<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<FILENAME>cu01-115.txt
<DESCRIPTION>CUTLER TRUST ANNUAL REPORT
<TEXT>
THE CUTLER TRUST
--------------------------------------------------------------------------------
TABLE OF CONTENTS
JUNE 30, 2001
---------------------------------------------------------------
PAGE
----
Chairman's Letter to the Shareholders .... 1
Investment Advisor's Report .............. 2
Comparison of Change in Value of $10,000
Investment ....................... 4 Cutler Core Fund
Cutler Core Fund Portfolio ............... 5
Cutler Value Fund Portfolio .............. 10 Cutler Value Fund
Statements of Assets and Liabilities ..... 14
Statements of Operations ................. 15
Statements of Changes in Net Assets ...... 16
Finacial Highlights (Per Share Data) ..... 17
Notes to Financial Statements ............ 19
Supplementary Information Auditors ....... 22
Report of Independent Auditors ........... 23
Trustees of the Cutler Trust ............. 24
Distributor
Forum Fund Services, LLC
CUTLER & COMPANY, LLC
INVESTMENT MANAGEMENT
INVESTMENT ADVISER TO THE TRUST
503 Airport Road, Medford, OR 97504 ANNUAL REPORT
(800) 228-8537 (541) 770-9000 -------------
Fax: (541) 779-0006
info@cutler.com JUNE 30, 2001
------------------------------------------------------
This report is submitted for the general information
of the shareholders of the Funds. It is not authorized
for distribution to prospective investors in the Funds
unless preceded or accompanied by an effective
propectus, which includes information regarding the
Funds' objectives and policies, management
experience, and other information.
------------------------------------------------------
<PAGE>
ANNUAL REPORT JUNE 30, 2001
--------------------------------------------------------------------------------
CUTLER CORE FUND Cutler & Company, LLC Forum Shareholder Services, LLC
CUTLER VALUE FUND 503 Airport Road Two Portland Square
Medford, Oregon 97504 Portland, Maine 04101
--------------------------------------------------------------------------------
To The Cutler Trust Shareholders:
We are pleased to present our Annual Report for the fiscal year ended June 30,
2001. This has been another eventful year, featuring some moderation of
exuberance at home, emergence of both muscle-flexing and impending currency
conversion in the European Union, and delicate financial and political balancing
in much of the rest of the world.
The spot light in all this has fallen on Alan Greenspan and our Federal Reserve
Board, who somehow are expected to work immediate miracles. The dollar continues
to be so strong that two of every three new dollars created by the Fed are
gobbled up by oversees holders. While this dollarization of the world is
flattering, it does complicate the Fed's efforts to influence our domestic
economy. We believe that the Fed has done a very creditable job in responding
appropriately to both the global and domestic stresses on our economy, and this
should serve us well in the ongoing future.
We continue to be impressed with the performance and progress of our portfolio
management team and look forward to a constructive year ahead. As always, if you
have any questions, please let us help.
/s/ Ken Cutler /s/ Brooke Ashland
Kenneth R. Cutler Brooke R. Ashland
Chairman of the Board Chief Executive Officer
The Cutler Trust Cutler & Company, LLC
1
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
INVESTMENT ADVISER'S REPORT JUNE 30, 2001
--------------------------------------------------------------------------------
OUTLOOK
It seems that the combined effects of interest rate cuts and tax rebates will
result in the avoidance of a recession. The consumer appears to believe this and
other market participants likewise appear to be signaling a similar sentiment.
The Federal Reserve's most recent cut of 0.25%, while less than the 0.50% many
hoped for, was accompanied by language that indicates it remains watchful for
further signs of economic weakness.
We believe that the corporate profit cycle will continue to be challenged for
another quarter or two. Industry analysts cite an "earnings recession"; adapting
to corporate earnings the classic definition of an economic recession of two
consecutive quarters of contraction. However several factors support the
potential for both profit and economic recovery as the second half progresses.
First, the number of negative earnings pre-announcements is lower than this
point in the first quarter. Second, the effects of this year's interest rate
cuts are likely to become apparent in both the industrial and consumer portions
of the economy. Third, the consumer-driven economy has the potential to be
further strengthened as tax refunds are spent. Fourth, there are likely to be
beneficial effects from renewed inventory discipline and the working off of
excess inventory. Lastly, energy prices have eased versus a year ago. We believe
that these effects will begin to show themselves in improved profitability and
increased business capital spending, which may pull the business cycle from its
trough.
VALUE FUND
The total return for the Cutler Value Fund was 9.0% for the year ended June 30,
2001 compared to -14.8% for the S&P 500 Index, the Fund's style benchmark, and
3.8% for the comparable Lipper Large Cap Value average.
The past year's performance was driven by strong stock picks in the Financial
Services, Energy, and Consumer Discretionary sectors. Stocks worthy of mention
in these areas included, Sungard Data Systems (up 93%), M&T Bank (up 70%), Ace
Limited (up 42%), Tosco (up 57%), and Mattel (up 45%). During the year we were
also helped by pushing into Integrated Oils and Basic Materials companies while
avoiding Health Care.
Although we were pleased with our Fund's performance during a difficult year, we
had our share of ideas that did not go our way. Most notably, we recognized the
need at the start of the fiscal year to move into Financial Services but did not
do so aggressively enough, therefore losing opportunity. In addition, we began
to add to selective Technology names a bit too early during the past few months.
Admittedly we avoided a great deal of pain in this sector but we could have
stayed on the sidelines a bit longer.
Going forward our major investment themes include a positive economic and/or
fundamental investment environment for energy related companies, capital market
sensitive financials, and selective areas of technology. We also intend to avoid
defensive areas which have held up well over the past year but in our view offer
little upside potential and poor downside protection in an economy we believe
will improve over the next 12 to 18 months.
