BISHOP STREET FUNDS, 485APOS, 1996-02-29

BISHOP STREET FUNDS
485APOS, 1996-02-29

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON February 29, 1996
File No. 33-80514
File No. 811-8572

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /

POST-EFFECTIVE AMENDMENT NO. 3 /X/

and

REGISTRATION STATEMENT UNDER
INVESTMENT COMPANY ACT OF 1940 / /

AMENDMENT NO. 4 /X/

BISHOP STREET FUNDS
(Exact Name of Registrant as Specified in Charter)

c/o The CT Corporation System
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)

Registrant's Telephone Number, including Area Code (610) 254-1000

DAVID G. LEE
C/O SEI CORPORATION
680 E. SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087
(Name and Address of Agent for Service)

Copies to:
RICHARD W. GRANT, ESQUIRE JOHN H. GRADY, JR., ESQUIRE
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
2000 ONE LOGAN SQUARE 1800 M STREET, N.W.
PHILADELPHIA, PENNSYLVANIA 19103 WASHINGTON, D.C. 20036

It is proposed that this filing will become effective (check appropriate box)

immediately upon filing pursuant to paragraph (b)
- ---
on [date] pursuant to paragraph (b)
- ---
X 60 days after filing pursuant to paragraph (a)
- ---
on [date] pursuant to paragraph (a) of Rule 485
- ---

75 days after filing pursuant to paragraph (a)
- ---

Pursuant to the provisions of Rule 24f-2 under the Investment Company Act of
1940, an indefinite number of units of beneficial interest have been registered
under the Securities Act of 1933. The Rule 24f-2 Notice for the Registrant's
fiscal year ending December 31, 1995 was filed on February 21, 1996.

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<PAGE>

BISHOP STREET FUNDS
CROSS REFERENCE SHEET

POST-EFFECTIVE AMENDMENT NO. 3

N-1A ITEM NO. LOCATION
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PART A -
Item 1. Cover Page Cover Page
Item 2. Synopsis Summary; Expense Summary
Item 3. Condensed Financial Information *
Item 4. General Description of Registrant The Trust; Investment
Objectives and Policies;
General Investment Policies;
Risk Factors; Description of
Permitted Investments and Risk
Factors; Investment
Limitations; General
Information -- The Trust
Item 5. Management of the Trust General Information --
Trustees of the Trust; The
Adviser; The Sub-Adviser(s);
The Administrator; The
Transfer Agent; The
Distributor
Item 6. Capital Stock and Other Securities General Information -- Voting
Rights; General Information --
Shareholder Inquiries;
Performance; General
Information -- Dividends;
Taxes
Item 7. Purchase of Securities Being Offered How to Purchase Retail Class B
Shares; How to Purchase
Institutional Class A Shares;
Sales Charges; Exchanges;
Redemption of Shares
Item 8. Redemption or Repurchase How to Purchase Retail Class B
Shares; How to Purchase
Institutional Class A Shares;
Sales Charges; Exchanges;
Redemption of Shares
Item 9. Pending Legal Proceedings *

PART B -
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Corporation
Item 13. Investment Objectives and Policies Description of Permitted
Investments; Investment
Limitations; Description of
Shares
Item 14. Management of the Registrant Directors and Officers of the
Corporation; The Administrator
Item 15. Control Persons and Principal Directors and Officers of the
Holders of Securities Fund; 5% Shareholders

Item 16. Investment Advisory and Other The Adviser; The Sub-
Services Adviser(s); The Administrator;
The Distributor; Experts
Item 17. Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Other Securities Description of Shares
Item 19. Purchase, Redemption, and Pricing Purchase and Redemption of
of Securities Being Offered Shares; Determination of Net
Asset Value
Item 20. Tax Status Taxes
Item 21. Underwriters The Distributor
Item 22. Calculation of Yield Quotations Performance
Item 23. Financial Statements Financial Statements

<PAGE>

PART C

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.

* Not Applicable

<PAGE>

The Prospectus for the Retail Class B and Institutional Class A Shares of the
Bishop Street Treasury Money Market Fund, included as part of Post-Effective
Amendment No. 2 to the Registrant's Registration Statement on Form N-1A (File
No. 33-80514) filed with the Securities and Exchange Commission on December 4,
1995 is hereby incorporated by reference as if set forth in full herein.

iii

<PAGE>
PROSPECTUS

BISHOP STREET FUNDS
INVESTMENT ADVISER:
FIRST HAWAIIAN BANK

BISHOP STREET FUNDS (the "Trust") is a mutual fund that seeks to provide a
convenient means of investing in one or more professionally managed portfolios
of securities. The prospectus relates to the following Funds (each a "Fund"):

BISHOP STREET HIGH GRADE INCOME FUND
BISHOP STREET HAWAII MUNICIPAL BOND FUND
BISHOP STREET EQUITY FUND

An investor may purchase either Retail Class B or Institutional Class A shares
of each Fund. Retail Class B shares are sold with a front-end sales load of up
to 3.5% that will be reduced or waived in certain circumstances. Institutional
Class A shares are sold without a front-end sales load or distribution fees.
First Hawaiian Bank, the Funds' investment adviser, is an affiliate of First
Hawaiian, Inc.

INSTITUTIONAL CLASS A SHARES ARE OFFERED PRIMARILY TO AGENCY, FIDUCIARY,
CUSTODIAL AND ADVISORY CLIENTS OF FIRST HAWAIIAN BANK. RETAIL CLASS B SHARES ARE
OFFERED PRIMARILY TO INDIVIDUALS.

THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, INCLUDING FIRST HAWAIIAN BANK OR ITS AFFILIATES. THE
TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.

This Prospectus sets forth concisely the basic information about the Funds and
the Trust that a prospective investor should know before investing. Investors
are advised to read this Prospectus and retain it for future reference. A
Statement of Additional Information dated April 29, 1996 has been filed with the
Securities and Exchange Commission and is available without charge by calling
1-800-262-9565. The Statement of Additional Information is incorporated into
this Prospectus by reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

APRIL 29, 1996

<PAGE>
2

SUMMARY

BISHOP STREET FUNDS (the "Trust") is an open-end management investment company
which provides a convenient way to invest in professionally managed portfolios
of securities. This Summary provides basic information about the Retail Class B
and Institutional Class A shares of the Trust's High Grade Income Fund, Hawaii
Municipal Bond Fund and Equity Fund (the "Funds").

WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF EACH FUND? The High Grade
Income Fund seeks high total return consistent with prudent investment risk by
investing primarily in high grade U.S. dollar-denominated bonds and debentures
issued by U.S. and foreign corporations. The Hawaii Municipal Bond Fund seeks to
provide high current income that is exempt from Federal and State of Hawaii
income taxes by investing primarily in bonds and notes issued by the State of
Hawaii, its agencies, instrumentalities and political sub-divisions ("Hawaii
Municipal Securities"). The Equity Fund seeks long-term growth of capital with a
secondary goal of current income by investing primarily in common stocks of
domestic issuers and U.S. dollar denominated equity securities of foreign
issuers. There is no assurance that any Fund will meet its investment objective.
See "Investment Objectives and Policies" and "Description of Permitted
Investments and Risk Factors."

WHAT ARE THE RISKS INVOLVED WITH AN INVESTMENT IN THE FUNDS? The Funds' shares
will fluctuate in value with changes in the prices of their underlying portfolio
securities. Values of fixed income securities and, correspondingly, share prices
of Funds invested in such securities tend to vary inversely with interest rates
and may be affected by other market and economic factors as well. Common stocks
in which the Equity Fund invests may be more volatile and may fluctuate in value
more than other types of investments. The Hawaii Municipal Bond Fund is a
non-diversified portfolio that invests primarily in Hawaii Municipal Securities.
Therefore, the value of its shares may be especially affected by factors
pertaining to the Hawaiian economy and other factors specially affecting the
ability of issuers of Hawaii Municipal Securities to meet their obligations.
There are other risks involved in the ownership of a mutual fund. See
"Description of Permitted Investments and Risk Factors."

WHO IS THE ADVISER? First Hawaiian Bank serves as the Adviser of the Funds. See
"Expense Summary" and "The Adviser."

WHO IS THE ADMINISTRATOR? SEI Financial Management Corporation serves as the
Administrator and shareholder servicing agent of the Trust. See "Expense
Summary" and "The Administrator."

WHO IS THE TRANSFER AGENT? DST Systems, Inc. serves as transfer agent and
dividend disbursing agent for the Trust. See "The Transfer Agent."

WHO IS THE DISTRIBUTOR? SEI Financial Services Company serves as distributor of
the Trust's shares. See "The Distributor."

HOW DO I PURCHASE, EXCHANGE OR REDEEM SHARES? Purchases, exchanges or
redemptions of shares may be made on any day on which both the New York Stock
Exchange and Federal Reserve wire system are open for business ("Business Days")
except for Hawaii state banking holidays. A purchase, exchange or redemption
order will be executed at a per share price equal to the net asset value per
share next determined after the receipt of the purchase, exchange or redemption
order, plus any applicable sales charges. Orders must be placed prior to 4:00
p.m., New York Time, on any Business Day for the order to be effective that day.
The minimum initial investment is $1,000 ($500 for IRAs and $500 for officers,
directors, or employees of First Hawaiian Bank and its affiliates). Subsequent
purchases of shares must be at least $100. Net asset value is determined as of
4:00 p.m., New York Time, on each Business Day. See "Purchase of Shares,"
"Exchange of Shares," and "Redemption of Shares."

HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of each Fund is distributed in the form of periodic
dividends. Any capital gain is distributed at least annually. Distributions are
paid in additional shares unless the Shareholder elects to take the payment in
cash. See "Dividends."
<PAGE>
3

EXPENSE SUMMARY

<TABLE>
<CAPTION>
RETAIL CLASS B SHARES
----------------------------------
HAWAII
MUNICIPAL HIGH GRADE
BOND INCOME EQUITY
SHAREHOLDER TRANSACTION EXPENSES FUND FUND FUND
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)............................................................ 3.50% 3.50% 3.50%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage
of offering price)................................................ None None None
Maximum Contingent Deferred Sales Charge............................ None None None
Exchange Fee........................................................ None None None
Wire Redemption Fee................................................. $15 $15 $15
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
- --------------------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1)................................ .00% .25% .40%
Rule 12b-1 Fees..................................................... .00%(2) .25% .25%
Other Expenses (after fee waivers)(1)............................... .21% .35%(3) .35%(3)
- --------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(4)..................... .21% .85% 1.00%
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>

(1) These numbers for the Hawaii Municipal Bond Fund have been restated to
reflect reductions in fee waiver and expense reimbursement agreements
effective in the current fiscal year. The Adviser and the Administrator have
agreed to waive a portion of their fees. The Adviser and the Administrator
reserve the right to terminate their respective waivers at any time in their
sole discretion. Absent such fee waivers, advisory fees would be .55% for
the High Grade Income Fund, .35% for the Hawaii Municipal Bond Fund, and
.74% for the Equity Fund. Absent fee waivers, the administration fee as
reflected in Other Expenses would be .20% for the Hawaii Municipal Bond
Fund. In addition, the Adviser has agreed on a voluntary basis to reimburse
expenses so that the total operating expenses of the Hawaii Municipal Bond
Fund will be maintained at .21%. Amounts reimbursed by the Adviser may
result in taxable income for shareholders. Absent the waiver by the
Administrator and expense reimbursements by the Adviser, Other Expenses for
the Hawaii Municipal Bond Fund would be .85%.

(2) The Distributor has agreed to waive all of their 12b-1 fees for this Fund.
Absent such fee waivers, distribution fees would be .25%.

(3) These amounts represent estimates for the current fiscal year.

(4) These numbers for the Hawaii Municipal Bond Fund have been restated to
reflect reductions in fee waiver and expense reimbursement agreements
effective in the current fiscal year. Absent the Adviser's and, with respect
to the Hawaii Municipal Bond Fund, the Administrator's voluntary fee
waivers, total operating expenses would be 1.15% for the High Grade Income
Fund, 1.45% for the Hawaii Municipal Bond Fund, and 1.34% for the Equity
Fund.

<TABLE>
<CAPTION>
EXAMPLE
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -------------------------------------------------------------------------------------------------------------------------------
An investor in the Retail Class B shares of a fund would pay the following
expenses on a $1,000 investment assuming (1) 5% annual return and (2)
redemption at the end of each time period:
High Grade Income Fund................................................... $ 43 $ 61
Hawaii Municipal Bond Fund............................................... $ 37 $ 42 $ 46 $ 61
Equity Fund.............................................................. $ 45 $ 66
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose
of the expense table and example is to assist the investor in understanding the
various costs and expenses that may be directly or indirectly borne by investors
in the Retail Class B shares of the Funds. A person who purchases shares through
a financial institution may be charged separate fees by that institution. See
"Purchase of Shares."

The rules of the Securities and Exchange Commission require that the maximum
sales charge be reflected in the above table. However, certain investors may
qualify for reduced sales charges. See "Purchase of Shares."

Long-term Shareholders may pay more than the equivalent of the maximum front-end
sales charges otherwise permitted by the Rules of the National Association of
Securities Dealers ("NASD").
<PAGE>
4

<TABLE>
<CAPTION>
INSTITUTIONAL CLASS A SHARES
-----------------------------------
HAWAII
MUNICIPAL HIGH GRADE
BOND INCOME EQUITY
SHAREHOLDER TRANSACTION EXPENSES FUND FUND FUND
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)............................................................ None None None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage
of offering price)................................................ None None None
Maximum Contingent Deferred Sales Charge............................ None None None
Exchange Fee........................................................ None None None
Wire Redemption Fee................................................. $15 $15 $15

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
- ---------------------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1)................................ .00% .25% .40%
Other Expenses(1)................................................... .21% .35%(2) .35%(2)
- ---------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(3)..................... .21% .60% .75%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>

(1) These numbers for the Hawaii Municipal Bond have been restated to reflect
reductions in fee waiver and expense reimbursement arrangements effective in
the current fiscal year. The Adviser and the Administrator have agreed to
waive a portion of their fees. The Adviser and the Administrator reserve the
right to terminate the waiver at any time in their sole discretion. Absent
such fee waivers, advisory fees would be .55% for the High Grade Income
Fund, .35% for the Hawaii Municipal Bond Fund, and .74% for the Equity Fund.
Absent fee waivers, the administration fee would be .20% for the Hawaii
Municipal Bond Fund. In addition, the Adviser has agreed on a voluntary
basis to reimburse expenses so that the total operating expenses of the
Hawaii Municipal Bond Fund will be maintained at .21%. Amounts reimbursed by
the Adviser may result in taxable income for shareholders. Absent the waiver
by the Administrator and expense reimbursements by the Adviser, Other
Expenses for the Hawaii Municipal Bond Fund would be .85%.

(2) These amounts represent estimates for the current fiscal year.

(3) These numbers for the Hawaii Municipal Bond have been restated to reflect
reductions in fee waiver and expense reimbursement arrangements effective in
the current fiscal year. Absent the Adviser's, and, with respect to the
Hawaii Municipal Bond Fund, the Administrator's voluntary fee waivers, total
operating expenses would be .90% for the High Grade Income Fund, 1.20% for
the Hawaii Municipal Bond Fund, and 1.09% for the Equity Fund.

<TABLE>
<CAPTION>
EXAMPLE
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- ------------------------------------------------------------------------------------------------------------------------
An investor in the Institutional Class A shares of a fund would pay
the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period:
High Grade Income Fund............................................ $ 6 $ 19
Hawaii Municipal Bond Fund........................................ $ 2 $ 7 $ 12 $ 27
Equity Fund....................................................... $ 8 $ 24
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose
of the expense table and example is to assist the investor in understanding the
various costs and expenses that may be directly or indirectly borne by investors
in the Institutional Class A shares of the Funds. A person who purchases
Institutional Class A shares through a First Hawaiian Bank agency, custodial,
fiduciary or advisory account will pay a separate fee for those services. See
"Purchase of Shares."

<PAGE>
5

FINANCIAL HIGHLIGHTS

The following information has been audited by Coopers & Lybrand L.L.P., the
Trust's independent accountants, as indicated in their report dated February 16,
1996 on the Trust's financial statements as of December 31, 1995 included in the
Trust's Statement of Additional Information under "Financial Information." This
table should be read in conjunction with the Trust's financial statements and
notes thereto. Additional information is set forth in the 1995 Annual Report to
Shareholders and is available without charge by calling 1-800-262-9565. As of
the fiscal year ended December 31, 1995, the Equity and High Grade Income Funds
had not commenced operations.

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES
----------------------------
NET REALIZED
AND DISTRIBUTIONS
NET ASSET UNREALIZED --------------------------
VALUE, NET GAIN (LOSS) NET NET ASSET
BEGINNING INVESTMENT ON INVESTMENT CAPITAL VALUE, END
OF PERIOD INCOME INVESTMENTS INCOME GAINS OF PERIOD
----------- ------------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
HAWAII MUNICIPAL BOND FUND

INSTITUTIONAL CLASS A

FOR THE PERIOD ENDED DECEMBER 31,
1995(1) 10.00 0.451 0.473 (0.452) -- 10.47

RETAIL CLASS B**

FOR THE PERIOD ENDED DECEMBER 31,
1995(2) 10.00 0.453 0.472 (0.451) -- 10.47

<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME TO
AVERAGE NET AVERAGE NET
NET ASSETS RATIO OF NET ASSETS
ASSETS, RATIO OF EXCLUDING FEE INVESTMENT EXCLUDING FEE
END OF EXPENSES TO WAIVERS AND INCOME TO WAIVERS AND
PERIOD AVERAGE NET REIM- AVERAGE NET REIM-
TOTAL RETURN (000) ASSETS BURSEMENTS ASSETS BURSEMENTS
------------ ---------- ----------- --------------- ------------- ---------------
<S> <C>
HAWAII MUNICIPAL BOND FUND
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED DECEMBER 31,
1995(1) 10.91%* $9,411 0.27%* 1.10%* 5.24%* 4.40%*
RETAIL CLASS B**
FOR THE PERIOD ENDED DECEMBER 31,
1995(2) 10.85%* $6,702 0.33 %* 1.45 %* 5.14 %* 4.02 %*

PORTFOLIO
TURNOVER
RATE
-----------
HAWAII MUNICIPAL BOND FUND
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED DECEMBER 31,
1995(1) 68%
RETAIL CLASS B**
FOR THE PERIOD ENDED DECEMBER 31,
1995(2) 68%
</TABLE>

Amounts Designated as "--" are either $0 or have been rounded to $0.

* Annualized

** Total return does not reflect the sales charge.

(1) Commenced operations on February 16, 1995.

(2) Commenced operations on February 15, 1995.

<PAGE>
6

THE TRUST

BISHOP STREET FUNDS (the "Trust") is an open-end management investment company
that offers units of beneficial interest ("shares") in the Funds through
separate Classes (Retail Class B and Institutional Class A), which provide for
variations in sales charges, distribution costs, voting rights and dividends.
Except for these differences, each share of each Fund represents an undivided,
proportionate interest in the Fund. This Prospectus offers shares of the Trust's
High Grade Income Fund, Hawaii Municipal Bond Fund and Equity Fund (the
"Funds"). Information regarding the Trust's Money Market Fund and Treasury Money
Market Fund is contained in separate prospectuses that may be obtained by
calling 1-800-262-9565.

INVESTMENT OBJECTIVES AND POLICIES

Each Fund has its own investment objective and policies. There can be no
assurance that the investment objective of a Fund will be met.

HIGH GRADE INCOME FUND

The investment objective of the Fund is to provide high total return consistent
with prudent investment risk.

The Fund invests primarily (at least 65% of its assets under normal conditions)
in high grade U.S. dollar-denominated bonds and debentures issued by U.S. and
foreign corporations and governments (i.e. those that are rated at the time of
purchase AA or better by Standard & Poor's Corporation ("S&P") or Aa by Moody's
Investors Service ("Moody's")). (Each of S&P and Moody's and certain other
ratings agencies are hereinafter referred to as a Nationally Recognized
Statistical Rating Organizations, or "NRSROs"). The Fund will maintain an
average weighted remaining maturity of between five and twelve years under
normal circumstances.

Any remaining assets may consist of: (i) obligations of the U.S. Treasury; (ii)
obligations issued or guaranteed as to principal and interest by agencies and
instrumentalities of the U.S. Government; (iii) mortgage pass-through securities
issued by the Government National Mortgage Association ("GNMA"), mortgage-backed
securities issued by other government agencies and privately issued
mortgage-backed securities rated at least A by an NRSRO, including CMOs, REMICs
and ARMs; (iv) repurchase agreements involving any of such obligations; (v)
obligations issued by supranational entities; (vi) asset-backed securities rated
at least A by an NRSRO; (vii) commercial paper rated at least P-2 or A-2 by an
NRSRO; (viii) certificates of deposit, time deposits, notes, bankers'
acceptances and loan participations of U.S. and foreign banks that are rated in
the top two short-term rating categories by two or more NRSROs or that are of
comparable quality; (ix) receipts; and (x) shares of money market investment
companies investing in such obligations.

The Fund may invest up to 5% of its total assets in fixed income securities
rated as low as Baa by Moody's or BBB by S&P. Such securities possess some
speculative characteristics. The Fund intends to dispose of a security if its
rating after purchase declines below Baa or BBB.

The Fund may also invest in floating or variable rate obligations and zero
coupon securities, and may purchase securities on a "when-issued" basis.

HAWAII MUNICIPAL BOND FUND

The investment objective of this Fund is to provide high current income that is
exempt from regular Federal and State of Hawaii income taxes.

The Fund invests at least 80% of its assets in bonds and notes issued by states,
territories, and possessions of the U.S. and their agencies, authorities,
instrumentalities and political subdivisions, that are rated AAA, AA, A or BBB
by S&P, Aaa, Aa, A or Baa by Moody's or AAA, AA, A or BBB by Fitch Investors
Service ("Fitch"), and which pay interest that is not subject to regular Federal
income tax ("Municipal Securities"). This is a fundamental policy of the Fund.
Under normal circumstances, the Fund invests at least 65% of its assets in
Municipal Securities issued by the State of Hawaii, its agencies,
instrumentalities, and political sub-divisions, the income on which is exempt
from State of Hawaii personal income taxes ("Hawaii Municipal Securities").
There is no restriction on the percentage of the Fund's assets that may be
invested

<PAGE>
7

in obligations the interest income from which is treated as a preference item
for individuals for purposes of the federal alternative minimum tax.

The Fund may invest up to 20% of its assets in taxable securities, and may
purchase unrated securities that at the time of purchase are of comparable
quality to rated securities that the Fund may purchase as determined by the
Adviser. The Fund may purchase shares of other investment companies and may
purchase securities on a "when-issued" basis.

The Fund has no restrictions on the maturity of securities in which it may
invest. Accordingly, the Fund will invest in Municipal Securities of which the
maturities, in the judgment of the Adviser, will provide a high level of current
income consistent with prudent investment, with consideration given to market
conditions.

EQUITY FUND

The investment objective of the Fund is to produce long-term growth of capital,
with a secondary goal of current income.

Under normal circumstances, the Fund invests primarily (at least 65% of its
total assets) in common stocks of domestic issuers that are traded on a national
securities exchange or on NASDAQ, and U.S. dollar-denominated equity securities
of foreign issuers (including ADRs). The Fund may also purchase warrants and
rights to purchase common stocks, debt securities convertible into common stocks
and preferred stocks convertible into common stocks, and may acquire ADRs and
shares of open-end and closed-end investment companies. The Fund may enter into
repurchase agreements.

The Fund will invest in a diversified portfolio of common stocks and securities
convertible into common stocks of U.S. companies that have the potential for
capital appreciation. Market capitalizations of issues selected will be
primarily in excess of $500 million. Selections of issues for inclusion in the
portfolio will be based on top down/ bottom up evaluation, including fundamental
factors affecting growth such as industry position, management qualifications
and historical earnings. Industry sector rotation will occur based on an
assessment of the economic cycle.

GENERAL INVESTMENT POLICIES

The High Grade Income Fund and Equity Fund are diversified funds. The Hawaii
Municipal Bond Fund will comply with the diversification requirements of
Sub-Chapter M (See "Taxes").

For temporary defensive purposes during periods when the Adviser determines that
market conditions warrant, each Fund may invest up to 100% of its assets in
taxable money market instruments consisting of securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities, repurchase
agreements, and commercial paper rated at least A-1 by S&P, P-1 by Moody's, or
Fitch-1 by Fitch. Each Fund also may hold a portion of its assets in cash. Each
Fund will not be pursuing its investment objective to the extent that a
substantial portion of its assets is invested in cash or money market
securities.

Each of the Funds may lend up to 33 1/3% of its total assets to investors for
the purpose of realizing additional income. Each such Fund may also borrow money
in amounts up to 33 1/3% of its net assets. No Fund will purchase securities
while its borrowings exceed 5% of its total assets.

A Fund's purchase of investment company securities will result in the layering
of expenses. A Fund is prohibited from acquiring the securities of other
investment companies if, as a result of such acquisition, the Fund owns in the
aggregate (1) more than 3% of the total outstanding voting stock of the acquired
company, (2) securities issued by the acquired company having an aggregate value
of 5% of the value of the total assets of the Fund, or (3) securities issued by
the acquired company and all other investment companies having an aggregate
value in excess of 10% of the value of the total assets of the Fund.
<PAGE>
8

RISK FACTORS

Under normal market conditions, the Hawaii Municipal Bond Fund will be
predominantly invested in Hawaii Municipal Securities and, therefore, the value
of its shares may be especially affected by factors pertaining to the Hawaiian
economy and other factors specifically affecting the ability of issuers of
Hawaii Municipal Securities to meet their obligations. As a result, the value of
the Fund's shares may fluctuate more widely than the value of the shares of a
portfolio investing in securities relating to a number of different states. The
ability of state, county and local governments to meet their obligations will
depend primarily on the availability of tax and other revenues to those
governments and on their fiscal conditions generally. The amount of tax and
other revenues available to governmental issuers of Hawaii Municipal Securities
may be affected from time to time by economic, political and demographic
conditions within the state. In addition, constitutional or statutory
restrictions may limit a government's power to raise revenues or increase taxes.
Further, payments of principal and interest on limited obligation securities
will depend on the economic condition of the facility or specific revenue source
from whose revenues the payments will be made, which in turn could be affected
by economic, political and demographic conditions in the state. Moreover, the
Fund is classified as "non-diversified" because it may invest in obligations of
a relatively limited number of issuers.

Under normal market conditions, it is estimated that the annual portfolio
turnover rate for the High Grade Income Fund will not exceed 200%, and the
turnover rate for the Equity Fund will not exceed 150%. Such turnover rates, if
achieved, will lead to higher transaction costs and possible tax consequences.

INVESTMENT LIMITATIONS

The High Grade Income Fund and Equity Fund may not purchase securities of any
issuer (except securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities, and repurchase agreements involving such
securities) if, with respect to 75% of each Fund's assets, more than 5% of total
assets of the Fund would be invested in the securities of such issuer.

No Fund may purchase any securities which would cause more than 25% of the total
assets of the Fund to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry, provided
that this limitation does not apply to investments in obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities, and
repurchase agreements involving such securities. The Hawaii Municipal Bond Fund
may not invest more than 25% of its assets in securities issued or backed by
non-governmental users that are members of the same industry.

The foregoing percentage limitations will apply at the time of the purchase of a
security. Additional investment limitations are set forth in the Statement of
Additional Information.

FUNDAMENTAL POLICIES

Each Fund's investment objective and the foregoing investment limitations are
fundamental policies. Fundamental policies cannot be changed with respect to a
Fund without the consent of the holders of a majority of that Fund's outstanding
shares.

THE ADVISER

First Hawaiian Bank (the "Adviser") acts as the investment adviser for the
Funds. The Adviser makes investment decisions for the assets of each Fund, and
continuously reviews, supervises and administers each Fund's investment program.
The Adviser discharges its responsibilities subject to the supervision of, and
policies set by, the Trustees of the Trust.

The Adviser is a wholly-owned subsidiary of First Hawaiian, Inc. Prior to
January, 1995, the Adviser had not previously served as an investment adviser to
mutual funds. The Adviser and its corporate predecessors have provided asset
management services in Hawaii for over 70 years. As of December 31, 1995, the
Trust and Investment divisions of the Adviser had assets under management of
approximately $7.2 billion.

<PAGE>
9

The Adviser is entitled to a fee, which is calculated daily and paid monthly, at
an annual rate of .55% of the High Grade Income Fund's average daily net assets,
.35% of the Hawaii Municipal Bond Fund's average daily net assets, and .74% of
the Equity Fund's average daily net assets. The Adviser may from time to time
waive all or a portion of its fee in order to limit the operating expenses of a
Fund. Any such waiver is voluntary and may be terminated at any time in the
Adviser's sole discretion.

For the fiscal year ended December 31, 1995, the Hawaiian Municipal Bond Fund
paid no advisory fees. As of the fiscal year ended December 31, 1995, the High
Grade Income and Equity Funds had not commenced operations.

Louis M. Levitas, a dual employee of the Adviser and First Hawaiian Dealer
Center, Inc., is the portfolio manager of the Hawaii Municipal Bond Fund. Prior
to joining the Advisor in February, 1995, Mr. Levitas co-founded and served as
consultant to Hawaiian Capital Securities from 1991 through 1994. In 1992 he
established an Investment Management Group for Stone & Youngberg, a municipal
specialist firm in San Francisco, where he managed individual and family trust
portfolios.

Orest Saikevych is the portfolio manager of the Equity Fund. Mr. Saikevych has
been active in the investment management business for thirteen years and has
managed First Hawaiian Bank's Pooled Equity Fund since 1987.

The day-to-day management of the High Grade Income Fund's investments is the
responsibility of a team of investment professionals. Decisions are made by
committee and no person has primary responsibility for making recommendations to
the committee.

THE ADMINISTRATOR

SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI Corporation ("SEI"), provides the Trust with administrative
services, including fund accounting, regulatory reporting, necessary office
space, equipment, personnel, and facilities. The Administrator also acts as
shareholder servicing agent of the Funds.

The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of the Funds.
The Administrator may waive its fee in its discretion. For the fiscal year ended
December 31, 1995, the Hawaii Municipal Bond Fund paid no administration fees.

THE TRANSFER AGENT

DST Systems, Inc. ("Transfer Agent"), 210 West 10th Street, Kansas City,
Missouri 64105, serves as the Transfer Agent and dividend disbursing agent for
the Trust.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI, serves as distributor. The Retail Class B shares of the Trust have a Rule
12b-1 Distribution Plan (the "Retail Class B Plan"), under which such shares of
the Funds bear distribution expenses and related service fees at the annual rate
of up to .25% of their average daily net assets. Financial institutions that are
the record owner of shares for the account of their customers may impose
separate fees for account services to their customers.

The Funds may execute brokerage or other agency transactions through the
Distributor, for which the Distributor receives compensation.

HOW TO PURCHASE SHARES

GENERAL INFORMATION

Shares of the Funds are available for sale in the State of Hawaii and Guam.

Federal Reserve wire on Federal holidays restricting wire transfers. The minimum
initial investment in any Fund is $1,000 ($500 for IRAs and $500 for officers,
directors, or employees of First Hawaiian Bank or its affiliates). The
Distributor may waive the minimum investment at its discretion. Subsequent
purchases of shares must be at least $100.

A purchase order for shares will be effective as of the Business Day received by
the Transfer Agent if the Transfer Agent receives the order and payment before
4:00 p.m., New York time. The purchase price (the "Offering Price") of Retail
Class B shares is the net asset value next determined after the purchase order
is effective plus any applicable sales charge. The purchase price of
Institutional Class A shares is the net asset value next determined after the
purchase order is effective. Purchases will be made in full and fractional
shares calculated to three decimal places.

The net asset value per share of each Fund is determined as of 4:00 p.m., New
York time on each Business Day by dividing the total market value of that Fund's
investments and other assets, less any liabilities, by the total outstanding
shares of the Fund. Pursuant to guidelines adopted and monitored by the Trustees
of the Trust, each Fund may use a pricing service to provide market quotations
or valuations. A pricing service may derive such valuations through the use of a
matrix system to value fixed income securities which considers factors such as
securities prices, yield features, ratings, and developments related to a
specific security. Although the methodology and procedures for determining net
asset value are identical for both classes of each Fund, the net asset value per
share of such classes will differ because of the distribution expenses charged
to Retail Class B shares.

The Trust reserves the right to reject a purchase order for shares when the
Distributor determines that it is not in the best interest of the Trust and/or
its Shareholders to accept such order.

Shareholders who own their shares of record and who desire to transfer
registration of their shares should contact the Transfer Agent at 1-800-262-9565
for further instructions.

HOW TO PURCHASE INSTITUTIONAL CLASS A SHARES

Institutional Class A shares may only be purchased by First Hawaiian Bank in its
capacity as Agent, Fiduciary, Custodian or Adviser.

HOW TO PURCHASE RETAIL CLASS B SHARES

Retail Class B shares of the Funds may be purchased directly from the Transfer
Agent by mail, by wire or through an automatic investment plan ("AIP"). Shares
may also be purchased through broker-dealers that have established a dealer
agreement with the Distributor.

HOW TO PURCHASE BY MAIL

You may purchase shares of a Fund by completing and signing an Account
Application form and mailing it, along with a check (or other negotiable bank
instrument or money order) payable to "Bishop Street (Fund Name)," to the
Transfer Agent at 210 West 10th Street, Kansas City, Missouri 64105. You may
purchase more shares at any time by mailing payment also to the Transfer Agent
at the above address. Orders placed by mail will be executed on receipt of your
payment. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees incurred.

You may obtain Account Application Forms by calling the Distributor at
1-800-262-9565.

HOW TO PURCHASE BY WIRE

You may purchase shares by wiring Federal funds, provided that your Account
Application has been previously received. You must wire funds to the Transfer
Agent and the wire instructions must include your account number. You must call
the Transfer Agent at 1-800-262-9565 before wiring any funds. An order to
purchase shares by Federal funds wire will be deemed to have been received by
the Fund on the Business Day of the wire; provided that the shareholder wires
funds to the Transfer Agent prior to 4:00 p.m., New York time. If the Transfer
Agent does not receive the wire by 4:00 p.m., New York time, the order will be
executed on the next Business Day.
<PAGE>
11

HOW TO PURCHASE THROUGH AN AUTOMATIC INVESTMENT PLAN ("AIP")

You may arrange for periodic additional investments in the Funds through
automatic deductions by Automated Clearing House ("ACH") from a checking account
by completing an AIP Application Form. The minimum pre-authorized investment
amount is $50 per month. An AIP Application Form may be obtained by contacting
the Distributor at 1-800-262-9565. The AIP is available only for additional
investments to an existing account.

HOW TO PURCHASE THROUGH FINANCIAL INSTITUTIONS

Shares may be purchased through financial institutions, including the Adviser,
that provide distribution assistance or shareholder services. Shares purchased
by persons ("Customers") through financial institutions may be held of record by
the financial institution. Financial institutions may impose an earlier cut-off
time for receipt of purchase orders directed through them to allow for
processing and transmittal of these orders to the Transfer Agent for
effectiveness the same day. Customers should contact their financial institution
for information as to that institution's procedures for transmitting purchase,
exchange or redemption orders to the Trust.

Customers who desire to transfer the registration of shares beneficially owned
by them but held of record by a financial institution should contact the
institution to accomplish such change.

Depending upon the terms of a particular Customer account, a financial
institution may charge a Customer account fees. Information concerning these
services and any charges will be provided to the Customer by the financial
institution.

SALES CHARGES

The following table shows the regular sales charge on Retail Class B shares to a
"single purchaser" (defined below) together with the sales charge that is
reallowed to certain financial intermediaries (the "reallowance").

<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE REALLOWANCE
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
AMOUNT OF OFFERING OF NET OF OFFERING
OF PRICE PER AMOUNT PRICE PER
PURCHASE SHARE INVESTED SHARE
- -------------------- ----------------- ----------------- ----------------
<S> <C> <C> <C>
Less than $25,000... 3.50% 3.63% 3.15%
$25,000 but less
than $50,000...... 3.25% 3.36% 2.93%
$50,000 but less
than $100,000..... 3.00% 3.09% 2.70%
$100,000 but less
than $250,000..... 2.50% 2.56% 2.25%
$250,000 but less
than $500,000..... 1.75% 1.78% 1.58%
$500,000 but less
than $1,000,000... 1.00% 1.01% 0.90%
over $1,000,000..... none none none
</TABLE>

Under certain circumstances, the Distributor may use its own funds to compensate
financial institutions and intermediaries in amounts additional to the
commissions shown above. In addition, the Distributor may, from time to time in
its sole discretion, institute one or more promotional incentive programs, which
will be paid by the Distributor from the sales charges it receives or from any
other source available to it. Under any such program, the Distributor will
provide promotional incentives in the form of cash or other compensation,
including merchandise, airline vouchers, trips and vacation packages, to all
dealers selling shares of the Funds. Under certain circumstances, reallowances
of up to the amount of the entire sales charge may be paid to certain financial
institutions, who might then be deemed to be "underwriters" under the Securities
Act of 1933.

REDUCED SALES CHARGE:

RIGHTS OF ACCUMULATION

In calculating the sales charge rates applicable to current purchases of Retail
Class B shares, a "single purchaser" is entitled to cumulate current purchases
with the current market value of previously purchased Retail Class B shares of
the Funds sold subject to a sales charge.

The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares
<PAGE>
12

of the Funds for their own combined individual and joint accounts or for trust
or custodial accounts for their minor children, and (iii) a fiduciary purchasing
for any one trust, estate or fiduciary account, including employee benefit plans
created under Sections 401 or 457 of the Internal Revenue Code of 1986, as
amended (the "Code") including related plans of the same employer.

To exercise your right of accumulation based upon shares you already own, you
must ask the Transfer Agent for this reduced sales charge at the time of your
additional purchase and provide the account number(s) of the investor, as
applicable, the investor and spouse, and their minor children. The Funds may
amend or terminate this right of accumulation at any time as to subsequent
purchases.

