UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM N-CSRS
----------
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-08572
BISHOP STREET FUNDS
(Exact name of registrant as specified in charter)
----------
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, 2010
DATE OF REPORTING PERIOD: JUNE 30, 2010
ITEM 1. REPORTS TO STOCKHOLDERS.
(GRAPHIC)
BISHOP STREET FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 2010
STRATEGIC GROWTH FUND
DIVIDEND VALUE FUND
HIGH GRADE INCOME FUND
HAWAII MUNICIPAL BOND FUND
GOVERNMENT 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
FUNDS
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS .................................................. 2
SCHEDULES OF INVESTMENTS
Strategic Growth Fund ................................................ 4
Dividend Value Fund .................................................. 7
High Grade Income Fund ............................................... 12
Hawaii Municipal Bond Fund ........................................... 20
Government Money Market Fund ......................................... 31
STATEMENTS OF ASSETS AND LIABILITIES .................................... 33
STATEMENTS OF OPERATIONS ................................................ 35
STATEMENTS OF CHANGES IN NET ASSETS ..................................... 37
FINANCIAL HIGHLIGHTS .................................................... 40
NOTES TO FINANCIAL STATEMENTS ........................................... 44
DISCLOSURE OF FUND EXPENSES ............................................. 58
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS .............................. 60
SHAREHOLDER VOTING RESULTS .............................................. 67
1
BISHOP STREET
FUNDS
LETTER TO SHAREHOLDERS
(PHOTO)
Dear Shareholder:
The New Year began on a very promising note with global equity markets
continuing their advance following a very strong finish in 2009. But just as the
wounds of the credit crisis appeared to be on the mend, another round of
problems wreaked havoc on the markets ending an extended series of quarterly
gains in the U.S. and foreign equity markets. As a result, stocks fell sharply
in the second quarter as investors once again rushed for safety, renewing their
focus on risk and volatility. In retrospect, there was no shortage of concerns
for the markets with the Greek debt crisis spreading fear throughout Europe, the
massive spill in the Gulf of Mexico spewing oil seemingly without end, a "flash
crash" that raised questions about market structure and risk controls, and
significant reform in the financial sector that would surely change the face of
the industry as we now know it today.
DR. JEKYLL AND MR. HYDE?
The confluence of events as well as a host of mixed readings on the U.S. economy
produced some strong headwinds for the equity markets, yet they managed to hold
up reasonably well in the first six months of the year. Starting out the year
with a respectable +5.4% return in the first quarter, the S&P 500 index declined
- -11.4% in the second quarter, to finish the first six months of 2010 with a loss
of -6.7%. Meanwhile, the fixed income markets were the beneficiaries of the
uncertainty that plagued the equity markets as investors sought safety in U.S.
treasuries and the dollar. As a result, the bond markets gained +5.3%
year-to-date with U.S. treasuries and corporate bonds leading the way. Bad news
for equity markets proved to be a boon for fixed income investors. And despite
ongoing concerns about the financial challenges facing municipal governments,
municipal bonds generated a +2.0% return in the latest quarter and a +3.3%
return year-to-date.
Bishop Street Funds
2
(BISHOP STREET FUNDS LOGO)
WHAT LIES AHEAD?
It is difficult to predict what the future might hold for investors given the
many issues that exist; however,there are reasons to be optimistic. First,
interest rates are extremely low and are likely to lower borrowing costs for
businesses and individuals, providing incentive to invest. Significant
government stimulus remains in place and should continue to work its way through
the system, pointing to positive economic expansion in the months ahead.
Further, equity valuations appear reasonable when compared to historical
averages. The bottom line is that while uncertainty prevails, this situation is
not uncommon when it comes to world of investing. And while investors cannot
control the outcome of these events, they CAN control their investment plan,
asset mix, and risk exposure to ensure that their investment portfolio is
consistent with their life goals and objectives.
In this regard, the Bishop Street Funds continue to offer selected stock, bond
and money market alternatives that we believe should be included in your overall
investment program. The Dividend Value Fund and Strategic Growth Fund combine to
offer attractive income potential and growth potential. The High Grade Bond and
Hawaii Municipal Bond funds offer high quality, fixed income securities that
continue to provide attractive income and stability, while the Government Money
Market fund continues to provide safety and liquidity.
Thank you for your continued trust and confidence in the Bishop Street Funds.
Sincerely,
/s/ Michael K. Hirai
Michael K. Hirai, CFA, CPA
President and Chief Investment Officer
July 20, 2010
THE S&P 500 COMPOSITE INDEX IS A WIDELY RECOGNIZED INDEX OF 500 STOCKS DESIGNED
TO MIMIC THE OVERALL U.S. EQUITY MARKET'S INDUSTRY WEIGHTINGS.
THIS REPRESENTS THE MANAGEMENT'S ASSESSMENT OF THE FUNDS AND THE MARKET
ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE
READER AS RESEARCH OR INVESTMENT ADVICE.
June 30, 2010 www.bishopstreetfunds.com
3
Strategic Growth Fund (UNAUDITED)
TOP TEN EQUITY HOLDINGS+
Percentage of
Investments
-------------
1. Tyco International 2.2%
2. Yum! Brands 2.2%
3. AmerisourceBergen, Cl A 2.2%
4. Texas Instruments 2.2%
5. Stericycle 2.1%
6. ACE 2.1%
7. General Mills 2.1%
8. Varian Medical Systems 2.1%
9. Becton Dickinson 2.1%
10. Iron Mountain 2.1%
SECTOR WEIGHTINGS+
(BAR CHART)
Information Technology 27.7%
Industrials 20.1%
Consumer Discretionary 19.4%
Health Care 14.5%
Financials 8.0%
Energy 7.6%
Consumer Staples 2.1%
Cash Equivalents 0.6%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
AS OF JUNE 30, 2010
Value
Shares (000)
- ------------ --------------
COMMON STOCK+ -- 99.5%
CONSUMER DISCRETIONARY -- 19.4%
23,000 Bed Bath & Beyond (A) $ 853
25,883 Best Buy 876
26,600 Coach 972
49,900 GameStop, Cl A (A) 938
33,500 Home Depot 940
19,700 Kohl's (A) 936
5,600 priceline.com (A) 989
20,300 Target 998
23,500 TJX 986
28,000 Yum! Brands 1,093
--------------
9,581
--------------
Bishop Street Funds
4
Strategic Growth Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Value
Shares (000)
- ------------ --------------
CONSUMER STAPLES -- 2.1%
29,000 General Mills $ 1,030
--------------
ENERGY -- 7.6%
14,100 Cimarex Energy 1,010
28,000 National Oilwell Varco 926
11,900 Occidental Petroleum 918
23,400 Southwestern Energy (A) 904
--------------
3,758
--------------
FINANCIALS -- 8.0%
20,100 ACE 1,035
25,700 American Express 1,020
7,100 Goldman Sachs Group 932
36,700 Lazard, Cl A 980
--------------
3,967
--------------
HEALTH CARE -- 14.5%
34,400 AmerisourceBergen, Cl A 1,092
19,200 Amgen (A) 1,010
15,200 Becton Dickinson 1,028
20,800 Express Scripts, Cl A (A) 978
20,600 Thermo Fisher Scientific (A) 1,010
19,700 Varian Medical Systems (A) 1,030
15,500 Waters (A) 1,003
--------------
7,151
--------------
INDUSTRIALS -- 20.2%
17,800 Deere 991
22,900 Dover 957
45,500 Iron Mountain 1,022
21,100 ITT 948
19,300 Joy Global 967
15,900 Stericycle (A) 1,043
31,100 Tyco International 1,096
13,700 Union Pacific 952
15,000 United Technologies 973
10,200 W.W.Grainger 1,014
--------------
9,963
--------------
June 30, 2010 www.bishopstreetfunds.com
5
Strategic Growth Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Value
Shares (000)
- ------------ --------------
INFORMATION TECHNOLOGY -- 27.7%
25,600 Amphenol, Cl A $ 1,006
3,900 Apple (A) 981
29,300 Broadcom, Cl A 966
14,800 Cree (A) 888
14,500 Factset Research Systems 971
2,050 Google, Cl A (A) 912
22,600 Hewlett-Packard 978
8,200 International Business Machines 1,013
26,100 NetApp (A) 974
46,000 Oracle 987
35,000 Red Hat (A) 1,013
65,600 Symantec (A) 911
46,200 Texas Instruments 1,076
33,000 Western Digital (A) 994
--------------
13,670
--------------
TOTAL COMMON STOCK (Cost $48,324) 49,120
--------------
CASH EQUIVALENTS (B) -- 0.6%
144,535 Dreyfus Cash Management Fund, Institutional
Shares, 0.137% 145
144,535 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 0.250% 145
--------------
TOTAL CASH EQUIVALENTS (Cost $290) 290
--------------
TOTAL INVESTMENTS (Cost $48,614) -- 100.1% $ 49,410
==============
PERCENTAGES ARE BASED ON NET ASSETS OF $49,377 ($ THOUSANDS).
+ MORE NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
(A) NON-INCOME PRODUCING SECURITY.
(B) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010.
CL -- CLASS
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
6
Dividend Value Fund (UNAUDITED)
TOP TEN EQUITY HOLDINGS+
Percentage of
Investments
-------------
1. AT&T 3.2%
2. Merck 3.0%
3. International Business Machines 2.8%
4. Verizon Communications 2.7%
5. Exxon Mobil 2.6%
6. JPMorgan Chase 2.2%
7. Philip Morris International 2.2%
8. Bristol-Myers Squibb 2.2%
9. Microsoft 2.0%
10. McDonald's 2.0%
SECTOR WEIGHTINGS
(BAR CHART)
Financials 14.3%
Consumer Staples 12.3%
Energy 11.2%
Industrials 10.5%
Information Technology 10.4%
Health Care 10.2%
Consumer Discretionary 8.7%
Telecommunication Services 6.1%
Materials 5.7%
Utilities 5.0%
Cash Equivalents 3.9%
Exchange Traded Fund 1.7%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. EXCLUDES SECURITIES PURCHASED
WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING.
SCHEDULE OF INVESTMENTS
AS OF JUNE 30, 2010
Value
Shares (000)
- ------------ --------------
COMMON STOCK -- 93.9%
CONSUMER DISCRETIONARY -- 8.6%
23,100 Foot Locker (B) $ 292
13,900 Gap 270
23,000 Home Depot 646
14,500 McDonald's 955
8,500 McGraw-Hill 239
June 30, 2010 www.bishopstreetfunds.com
7
Dividend Value Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Value
Shares (000)
- ------------ --------------
CONSUMER DISCRETIONARY -- (CONTINUED)
12,500 Meredith $ 389
7,500 Nordstrom (B) 242
10,500 Staples 200
20,700 Time Warner 599
6,700 TJX (B) 281
--------------
4,113
--------------
CONSUMER STAPLES -- 11.9%
24,800 Altria Group (B) 497
3,900 Coca-Cola Co. 196
7,400 Diageo PLC ADR 464
10,000 General Mills 355
13,500 HJ Heinz (B) 584
3,600 JM Smucker 217
8,800 Kimberly-Clark 533
8,800 Kraft Foods, Cl A 246
3,300 PepsiCo 201
23,000 Philip Morris International 1,054
11,900 Procter & Gamble 714
12,100 Wal-Mart Stores 582
--------------
5,643
--------------
ENERGY -- 11.2%
13,100 Chevron 889
7,000 ConocoPhillips 344
16,500 EnCana 501
21,700 Exxon Mobil 1,238
4,100 Murphy Oil 203
5,900 Occidental Petroleum 455
18,000 Royal Dutch Shell PLC ADR, Cl A (B) 904
11,800 Smith International 444
7,225 Transocean (A) 335
--------------
5,313
--------------
FINANCIALS -- 14.3%
16,800 American Express 667
15,300 Arthur J Gallagher (B) 373
6,300 Chubb 315
14,700 Eaton Vance 406
11,800 Federated Investors, Cl B (B) 244
28,800 JPMorgan Chase 1,055
11,900 MetLife 449
15,000 Morgan Stanley 348
Bishop Street Funds
8
Dividend Value Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Value
Shares (000)
- ------------ --------------
FINANCIALS -- (CONTINUED)
10,700 Northern Trust $ 500
18,900 People's United Financial 255
7,700 PNC Financial Services Group 435
2,500 RenaissanceRe Holdings (B) 141
6,100 T Rowe Price Group (B) 271
18,200 Unum Group (B) 395
19,200 US Bancorp 429
20,700 Wells Fargo 530
--------------
6,813
--------------
HEALTH CARE -- 10.2%
16,300 Abbott Laboratories 763
41,100 Bristol-Myers Squibb 1,025
13,900 Johnson & Johnson 821
40,900 Merck 1,430
56,900 Pfizer 811
--------------
4,850
--------------
INDUSTRIALS -- 10.5%
7,900 Deere 440
9,600 Dover (B) 401
8,600 Emerson Electric 376
42,100 General Electric 607
15,000 Honeywell International 585
5,200 Illinois Tool Works 215
7,200 Norfolk Southern 382
6,800 Parker Hannifin 377
12,100 Raytheon 586
9,200 United Technologies 597
14,300 Waste Management 447
--------------
5,013
--------------
INFORMATION TECHNOLOGY -- 10.4%
11,900 Automatic Data Processing 479
7,100 Canon ADR (B) 265
11,800 Hewlett-Packard 511
47,100 Intel 916
10,800 International Business Machines 1,333
4,700 Linear Technology (B) 131
41,700 Microsoft 959
15,500 Texas Instruments (B) 361
--------------
4,955
--------------
June 30, 2010 www.bishopstreetfunds.com
9
Dividend Value Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Value
Shares (000)
- ------------ --------------
MATERIALS -- 5.7%
4,700 BHP Billiton ADR (B) $ 291
8,000 EI Du Pont de Nemours 277
6,900 International Flavors & Fragrances 293
12,200 Nucor (B) 467
10,100 RPM International 180
13,000 Sherwin-Williams (B) 899
10,500 Sonoco Products 320
--------------
2,727
--------------
TELECOMMUNICATION SERVICES -- 6.1%
62,200 AT&T (B) 1,505
45,000 Verizon Communications 1,261
13,300 Windstream (B) 140
--------------
2,906
--------------
UTILITIES -- 5.0%
7,400 American Electric Power (B) 239
2,000 Entergy 143
4,000 Exelon 152
7,000 FirstEnergy (B) 246
7,600 National Fuel Gas 349
4,300 NextEra Energy (B) 210
5,800 PG&E (B) 239
9,900 PPL (B) 247
9,200 Public Service Enterprise Group 288
5,500 Sempra Energy 257
--------------
2,370
--------------
TOTAL COMMON STOCK (Cost $47,226) 44,703
--------------
EXCHANGE TRADED FUND -- 1.6%
7,600 SPDR Trust, Ser A (B) 785
--------------
TOTAL EXCHANGE TRADED FUND (Cost $933) 785
--------------
PREFERRED STOCK -- 0.4%
CONSUMER STAPLES -- 0.4%
5,250 Archer-Daniels-Midland (B) 190
--------------
TOTAL PREFERRED STOCK (Cost $230) 190
--------------
Bishop Street Funds
10
Dividend Value Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Shares/Face
Amount Value
(000) (000)
- ------------ --------------
CASH EQUIVALENTS (D) -- 3.9%
930,120 Dreyfus Cash Management Fund, Institutional
Shares, 0.137% $ 930
930,120 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 0.250% 930
--------------
TOTAL CASH EQUIVALENTS (Cost $1,860) 1,860
--------------
REPURCHASE AGREEMENTS (C) -- 18.0%
$ 1,294 Bank of America 0.190%, dated 06/30/10, to be
repurchased on 07/01/10, repurchase price
$1,293,704 (collateralized by a FHLMC
obligation, par value $1,305,750, 4.500%,
10/01/39, with a total market value of
$1,319,571) 1,294
7,270 JPMorgan 0.240%, dated 06/30/10, to be
repurchased on 07/01/10, repurchase price
$7,270,387 (collateralized by a CLCT
obligation, par value $8,167,845, 0.011% -
0.040%, 03/01/42, with a total market value
of $7,634,283) 7,270
--------------
TOTAL REPURCHASE AGREEMENTS (Cost $8,564) 8,564
--------------
TOTAL INVESTMENTS (Cost $58,813) -- 117.8% $ 56,102
==============
PERCENTAGES ARE BASED ON NET ASSETS OF $47,607($ THOUSANDS).
