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Forward Funds, et al. – ‘485APOS’ on 2/13/08

On:  Wednesday, 2/13/08, at 4:02pm ET   ·   Private-to-Public:  Document/Exhibit ¶  –  Release Delayed   ·   Accession #:  1193125-8-29269   ·   File #s:  33-48940, 811-06722

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/13/08  Forward Funds                     485APOS¶              23:4.3M                                   Donnelley … Solutions/FA
          → Forward Asia Ex-Japan Equities Fund ⇒ Class A — Class C — Institutional Class (FFASX) — Investor Class (FFAEX)
          → Forward Banking & Finance Fund ⇒ Class A (HSSAX) — Class C (HSSCX) — Institutional Class  — Investor Class (FFBFX) 
          → Forward Eastern Europe Equities Fund ⇒ Class A — Class C — Institutional Class (FEEIX) — Investor Class (FEEEX)
          → Forward Focus Fund ⇒ Class A (FFLMX) — Class C  — Institutional Class (FFLFX) — Investor Class (FLFRX) 
          → Forward Global Dividend Fund ⇒ Class A (FFLAX) — Class C  — Institutional Class (FFLSX) — Investor Class (FFLRX)
          → Forward Growth Fund ⇒ Class A (HSPGX) — Class C (HSPCX) — Institutional Class (FGROX)  — Investor Class (FFGRX) 
          → Forward Mini-Cap Fund ⇒ Class A  — Class C  — Institutional Class (FFMIX) — Investor Class (FFHMX)
          → Forward Opportunities Fund ⇒ Class A (HSYTX) — Class C (HSYCX) — Institutional Class — Investor Class 
          → Forward Small Cap Equity Fund ⇒ Class A (FFHAX) — Class C  — Institutional Class (FFHIX) — Investor Class (FFSCX)
          → Salient EM Corporate Debt Fund ⇒ Class A (FFXAX) — Class C (FFXCX) — Institutional Class (FFXIX) — Investor Class (FFXRX)
          → Salient EM Dividend Signal Fund ⇒ Class A (FEMAX)  — Class C  — Institutional Class (PTEMX) — Investor Class (PGERX)
          → Salient International Dividend Signal Fund ⇒ Class A (FFDAX)  — Class C (FINCX)  — Institutional Class (FFIEX) — Investor Class (FFINX)
          → Salient International Small Cap Fund ⇒ Class A (FFIAX) — Class C  — Institutional Class (PTSCX) — Investor Class (PISRX)
          → Salient Real Estate Fund ⇒ Class A (KREAX)  — Class C (KRECX)  — Institutional Class (FPREX)  — Investor Class (FFREX)
          → Salient Tactical Muni & Credit Fund ⇒ Class A (FLSLX) — Class C (FLSFX)  — Institutional Class (FLSIX)  — Investor Class (FLSRX) 
          → Sierra Club Stock Fund ⇒ Class A (FSUSX) — Class C  — Institutional Class — Investor Class (SCFSX)

Document/Exhibit                   Description                      Pages   Size 

 1: 485APOS     Post-Effective Amendment                            HTML   2.84M 
23: CORRESP   ¶ Comment-Response or Other Letter to the SEC         HTML     26K 
 2: EX-99.(A)(2)  Revised Schedule A                                HTML     19K 
 3: EX-99.(D)(1)  Amended and Restated Investment Management        HTML     50K 
                Agreement                                                        
 4: EX-99.(D)(11)  Investment Sub-Advisory Agreement                HTML     53K 
 5: EX-99.(H)(3)(E)  Revised Exhibit A-1 and Exhibit B-1            HTML     45K 
 6: EX-99.(H)(4)(A)  Amended and Restated Shareholder Services      HTML     18K 
                Plan                                                             
 7: EX-99.(H)(5)(A)  Expense Limitation Agreement for the Forward   HTML     18K 
                Int'L Equity(Investor Class Shares)                              
 8: EX-99.(H)(5)(B)  Expense Limitation Agreement for the Forward   HTML     18K 
                Int'L Equity (Inst'L Class Shares)                               
 9: EX-99.(H)(5)(C)  Expense Limitation Agreement - Forward Global  HTML     18K 
                Emerging Markets Fund (Investor)                                 
10: EX-99.(H)(5)(D)  Expense Limitation Agreement - Forward Global  HTML     18K 
                Emerging Markets (Institutional)                                 
11: EX-99.(H)(5)(E)  Expense Limitation Agreement - Forward Legato  HTML     18K 
                Fund (Institutional)                                             
12: EX-99.(H)(5)(F)  Expense Limitation Agreement - Forward Legato  HTML     18K 
                Fund (Class A)                                                   
13: EX-99.(H)(5)(G)  Expense Limitation Agreement - Forward Large   HTML     18K 
                Cap Equity (Class A)                                             
14: EX-99.(H)(5)(H)  Expense Limitation Agreement - Forward Large   HTML     18K 
                Cap Equity (Investor Class)                                      
15: EX-99.(H)(5)(I)  Expense Limitation Agreement - Forward Large   HTML     18K 
                Cap Equity (Institutional)                                       
16: EX-99.(H)(5)(X)  Expense Limitation Agreement - Forward         HTML     18K 
                Long/Short Credit Analysis Fund (Class A)                        
17: EX-99.(H)(5)(Y)  Expense Limitation Agreement - Forward         HTML     18K 
                Long/Short Credit Analysis (Class C)                             
18: EX-99.(M)(3)  Distribution Services Agreement (Rule 12B-1       HTML     21K 
                Plan)                                                            
19: EX-99.(M)(4)(B)  Amended Appendix A to the Distribution Plan    HTML     11K 
                (Investor Class)                                                 
20: EX-99.(M)(5)(B)  Amended Appendix A to the Distribution Plan    HTML     11K 
                (Class A)                                                        
21: EX-99.(M)(7)(B)  Amended Appendix A to the Distribution Plan    HTML     11K 
                (Class C)                                                        
22: EX-99.(N)   Multiple Class Plan Pursuant to Rule 18F-3          HTML     24K 

Table of Contents

As filed with the Securities and Exchange Commission on February 13, 2008

1933 Act Registration No. 033-48940

1940 Act Registration No. 811-06722

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO.