REDUCED SALES CHARGE: LETTER OF INTENT

By submitting a Letter of Intent (the "Letter") to the Transfer Agent, a "single
purchaser" may purchase shares of the Funds during a 13-month period at the
reduced sales charge rates applying to the aggregate amount of the intended
purchases stated in the Letter. The Letter may apply to purchases made up to 90
days before the date of the Letter. To receive credit for such prior purchases
and later purchases benefitting from the Letter, you must notify the Transfer
Agent at the time the Letter is submitted that there are prior purchases that
may apply, and notify the Transfer Agent again at the time of later purchases
that such purchases are applicable under the Letter.

WAIVER OF SALES LOAD

No sales charge is imposed on shares of the Funds: (i) issued as dividends and
capital gain distributions; (ii) acquired through the exercise of exchange
privileges described below; (iii) sold to officers, directors or trustees,
employees and retirees (and their spouses and immediate family members) of the
Trust, First Hawaiian Bank and its affiliates; (iv) issued in plans of
reorganization, such as mergers, asset acquisitions and exchange offers, to
which the Trust is a party; (v) purchased with the proceeds of distributions
from employee benefit plans for which the Adviser or its affiliates act in a
fiduciary capacity or (vi) purchased within thirty days of a redemption of
Retail Class B shares of such Funds (only to the amount of such redemption). You
must notify the Distributor at the time of your purchase if you are eligible for
a waiver of the sales load. An investor relying upon any of the categories of
waivers of the sales charge must qualify such waiver in advance of the purchase
with the Distributor of the financial institution or intermediary through which
the shares are purchased by the investor.

In addition, purchases of Retail Class B shares of a Fund that are funded by the
proceeds from the redemption (within 60 days of the purchase of Fund shares) of
shares of any unrelated open-end investment company that charges either a front
end or back end sales load may be made at net asset value. To make such a
purchase at net asset value, the investor or the investor's broker must, at the
time of purchase, submit a written request to the Transfer Agent that the
purchase be processed at net asset value pursuant to this privilege, accompanied
by a photocopy of the confirmation (or similar evidence) showing the redemption
from the unrelated fund. The redemption of the shares of the non-related fund
is, for federal income tax purposes, a sale upon which a gain or loss may be
realized.

EXCHANGES OF SHARES

You may exchange Retail Class B or Institutional Class A shares of any Fund for
Retail Class B or Institutional Class A shares, respectively, of any other Fund
sold through this prospectus or of the Trust's Money Market or Treasury Money
Market Funds without paying any additional sales charge. Exchanges are generally
made at net asset value.

Exchanges will be made only after instructions in writing or by telephone (an
"Exchange Request") are received by the Transfer Agent. In order to effect an
exchange of shares by telephone, you must elect the telephone exchange option on
your Account Application Form. If an Exchange Request in good order is received
by the Transfer Agent by 4:00 p.m. New York time, on any Business Day, the
exchange will
<PAGE>
13

occur on that day. The exchange privilege may be exercised only in those states
where the class of shares of the "new" Fund may legally be sold.

Customers who beneficially own shares held by a financial institution should
contact that institution if they wish to exchange shares. The institution will
contact the Transfer Agent and effect the exchange on behalf of the Customer.

The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' notice.

REDEMPTION OF SHARES

You may redeem your shares without charge on any Business Day. There is,
however, a $15 charge for wiring redemption proceeds to a shareholder's
designated account. Shares may be redeemed by mail, by telephone or through a
pre-arranged systematic withdrawal plan. Investors who own shares held by a
financial institution should contact that institution for information on how to
redeem shares.

BY MAIL

A written request for redemption must be received by the Transfer Agent, 210
West 10th Street, Kansas City, Missouri 64105 in order to constitute a valid
redemption request.

If the redemption request exceeds $5,000, or if the request directs the proceeds
to be sent or wired to an address different from that of record, the Transfer
Agent may require that the signature on the written redemption request be
guaranteed. You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union, securities exchange or association, clearing
agency or savings association. Notaries public cannot guarantee signatures. The
signature guarantee requirement will be waived if all of the following
conditions apply: (1) the redemption is for not more than $5,000 worth of
shares, (2) the redemption check is payable to the shareholder(s) of record, and
(3) the redemption check is mailed to the shareholder(s) at his or her address
of record.

BY TELEPHONE

You may redeem your shares by calling the Transfer Agent at 1-800-262-9565.
Under most circumstances, payments will be transmitted on the next Business Day
following receipt of a valid request for redemption. You may have the proceeds
mailed to your address or wired to a commercial bank account previously
designated on your Account Application. There is no charge for having redemption
proceeds mailed to you, but there is a $15 charge for wiring redemption
proceeds.

You may request a wire redemption for redemptions in excess of $500 by calling
the Transfer Agent at 1-800-262-9565, who will deduct a wire charge of $15 from
the amount of the wire redemption. Shares cannot be redeemed by Federal Reserve
wire on Federal holidays restricting wire transfers.

Neither the Transfer Agent nor the Trust will be responsible for any loss,
liability, cost or expense for acting upon wire or telephone instructions that
it reasonably believes to be genuine. The Trust and Transfer Agent will each
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine, including requiring a form of personal identification
prior to acting upon instructions received by telephone and recording telephone
instructions. Such procedures may include taping of telephone conversations.

If market conditions are extraordinarily active or other extraordinary
circumstance exist, and you experience difficulties placing redemption orders by
telephone, you may consider placing your order by mail.

SYSTEMATIC WITHDRAWAL PLAN ("SWP")

The Funds offer a Systematic Withdrawal Plan ("SWP"), which you may use to
receive regular distributions from your account. Upon commencement of the SWP,
your account must have a current value of $10,000 or more. You may elect to
receive automatic payments via check or ACH of $50 or more on a monthly,
quarterly, semi-annual or annual basis. You may obtain an SWP Application Form
by contacting the Distributor at 1-800-262-9565.
<PAGE>
14

To participate in the SWP, you must have your dividends automatically
reinvested. You should realize that if your automatic withdrawals exceed income
dividends, your invested principal in the account will be depleted. Thus,
depending on the frequency and amounts of the withdrawal payments and/or any
fluctuations in the net asset value per share, your original investment could be
exhausted entirely. You may change or cancel the SWP at any time on written
notice to the Transfer Agent. The Transfer Agent may require that the signature
on the written notice be guaranteed.

It is generally not in your best interest to be participating in the SWP at the
same time that you are purchasing additional shares if you have to pay a sales
load in connection with such purchases.

OTHER INFORMATION REGARDING REDEMPTIONS

All redemption orders are effected at the net asset value per share next
determined after receipt of a valid request for redemption. Net asset value per
share is determined as of 4:00 p.m., New York time, on each Business Day.

Payment to shareholders for shares redeemed will be made within seven days after
the Transfer Agent receives the valid redemption request. At various times,
however, a Fund may be requested to redeem shares for which it has not yet
received good payment; collection of payment may take ten or more days. In such
circumstances, the redemption request will be rejected by the Fund. Once a Fund
has received good payment for the shares a shareholder may submit another
request for redemption.

Due to the relatively high costs of handling small investments, each Fund
reserves the right to redeem your shares at net asset value, if, your account in
any Fund has a value of less than the minimum initial purchase amount.
Accordingly, if you purchase shares of any Fund in only the minimum investment
amount, you may be subject to involuntary redemption if you redeem any shares.
Before any Fund exercises its right to redeem such shares, you will be given
notice that the value of the shares in your account is less than the minimum
amount and will be allowed 60 days to make an additional investment in such Fund
in an amount which will increase the value of the account to at least the
minimum amount.

PERFORMANCE

From time to time, each of the Funds may advertise yield and total return. The
Hawaii Municipal Bond Fund may also advertise a tax-equivalent yield. These
figures are based on historical earnings and are not intended to indicate future
performance. No representation can be made concerning actual future yields or
returns.

The "yield" of a Fund refers to the income generated by a hypothetical
investment, net of any sales charge imposed in such Fund over a thirty day
period. This income is then "annualized," i.e., the income over thirty days is
assumed to be generated over one year and is shown as a percentage of the
investment.

"Tax-equivalent yield" is calculated by determining the rate of return that
would have to be achieved on a fully taxable investment to produce the after-tax
equivalent of a Fund's yield, assuming certain tax brackets for the shareholder.

The "total return" of a Fund refers to the average compounded rate of return on
a hypothetical investment for designated time periods, net of any sales charge
imposed on Retail Class B shares and assuming that dividend and capital gain
distributions have been reinvested.

For any Fund, the performance of Institutional Class A shares will be higher
than that of Retail Class B shares because of the sales load (when applicable)
and distribution expenses charged to Retail Class B shares.

long-term risk versus reward scenarios and could include the value of a
hypothetical investment in any of the capital markets. The Funds may also quote
financial and business publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques.

The Funds may quote various measures of volatility and benchmark correlation in
advertising and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.

TAXES

The following summary of income tax consequences is based on current tax laws
and regulations, which may be changed by legislative, judicial or administrative
action. No attempt has been made to present a detailed explanation of the
Federal, state, or local income tax treatment of the Funds or their
Shareholders. In addition, state and local tax consequences of an investment in
a Fund may differ from the Federal income tax consequences described below.
Accordingly, Shareholders are urged to consult their tax advisers regarding
specific questions as to Federal, state and local income taxes. Additional
information concerning taxes is set forth in the Statement of Additional
Information.

TAX STATUS OF THE FUNDS

Each Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other portfolios. Each Fund intends to continue to
qualify for the special tax treatment afforded regulated investment companies
("RICs") under Subchapter M of the Internal Revenue Code of 1986, as amended, so
as to be relieved of Federal income tax on net investment company taxable income
and net capital gains (the excess of net long-term capital gains over net
short-term capital losses) distributed to Shareholders. Subchapter M also
provides that a Fund will not invest more than 5% of its total assets in any one
issuer. This limitation applies to 50% of a Fund's total assets.

TAX STATUS OF DISTRIBUTIONS

Each Fund distributes substantially all of its net investment income (including
net short-term capital gains) and net capital gains to Shareholders. Dividends
from the High Grade Income and Equity Funds' net investment company taxable
income are taxable to its Shareholders as ordinary income (whether received in
cash or in additional shares) to the extent of the Fund's earnings and profits.
Dividends paid by a Fund to corporate Shareholders will qualify for the
deduction for dividends received by corporations to the extent attributable to
dividends received by the Fund from domestic corporations. A portion of such
dividends received may be subject to the alternative minimum tax. Distributions
of net capital gains do not qualify for the dividends received deduction and are
taxable to Shareholders as long-term capital gains, regardless of how long
Shareholders have held their shares and regardless of whether the distributions
are received in cash or in additional shares.

If, at the close of each quarter of its taxable year, at least 50% of the value
of the Hawaii Municipal Bond Fund's assets consist of obligations the interest
on which is excludable from gross income, the Fund may pay "exempt-interest
dividends" to its Shareholders. Those dividends constitute the portion of the
aggregate dividends as designated by the Fund, equal to the excess of the
excludable interest over certain amounts disallowed as deductions. Exempt-
interest dividends are excludable from a Shareholder's gross income for Federal
income tax purposes, but may have certain collateral Federal income tax
consequences, including alternative minimum tax consequences. Current Federal
income tax law limits the types and volumes of bonds qualifying for the Federal
income tax exemption of interest, which may have an effect on the ability of the
Fund to purchase sufficient amounts of tax-exempt securities to satisfy the
Code's requirements for the payment of "exempt interest" dividends.

<PAGE>
16

The Funds will provide annual reports to Shareholders of the Federal income tax
status of all distributions.

While the Hawaii Municipal Bond Fund intends to invest primarily in obligations
which produce interest exempt from Federal and Hawaii state income taxes, if the
Fund invests in obligations that are not exempt for Hawaii purposes, a portion
of the Fund's distributions will be subject to Hawaii income tax.

Dividends declared by a Fund in October, November or December of any year and
payable to Shareholders of record on a date in such a month, will be deemed to
have been paid by the Fund and received by the Shareholders on December 31 of
the year declared if paid by the Fund at any time during the following January.

Each Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax applicable to regulated
investment companies.

With respect to investments which are sold at original issue discount and thus
do not make periodic cash interest payments, each Fund will be required to
include as part of its current income the imputed interest on such obligations
even though the Fund has not received any interest payments on such obligations
during that period. Because each Fund distributes all of its net investment
income to its Shareholders, a Fund may have to sell portfolio securities to
distribute such imputed income which may occur at a time when the Adviser would
not have chosen to sell such securities and which may result in a taxable gain
or loss.

Sale, exchange or redemption of Fund Shares is a taxable transaction to the
Shareholder.

ADDITIONAL CONSIDERATIONS

The Hawaii Municipal Bond Fund may not be an appropriate investment for persons
(including corporations and other business entities) who are "substantial users"
(or persons related to "substantial users") of facilities financed by industrial
development private activity bonds. Such persons should consult their tax
advisers before purchasing shares. A "substantial user" is defined generally to
include "certain persons" who regularly use in their trade or business a part of
a facility financed from the proceeds of such bonds.

Shares of the Hawaii Municipal Bond Fund are not taxable for purposes of the
Hawaii state income tax to the extent that the Fund's investments consist of
obligations which are themselves exempt from taxation in Hawaii. See Municipal
Securities.

GENERAL INFORMATION

THE TRUST

The Trust was organized as a Massachusetts business trust under Declaration of
Trust dated May 25, 1994. The Declaration of Trust permits the Trust to offer
separate portfolios of shares and different classes of each portfolio. In
addition to the Funds, the Trust includes the Bishop Street Money Market Fund
and the Bishop Street Treasury Money Market Fund. All consideration received by
the Trust for shares of any Fund and all assets of such Fund belong to that Fund
and would be subject to the liabilities related thereto.

The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation materials
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.

TRUSTEES OF THE TRUST

The management and affairs of the Trust are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees have approved contracts
under which, as described above, certain companies provide essential management
services to the Trust.
<PAGE>
17

The Trustees of the Trust are as follows:

<TABLE>
<CAPTION>
NAME BUSINESS HISTORY
- ------------------------- ----------------------------
<S> <C>
Mr. Martin Anderson Attorney--Goodsill,
Anderson, Quinn & Stifel
Mr. Philip H. Ching Vice Chairman--First
Hawaiian Bank (through
January, 1996)
Honorable Shunichi Kimura Regent--Universtiy of Hawaii
Judge--State of Hawaii
Judiciary (1974-1994)
Mayor--County of Hawaii
(1968-1974)
Chairman and Chief Executive
of the County of Hawaii
(1964-1968)
Honorable William S. Trustee--Kamehameha Schools
Richardson Bishop Estate (through
1992); Chief
Justice--Supreme Court of
Hawaii, (through 1983)
Lieutenant Governor--State
of Hawaii (1962-1966)
Mr. Manuel R. Sylvester Managing and Executive
Partner--Coopers & Lybrand
(through 1992)
Dr. Joyce S. Tsunoda Senior Vice President and
Chancellor for Community
Colleges--University of
Hawaii
Mr. David G. Lee Senior Vice President--SEI
Financial Management
Corporation
</TABLE>

VOTING RIGHTS

Each share held entitles the Shareholder of record to one vote for each dollar
invested. In other words, each shareholder of record is entitled to one vote for
each dollar of net asset value of the shares held on the record date for the
meeting. The Shareholders of each Fund will vote separately on matters
pertaining solely to that Fund. The Shareholders of each class of each Fund will
vote separately on matters pertaining to its distribution plan. As a
Massachusetts business trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances.

In addition, a Trustee may be removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders should direct inquiries to Bishop Street Funds at P.O. Box 419240,
Kansas City, MO 64141-6240 or by calling 1-800-262-9565.

DIVIDENDS

Substantially all of the net investment income (exclusive of capital gains) of
the High Grade Income and Hawaii Tax-Free Funds is declared daily and
distributed in the form of monthly dividends. The Equity Fund declares and pays
such dividends on a quarterly basis. Shareholders of record on the date each
dividend is declared will be entitled to receive the dividend. If any net
capital gains are realized, they will be distributed by each Fund at least
annually.

Shareholders automatically receive all income dividends and capital gains
distributions in the form of additional shares at the net asset value next
determined following the record date, unless the Shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Bishop Street Funds at P.O. Box 419240, Kansas City, MO
64141-6240, at least 15 days prior to the distribution. Shareholders may receive
payments for cash distributions in the form of a check, by Federal Reserve wire
transfer or ACH.

<PAGE>
18

Dividends and distributions of a Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of any such payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution.

The dividends on Retail Class B Shares of the Funds will normally be lower than
those on Institutional Class A Shares because of the distribution expenses
charged to Retail Class B Shares.

The Trust believes that as of February 5, 1995, First Hawaiian Bank and its
affiliates owned of record or beneficially, substantially all of the shares of
the Hawaii Municipal Bond Fund. As a consequence, First Hawaiian Bank may be
deemed to be a "controlling person" of this Fund within the meaning of the
Investment Company Act of 1940, as amended.

COUNSEL AND INDEPENDENT ACCOUNTANTS

Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Coopers & Lybrand
L.L.P. serves as the independent accountant of the Trust.

CUSTODIAN

Chemical Bank, (the "Custodian"), acts as custodian of the Trust's assets. The
Custodian holds cash, securities and other assets of the Trust as required by
the 1940 Act.

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of the permitted investments for the various
Funds and the various risk factors associated therewith:

AMERICAN DEPOSITARY RECEIPTS ("ADRs")--ADRs are typically issued by a U.S.
financial institution that evidence ownership of underlying securities issued by
a foreign issuer. While the Funds expect to invest primarily in sponsored ADRs,
a joint arrangement between the foreign issuer and the depositary, some ADRs may
be unsponsored. Unlike sponsored ADRs the holders of unsponsored ADRs bear all
expenses and the depositary may not be obligated to distribute Shareholder
communications or to pass-through the voting rights on the deposited securities.
ADRS are typically listed and traded in the U.S. in the form of American
Depositary Shares (ADSs).

BANKERS' ACCEPTANCES--Bills of exchange or time drafts drawn on and accepted by
a commercial bank. Bankers' acceptances are used by corporations to finance the
shipment and storage of goods and to furnish dollar exchange. Maturities are
generally six months or less.

CERTIFICATES OF DEPOSIT--Interest bearing instruments with a specific maturity.
Certificates of deposit are issued by banks and savings and loan institutions in
exchange for the deposit of funds and normally can be traded in the secondary
market prior to maturity. Certificates of deposit have penalties for early
withdrawal.

COMMERCIAL PAPER--The term used to designate unsecured short-term promissory
notes issued by municipalities, corporations and other entities. Maturities on
these issues vary, generally from a few days to nine months.

CONVERTIBLE SECURITIES--Convertible securities have characteristics similar to
both fixed income and equity securities. Because of the conversion feature, the
market value of convertible securities tends to move together with the market
value of the underlying stock. As a result, the Fund's selection of convertible
securities is based, to a great extent, on the potential for capital
appreciation that may exist in the underlying stock. The value of convertible
securities is also affected by prevailing interest rates, the credit quality of
the issuer and any call provisions.

EQUITY SECURITIES--Investments in common stocks are subject to market risks
which may cause their prices to fluctuate over time. Changes in the value of
portfolio securities will not necessarily affect cash income derived from these
securities but will affect a Fund's net asset value.
<PAGE>
19

FIXED INCOME SECURITIES--The market value of fixed income investments will
change in response to interest rate changes and other factors. During periods of
falling interest rates, the values of outstanding fixed income securities
generally rise. Conversely, during periods of rising interest rates, the values
of such securities generally decline. Moreover, while securities with longer
maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the rating of any
fixed income security and in the ability of an issuer to make payments of
interest and principal will also affect the value of these investments. Changes
in the value of portfolio securities will not affect cash income derived from
these securities but will affect a Fund's net asset value.

GNMA PASS-THROUGH SECURITIES--GNMA securities represent participations in
mortgage pools. Although GNMA guarantees the timely payment of principal and
interest, the market value and yield of these instruments can vary due to
interest rate fluctuations and prepayments of underlying mortgages. In addition,
any premiums paid to purchase these instruments are not subject to GNMA
guarantees. Moreover, although GNMA certificates may offer higher yields than
those available from other types of U.S. Government securities, they may not be
as effective in "locking in" attractive long-interest rates because of
prepayments of the mortgage pools when interest rates decline. Due to this
prepayment feature, GNMA certificates tend not to increase in value as much as
most other debt securities when interest rates decline.

MORTGAGE-BACKED SECURITIES--Securities representing an interest in a pool of
mortgage loans that are issued or guaranteed by a U.S. Government agency. The
primary issuers or guarantors of these mortgage-backed securities are GNMA, FNMA
and the Federal Home Loan Mortgage Corporation. Mortgage-backed securities are
also issued by non-governmental entities which consist of collateralized
mortgage obligations ("CMOs") and real estate mortgage investment conduits
("REMICs") that are rated by S&P or Moody's. The mortgages backing these
securities include conventional thirty-year fixed rate mortgages, graduated
payment mortgages and adjustable rate mortgages.

Mortgage-backed securities are in most cases "pass-through" instruments, through
which the holder receives a share of all interest and principal payments from
the mortgages underlying the certificate.

CMOs are debt obligation or multiclass pass-through certificates issued by
agencies or instrumentalities of the U.S. Government or by private originators
or investors in mortgage loans. In a CMO, series of bonds or certificates are
usually issued in multiple classes. Principal and interest paid on the
underlying mortgage assets may be allocated among the several classes of a
series of a CMO in a variety of ways. Each class of a CMO, often referred to as
a "tranche," is issued with a specific fixed or floating coupon rate and has a
stated maturity or final distribution date. Principal payments on the underlying
mortgage assets may cause CMOs to be retired substantially earlier than their
stated maturities or final distribution dates, resulting in a loss of all or
part of any premium paid.

A REMIC is a CMO that qualifies for special tax treatment under the Internal
Revenue Code and invests in certain mortgages principally secured by interests
in real property. Investors may purchase beneficial interests in REMICs, which
are known as "regular" interests, or "residual" interests. Guaranteed REMIC
pass-through certificates ("REMIC Certificates") issued by FNMA or FHLMC
represent beneficial ownership interests in a REMIC trust consisting principally
of mortgage loans or FNMA, FHLMC or GNMA-guaranteed mortgage pass-through
certificates. For FHLMC REMIC Certificates, FHLMC guarantees the timely payment
of interest, and also guarantees the payment of principal as payments are
required to be made on the underlying mortgage participation certificates. FNMA
REMIC Certificates are issued and guaranteed as to timely distribution of
principal and interest by FNMA.

Because the prepayment characteristics of the underlying mortgages vary, it is
not possible to predict accurately the average life or realized yield of a
particular issue of pass-through certificates. In the
<PAGE>
20

absence of a known maturity, market participants generally refer to an estimated
average life as the most appropriate measure of the maturity of a
mortgage-backed security. An average life estimate is a function of an
assumption regarding anticipated prepayment patterns. The assumption is based
upon current interest rates, current conditions in the relevant housing markets
and other factors. The assumption is necessarily subjective, and thus different
market participants could produce somewhat different average life estimates with
regard to the same security. There can be no assurance that the estimated
average life will be the actual average life.

MUNICIPAL SECURITIES--Municipal Securities are generally issued to finance
public works, such as airports, bridges, highways, housing, hospitals, mass
transportation projects, schools, streets, and water and sewer works. They are
also issued to repay outstanding obligations, to raise funds for general
operating expenses, and to make loans to other public institutions and
facilities.

Municipal Securities include industrial development bonds issued by or on behalf
of public authorities to provide financing aid to acquire sites or construct and
equip facilities for privately or publicly owned corporations. The availability
of this financing encourages these corporations to locate within the sponsoring
communities and thereby increases local employment.

The two principal classifications of Municipal Securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.

Certain Municipal Securities are municipal lease revenue obligations (or
certificates of participation ("COPs")), which typically provide that the
municipality has no obligation to make lease or installment payments in future
years unless such amounts are appropriated for such purpose. While the risk of
appropriation is inherent to COP financing, this risk is mitigated by the Fund's
policy, to invest in COPs that are rated in one of the four highest rating
categories used by Moody's, S&P or Fitch, or of equivalent quality, as
determined by the Adviser, under guidelines adopted by the Board of Trustees.

PARTICIPATION INTERESTS--Participation interests are interests in loans from
financial institutions such as commercial and investment banks, savings and loan
associations and insurance companies. These interests may take the form of
participations, beneficial interests in a trust, partnership interests or any
other form of indirect ownership.

RECEIPTS--Separately traded interest and principal component parts of U.S.
Treasury obligations that are issued by banks or brokerage firms and are created
by depositing U.S. Treasury obligations into a special account at a custodian
bank. The custodian holds the interest and principal payments for the benefit of
the registered owners of the receipts. The custodian arranges for the issuance
of the receipts evidencing ownership and maintains the register. Receipts
include "Treasury Receipts" ("TRs"), "Treasury Investment Growth Receipts"
("TIGRs"), "Liquid Yield Option Notes" ("LYONs"), and "Certificates of Accrual
on Treasury Securities" ("CATS"). TIGRs, LYONs and CATS are interests in private
proprietary accounts while TRs are interests in accounts sponsored by the U.S.
Treasury. Securities denominated as TRs, TIGRs, LYONs and CATS are sold as zero
coupon securities which means that they are sold at a substantial discount and
redeemed at face value at their maturity date without interim cash payments of
interest or principal.

<PAGE>
21

collateral securities or if the Trust realizes a loss on the sale of the
collateral. The Adviser will enter into repurchase agreements on behalf of the
Trust only with financial institutions deemed to present minimal risk of
bankruptcy during the term of the agreement based on guidelines established and
periodically reviewed by the Trustees. Repurchase agreements are considered
loans under the 1940 Act.

RESTRICTED AND ILLIQUID SECURITIES--Restricted securities are securities that
may not be sold freely to the public absent registration under the Securities
Act of 1933, as amended or an exemption from registration.

Section 4(2) commercial paper is issued in reliance on an exemption from
registration under Section 4(2) of the Act and is generally sold to
institutional investors who purchase for investment. Any resale of such
commercial paper must be in an exempt transaction, usually to an institutional
investor through the issuer or investment dealers who make a market on such
commercial paper.

Rule 144A Securities are securities that have not been registered under the
Securities Act of 1933 but which may be traded between certain qualified
institutional investors, including investment companies. The absence of a
secondary market may affect the value of Rule 144A Securities.

Illiquid securities are securities which cannot be disposed of in 7 days or less
at approximately their carrying value (which is the value given the security by
the Fund on its books). Each of the Funds may invest up to 15% of its net assets
in illiquid securities.

SECURITIES LENDING--A Fund may lend the securities in which it is invested, in
order to generate additional income, pursuant to agreements requiring that the
loan be continuously secured by cash, securities of the U.S. Government or its
agencies or any combination of cash and such securities as collateral equal to
102% of the market value at all times of the securities lent. The Fund will
continue to receive interest on the securities lent while simultaneously earning
interest on the investment of cash collateral in U.S. Government securities.
Collateral is marked to market daily to provide a level of collateral at least
equal to the value of the securities lent. There may be risks of delay in
receiving additional collateral or risks of delay in recovery of the securities
or even loss of rights in the collateral should the borrower of the securities
fail financially.

SECURITIES OF FOREIGN ISSUERS--Investment in securities of foreign issuers, may
subject the Trust to different risks than those attendant to investments in
securities of U.S. issuers. These risks include differences in accounting,
auditing and financial reporting standards, the possibility of expropriation or
confiscatory taxation, and political instability. There may also be less
publicly available information with regard to foreign issuers than domestic
issuers. Foreign markets may be characterized by less liquidity, greater price
volatility, less regulation and higher transaction costs than U.S. markets.

U.S. GOVERNMENT AGENCY OBLIGATIONS--Certain Federal agencies such as the
Government National Mortgage Association ("GNMA") have been established as
instrumentalities of the United States Government to supervise and finance
certain types of activities. Issues of these agencies, while not direct
obligations of the United States Government, are either backed by the full faith
and credit of the United States (e.g., GNMA) or supported by the issuing
agencies' right to borrow from the Treasury. The issues of other agencies are
supported by the credit of the instrumentality (e.g., Federal National Mortgage
Association).

U.S. TREASURY OBLIGATIONS--Bills, notes and bonds issued by the U.S. Treasury,
and separately traded interest and principal component parts of such obligations
that are transferable through the Federal book-entry system known as Separately
Traded Registered Interest and Principal Securities ("STRIPS").

WHEN-ISSUED SECURITIES--Securities purchased on a when-issued basis are subject
to settlement within 45 days of the purchase date. The price and yield on these
securities is fixed as of the purchase date and no interest accrues to the Fund
before settlement. These securities are therefore subject to market fluctuation
due to changes in market interest rates, and, although the purchase of
securities on a when-issued basis is not considered leveraging, it has the
effect of leveraging the Fund's assets. A
<PAGE>
22

Fund will maintain with the Custodian a separate account with liquid high grade
securities or cash in an amount at least equal to these commitments.

ZERO-COUPON SECURITIES--STRIPS and Receipts (TRs, TIGRs, LYONs and CATS) are
sold as zero coupon securities, that is, fixed income securities that have been
stripped of their unmatured interest coupons. Zero coupon securities are sold at
a (usually substantial) discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. The amount of this
discount is accreted over the life of the security, and the accretion
constitutes the income earned on the security for both accounting and tax
purposes. Because of these features, the market prices of zero coupon securities
are generally more volatile than the market prices of securities that have
similar maturity but that pay interest periodically. Zero coupon securities are
likely to respond to a greater degree to interest rate changes than are non-zero
coupon securities with similar maturity and credit qualities.
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
Summary....................................... 2
Expense Summary............................... 3
The Trust..................................... 6
Investment Objectives and Policies............ 6
General Investment Policies................... 7
Risk Factors.................................. 8
Investment Limitations........................ 8
Fundamental Policies.......................... 8
The Adviser................................... 8
The Administrator............................. 9
The Transfer Agent............................ 9

The Distributor............................... 9
How to Purchase Shares........................ 9
Sales Charges................................. 11
Exchange of Shares............................ 12
Redemption of Shares.......................... 13
Performance................................... 14
Taxes......................................... 15
General Information........................... 16
Description of Permitted Investments and Risk
Factors..................................... 18
</TABLE>

<PAGE>
PROSPECTUS

BISHOP STREET FUNDS
INVESTMENT ADVISER:
FIRST HAWAIIAN BANK

BISHOP STREET FUNDS (the "Trust") is a mutual fund that seeks to provide a
convenient means of investing in one or more professionally managed portfolios
of securities. This Prospectus relates to the following Fund:

BISHOP STREET MONEY MARKET FUND

The Fund is composed of Retail Class B and Institutional Class A shares. Retail
Class B shares are sold with distribution fees. Institutional Class A shares are
sold without distribution fees. First Hawaiian Bank, the Fund's investment
adviser, is an affiliate of First Hawaiian, Inc.

INSTITUTIONAL CLASS A SHARES ARE OFFERED PRIMARILY TO AGENCY, FIDUCIARY,
CUSTODIAL AND ADVISORY CLIENTS OF FIRST HAWAIIAN BANK. RETAIL CLASS B SHARES ARE
OFFERED PRIMARILY TO INDIVIDUALS AND TO CASH SWEEP CUSTOMERS OF FIRST HAWAIIAN
BANK.

AS WITH ANY MUTUAL FUND, AN INVESTMENT IN THE BISHOP STREET MONEY MARKET FUND IS
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE
THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE.

This Prospectus sets forth concisely the basic information about the Fund and
the Trust that a prospective investor should know before investing. Investors
are advised to read this Prospectus and retain it for future reference. A
Statement of Additional Information dated April 29, 1996 has been filed with the
Securities and Exchange Commission and is available without charge by calling
1-800-262-9565. The Statement of Additional Information is incorporated into
this Prospectus by reference.

APRIL 29, 1996

<PAGE>
2

SUMMARY

WHAT ARE THE INVESTMENT OBJECTIVE AND POLICIES OF THE FUND? The Fund seeks to
preserve principal value and maintain a high degree of liquidity while providing
current income by investing in U.S. dollar-denominated, high quality short-term
debt securities. See "Investment Objectives and Policies" and "Description of
Permitted Investments and Risk Factors."

WHAT ARE THE RISKS INVOLVED WITH AN INVESTMENT IN THE FUND? The Fund seeks to
maintain a net asset value of $1.00 per share, but there can be no assurance
that the Fund will be able to do so on a continuous basis. There are other risks
involved in the ownership of money market mutual funds. See "Description of
Permitted Investments and Risk Factors."

WHO IS THE ADVISER? First Hawaiian Bank serves as the Adviser of the Fund.
Wellington Management Company serves as the Sub-Adviser of the Fund. See
"Expense Summary" and "The Adviser" and "The Sub-Adviser."

WHO IS THE ADMINISTRATOR? SEI Financial Management Corporation serves as the
Administrator and shareholder servicing agent of the Trust. See "Expense
Summary" and "The Administrator."

WHO IS THE TRANSFER AGENT? DST Systems, Inc. serves as transfer agent and
dividend disbursing agent for the Trust. See "The Transfer Agent."

WHO IS THE DISTRIBUTOR? SEI Financial Services Company serves as distributor of
the Trust's shares. See "The Distributor."

HOW DO I PURCHASE, EXCHANGE OR REDEEM SHARES? Purchases, exchanges or
redemptions of shares may be made on any day on which both the New York Stock
Exchange and Federal Reserve wire system are open for business ("Business Days")
except for Hawaii state banking holidays. A purchase, exchange or redemption
order will be executed at a per share price equal to the net asset value per
share next determined after the receipt of the purchase, exchange or redemption
order. Orders must be placed prior to 1:00 p.m., New York Time, on any Business
Day for the order to be effective that day. The minimum initial investment is
$1,000 ($500 for IRAs and $500 for officers, directors, or employees of First
Hawaiian Bank and its affiliates). Subsequent purchases of shares must be at
least $100. Net asset value is determined as of 1:00 p.m., New York Time, on
each Business Day. See "Purchase of Shares," "Exchange of Shares," and
"Redemption of Shares."

HOW ARE DIVIDENDS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Fund is distributed in the form of monthly
dividends. Any capital gain is distributed at least annually. Distributions are
paid in additional shares unless the Shareholder elects to take the payment in
cash. See "Dividends."
<PAGE>
3

EXPENSE SUMMARY

<TABLE>
<CAPTION>
RETAIL CLASS B
SHAREHOLDER TRANSACTION EXPENSES SHARES
<S> <C>
- ---------------------------------------------------------------------------------------------------------------
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)................... None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)........ None
Maximum Contingent Deferred Sales Charge...................................................... None
Exchange Fee.................................................................................. None
Wire Redemption Fee........................................................................... $15

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
- ---------------------------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1).......................................................... .28%
Rule 12b-1 Fees............................................................................... .10%
Other Expenses................................................................................ .22%
- ---------------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(2)............................................... .60%
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

(1) These numbers have been restated to reflect reductions in fee waiver and
expense reimbursement arrangements effective in the current fiscal year. The
Adviser has agreed to waive a portion of its fees. Absent such fee waivers,
advisory fees would be .30% for the Fund. The Adviser reserves the right to
terminate the waiver at any time in its sole discretion.

(2) These numbers have been restated to reflect reductions in fee waiver and
expense reimbursement arrangements effective in the current fiscal year.
Absent the Adviser's voluntary fee waivers, total operating expenses would
be .62% for the Fund.

<TABLE>
<CAPTION>
EXAMPLE
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -----------------------------------------------------------------------------------------------------------------------
An investor in the Retail Class B shares of the Fund would pay the
following expenses on a $1,000 investment assuming (1) 5% annual
return and (2) redemption at the end of each time period......... $ 6 $ 19 $ 33 $ 75
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose
of the expense table and example is to assist the investor in understanding the
various costs and expenses that may be directly or indirectly borne by investors
in the Retail Class B shares of the Fund. A person who purchases shares through
a financial institution may be charged separate fees by that institution. See
"Purchase of Shares."

<PAGE>
4

<TABLE>
<CAPTION>
INSTITUTIONAL CLASS A
SHAREHOLDER TRANSACTION EXPENSES SHARES
<S> <C>
- ---------------------------------------------------------------------------------------------------------------
Exchange Fee........................................................................... None
Wire Redemption Fee.................................................................... None

ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
- ---------------------------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1)................................................... .28%
Other Expenses......................................................................... .22%
- ---------------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(2)........................................ .50%
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -----------------------------------------------------------------------------------------------------------------------
An investor in the Institutional Class A shares of the Fund would
pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time
period........................................................... $ 5 $ 16 $ 28 $ 63
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose
of the expense table and example is to assist the investor in understanding the
various costs and expenses that may be directly or indirectly borne by investors
in the Institutional Class A shares of the Fund. A person who purchases
Institutional Class A shares through a First Hawaiian Bank agency, fiduciary,
custodial or advisory account will pay a separate fee for those services. See
"Purchase of Shares."

<PAGE>
5

FINANCIAL HIGHLIGHTS

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES
----------------------------
NET REALIZED
AND DISTRIBUTIONS
NET ASSET UNREALIZED --------------------------
VALUE, NET GAIN (LOSS) NET NET ASSET
BEGINNING OF INVESTMENT ON INVESTMENT VALUE, END
PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS OF PERIOD
------------- ------------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND

<CAPTION>
INSTITUTIONAL CLASS A
<S> <C> <C> <C> <C> <C> <C>
For the period ended December 31,
1995(1): 1.00 0.051 -- (0.051) -- 1.00
<CAPTION>

RETAIL CLASS B
<S> <C> <C> <C> <C> <C> <C>
For the period ended December 31,
1995(2): 1.00 0.047 -- (0.047) -- 1.00

<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME TO
AVERAGE NET AVERAGE NET
NET ASSETS RATIO OF NET ASSETS
ASSETS, RATIO OF EXCLUDING FEE INVESTMENT EXCLUDING FEE
END OF EXPENSES TO WAIVERS AND INCOME TO WAIVERS AND
PERIOD AVERAGE NET REIM- AVERAGE NET REIM-
TOTAL RETURN (000) ASSETS BURSEMENTS ASSETS BURSEMENTS
------------ ---------- ------------- --------------- ------------- ---------------
<S> <C>
MONEY MARKET FUND
INSTITUTIONAL CLASS A
<S> <C>
For the period ended December 31,
1995(1): 5.67%* $ 305,120 0.50%* 0.66%* 5.50%* 5.34%*
RETAIL CLASS B
<S> <C>
For the period ended December 31,
1995(2): 5.55%* $3,658 0.60 %* 0.76 %* 5.26 %* 5.10 %*

PORTFOLIO
TURNOVER RATE
-------------
MONEY MARKET FUND
INSTITUTIONAL CLASS A
For the period ended December 31,
1995(1): --
RETAIL CLASS B
For the period ended December 31,
1995(2): --
</TABLE>

Amounts Designated as "--" are either $0 or have been rounded to $0.

