N-CSRS 1 bishopstcombsar6_04.txt BISHOP ST FUNDS COMB SAR 6_04 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM N-CSR -------- 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) (Zip code) DST Systems, Inc. Kansas City, MO 64141 (Name and address of agent for service) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 610-254-1000 DATE OF FISCAL YEAR END: DECEMBER 31 DATE OF REPORTING PERIOD: JUNE 30, 2004 Item 1. Reports to Stockholders. [BACKGROUND GRAPHIC OMITTED] BISHOP STREET FUNDS SEMI-ANNUAL REPORT JUNE 30, 2004 EQUITY FUND STRATEGIC GROWTH FUND TAX MANAGED EQUITY FUND HIGH GRADE INCOME FUND HAWAII MUNICIPAL BOND FUND MONEY MARKET FUND TREASURY MONEY MARKET FUND INVESTMENT ADVISER BISHOP STREET CAPITAL MANAGEMENT [Bishop Street Funds logo omitted] [GRAPHIC OMITTED] The Bishop Street Hawaii Municipal Bond Fund Taxes can take a bite out of your income. The Hawaii Municipal Bond Fund may help reduce that tax burden. If you are: o Seeking high current income substantially exempt from federal and Hawaii state income taxes. o Willing to accept the risk of investing in a portfolio of municipal securities. Then you should consider adding the Hawaii Municipal Bond Fund to your portfolio. o Invests primarily in Hawaii Municipal Bonds. o Active portfolio management. o High-quality investment portfolio. Visit us at www.bishopstreetfunds.com or call 1-800-262-9565 today to discover how the Bishop Street Funds Hawaii Municipal Bond Fund can help diversify your portfolio. THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS FOR THE BISHOP STREET FUNDS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING OR SENDING MONEY. INVESTMENT IN MUTUAL FUNDS INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL. CERTAIN SHAREHOLDERS MAY BE SUBJECT TO THE ALTERNATIVE MINIMUM TAX (AMT). FEDERAL INCOME TAX RULES WILL APPLY TO ANY CAPITAL GAINS DISTRIBUTIONS. IN ADDITION TO THE NORMAL RISKS ASSOCIATED WITH INVESTING, NARROWLY FOCUSED INVESTMENTS TYPICALLY EXHIBIT HIGHER VOLATILITY. 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 PARABAS. -------------------------------------------------------------------------------- Not FDIC Insured No Bank Guarantee May Lose Value -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- BISHOP STREET TABLE OF CONTENTS FUNDS -------------------------------------------------------------------------------- LETTER TO SHAREHOLDERS............................................... 2 STATEMENTS OF NET ASSETS Equity Fund.................................................... 4 Strategic Growth Fund.......................................... 9 Tax Managed Equity Fund........................................ 12 High Grade Income Fund......................................... 16 Hawaii Municipal Bond Fund..................................... 22 Money Market Fund.............................................. 32 Treasury Money Market Fund..................................... 37 Statements of Operations ............................................ 39 Statements of Changes in Net Assets.................................. 41 Financial Highlights ................................................ 46 Notes to Financial Statements........................................ 50 Board of Trustees and Officers....................................... 58 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. 1 -------------------------------------------------------------------------------- BISHOP STREET LETTER TO SHAREHOLDERS FUNDS -------------------------------------------------------------------------------- [Photo of Gregory E.Ratte omitted] During the second quarter, while the economic news was consistently good, investors were trying to balance the opposing market forces of: o a resurgent economy and record profit growth on the one hand, with o the specter of higher interest rates and inflation on the other. In the end, the discounting of these forces had dramatically different effects in the stock and bond markets, as they often do. While the bond market convulsed, enduring one of its worst quarters in years, the stock market just twitched, managing a small gain. At least for bond investors, the bad news came early. By BAD news, we, of course, mean GOOD news for most of us -- the unexpectedly strong March jobs report, which instantly ended talk of a "jobless recovery." All of the downside in bond prices was felt early in the quarter. The S&P 500 Index, on the other hand, ended the quarter with a total return of a positive 1.7% (coincidentally, exactly the same as the first quarter of the year), but only after gyrating violently down, then ending modestly up. Uninspiring, perhaps, but not so bad compared with the "riskless" 10-year Treasury, which returned -4.4%. The deeper theme within the equity market was that there was no theme. Typical investment factors that usually dominate performance -- such as company size, earnings growth, and riskiness -- did not have dramatic or consistent effects on performance during the quarter. For example, only two industry sectors, Industrials and Energy, which posted 8% and 7% gains, respectively, managed to show more than a low single-digit price change. If anything at all was apparent, it was that despite long running expectations to the contrary, investors were penalized again for focusing on quality growth Bishop Street Funds 2 -------------------------------------------------------------------------------- [Bishop Street Funds Logo Omitted] -------------------------------------------------------------------------------- companies. In all, the market traded within a narrow range around 1100 on the S&P 500 with no clear direction. Looking ahead, our crystal ball is even murkier than usual, but the great consolation for equity investors is that the underlying profit growth environment has never been better! In the first quarter, earnings per share for the S&P 500 expanded at an astounding 27% and it looks like the second quarter could be as good or even better! With these numbers, full-year estimates are also rising, as are those for 2005. The result is that, with stocks marking time, they are actually getting cheaper, providing a compelling rationale for our positive view on the medium-term outlook for the market. Higher interest rates will certainly continue to be a modest headwind for the market, but not strong enough, in our opinion, to stem the full tide of profit expansion. Growth is slowly rising, but profits are enough to provide support to the stock market. In fact, based on expectations for next year, the market is the cheapest it's been in 10 years. Thank you for your continued support and confidence. Sincerely, /s/ Gregory E. Ratte Gregory E. Ratte President and Chief Investment Officer Bishop Street Capital Management June 30, 2004 3 www.bishopstreetfunds.com Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- TOP TEN EQUITY HOLDINGS* --------------------------------------------------------------------------- Percentage of Investments* 1. Pfizer 4.6% ---------------------------------------------------------------------- 2. General Electric 3.5% ---------------------------------------------------------------------- 3. Exxon Mobil 3.4% ---------------------------------------------------------------------- 4. Microsoft 3.2% ---------------------------------------------------------------------- 5. Amgen 2.9% ---------------------------------------------------------------------- 6. Citigroup 2.8% ---------------------------------------------------------------------- 7. Wal-Mart Stores 2.8% ---------------------------------------------------------------------- 8. Johnson & Johnson 2.7% ---------------------------------------------------------------------- 9. American International Group 2.7% ---------------------------------------------------------------------- 10. Morgan Stanley 2.4% --------------------------------------------------------------------------- *EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING. STATEMENT OF NET ASSETS Market Value Shares (000) ------- ------ COMMON STOCK -- 98.6% CONSUMER DISCRETION -- 10.3% 51,864 Brinker International* (A) $ 1,770 36,360 Carnival (A) 1,709 51,800 Clear Channel Communications 1,914 39,612 Home Depot 1,394 92,013 InterActiveCorp* (A) 2,773 25,940 Michaels Stores 1,427 31,073 Omnicom Group 2,358 64,630 Viacom, Cl B 2,309 -------- 15,654 -------- CONSUMER STAPLES -- 10.1% 25,400 Anheuser-Busch 1,372 42,173 CVS 1,772 55,080 PepsiCo 2,968 54,040 Procter & Gamble 2,942 66,400 Sysco 2,382 72,110 Wal-Mart Stores 3,804 -------- 15,240 -------- Bishop Street Funds 4 Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Value Shares (000) --------- ------ ENERGY -- 8.0% 25,860 Devon Energy $ 1,707 104,710 Exxon Mobil 4,650 94,330 GlobalSantaFe 2,499 51,738 Schlumberger Ltd. 3,286 -------- 12,142 -------- FINANCIALS -- 18.0% 22,520 AMBAC Financial Group (A) 1,654 31,673 American Express 1,627 51,315 American International Group 3,658 83,073 Citigroup 3,863 28,570 Goldman Sachs Group 2,690 79,710 JP Morgan Chase 3,090 54,560 Mellon Financial 1,600 63,170 Morgan Stanley 3,334 38,354 St. Paul Travelers 1,555 33,410 Washington Mutual 1,291 49,610 Wells Fargo 2,839 -------- 27,201 -------- HEALTH CARE -- 15.8% 26,666 Accredo Health* (A) 1,039 72,930 Amgen* 3,980 52,295 Boston Scientific* (A) 2,238 19,720 Eli Lilly 1,379 12,171 Forest Laboratories* 689 15,581 Genzyme* 737 34,405 Gilead Sciences* (A) 2,305 17,892 HCA (A) 744 65,999 Johnson & Johnson 3,676 184,560 Pfizer 6,327 13,447 UnitedHealth Group 837 -------- 23,951 -------- INDUSTRIALS -- 11.0% 24,772 3M 2,230 17,060 General Dynamics 1,694 148,405 General Electric 4,809 33,560 Illinois Tool Works 3,218 66,942 Pentair 2,252 21,820 SPX 1,013 24,210 Union Pacific 1,439 -------- 16,655 -------- June 30, 2004 5 www.bishopstreetfunds.com Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Shares/Face Value Amount (000) (000) ------------ ------ INFORMATION TECHNOLOGY -- 18.1% 80,505 Agilent Technologies* $ 2,357 142,158 Applied Materials* 2,789 89,070 Cisco Systems* 2,111 63,829 Dell* 2,286 112,720 Flextronics International* 1,798 36,670 Hewlett-Packard 774 69,790 Intel 1,926 38,682 Linear Technology 1,527 154,204 Microsoft 4,404 176,289 Nokia ADR 2,563 67,969 Paychex 2,303 18,690 SAP ADR 782 38,964 Symantec* 1,706 -------- 27,326 -------- MATERIALS -- 4.7% 88,836 Alcoa (A) 2,934 27,123 EI Du Pont de Nemours 1,205 74,210 Praxair 2,962 -------- 7,101 -------- TELECOMMUNICATIONS -- 2.6% 41,150 Verizon Communications 1,489 109,280 Vodafone Group ADR (A) 2,415 -------- 3,904 -------- TOTAL COMMON STOCK (Cost $136,123) 149,174 -------- CORPORATE OBLIGATIONS (B) -- 2.6% FINANCIALS -- 2.6% Bear Stearns $1,016 1.650%, 07/07/04 1,016 First Tennessee Bank MTN (C) 2,032 1.080%, 06/07/05 2,031 Lehman Brothers MTN (C) 1,016 1.590%, 05/16/05 1,016 -------- TOTAL CORPORATE OBLIGATIONS (Cost $4,063) 4,063 -------- Bishop Street Funds 6 Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Face Amount Value (000)/Shares (000) ------------ ------ COMMERCIAL PAPER (B) -- 2.0% Countrywide Home Loans $1,015 1.330%, 07/06/04 $ 1,015 Morgan Stanley (C) 2,032 1.580%, 02/18/05 2,032 -------- TOTAL COMMERCIAL PAPER (Cost $3,047) 3,047 -------- CASH EQUIVALENTS -- 0.6% 410,400 Dreyfus Cash Management Fund 410 410,433 Fidelity Institutional Money Market Fund 410 -------- TOTAL CASH EQUIVALENTS (Cost $820) 820 -------- REPURCHASE AGREEMENTS (B) -- 2.6% Bank of America 1.550%, dated 06/30/04, to be repurchased on 07/01/04, repurchase price $2,217,593, (collateralized by a mortgage obligation, $2,217 total market value $2,261,848) 2,217 Lehman Brothers 1.580%, dated 06/30/04, to be repurchased on 07/01/04, repurchase price $1,650,272, (collateralized by a mortgage obligation, 1,650 total market value $1,683,204) 1,650 -------- TOTAL REPURCHASE AGREEMENTS (Cost $3,867) 3,867 -------- TOTAL INVESTMENTS (COST $147,920)-- 106.4% 160,971 -------- OTHER ASSETS AND LIABILITIES -- (6.4)% Payable Upon Return of Securities Loaned (10,977) Investment Adviser Fees Payable (81) Administrative Fees Payable (14) Shareholder Servicing Fees Payable (12) Trustees' Fees Payable (2) Other Assets and Liabilities, Net 1,341 -------- TOTAL OTHER ASSETS AND LIABILITIES (9,745) -------- June 30, 2004 7 www.bishopstreetfunds.com Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Value (000) ----- NET ASSETS: Fund Shares of Institutional Shares (unlimited authorization -- no par value) Based on 15,749,058 Outstanding Shares of Beneficial Interest $194,055 Fund Shares of Class A (unlimited authorization -- no par value) Based on 178,410 Outstanding Shares of Beneficial Interest 6,726 Undistributed Net Investment Income 13 Accumulated Net Realized Loss on Investments (62,619) Net Unrealized Appreciation on Investments 13,051 -------- TOTAL NET ASSETS -- 100.0% $151,226 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL CLASS ($149,541,344 / 15,749,058 SHARES) $ 9.50 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- CLASS A ($1,684,613 / 178,410 SHARES) $ 9.44 ======== MAXIMUM OFFERING PRICE PER SHARE -- CLASS A SHARES ($9.44 / 94.25%) $ 10.02 ======== * NON-INCOME PRODUCING SECURITY (A) THE SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2004 (SEE NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2004 WAS $10,668,764. (B) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING (SEE NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2004 WAS $10,977,481. (C) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 2004. THE MATURITY DATE SHOWN IS THE NEXT SCHEDULED RESET