Bishop Street Funds

The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission (the “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.

U.S. stock markets produced strong returns in 2016, driven by solid economic reports and an end-of-the-year rally related to the much anticipated policies of President-Elect Donald Trump. The S&P 500 Index rose 11.95% over the year, while the Nasdaq 100 Stock Index experienced a return of just over 7%. Developed international markets, as measured by the MSCI EAFE Index, gained just over 1% during the year.

While impressive, the nominal returns above do not accurately reflect the severe market volatility that occurred during the year. In the first two months of 2016, the market (S&P 500 Index) declined sharply by -15% on worries of slowing growth in China. Over the next four months, the equity markets clawed their way back to levels near where they started the year but just when things began to feel normal again, the market declined sharply by over -5% in June, due to a surprising vote by the U.K. to leave the European Union. The markets declined modestly again heading into the U.S. Presidential election but since then, have rallied sharply with over 80% of the return attributable to gains earned in the last two months of the year.

Interest rates were equally volatile with the yield on the 10-Year U.S. Treasury note declining 91 basis points to a low of 1.36% in July, and finishing the year at 2.45%. U.S. bond markets experienced small positive returns in 2016, with the Bloomberg Barclays U.S. Aggregate Bond Index increasing 2.65%. Credit was the sector of choice reflecting investor’s penchant to take on risk. Looking ahead, market indicators imply that the trajectory of interest rates will continue higher, a message that has been well communicated by U.S. Federal Reserve.

As the economy continues to mature, economic indicators will continue to be mixed. Positive data points currently include the U.S. labor market, as the unemployment rate holds steady at its lowest level in nearly ten years. Also, earnings projections are forecasted to remain strong despite the muted economic growth experienced last year. A strong U.S. dollar will likely be a headwind for sales abroad so an interesting picture lies ahead.

One new development that we are proud to announce is the recent launch of the Short Duration Bond Fund. This Fund invests in high quality U.S. treasury and government-

issued securities and does not assume the credit risk that is associated with corporate securities. In the uncertain times which lie ahead, we believe that this Fund will deliver attractive risk-adjusted fixed income returns to our shareholders.

President-Elect Donald Trump’s policies and strategic initiatives appear to be good for growth but might be offset by the negative side effects of higher wages, rising inflation and interest rates and like any other political platform, questions still remain regarding implementation and execution. While we do expect the U.S. economy to move steadily forward, it will not be without starts and stops and episodes of sharp volatility tied to geopolitical risks abroad and uncertainty related to Trump’s economic, fiscal and foreign policy initiatives.

Under these circumstances, we believe that portfolio diversification is a prudent way to help weather these shocks and remain confident that the Bishop Street Family of Funds will provide you with the strategies needed to create a value-added investment portfolio.

The performance data quoted represents past performance. Past performance does not guarantee future results. Index returns are for illustrative purposes only and do not represent actual Fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.

Investing involves risk including possible loss of principal. Diversification does not protect against market loss.

Bloomberg Barclays U.S. Aggregate Bond Index is made up of the Barclays U.S. Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million.

Bloomberg Barclays U.S. Government/Credit Index is a widely-recognized, market value weighted index of U.S. Treasury securities, U.S. government agency obligations, corporate debt backed by the U.S. government and fixed-rate non-convertible corporate debt securities issued or guaranteed by foreign governments and agencies. All securities in the Index are rated investment grade (BBB) or higher, with maturities of at least one year.

Bloomberg Barclays Municipal Bond Index is a widely-recognized index of municipal bonds with maturities of at least one year.

Lipper Corporate A – Rated Debt Funds Objective – Funds that invest primarily in corporate debt issues rated “A” or better or government issues.

Lipper Large-Cap Core Funds Classification – Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s USDE large-cap floor. Large-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P 500 Index.

Lipper Large-Cap Growth Funds Classification – Funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s USDE large-cap floor. Large-cap growth funds typically have above-average characteristics compared to the S&P 500 Index.

Lipper Other States Municipal Debt Funds Objective – Funds that invest in municipal debt issues with dollar-weighted average maturities of five to ten years and are exempt from taxation on a specified city or state basis.

The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the large cap growth segment. The Russell 1000 Growth Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics.

The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values. The Russell 1000 Value Index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics.

The Standard & Poor’s 500 Index (S&P 500 Index) is an unmanaged list of common stocks which includes 500 large companies.

The NASDAQ 100 Index is a market capitalization weighted index that includes 100 of the largest non-financial companies, domestic and foreign, in the NASDAQ National Market. In addition to meeting the qualification standards for inclusion in the NASDAQ National Market, these have strong earnings and assets.

The Russell 1000^® Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000^® Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 92% of the Russell 3000 Index. The Russell 1000 Index is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely reconstituted annually to ensure new and growing equities are reflected.

MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The MSCI EAFE Index consists of the following 22 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 8% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000 is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.

2016 will be remembered as a very challenging year for growth investors, as it proved to be a mirror image opposite of 2015. Market sentiment shifted decisively away from our secular high-growth portfolio, as investors faced a host of headlines ranging from the continued earnings recession, lackluster global growth along with political uncertainty resulting from the BREXIT vote and the highly contentious U.S. presidential election. This volatile environment in conjunction with adverse political rhetoric, overshadowed positive underlying fundamentals for many of our holdings and resulted in material underperformance vs. our benchmark the Russell 1000 Growth Index and the S&P 500 broader equity market.

Looking back over the course of the year, the U.S. equity market struggled right out of the gate with one of its worst starts to a calendar year on record. Investors grappled with the continued sluggishness of the global economy, plummeting oil and commodity prices, and uncertainty regarding the Federal Reserve’s interest rate hike path.

All these factors culminated in an increasingly risk-averse environment, where investors gravitated to perceived areas of safety such as U.S. Treasuries and low growth, yield-oriented defensive sectors. In this environment, pessimism and a focus on the near term clearly won out, as investors were more focused on today and tomorrow vs. long-term secular growth fundamentals. This shift in sentiment led to indiscriminate selling across high-growth equities (information technology and health care in particular), resulting in multiple compression for many of our holdings.

As the year progressed, the market showed signs of settling down and our portfolio rebounded off the February lows — posting strong absolute and relative returns during the second and third quarters. We began to see investors return to the underlying fundamentals, which sent some of the most beaten up names in the information technology and consumer discretionary sectors higher. Generally speaking, the health care sector continued to lag as political uncertainty remained elevated.

After making considerable progress in recapturing the ground lost from earlier in the year, the strategy’s positive momentum stalled out in the final quarter of 2016, ending the year on a disappointing note and capping off our most challenging year from a relative performance standpoint in over 13 years of running the strategy.

Going into the U.S. presidential election, investors were sitting on the sidelines eagerly anticipating the results as the S&P 500 Index posted nine consecutive down days — a feat not seen since 1980. While Hillary Clinton was the prohibitive favorite to become the 45th president of the United States, with many pollsters pegging her odds of winning at 70-90%, the 2016 election took the world by surprise. In the end, Donald Trump won the majority of battleground states to win the Electoral College vote and the election.

Republicans also gained control of both the U.S. House of Representatives and the Senate. This is widely expected to help Trump push his agenda through, which among other things, has called for increased infrastructure spending and corporate tax reform. Unlike what many market participants had forecasted, a Trump victory was not met with an uncertainty selloff. In fact the opposite occurred, unleashing a powerful rally that drove financial and cyclical sectors materially higher at the expense of the information technology sector to close the year.

In the end, most equity indexes were positive for the year, with the S&P 500 Index advancing 11.96%. Value oriented stocks had the clear upper hand over their growth peers, as the 17.34% return of the Russell 1000 Value Index far outpaced the 7.08% showing for the Russell 1000 Growth Index. A large gap also occurred along the market capitalization spectrum, as the small-cap Russell 2000 Index surged 21.31% and finished well ahead of the large-cap indices.

The strategy materially underperformed the Russell 1000 Growth Index benchmark, which managed to post a 7.08% return for the year. In an atypical environment, which we have seen three times before in the 13 years of running the strategy, the market gravitated to companies with the lowest projected growth rates over companies with the highest by over 1000 basis points (bps) within the Russell 1000 Growth Index. (A basis point is 1/100 of a percent.) Yield was also a key determinant of performance, particularly in the first half of the year, as investors migrated to bond-proxy type stocks as fixed-income yields declined. These factors proved to be substantial headwinds for our high-growth strategy, as we tend to have little to no exposure to the most mature, yield oriented names, as companies with little to no projected growth do not meet our investment criteria.

If ‘Trumponomics’ is about recharging the economy and creating a new leg of growth, almost like a 2009 recovery, we should fare well from improved investor confidence. The outperformance of financials/industrials and commodities of late suggests 2017 and beyond should experience higher domestic GDP growth, an end to the manufacturing recession following the oil bust and thereby unleashing increased spending and profits in key sectors of our focused strategy.

Most health care firms pay high tax rates and have vast reserves of cash abroad that can be repatriated back to the U.S. for buybacks or mergers, as many of our companies have little need to pay down debt with already low levels. A friendlier regulatory environment should reaccelerate consolidation among pharma and biotech at a point in time when shares are at historically low valuations. Plus, the majority of their end market source of profits are U.S. consumers, who should also feel better with tax cuts and fiscal growth and thereby increase consumption of products and services.

Industrials have been the second best performing area in the market this year, only behind energy. Because information technology end demand is a function of corporate profits and capital spending, their customers will have more wherewithal to spend. Our holding of Acuity Brands is one of the purest plays on improving infrastructure and capital spending.

Information technology companies are like industrials on steroids, so better infrastructure spending should be really good for them. Plus financials are the biggest end-market customer for information technology, which has thus far been hurt by poor profits/margins and regulations. A more profitable and less constrained regulatory atmosphere for the financial service industry should lead to accelerating spending for information technology products. Information technology (also heath care) should benefit from tax cuts and repatriation and should profit from greater interest income on cash balances.

If the outcome of the new administration is a faster-growing economy, then we believe consumers will be more apt to spend freely in areas that we focus/invest in, namely shopping (Amazon), travel/leisure (Priceline), eating outside the house (Starbucks) and beauty/selfies (Ulta). Over one-third of Costco customers are small- and medium-sized companies who should have an improved outlook from greater domestic growth and therefore likely increase sales.