(A) NON-INCOME PRODUCING SECURITY.
(B) THIS SECURITY OR PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2010. THE
TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2010 WAS $8,274 ($
THOUSANDS).
(C) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES ON
LOAN. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2010 WAS $8,564 ($
THOUSANDS).
(D) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
CLCT -- COLLEGE LOAN CORPORATE TRUST
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
PLC -- PUBLIC LIMITED COMPANY
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.
June 30, 2010 www.bishopstreetfunds.com
11
High Grade Income Fund (UNAUDITED)
TOP TEN HOLDINGS+
Percentage
Coupon Maturity of
Rate Date Investments
------ -------- -----------
1. Countrywide Asset-Backed Certificates, Ser 12, Cl 1A4 5.323% 02/25/36 2.4%
2. Citibank Credit Card Issuance Trust, Ser A3, Cl A3 2.700% 06/24/13 2.1%
3. Ford Credit Auto Owner Trust, Ser E, Cl A3 1.510% 01/15/14 2.0%
4. Dow Chemical 8.550% 05/15/19 1.9%
5. Xerox 8.250% 05/15/14 1.8%
6. GSR Mortgage Loan Trust, Ser 4, Cl 3A2 2.150% 04/25/32 1.8%
7. Rio Tinto Finance USA 9.000% 05/01/19 1.8%
8. General Electric Capital MTN, Ser A 5.450% 01/15/13 1.7%
9. IBM 8.375% 11/01/19 1.6%
10. Cellco Partnership 5.550% 02/01/14 1.4%
SECTOR WEIGHTINGS+
(BAR CHART)
Banks 15.7%
U.S. Government Agency Obligations 13.2%
Asset-Backed Security 12.9%
Information Technology 8.4%
Financials 8.2%
U.S. Treasury Obligations 7.6%
Industrials 6.7%
Materials 5.3%
Consumer Discretionary 5.0%
U.S. Government Mortgage-Backed Obligations 4.1%
Consumer Staples 3.9%
Telecommunication Services 3.0%
Municipal Bond 3.0%
Health Care 2.5%
Cash Equivalents 0.5%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. EXCLUDES SECURITIES PURCHASED
WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING.
SCHEDULE OF INVESTMENTS
AS OF JUNE 30, 2010
Face
Amount Value
(000) (000)
- ------------ --------------
CORPORATE OBLIGATIONS -- 58.2%
BANKS -- 15.6%
Australia & New Zealand Banking Group (A) (D)
$ 1,500 0.819%, 06/18/12 $ 1,500
Bank of America MTN
1,100 7.375%, 05/15/14 1,233
Bishop Street Funds
12
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
BANKS -- (CONTINUED)
Bank of Oklahoma (A) (E)
$ 500 5.750%, 05/15/17 $ 478
Barclays Bank PLC
1,150 6.750%, 05/22/19 1,279
500 5.200%, 07/10/14 528
Bear Stearns LLC (C)
1,500 7.250%, 02/01/18 1,752
BHP Billiton Finance
950 5.250%, 12/15/15 1,076
Citigroup
1,500 6.500%, 08/19/13 1,599
Goldman Sachs Group
1,300 7.500%, 02/15/19 1,453
JPMorgan Chase Capital XXVII, Ser AA
1,000 7.000%, 11/01/39 1,017
JPMorgan Chase, Ser AI (B)
1,400 5.875%, 06/13/16 1,532
Morgan Stanley
1,300 7.300%, 05/13/19 1,398
1,400 4.200%, 11/20/14 1,382
Rio Tinto Finance USA
1,700 9.000%, 05/01/19 2,231
Wells Fargo Bank (A)
1,600 0.646%, 05/16/16 1,469
--------------
19,927
--------------
CONSUMER DISCRETIONARY -- 5.0%
Comcast
1,000 6.500%, 01/15/17 1,146
Home Depot
700 5.875%, 12/16/36 718
McDonald's MTN, Ser H
1,525 4.125%, 06/01/13 1,643
Time Warner Cable
1,350 8.250%, 04/01/19 1,660
Whirlpool MTN
1,050 8.600%, 05/01/14 1,238
--------------
6,405
--------------
June 30, 2010 www.bishopstreetfunds.com
13
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
CONSUMER STAPLES -- 3.8%
Costco Wholesale
$ 1,100 5.500%, 03/15/17 $ 1,266
Kraft Foods
900 6.500%, 02/09/40 1,006
1,075 5.375%, 02/10/20 1,152
Wal-Mart Stores
1,300 5.375%, 04/05/17 1,491
--------------
4,915
--------------
FINANCIALS -- 8.2%
Berkshire Hathaway
1,260 3.200%, 02/11/15 1,298
Boeing Capital
1,250 3.250%, 10/27/14 1,302
Boston Properties
1,200 5.625%, 11/15/20 1,255
Capital One Financial
1,000 7.375%, 05/23/14 1,143
General Electric Capital MTN (A)
1,325 0.524%, 05/08/13 1,279
General Electric Capital MTN, Ser A (C)
2,050 5.450%, 01/15/13 2,203
Jefferies Group
675 6.250%, 01/15/36 604
WEA Finance LLC (D)
1,300 5.750%, 09/02/15 1,405
--------------
10,489
--------------
HEALTH CARE -- 2.4%
Bristol-Myers Squibb (C)
300 5.450%, 05/01/18 344
Genentech (C)
1,300 4.750%, 07/15/15 1,438
Merck
1,200 5.000%, 06/30/19 1,335
--------------
3,117
--------------
INDUSTRIALS -- 6.7%
Allied Waste North America, Ser B
1,200 7.125%, 05/15/16 1,287
Boeing
500 4.875%, 02/15/20 551
Bishop Street Funds
14
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
INDUSTRIALS -- (CONTINUED)
Bunge Finance
$ 1,300 8.500%, 06/15/19 $ 1,552
Caterpillar (C)
1,250 7.900%, 12/15/18 1,607
Continental Airlines
1,274 9.000%, 07/08/16 1,369
DirecTV Holdings LLC
500 6.375%, 06/15/15 518
Emerson Electric
500 5.250%, 10/15/18 565
News America
1,000 6.650%, 11/15/37 1,122
--------------
8,571
--------------
INFORMATION TECHNOLOGY -- 8.3%
Cisco Systems
1,500 5.500%, 02/22/16 1,728
Dell
400 5.625%, 04/15/14 449
Hewlett-Packard (C)
1,375 4.500%, 03/01/13 1,484
IBM
1,500 8.375%, 11/01/19 2,038
Nokia
1,250 5.375%, 05/15/19 1,315
Oracle (C)
1,200 5.250%, 01/15/16 1,362
Xerox
2,000 8.250%, 05/15/14 2,344
--------------
10,720
--------------
MATERIALS -- 5.2%
Dow Chemical
1,950 8.550%, 05/15/19 2,387
Monsanto
1,400 7.375%, 08/15/12 1,570
Nucor (C)
1,300 4.875%, 10/01/12 1,402
Potash Corp of Saskatchewan
1,200 5.250%, 05/15/14 1,324
--------------
6,683
--------------
June 30, 2010 www.bishopstreetfunds.com
15
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
TELECOMMUNICATION SERVICES -- 3.0%
AT&T
$ 500 5.800%, 02/15/19 $ 563
AT&T Wireless Services
1,300 8.125%, 05/01/12 1,454
Cellco Partnership (C)
1,600 5.550%, 02/01/14 1,794
--------------
3,811
--------------
TOTAL CORPORATE OBLIGATIONS (Cost $67,854) 74,638
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 13.1%
FHLB
1,300 5.125%, 03/10/17 1,492
FHLMC
875 8.250%, 06/01/16 1,076
1,000 5.875%, 05/23/16 1,044
FHLMC MTN
1,000 4.250%, 05/22/13 1,082
FNMA
1,500 5.780%, 06/07/22 (C) 1,627
700 5.000%, 03/02/15 788
1,200 3.500%, 08/25/14 1,205
1,300 3.400%, 12/07/16 (C) 1,314
1,275 3.125%, 09/29/14 1,284
1,250 3.125%, 01/21/15 1,265
1,250 3.000%, 07/28/14 (C) 1,274
550 3.000%, 03/09/15 553
1,600 2.500%, 03/03/14 (C) 1,606
1,200 2.125%, 06/24/13 1,209
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $16,516) 16,819
--------------
ASSET-BACKED SECURITIES -- 12.8%
Ally Auto Receivables Trust, Ser B, Cl A3 (D)
1,750 1.980%, 10/15/13 1,772
Capital One Multi-Asset Execution Trust, Ser A2,
Cl A2
1,600 3.200%, 04/15/14 1,634
Citibank Credit Card Issuance Trust, Ser A3,
Cl A3
2,600 2.700%, 06/24/13 2,643
Countrywide Asset-Backed Certificates, Ser 12,
Cl 1A4 (A)
3,281 5.323%, 02/25/36 3,086
Bishop Street Funds
16
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
ASSET-BACKED SECURITIES (CONTINUED)
Ford Credit Auto Owner Trust, Ser E, Cl A3 (A)
$ 2,500 1.510%, 01/15/14 $ 2,514
GSR Mortgage Loan Trust, Ser 4, Cl 3A2 (A)
2,481 2.150%, 04/25/32 2,244
Mercedes-Benz Auto Receivables, Ser I, Cl A3
1,250 1.670%, 01/15/14 1,263
WaMu Mortgage Pass Through Certificates, Ser
AR9, Cl 2A (A)
1,428 3.109%, 07/25/42 1,257
--------------
TOTAL ASSET-BACKED SECURITIES (Cost $15,986) 16,413
--------------
U.S. TREASURY OBLIGATIONS -- 7.5%
U.S. Treasury Bonds
700 7.250%, 05/15/16 899
1,250 4.750%, 02/15/37 1,435
1,500 4.500%, 08/15/39 1,652
U.S. Treasury Notes
575 3.750%, 11/15/18 620
625 3.125%, 10/31/16 656
500 3.125%, 05/15/19 (C) 510
1,120 2.625%, 04/30/16 1,151
1,400 2.500%, 06/30/17 1,406
750 2.375%, 10/31/14 774
500 2.125%, 11/30/14 511
--------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $9,241) 9,614
--------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 4.1%
FHLMC REMIC, Ser 2844, Cl VB
102 5.500%, 12/15/19 101
FHLMC REMIC, Ser 3196, Cl CB
305 5.250%, 08/15/11 304
FHLMC REMIC, Ser R010, Cl AB
555 5.500%, 12/15/19 580
FNMA, Ser 2003-33, Cl AB
1,584 3.750%, 03/25/33 1,647
FNMA, Ser 254884
196 3.500%, 08/01/10 198
FNMA, Ser 889958
614 5.000%, 10/01/23 657
June 30, 2010 www.bishopstreetfunds.com
17
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Shares/Face
Amount Value
(000) (000)
- ------------ --------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (CONTINUED)
FNMA REMIC, Ser 2007-B1, Cl BE
$ 692 5.450%, 12/25/20 $ 745
GNMA, Ser 7, Cl PE
982 5.500%, 11/16/31 1,031
--------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $5,031) 5,263
--------------
MUNICIPAL BONDS -- 3.0%
MUNICIPAL -- 3.0%
California State, GO
1,500 7.550%, 04/01/39 1,609
Michigan Municipal Bond Authority, RB, Merrill
Lynch Insured (A)
500 2.900%, 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 1,296
New Mexico Mortgage Finance Authority, Ser B3,
RB, AMT, GNMA/FNMA/FHLMC Insured
405 4.200%, 07/01/28 400
--------------
TOTAL MUNICIPAL BONDS (Cost $3,640) 3,805
--------------
CASH EQUIVALENTS (F) -- 0.5%
337,289 Dreyfus Cash Management Fund, Institutional
Shares, 0.137% 337
337,289 Fidelity Institutional Money Market Portfolio,
Institutional Shares, 0.250% 337
--------------
TOTAL CASH EQUIVALENTS (Cost $674) 674
--------------
REPURCHASE AGREEMENTS (G) -- 11.7%
$ 2,265 Bank of America 0.190%, dated 06/30/10, to be
repurchased on 07/01/10, repurchase price
$2,265,247 (collateralized by a FHLMC
obligation, par value $2,286,759, 4.500%,
10/01/39, with a total market value of
$2,310,610) 2,265
12,730 JPMorgan 0.240%, dated 06/30/10, to be
repurchased on 07/01/10, repurchase price
$12,729,613 (collateralized by a CLCT
obligation, par value $14,302,155, 0.011% -
0.040%, 03/01/42, with a total market value
of $13,367,872) 12,730
--------------
TOTAL REPURCHASE AGREEMENTS (Cost $14,995) 14,995
--------------
TOTAL INVESTMENTS (Cost $133,937) -- 110.9% $ 142,221
==============
Bishop Street Funds
18
High Grade Income Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
PERCENTAGES ARE BASED ON NET ASSETS OF $128,201($ THOUSANDS).
