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, 2009
DATE OF REPORTING PERIOD: JUNE 30, 2009
ITEM 1. REPORTS TO STOCKHOLDERS.
(GRAPHIC)
BISHOP STREET FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 2009
STRATEGIC GROWTH FUND
LARGE CAP CORE EQUITY FUND
HIGH GRADE INCOME FUND
HAWAII MUNICIPAL BOND FUND
GOVERNMENT 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
Government 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 .............................................. 61
APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS .............. 63
1
BISHOP STREET
LETTER TO SHAREHOLDERS
FUNDS
(PHOTO OF MICHAEL K. HIRAI)
Dear Shareholder:
The past eighteen months have proven to be a truly tumultuous period in the
history of the financial markets. A deepening credit crisis and massive bank and
business failures created a state of panic forcing the hands of central banks
around the world in a desperate attempt to avert a global financial meltdown.
Perhaps even more shocking was the discovery of a number of financial scandals
so large that they have left even deeper scars and destruction on the financial
landscape. Over this period, the equity markets declined more than 50% from
their October 2007 highs, driving the economy into a deep and prolonged
recession - one not witnessed in generations. And although the future looks
bleak, there does appear to be a light at the end of the tunnel. At least we
think so.
A LIGHT AT THE END OF THE TUNNEL?
Investors approached the New Year with much trepidation following the shocking
events of 2008. The credit markets continued to contract as equity and commodity
markets around the world fell in a synchronous fashion. Investors continued to
seek solace in the safety of the treasury markets much more concerned about the
return of capital rather than the return on capital. Following a 37% decline in
2008, the U.S. stock market declined further, falling another 24% in the first
65 days of the year. Since the March 6, 2009 low, the U.S. equity markets soared
+36% eking out a +3.2% return in the first half of 2009.
AN APPETITE FOR RISK
Meanwhile, the fixed income markets continued to provide a positive environment
for investors with the broad market indices generating a +1.9% return
year-to-date, building upon the +5.2% return realized in 2008. But an even more
surprising development in the bond market was the strong performance registered
in the corporate sector as U.S. credit generated a +6.9% return in the
Bishop Street Funds
2
(BISHOP STREET FUNDS LOGO)
first six months with lower quality credits significantly outperforming both
U.S. treasuries and government issues. This was particularly evident in the high
yield bond markets as non-investment grade bonds gained more than +30% in 2009,
well ahead of most asset classes.
BALANCE AND FOCUS REMAIN IMPORTANT KEYS TO INVESTING
These past six months have proven the importance of balance and focus in
investing successfully over the long term. Although last year was truly
disappointing for equity investors, our main focus on a diversified mix of
stocks, bonds, and money market funds has once again proven to be key to
reaching your goals. Recent events have only given us more reason to pause and
reflect again on our long-term investment goals as well as our tolerances for
risk.
The Bishop Street Funds continue to offer you selected stock, bond and money
market alternatives that should be included in your overall investment program.
Many of the stock fund holdings in the Strategic Growth Fund and the Large Cap
Core Equity Fund continue to have extremely attractive earnings and income
potential enhancing their long-term growth potential. Our High Grade Income and
Hawaii Municipal Bond Funds hold high-quality fixed income securities that
provide you with stable and predictable income cash flows and our money market
funds provide stable values and safety.
Thank you for your continued trust and confidence in Bishop Street Capital
Management.
Sincerely,
/s/ Michael K. Hirai
Michael K. Hirai, CFA, CPA
President and Chief Investment Officer
July 15, 2009
June 30, 2009 www.bishopstreetfunds.com
3
Strategic Growth Fund (UNAUDITED)
TOP TEN EQUITY HOLDINGS+
Percentage of
Investments
-------------
1. Oracle 2.3%
2. Microsoft 2.2%
3. Western Digital 2.2%
4. Hewlett-Packard 2.2%
5. Thermo Fisher Scientific 2.2%
6. Symantec 2.2%
7. Red Hat 2.2%
8. Amgen 2.2%
9. ACE 2.1%
10. Suncor Energy 2.1%
SECTOR WEIGHTINGS+
(PERFORMANCE GRAPH)
Information Technology 24.9%
Industrials 19.4%
Health Care 16.5%
Consumer Discretionary 13.7%
Energy 9.7%
Financials 7.9%
Consumer Staples 6.1%
Materials 1.8%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Market
Value
Shares (000)
------ ----------
COMMON STOCK -- 100.1%
CONSUMER DISCRETIONARY -- 13.7%
17,300 Apollo Group, Cl A* $ 1,230
31,383 Best Buy 1,051
56,000 GameStop, Cl A* 1,233
22,400 McDonald's 1,288
20,700 Nike, Cl B 1,072
39,500 TJX 1,243
37,500 Yum! Brands 1,250
----------
8,367
----------
Bishop Street Funds
4
Strategic Growth Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
CONSUMER STAPLES -- 6.1%
37,713 CVS $ 1,202
22,400 General Mills 1,255
28,900 Philip Morris International 1,260
----------
3,717
----------
ENERGY -- 9.8%
32,800 National Oilwell Varco* 1,071
17,600 Occidental Petroleum 1,158
30,100 Southwestern Energy* 1,169
42,900 Suncor Energy 1,302
16,821 Transocean* 1,250
----------
5,950
----------
FINANCIALS -- 7.9%
29,600 ACE 1,309
3,558 CME Group, Cl A 1,107
53,100 Nasdaq Stock Market* 1,132
27,400 State Street 1,293
----------
4,841
----------
HEALTH CARE -- 16.5%
17,700 Aetna 443
24,800 Amgen* 1,313
23,900 Baxter International 1,266
17,400 Becton Dickinson 1,241
18,000 Express Scripts, Cl A* 1,237
21,800 Genzyme* 1,214
25,500 Gilead Sciences* 1,194
14,300 Quest Diagnostics 807
32,700 Thermo Fisher Scientific* 1,333
----------
10,048
----------
INDUSTRIALS -- 19.4%
20,300 Danaher 1,253
6,500 First Solar* 1,054
43,800 Iron Mountain* 1,259
27,800 ITT 1,237
14,800 Lockheed Martin 1,194
23,000 Stericycle* 1,185
43,200 Tyco International 1,122
23,500 Union Pacific 1,224
21,200 United Technologies 1,102
14,500 W.W. Grainger 1,187
----------
11,817
----------
June 30, 2009 www.bishopstreetfunds.com
5
Strategic Growth Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
INFORMATION TECHNOLOGY -- 24.9%
48,900 Broadcom, Cl A* $ 1,212
2,700 Google, Cl A* 1,138
35,100 Hewlett Packard 1,357
60,200 MEMC Electronic Materials* 1,072
57,700 Microsoft 1,371
64,500 Oracle 1,382
26,700 Qualcomm 1,207
65,900 Red Hat* 1,327
85,600 Symantec* 1,332
56,900 Texas Instruments 1,212
51,400 Western Digital* 1,362
73,193 Western Union 1,200
----------
15,172
----------
MATERIALS -- 1.8%
14,500 Monsanto 1,078
----------
TOTAL COMMON STOCK (Cost $64,652) 60,990
----------
TOTAL INVESTMENTS (Cost $64,652) -- (100.1%) $ 60,990
==========
PERCENTAGES ARE BASED ON NET ASSETS OF $60,943 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
CL -- CLASS
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. Microsoft 2.3%
2. Chevron 2.0%
3. Johnson & Johnson 1.9%
4. Apple 1.7%
5. JPMorgan Chase 1.7%
6. AT&T 1.6%
7. Cisco Systems 1.5%
8. Google 1.5%
9. Wal-Mart Stores 1.4%
10. Hewlett-Packard 1.4%
SECTOR WEIGHTINGS+
(PERFORMANCE GRAPH)
Information Technology 19.0%
Health Care 15.2%
Financials 13.2%
Energy 12.7%
Consumer Staples 10.8%
Consumer Discretionary 9.9%
Industrials 9.8%
Telecommunication Services 3.2%
Materials 3.0%
Utilities 2.0%
Short-Term Investments 0.9%
Exchange Traded Fund 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 -- 99.7%
CONSUMER DISCRETIONARY -- 10.0%
3,800 Apollo Group, Cl A* $ 270
6,060 Bed Bath & Beyond*(A) 186
7,510 Best Buy (A) 252
6,200 Carnival 160
6,880 Coach 185
23,400 Comcast, Cl A 339
13,800 DISH Network, Cl A* 224
June 30, 2009 www.bishopstreetfunds.com
7
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
CONSUMER DISCRETIONARY -- (CONTINUED)
14,580 Expedia* $ 220
10,000 GameStop, Cl A* 220
13,100 International Game Technology 208
8,030 Johnson Controls (A) 175
5,700 Kohl's*(A) 244
14,960 Lowe's 290
25,680 News, Cl A 234
4,600 Nike, Cl B 238
11,500 Staples (A) 232
5,511 Time Warner Cable, Cl A (A) 175
10,086 Time Warner 254
3,800 VF 210
6,600 Yum! Brands 220
----------
4,536
----------
CONSUMER STAPLES -- 10.9%
17,300 Archer Daniels Midland 463
13,460 CVS 429
6,600 Kimberly-Clark 346
11,580 PepsiCo (A) 637
13,650 Philip Morris International 595
14,120 Procter & Gamble 722
17,220 SYSCO 387
21,950 Tyson Foods, Cl A (A) 277
11,130 Walgreen (A) 327
16,400 Wal-Mart Stores 794
----------
4,977
----------
ENERGY -- 12.8%
6,254 Anadarko Petroleum 284
4,878 Apache 352
13,050 Chesapeake Energy (A) 259
16,990 Chevron 1,126
5,800 Consol Energy 197
5,480 Devon Energy 299
35,000 El Paso 323
6,700 Exxon Mobil 468
11,300 Halliburton 234
12,990 Marathon Oil 391
7,820 National Oilwell Varco* 255
12,160 Nexen (A) 263
5,240 Noble Energy (A) 309
8,510 Noble 258
Bishop Street Funds
8
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
ENERGY -- (CONTINUED)
6,000 Range Resources $ 249
15,172 Valero Energy 256
8,160 XTO Energy 311
----------
5,834
----------
FINANCIALS -- 13.3%
4,306 ACE 190
8,900 Aflac 277
9,500 Allstate 232
6,800 Annaly Capital Management+ 103
53,094 Bank of America (A) 701
10,700 Bank of New York Mellon 314
2,200 Boston Properties+ (A) 105
2,800 Capital One Financial (A) 61
4,400 Chubb 176
46,110 Citigroup (A) 137
485 CME Group, Cl A 151
5,500 Equity Residential (B) 122
1,900 Goldman Sachs Group 280
10,400 Host Hotels & Resorts+ (A) 87
2,300 IntercontinentalExchange* (A) 263
27,770 JPMorgan Chase 947
22,400 Keycorp (A) 117
4,217 Loews 116
6,870 MetLife 206
10,360 Morgan Stanley (A) 295
9,490 State Street 448
5,730 Travelers 235
19,832 Wells Fargo (A) 481
----------
6,044
----------
HEALTH CARE -- 15.3%
9,507 Abbott Laboratories 447
11,470 Aetna 287
4,967 Allergan 236
6,700 Amgen* 355
19,100 Bristol-Myers Squibb 388
6,520 Celgene* 312
2,600 Cephalon* (A) 147
11,600 Forest Laboratories* 291
5,080 Genzyme* 283
9,370 Gilead Sciences* 439
18,760 Johnson & Johnson 1,066
June 30, 2009 www.bishopstreetfunds.com
9
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
HEALTH CARE -- (CONTINUED)
7,840 McKesson $ 345
10,030 Medtronic 350
19,880 Pfizer (A) 298
14,860 Schering Plough 373
8,630 St. Jude Medical* 355
8,700 Thermo Fisher Scientific* 355
12,580 UnitedHealth Group 314
5,200 Varian Medical Systems* 183
3,317 Wyeth 151
----------
6,975
----------
INDUSTRIALS -- 9.9%
9,700 Boeing (A) 412
8,320 Caterpillar (A) 275
8,710 Deere (A) 348
8,000 Fluor 410
58,227 General Electric 683
7,114 Illinois Tool Works 266
3,210 L-3 Communications Holdings, Cl 3 223
7,330 Norfolk Southern (A) 276
4,967 Parker Hannifin 213
4,110 Precision Castparts 300
7,950 Rockwell Collins 332
8,100 Union Pacific (A) 422
6,800 United Technologies 353
----------
4,513
----------
INFORMATION TECHNOLOGY -- 19.2%
4,400 Accenture, Cl A 147
8,720 Adobe Systems* (A) 247
6,670 Apple* 950
9,800 Broadcom, Cl A* (A) 243
45,770 Cisco Systems* 853
7,500 Cognizant Technology Solutions, Cl A* 200
16,460 Corning 264
20,610 EMC*(A) 270
4,400 Fiserv* 201
2,000 Google, Cl A* 843
19,580 Hewlett-Packard 757
24,620 Intel (A) 408
52,280 Microsoft 1,243
34,470 Oracle 738
14,770 Qualcomm 668
Bishop Street Funds
10
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
INFORMATION TECHNOLOGY -- (CONTINUED)
3,100 Research In Motion* $ 220
18,350 Symantec* 286
10,070 Xilinx (A) 206
----------
8,744
----------
MATERIALS -- 3.1%
14,900 Dow Chemical (A) 240
5,720 Freeport-McMoRan Copper & Gold (A) 287
3,100 Monsanto 230
5,400 Mosaic 239
15,490 Teck Cominco, Cl B 247
4,300 United States Steel (A) 154
----------
1,397
----------
TELECOMMUNICATION SERVICES -- 3.2%
35,810 AT&T 889
9,400 NII Holdings* 179
13,230 Verizon Communications (A) 407
----------
1,475
----------
UTILITIES -- 2.0%
2,400 Entergy 186
5,290 Exelon (A) 271
3,635 FPL Group 206
8,720 Questar 271
----------
934
----------
TOTAL COMMON STOCK (Cost $57,244) 45,429
----------
EXCHANGE TRADED FUND -- 0.3%
1,265 SPDR Trust, Ser 1 (A) 116
----------
TOTAL EXCHANGE TRADED FUND (Cost $142) 116
----------
June 30, 2009 www.bishopstreetfunds.com
11
Large Cap Core Equity Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Market
Value
Shares (000)
------ ----------
CASH EQUIVALENTS (C) -- 21.2%
2,104,518 AIM Liquid Asset Portfolio, Institutional Shares, 0.522% (B) $ 2,104
201,755 Dreyfus Cash Management Fund, Institutional Shares, 0.457% 202
1,618,860 Dreyfus Institutional Cash Advantage Fund, 0.479% (B) 1,619
1,942,632 Federated Prime Obligation Fund, 0.438% (B) 1,943
201,755 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 0.714% 202
1,942,632 Fidelity Prime Money Market, Institutional Shares, 0.521% (B) 1,943
647,544 JPMorgan Prime Money Market Fund, 0.444% (B) 647
1,018,076 Merrill Lynch Select Institutional Fund, 0.465% (B) 1,018
----------
TOTAL CASH EQUIVALENTS (Cost $9,678) 9,678
----------
TOTAL INVESTMENTS (Cost $67,064) -- (121.2%) $ 55,223
==========
PERCENTAGES ARE BASED ON NET ASSETS OF $45,570 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
(A) THIS SECURITY OR PORTION OF THIS SECURITY WAS ON LOAN AT JUNE 30, 2009. THE
TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2009 WAS $9,048
($ THOUSANDS).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES ON
LOAN. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2009 WAS $9,274
($ THOUSANDS).
