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)
--------
2 Oliver Street
Boston, MA 02109
(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: 1-888-462-5386
DATE OF FISCAL YEAR END: DECEMBER 31, 2005
DATE OF REPORTING PERIOD: JUNE 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED]
[BACKGROUND OMITTED]
BISHOP STREET
FUNDS
SEMI-ANNUAL
REPORT
JUNE 30, 2005
EQUITY FUND
STRATEGIC GROWTH FUND
TAX MANAGED EQUITY FUND
HIGH GRADE INCOME FUND
HAWAII MUNICIPAL BOND FUND
MONEY MARKET FUND
TREASURY MONEY MARKET FUND
INVESTMENT ADVISER
BISHOP STREET
CAPITAL MANAGEMENT
[BISHOP STREET LOGO OMITTED]
The Funds file their complete schedule of portfolio holdings with the Securities
and Exchange 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.
BISHOP STREET
TABLE OF CONTENTS
FUNDS
LETTER TO SHAREHOLDERS .............................................. 2
STATEMENTS OF NET ASSETS
Equity Fund ................................................... 4
Strategic Growth Fund ......................................... 9
Tax Managed Equity Fund ....................................... 13
High Grade Income Fund ........................................ 17
Hawaii Municipal Bond Fund .................................... 25
Money Market Fund ............................................. 35
Treasury Money Market Fund .................................... 39
STATEMENTS OF OPERATIONS ............................................ 42
STATEMENTS OF CHANGES IN NET ASSETS ................................. 44
FINANCIAL HIGHLIGHTS ................................................ 48
NOTES TO FINANCIAL STATEMENTS ....................................... 52
DISCLOSURE OF FUND EXPENSES ......................................... 60
APPROVAL OF INVESTMENT ADVISORY AND
SUB-ADVISORY AGREEMENTS ....................................... 62
SHAREHOLDER VOTING RESULTS .......................................... 65
1
BISHOP STREET
LETTER TO SHAREHOLDERS
FUNDS
[Dale Kobayashi Photo Omitted]
The second quarter of 2005 did little to resolve the growing uncertainty about
the economy and the markets. In the end, stocks moved up ever so slightly, but
were still down for the year. Although the final tally of economic growth for
the first quarter was surprisingly strong at 3.80%, and inflation remained under
control, stock investors had nagging doubts. Chief among these: tightening
monetary policy, record oil prices, and increasing indications of a real estate
bubble. Meanwhile, bond investors seemed to ignore rising short-term rates (the
Federal-funds rate hit 3.25% after the 9th consecutive quarter point hike), and
the potential inflationary effects of higher energy prices. Instead of
inflation, bond markets are pointing towards slowing economic growth, pushing
the 10-year Treasury yield once again under 4.00%. As a result, the yield curve
has flattened dramatically.
Looking ahead, we share the view that economic growth will continue to slow,
although not to "stall" speed. Such is the combined effect of oil, monetary
policy, and an economic recovery now in its fourth year. Each time the Federal
Reserve (the "Fed") lifts interest rates, however, the stakes seem to grow a
little higher, even as the end of the tightening cycle comes, tantalizingly, a
little nearer. In large part, it is our expectation of an end to monetary
tightening, along with attractive valuations relative to bonds, which underpins
our positive outlook for the stock market. Of course, there is no guarantee the
Fed will "get
Bishop Street Funds 2
[BISHOP STREET LOGO OMITTED]
it right", and there are plenty of unexpected shocks which could derail our
forecast (as we are reminded by the recent terrorist attacks in London), but
history has shown repeatedly: don't underestimate the resilience of the U.S.
economy.
Thank you for your continued support and confidence.
Sincerely,
/s/ Dale Kobayashi
Dale Kobayashi
President and Chief Investment Officer
Bishop Street Capital Management
June 30, 2005 3 www.bishopstreetfunds.com
Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS+
- --------------------------------------------------------------------------------
Percentage of
Investments
----------------------------------------------------------------------------
1 PepsiCo 3.3%
----------------------------------------------------------------------------
2. Citigroup 3.3%
----------------------------------------------------------------------------
3. Johnson & Johnson 3.2%
----------------------------------------------------------------------------
4. General Electric 3.2%
----------------------------------------------------------------------------
5. Pfizer 3.0%
----------------------------------------------------------------------------
6. GlobalSantaFe 2.9%
----------------------------------------------------------------------------
7. Microsoft 2.9%
----------------------------------------------------------------------------
8. JPMorgan Chase 2.9%
----------------------------------------------------------------------------
9. Amgen 2.8%
----------------------------------------------------------------------------
10. Intel 2.8%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS+
16.4% Information Technology
15.5% Health Care
14.6% Financials
13.2% Industrials
12.2% Energy
10.9% Consumer Staples
9.0% Consumer Discretionary
3.7% Materials
2.4% Short-Term Investments
2.1% Telecommunication Services
- --------------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. EXCLUDES SECURITIES PURCHASED WITH
CASH COLLATERAL RECEIVED FROM SECURITIES LENDING.
STATEMENT OF NET ASSETS
Market
Value
Shares (000)
--------- ---------
COMMON STOCK -- 98.7%
CONSUMER DISCRETIONARY -- 9.1%
21,410 Carnival (A) $ 1,168
41,120 Comcast, Cl A* (A) 1,262
73,080 eBay* 2,412
61,723 IAC/InterActiveCorp* (A) 1,484
15,657 Mohawk Industries* 1,292
12,503 Omnicom Group 999
35,000 Viacom, Cl B 1,121
--------
9,738
--------
Bishop Street Funds 4
Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
-------- ---------
CONSUMER STAPLES -- 11.0%
48,686 CVS $ 1,415
66,950 PepsiCo 3,611
54,720 Procter & Gamble 2,886
67,610 Sysco (A) 2,447
29,160 Wal-Mart Stores 1,406
--------
11,765
--------
ENERGY -- 12.3%
33,880 Devon Energy 1,717
48,080 Exxon Mobil 2,763
77,210 GlobalSantaFe 3,150
56,240 Halliburton 2,689
37,538 Schlumberger Ltd. 2,851
--------
13,170
--------
FINANCIALS -- 14.8%
18,440 AMBAC Financial Group 1,286
25,933 American Express 1,381
77,133 Citigroup 3,566
26,560 Goldman Sachs Group 2,710
87,950 JPMorgan Chase 3,106
31,404 St. Paul Travelers 1,241
40,610 Wells Fargo 2,501
--------
15,791
--------
HEALTH CARE -- 15.7%
50,430 Amgen* 3,049
63,014 Boston Scientific* 1,701
16,140 Eli Lilly 899
14,280 Forest Laboratories* 555
12,731 Genzyme* 765
14,560 Gilead Sciences* 641
54,019 Johnson & Johnson 3,511
118,061 Pfizer 3,256
46,014 UnitedHealth Group 2,399
--------
16,776
--------
June 30, 2005 5 www.bishopstreetfunds.com
Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
-------- --------
INDUSTRIALS -- 13.4%
13,360 Apollo Group, Cl A* $ 1,045
39,300 Danaher 2,057
100,175 General Electric 3,471
17,200 Joy Global 578
27,832 Pentair 1,192
70,110 Tyco International Ltd. (A) 2,047
19,820 Union Pacific 1,284
19,800 United Parcel Service Inc/Georgia, Cl B 1,369
24,080 United Technologies 1,237
--------
14,280
--------
INFORMATION TECHNOLOGY -- 16.6%
81,039 Applied Materials* (A) 1,311
72,890 Cisco Systems* 1,393
50,642 Dell* 2,001
46,970 EMC Corp/Massachusetts* 644
86,200 Flextronics International Ltd.* 1,139
116,900 Intel 3,046
13,222 International Business Machines 981
17,112 Linear Technology 628
11,930 Mercury Interactive* 458
126,194 Microsoft 3,135
37,340 Paychex 1,215
33,110 Qualcomm 1,093
32,866 Symantec* 714
--------
17,758
--------
MATERIALS -- 3.7%
35,776 Alcoa 935
35,760 Dow Chemical (A) 1,592
31,600 Praxair 1,473
--------
4,000
--------
TELECOMMUNICATION SERVICES -- 2.1%
33,680 Verizon Communications 1,164
45,010 Vodafone Group ADR* (A) 1,094
--------
2,258
--------
TOTAL COMMON STOCK (Cost $99,280) 105,536
--------
Bishop Street Funds 6
Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Shares/Face Value
Amount (000) (000)
-------------- ---------
CASH EQUIVALENTS -- 2.5%
1,320,105 Dreyfus Cash Management Fund $ 1,320
1,320,077 Fidelity Institutional Money Market Fund 1,320
--------
TOTAL CASH EQUIVALENTS (Cost $2,640) 2,640
--------
CORPORATE OBLIGATIONS (B) -- 2.9%
FINANCIALS -- 2.9%
Bank of America
$1,013 3.518%, 07/01/05 1,013
Bear Stearns
1,013 3.588%, 07/06/05 1,013
Bear Stearns MTN (C)
1,013 3.536%, 01/12/06 1,013
--------
TOTAL CORPORATE OBLIGATIONS (Cost $3,039) 3,039
--------
CERTIFICATES OF DEPOSIT/BANK NOTES (B)(C) -- 1.9%
First Tennessee Bank
2,026 3.080%, 03/21/06 2,026
--------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $2,026) 2,026
--------
COMMERCIAL PAPER (B)(C) -- 1.4%
Morgan Stanley
1,519 3.508%, 08/19/05 1,519
--------
TOTAL COMMERCIAL PAPER (Cost $1,519) 1,519
--------
REPURCHASE AGREEMENTS (B) -- 4.7%
Bank of America 3.490%, dated 06/30/05,
to be repurchased on 07/01/05, repurchase price
$3,737,400 (collateralized by various corporate
obligations, par value $3,818,446, 5.000%, 12/16/13;
3,737 total market value $3,923,890) 3,737
Lehman Brothers 3.508%, dated 06/30/05,
to be repurchased on 07/01/05, repurchase price
$1,311,010 (collateralized by a mortgage obligation,
par value $1,598,060, 4.080%, 03/25/33; total market
1,311 value $1,376,657) 1,311
--------
TOTAL REPURCHASE AGREEMENTS (Cost $5,048) 5,048
--------
TOTAL INVESTMENTS (COST $113,552) -- 112.1% 119,808
--------
June 30, 2005 7 www.bishopstreetfunds.com
Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
---------
OTHER ASSETS AND LIABILITIES -- (12.1)%
Payable Upon Return of Securities Loaned $(11,632)
Payable for Capital Shares Redeemed (1,276)
Investment Adviser Fees Payable (60)
Administrative Fees Payable (11)
Shareholder Servicing Fees Payable (9)
Other Assets and Liabilities, Net 103
--------
TOTAL OTHER ASSETS AND LIABILITIES (12,885)
--------
NET ASSETS -- 100.0% $106,923
========
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $157,608
Distributions in Excess of Net Investment Income (6)
Accumulated Net Realized Loss on Investments (56,935)
Net Unrealized Appreciation on Investments 6,256
--------
NET ASSETS $106,923
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($106,922,902 / 11,345,294 SHARES) $ 9.42
========
* NON-INCOME PRODUCING SECURITY
(A) THE SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2005 (SEE
NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS.) THE TOTAL VALUE OF SECURITIES
ON LOAN AT JUNE 30, 2005 WAS $11,215,841.
(B) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING (SEE NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS.) THE
TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2005 WAS $11,631,528.
