26
4,890,000
9,000,000
Artivion,
Inc.
4.25
07/01/25
8,476,677
4,997,000
Ascendis
Pharma
A/S
(b)
2.25
04/01/28
4,622,741
2,500,000
Assertio
Holdings,
Inc.
(b)
6.50
09/01/27
2,387,162
1,000,000
Bridgebio
Pharma,
Inc.
2.50
03/15/27
598,800
5,000,000
Bridgebio
Pharma,
Inc.
2.25
02/01/29
2,218,500
4,035,000
CONMED
Corp.
(a)
2.63
02/01/24
4,442,535
6,880,000
CONMED
Corp.
(b)
2.25
06/15/27
5,951,200
7,250,000
Cutera,
Inc.
(b)
2.25
06/01/28
7,917,000
2,077,000
Exact
Sciences
Corp.
(a)
1.00
01/15/25
1,856,319
3,095,000
Exact
Sciences
Corp.
0.38
03/15/27
2,156,754
3,150,000
Gossamer
Bio,
Inc.
(a)
5.00
06/01/27
3,252,370
7,500,000
Halozyme
Therapeutics,
Inc.
(b)
1.00
08/15/28
7,040,625
6,500,000
Inotiv,
Inc.
3.25
10/15/27
5,200,105
6,380,000
Insmed,
Inc.
0.75
06/01/28
5,847,270
4,000,000
Invacare
Corp.
4.25
03/15/26
1,872,563
3,500,000
Ironwood
Pharmaceuticals,
Inc.
0.75
06/15/24
3,532,812
5,500,000
Jazz
Investments
I,
Ltd.
2.00
06/15/26
5,912,500
8,000,000
MannKind
Corp.
2.50
03/01/26
7,248,000
3,500,000
Novocure,
Ltd.
(c)
3.47 -
3.54
11/01/25
3,164,086
4,493,000
NuVasive,
Inc.
0.38
03/15/25
3,928,567
5,000,000
Pacira
BioSciences,
Inc.
0.75
08/01/25
4,931,250
7,826,000
PetIQ,
Inc.
4.00
06/01/26
6,425,146
5,626,000
SmileDirectClub,
Inc.
(b)(c)
2.76 -
59.01
02/01/26
668,361
4,086,000
Tabula
Rasa
HealthCare,
Inc.
1.75
02/15/26
3,297,597
2,035,000
Travere
Therapeutics,
Inc.
(a)
2.50
09/15/25
2,059,166
4,000,000
Travere
Therapeutics,
Inc.
2.25
03/01/29
4,090,000
7,725,000
Varex
Imaging
Corp.
4.00
06/01/25
9,292,230
151,132,859
Industrials
-
12.5%
5,000,000
Camtek,
Ltd./Israel
(b)(c)
3.57 -
3.79
12/01/26
3,957,500
2,280,000
Chart
Industries,
Inc.
(b)
1.00
11/15/24
7,176,984
8,120,000
CryoPort,
Inc.
(b)
0.75
12/01/26
5,954,115
6,500,000
GoPro,
Inc.
1.25
11/15/25
5,808,150
8,500,000
Granite
Construction,
Inc.
(a)
2.75
11/01/24
8,689,125
8,558,000
Itron,
Inc.
(c)
10.51
03/15/26
6,726,588
6,943,000
John
Bean
Technologies
Corp.
0.25
05/15/26
5,776,576
2,608,000
Kaman
Corp.
(a)
3.25
05/01/24
2,460,648
5,620,000
KBR,
Inc.
(a)
2.50
11/01/23
9,795,660
9,982,000
Mesa
Laboratories,
Inc.
(a)
1.38
08/15/25
8,334,953
6,400,000
Patrick
Industries,
Inc.
(b)
1.75
12/01/28
4,664,000
8,000,000
SMART
Global
Holdings,
Inc.
2.25
02/15/26
8,256,000
10,000,000
The
Greenbrier
Cos.,
Inc.
2.88
04/15/28
7,895,000
5,890,000
The
Middleby
Corp.
1.00
09/01/25
6,746,995
7,061,000
Winnebago
Industries,
Inc.
1.50
04/01/25
7,418,463
8,500,000
Xometry,
Inc.
(b)
1.00
02/01/27
10,114,150
109,774,907
Information
Technology
-
23.6%
8,000,000
Altair
Engineering,
Inc.
(b)
1.75
06/15/27
7,172,000
8,460,000
Alteryx,
Inc.
1.00
08/01/26
6,894,900
7,240,000
Bandwidth,
Inc.
0.50
04/01/28
4,282,460
8,500,000
Bentley
Systems,
Inc.
0.38
07/01/27
6,447,250
2,500,000
Blackline,
Inc.
0.13
08/01/24
2,598,500
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
September
30,
2022
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Information
Technology
-
23.6%
(continued)
$
7,500,000
Blackline,
Inc.
(c)
3.26
03/15/26
$
6,105,000
7,987,000
Box,
Inc.
(c)
0.00
01/15/26
8,833,622
6,000,000
Cloudflare,
Inc.
(c)
0.68 -
1.56
08/15/26
4,692,000
5,000,000
Confluent,
Inc.
(b)(c)
6.90 -
7.46
01/15/27
3,600,000
8,000,000
Coupa
Software,
Inc.
0.38
06/15/26
6,188,000
7,000,000
DigitalOcean
Holdings,
Inc.
(b)(c)
6.58
12/01/26
5,110,000
9,250,000
Dropbox,
Inc.
(c)
4.11
03/01/26
8,089,125
5,855,000
Envestnet,
Inc.
0.75
08/15/25
4,925,519
1,500,000
Evolent
Health,
Inc.
(a)
3.50
12/01/24
3,082,500
3,994,000
Evolent
Health,
Inc.
1.50
10/15/25
5,050,413
8,000,000
Fastly,
Inc.
(c)
1.84 -
8.45
03/15/26
5,824,000
8,500,000
Five9,
Inc.
0.50
06/01/25
7,730,750
5,500,000
Guidewire
Software,
Inc.
(a)
1.25
03/15/25
4,961,000
4,570,000
Impinj,
Inc.
(b)
1.13
05/15/27
4,525,529
3,000,000
Jamf
Holding
Corp.
0.13
09/01/26
2,446,500
5,797,000
LivePerson,
Inc.
(c)
5.05
12/15/26
3,961,344
10,000,000
Lumentum
Holdings,
Inc.
0.50
12/15/26
9,375,000
6,500,000
Magnite,
Inc.
0.25
03/15/26
4,907,500
1,500,000
MicroStrategy,
Inc.
(c)
5.83
02/15/27
684,000
4,478,000
Mitek
Systems,
Inc.
0.75
02/01/26
3,633,142
8,000,000
Model
N,
Inc.
2.63
06/01/25
9,856,000
9,477,000
Parsons
Corp.
0.25
08/15/25
9,799,218
4,205,000
Porch
Group,
Inc.
(b)
0.75
09/15/26
2,415,772
6,750,000
Progress
Software
Corp.
1.00
04/15/26
6,365,250
3,860,000
PROS
Holdings,
Inc.
2.25
09/15/27
3,402,590
7,467,000
Rapid7,
Inc.
2.25
05/01/25
7,502,851
6,500,000
Silicon
Laboratories,
Inc.
0.63
06/15/25
7,727,200
3,320,000
Splunk,
Inc.
1.13
06/15/27
2,628,698
5,000,000
Unity
Software,
Inc.
(b)(c)
1.77 -
2.05
11/15/26
3,643,750
3,000,000
Veeco
Instruments,
Inc.
3.75
06/01/27
4,591,500
5,500,000
Verint
Systems,
Inc.
0.25
04/15/26
4,589,750
6,500,000
Veritone,
Inc.
(b)
1.75
11/15/26
3,919,500
8,000,000
Workiva,
Inc.
1.13
08/15/26
9,412,000
206,974,133
Materials
-
1.5%
6,000,000
MP
Materials
Corp.
(b)
0.25
04/01/26
5,478,000
7,134,000
SSR
Mining,
Inc.
2.50
04/01/39
7,808,163
13,286,163
Utilities
-
1.4%
11,000,000
Ormat
Technologies,
Inc.
(b)
2.50
07/15/27
12,661,000
Total
Corporate
Convertible
Bonds
(Cost
$848,154,257)
750,390,756
Corporate
Non-Convertible
Bond
-
0.2%
Materials
-
0.2%
3,700,000
Century
Aluminum
Co.
(Cost
$3,986,523)
2.75
05/01/28
2,286,600
Total
Fixed
Income
Securities
(Cost
$852,140,780)
752,677,356
Shares
Security
Description
Value
Investment
Company
-
1.7%
1,500,000
Absolute
Flexible
Fund
(d)(e)
(Cost
$15,000,000)
14,865,000
Shares
Security
Description
Value
Exchange
Traded
Fund
-
0.4%
50,000
iShares
iBoxx
High
Yield
Corporate
Bond
ETF
(Cost
$3,603,725)
3,569,500
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Investments
September
30,
2022
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Money
Market
Fund
-
4.7%
41,467,099
First
American
Treasury
Obligations
Fund,
Class X,
2.87%
(a)(f)
(Cost
$41,467,099)
$
41,467,099
Total
Long
Positions
-
92.5%
(Cost
$912,211,604)
812,578,955
Total
Short
Positions
-
(33.7)%
(Proceeds
$(385,980,194))
(296,042,518)
Other
Assets
&
Liabilities,
Net
-
41.2%
361,507,749
Net
Assets
-
100.0%
$
878,044,186
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
September
30,
2022
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Short
Positions
-
(33.7)%
Common
Stock
-
(33.7)%
Communication
Services
-
(2.3)%
(212,300)
Harmonic,
Inc.
$
(2,774,761)
(1,072,713)
Infinera
Corp.
(5,191,931)
(30,497)
InterDigital,
Inc.
(1,232,689)
(46,082)
Palo
Alto
Networks,
Inc.
(7,547,771)
(41,439)
Q2
Holdings,
Inc.
(1,334,336)
(26,600)
TechTarget,
Inc.
(1,574,720)
(10,800)
Twitter,
Inc.
(473,472)
(1,497)
Wix.com,
Ltd.
(117,110)
(20,246,790)
Consumer
Discretionary
-
(4.3)%
(46,927)
2U,
Inc.
(293,294)
(8,486)
Airbnb,
Inc.,
Class A
(891,369)
(19,540)
Alarm.com
Holdings,
Inc.
(1,267,364)
(295,469)
American
Airlines
Group,
Inc.
(3,557,447)
(205,420)
American
Eagle
Outfitters,
Inc.
(1,998,737)
(12,794)
Chegg,
Inc.
(269,569)
(24,895)
Cracker
Barrel
Old
Country
Store,
Inc.
(2,304,779)
(156,836)
Eventbrite,
Inc.,
Class A
(953,563)
(169,547)
Fisker,
Inc.
(1,280,080)
(6,027)
Fiverr
International,
Ltd.
(184,366)
(23,000)
Groupon,
Inc.
(183,080)
(145,480)
IMAX
Corp.
(2,054,178)
(16,350)
LCI
Industries
(1,658,871)
(50,938)
Lucid
Group,
Inc.
(711,604)
(259,866)
Luminar
Technologies,
Inc.
(1,893,124)
(86,019)
National
Vision
Holdings,
Inc.
(2,808,520)
(109,700)
Norwegian
Cruise
Line
Holdings,
Ltd.
(1,246,192)
(35,100)
Penn
Entertainment,
Inc.
(965,601)
(85,300)
Royal
Caribbean
Cruises,
Ltd.
(3,232,870)
(32,900)
Spirit
Airlines,
Inc.
(619,178)
(94,700)
Stride,
Inc.
(3,980,241)
(115,200)
Topgolf
Callaway
Brands
Corp.
(2,218,752)
(27,335)
Upwork,
Inc.
(372,303)
(347,130)
Virgin
Galactic
Holdings,
Inc.
(1,634,982)
(22,550)
Wayfair,
Inc.,
Class A
(734,002)
(37,314,066)
Consumer
Staples
-
(1.8)%
(44,985)
FTI
Consulting,
Inc.
(7,454,464)
(80,418)
MGP
Ingredients,
Inc.
(8,537,175)
(15,991,639)
Energy
-
(3.2)%
(19,301)
Enphase
Energy,
Inc.
(5,355,449)
(121,200)
Green
Plains,
Inc.
(3,523,284)
(551,761)
Helix
Energy
Solutions
Group,
Inc.
(2,129,798)
(459,770)
Oil
States
International,
Inc.
(1,788,505)
(350,292)
Peabody
Energy
Corp.
(8,694,247)
(10,076)
SolarEdge
Technologies,
Inc.
(2,332,191)
(162,756)
Stem,
Inc.
(2,171,165)
(77,500)
Sunnova
Energy
International,
Inc.
(1,711,200)
(27,705,839)
Financials
-
0.0%
(20,900)
Redfin
Corp.
(122,056)
Health
Care
-
(7.0)%
(31,000)
1Life
Healthcare,
Inc.
(531,650)
(614,432)
Accuray,
Inc.
(1,278,019)
(691,260)
Allscripts
Healthcare
Solutions,
Inc.
(10,527,890)
(2,450)
Alnylam
Pharmaceuticals,
Inc.
(490,392)
(164,500)
Alphatec
Holdings,
Inc.
(1,437,730)
(240,700)
Artivion,
Inc.
(3,331,288)
(19,900)
Ascendis
Pharma
A/S,
ADR
(2,054,874)
(293,913)
Assertio
Holdings,
Inc.
(667,183)
(40,800)
Bridgebio
Pharma,
Inc.
(405,552)
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
September
30,
2022
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Health
Care
-
(7.0)%
(continued)
(58,695)
CONMED
Corp.
$
(4,705,578)
(105,600)
Cutera,
Inc.
(4,815,360)
(24,300)
Exact
Sciences
Corp.
(789,507)
(160,100)
Gossamer
Bio,
Inc.
(1,917,998)
(87,000)
Halozyme
Therapeutics,
Inc.
(3,439,980)
(87,417)
Inotiv,
Inc.
(1,472,976)
(138,100)
Insmed,
Inc.
(2,974,674)
(191,000)
Invacare
Corp.
(149,037)
(140,735)
Ironwood
Pharmaceuticals,
Inc.
(1,458,015)
(22,859)
Jazz
Pharmaceuticals
PLC
(3,046,876)
(946,000)
MannKind
Corp.
(2,923,140)
(6,900)
Novocure,
Ltd.
(524,262)
(14,800)
NuVasive,
Inc.
(648,388)
(45,632)
Pacira
BioSciences,
Inc.
(2,427,166)
(98,300)
PetIQ,
Inc.
(678,270)
(79,795)
SmileDirectClub,
Inc.
(72,246)
(13,390)
Tabula
Rasa
HealthCare,
Inc.
(64,272)
(121,555)
Travere
Therapeutics,
Inc.
(2,995,115)
(272,869)
Varex
Imaging
Corp.
(5,768,451)
(61,595,889)
Industrials
-
(5.8)%
(38,497)
Camtek,
Ltd./Israel
(891,975)
(38,500)
Chart
Industries,
Inc.
(7,097,475)
(22,124)
CryoPort,
Inc.
(538,941)
(341,000)
GoPro,
Inc.,
Class A
(1,681,130)
(153,266)
Granite
Construction,
Inc.
(3,891,424)
(23,792)
Itron,
Inc.
(1,001,881)
(17,320)
John
Bean
Technologies
Corp.
(1,489,520)
(4,000)
Kaman
Corp.
(111,720)
(214,842)
KBR,
Inc.
(9,285,471)
(15,150)
Mesa
Laboratories,
Inc.
(2,133,574)
(36,000)
Patrick
Industries,
Inc.
(1,578,240)
(264,287)
SMART
Global
Holdings,
Inc.
(4,194,235)
(101,472)
The
Greenbrier
Cos.,
Inc.
(2,462,725)
(34,000)
The
Middleby
Corp.
(4,357,780)
(72,400)
Winnebago
Industries,
Inc.
(3,852,404)
(116,178)
Xometry,
Inc.,
Class A
(6,597,749)
(51,166,244)
Information
Technology
-
(7.7)%
(62,100)
Altair
Engineering,
Inc.,
Class A
(2,746,062)
(8,213)
Alteryx,
Inc.,
Class A
(458,614)
(13,964)
Bandwidth,
Inc.,
Class A
(166,172)
(40,585)
Bentley
Systems,
Inc.,
Class B
(1,241,495)
(37,084)
BlackLine,
Inc.
(2,221,332)
(226,814)
Box,
Inc.
(5,531,994)
(8,990)
Cloudflare,
Inc.,
Class A
(497,237)
(13,450)
Confluent,
Inc.,
Class A
(319,707)
(7,304)
Coupa
Software,
Inc.
(429,475)
(12,814)
DigitalOcean
Holdings,
Inc.
(463,482)
(85,800)
Dropbox,
Inc.,
Class A
(1,777,776)
(14,500)
Envestnet,
Inc.
(643,800)
(153,104)
Evolent
Health,
Inc.,
Class A
(5,501,027)
(13,942)
Fastly,
Inc.,
Class A
(127,709)
(24,855)
Five9,
Inc.
(1,863,628)
(18,973)
Guidewire
Software,
Inc.
(1,168,357)
(27,900)
Impinj,
Inc.
(2,232,837)
(27,000)
Jamf
Holding
Corp.
(598,320)
(22,224)
LivePerson,
Inc.
(209,350)
(63,485)
Lumentum
Holdings,
Inc.
(4,353,166)
(15,500)
Magnite,
Inc.
(101,835)
(515)
MicroStrategy,
Inc.
(109,314)
(102,300)
Mitek
Systems,
Inc.
(937,068)
(142,341)
Model
N,
Inc.
(4,872,332)
(130,704)
Parsons
Corp.
(5,123,597)
Absolute
Convertible
Arbitrage
Fund
Schedule
of
Securities
Sold
Short
September
30,
2022
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Information
Technology
-
(7.7)%
(continued)
(18,366)
Perficient,
Inc.
$
(1,194,157)
(100,000)
Porch
Group,
Inc.
(225,000)
(59,700)
Progress
Software
Corp.
(2,540,235)
(54,500)
PROS
Holdings,
Inc.
(1,346,150)
(77,616)
Rapid7,
Inc.
(3,329,726)
(36,767)
Silicon
Laboratories,
Inc.
(4,538,519)
(4,617)
Splunk,
Inc.
(347,198)
(4,072)
Unity
Software,
Inc.
(129,734)
(178,300)
Veeco
Instruments,
Inc.
(3,266,456)
(40,500)
Verint
Systems,
Inc.
(1,359,990)
(81,656)
Veritone,
Inc.
(459,723)
(67,064)
Workiva,
Inc.
(5,217,579)
(67,650,153)
Materials
-
(0.7)%
(147,000)
Century
Aluminum
Co.
(776,160)
(76,369)
MP
Materials
Corp.
(2,084,874)
(250,500)
SSR
Mining,
Inc.
(3,684,855)
(6,545,889)
Utilities
-
(0.9)%
(89,373)
Ormat
Technologies,
Inc.
(7,703,953)
Total
Common
Stock
(Proceeds
$(385,980,194))
(296,042,518)
Total
Short
Positions
-
(33.7)%
(Proceeds
$(385,980,194))
$
(296,042,518)
Absolute
Convertible
Arbitrage
Fund
Notes
to
Schedules
of
Investments
and
Securities
Sold
Short
September
30,
2022
See
Notes
to
Financial
Statements.
At
September
30,
20
2
2
,
the
Fund
held
the
following
exchange
traded
futures
contracts:
Affiliated
investments
are
investments
that
are
managed
by
the
adviser,
and
are
noted
in
the
Absolute
Convertible
Arbitrage
Fund’s
Schedule
of
Investments.
Transactions
during
the
period
with
affiliates
were
as
follows:
At
September
30,
2022,
the
value
of
investments
in
affiliated
companies
was
$14,865,000
representing
1.7%
of
net
assets,
and
the
total
cost
was
$15,000,000.
Net
unrealized
appreciation/(depreciation)was
($135,000),
the
net
change
in
unrealized
appreciation/(depreciation)
was
$($135,000),
net
realized
gain/(loss)
was
$0,
total
capital
gain
distributions
were
$0
and
investment
income
was
$0.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
liabilities
as
of
September
30,
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
Schedules
of
Investments
and
Securities
Sold
Short,
such
as
futures, which
are
valued
at
the
unrealized
appreciation/(depreciation)
at
period
end.
ADR
American
Depositary
Receipt
ETF
Exchange
Traded
Fund
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
$187,726,358
or
21.4%
of
net
assets.
(c)
Zero
coupon
bond.
Interest
rate
presented
is
yield
to
maturity.
(d)
Affiliated
Company.
(e)
Non-income
producing
security.
(f)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
September
30,
2022.