* Annualized

(1) Commenced operations on January 30, 1995.

(2) Commenced operations on February 17, 1995.

<PAGE>
6

THE TRUST

BISHOP STREET FUNDS (the "Trust") is an open-end management investment company
that offers units of beneficial interest ("shares") in the Fund through separate
Classes (Retail Class B and Institutional Class A), which provide for variations
in sales charges, distribution costs, voting rights and dividends. Except for
these differences, each share of each Fund represents an undivided,
proportionate interest in the Fund. This Prospectus offers shares of the Trust's
Money Market Fund. Information regarding the Trust's High Grade Income Fund,
Hawaii Municipal Bond Fund, Equity Fund and Treasury Money Market Fund is
contained in separate prospectuses that may be obtained by calling
1-800-262-9565.

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Money Market Fund is to preserve principal and
maintain a high degree of liquidity while providing current income. There can be
no assurance that the investment objective of the Fund will be met.

The Fund intends to comply with regulations of the Securities and Exchange
Commission ("SEC") applicable to money market funds. These regulations impose
certain quality, maturity and diversification restraints on investments by the
Fund. The Fund intends to use its best efforts to maintain a constant net asset
value of $1.00 per share, but there can be no assurance that the Fund will be
able to do so on a continuing basis.

The Fund invests in the following U.S. dollar-denominated, high quality debt
obligations with remaining maturities of 397 days or less: (i) commercial paper
rated in the highest short-term ratings categories of a nationally recognized
statistical rating organization ("NRSRO"), or, if not rated, determined by the
Sub-Adviser to be of comparable quality; (ii) obligations (certificates of
deposit, time deposits, notes and bankers' acceptances) of U.S. savings and loan
and thrift institutions and U.S. commercial banks, provided that such
institutions (or, in the case of a branch, the parent institution) have total
assets of $500 million or more as shown on their last published financial
statements at the time of investment; (iii) short-term corporate obligations
with a remaining term of not more than one year of issuers with commercial paper
of comparable priority and security meeting the above ratings; (iv) U.S.
Treasury obligations and obligations issued or guaranteed as to principal and
interest by the agencies or instrumentalities of the U.S. Government, including
STRIPS; (v) short-term obligations issued by state and local governmental
issuers, which are rated, at the time of investment by at least two NRSROs in
one of the two highest municipal bond rating categories, or, if not rated,
determined to be of comparable quality by the Sub-Adviser; (vi) receipts; and
(vii) repurchase agreements involving any of the foregoing obligations.

The Fund may invest in floating or variable rate obligations, and may purchase
securities on a "when-issued" basis.

INVESTMENT LIMITATIONS

The Fund may not:

1. Purchase securities of any issuer (except securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities, and repurchase
agreements involving such securities) if, as a result more than 5% of total
assets of the Fund would be invested in the securities of such issuer.

2. Purchase any securities which would cause more than 25% of the total assets
of the Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to investments in (a) domestic banks and (b)
obligations issued or guaranteed by the U.S. Government or its agencies and
instrumentalities, and repurchase agreements involving such securities.

The foregoing percentage limitations will apply at the time of the purchase of a
security. Additional investment limitations are set forth in the Statement of
Additional Information.
<PAGE>
7

FUNDAMENTAL POLICIES

The Fund's investment objective and the foregoing investment limitations are
fundamental policies. Fundamental policies cannot be changed with respect to the
Fund without the consent of the holders of a majority of the Fund's outstanding
shares.

THE ADVISER

First Hawaiian Bank (the "Adviser") acts as the investment adviser for the Fund.
The Adviser makes investment decisions for the assets of the Fund, and
continuously reviews, supervises and administers the Fund's investment program.
The Adviser discharges its responsibilities subject to the supervision of, and
policies set by, the Trustees of the Trust.

The Adviser is a wholly-owned subsidiary of First Hawaiian, Inc. Prior to
January, 1995, the Adviser had not previously served as an investment adviser to
a mutual fund. The Adviser and its corporate predecessors have provided trust
and asset management services in Hawaii for over 70 years. As of December 31,
1995 the Trust and Investment divisions of the Adviser had assets under
management of approximately $7.2 billion for trust and agency clients.

The Adviser is entitled to a fee, which is calculated daily and paid monthly, at
an annual rate of .30% of the Money Market Fund's average daily net assets. The
Adviser may from time to time waive all or a portion of its fee in order to
limit the operating expenses of a Fund. Any such waiver is voluntary and may be
terminated at any time in the Adviser's sole discretion.

For the fiscal year ended December 31, 1995, the Money Market Fund paid advisory
fees of .14% of its average daily net assets.

THE SUB-ADVISER

Wellington Management Company (the "Sub-Adviser") serves as the investment
sub-adviser for the Fund pursuant to a sub-advisory agreement (the "Sub-Advisory
Agreement") with the Trust and the Adviser. Under the Sub-Advisory Agreement,
the Sub-Adviser manages the investments of the Fund, selects investments, and
places all orders for purchases and sales of the Fund's securities, subject to
the general supervision of the Trustees of the Trust and the Adviser.

For the services provided and expenses incurred pursuant to the Sub-Advisory
Agreement, the Sub-Adviser is entitled to receive from the Adviser a fee,
computed daily and paid monthly, at the annual rate of .075% of the average
daily net assets of the Fund up to $500 million and .020% of the average daily
net assets of the Fund in excess of $500 million. For the fiscal year ended
December 31, 1995, the Adviser paid sub-advisory fees of .08% of its average
daily net assets.

The Sub-Adviser is a professional investment counseling firm which provides
investment services to investment companies, employee benefit plans, endowments,
foundations, and other institutions and individuals. As of December 31, 1995
Wellington had investment management authority with respect to approximately
$109.2 billion of assets. The Sub-Adviser and its predecessor organizations have
provided investment advisory services to investment companies since 1933 and to
investment counseling clients since 1960. Wellington Management Company, 75
State Street, Boston, MA 02109, is a Massachusetts general partnership, of which
the following persons are managing partners: Robert W. Doran, Duncan M.
McFarland and John R. Ryan.

THE ADMINISTRATOR

The Administrator is entitled to a fee, calculated daily and paid monthly, at an
annual rate of .20% of the average daily net assets of the Fund. For the fiscal
year ended December 31, 1995, the Fund paid administration fees of .20% of the
Fund's average daily net assets.

<PAGE>
8

THE TRANSFER AGENT

DST Systems, Inc. (the "Transfer Agent"), 210 West 10th Street, Kansas City,
Missouri 64105 serves as the Transfer Agent and dividend disbursing agent for
the Trust.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI, serves as distributor. The Retail Class B shares of the Trust have a Rule
12b-1 Distribution Plan (the "Retail Class B Plan"), under which such shares of
the Fund bear distribution expenses and related service fees at the annual rate
of up to .10% of their average daily net assets. Financial institutions that are
the record owner of shares for the account of their customers may impose
separate fees for account services to their customers.

The Fund may execute repurchase agreements through the Distributor, for which
the Distributor receives compensation.

HOW TO PURCHASE SHARES

GENERAL INFORMATION

Shares of the Fund are available for sale in the State of Hawaii and Guam.

You may purchase shares of the Fund on any day on which both the New York Stock
Exchange and Federal Reserve wire system are open for business ("Business Days")
except for Hawaii state banking holidays. However, shares of the Fund cannot be
purchased by Federal Reserve wire on Federal holidays restricting wire
transfers. The minimum initial investment in the Fund is $1,000 ($500 for IRAs
and $500 for officers, directors, or employees of First Hawaiian Bank or its
affiliates). The Distributor may waive the minimum investment at its discretion.
Subsequent purchases of shares must be at least $100.

A purchase order for shares will be effective as of the Business Day received by
the Transfer Agent if the Transfer Agent receives the order and payment before
1:00 p.m., New York time. The purchase price (the "Offering Price") is the net
asset value next determined after the purchase order is effective. Purchases
will be made in full and fractional shares calculated to three decimal places.

The net asset value per share of the Fund is determined as of 1:00 p.m., New
York time on each Business Day by dividing the total market value of the Fund's
investments and other assets, less any liabilities, by the total outstanding
shares of the Fund. The Fund values its portfolio securities using the amortized
cost method of valuation, approximating market value. Pursuant to guidelines
adopted and monitored by the Trustees of the Trust, the Fund may use a pricing
service to provide market quotations or valuations. A pricing service may derive
such valuations through the use of a matrix system to value fixed income
securities which considers factors such as securities prices, yield features,
ratings, and developments related to a specific security. Although the
methodology and procedures for determining net asset value are identical for
both classes of the Fund, the net asset value per share of such classes may
differ because of the distribution expenses charged to Retail Class shares.

The Trust reserves the right to reject a purchase order for shares when the
Distributor determines that it is not in the best interest of the Trust and/or
its Shareholders to accept such order.

Shareholders who own their shares of record and who desire to transfer
registration of their shares should contact the Transfer Agent at 1-800-262-9565
for further instructions.

HOW TO PURCHASE INSTITUTIONAL CLASS A SHARES

Institutional Class A shares may only be purchased by First Hawaiian Bank in its
capacity as Agent, Fiduciary, Custodian or Adviser.

HOW TO PURCHASE RETAIL CLASS B SHARES

Retail Class B shares of the Fund may be purchased directly from the Transfer
Agent by mail, by wire or
<PAGE>
9

through an automatic investment plan ("AIP"). Shares may also be purchased
through broker-dealers that have established a dealer agreement with the
Distributor.

HOW TO PURCHASE BY MAIL

You may purchase shares of the Fund by completing and signing an Account
Application form and mailing it, along with a check (or other negotiable bank
instrument or money order) payable to "Bishop Street Money Market Fund," to the
Transfer Agent at 210 West 10th Street, Kansas City, Missouri 64105. You may
purchase more shares at any time by mailing payment to the Transfer Agent at the
above address. Orders placed by mail will be executed on receipt of your
payment. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees incurred.

You may obtain Account Application Forms by calling the Distributor at
1-800-262-9565.

HOW TO PURCHASE BY WIRE

You may purchase shares by wiring Federal funds, provided that your Account
Application has been previously received. You must wire funds to the Transfer
Agent and the wire instructions must include your account number. You must call
the Transfer Agent at 1-800-262-9565 before wiring any funds. An order to
purchase shares by Federal funds wire will be deemed to have been received by
the Fund on the Business Day of the wire; provided that the shareholder wires
funds to the Transfer Agent prior to 1:00 p.m., New York time. If the Transfer
Agent does not receive the wire by 1:00 p.m., New York time, the order will be
executed on the next Business Day.

HOW TO PURCHASE THROUGH AN AUTOMATIC INVESTMENT PLAN ("AIP")

You may arrange for periodic additional investments in the Fund through
automatic deductions by Automated Clearing House ("ACH") from a checking account
by completing an AIP Application Form. The minimum pre-authorized investment
amount is $50 per month. An AIP Application Form may be obtained by contacting
the Distributor at 1-800-262-9565. The AIP is available only for additional
investments to an existing account.

HOW TO PURCHASE THROUGH FINANCIAL INSTITUTIONS

Customers who desire to transfer the registration of shares beneficially owned
by them but held of record by a financial institution should contact the
institution to accomplish such change.

EXCHANGE OF SHARES

You may exchange Retail Class B or Institutional Class A shares of the Money
Market Fund for Retail Class B or Institutional Class A shares, respectively, of
the High Grade Income, Hawaii Municipal Bond or Equity Funds of the Trust at net
asset value plus any applicable sales charge. Exchanges of Retail Class B or
Institutional Class A shares of any other Fund of the Trust for Retail Class B
shares or Institutional Class A shares of the Money Market Fund will be made at
net asset value.

Exchanges will be made only after instructions in writing or by telephone (an
"Exchange Request") are received by the Transfer Agent. In order to effect an
<PAGE>
10

exchange of shares by telephone, you must elect the telephone exchange option on
your Account Application Form. If an Exchange Request in good order is received
by the Transfer Agent on any Business Day, the exchange will occur on that day.
The exchange privilege may be exercised only in those states where the class of
shares of the "new" Fund may legally be sold.

The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' notice.

REDEMPTION OF SHARES

BY MAIL

A written request for redemption must be received by the Transfer Agent, 210
West 10th Street, Kansas City, Missouri 64105 in order to constitute a valid
redemption request.

BY TELEPHONE

SYSTEMATIC WITHDRAWAL PLAN ("SWP")

The Fund offers a Systematic Withdrawal Plan ("SWP"), which you may use to
receive regular distributions from your account. Upon
<PAGE>
11

commencement of the SWP, your account must have a current value of $20,000 or
more. You may elect to receive automatic payments via check or ACH of $50 or
more on a monthly, quarterly, semi-annual or annual basis. You may obtain an SWP
Application Form by contacting the Distributor at 1-800-262-9565.

OTHER INFORMATION REGARDING REDEMPTIONS

All redemption orders are effected at the net asset value per share next
determined after receipt of a valid request for redemption. Net asset value per
share is determined as of 1:00 p.m., New York time, on each Business Day.

Payment to shareholders for shares redeemed will be made within seven days after
the Transfer Agent receives the valid redemption request. At various times,
however, the Fund may be requested to redeem shares for which it has not yet
received good payment; collection of payment may take ten or more days. In such
circumstances, the redemption request will be rejected by the Fund. Once the
Fund has received good payment for the shares a shareholder may submit another
request for redemption.

Due to the relatively high costs of handling small investments, the Fund
reserves the right to redeem your shares at net asset value, if, your account in
any Fund has a value of less than the minimum initial purchase amount.
Accordingly, if you purchase shares of the Fund in only the minimum investment
amount, you may be subject to involuntary redemption if you redeem any shares.
Before the Fund exercises its right to redeem such shares, you will be given
notice that the value of the shares in your account is less than the minimum
amount and will be allowed 60 days to make an additional investment in the Fund
in an amount which will increase the value of the account to at least the
minimum amount.

PERFORMANCE

From time to time, the Fund may advertise its current yield and effective yield.
These figures are based on historical earnings and are not intended to indicate
future performance. No representation can be made concerning actual future
yields or returns.

The "current yield" of the Fund refers to the income generated by an investment
in the Fund over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" (also called "effective compound yield") is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The effective yield will be slightly higher than
the current yield because of the compounding effect of this assumed
reinvestment.

For the Fund, the performance of Institutional Class A shares will be higher
than that of Retail Class B shares because of the distribution expenses charged
to Retail Class B shares.

The Fund may periodically compare its performance to that of other mutual funds
tracked by mutual funds rating services (such as Lipper Analytical), financial
and business publications and periodicals, broad groups of comparable mutual
funds or unmanaged indices which may assume investment of dividends but
generally do not reflect deductions for administrative and management costs. The
Fund may quote Morningstar, Inc., a service that ranks mutual funds on the basis
of risk-adjusted performance. The Fund may use long-term performance of these
capital market indices to demonstrate general long-term risk versus reward
scenarios and could include the value
<PAGE>
12

of a hypothetical investment in any of the capital markets. The Fund may also
quote financial and business publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques.

The Fund may quote various measures of volatility and benchmark correlation in
advertising and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.

TAXES

The following summary of income tax consequences is based on current tax laws
and regulations, which may be changed by legislative, judicial or administrative
action. No attempt has been made to present a detailed explanation of the
Federal, state, or local income tax treatment of the Fund or its Shareholders.
In addition, state and local tax consequences of an investment in the Fund may
differ from the Federal income tax consequences described below. Accordingly,
Shareholders are urged to consult their tax advisers regarding specific
questions as to Federal, state and local income taxes. Additional information
concerning taxes is set forth in the Statement of Additional Information.

TAX STATUS OF THE FUND

The Fund is treated as a separate entity for Federal income tax purposes and is
not combined with the Trust's other portfolios. The Fund intends to continue to
qualify for the special tax treatment afforded regulated investment companies
("RICs") under Subchapter M of the Internal Revenue Code of 1986, as amended, so
as to be relieved of Federal income tax on net investment company taxable income
and net capital gains (the excess of net long-term capital gains over net
short-term capital losses) distributed to Shareholders.

TAX STATUS OF DISTRIBUTIONS

The Fund distributes substantially all of its net investment income (including
net short-term capital gains) and net capital gains to Shareholders. Dividends
from the Fund's net investment company taxable income are taxable to its
Shareholders as ordinary income (whether received in cash or in additional
shares) to the extent of the Fund's earnings and profits. Distributions of net
capital gains do not qualify for that deduction and are taxable to Shareholders
as long-term capital gains, regardless of how long Shareholders have held their
shares and regardless of whether the distributions are received in cash or in
additional shares. Dividends and distributions of capital gains paid by the Fund
do not qualify for the dividends received deduction for corporate shareholders.
The Fund will provide annual reports to Shareholders of the Federal income tax
status of all distributions.

Dividends declared by the Fund in October, November or December of any year and
payable to Shareholders of record on a date in such a month, will be deemed to
have been paid by the Fund and received by the Shareholders on December 31 of
the year declared if paid by the Fund at any time during the following January.

The Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for Federal excise tax applicable to regulated
investment companies.

With respect to investments which are sold at original issue discount and thus
do not make periodic cash interest payments, the Fund will be required to
include as part of its current income the imputed interest on such obligations
even though the Fund has not received any interest payments on such obligations
during that period. Because the Fund distributes all of its net investment
income to its Shareholders, the Fund may have to sell portfolio securities to
distribute such imputed income which may occur at a time when the Adviser would
not have chosen to sell such securities and which may result in a taxable gain
or loss.
<PAGE>
13

Sale, exchange or redemption of Fund Shares is a taxable transaction to the
Shareholder.

GENERAL INFORMATION
THE TRUST

The Trust was organized as a Massachusetts business trust under Declaration of
Trust dated May 25, 1994. The Declaration of Trust permits the Trust to offer
separate portfolios of shares and different classes of each portfolio. In
addition to the Fund, the Trust consists of the following portfolios: Bishop
Street High Grade Income, Hawaii Municipal Bond, Equity and Treasury Money
Market Funds. All consideration received by the Trust for shares of any Fund and
all assets of such Fund belong to that Fund and would be subject to the
liabilities related thereto.

TRUSTEES OF THE TRUST

The Trustees of the Trust are as follows:

<CAPTION>
NAME BUSINESS HISTORY
- ------------------------- ----------------------------
<S> <C>
Honorable Shunichi Kimura Regent--University of Hawaii
Judge--State of Hawaii
Judiciary (1974-1994)
Mayor--County of Hawaii
(1968-1994) Chairman & Chief
Executive of the County of
Hawaii (1964-1968)
Honorable William S. Trustee--Kamehameha Schools
Richardson Bishop Estate (through
1992); Chief
Justice--Supreme Court of
Hawaii, (through 1983)
Lieutenant Governor--State
of Hawaii (1962-1966)
Mr. Manuel R. Sylvester Managing and Executive
Partner--Coopers & Lybrand
(through 1992)
Dr. Joyce S. Tsunoda Senior Vice-President and
Chancellor for Community
College--University of
Hawaii
Mr. David G. Lee Senior Vice President--SEI
Financial Management
Corporation
</TABLE>

VOTING RIGHTS

Each share held entitles the Shareholder of record to one vote for each dollar
invested. In other words, each Shareholder of record is entitled to one vote for
each dollar of net asset value of the shares held on the record date for the
meeting. The Shareholders of each Fund will vote separately on matters
pertaining solely to that Fund. The Shareholders of each class of each Fund will
vote separately on matters pertaining to its distribution plan. As a
Massachusetts business trust, the Trust is not required to hold annual meetings
of Shareholders but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances.

the Trust will provide appropriate assistance and information to the
Shareholders requesting the meeting.

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders should direct inquiries to Bishop Street Funds at P.O. Box 419240,
Kansas City, MO 64141-6240 or by calling 1-800-262-9565.

DIVIDENDS

Substantially all of the net investment income (exclusive of capital gains) of
the Fund is declared daily and distributed in the form of monthly dividends.
Shareholders of record on the last Business Day of each month will be entitled
to receive the dividend. If any net capital gains are realized, they will be
distributed by the Fund at least annually.

Shareholders automatically receive all income dividends and capital gains
distributions in additional shares at the net asset value next determined
following the record date, unless the Shareholder has elected to take such
payment in the form of cash. Shareholders may change their election by providing
written notice to the Bishop Street Funds at P.O. Box 419240, Kansas City, MO
64141-6240 at least 15 days prior to the distribution. Shareholders may receive
payments for cash distributions in the form of a check, by Federal Reserve wire
transfer or ACH.

Dividends and distributions of the Fund are paid on a per-share basis. The value
of each share will be reduced by the amount of any such payment. If shares are
purchased shortly before the record date for a dividend or the distribution of
capital gains, a Shareholder will pay the full price for the shares and receive
some portion of the price back as a taxable dividend or distribution.

The dividends on Retail Class B Shares of the Fund will be lower than those on
Institutional Class A Shares because of the distribution expenses charged to
Retail Class B Shares.

The Trust believes that as of February 5, 1995, First Hawaiian Bank and its
affiliates owned of record or beneficially, substantially all of the shares of
the Money Market Fund. As a consequence, First Hawaiian Bank may be deemed to be
a "controlling person" of this Fund within the meaning of the Investment Company
Act of 1940, as amended.

COUNSEL AND INDEPENDENT ACCOUNTANTS

Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Coopers & Lybrand
L.L.P. serves as the independent accountant of the Trust.

CUSTODIAN

Chemical Bank, (the "Custodian"), acts as custodian of the Trust's assets. The
Custodian holds cash, securities and other assets of the Trust as required by
the 1940 Act.

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of the permitted investments for the Fund and the
various risk factors associated therewith:

COMMERCIAL PAPER--The term used to designate unsecured short-term promissory
notes issued by
<PAGE>
15

municipalities, corporations and other entities. Maturities on these issues
vary, generally from a few days to nine months.

REPURCHASE AGREEMENTS--Agreements by which a financial institution agrees to
sell a security to a Fund and commits to repurchase the security at an agreed
upon price (including principal and interest) on an agreed upon date within a
number of days from the date of purchase. The Fund will have actual or
constructive possession of the securities as collateral for the repurchase
agreement. The Trust bears a risk of loss in the event the other party defaults
on its obligations and the Trust is delayed or prevented from exercising its
right to dispose of the collateral securities or if the Trust realizes a loss on
the sale of the collateral. The Adviser will enter into repurchase agreements on
behalf of the Trust only with financial institutions deemed to present minimal
risk of bankruptcy during the term of the agreement based on guidelines
established and periodically reviewed by the Trustees. Repurchase agreements are
considered loans under the Investment Company Act of 1940, as amended.

Illiquid Securities are securities that may not be sold in 7 days or less at
approximately their carrying value (which is the value given the security by the
Fund on its books). The Fund may invest up to 10% of its net assets in illiquid
securities.

U.S. GOVERNMENT AGENCY OBLIGATIONS-- Certain Federal agencies such as the
Government
<PAGE>
16

National Mortgage Association ("GNMA") have been established as
instrumentalities of the United States Government to supervise and finance
certain types of activities. Issues of these agencies, while not direct
obligations of the United States Government, are either backed by the full faith
and credit of the United States (e.g., GNMA) or supported by the issuing
agencies' right to borrow from the Treasury. The issues of other agencies are
supported by the credit of the instrumentality (e.g., Federal National Mortgage
Association).

VARIABLE/FLOATING RATE INSTRUMENTS--Certain obligations may carry variable or
floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates which are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.

RESTRAINTS ON INVESTMENTS BY MONEY MARKET FUNDS--Investments by money market
funds are subject to limitations imposed under regulations adopted by the SEC.
These regulations generally require money market funds to acquire only U.S.
dollar obligations maturing in 397 days or less and to maintain a
dollar-weighted average portfolio maturity of 90 days or less. In addition, such
funds may acquire only obligations that present minimal credit risks and that
are "eligible securities" which means they are (i) rated, at the time of
investment, by at least two nationally recognized security rating organizations
(one if it is the only organization rating such obligation) in the highest
short-term rating category or, if unrated, determined to be of comparable
quality (a "first tier security"), or (ii) rated according to the foregoing
criteria in the second highest short-term rating category or, if unrated,
determined to be of comparable quality ("second tier security"). A security is
not considered to be unrated if its issuer has outstanding obligations of
comparable priority and security that have a short-term-rating. A taxable money
market fund may also hold more than 5% of its assets in first tier securities of
a single issuer for three "business days" (that is, any day other than a
Saturday, Sunday or customary business holiday).

ZERO-COUPON SECURITIES--STRIPS and Receipts (TRs, LYONs, TIGRs and CATS) are
sold as zero coupon securities, that is, fixed income securities that have been
stripped of their unmatured interest coupons. Zero coupon securities are sold at
a (usually substantial) discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. The amount of this
discount is accreted over the life of the security, and the accretion
constitutes the income earned on the security for both accounting and tax
purposes. Because of these features, the market prices of zero coupon securities
are generally more volatile than the market prices of securities that have
similar maturity but that pay interest periodically. Zero coupon
<PAGE>
17

securities are likely to respond to a greater degree to interest rate changes
than are non-zero coupon securities with similar maturity and credit qualities.
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
Summary....................................... 2
Expense Summary............................... 3
The Trust..................................... 6
Investment Objective and Policies............. 6
Investment Limitations........................ 6
Fundamental Policies.......................... 7
The Adviser................................... 7
The Sub-Adviser............................... 7
The Administrator............................. 7

The Transfer Agent............................ 8
The Distributor............................... 8
How to Purchase Shares........................ 8
Exchange of Shares............................ 9
Redemption of Shares.......................... 10
Performance................................... 11
Taxes......................................... 12
General Information........................... 13
Description of Permitted Investments and Risk
Factors..................................... 14
</TABLE>

<PAGE>

BISHOP STREET FUNDS

A FAMILY OF MUTUAL FUNDS

INVESTMENT ADVISER:
FIRST HAWAIIAN BANK

This Statement of Additional Information is not a prospectus. It is intended to
provide additional information regarding the activities and operations of the
Trust and should be read in conjunction with the Trust's prospectuses dated
February 17, 1996, and April 29, 1996. Prospectuses may be obtained through the
Distributor, SEI Financial Services Company, 680 E. Swedesford Road, Wayne,
Pennsylvania 19087-1658.

TABLE OF CONTENTS
PAGE

THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
DESCRIPTION OF PERMITTED INVESTMENTS . . . . . . . . . . . . . . . . . . . . S-2
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .S-10
THE ADVISER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-11
THE SUB-ADVISER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-12
THE ADMINISTRATOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-13
THE DISTRIBUTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-14
TRUSTEES AND OFFICERS OF THE TRUST . . . . . . . . . . . . . . . . . . . . .S-15
REPORTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-17
PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-17
PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . .S-20
DETERMINATION OF NET ASSET VALUE. . . . . . . . . . . . . . . . . . . . . .S-21
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-22
FUND TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-26
DESCRIPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . .S-27
LIMITATION OF TRUSTEES' LIABILITY . . . . . . . . . . . . . . . . . . . . .S-27
SHAREHOLDER LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . .S-28
5% SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-28
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-29
FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .S-29
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S-30

BSF-F-03-03

<PAGE>

THE TRUST

Bishop Street Funds (the "Trust") is an open-end management investment company
organized under Massachusetts law as a "Massachusetts business trust" under an
Agreement and Declaration of Trust dated May 25, 1994. The Agreement and
Declaration of Trust permits the Trust to offer separate series of units of
beneficial interest ("shares") and different classes of shares of each Fund.
Shareholders may purchase shares through two separate classes (Institutional
Class A and Retail Class B) which provide for variations in distribution costs
and dividends. Except for these differences between Institutional Class A and
Retail Class B shares, each share of each Fund represents an equal proportionate
interest in that Fund. See "Description of Shares." This Statement of
Additional Information relates to the Institutional Class A and Retail Class B
shares of the Trust's High Grade Income Fund, Hawaii Municipal Bond Fund, Equity
Fund, Money Market Fund and Treasury Money Market Fund (the "Funds").

DESCRIPTION OF PERMITTED INVESTMENTS

The following information supplements the information about permitted
investments set forth in the Prospectus for the relevant Fund.

VARIABLE AMOUNT MASTER DEMAND NOTES. Certain of the Funds may purchase VARIABLE
AMOUNT MASTER DEMAND NOTES which may or may not be backed by bank letters of
credit. These notes permit the investment of fluctuating amounts at varying
market rates of interest pursuant to direct arrangements between the Trust, as
lender, and the borrower. Such notes provide that the interest rate on the
amount outstanding varies on a daily, weekly or monthly basis depending upon a
stated short-term interest rate index. Both the lender and the borrower have
the right to reduce the amount of outstanding indebtedness at any time. There
is no secondary market for the notes. It is not generally contemplated that
such instruments will be traded.

GNMA SECURITIES. The High Grade Income Fund and Money Market Fund may invest in
SECURITIES ISSUED BY THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION ("GNMA"), a
wholly-owned U.S. Government corporation which guarantees the timely payment of
principal and interest. The market value and interest yield of these
instruments can vary due to market interest rate fluctuations and early
prepayments of underlying mortgages. These securities represent ownership in a
pool of federally insured mortgage loans. GNMA certificates consist of
underlying mortgages with a maximum maturity of 30 years. However, due to
scheduled and unscheduled principal payments, GNMA

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<PAGE>

certificates have a shorter average maturity and, therefore, less principal
volatility than a comparable 30-year bond. Since prepayment rates vary widely,
it is not possible to predict accurately the average maturity of a particular
GNMA pool. GNMA securities differ from conventional bonds in that principal is
paid back to the certificate holders over the life of the loan rather than at
maturity. The scheduled monthly interest and principal payments relating to
mortgages in the pool are "passed through" to investors. In addition, there may
be unscheduled principal payments representing prepayments on the underlying
mortgages. Although GNMA certificates may offer yields higher than those
available from other types of U.S. Government securities, GNMA certificates may
be less effective than other types of securities as a means of "locking in"
attractive long-term rates because of the prepayment feature. For instance,
when interest rates decline, the value of a GNMA certificate likely will not
rise as much as comparable debt securities due to the prepayment feature. In
addition, these prepayments can cause the price of a GNMA certificate originally
purchased at a premium to decline in price to its par value, which may result in
a loss.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The High Grade Income Fund may
invest in MORTGAGE-BACKED SECURITIES AND ASSET-BACKED SECURITIES. Two principal
types of mortgage-backed securities are collateralized mortgage obligations
("CMOs") and real estate mortgage investment conduits ("REMICS"). CMOs are
securities collateralized by mortgages, mortgage pass-through certificates,
mortgage pay-through bonds (bonds representing an interest in a pool of
mortgages where the cash flow generated from the mortgage collateral pool is
dedicated to bond repayment), and mortgage-backed bonds (general obligations of
issuers payable out of the issuers' general funds and additionally secured by a
first lien on a pool of single family properties).

Many CMOs are issued with a number of classes or series which have different
maturities and are retired in sequence. Investors purchasing CMOs in the
shortest maturities receive or are credited with their pro rata portion of the
scheduled payments of interest and principal on the underlying mortgages plus
all unscheduled prepayments of principal up to a predetermined portion of the
total CMO obligation. Until that portion of such CMO obligation is repaid,
investors in the longer maturities receive interest only. Accordingly, CMOs in
longer maturity series are less likely than other mortgage pass-throughs to be
prepaid prior to their stated maturity. Although some of the mortgages
underlying CMOs may be supported by various types of insurance, and while some
CMOs may be backed by GNMA certificates or other mortgage pass-throughs issued
or guaranteed by U.S. Government agencies or instrumentalities, CMOs themselves
are not generally guaranteed by the U.S. Government or any other entity.

S-3

<PAGE>

REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.

In addition to mortgage-backed securities, the High Grade Income Fund may invest
in ASSET-BACKED SECURITIES, which are securities that represent an interest in a
pool of non-mortgage assets, including company receivables, truck and auto
loans, leases, and credit card receivables. These issues may be traded over-
the-counter and typically have a short-to-intermediate maturity structure
depending on the paydown characteristics of the underlying financial assets.

REPURCHASE AGREEMENTS. REPURCHASE AGREEMENTS are agreements by which a person
(e.g., a Fund) obtains a security and simultaneously commits to return the
security to the seller (a financial institution deemed to present minimal risk
of bankruptcy during the term of the agreement based on guidelines established
and periodically reviewed by the Trustees) at an agreed upon price (including
principal and interest) on an agreed upon date within a number of days (usually
not more than seven) from the date of purchase. The resale price reflects the
purchase price plus an agreed upon market rate of interest which is unrelated to
the coupon rate or maturity date of the underlying security. A repurchase
agreement involves the obligation of the seller to pay the agreed upon price,
which obligation is in effect secured by the value of the underlying security.

Repurchase agreements are considered to be loans by the participating Fund for
purposes of its investment limitations. Repurchase agreements entered into by
the Funds will provide that the underlying security at all times shall have a
value at least equal to 102% of the resale price stated in the agreement. Under
all repurchase agreements entered into by the Funds, the Fund takes actual or
constructive possession of the underlying collateral. However, if the seller
defaults, the Fund could realize a loss on the sale of the underlying security
to the extent that the proceeds of sale including accrued interest are less than
the resale price provided in the agreement including interest. In addition,
even though the Bankruptcy Code provides protection for most repurchase
agreements, if the seller should be involved in bankruptcy or insolvency
proceedings, the Fund may incur delay and costs in selling the underlying
security or may suffer a loss of principal and interest if the Fund is treated
as an unsecured creditor and required to return the underlying security to the
seller's estate.

MUNICIPAL SECURITIES. MUNICIPAL NOTES in which the Hawaii Municipal Bond Fund
may invest include, but are not limited to, general obligation notes, tax

S-4

<PAGE>

anticipation notes (notes sold to finance working capital needs of the issuer in
anticipation of receiving taxes on a future date), revenue anticipation notes
(notes sold to provide needed cash prior to receipt of expected non-tax revenues
from a specific source), bond anticipation notes, certificates of indebtedness,
demand notes and construction loan notes. The Hawaii Municipal Bond Fund's
investments in any of the notes described above will be limited to those
obligations which are rated BBB or Baa or better at the time of investment by
Standard and Poor's Corporation ("S&P") or Moody's Investor Service, Inc.
("Moody's"), respectively or which, if not rated, are of equivalent quality in
the Adviser's judgment.

MUNICIPAL BONDS in which the Hawaii Municipal Bond Fund may invest must be rated
BBB or better by S&P or Baa or better by Moody's at the time of investment for
the Hawaii Municipal Bond Fund or, if unrated must be deemed by the Adviser to
have essentially the same characteristics and quality as bonds having the above
ratings. The Adviser may purchase private activity bonds. Private activity
bonds are issued by or on behalf of States or political subdivisions thereof to
finance privately owned or operated facilities for business and manufacturing,
housing, sports, and pollution control and to finance activities of and
facilities for charitable institutions. Private activity bonds are also used to
finance public facilities such as airports, mass transit systems, ports, parking
and low income housing. The payment of the principal and interest on private
activity bonds is dependent solely on the ability of the facility's user to meet
its financial obligations and may be secured by a pledge of real and personal
property so financed.

Municipal Securities which are payable only from the revenues derived from a
particular facility may be adversely affected by Hawaii laws or regulations
which make it more difficult for the particular facility to generate revenues
sufficient to pay such interest and principal, including, among others, laws and
regulations which limit the amount of fees, rates or other charges which may be
imposed for use of the facility or which increase competition among facilities
of that type or which limit or otherwise have the effect of reducing the use of
such facilities generally, thereby reducing the revenues generated by the
particular facility. Municipal Securities, the payment of interest and
principal on which is insured in whole or in part by a Hawaii governmentally
created fund, may be adversely affected by Hawaii laws or regulations which
restrict the aggregate proceeds available for payment of principal and interest
in the event of a default on such municipal securities. Similarly, Municipal
Securities, the payment of interest and principal on which is secured, in whole
or in part, by an interest in real property may be adversely affected by Hawaii
laws which limit the availability of remedies or the scope of remedies available
in the event of a default on such municipal

S-5

<PAGE>

securities. Because of the diverse nature of such laws and regulations and the
impossibility of either predicting in which specific Municipal Securities the
Fund will invest from time to time or predicting the nature or extent of future
changes in existing laws or regulations or the future enactment or adoption of
additional laws or regulations, it is not presently possible to determine the
impact of such laws and regulations on the securities in which the Fund may
invest and, therefore, on the shares of the Fund.

Other types of TAX-EXEMPT INSTRUMENTS which are permissible investments for the
Hawaii Municipal Bond Fund include floating rate notes. Investments in such
floating rate instruments will normally involve industrial development or
revenue bonds which provide that the rate of interest is set as a specific
percentage of a designated base rate (such as the prime rate) at a major
commercial bank, and that a Fund can demand payment of the obligation at all
times or at stipulated dates on short notice (not to exceed 30 days) at par plus
accrued interest. Such obligations are frequently secured by letters of credit
or other credit support arrangements provided by banks. The quality of the
underlying credit or of the bank, as the case may be, must, in the Adviser's
opinion be equivalent to the long-term bond or commercial paper ratings stated
above. The Adviser will monitor the earning power, cash flow and liquidity
ratios of the issuers of such instruments and the ability of an issuer of a
demand instrument to pay principal and interest on demand. The Adviser may
purchase other types of tax-exempt instruments as long as they are of a quality
equivalent to the bond or commercial paper ratings stated above.