(C) THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2009.
+ REAL ESTATE INVESTMENT TRUST
CL -- CLASS
SER -- SERIES
SPDR -- STANDARD & POOR'S DEPOSITORY RECEIPTS
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. Citibank Credit Card Issuance Trust 2.700% 06/23/13 1.8%
2. Potash Corp of Saskatchewan 5.250% 05/15/14 1.6%
3. FNMA 3.750% 03/25/33 1.5%
4. General Electric Capital MTN 5.450% 01/15/13 1.5%
5. FHLMC MTN 4.250% 05/22/13 1.4%
6. Chase Issuance Trust 1.111% 06/15/12 1.4%
7. Rio Tinto Finance USA 9.000% 05/01/19 1.3%
8. U.S. Treasury Bond 7.250% 05/15/16 1.3%
9. IBM 8.375% 11/01/19 1.3%
10. U.S. Treasury Inflation-Protected Security 2.125% 01/15/19 1.2%
SECTOR WEIGHTINGS+
(PERFORMANCE GRAPH)
Financials 20.8%
U.S. Government Agency Obligations 11.9%
Materials 8.4%
Information Technology 7.5%
Consumer Discretionary 7.3%
U.S. Government Mortgage-Backed Obligations 6.4%
Industrials 5.8%
Health Care 5.5%
Energy 5.3%
Asset-Backed Securities 5.0%
Consumer Staples 4.7%
Telecommunication Services 4.5%
U.S. Treasury Obligations 4.0%
Municipal Bonds 1.8%
Short-Term Investments 1.1%
+ 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 -- 69.5%
AEROSPACE & DEFENSE -- 2.1%
Emerson Electric (C)
$ 500 5.250%, 10/15/18 $ 512
Rockwell Automation
800 6.700%, 01/15/28 832
United Technologies
1,200 6.350%, 03/01/11 1,285
----------
2,629
----------
June 30, 2009 www.bishopstreetfunds.com
13
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
AUTO FINANCE -- 1.9%
Capital One Financial
$ 1,000 7.375%, 05/23/14 $ 1,031
Toyota Motor Credit
1,200 5.450%, 05/18/11 1,256
----------
2,287
----------
BANKS -- 10.3%
American Express Bank
600 5.500%, 04/16/13 589
Australia & New Zealand Banking Group (A)
1,500 0.893%, 06/18/12 1,493
Bank of America (A) (C)
1,325 0.989%, 06/22/12 1,343
Bank of Oklahoma (A)
500 5.750%, 05/15/17 440
Barclays Bank PLC
1,150 6.750%, 05/22/19 1,141
BHP Billiton Finance
950 5.250%, 12/15/15 989
HSBC Holdings PLC
1,375 6.800%, 06/01/38 1,382
JPMorgan Chase
500 4.650%, 06/01/14 499
JPMorgan Chase (C)
1,400 5.875%, 06/13/16 1,349
Rio Tinto Finance USA (C)
1,700 9.000%, 05/01/19 1,890
Wells Fargo (C)
1,600 4.375%, 01/31/13 1,614
----------
12,729
----------
BEVERAGES -- 1.2%
PepsiCo
1,450 4.650%, 02/15/13 1,522
----------
BROADCASTING & CABLE -- 1.1%
Comcast Cable Holdings
1,200 7.875%, 08/01/13 1,365
----------
Bishop Street Funds
14
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
CHEMICALS -- 4.1%
Dow Chemical
$ 1,200 8.550%, 05/15/19 $ 1,202
Monsanto
1,400 7.375%, 08/15/12 1,601
Potash Corp of Saskatchewan
2,150 5.250%, 05/15/14 2,219
----------
5,022
----------
COMPUTER HARDWARE -- 6.3%
Cisco Systems (C)
1,500 5.500%, 02/22/16 1,589
Dell
400 5.625%, 04/15/14 422
Hewlett-Packard (C)
1,375 4.500%, 03/01/13 1,430
IBM
1,500 8.375%, 11/01/19 1,853
Nokia
1,250 5.375%, 05/15/19 1,265
Oracle
1,200 5.250%, 01/15/16 1,256
----------
7,815
----------
CONSUMER DISCRETIONARY -- 3.1%
Costco Wholesale (C)
1,100 5.500%, 03/15/17 1,164
Home Depot
1,400 5.875%, 12/16/36 1,235
Wal-Mart Stores
1,300 5.375%, 04/05/17 1,383
----------
3,782
----------
FINANCIALS -- 10.9%
Bank of New York Mellon (C)
1,325 4.300%, 05/15/14 1,347
Bear Stearns LLC
1,500 7.250%, 02/01/18 1,581
Boeing Capital (C)
1,400 6.500%, 02/15/12 1,536
BP Capital Markets PLC
725 3.625%, 05/08/14 723
June 30, 2009 www.bishopstreetfunds.com
15
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
FINANCIALS -- (CONTINUED)
Bunge Finance
$ 1,300 8.500%, 06/15/19 $ 1,359
General Electric Capital MTN, Ser A
2,050 5.450%, 01/15/13 2,104
Goldman Sachs Group (C)
1,100 7.500%, 02/15/19 1,178
Jefferies Group
675 6.250%, 01/15/36 466
John Deere Capital
550 7.000%, 03/15/12 604
Morgan Stanley MTN
1,050 6.000%, 05/13/14 1,063
Morgan Stanley (C)
1,300 7.300%, 05/13/19 1,348
State Street
250 4.300%, 05/30/14 247
----------
13,556
----------
HEALTH CARE -- 1.1%
Johnson & Johnson
1,200 6.950%, 09/01/29 1,414
----------
HOUSEHOLD DURABLES -- 0.8%
Whirlpool MTN
1,000 8.600%, 05/01/14 1,045
----------
HOUSEHOLD PRODUCTS -- 1.4%
Procter & Gamble
1,300 8.000%, 10/26/29 1,684
----------
INDUSTRIALS -- 0.5%
Burlington Northern Santa Fe
650 5.650%, 05/01/17 663
----------
MACHINERY -- 1.2%
Caterpillar
1,250 7.900%, 12/15/18 1,442
----------
MEDIA -- 1.9%
News America
1,000 6.650%, 11/15/37 900
Walt Disney MTN
1,300 6.200%, 06/20/14 1,449
----------
2,349
----------
Bishop Street Funds
16
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
MOVIES & ENTERTAINMENT -- 3.0%
Comcast
$ 1,000 6.500%, 01/15/17 $ 1,061
Time Warner
1,200 7.700%, 05/01/32 1,179
Time Warner Cable (C)
1,350 8.250%, 04/01/19 1,532
----------
3,772
----------
OFFICE ELECTRONICS -- 1.1%
Xerox (C)
1,350 8.250%, 05/15/14 1,404
----------
OIL & GAS -- EXPLORATION/PRODUCTION -- 2.8%
Anadarko Petroleum
1,250 7.200%, 03/15/29 1,139
Devon Energy
1,200 5.625%, 01/15/14 1,264
Occidental Petroleum (C)
1,000 6.750%, 01/15/12 1,090
----------
3,493
----------
OIL & GAS -- INTEGRATED -- 2.5%
Atlantic Richfield
1,385 9.125%, 03/01/11 1,540
ConocoPhillips (C)
1,500 4.750%, 10/15/12 1,580
----------
3,120
----------
PHARMACEUTICALS -- 5.4%
Abbott Laboratories
1,400 5.600%, 05/15/11 1,496
Bristol-Myers Squibb
680 5.450%, 05/01/18 720
Genentech
1,300 4.750%, 07/15/15 1,343
Merck
650 5.000%, 06/30/19 658
500 5.850%, 06/30/39 514
Pfizer (C)
850 6.200%, 03/15/19 930
Teva Pharmaceutical Finance LLC
1,000 5.550%, 02/01/16 1,034
----------
6,695
----------
June 30, 2009 www.bishopstreetfunds.com
17
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
RETAIL FOOD -- 1.3%
McDonald's MTN (C)
$ 1,525 4.125%, 06/01/13 $ 1,569
----------
STEEL & STEEL WORKS -- 2.0%
ArcelorMittal (C)
1,050 9.850%, 06/01/19 1,133
Nucor
1,300 4.875%, 10/01/12 1,353
----------
2,486
----------
TELECOMMUNICATIONS -- 2.7%
AT&T
500 5.800%, 02/15/19 508
AT&T Wireless Services
1,300 8.125%, 05/01/12 1,455
Verizon Wireless Capital LLC
1,300 5.550%, 02/01/14 1,380
----------
3,343
----------
TRANSPORTATION SERVICES -- 0.8%
Canadian Pacific Railway
1,000 7.250%, 05/15/19 1,038
----------
TOTAL CORPORATE OBLIGATIONS (Cost $83,692) 86,224
----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 11.9%
FHLB
1,000 6.000%, 07/10/13 1,001
1,000 4.875%, 12/14/12 1,087
FHLMC
875 8.250%, 06/01/16 1,017
1,000 5.875%, 05/23/16 1,070
1,100 5.000%, 01/30/14 1,194
800 4.000%, 06/12/13 836
1,100 3.250%, 02/18/14 1,094
FHLMC MTN
1,000 5.000%, 10/27/14 1,091
1,900 4.250%, 05/22/13 2,020
FNMA
1,500 5.750%, 05/11/22 1,542
1,400 5.550%, 02/16/17 1,430
600 5.500%, 11/17/16 610
700 5.000%, 03/02/15 758
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $14,235) 14,750
----------
Bishop Street Funds
18
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 6.4%
FHLMC REMIC, Ser 2844, Cl VB
$ 173 5.500%, 12/15/19 $ 176
FHLMC REMIC, Ser 3070, Cl DH
65 5.500%, 11/15/35 66
FHLMC REMIC, Ser 3196, Cl CB
554 5.250%, 08/15/11 570
FHLMC REMIC, Ser R010, Cl AB
814 5.500%, 12/15/19 837
FNMA
860 5.000%, 10/01/23 891
567 3.500%, 08/01/10 578
FNMA REMIC, Ser B1, Cl BE
969 5.450%, 12/25/20 1,018
FNMA, Ser 33, Cl AB
2,116 3.750%, 03/25/33 2,111
FNMA, Ser 84, Cl KA
230 5.000%, 09/25/36 232
GNMA, Ser 7, Cl PE
1,400 5.500%, 11/16/31 1,453
----------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $7,725) 7,932
----------
ASSET-BACKED SECURITIES -- 5.0%
Capital One Multi Asset Execution Trust
1,600 3.200%, 04/15/14 1,612
Chase Issuance Trust, Cl A5 (A)
2,000 1.111%, 06/15/12 2,000
Citibank Credit Card Issuance Trust, Cl A3 (A)
2,600 2.700%, 06/23/13 2,606
----------
TOTAL ASSET-BACKED SECURITIES (Cost $6,196) 6,218
----------
U.S. TREASURY OBLIGATIONS -- 4.0%
U.S. Treasury Bond (C)
1,500 7.250%, 05/15/16 1,880
U.S. Treasury Inflation-Protected Security
1,700 2.125%, 01/15/19 1,744
U.S. Treasury Notes
500 4.125%, 08/31/12 537
800 3.125%, 05/15/19 (C) 774
----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $4,666) 4,935
----------
June 30, 2009 www.bishopstreetfunds.com
19
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Market
(000)/ Value
Shares (000)
------ ----------
MUNICIPAL BONDS -- 1.8%
MUNICIPAL -- 1.8%
Michigan Municipal Bond Authority, RB, Merrill Lynch Insured (A)
$ 500 6.411%, 09/01/48 $ 500
New Jersey State, Turnpike Authority, Ser B, RB, AMBAC
Insured, Pre-Refunded @ 100 (B)
1,250 4.252%, 01/01/15 1,250
New Mexico Mortgage Finance Authority, RB, AMT,
GNMA/FNMA/FHLMC Collateral
500 4.200%, 07/01/28 493
----------
TOTAL MUNICIPAL BONDS (Cost $2,260) 2,243
----------
CASH EQUIVALENTS (E) -- 16.7%
4,395,482 AIM Liquid Asset Portfolio, Institutional Shares, 0.522% (D) 4,396