DATE. ADR -- AMERICAN DEPOSITORY RECEIPT CL -- CLASS LTD. -- LIMITED MTN -- MEDIUM TERM NOTE THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 8 Strategic Growth Fund (UNAUDITED) -------------------------------------------------------------------------------- TOP TEN EQUITY HOLDINGS --------------------------------------------------------------------------- Percentage of Investments --------------------------------------------------------------------- 1. L-3 Communications Holdings 2.7% --------------------------------------------------------------------- 2. Broadcom, Cl A 2.7% --------------------------------------------------------------------- 3. Harley Davidson 2.7% --------------------------------------------------------------------- 4. International Game Technology 2.6% --------------------------------------------------------------------- 5. IVAX 2.6% --------------------------------------------------------------------- 6. Cendant 2.5% --------------------------------------------------------------------- 7. JetBlue Airways 2.5% --------------------------------------------------------------------- 8. United Technologies 2.5% --------------------------------------------------------------------- 9. Affiliated Computer Services, Cl A 2.5% --------------------------------------------------------------------- 10. Tyco International Ltd. 2.5% --------------------------------------------------------------------------- STATEMENT OF NET ASSETS Market Value Shares (000) ------- ------ COMMON STOCK -- 98.0% CONSUMER DISCRETION -- 19.5% 13,200 Autozone* $ 1,057 28,800 Bed Bath & Beyond* 1,107 20,400 Best Buy 1,035 23,300 Coach* 1,053 19,700 Harley-Davidson 1,220 30,500 International Game Technology 1,177 18,900 Lowe's 993 32,200 PETsMART 1,045 35,500 Staples 1,041 28,200 Yum! Brands* 1,050 ------- 10,778 ------- CONSUMER STAPLES -- 1.9% 36,300 Coca-Cola 1,052 ------- FINANCIALS -- 22.7% 12,100 Bank of America 1,024 14,900 Capital One Financial 1,019 June 30, 2004 9 www.bishopstreetfunds.com Strategic Growth Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Value Shares (000) ------ ------ FINANCIALS (CONTINUED) 22,500 Citigroup $ 1,046 13,000 Everest Re Group Ltd. 1,045 15,400 Fannie Mae 1,099 11,300 Goldman Sachs Group 1,064 25,800 JP Morgan Chase 1,000 10,800 Legg Mason 983 19,800 MBIA 1,131 19,600 Merrill Lynch 1,058 19,400 RenaissanceRe Holdings 1,047 20,700 State Street 1,015 ------- 12,531 ------- HEALTH CARE -- 13.5% 18,600 Amgen* 1,015 33,200 Caremark Rx* 1,093 12,500 Express Scripts* 990 48,800 IVAX* 1,171 24,100 Omnicare 1,032 17,900 UnitedHealth Group 1,114 9,300 WellPoint Health Networks* 1,042 ------- 7,457 ------- INDUSTRIALS -- 14.3% 11,300 Apollo Group, Cl A* 998 47,600 Cendant 1,165 22,400 H&R Block 1,068 39,600 JetBlue Airways* 1,163 18,500 L-3 Communications Holdings 1,236 34,300 Tyco International Ltd. 1,137 12,600 United Technologies 1,153 ------- 7,920 ------- INFORMATION TECHNOLOGY -- 22.2% 21,600 Affiliated Computer Services, Cl A* 1,144 25,700 Autodesk 1,100 26,200 Broadcom, Cl A* 1,225 29,900 Cognos* 1,081 31,100 Dell* 1,114 20,200 Electronic Arts* 1,102 40,800 Jabil Circuit* 1,027 11,600 Lexmark International* 1,120 34,700 Microchip Technology 1,095 51,300 National Semiconductor* 1,128 51,100 Sandisk* 1,108 ------- 12,244 ------- Bishop Street Funds 10 Strategic Growth Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Value Shares (000) ------ ------ TELECOMMUNICATIONS -- 3.9% 67,500 Avaya* $ 1,066 41,100 Nextel Communications, Cl A* 1,095 ------- 2,161 ------- TOTAL COMMON STOCK (Cost $45,332) 54,143 ------- CASH EQUIVALENTS -- 1.0% 298,623 Dreyfus Cash Management Fund 299 298,623 Fidelity Institutional Money Market Fund 299 ------- TOTAL CASH EQUIVALENTS (Cost $598) 598 ------- TOTAL INVESTMENTS (COST $45,930) -- 99.0% 54,741 ------- OTHER ASSETS AND LIABILITIES -- 1.0% Investment Adviser Fees Payable (32) Shareholder Servicing Fees Payable (5) Administrative Fees Payable (5) Other Assets and Liabilities, Net 576 ------- TOTAL OTHER ASSETS AND LIABILITIES 534 ------- NET ASSETS: Fund Shares of Institutional Shares (unlimited authorization -- no par value) Based on 4,481,231 Outstanding Shares of Beneficial Interest 46,721 Accumulated Net Investment Loss (108) Accumulated Net Realized Loss on Investments (149) Net Unrealized Appreciation on Investments 8,811 ------- TOTAL NET ASSETS -- 100.0% $55,275 ======= NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL CLASS $ 12.33 ======= * NON-INCOME PRODUCING SECURITY CL -- CLASS LTD. -- LIMITED THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2004 11 www.bishopstreetfunds.com Tax Managed Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- TOP TEN EQUITY HOLDINGS --------------------------------------------------------------------------- Percentage of Investments --------------------------------------------------------------------- 1. Exxon Mobil 4.2% --------------------------------------------------------------------- 2. General Electric 4.1% --------------------------------------------------------------------- 3. Pfizer 3.2% --------------------------------------------------------------------- 4. Citigroup 3.2% --------------------------------------------------------------------- 5. Cisco Systems 3.1% --------------------------------------------------------------------- 6. Symantec 3.1% --------------------------------------------------------------------- 7. Microsoft 3.1% --------------------------------------------------------------------- 8. Amgen 3.1% --------------------------------------------------------------------- 9. Pentair 3.0% --------------------------------------------------------------------- 10. American International Group 2.8% --------------------------------------------------------------------------- STATEMENT OF NET ASSETS Market Value Shares (000) ------ ------ COMMON STOCK -- 98.7% CONSUMER DISCRETION -- 10.1% 6,727 Brinker International* $ 230 4,300 Carnival 202 6,045 Clear Channel Communications 223 7,855 Harley-Davidson 487 11,930 Home Depot 420 14,300 InterActiveCorp* 431 4,960 Omnicom Group 376 8,600 Target 365 6,730 Tiffany 248 14,750 Time Warner* 259 4,920 Univision Communications, Cl A* 157 ------- 3,398 ------- CONSUMER STAPLES -- 10.9% 7,470 Anheuser-Busch 404 11,380 Avon Products 525 9,940 Coca-Cola 502 Bishop Street Funds 12 Tax Managed Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Value Shares (000) --------- ------ CONSUMER STAPLES (CONTINUED) 11,170 CVS $ 469 6,880 PepsiCo 371 11,940 Procter & Gamble 650 14,240 Wal-Mart Stores 751 ------- 3,672 ------- ENERGY -- 7.4% 6,560 Anadarko Petroleum 385 2,160 ChevronTexaco 203 6,000 Devon Energy 396 26,100 Exxon Mobil 1,159 11,640 Halliburton 352 ------- 2,495 ------- FINANCIALS -- 18.1% 10,500 Allstate 489 7,580 American Express 390 10,700 American International Group 763 19,010 Citigroup 884 3,000 Goldman Sachs Group 283 13,500 JP Morgan Chase 523 5,820 MBIA 332 5,760 Merrill Lynch 311 5,210 Morgan Stanley 275 5,482 St. Paul Travelers 222 10,970 Wachovia 488 10,540 Washington Mutual 407 12,230 Wells Fargo 700 ------- 6,067 ------- HEALTH CARE -- 15.1% 7,000 Accredo Health* 272 15,400 Amgen* 840 7,521 Biogen Idec* 476 10,000 Forest Laboratories* 566 3,670 Genzyme* 174 7,700 Gilead Sciences* 516 13,360 Johnson & Johnson 744 5,680 Medtronic 277 25,808 Pfizer 885 5,380 UnitedHealth Group 335 ------- 5,085 ------- June 30, 2004 13 www.bishopstreetfunds.com Tax Managed Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Value Shares (000) ------ ------ INDUSTRIALS -- 11.9% 7,960 3M $ 716 5,030 General Dynamics 499 34,960 General Electric 1,133 4,900 Illinois Tool Works 470 24,600 Pentair 828 4,840 United Parcel Service, Cl B 364 ------- 4,010 ------- INFORMATION TECHNOLOGY -- 18.8% 4,700 Analog Devices 221 23,500 Applied Materials* 461 36,100 Cisco Systems* 856 13,060 Dell* 468 26,740 Intel 738 5,400 International Business Machines 476 8,770 Linear Technology 346 7,270 Mercury Interactive* 362 29,700 Microsoft 848 22,700 Nokia ADR 330 10,000 Paychex 339 19,400 Symantec* 849 ------- 6,294 ------- MATERIALS -- 3.3% 15,960 Alcoa 527 8,100 EI Du Pont de Nemours 360 5,220 Praxair 208 ------- 1,095 ------- TELECOMMUNICATIONS -- 3.1% 11,760 SBC Communications 285 9,830 Verizon Communications 356 18,000 Vodafone Group ADR 398 ------- 1,039 ------- TOTAL COMMON STOCK (Cost $26,976) 33,155 ------- CASH EQUIVALENTS -- 1.4% 223,945 Dreyfus Cash Management Fund 224 223,945 Fidelity Institutional Money Market Fund 224 ------- TOTAL CASH EQUIVALENTS (Cost $448) 448 ------- TOTAL INVESTMENTS (COST $27,424)-- 100.1% 33,603 ------- Bishop Street Funds 14 Tax Managed Equity Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Value (000) ----- OTHER ASSETS AND LIABILITIES -- (0.1)% Investment Adviser Fees Payable $ (18) Shareholder Servicing Fees Payable (3) Administrative Fees Payable (3) Other Assets and Liabilities, Net (14) ------- TOTAL OTHER ASSETS AND LIABILITIES (38) ------- NET ASSETS: Fund Shares of Institutional Shares (unlimited authorization -- no par value) Based on 2,719,133 Outstanding Shares of Beneficial Interest 26,657 Distribution in Excess of Net Investment Income (13) Accumulated Net Realized Gain on Investments 742 Net Unrealized Appreciation on Investments 6,179 ------- TOTAL NET ASSETS -- 100.0% $33,565 ======= NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL CLASS $ 12.34 ======= * NON-INCOME PRODUCING SECURITY ADR -- AMERICAN DEPOSITORY RECEIPT CL -- CLASS THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2004 15 www.bishopstreetfunds.com High Grade Income Fund (UNAUDITED) -------------------------------------------------------------------------------- TOP TEN HOLDINGS* -------------------------------------------------------------------------------- Percentage Coupon Maturity of Rate Date Investments* -------------------------------------------------------------------------------- 1. U.S. Treasury Bond 7.250% 05/15/16 8.1% -------------------------------------------------------------------------- 2. FNMA 3.750% 09/15/08 4.1% -------------------------------------------------------------------------- 3. U.S. Treasury Bond 6.250% 08/15/23 3.5% -------------------------------------------------------------------------- 4. FNMA 7.250% 01/15/10 3.4% -------------------------------------------------------------------------- 5. U.S. Treasury Bond 7.500% 11/15/16 3.0% -------------------------------------------------------------------------- 6. Pharmacia 5.750% 12/01/05 2.5% -------------------------------------------------------------------------- 7. Morgan Stanley 6.600% 04/01/12 2.2% -------------------------------------------------------------------------- 8. FNMA 2.540% 01/12/07 2.2% -------------------------------------------------------------------------- 9. U.S. Treasury Bond 6.375% 08/15/27 2.2% -------------------------------------------------------------------------- 10. FHLMC 5.125% 10/15/08 2.2% -------------------------------------------------------------------------------- *EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING. STATEMENT OF NET ASSETS Face Market Amount Value (000) (000) ------- ------ CORPORATE OBLIGATIONS -- 60.0% AEROSPACE & DEFENSE -- 5.3% Boeing $2,800 7.875%, 02/15/05 $ 2,895 General Dynamics 2,850 4.500%, 08/15/10 2,837 United Technologies 1,500 6.350%, 03/01/11 1,629 -------- 7,361 -------- BANKS -- 1.8% Bank of America (A) 2,600 4.875%, 01/15/13 2,527 -------- BIOTECHNOLOGY -- 2.5% Pharmacia 3,275 5.750%, 12/01/05 3,414 -------- Bishop Street Funds 16 High Grade Income Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) ------- ------ BROADCASTING & CABLE -- 2.4% Cox Communications $1,400 6.750%, 03/15/11 $ 1,510 TCI Communications 1,550 7.875%, 08/01/13 1,765 -------- 3,275 -------- COMPUTER HARDWARE -- 1.1% Dell 1,400 6.550%, 04/15/08 1,526 -------- DIVERSE FINANCIAL SERVICES -- 12.8% Citigroup 2,600 6.750%, 12/01/05 2,743 Ford Motor Credit 1,400 7.375%, 10/28/09 1,494 Ford Motor Credit MTN 1,400 7.750%, 02/15/07 1,509 General Electric Capital MTN, Ser A 2,600 5.450%, 01/15/13 2,636 General Motors Acceptance 1,400 7.000%, 02/01/12 1,439 1,400 6.750%, 01/15/06 1,467 525 4.500%, 07/15/06 531 Goldman Sachs Group 2,600 6.600%, 01/15/12 2,798 Morgan Stanley 2,800 6.600%, 04/01/12 3,014 -------- 17,631 -------- FINANCIALS (B) -- 11.6% Bear Stearns 3,984 1.650%, 07/07/04 3,984 First Tennessee Bank MTN (C) 7,968 1.080%, 06/07/05 7,967 Lehman Brothers MTN (C) 3,984 1.590%, 05/16/05 3,984 -------- 15,935 -------- FORESTRY -- 1.1% Weyerhaeuser 1,420 6.750%, 03/15/12 1,538 -------- June 30, 2004 17 www.bishopstreetfunds.com High Grade Income Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) ------- ------ GENERAL MERCHANDISE -- 3.1% Target $1,300 6.350%, 01/15/11 $ 1,417 Wal-Mart Stores 2,625 8.000%, 09/15/06 2,888 -------- 4,305 -------- HEALTH CARE -- 1.1% UnitedHealth Group 1,400 5.200%, 01/17/07 1,456 -------- HOUSEHOLD PRODUCTS -- 0.5% Newell Rubbermaid 650 6.600%, 11/15/06 696 -------- MACHINERY - INDUSTRIAL -- 1.1% Masco 1,400 5.875%, 07/15/12 1,454 -------- OIL & GAS - EQUIPMENT/SERVICES -- 1.0% Baker Hughes 1,300 6.000%, 02/15/09 1,390 -------- OIL & GAS - EXPLORATION/PRODUCTION -- 3.3% Anadarko Petroleum 1,250 7.200%, 03/15/29 1,375 1,450 6.750%, 05/15/08 1,584 Ocean Energy 1,450 7.250%, 10/01/11 1,600 -------- 4,559 -------- PHARMACEUTICALS -- 2.1% Abbott Laboratories 2,700 6.400%, 12/01/06 2,899 -------- RETAIL - DRUGS -- 1.1% CVS 1,400 5.625%, 03/15/06 1,459 -------- RETAIL - FOOD -- 1.9% Kraft Foods 1,400 6.250%, 06/01/12 1,474 McDonald's MTN, Ser