(C) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 2005. THE MATURITY DATE SHOWN IS THE NEXT
SCHEDULED RESET DATE.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
LTD. -- LIMITED
MTN -- MEDIUM TERM NOTE
COST FIGURES ARE SHOWN WITH "000S" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds 8
Strategic Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS+
- --------------------------------------------------------------------------------
Percentage of
Investments
----------------------------------------------------------------------------
1. Express Scripts 2.2%
----------------------------------------------------------------------------
2. Nordstrom 2.2%
----------------------------------------------------------------------------
3. L-3 Communications Holdings 2.2%
----------------------------------------------------------------------------
4. IVAX 2.2%
----------------------------------------------------------------------------
5. WellPoint 2.1%
----------------------------------------------------------------------------
6. Lehman Brothers Holdings 2.1%
----------------------------------------------------------------------------
7. Coach 2.1%
----------------------------------------------------------------------------
8. Jabil Circuit 2.1%
----------------------------------------------------------------------------
9. UnitedHealth Group 2.1%
----------------------------------------------------------------------------
10. Western Digital 2.1%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS+
24.1% Information Technology
19.9% Health Care
19.7% Consumer Discretionary
15.4% Financials
11.8% Industrials
3.9% Energy
2.0% Telecommunication Services
1.9% Materials
1.3% Short-Term Investments
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Market
Value
Shares (000)
-------- --------
COMMON STOCK -- 98.3%
CONSUMER DISCRETIONARY -- 19.6%
26,200 Apollo Group, Cl A* $ 2,049
47,100 Bed Bath & Beyond* 1,968
63,000 Coach* 2,115
26,400 Federated Department Stores 1,934
21,900 Harman International Industries 1,782
78,107 Hilton Hotels 1,863
33,200 Lowe's 1,933
32,700 Nordstrom 2,223
82,950 Staples 1,768
37,800 Yum! Brands 1,969
-------
19,604
-------
June 30, 2005 9 www.bishopstreetfunds.com
Strategic Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
-------- --------
ENERGY -- 4.0%
35,400 BJ Services $ 1,858
60,800 XTO Energy 2,067
-------
3,925
-------
FINANCIALS -- 15.3%
33,700 Allstate 2,014
38,700 Bank of America 1,765
25,400 Capital One Financial 2,032
38,400 Citigroup 1,775
20,300 Everest Re Group Ltd. 1,888
18,200 Goldman Sachs Group 1,857
21,400 Lehman Brothers Holdings 2,125
41,200 Moody's 1,852
-------
15,308
-------
HEALTH CARE -- 19.8%
23,400 Aetna 1,938
29,700 Amgen* 1,796
45,300 Caremark Rx* 2,017
44,600 Express Scripts* 2,229
32,000 Genzyme* 1,923
45,300 Gilead Sciences* 1,993
17,900 Invitrogen* 1,490
99,800 IVAX* 2,146
40,000 UnitedHealth Group 2,085
30,600 WellPoint* 2,131
-------
19,748
-------
INDUSTRIALS -- 11.7%
88,600 Cendant 1,982
23,200 FedEx 1,880
94,100 JetBlue Airways* 1,923
28,300 L-3 Communications Holdings 2,167
64,000 Norfolk Southern 1,982
34,800 United Technologies 1,787
-------
11,721
-------
INFORMATION TECHNOLOGY -- 24.0%
77,700 Accenture Ltd., Cl A* 1,761
54,700 Apple Computer* 2,014
55,700 Autodesk 1,914
242,500 Avaya* 2,018
100,400 Cisco Systems* 1,919
Bishop Street Funds 10
Strategic Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
-------- --------
INFORMATION TECHNOLOGY -- (CONTINUED)
14,500 Cognos* $ 495
45,600 Dell* 1,802
76,500 Intel 1,994
68,500 Jabil Circuit* 2,105
46,800 Mercury Interactive* 1,795
111,600 Motorola 2,038
76,700 Nvidia* 2,049
154,600 Western Digital* 2,075
-------
23,979
-------
MATERIALS -- 1.9%
42,200 Dow Chemical 1,879
-------
TELECOMMUNICATION SERVICES -- 2.0%
63,000 Nextel Communications, Cl A* 2,035
-------
TOTAL COMMON STOCK (Cost $85,158) 98,199
-------
CASH EQUIVALENTS -- 1.3%
656,485 Dreyfus Cash Management Fund 656
656,485 Fidelity Institutional Money Market Fund 656
-------
TOTAL CASH EQUIVALENTS (Cost $1,312) 1,312
-------
TOTAL INVESTMENTS (COST $86,470) -- 99.6% 99,511
-------
OTHER ASSETS AND LIABILITIES -- 0.4%
Payable for Investment Securities Purchased (1,530)
Investment Adviser Fees Payable (60)
Payable for Capital Shares Redeemed (14)
Administrative Fees Payable (9)
Shareholder Servicing Fees Payable (8)
Other Assets and Liabilities, Net 2,015
-------
TOTAL OTHER ASSETS AND LIABILITIES 394
-------
NET ASSETS -- 100.0% $99,905
=======
June 30, 2005 11 www.bishopstreetfunds.com
Strategic Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
--------
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $86,226
Accumulated Net Investment Loss (175)
Accumulated Net Realized Gain on Investments 813
Net Unrealized Appreciation on Investments 13,041
-------
NET ASSETS $99,905
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($99,905,167 / 7,701,395 SHARES) $ 12.97
=======
* NON-INCOME PRODUCING SECURITY
CL -- CLASS
LTD. -- LIMITED
COST FIGURES ARE SHOWN WITH "000S" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds 12
Tax Managed Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS+
- --------------------------------------------------------------------------------
Percentage of
Investments
----------------------------------------------------------------------------
1. Citigroup 4.2%
----------------------------------------------------------------------------
2. Exxon Mobil 3.7%
----------------------------------------------------------------------------
3. General Electric 3.3%
----------------------------------------------------------------------------
4. Johnson & Johnson 3.0%
----------------------------------------------------------------------------
5. Amgen 2.6%
----------------------------------------------------------------------------
6. Altria Group 2.4%
----------------------------------------------------------------------------
7. Microsoft 2.4%
----------------------------------------------------------------------------
8. Pfizer 2.3%
----------------------------------------------------------------------------
9. Halliburton 2.2%
----------------------------------------------------------------------------
10. JPMorgan Chase 2.1%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS+
18.3% Financials
15.3% Information Technology
12.0% Energy
11.9% Industrials
11.6% Health Care
10.7% Consumer Discretionary
10.6% Consumer Staples
4.8% Materials
2.5% Telecommunication Services
1.7% Utilities
0.6% Short-Term Investments
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Market
Value
Shares (000)
--------- ---------
COMMON STOCK -- 97.4%
CONSUMER DISCRETIONARY -- 10.5%
4,300 Carnival $ 235
12,600 Comcast, Cl A* 387
13,900 eBay* 459
8,930 Home Depot 347
26,710 IAC/InterActiveCorp* 642
4,700 Mohawk Industries* 388
4,000 Omnicom Group 319
6,950 Target 378
June 30, 2005 www.bishopstreetfunds.com
13
Tax Managed Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
--------- --------
CONSUMER DISCRETIONARY -- (CONTINUED)
14,750 Time Warner* $ 246
14,200 Viacom, Cl B 455
-------
3,856
-------
CONSUMER STAPLES -- 10.4%
13,400 Altria Group 867
11,380 Avon Products 431
15,000 CVS 436
10,180 PepsiCo 549
11,940 Procter & Gamble 630
12,000 Sysco 434
9,200 Wal-Mart Stores 443
-------
3,790
-------
ENERGY -- 11.8%
8,820 Chevron 493
12,000 Devon Energy 608
23,000 Exxon Mobil 1,322
12,730 GlobalSantaFe 520
16,250 Halliburton 777
7,850 Schlumberger Ltd. 596
-------
4,316
-------
FINANCIALS -- 17.9%
4,200 Aflac 182
10,500 Allstate 627
7,580 American Express 403
3,130 American International Group* 182
32,400 Citigroup 1,498
4,300 Goldman Sachs Group 439
21,790 JPMorgan Chase 770
5,760 Merrill Lynch 317
13,200 Montpelier Re Holdings Ltd. 456
13,230 Wachovia 656
6,500 Washington Mutual 265
12,230 Wells Fargo 753
-------
6,548
-------
HEALTH CARE -- 11.3%
15,400 Amgen* 931
6,200 Eli Lilly 345
3,670 Genzyme* 221
16,340 Johnson & Johnson 1,062
30,088 Pfizer 830
Bishop Street Funds
14
Tax Managed Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
--------- --------
HEALTH CARE -- (CONTINUED)
14,560 UnitedHealth Group $ 759
-------
4,148
-------
INDUSTRIALS -- 11.7%
5,690 3M 411
3,330 General Dynamics 365
34,100 General Electric 1,182
4,900 Illinois Tool Works 390
4,000 Joy Global 134
13,080 Pentair 560
9,850 Tyco International Ltd. 288
7,470 Union Pacific 484
8,850 United Technologies 455
-------
4,269
-------
INFORMATION TECHNOLOGY -- 15.0%
23,500 Applied Materials* 380
25,480 Cisco Systems* 487
13,060 Dell* 516
15,480 EMC Corp/Massachusetts* 212
25,200 Flextronics International Ltd.* 333
26,740 Intel 697
5,400 International Business Machines 401
5,070 Linear Technology 186
34,200 Microsoft 849
13,640 Paychex 444
10,520 Qualcomm 347
20,000 Symantec* 435
7,700 Texas Instruments 216
-------
5,503
-------
MATERIALS -- 4.8%
15,960 Alcoa 417
11,100 Dow Chemical 494
8,100 E.I. Du Pont de Nemours 349
10,220 Praxair 476
-------
1,736
-------
TELECOMMUNICATION SERVICES -- 2.4%
13,030 Verizon Communications 450
18,000 Vodafone Group ADR* 438
-------
888
-------
UTILITIES -- 1.6%
11,600 Exelon 595
-------
TOTAL COMMON STOCK (Cost $30,628) 35,649
-------
June 30, 2005 www.bishopstreetfunds.com
15
Tax Managed Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
--------- --------
CASH EQUIVALENTS -- 0.6%
104,810 Dreyfus Cash Management Fund $ 105
104,810 Fidelity Institutional Money Market Fund 105
-------
TOTAL CASH EQUIVALENTS (Cost $210) 210
-------
TOTAL INVESTMENTS (COST $30,838) -- 98.0% 35,859
-------
OTHER ASSETS AND LIABILITIES -- 2.0%
Investment Adviser Fees Payable (18)
Payable for Capital Shares Redeemed (12)
Administrative Fees Payable (4)
Shareholder Servicing Fees Payable (3)
Other Assets and Liabilities, Net 768
-------
TOTAL OTHER ASSETS AND LIABILITIES 731
-------
NET ASSETS -- 100.0% $36,590
=======
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $31,123
Accumulated Net Realized Gain on Investments 446
Net Unrealized Appreciation on Investments 5,021
-------
NET ASSETS $36,590
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($36,590,135 / 3,090,170 SHARES) $ 11.84
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
LTD. -- LIMITED
COST FIGURES ARE SHOWN WITH "000S" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
16
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS+
- --------------------------------------------------------------------------------
Percentage
Coupon Maturity of
Rate Date Investments
- --------------------------------------------------------------------------------
1. U.S. Treasury Bonds 7.250% 05/15/16 6.2%
----------------------------------------------------------------------------
2. FNMA 3.750% 09/15/08 3.4%
----------------------------------------------------------------------------
3. U.S. Treasury Bonds 5.375% 02/15/31 3.4%
----------------------------------------------------------------------------
4. U.S. Treasury Bonds 6.250% 08/15/23 3.4%
----------------------------------------------------------------------------
5. FNMA 7.250% 01/15/10 2.8%
----------------------------------------------------------------------------
6. U.S. Treasury Bonds 6.375% 08/15/27 2.7%
----------------------------------------------------------------------------
7. U.S. Treasury Bonds 7.500% 11/15/16 2.5%
----------------------------------------------------------------------------
8. U.S. Treasury Notes 2.375% 08/15/06 2.1%
----------------------------------------------------------------------------
9. FHLMC MTN 4.850% 12/01/09 2.0%
----------------------------------------------------------------------------
10. FNMA 2.540% 01/12/07 1.8%
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS+
27.9% U.S. Treasury Obligations
25.9% U.S. Government Agency Obligations
12.1% Financials
7.1% Industrials
6.8% Consumer Discretionary
4.9% Energy
3.5% Health Care
3.1% Consumer Staples
2.8% Short-Term Investments
2.6% U.S. Government Mortgage-Backed Obligations
1.4% Telecommunication Services
1.0% Information Technology
0.9% Collaterlized Mortgage Obligation
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. EXCLUDES SECURITIES PURCHASED WITH
CASH COLLATERAL RECEIVED FROM SECURITIES LENDING.
STATEMENT OF NET ASSETS
Face Market
Amount Value
(000) (000)
-------- --------
CORPORATE OBLIGATIONS -- 47.6%
AEROSPACE & DEFENSE -- 1.7%
General Dynamics
$ 1,000 4.500%, 08/15/10 $ 1,013
United Technologies
1,350 6.350%, 03/01/11 1,487
--------
2,500
--------
AUTOMOTIVE -- 0.5%
DaimlerChrysler NA Holding
700 8.000%, 06/15/10 791
--------
June 30, 2005 www.bishopstreetfunds.com
17
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
BANKS -- 1.7%
Bank of America
$ 2,350 4.875%, 01/15/13 $ 2,411
--------
BIOTECHNOLOGY -- 0.9%
Boston Scientific
1,350 4.250%, 01/12/11 1,331
--------
BROADCASTING & CABLE -- 2.0%
TCI Communications
1,400 7.875%, 08/01/13 1,666
Turner Broadcasting System
975 8.375%, 07/01/13 1,196
--------
2,862
--------
COMPUTER HARDWARE -- 1.0%
Dell
1,325 6.550%, 04/15/08 1,404
--------
FINANCIALS -- 17.7%
American General Finance MTN, Ser G
1,400 5.750%, 03/15/07 1,433
Bank of America (B)
3,987 3.518%, 07/01/05 3,987
Bear Stearns (B)
3,987 3.588%, 07/06/05 3,987
Bear Stearns MTN (B)(C)
3,987 3.536%, 01/12/06 3,991
Citigroup
2,300 6.750%, 12/01/05 2,326
Countrywide Home Loans MTN, Ser H
1,350 6.250%, 04/15/09 1,432
General Electric Capital MTN, Ser A
2,350 5.450%, 01/15/13 2,493
Goldman Sachs Group
2,350 6.600%, 01/15/12 2,612
JPMorgan Chase
1,350 3.500%, 03/15/09 1,316
Morgan Stanley
1,250 6.600%, 04/01/12 1,390
Unitrin
850 4.875%, 11/01/10 848
--------
25,815
--------
Bishop Street Funds
18
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- --------
FOOD & BEVERAGE -- 2.1%
ConAgra Foods
$ 1,325 7.875%, 09/15/10 $ 1,526
Kraft Foods
1,400 5.625%, 11/01/11 1,485
--------
3,011
--------