(A) FLOATING RATE SECURITY THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS
THE RATE IN EFFECT AS OF JUNE 30, 2010. THE DATE REPORTED ON THE SCHEDULE
OF INVESTMENTS 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 IS ON LOAN AT JUNE 30, 2010. THE
TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2010 WAS $14,498 ($
THOUSANDS).
(D) SECURITIES SOLD WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT FROM
REGISTRATION UNDER SECTION 144A OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR OTHER "ACCREDITED
INVESTORS." THESE SECURITIES HAVE BEEN DETERMINED TO BE LIQUID UNDER
GUIDELINES ESTABLISHED BY THE BOARD OF TRUSTEES.
(E) STEP BOND -- THE RATE REPORTED IS THE EFFECTIVE YIELD ON JUNE 30, 2010. THE
COUPON ON A STEP BOND CHANGES ON A SPECIFIC DATE.
(F) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010.
(G) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES ON
LOAN. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2010 WAS $14,995 ($
THOUSANDS).
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
AMT -- ALTERNATIVE MINIMUM TAX
CL -- CLASS
CLCT -- COLLEGE LOAN CORPORATE TRUST
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
LLC -- LIMITED LIABILITY CORPORATION
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, 2010 www.bishopstreetfunds.com
19
Hawaii Municipal Bond Fund (UNAUDITED)
TOP TEN HOLDINGS+
Percentage
Coupon Maturity of
Rate Date Investments
------ -------- -----------
1. Hawaii State, RB 5.100% 07/01/39 3.0%
2. Honolulu City & County, Board of Water Supply, RB 4.750% 07/01/14 2.3%
3. Honolulu Hawaii City & County, Ser A, GO 5.000% 07/01/23 2.2%
4. Honolulu Hawaii City & County, GO 5.000% 07/01/17 2.0%
5. Hawaii State, RB 5.000% 07/01/16 1.6%
6. Hawaii State, Housing Finance & Development, RB 5.350% 07/01/18 1.5%
7. Honolulu Hawaii City & County, GO 5.000% 07/01/15 1.4%
8. Hawaii State, Housing Finance & Development, RB 6.500% 07/01/33 1.3%
9. Honolulu City & County, Board of Water Supply, RB 5.000% 07/01/26 1.3%
10. Hawaii State, Department of Hawaiian
Home Lands, COP 5.000% 11/01/31 1.3%
SECTOR WEIGHTINGS+
(BAR CHART)
General Obligation 43.1%
Transportation 12.6%
General Revenue 9.6%
Higher Education 7.9%
Water 7.1%
Power 4.3%
Airport 3.2%
Polution 2.1%
Single-Family Housing 2.1%
Utilities 2.1%
Housing 1.9%
Facilities 1.3%
Medical 1.2%
Short-Term Investments 0.9%
Education 0.6%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
AS OF JUNE 30, 2010
Face
Amount Value
(000) (000)
- ------------ --------------
MUNICIPAL BONDS -- 98.5%
ALASKA -- 0.1%
City of Anchorage Alaska, Water Department, RB,
NPFGC Re-Insured
$ 200 5.000%, 05/01/37 $ 206
--------------
Bishop Street Funds
20
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
CALIFORNIA -- 2.0%
California Health Facilities Financing
Authority, Ser B, RB
$ 1,000 5.000%, 11/15/25 $ 1,028
California State, GO
1,000 5.000%, 04/01/38 950
San Francisco Community College District,
Ser D, GO
1,000 5.000%, 06/15/34 1,037
San Jose Evergreen Community College District,
Ser B, GO, AGM Insured (A)
1,000 6.133%, 09/01/28 359
--------------
3,374
--------------
GEORGIA -- 1.1%
City of Atlanta Georgia, Ser A, RB, AGM-CR FGIC
Insured
785 5.500%, 11/01/22 883
Main Street, Natural Gas, Ser B, RB
1,000 5.000%, 03/15/18 1,008
--------------
1,891
--------------
HAWAII -- 80.3%
County of Kauai Hawaii, Ser A, GO, NPFGC
Re-insures FGIC Insured
1,000 5.000%, 08/01/28 1,050
Hawaii County, Refunding & Improvement Project,
Ser A, GO, NPFGC Re-insures FGIC Insured
430 5.600%, 05/01/13 480
Hawaii County, Ser A, GO, AGM Insured
125 5.000%, 07/15/21 132
1,500 5.000%, 07/15/23 1,575
Hawaii County, Ser A, GO, NPFGC Re- Insured
1,055 5.250%, 07/15/18 1,147
1,000 5.000%, 07/15/24 1,049
Hawaii County, Unlimited Public Improvements,
Ser A, GO, AMBAC Insured
1,000 5.000%, 07/15/15 1,135
Hawaii County, Unlimited Public Improvements,
Ser A, GO, NPFGC Insured
505 5.000%, 07/15/21 561
1,000 5.000%, 07/15/22 1,101
Hawaii Pacific Health, Ser A, RB
1,000 4.625%, 07/01/21 992
Hawaii State, Airport System, Ser B, RB, AMT,
NPFGC Re-insures FGIC Insured,
Pre-Refunded @ 101 (B)
1,500 6.625%, 07/01/10 1,515
June 30, 2010 www.bishopstreetfunds.com
21
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
HAWAII -- (CONTINUED)
Hawaii State, Airport System, RB, AMT, ETM
$ 40 6.900%, 07/01/12 $ 42
Hawaii State, Airport System, RB, AMT, NPFGC
Re-insures FGIC Insured
1,000 5.750%, 07/01/15 1,037
Hawaii State, Department of Budget & Finance,
Chaminade University, RB, Radian Insured
1,000 4.750%, 01/01/36 920
Hawaii State, Department of Budget & Finance,
Electric Company & Subsidiary Project, Ser A,
RB, AMT, FGIC Insured
750 4.800%, 01/01/25 722
Hawaii State, Department of Budget & Finance,
Electric Company & Subsidiary Project, Ser B,
RB, AMT, XLCA Insured
1,025 5.000%, 12/01/22 1,015
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser A, RB, AMT, AMBAC Insured
445 5.100%, 09/01/32 427
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser A, RB, AMT, FGIC Insured
1,000 4.650%, 03/01/37 887
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser A, RB, AMT,
NPFGC Re- Insured
2,000 5.650%, 10/01/27 2,025
Hawaii State, Department of Budget & Finance,
Hawaiian Electric, Ser C, RB, AMT, AMBAC Insured
1,000 6.200%, 11/01/29 1,003
Hawaii State, Department of Budget & Finance,
Mid Pacific Institute, RB, Radian Insured
1,000 5.000%, 01/01/26 1,008
Hawaii State, Department of Hawaiian Home Lands,
Kapolei Office Facilities, Ser A,
COP,AGM Insured
2,000 5.000%, 11/01/31 2,074
Hawaii State, Harbor System, Ser A, RB, AMT,
AGM Insured
2,025 5.750%, 07/01/17 2,071
370 5.750%, 07/01/29 378
1,210 5.700%, 07/01/16 1,237
1,000 5.600%, 07/01/15 1,023
Hawaii State, Harbor System, Ser B, RB, AMT,
AGM Insured
1,000 5.000%, 01/01/13 1,066
500 5.000%, 01/01/23 506
Hawaii State, Harbor System, Ser B, RB, AMT,
AMBAC Insured
200 5.500%, 07/01/19 207
Hawaii State, Highway, RB
300 5.500%, 07/01/18 360
Bishop Street Funds
22
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
HAWAII -- (CONTINUED)
$ 1,000 5.500%, 01/01/25 $ 1,132
Hawaii State, Highway, RB, AGM Insured
1,800 5.000%, 07/01/12 1,951
Hawaii State, Highway, Ser A, RB, AGM Insured
1,725 5.000%, 07/01/21 1,874
1,565 5.000%, 07/01/22 1,687
1,000 5.000%, 07/01/23 1,072
Hawaii State, Highway, Ser B, RB, AGM Insured
2,300 5.000%, 07/01/16 2,601
Hawaii State, Housing Finance & Development,
Ser B-RMKT, RB, AGM Insured
2,000 6.500%, 07/01/33 2,168
Hawaii State, Housing Finance & Development,
Single-Family Housing, Ser A, RB, AMT, FNMA
Collateral Insured
500 5.400%, 07/01/30 500
2,500 5.350%, 07/01/18 2,501
Hawaii State, Housing Finance & Development,
Single-Family Housing, Ser B, RB, FNMA
Collateral Insured
520 5.450%, 07/01/17 520
Hawaii State, Improvements Authority,
Ser DA, GO, NPFGC Re- Insured
850 5.250%, 09/01/23 913
Hawaii State, Improvements Authority, Ser
DB, GO, NPFGC Re- Insured
200 5.250%, 09/01/15 224
Hawaii State, Improvements Authority, Ser
DD, GO, NPFGC Re- Insured
1,500 5.250%, 05/01/15 1,706
Hawaii State, Improvements Authority, Ser DF,
GO, AMBAC Insured
1,250 5.000%, 07/01/18 1,389
1,250 5.000%, 07/01/21 1,371
90 5.000%, 07/01/22 98
Hawaii State, RB, BHAC-CR Insured
300 4.750%, 01/01/22 332
Hawaii State, Ser A, RB
4,875 5.100%, 07/01/39 4,901
1,250 5.000%, 07/01/22 1,350
Hawaii State, Ser B, RB, AGM Insured
1,400 5.250%, 07/01/19 1,656
Hawaii State, Ser CM-FGIC-FSA-CR, GO, AGM-CR
FGIC Insured
1,000 6.500%, 12/01/14 1,212
Hawaii State, Ser CU, GO, NPFGC Re- Insured,
Pre-Refunded @ 100 (B)
25 5.750%, 10/01/10 25
June 30, 2010 www.bishopstreetfunds.com
23
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
HAWAII -- (CONTINUED)
Hawaii State, Ser CV, GO, NPFGC Re-insures FGIC
Insured
$ 350 5.375%, 08/01/19 $ 365
Hawaii State, Ser CX, GO, FSA Insured
1,000 5.500%, 02/01/16 1,070
580 5.500%, 02/01/21 618
Hawaii State, Ser CZ, GO, FSA Insured
45 5.250%, 07/01/16 48
Hawaii State, Ser DI, GO, AGM Insured
1,000 5.000%, 03/01/26 1,071
Hawaii State, Ser DK, GO
450 5.000%, 05/01/24 495
475 5.000%, 05/01/25 519
Hawaii State, Ser DN, GO
1,000 5.500%, 08/01/26 1,128
Hawaii State, Ser DO, GO
1,000 5.000%, 08/01/16 1,158
Hawaii State, Ser DQ, GO
1,100 5.000%, 06/01/28 1,193
Hawaii State, Ser DV,GO
600 2.000%, 11/01/12 618
Hawaii State, Unlimited Public Improvements,
Ser DD, GO, NPFGC Re- Insured
1,000 5.000%, 05/01/16 1,111
Hawaii State, Unlimited Public Improvements,
Ser DJ, GO, AMBAC Insured
500 5.000%, 04/01/13 554
Honolulu City & County, Board of Water Supply,
Ser A, RB, FGIC Insured, Pre-Refunded @ 100 (B)
3,300 4.750%, 07/01/14 3,754
Honolulu City & County, Board of Water Supply,
Ser A, RB, NATL-RE Insured
2,000 5.000%, 07/01/26 2,137
Honolulu City & County, Board of Water Supply,
Ser A, RB, NPFGC Re-insures FGIC Insured
2,000 5.000%, 07/01/33 2,053
Honolulu City & County, Board of Water Supply,
Ser B, RB, AMT, NPFGC Re- Insured
1,000 5.250%, 07/01/20 1,069
1,000 5.250%, 07/01/21 1,065
325 5.000%, 07/01/15 357
Honolulu Hawaii City & County, 2nd Board
Resoluton, Ser A, RB, AGM Insured
1,900 5.000%, 07/01/27 2,023
Bishop Street Funds
24
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
HAWAII -- (CONTINUED)
Honolulu Hawaii City & County, Ser A, GO
$ 200 5.250%, 04/01/31 $ 217
1,100 5.250%, 04/01/32 1,190
1,000 5.000%, 04/01/33 1,054
Honolulu Hawaii City & County, Ser A, GO,
AGM Insured
375 5.000%, 07/01/20 421
275 5.000%, 07/01/24 301
1,000 5.000%, 07/01/30 1,056
Honolulu Hawaii City & County, Ser A, GO, NPFGC
Re- Insured
725 5.250%, 03/01/18 798
1,000 5.250%, 03/01/20 1,086
1,500 5.250%, 03/01/24 1,616
500 5.250%, 03/01/28 533
1,800 5.000%, 07/01/21 1,980
3,350 5.000%, 07/01/23 3,648
550 5.000%, 07/01/25 589
