UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act File Number 811-08572
Bishop Street Funds
(Exact name of registrant as specified in charter)
SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Address of principal executive offices)
SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-800-262-9565
Date of fiscal year end: December 31, 2018
Date of reporting period: June 30, 2018
Item 1. | Reports to Stockholders. |
A copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR § 270.30e-1) is attached hereto.
The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q within sixty days after the end of the period. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov, and may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities is available without charge, by calling 1-800-262-9565 or by visiting the Commission’s website at http://www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge, by calling 1-800-262-9565 or by visiting the Funds’ website at http://www.bishopstreetfunds.com or the website of the Securities and Exchange Commission.
Schedule of Investments | ||||
2 | ||||
6 | ||||
14 | ||||
24 | ||||
25 | ||||
26 | ||||
28 | ||||
30 | ||||
41 | ||||
43 | ||||
47 |
1
Dividend Value Fund | (unaudited) |
Top Ten Equity Holdings†
Percentage of Investments | ||||||||
| ||||||||
1. | Microsoft | 3.9% | ||||||
| ||||||||
2. | JPMorgan Chase | 3.8% | ||||||
| ||||||||
3. | Johnson & Johnson | 3.7% | ||||||
| ||||||||
4. | Apple | 3.5% | ||||||
| ||||||||
5. | Cisco Systems | 2.5% | ||||||
| ||||||||
6. | Home Depot | 2.4% | ||||||
| ||||||||
7. | Union Pacific | 2.3% | ||||||
| ||||||||
8. | ExxonMobil | 2.2% | ||||||
| ||||||||
9. | Pfizer | 2.2% | ||||||
| ||||||||
10. | Honeywell International | 2.2% |
† | Percentages based on total investments. Top ten holdings do not include short-term investments. |
Schedule of Investments
Shares | Value (000) | |||||||
COMMON STOCK — 97.7% | ||||||||
Consumer Discretionary — 7.2% | ||||||||
23,273 | Comcast Cl A | $ | 764 | |||||
4,863 | General Motors | 192 | ||||||
4,748 | Home Depot | 926 | ||||||
2,349 | McDonald’s | 368 | ||||||
2,575 | TJX | 245 | ||||||
2,586 | Walt Disney | 271 | ||||||
|
| |||||||
2,766 | ||||||||
|
|
Bishop Street Funds |
2
Dividend Value Fund | (unaudited) |
Schedule of Investments
(continued)
Shares | Value (000) | |||||||
Consumer Staples — 9.3% | ||||||||
8,154 | Altria Group | $ | 463 | |||||
4,271 | Coca-Cola Enterprises | 174 | ||||||
7,491 | Kellogg | 523 | ||||||
2,125 | Kimberly-Clark | 224 | ||||||
5,851 | PepsiCo | 637 | ||||||
8,570 | Philip Morris International | 692 | ||||||
4,416 | Procter & Gamble | 344 | ||||||
5,732 | Wal-Mart Stores | 491 | ||||||
|
| |||||||
3,548 | ||||||||
|
| |||||||
Energy — 7.1% | ||||||||
6,061 | Chevron | 766 | ||||||
3,623 | ConocoPhillips | 252 | ||||||
10,236 | ExxonMobil | 847 | ||||||
11,151 | Suncor Energy | 454 | ||||||
3,615 | Valero Energy | 401 | ||||||
|
| |||||||
2,720 | ||||||||
|
| |||||||
Financials — 18.4% | ||||||||
18,584 | Bank of America | 524 | ||||||
6,666 | Bank of New York Mellon | 359 | ||||||
7,826 | BB&T | 395 | ||||||
1,106 | BlackRock | 552 | ||||||
4,461 | Chubb | 567 | ||||||
3,054 | CME Group | 500 | ||||||
14,098 | JPMorgan Chase | 1,469 | ||||||
7,698 | Marsh & McLennan | 631 | ||||||
4,589 | PNC Financial Services Group | 620 | ||||||
3,287 | T Rowe Price Group | 382 | ||||||
9,230 | US Bancorp | 462 | ||||||
10,577 | Wells Fargo | 586 | ||||||
|
| |||||||
7,047 | ||||||||
|
| |||||||
Health Care — 11.3% | ||||||||
4,368 | Bristol-Myers Squibb | 242 | ||||||
3,587 | Eli Lilly | 306 | ||||||
2,235 | Gilead Sciences | 158 | ||||||
11,543 | Johnson & Johnson | 1,401 | ||||||
2,855 | Medtronic PLC | 244 | ||||||
13,268 | Merck | 805 | ||||||
23,092 | Pfizer | 838 | ||||||
1,258 | UnitedHealth Group | 309 | ||||||
|
| |||||||
4,303 | ||||||||
|
|
June 30, 2018 | www.bishopstreetfunds.com |
3
Dividend Value Fund | (unaudited) |
Schedule of Investments
(continued)
Shares | Value (000) | |||||||
Industrials — 14.7% | ||||||||
2,441 | 3M | $ | 480 | |||||
1,448 | Boeing | 486 | ||||||
1,655 | Cummins | 220 | ||||||
3,441 | General Dynamics | 641 | ||||||
5,746 | Honeywell International | 828 | ||||||
3,497 | Ingersoll-Rand PLC | 314 | ||||||
2,795 | Lockheed Martin | 826 | ||||||
1,798 | Parker Hannifin | 280 | ||||||
2,044 | Stanley Black & Decker | 271 | ||||||
6,114 | Union Pacific | 866 | ||||||
4,754 | Waste Management | 387 | ||||||
|
| |||||||
5,599 | ||||||||
|
| |||||||
Information Technology — 18.6% | ||||||||
1,600 | Accenture PLC | 262 | ||||||
7,162 | Apple | 1,326 | ||||||
4,274 | Automatic Data Processing | 573 | ||||||
1,863 | Broadcom | 452 | ||||||
5,314 | CA | 189 | ||||||
22,361 | Cisco Systems | 962 | ||||||
14,849 | Intel | 738 | ||||||
1,457 | International Business Machines | 204 | ||||||
2,189 | Kla-Tencor | 224 | ||||||
15,146 | Microsoft | 1,494 | ||||||
6,383 | Texas Instruments | 704 | ||||||
|
| |||||||
7,128 | ||||||||
|
| |||||||
Materials — 2.0% | ||||||||
5,589 | DowDuPont | 368 | ||||||
1,670 | LyondellBasell Industries NV | 184 | ||||||
3,955 | Sonoco Products | 207 | ||||||
|
| |||||||
759 | ||||||||
|
| |||||||
Real Estate — 3.0% | ||||||||
1,837 | Crown Castle International‡ | 198 | ||||||
2,388 | Digital Realty Trust‡ | 267 | ||||||
4,277 | Duke Realty‡ | 124 | ||||||
1,150 | Equity LifeStyle Properties‡ | 106 | ||||||
498 | Essex Property Trust‡ | 119 | ||||||
1,527 | Public Storage ‡ | 346 | ||||||
|
| |||||||
1,160 | ||||||||
|
|
Bishop Street Funds |
4
Dividend Value Fund | (unaudited) |
Schedule of Investments
(concluded)
Shares | Value (000) | |||||||
Telecommunication Services — 1.4% | ||||||||
16,663 | AT&T | $ | 535 | |||||
|
| |||||||
Utilities — 4.7% | ||||||||
3,939 | Ameren | 240 | ||||||
4,382 | American Electric Power | 304 | ||||||
5,594 | CMS Energy | 264 | ||||||
2,446 | Dominion Resources | 167 | ||||||
3,624 | Eversource Energy | 212 | ||||||
1,803 | NextEra Energy | 301 | ||||||
4,914 | WEC Energy Group | 318 | ||||||
|
| |||||||
1,806 | ||||||||
|
| |||||||
TOTAL COMMON STOCK (Cost $24,732) | 37,371 | |||||||
|
| |||||||
CASH EQUIVALENT — 2.3% | ||||||||
891,225 | BlackRock FedFund, Institutional Shares, 1.770% (A) (Cost $891) | 891 | ||||||
|
| |||||||
TOTAL INVESTMENTS (Cost $25,623) —100.0% | $ | 38,262 | ||||||
|
|
Percentages are based on Net Assets of $38,246 (000).
‡ | Real Estate Investment Trust |
(A) | The rate reported is the 7-day effective yield as of June 30, 2018. |
Cl — Class
PLC — Public Limited Company
Cost figures are shown in thousands.
As of June 30, 2018, all of the Funds’ investments in securities were considered Level 1, in accordance with the authoritative guidance on fair value measurements and disclosure under U.S. GAAP.
For the period ended June 30, 2018, there have been no transfers between Level 1, Level 2 and Level 3 assets and liabilities. Transfers, if any, between levels are considered to have occurred at the end of the period.
There were no Level 3 investments during the period ended June 30, 2018.
For more information on valuation inputs, see Note 2 in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
June 30, 2018 | www.bishopstreetfunds.com |
5
High Grade Income Fund | (unaudited) |
Top Ten Holdings†
Coupon Rate | Maturity Date | Percentage of Investments | ||||||||||||||
| ||||||||||||||||
1. | FHLMC, Ser 2011-3970, Cl KC | 3.500% | 03/15/33 | 3.5% | ||||||||||||
| ||||||||||||||||
2. | U.S. Treasury Bond | 4.500% | 08/15/39 | 3.4% | ||||||||||||
| ||||||||||||||||
3. | U.S. Treasury Bond | 4.375% | 05/15/41 | 2.5% | ||||||||||||
| ||||||||||||||||
4. | U.S. Treasury Bond | 6.000% | 02/15/26 | 2.3% | ||||||||||||
| ||||||||||||||||
5. | U.S. Treasury Bond | 5.375% | 02/15/31 | 2.1% | ||||||||||||
| ||||||||||||||||
6. | Amazon.com | 4.800% | 12/05/34 | 1.7% | ||||||||||||
| ||||||||||||||||
7. | GNMA, Ser 2012-91, Cl QL | 2.000% | 09/20/41 | 1.6% | ||||||||||||
| ||||||||||||||||
8. | FHLMC | 1.625% | 08/25/19 | 1.5% | ||||||||||||
| ||||||||||||||||
9. | FHLMC | 1.600% | 09/30/21 | 1.5% | ||||||||||||
| ||||||||||||||||
10. | California State, GO | 6.509% | 04/01/39 | 1.5% | ||||||||||||
|
† | Percentages based on total investments. Top ten holdings do not include short-term investments. |
Schedule of Investments
Face | Value (000) | |||||||
CORPORATE OBLIGATIONS — 52.0% | ||||||||
Consumer Discretionary — 8.9% | ||||||||
Amazon.com | ||||||||
$ | 650 | 4.800%, 12/05/34 | $ | 712 | ||||
CBS | ||||||||
350 | 3.500%, 01/15/25 | 335 | ||||||
Comcast | ||||||||
250 | 3.600%, 03/01/24 | 246 | ||||||
300 | 3.150%, 03/01/26 | 282 | ||||||
Discovery Communications LLC | ||||||||
300 | 3.250%, 04/01/23 | 291 | ||||||
George Washington University | ||||||||
225 | 4.363%, 09/15/43 | 232 |
Bishop Street Funds |
6
High Grade Income Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Consumer Discretionary — (continued) | ||||||||
Home Depot | ||||||||
$ | 450 | 5.875%, 12/16/36 | $ | 546 | ||||
McDonald’s MTN | ||||||||
400 | 4.600%, 05/26/45 | 403 | ||||||
Starbucks | ||||||||
450 | 2.450%, 06/15/26 | 403 | ||||||
Walt Disney MTN | ||||||||
425 | 1.850%, 07/30/26 | 371 | ||||||
|
| |||||||
3,821 | ||||||||
|
| |||||||
Consumer Staples — 2.4% | ||||||||
Campbell Soup | ||||||||
250 | 4.250%, 04/15/21 | 254 | ||||||
Coca-Cola | ||||||||
250 | 2.875%, 10/27/25 | 239 | ||||||
200 | 2.450%, 11/01/20 | 199 | ||||||
CVS Health | ||||||||
250 | 2.875%, 06/01/26 | 228 | ||||||
Hershey | ||||||||
125 | 2.625%, 05/01/23 | 121 | ||||||
|
| |||||||
1,041 | ||||||||
|
| |||||||
Energy — 5.1% | ||||||||
Apache Finance Canada | ||||||||