E 1,000 5.950%, 01/15/08 1,072 -------- 2,546 -------- Bishop Street Funds 18 High Grade Income Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) ---------- ------ SEMI-CONDUCTORS -- 2.1% Constellation Energy Group $1,400 7.000%, 04/01/12 $ 1,525 Duke Energy 1,425 4.200%, 10/01/08 1,400 -------- 2,925 -------- TELECOMMUNICATIONS -- 3.1% AT&T Wireless Services 1,550 7.350%, 03/01/06 1,654 Verizon Virginia, Ser A 1,400 4.625%, 03/15/13 1,307 Vodafone Group 1,300 3.950%, 01/30/08 1,299 -------- 4,260 -------- UTILITIES -- 1.0% Dominion Resources 1,400 4.125%, 02/15/08 1,398 -------- TOTAL CORPORATE OBLIGATIONS (Cost $82,649) 82,554 -------- U.S. TREASURY OBLIGATIONS -- 25.9% U.S. Treasury Bonds 3,250 7.500%, 11/15/16 (A) 4,006 9,000 7.250%, 05/15/16 (A) 10,880 2,600 6.375%, 08/15/27 2,935 4,200 6.250%, 08/15/23 (A) 4,651 1,350 6.000%, 02/15/26 (A) 1,455 1,950 5.375%, 02/15/31 (A) 1,967 U.S. Treasury Notes (A) 1,000 7.500%, 02/15/05 1,035 2,000 4.375%, 05/15/07 2,067 1,300 4.375%, 08/15/12 1,294 1,900 4.000%, 02/15/14 1,811 1,500 2.375%, 08/15/06 1,487 2,000 1.500%, 07/31/05 1,987 -------- TOTAL U.S. TREASURY OBLIGATIONS (Cost $33,773) 35,575 -------- June 30, 2004 19 www.bishopstreetfunds.com High Grade Income Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Face Amount Value (000)/Shares (000) ----------- ------ U.S. GOVERNMENT AGENCY OBLIGATIONS -- 23.0% FHLB $1,000 6.250%, 08/13/04 $ 1,006 2,800 3.375%, 02/15/08 2,759 FHLMC 1,100 5.375%, 08/16/06 1,105 2,800 5.125%, 10/15/08 2,922 2,800 3.200%, 02/28/07 2,773 FHLMC MTN 500 2.325%, 08/26/05 500 FHLMC MTN, Ser 1 625 6.250%, 08/15/16 628 FNMA 4,000 7.250%, 01/15/10 (A) 4,554 1,400 5.500%, 07/18/12 1,411 2,800 3.875%, 11/17/08 2,760 5,600 3.750%, 09/15/08 (A) 5,515 2,800 2.877%, 07/17/04 (C) 2,784 3,000 2.540%, 01/12/07 2,944 -------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $31,701) 31,661 -------- COMMERCIAL PAPER (B) -- 8.7% Countrywide Home Loans 3,984 1.330%, 07/06/04 3,983 Morgan Stanley (C) 7,968 1.580%, 02/18/05 7,968 -------- TOTAL COMMERCIAL PAPER (Cost $11,951) 11,951 -------- CASH EQUIVALENTS -- 1.4% 1,009,695 Dreyfus Cash Management Fund 1,010 1,009,695 Fidelity Institutional Money Market Fund 1,010 -------- TOTAL CASH EQUIVALENTS (Cost $2,020) 2,020 -------- REPURCHASE AGREEMENTS (B) -- 11.0% Bank of America 1.550%, dated 06/30/04, to be repurchased on 07/01/04, repurchase price $8,698,127, (collateralized by a mortgage obligation, $8,698 total market value $8,871,708) 8,698 Lehman Brothers 1.580%, dated 06/30/04, to be repurchased on 07/01/04, repurchase price $6,472,909, (collateralized by a mortgage obligation, 6,473 total market value $6,602,078) 6,473 -------- TOTAL REPURCHASE AGREEMENTS (Cost $15,171) 15,171 -------- TOTAL INVESTMENTS (COST $177,265) -- 130.0% 178,932 -------- Bishop Street Funds 20 High Grade Income Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Value (000) ----- OTHER ASSETS AND LIABILITIES -- (30.0)% Payable Upon Return of Securities Loaned $(43,057) Investment Adviser Fees Payable (46) Administrative Fees Payable (13) Shareholder Servicing Fees Payable (11) Trustees' Fees Payable (1) Other Assets and Liabilities, Net 1,858 -------- TOTAL OTHER ASSETS AND LIABILITIES (41,270) -------- NET ASSETS: Fund Shares of Institutional Shares (unlimited authorization -- no par value) Based on 13,527,753 Outstanding Shares of Beneficial Interest 135,242 Fund Shares of Class A (unlimited authorization -- no par value) Based on 27,924 Outstanding Shares of Beneficial Interest 264 Undistributed Net Investment Income 1 Accumulated Net Realized Gain on Investments 488 Net Unrealized Appreciation on Investments 1,667 -------- TOTAL NET ASSETS -- 100.0% $137,662 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL CLASS ($137,379,453 / 13,527,753 SHARES) $ 10.16 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- CLASS A ($282,318 / 27,924 SHARES) $ 10.11 ======== MAXIMUM OFFERING PRICE PER SHARE -- CLASS A SHARES ($10.11 / 95.25%) $ 10.61 ======== (A) THE SECURITY OR A PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2004 (SEE NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2004 WAS $42,203,314. (B) THESE SECURITIES WERE PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING (SEE NOTE 5 IN THE NOTES TO FINANCIAL STATEMENTS). THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2004 WAS $43,057,281. (C) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 2004. THE MATURITY DATE SHOWN IS THE NEXT SCHEDULED RESET DATE. FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION MTN -- MEDIUM TERM NOTE SER -- SERIES THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2004 21 www.bishopstreetfunds.com Hawaii Municipal Bond Fund (UNAUDITED) -------------------------------------------------------------------------------- Top Ten Holdings -------------------------------------------------------------------------------- Percentage Coupon Maturity of Rate Date Investments -------------------------------------------------------------------------------- 1. Honolulu City & County GO 5.000% 07/01/19 2.2% -------------------------------------------------------------------------- 2. Hawaii State GO 4.750% 04/01/18 2.2% -------------------------------------------------------------------------- 3. Hawaii State Highway RB 5.250% 07/01/15 2.1% -------------------------------------------------------------------------- 4. Hawaii State Airport System RB 5.750% 07/01/17 2.1% -------------------------------------------------------------------------- 5. Hawaii State Highway RB 6.000% 07/01/09 2.1% -------------------------------------------------------------------------- 6. Department of Budget & Finance RB 1.120% 07/01/04 1.9% -------------------------------------------------------------------------- 7. Hawaii State Airport System RB 6.500% 07/01/14 1.7% -------------------------------------------------------------------------- 8. Department of Budget & Finance RB 5.750% 07/01/06 1.7% -------------------------------------------------------------------------- 9. Hawaii State GO 5.250% 04/01/12 1.6% -------------------------------------------------------------------------- 10. Honolulu City & County RB 5.250% 07/01/18 1.6% -------------------------------------------------------------------------------- Statement of Net Assets Face Market Amount Value (000) (000) -------- ------- MUNICIPAL BONDS -- 97.9% CALIFORNIA -- 1.3% California State, GO $1,000 5.300%, 04/01/29 $ 1,001 500 4.000%, 04/01/07 517 760 3.625%, 02/01/12 735 -------- 2,253 -------- HAWAII -- 85.0% Department of Budget & Finance, Electric & Subsidiary Project, Ser B, RB 1,000 5.000%, 12/01/22 993 Department of Budget & Finance, Hawaiian Electric, Ser A, RB, AMBAC Insured 2,000 5.500%, 12/01/14 2,169 Department of Budget & Finance, Hawaiian Electric, Ser A, RB, AMT, MBIA Insured 785 6.200%, 05/01/26 834 725 5.650%, 10/01/27 755 Bishop Street Funds 22 Hawaii Municipal Bond Fund (UNAUDITED) ----------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) ------- -------- HAWAII (CONTINUED) Department of Budget & Finance, Hawaiian Electric, Ser B, RB, AMT, AMBAC Insured $1,000 5.750%, 12/01/18 $ 1,067 Department of Budget & Finance, Hawaiian Electric, Ser C, RB, AMT, AMBAC Insured 1,000 6.200%, 11/01/29 1,087 Department of Budget & Finance, Kapiolani Health, RB 100 6.250%, 07/01/21 102 Department of Budget & Finance, North Hawaii Community Hospital, RB (LOC: First Hawaiian Bank) (B) 3,080 1.120%, 07/01/04 3,080 Department of Budget & Finance, Queens Health Systems, Ser A, RB, Pre-Refunded @ 102 (A) 1,450 5.875%, 07/01/06 1,584 2,505 5.750%, 07/01/06 2,732 Department of Budget & Finance, Queens Health Systems, Ser B, RB, MBIA Insured 750 5.250%, 07/01/11 796 1,445 5.250%, 07/01/12 1,525 1,275 5.250%, 07/01/13 1,342 1,000 5.250%, 07/01/14 1,050 Department of Budget & Finance, Special Purpose Mortgage, Hawaiian Electric Project, Ser A, RB, AMT, MBIA Insured 1,090 6.600%, 01/01/25 1,124 Department of Budget & Finance, Special Purpose Mortgage, Kapiolani Health Care System Project, RB 1,510 6.300%, 07/01/08 1,529 Department of Budget & Finance, Special Purpose Mortgage, St. Francis Medical Center Project, RB, FSA Insured 930 6.500%, 07/01/22 933 Harbor Capital Improvement, RB, AMT, FGIC Insured 305 6.200%, 07/01/08 311 Harbor Capital Improvement, RB, AMT, MBIA Insured 2,000 5.500%, 07/01/27 2,030 545 5.400%, 07/01/09 585 Harbor System, Ser A, RB, AMT, FSA Insured 2,025 5.750%, 07/01/17 2,179 1,210 5.700%, 07/01/16 1,304 1,000 5.600%, 07/01/15 1,078 Harbor System, Ser B, RB, AMT, AMBAC Insured 200 5.500%, 07/01/19 211 Harbor System, Ser B, RB, AMT, FSA Insured 1,000 5.000%, 01/01/13 1,058 June 30, 2004 23 www.bishopstreetfunds.com Hawaii Municipal Bond Fund (UNAUDITED) ----------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) ------ -------- HAWAII (CONTINUED) Hawaii County, Ser A, GO, FGIC Insured $ 450 5.600%, 05/01/12 $ 503 430 5.600%, 05/01/13 481 400 5.550%, 05/01/09 442 630 5.500%, 07/15/12 698 Hawaii County, Ser A, GO, FSA Insured 1,000 5.625%, 05/15/19 1,083 500 5.400%, 05/15/15 533 1,000 5.250%, 05/15/11 1,089 1,000 5.000%, 07/15/23 1,011 Hawaii State, Airport System, RB, AMT, FGIC Insured 3,235 5.750%, 07/01/17 3,429 200 5.250%, 07/01/21 201 Hawaii State, Airport System, Second Ser, RB, AMT, ETM 60 6.900%, 07/01/12 70 Hawaii State, Airport System, Second Ser, RB, AMT, ETM, MBIA Insured 1,100 6.900%, 07/01/12 1,277 Hawaii State, Airport System, Ser B, RB, AMT, FGIC Insured 1,500 6.625%, 07/01/18 1,703 2,500 6.500%, 07/01/14 2,831 100 6.000%, 07/01/19 108 Hawaii State, Highway, RB 1,000 6.000%, 07/01/08 1,114 3,000 6.000%, 07/01/09 3,378 375 5.250%, 07/01/10 401 500 5.250%, 07/01/12 535 2,000 5.250%, 07/01/16 2,129 Hawaii State, Highway, RB, FGIC Insured 3,280 5.250%, 07/01/15 3,468 405 5.000%, 07/01/16 421 Hawaii State, Housing, Finance & Development, Affordable Rental Housing Program, Ser A, RB 750 6.050%, 07/01/22 770 330 6.000%, 07/01/15 340 Hawaii State, Housing, Finance & Development, Affordable Rental Housing Program, Ser A, RB, AMT, FNMA Collateral 1,405 5.750%, 07/01/30 1,425 52 5.550%, 07/01/07 53 1,205 5.400%, 07/01/30 1,206 225 5.250%, 07/01/13 231 Hawaii State, Housing, Finance & Development, Single-Family Mortgage Purchase, Ser A, RB, AMT, FNMA Collateral 150 4.900%, 07/01/28 152 Bishop Street Funds 24 Hawaii Municipal Bond Fund (UNAUDITED) ---------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) -------- -------- HAWAII (CONTINUED) Hawaii State, Housing, Finance & Development, Single-Family Mortgage Purchase, Ser B, RB, FNMA Collateral $1,000 5.450%, 07/01/17 $ 1,025 Hawaii State, Housing, Finance & Development, University of Hawaii, Faculty Housing Project, RB, AMBAC Insured 700 5.650%, 10/01/16 737 415 5.000%, 10/01/06 434 395 4.850%, 10/01/05 409 Hawaii State, Kapolei Office Building, Ser A, COP, AMBAC Insured 1,475 5.250%, 05/01/13 1,581 1,000 5.000%, 05/01/08 1,075 1,000 5.000%, 05/01/14 1,049 1,100 5.000%, 05/01/15 1,144 1,500 5.000%, 05/01/16 1,563 1,000 5.000%, 05/01/17 1,038 500 5.000%, 05/01/18 516 Hawaii State, No. 1 Capitol District State Office, COP, MBIA Insured 1,000 5.200%, 05/01/14 1,055 175 5.000%, 05/01/11 188 Hawaii State, Ser CL, GO 1,000 6.000%, 03/01/09 1,120 Hawaii State, Ser CL, GO, MBIA Insured 555 6.000%, 03/01/08 614 Hawaii State, Ser CM, GO, FGIC Insured 2,000 6.500%, 12/01/13 2,391 500 6.000%, 12/01/09 566 1,500 6.000%, 12/01/11 1,715 Hawaii State, Ser CN, GO, FGIC Insured 500 5.500%, 03/01/14 542 500 5.250%, 03/01/12 537 540 5.250%, 03/01/17 569 Hawaii State, Ser CO, GO, FGIC Insured 200 6.000%, 09/01/05 210 Hawaii State, Ser CP, GO, FGIC Insured 300 5.000%, 10/01/16 312 Hawaii State, Ser CR, GO, MBIA Insured 500 5.750%, 04/01/09 556 270 5.250%, 04/01/11 287 2,500 5.250%, 04/01/12 2,667 3,500 4.750%, 04/01/18 3,545 Hawaii State, Ser CU, GO, MBIA Insured 500 5.750%, 10/01/11 557 550 5.750%, 10/01/12 605 June 30, 2004 25 www.bishopstreetfunds.com Hawaii Municipal Bond Fund (UNAUDITED) ----------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) ------- -------- HAWAII (CONTINUED) Hawaii State, Ser CV, GO, FGIC Insured $1,000 5.250%, 08/01/21 $ 1,036 Hawaii State, Ser CX, GO, FSA Insured 1,000 5.500%, 02/01/21 1,064 2,000 5.000%, 02/01/19 2,060 Hawaii State, Ser CZ, GO, FSA Insured, Pre-Refunded @ 100 (A) 1,860 5.250%, 07/01/12 2,056 Hawaiian Home Lands Department, RB 1,250 4.000%, 07/01/05 1,277 Honolulu City & County, Board of Water Supply, RB, Pre-Refunded @ 101 (A) 1,000 5.800%, 07/01/06 1,083 250 5.250%, 07/01/06 268 Honolulu City & County, Board of Water Supply, Ser A, RB, FGIC Insured 2,000 5.000%, 07/01/24 2,020 2,000 5.000%, 07/01/33 1,993 Honolulu City & County, FHA-Smith- Beretania-8A, RB, MBIA Insured 1,000 5.450%, 01/01/25 1,001 Honolulu City & County, GO 820 5.400%, 09/27/07 888 200 1.300%, 09/11/08 200 Honolulu City & County, GO, ETM 230 6.000%, 12/01/09 261 Honolulu City & County, Ser A, GO 55 6.000%, 01/01/10 62 Honolulu City & County, Ser A, GO, ETM 500 6.000%, 01/01/09 561 95 6.000%, 01/01/10 108 245 5.700%, 04/01/09 272 Honolulu City & County, Ser A, GO, ETM, MBIA Insured 135 6.000%, 11/01/10 154 Honolulu City & County, Ser A, GO, FSA Insured, Pre-Refunded @ 100 (A) 400 5.125%, 09/01/11 441 Honolulu City & County, Ser A, GO, MBIA Insured 365 6.000%, 11/01/10 415 1,000 5.250%, 03/01/27 1,015 Honolulu City & County, Ser B, GO, ETM, FGIC Insured 635 5.500%, 10/01/11 715 Bishop Street Funds 26 Hawaii Municipal Bond Fund (UNAUDITED) ----------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) ------ -------- HAWAII (CONTINUED) Honolulu City & County, Ser B, GO, FGIC Insured, Pre-Refunded @ 101 (A) $2,000 5.125%, 07/01/09 $ 2,199 2,000 5.125%, 07/01/09 2,199 Honolulu City & County, Ser C, GO, FGIC Insured 125 5.500%, 11/01/07 136 1,200 5.125%, 07/01/11 1,297 2,100 5.125%, 07/01/15 2,206 650 5.000%, 07/01/09 702 3,500 5.000%, 07/01/19 3,597 Honolulu City & County, Ser D, GO, AMT, FGIC Insured 245 4.850%, 02/01/10 260 Honolulu City & County, Waipahu Towers Project, Ser A, RB, AMT, GNMA Collateral 200 6.900%, 06/20/35 206 Honolulu City & County, Waste Water, 2nd Board Resolution, Junior Ser, RB, FGIC Insured 1,000 5.250%, 07/01/12 1,081 900 5.250%, 07/01/13 971 1,000 5.250%, 07/01/17 1,051 2,500 5.250%, 07/01/18 2,618 1,000 5.000%, 07/01/23 1,005 Kauai County, Public Improvement, Ser B, GO, MBIA Insured 175 5.200%, 08/01/15 185 165 5.150%, 08/01/14 175 155 5.100%, 08/01/13 164 120 5.050%, 08/01/12 127 140 5.000%, 08/01/11 149 135 4.950%, 08/01/10 143 100 4.850%, 08/01/09 106 120 4.750%, 08/01/08 128 Kauai County, Ser A, GO, FGIC Insured, Pre-Refunded @ 100 (A) 1,135 6.250%, 08/01/10 1,313 1,480 6.250%, 08/01/10 1,712 1,335 6.250%, 08/01/10 1,544 1,050 6.250%, 08/01/10 1,215 Kauai County, Ser A, GO, MBIA Insured 750 5.625%, 08/01/18 814 Maui County, Ser A, GO 485 5.375%, 03/01/12 529 June 30, 2004 27 www.bishopstreetfunds.com Hawaii Municipal Bond Fund (UNAUDITED) ---------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Market Amount Value (000) (000) ------- -------- HAWAII (CONTINUED) Maui County, Ser A, GO, FGIC Insured $ 100 5.125%, 03/01/14 $ 105 615 5.100%, 03/01/19 629 200 5.000%, 03/01/13 209 795 5.000%, 03/01/18 813 Maui County, Ser A, GO, FGIC Insured, Pre-Refunded @ 101 (A) 500 5.200%, 09/01/07 532 Maui County, Ser A, GO, MBIA Insured 1,840 5.000%, 03/01/20 1,886 Maui County, Ser A, GO, MBIA Insured, Pre-Refunded @ 101 (A) 250 5.750%, 06/01/06 270 Maui County, Ser B, GO, MBIA Insured 500 5.000%, 09/01/17 526 Maui County, Ser C, GO, FGIC Insured 500 5.200%, 03/01/16 526 790 5.150%, 03/01/15 828 Pacific Health Special Purpose, Ser A, RB 500 5.600%, 07/01/33 476 University of Hawaii, Ser A, RB, FGIC Insured 500 5.500%, 07/15/21 534 University of Hawaii, Ser B, RB, FSA Insured 320 5.250%, 10/01/16 341 775 5.250%, 10/01/17 822 -------- 146,426 -------- KENTUCKY -- 0.6% Kenton County, Airport, RB, AMT, MBIA Insured 1,000 5.000%, 03/01/10 1,050 -------- MASSACHUSETTS -- 0.8% Massachusetts State, Port Authority, Ser B, RB, AMT, FSA Insured 1,265 5.500%, 07/01/14 1,330 -------- NEW YORK -- 0.6% New York State, Tobacco Settlement Financing Corp, Ser B-1, RB 1,100 4.000%, 06/01/12 1,074 -------- OREGON -- 0.6% Portland, Airport & Marina Improvements, Ser 12C, RB, AMT, FGIC Insured 1,000 4.750%, 07/01/10 1,035 -------- Bishop Street Funds 28 Hawaii Municipal Bond Fund (UNAUDITED) ---------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Market Face Amount Value (000)/Shares (000) -------------- -------- PUERTO RICO -- 8.6% Puerto Rico Commonwealth, GO, MBIA Insured $1,500 6.500%, 07/01/10 $ 1,753 500 6.500%, 07/01/14 600 Puerto Rico Commonwealth, Public Improvement, GO, FSA Insured 1,000 5.000%, 07/01/21 1,025 Puerto Rico Commonwealth, Public Improvement, Ser A, GO 1,000 5.000%, 07/01/10 1,071 1,000 5.000%, 07/01/11 1,071 1,000 5.000%, 07/01/27 969 Puerto Rico Commonwealth, Ser A, GO 1,000 5.000%, 07/01/30 1,051 Puerto Rico, Electric Power Authority, Ser DD, RB, FSA Insured 1,000 5.000%, 07/01/28 1,000 Puerto Rico, Electric Power Authority, Ser HH, RB, FSA Insured 500 5.250%, 07/01/29 510 Puerto Rico, Housing, Banking & Finance Agency, Single-Family Mortgage, Affordable Housing Mortgage, Portfolio I, RB, AMT, GNMA/FNMA/FHLMC Collateral 180 6.100%, 10/01/15 184 Puerto Rico, Housing Financial Authority, Capital Funding Program, RB 2,500 5.000%, 12/01/16 2,600 1,000 4.500%, 12/01/09 1,054 Puerto Rico, Industrial Tourist Educational Medical Environmental Control Facilities, Hospital Auxilio Mutuo Obligation Group, Ser A, RB, MBIA Insured 300 6.250%, 07/01/24 312 University of Puerto Rico, Ser O, RB, MBIA Insured 1,500 5.750%, 06/01/19 1,656 -------- 14,856 -------- TEXAS -- 0.4% Channelview, Independent School District, Ser B, GO 550 5.250%, 08/15/19 578 -------- TOTAL MUNICIPAL BONDS (Cost $162,159) 168,602 -------- CASH EQUIVALENTS -- 0.8% 701,666 Dreyfus Tax-Exempt Cash Management Fund 702 701,665 Fidelity Institutional Money Market Tax-Exempt Fund 702 -------- TOTAL CASH EQUIVALENTS (Cost $1,404) 1,404 -------- TOTAL INVESTMENTS (COST $163,563)-- 98.7% 170,006 -------- June 30, 2004 29 www.bishopstreetfunds.com Hawaii Municipal Bond Fund (UNAUDITED) ---------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Value (000) ------- OTHER ASSETS AND LIABILITIES -- 1.3% Investment Adviser Fees Payable $ (32) Shareholder Servicing Fees Payable (14) Administrative Fees Payable (10) Distribution Fee Payable (6) Trustees' Fees Payable (1) Other Assets and Liabilities, Net 2,286 -------- TOTAL OTHER ASSETS AND LIABILITIES 2,223 -------- NET ASSETS: Fund Shares of Institutional Shares (unlimited authorization -- no par value) Based on 13,136,833 Outstanding Shares of Beneficial Interest 136,596 Fund Shares of Class A (unlimited authorization -- no par value) Based on 2,697,534 Outstanding Shares of Beneficial Interest 28,235 Undistributed Net Investment Income 33 Accumulated Net Realized Gain on Investments 922 Net Unrealized Appreciation on Investments 6,443 -------- TOTAL NET ASSETS -- 100.0% $172,229 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL CLASS ($142,883,160 / 13,136,833 SHARES) $ 10.88 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- CLASS A ($29,345,647 / 2,697,534 SHARES) $ 10.88 ======== MAXIMUM OFFERING PRICE PER SHARE -- CLASS A SHARES ($10.88 / 95.75%) $ 11.36 ======== Bishop Street Funds 30 Hawaii Municipal Bond Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) (A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. (B) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 2004. THE MATURITY DATE SHOWN IS THE NEXT SCHEDULED RESET DATE. AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY AMT -- ALTERNATIVE MINIMUM TAX COP -- CERTIFICATE OF PARTICIPATION ETM -- ESCROWED TO MATURITY FGIC -- FINANCIAL GUARANTEE INSURANCE CORPORATION FHA -- FEDERAL HOUSING ADMINISTRATION FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION FSA -- FINANCIAL SECURITY ASSURANCE GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION GO -- GENERAL OBLIGATION LOC -- LETTER OF CREDIT MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE RB -- REVENUE BOND SER -- SERIES THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2004 31 www.bishopstreetfunds.com Money Market Fund (UNAUDITED) ---------------------------------------------------------------------- STATEMENT OF NET ASSETS Face Amount Value (000) (000) -------- ------- COMMERCIAL PAPER (D) -- 39.7% ASSET-BACKED (E) -- 19.8% Apreco $4,650 1.140%, 07/19/04 $ 4,647 CRC Funding 4,500 1.100%, 07/12/04 4,499 Delaware Funding 4,500 1.100%, 07/13/04 4,498 Falcon Asset Securitization 4,500 1.140%, 07/13/04 4,498 Galaxy Funding 4,000 1.200%, 08/17/04 3,994 Greyhawk Funding 4,000 1.070%, 07/14/04 3,999 Old Line Funding 4,000 1.050%, 07/06/04 3,999 Park Avenue Receivables 4,500 1.210%, 07/15/04 4,498 Preferred Receivable Funding 4,500 1.210%, 07/13/04 4,498 Windmill Funding 5,000 1.100%, 07/12/04 4,998 Yorktown Capital 4,500 1.230%, 07/21/04 4,497 -------- 48,625 -------- BANKS -- 2.4% Svenska Handelsbank 5,000 1.230%, 10/12/04 5,000 UBS Finance 1,000 1.130%, 07/07/04 1,000 -------- 6,000 -------- CONSUMER STAPLES -- 5.7% Coca-Cola 5,000 1.160%, 07/19/04 4,997 Colgate-Palmolive 4,000 1.180%, 07/19/04 3,997 Procter & Gamble 5,000 1.190%, 07/21/04 4,997 -------- 13,991 -------- Bishop Street Funds 32 Money Market Fund (UNAUDITED) ----------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Amount Value (000) (000) -------- -------- DIVERSE FINANCIAL SERVICES -- 9.1% CBA Finance $5,000 1.150%, 08/16/04 $ 4,993 General Electric Capital 3,500 1.320%, 08/17/04 3,494 International Lease Finance 4,800 1.070%, 07/09/04 4,799 MassMutual Funding 4,000 1.180%, 07/21/04 3,997 Morgan Stanley 5,000 1.090%, 07/06/04 4,999 -------- 22,282 -------- PHARMACEUTICALS -- 0.5% Pfize 1,300 1.100%, 07/19/04 1,299 -------- RETAIL - FOOD -- 2.2% Archer Daniels Midland (E) 5,300 1.080%, 08/17/04 5,293 -------- TOTAL COMMERCIAL PAPER (Cost $97,490) 97,490 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS -- 21.5% FHLB 2,500 1.420%, 11/10/04 (C) 2,487 4,000 1.400%, 11/12/04 (C) 3,979 3,000 2.125%, 12/15/04 3,012 1,500 1.500%, 03/01/05 1,500 4,000 1.625%, 04/15/05 4,011 1,100 1.660%, 05/16/05 1,100 FHLMC 5,000 1.179%, 08/16/04 (C) 4,992 4,000 1.190%, 08/19/04 (C) 3,994 4,500 1.201%, 12/29/04 4,473 FHLMC MTN 6,000 1.360%, 08/06/04 6,001 FNMA (C) 7,000 1.219%, 07/01/04 7,000 1,487 1.200%, 09/17/04 1,483 2,500 1.258%, 11/03/04 2,489 3,000 1.470%, 11/12/04 2,984 June 30, 2004 33 www.bishopstreetfunds.com Money Market Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Amount Value (000) (000) ------- ------- U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED) $2,800 1.375%, 02/14/05 $ 2,800 540 1.610%, 05/13/05 540 -------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $52,845) 52,845 -------- CERTIFICATES OF DEPOSIT/BANK NOTES -- 9.0% ABN Amro Bank 3,000 1.270%, 12/30/04 3,000 Bradford & Bingley (E) 4,000 1.120%, 01/07/05 4,000 Wells Fargo Bank 5,000 1.300%, 08/10/04 5,000 Westdeutsche Landesbank 5,000 1.320%, 01/27/05 5,000 Wilmington Trust 5,000 1.100%, 07/26/04 5,000 -------- TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES (Cost $22,000) 22,000 -------- INSURANCE FUNDING AGREEMENTS (A)(B)(E) -- 6.3% Allstate 3,000 1.610%, 09/15/04 3,000 Metropolitan Life Insurance 5,000 1.259%, 08/02/04 5,000 Monumental Life Insurance 5,500 1.270%, 08/01/04 5,500 Travelers Insurance 2,000 1.385%, 08/30/04 2,000 -------- TOTAL INSURANCE FUNDING AGREEMENTS (Cost $15,500) 15,500 -------- CORPORATE OBLIGATIONS (A) -- 5.9% BANKS -- 3.8% American Express Centurion 5,000 1.270%, 07/27/04 5,000 Barclays Bank 1,500 1.221%, 03/24/05 1,500 Chase Manhattan Bank 2,750 1.140%, 07/12/04 2,750 -------- 9,250 -------- Bishop Street Funds 34 Money Market Fund (UNAUDITED) -------------------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Face Amount Value (000) (000) ------- ------- DIVERSE FINANCIAL SERVICES -- 2.1% General Electric Capital $2,300 1.250%, 07/09/04 $ 2,300 General Electric Capital MTN 2,000 1.359%, 07/19/04 2,000 Nationwide Building (E) 900 1.139%, 07/23/04 900 -------- 5,200 -------- TOTAL CORPORATE OBLIGATIONS (Cost $14,450) 14,450 -------- COLLATERALIZED MORTGAGE OBLIGATIONS (A) -- 3.3% Granite Mortgages, Ser 2004-1, Cl 1A1 1,449 1.240%, 07/20/04 1,449 Holmes Financing, Ser 8, Cl 1A 2,500 1.189%, 07/15/04 2,500 Permanent Financing, Ser 3, Cl 1A 2,055 1.139%, 07/12/04 2,055 Permanent Financing, Ser 4, Cl 1A 2,000 1.129%, 07/12/04 2,000 -------- TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $8,004) 8,004 -------- MUNICIPAL BONDS (D) -- 0.8% CONNECTICUT -- 0.8% Yale University TECP 2,000 1.100%, 07/07/04 1,999 -------- TOTAL MUNICIPAL BONDS (Cost $1,999) 1,999 -------- REPURCHASE AGREEMENTS -- 13.5% Deutsche Bank 1.500%, dated 06/30/04, to be repurchased on 07/01/04, repurchase price $23,100,963, (collateralized by a U.S. government obligation, 23,100 total market value $23,562,000) 23,100 Goldman Sachs Group 1.550%, dated 06/30/04, to be repurchased on 07/01/04, repurchase price $10,000,431, (collateralized by a U.S. government obligation, 10,000 total market value $10,200,001) 10,000 -------- TOTAL REPURCHASE AGREEMENTS (Cost $33,100) 33,100 -------- TOTAL INVESTMENTS (COST $245,388)-- 100.0% 245,388 -------- June 30, 2004 35 www.bishopstreetfunds.com Money Market Fund (UNAUDITED) ---------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Value (000) ------- OTHER ASSETS AND LIABILITIES -- 0.0% Investment Adviser Fees Payable $ (30) Administrative Fees Payable (22) Shareholder Servicing Fees Payable (20) Distribution Fee Payable (3) Trustees' Fees Payable (2) Other Assets and Liabilities, Net 60 -------- TOTAL OTHER ASSETS AND LIABILITIES (17) -------- NET ASSETS: Fund Shares of Institutional Shares (unlimited authorization -- no par value) Based on 226,855,502 Outstanding Shares of Beneficial Interest 226,856 Fund Shares of Class A (unlimited authorization -- no par value) Based on 18,538,809 Outstanding Shares of Beneficial Interest 18,537 Distribution in Excess of Net Investment Income (1) Accumulated Net Realized Loss on Investments (21) -------- TOTAL NET ASSETS -- 100.0% $245,371 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL CLASS ($226,832,446 / 226,855,502 SHARES) $ 1.00 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- CLASS A ($18,538,823 / 18,538,809 SHARES) $ 1.00 ======== (A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 2004. THE MATURITY DATE SHOWN IS THE NEXT SCHEDULED RESET DATE. (B) SECURITY CONSIDERED ILLIQUID. (C) REPRESENTS THE EFFECTIVE YIELD AT THE DATE OF PURCHASE. (D) REPRESENTS THE DISCOUNT YIELD AT THE DATE OF PURCHASE. (E) SECURITIES SOLD WITHIN THE TERMS OF PRIVATE PLACEMENT MEMORANDUM, EXEMPT FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 144A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR OTHER "ACCREDITED INVESTORS." CL -- CLASS FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION MTN -- MEDIUM TERM NOTE SER -- SERIES TECP -- TAX-EXEMPT COMMERCIAL PAPER THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 36 Treasury Money Market Fund (UNAUDITED) ---------------------------------------------------------------------- STATEMENT