CORE FUND
The total return for the Cutler Core Fund was -14.4% for the year ending June
30, 2001 compared to -14.8% for the S&P 500 Index, the Fund's style benchmark,
and -15.9% for the comparable Lipper Large Cap Core average.
2
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
INVESTMENT ADVISER'S REPORT JUNE 30, 2001 (concluded)
--------------------------------------------------------------------------------
The market's weak return was driven primarily by the technology sector, which
was off more than 50% for the year. The Core Fund was essentially equal weighted
in the sector relative to the S&P 500 Index.
The Cutler Core Fund's relative performance was driven primarily by two sectors.
First, in the Consumer Discretionary sector, the Fund's stocks rose 16.7% while
the stocks in the S&P 500 Index returned -5.5%. Strong stocks in that sector
were Mattel Inc, up 45%, and Costco Wholesale Corp, up over 24%.
The second key sector was Financial Services, which returned over 22% for the
year. The stocks held by the Fund in this sector returned over 30%; however, the
Fund had a lower weighting in the sector than the S&P 500 Index. Strong stocks
in that sector included Sungard Data Systems, up over 93%, and M&T Bank Corp, up
over 70%.
Going forward we see an eventual recovery in the economy and are positioning the
Fund with that expectation. Most notably we have moved to an overweight in the
Technology and Energy sectors while underweighting the more defensive areas like
Consumer Staples. Barring unforeseen circumstances, this strategy will be an
ongoing theme throughout the coming year as we look to add to selective
economically sensitive areas on short-term weakness and move out of defensive
areas when valuations appear full.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. MARKET VOLATILITY CAN
SIGNIFICANTLY IMPACT SHORT TERM PERFORMANCE. RESULTS OF AN INVESTMENT MADE TODAY
MAY DIFFER SUBSTANTIALLY FROM THE FUND'S HISTORICAL PERFORMANCE. PLEASE SEE THE
NEXT PAGE FOR ADDITIONAL FUND PERFORMANCE INFORMATION. THE VIEWS IN THIS REPORT
WERE THOSE OF THE FUND MANAGER AS OF JUNE 30, 2001, AND MAY NOT REFLECT THE
VIEWS OF THE MANAGER ON THE DATE THIS REPORT IS FIRST PUBLISHED OR ANY TIME
THEREAFTER. THESE VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN
UNDERSTANDING THEIR INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT
ADVICE.
LIPPER, INC. AN INDEPENDENT MUTUAL FUND RATING SERVICE, CALCULATES PERFORMANCE
BY TAKING AN ARITHMETIC AVERAGE OF THE RETURNS OF THE FUNDS IN EACH
CLASSIFICATION. THE STANDARD AND POOR'S 500 INDEX (S&P 500) IS A GROUP OF
UNMANAGED SECURITIES WIDELY REGARDED TO BE REPRESENTATIVE OF THE STOCK MARKET AS
A WHOLE. YOU CANNOT INVEST DIRECTLY IN ANY INDEX.
3
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
JUNE 30, 2001
--------------------------------------------------------------------------------
These charts reflect a comparison of changes in value of a hypothetical $10,000
investment in the Cutler Core Fund and Cutler Value Fund since inception,
including reinvestment of all dividends and distributions, and the performance
of the Standard & Poor's 500 Index ("S&P 500 Index"). The S&P 500 Index is a
market weighted index composed of 500 large capitalization companies and
reflects the reinvestment of dividends. The performance of the S&P 500 Index
does not reflect expenses, which have been deducted from each Fund's return.
Individuals cannot invest in an index.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. Investment return and
principal value of an investment in each Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Total return for each Fund would have been lower had certain fees and
expenses not been voluntarily waived and/or reimbursed.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cutler Core Fund Cutler Value Fund
vs. S&P 500 Index vs. S&P 500 Index
Average Annual Total Return Average Annual Total Return
SINCE SINCE
INCEPTION VALUE INCEPTION VALUE
ONE YEAR FIVE YEAR ON 12/30/92 6/30/01 ONE YEAR FIVE YEAR ON 12/30/92 6/30/01
-------- --------- ----------- ------- -------- --------- ----------- -------
Cutler Core Fund (14.44%) 12.43% 11.87% $25,949 Cutler Value Fund 8.97% 13.86% 13.33% $28,956
S&P 500 Index (14.82%) 14.47% 15.09% $33,018 S&P 500 Index (14.82%) 14.47% 15.09% $33,018
[EDGAR Representation of Graph Chart:
CORE FUND VALUE FUND
DATE Cutler Core Fund S&P 500 Index DATE Cutler Value Fund S&P 500 Index
12/30/92 10,000 10,000 12/30/92 10,000 10,000
01/31/93 9,770 10,033 01/31/93 9,770 10,033