Contracts
Description
Expiration
Date
Notional
Contract
Value
Value
Net
Unrealized
Appreciation
(800)
U.S.
Treasury
5
Year
Note
Future
12/30/22
$
(88,974,104)
$
(86,006,250)
$
2,967,854
Investment
Companies
Absolute
Flexible
Fund
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Appreciation/
(Depreciation)
Balance
9/30/2022
Realized
Gain/(Loss)
Capital
Gain
Distributions
Investment
Income
Shares/
Principal
–��
1,500,000
–
1,500,000
Cost
$
–
$
15,000,000
$
–
$
15,000,000
$
–
$
–
$
–
Value
$
–
–
–
$
(135,000)
14,865,000
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Corporate
Convertible
Bonds
$
–
$
750,390,756
$
–
$
750,390,756
Corporate
Non-Convertible
Bond
–
2,286,600
–
2,286,600
Investment
Company
14,865,000
–
–
14,865,000
Exchange
Traded
Fund
3,569,500
–
–
3,569,500
Money
Market
Fund
–
41,467,099
–
41,467,099
Investments
at
Value
$
18,434,500
$
794,144,455
$
–
$
812,578,955
Other
Financial
Instruments*
Futures
2,967,854
–
–
2,967,854
Total
Assets
$
21,402,354
$
794,144,455
$
–
$
815,546,809
Liabilities
Securities
Sold
Short
Common
Stock
$
(296,042,518)
$
–
$
–
$
(296,042,518)
Securities
Sold
Short
$
(296,042,518)
$
–
$
–
$
(296,042,518)
Total
Liabilities
$
(296,042,518)
$
–
$
–
$
(296,042,518)
Absolute
Flexible
Fund
Portfolio
Holdings
Summary
September
30,
2022
See
Notes
to
Financial
Statements.
*
Consists
of
deposits
with
the
custodian
and/or
brokers
for
securities
sold
short,
cash,
prepaid
expenses,
receivables,
payables
and
accrued
liabilities.
Deposits
with
the
custodian
and/or
brokers
for
securities
sold
short
represent 13.3%
of
net
assets.
See
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
Portfolio
Breakdown
(%
of
Net
Assets)
Long
Positions
Corporate
Convertible
Bonds
79.3%
Money
Market
Fund
18.1%
Short
Positions
Common
Stock
(10.9)%
Other
Assets
&
Liabilities,
Net
*
13.5%
100.0%
Absolute
Flexible
Fund
Schedule
of
Investments
September
30,
2022
See
Notes
to
Financial
Statements.
Principal
Security
Description
Rate
Maturity
Value
Long
Positions
-
97.4%
Corporate
Convertible
Bonds
-
79.3% (a)
Communication
Services
-
14.1%
$
500,000
Infinera
Corp.
2.13%
09/01/24
$
458,250
750,000
Perficient,
Inc.
(b)
0.13
11/15/26
558,750
500,000
Q2
Holdings,
Inc.
0.13
11/15/25
400,000
1,000,000
TechTarget,
Inc.
(b)(c)
4.95 -
5.66
12/15/26
777,493
890,000
Upwork,
Inc.
0.25
08/15/26
654,195
2,848,688
Consumer
Discretionary
-
7.7%
500,000
Alarm.com
Holdings,
Inc.
(c)
5.70
01/15/26
411,250
1,000,000
Fisker,
Inc.
(b)
2.50
09/15/26
520,827
750,000
IMAX
Corp.
0.50
04/01/26
621,600
1,553,677
Energy
-
5.0%
1,000,000
Helix
Energy
Solutions
Group,
Inc.
6.75
02/15/26
1,017,500
Health
Care
-
10.2%
500,000
1Life
Healthcare,
Inc.
3.00
06/15/25
486,250
1,000,000
Accuray,
Inc.
3.75
06/01/26
836,425
900,000
PetIQ,
Inc.
4.00
06/01/26
738,900
2,061,575
Industrials
-
7.9%
1,000,000
CryoPort,
Inc.
(b)
0.75
12/01/26
733,265
412,000
Itron,
Inc.
(c)
5.53
03/15/26
323,832
632,000
John
Bean
Technologies
Corp.
0.25
05/15/26
525,824
1,582,921
Information
Technology
-
34.4%
700,000
Altair
Engineering,
Inc.
(b)
1.75
06/15/27
627,550
1,000,000
Alteryx,
Inc.
1.00
08/01/26
815,000
1,000,000
Bentley
Systems,
Inc.
0.38
07/01/27
758,500
1,039,000
Coupa
Software,
Inc.
0.38
06/15/26
803,666
812,000
Dropbox,
Inc.
(c)
2.25 -
2.33
03/01/26
710,094
750,000
Envestnet,
Inc.
0.75
08/15/25
630,938
500,000
Fastly,
Inc.
(c)
8.43
03/15/26
364,000
1,000,000
Five9,
Inc.
0.50
06/01/25
909,500
600,000
Lumentum
Holdings,
Inc.
0.50
12/15/26
562,500
1,000,000
Magnite,
Inc.
0.25
03/15/26
755,000
6,936,748
Total
Corporate
Convertible
Bonds
(Cost
$16,826,070)
16,001,109
Shares
Security
Description
Value
Money
Market
Fund
-
18.1%
3,647,263
First
American
Treasury
Obligations
Fund,
Class X,
2.87%
(a)(d)
(Cost
$3,647,263)
3,647,263
Total
Long
Positions
-
97.4%
(Cost
$20,473,333)
19,648,372
Total
Short
Positions
-
(10.9)%
(Proceeds
$(2,672,910))
(2,206,429)
Other
Assets
&
Liabilities,
Net
-
13.5%
2,729,679
Net
Assets
-
100.0%
$
20,171,622
Absolute
Flexible
Fund
Schedule
of
Securities
Sold
Short
September
30,
2022
See
Notes
to
Financial
Statements.
Shares
Security
Description
Value
Short
Positions
-
(10.9)%
Common
Stock
-
(10.9)%
Communication
Services
-
(0.9)%
(5,000)
Infinera
Corp.
$
(24,200)
(100)
Q2
Holdings,
Inc.
(3,220)
(2,600)
TechTarget,
Inc.
(153,920)
(181,340)
Consumer
Discretionary
-
(1.6)%
(690)
Alarm.com
Holdings,
Inc.
(44,753)
(10,000)
Fisker,
Inc.
(75,500)
(10,000)
IMAX
Corp.
(141,200)
(4,350)
Upwork,
Inc.
(59,247)
(320,700)
Energy
-
(0.8)%
(43,345)
Helix
Energy
Solutions
Group,
Inc.
(167,312)
Health
Care
-
(1.0)%
(600)
1Life
Healthcare,
Inc.
(10,290)
(50,000)
Accuray,
Inc.
(104,000)
(12,400)
PetIQ,
Inc.
(85,560)
(199,850)
Industrials
-
(1.3)%
(2,876)
CryoPort,
Inc.
(70,059)
(973)
Itron,
Inc.
(40,973)
(1,800)
John
Bean
Technologies
Corp.
(154,800)
(265,832)
Information
Technology
-
(5.3)%
(5,900)
Altair
Engineering,
Inc.,
Class A
(260,898)
(1,000)
Alteryx,
Inc.,
Class A
(55,840)
(3,000)
Bentley
Systems,
Inc.,
Class B
(91,770)
(300)
Coupa
Software,
Inc.
(17,640)
(6,000)
Dropbox,
Inc.,
Class A
(124,320)
(2,000)
Envestnet,
Inc.
(88,800)
(500)
Fastly,
Inc.,
Class A
(4,580)
(2,000)
Five9,
Inc.
(149,960)
(3,100)
Lumentum
Holdings,
Inc.
(212,567)
(1,000)
Perficient,
Inc.
(65,020)
(1,071,395)
Total
Common
Stock
(Proceeds
$(2,672,910))
(2,206,429)
Total
Short
Positions
-
(10.9)%
(Proceeds
$(2,672,910))
$
(2,206,429)
Absolute
Flexible
Fund
Notes
to
Schedules
of
Investments
and
Securities
Sold
Short
September
30,
2022
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
and
liabilities
as
of
September
30,
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.
(a)
All
or
a
portion
of
these
securities
are
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
$3,217,885
or
16.0%
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
September
30,
2022.
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Corporate
Convertible
Bonds
$
–
$
16,001,109
$
–
$
16,001,109
Money
Market
Fund
–
3,647,263
–
3,647,263
Investments
at
Value
$
–
$
19,648,372
$
–
$
19,648,372
Total
Assets
$
–
$
19,648,372
$
–
$
19,648,372
Liabilities
Securities
Sold
Short
Common
Stock
$
(2,206,429)
$
–
$
–
$
(2,206,429)
Securities
Sold
Short
$
(2,206,429)
$
–
$
–
$
(2,206,429)
Total
Liabilities
$
(2,206,429)
$
–
$
–
$
(2,206,429)
ABSOLUTE
FUNDS
STATEMENTS
OF
ASSETS
AND
LIABILITIES
September
30,
2022
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
ABSOLUTE
FLEXIBLE
FUND
ASSETS
Investments,
at
value
(Cost
$17,106,198,
$139,558,438,
$897,211,604
and
$20,473,333,
respectively)
$
17,145,766
$
143,224,447
$
797,713,955
$
19,648,372
Investments
in
affiliates,
at
value
(Cost
$13,765,835,
$0,
$15,000,000
and
$0,
respectively)
13,691,128
–
14,865,000
–
$
30,836,894
$
143,224,447
$
812,578,955
$
19,648,372
Cash
10
155,804
–
–
Deposits
with
broker
for
securities
sold
short
(a)
–
–
346,812,556
2,681,633
Deposits
with
broker
for
options
(b)
831,343
6,157,771
–
–
Deposits
with
broker
for
futures
(c)
4,894,661
–
11,663,413
–
Receivables:
Fund
shares
sold
4,000
83,485
1,358,741
–
Investment
securities
sold
–
–
2,120,391
–
Dividends
and
interest
64,494
148,490
3,856,880
69,235
Prepaid
expenses
12,868
15,854
30,683
54,476
Total
Assets
36,644,270
149,785,851
1,178,421,619
22,453,716
LIABILITIES
Call
options
written,
at
value
(Premiums
received
$0,
$6,280,724,
$0
and
$0,
respectively)
–
742,375
–
–
Put
options
written,
at
value
(Premiums
received
$88,991,
$1,678,984,
$0
and
$0,
respectively)
120,250
3,198,870
–
–
Securities
sold
short,
at
value
(Proceeds
$0,
$0,
$385,980,194
and
$2,672,910,
respectively)
–
–
296,042,518
2,206,429
Payables:
Investment
securities
purchased
–
462,686
2,536,935
–
Fund
shares
redeemed
665
188,566
831,250
–
Due
to
custodian
–
–
7,376
–
Dividends
on
securities
sold
short
–
–
58,790
–
Accrued
Liabilities:
Investment
adviser
fees
25,389
148,606
692,266
41,045
Trustees’
fees
and
expenses
35
7
992
1,312
Fund
services
fees
13,849
10,510
62,296
7,673
Other
expenses
28,551
27,667
145,010
25,635
Total
Liabilities
188,739
4,779,287
300,377,433
2,282,094
NET
ASSETS
$
36,455,531
$
145,006,564
$
878,044,186
$
20,171,622
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
71,120,957
$
160,073,308
$
888,791,906
$
20,350,000
Accumulated
loss
(34,665,426)
(15,066,744)
(10,747,720)
(178,378)
NET
ASSETS
$
36,455,531
$
145,006,564
$
878,044,186
$
20,171,622
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
Institutional
Shares
4,794,897
14,485,778
67,373,057
2,035,045
Investor
Shares
–
–
13,381,034
–
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
Institutional
Shares
(based
on
net
assets
of
$36,455,531,
$145,006,564,
$732,882,170
and
$20,171,622,
respectively)
$
7.60
$
10.01
$
10.88
$
9.91
Investor
Shares
(based
on
net
assets
of
$0,
$0,
$145,162,016
and
$0,
respectively)
$
–
$
–
$
10.85
$
–
(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
SIX
MONTHS
ENDED
SEPTEMBER
30,
2022
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
ABSOLUTE
FLEXIBLE
FUND*
INVESTMENT
INCOME
Dividend
income
(net
of
foreign
withholding
taxes
of
$540,
$2,377,
$0
and
$0,
respectively)
$
102,887
$
802,981
$
198,583
$
39,415
Dividend
income
from
affiliated
investment
5,559
–
–
–
Interest
income
8,837
–
9,571,965
162,014
Total
Investment
Income
117,283
802,981
9,770,548
201,429
EXPENSES
Investment
adviser
fees
226,044
1,048,567
4,704,048
72,257
Fund
services
fees
23,566
58,567
267,921
12,502
Transfer
agent
fees
Institutional
Shares
48,878
774
44,681
489
Investor
Shares
–
–
197
–
Distribution
fees
Institutional
Shares
–
–
89,854
–
Custodian
fees
4,663
7,862
36,530
1,636
Registration
fees
Institutional
Shares
15,059
12,333
15,098
8,897
Investor
Shares
–
–
21,867
–
Professional
fees
16,986
24,534
65,217
21,210
Trustees'
fees
and
expenses
2,836
4,043
11,118
1,332
Dividend
expense
on
securities
sold
short
–
–
457,301
222
Interest
expense
8,625
34,120
–
–
Other
expenses
42,199
70,129
409,094
21,563
Total
Expenses
388,856
1,260,929
6,122,926
140,108
Fees
waived
(90,516)
(110,835)
(871,714)
(62,985)
Net
Expenses
298,340
1,150,094
5,251,212
77,123
NET
INVESTMENT
INCOME
(LOSS)
(181,057)
(347,113)
4,519,336
124,306
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
(loss)
on:
Investments
in
unaffiliated
issuers
(793,123)
(10,506,188)
(3,245,831)
51,112
Investments
in
affiliated
issuers
205,994
–
–
–
Securities
sold
short
–
–
5,208,815
4,684
Written
options
84,104
11,797,211
–
–
Futures
2,910,761
–
4,225,212
–
Net
realized
gain
2,407,736
1,291,023
6,188,196
55,796
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
in
unaffiliated
issuers
511,310
(12,308,582)
(100,909,187)
(824,961)
Investments
in
affiliated
issuers
(582,626)
–
(135,000)
–
Foreign
currency
translations
(529)
(508)
–
–
Securities
sold
short
–
–
75,267,974
466,481
Written
options
(186,473)
10,161,355
–
–
Futures
581,213
–
1,043,673
–
Net
change
in
unrealized
appreciation
(depreciation)
322,895
(2,147,735)
(24,732,540)
(358,480)
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
2,730,631
(856,712)
(18,544,344)
(302,684)
INCREASE
(DECREASE)
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
2,549,574
$
(1,203,825)
$
(14,025,008)
$
(178,378)
*
For
the
period
June
30,
2022
(commencement
of
operations)
through
September
30,
2022.
ABSOLUTE
FUNDS
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
See
Notes
to
Financial
Statements.
ABSOLUTE
STRATEGIES
FUND
ABSOLUTE
CAPITAL
OPPORTUNITIES
FUND
For
the
Six
Months
Ended
September
30,
2022
For
the
Year
Ended
March
31,
2022
For
the
Six
Months
Ended
September
30,
2022
For
the
Year
Ended
March
31,
2022
OPERATIONS
Net
investment
loss
$
(181,057)
$
(539,278)
$
(347,113)
$
(1,481,626)
Net
realized
gain
2,407,736
2,458,273
1,291,023
3,762,712
Net
change
in
unrealized
appreciation
(depreciation)
322,895
(6,152,021)
(2,147,735)
(9,283,361)
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
2,549,574
(4,233,036)
(1,203,825)
(7,002,275)
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
–
(1,341,849)
–
–
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
Institutional
Shares
5,761,132
6,686,810
21,355,415
55,625,689
Reinvestment
of
distributions
Institutional
Shares
–
1,319,672
–
–
Redemption
of
shares
Institutional
Shares
(2,417,894)
(43,246,874)
(21,410,920)
(25,299,251)
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
3,343,238
(35,240,392)
(55,505)
30,326,438
Increase
(Decrease)
in
Net
Assets
5,892,812
(40,815,267)
(1,259,330)
23,324,163
NET
ASSETS
Beginning
of
Period
30,562,719
71,377,986
146,265,894
122,941,731
End
of
Period
$
36,455,531
$
30,562,719
$
145,006,564
$
146,265,894
SHARE
TRANSACTIONS
Sale
of
shares
Institutional
Shares
806,183
900,005
2,130,472
5,379,652
Reinvestment
of
distributions
Institutional
Shares
–
178,575
–
–
Redemption
of
shares
Institutional
Shares
(332,304)
(5,817,170)
(2,141,961)
(2,449,086)
Increase
(Decrease)
in
Shares
473,879
(4,738,590)
(11,489)
2,930,566
ABSOLUTE
FUNDS
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
See
Notes
to
Financial
Statements.
ABSOLUTE
CONVERTIBLE
ARBITRAGE
FUND
ABSOLUTE
FLEXIBLE
FUND
For
the
Six
Months
Ended
September
30,
2022
For
the
Year
Ended
March
31,
2022
June
30,
2022*
through
September
30,
2022
OPERATIONS
Net
investment
income
$
4,519,336
$
527,922
$
124,306
Net
realized
gain
6,188,196
12,532,246
55,796
Net
change
in
unrealized
appreciation
(depreciation)
(24,732,540)
(7,400,659)
(358,480)
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(14,025,008)
5,659,509
(178,378)
DISTRIBUTIONS
TO
SHAREHOLDERS
Institutional
Shares
(1,884,270)
(17,303,308)
–
Investor
Shares
(46,223)
(279,460)
–
Total
Distributions
Paid
(1,930,493)
(17,582,768)
–
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
160,700,942
411,242,309
20,350,000
Investor
Shares
118,960,483
36,250,465
–
Reinvestment
of
distributions:
Institutional
Shares
1,532,712
15,535,771
–
Investor
Shares
46,178
279,460
–
Redemption
of
shares:
Institutional
Shares
(94,680,587)
(175,203,296)
–
Investor
Shares
(3,964,045)
(5,751,001)
–
Increase
in
Net
Assets
from
Capital
Share
Transactions
182,595,683
282,353,708
20,350,000
Increase
in
Net
Assets
166,640,182
270,430,449
20,171,622
NET
ASSETS
Beginning
of
Period
711,404,004
440,973,555
–
End
of
Period
$
878,044,186
$
711,404,004
$
20,171,622
SHARE
TRANSACTIONS
Sale
of
shares:
Institutional
Shares
14,694,086
36,522,582
2,035,045
Investor
Shares
10,990,797
3,245,120
–
Reinvestment
of
distributions:
Institutional
Shares
142,578
1,393,207
–
Investor
Shares
4,304
25,109
–
Redemption
of
shares:
Institutional
Shares
(8,689,442)
(15,583,932)
–
Investor
Shares
(366,738)
(517,558)
–
Increase
in
Shares
16,775,585
25,084,528
2,035,045
*
Commencement
of
operations.
ABSOLUTE
FUNDS
FINANCIAL
HIGHLIGHTS
See
Notes
to
Financial
Statements.
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
9/30/2022
$
7.07
(
$
0.04)
$
0.57
$
0.53
$
—
$
—
$
—
$
7.60
7.50
%
(
c
)
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
9/30/2022
$
10.09
(
0.02)
(
0.06)
(
0.08)
—
—
—
10.01
(0.79)
(
c
)
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)(e)
(
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
9/30/2022
$
11.12
0.06
(
0.27)
(
0.21)
(
0.03)
—
(
0.03)
10.88
(1.90)
(
c
)
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(f)
10.00
0.02(g)
0.29(g)
0.31
—
(
0.02)
(
0.02)
10.29
3.14
(
c
)
INVESTOR
SHARES
9/30/2022
$
11.09
0.07
(
0.30)
(
0.23)
(
0.01)
—
(
0.01)
10.85
(2.03)
(b)
3/31/2022(h)
11.34
0.00
0.10
0.10
—
(
0.35)
(
0.35)
11.09
0.86
ABSOLUTE
FLEXIBLE
FUND
INSTITUTIONAL
SHARES
9/30/2022(
i
)
$
10.00
0.06
(
0.15)
(
0.09)
—
—
—
9.91
(0.90)
(
c
)
(a)
Calculated
based
on
average
shares
outstanding
during
each
period.
(b)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
(c)
Not
annualized.
(d)
Annualized.
(e)
Amount
represents
less
than
$0.005.
(f)
Commencement
of
operations
was
August
14,
2017.
(g)
Net
investment
income
and
net
realized
and
unrealized
gain
(loss)
on
investments
for
the
period
ended
March
31,
2018.
See
Note
2
of
the
March
31,
2018
Annual
Report.
(h)
Commencement
of
operations
was
April
1,
2021.
(
i
)
Commencement
of
operations
was
June
30,
2022.