540 5.000%, 07/01/26 585
1,000 5.000%, 07/01/27 1,059
Honolulu Hawaii City & County, Ser A, RB
500 5.000%, 07/01/20 564
Honolulu Hawaii City & County, Ser B, GO, NPFGC
Re- Insured
2,000 5.000%, 07/01/15 2,262
Honolulu Hawaii City & County, Ser D, GO
1,000 4.000%, 09/01/25 1,019
1,000 4.000%, 09/01/26 1,014
Honolulu Hawaii City & County, Ser D, GO, NPFGC
Re- Insured
885 5.000%, 07/01/19 989
1,700 5.000%, 07/01/23 1,837
Honolulu Hawaii City & County, Ser D-MBIA-FSA-CR, GO,
AGM-CR NPFGC Re- Insured
1,000 5.000%, 07/01/22 1,087
Honolulu Hawaii City & County, Ser E, GO, NPFGC
Re-insures FGIC Insured
1,500 5.250%, 07/01/20 1,698
Honolulu Hawaii City & County, Ser F, GO,
NATL-RE FGIC Insured
1,000 5.000%, 07/01/29 1,049
Honolulu Hawaii City & County, Ser Senior A, RB,
NATL-RE Insured
1,000 5.000%, 07/01/31 1,044
Honolulu Hawaii City & County, Sewer Improvements,
1st Board Resolution, Ser Senior C, RB, NPFGC Re- Insured
250 5.000%, 07/01/31 261
June 30, 2010 www.bishopstreetfunds.com
25
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
HAWAII -- (CONTINUED)
Honolulu Hawaii City & County, Sewer
Improvements, 2nd Board Resolution, Ser Junior
A-1, RB, NPFGC Re- Insured
$ 815 5.000%, 07/01/22 $ 879
Honolulu Hawaii City & County, Sewer
Improvements, 2nd Board Resoluton, Ser Junior
B-1, RB, NPFGC Re- Insured
865 5.000%, 07/01/23 927
Honolulu Hawaii City & County, Valorem Tax
Project, Ser B, GO, NPFGC Re- Insured
3,000 5.000%, 07/01/17 3,360
Honolulu Hawaii City & County, Waipahu Towers
Project, Ser A, RB, AMT, GNMA Collateral Insured
195 6.900%, 06/20/35 196
Kauai County, Ser A, GO, NPFGC Re- Insured
1,500 5.000%, 08/01/25 1,525
Kauai County, Ser A, GO, NPFGC Re-insures FGIC
Insured
1,610 5.000%, 08/01/21 1,743
1,440 5.000%, 08/01/23 1,542
Maui County, GO, NPFGC Re- Insured
100 5.000%, 03/01/17 111
1,100 5.000%, 03/01/24 1,180
Maui County, Hawaii, Ser A, GO
1,000 5.000%, 07/01/19 1,129
Maui County, Ser A, GO, AGM Insured
1,000 3.500%, 07/01/16 1,062
Maui County, Ser A, GO, NPFGC Re- Insured
1,000 4.750%, 07/01/25 1,059
Maui County, Ser B, GO, NPFGC Re- Insured
500 5.000%, 07/01/16 572
500 5.000%, 09/01/17 550
University of Hawaii, College Improvements
Project, Ser A, RB, FGIC Insured, Pre-Refunded
@ 100 (B)
1,605 5.500%, 07/15/12 1,766
500 5.125%, 07/15/12 546
University of Hawaii, College Improvements
Project, Ser A, RB, NPFGC Re- Insured
200 5.000%, 07/15/19 218
University of Hawaii, Ser A, RB
100 6.000%, 10/01/38 112
University of Hawaii, Ser A, RB, AGC-ICC
MBIA Insured
1,400 5.000%, 10/01/23 1,504
University of Hawaii, Ser A, RB, MBIA Insured
400 4.500%, 07/15/32 399
Bishop Street Funds
26
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
HAWAII -- (CONTINUED)
University of Hawaii, Ser A, RB, NPFGC
Re- Insured
$ 975 5.000%, 07/15/21 $ 1,047
150 5.000%, 07/15/22 160
University of Hawaii, Ser B, RB, AGM Insured
320 5.250%, 10/01/16 331
775 5.250%, 10/01/17 799
--------------
134,008
--------------
ILLINOIS -- 1.0%
Chicago O'Hare International Airport, General
Airport, Ser E, RB, CIFG Insured
1,550 5.250%, 01/01/22 1,612
--------------
INDIANA -- 1.3%
Indiana Finance Authority, Highway Revenue,
Ser A, RB, NPFGC Re-insures FGIC Insured
1,200 4.500%, 06/01/27 1,213
Wayne Township School Building, RB, NPFGC
Re-insures FGIC Insured
1,000 3.500%, 07/15/24 942
--------------
2,155
--------------
MAINE -- 0.5%
Maine Health & Higher Educational Facilities
Authority, Ser A, RB
750 5.250%, 07/01/31 782
--------------
MASSACHUSETTS -- 0.4%
University of Massachusetts Building
Authority, Ser 1, RB
650 5.000%, 05/01/22 723
--------------
NEVADA -- 0.2%
Nevada State, Municipal Bond Bank Project,
Ser F, GO, AGM Insured
250 5.000%, 12/01/24 263
--------------
NEW MEXICO -- 0.5%
New Mexico Mortgage Finance Authority,
Ser B3, RB,
AMT, GNMA/FNMA/FHLMC Insured
880 4.200%, 07/01/28 866
--------------
NEW YORK -- 1.3%
New York City Municipal Water Finance
Authority, Ser BB, RB
1,000 5.000%, 06/15/27 1,087
New York State, Dormitory Authority, Ser A, RB
1,000 3.100%, 07/01/17 1,029
--------------
2,116
--------------
June 30, 2010 www.bishopstreetfunds.com
27
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000) (000)
- ------------ --------------
OKLAHOMA -- 0.6%
Tulsa Airports Improvement Trust, Ser B, RB
$ 1,000 5.375%, 06/01/24 $ 1,028
--------------
OREGON -- 0.6%
Oregon State, Ser C, GO
1,000 4.100%, 08/01/28 1,006
--------------
PUERTO RICO -- 3.7%
Commonwealth of Puerto Rico, GO, NPFGC Re-
Insured
1,500 6.000%, 07/01/15 1,673
Commonwealth of Puerto Rico, Public Improvement,
GO, FSA Insured, Pre-Refunded @ 100 (B)
55 5.000%, 07/01/11 58
Puerto Rico Electric Power Authority, Ser XX, RB
2,000 4.750%, 07/01/26 1,989
Puerto Rico Electric Power Authority, Ser ZZ, RB
1,000 5.000%, 07/01/24 1,028
Puerto Rico Highway & Transportation Authority,
Ser AA-2-RMKT, RB (C)
1,000 5.300%, 07/01/35 993
Puerto Rico, Electric Power Authority, Ser HH,
RB, AGM Insured, Pre-Refunded @ 101 (B)
500 5.250%, 07/01/10 505
--------------
6,246
--------------
SOUTH CAROLINA -- 1.3%
College of Charleston, Ser D, RB, XLCA Insured
765 4.500%, 04/01/37 756
Sumter South Carolina, Waterworks & Sewer
Improvement Systems, RB, XLCA Insured
500 5.000%, 12/01/21 538
840 5.000%, 12/01/24 887
--------------
2,181
--------------
TEXAS -- 2.1%
Alamo Community College District, Improvements
Authority, GO, NPFGC Re-insures FGIC Insured
1,000 4.500%, 08/15/26 1,025
City of El Paso Texas, GO
500 4.000%, 08/15/16 543
City of Fort Worth Texas, RB
1,000 4.300%, 02/15/35 960
North Texas Tollway Authority, Highway Revenue,
RB, Assured Guarantee Insured (A)
3,000 3.388%, 01/01/30 1,005
--------------
3,533
--------------
Bishop Street Funds
28
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Face
Amount Value
(000)/Shares (000)
- ------------ --------------
WASHINGTON -- 0.8%
County, of King Washington, RB, AGM Insured
$ 710 5.000%, 01/01/30 $ 743
Washington State, Motor Vehicles Tax Authority,
Ser F, GO, AMBAC Insured (A)
1,000 4.779%, 12/01/25 505
--------------
1,248
--------------
WISCONSIN -- 0.7%
Wisconsin State, Ser D, GO, AGM Insured
1,000 5.000%, 05/01/21 1,108
--------------
TOTAL MUNICIPAL BONDS (Cost $159,769) 164,346
--------------
CASH EQUIVALENTS (D) -- 0.9%
776,290 Dreyfus Cash Management Fund, Institutional
Shares, 0.170% 777
776,290 Fidelity Institutional Tax-Exempt Portfolio,
Institutional Shares, 0.124% 777
--------------
TOTAL CASH EQUIVALENTS (Cost $1,554) 1,554
--------------
TOTAL INVESTMENTS (Cost $161,323) -- 99.4% $ 165,900
==============
PERCENTAGES ARE BASED ON NET ASSETS OF $166,929 ($ 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) SECURITY PURCHASED ON A WHEN-ISSUED BASIS.
(D) THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010.
AGC -- AMERICAN GUARANTEE CORPORATION
AGM -- ASSURED GUARANTY MUNICIPAL CORPORATION
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 CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA -- FINANCIAL SECURITY ASSURANCE
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
June 30, 2010 www.bishopstreetfunds.com
29
Hawaii Municipal Bond Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
NPFGC -- NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION
RB -- REVENUE BOND
SER -- SERIES
XLCA -- XL CAPITAL
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
30
Government Money Market Fund (UNAUDITED)
SECTOR WEIGHTINGS+
(BAR CHART)
U.S. Government Agency Obligation 75.8%
U.S. Treasury Obligation 17.5%
Cash Equivalents 6.7%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
SCHEDULE OF INVESTMENTS
AS OF JUNE 30, 2010
Face
Amount Value
(000) (000)
- ------------ --------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 77.5%
FFCB (A)
$ 4,500 0.347%, 12/27/10 $ 4,500
FHLB (B)
3,700 0.200%, 08/11/10 3,699
9,000 0.143%, 07/16/10 8,999
3,000 0.130%, 07/07/10 3,000
1,500 0.130%, 07/21/10 1,500
2,550 0.100%, 07/23/10 2,550
7,490 0.094%, 07/09/10 7,490
FHLMC (B)
2,915 0.331%, 11/16/10 2,911
7,000 0.273%, 10/27/10 6,994
3,000 0.250%, 09/21/10 2,998
6,000 0.250%, 09/28/10 5,996
3,362 0.240%, 09/14/10 3,360
2,000 0.230%, 08/20/10 1,999
8,500 0.210%, 08/09/10 8,499
3,000 0.200%, 07/21/10 3,000
2,000 0.185%, 07/26/10 2,000
4,000 0.180%, 07/07/10 4,000
1,270 0.180%, 08/18/10 1,270
3,000 0.170%, 07/14/10 3,000
4,000 0.168%, 07/09/10 4,000
4,400 0.160%, 07/06/10 4,400
5,000 0.150%, 08/16/10 4,999
2,923 0.090%, 07/28/10 2,923
FNMA (B)
2,500 0.280%, 10/13/10 2,498
2,000 0.270%, 10/18/10 1,998
3,000 0.265%, 09/22/10 2,998
1,408 0.210%, 08/11/10 1,407
1,000 0.170%, 08/23/10 1,000
4,000 0.165%, 07/12/10 4,000
1,500 0.160%, 07/21/10 1,500
8,000 0.151%, 07/28/10 7,999
2,200 0.110%, 08/02/10 2,200
1,300 0.100%, 07/16/10 1,300
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $120,987) 120,987
--------------
June 30, 2010 www.bishopstreetfunds.com
31
Government Money Market Fund (UNAUDITED)
SCHEDULE OF INVESTMENTS
(CONTINUED)
Shares/Face
Amount Value
(000) (000)
- ------------ --------------
U.S. TREASURY OBLIGATIONS (B) -- 17.9%
U.S. Treasury Bills
$ 9,000 0.088%, 08/12/10 $ 8,999
4,000 0.078%, 07/08/10 4,000
10,000 0.070%, 07/22/10 9,999
5,000 0.046%, 08/05/10 5,000
--------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $27,998) 27,998
--------------
CASH EQUIVALENTS (C) -- 6.9%
3,525,908 AIM STIT-Government & Agency Portfolio, 0.020% 3,526
3,632,754 Dreyfus Government Cash Management Fund,
Institutional Shares, 0.049% 3,633
3,525,908 Fidelity Institutional Money Market Funds,
Institutional Shares, 0.047% 3,526
--------------
TOTAL CASH EQUIVALENTS (Cost $10,685) 10,685
--------------
TOTAL INVESTMENTS (Cost $159,670) -- 102.3% $ 159,670
==============
PERCENTAGES ARE BASED ON NET ASSETS OF $156,141 ($ THOUSANDS).