02/28/93 9,920 10,170 02/28/93 9,950 10,170
03/31/93 10,110 10,385 03/31/93 10,100 10,385
04/30/93 9,869 10,134 04/30/93 9,989 10,134
05/31/93 9,979 10,404 05/31/93 10,150 10,404
06/30/93 10,045 10,434 06/30/93 10,165 10,434
07/31/93 10,135 10,392 07/31/93 10,055 10,392
08/31/93 10,549 10,786 08/31/93 10,478 10,786
09/30/93 10,585 10,701 09/30/93 10,352 10,701
10/31/93 10,838 10,922 10/31/93 10,544 10,922
11/30/93 10,534 10,818 11/30/93 10,392 10,818
12/31/93 10,509 10,949 12/31/93 10,499 10,949
01/31/94 10,733 11,321 01/31/94 10,661 11,321
02/28/94 10,315 11,014 02/28/94 10,356 11,014
03/31/94 9,896 10,535 03/31/94 9,995 10,535
04/30/94 9,999 10,670 04/30/94 10,108 10,670
05/31/94 10,164 10,844 05/31/94 10,271 10,844
06/30/94 9,907 10,579 06/30/94 10,056 10,579
07/31/94 10,114 10,926 07/31/94 10,313 10,926
08/31/94 10,487 11,373 08/31/94 10,797 11,373
09/30/94 10,259 11,095 09/30/94 10,540 11,095
10/31/94 10,395 11,344 10/31/94 10,674 11,344
11/30/94 10,071 10,931 11/30/94 10,364 10,931
12/31/94 10,205 11,093 12/31/94 10,584 11,093
01/31/95 10,744 11,381 01/31/95 10,906 11,381
02/28/95 11,019 11,824 02/28/95 11,291 11,824
03/31/95 11,146 12,172 03/31/95 11,510 12,172
04/30/95 11,390 12,530 04/30/95 11,740 12,530
05/31/95 11,837 13,030 05/31/95 12,148 13,030
06/30/95 11,752 13,333 06/30/95 12,302 13,333
07/31/95 11,892 13,774 07/31/95 12,533 13,774
08/31/95 11,967 13,809 08/31/95 12,596 13,809
09/30/95 12,653 14,391 09/30/95 13,150 14,391
10/31/95 12,599 14,340 10/31/95 13,087 14,340
11/30/95 13,151 14,969 11/30/95 13,773 14,969
12/31/95 13,718 15,257 12/31/95 14,097 15,257
01/31/96 13,960 15,776 01/31/96 14,511 15,776
02/29/96 13,938 15,923 02/29/96 14,574 15,923
03/31/96 14,136 16,076 03/31/96 14,662 16,076
04/30/96 14,103 16,313 04/30/96 14,768 16,313
05/31/96 14,336 16,733 05/31/96 15,055 16,733
06/30/96 14,447 16,796 06/30/96 15,132 16,796
07/31/96 14,046 16,055 07/31/96 14,481 16,055
08/31/96 14,180 16,394 08/31/96 14,727 16,394
09/30/96 15,016 17,316 09/30/96 15,551 17,316
10/31/96 15,824 17,793 10/31/96 15,883 17,793
11/30/96 16,745 19,137 11/30/96 16,869 19,137
12/31/96 16,226 18,758 12/31/96 16,478 18,758
01/31/97 17,234 19,929 01/31/97 17,254 19,929
02/28/97 17,739 20,086 02/28/97 17,653 20,086
03/31/97 17,147 19,262 03/31/97 17,074 19,262
04/30/97 18,061 20,411 04/30/97 17,982 20,411
05/31/97 18,900 21,653 05/31/97 18,879 21,653
06/30/97 19,888 22,622 06/30/97 19,851 22,622
07/31/97 20,829 24,422 07/31/97 21,162 24,422
08/31/97 19,603 23,055 08/31/97 19,786 23,055
09/30/97 20,730 24,316 09/30/97 20,837 24,316
10/31/97 20,096 23,505 10/31/97 20,381 23,505
11/30/97 21,028 24,592 11/30/97 21,401 24,592
12/31/97 21,637 25,014 12/31/97 21,957 25,014
01/31/98 21,774 25,291 01/31/98 22,051 25,291
02/28/98 22,745 27,114 02/28/98 23,333 27,114
03/31/98 23,766 28,501 03/31/98 24,634 28,501
04/30/98 23,546 28,788 04/30/98 24,563 28,788
05/31/98 23,245 28,294 05/31/98 24,033 28,294
06/30/98 24,182 29,442 06/30/98 24,794 29,442
07/31/98 24,265 29,129 07/31/98 24,369 29,129
08/31/98 21,489 24,922 08/31/98 21,397 24,922
09/30/98 22,305 26,519 09/30/98 22,444 26,519
10/31/98 23,835 28,674 10/31/98 24,063 28,674
11/30/98 24,648 30,411 11/30/98 25,149 30,411
12/31/98 26,284 32,163 12/31/98 25,901 32,163
01/31/99 26,621 33,507 01/31/99 25,717 33,507
02/28/99 26,142 32,466 02/28/99 25,578 32,466
03/31/99 26,493 33,765 03/31/99 26,060 33,765
04/30/99 26,777 35,072 04/30/99 28,607 35,072
05/31/99 25,996 34,245 05/31/99 28,129 34,245
06/30/99 27,925 36,144 06/30/99 29,282 36,144
07/31/99 27,143 35,017 07/31/99 28,586 35,017
08/31/99 26,539 34,844 08/31/99 27,766 34,844
09/30/99 26,318 33,889 09/30/99 26,547 33,889
10/31/99 27,778 36,033 10/31/99 27,788 36,033
11/30/99 28,793 36,766 11/30/99 27,214 36,766
12/31/99 30,277 38,930 12/31/99 26,752 38,930
01/31/00 28,707 36,974 01/31/00 25,509 36,974
02/29/00 28,498 36,275 02/29/00 23,671 36,275
03/31/00 30,843 39,821 03/31/00 27,029 39,821
04/30/00 30,351 38,624 04/30/00 26,541 38,624
05/31/00 30,275 37,831 05/31/00 27,978 37,831
06/30/00 30,329 38,763 06/30/00 26,572 38,763
07/31/00 28,774 38,158 07/31/00 26,599 38,158
08/31/00 30,234 40,527 08/31/00 27,686 40,527
09/30/00 28,407 38,388 09/30/00 27,131 38,388
10/31/00 28,445 38,225 10/31/00 28,056 38,225
11/30/00 26,774 35,213 11/30/00 27,485 35,213
12/31/00 27,843 35,386 12/31/00 29,069 35,386
01/31/01 29,459 36,641 01/31/01 29,929 36,641
02/28/01 26,767 33,302 02/28/01 28,792 33,302
03/31/01 25,672 31,193 03/31/01 27,964 31,193
04/30/01 27,445 33,616 04/30/01 29,496 33,616
05/31/01 27,239 33,841 05/31/01 30,026 33,841
