UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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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 02109
(Address of principal executive offices)
SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-262-9565
DATE OF FISCAL YEAR END: DECEMBER 31, 2007
DATE OF REPORTING PERIOD: JUNE 30, 2007
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED]
BISHOP STREET
FUNDS
SEMI-ANNUAL
REPORT
JUNE 30, 2007
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 FUNDS LOGO OMITTED]
The Funds file their complete schedules 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.
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BISHOP STREET
TABLE OF CONTENTS
FUNDS
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS ..................................................... 2
SCHEDULE OF INVESTMENTS
Strategic Growth Fund ................................................ 4
Large Cap Core Equity Fund ........................................... 7
High Grade Income Fund ............................................... 13
Hawaii Municipal Bond Fund ........................................... 21
Money Market Fund .................................................... 30
Treasury Money Market Fund ........................................... 33
STATEMENTS OF ASSETS AND LIABILITIES ....................................... 34
STATEMENTS OF OPERATIONS ................................................... 36
STATEMENTS OF CHANGES IN NET ASSETS ........................................ 38
FINANCIAL HIGHLIGHTS ....................................................... 42
NOTES TO FINANCIAL STATEMENTS .............................................. 46
DISCLOSURE OF FUND EXPENSES ................................................ 57
APPROVAL OF INVESTMENT ADVISORY AND
SUB-ADVISORY AGREEMENTS .................................................. 59
SHAREHOLDER VOTING RESULTS ................................................. 62
1
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BISHOP STREET
LETTER TO SHAREHOLDERS
FUNDS
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[PHOTO OMITTED]
The first six months of 2007 was an interesting period in the investment world,
leaving investors with a host of questions yet to be answered. A slowing U.S.
economy, the threat of rising inflation, higher interest rates, a housing
slowdown, the sub-prime debacle, and the near collapse of two large hedge funds
has created greater uncertainty for investors.
Meanwhile, corporate profits were strong and liquidity remained abundant fueling
capital expansion, increased merger and acquisition activity, share repurchases,
and excessive risk taking that has driven stock prices around the world into
record territory. At least in the short run, it appears that these latter
influences have won the battle. Or have they?
STOCKS SOAR TO NEW HIGHS IN 2007
The U.S. stock market remained volatile in the first half of the year with all
major indices managing to finish on a strong note. Most impressive was the Dow
Jones Industrial Average which gained 8.75% so far this year, pushed to record
highs time and time again even after the big sell off in late February.
The S&P 500 and NASDAQ managed equally impressive gains yet those returns paled
in comparison to the extraordinary gains witnessed abroad as those international
markets continued to reap the benefits of the unprecedented broad-based, global
economic boom. Interestingly, in a marked turnaround from recent years,
large-capitalization stocks managed to outpace small-cap issues.
MODEST HALF-YEAR GAINS FOR THE BOND MARKET
The Federal Reserve maintained its target for the federal funds rate at 5.25%
during the first six months of the year despite concerns about inflation, market
speculation, a weak housing market, and a sub-prime mess that threatened to
undermine the stability of our financial markets. Perhaps even more significant,
the yield curve steepened from its inverted condition with the premiums
generally paid for longer term bonds and the longer commitment of capital
beginning to return.
Bishop Street Funds 2
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[BISHOP STREET FUNDS LOGO OMITTED]
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Money market instruments continued to be a bright spot in the fixed income
markets, returning 2.5% for the first half. The yield on the 3-month U.S.
Treasury Bill stood at 4.8% at the end of June -- not much changed from a year
ago. Over this same period, the broad taxable bond market gained just 1.0%,
while municipal bonds posted a modest 0.2% return.
A BALANCED STRATEGY WILL POSITION YOUR PORTFOLIO FOR THE LONG TERM
At BSCM, we encourage shareholders to take a long-term perspective when
evaluating their investment portfolio. And in our view, the Strategic Growth
Fund and Large Cap Core Fund should be a part of a carefully designed, balanced
portfolio utilizing a strategic asset allocation that reflects your personal
risk appetite, investment time horizon, and investment goals. Over time, a
well-diversified portfolio holding both growth and core stock funds as well as
bond and money market funds will help position your portfolio to realize the
benefits of the market's best performing asset classes while mitigating the
negative impact of those that under-perform. And with a long-term focus on
maximizing the value of your investment portfolio, the BSCM family of funds can
play an important role in helping to achieve those goals.
Thank you for investing with Bishop Street Capital Management.
Sincerely,
/s/ Michael K. Hirai
Michael K. Hirai, CFA
President and Chief Investment Officer
July 15, 2007
June 30, 2007 3 www.bishopstreetfunds.com
Strategic Growth Fund (UNAUDITED)
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TOP TEN EQUITY HOLDINGS+
------------------------------------------------------------------------
Percentage of
Investments
------------------------------------------------------------------------
1. Monsanto 2.3%
------------------------------------------------------------------------
2. W.W. Grainger 2.3%
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3. Google, Cl A 2.2%
------------------------------------------------------------------------
4. Accenture Ltd., Cl A 2.2%
------------------------------------------------------------------------
5. Target 2.2%
------------------------------------------------------------------------
6. Transocean 2.2%
------------------------------------------------------------------------
7. Affiliated Managers Group 2.1%
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8. Akamai Technologies 2.1%
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9. Oracle 2.1%
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10. Franklin Resources 2.1%
------------------------------------------------------------------------
------------------------------------------------------------------------
SECTOR WEIGHTINGS+
[GRAPHIC OMITTED]
PLOT POINTS ARE AS FOLLOWS:
22.5% Information Technology
19.6% Financials
15.9% Health Care
15.3% Consumer Discretionary
11.8% Industrials
4.2% Energy
4.1% Materials
3.8% Consumer Staples
2.0% Telecommunications
0.8% Short-Term Investments
------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Market
Value
Shares (000)
------ ------
COMMON STOCK -- 99.4%
CONSUMER DISCRETIONARY -- 15.3%
32,300 Abercrombie & Fitch, Cl A $ 2,357
54,600 Coach* 2,588
77,307 Hilton Hotels 2,588
36,900 Kohl's* 2,621
51,800 McDonald's 2,629
50,300 Nordstrom 2,571
8,250 Staples 196
48,700 Target 3,097
78,740 Wyndham Worldwide* 2,855
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21,502
--------
Bishop Street Funds 4
Strategic Growth Fund (UNAUDITED)
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SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ------
CONSUMER STAPLES -- 3.8%
73,313 CVS $ 2,672
45,700 General Mills 2,670
--------
5,342
--------
ENERGY -- 4.2%
29,200 Transocean* 3,095
46,000 XTO Energy 2,764
--------
5,859
--------
FINANCIALS -- 19.7%
23,500 Affiliated Managers Group* 3,026
40,800 Allstate 2,510
40,000 American International Group 2,801
77,200 CB Richard Ellis Group, Cl A* 2,818
27,200 Everest Re Group Ltd. 2,955
22,500 Franklin Resources 2,981
13,100 Goldman Sachs Group 2,839
50,700 JPMorgan Chase 2,456
36,100 Lehman Brothers Holdings 2,690
30,700 Merrill Lynch 2,566
--------
27,642
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HEALTH CARE -- 15.9%
57,400 Aetna 2,835
48,000 Cigna 2,507
57,400 Express Scripts* 2,871
33,000 Genentech* 2,497
45,000 Genzyme* 2,898
71,200 Gilead Sciences* 2,760
17,600 Sepracor* 722
53,300 Thermo Electron* 2,757
50,200 UnitedHealth Group 2,567
--------
22,414
--------
INDUSTRIALS -- 11.8%
28,300 Lockheed Martin 2,664
30,600 Manpower 2,823
35,700 McDermott International* 2,967
40,200 United Technologies 2,852
34,400 W.W. Grainger 3,201
17,100 Precision Castparts 2,075
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16,582
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June 30, 2007 5 www.bishopstreetfunds.com
Strategic Growth Fund (UNAUDITED)
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SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ------
INFORMATION TECHNOLOGY -- 22.6%
73,100 Accenture Ltd., Cl A $ 3,135
61,900 Akamai Technologies* 3,011
102,500 Cisco Systems* 2,855
6,000 Google, Cl A* 3,140
61,800 Hewlett-Packard 2,758
44,800 Intuit* 1,348
87,500 Marvel Technology Group Ltd.* 1,593
43,700 Memc Electronic Materials* 2,671
67,700 Nvidia* 2,797
152,100 Oracle* 2,998
120,400 Red Hat* 2,682
142,900 Western Digital* 2,765
--------
31,753
--------
MATERIALS -- 4.1%
24,100 Allegheny Technologies 2,527
48,000 Monsanto 3,242
--------
5,769
--------
TELECOMMUNICATIONS -- 2.0%
63,700 Qualcomm 2,764
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TOTAL COMMON STOCK (Cost $108,542) 139,627
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CASH EQUIVALENTS (A) -- 0.8%
588,243 Dreyfus Cash Management Fund, Institutional Shares, 5.190% 588
588,243 Fidelity Institutional Money Market Portfolio, Institutional Shares, 5.250% 588
--------
TOTAL CASH EQUIVALENTS (Cost $1,176) 1,176
--------
TOTAL INVESTMENTS (COST $109,718) -- 100.2% $140,803
========
PERCENTAGES ARE BASED ON NET ASSETS OF $140,457 (000).
* NON-INCOME PRODUCING SECURITY
(A) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2007.
CL -- CLASS
LTD. -- LIMITED
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds 6
Large Cap Core Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS+
-------------------------------------------------------------------------
Percentage of
Investments
-------------------------------------------------------------------------
1. Citigroup 2.4%
-------------------------------------------------------------------------
2. JPMorgan Chase 2.3%
-------------------------------------------------------------------------
3. Johnson & Johnson 2.1%
-------------------------------------------------------------------------
4. American International Group 2.1%
-------------------------------------------------------------------------
5. Microsoft 2.1%
-------------------------------------------------------------------------
6. Bank of America 1.9%
-------------------------------------------------------------------------
7. Cisco Systems 1.5%
-------------------------------------------------------------------------
8. ConocoPhillips 1.4%
-------------------------------------------------------------------------
9. Norfolk Southern 1.3%
-------------------------------------------------------------------------
10. Chevron 1.3%
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-------------------------------------------------------------------------
SECTOR WEIGHTINGS+
[GRAPHIC OMITTED]
PLOT POINTS ARE AS FOLLOWS:
19.0% Financials
15.5% Information Technology
11.9% Health Care
11.8% Industrials
10.2% Consumer Discretionary
10.1% Energy
7.1% Consumer Staples
4.7% Short-Term Investments
3.4% Materials
2.8% Telecommunications
2.1% Master Notes
0.8% Exchange Traded Fund
0.6% Utilities
-------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS, WHICH INCLUDES SECURITIES
PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING.