OF NET ASSETS Face Amount Value (000) (000) ------- ------- U.S. TREASURY OBLIGATIONS -- 44.9% U.S. Treasury Bills (A) $26,000 0.930%, 07/01/04 $ 26,000 3,000 1.222%, 11/18/04 2,984 U.S. Treasury Notes 5,000 7.250%, 08/15/04 5,037 5,000 6.000%, 08/15/04 5,029 9,000 2.125%, 08/31/04 9,013 5,000 7.875%, 11/15/04 5,126 26,500 5.875%, 11/15/04 26,965 10,500 2.000%, 11/30/04 10,532 4,000 1.750%, 12/31/04 4,011 2,000 1.625%, 04/30/05 2,007 -------- TOTAL U.S. TREASURY OBLIGATIONS (Cost $96,704) 96,704 -------- REPURCHASE AGREEMENTS -- 54.9% ABN Amro 1.280%, dated 06/30/04, due 07/01/04, repurchase price $10,000,356, (collateralized by a U.S. treasury obligation, 10,000 total market value $10,247,464) 10,000 Credit Suisse First Boston 1.250%, dated 06/30/04, due 07/01/04, repurchase price $10,000,347,(collateralized by a U.S. treasury obligation, 10,000 total market value $10,203,243) 10,000 Deutsche Bank 1.300%, dated 06/30/04, due 07/01/04, repurchase price $39,801,437, (collateralized by U.S. treasury obligations, 39,800 total market value $40,596,991) 39,800 Goldman Sachs Group 1.220%, dated 06/30/04, due 07/01/04, repurchase price $10,000,339, (collateralized by a U.S. treasury obligation, 10,000 total market value $10,208,846) 10,000 UBS Securities 1.280%, dated 06/30/04, due 07/01/04, repurchase price $48,001,707, (collateralized by a U.S. treasury obligation, 48,000 total market value $48,963,687) 48,000 -------- TOTAL REPURCHASE AGREEMENTS (Cost $117,800) 117,800 -------- TOTAL INVESTMENTS (COST $214,504)-- 99.8% 214,504 -------- June 30, 2004 37 www.bishopstreetfunds.com Treasury Money Market Fund (UNAUDITED) ---------------------------------------------------------------------- STATEMENT OF NET ASSETS (CONTINUED) Value (000) ------- OTHER ASSETS AND LIABILITIES -- 0.2% Investment Adviser Fee Payable $ (17) Administrative Fees Payable (21) Shareholder Servicing Fees Payable (18) Trustees' Fees Payable (3) Other Assets and Liabilities, Net 510 -------- TOTAL OTHER ASSETS AND LIABILITIES 451 -------- NET ASSETS: Fund Shares of Institutional Shares (unlimited authorization -- no par value) based on 214,946,724 outstanding shares of beneficial interest 214,947 Accumulated Net Realized Gain on Investments 8 -------- TOTAL NET ASSETS -- 100.0% $214,955 ======== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL CLASS $ 1.00 ======== (A) REPRESENTS THE EFFECTIVE YIELD AT THE DATE OF PURCHASE. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 38
Bishop Street Funds (UNAUDITED) ---------------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2004 (IN THOUSANDS) Tax High Strategic Managed Grade Equity Growth Equity Income Fund Fund Fund Fund ---------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividend Income $1,005 $ 170 $236 $ -- Interest Income 9 3 2 3,042 Securities Lending, Net 21 -- -- 18 Less: Foreign Taxes Withheld (5) -- -- -- ---------------------------------------------------------------------------------------- Total Investment Income 1,030 173 238 3,060 ---------------------------------------------------------------------------------------- EXPENSES: Investment Adviser Fees 577 188 126 379 Shareholder Servicing Fees 195 64 43 172 Administrative Fees 156 51 34 138 Distribution Fees, Class A 2 -- -- -- Transfer Agent Fees 29 6 11 28 Professional Fees 15 3 3 13 Custody Fees 8 3 2 7 Trustees' Fees 7 1 1 6 Printing Fees 5 1 1 7 Registration Fees 1 1 -- 1 Miscellaneous Expenses 5 1 1 5 ---------------------------------------------------------------------------------------- Total Expenses 1,000 319 222 756 ---------------------------------------------------------------------------------------- Less Waivers: Investment Adviser Fees (30) -- (11) (69) Shareholder Servicing Fees (117) (38) (26) (103) Administrative Fees (68) (22) (15) (60) ---------------------------------------------------------------------------------------- Total Waivers (215) (60) (52) (232) ---------------------------------------------------------------------------------------- Total Net Expenses 785 259 170 524 ---------------------------------------------------------------------------------------- Net Investment Income (Loss) 245 (86) 68 2,536 ---------------------------------------------------------------------------------------- Net Realized Gain on Investments 3,103 1,128 742 603 Change in Unrealized Appreciation (Depreciation) on Investments (2,861) 661 56 (4,010) ---------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investments 242 1,789 798 (3,407) ---------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets Resulting from Operations $ 487 $1,703 $866 $ (871) ========================================================================================
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, 2004 39 www.bishopstreetfunds.com
Bishop Street Funds (UNAUDITED) ----------------------------------------------------------------------------------------- STATEMENTS OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2004 (IN THOUSANDS) Hawaii Treasury Municipal Money Money Bond Market Market Fund Fund Fund ---------------------------------------------------------------------------------------- INVESTMENT INCOME: Interest Income $ 4,015 $1,310 $1,322 ---------------------------------------------------------------------------------------- Total Investment Income 4,015 1,310 1,322 ---------------------------------------------------------------------------------------- EXPENSES: Investment Adviser Fees 311 346 376 Shareholder Servicing Fees 222 288 313 Administrative Fees 178 231 251 Distribution Fees, Class A 38 22 -- Transfer Agent Fees 30 37 26 Professional Fees 16 23 24 Custody Fees 9 11 13 Trustees' Fees 8 10 11 Printing Fees 7 11 13 Registration Fees 1 2 2 Miscellaneous Expenses 14 2 17 ---------------------------------------------------------------------------------------- Total Expenses 834 983 1,046 ---------------------------------------------------------------------------------------- Less Waivers: Investment Adviser Fees (57) (112) (198) Shareholder Servicing Fees (133) (173) (188) Administrative Fees (116) (100) (109) ---------------------------------------------------------------------------------------- Total Waivers (306) (385) (495) ---------------------------------------------------------------------------------------- Total Net Expenses 528 598 551 ---------------------------------------------------------------------------------------- Net Investment Income 3,487 712 771 ---------------------------------------------------------------------------------------- Net Realized Gain on Investments 718 1 -- Change in Unrealized Depreciation on Investments (6,013) -- -- ---------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investments (5,295) 1 -- ---------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets Resulting from Operations $(1,808) $ 713 $ 771 ========================================================================================
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 40
Bishop Street Funds ----------------------------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2004 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2003 (IN THOUSANDS) Equity Fund ------------------------------------------------------------------------------------------------ 2004 2003 ------------------------------------------------------------------------------------------------ INVESTMENT ACTIVITIES FROM OPERATIONS: Net Investment Income $ 245 $ 655 Net Realized Gain on Investments 3,103 1,685 Change in Unrealized Appreciation (Depreciation) on Investments (2,861) 30,565 ------------------------------------------------------------------------------------------------ Increase in Net Assets Resulting From Operations 487 32,905 ------------------------------------------------------------------------------------------------ DIVIDENDS TO SHAREHOLDERS: Net Investment Income: Institutional Class Shares (240) (650) Class A Shares (1) (3) ------------------------------------------------------------------------------------------------ Total Dividends (241) (653) ------------------------------------------------------------------------------------------------ Changes in Net Assets 246 32,252 ------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS: Institutional Class Shares: Proceeds from Shares Issued 6,642 11,293 Reinvestments of Cash Distributions 151 393 Cost of Shares Redeemed (13,879) (17,181) ------------------------------------------------------------------------------------------------- Total Institutional Class Capital Share Transactions (7,086) (5,495) ------------------------------------------------------------------------------------------------- Class A Shares: Proceeds from Shares Issued 153 143 Reinvestments of Cash Distributions -- 2 Cost of Shares Redeemed (52) (521) ------------------------------------------------------------------------------------------------- Total Class A Capital Share Transactions 101 (376) ------------------------------------------------------------------------------------------------- Net Decrease in Net Assets From Capital Share Transactions (6,985) (5,871) ------------------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets (6,739) 26,381 ------------------------------------------------------------------------------------------------- NET ASSETS: Beginning of Period 157,965 131,584 -------------------------------------------------------------------------------------------------- End of Period $151,226 $157,965 ================================================================================================== Undistributed Net Investment Income $ 13 $ 9 ================================================================================================== SHARE TRANSACTIONS: Institutional Class Shares: Shares Issued 691 1,341 Shares Issued in Lieu of Cash Distributions 16 46 Shares Redeemed (1,437) (2,169) -------------------------------------------------------------------------------------------------- Total Institutional Class Share Transactions (730) (782) -------------------------------------------------------------------------------------------------- Class A Shares: Shares Issued 16 17 Shares Issued in Lieu of Cash Distributions -- 1 Shares Redeemed (6) (64) -------------------------------------------------------------------------------------------------- Total Class A Share Transactions 10 (46) -------------------------------------------------------------------------------------------------- Net Decrease in Shares Outstanding from Share Transactions (720) (828) ==================================================================================================
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, 2004 41 www.bishopstreetfunds.com
Bishop Street Funds ----------------------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2004 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2003 (IN THOUSANDS) Strategic Tax Managed Growth Fund Equity Fund ------------------------------------------------------------------------------------------ 2004 2003 2004 2003 ------------------------------------------------------------------------------------------ INVESTMENT ACTIVITIES FROM OPERATIONS: Net Investment Income (Loss) $ (86) $ (167) $ 68 $ 205 Net Realized Gain on Investments 1,128 758 742 19 Change in Unrealized Appreciation on Investments 661 8,983 56 6,553 ------------------------------------------------------------------------------------------ Increase in Net Assets Resulting From Operations 1,703 9,574 866 6,777 ------------------------------------------------------------------------------------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net Investment Income: Institutional Class Shares -- -- (67) (204) Capital Gains: Institutional Class Shares -- -- -- (46) ------------------------------------------------------------------------------------------ Total Dividends and Distributions -- -- (67) (250) ------------------------------------------------------------------------------------------ Changes in Net Assets 1,703 9,574 799 6,527 ------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS: Institutional Class Shares: Proceeds from Shares Issued 10,724 20,073 498 8,008 Reinvestments of Cash Distributions -- -- 2 6 Cost of Shares Redeemed (3,997) (2,701) (2,542) (4,368) ------------------------------------------------------------------------------------------ Total Institutional Class Capital Share Transactions 6,727 17,372 (2,042) 3,646 ------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets From Capital Share Transactions 6,727 17,372 (2,042) 3,646 ------------------------------------------------------------------------------------------ Total Increase (Decrease) in Net Assets 8,430 26,946 (1,243) 10,173 ------------------------------------------------------------------------------------------ NET ASSETS: Beginning of Period 46,845 19,899 34,808 24,635 ------------------------------------------------------------------------------------------ End of Period $55,275 $46,845 $33,565 $34,808 ========================================================================================== Distributions in Excess of Net Investment Income/Accumulated Net Investment Loss $ (108) $ (22) $ (13) $ (14) ========================================================================================== SHARE TRANSACTIONS: Institutional Class Shares: Shares Issued 883 1,873 40 802 Shares Issued in Lieu of Cash Distributions -- -- -- 1 Shares Redeemed (327) (251) (207) (422) ------------------------------------------------------------------------------------------ Total Institutional Class Share Transactions 556 1,622 (167) 381 ------------------------------------------------------------------------------------------ Net Increase (Decrease) in Shares Outstanding from Share Transactions 556 1,622 (167) 381 ========================================================================================== AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
