-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JOYM1og9JuEB9tR8QjgggAJzjDtiWt8gnnGWbDMOY8PboaIO8NS0rZE1JnJQmYE+ 2C+h999LWdhFuRQ6PBtNfQ== 0000950123-10-084415.txt : 20100908 0000950123-10-084415.hdr.sgml : 20100908 20100908111954 ACCESSION NUMBER: 0000950123-10-084415 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20100630 FILED AS OF DATE: 20100908 DATE AS OF CHANGE: 20100908 EFFECTIVENESS DATE: 20100908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BISHOP STREET FUNDS CENTRAL INDEX KEY: 0000925737 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-08572 FILM NUMBER: 101061544 BUSINESS ADDRESS: STREET 1: 1FREEDOM VALLEY DRIVE CITY: OAKS STATE: PA ZIP: 19087-1693 BUSINESS PHONE: 610 767-3204 MAIL ADDRESS: STREET 1: 1FREEDOM VALLEY DRIVE CITY: OAKS STATE: PA ZIP: 19087-1693 0000925737 S000005796 GOVERNMENT MONEY MARKET FUND C000015928 CLASS I SHARES BISXX C000015929 CLASS A SHARES BSAXX 0000925737 S000005797 HAWAII MUNICIPAL BOND FUND C000015930 CLASS I SHARES BSHIX C000015931 CLASS A SHARES BHIAX 0000925737 S000005798 HIGH GRADE INCOME FUND C000015932 CLASS I SHARES BSHGX 0000925737 S000005800 TREASURY MONEY MARKET FUND C000015934 CLASS I SHARES BSTXX 0000925737 S000005801 STRATEGIC GROWTH FUND C000015935 CLASS I SHARES BSRIX 0000925737 S000011779 DIVIDEND VALUE FUND C000032215 CLASS I SHARES N-CSRS 1 g57637_bishopstreet-ncsrs.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM N-CSRS ---------- CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES INVESTMENT COMPANY ACT FILE NUMBER 811-08572 BISHOP STREET FUNDS (Exact name of registrant as specified in charter) ---------- 101 Federal Street Boston, MA 02109 (Address of principal executive offices) SEI Investments One Freedom Valley Drive Oaks, PA 19456 (Name and address of agent for service) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-262-9565 DATE OF FISCAL YEAR END: DECEMBER 31, 2010 DATE OF REPORTING PERIOD: JUNE 30, 2010 ITEM 1. REPORTS TO STOCKHOLDERS. (GRAPHIC) BISHOP STREET FUNDS SEMI-ANNUAL REPORT JUNE 30, 2010 STRATEGIC GROWTH FUND DIVIDEND VALUE FUND HIGH GRADE INCOME FUND HAWAII MUNICIPAL BOND FUND GOVERNMENT MONEY MARKET FUND INVESTMENT ADVISER BISHOP STREET CAPITAL MANAGEMENT (BISHOP STREET FUNDS LOGO) The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q within sixty days after the end of the period. The Funds' Forms N-Q are available on the Commission's website at http://www.sec.gov, and may be reviewed and copied at the Commission's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. A description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities is available without charge, by calling 1-800-262-9565 or by visiting the Commission's website at http://www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge, by calling 1-800-262-9565 or by visiting the Funds' website at http://www.bishopstreetfunds.com or the website of the Securities and Exchange Commission. BISHOP STREET FUNDS TABLE OF CONTENTS LETTER TO SHAREHOLDERS .................................................. 2 SCHEDULES OF INVESTMENTS Strategic Growth Fund ................................................ 4 Dividend Value Fund .................................................. 7 High Grade Income Fund ............................................... 12 Hawaii Municipal Bond Fund ........................................... 20 Government Money Market Fund ......................................... 31 STATEMENTS OF ASSETS AND LIABILITIES .................................... 33 STATEMENTS OF OPERATIONS ................................................ 35 STATEMENTS OF CHANGES IN NET ASSETS ..................................... 37 FINANCIAL HIGHLIGHTS .................................................... 40 NOTES TO FINANCIAL STATEMENTS ........................................... 44 DISCLOSURE OF FUND EXPENSES ............................................. 58 APPROVAL OF INVESTMENT ADVISORY AGREEMENTS .............................. 60 SHAREHOLDER VOTING RESULTS .............................................. 67
1 BISHOP STREET FUNDS LETTER TO SHAREHOLDERS (PHOTO) Dear Shareholder: The New Year began on a very promising note with global equity markets continuing their advance following a very strong finish in 2009. But just as the wounds of the credit crisis appeared to be on the mend, another round of problems wreaked havoc on the markets ending an extended series of quarterly gains in the U.S. and foreign equity markets. As a result, stocks fell sharply in the second quarter as investors once again rushed for safety, renewing their focus on risk and volatility. In retrospect, there was no shortage of concerns for the markets with the Greek debt crisis spreading fear throughout Europe, the massive spill in the Gulf of Mexico spewing oil seemingly without end, a "flash crash" that raised questions about market structure and risk controls, and significant reform in the financial sector that would surely change the face of the industry as we now know it today. DR. JEKYLL AND MR. HYDE? The confluence of events as well as a host of mixed readings on the U.S. economy produced some strong headwinds for the equity markets, yet they managed to hold up reasonably well in the first six months of the year. Starting out the year with a respectable +5.4% return in the first quarter, the S&P 500 index declined - -11.4% in the second quarter, to finish the first six months of 2010 with a loss of -6.7%. Meanwhile, the fixed income markets were the beneficiaries of the uncertainty that plagued the equity markets as investors sought safety in U.S. treasuries and the dollar. As a result, the bond markets gained +5.3% year-to-date with U.S. treasuries and corporate bonds leading the way. Bad news for equity markets proved to be a boon for fixed income investors. And despite ongoing concerns about the financial challenges facing municipal governments, municipal bonds generated a +2.0% return in the latest quarter and a +3.3% return year-to-date. Bishop Street Funds 2 (BISHOP STREET FUNDS LOGO) WHAT LIES AHEAD? It is difficult to predict what the future might hold for investors given the many issues that exist; however,there are reasons to be optimistic. First, interest rates are extremely low and are likely to lower borrowing costs for businesses and individuals, providing incentive to invest. Significant government stimulus remains in place and should continue to work its way through the system, pointing to positive economic expansion in the months ahead. Further, equity valuations appear reasonable when compared to historical averages. The bottom line is that while uncertainty prevails, this situation is not uncommon when it comes to world of investing. And while investors cannot control the outcome of these events, they CAN control their investment plan, asset mix, and risk exposure to ensure that their investment portfolio is consistent with their life goals and objectives. In this regard, the Bishop Street Funds continue to offer selected stock, bond and money market alternatives that we believe should be included in your overall investment program. The Dividend Value Fund and Strategic Growth Fund combine to offer attractive income potential and growth potential. The High Grade Bond and Hawaii Municipal Bond funds offer high quality, fixed income securities that continue to provide attractive income and stability, while the Government Money Market fund continues to provide safety and liquidity. Thank you for your continued trust and confidence in the Bishop Street Funds. Sincerely, /s/ Michael K. Hirai Michael K. Hirai, CFA, CPA President and Chief Investment Officer July 20, 2010 THE S&P 500 COMPOSITE INDEX IS A WIDELY RECOGNIZED INDEX OF 500 STOCKS DESIGNED TO MIMIC THE OVERALL U.S. EQUITY MARKET'S INDUSTRY WEIGHTINGS. THIS REPRESENTS THE MANAGEMENT'S ASSESSMENT OF THE FUNDS AND THE MARKET ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE READER AS RESEARCH OR INVESTMENT ADVICE. June 30, 2010 www.bishopstreetfunds.com 3 Strategic Growth Fund (UNAUDITED) TOP TEN EQUITY HOLDINGS+
Percentage of Investments ------------- 1. Tyco International 2.2% 2. Yum! Brands 2.2% 3. AmerisourceBergen, Cl A 2.2% 4. Texas Instruments 2.2% 5. Stericycle 2.1% 6. ACE 2.1% 7. General Mills 2.1% 8. Varian Medical Systems 2.1% 9. Becton Dickinson 2.1% 10. Iron Mountain 2.1%
SECTOR WEIGHTINGS+ (BAR CHART) Information Technology 27.7% Industrials 20.1% Consumer Discretionary 19.4% Health Care 14.5% Financials 8.0% Energy 7.6% Consumer Staples 2.1% Cash Equivalents 0.6%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2010
Value Shares (000) - ------------ -------------- COMMON STOCK+ -- 99.5% CONSUMER DISCRETIONARY -- 19.4% 23,000 Bed Bath & Beyond (A) $ 853 25,883 Best Buy 876 26,600 Coach 972 49,900 GameStop, Cl A (A) 938 33,500 Home Depot 940 19,700 Kohl's (A) 936 5,600 priceline.com (A) 989 20,300 Target 998 23,500 TJX 986 28,000 Yum! Brands 1,093 -------------- 9,581 --------------
Bishop Street Funds 4 Strategic Growth Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Value Shares (000) - ------------ -------------- CONSUMER STAPLES -- 2.1% 29,000 General Mills $ 1,030 -------------- ENERGY -- 7.6% 14,100 Cimarex Energy 1,010 28,000 National Oilwell Varco 926 11,900 Occidental Petroleum 918 23,400 Southwestern Energy (A) 904 -------------- 3,758 -------------- FINANCIALS -- 8.0% 20,100 ACE 1,035 25,700 American Express 1,020 7,100 Goldman Sachs Group 932 36,700 Lazard, Cl A 980 -------------- 3,967 -------------- HEALTH CARE -- 14.5% 34,400 AmerisourceBergen, Cl A 1,092 19,200 Amgen (A) 1,010 15,200 Becton Dickinson 1,028 20,800 Express Scripts, Cl A (A) 978 20,600 Thermo Fisher Scientific (A) 1,010 19,700 Varian Medical Systems (A) 1,030 15,500 Waters (A) 1,003 -------------- 7,151 -------------- INDUSTRIALS -- 20.2% 17,800 Deere 991 22,900 Dover 957 45,500 Iron Mountain 1,022 21,100 ITT 948 19,300 Joy Global 967 15,900 Stericycle (A) 1,043 31,100 Tyco International 1,096 13,700 Union Pacific 952 15,000 United Technologies 973 10,200 W.W.Grainger 1,014 -------------- 9,963 --------------
June 30, 2010 www.bishopstreetfunds.com 5 Strategic Growth Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Value Shares (000) - ------------ -------------- INFORMATION TECHNOLOGY -- 27.7% 25,600 Amphenol, Cl A $ 1,006 3,900 Apple (A) 981 29,300 Broadcom, Cl A 966 14,800 Cree (A) 888 14,500 Factset Research Systems 971 2,050 Google, Cl A (A) 912 22,600 Hewlett-Packard 978 8,200 International Business Machines 1,013 26,100 NetApp (A) 974 46,000 Oracle 987 35,000 Red Hat (A) 1,013 65,600 Symantec (A) 911 46,200 Texas Instruments 1,076 33,000 Western Digital (A) 994 -------------- 13,670 -------------- TOTAL COMMON STOCK (Cost $48,324) 49,120 -------------- CASH EQUIVALENTS (B) -- 0.6% 144,535 Dreyfus Cash Management Fund, Institutional Shares, 0.137% 145 144,535 Fidelity Institutional Money Market Portfolio, Institutional Shares, 0.250% 145 -------------- TOTAL CASH EQUIVALENTS (Cost $290) 290 -------------- TOTAL INVESTMENTS (Cost $48,614) -- 100.1% $ 49,410 ==============
PERCENTAGES ARE BASED ON NET ASSETS OF $49,377 ($ THOUSANDS). + MORE NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD SECTORS ARE UTILIZED FOR REPORTING. (A) NON-INCOME PRODUCING SECURITY. (B) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010. CL -- CLASS COST FIGURES ARE SHOWN IN THOUSANDS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 6 Dividend Value Fund (UNAUDITED) TOP TEN EQUITY HOLDINGS+
Percentage of Investments ------------- 1. AT&T 3.2% 2. Merck 3.0% 3. International Business Machines 2.8% 4. Verizon Communications 2.7% 5. Exxon Mobil 2.6% 6. JPMorgan Chase 2.2% 7. Philip Morris International 2.2% 8. Bristol-Myers Squibb 2.2% 9. Microsoft 2.0% 10. McDonald's 2.0%
SECTOR WEIGHTINGS (BAR CHART) Financials 14.3% Consumer Staples 12.3% Energy 11.2% Industrials 10.5% Information Technology 10.4% Health Care 10.2% Consumer Discretionary 8.7% Telecommunication Services 6.1% Materials 5.7% Utilities 5.0% Cash Equivalents 3.9% Exchange Traded Fund 1.7%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING. SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2010
Value Shares (000) - ------------ -------------- COMMON STOCK -- 93.9% CONSUMER DISCRETIONARY -- 8.6% 23,100 Foot Locker (B) $ 292 13,900 Gap 270 23,000 Home Depot 646 14,500 McDonald's 955 8,500 McGraw-Hill 239
June 30, 2010 www.bishopstreetfunds.com 7 Dividend Value Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Value Shares (000) - ------------ -------------- CONSUMER DISCRETIONARY -- (CONTINUED) 12,500 Meredith $ 389 7,500 Nordstrom (B) 242 10,500 Staples 200 20,700 Time Warner 599 6,700 TJX (B) 281 -------------- 4,113 -------------- CONSUMER STAPLES -- 11.9% 24,800 Altria Group (B) 497 3,900 Coca-Cola Co. 196 7,400 Diageo PLC ADR 464 10,000 General Mills 355 13,500 HJ Heinz (B) 584 3,600 JM Smucker 217 8,800 Kimberly-Clark 533 8,800 Kraft Foods, Cl A 246 3,300 PepsiCo 201 23,000 Philip Morris International 1,054 11,900 Procter & Gamble 714 12,100 Wal-Mart Stores 582 -------------- 5,643 -------------- ENERGY -- 11.2% 13,100 Chevron 889 7,000 ConocoPhillips 344 16,500 EnCana 501 21,700 Exxon Mobil 1,238 4,100 Murphy Oil 203 5,900 Occidental Petroleum 455 18,000 Royal Dutch Shell PLC ADR, Cl A (B) 904 11,800 Smith International 444 7,225 Transocean (A) 335 -------------- 5,313 -------------- FINANCIALS -- 14.3% 16,800 American Express 667 15,300 Arthur J Gallagher (B) 373 6,300 Chubb 315 14,700 Eaton Vance 406 11,800 Federated Investors, Cl B (B) 244 28,800 JPMorgan Chase 1,055 11,900 MetLife 449 15,000 Morgan Stanley 348
Bishop Street Funds 8 Dividend Value Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Value Shares (000) - ------------ -------------- FINANCIALS -- (CONTINUED) 10,700 Northern Trust $ 500 18,900 People's United Financial 255 7,700 PNC Financial Services Group 435 2,500 RenaissanceRe Holdings (B) 141 6,100 T Rowe Price Group (B) 271 18,200 Unum Group (B) 395 19,200 US Bancorp 429 20,700 Wells Fargo 530 -------------- 6,813 -------------- HEALTH CARE -- 10.2% 16,300 Abbott Laboratories 763 41,100 Bristol-Myers Squibb 1,025 13,900 Johnson & Johnson 821 40,900 Merck 1,430 56,900 Pfizer 811 -------------- 4,850 -------------- INDUSTRIALS -- 10.5% 7,900 Deere 440 9,600 Dover (B) 401 8,600 Emerson Electric 376 42,100 General Electric 607 15,000 Honeywell International 585 5,200 Illinois Tool Works 215 7,200 Norfolk Southern 382 6,800 Parker Hannifin 377 12,100 Raytheon 586 9,200 United Technologies 597 14,300 Waste Management 447 -------------- 5,013 -------------- INFORMATION TECHNOLOGY -- 10.4% 11,900 Automatic Data Processing 479 7,100 Canon ADR (B) 265 11,800 Hewlett-Packard 511 47,100 Intel 916 10,800 International Business Machines 1,333 4,700 Linear Technology (B) 131 41,700 Microsoft 959 15,500 Texas Instruments (B) 361 -------------- 4,955 --------------
