UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM N-CSRS
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-08572
BISHOP STREET FUNDS
(Exact name of registrant as specified in charter)
--------
101 Federal Street
Boston, MA 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, 2008
DATE OF REPORTING PERIOD: JUNE 30, 2008
ITEM 1. REPORTS TO STOCKHOLDERS.
(GRAPHIC)
BISHOP STREET
FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 2008
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)
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.
BISHOP STREET
TABLE OF CONTENTS
FUNDS
LETTER TO SHAREHOLDERS .................................................... 2
SCHEDULES OF INVESTMENTS
Strategic Growth Fund .................................................. 4
Large Cap Core Equity Fund ............................................. 7
High Grade Income Fund ................................................. 13
Hawaii Municipal Bond Fund ............................................. 22
Money Market Fund ...................................................... 32
Treasury Money Market Fund ............................................. 35
STATEMENTS OF ASSETS AND LIABILITIES ...................................... 36
STATEMENTS OF OPERATIONS .................................................. 38
STATEMENTS OF CHANGES IN NET ASSETS ....................................... 40
FINANCIAL HIGHLIGHTS ...................................................... 44
NOTES TO FINANCIAL STATEMENTS ............................................. 48
DISCLOSURE OF FUND EXPENSES ............................................... 59
APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS ............... 61
1
BISHOP STREET
LETTER TO SHAREHOLDERS
FUNDS
(PHOTO OF MICHAEL K. HIRAI)
Dear Shareholder:
The first six months of 2008 have proven to be an extraordinary period in the
financial markets. The continuation of the credit and liquidity squeeze, weak
consumer spending and the prospect of a recession have all weighed heavily on
the global equity markets. Investment grade bonds and money markets provided
some comfort and protection from the storm, but the rout has continued and has
threatened the safety and soundness of our banking system.
ECONOMIC WORRIES WEIGHED HEAVILY ON THE U.S. AND GLOBAL EQUITY MARKETS
For the first half of the year, the broad U.S. stock market declined 11.9% amid
looming fears of an economic recession. The housing market continued its slide
putting further pressure on both lenders and borrowers. Home prices have plunged
18% from their recent highs and fell almost 8% during the first quarter 2008
alone -- the biggest quarterly drop in twelve years. International stocks
managed to outperform the U.S. markets but nearly all global equity markets
registered negative returns.
A FLIGHT TO SAFETY IN THE BOND MARKET
Year to date, bonds have fared much better than stocks though their performance
has not been consistent across all sectors. After a strong showing in the first
three months of the year, the broad taxable bond market has returned just +1.1%
so far in 2008. Much of that return came from U.S. Treasuries as credit worries
in the financial sector continued to weigh heavily on the lending markets.
The Federal Reserve responded decisively to the weakness in the credit markets
and the broad economy by slashing its target rate five times so far this year,
leaving the federal funds rate at 2% -- the lowest level since December 2004.
Bishop Street Funds 2
(BISHOP STREET FUNDS LOGO)
BALANCE AND FOCUS ARE THE KEYS TO SUCCESSFUL LONG-TERM INVESTING
The past six months have been a disappointment to investors, but we wish to
remind our shareholders to keep a steady hand and not lose focus on their
long-term objectives. As always, the key to investment success lies in holding a
diversified mix of stocks, bonds, and money market funds that is consistent with
your long-term goals, time horizon, and risk tolerance.
The Bishop Street Funds offers you selected stock, bond and money market
alternatives that can be used as an integral part of your overall investment
program. Many of the stock fund holdings in the Strategic Growth Fund and the
Large Cap Core Fund have attractive earnings and income profiles adding to their
good long-term growth potential. Our High Grade Income Fund and Hawaii Municipal
Bond Fund hold high-quality fixed income securities that provide you with stable
and predictable income cash flows and our prime Money Market Fund and Treasury
Money Market Fund provide stable values and safety.
Balance and focus will help you achieve your long-term investment goals.
Thank you for your continued confidence in the Bishop Street Funds.
Sincerely,
/s/ Michael K. Hirai
Michael K. Hirai, CFA, CPA
President and Director
Bishop Street Capital Management
July 22, 2008
June 30, 2008 3 www.bishopstreetfunds.com
Strategic Growth Fund (UNAUDITED)
TOP TEN EQUITY HOLDINGS+
Percentage of
Investments
-------------
1. Williams 2.3%
2. Baxter International 2.3%
3. Transocean 2.3%
4. McDermott International 2.3%
5. Accenture Ltd., Cl A 2.2%
6. Gilead Sciences 2.2%
7. Danaher 2.1%
8. Thermo Fisher Scientific 2.1%
9. National Oilwell Varco 2.1%
10. Molson Coors Brewing, Cl B 2.1%
SECTOR WEIGHTINGS+
(BAR CHART)
Information Technology 23.2%
Health Care 18.7%
Industrials 18.1%
Consumer Dicretionary 13.5%
Energy 10.8%
Financials 7.6%
Consumer Staples 5.8%
Materials 1.9%
Short-Term Investments 0.4%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Market
Value
Shares (000)
- ------ --------
COMMON STOCK -- 99.9%
CONSUMER DISCRETIONARY -- 13.5%
44,400 Apollo Group, Cl A* $ 1,965
61,800 Coach* 1,785
48,000 GameStop, Cl A* 1,939
38,400 McDonald's 2,159
32,100 Nike, Cl B 1,913
65,100 TJX 2,049
115,440 Wyndham Worldwide 2,068
--------
13,878
--------
Bishop Street Funds 4
Strategic Growth Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
- ------ --------
CONSUMER STAPLES -- 5.9%
53,313 CVS $ 2,110
60,100 Hansen Natural* 1,732
39,800 Molson Coors Brewing, Cl B 2,162
--------
6,004
--------
ENERGY -- 10.8%
24,400 National Oilwell Varco* 2,165
23,600 Occidental Petroleum 2,121
36,700 Suncor Energy 2,133
15,221 Transocean 2,319
58,700 Williams 2,366
--------
11,104
--------
FINANCIALS -- 7.7%
36,600 ACE 2,016
65,600 Nasdaq Stock Market* 1,742
23,700 Nymex Holdings 2,002
32,900 State Street 2,105
--------
7,865
--------
HEALTH CARE -- 18.7%
51,400 Aetna 2,083
36,600 Baxter International 2,340
25,100 Becton Dickinson 2,041
59,900 Cigna 2,120
32,600 Express Scripts* 2,045
28,400 Genzyme* 2,045
42,300 Gilead Sciences* 2,240
108,200 Schering-Plough 2,130
39,100 Thermo Fisher Scientific* 2,179
--------
19,223
--------
INDUSTRIALS -- 18.1%
28,300 Danaher 2,187
33,600 ITT 2,128
20,300 Lockheed Martin 2,003
34,300 Manpower 1,998
37,300 McDermott International* 2,308
19,600 Precision Castparts 1,889
49,600 Tyco International 1,986
32,200 United Technologies 1,987
25,700 W.W. Grainger 2,102
--------
18,588
--------
June 30, 2008 5 www.bishopstreetfunds.com
Strategic Growth Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
- ------ --------
INFORMATION TECHNOLOGY -- 23.2%
56,500 Accenture Ltd., Cl A $ 2,301
56,700 Akamai Technologies* 1,973
79,900 Corning 1,842
3,800 Google, Cl A* 2,000
46,700 Hewlett-Packard 2,065
29,100 MEMC Electronic Materials* 1,791
68,300 Microsoft 1,879
95,700 Oracle* 2,010
43,700 Qualcomm 1,939
94,100 Red Hat* 1,947
101,700 Symantec* 1,968
60,600 Western Digital* 2,092
--------
23,807
--------
MATERIALS -- 2.0%
15,800 Monsanto 1,998
--------
TOTAL COMMON STOCK (Cost $98,987) 102,467
--------
CASH EQUIVALENTS (A) -- 0.3%
180,175 Dreyfus Cash Management Fund, Institutional Shares,
2.660% 180
180,175 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 2.600% 180
--------
TOTAL CASH EQUIVALENTS (Cost $360) 360
--------
TOTAL INVESTMENTS (Cost $99,347) -- 100.2% $102,827
========
PERCENTAGES ARE BASED ON NET ASSETS OF $102,586 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
(A) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2008.
CL -- CLASS
LTD. -- LIMITED
COST FIGURES ARE SHOWN IN THOUSANDS.
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. Chevron 2.6%
2. Microsoft 2.4%
3. Johnson & Johnson 2.2%
4. International Business Machines 1.8%
5. AT&T 1.8%
6. Apple 1.8%
7. Procter & Gamble 1.7%
8. JPMorgan Chase 1.7%
9. Cisco Systems 1.7%
10. Wal-Mart Stores 1.6%
SECTOR WEIGHTINGS+
(BAR CHART)
Information Technology 17.8%
Energy 17.2%
Financials 13.9%
Health Care 13.2%
Industrials 12.6%
Consumer Staples 9.0%
Consumer Discretionary 8.2%
Materials 3.8%
Telecommunications 2.9%
Utilities 1.1%
Short-Term Investments 0.3%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. EXCLUDES SECURITIES PURCHASED
WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING.