POST-EFFECTIVE AMENDMENT NO. 46

AND/OR

REGISTRATION STATEMENT

UNDER

THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 46

FORWARD FUNDS

(Exact Name of Registrant as Specified in Charter)

433 California Street, 11^th Floor

San Francisco, California 94104

(Address of Principal Executive Office) (Zip Code)

Registrant’s Telephone Number, including Area Code: 1-800-999-6809

J. ALAN REID, JR.

Forward Funds

433 California Street, 11^th Floor

San Francisco, California 94104

(Name and address of agent for service of process)

COPIES TO:

DOUGLAS P. DICK

Dechert LLP

4675 MacArthur Court, Suite 1400

Newport Beach, California 92660-8842

(Name and address of agent for service of process)

It is proposed that this filing will become effective:

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a previously filed post-effective amendment

Table of Contents

EMERGING MARKETS

Forward Global Emerging Markets Fund

Forward Eastern Europe Equities Fund

Forward Asia Ex-Japan Equities Fund

INTERNATIONAL

Forward International Equity Fund

Forward International Small Companies Fund

CORE

Forward Large Cap Equity Fund

SMALL CAP

Forward Emerald Banking and Finance Fund

Forward Emerald Growth Fund

Forward Hoover Small Cap Equity Fund

Forward Hoover Mini-Cap Fund

Forward Legato Fund

ALTERNATIVE STRATEGIES

Forward Long/Short Credit Analysis Fund

Forward International Fixed Income Fund

PROSPECTUS

CLASS A SHARES

CLASS C SHARES

May 1, 2008

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. It is a criminal offense to say otherwise.

Forward Funds, like any other mutual funds, try to meet their stated investment goals but there is no guarantee that the goals will be met. Investments in the Funds are not bank deposits; they are not insured by the FDIC, the Federal government or any other agency.

Forward Funds also offers Institutional Class and Investor Class shares and three other portfolios of the Forward Funds by separate Prospectuses, which are available upon request.

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FORWARD GLOBAL EMERGING MARKETS FUND

OBJECTIVE

The Forward Global Emerging Markets Fund seeks to achieve long-term growth of capital. There is no guarantee that the Fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY - INVESTING PRIMARILY IN EQUITY SECURITIES OF COMPANIES IN EMERGING MARKET COUNTRIES

The Forward Global Emerging Markets Fund seeks to achieve its investment objective by investing at least 80% of its net assets plus borrowings for investment purposes, if any, in the equity securities of emerging market companies. This investment policy and the name of the Fund with respect to emerging markets companies may not be changed without at least 60 days’ prior written notice to shareholders. The Fund normally invests in at least fifteen but not fewer than eight emerging market countries. Equity securities include common and preferred stocks, investment company shares, convertible debt securities, warrants, subscription rights and depositary receipts for foreign stocks. The Fund may invest in securities of any market capitalization.

Emerging market countries are those identified as developing or emerging countries by the World Bank, International Finance Corporation or United Nations or countries not listed in the Morgan Stanley Capital International World Index. Currently, emerging market countries may include those in Latin America, Southeast Asia, Africa, Eastern Europe and the Middle East.

Emerging market stocks means equity securities:

In allocating the Fund’s assets among emerging market countries, the sub-advisor uses a proprietary database to screen for countries that meet the following standards:

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FORWARD GLOBAL EMERGING MARKETS FUND

In selecting individual emerging market stocks, the sub-advisor looks for companies with one or more of the following:

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FORWARD GLOBAL EMERGING MARKETS FUND?

As with any mutual fund investment, an investment in the Forward Global Emerging Markets Fund may cause you to lose some or all of the money you invested. Because the securities in which the Forward Global Emerging Markets Fund invests may decrease in value, the net asset value of the Fund and the value of your investment may also decrease. You should consider your own investment goals, time horizon and risk tolerance before investing in the Forward Global Emerging Markets Fund.

Emerging market stocks and foreign securities may offer greater investment value, but they may present greater investment risks than investing in the securities of U.S. companies. These risks include greater likelihood of economic, political or social instability, currency fluctuations, less liquid and more volatile stock markets, the contagious effect of market or economic setbacks in one country on another emerging market country, possible governmental restrictions on currency conversions or trading, difficulty in accurately valuing emerging market stocks or selling them at their fair value, especially in down markets, a lack of government regulation and different legal systems, immature economic structures, less regulated trading environments and the availability of less information about emerging market companies because of less rigorous accounting and regulatory standards.

The Fund invests in the equity securities of companies, which exposes the Fund and its shareholders to the risks associated with investing in common stocks. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect an individual company’s performance, such as the strength of its management or the demand for its product or services.

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FORWARD GLOBAL EMERGING MARKETS FUND

If a security is denominated in a foreign currency, the value of the security fluctuates if there is a change in currency exchange rates or exchange control regulations. Adverse currency fluctuations will reduce the value of the Fund’s shares. Costs are incurred by the Fund in connection with conversions between currencies. Currency risks are greater in lesser developed markets and can be unpredictably affected by external events. Fund managers are authorized to hedge against currency risks but are not required to do so and may choose not to do so because of the cost or for other reasons. In accordance with its investment philosophy, the Fund’s sub-advisor generally chooses not to hedge the Fund’s currency exposure.

PERFORMANCE HISTORY

The following bar chart shows the annual total return of the Institutional Class shares, which are not offered in this Prospectus, of the Fund for the years indicated, together with the best and worst quarters during those years. Returns of the Institutional Class shares are shown because Class A and Class C shares were not offered during the period shown. Class A and Class C shares would have similar annual returns because all Classes of shares are invested in the same portfolio of securities, although annual returns will differ to the extent the Classes do not have the same expenses. Currently, the annual expense ratio of the Institutional Class shares is lower than the estimated expense ratio of the Class A and Class C shares. Accordingly, performance would have been lower if Class A or Class C share expenses were reflected. In addition, the returns do not reflect the Class A shares’ maximum 5.75% sales charge (load), which would reduce performance. If the sales charge were reflected, returns would be less than those shown.

The accompanying table gives an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual returns for one year, five years, ten years, as applicable and since inception compare with those of a broad measure of market performance. The returns assume reinvestment of dividends and distributions. Past performance (before and after taxes) is not necessarily an indication of future performance.

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FORWARD GLOBAL EMERGING MARKETS FUND

The Institutional Class of the Pictet Global Emerging Markets Fund were reorganized into the Institutional Class of the Forward Global Emerging Markets Fund on September 15, 2004. Performance figures shown below for periods before September 15, 2004 represent performance of the Institutional Class of Pictet Global Emerging Markets Fund.

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FORWARD GLOBAL EMERGING MARKETS FUND

FUND FEES AND EXPENSES

The following information describes the fees and expenses that you may pay if you buy and hold shares of the Forward Global Emerging Markets Fund.

Shareholder Fees

As an investor in Class A shares of the Fund, you will pay a maximum sales charge (load) on purchases equal to 5.75% of the offering price. As an investor in Class C shares of the Fund, you will not pay a sales charge on the purchase price. However, you will pay a deferred sales charge up to a maximum of 1% on shares held for less than two years after purchase.

Annual Fund Operating Expenses

Annual fund operating expenses are paid directly out of the Fund’s assets. These expenses are not charged directly to shareholder accounts. They are expressed as a ratio, which is a percentage of average daily net assets.

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FORWARD GLOBAL EMERGING MARKETS FUND

EXAMPLES

These Examples are intended to help you compare the costs of investing in the Forward Global Emerging Markets Fund with the costs of investing in other mutual funds.