June 30, 2010 www.bishopstreetfunds.com 9 Dividend Value Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Value Shares (000) - ------------ -------------- MATERIALS -- 5.7% 4,700 BHP Billiton ADR (B) $ 291 8,000 EI Du Pont de Nemours 277 6,900 International Flavors & Fragrances 293 12,200 Nucor (B) 467 10,100 RPM International 180 13,000 Sherwin-Williams (B) 899 10,500 Sonoco Products 320 -------------- 2,727 -------------- TELECOMMUNICATION SERVICES -- 6.1% 62,200 AT&T (B) 1,505 45,000 Verizon Communications 1,261 13,300 Windstream (B) 140 -------------- 2,906 -------------- UTILITIES -- 5.0% 7,400 American Electric Power (B) 239 2,000 Entergy 143 4,000 Exelon 152 7,000 FirstEnergy (B) 246 7,600 National Fuel Gas 349 4,300 NextEra Energy (B) 210 5,800 PG&E (B) 239 9,900 PPL (B) 247 9,200 Public Service Enterprise Group 288 5,500 Sempra Energy 257 -------------- 2,370 -------------- TOTAL COMMON STOCK (Cost $47,226) 44,703 -------------- EXCHANGE TRADED FUND -- 1.6% 7,600 SPDR Trust, Ser A (B) 785 -------------- TOTAL EXCHANGE TRADED FUND (Cost $933) 785 -------------- PREFERRED STOCK -- 0.4% CONSUMER STAPLES -- 0.4% 5,250 Archer-Daniels-Midland (B) 190 -------------- TOTAL PREFERRED STOCK (Cost $230) 190 --------------
Bishop Street Funds 10 Dividend Value Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Shares/Face Amount Value (000) (000) - ------------ -------------- CASH EQUIVALENTS (D) -- 3.9% 930,120 Dreyfus Cash Management Fund, Institutional Shares, 0.137% $ 930 930,120 Fidelity Institutional Money Market Portfolio, Institutional Shares, 0.250% 930 -------------- TOTAL CASH EQUIVALENTS (Cost $1,860) 1,860 -------------- REPURCHASE AGREEMENTS (C) -- 18.0% $ 1,294 Bank of America 0.190%, dated 06/30/10, to be repurchased on 07/01/10, repurchase price $1,293,704 (collateralized by a FHLMC obligation, par value $1,305,750, 4.500%, 10/01/39, with a total market value of $1,319,571) 1,294 7,270 JPMorgan 0.240%, dated 06/30/10, to be repurchased on 07/01/10, repurchase price $7,270,387 (collateralized by a CLCT obligation, par value $8,167,845, 0.011% - 0.040%, 03/01/42, with a total market value of $7,634,283) 7,270 -------------- TOTAL REPURCHASE AGREEMENTS (Cost $8,564) 8,564 -------------- TOTAL INVESTMENTS (Cost $58,813) -- 117.8% $ 56,102 ==============
PERCENTAGES ARE BASED ON NET ASSETS OF $47,607($ THOUSANDS). (A) NON-INCOME PRODUCING SECURITY. (B) THIS SECURITY OR PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2010. THE TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2010 WAS $8,274 ($ THOUSANDS). (C) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES ON LOAN. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2010 WAS $8,564 ($ THOUSANDS). (D) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010. ADR -- AMERICAN DEPOSITARY RECEIPT CL -- CLASS CLCT -- COLLEGE LOAN CORPORATE TRUST FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION PLC -- PUBLIC LIMITED COMPANY SER -- SERIES SPDR -- STANDARD & POOR'S DEPOSITORY RECEIPTS COST FIGURES ARE SHOWN IN THOUSANDS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2010 www.bishopstreetfunds.com 11 High Grade Income Fund (UNAUDITED) TOP TEN HOLDINGS+
Percentage Coupon Maturity of Rate Date Investments ------ -------- ----------- 1. Countrywide Asset-Backed Certificates, Ser 12, Cl 1A4 5.323% 02/25/36 2.4% 2. Citibank Credit Card Issuance Trust, Ser A3, Cl A3 2.700% 06/24/13 2.1% 3. Ford Credit Auto Owner Trust, Ser E, Cl A3 1.510% 01/15/14 2.0% 4. Dow Chemical 8.550% 05/15/19 1.9% 5. Xerox 8.250% 05/15/14 1.8% 6. GSR Mortgage Loan Trust, Ser 4, Cl 3A2 2.150% 04/25/32 1.8% 7. Rio Tinto Finance USA 9.000% 05/01/19 1.8% 8. General Electric Capital MTN, Ser A 5.450% 01/15/13 1.7% 9. IBM 8.375% 11/01/19 1.6% 10. Cellco Partnership 5.550% 02/01/14 1.4%
SECTOR WEIGHTINGS+ (BAR CHART) Banks 15.7% U.S. Government Agency Obligations 13.2% Asset-Backed Security 12.9% Information Technology 8.4% Financials 8.2% U.S. Treasury Obligations 7.6% Industrials 6.7% Materials 5.3% Consumer Discretionary 5.0% U.S. Government Mortgage-Backed Obligations 4.1% Consumer Staples 3.9% Telecommunication Services 3.0% Municipal Bond 3.0% Health Care 2.5% Cash Equivalents 0.5%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES LENDING. SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2010
Face Amount Value (000) (000) - ------------ -------------- CORPORATE OBLIGATIONS -- 58.2% BANKS -- 15.6% Australia & New Zealand Banking Group (A) (D) $ 1,500 0.819%, 06/18/12 $ 1,500 Bank of America MTN 1,100 7.375%, 05/15/14 1,233
Bishop Street Funds 12 High Grade Income Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- BANKS -- (CONTINUED) Bank of Oklahoma (A) (E) $ 500 5.750%, 05/15/17 $ 478 Barclays Bank PLC 1,150 6.750%, 05/22/19 1,279 500 5.200%, 07/10/14 528 Bear Stearns LLC (C) 1,500 7.250%, 02/01/18 1,752 BHP Billiton Finance 950 5.250%, 12/15/15 1,076 Citigroup 1,500 6.500%, 08/19/13 1,599 Goldman Sachs Group 1,300 7.500%, 02/15/19 1,453 JPMorgan Chase Capital XXVII, Ser AA 1,000 7.000%, 11/01/39 1,017 JPMorgan Chase, Ser AI (B) 1,400 5.875%, 06/13/16 1,532 Morgan Stanley 1,300 7.300%, 05/13/19 1,398 1,400 4.200%, 11/20/14 1,382 Rio Tinto Finance USA 1,700 9.000%, 05/01/19 2,231 Wells Fargo Bank (A) 1,600 0.646%, 05/16/16 1,469 -------------- 19,927 -------------- CONSUMER DISCRETIONARY -- 5.0% Comcast 1,000 6.500%, 01/15/17 1,146 Home Depot 700 5.875%, 12/16/36 718 McDonald's MTN, Ser H 1,525 4.125%, 06/01/13 1,643 Time Warner Cable 1,350 8.250%, 04/01/19 1,660 Whirlpool MTN 1,050 8.600%, 05/01/14 1,238 -------------- 6,405 --------------
June 30, 2010 www.bishopstreetfunds.com 13 High Grade Income Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- CONSUMER STAPLES -- 3.8% Costco Wholesale $ 1,100 5.500%, 03/15/17 $ 1,266 Kraft Foods 900 6.500%, 02/09/40 1,006 1,075 5.375%, 02/10/20 1,152 Wal-Mart Stores 1,300 5.375%, 04/05/17 1,491 -------------- 4,915 -------------- FINANCIALS -- 8.2% Berkshire Hathaway 1,260 3.200%, 02/11/15 1,298 Boeing Capital 1,250 3.250%, 10/27/14 1,302 Boston Properties 1,200 5.625%, 11/15/20 1,255 Capital One Financial 1,000 7.375%, 05/23/14 1,143 General Electric Capital MTN (A) 1,325 0.524%, 05/08/13 1,279 General Electric Capital MTN, Ser A (C) 2,050 5.450%, 01/15/13 2,203 Jefferies Group 675 6.250%, 01/15/36 604 WEA Finance LLC (D) 1,300 5.750%, 09/02/15 1,405 -------------- 10,489 -------------- HEALTH CARE -- 2.4% Bristol-Myers Squibb (C) 300 5.450%, 05/01/18 344 Genentech (C) 1,300 4.750%, 07/15/15 1,438 Merck 1,200 5.000%, 06/30/19 1,335 -------------- 3,117 -------------- INDUSTRIALS -- 6.7% Allied Waste North America, Ser B 1,200 7.125%, 05/15/16 1,287 Boeing 500 4.875%, 02/15/20 551
Bishop Street Funds 14 High Grade Income Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- INDUSTRIALS -- (CONTINUED) Bunge Finance $ 1,300 8.500%, 06/15/19 $ 1,552 Caterpillar (C) 1,250 7.900%, 12/15/18 1,607 Continental Airlines 1,274 9.000%, 07/08/16 1,369 DirecTV Holdings LLC 500 6.375%, 06/15/15 518 Emerson Electric 500 5.250%, 10/15/18 565 News America 1,000 6.650%, 11/15/37 1,122 -------------- 8,571 -------------- INFORMATION TECHNOLOGY -- 8.3% Cisco Systems 1,500 5.500%, 02/22/16 1,728 Dell 400 5.625%, 04/15/14 449 Hewlett-Packard (C) 1,375 4.500%, 03/01/13 1,484 IBM 1,500 8.375%, 11/01/19 2,038 Nokia 1,250 5.375%, 05/15/19 1,315 Oracle (C) 1,200 5.250%, 01/15/16 1,362 Xerox 2,000 8.250%, 05/15/14 2,344 -------------- 10,720 -------------- MATERIALS -- 5.2% Dow Chemical 1,950 8.550%, 05/15/19 2,387 Monsanto 1,400 7.375%, 08/15/12 1,570 Nucor (C) 1,300 4.875%, 10/01/12 1,402 Potash Corp of Saskatchewan 1,200 5.250%, 05/15/14 1,324 -------------- 6,683 --------------
June 30, 2010 www.bishopstreetfunds.com 15 High Grade Income Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- TELECOMMUNICATION SERVICES -- 3.0% AT&T $ 500 5.800%, 02/15/19 $ 563 AT&T Wireless Services 1,300 8.125%, 05/01/12 1,454 Cellco Partnership (C) 1,600 5.550%, 02/01/14 1,794 -------------- 3,811 -------------- TOTAL CORPORATE OBLIGATIONS (Cost $67,854) 74,638 -------------- U.S. GOVERNMENT AGENCY OBLIGATIONS -- 13.1% FHLB 1,300 5.125%, 03/10/17 1,492 FHLMC 875 8.250%, 06/01/16 1,076 1,000 5.875%, 05/23/16 1,044 FHLMC MTN 1,000 4.250%, 05/22/13 1,082 FNMA 1,500 5.780%, 06/07/22 (C) 1,627 700 5.000%, 03/02/15 788 1,200 3.500%, 08/25/14 1,205 1,300 3.400%, 12/07/16 (C) 1,314 1,275 3.125%, 09/29/14 1,284 1,250 3.125%, 01/21/15 1,265 1,250 3.000%, 07/28/14 (C) 1,274 550 3.000%, 03/09/15 553 1,600 2.500%, 03/03/14 (C) 1,606 1,200 2.125%, 06/24/13 1,209 -------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $16,516) 16,819 -------------- ASSET-BACKED SECURITIES -- 12.8% Ally Auto Receivables Trust, Ser B, Cl A3 (D) 1,750 1.980%, 10/15/13 1,772 Capital One Multi-Asset Execution Trust, Ser A2, Cl A2 1,600 3.200%, 04/15/14 1,634 Citibank Credit Card Issuance Trust, Ser A3, Cl A3 2,600 2.700%, 06/24/13 2,643 Countrywide Asset-Backed Certificates, Ser 12, Cl 1A4 (A) 3,281 5.323%, 02/25/36 3,086
Bishop Street Funds 16 High Grade Income Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- ASSET-BACKED SECURITIES (CONTINUED) Ford Credit Auto Owner Trust, Ser E, Cl A3 (A) $ 2,500 1.510%, 01/15/14 $ 2,514 GSR Mortgage Loan Trust, Ser 4, Cl 3A2 (A) 2,481 2.150%, 04/25/32 2,244 Mercedes-Benz Auto Receivables, Ser I, Cl A3 1,250 1.670%, 01/15/14 1,263 WaMu Mortgage Pass Through Certificates, Ser AR9, Cl 2A (A) 1,428 3.109%, 07/25/42 1,257 -------------- TOTAL ASSET-BACKED SECURITIES (Cost $15,986) 16,413 -------------- U.S. TREASURY OBLIGATIONS -- 7.5% U.S. Treasury Bonds 700 7.250%, 05/15/16 899 1,250 4.750%, 02/15/37 1,435 1,500 4.500%, 08/15/39 1,652 U.S. Treasury Notes 575 3.750%, 11/15/18 620 625 3.125%, 10/31/16 656 500 3.125%, 05/15/19 (C) 510 1,120 2.625%, 04/30/16 1,151 1,400 2.500%, 06/30/17 1,406 750 2.375%, 10/31/14 774 500 2.125%, 11/30/14 511 -------------- TOTAL U.S. TREASURY OBLIGATIONS (Cost $9,241) 9,614 -------------- U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 4.1% FHLMC REMIC, Ser 2844, Cl VB 102 5.500%, 12/15/19 101 FHLMC REMIC, Ser 3196, Cl CB 305 5.250%, 08/15/11 304 FHLMC REMIC, Ser R010, Cl AB 555 5.500%, 12/15/19 580 FNMA, Ser 2003-33, Cl AB 1,584 3.750%, 03/25/33 1,647 FNMA, Ser 254884 196 3.500%, 08/01/10 198 FNMA, Ser 889958 614 5.000%, 10/01/23 657
June 30, 2010 www.bishopstreetfunds.com 17 High Grade Income Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Shares/Face Amount Value (000) (000) - ------------ -------------- U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (CONTINUED) FNMA REMIC, Ser 2007-B1, Cl BE $ 692 5.450%, 12/25/20 $ 745 GNMA, Ser 7, Cl PE 982 5.500%, 11/16/31 1,031 -------------- TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (Cost $5,031) 5,263 -------------- MUNICIPAL BONDS -- 3.0% MUNICIPAL -- 3.0% California State, GO 1,500 7.550%, 04/01/39 1,609 Michigan Municipal Bond Authority, RB, Merrill Lynch Insured (A) 500 2.900%, 09/01/48 500 New Jersey State, Turnpike Authority, Ser B, RB, AMBAC Insured, Pre-Refunded @ 100 (B) 1,250 4.252%, 01/01/15 1,296 New Mexico Mortgage Finance Authority, Ser B3, RB, AMT, GNMA/FNMA/FHLMC Insured 405 4.200%, 07/01/28 400 -------------- TOTAL MUNICIPAL BONDS (Cost $3,640) 3,805 -------------- CASH EQUIVALENTS (F) -- 0.5% 337,289 Dreyfus Cash Management Fund, Institutional Shares, 0.137% 337 337,289 Fidelity Institutional Money Market Portfolio, Institutional Shares, 0.250% 337 -------------- TOTAL CASH EQUIVALENTS (Cost $674) 674 -------------- REPURCHASE AGREEMENTS (G) -- 11.7% $ 2,265 Bank of America 0.190%, dated 06/30/10, to be repurchased on 07/01/10, repurchase price $2,265,247 (collateralized by a FHLMC obligation, par value $2,286,759, 4.500%, 10/01/39, with a total market value of $2,310,610) 2,265 12,730 JPMorgan 0.240%, dated 06/30/10, to be repurchased on 07/01/10, repurchase price $12,729,613 (collateralized by a CLCT obligation, par value $14,302,155, 0.011% - 0.040%, 03/01/42, with a total market value of $13,367,872) 12,730 -------------- TOTAL REPURCHASE AGREEMENTS (Cost $14,995) 14,995 -------------- TOTAL INVESTMENTS (Cost $133,937) -- 110.9% $ 142,221 ==============
Bishop Street Funds 18 High Grade Income Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED) PERCENTAGES ARE BASED ON NET ASSETS OF $128,201($ THOUSANDS). (A) FLOATING RATE SECURITY THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE IN EFFECT AS OF JUNE 30, 2010. THE DATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE NEXT SCHEDULED RESET DATE. (B) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. (C) THIS SECURITY OR PORTION OF THIS SECURITY IS ON LOAN AT JUNE 30, 2010. THE TOTAL VALUE OF SECURITIES ON LOAN AT JUNE 30, 2010 WAS $14,498 ($ THOUSANDS). (D) SECURITIES SOLD WITHIN TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT FROM REGISTRATION UNDER SECTION 144A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR OTHER "ACCREDITED INVESTORS." THESE SECURITIES HAVE BEEN DETERMINED TO BE LIQUID UNDER GUIDELINES ESTABLISHED BY THE BOARD OF TRUSTEES. (E) STEP BOND -- THE RATE REPORTED IS THE EFFECTIVE YIELD ON JUNE 30, 2010. THE COUPON ON A STEP BOND CHANGES ON A SPECIFIC DATE. (F) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010. (G) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL HELD FROM SECURITIES ON LOAN. THE TOTAL VALUE OF SUCH SECURITIES AS OF JUNE 30, 2010 WAS $14,995 ($ THOUSANDS). AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY AMT -- ALTERNATIVE MINIMUM TAX CL -- CLASS CLCT -- COLLEGE LOAN CORPORATE TRUST FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION GO -- GENERAL OBLIGATION LLC -- LIMITED LIABILITY CORPORATION MTN -- MEDIUM TERM NOTE PLC -- PUBLIC LIMITED COMPANY RB -- REVENUE BOND REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT SER -- SERIES COST FIGURES ARE SHOWN IN THOUSANDS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2010 www.bishopstreetfunds.com 19 Hawaii Municipal Bond Fund (UNAUDITED) TOP TEN HOLDINGS+