We continue to be overweight financials. The more vertical yield curve and growing wealth for individuals and institutional investors should accelerate top- and bottom-line growth for our holdings in Charles Schwab and Intercontinental Exchange. Schwab is also a pure play on the U.S. economy, so it stands to benefit from ‘Trumponomics,’ both from domestic GDP growth and also a cut to their full tax rate of 40%. Intercontinental Exchange should benefit from falling correlations between asset classes, increased volatility, higher demand for financial products, stronger commodities and increased trading.

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost and current performance may be higher or lower than the performance quoted. For performance data current to the most recent month end, please visit www.bishopstreetfunds.com or call 1-800-262-9565.

Index returns are for illustrative purposes only and do not represent actual Fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.

This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.

Investing involves risk including possible loss of principal. Diversification does not protect against market loss.

Comparison of Change in the Value of a $10,000 Investment in the Strategic Growth Fund, Class I, versus the Russell 1000 Growth Index and the Lipper Large-Cap Growth Funds Classification.

Average Annual Total Returns^†

One Year
Return

Annualized
3 Year
Return

Annualized
5 Year
Return

Annualized
10 Year
Return

-9.13

1.87

9.65

4.46

Strategic Growth Fund, Class I

7.08

8.55

14.50

8.33

Russell 1000
Growth Index

1.79

5.95

13.03

7.10

Lipper Large-Cap Growth Funds Classification

Two thousand sixteen was a year full of surprises and changes in attitudes. The first half of the year was marked by investor cautiousness and uncertainty over economic growth and political outcomes. During the first six weeks of the year, the stock market reflected concerns over declining oil prices and economic growth in China. Pessimism peaked as the market hit a low in February and yet equities, as measured by the S&P 500, produced a positive rate of return in the first quarter of the year and every quarter thereafter. The second half of the year reflected resilience in the face of unexpected political outcomes and market optimism driven by a recovery in commodity prices, improving economic outlook and a recovery in earnings. The economy as measured by real GDP grew by 1.6% in 2016 after increasing by 2.6% in 2015 accompanied by domestic job growth and growth in disposable income. The biggest change in 2016 was investor outlook shifting from concern to optimism.

The S&P 500 Index rose by 11.96% for calendar 2016 with broad based participation. The S&P 500 has produced a positive annual return over the past eight consecutive years. For 2016, value stocks led growth stocks and small cap stocks outperformed large cap stocks.

For the year ended December 31, 2016, the Dividend Value Fund returned 13.16%. The fund produced strong real returns but underperformed its benchmark, the Russell 1000 Value Index, which returned 17.34% for the year. The leading sector contributors to the Russell 1000 Value Index were Financials, Energy and Industrials, accounting for more than half of the Index’s return. All sectors in the Russell 1000 Value Index produced positive returns for the year.

Positive sector contribution for the fund was driven by health care and consumer discretionary sectors. Equity selection was strong in these sectors. In health care, management’s decision to sell Amgen early in the first quarter of the year helped performance. The overweight in Merck also benefited return. Merck’s performance was driven by the Keynote-24 trial data released this summer showing that Keytruda beat chemotherapy in first-line lung cancer treatment. In October, Merck received FDA approval for treatment of first line lung cancer patients with high PD-L1 expression. UnitedHealth Group’s strong performance (up over 40%) also aided the sector’s performance. Within

the consumer discretionary sector, Comcast and Time Warner performed well. Time Warner received a takeover proposal from AT&T.

Although the fund relatively underperformed the financial sector, the equity selection within this sector was good. Standout individual performance came from CME Group, Bank of America, Marsh & McLennan and J.P. Morgan.

Three sectors (Energy, Consumer Staples and Industrials) accounted for a majority of the fund’s underperformance relative to the Russell 1000 Value Index. Within Energy, the worst performing stocks in the beginning of the year due to the pressures from low oil prices and balance sheet issues became the best performers as oil prices recovered. Given our focus on dividend sustainability, investment grade balance sheets and free cash flow generation, the fund has substantial exposure to names like Exxon and Chevron versus the Exploration & Production companies. Within Industrials, General Dynamics, Park-Hannifin, Waste Management and United Parcel Services provided strong performance. The fund would have needed greater exposure to Industrial cyclicals such as Caterpillar and transportation issues in airlines and railroads to outperform. Within the Consumer Staples sector, the performance of CVS accounted for the relative performance of the sector. In November, CVS reduced their 2017 earnings guidance due to the loss of a contract resulting in a decline in CVS shares during a period of strong market gains.

The Russell 1000 Value Index delivered strong performance in 2016 with a good portion of the return coming in the 4th quarter of 2016. With the election of Mr. Trump combined with the control of the House and Senate in Republican hands, the market is discounting a favorable business environment driven by a favorable regulatory actions and potential tax reform. Currently, the market discounts many of these anticipated positives. Instead of focusing on uncertain outcomes, we will concentrate on continuing to execute on our investment process of focusing on operating free cash flows, balance sheets and capital allocation decisions of corporations. We believe that dividend actions provide a window into the Board of Directors outlook for the company’s future cash flows. Although times change, the fund’s philosophy and process will remain consistent.

Investing involves risk including possible loss of principal. Diversification does not protect against market loss.

Comparison of Change in the Value of a $10,000 Investment in the Dividend Value Fund, Class I, versus the Russell 1000 Value Index and the Lipper Large-Cap Core Funds Classification.

Average Annual Total Returns^†

One Year
Return

Annualized
3 Year
Return

Annualized
5 Year
Return

Annualized
10 Year
Return

13.16

8.40

12.76

5.81

Dividend Value Fund, Class I*

17.34

8.59

14.80

5.72

Russell 1000
Value Index

10.04

6.84

13.14

6.14

Lipper Large-Cap Core
Funds Classification

After a solid start in the first half of the year, U.S. fixed income markets sold off sharply at year-end as interest rates and inflation expectations spiked sharply in reaction to President-Elect Donald Trump’s pro-growth initiatives. President Trump’s unexpected victory drove investor expectations sharply higher after the elections with U.S. stocks gaining 11.95% when measured to the S&P 500 Index and ten-year U.S. Treasury yields increasing 18 basis points to 2.45% by year-end. Investors rewarded risk taking as high yield bonds and lower-rated investment grade credits outperformed government issued securities. Many issues drove investors into and out of the markets beginning with uncertainty about China’s future growth and the U.K.’s decision to leave the European Union. With an improving U.S. economy and employment and inflation near its targets, the Federal Reserve raised its key rate in December, indicating further hikes down the road. For the year, the Bishop Street High Grade Income Fund returned 1.47% reflecting its conservative posture in credit and yield curve positioning versus the Bloomberg Barclays U.S. Government/Credit Index which finished the year up 3.05%.

Investing involves risk including possible loss of principal. Diversification does not protect against market loss.

Comparison of Change in the Value of a $10,000 Investment in the High Grade Income Fund, Class I, versus

the Barclays Capital U.S. Government/Credit Index and the Lipper Corporate A-Rated Debt Funds Objective.

Average Annual Total Returns^†

One Year
Return

Annualized
3 Year
Return

Annualized
5 Year
Return

Annualized
10 Year
Return

1.47

2.51

1.95

4.55

High Grade Income Fund, Class I

3.05

3.04

2.29

4.40

Barclays Capital U.S.
Government/Credit Index

4.48

3.67

3.19

4.54

Lipper Corporate A-Rated Debt
Funds Objective

After a solid start in the first half of the year, fixed income markets sold off sharply at year-end as interest rates and inflation expectations spiked sharply in reaction to President-Elect Donald Trump’s pro-growth initiatives. While volatile during the year, U.S. stocks gained 11.95% when measured to the S&P 500 Index and ten-year U.S. Treasury yields increased 18 basis points to 2.45% by year-end. During the year, investors were rewarded for risk taking as high yield bonds and lower-rated municipal credits outperformed government issued securities.

Municipal bond specific headwinds included lower than expected demand for new issuance and uncertainty regarding tax reform, which could affect the benefits of tax-free securities. Investor funds flowed into Municipal Bond funds in the first three quarters of the year, while significant outflows occurred during the fourth quarter.

For the year, the Bishop Street Hawaii Municipal Bond Fund returned -0.32% reflecting Hawaii’s high credit quality rating and conservative yield curve positioning versus the Bloomberg Barclays Municipal Bond Index return of +0.25%.

Investing involves risk including possible loss of principal. Diversification does not protect against market loss.

Comparison of Change in the Value of a $10,000 Investment in the Hawaii Municipal Bond Fund, Class I or Class A, versus the Barclays Capital Municipal Bond Index and the Lipper Other States Municipal Debt Funds Objective.

Average Annual Total Returns^†

One Year

Return

Annualized

3 Year

Return

Annualized

5 Year

Return

Annualized

10 Year

Return

(0.32

2.85

2.19

3.20

Hawaii Municipal Bond Fund, Class I

(0.57

2.59

1.94

2.94

Hawaii Municipal Bond Fund, Class A

(3.52

1.54

1.32

2.63

Hawaii Municipal Bond Fund, Class A,
with load**

0.25

4.14

3.28

4.25

Barclays Capital
Municipal Bond Index

0.26

4.09

2.76

3.27

Lipper Other States
Municipal Debt Funds
Objective

After a solid start in the first half of the year, U.S. fixed income markets sold off sharply at year-end as interest rates and inflation expectations spiked sharply in reaction to President-Elect Donald Trump’s pro-growth initiatives. President Trump’s unexpected victory drove investor expectations sharply higher after the elections with U.S. stocks gaining +11.95% when measured to the S&P 500 Index and ten-year U.S. Treasury yields increasing 18 basis points to 2.45% by year-end. Investors rewarded risk taking as high yield bonds and lower-rated investment grade credits outperformed government issued securities. Many issues drove investors into and out of the markets beginning with uncertainty about China’s future growth and the U.K.’s decision to leave the European Union. With an improving U.S. economy and employment and inflation near its targets, the Federal Reserve raised its key rate in December, indicating further hikes down the road. Since its launch May31st, the Bishop Street Short Duration Bond Fund returned -0.32% but we believe is poised to take advantage of opportunities and benefits resulting from fiscal and monetary policy changes that lie ahead.

Investing involves risk including possible loss of principal. Diversification does not protect against market loss.