06/30/01 25,949 33,018 06/30/01 28,956 33,018
</TABLE>
4
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER CORE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
COMMON STOCK - 97.9%
BANKS - 12.6%
9,300 Bank of New York Co., Inc. $ 446,400
35,050 Citigroup, Inc. 1,852,042
15,200 FleetBoston Financial Corp. 599,641
24,450 J.P. Morgan Chase & Co. 1,090,470
4,800 M & T Bank Corp. 362,400
11,750 Mellon Financial Corp. 540,500
49,092 U.S. Bancorp 1,118,806
21,100 Wells Fargo & Co. 979,673
-----------
6,989,932
-----------
BUSINESS SERVICES - 4.4%
18,050 Microsoft Corp. + 1,310,430
10,500 Peregrine Systems, Inc. + 304,500
27,300 Sun Microsystems, Inc. + 429,156
13,100 Sungard Data Systems, Inc. + 393,131
-----------
2,437,217
-----------
CHEMICALS - 1.9%
10,000 E.I. du Pont de Nemours & Co. 482,400
16,600 Rohm & Haas Co. 546,140
-----------
1,028,540
-----------
COMMUNICATION EQUIPMENT - 2.9%
97,000 Motorola, Inc. 1,606,320
-----------
DRUGS & PHARMECEUTICALS - 9.8%
34,750 Bristol-Myers Squibb Co. 1,817,425
100 Eli Lilly & Co. 7,400
27,850 IMS Health, Inc. 793,725
23,250 Merck & Co., Inc. 1,485,907
33,050 Pfizer, Inc. 1,323,653
-----------
5,428,110
-----------
See Notes to Financial Statements.
5
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER CORE FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
ELECTRIC MACHINERY - 3.8%
22,900 General Electric Co. $ 1,116,376
32,100 Texas Instruments, Inc. 1,011,150
-----------
2,127,526
ELECTRIC, GAS & UTILITY COMPANIES - 2.4%
15,700 CMS Energy Corp. 437,245
14,200 Exelon Corp. 910,504
200 Xcel Energy, Inc. 5,690
-----------
1,353,439
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS,
EXCEPT COMPUTER EQUIPMENT - 7.9%
5,650 Applied Materials, Inc. + 277,415
8,850 CIENA Corp. + 336,300
14,150 Cooper Industries, Inc. 560,199
8,200 Intel Corp. 239,850
31,650 JDS Uniphase Corp. + 403,538
71,400 National Semiconductor Corp. + 2,079,167
23,650 Vitesse Semiconductor Corp. + 497,596
-----------
4,394,065
FABRICATED METAL PRODUCTS - 1.8%
15,550 Illinois Tool Works, Inc. 984,315
FOOD & SOFT DRINKS - 1.7%
32,750 ConAgra, Inc. 648,778
6,000 General Mills, Inc. 262,680
100 H.J. Heinz Co. 4,089
100 Sara Lee Corp. 1,894
-----------
917,441
-----------
FOREST PRODUCTS - 1.9%
29,200 International Paper Co. 1,042,439
-----------
See Notes to Financial Statements.
6
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER CORE FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
GAMES & TOYS - 1.2%
34,600 Mattel, Inc. $ 654,632
-----------
GENERAL MERCHANDISE STORES - 1.6%
18,050 Wal-Mart Stores, Inc. 880,840
-----------
GROCERY STORES - 0.9%
20,100 Kroger Co. + 502,500
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 9.0%
37,250 Cisco Systems, Inc. + 677,950
22,300 Dell Computer Corp. + 578,685
16,500 Dover Corp. 621,225
11,900 EMC Corp. + 345,695
100 Hewlett-Packard Co. 2,860
16,000 IBM Corp. 1,808,000
43,000 Symbol Technologies, Inc. 954,600
-----------
4,989,015
-----------
INSTRUMENTS & RELATED PRODUCTS - 1.1%
17,275 Honeywell International, Inc. 604,452
-----------
MEDICAL PRODUCTS - 2.0%
17,800 Johnson & Johnson 890,000
5,100 Medtronic, Inc. 234,651
-----------
1,124,651
-----------
MISCELLANEOUS RETAIL - 3.8%
13,650 Costco Wholesale Corp. + 560,742
14,950 CVS Corp. 577,070
60,650 Staples, Inc. + 969,794
-----------
2,107,606
-----------
MOTION PICTURES - 1.0%
31,600 AT&T Corp-Liberty Media Corp + 552,684
-----------
See Notes to Financial Statements.
7
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER CORE FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
OIL & GAS EXTRACTION - 1.6%
21,400 Burlington Resources, Inc. $ 854,930
PETROLEUM PRODUCTS - 8.5%
43,700 Conoco, Inc. Class B 1,262,930
15,030 Exxon Mobil Corp. 1,312,872
100 Texaco, Inc. 6,660
32,850 Tosco Corp. 1,447,042
18,850 Unocal Corp. 643,728
-----------
4,673,232
-----------
PRIMARY METAL INDUSTRIES - 1.7%
23,300 Alcoa, Inc. 918,020
-----------
PRINTING & PUBLISHING - 1.4%
13,400 Knight-Ridder, Inc. 794,620
-----------
PROPERTY & CASUALTY INSURANCE - 1.6%
21,850 Ace, Ltd. 854,117
100 American International Group, Inc. 8,600
-----------
862,717
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.9%
15,950 Morgan Stanley Dean Witter & Co. 1,024,468
-----------
STONE, CLAY, GLASS & CONCRETE PRODUCTS - 1.0%
34,300 Corning, Inc. 573,153
-----------
TRANSPORTATION - 1.4%
13,800 Union Pacific Corp. 757,758
-----------
TRANSPORTATION EQUIPMENT - 0.0%
100 United Technologies Corp. 7,326
-----------
See Notes to Financial Statements.