Percentage Coupon Maturity of Rate Date Investments ------ -------- ----------- 1. Hawaii State, RB 5.100% 07/01/39 3.0% 2. Honolulu City & County, Board of Water Supply, RB 4.750% 07/01/14 2.3% 3. Honolulu Hawaii City & County, Ser A, GO 5.000% 07/01/23 2.2% 4. Honolulu Hawaii City & County, GO 5.000% 07/01/17 2.0% 5. Hawaii State, RB 5.000% 07/01/16 1.6% 6. Hawaii State, Housing Finance & Development, RB 5.350% 07/01/18 1.5% 7. Honolulu Hawaii City & County, GO 5.000% 07/01/15 1.4% 8. Hawaii State, Housing Finance & Development, RB 6.500% 07/01/33 1.3% 9. Honolulu City & County, Board of Water Supply, RB 5.000% 07/01/26 1.3% 10. Hawaii State, Department of Hawaiian Home Lands, COP 5.000% 11/01/31 1.3%
SECTOR WEIGHTINGS+ (BAR CHART) General Obligation 43.1% Transportation 12.6% General Revenue 9.6% Higher Education 7.9% Water 7.1% Power 4.3% Airport 3.2% Polution 2.1% Single-Family Housing 2.1% Utilities 2.1% Housing 1.9% Facilities 1.3% Medical 1.2% Short-Term Investments 0.9% Education 0.6%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2010
Face Amount Value (000) (000) - ------------ -------------- MUNICIPAL BONDS -- 98.5% ALASKA -- 0.1% City of Anchorage Alaska, Water Department, RB, NPFGC Re-Insured $ 200 5.000%, 05/01/37 $ 206 --------------
Bishop Street Funds 20 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- CALIFORNIA -- 2.0% California Health Facilities Financing Authority, Ser B, RB $ 1,000 5.000%, 11/15/25 $ 1,028 California State, GO 1,000 5.000%, 04/01/38 950 San Francisco Community College District, Ser D, GO 1,000 5.000%, 06/15/34 1,037 San Jose Evergreen Community College District, Ser B, GO, AGM Insured (A) 1,000 6.133%, 09/01/28 359 -------------- 3,374 -------------- GEORGIA -- 1.1% City of Atlanta Georgia, Ser A, RB, AGM-CR FGIC Insured 785 5.500%, 11/01/22 883 Main Street, Natural Gas, Ser B, RB 1,000 5.000%, 03/15/18 1,008 -------------- 1,891 -------------- HAWAII -- 80.3% County of Kauai Hawaii, Ser A, GO, NPFGC Re-insures FGIC Insured 1,000 5.000%, 08/01/28 1,050 Hawaii County, Refunding & Improvement Project, Ser A, GO, NPFGC Re-insures FGIC Insured 430 5.600%, 05/01/13 480 Hawaii County, Ser A, GO, AGM Insured 125 5.000%, 07/15/21 132 1,500 5.000%, 07/15/23 1,575 Hawaii County, Ser A, GO, NPFGC Re- Insured 1,055 5.250%, 07/15/18 1,147 1,000 5.000%, 07/15/24 1,049 Hawaii County, Unlimited Public Improvements, Ser A, GO, AMBAC Insured 1,000 5.000%, 07/15/15 1,135 Hawaii County, Unlimited Public Improvements, Ser A, GO, NPFGC Insured 505 5.000%, 07/15/21 561 1,000 5.000%, 07/15/22 1,101 Hawaii Pacific Health, Ser A, RB 1,000 4.625%, 07/01/21 992 Hawaii State, Airport System, Ser B, RB, AMT, NPFGC Re-insures FGIC Insured, Pre-Refunded @ 101 (B) 1,500 6.625%, 07/01/10 1,515
June 30, 2010 www.bishopstreetfunds.com 21 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- HAWAII -- (CONTINUED) Hawaii State, Airport System, RB, AMT, ETM $ 40 6.900%, 07/01/12 $ 42 Hawaii State, Airport System, RB, AMT, NPFGC Re-insures FGIC Insured 1,000 5.750%, 07/01/15 1,037 Hawaii State, Department of Budget & Finance, Chaminade University, RB, Radian Insured 1,000 4.750%, 01/01/36 920 Hawaii State, Department of Budget & Finance, Electric Company & Subsidiary Project, Ser A, RB, AMT, FGIC Insured 750 4.800%, 01/01/25 722 Hawaii State, Department of Budget & Finance, Electric Company & Subsidiary Project, Ser B, RB, AMT, XLCA Insured 1,025 5.000%, 12/01/22 1,015 Hawaii State, Department of Budget & Finance, Hawaiian Electric, Ser A, RB, AMT, AMBAC Insured 445 5.100%, 09/01/32 427 Hawaii State, Department of Budget & Finance, Hawaiian Electric, Ser A, RB, AMT, FGIC Insured 1,000 4.650%, 03/01/37 887 Hawaii State, Department of Budget & Finance, Hawaiian Electric, Ser A, RB, AMT, NPFGC Re- Insured 2,000 5.650%, 10/01/27 2,025 Hawaii State, Department of Budget & Finance, Hawaiian Electric, Ser C, RB, AMT, AMBAC Insured 1,000 6.200%, 11/01/29 1,003 Hawaii State, Department of Budget & Finance, Mid Pacific Institute, RB, Radian Insured 1,000 5.000%, 01/01/26 1,008 Hawaii State, Department of Hawaiian Home Lands, Kapolei Office Facilities, Ser A, COP,AGM Insured 2,000 5.000%, 11/01/31 2,074 Hawaii State, Harbor System, Ser A, RB, AMT, AGM Insured 2,025 5.750%, 07/01/17 2,071 370 5.750%, 07/01/29 378 1,210 5.700%, 07/01/16 1,237 1,000 5.600%, 07/01/15 1,023 Hawaii State, Harbor System, Ser B, RB, AMT, AGM Insured 1,000 5.000%, 01/01/13 1,066 500 5.000%, 01/01/23 506 Hawaii State, Harbor System, Ser B, RB, AMT, AMBAC Insured 200 5.500%, 07/01/19 207 Hawaii State, Highway, RB 300 5.500%, 07/01/18 360
Bishop Street Funds 22 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- HAWAII -- (CONTINUED) $ 1,000 5.500%, 01/01/25 $ 1,132 Hawaii State, Highway, RB, AGM Insured 1,800 5.000%, 07/01/12 1,951 Hawaii State, Highway, Ser A, RB, AGM Insured 1,725 5.000%, 07/01/21 1,874 1,565 5.000%, 07/01/22 1,687 1,000 5.000%, 07/01/23 1,072 Hawaii State, Highway, Ser B, RB, AGM Insured 2,300 5.000%, 07/01/16 2,601 Hawaii State, Housing Finance & Development, Ser B-RMKT, RB, AGM Insured 2,000 6.500%, 07/01/33 2,168 Hawaii State, Housing Finance & Development, Single-Family Housing, Ser A, RB, AMT, FNMA Collateral Insured 500 5.400%, 07/01/30 500 2,500 5.350%, 07/01/18 2,501 Hawaii State, Housing Finance & Development, Single-Family Housing, Ser B, RB, FNMA Collateral Insured 520 5.450%, 07/01/17 520 Hawaii State, Improvements Authority, Ser DA, GO, NPFGC Re- Insured 850 5.250%, 09/01/23 913 Hawaii State, Improvements Authority, Ser DB, GO, NPFGC Re- Insured 200 5.250%, 09/01/15 224 Hawaii State, Improvements Authority, Ser DD, GO, NPFGC Re- Insured 1,500 5.250%, 05/01/15 1,706 Hawaii State, Improvements Authority, Ser DF, GO, AMBAC Insured 1,250 5.000%, 07/01/18 1,389 1,250 5.000%, 07/01/21 1,371 90 5.000%, 07/01/22 98 Hawaii State, RB, BHAC-CR Insured 300 4.750%, 01/01/22 332 Hawaii State, Ser A, RB 4,875 5.100%, 07/01/39 4,901 1,250 5.000%, 07/01/22 1,350 Hawaii State, Ser B, RB, AGM Insured 1,400 5.250%, 07/01/19 1,656 Hawaii State, Ser CM-FGIC-FSA-CR, GO, AGM-CR FGIC Insured 1,000 6.500%, 12/01/14 1,212 Hawaii State, Ser CU, GO, NPFGC Re- Insured, Pre-Refunded @ 100 (B) 25 5.750%, 10/01/10 25
June 30, 2010 www.bishopstreetfunds.com 23 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- HAWAII -- (CONTINUED) Hawaii State, Ser CV, GO, NPFGC Re-insures FGIC Insured $ 350 5.375%, 08/01/19 $ 365 Hawaii State, Ser CX, GO, FSA Insured 1,000 5.500%, 02/01/16 1,070 580 5.500%, 02/01/21 618 Hawaii State, Ser CZ, GO, FSA Insured 45 5.250%, 07/01/16 48 Hawaii State, Ser DI, GO, AGM Insured 1,000 5.000%, 03/01/26 1,071 Hawaii State, Ser DK, GO 450 5.000%, 05/01/24 495 475 5.000%, 05/01/25 519 Hawaii State, Ser DN, GO 1,000 5.500%, 08/01/26 1,128 Hawaii State, Ser DO, GO 1,000 5.000%, 08/01/16 1,158 Hawaii State, Ser DQ, GO 1,100 5.000%, 06/01/28 1,193 Hawaii State, Ser DV,GO 600 2.000%, 11/01/12 618 Hawaii State, Unlimited Public Improvements, Ser DD, GO, NPFGC Re- Insured 1,000 5.000%, 05/01/16 1,111 Hawaii State, Unlimited Public Improvements, Ser DJ, GO, AMBAC Insured 500 5.000%, 04/01/13 554 Honolulu City & County, Board of Water Supply, Ser A, RB, FGIC Insured, Pre-Refunded @ 100 (B) 3,300 4.750%, 07/01/14 3,754 Honolulu City & County, Board of Water Supply, Ser A, RB, NATL-RE Insured 2,000 5.000%, 07/01/26 2,137 Honolulu City & County, Board of Water Supply, Ser A, RB, NPFGC Re-insures FGIC Insured 2,000 5.000%, 07/01/33 2,053 Honolulu City & County, Board of Water Supply, Ser B, RB, AMT, NPFGC Re- Insured 1,000 5.250%, 07/01/20 1,069 1,000 5.250%, 07/01/21 1,065 325 5.000%, 07/01/15 357 Honolulu Hawaii City & County, 2nd Board Resoluton, Ser A, RB, AGM Insured 1,900 5.000%, 07/01/27 2,023
Bishop Street Funds 24 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- HAWAII -- (CONTINUED) Honolulu Hawaii City & County, Ser A, GO $ 200 5.250%, 04/01/31 $ 217 1,100 5.250%, 04/01/32 1,190 1,000 5.000%, 04/01/33 1,054 Honolulu Hawaii City & County, Ser A, GO, AGM Insured 375 5.000%, 07/01/20 421 275 5.000%, 07/01/24 301 1,000 5.000%, 07/01/30 1,056 Honolulu Hawaii City & County, Ser A, GO, NPFGC Re- Insured 725 5.250%, 03/01/18 798 1,000 5.250%, 03/01/20 1,086 1,500 5.250%, 03/01/24 1,616 500 5.250%, 03/01/28 533 1,800 5.000%, 07/01/21 1,980 3,350 5.000%, 07/01/23 3,648 550 5.000%, 07/01/25 589 540 5.000%, 07/01/26 585 1,000 5.000%, 07/01/27 1,059 Honolulu Hawaii City & County, Ser A, RB 500 5.000%, 07/01/20 564 Honolulu Hawaii City & County, Ser B, GO, NPFGC Re- Insured 2,000 5.000%, 07/01/15 2,262 Honolulu Hawaii City & County, Ser D, GO 1,000 4.000%, 09/01/25 1,019 1,000 4.000%, 09/01/26 1,014 Honolulu Hawaii City & County, Ser D, GO, NPFGC Re- Insured 885 5.000%, 07/01/19 989 1,700 5.000%, 07/01/23 1,837 Honolulu Hawaii City & County, Ser D-MBIA-FSA-CR, GO, AGM-CR NPFGC Re- Insured 1,000 5.000%, 07/01/22 1,087 Honolulu Hawaii City & County, Ser E, GO, NPFGC Re-insures FGIC Insured 1,500 5.250%, 07/01/20 1,698 Honolulu Hawaii City & County, Ser F, GO, NATL-RE FGIC Insured 1,000 5.000%, 07/01/29 1,049 Honolulu Hawaii City & County, Ser Senior A, RB, NATL-RE Insured 1,000 5.000%, 07/01/31 1,044 Honolulu Hawaii City & County, Sewer Improvements, 1st Board Resolution, Ser Senior C, RB, NPFGC Re- Insured 250 5.000%, 07/01/31 261
June 30, 2010 www.bishopstreetfunds.com 25 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- HAWAII -- (CONTINUED) Honolulu Hawaii City & County, Sewer Improvements, 2nd Board Resolution, Ser Junior A-1, RB, NPFGC Re- Insured $ 815 5.000%, 07/01/22 $ 879 Honolulu Hawaii City & County, Sewer Improvements, 2nd Board Resoluton, Ser Junior B-1, RB, NPFGC Re- Insured 865 5.000%, 07/01/23 927 Honolulu Hawaii City & County, Valorem Tax Project, Ser B, GO, NPFGC Re- Insured 3,000 5.000%, 07/01/17 3,360 Honolulu Hawaii City & County, Waipahu Towers Project, Ser A, RB, AMT, GNMA Collateral Insured 195 6.900%, 06/20/35 196 Kauai County, Ser A, GO, NPFGC Re- Insured 1,500 5.000%, 08/01/25 1,525 Kauai County, Ser A, GO, NPFGC Re-insures FGIC Insured 1,610 5.000%, 08/01/21 1,743 1,440 5.000%, 08/01/23 1,542 Maui County, GO, NPFGC Re- Insured 100 5.000%, 03/01/17 111 1,100 5.000%, 03/01/24 1,180 Maui County, Hawaii, Ser A, GO 1,000 5.000%, 07/01/19 1,129 Maui County, Ser A, GO, AGM Insured 1,000 3.500%, 07/01/16 1,062 Maui County, Ser A, GO, NPFGC Re- Insured 1,000 4.750%, 07/01/25 1,059 Maui County, Ser B, GO, NPFGC Re- Insured 500 5.000%, 07/01/16 572 500 5.000%, 09/01/17 550 University of Hawaii, College Improvements Project, Ser A, RB, FGIC Insured, Pre-Refunded @ 100 (B) 1,605 5.500%, 07/15/12 1,766 500 5.125%, 07/15/12 546 University of Hawaii, College Improvements Project, Ser A, RB, NPFGC Re- Insured 200 5.000%, 07/15/19 218 University of Hawaii, Ser A, RB 100 6.000%, 10/01/38 112 University of Hawaii, Ser A, RB, AGC-ICC MBIA Insured 1,400 5.000%, 10/01/23 1,504 University of Hawaii, Ser A, RB, MBIA Insured 400 4.500%, 07/15/32 399
Bishop Street Funds 26 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- HAWAII -- (CONTINUED) University of Hawaii, Ser A, RB, NPFGC Re- Insured $ 975 5.000%, 07/15/21 $ 1,047 150 5.000%, 07/15/22 160 University of Hawaii, Ser B, RB, AGM Insured 320 5.250%, 10/01/16 331 775 5.250%, 10/01/17 799 -------------- 134,008 -------------- ILLINOIS -- 1.0% Chicago O'Hare International Airport, General Airport, Ser E, RB, CIFG Insured 1,550 5.250%, 01/01/22 1,612 -------------- INDIANA -- 1.3% Indiana Finance Authority, Highway Revenue, Ser A, RB, NPFGC Re-insures FGIC Insured 1,200 4.500%, 06/01/27 1,213 Wayne Township School Building, RB, NPFGC Re-insures FGIC Insured 1,000 3.500%, 07/15/24 942 -------------- 2,155 -------------- MAINE -- 0.5% Maine Health & Higher Educational Facilities Authority, Ser A, RB 750 5.250%, 07/01/31 782 -------------- MASSACHUSETTS -- 0.4% University of Massachusetts Building Authority, Ser 1, RB 650 5.000%, 05/01/22 723 -------------- NEVADA -- 0.2% Nevada State, Municipal Bond Bank Project, Ser F, GO, AGM Insured 250 5.000%, 12/01/24 263 -------------- NEW MEXICO -- 0.5% New Mexico Mortgage Finance Authority, Ser B3, RB, AMT, GNMA/FNMA/FHLMC Insured 880 4.200%, 07/01/28 866 -------------- NEW YORK -- 1.3% New York City Municipal Water Finance Authority, Ser BB, RB 1,000 5.000%, 06/15/27 1,087 New York State, Dormitory Authority, Ser A, RB 1,000 3.100%, 07/01/17 1,029 -------------- 2,116 --------------
June 30, 2010 www.bishopstreetfunds.com 27 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000) (000) - ------------ -------------- OKLAHOMA -- 0.6% Tulsa Airports Improvement Trust, Ser B, RB $ 1,000 5.375%, 06/01/24 $ 1,028 -------------- OREGON -- 0.6% Oregon State, Ser C, GO 1,000 4.100%, 08/01/28 1,006 -------------- PUERTO RICO -- 3.7% Commonwealth of Puerto Rico, GO, NPFGC Re- Insured 1,500 6.000%, 07/01/15 1,673 Commonwealth of Puerto Rico, Public Improvement, GO, FSA Insured, Pre-Refunded @ 100 (B) 55 5.000%, 07/01/11 58 Puerto Rico Electric Power Authority, Ser XX, RB 2,000 4.750%, 07/01/26 1,989 Puerto Rico Electric Power Authority, Ser ZZ, RB 1,000 5.000%, 07/01/24 1,028 Puerto Rico Highway & Transportation Authority, Ser AA-2-RMKT, RB (C) 1,000 5.300%, 07/01/35 993 Puerto Rico, Electric Power Authority, Ser HH, RB, AGM Insured, Pre-Refunded @ 101 (B) 500 5.250%, 07/01/10 505 -------------- 6,246 -------------- SOUTH CAROLINA -- 1.3% College of Charleston, Ser D, RB, XLCA Insured 765 4.500%, 04/01/37 756 Sumter South Carolina, Waterworks & Sewer Improvement Systems, RB, XLCA Insured 500 5.000%, 12/01/21 538 840 5.000%, 12/01/24 887 -------------- 2,181 -------------- TEXAS -- 2.1% Alamo Community College District, Improvements Authority, GO, NPFGC Re-insures FGIC Insured 1,000 4.500%, 08/15/26 1,025 City of El Paso Texas, GO 500 4.000%, 08/15/16 543 City of Fort Worth Texas, RB 1,000 4.300%, 02/15/35 960 North Texas Tollway Authority, Highway Revenue, RB, Assured Guarantee Insured (A) 3,000 3.388%, 01/01/30 1,005 -------------- 3,533 --------------
Bishop Street Funds 28 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Face Amount Value (000)/Shares (000) - ------------ -------------- WASHINGTON -- 0.8% County, of King Washington, RB, AGM Insured $ 710 5.000%, 01/01/30 $ 743 Washington State, Motor Vehicles Tax Authority, Ser F, GO, AMBAC Insured (A) 1,000 4.779%, 12/01/25 505 -------------- 1,248 -------------- WISCONSIN -- 0.7% Wisconsin State, Ser D, GO, AGM Insured 1,000 5.000%, 05/01/21 1,108 -------------- TOTAL MUNICIPAL BONDS (Cost $159,769) 164,346 -------------- CASH EQUIVALENTS (D) -- 0.9% 776,290 Dreyfus Cash Management Fund, Institutional Shares, 0.170% 777 776,290 Fidelity Institutional Tax-Exempt Portfolio, Institutional Shares, 0.124% 777 -------------- TOTAL CASH EQUIVALENTS (Cost $1,554) 1,554 -------------- TOTAL INVESTMENTS (Cost $161,323) -- 99.4% $ 165,900 ==============