Average Annual Total Returns^†
Cumulative Inception to Date Return*
	(0.32	)%	Short Duration Bond Fund, Class I
	0.04	%	Bloomberg Barclays 1-3 Year U.S. Government Index
	(0.28	)%	Lipper Core Bond Funds Classification Objective

The amounts included in the Notes to Financial Statements are in thousands unless otherwise noted.

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, High Grade Income Fund, Hawaii Municipal Bond Fund and the Short Duration Bond 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 Short Duration Bond Fund commenced operations on May 31, 2016. 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.

The following is a summary of significant accounting policies followed by the Trust. The Funds are investment companies in conformity with U.S. generally accepted accounting principles (U.S. GAAP). Therefore, the Funds follow the accounting and reporting guidelines for investment companies.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the fair value of assets, 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 and such differences could be material.

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) including securities traded over the counter, are valued at the last quoted sale price on an exchange or market (foreign or domestic) on which they are traded on valuation date (or at approximately 4:00 pm ET if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, 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. Such methodologies typically include matrix systems which reflect such factors as security prices, yields, maturities and ratings. Debt obligations with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value provided that it is determined the amortized cost continues to approximate fair value. Should existing credit, liquidity or interest rate conditions in the relevant markets and issuer specific circumstances suggest that amortized cost does not approximate fair value, then the amortized cost method may not be used. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents.

If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker.

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.

In accordance with the authoritative guidance on fair value measurement under U.S. GAAP, the Funds disclose fair value of their 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).

Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement.

As of December 31, 2016, all investments in the Strategic Growth Fund and the Dividend Value Fund were considered Level 1.

The following is a summary of the levels of inputs used in valuing the following Fund’s investments carried at value:

For the year ended December 31, 2016, there were no transfers between Level 1 and Level 2 assets and liabilities. For the year ended December 31, 2016, there were no transfers between Level 2 and Level 3 assets and liabilities. There were no Level 3 investments during the year ended December 31, 2016. For the year ended December 31, 2016, there have been no changes to the Funds’ fair value methodologies.

It is each Fund’s intention to continue to qualify as a regulated investment company for Federal income tax purposes by complying with the appropriate provisions of Subchapter M of the Internal Revenue Code of 1986, as amended, and to distribute substantially all of its income to shareholders. Accordingly, no provision for Federal income taxes has been made in the financial statements.

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 open tax year ends, as applicable), on-going analysis of and changes to tax laws, regulations and interpretations thereof.

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 from settlement date and dividend income is recorded on ex-dividend date.

Discounts and premiums are accreted or amortized using the effective interest method over the life of each security and are recorded as interest income. Realized gains (losses) on paydowns of mortgage-backed and asset-backed securities are recorded as an adjustment to interest income.

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 that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses of the Trust are prorated to each of the Funds on the basis of relative net assets.

The Strategic Growth, Dividend Value Funds and Short-Duration Bond declare and pay dividends from 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 and Hawaii Municipal Bond. 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 commissions (the “sales charges”) are not recorded as expenses of the Hawaii Municipal Bond Fund. Sales charges are deducted from proceeds from the sales of Hawaii Municipal Bond Fund shares prior to investment in Class A shares.

Per the terms of the agreement with MUFG Union Bank, N.A., the custodian of the Funds (the “Custodian”), 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 year ended December 31, 2016, there were no cash overdraft charges.

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 BancWest 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 0.25% of the daily average net assets of the Short-Duration Bond Fund. The Adviser has contractually agreed, through April 30, 2017, to waive a portion of its advisory fee (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses (collectively, excluded expenses)) to the extent necessary to keep operating expenses at or below certain percentages of the respective average daily net assets.

The Adviser has voluntarily agreed to waive a portion of its advisory fees and to assume expenses, if necessary, in order to keep the Short Duration Bond Fund’s total annual operating expenses, after the effect of expense-offset arrangements, from exceeding 0.55% of average daily net assets excluding expenses. These fees and waivers are labeled on the Statement of Operations as “Investment Adviser Fees/Waivers and Reimbursement from Adviser.” The Adviser intends to continue these fee reductions and expense reimbursements until further notice, but may discontinue them at any time.

If at any point it becomes unnecessary for the Adviser to reduce fees and make expense reimbursements, the Board may permit the Adviser to retain the difference between the Total Annual Fund Operating Expenses and contractual expense limitations to recapture all or a portion of its prior expense reductions or reimbursements made during the preceding three year period during which this agreement was in place. During the year ended December 31, 2016, the Adviser did not recapture any previously waived fees.

As of December 31, 2016, fees which were previously waived by the Investment Manager which may be subject to possible future reimbursement to the Adviser were as follows:

Columbia Management Investment Advisers, LLC (“Columbia”) serves as the investment sub-adviser for the Strategic Growth Fund and the Dividend Value Fund, pursuant to a sub-adviser agreement. Columbia is entitled to receive from the Adviser a fee, computed daily and paid monthly, at the annual rate based on the average daily net assets of the Strategic Growth Fund and the Dividend Value Fund, under the following fee schedule: 0.360% on the first $75 million; 0.350% on the next $75 million; 0.325% on the next $100 million; 0.300% on the next $250 million; and 0.250% on assets over $500 million.

The Funds and the Administrator are parties to an Administration Agreement under which the Administrator provides administrative services to the Funds. For these services, the Administrator is paid an asset based fee which will vary depending the number of share classes and the on the average daily net assets of the Funds. The Administrator has voluntarily agreed to waive 0.08% of its administrative fee on each of the Funds’ average daily net assets excluding the Hawaii Municipal Bond Fund for which the Administrator is waiving 0.13% of its fee. These fee waivers are voluntary and may be discontinued at any time. For the year ended December 31, 2016, the Funds were charged as follows for these services: $65 in the Strategic Growth Fund, $87 in the Dividend Value Fund, $137 in the High Grade Income Fund, $300 in the Hawaii Municipal Bond Fund and $9 in the Short Duration Fund. For the year ended December 31, 2016, the Funds waived as follows for these services: $19 in the Strategic Growth Fund, $26 in the Dividend Value Fund, $41 in the High Grade Income Fund, and $165 in the Hawaii Municipal Bond Fund, and $2 in the Short Duration Fund. These fees and waivers are labeled as “Administrative Fees/Waivers” on the Statement of Operations.

MUFG Union Bank, N.A. acts as 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 labeled on the Statement of Operations as “Custody Fees.”

DST Systems, Inc. (“DST”) acts as the Transfer Agent of the Funds. As such, DST provides transfer agency, dividend disbursing and shareholder services to the Funds. These fees are disclosed on the Statement of Operations as “Transfer Agent Fees.”

SEI Investments Distribution Co. (“SIDCO”), the “Distributer” a wholly owned subsidiary of SEI Investments Company, acts as the Trust’s Distributor pursuant to the distribution agreement. The Funds have adopted a Distribution Plan (the “Plan”) on behalf of Class A Shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plan provides that Class A Shares will bear the cost of their distribution

expenses. SIDCO, as compensation for its services under the Plan, receives a distribution fee, computed daily and payable monthly, of 0.25% of the average daily net assets attributable to each Fund’s Class A Shares. This fee is disclosed as “Distribution Fees, Class A” on the Statement of Operations.

The Trust has adopted and entered into a shareholder service plan and agreement with SIDCO. Each Fund pays to SIDCO a shareholder servicing fee 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 year, 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 by First Hawaiian Bank on behalf of SIDCO for the benefit of certain shareholders to the Funds. SIDCO has voluntarily agreed to waive 0.15% of its shareholder servicing fee to the extent necessary to keep operating expenses at or below certain percentages of the respective average daily net assets. These fees and waivers are represented as “Shareholder Servicing Fees/Waivers” on the Statement of Operations.

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 SIDCO. Such officers are paid no fees by the Trust other than the Chief Compliance Officer (“CCO”) as described below, for serving as officers of the Trust.

A portion of the services provided by the CCO and his staff, who 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 and expenses have been approved by and are reviewed by the Board. These fees are disclosed on the Statement of Operations as “Chief Compliance Officer Fees.”

The cost of security purchases and the proceeds from the sale and maturities of securities, other than short-term investments, for the year ended December 31, 2016 are presented below for the Funds.

The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations which may differ from U.S. GAAP.

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.

Accordingly, the following permanent differences, primarily attributable to investments in paydown gains and losses, market discount, REIT adjustments, distribution reclassification and net operating losses have been reclassified:

The tax character of dividends and distributions declared during the years ended December 31, 2016 and 2015 were as follows:

As of December 31, 2016, the components of Distributable Earnings (Accumulated Losses) on a tax basis were as follows:

Post-October losses represent losses realized on investment transactions from November 1, 2016 through December 31, 2016 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 losses incurred may be carried forward and applied against future capital gains. Under the Regulated Investment Company Modernization Act of 2010, Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Additionally, post enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

During the year ended December 31, 2016, the Dividend Value Fund utilized capital loss carryforwards of $3,387.

For Federal income tax purposes, the cost of securities owned at December 31, 2016, and the net realized gains or losses on securities sold for the period were not materially different from amounts reported for financial reporting purposes. These differences are primarily due to wash sales which cannot be used for Federal income tax purposes in the current year and have been deferred for use in future years. The aggregate gross unrealized appreciation and depreciation of securities held by the Strategic Growth, Dividend Value, High Grade Income, Hawaii Municipal Bond and Short Duration Bond Funds for Federal income tax purposes at December 31, 2016 were as follows:

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 and “interest rate risk” which is the potential for fluctuations in bond prices due to changing interest rates. 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 following table provides detail on the approximate percentage of each fund’s investments in securities with these types of enhancements, as well as the name of the entity providing the largest proportion of enhancements in the Fund.

The value of asset-backed securities may be affected by the credit risk of the servicing agent for the pool, the originator of the loans or receivables, or the financial institution(s) providing the credit support. In addition to credit risk, asset-backed securities and other securities with early redemption features are subject to pre-payment risk. During periods of declining interest rates, prepayment of loans underlying asset-backed securities can be expected to accelerate or an issuer may retire an outstanding bond early to reduce interest costs. A Fund’s ability to maintain positions in such securities will be affected by reductions in the principal amount of such securities resulting from prepayments, and its ability to reinvest the returns of principal at comparable yields is subject to the general prevailing interest rates at that time.