SCHEDULE OF INVESTMENTS
Market
Value
Shares (000)
- ------ --------
COMMON STOCK -- 99.5%
CONSUMER DISCRETIONARY -- 8.3%
14,310 Best Buy $ 567
9,600 Carnival (A) 316
16,510 Coach* 477
25,920 Comcast, Cl A 492
23,200 Expedia* 426
5,400 Garmin (A) 231
8,400 International Game Technology 210
15,700 Johnson Controls 450
June 30, 2008 7 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(continued)
Market
Value
Shares (000)
- ------ --------
CONSUMER DISCRETIONARY -- (CONTINUED)
9,000 Kohl's* $ 360
14,820 Liberty Media-Entertainment* 359
19,140 Lowe's 397
30,900 News, Cl A 465
9,100 Omnicom Group 408
5,500 Sherwin-Williams 253
19,100 Staples 454
25,720 Time Warner 381
5,600 VF 398
9,160 Viacom, Cl B* 280
--------
6,924
--------
CONSUMER STAPLES -- 8.9%
21,390 Archer-Daniels-Midland 722
6,810 Costco Wholesale 478
14,910 PepsiCo 948
16,910 Philip Morris International 835
23,650 Procter & Gamble 1,438
16,820 SYSCO 463
24,650 Tyson Foods, Cl A 368
26,730 Walgreen 869
24,030 Wal-Mart Stores 1,351
--------
7,472
--------
ENERGY -- 17.1%
9,670 Apache 1,344
12,100 Cameron International* 670
6,500 Canadian Natural Resources 652
17,700 Chesapeake Energy (A) 1,167
21,960 Chevron 2,177
8,700 Devon Energy 1,045
35,300 El Paso 767
19,600 Halliburton 1,040
19,720 Marathon Oil 1,023
10,120 National Oilwell Varco* 898
16,000 Nexen 636
11,600 Peabody Energy (A) 1,021
33,100 Talisman Energy 733
22,600 Weatherford International* 1,121
--------
14,294
--------
Bishop Street Funds 8
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(continued)
Market
Value
Shares (000)
- ------ --------
FINANCIALS -- 13.8%
11,970 ACE $ 659
10,400 Allstate 474
43,870 American International Group 1,161
34,290 Bank of America 819
11,300 Bank of New York Mellon 427
15,680 BB&T 357
11,160 Capital One Financial 424
5,200 Chubb 255
60,810 Citigroup 1,019
1,200 CME Group, Cl A 460
8,930 Franklin Resources 818
19,120 Genworth Financial, Cl A 341
2,050 Goldman Sachs Group 359
9,770 Hartford Financial Services Group 631
30,800 Host Hotels & Resorts+ 420
41,820 JPMorgan Chase 1,435
4,030 Legg Mason 176
4,110 Lehman Brothers Holdings (A) 81
16,320 Morgan Stanley 589
3,900 State Street 250
9,040 Travelers 392
--------
11,547
--------
HEALTH CARE -- 13.1%
11,400 Abbott Laboratories 604
7,300 Allergan 380
8,400 Amgen* 396
4,850 Biogen Idec* 271
8,700 Celgene* 556
3,600 Cephalon* (A) 240
13,640 Coventry Health Care* 415
9,600 Forest Laboratories* 334
7,660 Genentech* 581
10,190 Genzyme* 734
6,800 Gilead Sciences* 360
28,210 Johnson & Johnson 1,815
7,520 Laboratory Corp of America Holdings* 524
8,200 Medtronic 424
19,700 Merck 743
35,260 Schering-Plough 694
7,700 St. Jude Medical* 315
23,370 UnitedHealth Group 613
June 30, 2008 9 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
- ------ --------
HEALTH CARE -- (CONTINUED)
8,910 Wyeth $ 427
7,970 Zimmer Holdings* 542
--------
10,968
--------
INDUSTRIALS -- 12.7%
12,600 Boeing 828
10,420 Caterpillar 769
16,720 Dover 809
11,220 General Dynamics 945
17,200 General Electric 459
19,750 Illinois Tool Works 938
22,660 Ingersoll-Rand, Cl A 848
8,030 L-3 Communications Holdings 730
18,740 Norfolk Southern 1,174
12,235 Parker Hannifin 873
9,500 Precision Castparts 915
8,900 Questar 632
10,400 United Technologies 642
--------
10,562
--------
INFORMATION TECHNOLOGY -- 17.8%
7,400 Accenture Ltd., Cl A 301
13,620 Adobe Systems* 537
10,900 Akamai Technologies* 379
8,840 Apple* 1,480
18,200 Applied Materials 347
21,000 Broadcom, Cl A* 573
61,510 Cisco Systems* 1,431
29,360 Corning 677
38,050 EMC* 559
2,390 Google, Cl A* 1,258
29,600 Intel 636
12,890 International Business Machines 1,528
7,930 MEMC Electronic Materials* 488
74,080 Microsoft 2,038
12,845 Nvidia* 240
53,840 Oracle* 1,131
17,900 Qualcomm 794
22,100 Symantec* 428
--------
14,825
--------
Bishop Street Funds 10
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Shares/Face Value
Amount (000) (000)
- ------------ --------
MATERIALS -- 3.8%
8,290 Alcoa $ 295
8,200 Dow Chemical 286
3,200 Eastman Chemical 220
13,380 EI Du Pont de Nemours 574
7,860 Freeport-McMoRan Copper & Gold, Cl B 921
2,100 Monsanto 266
13,590 Teck Cominco Ltd., Cl B (A) 652
--------
3,214
--------
TELECOMMUNICATION SERVICES -- 2.9%
45,150 AT&T 1,521
6,500 NII Holdings* 309
16,020 Verizon Communications 567
--------
2,397
--------
UTILITIES -- 1.1%
10,090 Exelon 908
--------
TOTAL COMMON STOCK (Cost $88,493) 83,111
--------
MASTER NOTES (B) -- 1.0%
$ 455 American Honda Finance
2.796%, 07/11/08 455
Bear Stearns
341 2.700%, 09/11/08 341
--------
TOTAL MASTER NOTES (Cost $796) 796
--------
CASH EQUIVALENTS (C) -- 1.3%
272,670 AIM Liquid Asset Fund, 2.593% (B) 273
113,074 Dreyfus Cash Management Fund, Institutional Shares,
2.660% 113
545,340 Dreyfus Institutional Cash Advantage Fund, 2.656%
(B) 545
113,074 Fidelity Institutional Money Market Portfolio,
2.600% Institutional Shares, 113
--------
TOTAL CASH EQUIVALENTS (Cost $1,044) 1,044
--------
June 30, 2008 11 www.bishopstreetfunds.com
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
REPURCHASE AGREEMENT (B) -- 2.0%
$ 1,681 Lehman Brothers 2.580%, dated 06/30/08, to be
repurchased on 07/01/08, repurchase price
$1,681,579 (collateralized by various
mortgage-backed securities ranging in par value
$851,640-$6,801,485, 0.000%-6.500%,
01/25/09-01/15/49, with a total market value of
$1,849,618)
TOTAL REPURCHASE AGREEMENT (Cost $1,681) $ 1,681
--------
TOTAL INVESTMENTS (Cost $92,014) -- 103.8% $ 86,632
========
PERCENTAGES ARE BASED ON NET ASSETS OF $83,492 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
(A) THIS SECURITY OR PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2008. THE
TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2008 WAS $3,208
($ THOUSANDS).
(B) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2008,
WAS $3,295 ($ THOUSANDS).
(C) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2008.
+ -- REAL ESTATE INVESTMENT TRUST
CL -- CLASS
LTD. -- LIMITED
COST FIGURES ARE SHOWN IN THOUSANDS.
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 4.2%
2. U.S. Treasury Bond 7.500% 11/15/16 2.6%
3. U.S. Treasury Bond 6.250% 08/15/23 2.5%
4. U.S. Treasury Bond 4.500% 02/15/36 2.4%
5. FNMA MTN 7.250% 01/15/10 2.0%
6. General Electric Capital MTN, Ser A 5.450% 01/15/13 1.8%
7. Abbott Laboratories 5.600% 05/15/11 1.7%
8. U.S. Treasury Bond 6.375% 08/15/27 1.6%
9. U.S. Treasury Bond 7.250% 08/15/22 1.5%
10. FMLMC MTN 4.250% 05/22/13 1.4%
SECTOR WEIGHTINGS+
(BAR CHART)
U.S. Treasury Obligations 25.1%
U.S. Government Agency Obligations 21.6%
Financials 11.2%
Consumer Discretionary 9.8%
Energy 5.5%
Health Care 5.2%
Industrials 4.4%
Information Technology 4.3%
U.S. Government Mortgage-Backed Obligations 4.3%
Utilities 2.2%
Materials 2.2%
Municipal Bonds 2.0%
Telecommunications 1.0%
Asset-Backed Security 0.8%
Short-Term Investments 0.4%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. EXCLUDES SECURITIES PURCHASED
WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING.
SCHEDULE OF INVESTMENTS
Face Market
Amount Value
(000) (000)
- ------ --------
CORPORATE OBLIGATIONS -- 45.2%
AEROSPACE & DEFENSE -- 3.1%
Emerson Electric
$ 500 5.250%, 10/15/18 $ 493
General Dynamics
1,000 4.500%, 08/15/10 1,021
Rockwell Automation
1,200 6.700%, 01/15/28 1,290
United Technologies
1,200 6.350%, 03/01/11 1,263
--------
4,067
--------
June 30, 2008 13 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
AUTO FINANCE -- 1.2%
Toyota Motor Credit
$ 1,500 5.450%, 05/18/11 $ 1,564
--------
AUTOMOTIVE -- 0.5%
DaimlerChrysler NA Holding
700 8.000%, 06/15/10 744
--------
BANKS -- 3.0%
American Express Bank
1,400 5.500%, 04/16/13 1,369
Bank of Oklahoma (B)
500 5.750%, 05/15/17 495
BHP Billiton Finance
850 5.250%, 12/15/15 823
JPMorgan Chase
1,400 5.875%, 06/13/16 1,367
--------
4,054
--------
BEVERAGES -- 1.0%
PepsiCo
1,350 4.650%, 02/15/13 1,370
--------
BROADCASTING & CABLE -- 1.7%
Comcast Cable Holdings
1,200 7.875%, 08/01/13 1,288
Turner Broadcasting System
975 8.375%, 07/01/13 1,048
--------
2,336
--------
CHEMICALS -- 1.2%
Monsanto
1,400 7.375%, 08/15/12 1,542
--------
COMPUTER HARDWARE -- 4.3%
Cisco Systems
1,600 5.500%, 02/22/16 1,614
Hewlett-Packard
1,200 4.500%, 03/01/13 1,188
IBM
1,400 8.375%, 11/01/19 1,699
Oracle
1,200 5.250%, 01/15/16 1,181
--------
5,682
--------
Bishop Street Funds 14
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
CONSUMER DISCRETIONARY -- 0.8%
Costco Wholesale
$ 1,000 5.500%, 03/15/17 $ 1,015
--------
FINANCIALS -- 4.9%
Bear Stearns
1,400 7.250%, 02/01/18 1,461
Boeing Capital
1,400 6.500%, 02/15/12 1,486
General Electric Capital MTN, Ser A
2,350 5.450%, 01/15/13 2,399
Jefferies Group
675 6.250%, 01/15/36 493
John Deere Capital
550 7.000%, 03/15/12 591
--------
6,430
--------
FOOD & BEVERAGE -- 1.9%
ConAgra Foods
1,475 7.875%, 09/15/10 1,559
General Mills
1,000 6.000%, 02/15/12 1,029
--------
2,588
--------
FOREIGN GOVERNMENTS -- 1.9%
Province of Ontario Canada (F)
1,500 2.750%, 02/22/11 1,467
Republic of Italy
1,000 5.375%, 06/12/17 1,058
--------
2,525
--------
GENERAL MERCHANDISE -- 0.4%
Kohl's
500 6.300%, 03/01/11 506
--------
HEALTH CARE -- 1.2%
Johnson & Johnson
1,400 6.950%, 09/01/29 1,631
--------
HOUSEHOLD PRODUCTS -- 1.1%
Procter & Gamble
1,200 8.000%, 10/26/29 1,509
--------
June 30, 2008 15 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
INDEPENDENT POWER PRODUCERS & ENERGY TRADER -- 0.4%
Constellation Energy Group
$ 500 7.000%, 04/01/12 $ 519
--------
INDUSTRIALS -- 0.7%
Burlington Northern Santa Fe
320 6.125%, 03/15/09 323
650 5.650%, 05/01/17 635
--------
958
--------
MEDIA -- 1.0%
Walt Disney MTN
1,200 6.200%, 06/20/14 1,294
--------
OIL & GAS - EQUIPMENT/SERVICES -- 1.1%
Baker Hughes
1,400 6.000%, 02/15/09 1,415
--------
OIL & GAS - EXPLORATION/PRODUCTION -- 1.8%
Anadarko Petroleum
1,250 7.200%, 03/15/29 1,305
Occidental Petroleum
1,000 6.750%, 01/15/12 1,074
--------
2,379
--------
OIL & GAS - INTEGRATED -- 2.2%
Atlantic Richfield
1,385 9.125%, 03/01/11 1,553
ConocoPhillips
1,400 4.750%, 10/15/12 1,406
--------
2,959
--------
PHARMACEUTICALS -- 3.9%