PERCENTAGES ARE BASED ON NET ASSETS OF $166,929 ($ THOUSANDS). (A) ZERO COUPON SECURITY -- THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (B) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. (C) SECURITY PURCHASED ON A WHEN-ISSUED BASIS. (D) THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010. AGC -- AMERICAN GUARANTEE CORPORATION AGM -- ASSURED GUARANTY MUNICIPAL CORPORATION AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY AMT -- ALTERNATIVE MINIMUM TAX CIFG -- CIFG ASSURANCE NORTH AMERICA, INC. COP -- CERTIFICATE OF PARTICIPATION ETM -- ESCROWED TO MATURITY FGIC -- FINANCIAL GUARANTEE INSURANCE CORPORATION FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION FSA -- FINANCIAL SECURITY ASSURANCE GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION June 30, 2010 www.bishopstreetfunds.com 29 Hawaii Municipal Bond Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED) GO -- GENERAL OBLIGATION MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE NPFGC -- NATIONAL PUBLIC FINANCE GUARANTEE CORPORATION RB -- REVENUE BOND SER -- SERIES XLCA -- XL CAPITAL COST FIGURES ARE SHOWN IN THOUSANDS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 30 Government Money Market Fund (UNAUDITED) SECTOR WEIGHTINGS+ (BAR CHART) U.S. Government Agency Obligation 75.8% U.S. Treasury Obligation 17.5% Cash Equivalents 6.7%
+ PERCENTAGES ARE BASED ON TOTAL INVESTMENTS. SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2010
Face Amount Value (000) (000) - ------------ -------------- U.S. GOVERNMENT AGENCY OBLIGATIONS -- 77.5% FFCB (A) $ 4,500 0.347%, 12/27/10 $ 4,500 FHLB (B) 3,700 0.200%, 08/11/10 3,699 9,000 0.143%, 07/16/10 8,999 3,000 0.130%, 07/07/10 3,000 1,500 0.130%, 07/21/10 1,500 2,550 0.100%, 07/23/10 2,550 7,490 0.094%, 07/09/10 7,490 FHLMC (B) 2,915 0.331%, 11/16/10 2,911 7,000 0.273%, 10/27/10 6,994 3,000 0.250%, 09/21/10 2,998 6,000 0.250%, 09/28/10 5,996 3,362 0.240%, 09/14/10 3,360 2,000 0.230%, 08/20/10 1,999 8,500 0.210%, 08/09/10 8,499 3,000 0.200%, 07/21/10 3,000 2,000 0.185%, 07/26/10 2,000 4,000 0.180%, 07/07/10 4,000 1,270 0.180%, 08/18/10 1,270 3,000 0.170%, 07/14/10 3,000 4,000 0.168%, 07/09/10 4,000 4,400 0.160%, 07/06/10 4,400 5,000 0.150%, 08/16/10 4,999 2,923 0.090%, 07/28/10 2,923 FNMA (B) 2,500 0.280%, 10/13/10 2,498 2,000 0.270%, 10/18/10 1,998 3,000 0.265%, 09/22/10 2,998 1,408 0.210%, 08/11/10 1,407 1,000 0.170%, 08/23/10 1,000 4,000 0.165%, 07/12/10 4,000 1,500 0.160%, 07/21/10 1,500 8,000 0.151%, 07/28/10 7,999 2,200 0.110%, 08/02/10 2,200 1,300 0.100%, 07/16/10 1,300 -------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $120,987) 120,987 --------------
June 30, 2010 www.bishopstreetfunds.com 31 Government Money Market Fund (UNAUDITED) SCHEDULE OF INVESTMENTS (CONTINUED)
Shares/Face Amount Value (000) (000) - ------------ -------------- U.S. TREASURY OBLIGATIONS (B) -- 17.9% U.S. Treasury Bills $ 9,000 0.088%, 08/12/10 $ 8,999 4,000 0.078%, 07/08/10 4,000 10,000 0.070%, 07/22/10 9,999 5,000 0.046%, 08/05/10 5,000 -------------- TOTAL U.S. TREASURY OBLIGATIONS (Cost $27,998) 27,998 -------------- CASH EQUIVALENTS (C) -- 6.9% 3,525,908 AIM STIT-Government & Agency Portfolio, 0.020% 3,526 3,632,754 Dreyfus Government Cash Management Fund, Institutional Shares, 0.049% 3,633 3,525,908 Fidelity Institutional Money Market Funds, Institutional Shares, 0.047% 3,526 -------------- TOTAL CASH EQUIVALENTS (Cost $10,685) 10,685 -------------- TOTAL INVESTMENTS (Cost $159,670) -- 102.3% $ 159,670 ==============
PERCENTAGES ARE BASED ON NET ASSETS OF $156,141 ($ THOUSANDS). (A) FLOATING RATE SECURITY -- THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE IN EFFECT AS OF JUNE 30, 2010. THE DATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE FINAL MATURITY DATE. (B) ZERO COUPON SECURITY -- THE RATE REPORTED ON THE SCHEDULE OF INVESTMENTS IS THE EFFECTIVE YIELD AT TIME OF PURCHASE. (C) THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF JUNE 30, 2010. FFCB -- FEDERAL FARM CREDIT BANK FHLB -- FEDERAL HOME LOAN BANK FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION FNMA -- FEDERAL NATIONAL MORTGAGE CORPORATION COST FIGURES ARE SHOWN IN THOUSANDS. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 32 Bishop Street Funds (UNAUDITED) STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 2010 (IN THOUSANDS)
High Strategic Dividend Grade Growth Value Income Fund Fund Fund --------- -------- -------- ASSETS: Investments, at Cost $ 48,614 $ 50,249 $118,942 Repurchase Agreements, at Cost -- 8,564 14,995 ======== ======== ======== Investments, at Value $ 49,410 $ 47,538(1) $127,226(1) Repurchase Agreements, at Value -- 8,564 14,995 Receivable for Investment Securities Sold 168 -- -- Dividends and Interest Receivable 35 124 1,253 Receivable for Fund Shares Sold -- 11 -- Prepaid Expenses 3 2 8 -------- -------- -------- Total Assets 49,616 56,239 143,482 -------- -------- -------- LIABILITIES: Advisory Fees Payable 32 21 39 Administrative Fees Payable 5 5 13 Shareholder Servicing Fees Payable 4 4 11 Chief Compliance Officer Fees Payable 2 1 3 Collateral on Securities Loaned -- 8,564 14,995 Income Distribution Payable -- -- 146 Payable for Investment Securities Purchased 168 -- -- Payable for Fund Shares Redeemed 10 2 39 Accrued Expenses Payable 18 35 35 -------- -------- -------- Total Liabilities 239 8,632 15,281 -------- -------- -------- Net Assets $ 49,377 $ 47,607 $128,201 ======== ======== ======== Fund Shares $ 61,689 $ 73,297 $117,722 Undistributed Net Investment Income (Accumulated Net Investment Loss) (41) 15 5 Accumulated Net Realized Gain (Loss) on Investments (13,067) (22,994) 2,190 Net Unrealized Appreciation(Depreciation)on Investments 796 (2,711) 8,284 -------- -------- -------- Net Assets $ 49,377 $ 47,607 $128,201 ======== ======== ======== Class I Shares: Net Assets $ 49,377 $ 47,607 $128,201 Outstanding Shares of Beneficial Interest (unlimited authorization -- no par value) 5,023 6,538 11,765 Net Asset Value, Offering and Redemption Price Per Share -- Class I (Net Assets / Shares Outstanding) $ 9.83 $ 7.28 $ 10.90 ======== ======== ========
(1) INCLUDED IN "INVESTMENTS, AT VALUE" IS THE MARKET VALUE OF SECURITIES ON LOAN IN THE AMOUNTS OF $8,274 ($ THOUSANDS), AND $14,498 ($ THOUSANDS) FOR THE DIVIDEND VALUE AND HIGH GRADE INCOME FUNDS, RESPECTIVELY. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2010 www.bishopstreetfunds.com 33 Bishop Street Funds (UNAUDITED) STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 2010 (IN THOUSANDS)
Hawaii Government Municipal Money Bond Market Fund Fund --------- ---------- ASSETS: Investments, at Cost $ 161,323 $159,670 ========= ======== Investments, at Value $ 165,900 $159,670 Interest Receivable 3,007 -- Receivable for Fund Shares Sold 117 -- Receivable due from Investment Adviser -- 22 Prepaid Expenses 6 18 --------- -------- Total Assets 169,030 159,710 --------- -------- LIABILITIES: Payable for Investment Securities Purchased 1,552 3,500 Income Distribution Payable 398 -- Payable for Fund Shares Redeemed 39 -- Advisory Fees Payable 28 -- Shareholder Servicing Fees Payable 14 -- Administrative Fees Payable 10 15 Distribution Fees Payable 6 8 Chief Compliance Officer Fees Payable 4 3 Accrued Expenses Payable 50 43 --------- -------- Total Liabilities 2,101 3,569 --------- -------- Net Assets $ 166,929 $156,141 ========= ======== Fund Shares $ 162,786 $156,141 Undistributed Net Investment Income 4 -- Accumulated Net Realized Loss on Investments (438) -- Net Unrealized Appreciation on Investments 4,577 -- --------- -------- Net Assets $ 166,929 $156,141 ========= ======== Class I Shares: Net Assets $ 137,436 $113,983 Outstanding Shares of Beneficial Interest (unlimited authorization -- no par value) 12,829 113,987 Net Asset Value, Offering and Redemption Price Per Share -- Class I (Net Assets / Shares Outstanding) $ 10.71 $ 1.00 ========= ======== Class A Shares: Net Assets $ 29,493 $ 42,158 Outstanding Shares of Beneficial Interest (unlimited authorization -- no par value) 2,753 42,157 Net Asset Value, Offering and Redemption Price Per Share -- Class A (Net Assets / Shares Outstanding) $ 10.71 $ 1.00 ========= ======== Maximum Offering Price Per Shares -- Class A ($10.71 / 97.00%) $ 11.04 -- ========= ========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 34 Bishop Street Funds (UNAUDITED) STATEMENTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2010 (IN THOUSANDS)
High Strategic Dividend Grade Growth Value Income Fund Fund Fund --------- -------- ------ INVESTMENT INCOME: Dividend Income $ 291 $ 749 $ -- Interest Income -- -- 2,912 Securities Lending, Net -- 3 11 Foreign Taxes Withheld (2) (6) -- ------- ------- ------ Total Investment Income 289 746 2,923 ------- ------- ------ EXPENSES: Investment Adviser Fees 215 186 352 Shareholder Servicing Fee 73 63 160 Administrative Fees 58 50 128 Chief Compliance Officer Fees 1 1 2 Transfer Agent Fees 20 19 27 Professional Fees 13 30 27 Printing Fees 7 6 14 Trustees' Fees 3 3 6 Custody Fees 3 3 3 Registration Fees 1 1 9 Line of Credit 1 -- -- Miscellaneous Expenses 4 3 17 ------- ------- ------ Total Expenses 399 365 745 ------- ------- ------ Less Waivers: Investment Adviser Fees -- (42) (112) Shareholder Servicing Fees (44) (38) (96) Administrative Fees (23) (20) (51) ------- ------- ------ Total Waivers (67) (100) (259) ------- ------- ------ Total Net Expenses 332 265 486 ------- ------- ------ Net Investment Income (Loss) (43) 481 2,437 ------- ------- ------ Net Realized Gain (Loss) on Investments 977 (1,193) 1,011 Change in Unrealized Appreciation (Depreciation) on Investments (4,917) (2,385) 1,917 ------- ------- ------ Net Realized and Unrealized Gain (Loss) on Investments (3,940) (3,578) 2,928 ------- ------- ------ Increase (Decrease) in Net Assets Resulting from Operations $(3,983) $(3,097) $5,365 ======= ======= ======
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2010 www.bishopstreetfunds.com 35 Bishop Street Funds (UNAUDITED) STATEMENTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2010 (IN THOUSANDS)
Hawaii Government Municipal Money Bond Market Fund Fund --------- ---------- INVESTMENT INCOME: Interest Income $ 3,430 $ 107 Dividend Income -- 2 ------- ----- Total Investment Income 3,430 109 ------- ----- EXPENSES: Investment Adviser Fees 291 198 Shareholder Servicing Fee 208 165 Administrative Fees 166 132 Distribution Fees, Class A 34 53 Chief Compliance Officer Fees 3 2 Transfer Agent Fees 42 41 Professional Fees 35 27 Printing Fees 19 15 Trustees' Fees 8 6 Registration Fees 5 5 Custody Fees 4 3 Rating Expense -- 12 Miscellaneous Expenses 27 12 ------- ----- Total Expenses 842 671 ------- ----- Less Waivers: Shareholder Servicing Fees (125) (99) Administrative Fees (108) (53) Investment Adviser Fees (118) (134) Expense Reimbursement by Adviser -- (276) ------- ----- Total Waivers (351) (562) ------- ----- Total Net Expenses 491 109 ------- ----- Net Investment Income 2,939 -- ------- ----- Net Realized Gain on Investments 609 -- Change in Unrealized Appreciation on Investments 914 -- ------- ----- Net Realized and Unrealized Gain on Investments 1,523 -- ------- ----- Increase in Net Assets Resulting from Operations $ 4,462 $ -- ======= =====
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 36 Bishop Street Funds STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2010 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2009 (IN THOUSANDS)
Strategic Dividend Growth Fund Value Fund ------------------- ------------------ 2010 2009 2010 2009 -------- -------- ------- -------- INVESTMENT ACTIVITIES FROM OPERATIONS: Net Investment Income (Loss) $ (43) $ (1) $ 481 $ 430 Net Realized Gain (Loss) on Investments 977 (7,091) (1,193) (13,050) Change in Unrealized Appreciation (Depreciation) on Investments (4,917) 24,203 (2,385) 25,495 -------- -------- ------- -------- Increase (Decrease) in Net Assets Resulting from Operations (3,983) 17,111 (3,097) 12,875 -------- -------- ------- -------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net Investment Income: Class I Shares -- -- (466) (437) Capital Gains: Class I Shares -- -- -- -- -------- -------- ------- -------- Total Dividends and Distributions -- -- (466) (437) -------- -------- ------- -------- CAPITAL SHARE TRANSACTIONS: Class I Shares: Proceeds from Shares Issued 765 3,665 2,221 2,362 Reinvestments of Cash Distributions -- -- 311 296 Cost of Shares Redeemed (8,334) (22,084) (1,621) (16,696) -------- -------- ------- -------- Net Increase (Decrease) in Net Assets from Capital Share Transactions (7,569) (18,419) 911 (14,038) -------- -------- ------- -------- Total Decrease in Net Assets (11,552) (1,308) (2,652) (1,600) -------- -------- ------- -------- NET ASSETS: Beginning of Period 60,929 62,237 50,259 51,859 -------- -------- ------- -------- End of Period $ 49,377 $ 60,929 $47,607 $ 50,259 ======== ======== ======= ======== Undistributed Net Investment Income (Accumulated Net Investment Loss) $ (41) $ 2 $ 15 $ -- ======== ======== ======= ======== SHARE TRANSACTIONS: Class I Shares: Shares Issued 72 411 282 394 Shares Issued in Lieu of Cash Distributions -- -- 40 46 Shares Redeemed (776) (2,386) (204) (2,629) -------- -------- ------- -------- Net Increase (Decrease) in Shares Outstanding from Share Transactions (704) (1,975) 118 (2,189) ======== ======== ======= ========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR ZERO SHARES, OR HAVE BEEN ROUNDED TO $0 OR ZERO SHARES. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2010 www.bishopstreetfunds.com 37 Bishop Street Funds STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2010 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2009 (IN THOUSANDS)