The Adviser has the authority to purchase securities at a price which would
result in a yield to maturity lower than that generally offered by the seller at
the time of purchase when they can simultaneously acquire the right to sell the
securities back to the seller, the issuer, or a third party (the "writer") at an
agreed-upon price at any time during a stated period or on a certain date. Such
a right is generally denoted as a "standby commitment" or a "put." The purpose
of engaging in transactions involving puts is to maintain flexibility and
liquidity to permit the High Grade Income, Money Market and Hawaii Municipal
Bond Funds to meet redemptions and remain as fully invested as possible in
municipal securities. The right to put the securities depends on the writer's
ability to pay for the securities at the time the put is exercised. The Funds
will limit their put transactions to those with institutions which the Adviser
believes present minimum credit risks, and the Adviser will use its best efforts
to initially determine and thereafter monitor the financial strength of the put
providers by evaluating their financial statements and such other information as
is available in the marketplace. It may, however, be difficult to monitor the
financial strength of the writers where adequate current financial information
is not available. In the event

S-6

<PAGE>

that any writer is unable to honor a put for financial reasons, the affected
Fund would be a general creditor (i.e., on a parity with all other unsecured
creditors) of the writer. Furthermore, particular provisions of the contract
between a Fund and the writer may excuse the writer from repurchasing the
securities in certain circumstances (for example, a change in the published
rating of the underlying municipal securities or any similar event that has an
adverse effect on the issuer's credit); or a provision in the contract may
provide that the put will not be exercised except in certain special cases, for
example, to maintain portfolio liquidity. A Fund could, however, sell the
underlying portfolio security in the open market or wait until the portfolio
security matures, at which time it should realize the full par value of the
security.

Municipal Securities purchased subject to a put may be sold to third persons at
any time, even though the put is outstanding, but the put itself, unless it is
an integral part of the security as originally issued, may not be marketable or
otherwise assignable. Therefore, the put would have value only to the Fund.
Sale of the securities to third parties or lapse of time with the put
unexercised may terminate the right to put the securities. Prior to the
expiration of any put option, the Fund could seek to negotiate terms for the
extension of such an option. If such a renewal cannot be negotiated on terms
satisfactory to a Fund, such Fund could, of course, sell the portfolio security.
The maturity of the underlying security will generally be different from that of
the put. There will be no limit to the percentage of portfolio securities that
the Funds may purchase subject to a put. For the purpose of determining the
"maturity" of securities purchased subject to an option to put, and for the
purpose of determining the dollar-weighted average maturity of the Funds
including such securities, the Trust will consider "maturity" to be the first
date on which it has the right to demand payment from the writer of the put
although the final maturity of the security is later than such date.

SPECIAL CONSIDERATIONS RELATING TO HAWAII MUNICIPAL SECURITIES

The ability of issuers to pay interest on, and repay principal of, Hawaii
Municipal Securities may be affected by (1) the general financial condition of
the State of Hawaii, (2) amendments to the Hawaii Constitution and related
statutes that limit the taxing and spending authority of Hawaii government
entities, (3) voter initiatives, (4) civil actions and (5) a wide variety of
Hawaii laws and regulations.

FOREIGN SECURITIES. The High Grade Income and Equity Funds may invest in U.S.
DOLLAR DENOMINATED OBLIGATIONS OR SECURITIES OF FOREIGN ISSUERS. Permissible
investments may consist of obligations of foreign branches of U.S. banks and of
foreign banks, including European Certificates of Deposit, European

S-7

<PAGE>

Time Deposits, Canadian Time Deposits and Yankee Certificates of Deposits, and
investments in Canadian Commercial Paper, foreign securities and Europaper. In
addition, the Equity Fund may invest in American Depositary Receipts. These
instruments may subject the Fund to investment risks that differ in some
respects from those related to investments in obligations of U.S. domestic
issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income,
possible seizure, nationalization, or expropriation of foreign deposits, the
possible establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Such investments may also entail
higher custodial fees and sales commissions than domestic investments. Foreign
issuers of securities or obligations are often subject to accounting treatment
and engage in business practices different from those respecting domestic
issuers of similar securities or obligations. Foreign branches of U.S. banks
and foreign banks may be subject to less stringent reserve requirements than
those applicable to domestic branches of U.S. banks.

WHEN-ISSUED SECURITIES. The High Grade Income, Hawaii Municipal Bond, Money
Market and Treasury Money Market Funds may invest in WHEN-ISSUED SECURITIES.
These securities involve the purchase of debt obligations on a when-issued
basis, in which case delivery and payment normally take place within 45 days
after the date of commitment to purchase. The Funds will only make commitments
to purchase obligations on a when-issued basis with the intention of actually
acquiring the securities, but may sell them before the settlement date. The
when-issued securities are subject to market fluctuation, and no interest
accrues on the security to the purchaser during this period. The payment
obligation and the interest rate that will be received on the securities are
each fixed at the time the purchaser enters into the commitment. Purchasing
obligations on a when-issued basis is a form of leveraging and can involve a
risk that the yields available in the market when the delivery takes place may
actually be higher than those obtained in the transaction itself. In that case
there could be an unrealized loss at the time of delivery.

Segregated accounts will be established with the Custodian, and the Funds will
maintain liquid assets in an amount at least equal in value to the Funds'
commitments to purchase when-issued securities. If the value of these assets
declines, the Funds will place additional liquid assets in the account on a
daily basis so that the value of the assets in the account is equal to the
amount of such commitments.

S-8

<PAGE>

LENDING OF PORTFOLIO SECURITIES. Each of the Funds may LEND SECURITIES pursuant
to agreements requiring that the loans be continuously secured by cash,
securities of the U.S. government or its agencies, or any combination of cash
and such securities, as collateral equal to 100% of the market value at all
times of the securities lent. Such loans will not be made if, as a result, the
aggregate amount of all outstanding securities loans for a Fund exceed one-third
of the value of its total assets taken at fair market value. A Fund will
continue to receive interest on the securities lent while simultaneously earning
interest on the investment of the cash collateral in U.S. government securities.
However, a Fund will normally pay lending fees to broker-dealers and related
expenses from the interest earned on invested collateral. There may be risks of
delay in receiving additional collateral or risks of delay in recovery of the
securities or even loss of rights in the collateral should the borrower of the
securities fail financially. However, loans are made only to borrowers deemed
by the Adviser to be of good standing and when, in the judgment of the Adviser,
the consideration which can be earned currently from such securities loans
justifies the attendant risk. Any loan may be terminated by either party upon
reasonable notice to the other party.

OTHER INVESTMENTS

The Funds are not prohibited from investing in obligations of banks which are
clients of SEI Corporation ("SEI"). However, the purchase of shares of the
Trust by them or by their customers will not be a consideration in determining
which bank obligations the Funds will purchase. The Funds will not purchase
obligations of the Adviser or the Sub-Adviser.

The High Grade Income, Hawaii Municipal Bond Fund and Equity Funds may purchase
securities of other investment companies as permitted by the Investment Company
Act of 1940. Under these rules and regulations, a Fund is prohibited from
acquiring the securities of other investment companies if, as a result of such
acquisition, the Fund would own more than 3% of the total voting stock of the
company; securities issued by any one investment company represented more than
5% of the Fund's assets; or securities (other than treasury stock) issued by all
investment companies would represent more than 10% of the total assets of the
Fund. These investment companies typically incur fees that are separate from
those fees incurred directly by the Fund. A Fund's purchase of such investment
company securities results in the layering of expenses, such that Shareholders
would indirectly bear a proportionate share of the operating expenses of such
investment companies, including advisory fees.

S-9

<PAGE>

INVESTMENT LIMITATIONS

A Fund may not:

1. Acquire more than 10% of the voting securities of any one issuer, provided
that this limitation shall apply only as to 75% of the Fund's net assets
except that this restriction does not apply to the Hawaii Municipal Bond
Fund.

2. Invest in companies for the purpose of exercising control.

3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding one-third of the value of total assets. To the extent
that such borrowing exceeds 5% of the value of the borrowing Fund's assets,
asset coverage of at least 300% is required. No Fund will purchase
securities while its borrowings exceed 5% of its total assets.

4. Make loans, except that (a) each Fund may purchase or hold debt instruments
in accordance with its investment objective and policies; (b) each Fund may
enter into repurchase agreements, and (c) the Money Market, Treasury Money
Market, High Grade Income, Hawaii Municipal Bond and Equity Funds may
engage in securities lending.

5. Pledge, mortgage or hypothecate assets except to secure borrowings
permitted by (3) above in aggregate amounts not to exceed 33 1/3% of total
assets taken at current value at the time of the incurrence of such loan.

6. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts. However, each of the Funds (other
than the Money Market and Treasury Money Market Funds) may invest in
companies which invest in real estate, and in commodities contracts.

7. Make short sales of securities or purchase securities on margin, except
that each Fund may obtain short-term credits as necessary for the clearance
of security transactions.

8. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.

9. Purchase securities of other investment companies, except as permitted by
the Investment Company Act of 1940 and the rules and regulations
thereunder.

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<PAGE>

10. Issue senior securities (as defined in the Investment Company Act of 1940)
except in connection with permitted borrowings as described above or as
permitted by rule, regulation or order of the Securities and Exchange
Commission (the "SEC").

11. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.

NON-FUNDAMENTAL POLICIES

No Fund may invest in warrants, except that the Equity Fund may invest in
warrants in an amount not exceeding 5% of the Fund's net assets as valued at the
lower of cost or market value. Included in that amount, but not to exceed 2% of
the Fund's net assets, may be warrants not listed on the New York Stock Exchange
or American Stock Exchange.

The Money Market and Treasury Money Market Funds will comply with the
diversification requirements of Rule 2a-7 under the Investment Company Act of
1940.

The foregoing percentages will apply at the time of the purchase of a security.

THE ADVISER

The Trust and First Hawaiian Bank (the "Adviser") have entered into an advisory
agreement (the "Advisory Agreement") dated January 27, 1995. The Advisory
Agreement provides that the Adviser shall not be protected against any liability
to the Trust or its Shareholders by reason of willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or from reckless
disregard of its obligations or duties thereunder.

The Advisory Agreement provides that if, for any fiscal year, the ratio of
expenses of any Fund (including amounts payable to the Adviser but excluding
interest, taxes, brokerage, litigation, and other extraordinary expenses)
exceeds limitations established by any state, the Adviser will bear the amount
of such excess. The Adviser will not be required to bear expenses of the Trust
to an extent which would result in a Fund's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code.

The continuance of the Advisory Agreement, after the first two years, must be
specifically approved at least annually (i) by the vote of a majority of the
Trustees who are not parties to the Agreement or "interested persons" of any
party

S-11

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thereto, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the vote of the Trustees or a majority of outstanding
shares of the Funds, as defined in the 1940 Act. The Advisory Agreement will
terminate automatically in the event of its assignment, and is terminable at any
time without penalty by the Trustees of the Trust or, with respect to the Funds
by a majority of the outstanding shares of the Funds, on not less than 30 days'
nor more than 60 days' written notice to the Adviser, or by the Adviser on 90
days' written notice to the Trust.

The Adviser is entitled to a fee which is calculated daily and paid monthly at
an annual rate of .30% of the daily average net assets of the Money Market Fund,
.55% of the daily average net assets of the High Grade Income Fund, .35% of the
daily average net assets of the Hawaii Municipal Bond Fund, .74% of the daily
average net assets of the Equity Fund and .30% of the daily average net assets
of the Treasury Money Market Fund. For the fiscal year ended December 31, 1995
the Hawaii Municipal Bond and Money Market Funds paid First Hawaiian Bank $0 and
$377,090.24, respectively, in advisory fees and the Adviser waived the Funds'
fees in the amount of $49,931.76 and $422,799.05, respectively. As of the
fiscal year ended December 31, 1995, the High Grade Income, Equity and Treasury
Money Market Funds had not commenced operations.

THE SUB-ADVISER

The Adviser has entered into a sub-advisory agreement with Wellington Management
Company ("Sub-Adviser") relating to the Money Market and Treasury Money Market
Funds. Under the agreement, the Sub-Adviser is entitled to fees which are
calculated daily and paid monthly at an annual rate of .075% of the aggregate
average daily net assets of the Money Market and Treasury Money Market Funds,
respectively, up to $500 million and .020% of the aggregate average daily net
assets of the Money Market and Treasury Money Market Funds, respectively, in
excess of $500 million. Such fees are paid by the Adviser and the Sub-Adviser
receives no fees directly from these Funds. For the fiscal year ended December
31, 1995, the Adviser paid Wellington Management Company $199,972.32 in sub-
advisory fees for the Money Market Fund. For the fiscal year ended December 31,
1995, the Adviser did not waive any sub-advisory fees. As of the fiscal year
ended December 31, 1995, the Treasury Money Market Fund had not commenced
operations.

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<PAGE>

THE ADMINISTRATOR

The Trust and SEI Corporation (the "Administrator") have entered into an
administration agreement (the "Administration Agreement") dated January 27,
1995.

The Administration Agreement provides that the Administrator shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Trust in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith or
negligence on the part of the Administrator in the performance of its duties or
from reckless disregard by it of its duties and obligations thereunder. For the
fiscal year ended December 31, 1995, the Money Market and Hawaii Municipal Bond
Funds paid the Administrator $533,244.01 and $0, respectively, in administration
fees and the Administrator waived the Funds' fees in the amount of $0 and
$15,374.15, respectively. As of the fiscal year ended December 31, 1995, the
High Grade Income, Equity and Treasury Money Market Funds had not commenced
operations.

The Administrator, a wholly-owned subsidiary of SEI Corporation ("SEI"), was
organized as a Delaware corporation in 1969 and has its principal business
offices at 680 East Swedesford Road, Wayne, Pennsylvania 19087-1658. Alfred P.
West, Jr., Henry H. Greer and Carmen V. Romeo constitute the Board of Directors
of the Administrator and Distributor. Mr. West is the Chairman of the Board and
Chief Executive Officer of the Administrator, the Distributor and SEI. Mr.
Greer serves as the President and Chief Operating Officer of the Administrator,
the Distributor and SEI. SEI and its subsidiaries are leading providers of
funds evaluation services, trust accounting systems, and brokerage and
information services to financial institutions, institutional investors and
money managers. The Administrator also serves as administrator to the following
other mutual funds: The Achievement Funds Trust, The Advisors' Inner Circle
Fund, The Arbor Fund, ARK Funds, Conestoga Family of Funds, CoreFunds, Inc.,
CrestFunds, Inc., CUFUND, First American Funds, Inc., First American Investment
Funds, Inc., Insurance Investment Products Trust, Inventor Funds, Inc., Marquis
Funds-Registered Trademark-, Monitor Funds, Morgan Grenfell Investment Trust,
The PBHG Funds, Inc., The Pillar Funds, Rembrandt Funds-Registered Trademark-,
1784 Funds, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Managed
Trust, SEI International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust,
Stepstone Funds, STI Classic Funds and STI Classic Variable Trust.

The Administrator is entitled to a fee, calculated daily and paid monthly, at an
annual rate of .20% of average daily net assets of each of the Funds.

S-13

<PAGE>

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI, and the Trust are parties to a distribution agreement ("Distribution
Agreement") dated January 27, 1995 which applies to both Institutional Class A
and Retail Class B shares of the Funds. The Distribution Agreement shall be
reviewed and ratified at least annually (i) by the Trust's Trustees or by the
vote of a majority of the outstanding shares of the Trust, and (ii) by the vote
of a majority of the Trustees of the Trust who are not parties to the
Distribution Agreement or interested persons (as defined in the 1940 Act) of any
party to the Distribution Agreement, cast in person at a meeting called for the
purpose of voting on such approval. The Distribution Agreement will terminate
in the event of any assignment, as defined in the 1940 Act, and is terminable
with respect to a particular Fund on not less than sixty days' notice by the
Trust' Trustees, by vote of a majority of the outstanding shares of such Fund or
by the Distributor. The Distributor will receive no compensation for
distribution of Institutional Class A shares. Retail Class B shares have a
distribution plan ("Retail Class B Distribution Plan").

RETAIL CLASS B DISTRIBUTION PLAN

The Distribution Agreement and the Retail Class B Distribution Plan adopted by
the Retail Class B Shareholders provides that the Retail Class B shares will pay
the Distributor a fee of .25% of the average daily net assets of the High Grade
Income Fund, Hawaii Municipal Bond Fund and Equity Fund, .10% of the average
daily net assets of the Money Market Fund and the Treasury Money Market Fund,
which the Distributor can use to compensate broker/dealers and service
providers, including the Adviser and its affiliates which provide administrative
and/or distribution services to the Retail Class B Shareholders or their
customers who beneficially own Retail Class B Shares.

The Distribution Agreement is renewable annually and may be terminated by the
Distributor, the Qualified Trustees, or by a majority vote of the outstanding
securities of the Trust upon not more than 60 days written notice by either
party.

The Trust has adopted the Retail Class B Distribution Plan in accordance with
the provisions of Rule 12b-1 under the 1940 Act which regulates circumstances
under which an investment company may directly or indirectly bear expenses
relating to the distribution of its shares. Continuance of the Retail Class B
distribution Plan must be approved annually by a majority of the Trustees of the
Trust and by a majority of the Qualified Trustees. The Retail Class B
Distribution Plan requires that quarterly written reports of amounts spent under
the Retail

S-14

<PAGE>

Class B Distribution Plan and the purposes of such expenditures be furnished to
and reviewed by the Trustees. The Retail Class B Distribution Plan may not be
amended to increase materially the amount which may be spent thereunder without
approval by a majority of the outstanding shares of the Trust. All material
amendments of the Plan will require approval by a majority of the Trustees of
the Trust and of the Qualified Trustees.

For the fiscal year ended December 31, 1995, the Hawaii Municipal Bond Fund
incurred no distribution fees and the Money Market Fund incurred $1,185 in
distribution fees.

As of the fiscal year ended December 31, 1995, the High Grade Income, Equity and
Treasury Money Market Funds had not commenced operations.

TRUSTEES AND OFFICERS OF THE TRUST

The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees and executive officers of the Trust and their principal occupations for
the last five years are set forth below.

*MARTIN ANDERSON - Trustee - P.O. Box 3196, Honolulu, HI, Attorney, Goodsill,
Anderson, Quinn & Stifel since 1951.

*PHILIP H. CHING - Trustee (retired, January 31, 1996) - 1700 Palaau St.,
Honolulu, HI. Vice Chairman First Hawaiian Bank (banking) since 1958 to 1996.

SHUNICHI KIMURA - Trustee - 34 Lilinoe St., Honolulu, HI. Judge - State of
Hawaii Judiciary from May, 1974 to April, 1994. Regent - University of Hawaii;
Mayor - County of Hawaii (1968 to 1974); Chairman and Chief Executive of the
County of Hawaii (1964-1968).

MANUAL R. SYLVESTER - Trustee - 1487 Hiikala Place #35, Honolulu, HI. Retired
since 1992. Executive Partner (April, 1992 to September, 1992) and Managing
Partner (July, 1978 to March, 1992) Coopers and Lybrand, Certified Public
Accounting.

JOYCE S. TSUNODA - Trustee - 1814 Hollehua Street, Pearl City, HI 96782.
Administrator University of Hawaii since 1974. Senior Vice President and
Chancellor for Community Colleges - University of Hawaii.

S-15

<PAGE>

*WILLIAM S. RICHARDSON - Trustee - 3335 Loulu Street, Honolulu, HI. Trustee,
Kamehameha Schools Bishop Estate (charitable educational trust) from 1982 to
1992.

*DAVID G. LEE - Trustee, President and Chief Executive Officer - Senior Vice
President of the Administrator and the Distributor since 1993. Vice President
of the Administrator and the Distributor since 1991. President of Sierra Trust
Funds prior to 1991.

SANDRA K. ORLOW - Vice President and Assistant Secretary - Vice President and
Assistant Secretary of the Administrator and Distributor since 1983.

KEVIN P. ROBINS - Vice President and Assistant Secretary - Senior Vice
President, General Counsel and Secretary of SEI, the Administrator and
Distributor since 1994. Vice President of SEI, the Administrator and
Distributor 1992-1994. Associate, Morgan, Lewis & Bockius LLP (law firm), 1988-
1992.

JOHN H. GRADY, JR. - Secretary - 1800 M. Street, N.W., Washington, D.C. 20036,
Partner since 1995, Morgan, Lewis & Bockius LLP (law firm), counsel to the
Trust, Administrator and Distributor.

ROBERT B. CARROLL - Vice President and Assistant Secretary - Vice President,
Assistant Secretary of SEI, the Administrator and Distributor, since 1994.
United States Securities and Exchange Commission, Division of Investment
Management, 1990-1994. Associate, McGuire, Woods, Battle and Boothe (law firm)
before 1990.

KATHRYN L. STANTON - Vice President and Assistant Secretary - Vice President,
Assistant Secretary of SEI, the Administrator and Distributor, since 1994.
Associate, Morgan, Lewis & Bockius LLP (law firm) 1989-1994.

TODD CIPPERMAN - Vice President, Assistant Secretary - Vice President, Assistant
Secretary of SEI, the Administrator and Distributor since May, 1995, Associate,
Dewey Ballantine (law firm) 1994-1995, Associate, Winston & Strawn (law firm)
1991-1995.

JOSEPH LYDON - Vice President, Assistant Secretary - Director of Business
Administration, SEI Corporation since April, 1995; Vice President of Fund Group,
Vice President of the Advisor - Dreman Value Management, LP, President of Dreman
Financial Services, Inc. 1989-1995.

S-16

<PAGE>

JEFFREY A. COHEN - Controller and Chief Financial Officer - CPA, Director,
International and Domestic Funds Accounting - SEI Corporation from 1991 to
Present; Price Waterhouse, Audit Manager - before 1991.

PENSION OR
AGGREGATE RETIREMENT BENEFITS ESTIMATED TOTAL COMPENSATION FROM REGISTRANT
COMPENSATION FROM ACCRUED AS PART OF ANNUAL BENEFITS AND FUND COMPLEX PAID TO DIRECTORS
NAME OF PERSON REGISTRANT FOR FYE FUND EXPENSES UPON RETIREMENT FOR FYE 12/31/95
AND POSITION 12/31/95
<S> <C> <C> <C> <C>
Martin Anderson, Trustee* $7,500 $0 $0 $7,500 for services on 1 board

Philip H. Ching, Trustee* N/A $0 $0 $0 for services on 1 board

Shunichi Kimura, Trustee $7,500 $0 $0 $7,500 for services on 1 board
Manuel R. Sylvester, Trustee $7,500 $0 $0 $7,500 for services on 1 board

Joyce S. Tsunoda, Trustee $7,500 $0 $0 $7,500 for services on 1 board

William S. Richardson, Trustee* $7,500 $0 $0 $7,500 for services on 1 board
David G. Lee, Trustee* N/A $0 $0 $0 for services on 1 board

</TABLE>

*Messrs. Lee, Ching, Anderson and Richardson are Trustees who may be deemed to
be "interested" persons of the Trust as the term is defined in the Investment
Company Act of 1940.

The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust.

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
Shareholder reports to Shareholders of record.

PERFORMANCE

YIELDS. Yields are one basis upon which investors may compare the Funds with
other funds; however, yields of other funds and other investment vehicles may
not be comparable because of the factors set forth below and differences in the
methods used in valuing portfolio instruments.

The yield of a money market fund fluctuates, and the annualization of a week's
dividend is not a representation by the Trust as to what an investment in a
money market fund will

S-17
<PAGE>

actually yield in the future. Actual yields will depend on such variables as
asset quality, average asset maturity, the type of instruments the Fund invests
in, changes in interest rates on money market instruments, changes in the
expenses of the Fund and other factors.

MONEY MARKET FUND YIELDS. From time to time the Money Market and Treasury Money
Market Funds advertise their "current yield" and "effective compound yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. The "current yield" of these Funds refers to the
income generated by an investment in the Funds over a seven-day period (which
period will be stated in the advertisement). This income is then "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective yield" is calculated similarly
but, when annualized, the income earned by an investment in the Funds is assumed
to be reinvested. The "effective yield" will be slightly higher than the
"current yield" because of the compounding effect of this assumed reinvestment.

The current yield of the Money Market and Treasury Money Market Funds will be
calculated daily based upon the seven days ending on the date of calculation
("base period"). The yield is computed by determining the net change (exclusive
of capital changes) in the value of a hypothetical pre-existing shareholder
account having a balance of one share at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from shareholder
accounts, and dividing such net change by the value of the account at the
beginning of the same period to obtain the base period return and multiplying
the result by (365/7). Realized and unrealized gains and losses are not
included in the calculation of the yield. The effective compound yield of these
Funds is determined by computing the net change, exclusive of capital changes,
in the value of a hypothetical pre-existing account having a balance of one
share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from shareholder accounts, and dividing the difference by
the value of the account at the beginning of the base period to obtain the base
period return, and then compounding the base period return by adding 1, raising
the sum to a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula: Effective Yield = (Base Period Return + 1)
365/7) - 1. The current and the effective yields reflect the reinvestment of
net income earned daily on portfolio assets.

For the seven-day period ended December 31, 1995, the seven-day yield and seven-
day effective yield for the Money Market Fund were 5.31 and 5.46, respectively,
for the Institutional Class shares, and 5.21 and 5.35, respectively, for the
Retail Class shares. As of the fiscal year ended December 31, 1995, the
Treasury Money Market Fund had not commenced operations.

OTHER YIELDS. The Hawaii Municipal Bond Fund and the High Grade Income Fund may
advertise a 30-day yield. The Hawaii Municipal Bond Fund also may advertise 30-
day tax-equivalent yield. Tax equivalent yields are computed by dividing that
portion of the Fund's yield which is tax-exempt by one minus a stated federal
and state income tax rate and adding

S-18
<PAGE>

the product to that portion, if any, of the Fund's yield that is not tax-exempt.
(Tax equivalent yields assume the payment of Federal income taxes at a rate of
31% and Hawaii income taxes at a rate of 10%.) These figures will be based on
historical earnings and are not intended to indicate future performance. The
30-day yield of these Funds refers to the annualized income generated by an
investment in the Funds over a specified 30-day period. The yield is calculated
by assuming that the income generated by the investment during that period
generated each period over one year and is shown as a percentage of the
investment. In particular, yield will be calculated according to the following
formula:

Yield = (2 (a-b/cd + 1)6 - 1) where a = dividends and interest earned during the
period; b = expenses accrued for the period (net of reimbursement); c = the
current daily number of shares outstanding during the period that were entitled
to receive dividends; and d = the maximum offering price per share on the last
day of the period.

Tax equivalent yields are computed by dividing that portion of a Fund's yield
which is tax-exempt by one minus a stated federal and state income tax rate and
adding the product to that portion, if any, of the Fund's yield that is not tax-
exempt.

For the 30-day period ended December 31, 1995, the 30-day yield and 30-day tax
equivalent yield for the Hawaii Municipal Bond Fund were 5.24 and 7.59,
respectively, for the Institutional Class shares and 5.12 and 7.42,
respectively, for the Retail Class shares. As of the fiscal year ended December
31, 1995, the High Grade Income and Equity Funds had not commenced operations.

TOTAL RETURN. From time to time, the non-Money Market Funds may advertise total
return on an "average annual total return" basis and on an "aggregate total
return" basis for various periods. Average annual total return reflects the
average annual percentage change in the value of an investment in a Fund over a
particular measuring period. Aggregate total return reflects the cumulative
percentage change in value over the measuring period. Aggregate total return is
computed according to a formula prescribed by the SEC. The formula can be
expressed as follows: P (1 + T)n = ERV, where P = a hypothetical initial
payment of $1,000; T = average annual total return; n = number of years; and ERV
= ending redeemable value of a hypothetical $1,000 payment made at the beginning
of the designated time period as of the end of such period or the life of the
fund. The formula for calculating aggregate total return can be expressed as
(ERV/P)-1.

The calculation of total return assumes reinvestment of all dividends and
capital gain distribution on the reinvestment dates during the period and that
the entire investment is redeemed at the end of the period. In addition the
maximum sales charge for each Fund is deducted from the initial $1,000 payment.
Total return may also be shown without giving effect to any sales charges.

- --------------------------------------------------------------------------------
FUND Class/Without Load AVERAGE ANNUAL TOTAL
With Load RETURN SINCE INCEPTION
- --------------------------------------------------------------------------------

S-19
<PAGE>

Money Market Fund Institutional/without 5.67
load

Money Market Fund Retail/without load 5.55

Hawaii Municipal Bond Institutional/without 10.91
Fund load

Hawaii Municipal Bond Retail/with load 6.46
Fund

Hawaii Municipal Bond Retail/without load 10.85
Fund
- --------------------------------------------------------------------------------

The Funds' performance may from time to time be compared to other mutual funds
tracked by mutual fund rating services (such as Lipper Analytical Services),
financial and business publications and periodicals, to broad groups of
comparable mutual funds or to unmanaged indices which may assume investment of
dividends but generally do not reflect deductions for administrative and
management costs. The Funds may quote Morningstar, Inc., a service that ranks
mutual funds on the basis of risk-adjusted performance. The Funds may quote
Ibbotson Associates of Chicago, Illinois, which provides historical returns of
the capitals markets in the U.S. The Funds may use long term performance of
these capital markets to demonstrate general long-term risk vs. reward scenarios
and could include the value of a hypothetical investment in any of the capital
markets. The Funds may also quote financial and business publications and
periodicals as they relate to fund management, investment philosophy, and
investment techniques.

PURCHASE AND REDEMPTION OF SHARES

Purchases and redemptions of shares of the Funds may be made on any day the New
York Stock Exchange and the Federal Reserve wire system are open for business
except for Hawaii state banking holidays.

It is the Trust's policy to pay for redemptions in cash. The Trust retains the
right, however, to provide for redemptions in whole or in part by a distribution
in-kind of securities held by the Funds in lieu of cash. Shareholders may incur
brokerage charges on the sale of any such securities so received in payment of
redemptions. A Shareholder will at all times be entitled to aggregate cash
redemptions from all Funds of the Trust during any 90-day period of up to the
lesser of $250,000 or 1% of the Trust's net assets.

S-20
<PAGE>

The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the Securities and Exchange Commission by rule or
regulation) as a result of disposal or valuation of the Fund's securities is not
reasonably practicable, or for such other periods as the Securities and Exchange
Commission has by order permitted. The Trust also reserves the right to suspend
sales of shares of the Funds for any period during which the New York Stock
Exchange, the Adviser, the Administrator and/or the Custodian are not open for
business.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of the Money Market and Treasury Money Market
Funds is calculated by adding the value of securities and other assets,
subtracting liabilities and dividing by the number of outstanding shares.
Securities will be valued by the amortized cost method which involves valuing a
security at its cost on the date of purchase and thereafter (absent unusual
circumstances) assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuations in general market rates of
interest on the value of the instrument. While this method provides certainty
in valuation, it may result in periods during which a security's value, as
determined by this method, is higher or lower than the price these Funds would
receive if they sold the instrument. During periods of declining interest
rates, the daily yield of these Funds may tend to be higher than a like
computation made by a company with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of its
portfolio securities. Thus, if the use of amortized cost by these Funds
resulted in a lower aggregate portfolio value on a particular day, a prospective
investor in these Funds would be able to obtain a somewhat higher yield than
would result from investment in a company utilizing solely market values, and
existing investors in these Funds would experience a lower yield. The converse
would apply in a period of rising interest rates.

The Money Market and Treasury Money Market Funds' use of amortized cost and the
maintenance of these Funds' net asset value at $1.00 are permitted by
regulations promulgated by Rule 2a-7 under the Investment Company Act of 1940,
provided that certain conditions are met. These conditions currently require
that the Funds maintain a dollar-weighted average maturity of 90 days or less,
not purchase any instrument having a remaining maturity of more than 397 days,
and will limit their investments to those U.S. dollar-denominated instruments
which the Trustees determine to present minimal credit risks and which are of
"eligible" quality. The regulations also require the Trustees to establish
procedures which are reasonably designed to stabilize the net asset value per
share at $1.00 for these Funds. Such procedures include the determination of
the extent of deviation, if any, of the Funds' current net asset value per share
calculated using available market quotations from the Funds' amortized cost
price per share at such intervals as the Trustees deem appropriate and
reasonable in light of market conditions and periodic reviews of the amount of
the deviation and the methods used to calculate such deviation. In the event
that such deviation exceeds 1/2 of 1%, the Trustees are required to consider
promptly what action, if any, should be

S-21
<PAGE>

initiated, and, if the Trustees believe that the extent of any deviation may
result in material dilution or other unfair results to Shareholders, the
Trustees are required to take such corrective action as they deem appropriate to
eliminate or reduce such dilution or unfair results to the extent reasonably
practicable. Such actions may include the sale of portfolio instruments prior
to maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind; or establishing a net
asset value per share by using available market quotations. In addition, if
these Funds incur a significant loss or liability, the Trustees have the
authority to reduce pro rata the number of shares of these Funds in each
Shareholder's account and to offset each Shareholder's pro rata portion of such
loss or liability from the Shareholder's accrued but unpaid dividends or from
future dividends.

The securities of the non-Money Market Funds are valued pursuant to prices and
valuations provided by an independent pricing service. The pricing service
relies primarily on prices of actual market transactions as well as trader
quotations. However, the service may also use a matrix system to determine
valuations, which system considers such factors as security prices, yields,
maturities, call features, ratings and developments relating to specific
securities in arriving at valuations. The procedures of the pricing service and
its valuations are reviewed by the officers of the Trust under the general
supervision of the Trustees. Although the methodology and procedures are
identical, the net asset value per share of Institutional Class A and Retail
Class B shares of Funds other than the Money Market and Treasury Money Market
Funds may differ because of the distribution expenses charged to Retail Class B
shares.

TAXES

The following is only a summary of certain income tax considerations generally
affecting a Fund and its Shareholders and is not intended as a substitute for
careful tax planning. Shareholders are urged to consult their tax advisers with
specific reference to their own tax situations, including their state and local
income tax liabilities.

FEDERAL INCOME TAX

ALL FUNDS

In order to qualify for treatment as a regulated investment company ("RIC")
under the Internal Revenue Code of 1986, as amended (the "Code"), each Fund must
distribute annually to its Shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) (the "Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
the Fund's gross income each taxable year must be derived from dividends,
interest, payments with respect to securities loans, and gains from the sale or
other disposition of stock or securities, or certain other income; (ii) the Fund
must derive less than 30% of its gross

S-22
<PAGE>

income each taxable year from the sale or other disposition of stocks,
securities or certain other investments held for less than three months; (iii)
at the close of each quarter of the Fund's taxable year, at least 50% of the
value of its total assets must be represented by cash and cash items, U.S.
Government securities, securities of other RICs and other securities, with such
other securities limited, in respect to any one issuer, to an amount that does
not exceed 5% of the value of the Fund's assets and that does not represent more
than 10% of the outstanding voting securities of such issuer; and (iv) at the
close of each quarter of the Fund's taxable year, not more than 25% of the value
of its assets may be invested in securities (other than U.S. Government
securities or the securities of other RICs) of any one issuer or of two or more
issuers which are engaged in the same, similar or related trades or businesses
if the Fund owns at least 20% of the voting power of such issuers.

Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss), a
Fund will be subject to a nondeductible 4% excise tax to the extent it fails to
distribute by the end of any calendar year 98% of its ordinary income for that
year and 98% of its capital gain net income for the one-year period ending on
October 31 of that year, plus certain other amounts.

A dividends received deduction is available to corporations that receive
dividends from domestic corporations. Dividends paid by an equity fund will be
eligible for the dividends received deduction for corporate shareholders to the
extent they are derived from dividends from domestic corporations and to the
extent that the respective security has been held for at least five days.
Equity Fund Shareholders will be advised each year of the portion of ordinary
income dividends eligible for the deduction.

Dividends received from other funds, E.G., money market or fixed income funds,
will not be eligible for the dividends received deduction. Individual
shareholders are not entitled to the dividends received deduction regardless of
which fund paid the dividend.

Any gain or loss recognized on a sale or redemption of shares of any Fund by a
Shareholder who is not a dealer in securities will generally be treated as a
long-term capital gain or loss if the shares have been held for more than twelve
months and otherwise will be generally treated as a short-term capital gain or
loss. Any loss recognized by a Shareholder upon the sale or redemption of
shares of any Fund held for six months or less, however, will be disallowed to
the extent of any exempt-interest dividends received by the Shareholder with
respect to such shares. If shares on which a net capital gain distribution has
been received are subsequently sold or redeemed and such shares have been held
for six months or less, any loss recognized will be treated as a long-term
capital loss to the extent of the long-term capital gain distribution.

Interest on indebtedness incurred by Shareholders to purchase or carry shares of
the fund will not be deductible for federal income tax purposes to the extent
the Fund distributes exempt-

S-23
<PAGE>

interest dividends during the taxable year. The deduction otherwise allowable
to property and casualty insurance companies for "losses incurred" will be
reduced by an amount equal to a portion of exempt-interest dividends received or
accrued during any taxable year. Foreign corporations engaged in a trade or
business in the United States may be subject to a "branch profits tax" on their
"dividend equivalent amount" for the taxable year, which will include exempt-
interest dividends. Certain Subchapter S corporations may also be subject to
taxes on their "passive investment income," which could include exempt-interest
dividends. Up to 85 percent of the Social Security benefits or railroad
retirement benefits received by an individual during any taxable year will be
included in the gross income of such individual if the individual's "modified
adjusted gross income" (which includes exempt-interest dividends) plus one-half
of the Social Security benefits or railroad retirement benefits received by such
individual during that taxable year exceeds the base amount described in Section
86 of the Code.