SCHEDULE OF INVESTMENTS
Market
Value
Shares (000)
------ ------
COMMON STOCK -- 98.1%
CONSUMER DISCRETIONARY -- 10.9%
11,100 Apollo Group, Cl A* $ 649
12,600 Bed Bath & Beyond* 454
16,400 Best Buy 765
5,200 Black & Decker 459
7,800 Carnival (A) 380
20,700 Centex 830
15,300 Coach* 725
25,650 Comcast, Cl A* 721
June 30, 2007 7 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
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SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ------
CONSUMER DISCRETIONARY -- (CONTINUED)
11,100 EchoStar Communications, Cl A* $ 482
8,200 Harley-Davidson (A) 489
17,200 Hasbro 540
23,100 Home Depot 909
9,300 International Game Technology 369
7,835 Liberty Media Capital, Ser A* 922
8,000 Omnicom Group 423
17,100 Pulte Homes 384
15,800 Staples 375
30,100 Time Warner 633
15,000 Viacom, Cl B* 625
8,600 Whirlpool 956
--------
12,090
--------
CONSUMER STAPLES -- 7.5%
16,400 Altria Group 1,150
28,100 Archer-Daniels-Midland 930
8,000 Campbell Soup 311
16,000 Constellation Brands, Cl A* 389
12,600 Costco Wholesale 737
7,500 Kellogg 388
16,500 PepsiCo 1,070
23,600 Procter & Gamble 1,444
27,000 Wal-Mart Stores 1,299
15,800 Walgreen 688
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8,406
--------
ENERGY -- 10.7%
13,200 Apache 1,077
6,500 Canadian Natural Resources (A) 431
17,900 Chevron 1,508
21,700 ConocoPhillips 1,703
11,600 Devon Energy 908
17,000 Encana 1,045
11,200 National Oilwell Varco* 1,168
12,300 Noble 1,200
7,900 Peabody Energy 382
6,500 Suncor Energy* 584
16,300 Valero Energy 1,204
11,400 XTO Energy 685
--------
11,895
--------
Bishop Street Funds 8
Large Cap Core Equity Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ------
FINANCIALS -- 20.2%
17,500 ACE $ 1,094
8,800 Allstate 541
36,100 American International Group 2,528
45,000 Bank of America 2,200
7,500 Bear Stearns 1,050
15,200 Capital One Financial 1,192
54,800 Citigroup 2,811
28,400 Countrywide Financial 1,033
20,700 E*Trade Financial* (A) 457
18,900 Genworth Financial 650
6,200 Goldman Sachs Group 1,344
12,000 Hartford Financial Services Group 1,182
55,100 JPMorgan Chase 2,670
6,000 Legg Mason 590
14,800 Lehman Brothers Holdings 1,103
14,400 Morgan Stanley 1,208
15,700 Travelers 840
--------
22,493
--------
HEALTH CARE -- 12.6%
10,700 Abbott Laboratories 573
22,300 Amgen* 1,233
19,400 Biogen Idec* (A) 1,038
15,700 Coventry Health Care* 905
11,400 Genzyme* 734
8,000 Gilead Sciences* 310
41,200 Johnson & Johnson 2,539
11,400 Laboratory Corp of America Holdings* (A) 892
16,600 Merck 827
50,800 Pfizer 1,299
21,100 St. Jude Medical* 875
23,100 UnitedHealth Group 1,181
14,200 Wyeth 814
9,300 Zimmer Holdings* 790
--------
14,010
--------
INDUSTRIALS -- 12.6%
19,000 Caterpillar 1,488
15,700 Danaher 1,185
20,500 Dover 1,049
7,300 Eaton 679
11,900 Equifax 529
June 30, 2007 9 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
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SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ------
INDUSTRIALS -- (CONTINUED)
11,500 Exelon $ 835
16,300 General Dynamics 1,275
21,800 General Electric 834
18,000 Illinois Tool Works 975
20,500 Ingersoll-Rand, Cl A 1,124
9,300 L-3 Communications Holdings 906
29,600 Norfolk Southern 1,556
11,300 Parker Hannifin 1,106
8,600 Questar 454
--------
13,995
--------
INFORMATION TECHNOLOGY -- 16.4%
11,400 Accenture Ltd., Cl A 489
16,300 Adobe Systems* 654
11,700 Apple Computer* 1,428
37,600 Applied Materials 747
14,900 Autodesk* 702
17,700 Broadcom, Cl A* 518
63,300 Cisco Systems* 1,763
17,300 Citrix Systems* 583
18,800 eBay* 605
51,600 EMC* 934
2,200 Google, Cl A* 1,151
5,300 International Business Machines 558
10,600 Kla-Tencor (A) 582
10,300 Memc Electronic Materials* 630
84,100 Microsoft 2,478
16,900 Nvidia* 698
53,500 Oracle* 1,054
14,500 SanDisk* 710
84,200 Sun Microsystems* 443
29,800 Texas Instruments 1,121
14,200 VeriSign* 451
--------
18,299
--------
MATERIALS -- 3.6%
19,900 Alcoa 806
3,400 Allegheny Technologies 357
17,000 Freeport-McMoRan Copper & Gold, Cl B (A) 1,408
26,800 Teck Cominco Ltd, Cl B (A) 1,139
3,300 United States Steel 359
--------
4,069
--------
Bishop Street Funds 10
Large Cap Core Equity Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Shares/Face Value
Amount (000) (000)
------------ --------
TELECOMMUNICATION SERVICES -- 3.0%
32,100 Corning* $ 820
6,200 NII Holdings* 501
42,300 Sprint Nextel 876
27,200 Verizon Communications 1,120
--------
3,317
--------
UTILITIES -- 0.6%
10,600 FirstEnergy 686
--------
TOTAL COMMON STOCK (Cost $97,574) 109,260
--------
MASTER NOTES (B) -- 2.2%
$ 775 Bank of America
5.435%, 07/02/07 775
554 Bear Stearns
5.575%, 06/27/07 554
1,107 JPMorgan Securities
5.250%, 07/16/07 1,108
--------
TOTAL MASTER NOTES (Cost $2,437) 2,437
--------
EXCHANGE TRADED FUND (A) -- 0.8%
6,100 SPDR Trust, Ser 1* 917
--------
TOTAL EXCHANGE TRADED FUND (Cost $936) 917
--------
CASH EQUIVALENTS (C) -- 0.2%
97,912 Dreyfus Cash Management Fund, Institutional Shares, 5.190% 98
97,912 Fidelity Institutional Money Market Portfolio, Institutional Shares, 5.250% 98
--------
TOTAL CASH EQUIVALENTS (Cost $196) 196
--------
REPURCHASE AGREEMENT (B) -- 4.8%
$5,386 Lehman Brothers 5.425%, dated 06/29/07, to be repurchased on
07/02/07, repurchase price $5,388,832 (collateralized by various
U.S. Government collateralized mortgage obligations, ranging in
par value $12,890,000-$15,420,000, 5.000%-5.484%,
09/25/34-06/10/39, with a total market value of $5,494,988) 5,386
--------
TOTAL REPURCHASE AGREEMENT (Cost $5,386) 5,386
--------
TOTAL INVESTMENTS (COST $106,529) -- 106.1% $118,196
========
June 30, 2007 11 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
PERCENTAGES ARE BASED ON NET ASSETS OF $111,403 (000).
* NON-INCOME PRODUCING SECURITY
(A) THE SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2007. THE
TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2007 WAS $7,619,915.
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2007, WAS
$7,822,715.
(C) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2007.
CL -- CLASS
LTD. -- LIMITED
SER -- SERIES
SPDR -- STANDARD & POOR'S DEPOSITORY RECEIPT.
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds 12
High Grade Income Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
TOP TEN HOLDINGS+
- -----------------------------------------------------------------------------------------------------
Percentage
Coupon Maturity of
Rate Date Investments
- ---------------------------------------------------------------------------------------------------
1. U.S. Treasury Bond 7.250% 05/15/16 3.3%
-------------------------------------------------------------------------------------------------
2. U.S. Treasury Bond 7.500% 11/15/16 2.1%
-------------------------------------------------------------------------------------------------
3. U.S. Treasury Bond 4.500% 02/15/36 1.8%
-------------------------------------------------------------------------------------------------
4. FHLMC MTN 4.850% 12/01/09 1.8%
-------------------------------------------------------------------------------------------------
5. FNMA 7.250% 01/15/10 1.6%
-------------------------------------------------------------------------------------------------
6. Goldman Sachs Group 6.600% 01/15/12 1.6%
-------------------------------------------------------------------------------------------------
7. FHLMC 5.125% 10/15/08 1.5%
-------------------------------------------------------------------------------------------------
8. General Electric Capital MTN, Ser A 5.450% 01/15/13 1.5%
-------------------------------------------------------------------------------------------------
9. Bank of America 4.875% 01/15/13 1.5%
-------------------------------------------------------------------------------------------------
10. Abbott Laboratories 5.600% 05/15/11 1.3%
- -----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
[GRAPHIC OMITTED]
PLOT POINTS ARE AS FOLLOWS:
28.1% U.S. Government Agency Obligations
14.2% U.S. Treasury Obligations
13.1% Short-Term Investments
10.9% Financials
5.5% Master Notes
4.5% Health Care
4.3% Information Technology
4.2% Consumer Discretionary
3.4% Energy
2.8% Industrials
2.6% U.S. Government Mortgage-Backed Obligations
2.0% Telecommunications
1.8% Utilities
1.6% Consumer Staples
1.0% Materials
- --------------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS, WHICH INCLUDES SECURITIES
PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING.