High Grade Hawaii Municipal Income Fund Bond Fund ------------------- ------------------- 2010 2009 2010 2009 -------- -------- -------- -------- INVESTMENT ACTIVITIES FROM OPERATIONS: Net Investment Income $ 2,437 $ 5,107 $ 2,939 $ 5,913 Net Realized Gain (Loss) on Investments 1,011 6,222 609 (634) Change in Unrealized Appreciation (Depreciation) on Investments 1,917 (1,128) 914 9,340 -------- -------- -------- -------- Increase in Net Assets Resulting from Operations 5,365 10,201 4,462 14,619 -------- -------- -------- -------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net Investment Income: Class I Shares (2,434) (5,099) (2,483) (5,052) Class A Shares -- -- (459) (864) Capital Gains: Class I Shares -- (4,015) -- -- Class A Shares -- -- -- -- -------- -------- -------- -------- Total Dividends and Distributions (2,434) (9,114) (2,942) (5,916) -------- -------- -------- -------- CAPITAL SHARE TRANSACTIONS: Class I Shares: Proceeds from Shares Issued 5,731 27,826 6,551 15,742 Reinvestments of Cash Distributions 1,539 5,616 350 704 Cost of Shares Redeemed (8,334) (30,171) (10,616) (14,730) -------- -------- -------- -------- Total Class I Capital Share Transactions (1,064) 3,271 (3,715) 1,716 -------- -------- -------- -------- Class A Shares: Proceeds from Shares Issued -- -- 3,653 2,270 Reinvestments of Cash Distributions -- -- 233 413 Cost of Shares Redeemed -- -- (739) (1,639) -------- -------- -------- -------- Total Class A Capital Share Transactions -- -- 3,147 1,044 -------- -------- -------- -------- Net Increase (Decrease) in Net Assets from Capital Share Transactions (1,064) 3,271 (568) 2,760 -------- -------- -------- -------- Total Increase in Net Assets 1,867 4,358 952 11,463 -------- -------- -------- -------- NET ASSETS: Beginning of Period 126,334 121,976 165,977 154,514 -------- -------- -------- -------- End of Period $128,201 $126,334 $166,929 $165,977 ======== ======== ======== ======== Undistributed Net Investment Income $ 5 $ 2 $ 4 $ 7 ======== ======== ======== ======== SHARE TRANSACTIONS: Class I Shares: Shares Issued 532 2,641 613 1,507 Shares Issued in Lieu of Cash Distributions 142 524 33 67 Shares Redeemed (770) (2,851) (993) (1,412) -------- -------- -------- -------- Total Class I Share Transactions (96) 314 (347) 162 -------- -------- -------- -------- Class A Shares: Shares Issued -- -- 341 218 Shares Issued in Lieu of Cash Distributions -- -- 22 39 Shares Redeemed -- -- (69) (156) -------- -------- -------- -------- Total Class A Share Transactions -- -- 294 101 -------- -------- -------- -------- Net Increase (Decrease) in Shares Outstanding from Share Transactions (96) 314 (53) 263 ======== ======== ======== ========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR ZERO SHARES, OR HAVE BEEN ROUNDED TO $0 OR ZERO SHARES. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. Bishop Street Funds 38 Bishop Street Funds STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2010 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 2009 (IN THOUSANDS)
Government Money Market Fund -------------------- 2010 2009 -------- --------- INVESTMENT ACTIVITIES FROM OPERATIONS: Net Investment Income $ -- $ 47 Net Realized Gain on Investments -- 55 -------- --------- Increase in Net Assets Resulting from Operations -- 102 -------- --------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Net Investment Income: Class I Shares -- (47) Class A Shares -- -- Capital Gains: Class I Shares -- (26) Class A Shares -- (15) -------- --------- Total Dividends and Distributions -- (88) -------- --------- CAPITAL SHARE TRANSACTIONS (ALL AT $1.00 PER SHARE): Class I Shares: Proceeds from Shares Issued 120,478 384,869 Reinvestments of Cash Distributions -- 51 Cost of Shares Redeemed (88,901) (466,696) -------- --------- Total Class I Capital Share Transactions 31,577 (81,776) -------- --------- Class A Shares: Proceeds from Shares Issued 17,025 47,093 Reinvestments of Cash Distributions -- 15 Cost of Shares Redeemed (20,099) (62,319) -------- --------- Total Class A Capital Share Transactions (3,074) (15,211) -------- --------- Net Increase (Decrease) in Net Assets from Capital Share Transactions 28,503 (96,987) -------- --------- Total Increase (Decrease) in Net Assets 28,503 (96,973) -------- --------- NET ASSETS: Beginning of Period 127,638 224,611 -------- --------- End of Period $156,141 $ 127,638 ======== =========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2010 www.bishopstreetfunds.com 39 Bishop Street Funds FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2010 (UNAUDITED) AND THE YEARS ENDED DECEMBER 31,
INVESTMENT ACTIVITIES DIVIDENDS AND --------------------------- TOTAL DISTRIBUTIONS FROM NET ASSET NET NET REALIZED INVESTMENT -------------------- TOTAL VALUE, INVESTMENT AND UNREALIZED ACTIVITIES NET DIVIDENDS BEGINNING INCOME GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND OF PERIOD (LOSS)(1) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS --------- ---------- -------------- ---------- ---------- ------- ------------- STRATEGIC GROWTH FUND CLASS I SHARES: 2010 $10.64 $(0.01) $(0.80) $(0.81) $ -- $ -- $ -- 2009 8.08 --** 2.56 2.56 -- -- -- 2008 14.05 (0.02) (5.73) (5.75) -- (0.22) (0.22) 2007 14.84 (0.03) 1.53 1.50 -- (2.29) (2.29) 2006 14.35 (0.03) 1.41 1.38 -- (0.89) (0.89) 2005 13.08 (0.05) 1.56 1.51 -- (0.24) (0.24) DIVIDEND VALUE FUND CLASS I SHARES: 2010 $ 7.83 $ 0.08 $(0.56) $(0.48) $(0.07) $ -- $(0.07) 2009 6.02 0.06 1.81 1.87 (0.06) -- (0.06) 2008 10.54 0.07 (4.47) (4.40) (0.07) (0.05) (0.12) 2007 10.62 0.04 0.52 0.56 (0.04) (0.60) (0.64) 2006(2) 10.00 0.04 0.62 0.66 (0.04) -- (0.04) HIGH GRADE INCOME FUND CLASS I SHARES: 2010 $10.65 $ 0.20 $ 0.25 $ 0.45 $(0.20) $ -- $(0.20) 2009 10.56 0.43 0.44 0.87 (0.43) (0.35) (0.78) 2008 10.15 0.43 0.41 0.84 (0.43) -- (0.43) 2007 9.94 0.44 0.21 0.65 (0.44) -- (0.44) 2006 10.06 0.41 (0.12) 0.29 (0.41) -- (0.41) 2005 10.33 0.39 (0.19) 0.20 (0.39) (0.08) (0.47) HAWAII MUNICIPAL BOND FUND CLASS I SHARES: 2010 $10.62 $ 0.19 $ 0.09 $ 0.28 $(0.19) $ -- $(0.19) 2009 10.05 0.38 0.57 0.95 (0.38) -- (0.38) 2008 10.56 0.40 (0.51) (0.11) (0.40) -- (0.40) 2007 10.77 0.42 (0.16) 0.26 (0.42) (0.05) (0.47) 2006 10.77 0.43 0.04 0.47 (0.43) (0.04) (0.47) 2005 11.02 0.43 (0.16) 0.27 (0.43) (0.09) (0.52) CLASS A SHARES: 2010 $10.62 $ 0.18 $ 0.09 $ 0.27 $(0.18) $ -- $(0.18) 2009 10.05 0.36 0.57 0.93 (0.36) -- (0.36) 2008 10.56 0.38 (0.51) (0.13) (0.38) -- (0.38) 2007 10.77 0.39 (0.16) 0.23 (0.39) (0.05) (0.44) 2006 10.77 0.40 0.04 0.44 (0.40) (0.04) (0.44) 2005 11.02 0.41 (0.16) 0.25 (0.41) (0.09) (0.50)
+ TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER. * ANNUALIZED. ** AMOUNT REPRESENTS LESS THAN $0.01. (1) PER SHARE NET INVESTMENT INCOME AMOUNT CALCULATED USING AVERAGE SHARES. (2) COMMENCED OPERATIONS ON MAY 3, 2006. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. Bishop Street Funds 40
RATIO OF RATIO OF EXPENSES RATIO OF NET NET ASSET NET ASSETS, EXPENSES TO TO AVERAGE INVESTMENT VALUE, END OF AVERAGE NET ASSETS INCOME (LOSS) PORTFOLIO END OF TOTAL PERIOD NET EXCLUDING FEE TO AVERAGE TURNOVER PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS RATE - --------- ------- ----------- ----------- ----------------- ------------- --------- $ 9.83 (7.61)% $ 49,377 1.14%* 1.37%* (0.14)%* 26% 10.64 31.68 60,929 1.11 1.34 0.00 54 8.08 (41.46) 62,237 1.06 1.29 (0.19) 73 14.05 10.10 126,384 1.07 1.30 (0.22) 61 14.84 9.78 142,929 1.06 1.30 (0.23) 53 14.35 11.52 123,341 1.07 1.31 (0.35) 55 $ 7.28 (6.15)% $ 47,607 1.05%* 1.45%* 1.92%* 79% 7.83 31.28 50,259 1.05 1.36 0.89 82 6.02 (42.02) 51,859 1.05 1.30 0.84 75 10.54 5.24 101,342 1.05 1.31 0.38 65 10.62 6.63 102,850 1.05* 1.32* 0.64* 51 $10.90 4.29% $128,201 0.76%* 1.17%* 3.81%* 21% 10.65 8.41 126,334 0.76 1.13 4.08 82 10.56 8.53 121,976 0.76 1.10 4.22 28 10.15 6.67 136,223 0.76 1.11 4.38 26 9.94 2.96 141,448 0.76 1.12 4.12 41 10.06 2.00 141,439 0.76 1.13 3.82 45 $10.71 2.65% $137,436 0.55%* 0.97%* 3.58%* 18% 10.62 9.63 139,872 0.55 0.95 3.68 27 10.05 (1.02) 130,807 0.55 0.92 3.91 36 10.56 2.47 144,828 0.55 0.93 3.92 25 10.77 4.42 138,333 0.55 0.93 3.99 47 10.77 2.51 145,213 0.55 0.93 3.97 41 $10.71 2.53% $ 29,493 0.80%* 1.22%* 3.33%* 18% 10.62 9.35 26,105 0.80 1.20 3.43 27 10.05 (1.27) 23,707 0.80 1.17 3.66 36 10.56 2.21 29,115 0.80 1.18 3.67 25 10.77 4.16 30,421 0.80 1.18 3.74 47 10.77 2.25 31,515 0.80 1.18 3.72 41
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2010 www.bishopstreetfunds.com 41 Bishop Street Funds FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE SIX-MONTH PERIOD ENDED JUNE 30, 2010 (UNAUDITED) AND THE YEARS ENDED DECEMBER 31,
INVESTMENT ACTIVITIES DIVIDENDS AND --------------------------- TOTAL DISTRIBUTIONS FROM NET ASSET NET REALIZED INVESTMENT -------------------- TOTAL VALUE, NET AND UNREALIZED ACTIVITIES NET DIVIDENDS BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL AND OF YEAR INCOME(1) INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS --------- ---------- -------------- ---------- ---------- ------- ------------- GOVERNMENT MONEY MARKET FUND CLASS I SHARES: 2010 $1.00 $ -- $-- $ -- $ -- $-- $ -- 2009 1.00 --* --* --* --* --* --* 2008 1.00 0.02 --* 0.02 (0.02) -- (0.02) 2007 1.00 0.05 -- 0.05 (0.05) -- (0.05) 2006 1.00 0.05 -- 0.05 (0.05) -- (0.05) 2005 1.00 0.03 -- 0.03 (0.03) -- (0.03) CLASS A SHARES: 2010 $1.00 $ -- $-- $ -- $ -- $-- $ -- 2009 1.00 --* --* --* --* --* --* 2008 1.00 0.02 --* 0.02 (0.02) -- (0.02) 2007 1.00 0.05 -- 0.05 (0.05) -- (0.05) 2006 1.00 0.04 -- 0.04 (0.04) -- (0.04) 2005 1.00 0.03 -- 0.03 (0.03) -- (0.03)
+ TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD HAVE BEEN LOWER. * AMOUNT REPRESENTS LESS THAN $0.01. ** ANNUALIZED. (1) PER SHARE NET INVESTMENT INCOME AMOUNT CALCULATED USING AVERAGE SHARES. (2) THE RATIO OF EXPENSES TO AVERAGE NET ASSETS INCLUDES THE IMPACT OF THE COST OF THE TREASURY GUARANTEE PROGRAM. IF THIS EXPENSE HAD BEEN SUBJECT TO THE ADVISER'S VOLUNTARY EXPENSE LIMITATION, THE RATIO WOULD HAVE BEEN .50% FOR CLASS I SHARES AND .75% FOR CLASS A SHARES, FOR FISCAL YEAR ENDED 2008. (SEE NOTE 8). AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. Bishop Street Funds 42
RATIO OF RATIO OF EXPENSES RATIO OF NET NET ASSET NET ASSETS, EXPENSES TO TO AVERAGE INVESTMENT VALUE, END OF AVERAGE NET ASSETS INCOME END OF TOTAL PERIOD NET EXCLUDING FEE TO AVERAGE PERIOD RETURN+ (000) ASSETS WAIVERS NET ASSETS - --------- ------- ----------- ----------- ----------------- ------------ $1.00 0.00% $113,983 0.17%** 0.94%** 0.00%** 1.00 0.05 82,405 0.33 0.89 0.04 1.00 2.18 164,165 0.51(2) 0.88 2.19 1.00 4.86 179,725 0.50 0.86 4.75 1.00 4.63 159,044 0.50 0.86 4.55 1.00 2.78 170,455 0.50 0.87 2.73 $1.00 0.00% $ 42,158 0.16%** 1.19%** 0.00%** 1.00 0.03 45,233 0.35 1.14 0.00 1.00 1.93 60,446 0.76(2) 1.13 1.94 1.00 4.60 63,568 0.75 1.11 4.50 1.00 4.37 59,212 0.75 1.11 4.33 1.00 2.53 35,530 0.75 1.12 2.60
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. June 30, 2010 www.bishopstreetfunds.com 43 Bishop Street Funds (UNAUDITED) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2010 THE AMOUNTS INCLUDED IN THE NOTES TO FINANCIAL STATEMENTS ARE IN THOUSANDS UNLESS OTHERWISE NOTED. 1. ORGANIZATION The Bishop Street Funds (the "Trust") are registered under the Investment Company Act of 1940, as amended, as an open-end, management investment company. The Bishop Street Funds consist of a series of five funds (each a Fund, collectively the "Funds") which includes the Strategic Growth Fund, Dividend Value Fund (formerly Large Cap Core Equity Fund) High Grade Income Fund, Hawaii Municipal Bond Fund, and the Government Money Market Fund. Each Fund is diversified, with the exception of Hawaii Municipal Bond Fund, which is non-diversified. Class A Shares of the Hawaii Municipal Bond Fund are subject to a sales load as disclosed in the prospectus. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectus provides a description of each Fund's investment objectives, policies and strategies. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Trust. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. SECURITY VALUATION The Funds' investments in equity securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ) are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded, or, if there is no such reported sale, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. Debt securities are priced based upon valuations provided by independent, third-party pricing agents, if available. Such values generally reflect the last reported sales price in the most advantageous market, if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the fair value for such securities. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents. If a security Bishop Street Funds 44 (UNAUDITED) price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker. Securities for which market prices are not "readily available" are valued in accordance with Fair Value Procedures established by the Funds' Board of Trustees (the "Board"). The Funds' Fair Value Procedures are implemented through a Fair Value Pricing Committee (the "Committee") designated by the Funds' Board. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security's trading has been halted or suspended; the security has been delisted from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; or the security's primary pricing source is not able or willing to provide a price. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee. Investment securities held by the Government Money Market Fund are stated at amortized cost, which approximates market value. Under this valuation method, purchase discounts and premiums are accreted and amortized ratably to maturity and are included in interest income. In accordance with the authoritative guidance on fair value measurements and disclosure under GAAP, ASC 820 (formerly FASB Statement No. 157), the Fund discloses fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described below: - Level 1 -- Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date; - Level 2 -- Quoted prices which are not active, or inputs that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and - Level 3 -- Prices, inputs or exotic modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the June 30, 2010 www.bishopstreetfunds.com 45 Bishop Street Funds (UNAUDITED) overall fair value measurement. The following is a summary of the inputs used as of June 30, 2010, in valuing the Funds' investments carried at value: STRATEGIC GROWTH FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL ------- ------- ------- ------- Common Stock $49,120 $-- $-- $49,120 Cash Equivalents 290 -- -- 290 ------- --- --- ------- Total Investments $49,410 $-- $-- $49,410 ======= === === =======
DIVIDEND VALUE FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL ------- ------- ------- ------- Common Stock $44,703 $ -- $-- $44,703 Exchange Traded Fund 785 -- -- 785 Preferred Stock 190 -- -- 190 Cash Equivalents 1,860 -- -- 1,860 Repurchase Agreements -- 8,564 -- 8,564 ------- ------ --- ------- Total Investments $47,538 $8,564 $-- $56,102 ======= ====== === =======