(A) FLOATING RATE SECURITY -- THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS
IS THE RATE IN EFFECT AS OF JUNE 30, 2010. THE DATE REPORTED ON THE
SCHEDULE OF INVESTMENTS IS THE FINAL MATURITY DATE.
(B) ZERO COUPON SECURITY -- THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS
THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(C) THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010.
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE CORPORATION
COST FIGURES ARE SHOWN IN THOUSANDS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
32
Bishop Street Funds (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2010
(IN THOUSANDS)
High
Strategic Dividend Grade
Growth Value Income
Fund Fund Fund
--------- -------- --------
ASSETS:
Investments, at Cost $ 48,614 $ 50,249 $118,942
Repurchase Agreements, at Cost -- 8,564 14,995
======== ======== ========
Investments, at Value $ 49,410 $ 47,538(1) $127,226(1)
Repurchase Agreements, at Value -- 8,564 14,995
Receivable for Investment Securities Sold 168 -- --
Dividends and Interest Receivable 35 124 1,253
Receivable for Fund Shares Sold -- 11 --
Prepaid Expenses 3 2 8
-------- -------- --------
Total Assets 49,616 56,239 143,482
-------- -------- --------
LIABILITIES:
Advisory Fees Payable 32 21 39
Administrative Fees Payable 5 5 13
Shareholder Servicing Fees Payable 4 4 11
Chief Compliance Officer Fees Payable 2 1 3
Collateral on Securities Loaned -- 8,564 14,995
Income Distribution Payable -- -- 146
Payable for Investment Securities Purchased 168 -- --
Payable for Fund Shares Redeemed 10 2 39
Accrued Expenses Payable 18 35 35
-------- -------- --------
Total Liabilities 239 8,632 15,281
-------- -------- --------
Net Assets $ 49,377 $ 47,607 $128,201
======== ======== ========
Fund Shares $ 61,689 $ 73,297 $117,722
Undistributed Net Investment Income
(Accumulated Net Investment Loss) (41) 15 5
Accumulated Net Realized Gain (Loss) on Investments (13,067) (22,994) 2,190
Net Unrealized Appreciation(Depreciation)on Investments 796 (2,711) 8,284
-------- -------- --------
Net Assets $ 49,377 $ 47,607 $128,201
======== ======== ========
Class I Shares:
Net Assets $ 49,377 $ 47,607 $128,201
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 5,023 6,538 11,765
Net Asset Value, Offering and Redemption Price
Per Share -- Class I (Net Assets / Shares Outstanding) $ 9.83 $ 7.28 $ 10.90
======== ======== ========
(1) INCLUDED IN "INVESTMENTS, AT VALUE" IS THE MARKET VALUE OF SECURITIES ON
LOAN IN THE AMOUNTS OF $8,274 ($ THOUSANDS), AND $14,498 ($ THOUSANDS) FOR
THE DIVIDEND VALUE 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.
June 30, 2010 www.bishopstreetfunds.com
33
Bishop Street Funds (UNAUDITED)
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2010
(IN THOUSANDS)
Hawaii Government
Municipal Money
Bond Market
Fund Fund
--------- ----------
ASSETS:
Investments, at Cost $ 161,323 $159,670
========= ========
Investments, at Value $ 165,900 $159,670
Interest Receivable 3,007 --
Receivable for Fund Shares Sold 117 --
Receivable due from Investment Adviser -- 22
Prepaid Expenses 6 18
--------- --------
Total Assets 169,030 159,710
--------- --------
LIABILITIES:
Payable for Investment Securities Purchased 1,552 3,500
Income Distribution Payable 398 --
Payable for Fund Shares Redeemed 39 --
Advisory Fees Payable 28 --
Shareholder Servicing Fees Payable 14 --
Administrative Fees Payable 10 15
Distribution Fees Payable 6 8
Chief Compliance Officer Fees Payable 4 3
Accrued Expenses Payable 50 43
--------- --------
Total Liabilities 2,101 3,569
--------- --------
Net Assets $ 166,929 $156,141
========= ========
Fund Shares $ 162,786 $156,141
Undistributed Net Investment Income 4 --
Accumulated Net Realized Loss on Investments (438) --
Net Unrealized Appreciation on Investments 4,577 --
--------- --------
Net Assets $ 166,929 $156,141
========= ========
Class I Shares:
Net Assets $ 137,436 $113,983
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 12,829 113,987
Net Asset Value, Offering and Redemption Price Per Share -- Class I
(Net Assets / Shares Outstanding) $ 10.71 $ 1.00
========= ========
Class A Shares:
Net Assets $ 29,493 $ 42,158
Outstanding Shares of Beneficial Interest
(unlimited authorization -- no par value) 2,753 42,157
Net Asset Value, Offering and Redemption Price Per Share -- Class A
(Net Assets / Shares Outstanding) $ 10.71 $ 1.00
========= ========
Maximum Offering Price Per Shares -- Class A
($10.71 / 97.00%) $ 11.04 --
========= ========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds
34
Bishop Street Funds (UNAUDITED)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2010
(IN THOUSANDS)
High
Strategic Dividend Grade
Growth Value Income
Fund Fund Fund
--------- -------- ------
INVESTMENT INCOME:
Dividend Income $ 291 $ 749 $ --
Interest Income -- -- 2,912
Securities Lending, Net -- 3 11
Foreign Taxes Withheld (2) (6) --
------- ------- ------
Total Investment Income 289 746 2,923
------- ------- ------
EXPENSES:
Investment Adviser Fees 215 186 352
Shareholder Servicing Fee 73 63 160
Administrative Fees 58 50 128
Chief Compliance Officer Fees 1 1 2
Transfer Agent Fees 20 19 27
Professional Fees 13 30 27
Printing Fees 7 6 14
Trustees' Fees 3 3 6
Custody Fees 3 3 3
Registration Fees 1 1 9
Line of Credit 1 -- --
Miscellaneous Expenses 4 3 17
------- ------- ------
Total Expenses 399 365 745
------- ------- ------
Less Waivers:
Investment Adviser Fees -- (42) (112)
Shareholder Servicing Fees (44) (38) (96)
Administrative Fees (23) (20) (51)
------- ------- ------
Total Waivers (67) (100) (259)
------- ------- ------
Total Net Expenses 332 265 486
------- ------- ------
Net Investment Income (Loss) (43) 481 2,437
------- ------- ------
Net Realized Gain (Loss) on Investments 977 (1,193) 1,011
Change in Unrealized Appreciation
(Depreciation) on Investments (4,917) (2,385) 1,917
------- ------- ------
Net Realized and Unrealized Gain (Loss) on Investments (3,940) (3,578) 2,928
------- ------- ------
Increase (Decrease) in Net Assets Resulting from Operations $(3,983) $(3,097) $5,365
======= ======= ======
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, 2010 www.bishopstreetfunds.com
35
Bishop Street Funds (UNAUDITED)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2010
(IN THOUSANDS)
Hawaii Government
Municipal Money
Bond Market
Fund Fund
--------- ----------
INVESTMENT INCOME:
Interest Income $ 3,430 $ 107
Dividend Income -- 2
------- -----
Total Investment Income 3,430 109
------- -----
EXPENSES:
Investment Adviser Fees 291 198
Shareholder Servicing Fee 208 165
Administrative Fees 166 132
Distribution Fees, Class A 34 53
Chief Compliance Officer Fees 3 2
Transfer Agent Fees 42 41
Professional Fees 35 27
Printing Fees 19 15
Trustees' Fees 8 6
Registration Fees 5 5
Custody Fees 4 3
Rating Expense -- 12
Miscellaneous Expenses 27 12
------- -----
Total Expenses 842 671
------- -----
Less Waivers:
Shareholder Servicing Fees (125) (99)
Administrative Fees (108) (53)
Investment Adviser Fees (118) (134)
Expense Reimbursement by Adviser -- (276)
------- -----
Total Waivers (351) (562)
------- -----
Total Net Expenses 491 109
------- -----
Net Investment Income 2,939 --
------- -----
Net Realized Gain on Investments 609 --
Change in Unrealized Appreciation on Investments 914 --
------- -----
Net Realized and Unrealized Gain on Investments 1,523 --
------- -----
Increase in Net Assets Resulting from Operations $ 4,462 $ --
======= =====
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
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2010 (UNAUDITED) AND THE YEAR ENDED
DECEMBER 31, 2009
(IN THOUSANDS)
Strategic Dividend
Growth Fund Value Fund
------------------- ------------------
2010 2009 2010 2009
-------- -------- ------- --------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income (Loss) $ (43) $ (1) $ 481 $ 430
Net Realized Gain (Loss) on Investments 977 (7,091) (1,193) (13,050)
Change in Unrealized Appreciation (Depreciation)
on Investments (4,917) 24,203 (2,385) 25,495
-------- -------- ------- --------
Increase (Decrease) in Net Assets Resulting
from Operations (3,983) 17,111 (3,097) 12,875
-------- -------- ------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares -- -- (466) (437)
Capital Gains:
Class I Shares -- -- -- --
-------- -------- ------- --------
Total Dividends and Distributions -- -- (466) (437)
-------- -------- ------- --------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 765 3,665 2,221 2,362
Reinvestments of Cash Distributions -- -- 311 296
Cost of Shares Redeemed (8,334) (22,084) (1,621) (16,696)
-------- -------- ------- --------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (7,569) (18,419) 911 (14,038)
-------- -------- ------- --------
Total Decrease in Net Assets (11,552) (1,308) (2,652) (1,600)
-------- -------- ------- --------
NET ASSETS:
Beginning of Period 60,929 62,237 50,259 51,859
-------- -------- ------- --------
End of Period $ 49,377 $ 60,929 $47,607 $ 50,259
======== ======== ======= ========
Undistributed Net Investment Income
(Accumulated Net Investment Loss) $ (41) $ 2 $ 15 $ --
======== ======== ======= ========
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 72 411 282 394
Shares Issued in Lieu of Cash Distributions -- -- 40 46
Shares Redeemed (776) (2,386) (204) (2,629)
-------- -------- ------- --------
Net Increase (Decrease) in Shares Outstanding from
Share Transactions (704) (1,975) 118 (2,189)
======== ======== ======= ========
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, 2010 www.bishopstreetfunds.com
37
Bishop Street Funds
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2010 (UNAUDITED) AND THE YEAR ENDED
DECEMBER 31, 2009
(IN THOUSANDS)
High Grade Hawaii Municipal
Income Fund Bond Fund
------------------- -------------------
2010 2009 2010 2009
-------- -------- -------- --------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ 2,437 $ 5,107 $ 2,939 $ 5,913
Net Realized Gain (Loss) on Investments 1,011 6,222 609 (634)
Change in Unrealized Appreciation (Depreciation)
on Investments 1,917 (1,128) 914 9,340
-------- -------- -------- --------
Increase in Net Assets Resulting
from Operations 5,365 10,201 4,462 14,619
-------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares (2,434) (5,099) (2,483) (5,052)
Class A Shares -- -- (459) (864)
Capital Gains:
Class I Shares -- (4,015) -- --
Class A Shares -- -- -- --
-------- -------- -------- --------
Total Dividends and Distributions (2,434) (9,114) (2,942) (5,916)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class I Shares:
Proceeds from Shares Issued 5,731 27,826 6,551 15,742
Reinvestments of Cash Distributions 1,539 5,616 350 704
Cost of Shares Redeemed (8,334) (30,171) (10,616) (14,730)
-------- -------- -------- --------
Total Class I Capital Share Transactions (1,064) 3,271 (3,715) 1,716
-------- -------- -------- --------
Class A Shares:
Proceeds from Shares Issued -- -- 3,653 2,270
Reinvestments of Cash Distributions -- -- 233 413
Cost of Shares Redeemed -- -- (739) (1,639)
-------- -------- -------- --------
Total Class A Capital Share Transactions -- -- 3,147 1,044
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets from
Capital Share Transactions (1,064) 3,271 (568) 2,760
-------- -------- -------- --------
Total Increase in Net Assets 1,867 4,358 952 11,463
-------- -------- -------- --------
NET ASSETS:
Beginning of Period 126,334 121,976 165,977 154,514
-------- -------- -------- --------
End of Period $128,201 $126,334 $166,929 $165,977
======== ======== ======== ========
Undistributed Net Investment Income $ 5 $ 2 $ 4 $ 7
======== ======== ======== ========
SHARE TRANSACTIONS:
Class I Shares:
Shares Issued 532 2,641 613 1,507
Shares Issued in Lieu of Cash Distributions 142 524 33 67
Shares Redeemed (770) (2,851) (993) (1,412)
-------- -------- -------- --------
Total Class I Share Transactions (96) 314 (347) 162
-------- -------- -------- --------
Class A Shares:
Shares Issued -- -- 341 218
Shares Issued in Lieu of Cash Distributions -- -- 22 39
Shares Redeemed -- -- (69) (156)
-------- -------- -------- --------
Total Class A Share Transactions -- -- 294 101
-------- -------- -------- --------
Net Increase (Decrease) in Shares Outstanding from
Share Transactions (96) 314 (53) 263
======== ======== ======== ========
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
38
Bishop Street Funds
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2010 (UNAUDITED) AND THE YEAR ENDED
DECEMBER 31, 2009
(IN THOUSANDS)
Government
Money Market
Fund
--------------------
2010 2009
-------- ---------
INVESTMENT ACTIVITIES FROM OPERATIONS:
Net Investment Income $ -- $ 47
Net Realized Gain on Investments -- 55
-------- ---------
Increase in Net Assets Resulting from Operations -- 102
-------- ---------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Class I Shares -- (47)
Class A Shares -- --
Capital Gains:
Class I Shares -- (26)
Class A Shares -- (15)
-------- ---------