700,962 Dreyfus Cash Management Fund, Institutional Shares, 0.457% 701
3,381,140 Dreyfus Institutional Cash Advantage Fund, 0.479% (D) 3,381
4,057,368 Federated Prime Obligation Fund, 0.438% (D) 4,057
700,962 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 0.714% 701
4,057,368 Fidelity Prime Money Market, Institutional Shares, 0.521% (D) 4,057
1,352,456 JPMorgan Prime Money Market Fund, 0.444% (D) 1,353
2,126,348 Merrill Lynch Select Institutional Fund, 0.465% (D) 2,126
----------
TOTAL CASH EQUIVALENTS (Cost $20,772) 20,772
----------
TOTAL INVESTMENTS (Cost $139,546) -- (115.3%) $ 143,074
==========
Bishop Street Funds
20
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
PERCENTAGES ARE BASED ON NET ASSETS OF $124,082 ($ THOUSANDS).
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS
IS THE RATE IN EFFECT ON JUNE 30, 2009. THE MATURITY DATE SHOWN IS THE NEXT
SCHEDULED RESET DATE.
(B) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
(C) THIS SECURITY OR PORTION OF THIS SECURITY WAS ON LOAN AT JUNE 30, 2009. THE
TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2009 WAS $18,943
($ THOUSANDS).
(D) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES ON
LOAN. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2009 WAS $19,370
($ THOUSANDS).
(E) THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2009.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
AMT -- ALTERNATIVE MINIMUM TAX
CL -- CLASS
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE ASSOCIATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
LLC -- LIMITED LIABILITY COMPANY
MTN -- MEDIUM TERM NOTE
PLC -- PUBLIC LIMITED COMPANY
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, 2009 www.bishopstreetfunds.com
21
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 3.4%
2. Honolulu City & County GO 5.000% 07/01/21 1.9%
3. Honolulu City & County GO 5.000% 07/01/26 1.7%
4. Hawaii State, Housing Finance & Development RB 5.350% 07/01/18 1.6%
5. Hawaii State, Highway RB 5.000% 07/01/16 1.6%
6. Honolulu City & County, Board of Water Supply RB 4.750% 07/01/14 1.4%
7. Honolulu Hawaii City & County GO 5.000% 07/01/15 1.4%
8. Hawaii State, Highway RB 5.000% 07/01/12 1.4%
9. Hawaii State, Housing Finance & Development RB 6.500% 07/01/33 1.3%
10. Hawaii State, Harbor System RB 5.750% 07/01/17 1.3%
SECTOR WEIGHTINGS+
(PERFORMANCE GRAPH)
General Obligations 48.8%
Transportation 11.8%
Water 10.7%
Housing 8.9%
General Revenue 6.4%
Airport 4.1%
Power 3.9%
Single-Family Housing 3.3%
Medical 1.0%
Short-Term Investments 0.5%
School District 0.5%
Multi-Family Housing 0.1%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
Bishop Street Funds
22
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
Face Market
Amount Value
(000) (000)
------ ----------
MUNICIPAL BONDS -- 97.8%
ARIZONA -- 1.0%
Phoenix Civic Improvement, Ser A, RB
$ 1,435 5.000%, 07/01/21 $ 1,561
----------
CALIFORNIA -- 0.2%
San Jose Evergreen Community College District, Ser B,
GO, FSA Insured (A)
1,000 5.893%, 09/01/28 320
----------
GEORGIA -- 0.5%
Main Street, Natural Gas, Ser B, RB
1,000 5.000%, 03/15/18 884
----------
HAWAII -- 84.1%
Hawaii County, Refunding & Improvement Project, Ser A,
GO, National-RE FGIC Insured
450 5.600%, 05/01/12 497
430 5.600%, 05/01/13 482
Hawaii County, Ser A, GO, AMBAC Insured
1,000 5.000%, 07/15/15 1,109
Hawaii County, Ser A, GO, FSA Insured
125 5.000%, 07/15/21 131
1,500 5.000%, 07/15/23 1,552
Hawaii County, Ser A, GO, National-RE Insured
505 5.000%, 07/15/21 537
1,000 5.000%, 07/15/22 1,053
Hawaii County, Ser A, GO, National-RE Insured
1,055 5.250%, 07/15/18 1,130
1,000 5.000%, 07/15/24 1,033
Hawaii State, Airport System, RB, AMT, National-RE FGIC Insured
1,000 5.750%, 07/01/15 1,017
280 5.250%, 07/01/21 270
Hawaii State, Airport System, Second Ser, RB, AMT, ETM
50 6.900%, 07/01/12 53
Hawaii State, Airport System, Ser B, RB, AMT, National-RE
FGIC Insured
1,500 6.625%, 07/01/18 1,527
500 6.000%, 07/01/19 502
Hawaii State, Department of Budget & Finance,
Chaminade University, RB, RADIAN Insured
1,000 4.750%, 01/01/36 711
Hawaii State, Department of Budget & Finance, Electric
Company & Subsidiary Project, Ser A, RB, AMT, FGIC Insured
750 4.800%, 01/01/25 629
June 30, 2009 www.bishopstreetfunds.com
23
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 B, RB, AMT, XLCA Insured
$ 1,025 5.000%, 12/01/22 $ 904
Hawaii State, Department of Budget & Finance, Hawaiian
Electric, Ser A, RB, AMT, AMBAC Insured
675 5.100%, 09/01/32 549
Hawaii State, Department of Budget & Finance, Hawaiian
Electric, Ser A, RB, AMT, FGIC Insured
1,000 4.650%, 03/01/37 729
Hawaii State, Department of Budget & Finance, Hawaiian
Electric, Ser A, RB, AMT, National-RE Insured
2,000 5.650%, 10/01/27 1,812
Hawaii State, Department of Budget & Finance, Hawaiian
Electric, Ser C, RB, AMT, AMBAC Insured
1,000 6.200%, 11/01/29 955
Hawaii State, Department of Budget & Finance, Mid Pacific
Institute, RB, RADIAN Insured
1,000 5.000%, 01/01/26 821
1,000 4.625%, 01/01/31 737
Hawaii State, Department of Hawaiian Home Lands,
Kapolei Office Facilities, Ser A, COP, FSA Insured
2,000 5.000%, 11/01/31 2,008
Hawaii State, Harbor System, Ser A, RB, AMT, FSA Insured
2,025 5.750%, 07/01/17 2,073
770 5.750%, 07/01/29 776
1,210 5.700%, 07/01/16 1,240
1,000 5.600%, 07/01/15 1,027
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 1,064
Hawaii State, Highway, RB, FSA Insured
2,000 5.000%, 07/01/12 2,200
Hawaii State, Highway, Ser A, RB, FSA Insured
1,725 5.000%, 07/01/21 1,807
1,565 5.000%, 07/01/22 1,631
1,805 5.000%, 07/01/23 1,871
Hawaii State, Highway, Ser B, RB, FSA Insured
2,300 5.000%, 07/01/16 2,504
Hawaii State, Housing Finance & Development, Ser A, RB,
AMT, FNMA Collateral
2,500 5.350%, 07/01/18 2,509
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
B-RMKT, RB, FSA Insured
$ 2,000 6.500%, 07/01/33 $ 2,119
Hawaii State, Housing Finance & Development,
Single-Family Housing, Ser A, RB, AMT, FNMA Collateral
620 5.400%, 07/01/30 613
Hawaii State, Housing Finance & Development,
Single-Family Housing, Ser B, RB, FNMA Collateral
1,000 5.450%, 07/01/17 1,002
Hawaii State, Kapolei Office Building, Ser A, COP, AMBAC Insured
1,475 5.250%, 05/01/13 1,488
1,000 5.000%, 05/01/16 1,009
1,000 5.000%, 05/01/17 1,010
500 5.000%, 05/01/18 505
Hawaii State, No. 1 Capitol District State Office, COP,
National RE-Insured
1,000 5.200%, 05/01/14 1,021
Hawaii State, RB
300 5.500%, 07/01/18 346
500 5.500%, 01/01/25 560
Hawaii State, Ser CL, GO, FGIC-TCRS Insured
1,000 6.000%, 03/01/11 1,072
Hawaii State, Ser CU, GO, National-RE Insured
550 5.750%, 10/01/12 580
Hawaii State, Ser CU, GO, National-RE Insured,
Pre Refunded @ 100 (B)
25 5.750%, 10/01/10 27
Hawaii State, Ser CV, GO, National-RE FGIC Insured
475 5.375%, 08/01/18 497
1,620 5.375%, 08/01/19 1,691
Hawaii State, Ser CX, GO, FSA Insured
1,000 5.500%, 02/01/16 1,067
1,000 5.500%, 02/01/21 1,048
Hawaii State, Ser CZ, GO, FSA Insured
225 5.250%, 07/01/16 240
Hawaii State, Ser DA, GO, National-RE Insured
850 5.250%, 09/01/23 894
Hawaii State, Ser DB, GO, National-RE Insured
200 5.250%, 09/01/15 220
Hawaii State, Ser DD, GO, National-RE Insured
1,500 5.250%, 05/01/15 1,675
1,000 5.000%, 05/01/16 1,091
June 30, 2009 www.bishopstreetfunds.com
25
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%, 07/01/18 $ 1,358
1,250 5.000%, 07/01/21 1,343
90 5.000%, 07/01/22 96
Hawaii State, Ser DG, GO, AMBAC Insured
1,000 5.000%, 07/01/16 1,110
Hawaii State, Ser DJ, GO, AMBAC Insured
500 5.000%, 04/01/13 554
300 5.000%, 04/01/15 336
1,425 5.000%, 04/01/17 1,594
Hawaii State, Ser DK, GO
500 5.000%, 05/01/20 545
350 5.000%, 05/01/24 370
Hawaii State, Ser DN, GO
1,000 5.500%, 08/01/26 1,089
Hawaii State, Ser DO, GO
1,000 5.000%, 08/01/16 1,125
Hawaii State, Ser DQ, GO
500 5.000%, 06/01/27 524
1,100 5.000%, 06/01/28 1,145
Honolulu City & County, 1st Board Resolution, Senior Ser
C, RB, National-RE Insured
250 5.000%, 07/01/31 252
Honolulu City & County, 2nd Board Resolution, Junior Ser
A 1, RB, National-RE Insured
815 5.000%, 07/01/22 868
630 5.000%, 07/01/23 667
Honolulu City & County, 2nd Board Resolution, Junior Ser
B 1, RB, National-RE Insured
865 5.000%, 07/01/23 916
Honolulu City & County, Board of Water Supply, Ser A, RB,
FGIC Insured, Pre-Refunded @ 100 (B)
1,700 4.750%, 07/01/14 1,919
2,000 4.750%, 07/01/14 2,258
Honolulu City & County, Board of Water Supply, Ser A, RB,
National-RE FGIC Insured
2,000 5.000%, 07/01/33 2,017
Honolulu City & County, Board of Water Supply, Ser B, RB,