ABSOLUTE
FUNDS
FINANCIAL
HIGHLIGHTS
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
$
36,456
(1.12)%(
d
)
1.85%(
d
)
0.05%(
d
)
1.
80
%(
d
)
2.41%(
d
)
38%(
c
)
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
145,007
(0.46)%(
d
)
1.54%(
d
)
0.05%(
d
)
1.49%
(d
)
1.68%(
d
)
15%(
c
)
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
732,882
1.15%(
d
)
1.32%(
d
)
0.12%(
d
)
1.20%(
d
)
1.53%
(d)
10%(
c
)
680,871
0.10
1.51
0.31
1.20
1.75
45
440,974
(0.16)
1.68
0.38
1.30
1.88
93
139,865
0.77
1.59
0.07
1.52
1.78
95
88,768
0.95
1.91
0.31
1.60
2.16
121
56,065
0.35(
d
)
2.23(
d
)
0.60(
d
)
1.63(
d
)
3.13
(d)
76(
c
)
145,162
1.21%(
d
)
1.57%(
d
)
0.12%(
d
)
1.45%(
d
)
1.90%
(d)
10%(
c
)
30,533
(0.01)
1.77
0.32
1.45
2.16
45
20,172
2.41%(c)
1.49%(
d
)
0.00%(
d
)
1.49%(c)
2.71%(d)
4%(
c
)
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
Note
1.
Organization
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Flexible
Fund
(individually,
a
“Fund”
and
collectively,
the
“Funds”)
are
diversified
portfolios
of
Forum
Funds
(the
“Trust”).
The
Trust
is
a
Delaware
statutory
trust
that
is
registered
as
an
open-end,
management
investment
company
under
the
Investment
Company
Act
of
1940,
as
amended
(the
“Act”).
Under
its
Trust
Instrument,
the
Trust
is
authorized
to
issue
an
unlimited
number
of
each
Fund’s
shares
of
beneficial
interest
without
par
value.
Absolute
Strategies
Fund
currently
offers
Institutional
Shares.
Institutional
Shares
commenced
operations
on
July
11,
2005.
Absolute
Strategies
Fund
seeks
to
achieve
long-term
capital
appreciation
with
an
emphasis
on
absolute
(positive)
returns
and
low
sensitivity
to
traditional
financial
market
indices,
such
as
the
S&P
500
Index.
Absolute
Capital
Opportunities
Fund
currently
offers
Institutional
Shares.
Absolute
Capital
Opportunities
Fund
commenced
operations
on
December
30,
2015.
Absolute
Capital
Opportunities
Fund
seeks
to
achieve
long-term
capital
appreciation
with
a
lower
sensitivity
to
traditional
financial
market
indices,
such
as
the
S&P
500
Index.
Absolute
Flexible
Fund
currently
offers
Institutional
Shares.
Absolute
Flexible
Fund
commenced
operations
on
June
30,
2022
and
seeks
to
achieve
positive
absolute
returns
over
the
long-term
with
low
volatility
when
compared
to
traditional
market
indices.
Absolute
Convertible
Arbitrage
Fund
currently
offers
Institutional
Shares
and
Investor
Shares.
Absolute
Convertible
Arbitrage
Fund
commenced
operations
on
August
14,
2017,
after
it
acquired
the
net
assets
of
the
Mohican
VCA
Fund,
LP,
a
privately
offered
hedge
fund
(the
“Predecessor
Fund”),
in
exchange
for
Fund
shares.
The
Predecessor
Fund
commenced
operations
in
2002.
Absolute
Convertible
Arbitrage
Fund
seeks
to
achieve
positive
absolute
returns
over
the
long-term
with
low
volatility
when
compared
to
traditional
market
indices.
The
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
period.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
each
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Futures
contracts
are
valued
at
the
day’s
settlement
price
on
the
exchange
where
the
contract
is
traded.
Forward
currency
contracts
are
generally
valued
based
on
interpolation
of
forward
curve
data
points
obtained
from
major
banking
institutions
that
deal
in
foreign
currencies
and
currency
dealers.
Exchange-traded
options
for
which
the
last
quoted
sale
price
is
outside
the
closing
bid
and
ask
price
will
be
valued
at
the
mean
of
the
closing
bid
and
ask
price.
Shares
of
non-exchange
traded
open-end
Date
of
Contribution
Net
Assets
Shares
Market
Value
of
Investments
August
14,
2017
$16,686,633
1,668,929
$10,790,692
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Trust's
Board
of
Trustees
(the
"Board")
has
designated
the
Adviser,
as
defined
in
Note
3,
as
each
Fund's
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
each
Fund.
The
Adviser
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Adviser's
fair
value
determinations.
The
Adviser
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Adviser
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Board
has
approved
the
Adviser’s
fair
valuation
procedures
as
a
part
of
each
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Adviser
provides
fair
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Adviser
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
NAV
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
each
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
each
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
September
30,
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.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
Each
Fund
estimates
components
of
distributions
from
real
estate
investment
trusts
(“REITs”).
Distributions
received
in
excess
of
income
are
recorded
as
a
reduction
of
the
cost
of
the
related
investments.
Foreign
Currency
Translations
–
Foreign
currency
amounts
are
translated
into
U.S.
dollars
as
follows:
(1)
assets
and
liabilities
at
the
rate
of
exchange
at
the
end
of
the
respective
period;
and
(2)
purchases
and
sales
of
securities
and
income
and
expenses
at
the
rate
of
exchange
prevailing
on
the
dates
of
such
transactions.
The
portion
of
the
results
of
operations
arising
from
changes
in
the
exchange
rates
and
the
portion
due
to
fluctuations
arising
from
changes
in
the
market
prices
of
securities
are
not
isolated.
Such
fluctuations
are
included
with
the
net
realized
and
unrealized
gain
or
loss
on
investments.
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
September
30,
2022,
for
Absolute
Strategies
Fund
and
Absolute
Convertible
Arbitrage
Fund,
are
disclosed
in
the
Notes
to
Schedule
of
Investments
and
Put
Options
Written.
Securities
Sold
Short
–
Each
Fund
may
sell
a
security
short
to
increase
investment
returns.
Each
Fund
may
also
sell
a
security
short
in
anticipation
of
a
decline
in
the
market
value
of
a
security.
A
short
sale
is
a
transaction
in
which
the
Fund
sells
a
security
that
it
does
not
own.
To
complete
the
transaction,
the
Fund
must
borrow
the
security
in
order
to
deliver
it
to
the
buyer.
The
Fund
must
replace
the
borrowed
security
by
purchasing
it
at
market
price
at
the
time
of
replacement;
the
price
may
be
higher
or
lower
than
the
price
at
which
the
Fund
sold
the
security.
The
Fund
incurs
a
loss
from
a
short
sale
if
the
price
of
the
security
increases
between
the
date
of
the
short
sale
and
the
date
on
which
the
Fund
replaces
the
borrowed
security.
The
Fund
realizes
a
profit
if
the
price
of
the
security
declines
between
those
dates.
Until
the
Fund
replaces
the
borrowed
security,
the
Fund
will
maintain
on
its
books
and
records
cash
and
long
securities
to
sufficiently
cover
its
short
position
on
a
daily
basis.
The
collateral
for
the
securities
sold
short
includes
the
Deposits
with
Brokers
as
shown
on
the
Statements
of
Assets
and
Liabilities
and
the
securities
held
long
as
shown
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
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
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
September
30,
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
September
30,
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
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
their
net
investment
income
and
capital
gains,
if
any,
the
Funds
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
Each
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
Each
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
three
fiscal
years
after
they
are
filed.
As
of
September
30,
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
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
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Flexible
Fund
at
an
annual
rate
of
1.40%,
1.40%,
1.20%
and
1.40%,
respectively,
of
each
Fund’s
average
daily
net
assets.
Each
sub-advisory
fee,
calculated
as
a
percentage
of
each
Fund’s
average
daily
net
assets
managed
by
each
subadviser,
is
paid
by
the
Adviser.
Distribution
–
Foreside
Fund
Services,
LLC
(the
“Distributor”),
a
wholly
owned
subsidiary
of
Foreside
Financial
Group,
LLC
(doing
business
as
ACA
Group),
acts
as
the
agent
of
the
Trust
in
connection
with
the
continuous
offering
of
shares
of
the
Funds.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Absolute
Convertible
Arbitrage
Fund
has
adopted
a
Distribution
Plan
(the
“Plan”)
for
Investor
Shares
of
the
Fund
in
accordance
with
Rule
12b-1
of
the
Act.
Under
the
Plan,
Investor
Shares
are
subject
to
a
Rule
12b-1
fee
of
up
to
0.25%
of
the
Investor
Shares
average
daily
net
assets.
The
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Flexible
Fund
do
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Flexible
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services
to
the
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund
and
Absolute
Flexible
Fund.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
each
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statements
of
Operations.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
each
Fund
pays
Apex
customary
fees
for
its
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
each
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
Each
Independent
Trustee’s
annual
retainer
is
$45,000
($55,000
for
the
Chairman).
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
September
30,
2022
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
period,
Absolute
Strategies
Fund
invested
in
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Flexible
Fund
and
the
Absolute
Select
Value
ETF.
As
of
September
30,
2022,
Absolute
Strategies
Fund
owned
approximately
4.76%,
0.13%,
24.56%
and
0.94%
of
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Flexible
Fund
and
Absolute
Select
Value
ETF,
respectively.
The
Adviser
has
agreed
to
waive
fees
owed
to
it
by
the
Absolute
Strategies
Fund
in
an
amount
equal
to
the
fee
it
receives
from
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Flexible
Fund
and
Absolute
Select
Value
ETF
based
on
Absolute
Strategies
Fund’s
investment
in
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund,
Absolute
Flexible
Fund
and
Absolute
Select
Value
ETF.
For
the
period
ended
September
30,
2022,
the
Adviser
reimbursed
fees
of
$90,516
related
to
these
affiliated
investments
and
these
reimbursements
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
other
than
those
attributable
to
investment
advisory
fees
incurred
by
the
applicable
Fund
as
a
result
of
that
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Capital
Opportunities
Fund
and
Absolute
Flexible
Fund
to
1.49%
through
August
1,
2023.
The
Adviser
waived
fees
of
$110,835
for
Absolute
Capital
Opportunities
Fund
for
the
period
ended
September
30,
2022.
The
Adviser
waived
fees
of
$62,985
for
Absolute
Flexible
Fund
for
the
period
July
1,
2022
(commencement
of
operations)
through
September
30,
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
other
than
those
attributable
to
the
investment
advisory
fees
incurred
by
the
Absolute
Convertible
Arbitrage
Fund
as
a
result
of
the
Absolute
Convertible
Arbitrage
Fund’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser,
broker
charges,
proxy
expenses
and
extraordinary
expenses)
of
Absolute
Convertible
Arbitrage
Fund
to
1.20%
and
1.45%
of
the
Institutional
Shares
and
Investor
Shares,
respectively,
through
August
1,
2023.
The
Adviser
waived
fees
of
$691,450
and
$113,921
for
Absolute
Convertible
Arbitrage
Fund
Institutional
and
Investor
Shares,
respectively,
for
the
period
ended
September
30,
2022.
In
addition,
the
Adviser
has
agreed
to
reimburse
fees
owed
to
waive
fees
owed
to
it
by
the
Absolute
Convertible
Arbitrage
Fund
in
an
amount
equal
to
the
fee
it
receives
from
Absolute
Flexible
Fund
based
on
Absolute
Convertible
Arbitrage
Fund’s
investment
in
Absolute
Flexible
Fund.
As
of
September
30,
2022,
Absolute
Convertible
Arbitrage
Fund
owned
approximately
73.69%
of
Absolute
Flexible
Fund.
For
the
period
ended
September
30,
2022,
the
Adviser
reimbursed
fees
of
$60,260
and
$6,083
for
Absolute
Convertible
Arbitrage
Fund
Institutional
and
Investor
Shares,
respectively,
related
to
these
affiliated
investments
and
these
reimbursements
are
not
subject
to
recoupment.
The
Funds
may
repay
the
Adviser
for
fees
waived
(other
than
advisory
fees
waived
by
the
Adviser
related
to
the
Absolute
Strategies
Fund
and
Absolute
Convertible
Arbitrage’s
investments
in
other
pooled
vehicles
sponsored
by
the
Adviser)
and
expenses
reimbursed
pursuant
to
the
expense
cap
if
such
payment
is
made
within
three
years
of
the
fee
waiver
or
expense
reimbursement
and
does
not
cause
the
total
annual
fund
operating
expenses
after
fee
waiver
and/
or
expense
reimbursement
of
the
Funds
to
exceed
the
lesser
of
(i)
the
then-current
expense
cap,
and
(ii)
the
expense
cap
in
place
at
the
time
the
fees/expenses
were
waived/reimbursed.
As
of
September
30,
2022,
$0,
$364,259,
$2,617,669
and
$62,985
for
Absolute
Strategies
Fund,
Absolute
Capital
Opportunities
Fund,
Absolute
Convertible
Arbitrage
Fund
and
Absolute
Flexible
Fund,
respectively,
is
subject
to
recapture
by
the
Adviser.
Other
waivers
are
not
eligible
for
recoupment.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
Note
5.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments
during
the
period
ended
September
30,
2022
,
were
as
follows:
Note
6.
Summary
of
Derivative
Activity
The
Funds
may
invest
in
certain
derivatives,
as
detailed
below,
to
meet
their
respective
investment
objectives.
Each
Fund’s
use
of
derivative
instruments
involves
risks
different
from,
or
possibly
greater
than,
the
risks
associated
with
investing
directly
in
securities
and
other
traditional
investments.
Derivatives
are
subject
to
a
number
of
risks,
such
as
liquidity
risk,
interest
rate
risk,
market
risk,
credit
risk
and
management
risk.
They
also
involve
the
risk
of
mispricing
or
improper
valuation
and
the
risk
that
changes
in
the
value
of
the
derivative
may
not
correlate
perfectly
with
the
underlying
asset,
rate
or
index.
In
some
cases,
a
Fund
could
lose
more
than
the
principal
amount
invested
by
investing
in
a
derivative
instrument.
Also,
suitable
derivative
transactions
may
not
be
available
in
all
circumstances
and
there
can
be
no
assurance
that
a
Fund
will
engage
in
these
transactions
to
reduce
exposure
to
other
risks
when
doing
so
would
be
beneficial.
The
Funds
may
also
utilize
certain
derivative
instruments
and
investment
techniques
for
risk
management
or
hedging
purposes.
There
is
no
assurance
that
such
risk
management
and
hedging
strategies
will
be
successful,
as
such
success
will
depend
on,
among
other
factors,
the
Adviser’s
ability
to
predict
the
future
correlation,
if
any,
between
the
performance
of
the
instruments
utilized
for
hedging
purposes
and
the
performance
of
the
investments
being
hedged.
The
following
provides
more
information
on
specific
types
of
derivatives
and
activity
in
each
Fund:
The
use
of
derivative
instruments
by
the
Absolute
Strategies
Fund
for
the
period
ended
September
30,
2022,
related
to
the
use
of
futures
contracts
and
purchased
and
written
options.
The
Absolute
Strategies
Fund
utilized
such
derivative
instruments
in
order
to
generate
absolute
return
and
to
implement
selective
hedging
and
to
manage
risk
exposure.
The
use
of
derivative
instruments
by
the
Absolute
Capital
Opportunities
Fund
for
the
period
ended
September
30,
2022,
related
to
the
use
of
purchased
and
written
options.
The
Absolute
Capital
Opportunities
Fund
utilized
such
options
in
order
to
manage
or
enhance
return
(including
through
leverage),
to
obtain
leverage
for
speculative
purposes,
and
to
implement
selective
hedging
and
to
manage
risk
exposure.
The
use
of
derivative
instruments
by
the
Absolute
Convertible
Arbitrage
Fund
for
the
period
ended
September
30,
2022,
related
to
the
use
of
futures
contracts.
The
Absolute
Convertible
Arbitrage
Fund
utilized
futures
contracts
in
order
to
generate
absolute,
risk-adjusted
returns,
to
obtain
leverage
for
speculative
purposes,
to
gain
exposure
to
certain
asset
classes
(in
which
case
the
derivatives
may
have
economic
characteristics
similar
to
those
of
the
reference
asset),
and
to
implement
selective
hedging
and
to
manage
risk
exposure.
A
futures
contract
is
a
bilateral
agreement
where
one
party
agrees
to
accept,
and
the
other
party
agrees
to
make,
delivery
of
cash
or
underlying
securities
or
commodities,
as
called
for
in
the
contract,
at
a
specified
date
and
at
an
agreed
upon
price.
An
index
futures
contract
involves
the
delivery
of
an
amount
of
cash
equal
to
a
specified
dollar
amount
multiplied
by
the
difference
between
the
index
value
at
the
close
of
trading
of
the
contract
and
at
the
price
designated
by
the
futures
contract.
Generally,
these
futures
contracts
are
closed
out
prior
to
the
expiration
date
of
Non-U.S.
Government
Obligations
Purchases
Sales
Absolute
Strategies
Fund
$
5,551,175
$
5,018,137
Absolute
Capital
Opportunities
Fund
27,460,257
11,823,617
Absolute
Convertible
Arbitrage
Fund
279,568,492
71,798,635
Absolute
Flexible
Fund
17,148,510
482,750
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
the
contracts.
A
public
market
exists
in
futures
contracts
covering
certain
indexes,
financial
instruments
and
foreign
currencies.
A
call
option
is
a
contract
under
which
the
purchaser
of
the
call
option,
in
return
for
a
premium
paid,
has
the
right
to
buy
the
security
(or
index)
underlying
the
option
at
a
specified
price
at
any
time
during
the
term
of
the
option.
The
writer
of
the
call
option,
who
receives
the
premium,
has
the
obligation
upon
exercise
of
the
option
to
deliver
the
underlying
security
against
payment
of
the
exercise
price.
A
put
option
gives
its
purchaser,
in
return
for
a
premium,
the
right
to
sell
the
underlying
security
at
a
specified
price
during
the
term
of
the
option.
The
writer
of
the
put,
who
receives
the
premium,
has
the
obligation
to
buy,
upon
exercise
of
the
option,
the
underlying
security
(or
a
cash
amount
equal
to
the
value
of
the
index)
at
the
exercise
price.
The
amount
of
a
premium
received
or
paid
for
an
option
is
based
upon
certain
factors
including
the
market
price
of
the
underlying
security,
the
relationship
of
the
exercise
price
to
the
market
price,
the
historical
price
volatility
of
the
underlying
security,
the
option
period
and
interest
rates.
Options
on
futures
contracts
are
similar
to
options
on
securities
except
that
an
option
on
a
futures
contract
gives
the
purchaser
the
right,
in
return
for
the
premium
paid,
to
assume
a
position
in
a
futures
contract
at
a
specified
exercise
price
at
any
time
during
the
period
of
the
option.
Upon
exercise
of
the
option,
the
delivery
of
the
futures
position
to
the
holder
of
the
option
will
be
accompanied
by
transfer
to
the
holder
of
an
accumulated
balance
representing
the
amount
by
which
the
market
price
of
the
futures
contract
exceeds,
in
the
case
of
a
call,
or
is
less
than,
in
the
case
of
a
put,
the
exercise
price
of
the
option
on
the
future.
The
volume
of
open
derivative
positions
may
vary
on
a
daily
basis
as
each
Fund
transacts
derivative
contracts
in
order
to
achieve
the
exposure
desired
by
the
Adviser.
The
notional
value
of
activity
for
the
period
ended
September
30,
2022,,
for
any
derivative
type
during
the
year
is
as
follows:
Following
is
a
summary
of
the
effect
of
derivatives
on
the
Statements
of
Assets
and
Liabilities
as
of
September
30,
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
$
2,231,156,412
$
–
$
179,560,451
Purchased
Options
7,898,969
27,721,354
–
Written
Options
(2,005,137)
(51,896,222)
–
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
–
purchased
options
$
771,700
Unrealized
appreciation
on
futures*
767,748
Total
asset
derivatives
$
1,539,448
Liability
derivatives:
Call
options
written
$
(120,250)
Location:
Equity
Risk
Asset
derivatives:
Investments,
at
value
–
purchased
options
$
12,330,731
Liability
derivatives:
Call
options
written
$
(742,375)
Put
options
written
(3,198,870)
Total
liability
derivatives
$
(3,941,245)
Location:
Interest
Risk
Asset
derivatives:
Unrealized
appreciation
on
futures*
$
2,967,854
*
Balance
is
included
in
the
deposits
with
broker
for
futures
on
the
Statements
of
Assets
and
Liabilities.