Abbott Laboratories
2,100 5.600%, 05/15/11 2,196
Bristol-Myers Squibb
625 5.450%, 05/01/18 616
Genentech
1,200 4.750%, 07/15/15 1,190
Teva Pharmaceutical Finance LLC
1,200 5.550%, 02/01/16 1,173
--------
5,175
--------
RETAIL - FOOD -- 1.1%
McDonald's MTN
1,400 6.000%, 04/15/11 1,460
--------
Bishop Street Funds 16
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
SEMI-CONDUCTORS -- 1.0%
Duke Energy
$ 1,275 4.200%, 10/01/08 $ 1,277
--------
STEEL & STEEL WORKS -- 1.0%
Nucor
1,300 4.875%, 10/01/12 1,292
--------
TELECOMMUNICATIONS -- 1.0%
AT&T Wireless Services
1,200 8.125%, 05/01/12 1,314
--------
TRANSPORTATION SERVICES -- 0.6%
FedEx
800 7.250%, 02/15/11 833
--------
UTILITIES -- 1.2%
Hydro-Quebec
1,325 7.500%, 04/01/16 1,570
--------
TOTAL CORPORATE OBLIGATIONS (Cost $60,410) 60,008
--------
U.S. TREASURY OBLIGATIONS -- 24.8%
U.S. Treasury Bonds
2,750 7.500%, 11/15/16 (F) 3,435
4,500 7.250%, 05/15/16 (F) 5,529
1,500 7.250%, 08/15/22 (F) 1,933
1,700 6.375%, 08/15/27 (F) 2,083
2,800 6.250%, 08/15/23 (F) 3,331
800 6.250%, 05/15/30 985
1,000 6.000%, 02/15/26 (F) 1,171
1,300 5.250%, 11/15/28 (F) 1,409
1,000 5.000%, 05/15/37 1,075
400 4.750%, 02/15/37 413
3,100 4.500%, 02/15/36 (F) 3,078
1,400 4.375%, 02/15/38 (F) 1,365
U.S. Treasury Notes
700 4.750%, 08/15/17 742
1,250 4.250%, 11/15/14 (F) 1,305
1,400 4.250%, 08/15/15 (F) 1,455
1,000 4.250%, 11/15/17 (F) 1,021
1,325 4.125%, 08/31/12 (F) 1,371
1,200 4.000%, 02/15/14 (F) 1,238
--------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $30,828) 32,939
--------
June 30, 2008 17 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 21.3%
FHLB
$ 1,000 6.000%, 07/10/13 $ 1,028
725 5.600%, 06/28/11 766
450 5.375%, 06/10/11 472
1,000 4.875%, 12/14/12 (F) 1,034
1,000 3.875%, 07/24/09 1,010
FHLB, Ser GH10
200 6.875%, 08/13/10 215
FHLB, Ser KU10
1,300 4.750%, 08/13/10 1,338
FHLB, Ser RH10
1,750 3.875%, 02/12/10 1,773
FHLB, Ser VB15
1,400 5.000%, 12/21/15 (F) 1,442
FHLMC
875 8.250%, 06/01/16 1,065
1,000 5.875%, 05/23/16 1,048
1,000 5.000%, 01/30/14 1,033
1,400 4.375%, 03/01/10 1,429
1,100 4.000%, 06/12/13 1,093
FHLMC MTN
1,400 5.500%, 03/22/22 1,410
1,000 5.375%, 01/09/14 1,008
1,000 5.000%, 10/27/14 1,034
200 5.000%, 06/18/18 (C) 200
1,800 4.250%, 05/22/13 1,809
FNMA
1,000 6.410%, 11/13/12 1,093
1,500 5.750%, 05/11/22 1,527
1,400 5.550%, 02/16/17 1,432
500 5.000%, 03/02/15 514
1,000 4.000%, 04/30/18 (C) 993
FNMA MTN
2,400 7.250%, 01/15/10 2,553
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $27,988) 28,319
--------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 4.2%
FHLMC REMIC, Ser R010, Cl AB
1,022 5.500%, 12/15/19 1,031
FHLMC, Ser 2844, Cl VB
188 5.500%, 12/15/19 187
Bishop Street Funds 18
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
FHLMC, Ser 3070, Cl DH
$ 431 5.500%, 11/15/35 $ 431
FHLMC, Ser 3196, Cl CB
668 5.250%, 08/15/11 670
FNMA
741 3.500%, 08/01/10 738
FNMA REMIC, Ser B1, Cl BE
1,146 5.450%, 12/25/20 1,159
GNMA, Ser 7
1,400 5.500%, 11/16/31 1,416
--------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $5,574) 5,632
--------
MASTER NOTES (D) -- 6.0%
American Honda Finance
4,546 2.796%, 07/11/08 4,546
Bear Stearns
3,409 2.700%, 09/11/08 3,409
--------
TOTAL MASTER NOTES (Cost $7,955) 7,955
--------
MUNICIPAL BONDS -- 2.1%
1,000 Honolulu Hawaii City & County, Ser B, GO, FGIC
Insured, Pre-Refunded @ 101 (A)
5.125%, 07/01/09 1,043
500 Michigan Municipal Bond Authority, RB (B)
2.950%, 08/14/08 500
1,250 New Jersey State, Turnpike Authority, Ser B, RB,
AMBAC Insured, Pre-Refunded @ 100 (A)
4.252%, 01/01/15 1,206
--------
TOTAL MUNICIPAL BONDS (Cost $2,805) 2,749
--------
ASSET-BACKED SECURITY (B) (G) -- 0.7%
1,000 Citibank Omni Master Trust, Ser 2007, Cl A9
3.698%, 08/21/08 1,009
--------
TOTAL ASSET-BACKED SECURITY (Cost $1,000) 1,009
--------
June 30, 2008 19 www.bishopstreetfunds.com
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Shares/Face Value
Amount (000) (000)
- ------------ --------
CASH EQUIVALENTS (E) -- 6.6%
2,727,330 AIM Liquid Asset Fund, 2.593% (D) $ 2,727
278,220 Dreyfus Cash Management Fund, Institutional
Shares, 2.660% 278
5,454,660 Dreyfus Institutional Cash Advantage Fund,
2.656% (D) 5,455
278,220 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 2.600% 278
--------
TOTAL CASH EQUIVALENTS (Cost $8,738) 8,738
--------
REPURCHASE AGREEMENT (D) -- 12.7%
$ 16,818 Lehman Brothers 2.580%, dated 06/30/08, to be
repurchased on 07/01/08, repurchase price
$16,819,644 (collateralized by various
mortgage-backed obligations, ranging in par value
$8,518,360 - $68,030,515, 0.000% - 6.500%,
01/25/09-01/15/49, with a total market value
of $18,500,444) 16,818
--------
TOTAL REPURCHASE AGREEMENT (Cost $16,818) 16,818
--------
TOTAL INVESTMENTS (Cost $162,116) -- 123.6% $164,167
========
PERCENTAGES ARE BASED ON NET ASSETS OF $132,788 ($ THOUSANDS).
(A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
(B) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS
IS THE RATE IN EFFECT ON JUNE 30, 2008. THE MATURITY DATE SHOWN IS THE NEXT
SCHEDULED RESET DATE.
(C) STEP BOND -- COUPON RATE INCREASES IN INCREMENTS TO MATURITY. RATE
DISCLOSED IS THE RATE IN EFFECT AS OF JUNE 30, 2008.
(D) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2008
WAS $32,955 ($ THOUSANDS).
(E) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2008.
(F) THIS SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2008.
THE TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2008 WAS $32,452
($ THOUSANDS).
(G) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONS. AT JUNE 30, 2008, THESE
SECURITIES AMOUNTED TO $1,009 ($ THOUSANDS), REPRESENTING 0.7% OF THE NET
ASSETS OF THE FUND.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CL -- CLASS
FGIC -- FINANCIAL GUARANTEE INSURANCE CORPORATION
FHLB -- FEDERAL
HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
Bishop Street Funds 20
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
LLC -- LIMITED LIABILITY COMPANY
MTN -- MEDIUM TERM NOTE
NA -- NORTH AMERICA
RB -- REVENUE BOND
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2008 21 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
TOP TEN HOLDINGS+
Percentage
Coupon Maturity of
Rate Date Investments
------ -------- -----------
1. Honolulu Hawaii City & County GO 5.000% 07/01/17 1.9%
2. Hawaii State, Department of Budget & Finance RB 5.650% 10/01/27 1.8%
3. Honolulu City & County GO 5.000% 07/01/21 1.8%
4. Honolulu City & County, 1st Board Resolution RB 5.000% 07/01/31 1.7%
5. Hawaii State GO 5.250% 05/01/15 1.6%
6. Phoenix Civic Improvement, Senior Lien RB 5.000% 07/01/21 1.5%
7. Hawaii State Highway RB 5.000% 07/01/16 1.4%
8. Honolulu City & County GO 5.125% 07/01/15 1.5%
9. Hawaii State GO 6.500% 12/01/13 1.4%
10. Honolulu City & County, Board of Water Supply RB 4.750% 07/01/17 1.3%
SECTOR WEIGHTINGS+
(BAR CHART)
General Obligations 37.8%
Transportation 12.4%
Housing 7.1%
Facilities 6.8%
Airport 6.4%
Water 6.1%
Pollution Control 5.2%
Power 4.3%
General Revenue 4.2%
Utilities 2.8%
Development 2.6%
Single-Family Housing 1.8%
Medical 1.5%
School District 0.5%
Short-Term Investments 0.4%
Multi-Family Housing 0.1%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Face Market
Amount Value
(000) (000)
- ------- --------
MUNICIPAL BONDS -- 99.4%
ALABAMA -- 0.6%
Alabama State, Federal Highway Finance Authority,
Ser A, RB, MBIA Insured
$ 1,000 5.000%, 03/01/16 $ 1,036
--------
ARIZONA -- 1.5%
Phoenix Civic Improvement, Senior Lein, Ser A, RB
2,435 5.000%, 07/01/21 2,508
--------
Bishop Street Funds 22
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------- --------
CALIFORNIA -- 1.0%
Highland, Redevelopment Agency, Project Area
No. 1, TA, AMBAC Insured
$ 1,440 5.650%, 12/01/24 $ 1,588
--------
GEORGIA -- 0.6%
Main Street, Natural Gas, Ser B, RB
1,000 5.000%, 03/15/18 927
--------
HAWAII -- 81.8%
Hawaii County, Refunding & Improvement Project,
Ser A, GO, FGIC Insured
450 5.600%, 05/01/12 485
430 5.600%, 05/01/13 468
Hawaii County, Ser A, GO, AMBAC Insured
1,000 5.000%, 07/15/15 1,075
Hawaii County, Ser A, GO, FSA Insured
1,500 5.000%, 07/15/23 1,543
Hawaii County, Ser A, GO, MBIA Insured
1,055 5.250%, 07/15/18 1,116
1,205 5.000%, 07/15/15 1,284
1,000 5.000%, 07/15/24 1,026
Hawaii State, Airport System, RB, AMT, FGIC Insured
1,000 5.750%, 07/01/15 1,011
280 5.250%, 07/01/21 266
Hawaii State, Airport System, Second Ser, RB, AMT,
ETM
60 6.900%, 07/01/12 64
Hawaii State, Airport System, Second Ser, RB, AMT,
ETM, MBIA Insured
1,505 6.900%, 07/01/12 1,603
Hawaii State, Airport System, Ser B, RB, AMT, FGIC
Insured
1,500 6.625%, 07/01/18 1,540
1,500 6.500%, 07/01/14 1,546
500 6.000%, 07/01/19 504
Hawaii State, Department of Budget & Finance,
Chaminade University, RB, Radian Insured
1,000 5.000%, 01/01/26 975
1,000 4.750%, 01/01/36 883
1,000 4.700%, 01/01/31 892
Hawaii State, Department of Budget & Finance,
Electric Company & Subsidiary Project, RB, AMT, MBIA
Insured
170 5.450%, 11/01/23 170
June 30, 2008 23 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------- --------
HAWAII -- (CONTINUED)
Hawaii State, Department of Budget & Finance,
Electric Company & Subsidiary Project, Ser A, RB,
AMT, FGIC Insured
$ 1,500 4.800%, 01/01/25 $ 1,374
Hawaii State, Department of Budget & Finance,
Electric Company & Subsidiary Project, Ser B, RB,
AMT, XLCA Insured
1,025 5.000%, 12/01/22 952
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser A, RB, AMT, AMBAC Insured
675 5.100%, 09/01/32 643
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser A, RB, AMT, FGIC Insured
1,000 4.650%, 03/01/37 834
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser A, RB, AMT, MBIA Insured
3,000 5.650%, 10/01/27 3,009
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser C, RB, AMT, AMBAC Insured
1,000 6.200%, 11/01/29 1,017
Hawaii State, Department of Budget & Finance, Mid
Pacific Institute, RB, Radian Insured
1,000 5.000%, 01/01/26 954
1,000 4.625%, 01/01/31 883
Hawaii State, Department of Hawaiian Home Lands,
Kapolei Office Facilities, Ser A, COP, FSA Insured
2,000 5.000%, 11/01/31 2,027