8
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER CORE FUND
SCHEDULE OF INVESTMENTS (concluded)
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
VOICE & DATA TRANSMISSION - 7.1%
20,820 AT&T Wireless Group + 340,407
150 BellSouth Corp. 6,041
12,350 SBC Communications, Inc. 494,741
26,350 Verizon Communications, Inc. 1,409,725
2,754 WorldCom, Inc. - MCI Group 44,339
110,000 WorldCom, Inc. + 1,645,600
-----------
3,940,853
-----------
Total Common Stock (Cost $56,134,216) 54,132,801
-----------
SHORT-TERM HOLDINGS - 2.6%
1,437,567 Daily Assets Cash Fund (Cost $1,437,567) 1,437,567
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $57,571,783) - 100.5% $55,570,368
Other Assets and Liabilities, Net - (0.5)% (290,042)
-----------
TOTAL NET ASSETS - 100.0% $55,280,326
===========
--------------------------------
+ Non-income producing security.
See Notes to Financial Statements.
9
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
COMMON STOCK -98.6%
BANKS - 20.9%
7,400 Bank of New York Co., Inc. $ 355,200
24,050 Citigroup, Inc. 1,270,802
12,050 FleetBoston Financial Corp. 475,373
19,550 J.P. Morgan Chase & Co. 871,930
3,850 M & T Bank Corp. 290,674
9,300 Mellon Financial Corp. 427,800
39,350 U.S. Bancorp 896,787
16,950 Wells Fargo & Co. 786,989
-----------
5,375,555
-----------
CHEMICALS - 3.2%
8,000 E.I. du Pont de Nemours & Co. 385,920
13,250 Rohm & Haas Co. 435,925
-----------
821,845
-----------
COMMUNICATION EQUIPMENT - 2.0%
31,000 Motorola, Inc. 513,360
-----------
DRUGS & PHARMECEUTICALS - 4.2%
11,650 Bristol-Myers Squibb Co. 609,295
7,500 Merck & Co., Inc. 479,325
-----------
1,088,620
-----------
ELECTRIC, GAS & UTILITY COMPANIES - 4.2%
12,500 CMS Energy Corp. 348,125
11,350 Exelon Corp. 727,761
-----------
1,075,886
-----------
See Notes to Financial Statements.
10
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER VALUE FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS,
EXCEPT COMPUTER EQUIPMENT - 3.8%
11,300 Cooper Industries, Inc. 447,367
18,800 National Semiconductor Corp. + 547,456
-----------
994,823
-----------
FABRICATED METAL PRODUCTS - 1.0%
4,300 Illinois Tool Works, Inc. 272,190
-----------
FOOD & SOFT DRINKS - 2.8%
26,250 ConAgra, Inc. 520,013
4,750 General Mills, Inc. 207,957
-----------
727,970
-----------
FOREST PRODUCTS - 2.1%
10,100 Weyerhaeuser Co. 555,197
-----------
GAMES & TOYS - 2.0%
27,700 Mattel, Inc. 524,084
-----------
GROCERY STORES - 1.6%
16,050 Kroger Co. + 401,250
-----------
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER EQUIPMENT - 5.2%
13,250 Dover Corp. 498,863
7,450 IBM Corp. 841,850
-----------
1,340,713
-----------
INSTRUMENTS & RELATED PRODUCTS - 1.2%
8,950 Honeywell International, Inc. 313,161
-----------
MEDICAL PRODUCTS - 2.8%
14,200 Johnson & Johnson 710,000
-----------
MISCELLANEOUS RETAIL - 1.0%
16,600 Staples, Inc. + 265,434
-----------
See Notes to Financial Statements.
11
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER VALUE FUND
SCHEDULE OF INVESTMENTS (continued)
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
PETROLEUM PRODUCTS - 15.6%
5,450 BP Amoco plc ADR $ 271,683
35,051 Conoco, Inc. Class B 1,012,974
12,050 Exxon Mobil Corp. 1,052,568
26,300 Tosco Corp. 1,158,514
15,200 Unocal Corp. 519,080
-----------
4,014,819
-----------
PRIMARY METAL INDUSTRIES - 2.9%
18,700 Alcoa, Inc. 736,780
-----------
PRINTING & PUBLISHING - 2.5%
10,750 Knight-Ridder, Inc. 637,475
-----------
PROPERTY & CASUALTY INSURANCE - 2.7%
17,500 Ace, Ltd. 684,075
-----------
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 3.2%
12,700 Morgan Stanley Dean Witter & Co. 815,721
-----------
STONE, CLAY, GLASS & CONCRETE PRODUCTS - 1.0%
14,700 Corning, Inc. 245,637
-----------
TRANSPORTATION - 2.4%
11,050 Union Pacific Corp. 606,756
-----------
VOICE & DATA TRANSMISSION - 10.3%
16,702 AT&T Wireless Group + 273,078
9,850 SBC Communications, Inc. 394,591
21,100 Verizon Communications, Inc. 1,128,849
See Notes to Financial Statements.
12
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
CUTLER VALUE FUND
SCHEDULE OF INVESTMENTS (concluded)
JUNE 30, 2001
--------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION VALUE
2,224 WorldCom, Inc. - MCI Group 35,806
55,600 WorldCom, Inc. + 831,776
-----------
2,664,100
-----------
Total Common Stock (Cost $23,717,673) 25,385,451
-----------
SHORT-TERM HOLDINGS - 1.5%
386,776 Daily Assets Cash Fund (Cost $386,776) 386,776
TOTAL INVESTMENTS IN SECURITIES
(Cost $24,104,449) - 100.1% $25,772,227
Other Assets and Liabilities, Net - (0.1)% (28,703)
-----------
TOTAL NET ASSETS - 100.0% $25,743,524
===========
--------------------------------
+ Non-income producing security.