SCHEDULE OF INVESTMENTS
Face Market
Amount Value
(000) (000)
------ --------
CORPORATE OBLIGATIONS -- 43.9%
AEROSPACE & DEFENSE -- 2.7%
General Dynamics
$ 1,000 4.500%, 08/15/10 $ 978
Rockwell Automation
1,200 6.700%, 01/15/28 1,272
United Technologies
1,200 6.350%, 03/01/11 1,235
--------
3,485
--------
June 30, 2007 13 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
AUTO FINANCE -- 1.8%
DaimlerChrysler NA Holding
$ 700 8.000%, 06/15/10 $ 745
Toyota Motor Credit (A)
1,500 5.450%, 05/18/11 1,510
--------
2,255
--------
BANKS -- 3.4%
Bank of America
2,350 4.875%, 01/15/13 2,272
BHP Billiton Finance
850 5.250%, 12/15/15 814
JPMorgan Chase
1,400 5.875%, 06/13/16 1,402
--------
4,488
--------
BROADCASTING & CABLE -- 1.8%
TCI Communications
1,200 7.875%, 08/01/13 1,315
Turner Broadcasting System
975 8.375%, 07/01/13 1,089
--------
2,404
--------
COMPUTER HARDWARE -- 4.3%
Cisco Systems
1,400 5.500%, 02/22/16 1,366
Dell
1,325 6.550%, 04/15/08 1,336
IBM
1,400 8.375%, 11/01/19 1,693
Oracle
1,200 5.250%, 01/15/16 1,151
--------
5,546
--------
FINANCIALS -- 7.2%
Boeing Capital
1,400 6.500%, 02/15/12 1,459
CIT Group
1,350 5.000%, 11/24/08 1,341
General Electric Capital MTN, Ser A (A)
2,350 5.450%, 01/15/13 2,326
Goldman Sachs Group
2,350 6.600%, 01/15/12 2,433
Bishop Street Funds 14
High Grade Income Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
FINANCIALS -- (CONTINUED)
Jefferies Group
$ 675 6.250%, 01/15/36 $ 633
Merrill Lynch
1,200 5.000%, 02/03/14 1,147
--------
9,339
--------
FOOD & BEVERAGE -- 0.7%
ConAgra Foods
884 7.875%, 09/15/10 943
--------
FOREIGN GOVERNMENTS -- 0.8%
Republic of Italy
1,000 5.375%, 06/12/17 985
--------
GENERAL MERCHANDISE -- 1.2%
Office Depot
600 6.250%, 08/15/13 600
Target
1,000 6.350%, 01/15/11 1,027
--------
1,627
--------
HEALTH CARE -- 1.2%
Johnson & Johnson
1,400 6.950%, 09/01/29 1,607
--------
HEALTHCARE - DISTRIBUTION/SERVICES -- 0.8%
Hillenbrand Industries
1,125 4.500%, 06/15/09 1,104
--------
HOUSEHOLD PRODUCTS -- 1.1%
Proctor & Gamble
1,200 8.000%, 10/26/29 1,481
--------
MEDIA -- 1.0%
News America
1,200 7.250%, 05/18/18 1,298
--------
MOVIES & ENTERTAINMENT -- 0.9%
Walt Disney MTN
1,200 6.200%, 06/20/14 1,241
--------
OIL & GAS - EQUIPMENT/SERVICES -- 1.1%
Baker Hughes
1,400 6.000%, 02/15/09 1,413
--------
June 30, 2007 15 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
OIL & GAS - EXPLORATION/PRODUCTION -- 1.0%
Anadarko Petroleum
$ 1,250 7.200%, 03/15/29 $ 1,283
--------
OIL & GAS - INTEGRATED -- 2.0%
BP Amoco
1,385 9.125%, 03/01/11 1,556
Occidental Petroleum
1,000 6.750%, 01/15/12 1,052
--------
2,608
--------
PHARMACEUTICALS -- 3.4%
Abbott Laboratories
2,100 5.600%, 05/15/11 2,109
Genentech
1,200 4.750%, 07/15/15 1,121
Teva Pharmaceutical LLC (A)
1,200 5.550%, 02/01/16 1,150
--------
4,380
--------
SEMI-CONDUCTORS -- 1.0%
Duke Energy
1,275 4.200%, 10/01/08 1,255
--------
STEEL & STEEL WORKS -- 1.3%
Nucor
1,800 4.875%, 10/01/12 1,735
--------
TELECOMMUNICATIONS -- 1.4%
GTE South, Ser C
500 6.000%, 02/15/08 501
Sprint Capital
1,200 7.625%, 01/30/11 1,263
--------
1,764
--------
TELEPHONES & TELECOMMUNICATION -- 1.0%
AT&T Wireless Services
1,200 8.125%, 05/01/12 1,320
--------
TRANSPORTATION SERVICES -- 0.6%
FedEx
800 7.250%, 02/15/11 841
--------
Bishop Street Funds 16
High Grade Income Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
UTILITIES -- 2.2%
Dominion Resources
$ 1,350 4.125%, 02/15/08 $ 1,339
Hydro-Quebec
1,325 7.500%, 04/01/16 1,500
--------
2,839
--------
TOTAL CORPORATE OBLIGATIONS (Cost $58,801) 57,241
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 33.6%
FHLB
200 6.875%, 08/13/10 209
1,400 5.300%, 01/16/09 1,400
1,000 5.000%, 02/22/13 975
1,300 4.750%, 08/13/10 1,284
1,450 4.100%, 06/13/08 1,434
1,000 3.875%, 07/24/09 974
1,750 3.875%, 02/12/10 1,694
FHLMC
875 8.250%, 06/01/16 1,031
1,000 6.500%, 06/27/22 994
1,000 6.000%, 07/10/13 1,005
1,000 5.500%, 03/05/10 998
700 5.500%, 08/20/19 694
1,400 5.500%, 03/22/22 1,365
1,000 5.400%, 01/11/12 996
1,400 5.200%, 03/05/19 1,345
2,400 5.125%, 10/15/08 (A) 2,399
1,000 5.000%, 01/30/14 980
1,400 4.750%, 05/06/13 1,350
1,500 4.625%, 08/15/08 1,489
1,400 4.375%, 03/01/10 1,371
1,800 4.250%, 05/22/13 1,701
1,100 4.000%, 06/12/13 1,025
FHLMC MTN
1,400 5.750%, 05/23/11 1,403
1,400 5.500%, 02/22/13 1,392
1,400 5.400%, 02/01/16 1,384
1,400 5.250%, 12/01/14 1,362
200 5.000%, 06/18/18 (C) 192
2,800 4.850%, 12/01/09 2,772
FHLMC REMIC, Ser R010, Cl AB
999 5.500%, 12/15/19 985
June 30, 2007 17 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- (CONTINUED)
FNMA
$ 2,400 7.250%, 01/15/10 $ 2,515
400 6.000%, 08/22/16 400
1,400 5.650%, 04/10/13 1,396
1,400 5.300%, 01/12/10 1,400
625 4.750%, 03/30/09 (C) 620
FNMA, Ser 2007, Cl BE
1,007 5.450%, 12/25/20 993
FNMA MTN
300 6.930%, 09/17/12 301
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $44,297) 43,828
--------
U.S. TREASURY OBLIGATIONS -- 17.0%
U.S. Treasury Bonds
2,750 7.500%, 11/15/16 (A) 3,243
4,500 7.250%, 05/15/16 (A) 5,201
1,700 6.375%, 08/15/27 (A) 1,943
1,500 6.250%, 08/15/23 (A) 1,666
800 6.250%, 05/15/30 914
1,000 6.000%, 02/15/26 (A) 1,091
1,300 5.250%, 11/15/28 (A) 1,309
3,100 4.500%, 02/15/36 (A) 2,807
U.S. Treasury Notes (A)
400 4.750%, 02/15/37 377
1,400 4.250%, 08/15/15 1,328
1,200 4.000%, 02/15/14 1,136
1,200 4.000%, 02/15/15 1,124
--------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $21,933) 22,139
--------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 3.0%
FHLMC
57 3.500%, 05/01/08 55
FHLMC, Ser 2844, Cl VB
189 5.500%, 12/15/19 185
FHLMC, Ser 3070, Cl DH
572 5.500%, 11/15/35 569
FHLMC, Ser 3196, Cl CB
971 5.250%, 08/15/11 954
Bishop Street Funds 18
High Grade Income Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Shares/Face Value
Amount (000) (000)
------------- --------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- (CONTINUED)
FNMA
$ 893 3.500%, 08/01/10 $ 856
GNMA
1,400 5.500%, 11/16/31 1,376
--------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $4,060) 3,995
--------
MASTER NOTES (B) -- 6.6%
Bank of America
2,725 5.435%, 07/02/07 2,725
Bear Stearns
1,946 5.575%, 07/05/07 1,946
JPMorgan Securities
3,893 5.455%, 07/16/07 3,893
--------
TOTAL MASTER NOTES (Cost $8,564) 8,564
--------
CASH EQUIVALENTS (D) -- 1.2%
784,856 Dreyfus Cash Management Fund, Institutional Shares, 5.190% 785
784,856 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 5.250% 785
--------
TOTAL CASH EQUIVALENTS (Cost $1,570) 1,570
--------
REPURCHASE AGREEMENT (B) -- 14.5%
18,933 Lehman Brothers 5.425%, dated 06/29/07, to be repurchased on
07/02/07, repurchase price $18,941,796 (collateralized by various
U.S. Government collateralized mortgage obligations, ranging in
par value $12,890,000-$15,420,000, 5.000%-5.484%,
09/25/34-06/10/39, with a total market value of $19,314,935) 18,933
--------
TOTAL REPURCHASE AGREEMENT (Cost $18,933) 18,933
--------
TOTAL INVESTMENTS (COST $158,158) -- 119.8% $156,270
========
June 30, 2007 19 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
PERCENTAGES ARE BASED ON NET ASSETS OF $130,450 (000).
(A) THIS SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2007.
THE TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2007 WAS $26,995,948.
(B) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2007
WAS $27,496,919.
(C) STEP BOND -- COUPON RATE INCREASES IN INCREMENTS TO MATURITY. RATE DISCLOSED
IS AS OF JUNE 30, 2007.
(D) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30,2007.
CL -- CLASS
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
LLC -- LIMITED LIABILITY COMPANY
MTN -- MEDIUM TERM NOTE
NA -- NATIONAL ASSOCIATION
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds 20
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
TOP TEN HOLDINGS+
- -----------------------------------------------------------------------------------------------------
Percentage
Coupon Maturity of
Rate Date Investments
-----------------------------------------------------------------------------------------------
1. University of Hawaii, RB 4.625% 07/15/31 2.9%
-----------------------------------------------------------------------------------------------
2. Hawaii State, Highway, RB 5.000% 07/01/12 2.4%
-----------------------------------------------------------------------------------------------
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 1.9%
-----------------------------------------------------------------------------------------------
5. Hawaii State Department Hawaiian Home, COP 5.000% 11/01/31 1.8%
-----------------------------------------------------------------------------------------------
6. Honolulu City & County, RB 5.000% 07/01/31 1.7%
-----------------------------------------------------------------------------------------------
7. Honolulu City & County, GO 5.000% 07/01/19 1.5%
-----------------------------------------------------------------------------------------------
8. Puerto Rico, Housing Financing Authority, RB 5.000% 12/01/16 1.4%
-----------------------------------------------------------------------------------------------
9. Hawaii State, Highway, RB 5.000% 07/01/16 1.4%
-----------------------------------------------------------------------------------------------
10. Hawaii State, GO 6.500% 12/01/13 1.3%
- -----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
[GRAPHIC OMITTED]
PLOT POINTS ARE AS FOLLOWS:
33.8% General Obligations
14.0% Transportation
9.5% Water
8.5% Facilities
7.6% Higher Education
4.7% Power
4.5% Airport
3.8% Utilities
3.7% General Revenue
3.3% Medical
1.9% School District
1.4% Housing
1.3% Single-Family Housing
1.0% Development
0.8% Short-Term Investments
0.2% Multi-Family Housing
- --------------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Face Market
Amount Value
(000) (000)
-------- --------
MUNICIPAL BONDS -- 99.1%
CALIFORNIA -- 1.3%
Coast, Unified School District, School Facilities District 1-B, GO,
FSA Insured (A)
$1,610 4.595%, 08/01/40 $ 333
Highland, Redevelopment Agency, Project Area No. 1 Tax Allocation,
RB, AMBAC Insured
1,440 5.650%, 12/01/24 1,646
June 30, 2007 21 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
CALIFORNIA -- (CONTINUED)
La Mesa-Spring Valley, School District, Electric of 2002 Project, Ser B,
GO, FGIC Insured (A)
$ 630 5.017%, 08/01/27 $ 240
--------
2,219
--------
GEORGIA -- 1.2%
Main Street, Natural Gas, Ser B, RB
2,000 5.000%, 03/15/18 2,082
--------
HAWAII -- 80.4%
Hawaii County, Refunding & Improvement Project, Ser A, GO,
FGIC Insured
450 5.600%, 05/01/12 481
430 5.600%, 05/01/13 464
400 5.550%, 05/01/09 412
Hawaii County, Ser A, GO, AMBAC
1,000 5.000%, 07/15/15 1,060
1,580 4.250%, 07/15/26 1,487
Hawaii County, Ser A, GO, FSA Insured
1,000 5.000%, 07/15/23 1,030
Hawaii County, Ser A, GO, FSA Insured, Pre-Refunded @ 101 (B)
500 5.400%, 05/15/09 519