AMT, National-RE Insured
1,000 5.250%, 07/01/20 924
1,000 5.250%, 07/01/21 919
325 5.000%, 07/01/15 323
Bishop Street Funds
26
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
HAWAII -- (CONTINUED)
Honolulu City & County, GO, ETM, FGIC Insured
$ 1,000 6.000%, 12/01/12 $ 1,154
Honolulu City & County, Ser A, GO, National-RE Insured
625 5.250%, 03/01/17 672
500 5.250%, 03/01/28 517
1,000 5.000%, 07/01/14 1,117
2,800 5.000%, 07/01/21 2,960
2,680 5.000%, 07/01/26 2,755
Honolulu City & County, Ser B, GO, National-RE Insured
1,500 5.000%, 07/01/16 1,661
Honolulu City & County, Ser C, GO, National-RE Insured
600 5.000%, 07/01/16 664
Honolulu City & County, Ser D, GO, National-RE Insured
885 5.000%, 07/01/19 950
1,700 5.000%, 07/01/23 1,777
Honolulu City & County, Ser E, GO, National-RE FGIC Insured
1,500 5.250%, 07/01/20 1,619
Honolulu City & County, Ser F, GO,
FSA-Credit FGIC Insured
820 5.000%, 07/01/24 853
Honolulu City & County, Waipahu Towers Project, Ser A,
RB, AMT, GNMA Collateral
195 6.900%, 06/20/35 196
Honolulu Hawaii City & County, Senior Ser A, RB,
National-RE Insured
500 5.000%, 07/01/20 533
1,000 5.000%, 07/01/36 993
Honolulu Hawaii City & County, Ser A, GO
1,000 5.000%, 04/01/33 992
Honolulu Hawaii City & County, Ser A, GO, FSA Insured
275 5.000%, 07/01/24 289
Honolulu Hawaii City & County, Ser A, GO, National-RE Insured
725 5.250%, 03/01/18 775
1,000 5.250%, 03/01/20 1,058
1,500 5.250%, 03/01/24 1,567
550 5.000%, 07/01/25 570
1,000 5.000%, 07/01/27 1,021
Honolulu Hawaii City & County, Ser A, RB, FSA Insured
1,000 5.000%, 07/01/23 1,052
1,900 5.000%, 07/01/27 1,955
Honolulu Hawaii City & County, Ser B, GO, National-RE Insured
2,000 5.000%, 07/01/15 2,217
4,950 5.000%, 07/01/17 5,362
June 30, 2009 www.bishopstreetfunds.com
27
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
HAWAII -- (CONTINUED)
Kauai County, Ser A, GO, National-RE Insured
$ 1,610 5.000%, 08/01/21 $ 1,684
1,440 5.000%, 08/01/23 1,486
Kauai County, Ser A, GO, National-RE Insured
1,500 5.000%, 08/01/25 1,523
Maui County, GO, National-RE Insured
100 5.000%, 03/01/17 108
1,100 5.000%, 03/01/24 1,151
Maui County, Hawaii, Ser A, GO, National-RE Insured
1,000 5.000%, 07/01/19 1,087
Maui County, Ser A, GO, FSA Insured
1,000 3.500%, 07/01/16 1,028
Maui County, Ser A, GO, National-RE Insured
1,000 4.750%, 07/01/25 1,020
Maui County, Ser A, GO, Pre-Refunded @ 100 (B)
225 5.375%, 03/01/11 241
Maui County, Ser B, GO, National-RE Insured
500 5.000%, 07/01/16 561
500 5.000%, 09/01/17 537
University of Hawaii, Ser A, RB
500 5.000%, 10/01/14 552
University of Hawaii, Ser A, RB, AGC MBIA Insured
1,400 5.000%, 10/01/23 1,479
University of Hawaii, Ser A, RB, FGIC Insured,
Pre Refunded @ 100 (B)
1,605 5.500%, 07/15/12 1,808
500 5.125%, 07/15/12 558
University of Hawaii, Ser A, RB, National-RE Insured
150 5.000%, 07/15/19 159
975 5.000%, 07/15/21 1,025
150 5.000%, 07/15/22 157
1,300 3.500%, 07/15/27 1,068
University of Hawaii, Ser B, RB, FSA Insured
320 5.250%, 10/01/16 335
775 5.250%, 10/01/17 807
----------
135,339
----------
ILLINOIS -- 1.0%
Chicago O'Hare International Airport, General Airport, Ser
E, RB, CIFG Insured
1,550 5.250%, 01/01/22 1,572
----------
Bishop Street Funds
28
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face Market
Amount Value
(000) (000)
------ ----------
INDIANA -- 1.2%
Indiana Finance Authority, Highway Revenue, Ser A, RB,
National-RE FGIC Insured
$ 1,200 4.500%, 06/01/27 $ 1,171
Wayne Township School Building, RB, National-RE FGIC insured
1,000 3.500%, 07/15/24 819
----------
1,990
----------
NEVADA -- 0.7%
Las Vegas New Convention & Visitors Authority, RB,
AMBAC Insured
1,055 5.000%, 07/01/28 1,052
----------
NEW MEXICO -- 0.6%
New Mexico Mortgage Finance Authority, RB, AMT,
GNMA/FNMA/FHLMC Collateral
1,050 4.200%, 07/01/28 1,036
----------
OKLAHOMA -- 2.2%
Durant Community Facilities Authority, GO, XLCA Insured
1,730 5.750%, 11/01/24 1,825
Tulsa Industrial Authority, University of Tulsa, RB
2,000 5.000%, 10/01/37 1,701
----------
3,526
----------
OREGON -- 0.6%
Oregon State, Ser C, GO
1,000 4.100%, 08/01/28 912
----------
PUERTO RICO -- 1.3%
Commonwealth of Puerto Rico, GO, National-RE Insured
1,500 6.000%, 07/01/15 1,554
Commonwealth of Puerto Rico, Public Improvement, GO,
FSA Insured, Pre-Refunded @ 100 (B)
55 5.000%, 07/01/11 59
Puerto Rico, Electric Power Authority, Ser HH, RB, FSA
Insured, Pre-Refunded @ 101 (B)
500 5.250%, 07/01/10 529
----------
2,142
----------
June 30, 2009 www.bishopstreetfunds.com
29
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Market
(000)/ Value
Shares (000)
------ ----------
SOUTH CAROLINA -- 1.3%
Edisto Beach, GO
$ 735 5.000%, 04/01/37 $ 738
Sumter South Carolina, Waterworks & Sewer Improvement
Systems, RB, XLCA Insured
500 5.000%, 12/01/21 520
840 5.000%, 12/01/24 858
----------
2,116
----------
TEXAS -- 2.8%
Alamo Community College District, GO, National-RE
FGIC Insured
1,000 4.500%, 08/15/26 979
City of El Paso Texas, GO
500 4.000%, 08/15/16 529
North Texas Tollway Authority, RB, Assured Guarantee Insured (A)
5,000 5.433%, 01/01/30 1,409
University of Texas, Permanent University Fund, Ser B, RB
1,600 4.500%, 07/01/33 1,510
----------
4,427
----------
WASHINGTON -- 0.3%
Washington State, Ser F-MTR, GO, AMBAC Insured (A)
1,000 4.618%, 12/01/25 436
----------
TOTAL MUNICIPAL BONDS (Cost $158,328) 157,313
----------
CASH EQUIVALENTS (C) -- 0.5%
408,395 Dreyfus Tax-Exempt Cash Management Fund,
Institutional Shares, 0.470% 408
408,395 Fidelity Institutional Tax-Exempt Portfolio, Institutional
Shares, 0.203% 408
----------
TOTAL CASH EQUIVALENTS (Cost $816) 816
----------
TOTAL INVESTMENTS (Cost $159,144) -- (98.3%) $ 158,129
==========
Bishop Street Funds
30
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
PERCENTAGES ARE BASED ON NET ASSETS OF $160,830 ($ 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 REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2009.
AGC -- ASSURED GUARANTEE INSURANCE
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
FHLMC -- FEDERAL HOME LOAN MORTGAGE ASSOCIATION
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
TCRS -- TAX CREDIT RETURN SUMMARY
XLCA -- XL CAPITAL COST FIGURES ARE SHOWN IN THOUSANDS.
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2009 www.bishopstreetfunds.com
31
Government Money Market Fund (UNAUDITED)
SECTOR WEIGHTINGS+
(PERFORMANCE GRAPH)
U.S. Government Agency Obligations 72.1%
U.S. Treasury Obligations 14.2%
Short-Term Investments 13.7%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Face Market
Amount Value
(000) (000)
------ ----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (A) -- 72.2%
FFCB
$ 4,500 0.308%, 07/27/09 $ 4,499
FHLB
2,500 0.316%, 11/12/09 2,497
3,000 0.230%, 09/28/09 2,998
5,000 0.210%, 08/05/09 4,999
4,100 0.210%, 09/29/09 4,098
2,000 0.205%, 09/11/09 1,999
3,000 0.200%, 08/24/09 2,999
8,000 0.190%, 08/21/09 7,998
3,148 0.180%, 08/20/09 3,147
3,000 0.170%, 07/21/09 3,000
1,200 0.155%, 07/08/09 1,200
FHLMC
15,000 0.381%, 10/05/09 14,985
7,800 0.220%, 09/23/09 7,796
5,000 0.198%, 09/28/09 4,998
5,000 0.190%, 08/17/09 4,999
3,000 0.170%, 07/14/09 3,000
4,342 0.170%, 08/24/09 4,341
2,562 0.150%, 07/06/09 2,562
FHLMC MTN
5,000 1.219%, 07/30/09 5,011
Bishop Street Funds
32
Government Money Market Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Market
(000)/ Value
Shares (000)
------ ----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (A) -- (CONTINUED)
FNMA
$ 7,000 0.551%, 07/30/09 $ 6,997
9,400 0.220%, 10/26/09 9,393
12,400 0.180%, 08/03/09 12,398
10,000 0.160%, 07/20/09 9,999
5,794 0.160%, 07/22/09 5,793
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $131,706) 131,706
----------
U.S. TREASURY OBLIGATIONS (A) -- 14.2%
U.S. Treasury Bills
10,000 0.160%, 07/16/09 9,999
8,000 0.175%, 07/30/09 7,999
2,000 0.275%, 10/01/09 1,999
4,000 0.675%, 11/19/09 3,989
2,000 0.678%, 12/17/09 1,994
----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $25,980) 25,980
----------
CASH EQUIVALENTS (B) -- 13.7%
8,255,829 AIM STIT Government & Agency Portfolio, 0.050% 8,256
8,506,005 Dreyfus Government Cash Management Fund, Institutional
Shares, 0.193% 8,506
8,255,829 Fidelity Institutional Money Market Funds, Institutional
Shares, 0.549% 8,256
----------
TOTAL CASH EQUIVALENTS (Cost $25,018) 25,018
----------
TOTAL INVESTMENTS (Cost $182,704) -- (100.1%) $ 182,704
==========
June 30, 2009 www.bishopstreetfunds.com
33
Government Money Market Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
PERCENTAGES ARE BASED ON NET ASSETS OF $182,588 ($ THOUSANDS).