The market value of the Funds’ investments in fixed income securities may change in response to interest rate changes and other factors. During periods of falling interest rates, the values of fixed income securities generally rise. Conversely, during periods of rising interest rates, the values of such securities generally decline. Changes by recognized rating agencies in the ratings of any fixed income security and in the ability of an issuer to make payments of interest and principal may also affect the value of these investments.

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 is considered remote.

Strategic Growth Fund and Dividend Value Fund invest solely in equity securities. Purchases of equity securities are subject to the risk that stock prices will fall over short or extended periods of time. Historically, the equity markets have moved in cycles, and the value of the Fund’s equity securities may fluctuate drastically from day to day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. These factors contribute to price volatility, which is the principal risk of investing in the Fund’s

At December 31, 2016, the percentage of total shares outstanding held by shareholders owning 10% or greater of total shares outstanding of each Fund, which comprised omnibus accounts that were held on behalf of several individual shareholders, was as follows:

In October 2016, the Securities and Exchange Commission (the “SEC”) released its Final Rule on Investment Company Reporting Modernization (the “Rule”). The Rule

which introduces two new regulatory reporting forms for investment companies — Form N-PORT and Form N-CEN — also contains amendments to Regulation S-X which impact financial statement presentation, particularly the presentation of derivative investments. Although still evaluating the impact of the Rule, management believes that many of the Regulation S-X amendments are consistent with the Portfolios’ current financial statement presentation and expects that the Portfolios will be able to comply with the Rule’s Regulation S-X amendments by the August 1, 2017 compliance date.

The Funds have evaluated the need for additional disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no additional disclosures and/or adjustments were required to the financial statements.

To the Board of Trustees of Bishop Street Funds and the Shareholders of the Funds, as defined:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Strategic Growth Fund, Dividend Value Fund, High Grade Income Fund, Hawaii Municipal Bond Fund and Short Duration Bond Fund (constituting Bishop Street Funds, hereafter referred to as the “Funds”) as of December 31, 2016, the results of each of their operations for the year then ended, and with respect to the Short Duration Bond Fund from May 31, 2016 (commencement of operations) through December 31, 2016, the changes in each of their net assets for each of the periods indicated and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of December 31, 2016 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

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 from July 1, 2016 to December 31, 2016.

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.”

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.

For shareholders that do not have a December 31, 2016 taxable year end, this notice is for informational purposes only. For shareholders with a December 31, 2016 tax year end, please consult your tax adviser as to the pertinence of this notice.

For the fiscal year ended December 31, 2016, each fund has designated the following items with regard to distributions paid during the year.

Set forth below are the names, age, position with the Trust, length of term of office, and the principal occupations for the last five years of each of the persons currently serving as Trustees and Officers of the Trust. Trustees who are deemed not to be “interested persons” of the Trust are referred to as “Independent Board Members.” Messrs. Nesher and Doran are Trustees who

FOR MORE INFORMATION ABOUT BISHOP STREET FUNDS, CALL 1-800-262-9565 OR YOUR INVESTMENT SPECIALIST VISIT US ONLINE AT WWW.BISHOPSTREETFUNDS.COM

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.

The Registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, controller or principal accounting officer, and any person who performs a similar function. There have been no amendments to or waivers granted to this code of ethics during the past fiscal year.

(a)(1) The registrant’s board of trustees has determined that the registrant has at least one audit committee financial expert serving on the audit committee.

(a) (2) The audit committee financial experts are George Sullivan and John Darr, and are independent as defined in Form N-CSR Item 3 (a) (2).

PwC LLP billed the Trust aggregate fees for services rendered to the Trust for the last two fiscal years as follows:

(e)(1) The Trust’s Audit Committee has adopted and the Board of Trustees has ratified an Audit and Non-Audit Services Pre-Approval Policy (the “Policy”), which sets forth the procedures and the conditions pursuant to which services proposed to be performed by the independent auditor of the Funds may be pre-approved.

The Policy provides that all requests or applications for proposed services to be provided by the independent auditor must be submitted to the Registrant’s Chief Financial Officer (“CFO”) and must include a detailed description of the services proposed to be rendered. The CFO will determine whether such services:

(1) require specific pre-approval; (2) are included within the list of services that have received the general pre-approval of the Audit Committee pursuant to the Policy; or (3) have been previously pre-approved in connection with the independent auditor’s annual engagement letter for the applicable year or otherwise. In any instance where services require pre-approval, the Audit Committee will consider whether such services are consistent with SEC’s rules and whether the provision of such services would impair the auditor’s independence.

Requests or applications to provide services that require specific pre-approval by the Audit Committee will be submitted to the Audit Committee by the CFO. The Audit Committee will be informed by the CFO on a quarterly basis of all services rendered by the independent auditor. The Audit Committee has delegated specific pre-approval authority to either the Audit Committee Chair or financial expert, provided that the estimated fee for any such proposed pre-approved service does not exceed $100,000 and any pre-approval decisions are reported to the Audit Committee at its next regularly scheduled meeting.

Services that have received the general pre-approval of the Audit Committee are identified and described in the Policy. In addition, the Policy sets forth a maximum fee per engagement with respect to each identified service that has received general pre-approval.

All services to be provided by the independent auditor shall be provided pursuant to a signed written engagement letter with the Registrant, the investment advisor or applicable control affiliate (except that matters as to which an engagement letter would be impractical because of timing issues or because the matter is small may not be the subject of an engagement letter) that sets forth both the services to be provided by the independent auditor and the total fees to be paid to the independent auditor for those services.

In addition, the Audit Committee has determined to take additional measures on an annual basis to meet its responsibility to oversee the work of the independent auditor and to assure the auditor’s independence from the Registrant, such as reviewing a formal written statement from the independent auditor delineating all relationships between the independent auditor and the Registrant, and discussing with the independent auditor its methods and procedures for ensuring independence.

(e)(2) Percentage of fees billed applicable to non-audit services approved pursuant to the “de minimis” exception of Rule 2-01(c)(7)(i)(C) were as follows:

(g) The aggregate non-audit fees and services billed by PwC for services rendered to the Registrant, and rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant for the last two fiscal years were $0 and $0 for 2016 and 2015, respectively.

(h) During the past fiscal year, all non-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant were pre-approved by the audit committee of Registrant’s Board of Trustees. Included in the audit committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence.

Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this form.

Not applicable. Effective for closed-end management investment companies for fiscal years ending on or after December 31, 2005

((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 financial reporting.

(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.

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.

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.



Letter to Shareholders			2

Definitions of Comparative Indices			4
Strategic Growth Fund
Management Discussion			6
Schedule of Investments			11
Dividend Value Fund
Management Discussion			14
Schedule of Investments			18
High Grade Income Fund
Management Discussion			23
Schedule of Investments			25
Hawaii Municipal Bond Fund
Management Discussion			34
Schedule of Investments			37
Short Duration Bond Fund
Management Discussion			46
Schedule of Investments			48

Statements of Assets and Liabilities			51

Statements of Operations			53

Statements of Changes in Net Assets			55

Financial Highlights			58

Notes to Financial Statements			62

Report of Independent Registered Public Accounting Firm			76

Disclosure of Fund Expenses			77

Notice to the Shareholders			80

Board of Trustees and Officers			82


		Percentage of Investments

1.	Amazon.com		4.6%

2.	Bristol-Myers Squibb		4.5%

3.	Celgene		4.2%

4.	Nike Cl B		4.2%

5.	Starbucks		4.1%

6.	priceline.com		3.7%

7.	Facebook Cl A		3.7%

8.	Alibaba Group Holding ADR		3.6%

9.	Mobileye NV		3.6%

10.	Vertex Pharmaceuticals		3.4%


Shares			Value (000)



	COMMON STOCK^† — 99.7%
	Consumer Discretionary — 17.8%
	1,609	Amazon.com*	$	1,207
	21,580	Nike Cl B		1,097
	659	priceline.com*		966
	19,300	Starbucks		1,071
	1,259	Ulta Salon Cosmetics & Fragrance*		321

				4,662


Shares			Value (000)

	Consumer Staples — 5.7%
	3,933	Costco Wholesale	$	629
	19,437	Monster Beverage*		862

				1,491

	Financials — 5.7%
	20,913	Charles Schwab		826
	12,073	Intercontinental Exchange		681

				1,507

	Health Care — 30.2%
	7,046	Alexion Pharmaceuticals*		862
	2,680	Biogen*		760
	20,150	Bristol-Myers Squibb		1,178
	9,540	Celgene*		1,104
	8,145	DexCom*		486
	6,775	Edwards Lifesciences*		635
	5,784	Illumina*		740
	6,136	Intercept Pharmaceuticals*		667
	3,438	Shire PLC		586
	12,196	Vertex Pharmaceuticals*		898

				7,916

	Industrials — 1.9%
	2,160	Acuity Brands		499

	Information Technology — 35.3%
	24,557	Activision Blizzard		887
	7,445	Adobe Systems*		766
	10,793	Alibaba Group Holding ADR*		948
	8,388	Facebook Cl A*		965
	4,096	MercadoLibre		640
	24,515	Mobileye NV*		934
	3,437	NVIDIA		367
	4,765	Palo Alto Networks*		596
	12,526	salesforce.com inc*		857
	9,951	ServiceNow*		740
	13,990	Splunk*		716
	10,843	Visa Cl A		846

				9,262


Shares			Value (000)

	Materials — 3.1%
	3,008	Sherwin-Williams	$	808

	TOTAL COMMON STOCK (Cost $25,225)			26,145

	TOTAL INVESTMENTS (Cost $25,225) — 99.7%		$	26,145


		Percentage of Investments

1.	Microsoft		4.3%

2.	JPMorgan Chase		3.6%

3.	Exxon Mobil		3.3%

4.	Johnson & Johnson		3.2%

5.	Apple		2.9%

6.	Comcast Cl A		2.4%

7.	Home Depot		2.3%

8.	Merck		2.3%

9.	Verizon Communications		2.3%

10.	Philip Morris International		2.1%


Shares			Value (000)

	COMMON STOCK — 98.6%
	Consumer Discretionary — 9.5%
	13,735	Comcast Cl A	$	948
	2,405	Genuine Parts		230
	6,905	Home Depot		926
	8,405	Interpublic Group of Companies		197
	2,790	McDonald’s		340
	5,480	Time Warner		529
	3,060	TJX		230