Hawaii County, Ser A, GO, MBIA Insured
1,055 5.250%, 07/15/18 1,124
1,205 5.000%, 07/15/15 1,270
1,470 5.000%, 07/15/24 1,520
Hawaii State Airport System, RB, AMT, FGIC Insured
2,000 5.625%, 07/01/18 2,096
Hawaii State Department Hawaiian Home,Kapolei Office Facilities,
Ser A, COP, FSA Insured
3,000 5.000%, 11/01/31 3,092
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 65
Hawaii State, Airport System, Second Ser, RB, AMT, ETM,
MBIA Insured
1,505 6.900%, 07/01/12 1,623
Hawaii State, Airport System, Ser B, RB, AMT, FGIC Insured
1,500 6.625%, 07/01/18 1,612
1,500 6.500%, 07/01/14 1,611
500 6.000%, 07/01/19 528
Bishop Street Funds 22
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
HAWAII -- (CONTINUED)
Hawaii State, Department of Budget & Finance, Chaminade University,
RB, Radian Insured
$1,000 5.000%, 01/01/26 $ 1,023
1,000 4.750%, 01/01/36 964
1,000 4.700%, 01/01/31 981
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 1,486
Hawaii State, Department of Budget & Finance, Electric Company &
Subsidiary Project, Ser B, RB, AMT, XLCA Insured
1,025 5.000%, 12/01/22 1,044
Hawaii State, Department of Budget & Finance, Hawaiian Electric,
Ser A, RB, AMT, AMBAC Insured
675 5.100%, 09/01/32 684
Hawaii State, Department of Budget & Finance, Hawaiian Electric,
Ser A, RB, AMT, MBIA Insured
3,380 5.650%, 10/01/27 3,586
Hawaii State, Department of Budget & Finance, Hawaiian Electric,
Ser C, RB, AMT, AMBAC Insured
1,000 6.200%, 11/01/29 1,051
Hawaii State, Department of Budget & Finance, Mid Pacific Institute,
RB, Radian Insured
1,000 5.000%, 01/01/26 1,034
1,000 4.625%, 01/01/31 950
Hawaii State, Department of Budget & Finance, Queens Health
Systems, Ser B, RB, MBIA Insured,
Pre-Refunded @ 101 (B)
750 5.250%, 07/01/08 768
Hawaii State, Harbor Capital Improvement, RB, AMT, MBIA Insured
2,000 5.500%, 07/01/27 2,043
545 5.400%, 07/01/09 557
Hawaii State, Harbor System, Ser A, RB, AMT, FSA Insured
2,025 5.750%, 07/01/17 2,130
670 5.750%, 07/01/29 701
1,210 5.700%, 07/01/16 1,271
1,000 5.600%, 07/01/15 1,050
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 1,037
June 30, 2007 23 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
-------- --------
HAWAII -- (CONTINUED)
Hawaii State, Highway, RB
$1,000 6.000%, 07/01/08 $ 1,021
2,000 6.000%, 07/01/09 2,080
Hawaii State, Highway, RB, FSA Insured
4,000 5.000%, 07/01/12 4,179
Hawaii State, Highway, Ser A, RB, FSA Insured
725 5.000%, 07/01/21 757
Hawaii State, Highway, Ser A, RB, FSA Insured
1,565 5.000%, 07/01/22 1,630
1,805 5.000%, 07/01/23 1,875
Hawaii State, Highway, Ser B, RB, FSA Insured
2,300 5.000%, 07/01/16 2,432
Hawaii State, Housing, Finance & Development, Single-Family Housing,
Ser A, RB, AMT, FNMA Collateral
350 5.750%, 07/01/30 358
650 5.400%, 07/01/30 663
145 5.250%, 07/01/13 147
Hawaii State, Housing, Finance & Development, Single-Family Housing,
Ser B, RB, FNMA Collateral
1,000 5.450%, 07/01/17 1,016
Hawaii State, Housing, Finance & Development, University of Hawaii
Faculty Housing Project, RB, AMBAC Insured
700 5.650%, 10/01/16 703
Hawaii State, Kapolei Office Building, Ser A, COP, AMBAC Insured
1,475 5.250%, 05/01/13 1,514
1,000 5.000%, 05/01/08 1,010
1,100 5.000%, 05/01/15 1,125
1,000 5.000%, 05/01/16 1,022
1,000 5.000%, 05/01/17 1,022
500 5.000%, 05/01/18 511
Hawaii State, No. 1 Capitol District State Office, COP, MBIA Insured
1,000 5.200%, 05/01/14 1,028
175 5.000%, 05/01/11 179
Hawaii State, Ser CL, GO
1,000 6.000%, 03/01/09 1,033
Hawaii State, Ser CM, GO, FGIC Insured
2,000 6.500%, 12/01/13 2,276
500 6.000%, 12/01/09 524
1,500 6.000%, 12/01/11 1,623
Hawaii State, Ser CP, GO, FGIC Insured
90 5.000%, 10/01/16 91
Hawaii State, Ser CU, GO, MBIA Insured
550 5.750%, 10/01/12 580
Bishop Street Funds 24
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
HAWAII -- (CONTINUED)
Hawaii State, Ser CU, GO, MBIA Insured,
Pre-Refunded @ 100 (B)
$ 25 5.750%, 10/01/10 $ 26
Hawaii State, Ser CV, GO, FGIC Insured
1,000 5.250%, 08/01/21 1,040
Hawaii State, Ser CX, GO, FSA Insured
1,000 5.500%, 02/01/21 1,059
Hawaii State, Ser DF, GO, AMBAC Insured
1,250 5.000%, 07/01/21 1,304
Hawaii State, Ser DG, GO AMBAC Insured
1,000 5.000%, 07/01/16 1,057
Hawaii State, University of Hawaii, Ser A, RB, FGIC Insured,
Pre-Refunded @ 100 (B)
1,605 5.500%, 07/15/12 1,714
500 5.125%, 07/15/12 526
Hawaii State, University of Hawaii, Ser B, RB, FSA Insured
320 5.250%, 10/01/16 334
775 5.250%, 10/01/17 808
Honolulu City & County, 1st Board Resolution, Senior Ser C, RB,
MBIA Insured
2,850 5.000%, 07/01/31 2,946
Honolulu City & County, 2nd Board Resolution, Junior Ser B-1, RB,
MBIA Insured
865 5.000%, 07/01/23 902
Honolulu City & County, 2nd Board Resolution, Junior Ser A-1, RB,
MBIA Insured
815 5.000%, 07/01/22 851
Honolulu City & County, 2nd Board, Junior Ser A-1, RB, MBIA Insured
1,130 5.000%, 07/01/23 1,177
Honolulu City & County, 2nd Board, Junior Ser B-1, RB, MBIA Insured
1,485 5.000%, 07/01/24 1,547
Honolulu City & County, Board of Water Supply, Ser A, RB,
FGIC Insured
2,000 5.000%, 07/01/33 2,052
Honolulu City & County, GO
1,320 5.400%, 09/27/07 1,325
625 5.250%, 03/01/17 662
Honolulu City & County, GO, ETM
230 6.000%, 12/01/09 241
Honolulu City & County, Senior Ser A, RB, FGIC Insured
2,000 5.000%, 07/01/18 2,101
1,280 5.000%, 07/01/20 1,338
Honolulu City & County, Ser A, GO
55 6.000%, 01/01/10 58
1,000 5.750%, 04/01/12 1,074
June 30, 2007 25 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
HAWAII -- (CONTINUED)
Honolulu City & County, Ser A, GO, ETM
$ 500 6.000%, 01/01/09 $ 516
95 6.000%, 01/01/10 100
Honolulu City & County, Ser A, GO, MBIA Insured
500 5.250%, 03/01/28 522
1,000 5.000%, 07/01/14 1,056
Honolulu City & County, Ser B, GO, ETM, FGIC Insured
635 5.500%, 10/01/11 674
Honolulu City & County, Ser B, RB, AMT, MBIA Insured
1,000 5.250%, 07/01/21 1,051
Honolulu City & County, Ser C, GO, FGIC Insured
565 5.125%, 07/01/11 583
1,100 5.125%, 07/01/15 1,134
2,500 5.000%, 07/01/19 2,570
Honolulu City & County, Ser C, GO, MBIA Insured
500 5.000%, 07/01/16 529
Honolulu City & County, Ser D, GO, AMT, FGIC Insured
245 4.850%, 02/01/10 249
Honolulu City & County, Ser D, GO, MBIA Insured
885 5.000%, 07/01/19 927
2,000 5.000%, 07/01/23 2,077
Honolulu City & County, Ser E, GO, FGIC Insured
1,500 5.250%, 07/01/20 1,597
Honolulu City & County, Waipahu Towers Project, Ser A, RB, AMT,
GNMA Collateral
200 6.900%, 06/20/35 201
Honolulu City & County, Waste Water, 2nd Board Resolution,
Junior Ser, RB, FGIC Insured
1,000 5.000%, 07/01/23 1,024
Honolulu City & County, Water Board, Ser A, RB, FGIC Insured,
Pre-Refunded @ 100 (B)
1,700 4.750%, 07/01/14 1,773
2,000 4.750%, 07/01/14 2,086
Honolulu City & County, Water Board, Ser B, RB, AMT, MBIA Insured
1,000 5.250%, 07/01/20 1,053
325 5.000%, 07/01/15 339
Kauai County, Ser A, GO, FGIC Insured
1,610 5.000%, 08/01/21 1,681
1,440 5.000%, 08/01/23 1,496
1,555 5.000%, 08/01/24 1,615
Bishop Street Funds 26
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
HAWAII -- (CONTINUED)
Kauai County, Ser A, GO, FGIC Insured,
Pre-Refunded @ 100 (B)
$1,135 6.250%, 08/01/18 $ 1,212
1,480 6.250%, 08/01/20 1,580
1,335 6.250%, 08/01/21 1,425
1,050 6.250%, 08/01/22 1,121
Kauai County, Ser A, GO, MBIA Insured
490 5.625%, 08/01/18 518
1,500 5.000%, 08/01/25 1,533
Kauai County, Ser A, GO, MBIA Insured,
Pre-Refunded @ 100 (B)
260 5.625%, 08/01/18 276
Maui County, Ser A, GO, MBIA Insured
1,000 4.750%, 07/01/25 1,011
Maui County, GO, MBIA Insured
1,100 5.000%, 03/01/24 1,140
Maui County, Ser A, GO
260 5.375%, 03/01/12 272
Maui County, Ser A, GO, FGIC Insured
150 5.000%, 03/01/13 153
Maui County, Ser A, GO, FGIC Insured,
Pre-Refunded @ 101 (B)
100 5.125%, 03/01/14 102
50 5.000%, 03/01/13 51
Maui County, Ser A, GO,
Pre-Refunded @ 100 (B)
225 5.375%, 03/01/12 236
Maui County, Ser B, GO, MBIA Insured
500 5.000%, 09/01/17 525
University of Hawaii, Ser A, RB, MBIA Insured
5,000 4.625%, 07/15/31 4,918
--------
138,488
--------
ILLINOIS -- 1.0%
Illinois State, Educational Facilities Authority, Northwestern
University, RB
670 5.000%, 12/01/38 682
Illinois State, Finance Authority, Hospital Sisters Services, Ser A, RB
1,000 5.000%, 03/15/27 1,022
--------
1,704
--------
INDIANA -- 0.9%
Indiana State, Health & Educational Facilities Financing Authority,
Clarian Health Obligation, Ser A, RB
1,500 5.000%, 02/15/39 1,493
--------
June 30, 2007 27 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ --------
MASSACHUSETTS -- 0.3%
Massachusetts State, Water Resources Authority, Ser J, RB
$ 565 5.000%, 08/01/42 $ 575
--------
OKLAHOMA -- 1.2%
Tulsa County, Oklahoma Industrial Authority, St. Francis Health
System, RB
2,000 5.000%, 12/15/36 2,016
--------
PUERTO RICO -- 8.1%
Commonwealth of Puerto Rico, GO, MBIA Insured
500 6.500%, 07/01/14 573
1,500 6.000%, 07/01/15 1,697
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 1,018
Commonwealth of Puerto Rico, Highway and Transportation Authority,
Ser E, RB, FSA Insured
1,000 5.500%, 07/01/21 1,121
Puerto Rico, Electric Power Authority, Ser DD, RB, FSA Insured,
Partially Pre-Refunded @ 101 (B)
1,000 5.000%, 07/01/08 1,020
Puerto Rico, Electric Power Authority, Ser HH, RB, FSA Insured,
Pre-Refunded @ 101 (B)
500 5.250%, 07/01/10 524
Puerto Rico, Housing Financing Authority, Capital Funding Program, RB
2,360 5.000%, 12/01/16 2,464
Puerto Rico, Industrial Tourist Educational Medical Environmental
Control Facilities, Hospital Auxilio Mutuo Obligation Group, Ser A, RB,
MBIA Insured
300 6.250%, 07/01/24 300
Puerto Rico, Public Buildings Authority, Ser F, RB
3,000 5.250%, 07/01/25 3,299
Puerto Rico, University of Puerto Rico, Ser O, RB, MBIA Insured,
Pre-Refunded @ 100 (B)
1,500 5.750%, 06/01/10 1,578
--------
14,045
--------
SOUTH CAROLINA -- 0.4%
Edisto Beach, GO
735 5.000%, 04/01/37 734
--------
Bishop Street Funds 28
Hawaii Municipal Bond Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Shares/Face Value
Amount (000) (000)
------------ ------
TEXAS -- 4.3%
Clint, Independent School District, GO
$1,505 5.000%, 08/15/23 $ 1,563
Grayson County, Pass Through Toll, GO, FSA Insured
2,000 4.300%, 01/01/24 1,887
Harris County, Houston Texas Sports Authority, Ser A, Special RB,
MBIA Insured (A)
5,000 5.400%, 11/15/40 824
Rockdale, Independent School District, GO
1,140 5.000%, 02/15/27 1,167
University of Texas, Permanent University Fund, Ser B, RB
2,000 4.500%, 07/01/33 1,892
--------
7,333
--------
TOTAL MUNICIPAL BONDS (Cost $169,730) 170,689
--------
CASH EQUIVALENTS (C) -- 0.8%
646,397 Dreyfus Tax-Exempt Cash Management Fund,
Institutional Shares, 3.470% 646
646,397 Fidelity Institutional Tax-Exempt Portfolio, Institutional Shares, 3.470% 646
--------
TOTAL CASH EQUIVALENTS (Cost $1,292) 1,292
--------
TOTAL INVESTMENTS (COST $171,022) -- 99.9% $171,981
========
PERCENTAGES ARE BASED ON NET ASSETS OF $172,136 (000).