(A) THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE EFFECTIVE YIELD AT
TIME OF PURCHASE.
(B) THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2009.
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE ASSOCIATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
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)
SECTOR WEIGHTINGS+
(PERFORMANCE GRAPH)
U.S. Treasury Obligations 82.0%
Short-Term Investments 18.0%
+ PERCENTAGES BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
Face
Amount Market
(000)/ Value
Shares (000)
------ ----------
U.S. TREASURY OBLIGATIONS (A) -- 82.0%
U.S. Cash Management Bills
$ 1,000 0.170%, 09/15/09 $ 1,000
U.S. Treasury Bills
7,500 0.100%, 07/16/09 7,500
3,500 0.164%, 07/23/09 3,500
7,500 0.162%, 07/30/09 7,499
2,000 0.123%, 08/06/09 2,000
6,500 0.128%, 08/13/09 6,499
3,000 0.190%, 08/20/09 2,999
1,000 0.130%, 09/03/09 1,000
6,000 0.166%, 09/10/09 5,998
3,000 0.189%, 09/24/09 2,999
3,000 0.160%, 10/08/09 2,999
1,000 0.235%, 10/22/09 999
2,000 0.235%, 11/19/09 1,998
----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $46,990) 46,990
----------
CASH EQUIVALENTS (B) -- 18.0%
3,397,456 AIM STIT-Treasury Portfolio, 0.050% 3,397
3,397,456 BlackRock Liquidity Funds Treasury Trust Fund, 0.010% 3,397
3,500,409 Dreyfus Treasury Cash Management, 0.129% 3,500
----------
TOTAL CASH EQUIVALENTS (Cost $10,294) 10,294
----------
TOTAL INVESTMENTS (Cost $57,284) -- (100.0%) $ 57,284
==========
PERCENTAGES ARE BASED ON NET ASSETS OF $57,269 ($ THOUSANDS).
(A) THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE EFFECTIVE YIELD AT
TIME OF PURCHASE.
(B) THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2009.
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2009 www.bishopstreetfunds.com
35
Bishop Street Funds (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2009
(IN THOUSANDS)
Large High
Strategic Cap Core Grade
Growth Equity Income
Fund Fund Fund
--------- -------- --------
ASSETS:
Investments, at Cost $ 64,652 $ 67,064 $139,546
======== ======== ========
Investments, at Value $ 60,990 $ 55,223(1) $143,074(1)
Receivable for Investment Securities Sold 562 -- --
Dividends and Interest Receivable 54 63 1,467
Receivable for Fund Shares Sold 2 -- 73
Prepaid Expenses 2 1 2
-------- -------- --------
Total Assets 61,610 55,287 144,616
-------- -------- --------
LIABILITIES:
Collateral on Securities Loaned -- 9,274 19,370
Payable for Fund Shares Redeemed 355 388 880
Payable for Investment Securities Purchased 174 -- --
Payable to Custodian 66 -- --
Income Distribution Payable -- -- 175
Advisory Fees Payable 38 26 41
Administrative Fees Payable 6 5 12
Shareholder Servicing Fees Payable 5 4 10
Chief Compliance Officer Fees Payable 1 1 3
Other Accrued Expenses Payable 22 19 43
-------- -------- --------
Total Liabilities 667 9,717 20,534
-------- -------- --------
Net Assets $ 60,943 $ 45,570 $124,082
======== ======== ========
Paid-in Capital $ 76,982 $ 77,309 $117,704
Undistributed (Distributions in Excess of) Net Investment Income 1 (3) (23)
Accumulated Net Realized Gain (Loss) on Investments (12,378) (19,895) 2,873
Net Unrealized Appreciation (Depreciation) on Investments (3,662) (11,841) 3,528
-------- -------- --------
Net Assets $ 60,943 $ 45,570 $124,082
======== ======== ========
Class I Shares:
Net Assets $ 60,943 $ 45,570 $124,082
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 6,499 7,088 11,761
Net Asset Value, Offering and Redemption Price Per Share
(Net Assets / Shares Outstanding) $ 9.38 $ 6.43 $ 10.55
======== ======== ========
(1) INCLUDED IN "INVESTMENTS, AT VALUE" IS THE MARKET VALUE OF SECURITIES ON
LOAN IN THE AMOUNTS OF $9,048 ($ THOUSANDS), AND $18,943 ($ 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, 2009
(IN THOUSANDS)
Hawaii Government Treasury
Municipal Money Money
Bond Market Market
Fund Fund Fund
--------- ---------- --------
ASSETS:
Investments, at Cost $159,144 $182,704 $57,284
======== ======== =======
Investments, at Value $158,129 $182,704 $57,284
Interest Receivable 3,086 15 --
Receivable for Fund Shares Sold 119 9 --
Receivable due from Investment Adviser -- 12 8
Prepaid Expenses 4 6 2
-------- -------- -------
Total Assets 161,338 182,746 57,294
-------- -------- -------
LIABILITIES:
Income Distribution Payable 395 -- --
Payable for Fund Shares Redeemed -- 79 --
Advisory Fees Payable 28 -- --
Shareholder Servicing Fees Payable 13 -- --
Administrative Fees Payable 9 18 5
Distribution Fees Payable 5 10 --
Chief Compliance Officer Fees Payable 3 4 1
Other Accrued Expenses Payable 55 47 19
-------- -------- -------
Total Liabilities 508 158 25
-------- -------- -------
Net Assets $160,830 $182,588 $57,269
======== ======== =======
Paid-in Capital $163,057 $182,547 $57,187
Undistributed Net Investment Income 9 -- 21
Accumulated Net Realized Gain (Loss) on Investments (1,221) 41 61
Net Unrealized Depreciation on Investments (1,015) -- --
-------- -------- -------
Net Assets $160,830 $182,588 $57,269
======== ======== =======
Class I Shares:
Net Assets $136,224 $131,158 $57,269
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 13,221 131,138 57,188
Net Asset Value, Offering and Redemption Price
Per Share -- Class I (Net Assets / Shares Outstanding) $ 10.30 $ 1.00 $ 1.00
======== ======== =======
Class A Shares:
Net Assets $ 24,606 $ 51,430 --
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 2,388 51,412 --
Net Asset Value, and Redemption Price Per Share -- Class A
(Net Assets / Shares Outstanding) $ 10.30 $ 1.00 --
======== ======== =======
Maximum Offering Price Per Shares -- Class A
($10.30 / 97.00%) $ 10.62 -- --
======== ======== =======
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, 2009 www.bishopstreetfunds.com
37
Bishop Street Funds (UNAUDITED)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009
(IN THOUSANDS)
Large High
Strategic Cap Core Grade
Growth Equity Income
Fund Fund Fund
--------- -------- -------
INVESTMENT INCOME:
Dividend Income $ 341 $ 480 $ 9
Interest Income -- -- 2,880
Securities Lending, Net of commissions paid to lending agent -- 16 46
------- -------- -------
Total Investment Income 341 496 2,935
------- -------- -------
EXPENSES:
Investment Adviser Fees 227 171 336
Shareholder Servicing Fee 77 58 153
Administrative Fees 61 46 122
Chief Compliance Officer Fees 1 1 2
Transfer Agent Fees 20 19 25
Professional Fees 12 8 24
Printing Fees 6 4 12
Trustees' Fees 2 2 4
Custody Fees 2 1 3
Line of Credit 1 -- --
Registration Fees 1 1 1
Miscellaneous Expenses 2 2 12
------- -------- -------
Total Expenses 412 313 694
------- -------- -------
Less Waivers:
Investment Adviser Fees -- (18) (89)
Shareholder Servicing Fees (46) (35) (92)
Administrative Fees (24) (18) (49)
------- -------- -------
Total Waivers (70) (71) (230)
------- -------- -------
Total Net Expenses 342 242 464
------- -------- -------
Net Investment Income (Loss) (1) 254 2,471
------- -------- -------
Net Realized Gain (Loss) on Investments (5,425) (11,151) 3,909
Change in Unrealized Appreciation (Depreciation) on Investments 14,828 13,980 (3,967)
------- -------- -------
Net Realized and Unrealized Gain (Loss) on Investments 9,403 2,829 (58)
------- -------- -------
Increase in Net Assets Resulting from Operations $ 9,402 $ 3,083 $ 2,413
======= ======== =======
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, 2009
(IN THOUSANDS)
Hawaii Government Treasury
Municipal Money Money
Bond Market Market
Fund Fund Fund
--------- ---------- --------
INVESTMENT INCOME:
Interest Income $3,419 $ 515 $ 49
Dividend Income 5 -- --
------ ------ -----
Total Investment Income 3,424 515 49
------ ------ -----
EXPENSES:
Investment Adviser Fees 278 320 101
Shareholder Servicing Fee 199 267 66
Administrative Fees 159 214 64
Distribution Fees, Class A 30 68 --
Chief Compliance Officer Fees 3 3 1
Transfer Agent Fees 40 48 22
Professional Fees 30 42 13
Printing Fees 15 21 7
Trustees' Fees 6 8 3
Custody Fees 4 5 2
Registration Fees 2 4 2
Miscellaneous Expenses 22 19 8
------ ------ -----
Total Expenses 788 1,019 289
------ ------ -----
Less:
Waiver of Investment Adviser Fees (98) (172) (81)
Waiver of Shareholder Servicing Fees (119) (267) (66)
Reimbursement of Shareholder Servicing Fees -- (27) (60)
Waiver of Administrative Fees (104) (85) (32)
------ ------ -----
Total Waivers (321) (551) (239)
------ ------ -----
Total Net Expenses 467 468 50
------ ------ -----
Net Investment Income (Loss) 2,957 47 (1)
------ ------ -----
Net Realized Gain (Loss) on Investments (808) 55 83
Change in Unrealized Appreciation on Investments 4,662 -- --
------ ------ -----
Net Realized and Unrealized Gain on Investments 3,854 55 83
------ ------ -----
Increase in Net Assets Resulting from Operations $6,811 $ 102 $ 82
====== ====== =====
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, 2009 www.bishopstreetfunds.com
39
Bishop Street Funds
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2009 (UNAUDITED) AND THE YEAR ENDED
DECEMBER 31, 2008
(IN THOUSANDS)
Strategic Large Cap Core
Growth Fund Equity Fund
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income (Loss) $ (1) $ (179) $ 254 $ 657
Net Realized Loss on Investments (5,425) (6,780) (11,151) (8,415)
Change in Unrealized Appreciation
(Depreciation) on Investments 14,828 (40,393) 13,980 (31,430)
-------- -------- -------- --------
Increase (Decrease) in Net Assets Resulting
from Operations 9,402 (47,352) 3,083 (39,188)
-------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares -- -- (257) (663)
Capital Gains:
Class I Shares -- (1,792) -- (405)
-------- -------- -------- --------
Total Dividends and Distributions -- (1,792) (257) (1,068)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 2,501 7,881 1,878 7,026
Reinvestments of Cash Distributions -- 1,339 177 802
Cost of Shares Redeemed (13,197) (24,223) (11,170) (17,055)
-------- -------- -------- --------
Net Decrease in Net Assets From
Capital Share Transactions (10,696) (15,003) (9,115) (9,227)
-------- -------- -------- --------
Total Decrease in Net Assets (1,294) (64,147) (6,289) (49,483)
-------- -------- -------- --------
NET ASSETS:
Beginning of Period 62,237 126,384 51,859 101,342
-------- -------- -------- --------
End of Period $ 60,943 $ 62,237 $ 45,570 $ 51,859
======== ======== ======== ========
Undistributed (Distributions in Excess of) Net
Investment Income $ 1 $ 2 $ (3) $ --
======== ======== ======== ========
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 297 713 329 906
Shares Issued in Lieu of Cash Distributions -- 110 31 100
Shares Redeemed (1,500) (2,118) (1,881) (2,014)
-------- -------- -------- --------
Net Decrease in Shares Outstanding from
Share Transactions (1,203) (1,295) (1,521) (1,008)
======== ======== ======== ========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR ZERO SHARES, OR HAVE BEEN ROUNDED TO
$0 OR ZERO SHARES.