Hawaii State, Harbor System, Ser A, RB, AMT, FSA
Insured
2,025 5.750%, 07/01/17 2,111
670 5.750%, 07/01/29 690
1,210 5.700%, 07/01/16 1,262
1,000 5.600%, 07/01/15 1,043
1,000 5.000%, 01/01/31 987
Hawaii State, Harbor System, Ser B, RB, AMT, AMBAC
Insured
200 5.500%, 07/01/19 209
Hawaii State, Harbor System, Ser B, RB, AMT, FSA
Insured
1,000 5.000%, 01/01/13 1,048
Hawaii State, Highway, RB, FSA Insured
2,000 5.000%, 07/01/12 2,124
Hawaii State, Highway, Ser A, RB, FSA Insured
725 5.000%, 07/01/21 751
1,565 5.000%, 07/01/22 1,615
1,805 5.000%, 07/01/23 1,858
Hawaii State, Highway, Ser B, RB, FSA Insured
2,300 5.000%, 07/01/16 2,451
Bishop Street Funds 24
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------- --------
HAWAII -- (CONTINUED)
Hawaii State, Housing Finance & Development, Ser A,
RB, AMT, FNMA Collateral
$ 1,000 5.400%, 07/01/29 $ 995
Hawaii State, Housing Finance & Development,
Single-Family Housing, Ser A, RB, AMT, FNMA
Collateral
285 5.750%, 07/01/30 286
620 5.400%, 07/01/30 604
Hawaii State, Housing Finance & Development,
Single-Family Housing, Ser B, RB, FNMA Collateral
1,000 5.450%, 07/01/17 1,009
Hawaii State, Housing Finance & Development,
University of Hawaii Faculty Housing Project, RB,
AMBAC Insured
645 5.650%, 10/01/16 646
Hawaii State, Kapolei Office Building, Ser A, COP,
AMBAC Insured
1,475 5.250%, 05/01/13 1,499
1,100 5.000%, 05/01/15 1,116
1,000 5.000%, 05/01/16 1,014
1,000 5.000%, 05/01/17 1,014
500 5.000%, 05/01/18 507
Hawaii State, No. 1 Capitol District State Office,
COP, MBIA Insured
1,000 5.200%, 05/01/14 1,025
175 5.000%, 05/01/11 181
Hawaii State, Ser CL, GO, FGIC-TCRS Insured
1,000 6.000%, 03/01/11 1,071
Hawaii State, Ser CM, GO, FGIC Insured
2,000 6.500%, 12/01/13 2,284
500 6.000%, 12/01/09 524
1,500 6.000%, 12/01/11 1,629
Hawaii State, Ser CU, GO, MBIA Insured
550 5.750%, 10/01/12 583
Hawaii State, Ser CU, GO, MBIA Insured, Pre-Refunded
@ 100 (B)
25 5.750%, 10/01/10 27
Hawaii State, Ser CV, GO, FGIC Insured
475 5.375%, 08/01/18 497
1,000 5.250%, 08/01/21 1,026
Hawaii State, Ser CX, GO, FSA Insured
1,000 5.500%, 02/01/16 1,066
1,000 5.500%, 02/01/21 1,048
Hawaii State, Ser CZ, GO, FSA Insured
225 5.250%, 07/01/16 237
Hawaii State, Ser DD, GO, MBIA Insured
2,500 5.250%, 05/01/15 2,678
1,000 5.000%, 05/01/16 1,064
June 30, 2008 25 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------- --------
HAWAII -- (CONTINUED)
Hawaii State, Ser DF, GO, AMBAC Insured
$ 1,250 5.000%, 07/01/21 $ 1,299
90 5.000%, 07/01/22 93
Hawaii State, Ser DG, GO, AMBAC Insured
1,000 5.000%, 07/01/16 1,069
Hawaii State, Ser DJ, GO, AMBAC Insured
300 5.000%, 04/01/15 321
Honolulu City & County, 1st Board Resolution, Senior
Ser C, RB, MBIA Insured
2,850 5.000%, 07/01/31 2,869
Honolulu City & County, 2nd Board Resolution, Junior
Ser A-1, RB, MBIA Insured
815 5.000%, 07/01/22 847
1,130 5.000%, 07/01/23 1,171
Honolulu City & County, 2nd Board Resolution, Junior
Ser B-1, RB, MBIA Insured
865 5.000%, 07/01/23 896
Honolulu City & County, Board of Water Supply,
Ser A, RB, FGIC Insured
1,230 5.000%, 07/01/21 1,252
2,000 5.000%, 07/01/33 1,950
Honolulu City & County, Board of Water Supply,
Ser A, RB, FGIC Insured, Pre-Refunded @ 100 (B)
1,700 4.750%, 07/01/14 1,814
2,000 4.750%, 07/01/14 2,134
Honolulu City & County, Board of Water Supply,
Ser B, RB, AMT, MBIA Insured
1,000 5.250%, 07/01/20 1,020
1,000 5.250%, 07/01/21 1,016
325 5.000%, 07/01/15 338
Honolulu City & County, GO, ETM, FGIC Insured
1,000 6.000%, 12/01/12 1,108
Honolulu City & County, Junior Ser A-1, RB, MBIA
Insured
200 4.500%, 07/01/13 209
Honolulu City & County, Senior Ser A, RB, FGIC
Insured
500 5.000%, 07/01/20 519
Honolulu City & County, Ser A, GO
55 6.000%, 01/01/10 58
1,000 5.750%, 04/01/12 1,084
Honolulu City & County, Ser A, GO, ETM
95 6.000%, 01/01/10 100
Bishop Street Funds 26
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- -------- --------
HAWAII -- (CONTINUED)
Honolulu City & County, Ser A, GO, MBIA Insured
$ 625 5.250%, 03/01/17 $ 660
500 5.250%, 03/01/28 513
1,100 5.000%, 07/01/14 1,177
2,800 5.000%, 07/01/21 2,909
1,730 5.000%, 07/01/26 1,769
Honolulu City & County, Ser B, GO, ETM, FGIC Insured
635 5.500%, 10/01/11 682
Honolulu City & County, Ser B, GO, MBIA Insured
1,500 5.000%, 07/01/16 1,598
Honolulu City & County, Ser B, RB, MBIA Insured
735 4.250%, 07/01/17 747
Honolulu City & County, Ser C, GO, FGIC - FSA
Insured
1,070 5.000%, 07/01/24 1,104
Honolulu City & County, Ser C, GO, FGIC Insured
2,365 5.125%, 07/01/15 2,429
1,020 5.125%, 07/01/17 1,047
600 5.000%, 07/01/19 615
Honolulu City & County, Ser C, GO, MBIA Insured
500 5.000%, 07/01/16 534
Honolulu City & County, Ser D, GO, AMT, FGIC Insured
245 4.850%, 02/01/10 251
Honolulu City & County, Ser D, GO, MBIA Insured
885 5.000%, 07/01/19 928
2,000 5.000%, 07/01/23 2,064
Honolulu City & County, Ser E, GO, FGIC Insured
1,500 5.250%, 07/01/20 1,585
Honolulu City & County, Waipahu Towers Project, Ser
A, RB, AMT, GNMA Collateral
200 6.900%, 06/20/35 200
Honolulu City & County, Waste Water, 2nd Board
Resolution, Junior Ser, RB, FGIC Insured
1,000 5.000%, 07/01/23 1,010
Honolulu Hawaii City & County, Senior Ser A, RB,
MBIA Insured
1,000 5.000%, 07/01/36 1,004
Honolulu Hawaii City & County, Ser A, GO, MBIA
Insured
290 5.000%, 07/01/25 297
Honolulu Hawaii City & County, Ser A, RB, FSA
Insured
1,000 5.000%, 07/01/23 1,043
500 4.000%, 07/01/14 511
Honolulu Hawaii City & County, Ser B, GO, MBIA
Insured
2,950 5.000%, 07/01/17 3,107
June 30, 2008 27 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
HAWAII -- (CONTINUED)
Kauai County, Ser A, GO, FGIC Insured
$ 1,610 5.000%, 08/01/21 $ 1,659
1,440 5.000%, 08/01/23 1,469
Kauai County, Ser A, GO, FGIC Insured, Pre-Refunded
@ 100 (B)
500 6.250%, 08/01/10 536
1,335 6.250%, 08/01/10 1,431
1,050 6.250%, 08/01/10 1,125
Kauai County, Ser A, GO, MBIA Insured
1,500 5.000%, 08/01/25 1,525
Maui County, GO, MBIA Insured
100 5.000%, 03/01/17 106
1,100 5.000%, 03/01/24 1,127
Maui County, Ser A, GO
260 5.375%, 03/01/12 273
Maui County, Ser A, GO, FSA Insured
1,000 3.500%, 07/01/16 982
Maui County, Ser A, GO, MBIA Insured
1,000 4.750%, 07/01/25 1,005
Maui County, Ser A, GO, Pre-Refunded @ 100 (B)
225 5.375%, 03/01/11 238
Maui County, Ser B, GO, MBIA Insured
500 5.000%, 07/01/16 539
500 5.000%, 09/01/17 526
University of Hawaii, Ser A, RB, FGIC Insured,
Pre-Refunded @ 100 (B)
1,605 5.500%, 07/15/12 1,737
500 5.125%, 07/15/12 534
University of Hawaii, Ser A, RB, MBIA Insured
150 5.000%, 07/15/19 158
150 5.000%, 07/15/22 155
1,400 5.000%, 10/01/23 1,452
University of Hawaii, Ser B, RB, FSA Insured
320 5.250%, 10/01/16 334
775 5.250%, 10/01/17 807
Wayne Township School Building, Marion County School
District, RB, FGIC Insured
1,000 3.500%, 07/15/24 854
--------
135,446
--------
ILLINOIS -- 1.9%
Chicago O'Hare International Airport, General
Airport, Ser E, RB, CIFG Insured
1,550 5.250%, 01/01/22 1,575
Bishop Street Funds 28
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
- ------ --------
ILLINOIS -- (CONTINUED)
Illinois State, Educational Facilities Authority,
Northwestern University, RB
$ 670 5.000%, 12/01/38 $ 674
Illinois State, Finance Authority, Hospital Sisters
Services, Ser A, RB
1,000 5.000%, 03/15/27 966
--------
3,215
--------
INDIANA -- 1.5%
Indiana Finance Authority, Highway Revenue, Ser A,
RB, FGIC Insured
1,200 4.500%, 06/01/27 1,139
Indiana State, Health & Educational Facilities
Financing Authority, Clarion Health Obligation,
Ser A, RB
1,500 5.000%, 02/15/39 1,350
--------
2,489
--------
MASSACHUSETTS -- 0.3%
Massachusetts State, Water Resources Authority,
Ser J, RB
565 5.000%, 08/01/42 567
--------
NEVADA -- 0.6%
Las Vegas New Convention & Visitors Authority, RB,
AMBAC Insured
1,055 5.000%, 07/01/28 1,068
--------
NEW MEXICO -- 0.3%
New Mexico Finance Authority, Sub Ser B, RB, AMBAC
Insured
500 5.000%, 06/15/13 531
--------
OKLAHOMA -- 2.3%
Durant Community Facilities Authority, GO, XLCA
Insured
1,730 5.750%, 11/01/24 1,833
Tulsa Industrial Authority, University of Tulsa, RB
2,000 5.000%, 10/01/37 1,903
--------
3,736
--------
PUERTO RICO -- 2.7%
Commonwealth of Puerto Rico, GO, MBIA Insured
500 6.500%, 07/01/14 556
1,500 6.000%, 07/01/15 1,635
Commonwealth of Puerto Rico, Public Improvement, GO,
FSA Insured
380 5.000%, 07/01/21 384
June 30, 2008 29 www.bishopstreetfunds.com
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Market
(000)/ Value
Shares (000)
- ------ --------
PUERTO RICO -- (CONTINUED)
Commonwealth of Puerto Rico, Public Improvement, GO,
FSA Insured, Pre-Refunded @ 100 (B)
$ 55 5.000%, 07/01/11 $ 58
Puerto Rico Municipal Finance Agency, Ser B, GO,
CIFG Insured
970 5.250%, 07/01/20 959
Puerto Rico, Electric Power Authority, Ser HH, RB,
FSA Insured, Pre-Refunded @ 101 (B)
500 5.250%, 07/01/10 530
Puerto Rico, Industrial Tourist Educational Medical
Environmental Control Facilities, Hospital Auxilio
Mutuo Obligation Group, Ser A, RB, MBIA Insured
300 6.250%, 07/01/24 301
--------
4,423
--------
SOUTH CAROLINA -- 1.3%
Edisto Beach, GO
735 5.000%, 04/01/37 735
Sumter South Carolina, Waterworks & Sewer
Improvement Systems, RB, XLCA Insured
500 5.000%, 12/01/21 512
840 5.000%, 12/01/24 849
--------
2,096
--------
TEXAS -- 3.0%
Alamo Community College District, GO, MBIA FGIC
Insured
1,000 4.500%, 08/15/26 965
Amarillo Junior College District, GO, FSA Insured
885 5.000%, 02/15/26 899
North Texas Tollway Authority, RB, Assured Guaranty
Insured (A)
5,000 5.161%, 01/01/30 1,539
University of Texas, Permanent University Fund,
Ser B, RB
1,600 4.500%, 07/01/33 1,493
--------
4,896
--------
TOTAL MUNICIPAL BONDS (Cost $166,292) 164,526
--------
CASH EQUIVALENTS (C) -- 0.4%
306,899 Dreyfus Tax-Exempt Cash Management Fund,
Institutional Shares, 1.617% 307
306,899 Fidelity Institutional Tax-Exempt Portfolio,
Institutional Shares, 1.670% 307
--------
TOTAL CASH EQUIVALENTS (Cost $614) 614
--------
TOTAL INVESTMENTS (Cost $166,906) -- 99.8% $165,140
========
Bishop Street Funds 30
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
PERCENTAGES ARE BASED ON NET ASSETS OF $165,516 ($ THOUSANDS).