475 | 7.750%, 12/15/29 | 578 | ||||||
BP Capital Markets PLC | ||||||||
300 | 3.814%, 02/10/24 | 303 | ||||||
Kinder Morgan Energy Partners LP | ||||||||
300 | 4.300%, 05/01/24 | 300 | ||||||
Occidental Petroleum | ||||||||
390 | 2.700%, 02/15/23 | 379 | ||||||
Schlumberger Investment SA | ||||||||
400 | 3.650%, 12/01/23 | 403 | ||||||
Shell International Finance BV | ||||||||
250 | 1.875%, 05/10/21 | 243 | ||||||
|
| |||||||
2,206 | ||||||||
|
| |||||||
Financials — 14.8% | ||||||||
Aflac | ||||||||
450 | 3.625%, 11/15/24 | 446 | ||||||
Bank of America MTN | ||||||||
450 | 4.000%, 04/01/24 | 454 |
June 30, 2018 | www.bishopstreetfunds.com |
7
High Grade Income Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Financials — (continued) | ||||||||
Bank of New York Mellon MTN | ||||||||
$ | 500 | 4.150%, 02/01/21 | $ | 513 | ||||
Capital One Financial | ||||||||
350 | 3.750%, 03/09/27 | 331 | ||||||
Citigroup | ||||||||
200 | 3.875%, 10/25/23 | 200 | ||||||
Discover Bank | ||||||||
400 | 4.200%, 08/08/23 | 403 | ||||||
Goldman Sachs Group MTN | ||||||||
250 | 7.500%, 02/15/19 | 257 | ||||||
500 | 3.630%, VAR ICE LIBOR USD 3 Month+1.300% 11/23/24 | 502 | ||||||
JPMorgan Chase | ||||||||
500 | 2.250%, 01/23/20 | 494 | ||||||
MetLife | ||||||||
250 | 6.817%, 08/15/18 | 251 | ||||||
250 | 3.048%, 12/15/22 | 245 | ||||||
Morgan Stanley MTN | ||||||||
400 | 3.875%, 01/27/26 | 394 | ||||||
MUFG Americas Holdings | ||||||||
250 | 2.250%, 02/10/20 | 246 | ||||||
Prudential Financial MTN | ||||||||
305 | 7.375%, 06/15/19 | 318 | ||||||
Royal Bank of Canada MTN | ||||||||
280 | 2.150%, 03/06/20 | 276 | ||||||
300 | 1.500%, 07/29/19 | 296 | ||||||
US Bancorp MTN | ||||||||
450 | 3.000%, 03/15/22 | 445 | ||||||
Wells Fargo | ||||||||
300 | 2.150%, 01/15/19 | 299 | ||||||
|
| |||||||
6,370 | ||||||||
|
| |||||||
Health Care — 4.6% | ||||||||
AbbVie | ||||||||
500 | 2.900%, 11/06/22 | 485 | ||||||
Amgen | ||||||||
350 | 5.700%, 02/01/19 | 356 | ||||||
Celgene | ||||||||
250 | 3.875%, 08/15/25 | 243 | ||||||
Gilead Sciences | ||||||||
450 | 4.500%, 04/01/21 | 465 |
Bishop Street Funds |
8
High Grade Income Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Health Care — (continued) | ||||||||
Merck Sharp & Dohme | ||||||||
$ | 400 | 5.000%, 06/30/19 | $ | 409 | ||||
|
| |||||||
1,958 | ||||||||
|
| |||||||
Industrials — 4.2% | ||||||||
FedEx | ||||||||
250 | 2.625%, 08/01/22 | 243 | ||||||
General Electric MTN | ||||||||
400 | 3.341%, VAR ICE LIBOR USD 3 Month+1.000% 03/15/23 | 404 | ||||||
Norfolk Southern | ||||||||
300 | 2.900%, 06/15/26 | 280 | ||||||
Raytheon | ||||||||
460 | 2.500%, 12/15/22 | 446 | ||||||
United Technologies | ||||||||
450 | 3.100%, 06/01/22 | 445 | ||||||
|
| |||||||
1,818 | ||||||||
|
| |||||||
Information Technology — 7.2% | ||||||||
Apple | ||||||||
450 | 4.650%, 02/23/46 | 485 | ||||||
Applied Materials | ||||||||
400 | 3.900%, 10/01/25 | 408 | ||||||
Intel | ||||||||
500 | 3.300%, 10/01/21 | 505 | ||||||
International Business Machines | ||||||||
350 | 8.375%, 11/01/19 | 376 | ||||||
Juniper Networks | ||||||||
350 | 4.500%, 03/15/24 | 356 | ||||||
KLA-Tencor | ||||||||
400 | 4.650%, 11/01/24 | 413 | ||||||
Microsoft | ||||||||
250 | 3.625%, 12/15/23 | 255 | ||||||
NetApp | ||||||||
300 | 3.375%, 06/15/21 | 297 | ||||||
|
| |||||||
3,095 | ||||||||
|
| |||||||
Materials — 0.6% | ||||||||
Sherwin-Williams | ||||||||
280 | 3.125%, 06/01/24 | 267 | ||||||
|
| |||||||
Telecommunication Services — 0.8% | ||||||||
Ameritech Capital Funding | ||||||||
300 | 6.875%, 10/15/27 | 342 | ||||||
|
|
June 30, 2018 | www.bishopstreetfunds.com |
9
High Grade Income Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Transportation — 0.8% | ||||||||
Burlington Northern Santa Fe LLC | ||||||||
$ | 345 | 4.450%, 03/15/43 | $ | 353 | ||||
|
| |||||||
Utilities — 2.6% | ||||||||
Berkshire Hathaway Energy | ||||||||
400 | 6.125%, 04/01/36 | 493 | ||||||
Duke Energy Florida LLC | ||||||||
325 | 3.100%, 08/15/21 | 325 | ||||||
Xcel Energy | ||||||||
300 | 3.300%, 06/01/25 | 291 | ||||||
|
| |||||||
1,109 | ||||||||
|
| |||||||
TOTAL CORPORATE OBLIGATIONS (Cost $22,723) | 22,380 | |||||||
|
| |||||||
U.S. TREASURY OBLIGATIONS — 14.0% | ||||||||
U.S. Treasury Bond | ||||||||
800 | 6.000%, 02/15/26 | 974 | ||||||
720 | 5.375%, 02/15/31 | 910 | ||||||
350 | 4.750%, 02/15/37 | 443 | ||||||
1,150 | 4.500%, 08/15/39 | 1,434 | ||||||
875 | 4.375%, 05/15/41 | 1,081 | ||||||
180 | 2.375%, 08/15/24 | 176 | ||||||
700 | 2.250%, 08/15/46 | 603 | ||||||
400 | 2.000%, 11/15/26 | 375 | ||||||
|
| |||||||
TOTAL U.S. TREASURY OBLIGATIONS (Cost $6,049) | 5,996 | |||||||
|
| |||||||
U.S. GOVERNMENT AGENCY OBLIGATIONS — 13.3% | ||||||||
FFCB | ||||||||
300 | 2.670%, 04/18/24 | 294 | ||||||
600 | 2.000%, 06/01/21 | 586 | ||||||
500 | 1.750%, 08/01/22 | 476 | ||||||
500 | 1.240%, 11/29/19 | 490 | ||||||
FHLB | ||||||||
475 | 4.750%, 03/10/23 | 515 | ||||||
500 | 3.125%, 06/13/25 | 502 | ||||||
500 | 3.000%, 03/10/28 | 490 | ||||||
550 | 2.500%, 03/11/22 | 544 | ||||||
FHLMC MTN | ||||||||
550 | 2.050%, 08/26/22 | 530 | ||||||
650 | 1.600%, 09/30/21 | 624 | ||||||
675 | 1.625%, 08/25/19 | 652 | ||||||
|
| |||||||
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $5,827) | 5,703 | |||||||
|
|
Bishop Street Funds |
10
High Grade Income Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS — 9.1% | ||||||||
FHLMC, Ser 2011-3970, Cl KC | ||||||||
$ | 1,500 | 3.500%, 03/15/33 | $ | 1,490 | ||||
FHLMC, Ser 2015-4425, Cl BY | ||||||||
597 | 2.000%, 01/15/45 | 470 | ||||||
FHLMC, Ser G12710 | ||||||||
52 | 5.500%, 07/01/22 | 54 | ||||||
FNMA, Ser 2003-58, Cl D | ||||||||
39 | 3.500%, 07/25/33 | 39 | ||||||
FNMA, Ser 2012-84, Cl JB | ||||||||
242 | 3.000%, 05/25/42 | 220 | ||||||
FNMA, Ser 2013-92, Cl MT | ||||||||
46 | 4.000%, 07/25/41 | 47 | ||||||
FNMA, Ser 889958 | ||||||||
25 | 5.000%, 10/01/23 | 27 | ||||||
GNMA, Ser 2011-112, Cl JP | ||||||||
99 | 2.000%, 02/20/40 | 99 | ||||||
GNMA, Ser 2012-101, Cl KL | ||||||||
687 | 2.000%, 09/20/41 | 597 | ||||||
GNMA, Ser 2012-91, Cl QL | ||||||||
765 | 2.000%, 09/20/41 | 681 | ||||||
GNMA, Ser 2013-4, Cl CN | ||||||||
220 | 2.000%, 10/16/42 | 205 | ||||||
|
| |||||||
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $4,107) | 3,929 | |||||||
|
| |||||||
MUNICIPAL BONDS — 9.1% | ||||||||
California State, GO | ||||||||
560 | 6.509%, 04/01/39 | 620 | ||||||
City of Seattle Washington, Ser B, GO | ||||||||
425 | 3.500%, 12/01/31 | 417 | ||||||
Evansville Redevelopment Authority, GO | ||||||||
500 | 7.210%, 02/01/39 | 542 | ||||||
Hawaii State, Department of Budget & Finance, Pacific Health Project, Ser A, RB | ||||||||
500 | 5.500%, 07/01/43 | 554 | ||||||
Houston, Independent School District, GO | ||||||||
250 | 6.125%, 02/15/28 | 255 | ||||||
Hudson County, Improvement Authority, RB, AGM Insured | ||||||||
525 | 7.400%, 12/01/25 | 586 | ||||||
Oklahoma County, Finance Authority, RB | ||||||||
375 | 6.600%, 09/01/22 | 423 |
June 30, 2018 | www.bishopstreetfunds.com |
11
High Grade Income Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
MUNICIPAL BONDS — (continued) | ||||||||
Stockton, Public Financing Authority, Sub-Ser, RB, BAM Insured | ||||||||
$ | 500 | 7.942%, 10/01/38 | $ | 531 | ||||
|
| |||||||
TOTAL MUNICIPAL BONDS (Cost $3,917) | 3,928 | |||||||
|
| |||||||
NON-AGENCY MORTGAGE-BACKED OBLIGATION — 0.8% | ||||||||
GSR Mortgage Loan Trust, Ser 2004-4, Cl 3A2 | ||||||||
367 | 3.510%, VAR US Treas Yield Curve Rate T Note Const Mat 1 Yr+1.750% 04/25/32 (Cost $339) | 352 | ||||||
|
| |||||||
CASH EQUIVALENT — 0.9% | ||||||||
396,488 | BlackRock FedFund, Institutional Shares, 1.770% (A) (Cost $396) | 396 | ||||||
|
| |||||||
TOTAL INVESTMENTS (Cost $43,358) — 99.2% | $ | 42,684 | ||||||
|
|
Percentages are based on Net Assets of $43,007 (000).
(A) | The rate reported is the 7-day effective yield as of June 30, 2018. |
AGM — Assured Guaranty Municipal
BAM — Build America Mutual
Cl — Class
FFCB — Federal Farm Credit Bank
FHLB — Federal Home Loan Bank
FHLMC — Federal Home Loan Mortgage Corporation
FNMA — Federal National Mortgage Association
GNMA — Government National Mortgage Association
GO — General Obligation
ICE — Intercontinental Exchange
LIBOR — London Interbank Offered Rate
LLC — Limited Liability Corporation
MTN — Medium Term Note
PLC — Public Limited Company
RB — Revenue Bond
Ser — Series
USD — United States Dollar
VAR — Variable
Cost figures are shown in thousands.
Bishop Street Funds |
12
High Grade Income Fund | (unaudited) |
Schedule of Investments
(concluded)
The following is a summary of the inputs used as of June 30, 2018, in valuing the Fund’s investments carried at value (000):
High Grade Income Fund | ||||||||||||||||
Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Corporate Obligations | $ | — | $ | 22,380 | $ | — | $ | 22,380 | ||||||||
U.S. Treasury Obligations | — | 5,996 | — | 5,996 | ||||||||||||
U.S. Government Agency Obligations | — | 5,703 | — | 5,703 | ||||||||||||
U.S. Government Mortgage-Backed Obligations | — | 3,929 | — | 3,929 | ||||||||||||
Municipal Bonds | — | 3,928 | — | 3,928 | ||||||||||||
Non-Agency Mortgage-Backed Obligation | — | 352 | — | 352 | ||||||||||||
Cash Equivalent | 396 | — | — | 396 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 396 | $ | 42,288 | $ | — | $ | 42,684 | ||||||||
|
|
For the period ended June 30, 2018, there have been no transfers between Level 1, Level 2 and Level 3 assets and liabilities. Transfers, if any, between levels are considered to have occurred at the end of the period.
There were no Level 3 investments during the period ended June 30, 2018.
Amounts designated as “—” are $0.