GENERAL MERCHANDISE -- 2.6%
Target
1,150 6.350%, 01/15/11 1,265
Wal-Mart Stores
2,400 8.000%, 09/15/06 2,505
--------
3,770
--------
HEALTH CARE -- 0.9%
UnitedHealth Group
1,250 5.200%, 01/17/07 1,270
--------
HOUSEHOLD PRODUCTS -- 0.4%
Rubbermaid
600 6.600%, 11/15/06 619
--------
MACHINERY - INDUSTRIAL -- 2.0%
Lennar, Ser B
1,400 5.500%, 09/01/14 1,430
Masco
1,350 5.875%, 07/15/12 1,448
--------
2,878
--------
MOVIES & ENTERTAINMENT -- 1.1%
Walt Disney MTN
1,400 6.200%, 06/20/14 1,554
--------
OIL & GAS - EQUIPMENT/SERVICES -- 1.3%
Baker Hughes
1,175 6.000%, 02/15/09 1,245
Kinder Morgan
675 6.800%, 03/01/08 713
--------
1,958
--------
OIL & GAS - EXPLORATION/PRODUCTION -- 2.3%
Anadarko Petroleum
1,250 7.200%, 03/15/29 1,520
Ocean Energy
1,700 7.250%, 10/01/11 1,899
--------
3,419
--------
June 30, 2005 www.bishopstreetfunds.com
19
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
---------- --------
OIL & GAS - INTEGRATED -- 1.2%
Atlantic Richfield
$ 1,385 9.125%, 03/01/11 $ 1,713
--------
PHARMACEUTICALS -- 1.7%
Abbott Laboratories
2,400 6.400%, 12/01/06 2,479
--------
REAL ESTATE -- 0.8%
Post Apartment Homes LP
1,050 7.700%, 12/20/10 1,194
--------
RETAIL - DRUGS -- 1.0%
CVS
1,400 4.875%, 09/15/14 1,423
--------
RETAIL - FOOD -- 0.6%
McDonald's MTN, Ser E
900 5.950%, 01/15/08 939
--------
SEMI-CONDUCTORS -- 0.9%
Duke Energy
1,275 4.200%, 10/01/08 1,270
--------
TELECOMMUNICATIONS -- 1.4%
GTE South, Ser C
675 6.000%, 02/15/08 697
New Cingular Wireless Services
1,350 7.350%, 03/01/06 1,380
--------
2,077
--------
TRANSPORTATION SERVICES -- 0.9%
FedEx
1,200 7.250%, 02/15/11 1,359
--------
UTILITIES -- 0.9%
Dominion Resources
1,350 4.125%, 02/15/08 1,344
--------
TOTAL CORPORATE OBLIGATIONS (Cost $68,880) 69,391
--------
Bishop Street Funds
20
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------------ --------
U.S. TREASURY OBLIGATIONS -- 27.5%
U.S. Treasury Bonds (A)
$ 2,750 7.500%, 11/15/16 $ 3,604
7,000 7.250%, 05/15/16 8,963
3,000 6.375%, 08/15/27 3,890
3,900 6.250%, 08/15/23 4,860
1,000 6.250%, 05/15/30 1,303
1,050 6.000%, 02/15/26 1,294
4,125 5.375%, 02/15/31 4,868
1,500 5.250%, 11/15/28 1,713
U.S. Treasury Notes
200 6.500%, 02/15/10 (A) 223
2,500 4.375%, 05/15/07 (A) 2,533
1,350 4.375%, 08/15/12 (A) 1,400
1,200 4.000%, 02/15/14 1,207
1,200 4.000%, 02/15/15 (A) 1,204
3,000 2.375%, 08/15/06 (A) 2,961
--------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $35,842) 40,023
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 25.6%
FHLB
200 6.875%, 08/13/10 226
1,350 5.375%, 02/15/07 1,382
1,400 4.750%, 08/13/10 1,443
2,000 4.000%, 03/10/08 2,001
1,000 3.875%, 07/24/09 996
1,750 3.875%, 02/12/10 (A) 1,740
1,800 3.750%, 08/15/08 1,789
2,500 3.375%, 02/15/08 (A) 2,467
FHLMC
2,400 5.125%, 10/15/08 2,488
1,400 4.750%, 05/06/13 1,386
1,350 4.375%, 07/30/09 (A) 1,349
1,400 4.375%, 03/01/10 1,402
FHLMC MTN
2,800 4.850%, 12/01/09 2,815
FNMA
3,600 7.250%, 01/15/10 (A) 4,082
1,250 5.500%, 07/18/12 1,251
1,400 4.400%, 03/08/10 1,403
800 3.875%, 11/17/08 795
5,000 3.750%, 09/15/08 (A) 4,956
2,700 2.540%, 01/12/07 2,649
625 2.350%, 03/30/09 (D) 625
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $37,119) 37,245
--------
June 30, 2005 www.bishopstreetfunds.com
21
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Shares/Face Value
Amount (000) (000)
------------------ --------
CASH EQUIVALENTS -- 2.7%
1,983,881 Dreyfus Cash Management Fund $ 1,984
1,983,881 Fidelity Institutional Money Market Fund 1,984
--------
TOTAL CASH EQUIVALENTS (Cost $3,968) 3,968
--------
CERTIFICATES OF DEPOSIT/BANK NOTES (B)(C) -- 5.5%
FINANCIALS -- 5.5%
First Tennessee Bank
$ 7,975 3.080%, 03/21/06 7,975
--------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $7,975) 7,975
--------
COMMERCIAL PAPER (B)(C) -- 4.1%
Morgan Stanley
5,981 3.508%, 08/19/05 5,981
--------
TOTAL COMMERCIAL PAPER (Cost $5,981) 5,981
--------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 2.5%
FHLMC
94 3.500%, 05/01/08 91
1,350 3.500%, 06/01/09 1,318
FHLMC, Ser 2922, Cl QE
1,000 5.000%, 05/15/34 999
FNMA
1,322 3.500%, 08/01/10 1,280
--------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $3,746) 3,688
--------
COLLATERALIZED MORTGAGE OBLIGATION -- 0.9%
Citicorp Mortgage Securities, Ser 2003-11, Cl 2A8
1,303 5.500%, 12/25/33 1,322
--------
TOTAL COLLATERALIZED MORTGAGE OBLIGATION (Cost $1,337) 1,322
--------
Bishop Street Funds
22
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- -------
REPURCHASE AGREEMENTS (B) -- 13.6%
Bank of America 3.490%, dated 06/30/05,
to be repurchased on 07/01/05, repurchase
price $3,737,400 (collateralized by various
corporate obligations, par value
$3,818,446, 5.000%, 12/16/13;
total market
$14,714 value $3,923,890) $ 14,714
Lehman Brothers 3.508%, dated 06/30/05,
to be repurchased on 07/01/05, repurchase
price $1,311,010, (collateralized by a mortgage
obligation, par value $1,598,060, 4.080%,
03/25/33; total market
5,161 value $1,376,657) 5,161
--------
TOTAL REPURCHASE AGREEMENTS (Cost $19,875) 19,875
--------
TOTAL INVESTMENTS (COST $184,723) -- 130.0% 189,468
--------
OTHER ASSETS AND LIABILITIES -- (30.0)%
Payable Upon Return of Securities Loaned (45,796)
Income Distribution Payable (209)
Investment Adviser Fees Payable (52)
Payable for Capital Shares Redeemed (34)
Administrative Fees Payable (13)
Shareholder Servicing Fees Payable (12)
Other Assets and Liabilities, Net 2,380
--------
TOTAL OTHER ASSETS AND LIABILITIES (43,736)
--------
NET ASSETS -- 100.0% $145,732
========
June 30, 2005 www.bishopstreetfunds.com
23
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
--------
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $139,859
Undistributed Net Investment Income 2
Accumulated Net Realized Gain on Investments 1,126
Net Unrealized Appreciation on Investments 4,745
--------
NET ASSETS $145,732
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($145,732,476 / 13,990,223 SHARES) $ 10.42
========
(A) THE SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2005 (SEE
NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS.) THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2005 WAS $44,777,892.
(B) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING (SEE NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS.)
THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2005 WAS $45,796,050.
(C) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 2005. THE MATURITY DATE SHOWN IS THE
NEXT SCHEDULED RESET DATE.
(D) STEP BOND -- COUPON RATE INCREASES IN INCREMENTS TO MATURITY. RATE
DISCLOSED IS AS OF JUNE 30, 2005.
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
LP -- LIMITED PARTNERSHIP
MTN -- MEDIUM TERM NOTE
NA -- NATIONAL ASSOCIATION
SER -- SERIES
COST FIGURES ARE SHOWN WITH "000S" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
24
Hawaii Municipal Bond Fund(UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS+
- --------------------------------------------------------------------------------
Percentage
Coupon Maturity of
Rate Date Investments
- -------------------------------------------------------------------------------------
1. Leander, Texas GO 5.170% 08/15/23 2.7%
-------------------------------------------------------------------------------
2. Puerto Rico Housing Financing Authority RB 5.000% 12/01/16 2.6%
-------------------------------------------------------------------------------
3. Hawaii State Department of Budget
& Finance RB 5.650% 10/01/27 2.3%
-------------------------------------------------------------------------------
4. Hawaii State Highway RB 5.000% 07/01/15 2.2%
-------------------------------------------------------------------------------
5. Honolulu City & County, Hawaii GO 5.000% 07/01/19 2.1%
-------------------------------------------------------------------------------
6. Hawaii State Airport System RB 5.750% 07/01/17 2.0%
-------------------------------------------------------------------------------
7. Maui County, Hawaii GO 5.000% 03/01/14 1.9%
-------------------------------------------------------------------------------
8. Schaumburg, Illinois GO 5.000% 12/01/38 1.6%
-------------------------------------------------------------------------------
9. Hawaii State Airport System RB 6.500% 07/01/14 1.6%
-------------------------------------------------------------------------------
10. Honolulu City & County, Hawaii RB 5.250% 07/01/18 1.5%
- -------------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS+
40.1% General Revenue
11.6% Transportation
6.3% Facilities
6.1% Airport
5.7% School District
5.2% Power
4.8% Higher Education
4.2% Utilities
4.1% Medical
3.2% Housing
2.9% Short-Term Investments
1.8% Single Family Housing
1.4% Water
1.0% Development
0.9% Education
0.7% Multifamily Housing
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Face Market
Amount Value
(000) (000)
-------- --------
MUNICIPAL BONDS -- 97.6%
ARKANSAS -- 2.8%
Alma, School District No. 30, Construction
Project, Ser D, GO
$ 1,015 4.800%, 01/01/33 $ 1,025
Alma, School District No. 30, Refunding
& Construction Project,
Ser C, GO
2,000 4.875%, 01/01/33 2,028
1,000 4.750%, 01/01/29 1,011
June 30, 2005 www.bishopstreetfunds.com
25
Hawaii Municipal Bond Fund (UNAUDITED)
- ----------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
ARKANSAS -- (CONTINUED)
Lincoln, School District No. 48, Construction Project, GO
$ 430 4.875%, 02/01/34 $ 435
Osceola, School District No. 001, Construction Project, GO
395 4.800%, 11/01/34 398
--------
4,897
--------
CALIFORNIA -- 2.1%
California State, GO
1,000 5.000%, 02/01/33 1,050
Coast, Unified School District, School Facilities District
1-B, GO, FSA Insured
1,610 5.050%, 08/01/40 298
Highland, Redevelopment Agency, Project Area No. 1
Tax Allocation, RB, AMBAC Insured
1,440 5.650%, 12/01/24 1,726
La Mesa-Spring Valley, School District, Electric of 2002 Project,
Ser B, GO, FGIC Insured
630 5.250%, 08/01/27 224
San Bernardino, Community College District, GO, FSA Insured
1,060 5.000%, 08/01/21 521
--------
3,819
--------
FLORIDA -- 0.3%
Leesburg, Utilities, RB, FGIC Insured
500 5.000%, 10/01/34 531
--------
HAWAII -- 76.3%
Hawaii County, Refunding & Improvement Project, Ser A, GO,
FGIC Insured
450 5.600%, 05/01/12 512
430 5.600%, 05/01/13 494
400 5.550%, 05/01/09 437
Hawaii County, Ser A, GO, FGIC Insured
630 5.500%, 07/15/12 708
Hawaii County, Ser A, GO, FSA Insured
1,000 5.625%, 05/15/19 1,094
500 5.400%, 05/15/15 543
1,000 5.250%, 05/15/11 1,086
1,000 5.000%, 07/15/23 1,067
Hawaii County, Ser A, GO, MBIA Insured
1,055 5.250%, 07/15/18 1,182
1,205 5.000%, 07/15/15 1,338
1,470 5.000%, 07/15/24 1,573
Bishop Street Funds
26
Hawaii Municipal Bond Fund (UNAUDITED)
- ------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
HAWAII -- (CONTINUED)
Hawaii State, Airport System, RB, AMT, FGIC Insured
$ 3,235 5.750%, 07/01/17 $ 3,591
250 5.250%, 07/01/21 264
Hawaii State, Airport System, Second Ser, RB, AMT, ETM
60 6.900%, 07/01/12 69
Hawaii State, Airport System, Second Ser, RB, AMT, ETM,
MBIA Insured
1,155 6.900%, 07/01/12 1,329
Hawaii State, Airport System, Ser B, RB, AMT, FGIC Insured
1,500 6.625%, 07/01/18 1,712
2,500 6.500%, 07/01/14 2,858
100 6.000%, 07/01/19 111
Hawaii State, Department of Budget & Finance, Electric Company &
Subsidiary Project, Ser A, RB, AMT, FGIC Insured
1,500 4.800%, 01/01/25 1,532
Hawaii State, Department of Budget & Finance, Electric Company &
Subsidiary Project, Ser B, RB, AMT, XLCA Insured
1,000 5.000%, 12/01/22 1,051
Hawaii State, Department of Budget & Finance, Hawaiian Electric,
Ser A, RB, AMT, AMBAC Insured
460 5.100%, 09/01/32 478
Hawaii State, Department of Budget & Finance, Hawaiian Electric,
Ser A, RB, AMT, MBIA Insured
785 6.200%, 05/01/26 812
3,810 5.650%, 10/01/27 4,197
Hawaii State, Department of Budget & Finance, Hawaiian Electric,
Ser C, RB, AMT, AMBAC Insured
1,000 6.200%, 11/01/29 1,124
Hawaii State, Department of Budget & Finance, Kapiolani
Health Care System Project, RB, Pre-Refunded @ 102 (A)
100 6.250%, 07/01/06 105
Hawaii State, Department of Budget & Finance, Queens
Health Systems, Ser B, RB, MBIA Insured
750 5.250%, 07/01/11 800
1,445 5.250%, 07/01/12 1,537
1,275 5.250%, 07/01/13 1,355
1,000 5.250%, 07/01/14 1,061
Hawaii State, Department of Budget & Finance, Special Purpose
Mortgage, Kapiolani Health Care System Project, RB,
Pre-Refunded @ 100 (A)
1,460 6.300%, 07/01/05 1,460
Hawaii State, Harbor Capital Improvement, RB, AMT, MBIA Insured
2,000 5.500%, 07/01/27 2,085
545 5.400%, 07/01/09 580
June 30, 2005 www.bishopstreetfunds.com
27
Hawaii Municipal Bond Fund (UNAUDITED)
- ----------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
HAWAII -- (CONTINUED)
Hawaii State, Harbor System, Ser A, RB, AMT, FSA Insured
$ 2,025 5.750%, 07/01/17 $ 2,227
670 5.750%, 07/01/29 726
1,210 5.700%, 07/01/16 1,331
1,000 5.600%, 07/01/15 1,100
Hawaii State, Harbor System, Ser B, RB, AMT, AMBAC Insured
200 5.500%, 07/01/19 219
Hawaii State, Harbor System, Ser B, RB, AMT, FSA Insured
1,000 5.000%, 01/01/13 1,090
Hawaii State, Highway, RB
1,000 6.000%, 07/01/08 1,087
2,000 6.000%, 07/01/09 2,224
Hawaii State, Highway, RB, FGIC Insured, Pre-Refunded @ 101 (A)
405 5.000%, 07/01/08 435
Hawaii State, Highway, RB, Pre-Refunded @ 102 (A)
375 5.250%, 07/01/06 392
Hawaii State, Highway, Ser A, RB, FSA Insured
1,000 5.000%, 07/01/20 1,090
Hawaii State, Highway, Ser B, RB, FSA Insured
3,500 5.000%, 07/01/15 3,916
2,000 5.000%, 07/01/16 2,225
Hawaii State, Housing, Finance & Development,
Affordable Rental Housing Program, Ser A, RB,
Pre-Refunded @ 102 (A)
750 6.050%, 07/01/05 765
315 6.000%, 07/01/05 321
Hawaii State, Housing, Finance & Development, Single-Family
Housing, Ser A, RB, AMT, FNMA Collateral
840 5.750%, 07/01/30 847
960 5.400%, 07/01/30 981
180 5.250%, 07/01/13 187
15 4.900%, 07/01/28 15
Hawaii State, Housing, Finance & Development, Single-Family
Housing, Ser B, RB, FNMA Collateral