The Examples assume that you invest $10,000 in the Class A shares or Class C shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Fund’s total annual operating expenses remain the same and that the contractual fee waiver is in place for the first year. Although actual costs may be higher or lower, based on these assumptions your costs would be:

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FORWARD EASTERN EUROPE EQUITIES FUND

OBJECTIVE

The Forward Eastern Europe Equities Fund seeks to achieve long-term growth of capital. There is no guarantee that the Fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY - INVESTING PRIMARILY IN EQUITY SECURITIES OF COMPANIES IN EMERGING EUROPEAN COUNTRIES

The Forward Eastern Europe Equities Fund seeks to achieve its investment objective by investing at least 80% of its net assets plus borrowings for investment purposes, if any, in the equity securities of companies located in the emerging markets of Europe (“Eastern Europe” countries). This investment policy and the name of the Fund with respect to Eastern European equity securities may not be changed without at least 60 days’ prior written notice to shareholders. The Fund normally invests in at least eight Eastern Europe countries but may, under certain circumstances, invest in as few as six countries. Equity securities include common and preferred stocks, investment company shares, convertible debt securities, warrants, subscription rights and depositary receipts for foreign stocks. The Fund may invest in securities of any market capitalization.

Currently, Eastern Europe countries include Estonia, Latvia, Lithuania, Czech Republic, Hungary, Poland, Slovakia, Slovenia, Republic of Macedonia, Serbia and Montenegro, Bosnia and Herzegovina, Bulgaria, Albania, Croatia, Russia, Belarus, Ukraine, Romania, Moldavia and Turkey. A company generally will be considered to be located in a particular country if it meets one or more of the following criteria: (i) the issuer of the security is organized under the laws of, or maintains its principal place of business in, the country; (ii) the securities are traded principally in the country; or (iii) during the company’s most recent fiscal year, it derived at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed in the country or has at least 50% of its assets in that country.

In allocating the Fund’s assets among Eastern Europe countries, the sub-advisor uses a proprietary database to screen for countries that meet the following standards:

In selecting individual Eastern Europe stocks, the sub-advisor looks for companies with one or more of the following:

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The Fund invests a substantial amount of its assets in foreign investments that are denominated in other currencies besides the U.S. dollar and can be affected by fluctuations in exchange rates.

For hedging purposes, to reduce the risks of fluctuating exchange rates and to generate returns uncorrelated to the other strategies employed, the Fund may enter into forward foreign currency exchange contracts, which obligate a party to buy or sell a specific currency on a future date at a fixed price. The Fund “locks in” an exchange rate. The Fund may also invest in options on foreign currencies, foreign currency futures and options and foreign currency exchange-related securities like foreign currency warrants and other instruments linked to foreign currency exchange rates. There can be no assurance that the Fund will enter into currency transactions for hedging or other purposes or that such transactions will be successful if utilized.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FORWARD EASTERN EUROPE EQUITIES FUND?

As with any mutual fund investment, an investment in the Forward Eastern Europe Equities Fund may cause you to lose some or all of the money you invested. Because the securities in which the Fund invests may decrease in value, the net asset value of the Fund and the value of your investment may also decrease. You should consider your own investment goals, time horizon and risk tolerance before investing in the Fund.

Emerging market stocks and foreign securities may offer greater investment value, but they may present greater investment risks than investing in the securities of U.S. companies. These risks include greater likelihood of economic, political or social instability, currency fluctuations, less liquid and more volatile stock markets, the contagious effect of market or economic setbacks in one country on another emerging market country, possible governmental restrictions on currency conversions or trading, difficulty in accurately valuing emerging market securities or selling them at their fair value, especially in down markets, a lack of government regulation and different legal systems, immature economic structures, less regulated trading environments and the availability of less information about emerging market companies because of less rigorous accounting and regulatory standards.

The Fund concentrates its investments in companies located in Eastern Europe. Political and economic structures in many Eastern European countries are in their infancy and developing rapidly. Such countries may lack the social, political and economic

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stability characteristics of more developed countries. Unanticipated political or social developments may affect the value of the Fund’s investment in this region.

The securities markets in Eastern European countries may be small and inexperienced with less government supervision and regulation of stock exchanges and more limited trading volume than in securities markets of more developed countries. In addition, brokerage commissions and other fees generally are higher for securities traded in these markets. As a result, the Fund’s investments in these markets may be more illiquid and more volatile than investments in more developed countries. There may be little financial or accounting information available with respect to companies located in certain Eastern European countries and it therefore may be difficult to assess the value or prospects of an investment in such companies. In addition, it may be more difficult to obtain prices on portfolio securities from independent sources. These factors may make it more difficult for the Fund to calculate an accurate net asset value on a daily basis.

Eastern European countries have failed in the past to recognize private property rights and at times have nationalized or expropriated the assets of private companies. The procedures and rules governing transactions and custody (holding of the Fund’s assets) in these countries also may involve delays in payment, delivery or recovery of money or investments.

Many of the countries in Eastern Europe experienced very high rates of inflation, particularly in the early 1990s when central planning was first being replaced by the capitalist free market system. As a consequence, the exchange rates of such countries were devalued relative to the U.S. dollar. Although the inflation in such countries has generally improved significantly since that time, there can be no assurance that such improvement will be sustained and there continues to be the risk of loss arising from foreign currency depreciation.

The Fund invests in the equity securities of companies, which exposes the Fund and its shareholders to the risks associated with investing in common stock. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect an individual company’s performance, such as the strength of its management or the demand for its product or services.

If a security is denominated in a foreign currency, the value of the security fluctuates if there is a change in currency exchange rates relative to the U.S. dollar or exchange control regulations. Adverse currency fluctuations will reduce the value of the Fund’s shares, which are denominated in U.S. dollars. Costs are incurred by the Fund in connection with conversions between currencies. Currency risks are greater in lesser developed markets and can be unpredictably affected by external events. The sub-advisor is authorized to hedge against currency risks but is not required to do so and may choose not to do so because of the cost or for other reasons. Further, there is no assurance that attempts to hedge currency risk will be successful if utilized.

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FORWARD EASTERN EUROPE EQUITIES FUND

PERFORMANCE HISTORY

The Fund began offering shares on December 26, 2007 and therefore does not have a full calendar year of investment returns. Once the Fund has performance for at least one calendar year, a bar chart and performance table will be included in the Prospectus.

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FORWARD EASTERN EUROPE EQUITIES FUND

FUND FEES AND EXPENSES

The following information describes the fees and expenses that you may pay if you buy and hold shares of the Forward Eastern Europe Equities Fund.

Shareholder Fees

As an investor in Class A shares of the Fund, you will pay a maximum sales charge (load) on purchases equal to 5.75% of the offering price. As an investor in Class C shares of the Fund, you will not pay a sales charge on the purchase price. However, you will pay a deferred sales charge up to a maximum of 1% on shares held for less than two years after purchase.

Annual Fund Operating Expenses

Annual fund operating expenses are paid directly out of the Fund’s assets. These expenses are not charged directly to shareholder accounts. They are expressed as a ratio, which is a percentage of average daily net assets.