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, 2009 (UNAUDITED) AND THE YEAR ENDED
DECEMBER 31, 2008
(IN THOUSANDS)
High Grade Hawaii Municipal
Income Fund Bond Fund
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 2,471 $ 5,575 $ 2,957 $ 6,375
Net Realized Gain (Loss) on Investments 3,909 (29) (808) (373)
Change in Unrealized Appreciation (Depreciation)
on Investments (3,967) 4,542 4,662 (7,800)
-------- -------- -------- --------
Increase (Decrease) in Net Assets Resulting
from Operations 2,413 10,088 6,811 (1,798)
-------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (2,496) (5,571) (2,533) (5,387)
Class A Shares -- -- (425) (980)
-------- -------- -------- --------
Total Dividends and Distributions (2,496) (5,571) (2,958) (6,367)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 19,632 15,292 8,501 13,137
Reinvestments of Cash Distributions 1,485 3,249 335 685
Cost of Shares Redeemed (18,928) (37,305) (6,676) (20,981)
-------- -------- -------- --------
Total Class I Capital Share Transactions 2,189 (18,764) 2,160 (7,159)
-------- -------- -------- --------
Class A Shares:
Proceeds from Shares Issued -- -- 812 1,938
Reinvestments of Cash Distributions -- -- 200 423
Cost of Shares Redeemed -- -- (709) (6,466)
-------- -------- -------- --------
Total Class A Capital Share Transactions -- -- 303 (4,105)
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions 2,189 (18,764) 2,463 (11,264)
-------- -------- -------- --------
Total Increase (Decrease) in Net Assets 2,106 (14,247) 6,316 (19,429)
-------- -------- -------- --------
NET ASSETS:
Beginning of Period 121,976 136,223 154,514 173,943
-------- -------- -------- --------
End of Period $124,082 $121,976 $160,830 $154,514
======== ======== ======== ========
Undistributed (Distributions in Excess of) Net
Investment Income $ (23) $ 2 $ 9 $ 10
======== ======== ======== ========
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 1,888 1,504 823 1,294
Shares Issued in Lieu of Cash Distributions 143 320 33 67
Shares Redeemed (1,817) (3,693) (649) (2,064)
-------- -------- -------- --------
Total Class I Share Transactions 214 (1,869) 207 (703)
-------- -------- -------- --------
Class A Shares:
Shares Issued -- -- 79 188
Shares Issued in Lieu of Cash Distributions -- -- 20 41
Shares Redeemed -- -- (69) (628)
-------- -------- -------- --------
Total Class A Share Transactions -- -- 30 (399)
-------- -------- -------- --------
Net Increase (Decrease) in Shares Outstanding
from Share Transactions 214 (1,869) 237 (1,102)
======== ======== ======== ========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR ZERO SHARES, OR HAVE BEEN ROUNDED TO
$0 OR ZERO SHARES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2009 www.bishopstreetfunds.com
41
Bishop Street Funds
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2009 (UNAUDITED) AND THE YEAR ENDED
DECEMBER 31, 2008
(IN THOUSANDS)
Government
Money Market Treasury Money
Fund Market Fund
--------------------- ---------------------
2009 2008 2009 2008
--------- --------- --------- ---------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income (Loss) $ 47 $ 4,965 $ (1) $ 1,908
Net Realized Gain on Investments 55 5 83 59
--------- --------- --------- ---------
Increase in Net Assets Resulting from Operations 102 4,970 82 1,967
--------- --------- --------- ---------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (47) (3,629) -- (1,908)
Class A Shares -- (1,336) -- --
Capital Gains:
Class I Shares -- -- (81) --
--------- --------- --------- ---------
Total Dividends and Distributions (47) (4,965) (81) (1,908)
--------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS (ALL AT $1.00 PER SHARE):
Class I Shares:
Proceeds from Shares Issued 283,629 497,017 134,111 497,540
Reinvestments of Cash Distributions 31 952 71 267
Cost of Shares Redeemed (316,708) (513,532) (156,881) (565,411)
--------- --------- --------- ---------
Total Class I Capital Share Transactions (33,048) (15,563) (22,699) (67,604)
--------- --------- --------- ---------
Class A Shares:
Proceeds from Shares Issued 25,205 93,907 -- --
Reinvestments of Cash Distributions -- 1,336 -- --
Cost of Shares Redeemed (34,235) (98,367) -- --
--------- --------- --------- ---------
Total Class A Capital Share Transactions (9,030) (3,124) -- --
--------- --------- --------- ---------
Net Decrease in Net Assets from
Capital Share Transactions (42,078) (18,687) (22,699) (67,604)
--------- --------- --------- ---------
Total Decrease in Net Assets (42,023) (18,682) (22,698) (67,545)
--------- --------- --------- ---------
NET ASSETS:
Beginning of Period 224,611 243,293 79,967 147,512
--------- --------- --------- ---------
End of Period $ 182,588 $ 224,611 $ 57,269 $ 79,967
========= ========= ========= =========
Undistributed Net Investment Income $ -- $ -- $ 21 $ 22
========= ========= ========= =========
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, 2009
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
INVESTMENT ACTIVITIES DIVIDENDS AND
---------------------------- TOTAL DISTRIBUTIONS FROM
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:
2009 $ 8.08 $ -- $ 1.30 $ 1.30 $ -- $ -- $ --
2008 14.05 (0.02) (5.73) (5.75) -- (0.22) (0.22)
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 -- -- --
LARGE CAP CORE EQUITY FUND
CLASS I SHARES:
2009 $ 6.02 $ 0.03 $ 0.41 $ 0.44 $(0.03) $ -- $(0.03)
2008 10.54 0.07 (4.47) (4.40) (0.07) (0.05) (0.12)
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:
2009 $10.56 $ 0.21 $(0.01) $0.20 $(0.21) $ -- $(0.21)
2008 10.15 0.43 0.41 0.84 (0.43) -- (0.43)
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)
HAWAII MUNICIPAL BOND FUND
CLASS I SHARES:
2009 $10.05 $ 0.19 $ 0.25 $ 0.44 $(0.19) $ -- $(0.19)
2008 10.56 0.40 (0.51) (0.11) (0.40) -- (0.40)
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)
CLASS A SHARES:
2009 $10.05 $ 0.18 $ 0.25 $ 0.43 $(0.18) $ -- $(0.18)
2008 10.56 0.38 (0.51) (0.13) (0.38) -- (0.38)
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)
+ 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
- --------- ------- ----------- ----------- ------------- ------------- ---------
$ 9.38 16.09% $ 60,943 1.11%* 1.34%* 0.00%* 26%
8.08 (41.46) 62,237 1.06 1.29 (0.19) 73
14.05 10.10 126,384 1.07 1.30 (0.22) 61
14.84 9.78 142,929 1.06 1.30 (0.23) 53
14.35 11.52 123,341 1.07 1.31 (0.35) 55
13.08 9.64 79,168 1.05 1.29 (0.38) 59
$ 6.43 7.43% $ 45,570 1.05%* 1.36%* 1.10%* 46%
6.02 (42.02) 51,859 1.05 1.30 0.84 75
10.54 5.24 101,342 1.05 1.31 0.38 65
10.62 6.63 102,850 1.05* 1.32* 0.64* 51
$10.55 1.95% $124,082 0.76%* 1.14%* 4.04%* 49%
10.56 8.53 121,976 0.76 1.10 4.22 28
10.15 6.67 136,223 0.76 1.11 4.38 26
9.94 2.96 141,448 0.76 1.12 4.12 41
10.06 2.00 141,439 0.76 1.13 3.82 45
10.33 3.41 157,170 0.76 1.11 3.68 45
$10.30 4.41% $136,224 0.55%* 0.95%* 3.76%* 13%
10.05 (1.02) 130,807 0.55 0.92 3.91 36
10.56 2.47 144,828 0.55 0.93 3.92 25
10.77 4.42 138,333 0.55 0.93 3.99 47
10.77 2.51 145,213 0.55 0.93 3.97 41
11.02 3.36 148,575 0.55 0.92 3.97 40
$10.30 4.28% $ 24,606 0.80%* 1.20%* 3.51%* 13%
10.05 (1.27) 23,707 0.80 1.17 3.66 36
10.56 2.21 29,115 0.80 1.18 3.67 25
10.77 4.16 30,421 0.80 1.18 3.74 47
10.77 2.25 31,515 0.80 1.18 3.72 41
11.02 3.10 30,484 0.80 1.17 3.72 40
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2009 www.bishopstreetfunds.com
45
Bishop Street Funds
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2009
(UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
INVESTMENT ACTIVITIES DIVIDENDS AND
--------------------------- TOTAL DISTRIBUTIONS FROM
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
--------- ---------- -------------- ---------- ---------- ------- -------------
GOVERNMENT MONEY MARKET FUND
CLASS I SHARES:
2009 $1.00 $ --* $--* $ -- $ --* $-- $ --*
2008 1.00 0.02 --* 0.02 (0.02) -- (0.02)
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)
CLASS A SHARES:
2009 $1.00 $ --* $--* $ -- $ --* $-- $ --*
2008 1.00 0.02 --* 0.02 (0.02) -- (0.02)
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)
TREASURY MONEY MARKET FUND
CLASS I SHARES:
2009 $1.00 $ (--)* $--* $ -- $ -- $--* $ --*
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)
+ 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.
(2) THE RATIO OF EXPENSES TO AVERAGE NET ASSETS INCLUDES THE IMPACT OF THE COST
OF THE TREASURY GUARANTEE PROGRAM. IF THIS EXPENSE HAD BEEN SUBJECT TO THE
ADVISER'S VOLUNTARY EXPENSE LIMITATION, THE RATIO WOULD HAVE BEEN .50% FOR
CLASS I SHARES AND .75% FOR CLASS A SHARES, FOR FISCAL YEAR ENDED 2008.
(3) THE RATIO OF EXPENSES TO AVERAGE NET ASSETS INCLUDES THE IMPACT OF A YIELD
FLOOR WAIVER WHICH IS INCLUDED IN SHAREHOLDER SERVICING FEES WAIVERS AND
REIMBURSEMENT ON THE STATEMENT OF OPERATIONS. IF THIS EXPENSE WERE NOT
WAIVED AND REIMBURSED, THE RATIO WOULD HAVE BEEN .44%, FOR THE FISCAL YEAR
ENDED 2008 AND THE SIX-MONTH PERIOD ENDED JUNE 30, 2009.
(4) THE RATIO OF EXPENSES TO AVERAGE NET ASSETS INCLUDES THE IMPACT OF A YIELD
FLOOR WAIVER WHICH IS INCLUDED IN SHAREHOLDER SERVICING FEES WAIVERS AND
REIMBURSEMENT ON THE STATEMENT OF OPERATIONS. IF THIS EXPENSE WERE NOT
WAIVED AND REIMBURSED, THE RATIO WOULD HAVE BEEN .50% FOR CLASS I SHARES
AND .75% FOR CLASS A SHARES, FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2009.