1,000 5.450%, 07/01/17 1,038
Hawaii State, Housing, Finance & Development, University of
Hawaii Faculty Housing Project, RB, AMBAC Insured
700 5.650%, 10/01/16 712
415 5.000%, 10/01/06 422
395 4.850%, 10/01/05 397
Bishop Street Funds
28
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
HAWAII -- (CONTINUED)
Hawaii State, Kapolei Office Building, Ser A, COP, AMBAC Insured
$ 1,475 5.250%, 05/01/13 $ 1,585
1,000 5.000%, 05/01/08 1,055
1,000 5.000%, 05/01/14 1,064
1,100 5.000%, 05/01/15 1,170
1,500 5.000%, 05/01/16 1,595
1,000 5.000%, 05/01/17 1,063
500 5.000%, 05/01/18 531
Hawaii State, No. 1 Capitol District State Office, COP,
MBIA Insured
1,000 5.200%, 05/01/14 1,075
175 5.000%, 05/01/11 189
Hawaii State, Pacific Health Special Purpose, Ser A, RB
615 5.600%, 07/01/33 645
Hawaii State, Ser CL, GO
1,000 6.000%, 03/01/09 1,101
Hawaii State, Ser CL, GO, MBIA Insured
555 6.000%, 03/01/08 599
Hawaii State, Ser CM, GO, FGIC Insured
2,000 6.500%, 12/01/13 2,448
500 6.000%, 12/01/09 560
1,500 6.000%, 12/01/11 1,736
Hawaii State, Ser CN, GO, FGIC Insured, Pre-Refunded @ 102 (A)
540 5.250%, 03/01/07 573
Hawaii State, Ser CO, GO, FGIC Insured
200 6.000%, 09/01/05 201
Hawaii State, Ser CP, GO, FGIC Insured,
Partially Pre-Refunded @ 101 (A)
300 5.000%, 10/01/07 315
Hawaii State, Ser CR, GO, MBIA Insured, Pre-Refunded @ 101 (A)
270 5.250%, 04/01/08 290
2,500 5.250%, 04/01/08 2,686
1,000 4.750%, 04/01/08 1,061
Hawaii State, Ser CU, GO, MBIA Insured
500 5.750%, 10/01/11 561
550 5.750%, 10/01/12 616
Hawaii State, Ser CV, GO, FGIC Insured
1,000 5.250%, 08/01/21 1,089
Hawaii State, Ser CX, GO, FSA Insured
1,000 5.500%, 02/01/21 1,107
Hawaii State, Ser DF, GO, AMBAC Insured
2,000 5.000%, 07/01/25 2,152
Hawaii State, University of Hawaii, Ser A, RB, FGIC Insured
500 5.500%, 07/15/21 557
June 30, 2005 www.bishopstreetfunds.com
29
Hawaii Municipal Bond Fund (UNAUDITED)
- ------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
HAWAII -- (CONTINUED)
Hawaii State, University of Hawaii, Ser B, RB, FSA Insured
$ 320 5.250%, 10/01/16 $ 350
775 5.250%, 10/01/17 848
Hawaiian Home Lands Department, RB
1,250 4.000%, 07/01/05 1,250
Honolulu City & County, Board of Water Supply, Ser A, RB,
FGIC Insured
2,000 5.000%, 07/01/33 2,120
Honolulu City & County, FHA-Smith-Beretania, Ser 8A, RB,
MBIA Insured
1,000 5.450%, 01/01/25 1,002
Honolulu City & County, GO
1,320 5.400%, 09/27/07 1,393
200 2.850%, 09/11/08 200
Honolulu City & County, GO, ETM
230 6.000%, 12/01/09 258
Honolulu City & County, Ser A, GO
55 6.000%, 01/01/10 62
Honolulu City & County, Ser A, GO, ETM
500 6.000%, 01/01/09 551
95 6.000%, 01/01/10 107
245 5.700%, 04/01/09 269
Honolulu City & County, Ser A, GO, ETM, MBIA Insured
135 6.000%, 11/01/10 154
Honolulu City & County, Ser A, GO, MBIA Insured
365 6.000%, 11/01/10 417
1,000 5.250%, 03/01/27 1,082
500 5.250%, 03/01/28 541
Honolulu City & County, Ser B, GO, ETM, FGIC Insured
635 5.500%, 10/01/11 718
Honolulu City & County, Ser B, GO, FGIC Insured,
Pre-Refunded @ 101 (A)
2,000 5.125%, 07/01/09 2,184
Honolulu City & County, Ser B, GO, MBIA Insured
825 5.000%, 07/01/13 916
Honolulu City & County, Ser C, GO, FGIC Insured
125 5.500%, 11/01/07 133
1,200 5.125%, 07/01/11 1,301
1,100 5.125%, 07/01/15 1,185
650 5.000%, 07/01/09 698
3,500 5.000%, 07/01/19 3,734
Honolulu City & County, Ser D, GO, AMT, FGIC Insured
245 4.850%, 02/01/10 260
Bishop Street Funds
30
Hawaii Municipal Bond Fund (UNAUDITED)
- ----------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
HAWAII -- (CONTINUED)
Honolulu City & County, Waipahu Towers Project, Ser A, RB,
AMT, GNMA Collateral
$ 200 6.900%, 06/20/35 $ 204
Honolulu City & County, Waste Water, 2nd Board Resolution,
Junior Ser, RB, FGIC Insured
1,000 5.250%, 07/01/12 1,086
900 5.250%, 07/01/13 977
1,000 5.250%, 07/01/17 1,081
2,500 5.250%, 07/01/18 2,701
1,000 5.000%, 07/01/23 1,064
Kauai County, Public Improvement, Ser B, GO, MBIA Insured
175 5.200%, 08/01/15 184
165 5.150%, 08/01/14 174
155 5.100%, 08/01/13 163
120 5.050%, 08/01/12 126
140 5.000%, 08/01/11 147
135 4.950%, 08/01/10 142
100 4.850%, 08/01/09 105
120 4.750%, 08/01/08 125
Kauai County, Ser A, GO, FGIC Insured, Pre-Refunded @ 100 (A)
1,135 6.250%, 08/01/10 1,305
1,480 6.250%, 08/01/10 1,702
1,335 6.250%, 08/01/10 1,535
1,050 6.250%, 08/01/10 1,207
Kauai County, Ser A, GO, MBIA Insured
750 5.625%, 08/01/18 836
Maui County, GO, MBIA Insured
3,000 5.000%, 03/01/14 3,337
1,100 5.000%, 03/01/24 1,183
1,450 3.800%, 03/01/16 1,468
Maui County, Ser A, GO
485 5.375%, 03/01/12 537
Maui County, Ser A, GO, FGIC Insured
150 5.000%, 03/01/13 158
Maui County, Ser A, GO, FGIC Insured, Pre-Refunded @ 101 (A)
100 5.125%, 03/01/08 107
50 5.000%, 03/01/08 53
Maui County, Ser A, GO, MBIA Insured
1,840 5.000%, 03/01/20 1,957
Maui County, Ser B, GO, MBIA Insured
500 5.000%, 09/01/17 549
--------
135,462
--------
June 30, 2005 www.bishopstreetfunds.com
31
Hawaii Municipal Bond Fund (UNAUDITED)
- ----------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
ILLINOIS -- 2.0%
Illinois State, Educational Facilities Authority,
Northwestern University, RB
$ 670 5.000%, 12/01/38 $ 699
Schaumburg, Ser B, GO, FGIC Insured
2,750 5.000%, 12/01/38 2,908
--------
3,607
--------
INDIANA -- 0.9%
Elkhart, Community School Building Company, First Meeting, RB,
XLCA Insured
1,500 4.500%, 07/15/24 1,524
--------
KENTUCKY -- 0.6%
Kenton County, Airport Board, Ser C, RB, AMT, MBIA Insured
1,000 5.000%, 03/01/10 1,062
--------
NEW YORK -- 0.6%
New York, Transitional Financing Authority, Ser C, RB
1,000 5.000%, 02/01/33 1,056
--------
PUERTO RICO -- 6.9%
Commonwealth of Puerto Rico, GO, MBIA Insured
1,500 6.500%, 07/01/10 1,732
500 6.500%, 07/01/14 620
Commonwealth of Puerto Rico, Public Improvement, GO,
FSA Insured
435 5.000%, 07/01/21 468
Commonwealth of Puerto Rico, Public Improvement, Ser A, GO
1,000 5.000%, 07/01/27 1,051
Puerto Rico, Electric Power Authority, Ser DD, RB, FSA Insured
1,000 5.000%, 07/01/28 1,042
Puerto Rico, Electric Power Authority, Ser HH, RB, FSA Insured
500 5.250%, 07/01/29 542
Puerto Rico, Housing, Banking & Financing Agency, Single-Family
Mortgage, Affordable Housing Mortgage, Portfolio I, RB, AMT,
GNMA/FNMA/FHLMC Collateral
180 6.100%, 10/01/15 184
Puerto Rico, Housing Financing Authority, Capital Funding
Program, RB
4,360 5.000%, 12/01/16 4,720
Puerto Rico, Industrial Tourist Educational Medical Environmental
Control Facilities, Hospital Auxilio Mutuo Obligation Group,
Ser A, RB, MBIA Insured
300 6.250%, 07/01/24 307
Bishop Street Funds
32
Hawaii Municipal Bond Fund (UNAUDITED)
- -------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Face Amount Value
(000)/Shares (000)
-------------- --------
Puerto Rico, University of Puerto Rico, Ser O, RB, MBIA Insured
$ 1,500 5.750%, 06/01/19 $ 1,668
--------
12,334
--------
TEXAS -- 3.7%
Collin County, GO
860 5.000%, 02/15/21 928
Harris County, Houston Texas Sports Authority, Ser A, Special RB,
MBIA Insured
5,000 5.400%, 11/15/40 756
Leander, Independent School District, GO, FGIC Insured
12,000 5.170%, 08/15/23 4,830
--------
6,514
--------
WASHINGTON -- 1.4%
Washington State, University of Washington, RB, FSA Insured
2,315 5.000%, 06/01/23 2,494
--------
TOTAL MUNICIPAL BONDS (Cost $164,859) 173,300
--------
CASH EQUIVALENTS -- 2.9%
2,599,174 Dreyfus Tax-Exempt Cash Management Fund 2,599
2,599,174 Fidelity Institutional Money Market Tax-Exempt Fund 2,599
--------
TOTAL CASH EQUIVALENTS (Cost $5,198) 5,198
--------
TOTAL INVESTMENTS (COST $170,057) -- 100.5% 178,498
--------
OTHER ASSETS AND LIABILITIES -- (0.5)%
Payable for Capital Shares Redeemed (3,693)
Income Distribution Payable (469)
Investment Adviser Fees Payable (38)
Shareholder Servicing Fees Payable (15)
Administrative Fees Payable (10)
Distribution Fees Payable (6)
Other Assets and Liabilities, Net 3,346
--------
TOTAL OTHER ASSETS AND LIABILITIES (885)
--------
NET ASSETS -- 100.0% $177,613
========
June 30, 2005 www.bishopstreetfunds.com
33
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
--------
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $167,782
Undistributed Net Investment Income 59
Accumulated Net Realized Gain on Investments 1,331
Net Unrealized Appreciation on Investments 8,441
--------
NET ASSETS $177,613
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS I
($145,743,932 / 13,213,105 SHARES) $ 11.03
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A
($31,868,713 / 2,888,664 SHARES) $ 11.03
========
MAXIMUM OFFERING PRICE PER SHARE --
CLASS A SHARES ($11.03 / 97.00%) $ 11.37
========
(A) PREREFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
AMT -- ALTERNATIVE MINIMUM TAX
COP -- CERTIFICATE OF PARTICIPATION
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTEE INSURANCE CORPORATION
FHA -- FEDERAL HOUSING ADMINISTRATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA -- FINANCIAL SECURITY ASSURANCE
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
RB -- REVENUE BOND
SER -- SERIES
XLCA -- XL CAPITAL COST
FIGURES ARE SHOWN WITH "000S" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
34
Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS+
44.5% Commercial Paper
18.2% U.S. Government Agency Obligations
15.0% Certificates of Deposit/Bank Notes
9.2% Repurchase Agreements
4.8% Collateralized Mortgage Obligations
4.3% Insurance Funding Agreements
4.0% Corporate Obligations
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Face
Amount Value
(000) (000)
-------- --------
COMMERCIAL PAPER (C) -- 44.6%
AUTO FINANCE -- 4.3%
BMW U.S. Capital
$ 8,500 3.380%, 07/01/05 $ 8,500
--------
BANKS -- 33.0%
ANZ
7,500 3.076%, 07/12/05 7,493
Bank of Montreal
8,000 3.208%, 07/22/05 7,985
Danske Bank
6,000 3.275%, 08/01/05 5,983
3,200 3.243%, 08/02/05 3,191
Deutsche Bank Financial
8,500 3.274%, 07/29/05 8,479
HBOS Treasury Services
5,000 3.073%, 07/18/05 4,993
Lloyds TSB Bank
4,500 3.018%, 07/01/05 4,500
Royal Bank of Scotland
8,000 3.258%, 07/27/05 7,981
Societe Generale
8,300 3.272%, 07/06/05 8,296
UBS Finance
6,000 3.049%, 07/01/05 6,000
--------
64,901
--------
COMPUTER HARDWARE -- 1.5%
IBM
3,000 3.041%, 07/13/05 2,997
--------
June 30, 2005 www.bishopstreetfunds.com
35
Money Market Fund (UNAUDITED)
- ---------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face
Amount Value
(000) (000)
-------- --------
FINANCIALS -- 5.8%
General Electric Capital
$ 2,500 3.073%, 07/18/05 $ 2,497
Svenska Handelsbank
5,000 3.056%, 07/05/05 4,998
Morgan Stanley
4,000 3.104%, 07/18/05 3,994
--------
11,489
--------
TOTAL COMMERCIAL PAPER (Cost $87,887) 87,887
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 18.2%
FHLMC (C)
31,900 3.148%, 07/19/05 31,850
FNMA
4,000 7.000%, 07/15/05 4,006
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $35,856) 35,856
--------
CERTIFICATES OF DEPOSIT/BANK NOTES -- 15.0%
American Express Centurion (A)
3,500 3.280%, 02/28/06 3,500
Citigroup
5,000 3.190%, 08/16/05 5,000
Credit Suisse First Boston (A)
3,000 3.380%, 12/08/05 3,000
DEPFA Bank
5,000 3.065%, 07/14/05 5,000
Regions Bank
5,000 3.120%, 08/09/05 5,000
WFFB
8,000 3.260%, 07/11/05 8,000
--------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $29,500) 29,500
--------
COLLATERALIZED MORTGAGE OBLIGATIONS (A) -- 4.8%
Aire Valley Mortgages, Ser 2004-1A, Cl 1A (D)
1,800 3.090%, 09/20/05 1,800
DaimlerChrysler Auto Trust, Ser 2005-B, Cl A1 (D)
3,191 3.260%, 05/08/06 3,191
Bishop Street Funds
36
Money Market Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face
Amount Value
(000) (000)
-------- --------
COLLATERALIZED MORTGAGE OBLIGATION -- (CONTINUED)
GE Commercial Equipment Financing, Ser 2004-1, Cl A1
$ 410 3.220%, 11/20/05 $ 410
GE Commerical Equipment Financing, Ser 2004-A, Cl A1 (D)
466 2.590%, 12/22/05 466
Lothian Mortgages, Ser 4A, Cl A1 (D)
2,025 3.290%, 01/24/06 2,025
Permanent Financing, Ser 7, Cl 1A
1,540 3.150%, 03/10/06 1,540
--------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $9,432) 9,432
--------
INSURANCE FUNDING AGREEMENTS (A)(B)(D) -- 4.3%
Allstate
3,000 3.100%, 06/16/05 3,000
Monumental Life Insurance
5,500 2.830%, 07/01/05 5,500
--------
TOTAL INSURANCE FUNDING AGREEMENTS (Cost $8,500) 8,500
--------
CORPORATE OBLIGATIONS (A) -- 4.0%
BANKS -- 1.8%
U.S. Bancorp MTN, Ser N
3,500 3.564%, 09/16/05 3,501
--------
FINANCIALS -- 2.2%
General Electric Capital
2,300 3.284%, 01/09/06 2,300
General Electric Capital MTN
2,000 3.340%, 07/17/06 2,000
--------
4,300
--------
TOTAL CORPORATE OBLIGATIONS (Cost $7,801) 7,801
--------
REPURCHASE AGREEMENT -- 9.2%
Lehman Brothers 2.830%, dated 06/30/05,
to be repurchased on 07/01/05, repurchase
price $18,101,423 (collateralized by a
Treasury Obligation, par value $20,372,000,
18,100 0.000%, 08/18/05; total market value $20,289,508) 18,100
--------
TOTAL REPURCHASE AGREEMENT (Cost $18,100) 18,100
--------
TOTAL INVESTMENTS (COST $197,076) -- 100.1% 197,076
--------
June 30, 2005 www.bishopstreetfunds.com
37
Money Market Fund (UNAUDITED)
- ------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
-------
OTHER ASSETS AND LIABILITIES -- (0.1)%
Income Distribution Payable $ (331)
Investment Adviser Fees Payable (27)
Administrative Fees Payable (18)
Shareholder Servicing Fees Payable (15)
Distribution Fees Payable (5)
Other Assets and Liabilities, Net 298
--------
TOTAL OTHER ASSETS AND LIABILITIES (98)
--------
NET ASSETS -- 100.0% $196,978
========
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $197,004
Distributions in Excess of Net Investment Income (1)
Accumulated Net Realized Loss on Investments (25)
--------
NET ASSETS $196,978
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($175,679,627 / 175,705,682 SHARES) $ 1.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS A
($21,298,638 / 21,298,885 SHARES) $ 1.00
========
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 2005. THE MATURITY DATE SHOWN IS THE
NEXT SCHEDULED RESET DATE.