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
Realized
and
unrealized
gains
and
losses
on
derivatives
contracts
for
the
period
ended
September
30,
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
$
(810,103)
Written
options
84,104
Futures
2,910,761
Total
net
realized
gain
(loss)
$
2,184,762
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
–
purchased
options
$
534,594
Written
options
(186,473)
Futures
581,213
Total
net
change
in
unrealized
appreciation
(depreciation)
$
929,334
Location:
Equity
Contracts
Net
realized
gain
(loss)
on:
Investments
–
purchased
options
$
(12,957,647)
Written
options
11,797,211
Total
net
realized
gain
(loss)
$
(1,161,436)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments
–
purchased
options
$
11,788,071
Written
options
10,161,355
Total
net
change
in
unrealized
appreciation
(depreciation)
$
21,949,426
Location:
Interest
Contracts
Net
realized
gain
(loss)
on:
Futures
$
4,225,212
Total
net
realized
gain
(loss)
$
4,225,212
Net
change
in
unrealized
appreciation
(depreciation)
on:
Futures
$
1,043,673
Total
net
change
in
unrealized
appreciation
(depreciation)
$
1,043,673
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
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
September
30,
2022,
cost
for
federal
income
tax
purposes
is
substantially
the
same
as
for
financial
statement
purposes
and
net
unrealized
appreciation
(depreciation)
consists
of:
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.
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**
$
771,700
$
–
$
–
$
–
$
771,700
Unrealized
appreciation
on
futures***
767,748
–
–
–
767,748
Liabilities:
Over-the-counter
derivatives**
(120,250)
–
120,250
–
–
Absolute
Capital
Opportunities
Fund
Assets:
Over-the-counter
derivatives**
12,330,731
–
–
–
12,330,731
Liabilities:
Over-the-counter
derivatives**
(3,941,245)
–
3,941,245
–
–
Absolute
Convertible
Arbitrage
Fund
Assets:
Unrealized
appreciation
on
futures***
2,967,854
–
–
–
2,967,854
*
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.
Gross
Unrealized
Appreciation
Gross
Unrealized
Depreciation
Net
Unrealized
Appreciation
(Depreciation)
Absolute
Strategies
Fund
$
325,059
$
(391,457)
$
(66,398)
Absolute
Capital
Opportunities
Fund
23,840,523
(16,156,051)
7,684,472
Absolute
Convertible
Arbitrage
Fund
129,212,515
(138,907,488)
(9,694,973)
Absolute
Flexible
Fund
605,520
(964,000)
(358,480)
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
ABSOLUTE
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
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
prior
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
were
recognized
for
tax
purposes
on
the
first
business
day
of
the
Fund’s
current
fiscal
year,
April
1,
2022.
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.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
September
30,
2022
Investment
Advisory
Agreement
Approval
At
the
March
18,
2022
Board
meeting,
the
Board,
including
the
Independent
Trustees,
considered
the
approval
of
the
investment
advisory
agreement
between
Absolute
Investment
Advisers,
LLC
(the
“Adviser”)
and
the
Trust,
as
it
pertains
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
to
be
provided
by
the
Adviser
to
the
Fund.
The
Board
also
discussed
the
materials
with
Fund
counsel
and,
as
necessary,
with
the
Trust's
administrator.
During
its
deliberations,
the
Board
received
an
oral
presentation
from
the
Adviser,
and
was
assisted
by
the
advice
of
Trustee
counsel.
At
the
meeting,
the
Board
reviewed,
among
other
matters:
(1)
the
nature,
extent
and
quality
of
the
services
that
would
be
provided
to
the
Fund
by
the
Adviser,
including
information
on
relevant
investment
performance
of
the
Adviser;
(2)
the
costs
of
the
services
to
be
provided
and
projected
profitability
to
the
Adviser
of
its
relationship
with
the
Fund;
(3)
the
proposed
advisory
fee
and
total
expense
ratio
of
the
Fund
compared
to
those
of
a
relevant
peer
group
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
the
Fund
grows
and
whether
the
advisory
fee
enables
the
Fund's
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
other
benefits
anticipated
to
be
received
by
the
Adviser
from
its
relationship
with
the
Fund.
Nature,
Extent
and
Quality
of
Services
Based
on
written
materials
received
from
the
Adviser,
a
presentation
from
senior
representatives
of
the
Adviser,
and
a
discussion
with
the
Adviser
about
the
personnel,
operations
and
financial
condition
of
the
Adviser,
the
Board
considered
the
quality
of
services
to
be
provided
by
the
Adviser
under
the
Advisory
Agreement.
In
this
regard,
the
Board
considered
information
regarding,
among
other
things,
the
experience,
qualifications
and
professional
background
of
the
portfolio
managers
and
other
personnel
at
the
Adviser
with
principal
responsibility
for
the
Fund’s
investments;
the
investment
philosophy
and
decision-making
process
of
those
professionals;
the
capability
and
integrity
of
the
Adviser’s
senior
management
and
staff;
and
the
quality
of
the
Adviser’s
services
with
respect
to
regulatory
compliance.
The
Board
considered
also
the
adequacy
of
the
Adviser’s
resources.
The
Board
noted
the
Adviser’s
representation
that
it
is
financially
stable
and
has
the
operational
capability
needed
to
provide
high-quality
investment
advisory
services
to
the
Fund
for
the
foreseeable
future.
Based
on
the
presentation
and
the
materials
provided
by
the
Adviser,
the
Board
concluded
that,
overall,
it
was
satisfied
with
the
nature,
extent
and
quality
of
services
to
be
provided
to
the
Fund
by
the
Adviser
under
the
Advisory
Agreement.
Performance
Recognizing
that
the
Fund
is
new
and
has
no
performance
history,
the
Board
did
not
consider
the
performance
history
of
the
Fund.
Instead,
the
Board
considered
the
performance
achieved
by
the
Adviser
managing
another
series
of
the
Trust,
the
Absolute
Convertible
Arbitrage
Fund.
The
Board
noted
that,
although
the
Absolute
Convertible
Arbitrage
Fund
underperformed
its
primary
benchmark
index
over
the
one-,
three-,
and
five-year
periods
ended
December
31,
2021,
the
Absolute
Convertible
Arbitrage
Fund
outperformed
its
secondary
benchmark
index
over
the
same
periods.
The
Board
considered
the
Adviser’s
representation
that
the
Fund
is
expected
to
perform
differently
than
the
Absolute
Convertible
Arbitrage
Fund
due
to
differences
in
investment
strategy
and
risk/return
profile,
and
given
that
the
Fund
is
expected
to
have
more
volatility
than
Absolute
Convertible
Arbitrage
Fund.
Based
on
the
foregoing
and
other
relevant
factors,
the
Board
concluded
that
the
Adviser’s
management
of
the
Fund
could
benefit
the
Fund
and
its
shareholders.
Compensation
The
Board
evaluated
the
Adviser’s
proposed
compensation
for
providing
advisory
services
to
the
Fund
and
analyzed
comparative
information
on
“actual”
advisory
fee
rates
(i.e.,
after
fee
waivers),
and
actual
total
expenses
of
the
Fund's
relevant
Strategic
Insight
peer
group.
The
Board
noted
that
the
Adviser’s
proposed
actual
advisory
fee
rate
and
the
Fund's
actual
total
expense
ratio
were
each
within
a
reasonable
range
of
the
fee
rates
and
expense
ratios
of
the
Absolute
Convertible
Arbitrage
Fund
and
of
the
funds
included
in
the
Strategic
Insight
peer
group.
The
Board
considered
that
the
Adviser
had
proposed
a
contractual
expense
cap
on
the
total
expense
ratio
for
the
Fund
in
an
effort
to
ensure
that
the
expenses
of
the
Fund
remained
competitive.
Based
on
the
foregoing,
the
Board
concluded
that
the
Adviser’s
advisory
fee
rate
to
be
charged
to
the
Fund
was
reasonable.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
September
30,
2022
Cost
of
Services
and
Profitability
The
Board
considered
information
provided
by
the
Adviser
regarding
the
estimated
costs
of
services
and
its
estimated
profitability
with
respect
to
the
Fund.
In
this
regard,
the
Board
considered
the
Adviser’s
resources
devoted
to
the
Fund,
as
well
as
the
Adviser’s
discussion
of
the
costs
and
profitability
of
its
overall
fund
activities,
The
Board
considered
that
profits
to
be
realized
by
the
Adviser
would
be
a
function
of
the
future
growth
in
assets
of
the
Fund
and
concluded
that
the
costs
of
the
services
to
be
provided
and
profits
to
be
realized
by
the
Adviser
were
not
a
material
factor
in
approving
the
Advisory
Agreement.
Economies
of
Scale
The
Board
evaluated
whether
the
Fund
would
benefit
from
any
economies
of
scale.
In
this
respect,
the
Board
considered
the
proposed
fee
structure,
asset
size,
and
expense
cap
of
the
Fund.
The
Board
also
considered
the
Adviser’s
representation
that
it
could
be
difficult
for
the
Fund
to
achieve
economies
of
scale
at
and
shortly
following
inception
but
that
economies
of
scale
may
be
achievable
in
the
future
as
the
Fund’s
assets
increase.
In
this
respect,
the
Board
noted
that
the
Adviser
was
not
proposing
breakpoints
at
this
time
because
the
Fund
had
not
yet
commenced
operations.
Based
on
the
foregoing
information,
the
Board
concluded
that
economies
of
scale
were
not
a
material
factor
in
approving
the
Advisory
Agreement.
Other
Benefits
The
Board
noted
the
Adviser’s
representation
that,
aside
from
its
contractual
advisory
fees,
it
would
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
business
judgment,
that
the
advisory
arrangement,
as
outlined
in
the
Advisory
Agreement,
was
fair
and
reasonable
in
light
of
the
services
to
be
performed,
expenses
to
be
incurred
and
such
other
matters
as
the
Board
considered
relevant.
Liquidity
Risk
Management
Program
The
Funds
have
adopted
and
implemented
a
written
liquidity
risk
management
program,
as
required
by
Rule
22e-
4
(the
“Liquidity
Rule”)
under
the
Investment
Company
Act
of
1940,
as
amended.
The
liquidity
risk
management
program
is
reasonably
designed
to
assess
and
manage
the
Fund’s
liquidity
risk,
taking
into
consideration,
among
other
factors,
the
Funds'
investment
strategy
and
the
liquidity
of
the
portfolio
investments
during
normal
and
reasonably
foreseeable
stressed
conditions,
its
short
and
long-term
cash
flow
projections
and
its
cash
holdings
and
access
to
other
funding
sources.
The
Board
approved
the
designation
of
the
Trust’s
Valuation
Committee
as
the
administrator
of
the
liquidity
risk
management
program
(the
“Program
Administrator”).
The
Program
Administrator
is
responsible
for
the
administration
and
oversight
of
the
program
and
for
reporting
to
the
Board
on
at
least
an
annual
basis
regarding,
among
other
things,
the
program’s
operation,
adequacy,
and
effectiveness.
The
Program
Administrator
assessed
the
Fund’s
liquidity
risk
profile
based
on
information
gathered
for
the
period
July
1,
2021
through
June
30,
2022
in
order
to
prepare
a
written
report
to
the
Board
for
review
at
its
meeting
held
on
September
15,
2022.
The
Program
Administrator’s
written
report
stated
that:
(i)
the
Funds
are
able
to
meet
redemptions
in
normal
and
reasonably
foreseeable
stressed
conditions
and
without
significant
dilution
of
remaining
shareholders’
interests
in
the
Funds;
(ii)
the
Funds'
strategy
is
appropriate
for
an
open-end
mutual
fund;
(iii)
the
liquidity
classification
determinations
regarding
the
Funds'
portfolio
investments,
which
take
into
account
a
variety
of
factors
and
may
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
September
30,
2022
incorporate
analysis
from
one
or
more
third-party
data
vendors,
remained
appropriate;
(iv)
the
Funds
did
not
approach
the
internal
triggers
set
forth
in
the
liquidity
risk
management
program
or
the
regulatory
percentage
limitation
(15%)
on
holdings
in
illiquid
investments;
(v)
it
continues
to
be
appropriate
to
not
set
a
“highly
liquid
investment
minimum”
for
the
Funds
because
the
Funds
primarily
hold
“highly
liquid
investments”;
and
(vi)
the
liquidity
risk
management
program
remains
reasonably
designed
and
adequately
implemented
to
prevent
violations
of
the
Liquidity
Rule.
No
significant
liquidity
events
impacting
the
Funds
or
proposed
changes
to
the
Program
were
noted
in
the
report.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
each
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
each
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(888)
992-2765
and
on
the
U.S.
Securities
and
Exchange
Commission’s
(the
“SEC”)
website
at
www.sec.gov.
Each
Fund’s
proxy
voting
record
for
the
most
recent
twelve-month
period
ended
June
30
is
available,
without
charge
and
upon
request,
by
calling
(888)
992-2765
and
on
the
SEC’s
website
at
www.sec.gov.
Availability
of
Quarterly
Portfolio
Schedules
Each
Fund
files
its
complete
schedule
of
portfolio
holdings
with
the
SEC
for
the
first
and
third
quarters
of
each
fiscal
year
on
Form
N-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
Funds
,
you
incur
ongoing
costs,
including
management
fees,
distribution
(12b-1)
fees
and
other
Fund
expenses.
This
example
is
intended
to
help
you
understand
your
ongoing
costs
(in
dollars)
of
investing
in
the
Funds
and
to
compare
these
costs
with
the
ongoing
costs
of
investing
in
other
mutual
funds.
The
example
is
based
on
an
investment
of
$1,000
invested
at
the
beginning
of
the
period
and
held
for
the
entire
period
from
April
1,
2022
(June
30,
2022
for
the
Absolute
Flexible
Fund)
through
September
30,
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.
ABSOLUTE
FUNDS
ADDITIONAL
INFORMATION
September
30,
2022
Beginning
Account
Value
April
1,
2022
Ending
Account
Value
September
30,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Absolute
Strategies
Fund
Actual
$
1,000.00
$
1,074.97
$
9.62
1.85%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,015.79
$
9.35
1.85%
Absolute
Capital
Opportunities
Fund
Actual
$
1,000.00
$
992.07
$
7.69
1.54%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,017.35
$
7.79
1.54%
Absolute
Convertible
Arbitrage
Fund
Institutional
Shares
Actual
$
1,000.00
$
981.02
$
6.56
1.32%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,018.45
$
6.68
1.32%
Investor
Shares
Actual
$
1,000.00
$
979.71
$
7.79
1.57%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,017.20
$
7.94
1.57%
*
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
(183)
divided
by
365
to
reflect
the
half-year
period.
Beginning
Account
Value
June
30,
2022
Ending
Account
Value
September
30,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio**
Absolute
Flexible
Fund
Institutional
Shares
Actual
$
1,000.00
$
991.00
$
3.78
1.49%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,008.94
$
3.81
1.49%
**
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
period
(93)
divided
by
365
to
reflect
the
period.
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-SAR-0922
Semi-Annual
Report
September
30,
2022
(Unaudited)
Beck
Mack
+
Oliver
Partners
Fund
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
September
30,
2022
Dear
Fellow
Shareholder:
The
Beck
Mack
+
Oliver
Partners
Fund
(the
“Partners
Fund”)
returned
-22.51%
net
of
fees
and
expenses
for
the
six-month
semi-annual
period
ended
September
30,
2022
(the
“Semi-Annual
Period”),
resulting
in
a
net
asset
value
of
$15.25.
By
comparison,
during
the
Semi-Annual
Period,
the
S&P
500
Index
(the
“S&P
500”),
which
is
the
Partners
Fund’s
principal
benchmark,
returned
-20.20%.
Performance
Update
The
20.20%
decline
in
the
S&P
500
during
the
Semi-Annual
Period
followed
a
period
of
unusually
strong
equity
market
returns.
During
the
prior
two
fiscal
years—i.e.,
from
March
31,
2020,
to
March
31,
2022—the
S&P
500
generated
a
cumulative
total
return
of
+80.81%,
while
the
Partners
Fund
generated
a
cumulative
total
return
of
+113.55%.
From
March
31,
2020,
to
the
end
of
the
Semi-Annual
Period,
the
Partners
Fund
generated
a
cumulative
total
return
of
+65.48%
vs.
+44.29%
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
Semi-Annual
Period.
1
Largest
Positive
Contributors
We
discussed
our
new
investment
in
Black
Knight
in
the
shareholder
letter
for
the
fiscal
year
ended
March
31,
2022
(“March
2022
Letter”).
In
May
2022,
the
company
announced
that
it
would
be
acquired
by
Intercontinental
Exchange
for
a
mix
of
cash
and
stock.
While
the
acquisition
purchase
price
was
less
than
the
intrinsic
value
that
we
expected
Black
Knight
to
achieve
in
the
coming
years
as
an
independent
company,
the
transaction
announcement
was
a
substantial
positive
catalyst
for
the
stock,
which
led
to
strong
total
returns
despite
the
significant
decline
in
the
S&P
500.
In
light
of
the
transaction,
we
exited
the
position.
1
Contribution
refers
to
how
much
the
position
contributed
to,
or
detracted
from,
the
Partners
Fund’s
investment
performance
during
the
Semi-Annual
Period.
Total
return
refers
to
the
security’s
total
return
during
the
entire
Semi-Annual
Period.
Largest
Positive
Contributors
Largest
Negative
Contributors
Position
Contribution
Total
Return
Position
Contribution
Total
Return
Black
Knight
+0.33%
+11.62%
Warner
Bros.
Discovery
-2.81%
-54.90%
CoStar
+0.20%
+4.56%
Blackstone
-2.61%
-32.38%
Advanced
Drainage
Systems
+0.11%
+4.89%
Enstar
-2.09%
-35.06%
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
September
30,
2022
We
also
discussed
our
new
investment
in
CoStar
in
the
March
2022
Letter,
where
we
noted
that
we
had
been
following
the
company
for
a
period
of
time
while
waiting
for
an
attractive
entry
point
to
purchase
the
stock.
We
initiated
a
position
in
March
at
a
share
price
of
$54.19,
added
to
the
position
in
May
at
$56.64,
and
at
the
end
of
the
Semi-Annual
Period
CoStar’s
share
price
was
$69.65.
We
continue
to
be
enthusiastic
about
the
company’s
growth
potential
across
its
various
businesses.
Advanced
Drainage
Systems
has
generated
outstanding
returns
for
the
Partners
Fund
since
we
initiated
a
position
towards
the
end
of
the
fiscal
year
ended
March
31,
2019.
The
performance
of
the
underlying
business
has
met
or
exceeded
our
expectations
in
every
important
respect,
and
the
valuation
multiple
has
expanded
considerably
during
our
ownership.
As
such,
we
have
periodically
sold
shares
of
Advanced
Drainage
Systems,
but
our
positive
outlook
for
the
business
remains
fully
intact.
In
the
March
2022
Letter,
we
discussed
the
merger
between
Discovery
and
WarnerMedia,
which
closed
in
April
2022.
The
combined
company,
Warner
Bros.
Discovery,
is
one
the
largest
global
video
content
companies
with
several
major
assets,
including
HBO,
the
Warner
Bros.
film
and
television
studios,
the
Discovery
Channel,
and
many
others.
Warner
Bros.
Discovery
stock
has
suffered
from
unfortunate
timing,
insofar
as
the
transaction
resulted
in
the
combined
company
having
a
leveraged
balance
sheet
just
as
the
broader
equity
market
experienced
a
particularly
sharp
drawdown.
Moreover,
the
ongoing
economic
slowdown
has
led
to
a
weaker
advertising
market,
which
is
an
important
source
of
revenue
for
the
company,
and
the
integration,
while
essentially
on-track,
has
been
complex
and
challenging.
We
remain
confident
in
the
management
team’s
ability
to
successfully
integrate
the
two
companies,
achieve
substantial
expense
synergies,
generate
strong
cash
flow,
and
rapidly
pay
down
debt,
the
realization
of
which
we
believe
will
act
as
a
positive
catalyst
for
the
stock.
We
have
discussed
our
investment
in
Blackstone
in
particular,
and
the
alternative
asset
management
industry
more
generally,
in
several
prior
shareholder
letters,
including
the
March
2022
Letter.
Although
Blackstone
was
a
significant
performance
detractor
and
meaningfully
underperformed
the
S&P
500
during
the
Semi-Annual
Period,
it
was
the
largest
positive
performance
contributor
during
the
fiscal
year
ended
March
31,
2022,
when
it
generated
a
total
return
of
+76.22%.
We
believe
its
recent
underperformance
mainly
reflects
a
misperception
that
weaker
public
equity
markets
and
higher
interest
rates
represent
material
headwinds
for
its
core
business,
which
we,
by
contrast,
expect
to
continue
to
generate
attractive
growth
in
assets
under
management
and
fee-related
earnings.
The
underperformance
of
Enstar
during
the
Semi-Annual
Period
reflects
both
a
decline
in
the
company’s
book
value
per
share,
which
was
caused
primarily
by
unrealized
losses
in
its
investment
portfolio,
and
a
diminution
in
the
stock’s
price-to-
book
value
multiple.