Shares			Value (000)

	Consumer Discretionary — (continued)
	2,635	VF	$	140
	2,025	Walt Disney		211

				3,751

	Consumer Staples — 11.0%
	11,985	Altria Group		810
	5,055	Coca-Cola Enterprises		159
	5,170	CVS Health		408
	6,480	General Mills		400
	2,520	Kimberly-Clark		288
	6,300	PepsiCo		659
	9,230	Philip Morris International		845
	5,220	Procter & Gamble		439
	5,095	Wal-Mart Stores		352

				4,360

	Energy — 8.8%
	5,060	Chevron		596
	14,475	Exxon Mobil		1,306
	4,200	Occidental Petroleum		299
	9,110	Schlumberger		765
	7,010	Suncor Energy		229
	4,265	Valero Energy		291

				3,486

	Financials — 17.4%
	19,100	Bank of America		422
	7,025	BB&T		330
	1,320	BlackRock		502
	5,270	Chubb		696
	4,915	CME Group		567
	16,610	JPMorgan Chase		1,433
	9,095	Marsh & McLennan		615
	4,275	Northern Trust		381
	5,420	PNC Financial Services Group		634
	3,890	T Rowe Price Group		293
	8,925	US Bancorp		458
	10,390	Wells Fargo		573

				6,904


Shares			Value (000)

	Health Care — 10.9%
	6,645	AbbVie	$	416
	765	Aetna		95
	3,160	Bristol-Myers Squibb		185
	2,380	Eli Lilly		175
	11,085	Johnson & Johnson		1,277
	3,385	Medtronic PLC		241
	15,655	Merck		922
	24,460	Pfizer		794
	1,395	UnitedHealth Group		223

				4,328

	Industrials — 13.2%
	2,890	3M		516
	1,435	Boeing		223
	4,490	General Dynamics		775
	6,785	Honeywell International		786
	3,265	Ingersoll-Rand PLC		245
	3,015	Lockheed Martin		754
	2,150	Parker Hannifin		301
	2,430	Stanley Black & Decker		279
	6,290	United Parcel Service Cl B		721
	2,045	United Technologies		224
	5,620	Waste Management		399

				5,223

	Information Technology — 15.2%
	9,900	Apple		1,147
	5,045	Automatic Data Processing		518
	1,115	Broadcom		197
	24,045	Cisco Systems		727
	11,785	Intel		427
	3,505	Lam Research		371
	27,640	Microsoft		1,718
	6,600	Qualcomm		430
	6,775	Texas Instruments		494

				6,029


Shares			Value (000)
	Materials — 1.8%
	5,260	Dow Chemical	$	301
	1,985	LyondellBasell Industries NV Cl A		170
	4,695	Sonoco Products		248

				719

	Real Estate — 3.9%
	995	American Tower‡		105
	445	AvalonBay Communities‡		79
	1,580	Crown Castle International‡		137
	2,140	Digital Realty Trust‡		210
	5,060	Duke Realty‡		134
	1,380	Equity LifeStyle Properties‡		99
	605	Essex Property Trust‡		141
	1,820	Public Storage‡		407
	1,215	Simon Property Group ‡		216

				1,528

	Telecommunication Services — 2.2%
	16,740	Verizon Communications		894

	Utilities — 4.7%
	3,700	American Electric Power		233
	6,625	CMS Energy		276
	2,905	Dominion Resources		223
	4,300	Eversource Energy		238
	2,155	NextEra Energy		257
	3,510	PG&E		213
	1,800	Sempra Energy		181
	4,285	WEC Energy Group		251

				1,872

	TOTAL COMMON STOCK (Cost $27,890)			39,094


	PREFERRED STOCK — 0.2%
	Energy — 0.2%
	1,200	Hess, 8.00% (Cost $67)		88


	CASH EQUIVALENT — 1.1%
	426,652	BlackRock FedFund, Institutional Shares, 0.415% (A) (Cost $426)		427

	TOTAL INVESTMENTS (Cost $28,383) — 99.9%		$	39,609


		Coupon Rate		Maturity Date		Percentage of Investments

1.	FHLMC, Ser 2011-3970, Cl KC		3.500%		03/15/33		2.5%

2.	U.S. Treasury Bond		4.500%		08/15/39		2.1%

3.	U.S. Treasury Bond		3.625%		08/15/43		1.8%

4.	MetLife		6.817%		08/15/18		1.8%

5.	FHLB		4.125%		03/13/20		1.8%

6.	U.S. Treasury Bond		6.000%		02/15/26		1.7%

7.	Home Depot		5.875%		12/16/36		1.5%

8.	U.S. Treasury Bond		2.250%		08/15/46		1.4%

9.	International Business Machines		8.375%		11/01/19		1.4%

10.	GNMA, Ser 2012-101, Cl KL		2.000%		09/20/41		1.4%


Face Amount (000)			Value (000)

	CORPORATE OBLIGATIONS — 57.8%
	Consumer Discretionary — 11.7%
		Amazon.com
$	650	4.800%, 12/05/34	$	715
		Anheuser-Busch InBev Finance
	425	1.250%, 01/17/18		425
		Anheuser-Busch InBev Worldwide
	350	7.750%, 01/15/19		390


Face Amount (000)			Value (000)

	Consumer Staples — (continued)
		Walgreens Boots Alliance
$	400	3.300%, 11/18/21	$	407

				3,020

	Energy — 3.0%
		BP Capital Markets PLC
	265	3.814%, 02/10/24		275
		Halliburton
	350	6.150%, 09/15/19		386
		Occidental Petroleum
	300	2.700%, 02/15/23		297
		Schlumberger Investment SA
	400	3.650%, 12/01/23		419
		Shell International Finance BV
	500	1.875%, 05/10/21		489

				1,866

	Financials — 15.4%
		American International Group
	350	2.300%, 07/16/19		352
		Aon PLC
	440	4.450%, 05/24/43		424
		Bank of America MTN
	300	2.600%, 01/15/19		302
		Bank of New York Mellon MTN
	500	4.150%, 02/01/21		530
		Goldman Sachs Group MTN
	500	7.500%, 02/15/19		554
	800	2.220%, 11/23/24 (A)		796
		JPMorgan Chase
	600	2.250%, 01/23/20		599
		Lincoln National
	500	8.750%, 07/01/19		575
		MetLife
	1,000	6.817%, 08/15/18		1,078
		Morgan Stanley MTN
	250	3.435%, 08/31/17 (A)		251
	500	3.100%, 11/09/18 (A)		503
		MUFG Americas Holdings
	250	2.250%, 02/10/20		247
		Prudential Financial MTN
	320	7.375%, 06/15/19		360


Face Amount (000)			Value (000)

	Financials — (continued)
		Royal Bank of Canada MTN
$	650	2.150%, 03/06/20	$	648
	300	1.500%, 07/29/19		296
		State Street
	425	4.956%, 03/15/18		439
		Toyota Motor Credit MTN
	630	1.375%, 01/10/18		629
		US Bancorp MTN
	500	3.000%, 03/15/22		510
		Wells Fargo
	300	2.150%, 01/15/19		302

				9,395

	Health Care — 5.4%
		AbbVie
	500	2.900%, 11/06/22		494
		Amgen
	350	5.700%, 02/01/19		376
	150	4.950%, 10/01/41		156
		Becton Dickinson and Co
	300	3.125%, 11/08/21		308
		Celgene
	450	3.875%, 08/15/25		456
		Gilead Sciences
	650	4.500%, 04/01/21		700
		Merck Sharp & Dohme
	750	5.000%, 06/30/19		812

				3,302

	Industrials — 6.3%
		Caterpillar
	500	7.900%, 12/15/18		558
		FedEx
	330	2.625%, 08/01/22		329
		General Electric MTN
	500	1.963%, 03/15/23 (A)		507
		Johnson Controls International PLC
	500	4.250%, 03/01/21		528
		Norfolk Southern
	450	2.900%, 06/15/26		433
		Northrop Grumman
	500	4.750%, 06/01/43		545


Face Amount (000)			Value (000)

	Industrials — (continued)
		Raytheon
$	475	2.500%, 12/15/22	$	472
		United Technologies
	500	3.100%, 06/01/22		514

				3,886

	Information Technology — 6.0%
		Apple
	725	2.850%, 05/06/21		740
		Intel
	500	3.300%, 10/01/21		519
		International Business Machines
	700	8.375%, 11/01/19		824
		Microsoft
	500	3.625%, 12/15/23		527
		NetApp
	550	3.375%, 06/15/21		558
		Texas Instruments
	500	1.000%, 05/01/18		498

				3,666

	Materials — 2.6%
		Dow Chemical
	500	8.550%, 05/15/19		573
		Mosaic
	400	5.625%, 11/15/43		385
		Praxair
	500	2.200%, 08/15/22		489
		Rio Tinto Finance USA PLC
	139	9.000%, 05/01/19		160

				1,607

	Real Estate — 0.2%
		Ventas Realty
	100	2.700%, 04/01/20		101

	Telecommunication Services — 1.4%
		Ameritech Capital Funding
	425	6.875%, 10/15/27		492
		Verizon Communications
	375	2.625%, 02/21/20		379

				871


Face Amount (000)			Value (000)

	Transportation — 0.9%
		Burlington Northern Santa Fe LLC
$	500	4.450%, 03/15/43	$	524

	TOTAL CORPORATE OBLIGATIONS (Cost $34,828)			35,372


	U.S. TREASURY OBLIGATIONS — 11.8%
		U.S. Treasury Bond
	800	6.000%, 02/15/26		1,034
	500	5.375%, 02/15/31		666
	350	4.750%, 02/15/37		456
	1,000	4.500%, 08/15/39		1,256
	500	4.375%, 05/15/41		618
	1,000	3.625%, 08/15/43		1,109
	300	3.000%, 11/15/45		296
	1,000	2.250%, 08/15/46		841
		U.S. Treasury Note
	350	3.625%, 02/15/21		376
	400	2.875%, 03/31/18		409
	180	2.375%, 08/15/24		181