For more information on valuation inputs, see Note 2 in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
June 30, 2018 | www.bishopstreetfunds.com |
13
Hawaii Municipal Bond Fund | (unaudited) |
Top Ten Holdings†
Coupon Rate | Maturity Date | Percentage of Investments | ||||||||||||||
| ||||||||||||||||
1. | Hawaii State, Department of Budget & Finance, Ser 2009 | 6.500% | 07/01/39 | 3.3% | ||||||||||||
| ||||||||||||||||
2. | Hawaii State, Department of Transportation, Airports Division Lease Revenue, AMT | 5.000% | 08/01/27 | 3.0% | ||||||||||||
| ||||||||||||||||
3. | Hawaii State, Airports System Authority, Ser A, AMT | 5.000% | 07/01/45 | 2.2% | ||||||||||||
| ||||||||||||||||
4. | Hawaii State, Department of Budget & Finance, Ser A | 5.000% | 07/01/35 | 2.1% | ||||||||||||
| ||||||||||||||||
5. | University of Hawaii, Ser F | 5.000% | 10/01/35 | 2.1% | ||||||||||||
| ||||||||||||||||
6. | Hawaii State, Department of Transportation, Airports Division Lease Revenue, AMT | 5.000% | 08/01/21 | 2.0% | ||||||||||||
| ||||||||||||||||
7. | Hawaii State, Airports System Authority, Ser A | 5.250% | 07/01/27 | 2.0% | ||||||||||||
| ||||||||||||||||
8. | Honolulu Hawaii City & County, Ser A | 5.000% | 09/01/41 | 2.0% | ||||||||||||
| ||||||||||||||||
9. | Hawaii State, Ser FK | 5.000% | 05/01/29 | 1.8% | ||||||||||||
| ||||||||||||||||
10. | Hawaii State, Airports System Revenue, Ser A, AMT | 5.000% | 07/01/41 | 1.7% |
† | Percentages based on total investments. Top ten holdings do not include short-term investments. |
Schedule of Investments
Face | Value (000) | |||||||
MUNICIPAL BONDS — 99.4% | ||||||||
Alabama — 0.1% | ||||||||
Huntsville, Electric System Revenue, RB | ||||||||
$ | 75 | 5.250%, 12/01/21, Pre-Refunded @ 100 (A) | $ | 83 | ||||
|
|
Bishop Street Funds |
14
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Alaska — 0.6% | ||||||||
Alaska State, Housing Finance, Sate Capital Project, Ser A, RB | ||||||||
$ | 175 | 5.000%, 12/01/33 | $ | 194 | ||||
Alaska State, Ser A, GO | ||||||||
525 | 5.000%, 08/01/34 | 592 | ||||||
|
| |||||||
786 | ||||||||
|
| |||||||
California — 5.3% | ||||||||
California State, GO | ||||||||
1,000 | 5.000%, 09/01/23 | 1,150 | ||||||
1,650 | 5.000%, 09/01/31 | 1,945 | ||||||
5 | 4.500%, 08/01/30 | 5 | ||||||
Orange County, Water District, Ser A, RB | ||||||||
1,000 | 5.000%, 08/15/31 | 1,136 | ||||||
Sacramento City, Unified School District, GO | ||||||||
500 | 5.000%, 07/01/23 | 572 | ||||||
Sonoma County, Junior College District, GO | ||||||||
1,000 | 5.000%, 08/01/27 | 1,145 | ||||||
University of California, Ser AF, RB | ||||||||
215 | 5.000%, 05/15/23, Pre-Refunded @ 100 (A) | 247 | ||||||
785 | 5.000%, 05/15/36 | 880 | ||||||
|
| |||||||
7,080 | ||||||||
|
| |||||||
Florida — 0.1% | ||||||||
Miami-Dade County, School Board, Ser D, COP | ||||||||
150 | 5.000%, 02/01/27 | 172 | ||||||
|
| |||||||
Hawaii — 84.0% | ||||||||
Hawaii County, Ser A, GO | ||||||||
500 | 5.000%, 09/01/20 | 535 | ||||||
250 | 5.000%, 09/01/22 (B) | 280 | ||||||
300 | 5.000%, 09/01/26 | 353 | ||||||
1,000 | 5.000%, 09/01/31 | 1,154 | ||||||
500 | 4.000%, 03/01/20, Pre-Refunded @ 100 (A) | 519 | ||||||
1,500 | 4.000%, 09/01/35 | 1,579 | ||||||
Hawaii County, Ser B, GO | ||||||||
200 | 5.000%, 09/01/22 | 224 | ||||||
Hawaii County, Ser D, GO | ||||||||
450 | 5.000%, 09/01/25 | 526 | ||||||
Hawaii State, Airports System Authority, RB, AGM Insured | ||||||||
1,000 | 5.250%, 07/01/27 | 1,068 | ||||||
Hawaii State, Airports System Authority, Ser A, RB | ||||||||
250 | 5.250%, 07/01/23 | 267 | ||||||
2,500 | 5.250%, 07/01/27 | 2,670 |
June 30, 2018 | www.bishopstreetfunds.com |
15
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Hawaii — (continued) | ||||||||
$ | 1,000 | 5.250%, 07/01/28 | $ | 1,068 | ||||
900 | 5.250%, 07/01/30 | 960 | ||||||
420 | 5.000%, 07/01/39 | 444 | ||||||
2,635 | 5.000%, 07/01/45 | 2,918 | ||||||
Hawaii State, Airports System Authority, RB, AMT | ||||||||
2,000 | 5.000%, 07/01/24 | 2,163 | ||||||
1,000 | 4.125%, 07/01/24 | 1,036 | ||||||
Hawaii State, Airports System Revenue, COP, AMT Insured | ||||||||
500 | 5.250%, 08/01/25 | 559 | ||||||
Hawaii State, Airports System Revenue, Ser A, RB, AMT | ||||||||
2,000 | 5.000%, 07/01/41 | 2,220 | ||||||
Hawaii State, Department of Budget & Finance, RB, AMT | ||||||||
500 | 3.100%, 05/01/26 | 494 | ||||||
Hawaii State, Department of Budget & Finance, Mid Pacific Institute, RB, AGC Insured | ||||||||
835 | 5.000%, 01/01/26 | 836 | ||||||
Hawaii State, Department of Budget & Finance, Pacific Health Project, Ser A, RB | ||||||||
425 | 6.000%, 07/01/33 | 488 | ||||||
710 | 4.625%, 07/01/20, Pre-Refunded @ 100 (A) | 751 | ||||||
Hawaii State, Department of Budget & Finance, RB | ||||||||
325 | 5.125%, 07/01/31 | 359 | ||||||
350 | 3.250%, 01/01/25 | 352 | ||||||
Hawaii State, Department of Budget & Finance, Ser 2009, RB | ||||||||
4,260 | 6.500%, 07/01/39 | 4,443 | ||||||
Hawaii State, Department of Budget & Finance, Ser A, RB | ||||||||
100 | 5.000%, 07/01/22 | 111 | ||||||
575 | 5.000%, 07/01/26 | 639 | ||||||
1,800 | 5.000%, 07/01/27 | 2,063 | ||||||
755 | 5.000%, 07/01/30 | 857 | ||||||
2,500 | 5.000%, 07/01/35 | 2,805 | ||||||
Hawaii State, Department of Budget & Finance, Ser B, RB | ||||||||
775 | 5.000%, 07/01/28 | 856 | ||||||
Hawaii State, Department of Hawaiian Home Lands, Kapolie Office Facilities, Ser A, COP, AGM Insured | ||||||||
500 | 5.000%, 11/01/26 | 588 | ||||||
Hawaii State, Department of Hawaiian Home Lands, RB | ||||||||
500 | 5.000%, 04/01/27 | 589 | ||||||
Hawaii State, Department of Transportation, Airports Division Lease Revenue, COP, AMT | ||||||||
2,525 | 5.000%, 08/01/21 | 2,731 | ||||||
3,675 | 5.000%, 08/01/27 | 4,030 | ||||||
1,000 | 5.000%, 08/01/28 | 1,093 |
Bishop Street Funds |
16
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Hawaii — (continued) | ||||||||
Hawaii State, Harbor System Revenue, Ser A, RB | ||||||||
$ | 220 | 5.000%, 07/01/25 | $ | 233 | ||||
1,125 | 4.250%, 07/01/21 | 1,175 | ||||||
Hawaii State, Highway Authority, Ser A, RB | ||||||||
700 | 5.000%, 01/01/23 | 788 | ||||||
1,450 | 5.000%, 01/01/30 | 1,651 | ||||||
1,000 | 5.000%, 01/01/31 | 1,137 | ||||||
1,000 | 5.000%, 01/01/33 | 1,131 | ||||||
Hawaii State, Housing Finance & Development, Kuhio Park Terrace Multi-Family Housing, Ser A, RB, FHLMC Insured | ||||||||
200 | 3.900%, 04/01/22 | 209 | ||||||
115 | 3.750%, 04/01/21 | 120 | ||||||
180 | 3.500%, 04/01/20 | 185 | ||||||
Hawaii State, Housing Finance & Development, Rental Housing System, Ser B, RB, AGM Insured | ||||||||
2,000 | 6.500%, 07/01/33 | 2,060 | ||||||
Hawaii State, Housing Finance & Development, Single-Family Housing, Ser B, RB, GNMA/FNMA/FHLMC Insured | ||||||||
385 | 3.450%, 01/01/22 | 394 | ||||||
Hawaii State, Housing Finance & Development, Wilikina Apartments Project, Ser A, RB | ||||||||
1,000 | 5.000%, 05/01/34 | 1,011 | ||||||
Hawaii State, Ser DR, GO | ||||||||
600 | 5.000%, 06/01/19 | 619 | ||||||
Hawaii State, Ser DT, GO | ||||||||
270 | 5.000%, 11/01/19 | 282 | ||||||
Hawaii State, Ser DZ, GO | ||||||||
1,795 | 5.000%, 12/01/21, Pre-Refunded @ 100 (A) | 1,980 | ||||||
Hawaii State, Ser EA, GO | ||||||||
935 | 5.000%, 12/01/21 | 1,032 | ||||||
1,700 | 5.000%, 12/01/22 | 1,870 | ||||||
Hawaii State, Ser EE-2017, GO | ||||||||
400 | 5.000%, 11/01/22, Pre-Refunded @ 100 (A) | 450 | ||||||
Hawaii State, Ser EF, GO | ||||||||
300 | 5.000%, 11/01/23 | 337 | ||||||
500 | 5.000%, 11/01/24 | 560 | ||||||
Hawaii State, Ser EH, GO, EMT | ||||||||
200 | 5.000%, 08/01/23 (B) | 228 | ||||||
705 | 5.000%, 08/01/23, Pre-Refunded @ 100 (A) | 805 | ||||||
125 | 5.000%, 08/01/24 | 142 | ||||||
300 | 5.000%, 08/01/29 | 338 | ||||||
295 | 5.000%, 08/01/30 | 332 | ||||||
95 | 5.000%, 08/01/32 | 106 |
June 30, 2018 | www.bishopstreetfunds.com |
17
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Hawaii — (continued) | ||||||||
Hawaii State, Ser EH-2017, GO | ||||||||
$ | 85 | 5.000%, 08/01/23 (B) | $ | 97 | ||||
Hawaii State, Ser EO, GO | ||||||||
1,000 | 5.000%, 08/01/29 | 1,141 | ||||||
1,000 | 5.000%, 08/01/30 | 1,138 | ||||||
1,000 | 5.000%, 08/01/33 | 1,132 | ||||||
Hawaii State, Ser EP, GO | ||||||||
1,000 | 5.000%, 08/01/22 | 1,119 | ||||||
500 | 5.000%, 08/01/25 | 576 | ||||||
325 | 5.000%, 08/01/26 | 373 | ||||||
Hawaii State, Ser EY, GO | ||||||||
1,000 | 5.000%, 10/01/27 | 1,167 | ||||||
Hawaii State, Ser FE, GO | ||||||||
285 | 5.000%, 10/01/27 | 337 | ||||||
Hawaii State, Ser FK, GO | ||||||||
2,000 | 5.000%, 05/01/29 | 2,363 | ||||||
Hawaii State, Ser FN, GO | ||||||||
1,000 | 5.000%, 10/01/23 | 1,144 | ||||||
200 | 5.000%, 10/01/24 | 232 | ||||||
85 | 5.000%, 10/01/30 | 101 | ||||||
Hawaii State, Ser FT, GO | ||||||||
1,000 | 5.000%, 01/01/31 | 1,189 | ||||||
250 | 3.375%, 01/01/36 | 249 | ||||||
Honolulu Hawaii City & County, Board of Water Supply, Ser A, RB | ||||||||
1,050 | 5.000%, 07/01/19 | 1,086 | ||||||
600 | 5.000%, 07/01/23 | 669 | ||||||
400 | 5.000%, 07/01/24 | 462 | ||||||
600 | 5.000%, 07/01/27 | 685 | ||||||
Honolulu Hawaii City & County, Ser A, GO | ||||||||
275 | 5.250%, 08/01/21, Pre-Refunded @ 100 (A) | 303 | ||||||
700 | 5.000%, 10/01/19 | 730 | ||||||
400 | 5.000%, 11/01/21 | 440 | ||||||
500 | 5.000%, 11/01/22 (B) | 562 | ||||||
1,000 | 5.000%, 10/01/23 | 1,144 | ||||||
400 | 5.000%, 09/01/27 | 481 | ||||||
1,000 | 5.000%, 10/01/27 | 1,168 | ||||||
500 | 5.000%, 11/01/22, Pre-Refunded @ 100 (A) | 563 | ||||||
800 | 5.000%, 10/01/31 | 922 | ||||||
225 | 5.000%, 10/01/39 | 255 | ||||||
2,300 | 5.000%, 09/01/41 | 2,656 | ||||||
700 | 4.000%, 11/01/19 | 723 | ||||||
325 | 4.000%, 08/01/21, Pre-Refunded @ 100 (A) | 346 | ||||||
425 | 4.000%, 09/01/38 | 448 |
Bishop Street Funds |
18
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Hawaii — (continued) | ||||||||
Honolulu Hawaii City & County, Ser B, GO | ||||||||
$ | 375 | 5.000%, 08/01/21 | $ | 410 | ||||
350 | 5.000%, 08/01/22 | 382 | ||||||