(B) SECURITY CONSIDERED ILLIQUID. THE TOTAL VALUE OF SUCH SECURITIES AS OF
JUNE 30, 2005 WAS APPROXIMATELY $8,500,000 AND REPRESENTS 4.3% OF NET
ASSETS.
(C) REPRESENTS THE EFFECTIVE YIELD AT THE DATE OF PURCHASE.
(D) SECURITIES SOLD WITHIN THE TERMS OF PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 144A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR
OTHER "ACCREDITED INVESTORS."
CL -- CLASS
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
SER -- SERIES
COST FIGURES ARE SHOWN WITH "000S" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
38
Treasury Money Market Fund (UNAUDITED)
- -------------------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS+
81.2% U.S. Treasury Obligations
18.8% Repurchase Agreements
+PERCENTAGES BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Face
Amount Value
(000) (000)
-------- --------
U.S. TREASURY OBLIGATIONS (A) -- 81.4%
U.S. Treasury Bills
$50,000 2.833%, 07/14/05 $ 49,949
50,000 2.971%, 08/11/05 49,837
45,000 2.919%, 09/01/05 44,775
70,000 2.962%, 09/08/05 69,605
--------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $214,166) 214,166
--------
REPURCHASE AGREEMENT -- 18.8%
Lehman Brothers 2.830%, dated 06/30/05, to be repurchased on
07/01/05, repurchase price $49,603,899 (collateralized by
government obligations, ranging in par value
$20,651,000-$26,110,000, 2.375%-6.500%,
49,600 02/15/10-01/15/25; total market value $53,147,302) 49,600
--------
TOTAL REPURCHASE AGREEMENT (Cost $49,600) 49,600
--------
TOTAL INVESTMENTS (COST $263,766) -- 100.2% 263,766
--------
OTHER ASSETS AND LIABILITIES -- (0.2)%
Income Distribution Payable (513)
Investment Adviser Fees Payable (28)
Administrative Fees Payable (24)
Shareholder Servicing Fees Payable (21)
Other Assets and Liabilities, Net 20
--------
TOTAL OTHER ASSETS AND LIABILITIES (566)
--------
NET ASSETS -- 100.0% $263,200
========
June 30, 2005 www.bishopstreetfunds.com
39
Treasury Money Market Fund (UNAUDITED)
- -------------------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
-------
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $263,244
Undistributed Net Investment Income 10
Accumulated Net Realized Loss on Investments (54)
--------
NET ASSETS $263,200
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($263,199,753 / 263,244,979 SHARES) $ 1.00
========
(A) REPRESENTS THE EFFECTIVE YIELD AT THE DATE OF PURCHASE.
COST FIGURES ARE SHOWN WITH "000S" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
40
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Bishop Street Funds (UNAUDITED)
- -------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005
(IN THOUSANDS)
Tax High
Strategic Managed Grade
Equity Growth Equity Income
Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend Income $ 1,000 $283 $ 360 $ --
Interest Income 26 17 9 3,218
Securities Lending, Net 14 -- -- 35
- -----------------------------------------------------------------------------------------
Total Investment Income 1,040 300 369 3,253
- -----------------------------------------------------------------------------------------
EXPENSES:
Investment Adviser Fees 524 324 131 396
Shareholder Servicing Fees 177 109 44 180
Administrative Fees 142 87 36 144
Distribution Fees, Class A 1 -- -- --
Transfer Agent Fees 30 16 14 29
Professional Fees 20 11 4 19
Custody Fees 8 4 2 7
Printing Fees 7 4 2 7
Trustees' Fees 6 3 1 5
Registration Fees 2 2 3 1
Miscellaneous Expenses 10 4 2 15
- -----------------------------------------------------------------------------------------
Total Expenses 927 564 239 803
- -----------------------------------------------------------------------------------------
Less Waivers:
Investment Adviser Fees (50) -- (21) (86)
Shareholder Servicing Fees (106) (66) (26) (108)
Administrative Fees (61) (38) (15) (62)
- -----------------------------------------------------------------------------------------
Total Waivers (217) (104) (62) (256)
- -----------------------------------------------------------------------------------------
Total Net Expenses 710 460 177 547
- -----------------------------------------------------------------------------------------
Net Investment Income (Loss) 330 (160) 192 2,706
- -----------------------------------------------------------------------------------------
Net Realized Gain on Investments 6,726 541 428 951
Change in Unrealized Appreciation
(Depreciation) on Investments (12,445) (562) (1,808) 282
- -----------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments (5,719) (21) (1,380) 1,233
- -----------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
Resulting from Operations $ (5,389) $(181) $(1,188) $3,939
=========================================================================================
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
42
Bishop Street Funds (UNAUDITED)
- -----------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005
(IN THOUSANDS)
Hawaii Treasury
Municipal Money Money
Bond Market Market
Fund Fund Fund
- -----------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest Income $4,051 $2,764 $2,916
- -----------------------------------------------------------------------------------------
Total Investment Income 4,051 2,764 2,916
- -----------------------------------------------------------------------------------------
EXPENSES:
Investment Adviser Fees 310 305 335
Shareholder Servicing Fees 222 254 279
Administrative Fees 177 203 223
Distribution Fees, Class A 38 27 --
Transfer Agent Fees 32 34 23
Professional Fees 22 25 26
Custody Fees 9 11 11
Printing Fees 8 9 10
Trustees' Fees 6 7 8
Registration Fees 1 2 1
Miscellaneous Expenses 27 16 32
- -----------------------------------------------------------------------------------------
Total Expenses 852 893 948
- -----------------------------------------------------------------------------------------
Less Waivers:
Investment Adviser Fees (79) (117) (192)
Shareholder Servicing Fees (133) (152) (168)
Administrative Fees (115) (88) (97)
- -----------------------------------------------------------------------------------------
Total Waivers (327) (357) (457)
- -----------------------------------------------------------------------------------------
Total Net Expenses 525 536 491
- -----------------------------------------------------------------------------------------
Net Investment Income 3,526 2,228 2,425
- -----------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments 1,306 (1) (7)
Change in Unrealized Depreciation
on Investments (1,123) -- --
- -----------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments 183 (1) (7)
- -----------------------------------------------------------------------------------------
Increase in Net Assets
Resulting from Operations $3,709 $ 2,227 $2,418
=========================================================================================
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, 2005 www.bishopstreetfunds.com
43
Bishop Street Funds
- -----------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005 (UNAUDITED) AND THE YEAR ENDED
DECEMBER 31, 2004 (IN THOUSANDS)
Equity Fund
- -----------------------------------------------------------------------------------------
2005 2004
- -----------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 330 $ 1,039
Net Realized Gain on Investments 6,726 2,061
Change in Unrealized Appreciation (Depreciation)
on Investments (12,445) 2,789
- -----------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting from Operations (5,389) 5,889
- -----------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (335) (1,043)
Class A Shares (1) (6)
- -----------------------------------------------------------------------------------------
Total Dividends (336) (1,049)
- -----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 4,925 38,484
Reinvestments of Cash Distributions 246 711
Proceeds from Shares Issued in Connection with Reclassification
from Class A Shares(1) 1,428 --
Cost of Shares Redeemed (63,722) (30,690)
- -----------------------------------------------------------------------------------------
Total Class I Capital Share Transactions (57,123) 8,505
- -----------------------------------------------------------------------------------------
Class A Shares:
Proceeds from Shares Issued 2 144
Reinvestments of Cash Distributions -- 3
Value of Shares Liquidated in Connection with Reclassification
to Class I Shares(1) (1,428) --
Cost of Shares Redeemed (99) (161)
- -----------------------------------------------------------------------------------------
Total Class A Capital Share Transactions (1,525) (14)
- -----------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
From Capital Share Transactions (58,648) 8,491
- -----------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (64,373) 13,331
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 171,296 157,965
- -----------------------------------------------------------------------------------------
End of Period $106,923 $171,296
=========================================================================================
Distributions in Excess of Net Investment Income $ (6) $ --
=========================================================================================
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 517 4,055
Shares Issued in Lieu of Cash Distributions 26 74
Shares Issued in Connection with Reclassification
from Class A Shares(1) 155 --
Shares Redeemed (6,712) (3,249)
- -----------------------------------------------------------------------------------------
Total Class I Share Transactions (6,014) 880
- -----------------------------------------------------------------------------------------
Class A Shares:
Shares Issued -- 15
Shares Issued in Lieu of Cash Distributions -- --
Value of Shares Liquidated in Connection with Reclassification
to Class I Shares(1) (156) --
Shares Redeemed (10) (17)
- -----------------------------------------------------------------------------------------
Total Class A Share Transactions (166) (2)
- -----------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares Outstanding from Share Transactions (6,180) 878
=========================================================================================
(1) ON APRIL 29, 2005, CLASS A SHARES OF THE BISHOP STREET EQUITY FUND WERE
RECLASSIFIED AS CLASS I SHARES. SEE NOTE 1 IN NOTES TO FINANCIAL STATEMENTS FOR
ADDITIONAL INFORMATION.