	TOTAL U.S. TREASURY OBLIGATIONS (Cost $7,032)			7,242


	U.S. GOVERNMENT AGENCY OBLIGATIONS — 10.0%
		FFCB
	600	2.000%, 06/01/21		598
	675	1.750%, 08/01/22		653
	500	1.420%, 12/28/18		500
	500	1.240%, 11/29/19		492
		FHLB
	475	4.750%, 03/10/23		539
	1,000	4.125%, 03/13/20		1,078
	500	3.750%, 12/14/18		524
	400	0.572%, 03/31/17 (D)		400
		FHLMC MTN
	650	1.600%, 09/30/21		639
	675	1.500%, 08/25/21 (B)		664

	TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (Cost $6,087)			6,087


Face Amount (000)			Value (000)

	MUNICIPAL BONDS — 9.8%
		Babylon New York, GO
$	375	4.600%, 07/01/37	$	375
		California State, GO
	560	6.509%, 04/01/39		652
		City & County, Honolulu Hawaii Wastewater System Revenue, Ser B, RB
	190	5.000%, 07/01/36		218
		Hawaii State, Department of Budget & Finance, Pacific Health Project, Ser A, RB
	500	5.500%, 07/01/43		558
		Houston, Independent School District, GO
	250	6.125%, 02/15/28		269
		Hudson County, Improvement Authority, RB, AGM Insured
	575	7.400%, 12/01/25		669
		Indiana Bond Bank, Ser A, RB
	350	3.276%, 01/15/25		352
		Maryland State, Transportation Authority, RB
	500	5.788%, 07/01/29		601
		Massachusetts Housing Finance Agency, Ser A, RB
	415	5.086%, 12/01/41		417
		Napa Valley Unified School District, GO
	225	6.507%, 08/01/43		297
		Oklahoma Development Finance Authority, RB
	100	3.200%, 06/01/27		96
		San Antonio Texas Water System Revenue, RB
	250	5.502%, 05/15/29		293
		Stockton Public Financing Authority, RB
	500	7.942%, 10/01/38		563
		University of Texas System, Ser C, RB
	550	4.794%, 08/15/46		631

	TOTAL MUNICIPAL BONDS (Cost $5,894)			5,991


	U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS — 7.7%
		FHLMC, Ser 2011-3970, Cl KC
	1,500	3.500%, 03/15/33		1,548
		FHLMC, Ser 2015-4425, Cl BY
	597	2.000%, 01/15/45		507
		FHLMC, Ser E01488
	47	5.000%, 10/01/18		48
		FHLMC, Ser G12710
	92	5.500%, 07/01/22		94


		Coupon Rate		Maturity Date		Percentage of Investments

1.	Hawaii State, Department of Budget & Finance, Ser 2009		6.500%		07/01/39		3.2%

2.	Hawaii State, Department of Transportation, Airports Division Lease Revenue, AMT		5.000%		08/01/27		2.9%

3.	Hawaii State, Department of Budget & Finance, Ser A		5.000%		07/01/35		2.8%

4.	Hawaii State, Airport System Authority, Ser A		5.250%		07/01/27		2.0%

5.	Hawaii State, Ser EY		5.000%		10/01/27		1.7%

6.	Hawaii State, Airport System Authority, AMT		5.000%		07/01/24		1.5%

7.	Hawaii State, Ser FB		4.000%		04/01/31		1.5%

8.	Hawaii State, Housing Finance & Development, Rental Housing System, Ser B, AGM Insured		6.500%		07/01/33		1.5%

9.	Hawaii State, Department of Budget & Finance, Ser A		5.000%		07/01/27		1.5%

10.	Hawaii State, Department of Hawaiian Home Lands, Kapolei Office Facilities, Ser A, AGM Insured		5.000%		11/01/31		1.4%


Face Amount (000)			Value (000)


	MUNICIPAL BONDS — 98.4%
	Alabama — 0.2%
		Huntsville, Electric System Revenue, RB
$	225	5.250%, 12/01/29	$	257

	Alaska — 1.2%
		Alaska Municipal Bond Bank Authority, Ser 3, RB, Bond Bank Moral Obligation Insured
	1,000	5.000%, 09/01/22		1,124
		Alaska State, Ser A, GO
	525	5.000%, 08/01/34		586

				1,710

	Arkansas — 0.4%
		Little Rock, Sewer Revenue, RB
	500	5.000%, 08/01/20		554

	California — 3.9%
		California State, GO
	1,000	5.000%, 09/01/23		1,173
	235	4.500%, 03/01/21		255
	150	4.500%, 08/01/30		150
		Orange County, Water District, Ser A, RB
	1,000	5.000%, 08/15/31		1,165
		Sacramento City Unified School District, GO
	500	5.000%, 07/01/23		586
		Sonoma County, Junior College District, GO
	1,000	5.000%, 08/01/27		1,159
		University of California, Ser AF, RB
	1,000	5.000%, 05/15/36		1,117

				5,605

	Florida — 0.9%
		Jacksonville, Sales Tax Revenue, Ser A, RB
	1,000	5.000%, 10/01/29		1,135
		Miami-Dade County School Board, Ser D, COP
	150	5.000%, 02/01/27		172

				1,307

	Georgia — 0.4%
		Atlanta, Water & Wastewater Revenue, Ser A, RB, NATL Insured
	450	5.500%, 11/01/27		548


Face Amount (000)			Value (000)

	Hawaii — 82.9%
		Hawaii County, Ser A, GO
$	1,000	5.000%, 07/15/18, Pre-Refunded @ 100 (A)	$	1,057
	500	5.000%, 09/01/20		557
	250	5.000%, 09/01/22		289
	1,000	5.000%, 09/01/31		1,176
	500	4.000%, 03/01/20, Pre-Refunded @ 100 (A)		537
	1,850	4.000%, 09/01/35		1,953
		Hawaii County, Ser B, GO
	200	5.000%, 09/01/22		231
		Hawaii County, Ser D, GO
	450	5.000%, 09/01/25		542
		Hawaii State, Airport System Authority, RB, AGM Insured
	1,000	5.250%, 07/01/27		1,114
		Hawaii State, Airport System Authority, Ser A, RB
	250	5.250%, 07/01/23		279
	2,500	5.250%, 07/01/27		2,779
	1,000	5.250%, 07/01/28		1,111
	900	5.250%, 07/01/30		995
	1,500	5.000%, 07/01/45		1,615
		Hawaii State, Airport System Authority, RB, AMT
	2,000	5.000%, 07/01/24		2,190
	1,000	4.125%, 07/01/24		1,061
	500	3.000%, 07/01/17		505
		Hawaii State, Department of Budget & Finance, Mid Pacific Institute, RB, AGC Insured
	1,000	5.000%, 01/01/26		1,002
		Hawaii State, Department of Budget & Finance, Pacific Health Project, Ser A, RB
	425	6.000%, 07/01/33		496
	500	4.625%, 07/01/21		543
		Hawaii State, Department of Budget & Finance, Pacific Health Project, Ser B, RB
	225	5.000%, 07/01/18		237
	55	3.000%, 07/01/19		57
		Hawaii State, Department of Budget & Finance, RB
	325	5.125%, 07/01/31		362
	350	3.250%, 01/01/25		349
		Hawaii State, Department of Budget & Finance, Ser 2009, RB
	4,100	6.500%, 07/01/39		4,465
		Hawaii State, Department of Budget & Finance, Ser A, RB
	100	5.000%, 07/01/22		114
	575	5.000%, 07/01/26		650


Face Amount (000)			Value (000)

	Hawaii — (continued)
$	1,800	5.000%, 07/01/27	$	2,118
	3,500	5.000%, 07/01/35		3,932
	850	4.000%, 07/01/18		883
		Hawaii State, Department of Budget & Finance, Ser B, RB
	775	5.000%, 07/01/28		869
		Hawaii State, Department of Hawaiian Home Lands, Kapolei Office Facilities, Ser A, COP, AGM Insured
	2,000	5.000%, 11/01/31		2,005
	110	4.250%, 11/01/26		110
		Hawaii State, Department of Transportation, Airports Division Lease Revenue, COP, AMT
	1,525	5.000%, 08/01/21		1,694
	3,675	5.000%, 08/01/27		4,094
	1,000	5.000%, 08/01/28		1,108
		Hawaii State, Department of Transportation, COP, AMT
	1,000	5.250%, 08/01/25		1,142
		Hawaii State, Harbor System Revenue, Ser A, RB
	100	5.000%, 07/01/25		110
	1,125	4.250%, 07/01/21		1,205
		Hawaii State, Harbor System Revenue, Ser B, RB, AMT, AGM Insured
	500	5.000%, 01/01/23		500
		Hawaii State, Highway Authority, RB
	605	5.500%, 07/01/18		645
	1,000	5.500%, 01/01/19, Pre-Refunded @ 100 (A)		1,082
		Hawaii State, Highway Authority, Ser A, RB
	700	5.000%, 01/01/23		814
	1,600	5.000%, 01/01/30		1,866
	1,700	5.000%, 01/01/31		1,949
	1,000	5.000%, 01/01/33		1,156
		Hawaii State, Highway Authority, Ser B, RB, AGM Insured
	1,250	5.250%, 07/01/18		1,329
	1,600	5.250%, 07/01/19		1,749
		Hawaii State, Highway Revenue, Ser A, RB
	1,000	4.000%, 01/01/36		1,044
		Hawaii State, Housing Finance & Development, Kuhio Park Terrace Multi-Family Housing, Ser A, RB, FHLMC Insured
	200	3.900%, 04/01/22		211
	115	3.750%, 04/01/21		121
	180	3.500%, 04/01/20		187
	115	3.000%, 04/01/18		117
		Hawaii State, Housing Finance & Development, Rental Housing System, Ser B, RB, AGM Insured
	2,000	6.500%, 07/01/33		2,151


Face Amount (000)/Shares			Value (000)

	Oklahoma — 0.1%
		Oklahoma City, Water Utilities Trust, RB
$	125	5.000%, 07/01/40	$	139

	Oregon — 0.2%
		Oregon State, Facilities Authority, Providence Health Services, RB
	225	5.000%, 10/01/19		245