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EXAMPLES

These Examples are intended to help you compare the costs of investing in the Forward Eastern Europe Equities Fund with the costs of investing in other mutual funds.

The Examples assume that you invest $10,000 in the Class A shares or Class C shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Fund’s total annual operating expenses remain the same and that the contractual fee waiver is in place for the first year. Although actual costs may be higher or lower, based on these assumptions your costs would be:

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FORWARD ASIA EX-JAPAN EQUITIES FUND

OBJECTIVE

The Forward Asia Ex-Japan Equities Fund seeks to achieve long-term growth of capital. There is no guarantee that the Fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY - INVESTING PRIMARILY IN EQUITY SECURITIES OF COMPANIES IN ASIAN (EX-JAPAN) COUNTRIES

The Forward Asia Ex-Japan Equities Fund seeks to achieve its investment objective by investing at least 80% of its net assets plus borrowings for investment purposes, if any, in the equity securities of companies located in Asia, but not including companies located in Japan. This investment policy and the name of the Fund with respect to Asian equity securities may not be changed without at least 60 days’ prior written notice to shareholders. Equity securities include common and preferred stocks, investment company shares, convertible debt securities, warrants, subscription rights and depositary receipts for foreign stocks. The Fund may invest in securities of any market capitalization.

The Fund normally invests in at least ten Asian countries but may, under certain circumstances, invest in as few as seven countries. The Fund’s sub-advisor has broad discretion to invest in securities of companies that it considers to be located in Asia, including emerging market countries. The sub-advisor may invest in emerging market countries located in Asia without limitation. A company generally will be considered to be located in a particular country if it meets one or more of the following criteria: (i) the issuer of the security is organized under the laws of, or maintains its principal place of business in, the country; (ii) the securities are traded principally in the country; or (iii) during the company’s most recent fiscal year, it derived at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed in the country or has at least 50% of its assets in that country.

In allocating the Fund’s assets among Asian countries, the sub-advisor uses a proprietary database to screen for countries that meet the following standards:

In selecting individual Asian stocks, the sub-advisor looks for companies with one or more of the following:

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FORWARD ASIA EX-JAPAN EQUITIES FUND

The Fund invests a substantial amount of its assets in foreign investments that are denominated in currencies other than the U.S. dollar and can be affected by fluctuations in exchange rates.

For hedging purposes, to reduce the risks of fluctuating exchange rates and to generate returns uncorrelated to the other strategies employed, the Fund may enter into forward foreign currency exchange contracts, which obligate a party to buy or sell a specific currency on a future date at a fixed price. The Fund “locks in” an exchange rate. The Fund may also invest in options on foreign currencies, foreign currency futures and options and foreign currency exchange-related securities like foreign currency warrants and other instruments linked to foreign currency exchange rates. There can be no assurance that the Fund will enter into currency transactions for hedging or other purposes or that such transactions will be successful if utilized.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FORWARD ASIA EX-JAPAN EQUITIES FUND?

As with any mutual fund investment, an investment in the Forward Asia Ex-Japan Equities Fund may cause you to lose some or all of the money you invested. Because the securities in which the Fund invests may decrease in value, the net asset value of the Fund and the value of your investment may also decrease. You should consider your own investment goals, time horizon and risk tolerance before investing in the Fund.

Emerging market stocks and foreign securities may offer greater investment value, but they may present greater investment risks than investing in the securities of U.S. companies. These risks include greater likelihood of economic, political or social instability, currency fluctuations, less liquid and more volatile stock markets, the contagious effect of market or economic setbacks in one country on another emerging market country, possible governmental restrictions on currency conversions or trading, difficulty in accurately valuing emerging market securities or selling them at their fair value, especially in down markets, a lack of government regulation and different legal systems, immature economic structures, less regulated trading environments and the availability of less information about emerging market companies because of less rigorous accounting and regulatory standards.

The Fund concentrates its investments in companies located in Asia (with the exception of Japan). Economies of countries in the Asia region differ from the U.S. economy in various ways such as rate of growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payment positions. Many of the

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countries in this region have relatively less developed markets compared to the markets of North America and Western European countries. A majority of Asian countries can be characterized as either developing or newly industrialized economies.

Many Asian economies are characterized by over-extension of credit, rising unemployment, rapid fluctuations in inflation, reliance on exports and less efficient markets. Many of the countries in Asia have experienced extreme volatility relative to the U.S. dollar. Holding securities in currencies that are devalued (or in companies whose revenues are substantially in currencies that are devalued) will decrease the value of the Fund. The legal systems in many Asian countries are still developing, making it more difficult to obtain and/or enforce judgments. Many of the countries in the Asian region are developing, both politically and economically, and may have relatively unstable governments and economies based on only a few commodities or industries.

The economies of many Asian countries are dependent on the economies of the United States, Europe and other Asian countries, and events in any of these economies could negatively impact the economies of Asian countries. Increased political and social instability in any Asian country could cause further economic and market uncertainty in the region, or result in significant downturns and volatility in the economies of Asian countries. In addition, as export-driven economies, the economies of countries in the Asian region are affected by developments in the economies of their principal trading partners. The companies in the Fund’s portfolio may react similarly to political, social and economic developments affecting this geographic region, which may result in more volatile Fund performance than a geographically diversified fund.

The Fund invests in the equity securities of companies, which exposes the Fund and its shareholders to the risks associated with investing in common stock. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Funds invests may experience periods of turbulence and instability and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect an individual company’s performance, such as the strength of its management or the demand for its product or services.

If a security is denominated in a foreign currency, the value of the security fluctuates if there is a change in currency exchange rates relative to the U.S. dollar or exchange control regulations. Adverse currency fluctuations will reduce the value of the Fund’s shares, which are denominated in U.S. dollars. Costs are incurred by the Fund in connection with conversions between currencies. Currency risks are greater in lesser developed markets and can be unpredictably affected by external events. The sub-advisor is authorized to hedge against currency risks but is not required to do so and may choose not to do so because of the cost or for other reasons. Further, there is no assurance that attempts to hedge currency risk will be successful if utilized.

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PERFORMANCE HISTORY

The Fund began offering shares on December 26, 2007 and therefore does not have a full calendar year of investment returns. Once the Fund has performance for at least one calendar year, a bar chart and performance table will be included in the Prospectus.

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FUND FEES AND EXPENSES

The following information describes the fees and expenses that you may pay if you buy and hold shares of the Forward Asia Ex-Japan Equities Fund.

Shareholder Fees

As an investor in Class A shares of the Fund, you will pay a maximum sales charge (load) on purchases equal to 5.75% of the offering price. As an investor in Class C shares of the Fund, you will not pay a sales charge on the purchase price. However, you will pay a deferred sales charge up to a maximum of 1% on shares held for less than two years after purchase.

Annual Fund Operating Expenses

Annual fund operating expenses are paid directly out of the Fund’s assets. These expenses are not charged directly to shareholder accounts. They are expressed as a ratio, which is a percentage of average daily net assets.