Bishop Street Funds 42
Bishop Street Funds ---------------------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2004 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2003 (IN THOUSANDS) High Grade Hawaii Municipal Income Fund Bond Fund ----------------------------------------------------------------------------------------- 2004 2003 2004 2003 ----------------------------------------------------------------------------------------- INVESTMENT ACTIVITIES FROM OPERATIONS: Net Investment Income $ 2,536 $ 5,273 $ 3,487 $ 7,321 Net Realized Gain on Investments 603 4,600 718 1,911 Change in Unrealized Appreciation (Depreciation) on Investments (4,010) (5,397) (6,013) 64 ----------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets Resulting From Operations (871) 4,476 (1,808) 9,296 ----------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net Investment Income: Institutional Class Shares (2,531) (5,260) (2,920) (6,122) Class A Shares (6) (13) (568) (1,218) Capital Gains: Institutional Class Shares -- (2,572) -- (1,555) Class A Shares -- (5) -- (317) ----------------------------------------------------------------------------------------- Total Dividends and Distributions (2,537) (7,850) (3,488) (9,212) ----------------------------------------------------------------------------------------- Changes in Net Assets (3,408) (3,374) (5,296) 84 ----------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: Institutional Class Shares: Proceeds from Shares Issued 13,671 15,737 6,092 18,535 Reinvestments of Cash Distributions 1,019 2,901 456 1,112 Cost of Shares Redeemed (8,754) (18,942) (9,651) (19,607) ----------------------------------------------------------------------------------------- Total Institutional Class Capital Share Transactions 5,936 (304) (3,103) 40 ----------------------------------------------------------------------------------------- Class A Shares: Proceeds from Shares Issued 65 25 583 2,635 Reinvestments of Cash Distributions 4 15 232 726 Cost of Shares Redeemed (56) (182) (1,535) (5,880) ----------------------------------------------------------------------------------------- Total Class A Capital Share Transactions 13 (142) (720) (2,519) ----------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets From Capital Share Transactions 5,949 (446) (3,823) (2,479) ----------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets 2,541 (3,820) (9,119) (2,395) ----------------------------------------------------------------------------------------- NET ASSETS: Beginning of Period 135,121 138,941 181,348 183,743 ----------------------------------------------------------------------------------------- End of Period $137,662 $135,121 $172,229 $181,348 ========================================================================================= Undistributed Net Investment Income $ 1 $ 2 $ 33 $ 34 ========================================================================================= SHARE TRANSACTIONS: Institutional Class Shares: Shares Issued 1,315 1,481 546 1,656 Shares Issued in Lieu of Cash Distributions 99 274 41 99 Shares Redeemed (847) (1,777) (870) (1,750) ----------------------------------------------------------------------------------------- Total Institutional Class Share Transactions 567 (22) (283) 5 ----------------------------------------------------------------------------------------- Class A Shares: Shares Issued 6 2 51 234 Shares Issued in Lieu of Cash Distributions -- 2 21 65 Shares Redeemed (5) (17) (139) (521) ----------------------------------------------------------------------------------------- Total Class A Share Transactions 1 (13) (67) (222) ----------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares Outstanding from Share Transactions 568 (35) (350) (217) =========================================================================================
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, 2004 43 www.bishopstreetfunds.com
Bishop Street Funds ---------------------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2004 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2003 (IN THOUSANDS) Money Market Treasury Money Market Fund Fund ------------------------------------------------------------------------------------------- 2004 2003 2004 2003 ------------------------------------------------------------------------------------------- INVESTMENT ACTIVITIES FROM OPERATIONS: Net Investment Income $ 712 $ 1,740 $ 771 $ 2,386 Net Realized Gain on Investments 1 -- -- 21 ------------------------------------------------------------------------------------------- Increase in Net Assets Resulting From Operations 713 1,740 771 2,407 ------------------------------------------------------------------------------------------- DIVIDENDS TO SHAREHOLDERS: Net Investment Income: Institutional Class Shares (678) (1,731) (787) (2,386) Class A Shares (34) (9) -- -- ------------------------------------------------------------------------------------------- Total Dividends (712) (1,740) (787) (2,386) ------------------------------------------------------------------------------------------- Changes in Net Assets 1 -- (16) 21 ------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS: (ALL AT $1.00 PER SHARE): Institutional Class Shares: Proceeds from Shares Issued 245,118 408,493 232,107 678,219 Reinvestments of Cash Distributions 8 25 2 9 Cost of Shares Redeemed (200,460) (464,850) (287,503)(739,562) ------------------------------------------------------------------------------------------- Total Institutional Class Capital Share Transactions 44,666 (56,332) (55,394) (61,334) ------------------------------------------------------------------------------------------- Class A Shares: Proceeds from Shares Issued 18,078 20,191 -- -- Reinvestments of Cash Distributions 34 9 -- -- Cost of Shares Redeemed (17,014) (2,948) -- -- ------------------------------------------------------------------------------------------- Total Class A Capital Share Transactions 1,098 17,252 -- -- ------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets From Capital Share Transactions 45,764 (39,080) (55,394) (61,334) ------------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets 45,765 (39,080) (55,410) (61,313) ------------------------------------------------------------------------------------------- NET ASSETS: Beginning of Period 199,606 238,686 270,365 331,678 ------------------------------------------------------------------------------------------- End of Period $ 245,371 $ 199,606 $214,955 $270,365 =========================================================================================== Undistributed (Distributions in Excess of) Net Investment Income $ (1) $ (1) $ -- $ 16 ===========================================================================================
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 44 This page intentionally left blank. Bishop Street Funds -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2004 (UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND INVESTMENT ACTIVITIES DISTRIBUTIONS FROM --------------------- ------------------ TOTAL NET ASSET NET REALIZED INVESTMENT TOTAL VALUE, NET AND UNREALIZED ACTIVITIES NET DIVIDENDS BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND OF PERIOD INCOME (LOSS) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS --------- ------------- --------------- ---------- --------- -------- ------------- ----------- EQUITY FUND ----------- Institutional Class Shares: 2004(1) $ 9.49 $ 0.02 $ 0.01 $ 0.03 $(0.02) $ -- $(0.02) 2003(1) 7.53 0.04 1.96 2.00 (0.04) -- (0.04) 2002(1) 10.08 0.02 (2.55) (2.53) (0.02) -- (0.02) 2001 13.55 -- (3.47) (3.47) -- -- -- 2000 17.88 -- (2.77) (2.77) -- (1.56) (1.56) 1999(1) 15.28 -- 3.68 3.68 -- (1.08) (1.08) Class A Shares: 2004(1) $ 9.44 $ -- $ -- $ -- $ --** $ -- $ -- 2003(1) 7.49 0.02 1.95 1.97 (0.02) -- (0.02) 2002(1) 10.01 -- (2.52) (2.52) -- -- -- 2001 13.49 (0.07) (3.41) (3.48) -- -- -- 2000 17.87 -- (2.82) (2.82) -- (1.56) (1.56) 1999(2) 15.74 -- 3.19 3.19 -- (1.06) (1.06) --------------------- STRATEGIC GROWTH FUND --------------------- Institutional Class Shares: 2004(1) $11.93 $(0.02) $ 0.42 $ 0.40 $ -- $ -- $ -- 2003(1) 8.64 (0.06) 3.35 3.29 -- -- -- 2002(3) 10.00 (0.03) (1.33) (1.36) -- -- -- ----------------------- TAX MANAGED EQUITY FUND ----------------------- Institutional Class Shares: 2004(1) $12.06 $ 0.02 $ 0.28 $ 0.30 $(0.02) $ -- $(0.02) 2003(1) 9.83 0.07 2.25 2.32 (0.07) (0.02) (0.09) 2002(4) 10.00 0.01 (0.17) (0.16) (0.01) -- (0.01) ---------------------- HIGH GRADE INCOME FUND ---------------------- Institutional Class Shares: 2004(1) $10.40 $ 0.19 $(0.24) $(0.05) $(0.19) $ -- $(0.19) 2003(1) 10.67 0.42 (0.07) 0.35 (0.42) (0.20) (0.62) 2002 10.00 0.46 0.67 1.13 (0.46) -- (0.46) 2001 9.81 0.50 0.19 0.69 (0.50) -- (0.50) 2000 9.39 0.52 0.42 0.94 (0.52) -- (0.52) 1999 10.43 0.48 (0.92) (0.44) (0.50) (0.10) (0.60) Class A Shares: 2004(1) $10.36 $ 0.18 $(0.25) $(0.07) $(0.18) $ -- $(0.18) 2003(1) 10.62 0.39 (0.06) 0.33 (0.39) (0.20) (0.59) 2002 9.96 0.43 0.66 1.09 (0.43) -- (0.43) 2001 9.76 0.48 0.19 0.67 (0.47) -- (0.47) 2000 9.35 0.52 0.38 0.90 (0.49) -- (0.49) 1999(2) 9.69 0.19 (0.19) -- (0.24) (0.10) (0.34) + TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED. TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE ON CLASS A SHARES. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. * ANNUALIZED ** AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
Bishop Street Funds 46 --------------------------------------------------------------------------------
RATIO OF RATIO OF EXPENSES RATIO OF NET NET ASSET NET ASSETS, EXPENSES TO TO AVERAGE INVESTMENT VALUE, END OF AVERAGE NET ASSETS INCOME (LOSS) PORTFOLIO END OF TOTAL PERIOD NET EXCLUDING FEE TO AVERAGE TURNOVER PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS RATE --------- ------- ----------- ----------- ---------------- ------------- -------- ----------- EQUITY FUND ----------- Institutional Class Shares: 2004(1) $ 9.50 0.26% $149,541 1.00%* 1.28%* 0.32%* 18% 2003(1) 9.49 26.62 156,381 1.00 1.28 0.48 43 2002(1) 7.53 (25.06) 129,981 1.00 1.27 0.24 60 2001 10.08 (25.61) 216,412 1.00 1.27 -- 86 2000 13.55 (16.20) 300,565 1.00 1.28 (0.23) 52 1999(1) 17.88 24.37 391,227 1.00 1.27 (0.01) 58 Class A Shares: 2004(1) $ 9.44 0.04% $ 1,685 1.25%* 1.53%* 0.07%* 18% 2003(1) 9.44 26.31 1,584 1.25 1.53 0.23 43 2002(1) 7.49 (25.17) 1,603 1.25 1.52 (0.02) 60 2001 10.01 (25.80) 2,813 1.25 1.52 (0.29) 86 2000 13.49 (16.49) 10,631 1.25 1.53 (0.51) 52 1999(2) 17.87 20.52 583 1.25* 1.61* (0.33)* 58 --------------------- STRATEGIC GROWTH FUND --------------------- Institutional Class Shares: 2004(1) $12.33 3.35% $ 55,275 1.02%* 1.26%* (0.34)%* 26% 2003(1) 11.93 38.08 46,845 1.17 1.41 (0.57) 59 2002(3) 8.64 (13.60) 19,899 1.25* 1.67* (0.61)* 50 ----------------------- TAX MANAGED EQUITY FUND ----------------------- Institutional Class Shares: 2004(1) $12.34 2.52% $ 33,565 1.00%* 1.31%* 0.39%* 11% 2003(1) 12.06 23.66 34,808 1.00 1.43 0.68 34 2002(4) 9.83 (1.57) 24,635 1.00* 1.50* 0.99* 1 ---------------------- HIGH GRADE INCOME FUND ---------------------- Institutional Class Shares: 2004(1) $10.16 (0.50)% $137,380 0.76%* 1.10%* 3.69%* 30% 2003(1) 10.40 3.31 134,845 0.76 1.10 3.91 48 2002 10.67 11.54 138,516 0.76 1.09 4.45 19 2001 10.00 7.16 124,416 0.76 1.09 5.02 89 2000 9.81 10.25 127,888 0.77 1.14 5.41 88 1999 9.39 (4.34) 127,881 0.80 1.19 5.12 56 Class A Shares: 2004(1) $10.11 (0.73)% $ 282 1.01%* 1.35%* 3.44%* 30% 2003(1) 10.36 3.14 276 1.01 1.35 3.69 48 2002 10.62 11.19 425 1.01 1.34 4.21 19 2001 9.96 7.02 325 1.01 1.34 4.72 89 2000 9.76 9.85 26 1.02 1.39 5.24 88 1999(2) 9.35 (0.05) 1 1.05* 1.87* 4.89* 56 (1) PER SHARE NET INVESTMENT INCOME AMOUNT CALCULATED USING AVERAGE SHARES. (2) COMMENCED OPERATIONS ON JUNE 14, 1999. (3) COMMENCED OPERATIONS ON JULY 1, 2002. (4) COMMENCED OPERATIONS ON NOVEMBER 13, 2002.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2004 47 www.bishopstreetfunds.com Bishop Street Funds -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2004 (UNAUDITED) AND THE PERIODS ENDED DECEMBER 31,