ADDITIONAL CONSIDERATION FOR HAWAII MUNICIPAL BOND FUND

As noted in the Prospectus, exempt interest dividends are generally excludable
from a Shareholder's gross income for regular federal income tax purposes.
Exempt-interest dividends may nevertheless be subject to the alternative minimum
tax (the "Alternative Minimum Tax") imposed by Section 55 of the Code or the
environmental tax (the "Environmental Tax") imposed by Section 59A of the Code.
The Alternative Minimum Tax is imposed at the rate of 26-28% in the case of non-
corporate taxpayers and at the rate of 20% in the case of corporate taxpayers,
to the extent it exceeds the taxpayer's regular tax liability. The
Environmental Tax is imposed at the rate of 0.12% and applies only to corporate
taxpayers. The Alternative Minimum Tax and the Environmental Tax may be imposed
in two circumstances. First, exempt-interest dividends derived from certain
"private activity bonds" issued after August 7, 1986, will generally be an item
of tax preference (and therefore potentially subject to the Alternative Minimum
Tax for both corporate and non-corporate taxpayers and the Environmental Tax for
corporate taxpayers only). Second, in the case of exempt-interest dividends
received by corporate Shareholders, all exempt-interest dividends, regardless of
when the bonds from which they are derived were issued or whether they are
derived from private activity bonds, will be included in the corporation's
"adjusted current earnings," as defined in Section 56(g) of the Code, in
calculating the corporation's alternative minimum taxable income for purposes of
determining the Alternative Minimum Tax and the Environmental Tax.

If a Fund should fail to qualify as a regulated investment company for any
taxable year, the Fund would pay tax on its taxable investment income and
capital gains at regular corporate rates without any deductions for amounts
distributed to Shareholders. In addition, all of the Fund's distributions to
Shareholders would be taxable as ordinary income and would qualify for the
corporate dividends received deduction in the case of corporate shareholders.

S-24
<PAGE>

The Fund may not be an appropriate investment for persons (including
corporations and other business entities) who are "substantial users" (or
persons related to such users) of facilities financed by industrial development
bonds or private activity bonds. A "substantial user" is defined generally to
include certain persons who regularly use a facility financed by the proceeds of
such bonds in their trade or business. Such entities or persons should consult
their tax advisors before purchasing shares of either Fund.

Issuers of bonds purchased by the Fund (or the beneficiary of such bonds) may
have made certain representations or covenants in connection with the issuance
of such bonds to satisfy certain requirements of the Code that must be satisfied
subsequent to the issuance of such bonds. Investors should be aware that
exempt-interest dividends derived from such bonds may become subject to federal
income taxation retroactively to the date of such issuance of the bonds to which
such dividends are attributable if such representations are determined to have
been inaccurate or if the issuer of such bonds (or the beneficiary of such
bonds) fails to comply with such covenants.

STATE TAXES

A Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Depending upon state and
local law, distributions by the Funds to Shareholders and the ownership of
shares may be subject to state and local taxes.

Many states allow income received from certain United States Government
obligations that is tax exempt when received directly to be tax exempt when
received as income dividends from an investment company. Not all states permit
such income dividends to be tax exempt and some require that a certain minimum
percentage of an investment company's income dividend be derived from state tax-
exempt interest before any portion of the income dividends may be exempt. The
Funds will inform Shareholders annually of the percentage of income that is
derived from direct United States Government obligations. Shareholders should
consult their tax advisors to determine whether any portion of the income
dividends received from a Fund is considered tax exempt in their particular
states.

HAWAII TAXATION

The State of Hawaii has specifically adopted Sections 852 through 855 of the
Internal Revenue Code of 1986, as amended (the "Code"), which provisions provide
for pass-through treatment of exempt interest dividends and capital gains, i.e.,
distributions by the Hawaii Municipal Bond Fund of dividends representing exempt
interest and capital gains retain their original character in the hands of
shareholders. As the State of Hawaii's Department of Taxation has confirmed in
response to a request by special counsel for the Trust, distributions from the
Hawaii Municipal Bond Fund to its shareholders which are attributable to
interest on

S-25
<PAGE>

obligations exempt from income tax in the State of Hawaii will not be subject to
Hawaii income tax in the hands of shareholders so long as at least fifty percent
(50%) of the Hawaii Municipal Bond Fund's assets are invested in securities the
interest from which is exempt from Hawaii state taxation. In addition, the
Department of Taxation has confirmed that interest income on obligations issued
by the U.S. government and its territories is exempt from State of Hawaii income
taxation.

FUND TRANSACTIONS

Subject to policies established by the Trustees, the Adviser (and, where
applicable, the Sub-Adviser) are responsible for placing the orders to execute
transactions for the Funds. In placing orders, it is the policy of the Adviser
to seek to obtain the best net results taking into account such factors as price
(including the applicable dealer spread), the size, type and difficulty of the
transaction involved, the firm's general execution and operational facilities,
and the firm's risk in positioning the securities involved. While the Adviser
generally seeks reasonably competitive spreads or commissions, the Funds will
not necessarily be paying the lowest spread or commission available. The Funds
will not purchase portfolio securities from any affiliated person acting as
principal except in conformity with the regulations of the SEC.

The money market securities in which the Funds invest are traded primarily in
the over-the-counter market. Bonds and debentures are usually traded over-the-
counter, but may be traded on an exchange. Where possible, the Adviser will
deal directly with the dealers who make a market in the securities involved
except in those circumstances where better prices and execution are available
elsewhere. Such dealers usually are acting as principal for their own account.
On occasion, securities may be purchased directly from the issuer. Money market
securities are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of executing portfolio
securities transactions of the Trust will primarily consist of dealer spreads
and underwriting commissions.

The Trust does not expect to use one particular dealer, but subject to the
Trust's policy of seeking the best net results, dealers who provide supplemental
investment research to the Adviser may receive orders for transactions by the
Funds. Information so received will be in addition to and not in lieu of the
services required to be performed by the Adviser under its Advisory Agreement,
and the expenses of the Adviser will not necessarily be reduced as a result of
the receipt of such supplemental information.

The Funds may execute brokerage or other agency transactions through the
Distributor, which is a registered broker-dealer in conformity with the 1940
Act, the Securities Exchange Act of 1934 and rules promulgated by the SEC.
Under these provisions, the Distributor is permitted to receive and retain
compensation for effecting portfolio transactions for the Funds on an exchange
if a written contract is in effect between the Distributor and the Trust
expressly permitting the Distributor to receive and retain such compensation.

S-26
<PAGE>

These rules further require that commissions paid to the Distributor by the
Trust for exchange transactions not exceed "usual and customary" brokerage
commissions. The rules define "usual and customary" commissions to include
amounts which are "reasonable and fair compared to the commission, fee or other
remuneration received or to be received by other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time." In addition, the
Funds may direct commission business to one or more designated broker/dealers,
including the Distributor, in connection with such broker/dealer's payment of
certain of the Funds' expenses. The Trustees, including those who are not
"interested persons" of the Trust, have adopted procedures for evaluating the
reasonableness of commissions paid to the Distributor and will review these
procedures periodically.

Since the Trust does not market its shares through intermediary broker-dealers,
it is not the Trust's practice to allocate brokerage business on the basis of
sales of its shares which may be made through such firms. However, the Adviser
may place Fund orders with qualified broker-dealers who recommend the Trust to
clients, and may, when a number of brokers and dealers can provide best price
and execution on a particular transaction, consider such recommendations by a
broker or dealer in selecting among broker-dealers.

For the Trust's fiscal year ended December 31, 1995, no brokerage fees were
paid.

DESCRIPTION OF SHARES

The Agreement and Declaration of Trust authorizes the issuance of an unlimited
number of shares of each series and of each class of shares thereof. Each
Institutional Class A and Retail Class B share of that Fund represents an equal
proportionate interest in that Fund with each other Institutional Class A and
Retail Class B share of that Fund. Shares are entitled upon liquidation to a
pro rata share in the net assets of the Funds, Shareholders have no preemptive
rights. The Agreement and Declaration of Trust provide that the Trustees of the
Trust may create additional series of shares. All consideration received by the
Trust for shares of any additional series and all assets in which such
consideration is invested would belong to that series and would be subject to
the liabilities related thereto. Share certificates representing shares will
not be issued.

LIMITATION OF TRUSTEES' LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for his
own willful defaults and, if reasonable care has been exercised in the selection
of officers, agents, employees or investment advisers, shall not be liable for
any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust.

S-27
<PAGE>

However, nothing in the Declaration of Trust shall protect or indemnify a
Trustee against any liability for his willful misfeasance, bad faith, gross
negligence or reckless disregard of his duties.

SHAREHOLDER LIABILITY

The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. Even if, however, the Trust were held to be a partnership, the
possibility of the shareholders' incurring financial loss for that reason
appears remote because the Trust's Declaration of Trust contains an express
disclaimer of shareholder liability for obligations of the Trust and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any shareholder held personally liable for the
obligations of the Trust.

5% SHAREHOLDERS

As of February 5, 1996, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% or
more of the shares of the Funds.

BISHOP STREET MONEY MARKET FUND CLASS A
---------------------------------------

Name and Address Number of Shares Percent of Fund

First Hawaiian Bank 333,888,724.8100 99.91%
Asset Management Div
Attn: Bishop Street Funds Dept
P.O. Box 3708
Honolulu, HI 96811-3708

BISHOP STREET MONEY MARKET FUND CLASS B

Name and Address Number of Shares Percent of Fund

The Bay Villas Inc/Gry Amt 256,232.6100 7.69%
500 Bay Dr.
Kapalua, HI 96761-9034

S-28
<PAGE>

The Bay Villas Inc./Grn - Res 271,970.7100 8.16%
500 Bay Drive
Kapalua,HI 96761-9034
Walter A. Lappert 866,377.3900 25.99%
P.O. Box 1840
Koloa, HI 96756-1840

BISHOP STREET HAWAII MUNICIPAL BOND FUND CLASS A

Name and Address Number of Shares Percent of Fund

First Hawaiian Bank 1,085,574.3010 100%
Asset Management Div
Attn: Bishop Street Funds Dept.
P.O. Box 3708
Honolulu, HI 96811-3708

BISHOP STREET HAWAII MUNICIPAL BOND FUND CLASS B

Name and Address Number of Shares Percent of Fund

Marilynn R. Cutter TR 96,448.2970 12.82%
U/A 10/13/94
Marilynn R. Cutter Trust
4999 Kahala Avenue #407
Honolulu, HI 96816-5421

EXPERTS

The financial statements included in this Statement of Additional Information
and the financial highlights included in the Prospectuses have been audited by
Coopers & Lybrand L.L.P., independent public accountants, as indicated in their
report, with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.

FINANCIAL INFORMATION

Following are the audited financial statements of the Trust for the fiscal year
ended December 31, 1995, and the Report of Independent Accountants of Coopers &
Lybrand L.L.P. dated February 16, 1996, relating to the financial statements and
financial highlights of the Trust.

S-29

<PAGE>

DECEMBER 31, 1995 BISHOP STREET FUNDS

STATEMENT OF NET ASSETS

MONEY MARKET FUND

- --------------------------------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER -- 58.3%
American Express Credit
5.800%, 03/15/96 $ 6,000 $ 5,931
5.870%, 03/08/96 4,000 3,958
American General Finance
5.840%, 02/09/96 5,000 4,969
5.880%, 01/30/96 3,000 2,986
American Home Products
5.850%, 03/07/96 7,000 6,927
Associates Corporation of
North America
5.870%, 02/12/96 7,000 6,954
Avco Financial Savings
5.910%, 01/25/96 7,000 6,973
Chase Manhattan
5.820%, 02/29/96 7,000 6,935
Ciesco
5.750%, 03/08/96 1,000 990
5.840%, 02/29/96 9,000 8,917
CIT Group Holdings
5.840%, 02/12/96 5,000 4,967
Clipper Receivable
6.000%, 01/31/96 3,580 3,562
Coca Cola Enterprises
5.870%, 02/12/96 7,000 6,953
CoreStates Bank
5.860%, 01/05/96 3,000 3,000
CoreStates Capital
5.860%, 02/20/96 4,500 4,465
Deere (John) Capital
5.720%, 04/25/96 10,000 9,824
Ford Motor Credit
5.870%, 02/09/96 3,000 2,982
General Electric Capital
5.680%, 02/13/96 4,000 3,973
5.870%, 02/09/96 6,000 5,963
General Motors Acceptance
5.920%, 01/23/96 5,000 4,982
5.960%, 02/16/96 3,500 3,474
Household Finance
5.870%, 01/31/96 7,000 6,967
IBM
5.720%, 04/24/96 10,000 9,826
International Lease Finance
5.830%, 02/26/96 4,000 3,965
McKenna Triangle
5.820%, 02/15/96 5,000 4,965
National Fuel Gas
5.940%, 01/22/96 5,000 4,983
Norwest Financial
5.690%, 02/28/96 2,000 1,982
PNC Funding
5.770%, 02/05/96 8,000 7,955
Prefco
5.710%, 04/16/96 10,000 9,837
Sears Roebuck Acceptance
5.880%, 02/13/96 7,000 6,952
5.890%, 02/13/96 3,000 2,980
Synthetic Money Market Trust
95-1(A)
5.770%, 05/29/96 8,000 7,999
Synthetic Money Market Trust
95-B(A)
5.990%, 08/02/96 2,000 2,000
---------
TOTAL COMMERCIAL PAPER
(Cost $180,095,757) 180,096
---------
CORPORATE BOND -- 1.9%
NationsBank (A)
5.880%, 11/18/96 3,000 3,002
Society National Bank
6.000%, 04/25/96 2,810 2,811
---------
TOTAL CORPORATE BOND
(Cost $5,813,239) 5,813

---------
BANK NOTES -- 16.5%
BankAmerica, IL
5.740%, 02/16/96 10,000 10,000
Bank of New York
5.520%, 05/22/96 10,000 9,997
First American Bank
5.560%, 03/20/96 6,000 6,000

<PAGE>

- --------------------------------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
First Bank of South Dakota
5.910%, 05/06/96 $ 7,000 $ 6,999
First National Bank of Maryland
5.740%, 02/05/96 3,000 3,000
5.750%, 05/01/96 5,000 5,001
NationsBank
5.500%, 06/10/96 7,000 7,000
South Trust, AL(A)
5.920%, 04/19/96 3,000 3,000
---------
TOTAL BANK NOTES
(Cost $50,996,739) 50,997
---------

CERTIFICATES OF DEPOSIT -- 4.2%
Chase Manhattan, DE
5.770%, 04/15/96 3,000 3,000
Wilmington Trust of Delaware
5.680%, 03/27/96 10,000 10,000
---------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $13,000,000) 13,000
---------
BANKERS ACCEPTANCE -- 0.6%
CoreStates Bank
5.560%, 03/04/96 2,000 1,980
---------
TOTAL BANKERS ACCEPTANCE
(Cost $1,980,540) 1,980
---------

U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.2%
Federal National Mortgage
Association
5.530%, 05/10/96 10,000 9,808
---------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $9,807,528) 9,808
---------

REPURCHASE AGREEMENTS -- 15.6%
Lehman Brothers
5.95%, dated 12/29/95,
matures 01/02/95,
repurchase price $48,231,866
(collateralized by U.S. Treasury
Note, par value $49,105,000,
5.25%, matures 12/31/97:
market value $49,166,363) 48,200 48,200
---------

TOTAL REPURCHASE AGREEMENTS
(Cost $48,200,000) 48,200
---------

- --------------------------------------------------------------------------------

VALUE
DESCRIPTION (000)
- --------------------------------------------------------------------------------
<S> <C>
TOTAL INVESTMENTS -- 100.3%
(Cost $309,893,803) $ 309,894
---------
OTHER ASSETS AND LIABILITIES, NET -- (0.3%) (1,116)
---------
NET ASSETS:
Fund shares of Institutional Class A (unlimited
authorization -- no par value) based on
305,116,499 outstanding shares of beneficial
interest 305,116
Fund shares of Retail Class B (unlimited
authorization -- no par value) based on
3,657,974 outstanding shares of beneficial
interest 3,658
Accumulated Net Realized Gain on
Investments 4
---------
TOTAL NET ASSETS -- 100.0% $ 308,778
---------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE --
INSTITUTIONAL CLASS A $ 1.00
---------
---------

NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE --
RETAIL CLASS B $ 1.00
---------
---------

</TABLE>

- --------------------------------------------------------------------------------

(A) FLOATING RATE SECURITY - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1995.
<PAGE>

DECEMBER 31, 1995 BISHOP STREET FUNDS

STATEMENT OF NET ASSETS

HAWAII MUNICIPAL BOND FUND

- --------------------------------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS -- 95.6%
HAWAII -- 76.5%
Hawaii County, GO, MBIA Insured
6.850%, 12/01/02 $ 250 $ 265
Hawaii County, GO, Ser A,
FGIC Insured
5.600%, 05/01/12 200 208
5.300%, 05/01/05 120 126
5.600%, 05/01/13 190 198
Hawaii State, GO Ser BZ
6.000%, 10/01/12 100 110
Hawaii Department of Budget &
Finance, Ser CE
5.250%, 06/01/11 380 380
Hawaii State, GO Ser CH
6.000%, 11/01/10 100 111
Hawaii State, GO Ser CJ
6.250%, 01/01/15 100 107
Hawaii State Airport Systems,
Ser 2, RB, FGIC Insured
7.500%, 07/01/20 50 56
Hawaii State Airport Systems,
RB, FGIC Insured
7.000%, 07/01/20 380 424
Hawaii State Airport Systems,
Ser 2, RB
6.900%, 07/01/12 60 69
7.000%, 07/01/18 195 216
Hawaii State Airport Systems,
RB, MBIA Insured
6.250%, 07/01/06 1,000 1,099
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Queens Medical Center
Project, RB, FGIC Insured
7.000%, 07/01/08 75 81
6.500%, 07/01/12 110 114
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Hawaii Electric
Incorporated Project, RB
7.630%, 12/01/18 50 55
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Hawaii Electric
Incorporated Project Ser B, RB
7.600%, 07/01/20 300 330
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Kaiser Permanente
Project Ser A, RB
6.500%, 03/01/11 300 319
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage St. Francis Medical
Center Project, RB, CGIC Insured
5.880%, 07/01/01 210 224
6.500%, 07/01/22 30 32
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Kapiolani Health
Care System Project, RB
6.300%, 07/01/08 400 422
6.400%, 07/01/13 250 261
Hawaii State Department of Budget
& Finance Special Purpose
Mortgage Hawaii Electric
Incorporated Project Ser A, RB
MBIA Insured
6.600%, 01/01/25 250 275
Hawaii State Harbor Capital
Improvement, RB, MBIA Insured
7.000%, 07/01/17 375 412
Hawaii State Harbor Capital
Improvement, RB, FGIC Insured
6.200%, 07/01/08 150 162
6.250%, 07/01/15 150 161
Hawaii State Housing, Finance &
Development Corporation
University of Hawaii Faculty
Housing Project, RB,
AMBAC Insured
5.650%, 10/01/16 675 690

<PAGE>

Hawaii State Housing, Finance &
Development Corporation
Affordable Rental Housing
Program Ser 1995 A, RB
6.000%, 07/01/15 $ 350 $ 356
6.050%, 07/01/22 250 254
Hawaii State Housing, Finance &
Development Corporation Single
Family Mortgage Purchase Ser B,
RB, FNMA Collateral
5.700%, 07/01/13 545 550
5.850%, 07/01/17 1,000 1,015
Hawaii State Highway Project, RB
5.000%, 07/01/11 510 497
5.000%, 07/01/12 250 242
Honolulu City & County Ser A, GO
6.000%, 01/01/10 150 163
5.700%, 04/01/09 215 227
Honolulu City & County, GO,
Ser A, MBIA Insured
6.000%, 11/01/10 300 326
Honolulu City & County Mortgage
Smith Berentia Ser A, RB,
FHA & MBIA Insured
7.800%, 07/01/24 100 110
Honolulu City & County Waipahu
Towers Project Ser A,
GNMA Collateral
6.900%, 06/20/35 200 215
Kauai County, Refunding Ser A,
GO, MBIA Insured
5.400%, 02/01/04 50 53
Kauai County, Ser B, GO,
MBIA Insured
5.900%, 02/01/13 175 183
Maui County, Ser A, GO,
FGIC Insured
5.750%, 01/01/11 250 257
Maui County, GO, FGIC Insured
5.000%, 09/01/09 200 197
Maui County, Refunding GO,
FGIC Insured
5.130%, 12/15/10 100 100
Maui County, GO, FGIC Insured
5.130%, 12/15/12 100 99
Maui County, Board of Water
Supply Ser A, RB, FGIC Insured
6.000%, 12/01/01 520 569
---------
12,320
---------

GUAM -- 3.7%
Guam Power Authority, Ser A, RB,
AMBAC Insured
6.380%, 10/01/08 400 437
Guam, Government Limited
Obligation, Ser A, RB
7.100%, 11/15/09 150 161
---------
598
---------

PUERTO RICO -- 11.4%
Commonwealth of Puerto Rico, GO,
FSA Insured
6.000%, 07/01/22 150 154
Commonwealth of Puerto Rico, GO
AMBAC Insured
5.750%, 07/01/24 375 382
Puerto Rico Electric Power Authority,
Ser O, RB, CGIC Insured
6.000%, 07/01/10 150 155
Puerto Rico Public Building
Authority, Government Facilities,
Ser A, RB, AMBAC Insured
5.750%, 07/01/22 250 257
Puerto Rico Industrial Tourist
Educational, Medical
Environmental Control Facilities
Hospital Auxilio Muto Oblig
Group, MBIA Insured
6.250%, 07/01/24 300 321
Puerto Rico Housing, Banking &
Finance Agency, Single Family
Mortgage, Affordable Housing
Mortgage Portfolio I, RB, GNMA/
FNMA/FHLMC Collateral
6.100%, 10/01/15 300 308
University of Puerto Rico, Ser M,
RB, MBIA Insured
5.500%, 06/01/15 250 254
---------
1,831
---------

</TABLE>

<PAGE>

DECEMBER 31, 1995 BISHOP STREET FUNDS

STATEMENT OF NET ASSETS

HAWAII MUNICIPAL BOND FUND

VIRGIN ISLANDS -- 1.0%
Virgin Islands Housing Finance
Authority Single Family, GNMA
Mortgage Backed Securities
Program, Ser A, RB
6.500%, 03/01/25 150 156
---------
TOTAL MUNICIPAL BONDS
(Cost $14,908,552) 15,396
---------

CASH EQUIVALENTS -- 1.2%
Dreyfus Tax Exempt Cash
Management Fund
4.430% 155 155
Nuveen Federal Tax Exempt
Money Market
4.620% 43 43
---------
TOTAL CASH EQUIVALENTS
(Cost $197,834) 198

TOTAL INVESTMENTS -- 96.8%
(Cost $15,106,386) $ 15,594
---------
OTHER ASSETS AND LIABILITIES, NET -- 3.2% 519
---------

- --------------------------------------------------------------------------------

VALUE
DESCRIPTION (000)
- --------------------------------------------------------------------------------
<S> <C>

NET ASSETS:
Fund shares of Institutional Class A (unlimited
authorization -- no par value) based on
898,641 outstanding shares of beneficial
interest 9,113
Fund shares of Retail Class B (unlimited
authorization -- no par value) based on
639,856 outstanding shares of beneficial
interest 6,472
Accumulated Net Realized Gain on
Investments 41
Net Unrealized Appreciation on
Investments 487
---------
TOTAL NET ASSETS -- 100.0% $ 16,113
---------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE --
INSTITUTIONAL CLASS A $ 10.47
---------
---------
NET ASSET VALUE, AND REDEMPTION
PRICE PER SHARE --
RETAIL CLASS B $ 10.47
---------
---------
MAXIMUM OFFERING PRICE PER SHARE
($10.47 + 96.5%) RETAIL CLASS B $ 10.85
---------
---------
</TABLE>
- --------------------------------------------------------------------------------
AMBAC-AMERICAN MUNICIPAL BOND ASSURANCE COMPANY

CGIC-CAPITAL GUARANTY INSURANCE CORPORATION

FGIC-FEDERAL GUARANTY INSURANCE CORPORATION

FSA-FINANCIAL SECURITY ASSURANCE

GNMA-GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

GO-GENERAL OBLIGATION

MBIA-MUNICIPAL BOND INSURANCE ASSOCIATION

RB-REVENUE BOND

SER-SERIES
<PAGE>

FOR THE PERIOD ENDED DECEMBER 31, 1995 BISHOP STREET FUNDS

STATEMENT OF OPERATIONS (000)

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
MONEY MARKET HAWAII MUNICIPAL BOND
FUND(1) FUND(2)
------------ ----------------
------------ ----------------
<S> <C> <C>
INTEREST INCOME: $15,991 $422
------- ----
EXPENSES:

Investment Adviser Fee 800 27
Investment Adviser Fee Waiver (423) (27)
Reimbursement by Investment Adviser -- (23)
Management Fee 533 15
Management Fee Waiver -- (15)
Custody Fees 133 4
Transfer Agent Fees & Expenses 49 26
Professional Fees 55 2
Registration Fees 106 5
Distribution Fee (+) 1 --
Trustees Fees 45 1
Miscellaneous Expenses 30 3
Amortization of Deferred Organizational Costs 5 5
------- ----
Total Expenses 1,334 23
------- ----
Net Investment Income 14,657 399
------- ----

Net Realized Gain on Investments 4 41
Change in Unrealized Appreciation on Investments -- 487
------- ----
Net Realized and Unrealized Gain on Investments 4 528
------- ----

Increase in Net Assets Resulting from Operations $14,661 $927
------- ----
------- ----
</TABLE>

AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(+) ALL DISTRIBUTION FEES ARE INCURRED IN THE RETAIL CLASS B.

(1) COMMENCED OPERATIONS ON JANUARY 30, 1995.

(2) COMMENCED OPERATIONS ON FEBRUARY 15, 1995.

<PAGE>

BISHOP STREET FUNDS
STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
MONEY MARKET
FUND
------------
------------
01/30/95 (1)
to 12/31/95
------------
<S> <C>
INVESTMENT ACTIVITIES:
Net Investment Income $ 14,657
Net Realized Gain on Investments 4
--------
Increase in Net Assets Resulting From Operations 14,661
--------
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Institutional Class A (14,594)
Retail Class B (63)
-------
Total Distributions (14,657)
-------
Change in Net Assets 4
-------
CAPITAL SHARE TRANSACTIONS: (ALL AT $1.00 PER SHARE)
Institutional Class A Shares:
Shares Issued 752,769
Shares Issued in Lieu of Cash Distributions 6
Shares Redeemed (447,659)
-------
Total Institutional Capital Share Transactions 305,116
Retail Class B Shares:
Shares Issued 5,529
Shares Issued in Lieu of Cash Distributions 59
Shares Redeemed (1,930)
-------
Total Investment Capital Share Transactions 3,658
-------
Net Increase in Net Assets From Share Transactions 308,774
-------
Total Increase in Net Assets 308,778
NET ASSETS:

Beginning of Period --
-------
End of Period $308,778
-------
-------
</TABLE>

AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) COMMENCED OPERATIONS ON JANUARY 30, 1995.

<PAGE>

BISHOP STREET FUNDS

STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------

HAWAII MUNICIPAL BOND
FUND
------------------
------------------
02/15/95 (1)
to 12/31/95
------------------
<S> <C>
INVESTMENT ACTIVITIES:
Net Investment Income $ 399
Net Realized Gain on Investments 41
Change in Unrealized Appreciation on Investments 487
-------
Increase in Net Assets Resulting From Operations 927
-------
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Institutional Class A Shares (221)
Retail Class B Shares (178)
-------
Total Distributions (399)
-------
Change in Net Assets 528
-------
CAPITAL SHARE TRANSACTIONS:
Institutional Class A Shares:
Shares Issued 9,397
Shares Issued in Lieu of Cash Distributions 97
Shares Redeemed (381)
-------
Total Institutional Capital Share Transactions 9,113
Retail Class B Shares:
Shares Issued 6,868
Shares Issued in Lieu of Cash Distributions 120
Shares Redeemed (516)
-------
Total Investment Capital Share Transactions 6,472
-------
Net Increase in Net Assets From Capital Share Transactions 15,585
-------
Total Increase in Net Assets 16,113
NET ASSETS:
Beginning of Period --
-------
End of Period $16,113
-------
-------
CAPITAL SHARE TRANSACTIONS:
Institutional Class A Shares:
Shares Issued 927
Shares Issued in Lieu of Cash Distributions 9
Shares Redeemed (37)
-------
Total Institutional Capital Share Transactions 899
-------
Retail Class B Shares:
Shares Issued 679
Shares Issued in Lieu of Cash Distributions 12
Shares Redeemed (51)
-------
Total Investment Capital Share Transactions 640
-------
Net Increase in Capital Shares 1,539
-------
-------
</TABLE>

AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) COMMENCED OPERATIONS ON FEBRUARY 15, 1995.

<PAGE>

BISHOP STREET FUNDS
FINANCIAL HIGHLIGHTS

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------- -------------------
NET
NET REALIZED NET NET
ASSET AND ASSET ASSETS,
VALUE, NET UNREALIZED NET VALUE, END OF
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT CAPITAL END OF TOTAL PERIOD
OF PERIOD INCOME INVESTMENTS INCOME GAINS PERIOD RETURN (000)
--------- ----------- ----------- ---------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------
MONEY MARKET FUND
- -----------------
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED DECEMBER 31,
1995(1): 1.00 0.051 -- (0.051) -- 1.00 5.67%* $305,120
RETAIL CLASS B
FOR THE PERIOD ENDED DECEMBER 31,
1995(2): 1.00 0.047 -- (0.047) -- 1.00 5.55%* $ 3,658
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED DECEMBER 31,
1995(3): 10.00 0.451 0.473 (0.452) -- 10.47 10.91%* $ 9,411
RETAIL CLASS B**
FOR THE PERIOD ENDED DECEMBER 31,
1995(4): 10.00 0.453 0.472 (0.451) -- 10.47 10.85%* $ 6,702

RATIO OF NET
RATIO OF INVESTMENT
RATIO OF EXPENSES TO RATIO OF INCOME TO
EXPENSES AVERAGE NET AVERAGE
TO NET ASSETS INVESTMENT NET ASSETS
AVERAGE EXCLUDING FEE INCOME TO EXCLUDING FEE PORTFOLIO
NET WAIVERS AND AVERAGE WAIVERS AND TURNOVER
ASSETS REIMBURSEMENTS NET ASSETS REIMBURSEMENTS RATE
-------- -------------- ----------- -------------- --------
<S> <C> <C> <C> <C> <C>
- -----------------
MONEY MARKET FUND
- -----------------
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED DECEMBER 31,
1995(1): 0.50%* 0.66%* 5.50%* 5.34%* --
RETAIL CLASS B
FOR THE PERIOD ENDED DECEMBER 31,
1995(2): 0.60%* 0.76%* 5.26%* 5.10%* --
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED DECEMBER 31,
1995(3): 0.27%* 1.10%* 5.24%* 4.40%* 68%
RETAIL CLASS B**
FOR THE PERIOD ENDED DECEMBER 31,
1995(4): 0.33%* 1.45%* 5.14%* 4.02%* 68%
</TABLE>

AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED
** TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE.
(1) COMMENCED OPERATIONS ON JANUARY 30, 1995.
(2) COMMENCED OPERATIONS ON FEBRUARY 17, 1995.
(3) COMMENCED OPERATIONS ON FEBRUARY 16, 1995.
(4) COMMENCED OPERATIONS ON FEBRUARY 15, 1995.

<PAGE>

DECEMBER 31, 1995 BISHOP STREET FUNDS

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The Bishop Street Funds (the "Trust") are registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Bishop Street Funds consists of a series of four funds (the "Funds") which
includes the High Grade Income Fund, Hawaii Municipal Bond Fund (formerly Hawaii
Tax-Free Fund), Equity Fund and the Money Market Fund. Effective 1/29/96, the
Hawaii Tax Free Bond Fund officially changed its name to the Hawaii Municipal
Bond Fund. The Bishop Street Funds Declaration of Trust permits the Trust to
offer separate portfolios of shares and different classes of each portfolio. The
assets of each Fund are segregated, and a shareholder's interest is limited to
the Fund in which shares are held. Each Fund, with the exception of the High
Grade Income Fund and Equity Fund, has commenced operations prior to December
31, 1995. This report pertains only to the Hawaii Municipal Bond Fund and Money
Market Fund.

2. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The following is a summary of significant accounting policies followed by the
Trust.

SECURITY VALUATION -- Investment securities held by the Money Market Fund are
stated at amortized cost, which approximates market value. Under this valuation
method, purchase discounts and premiums are accreted and amortized ratably to
maturity and are included in interest income.

Debt obligations exceeding sixty days to maturity for which market quotations
are readily available are valued at the most recently quoted bid price. Debt
obligations with sixty days or less remaining until maturity may be valued at
their amortized cost. Restricted securities for which quotations are not readily
available are valued at fair value using methods determined in good faith under
general Trustee supervision.

SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining net realized capital gains and losses on the sale of
securities are those of the specific securities sold adjusted for the accretion
and amortization of the purchase discounts and premiums during the respective
holding periods. Interest income is recorded on the accrual basis.

DISCOUNTS AND PREMIUMS -- Discounts and premiums are accreted or amortized over
the life of each security and are recorded as interest income for each of the
Funds using a method which approximates the effective interest method.

REPURCHASE AGREEMENTS -- Securities pledged as collateral for Repurchase
Agreements are held by the custodian bank until the respective agreements
mature. Provisions of repurchase agreements and procedures adopted by the
Adviser ensure that the market value of the collateral is sufficient in the
event of default by the counterparty. If the counterparty defaults and the value
of the collateral declines or if the counterparty enters an insolvency
proceeding, realization of the collateral by the Fund may be delayed or limited.

<PAGE>

BISHOP STREET FUNDS

CLASSES -- Class specific expenses are borne by that class. Income, nonclass
specific expenses and realized/unrealized gains and losses are allocated to the
respective classes on the basis of the relative daily net assets.

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

DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income are
declared daily and paid on a monthly basis for the Hawaii Municipal Bond Fund
and the Money Market Fund. Any net realized capital gains will be distributed at
least annually for all Funds.

FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a regulated
investment company for Federal income tax purposes and to distribute all of its
taxable income and net capital gains. Accordingly, no provision for Federal
income taxes is required.

ORGANIZATION COSTS -- Organization costs of approximately $121,000 have been
capitalized by the Funds and are being amortized over sixty months commencing
with operations. In the event any of the initial shares are redeemed by any
holder thereof during the period that the fund is amortizing its organization
costs, the redemption proceeds payable to the holder thereof by the Fund will be
reduced by the unamortized organization costs in the same ratio as the number of
initial shares being redeemed bears to the number of initial shares outstanding
at the time of the redemption.

MANAGEMENT -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

3. INVESTMENT ADVISORY AGREEMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Investment advisory services are provided to the Funds by First Hawaiian
Bank. (the "Adviser"). The Adviser is entitled to receive an annual fee of 0.30%
of the average daily net assets of the Money Market Fund and 0.35% of the
average daily net assets of the Hawaii Municipal Bond Fund. The Adviser has
voluntarily agreed for an indefinite period of time to waive a portion of its
fee in the Money Market Fund in order to limit the operating expenses of the
Fund to .50%. In addition, for the period February 15, 1995 to June 29, 1995,
the Adviser had waived a portion of its fee in the Hawaii Municipal Bond Fund in
order to limit the operating expense of the Fund to .65%. Commencing June 30,
1995, the Adviser agreed to voluntarily waive its fee and reimburse the Hawaii
Municipal Bond Fund in order to limit operating expenses to .21% on an annual
basis.

<PAGE>

BISHOP STREET FUNDS

Wellington Management Company (The "Sub-Adviser") serves as the investment
sub-adviser for the Money Market Fund pursuant to a sub-adviser agreement. The
Sub-Adviser is entitled to receive from the Adviser a fee, computed daily and
paid monthly, at the annual rate of .075% of the average daily net assets of the
Fund up to $500 million and .020% of the average daily net assets of the Fund in
excess of $500 million.

4. ADMINISTRATIVE, TRANSFER AGENT AND DISTRIBUTION SERVICES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Pursuant to an administration agreement dated January 27, 1995, (the
"Agreement") SEI Financial Management Corporation ("SFM"), a wholly owned
subsidiary of SEI Corporation ("SEI"), acts as the Trust's Administrator. Under
the terms of the Agreement, SFM is entitled to receive an annual fee of 0.20% of
the average daily net assets of each Fund. SFM has voluntarily agreed to waive a
portion of its fee for the Hawaii Municipal Bond Fund in order to limit
operating expenses.

Pursuant to an agreement dated January 30, 1995, DST Systems, Inc. ("DST")
acts as the Transfer Agent of the Trust. As such, DST provides transfer agency,
dividend disbursing and shareholder services to the Trust.

SEI Financial Services Company ("SFS"), wholly owned subsidiary of SEI, acts
as the Trust's Distributor pursuant to a distribution agreement dated January
27, 1995. The Retail Class B shares of the Trust have a Rule 12b-1 Distribution
Plan under which such shares of the Funds bear distribution expenses and related
service fees at the annual rate of .10% and .25% of their average daily net
assets for the Money Market Fund and Hawaii Municipal Bond Fund, respectively.
SFS has voluntarily agreed to waive a portion of the distribution charge for the
Hawaii Municipal Bond Fund in order to limit operating expenses for the Retail
Class B shares.

Certain officers of the Trust are also officers of the Administrator. Such
officers are paid no fees by the Trust.

<PAGE>

BISHOP STREET FUNDS

5. INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The cost of security purchases and the proceeds from the sale of securities,
other than temporary cash investments for the period ended December 31, 1995 are
presented below for the Hawaii Municipal Bond Fund.