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EXAMPLES

These Examples are intended to help you compare the costs of investing in the Forward Asia Ex-Japan Equities Fund with the costs of investing in other mutual funds.

The Examples assume that you invest $10,000 in the Class A shares or Class C shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Fund’s total annual operating expenses remain the same and that the contractual fee waiver is in place for the first year. Although actual costs may be higher or lower, based on these assumptions your costs would be:

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FORWARD INTERNATIONAL EQUITY FUND

OBJECTIVE

The Forward International Equity Fund seeks to achieve high total return (capital appreciation and income). There is no guarantee that the Fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY - INVESTING IN INTERNATIONAL EQUITY SECURITIES

The Forward International Equity Fund seeks to achieve its investment objective by investing at least 80% of its net assets plus borrowings for investment purposes, if any, in the equity securities (depositary receipts, common and preferred stock and securities convertible into common or preferred stock) of companies organized or located outside of the United States. This investment policy and the name of the Fund with respect to equity securities may not be changed without at least 60 days’ prior written notice to shareholders. Even though some portfolio companies are based outside of the United States, their securities may be traded on U.S. securities markets and the Fund may purchase these securities. The Fund normally will invest its assets among at least fifteen but not fewer than eight countries throughout the world including countries considered to be emerging market countries. The Fund will not invest more than 25% of its net assets plus borrowings for investment purposes, if any, in emerging market companies. The sub-advisor has broad discretion to identify and invest in countries it considers to qualify as emerging markets. However, an emerging market will generally be considered as one located in any country that is defined as an emerging or developing economy by any of the following: the International Bank for Reconstruction and Development (e.g., the World Bank), including its various offshoots, such as the International Finance Corporation, or the United Nations or its authorities.

The Fund invests a substantial amount of its assets in foreign securities which are denominated in other currencies besides the U.S. dollar and can be affected by fluctuations in exchange rates.

For hedging purposes and to reduce the risks of fluctuating exchange rates, the Fund may enter into forward foreign currency exchange contracts, which obligate a party to buy or sell a specific currency on a future date at a fixed price. The Fund “locks in” an exchange rate. For hedging purposes, the Fund may also invest in options on foreign currencies, foreign currency futures and options and foreign currency exchange-related securities like foreign currency warrants and other instruments linked to foreign currency exchange rates. In accordance with its investment philosophy, the Fund’s sub-advisor generally chooses not to hedge the Fund’s currency exposure.

The Fund’s sub-advisor seeks to apply a highly disciplined, coherent and clearly defined approach to investment and construction of the Fund’s portfolio, and a style that is neither uniquely growth nor value as the sub-advisor believes that neither growth nor value characteristics alone are sufficient to analyze all companies at all times. The sub-advisor also seeks to invest in companies that are believed to be reasonably priced and to have good prospects for growth, and in securities the portfolio managers believe have the potential to outperform the Fund’s benchmark index. When considering stocks, the sub-advisor seeks to draw on its internal resources to assess industry dynamics, business franchise/management strategy, financial analysis and valuation.

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WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FORWARD INTERNATIONAL EQUITY FUND?

As with any mutual fund investment, an investment in the Forward International Equity Fund may cause you to lose some or all of the money you invested. Because the securities in which the Fund invests may decrease in value, the net asset value of the Fund and the value of your investment may also decrease. You should consider your own investment goals, time horizon and risk tolerance before investing in the Fund.

Investments in foreign securities may present more risk than investing in U.S. securities because of factors such as unstable international political and economic conditions, currency fluctuations, foreign controls on investment and currency exchange, withholding taxes, exit levies, a lack of adequate company information, less liquid and more volatile markets, a lack of government regulation and different legal systems. Investments in emerging markets involve even greater risks such as immature economic structures and less regulated trading environments.

If a security is denominated in a foreign currency, the value of the security fluctuates if there is a change in currency exchange rates or exchange control regulations. Adverse currency fluctuations will reduce the value of the Fund’s shares. Costs are incurred by the Fund in connection with conversions between currencies. Currency risks are greater in lesser developed markets and can be unpredictably affected by external events. The sub-advisor is authorized to hedge against currency risks but is not required to do so and may choose not to do so because of the cost or for other reasons. In accordance with its investment philosophy, the Fund’s sub-advisor generally chooses not to hedge the Fund’s currency exposure.

The Forward International Equity Fund invests primarily in the equity securities of companies, which exposes the Fund and its shareholders to the risks associated with investing in common stock. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect an individual company’s performance, such as the strength of its management or the demand for its product or services. The Fund’s sub-advisor follows a style of management focused on growth at a price believed reasonable based upon such factors as price-to-earnings valuations given varying growth rates or anticipated growth rates. If the market does not come to share the sub-advisor’s assessment of an investment’s long-term growth, the Fund may underperform other mutual funds or international stock indexes.

Smaller companies may offer greater investment value, but they may present greater investment risks than investing in the securities of large companies. These risks include greater price

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volatility, greater sensitivity to changing economic conditions and less liquidity than the securities of larger, more mature companies. Smaller companies can also have limited product lines, markets or financial resources and may not have sufficient management strength.

PERFORMANCE HISTORY

The following bar chart shows the annual total return of the Investor Class shares, which are not offered in this Prospectus, of the Fund for the years indicated, together with the best and worst quarters during those years. Returns of the Investor Class shares are shown because Class A and Class C shares were not offered during the period shown. Class A and Class C shares would have similar annual returns because all Classes of shares are invested in the same portfolio of securities, although annual returns will differ to the extent the Classes do not have the same expenses. Currently, the annual expense ratio of the Investor Class shares is lower than the estimated expense ratio of the Class A and Class C shares. Accordingly, performance would have been lower if Class A or Class C share expenses were reflected. In addition, the returns do not reflect the Class A shares’ maximum 5.75% sales charge (load), which would reduce performance. If the sales charge were reflected, returns would be less than those shown.

The accompanying table gives an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual returns for one year, five years, ten years, as applicable and since inception compare with those of a broad measure of market performance. The returns assume reinvestment of dividends and distributions. Past performance (before and after taxes) is not necessarily an indication of future performance.

Pictet Asset Management Limited has been the Fund’s sub-advisor since September 1, 2005. Prior to September 1, 2005, the Forward International Equity Fund was known as the Forward Hansberger International Growth Fund and the sub-advisor was Hansberger Global Investors, Inc. Prior to March 2000, the Fund was known as the International Equity Fund and its sub-advisor was Templeton Investment Counsel, Inc. Performance figures shown below for periods before September 1, 2005 represent performance of the prior sub-advisors to the Fund.

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FORWARD INTERNATIONAL EQUITY FUND

FUND FEES AND EXPENSES

The following information describes the fees and expenses that you may pay if you buy and hold shares of the Forward International Equity Fund.