See Notes to Financial Statements.
13
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
STATEMENTS OF ASSETS & LIABILITIES
JUNE 30, 2001
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CUTLER CUTLER
CORE VALUE
FUND FUND
--------------------- -----------------------
ASSETS
Total investments, at value
(Cost $57,571,783 and $24,104,449, respectively) (Note 2) $55,570,368 $25,772,227
Interest, dividends and other receivables 48,719 28,425
Receivable for Fund shares sold 25,798 -
--------------------- -----------------------
Total Assets $55,644,885 $25,800,652
--------------------- -----------------------
LIABILITIES
Dividends payable 1,570 3,875
Payable for securities purchased 149,458 -
Payable for Fund shares redeemed 129,926 12,917
Payable to administrator (Note 3) 4,622 2,145
Payable to investment adviser (Note 3) 34,662 2,156
Payable to other related parties (Note 3) 3,000 3,000
Accrued expenses and other liabilities 41,321 33,035
--------------------- -----------------------
Total Liabilities 364,559 57,128
--------------------- -----------------------
NET ASSETS $55,280,326 $25,743,524
===================== =======================
COMPONENTS OF NET ASSETS
Paid-in capital $57,684,016 $24,633,994
Distributions in excess of net investment income (4,256) (1,746)
Net unrealized appreciation (depreciation) on investments (2,001,415) 1,667,778
Accumulated net realized loss on investments (398,019) (556,502)
--------------------- -----------------------
NET ASSETS $55,280,326 $25,743,524
===================== =======================
Shares of Beneficial Interest, No Par Value 5,477,851 2,480,802
NET ASSET VALUE, offering price and redemption price per share $10.09 $10.38
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2001
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CUTLER CUTLER
CORE VALUE
FUND FUND
------------------------ -----------------------
INVESTMENT INCOME
Dividend income $ 813,633 $ 509,696
Interest income 176,691 47,201
------------------------ -----------------------
Total Investment Income 990,324 556,897
------------------------ -----------------------
EXPENSES
Investment advisory (Note 3) 465,333 208,238
Administration (Note 3) 62,044 27,765
Transfer agent (Note 3) 17,721 15,553
Shareholder services (Note 3) 30,901 33,616
Custodian (Note 3) 15,157 9,104
Accounting (Note 3) 41,000 41,000
Legal 18,572 8,157
Audit 19,682 17,626
Directors fees 15,924 7,038
Reporting 10,784 4,958
Compliance 15,925 13,351
Miscellaneous 30,743 14,905
------------------------ -----------------------
Total Expenses 743,786 401,311
Fees waived (Note 4) - (54,255)
------------------------ -----------------------
Net Expenses 743,786 347,056
------------------------ -----------------------
NET INVESTMENT INCOME 246,538 209,841
------------------------ -----------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss from investments (352,525) (402,321)
Net change in unrealized appreciation (depreciation) of investments (9,816,635) 2,675,523
------------------------ -----------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (10,169,160) 2,273,202
------------------------ -----------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ($9,922,622) $2,483,043
======================== =======================
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CUTLER CORE CUTLER VALUE
FUND FUND
------------------------------------- -------------------------------------
Year Year Year Year
Ended Ended Ended Ended
June 30, 2001 June 30, 2000 June 30, 2001 June 30, 2000
------------------ ----------------- -------------------- ---------------
OPERATIONS
Net investment income $ 246,538 $ 369,707 $ 209,841 $ 323,467
Net realized gain (loss) from investments (352,525) 15,785,136 (402,321) 1,297,860
Net change in unrealized appreciation (depreciation)
of investments (9,816,635) (11,162,815) 2,675,523 (5,897,976)
------------------ ----------------- -------------------- ---------------
Net increase (decrease) in net assets resulting
from operations (9,922,622) 4,992,028 2,483,043 (4,276,649)
------------------ ----------------- -------------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income (250,876) (369,872) (211,763) (322,242)
Net realized capital gain from investments (15,708,259) (4,398,786) (513,197) (14,068,788)
------------------ ----------------- -------------------- ---------------
Total distributions to shareholders (15,959,135) (4,768,658) (724,960) (14,391,030)
------------------ ----------------- -------------------- ---------------
CAPITAL SHARE TRANSACTIONS
Sale of shares 3,863,703 9,494,525 1,347,266 5,099,582
Reinvestment of distributions 15,831,161 4,712,363 684,282 13,390,836
Redemption of shares (8,628,067) (18,834,071) (5,661,201) (12,332,611)
------------------ ----------------- -------------------- ---------------
Net increase (decrease) from capital share transactions 11,066,797 (4,627,183) (3,629,653) 6,157,807
------------------ ----------------- -------------------- ---------------
Net decrease in net assets (14,814,960) (4,403,813) (1,871,570) (12,509,872)
------------------ ----------------- -------------------- ---------------
NET ASSETS
Beginning of Period 70,095,286 74,499,099 27,615,094 40,124,966
------------------ ----------------- -------------------- ---------------
End of Period (A) $ 55,280,326 $ 70,095,286 $ 25,743,524 $ 27,615,094
================== ================= ==================== ===============
(A) Accumulated undistributed (distributions in $ (4,256) $ 82 $ (1,746) $ 176
excess of) net investment income ================== ================= ==================== ===============
SHARE ACTIVITY
Sale of shares 299,135 609,586 130,518 430,728
Reinvestment of distributions 1,478,659 302,034 67,992 1,372,504
Redemption of shares (682,972) (1,272,244) (540,304) (1,100,106)
------------------ ----------------- -------------------- ---------------
Net increase (decrease) in shares 1,094,822 (360,624) (341,794) 703,126
================== ================= ==================== ===============
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Selected per share data and
ratios for a share outstanding
throughout each period.