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
- --------- ------- ----------- ----------- ------------- ------------
$1.00 0.02% $131,158 0.43%(4)** 0.89%** 0.06%**
1.00 2.18 164,165 0.51(2) 0.88 2.19
1.00 4.86 179,725 0.50 0.86 4.75
1.00 4.63 159,044 0.50 0.86 4.55
1.00 2.78 170,455 0.50 0.87 2.73
1.00 0.92 167,910 0.50 0.84 0.90
$1.00 0.00% $ 51,430 0.47%(4)* 1.14%** 0.00%**
1.00 1.93 60,446 0.76(2) 1.13 1.94
1.00 4.60 63,568 0.75 1.11 4.50
1.00 4.37 59,212 0.75 1.11 4.33
1.00 2.53 35,530 0.75 1.12 2.60
1.00 0.67 17,824 0.75 1.09 0.65
$1.00 0.13% $ 57,269 0.15%(3)** 0.90%** (0.00)%**
1.00 1.37 79,967 0.43(3) 0.87 1.49
1.00 4.49 147,512 0.44 0.88 4.38
1.00 4.51 158,364 0.44 0.87 4.39
1.00 2.62 223,614 0.44 0.87 2.61
1.00 0.91 208,153 0.44 0.84 0.89
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2009 www.bishopstreetfunds.com
47
Bishop Street Funds (UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2009
THE AMOUNTS INCLUDED IN THE NOTES TO FINANCIAL STATEMENTS ARE IN THOUSANDS
UNLESS OTHERWISE NOTED.
1. ORGANIZATION
The Bishop Street Funds (the "Trust") are registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Bishop Street Funds consist of a series of 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, Government
Money Market Fund (formerly 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 in the most advantageous market, if the
security is actively traded. The third-party pricing agents may also value debt
securities at an evaluated bid price by employing methodologies that utilize
actual market transactions, broker-supplied valuations, or other methodologies
designed to identify the fair 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 Government 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 Funds have the ability to
access at the measurement date;
- Level 2 -- Quoted prices which are not in active markets, or inputs
that are observable (either directly or indirectly) for substantially
similar assets; 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, may include Level 1 or Level 2 inputs as components of the overall fair
value measurement. The table below sets
June 30, 2009 www.bishopstreetfunds.com
49
Bishop Street Funds (UNAUDITED)
forth information about the level within the fair value hierarchy at which the
Funds' investments are measured at June 30, 2009:
STRATEGIC GROWTH FUND
Investments in Securities LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Common Stock $60,990 $ -- $ -- $ 60,990
------- -------- ------- --------
Total Investments in Securities $60,990 $ -- $ -- $ 60,990
======= ======== ======= ========
LARGE CAP CORE EQUITY FUND
Investments in Securities LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Common Stock $45,429 $ -- $ -- $ 45,429
Exchange Traded Fund 116 -- -- 116
Cash Equivalents 9,678 -- -- 9,678
------- -------- ------- --------
Total Investments in Securities $55,223 $ -- $ -- $ 55,223
======= ======== ======= ========
HIGH GRADE INCOME FUND
Investments in Securities LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Corporate Obligations $ -- $ 86,224 $ -- $ 86,224
U.S. Government Agency Obligations -- 14,750 -- 14,750
U.S. Government Mortgage-Backed Obligations -- 7,932 -- 7,932
Asset-Backed Securities -- 6,218 -- 6,218
U.S. Treasury Obligations -- 4,935 -- 4,935
Municipal Bonds -- 2,243 -- 2,243
Cash Equivalents 20,772 -- -- 20,772
------- -------- ------- --------
Total Investments in Securities $20,772 $122,302 $ -- $143,074
======= ======== ======= ========
HAWAII MUNICIPAL BOND FUND
Investments in Securities LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Municipal Bonds $ -- $157,313 $ -- $157,313
Cash Equivalents 816 -- -- 816
------- -------- ------- --------
Total Investments in Securities $ 816 $157,313 $ -- $158,129
======= ======== ======= ========
GOVERNMENT MONEY MARKET FUND
Investments in Securities LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
U.S. Government Agency Obligations $ -- $131,706 $ -- $131,706
U.S. Treasury Obligations -- 25,980 -- 25,980
Cash Equivalents 25,018 -- -- 25,018
------- -------- ------- --------
Total Investments in Securities $25,018 $157,686 $ -- $182,704
======= ======== ======= ========
TREASURY MONEY MARKET FUND
Investments in Securities LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
U.S. Treasury Obligations $ -- $ 46,990 $ -- $ 46,990
Cash Equivalents 10,294 -- -- 10,294
------- -------- ------- --------
Total Investments in Securities $10,294 $ 46,990 $ -- $ 57,284
======= ======== ======= ========
Bishop Street Funds
50
(UNAUDITED)
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 and 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 Government Money Market and Treasury Money Market
Funds use the straight line method.
REPURCHASE AGREEMENTS
In connection with transactions involving repurchase agreements, a third
party custodian bank takes possession of the underlying securities
("collateral"), the value of which exceeds the principal amount of the
repurchase transaction, including accrued interest. In the event of default on
the obligation to repurchase, the Funds have the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In the
event of default or bankruptcy by the counterparty to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
CLASSES
Class-specific expenses are borne by the applicable class of shares.
Income, realized and unrealized gains/losses and non class-specific expenses are
allocated to the respective class on the basis of relative daily net assets.
Distribution fees are the only class-specific expense.
EXPENSES
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Other operating expenses of the Funds are prorated to the Funds on
the basis of relative net assets.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The Strategic Growth and Large Cap Core Equity Funds declare and pay
dividends from any net investment income, if available, on a quarterly basis.
Dividends from net investment income are declared daily and paid on a monthly
basis for the High Grade Income, Hawaii Municipal Bond, Government Money Market
and Treasury Money Market Funds. Any net realized capital gains will be
distributed at least annually for all Funds. Distributions to shareholders are
recorded on the ex-dividend date.
FRONT-END SALES COMMISSION
Front-end sales commissions (the "sales charge") are not recorded as
expenses of the Hawaii Municipal Bond Fund. Front-end sales commissions are
deducted from proceeds from the sales of Hawaii Municipal Bond Fund shares prior
to investment in Class A shares. During the six month period ended June 30, 2009
the Hawaii Municipal Bond
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51
Bishop Street Funds (UNAUDITED)
Fund retained $13 in front-end sales commissions from the sales of Class A
shares imposed on redemptions by shareholders.
CASH OVERDRAFT CHARGES
Per the terms of an informal agreement with Union Bank, 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 six month period ended June 30, 2009, 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
Government 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) 1.25%, Large
Cap Core Equity Fund (Class I) 1.05%, High Grade Income Fund (Class I) 0.76%,
Hawaii Municipal Bond Fund (Class I) 0.55%, Hawaii Municipal Bond Fund (Class A)
0.80%, Government Money Market Fund (Class I) 0.50%, Government Money Market
Fund (Class A) 0.75% and Treasury Money Market Fund (Class I) 0.44%. These fees
and waivers are labeled on the Statement of Operations as "Investment Adviser
Fees."
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 Government 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.
Bishop Street Funds
52
(UNAUDITED)
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, 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. These fees are
disclosed on the Statement of Operations as "Custodian Fees."
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 each Fund's respective average daily
net assets. These fees and waivers are labeled as "Administrative Fees" on the
Statement of Operations.
Pursuant to an agreement dated January 30, 1995, DST Systems, Inc. ("DST")
acts as the Transfer Agent of the Trust. As such, DST provides transfer agency,
dividend disbursing and shareholder services to the Trust. These fees are
disclosed on the Statement of Operations as "Transfer Agent Fees."
SEI Investments Distribution Co. ("SIDCO"), a wholly owned subsidiary of
SEI Investments Company, acts as the Trust's Distributor pursuant to a
distribution agreement dated June 10, 1999. The Funds have adopted a
Distribution Plan (the "Plan") on behalf of Class A Shares pursuant to Rule
12b-1 under the Investment Company Act of 1940. The Plan provides that Class A
Shares will bear the cost of their distribution expenses. SIDCO, as compensation
for its services under the Plan, receives a distribution fee, computed daily and
payable monthly, of 0.25% of the average daily net assets attributable to each
Fund's Class A Shares. This fee is disclosed as "Distribution Fees, Class A" on
the Statement of Operations.
The Trust has adopted and entered into a shareholder service plan and
agreement with SIDCO. Each Fund pays to SIDCO a shareholder servicing fee 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
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Bishop Street Funds (UNAUDITED)
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 each Fund's respective
average daily net assets. Additionally, SIDCO has voluntarily agreed to waive a
portion of its shareholder servicing fee in order to limit the one-day net
income yield of the Government Money Market Fund, and the Treasury Money Market
Fund to not less than 0.0000% of the average daily net assets. These fees and
waivers are represented as "Shareholder Servicing Fees" on the Statement of
Operations.
5. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of SEI Investments Global
Funds Services (the "Administrator"), a wholly owned subsidiary of SEI
Investments Company, and/or SEI Investments Distribution Co. (the
"Distributor"). Such officers are paid no fees by the Trust for serving as
officers of the Trust.
A portion of the services provided by the Chief Compliance Officer ("CCO")
and his staff, whom are employees of the Administrator, are paid for by the
Trust as incurred. The services include regulatory oversight of the Trust's
Advisers and service providers as required by SEC regulations. The CCO's
services have been approved by and are reviewed by the Board. These fees are
disclosed on the Statement of Operations as "Chief Compliance Officer Fees."
6. SECURITIES LENDING
The Fund may lend securities having a market value up to one-third of the
Fund's total assets. Such loans are secured by collateral equal to no less than
the market value of the loaned securities determined daily. Such collateral will
be cash or debt securities issued or guaranteed by the U.S. Government or any
agencies. Cash collateral received in connection with these loans is invested in
short-term money market instruments. It's the Fund's policy to obtain additional
collateral from or return excess collateral to the borrower by the end of the
next business day, following the valuation date of the securities loaned.
Therefore, the value of the collateral held may be temporarily less than the
value of the securities on loan. Lending securities entails a risk of loss to
the Fund if and to the extent that the market value of the securities loans were
to increase and the borrower did not increase the collateral accordingly, and
the borrower fails to return the
Bishop Street Funds
54
(UNAUDITED)
securities. The Fund could also experience delays and costs in gaining access to
the collateral. The Fund bears the risk of any deficiency in the amount of the
collateral available for return to the borrower due to any loss on the
collateral invested. At June 30, 2009, six counterparties held 85.93% of the
total securities on loan of the Large Cap Core Equity Fund and seven
counterparties held 92.96% of the total securities on loan of the High Grade
Income Fund.
7. 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, 2009 are presented below for the Funds.
Strategic Large High Grade Hawaii
Growth Cap Core Income Municipal
Fund Equity Fund Fund Bond Fund
--------- ----------- ---------- ---------
Purchases
U.S.
Government
Securities $ -- $ -- $ 8,518 $ --
Other 15,864 21,120 48,197 24,135
Sales and Maturities
U.S.
Government
Securities $ -- $ -- $39,288 $ --
Other 26,113 29,926 18,573 19,834
8. 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.
On January 1, 2008, the Funds adopted Financial Accounting Standards Board
("FASB") Interpretation No 48, "Accounting for Uncertainty in Income Taxes"
("FIN 48"). FIN 48 defines the threshold for recognizing the benefits of
tax-return positions in the financial statements as "more-likely-than-not" to be
sustained by the applicable taxing authority and requires measurement of a tax
position meeting the "more-likely-than-not" threshold, based on the largest
benefit that is more than 50 percent likely to be realized.
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Bishop Street Funds (UNAUDITED)
The Funds are not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly
change in the next twelve months. Management has completed their analysis and
has determined that the adoption of FIN 48 will not have an impact on the Fund's
financial statements, and therefore the Funds did not record any tax expense in
the current period. If the Funds were to record a tax expense as a result of the
adoption of FIN 48, the tax expense would include any interest and penalties.
The Funds file U. S. federal income tax returns. While the statute of
limitations remains open to examine the Fund's U.S. federal income tax returns
filed for the fiscal years 2005 to 2008, no examinations are in progress or
anticipated at this time. 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.
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.