FUND INVESTMENT TRANSACTIONS
HAWAII MUNICIPAL BOND
FUND
---------------------
---------------------

Purchases
U.S. Government Securities $ --
Other 20,601,444
Sales
U.S. Government Securities $ --
Other 5,722,438

At December 31, 1995 the total cost of securities and the net realized gains
and losses on securities sold for federal income tax purposes were not
materially different from amounts reported for financial reporting purposes. The
aggregate unrealized appreciation/depreciation on securities at December 31,
1995 for the Hawaii Municipal Bond Fund is as follows:

Gross Unrealized Appreciation $2,124,456
Gross Unrealized Depreciation (1,637,296)
----------
Net Unrealized Appreciation $ 487,160
----------
----------

<PAGE>

BISHOP STREET FUNDS

6. CONCENTRATION OF CREDIT RISK (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The Hawaii Tax-Free 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. At December 31, 1995, the percentage of the
fund investments by each revenue source was as follows:

HAWAII MUNICIPAL BOND
FUND
---------------------
---------------------

Cash Equivalents 1%
Education Bonds 6%
General Obligation Bonds 20%
Hospital Bonds 9%
Housing Bonds 18%
Mortgage Revenue Bond 2%
Public Facility Bonds 4%
Transportation Bonds 22%
Utility Bonds 15%
Other 3%
-----
100%
-----
-----

The ratings of long-term debt holdings as a percentage of total value of
investments at December 31, 1995 are as follows:

HAWAII MUNICIPAL BOND
STANDARD & POOR'S RATING FUND
------------------------ ---------------------
------------------------ ---------------------
AAA 65%
AA 14%
A+ 1%
A 14%
A- 2%
BBB+ 3%
Not Rated 1%
-----
100%
-----
-----

<PAGE>

BISHOP STREET FUNDS

REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF BISHOP STREET FUNDS:

We have audited the accompanying statements of net assets of the Money Market
Fund and Hawaii Municipal Bond Fund as of December 31, 1995, and the related
statements of operations, the statements of changes in net assets, and the
financial highlights for the period from January 30, 1995 (commencement of
operations) through December 31, 1995 for the Money Market Fund, and for the
period from February 15, 1995 (commencement of operations) through December 31,
1995, for the Hawaii Municipal Bond Fund. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included physical inspection and confirmation of
investments held by the custodian as of December 31, 1995. An audit also
includes assessing the accounting principles used and significant estimates used
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Money Market Fund and the Hawaii Municipal Bond Fund, as of December 31, 1995,
the results of their operations, the changes in their net assets, and the
financial highlights for the period from January 30, 1995 (commencement of
operations) through December 31, 1995 for the Money Market Fund, and for the
period from February 15, 1995 (commencement of operations) through December 31,
1995 for the Hawaii Municipal Bond Fund, in conformity with generally accepted
accounting principles.

/s/ Coopers & Lybrand L.L.P.

COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, PA
February 16, 1996

<PAGE>

APPENDIX

DESCRIPTION OF COMMERCIAL PAPER RATINGS

The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, Inc. ("Fitch"), Duff & Phelps, Inc.
("Duff") and IBCA Limited and IBCA, Inc. (together, "IBCA").

Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1, 1+ and 2, to indicate the relative degree of safety. Issues rated
A-1+ are those with an "overwhelming degree" of credit protection. Those rated
A-1 reflect a "very strong" degree of safety regarding timely payment. Those
rated A-2 reflect a safety regarding timely payment but not as high as A-1.

Commercial paper issues rated Prime-1 or Prime-2 by Moody's are judged by
Moody's to be of the "highest" quality and "higher" quality respectively on the
basis of relative repayment capacity.

The rating Fitch-1 (Highest Grade) is the highest commercial rating assigned by
Fitch. Paper rated Fitch-1 is regarded as having the strongest degree of
assurance for timely payment. The rating Fitch-2 (Very Good Grade) is the
second highest commercial paper rating assigned by Fitch which reflects an
assurance of timely payment only slightly less in degree than the strongest
issues.

Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors which are supported by good fundamental
protection factors. Risk factors are minor. Ratings of Duff-1 are further
refined by the gradations of "1+" and "1-." Issues rated Duff-1+ have the
highest certainty of timely payment, outstanding short term liquidity, and
safety just below risk-free U.S. Treasury short-term obligations. Issues rated
Duff-1- have high certainty of timely payment, strong liquidity factors
supported by good fundamental protection factors, and small risk factors. Paper
rated Duff-2 is regarded as having good certainty of timely payment, good access
to capital markets and sound liquidity factors and company fundamentals. Risk
factors are small.

The designation A1 by IBCA indicates that the obligation is supported by a very
strong capacity for timely repayment. Those obligations rated A1+ are supported
by the highest capacity for timely repayment. Obligations rated A2 are
supported by a strong capacity for timely repayment, although such capacity may
be susceptible to adverse changes in business, economic or financial conditions.

S-30
<PAGE>

DESCRIPTION OF CORPORATE BOND RATINGS

The following descriptions of corporate bond ratings have been published by S&P,
Moody's, Fitch, Duff and IBCA.

Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such
a rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA by S&P also qualify as high-quality debt obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree. Debt rated A by S&P has a
strong capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.

Bonds which are rated BBB by S&P are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.

Bonds which are rated A by Moody's possess many favorable investment attributes
and are to be considered as upper-medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Debt rated Baa by Moody's is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade, broadly
marketable, suitable for investment by trustees and fiduciary institutions
liable to but slight market fluctuation other than through changes in the money
rate. The prime feature of an AAA bond is a showing of earnings several times
or many times interest requirements, with such stability

S-31
<PAGE>

of applicable earnings that safety is beyond reasonable question whatever
changes occur in conditions. Bonds rated AA by Fitch are judged by Fitch to be
of safety virtually beyond question and are readily salable, whose merits are
not unlike those of the AAA class, but whose margin of safety is less strikingly
broad. The issue may be the obligation of a small company, strongly secured but
influenced as to rating by the lesser financial power of the enterprise and more
local type market. Bonds rated A by Fitch are considered to be investment grade
and of high credit quality. The obligor's ability to pay interest and repay
principal is considered to be strong, but may be more vulnerable to adverse
changes in economic conditions and circumstances than bonds with higher ratings.
Bonds rated BBB by Fitch are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.

Bonds rated AAA by Duff are judged by Duff to be of the highest credit quality,
with negligible risk factors being only slightly more than for risk-free U.S.
Treasury debt. Bonds rated AA by Duff are judged by Duff to be of high credit
quality with strong protection factors and risk that is modest but that may vary
slightly from time to time because of economic conditions. Bonds rated A by
Duff are judged by Duff to have average but adequate protection factors.
However, risk factors are more variable and greater in periods of economic
stress. Bonds rated BBB by Duff are judged by Duff as having below average
protection factors but still considered sufficient for prudent investment, with
considerable variability in risk during economic cycles.

Obligations rated AAA by IBCA have the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial, such
that adverse changes in business, economic or financial conditions are unlikely
to increase investment risk significantly. Obligations for which there is a
very low expectation of investment risk are rated AA by IBCA. Capacity for
timely repayment of principal and interest is substantial. Adverse changes in
business, economic or financial conditions may increase investment risk albeit
not very significantly. Obligations for which there is a low expectation on
investment risk are rated A by IBCA. Capacity for timely repayment of principal
and interest is strong, although adverse changes in business, economic or
financial conditions may lead to increased investment risk. Obligations for
which there is currently a low expectation of investment risk are rated BBB by
IBCA. Capacity for timely repayment of principal and interest is adequate,
although adverse changes in business, economic or financial conditions are more
likely to lead to increased investment risk than for obligations in higher
categories.

S-32

<PAGE>

BISHOP STREET FUNDS
PART C: OTHER INFORMATION
POST-EFFECTIVE AMENDMENT NO. 3

Item 24. Financial Statements and Exhibits:

(a) Financial Statements
Audited Financial Statements for the Fiscal Year ending December 31, 1995
for the Money Market Fund, Hawaii Municipal Bond Fund, High Grade Income
Fund and Equity Fund
Statement of Net Assets as of December 31, 1995
Statement of Operations for the period ended December 31, 1995
Statement of Changes in Net Assets as of December 31, 1995
Financial Highlights for the period ended December 31, 1995
Notes to Financial Statements
Report of Independent Accountants

(b) Additional Exhibits
1 Agreement and Declaration of Trust of the Registrant, filed herewith
1(a) Amended and Restated Agreement and Declaration of Trust, filed
herewith
2 By-Laws of the Registrant, filed herewith
2(a) Amended By-Laws of the Registrant, filed herewith
5(a) Investment Advisory Agreement between the Registrant and First
Hawaiian Bank, filed herewith
5(b) Investment Sub-Advisory Agreement by and among the Registrant, First
Hawaiian Bank and Wellington Management Company, filed herewith
5(c) Form of amended Investment Sub-Advisory Agreement by and among the
Registrant, First Hawaiian Bank and Wellington Management company,
filed herewith
6 Distribution Agreement between the Registrant and SEI Financial
Services Company, filed herewith
8 Custodian Agreement between the Registrant and Chemical Bank, N.A.,
filed herewith
9(a) Administration Agreement between the Registrant and SEI Financial
Management Corporation, filed herewith
9(b) Transfer Agent Agreement between the Registrant and Supervised Service
Company, filed herewith
10 Opinion and Consent of Counsel, filed herewith
11 Consent of Independent Public Accountants, filed herewith
15 12b-1 Plan, filed herewith
16 Performance Calculations, filed herewith
18 Rule 18f-3 Plan, filed herewith
27 Financial Data Schedules, filed herewith

C-1

<PAGE>

Item 25. Persons Controlled by or under Common Control with Registrant

See the Prospectuses and the Statement of Additional Information regarding
the Registrant's control relationships. The Administrator is a subsidiary of
SEI Corporation, which also controls the distributor of the Registrant, SEI
Financial Services Company, other corporations engaged in providing various
financial and record keeping services, primarily to bank trust departments,
pension plan sponsors, and investment managers.

Item 26. Number of Holders of Securities

The number of record holders of each class as of February 5, 1996:

Number of
Title of Class Record Holders
-------------- --------------

INSTITUTIONAL CLASS A
Bishop Street High Grade Income Fund 0
Bishop Street Hawaii Municipal Bond Fund 7
Bishop Street Equity Fund 0
Bishop Street Money Market Fund 7
Bishop Street Treasury Money Market Fund 0

RETAIL CLASS B
Bishop Street High Grade Income Fund 0
Bishop Street Hawaii Municipal Bond Fund 282
Bishop Street Equity Fund 0
Bishop Street Money Market Fund 59
Bishop Street Treasury Money Market Fund 0

Item 27. Indemnification:

Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification liabilities arising under the Securities Act of 1933, as
amended, may be permitted to trustees, directors, officers and controlling
persons of the Registrant by the Registrant pursuant to the Declaration of Trust
or otherwise, the Registrant is aware that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and, therefore, is unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the

C-2

<PAGE>

shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issues.

Item 28. Business and Other Connections of Investment Adviser and Investment
Sub-Adviser:

Other business, profession, vocation, or employment of a substantial nature
in which each director or principal executive officer of the Adviser is or has
been, at any time during the last two fiscal years, engaged for his own account
or in the capacity of director, officer, employee, partner or trustee are as
follows:

FIRST HAWAIIAN BANK

Name and Position Name of Connection with
with Investment Adviser Other Company Other Company
- ----------------------- ------------- -------------

John W.A. Buyers C. Brewer & Co., Ltd. Chairman and Chief
Director Executive Officer

Albert C.K. Chun-Hoon -- Orthopedic Surgeon
Director

John C. Couch Alexander & Baldwin, President and Chief
Director Inc. Executive Officer

Walter A. Dods, Jr. First Hawaiian, Inc. Chairman and Chief
Director, Chairman and Executive Officer
Chief Executive Officer

Dr. Julia Ann Frohlich Blood Bank of Hawaii President
Director

Paul Mullin Ganley Estate of S.M. Damon Trustee
Director Carlsmith, Ball, Partner
Wichman, Murray, Case
& Ichiki

David M. Haig Estate of S.M. Damon Trustee
Director

Warren H. Haruki GTE Hawaiian Tel President
Director

C-3

<PAGE>

Name and Position Name of Connection with
with Investment Adviser Other Company Other Company
- ----------------------- ------------- -------------

Howard K. Hiroki Coopers & Lybrand Partner (retired)
Director

John A. Hoag First Hawaiian, Inc. President
Director, President

Glenn A. Kaya Gem of Hawaii, Inc. President
Director

Dr. Richard R. Kelley Outrigger Hotels Hawaii Chairman and Chief
Director Executive Officer

Bert T. Kobayashi, Jr. Kobayashi, Sugita & Goda Principal
Director

Dr. Richard T. Mamiya Richard Mamiya, M.D., Heart Surgeon
Director Inc.

Dr. Fujio Matsuda The Research Corp. of Executive Director
Director the University of Hawaii

Dr. Roderick F. McPhee Punahou School President
Director

Robert J. Pfeiffer Alexander & Baldwin, Chairman of the Board
Director Inc.

Hugh R. Pingree -- Retired
Director

David W. Pratt Grove Farm Company, President and Chief
Director Inc. Executive Officer

Robert G. Reed, III Pacific Resources, Inc. Chairman, President
Director and Chief Executive
Officer (retired)

George P. Shea, Jr. First Insurance Company Chairman, President
Director of Hawaii, Ltd. and Chief Executive
Officer

R. Dwayne Steele Grace Pacific Chairman
Director Corporation

C-4

<PAGE>

Name and Position Name of Connection with
with Investment Adviser Other Company Other Company
- ----------------------- ------------- -------------

Laurence Vogel -- Royal Danish Consul
Director

Gen. Fred C. Weyand Estate of S.M. Damon Trustee
Director

James C. Wo Bojim Investments Chairman and Chief
Director Executive Officer
BJ Management Corp. Vice President and
Treasurer

Robert C. Wo BJ Management Corp. President and Secretary
Director C.S. Wo & Sons, Ltd. Chairman

Lily K. Yao Pioneer Federal Savings President and Chief
Director Bank Executive Officer

Howard H. Karr -- --
Vice Chairman and Chief
Financial Officer

Philip H. Ching -- --
Vice Chairman

Donald G. Horner -- --
Executive Vice President

Kenneth J. Bentley -- --
Executive Vice President

Anthony R. Guerrero, Jr. -- --
Executive Vice President

Norwood W. Pope -- --
Executive Vice President

Harriet M. Aoki -- --
Senior Vice President

Thomas P. Huber -- --
Senior Vice President and
General Counsel

C-5

<PAGE>

Name and Position Name of Connection with
with Investment Adviser Other Company Other Company
- ----------------------- ------------- -------------

Gary K. Kai -- --
Senior Vice President

WELLINGTON MANAGEMENT COMPANY

The list required by this Item 28 of officers and directors of Wellington
Management, together with information as to any other business, profession,
vocation or employment of a substantial nature engaged in by such officers and
directors during the past two years, is incorporated by reference to Schedules A
and D of Form ADV, filed by Wellington Management pursuant to the Investment
Advisers Act of 1940 (SEC File No. 801-15908).

Item 29. Principal Underwriter:

(a) Furnish the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing securities of the
Registrant also acts as a principal underwriter, distributor or investment
adviser.

Registrant's distributor, SEI Financial Services Company ("SFS"), acts as
distributor for:

SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds-Registered Trademark- August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
Inventor Funds, Inc. August 1, 1994
The Achievement Funds Trust December 27, 1994
Insurance Investment Products Trust December 30, 1994

C-6

<PAGE>

CrestFunds, Inc. March 1, 1995
Conestoga Family of Funds May 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996

SFS provides numerous financial services to investment managers, pension
plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services
("Funds Evaluation") and automated execution, clearing and settlement of
securities transactions ("MarketLink").

(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in
the answer to Item 21 of Part B. Unless otherwise noted, the business
address of each director or officer is 680 East Swedesford Road, Wayne,
Pennsylvania 19087.

Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & Treasurer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Charles A. Marsh Executive Vice President-Capital Resources Division --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
David G. Lee Senior Vice President President & Chief Executive
Officer
William Madden Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, General Counsel & Vice President & Assistant
Secretary Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Crudup Managing Director --
Vic Galef Managing Director --
Kim Kirk Managing Director --
John Krzeminski Managing Director --
Carolyn McLaurin Managing Director --
Barbara Moore Managing Director --
Donald Pepin Managing Director --
Mark Samuels Managing Director --

C-7

<PAGE>

Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Wayne M. Withrow Managing Director --
Mick Duncan Team Leader --
Robert Ludwig Team Leader --
Vicki Malloy Team Leader --
Robert Aller Vice President --
C. Tony Baker Vice President --
Steve Bendinelli Vice President --
Cris Brookmyer Vice President & Controller --
Gordon W. Carpenter Vice President --
Robert B. Carroll Vice President & Assistant Secretary Vice President & Assistant
Secretary
Todd Cipperman Vice President & Assistant Secretary Vice President & Assistant
Secretary
Ed Daly Vice President --
Jeff Drennen Vice President --
Lucinda Duncalfe Vice President --
Kathy Heilig Vice President --
Larry Hutchison Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Donald H. Korytowski Vice President --
Jack May Vice President --
Sandra K. Orlow Vice President & Assistant Secretary Vice President & Assistant
Secretary
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President & Assistant
Secretary
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>

Item 30. Location of Accounts and Records:

Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:

(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6);
(8); (12); and 31a-1(d), the required books and records will be maintained
at the offices of Registrant's Custodian:

Chemical Bank
4 New York Plaza
New York, New York 10004

C-8

<PAGE>

(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and (D);
(4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and
records are maintained at the offices of Registrant's Administrator:

SEI Financial Management Corporation
680 East Swedesford Road
Wayne, Pennsylvania 19087

(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f), the
required books and records are maintained at the principal offices of the
Registrant's Adviser and Sub-Adviser:

First Hawaiian Bank Wellington Management Company
1132 Bishop Street 75 State Street
17th Floor Boston, Massachusetts 02109
Honolulu, Hawaii 96813

Item 31. Management Services: None.

Item 32. Undertakings:

Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Trustees of their desire to communicate with Shareholders of the Trust,
the Trustees will inform such Shareholders as to the approximate number of
Shareholders of record and the approximate costs of mailing or afford said
Shareholders access to a list of Shareholders.

Registrant hereby undertakes to call a meeting of Shareholders for the
purpose of voting upon the question of removal of a Trustee(s) when requested in
writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with such meetings to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940 relating to Shareholder
communications.

Registrant hereby undertakes to file a post-effective amendment, including
financial statements which need not be audited, within 4-6 months from the
effective date of this Post-Effective Amendment No. 2.

C-9

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
No. 3 to Registration Statement No. 33-80514 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wayne, Commonwealth of
Pennsylvania on the 28th day of February, 1996.

By: /s/ David G. Lee
-----------------------------------------
David G. Lee,
President and Chief
Executive Officer
ATTEST:

/s/ Jeffrey A. Cohen
- ------------------------------------
Jeffrey A. Cohen,
Controller and Chief
Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacity on the dates indicated.

Trustee February 28, 1996
- ----------------------------
Martin Anderson

Trustee February 28, 1996
- ----------------------------
Philip H. Ching

Trustee February 28, 1996
- ----------------------------
Shunichi Kimura

Trustee February 28, 1996
- ----------------------------
William S. Richardson

Trustee February 28, 1996
- ----------------------------
Manuel R. Sylvester

Trustee February 28, 1996
- ----------------------------
Joyce S. Tsunoda

/s/ David G. Lee President and February 28, 1996
- ---------------------------- Chief Executive
David G. Lee Officer

/s/ Jeffrey A. Cohen Controller and February 28, 1996
- ---------------------------- Chief Financial
Jeffrey A. Cohen Officer

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
No. 3 to Registration Statement No. 33-80514 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Honolulu, State of Hawaii
on the 28th day of February, 1996.

By:
--------------------------------------
David G. Lee,
President and Chief
Executive Officer

ATTEST:

- --------------------------------
Jeffrey A. Cohen,
Controller and Chief
Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacity on the dates indicated.

/s/ Martin Anderson Trustee February 28, 1996
- ----------------------------
Martin Anderson

/s/ Philip H. Ching Trustee February 28, 1996
- ----------------------------
Philip H. Ching

/s/ Shunichi Kimura Trustee February 28, 1996
- ----------------------------
Shunichi Kimura

/s/ William S. Richardson Trustee February 28, 1996
- ----------------------------
William S. Richardson

/s/ Manuel R. Sylvester Trustee February 28, 1996
- ----------------------------
Manuel R. Sylvester

/s/ Joyce S. Tsunoda Trustee February 28, 1996
- ----------------------------
Joyce S. Tsunoda

President and February 28, 1996
- ---------------------------- Chief Executive
David G. Lee Officer

Controller and February 28, 1996
- ---------------------------- Chief Financial
Jeffrey A. Cohen Officer

<PAGE>

EXHIBIT INDEX

Name Exhibit
- ---- -------

Agreement and Declaration of Trust of the EX-99.B1
Registrant, dated May 25, 1994, filed herewith

Amended and Restated Agreement and Declaration EX-99.B1(a)
of Trust, filed herewith

By-Laws of the Registrant, filed herewith EX-99.B2

Amended By-Laws of the Registrant, filed herewith EX-99.B2(a)

Investment Advisory Agreement between the EX-99.B5(a)
Registrant and First Hawaiian Bank, filed herewith

Investment Sub-Advisory Agreement by and among the EX-99.B5(b)
Registrant, First Hawaiian Bank and Wellington
Management Company, filed herewith

Form of amended Investment Sub-Advisory Agreement EX-99.B5(c)
by and among the Registrant, First Hawaiian Bank and
Wellington Management Company, filed herewith

Distribution Agreement between the EX-99.B6
Registrant and SEI Financial Services Company,
filed herewith

Custodian Agreement between the Registrant EX-99.B8
and Chemical Bank, N.A., filed herewith

Administration Agreement between the EX-99.B9(a)
Registrant and SEI Financial Management
Corporation, filed herewith

Transfer Agent Agreement between the EX-99.B9(b)
Registrant and Supervised Service Company,
filed herewith

Opinion and Consent of Counsel, filed herewith EX-99.B10

Consent of Independent Public Accountants,
filed herewith EX-99.B11

12b-1 Plan, filed herewith EX-99.B15

Performance Calculations, filed herewith EX-99.B16

Rule 18f-3 Plan, filed herewith EX-99.B18

Financial Data Schedules, filed herewith EX-27.1-4

<PAGE>

BISHOP STREET FUNDS

AGREEMENT AND DECLARATION OF TRUST

AGREEMENT AND DECLARATION OF TRUST dated as of the 25th day of May, 1994,
by David G. Lee, the Trustee hereunder, and by the holders of Shares of
beneficial interest to be issued hereunder as hereinafter provided.

WITNESSETH that

WHEREAS, this Trust has been formed to carry on the business of an
investment company; and

WHEREAS, the Trustee and any successor Trustees elected in accordance with
Article IV hereof have agreed to manage all property coming into their hands as
trustees of a Massachusetts voluntary association with transferable Shares in
accordance with the provisions hereinafter set forth.

NOW, THEREFORE, the Trustee and any successor Trustees elected in
accordance with Article IV hereof hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same for the
pro rata benefit of the holders from time to time of Shares in this Trust issued
hereunder on the terms and conditions hereinafter set forth.

ARTICLE I
NAME, PRINCIPAL PLACE OF BUSINESS AND RESIDENT AGENT, AND DEFINITIONS

NAME

SECTION 1. This Trust shall be known as the BISHOP STREET FUNDS, and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.

PRINCIPAL PLACE OF BUSINESS AND RESIDENT AGENT

SECTION 2. The principal place of business of the Trust is 2 Oliver
Street, Boston, Massachusetts 02109. The name of the Trust's resident agent in
the Commonwealth of Massachusetts is CT Corporation System at 2 Oliver Street,
Boston, Massachusetts 02109.

<PAGE>

DEFINITIONS

SECTION 3. Whenever used herein, unless otherwise required by the context
or specifically provided:

(a) The "Trust" refers to the Bishop Street Funds, the trust created
hereby.

(b) "Trustee" or "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV hereof and then in
office.

(c) "Shares" refers to units of beneficial interest in the assets of the
Trust, when used in relation to any particular series established by
the Trustees hereunder refers to units of beneficial interest in the
assets specifically allocated to that series, and includes fractional
as well as whole Shares.

(d) "Shareholder" means a record owner of Shares.

(e) "Affiliated Person," "Assignment," "Commission," "Interested Person,"
and "Principal Underwriter" shall have the meanings given them in the
1940 Act.

(f) "Majority Shareholder Vote" shall have the same meaning as "vote of a
majority of the outstanding voting securities" as that phrase is
defined in the 1940 Act, except that such term may be used herein with
respect to the Shares of the Trust as a whole or the Shares of a
particular series, as the context may require.

(g) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time, provided that
reference made in this Agreement and Declaration of Trust to "hereby,"
"hereof," "herein," "hereunder" or similar terms shall be deemed to
refer to this Declaration of Trust rather than the Article or Section
in which such words appear, unless the context otherwise requires.

(h) "By-Laws" shall mean the By-Laws of the Trust referred to in Article
IV, Section 3 hereof, as amended from time to time.

(i) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time.

(j) "Disinterested Trustees" shall mean Trustees who are not "interested
persons" as such term is defined in the 1940 Act (including any
Trustee who has been exempted from being an "interested person" by any
rule, regulation or order of the Commission). In limitation of the
foregoing, however, as used in Article VIII hereof, a "Disinterested
Trustee" shall mean a Disinterested Trustee against whom, at the time
of the votes to be taken pursuant to said Article VIII, none of the

<PAGE>

actions, suits or other proceedings referred to in such Article VIII,
nor any other action, suit or other proceeding on the same or similar
grounds is or has been pending.

ARTICLE II
PURPOSE

The purpose of the Trust is to provide investors with one or more
investment portfolio(s) consisting primarily of securities, including debt
instruments or obligations.

ARTICLE III
SHARES

DIVISION OF BENEFICIAL INTEREST

SECTION 1. The Trustees may divide the beneficial interest in the Trust
into an unlimited number of Shares and authorize the issuance of Shares without
prior Shareholder approval. Shares may be issued in series and, if so, Shares
of any series will constitute units of beneficial interest in assets of the
Trust specifically allocated to such series. Shares of the Trust, or any series
thereof, shall have no par value, shall represent equal and proportionate
interests in the Trust, or such series, with none having priority or preference
over any other except as specifically set forth in this Article III, and shall
be transferable. All Shares issued hereunder, including any Shares issued in
payment of dividends or other distributions or in connection with any split of
Shares, shall be fully paid and non-assessable. Shares of the Trust or of any
series may be issued in two or more classes, as the Trustees may, without
Shareholder approval, authorize, and Shares of any class shall be identical to
those of any other class of the Trust or such series except that, if the
Trustees have authorized the issuance of Shares of any particular series in two
or more classes, then such classes may, consistent with the 1940 Act, or
pursuant to any exemptive order issued by the Commission and other applicable
law, have such variations as to dividends, redemption charges, conversion,
voting rights, net asset value, expenses borne by the class, and other matters
as the Trustees shall have determined. The Trustees may from time to time,
without Shareholder approval, divide or combine the Shares of a series into a
greater or lesser number without thereby changing their proportionate beneficial
interests in assets allocated to such series.

OWNERSHIP OF SHARES

<PAGE>

similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent of the Trust, as the case may be, shall be conclusive
as to who are the Shareholders of each series or class and as to the number of
Shares of each series or class held from time to time by each Shareholder.

INVESTMENTS IN THE TRUST; ASSETS OF THE SERIES

SECTION 3. The Trustees may accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.

All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so recorded upon the books
of account of the Trust and are herein referred to as "assets of" such series.
In addition, any assets, income, earnings, profits, and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any particular
series shall be allocated by the Trustees between and among one or more of the
series in such manner as they, in their sole discretion, deem fair and
equitable. Each such allocation to any series shall be conclusive and binding
upon the Shareholders of all series for all purposes, and shall be referred to
as assets belonging to that series. No holder of Shares of any particular
series shall have any claim on or right to any assets allocated or belonging to
any other series.

ESTABLISHMENT OF CLASS OR SERIES

SECTION 4. The establishment and designation of any class or series of
Shares shall be effective upon the adoption of a resolution by a majority of the
Trustees (or of a committee thereof) setting forth such establishment and
designation and the relative rights and preferences of the Shares of such class
or series. Such establishment and designation shall not constitute an amendment
to this Declaration of Trust, although the Trustees may, at their option, set
forth such establishment and designation in a written instrument signed by them
or by an officer of the Trust. The Trustees (or a committee thereof) may by
majority vote amend such establishment and designation. At any time, if no
Shares are outstanding of a particular class or series previously so established
and designated, the Trustees (or a committee thereof) may by majority vote
abolish such class or series and said establishment and designation thereof.

NO PREEMPTIVE RIGHTS

SECTION 5. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust, except as otherwise

<PAGE>

provided herein or as the Trustees in their sole discretion shall have
determined by resolution.

STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY

SECTION 6. Shares shall be deemed to be personal property giving only the
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party hereto. The death
of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said decedent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.

TRUSTEES AND OFFICERS AS SHAREHOLDERS

SECTION 7. Any Trustee, officer or other agent of the Trust may acquire,
own and dispose of Shares of the Trust to the same extent as if he or she were
not a Trustee, officer or agent; and the Trustees may issue and sell or cause to
be issued and sold Shares to and buy such Shares from any such person of any
firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the By-Laws.

ARTICLE IV
THE TRUSTEES

QUALIFICATION; NUMBER OF TRUSTEES; ELECTION

SECTION 1. Each Trustee shall be a natural person and may, but need not,
be a Shareholder. A Trustee may be elected either by the Trustees or the
Shareholders subject to the limitations of the 1940 Act. Each Trustee shall
hold office during the lifetime of this Trust until the election and
qualification of his or her successor, or until he or she sooner dies, resigns
or is removed. The initial Trustee shall be David G. Lee. The number of
Trustees shall be fixed from time to time by a vote of a majority of the
Trustees then in office, except that, commencing with the first Shareholders'
meeting at which Trustees are elected, there shall be not fewer than three nor
more than fifteen Trustees. The number of Trustees so fixed may be increased
either by the Shareholders or by the Trustees by a vote of a majority of the
Trustees then in office. The

<PAGE>

number of Trustees so fixed may be decreased either by the Shareholders or by
the Trustees by vote of a majority of the Trustees then in office, but only to
eliminate vacancies existing by reason of the death, resignation or removal of
one or more Trustees.

In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the 1940 Act. Until any such
vacancy is filled as provided in this Section 1, the Trustees then in office
shall, regardless of their number, have all powers granted to and discharge all
duties imposed on the Trustees hereby. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office, even though
less than a quorum, or by recording in the records of the Trust, and shall take
effect upon such signing or recording and the acceptance of such appointment by
the Trustee so appointed. An appointment of a Trustee may be made by the
Trustees then in office in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees.

REMOVAL AND RESIGNATION

SECTION 2. By vote of the Shareholders holding a majority of the shares
entitled to vote, the Shareholders may remove a Trustee with or without cause.
By vote of a majority of the Trustees then in office, the Trustees may remove a
Trustee with or without cause. Any Trustee may resign at any time by written
instrument signed by him or her and delivered to any officer of the Trust, to
each other Trustee or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time.
Except to the extent expressly provided in a written agreement with the Trust,
no Trustee resigning and no Trustee removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.

EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE

SECTION 3. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.

POWERS

<PAGE>

including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the powers and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be Shareholders; they may employ one or more investment advisers or
administrators as provided in Section 9 of this Article IV; they may employ one
or more custodians of the assets of the trust and may authorize such custodians
to employ subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities, retain a transfer
agent or a Shareholder servicing agent, or both, provide for the distribution of
Shares by the Trust, through one or more principal underwriters or otherwise,
set record dates for the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider desirable to
any officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian or underwriter; and they may
elect and remove such officers and appoint and terminate such agents as they
consider appropriate.

Without limiting the foregoing, the Trustees shall have power and
authority:

(a) To invest and reinvest cash, and to hold cash uninvested;

(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust;

(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper;

(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;

(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depositary or a nominee or nominees or
otherwise;

(f) To establish separate and distinct series of shares with separately
defined investment objectives, policies and purposes, and with
separately defined relative powers, rights, privileges and
liabilities, and to allocate assets, liabilities and expenses of the
Trust to a particular series of Shares or to apportion the same among
two or more series, provided that any liability or expense determined
by the Trustees to have been incurred by a particular series of Shares
shall be payable

<PAGE>

solely out of the assets of that series and to establish separate
classes of shares of each series, all in accordance with Article III
hereof;

(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or
property of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security held in the Trust;

(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees
shall deem proper;

(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;

(j) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;

(k) To borrow funds;

(l) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and
pledge the Trust property or any part thereof to secure any or all of
such obligations;

(m) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring
the assets of the Trust and payment of distributions and principal on
its portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, investment
advisers or administrators, principal underwriters, or independent
contractors of the Trust individually against all claims and
liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as
Shareholder, Trustee, officer, employee, agent, investment adviser or
administrator, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power
to indemnify such person against such liability;

<PAGE>

(n) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for any or all
of the Trustees, officers, employees and agents of the Trust;

(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder;

(p) To enter into contracts of any kind and description;

(q) To name, or to change the name or designation of the Trust or any
series or class of the Trust;

(r) To take whatever action may be necessary to enable the Trust to comply
with any applicable Federal, state or local statute, rule or
regulation; and

(s) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Law may engage.

The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees.

MANNER OF ACTING

SECTION 5. Except as otherwise provided herein or from time to time in the
By-Laws, any action to be taken by the Trustees, or a committee thereof, may be
taken by a majority of the Trustees present at a meeting of Trustees, or of the
committee members present at a meeting of such committee (if in either case a
quorum be present), within or without Massachusetts, including any meeting held
by means of a conference telephone or other communications equipment by means of
which all persons participating in the meeting can communicate with each other
simultaneously and participation by such means shall constitute presence in
person at a meeting, or by written consent of a majority of the Trustees, or
members of such committee, then in office. At any meeting of the Trustees, or a
committee thereof, a majority of the Trustees or members of such committee, as
the case may be, shall constitute a quorum. If a quorum is present when a duly
called or held meeting is convened, the Trustees present thereat may, following
the withdrawal of one or more Trustees originally present, continue to transact
business until adjournment thereof, even though such Trustees would not
otherwise constitute a quorum. Meetings of the Trustees, or a committee
thereof, may be called orally or in writing by the Chairman of the Trustees or
of such committee or by any two other Trustees or committee members, as the case
may be. Notice of the time, date and place of all meeting of the Trustees, or a
committee thereof, shall be given to each Trustee or committee member as
provided in the

<PAGE>

By-Laws.

Notice of any meeting need not be given to any Trustee (or committee
member) who attends that meeting without objecting to the lack of notice or who
executes a written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to any
one of their number the authority to approve particular matters or take
particular actions on behalf of the Trust.

PAYMENT OF EXPENSES BY THE TRUST

SECTION 6. The Trustees are authorized to pay or to cause to be paid out
of the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation, as authorized pursuant to Article VII, Section 1 hereof, and
reimbursement for expenses and disbursements and such expenses and charges for
the services of the Trust's officers, employees, investment adviser or
administrator, principal underwriter, auditor, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur, PROVIDED, however, that all expenses, fees,
charges, taxes and liabilities incurred or arising in connection with a
particular series of Shares or class as determined by the Trustees consistent
with applicable law, shall be payable solely out of the assets of that series or
class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular series
shall be allocated and charged by the Trustees between or among any one or more
of the series in such manner as the Trustees in their sole discretion deem fair
and equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all series for all purposes. Any creditor of any series may
look only to the assets of that series to satisfy such creditor's debt.

SECTION 7. The Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder to pay directly, in advance or arrears, for
any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.

OWNERSHIP OF ASSETS OF THE TRUST

SECTION 8. Title to all of the assets of each series of Shares and the
Trust shall at all times be considered as vested in the Trustees as joint
tenants. The right, title and interest of the Trustees in such assets shall
vest automatically in each person who may hereafter become a Trustee, and upon
any Trustees' death, resignation or removal, such Trustee shall automatically
cease to have any right, title or interest in such assets. Vesting and
cessation of title as set forth in this Section 8 shall be effective
notwithstanding the absence of execution and delivery of any

<PAGE>

conveyancing documents.

ADVISORY, ADMINISTRATION AND DISTRIBUTION

SECTION 9. The Trustees may, at any time and from time to time, contract
with respect to the Trust or any series thereof for exclusive or nonexclusive
advisory and/or administration services with First Hawaiian Bank, SEI Financial
Management Corporation, a Delaware corporation, and/or any other corporation,
trust, association or other organization, every such contract to comply with
such requirements and restrictions as may be set forth in the By-Laws; and any
such contract may contain such other terms interpretive of or in addition to
said requirements and restrictions as the Trustees may determine, including,
without limitation, in the case of a contract for advisory or sub-advisory
services, authority to determine from time to time what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust or any series thereof shall be held uninvested and to make changes in
the investments of the Trust or any series thereof. Any contract for advisory
services shall be subject to such Shareholder approval as is required by the
1940 Act. The Trustees may also, at any time and from time to time, contract
with SEI Financial Services Company, a Pennsylvania corporation, and/or any
other corporation, trust, association or other organization, appointing it
exclusive or nonexclusive distributor or principal underwriter for the Shares,
every such contract to comply with such requirements and restrictions as may be
set forth in the By-Laws, and any such contract may contain such other terms
interpretive of or in addition to said requirements and restrictions as the
Trustees may determine.

The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee,
administrator, adviser, principal underwriter, or distributor or agent
of or for any corporation, trust, association, or other organization,
or of or for any parent or affiliate of any organization, with which
an advisory or administration or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that

(ii) any corporation, trust, association or other organization with which
an advisory or administration or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made also has an
advisory or administration contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other businesses or
interests

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to

<PAGE>

the Trust or its Shareholders.

ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS

The Shareholders shall have power to vote only (i) for the election or
removal of Trustees as provided in Article IV, Section 1 hereof, (ii) with
respect to any investment adviser as provided in Article IV, Section 7 hereof,
(iii) with respect to any termination of the Trust or any series or class to the
extent and as provided in Article IX, Section 4 hereof, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Article
IX, Section 7 hereof, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, (vi) with
respect to any merger, consolidation, sale of assets, or incorporation of the
Trust or any series to the extent and as provided in Article IX, Sections 6 and
7 hereof, and (vii) with respect to such additional matters relating to the
Trust as may be required by law, by this Declaration of Trust, by the By-Laws or
by any registration of the Trust with the Securities and Exchange Commission or
any state, or as the Trustees may consider necessary or desirable.
Notwithstanding any other provisions of this Declaration of Trust, on any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall be voted by individual series or class, except that (1) when so
required by the 1940 Act, then Shares shall be voted in the aggregate and not by
individual series or class, and (2) when the Trustees have determined that the
matter affects only the interests of one or more series or class, then only
Shareholders of such series or class(es) shall be entitled to vote thereon. The
Shareholders may hold meetings and take action as provided in the By-Laws,
subject to the requirements of the 1940 Act where applicable. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.

ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS, REPURCHASES
AND DETERMINATION OF NET ASSET VALUE

DISTRIBUTIONS

<PAGE>

each year's income of each series, if any be made, may be made in one or more
payments, which shall be in Shares, in cash or otherwise and on a date or dates
determined by the Trustees. At any time and from time to time in their
discretion, the Trustees may distribute to the Shareholders of any one or more
series as of a record date or dates determined by the Trustees, in Shares, in
cash or otherwise, all or part of any gains realized on the sale or disposition
of property of the series or otherwise, or all or part of any other principal of
the Trust attributable to the series. Each distribution pursuant to this
Section 1 shall be made ratably according to the number of Shares of the series
or class held by the several Shareholders on the applicable record date thereof,
provided that no distributions need be made on Shares purchased pursuant to
orders received, or for which payment is made, after such time or times as the
Trustees may determine. Any such distribution paid in Shares will be paid at
the net asset value thereof as determined in accordance with this Declaration of
Trust.

REDEMPTIONS AND REPURCHASES

SECTION 2. Any holder of Shares of the Trust may, by presentation of a
written request, together with his or her certificates, if any, for such Shares,
in proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder services agent appointed by the Trust (as the Trustees may
determine), or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize, redeem his or her Shares in accordance
with the provisions of this Section 2 for the net asset value thereof determined
and computed in accordance with the By-Laws, less any redemption charge the
Trustees may establish including any contingent deferred sales charge to which
redemption of such Shares may be subject. Upon receipt of such written request
for redemption of Shares by the Trust, the adviser, the underwriter or the
distributor, or the Trust's transfer or Shareholder services agent, the Trust
shall purchase such Shares and shall pay therefor the net asset value thereof
next determined after such receipt or, in the case of Shares for which
certificates have been issued, the net asset value thereof next determined after
such Shares are tendered in proper form for transfer to the Trust or, in either
case, the net asset value thereof determined as of such other time fixed by the
Trustees, as may be permitted or required by the 1940 Act.

The obligation of the Trust to redeem its Shares as set forth in this
Section 2 shall be subject to the condition that, during any time of emergency,
as hereinafter defined, such obligation may be suspended by the Trust by or
under authority of the Trustees for such period or periods during such time of
emergency as shall be determined by or under authority of the Trustees. If
there is such a suspension, any Shareholder may withdraw any demand for
redemption and any tender of Shares which has been received by the Trust during
any such period and any tender of Shares the applicable net asset value of which
would but for such suspension be calculated as of a time during such period.
Upon such withdrawal, the Trust shall return to the Shareholder the certificates
therefor, if any. Shareholders who do not so withdraw any such demand shall
receive payment based on the net asset value next determined after the
termination of such suspension. For the purposes of any such suspension "time
of emergency" shall mean, either with respect to all Shares or any series of
Shares, as appropriate, any period

<PAGE>

during which:

(a) the New York Stock Exchange is closed other than for customary weekend
and holiday closings; or

(b) the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations or
orders of the Commission, either that trading on the New York Stock
Exchange is restricted, or that an emergency exists as a result of
which (i) disposal by the Trust of securities owned by it is not
reasonably practicable or (ii) it is not reasonably practicable for
the Trust fairly to determine the current value of the net assets of
the Trust or of a series; or

The Trust may also purchase, repurchase or redeem Shares in accordance with
such other methods, upon such other terms and subject to such other conditions
as the Trustees may from time to time authorize at a price not exceeding the net
asset value of such Shares in effect when the purchase or repurchase or any
contract to purchase or repurchase is made.

PAYMENT IN KIND

SECTION 3. Subject to any generally applicable limitation imposed by the
Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property then
held by the series of Shares being redeemed, purchased or repurchased (but not
necessarily involving a portion of each of that series' holdings) and taken at
their value used in determining the net asset value of the Shares in respect of
which payment is made.

ADDITIONAL PROVISIONS RELATING TO REDEMPTIONS AND REPURCHASES

SECTION 4. The completion of redemption, purchase or repurchase of Shares
shall constitute a full discharge of the Trust and the Trustees with respect to
such Shares and the Trustees may require that any certificate or certificates
issued by the Trust to evidence the ownership of such Shares shall be
surrendered to the Trustees for cancellation or notation.

ASSETS AVAILABLE FOR DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES

SECTION 5. No dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any series) with respect
to, nor any redemption or repurchase of, the Shares of any series shall be
effected by the Trust other than from the assets of such

<PAGE>

series.

REDEMPTIONS AT THE OPTION OF THE TRUST

SECTION 6. The Trustees shall have the power at any time to redeem Shares,
of any class of any series, of a Shareholder at a redemption price determined in
accordance with the provisions of Section 2 of this Article if at such time the
aggregate net asset value of the Shares of that class of that series in such
Shareholder's account is less than the minimum investment amount established by
the Trustees for that class of that series. A Shareholder shall be notified
prior to any such redemption and shall be allowed 60 days to make additional
investments in Shares of that class of that series before such redemption is
effected.

ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES

COMPENSATION

SECTION 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, administration, legal, accounting, investment banking or other
services and payment for the same by the Trust.

LIMITATION OF LIABILITY

SECTION 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, investment
adviser or administrator, principal underwriter or custodian, nor shall any
Trustee be responsible for the act or omission of any other Trustee, but nothing
herein contained shall protect any Trustee against any liability to which he or
she would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.

Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.

ARTICLE VIII
INDEMNIFICATION

<PAGE>

Subject to the exceptions and limitations contained in this Article, every
person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.

No indemnification shall be provided hereunder to a Trustee or officer:

(a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office;

(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Trust;

(c) in the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b)) and resulting
in a payment by a Trustee or officer, unless there has been either a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office by the court or other
body approving the settlement or other disposition or a reasonable
determination, based on a review of readily available facts (as
opposed to a full trial-type inquiry) that he did not engage in such
conduct:

(i) by a vote of a majority of the Disinterested Trustees acting on
the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter); or

(ii) by written opinion of independent legal counsel.

The rights of indemnification hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Trustees and officers may be entitled by
contract or otherwise under law.

Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in the next to the last paragraph
of this Article shall be

<PAGE>

advanced by the Trust prior to final disposition thereof upon receipt of an
undertaking by or on behalf of the recipient to repay such amount if it is
ultimately determined that he is not entitled to indemnification under this
Article, provided that either:

(a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of
any such advances; or

(b) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office
act on the matter) or independent legal counsel in a written opinion
shall determine, based upon a review of the readily available facts
(as opposed to a full trial-type inquiry), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.

As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorney's fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.

In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
shareholder and not because of his or her acts or omissions or for some other
reason, the shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expenses arising from
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.

ARTICLE IX
MISCELLANEOUS

TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE

SECTION 1. All persons extending credit to, contracting with or having any
claim against the Trust or a particular series or class of Shares shall look
only to the assets of the Trust or the assets of that particular series of
Shares for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefor.
Nothing in this Declaration of Trust shall protect any Trustee against any
liability to which such Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee.

Every note, bond, contract, instrument, certificate or undertaking made or
issued by the

<PAGE>

Trustees or by any officers or officer shall give notice that this Declaration
of Trust is on file with the Secretary of the Commonwealth of Massachusetts and
shall recite that the same was executed or made by or on behalf of the Trust or
by them as Trustees or Trustee or as officers or officer and not individually
and that the obligations of such instrument are not binding upon any of them or
the Shareholders individually but are binding only upon the assets and property
of the Trust, and may contain such further recital as he or she or they may deem
appropriate, but the omission thereof shall not operate to bind any Trustees or
Trustee or officers or officer or Shareholders or Shareholder individually.

TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE; NO BOND OR SURETY

SECTION 2. The exercise by the Trustees of their powers and discretion
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.

LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES

SECTION 3. No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.

DURATION AND TERMINATION OF TRUST

SECTION 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares entitled to vote or by
the Trustees by written notice to the Shareholders. Any series of Shares may be
terminated at any time by vote of Shareholders holding at least a majority of
the Shares of such series entitled to vote or by the Trustees by written notice
to the Shareholders of such series. Upon termination of the Trust or of any one
or more series of Shares, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated, of the
Trust or of the particular series as may be determined by the Trustees, the
Trust shall, in accordance with such procedures as the Trustees consider
appropriate, reduce the remaining assets to distributable form in cash or Shares
or other securities, or any combination thereof, and distribute the proceeds to
the Shareholders of the series involved, ratably according to the number of
Shares of such series held by the several Shareholders of such series on the
date of termination.

SECTION 5. The original or a copy of this instrument and of each amendment
hereto shall

<PAGE>

be kept at the office of the Trust where it may be inspected by any Shareholder.
A copy of this instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of the Commonwealth of Massachusetts and with the
Boston City Clerk, as well as any other governmental office where such filing
may from time to time be required. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such amendments
have been made and as to any matters in connection with the Trust hereunder;
and, with the same effect as if it were the original, may rely on a copy
certified by an officer of the Trust to be a copy of this instrument or of any
such amendments. In this instrument and in such amendment, references to this
instrument, and the expression "herein," "hereof," and "hereunder" shall be
deemed to refer to this instrument as amended from time to time. Headings are
placed herein for convenience of reference only and shall not be taken as part
hereof or control or affect the meaning, construction or effect of this
instrument. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.

MERGER, CONSOLIDATION AND SALE OF ASSETS

SECTION 6. The Trust may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of the assets of the Trust (or all or substantially all of the
assets allocated or belonging to a particular series of the Trust) including its
good will, upon such terms and conditions and for such consideration when and as
authorized, at any meeting of Shareholders called for such purpose, by the vote
or written consent of the Shareholders of all series of the Trust voting as a
single class, or of the affected series of the Trust, as the case may be; and
any such merger, consolidation, sale, lease or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to the statutes of the
Commonwealth of Massachusetts. Nothing contained herein shall be construed as
requiring approval of Shareholders for any sale of assets in the ordinary course
of the business of the Trust. Holders of Shares of any series or class shall
have no appraisal rights with respect to their Shares.

INCORPORATION, REORGANIZATION

SECTION 7. With the approval of the Shareholders, the Trustees may cause
to be organized or assist in organizing a corporation or corporations under the
laws of any jurisdiction, or any other trust, unit investment trust,
partnership, association or other organization to take over the assets of the
Trust or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer such assets to
any such corporation, trust, partnership, association or organization in
exchange for the shares or securities thereof or otherwise, and to lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any such corporation, trust, partnership, association or organization in which
the Trust holds or is about to acquire shares or any other interest. Subject to
Section 6 of this Article IX, the Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law. Nothing contained in this Section shall be construed
as requiring approval of Shareholders for the Trustees to organize or assist in
organizing one or more

<PAGE>

corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the assets of the Trust to such
organization or entities.

With the approval of Shareholders of any series, the Trustees may sell,
lease or exchange all of the assets allocated or belonging to that series, or
cause to be organized or assist in organizing a corporation or corporations
under the laws of any other jurisdiction, or any other trust, unit investment
trust, partnership, association or other organization, to take over all of the
assets allocated or belonging to that series and to sell, convey or transfer
such assets to any such corporation, trust, unit investment trust, partnership,
association, or other organization in exchange for the shares or securities
thereof or otherwise.

APPLICABLE LAW

SECTION 8. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust. This
Declaration of Trust is to be governed by and construed and administered
according to the laws of said Commonwealth.

AMENDMENTS

SECTION 9. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
to do so by a vote or written consent of Shareholders, except that an amendment
which shall affect the holders of one or more series or classes of Shares but
not the holders of all outstanding series or classes shall be authorized by vote
or written consent of the Shareholders of each series or classes affected and no
vote of Shareholders of a series or classes not affected shall be required.
Amendments having the purpose of changing the name of the Trust or of supplying
any omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.

<PAGE>

IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of the
Trust has executed this document this 25th day of May, 1994.

/s/ David G. Lee
-------------------------
David G. Lee
c/o SEI Financial Services Company
680 E. Swedesford Road
Wayne, PA 19087

COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA

I, the undersigned authority, hereby certify that the foregoing is a true and
correct copy of the instrument presented to me by David G. Lee as the original
of such instrument.

WITNESS my hand and official seal, this 25 day of May.

/s/Colleen L. Stanton
------------------------------
Notary Public

My commission expires: 9-1-97
-------------

--------------------------------------------------
Notarial Seal
Colleen L. Stanton, Notary Public
Tredyffrin Twp., Chester County
My Commission Expires Sept. 1, 1997

--------------------------------------------------
Member, Pennsylvania Association of Notaries

<PAGE>

BISHOP STREET FUNDS

AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST

AGREEMENT AND DECLARATION OF TRUST, as amended and restated as of this 1st day
of September, 1994, the Trustees hereunder, and by the holders of Shares of
beneficial interest to be issued hereunder as hereinafter provided.

WITNESSETH that

WHEREAS, this Trust has been formed to carry on the business of an investment
company; and

WHEREAS, the Trustees elected in accordance with Article IV hereof have agreed
to manage all property coming into their hands as trustees of a Massachusetts
voluntary association with transferable Shares in accordance with the provisions
hereinafter set forth.

NOW, THEREFORE, the Trustees elected in accordance with Article IV hereof hereby
declare that they will hold all cash, securities and other assets, which they
may from time to time acquire in any manner as Trustees hereunder IN TRUST to
manage and dispose of the same for the pro rata benefit of the holders from time
to time of Shares in this Trust issued hereunder on the terms and conditions
hereinafter set forth.

ARTICLE I
NAME, PRINCIPAL PLACE OF BUSINESS AND RESIDENT AGENT, AND DEFINITIONS

NAME

SECTION 1. This Trust shall be known as the BISHOP STREET FUNDS, and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.

PRINCIPAL PLACE OF BUSINESS AND RESIDENT AGENT

SECTION 2. The principal place of business of the Trust is 2 Oliver Street,
Boston, Massachusetts 02109. The name of the Trust's resident agent in the
Commonwealth of Massachusetts is CT Corporation System at 2 Oliver Street,
Boston, Massachusetts 02109.

<PAGE>

DEFINITIONS

SECTION 3. Whenever used herein, unless otherwise required by the context or
specifically provided:

(a)The "Trust" refers to the Bishop Street Funds, the trust created hereby.

(b)"Trustee" or "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV hereof and then in office.

(c)"Shares" refers to units of beneficial interest in the assets of the Trust,
when used in relation to any particular series established by the Trustees
hereunder refers to units of beneficial interest in the assets specifically
allocated to that series, and includes fractional as well as whole Shares.

(d)"Shareholder" means a record owner of Shares.

(e)"Affiliated Person," "Assignment," "Commission," "Interested Person," and
"Principal Underwriter" shall have the meanings given them in the 1940 Act.

(f)"Majority Shareholder Vote" shall have the same meaning as "vote of a
majority of the outstanding voting securities" as that phrase is defined in the
1940 Act, provided that such majority shall be calculated by reference to the
number of votes represented by shares entitled to vote and present at the
meeting, either in person or by proxy. Such term may be used herein with respect
to the Shares of the Trust as a whole or the Shares of a particular series, as
the context may require.

(g)"Declaration of Trust" shall mean this Amended and Restated Agreement and
Declaration of Trust, as further amended or restated from time to time, provided
that reference made in this Agreement and Declaration of Trust to "hereby,"
"hereof," "herein," "hereunder" or similar terms shall be deemed to refer to
this Declaration of Trust rather than the Article or Section in which such words
appear, unless the context otherwise requires.

(h) "By-Laws" shall mean the By-Laws of the Trust referred to in Article IV,
Section 3 hereof, as amended from time to time.

(i) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time.

<PAGE>

Article VIII hereof, a "Disinterested Trustee" shall mean a
Disinterested Trustee against whom, at the time of the votes to be
taken pursuant to said Article VIII, none of the actions, suits or
other proceedings referred to in such Article VIII, nor any other
action, suit or other proceeding on the same or similar grounds is or
has been pending.

ARTICLE II
PURPOSE

The purpose of the Trust is to provide investors with one or more
investment portfolio(s) consisting primarily of securities, including debt
instruments or obligations.

ARTICLE III
SHARES

DIVISION OF BENEFICIAL INTEREST

SECTION 1. The Trustees may divide the beneficial interest in the Trust
into an unlimited number of Shares, authorize the issuance of Shares without
prior Shareholder approval, and may provide in a By-Law or otherwise that Shares
may have voting rights based upon the value thereof. Shares may be issued in
series and, if so, Shares of any series will constitute units of beneficial
interest in assets of the Trust specifically allocated to such series. Shares
of the Trust, or any series thereof, shall have a par value of $.00001, shall
represent equal and proportionate interests in the Trust, or such series, with
none having priority or preference over any other except as specifically set
forth in this Article III, and shall be transferable. All Shares issued
hereunder, including any Shares issued in payment of dividends or other
distributions or in connection with any split of Shares, shall be fully paid and
non-assessable. Shares of the Trust or of any series may be issued in two or
more classes, as the Trustees may, without Shareholder approval, authorize, and
Shares of any class shall be identical to those of any other class of the Trust
or such series except that, if the Trustees have authorized the issuance of
Shares of any particular series in two or more classes, then such classes may,
consistent with the 1940 Act, or pursuant to any exemptive order issued by the
Commission and other applicable law, have such variations as to dividends,
redemption charges, conversion, voting rights, net asset value, expenses borne
by the class, and other matters as the Trustees shall have determined. The
Trustees may from time to time, without Shareholder approval, divide or combine
the Shares of a series into a greater or lesser number without thereby changing
their proportionate beneficial interests in assets allocated to such series.

<PAGE>

OWNERSHIP OF SHARES

SECTION 2. The ownership of Shares shall be recorded on the books of the
Trust or its transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent of the Trust, as the case may be, shall be conclusive
as to who are the Shareholders of each series or class and as to the number of
Shares of each series or class held from time to time by each Shareholder.

INVESTMENTS IN THE TRUST; ASSETS OF THE SERIES

ESTABLISHMENT OF CLASS OR SERIES

<PAGE>

Trustees (or a committee thereof) may by majority vote abolish such class or
series and said establishment and designation thereof.

NO PREEMPTIVE RIGHTS

SECTION 5. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust, except as otherwise provided herein or as the Trustees in
their sole discretion shall have determined by resolution.

STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY

TRUSTEES AND OFFICERS AS SHAREHOLDERS

<PAGE>

ARTICLE IV
THE TRUSTEES

QUALIFICATION; NUMBER OF TRUSTEES; ELECTION

SECTION 1. Each Trustee shall be a natural person and may, but need not,
be a Shareholder. A Trustee may be elected either by the Trustees or the
Shareholders subject to the limitations of the 1940 Act. Each Trustee shall
hold office during the lifetime of this Trust until the election and
qualification of his or her successor, or until he or she sooner dies, resigns
or is removed. The number of Trustees shall be fixed from time to time by a
vote of a majority of the Trustees then in office, except that, commencing with
the first Shareholders' meeting at which Trustees are elected, there shall be
not fewer than three nor more than fifteen Trustees. The number of Trustees so
fixed may be increased either by the Shareholders or by the Trustees by a vote
of a majority of the Trustees then in office. The number of Trustees so fixed
may be decreased either by the Shareholders or by the Trustees by vote of a
majority of the Trustees then in office, but only to eliminate vacancies
existing by reason of the death, resignation or removal of one or more Trustees.

REMOVAL AND RESIGNATION

<PAGE>

any period following his or her resignation or removal, or any right to damages
on account of such removal.

EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE

POWERS

SECTION 4. Subject to the provisions of this Declaration of Trust, the
Trustees shall manage the business of the Trust as an investment company, and
they shall have all powers necessary or convenient to carry out that
responsibility. Without limiting the foregoing, the Trustees may adopt By-Laws
not inconsistent with this Declaration of Trust providing for the conduct of the
business of the Trust and may amend and repeal them to the extent that such By-
Laws do not reserve that right to the Shareholders; they may fill vacancies in
their number, including vacancies resulting from increases in their number, and
may elect and remove such officers and appoint and terminate such agents as they
consider appropriate; they may appoint from their own number, and terminate, any
one or more committees consisting of two or more Trustees, including an
executive committee which may, when the Trustees are not in session, exercise
some or all of the powers and authority of the Trustees as the Trustees may
determine; they may appoint an advisory board, the members of which shall not be
Trustees and need not be Shareholders; they may employ one or more investment
advisers or administrators as provided in Section 9 of this Article IV; they may
employ one or more custodians of the assets of the trust and may authorize such
custodians to employ subcustodians and to deposit all or any part of such assets
in a system or systems for the central handling of securities, retain a transfer
agent or a Shareholder servicing agent, or both, provide for the distribution of
Shares by the Trust, through one or more principal underwriters or otherwise,
set record dates for the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider desirable to
any officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian or underwriter; and they may
elect and remove such officers and appoint and terminate such agents as they
consider appropriate.

Without limiting the foregoing, the Trustees shall have power and
authority:

(a) To invest and reinvest cash, and to hold cash uninvested;

(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust;

(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and
deliver proxies or

<PAGE>

powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and
discretion with relation to securities or property as the Trustees
shall deem proper;

(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;

(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;

(j) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;

<PAGE>

(k) To borrow funds;

(p) To enter into contracts of any kind and description;

(q) To name, or to change the name or designation of the Trust or any
series or class of the Trust;

(r) To take whatever action may be necessary to enable the Trust to comply
with any applicable Federal, state or local statute, rule or
regulation; and

(s) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Law may engage.

<PAGE>

The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees.

MANNER OF ACTING

SECTION 5. Except as otherwise provided herein or from time to time in the
By-Laws, any action to be taken by the Trustees, or a committee thereof, may be
taken by a majority of the Trustees present at a meeting of Trustees, or of the
committee members present at a meeting of such committee (if in either case a
quorum be present), within or without Massachusetts, including any meeting held
by means of a conference telephone or other communications equipment by means of
which all persons participating in the meeting can communicate with each other
simultaneously and participation by such means shall constitute presence in
person at a meeting, or by written consent of a majority of the Trustees, or
members of such committee, then in office. At any meeting of the Trustees, or a
committee thereof, one third of the Trustees or members of such committee, as
the case may be, shall constitute a quorum. If a quorum is present when a duly
called or held meeting is convened, the Trustees present thereat may, following
the withdrawal of one or more Trustees originally present, continue to transact
business until adjournment thereof, even though such Trustees would not
otherwise constitute a quorum. Meetings of the Trustees, or a committee
thereof, may be called orally or in writing by the Chairman of the Trustees or
of such committee or by any two other Trustees or committee members, as the case
may be. Notice of the time, date and place of all meeting of the Trustees, or a
committee thereof, shall be given to each Trustee or committee member as
provided in the By-Laws.

PAYMENT OF EXPENSES BY THE TRUST

<PAGE>

Shares or class as determined by the Trustees consistent with applicable law,
shall be payable solely out of the assets of that series or class. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular series shall be allocated
and charged by the Trustees between or among any one or more of the series in
such manner as the Trustees in their sole discretion deem fair and equitable.
Each such allocation shall be conclusive and binding upon the Shareholders of
all series for all purposes. Any creditor of any series may look only to the
assets of that series to satisfy such creditor's debt.

OWNERSHIP OF ASSETS OF THE TRUST

ADVISORY, ADMINISTRATION AND DISTRIBUTION

<PAGE>

distributor or principal underwriter for the Shares, every such contract to
comply with such requirements and restrictions as may be set forth in the By-
Laws, and any such contract may contain such other terms interpretive of or in
addition to said requirements and restrictions as the Trustees may determine.

The fact that:

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.

ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS

<PAGE>

Trust as may be required by law, by this Declaration of Trust, by the By-Laws or
by any registration of the Trust with the Securities and Exchange Commission or
any state, or as the Trustees may consider necessary or desirable.
Notwithstanding any other provisions of this Declaration of Trust, on any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall be voted by individual series or class, except that (1) when so
required by the 1940 Act, then Shares shall be voted in the aggregate and not by
individual series or class, and (2) when the Trustees have determined that the
matter affects only the interests of one or more series or class, then only
Shareholders of such series or class(es) shall be entitled to vote thereon. The
Shareholders may hold meetings and take action as provided in the By-Laws,
subject to the requirements of the 1940 Act where applicable. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.

ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS, REPURCHASES
AND DETERMINATION OF NET ASSET VALUE

DISTRIBUTIONS

SECTION 1. The Trustees may, but need not, distribute from time to time to
the Shareholders of each series such income and gains, accrued or realized, as
the Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with good accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, in cash or otherwise and on a
date or dates determined by the Trustees. At any time and from time to time in
their discretion, the Trustees may distribute to the Shareholders of any one or
more series as of a record date or dates determined by the Trustees, in Shares,
in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the series or otherwise, or all or part of any other
principal of the Trust attributable to the series. Each distribution pursuant
to this Section 1 shall be made ratably according to the number of Shares of the
series or class held by the several Shareholders on the applicable record date
thereof, provided that no distributions need be made on Shares purchased
pursuant to orders received, or for which payment is made, after such time or
times as the Trustees may determine. Any such distribution paid in Shares will
be paid at the net asset value thereof as determined in accordance with this
Declaration of Trust.

<PAGE>

REDEMPTIONS AND REPURCHASES

SECTION 2. Any holder of Shares of the Trust may, by presentation of a
written request, together with his or her certificates, if any, for such Shares,
in proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder services agent appointed by the Trust (as the Trustees may
determine), or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize, redeem his or her Shares in accordance
with the provisions of this Section 2 for the net asset value thereof determined
and computed in accordance with the By-Laws, less any redemption charge the
Trustees may establish, including any contingent deferred sales charge to which
redemption of such Shares may be subject. Upon receipt of such written request
for redemption of Shares by the Trust, the adviser, the underwriter or the
distributor, or the Trust's transfer or Shareholder services agent, the Trust
shall purchase such Shares and shall pay therefor the net asset value thereof
next determined after such receipt or the net asset value thereof determined as
of such other time fixed by the Trustees, as may be permitted or required by the
1940 Act.

(a) the New York Stock Exchange is closed other than for customary weekend
and holiday closings; or

<PAGE>

PAYMENT IN KIND

ADDITIONAL PROVISIONS RELATING TO REDEMPTIONS AND REPURCHASES

ASSETS AVAILABLE FOR DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES

REDEMPTIONS AT THE OPTION OF THE TRUST

<PAGE>

ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES

COMPENSATION

LIMITATION OF LIABILITY

ARTICLE VIII
INDEMNIFICATION

No indemnification shall be provided hereunder to a Trustee or officer:

<PAGE>

(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Trust;

(i) by a vote of a majority of the Disinterested Trustees acting on
the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter); or

(ii) by written opinion of independent legal counsel.

Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding of the character described in the next to the last paragraph
of this Article shall be advanced by the Trust prior to final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient to repay
such amount if it is ultimately determined that he is not entitled to
indemnification under this Article, provided that either:

(a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of
any such advances; or

(b) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office
act on the matter) or

<PAGE>

independent legal counsel in a written opinion shall determine, based
upon a review of the readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the
recipient ultimately will be found entitled to indemnification.

ARTICLE IX
MISCELLANEOUS

TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE

Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or

<PAGE>

they may deem appropriate, but the omission thereof shall not operate to bind
any Trustees or Trustee or officers or officer or Shareholders or Shareholder
individually.

TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE; NO BOND OR SURETY

LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES

DURATION AND TERMINATION OF TRUST

SECTION 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least a majority of the Shares entitled to vote or by
the Trustees by written notice to the Shareholders. Any series of Shares may be
terminated at any time by Majority Shareholder vote of such series entitled to
vote or by the Trustees by written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares, after
paying or otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated, of the Trust or of the particular series
as may be determined by the Trustees, the Trust shall, in accordance with such
procedures as the Trustees consider appropriate, reduce the remaining assets to
distributable form in cash or Shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders of the series involved,
ratably according to the number of Shares of such series held by the several
Shareholders of such series on the date of termination.

SECTION 5. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of the Commonwealth of Massachusetts and
with the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not any such
amendments have been made and as to any matters in connection

<PAGE>

with the Trust hereunder; and, with the same effect as if it were the original,
may rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in such amendment,
references to this instrument, and the expression "herein," "hereof," and
"hereunder" shall be deemed to refer to this instrument as amended from time to
time. Headings are placed herein for convenience of reference only and shall
not be taken as part hereof or control or affect the meaning, construction or
effect of this instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.

MERGER, CONSOLIDATION AND SALE OF ASSETS

INCORPORATION, REORGANIZATION

<PAGE>

APPLICABLE LAW

AMENDMENTS

<PAGE>

IN WITNESS WHEREOF, the undersigned being the Trustees of the Trust have
executed this document this 1st day of September, 1994.

/s/ David G. Lee
-----------------------------------------
David G. Lee
c/o SEI Financial Services Company
680 E. Swedesford Road
Wayne, PA 19087

/s/ Philip H. Ching
-----------------------------------------
Philip H. Ching
c/o First Hawaiian Bank
1132 Bishop Street
Honolulu, HI 96813

/s/ William S. Richardson
-----------------------------------------
William S. Richardson
3335 Loulu Street
Honolulu, HI 96822

/s/ Joyce S. Tsunoda
-----------------------------------------
Joyce S. Tsunoda
1814 Hoolehua Street
Pearl City, HI 96782

/s/ Manuel R. Sylvester
-----------------------------------------
Manuel R. Sylvester
1487 Hikala Pl #35
Honolulu, HI 96816

/s/ Charles A. Crain
-----------------------------------------
Charles A. Crain
7508 White Oak Road
Pinetop, AZ 85935

<PAGE>

/s/ Martin Anderson
-------------------------------------
Martin Anderson
Goodsill Anderson Quinn & Stifel
1099 Alakea Street, 18th Floor
Honolulu, HI 96813

STATE OF HAWAII )
) ss:
CITY AND COUNTY OF HONOLULU )

On this 1st day of September, A.D., 1994, before me personally appeared David G.
Lee, Philip H. Ching, William S. Richardson, Joyce S. Tsunoda, Manuel R.
Sylvaester, Charles A. Crain and Martin Anderson to me known to be the persons
described in and who executed the foregoing instrument and acknowledged that
they executed the same as their free act and deed.

My commission expires 9-29-97 /s/ Alma T. Yorita
----------- --------------------------------------
Notary Public, First Indicial Circuit,
State of Hawaii
[SEAL]

<PAGE>

BY-LAWS

BISHOP STREET FUNDS

SECTION 1. AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE

1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of the Bishop Street Funds, a Massachusetts
business trust established by the Declaration of Trust (the "Trust").

1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be
located in Boston, Massachusetts.

SECTION 2. SHAREHOLDERS

2.1 ANNUAL MEETING. The Trust will not hold annual meetings of the
shareholders.

2.2 SPECIAL MEETINGS. A special meeting of the Shareholders of the Trust or of
any series or class may be called at any time by the Trustees, by the
President or such other person or persons as may be specified in these By-
Laws, and held from time to time for the purpose of taking action upon any
matter requiring the vote or the authority of the Shareholders of the Trust
or any series or class as herein provided or upon any other matter deemed
by the Trustees to be necessary or desirable. Written notice of any
meeting of Shareholders shall be given or caused to be given by the
Trustees by mailing such notice at least seven days before such meeting,
postage prepaid, stating the time, place and purpose of the meeting, to
each Shareholder at the Shareholder's address as it appears on the records
of the Trust. Each call of a meeting shall state the place, date, hour and
purposes of the meeting. If the Trustees shall fail to call or give notice
of any meeting of Shareholders for a period of thirty days after written
application by Shareholders holding at least 10% of the Shares then
outstanding requesting a meeting to be called for a purpose requiring
action by the Shareholders as provided herein or in the By-Laws, then
Shareholders holding at least 10% of the Shares then outstanding may call
and give notice of such meeting, and thereupon the meeting shall be held in
the manner provided for herein in case of call thereof by the Trustees.
Notice of a meeting need not be given to any Shareholder if a written
waiver of notice, executed by him or her before or after the meeting, is
filed with the records of the meeting, or to any Shareholder who attends
the meeting without protesting prior thereto or at its commencement the
lack of notice to him or her.

<PAGE>

2.3 PLACE OF MEETINGS. All meetings of the shareholders shall be held at such
place within the United States as shall be designated by the Trustees or
the president of the Trust.

2.4 NOTICE OF MEETINGS. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be
given at least seven days before the meeting to each shareholder entitled
to vote thereat by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, and addressed to
such shareholder at his address as it appears in the records of the Trust.
Such notice shall be given by the secretary or an assistant secretary or by
an officer designated by the Trustees. No notice of any meeting of
shareholders need be given to a shareholder if a written waiver of notice,
executed before or after the meeting by such shareholder or his attorney
thereunto duly authorized, is filed with the records of the meeting.

2.5 VOTING POWERS. Each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by
proxy.

A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior
to its exercise and the burden of proving invalidity shall rest on the
challenger.

2.6 QUORUM AND REQUIRED VOTE. A majority of the Shares entitled to vote shall
be a quorum for the transaction of business at a Shareholders' meeting,
except that where any provision of law or of the Declaration of Trust
permits or requires that holders of any series or class shall vote as a
series or class, then a majority of the aggregate number of Shares of that
series or class entitled to vote shall be necessary to constitute a quorum
for the transaction of business by that series or class. Any lesser
number, however, shall be sufficient for adjournments. Any adjourned
session or sessions may be held within a reasonable time after the date set
for the original meeting without the necessity of further notice.

Except when a larger vote is required by any provisions of the Declaration
of Trust or these By-Laws, a majority of the Shares voted on any matter
shall decide such matter and a plurality shall elect a Trustee, provided
that where any provision of law or of this Declaration of Trust permits or
requires that the holders of any series or class shall vote as a series or
class, then a majority of the Shares of that series or class voted on the
matter shall decide that matter insofar as that series or class is

<PAGE>

concerned.

2.7 BALLOTS. No ballot shall be required for any election unless requested by
a shareholder present or represented at the meeting and entitled to vote in
the election.

2.8 PROXIES. Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted.
Unless otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting.

2.9 ACTION BY WRITTEN CONSENT. Any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger vote as shall be required by any provision of the
Declaration of Trust or these By-Laws) consent to the action in writing and
such written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote
taken at a meeting of Shareholders.

SECTION 3. TRUSTEES

3.1 COMMITTEES AND ADVISORY BOARD. The Trustees may appoint from their number
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not
less than two nor more than five members. The members of the advisory
board shall be compensated in such manner as the Trustees may determine and
shall confer with and advise the Trustees regarding the investments and
other affairs of the Trust. Each member of the advisory board shall hold
office until the first meeting of the Trustees following the next annual
meeting of the shareholders and until his successor is elected and
qualified, or until he sooner dies, resigns, is removed, or becomes
disqualified, or until the advisory board is sooner abolished by the
Trustees.

3.2 REGULAR MEETINGS. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A
regular meeting of the Trustees may be held without call or notice
immediately after and at the same place as the annual meeting of the
shareholders.

3.3 SPECIAL MEETINGS. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the

<PAGE>

Board, the president or the treasurer or by two or more Trustees,
sufficient notice thereof being given to each Trustee by the secretary or
an assistant secretary or by the officer or one of the Trustees calling the
meeting.

3.4 NOTICE. It shall be sufficient notice to a Trustee to send notice by mail
at least forty-eight hours or by telegram at least twenty-four hours before
the meeting addressed to the Trustee at his or her usual or last known
business or residence address or to give notice to him or her in person or
by telephone at least twenty-four hours before the meeting. Notice of a
meeting need not be given to any Trustee if a written waiver of notice,
executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him
or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.

3.5 QUORUM. At any meeting of the Trustees one-third of the Trustees then in
office shall constitute a quorum; provided, however, a quorum shall not be
less than two. Any meeting may be adjourned from time to time by a
majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.

SECTION 4. OFFICERS AND AGENTS

4.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or appoint. The
Trust may also have such agents, if any, as the Trustees from time to time
may in their discretion appoint. Any officer may be but none need be a
Trustee or shareholder. Any two or more offices may be held by the same
person.

4.2 POWERS. Subject to the other provisions of these By-Laws, each officer
shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly
incident to his or her office as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.

4.3 ELECTION. The president, the treasurer and the secretary shall be elected
annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time.

4.4 TENURE. The president, the treasurer and the secretary shall hold office
for a one year term and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed
or becomes disqualified. Each agent shall retain his or her authority at
the pleasure of the Trustees.

<PAGE>

4.5 PRESIDENT AND VICE PRESIDENTS. The president shall be the chief executive
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust.
Any vice president shall have such duties and powers as shall be designated
from time to time by the Trustees.

4.6 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is elected,
he shall have the duties and powers specified in these By-Laws and, except
as the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have
such other duties and powers as may be determined by the Trustees.

4.7 TREASURER AND CONTROLLER. The treasurer shall be the chief financial
officer of the Trust and subject to any arrangement made by the Trustees
with a bank or trust company or other organization as custodian or transfer
or shareholder services agent, shall be in charge of its valuable papers
and shall have such other duties and powers as may be designated from time
to time by the Trustees or by the president. If at any time there shall be
no controller, the treasurer shall also be the chief accounting officer of
the Trust and shall have the duties and powers prescribed the Trust and
shall have the duties and powers prescribed herein for the controller. Any
assistant treasurer shall have such duties and powers as shall be
designated from time to time by the Trustees.

The controller, if any be elected, shall be the chief accounting officer of
the Trust and shall be in charge of its books of account and accounting
records. The controller shall be responsible for preparation of financial
statements of the Trust and shall have such other duties and powers as may
be designated from time to time by the Trustees or the president.

4.8 SECRETARY AND ASSISTANT SECRETARIES. The secretary shall record all
proceedings of the shareholders and the Trustees in books to be kept
therefor, which books shall be kept at the principal office of the Trust.
In the absence of the secretary from any meeting of shareholders or
Trustees, an assistant secretary, or if there be none or he or she is
absent, a temporary clerk chosen at the meeting shall record the
proceedings thereof in the aforesaid books.