Total Dividends and Distributions -- (88)
-------- ---------
CAPITAL SHARE TRANSACTIONS (ALL AT $1.00 PER SHARE):
Class I Shares:
Proceeds from Shares Issued 120,478 384,869
Reinvestments of Cash Distributions -- 51
Cost of Shares Redeemed (88,901) (466,696)
-------- ---------
Total Class I Capital Share Transactions 31,577 (81,776)
-------- ---------
Class A Shares:
Proceeds from Shares Issued 17,025 47,093
Reinvestments of Cash Distributions -- 15
Cost of Shares Redeemed (20,099) (62,319)
-------- ---------
Total Class A Capital Share Transactions (3,074) (15,211)
-------- ---------
Net Increase (Decrease) in Net Assets from Capital Share Transactions 28,503 (96,987)
-------- ---------
Total Increase (Decrease) in Net Assets 28,503 (96,973)
-------- ---------
NET ASSETS:
Beginning of Period 127,638 224,611
-------- ---------
End of Period $156,141 $ 127,638
======== =========
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, 2010 www.bishopstreetfunds.com
39
Bishop Street Funds
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2010
(UNAUDITED) AND THE YEARS 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:
2010 $10.64 $(0.01) $(0.80) $(0.81) $ -- $ -- $ --
2009 8.08 --** 2.56 2.56 -- -- --
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)
DIVIDEND VALUE FUND
CLASS I SHARES:
2010 $ 7.83 $ 0.08 $(0.56) $(0.48) $(0.07) $ -- $(0.07)
2009 6.02 0.06 1.81 1.87 (0.06) -- (0.06)
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:
2010 $10.65 $ 0.20 $ 0.25 $ 0.45 $(0.20) $ -- $(0.20)
2009 10.56 0.43 0.44 0.87 (0.43) (0.35) (0.78)
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)
HAWAII MUNICIPAL BOND FUND
CLASS I SHARES:
2010 $10.62 $ 0.19 $ 0.09 $ 0.28 $(0.19) $ -- $(0.19)
2009 10.05 0.38 0.57 0.95 (0.38) -- (0.38)
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)
CLASS A SHARES:
2010 $10.62 $ 0.18 $ 0.09 $ 0.27 $(0.18) $ -- $(0.18)
2009 10.05 0.36 0.57 0.93 (0.36) -- (0.36)
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)
+ 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.
** AMOUNT REPRESENTS LESS THAN $0.01.
(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
40
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
- --------- ------- ----------- ----------- ----------------- ------------- ---------
$ 9.83 (7.61)% $ 49,377 1.14%* 1.37%* (0.14)%* 26%
10.64 31.68 60,929 1.11 1.34 0.00 54
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
$ 7.28 (6.15)% $ 47,607 1.05%* 1.45%* 1.92%* 79%
7.83 31.28 50,259 1.05 1.36 0.89 82
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
$10.90 4.29% $128,201 0.76%* 1.17%* 3.81%* 21%
10.65 8.41 126,334 0.76 1.13 4.08 82
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
$10.71 2.65% $137,436 0.55%* 0.97%* 3.58%* 18%
10.62 9.63 139,872 0.55 0.95 3.68 27
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
$10.71 2.53% $ 29,493 0.80%* 1.22%* 3.33%* 18%
10.62 9.35 26,105 0.80 1.20 3.43 27
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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
June 30, 2010 www.bishopstreetfunds.com
41
Bishop Street Funds
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2010
(UNAUDITED) AND THE YEARS ENDED DECEMBER 31,
INVESTMENT ACTIVITIES DIVIDENDS AND
--------------------------- TOTAL DISTRIBUTIONS FROM
NET ASSET NET REALIZED INVESTMENT -------------------- TOTAL
VALUE, NET AND UNREALIZED ACTIVITIES NET DIVIDENDS
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND
OF YEAR INCOME(1) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
--------- ---------- -------------- ---------- ---------- ------- -------------
GOVERNMENT MONEY MARKET FUND
CLASS I SHARES:
2010 $1.00 $ -- $-- $ -- $ -- $-- $ --
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)
CLASS A SHARES:
2010 $1.00 $ -- $-- $ -- $ -- $-- $ --
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)
+ 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.
(SEE NOTE 8).
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
Bishop Street Funds
42
RATIO OF RATIO OF EXPENSES RATIO OF NET
NET ASSET NET ASSETS, EXPENSES TO TO AVERAGE INVESTMENT
VALUE, END OF AVERAGE NET ASSETS INCOME
END OF TOTAL PERIOD NET EXCLUDING FEE TO AVERAGE
PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS
- --------- ------- ----------- ----------- ----------------- ------------
$1.00 0.00% $113,983 0.17%** 0.94%** 0.00%**
1.00 0.05 82,405 0.33 0.89 0.04
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 0.00% $ 42,158 0.16%** 1.19%** 0.00%**
1.00 0.03 45,233 0.35 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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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43
Bishop Street Funds (UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2010
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 five funds (each a Fund,
collectively the "Funds") which includes the Strategic Growth Fund, Dividend
Value Fund (formerly Large Cap Core Equity Fund) High Grade Income Fund, Hawaii
Municipal Bond Fund, and the Government Money Market Fund. Each Fund is
diversified, with the exception of Hawaii Municipal Bond Fund, which is
non-diversified. 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
Bishop Street Funds
44
(UNAUDITED)
price cannot be obtained from an independent, third-party pricing agent, the
Funds seek to obtain a bid price from at least one independent broker.
Securities for which market prices are not "readily available" are valued
in accordance with Fair Value Procedures established by the Funds' Board of
Trustees (the "Board"). The Funds' Fair Value Procedures are implemented through
a Fair Value Pricing Committee (the "Committee") designated by the Funds' Board.
Some of the more common reasons that may necessitate that a security be valued
using Fair Value Procedures include: the security's trading has been halted or
suspended; the security has been 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 Fund 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 accordance with the authoritative guidance on fair value measurements
and disclosure under GAAP, ASC 820 (formerly FASB Statement No. 157), the Fund
discloses fair value of its investments in a hierarchy that prioritizes the
inputs to valuation techniques used to measure the fair value. 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 ASC 820 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 active, or inputs that are
observable (either directly or indirectly) for substantially the full
term of the asset or liability; and
- Level 3 -- Prices, inputs or exotic modeling techniques which are both
significant to the fair value measurement and unobservable (supported
by little or no market activity).
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
June 30, 2010 www.bishopstreetfunds.com
45
Bishop Street Funds (UNAUDITED)
overall fair value measurement. The following is a summary of the inputs used as
of June 30, 2010, in valuing the Funds' investments carried at value:
STRATEGIC GROWTH FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------- ------- ------- -------
Common Stock $49,120 $-- $-- $49,120
Cash Equivalents 290 -- -- 290
------- --- --- -------
Total Investments $49,410 $-- $-- $49,410
======= === === =======
DIVIDEND VALUE FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------- ------- ------- -------
Common Stock $44,703 $ -- $-- $44,703
Exchange Traded Fund 785 -- -- 785
Preferred Stock 190 -- -- 190
Cash Equivalents 1,860 -- -- 1,860
Repurchase Agreements -- 8,564 -- 8,564
------- ------ --- -------
Total Investments $47,538 $8,564 $-- $56,102
======= ====== === =======
HIGH GRADE INCOME FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------- -------- ------- --------
Corporate Obligations $ -- $ 74,638 $-- $ 74,638
U.S. Government
Agency Obligations -- 16,819 -- 16,819
Asset-Backed Securities -- 16,413 -- 16,413
U.S. Treasury Obligations -- 9,614 -- 9,614
U.S. Government Mortgage-
Backed Obligations -- 5,263 -- 5,263
Municipal Bonds -- 3,805 -- 3,805
Cash Equivalents 674 -- -- 674
Repurchase Agreements -- 14,995 -- 14,995
---- -------- --- --------
Total Investments $674 $141,547 $-- $142,221
==== ======== === ========
HAWAII MUNICIPAL BOND FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------- -------- ------- --------
Municipal Bonds $ -- $164,346 $-- $164,346
Cash Equivalents 1,554 -- -- 1,554
------ -------- --- --------
Total Investments $1,554 $164,346 $-- $165,900
====== ======== === ========
Bishop Street Funds
46
(UNAUDITED)
GOVERNMENT MONEY MARKET FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------- -------- ------- --------
U.S. Government
Agency Obligations $ -- $120,987 $-- $120,987
U.S. Treasury Obligations -- 27,998 -- 27,998
Cash Equivalents 10,685 -- -- 10,685
------- -------- --- --------
Total Investments $10,685 $148,985 $-- $159,670
======= ======== === ========
For the six months ended June 30, 2010, there have been no significant
changes to the Funds' fair value methodologies.
In January 2010, the Financial Accounting Standards Board issued Accounting
Standards Update (ASU) No. 2010-6, Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value Measurements, ASU No. 2010-6
enhances and clarifies existing fair value measurement disclosure requirements
and is effective for interim and annual periods beginning after December 15,
2009. The Trust adopted ASU No. 2010-6 on January 1, 2010. The adoption of ASU
No. 2010-6 did not have any impact on the Trust's financial statements.
FEDERAL INCOME TAXES
It is each Fund's intention to continue to qualify as a regulated
investment company for federal income tax purposes under Subchapter M of the
Internal Revenue Code, as amended, and to distribute substantially all of its
taxable income and net capital gains. Accordingly, no provision for federal
income taxes is required.
The Funds evaluate tax positions taken or expected to be taken in the
course of preparing the Funds' tax returns to determine whether it is
"more-likely-than- not" (i.e., greater than 50-percent) that each tax position
will be sustained upon examination by a taxing authority based on the technical
merits of the position. Tax positions not deemed to meet the
more-likely-than-not threshold are recorded as a tax benefit or expense in the
current year. The Funds did not record any tax provision in the current period.
However, management's conclusions regarding tax positions taken may be subject
to review and adjustment at a later date based on factors including, but not
limited to, examination by tax authorities (i.e., the last 3 tax year ends, as
applicable), on-going analysis of and changes to tax laws, regulations and
interpretations thereof.
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.
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47
Bishop Street Funds (UNAUDITED)
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 effective interest method. The Government Money
Market Fund uses the straight line method, which approximates the effective
interest 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. Such collateral will be
cash, debt securities issued or guaranteed by the U.S. Government, securities
that at the time the repurchase agreement is entered into are rated in the
highest category by a nationally recognized statistical rating organization
("NRSRO") or unrated securities that are of comparable quality to securities
that are rated in the highest rating category by an NRSRO, as determined by the
Adviser. 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 Dividend Value 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, and the Government 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.
Bishop Street Funds
48
(UNAUDITED)
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 the Prime Rate plus 4.00%. Cash overdraft charges are
included in miscellaneous expenses on the Statements of Operations. For the six
months ended June 30, 2010, 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 Dividend Value 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 Fund. Beginning April 30, 2010, the Adviser has contractually
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 contractual expense limitations are as follows:
Strategic Growth Fund, Class I Shares 1.25%
Dividend Value Fund, Class I Shares 1.05%
High Grade Income Fund, Class I Shares 0.76%
Hawaii Municipal Bond Fund, Class I Shares 0.55%
Hawaii Municipal Bond Fund, Class A Shares 0.80%
Government Money Market Fund, Class I Shares 0.50%
Government Money Market Fund, Class A Shares 0.75%
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 Government Money Market Fund, 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
June 30, 2010 www.bishopstreetfunds.com
49
Bishop Street Funds (UNAUDITED)
of 0.060% of the average daily net assets of the Government Money Market Fund up
to $500 million and 0.020% of the average daily net assets of the Government
Money Market Fund in excess of $500 million.