The tax character of dividends and distributions declared during the years
ended December 31, 2008 and 2007 were as follows:
Ordinary Tax Exempt Long-Term
Income Income Capital Gain Total
-------- ---------- ------------ --------
Strategic Growth Fund
2008 $ -- $-- $ 1,792 $ 1,792
2007 1,827 -- 16,642 18,469
Large Cap Core Equity Fund
2008 $ 663 $-- $ 405 $ 1,068
2007 4,190 -- 1,777 5,967
High Grade Income Fund
2008 $5,571 $-- $ -- $ 5,571
2007 5,901 -- -- 5,901
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(UNAUDITED)
Ordinary Tax Exempt Long-Term
Income Income Capital Gain Total
-------- ---------- ------------ -------
Hawaii Municipal Bond Fund
2008 $ -- $6,367 $ -- $ 6,367
2007 181 6,697 647 7,525
Government Money Market Fund
2008 $ 4,965 $ -- $ -- $ 4,965
2007 10,658 -- -- 10,658
Treasury Money Market Fund
2008 $ 1,908 $ -- $ -- $ 1,908
2007 7,119 -- -- 7,119
As of December 31, 2008, the components of Distributable Earnings
(Accumulated Losses) on a tax basis were as follows:
Large Cap Government Treasury
Strategic Core High Grade Hawaii Money Money
Growth Equity Income Municipal Market Market
Fund Fund Fund Bond Fund Fund Fund
--------- --------- ---------- --------- ---------- --------
Undistributed net investment income $ -- $ -- $ -- $ -- $ -- $81
Undistributed tax-exempt income -- -- -- 1 -- --
Capital loss carryforwards (839) (5,569) (983) (410) (14) --
Post-October losses (2,317) (2,267) -- -- -- --
Unrealized appreciation (depreciation) (22,285) (26,729) 7,444 (5,671) -- --
-------- -------- ------ ------- ---- ---
Total Distributable Earnings (Accumulated Losses) $(25,441) $(34,565) $6,461 $(6,080) $(14) $81
======== ======== ====== ======= ==== ===
Post-October losses represent losses realized on investment transactions
from November 1, 2008 through December 31, 2008 that, in accordance with Federal
income tax regulations, the Funds have elected to defer and treat as having
arisen in the following fiscal year.
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Bishop Street Funds (UNAUDITED)
For Federal income tax purposes, capital loss carryforwards represent
realized losses of the Funds that may be carried forward for a maximum period of
eight years and applied against future capital gains as follows:
Large High Government
Strategic Cap Core Grade Hawaii Money
Growth Growth Income Municipal Market
Fund Fund Fund Bond Fund Fund
--------- -------- ------ --------- ----------
Dec. 2009 $ -- $ -- $ -- $ -- $11
Dec. 2013 -- -- -- -- 3
Dec. 2014 -- -- 642 -- --
Dec. 2015 -- -- 316 -- --
Dec. 2016 839 5,569 25 410 --
---- ------ ---- ---- ---
Total $839 $5,569 $983 $410 $14
==== ====== ==== ==== ===
During the year ended December 31, 2008, the Government Money Market
utilized capital loss carryforwards of $5 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, 2009
were as follows:
Strategic Large Cap High Grade Hawaii
Growth Core Income Municipal
Fund Equity Fund Fund Bond Fund
--------- ----------- ---------- ---------
Federal Tax Cost $ 65,536 $ 67,826 $139,544 $159,137
-------- -------- -------- --------
Gross
Unrealized Appreciation 6,297 2,525 4,398 2,819
Gross
Unrealized Depreciation (10,843) (15,128) (868) (3,827)
-------- -------- -------- --------
Net Unrealized Appreciation
(Depreciation) $ (4,546) $(12,603) $ 3,530 $ (1,008)
======== ======== ======== ========
For Federal income tax purposes, the Government Money Market and Treasury
Money Market Funds' aggregate tax cost is equal to book cost.
9. RISKS
The Hawaii Municipal Bond Fund invests primarily in debt instruments in the
state of Hawaii. The issuers' ability to meet their obligations may be affected
by economic developments in that state. In addition, each Fund's investments in
debt securities are subject to "credit risk," which is the risk that an issuer
will be unable, or will be perceived to be unable, to repay its obligations at
maturity. Funds that invest primarily in high
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58
(UNAUDITED)
quality debt securities generally are subject to less credit risk than funds
that invest in lower quality debt securities.
Certain debt securities are backed by credit enhancements from various
financial institutions and financial guarantee assurance agencies. These credit
enhancements reinforce the credit quality of the individual securities; however,
if any of the financial institutions or financial guarantee assurance agencies'
credit quality should deteriorate, it could cause the individual security's
credit quality to change. Additionally, if any of the Funds concentrate their
credit enhancements in any one financial institution, the risk of credit quality
deterioration increases.
The value of asset-backed securities may be affected by the credit risk of
the servicing agent for the pool, the originator of the loans or receivables, or
the financial institution(s) providing the credit support. In addition to credit
risk, asset-backed securities and other securities with early redemption
features are subject to pre-payment risk. During periods of declining interest
rates, prepayment of loans underlying asset-backed securities can be expected to
accelerate or an issuer may retire an outstanding bond early to reduce interest
costs. A Fund's ability to maintain positions in such securities will be
affected by reductions in the principal amount of such securities resulting from
prepayments, and its ability to reinvest the returns of principal at comparable
yields is subject to generally prevailing interest rates at that time.
In the normal course of business, the Funds enter into contracts that
provide general indemnifications. The Funds' maximum exposure under these
arrangements is dependent on future claims that may be made against the Funds
and, therefore, cannot be established; however, based on experience, the risk of
loss from such claims are considered remote.
Due to volatility in the fixed income and equity markets, the market value
of some of the Fund's holdings may currently be lower than shown in the
Schedules of Investments ("SOI"). The values shown in the SOI's were the market
values as of June 30, 2009 and do not reflect any market events after June 30,
2009.
10. LINE OF CREDIT
The Funds entered into an agreement which enables them to participate in a
$5 million unsecured committed revolving line of credit on a first come, first
serve basis, with Union Bank, N.A. (the "Bank") which expires June 11, 2010. The
proceeds from the borrowings shall be used to finance the Funds short term
general working capital requirements, including the funding of shareholder
redemptions. Interest is charged to the Funds based on their borrowings during
the year at the Bank current reference rate minus 1%. As of June 30, 2009 the
Funds had no borrowings outstanding. For the six months ended June 30, 2009, the
Funds had borrowings costs of $1 for the Strategic Growth Fund, over a period of
50 days at a weighted average interest rate of 2.25%.
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Bishop Street Funds (UNAUDITED)
11. OTHER
At June 30, 2009, 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 94.13%
Large Cap Core Equity Fund, Class I Shares 1 98.67
High Grade Income Fund, Class I Shares 1 86.27
Hawaii Municipal Bond Fund, Class I Shares 1 90.76
Hawaii Municipal Bond Fund, Class A Shares 1 35.53
Government Money Market Fund, Class I Shares 1 90.05
Government Money Market Fund, Class A Shares 1 99.56
Treasury Money Market Fund, Class I Shares 1 99.60
12. ACCOUNTING PRONOUNCEMENTS
In October 2008, the FASB issued Staff Position 157-3, DETERMINING THE FAIR
VALUE OF A FINANCIAL ASSET IN A MARKET THAT IS NOT ACTIVE ("FSP 157-3"), which
clarifies the application of SFAS 157 in an inactive market and provides an
illustrative example to demonstrate how the fair value of a financial asset is
determined when the market for that financial asset is not active. The guidance
provided by FSP 157-3 did not have an impact on the Fund's approach to valuing
financial assets.
13. SUBSEQUENT EVENT
The Funds have evaluated the need for disclosures and/or adjustments
resulting from subsequent events through August 26, 2009, the date the financial
statements were available to be issued. This evaluation resulted in the
following subsequent event that necessitated disclosures and/or adjustments: On
June 24, 2009, the Adviser approved the liquidation of the Treasury Money Market
Fund and closed the Treasury Money Market Fund to new shareholders. The Treasury
Money Market Fund liquidated on July 31, 2009.
Bishop Street Funds
60
Bishop Street Funds
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
All mutual funds have operating expenses. As a shareholder of a mutual fund,
your investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, administrative services, 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.
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Bishop Street Funds (UNAUDITED)
Beginning Ending Expenses
Account Account Annualized Paid
Value Value Expense During
1/1/09 6/30/09 Ratios Period*
--------- --------- ---------- --------
STRATEGIC GROWTH FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,160.90 1.11% $5.95
HYPOTHETICAL 5% RETURN 1,000.00 1,019.29 1.11 5.56
LARGE CAP CORE EQUITY FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,074.30 1.05% $5.40
HYPOTHETICAL 5% RETURN 1,000.00 1,019.59 1.05 5.26
HIGH GRADE INCOME FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,019.50 0.76% $3.81
HYPOTHETICAL 5% RETURN 1,000.00 1,021.03 0.76 3.81
HAWAII MUNICIPAL BOND FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,044.10 0.55% $2.79
HYPOTHETICAL 5% RETURN 1,000.00 1,022.07 0.55 2.76
HAWAII MUNICIPAL BOND FUND -- CLASS A
ACTUAL FUND RETURN $1,000.00 $1,042.80 0.80% $4.05
HYPOTHETICAL 5% RETURN 1,000.00 1,020.83 0.80 4.01
GOVERNMENT MONEY MARKET FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,000.20 0.43% $2.13
HYPOTHETICAL 5% RETURN 1,000.00 1,022.66 0.43 2.16
GOVERNMENT MONEY MARKET FUND -- CLASS A
ACTUAL FUND RETURN $1,000.00 $1,000.00 0.47% $2.33
HYPOTHETICAL 5% RETURN 1,000.00 1,022.46 0.47 2.36
TREASURY MONEY MARKET FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $1,001.30 0.15% $0.74
HYPOTHETICAL 5% RETURN 1,000.00 1,024.05 0.15 0.75
* Expenses are equal to the Funds' annualized expense ratio multiplied by the
average account value over the period, multiplied by 181/365 (to reflect
the one-half year period).
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62
Bishop Street Funds (UNAUDITED)
APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS
BOARD CONSIDERATIONS IN RE-APPROVING THE 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,
Inc., Fischer Francis Tree & Watts, Inc. 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 17-18, 2009, the Board, including
the Independent Trustees advised by their independent legal counsel, 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 overviews of the Advisers, including 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
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Bishop Street Funds (UNAUDITED)
Advisers' oral presentations and any other information that the Board received
at the 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 ADVISERS
In considering the nature, extent and quality 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 FUNDS AND THE ADVISERS
The Board was provided with information regarding each Fund's performance since
the Agreements were last renewed, as well as information regarding each Fund's
performance since its 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. The Adviser to
the Treasury Money Market and Government Money Market Funds discussed certain
repurchase agreements held by the
Bishop Street Funds
64
(UNAUDITED)
Funds and the effect of such holdings on the Funds' performance. The Board noted
that the performance of the High Grade Income Fund and Hawaii Municipal Bond
Fund was favorable in relationship to each Fund's respective benchmark over
various periods of time, and that the Treasury Money Market and the Government
Money Market Funds' performance was comparable to that of each Fund's peer
groups. With respect to the Large Cap Core Equity Fund and the Strategic Growth
Fund, the Board noted that although these Funds underperformed their respective
benchmarks over various periods of time, their recent performance was not
substantially below that of each Fund's respective benchmark and did not
necessitate any significant additional review. Based on this information, the
Board concluded that each Fund's performance was reasonable as compared to its
relevant benchmark and was satisfied with the investment results that each
Adviser had been able to achieve for the respective Fund(s).
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 Funds. 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.
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65
NOTES
Bishop Street Funds
66
NOTES
June 30, 2009 www.bishopstreetfunds.com
67
NOTES
Bishop Street Funds
68
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, 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-004-1500
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
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Philip T. Masterson, President
Date: September 3, 2009
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
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Philip T. Masterson, President
Date: September 3, 2009
By (Signature and Title)* \s\ Michael Lawson
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Michael Lawson
Controller & CFO
Date: September 3, 2009
* Print the name and title of each signing officer under his or her
signature.