2
The
current
price-to-book
value
multiple
is
meaningfully
below
the
valuation
at
which
the
stock
has
tended
to
trade
historically.
Over
time,
we
expect
book
value
per
share
to
grow
at
attractive
rates,
and
we
do
not
expect
the
stock
to
permanently
trade
at
such
a
sizeable
discount
to
book
value.
2
Price-to-book
value
compares
a
company’s
share
price
to
its
book
value
per
share.
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
September
30,
2022
New
&
Exited
Positions
The
table
below
indicates
the
one
new
position
that
was
initiated
and
the
three
positions
that
were
exited
during
the
Semi-
Annual
Period.
We
recently
made
a
new
investment
in
Ferguson,
which
is
a
leading
wholesale
distributor
of
plumbing,
waterworks,
and
HVAC
products.
We
believe
that
the
company
is
likely
to
continue
to
organically
grow
revenue
in
the
high-single
digits
and
capture
additional
market
share,
due
to
its
superior
distribution
network,
unique
corporate
culture,
and
other
competitive
advantages.
The
company
recently
changed
its
primary
stock
listing
from
the
London
Stock
Exchange
to
the
New
York
Stock
Exchange,
which
we
believe
caused
some
degree
of
dislocation
in
the
share
price
and
led
to
an
opportunity
to
initiate
a
position
at
an
attractive
valuation.
In
addition
to
Black
Knight,
which
we
discussed
above,
we
exited
CAE
and
Matador
during
the
Semi-Annual
Period.
While
we
continue
to
believe
that
CAE
has
a
fantastic
civil
aviation
business,
we
grew
increasingly
disappointed
with
the
company’s
acquisition
of
a
military
training
business,
and
we
lost
confidence
in
the
management
team.
Regarding
Matador,
its
share
price
has
experienced
a
remarkable
run
in
the
last
two
and
a
half
years,
having
appreciated
from
$2.48
as
of
March
31,
2020,
to
$48.92
as
of
September
30,
2022.
We
had
been
progressively
selling
the
Matador
position
as
the
stock
appreciated,
and
we
finally
exited
during
the
Semi-Annual
Period.
Other
Portfolio
Observations
As
of
the
end
of
the
Semi-Annual
Period,
the
Partners
Fund
held
26
equity
positions,
with
the
10
largest
positions
representing
53.9%
of
net
assets.
This
compares
to
28
equity
positions,
with
the
10
largest
positions
representing
51.0%
of
net
assets,
as
of
March
31,
2022.
As
of
the
end
of
the
Semi-Annual
Period,
the
largest
sector
exposures
were
financials
(35.5%
of
net
assets),
information
technology
(17.7%),
and
healthcare
(15.2%),
and
cash
represented
1.4%
of
net
assets.
As
of
the
end
of
the
Semi-Annual
Period,
the
Partners
Fund
had
an
estimated
net
capital
loss
carryforwards
of
approximately
$9.4
million,
or
approximately
$3.27
per
share.
We
regard
this
carryforwards
as
a
potentially
significant
source
a
future
value
for
the
Partners
Fund’s
shareholders,
as
it
may
be
utilized
to
offset
future
realized
capital
gains.
Outlook
&
Conclusion
During
calendar
2022,
the
equity
market
has
been
buffeted
by
a
number
of
headwinds,
including
elevated
inflation,
rapidly
rising
interest
rates,
and
slowing
economic
growth.
As
stock-pickers
rather
than
market-timers,
we
are
not
inclined
to
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
September
30,
2022
hazard
a
guess
as
to
where
or
when
the
market
might
bottom,
and
we
certainly
do
not
make
investment
decisions
on
that
basis.
Our
approach,
in
this
kind
of
environment,
is
to
prioritize
the
highest-quality
investments,
both
within
the
existing
portfolio
and
in
the
context
of
new
investment
ideas.
By
“quality,”
we
mean
great
businesses
that
can
compound
their
earnings
at
attractive
rates
over
long
periods
of
time.
These
businesses
tend
to
have
well-aligned
management
teams,
durable
competitive
advantages,
healthy
balance
sheets,
and
smart
capital
allocation.
Precisely
because
of
these
characteristics,
such
companies
only
occasionally
trade
at
compelling
valuations,
and
when
they
do
we
would
like
to
take
advantage
of
the
corresponding
opportunity.
We
believe
our
recent
investment
in
Ferguson
exemplifies
this
approach,
and
we
hope
to
identify
other
great
businesses
trading
at
temporarily
discounted
valuations.
Thank
you
for
your
support.
Yours
sincerely,
Appendix:
Historical
Performance
Total
returns
for
the
Partners
Fund
and
the
S&P
500
Index
for
the
periods
ended
September
30,
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
1.58%.
However,
the
Partners
Fund’s
adviser
has
agreed
to
contractually
waive
its
fees
and/or
reimburse
expenses
to
limit
total
operating
expenses
to
1.00%
through
at
least
July
31,
2023,
otherwise
performance
shown
would
have
been
lower.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
Returns
greater
than
one
year
are
annualized.
IMPORTANT
RISKS
AND
DISCLOSURE:
There
is
no
assurance
that
the
Partners
Fund
will
achieve
its
investment
objective.
An
investment
in
the
Partners
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal
amount
invested.
The
risks
associated
with
the
Partners
Fund
include:
equity
and
convertible
securities
risk,
foreign
securities
risk,
management
risk,
fixed
income
securities
risk,
noninvestment
Robert
C.
Beck
Richard
C.
Fitzgerald
Annualized
Returns
Returns
as
of
09/30/22
Semi-Annual
Period
One
Year
Three
Years
Five
Years
Ten
Years
Since
Inception
(4/19/91)
Partners
Fund
-22.51%
-21.63%
+9.45%
+6.78%
+5.79%
+8.11%
S&P
500
Index
-20.20%
-15.47%
+8.16%
+9.24%
+11.70%
+9.55%
Beck
Mack
+
Oliver
Partners
Fund
A
MESSAGE
TO
OUR
SHAREHOLDERS
September
30,
2022
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
September
30,
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
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.
hazard
a
guess
as
to
where
or
when
the
market
might
bottom,
and
we
certainly
do
not
make
investment
decisions
on
that
basis.
Our
approach,
in
this
kind
of
environment,
is
to
prioritize
the
highest-quality
investments,
both
within
the
existing
portfolio
and
in
the
context
of
new
investment
ideas.
By
“quality,”
we
mean
great
businesses
that
can
compound
their
earnings
at
attractive
rates
over
long
periods
of
time.
These
businesses
tend
to
have
well-aligned
management
teams,
durable
competitive
advantages,
healthy
balance
sheets,
and
smart
capital
allocation.
Precisely
because
of
these
characteristics,
such
companies
only
occasionally
trade
at
compelling
valuations,
and
when
they
do
we
would
like
to
take
advantage
of
the
corresponding
opportunity.
We
believe
our
recent
investment
in
Ferguson
exemplifies
this
approach,
and
we
hope
to
identify
other
great
businesses
trading
at
temporarily
discounted
valuations.
Thank
you
for
your
support.
Yours
sincerely,
Appendix:
Historical
Performance
Total
returns
for
the
Partners
Fund
and
the
S&P
500
Index
for
the
periods
ended
September
30,
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
1.58%.
However,
the
Partners
Fund’s
adviser
has
agreed
to
contractually
waive
its
fees
and/or
reimburse
expenses
to
limit
total
operating
expenses
to
1.00%
through
at
least
July
31,
2023,
otherwise
performance
shown
would
have
been
lower.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
Returns
greater
than
one
year
are
annualized.
IMPORTANT
RISKS
AND
DISCLOSURE:
There
is
no
assurance
that
the
Partners
Fund
will
achieve
its
investment
objective.
An
investment
in
the
Partners
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal
amount
invested.
The
risks
associated
with
the
Partners
Fund
include:
equity
and
convertible
securities
risk,
foreign
securities
risk,
management
risk,
fixed
income
securities
risk,
noninvestment
Robert
C.
Beck
Richard
C.
Fitzgerald
Annualized
Returns
Returns
as
of
09/30/22
Semi-Annual
Period
One
Year
Three
Years
Five
Years
Ten
Years
Since
Inception
(4/19/91)
Partners
Fund
-22.51%
-21.63%
+9.45%
+6.78%
+5.79%
+8.11%
S&P
500
Index
-20.20%
-15.47%
+8.16%
+9.24%
+11.70%
+9.55%
Beck
Mack
+
Oliver
Partners
Fund
PERFORMANCE
CHART
AND
ANALYSIS
September
30,
2022
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
Beck,
Mack
+
Oliver
Partners
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
S&P
500®
Index
(the
“S&P
500”),
over
the
past
10
fiscal
years.
The
S&P
500
is
a
broad-based
measurement
of
the
U.S.
stock
market
based
on
the
performance
of
500
widely
held
large
capitalization
common
stocks.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
a
$10,000
Investment
Beck
Mack
+
Oliver
Partners
Fund
vs.
S&P
500
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
For
the
most
recent
month-end
performance,
please
call
(800)
943-6786.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
1.58%.
However,
the
Fund’s
adviser has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses
and
extraordinary
expenses)
to
1.00%,
through
July
31,
2023
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
During
the
period,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
Shares
redeemed
or
exchanged
within
60
days
of
purchase
will
be
charged
a
2.00%
redemption
fee.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
Average
Annual
Total
Returns
Periods
Ended
September
30,
2022
One
Year
Five
Year
Ten
Year
Beck
Mack
+
Oliver
Partners
Fund
-21.63%
6.78%
5.79%
S&P
500®
Index
-15.47%
9.24%
11.70%
Beck
Mack
+
Oliver
Partners
Fund
PORTFOLIO
PROFILE
September
30,
2022
PORTFOLIO
HOLDINGS
%
of
Total
Investments
Beck
Mack
+
Oliver
Partners
Fund
SCHEDULE
OF
INVESTMENTS
September
30,
2022
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
September
30,
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
and
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
-
98.6%
Communication
Services
-
10.6%
26,000
Alphabet,
Inc.,
Class C
(a)
$
2,499,900
75,000
Lumen
Technologies,
Inc.
546,000
140,000
Warner
Bros
Discovery,
Inc.
(a)
1,610,000
4,655,900
Consumer
Discretionary
-
3.0%
11,000
Hilton
Worldwide
Holdings,
Inc.
1,326,820
Energy
-
3.8%
70,000
Enterprise
Products
Partners
LP
1,664,600
Financials
-
35.5%
51,000
Apollo
Global
Management,
Inc.
2,371,500
13,000
Arthur
J
Gallagher
&
Co.
2,225,860
37,000
Blackstone,
Inc.,
Class A
3,096,900
6,000
Credit
Acceptance
Corp.
(a)
2,628,000
12,000
Enstar
Group,
Ltd.
(a)
2,035,080
16,000
JPMorgan
Chase
&
Co.
1,672,000
21,000
The
Charles
Schwab
Corp.
1,509,270
15,538,610
Health
Care
-
15.2%
6,000
Abbott
Laboratories
580,560
9,000
Laboratory
Corp.
of
America
Holdings
1,843,290
84,000
RadNet,
Inc.
(a)
1,709,400
215,000
Teva
Pharmaceutical
Industries,
Ltd.,
ADR
(a)
1,735,050
3,000
Waters
Corp.
(a)
808,590
6,676,890
Industrials
-
8.9%
8,000
Advanced
Drainage
Systems,
Inc.
994,960
43,000
Ashtead
Group
PLC
1,988,750
9,000
Ferguson
PLC
926,370
3,910,080
Information
Technology
-
17.7%
14,000
CoStar
Group,
Inc.
(a)
975,100
26,000
Fiserv,
Inc.
(a)
2,432,820
6,750
Mastercard,
Inc.,
Class A
1,919,295
10,500
Microsoft
Corp.
2,445,450
7,772,665
Materials
-
2.1%
4,500
The
Sherwin-Williams
Co.
921,375
Real
Estate
-
1.8%
90,000
Tricon
Residential,
Inc.
778,500
Total
Common
Stock
(Cost
$33,883,241)
43,245,440
Shares
Security
Description
Value
Money
Market
Fund
-
1.7%
750,897
First
American
Government
Obligations
Fund,
Class X,
2.77%
(b)
(Cost
$750,897)
$
750,897
Investments,
at
value
-
100.3%
(Cost
$34,634,138)
$
43,996,337
Other
Assets
&
Liabilities,
Net
-
(0.3)%
(144,727)
Net
Assets
-
100.0%
$
43,851,610
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
September
30,
2022.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
43,245,440
Level
2
-
Other
Significant
Observable
Inputs
750,897
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
43,996,337
Beck
Mack
+
Oliver
Partners
Fund
STATEMENT
OF
ASSETS
AND
LIABILITIES
September
30,
2022
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
$34,634,138)
$
43,996,337
Receivables:
Fund
shares
sold
2,444
Dividends
6,383
Prepaid
expenses
20,797
Total
Assets
44,025,961
LIABILITIES
Payables:
Investment
securities
purchased
124,211
Fund
shares
redeemed
1,981
Accrued
Liabilities:
Investment
adviser
fees
13,411
Fund
services
fees
9,554
Other
expenses
25,194
Total
Liabilities
174,351
NET
ASSETS
$
43,851,610
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
42,908,013
Distributable
Earnings
943,597
NET
ASSETS
$
43,851,610
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
2,876,286
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE*
$
15.25
Beck
Mack
+
Oliver
Partners
Fund
STATEMENT
OF
OPERATIONS
FOR
THE
SIX
MONTHS
ENDED
SEPTEMBER
30,
2022
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$1,305)
$
382,783
Total
Investment
Income
382,783
EXPENSES
Investment
adviser
fees
259,098
Fund
services
fees
84,839
Custodian
fees
4,707
Registration
fees
10,483
Professional
fees
18,404
Trustees'
fees
and
expenses
2,871
Other
expenses
39,068
Total
Expenses
419,470
Fees
waived
(160,371)
Net
Expenses
259,099
NET
INVESTMENT
INCOME
123,684
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
loss
on:
Investments
(1,259,029)
Foreign
currency
transactions
(942)
Net
realized
loss
(1,259,971)
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
(11,871,458)
NET
REALIZED
AND
UNREALIZED
LOSS
(13,131,429)
DECREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(13,007,745)
Beck
Mack
+
Oliver
Partners
Fund
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
See
Notes
to
Financial
Statements.
For
the
Six
Months
Ended
September
30,
2022
For
the
Year
Ended
March
31,
2022
OPERATIONS
Net
investment
income
$
123,684
$
177,809
Net
realized
gain
(loss)
(1,259,971)
4,746,128
Net
change
in
unrealized
appreciation
(depreciation)
(11,871,458)
3,222,907
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(13,007,745)
8,146,844
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
867,435
14,461,428
Redemption
of
shares
(3,493,339)
(10,612,972)
Redemption
fees
2,074
24,265
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
(2,623,830)
3,872,721
Increase
(Decrease)
in
Net
Assets
(15,631,575)
12,019,565
NET
ASSETS
Beginning
of
Period
59,483,185
47,463,620
End
of
Period
$
43,851,610
$
59,483,185
SHARE
TRANSACTIONS
Sale
of
shares
48,374
726,905
Redemption
of
shares
(194,463)
(534,766)
Increase
(Decrease)
in
Shares
(146,089)
192,139
Beck
Mack
+
Oliver
Partners
Fund
FINANCIAL
HIGHLIGHTS
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period
.
For
the
Six
Months
Ended
September
30,
2022
For
the
Years
Ended
March
31,
2022
2021
2020
2019
2018
NET
ASSET
VALUE,
Beginning
of
Period
$
19.68
$
16.77
$
9.27
$
11.24
$
11.56
$
10.26
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.04
0.06
0.10
0.12
0.14
0.13
Net
realized
and
unrealized
gain
(loss)
(4.47)
2.84
7.48
(2.03)
(0.46)
1.18
Total
from
Investment
Operations
(4.43)
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)
0.00(b)
0.01
0.00(b)
0.00(b)
0.00(b)
0.00(b)
NET
ASSET
VALUE,
End
of
Period
$
15.25
$
19.68
$
16.77
$
9.27
$
11.24
$
11.56
TOTAL
RETURN
(22.51)%(c)
17.35%
81.97%
(17.17)%
(2.77)%
12.77%
RATIOS/
SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Period
(000s
omitted)
$
43,852
$
59,483
$
47,464
$
27,161
$
36,760
$
38,368
Ratios
to
Average
Net
Assets:
Net
investment
income
0.48%(d)
0.30%
0.82%
1.01%
1.19%
1.17%
Net
expenses
1.00%(d)
1.00%
1.00%
1.00%
1.00%
1.00%
Gross
expenses
(e)
1.62%(d)
1.58%
1.86%
1.80%
1.74%
1.76%
PORTFOLIO
TURNOVER
RATE
6%(c)
15%
18%
10%
17%
19%
(a)
Calculated
based
on
average
shares
outstanding
during
each
period.
(b)
Less
than
$0.01
per
share.
(c)
Not
annualized.
(d)
Annualized.
(e)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
Beck
Mack
+
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
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
period.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Debt
securities
may
be
valued
at
prices
supplied
by
a
fund’s
pricing
agent
based
on
broker
or
dealer
supplied
valuations
or
matrix
pricing,
a
method
of
valuing
securities
by
reference
to
the
value
of
other
securities
with
similar
characteristics
such
as
rating,
interest
rate
and
maturity.
Shares
of
non-exchange
traded
open-end
mutual
funds
are
valued
at
net
asset
value
(“NAV”).
Short-term
investments
that
mature
in
sixty
days
or
less
may
be
valued
at
amortized
cost.
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Trust's
Board
of
Trustees
(the
"Board")
has
designated
the
Adviser,
as
defined
in
Note
3,
as
the
Fund's
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
the
Fund.
The
Adviser
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Adviser's
fair
value
determinations.
The
Adviser
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Adviser
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Board
has
approved
the
Adviser’s
fair
valuation
procedures
as
a
part
of
the
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Adviser
provides
fair
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Adviser
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Beck
Mack
+
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
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
September
30,
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
Beck
Mack
+
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
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
September
30,
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
(the
“Distributor”),
a
wholly
owned
subsidiary
of
Foreside
Financial
Group,
LLC
(doing
business
as
ACA
Group),
acts
as
the
agent
of
the
Trust
in
connection
with
the
continuous
offering
of
shares
of
the
Fund.
The
Fund
does
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statement
of
Operations.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
the
Fund
pays
Apex
customary
fees
for
its
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
the
Fund,
as
well
as
certain
additional
compliance
support
functions.
Beck
Mack
+
Oliver
Partners
Fund
NOTES
TO
FINANCIAL
STATEMENTS
September
30,
2022
Trustees
and
Officers
–
Each
Independent
Trustee’s
annual
retainer
is
$45,000
($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
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
July
31,
2023.
During
the
period
ended
September
30
,
2022,
fees
waived
were
$
160
,
371
.
Note
5.
Security
Transactions
The
cost
of
purchases
and
proceeds
from
sales
of
investment
securities
(including
maturities),
other
than
short-term
investments,
during
the
period
ended
September
30,
2022
were
$2,897,935
and
$5,732,928
respectively.
Note
6.
Federal
Income
Tax
As
of
September
30,
2022,
the
cost
of
investments
for
federal
income
tax
purposes
is
substantially
the
same
as
for
financial
statement
purposes and
the
components
of
net
unrealized appreciation were
as
follows:
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
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.
Gross
Unrealized
Appreciation
$
14,258,004
Gross
Unrealized
Depreciation
(4,895,805)
Net
Unrealized
Appreciation
$
9,362,199
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
September
30,
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.
Beck
Mack
+
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
September
30,
2022
Liquidity
Risk
Management
Program
The
Fund
has
adopted
and
implemented
a
written
liquidity
risk
management
program,
as
required
by
Rule
22e-4
(the
“Liquidity
Rule”)
under
the
Investment
Company
Act
of
1940,
as
amended.
The
liquidity
risk
management
program
is
reasonably
designed
to
assess
and
manage
the
Fund’s
liquidity
risk,
taking
into
consideration,
among
other
factors,
the
Fund’s
investment
strategy
and
the
liquidity
of
the
portfolio
investments
during
normal
and
reasonably
foreseeable
stressed
conditions,
its
short
and
long-term
cash
flow
projections
and
its
cash
holdings
and
access
to
other
funding
sources.
The
Board
approved
the
designation
of
the
Trust’s
Valuation
Committee
as
the
administrator
of
the
liquidity
risk
management
program
(the
“Program
Administrator”).
The
Program
Administrator
is
responsible
for
the
administration
and
oversight
of
the
program
and
for
reporting
to
the
Board
on
at
least
an
annual
basis
regarding,
among
other
things,
the
program’s
operation,
adequacy,
and
effectiveness.