200 | 5.000%, 11/01/24 | 224 | ||||||
300 | 5.000%, 08/01/26 | 326 | ||||||
1,000 | 5.000%, 10/01/26 | 1,171 | ||||||
Honolulu Hawaii City & County, Ser C, GO | ||||||||
750 | 5.000%, 10/01/23 | 858 | ||||||
1,430 | 5.000%, 10/01/28 | 1,662 | ||||||
Honolulu Hawaii City & County, Ser D, GO | ||||||||
400 | 5.250%, 09/01/19, Pre-Refunded @ 100 (A) | 417 | ||||||
Honolulu Hawaii City & County, Ser E, GO | ||||||||
325 | 5.000%, 09/01/28 | 388 | ||||||
Honolulu Hawaii City & County, Wastewater System Authority, Ser A, RB | ||||||||
750 | 5.000%, 07/01/21, Pre-Refunded @ 100 (A) | 819 | ||||||
100 | 5.000%, 07/01/22, Pre-Refunded @ 100 (A) | 112 | ||||||
500 | 5.000%, 07/01/36 | 573 | ||||||
1,200 | 4.000%, 07/01/38 | 1,266 | ||||||
Honolulu Hawaii City & County, Wastewater System Authority, Ser Junior A, RB | ||||||||
450 | 4.000%, 07/01/25 | 466 | ||||||
Honolulu Hawaii City & County, Wastewater System Authority, Ser B, RB | ||||||||
1,575 | 5.000%, 07/01/23 | 1,790 | ||||||
Kauai County, Ser A, GO | ||||||||
250 | 5.000%, 08/01/21 | 273 | ||||||
150 | 5.000%, 08/01/23 | 167 | ||||||
250 | 4.000%, 08/01/24 | 268 | ||||||
250 | 3.250%, 08/01/23 | 258 | ||||||
Kauai County, Ser A, GO, NATL FGIC Insured | ||||||||
415 | 5.000%, 08/01/21 | 416 | ||||||
Maui County, GO | ||||||||
250 | 5.000%, 06/01/20 | 266 | ||||||
150 | 5.000%, 06/01/21 | 163 | ||||||
Maui County, Ser B, GO | ||||||||
500 | 4.000%, 06/01/21 | 521 | ||||||
University of Hawaii, Ser A, RB | ||||||||
100 | 6.000%, 10/01/19, Pre-Refunded @ 100 (A) | 105 | ||||||
University of Hawaii, Ser A-2, RB | ||||||||
1,030 | 4.000%, 10/01/18 | 1,037 |
June 30, 2018 | www.bishopstreetfunds.com |
19
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Hawaii — (continued) | ||||||||
University of Hawaii, Ser B, RB | ||||||||
$ | 1,500 | 5.000%, 10/01/34 | $ | 1,710 | ||||
1,000 | 4.000%, 10/01/23 | 1,090 | ||||||
University of Hawaii, Ser E, RB | ||||||||
1,485 | 5.000%, 10/01/25 | 1,741 | ||||||
1,350 | 5.000%, 10/01/32 | 1,565 | ||||||
University of Hawaii, Ser F, RB | ||||||||
2,425 | 5.000%, 10/01/35 | 2,801 | ||||||
|
| |||||||
113,049 | ||||||||
|
| |||||||
Indiana — 0.5% | ||||||||
Fort Wayne Community School Building, RB | ||||||||
500 | 5.000%, 07/15/25 | 558 | ||||||
Indiana State, Housing & Community Development Authority, Ser C, RB, GNMA/FNMA/FHLMC Insured | ||||||||
70 | 4.100%, 06/01/27 | 72 | ||||||
|
| |||||||
630 | ||||||||
|
| |||||||
Maine — 0.4% | ||||||||
Maine State, Health & Higher Educational Facilities Authority, Ser A, RB | ||||||||
500 | 5.250%, 07/01/31 | 531 | ||||||
|
| |||||||
Mississippi — 0.3% | ||||||||
Southaven, Water & Sewer System Revenue, RB | ||||||||
370 | 5.000%, 02/01/26 | 427 | ||||||
|
| |||||||
New York — 1.5% | ||||||||
New York & New Jersey, Port Authority, RB | ||||||||
350 | 5.000%, 11/15/47 | 403 | ||||||
New York City, Trust for Cultural Resources, Ser S, RB | ||||||||
1,000 | 5.000%, 07/01/41 | 1,120 | ||||||
New York, Ser H, GO | ||||||||
500 | 5.000%, 08/01/20 | 534 | ||||||
|
| |||||||
2,057 | ||||||||
|
| |||||||
Ohio — 1.1% | ||||||||
Akron, Income Tax Revenue, RB | ||||||||
1,000 | 5.000%, 06/01/22, Pre-Refunded @ 100 (A) | 1,115 | ||||||
Ohio State, Ser 2011-B, GO | ||||||||
300 | 5.000%, 08/01/22 | 335 | ||||||
|
| |||||||
1,450 | ||||||||
|
|
Bishop Street Funds |
20
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(continued)
Face | Value (000) | |||||||
Oklahoma — 0.5% | ||||||||
Oklahoma City, Water Utilities Trust, RB | ||||||||
$ | 125 | 5.000%, 07/01/40 | $ | 135 | ||||
Tulsa County, Industrial Authority, RB | ||||||||
500 | 5.000%, 09/01/26 | 576 | ||||||
|
| |||||||
711 | ||||||||
|
| |||||||
Oregon — 0.4% | ||||||||
Clackamas County, School District No. 12, Ser B, GO, SCH BD GTY Insured | ||||||||
500 | 5.000%, 06/15/37 | 580 | ||||||
|
| |||||||
Tennessee — 0.4% | ||||||||
Memphis, Ser A, GO | ||||||||
500 | 5.000%, 04/01/26 | 580 | ||||||
|
| |||||||
Texas — 3.1% | ||||||||
Arlington, Higher Education Finance, Ser 2014-A, RB, PSF-GTD Insured | ||||||||
750 | 5.000%, 08/15/27 | 844 | ||||||
City of Denton, GO | ||||||||
1,165 | 3.375%, 02/15/34 | 1,148 | ||||||
Clifton, Higher Education Finance, Ser 2014, RB, PSF-GTD Insured | ||||||||
500 | 5.000%, 08/15/26 | 571 | ||||||
Mesquite, Refinance & Improvements, GO | ||||||||
1,000 | 5.000%, 02/15/27 | 1,151 | ||||||
Midland County, Fresh Water Supply District No. 1, Ser A, RB | ||||||||
1,000 | 4.789%, 09/15/37(C) | 441 | ||||||
|
| |||||||
4,155 | ||||||||
|
| |||||||
Utah — 0.2% | ||||||||
Central Utah, Water Conservancy District, Ser B, GO | ||||||||
200 | 5.250%, 04/01/23 | 218 | ||||||
|
| |||||||
Washington — 0.9% | ||||||||
Port of Seattle Washington, Ser A, RB | ||||||||
750 | 5.000%, 08/01/26 | 828 | ||||||
Washington State, Housing Finance Commission, RB, FANNIE MAE Insured | ||||||||
300 | 4.750%, 07/15/29 | 321 | ||||||
|
| |||||||
1,149 | ||||||||
|
| |||||||
TOTAL MUNICIPAL BONDS (Cost $134,337) | 133,658 | |||||||
|
|
June 30, 2018 | www.bishopstreetfunds.com |
21
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(continued)
Shares | Value (000) | |||||||
CASH EQUIVALENT — 0.1% | ||||||||
166,551 | BlackRock FedFund, Institutional Shares, 1.770% (D) (Cost $167) | $ | 167 | |||||
|
| |||||||
TOTAL INVESTMENTS (Cost $134,504) — 99.5% | $ | 133,825 | ||||||
|
|
Percentages are based on Net Assets of $134,516 (000).
(A) | Pre-Refunded Security — The maturity date shown is the pre-refunded date. |
(B) | Security is escrowed to maturity. |
(C) | Zero coupon security. The rate reported on the Schedule of Investments is the effective yield at time of purchase. |
(D) | The rate reported is the 7-day effective yield as of June 30, 2018. |
AGC — American Guarantee Corporation
AGM — Assured Guaranty Municipal
AMT — Alternative Minimum Tax
COP — Certificate of Participation
FGIC — Financial Guarantee Insurance Corporation
FHLMC — Federal Home Loan Mortgage Corporation
FNMA — Federal National Mortgage Association
GNMA — Government National Mortgage Association
GO — General Obligation
NATL — National Public Finance Guarantee Corporation
PSF-GTD — Guaranteed by Permanent School Fund
RB — Revenue Bond
SCH BD GTY — School Board Guaranteed
Ser — Series
Cost figures are shown in thousands.
The following is a summary of the inputs used as of June 30, 2018, in valuing the Fund’s investments carried at value (000):
Hawaii Municipal Bond Fund | ||||||||||||||||
Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Municipal Bonds | $ | — | $ | 133,658 | $ | — | $ | 133,658 | ||||||||
Cash Equivalent | 167 | — | — | 167 | ||||||||||||
|
| |||||||||||||||
Total Investments in Securities | $ | 167 | $ | 133,658 | $ | — | $ | 133,825 | ||||||||
|
|
Bishop Street Funds |
22
Hawaii Municipal Bond Fund | (unaudited) |
Schedule of Investments
(concluded)
For the period ended June 30, 2018, there have been no transfers between Level 1, Level 2 and Level 3 assets and liabilities. Transfers, if any, between levels are considered to have occurred at the end of the period.
There were no Level 3 investments during the period ended June 30, 2018.
Amounts designated as “—” are $0.
For more information on valuation inputs, see Note 2 in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
June 30, 2018 | www.bishopstreetfunds.com |
23
Bishop Street Funds | (unaudited) |
Statements of Assets and Liabilities (000)
June 30, 2018
Dividend Value Fund | High Grade Income Fund | Hawaii Municipal Bond Fund | ||||||||||
Assets: | ||||||||||||
Investments, at Cost | $ | 25,623 | $ | 43,358 | $ | 134,504 | ||||||
| ||||||||||||
Investments, at Value | $ | 38,262 | $ | 42,684 | $ | 133,825 | ||||||
Cash | — | 10 | — | |||||||||
Dividends and Interest Receivable | 34 | 370 | 2,268 | |||||||||
Reclaim Receivable | 1 | 1 | — | |||||||||
Receivable for Fund Shares Sold | — | 5 | — | |||||||||
Prepaid Expenses | 1 | 6 | 6 | |||||||||
| ||||||||||||
Total Assets | 38,298 | 43,076 | 136,099 | |||||||||
| ||||||||||||
Liabilities: | ||||||||||||
Payable for Investment Securities Purchased | — | — | 1,141 | |||||||||
Advisory Fees Payable | 17 | 6 | 11 | |||||||||
Payable for Fund Shares Redeemed | 6 | — | 6 | |||||||||
Administrative Fees Payable | 4 | 5 | 9 | |||||||||
Shareholder Servicing Fees Payable | 3 | 4 | 11 | |||||||||
Chief Compliance Officer Fees Payable | 1 | 1 | 3 | |||||||||
Income Distribution Payable | — | 27 | 215 | |||||||||
Other Accrued Expenses Payable | 21 | 26 | 72 | |||||||||
Line Of Credit Payable | — | — | 115 | |||||||||
| ||||||||||||
Total Liabilities | 52 | 69 | 1,583 | |||||||||
| ||||||||||||
Net Assets | $ | 38,246 | $ | 43,007 | $ | 134,516 | ||||||
| ||||||||||||
Paid-in Capital | $ | 22,899 | $ | 43,781 | $ | 135,244 | ||||||
Undistributed Net Investment Income | 1 | 7 | 72 | |||||||||
Accumulated Net Realized Gain (Loss) on Investments | 2,707 | (107 | ) | (121 | ) | |||||||
Net Unrealized Appreciation (Depreciation) on Investments | 12,639 | (674 | ) | (679 | ) | |||||||
| ||||||||||||
Net Assets | $ | 38,246 | $ | 43,007 | $ | 134,516 | ||||||
| ||||||||||||
Class I Shares: | ||||||||||||
Net Assets | $ | 38,246 | $ | 43,007 | $ | 116,000 | ||||||
Outstanding Shares of Beneficial Interest | 2,443 | 4,625 | 11,160 | |||||||||
Net Asset Value, Offering and Redemption Price Per Share — Class I (Net Assets / Shares Outstanding) | $ | 15.65 | * | $ | 9.30 | $ | 10.39 | |||||
| ||||||||||||
Class A Shares: | ||||||||||||
Net Assets | N/A | N/A | $ | 18,516 | ||||||||
Outstanding Shares of Beneficial Interest | N/A | N/A | 1,781 | |||||||||
Net Asset Value, Offering and Redemption Price Per Share — Class A (Net Assets / Shares Outstanding) | N/A | N/A | $ | 10.40 | ||||||||
| ||||||||||||
Maximum Offering Price Per Shares — Class A | N/A | N/A | $ | 10.72 | ||||||||
|
* | Difference in net asset value recalculation and net asset value stated is caused by rounding differences. |
N/A — Not Applicable. Share class currently not offered.