(A) ZERO COUPON SECURITY -- THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS
THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(B) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
(C) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2007.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
AMT -- ALTERNATIVE MINIMUM TAX
COP -- CERTIFICATE OF PARTICIPATION
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTEE INSURANCE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA -- FINANCIAL SECURITY ASSURANCE
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
RB -- REVENUE BOND
SER -- SERIES
XLCA -- XL CAPITAL
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2007 29 www.bishopstreetfunds.com
Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
[GRAPHIC OMITTED]
PLOT POINTS ARE AS FOLLOWS:
89.0% Commercial Paper
4.7% Certificates of Deposit/Bank Notes
4.4% Repurchase Agreement
1.9% Corporate Obligations
- --------------------------------------------------------------------------------
+PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Face
Amount Value
(000) (000)
------ --------
COMMERCIAL PAPER (A) -- 89.3%
AUTO FINANCE -- 3.9%
BMW Capital
$ 9,000 5.342%, 07/02/07 $ 8,999
--------
BANKS -- 36.8%
Bank of America
3,300 5.304%, 07/05/07 3,298
6,000 5.285%, 07/27/07 5,977
Bank of Montreal
8,300 5.302%, 08/15/07 8,246
Danske
5,700 5.275%, 07/10/07 5,693
5,600 5.299%, 08/20/07 5,560
Deutsche Bank
5,500 5.283%, 07/13/07 5,490
Fortis Bank
8,000 5.285%, 08/03/07 7,961
3,000 5.318%, 08/20/07 2,978
JPMorgan Chase
11,500 5.299%, 08/29/07 11,401
Lloyds TSB Bank
3,000 5.273%, 07/13/07 2,995
6,000 5.273%, 07/26/07 5,978
UBS Finance
9,000 5.350%, 07/02/07 8,999
Westpac Capital
1,642 5.294%, 07/09/07 1,640
9,000 5.301%, 07/31/07 8,961
--------
85,177
--------
Bishop Street Funds 30
Money Market Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
------ --------
BROADCASTING & CABLE -- 2.8%
Charta
$ 6,500 5.294%, 07/18/07 $ 6,484
--------
FINANCIALS -- 45.8%
Abbey National Treasury Services
11,000 5.297%, 08/06/07 10,942
ABN-Amro North American Finance
10,000 5.308%, 09/21/07 9,881
Atlantic Asset Securitization
5,000 5.361%, 07/12/07 4,992
6,500 5.314%, 07/16/07 6,486
CBA Financial
11,000 5.297%, 07/06/07 10,992
Chariot Funding
5,500 5.303%, 07/20/07 5,485
5,000 5.333%, 07/24/07 4,983
Dexdel
8,000 5.314%, 09/18/07 7,908
Dresdner Financial
12,100 5.294%, 07/05/07 12,093
HBOS Treasury Services
7,275 5.289%, 07/02/07 7,274
3,000 5.301%, 08/03/07 2,985
Societe Generale
11,000 5.291%, 07/26/07 10,960
Svenska Handels New York
11,000 5.301%, 07/12/07 10,982
--------
105,963
--------
TOTAL COMMERCIAL PAPER (Cost $206,623) 206,623
--------
CERTIFICATES OF DEPOSIT/BANK NOTES -- 4.8%
Citicorp
11,000 5.300%, 07/27/07 11,000
--------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $11,000) 11,000
--------
June 30, 2007 31 www.bishopstreetfunds.com
Money Market Fund (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
------ --------
CORPORATE OBLIGATIONS (B) -- 1.8%
FINANCIALS -- 1.9%
General Electric Capital
$ 2,300 5.445%, 07/09/07 $ 2,300
General Electric Capital MTN
2,000 5.445%, 10/17/07 2,000
--------
TOTAL CORPORATE OBLIGATIONS (Cost $4,300) 4,300
--------
REPURCHASE AGREEMENT -- 4.4%
10,200 Barclays Bank 5.000%, dated 06/29/07, to be repurchased on
07/02/07, repurchase price $10,204,505 (collateralized by a
U.S. Government obligation, par value $77,962,290, 5.000%,
05/01/36 with a total market value $10,404,000) 10,200
--------
TOTAL REPURCHASE AGREEMENT (Cost $10,200) 10,200
--------
TOTAL INVESTMENTS (COST $232,123) -- 100.3% $232,123
========
PERCENTAGES ARE BASED ON NET ASSETS OF $231,472 (000).
(A) THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE EFFECTIVE YIELD AT
THE TIME OF PURCHASE.
(B) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS
IS THE RATE IN EFFECT ON JUNE 30, 2007. THE MATURITY DATE SHOWN IS THE NEXT
SCHEDULED RESET DATE.
MTN -- MEDIUM TERM NOTE
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds 32
Treasury Money Market Fund (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+
[GRAPHIC OMITTED]
PLOT POINTS ARE AS FOLLOWS:
73.1% U.S. Treasury Obligations
26.9% Repurchase Agreement
- --------------------------------------------------------------------------------
+PERCENTAGES BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Face
Amount Value
(000) (000)
------ --------
U.S. TREASURY OBLIGATIONS (A) -- 73.3%
U.S. Treasury Bills
$10,000 4.740%, 08/30/07 $ 9,922
75,000 4.710%, 09/27/07 74,147
35,000 4.780%, 12/20/07 34,214
--------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $118,283) 118,283
--------
REPURCHASE AGREEMENT -- 27.0%
43,600 Barclays Bank 4.250%, dated 06/29/07, to be repurchased on
07/02/07, repurchase price $43,615,442 (collateralized by a
U.S. Government obligation, par value $45,616,000, 3.125%,
04/15/09 with a total market value $44,472,119) 43,600
--------
TOTAL REPURCHASE AGREEMENT (Cost $43,600) 43,600
--------
TOTAL INVESTMENTS (COST $161,883) -- 100.3% $161,883
========
PERCENTAGES ARE BASED ON NET ASSETS OF $161,311 (000).
(A) THE RATE SHOWN REPRESENTS THE SECURITY'S EFFECTIVE YIELD AT TIME OF
PURCHASE.
COST FIGURES ARE SHOWN WITH "000" OMITTED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2007 33 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2007
(IN THOUSANDS)
Large High
Strategic Cap Core Grade
Growth Equity Income
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at Cost $109,718 $101,143 $139,225
Repurchase Agreements, at Cost -- 5,386 18,933
=================================================================================================================
Investments, at Value $140,803 $112,810(1) $137,337(1)
Repurchase Agreements, at Value -- 5,386 18,933
Receivable for Investment Securities Sold 2,383 937 --
Receivable for Fund Shares Sold 85 154 24
Dividends and Interest Receivable 33 71 1,997
Prepaid Expenses 4 2 1
- -----------------------------------------------------------------------------------------------------------------
Total Assets 143,308 119,360 158,292
- -----------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for Investment Securities Purchased 2,537 -- --
Payable for Fund Shares Redeemed 166 18 14
Income Distribution Payable -- -- 217
Collateral on Securities Loaned -- 7,823 27,497
Advisory Fees Payable 86 66 45
Administrative Fees Payable 13 11 12
Shareholder Servicing Fees Payable 12 9 11
Chief Compliance Officer Fees Payable 3 2 3
Trustees' Fees Payable 1 1 1
Other Accrued Expenses Payable 33 27 42
- -----------------------------------------------------------------------------------------------------------------
Total Liabilities 2,851 7,957 27,842
- -----------------------------------------------------------------------------------------------------------------
Net Assets $140,457 $111,403 $130,450
=================================================================================================================
Fund Shares $100,080 $ 97,297 $133,348
Undistributed Net Investment Income
(Distributions in Excess of Net Investment Income/
Accumulated Net Investment Loss) (56) (7) 2
Accumulated Net Realized Gain (Loss) on Investments 9,348 2,446 (1,012)
Net Unrealized Appreciation (Depreciation) on Investments 31,085 11,667 (1,888)
- -----------------------------------------------------------------------------------------------------------------
Net Assets $140,457 $111,403 $130,450
=================================================================================================================
Class I Shares:
Net Assets $140,457 $111,403 $130,450
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 8,725 9,752 13,324
Net Asset Value, Offering and Redemption Price Per Share
(Net Assets / Shares Outstanding) $16.10 $11.42 $9.79
=================================================================================================================
(1) INCLUDED IN "INVESTMENTS, AT VALUE" IS THE MARKET VALUE OF SECURITIES ON
LOAN IN THE AMOUNTS OF $7,619,915, AND $26,995,948 FOR THE LARGE CAP CORE
EQUITY AND HIGH GRADE INCOME FUNDS, RESPECTIVELY.