The
Program
Administrator
assessed
the
Fund’s
liquidity
risk
profile
based
on
information
gathered
for
the
period
July
1,
2021
through
June
30,
2022
in
order
to
prepare
a
written
report
to
the
Board
for
review
at
its
meeting
held
on
September
15,
2022.
The
Program
Administrator’s
written
report
stated
that:
(i)
the
Fund
is
able
to
meet
redemptions
in
normal
and
reasonably
foreseeable
stressed
conditions
and
without
significant
dilution
of
remaining
shareholders’
interests
in
the
Fund;
(ii)
the
Fund’s
strategy
is
appropriate
for
an
open-end
mutual
fund;
(iii)
the
liquidity
classification
determinations
regarding
the
Fund’s
portfolio
investments,
which
take
into
account
a
variety
of
factors
and
may
incorporate
analysis
from
one
or
more
third-party
data
vendors,
remained
appropriate;
(iv)
the
Fund
did
not
approach
the
internal
triggers
set
forth
in
the
liquidity
risk
management
program
or
the
regulatory
percentage
limitation
(15%)
on
holdings
in
illiquid
investments;
(v)
it
continues
to
be
appropriate
to
not
set
a
“highly
liquid
investment
minimum”
for
the
Fund
because
the
Fund
primarily
holds
“highly
liquid
investments”;
and
(vi)
the
liquidity
risk
management
program
remains
reasonably
designed
and
adequately
implemented
to
prevent
violations
of
the
Liquidity
Rule.
No
significant
liquidity
events
impacting
the
Fund
or
proposed
changes
to
the
Program
were
noted
in
the
report.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(800)
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.
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
Beck
Mack
+
Oliver
Partners
Fund
ADDITIONAL
INFORMATION
September
30,
2022
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
April
1,
2022
through
September
30,
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.
Beginning
Account
Value
April
1,
2022
Ending
Account
Value
September
30,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
774.90
$
4.45
1.00%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,020.05
$
5.06
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
(183)
divided
by
365
to
reflect
the
half-year
period.
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-SAR-0922
SEMI-ANNUAL
REPORT
//
September
30,
2022
(Unaudited)
Payson
Total
Return
Fund
Table
of
Contents
September
30,
2022
IMPORTANT
INFORMATION
An
investment
in
the
Fund
is
subject
to
risk,
including
the
possible
loss
of
principal.
Other
Fund
risks
include
equity
risk,
convertible
securities
risk,
debt
securities
risk,
technology
sector
risk,
exchange-traded
funds
risk,
interest
rate
risk,
credit
risk,
inflation
indexed
security
risk,
U.S.
government
securities
risk,
value
investment
risk,
mortgage-related
and
other
asset-backed
securities
risk,
and
foreign
investments
risk.
Foreign
investing
involves
certain
risks
and
increased
volatility
not
associated
with
investing
solely
in
the
U.S.,
including
currency
fluctuations,
economic
or
financial
instability,
lack
of
timely
or
reliable
financial
information
or
unfavorable
political
or
legal
developments.
Mortgage-related
and
other
asset-backed
securities
risks
include
extension
risk
and
prepayment
risk.
In
addition,
the
Fund
invests
in
midcap
companies,
which
pose
greater
risks
than
those
associated
with
larger,
more
established
companies.
There
is
no
assurance
that
the
Fund
will
achieve
its
investment
objective.
Schedule
of
Investments
1
Statement
of
Assets
and
Liabilities
3
Statement
of
Operations
4
Statements
of
Changes
in
Net
Assets
5
Financial
Highlights
6
Notes
to
Financial
Statements
7
Additional
Information
12
Payson
Total
Return
Fund
SCHEDULE
OF
INVESTMENTS
September
30,
2022
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's investments
as
of
September
30,
2022.
Shares
Security
Description
Value
Common
Stock
-
90.7%
Consumer
Discretionary
-
7.8%
20,300
Amazon.com,
Inc. (a)
$
2,293,900
77,295
DR
Horton,
Inc.
5,205,818
15,900
Polaris,
Inc.
1,520,835
31,160
The
Home
Depot,
Inc.
8,598,291
17,618,844
Consumer
Staples
-
11.1%
136,400
Bristol-Myers
Squibb
Co.
9,696,676
107,380
CVS
Health
Corp.
10,240,830
10,325
Thermo
Fisher
Scientific,
Inc.
5,236,737
25,174,243
Energy
-
4.1%
34,730
Chevron
Corp.
4,989,659
34,000
Devon
Energy
Corp.
2,044,420
10,000
Pioneer
Natural
Resources
Co.
2,165,300
9,199,379
Financials
-
14.6%
25,870
American
Express
Co.
3,490,122
18,455
Aon
PLC,
Class A
4,943,541
35,785
Berkshire
Hathaway,
Inc.,
Class B (a)
9,555,311
20,000
JPMorgan
Chase
&
Co.
2,090,000
20,510
Mastercard,
Inc.,
Class A
5,831,813
40,725
Visa,
Inc.,
Class A
7,234,796
33,145,583
Health
Care
-
15.5%
36,735
AbbVie,
Inc.
4,930,205
17,975
Amgen,
Inc.
4,051,565
8,625
Danaher
Corp.
2,227,751
48,900
Johnson
&
Johnson
7,988,304
115,000
Pfizer,
Inc.
5,032,400
21,730
UnitedHealth
Group,
Inc.
10,974,519
35,204,744
Industrials
-
5.1%
26,600
AMETEK,
Inc.
3,016,706
12,035
Honeywell
International,
Inc.
2,009,484
31,525
L3Harris
Technologies,
Inc.
6,551,841
11,578,031
Shares
Security
Description
Value
Information
Technology
-
32.5%
11,220
Accenture
PLC,
Class A
$
2,886,906
112,800
Alphabet,
Inc.,
Class A (a)
10,789,320
82,000
Apple,
Inc.
11,332,400
24,560
Broadcom,
Inc.
10,904,885
44,010
CDW
Corp.
6,869,081
336,885
HP,
Inc.
8,395,174
16,185
Lam
Research
Corp.
5,923,710
23,215
Microsoft
Corp.
5,406,773
22,625
NVIDIA
Corp.
2,746,449
11,600
NXP
Semiconductors
NV
1,711,116
42,760
Texas
Instruments,
Inc.
6,618,393
73,584,207
Total
Common
Stock
(Cost
$168,702,468)
205,505,031
Principal
Security
Description
Rate
Maturity
Value
U.S.
Government
&
Agency
Obligations
-
4.4%
U.S.
Treasury
Securities
-
4.4%
$
5,000,000
U.S.
Treasury
Bill (b)
2.52%
10/18/22
4,994,737
5,000,000
U.S.
Treasury
Bill (b)
3.07
12/15/22
4,971,517
9,966,254
Total
U.S.
Government
&
Agency
Obligations
(Cost
$9,962,369)
9,966,254
Investments,
at
value
-
95.1%
(Cost
$178,664,837)
$
215,471,285
Other
Assets
&
Liabilities,
Net
-
4.9%
11,087,909
Net
Assets
-
100.0%
$
226,559,194
PLC
Public
Limited
Company
(a)
Non-income
producing
security.
(b)
Zero
coupon
bond.
Interest
rate
presented
is
yield
to
maturity.
Payson
Total
Return
Fund
SCHEDULE
OF
INVESTMENTS
September
30,
2022
See
Notes
to
Financial
Statements.
The
inputs
or
methodology
used
for
valuing
securities
are
not
necessarily
an
indication
of
the
risks
associated
with
investing
in
those
securities.
For
more
information
on
valuation
inputs,
and
their
aggregation
into
the
levels
used
in
the
table
below,
please
refer
to
the
Security
Valuation
section
in
Note
2
of
the
accompanying
Notes
to
Financial
Statements.
The
Level
1
value
displayed
in
this
table
is
Common
Stock.
The
Level
2
value
displayed
in
this
table
are
U.S.
Treasury
Securities.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
205,505,031
Level
2
-
Other
Significant
Observable
Inputs
9,966,254
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
215,471,285
PORTFOLIO
HOLDINGS
%
of
Total
Investments
Consumer
Discretionary
8.2%
Consumer
Staples
11.7%
Energy
4.3%
Financials
15.4%
Health
Care
16.3%
Industrials
5.4%
Information
Technology
34.1%
U.S.
Government
&
Agency
Obligations
4.6%
100.0%
Payson
Total
Return
Fund
Statement
of
Assets
and
Liabilities
September
30,
2022
See
Notes
to
Financial
Statements.
ASSETS
Investments,
at
value
(Cost
$178,664,837)
$
215,471,285
Cash
12,515,708
Receivables:
Fund
shares
sold
14,455
Dividends
and
interest
159,528
Prepaid
expenses
20,499
Total
Assets
228,181,475
LIABILITIES
Payables:
Investment
securities
purchased
1,169,037
Fund
shares
redeemed
95,904
Distributions
payable
183,921
Accrued
Liabilities:
Investment
adviser
fees
118,815
Trustees’
fees
and
expenses
21
Fund
services
fees
22,257
Other
expenses
32,326
Total
Liabilities
1,622,281
NET
ASSETS
$
226,559,194
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
187,737,017
Distributable
earnings
38,822,177
NET
ASSETS
$
226,559,194
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
10,134,316
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
$
22.36
Payson
Total
Return
Fund
Statement
of
Operations
FOR
THE
SIX
MONTHS
ENDED
SEPTMEBER
30,
2022
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$5,016)
$
2,092,626
Interest
income
67,546
Total
Investment
Income
2,160,172
EXPENSES
Investment
adviser
fees
707,327
Fund
services
fees
161,538
Custodian
fees
11,776
Registration
fees
13,014
Professional
fees
22,966
Trustees'
fees
and
expenses
4,822
Other
expenses
32,910
Total
Expenses
954,353
NET
INVESTMENT
INCOME
1,205,819
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
on
investments
603,639
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
(47,533,836)
NET
REALIZED
AND
UNREALIZED
LOSS
(46,930,197)
DECREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(45,724,378)
Payson
Total
Return
Fund
Statements
of
Changes
in
Net
Assets
See
Notes
to
Financial
Statements.
For
the
Six
Months
Ended
September
30,
2022
For
the
Year
Ended
March
31,
2022
OPERATIONS
Net
investment
income
$
1,205,819
$
1,146,865
Net
realized
gain
603,639
8,833,278
Net
change
in
unrealized
appreciation
(depreciation)
(47,533,836)
19,050,642
Increase
(Decrease)
in
Net
Assets
Resulting
from
Operations
(45,724,378)
29,030,785
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(1,205,839)
(27,030,027)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
59,503,061
106,438,422
Reinvestment
of
distributions
791,634
25,286,406
Redemption
of
shares
(9,149,505)
(82,204,939)
Increase
in
Net
Assets
from
Capital
Share
Transactions
51,145,190
49,519,889
Increase
in
Net
Assets
4,214,973
51,520,647
NET
ASSETS
Beginning
of
Period
222,344,221
170,823,574
End
of
Period
$
226,559,194
$
222,344,221
SHARE
TRANSACTIONS
Sale
of
shares
2,383,231
3,737,849
Reinvestment
of
distributions
34,358
907,730
Redemption
of
shares
(369,691)
(2,839,986)
Increase
in
Shares
2,047,898
1,805,593
Payson
Total
Return
Fund
Financial
Highlights
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period
.
For
the
Six
Months
Ended
September
30,
2022
For
the
Years
Ended
March
31,
2022
2021
2020
2019
2018
NET
ASSET
VALUE,
Beginning
of
Period
$
27.50
$
27.20
$
18.17
$
19.37
$
17.76
$
16.14
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.13
0.14
0.17
0.15
0.13
0.14
Net
realized
and
unrealized
gain
(loss)
(5.15)
3.92
10.75
(1.20)
1.61
2.33
Total
from
Investment
Operations
(5.02)
4.06
10.92
(1.05)
1.74
2.47
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.12)
(0.14)
(0.17)
(0.15)
(0.13)
(0.12)
Net
realized
gain
–
(3.62)
(1.72)
–
–
(0.73)
Total
Distributions
to
Shareholders
(0.12)
(3.76)
(1.89)
(0.15)
(0.13)
(0.85)
NET
ASSET
VALUE,
End
of
Period
$
22.36
$
27.50
$
27.20
$
18.17
$
19.37
$
17.76
TOTAL
RETURN
(18.30)%(b)
14.82%
61.37%
(5.48)%
9.83%
15.39%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Period
(000s
omitted)
$
226,559
$
222,344
$
170,824
$
104,475
$
108,910
$
95,489
Ratios
to
Average
Net
Assets:
Net
investment
income
1.02%(c)
0.50%
0.72%
0.74%
0.71%
0.82%
Net
expenses
0.81%(c)
0.82%
0.85%
0.86%
0.89%
0.94%
PORTFOLIO
TURNOVER
RATE
25%(b)
87%
64%
25%
27%
38%
(a)
Calculated
based
on
average
shares
outstanding
during
each
period.
(b)
Not
annualized.
(c)
Annualized.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
September
30,
2022
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
period.
Actual
amounts
could
differ
from
those
estimates.
The
following
summarizes
the
significant
accounting
policies
of
the
Fund:
Security
Valuation
–
Securities
are
valued
at
market
prices
using
the
last
quoted
trade
or
official
closing
price
from
the
principal
exchange
where
the
security
is
traded,
as
provided
by
independent
pricing
services
on
each
Fund
business
day.
In
the
absence
of
a
last
trade,
securities
are
valued
at
the
mean
of
the
last
bid
and
ask
price
provided
by
the
pricing
service.
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Trust's
Board
of
Trustees
(the
"Board")
has
designated
the
Adviser,
as
defined
in
Note
4,
as
the
Fund's
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
the
Fund.
The
Adviser
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Adviser's
fair
value
determinations.
The
Adviser
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Adviser
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Board
has
approved
the
Adviser’s
fair
valuation
procedures
as
a
part
of
the
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Adviser
provides
fair
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
Payson
Total
Return
Fund
Notes
to
Financial
Statements
September
30,
2022
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Adviser
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
Fair
valuation
is
based
on
subjective
factors
and,
as
a
result,
the
fair
value
price
of
an
investment
may
differ
from
the
security’s
market
price
and
may
not
be
the
price
at
which
the
asset
may
be
sold.
Fair
valuation
could
result
in
a
different
net
asset
value
(“NAV”)
than
a
NAV
determined
by
using
market
quotes.
GAAP
has
a
three-tier
fair
value
hierarchy.
The
basis
of
the
tiers
is
dependent
upon
the
various
“inputs”
used
to
determine
the
value
of
the
Fund’s
investments.
These
inputs
are
summarized
in
the
three
broad
levels
listed
below:
Level
1
-
Quoted
prices
in
active
markets
for
identical
assets
and
liabilities.
Level
2
-
Prices
determined
using
significant
other
observable
inputs
(including
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds,
credit
risk,
etc.).
Short-term
securities
with
maturities
of
sixty
days
or
less
are
valued
at
amortized
cost,
which
approximates
market
value,
and
are
categorized
as
Level
2
in
the
hierarchy.
Municipal
securities,
long-term
U.S.
government
obligations
and
corporate
debt
securities
are
valued
in
accordance
with
the
evaluated
price
supplied
by
a
pricing
service
and
generally
categorized
as
Level
2
in
the
hierarchy.
Other
securities
that
are
categorized
as
Level
2
in
the
hierarchy
include,
but
are
not
limited
to,
warrants
that
do
not
trade
on
an
exchange,
securities
valued
at
the
mean
between
the
last
reported
bid
and
ask
quotation
and
international
equity
securities
valued
by
an
independent
third
party
with
adjustments
for
changes
in
value
between
the
time
of
the
securities’
respective
local
market
closes
and
the
close
of
the
U.S.
market.
Level
3
-
Significant
unobservable
inputs
(including
the
Fund’s
own
assumptions
in
determining
the
fair
value
of
investments).
The
aggregate
value
by
input
level,
as
of
September
30,
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.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
September
30,
2022
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
quarterly.
Distributions
to
shareholders
of
net
capital
gains
and
net
foreign
currency
gains,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
are
recorded
on
the
ex-dividend
date.
Distributions
are
based
on
amounts
calculated
in
accordance
with
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
These
differences
are
due
primarily
to
differing
treatments
of
income
and
gain
on
various
investment
securities
held
by
the
Fund,
timing
differences
and
differing
characterizations
of
distributions
made
by
the
Fund.
Federal
Taxes
–
The
Fund
intends
to
continue
to
qualify
each
year
as
a
regulated
investment
company
under
Subchapter
M
of
Chapter
1,
Subtitle
A,
of
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”),
and
to
distribute
all
of
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
net
investment
income
and
capital
gains,
if
any,
the
Fund
will
not
be
subject
to
a
federal
excise
tax.
Therefore,
no
federal
income
or
excise
tax
provision
is
required.
The
Fund
files
a
U.S.
federal
income
and
excise
tax
return
as
required.
The
Fund’s
federal
income
tax
returns
are
subject
to
examination
by
the
Internal
Revenue
Service
for
a
period
of
three
fiscal
years
after
they
are
filed.
As
of
September
30,
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
September
30,
2022,
the
Fund
had
$12,265,708
at
U.S.
Bank,
N.A.
that
exceeded
the
FDIC
insurance
limit.
Note
4.
Fees
and
Expenses
Investment
Adviser
–
H.M.
Payson
&
Co.
(the
“Adviser”)
is
the
investment
adviser
to
the
Fund.
Pursuant
to
an
investment
advisory
agreement,
the
Adviser
receives
an
advisory
fee,
payable
monthly,
from
the
Fund
at
an
annual
rate
of
0.60%
of
the
Fund’s
average
daily
net
assets.
Payson
Total
Return
Fund
Notes
to
Financial
Statements
September
30,
2022
Distribution
–
Foreside
Fund
Services,
LLC
“Distributor”),
a
wholly
owned
subsidiary
of
Foreside
Financial
Group,
LLC
(doing
business
as
ACA
Group),
acts
as
the
agent
of
the
Trust
in
connection
with
the
continuous
offering
of
shares
of
the
Fund.
The
Fund
does
not
have
a
distribution
(12b-1)
plan;
accordingly,
the
Distributor
does
not
receive
compensation
from
the
Fund
for
its
distribution
services.
The
Adviser
compensates
the
Distributor
directly
for
its
services.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
The
fees
related
to
these
services
are
included
in
Fund
services
fees
within
the
Statement
of
Operations.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
the
Fund
pays
Apex
customary
fees
for
its
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
the
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
Each
Independent
Trustee’s
annual
retainer
is
$45,000
($55,000
for
the
Chairman).
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
period
ended
September
30,
2022
were
$87,941,003
and
$57,011,564,
respectively.
Note
6.
Federal
Income
Tax
As
of
September
30,
2022,
the
cost
of
investments
for
federal
income
tax
purposes
is
substantially
the
same
as
for
financial
statement
purposes and
the
components
of
net
unrealized appreciation were
as
follows:
Gross
Unrealized
Appreciation
$
40,924,592
Gross
Unrealized
Depreciation
(4,118,144)
Net
Unrealized
Appreciation
$
36,806,448
Payson
Total
Return
Fund
Notes
to
Financial
Statements
September
30,
2022
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
prior
year
post-October
loss
was
$
1,783,634
for
the
Fund
(realized
during
the
period
November
1,
2021
through
March
31,
2022).
This
loss
was
recognized
for
tax
purposes
the
first
business
day
of
the
Fund’s
current
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.
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
Payson
Total
Return
Fund
Additional
Information
September
30,
2022
Investment
Advisory
Agreement
Approval
At
the
June
9,
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
the
Adviser;
(2)
the
costs
of
the
services
provided
and
profitability
to
the
Adviser
of
its
relationship
with
the
Fund;
(3)
the
advisory
fee
and
total
expense
ratio
of
the
Fund
as
compared
to
those
of
a
relevant
peer
group
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
the
Fund
grows
and
whether
the
advisory
fee
enables
the
Fund's
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Fund.
In
addition,
the
Board
recognized
that
the
evaluation
process
with
respect
to
the
Adviser
was
an
ongoing
one
and,
in
this
regard,
the
Board
considered
information
provided
by
the
Adviser
at
regularly
scheduled
meetings
during
the
past
year.
Nature,
Extent
and
Quality
of
Services
Based
on
written
materials
received,
a
presentation
from
senior
representatives
of
the
Adviser
and
a
discussion
with
the
Adviser
about
the
Adviser’s
personnel,
operations
and
financial
condition,
the
Board
considered
the
quality
of
services
provided
by
the
Adviser
under
the
Advisory
Agreement.
In
this
regard,
the
Board
considered
information
regarding
the
experience,
qualifications
and
professional
background
of
the
portfolio
managers
and
other
personnel
at
the
Adviser
with
principal
responsibility
for
the
Fund,
as
well
as
the
investment
philosophy
and
decision-making
process
of
the
Adviser
and
the
capability
and
integrity
of
the
Adviser’s
senior
management
and
staff.