Shareholder Fees

As an investor in Class A shares of the Fund, you will pay a maximum sales charge (load) on purchases equal to 5.75% of the offering price. As an investor in Class C shares of the Fund, you will not pay a sales charge on the purchase price. However, you will pay a deferred sales charge up to a maximum of 1% on shares held for less than two years after purchase.

Annual Fund Operating Expenses

Annual fund operating expenses are paid directly out of the Fund’s assets. These expenses are not charged directly to shareholder accounts. They are expressed as a ratio, which is a percentage of average daily net assets.

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FORWARD INTERNATIONAL EQUITY FUND

EXAMPLES

These Examples are intended to help you compare the costs of investing in the Forward International Equity Fund with the costs of investing in other mutual funds.

The Examples assume that you invest $10,000 in the Class A shares or Class C shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Fund’s total annual operating expenses remain the same and that the contractual fee waiver is in place for the first year. Although actual costs may be higher or lower, based on these assumptions your costs would be:

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FORWARD INTERNATIONAL SMALL COMPANIES FUND

OBJECTIVE

The Forward International Small Companies Fund seeks to achieve long-term growth of capital. There is no guarantee that the Fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY - INVESTING IN EQUITY SECURITIES OF COMPANIES WITH SMALL MARKET CAPITALIZATIONS LOCATED OUTSIDE THE UNITED STATES

The Forward International Small Companies Fund invests at least 80% of its net assets plus borrowings for investment purposes, if any, in equity securities of companies with small market capitalizations located outside the United States. This investment policy and the name of the Fund with respect to small companies may not be changed without at least 60 days’ prior written notice to shareholders. The Fund may invest up to 20% of its net assets plus borrowings for investment purposes, if any, in medium and large capitalization companies. The Fund normally will invest its assets among at least fifteen but not fewer than eight countries throughout the world including countries considered to be emerging market countries.

For the Fund, equity securities include common and preferred stocks, investment company shares, convertible debt securities, warrants, subscription rights and depositary receipts for foreign stocks.

The sub-advisor typically focuses its research on companies that are capitalized at less than $3.5 billion. The sub-advisor does not apply a strict minimum size test in determining which securities to purchase but rather looks to the liquidity of the security. As a result, the sub-advisor normally does not invest in companies with a market capitalization lower than $150 million, although it may do so.

The Fund’s sub-advisor uses a “bottom-up” approach to try to identify companies with outstanding investment potential. The objective is to identify approximately 120-130 top investment opportunities using a systematic approach to stock selection and portfolio construction. The selection process consists of three stages:

The Fund’s sub-advisor screens more than 10,000 companies to obtain a list of candidates for the next stage using screening parameters and other inputs. The sub-advisor uses both an absolute measure of value, based on returns to equity investors, and a relative measure, based on return on capital employed.

At the primary research stage, the sub-advisor conducts a detailed review of the investment candidate. Topics covered include strategy, operations, internal controls and management. The sub-advisor also undertakes a thorough review of financial statements focusing on balance sheet strength, operating performance and valuation.

Finally, at the stock selection stage, the sub-advisor constructs the portfolio using a team approach. The Fund’s exposure is monitored at the regional, sector and stock level.

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FORWARD INTERNATIONAL SMALL COMPANIES FUND

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FORWARD INTERNATIONAL SMALL COMPANIES FUND?

As with any mutual fund investment, an investment in the Forward International Small Companies Fund may cause you to lose some or all of the money you invested. Because the securities in which the Fund invests may decrease in value, the net asset value of the Fund and the value of your investment may also decrease. You should consider your own investment goals, time horizon and risk tolerance before investing in the Fund.

Smaller companies may offer greater investment value than larger companies, but they present greater investment risks than investing in the securities of larger companies. These risks include greater price volatility, greater sensitivity to changing economic conditions and less liquidity than the securities of larger, more mature companies. Smaller companies can also have limited product lines, markets or financial resources and may not have sufficient management strength.

Investments in foreign securities may present more risk than investing in U.S. securities because of factors such as unstable international political and economic conditions, currency fluctuations, foreign controls on investment and currency exchange, withholding taxes, exit levies, a lack of adequate company information, less liquid and more volatile markets, a lack of government regulation and different legal systems. Investments in emerging markets involve even greater risks such as immature economic structures and less regulated trading environments.

If a security is denominated in a foreign currency, the value of the security fluctuates if there is a change in currency exchange rates or exchange control regulations. Adverse currency fluctuations will reduce the value of the Fund’s shares. Costs are incurred by the Fund in connection with conversions between currencies. Currency risks are greater in lesser-developed markets and can be unpredictably affected by external events. The sub-advisor is authorized to hedge against currency risks but is not required to do so and may choose not to do so because of the cost or for other reasons. In accordance with its investment philosophy, the Fund’s sub-advisor generally chooses not to hedge the Fund’s currency exposure.

The Fund is generally expected to engage in frequent and active trading of portfolio securities to achieve its investment objective. A higher turnover rate (100% or more) will involve correspondingly greater transaction costs which will be borne directly by a Fund, may have an adverse impact on performance, and may increase the potential for more taxable distributions being paid to shareholders, including short-term capital gains, which are taxed at ordinary income rates.

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The Fund invests in the equity securities of companies, which exposes the Fund and its shareholders to the risks associated with investing in common stocks. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect an individual company’s performance, such as the strength of its management or the demand for its product or services.

PERFORMANCE HISTORY

The following bar chart shows the annual total return of the Class A shares of the Fund for the years indicated, together with the best and worst quarters during those years. The returns do not reflect the Class A shares’ maximum 5.75% sales charge (load), which would reduce performance.

The accompanying table gives an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual total returns for one year, five years, ten years, as applicable, and since inception compare with those of a broad measure of market performance. The returns assume reinvestment of dividends and distributions. Past performance of the Fund (before and after taxes) is not necessarily an indication of future performance. Returns for the Class C shares are not presented because the Class C shares were not offered during the periods shown.

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FUND FEES AND EXPENSES

The following information describes the fees and expenses that you may pay if you buy and hold shares of the Forward International Small Companies Fund.

Shareholder Fees

As an investor in Class A shares of the Fund, you will pay a maximum sales charge (load) on purchases equal to 5.75% of the offering price. As an investor in Class C shares of the Fund, you will not pay a sales charge on the purchase price. However, you will pay a deferred sales charge up to a maximum of 1% on shares held for less than two years after purchase.

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FORWARD INTERNATIONAL SMALL COMPANIES FUND

EXAMPLES

These Examples are intended to help you compare the costs of investing in the Forward International Small Companies Fund with the costs of investing in other mutual funds.