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 34
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2007
(IN THOUSANDS)
Hawaii Treasury
Municipal Money Money
Bond Market Market
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at Cost $171,022 $221,923 $118,283
Repurchase Agreements, at Cost -- 10,200 43,600
=================================================================================================================
Investments, at Value $171,981 $221,923 $118,283
Repurchase Agreements, at Value -- 10,200 43,600
Cash -- 11 51
Interest Receivable 3,399 120 10
Receivable for Fund Shares Sold 210 -- --
Prepaid Expenses 3 4 3
- -----------------------------------------------------------------------------------------------------------------
Total Assets 175,593 232,258 161,947
- -----------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for Investment Securities Purchased 2,789 -- --
Income Distribution Payable 465 640 570
Payable for Fund Shares Redeemed 81 -- --
Advisory Fees Payable 33 31 11
Shareholder Servicing Fees Payable 14 19 13
Administrative Fees Payable 10 22 14
Distribution Fees Payable 6 13 --
Chief Compliance Officer Fees Payable 3 4 3
Trustees' Fees Payable 2 2 1
Other Accrued Expenses Payable 54 55 24
- -----------------------------------------------------------------------------------------------------------------
Total Liabilities 3,457 786 636
- -----------------------------------------------------------------------------------------------------------------
Net Assets $172,136 $231,472 $161,311
=================================================================================================================
Fund Shares $170,598 $231,494 $161,362
Undistributed Net Investment Income 3 -- --
Accumulated Net Realized Gain (Loss) on Investments 576 (22) (51)
Net Unrealized Appreciation on Investments 959 -- --
- -----------------------------------------------------------------------------------------------------------------
Net Assets $172,136 $231,472 $161,311
=================================================================================================================
Class I Shares:
Net Assets $142,382 $168,669 $161,311
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 13,529 168,694 161,363
Net Asset Value, Offering and Redemption Price Per Share
(Net Assets / Shares Outstanding) $10.52 $1.00 $1.00
=================================================================================================================
Class A Shares:
Net Assets $ 29,754 $ 62,803 --
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 2,827 62,802 --
Net Asset Value and Redemption Price Per Share
(Net Assets / Shares Outstanding) $10.53 $1.00 --
=================================================================================================================
Maximum Offering Price Per Shares -- Class A
($10.53 / 97.00%) $10.86 N/A N/A
=================================================================================================================
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, 2007 35 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2007
(IN THOUSANDS)
Large High
Strategic Cap Core Grade
Growth Equity Income
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend Income $ 693 $ 745 $ 45
Interest Income -- -- 3,411
Securities Lending, Net -- 4 31
Foreign Taxes Withheld (2) (3) --
- -----------------------------------------------------------------------------------------------------------------
Total Investment Income 691 746 3,487
- -----------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Adviser Fees 521 393 373
Shareholder Servicing Fee 176 133 170
Administrative Fees 141 106 136
Trustees' Fees 5 4 5
Chief Compliance Officer Fees 2 1 2
Transfer Agent Fees 23 23 22
Professional Fees 20 15 19
Printing Fees 12 9 12
Custody Fees 7 5 7
Registration Fees -- 1 1
Miscellaneous Expenses 4 3 10
- -----------------------------------------------------------------------------------------------------------------
Total Expenses 911 693 757
- -----------------------------------------------------------------------------------------------------------------
Less Waivers:
Investment Adviser Fees -- (10) (81)
Shareholder Servicing Fees (106) (80) (102)
Administrative Fees (60) (45) (58)
- -----------------------------------------------------------------------------------------------------------------
Total Waivers (166) (135) (241)
- -----------------------------------------------------------------------------------------------------------------
Total Net Expenses 745 558 516
- -----------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (54) 188 2,971
- -----------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Investments 8,612 2,154 (235)
Change in Unrealized Appreciation
(Depreciation) on Investments 2,794 5,651 (1,712)
- -----------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments 11,406 7,805 (1,947)
- -----------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting from Operations $11,352 $7,993 $ 1,024
=================================================================================================================
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 36
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2007
(IN THOUSANDS)
Hawaii Treasury
Municipal Money Money
Bond Market Market
Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend Income $ 28 $ -- $ --
Interest Income 3,778 5,975 4,186
- -----------------------------------------------------------------------------------------------------------------
Total Investment Income 3,806 5,975 4,186
- -----------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Adviser Fees 297 335 241
Shareholder Servicing Fee 212 279 201
Administrative Fees 170 224 161
Distribution Fees, Class A 37 75 --
Trustees' Fees 7 9 6
Chief Compliance Officer Fees 2 2 1
Transfer Agent Fees 38 40 24
Professional Fees 24 32 22
Printing Fees 14 19 14
Custody Fees 8 12 8
Registration Fees 1 2 2
Miscellaneous Expenses 16 8 21
- -----------------------------------------------------------------------------------------------------------------
Total Expenses 826 1,037 701
- -----------------------------------------------------------------------------------------------------------------
Less Waivers:
Investment Adviser Fees (86) (139) (161)
Shareholder Servicing Fees (127) (167) (121)
Administrative Fees (110) (95) (68)
- -----------------------------------------------------------------------------------------------------------------
Total Waivers (323) (401) (350)
- -----------------------------------------------------------------------------------------------------------------
Total Net Expenses 503 636 351
- -----------------------------------------------------------------------------------------------------------------
Net Investment Income 3,303 5,339 3,835
- -----------------------------------------------------------------------------------------------------------------
Net Realized Gain on Investments 320 -- 6
Change in Unrealized Depreciation
on Investments (4,164) -- --
- -----------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments (3,844) -- 6
- -----------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting from Operations $ (541) $5,339 $3,841
=================================================================================================================
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, 2007 37 www.bishopstreetfunds.com
Bishop Street Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2007 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2006
(IN THOUSANDS)
Strategic Large Cap Core
Growth Fund Equity Fund
- ----------------------------------------------------------------------------------------------------------
2007 2006 2007 2006*
- ----------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income (Loss) $ (54) $ (316) $ 188 $ 310
Net Realized Gain on Investments 8,612 7,651 2,154 300
Change in Unrealized Appreciation
on Investments 2,794 5,124 5,651 6,016
- ----------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting from Operations 11,352 12,459 7,993 6,626
- ----------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares -- -- (195) (318)
Capital Gains:
Class I Shares -- (8,326) -- --
- ----------------------------------------------------------------------------------------------------------
Total Dividends and Distributions -- (8,326) (195) (318)
- ----------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 4,590 32,077 7,718 100,103
Reinvestments of Cash Distributions -- 5,766 153 275
Cost of Shares Redeemed (18,414) (22,388) (7,116) (3,836)
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
From Capital Share Transactions (13,824) 15,455 755 96,542
- ----------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (2,472) 19,588 8,553 102,850
- ----------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 142,929 123,341 102,850 --
- ----------------------------------------------------------------------------------------------------------
End of Period $140,457 $142,929 $111,403 $102,850
==========================================================================================================
Accumulated Net Investment Loss/
Distributions in Excess of Net Investment Income $ (56) $ (2) $ (7) $ --
==========================================================================================================
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 294 2,180 704 10,032
Shares Issued in Lieu of Cash Distributions -- 395 14 27
Shares Redeemed (1,201) (1,539) (650) (375)
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares Outstanding from
Share Transactions (907) 1,036 68 9,684
==========================================================================================================
*COMMENCED OPERATIONS ON MAY 3, 2006.
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 38
Bishop Street Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2007 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2006
(IN THOUSANDS)
High Grade Hawaii Municipal
Income Fund Bond Fund
- ----------------------------------------------------------------------------------------------------------
2007 2006 2007 2006
- ----------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 2,971 $ 5,601 $ 3,303 $ 6,726
Net Realized Gain (Loss) on Investments (235) (681) 320 842
Change in Unrealized Depreciation on Investments (1,712) (1,041) (4,164) (354)
- ----------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting
from Operations 1,024 3,879 (541) 7,214
- ----------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (2,971) (5,603) (2,797) (5,556)
Class A Shares -- -- (561) (1,160)
Capital Gains:
Class I Shares -- -- -- (486)
Class A Shares -- -- -- (107)
- ----------------------------------------------------------------------------------------------------------
Total Dividends and Distributions (2,971) (5,603) (3,358) (7,309)
- ----------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 7,496 21,382 14,402 18,308
Reinvestments of Cash Distributions 1,666 3,249 353 838
Cost of Shares Redeemed (18,213) (22,898) (7,494) (25,935)
- ----------------------------------------------------------------------------------------------------------
Total Class I Capital Share Transactions (9,051) 1,733 7,261 (6,789)
- ----------------------------------------------------------------------------------------------------------
Class A Shares:
Proceeds from Shares Issued -- -- 1,256 1,111
Reinvestments of Cash Distributions -- -- 224 543
Cost of Shares Redeemed -- -- (1,460) (2,744)
- ----------------------------------------------------------------------------------------------------------
Total Class A Capital Share Transactions -- -- 20 (1,090)
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (9,051) 1,733 7,281 (7,879)
- ----------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (10,998) 9 3,382 (7,974)
- ----------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 141,448 141,439 168,754 176,728
- ----------------------------------------------------------------------------------------------------------
End of Period $130,450 $141,448 $172,136 $168,754
==========================================================================================================
Undistributed Net Investment Income $ 2 $ 3 $ 3 $ 58
==========================================================================================================
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 758 2,158 1,349 1,709
Shares Issued in Lieu of Cash Distributions 168 328 33 78
Shares Redeemed (1,834) (2,320) (701) (2,425)
- ----------------------------------------------------------------------------------------------------------
Total Class I Share Transactions (908 166 681 (638)
- ----------------------------------------------------------------------------------------------------------
Class A Shares:
Shares Issued -- -- 117 104
Shares Issued in Lieu of Cash Distributions -- -- 21 51
Shares Redeemed -- -- (136) (256)
- ----------------------------------------------------------------------------------------------------------
Total Class A Share Transactions -- -- 2 (101)
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares Outstanding
from Share Transactions (908) 166 683 (739)
==========================================================================================================
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, 2007 39 www.bishopstreetfunds.com
Bishop Street Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2007 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2006
(IN THOUSANDS)
Money Market Treasury Money
Fund Market Fund
- ----------------------------------------------------------------------------------------------------------
2007 2006 2007 2006
- ----------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 5,339 $ 9,883 $ 3,835 $ 8,671
Net Realized Gain (Loss) on Investments -- 1 6 (3)
- ----------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting from Operations 5,339 9,884 3,841 8,668
- ----------------------------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (3,933) (7,975) (3,835) (8,671)
Class A Shares (1,406) (1,904) -- --
- ----------------------------------------------------------------------------------------------------------
Total Dividends (5,339) (9,879) (3,835) (8,671)
- ----------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (ALL AT $1.00 PER SHARE):
Class I Shares:
Proceeds from Shares Issued 179,920 434,439 233,283 410,744
Reinvestments of Cash Distributions 152 284 6 17
Cost of Shares Redeemed (170,446) (446,137) (230,348) (476,008)
- ----------------------------------------------------------------------------------------------------------
Total Class I Capital Share Transactions 9,626 (11,414) 2,941 (65,247)
- ----------------------------------------------------------------------------------------------------------
Class A Shares:
Proceeds from Shares Issued 64,131 164,007 -- --
Reinvestments of Cash Distributions 1,406 1,905 -- --
Cost of Shares Redeemed (61,947) (142,232) -- --
- ----------------------------------------------------------------------------------------------------------
Total Class A Capital Share Transactions 3,590 23,680 -- --
- ----------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 13,216 12,266 2,941 (65,247)
- ----------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 13,216 12,271 2,947 (65,250)
- ----------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period 218,256 205,985 158,364 223,614
- ----------------------------------------------------------------------------------------------------------
End of Period $ 231,472 $ 218,256 $ 161,311 $ 158,364
==========================================================================================================
Undistributed Net Investment Income $ -- $ -- $ -- $ --
==========================================================================================================
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 40
This page intentionally left Blank.