	Tennessee — 0.4%
		Memphis, Ser A, GO
	500	5.000%, 04/01/26		594

	Texas — 3.0%
		Arlington, Higher Education Finance, Ser 2014-A, RB, PSF-GTD Insured
	750	5.000%, 08/15/27		863
		City of Mesquite, GO
	1,000	5.000%, 02/15/27		1,160
		Clifton, Higher Education Finance, Ser 2014, RB, PSF-GTD Insured
	700	5.000%, 08/15/26		805
		Harris County, Metropolitan Transit Authority, Ser A, RB
	425	5.000%, 11/01/21, Pre-Refunded @ 100 (A)		486
		Midland County, Fresh Water Supply District No. 1, Ser A, RB
	1,000	4.789%, 09/15/37 (B)		397
		Richardson, Independent School District, GO
	500	4.000%, 02/15/33		524

				4,235

	Utah — 0.2%
		Central Utah, Water Conservancy District, Ser B, GO
	200	5.250%, 04/01/23		227

	Washington — 0.6%
		Port of Seattle Washington, Ser A, RB
	750	5.000%, 08/01/26		852

	TOTAL MUNICIPAL BONDS (Cost $141,069)			140,987


	CASH EQUIVALENT — 0.2%
	322,752	BlackRock FedFund, Institutional Shares, 0.415% (C) (Cost $323)		323

	TOTAL INVESTMENTS (Cost $141,392) — 98.6%		$	141,310


Face Amount (000)/Shares			Value (000)

	U.S. TREASURY OBLIGATIONS — 23.6%
		U.S. Treasury Bill
$	100	0.656%, 05/25/17 (B)	$	100
		U.S. Treasury Note
	455	1.375%, 12/15/19		454
	505	0.875%, 05/31/18		504
	575	0.875%, 05/15/19		569
	40	0.750%, 08/31/18		40
	125	0.750%, 08/15/19		123
	535	0.625%, 05/31/17		535
	30	0.625%, 08/31/17		30

	TOTAL U.S. TREASURY OBLIGATIONS (Cost $2,364)			2,355


	CASH EQUIVALENT — 3.6%
	363,192	BlackRock FedFund, Institutional Shares, 0.415% (C) (Cost $363)		363

	TOTAL INVESTMENTS (Cost $10,032) — 99.7%		$	9,967


	Strategic Growth Fund		Dividend Value Fund		High Grade Income Fund
Assets:
Investments, at Cost	$	25,225	$	28,383	$	59,948

Investments, at Value	$	26,145	$	39,609	$	60,766
Receivable for Investment Securities Sold		269		—		—
Dividends and Interest Receivable		5		89		525
Reclaim Receivable		3		1		2
Receivable for Fund Shares Sold		—		—		6
Prepaid Expenses		3		2		12

Total Assets		26,425		39,701		61,311

Liabilities:
Payable to Custodian		164		—		—
Advisory Fees Payable		17		17		9
Administrative Fees Payable		3		5		8
Shareholder Servicing Fees Payable		2		3		5
Payable for Fund Shares Redeemed		1		3		2
Income Distribution Payable		—		—		36
Chief Compliance Officer Fees Payable		—		—		1
Other Accrued Expenses Payable		27		31		46

Total Liabilities		214		59		107

Net Assets	$	26,211	$	39,642	$	61,204

Paid-in Capital	$	25,195	$	27,007	$	60,262
Undistributed Net Investment Income		—		1		1
Accumulated Net Realized Gain on Investments		96		1,408		123
Net Unrealized Appreciation on Investments		920		11,226		818

Net Assets	$	26,211	$	39,642	$	61,204

Class I Shares:
Net Assets	$	26,211	$	39,642	$	61,204
Outstanding Shares of Beneficial Interest (unlimited authorization — no par value)		2,222		2,697		6,341
Net Asset Value, Offering and Redemption Price Per Share — Class I (Net Assets / Shares Outstanding)	$	11.80	$	14.70	$	9.65


	Hawaii Municipal Bond Fund			Short Duration Bond Fund
Assets:
Investments, at Cost	$	141,392		$	10,032

Investments, at Value	$	141,310		$	9,967
Dividends and Interest Receivable		2,317			26
Receivable for Fund Shares Sold		10			—
Due from Advisor		—			9
Prepaid Expenses		9			7

Total Assets		143,646			10,009

Liabilities:
Income Distribution Payable		225			—
Administrative Fees Payable		13			1
Shareholder Servicing Fees Payable		12			1
Advisory Fees Payable		9			2
Payable for Fund Shares Redeemed		9			—
Chief Compliance Officer Fees Payable		2			—
Other Accrued Expenses Payable		108			12

Total Liabilities		378			16

Net Assets	$	143,268		$	9,993

Paid-in Capital	$	143,343		$	10,097
Undistributed Net Investment Income		49			—
Accumulated Net Realized Loss on Investments		(42	)		(39	)
Net Unrealized Depreciation on Investments		(82	)		(65	)

Net Assets	$	143,268		$	9,993

Class I Shares:
Net Assets	$	120,894		$	9,993
Outstanding Shares of Beneficial Interest (unlimited authorization — no par value)		11,567			1,009
Net Asset Value, Offering and Redemption Price Per Share — Class I (Net Assets / Shares Outstanding)	$	10.45		$	9.90

Class A Shares:
Net Assets	$	22,374			N/A
Outstanding Shares of Beneficial Interest (unlimited authorization — no par value)		2,141			N/A
Net Asset Value, Offering and Redemption Price Per Share — Class A (Net Assets / Shares Outstanding)	$	10.45			N/A

Maximum Offering Price Per Shares — Class A ($10.45/ 97.00%)	$	10.77			N/A


	Strategic Growth Fund			Dividend Value Fund			High Grade Income Fund
Investment Income:
Dividend Income	$	134		$	1,200		$	—
Interest Income		—			—			2,022
Less: Foreign Taxes Withheld		(7	)		(1	)		—

Total Investment Income		127			1,199			2,022

Expenses:
Investment Adviser Fees		240			323			376
Shareholder Servicing Fees		81			109			171
Administrative Fees		65			87			137
Chief Compliance Officer Fees		2			2			3
Transfer Agent Fees		38			41			48
Audit Fees		10			17			28
Printing Fees		9			13			21
Legal Fees		7			9			14
Trustees’ Fees		5			7			10
Registration Fees		5			2			19
Custody Fees		5			5			5
Pricing Fees		1			3			14
Miscellaneous Expenses		4			5			8

Total Expenses		472			623			854

Less Waivers:
Shareholder Servicing Fees		(49	)		(66	)		(103	)
Administrative Fees		(19	)		(26	)		(41	)
Investment Adviser Fees		—			(73	)		(192	)

Total Waivers		(68	)		(165	)		(336	)

Total Net Expenses		404			458			518

Net Investment Income (Loss)		(277	)		741			1,504

Net Realized Gain on Investments		1,339			5,496			600
Net Change in Unrealized (Depreciation) on Investments		(4,393	)		(860	)		(692	)

Net Realized and Unrealized Gain (Loss) on Investments		(3,054	)		4,636			(92	)

Increase (Decrease) in Net Assets Resulting from Operations	$	(3,331	)	$	5,377		$	1,412


	Hawaii Municipal Bond Fund			Short Duration Bond Fund⁽¹⁾
Investment Income:
Interest Income	$	4,504		$	49
Dividend from Investment Companies		—			—

Total Investment Income		4,504			49

Expenses:
Investment Adviser Fees		525			11
Shareholder Servicing Fees		375			11
Administrative Fees		300			9
Distribution Fees, Class A		58			—
Chief Compliance Officer Fees		7			—
Transfer Agent Fees		97			18
Audit Fees		65			4
Printing Fees		46			3
Legal Fees		31			1
Pricing Fees		30			1
Trustees’ Fees		22			1
Registration Fees		11			—
Custody Fees		7			3
Offering Fees		—			22
Miscellaneous Expenses		17			1

Total Expenses		1,591			85

Less Waivers:
Investment Adviser Fees		(319	)		(11	)
Shareholder Servicing Fees		(225	)		(7	)
Administrative Fees		(164	)		(2	)
Expense Reimbursement by Advisor		—			(40	)

Total Waivers		(708	)		(60	)

Total Net Expenses		883			25

Net Investment Income		3,621			24

Net Realized Gain on Investments		578			—
Net Change in Unrealized (Depreciation) on Investments		(4,551	)		(65	)

Net Realized and Unrealized Loss on Investments		(3,973	)		(65	)

Decrease in Net Assets Resulting from Operations	$	(352	)	$	(41	)


	Strategic Growth Fund						Dividend Value Fund
	2016			2015			2016			2015
Investment Activities from Operations:
Net Investment Income (Loss)	$	(277	)	$	(377	)	$	741		$	840
Net Realized Gain on Investments		1,339			4,567			5,496			4,322
Net Change in Unrealized Depreciation on Investments		(4,393	)		(836	)		(860	)		(4,932	)

Increase (Decrease) in Net Assets Resulting from Operations		(3,331	)		3,354			5,377			230

Dividends and Distributions to Shareholders:
Net Investment Income:
Class I Shares		—			—			(746	)		(847	)
Capital Gains:
Class I Shares		(2,035	)		(3,780	)		(694	)		—

Total Dividends and Distributions to Shareholders		(2,035	)		(3,780	)		(1,440	)		(847	)

Capital Share Transactions:
Proceeds from Shares Issued		340			417			102			232
Reinvestments of Cash Distributions		1,374			2,675			873			560
Cost of Shares Redeemed		(9,565	)		(13,479	)		(11,516	)		(9,594	)

Net Decrease in Net Assets from Capital Share Transactions		(7,851	)		(10,387	)		(10,541	)		(8,802	)

Total Decrease in Net Assets		(13,217	)		(10,813	)		(6,604	)		(9,419	)

Net Assets:
Beginning of Year		39,428			50,241			46,246			55,665

End of Year	$	26,211		$	39,428		$	39,642		$	46,246

Undistributed Net Investment Income	$	—		$	—		$	1		$	—

Share Transactions:
Shares Issued		27			29			7			18
Shares Issued in Lieu of Cash Distributions		111			193			60			42
Shares Redeemed		(743	)		(913	)		(808	)		(711	)

Net Decrease in Shares Outstanding from Share Transactions		(605	)		(691	)		(741	)		(651	)