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
44
Bishop Street Funds
- ------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2004
(IN THOUSANDS)
Strategic Tax Managed
Growth Fund Equity Fund
- -----------------------------------------------------------------------------------------
2005 2004 2005 2004
- -----------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income (Loss) $ (160) $ (217) $ 192 $ 253
Net Realized Gain on Investments 541 1,549 428 1,216
Change in Unrealized Appreciation (Depreciation)
on Investments (562) 5,453 (1,808) 706
- ----------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting
from Operations (181) 6,785 (1,188) 2,175
- ----------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares -- -- (192) (254
Capital Gains:
Class I Shares -- -- -- (1,183
- ----------------------------------------------------------------------------------------
Total Dividends and Distributions -- -- (192) (1,437
- ----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 25,282 34,231 6,918 3,777
Reinvestments of Cash Distributions -- -- 14 80
Cost of Shares Redeemed (4,364) (8,693) (4,537) (3,828
- ----------------------------------------------------------------------------------------
Net Increase in Net Assets
From Capital Share Transactions 20,918 25,538 2,395 29
- ----------------------------------------------------------------------------------------
Total Increase in Net Assets 20,737 32,323 1,015 767
- ----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 79,168 46,845 35,575 34,808
- ----------------------------------------------------------------------------------------
End of Period $99,905 $79,168 $36,590 $35,575
========================================================================================
Accumulated Net Investment Loss $ (175) $ (15) $ -- $ --
========================================================================================
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 1,990 2,842 579 311
Shares Issued in Lieu of Cash Distributions -- -- 1 7
Shares Redeemed (341) (715) (378) (316)
- ----------------------------------------------------------------------------------------
Net Increase in Shares Outstanding from
Share Transactions 1,649 2,127 202 2
========================================================================================
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, 2005 www.bishopstreetfunds.com
45
Bishop Street Funds
- -----------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2004
(IN THOUSANDS)
High Grade Hawaii Municipal
Income Fund Bond Fund
- ----------------------------------------------------------------------------------------
2005 2004 2005 2004
- ----------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 2,706 $ 5,305 $ 3,526 $ 7,014
Net Realized Gain on Investments 951 837 1,306 1,678
Change in Unrealized Appreciation (Depreciation)
on Investments 282 (1,214) (1,123) (2,892)
- ----------------------------------------------------------------------------------------
Increase in Net Assets Resulting from Operations 3,939 4,928 3,709 5,800
- ----------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (2,710) (5,288) (2,936) (5,870)
Class A Shares (3) (10) (576) (1,133)
Capital Gains:
Class I Shares -- (546) -- (1,540)
Class A Shares -- (1) -- (317)
- ----------------------------------------------------------------------------------------
Total Dividends and Distributions (2,713) (5,845) (3,512) (8,860)
- ----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 10,262 40,169 8,556 14,569
Reinvestments of Cash Distributions 1,427 2,530 448 1,202
Proceeds from Shares Issued in Connection
with Reclassification
from Class A Shares(1) 310 -- -- --
Cost of Shares Redeemed (24,662) (19,460) (11,994) (15,048)
- ----------------------------------------------------------------------------------------
Total Class I Capital Share Transactions (12,663) 23,239 (2,990) 723
- ----------------------------------------------------------------------------------------
Class A Shares:
Proceeds from Shares Issued 96 2 1,395 2,467
Reinvestments of Cash Distributions 2 7 229 680
Value of Shares Liquidated in Connection with
Reclassification
to Class I Shares(1) (310) -- -- --
Cost of Shares Redeemed (14) (57) (277) (3,099)
- ----------------------------------------------------------------------------------------
Total Class A Capital Share Transactions (226) (48) 1,347 48
- ----------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (12,889) 23,191 (1,643) 771
- ----------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (11,663) 22,274 (1,446) (2,289)
- ----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 157,395 135,121 179,059 181,348
- ----------------------------------------------------------------------------------------
End of Period $145,732 $157,395 $177,613 $179,059
========================================================================================
Undistributed Net Investment Income $ 2 $ 9 $ 59 $ 45
========================================================================================
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 995 3,890 779 1,310
Shares Issued in Lieu of Cash Distributions 138 244 41 108
Shares Issued in Connection with Reclassification
from Class A Shares(1) 30 -- -- --
Shares Redeemed (2,387) (1,881) (1,089) (1,356)
- ----------------------------------------------------------------------------------------
Total Class I Share Transactions (1,224) 2,253 (269) 62
- ----------------------------------------------------------------------------------------
Class A Shares:
Shares Issued 10 -- 127 221
Shares Issued in Lieu of Cash Distributions -- 1 21 61
Value of Shares Liquidated in Connection with
Reclassification
to Class I Shares(1) (30) -- -- --
Shares Redeemed (2) (6) (25) (280)
- ----------------------------------------------------------------------------------------
Total Class A Share Transactions (22) (5) 123 2
- ----------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares Outstanding
from Share Transactions (1,246) 2,248 (146) 64
========================================================================================
(1) ON APRIL 29, 2005, CLASS A SHARES OF THE BISHOP STREET HIGH GRADE INCOME
FUND WERE RECLASSIFIED AS CLASS I SHARES. SEE NOTE 1 IN NOTES TO
FINANCIAL STATEMENTS FOR ADDITIONAL INFORMATION.
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
46
Bishop Street Funds
- -----------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2004
(IN THOUSANDS)
Money Market Treasury Money
Fund Market Fund
- ----------------------------------------------------------------------------------------
2005 2004 2005 2004
- ----------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 2,228 $ 2,031 $ 2,425 $ 2,158
Net Realized Loss on Investments (1) (2) (7) (46)
- ----------------------------------------------------------------------------------------
Increase in Net Assets Resulting from Operations 2,227 2,029 2,418 2,112
- ----------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (2,010) (1,908) (2,425) (2,173)
Class A Shares (219) (122) -- --
- ----------------------------------------------------------------------------------------
Total Dividends (2,229) (2,030) (2,425) (2,173)
- ----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (ALL AT $1.00 PER SHARE):
Class I Shares:
Proceeds from Shares Issued 214,569 443,764 299,865 501,131
Reinvestments of Cash Distributions 62 83 6 6
Cost of Shares Redeemed (206,860) (458,078) (244,817)(563,288)
- ----------------------------------------------------------------------------------------
Total Class I Capital Share Transactions 7,771 (14,231) 55,054 (62,151)
- ----------------------------------------------------------------------------------------
Class A Shares:
Proceeds from Shares Issued 48,157 47,431 -- --
Reinvestments of Cash Distributions 242 99 -- --
Cost of Shares Redeemed (44,924) (47,170) -- --
- ----------------------------------------------------------------------------------------
Total Class A Capital Share Transactions 3,475 360 -- --
- ----------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 11,246 (13,871) 55,054 (62,151)
- ----------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 11,244 (13,872) 55,047 (62,212)
- ----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 185,734 199,606 208,153 270,365
- ----------------------------------------------------------------------------------------
End of Period $ 196,978 $185,734 $ 263,200 $208,153
========================================================================================
Undistributed (Distributions in Excess of)
Net Investment Income $ (1) $ -- $ 10 $ 10
========================================================================================
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, 2005 www.bishopstreetfunds.com
47
Bishop Street Funds
- --------------------------------------------------------------------------------
Financial Highlights
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2005
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS FROM
------------------------------- ---------------------
TOTAL
NET ASSET NET REALIZED INVESTMENT TOTAL
VALUE, NET AND UNREALIZED ACTIVITIES NET DIVIDENDS
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ------------- -------------- ---------- ---------- ------- ---------------
- -----------
EQUITY FUND
- -----------
CLASS I SHARES:
2005(1) $ 9.78 $ 0.02 $(0.36) $(0.34) $(0.02) $ -- $(0.02)
2004(1) 9.49 0.06 0.29 0.35 (0.06) -- (0.06)
2003(1) 7.53 0.04 1.96 2.00 (0.04) -- (0.04)
2002(1) 10.08 0.02 (2.55) (2.53) (0.02) -- (0.02)
2001 13.55 -- (3.47) (3.47) -- -- --
2000 17.88 -- (2.77) (2.77) -- (1.56) (1.56)
- ---------------------
STRATEGIC GROWTH FUND
- ---------------------
CLASS I SHARES:
2005(1) $13.08 $(0.02) $(0.09)(4) $(0.11) $ -- $ -- $ --
2004(1) 11.93 (0.05) 1.20 1.15 -- -- --
2003(1) 8.64 (0.06) 3.35 3.29 -- -- --
2002(2) 10.00 (0.03) (1.33) (1.36) -- -- --
- -----------------------
TAX MANAGED EQUITY FUND
- -----------------------
CLASS I SHARES:
2005(1) $12.32 $ 0.06 $(0.48) $(0.42) $(0.06) $ -- $(0.06)
2004(1) 12.06 0.09 0.68 0.77 (0.09) (0.42) (0.51)
2003(1) 9.83 0.07 2.25 2.32 (0.07) (0.02) (0.09)
2002(3) 10.00 0.01 (0.17) (0.16) (0.01) -- (0.01)
- ---------------------
HIGH GRADEINCOME FUND
- ---------------------
CLASS I SHARES:
2005(1) $10.33 $ 0.19 $ 0.09 $ 0.28 $(0.19) $ -- $(0.19)
2004(1) 10.40 0.38 (0.03) 0.35 (0.38) (0.04) (0.42)
2003(1) 10.67 0.42 (0.07) 0.35 (0.42) (0.20) (0.62)
2002 10.00 0.46 0.67 1.13 (0.46) -- (0.46)
2001 9.81 0.50 0.19 0.69 (0.50) -- (0.50)
2000 9.39 0.52 0.42 0.94 (0.52) -- (0.52)
+ 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.
* ANNUALIZED
(1) PER SHARE NET INVESTMENT INCOME AMOUNT CALCULATED USING AVERAGE SHARES.
(2) COMMENCED OPERATIONS ON JULY 1, 2002.
(3) COMMENCED OPERATIONS ON NOVEMBER 13, 2002.
(4) THE AMOUNT SHOWN FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2005 FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD DOES NOT
ACCORD WITH THE AGGREGATE NET LOSSES ON INVESTMENTS FOR THAT PERIOD BECAUSE OF THE SALES AND REPURCHASES OF FUND
SHARES IN RELATION TO FLUCTUATING MARKET VALUE OF THE INVESTMENTS OF THE FUND.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
Bishop Street Funds
48
- ------------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF EXPENSES RATIO OF NET
NET ASSET NET ASSETS, EXPENSES TO TO AVERAGE INVESTMENT
VALUE, END OF AVERAGE NET ASSETS INCOME (LOSS) PORTFOLIO
END OF TOTAL PERIOD NET EXCLUDING FEE TO AVERAGE TURNOVER
PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS RATE
--------- ------- ----------- ----------- ----------------- ------------- ---------
- -----------
EQUITY FUND
- -----------
CLASS I SHARES:
2005(1) $ 9.42 (3.43)% $106,923 1.00%* 1.31%* 0.47%* 16%
2004(1) 9.78 3.72 169,685 1.00 1.30 0.67 42
2003(1) 9.49 26.62 156,381 1.00 1.28 0.48 43
2002(1) 7.53 (25.06) 129,981 1.00 1.27 0.24 60
2001 10.08 (25.61) 216,412 1.00 1.27 -- 86
2000 13.55 (16.20) 300,565 1.00 1.28 (0.23) 52
- ---------------------
STRATEGIC GROWTH FUND
- ---------------------
CLASS I SHARES:
2005(1) $12.97 (0.84)% $ 99,905 1.05%* 1.29%* (0.37)%* 25%
2004(1) 13.08 9.64 79,168 1.05 1.29 (0.38) 59
2003(1) 11.93 38.08 46,845 1.17 1.41 (0.57) 59
2002(2) 8.64 (13.60) 19,899 1.25* 1.67* (0.61)* 50
- -----------------------
TAX MANAGED EQUITY FUND
- -----------------------
CLASS I SHARES:
2005(1) $11.84 (3.38)% $ 36,590 1.00%* 1.35%* 1.08%* 12%
2004(1) 12.32 6.40 35,575 1.00 1.34 0.74 36
2003(1) 12.06 23.66 34,808 1.00 1.43 0.68 34
2002(3) 9.83 (1.57) 24,635 1.00* 1.50* 0.99* 1
- ---------------------
HIGH GRADEINCOME FUND
- ---------------------
CLASS I SHARES:
2005(1) $10.42 2.77% $145,732 0.76%* 1.12%* 3.76%* 19%
2004(1) 10.33 3.41 157,170 0.76 1.11 3.68 45
2003(1) 10.40 3.31 134,845 0.76 1.10 3.91 48
2002 10.67 11.54 138,516 0.76 1.09 4.45 19
2001 10.00 7.16 124,416 0.76 1.09 5.02 89
2000 9.81 10.25 127,888 0.77 1.14 5.41 88
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
June 30, 2005 www.bishopstreetfunds.com
49
Bishop Street Funds
- --------------------------------------------------------------------------------
Financial Highlights
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2005
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS FROM
------------------------------- ---------------------
TOTAL
NET ASSET NET REALIZED INVESTMENT TOTAL
VALUE, NET AND UNREALIZED ACTIVITIES NET DIVIDENDS
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ------------- -------------- ---------- ---------- ------- ---------------
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
CLASS I SHARES:
2005(2) $11.02 $ 0.22 $ 0.01 $ 0.23 $(0.22) $ -- $(0.22)
2004(2) 11.21 0.44 (0.07) 0.37 (0.44) (0.12) (0.56)
2003(2) 11.20 0.45 0.13 0.58 (0.45) (0.12) (0.57)
2002 10.66 0.47 0.57 1.04 (0.46) (0.04) (0.50)
2001 10.70 0.49 (0.04) 0.45 (0.49) -- (0.49)
2000 9.98 0.50 0.72 1.22 (0.50) -- (0.50)
CLASS A SHARES:
2005(2) $11.02 $ 0.21 $ 0.01 $ 0.22 $(0.21) $ -- $(0.21)
2004(2) 11.21 0.41 (0.07) 0.34 (0.41) (0.12) (0.53)
2003(2) 11.20 0.42 0.13 0.55 (0.42) (0.12) (0.54)
2002 10.66 0.44 0.58 1.02 (0.44) (0.04) (0.48)
2001 10.69 0.46 (0.02) 0.44 (0.47) -- (0.47)
2000 9.97 0.46 0.73 1.19 (0.47) -- (0.47)
- -----------------
MONEY MARKET FUND
- -----------------
CLASS I SHARES:
2005(2) $ 1.00 $ 0.01 $ -- $ 0.01 $(0.01) $ -- $(0.01)
2004(2) 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2003(2) 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2002 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2001 1.00 0.04 -- 0.04 (0.04) -- (0.04)
2000 1.00 0.06 -- 0.06 (0.06) -- (0.06)
CLASS A SHARES:
2005(2) $ 1.00 $ 0.01 $ -- $ 0.01 $(0.01) $ -- $(0.01)
2004(2) 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2003(2) 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2002 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2001(1) 1.00 0.02 -- 0.02 (0.02) -- (0.02)
- --------------------------
TREASURY MONEY MARKET FUND
- --------------------------
CLASS I SHARES:
2005(2) $ 1.00 $ 0.01 $ -- $ 0.01 $(0.01) $ -- $(0.01)
2004(2) 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2003(2) 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2002 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2001 1.00 0.04 -- 0.04 (0.04) -- (0.04)
2000 1.00 0.06 -- 0.06 (0.06) -- (0.06)
+ TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED. TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE ON
CLASS A SHARES. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
* ANNUALIZED
(1) COMMENCED OPERATIONS ON MAY 1, 2001.