(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) THE RATE SHOWN REPRESENTS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2008.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
AMT -- ALTERNATIVE MINIMUM TAX
CIFG -- CIFG ASSURANCE NORTH AMERICA, INC.
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
TA -- TAX ALLOCATION
TCRS -- TEMPORARY CUSTODIAN RECEIPTS
XLCA -- XL CAPITAL
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2008 31 www.bishopstreetfunds.com
Money Market Fund (UNAUDITED)
SECTOR WEIGHTINGS+
(BAR CHART)
Commercial Paper 80.7%
Certificates of Deposit/Bank Nnotes 10.3%
Repurchase Agreements 9.0%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Face
Amount Value
(000) (000)
- ---------- --------
COMMERCIAL PAPER (A) -- 80.8%
BANKS -- 64.6%
ANZ National Ltd. (B)
$ 12,000 2.995%, 10/22/08 $ 11,889
Bank of Montreal
11,000 2.530%, 08/01/08 10,976
Bank of Scotland PLC
3,000 2.608%, 07/10/08 2,998
1,200 2.578%, 07/23/08 1,198
3,800 2.708%, 08/05/08 3,790
3,500 2.739%, 08/06/08 3,491
Danske (B)
2,500 2.473%, 07/07/08 2,499
1,500 2.506%, 07/14/08 1,499
3,600 2.542%, 07/21/08 3,595
4,000 2.866%, 07/25/08 3,992
Dexia Delaware
3,900 2.728%, 07/10/08 3,897
5,000 2.718%, 07/11/08 4,996
1,200 2.697%, 08/06/08 1,197
1,500 2.647%, 09/02/08 1,493
Fortis Banque Luxembourg
12,000 2.657%, 08/06/08 11,968
JPMorgan Chase
8,000 2.516%, 08/12/08 7,977
Lloyds TSB Bank PLC
11,000 2.490%, 07/01/08 11,000
Royal Bank of Canada
1,500 2.269%, 07/11/08 1,499
10,000 2.516%, 08/27/08 9,961
Societe Generale North America
4,410 2.575%, 07/14/08 4,406
5,500 2.710%, 08/06/08 5,485
1,423 2.641%, 08/08/08 1,419
Bishop Street Funds 32
Money Market Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------ --------
BANKS -- (CONTINUED)
Svenska Handelsbanken
$ 2,000 2.622%, 07/07/08 $ 1,999
10,000 2.567%, 08/11/08 9,971
UBS Finance Delaware
1,500 2.556%, 07/16/08 1,498
10,000 3.077%, 10/21/08 9,906
Westpac Banking (B)
12,000 2.633%, 08/08/08 11,967
--------
146,566
--------
FINANCIALS -- 16.2%
Abbey National North America
11,500 2.567%, 07/08/08 11,494
CBA Delaware Finance
4,000 2.728%, 07/07/08 3,998
5,425 2.453%, 07/14/08 5,420
1,500 2.688%, 08/05/08 1,496
General Electric Capital
2,500 2.360%, 08/04/08 2,495
ING US Funding
11,800 2.840%, 07/25/08 11,778
--------
36,681
--------
TOTAL COMMERCIAL PAPER (Cost $183,247) 183,247
--------
CERTIFICATES OF DEPOSIT/BANK NOTES -- 10.2%
Toronto Dominion
5,000 2.600%, 08/27/08 5,000
7,300 2.900%, 08/29/08 7,300
Wells Fargo Bank
11,000 2.440%, 07/07/08 11,000
--------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $23,300) 23,300
--------
June 30, 2008 33 www.bishopstreetfunds.com
Money Market Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------ --------
REPURCHASE AGREEMENTS -- 9.1%
$ 11,000 Bank of America 2.450%, dated 06/30/08, to be
repurchased on 07/01/08, repurchase price
$11,000,749 (collateralized by a U.S. Government
obligation, par value $ 23,341,134 5.500%,
06/01/33, with a total market
value of $11,220,000) $ 11,000
9,600 Barclays Bank 2.400%, dated 06/30/08, to be
repurchased on 07/01/08, repurchase price
$9,600,640 (collateralized by a U.S. Government
obligation, par value $ 9,870,000 3.850%,
04/17/13, with a total market value
of $9,792,885) 9,600
--------
TOTAL REPURCHASE AGREEMENTS (Cost $20,600) 20,600
--------
TOTAL INVESTMENTS (Cost $227,147) -- 100.1% $227,147
========
PERCENTAGES ARE BASED ON NET ASSETS OF $226,858 (IN THOUSANDS).
(A) THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE EFFECTIVE YIELD AT
TIME OF PURCHASE.
(B) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED, INSTITUTIONS. AT JUNE 30, 2008, THESE
SECURITIES AMOUNTED TO $35,441($ THOUSANDS), REPRESENTING 15.6% OF NET
ASSETS OF THE FUND.
LTD. -- LIMITED
PLC -- PUBLIC LIABILITY COMPANY
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds 34
Treasury Money Market Fund (UNAUDITED)
(BAR CHART)
SECTOR WEIGHTINGS+
Repurchase Agreements 64.1%
U.S. Treasury Obligations 35.9%
+ PERCENTAGES BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Face
Amount Value
(000) (000)
- ----- --------
U.S. TREASURY OBLIGATIONS (A) -- 36.0%
U.S. Treasury Bills
$ 20,000 1.283%, 09/11/08 $ 19,949
20,000 1.696%, 09/18/08 19,926
5,000 2.240%, 12/11/08 4,950
--------
TOTAL U.S.TREASURY OBLIGATIONS (Cost $44,825) 44,825
--------
REPURCHASE AGREEMENTS -- 64.2%
40,000 Bank of America 1.500%, dated 06/30/08, to be
repurchased on 07/01/08, repurchase price
$40,001,667 (collateralized by a U.S. Treasury
obligation, par value $39,954,500, 4.875%, 08/31/08,
with a total market value of $40,800,005) 40,000
40,000 Barclays Bank 1.700%, dated 06/30/08, to be
repurchased on 07/01/08, repurchase price
$40,001,889 (collateralized by various U.S. Treasury
obligations, ranging in par value
$15,900,000-18,861,200, 2.375%, 01/15/25-01/15/27,
with a total market value of $40,800,074) 40,000
--------
TOTAL REPURCHASE AGREEMENTS (Cost $80,000) 80,000
--------
TOTAL INVESTMENTS (Cost $124,825) -- 100.2% $124,825
========
PERCENTAGES ARE BASED ON NET ASSETS OF $124,624 ($ THOUSANDS).
(A) THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE EFFECTIVE YIELD AT
TIME OF PURCHASE.
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2008 35 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2008
(IN THOUSANDS)
Large High
Strategic Cap Core Grade
Growth Equity Income
Fund Fund Fund
--------- -------- -------
ASSETS:
Investments, at Cost $ 99,347 $90,333 $145,298
Repurchase Agreements, at Cost -- 1,681 16,818
======== ======= ========
Investments, at Value $102,827 $84,951(1) $147,349(1)
Repurchase Agreements, at Value -- 1,681 16,818
Dividends and Interest Receivable 56 80 1,963
Receivable for Fund Shares Sold 9 8 14
Receivable for Investment Securities Sold -- 800 --
Prepaid Expenses 3 2 3
-------- ------- --------
Total Assets 102,895 87,522 166,147
-------- ------- --------
LIABILITIES:
Payable for Fund Shares Redeemed 182 119 75
Payable for Investment Securities Purchased -- 515 --
Income Distribution Payable -- -- 212
Collateral on Securities Loaned -- 3,295 32,955
Advisory Fees Payable 66 52 46
Administrative Fees Payable 10 8 13
Shareholder Servicing Fees Payable 9 7 11
Chief Compliance Officer Fees Payable 3 3 4
Other Accrued Expenses 39 31 43
-------- ------- --------
Total Liabilities 309 4,030 33,359
-------- ------- --------
Net Assets $102,586 $83,492 $132,788
======== ======= ========
Fund Shares $ 94,741 $89,695 $131,896
Undistributed Net Investment Income (Distributions
in Excess of Net Investment Income/Accumulated
Net Investment Loss) (176) (9) 4
Accumulated Net Realized Gain (Loss) on Investments 4,541 (812) (1,163)
Net Unrealized Appreciation (Depreciation) on Investments 3,480 (5,382) 2,051
-------- ------- --------
Net Assets $102,586 $83,492 $132,788
======== ======= ========
Class I Shares:
Net Assets $102,586 $83,492 $132,788
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 8,365 9,007 13,179
Net Asset Value, Offering and Redemption Price Per Share
(Net Assets / Shares Outstanding) $ 12.26 $ 9.27 $ 10.08
======== ======= ========
(1) INCLUDED IN "INVESTMENTS, AT VALUE" IS THE MARKET VALUE OF SECURITIES ON
LOAN IN THE AMOUNTS OF $3,208 ($ THOUSANDS), AND $32,452 ($ THOUSANDS) 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 36
Bishop Street Funds (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2008
(IN THOUSANDS)
Hawaii Treasury
Municipal Money Money
Bond Market Market
Fund Fund Fund
--------- -------- --------
ASSETS:
Investments, at Cost $166,906 $206,547 $ 44,825
Repurchase Agreements, at Cost -- 20,600 80,000
======== ======== ========
Investments, at Value $165,140 $206,547 $ 44,825
Repurchase Agreements, at Value -- 20,600 80,000
Cash -- 76 25
Interest Receivable 3,158 55 3
Prepaid Expenses 3 7 8
-------- -------- --------
Total Assets 168,301 227,285 124,861
-------- -------- --------
LIABILITIES:
Payable for Fund Shares Redeemed 2,188 -- --
Income Distribution Payable 468 265 157
Advisory Fees Payable 35 34 8
Shareholder Servicing Fees Payable 13 19 10
Administrative Fees Payable 10 22 12
Distribution Fees Payable 6 15 --
Chief Compliance Officer Fees Payable 5 6 4
Other Accrued Expenses 60 66 46
-------- -------- --------
Total Liabilities 2,785 427 237
-------- -------- --------
Net Assets $165,516 $226,858 $124,624
======== ======== ========
Fund Shares $167,381 $226,877 $124,607
Undistributed Net Investment Income (Distributions in
Excess of Net Investment Income) (2) -- --
Accumulated Net Realized Gain (Loss) on Investments (97) (19) 17
Net Unrealized Depreciation on Investments (1,766) -- --
-------- -------- --------
Net Assets $165,516 $226,858 $124,624
======== ======== ========
Class I Shares:
Net Assets $138,337 $154,803 $124,624
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 13,415 154,827 124,608
Net Asset Value, Offering and Redemption Price Per Share
(Net Assets / Shares Outstanding) $ 10.31 $ 1.00 $ 1.00
======== ======== ========
Class A Shares:
Net Assets $ 27,179 $ 72,055 $ --
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 2,635 72,053 --
Net Asset Value, Offering and Redemption Price Per Share
(Net Assets / Shares Outstanding) $ 10.31 $ 1.00 $ --
======== ======== ========
Maximum Offering Price Per Shares -- Class A
($10.31 / 97.00%) $ 10.63 $ -- $ --
======== ======== ========
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, 2008 37 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
STATEMENTS OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2008
(IN THOUSANDS)
Large High
Strategic Cap Core Grade
Growth Equity Income
Fund Fund Fund
--------- --------- -------
INVESTMENT INCOME:
Dividend Income $ 416 $ 750 $ 30
Interest Income -- -- 3,272
Securities Lending, Net -- 4 78
Foreign Taxes Withheld (1) (1) --
-------- -------- -------
Total Investment Income 415 753 3,380
-------- -------- -------
EXPENSES:
Investment Adviser Fees 411 336 375
Shareholder Servicing Fees 139 113 171
Administrative Fees 111 91 137
Chief Compliance Officer Fees 1 1 2
Transfer Agent Fees 22 20 23
Professional Fees 17 14 21
Printing Fees 6 5 8
Custody Fees 6 7 7
Trustees' Fees 3 2 3
Line of Credit 2 2 --
Registration Fees 1 1 1
Miscellaneous Expenses 3 5 10
-------- -------- -------
Total Expenses 722 597 758
-------- -------- -------
Less Waivers:
Investment Adviser Fees -- (12) (79)
Shareholder Servicing Fees (83) (68) (102)
Administrative Fees (46) (38) (57)
-------- -------- -------
Total Waivers (129) (118) (238)
-------- -------- -------
Total Net Expenses 593 479 520
-------- -------- -------
Net Investment Income (Loss) (178) 274 2,860
-------- -------- -------
Net Realized Gain (Loss) on Investments 2,922 (893) (152)
Change in Unrealized Depreciation on Investments (18,423) (10,991) (902)