DIVIDENDS AND INVESTMENT ACTIVITIES DISTRIBUTIONS FROM --------------------- ------------------ TOTAL NET ASSET NET REALIZED INVESTMENT TOTAL VALUE, NET AND UNREALIZED ACTIVITIES NET DIVIDENDS BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS --------- ------------- --------------- ---------- --------- -------- ------------- -------------------------- HAWAII MUNICIPAL BOND FUND -------------------------- Institutional Class Shares: 2004(3) $11.21 $0.22 $(0.33) $(0.11) $(0.22) $ -- $(0.22) 2003(3) 11.20 0.45 0.13 0.58 (0.45) (0.12) (0.57) 2002 10.66 0.47 0.57 1.04 (0.46) (0.04) (0.50) 2001 10.70 0.49 (0.04) 0.45 (0.49) -- (0.49) 2000 9.98 0.50 0.72 1.22 (0.50) -- (0.50) 1999 10.77 0.48 (0.75) (0.27) (0.50) (0.02) (0.52) Class A Shares: 2004(3) $11.21 $0.21 $(0.33) $(0.12) $(0.21) $ -- $(0.21) 2003(3) 11.20 0.42 0.13 0.55 (0.42) (0.12) (0.54) 2002 10.66 0.44 0.58 1.02 (0.44) (0.04) (0.48) 2001 10.69 0.46 (0.02) 0.44 (0.47) -- (0.47) 2000 9.97 0.46 0.73 1.19 (0.47) -- (0.47) 1999(1) 10.42 0.26 (0.44) (0.18) (0.25) (0.02) (0.27) ----------------- MONEY MARKET FUND ----------------- Institutional Class Shares: 2004(3) $ 1.00 $ -- $ -- $ -- $ --** $ -- $ --** 2003(3) 1.00 0.01 -- 0.01 (0.01) -- (0.01) 2002 1.00 0.01 -- 0.01 (0.01) -- (0.01) 2001 1.00 0.04 -- 0.04 (0.04) -- (0.04) 2000 1.00 0.06 -- 0.06 (0.06) -- (0.06) 1999 1.00 0.05 -- 0.05 (0.05) -- (0.05) Class A Shares: 2004(3) $ 1.00 $ -- $ -- $ -- $ --** $ -- $ --** 2003(3) 1.00 0.01 -- 0.01 (0.01) -- (0.01) 2002 1.00 0.01 -- 0.01 (0.01) -- (0.01) 2001(2) 1.00 0.02 -- 0.02 (0.02) -- (0.02) -------------------------- TREASURY MONEY MARKET FUND -------------------------- Institutional Class Shares: 2004(3) $ 1.00 $ -- $ -- $ -- $ --** $ -- $ --** 2003(3) 1.00 0.01 -- 0.01 (0.01) -- (0.01) 2002 1.00 0.01 -- 0.01 (0.01) -- (0.01) 2001 1.00 0.04 -- 0.04 (0.04) -- (0.04) 2000 1.00 0.06 -- 0.06 (0.06) -- (0.06) 1999 1.00 0.05 -- 0.05 (0.05) -- (0.05) + 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. * ANNUALIZED ** AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE. (1) COMMENCED OPERATIONS ON JUNE 14, 1999. (2) COMMENCED OPERATIONS ON MAY 1, 2001. (3) PER SHARE NET INVESTMENT INCOME AMOUNT CALCULATED USING AVERAGE SHARES.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. Bishop Street Funds 48 --------------------------------------------------------------------------------
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 --------- ------- ----------- ----------- ---------------- ------------- -------- -------------------------- HAWAII MUNICIPAL BOND FUND -------------------------- Institutional Class Shares: 2004(3) $10.88 (1.00)% $142,883 0.55%* 0.90%* 3.98%* 21% 2003(3) 11.21 5.27 150,373 0.45 0.91 4.01 38 2002 11.20 10.02 150,287 0.45 0.89 4.23 26 2001 10.66 4.24 137,206 0.45 0.88 4.54 4 2000 10.70 12.61 134,901 0.44 0.92 4.89 19 1999 9.98 (2.65) 141,341 0.41 0.99 4.79 14 Class A Shares: 2004(3) $10.88 (1.12)% $ 29,346 0.80%* 1.15%* 3.73%* 21% 2003(3) 11.21 5.01 30,975 0.70 1.16 3.76 38 2002 11.20 9.75 33,456 0.70 1.14 3.98 26 2001 10.66 4.13 30,499 0.70 1.13 4.29 4 2000 10.69 12.34 19,951 0.69 1.17 4.63 19 1999(1) 9.97 (1.76) 6,131 0.66* 1.24* 4.89* 14 ----------------- MONEY MARKET FUND ----------------- Institutional Class Shares: 2004(3) $ 1.00 0.32% $226,832 0.50%* 0.84%* 0.64%* n/a 2003(3) 1.00 0.76 182,166 0.50 0.83 0.76 n/a 2002 1.00 1.34 238,498 0.50 0.81 1.33 n/a 2001 1.00 3.86 309,935 0.50 0.82 3.71 n/a 2000 1.00 6.13 305,678 0.50 0.83 5.95 n/a 1999 1.00 4.88 284,291 0.50 0.84 4.78 n/a Class A Shares: 2004(3) $ 1.00 0.19% $ 18,539 0.75%* 1.09%* 0.39%* n/a 2003(3) 1.00 0.50 17,440 0.75 1.08 0.41 n/a 2002 1.00 1.08 188 0.75 1.06 1.10 n/a 2001(2) 1.00 1.96 500 0.75* 1.07* 2.66* n/a -------------------------- TREASURY MONEY MARKET FUND -------------------------- Institutional Class Shares: 2004(3) $ 1.00 0.31% $214,955 0.44%* 0.84%* 0.62%* n/a 2003(3) 1.00 0.74 270,365 0.44 0.83 0.75 n/a 2002 1.00 1.29 331,678 0.44 0.83 1.28 n/a 2001 1.00 3.68 372,422 0.44 0.85 3.68 n/a 2000 1.00 5.89 455,612 0.44 0.82 5.73 n/a 1999 1.00 4.65 331,064 0.44 0.85 4.56 n/a
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2004 49 www.bishopstreetfunds.com Bishop Street Funds -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION The Bishop Street Funds (the "Trust") are registered under the Investment Company Act of 1940, as amended, as an open-end, management investment company. The Bishop Street Funds consist of a series of seven funds (each a Fund, collectively the "Funds") which includes the Equity Fund, Strategic Growth Fund, Tax Managed Equity Fund, High Grade Income Fund, Hawaii Municipal Bond Fund, Money Market Fund and the Treasury Money Market Fund. Class A Shares of the Equity, High Grade Income and Hawaii Municipal Bond Funds 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. SECURITY VALUATION Bishop Street 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. If available, debt securities are priced based upon valuations provided by independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents. If a security price cannot be obtained from an Bishop Street Funds 50 -------------------------------------------------------------------------------- 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 Committee (the "Committee") designated by the Funds' Board of Trustees. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security's trading has been halted or suspended; the security has been de-listed from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; or the security's primary pricing source is not able or willing to provide a price. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee. Investment securities held by the Money Market and Treasury Money Market Funds are stated at amortized cost, which approximates market value. Under this valuation method, purchase discounts and premiums are accreted and amortized ratably to maturity and are included in interest income. SECURITY TRANSACTIONS AND INVESTMENT INCOME Security transactions are accounted for on trade date. Costs used in determining net realized capital gains and losses on the sale of securities are on the basis of the specific identification method. Interest income is recorded on the accrual basis; dividend income is recorded on ex-dividend date. DISCOUNTS AND PREMIUMS Discounts and premiums are accreted or amortized over the life of each security and are recorded as interest income for each of the Funds using the scientific interest method, which approximates the effective interest method. REPURCHASE AGREEMENTS Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. The Funds may also invest in tri-party repurchase agreements. Securities held as collateral for tri-party repurchase agreements are maintained in a segregated account by the broker's custodian bank. Provisions of repurchase agreements and procedures adopted by the Adviser (see Note 3) monitor that the market value of the collateral is sufficient in the event of default by the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited. June 30, 2004 51 www.bishopstreetfunds.com Bishop Street Funds -------------------------------------------------------------------------------- CLASSES Class-specific expenses are borne by that class of shares. Income, realized and unrealized gains/losses and non class-specific expenses are allocated to the respective class on the basis of relative daily net assets. EXPENSES Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses of the Trust are prorated to the Funds on the basis of relative net assets. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income are declared daily and paid on a monthly basis for the High Grade Income Fund, Hawaii Municipal Bond Fund, Money Market Fund and Treasury Money Market Fund. The Equity Fund, Strategic Growth Fund and Tax Managed Equity Fund declare and pay distributions from net investment income on a quarterly basis. Any net realized capital gains will be distributed at least annually for all Funds. ILLIQUID SECURITIES Valuations of illiquid securities may differ significantly from the values that would have been used had an active market value for these securities existed. 3. INVESTMENT ADVISORY AGREEMENT Investment advisory services are provided to the Funds by Bishop Street Capital Management (the "Adviser"). The Adviser is entitled to receive an annual fee of 0.74% of the average daily net assets of the Equity, Strategic Growth and the Tax Managed Equity Funds, 0.55% of the average daily net assets of the High Grade Income Fund, 0.35% of the average daily net assets of the Hawaii Municipal Bond Fund, and 0.30% of the average daily net assets of the Money Market and Treasury Money Market Funds (collectively, the "Money Market Funds"). The Adviser may from time to time waive a portion of its fee in order to limit the operating expenses of a Fund. 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. Wellington Management Company, LLP ("Wellington") serves as the investment sub-adviser for the Money Market Funds, pursuant to a sub-adviser agreement. Wellington is entitled to receive from the Adviser a fee, computed daily and paid monthly, at the annual rate of 0.075% of the average daily net assets of the Money Market Funds up to $500 million and 0.020% of the average daily net assets of the Money Market Funds in excess of $500 million. Bishop Street Funds 52 -------------------------------------------------------------------------------- 4. ADMINISTRATIVE, TRANSFER AGENT AND DISTRIBUTION SERVICES Pursuant to an administration agreement dated January 27, 1995, (the "Agreement") SEI Investments Global Funds Services ("GFS"), a wholly owned subsidiary of SEI Investments Company, acts as the Trust's Administrator. Under the terms of the Agreement, GFS is entitled to receive an annual fee of 0.20% of the average daily net assets of the Funds. GFS has voluntarily agreed to waive a portion of its fee in order to limit operating expenses. Pursuant to an agreement dated January 30, 1995, DST Systems, Inc. ("DST") acts as the Transfer Agent of the Trust. As such, DST provides transfer agency, dividend disbursing and shareholder services to the Trust. SEI Investments Distribution Co. ("SIDCO"), a wholly owned subsidiary of SEI Investments Company, acts as the Trust's Distributor pursuant to a distribution agreement dated June 10, 1999. The Funds have adopted a Distribution Plan (the "Plan") on behalf of Class A Shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plan provides that Class A Shares will bear the cost of their distribution expenses. SIDCO, as compensation for its services under the Plan, receives a distribution fee, computed daily and payable monthly, of 0.25% of the average daily net assets attributable to each Fund's Class A Shares. The Trust has adopted and entered into a shareholder service plan and agreement with SIDCO. Each Fund pays to SIDCO a shareholder servicing fee at an annual rate of 0.25% of the average daily net asset value of all shares of each Fund, which is computed daily and paid monthly. Under the shareholder service plan, SIDCO may perform, or may compensate other service providers for performing various shareholder and administrative services. 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 for shareholder services performed for the Funds. SIDCO has voluntarily agreed to waive a portion of its fee in order to limit operating expenses. Certain officers of the Trust are also officers of the Administrator. Such officers are paid no fees by the Trust. 5. SECURITIES LENDING Each Fund may lend portfolio securities to brokers, dealers and other financial organizations that meet capital and other credit requirements or other criteria established by the Board. These loans may not exceed 331/3% of the total asset value of the Fund (including the loan collateral). No Fund will lend portfolio securities to its investment adviser, sub-adviser or their affiliates June 30, 2004 53 www.bishopstreetfunds.com Bishop Street Funds -------------------------------------------------------------------------------- unless it has applied for and received specific authority to do so from the SEC. Loans of portfolio securities will be fully collateralized by cash, letters of credit or U.S. Government securities, and the collateral will be maintained in an amount equal to at least 100% of the current market value of the loaned securities by marking to market daily, although the borrower will be required to deliver collateral of 102% of the market value of borrowed securities for domestic and foreign securities, respectively. Although the risk of lending is mitigated by the collateral, the Fund could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return them. 6. INVESTMENT TRANSACTIONS The cost of security purchases and the proceeds from the sale of securities, other than temporary cash investments for the period ended June 30, 2004 are presented below for the Funds. Strategic Tax High Grade Hawaii Equity Growth Managed Income Municipal Fund Fund Equity Fund Fund Bond Fund (000) (000) (000) (000) (000) ------- ------- ----------- --------- --------- Purchases U.S. Government Securities $ -- $ -- $ -- $19,765 $ -- Other 27,540 18,844 3,718 31,106 36,211 Sales U.S. Government Securities $ -- $ -- $ -- $ 2,098 $ -- Other 35,061 13,243 6,034 33,847 44,948 7. FEDERAL TAX INFORMATION It is each Fund's intention to continue to qualify as a regulated investment company for federal income tax purposes under Subchapter M of the Internal Revenue Code, as amended, and to distribute a majority of its taxable income and net capital gains. Accordingly, no provision for federal income taxes is required. The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations which may differ from accounting principles generally accepted in the United States of America. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for the reporting period may differ from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain, as appropriate, in the period that the differences arise. Bishop Street Funds 54 -------------------------------------------------------------------------------- The tax character of dividends and distributions paid during the years ended December 31, 2003 and December 31, 2002 were as follows: Ordinary Tax Exempt Long-Term Income Income Capital Gain Total (000) (000) (000) (000) -------- -------- -------- -------- Equity Fund 2003 $ 653 $ -- $ -- $ 653 2002 420 -- -- 420 Strategic Growth Fund 2003 $ -- $ -- $ -- $ -- 2002 -- -- -- -- Tax Managed Equity Fund 2003 $ 250 $ -- $ -- $ 250 2002 33 -- -- 33 High Grade Income Fund 2003 $5,273 $ -- $2,577 $7,850 2002 5,850 -- -- 5,850 Hawaii Municipal Bond Fund 2003 $ 14 $7,326 $1,872 $9,212 2002 -- 7,582 733 8,315 Money Market Fund 2003 $1,740 $ -- $ -- $1,740 2002 3,690 -- -- 3,690 Treasury Money Market Fund 2003 $2,386 $ -- $ -- $2,386 2002 4,508 -- -- 4,508 June 30, 2004 55 www.bishopstreetfunds.com Bishop Street Funds -------------------------------------------------------------------------------- As of December 31, 2003, the components of Distributable Earnings (Accumulated Losses) on a tax basis were as follows:
Treasury Strategic Tax High Grade Hawaii Money Money Equity Growth Managed Income Municipal Market Market Fund Fund Equity Fund Fund Bond Fund Fund Fund (000) (000) (000) (000) (000) (000) (000) --------- --------- -------- -------- --------- ------- ------- Undistributed ordinary income $ 9 $ -- $ 7 $ 425 $ 72 $ 117 $ 172 Undistributed tax exempt income -- -- -- -- 5 -- -- Undistributed long-term capital gain -- -- -- 11 130 -- -- Capital loss carryforwards expiring: Dec. 2005 -- -- -- -- -- (2) -- Dec. 2008 -- -- -- -- -- (2) -- Dec. 2009 (38,258) -- -- -- -- (18) -- Dec. 2010 (25,686) (1,049) -- -- -- -- -- Dec. 2011 (1,697) -- -- -- -- -- -- Post-October Losses -- -- -- (57) -- -- -- Other Temporary Differences -- (22) (21) (423) 31 (118) (148) Unrealized appreciation 15,831 7,922 6,123 5,608 12,456 -- --
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. During the year ended December 31, 2003 the Strategic Growth Fund, the High Grade Income Fund and the Treasury Money Market Fund, utilized capital loss carryforwards of $310,043, $2,068,477 and $11,795, respectively, to offset realized capital gains. Post-October losses represent losses realized on investment transactions from November 1, 2003 through December 31, 2003 that, in accordance with Federal income tax regulations the Funds have elected to defer and treat as having arisen in the following fiscal year. Bishop Street Funds 56 -------------------------------------------------------------------------------- The aggregate gross unrealized appreciation and depreciation of securities held by the Equity Fund, Strategic Growth Fund, Tax Managed Equity Fund, High Grade Income Fund, and Hawaii Municipal Bond Fund for Federal income tax purposes at June 30, 2004 were as follows:
Strategic Tax High Grade Hawaii Equity Growth Managed Income Municipal Fund Fund Equity Fund Fund Bond Fund (000) (000) (000) (000) (000) -------- ------- ------- -------- -------- Federal Tax Cost $147,929 $46,008 $27,424 $177,256 $163,505 -------- ------- ------- -------- -------- Gross Unrealized Appreciation 21,137 9,532 6,404 3,292 7,392 Gross Unrealized Depreciation (8,095) (799) (225) (1,616) (891) -------- ------- ------- -------- -------- Net Unrealized Appreciation $ 13,042 $ 8,733 $ 6,179 $ 1,676 $ 6,501 ======== ======= ======= ======== ========
8. CONCENTRATION OF CREDIT RISK The Hawaii Municipal Bond Fund invests primarily in debt instruments in the state of Hawaii. The issuers' ability to meet their obligations may be affected by economic developments in that state. 9. OTHER In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be established; however, based on experience, the risk of loss from such claim is considered remote. June 30, 2004 57 www.bishopstreetfunds.com Bishop Street Funds -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS
TERM OF POSITION OFFICE AND PERSONAL HELD WITH THE LENGTH OF INFORMATION1 COMPANY TIME SERVED2 ----------------------------------------- ------------- ------------ INDEPENDENT BOARD MEMBERS [PHOTO OMITTED] MR. MARTIN ANDERSON Trustee Since 1994 81 [PHOTO OMITTED] MR. PETER F. SANSEVERO Trustee Since 1999 71 [PHOTO OMITTED] MR. MANUEL R. SYLVESTER Trustee Since 1994 74 [PHOTO OMITTED] DR. JOYCE S. TSUNODA Trustee Since 1994 66
Bishop Street Funds 58 (UNAUDITED) --------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN BISHOP STREET OTHER FUNDS COMPLEX DIRECTORSHIPS PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY DURING PAST 5 YEARS BOARD MEMBER3 BOARD MEMBER4 --------------------------------------------------- ------------- ------------- PARTNER -- Goodsill, Anderson, Quinn & Stifel since 1951 7 None REGIONAL DIRECTOR OF THE NORTHWESTERN REGION AND 7 None FIRST VICE PRESIDENT -- Merrill Lynch (1958-1997) RETIRED SINCE 1992 7 None VICE PRESIDENT FOR INTERNATIONAL EDUCATION -- University of Hawaii System 7 None since January 2003 CHANCELLOR FOR COMMUNITY COLLEGES -- University of Hawaii since 1983 SENIOR VICE PRESIDENT -- University of Hawaii 1989-2003 VICE PRESIDENT, INTERNATIONAL EDUCATION, University of Hawaii, 2003-present
June 30, 2004 59 www.bishopstreetfunds.com Bishop Street Funds -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS
TERM OF POSITION(S) OFFICE AND PERSONAL HELD WITH THE LENGTH OF INFORMATION1 COMPANY TIME SERVED2 ----------------------------------------- ------------- ------------ INTERESTED BOARD MEMBERS5 [PHOTO OMITTED] MR. PHILLIP H. CHING Trustee Since 1994 73 [PHOTO OMITTED] President and MR. ROBERT A. NESHER Chairman of Since 1998 58 the Board of Trustees [PHOTO OMITTED] MR. JOHN TSUI Trustee 66 OFFICERS Peter J. Golden Treasurer 2 40 and Controller [PHOTO OMITTED] John Munch* Vice President 2 33 and Secretary
Bishop Street Funds 60 (UNAUDITED) --------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN BISHOP STREET OTHER FUNDS COMPLEX DIRECTORSHIPS PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY DURING PAST 5 YEARS BOARD MEMBER3 BOARD MEMBER4 --------------------------------------------------- ------------- ------------- RETIRED SINCE 1996 7 None VICE CHAIRMAN -- First Hawaiian Bank (1968-1996) TRUSTEE OF: THE ADVISORS' INNER CIRCLE FUND, THE ARBOR FUND, EXPEDITION CURRENTLY PERFORMS VARIOUS SERVICES ON BEHALF OF 7 FUNDS, SEI ASSET ALLOCATION TRUST, SEI SEI INVESTMENTS FOR WHICH MR. NESHER IS COMPENSATED. DAILY INCOME TRUST, SEI INDEX FUNDS, EXECUTIVE VICE PRESIDENT -- SEI Investments (1986-1994) SEI INSTITUTIONAL INVESTMENTS TRUST, DIRECTOR AND EXECUTIVE VICE PRESIDENT OF THE ADVISER, SEI INSTITUTIONAL MANAGED TRUST, THE ADMINISTRATOR AND THE DISTRIBUTOR (1981-1994) SEI INSTITUTIONAL INTERNATIONAL TRUST, SEI LIQUID ASSET TRUST AND SEI TAX EXEMPT TRUST. PRESIDENT, CHIEF OPERATING OFFICER, DIRECTOR -- First 7 None Hawaiian Bank (1994-2002) VICE CHAIRMAN, CHIEF CREDIT OFFICER -- BancWest Corporation (2000-2002) DIRECTOR -- Bank of the West (2000-2002) Director, SEI Investments, Fund Accounting and N/A N/A Administration since June 2001. Vice President, Fund Administration, J.P. Morgan Chase & Co., 2000-2001; Vice President, Fund & Pension Accounting, Chase Manhattan Bank, 1997-2000. Vice President and Secretary of the N/A N/A Administrator and Distributor since November 2001; Associate at Howard Rice Nemorovoski Canady Falk & Rabin, 1998-2001; Associate at Seward & Kissel, 1996-1998.
June 30, 2004 61 www.bishopstreetfunds.com Bishop Street Funds --------------------------------------------------------------------------------
TERM OF POSITION(S) OFFICE AND PERSONAL HELD WITH THE LENGTH OF INFORMATION1 COMPANY TIME SERVED2 ----------------------------------------- ------------- ------------ INDEPENDENT BOARD MEMBERS5 William E. Zitelli Vice President and 3 36 Secretary Lydia A. Gavalis Vice President and 5 40 Assistant Secretary Timothy D. Barto Vice President and 3 36 Assistant Secretary Christine M. McCullough Vice President and 3 44 Assistant Secretary Lori Foo Vice President and 2 47 Assistant Secretary John Munera Vice President and 1 41 Assistant Secretary * AS OF AUGUST 13, 2004, MR. MUNCH TENDERED HIS RESIGNATION AS VICE PRESIDENT AND SECRETARY OF THE BISHOP STREET FUNDS. 1 EACH TRUSTEE MAY BE CONTACTED BY WRITING TO THE TRUSTEE C/O BISHOP STREET FUNDS, PO BOX 3708, HONOLULU, HI 96811. EACH OFFICER MAY BE CONTACTED BY WRITING TO THE OFFICER C/O SEI INVESTMENTS, ONE FREEDOM VALLEY DRIVE, OAKS, PA 19456. 2 EACH TRUSTEE SHALL HOLD OFFICE DURING THE LIFETIME OF THIS TRUST UNTIL THE ELECTION AND QUALIFICATION OF HIS OR HER SUCCESSOR, OR UNTIL HE OR SHE SOONER DIES, RESIGNS OR IS REMOVED IN ACCORDANCE WITH THE TRUST'S DECLARATION OF TRUST. 3 THE "BISHOP STREET FUNDS COMPLEX" CONSISTS OF ALL REGISTERED INVESTMENT COMPANIES FOR WHICH BISHOP STREET CAPITAL MANAGEMENT SERVES AS INVESTMENT ADVISER. AS OF JUNE 30, 2004 THE BISHOP STREET FUNDS COMPLEX CONSISTED OF 7 FUNDS.
Bishop Street Funds 62 (UNAUDITED) --------------------------------------------------------------------------------
NUMBER OF PORTFOLIOS IN BISHOP STREET OTHER FUNDS COMPLEX DIRECTORSHIPS PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY DURING PAST 5 YEARS BOARD MEMBER3 BOARD MEMBER4 --------------------------------------------------- ------------- ------------- Vice President and Assistant Secretary of SEI N/A N/A Investments Global Funds Services since 2000; Vice President, Merrill Lynch & Co. Asset Management Group from 1998-2000; Associate at Pepper Hamilton LLP from 1997-1998. Vice President and Assistant Secretary of SEI N/A N/A Investments and SEI Investments Global Funds Services since 1998; Assistant General Counsel and Director of Arbitration, Philadelphia Stock Exchange from 1989-1998. Vice President and Assistant Secretary of SEI N/A N/A Investments Global Funds Services since 1999; Associate, Dechert (law firm) from 1997-1999. Vice President and Assistant Secretary of SEI N/A N/A Investments Global Funds Services since 1999; Associate at White and Williams LLP from 1991-1999. Assistant Vice President of First Hawaiian Bank since N/A N/A 2000; Employed by First Hawaiian Bank since 1994. Middle Office Compliance Officer of the Administrator N/A N/A and Distributor since 2000; Supervising Examiner at the Federal Reserve Bank of Philadelphia from 1998-2000. 4 DIRECTORSHIPS OF COMPANIES ARE REQUIRED TO REPORT TO THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934 (I.E., "PUBLIC COMPANIES") OR OTHER INVESTMENT COMPANIES REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED. 5 MESSRS. CHING, NESHER AND TSUI ARE TRUSTEES WHO MAY BE DEEMED TO BE AN "INTERESTED PERSON" OF THE TRUST, AS THAT TERM IS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED. FOR MORE INFORMATION REGARDING THE TRUSTEES AND OFFICERS, PLEASE REFER TO THE STATEMENT OF ADDITIONAL INFORMATION, WHICH IS AVAILABLE UPON REQUEST BY CALLING 1-800-262-9565.
June 30, 2004 63 www.bishopstreetfunds.com -------------------------------------------------------------------------------- NOTES [BACKGROUND GRAPHIC OMITTED] INVESTMENT ADVISER BISHOP STREET CAPITAL MANAGEMENT HONOLULU, HI 96813 ADMINISTRATOR SEI INVESTMENTS GLOBAL FUNDS SERVICES OAKS, PA 19456 DISTRIBUTOR SEI INVESTMENTS DISTRIBUTION CO. OAKS, PA 19456 TRANSFER AGENT DST SYSTEMS, INC. KANSAS CITY, MO 64141 CUSTODIAN UNION BANK OF CALIFORNIA, N.A. SAN FRANCISCO, CA 94101 LEGAL COUNSEL MORGAN, LEWIS & Bockius LLP Philadelphia, PA 19103 Auditors PricewaterhouseCoopers LLP Philadelphia, PA 19103 [BISHOP STREET FUNDS LOGO OMITTED] FOR MORE INFORMATION ABOUT BISHOP STREET FUNDS, CALL 1-800-262-9565 OR YOUR INVESTMENT SPECIALIST VISIT US ONLINE AT WWW.BISHOPSTREETFUNDS.COM -------------------------------------------------------------------------------- [BISHOP STREET FUNDS LOGO OMITTED] Bishop Street Funds P.O. Box 3708 Honolulu, HI 96811 THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF BISHOP STREET FUNDS' SHAREHOLDERS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. SHARES OF BISHOP STREET FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY FIRST HAWAIIAN BANK OR ANY OF ITS AFFILIATES. SUCH SHARES ARE ALSO NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENT IN SHARES OF MUTUAL FUNDS INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE BISHOP STREET FUNDS ARE DISTRIBUTED BY SEI INVESTMENTS DISTRIBUTION CO., WHICH IS NOT AFFILIATED WITH FIRST HAWAIIAN BANK, BANK OF THE WEST OR BANCWEST CORPORATION. BANCWEST CORPORATION IS A WHOLLY-OWNED SUBSIDIARY OF BNP PARIBAS. BSF-SA-004-1000 -------------------------------------------------------------------------------- ITEM 2. CODE OF ETHICS. Not applicable for semi-annual report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semi-annual report. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semi-annual report. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASERS OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. ITEM 10. CONTROLS AND PROCEDURES. (a) The certifying officers, whose certifications are included herewith, have evaluated the registrant's disclosure controls and procedures within 90 days of the filing date of this report. In their opinion, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrants internal control over financial reporting. ITEMS 11. EXHIBITS. (a)(1) Not applicable for semi-annual report. (a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), is filed herewith. (b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an exhibit. ------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of the securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Bishop Street Funds By (Signature and Title)* /s/ Robert A. Nesher --------------------- Robert A. Nesher, President Date 08/25/04 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Robert A. Nesher -------------------- Robert A. Nesher, President Date 08/25/04 By (Signature and Title)* /s/ Peter J. Golden ------------------- Peter J. Golden, Treasurer and Controller Date 08/25/04 * Print the name and title of each signing officer under his or her signature.