The
Board
considered
also
the
adequacy
of
the
Adviser’s
resources.
The
Board
noted
the
Adviser’s
representations
that
the
firm
is
in
stable
financial
condition
and
has
the
operational
capability,
the
staffing
and
experience,
and
the
financial
strength
necessary
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.
Payson
Total
Return
Fund
Additional
Information
September
30,
2022
Performance
In
connection
with
a
presentation
by
the
Adviser
regarding
its
approach
to
managing
the
Fund,
the
Board
reviewed
the
performance
of
the
Fund
as
compared
to
its
primary
benchmark
index.
The
Board
observed
that
the
Fund
underperformed
its
primary
benchmark
index,
the
S&P
500
Index,
for
the
one-
and
10-year
periods
ended
March
31,
2022
and
for
the
period
since
the
Payson
Fund’s
inception
on
November
25,
1991,
and
outperformed
the
benchmark
for
the
three-
and
five-year
periods
ended
March
31,
2022.
The
Board
also
considered
the
Fund’s
performance
relative
to
an
independent
peer
group
of
funds
identified
by
Strategic
Insight,
Inc.
(“Strategic
Insight”)
as
having
characteristics
similar
to
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-,
three-,
and
five-year
periods
ended
March
31,
2022,
and
underperformed
the
average
of
the
Strategic
Insight
peers
for
the
10-year
period
ended
March
31,
2022.
The
Board
noted
the
Adviser’s
representation
that
the
Fund’s
recent
relative
outperformance
versus
peers
could
be
attributed,
at
least
in
part,
to
the
Adviser’s
stock
selection
process.
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
the
actual
advisory
fee
rate
and
actual
total
expenses
of
the
Fund
as
compared
to
its
Strategic
Insight
peer
group.
The
Board
observed
that
the
Fund’s
actual
advisory
fee
rate
and
actual
total
expense
ratio
were
each
lower
than
the
median
of
its
Strategic
Insight
peers.
Based
on
the
foregoing
and
other
applicable
considerations,
the
Board
concluded
that
the
advisory
fee
rate
charged
to
the
Fund
was
reasonable.
Cost
of
Services
and
Profitability
The
Board
evaluated
information
provided
by
the
Adviser
regarding
the
costs
of
services
and
its
profitability
with
respect
to
the
Fund.
In
this
regard,
the
Board
considered
the
Adviser’s
resources
devoted
to
the
Fund,
as
well
as
the
information
provided
by
the
Adviser
regarding
the
costs
and
profitability
of
its
Fund
activities.
The
Board
noted
the
Adviser’s
representation
that
it
does
not
assess
the
profitability
of
its
relationship
with
the
Fund
separate
and
apart
from
that
of
the
adviser
as
a
whole,
though
administrative
and
compliance
costs
attributable
to
the
Fund
were
believed
to
have
increased
in
recent
years
relative
to
the
Adviser’s
other
advisory
clients.
Based
on
these
and
other
applicable
considerations,
the
Board
concluded
that
the
Adviser’s
profitability
attributable
to
management
of
the
Fund
was
reasonable.
Economies
of
Scale
The
Board
evaluated
whether
the
Fund
would
benefit
from
any
economies
of
scale.
In
this
respect,
the
Board
considered
the
Fund’s
fee
structure,
asset
size,
and
net
expense
ratio.
The
Board
also
considered
the
Payson
Total
Return
Fund
Additional
Information
September
30,
2022
Adviser’s
representation
that
the
Fund
could
potentially
benefit
from
economies
of
scale
if
its
assets
were
to
increase
but
that,
in
light
of
the
Fund’s
current
asset
levels,
the
Adviser
was
not
proposing
breakpoints
in
the
advisory
fee
at
this
time.
Based
on
the
foregoing
information
and
other
applicable
factors,
and
in
light
of
the
relatively
stable
asset
levels
in
the
Fund,
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,
aside
from
its
contractual
advisory
fees,
it
does
not
benefit
in
a
material
way
from
its
relationship
with
the
Fund.
Based
on
the
foregoing
representation,
the
Board
concluded
that
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Fund
were
not
a
material
factor
to
consider
in
approving
the
Advisory
Agreement.
Conclusion
The
Board
did
not
identify
any
single
factor
as
being
of
paramount
importance,
and
different
Trustees
may
have
given
different
weight
to
different
factors.
The
Board
reviewed
a
memorandum
from
Fund
counsel
discussing
the
legal
standards
applicable
to
its
consideration
of
the
Advisory
Agreement.
Based
on
its
review,
including
consideration
of
each
of
the
factors
referenced
above,
and
its
consideration
of
information
received
throughout
the
year
from
the
Adviser,
the
Board
determined,
in
the
exercise
of
its
reasonable
business
judgment,
that
the
advisory
arrangement,
as
outlined
in
the
Advisory
Agreement,
was
fair
and
reasonable
in
light
of
the
services
performed
or
to
be
performed,
expenses
incurred
or
to
be
incurred
and
such
other
matters
as
the
Board
considered
relevant.
Liquidity
Risk
Management
Program
The
Fund
has
adopted
and
implemented
a
written
liquidity
risk
management
program,
as
required
by
Rule
22e-4
(the
“Liquidity
Rule”)
under
the
Investment
Company
Act
of
1940,
as
amended.
The
liquidity
risk
management
program
is
reasonably
designed
to
assess
and
manage
the
Fund’s
liquidity
risk,
taking
into
consideration,
among
other
factors,
the
Fund’s
investment
strategy
and
the
liquidity
of
the
portfolio
investments
during
normal
and
reasonably
foreseeable
stressed
conditions,
its
short
and
long-term
cash
flow
projections
and
its
cash
holdings
and
access
to
other
funding
sources.
The
Board
approved
the
designation
of
the
Trust’s
Valuation
Committee
as
the
administrator
of
the
liquidity
risk
management
program
(the
“Program
Administrator”).
The
Program
Administrator
is
responsible
for
the
administration
and
oversight
of
the
program
and
for
reporting
to
the
Board
on
at
least
an
annual
basis
regarding,
among
other
things,
the
program’s
operation,
adequacy,
and
effectiveness.
The
Program
Administrator
assessed
the
Fund’s
liquidity
risk
profile
based
on
information
gathered
for
the
period
July
1,
2021
through
June
30,
2022
in
order
to
prepare
a
written
report
to
the
Board
for
review
at
its
meeting
held
on
September
15,
2022.
Payson
Total
Return
Fund
Additional
Information
September
30,
2022
The
Program
Administrator’s
written
report
stated
that:
(i)
the
Fund
is
able
to
meet
redemptions
in
normal
and
reasonably
foreseeable
stressed
conditions
and
without
significant
dilution
of
remaining
shareholders’
interests
in
the
Fund;
(ii)
the
Fund’s
strategy
is
appropriate
for
an
open-end
mutual
fund;
(iii)
the
liquidity
classification
determinations
regarding
the
Fund’s
portfolio
investments,
which
take
into
account
a
variety
of
factors
and
may
incorporate
analysis
from
one
or
more
third-party
data
vendors,
remained
appropriate;
(iv)
the
Fund
did
not
approach
the
internal
triggers
set
forth
in
the
liquidity
risk
management
program
or
the
regulatory
percentage
limitation
(15%)
on
holdings
in
illiquid
investments;
(v)
it
continues
to
be
appropriate
to
not
set
a
“highly
liquid
investment
minimum”
for
the
Fund
because
the
Fund
primarily
holds
“highly
liquid
investments”;
and
(vi)
the
liquidity
risk
management
program
remains
reasonably
designed
and
adequately
implemented
to
prevent
violations
of
the
Liquidity
Rule.
No
significant
liquidity
events
impacting
the
Fund
or
proposed
changes
to
the
Program
were
noted
in
the
report.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(800)
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
April
1,
2022
through
September
30,
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
Payson
Total
Return
Fund
Additional
Information
September
30,
2022
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.
Beginning
Account
Value
April
1,
2022
Ending
Account
Value
September
30,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Actual
$
1,000.00
$
816.96
$
3.69
0.81%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,021.01
$
4.10
0.81%
*
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
(183)
divided
by
365
to
reflect
the
half-year
period.
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.
Merk
Hard
Currency
Fund
®
Investor
Shares
(MERKX)
Institutional
Shares
(MHCIX)
Semi
Annual
Report
(Unaudited)
September
30,
2022
See
Notes
to
Financial
Statements.
Principal
Security
Description
Currency
Rate
Maturity
Value
in
USD
Foreign
Bonds
-
66.7%
(a)
Non-U.S.
Government
-
Australia
-
12.6%
$
7,600,000
Australia
Government
Bond
AUD
5.500
%
04/21/23
$
4,922,072
Non-U.S.
Government
-
Austria
-
5.0%
2,000,000
Republic
of
Austria
Government
Bond
(b)(c)
EUR
(0.470)
04/20/23
1,947,274
Non-U.S.
Government
-
New
Zealand
-
6.0%
4,200,000
New
Zealand
Government
Bond
NZD
5.500
04/15/23
2,368,517
Non-U.S.
Government
Agency
-
Germany
-
4.6%
10,000,000
Kreditanstalt
fuer
Wiederaufbau
NOK
1.670
05/24/23
908,668
10,000,000
Kreditanstalt
fuer
Wiederaufbau
,
EMTN
NOK
1.625
04/03/24
894,678
1,803,346
Non-U.S.
Government
Agency
-
Sweden
-
11.2%
49,000,000
Kommuninvest
I
Sverige
AB,
MTN
SEK
0.750
02/22/23
4,393,976
Regional
Agencies
-
Australia
-
4.4%
1,700,000
Treasury
Corp.
of
Victoria
AUD
6.000
10/17/22
1,088,627
1,000,000
Treasury
Corp.
of
Victoria
AUD
1.000
11/20/23
621,199
1,709,826
Regional
Authority
-
Australia
-
2.8%
1,700,000
New
South
Wales
Treasury
Corp.
AUD
4.000
04/20/23
1,092,031
Regional
Authority
-
Canada
-
15.4%
2,400,000
Province
of
Alberta
Canada
CAD
2.650
09/01/23
1,715,348
2,500,000
Province
of
British
Columbia
Canada
CAD
2.700
12/18/22
1,806,675
1,000,000
Province
of
Manitoba
Canada
CAD
2.550
06/02/23
717,067
2,500,000
Province
of
Saskatchewan
Canada
CAD
3.200
06/03/24
1,786,513
6,025,603
Supranational
Bank
-
Luxembourg
-
4.7%
1,900,000
European
Financial
Stability
Facility,
EMTN
EUR
1.875
05/23/23
1,864,143
Total
Foreign
Bonds
(Cost
$29,207,059)
26,126,788
Foreign
Treasury
Securities
-
15.2%
(a)
Non-U.S.
Government
-
Canada
-
4.6%
2,500,000
Canadian
Treasury
Bill
(c)
CAD
3.322
11/24/22
1,800,720
Non-U.S.
Government
-
Norway
-
10.6%
46,000,000
Norway
Treasury
Bill
(b)
(c)
NOK
3.074
06/21/23
4,139,21
5
Total
Foreign
Treasury
Securities
(Cost
$6,278,946)
5,939,93
5
U.S.
Government
&
Agency
Obligations
-
4.3%
(a)
U.S.
Treasury
Securities
-
4.3%
1,700,000
U.S.
Treasury
Bill
(d)
(Cost
$1,697,904)
USD
2.350
10/20/22
1,697,954
Shares
Security
Description
Currency
Rate
Value
in
USD
Money
Market
Fund
-
12.3%
4,827,495
Morgan
Stanley
Institutional
Liquidity
Funds
Treasury
Securities
Portfolio,
Institutional
Class
(e)
(Cost
$4,827,495)
USD
2.562
4,827,495
Investments,
at
value
-
98.5%
(Cost
$42,011,404)
$
38,592,17
2
Foreign
Currencies
– 1.4%
(Cost
$576,182)
558,422
Net
Unrealized
Gain/Loss
on
Forward
Currency
Contracts
–
(0.3)%
(101,133)
Other
Assets
&
Liabilities,
Net
– 0.4%
139,0
20
NET
ASSETS
– 100.0%
$
39,188,481
EMTN
European
Medium
Term
Note
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
$6,086,490
or
15.5%
of
net
assets.
(c)
Rate
presented
is
yield
to
maturity.
(d)
Zero
coupon
bond.
Interest
rate
presented
is
yield
to
maturity.
(e)
Dividend
yield
changes
daily
to
reflect
current
market
conditions.
Rate
was
the
quoted
yield
as
of
September
30,
2022.
See
Notes
to
Financial
Statements.
Affiliated
investments
are
investments
that
are
managed
by
the
Adviser.
At
the
period
end,
the
Merk
Hard
Currency
Fund
did
not
have
any
affiliated
investments.
Transactions
during
the
period
with
affiliates
were
as
follows:
As
of
September
30,
2022,
the
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
September
30,
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.
Exchange
Traded
Product
VanEck
Merk
Gold
Trust
ETF
**
Balance
3/31/2022
Gross
Additions
Gross
Reductions
Change
in
Unrealized
Depreciation
Balance
9/30/2022
Realized
Gain/(Loss)
Investment
Income
Shares/
Principal
21,300
–
(21,300)
–
–
Cost
$
227,271
$
–
$
(227,271)
$
–
$
–
$
116,717
$
–
Value
401,079
–
(343,988)
(173,808)
–
Counterparty
Contracts
to
Purchase/(Sell)
Settlement
Date
Settlement
Value
Net
Unrealized
Appreciation
(Depreciation)
BNY
Mellon
Capital
Markets,
LLC
900,000
British
Pound
Sterling
10/05/22
$
1,021,479
$
(16,472)
3,550,000
Euro
10/05/22
3,520,457
(40,042)
RBC
Capital
Markets,
LLC
(900,000)
British
Pound
Sterling
10/05/22
(960,836)
(44,172)
(1,300,000)
Euro
10/05/22
(1,267,248)
(7,270)
4,200,000
Euro
10/05/22
4,110,851
6,823
$
(101,133)
Level
1
Level
2
Level
3
Total
Assets
Investments
at
Value
Foreign
Bonds
$
–
$
26,126,788
$
–
$
26,126,788
Foreign
Treasury
Securities
–
5,939,93
5
–
5,939,93
5
U.S.
Government
&
Agency
Obligations
–
1,697,954
–
1,697,954
Money
Market
Fund
–
4,827,495
–
4,827,495
Investments,
at
value
$
–
$
38,592,17
2
$
–
$
38,592,17
2
Other
Financial
Instruments
*
Forward
Currency
Contracts
–
6,823
–
6,823
Total
Assets
$
–
$
38,598,996
$
–
$
38,598,996
Liabilities
Other
Financial
Instruments
*
Forward
Currency
Contracts
$
–
$
(107,956)
$
–
$
(107,956)
Total
Liabilities
$
–
$
(107,956)
$
–
$
(107,956)
*
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
period
end.
PORTFOLIO
HOLDINGS
%
of
Total
Net
Assets
Foreign
Bonds
66.7%
Foreign
Treasury
Securities
15.2%
U.S.
Government
&
Agency
Obligations
4.3%
Money
Market
Fund
12.3%
Foreign
Currencies
1.4%
Net
Unrealized
Gain/Loss
on
Forward
Currency
Contracts
(0.3)%
Other
Assets
&
Liabilities,
Net
0.4%
100.0%
See
Notes
to
Financial
Statements.
MERK
HARD
CURRENCY
FUND
ASSETS
Total
Investments,
at
value
(Cost
$42,011,404,
respectively)
$
38,592,172
Foreign
currency
(Cost
$576,182,
respectively)
558,422
Receivables:
Fund
shares
sold
62
Dividends
and
interest
315,821
Unrealized
gain
on
forward
currency
contracts
6,823
Total
Assets
39,473,300
LIABILITIES
Unrealized
loss
on
forward
currency
contracts
107,956
Payables:
Fund
shares
redeemed
153,406
Accrued
Liabilities:
Investment
adviser
fees
14,491
Distribution
fees
7,261
Other
expenses
1,705
Total
Liabilities
284,819
NET
ASSETS
$
39,188,481
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
56,291,767
Distributable
earnings
(17,103,286)
NET
ASSETS
$
39,188,481
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
Investor
Shares
4,388,174
Institutional
Shares
760,307
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
Investor
Shares
(based
on
net
assets
of
$33,297,877,
respectively)
$
7.59
Institutional
Shares
(based
on
net
assets
of
$5,890,604,
respectively)
$
7.75
STATEMENT
OF
ASSETS
AND
LIABILITIES
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
$
6,517
Interest
income
(Net
of
foreign
withholding
taxes
of
$8,448,
respectively)
437,765
Net
amortization
expense
(266,539)
Total
Investment
Income
177,743
EXPENSES
Investment
adviser
fees
229,633
Non
12b-1
shareholder
servicing
fees:
Investor
Shares
9,566
Institutional
Shares
1,916
Distribution
fees:
Investor
Shares
47,826
Interest
expense
636
Total
Expenses
289,577
Fees
waived
(775)
Net
Expenses
288,802
NET
INVESTMENT
LOSS
(111,059)
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
(loss)
on:
Investments
in
unaffiliated
issuers
(3,630,645)
Investments
in
affiliated
issuers
116,717
Foreign
currency
transactions
(
118,992
)
Forward
currency
contracts
(4
98,294
)
Net
realized
loss
(4,131,214)
Net
change
in
unrealized
depreciation
on:
Investments
in
unaffiliated
issuers
(2,830,175)
Investments
in
affiliated
issuers
(173,808)
Foward
currency
contracts
(32,509)
Foreign
currency
translations
(75,159)
Net
change
in
unrealized
appreciation
(depreciation)
(3,111,651)
NET
REALIZED
AND
UNREALIZED
LOSS
(7,242,865)
DECREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
(7,353,924)
SIX
MONTHS
ENDED
SEPTEMBER
30,
2022
See
Notes
to
Financial
Statements.
MERK
HARD
CURRENCY
FUND
For
the
Six
Months
Ended
September
30,
2022
For
the
Year
Ended
March
31,
2022
OPERATIONS
Net
investment
loss
$
(111,059)
$
(686,094)
Net
realized
loss
(4,131,214)
(66,073)
Net
change
in
unrealized
appreciation
(depreciation)
(3,111,651)
(1,628,452)
Decrease
in
Net
Assets
Resulting
from
Operations
(7,353,924)
(2,380,619)
DISTRIBUTIONS
TO
SHAREHOLDERS
Investor
Shares
–
(1,060,948)
Institutional
Shares
–
(238,664)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares:
Investor
Shares
1,669,823
4,678,703
Institutional
Shares
638,313
2,262,622
Reinvestment
of
distributions:
Investor
Shares
–
1,028,190
Institutional
Shares
–
231,220
Redemption
of
shares:
Investor
Shares
(4,216,969)
(9,747,347)
Institutional
Shares
(2,616,030)
(2,197,154)
Decrease
in
Net
Assets
from
Capital
Share
Transactions
(4,524,863)
(3,743,766)
Decrease
in
Net
Assets
(11,878,787)
(7,423,997)
NET
ASSETS
Beginning
of
Period
51,067,268
58,491,265
End
of
Period
$
39,188,481
$
51,067,268
SHARE
TRANSACTIONS
Sale
of
shares:
Investor
Shares
198,682
506,949
Institutional
Shares
74,652
234,535
Reinvestment
of
distributions:
Investor
Shares
–
114,882
Institutional
Shares
–
25,353
Redemption
of
shares:
Investor
Shares
(514,858)
(1,054,193)
Institutional
Shares
(315,123)
(231,797)
Decrease
in
Shares
(556,647)
(404,271)
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period
.