HIGH GRADE INCOME FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL ------- -------- ------- -------- Corporate Obligations $ -- $ 74,638 $-- $ 74,638 U.S. Government Agency Obligations -- 16,819 -- 16,819 Asset-Backed Securities -- 16,413 -- 16,413 U.S. Treasury Obligations -- 9,614 -- 9,614 U.S. Government Mortgage- Backed Obligations -- 5,263 -- 5,263 Municipal Bonds -- 3,805 -- 3,805 Cash Equivalents 674 -- -- 674 Repurchase Agreements -- 14,995 -- 14,995 ---- -------- --- -------- Total Investments $674 $141,547 $-- $142,221 ==== ======== === ========
HAWAII MUNICIPAL BOND FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL ------- -------- ------- -------- Municipal Bonds $ -- $164,346 $-- $164,346 Cash Equivalents 1,554 -- -- 1,554 ------ -------- --- -------- Total Investments $1,554 $164,346 $-- $165,900 ====== ======== === ========
Bishop Street Funds 46 (UNAUDITED) GOVERNMENT MONEY MARKET FUND
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL ------- -------- ------- -------- U.S. Government Agency Obligations $ -- $120,987 $-- $120,987 U.S. Treasury Obligations -- 27,998 -- 27,998 Cash Equivalents 10,685 -- -- 10,685 ------- -------- --- -------- Total Investments $10,685 $148,985 $-- $159,670 ======= ======== === ========
For the six months ended June 30, 2010, there have been no significant changes to the Funds' fair value methodologies. In January 2010, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2010-6, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements, ASU No. 2010-6 enhances and clarifies existing fair value measurement disclosure requirements and is effective for interim and annual periods beginning after December 15, 2009. The Trust adopted ASU No. 2010-6 on January 1, 2010. The adoption of ASU No. 2010-6 did not have any impact on the Trust's financial statements. FEDERAL INCOME TAXES It is each Fund's intention to continue to qualify as a regulated investment company for federal income tax purposes under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its taxable income and net capital gains. Accordingly, no provision for federal income taxes is required. The Funds evaluate tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether it is "more-likely-than- not" (i.e., greater than 50-percent) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Funds did not record any tax provision in the current period. However, management's conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., the last 3 tax year ends, as applicable), on-going analysis of and changes to tax laws, regulations and interpretations thereof. SECURITY TRANSACTIONS AND INVESTMENT INCOME Security transactions are accounted for on trade date. Costs used in determining net realized capital gains and losses on the sale of securities are on the basis of specific identification. Interest income is recorded on the accrual basis and dividend income is recorded on ex-dividend date. June 30, 2010 www.bishopstreetfunds.com 47 Bishop Street Funds (UNAUDITED) Discounts and premiums are accreted or amortized over the life of each security and are recorded as interest income. The High Grade Income and Hawaii Municipal Bond Funds use the effective interest method. The Government Money Market Fund uses the straight line method, which approximates the effective interest method. REPURCHASE AGREEMENTS In connection with transactions involving repurchase agreements, a third party custodian bank takes possession of the underlying securities ("collateral"), the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. Such collateral will be cash, debt securities issued or guaranteed by the U.S. Government, securities that at the time the repurchase agreement is entered into are rated in the highest category by a nationally recognized statistical rating organization ("NRSRO") or unrated securities that are of comparable quality to securities that are rated in the highest rating category by an NRSRO, as determined by the Adviser. In the event of default on the obligation to repurchase, the Funds have the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization and/or retention of the collateral or proceeds may be subject to legal proceedings. CLASSES Class-specific expenses are borne by the applicable class of shares. Income, realized and unrealized gains/losses and non class-specific expenses are allocated to the respective class on the basis of relative daily net assets. Distribution fees are the only class-specific expense. EXPENSES Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses of the Funds are prorated to the Funds on the basis of relative net assets. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS The Strategic Growth and Dividend Value Funds declare and pay dividends from any net investment income, if available, on a quarterly basis. Dividends from net investment income are declared daily and paid on a monthly basis for the High Grade Income, Hawaii Municipal Bond, and the Government Money Market Funds. Any net realized capital gains will be distributed at least annually for all Funds. Distributions to shareholders are recorded on the ex-dividend date. FRONT-END SALES COMMISSION Front-end sales commissions (the "sales charge") are not recorded as expenses of the Hawaii Municipal Bond Fund. Front-end sales commissions are deducted from proceeds from the sales of Hawaii Municipal Bond Fund shares prior to investment in Class A shares. Bishop Street Funds 48 (UNAUDITED) CASH OVERDRAFT CHARGES Per the terms of an informal agreement with Union Bank, N.A., the custodian of the Funds, if a Fund has a cash overdraft on a given day, it will be assessed an overdraft charge of the Prime Rate plus 4.00%. Cash overdraft charges are included in miscellaneous expenses on the Statements of Operations. For the six months ended June 30, 2010, there were no cash overdrafts. 3. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENT Investment advisory services are provided to the Funds by Bishop Street Capital Management (the "Adviser"), a registered adviser and wholly owned subsidiary of First Hawaiian Bank. First Hawaiian Bank is a subsidiary of Banc West Corporation, itself a subsidiary of BNP Paribas. The Adviser is entitled to receive an annual fee of 0.74% of the average daily net assets of the Strategic Growth and the Dividend Value Funds, 0.55% of the average daily net assets of the High Grade Income Fund, 0.35% of the average daily net assets of the Hawaii Municipal Bond Fund, and 0.30% of the average daily net assets of the Government Money Market Fund. Beginning April 30, 2010, the Adviser has contractually agreed to waive a portion of its advisory fee to the extent necessary to keep operating expenses at or below certain percentages of the respective average daily net assets. The contractual expense limitations are as follows: Strategic Growth Fund, Class I Shares 1.25% Dividend Value Fund, Class I Shares 1.05% High Grade Income Fund, Class I Shares 0.76% Hawaii Municipal Bond Fund, Class I Shares 0.55% Hawaii Municipal Bond Fund, Class A Shares 0.80% Government Money Market Fund, Class I Shares 0.50% Government Money Market Fund, Class A Shares 0.75%
These fees and waivers are labeled on the Statement of Operations as "Investment Adviser Fees." BNP Paribas Asset Management, Inc. ("BNP PAM") serves as the investment sub-adviser for the Strategic Growth Fund, pursuant to a sub-adviser agreement. BNP PAM is entitled to receive from the Adviser a fee, computed daily and paid monthly, at the annual rate of 0.37% of the average daily net assets of the Strategic Growth Fund. Fischer Francis Trees & Watts, Inc. ("FFTW") serves as the investment sub-adviser for the Government Money Market Fund, pursuant to a sub-adviser agreement dated December 15, 2006 as approved by shareholders on December 15, 2006. FFTW is entitled to receive from the Adviser a fee, computed daily and paid monthly, at the annual rate June 30, 2010 www.bishopstreetfunds.com 49 Bishop Street Funds (UNAUDITED) of 0.060% of the average daily net assets of the Government Money Market Fund up to $500 million and 0.020% of the average daily net assets of the Government Money Market Fund in excess of $500 million. Columbia Management Advisors, LLC ("Columbia") serves as the investment sub-adviser for the Dividend Value Fund pursuant to a sub-adviser agreement dated May 24, 2010, Columbia is entitled to receive from the Adviser a fee, computed daily and paid monthly, at the annual rate of 0.36% of the first $75 million, 0.35% of the next $75 million, 0.325% of the next $100 million, 0.30% of the next $250 million and 0.25% of the assets in excess of $500 million. Union Bank, N.A. acts as custodian (the "Custodian") for the Funds. The Custodian plays no role in determining the investment policies of the Funds or which securities are to be purchased or sold by the Funds. These fees are disclosed on the Statement of Operations as "Custodian Fees." 4. ADMINISTRATIVE, TRANSFER AGENT AND DISTRIBUTION SERVICES Pursuant to an administration agreement dated January 27, 1995 (the "Agreement"), SEI Investments Global Funds Services ("GFS"), a wholly owned subsidiary of SEI Investments Company, acts as the Trust's Administrator. Under the terms of the Agreement, GFS is entitled to receive an annual fee of 0.20% of the average daily net assets of the Funds, and has voluntarily agreed to waive its administrative fee to 0.12% of each of the Funds' average daily net assets excluding the Hawaii Municipal Bond Fund which is waived to 0.07% of its average daily net assets. These fees and waivers are labeled as "Administrative Fees" on the Statement of Operations. Pursuant to an agreement dated January 30, 1995, DST Systems, Inc. ("DST") acts as the Transfer Agent of the Trust. As such, DST provides transfer agency, dividend disbursing and shareholder services to the Trust. These fees are disclosed on the Statement of Operations as "Transfer Agent Fees." SEI Investments Distribution Co. ("SIDCO"), a wholly owned subsidiary of SEI Investments Company, acts as the Trust's Distributor pursuant to a distribution agreement dated June 10, 1999. The Funds have adopted a Distribution Plan (the "Plan") on behalf of Class A Shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plan provides that Class A Shares will bear the cost of their distribution expenses. SIDCO, as compensation for its services under the Plan, receives a distribution fee, computed daily and payable monthly, of 0.25% of the average daily net assets attributable to each Fund's Class A Shares. This fee is disclosed as "Distribution Fees, Class A" on the Statement of Operations. Bishop Street Funds 50 (UNAUDITED) The Trust has adopted and entered into a shareholder service plan and agreement with SIDCO. Each Fund pays to SIDCO a shareholder servicing fee not to exceed an annual rate of 0.25% of the average daily net asset value of all shares of each fund, which is computed daily and paid monthly. Under the shareholder service plan, SIDCO may perform, or may compensate other service providers for performing various shareholder and administrative services. SIDCO may also retain as profit any difference between the fee it receives and amount it pays to third parties. For the period, SIDCO paid the entire amount of fees received under the shareholder service plan to First Hawaiian Bank, the parent company of Bishop Street Capital Management, for shareholder services performed for the Funds. SIDCO has voluntarily agreed to waive a portion of its shareholder servicing fee to the extent necessary to keep operating expenses at or below certain percentages of each Fund's respective average daily net assets. Additionally, SIDCO has voluntarily agreed to waive a portion of its shareholder servicing fee in order to limit the one-day net income yield of the Government Money Market Fund, to not less than 0.0000% of the average daily net assets. These fees and waivers are represented as "Shareholder Servicing Fees" on the Statement of Operations. The Adviser and SIDCO have voluntarily agreed to further waive and reduce their fees and/or reimburse certain expenses of the Government Money Market Fund in order to maintain a one-day net income yield (yield floor) of the Fund of not less than 0.00% of the Fund's average daily net assets. The following table shows waivers, with respect to such yield floor for the six months ended June 30, 2010:
Investment Shareholder Advisory Fee Servicing Fee Waived/Reimbursed (000) Waiver (000) - ----------------------- ------------------ $210 $66
5. TRANSACTIONS WITH AFFILIATES Certain officers of the Trust are also officers of SEI Investments Global Funds Services (the "Administrator"), a wholly owned subsidiary of SEI Investments Company, and/or SEI Investments Distribution Co. (the "Distributor"). Such officers are paid no fees by the Trust for serving as officers of the Trust. A portion of the services provided by the Chief Compliance Officer ("CCO") and his staff, whom are employees of the Administrator, are paid for by the Trust as incurred. The services include regulatory oversight of the Trust's Advisers and service providers as required by SEC regulations. The CCO's services have been approved by and are reviewed by the Board. These fees are disclosed on the Statement of Operations as "Chief Compliance Officer Fees." June 30, 2010 www.bishopstreetfunds.com 51 Bishop Street Funds (UNAUDITED) 6. SECURITIES LENDING The Funds may lend securities having a market value up to one-third of each Fund's total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments. It is each Fund's policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Funds if and to the extent that the market value of the securities loans were to increase and the borrower did not increase the collateral accordingly, and the borrower fails to return the securities. The Funds could also experience delays and costs in gaining access to the collateral. The Funds bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. At June 30, 2010, six counterparties held 100% of the total securities on loan of the Dividend Value Fund and six counterparties held 100% of the total securities on loan of the High Grade Income Fund. 7. INVESTMENT TRANSACTIONS The cost of security purchases and the proceeds from the sale and maturities of securities, other than short-term investments, for the six months ended June 30, 2010 are presented below for the Funds.