-------- -------- -------
Net Realized and Unrealized Loss on Investments (15,501) (11,884) (1,054)
-------- -------- -------
Increase (Decrease) in Net Assets Resulting from Operations $(15,679) $(11,610) $ 1,806
======== ======== =======
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 (UNAUDITED)
STATEMENTS OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2008
(IN THOUSANDS)
Hawaii Treasury
Municipal Money Money
Bond Market Market
Fund Fund Fund
--------- ------ --------
INVESTMENT INCOME:
Interest Income $ 3,745 $3,993 $1,740
Dividend Income 6 -- --
------- ------ ------
Total Investment Income 3,751 3,993 1,740
------- ------ ------
EXPENSES:
Investment Adviser Fees 296 368 221
Shareholder Servicing Fees 212 306 184
Administrative Fees 169 245 147
Distribution Fees, Class A 35 88 --
Chief Compliance Officer Fees 2 3 2
Transfer Agent Fees 37 41 25
Professional Fees 26 36 25
Printing Fees 9 13 9
Custody Fees 9 12 8
Trustees' Fees 4 5 4
Registration Fees 2 3 2
Miscellaneous Expenses 17 21 12
------- ------ ------
Total Expenses 818 1,141 639
------- ------ ------
Less Waivers:
Investment Adviser Fees (80) (150) (142)
Shareholder Servicing Fees (127) (184) (111)
Administrative Fees (110) (102) (61)
------- ------ ------
Total Waivers (317) (436) (314)
------- ------ ------
Total Net Expenses 501 705 325
------- ------ ------
Net Investment Income 3,250 3,288 1,415
------- ------ ------
Net Realized Loss on Investments (57) -- (5)
Change in Unrealized Depreciation on Investments (3,889) -- --
------- ------ ------
Net Realized and Unrealized Loss on Investments (3,946) -- (5)
------- ------ ------
Increase (Decrease) in Net Assets Resulting from Operations $ (696) $3,288 $1,410
======= ====== ======
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, 2008 39 www.bishopstreetfunds.com
Bishop Street Funds
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2008 (UNAUDITED) AND
THE YEAR ENDED DECEMBER 31, 2007
(IN THOUSANDS)
Strategic Large Cap Core
Growth Fund Equity Fund
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income (Loss) $ (178) $ (298) $ 274 $ 404
Net Realized Gain (Loss) on Investments 2,922 19,654 (893) 5,352
Change in Unrealized Depreciation on Investments (18,423) (6,388) (10,991) (407)
-------- -------- -------- --------
Increase (Decrease) in Net Assets Resulting from Operations (15,679) 12,968 (11,610) 5,349
-------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares -- -- (283) (404)
Capital Gains:
Class I Shares -- (18,469) -- (5,563)
-------- -------- -------- --------
Total Dividends and Distributions -- (18,469) (283) (5,967)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 4,079 11,212 2,882 11,637
Reinvestments of Cash Distributions -- 13,283 216 4,516
Cost of Shares Redeemed (12,198) (35,539) (9,055) (17,043)
-------- -------- -------- --------
Net Decrease in Net Assets From
Capital Share Transactions (8,119) (11,044) (5,957) (890)
-------- -------- -------- --------
Total Decrease in Net Assets (23,798) (16,545) (17,850) (1,508)
-------- -------- -------- --------
NET ASSETS:
Beginning of Period 126,384 142,929 101,342 102,850
-------- -------- -------- --------
End of Period $102,586 $126,384 $ 83,492 $101,342
======== ======== ======== ========
Accumulated Net Investment Loss/Distributions
in Excess of Net Investment Income $ (176) $ 2 $ (9) $ --
======== ======== ======== ========
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 319 733 296 1,053
Shares Issued in Lieu of Cash Distributions -- 933 23 422
Shares Redeemed (951) (2,301) (929) (1,542)
-------- -------- -------- --------
Net Decrease in Shares Outstanding from
Share Transactions (632) (635) (610) (67)
======== ======== ======== ========
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
Bishop Street Funds
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2008 (UNAUDITED) AND
THE YEAR ENDED DECEMBER 31, 2007
(IN THOUSANDS)
High Grade Hawaii Municipal
Income Fund Bond Fund
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 2,860 $ 5,904 $ 3,250 $ 6,671
Net Realized Gain (Loss) on Investments (152) (237) (57) 502
Change in Unrealized Appreciation (Depreciation)
on Investments (902) 3,129 (3,889) (3,000)
-------- -------- -------- --------
Increase (Decrease) in Net Assets Resulting from Operations 1,806 8,796 (696) 4,173
-------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (2,858) (5,901) (2,742) (5,627)
Class A Shares -- -- (512) (1,099)
Capital Gains:
Class I Shares -- -- -- (665)
Class A Shares -- -- -- (134)
-------- -------- -------- --------
Total Dividends and Distributions (2,858) (5,901) (3,254) (7,525)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 9,194 17,815 4,306 23,661
Reinvestments of Cash Distributions 1,668 3,274 350 818
Cost of Shares Redeemed (13,245) (29,209) (7,855) (15,222)
-------- -------- -------- --------
Total Class I Capital Share Transactions (2,383) (8,120) (3,199) 9,257
-------- -------- -------- --------
Class A Shares:
Proceeds from Shares Issued -- -- 1,529 1,924
Reinvestments of Cash Distributions -- -- 210 540
Cost of Shares Redeemed -- -- (3,017) (3,180)
-------- -------- -------- --------
Total Class A Capital Share Transactions -- -- (1,278) (716)
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (2,383) (8,120) (4,477) 8,541
-------- -------- -------- --------
Total Increase (Decrease) in Net Assets (3,435) (5,225) (8,427) 5,189
-------- -------- -------- --------
NET ASSETS:
Beginning of Period 136,223 141,448 173,943 168,754
-------- -------- -------- --------
End of Period $132,788 $136,223 $165,516 $173,943
======== ======== ======== ========
Undistributed Net Investment Income (Distributions
in Excess of Net Investment Income) $ 4 $ 2 $ (2) $ 2
======== ======== ======== ========
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 898 1,789 412 2,226
Shares Issued in Lieu of Cash Distributions 164 329 34 77
Shares Redeemed (1,299) (2,934) (748) (1,434)
-------- -------- -------- --------
Total Class I Share Transactions (237) (816) (302) 869
-------- -------- -------- --------
Class A Shares:
Shares Issued -- -- 147 181
Shares Issued in Lieu of Cash Distributions -- -- 20 51
Shares Redeemed -- -- (289) (300)
-------- -------- -------- --------
Total Class A Share Transactions -- -- (122) (68)
-------- -------- -------- --------
Net Increase (Decrease) in Shares Outstanding
from Share Transactions (237) (816) (424) 801
======== ======== ======== ========
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, 2008 41 www.bishopstreetfunds.com
Bishop Street Funds
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2008 (UNAUDITED) AND
THE YEAR ENDED DECEMBER 31, 2007
(IN THOUSANDS)
Money Market Treasury Money
Fund Market Fund
--------------------- ---------------------
2008 2007 2008 2007
--------- --------- --------- ---------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 3,288 $ 10,658 $ 1,415 $ 7,077
Net Realized Gain (Loss) on Investments -- 3 (5) 121
--------- --------- --------- ---------
Increase in Net Assets Resulting from Operations 3,288 10,661 1,410 7,198
--------- --------- --------- ---------
DIVIDENDS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (2,418) (7,832) (1,415) (7,077)
Class A Shares (870) (2,826) --
Capital Gains:
Class I Shares -- -- -- (42)
Class A Shares -- -- --
--------- --------- --------- ---------
Total Dividends (3,288) (10,658) (1,415) (7,119)
--------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS (ALL AT $1.00 PER SHARE):
Class I Shares:
Proceeds from Shares Issued 241,647 428,470 304,193 543,810
Reinvestments of Cash Distributions 116 305 2 11
Cost of Shares Redeemed (266,685) (408,095) (327,078) (554,752)
--------- --------- --------- ---------
Total Class I Capital Share Transactions (24,922) 20,680 (22,883) (10,931)
--------- --------- --------- ---------
Class A Shares:
Proceeds from Shares Issued 54,373 110,288 -- --
Reinvestments of Cash Distributions 870 2,826 -- --
Cost of Shares Redeemed (46,756) (108,760) -- --
--------- --------- --------- ---------
Total Class A Capital Share Transactions 8,487 4,354 -- --
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets
from Capital Share Transactions (16,435) 25,034 (22,883) (10,931)
--------- --------- --------- ---------
Total Increase (Decrease) in Net Assets (16,435) 25,037 (22,888) (10,852)
--------- --------- --------- ---------
NET ASSETS:
Beginning of Period 243,293 218,256 147,512 158,364
--------- --------- --------- ---------
End of Period $ 226,858 $ 243,293 $ 124,624 $ 147,512
========= ========= ========= =========
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 42
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Bishop Street Funds
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2008
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS FROM
--------------------------- TOTAL --------------------
NET ASSET NET NET REALIZED INVESTMENT TOTAL
VALUE, INVESTMENT AND UNREALIZED ACTIVITIES NET DIVIDENDS
BEGINNING INCOME GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND
OF PERIOD (LOSS)(1) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ---------- -------------- ---------- ---------- ------- -------------
STRATEGIC GROWTH FUND
CLASS I SHARES:
2008 $14.05 $(0.02) $(1.77) $(1.79) $ -- $ -- $ --
2007 14.84 (0.03) 1.53 1.50 -- (2.29) (2.29)
2006 14.35 (0.03) 1.41 1.38 -- (0.89) (0.89)
2005 13.08 (0.05) 1.56 1.51 -- (0.24) (0.24)
2004 11.93 (0.05) 1.20 1.15 -- -- --
2003 8.64 (0.06) 3.35 3.29 -- -- --
LARGE CAP CORE EQUITY FUND
CLASS I SHARES:
2008 $10.54 $ 0.03 $(1.27) $(1.24) $(0.03) $ -- $(0.03)
2007 10.62 0.04 0.52 0.56 (0.04) (0.60) (0.64)
2006(2) 10.00 0.04 0.62 0.66 (0.04) -- (0.04)
HIGH GRADE INCOME FUND
CLASS I SHARES:
2008 $10.15 $ 0.21 $(0.07) $ 0.14 $(0.21) $ -- $(0.21)
2007 9.94 0.44 0.21 0.65 (0.44) -- (0.44)
2006 10.06 0.41 (0.12) 0.29 (0.41) -- (0.41)
2005 10.33 0.39 (0.19) 0.20 (0.39) (0.08) (0.47)
2004 10.40 0.38 (0.03) 0.35 (0.38) (0.04) (0.42)
2003 10.67 0.42 (0.07) 0.35 (0.42) (0.20) (0.62)
HAWAII MUNICIPAL BOND FUND
CLASS I SHARES:
2008 $10.56 $ 0.20 $(0.25) $(0.05) $(0.20) $ -- $(0.20)
2007 10.77 0.42 (0.16) 0.26 (0.42) (0.05) (0.47)
2006 10.77 0.43 0.04 0.47 (0.43) (0.04) (0.47)
2005 11.02 0.43 (0.16) 0.27 (0.43) (0.09) (0.52)
2004 11.21 0.44 (0.07) 0.37 (0.44) (0.12) (0.56)
2003 11.20 0.45 0.13 0.58 (0.45) (0.12) (0.57)
CLASS A SHARES:
2008 $10.56 $ 0.19 $(0.25) $(0.06) $(0.19) $ -- $(0.19)
2007 10.77 0.39 (0.16) 0.23 (0.39) (0.05) (0.44)
2006 10.77 0.40 0.04 0.44 (0.40) (0.04) (0.44)
2005 11.02 0.41 (0.16) 0.25 (0.41) (0.09) (0.50)
2004 11.21 0.41 (0.07) 0.34 (0.41) (0.12) (0.53)
2003 11.20 0.42 0.13 0.55 (0.42) (0.12) (0.54)
+ 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 MAY 3, 2006.