(2) PER SHARE NET INVESTMENT INCOME AMOUNT CALCULATED USING AVERAGE SHARES.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
Bishop Street Funds
50
- ------------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF EXPENSES RATIO OF NET
NET ASSET NET ASSETS, EXPENSES TO TO AVERAGE INVESTMENT
VALUE, END OF AVERAGE NET ASSETS INCOME (LOSS) PORTFOLIO
END OF TOTAL PERIOD NET EXCLUDING FEE TO AVERAGE TURNOVER
PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS RATE
--------- ------- ----------- ----------- ----------------- ------------- ---------
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
CLASS I SHARES:
2005(2) $11.03 2.09% $145,744 0.55%* 0.92%* 4.02%* 21%
2004(2) 11.02 3.36 148,575 0.55 0.92 3.97 40
2003(2) 11.21 5.27 150,373 0.45 0.91 4.01 38
2002 11.20 10.02 150,287 0.45 0.89 4.23 26
2001 10.66 4.24 137,206 0.45 0.88 4.54 4
2000 10.70 12.61 134,901 0.44 0.92 4.89 19
CLASS A SHARES:
2005(2) $11.03 1.97% 31,869 0.80%* 1.17%* 3.77%* 21%
2004(2) 11.02 3.10 30,484 0.80 1.17 3.72 40
2003(2) 11.21 5.01 30,975 0.70 1.16 3.76 38
2002 11.20 9.75 33,456 0.70 1.14 3.98 26
2001 10.66 4.13 30,499 0.70 1.13 4.29 4
2000 10.69 12.34 19,951 0.69 1.17 4.63 19
- -----------------
MONEY MARKET FUND
- -----------------
CLASS I SHARES:
2005(2) $ 1.00 1.11% $175,679 0.50%* 0.85%* 2.22%* n/a
2004(2) 1.00 0.92 167,910 0.50 0.84 0.90 n/a
2003(2) 1.00 0.76 182,166 0.50 0.83 0.76 n/a
2002 1.00 1.34 238,498 0.50 0.81 1.33 n/a
2001 1.00 3.86 309,935 0.50 0.82 3.71 n/a
2000 1.00 6.13 305,678 0.50 0.83 5.95 n/a
CLASS A SHARES:
2005(2) $ 1.00 0.99% $ 21,299 0.75%* 1.10%* 2.00%* n/a
2004(2) 1.00 0.67 17,824 0.75 1.09 0.65 n/a
2003(2) 1.00 0.50 17,440 0.75 1.08 0.41 n/a
2002 1.00 1.08 188 0.75 1.06 1.10 n/a
2001(1) 1.00 1.96 500 0.75* 1.07* 2.66* n/a
- --------------------------
TREASURY MONEY MARKET FUND
- --------------------------
CLASS I SHARES:
2005(2) $ 1.00 1.07% $263,200 0.44%* 0.85%* 2.17%* n/a
2004(2) 1.00 0.91 208,153 0.44 0.84 0.89 n/a
2003(2) 1.00 0.74 270,365 0.44 0.83 0.75 n/a
2002 1.00 1.29 331,678 0.44 0.83 1.28 n/a
2001 1.00 3.68 372,422 0.44 0.85 3.68 n/a
2000 1.00 5.89 455,612 0.44 0.82 5.73 n/a
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2005 www.bishopstreetfunds.com
51
Bishop Street Funds
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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 seven funds (each a Fund,
collectively the "Funds") which includes the Equity Fund, Strategic Growth Fund,
Tax Managed Equity Fund, High Grade Income Fund, Hawaii Municipal Bond Fund,
Money Market Fund and the Treasury Money Market Fund. 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.
Prior to April 29, 2005, the Equity Fund and High Grade Income Fund offered
Class A Shares and Class I Shares. Effective April 29, 2005 Class A Shares were
fully liquidated and reclassified as Class I Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Trust.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect 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 revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
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) are valued at the last quoted sale
price on the primary exchange or market (foreign or domestic) on which they are
traded, or, if there is no such reported sale, at the most recent quoted bid
price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will
be used. If available, debt securities are priced based upon valuations provided
by independent, third-party pricing agents. Such values generally reflect the
last reported sales price 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 market transactions, broker-supplied
valuations, or other methodologies designed to identify the market value for
such securities. Debt obligations with remaining maturities of sixty days or
less may be valued at their amortized cost, which approximates market value.
Prices for most securities held in the Funds are provided daily by recognized
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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 de-listed 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.
Investment securities held by the Money Market and Treasury Money Market
Funds are stated at amortized cost, which approximates market value. Under this
valuation method, purchase discounts and premiums are accreted and amortized
ratably to maturity and are included in interest income.
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 the specific identification method. Interest income is recorded
on the accrual basis; dividend income is recorded on ex-dividend date.
DISCOUNTS AND PREMIUMS
Discounts and premiums are accreted or amortized over the life of each
security and are recorded as interest income. The Equity, Strategic Growth, Tax
Managed Equity, High Grade Income and Hawaii Municipal Bond Funds use the
scientific interest method, which approximates the effective interest method.
The Money Market and Treasury Money Market Funds use the straight line method.
REPURCHASE AGREEMENTS
Securities pledged as collateral for repurchase agreements are held by the
custodian bank until the respective agreements are repurchased. The Funds may
also invest in tri-party repurchase agreements. Securities held as collateral
for tri-party repurchase agreements are maintained in a segregated account by
the broker's custodian bank. Provisions of repurchase agreements and procedures
adopted by the Adviser (see Note 3) monitor that the market value of the
collateral is sufficient in the event of default by the counterparty. If the
counterparty defaults and the value of the collateral declines or if the
counterparty enters an insolvency proceeding, realization of the collateral by
the Fund may be delayed or limited.
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CLASSES
Class-specific expenses are borne by that 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.
EXPENSES
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Other operating expenses of the Funds are prorated to the Funds on
the basis of relative net assets.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid on a monthly
basis for the High Grade Income, Hawaii Municipal Bond, Money Market and
Treasury Money Market Funds. The Equity, Strategic Growth and Tax Managed Equity
Funds declare and pay dividends from any net investment income on a quarterly
basis. Any net realized capital gains will be distributed at least annually for
all Funds. Distributions to shareholders are recorded on the ex-dividend date.
ILLIQUID SECURITIES
Valuations of illiquid securities may differ significantly from the values
that would have been used had an active market value for these securities
existed.
3. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENT
Investment advisory services are provided to the Funds by Bishop Street
Capital Management (the "Adviser"). The Adviser is entitled to receive an annual
fee of 0.74% of the average daily net assets of the Equity, Strategic Growth and
the Tax Managed Equity Funds, 0.55% of the average daily net assets of the High
Grade Income Fund, 0.35% of the average daily net assets of the Hawaii Municipal
Bond Fund, and 0.30% of the average daily net assets of the Money Market and
Treasury Money Market Funds (collectively, the "Money Market Funds"). The
Adviser has voluntarily agreed to waive a portion of its advisory fee to the
extent necessary to keep operating expenses at or below certain percentages of
the respective average daily net assets. The voluntary expense limitations are
as follows: Equity Fund (Class I) 1.00%, Strategic Growth Fund (Class I) 1.05%,
Tax Managed Equity Fund (Class I) 1.00%, High Grade Income Fund (Class I) 0.76%,
Hawaii Municipal Bond Fund (Class I) 0.55%, Hawaii Municipal Bond Fund (Class A)
0.80%, Money Market Fund (Class I) 0.50%, Money Market Fund (Class A) 0.75% and
Treasury Money Market Fund (Class I) 0.44%.
BNP Paribas Asset Management, Inc. ("BNP PAM") serves as the investment
sub-adviser for the Strategic Growth Fund, pursuant to a sub-adviser agreement.
BNP PAM is entitled to receive from the Adviser a fee, computed daily and paid
monthly, at the annual rate of 0.37% of the average daily net assets of the
Strategic Growth Fund.
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Fisher, Francis, Trees & Watts ("FFTW") serves as the investment sub-adviser
for the Money Market Funds, pursuant to a sub-adviser agreement dated July 1,
2005, as approved by shareholders on August 15, 2005. FFTW is entitled to
receive from the Adviser a fee, computed daily and paid monthly, at the annual
rate of 0.060% of the average daily net assets of the Money Market Funds up to
$500 million and 0.020% of the average daily net assets of the Money Market
Funds in excess of $500 million.
Union Bank of California, N.A. acts as custodian (the "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.
4. ADMINISTRATIVE, TRANSFER AGENT AND DISTRIBUTION SERVICES
Pursuant to an administration agreement dated January 27, 1995, (the
"Agreement") SEI Investments Global Funds Services ("GFS"), a wholly owned
subsidiary of SEI Investments Company, acts as the Trust's Administrator. Under
the terms of the Agreement, GFS is entitled to receive an annual fee of 0.20% of
the average daily net assets of the Funds. GFS has voluntarily agreed to waive a
portion of its fee in order to limit operating expenses, as disclosed in the
Statements of Operations.
Pursuant to an agreement dated January 30, 1995, DST Systems, Inc. ("DST")
acts as the Transfer Agent of the Trust. As such, DST provides transfer agency,
dividend disbursing and shareholder services to the Trust.
SEI Investments Distribution Co. ("SIDCO"), a wholly owned subsidiary of SEI
Investments Company, acts as the Trust's Distributor pursuant to a distribution
agreement dated June 10, 1999. 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.
The Trust has adopted and entered into a shareholder service plan and
agreement with SIDCO. Each Fund pays to SIDCO a shareholder servicing fee at 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 period, 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 for the
Funds. SIDCO has voluntarily agreed to waive a portion of its fee in order to
limit operating expenses, as disclosed in the Statements of Operations.
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Certain ministerial officers of the Trust are also ministerial officers of
the Administrator. Such officers are paid no fees by the Trust.
5. SECURITIES LENDING
Each Fund may lend portfolio securities to brokers, dealers and other
financial organizations that meet capital and other credit requirements or other
criteria established by the Board. These loans may not exceed 331/3% of the
total asset value of the Fund (including the loan collateral). No Fund will lend
portfolio securities to its investment adviser, sub-adviser or their affiliates
unless it has applied for and received specific authority to do so from the SEC.
Loans of portfolio securities will be fully collateralized by cash, letters of
credit or U.S. Government securities, and the collateral will be maintained in
an amount equal to at least 100% of the current market value of the loaned
securities by marking to market daily, although the borrower will be required to
deliver collateral of 102% of the market value of borrowed securities for
domestic and foreign securities, respectively. Although the risk of lending is
mitigated by the collateral, the Fund could experience a delay in recovering its
securities and a possible loss of income or value if the borrower fails to
return them.
6. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale and maturities
of securities, other than temporary cash investments for the six-month period
ended June 30, 2005 are presented below for the Funds.
Strategic Tax High Grade Hawaii
Equity Growth Managed Income Municipal
Fund Fund Equity Fund Fund Bond Fund
(000) (000) (000) (000) (000)
------ --------- ----------- ---------- ---------
Purchases
U.S.
Government
Securities $ -- $ -- $ -- $12,754 $ --
Other 22,500 41,621 6,447 12,592 37,054
Sales and Maturities
U.S.
Government
Securities $ -- $ -- $ -- $19,635 $ --
Other 79,996 21,968 4,288 22,733 38,619
7. FEDERAL TAX INFORMATION
It is each Fund's intention to continue to qualify as a regulated investment
company for federal income tax purposes under Subchapter M of the Internal
Revenue Code, as amended, and to distribute a majority of its taxable income
and net capital gains. Accordingly, no pro-
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vision for federal income taxes is required. The timing and characterization of
certain income and capital gains distributions are determined annually in
accordance with Federal tax regulations which may differ from accounting
principles generally accepted in the United States of America. 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 paid-in-capital
or accumulated net realized gain, as appropriate, in the period that the
differences arise.
The tax character of dividends and distributions declared during the years
ended December 31, 2004 and December 31, 2003 were as follows:
Ordinary Tax Exempt Long-Term
Income Income Capital Gain Total
(000) (000) (000) (000)
--------- ---------- ------------ -------
Equity Fund
2004 $1,049 $ -- $ -- $1,049
2003 653 -- -- 653
Strategic Growth
Fund
2004 $ -- $ -- $ -- $ --
2003 -- -- -- --
Tax Managed
Equity Fund
2004 $ 311 $ -- $1,126 $1,437
2003 250 -- -- 250
High Grade
Income Fund
2004 $5,298 $ -- $ 547 $5,845
2003 5,273 -- 2,577 7,850
Hawaii Municipal
Bond Fund
2004 $ 71 $7,003 $1,786 $8,860
2003 14 7,326 1,872 9,212
Money Market Fund
2004 $2,030 $ -- $ -- $2,030
2003 1,740 -- -- 1,740
Treasury Money
Market Fund
2004 $2,173 $ -- $ -- $2,173
2003 2,386 -- -- 2,386
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As of December 31, 2004, the components of Distributable Earnings
(Accumulated Losses) on a tax basis were as follows:
Treasury
Strategic Tax High Grade Hawaii Money Money
Equity Growth Managed Income Municipal Market Market
Fund Fund Equity Fund Fund Bond Fund Fund Fund
(000) (000) (000) (000) (000) (000) (000)
------ --------- ----------- ---------- --------- ------- --------
Undistributed
ordinary
income $ -- $ -- $ 14 $ 654 $ -- $ -- $ 9
Undistributed
tax exempt
income -- -- -- -- 1 -- --
Undistributed
long-term
capital gain in -- 368 49 108 25 -- --
Capital loss
carryforward
expiring:
Dec. 2005 -- -- -- -- -- (2) --
Dec. 2008 -- -- -- -- -- (2) --
Dec. 2009 (36,271) -- -- -- -- (18) --
Dec. 2010 (25,686) -- -- -- -- -- --
Dec. 2011 (1,697) -- -- -- -- -- --
Dec. 2012 -- -- -- -- -- -- (27)
Post-October
Losses -- -- -- -- -- (2) (19)
Other Temporary
Differences -- (16) (15) (486) 44 -- --
Unrealized
appreciation 18,694 13,508 6,799 4,371 9,564 -- --
For Federal income tax purposes, capital loss carryforwards represent
realized losses of the Funds that may be carried forward for a maximum period of
eight years and applied against future capital gains. During the year ended
December 31, 2004 the Equity Fund, Strategic Growth Fund, and the Money Market
Fund, utilized capital loss carryforwards of $1,987,036, $1,048,930 and $442,
respectively, to offset realized capital gains.