Bishop Street Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2007
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS FROM
-------------------------------- TOTAL ---------------------
NET ASSET NET REALIZED INVESTMENT TOTAL
VALUE, NET AND UNREALIZED ACTIVITIES NET DIVIDENDS
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND
OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ------------- -------------- ---------- ---------- ------- -------------
- ---------------------
STRATEGIC GROWTH FUND
- ---------------------
CLASS I SHARES:
2007(1) $14.84 $(0.01) $ 1.27 $ 1.26 $ -- $ -- $ --
2006(1) 14.35 (0.03) 1.41 1.38 -- (0.89) (0.89)
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:
2007(1) $10.62 $ 0.02 $ 0.80 $ 0.82 $(0.02) $ -- $(0.02)
2006(1)(3) 10.00 0.04 0.62 0.66 (0.04) -- (0.04)
- ----------------------
HIGH GRADE INCOME FUND
- ----------------------
CLASS I SHARES:
2007(1) $ 9.94 $ 0.22 $(0.15) $ 0.07 $(0.22) $ -- $(0.22)
2006(1) 10.06 0.41 (0.12) 0.29 (0.41) -- (0.41)
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)
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
CLASS I SHARES:
2007(1) $10.77 $ 0.21 $(0.25) $(0.04) $(0.21) $ -- $(0.21)
2006(1) 10.77 0.43 0.04 0.47 (0.43) (0.04) (0.47)
2005(1) 11.02 0.43 (0.16) 0.27 (0.43) (0.09) (0.52)
2004(1) 11.21 0.44 (0.07) 0.37 (0.44) (0.12) (0.56)
2003(1) 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)
CLASS A SHARES:
2007(1) $10.77 $ 0.20 $(0.24) $(0.04) $(0.20) $ -- $(0.20)
2006(1) 10.77 0.40 0.04 0.44 (0.40) (0.04) (0.44)
2005(1) 11.02 0.41 (0.16) 0.25 (0.41) (0.09) (0.50)
2004(1) 11.21 0.41 (0.07) 0.34 (0.41) (0.12) (0.53)
2003(1) 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)
+ 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 42
- --------------------------------------------------------------------------------
RATIO OF RATIO OF EXPENSES RATIO OF NET
NET ASSET NET ASSETS, EXPENSES TO TO AVERAGE INVESTMENT
VALUE, END OF AVERAGE NET ASSETS INCOME (LOSS) PORTFOLIO
END OF TOTAL PERIOD NET EXCLUDING FEE TO AVERAGE TURNOVER
PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS RATE
--------- ------- ----------- ----------- ----------------- ------------- ---------
- ---------------------
STRATEGIC GROWTH FUND
- ---------------------
CLASS I SHARES:
2007(1) $16.10 8.49% $140,457 1.06%* 1.29%* (0.08)%* 26%
2006(1) 14.84 9.78 142,929 1.06 1.30 (0.23) 53
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:
2007(1) $11.42 7.73% $111,403 1.05%* 1.30%* 0.35%* 28%
2006(1)(3) 10.62 6.63 102,850 1.05* 1.32* 0.64* 51
- ----------------------
HIGH GRADE INCOME FUND
- ----------------------
CLASS I SHARES:
2007(1) $ 9.79 0.65% $130,450 0.76%* 1.11%* 4.38%* 13%
2006(1) 9.94 2.96 141,448 0.76 1.12 4.12 41
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
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
CLASS I SHARES:
2007(1) $10.52 (0.36)% $142,382 0.55%* 0.93%* 3.94%* 12%
2006(1) 10.77 4.42 138,333 0.55 0.93 3.99 47
2005(1) 10.77 2.51 145,213 0.55 0.93 3.97 41
2004(1) 11.02 3.36 148,575 0.55 0.92 3.97 40
2003(1) 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
CLASS A SHARES:
2007(1) $10.53 (0.39)% $ 29,754 0.80%* 1.18%* 3.69%* 12%
2006(1) 10.77 4.16 30,421 0.80 1.18 3.74 47
2005(1) 10.77 2.25 31,515 0.80 1.18 3.72 41
2004(1) 11.02 3.10 30,484 0.80 1.17 3.72 40
2003(1) 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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2007 43 www.bishopstreetfunds.com
Bishop Street Funds
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2007
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
INVESTMENT ACTIVITIES
-----------------------------
TOTAL DIVIDENDS
NET ASSET NET REALIZED INVESTMENT FROM
VALUE, NET AND UNREALIZED ACTIVITIES NET
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME DIVIDENDS
--------- ---------- -------------- ---------- ---------- ---------
- -----------------
MONEY MARKET FUND
- -----------------
CLASS I SHARES:
2007(1) $1.00 $ 0.02 $ -- $ 0.02 $(0.02) $(0.02)
2006(1) 1.00 0.05 -- 0.05 (0.05) (0.05)
2005(1) 1.00 0.03 -- 0.03 (0.03) (0.03)
2004(1) 1.00 0.01 -- 0.01 (0.01) (0.01)
2003(1) 1.00 0.01 -- 0.01 (0.01) (0.01)
2002 1.00 0.01 -- 0.01 (0.01) (0.01)
CLASS A SHARES:
2007(1) $1.00 $ 0.02 $ -- $ 0.02 $(0.02) $(0.02)
2006(1) 1.00 0.04 -- 0.04 (0.04) (0.04)
2005(1) 1.00 0.03 -- 0.03 (0.03) (0.03)
2004(1) 1.00 0.01 -- 0.01 (0.01) (0.01)
2003(1) 1.00 0.01 -- 0.01 (0.01) (0.01)
2002 1.00 0.01 -- 0.01 (0.01) (0.01)
- --------------------------
TREASURY MONEY MARKET FUND
- --------------------------
CLASS I SHARES:
2007(1) $1.00 $ 0.02 $ -- $ 0.02 $(0.02) $(0.02)
2006(1) 1.00 0.04 -- 0.04 (0.04) (0.04)
2005(1) 1.00 0.03 -- 0.03 (0.03) (0.03)
2004(1) 1.00 0.01 -- 0.01 (0.01) (0.01)
2003(1) 1.00 0.01 -- 0.01 (0.01) (0.01)
2002 1.00 0.01 -- 0.01 (0.01) (0.01)
+ 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.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
Bishop Street Funds 44
- --------------------------------------------------------------------------------
RATIO OF RATIO OF EXPENSES RATIO OF NET
NET ASSET NET ASSETS, EXPENSES TO TO AVERAGE INVESTMENT
VALUE, END OF AVERAGE NET ASSETS INCOME
END OF TOTAL PERIOD NET EXCLUDING FEE TO AVERAGE
PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS
--------- ------- --------- ----------- ----------------- ------------
- -----------------
MONEY MARKET FUND
- -----------------
CLASS I SHARES:
2007(1) $1.00 2.43% $168,669 0.50%* 0.86%* 4.85%*
2006(1) 1.00 4.63 159,044 0.50 0.86 4.55
2005(1) 1.00 2.78 170,455 0.50 0.87 2.73
2004(1) 1.00 0.92 167,910 0.50 0.84 0.90
2003(1) 1.00 0.76 182,166 0.50 0.83 0.76
2002 1.00 1.34 238,498 0.50 0.81 1.33
CLASS A SHARES:
2007(1) $1.00 2.30% $ 62,803 0.75%* 1.11%* 4.60%*
2006(1) 1.00 4.37 59,212 0.75 1.11 4.33
2005(1) 1.00 2.53 35,530 0.75 1.12 2.60
2004(1) 1.00 0.67 17,824 0.75 1.09 0.65
2003(1) 1.00 0.50 17,440 0.75 1.08 0.41
2002 1.00 1.08 188 0.75 1.06 1.10
TREASURY MONEY MARKET FUND
CLASS I SHARES:
2007(1) $1.00 2.39% $161,311 0.44%* 0.87%* 4.77%*
2006(1) 1.00 4.51 158,364 0.44 0.87 4.39
2005(1) 1.00 2.62 223,614 0.44 0.87 2.61
2004(1) 1.00 0.91 208,153 0.44 0.84 0.89
2003(1) 1.00 0.74 270,365 0.44 0.83 0.75
2002 1.00 1.29 331,678 0.44 0.83 1.28
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2007 45 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
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 six funds (each a Fund,
collectively the "Funds") which includes the 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.
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 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.
Bishop Street Funds 46
(UNAUDITED)
- --------------------------------------------------------------------------------
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Funds' Board of
Trustees (the "Board"). The Funds' Fair Value Procedures are implemented through
a Fair Value Pricing Committee (the "Committee") designated by the Funds' Board.
Some of the more common reasons that may necessitate that a security be valued
using Fair Value Procedures include: the security's trading has been halted or
suspended; the security has been delisted from a national exchange; the
security's primary trading market is temporarily closed at a time when under
normal conditions it would be open; or the security's primary pricing source is
not able or willing to provide a price. When a security is valued in accordance
with the Fair Value Procedures, the Committee will determine the value after
taking into consideration relevant information reasonably available to the
Committee.
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 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 Funds may be delayed or limited.
June 30, 2007 47 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
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 Strategic Growth and Large Cap Core Equity
Funds declare and pay dividends from any net investment income, if available, on
a quarterly basis. Any netrealized 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, 2007, 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 Statements 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 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
Bishop Street Funds 48
(UNAUDITED)
- --------------------------------------------------------------------------------
are as follows: Strategic Growth Fund (Class I) 1.06%, 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) 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 Inc. ("FFTW") serves as the investment
sub-adviser for the Money Market Funds, pursuant to a sub-adviser agreement
dated December 15, 2006 as approved by shareholders on December 15, 2006. 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.
Lotsoff Capital Management ("Lotsoff") serves as the investment sub-adviser
for the Large Cap Core Equity Fund pursuant to a sub-adviser agreement dated
April 28, 2006. Lotsoff is entitled to receive from the Adviser a fee, computed
daily and paid monthly, at the annual rate of 0.24% of the average daily net
assets of the Large Cap Core Equity Fund up to (but not including) $300 million,
0.225% of the average daily net assets of the Large Cap Core Equity Fund up to
(but not including) $1 billion and 0.20% of the average daily net assets of the
Large Cap Core Equity Fund in excess of $1 billion.
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.
June 30, 2007 49 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
SEI Investments Distribution Co. ("SIDCO"), a wholly owned subsidiary of SEI
Investments Company, acts as the Trust's Distributor pursuant to a distribution
agreement dated June 10, 1999. The Funds have adopted a Distribution Plan (the
"Plan") on behalf of Class A Shares pursuant to Rule 12b-1 under the Investment
Company Act of 1940. The Plan provides that Class A Shares will bear the cost of
their distribution expenses. SIDCO, as compensation for its services under the
Plan, receives a distribution fee, computed daily and payable monthly, of 0.25%
of the average daily net assets attributable to each Fund's Class A Shares.
The Trust has adopted and entered into a shareholder service plan and
agreement with SIDCO. Each Fund pays to SIDCO a shareholder servicing fee at an
annual rate of 0.25% of the average daily net asset value of all shares of each
Fund, which is computed daily and paid monthly. Under the shareholder service
plan, SIDCO may perform, or may compensate other service providers for
performing various shareholder and administrative services. SIDCO may also
retain as profit any difference between the fee it receives and amount it pays
to third parties. For the period, SIDCO paid the entire amount of fees received
under the shareholder service plan to First Hawaiian Bank, the Parent Company of
Bishop Street Capital Management, for shareholder services performed for the
Funds. SIDCO has voluntarily agreed to waive a portion of its 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 Statements of
Operations is net of commissions to the security lending agent.
Bishop Street Funds 50
(UNAUDITED)
- --------------------------------------------------------------------------------
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, 2007 are presented below for the Funds.
Strategic Large High Grade Hawaii
Growth Cap Core Income Municipal
Fund Equity Fund Fund Bond Fund
(000) (000) (000) (000)
----------- -------------- ------------- ------------
Purchases
U.S.
Government
Securities $ -- $ -- $ 7,756 $ --
Other 36,406 30,396 8,740 30,268
Sales and Maturities
U.S.
Government
Securities $ -- $ -- $11,079 $ --
Other 50,033 29,642 12,365 20,600
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 undistributed net investment income/(loss), paid-in
capital or accumulated net realized gain/(loss), as appropriate, in the period
that the differences arise.
June 30, 2007 51 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
Accordingly, the following permanent differences, primarily attributable to
paydown gains and losses have been reclassified:
Undistributed Accumulated
Net Investment Net Realized
Income (Loss) Gain (Loss)
(000) (000)
-------------- ------------
High Grade Income Fund $(1) $1
Theses reclassifications had no effect on net assets or net asset value per
share.
The tax character of dividends and distributions declared during the years
ended December 31, 2006 and December 31, 2005 were as follows:
Ordinary Tax Exempt Long-Term
Income Income Capital Gain Total
(000) (000) (000) (000)
------------ ------------ ------------ -----------
Strategic Growth
Fund
2006 $ 93 $ -- $8,233 $8,326
2005 -- -- 2,019 2,019
Large Cap Core
Equity Fund
2006 $ 318 $ -- $ -- $ 318
High Grade
Income Fund
2006 $5,603 $ -- $ -- $5,603
2005 6,284 -- 379 6,663
Hawaii Municipal
Bond Fund
2006 $ 67 $6,717 $ 525 $7,309
2005 24 7,000 1,411 8,435
Money Market Fund
2006 $9,879 $ -- $ -- $9,879
2005 5,599 -- -- 5,599
Treasury Money
Market Fund
2006 $8,671 $ -- $ -- $8,671
2005 6,178 -- -- 6,178
Bishop Street Funds 52
(UNAUDITED)
- --------------------------------------------------------------------------------
As of December 31, 2006, the components of Distributable Earnings
(Accumulated Losses) on a tax basis were as follows:
Large Cap Treasury
Strategic Core High Grade Hawaii Money Money
Growth Equity Income Municipal Market Market
Fund Fund Fund Bond Fund Fund Fund
(000) (000) (000) (000) (000) (000)
--------- --------- ---------- --------- ------- --------
Undistributed net
investment income $ -- $ 410 $ 492 $ 132 $ 930 $ 647
Undistributed tax
exempt income -- -- -- 557 -- --
Undistributed
long-term
capital gain 862 -- -- 127 -- --
Capital loss
carryforwards -- -- (642) -- (22) (57)
Post-October losses -- -- (83) -- -- --
Other temporary
differences (1) -- (489) (556) (930) (647)
Unrealized
appreciation
(depreciation) 28,164 5,898 (229) 5,177 -- --
------- ------ ----- ------ ----- -----
Total Distributable
Earnings
(Accumulated
Losses) $29,025 $6,308 $(951) $5,437 $ (22) $ (57)
======= ====== ===== ====== ===== =====
Post-October losses represent losses realized on investment transactions from
November 1, 2006 through December 31, 2006 that, in accordance with Federal
income tax regulations, the Funds have elected to defer and treat as having
arisen in the following fiscal year.