<TABLE>
<S> <C> <C> <C> <C> <C>
CUTLER CORE FUND
--------------------------------------------------------------------
Year Ended June 30,
--------------------------------------------------------------------
2001 2000 1999 1998 1997
Net Asset Value, Beginning of Period $15.99 $ 15.71 $ 17.60 $ 16.06 $ 12.95
------------ ----------- ------------ ------------- -------------
Investment Operations
Net investment income 0.05 0.08 0.12 0.19 0.24
Net realized and unrealized gain (loss)
on investments (2.16) 1.24 2.06 3.05 4.30
------------ ----------- ------------ ------------- -------------
Total from Investment Operations (2.11) 1.32 2.18 3.24 4.54
------------ ----------- ------------ ------------- -------------
Distributions From
Net investment income (0.05) (0.08) (0.12) (0.19) (0.24)
Net realized gain on investments (3.74) (0.96) (3.95) (1.51) (1.19)
------------ ----------- ------------ ------------- -------------
Total Distributions (3.79) (1.04) (4.07) (1.70) (1.43)
------------ ----------- ------------ ------------- -------------
Net Asset Value, End of Period $10.09 $15.99 $15.71 $17.60 $16.06
============ =========== ============ ============= =============
Total Return (14.44%) 8.61% 15.48% 21.60% 37.65%
Ratios/Supplementary Data
Net assets at the end of year (in thousands) $ 55,280 $ 70,095 $ 74,499 $ 77,482 $ 62,523
Ratios to Average Net Assets
Expenses 1.20% 1.11% 1.07% 1.10% 1.17%
Net investment income 0.40% 0.51% 0.76% 1.14% 1.67%
Portfolio Turnover Rate 93% 79% 59% 119% 23%
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
FINANCIAL HIGHLIGHTS (concluded)
--------------------------------------------------------------------------------
Selected per share data and
ratios for a share outstanding
throughout each period.
<TABLE>
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------
CUTLER VALUE FUND
------------------------------------------------------------
Year Ended June 30,
------------------------------------------------------------
2001 2000 1999 1998 1997
Net Asset Value, Beginning of Period $ 9.78 $18.93 $21.02 $18.33 $14.18
------- ------- ------- ------- -------
Investment Operations
Net investment income 0.08 0.12 0.14 0.13 0.18
Net realized and unrealized gain (loss) on
investments 0.79 (1.97) 2.73 4.19 4.20
------- ------- ------- ------- -------
Total from Investment Operations 0.87 (1.85) 2.87 4.32 4.38
------- ------- ------- ------- -------
Distributions From
Net investment income (0.08) (0.12) (0.14) (0.13) (0.18)
In excess of net investment income - - (a) - -
Net realized gain on investments (0.19) (7.18) (4.82) (1.50) (0.05)
------- ------- ------- ------- -------
Total Distributions (0.27) (7.30) (4.96) (1.63) (0.23)
------- ------- ------- ------- -------
Net Asset Value, End of Period $10.38 $9.78 $18.93 $21.02 $18.33
======= ======= ======= ======= =======
Total Return 8.97% (9.25%) 18.10% 24.90% 31.18%
Ratios/Supplementary Data
Net assets at the end of year (in thousands) $25,744 $27,615 $40,125 $41,085 $35,277
Ratios to Average Net Assets
Expenses including reimbursement/waiver of fees 1.25% 1.25% 1.20% 1.24% 1.25%
Expenses excluding reimbursement/waiver of fees 1.45% 1.28% 1.20% 1.24% 1.25%
Net investment income 0.56% 1.01% 0.80% 0.65% 1.15%
Portfolio Turnover Rate 60% 66% 110% 50% 4%
</TABLE>
---------------------------------------
(a) Per share data was less than $0.01.
See Notes to Financial Statements.
18
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
NOTES TO FINANCIAL STATEMENTS (concluded)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
The Cutler Trust (the "Trust") was organized on October 2, 1992, as an
open-end management investment company under the Investment Company Act of
1940. The Trust currently has two diversified investment portfolios: Cutler
Core Fund and Cutler Value Fund (individually, a "Fund" and, collectively,
the "Funds"). The Funds commenced operations on December 30, 1992.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally
accepted accounting principles, which require management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of increase and decrease in
net assets from operations during the fiscal period. Actual results could
differ from those estimates.
The following summarizes the significant accounting policies of the Funds:
SECURITY VALUATION - The Trust determines the net asset value per share of
each Fund as of the close of regular trading on the New York Stock Exchange
(currently 4:00 P.M., Eastern time) on each Fund Business Day, as defined
in the Funds' prospectus. Securities with a maturity of 60 days or less are
valued at amortized cost. Securities for which market quotations are
readily available are valued using the last reported sales price provided
by independent pricing services. If no sale is reported, the mean of the
last bid and ask price is used. In the absence of readily available market
quotations, securities are valued at fair value using procedures approved
by the Trust's Board of Trustees. Investments in other open end investment
companies are valued at net asset value.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - Dividend income is recorded
on the ex-dividend date. Interest income is recorded as earned. Security
transactions are recorded on a trade date basis. Realized gain and loss on
investments sold is recorded on the basis of identified cost.
DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income, if
any, are declared and paid quarterly on the Funds. Capital gain
distributions, if any, are distributed to shareholders at least annually.
Distributions are based on amounts calculated in accordance with applicable
federal income tax regulations, which may differ from generally accepted
accounting principles. 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 Funds intend to qualify each year as regulated
investment companies and distribute all their taxable income. In addition,
by distributing in each calendar year substantially all their net
investment income, capital gain and certain other amounts, if any, the
Funds will not be subject to a federal excise tax. Therefore, no federal
income or excise tax provision is required.