Columbia Management Advisors, LLC ("Columbia") serves as the investment
sub-adviser for the Dividend Value Fund pursuant to a sub-adviser agreement
dated May 24, 2010, Columbia is entitled to receive from the Adviser a fee,
computed daily and paid monthly, at the annual rate of 0.36% of the first $75
million, 0.35% of the next $75 million, 0.325% of the next $100 million, 0.30%
of the next $250 million and 0.25% of the assets in excess of $500 million.
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, and has voluntarily agreed to waive
its administrative fee to 0.12% of each of the Funds' average daily net assets
excluding the Hawaii Municipal Bond Fund which is waived to 0.07% of its 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.
Bishop Street Funds
50
(UNAUDITED)
The Trust has adopted and entered into a shareholder service plan and
agreement with SIDCO. Each Fund pays to SIDCO a shareholder servicing fee not to
exceed an annual rate of 0.25% of the average daily net asset value of all
shares of each fund, which is computed daily and paid monthly. Under the
shareholder service plan, SIDCO may perform, or may compensate other service
providers for performing various shareholder and administrative services. SIDCO
may also retain as profit any difference between the fee it receives and amount
it pays to third parties. For the period, SIDCO paid the entire amount of fees
received under the shareholder service plan to First Hawaiian Bank, the parent
company of Bishop Street Capital Management, for shareholder services performed
for the Funds. SIDCO has voluntarily agreed to waive a portion of its
shareholder servicing fee to the extent necessary to keep operating expenses at
or below certain percentages of 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, 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.
The Adviser and SIDCO have voluntarily agreed to further waive and reduce
their fees and/or reimburse certain expenses of the Government Money Market Fund
in order to maintain a one-day net income yield (yield floor) of the Fund of not
less than 0.00% of the Fund's average daily net assets. The following table
shows waivers, with respect to such yield floor for the six months ended June
30, 2010:
Investment Shareholder
Advisory Fee Servicing Fee
Waived/Reimbursed (000) Waiver (000)
- ----------------------- ------------------
$210 $66
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."
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Bishop Street Funds (UNAUDITED)
6. SECURITIES LENDING
The Funds may lend securities having a market value up to one-third of each
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 is each 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 Funds 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 securities. The Funds could also experience
delays and costs in gaining access to the collateral. The Funds 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, 2010, six
counterparties held 100% of the total securities on loan of the Dividend Value
Fund and six counterparties held 100% 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
months ended June 30, 2010 are presented below for the Funds.
Strategic Dividend High Grade Hawaii
Growth Value Income Municipal
Fund Fund Fund Bond Fund
--------- -------- ---------- ---------
Purchases
U.S.
Government Securities $ -- $ -- $17,584 $ --
Other 14,594 38,797 8,601 30,306
Sales and Maturities
U.S.
Government Securities $ -- $ -- $ 6,956 $ --
Other 22,269 39,253 17,876 29,911
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(UNAUDITED)
8. FEDERAL TAX INFORMATION
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, 2009 and 2008 were as follows:
Ordinary Tax Exempt Long-Term
Income Income Capital Gain Total
-------- ---------- ------------ ------
Strategic Growth
Fund
2009 $ -- $ -- $ -- $ --
2008 -- -- 1,792 1,792
Dividend
Value Fund
2009 $ 437 $ -- $ -- $ 437
2008 663 -- 405 1,068
High Grade
Income Fund
2009 $5,220 $ -- $3,894 $9,114
2008 5,571 -- -- 5,571
Hawaii Municipal
Bond Fund
2009 $ -- $5,916 $ -- $5,916
2008 -- 6,367 -- 6,367
Government Money
Market Fund
2009 $ 88 $ -- $ -- $ 88
2008 4,965 -- -- 4,965
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Bishop Street Funds (UNAUDITED)
As of December 31, 2009, the components of Distributable Earnings
(Accumulated Losses) on a tax basis were as follows:
Strategic Dividend High Grade Hawaii
Growth Value Income Municipal
Fund Fund Fund Bond Fund
--------- -------- ---------- ---------
Undistributed net
investment income $ -- $ -- $ 620 $ --
Undistributed long term
capital gain income -- -- 557 --
Undistributed tax exempt income -- -- -- 2
Capital loss carryforwards (12,703) (20,193) -- (1,020)
Post-October losses (830) (584) -- (24)
Unrealized appreciation
(depreciation) 5,204 (1,350) 6,371 3,665
--------- -------- ------ -------
Total Distributable Earnings
(Accumulated Losses) $ (8,329) $(22,127) $7,548 $ 2,623
========= ======== ====== =======
Post-October losses represent losses realized on investment transactions
from November 1, 2009 through December 31, 2009 that, in accordance with Federal
income tax regulations, the Funds have elected to defer and treat as having
arisen in the following fiscal year.
For Federal income tax purposes, capital loss carryforwards represent
realized losses of the Funds that may be carried forward for a maximum period of
eight years and applied against future capital gains as follows:
Strategic Dividend Hawaii
Growth Value Municipal
Fund Fund Bond Fund
--------- -------- ----------
Dec. 2016 $ 839 $ 5,569 $ 410
Dec. 2017 11,864 14,624 610
------- ------- ------
Total $12,703 $20,193 $1,020
======= ======= ======
During the year ended December 31, 2009, the High Grade Income Fund and the
Government Money Market Fund utilized capital loss carryforwards of $983 and
$14, respectively, to offset realized capital gains.
Bishop Street Funds
54
(UNAUDITED)
The aggregate gross unrealized appreciation and depreciation of securities
held by the Strategic Growth, Dividend Value, High Grade Income, and Hawaii
Municipal Bond Funds for Federal income tax purposes at June 30, 2010 were as
follows:
Strategic Dividend High Grade Hawaii
Growth Value Income Municipal
Fund Fund Fund Bond Fund
--------- -------- ---------- ---------
Federal Tax Cost $48,805 $59,608 $133,937 $161,323
------- ------- -------- --------
Gross
Unrealized Appreciation 5,510 1,137 8,414 5,095
Gross
Unrealized Depreciation (4,905) (4,643) (130) (518)
------- ------- -------- --------
Net Unrealized Appreciation
(Depreciation) $ 605 $(3,506) $ 8,284 $ 4,577
======= ======= ======== ========
For Federal income tax purposes, the Government Money Market Fund's
aggregate tax cost is equal to its 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 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
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55
Bishop Street Funds (UNAUDITED)
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.
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 9, 2011. 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, 2010 the
Funds had no borrowings outstanding. For the six months ended June 30, 2010, the
Funds had borrowings costs of $534 for the Strategic Growth Fund, $0 for the
Dividend Value Fund, $0 for the High Grade Income Fund, and $7 for the Hawaii
Municipal Bond Fund, over a period of 32 days at a weighted average interest
rate of 2.25%.
11. OTHER
At June 30, 2010, 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 2 95.83%
Dividend Value Fund, Class I Shares 2 99.47
High Grade Income Fund, Class I Shares 3 96.76
Hawaii Municipal Bond Fund, Class I Shares 2 90.16
Hawaii Municipal Bond Fund, Class A Shares 3 26.70
Government Money Market Fund, Class I Shares 3 97.64
Government Money Market Fund, Class A Shares 1 99.75
Bishop Street Funds
56
(UNAUDITED)
12. ACCOUNTING PRONOUNCEMENT
In January 2010, the Financial Accounting Standards Board issued Accounting
Standards Update (ASU) No. 2010-6, FAIR VALUE MEASUREMENTS AND DISCLOSURES
(TOPIC 820): IMPROVING DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS. ASU No. 2010-6
enhances and clarifies existing fair value measurement disclosure requirements
and is effective for interim and annual periods beginning after December 15,
2009. The Fund is currently evaluating the impact, if any, of applying the
provisions of ASU No. 2010-6.
13. SUBSEQUENT EVENT
The Company has evaluated the need for disclosures and/or adjustments
resulting from subsequent events through the date the financial statements were
available to be issued. This evaluation did not result in any subsequent events
that necessitated disclosures and/or adjustments.
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57
Bishop Street Funds (UNAUDITED)
DISCLOSURE OF FUND EXPENSES
All mutual funds have operating expenses. As a shareholder of a mutual fund you
incur two types of costs: (1) transaction costs, including applicable sales
charges (loads); and (2) ongoing costs, which include (among others) costs for
portfolio management, administrative services, distribution and service
(12b-1), shareholder service 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.
Bishop Street Funds
58
(UNAUDITED)
Beginning Ending Expenses
Account Account Annualized Paid
Value Value Expense During
1/1/10 6/30/10 Ratios Period*
--------- --------- ---------- --------
STRATEGIC GROWTH FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $ 923.90 1.14% $5.44
HYPOTHETICAL 5% RETURN 1,000.00 1,019.14 1.14 5.71
DIVIDEND VALUE FUND -- CLASS I
ACTUAL FUND RETURN $1,000.00 $ 938.50 1.05% $5.05
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 $1,042.90 0.76% $3.85
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 $1,026.50 0.55% $2.76
HYPOTHETICAL 5% RETURN 1,000.00 1,022.07 0.55 2.76
HAWAII MUNICIPAL BOND FUND -- CLASS A
ACTUAL FUND RETURN $1,000.00 $1,025.30 0.80% $4.02
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 $1,000.00 0.17% $0.84
HYPOTHETICAL 5% RETURN 1,000.00 1,023.95 0.17 0.85
GOVERNMENT MONEY MARKET FUND -- CLASS A
ACTUAL FUND RETURN $1,000.00 $1,000.00 0.16% $0.79
HYPOTHETICAL 5% RETURN 1,000.00 1,024.00 0.16 0.80
* 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).
June 30, 2010 www.bishopstreetfunds.com
59
Bishop Street Funds (UNAUDITED)
APPROVAL OF INVESTMENT 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 following agreements (collectively, the
"Agreements"):
- the Advisory Agreement between Bishop Street Capital Management (the
"Adviser") and the Trust, on behalf of the Dividend Value Fund, the
Government Money Market Fund, the Hawaii Municipal Bond Fund, the High
Grade Income Fund and the Strategic Growth Fund (collectively, the
"Funds");
- the Sub-Advisory Agreement between the Adviser and BNP Paribas Asset
Management, Inc. ("BNP Paribas"), on behalf of the Strategic Growth
Fund;
- and the Sub-Advisory Agreement between the Adviser and Fischer Francis
Tree & Watts, Inc. (FFT&W"), on behalf of the Government Money Market
Fund (BNP Paribas and FFT&W collectively referred to as, the
"Sub-Advisers").
After their initial two-year terms, the Agreements must be re-approved: (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 the Advisers and the Sub-Advisers. The Trustees use this
information, as well as other information that the Adviser, the Sub-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 16-17, 2010, the Board, including
the Independent Trustees advised by their independent legal counsel, reviewed
written materials from the Adviser and the Sub-Advisers regarding, among other
things: (i) the nature, extent and quality of the services to be provided by the
Adviser and the Sub-Advisers; (ii) the investment performance of the Funds, the
Adviser and the Sub-Advisers; (iii) the costs of the services to be provided and
profits to be realized by the Adviser, the Sub-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 Adviser and the Sub-Advisers, along
with other Fund service providers, presented additional oral and written
information to help
Bishop Street Funds
60
(UNAUDITED)
the Board evaluate the Adviser and the Sub-Advisers' fees and other aspects of
the Agreements. Among other things, representatives from the Adviser and each of
the Sub-Advisers presented overviews of their advisory businesses, including the
Adviser and each Sub-Adviser's investment personnel, assets under management,
investment process and trading practices. The Trustees then discussed the
written materials that the Board received before the meeting and the Adviser and
the Sub-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 Adviser and each of the Sub-Advisers and the re-approval of the Agreements,
and did not identify any single piece of information discussed below that was
all-important, controlling or determinative of its decision.
NATURE, EXTENT, AND QUALITY OF SERVICES PROVIDED BY THE ADVISER AND THE
SUB-ADVISERS
In considering the nature, extent and quality of the services provided by the
Adviser and the Sub-Advisers, the Board reviewed the portfolio management
services provided by the Adviser and each of the Sub-Advisers to the Fund(s)
they managed, including the quality and continuity of the Adviser and the
Sub-Advisers' portfolio management personnel. The most recent investment adviser
registration form ("Form ADV") for the Adviser and each of the Sub-Advisers was
provided to the Board, as was the response of the Adviser and each Sub-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 the Adviser and
the Sub-Advisers to the Fund(s) they manage, 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 Adviser and the Sub-Advisers.
INVESTMENT PERFORMANCE OF THE FUNDS, THE ADVISER AND THE SUB-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. The Adviser and the Sub-Advisers provided information regarding
and led a discussion of factors impacting the performance of their respective
Fund(s) over the past year, outlin-
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61
Bishop Street Funds (UNAUDITED)
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
ing market conditions and explaining its expectations and strategies for the
future. The Board noted that the High Grade Income Fund outperformed its
benchmark over various periods. With respect to the Hawaii Municipal Bond Fund,
the Board noted that although the Fund had underperformed its benchmark over
recent periods of time, its performance was not substantially below that of its
respective benchmark and did not necessitate any significant additional review.
The Board also noted that although the Strategic Growth Fund had underperformed
its benchmark over recent periods of time, its long-term performance was in line
with its benchmark and did not necessitate any significant additional review.