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 (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:
2008 $12.26 (12.74)% $102,586 1.07%* 1.30%* (0.32)%* 33%
2007 14.05 10.10 126,384 1.07 1.30 (0.22) 61
2006 14.84 9.78 142,929 1.06 1.30 (0.23) 53
2005 14.35 11.52 123,341 1.07 1.31 (0.35) 55
2004 13.08 9.64 79,168 1.05 1.29 (0.38) 59
2003 11.93 38.08 46,845 1.17 1.41 (0.57) 59
LARGE CAP CORE EQUITY FUND
CLASS I SHARES:
2008 $ 9.27 (11.76)% $ 83,492 1.05%* 1.32%* 0.60%* 35%
2007 10.54 5.24 101,342 1.05 1.31 0.38 65
2006(2) 10.62 6.63 102,850 1.05* 1.32* 0.64* 51
HIGH GRADE INCOME FUND
CLASS I SHARES:
2008 $10.08 1.39% $132,788 0.76%* 1.11%* 4.19%* 23%
2007 10.15 6.67 136,223 0.76 1.11 4.38 26
2006 9.94 2.96 141,448 0.76 1.12 4.12 41
2005 10.06 2.00 141,439 0.76 1.13 3.82 45
2004 10.33 3.41 157,170 0.76 1.11 3.68 45
2003 10.40 3.31 134,845 0.76 1.10 3.91 48
HAWAII MUNICIPAL BOND FUND
CLASS I SHARES:
2008 $10.31 (0.45)% $138,337 0.55%* 0.93%* 3.88%* 24%
2007 10.56 2.47 144,828 0.55 0.93 3.92 25
2006 10.77 4.42 138,333 0.55 0.93 3.99 47
2005 10.77 2.51 145,213 0.55 0.93 3.97 41
2004 11.02 3.36 148,575 0.55 0.92 3.97 40
2003 11.21 5.27 150,373 0.45 0.91 4.01 38
CLASS A SHARES:
2008 $10.31 (0.57)% $ 27,179 0.80%* 1.18%* 3.63%* 24%
2007 10.56 2.21 29,115 0.80 1.18 3.67 25
2006 10.77 4.16 30,421 0.80 1.18 3.74 47
2005 10.77 2.25 31,515 0.80 1.18 3.72 41
2004 11.02 3.10 30,484 0.80 1.17 3.72 40
2003 11.21 5.01 30,975 0.70 1.16 3.76 38
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2008 45 www.bishopstreetfunds.com
Bishop Street Funds
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2008
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
--------------------------- TOTAL --------------------
NET ASSET NET REALIZED INVESTMENT
VALUE, NET AND UNREALIZED ACTIVITIES NET
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL TOTAL
OF PERIOD INCOME(1) INVESTMENTS OPERATIONS INCOME GAINS DIVIDENDS
--------- ---------- -------------- ---------- ---------- ------- ---------
MONEY MARKET FUND
CLASS I SHARES:
2008 $1.00 $0.01 $-- $0.01 $(0.01) $-- $(0.01)
2007 1.00 0.05 -- 0.05 (0.05) -- (0.05)
2006 1.00 0.05 -- 0.05 (0.05) -- (0.05)
2005 1.00 0.03 -- 0.03 (0.03) -- (0.03)
2004 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2003 1.00 0.01 -- 0.01 (0.01) -- (0.01)
CLASS A SHARES:
2008 $1.00 $0.01 $-- $0.01 $(0.01) $-- $(0.01)
2007 1.00 0.05 -- 0.05 (0.05) -- (0.05)
2006 1.00 0.04 -- 0.04 (0.04) -- (0.04)
2005 1.00 0.03 -- 0.03 (0.03) -- (0.03)
2004 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2003 1.00 0.01 -- 0.01 (0.01) -- (0.01)
TREASURY MONEY MARKET FUND
CLASS I SHARES:
2008 $1.00 $0.01 $-- $0.01 $(0.01) $-- $(0.01)
2007 1.00 0.04 -- 0.04 (0.04) --* (0.04)
2006 1.00 0.04 -- 0.04 (0.04) -- (0.04)
2005 1.00 0.03 -- 0.03 (0.03) -- (0.03)
2004 1.00 0.01 -- 0.01 (0.01) -- (0.01)
2003 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.
* AMOUNT REPRESENTS LESS THAN $0.01.
** 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 46
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: $1.00 1.37% $154,803 0.50%** 0.86%** 2.77%**
2008 1.00 4.86 179,725 0.50 0.86 4.75
2007 1.00 4.63 159,044 0.50 0.86 4.55
2006 1.00 2.78 170,455 0.50 0.87 2.73
2005 1.00 0.92 167,910 0.50 0.84 0.90
2004 1.00 0.76 182,166 0.50 0.83 0.76
2003
CLASS A SHARES: $1.00 1.25% $72,055 0.75%** 1.11%** 2.47%**
2008 1.00 4.60 63,568 0.75 1.11 4.50
2007 1.00 4.37 59,212 0.75 1.11 4.33
2006 1.00 2.53 35,530 0.75 1.12 2.60
2005 1.00 0.67 17,824 0.75 1.09 0.65
2004 1.00 0.50 17,440 0.75 1.08 0.41
2003
TREASURY MONEY MARKET FUND
CLASS I SHARES:
2008 $1.00 0.94% $124,624 0.44%** 0.87%** 1.92%**
2007 1.00 4.49 147,512 0.44 0.88 4.38
2006 1.00 4.51 158,364 0.44 0.87 4.39
2005 1.00 2.62 223,614 0.44 0.87 2.61
2004 1.00 0.91 208,153 0.44 0.84 0.89
2003 1.00 0.74 270,365 0.44 0.83 0.75
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2008 47 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 48
(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.
In September, 2006, the Financial Accounting Standards Board ("FASB")
released STATEMENT OF FINANCIAL ACCOUNTING STANDARDS ("SFAS") No. 157, which
provides enhanced guidance for using fair value to measure assets and
liabilities. The Fund adopted SFAS No. 157 on January 1, 2008. SFAS No. 157
establishes a fair value hierarchy and specifies that a valuation technique used
to measure fair value shall maximize the use of observable inputs and minimize
the use of unobservable inputs. The objective of a fair value measurement is to
determine the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the
measurement date (an exit price). Accordingly, the fair value hierarchy gives
the highest priority to quoted prices (unadjusted) in active markets for
identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy
under SFAS No. 157 are described below:
- Level 1 -- Unadjusted quoted prices in active markets for identical,
unrestricted assets or liabilities that the Fund has the ability to
access at the measurement date;
- Level 2 -- Quoted prices which are not active, or inputs that are
observable (either directly or indirectly) for substantially the full
term of the asset or liability; and
- Level 3 -- Prices, inputs or exotic modeling techniques which are both
significant to the fair value measurement and unobservable (supported
by little or no market activity).
As required by SFAS No.157, investments are classified within the level of
the lowest significant input considered in determining fair value. Investments
classified within Level 3 whose fair value measurement considers several inputs
and may include Level 1 or Level 2 inputs as components of the overall fair
value measurement. The table below
June 30, 2008 49 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
sets forth information about the level within the fair value hierarchy at which
the Fund's investments are measured at June 30, 2008:
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
INVESTMENTS IN SECURITIES (000) (000) (000) (000)
- ------------------------- --------- -------- ------- --------
Strategic Growth Fund $102,827 $ -- $-- $102,827
Large Cap Core Equity Fund* 83,337 -- -- 83,337
High Grade Income Fund* 556 130,656 -- 131,212
Hawaii Municipal Bond Fund 614 164,526 -- 165,140
Money Market Fund 227,147 -- -- 227,147
Treasury Money Market Fund 124,825 -- -- 124,825
* EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
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 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.
CLASSES
Class-specific expenses are borne by the applicable class of shares.
Income, realized and unrealized gains/losses and non class-specific expenses are
allocated to the respective class on the basis of relative daily net assets.
Bishop Street Funds 50
(UNAUDITED)
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 net realized capital gains will be distributed at least
annually for all Funds. Distributions to shareholders are recorded on the
ex-dividend date.
ILLIQUID SECURITIES
Valuations of illiquid securities may differ significantly from the values
that would have been used had an active market value for these securities
existed. At June 30, 2008, 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. For the period ended June 30, 2008, there were no cash overdrafts.
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 are as follows: Strategic Growth Fund (Class I) 1.07%, 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%.
June 30, 2008 51 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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 Treasury and 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, and including $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.
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.
Bishop Street Funds 52
(UNAUDITED)
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 presented net of commissions to the security lending agent.
6. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale and
maturities of securities, other than short-term investments, for the six-month
period ended June 30, 2008 are presented below for the Funds.
June 30, 2008 53 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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 $ -- $ -- $ 9,979 $ --
Other 36,673 31,596 20,293 40,721
Sales and Maturities
U.S.
Government
Securities $ -- $ -- $15,208 $ --
Other 41,200 36,918 14,288 40,307
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.
Bishop Street Funds 54
(UNAUDITED)
The tax character of dividends and distributions declared during the years
ended December 31, 2007 and December 31, 2006 were as follows:
Ordinary Tax Exempt Long-Term
Income Income Capital Gain Total
(000) (000) (000) (000)
-------- ---------- ------------ -------
Strategic Growth
Fund
2007 $ 1,827 $ -- $16,642 $18,469
2006 93 -- 8,233 8,326
Large Cap Core
Equity Fund
2007 $ 4,190 $ -- $ 1,777 $ 5,967
2006 318 -- -- 318
High Grade
Income Fund
2007 $ 5,901 $ -- $ -- $ 5,901
2006 5,603 -- -- 5,603
Hawaii Municipal
Bond Fund
2007 $ 181 $6,697 $ 647 $ 7,525
2006 67 6,717 525 7,309
Money Market Fund
2007 $10,658 $ -- $ -- $10,658
2006 9,879 -- -- 9,879
Treasury Money
Market Fund
2007 $ 7,119 $ -- $ -- $ 7,119
2006 8,671 -- -- 8,671
June 30, 2008 55 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
As of December 31, 2007, 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 $ -- $ -- $ -- $ -- $ -- $ 22
Undistributed
long-term
capital gain 1,793 404 -- -- -- --
Capital loss
carryforwards -- -- (958) -- (19) --
Post-October losses -- -- -- (37) -- --
Other temporary
differences -- -- 2 -- -- --
Unrealized
appreciation 21,731 5,286 2,900 2,122 -- --
------- ------ ------ ------ ---- ----
Total Distributable
Earnings
(Accumulated
Losses) $23,524 $5,690 $1,944 $2,085 $(19) $ 22
======= ====== ====== ====== ==== ====
Post-October losses represent losses realized on investment transactions
from November 1, 2007 through December 31, 2007 that, in accordance with Federal
income tax regulations, the Funds have elected to defer and treat as having
arisen in the following fiscal year.