For
the
Six
Months
Ended
September
30,
2022
For
the
Years
Ended
March
31,
2022
2021
2020
2019
2018
INVESTOR
SHARES
NET
ASSET
VALUE,
Beginning
of
Period
$
8.92
$
9.55
$
8.52
$
9.10
$
10.06
$
9.27
INVESTMENT
OPERATIONS
Net
investment
income
(loss)
(a)
(0.02)
(0.12)
(0.10)
(0.05)
(0.08)
(0.12)
Net
realized
and
unrealized
gain
(loss)
(1.31)
(0.29)
1.13
(0.53)
(0.80)
1.00
Total
from
Investment
Operations
(1.33)
(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
Period
$
7.59
$
8.92
$
9.55
$
8.52
$
9.10
$
10.06
TOTAL
RETURN
(14.91)%(b)
(4.27)%
12.09%
(6.37)%
(8.73)%
9.54%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Period
(000's
omitted)
$33,298
$41,964
$49,033
$49,712
$64,575
$85,874
Ratios
to
Average
Net
Assets:
Net
investment
income
(loss)
(0.52)%(c)
(1.28)%
(1.08)%
(0.57)%
(0.88)%
(1.21)%
Net
expenses
1.30%(c)
1.31%
1.31%
1.34%
1.35%
1.27%
Interest
expenses
–%(c)
0.02%
0.03%
0.06%
0.08%
–%
Net
expenses
without
interest
expenses
1.30%(c)
1.29%
1.28%
1.28%
1.27%
1.27%
Gross
expenses
1.30%(c)
1.32%(d)
1.33%(d)
1.36%(d)
1.38%(d)
1.30%(d)
PORTFOLIO
TURNOVER
RATE
(e)
30%(b)
68%
107%
53%
65%
35%
INSTITUTIONAL
SHARES
NET
ASSET
VALUE,
Beginning
of
Period
$
9.10
$
9.72
$
8.65
$
9.23
$
10.18
$
9.38
INVESTMENT
OPERATIONS
Net
investment
income
(loss)
(a)
(0.01)
(0.10)
(0.08)
(0.03)
(0.06)
(0.10)
Net
realized
and
unrealized
gain
(loss)
(1.34)
(0.28)
1.14
(0.54)
(0.80)
1.02
Total
from
Investment
Operations
(1.35)
(0.38)
1.06
(0.57)
(0.86)
0.92
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
–
(0.24)
–
–
(0.09)
(0.12)
NET
ASSET
VALUE,
End
of
Period
$
7.75
$
9.10
$
9.72
$
8.66
$
9.23
$
10.18
TOTAL
RETURN
(14.84)%(b)
(3.90)%
12.24%
(6.18)%
(8.47)%
9.82%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Period
(000's
omitted)
$5,891
$9,103
$9,458
$13,551
$16,462
$22,624
Ratios
to
Average
Net
Assets:
Net
investment
income
(loss)
(0.31)%(c)
(1.03)%
2.26%
(0.31)%
(0.64)%
(0.95)%
Net
expenses
1.05%(c)
1.06%
1.06%
1.09%
1.10%
1.02%
Interest
expenses
–%(c)
0.02%
0.03%
0.06%
0.08%
–%
Net
expenses
without
interest
expenses
1.05%(c)
1.04%
1.03%
1.03%
1.02%
1.02%
Gross
expenses
1.05%(c)
1.07%(d)
1.08%(d)
1.11%(d)
1.13%(d)
1.05%(d)
PORTFOLIO
TURNOVER
RATE
(e)
30%(b)
68%
107%
53%
65%
35%
(a)
Calculated
based
on
average
shares
outstanding
during
each
period.
(b)
Not
annualized.
(c)
Annualized.
(d)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
(e)
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.
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
period.
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.
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Trust's
Board
of
Trustees
(the
"Board")
has
designated
the
Adviser,
as
defined
in
Note
3,
as
the
Fund's
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
the
Fund.
The
Adviser
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Adviser's
fair
value
determinations.
The
Adviser
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Adviser
convenes
on
a
regular
and
ad
hoc
basis
to
review
such
investments
and
considers
a
number
of
factors,
including
valuation
methodologies
and
significant
unobservable
inputs,
when
arriving
at
fair
value.
The
Board
has
approved
the
Adviser’s
fair
valuation
procedures
as
a
part
of
the
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Adviser
provides
fair
valuation
inputs.
In
determining
fair
valuations,
inputs
may
include
market-based
analytics
that
may
consider
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values
and
other
relevant
investment
information.
Adviser
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
in
determining
fair
value.
Discounts
may
also
be
applied
based
on
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
The
Adviser
performs
regular
reviews
of
valuation
methodologies,
key
inputs
and
assumptions,
disposition
analysis
and
market
activity.
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
NOTES
TO
FINANCIAL
STATEMENTS
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
September
30,
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
September
30,
2022,
are
disclosed
in
the
Fund’s
Schedule
of
Investments.
Futures
Contracts
–
The
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.
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
September
30,
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.
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
(the
“Distributor”),
a
wholly
owned
subsidiary
of
Foreside
Financial
Group,
LLC
(doing
business
as
ACA
Group),
acts
as
the
agent
of
the
Trust
in
connection
with
the
continuous
offering
of
shares
of
the
Fund.
The
Fund
has
adopted
a
Distribution
Plan
(the
“Plan”)
for
Investor
Shares
in
accordance
with
Rule
12b-1
of
the
Act.
Under
the
Plan,
the
Fund
pays
the
Distributor
and/or
any
other
entity
as
authorized
by
the
Board
a
fee
of
up
to
0.25%
of
the
average
daily
net
assets
of
Investor
Shares.
The
Distributor
is
not
affiliated
with
the
Adviser
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
provides
fund
accounting,
fund
administration,
compliance
and
transfer
agency
services
to
the
Fund.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Apex
provides
a
Principal
Executive
Officer,
a
Principal
Financial
Officer,
a
Chief
Compliance
Officer
and
an
Anti-Money
Laundering
Officer
to
the
Fund,
as
well
as
certain
additional
compliance
support
functions.
Trustees
and
Officers
–
The
Trust
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
period,
the
Fund
invested
in
VanEck
Merk
Gold
Trust
ETF,
an
exchange
traded
product
sponsored
by
the
Adviser.
As
of
September
30,
2022
,
the
Fund
did
not
have
an
investment
in
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
period
ended
September
30,
2022
,
the
Adviser
waived
fees
of
$775
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
period
ended
September
30,
2022
,
were
as
follows:
Note
6.
Summary
of
Derivative
Activity
The
volume
of
open
derivative
positions
may
vary
on
a
daily
basis
as
the
Fund
transacts
derivative
contracts
in
order
to
achieve
the
exposure
desired
by
the
Adviser.
The
total
notional
value
of
activity
for
the
period
ended
September
30,
2022
for
any
derivative
type
that
was
held
during
the
period
is
as
follows:
The
Fund’s
use
of
derivatives
during
the
period
ended
September
30,
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
September
30,
2022
:
Realized
and
unrealized
gains
and
losses
on
derivatives
contracts
during
the
period
ended
September
30,
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
Purchases
Sales
$
4,819,327
$
12,364,285
Forward
Currency
Contracts
$
115,907,854
Location:
Currency
Contracts
Asset
derivatives:
Unrealized
gain
on
forward
currency
contracts
$
6,823
Liability
derivatives:
Unrealized
loss
on
forward
currency
contracts
$
107,
956
Location:
Currency
Contracts
Net
realized
gain
(loss)
on:
Forward
currency
contracts
$
(
4
98,294
)
Net
change
in
unrealized
appreciation
(depreciation)
on:
Forward
currency
contract
s
(
32,509
)
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
September
30,
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.
Note
7.
Federal
Income
Tax
As
of
September
30,
2022
,
the
cost
for
federal
income
tax
purposes
is
substantially
the
same
as
for
financial
statement
purposes
and
the
components
of
net
unrealized
depreciation
was
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.
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.
Note
8.
Underlying
Investments
in
Other
Pooled
Investment
Vehicles
During
the
period,
the
Fund
invested
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
September
30,
2022
none
of
the
Fund’s
net
assets
were
invested
in
the
VanEck
Merk
Gold
Trust
ETF.
Note
9.
Subsequent
Events
On
October
10,
2022,
the
Board
of
the
Trust
approved
a
Plan
of
Liquidation
and
Dissolution
(“Plan”),
pursuant
to
which
the
assets
of
the
Fund
will
be
liquidated
and
the
proceeds
remaining
after
payment
of
or
provision
for
liabilities
and
obligations
of
the
Fund
will
be
distributed
to
shareholders.
The
Adviser
recommended
that
the
Board
approve
the
Plan
based
on
market
conditions
and
economic
factors
adversely
affecting
the
Fund,
and
the
Board
concluded
that
it
is
in
the
best
interests
of
the
Fund
and
its
shareholders
to
liquidate
the
Fund
pursuant
to
the
Plan.
In
accordance
with
the
Plan,
substantially
all
of
the
assets
of
the
Fund
have
been
liquidated,
known
liabilities
of
the
Fund
have
been
satisfied,
and
the
remaining
proceeds
will
be
distributed
to
the
Fund’s
shareholders
in
complete
redemption
and
cancellation
of
the
Fund’s
shares
held
by
the
shareholders.
The
Fund
will
be
terminated
and
dissolved
on
or
about
November
30,
2022.
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**
$
6,823
$
–
$
–
$
6,823
Liabilities:
Over-the-counter
derivatives**
$
(
107,956
)
$
107,956
$
–
$
–
*
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
$
50
Gross
Unrealized
Depreciation
(3,419,282)
Net
Unrealized
Depreciation
$
(3,419,232)
Capital
and
Other
Losses
Unrealized
Depreciation
Total
$
(9,373,378)
$
(375,984)
$
(9,749,362)
Investment
Advisory
Agreement
Approval
At
the
June
9,
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
assisted
by
the
advice
of
Trustee
counsel.
At
the
meeting,
the
Board
reviewed,
among
other
matters:
(1)
the
nature,
extent
and
quality
of
the
services
provided
to
the
Fund
by
the
Adviser,
including
information
on
the
investment
performance
of
the
Fund;
(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
those
of
a
relevant
peer
group
of
funds;
(4)
the
extent
to
which
economies
of
scale
may
be
realized
as
the
Fund
grows
and
whether
the
advisory
fee
enables
the
Fund's
investors
to
share
in
the
benefits
of
economies
of
scale;
and
(5)
other
benefits
received
by
the
Adviser
from
its
relationship
with
the
Fund.
In
addition,
the
Board
recognized
that
the
evaluation
process
with
respect
to
the
Adviser
was
an
ongoing
one
and,
in
this
regard,
the
Board
considered
information
provided
by
the
Adviser
at
regularly
scheduled
meetings
during
the
past
year.
Nature,
Extent
and
Quality
of
Services
Based
on
written
materials
received,
a
presentation
from
a
senior
representative
of
the
Adviser
and
a
discussion
with
the
Adviser
about
the
Adviser’s
personnel,
operations
and
financial
condition,
the
Board
considered
the
quality
of
services
provided
by
the
Adviser
under
the
Advisory
Agreement.
In
this
regard,
the
Board
considered
information
regarding
the
experience,
qualifications
and
professional
background
of
the
portfolio
manager
and
other
personnel
at
the
Adviser
with
principal
responsibility
for
the
Fund’s
investments,
as
well
as
the
investment
philosophy
and
decision-making
process
of
the
Adviser
and
the
capability
and
integrity
of
the
Adviser’s
senior
management
and
staff.
The
Board
considered
also
the
adequacy
of
the
Adviser’s
resources.
The
Board
noted
the
Adviser’s
representation
that
the
firm
is
in
stable
financial
condition
and
that
the
firm
has
the
operational
capability,
the
necessary
staffing
and
experience,
and
the
financial
strength
necessary
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,
the
Board
concluded
that,
overall,
it
was
satisfied
with
the
nature,
extent
and
quality
of
services
to
be
provided
to
the
Fund
under
the
Advisory
Agreement.
Performance
In
connection
with
a
presentation
by
the
Adviser
regarding
its
approach
to
managing
the
Fund,
the
Board
reviewed
the
performance
of
the
Fund
compared
to
its
primary
benchmark
index
and
to
a
peer
group
of
funds
identified
by
Strategic
Insight,
Inc.
(“Strategic
Insight”)
as
having
characteristics
that
are
potentially
similar
to
those
of
Fund.
The
Board
observed
that
the
Fund
outperformed
its
primary
benchmark
index,
the
JPMorgan
3-Month
Global
Cash
Index,
for
the
one-,
three-,
five-,
and
10-year
periods
ended
March
31,
2022,
and
for
the
period
since
the
Fund’s
inception
on
May
10,
2005.
The
Board
also
considered
the
Fund’s
performance
relative
to
its
Strategic
Insight
peer
group.
In
this
regard,
the
Board
noted
the
Adviser’s
representation
that
there
are
important
differences
between
the
investment
strategy
of
the
Fund
and
the
investment
strategies
of
the
other
funds
in
the
Strategic
Insight
peer
group,
including
that
the
Fund
focuses
on
currencies
of
the
G-10
and
Singapore,
whereas
the
Strategic
Insight
peer
funds
focused
more
on
emerging
market
currencies.
The
Board
noted
that
the
unique
nature
of
the
Fund’s
investment
strategy
resulted
in
a
limited
universe
of
comparable
funds.
At
the
suggestion
of
the
Adviser,
the
Board
also
considered
the
performance
of
the
Fund
to
the
performance
of
the
Inverse
U.S.
Dollar
Index,
which
the
Adviser
believed
to
be
more
closely
aligned
with
the
strategy
of
the
Fund
than
the
peer
funds
included
in
the
Strategic
Insight
peer
group.
The
Board
observed
that
the
Fund
outperformed
the
Inverse
U.S.
Dollar
Index
for
the
one-
and
three-year
periods
ended
March
31,
2022
and
underperformed
the
Index
for
the
five-year
period
ended
March
31,
2022.
The
Board
also
noted
the
Adviser’s
representation
that
current
market
factors,
including
current
global
reflationary
environment,
were
indicative
of
a
potential
decline
in
the
U.S.
Dollar,
which
should
benefit
the
Fund.
Compensation
The
Board
evaluated
the
Adviser’s
compensation
for
providing
advisory
services
to
the
Fund
and
analyzed
comparative
information
on
actual
advisory
fee
rates
and
actual
total
expense
ratios
the
Fund’s
Strategic
Insight
peer
group.
The
Board
observed
that
the
Adviser’s
actual
advisory
fee
rate
and
actual
total
expense
ratios
were
each
higher
than
the
median
of
the
Strategic
Insight
peers.
The
Board
noted,
however,
that
the
Fund
operates
pursuant
to
unified
advisory
fee
agreement.
Under
this
agreement,
the
Adviser
pays
substantially
all
service
provider
fees
in
connection
with
the
management
and
operation
of
the
Fund
(with
certain
exceptions)
from
a
single,
all-inclusive
management
fee.
The
Board
noted
the
Adviser’s
representation
that
the
Strategic
Insight
peer
funds
did
not
employ
unified
fee
structures
and
therefore
a
direct
advisory
fee
comparison
was
not
meaningful.
Based
on
the
unified
nature
of
the
fee
and
expense
arrangements
and
the
Adviser’s
discussion
of
the
aggregate
costs
and
profitability
of
the
Adviser’s
mutual
fund
activities,
the
Board
concluded
that
the
Adviser’s
advisory
fee
rate
charged
to
the
Fund
was
reasonable.
Cost
of
Services
and
Profitability
The
Board
considered
information
provided
by
the
Adviser
regarding
its
costs
of
services
and
profitability
with
respect
to
the
Fund.
In
this
regard,
the
Board
considered
the
Adviser’s
resources
devoted
to
the
Fund
and
noted
the
Adviser’s
representation
that,
it
does
not
allocate
its
expenses
to
specific
products.
The
Board
noted
the
Adviser’s
representation,
however,
that
administrative
and
compliance
costs
attributable
to
the
Fund
were
believed
to
have
increased
in
recent
years
relative
to
the
Adviser’s
other
advisory
clients.
Based
on
these
and
other
applicable
considerations,
including
the
Adviser’s
discussion
of
the
aggregate
costs
and
profitability
of
the
Adviser’s
mutual
fund
activities,
the
Board
concluded
that
the
Adviser’s
profits
attributable
to
management
of
the
Fund
were
reasonable.
Economies
of
Scale
The
Board
evaluated
whether
the
Fund
would
benefit
from
any
economies
of
scale.
In
this
respect,
the
Board
considered
the
Fund’s
fee
structure,
asset
size,
and
net
expense
ratio,
giving
effect
to
the
Adviser’s
unitary
fee
structure.
The
Board
noted
the
Adviser’s
representation
that
the
Fund
potentially
could
benefit
from
economies
of
scale
in
the
future
as
assets
grow,
but
the
Adviser
was
not
proposing
breakpoints
or
changes
in
fees
at
this
time
in
light
of
the
Fund’s
low
level
of
assets
under
management.
Based
on
the
foregoing
information
and
other
applicable
considerations,
the
Board
concluded
that
the
asset
level
of
the
Fund
was
not
consistent
with
the
existence
of
economies
of
scale
and
that
economies
of
scale
were
not
a
material
factor
in
renewing
the
Advisory
Agreement.
Other
Benefits
The
Board
noted
the
Adviser’s
representation
that,
as
a
result
of
the
Adviser’s
management
of
the
Fund,
it
may
benefit
from
increased
public
exposure,
possibly
leading
to
increased
business
that
is
unrelated
to
the
Fund.
Based
on
the
foregoing
representations,
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
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,
and
its
consideration
of
information
received
throughout
the
year
from
the
Adviser,
the
Board
determined,
in
the
exercise
of
its
business
judgment,
that
the
advisory
arrangement,
as
outlined
in
the
Advisory
Agreement,
was
fair
and
reasonable
in
light
of
the
services
to
be
performed,
expenses
to
be
incurred
and
such
other
matters
as
the
Board
considered
relevant.
Liquidity
Risk
Management
Program
The
Fund
has
adopted
and
implemented
a
written
liquidity
risk
management
program,
as
required
by
Rule
22e-4
(the
“Liquidity
Rule”)
under
the
Investment
Company
Act
of
1940,
as
amended.
The
liquidity
risk
management
program
is
reasonably
designed
to
assess
and
manage
the
Fund’s
liquidity
risk,
taking
into
consideration,
among
other
factors,
the
Fund's
investment
strategy
and
the
liquidity
of
the
portfolio
investments
during
normal
and
reasonably
foreseeable
stressed
conditions,
its
short
and
long-term
cash
flow
projections
and
its
cash
holdings
and
access
to
other
funding
sources.
The
Board
approved
the
designation
of
the
Trust’s
Valuation
Committee
as
the
administrator
of
the
liquidity
risk
management
program
(the
“Program
Administrator”).
The
Program
Administrator
is
responsible
for
the
administration
and
oversight
of
the
program
and
for
reporting
to
the
Board
on
at
least
an
annual
basis
regarding,
among
other
things,
the
program’s
operation,
adequacy,
and
effectiveness.
The
Program
Administrator
assessed
the
Fund’s
liquidity
risk
profile
based
on
information
gathered
for
the
period
July
1,
2021
through
June
30,
2022
in
order
to
prepare
a
written
report
to
the
Board
for
review
at
its
meeting
held
on
September
9.
2022.
The
Program
Administrator’s
written
report
stated
that:
(i)
the
Fund
is
able
to
meet
redemptions
in
normal
and
reasonably
foreseeable
stressed
conditions
and
without
significant
dilution
of
remaining
shareholders’
interests
in
the
Fund;
(ii)
the
Fund's
strategy
is
appropriate
for
an
open-end
mutual
fund;
(iii)
the
liquidity
classification
determinations
regarding
the
Fund's
portfolio
investments,
which
take
into
account
a
variety
of
factors
and
may
incorporate
analysis
from
one
or
more
third-party
data
vendors,
remained
appropriate;
(iv)
the
Fund
did
not
approach
the
internal
triggers
set
forth
in
the
liquidity
risk
management
program
or
the
regulatory
percentage
limitation
(15%)
on
holdings
in
illiquid
investments;
(v)
it
continues
to
be
appropriate
to
not
set
a
“highly
liquid
investment
minimum”
for
the
Fund
because
the
Fund
primarily
holds
“highly
liquid
investments”;
and
(vi)
the
liquidity
risk
management
program
remains
reasonably
designed
and
adequately
implemented
to
prevent
violations
of
the
Liquidity
Rule.
No
significant
liquidity
events
impacting
the
Fund
or
proposed
changes
to
the
Program
were
noted
in
the
report.
Proxy
Voting
Information
A
description
of
the
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
securities
held
in
the
Fund’s
portfolio
is
available,
without
charge
and
upon
request,
by
calling
(866)
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
April
1,
2022
through
September
30,
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.
Beginning
Account
Value
April
1,
2022
Ending
Account
Value
September
30,
2022
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Investor
Shares
Actual
$
1,000.00
$
850.90
$
6.03
1.30%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,018.55
$
6.58
1.30%
Institutional
Shares
Actual
$
1,000.00
$
851.65
$
4.87
1.05%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,019.80
$
5.32
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
(183)
divided
by
365
to
reflect
the
half-year
period.
P.O.
BOX
588
PORTLAND,
ME
04112
INVESTMENT
ADVISER
Merk
Investments
LLC
555
Bryant
Street
#455
Palo
Alto,
CA
94301
www.merkfunds.com
TRANSFER
AGENT
Apex
Fund
Services
P.O.
Box
588
Portland,
ME
04112
www.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.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. INVESTMENTS.
(a)
Included as part of report to shareholders under Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Registrant does not accept nominees to the board of trustees from shareholders.
ITEM 11. CONTROLS AND PROCEDURES
(a) The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the 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
(a)(1) Not applicable.
(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 | 12/1/2022 | |
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 | 12/1/2022 | |
By | /s/ Karen Shaw | |
| Karen Shaw, Principal Financial Officer | |
| | |
Date | 12/1/2022 | |