19
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------
EXPENSE ALLOCATION - The Trust accounts separately for the assets and
liabilities and operations of each Fund. Expenses that are directly
attributable to more than one Fund are allocated among the respective Fund
based on net assets.
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
The investment adviser to the Funds is Cutler & Company, LLC ("Adviser").
Pursuant to an Investment Advisory Agreement, the Adviser receives an
advisory fee from each Fund at an annual rate of 0.75% of each Fund's
average daily net assets.
Forum Administrative Services, LLC ("FAdS") serves as each Fund's
administrator for which it receives compensation at an annual rate of 0.10%
of each Fund's average daily net assets.
Forum Shareholder Services, LLC ("FSS"), an affiliate of FAdS, serves as
each Fund's transfer agent and dividend disbursing agent, for which it
receives a fee of $12,000 per year, per Fund, plus certain other fees and
expenses.
Forum Accounting Services, LLC ("FAcS"), an affiliate of FAdS, serves as
the fund accountant for each Fund, for which it receives a fee of $36,000
per year, per Fund, subject to adjustments for the number and type of
portfolio transactions.
Forum Fund Services, LLC, a registered broker-dealer and an affiliate of
FAdS, acts as the distributor for each Fund for which it receives no
compensation.
Forum Trust, LLC ("Forum Trust"), an affiliate of FAdS, serves as each
Fund's custodian and may employ subcustodians to provide custody of a
Fund's assets. For its services, Forum Trust is entitled to receive
compensation at an annual rate of 0.01% of each Fund's average daily net
assets (this fee decreases if the Fund assets exceed $1 billion), plus
certain other fees and expenses.
NOTE 4. WAIVER OF FEES
The Adviser voluntarily waived fees of $54,255 for the Cutler Value Fund
for the year ended June 30, 2001.
NOTE 5. SECURITIES TRANSACTIONS
The cost of securities purchased and the proceeds from sales of securities
(excluding short-term securities) for the year ended June 30, 2001, were as
follows:
COST OF PURCHASES PROCEEDS FROM SALES
----------------- -------------------
Cutler Core Fund ........... $55,095,717 $59,305,595
Cutler Value Fund .......... 16,204,020 20,291,269
20
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
NOTES TO FINANCIAL STATEMENTS (concluded)
--------------------------------------------------------------------------------
For federal income tax cost purposes, the tax basis of investment
securities owned, the aggregate gross unrealized appreciation and the
aggregate gross unrealized depreciation as of June 30, 2001, were as
follows:
NET
UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
---------- ------------ ------------ -------------
Cutler Core Fund ... $58,046,337 $5,245,772 $(7,721,741) $(2,475,969)
Cutler Value Fund .. 24,220,603 3,095,998 (1,544,375) 1,551,624
Cutler Value Fund has a capital loss carryover of $406,598 as of June 30,
2001 which will expire in June 2009 and that is available to offset future
capital gains. Cutler Value Fund has a current year deferred post-October
capital loss of $33,750. This loss will be realized for tax purposes on the
first day of the following tax year.
21
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
SUPPLEMENTARY INFORMATION (unaudited)
--------------------------------------------------------------------------------
FEDERAL TAX STATUS OF DIVIDENDS DECLARED DURING THE FISCAL YEAR
Income Dividends - All the income and any short-term capital gain dividends paid
by each Fund were ordinary income for federal income tax purposes. The
percentage of income dividends that were eligible for the corporate dividends
received deduction in Cutler Core Fund and Cutler Value Fund was 100.00%.
Capital Gain Dividends - The Cutler Core Fund and the Cutler Value Fund declared
long term capital gain dividends of $15,155,924 and $513,197, respectively, for
the fiscal year ended June 30, 2001.
22
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
Board of Trustees and Shareholders,
The Cutler Trust:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of The Cutler Trust (the "Trust"), consisting of
the Cutler Core Fund and the Cutler Value Fund, as of June 30, 2001, the related
statements of operations for the year then ended, the statements of changes in
net assets for the two years ended June 30, 2001 and 2000, and the financial
highlights for each of the five years ended June 30, 2001. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at June 30, 2001 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed alternative
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Trust as of June
30, 2001, the results of their operations, the changes in their net assets, and
their financial highlights for the periods then ended in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 3, 2001
23
<PAGE>
--------------------------------------------------------------------------------
THE CUTLER TRUST
TRUSTEES OF THE CUTLER TRUST
JUNE 30, 2001
--------------------------------------------------------------------------------
[PICTURE] KENNETH R. CUTLER
Chairman of the The Cutler Trust and member of Investment
Committee of Cutler & Compnay, LLC, Investment Adviser to both
Funds
[PICTURE] JOHN Y. KEFFER
Sole shareholder and director of Forum Financial Group, LLC,
which owns Forum Administrative Services, LLC, Forum Shareholder
Services, LLC, Forum Accounting Services, LLC, Forum Fund
Services, LLC and Forum Trust, LLC.
[PICTURE] BROOKE R. ASHLAND
Chief Executive Officer, Cutler & Company, LLC, Investment
Adviser to both Funds.
[PICTURE] DR. HATTEN S. YODER, JR.
Chairman Emeritus, Geophysical Laboratory, Carnegie Institute of
Washington, and consultant to the Los Alamos National Laboratory.
A member of the National Academy of Sciences, and many national
and international scientific bodies.
[PICTURE] ROBERT B. WATTS, JR.
Attorney in private practice. Formerly a senior level officer,
counsel and corporate secretary with over 25 years of corporate,
divisional and board level experience with two Fortune 100
companies.
24
<PAGE>
This Page Intentionally Left Blank
<PAGE>
This Page Intentionally Left Blank
<PAGE>
This Page Intentionally Left Blank
</TEXT>
</DOCUMENT>