With respect to the Government Money Market Fund, the Board noted that the Fund
was comparable to its benchmark. The Adviser noted that the Dividend Value Fund,
formerly the Large Cap Core Equity Fund, had recently changed its sub-adviser,
objective, strategy and benchmark and that the information provided for the
prior periods reflected the performance of the prior sub-adviser, objective,
strategy and benchmark. The Board noted that the Fund's performance was
comparable to that of its benchmark index for the prior periods. 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 the Adviser and each Sub-Adviser had been able to achieve for their
respective Fund(s).
COSTS OF ADVISORY SERVICES, PROFITABILITY AND ECONOMIES OF SCALE
In concluding that the advisory fees payable to the Adviser and each of the
Sub-Advisers were reasonable, the Trustees reviewed a report of the fees paid to
the Adviser and each Sub-Adviser as well as the costs of services provided by
and the profits realized by the Adviser and each of the Sub-Advisers from their
relationship with the Funds, 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 noted that
each Fund's total fees and expenses were within the range of or below the
average fees and expenses incurred by other peer funds. The Board concluded that
the advisory fees were the result of arm's length negotiations and appeared
reasonable in light of the services rendered. The Board also considered the
Adviser and the Sub-Advisers' commitment to managing the Funds, as well as the
Adviser's willingness to convert expense limitations and fee waiver arrangements
from voluntary to contractual. 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 the
Bishop Street Funds
62
(UNAUDITED)
Adviser and each of the Sub-Adviser's fees are reasonable in light of the
services that the Adviser and each of the Sub-Advisers provide to the respective
Fund(s); and (c) agreed to renew each Agreement for another year.
DIVIDEND VALUE FUND
During the reporting period, BSCM, on behalf of the Bishop Street Dividend Value
Fund (the "Fund"), entered into:
- a new sub-advisory agreement (the "CMA Sub-Advisory Agreement") with
Columbia Management Advisors, LLC ("CMA"), which became effective
January 25, 2010, after the approval of Fund shareholders, and which
replaced the subadvisory agreement with the Fund's then-current
sub-adviser (the "Former Sub-Adviser"); and
- an interim sub-advisory agreement (the "Interim Agreement") and a new
sub-advisory agreement (the "Columbia Sub-Advisory Agreement") with
Columbia Management Investment Advisers LLC (formerly RiverSource
Investments LLC) ("Columbia"), which became effective May 24, 2010,
after the approval of share-holders, as a result of a change in
control of CMA and the automatic termination of the CMA Sub-Advisory
Agreement.
Pursuant to Section 15(c) of the 1940 Act, the Board considered the approval of
the CMA Sub-Advisory Agreement, the Interim Agreement and the Columbia
Sub-Advisory Agreement on behalf of the Fund as discussed in greater detail
below.
At an in-person meeting held on November 11-12, 2009, the Board was asked to
appoint CMA as a new sub-adviser to the Fund to replace the Former Sub-Adviser
and to approve the CMA Sub-Advisory Agreement. The Board was informed that the
CMA Sub-Advisory Agreement would also need to be approved by Fund shareholders.
In connection with the proposal to appoint CMA as the Fund's new sub-adviser,
the Board was also asked to approve a new name, investment objective, strategy
and benchmark for the Fund. The Board was informed that the terms of the CMA
Sub-Advisory Agreement were substantially similar to the terms of the
sub-advisory agreement then in place with the Former Sub-Adviser, with few
exceptions, including an increase in sub-advisory fee. The Board noted, however,
that the proposed increase in the sub-advisory fee under the CMA Sub-Advisory
Agreement would not change the level of the overall advisory fee charged to the
Fund by BSCM. The Board was informed that the nature, scope and quality of
services to be provided under the CMA Sub-Advisory Agreement would be at least
equivalent to the nature, scope and quality of services provided by the Former
Sub-Adviser under the terms of its sub-advisory agreement. The Board also was
June 30, 2010 www.bishopstreetfunds.com
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Bishop Street Funds (UNAUDITED)
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
informed that Bank of America, N.A. ("Bank of America") had entered into an
agreement to sell its long-term asset management business to Ameriprise
Financial, Inc. ("Ameriprise"), which would include the sale of CMA (the
"Transaction"). The Board noted that the Transaction, which was expected to
close during the first part of 2010, would result in the automatic termination
of the CMA Sub-Advisory Agreement and that, in order for the successor adviser,
Columbia, to serve as sub-adviser to the Fund after the closing of the
Transaction, the Board and Fund shareholders would be required to approve the
Columbia Sub-Advisory Agreement.
At its November 10-11, 2009, the Board, including the Independent Trustees,
discussed and approved the CMA Sub-Advisory Agreement. The Board, including the
Independent Trustees advised by their independent legal counsel, received and
reviewed materials relating to CMA and the CMA Sub-Advisory Agreement in advance
of the meeting, and had the opportunity to ask questions and request further
information of BSCM and CMA. The materials included, among other things,
information regarding: (i) the nature, extent and quality of the services to be
provided by CMA; (ii) the investment performance and resources of CMA; (iii) the
costs of the services to be provided; and (iv) comparisons of the services to
be rendered and the amounts to be paid under the CMA Sub-Advisory Agreement with
the services and amounts paid under advisory agreements of the same and other
investment advisers, as discussed in further detail below. The Board deferred
consideration of the Columbia Sub-Advisory Agreement to a future meeting pending
receipt of additional information necessary to evaluate the terms of that
Agreement.
At an in-person meeting held on February 16-17, 2010, the Board considered and
approved the Columbia Sub-Advisory Agreement, which would become effective after
approval of the Columbia Sub-Advisory Agreement by shareholders of the Fund. The
Board also considered and approved the Interim Agreement in order to maintain
continuous sub-advisory services for the Fund after the closing of the
Transaction pending shareholder approval of the Columbia Sub-Advisory Agreement.
The Interim Agreement became effective on April 30, 2010, the closing date of
the Transaction. The Board was informed that the terms of the CMA Sub-Advisory
Agreement, the Interim Agreement and the Columbia Sub-Advisory Agreement were
the same, except for the parties and the effective date. The Board was also
informed that there would be no change to the portfolio managers responsible for
the day-to-day management of the Fund, nor would there be any change to the
sub-advisory fee. In approving the Interim Agreement and the Columbia
Sub-Advisory Agreement, the Board, including the Independent Trustees advised by
their independent legal counsel, received and reviewed materials relating to
Columbia and the Interim Agreement and the Columbia Sub-Advisory Agreement in
advance of the meeting, and had the opportunity to ask
Bishop Street Funds
64
(UNAUDITED)
questions and request further information of BSCM and Columbia. The materials
included, among other things, information regarding: (i) the nature, extent and
quality of the services to be provided by Columbia; (ii) the investment
performance and resources of Columbia; (iii) the costs of the services to be
provided; and (iv) comparisons of the services to be rendered and the amounts
to be paid under the Interim Agreement and the Columbia Sub-Advisory Agreement
with the services and amounts paid under advisory agreements of the same and
other investment advisers, as discussed in further detail below.
At the November 10-11, 2009 and the February 16-17, 2010 meetings,
representatives from BSCM, CMA and Columbia, along with other service providers
of the Fund, pre-sented additional oral and written information to help the
Board evaluate proposed fees and other aspects of the CMA and Columbia
Sub-Advisory Agreements as well as the Interim Agreement. Among other things,
the representatives provided an overview of CMA and Columbia by reviewing key
personnel and CMA and Columbia's investment strategies and processes. The Board
then discussed the written materials that the Board received before the
meetings, CMA and Columbia's oral presentation and any other information that
the Board received at the meeting, and deliberated on the approval of the CMA
and Columbia Sub-Advisory Agreements and the Interim Agreement in light of this
information. The Board noted that there would be no change in the management of
the Fund as a result of the Transaction and there were no proposed changes to
the nature or scope of sub-advisory services provided to the Fund. At its
February 16-17, 2010 meeting, the Board reviewed its findings from its November
10-11, 2009 meeting at which it considered and approved the CMA Sub-Advisory
Agreement. In its deliberations, the Board 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 SUB-ADVISORY AND OTHER SERVICES
In considering the nature, extent and quality of the services to be provided by
CMA and Columbia as sub-adviser to the Fund, the Board reviewed the portfolio
management services to be provided by CMA and Columbia to the Fund. Among other
things, the Board considered the quality of portfolio management personnel of
CMA and Columbia. At the February 16-17, 2010 meeting, the Board noted that
after the close of the Transaction, the Fund's portfolio managers under CMA
would become employees of Columbia and would serve as the Fund's portfolio
managers without interruption. At the November 10-11, 2009 and the February
16-17, 2010 meetings, the Board had the opportunity to speak with, and receive
information from, representatives from CMA and Columbia about the background and
experience of the portfolio managers who would be primarily responsible for the
day-to-day management of the Fund as well as
June 30, 2010 www.bishopstreetfunds.com
65
Bishop Street Funds (UNAUDITED)
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
CMA and Columbia's compliance policies and procedures, among other information.
The Board also considered other services to be provided to the Fund by CMA and
Columbia, such as selecting broker-dealers for executing portfolio transactions,
monitoring adherence to the Fund's 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 to be provided to the Fund by CMA and Columbia.
INVESTMENT PERFORMANCE OF THE SUB-ADVISERS
The Board considered and evaluated the investment performance of the investment
management personnel of CMA and Columbia who were expected to manage the Fund.
The Board concluded that the historical investment performance record of CMA and
its portfolio managers, as well as its experience and performance in managing a
large cap value strategy, supported a decision to approve the CMA Sub-Advisory
Agreement, the Interim Agreement and the Columbia Sub-Advisory Agreement.
COSTS OF SERVICES TO BE PROVIDED, PROFITABILITY AND ECONOMIES OF SCALE
The Board considered the Fund's overall fee level and noted that the overall
advisory fee charged to the Fund by the Adviser would remain the same under the
CMA Sub-Advisory Agreement, the Interim Agreement and the Columbia Sub-Advisory
Agreement, noting that any sub-advisory fees would be paid out of the advisory
fee the Fund pays the Adviser. Based on its review, the Board determined that
the sub-advisory fee was reasonable and appropriate in light of: 1) the services
to be provided by CMA and Columbia; 2) the advisory fees and the overall expense
ratios of the Fund as com-pared to peer funds, including funds advised by CMA
and Columbia and 3) the anticipated profitability to CMA and Columbia.
Based on the Board's deliberations and its evaluation of the information
described above, the Board, including the Independent Trustees, unanimously
concluded, at its November 10-11, 2009 meeting, that the terms of the CMA
Sub-Advisory Agreement were fair and reasonable and that the sub-advisory fees
were reasonable in light of the services to be provided to the Fund and agreed
to approve the CMA Sub-Advisory Agreement. At its February 16-17, 2010 meeting,
the Board, including the Independent Trustees, unanimously concluded that the
terms of the Interim Agreement and the Columbia Sub-Advisory Agreement were fair
and reasonable and that the sub-advisory fees were reasonable in light of the
services to be provided to the Fund and agreed to approve the Interim Agreement
and the Columbia Sub-Advisory Agreement.
Bishop Street Funds
66
Bishop Street Funds (UNAUDITED)
SHAREHOLDER VOTING RESULTS
At a special meeting held on May 24, 2010, the shareholders of the Dividend
Value Fund voted to approve a new investment sub-advisory agreement between
Bishop Street Capital Management and Columbia Management Investment Advisers,
LLC.
The results of the voting were as follows:
BISHOP STREET DIVIDEND VALUE FUND
% of
No. of Outstanding % of Shares
Shares Shares Present
--------- ----------- -----------
AFFIRMATIVE 6,198,608 97.00 100.00
AGAINST 0 0 0
ABSTAIN 0 0 0
--------- ----- -------
Total 6,198,608 97.00 100.000%
========= ===== =======
June 30, 2010 www.bishopstreetfunds.com
67
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INVESTMENT ADVISER
BISHOP STREET CAPITAL MANAGEMENT
HONOLULU, HI 96813
ADMINISTRATOR
SEI INVESTMENTS GLOBAL FUNDS SERVICES
OAKS, PA19456
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
OAKS, PA19456
TRANSFER AGENT
DST SYSTEMS,INC.
KANSAS CITY,MO 64121
CUSTODIAN
UNION BANK, N.A.
SAN FRANCISCO, CA 94101
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUSLLP
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-004-1600
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.
There have been no charge to the procedures by which shareholders may recommend
nominees to the registrant's Board of Trustees during the period covered by this
report.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Registrant's principal executive and principal financial officers, or
persons performing similar functions have concluded that the Registrant's
disclosure controls and procedures )as defined in Rule 30a-3(c) under the Act
(17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the
report, are effective based on the evaluation of these controls and procedures
required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules
13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 270.30a-15(b)) or
240.15d-15(b)).
(b) There has been no change in the Registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.3a-3(d)) that
occurred during the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over finanicl reporting.
ITEMS 12. EXHIBITS.
(a)(1) Not applicable for semi-annual report.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), is filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Bishop Street Funds
By (Signature and Title)* /s/ Philip T. Masterson
----------------------------------------
Philip T. Masterson
President
Date: September 2, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Philip T. Masterson
----------------------------------------
Philip T. Masterson
President
Date: September 2, 2010
By (Signature and Title)* /s/ Michael Lawson
----------------------------------------
Michael Lawson
Treasurer, Controller & CFO
Date: September 2, 2010
* Print the name and title of each signing officer under his or her
signature.