Strategic Dividend High Grade Hawaii Growth Value Income Municipal Fund Fund Fund Bond Fund --------- -------- ---------- --------- Purchases U.S. Government Securities $ -- $ -- $17,584 $ -- Other 14,594 38,797 8,601 30,306 Sales and Maturities U.S. Government Securities $ -- $ -- $ 6,956 $ -- Other 22,269 39,253 17,876 29,911
Bishop Street Funds 52 (UNAUDITED) 8. FEDERAL TAX INFORMATION The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations which may differ from accounting principles generally accepted in the United States of America. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for the reporting period may differ from distributions during such period. These book/tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to undistributed net investment income/(loss), paid-in capital or accumulated net realized gain/(loss), as appropriate, in the period that the differences arise. The tax character of dividends and distributions declared during the years ended December 31, 2009 and 2008 were as follows:
Ordinary Tax Exempt Long-Term Income Income Capital Gain Total -------- ---------- ------------ ------ Strategic Growth Fund 2009 $ -- $ -- $ -- $ -- 2008 -- -- 1,792 1,792 Dividend Value Fund 2009 $ 437 $ -- $ -- $ 437 2008 663 -- 405 1,068 High Grade Income Fund 2009 $5,220 $ -- $3,894 $9,114 2008 5,571 -- -- 5,571 Hawaii Municipal Bond Fund 2009 $ -- $5,916 $ -- $5,916 2008 -- 6,367 -- 6,367 Government Money Market Fund 2009 $ 88 $ -- $ -- $ 88 2008 4,965 -- -- 4,965
June 30, 2010 www.bishopstreetfunds.com 53 Bishop Street Funds (UNAUDITED) As of December 31, 2009, the components of Distributable Earnings (Accumulated Losses) on a tax basis were as follows:
Strategic Dividend High Grade Hawaii Growth Value Income Municipal Fund Fund Fund Bond Fund --------- -------- ---------- --------- Undistributed net investment income $ -- $ -- $ 620 $ -- Undistributed long term capital gain income -- -- 557 -- Undistributed tax exempt income -- -- -- 2 Capital loss carryforwards (12,703) (20,193) -- (1,020) Post-October losses (830) (584) -- (24) Unrealized appreciation (depreciation) 5,204 (1,350) 6,371 3,665 --------- -------- ------ ------- Total Distributable Earnings (Accumulated Losses) $ (8,329) $(22,127) $7,548 $ 2,623 ========= ======== ====== =======
Post-October losses represent losses realized on investment transactions from November 1, 2009 through December 31, 2009 that, in accordance with Federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year. For Federal income tax purposes, capital loss carryforwards represent realized losses of the Funds that may be carried forward for a maximum period of eight years and applied against future capital gains as follows:
Strategic Dividend Hawaii Growth Value Municipal Fund Fund Bond Fund --------- -------- ---------- Dec. 2016 $ 839 $ 5,569 $ 410 Dec. 2017 11,864 14,624 610 ------- ------- ------ Total $12,703 $20,193 $1,020 ======= ======= ======
During the year ended December 31, 2009, the High Grade Income Fund and the Government Money Market Fund utilized capital loss carryforwards of $983 and $14, respectively, to offset realized capital gains. Bishop Street Funds 54 (UNAUDITED) The aggregate gross unrealized appreciation and depreciation of securities held by the Strategic Growth, Dividend Value, High Grade Income, and Hawaii Municipal Bond Funds for Federal income tax purposes at June 30, 2010 were as follows:
Strategic Dividend High Grade Hawaii Growth Value Income Municipal Fund Fund Fund Bond Fund --------- -------- ---------- --------- Federal Tax Cost $48,805 $59,608 $133,937 $161,323 ------- ------- -------- -------- Gross Unrealized Appreciation 5,510 1,137 8,414 5,095 Gross Unrealized Depreciation (4,905) (4,643) (130) (518) ------- ------- -------- -------- Net Unrealized Appreciation (Depreciation) $ 605 $(3,506) $ 8,284 $ 4,577 ======= ======= ======== ========
For Federal income tax purposes, the Government Money Market Fund's aggregate tax cost is equal to its book cost. 9. RISKS The Hawaii Municipal Bond Fund invests primarily in debt instruments in the state of Hawaii. The issuers' ability to meet their obligations may be affected by economic developments in that state. In addition, each Fund's investments in debt securities are subject to "credit risk," which is the risk that an issuer will be unable, or will be perceived to be unable, to repay its obligations at maturity. Funds that invest primarily in high quality debt securities generally are subject to less credit risk than funds that invest in lower quality debt securities. Certain debt securities are backed by credit enhancements from various financial institutions and financial guarantee assurance agencies. These credit enhancements reinforce the credit quality of the individual securities; however, if any of the financial institutions or financial guarantee assurance agencies' credit quality should deteriorate, it could cause the individual security's credit quality to change. Additionally, if any of the Funds concentrate their credit enhancements in any one financial institution, the risk of credit quality deterioration increases. The value of asset-backed securities may be affected by the credit risk of the servicing agent for the pool, the originator of the loans or receivables, or the financial institution(s) providing the credit support. In addition to credit risk, asset-backed securities and other securities with early redemption features are subject to pre-payment risk. During periods of declining interest rates, prepayment of loans underlying asset-backed securities can be expected to accelerate or an issuer may retire an outstanding bond early to reduce interest costs. A Fund's ability to maintain positions in such securities will be affected by June 30, 2010 www.bishopstreetfunds.com 55 Bishop Street Funds (UNAUDITED) reductions in the principal amount of such securities resulting from prepayments, and its ability to reinvest the returns of principal at comparable yields is subject to generally prevailing interest rates at that time. In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be established; however, based on experience, the risk of loss from such claims are considered remote. 10. LINE OF CREDIT The Funds entered into an agreement which enables them to participate in a $5 million unsecured committed revolving line of credit on a first come, first serve basis, with Union Bank, N.A. (the "Bank") which expires June 9, 2011. The proceeds from the borrowings shall be used to finance the Funds short term general working capital requirements, including the funding of shareholder redemptions. Interest is charged to the Funds based on their borrowings during the year at the Bank current reference rate minus 1%. As of June 30, 2010 the Funds had no borrowings outstanding. For the six months ended June 30, 2010, the Funds had borrowings costs of $534 for the Strategic Growth Fund, $0 for the Dividend Value Fund, $0 for the High Grade Income Fund, and $7 for the Hawaii Municipal Bond Fund, over a period of 32 days at a weighted average interest rate of 2.25%. 11. OTHER At June 30, 2010, the percentage of total shares outstanding held by shareholders for each Fund, which comprised an omnibus account that was held on behalf of several individual shareholders, was as follows:
Number of % of Outstanding Shareholders Shares ------------ ------------------ Strategic Growth Fund, Class I Shares 2 95.83% Dividend Value Fund, Class I Shares 2 99.47 High Grade Income Fund, Class I Shares 3 96.76 Hawaii Municipal Bond Fund, Class I Shares 2 90.16 Hawaii Municipal Bond Fund, Class A Shares 3 26.70 Government Money Market Fund, Class I Shares 3 97.64 Government Money Market Fund, Class A Shares 1 99.75
Bishop Street Funds 56 (UNAUDITED) 12. ACCOUNTING PRONOUNCEMENT In January 2010, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2010-6, FAIR VALUE MEASUREMENTS AND DISCLOSURES (TOPIC 820): IMPROVING DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS. ASU No. 2010-6 enhances and clarifies existing fair value measurement disclosure requirements and is effective for interim and annual periods beginning after December 15, 2009. The Fund is currently evaluating the impact, if any, of applying the provisions of ASU No. 2010-6. 13. SUBSEQUENT EVENT The Company has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were available to be issued. This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments. June 30, 2010 www.bishopstreetfunds.com 57 Bishop Street Funds (UNAUDITED) DISCLOSURE OF FUND EXPENSES All mutual funds have operating expenses. As a shareholder of a mutual fund you incur two types of costs: (1) transaction costs, including applicable sales charges (loads); and (2) ongoing costs, which include (among others) costs for portfolio management, administrative services, distribution and service (12b-1), shareholder service fees, and shareholder reports like this one. It is important for you to understand the impact of these costs on your investment returns. Operating expenses such as these are deducted from a mutual fund's gross income and directly reduce its final investment return. These expenses are expressed as a percentage of the mutual fund's average net assets; this percentage is known as the mutual fund's expense ratio. The following examples use the expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The table on the next page illustrates your Fund's costs in two ways: - - ACTUAL FUND RETURN. This section helps you to estimate the actual expenses after fee waivers that your Fund incurred over the period. The "Expenses Paid During Period" column shows the actual dollar expense cost incurred by a $1,000 investment in the Fund, and the "Ending Account Value" number is derived from deducting that expense cost from the Fund's gross investment return. You can use this information, together with the actual amount you invested in the Fund, to estimate the expenses you paid over that period. Simply divide your actual account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by the number shown for your Fund under "Expenses Paid During Period." - - HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with those of other mutual funds. It assumes that the Fund had an annual 5% return before expenses during the year, but that the expense ratio (Column 3) for the period is unchanged. This example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to make this 5% calculation. You can assess your Fund's comparative cost by comparing the hypothetical result for your Fund in the "Expenses Paid During Period" column with those that appear in the same charts in the shareholder reports for other funds. NOTE: Because the return is set at 5% for comparison purposes -- NOT your Fund's actual return -- the account values shown may not apply to your specific investment. Bishop Street Funds 58 (UNAUDITED)
Beginning Ending Expenses Account Account Annualized Paid Value Value Expense During 1/1/10 6/30/10 Ratios Period* --------- --------- ---------- -------- STRATEGIC GROWTH FUND -- CLASS I ACTUAL FUND RETURN $1,000.00 $ 923.90 1.14% $5.44 HYPOTHETICAL 5% RETURN 1,000.00 1,019.14 1.14 5.71 DIVIDEND VALUE FUND -- CLASS I ACTUAL FUND RETURN $1,000.00 $ 938.50 1.05% $5.05 HYPOTHETICAL 5% RETURN 1,000.00 1,019.59 1.05 5.26 HIGH GRADE INCOME FUND -- CLASS I ACTUAL FUND RETURN $1,000.00 $1,042.90 0.76% $3.85 HYPOTHETICAL 5% RETURN 1,000.00 1,021.03 0.76 3.81 HAWAII MUNICIPAL BOND FUND -- CLASS I ACTUAL FUND RETURN $1,000.00 $1,026.50 0.55% $2.76 HYPOTHETICAL 5% RETURN 1,000.00 1,022.07 0.55 2.76 HAWAII MUNICIPAL BOND FUND -- CLASS A ACTUAL FUND RETURN $1,000.00 $1,025.30 0.80% $4.02 HYPOTHETICAL 5% RETURN 1,000.00 1,020.83 0.80 4.01 GOVERNMENT MONEY MARKET FUND -- CLASS I ACTUAL FUND RETURN $1,000.00 $1,000.00 0.17% $0.84 HYPOTHETICAL 5% RETURN 1,000.00 1,023.95 0.17 0.85 GOVERNMENT MONEY MARKET FUND -- CLASS A ACTUAL FUND RETURN $1,000.00 $1,000.00 0.16% $0.79 HYPOTHETICAL 5% RETURN 1,000.00 1,024.00 0.16 0.80
* Expenses are equal to the Funds' annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). June 30, 2010 www.bishopstreetfunds.com 59 Bishop Street Funds (UNAUDITED) APPROVAL OF INVESTMENT ADVISORY AGREEMENTS BOARD CONSIDERATIONS IN RE-APPROVING THE ADVISORY AND SUB-ADVISORY AGREEMENTS Pursuant to Section 15(c) of the Investment Company Act of 1940 (the "1940 Act"), the Board of Trustees (the "Board") of Bishop Street Funds (the "Trust") must annually review and re-approve the following agreements (collectively, the "Agreements"): - the Advisory Agreement between Bishop Street Capital Management (the "Adviser") and the Trust, on behalf of the Dividend Value Fund, the Government Money Market Fund, the Hawaii Municipal Bond Fund, the High Grade Income Fund and the Strategic Growth Fund (collectively, the "Funds"); - the Sub-Advisory Agreement between the Adviser and BNP Paribas Asset Management, Inc. ("BNP Paribas"), on behalf of the Strategic Growth Fund; - and the Sub-Advisory Agreement between the Adviser and Fischer Francis Tree & Watts, Inc. (FFT&W"), on behalf of the Government Money Market Fund (BNP Paribas and FFT&W collectively referred to as, the "Sub-Advisers"). After their initial two-year terms, the Agreements must be re-approved: (i) by the vote of the Trustees or by a vote of the shareholders of each Fund; and (ii) by the vote of a majority of the Trustees who are not parties to the Agreements or "interested persons" of any party thereto, as defined in the 1940 Act (the "Independent Trustees"), cast in person at a meeting called for the purpose of voting on such approval. Each year, the Board calls and holds a meeting to decide whether to renew the Agreements for additional one-year terms. In preparation for the meeting, the Board requests and reviews a wide variety of information from the Advisers and the Sub-Advisers. The Trustees use this information, as well as other information that the Adviser, the Sub-Advisers and other service providers of the Funds may submit to the Board, to help them decide whether to renew the Agreements for an additional year. Prior to this year's meeting held on February 16-17, 2010, the Board, including the Independent Trustees advised by their independent legal counsel, reviewed written materials from the Adviser and the Sub-Advisers regarding, among other things: (i) the nature, extent and quality of the services to be provided by the Adviser and the Sub-Advisers; (ii) the investment performance of the Funds, the Adviser and the Sub-Advisers; (iii) the costs of the services to be provided and profits to be realized by the Adviser, the Sub-Advisers, and their affiliates from their relationship with the Funds; (iv) the extent to which economies of scale would be realized as the Funds grow; and (v) whether fee levels reflect these economies of scale for the benefit of Fund investors, as discussed in further detail below. At the meeting, representatives from the Adviser and the Sub-Advisers, along with other Fund service providers, presented additional oral and written information to help Bishop Street Funds 60 (UNAUDITED) the Board evaluate the Adviser and the Sub-Advisers' fees and other aspects of the Agreements. Among other things, representatives from the Adviser and each of the Sub-Advisers presented overviews of their advisory businesses, including the Adviser and each Sub-Adviser's investment personnel, assets under management, investment process and trading practices. The Trustees then discussed the written materials that the Board received before the meeting and the Adviser and the Sub-Advisers' oral presentations and any other information that the Board received at the meeting, and deliberated on the renewal of the Agreements in light of this information. In its deliberations, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and each of the Sub-Advisers and the re-approval of the Agreements, and did not identify any single piece of information discussed below that was all-important, controlling or determinative of its decision. NATURE, EXTENT, AND QUALITY OF SERVICES PROVIDED BY THE ADVISER AND THE SUB-ADVISERS In considering the nature, extent and quality of the services provided by the Adviser and the Sub-Advisers, the Board reviewed the portfolio management services provided by the Adviser and each of the Sub-Advisers to the Fund(s) they managed, including the quality and continuity of the Adviser and the Sub-Advisers' portfolio management personnel. The most recent investment adviser registration form ("Form ADV") for the Adviser and each of the Sub-Advisers was provided to the Board, as was the response of the Adviser and each Sub-Adviser to a detailed series of questions which included, among other things, information about the background and experience of the portfolio managers primarily responsible for the day-to-day management of each respective Fund. The Trustees also considered other services to be provided by the Adviser and the Sub-Advisers to the Fund(s) they manage, such as selecting broker-dealers for executing portfolio transactions, monitoring adherence to the Funds' investment restrictions, and monitoring compliance with various Fund policies and procedures and with applicable securities regulations. Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services provided to the Funds by the Adviser and the Sub-Advisers. INVESTMENT PERFORMANCE OF THE FUNDS, THE ADVISER AND THE SUB-ADVISERS The Board was provided with information regarding each Fund's performance since the Agreements were last renewed, as well as information regarding each Fund's performance since its inception. The Board also compared each Fund's performance to its benchmark index and other similar mutual funds over various periods of time. The Adviser and the Sub-Advisers provided information regarding and led a discussion of factors impacting the performance of their respective Fund(s) over the past year, outlin- June 30, 2010 www.bishopstreetfunds.com 61 Bishop Street Funds (UNAUDITED) APPROVAL OF INVESTMENT ADVISORY AGREEMENTS ing market conditions and explaining its expectations and strategies for the future. The Board noted that the High Grade Income Fund outperformed its benchmark over various periods. With respect to the Hawaii Municipal Bond Fund, the Board noted that although the Fund had underperformed its benchmark over recent periods of time, its performance was not substantially below that of its respective benchmark and did not necessitate any significant additional review. The Board also noted that although the Strategic Growth Fund had underperformed its benchmark over recent periods of time, its long-term performance was in line with its benchmark and did not necessitate any significant additional review. With respect to the Government Money Market Fund, the Board noted that the Fund was comparable to its benchmark. The Adviser noted that the Dividend Value Fund, formerly the Large Cap Core Equity Fund, had recently changed its sub-adviser, objective, strategy and benchmark and that the information provided for the prior periods reflected the performance of the prior sub-adviser, objective, strategy and benchmark. The Board noted that the Fund's performance was comparable to that of its benchmark index for the prior periods. Based on this information, the Board concluded that each Fund's performance was reasonable as compared to its relevant benchmark and was satisfied with the investment results that the Adviser and each Sub-Adviser had been able to achieve for their respective Fund(s). COSTS OF ADVISORY SERVICES, PROFITABILITY AND ECONOMIES OF SCALE In concluding that the advisory fees payable to the Adviser and each of the Sub-Advisers were reasonable, the Trustees reviewed a report of the fees paid to the Adviser and each Sub-Adviser as well as the costs of services provided by and the profits realized by the Adviser and each of the Sub-Advisers from their relationship with the Funds, and concluded that such profits were not excessive. The Trustees also reviewed reports comparing the expense ratio and advisory fee paid by each Fund to those paid by other comparable mutual funds and noted that each Fund's total fees and expenses were within the range of or below the average fees and expenses incurred by other peer funds. The Board concluded that the advisory fees were the result of arm's length negotiations and appeared reasonable in light of the services rendered. The Board also considered the Adviser and the Sub-Advisers' commitment to managing the Funds, as well as the Adviser's willingness to convert expense limitations and fee waiver arrangements from voluntary to contractual. In addition, the Board considered whether economies of scale were realized during the current contract period, but did not conclude that such economies of scale had yet been achieved with respect to the Funds. Based on the Board's deliberations and its evaluation of the information described above, the Board, including all of the Independent Trustees, unanimously: (a) concluded that terms of each Agreement are fair and reasonable; (b) concluded that the Bishop Street Funds 62 (UNAUDITED) Adviser and each of the Sub-Adviser's fees are reasonable in light of the services that the Adviser and each of the Sub-Advisers provide to the respective Fund(s); and (c) agreed to renew each Agreement for another year. DIVIDEND VALUE FUND During the reporting period, BSCM, on behalf of the Bishop Street Dividend Value Fund (the "Fund"), entered into: - a new sub-advisory agreement (the "CMA Sub-Advisory Agreement") with Columbia Management Advisors, LLC ("CMA"), which became effective January 25, 2010, after the approval of Fund shareholders, and which replaced the subadvisory agreement with the Fund's then-current sub-adviser (the "Former Sub-Adviser"); and - an interim sub-advisory agreement (the "Interim Agreement") and a new sub-advisory agreement (the "Columbia Sub-Advisory Agreement") with Columbia Management Investment Advisers LLC (formerly RiverSource Investments LLC) ("Columbia"), which became effective May 24, 2010, after the approval of share-holders, as a result of a change in control of CMA and the automatic termination of the CMA Sub-Advisory Agreement. Pursuant to Section 15(c) of the 1940 Act, the Board considered the approval of the CMA Sub-Advisory Agreement, the Interim Agreement and the Columbia Sub-Advisory Agreement on behalf of the Fund as discussed in greater detail below. At an in-person meeting held on November 11-12, 2009, the Board was asked to appoint CMA as a new sub-adviser to the Fund to replace the Former Sub-Adviser and to approve the CMA Sub-Advisory Agreement. The Board was informed that the CMA Sub-Advisory Agreement would also need to be approved by Fund shareholders. In connection with the proposal to appoint CMA as the Fund's new sub-adviser, the Board was also asked to approve a new name, investment objective, strategy and benchmark for the Fund. The Board was informed that the terms of the CMA Sub-Advisory Agreement were substantially similar to the terms of the sub-advisory agreement then in place with the Former Sub-Adviser, with few exceptions, including an increase in sub-advisory fee. The Board noted, however, that the proposed increase in the sub-advisory fee under the CMA Sub-Advisory Agreement would not change the level of the overall advisory fee charged to the Fund by BSCM. The Board was informed that the nature, scope and quality of services to be provided under the CMA Sub-Advisory Agreement would be at least equivalent to the nature, scope and quality of services provided by the Former Sub-Adviser under the terms of its sub-advisory agreement. The Board also was June 30, 2010 www.bishopstreetfunds.com 63 Bishop Street Funds (UNAUDITED) APPROVAL OF INVESTMENT ADVISORY AGREEMENTS informed that Bank of America, N.A. ("Bank of America") had entered into an agreement to sell its long-term asset management business to Ameriprise Financial, Inc. ("Ameriprise"), which would include the sale of CMA (the "Transaction"). The Board noted that the Transaction, which was expected to close during the first part of 2010, would result in the automatic termination of the CMA Sub-Advisory Agreement and that, in order for the successor adviser, Columbia, to serve as sub-adviser to the Fund after the closing of the Transaction, the Board and Fund shareholders would be required to approve the Columbia Sub-Advisory Agreement. At its November 10-11, 2009, the Board, including the Independent Trustees, discussed and approved the CMA Sub-Advisory Agreement. The Board, including the Independent Trustees advised by their independent legal counsel, received and reviewed materials relating to CMA and the CMA Sub-Advisory Agreement in advance of the meeting, and had the opportunity to ask questions and request further information of BSCM and CMA. The materials included, among other things, information regarding: (i) the nature, extent and quality of the services to be provided by CMA; (ii) the investment performance and resources of CMA; (iii) the costs of the services to be provided; and (iv) comparisons of the services to be rendered and the amounts to be paid under the CMA Sub-Advisory Agreement with the services and amounts paid under advisory agreements of the same and other investment advisers, as discussed in further detail below. The Board deferred consideration of the Columbia Sub-Advisory Agreement to a future meeting pending receipt of additional information necessary to evaluate the terms of that Agreement. At an in-person meeting held on February 16-17, 2010, the Board considered and approved the Columbia Sub-Advisory Agreement, which would become effective after approval of the Columbia Sub-Advisory Agreement by shareholders of the Fund. The Board also considered and approved the Interim Agreement in order to maintain continuous sub-advisory services for the Fund after the closing of the Transaction pending shareholder approval of the Columbia Sub-Advisory Agreement. The Interim Agreement became effective on April 30, 2010, the closing date of the Transaction. The Board was informed that the terms of the CMA Sub-Advisory Agreement, the Interim Agreement and the Columbia Sub-Advisory Agreement were the same, except for the parties and the effective date. The Board was also informed that there would be no change to the portfolio managers responsible for the day-to-day management of the Fund, nor would there be any change to the sub-advisory fee. In approving the Interim Agreement and the Columbia Sub-Advisory Agreement, the Board, including the Independent Trustees advised by their independent legal counsel, received and reviewed materials relating to Columbia and the Interim Agreement and the Columbia Sub-Advisory Agreement in advance of the meeting, and had the opportunity to ask Bishop Street Funds 64 (UNAUDITED) questions and request further information of BSCM and Columbia. The materials included, among other things, information regarding: (i) the nature, extent and quality of the services to be provided by Columbia; (ii) the investment performance and resources of Columbia; (iii) the costs of the services to be provided; and (iv) comparisons of the services to be rendered and the amounts to be paid under the Interim Agreement and the Columbia Sub-Advisory Agreement with the services and amounts paid under advisory agreements of the same and other investment advisers, as discussed in further detail below. At the November 10-11, 2009 and the February 16-17, 2010 meetings, representatives from BSCM, CMA and Columbia, along with other service providers of the Fund, pre-sented additional oral and written information to help the Board evaluate proposed fees and other aspects of the CMA and Columbia Sub-Advisory Agreements as well as the Interim Agreement. Among other things, the representatives provided an overview of CMA and Columbia by reviewing key personnel and CMA and Columbia's investment strategies and processes. The Board then discussed the written materials that the Board received before the meetings, CMA and Columbia's oral presentation and any other information that the Board received at the meeting, and deliberated on the approval of the CMA and Columbia Sub-Advisory Agreements and the Interim Agreement in light of this information. The Board noted that there would be no change in the management of the Fund as a result of the Transaction and there were no proposed changes to the nature or scope of sub-advisory services provided to the Fund. At its February 16-17, 2010 meeting, the Board reviewed its findings from its November 10-11, 2009 meeting at which it considered and approved the CMA Sub-Advisory Agreement. In its deliberations, the Board did not identify any single piece of information discussed below that was all-important, controlling or determinative of its decision. NATURE, EXTENT AND QUALITY OF SUB-ADVISORY AND OTHER SERVICES In considering the nature, extent and quality of the services to be provided by CMA and Columbia as sub-adviser to the Fund, the Board reviewed the portfolio management services to be provided by CMA and Columbia to the Fund. Among other things, the Board considered the quality of portfolio management personnel of CMA and Columbia. At the February 16-17, 2010 meeting, the Board noted that after the close of the Transaction, the Fund's portfolio managers under CMA would become employees of Columbia and would serve as the Fund's portfolio managers without interruption. At the November 10-11, 2009 and the February 16-17, 2010 meetings, the Board had the opportunity to speak with, and receive information from, representatives from CMA and Columbia about the background and experience of the portfolio managers who would be primarily responsible for the day-to-day management of the Fund as well as June 30, 2010 www.bishopstreetfunds.com 65 Bishop Street Funds (UNAUDITED) APPROVAL OF INVESTMENT ADVISORY AGREEMENTS CMA and Columbia's compliance policies and procedures, among other information. The Board also considered other services to be provided to the Fund by CMA and Columbia, such as selecting broker-dealers for executing portfolio transactions, monitoring adherence to the Fund's investment restrictions and monitoring compliance with various Fund policies and procedures and with applicable securities regulations. Based on the factors above, as well as those discussed below, the Board concluded that it was satisfied with the nature, extent and quality of the services to be provided to the Fund by CMA and Columbia. INVESTMENT PERFORMANCE OF THE SUB-ADVISERS The Board considered and evaluated the investment performance of the investment management personnel of CMA and Columbia who were expected to manage the Fund. The Board concluded that the historical investment performance record of CMA and its portfolio managers, as well as its experience and performance in managing a large cap value strategy, supported a decision to approve the CMA Sub-Advisory Agreement, the Interim Agreement and the Columbia Sub-Advisory Agreement. COSTS OF SERVICES TO BE PROVIDED, PROFITABILITY AND ECONOMIES OF SCALE The Board considered the Fund's overall fee level and noted that the overall advisory fee charged to the Fund by the Adviser would remain the same under the CMA Sub-Advisory Agreement, the Interim Agreement and the Columbia Sub-Advisory Agreement, noting that any sub-advisory fees would be paid out of the advisory fee the Fund pays the Adviser. Based on its review, the Board determined that the sub-advisory fee was reasonable and appropriate in light of: 1) the services to be provided by CMA and Columbia; 2) the advisory fees and the overall expense ratios of the Fund as com-pared to peer funds, including funds advised by CMA and Columbia and 3) the anticipated profitability to CMA and Columbia. Based on the Board's deliberations and its evaluation of the information described above, the Board, including the Independent Trustees, unanimously concluded, at its November 10-11, 2009 meeting, that the terms of the CMA Sub-Advisory Agreement were fair and reasonable and that the sub-advisory fees were reasonable in light of the services to be provided to the Fund and agreed to approve the CMA Sub-Advisory Agreement. At its February 16-17, 2010 meeting, the Board, including the Independent Trustees, unanimously concluded that the terms of the Interim Agreement and the Columbia Sub-Advisory Agreement were fair and reasonable and that the sub-advisory fees were reasonable in light of the services to be provided to the Fund and agreed to approve the Interim Agreement and the Columbia Sub-Advisory Agreement. Bishop Street Funds 66 Bishop Street Funds (UNAUDITED) SHAREHOLDER VOTING RESULTS At a special meeting held on May 24, 2010, the shareholders of the Dividend Value Fund voted to approve a new investment sub-advisory agreement between Bishop Street Capital Management and Columbia Management Investment Advisers, LLC. The results of the voting were as follows: BISHOP STREET DIVIDEND VALUE FUND
% of No. of Outstanding % of Shares Shares Shares Present --------- ----------- ----------- AFFIRMATIVE 6,198,608 97.00 100.00 AGAINST 0 0 0 ABSTAIN 0 0 0 --------- ----- ------- Total 6,198,608 97.00 100.000% ========= ===== =======
June 30, 2010 www.bishopstreetfunds.com 67 This page intentionally left blank. INVESTMENT ADVISER BISHOP STREET CAPITAL MANAGEMENT HONOLULU, HI 96813 ADMINISTRATOR SEI INVESTMENTS GLOBAL FUNDS SERVICES OAKS, PA19456 DISTRIBUTOR SEI INVESTMENTS DISTRIBUTION CO. OAKS, PA19456 TRANSFER AGENT DST SYSTEMS,INC. KANSAS CITY,MO 64121 CUSTODIAN UNION BANK, N.A. SAN FRANCISCO, CA 94101 LEGAL COUNSEL MORGAN, LEWIS & BOCKIUSLLP PHILADELPHIA, PA 19103 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PRICEWATERHOUSECOOPERS LLP PHILADELPHIA, PA 19103 (BISHOP STREET FUNDS LOGO) FOR MORE INFORMATION ABOUT BISHOP STREET FUNDS, CALL 1-800-262-9565 OR YOUR INVESTMENT SPECIALIST VISIT US ONLINE AT WWW.BISHOPSTREETFUNDS.COM (BISHOP STREET FUNDS LOGO) BISHOP STREET FUNDS P.O. BOX 219721 KANSAS CITY, MO 64121-9721 THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF BISHOP STREET FUNDS' SHAREHOLDERS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. SHARES OF BISHOP STREET FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY FIRST HAWAIIAN BANK OR ANY OF ITS AFFILIATES. SUCH SHARES ARE ALSO NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENT IN SHARES OF MUTUAL FUNDS INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE BISHOP STREET FUNDS ARE DISTRIBUTED BY SEI INVESTMENTS DISTRIBUTION CO.,WHICH IS NOT AFFILIATED WITH FIRST HAWAIIAN BANK, BANK OF THE WEST OR BANCWEST CORPORATION. BANCWEST CORPORATION IS A WHOLLY-OWNED SUBSIDIARY OF BNP PARIBAS. BSF-SA-004-1600 ITEM 2. CODE OF ETHICS. Not applicable for semi-annual report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semi-annual report. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semi-annual report. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. Effective for closed-end management investment companies for fiscal years ending on or after December 31, 2005. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no charge to the procedures by which shareholders may recommend nominees to the registrant's Board of Trustees during the period covered by this report. ITEM 11. CONTROLS AND PROCEDURES. (a) The Registrant's principal executive and principal financial officers, or persons performing similar functions have concluded that the Registrant's disclosure controls and procedures )as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report, are effective based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 270.30a-15(b)) or 240.15d-15(b)). (b) There has been no change in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.3a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over finanicl reporting. ITEMS 12. EXHIBITS. (a)(1) Not applicable for semi-annual report. (a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), is filed herewith. (b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an exhibit. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Bishop Street Funds By (Signature and Title)* /s/ Philip T. Masterson ---------------------------------------- Philip T. Masterson President Date: September 2, 2010 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Philip T. Masterson ---------------------------------------- Philip T. Masterson President Date: September 2, 2010 By (Signature and Title)* /s/ Michael Lawson ---------------------------------------- Michael Lawson Treasurer, Controller & CFO Date: September 2, 2010 * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 g57637_cert302.txt CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Philip T. Masterson, certify that: 1. I have reviewed this report on Form N-CSRS of the Bishop Street Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 2, 2010 /s/ Philip T. Masterson - ----------------------- Philip T. Masterson President CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Michael Lawson, certify that: 1. I have reviewed this report on Form N-CSRS of the Bishop Street Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 2, 2010 /s/ Michael Lawson - ------------------ Michael Lawson Treasurer, Controller & CFO EX-99.906CERT 3 g57637_cert906.txt CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The undersigned, the President of the Bishop Street Funds (the "Funds"), with respect to the Funds' Form N-CSRS for the period ended June 30, 2010, as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1. such Form N-CSRS fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in such Form N-CSRS fairly presents, in all material respects, the financial condition and results of operations of the Funds. Date: September 2, 2010 /s/ Philip T. Masterson ---------------------------------------- Philip T. Masterson President CERTIFICATION Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The undersigned, the Controller and CFO of the Bishop Street Funds (the "Funds"), with respect to the Funds' Form N-CSRS for the period ended June 30, 2010, as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: 1. such Form N-CSRS fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in such Form N-CSRS fairly presents, in all material respects, the financial condition and results of operations of the Funds. Date: September 2, 2010 /s/ Michael Lawson ---------------------------------------- Michael Lawson Treasurer, Controller & CFO -----END PRIVACY-ENHANCED MESSAGE-----