Performance

The performance quoted represents past performance, does not guarantee future results and current performance may be lower or higher than the data quoted. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data current to the most recent month end may be obtained at www.forwardfunds.com. The returns assume reinvestment of dividends and distributions, if any. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

¹ As of December 1, 2008, the Fund is directly managed by Forward Management, LLC, the Advisor to the Forward Funds. Performance figures and other portfolio data shown for periods prior to December 1, 2008, do not reflect Forward Management’s performance or strategy.

² Unhedged USD.

³The Forward Tactical Growth Fund was launched on September 14, 2009, and has a limited operating history.

^(a)The Fund’s investment advisor has contractually agreed to waive a portion of its fees and reimburse other expenses until April 30, 2010, in amounts necessary to limit the Fund’s operating expenses (exclusive of brokerage costs, interest, taxes, dividends, acquired fund fees and expenses, and extraordinary expenses) for the Fund’s Investor Class shares to the annual rate (as a percentage of the Fund’s average daily net assets) listed.

^(b) The Fund’s investment advisor has contractually agreed to waive a portion of its fees and reimburse other expenses until April 30, 2010, in amounts necessary to limit the Fund’s operating expenses (exclusive of brokerage costs, interest, taxes, dividends, acquired fund fees and expenses, and extraordinary expenses) for the Fund’s Investor Class shares to the annual rate (as a percentage of the Fund’s average daily net assets) 1.34%.

^(c)The gross expense of 6.43% and net expense of 5.52% includes 3.56% in interest expense on short sales. The Fund may also receive interest or dividend income on the proceeds of such short sales. The Fund’s investment advisor has contractually agreed to waive a portion of its fees and reimburse other expenses until April 30, 2010, in amounts necessary to limit the Fund’s operating expenses (exclusive of brokerage costs, interest, taxes, dividends, acquired fund fees and expenses, and extraordinary expenses) for the Fund’s Investor Class shares to the annual rate (as a percentage of the Fund’s average daily net assets) 1.95%.

^(d)The Fund’s investment advisor has contractually agreed to waive a portion of its fees and reimburse other expenses until June 30, 2011, in amounts necessary to limit the Fund’s operating expenses (exclusive of brokerage costs, interest, taxes, dividends, acquired fund fees and expenses, and extraordinary expenses) for the Fund’s Investor Class shares to the annual rate (as a percentage of the Fund’s average daily net assets) 1.60%.

^(e)The Fund’s investment advisor has contractually agreed to waive a portion of its fees and reimburse other expenses until April 30, 2011, in amounts necessary to limit the Fund’s operating expenses (exclusive of brokerage costs, interest, taxes, dividends, acquired fund fees and expenses, and extraordinary expenses) for the Fund’s Investor Class shares to the annual rate (as a percentage of the Fund’s average daily net assets) of 1.94%.

Investing in foreign securities, especially emerging markets, will involve certain additional risks, including exchange rate fluctuation, social and political instability, less liquidity, greater volatility and less regulation. Small company stocks are generally riskier than large company stocks due to greater volatility and less liquidity. Real estate funds will be subject to a higher degree of market risk due to concentration in a specific industry or in geographic regions. Investments in real estate and REITS have various risks including vacancies and devaluation based upon adverse economic or regulatory changes. High-yield bonds involve a greater risk of default and price volatility than U.S. Government and other high quality bonds. High-yield/high-risk bonds can experience sudden and sharp price swings which will affect net asset value.

The Forward Long/Short Credit Analysis Fund will invest in lower-rated debt securities and may utilize derivatives for hedging purposes. The Fund’s use of short selling and derivatives involves additional risks and transaction costs, and creates leverage, which can increase the volatility of the Fund. The Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers, since it is a “non-diversified” mutual fund.

The underlying investments of the Tactical Growth Fund (such as ETFs, futures and options on securities, securities indexes and shares of ETFs) involve heightened risks related to liquidity, increased volatility and unfavorable fluctuations in currency values. The underlying international and real estate investments will also be subject to economic or political instability in the U.S. and other countries, credit risk and interest rate fluctuations. Investors will indirectly bear the expenses of the Fund’s underlying investments. The Fund will invest in lower-rated debt securities and may utilize derivatives for hedging purposes. The Fund’s use of short selling and derivatives involves additional risks and transaction costs, and creates leverage, which can increase the volatility of the Fund.

The 30-Day SEC Yield is based on a 30-day period and is computed by dividing the net investment income per share earned during the period by the maximum offering price per share on the last day of the period. The 30-Day SEC Yield (REIT ROC Adjusted) is based on a 30-day period and is computed by dividing the net investment income per share earned during the period by the maximum offering price per share on the last day of the period. The 30-Day SEC Yield has been adjusted for REIT investment return of capital.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

The MSCI All Country World Index ex-USA is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global developed and emerging markets, excluding the United States.

The Citigroup World Broad Investment-Grade (BIG) Bond ex-U.S. Index is a market capitalization weighted index that tracks the performance of international fixed rate bonds that have remaining maturities of one year or longer and that are rated BBB-/Baa3, or better, by S&P or Moody’s, respectively. This index excludes the U.S. and is unhedged USD.

The BofA Merrill Lynch European Currency High Yield Index tracks the performance of below investment grade sterling, euro and euro legacy currency denominated bonds of corporate issuers domiciled in countries having an investment grade foreign currency long-term debt rating based on a composite of Moody’s and S&P. This index is unhedged USD.

The JPMorgan Government Bond Index-Emerging Markets Global Diversified (GBI-EM Global Diversified) is a comprehensive global local emerging markets index that consists of regularly traded, liquid fixed-rate, domestic currency government bonds and includes only the countries that give access to their capital market to foreign investors (excludes China, India, and Thailand). The index is market capitalization weighted, with a cap of 10% to any one country. This index is unhedged USD.

The MSCI EAFE Small Cap Index is an unmanaged, market-weighted index of small companies in developed markets, excluding the U.S. and Canada.

The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index represents approximately 98% of the investable U.S. equity market.

The Barclays Capital U.S. Corporate High-Yield Bond Index covers the USD-denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The Barclays Capital U.S. Municipal Bond Index covers the USD-denominated long-term, tax-exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds and pre-refunded bonds.

The FTSE NAREIT Equity REITs Index is representative of the tax-qualified REITs listed on the New York Stock Exchange, the American Stock Exchange and the NASDAQ National Market.

All indexes mentioned are unmanaged indexes and are adjusted to reflect the reinvestment of dividends. The index figures do not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in any index.

Not FDIC Insured | No Bank Guarantee | May Lose Value