June 30, 2007 53 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
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:
High Treasury
Grade Money Money
Income Market Market
Fund Fund Fund
(000) (000) (000)
------ ------ --------
Dec. 2008 $ -- $ 1 $--
Dec. 2009 -- 18 --
Dec. 2012 -- -- 27
Dec. 2013 -- 3 27
Dec. 2014 642 -- 3
---- --- ----
Total $642 $22 $57
==== === ===
During the year ended December 31, 2006, the Money Market Fund utilized
capital loss carryforwards of $838 to offset realized capital gains.
The aggregate gross unrealized appreciation and depreciation of securities
held by the Strategic Growth, Large Cap Core Equity, High Grade Income, and
Hawaii Municipal Bond Funds for Federal income tax purposes at June 30, 2007
were as follows:
Strategic Large Cap High Grade Hawaii
Growth Core Income Municipal
Fund Equity Fund Fund Bond Fund
(000) (000) (000) (000)
-------- ----------- ---------- ---------
Federal Tax Cost $109,718 $106,633 $158,158 $171,021
-------- -------- -------- --------
Gross
Unrealized
Appreciation 31,958 13,541 848 2,492
Gross
Unrealized
Depreciation (873) (1,978) (2,736) (1,532)
-------- -------- -------- --------
Net
Unrealized
Appreciation
(Depreciation) $ 31,085 $ 11,563 $ (1,888) $ 960
======== ======== ======== ======
Bishop Street Funds 54
(UNAUDITED)
- --------------------------------------------------------------------------------
8. RISKS
The Hawaii Municipal Bond Fund invests primarily in debt instruments in the
state of Hawaii. The issuers' ability to meet their obligations may be affected
by economic developments in that state.
In 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. LINE OF CREDIT
The Funds entered into an agreement which enables them to participate in a $2
million unsecured committed revolving line of credit with Union Bank of
California, N.A. (the "Bank"). The proceeds from the borrowings shall be used to
finance the Funds short term general working capital requirements, including the
funding of shareholder redemptions. Interest is charged to the Funds based on
their borrowings at the current reference rate minus 1%. For the six months
ended June 30, 2007, the Funds had no borrowings under the agreement.
10. OTHER
At June 30, 2007, the percentage of total shares outstanding held by
shareholders for each Fund, which comprised an omnibus account that was held on
behalf of several individual shareholders, was as follows:
Number of % of Outstanding
Shareholders Shares
------------ ----------------
Strategic Growth Fund, Class I Shares 1 91.96%
Large Cap Core Equity Fund, Class I Shares 1 94.60
High Grade Income Fund, Class I Shares 2 95.14
Hawaii Municipal Bond Fund, Class I Shares 1 90.76
Hawaii Municipal Bond Fund, Class A Shares 2 27.50
Money Market Fund, Class I Shares 1 96.20
Money Market Fund, Class A Shares 1 99.97
Treasury Money Market Fund, Class I Shares 1 99.81
June 30, 2007 55 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
11. NEW ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB INTERPRETATION NO. 48, "ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in the
course of preparing the Funds' tax returns to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the current year. Adoption of
FIN 48 was required for fiscal years beginning after December 15, 2006 and is to
be applied to all open tax years as of the effective date. Based on its
analysis, management has determined that the adoption of FIN 48 did not have a
material impact to the Fund's financial statements upon adoption. However,
management's conclusions regarding FIN 48 may be subject to review and
adjustment at a later date based on factors including, but not limited to,
further implementation guidance expected from the FASB, and on-going analyses of
and changes to tax laws, regulations and interpretations thereof.
In September 2006, the FASB issued STATEMENT ON FINANCIAL ACCOUNTING
STANDARDS ("SFAS") NO. 157, "FAIR VALUE MEASUREMENTS." This standard establishes
a single authoritative definition of fair value, sets out a framework for
measuring fair value and requires additional disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. The changes to current generally accepted
accounting principles from the application of this Statement relate to the
definition of fair value, the methods used to measure fair value, and the
expanded disclosures about fair value measurements. As of June 30, 2007, the
Funds do not believe the adoption of SFAS No. 157 will impact the amounts
reported in the financial statements; however, additional disclosures may be
required about the inputs used to develop the measurements and the effect of
certain of the measurements reported on the Statements of Changes in net assets
for a fiscal period.
Bishop Street Funds 56
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
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, 2007 57 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Beginning Ending Expenses
Account Account Annualized Paid
Value Value Expense During
1/1/07 6/30/07 Ratios Period*
- -----------------------------------------------------------------------------------------------------------
STRATEGIC GROWTH FUND -- CLASS I
- -----------------------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,084.90 1.06% $5.48
HYPOTHETICAL 5% RETURN 1,000.00 1,019.54 1.06 5.31
- -----------------------------------------------------------------------------------------------------------
LARGE CAP CORE EQUITY FUND -- CLASS I
- -----------------------------------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,077.30 1.05% $5.41
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 $1,006.50 0.76% $3.78
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 $ 996.40 0.55% $2.72
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 $ 996.10 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 $1,024.30 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 $1,023.00 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 $1,023.90 0.44% $2.21
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).
Bishop Street Funds 58
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
The continuance 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 specifically approved at least annually 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 (the
"Independent Trustees"), as defined in the Investment Company Act of 1940, 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 the meeting, the Board
requests and reviews a wide variety of information from the Adviser and BNP PAM.
The Trustees use this information, as well as information that the Adviser, BNP
PAM, and other service providers may submit to the Board, to help them decide
whether to renew the agreements for another year.
In preparation for a meeting held on February 20-21, 2007, 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 brokerage practices (including any soft dollar arrangements) and
investment strategies; (e) the level of the advisory fees that the Adviser and
BNP PAM charge the Funds compared with the fees they charge to comparable mutual
funds or accounts; (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 and
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
June 30, 2007 59 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
information presented by these and other service providers at meetings held
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 evaluation of the information it
received, the Board, including the Independent Trustees, approved the agreements
and the selection of the Adviser and BNP PAM, and determined that the
compensation under the agreements is fair and reasonable in light of the
services to be performed. The Board considered the following specific factors,
none of which was controlling, and made the following conclusions:
NATURE, EXTENT, AND QUALITY OF SERVICES
The Board received and considered information regarding the nature, extent, and
quality of services to be provided to the Funds by the Adviser 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 and
Bishop Street Funds 60
(UNAUDITED)
- --------------------------------------------------------------------------------
BNP PAM's explanations regarding specific performance issues. The Board
concluded that, within the context of its full deliberations, the performance of
the Funds, 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 other
service providers' voluntary waiver and/or reimbursement of fees and expenses,
where applicable, to prevent total expenses from exceeding a specified amount
and that, due to these waivers and/or reimbursements, net operating expenses
have been maintained at competitive levels. The Board concluded that, within the
context of its full deliberations, the expenses of the Funds are reasonable and
supported the approval of the agreements.
PROFITABILITY
The Board reviewed information about the profitability of the Funds to the
Adviser and BNP PAM and considered whether the level of profitability was
reasonable and justified in light of the quality of the services rendered to the
Funds. The Board concluded that, within the context of its full deliberations,
the profitability of the Adviser and BNP PAM is within the range the Board
considered reasonable.
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 and/or reimbursements by the
Adviser and other service providers. 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, 2007 61 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
- --------------------------------------------------------------------------------
SHAREHOLDER VOTING RESULTS
At a special meeting held on December 15, 2006, the shareholders of the Bishop
Street Money Market Fund and Bishop Street Treasury Money Market Fund voted to
approve a new investment sub-advisory agreement between Bishop Street Funds, on
behalf of the Funds, Bishop Street Capital Management, and Fischer, Francis,
Trees & Watts, Inc.
The results of the voting were as follows:
% OF % OF
SHARES SHARES SHARES
VOTED VOTED OUTSTANDING
------------- --------- -----------
1. BISHOP STREET MONEY MARKET FUND
FOR 118,967,070 99.63% 51.44%
AGAINST 396,375 0.33% 0.17%
ABSTAIN 41,623 0.04% 0.01%
------------- --------- --------
TOTAL 119,405,068 100.00% 51.62%
2. BISHOP STREET TREASURY MONEY MARKET FUND
FOR 103,524,370 100.00% 55.69%
AGAINST -- -- --
ABSTAIN 2,016 0.00% 0.00%
------------- --------- --------
TOTAL 103,526,386 100.00% 55.69%
Bishop Street Funds 62
NOTES
NOTES
[GRAPHIC OMITTED]
INVESTMENT ADVISER
BISHOP STREET CAPITAL MANAGEMENT
HONOLULU, HI 96813
ADMINISTRATOR
SEI INVESTMENTS GLOBAL FUNDS SERVICES
OAKS, PA 19456
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
OAKS, PA 19456
TRANSFER AGENT
DST SYSTEMS, INC.
KANSAS CITY, MO 64121
CUSTODIAN
UNION BANK OF CALIFORNIA, N.A.
SAN FRANCISCO, CA 94101
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS LLP
PHILADELPHIA, PA 19103
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PRICEWATERHOUSECOOPERS LLP
PHILADELPHIA, PA 19103
[BISHOP STREET FUNDS LOGO OMITTED]
FOR MORE INFORMATION ABOUT BISHOP STREET FUNDS, CALL 1-800-262-9565
OR YOUR INVESTMENT SPECIALIST
VISIT US ONLINE AT WWW.BISHOPSTREETFUNDS.COM
[BISHOP STREET FUNDS LOGO OMITTED] BISHOP STREET FUNDS
P.O. BOX 3708
HONOLULU, HI 96811
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE
GENERAL INFORMATION OF BISHOP STREET FUNDS' SHAREHOLDERS. THIS REPORT IS NOT
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
SHARES OF BISHOP STREET FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY FIRST HAWAIIAN BANK OR ANY OF ITS AFFILIATES. SUCH SHARES ARE ALSO NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENT IN SHARES OF MUTUAL FUNDS
INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE BISHOP STREET FUNDS
ARE DISTRIBUTED BY SEI INVESTMENTS DISTRIBUTION CO., WHICH IS NOT AFFILIATED
WITH FIRST HAWAIIAN BANK, BANK OF THE WEST OR BANCWEST CORPORATION. BANCWEST
CORPORATION IS A WHOLLY-OWNED SUBSIDIARY OF BNP PARIBAS.
BSF-SA-004-1300
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.
Schedule of Investments is included as part of the Report to Shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
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/ James F. Volk
------------------------
James F. Volk, President
Date: August 20, 2007
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/ James F. Volk
------------------------
James F. Volk, President
Date: August 20, 2007
By (Signature and Title)* /s/ Michael Lawson
------------------------
Michael Lawson
Controller & CFO
Date: August 20, 2007
* Print the name and title of each signing officer under his or her signature.