The Examples assume that you invest $10,000 in the Class A shares or Class C shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year and that the Fund’s total annual operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions your costs would be:

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FORWARD LARGE CAP EQUITY FUND

OBJECTIVE

The Forward Large Cap Equity Fund seeks to achieve high total return (capital appreciation and income). There is no guarantee that the Fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY - INVESTING IN EQUITY SECURITIES OF COMPANIES WITH LARGE MARKET CAPITALIZATIONS

The Forward Large Cap Equity Fund invests at least 80% of its net assets plus borrowings for investment purposes, if any, in common and preferred stock and securities convertible into common or preferred stock, of companies that have large capitalizations. This investment policy and the name of the Fund with respect to large cap equity securities may not be changed without at least 60 days’ prior written notice to shareholders. For purposes of the Fund, large capitalization companies include any company with a market capitalization equal to or greater than $5 billion. The Fund is a focused portfolio that typically holds 30-40 large capitalization equity securities.

The Fund’s investment strategy combines a disciplined investment process that consists of quantitative modeling techniques, fundamental analysis and risk management. By dynamically monitoring the risk/return profile of the Fund, the sub-advisor seeks to keep portfolio exposure to style and cap at appropriate levels. Security selection, which is the focus of the investment management process, seeks to position the Fund in large cap stocks exhibiting attractive earnings growth and valuation characteristics.

The sub-advisor regularly monitors the portfolio holdings. The sub-advisor will normally sell a stock, although the sub-advisor is not required to do so, when the stock exceeds predetermined valuation targets or when, in the sub-advisor’s opinion, it appears that fundamentals are not progressing as expected or are deteriorating.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FORWARD LARGE CAP EQUITY FUND?

As with any mutual fund investment, an investment in the Forward Large Cap Equity Fund may cause you to lose some or all of the money you invested. Because the securities in which the Fund invests may decrease in value, the net asset value of the Fund and the value of your investment may also decrease. You should consider your own investment goals, time horizon and risk tolerance before investing in the Fund.

The Fund invests in the equity securities of companies, which exposes the Fund and its shareholders to the risks associated with investing in common stock. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect an individual company’s performance, such as the strength of its management or the demand for its products or services.

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FORWARD LARGE CAP EQUITY FUND

PERFORMANCE HISTORY

The following bar chart shows the annual total return of the Class A shares of the Fund for the years indicated, together with the best and worst quarters during those years. The returns do not reflect the Class A shares’ maximum 5.75% sales charge (load), which would reduce performance.

The accompanying table gives an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual total returns for one year, five years, ten years, as applicable, and since inception compare with those of a broad measure of market performance. The returns assume reinvestment of dividends and distributions. Past performance of the Fund (before and after taxes) is not necessarily an indication of future performance. Returns for Class C shares are not presented because the Class C shares were not offered during the periods shown.

Piedmont Investment Advisors, LLC has been the Fund’s sub-advisor since July 11, 2007. From May 1, 2007 - July 10, 2007, Morgan Stanley Investment Management, Inc. was the Fund’s sub-advisor. Prior to May 1, 2007, the Fund was managed by Affinity Investment Advisors, LLC. Performance figures shown below for periods before July 11, 2007 represent performance of the prior sub-advisors to the Fund.

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FORWARD LARGE CAP EQUITY FUND

FUND FEES AND EXPENSES

The following information describes the fees and expenses that you may pay if you buy and hold shares of the Forward Large Cap Equity Fund.

Shareholder Fees

As an investor in Class A shares of the Fund, you will pay a maximum sales charge (load) on purchases equal to 5.75% of the offering price. As an investor in Class C shares of the Fund, you will not pay a sales charge on the purchase price. However, you will pay a deferred sales charge up to a maximum of 1% on shares held for less than two years after purchase.

Annual Fund Operating Expenses

Annual fund operating expenses are paid directly out of the Fund’s assets. These expenses are not charged directly to shareholder accounts. They are expressed as a ratio, which is a percentage of average daily net assets.

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FORWARD LARGE CAP EQUITY FUND

EXAMPLES

These Examples are intended to help you compare the costs of investing in the Forward Large Cap Equity Fund with the costs of investing in other mutual funds.

The Examples assume that you invest $10,000 in the Class A shares or Class C shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year, that the Fund’s total annual operating expenses remain the same and that the contractual fee waiver is in place for the first year. Although actual costs may be higher or lower, based on these assumptions your costs would be:

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FORWARD EMERALD BANKING AND FINANCE FUND

OBJECTIVE

The Forward Emerald Banking and Finance Fund seeks long-term growth through capital appreciation. Income is a secondary objective. There is no guarantee that the Fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY - INVESTING IN EQUITY SECURITIES OF COMPANIES PRINCIPALLY ENGAGED IN THE BANKING AND FINANCIAL SERVICES INDUSTRIES

To pursue its objectives, the Forward Emerald Banking and Finance Fund will, under normal circumstances, invest at least 80% of its net assets, plus borrowings for investment purposes, if any, in a non-diversified portfolio of equity securities of companies principally engaged in the banking or financial services industries. This investment policy and the name of the Fund with respect to banking and finance companies may not be changed without at least 60 days’ prior written notice to shareholders.

While the Fund can invest in companies of varying sizes, it will usually emphasize smaller companies: those with a market capitalization of less than $1.5 billion. In addition, under normal circumstances, the Fund will invest not less than 25% of its net assets plus borrowings for investment purposes, if any, in securities of companies principally engaged in the banking industry and not less than 25% of its net assets plus borrowings for investment purposes, if any, in securities of companies principally engaged in the financial services industry. For investment purposes, a company (or holding company) is defined as “principally engaged” in banking or financial services industries if:

Companies in the banking industry include U.S. commercial and industrial banking and savings institutions and their parent holding companies. Companies in the financial services industry include commercial and industrial finance companies, diversified financial services companies, investment banking, securities brokerage and investment advisory companies, real estate investment trusts, insurance and insurance holding companies, and leasing companies.

Under normal circumstances the Fund invests in common stocks, preferred stocks, and securities convertible into common and preferred stocks. The Fund utilizes a growth approach to choosing securities: the sub-advisor’s research staff conducts company-specific fundamental research analysis to attempt to identify companies whose earnings growth rate exceeds that of their peer group. Companies with a leadership position and competitive advantages in niche markets that do not receive significant coverage from other institutional investors are favored.

The Fund can invest in companies from a wide range of industries and of various sizes. This includes smaller companies. Smaller companies are those defined by the Fund’s sub-advisor as having a market capitalization equal to or less than that of the largest companies in the Russell 2000 Index.

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FORWARD EMERALD BANKING AND FINANCE FUND

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FORWARD EMERALD BANKING AND FINANCE FUND?

As with any mutual fund investment, an investment in the Forward Emerald Banking and Finance Fund may cause you to lose some or all of the money you invested. Because the securities in which the Fund invests may decrease in value, the net asset value of the Fund and the value of your investment may also decrease. Loss of money is a risk of investing in the Fund. You should consider your own investment goals, time horizon and risk tolerance before investing in the Fund. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

Smaller companies may offer greater investment value than larger companies, but they present greater investment risks than investing in the securities of larger companies. These risks include greater price volatility, greater sensitivity to changing economic conditions and less liquidity than the securities of larger, more mature companies. Smaller companies can also have limited product lines, markets or financial resources and may not have sufficient management strength.