	High Grade Income Fund						Hawaii Municipal Bond Fund						Short Duration Bond Fund⁽¹⁾
	2016			2015			2016			2015			2016
Investment Activities from Operations:
Net Investment Income	$	1,504		$	1,712		$	3,621		$	3,994		$	24
Net Realized Gain on Investments		600			343			578			1,127			—
Net Change in Unrealized Depreciation on Investments		(692	)		(1,733	)		(4,551	)		(1,252	)		(65	)

Increase (Decrease) in Net Assets Resulting from Operations		1,412			322			(352	)		3,869			(41	)

Dividends and Distributions to Shareholders:
Net Investment Income:
Class I Shares		(1,478	)		(1,709	)		(3,091	)		(3,440	)		(63	)
Class A Shares		N/A			N/A			(508	)		(538	)		N/A
Capital Gains:
Class I Shares		(514	)		(423	)		(658	)		(882	)		—
Class A Shares		N/A			N/A			(121	)		(158	)		N/A

Total Dividends and Distributions to Shareholders		(1,992	)		(2,132	)		(4,378	)		(5,018	)		(63	)

Capital Share Transactions:
Class I Shares:
Proceeds from Shares Issued		3,317			4,201			9,032			10,103			10,087
Reinvestments of Cash Distributions		1,374			1,451			572			689			10
Cost of Shares Redeemed		(15,158	)		(6,233	)		(12,434	)		(14,637	)		—

Total Class I Capital Share Transactions		(10,467	)		(581	)		(2,830	)		(3,845	)		10,097

Class A Shares:
Proceeds from Shares Issued		N/A			N/A			1,745			1,877			N/A
Reinvestments of Cash Distributions		N/A			N/A			483			549			N/A
Cost of Shares Redeemed		N/A			N/A			(2,071	)		(1,625	)		N/A

Total Class A Capital Share Transactions		N/A			N/A			157			801			N/A

Net Increase (Decrease) in Net Assets from Capital Share Transactions		(10,467	)		(581	)		(2,673	)		(3,044	)		10,097

Total Increase (Decrease) in Net Assets		(11,047	)		(2,391	)		(7,403	)		(4,193	)		9,993

Net Assets:
Beginning of Year/Period		72,251			74,642			150,671			154,864			—

End of Year/Period	$	61,204		$	72,251		$	143,268		$	150,671		$	9,993

Undistributed Net Investment Income	$	1		$	2		$	49		$	28		$	—

Share Transactions:
Class I Shares:
Shares Issued		330			420			825			932			1,008
Shares Issued in Lieu of Cash Distributions		139			145			53			64			1
Shares Redeemed		(1,499	)		(624	)		(1,139	)		(1,352	)		—

Total Class I Transactions		(1,030	)		(59	)		(261	)		(356	)		1,009

Class A Shares:
Shares Issued		N/A			N/A			160			174			N/A
Shares Issued in Lieu of Cash Distributions		N/A			N/A			45			50			N/A
Shares Redeemed		N/A			N/A			(191	)		(150	)		N/A

Total Class A Transactions		N/A			N/A			14			74			N/A

Net Increase (Decrease) in Shares Outstanding from Share Transactions		(1,030	)		(59	)		(247	)		(282	)		1,009


				Investment Activities								Total Investment Activities from Operations				Dividends and Distributions from
	Net Asset Value, Beginning of Year			Net Investment Income (Loss)⁽¹⁾				Net Realized and Unrealized Gain(Loss) on Investments				Total Investment Activities from Operations				Net Investment Income				Capital Gains				Total Dividends and Distributions
STRATEGIC GROWTH FUND
Class I Shares:
2016		$	13.95		$	(0.11	)		$	(1.14	)		$	(1.25	)		$	—			$	(0.90	)		$	(0.90	)
2015			14.28			(0.13	)			1.21				1.08				—				(1.41	)			(1.41	)
2014			14.56			(0.12	)			1.30				1.18				—				(1.46	)			(1.46	)
2013			13.56			(0.04	)			4.59				4.55				—				(3.55	)			(3.55	)
2012			12.24			0.03				1.32	††			1.35				(0.03	)			—				(0.03	)
DIVIDEND VALUE FUND
Class I Shares:
2016		$	13.45		$	0.24			$	1.52			$	1.76			$	(0.25	)		$	(0.26	)		$	(0.51	)
2015			13.62			0.22				(0.17	)			0.05				(0.22	)			—				(0.22	)
2014			12.43			0.29				1.20				1.49				(0.30	)			—				(0.30	)
2013			9.83			0.21				2.61				2.82				(0.22	)			—				(0.22	)
2012			9.05			0.21				0.79				1.00				(0.22	)			—				(0.22	)
HIGH GRADE INCOME FUND
Class I Shares:
2016		$	9.80		$	0.22			$	(0.07	)		$	0.15			$	(0.22	)		$	(0.08	)		$	(0.30	)
2015			10.05			0.23				(0.19	)			0.04				(0.23	)			(0.06	)			(0.29	)
2014			9.78			0.23				0.33				0.56				(0.23	)			(0.06	)			(0.29	)
2013			10.51			0.22				(0.50	)			(0.28	)			(0.22	)			(0.23	)			(0.45	)
2012			10.44			0.26				0.26				0.52				(0.26	)			(0.19	)			(0.45	)



Net Asset Value, End of Year			Total Return†			Net Assets End of Year (000)			Ratio of Expenses to Average Net Assets			Ratio of Expenses to Average Net Assets (Excluding Waivers)			Ratio of Net Investments Income (Loss) to Average Net Assets			Portfolio Turnover Rate



	$	11.80		(9.13	)%		$	26,211		1.25	%		1.46	%		(0.86	)%		33	%
		13.95		7.77				39,428		1.17			1.40			(0.86	)		55
		14.28		7.94				50,241		1.15			1.38			(0.83	)		44
		14.56		35.03				56,998		1.17			1.40			(0.26	)		130
		13.56		11.05	††			46,644		1.17			1.40			0.21			68


	$	14.70		13.16	%		$	39,642		1.05	%		1.43	%		1.70	%		17	%
		13.45		0.44				46,246		1.05			1.38			1.62			24
		13.62		12.08				55,665		1.05			1.37			2.27			21
		12.43		28.84				61,460		1.05			1.38			1.87			13
		9.83		11.07				57,137		1.05			1.38			2.19			17


	$	9.65		1.47	%		$	61,204		0.76	%		1.25	%		2.20	%		27	%
		9.80		0.37				72,251		0.76			1.21			2.31			24
		10.05		5.77				74,642		0.76			1.20			2.32			28
		9.78		(2.69	)			74,007		0.76			1.21			2.18			35
		10.51		5.05				85,771		0.76			1.20			2.47			39


				Investment Activities							Total Investment Activities from Operations				Dividends and Distributions from
	Net Asset Value, Beginning of Period			Net Investment Income (Loss)⁽¹⁾			Net Realized and Unrealized Gain(Loss) on Investments				Total Investment Activities from Operations				Net Investment Income				Capital Gains				Total Dividends and Distributions
HAWAII MUNICIPAL BOND FUND
Class I Shares:
2016		$	10.80		$	0.27		$	(0.30	)		$	(0.03	)		$	(0.26	)		$	(0.06	)		$	(0.32	)
2015			10.88			0.29			(0.01	)			0.28				(0.29	)			(0.07	)			(0.36	)
2014			10.52			0.29			0.38				0.67				(0.29	)			(0.02	)			(0.31	)
2013			11.13			0.29			(0.57	)			(0.28	)			(0.29	)			(0.04	)			(0.33	)
2012			10.94			0.32			0.23				0.55				(0.32	)			(0.04	)			(0.36	)
Class A Shares:
2016		$	10.80		$	0.24		$	(0.29	)		$	(0.05	)		$	(0.24	)		$	(0.06	)		$	(0.30	)
2015			10.88			0.26			(0.01	)			0.25				(0.26	)			(0.07	)			(0.33	)
2014			10.52			0.26			0.38				0.64				(0.26	)			(0.02	)			(0.28	)
2013			11.13			0.27			(0.57	)			(0.30	)			(0.27	)			(0.04	)			(0.31	)
2012			10.94			0.29			0.23				0.52				(0.29	)			(0.04	)			(0.33	)
SHORT DURATION BOND FUND**
Class I Shares:
2016		$	10.00		$	0.03		$	(0.06	)		$	(0.03	)		$	(0.07	)		$	—			$	(0.07	)


Net Asset Value, End of Period			Total Return†			Net Assets End of Period (000)			Ratio of Expenses to Average Net Assets			Ratio of Expenses to Average Net Assets (Excluding Waivers)			Ratio of Net Investments Income (Loss) to Average Net Assets			Portfolio Turnover Rate


	$	10.45		(0.32	)%		$	120,894		0.55	%		1.02	%		2.45	%		26	%
		10.80		2.61				127,712		0.55			0.98			2.64			28
		10.88		6.36				132,540		0.55			0.99			2.66			27
		10.52		(2.47	)			126,289		0.55			1.01			2.72			29
		11.13		5.06				134,179		0.55			0.99			2.86			23

	$	10.45		(0.57	)%		$	22,374		0.80	%		1.27	%		2.20	%		26	%
		10.80		2.36				22,959		0.80			1.23			2.39			28
		10.88		6.10				22,324		0.80			1.24			2.41			27
		10.52		(2.72	)			24,359		0.80			1.26			2.47			29
		11.13		4.80				25,660		0.80			1.24			2.61			23


	$	9.90		(0.32	)%		$	9,993		0.55	%*		1.88	%*		0.53	%*		9	%


High Grade Income Fund
Investments in Securities	Level 1		Level 2		Level 3		Total
Corporate Obligations	$	—	$	35,372	$	—	$	35,372
U.S. Treasury Obligations		—		7,242		—		7,242
U.S. Government Agency Obligations		—		6,087		—		6,087
Municipal Bonds		—		5,991		—		5,991
U.S. Government Mortgage-Backed Obligations		—		4,680		—		4,680
Cash Equivalent		877		—		—		877
Non-Agency Mortgage-Backed Obligation		—		517		—		517

Total Investments in Securities	$	877	$	59,889	$	—	$	60,766


Hawaii Municipal Bond Fund
Investments in Securities	Level 1		Level 2		Level 3		Total
Municipal Bonds	$	—	$	140,987	$	—	$	140,987
Cash Equivalent		323		—		—		323

Total Investments in Securities	$	323	$	140,987	$	—	$	141,310


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%