Post-October losses represent losses realized on investment transactions from
November 1, 2003 through December 31, 2004 that, in accordance with Federal
income tax regulations the Funds have elected to defer and treat as having
arisen in the following fiscal year.
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The aggregate gross unrealized appreciation and depreciation of securities
held by the Equity, Strategic Growth, Tax Managed Equity, High Grade Income, and
Hawaii Municipal Bond Funds for Federal income tax purposes at June 30, 2005
were as follows:
Strategic Tax High Grade Hawaii
Equity Growth Managed Income Municipal
Fund Fund Equity Fund Fund Bond Fund
(000) (000) (000) (000) (000)
------- --------- ----------- ---------- ---------
Federal Tax Cost $113,884 $86,620 $30,838 $184,723 $169,980
-------- ------- ------- -------- --------
Gross
Unrealized
Appreciation 13,239 15,979 6,102 5,414 8,579
Gross
Unrealized
Depreciation (7,315) (3,088) (1,081) (669) (61)
-------- ------- ------- -------- --------
Net
Unrealized
Appreciation $ 5,924 $12,891 $ 5,021 $ 4,745 $ 8,518
======== ======= ======= ======== ========
8. CONCENTRATION OF CREDIT RISK
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.
9. OTHER
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
claim is considered remote.
10. SUBSEQUENTEVENT
At a special meeting held on April 7, 2005, the Board of the Bishop Street
Funds unanimously voted to change the name of the Equity Fund to the Large Cap
Growth Fund. Effective July 1, 2005, all references to the "Equity Fund" are
hereby replaced with "Large Cap Growth Fund."
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DISCLOSURE OF FUND EXPENSES (UNAUDITED)
All mutual funds have operating expenses. As a shareholder of a mutual fund,
your investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, administrative services, 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.
The table on the next page illustrates your Fund's costs in two ways:
o 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 = 8.6), then multiply that ratio by the number
shown for your Fund under "Expenses Paid During Period."
o 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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Beginning Ending Expenses
Account Account Annualized Paid
Value Value Expense During
1/1/05 6/30/05 Ratios Period*
- ------------------------------------------------------------------------------------------
EQUITY FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $ 965.70 1.00% $4.87
HYPOTHETICAL 5% RETURN 1,000.00 1,019.84 1.00 5.01
- ------------------------------------------------------------------------------------------
STRATEGIC GROWTH FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $ 991.60 1.05% $5.18
HYPOTHETICAL 5% RETURN 1,000.00 1,019.59 1.05 5.26
- ------------------------------------------------------------------------------------------
TAX MANAGED EQUITY FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $ 966.20 1.00% $4.88
HYPOTHETICAL 5% RETURN 1,000.00 1,019.84 1.00 5.01
- ------------------------------------------------------------------------------------------
HIGH GRADE INCOME FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,027.70 0.76% $3.82
HYPOTHETICAL 5% RETURN 1,000.00 1,021.03 0.76 3.81
- ------------------------------------------------------------------------------------------
HAWAII MUNICIPAL BOND FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,020.90 0.55% $2.76
HYPOTHETICAL 5% RETURN 1,000.00 1,022.07 0.55 2.76
- ------------------------------------------------------------------------------------------
HAWAII MUNICIPAL BOND FUND -- CLASS A
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,019.70 0.80% $4.01
HYPOTHETICAL 5% RETURN 1,000.00 1,020.83 0.80 4.01
- ------------------------------------------------------------------------------------------
MONEY MARKET FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,011.10 0.50% $2.49
HYPOTHETICAL 5% RETURN 1,000.00 1,022.32 0.50 2.51
- ------------------------------------------------------------------------------------------
MONEY MARKET FUND -- CLASS A
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,009.90 0.75% $3.74
HYPOTHETICAL 5% RETURN 1,000.00 1,021.08 0.75 3.76
- ------------------------------------------------------------------------------------------
TREASURY MONEY MARKET FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,010.70 0.44% $2.19
HYPOTHETICAL 5% RETURN 1,000.00 1,022.61 0.44 2.21
- ------------------------------------------------------------------------------------------
*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).
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APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS (UNAUDITED)
BOARD CONSIDERATION AND APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY
AGREEMENTS. The initial and annual approval of the investment advisory agreement
with Bishop Street Capital Management (the "Adviser") and the sub-advisory
agreements with BNP Paribas Asset Management, Inc. ("BNP PAM") and Fisher
Francis Trees & Watts, Inc. ("FFTW") must be made by: (i) the vote of the
Trustees or a vote of the shareholders of the relevant Fund, as applicable; and
(ii) the vote of a majority of the Trustees who are not parties to the
agreements or "interested persons" of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. Each year the Board
of Trustees calls and holds a meeting to decide whether to renew the agreements
for the upcoming year. This year the Board also called and held meetings to
consider the approval of a new sub-advisory agreement. In preparation for such
meetings, the Board requests and reviews a wide variety of information. The
Trustees use this information to help them decide whether to approve a new
agreement or renew an agreement for another year.
In preparation for a meeting held on February 17, 2005, at which the Board
considered the renewal of the agreements with the Adviser and BNP PAM, and for
meetings held on April 7, 2005 and May 13, 2005, at which the Board considered
the selection and approval of FFTW, the Board requested and received materials
from the Adviser, BNP PAM, and FFTW about: (a) the quality of the Adviser's, BNP
PAM's, and FFTW's investment management and other services; (b) the Adviser's,
BNP PAM's, and FFTW's investment management personnel; (c) the Adviser's, BNP
PAM's, and FFTW's operations and financial condition; (d) the Adviser's, BNP
PAM's, and FFTW's trading practices (including any soft dollar arrangements) and
investment strategies; (e) the level of the fees that the Adviser and BNP PAM
charges the Funds compared with the fees they charge to comparable mutual funds
or accounts (if any); (f) each Fund's overall fees and operating expenses
compared with similar mutual funds; (g) the level of the Adviser's and BNP PAM's
profitability from their Fund-related operations; (h) the Adviser's, BNP PAM's,
and FFTW's compliance systems; (i) the Adviser's, BNP PAM's, and FFTW's policies
on and compliance procedures for personal securities transactions; (j) the
Adviser's, BNP PAM's, and FFTW's reputation, expertise and resources in domestic
financial markets; (k) each Fund's performance compared with similar mutual
funds; and (l) FFTW's performance records for similar mutual funds.
Representatives from the Adviser, BNP PAM, and FFTW presented additional oral
and written information to the Board at the relevant meeting to help the Board
evaluate the Adviser's, BNP PAM's, and FFTW's fees and other aspects of the
agreements. The Board also considered information presented by these and other
service providers at meetings throughout the year. The Trustees discussed the
written materials, oral presentations, and any other information that the Board
received, and considered the approval of the agreements in light of this
information.
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Based on the Board's deliberations and its evaluation of the information it
received, the Board, including all of the independent Trustees, approved the
agreements and the selection of the Adviser, BNP PAM, and FFTW. The Board
considered the following specific factors, none of which was controlling, and
made the following conclusions:
NATURE, EXTENT, AND QUALITY OF SERVICES. The Board received and considered
information regarding the nature, extent, and quality of services to be provided
to the Funds by the Adviser, BNP PAM, and FFTW. In this regard, the Trustees
evaluated, among other things, the Adviser's, BNP PAM's, and FFTW's personnel,
experience, track record, and compliance program. The Board considered the
background and experience of the Adviser's, BNP PAM's, and FFTW's senior
management and the expertise of, and amount of attention expected to be given to
the Funds by, their portfolio management teams. The Board reviewed the
qualifications, backgrounds, and responsibilities of the portfolio managers
responsible for the day-to-day management of the Funds. With respect to the
Adviser, the Board specifically considered certain personnel changes and their
implications for the Funds. The Board also reviewed information pertaining to
the Adviser's, BNP PAM's, and FFTW's organizational structure, senior
management, investment operations, and other relevant information. The Board
concluded that, within the context of its full deliberations, the nature,
extent, and quality of the services to be provided to the Funds by the Adviser,
BNP PAM, and FFTW supported the approval of the agreements.
PERFORMANCE. The Board considered the investment performance of each Fund,
including any periods of outperformance and underperformance, both on an
absolute basis and a comparative basis to indices and other funds within the
same investment categories. Specifically, the Board considered each Fund's
performance relative to its peer group and appropriate benchmarks in light of
total return, yield, and market trends. As part of this review, the Board
considered the composition of the peer group and selection criteria, as well as
market risk and shareholder risk expectations. The Board considered the
Adviser's explanations regarding specific performance issues relating to asset
size and adviser resources. With respect to FFTW, the Board received and
considered information regarding other money market funds advised by FFTW,
noting that these funds had no history of any material deviation between
amortized cost and market price. The Board concluded that, within the context of
its full deliberations, the performance of the Funds and the Adviser, BNP PAM,
and FFTW supported the approval of the agreements.
FUND EXPENSES. With respect to advisory fees, the Board considered the rate of
compensation under the agreements and each Fund's net operating expense ratio in
comparison to those of comparable mutual funds. The Trustees also considered
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information about average expense ratios of comparable mutual funds in each
Fund's peer group. Finally, the Trustees considered the effect of the Adviser's
and its affiliates' voluntary waiver of fees and expenses, where applicable, to
prevent total fund expenses from exceeding a specified amount and that due to
these waivers net operating expenses have been maintained at competitive levels.
The Board concluded that, within the context of its full deliberations, the
expenses of the Funds are reasonable and supported the approval of the
agreements.
PROFITABILITY. The Board reviewed information about the profitability of the
Funds to the Adviser and BNP PAM and considered whether the level of
profitability was reasonable and justified in light of the quality of the
services rendered to the Funds. The Board concluded that, within the context of
its full deliberations, the profitability of the Adviser and BNP PAM is within
the range the Board considered reasonable and appropriate. With respect to FFTW,
there is no historical profitability with regard to its arrangements with the
Funds because the engagement of FFTW is new.
ECONOMIES OF SCALE. The Board considered the existence of economies of scale and
whether they were passed along to Fund shareholders through a graduated advisory
fee schedule or other means, including any fee and expense waivers by the
Adviser and its affiliates. The Board also considered the potential economies of
scale and other efficiencies that may result from increases in the Funds' asset
levels, as well as the potential ancillary benefits from FFTW's affiliation with
BNP Paribas, which may result in additional distribution channels becoming
available. The Board concluded that, within the context of its full
deliberations, the Funds obtain reasonable benefit from economies of scale.
Bishop Street Funds
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SHAREHOLDER VOTING RESULTS (UNAUDITED)
At a special meeting held on August 15, 2005, the shareholders of the Bishop
Street Funds voted on the proposal listed below.
Proposal: To approve the new investment sub-advisory agreement between the
Trust, on behalf of the Funds, Bishop Street Capital Management, and Fischer
Francis Trees & Watts, Inc.
The results of the voting were as follows:
TREASURY MONEY MARKET FUND
% OF
NUMBER OUTSTANDING % OF SHARES
OF SHARES SHARES VOTED
--------- ----------- -----------
Affirmative 140,753,432.000 55.037% 99.961%
Against 0.000 0.000% 0.000%
Abstain 54,966.000 0.021% 0.039%
TOTAL 140,808,398.000 55.058% 100.000%
Record Total 255,743,563.690
Voted Shares 140,808,398.000
Percent Voted 55.058%
MONEY MARKET FUND
% OF
NUMBER OUTSTANDING % OF SHARES
OF SHARES SHARES VOTED
--------- ----------- -----------
Affirmative 120,280,730.000 64.348% 98.293%
Against 11,692.000 0.006% 0.010%
Abstain 2,077,034.000 1.111% 1.697%
TOTAL 122,369,456.000 65.465% 100.000%
Record Total 186,922,125.776
Voted Shares 122,369,456.000
Percent Voted 65.465%
June 30, 2005 www.bishopstreetfunds.com
65
Notes
Notes
Notes
[Background Graphic Omitted]
Investment Adviser
Bishop Street Capital Management
Honolulu, HI 96813
Administrator
SEI Investments Global Funds Services
Oaks, PA 19456
Distributor
SEI Investments Distribution Co.
Oaks, PA 19456
Transfer Agent
DST Systems, Inc.
Kansas City, MO 64121
Custodian
Union Bank of California, N.A.
San Francisco, CA 94101
Legal Counsel
Morgan, Lewis & Bockius LLP
Philadelphia, PA 19103
Independent registered public accounting firm
PricewaterhouseCoopers LLP
Philadelphia, PA 19103
[BISHOP STREET LOGO OMITTED]
For more information about Bishop Street Funds, Call 1-800-262-9565
or your Investment Specialist
Visit us online at www.bishopstreetfunds.com
[BISHOP STREET LOGO OMITTED]
Bishop Street Funds
P.O. Box 3708
Honolulu, HI 96811
This report and the financial
statements contained herein are
submitted for the general information
of Bishop Street Funds' shareholders.
This report is not authorized for
distribution to prospective investors
unless preceded or accompanied by an
effective prospectus.
Shares of Bishop Street Funds are
NOT deposits or obligations of, or
guaranteed by First Hawaiian Bank or
any of its affiliates. Such shares are
also NOT federally insured by the
Federal Deposit Insurance Corporation,
the Federal Reserve Board, or any
other agency. Investment in shares of
mutual funds involves risk, including
the possible loss of principal. The
Bishop Street Funds are distributed by
SEI Investments Distribution Co., which
is not affiliated with First Hawaiian
Bank, Bank of the West or BancWest
Corporation. BancWest Corporation is a
wholly-owned subsidiary of BNP Paribas.
BSF-SA-004-1100
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.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable. 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.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that have materially affected, or are reasonably likely to materially affect,
the registrant's internal control over financial reporting.
ITEMS 12. 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/ Robert A. Nesher
--------------------
Robert A. Nesher
President
Date: August 29, 2005
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/ Robert A. Nesher
--------------------
Robert A. Nesher
President
Date: August 29, 2005
By (Signature and Title)* /s/ Michael Lawson
--------------------
Michael Lawson
Treasurer and Controller
Date: August 29, 2005
* Print the name and title of each signing officer under his or her signature.