For Federal income tax purposes, capital loss carryforwards represent
realized losses of the Funds that may be carried forward for a maximum period of
eight years and applied against future capital gains as follows:
High
Grade Money
Income Market
Fund Fund
(000) (000)
------ ------
Dec. 2009 $ -- $16
Dec. 2013 -- 3
Dec. 2014 642 --
Dec. 2015 316 --
---- ---
Total $958 $19
==== ===
Bishop Street Funds 56
(UNAUDITED)
During the year ended December 31, 2007, the Money Market Fund and Treasury
Money Market Fund utilized capital loss carryforwards of $3 and $57,
respectively, 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, 2008
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 $ 99,578 $ 92,369 $162,116 $166,896
-------- -------- -------- --------
Gross
Unrealized Appreciation 14,223 7,632 3,248 1,716
Gross
Unrealized Depreciation (10,974) (13,369) (1,197) (3,472)
-------- -------- -------- --------
Net
Unrealized Appreciation
(Depreciation) $ 3,249 $ (5,737) $ 2,051 $ (1,756)
======== ======== ======== ========
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
$5 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
June 30, 2008 57 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
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, 2008, the
Funds had borrowings costs of $1,944 for the Strategic Growth Fund, $2,118 for
the Large Cap Core Equity Fund, $78 for the High Grade Fund, and $490 for the
Hawaii Municipal Bond Fund. As of June 30, 2008, there are no outstanding
borrowings by the Funds.
10. OTHER
At June 30, 2008, 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 92.16%
Large Cap Core Equity Fund, Class I Shares 1 94.62
High Grade Income Fund, Class I Shares 2 94.46
Hawaii Municipal Bond Fund, Class I Shares 1 90.96
Hawaii Municipal Bond Fund, Class A Shares 2 21.80
Money Market Fund, Class I Shares 1 93.70
Money Market Fund, Class A Shares 1 99.37
Treasury Money Market Fund, Class I Shares 1 99.78
11. 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 benefits of positions not deemed to meet the
more-likely-than-not threshold would be recorded as a tax 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.
Bishop Street Funds 58
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, distribution fees, and
shareholder reports like this one. It is important for you to understand the
impact of these costs on your investment returns.
Operating expenses such as these are deducted from a mutual fund's gross income
and directly reduce its final investment return. These expenses are expressed as
a percentage of the mutual fund's average net assets; this percentage is known
as the mutual fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table on the next page illustrates your Fund's costs in two ways:
- - ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
after fee waivers that your Fund incurred over the period. The "Expenses Paid
During Period" column shows the actual dollar expense cost incurred by a $1,000
investment in the Fund, and the "Ending Account Value" number is derived from
deducting that expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in
the Fund, to estimate the expenses you paid over that period. Simply divide your
actual account value by $1,000 to arrive at a ratio (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply that ratio by the number
shown for your Fund under "Expenses Paid During Period."
- - HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with
those of other mutual funds. It assumes that the Fund had an annual 5% return
before expenses during the year, but that the expense ratio (Column 3) for the
period is unchanged. This example is useful in making comparisons because the
Securities and Exchange Commission requires all mutual funds to make this 5%
calculation. You can assess your Fund's comparative cost by comparing the
hypothetical result for your Fund in the "Expenses Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
funds.
NOTE: Because the return is set at 5% for comparison purposes -- NOT your Fund's
actual return -- the account values shown may not apply to your specific
investment.
June 30, 2008 59 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
DISCLOSURE OF FUND EXPENSES
Beginning Ending Expenses
Account Account Annualized Paid
Value Value Expense During
1/1/08 6/30/08 Ratios Period*
--------- --------- ---------- --------
STRATEGIC GROWTH FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $ 875.30 1.07% $4.99
HYPOTHETICAL 5% RETURN 1,000.00 1,019.54 1.07 5.37
LARGE CAP CORE EQUITY FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $ 882.40 1.05% $4.91
HYPOTHETICAL 5% RETURN 1,000.00 1,019.64 1.05 5.27
HIGH GRADE INCOME FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,013.90 0.76% $3.81
HYPOTHETICAL 5% RETURN 1,000.00 1,021.08 0.76 3.82
HAWAII MUNICIPAL BOND FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,004.50 0.55% $2.74
HYPOTHETICAL 5% RETURN 1,000.00 1,022.13 0.55 2.77
HAWAII MUNICIPAL BOND FUND -- CLASS A
ACTUAL FUND RETURN $1,000.00 $ 994.30 0.80% $3.97
HYPOTHETICAL 5% RETURN 1,000.00 1,020.89 0.80 4.02
MONEY MARKET FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,013.70 0.50% $2.50
HYPOTHETICAL 5% RETURN 1,000.00 1,022.38 0.50 2.51
MONEY MARKET FUND -- CLASS A
ACTUAL FUND RETURN $1,000.00 $1,012.50 0.75% $3.75
HYPOTHETICAL 5% RETURN 1,000.00 1,021.13 0.75 3.77
TREASURY MONEY MARKET FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,009.40 0.44% $2.20
HYPOTHETICAL 5% RETURN 1,000.00 1,022.68 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 182/366 (to reflect
the one-half year period).
Bishop Street Funds 60
Bishop Street Funds (UNAUDITED)
APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
Pursuant to Section 15(c) of the Investment Company Act of 1940 (the "1940
Act"), the Board of Trustees (the "Board") of Bishop Street Funds (the "Trust")
must annually review and re-approve the existing Advisory Agreement and
Sub-Advisory Agreements (the "Agreements") after their initial two-year terms:
(i) by the vote of the Trustees or by a vote of the shareholders of each Fund;
and (ii) by the vote of a majority of the Trustees who are not parties to the
Agreements or "interested persons" of any party thereto, as defined in the 1940
Act (the "Independent Trustees"), cast in person at a meeting called for the
purpose of voting on such approval. Each year, the Board calls and holds a
meeting to decide whether to renew the Agreements for additional one-year terms.
In preparation for the meeting, the Board requests and reviews a wide variety of
information from Bishop Street Capital Management, BNP Paribas Asset Management
and Lotsoff Capital Management (each, an "Adviser," and, collectively, the
"Advisers"). The Trustees use this information, as well as other information
that the Advisers and other service providers of the Funds may submit to the
Board, to help them decide whether to renew the Agreements for an additional
year.
Prior to this year's meeting held on February 19-20, 2008, the Board, including
the Independent Trustees advised by their independent legal counsel, received
and reviewed written materials from the Advisers regarding, among other things:
(i) the nature, extent and quality of the services to be provided by the
Advisers; (ii) the investment performance of the Funds and the Advisers; (iii)
the costs of the services to be provided and profits to be realized by the
Advisers and their affiliates from their relationship with the Funds; (iv) the
extent to which economies of scale would be realized as the Funds grow; and (v)
whether fee levels reflect these economies of scale for the benefit of Fund
investors, as discussed in further detail below.
At the meeting, representatives from the Advisers, along with other Fund service
providers, presented additional oral and written information to help the Board
evaluate the Advisers' fees and other aspects of the Agreements. Among other
things, the representatives presented an overview of the Advisers, discussing
each Adviser's investment personnel, assets under management and investment
process. The Trustees then discussed the written materials that the Board
received before the meeting and the Advisers' oral presentations and any other
information that the Board received at the
June 30, 2008 61 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED)
meeting, and deliberated on the renewal of the Agreements in light of this
information. In its deliberations, the Board considered the factors and reached
the conclusions described below relating to the selection of the Advisers and
the re-approval of the Agreements, and did not identify any single piece of
information discussed below that was all-important, controlling or determinative
of its decision.
NATURE, EXTENT, AND QUALITY OF SERVICES PROVIDED BY THE ADVISER
In considering the quality, nature and extent of the services provided by the
Advisers, the Board reviewed the portfolio management services provided by each
Adviser to its respective Fund(s), including the quality and continuity of each
Adviser's portfolio management personnel. The most recent investment adviser
registration form ("Form ADV") for each Adviser was provided to the Board, as
was the response of each Adviser to a detailed series of questions which
included, among other things, information about the background and experience of
the portfolio managers primarily responsible for the day-to-day management of
each respective Fund.
The Trustees also considered other services to be provided by each Adviser to
its respective Fund(s) by the Advisers, such as selecting broker-dealers for
executing portfolio transactions, monitoring adherence to the Funds' investment
restrictions, and monitoring compliance with various Fund policies and
procedures and with applicable securities regulations. Based on the factors
above, as well as those discussed below, the Board concluded that it was
satisfied with the nature, extent and quality of the services provided to the
Funds by the Advisers.
INVESTMENT PERFORMANCE OF THE FUND AND THE ADVISER
The Board was provided with information regarding each Fund's performance since
the Agreements were last renewed and since inception. The Board also compared
each Fund's performance to its benchmark index and other similar mutual funds
over various periods of time. Each Adviser provided information regarding and
led a discussion of factors impacting the performance of its respective Fund(s)
over the past year, focusing on its investment approach and general economic
factors. Based on this information, the Board concluded that the Bishop Street
Treasury Money Market Fund and the Bishop Street Large Cap Core Equity Fund's
performance was favorable and that the
Bishop Street Funds 62
Bishop Street Funds (UNAUDITED)
Bishop Street High Grade Income Fund and the Bishop Street Money Market Fund's
performance was comparable to their peer groups, and was overall satisfied with
the investment results that each Adviser had been able to achieve for the
respective Fund(s). Although the Bishop Street Hawaii Municipal Bond Fund
underperformed its benchmark, a national municipal bond index, the Board took
into account that the Fund's performance compared favorably to a peer group of
similar Hawaii municipal debt funds and, therefore, concluded it was overall
satisfied with the investment result that the Adviser had been able to achieve
for the Fund.
COSTS OF ADVISORY SERVICES, PROFITABILITY AND ECONOMIES OF SCALE
In concluding that the advisory fees payable by each Fund were reasonable, the
Trustees reviewed a report of the fees paid to each Adviser and the costs and
other expenses incurred by each Adviser in providing advisory services. The
Advisers' representatives then discussed the profits realized by the Advisers
from their relationship with the Fund. The Trustees considered the information
provided and concluded that such profits were not excessive. The Trustees also
reviewed reports comparing the expense ratio and advisory fee paid by each Fund
to those paid by other comparable mutual funds and concluded that the advisory
fees were the result of arm's length negotiations, appeared reasonable in light
of the services rendered and, after waivers, were comparable to the average
advisory fees paid by similarly managed mutual funds. In addition, the Board
considered whether economies of scale were realized during the current contract
period, but did not conclude that such economies of scale had yet been achieved
with respect to the Funds.
Based on the Board's deliberations and its evaluation of the information
described above, the Board, including all of the Independent Trustees,
unanimously: (a) concluded that terms of each Agreement are fair and reasonable;
(b) concluded that each Adviser's fees are reasonable in light of the services
that each Adviser provides to the respective Fund(s); and (c) agreed to renew
each Agreement for another year.
June 30, 2008 63 www.bishopstreetfunds.com
NOTES
[GRAPHIC]
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)
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) BISHOP STREET FUNDS
P.O. BOX 219721
KANSAS CITY, MO 64121-9721
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-004-1400
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/ Philip T. Masterson
------------------------
Philip T. Masterson, President
Date: September 4, 2008
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/ Philip T. Masterson
------------------------
Philip T. Masterson, President
Date: September 4, 2008
By (Signature and Title)* /s/ Michael Lawson
------------------------
Michael Lawson
Controller & CFO
Date: September 4, 2008
* Print the name and title of each signing officer under his or her signature.