Amounts designated as “—” are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Bishop Street Funds |
24
Bishop Street Funds | (unaudited) |
Statements of Operations (000)
For the six-month period ended June 30, 2018
Dividend Value Fund | High Grade Income Fund | Hawaii Municipal Bond Fund | ||||||||||
Investment Income: | ||||||||||||
Dividend Income | $ | 513 | $ | — | $ | — | ||||||
Interest Income | — | 736 | 2,015 | |||||||||
| ||||||||||||
Total Investment Income | 513 | 736 | 2,015 | |||||||||
| ||||||||||||
Expenses: | ||||||||||||
Investment Adviser Fees | 149 | 128 | 236 | |||||||||
Shareholder Servicing Fees | 50 | 58 | 168 | |||||||||
Administrative Fees | 40 | 46 | 135 | |||||||||
Chief Compliance Officer Fees | 1 | 2 | 4 | |||||||||
Distribution Fees, Class A | — | — | 24 | |||||||||
Transfer Agent Fees | 22 | 24 | 54 | |||||||||
Audit Fees | 7 | 8 | 24 | |||||||||
Printing Fees | 6 | 7 | 19 | |||||||||
Legal Fees | 6 | 6 | 18 | |||||||||
Trustees’ Fees | 4 | 5 | 14 | |||||||||
Custody Fees | 2 | 2 | 3 | |||||||||
Registration Fees | 1 | 11 | 6 | |||||||||
Pricing Fees | 1 | 6 | 13 | |||||||||
Miscellaneous Expenses | 5 | 6 | 17 | |||||||||
| ||||||||||||
Total Expenses | 294 | 309 | 735 | |||||||||
| ||||||||||||
Less Waivers: | ||||||||||||
Investment Adviser Fees | (40 | ) | (82 | ) | (159 | ) | ||||||
Shareholder Servicing Fees | (30 | ) | (35 | ) | (101 | ) | ||||||
Administrative Fees | (14 | ) | (16 | ) | (80 | ) | ||||||
| ||||||||||||
Total Waivers | (84 | ) | (133 | ) | (340 | ) | ||||||
| ||||||||||||
Total Net Expenses | 210 | 176 | 395 | |||||||||
| ||||||||||||
Net Investment Income | 303 | 560 | 1,620 | |||||||||
| ||||||||||||
Net Realized Gain (Loss) on Investments | 1,921 | (137 | ) | (131 | ) | |||||||
Net Change in Unrealized Depreciation on Investments | (2,846 | ) | (1,653 | ) | (2,353 | ) | ||||||
| ||||||||||||
Net Realized and Unrealized Loss on Investments | (925 | ) | (1,790 | ) | (2,484 | ) | ||||||
| ||||||||||||
Decrease in Net Assets Resulting from Operations | $ | (622 | ) | $ | (1,230 | ) | $ | (864 | ) | |||
|
Amounts designated as “—” are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
June 30, 2018 | www.bishopstreetfunds.com |
25
Bishop Street Funds |
Statements of Changes in Net Assets (000)
For the six-month period ended June 30, 2018 (unaudited) and the year ended December 31, 2017
Dividend Value Fund | High Grade Income Fund | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Investment Activities from Operations: | ||||||||||||||||
Net Investment Income | $ | 303 | $ | 645 | $ | 560 | $ | 1,314 | ||||||||
Net Realized Gain (Loss) on Investments | 1,921 | 2,805 | (137 | ) | 566 | |||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Investments | (2,846 | ) | 4,259 | (1,653 | ) | 161 | ||||||||||
| ||||||||||||||||
Increase (Decrease) in Net Assets Resulting from Operations | (622 | ) | 7,709 | (1,230 | ) | 2,041 | ||||||||||
| ||||||||||||||||
Dividends and Distributions to Shareholders: | ||||||||||||||||
Net Investment Income: | ||||||||||||||||
Class I Shares | (307 | ) | (646 | ) | (554 | ) | (1,292 | ) | ||||||||
Capital Gains: | ||||||||||||||||
Class I Shares | — | (3,422 | ) | — | (681 | ) | ||||||||||
| ||||||||||||||||
Total Dividends and Distributions to Shareholders | (307 | ) | (4,068 | ) | (554 | ) | (1,973 | ) | ||||||||
| ||||||||||||||||
Capital Share Transactions: | ||||||||||||||||
Proceeds from Shares Issued | 1,216 | 740 | 1,962 | 2,889 | ||||||||||||
Reinvestments of Cash Distributions | 180 | 2,425 | 370 | 1,278 | ||||||||||||
Cost of Shares Redeemed | (4,417 | ) | (4,252 | ) | (8,234 | ) | (14,746 | ) | ||||||||
| ||||||||||||||||
Net Decrease in Net Assets from Capital Share Transactions | (3,021 | ) | (1,087 | ) | (5,902 | ) | (10,579 | ) | ||||||||
| ||||||||||||||||
Total Increase (Decrease) in Net Assets | (3,950 | ) | 2,554 | (7,686 | ) | (10,511 | ) | |||||||||
| ||||||||||||||||
Net Assets: | ||||||||||||||||
Beginning of Period | 42,196 | 39,642 | 50,693 | 61,204 | ||||||||||||
| ||||||||||||||||
End of Period | $ | 38,246 | $ | 42,196 | $ | 43,007 | $ | 50,693 | ||||||||
| ||||||||||||||||
Undistributed Net Investment Income | $ | 1 | $ | 5 | $ | 7 | $ | 1 | ||||||||
| ||||||||||||||||
Share Transactions: | ||||||||||||||||
Shares Issued | 77 | 48 | 209 | 297 | ||||||||||||
Shares Issued in Lieu of Cash Distributions | 12 | 153 | 40 | 131 | ||||||||||||
Shares Redeemed | (276 | ) | (268 | ) | (881 | ) | (1,512 | ) | ||||||||
| ||||||||||||||||
Net Decrease in Shares Outstanding from Share Transactions | (187 | ) | (67 | ) | (632 | ) | (1,084 | ) | ||||||||
|
Amounts designated as “—” are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
Bishop Street Funds |
26
Bishop Street Funds |
Statements of Changes in Net Assets (000)
For the six-month period ended June 30, 2018 (unaudited) and the year ended December 31, 2017
Hawaii Municipal Bond Fund | ||||||||
2018 | 2017 | |||||||
Investment Activities from Operations: | ||||||||
Net Investment Income | $ | 1,620 | $ | 3,297 | ||||
Net Realized Gain (Loss) on Investments | (131 | ) | 133 | |||||
Net Change in Unrealized Appreciation (Depreciation) on Investments | (2,353 | ) | 1,756 | |||||
| ||||||||
Increase (Decrease) in Net Assets Resulting from Operations | (864 | ) | 5,186 | |||||
| ||||||||
Dividends and Distributions to Shareholders: | ||||||||
Net Investment Income: | ||||||||
Class I Shares | (1,410 | ) | (2,830 | ) | ||||
Class A Shares | (206 | ) | (448 | ) | ||||
Capital Gains: | ||||||||
Class I Shares | — | (69 | ) | |||||
Class A Shares | — | (12 | ) | |||||
| ||||||||
Total Dividends and Distributions to Shareholders | (1,616 | ) | (3,359 | ) | ||||
| ||||||||
Capital Share Transactions: | ||||||||
Class I Shares: | ||||||||
Proceeds from Shares Issued | 9,175 | 8,926 | ||||||
Reinvestments of Cash Distributions | 203 | 427 | ||||||
Cost of Shares Redeemed | (8,542 | ) | (14,503 | ) | ||||
| ||||||||
Total Class I Capital Share Transactions | 836 | (5,150 | ) | |||||
| ||||||||
Class A Shares: | ||||||||
Proceeds from Shares Issued | 110 | 775 | ||||||
Reinvestments of Cash Distributions | 143 | 326 | ||||||
Cost of Shares Redeemed | (1,713 | ) | (3,426 | ) | ||||
| ||||||||
Total Class A Capital Share Transactions | (1,460 | ) | (2,325 | ) | ||||
| ||||||||
Net Decrease in Net Assets from Capital Share Transactions | (624 | ) | (7,475 | ) | ||||
| ||||||||
Total Decrease in Net Assets | (3,104 | ) | (5,648 | ) | ||||
| ||||||||
Net Assets: | ||||||||
Beginning of Period | 137,620 | 143,268 | ||||||
| ||||||||
End of Period | $ | 134,516 | $ | 137,620 | ||||
| ||||||||
Undistributed Net Investment Income | $ | 72 | $ | 68 | ||||
| ||||||||
Share Transactions: | ||||||||
Class I Shares: | ||||||||
Shares Issued | 882 | 841 | ||||||
Shares Issued in Lieu of Cash Distributions | 19 | 40 | ||||||
Shares Redeemed | (821 | ) | (1,368 | ) | ||||
| ||||||||
Total Class I Transactions | 80 | (487 | ) | |||||
| ||||||||
Class A Shares: | ||||||||
Shares Issued | 11 | 73 | ||||||
Shares Issued in Lieu of Cash Distributions | 14 | 31 | ||||||
Shares Redeemed | (165 | ) | (324 | ) | ||||
| ||||||||
Total Class A Transactions | (140 | ) | (220 | ) | ||||
| ||||||||
Net Decrease in Shares Outstanding from Share Transactions | (60 | ) | (707 | ) | ||||
|
Amounts designated as “—” are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
June 30, 2018 | www.bishopstreetfunds.com |
27
Bishop Street Funds |
For a share outstanding throughout the six-month period ended June 30, 2018 (unaudited) and the years ended December 31,
Investment Activities | Total Investment Activities from Operations | Dividends and Distributions from | |||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) on Investments | Net Investment Income | Capital Gains | Total Dividends and Distributions | ||||||||||||||||||||||||||||||
DIVIDEND VALUE FUND | |||||||||||||||||||||||||||||||||||
Class I Shares: |
| ||||||||||||||||||||||||||||||||||
2018 | $ | 16.05 | $ | 0.12 | $ | (0.40 | ) | $ | (0.28 | ) | $ | (0.12 | ) | $ | — | $ | (0.12 | ) | |||||||||||||||||
2017 | 14.70 | 0.24 | 2.69 | 2.93 | (0.24 | ) | (1.34 | ) | (1.58 | ) | |||||||||||||||||||||||||
2016 | 13.45 | 0.24 | 1.52 | 1.76 | (0.25 | ) | (0.26 | ) | (0.51 | ) | |||||||||||||||||||||||||
2015 | 13.62 | 0.22 | (0.17 | ) | 0.05 | (0.22 | ) | — | (0.22 | ) | |||||||||||||||||||||||||
2014 | 12.43 | 0.29 | 1.20 | 1.49 | (0.30 | ) | — | (0.30 | ) | ||||||||||||||||||||||||||
2013 | 9.83 | 0.21 | 2.61 | 2.82 | (0.22 | ) | — | (0.22 | ) | ||||||||||||||||||||||||||
HIGH GRADE INCOME FUND | |||||||||||||||||||||||||||||||||||
Class I Shares: |
| ||||||||||||||||||||||||||||||||||
2018 | $ | 9.64 | $ | 0.11 | $ | (0.34 | ) | $ | (0.23 | ) | $ | (0.11 | ) | $ | — | $ | (0.11 | ) | |||||||||||||||||
2017 | 9.65 | 0.22 | 0.12 | 0.34 | (0.22 | ) | (0.13 | ) | (0.35 | ) | |||||||||||||||||||||||||
2016 | 9.80 | 0.22 | (0.07 | ) | 0.15 | (0.22 | ) | (0.08 | ) | (0.30 | ) | ||||||||||||||||||||||||
2015 | 10.05 | 0.23 | (0.19 | ) | 0.04 | (0.23 | ) | (0.06 | ) | (0.29 | ) | ||||||||||||||||||||||||
2014 | 9.78 | 0.23 | 0.33 | 0.56 | (0.23 | ) | (0.06 | ) | (0.29 | ) | |||||||||||||||||||||||||
2013 | 10.51 | 0.22 | (0.50 | ) | (0.28 | ) | (0.22 | ) | (0.23 | ) | (0.45 | ) | |||||||||||||||||||||||
HAWAII MUNICIPAL BOND FUND | |||||||||||||||||||||||||||||||||||
Class I Shares: |
| ||||||||||||||||||||||||||||||||||
2018 | $ | 10.58 | $ | 0.13 | $ | (0.19 | ) | $ | (0.06 | ) | $ | (0.13 | ) | $ | — | $ | (0.13 | ) | |||||||||||||||||
2017 | 10.45 | 0.25 | 0.14 | 0.39 | (0.25 | ) | (0.01 | ) | (0.26 | ) | |||||||||||||||||||||||||
2016 | 10.80 | 0.27 | (0.30 | ) | (0.03 | ) | (0.26 | ) | (0.06 | ) | (0.32 | ) | |||||||||||||||||||||||
2015 | 10.88 | 0.29 | (0.01 | ) | 0.28 | (0.29 | ) | (0.07 | ) | (0.36 | ) | ||||||||||||||||||||||||
2014 | 10.52 | 0.29 | 0.38 | 0.67 | (0.29 | ) | (0.02 | ) | (0.31 | ) | |||||||||||||||||||||||||
2013 | 11.13 | 0.29 | (0.57 | ) | (0.28 | ) | (0.29 | ) | (0.04 | ) | (0.33 | ) | |||||||||||||||||||||||
Class A Shares: |
| ||||||||||||||||||||||||||||||||||
2018 | $ | 10.58 | $ | 0.11 | $ | (0.18 | ) | $ | (0.07 | ) | $ | (0.11 | ) | $ | — | $ | (0.11 | ) | |||||||||||||||||
2017 | 10.45 | 0.23 | 0.13 | 0.36 | (0.22 | ) | (0.01 | ) | (0.23 | ) | |||||||||||||||||||||||||
2016 | 10.80 | 0.24 | (0.29 | ) | (0.05 | ) | (0.24 | ) | (0.06 | ) | (0.30 | ) | |||||||||||||||||||||||
2015 | 10.88 | 0.26 | (0.01 | ) | 0.25 | (0.26 | ) | (0.07 | ) | (0.33 | ) | ||||||||||||||||||||||||
2014 | 10.52 | 0.26 | 0.38 | 0.64 | (0.26 | ) | (0.02 | ) | (0.28 | ) | |||||||||||||||||||||||||
2013 | 11.13 | 0.27 | (0.57 | ) | (0.30 | ) | (0.27 | ) | (0.04 | ) | (0.31 | ) |
(1) | Per share net investment income calculated using average shares. |
* | Annualized. |
† | Total return is for the period indicated and has not been annualized. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Fee waivers are in effect; if they had not been in effect, performance would have been lower. |
Amounts designated as “—” are either $0 or have been rounded to $0.
Bishop Street Funds |
28
Net Asset Value, End of Period | Total Return† | Net Assets End of Period (000) | Ratio of Expenses to Average Net Assets | Ratio of Expenses to Average Net Assets (Excluding Waivers) | Ratio of Net Investments Income (Loss) to Average Net Assets | Portfolio Turnover Rate | ||||||||||||||||||||||||||||
$ | 15.65 | (1.72 | )% | $ | 38,246 | 1.05 | %* | 1.47 | %* | 1.50 | %* | 9 | % | |||||||||||||||||||||
16.05 | 20.47 | 42,196 | 1.05 | 1.46 | 1.55 | 11 | ||||||||||||||||||||||||||||
14.70 | 13.16 | 39,642 | 1.05 | 1.43 | 1.70 | 17 | ||||||||||||||||||||||||||||
13.45 | 0.44 | 46,246 | 1.05 | 1.38 | 1.62 | 24 | ||||||||||||||||||||||||||||
13.62 | 12.08 | 55,665 | 1.05 | 1.37 | 2.27 | 21 | ||||||||||||||||||||||||||||
12.43 | 28.84 | 61,460 | 1.05 | 1.38 | 1.87 | 13 | ||||||||||||||||||||||||||||
$ | 9.30 | (2.38 | )% | $ | 43,007 | 0.76 | %* | 1.33 | %* | 2.41 | %* | 9 | % | |||||||||||||||||||||
9.64 | 3.56 | 50,693 | 0.76 | 1.29 | 2.30 | 33 | ||||||||||||||||||||||||||||
9.65 | 1.47 | 61,204 | 0.76 | 1.25 | 2.20 | 27 | ||||||||||||||||||||||||||||
9.80 | 0.37 | 72,251 | 0.76 | 1.21 | 2.31 | 24 | ||||||||||||||||||||||||||||
10.05 | 5.77 | 74,642 | 0.76 | 1.20 | 2.32 | 28 | ||||||||||||||||||||||||||||
9.78 | (2.69 | ) | 74,007 | 0.76 | 1.21 | 2.18 | 35 | |||||||||||||||||||||||||||
$ | 10.39 | (0.60 | )% | $ | 116,000 | 0.55 | %* | 1.06 | %* | 2.44 | %* | 8 | % | |||||||||||||||||||||
10.58 | 3.74 | 117,285 | 0.55 | 1.04 | 2.39 | 25 | ||||||||||||||||||||||||||||
10.45 | (0.32 | ) | 120,894 | 0.55 | 1.02 | 2.45 | 26 | |||||||||||||||||||||||||||
10.80 | 2.61 | 127,712 | 0.55 | 0.98 | 2.64 | 28 | ||||||||||||||||||||||||||||
10.88 | 6.36 | 132,540 | 0.55 | 0.99 | 2.66 | 27 | ||||||||||||||||||||||||||||
10.52 | (2.47 | ) | 126,289 | 0.55 | 1.01 | 2.72 | 29 | |||||||||||||||||||||||||||
$ | 10.40 | (0.66 | )% | $ | 18,516 | 0.80 | %* | 1.31 | %* | 2.19 | %* | 8 | % | |||||||||||||||||||||
10.58 | 3.46 | 20,335 | 0.80 | 1.29 | 2.14 | 25 | ||||||||||||||||||||||||||||
10.45 | (0.57 | ) | 22,374 | 0.80 | 1.27 | 2.20 | 26 | |||||||||||||||||||||||||||
10.80 | 2.36 | 22,959 | 0.80 | 1.23 | 2.39 | 28 | ||||||||||||||||||||||||||||
10.88 | 6.10 | 22,324 | 0.80 | 1.24 | 2.41 | 27 | ||||||||||||||||||||||||||||
10.52 | (2.72 | ) | 24,359 | 0.80 | 1.26 | 2.47 | 29 |
The accompanying notes are an integral part of the financial statements.
June 30, 2018 | www.bishopstreetfunds.com |
29
Bishop Street Funds | (unaudited) |
June 30, 2018
The amounts included in the Notes to Financial Statements are in thousands unless otherwise noted.
1. | ORGANIZATION |
The Bishop Street Funds (the “Trust”) are registered under the Investment Company Act of 1940, as amended, as an open-end, management investment company. The Bishop Street Funds consist of a series of three funds (each a Fund, collectively the “Funds”) which includes Dividend Value Fund, High Grade Income Fund, and the Hawaii Municipal Bond Fund. Each Fund is diversified, with the exception of Hawaii Municipal Bond Fund, which is non-diversified. Class A Shares of the Hawaii Municipal Bond Fund are subject to a sales load as disclosed in the prospectus. The assets of each Fund are segregated, and a shareholder’s interest is limited to the Fund in which shares are held. The Funds’ prospectus provides a description of each Fund’s investment objectives, policies and strategies.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The following are significant accounting policies, which are consistently followed in the preparation of the financial statements of the Funds. The Funds are investment companies that apply the accounting and reporting guidance issued in Topic 946 by the U.S. Financial Accounting Standards Board (“FASB”).
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the fair value of assets, the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and such differences could be material.
Security Valuation
The Funds’ investments in equity securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ) including securities traded over the counter, are valued at the last quoted sale price on an exchange or market (foreign or domestic) on which they are traded on valuation date (or at approximately 4:00 pm ET if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. Debt securities are priced based upon valuations provided by independent, third-party pricing agents, if available.
Such values generally reflect the last reported sales price in the most advantageous market, if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual
Bishop Street Funds |
30
(unaudited) |
market transactions, broker-supplied valuations, or other methodologies designed to identify the fair value for such securities. Such methodologies typically include matrix systems which reflect such factors as security prices, yields, maturities and ratings. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value provided that it is determined the amortized cost continues to approximate fair value. Should existing credit, liquidity or interest rate conditions in the relevant markets and issuer specific circumstances suggest that amortized cost does not approximate fair value, then the amortized cost method may not be used. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents.
If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker.
Securities for which market prices are not “readily available” are valued in accordance with Fair Value Procedures established by the Funds’ Board of Trustees (the “Board”). The Funds’ Fair Value Procedures are implemented through a Fair Value Pricing Committee (the “Committee”) designated by the Funds’ Board. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security’s trading has been halted or suspended; the security has been delisted from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; or the security’s primary pricing source is not able or willing to provide a price. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee.
In accordance with the authoritative guidance on fair value measurement under U.S. GAAP, the Funds disclose fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
• | Level 1 — Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date; |
June 30, 2018 | www.bishopstreetfunds.com |
31
Bishop Street Funds | (unaudited) |
• | Level 2 — Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, etc.); and |
• | Level 3 — Prices, inputs or exotic modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement.
For the six-month period ended June 30, 2018, there have been no changes to the Funds’ fair value methodologies.
Federal Income Taxes
It is each Fund’s intention to continue to qualify as a regulated investment company for Federal income tax purposes by complying with the appropriate provisions of Subchapter M of the Internal Revenue Code of 1986, as amended, and to distribute substantially all of its income to shareholders. Accordingly, no provision for Federal income taxes has been made in the financial statements.
The Funds evaluate tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether it is “more-likely-than- not” (i.e., greater than 50-percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Funds did not record any tax provision in the current period. However, management’s conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., the last 3 open tax year ends, as applicable), on-going analysis of and changes to tax laws, regulations and interpretations thereof.
Security Transactions and Investment Income
Security transactions are accounted for on trade date. Costs used in determining net realized capital gains and losses on the sale of securities are on the basis of specific identification. Interest income is recorded on the accrual basis from settlement date and dividend income is recorded on ex-dividend date.
Discounts and premiums are accreted or amortized using the effective interest method over the life of each security and are recorded as interest income. Realized gains (losses) on paydowns of mortgage-backed and asset-backed securities are recorded as an adjustment to interest income.
Bishop Street Funds |
32
(unaudited) |
Classes
Class-specific expenses are borne by the applicable class of shares. Income, realized and unrealized gains/losses and non-class-specific expenses are allocated to the respective class on the basis of relative daily net assets. Distribution fees are the only class-specific expense.
Expenses
Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses of the Trust are prorated to each of the Funds on the basis of relative net assets.
Dividends and Distributions to Shareholders
The Dividend Value Fund declare and pay dividends from net investment income, if available, on a quarterly basis. Dividends from net investment income are declared daily and paid on a monthly basis for the High Grade Income and Hawaii Municipal Bond. Any net realized capital gains will be distributed at least annually for all Funds. Distributions to shareholders are recorded on the ex-dividend date.
Front-End Sales Commission
Front-end sales commissions (the “sales charges”) are not recorded as expenses of the Hawaii Municipal Bond Fund. Sales charges are deducted from proceeds from the sales of Hawaii Municipal Bond Fund shares prior to investment in Class A shares.
Cash Overdraft Charges
Per the terms of the agreement with MUFG Union Bank, N.A., the custodian of the Funds (the “Custodian”), if a Fund has a cash overdraft on a given day, it will be assessed an overdraft charge of the Prime Rate plus 4.00%. Cash overdraft charges are included in miscellaneous expenses on the Statements of Operations. For the six-month period ended June 30, 2018, there were no cash overdraft charges.
3. | INVESTMENT ADVISORY AGREEMENT |
Investment advisory services are provided to the Funds by Bishop Street Capital Management (the “Adviser”), a registered adviser and wholly owned subsidiary of First Hawaiian Bank. First Hawaiian Bank is a subsidiary of BancWest Corporation, itself a subsidiary of BNP Paribas. The Adviser is entitled to receive an annual fee of 0.74% of the average daily net assets of the Dividend Value Fund, 0.55% of the average daily net assets of the High Grade Income Fund, and 0.35% of the average daily net assets of the Hawaii Municipal Bond Fund. The Adviser has contractually agreed, through April 30, 2019, to waive a portion of its advisory fee (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses (collectively,
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33
Bishop Street Funds | (unaudited) |
excluded expenses)) to the extent necessary to keep operating expenses at or below certain percentages of the respective average daily net assets. The contractual expense limitations are as follows:
Dividend Value Fund, Class I Shares | 1.05% | |||
High Grade Income Fund, Class I Shares | 0.76% | |||
Hawaii Municipal Bond Fund, Class I Shares | 0.55% | |||
Hawaii Municipal Bond Fund, Class A Shares | 0.80% |
If at any point it becomes unnecessary for the Adviser to reduce fees and make expense reimbursements, the Board may permit the Adviser to retain the difference between the Total Annual Fund Operating Expenses and contractual expense limitations to recapture all or a portion of its prior expense reductions or reimbursements made during the preceding three year period during which this agreement was in place. During the six-month period ended June 30, 2018, the Adviser did not recapture any previously waived fees.
As of June 30, 2018, fees which were previously waived by the Investment Manager which may be subject to possible future reimbursement to the Adviser were as follows:
Dividend | High Grade Income Fund | Hawaii Municipal Bond Fund | Total | Expires | ||||||||||||||
$ | 52 | $ | 160 | $ | 236 | $ | 448 | 12/31/2018 | ||||||||||
73 | 192 | 319 | 584 | 12/31/2019 | ||||||||||||||
87 | 186 | 338 | 611 | 12/31/2020 | ||||||||||||||
40 | 82 | 159 | 281 | 12/31/2021 |
Columbia Management Investment Advisers, LLC (“Columbia”) serves as the investment sub-adviser for the Dividend Value Fund, pursuant to a sub-adviser agreement. Columbia is entitled to receive from the Adviser a fee, computed daily and paid monthly, at the annual rate based on the average daily net assets of the Dividend Value Fund, under the following fee schedule: 0.360% on the first $75 million; 0.350% on the next $75 million; 0.325% on the next $100 million; 0.300% on the next $250 million; and 0.250% on assets over $500 million.
4. | ADMINISTRATIVE, CUSTODIAN, TRANSFER AGENT, DISTRIBUTION AND SHAREHOLDER SERVICES |
The Funds and the Administrator are parties to an Administration Agreement under which the Administrator provides administrative services to the Funds. For these services, the Administrator is paid an asset based fee which will vary depending on the number of share classes and the average daily net assets of the Funds. The Administrator
Bishop Street Funds |
34
(unaudited) |
has voluntarily agreed to waive 0.08% of its administrative fee on each of the Funds’ average daily net assets excluding the Hawaii Municipal Bond Fund for which the Administrator is waiving 0.13% of its fee. These fee waivers are voluntary and may be discontinued at any time. For the six-month period ended June 30, 2018, the Funds were charged as follows for these services: $40 in the Dividend Value Fund, $46 in the High Grade Income Fund, and $135 in the Hawaii Municipal Bond Fund. For the six-month period ended June 30, 2018, the Funds waived as follows for these services: $14 in the Dividend Value Fund, $16 in the High Grade Income Fund, and $80 in the Hawaii Municipal Bond Fund. These fees and waivers are labeled as “Administrative Fees/Waivers” on the Statement of Operations.
MUFG Union Bank, N.A. acts as custodian for the Funds. The Custodian plays no role in determining the investment policies of the Funds or which securities are to be purchased or sold by the Funds. These fees are labeled on the Statement of Operations as “Custody Fees.”
DST Systems, Inc. (“DST”) acts as the Transfer Agent of the Funds. As such, DST provides transfer agency, dividend disbursing and shareholder services to the Funds. These fees are disclosed on the Statement of Operations as “Transfer Agent Fees.”
SEI Investments Distribution Co. (“SIDCO”), the “Distributer” a wholly owned subsidiary of SEI Investments Company, acts as the Trust’s Distributor pursuant to the distribution agreement. The Funds have adopted a Distribution Plan (the “Plan”) on behalf of Class A Shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plan provides that Class A Shares will bear the cost of their distribution expenses. SIDCO, as compensation for its services under the Plan, receives a distribution fee, computed daily and payable monthly, of 0.25% of the average daily net assets attributable to each Fund’s Class A Shares. This fee is disclosed as “Distribution Fees, Class A” on the Statement of Operations.
The Trust has adopted and entered into a shareholder service plan and agreement with SIDCO. Each Fund pays to SIDCO a shareholder servicing fee not to exceed an annual rate of 0.25% of the average daily net asset value of all shares of each fund, which is computed daily and paid monthly. Under the shareholder service plan, SIDCO may perform, or may compensate other service providers for performing various shareholder and administrative services. SIDCO may also retain as profit any difference between the fee it receives and amount it pays to third parties. For the year, SIDCO paid the entire amount of fees received under the shareholder service plan to First Hawaiian Bank, the Parent Company of Bishop Street Capital Management, for shareholder services performed by First Hawaiian Bank on behalf of SIDCO for the benefit of certain shareholders to the Funds. SIDCO has voluntarily agreed to waive 0.15% of its shareholder servicing fee to the extent necessary to keep operating expenses at or below certain
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Bishop Street Funds | (unaudited) |
percentages of the respective average daily net assets. These fees and waivers are represented as “Shareholder Servicing Fees/Waivers” on the Statement of Operations.
5. | TRANSACTIONS WITH AFFILIATES |
Certain officers of the Trust are also officers of SEI Investments Global Funds Services (the “Administrator”), a wholly owned subsidiary of SEI Investments Company, and/or SIDCO. Such officers are paid no fees by the Trust other than the Chief Compliance Officer (“CCO”) as described below, for serving as officers of the Trust.
A portion of the services provided by the CCO and his staff, who are employees of the Administrator, are paid for by the Trust as incurred. The services include regulatory oversight of the Trust’s Advisers and service providers as required by SEC regulations. The CCO’s services and expenses have been approved by and are reviewed by the Board. These fees are disclosed on the Statement of Operations as “Chief Compliance Officer Fees.”
6. | INVESTMENT TRANSACTIONS |
The cost of security purchases and the proceeds from the sale and maturities of securities, other than short-term investments, for the six-month period ended June 30, 2018 are presented below for the Funds.
Dividend Value Fund | High Grade Income Fund | Hawaii Municipal Bond Fund | ||||||||||
Purchases | ||||||||||||
U.S. Government Securities | $ | — | $ | 1,822 | $ | — | ||||||
Other | 3,667 | 2,175 | 13,065 | |||||||||
Sales and Maturities | ||||||||||||
U.S. Government Securities | $ | — | $ | 1,887 | $ | — | ||||||
Other | 5,866 | 7,330 | 11,013 |
7. | FEDERAL TAX INFORMATION |
The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations which may differ from U.S. GAAP.
As a result, net investment income (loss) and net realized gain (loss) on investment transactions for the reporting period may differ from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to undistributed net investment income/(loss), paid-in capital or accumulated net realized gain/(loss), as appropriate, in the period that the differences arise.
Bishop Street Funds |
36
(unaudited) |
The tax character of dividends and distributions declared during the years ended December 31, 2017 and 2016 were as follows:
Ordinary Income | Tax Exempt Income | Long Term Capital Gain | Total | |||||||||||||
Dividend Value Fund | ||||||||||||||||
2017 | $ | 676 | $ | — | $ | 3,392 | $ | 4,068 | ||||||||
2016 | 746 | — | 694 | 1,440 | ||||||||||||
High Grade Income Fund | ||||||||||||||||
2017 | $ | 1,314 | $ | — | $ | 659 | $ | 1,973 | ||||||||
2016 | 1,647 | — | 345 | 1,992 | ||||||||||||
Hawaii Municipal Bond Fund | ||||||||||||||||
2017 | $ | 1 | $ | 3,277 | $ | 81 | $ | 3,359 | ||||||||
2016 | 163 | 3,599 | 616 | 4,378 |
As of December 31, 2017, the components of Distributable Earnings (Accumulated Losses) on a tax basis were as follows:
Dividend Value Fund | High Grade Income Fund | Hawaii Municipal Bond Fund | ||||||||||
Undistributed Ordinary Income | $ | 12 | $ | 3 | $ | 5 | ||||||
Undistributed Long-Term Capital Gain Income | 795 | 28 | 11 | |||||||||
Unrealized Appreciation | 15,466 | 994 | 1,735 | |||||||||
Other Temporary Differences | 3 | (15 | ) | 1 | ||||||||
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Total Distributable Earnings | $ | 16,276 | $ | 1,010 | $ | 1,752 | ||||||
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Post-October losses represent losses realized on investment transactions from November 1, 2017 through December 31, 2017 that, in accordance with Federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year.
For Federal income tax purposes, capital losses incurred may be carried forward and applied against future capital gains. Under the Regulated Investment Company Modernization Act of 2010, Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Additionally, post enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
For the year ended December 31, 2017, there were no Capital loss carryforwards that were not subject to expiration.
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Bishop Street Funds | (unaudited) |
For Federal income tax purposes, the cost of securities owned at June 30, 2018, and the net realized gains or losses on securities sold for the period were not materially different from amounts reported for financial reporting purposes. These differences are primarily due to wash sales which cannot be used for Federal income tax purposes in the current year and have been deferred for use in future years. The aggregate gross unrealized appreciation and depreciation of securities held by the Dividend Value, High Grade Income, and Hawaii Municipal Bond Funds for Federal income tax purposes at June 30, 2018 were as follows:
Dividend Value Fund | High Grade Income Fund | Hawaii Municipal Bond Fund | ||||||||||
Federal Tax Cost | $ | 25,642 | $ | 43,343 | $ | 134,443 | ||||||
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Gross Unrealized Appreciation | 12,837 | 492 | 1,073 | |||||||||
Gross Unrealized Depreciation | (217 | ) | (1,151 | ) | (1,691 | ) | ||||||
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Net Unrealized Appreciation | $ | 12,620 | $ | (659 | ) | $ | (618 | ) | ||||
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8. | RISKS |
The Hawaii Municipal Bond Fund invests primarily in debt instruments in the state of Hawaii. The issuers’ ability to meet their obligations may be affected by economic developments in that state. In addition, each Fund’s investments in debt securities are subject to “credit risk,” which is the risk that an issuer will be unable, or will be perceived to be unable, to repay its obligations at maturity and “interest rate risk” which is the potential for fluctuations in bond prices due to changing interest rates. Funds that invest primarily in high quality debt securities generally are subject to less credit risk than funds that invest in lower quality debt securities.
Certain debt securities are backed by credit enhancements from various financial institutions and financial guarantee assurance agencies. These credit enhancements reinforce the credit quality of the individual securities; however, if any of the financial institutions or financial guarantee assurance agencies’ credit quality should deteriorate, it could cause the individual security’s credit quality to change. Additionally, if any of the Funds concentrate their credit enhancements in any one financial institution, the risk of credit quality deterioration increases. The following table provides detail on the approximate percentage of Hawaii Municipal Bond Fund’s investments in securities with these types of enhancements, as well as the name of the entity providing the largest proportion of enhancements in the Fund.
Bishop Street Funds |
38
(unaudited) |
Hawaii Municipal Bond Fund | ||
% of investments in securities with credit enhancements or liquidity enhancements | 5.93% | |
Largest % of investments in securities with credit enhancements or liquidity enhancements from a single institution | 2.34% (Assured Guaranty Municipal Corporation) |
The value of asset-backed securities may be affected by the credit risk of the servicing agent for the pool, the originator of the loans or receivables, or the financial institution(s) providing the credit support. In addition to credit risk, asset-backed securities and other securities with early redemption features are subject to pre-payment risk. During periods of declining interest rates, prepayment of loans underlying asset-backed securities can be expected to accelerate or an issuer may retire an outstanding bond early to reduce interest costs. A Fund’s ability to maintain positions in such securities will be affected by reductions in the principal amount of such securities resulting from prepayments, and its ability to reinvest the returns of principal at comparable yields is subject to the general prevailing interest rates at that time.
The market value of the Funds’ investments in fixed income securities may change in response to interest rate changes and other factors. During periods of falling interest rates, the values of fixed income securities generally rise. Conversely, during periods of rising interest rates, the values of such securities generally decline. Changes by recognized rating agencies in the ratings of any fixed income security and in the ability of an issuer to make payments of interest and principal may also affect the value of these investments.
In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds’ maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be established; however, based on experience, the risk of loss from such claims is considered remote.
Dividend Value Fund invests solely in equity securities. Purchases of equity securities are subject to the risk that stock prices will fall over short or extended periods of time. Historically, the equity markets have moved in cycles, and the value of the Fund’s equity securities may fluctuate drastically from day to day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. These factors contribute to price volatility, which is the principal risk of investing in the Fund’s.
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Bishop Street Funds | (unaudited) |
9. | LINE OF CREDIT |
Through June 30, 2018, the Funds, which are not jointly liable, had entered into an agreement which enabled them to participate in a $5 million unsecured committed revolving line of credit on a first come, first served basis, with MUFG Union Bank, N.A. (the “Bank”). The proceeds from the borrowings were used to finance the Funds’ short term general working capital requirements, including the funding of shareholder redemptions. As of June 30, 2018, the Hawaii Municipal Bond Fund had borrowings of $115.
For the six-month period ended June 30, 2018, the Funds had the following borrowings under the line of credit:
Fund | Average Borrowings | Borrowing Costs | Number of Days Outstanding | Weighted Average Interest Rate | ||||||||||||
Dividend Value Fund | $ | 180 | Less than $1 | 1 | 4.75 | % | ||||||||||
Hawaii Municipal Bond Fund | 80 | Less than $1 | 3 | 4.75 | % |
10. | OTHER |
At June 30, 2018, the percentage of total shares outstanding held by shareholders owning 10% or greater of total shares outstanding of each Fund, which comprised omnibus accounts that were held on behalf of several individual shareholders, was as follows:
Number of Shareholders | % of Outstanding Shares | |||||||
Dividend Value Fund, Class I Shares | 1 | 99.20 | ||||||
High Grade Income Fund, Class I Shares* | 2 | 91.80 | ||||||
Hawaii Municipal Bond Fund, Class I Shares | 1 | 80.74 | ||||||
Hawaii Municipal Bond Fund, Class A Shares | — | — |
* | Includes one unaffiliated shareholder, all other shareholders in the above table are affiliated. |
11. | SUBSEQUENT EVENTS |
The Funds have evaluated the need for additional disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no additional disclosures and/or adjustments were required to the financial statements.
Bishop Street Funds |
40
Bishop Street Funds | (unaudited) |
All mutual funds have operating expenses. As a shareholder of a mutual fund you incur two types of costs: (1) transaction costs, including applicable sales charges (loads); and (2) ongoing costs, which include (among others) costs for portfolio management, administrative services, distribution and service (12b-1), shareholder service fees, and shareholder reports like this one. It is important for you to understand the impact of these costs on your investment returns.
Operating expenses such as these are deducted from a mutual fund’s gross income and directly reduce its final investment return. These expenses are expressed as a percentage of the mutual fund’s average net assets; this percentage is known as the mutual fund’s expense ratio.
The following examples use the expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period from January 1, 2018 to June 30, 2018.
The table on the next page illustrates your Fund’s costs in two ways:
• | Actual Fund Return. This section helps you to estimate the actual expenses after fee waivers that your Fund incurred over the period. The “Expenses Paid During Period” column shows the actual dollar expense cost incurred by a $1,000 investment in the Fund, and the “Ending Account Value” number is derived from deducting that expense cost from the Fund’s gross investment return. |
You can use this information, together with the actual amount you invested in the Fund, to estimate the expenses you paid over that period. Simply divide your actual account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = $8.60), then multiply that ratio by the number shown for your Fund under “Expenses Paid During Period.”
• | Hypothetical 5% Return. This section helps you compare your Fund’s costs with those of other mutual funds. It assumes that the Fund had an annual 5% return before expenses during the year, but that the expense ratio (Column 3) for the period is unchanged. This example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to make this 5% calculation. You can assess your Fund’s comparative cost by comparing the hypothetical result for your Fund in the “Expenses Paid During Period” column with those that appear in the same charts in the shareholder reports for other funds. |
Note: Because the return is set at 5% for comparison purposes — NOT your Fund’s actual return — the account values shown may not apply to your specific investment.
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Bishop Street Funds | (unaudited) |
Beginning Account Value 1/1/18 | Ending Account Value 6/30/18 | Annualized Expense Ratios | Expenses Paid During Period* | |||||||||||||
Dividend Value Fund — Class I | ||||||||||||||||
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Actual Fund Return | $ | 1,000.00 | $ | 982.80 | 1.05 | % | $ | 5.16 | ||||||||
Hypothetical 5% Return | 1,000.00 | 1,019.59 | 1.05 | 5.26 | ||||||||||||
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High Grade Income Fund — Class I | ||||||||||||||||
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Actual Fund Return | $ | 1,000.00 | $ | 976.20 | 0.76 | % | $ | 3.72 | ||||||||
Hypothetical 5% Return | 1,000.00 | 1,021.03 | 0.76 | 3.81 | ||||||||||||
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Hawaii Municipal Bond Fund — Class I | ||||||||||||||||
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Actual Fund Return | $ | 1,000.00 | $ | 994.00 | 0.55 | % | $ | 2.72 | ||||||||
Hypothetical 5% Return | 1,000.00 | 1,022.07 | 0.55 | 2.76 | ||||||||||||
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Hawaii Municipal Bond Fund — Class A | ||||||||||||||||
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Actual Fund Return | $ | 1,000.00 | $ | 993.40 | 0.80 | % | $ | 3.95 | ||||||||
Hypothetical 5% Return | 1,000.00 | 1,020.83 | 0.80 | 4.01 | ||||||||||||
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* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
Bishop Street Funds |
42
Bishop Street Funds | (unaudited) |
Renewal of Investment Advisory and Sub-Advisory Agreements
Pursuant to Section 15 of the Investment Company Act of 1940 (the “1940 Act”), the Funds’ advisory and sub-advisory agreements must be renewed at least annually after their initial two-year term: (i) by the vote of the Board of Trustees (the “Board” or the “Trustees”) of Bishop Street Funds (the “Trust”) or by a vote of a majority of the shareholders of the Funds; and (ii) by the vote of a majority of the Trustees who are not parties to the advisory or sub-advisory agreements or “interested persons” of any party thereto, as defined in the 1940 Act (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such renewal.
A Board meeting was held on February 28, 2018 to decide whether to renew the following agreements (the “Agreements”) for additional one-year terms:
• | the advisory agreement between Bishop Street Capital Management (the “Adviser”) and the Trust, on behalf of the Bishop Street Hawaii Municipal Bond Fund, Bishop Street High Grade Income Fund, and Bishop Street Dividend Value Fund; and |
• | the sub-advisory agreement between the Adviser and Columbia Management Investment Advisers, LLC (the “Sub-Adviser”) on behalf of the Bishop Street Dividend Value Fund. |
In preparation for the meeting, the Trustees requested that the Adviser and the Sub-Adviser furnish information necessary to evaluate the terms of the Agreements. Prior to the meeting, the Independent Trustees of the Funds met to review and discuss the information provided and submitted a request for additional information to the Adviser, and information was provided in response to this request. The Trustees used this information, as well as other information that the Adviser, the Sub-Adviser and other service providers of the Funds presented or submitted to the Board at the meeting and other meetings held during the prior year, to help them decide whether to renew the Agreements for an additional year.