The Fund invests in the equity securities of companies, which exposes the Fund and its shareholders to the risks associated with investing in common stocks. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability, and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect an individual company’s performance, such as the strength of its management or the demand for its products or services.

The Fund concentrates 80% or more of its total assets in securities of companies principally engaged in the banking or financial services industries, and invests at least 25% of its total assets in securities of companies in each industry. As a result, the Fund may be subject to greater risks than a portfolio without such a concentration. This is especially true with respect to the risks associated with regulatory developments in, or related to, the banking and financial services industries. The banking and financial services industries are comparatively narrow segments of the economy and, therefore, may experience greater volatility than funds investing in a broader range of industries. In addition, companies in these industries may be subject to additional risks such as increased competition within the sector or changes in legislation or government regulations affecting the banking and financial services industries. The value of the Fund’s shares is particularly vulnerable to factors affecting the banking and financial services industries, such as the availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, extensive government regulation and price competition.

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FORWARD EMERALD BANKING AND FINANCE FUND

PERFORMANCE HISTORY

The following bar chart shows the annual total return of the Class A shares of the Fund for the years indicated, together with the best and worst quarters during those years. The returns do not reflect the Class A shares’ maximum 5.75% sales charge (load), which would reduce performance.

The accompanying table gives an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual total returns for one year, five years, ten years, as applicable, and since inception compare with those of a broad measure of market performance. The returns assume reinvestment of dividends and distributions. Past performance of the Fund (before and after taxes) is not necessarily an indication of future performance.

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FORWARD EMERALD BANKING AND FINANCE FUND

FUND FEES AND EXPENSES

The following information describes the fees and expenses that you may pay if you buy and hold shares of the Forward Emerald Banking and Finance Fund.

Shareholder Fees

As an investor in Class A shares of the Fund, you will pay a maximum sales charge (load) on purchases equal to 5.75% of the offering price. As an investor in Class C shares of the Fund, you will not pay a sales charge on the purchase price. However, you will pay a deferred sales charge up to a maximum of 1% on shares held for less than two years after purchase.

Annual Fund Operating Expenses

Annual fund operating expenses are paid directly out of the Fund’s assets. These expenses are not charged directly to shareholder accounts. They are expressed as a ratio, which is a percentage of average daily net assets.

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FORWARD EMERALD BANKING AND FINANCE FUND

EXAMPLES

These Examples are intended to help you compare the costs of investing in the Forward Emerald Banking and Finance Fund with the costs of investing in other mutual funds.

The Examples assume that you invest $10,000 in the Class A shares or Class C shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year and that the Fund’s total annual operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions your costs would be:

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FORWARD EMERALD GROWTH FUND

OBJECTIVE

The Forward Emerald Growth Fund seeks long-term growth through capital appreciation. The Fund anticipates that its investment returns are likely to be in the form of capital appreciation rather than income. There is no guarantee that the Fund will achieve its objective.

PRINCIPAL INVESTMENT STRATEGY - INVESTING IN EQUITY SECURITIES OF COMPANIES WITH POTENTIAL FOR GROWTH

Under normal circumstances the Forward Emerald Growth Fund invests a minimum of 80% of its net assets plus borrowings for investment purposes, if any, in common stocks, preferred stocks, and securities convertible into common or preferred stocks. This investment policy may not be changed without at least 60 days’ prior written notice to shareholders.

The Fund utilizes a fundamental approach to choosing securities: the sub-advisor’s research staff conducts company-specific research analysis to identify companies whose earnings growth rate exceeds that of their peer group. Companies with perceived leadership positions and competitive advantages in niche markets and that do not receive significant coverage from other institutional investors are favored.

The Fund can invest in companies from a wide range of industries and of various sizes. This includes smaller companies. Smaller companies are defined by the Fund’s sub-advisor as those having a market capitalization equal to or less than that of the largest companies in the Russell 2000 Index. During periods of unusual market volatility, however, the Fund’s sub-advisor may find fewer investment opportunities in small company stocks and may invest predominantly in larger-capitalization stocks.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FORWARD EMERALD GROWTH FUND?

As with any mutual fund investment, an investment in the Forward Emerald Growth Fund may cause you to lose some or all of the money you invested. Because the securities in which the Fund invests may decrease in value, the net asset value of the Fund and the value of your investment may also decrease. You should consider your own investment goals, time horizon and risk tolerance before investing in the Fund.

Smaller companies may offer greater investment value than larger companies, but they may present greater investment risks than investing in the securities of larger companies. These risks include greater price volatility, greater sensitivity to changing economic conditions and less liquidity than the securities of larger, more mature companies. Smaller companies can also have limited product lines, markets or financial resources and may not have sufficient management strength.

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FORWARD EMERALD GROWTH FUND

The Fund invests in the equity securities of companies, which exposes the Fund and its shareholders to the risks associated with investing in common stock. These risks include the financial risk of selecting individual companies that do not perform as anticipated, the risk that the stock markets in which the Fund invests may experience periods of turbulence and instability and the general risk that domestic and global economies may go through periods of decline and cyclical change. Many factors affect an individual company’s performance, such as the strength of its management or the demand for its products or services.

PERFORMANCE HISTORY

The following bar chart shows the annual total return of the Class A shares of the Fund for the years indicated, together with the best and worst quarters during those years. The returns do not reflect the Class A shares’ maximum 5.75% sales charge (load), which would reduce performance.

The accompanying table gives an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual total returns for one year, five years, ten years, as applicable, and since inception compare with those of a broad measure of market performance. The returns assume reinvestment of dividends and distributions. Past performance of the Fund (before and after taxes) is not necessarily an indication of future performance.

The performance results shown include unusually high results achieved in 1999 due to the high performance of equity stocks in general, unusually high IPO profits, and stocks of particular industries in which the Fund invested. These unusually favorable conditions were not sustainable, did not continue to exist, and such performance results may not be repeated in the future.

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FORWARD EMERALD GROWTH FUND

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FORWARD EMERALD GROWTH FUND

FUND FEES AND EXPENSES

The following information describes the fees and expenses that you may pay if you buy and hold shares of the Forward Emerald Growth Fund.

Shareholder Fees

As an investor in Class A shares of the Forward Emerald Growth Fund, you will pay a maximum sales charge (load) on purchases equal to 5.75% of the offering price. As an investor in Class C shares of the Fund, you will not pay a sales charge on the purchase price. However, you will pay a deferred sales charge up to a maximum of 1% on shares held for less than two years after purchase.

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FORWARD EMERALD GROWTH FUND

EXAMPLES

These Examples are intended to help you compare the costs of investing in the Forward Emerald Growth Fund with the costs of investing in other mutual funds.

The Examples assume that you invest $10,000 in the Class A shares or Class C shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Examples also assume that your investment has a 5% return each year and that the Fund’s total annual operating expenses remain the same. Although actual costs may be higher or lower, based on these assumptions your costs would be: