UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM N-CSRS
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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)
--------
101 Federal Street
Boston, MA 02110
(Address of principal executive offices)
SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-262-9565
DATE OF FISCAL YEAR END: DECEMBER 31, 2006
DATE OF REPORTING PERIOD: JUNE 30, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED]
BISHOP STREET
FUNDS
SEMI-ANNUAL
REPORT
JUNE 30, 2006
LARGE CAP GROWTH FUND
STRATEGIC GROWTH FUND
LARGE CAP CORE 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]
FUNDS
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
Large Cap Growth Fund ................................................ 3
Strategic Growth Fund ................................................ 8
Large Cap Core Equity Fund ........................................... 12
High Grade Income Fund ............................................... 18
Hawaii Municipal Bond Fund ........................................... 26
Money Market Fund .................................................... 36
Treasury Money Market Fund ........................................... 40
STATEMENTS OF OPERATIONS ................................................... 42
STATEMENTS OF CHANGES IN NET ASSETS ........................................ 44
FINANCIAL HIGHLIGHTS ....................................................... 48
NOTES TO FINANCIAL STATEMENTS .............................................. 52
DISCLOSURE OF FUND EXPENSES ................................................ 61
APPROVAL OF INVESTMENT ADVISORY AND
SUB-ADVISORY AGREEMENTS .............................................. 63
SHAREHOLDER VOTING RESULTS ................................................. 66
1
- --------------------------------------------------------------------------------
BISHOP STREET
LETTER TO SHAREHOLDERS
FUNDS
- --------------------------------------------------------------------------------
[PHOTO OMITTED]
We have now come full circle from the economic cycle initiated by the Federal
Reserve Bank's easing policy in 2002 which precipitated the economic expansion
since then. The challenge at that time was to kick start the economy out of its
post tech bubble, post 9/11 stagnation, an effort which, by most measures,
succeeded. The Fed rate cuts drove a cycle of higher home prices and refinancing
which spurred consumer spending. Increased economic activity in turn creates
inflationary pressure, prompting the Fed to raise rates. Increased mortgage
rates are currently creating conditions for the long awaited slowdown in the
housing market. Do we now run the risk of cycling back to economic conditions
dominated by recessionary risk?
The answer depends on Fed chair Bernanke's ability to walk the line between
inflation concerns and recessionary fears in setting the fed funds rate. As the
effect of rate changes on economic activity is lagging; setting the correct rate
policy becomes more art than science. After 17 consecutive increases over the
last 2 years, is this the right point to move into a neutral mode? Only time
will tell. However this much is clear: During periods of Fed easing, equity
markets show an average annual return of 12.9%, compared to 4.5% during Fed
tightening. With core CPI growing at a 2.4% annual rate, low by historical
standards, and home sales off 6.6% year on year, the thinking here is the Fed
gets it right, resulting in a relatively soft landing for the U.S. economy.
Sincerely,
/s/ Dale Kobayashi
Dale Kobayashi
President and Chief Investment Officer
Bishop Street Capital Management
Bishop Street Funds 2
Large Cap Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS+
- --------------------------------------------------------------------------------
Percentage of
Investments
----------------------------------------------------------------------------
1. Halliburton 3.8%
----------------------------------------------------------------------------
2. United Technologies 3.6%
----------------------------------------------------------------------------
3. Goldman Sachs Group 3.5%
----------------------------------------------------------------------------
4. JPMorgan Chase 3.2%
----------------------------------------------------------------------------
5. Amgen 3.0%
----------------------------------------------------------------------------
6. Citigroup 3.0%
----------------------------------------------------------------------------
7. Microsoft 2.9%
----------------------------------------------------------------------------
8. UnitedHealth Group 2.5%
----------------------------------------------------------------------------
9. General Electric 2.4%
----------------------------------------------------------------------------
10. Johnson & Johnson 2.3%
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
Financials 18.2%
Health Care 16.6%
Information Technology 15.2%
Industrials 13.6%
Energy 13.2%
Consumer Staples 8.3%
Consumer Discretionary 8.1%
Materials 3.1%
Telecommunication Services 2.5%
Short-Term Investments 1.2%
- --------------------------------------------------------------------------------
+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 -- 98.8%
CONSUMER DISCRETIONARY -- 8.1%
10,885 Best Buy $ 597
11,875 Carnival (A) 496
20,320 eBay* (A) 595
7,746 IAC/InterActiveCorp* (A) 205
3,762 Mohawk Industries* 265
3,013 Omnicom Group 268
----------
2,426
----------
June 30, 2006 3 www.bishopstreetfunds.com
Large Cap Growth Fund (UNAUDITED)
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STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
CONSUMER STAPLES -- 8.3%
16,986 CVS (A) $ 521
10,125 PepsiCo 608
10,860 Procter & Gamble 604
9,830 Sysco 300
6,944 Whole Foods Market 449
----------
2,482
----------
ENERGY -- 13.2%
4,170 Apache 285
3,795 ConocoPhillips 249
9,144 GlobalSantaFe 528
15,506 Halliburton (A) 1,151
9,750 Peabody Energy (A) 543
9,106 Schlumberger Ltd. (A) 593
7,450 Transocean* 598
----------
3,947
----------
FINANCIALS -- 18.2%
4,455 AMBAC Financial Group (A) 361
6,228 American Express 331
6,570 Bank of America 316
18,573 Citigroup 896
6,925 Goldman Sachs Group 1,042
22,605 JPMorgan Chase 949
7,950 Merrill Lynch 553
7,554 St. Paul Travelers 337
9,865 Wells Fargo 662
----------
5,447
----------
HEALTH CARE -- 16.6%
13,745 Amgen* 896
12,280 Boston Scientific* 207
13,850 Caremark Rx (A) 691
5,541 Genzyme* 338
5,690 Gilead Sciences* (A) 337
11,709 Johnson & Johnson 702
17,721 Pfizer 416
17,009 UnitedHealth Group 762
4,600 WellPoint* 335
6,340 Wyeth 281
----------
4,965
----------
INDUSTRIALS -- 13.6%
2,360 Boeing (A) 193
5,360 Danaher 345
Bishop Street Funds 4
Large Cap Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
INDUSTRIALS -- (CONTINUED)
6,129 Fluor $ 570
22,115 General Electric 729
6,892 Pentair 236
10,950 Tyco International Ltd. 301
2,680 Union Pacific 249
4,775 United Parcel Service, Cl B (A) 393
16,810 United Technologies 1,066
----------
4,082
----------
INFORMATION TECHNOLOGY -- 15.2%
3,545 Analog Devices 114
7,161 Apple Computer* 409
12,834 Applied Materials (A) 209
17,940 Cisco Systems* 350
10,502 Dell* 256
11,800 EMC* 129
7,730 Hewlett-Packard 245
20,190 Intel (A) 383
3,177 International Business Machines (A) 244
4,117 Linear Technology 138
36,904 Microsoft 860
6,310 Motorola 127
10,810 Oracle* (A) 157
4,005 Paychex (A) 156
9,670 Qualcomm (A) 387
7,911 Symantec* (A) 123
5,280 Texas Instruments (A) 160
3,690 Yahoo!* 122
----------
4,569
----------
MATERIALS -- 3.1%
6,880 Dow Chemical 269
1,850 Phelps Dodge 152
9,630 Praxair 520
----------
941
----------
TELECOMMUNICATION SERVICES -- 2.5%
7,486 Corning* 181
701 Embarq* 29
14,025 Sprint Nextel 280
8,100 Verizon Communications 271
----------
761
----------
TOTAL COMMON STOCK (Cost $28,248) 29,620
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June 30, 2006 5 www.bishopstreetfunds.com
Large Cap Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Shares/Face Market
Amount Value
(000) (000)
----------- ----------
CORPORATE OBLIGATIONS (B) -- 5.2%
FINANCIALS -- 5.2%
$ 1,040 Bank of America
5.383%, 07/03/06 $ 1,040
520 Sigma Finance MTN (C)
5.330%, 07/07/06 520
----------
TOTAL CORPORATE OBLIGATIONS (Cost $1,560) 1,560
----------
COMMERCIAL PAPER (B) -- 5.2%
1,560 Morgan Stanley Dean Witter
5.383%, 11/09/06 1,560
----------
TOTAL COMMERCIAL PAPER (Cost $1,560) 1,560
----------
CERTIFICATES OF DEPOSIT/BANK NOTES (B) -- 3.5%
1,040 First Tennessee Bank
5.339%, 04/18/07 1,040
----------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $1,040) 1,040
----------
CASH EQUIVALENTS (D) -- 1.2%
180,054 Dreyfus Cash Management Fund, Institutional
Shares, 5.010% 180
180,026 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 5.060% 180
----------
TOTAL CASH EQUIVALENTS (Cost $360) 360
----------
REPURCHASE AGREEMENT (B) -- 11.5%
Lehman Brothers 5.363%, dated 06/30/06, to
be repurchased on 07/03/06, repurchase
price $3,451,087 (collateralized by various
collateralized mortgage obligations,
ranging in par value $167,290,000-$407,245,722,
0.000%-0.642%, 11/25/33-10/15/41; with total
3,450 market value $3,518,536) 3,450
----------
TOTAL REPURCHASE AGREEMENT (Cost $3,450) 3,450
----------
TOTAL INVESTMENTS (COST $36,218) -- 125.4% 37,590
----------
Bishop Street Funds 6
Large Cap Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
----------
OTHER ASSETS AND LIABILITIES -- (25.4)%
Payable Upon Return of Securities Loaned $ (7,609)
Investment Adviser Fees Payable (13)
Payable for Capital Shares Redeemed (5)
Administration Fees Payable (3)
Shareholder Servicing Fees Payable (2)
Other Assets and Liabilities, Net 8
----------
TOTAL OTHER ASSETS AND LIABILITIES (7,624)
----------
NET ASSETS -- 100.0% $ 29,966
==========
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $ 73,055
Undistributed net investment income 3
Accumulated net realized loss on investments (44,464)
Net unrealized appreciation on investments 1,372
----------
NET ASSETS $ 29,966
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($29,966,246 / 3,027,875 SHARES) $ 9.90
==========
* NON-INCOME PRODUCING SECURITY
(A) THE SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2006 (SEE
NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS. THE TOTAL VALUE OF SECURITIES
ON LOAN AT JUNE 30, 2006 WAS $7,364,261.
(B) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2006
WAS $7,609,411.
(C) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 2006. THE MATURITY DATE SHOWN IS THE NEXT
SCHEDULED RESET DATE.
(D) RATES SHOWN ARE THE 7-DAY EFFECTIVE YIELDS AS OF JUNE 30, 2006.
CL -- CLASS
LTD. -- LIMITED
MTN -- MEDIUM TERM NOTE
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 7 www.bishopstreetfunds.com
Strategic Growth Fund (UNAUDITED)
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TOP TEN EQUITY HOLDINGS+
- --------------------------------------------------------------------------------
Percentage of
Investments
----------------------------------------------------------------------------
1. XTO Energy 2.2%
----------------------------------------------------------------------------
2. Oracle 2.2%
----------------------------------------------------------------------------
3. Google 2.2%
----------------------------------------------------------------------------
4. Yum! Brands 2.1%
----------------------------------------------------------------------------
5. UnitedHealth Group 2.1%
----------------------------------------------------------------------------
6. Genentech 2.1%
----------------------------------------------------------------------------
7. Aetna 2.1%
----------------------------------------------------------------------------
8. W.W. Grainger 2.1%
----------------------------------------------------------------------------
9. United Technologies 2.1%
----------------------------------------------------------------------------
10. Hilton Hotels 2.1%
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
Information Technology 23.9%
Consumer Discretionary 20.0%
Health Care 19.7%
Financials 13.5%
Industrials 9.8%
Energy 8.1%
Materials 2.1%
Telecommunication Services 1.9%
Short-Term Investments 1.0%
- --------------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Market
Value
Shares (000)
------ ----------
COMMON STOCK -- 99.4%
CONSUMER DISCRETIONARY -- 20.1%
47,600 Abercrombie & Fitch, Cl A $ 2,638
95,400 Coach* 2,852
72,200 Federated Department Stores 2,643
102,607 Hilton Hotels 2,902
44,100 Lowe's 2,676
73,800 Nordstrom 2,694
110,250 Staples 2,681
57,300 Target 2,800
Bishop Street Funds 8
Strategic Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
CONSUMER DISCRETIONARY -- (CONTINUED)
39,100 W.W. Grainger $ 2,941
59,500 Yum! Brands 2,991
----------
27,818
----------
ENERGY -- 8.2%
63,500 Arch Coal 2,691
74,500 BJ Services 2,776
44,800 Exxon Mobil 2,748
70,500 XTO Energy 3,121
----------
11,336
----------
FINANCIALS -- 13.5%
27,500 Affiliated Managers Group* 2,389
49,800 Allstate 2,726
33,900 Capital One Financial 2,897
31,200 Everest Re Group Ltd. 2,701
18,200 Goldman Sachs Group 2,738
42,800 Lehman Brothers Holdings 2,788
36,700 Merrill Lynch 2,553
----------
18,792
----------
HEALTH CARE -- 19.8%
74,600 Aetna 2,979
42,800 Amgen* 2,792
55,100 Caremark Rx 2,748
34,500 Express Scripts* 2,475
36,500 Genentech* 2,986
43,100 Genzyme* 2,631
44,600 Gilead Sciences* 2,638
51,900 Medtronic 2,435
48,700 Sepracor* 2,783
66,700 UnitedHealth Group 2,987
----------
27,454
----------
INDUSTRIALS -- 9.8%
58,200 Canadian National Railway 2,546
174,200 Cendant 2,838
33,300 L-3 Communications Holdings 2,512
52,000 Norfolk Southern 2,767
46,200 United Technologies 2,930
----------
13,593
----------
June 30, 2006 9 www.bishopstreetfunds.com
Strategic Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
INFORMATION TECHNOLOGY -- 24.0%
100,100 Accenture Ltd., Cl A $ 2,835
76,700 Autodesk* 2,643
131,400 Cisco Systems* 2,566
7,200 Google* 3,019
89,900 Hewlett-Packard 2,848
111,300 Jabil Circuit* 2,849
62,600 Marvel Technology Group Ltd.* 2,775
126,600 Motorola 2,551
111,400 National Semiconductor 2,657
119,400 Nvidia* 2,542
213,000 Oracle* 3,087
142,900 Western Digital* 2,831
----------
33,203
----------
MATERIALS -- 2.1%
41,600 Allegheny Technologies 2,880
----------
TELECOMMUNICATIONS -- 1.9%
130,552 Sprint Nextel 2,610
----------
TOTAL COMMON STOCK (Cost $120,248) 137,686
----------
CASH EQUIVALENTS (A) -- 1.1%
732,982 Dreyfus Cash Management Fund, Institutional
Shares, 5.010% 733
732,955 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 5.060% 733
----------
TOTAL CASH EQUIVALENTS (Cost $1,466) 1,466
----------
TOTAL INVESTMENTS (COST $121,714) -- 100.5% 139,152
----------
OTHER ASSETS AND LIABILITIES -- (0.5)%
Payable for Investment Securities Purchased (473)
Payable for Capital Shares Redeemed (151)
Investment Adviser Fees Payable (83)
Administration Fees Payable (13)
Shareholder Servicing Fees Payable (11)
Trustees' Fees Payable (2)
Other Assets and Liabilities, Net 53
----------
TOTAL OTHER ASSETS AND LIABILITIES (680)
----------
NET ASSETS -- 100.0% $ 138,472
==========
Bishop Street Funds 10
Strategic Growth Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
----------
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $ 116,537
Accumulated net investment loss (96)
Accumulated net realized gain on investments 4,593
Net unrealized appreciation on investments 17,438
----------
NET ASSETS $ 138,472
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($138,471,995 / 9,818,405 SHARES) $ 14.10
==========
* NON-INCOME PRODUCING SECURITY
(A) RATES SHOWN ARE THE 7-DAY EFFECTIVE YIELDS AS OF JUNE 30, 2006.
CL -- CLASS
LTD. -- LIMITED
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 11 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS+
- --------------------------------------------------------------------------------
Percentage of
Investments
----------------------------------------------------------------------------
1. SPDR Trust, Ser 1 4.1%
----------------------------------------------------------------------------
2. Citigroup 2.4%
----------------------------------------------------------------------------
3. Johnson & Johnson 2.4%
----------------------------------------------------------------------------
4. Microsoft 2.2%
----------------------------------------------------------------------------
5. ConocoPhillips 2.2%
----------------------------------------------------------------------------
6. Chevron 1.9%
----------------------------------------------------------------------------
7. Ingersoll-Rand, Cl A 1.6%
----------------------------------------------------------------------------
8. Bear Stearns 1.6%
----------------------------------------------------------------------------
9. Pfizer 1.6%
----------------------------------------------------------------------------
10. Eaton 1.6%
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
Financials 18.9%
Information Technology 14.6%
Health Care 12.5%
Industrials 11.6%
Consumer Discretionary 11.5%
Energy 9.4%
Consumer Staples 8.0%
Exchange Traded Fund 4.1%
Short-Term Investments 3.4%
Materials 2.8%
Utilities 1.6%
Telecommunication Services 1.6%
- --------------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Market
Value
Shares (000)
------ ----------
COMMON STOCK -- 93.7%
CONSUMER DISCRETIONARY -- 11.7%
4,200 Apollo Group, Cl A* $ 217
4,800 Bed Bath & Beyond* 159
6,100 Best Buy 335
5,500 Brunswick 183
4,600 Carnival 192
13,000 Centex 654
10,600 Comcast, Cl A* 347
Bishop Street Funds 12
Large Cap Core Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
CONSUMER DISCRETIONARY -- (CONTINUED)
7,400 EchoStar Communications, Cl A* $ 228
2,700 Fortune Brands 192
4,500 Gannett 252
19,800 H&R Block 472
7,400 Harley-Davidson 406
12,000 Hasbro 217
17,000 Home Depot 608
8,000 International Game Technology 304
8,635 Liberty Media Capital* 723
10,475 Liberty Media Interactive* 181
3,300 McGraw-Hill 166
3,200 Omnicom Group 285
13,800 Pulte Homes 397
3,400 Sherwin-Williams 162
3,300 VF 224
----------
6,904
----------
CONSUMER STAPLES -- 8.1%
10,000 Altria Group 734
11,600 Archer-Daniels-Midland 479
2,800 Bunge 141
5,900 Campbell Soup 219
10,700 Coca-Cola 460
6,000 Costco Wholesale 343
8,000 PepsiCo 480
13,500 Procter & Gamble 751
13,000 Wal-Mart Stores 626
11,600 WM Wrigley Jr. 526
----------
4,759
----------
ENERGY -- 9.5%
10,700 Apache 730
19,100 BJ Services 712
18,200 Chevron 1,129
20,100 ConocoPhillips 1,317
8,700 Devon Energy 526
5,400 Encana Corp 284
4,200 Occidental Petroleum 431
7,100 Valero Energy 472
----------
5,601
----------
FINANCIALS -- 19.1%
10,900 ACE 551
2,900 Allstate 159
15,700 American International Group 927
June 30, 2006 13 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
FINANCIALS -- (CONTINUED)
12,800 Bank of America $ 616
6,800 Bear Stearns 952
3,800 Capital One Financial 325
4,600 CIT Group 240
29,700 Citigroup 1,433
11,800 Countrywide Credit Industry 449
9,200 Fannie Mae 442
1,700 Franklin Resources 148
4,500 Freddie Mac 257
5,200 Golden West Financial 386
3,300 Goldman Sachs Group 496
6,100 Hartford Financial Services Group 516
20,300 JPMorgan Chase 853
5,900 Lehman Brothers Holdings 384
6,200 Merrill Lynch 431
8,900 Morgan Stanley 563
19,005 Sovereign Bancorp 386
17,000 St Paul Travelers 758
----------
11,272
----------
HEALTH CARE -- 12.7%
13,700 Amgen* 894
10,000 Biogen Idec* 463
3,400 Caremark Rx 170
5,200 Coventry Health Care* 286
8,000 Genzyme* 488
23,500 Johnson & Johnson 1,408
9,100 Laboratory Corp of America Holdings* 566
5,100 Medco Health Solutions* 292
8,400 Merck 306
40,500 Pfizer 951
8,900 Quest Diagnostics 533
11,600 UnitedHealth Group 519
6,700 Wyeth 298
5,600 Zimmer Holdings* 318
----------
7,492
----------
INDUSTRIALS -- 11.8%
7,200 Caterpillar 536
4,400 Danaher 283
12,500 Eaton 942
3,600 Exelon 205
12,300 General Dynamics 805
16,600 General Electric 547
12,400 Illinois Tool Works 589
Bishop Street Funds 14
Large Cap Core Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
INDUSTRIALS -- (CONTINUED)
23,000 Ingersoll-Rand, Cl A $ 984
4,300 ITT Industries 213
5,500 L-3 Communications Holdings 415
9,900 Norfolk Southern 527
6,200 Paccar 511
5,100 Parker Hannifin 396
----------
6,953
----------
INFORMATION TECHNOLOGY -- 14.7%
13,200 Accenture Ltd., Cl A 374
8,300 Adobe Systems* 252
6,800 Affiliated Computer Services, Cl A* 351
6,900 Apple Computer* 394
23,300 Applied Materials 379
6,600 Autodesk* 227
11,200 Broadcom, Cl A* 337
29,900 Cisco Systems* 584
4,300 Citrix Systems* 173
22,800 EMC* 250
5,900 Freescale Semiconductor* 174
7,300 Hewlett-Packard 231
11,500 Juniper Networks* 184
2,800 Kla-Tencor 116
5,000 Marvel Technology Group Ltd.* 222
57,600 Microsoft 1,342
18,500 Motorola 373
11,800 Nvidia* 251
33,900 Oracle* 491
11,200 Qualcomm 449
10,500 Sandisk* 535
19,300 Texas Instruments 585
8,400 Xilinx 190
7,600 Yahoo!* 251
----------
8,715
----------
MATERIALS -- 2.9%
6,500 Dow Chemical 254
3,900 Freeport-McMoRan Copper & Gold 216
3,500 Inco Ltd. 231
5,800 Phelps Dodge 476
7,500 United States Steel 526
----------
1,703
----------
June 30, 2006 15 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
TELECOMMUNICATION SERVICES -- 1.6%
4,300 Alltel $ 274
19,000 Sprint Nextel 380
9,500 Verizon Communications 318
----------
972
----------
UTILITIES -- 1.6%
5,600 FirstEnergy 303
11,300 TXU 676
----------
979
----------
TOTAL COMMON STOCK (Cost $56,938) 55,350
----------
EXCHANGE TRADED FUND -- 4.1%
19,100 SPDR Trust, Ser 1* 2,431
----------
TOTAL EXCHANGE TRADED FUND (Cost $2,455) 2,431
----------
CASH EQUIVALENTS (A) -- 3.4%
997,866 Dreyfus Cash Management Fund, Institutional
Shares, 5.010% 998
997,866 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 5.060% 998
----------
TOTAL CASH EQUIVALENTS (Cost $1,996) 1,996
----------
TOTAL INVESTMENTS (COST $61,389) -- 101.2% 59,777
----------
OTHER ASSETS AND LIABILITIES -- (1.2)%
Payable for Investment Securities Purchased (761)
Payable for Capital Shares Redeemed (50)
Investment Adviser Fees Payable (31)
Administration Fees Payable (5)
Shareholder Servicing Fees Payable (5)
Trustees' Fees Payable (1)
Other Assets and Liabilities, Net 116
----------
TOTAL OTHER ASSETS AND LIABILITIES (737)
----------
NET ASSETS -- 100.0% $ 59,040
==========
Bishop Street Funds 16
Large Cap Core Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
----------
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $ 60,847
Distributions in excess of net investment income (2)
Accumulated net realized loss on investments (193)
Net unrealized depreciation on investments (1,612)
----------
NET ASSETS $ 59,040
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($59,039,778 / 6,133,078 SHARES) $ 9.63
==========
* NON-INCOME PRODUCING SECURITY
(A) RATES SHOWN ARE THE 7-DAY EFFECTIVE YIELDS AS OF JUNE 30, 2006.
CL -- CLASS
LTD. -- LIMITED
SER -- SERIES
SPDR -- STANDARD & POOR'S DEPOSITARY RECEIPT
COST FIGURES SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 17 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS+
- --------------------------------------------------------------------------------
Coupon Maturity Percentage of
Rate Date Investments
----------------------------------------------------------------------------
1. U.S. Treasury Bonds 7.250% 05/15/16 4.8%
----------------------------------------------------------------------------
2. U.S. Treasury Bonds 4.500% 02/15/36 4.0%
----------------------------------------------------------------------------
3. U.S. Treasury Bonds 7.500% 11/15/16 2.4%
----------------------------------------------------------------------------
4. FNMA 7.250% 01/15/10 2.1%
----------------------------------------------------------------------------
5. FHLMC MTN 4.850% 12/01/09 2.1%
----------------------------------------------------------------------------
6. Goldman Sachs Group 6.600% 01/15/12 1.8%
----------------------------------------------------------------------------
7. FHLB 3.375% 02/15/08 1.8%
----------------------------------------------------------------------------
8. Wal-Mart Stores 8.000% 09/15/06 1.8%
----------------------------------------------------------------------------
9. Abbott Laboratories 6.400% 12/01/06 1.8%
----------------------------------------------------------------------------
10. FHLMC 5.125% 10/15/08 1.8%
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
U.S. Government Agency Obligations 33.2%
U.S. Treasury Obligations 18.7%
Financials 14.2%
Consumer Discretionary 8.0%
Health Care 5.9%
Energy 4.3%
Information Technology 3.5%
Industrials 3.4%
Consumer Staples 2.9%
Telecommunication Services 1.8%
U.S. Government Mortgage-Backed Obligations 1.5%
Municipal Bonds 1.0%
Utilities 1.0%
Short-Term Investments 0.6%
- --------------------------------------------------------------------------------
+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 -- 48.8%
AEROSPACE & DEFENSE -- 2.7%
General Dynamics
$ 1,000 4.500%, 08/15/10 $ 960
Rockwell Automation
1,200 6.700%, 01/15/28 1,273
United Technologies
1,350 6.350%, 03/01/11 1,382
----------
3,615
----------
Bishop Street Funds 18
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
AUTO FINANCE -- 1.1%
Toyota Motor Credit
$1,500 5.450%, 05/18/11 $ 1,492
----------
AUTOMOTIVE -- 0.5%
DaimlerChrysler NA Holding
700 8.000%, 06/15/10 743
----------
BANKS -- 3.0%
Bank of America
2,350 4.875%, 01/15/13 2,236
BHP Billiton Finance
850 5.250%, 12/15/15 806
Caterpillar Financial Service
1,000 5.500%, 03/15/16 970
----------
4,012
----------
BIOTECHNOLOGY -- 0.9%
Boston Scientific
1,350 4.250%, 01/12/11 1,242
----------
BROADCASTING & CABLE -- 1.9%
TCI Communications
1,400 7.875%, 08/01/13 1,509
Turner Broadcasting System
975 8.375%, 07/01/13 1,073
----------
2,582
----------
COMPUTER HARDWARE -- 2.0%
Cisco Systems
1,400 5.500%, 02/22/16 1,345
Dell
1,325 6.550%, 04/15/08 1,343
----------
2,688
----------
FINANCIALS -- 13.5%
American General Finance MTN, Ser G
1,400 5.750%, 03/15/07 1,401
Bank of America (B)
3,960 5.383%, 07/03/06 3,960
Boeing Capital (A)
1,400 6.500%, 02/15/12 1,448
CIT Group
1,350 5.000%, 11/24/08 1,332
Fannie Mae (D)
625 4.750%, 03/30/09 614
June 30, 2006 19 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
FINANCIALS -- (CONTINUED)
General Electric Capital MTN, Ser A
$2,350 5.450%, 01/15/13 $ 2,310
Goldman Sachs Group
2,350 6.600%, 01/15/12 2,425
Jefferies Group
675 6.250%, 01/15/36 616
JPMorgan Chase
1,350 3.500%, 03/15/09 1,280
Sigma Finance MTN (B) (C)
1,980 5.330%, 07/07/06 1,980
Unitrin
850 4.875%, 11/01/10 812
----------
18,178
----------
FOOD & BEVERAGE -- 0.7%
ConAgra Foods
884 7.875%, 09/15/10 946
----------
GENERAL MERCHANDISE -- 2.7%
Target
1,150 6.350%, 01/15/11 1,181
Wal-Mart Stores
2,400 8.000%, 09/15/06 2,409
----------
3,590
----------
HEALTH CARE -- 2.1%
Johnson & Johnson
1,400 6.950%, 09/01/29 1,603
UnitedHealth Group
1,250 5.200%, 01/17/07 1,247
----------
2,850
----------
HOUSEHOLD PRODUCTS -- 1.7%
Proctor & Gamble
1,350 8.000%, 10/26/29 1,662
Rubbermaid
600 6.600%, 11/15/06 602
----------
2,264
----------
MOVIES & ENTERTAINMENT -- 1.1%
Walt Disney MTN
1,400 6.200%, 06/20/14 1,423
----------
OIL & GAS - EQUIPMENT/SERVICES -- 0.9%
Baker Hughes
1,175 6.000%, 02/15/09 1,184
----------
Bishop Street Funds 20
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
OIL & GAS - EXPLORATION/PRODUCTION -- 1.0%
Anadarko Petroleum
$1,250 7.200%, 03/15/29 $ 1,294
----------
OIL & GAS - INTEGRATED -- 2.4%
BP Amoco
1,385 9.125%, 03/01/11 1,582
Occidental Petroleum
1,600 6.750%, 01/15/12 1,683
----------
3,265
----------
PHARMACEUTICALS -- 2.8%
Abbott Laboratories
2,400 6.400%, 12/01/06 2,406
1,400 5.400%, 09/15/08 1,395
----------
3,801
----------
REAL ESTATE -- 0.8%
Post Apartment Homes LP
1,050 7.700%, 12/20/10 1,112
----------
RETAIL - DRUGS -- 1.5%
CVS (A)
2,200 4.875%, 09/15/14 2,011
----------
RETAIL - FOOD -- 0.7%
McDonald's MTN, Ser E (A)
900 5.950%, 01/15/08 904
----------
SEMI-CONDUCTORS -- 1.5%
Applied Materials
800 6.750%, 10/15/07 808
Duke Energy
1,275 4.200%, 10/01/08 1,232
----------
2,040
----------
TELECOMMUNICATIONS -- 1.7%
GTE South, Ser C
675 6.000%, 02/15/08 675
Sprint Capital
1,475 7.625%, 01/30/11 1,570
Verizon Global Funding MTN
100 7.600%, 03/15/07 101
----------
2,346
----------
TRANSPORTATION SERVICES -- 0.6%
FedEx
800 7.250%, 02/15/11 843
----------
June 30, 2006 21 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
UTILITIES -- 1.0%
Dominion Resources
$1,350 4.125%, 02/15/08 $ 1,316
----------
TOTAL CORPORATE OBLIGATIONS (Cost $68,145) 65,741
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 32.8%
FHLB
200 6.875%, 08/13/10 210
1,000 6.000%, 08/24/15 1,000
1,350 5.375%, 02/15/07 1,348
1,000 5.000%, 03/20/07 996
1,000 5.000%, 02/22/13 961
1,300 4.750%, 08/13/10 1,266
1,450 4.100%, 06/13/08 1,414
1,000 4.000%, 02/27/14 (D) 982
1,000 3.875%, 07/24/09 955
1,750 3.875%, 02/12/10 1,662
1,800 3.750%, 08/15/08 1,739
1,000 3.600%, 10/19/07 976
2,500 3.375%, 02/15/08 2,418
250 3.000%, 08/13/09 (D) 249
200 2.625%, 02/16/07 197
FHLMC
1,300 6.375%, 08/01/11 1,296
700 5.500%, 08/20/19 675
1,400 5.200%, 03/05/19 1,313
2,400 5.125%, 10/15/08 (A) 2,383
1,000 5.000%, 01/30/14 963
1,400 4.750%, 05/06/13 1,319
1,500 4.625%, 08/15/08 1,475
1,350 4.375%, 07/30/09 1,310
1,400 4.375%, 03/01/10 1,348
FHLMC MTN
1,400 5.750%, 05/23/11 1,395
1,400 5.400%, 02/01/16 1,349
1,400 5.250%, 12/01/14 1,341
1,000 5.000%, 12/27/07 992
375 5.000%, 02/08/08 372
200 5.000%, 06/18/18 (D) 189
2,800 4.850%, 12/01/09 (A) 2,739
1,000 3.650%, 05/07/08 968
200 2.500%, 12/04/06 198
Bishop Street Funds 22
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- (CONTINUED)
FNMA
$2,600 7.250%, 01/15/10 $ 2,748
250 5.280%, 02/27/09 246
200 4.500%, 08/04/08 196
800 3.875%, 11/17/08 (A) 771
200 3.250%, 03/17/08 193
2,000 2.540%, 01/12/07 1,969
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $45,148) 44,121
----------
U.S. TREASURY OBLIGATIONS -- 18.4%
U.S. Treasury Bonds
2,750 7.500%, 11/15/16 (A) 3,253
5,500 7.250%, 05/15/16 (A) 6,368
1,700 6.375%, 08/15/27 1,930
800 6.250%, 05/15/30 (A) 906
1,000 6.000%, 02/15/26 (A) 1,083
1,500 5.250%, 11/15/28 (A) 1,493
5,900 4.500%, 02/15/36 (A) 5,290
U.S. Treasury Notes (A)
1,000 4.375%, 05/15/07 992
1,400 4.250%, 08/15/15 1,310
1,200 4.000%, 02/15/14 1,115
1,200 4.000%, 02/15/15 1,106
----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $24,906) 24,846
----------
COMMERCIAL PAPER (B) -- 4.4%
Morgan Stanley Dean Witter
5,940 5.383%, 11/09/06 5,940
----------
TOTAL COMMERCIAL PAPER (Cost $5,940) 5,940
----------
CERTIFICATES OF DEPOSIT/BANK NOTES (B) -- 2.9%
FINANCIALS -- 2.9%
First Tennessee Bank
3,960 5.339%, 04/18/07 3,962
----------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $3,962) 3,962
----------
June 30, 2006 23 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Shares/Face Value
Amount (000) (000)
- ----------- ----------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 1.5%
CONSUMER DISCRETIONARY -- 1.5%
FHLMC
$ 72 3.500%, 05/01/08 $ 68
FHLMC, Ser 3070, Cl DH
927 5.500%, 11/15/35 914
FNMA
1,059 3.500%, 08/01/10 983
----------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $2,045) 1,965
----------
MUNICIPAL BONDS -- 1.0%
GOVERNMENT AGENCIES -- 1.0%
Honolulu City & County, Ser E, GO, FGIC Insured
500 5.250%, 07/01/20 530
Honolulu City & County, Waste Water, Senior
Ser A, RB, FGIC Insured
780 5.000%, 07/01/35 796
----------
TOTAL MUNICIPAL BONDS (Cost $1,341) 1,326
----------
CASH EQUIVALENTS (E) -- 0.6%
387,220 Dreyfus Cash Management Fund, Institutional
Shares, 5.010% 387
387,220 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 5.060% 387
----------
TOTAL CASH EQUIVALENTS (Cost $774) 774
----------
REPURCHASE AGREEMENT (B) -- 9.8%
Lehman Brothers 5.363%, dated 06/30/06, to be
repurchased on 07/03/06, repurchase price $13,142,840
(collateralized by various collateralized mortgage
obligations, ranging in par value
$167,290,000-$407,245,722, 0.000%-0.642%, 11/25/33-
13,137 10/15/41; with total market value $13,399,708) 13,137
----------
TOTAL REPURCHASE AGREEMENT (Cost $13,137) 13,137
----------
TOTAL INVESTMENTS (COST $165,398) -- 120.2% 161,812
----------
Bishop Street Funds 24
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
----------
OTHER ASSETS AND LIABILITIES -- (20.2)%
Payable Upon Return of Securities Loaned $ (28,979)
Payable for Investment Securities Purchased (248)
Income Distribution Payable (197)
Investment Adviser Fees Payable (45)
Administration Fees Payable (13)
Shareholder Servicing Fees Payable (11)
Payable for Capital Shares Redeemed (6)
Trustees' Fees Payable (2)
Other Assets and Liabilities, Net 2,347
----------
TOTAL OTHER ASSETS AND LIABILITIES (27,154)
----------
NET ASSETS -- 100.0% $ 134,658
==========
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $ 138,555
Accumulated net realized loss on investments (311)
Net unrealized depreciation on investments (3,586)
----------
NET ASSETS $ 134,658
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($134,658,308 / 13,854,760 SHARES) $ 9.72
==========
(A) THE SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2006
(SEE NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF
SECURITIES ON LOAN AT JUNE 30, 2006 WAS $28,417,944.
(B) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2006
WAS $28,979,068.
(C) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON JUNE 30, 2006. 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, 2006.
(E) RATES SHOWN ARE THE 7-DAY EFFECTIVE YIELDS AS OF JUNE 30, 2006.
CL -- CLASS
FGIC -- FINANCIAL GUARANTEE INSURANCE CORPORATION
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
LP -- LIMITED PARTNERSHIP
MTN -- MEDIUM TERM NOTE
NA -- NATIONAL ASSOCIATION
RB -- REVENUE BOND
SER -- SERIES
COST FIGURES SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 25 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS+
- ---------------------------------------------------------------------------------------------------
Percentage
Coupon Maturity of
Rate Date Investments
-----------------------------------------------------------------------------------------------
1. Kauai County GO 6.250% 08/01/10 3.3%
-----------------------------------------------------------------------------------------------
2. Honolulu City & County Waste Water RB 5.000% 07/01/35 2.5%
-----------------------------------------------------------------------------------------------
3. Hawaii State Department of Budget & Finance RB 5.650% 10/01/27 2.1%
-----------------------------------------------------------------------------------------------
4. Puerto Rico Public Buildings Authority RB 5.250% 07/01/25 2.0%
-----------------------------------------------------------------------------------------------
5. University of California RB 5.000% 05/15/24 1.9%
-----------------------------------------------------------------------------------------------
6. Honolulu City & County GO 5.000% 07/01/19 1.6%
-----------------------------------------------------------------------------------------------
7. Edinburg Consolidated Independent School
District GO 5.000% 02/15/21 1.6%
-----------------------------------------------------------------------------------------------
8. Hawaii State GO 5.000% 07/01/25 1.5%
-----------------------------------------------------------------------------------------------
9. Puerto Rico Housing Financing Authority RB 5.000% 12/01/16 1.5%
-----------------------------------------------------------------------------------------------
10. Hawaii State GO 6.500% 12/01/13 1.4%
- ---------------------------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
General Obligation 41.9%
Transportation 10.5%
Facilities 8.0%
Higher Education 7.3%
Utilities 6.0%
Water 5.3%
Power 5.2%
General Revenue 3.9%
Airport 3.6%
Single-Family Housing 3.1%
School District 1.9%
Medical 1.1%
Development 1.0%
Education 0.9%
Short-Term Investments 0.2%
Multi-Family Housing 0.1%
- --------------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Face Market
Amount Value
(000) (000)
--------- ----------
MUNICIPAL BONDS -- 98.6%
CALIFORNIA -- 4.4%
California State, GO
$2,000 5.000%, 03/01/24 $ 2,045
Coast, Unified School District, School Facilities
District 1-B, GO,
FSA Insured (C)
1,610 5.050%, 08/01/40 308
Bishop Street Funds 26
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
CALIFORNIA -- (CONTINUED)
Highland, Redevelopment Agency, Project Area
No. 1 Tax Allocation, RB, AMBAC Insured
$1,440 5.650%, 12/01/24 $ 1,625
La Mesa-Spring Valley, School District, Electric of
2002 Project, Ser B, GO, FGIC Insured (C)
630 5.250%, 08/01/27 221
University of California, Ser B, RB, FSA Insured
3,000 5.000%, 05/15/24 3,083
----------
7,282
----------
HAWAII -- 80.3%
Hawaii County, Refunding & Improvement Project,
Ser A, GO, FGIC Insured
450 5.600%, 05/01/12 486
430 5.600%, 05/01/13 468
400 5.550%, 05/01/09 418
Hawaii County, Ser A, GO, FGIC Insured
630 5.500%, 07/15/12 674
Hawaii County, Ser A, GO, FSA Insured
500 5.400%, 05/15/15 523
1,000 5.000%, 07/15/23 1,027
Hawaii County, Ser A, GO, MBIA Insured
1,055 5.250%, 07/15/18 1,122
1,205 5.000%, 07/15/15 1,268
1,470 5.000%, 07/15/24 1,512
Hawaii State, Airport System, RB, AMT, FGIC Insured
280 5.250%, 07/01/21 287
Hawaii State, Airport System, Second Ser, RB, AMT, ETM
60 6.900%, 07/01/12 66
Hawaii State, Airport System, Second Ser, RB, AMT, ETM,
MBIA Insured
1,505 6.900%, 07/01/12 1,650
Hawaii State, Airport System, Ser B, RB, AMT,
FGIC Insured
1,500 6.625%, 07/01/18 1,639
1,500 6.500%, 07/01/14 1,639
500 6.000%, 07/01/19 534
Hawaii State, Department of Budget & Finance,
Chaminade University, RB, Radian Insured
1,000 5.000%, 01/01/26 1,018
1,000 4.750%, 01/01/36 968
1,000 4.700%, 01/01/31 969
June 30, 2006 27 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
HAWAII -- (CONTINUED)
Hawaii State, Department of Budget & Finance,
Electric Company & Subsidiary Project, RB,
MBIA Insured
$ 170 5.450%, 11/01/23 $ 170
Hawaii State, Department of Budget & Finance,
Electric Company & Subsidiary Project, Ser A, RB,
AMT, FGIC Insured
1,500 4.800%, 01/01/25 1,468
Hawaii State, Department of Budget & Finance,
Electric Company & Subsidiary Project, Ser B, RB,
AMT, XLCA Insured
1,025 5.000%, 12/01/22 1,038
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser A, RB, AMT, AMBAC Insured
460 5.100%, 09/01/32 464
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser A, RB, AMT, MBIA Insured
805 6.200%, 05/01/26 815
3,250 5.650%, 10/01/27 3,445
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser C, RB, AMT, AMBAC Insured
1,000 6.200%, 11/01/29 1,073
Hawaii State, Department of Budget & Finance,
Kapiolani Health Care System Project, RB,
Pre-Refunded @ 102 (A)
100 6.250%, 07/01/06 102
Hawaii State, Department of Budget & Finance,
Mid Pacific Institute, RB, Radian Insured
1,000 5.000%, 01/01/26 1,024
1,000 4.625%, 01/01/31 958
Hawaii State, Department of Budget & Finance, Queens
Health Systems, Ser B, RB, MBIA Insured,
Pre-Refunded @ 101 (A)
750 5.250%, 07/01/08 778
Hawaii State, Harbor Capital Improvement, RB, AMT,
MBIA Insured
2,000 5.500%, 07/01/27 2,027
545 5.400%, 07/01/09 561
Hawaii State, Harbor System, Ser A, RB, AMT,
FSA Insured
2,025 5.750%, 07/01/17 2,144
670 5.750%, 07/01/29 704
1,210 5.700%, 07/01/16 1,280
1,000 5.600%, 07/01/15 1,059
Hawaii State, Harbor System, Ser B, RB, AMT,
AMBAC Insured
200 5.500%, 07/01/19 210
Hawaii State, Harbor System, Ser B, RB, AMT,
FSA Insured
1,000 5.000%, 01/01/13 1,039
Hawaii State, Harbor System, Ser B, RB, FSA Insured
870 5.000%, 01/01/07 874
Bishop Street Funds 28
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
HAWAII -- (CONTINUED)
Hawaii State, Highway, RB
$1,000 6.000%, 07/01/08 $ 1,040
2,000 6.000%, 07/01/09 2,117
Hawaii State, Highway, Ser A, RB, FSA Insured
725 5.000%, 07/01/21 751
Hawaii State, Highway, Ser A, RB, FSA Insured
1,805 5.000%, 07/01/23 1,864
Hawaii State, Housing, Finance & Development,
Single-Family Housing,
Ser A, RB, AMT, FNMA Collateral
450 5.750%, 07/01/30 452
690 5.400%, 07/01/30 705
150 5.250%, 07/01/13 153
Hawaii State, Housing, Finance & Development,
Single-Family Housing,
Ser B, RB, FNMA Collateral
1,000 5.450%, 07/01/17 1,019
Hawaii State, Housing, Finance & Development,
University of Hawaii
Faculty Housing Project, RB, AMBAC Insured
700 5.650%, 10/01/16 707
415 5.000%, 10/01/06 416
Hawaii State, Kapolei Office Building, Ser A,
COP, AMBAC Insured
1,475 5.250%, 05/01/13 1,531
1,000 5.000%, 05/01/08 1,019
1,000 5.000%, 05/01/14 1,032
1,100 5.000%, 05/01/15 1,135
1,500 5.000%, 05/01/16 1,548
1,000 5.000%, 05/01/17 1,031
500 5.000%, 05/01/18 515
Hawaii State, No. 1 Capitol District State Office,
COP, MBIA Insured
1,000 5.200%, 05/01/14 1,035
175 5.000%, 05/01/11 181
Hawaii State, Pacific Health Special Purpose,
Ser A, RB
615 5.600%, 07/01/33 631
Hawaii State, Ser CL, GO
1,000 6.000%, 03/01/09 1,051
Hawaii State, Ser CM, GO, FGIC Insured
2,000 6.500%, 12/01/13 2,298
500 6.000%, 12/01/09 533
1,500 6.000%, 12/01/11 1,643
Hawaii State, Ser CP, GO, FGIC Insured
90 5.000%, 10/01/16 92
Hawaii State, Ser CU, GO, MBIA Insured (A)
25 5.750%, 10/01/10 27
550 5.750%, 10/01/12 586
June 30, 2006 29 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
HAWAII -- (CONTINUED)
Hawaii State, Ser CV, GO, FGIC Insured
$1,000 5.250%, 08/01/21 $ 1,046
Hawaii State, Ser CX, GO, FSA Insured
1,000 5.500%, 02/01/21 1,063
Hawaii State, Ser CZ, GO, FSA Insured
2,000 5.250%, 07/01/16 2,110
Hawaii State, Ser DF, GO, AMBAC Insured
1,250 5.000%, 07/01/14 1,320
2,000 5.000%, 07/01/21 2,072
2,400 5.000%, 07/01/25 2,469
Hawaii State, Ser DI, GO, FSA Insured
1,000 5.000%, 03/01/14 1,054
Hawaii State, University of Hawaii,
Ser A, RB, FGIC Insured
1,805 5.500%, 07/15/14 1,943
500 5.500%, 07/15/21 534
500 5.125%, 07/15/32 514
Hawaii State, University of Hawaii, Ser B, RB, FSA Insured
320 5.250%, 10/01/16 335
775 5.250%, 10/01/17 813
Honolulu City & County, Board of Water Supply, Ser A, RB,
FGIC Insured
2,000 5.000%, 07/01/33 2,045
Honolulu City & County, GO
1,320 5.400%, 09/27/07 1,344
Honolulu City & County, GO, ETM
230 6.000%, 12/01/09 245
Honolulu City & County, Ser A, GO
55 6.000%, 01/01/10 59
Honolulu City & County, Ser A, GO, ETM
500 6.000%, 01/01/09 525
95 6.000%, 01/01/10 101
Honolulu City & County, Ser A, GO, MBIA Insured
1,000 5.250%, 03/01/27 1,042
500 5.250%, 03/01/28 521
1,000 5.000%, 07/01/14 1,056
Honolulu City & County, Ser B, GO, ETM, FGIC Insured
635 5.500%, 10/01/11 681
Honolulu City & County, Ser B, GO, MBIA Insured
825 5.000%, 07/01/13 869
Honolulu City & County, Ser B, RB, AMT, MBIA Insured
1,000 5.250%, 07/01/21 1,044
Honolulu City & County, Ser C, GO, FGIC Insured
125 5.500%, 11/01/07 128
1,200 5.125%, 07/01/11 1,251
1,100 5.125%, 07/01/15 1,144
2,500 5.000%, 07/01/19 2,583
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, Ser C, GO, MBIA Insured
$2,000 5.000%, 07/01/16 $ 2,105
Honolulu City & County, Ser D, GO, AMT, FGIC Insured
245 4.850%, 02/01/10 250
Honolulu City & County, Ser D, GO, MBIA Insured
885 5.000%, 07/01/19 923
2,000 5.000%, 07/01/23 2,065
Honolulu City & County, Ser E, GO, FGIC Insured
1,500 5.250%, 07/01/20 1,590
Honolulu City & County, Waipahu Towers Project,
Ser A, RB, AMT, GNMA Collateral
200 6.900%, 06/20/35 202
Honolulu City & County, Waste Water, 2nd Board
Resolution, Junior Ser, RB, FGIC Insured
900 5.250%, 07/01/13 939
1,000 5.250%, 07/01/17 1,043
1,500 5.250%, 07/01/18 1,563
1,000 5.000%, 07/01/23 1,029
Honolulu City & County, Waste Water, Senior Ser A,
RB, FGIC Insured
4,050 5.000%, 07/01/35 4,131
Honolulu City & County, Water Board, Ser A,
RB, FGIC Insured
1,700 4.750%, 07/01/16 1,772
Honolulu City & County, Water Board, Ser A,
RB, FGIC Insured
2,000 4.750%, 07/01/17 2,085
Honolulu City & County, Water Board, Ser B,
RB, AMT MBIA Insured
1,000 5.250%, 07/01/20 1,046
Kauai County, Public Improvement, Ser B, GO,
MBIA Insured, Pre-Refunded @ 101 (A)
175 5.200%, 08/01/07 179
165 5.150%, 08/01/07 169
155 5.100%, 08/01/07 159
120 5.050%, 08/01/07 123
Kauai County, Ser A, GO, FGIC Insured
1,610 5.000%, 08/01/21 1,668
1,000 5.000%, 08/01/22 1,035
1,440 5.000%, 08/01/23 1,487
1,555 5.000%, 08/01/24 1,604
1,700 5.000%, 08/01/26 1,747
Kauai County, Ser A, GO, FGIC Insured,
Pre-Refunded @ 100 (A)
5,000 6.250%, 08/01/10 5,436
June 30, 2006 31 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
HAWAII -- (CONTINUED)
Kauai County, Ser A, GO, MBIA Insured
$ 490 5.625%, 08/01/18 $ 521
1,500 5.000%, 08/01/25 1,526
Kauai County, Ser A, GO, MBIA Insured,
Pre-Refunded @ 100 (A)
260 5.625%, 08/01/11 280
Maui County, GO, MBIA Insured
1,100 5.000%, 03/01/24 1,133
Maui County, Ser A, GO
485 5.375%, 03/01/12 513
Maui County, Ser A, GO, FGIC Insured
150 5.000%, 03/01/13 154
Maui County, Ser A, GO, FGIC Insured,
Pre-Refunded @ 101 (A)
100 5.125%, 03/01/08 103
50 5.000%, 03/01/08 51
Maui County, Ser A, GO, MBIA Insured
840 5.000%, 03/01/20 862
Maui County, Ser B, GO, MBIA Insured
500 5.000%, 09/01/17 523
----------
132,540
----------
ILLINOIS -- 0.4%
Illinois State, Educational Facilities Authority,
Northwestern University, RB
670 5.000%, 12/01/38 678
----------
INDIANA -- 0.9%
Elkhart, Community School Building Company,
First Meeting, RB, XLCA Insured
1,500 4.500%, 07/15/24 1,464
----------
MASSACHUSETTS -- 0.4%
Massachusetts State, Water Resources Authority,
Ser J, RB
565 5.000%, 08/01/42 573
----------
PUERTO RICO -- 7.9%
Commonwealth of Puerto Rico, GO, MBIA Insured
500 6.500%, 07/01/14 577
1,500 6.000%, 07/01/15 1,689
Commonwealth of Puerto Rico, Public Improvement,
GO, FSA Insured
435 5.000%, 07/01/21 451
Commonwealth of Puerto Rico, Public Improvement,
Ser A, GO
1,000 5.000%, 07/01/27 1,004
Puerto Rico, Electric Power Authority, Ser DD, RB,
FSA Insured
1,000 5.000%, 07/01/28 1,015
Bishop Street Funds 32
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face Market
Amount Value
(000) (000)
--------- ----------
PUERTO RICO -- (CONTINUED)
Puerto Rico, Electric Power Authority, Ser HH, RB,
FSA Insured
$ 500 5.250%, 07/01/29 $ 526
Puerto Rico, Housing Financing Authority,
Capital Funding Program, RB
2,360 5.000%, 12/01/16 2,445
Puerto Rico, Housing, Banking & Financing Agency,
Single-Family
Mortgage, Affordable Housing Mortgage, Portfolio I,
RB, AMT, GNMA/FNMA/FHLMC Collateral
180 6.100%, 10/01/15 181
Puerto Rico, Industrial Tourist Educational Medical
Environmental Control Facilities, Hospital Auxilio
Mutuo Obligation Group, Ser A, RB, MBIA Insured
300 6.250%, 07/01/24 303
Puerto Rico, Public Buildings Authority, Ser F, RB
3,000 5.250%, 07/01/25 3,232
Puerto Rico, University of Puerto Rico, Ser O, RB,
MBIA Insured
1,500 5.750%, 06/01/19 1,592
----------
13,015
----------
TEXAS -- 3.5%
Dallas, Rapid Transportation, Sr Lien, RB, AMBAC
Insured
1,400 5.000%, 12/01/19 1,442
Edinburg, Consolidated Independent School District, GO
2,470 5.000%, 02/15/21 2,544
Galveston, Waterworks & Sewer Systems, RB, FGIC
Insured
1,200 4.375%, 05/01/24 1,134
Harris County, Houston Texas Sports Authority, Ser A,
Special RB, MBIA Insured (C)
5,000 5.400%, 11/15/40 731
----------
5,851
----------
WASHINGTON -- 0.8%
Washington State, University of Washington, RB,
FSA Insured
1,315 5.000%, 06/01/23 1,348
----------
TOTAL MUNICIPAL BONDS (Cost $161,211) 162,751
----------
June 30, 2006 33 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Market
Value
Shares (000)
----------- ----------
CASH EQUIVALENTS (B) -- 0.2%
181,839 Dreyfus Tax-Exempt Cash Management Fund,
Institutional Shares, 3.670% $ 182
181,839 Fidelity Institutional Tax-Exempt Portfolio,
Institutional Shares, 3.720% 182
----------
TOTAL CASH EQUIVALENTS (Cost $364) 364
----------
TOTAL INVESTMENTS (COST $161,575) -- 98.8% 163,115
----------
OTHER ASSETS AND LIABILITIES -- 1.2%
Payable for Investment Securities Purchased (2,088)
Income Distribution Payable (451)
Payable for Capital Shares Redeemed (168)
Investment Adviser Fees Payable (30)
Shareholder Servicing Fees Payable (14)
Administration Fees Payable (9)
Distribution Fees Payable (7)
Trustees' Fees Payable (3)
Other Assets and Liabilities, Net 4,675
----------
TOTAL OTHER ASSETS AND LIABILITIES 1,905
----------
NET ASSETS -- 100.0% $ 165,020
==========
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $ 163,162
Undistributed net investment income 53
Accumulated net realized gain on investments 265
Net unrealized appreciation on investments 1,540
----------
NET ASSETS $ 165,020
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($134,288,444 / 12,741,905 SHARES) $ 10.54
==========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A
($30,731,404 / 2,915,499 SHARES) $ 10.54
==========
MAXIMUM OFFERING PRICE PER SHARE --
CLASS A ($10.54 / 97.00%) $ 10.87
==========
Bishop Street Funds 34
Hawaii Municipal Bond Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
(A) PREREFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE.
(B) RATES SHOWN ARE THE 7-DAY EFFECTIVE YIELDS AS OF JUNE 30, 2006.
(C) ZERO COUPON SECURITY -- THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS
THE EFFECTIVE YIELD AT TIME OF PURCHASE.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
AMT -- ALTERNATIVE MINIMUM TAX
COP -- CERTIFICATE OF PARTICIPATION
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTEE INSURANCE CORPORATION
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 SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 35 www.bishopstreetfunds.com
Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS +
Commercial Paper 67.0%
Certificates of Deposit/Bank Notes 13.2%
U.S. Government Agency Obligations 11.0%
Repurchase Agreement 3.8%
Asset Backed Securities 2.9%
Corporate Obligations 2.1%
- --------------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Face
Amount Value
(000) (000)
--------- ----------
COMMERCIAL PAPER (B) -- 67.2%
AUTO FINANCE -- 4.6%
BMW Vehicle Lease Trust
$ 9,500 5.262%, 07/03/06 $ 9,497
----------
BANKS -- 30.4%
Danske
2,000 5.258%, 07/10/06 1,997
8,000 5.274%, 07/28/06 7,969
Deutsche Ausgleichsbank
1,000 5.252%, 07/03/06 1,000
9,000 5.261%, 07/11/06 8,987
Lloyds TSB Bank
10,000 5.275%, 07/31/06 9,956
Societe Generale
9,500 5.282%, 07/03/06 9,497
Toronto Dominion
5,000 5.315%, 08/04/06 4,975
UBS
9,500 5.272%, 07/03/06 9,497
Westpac Capital
4,700 5.193%, 07/20/06 4,687
4,800 5.107%, 07/21/06 4,787
----------
63,352
----------
FINANCIALS -- 32.2%
Abbey National Treasury Services
10,000 5.253%, 07/26/06 9,964
ABN-Amro North America Finance
9,500 5.067%, 07/06/06 9,493
Atlantic Asset Securitization
9,500 5.282%, 07/21/06 9,472
CBA Finance
10,000 5.283%, 07/26/06 9,964
Bishop Street Funds 36
Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face
Amount Value
(000) (000)
--------- ----------
FINANCIALS -- (CONTINUED)
Chariot Funding
$ 2,000 5.218%, 07/10/06 $ 1,997
5,000 5.244%, 07/21/06 4,986
Dresdner U.S. Finance
1,300 5.257%, 07/25/06 1,295
HBOS Treasury Services
8,000 5.162%, 07/14/06 7,985
1,900 5.167%, 08/16/06 1,888
Svenska Handels New York
8,000 5.125%, 08/02/06 7,964
Svenska Handlesbank
2,000 5.306%, 07/31/06 1,991
----------
66,999
----------
TOTAL COMMERCIAL PAPER (Cost $139,848) 139,848
----------
CERTIFICATES OF DEPOSIT/BANK NOTES -- 13.2%
Citi
8,000 5.030%, 07/24/06 8,000
2,000 5.400%, 09/20/06 2,000
Dresdner Funding
8,500 5.290%, 07/31/06 8,500
Wells Fargo Bank
9,000 5.240%, 07/17/06 9,000
----------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $27,500) 27,500
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (B) -- 11.1%
FHLB
10,000 5.163%, 07/14/06 9,981
FHLMC
6,105 5.207%, 07/25/06 6,084
FNMA
7,000 5.192%, 07/26/06 6,975
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $23,040) 23,040
----------
June 30, 2006 37 www.bishopstreetfunds.com
Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Face
Amount Value
(000) (000)
--------- ----------
ASSET BACKED SECURITIES -- 3.0%
AUTO FINANCE -- 3.0%
Honda Auto Receivables Owner Trust, Ser 2005-6, Cl A1
$ 1,001 4.512%, 12/18/06 $ 1,001
Nissan Auto Lease Trust, Ser 2006-A, Cl A1
3,023 5.081%, 05/15/07 3,023
Nissan Auto Receivables Owner Trust, Ser 2006-A, Cl A1
1,890 4.663%, 02/15/07 1,890
Volkswagen Auto Loan Enhanced Trust, Ser 2005-1, Cl A1
191 4.366%, 11/20/06 191
----------
TOTAL ASSET BACKED SECURITIES (Cost $6,105) 6,105
----------
CORPORATE OBLIGATIONS (A) -- 2.1%
FINANCIALS -- 2.1%
General Electric Capital
2,300 5.250%, 07/10/06 2,300
General Electric Capital MTN
2,000 5.352%, 07/17/06 2,000
----------
TOTAL CORPORATE OBLIGATIONS (Cost $4,300) 4,300
----------
REPURCHASE AGREEMENT -- 3.7%
Barclays Bank 5.500%, dated 06/30/06, to be
repurchased on 07/03/06, repurchase price $7,803,315
(collateralized by a FNMA obligation, par
value $8,469,402, 5.500%, 01/01/36; with
7,800 total market value $7,956,000) 7,800
----------
TOTAL REPURCHASE AGREEMENT (Cost $7,800) 7,800
----------
TOTAL INVESTMENTS (COST $208,593) -- 100.3% 208,593
----------
OTHER ASSETS AND LIABILITIES -- (0.3)%
Income Distribution Payable (608)
Investment Adviser Fees Payable (26)
Administration Fees Payable (20)
Shareholder Servicing Fees Payable (17)
Distribution Fee Payable (7)
Trustees' Fees Payable (3)
Other Assets and Liabilities, Net 159
----------
TOTAL OTHER ASSETS AND LIABILITIES (522)
----------
NET ASSETS -- 100.0% $ 208,071
==========
Bishop Street Funds 38
Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
----------
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $ 208,094
Distributions in excess of net investment income (1)
Accumulated net realized loss on investments (22)
----------
NET ASSETS $ 208,071
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($167,057,646 / 167,082,358 SHARES) $ 1.00
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS A
($41,012,999 / 41,013,368 SHARES) $ 1.00
==========
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 2006. THE MATURITY DATE SHOWN IS THE NEXT
SCHEDULED RESET DATE.
(B) THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE EFFECTIVE YIELD AT
THE TIME OF PURCHASE.
CL -- CLASS
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
SER -- SERIES
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 39 www.bishopstreetfunds.com
Treasury Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
Repurchase Agreements 86.0%
U.S. Treasury Obligations 14.0%
- --------------------------------------------------------------------------------
+ PERCENTAGES BASED ON TOTAL INVESTMENTS.
STATEMENT OF NET ASSETS
Face
Amount Value
(000) (000)
--------- ----------
U.S. TREASURY OBLIGATIONS (A) -- 14.0%
U.S. Treasury Bills
$10,000 4.579%, 07/06/06 $ 9,994
10,000 4.631%, 08/03/06 9,958
10,000 4.837%, 08/24/06 9,929
----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $29,881) 29,881
----------
REPURCHASE AGREEMENTS -- 86.4%
Barclays Bank 4.400%, dated 06/30/06, to be
repurchased on 07/03/06, repurchase price
$89,232,707 (collateralized by various U.S.
Treasury obligations, ranging in par value
$28,266,000-$44,388,000, 3.500%-3.375%,
01/15/07-01/15/11; with total market value
89,200 $90,985,029) 89,200
UBS 4.500%, dated 06/30/06, to be repurchased on
07/03/06, repurchase price $95,035,625
(collateralized by various U.S. Treasury
obligations, ranging in par value
$6,190,000-$40,420,000, 0.000%-3.875%, 04/15/10-
95,000 04/15/32; with total market value $96,905,181) 95,000
----------
TOTAL REPURCHASE AGREEMENTS (Cost $184,200) 184,200
----------
TOTAL INVESTMENTS (COST $214,081) -- 100.4% 214,081
----------
Bishop Street Funds 40
Treasury Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
(CONTINUED)
Value
(000)
----------
OTHER ASSETS AND LIABILITIES -- (0.4)%
Income Distribution Payable $ (795)
Administration Fees Payable (20)
Shareholder Servicing Fees Payable (18)
Investment Adviser Fee Payable (17)
Trustees' Fees Payable (2)
Other Assets and Liabilities, Net 62
----------
TOTAL OTHER ASSETS AND LIABILITIES (790)
----------
NET ASSETS -- 100.0% $ 213,291
==========
NET ASSETS:
Fund Shares (unlimited authorization -- no par value) $ 213,344
Undistributed net investment income 4
Accumulated net realized loss on investments (57)
----------
NET ASSETS $ 213,291
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS I
($213,291,095 / 213,346,073 SHARES) $ 1.00
==========
(A) THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE EFFECTIVE YIELD AT
THE TIME OF PURCHASE.
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 41 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2006
(IN THOUSANDS)
Large High
Large Cap Strategic Cap Core Grade
Growth Growth Equity Income
Fund Fund Fund* Fund
- ---------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend Income $ 532 $ 637 $ 187 $ 38
Interest Income -- -- -- 3,214
Securities Lending, Net 6 -- -- 22
- ---------------------------------------------------------------------------------------------------
Total Investment Income 538 637 187 3,274
- ---------------------------------------------------------------------------------------------------
EXPENSES:
Investment Adviser Fees 249 503 61 374
Shareholder Servicing Fees 84 170 20 170
Administration Fees 67 136 16 136
Transfer Agent Fees 19 19 6 21
Professional Fees 12 26 5 26
Trustees' Fees 5 10 1 10
Printing Fees 5 10 2 10
Custody Fees 4 6 1 7
Registration Fees 2 1 -- 2
Miscellaneous Expenses 6 4 -- 15
- ---------------------------------------------------------------------------------------------------
Total Expenses 453 885 112 771
- ---------------------------------------------------------------------------------------------------
Less Waivers:
Investment Adviser Fees (38) -- (6) (95)
Shareholder Servicing Fees (50) (102) (12) (102)
Administration Fees (29) (58) (7) (58)
- ---------------------------------------------------------------------------------------------------
Total Waivers (117) (160) (25) (255)
- ---------------------------------------------------------------------------------------------------
Net Expenses 336 725 87 516
- ---------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 202 (88) 100 2,758
- ---------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments 7,825 2,860 (193) (211)
Change in Unrealized Depreciation
on Investments (5,268) (5,729) (1,612) (4,451)
- ---------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments 2,557 (2,869) (1,805) (4,662)
- ---------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
Resulting from Operations $ 2,759 $ (2,957) $ (1,705) $ (1,904)
===================================================================================================
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* COMMENCED OPERATIONS ON MAY 3, 2006.
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, 2006
(IN THOUSANDS)
Hawaii Treasury
Municipal Money Money
Bond Market Market
Fund Fund Fund
- ------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend Income $ 27 $ -- $ --
Interest Income 3,883 4,851 4,739
- ------------------------------------------------------------------------------------
Total Investment Income 3,910 4,851 4,739
- ------------------------------------------------------------------------------------
EXPENSES:
Investment Adviser Fees 299 308 318
Shareholder Servicing Fees 213 257 265
Administration Fees 171 206 212
Distribution Fees, Class A 39 47 --
Transfer Agent Fees 34 36 25
Professional Fees 32 38 38
Trustees' Fees 13 15 15
Printing Fees 12 14 15
Custody Fees 9 12 11
Registration Fees 3 4 4
Miscellaneous Expenses 23 13 30
- ------------------------------------------------------------------------------------
Total Expenses 848 950 933
- ------------------------------------------------------------------------------------
Less Waivers:
Investment Adviser Fees (101) (146) (217)
Shareholder Servicing Fees (128) (154) (159)
Administration Fees (111) (88) (91)
- ------------------------------------------------------------------------------------
Total Waivers (340) (388) (467)
- ------------------------------------------------------------------------------------
Net Expenses 508 562 466
- ------------------------------------------------------------------------------------
Net Investment Income 3,402 4,289 4,273
- ------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments 258 1 (3)
Change in Unrealized Depreciation
on Investments (3,937) -- --
- ------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments (3,679) 1 (3)
- ------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
Resulting from Operations $ (277) $ 4,290 $ 4,270
====================================================================================
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, 2006 43 www.bishopstreetfunds.com
Bishop Street Funds
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2006 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 2005
(IN THOUSANDS)
Large Cap
Growth Fund
- ---------------------------------------------------------------------------------------------------------
2006 2005
- ---------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 202 $ 516
Net Realized Gain on Investments 7,825 11,372
Change in Unrealized Depreciation on Investments (5,268) (12,061)
- ---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting from Operations 2,759 (173)
- ---------------------------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (199) (523)
Class A Shares -- (1)
- ---------------------------------------------------------------------------------------------------------
Total Dividends (199) (524)
- ---------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 1,753 8,226
Reinvestments of Cash Distributions 171 403
Proceeds from Shares Issued in Connection with Conversion
from Class A Shares(1) -- 1,428
Cost of Shares Redeemed (62,233) (91,416)
- ---------------------------------------------------------------------------------------------------------
Total Class I Capital Share Transactions (60,309) (81,359)
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Proceeds from Shares Issued -- 2
Reinvestments of Cash Distributions -- --
Value of Shares Liquidated in Connection with Conversion
to Class I Shares(1) -- (1,428)
Cost of Shares Redeemed -- (99)
- ---------------------------------------------------------------------------------------------------------
Total Class A Capital Share Transactions -- (1,525)
- ---------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets
From Capital Share Transactions (60,309) (82,884)
- ---------------------------------------------------------------------------------------------------------
Total Decrease in Net Assets (57,749) (83,581)
- ---------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 87,715 171,296
- ---------------------------------------------------------------------------------------------------------
End of Period $ 29,966 $ 87,715
=========================================================================================================
Undistributed Net Investment Income $ 3 $ --
=========================================================================================================
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 174 858
Shares Issued in Lieu of Cash Distributions 17 42
Shares Issued in Connection with Conversion from Class A Shares(1) -- 155
Shares Redeemed (6,032) (9,545)
- ---------------------------------------------------------------------------------------------------------
Total Class I Share Transactions (5,841) (8,490)
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Shares Issued -- --
Shares Issued in Lieu of Cash Distributions -- --
Value of Shares Liquidated in Connection with Conversion
to Class I Shares(1) -- (156)
Shares Redeemed -- (10)
- ---------------------------------------------------------------------------------------------------------
Total Class A Share Transactions -- (166)
- ---------------------------------------------------------------------------------------------------------
Net Decrease in Shares Outstanding from Share Transactions (5,841) (8,656)
=========================================================================================================
(1) ON APRIL 29, 2005, CLASS A SHARES OF THE BISHOP STREET LARGE CAP GROWTH
FUND WERE CONVERTED TO 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, 2006 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 2005
(IN THOUSANDS)
Strategic Large Cap Core
Growth Fund Equity Fund
- -------------------------------------------------------------------------------------------------------------------------
2006 2005 2006*
- -------------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income (Loss) $ (88) $ (356) $ 100
Net Realized Gain (Loss) on Investments 2,860 3,839 (193)
Change in Unrealized Appreciation (Depreciation)
on Investments (5,729) 9,564 (1,612)
- -------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting from Operations (2,957) 13,047 (1,705)
- -------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares -- -- (102)
Capital Gains:
Class I Shares -- (2,019) --
- -------------------------------------------------------------------------------------------------------------------------
Total Dividends and Distributions -- (2,019) (102)
- -------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 24,216 46,780 60,808
Reinvestments of Cash Distributions -- 1,500 93
Cost of Shares Redeemed (6,128) (15,135) (54)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
From Capital Share Transactions 18,088 33,145 60,847
- -------------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 15,131 44,173 59,040
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 123,341 79,168 --
- -------------------------------------------------------------------------------------------------------------------------
End of Period $ 138,472 $ 123,341 $ 59,040
=========================================================================================================================
Accumulated Net Investment Loss/Distributions
in excess of net investment income $ (96) $ (8) $ (2)
=========================================================================================================================
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 1,641 3,544 6,129
Shares Issued in Lieu of Cash Distributions -- 105 10
Shares Redeemed (419) (1,105) (6)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase in Shares Outstanding from
Share Transactions 1,222 2,544 6,133
=========================================================================================================================
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* COMMENCED OPERATIONS ON MAY 3, 2006.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 45 www.bishopstreetfunds.com
Bishop Street Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2006 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 2005
(IN THOUSANDS)
High Grade Hawaii Municipal
Income Fund Bond Fund
- ---------------------------------------------------------------------------------------------------------------------------------
2006 2005 2006 2005
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 2,758 $ 5,507 $ 3,402 $ 7,003
Net Realized Gain (Loss) on Investments (211) 880 258 1,417
Change in Unrealized Depreciation on Investments (4,451) (3,598) (3,937) (4,087)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting from Operations (1,904) 2,789 (277) 4,333
- ---------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (2,766) (5,502) (2,812) (5,833)
Class A Shares -- (3) (585) (1,167)
Capital Gains:
Class I Shares -- (1,158) -- (1,183)
Class A Shares -- -- -- (252)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Dividends and Distributions (2,766) (6,663) (3,397) (8,435)
- ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 6,853 18,810 6,278 18,692
Reinvestments of Cash Distributions 1,602 3,659 439 1,160
Proceeds from Shares Issued in Connection with Conversion
from Class A Shares(1) -- 310 -- --
Cost of Shares Redeemed (10,566) (34,634) (14,634) (19,845)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Class I Capital Share Transactions (2,111) (11,855) (7,917) 7
- ---------------------------------------------------------------------------------------------------------------------------------
Class A Shares:
Proceeds from Shares Issued -- 96 1,006 2,724
Reinvestments of Cash Distributions -- 1 237 652
Value of Shares Liquidated in Connection with Conversion
to Class I Shares(1) -- (310) -- --
Cost of Shares Redeemed -- (14) (1,360) (1,612)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Class A Capital Share Transactions -- (227) (117) 1,764
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (2,111) (12,082) (8,034) 1,771
- ---------------------------------------------------------------------------------------------------------------------------------
Total Decrease in Net Assets (6,781) (15,956) (11,708) (2,331)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 141,439 157,395 176,728 179,059
- ---------------------------------------------------------------------------------------------------------------------------------
End of Period $ 134,658 $ 141,439 $ 165,020 $ 176,728
=================================================================================================================================
Undistributed Net Investment Income $ -- $ 9 $ 53 $ 48
=================================================================================================================================
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 698 1,834 590 1,710
Shares Issued in Lieu of Cash Distributions 163 358 41 107
Shares Issued in Connection with Conversion
from Class A Shares(1) -- 30 -- --
Shares Redeemed (1,072) (3,370) (1,375) (1,813)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Class I Share Transactions (211) (1,148) (744) 4
- ---------------------------------------------------------------------------------------------------------------------------------
Class A Shares:
Shares Issued -- 10 95 249
Shares Issued in Lieu of Cash Distributions -- -- 22 60
Value of Shares Liquidated in Connection with
Conversion to Class I Shares(1) -- (30) -- --
Shares Redeemed -- (2) (128) (149)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Class A Share Transactions -- (22) (11) 160
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares Outstanding
from Share Transactions (211) (1,170) (755) 164
=================================================================================================================================
(1) ON APRIL 29, 2005, CLASS A SHARES OF THE BISHOP STREET HIGH GRADE INCOME
FUND WERE CONVERTED TO 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, 2006 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 2005
(IN THOUSANDS)
Money Market Treasury Money
Fund Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
2006 2005 2006 2005
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 4,289 $ 5,595 $ 4,273 $ 6,168
Net Realized Gain (Loss) on Investments 1 (1) (3) (7)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting from Operations 4,290 5,594 4,270 6,161
- ---------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (3,537) (4,936) (4,269) (6,178)
Class A Shares (749) (663) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Dividends (4,286) (5,599) (4,269) (6,178)
- ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (ALL AT $1.00 PER SHARE):
Class I Shares:
Proceeds from Shares Issued 226,959 456,536 238,949 554,900
Reinvestments of Cash Distributions 130 192 8 13
Cost of Shares Redeemed (230,489) (454,204) (249,281) (539,435)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Class I Capital Share Transactions (3,400) 2,524 (10,324) 15,478
- ---------------------------------------------------------------------------------------------------------------------------------
Class A Shares:
Proceeds from Shares Issued 70,680 157,534 -- --
Reinvestments of Cash Distributions 751 646 -- --
Cost of Shares Redeemed (65,949) (140,448) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Class A Capital Share Transactions 5,482 17,732 -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 2,082 20,256 (10,324) 15,478
- ---------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 2,086 20,251 (10,323) 15,461
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 205,985 185,734 223,614 208,153
- ---------------------------------------------------------------------------------------------------------------------------------
End of Period $ 208,071 $ 205,985 $ 213,291 $ 223,614
=================================================================================================================================
Undistributed Net Investment Income/Distributions
in excess of net investment income $ (1) $ (4) $ 4 $ --
=================================================================================================================================
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, 2006 47 www.bishopstreetfunds.com
Bishop Street Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2006
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS FROM
------------------------ ------------------------
NET
REALIZED
AND TOTAL
NET ASSET NET UNREALIZED INVESTMENT TOTAL
VALUE, INVESTMENT GAIN ACTIVITIES NET DIVIDENDS
BEGINNING INCOME (LOSS) ON FROM INVESTMENT CAPITAL AND
OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ---------- ----------- ---------- ---------- -------- -------------
- ---------------------
LARGE CAP GROWTH FUND
- ---------------------
CLASS I SHARES:
2006(1) $ 9.89 $ 0.03 $ 0.02 $ 0.05 $ (0.04) $ -- $ (0.04)
2005(1) 9.78 0.04 0.11 0.15 (0.04) -- (0.04)
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) -- -- --
- ---------------------
STRATEGIC GROWTH FUND
- ---------------------
CLASS I SHARES:
2006(1) $ 14.35 $ (0.01) $ (0.24) $ (0.25) $ -- $ -- $ --
2005(1) 13.08 (0.05) 1.56 1.51 -- (0.24) (0.24)
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) -- -- --
- --------------------------
LARGE CAP CORE EQUITY FUND
- --------------------------
CLASS I SHARES:
2006(1)(3) $ 10.00 $ 0.02 $ (0.37) $ (0.35) $ (0.02) $ -- $ (0.02)
- ----------------------
HIGH GRADE INCOME FUND
- ----------------------
CLASS I SHARES:
2006(1) $ 10.06 $ 0.20 $ (0.34) $ (0.14) $ (0.20) $ -- $ (0.20)
2005(1) 10.33 0.39 (0.19) 0.20 (0.39) (0.08) (0.47)
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)
+ TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED. RETURNS
SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. FEE WAIVERS ARE IN
EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER.
* ANNUALIZED
(1) PER SHARE NET INVESTMENT INCOME AMOUNT CALCULATED USING AVERAGE SHARES.
(2) COMMENCED OPERATIONS ON JULY 1, 2002.
(3) COMMENCED OPERATIONS ON MAY 3, 2006.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
Bishop Street Funds 48
- --------------------------------------------------------------------------------
RATIO OF RATIO OF
EXPENSES NET
NET RATIO OF TO AVERAGE INVESTMENT
NET ASSET ASSETS, EXPENSES NET ASSETS INCOME
VALUE, END OF TO AVERAGE EXCLUDING (LOSS) PORTFOLIO
END OF TOTAL PERIOD NET FEE TO AVERAGE TURNOVER
PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS RATE
--------- ------- --------- ---------- ---------- ---------- ---------
- ---------------------
LARGE CAP GROWTH FUND
- ---------------------
CLASS I SHARES:
2006(1) $ 9.90 0.47% $ 29,966 1.00%* 1.35%* 0.60%* 24%
2005(1) 9.89 1.59 87,715 1.00 1.31 0.43 40
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
- ---------------------
STRATEGIC GROWTH FUND
- ---------------------
CLASS I SHARES:
2006(1) $ 14.10 (1.74)% $ 138,472 1.07%* 1.30%* (0.13)%* 21%
2005(1) 14.35 11.52 123,341 1.07 1.31 (0.35) 55
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
- --------------------------
LARGE CAP CORE EQUITY FUND
- --------------------------
CLASS I SHARES:
2006(1)(3) $ 9.63 (3.53)% $ 59,040 1.05%* 1.36%* 1.22%* 15%
- ----------------------
HIGH GRADE INCOME FUND
- ----------------------
CLASS I SHARES:
2006(1) $ 9.72 (1.41)% $ 134,658 0.76%* 1.13%* 4.06%* 20%
2005(1) 10.06 2.00 141,439 0.76 1.13 3.82 45
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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 49 www.bishopstreetfunds.com
Bishop Street Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2006
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS FROM
------------------------- ------------------------
NET
REALIZED
AND TOTAL
NET ASSET UNREALIZED INVESTMENT TOTAL
VALUE, NET GAIN ACTIVITIES NET DIVIDENDS
BEGINNING INVESTMENT (LOSS) ON FROM INVESTMENT CAPITAL AND
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ---------- ----------- ---------- ---------- --------- -------------
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
CLASS I SHARES:
2006(2) $ 10.77 $ 0.21 $ (0.23) $ (0.02) $ (0.21) $ -- $ (0.21)
2005(2) 11.02 0.43 (0.16) 0.27 (0.43) (0.09) (0.52)
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)
CLASS A SHARES:
2006(2) $ 10.77 $ 0.20 $ (0.23) $ (0.03) $ (0.20) $ -- $ (0.20)
2005(2) 11.02 0.41 (0.16) 0.25 (0.41) (0.09) (0.50)
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)
- -----------------
MONEY MARKET FUND
- -----------------
CLASS I SHARES:
2006(2) $ 1.00 $ 0.02 $ -- $ 0.02 $ (0.02) $ -- $ (0.02)
2005(2) 1.00 0.03 -- 0.03 (0.03) -- (0.03)
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)
CLASS A SHARES:
2006(2) $ 1.00 $ 0.02 $ -- $ 0.02 $ (0.02) $ -- $ (0.02)
2005(2) 1.00 0.03 -- 0.03 (0.03) -- (0.03)
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:
2006(2) $ 1.00 $ 0.02 $ -- $ 0.02 $ (0.02) $ -- $ (0.02)
005(2) 1.00 0.03 -- 0.03 (0.03) -- (0.03)
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)
+ 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. FEE WAIVERS ARE IN EFFECT; IF
THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER.
* 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
EXPENSES RATIO OF
NET RATIO OF TO AVERAGE NET
NET ASSET ASSETS, EXPENSES NET ASSETS INVESTMENT
VALUE, END OF TO AVERAGE EXCLUDING INCOME PORTFOLIO
END OF TOTAL PERIOD NET FEE TO AVERAGE TURNOVER
PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS RATE
--------- --------- --------- ---------- ---------- ---------- ---------
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
CLASS I SHARES:
2006(2) $ 10.54 (0.16)% $ 134,289 0.55%* 0.95%* 4.03%* 22%
2005(2) 10.77 2.51 145,213 0.55 0.93 3.97 41
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
CLASS A SHARES:
2006(2) $ 10.54 (0.28)% $ 30,731 0.80%* 1.20%* 3.78%* 22%
2005(2) 10.77 2.25 31,515 0.80 1.18 3.72 41
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
- -----------------
MONEY MARKET FUND
- -----------------
CLASS I SHARES:
2006(2) $ 1.00 2.11% $ 167,058 0.50%* 0.88%* 4.22%* n/a
2005(2) 1.00 2.78 170,455 0.50 0.87 2.73 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
CLASS A SHARES:
2006(2) $ 1.00 1.98% $ 41,013 0.75%* 1.12%* 3.98%* n/a
2005(2) 1.00 2.53 35,531 0.75 1.12 2.60 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:
2006(2) $ 1.00 2.01% $ 213,291 0.44%* 0.88%* 4.03%* n/a
005(2) 1.00 2.62 223,614 0.44 0.87 2.61 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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2006 51 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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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 Large Cap Growth Fund, Strategic
Growth Fund, Large Cap Core 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 Large Cap Growth 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 converted 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 increases and
decreases in net assets from operations 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. Debt securities are priced based upon valuations provided by
independent, third-party pricing agents, if available. Such values generally
reflect the last reported sales price 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
Bishop Street Funds 52
(UNAUDITED)
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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 specific identification. Interest income is recorded on the
accrual basis; dividend income is recorded on ex-dividend date.
Discounts and premiums are accreted or amortized over the life of each
security and are recorded as interest income. The Large Cap Growth, Strategic
Growth, Large Cap Core 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 (as defined in 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.
June 30, 2006 53 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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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 Large Cap Growth, Strategic Growth and Large
Cap Core Equity Funds declare and pay dividends from any net investment income,
if available, 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. At June 30, 2006, there were no illiquid securities held by the Funds.
CASH OVERDRAFT CHARGES
Per the terms of an informal agreement with Union Bank of California,
N.A., the custodian of the Funds, if a fund has a cash overdraft on a given day,
it will be assessed an overdraft charge of 110% of the current Fed Funds rate.
Cash overdraft charges are included in miscellaneous expenses on the Statement
of Operations.
3. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENT
Investment advisory services are provided to the Funds by Bishop Street
Capital Management (the "Adviser"), a registered adviser and wholly-owned
subsidiary of First Hawaiian Bank. First Hawaiian Bank is a subsidiary of Banc
West Corporation, itself a subsidiary of BNP Paribas. The Adviser is entitled to
receive an annual fee of 0.74% of the average daily net assets of the Large Cap
Growth, Strategic Growth and the Large Cap Core 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: Large Cap Growth Fund
(Class I) 1.00%, Strategic Growth Fund (Class I) 1.25%, Large Cap Core Equity
Fund (Class I) 1.05%, High Grade Income Fund (Class I) 0.76%, Hawaii Municipal
Bond Fund (Class I) 0.55%, Hawaii Municipal Bond Fund (Class A)
Bishop Street Funds 54
(UNAUDITED)
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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.
Fischer, 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 administrative fee to the extent necessary to keep operating
expenses at or below certain percentages of the respective average daily net
assets.
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.
June 30, 2006 55 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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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
shareholder servicing fee to the extent necessary to keep operating expenses at
or below certain percentages of the respective average daily net assets.
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 33 1/3% 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. Although
the risk of lending is mitigated by the collateral, a Fund could experience a
delay in recovering its securities and a possible loss of income or value if the
borrower fails to return them. Securities lending on the Statement of Operations
is net of commissions to the security lending agent.
6. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale and
maturities of securities, other than short-term investments for the six-month
period ended June 30, 2006 are presented below for the Funds.
Large Cap Strategic Large High Grade Hawaii
Growth Growth Cap Core Income Municipal
Fund Fund Equity Fund Fund Bond Fund
(000) (000) (000) (000) (000)
--------- --------- ----------- ---------- ---------
Purchases
U.S.
Government
Securities $ -- $ -- $ -- $ 15,630 $ --
Other 16,554 47,113 67,574 9,258 37,417
Sales and Maturities
U.S.
Government
Securities $ -- $ -- $ -- $ 15,478 $ --
Other 76,341 28,692 7,988 9,043 45,809
Bishop Street Funds 56
(UNAUDITED)
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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 substantially all of its
taxable income and net capital gains. Accordingly, no provision 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, 2005 and December 31, 2004 were as follows:
Ordinary Tax Exempt Long-Term
Income Income Capital Gain Total
(000) (000) (000) (000)
-------- ---------- ------------ ---------
Large Cap Growth
Fund
2005 $ 524 $ -- $ -- $ 524
2004 1,049 -- -- 1,049
Strategic Growth
Fund
2005 $ -- $ -- $ 2,019 $ 2,019
2004 -- -- -- --
High Grade
Income Fund
2005 $ 6,284 $ -- $ 379 $ 6,663
2004 5,298 -- 547 5,845
Hawaii Municipal
Bond Fund
2005 $ 24 $ 7,000 $ 1,411 $ 8,435
2004 71 7,003 1,786 8,860
June 30, 2006 57 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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Ordinary Tax Exempt Long-Term
Income Income Capital Gain Total
(000) (000) (000) (000)
-------- ---------- ------------ --------
Money Market Fund
2005 $ 5,599 $ -- $ -- $ 5,599
2004 2,030 -- -- 2,030
Treasury Money
Market Fund
2005 $ 6,178 $ -- $ -- $ 6,178
2004 2,173 -- -- 2,173
As of December 31, 2005, the components of Distributable Earnings
(Accumulated Losses) on a tax basis were as follows:
Treasury
Large Cap Strategic High Grade Hawaii Money Money
Growth Growth Income Municipal Market Market
Fund Fund Fund Bond Fund Fund Fund
(000) (000) (000) (000) (000) (000)
---------- ---------- ------------ ---------- ---------- ----------
Undistributed
(Distributions in
excess of) net
investment
income $ -- $ -- $ 9 $ -- $ (4) $ --
Undistributed
tax exempt
income -- -- -- 2 -- --
Undistributed
long-term
capital gain -- 2,042 -- 7 -- --
Capital loss
carryforwards (52,057) -- -- -- (23) (54)
Post-October
Losses -- -- (44) -- -- --
Other Temporary
Differences -- (8) -- -- -- --
Unrealized
appreciation 6,408 22,858 808 5,523 -- --
-------- --------- ----------- -------- ------- -------
Total Distributable
Earnings
(Accumulated
Losses) $ (45,649) $ 24,892 $ 773 $ 5,532 $ (27) $ (54)
========= ========= =========== ======== ======= =======
Bishop Street Funds 58
(UNAUDITED)
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Post-October losses represent losses realized on investment transactions
from November 1, 2005 through December 31, 2005 that, in accordance with Federal
income tax regulations the Funds have elected to defer and treat as having
arisen in the following fiscal year.
For Federal income tax purposes, capital 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 as follows:
Treasury
Large Cap Money Money
Growth Market Market
Fund Fund Fund
(000) (000) (000)
--------- -------- ---------
Dec. 2008 $ -- $ 2 $ --
Dec. 2009 24,675 18 --
Dec. 2010 25,686 -- --
Dec. 2011 1,696 -- --
Dec. 2012 -- -- 27
Dec. 2013 -- 3 27
-------- -------- ---------
Total $ 52,057 $ 23 $ 54
During the year ended December 31, 2005 the Large Cap Growth Fund,
utilized capital loss carryforwards of $11,595,848, to offset realized capital
gains.
The aggregate gross unrealized appreciation and depreciation of securities
held by the Large Cap Growth, Strategic Growth, Large Cap Core Equity, High
Grade Income, and Hawaii Municipal Bond Funds for Federal income tax purposes at
June 30, 2006 were as follows:
Large Cap Strategic Large Cap High Grade Hawaii
Growth Growth Core Income Municipal
Fund Fund Equity Fund Fund Bond Fund
(000) (000) (000) (000) (000)
--------- ---------- ------------ ---------- ----------
Federal Tax Cost $ 36,343 $ 121,771 $ 61,502 $ 165,398 $ 161,524
--------- --------- ----------- ---------- ---------
Gross
Unrealized
Appreciation 2,942 22,185 929 844 3,033
Gross
Unrealized
Depreciation (1,695) (4,804) (2,654) (4,430) (1,442)
--------- --------- ----------- ---------- ---------
Net
Unrealized
Appreciation
(Depreciation) $ 1,247 $ 17,381 $ (1,725) $ (3,586) $ 1,591
========= ========= =========== ========== =========
June 30, 2006 59 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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8. 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.
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.
9. OTHER
At June 30, 2006, the percentage of total shares outstanding held by
shareholders for each Fund, which comprised of an omnibus account that was held
on behalf of several individual shareholders, was as follows:
Number of % of Outstanding
Shareholders Shares
------------ ----------------
Large Cap Growth Fund, Class I Shares 3 81.97%
Strategic Growth Fund, Class I Shares 2 91.72
Large Cap Core Equity Fund, Class I Shares 1 90.99
High Grade Income Fund, Class I Shares 2 86.90
Hawaii Municipal Bond Fund, Class I Shares 1 83.47
Hawaii Municipal Bond Fund, Class A Shares 1 12.97
Money Market Fund, Class I Shares 1 96.21
Money Market Fund, Class A Shares 1 99.94
Treasury Money Market Fund, Class I Shares 1 99.81
10. SUBSEQUENT EVENT
On July 14, 2006, the Trust's Board of Trustees approved the closing and
liquidation of the Bishop Street Large Cap Growth Fund. The Fund is expected to
cease operations and make a liquidating distribution to shareholders on or about
September 29, 2006.
Bishop Street Funds 60
Bishop Street Funds (UNAUDITED)
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DISCLOSURE OF FUND EXPENSES
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.
June 30, 2006 61 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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- ------------------------------------------------------------------------------------------
Beginning Ending Expenses
Account Account Annualized Paid
Value Value Expense During
1/1/06 6/30/06 Ratios Period*
- ------------------------------------------------------------------------------------------
LARGE CAP GROWTH FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,004.70 1.00% $4.97
HYPOTHETICAL 5% RETURN 1,000.00 1,019.84 1.00 5.01
- ------------------------------------------------------------------------------------------
STRATEGIC GROWTH FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $ 982.60 1.07% $5.26
HYPOTHETICAL 5% RETURN 1,000.00 1,019.49 1.07 5.36
- ------------------------------------------------------------------------------------------
LARGE CAP CORE EQUITY FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN** $1,000.00 $ 964.70 1.05% $1.61
HYPOTHETICAL 5% RETURN 1,000.00 1,019.59 1.05 5.26
- ------------------------------------------------------------------------------------------
HIGH GRADE INCOME FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $ 985.90 0.76% $3.74
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 $ 998.40 0.55% $2.73
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 $ 997.20 0.80% $3.96
HYPOTHETICAL 5% RETURN 1,000.00 1,020.83 0.80 4.01
- ------------------------------------------------------------------------------------------
MONEY MARKET FUND -- CLASS I
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,021.10 0.50% $2.51
HYPOTHETICAL 5% RETURN 1,000.00 1,022.32 0.50 2.51
- ------------------------------------------------------------------------------------------
MONEY MARKET FUND -- CLASS A
- ------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,019.80 0.75% $3.76
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 $1,020.10 0.44% $2.20
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).
** Fund commenced operations on May 3, 2006. Expenses are equal to the Fund's
annualized expense ratio multiplied by the average account value over the
period, multiplied by 58/365.
Bishop Street Funds 62
Bishop Street Funds (UNAUDITED)
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APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
BOARD CONSIDERATION AND APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY
AGREEMENTS. The annual approval of the investment advisory agreement with Bishop
Street Capital Management (the "Adviser") and the sub-advisory agreement with
BNP Paribas Asset Management, Inc. ("BNP PAM") 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. In preparation for such meeting, the Board requests and
reviews a wide variety of information. The Trustees use this information to help
them decide whether to renew an agreement for another year.
In preparation for a meeting held on February 17, 2006, at which the Board
considered the renewal of the agreements with the Adviser and BNP PAM, the Board
requested and received materials from the Adviser and BNP PAM about: (a) the
quality of the Adviser's and BNP PAM's investment management and other services;
(b) the Adviser's and BNP PAM's investment management personnel; (c) the
Adviser's and BNP PAM's operations and financial condition; (d) the Adviser's
and BNP PAM'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 and BNP
PAM's compliance systems; (i) the Adviser's and BNP PAM's policies on and
compliance procedures for personal securities transactions; (j) the Adviser's
and BNP PAM's reputation, expertise and resources in domestic financial markets;
and (k) each Fund's performance compared with similar mutual funds.
Representatives from the Adviser and BNP PAM presented additional oral and
written information to the Board at the meeting to help the Board evaluate the
Adviser's and BNP PAM'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.
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 and BNP PAM. The Board considered
the following specific factors, none of which was controlling, and made the
following conclusions:
June 30, 2006 63 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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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 and BNP PAM. In this regard, the Trustees evaluated,
among other things, the Adviser's and BNP PAM's personnel, experience, track
record, and compliance program. The Board considered the background and
experience of the Adviser's and BNP PAM'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. The Board also reviewed information pertaining to the
Adviser's and BNP PAM'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 and BNP PAM 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. The Board concluded that, within the context of its
full deliberations, the performance of the Funds and the Adviser and BNP PAM
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
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.
Bishop Street Funds 64
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
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.
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. The Board concluded that, within the context of its full deliberations,
the Funds obtain reasonable benefit from economies of scale.
June 30, 2006 65 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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SHAREHOLDER VOTING RESULTS
At a special meeting held on April 21, 2006, the shareholders of the Bishop
Street Funds voted on the proposal to elect a new Board of Trustees for the
Trust.
The results of the voting were as follows:
% OF % OF
NUMBER SHARES SHARES
OF SHARES VOTED OUTSTANDING
----------- --------- ------------
1. ROBERT A. NESHER
AFFIRMATIVE 285,117,814 93.662% 57.904%
WITHHOLD 19,294,544 6.338% 3.919%
------------ -------- --------
TOTAL 304,412,358 100% 61.823%
2. WILLIAM M. DORAN
AFFIRMATIVE 303,108,686 99.572% 61.558%
WITHHOLD 1,303,672 0.428% 0.265%
------------ -------- --------
TOTAL 304,412,358 100% 61.823%
3. EUGENE B. PETERS
AFFIRMATIVE 302,966,980 99.535% 61.536%
WITHHOLD 1,415,378 0.465% 0.287%
------------ -------- --------
TOTAL 304,382,358 100% 61.823%
4. JAMES M. STOREY
AFFIRMATIVE 302,966,980 99.535% 61.536%
WITHHOLD 1,415,378 0.465% 0.287%
------------ -------- --------
TOTAL 304,382,358 100% 61.823%
5. GEORGE J. SULLIVAN
AFFIRMATIVE 303,108,686 99.572% 61.558%
WITHHOLD 1,303,672 0.428% 0.265%
------------ -------- --------
TOTAL 304,412,358 100% 61.823%
June 30, 2006 66 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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% OF % OF
NUMBER SHARES SHARES
OF SHARES VOTED OUTSTANDING
----------- --------- ------------
6. BETTY L. KRIKORIAN
AFFIRMATIVE 303,108,686 99.572% 61.558%
WITHHOLD 1,303,672 0.428% 0.265%
------------ -------- --------
TOTAL 304,412,358 100% 61.823%
7. CHARLES E. CARLBOM
AFFIRMATIVE 302,966,980 99.535% 61.536%
WITHHOLD 1,415,378 0.465% 0.287%
------------ -------- --------
TOTAL 304,382,358 100% 61.823%
8. MITCHELL A. JOHNSON
AFFIRMATIVE 303,107,874 99.571% 61.558%
WITHHOLD 1,304,484 0.429% 0.265%
------------ -------- --------
TOTAL 304,412,358 100% 61.823%
June 30, 2006 67 www.bishopstreetfunds.com
NOTES
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
[LOGO]
BISHOP
STREET
FUNDS
FOR MORE INFORMATION ABOUT BISHOP STREET FUNDS, CALL 1-800-262-9565
OR YOUR INVESTMENT SPECIALIST
VISIT US ONLINE AT WWW.BISHOPSTREETFUNDS.COM
- --------------------------------------------------------------------------------
[LOGO]
BISHOP BISHOP STREET FUNDS
STREET P.O. BOX 3708
FUNDS 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-SAR-004-1200
- --------------------------------------------------------------------------------
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 28, 2006
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 28, 2006
By (Signature and Title)* /s/ Michael Lawson
------------------
Michael Lawson
Treasurer and Controller
Date: August 28, 2006
* Print the name and title of each signing officer under his or her signature.