Specifically, the Board requested and received written materials from the Adviser, the Sub-Adviser and other service providers of the Funds regarding: (i) the nature, extent and quality of the Adviser’s and the Sub-Adviser’s services; (ii) the Adviser’s and the Sub-Adviser’s investment management personnel; (iii) the Adviser’s and the Sub-Adviser’s operations and financial condition; (iv) the Adviser’s and the Sub-Adviser’s brokerage practices (including any soft dollar arrangements) and investment strategies; (v) the Funds’ advisory fees paid to the Adviser and the Sub-Adviser and overall fees and operating expenses compared with peer groups of mutual funds; (vi) the level of the Adviser’s and the Sub-Adviser’s profitability from their relationships with the Funds, including both direct and indirect benefits accruing to the Adviser and the Sub-Adviser and their affiliates; (vii) the Adviser’s and the Sub-Adviser’s potential economies of scale; (viii) the Adviser’s and the
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Bishop Street Funds | (unaudited) |
Sub-Adviser’s compliance programs, including a description of material compliance matters and material compliance violations; (ix) the Adviser’s and the Sub-Adviser’s policies on and compliance procedures for personal securities transactions; and (x) the Funds’ performance compared with peer groups of mutual funds and the Funds’ benchmark indices.
Representatives from the Adviser and the Sub-Adviser, along with other Fund service providers, presented additional information and participated in question and answer sessions at the Board meeting to help the Trustees evaluate the Adviser’s and the Sub-Adviser’s services, fees and other aspects of the Agreements. The Independent Trustees received advice from independent counsel and met in executive sessions outside the presence of Fund management, the Adviser and the Sub-Adviser.
At the Board meeting, the Trustees, including all of the Independent Trustees, based on their evaluation of the information provided by the Adviser, the Sub-Adviser and other service providers of the Funds, renewed the Agreements. In considering the renewal of the Agreements, the Board considered various factors that they determined were relevant, including: (i) the nature, extent and quality of the services provided by the Adviser and the Sub-Adviser; (ii) the investment performance of the Funds and the Adviser and the Sub-Adviser; (iii) the costs of the services provided and profits realized by the Adviser and the Sub-Adviser from their relationships with the Funds, including both direct and indirect benefits accruing to the Adviser and the Sub-Adviser and their affiliates; (iv) the extent to which economies of scale are being realized by the Adviser and the Sub-Adviser; and (v) whether fee levels reflect such economies of scale for the benefit of Fund investors, as discussed in further detail below.
Nature, Extent and Quality of Services Provided by the Adviser and the Sub-Adviser
In considering the nature, extent and quality of the services provided by the Adviser and the Sub-Adviser, the Board reviewed the portfolio management services provided by the Adviser and the Sub-Adviser to the Funds, including the quality and continuity of the Adviser’s and the Sub-Adviser’s portfolio management personnel, the resources of the Adviser and the Sub-Adviser, and the Adviser’s and the Sub-Adviser’s compliance histories and compliance programs. The Trustees reviewed the terms of the Agreements. The Trustees also reviewed the Adviser’s and the Sub-Adviser’s investment and risk management approaches for the Funds. The Trustees considered that the Adviser supervises and monitors the performance of the Sub-Adviser. The most recent investment adviser registration forms (“Form ADV”) for the Adviser and the Sub-Adviser were available to the Board, as were the responses of the Adviser and the Sub-Adviser to a detailed series of questions which included, among other things, information about the investment advisory services provided by the Adviser and the Sub-Adviser to the Funds.
Bishop Street Funds |
44
(unaudited) |
The Trustees also considered other services provided to the Funds by the Adviser and the Sub-Adviser such as selecting broker-dealers for executing portfolio transactions, monitoring adherence to the Funds’ investment restrictions, and monitoring compliance with various Fund policies and procedures and with applicable securities laws and regulations. Based on the factors above, as well as those discussed below, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of the services provided to the Funds by the Adviser and the Sub-Adviser were sufficient to support renewal of the Agreements.
Investment Performance of the Funds, the Adviser and the Sub-Adviser
The Board was provided with regular reports regarding the Funds’ performance over various time periods. The Trustees also reviewed reports prepared by the Funds’ administrator comparing the Funds’ performance to their benchmark indices and peer groups of mutual funds as classified by Lipper, an independent provider of investment company data, over various periods of time. Representatives from the Adviser and the Sub-Adviser provided information regarding and led discussions of factors impacting the performance of the Funds, outlining current market conditions and explaining their expectations and strategies for the future. The Trustees determined that the Funds’ performance was satisfactory, or, where the Funds’ performance was materially below their benchmarks and/or peer groups, the Trustees were satisfied by the reasons for the underperformance and/or the steps taken by the Adviser and the Sub-Adviser in an effort to improve the performance of the Funds. Based on this information, the Board concluded, within the context of its full deliberations, that the investment results that the Adviser and the Sub-Adviser had been able to achieve for the Funds were sufficient to support renewal of the Agreements.
Costs of Advisory Services, Profitability and Economies of Scale
In considering the advisory fees payable by the Funds to the Adviser, as well as the fee payable by the Adviser to the Sub-Adviser, the Trustees reviewed, among other things, a report of the advisory fees paid to the Adviser and the Sub-Adviser. The Trustees also reviewed reports prepared by the Funds’ administrator comparing the Funds’ net and gross expense ratios and advisory fees to those paid by peer groups of mutual funds as classified by Lipper. The Trustees reviewed the management fees charged by the Sub-Adviser to other clients with comparable mandates. The Trustees considered any differences in management fees and took into account the respective demands, resources and complexity associated with the Bishop Street Dividend Value Fund and other client accounts as well as the extensive regulatory, compliance and tax regimes to which the Fund is subject. The Trustees also considered that the Adviser, not the Bishop Street Dividend Value Fund, paid the Sub-Adviser pursuant to the sub-advisory agreement and that the fee payable to the Sub-Adviser reflected an arms-length negotiation
June 30, 2018 | www.bishopstreetfunds.com |
45
Bishop Street Funds | (unaudited) |
between the Adviser and the Sub-Adviser. The Trustees evaluated both the fee under the sub-advisory agreement and the portion of the fee under the advisory agreement retained by the Adviser. The Board concluded, within the context of its full deliberations, that the advisory fees were reasonable in light of the nature and quality of the services rendered by the Adviser and the Sub-Adviser.
The Trustees reviewed the costs of services provided by and the profits realized by the Adviser and the Sub-Adviser from their relationship with the Funds, including both direct benefits and indirect benefits, such as research and brokerage services received under soft dollar arrangements, accruing to the Adviser and the Sub-Adviser and their affiliates. The Trustees considered how the Adviser’s and the Sub-Adviser’s profitability was affected by factors such as their organizational structures and methods for allocating expenses. The Trustees concluded that the profit margins of the Adviser and the Sub-Adviser with respect to the management of the Funds were not unreasonable. The Board also considered the Adviser’s and the Sub-Adviser’s commitment to managing the Funds and the Adviser’s willingness to continue its expense limitation and fee waiver arrangements with the Funds.
The Trustees considered the Adviser’s and Sub-Adviser’s views relating to economies of scale in connection with the Funds as Fund assets grow and the extent to which the benefits of any such economies of scale are shared with the Funds and Fund shareholders. The Board considered the existence of any economies of scale and whether those were passed along to the Funds’ shareholders through a graduated advisory fee schedule or other means, including fee waivers. The Trustees recognized that economies of scale are difficult to identify and quantify and are rarely identifiable on a fund-by-fund basis. Based on this evaluation, the Board concluded that the advisory fees were reasonable in light of the information that was provided to the Trustees by the Adviser and the Sub-Adviser with respect to economies of scale.
Renewal of the Agreements
Based on the Board’s deliberations and its evaluation of the information described above and other factors and information it believed relevant in the exercise of its reasonable business judgment, the Board, including all of the Independent Trustees, with the assistance of Fund counsel and Independent Trustees’ counsel, unanimously concluded that the terms of the Agreements, including the fees payable thereunder, were fair and reasonable and agreed to renew the Agreements for another year. In its deliberations, the Board did not identify any absence of information as material to its decision, or any particular factor (or conclusion with respect thereto) or single piece of information that was all-important, controlling or determinative of its decision, but considered all of the factors together, and each Trustee may have attributed different weights to the various factors (and conclusions with respect thereto) and information.
Bishop Street Funds |
46
Bishop Street Funds | (unaudited) |
A Special Meeting of the Shareholders of the Bishop Street Funds (the “Trust”) was held on March 26, 2018 for the purpose of electing the following eight Trustees to the Board of Trustees of the Trust: Robert Nesher, N. Jeffrey Klauder, Joseph T. Grause, Jr., Mitchell A. Johnson, Betty L. Krikorian, Bruce Speca, George J. Sullivan, Jr. and Tracie E. Ahern. There were 22,490,220 outstanding shares, 18,485,605 shares were voted representing 64.88% of the eligible outstanding shares. The results of the election are as follows:
Trustee/Nominee | Shares Voted For | Shares Withheld | Percentage Voted in Favor of | Percentage Withheld | ||||||||||||
Robert Nesher | 18,485,605 | 0 | 100.00 | % | 0.00 | % | ||||||||||
N. Jeffrey Klauder | 18,479,999 | 5,606 | 99.97 | % | 0.03 | % | ||||||||||
Joseph T. Grause, Jr. | 18,479,999 | 5,606 | 99.97 | % | 0.03 | % | ||||||||||
Mitchell A. Johnson | 18,485,605 | 0 | 100.00 | % | 0.00 | % | ||||||||||
Betty L. Krikorian | 18,485,605 | 0 | 100.00 | % | 0.00 | % | ||||||||||
Bruce Speca | 18,485,605 | 0 | 100.00 | % | 0.00 | % | ||||||||||
George J. Sullivan, Jr. | 18,479,999 | 5,606 | 99.97 | % | 0.03 | % | ||||||||||
Tracie E. Ahern | 18,485,605 | 0 | 100.00 | % | 0.00 | % |
June 30, 2018 | www.bishopstreetfunds.com |
47
INVESTMENT ADVISER
BISHOP STREET CAPITAL MANAGEMENT
HONOLULU, HI 96813
ADMINISTRATOR
SEI INVESTMENTS GLOBAL FUNDS SERVICES
ONE FREEDOM VALLEY DRIVE
OAKS, PA 19456
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
ONE FREEDOM VALLEY DRIVE
OAKS, PA 19456
TRANSFER AGENT
DST SYSTEMS, INC.
KANSAS CITY, MO 64121
CUSTODIAN
MUFG UNION BANK, N.A.
SAN FRANCISCO, CA 94104
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS LLP
PHILADELPHIA, PA 19103
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PRICEWATERHOUSECOOPERS LLP
PHILADELPHIA, PA 19103
FORMOREINFORMATIONABOUT BISHOP STREET FUNDS,CALL 1-800-262-9565
ORYOUR INVESTMENT SPECIALIST
VISITUSONLINEATWWW.BISHOPSTREETFUNDS.COM
![]() | BISHOP STREET FUNDS P.O. BOX 219721 KANSAS CITY, MO 64121-9721 |
THISREPORTANDTHEFINANCIALSTATEMENTSCONTAINEDHEREINARESUBMITTEDFORTHEGENERALINFORMATIONOF BISHOP STREET FUNDS’SHAREHOLDERS. THISREPORTISNOTAUTHORIZEDFORDISTRIBUTIONTOPROSPECTIVEINVESTORSUNLESSPRECEDEDORACCOMPANIEDBYANEFFECTIVEPROSPECTUS.
SHARESOF BISHOP STREET FUNDSARE NOTDEPOSITSOROBLIGATIONSOF,ORGUARANTEEDBY FIRST HAWAIIAN BANKORANYOFITSAFFILIATES. SUCHSHARESAREALSO NOTFEDERALLYINSUREDBYTHE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,ORANYOTHERAGENCY. INVESTMENTINSHARESOFMUTUALFUNDSINVOLVESRISK,INCLUDINGTHEPOSSIBLELOSSOFPRINCIPAL. THE BISHOP STREET FUNDSAREDISTRIBUTEDBY SEI INVESTMENTS DISTRIBUTION CO.,WHICHIS NOTAFFILIATEDWITH FIRST HAWAIIAN BANK, BANKOFTHE WESTOR BANCWEST CORPORATION. BANCWEST CORPORATIONISAWHOLLY-OWNEDSUBSIDIARYOF BNP PARIBAS.
BSF-SA-004-2400
Item 2. | Code of Ethics. |
Not applicable for semi-annual report.
Item 3. | Audit Committee Financial Expert. |
Not applicable for semi-annual report.
Item 4. | Principal Accountant Fees and Services. |
Not applicable for semi-annual report.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable to open-end management investment companies.
Item 6. | Schedule of Investments. |
Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this form.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable to open-end management investment companies.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable. Effective for closed-end management investment companies for fiscal years ending on or after December 31, 2005.
Item 9. | Purchases of Equity Securities by Closed-End Management Company and Affiliated Purchasers. |
Not applicable to open-end management investment companies.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees during the period covered by this report.
Item 11. | Controls and Procedures. |
(a) The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report, are effective based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.30a-15(b)) or 240.15d-15(b)).
(b) There has been no change in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
Items 13. | Exhibits. |
(a)(1) Not applicable for semi-annual report.
(a)(2) A separate certification for the principal executive officer and the principal financial officer of the Registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), is filed herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant)
Bishop Street Funds | ||||
By (Signature and Title)* | /s/ Michael Beattie | |||
Michael Beattie | ||||
Date: September 6, 2018 | President |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Michael Beattie | |||
Michael Beattie | ||||
Date: September 6, 2018 | President |
By (Signature and Title)* | /s/ Stephen Connors | |||
Stephen Connors | ||||
Date: September 6, 2018 | Treasurer, Controller & CFO |