SECTION 5. RESIGNATION AND REMOVALS

Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee, officer,
or advisory board member resigning, and no officer or advisory board member
removed shall have any right to any compensation for any period following his or
her resignation or

<PAGE>

removal, or any right to damages on account of such removal.

SECTION 6. VACANCIES

A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.

SECTION 7. SHARES OF BENEFICIAL INTEREST

In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.

SECTION 8. RECORD DATE

The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.

SECTION 9. SEAL

The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.

SECTION 10. EXECUTION OF PAPERS

Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that

<PAGE>

purpose by the vote of the Trustees and need not bear the seal of the Trust.

SECTION 11. FISCAL YEAR

The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.

SECTION 12. PROVISIONS RELATING TO THE CONDUCT OF THE TRUST'S BUSINESS

12.1 DEALINGS WITH AFFILIATES. The Trust shall not purchase or retain
securities issued by any issuer if one or more of the holders of the
securities of such issuer or one or more of the officers or directors of
such issuer is an officer or Trustee of the Trust or officer or director of
any organization, association or corporation with which the Trust has an
investment adviser's contract ("investment adviser"), if to the knowledge
of the Trust one or more of such officers or Trustees of the Trust or such
officers or directors of such investment advisers owns beneficially more
than one-half of one percent of the shares or securities of such issuer and
such officers, Trustees and directors owning more than on-half of one
percent of such shares or securities together own beneficially more than
five percent of such outstanding shares or securities. Each Trustee and
officer of the Trust shall give notice to the secretary of the identity of
all issuers whose securities are held by the Trust of which such officer or
Trustee owns as much as one-half of one percent of the outstanding
securities, and the Trust shall not be charged with the knowledge of such
holdings in the absence of receiving such notice if the Trust has requested
such information not less often than quarterly.

Subject to the provisions of the preceding paragraph, no officer, Trustee
or agent of the Trust and no officer, director or agent of any investment
adviser shall deal for or on behalf of the Trust with himself as principal
or agent, or with any partnership, association or corporation in which he
has a material financial interest; provided that the foregoing provisions
shall not prevent (a) officers and Trustees of the Trust from buying,
holding or selling shares in the Trust, or from being partners, officers or
directors of or financially interested in any investment adviser to the
Trust or in any corporation, firm or association which may at any time have
a distributor's or principal underwriter's contract with the Trust; (b)
purchases or sales of securities or other property if such transaction is
permitted by or is exempt or exempted from the provisions of the Investment
Company Act of 1940 or any Rule or Regulation thereunder and if such
transaction does not involve any commission or profit to any security
dealer who is, or one or more of whose partners, shareholders, officers or
directors is, an officer or Trustee of the Trust or an officer or director
of the

<PAGE>

investment adviser, administrator or principal underwriter of the Trust;
(c) employment of legal counsel, registrar, transfer agent, shareholder
services, dividend disbursing agent or custodian who is, or has a partner,
stockholder, officer or director who is, an officer or Trustee of the
Trust; (d) sharing statistical, research and management expenses, including
office hire and services, with any other company in which an officer or
Trustee of the Trust is an officer or director or financially interested.

12.2 DEALING IN SECURITIES OF THE TRUST. The Trust, the investment adviser, any
corporation, firm or association which may at any time have an exclusive
distributor's or principal underwriter's contract with the Trust (the
"distributor") and the officers and Trustees of the Trust and officers and
directors of every investment adviser and distributor, shall not take long
or short positions in the securities of the Trust, except that:

(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;

(b) shares of the Trust may be purchased at not less than net asset value
for investment by the investment adviser and by officers and directors
of the distributor, investment adviser, or the Trust and by any trust,
pension, profit-sharing or other benefit plan for such persons, no
such purchase to be in contravention of any applicable state or
federal requirement.

12.3 LIMITATION ON CERTAIN LOANS. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment adviser or
distributor or their respective officers, directors or partners or
employees.

12.4 CUSTODIAN. All securities and cash owned by the Trust shall be maintained
in the custody of one or more banks or trust companies having (according to
its last published report) not less than two million dollars ($2,000,000)
aggregate capital, surplus and undivided profits (any such bank or trust
company is hereinafter referred to as the "custodian"); provided, however,
the custodian may deliver securities as collateral on borrowings effected
by the Trust, provided, that such delivery shall be conditioned upon
receipt of the borrowed funds by the custodian except where additional
collateral is being pledged on an outstanding loan and the custodian may
deliver securities lent by the Trust against receipt of initial collateral
specified by the Trust. Subject to such rules, regulations and orders, if
any, as the Securities and Exchange Commission may adopt, the Trust may, or
may not permit any custodian to, deposit all or any part of the securities
owned by the Trust in a system for the central handling of securities
operated by the Federal Reserve Banks, or established by a national
securities exchange or national securities association registered with said
Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by said Commission, pursuant to which system all
securities of

<PAGE>

any particular class or series of any issue deposited with the system are
treated as fungible and may be transferred or pledged by bookkeeping entry,
without physical delivery of such securities.

The Trust shall upon the resignation or inability to serve of its custodian or
upon change of the custodian:

(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;

(b) require that the cash and securities owned by this corporation be
delivered directly to the successor custodian; and

(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the cash and securities
owned by this Trust otherwise than to a successor custodian, the
question whether or not this Trust shall be liquidated or shall
function without a custodian.

12.5 LIMITATIONS ON INVESTMENT. Each series of shares may not invest in
securities other than those described in the Trust's then current
prospectus as appropriate for the series of shares for which such
securities are being purchased.

12.6 DETERMINATION OF NET ASSET VALUE. Determinations of net asset value made
in good faith shall be binding on all parties concerned.

The term "net asset value" with respect to Shares of any series shall mean
that amount by which the assets of that series exceed its liabilities, all
as determined by or under the direction of the Trustees. Such value shall
be determined on such days and at such times as the Trustees may determine.
Such determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the fair
value as determined in good faith by the Trustees, provided, however, that
the Trustees, without Shareholder approval, may alter the method of
appraising portfolio securities insofar as permitted under the 1940 Act and
interpretations thereof promulgated or issued by the Commission or insofar
as permitted by any order of the Commission. The Trustees may delegate any
powers and duties under this Section 12.6 with respect to appraisal of
assets and liabilities. At any time the Trustees may cause the value per
Share last determined to be determined again in similar manner and may fix
the time when such redetermined value shall become effective.

12.7 REPORTS TO SHAREHOLDERS; DISTRIBUTIONS FROM REALIZED GAINS. The Trust
shall send to each shareholder of record at least annually a statement of
the condition of the Trust and of the results of its operation, containing
all information required by applicable laws or regulations.

<PAGE>

SECTION 13. AMENDMENTS

These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.

<PAGE>
BY-LAWS

BISHOP STREET FUNDS

SECTION 1. AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE

1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be
located in Boston, Massachusetts.

SECTION 2. SHAREHOLDERS

2.1 ANNUAL MEETING. The Trust will not hold annual meetings of the
shareholders.

<PAGE>

2.3 PLACE OF MEETINGS. All meetings of the shareholders shall be held at such
place within the United States as shall be designated by the Trustees or
the president of the Trust.

2.5 VOTING POWERS. Each whole Share held entitles the holder of record to one
vote for each dollar (carried forward to two decimal places) of net asset
value of such Share as of the close of business on the record date for any
meeting of Shareholders (or written consent in lieu thereof) at which such
Share may be voted, and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy.

2.6 QUORUM AND REQUIRED VOTE. A majority in interest of the Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of the Declaration of
Trust permits or requires that holders of any series or class shall vote as
a series or class, then a majority in interest of the Shares of that series
or class entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that series or class. Any lesser number,
however, shall be sufficient for adjournments. Any adjourned session or
sessions may be held within a reasonable time after the date set for the
original meeting without the necessity of further notice.

Except when a larger vote is required by any provisions of the
Declaration of Trust or these By-Laws, a majority in interest of the
Shares voted on any matter shall decide such matter and a plurality
shall elect a Trustee, provided that where any provision of law or of
this Declaration of Trust permits or requires that the holders of any

<PAGE>

series or class shall vote as a series or class, then a majority in
interest of the Shares of that series or class voted on the matter shall
decide that matter insofar as that series or class is concerned.

A majority in interest shall mean 50.1% or more of total votes represented
by all Shares entitled to vote and present at the meeting either in person
or by proxy.

2.7 BALLOTS. No ballot shall be required for any election unless requested by
a shareholder present or represented at the meeting and entitled to vote in
the election.

SECTION 3. TRUSTEES

<PAGE>

may be held without call or notice immediately after and at the same place
as the annual meeting of the shareholders.

3.3 SPECIAL MEETINGS. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the
secretary or an assistant secretary or by the officer or one of the
Trustees calling the meeting.

SECTION 4. OFFICERS AND AGENTS

4.3 ELECTION. The president, the treasurer and the secretary shall be elected
annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time.

<PAGE>

SECTION 5. RESIGNATION AND REMOVALS

Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the

<PAGE>

secretary or to a meeting of the Trustees. The Trustees may remove any officer
elected by them with or without cause by the vote of a majority of the Trustees
then in office. Except to the extent expressly provided in a written agreement
with the Trust, no Trustee, officer, or advisory board member resigning, and no
officer or advisory board member removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.

SECTION 6. VACANCIES

SECTION 7. SHARES OF BENEFICIAL INTEREST

SECTION 8. RECORD DATE

SECTION 9. SEAL

<PAGE>

SECTION 10. EXECUTION OF PAPERS

SECTION 11. FISCAL YEAR

The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.

SECTION 12. PROVISIONS RELATING TO THE CONDUCT OF THE TRUST'S BUSINESS

<PAGE>

thereunder and if such transaction does not involve any commission or
profit to any security dealer who is, or one or more of whose partners,
shareholders, officers or directors is, an officer or Trustee of the Trust
or an officer or director of the investment adviser, administrator or
principal underwriter of the Trust; (c) employment of legal counsel,
registrar, transfer agent, shareholder services, dividend disbursing agent
or custodian who is, or has a partner, stockholder, officer or director who
is, an officer or Trustee of the Trust; (d) sharing statistical, research
and management expenses, including office hire and services, with any other
company in which an officer or Trustee of the Trust is an officer or
director or financially interested.

(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;

<PAGE>

by a national securities exchange or national securities association
registered with said Commission under the Securities Exchange Act of 1934,
or such other person as may be permitted by said Commission, pursuant to
which system all securities of any particular class or series of any issue
deposited with the system are treated as fungible and may be transferred or
pledged by bookkeeping entry, without physical delivery of such securities.

The Trust shall upon the resignation or inability to serve of its custodian
or upon change of the custodian:

(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;

(b) require that the cash and securities owned by this corporation be
delivered directly to the successor custodian; and

12.6 DETERMINATION OF NET ASSET VALUE. Determinations of net asset value made
in good faith shall be binding on all parties concerned.

<PAGE>

SECTION 13. AMENDMENTS

These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.

<PAGE>

INVESTMENT ADVISORY AGREEMENT
BISHOP STREET FUNDS

AGREEMENT made this 27th day of January, 1995, by and between Bishop Street
Funds, a Massachusetts business trust (the "Trust"), and First Hawaiian Bank
(the "Adviser").

WHEREAS, the Trust is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several series of shares, each having its own investment policies;
and

WHEREAS, the Trust has retained SEI Financial Management Corporation (the
"Administrator") to provide administration of the Trust's operations, subject
tothe control of the Board of Trustees;

WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its Bishop Street High Grade Income Fund,
Bishop Street Hawaii Tax-Free Fund, Bishop Street Equity Fund and Bishop Street
Money Market Fund and such other funds as the Trust and the Adviser may agree
upon (the "Funds"), and the Adviser is willing to render such services:

NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:

1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, to supervise and monitor
the investment activities of any sub-advisers appointed for the Funds
by the Trustees of the Trust, and to continuously review, supervise,
and administer the investment program of the Funds, to determine in
its discretion the securities to be purchased or sold, to provide the
Administrator and the Trust with records concerning the Adviser's
activities which the Trust is required to maintain, and to render
regular reports to the Administrator and to the Trust's officers and
Trustees concerning the Adviser's discharge of the foregoing
responsibilities. The Adviser may delegate all or any portion of its
responsibilities hereunder to one or more sub-advisers, subject to the
supervision of the Adviser and the Board of Trustees of the Trust.

The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance
with such policies as the Trustees may from time to time establish,
and in compliance with the objectives, policies, and limitations for
each Fund set forth in the each such Fund's prospectus (such
prospectus and the statement of additional information as currently in
effect and as amended or supplemented from time to time, being herein
referred to as the "Prospectus") and applicable laws and regulations.

The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on
the terms and for the

<PAGE>

compensation provided herein.

2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to determine the
securities to be purchased or sold by the Funds and will place orders
with or through such persons, brokers or dealers to carry out the
policy with respect to brokerage set forth in each Fund's Prospectus
or as the Board of Trustees may direct from time to time, in
conformity with federal securities laws. In providing the Funds with
investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. Within the
framework of this policy, the Adviser may consider the financial
responsibility, research and investment information and other services
provided by brokers or dealers who may effect or be a party to any
such transaction or other transactions to which the Adviser's other
clients may be a party. It is understood that it is desirable for the
Funds that the Adviser have access to supplemental investment and
market research and security and economic analysis provided by brokers
who may execute brokerage transactions at higher cost to the Funds
than may result when allocating brokerage to other brokers on the
basis of seeking the most favorable price and efficient execution.
Therefore, the Adviser is authorized to place orders for the purchase
and sale of securities for the Funds with such brokers, subject to
review by the Trust's Board of Trustees from time to time with respect
to the extent and continuation of this practice. It is understood
that the services provided by such brokers may be useful to the
Adviser in connection with the Adviser's services to other clients.

On occasions when the Adviser deems the purchase or sale of a security
to be in the best interest of a Fund as well as other clients of the
Adviser, the Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the
securities to be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be
made by the Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligation to the Funds
and to such other clients.

The Adviser will promptly communicate to the Administrator and to the
officers and the Trustees of the Trust such information relating to
fund transactions as they may reasonably request.

It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in
breach of any obligation owing to the Trust under this Agreement, or
otherwise, solely by reason of its having directed a securities
transaction on behalf of the Trust to a broker-dealer in compliance
with the provisions of Section 28(e) of the Securities Exchange Act of
1934.

<PAGE>

3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust
shall pay to the Adviser compensation at the rate specified in the
Schedule(s) which are attached hereto and made a part of this
Agreement. Such compensation shall be paid to the Adviser at the end
of each month, and calculated by applying a daily rate, based on the
annual percentage rates as specified in the attached Schedule(s), to
the assets. The fee shall be based on the average daily net assets
for the month involved. If this Agreement becomes effective
subsequent to the first day of a month or terminates before the last
day of a month, the Adviser's compensation for that part of the month
in which this Agreement is in effect shall be prorated in a manner
consistent with the calculation of the fees as set forth above.
Payment of the Adviser's compensation for the preceding month shall be
made promptly.

All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.

4. EXCESS EXPENSES. If the expenses for any Fund for any fiscal year
(including fees and other amounts payable to the Adviser, but
excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed the
expense limitations imposed on investment companies by any applicable
statute or regulatory authority of any jurisdiction in which Shares
are qualified for offer and sale, the Adviser shall bear such excess
cost.

However, the Adviser will not bear expenses of the Trust or any Fund
which would result in the Trust's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code.
Payment of expenses by the Adviser pursuant to this Section 4 shall be
settled on a monthly basis (subject to fiscal year end reconciliation)
by a reduction in the fee payable to the Adviser for such month
pursuant to Section 3 and, if such reduction shall be insufficient to
offset such expenses, by reimbursing the Trust.

5. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies of their financial statements, and such
other information with regard to their affairs as each may reasonably
request.

6. STATUS OF THE ADVISER. The services of the Adviser to the Trust are
not to be deemed exclusive, and the Adviser shall be free to render
similar services to others so long as its services to the Trust are
not impaired thereby. The Adviser shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.

<PAGE>

7. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act which are prepared or maintained by the Adviser on
behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request.

8. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser
shall be confined to those expressly set forth herein, and no implied
duties are assumed by or may be asserted against the Adviser
hereunder. The Adviser shall not be liable for any error of judgment
or mistake of law or for any loss arising out of any investment or for
any act or omission in carrying out its duties hereunder, except a
loss resulting from willful misfeasance, bad faith or gross negligence
in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable state law which cannot be
waived or modified hereby. (As used in this Paragraph 8, the term
"Adviser" shall include directors, officers, employees and other
corporate agents of the Adviser as well as that corporation itself).

9. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the
Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders of
the Adviser are or may be interested in the Trust as Trustees,
shareholders or otherwise; and the Adviser (or any successor) is or
may be interested in the Trust as a shareholder or otherwise. In
addition, brokerage transactions for the Trust may be effected through
affiliates of the Adviser if approved by the Board of Trustees,
subject to the rules and regulations of the Securities and Exchange
Commission.

10. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such
continuance thereafter is specifically approved at least annually (a)
by the vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the Trustees of the Trust or by vote of a
majority of the outstanding voting securities of each Fund; provided,
however, that if the shareholders of any Fund fail to approve the
Agreement as provided herein, the Adviser may continue to serve
hereunder in the manner and to the extent permitted by the 1940 Act
and rules and regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder.

<PAGE>

This Agreement may be terminated as to any Fund at any time, without
the payment of any penalty by vote of a majority of the Trustees of
the Trust or by vote of a majority of the outstanding voting
securities of the Fund on not less than 30 days nor more than 60 days
written notice to the Adviser, or by the Adviser at any time without
the payment of any penalty, on 90 days written notice to the Trust.
This Agreement will automatically and immediately terminate in the
event of its assignment. Any notice under this Agreement shall be
given in writing, addressed and delivered, or mailed postpaid, to the
other party at any office of such party.

As used in this Section 10, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the 1940
Act and the rules and regulations thereunder; subject to such
exemptions as may be granted by the Securities and Exchange Commission
under said Act.

11. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice
to the other party at the last address furnished by the other party to
the party giving notice: if to the Trust, at 680 East Swedesford
Road, Wayne, PA, Attention Legal Department and if to the Adviser at:
1132 Bishop Street, Honolulu, HI 96813.

12. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.

A copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees, and that the obligations of this instrument are not binding upon any
of the Trustees, officers, or shareholders of the Trust individually, but
binding only upon the assets and property of the Trust.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.

BISHOP STREET FUNDS FIRST HAWAIIAN BANK

By: /s/Signature Appears Here By: /s/Signature Appears Here
------------------------- -------------------------

Attest: /s/Signature Appears Here Attest: /s/Signature Appears Here
------------------------- -------------------------

<PAGE>

SCHEDULE A DATED JANUARY 27, 1995
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED JANUARY 27, 1995
BETWEEN
BISHOP STREET FUNDS
AND
FIRST HAWAIIAN BANK

Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:

Bishop Street High Grade Income Fund .55%

Bishop Street Hawaii Tax-Free Fund .35%

Bishop Street Equity Fund .74%

Bishop Street Money Market Fund .30%

<PAGE>

SCHEDULE B DATED FEBRUARY , 1996
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED JANUARY 27, 1995
BETWEEN
BISHOP STREET FUNDS
AND
FIRST HAWAIIAN BANK

Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:

Bishop Street Treasury Money Market Fund .30%

<PAGE>
INVESTMENT SUB-ADVISORY AGREEMENT
BISHOP STREET FUNDS

AGREEMENT made this 27th day of January, 1995, by and among First Hawaiian
Bank, a state-chartered bank incorporated under the laws of the State of Hawaii
(the "Adviser"), Wellington Management Company, a Massachusetts general
partnership (the "Sub-Adviser") and Bishop Street Funds, a Massachusetts
business trust (the "Trust").

WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and

WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated January 27, 1995 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the Bishop Street Money
Market Fund (the "Fund"); and

WHEREAS, the Adviser and the Trust each desire to retain the Sub-Adviser to
provide investment management services to the Trust in connection with the
management of the Fund, and the Sub-Adviser is willing to render such investment
advisory services.

NOW, THEREFORE, the parties hereto agree as follows:

1. (a) Subject to supervision by the Adviser and the Trust's Board of
Trustees, the Sub-Adviser shall manage the investment operations of
the Fund and the composition of the Fund's portfolio, including the
purchase, retention and disposition thereof, in accordance with the
Fund's investment objectives, policies and restrictions as stated in
the Fund's Prospectus (such Prospectus and the Statement of Additional
Information, as currently in effect and as amended or supplemented
from time to time, being herein called the "Prospectus"), and subject
to the following:

(1) The Sub-Adviser shall provide supervision of the Fund's
investments and determine from time to time what investments and
securities will be purchased, retained or sold by the Fund, and
what portion of the costs will be invested or held uninvested in
cash.

(2) In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the
Trust's Agreement and Declaration of Trust and the Prospectus and
with the instructions and directions of the Adviser and of the
Board of Trustees of the Trust and will conform to and comply
with the requirements of the 1940 Act, the Internal Revenue Code
of 1986, as amended, and all other applicable federal and state

<PAGE>

laws and regulations, as each is amended from time to time.

(3) The Sub-Adviser shall determine the securities to be purchased or
sold by the Fund and will place orders with or through such
persons, brokers or dealers to carry out the policy with respect
to brokerage set forth in the Fund's Registration Statement (as
defined herein) and Prospectus or as the Board of Trustees or the
Adviser may direct from time to time, in conformity with federal
securities laws. In providing the Fund with investment
supervision, the Sub-Adviser will give primary consideration to
securing the most favorable price and efficient execution.
Within the framework of this policy, the Sub-Adviser may consider
the financial responsibility, research and investment information
and other services provided by brokers or dealers who may effect
or be a party to any such transaction or other transactions to
which the Sub-Adviser's other clients may be a party. It is
understood that it is desirable for the Fund that the Sub-Adviser
have access to supplemental investment and market research and
security and economic analysis provided by brokers who may
execute brokerage transactions at higher cost to the Fund than
may result when allocating brokerage to other brokers on the
basis of seeking the most favorable price and efficient
execution. Therefore, the Sub-Adviser is authorized to place
orders for the purchase and sale of securities for the Fund with
such brokers, subject to review by the Trust's Board of Trustees
from time to time with respect to the extent and continuation of
this practice. It is understood that the services provided by
such brokers may be useful to the Sub-Adviser in connection with
the Sub-Adviser's services to other clients.

On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other
clients of the Sub-Adviser, the Sub-Adviser, to the extent
permitted by applicable laws and regulations, may, but shall be
under no obligation to, aggregate the securities to be so
purchased or sold in order to obtain the most favorable price or
lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well
as the expenses incurred in the transaction, will be made by the
Sub-Adviser in the manner it considers to be the most equitable
and

<PAGE>

consistent with its fiduciary obligation to the Fund and to such
other clients.

(4) The Sub-Adviser shall maintain all books and records with respect
to the Fund's portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule
31a-1 under the 1940 Act and shall render to the Trust's Board of
Trustees such periodic and special reports as the Trust's Board
of Trustees may reasonably request.

(5) The Sub-Adviser shall provide the Fund's Custodian on each
business day with information relating to all transactions
concerning the Fund's assets and shall provide the Adviser with
such information upon request of the Adviser.

(6) The investment management services provided by the Sub-Adviser
under this Agreement are not to be deemed exclusive and the Sub-
Adviser shall be free to render similar services to others, as
long as such services do not impair the services rendered to the
Adviser or the Trust.

(b) Services to be furnished by the Sub-Adviser under this Agreement may
be furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.

(c) The Sub-Adviser shall keep the Fund's books and records required to be
maintained by the Sub-Adviser pursuant to paragraph 1(a) of this
Agreement and shall timely furnish to the Adviser all information
relating to the Sub-Adviser's services under this Agreement needed by
the Adviser to keep the other books and records of the Fund required
by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all
records that it maintains on behalf of the Fund are property of the
Fund and the Sub-Adviser will surrender promptly to the Fund any of
such records upon the Fund's request; provided, however, that the Sub-
Adviser may retain a copy of such records. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any such records as are required to be maintained by it
pursuant to paragraph 1(a) of this Agreement.

2. The Adviser shall continue to have responsibility for all services to be
provided to the Fund pursuant to the Advisory Agreement and shall oversee
and review the Sub-Adviser's performance of its duties under this Agreement

<PAGE>

3. The Adviser has delivered to the Sub-Adviser copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:

(a) The Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of the Commonwealth of Massachusetts (such
Agreement and Declaration of Trust, as in effect on the date of this
Agreement and as amended from time to time, herein called the
"Declaration of Trust");

(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the "By-
Laws");

(c) Certified resolutions of the Trust's Board of Trustees authorizing the
appointment of the Adviser and the Sub-Adviser with respect to the
Fund, and approving the form of this Agreement;

(d) Registration Statement under the 1940 Act and the Securities Act of
1933, as amended, on Form N-1A (the "Registration Statement"), as
filed with the Securities and Exchange Commission (the "Commission")
relating to the Fund and shares of the Fund's beneficial shares, and
all amendments thereto;

(e) Notification of Registration of the Trust under the 1940 Act on Form
N-8A as filed with the Commission, and all amendments thereto; and

(f) Prospectus of the Fund.

4. For the services to be provided by the Sub-Adviser pursuant to this
Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees
to accept as full compensation therefore a sub-advisory fee at an annual
rate of 0.075% on the first $500 million of the Fund's average daily net
assets and 0.020% on such Fund's average daily net assets in excess of $500
million. These fees will be computed daily and paid to the Sub-Adviser
monthly.

5. The Sub-Adviser shall not be liable for any error of judgment or for any
loss suffered by the Fund or the Adviser in connection with performance of
its obligations under this Agreement, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services
(in which case any award of damages shall be limited to the period and the
amount set forth in Section 36(b)(3) of the 1940 Act), or a loss resulting
from willful misfeasance, bad faith or gross negligence on the Sub-
Adviser's part in the performance of its duties or from reckless disregard
of its

<PAGE>

obligations and duties under this Agreement, except as may otherwise be
provided under provisions of applicable state law which cannot be waived or
modified hereby.

6. This Agreement shall continue in effect for a period of more than two years
from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated (a) by the Fund at any time, without the
payment of any penalty, by the vote of a majority of Trustees of the Trust
or by the vote of a majority of the outstanding voting securities of such
Fund, (b) by the Adviser at any time, without the payment of any penalty,
on not more than 60 days' nor less than 30 days' written notice to the
other parties, or (c) by the Sub-Adviser at any time, without the payment
of any penalty, on 90 days' written notice to the other parties. This
Agreement shall terminate automatically and immediately in the event of its
assignment. As used in this Section 6, the terms "assignment" and "vote of
a majority of the outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and regulations
thereunder, subject to such exceptions as may be granted by the Commission
under the 1940 Act.

7. Nothing in this Agreement shall limit or restrict the right of any of the
Sub-Adviser's partners, officers, or employees to engage in any other
business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or
dissimilar nature, nor limit or restrict the Sub-Adviser's right to engage
in any other business or to render services of any kind to any other
corporation, firm, individual or association.

8. During the term of this Agreement, the Adviser agrees to furnish the Sub-
Adviser at its principal office all prospectuses, proxy statements, reports
to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Fund, the Trust or the public that
refer to the Sub-Adviser or its clients in any way prior to use thereof and
not to use material if the Sub-Adviser reasonably objects in writing within
five business days (or such other period as may be mutually agreed) after
receipt thereof. The Sub-Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to the Sub-
Adviser, its services and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by its employees
or agents or its affiliates that refer to the Sub-Adviser or its clients in
any way are consistent with those materials previously approved by the Sub-
Adviser as referenced in the first sentence of this

<PAGE>

paragraph. Sales literature may be furnished to the Sub-Adviser by first
class or overnight mail, facsimile transmission equipment or hand delivery.

9. No provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought, and no amendment of this Agreement shall be effective until
approved by the vote of the majority of the outstanding voting securities
of the Fund.

10. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.

11. This Agreement embodies the entire agreement and understanding among the
parties hereto, and supersedes all prior agreements and understandings
relating to this Agreement's subject matter. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be
an original, but such counterparts shall, together, constitute only one
instrument.

12. Should any part of this Agreement be held invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors.

13. Any notice, advice or report to be given pursuant to this Agreement shall
be delivered or mailed:

To the Adviser at:

First Hawaiian Bank
1132 Bishop Street
Honolulu, HI 96813
Attention: Legal Department

To the Sub-Adviser at:

Wellington Management Company
75 State Street
Boston, MA 02109
Attention: Legal Department

To the Trust or the Fund at:

Bishop Street Funds
680 East Swedesford Road

<PAGE>

Wayne, PA 19087
Attention: General Counsel

14. Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order of
the Commission, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or
order.

15. A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of
the Trust as Trustees, and that the obligations of this instrument are not
binding upon any of the Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and property of the Trust.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers designated below as of the day and year first written above.

FIRST HAWAIIAN BANK WELLINGTON MANAGEMENT COMPANY

By: /s/Signature Appears Here By: /s/Duncan M. McFarland
-------------------------- --------------------------------
Title: Senior Vice President Title: President
------------------------- -----------------------------

BISHOP STREET FUNDS

By: /s/Kathryn L. Stanton
--------------------------

Title: Vice President
-------------------------

<PAGE>

ADDENDUM DATED FEBRUARY , 1996
TO SUB-ADVISORY AGREEMENT
DATED JANUARY 27, 1995
BETWEEN
FIRST HAWAIIAN BANK, WELLINGTON MANAGEMENT COMPANY
AND
BISHOP STREET FUNDS

<PAGE>
AMENDED AND RESTATED
INVESTMENT SUB-ADVISORY AGREEMENT
BISHOP STREET FUNDS

AGREEMENT made this day of February, 1996, by and among First Hawaiian
Bank, a state-chartered bank incorporated under the laws of the State of Hawaii
(the "Adviser"), Wellington Management Company, a Massachusetts general
partnership (the "Sub-Adviser") and Bishop Street Funds, a Massachusetts
business trust (the "Trust").

WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and

WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated January 27, 1995, as amended, (the "Advisory Agreement") with the Trust,
pursuant to which the Adviser will act as investment adviser to the Bishop
Street Money Market Fund and the Bishop Street Treasury Money Market Fund (the
"Funds"); and

WHEREAS, the Adviser and the Trust each desire to retain the Sub-Adviser to
provide investment management services to the Trust in connection with the
management of the Funds, and the Sub-Adviser is willing to render such
investment advisory services.

NOW, THEREFORE, the parties hereto agree as follows:

1. (a) Subject to supervision by the Adviser and the Trust's Board of
Trustees, the Sub-Adviser shall manage the investment operations of
the Funds and the composition of the Funds' portfolio, including the
purchase, retention and disposition thereof, in accordance with the
Funds' investment objectives, policies and restrictions as stated in
the Funds' Prospectuses (such Prospectuses and the Statement of
Additional Information, as currently in effect and as amended or
supplemented from time to time, being herein called the
"Prospectuses"), and subject to the following:

(1) The Sub-Adviser shall provide supervision of the Funds'
investments and determine from time to time what investments and
securities will be purchased, retained or sold by the Funds, and
what portion of the costs will be invested or held uninvested in
cash.

(2) In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the
Trust's Agreement and Declaration of Trust and the Prospectuses
and with the instructions and directions of the Adviser and of
the Board of Trustees of the Trust and will conform to and comply
with the requirements of the

<PAGE>

1940 Act, the Internal Revenue Code of 1986, as amended, and all
other applicable federal and state laws and regulations, as each
is amended from time to time.

(3) The Sub-Adviser shall determine the securities to be purchased or
sold by the Funds and will place orders with or through such
persons, brokers or dealers to carry out the policy with respect
to brokerage set forth in the Funds' Registration Statement (as
defined herein) and Prospectuses or as the Board of Trustees or
the Adviser may direct from time to time, in conformity with
federal securities laws. In providing the Funds with investment
supervision, the Sub-Adviser will give primary consideration to
securing the most favorable price and efficient execution.
Within the framework of this policy, the Sub-Adviser may consider
the financial responsibility, research and investment information
and other services provided by brokers or dealers who may effect
or be a party to any such transaction or other transactions to
which the Sub-Adviser's other clients may be a party. It is
understood that it is desirable for the Funds that the Sub-
Adviser have access to supplemental investment and market
research and security and economic analysis provided by brokers
who may execute brokerage transactions at higher cost to the
Funds than may result when allocating brokerage to other brokers
on the basis of seeking the most favorable price and efficient
execution. Therefore, the Sub-Adviser is authorized to place
orders for the purchase and sale of securities for the Funds with
such brokers, subject to review by the Trust's Board of Trustees
from time to time with respect to the extent and continuation of
this practice. It is understood that the services provided by
such brokers may be useful to the Sub-Adviser in connection with
the Sub-Adviser's services to other clients.

On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Funds as well as other
clients of the Sub-Adviser, the Sub-Adviser, to the extent
permitted by applicable laws and regulations, may, but shall be
under no obligation to, aggregate the securities to be so
purchased or sold in order to obtain the most favorable price or
lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well
as the expenses incurred in the

<PAGE>

transaction, will be made by the Sub-Adviser in the manner it
considers to be the most equitable and consistent with its
fiduciary obligation to the Fund and to such other clients.

(4) The Sub-Adviser shall maintain all books and records with respect
to the Funds' portfolio transactions required by subparagraphs
(b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule
31a-1 under the 1940 Act and shall render to the Trust's Board of
Trustees such periodic and special reports as the Trust's Board
of Trustees may reasonably request.

(5) The Sub-Adviser shall provide the Funds' Custodian on each
business day with information relating to all transactions
concerning the Fund's assets and shall provide the Adviser with
such information upon request of the Adviser.

(b) Services to be furnished by the Sub-Adviser under this Agreement may
be furnished through the medium of any of the Sub-Adviser's partners,
officers or employees.

(c) The Sub-Adviser shall keep the Funds' books and records required to be
maintained by the Sub-Adviser pursuant to paragraph 1(a) of this
Agreement and shall timely furnish to the Adviser all information
relating to the Sub-Adviser's services under this Agreement needed by
the Adviser to keep the other books and records of the Funds required
by Rule 31a-1 under the 1940 Act. The Sub-Adviser agrees that all
records that it maintains on behalf of the Funds are property of the
Funds and the Sub-Adviser will surrender promptly to the Funds any of
such records upon the Funds' request; provided, however, that the Sub-
Adviser may retain a copy of such records. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any such records as are required to be maintained by it
pursuant to paragraph 1(a) of this Agreement.

2. The Adviser shall continue to have responsibility for all services to be
provided to the Funds pursuant to the Advisory

<PAGE>

Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement

3. The Adviser has delivered to the Sub-Adviser copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:

(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the "By-
Laws");

(c) Certified resolutions of the Trust's Board of Trustees authorizing the
appointment of the Adviser and the Sub-Adviser with respect to the
Fund, and approving the form of this Agreement;

(d) Registration Statement under the 1940 Act and the Securities Act of
1933, as amended, on Form N-1A (the "Registration Statement"), as
filed with the Securities and Exchange Commission (the "Commission")
relating to the Funds and shares of the Funds' beneficial shares, and
all amendments thereto;

(e) Notification of Registration of the Trust under the 1940 Act on Form
N-8A as filed with the Commission, and all amendments thereto; and

(f) Prospectuses of the Funds.

4. For the services to be provided by the Sub-Adviser pursuant to this
Agreement, the Adviser will pay the Sub-Adviser, and the Sub-Adviser agrees
to accept as full compensation therefore a sub-advisory fee at an annual
rate of 0.075% on the first $500 million of the Funds' aggregate average
daily net assets and 0.020% on such Funds' aggregate average daily net
assets in excess of $500 million. These fees will be computed daily and
paid to the Sub-Adviser monthly.

5. The Sub-Adviser shall not be liable for any error of judgment or for any
loss suffered by the Funds or the Adviser in connection with performance of
its obligations under this Agreement, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services
(in which case any award of damages shall be limited to the

<PAGE>

period and the amount set forth in Section 36(b)(3) of the 1940 Act), or a
loss resulting from willful misfeasance, bad faith or gross negligence on
the Sub-Adviser's part in the performance of its duties or from reckless
disregard of its obligations and duties under this Agreement, except as may
otherwise be provided under provisions of applicable state law which cannot
be waived or modified hereby.

6. This Agreement shall continue in effect for a period of more than two years
from January 27, 1995 only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that
this Agreement may be terminated (a) by the Funds at any time, without the
payment of any penalty, by the vote of a majority of Trustees of the Trust
or by the vote of a majority of the outstanding voting securities of such
Fund, (b) by the Adviser at any time, without the payment of any penalty,
on not more than 60 days' nor less than 30 days' written notice to the
other parties, or (c) by the Sub-Adviser at any time, without the payment
of any penalty, on 90 days' written notice to the other parties. This
Agreement shall terminate automatically and immediately in the event of its
assignment. As used in this Section 6, the terms "assignment" and "vote of
a majority of the outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and regulations
thereunder, subject to such exceptions as may be granted by the Commission
under the 1940 Act.

8. During the term of this Agreement, the Adviser agrees to furnish the Sub-
Adviser at its principal office all prospectuses, proxy statements, reports
to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Funds, the Trust or the public that
refer to the Sub-Adviser or its clients in any way prior to use thereof and
not to use material if the Sub-Adviser reasonably objects in writing within
five business days (or such other period as may be mutually agreed) after
receipt thereof. The Sub-Adviser's right to object to such materials is
limited to the portions of such materials that expressly relate to the Sub-
Adviser, its services and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials

<PAGE>

prepared by its employees or agents or its affiliates that refer to the
Sub-Adviser or its clients in any way are consistent with those materials
previously approved by the Sub-Adviser as referenced in the first sentence
of this paragraph. Sales literature may be furnished to the Sub-Adviser by
first class or overnight mail, facsimile transmission equipment or hand
delivery.

10. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.

13. Any notice, advice or report to be given pursuant to this Agreement shall
be delivered or mailed:

To the Adviser at:

First Hawaiian Bank
1132 Bishop Street
Honolulu, HI 96813
Attention: Legal Department

To the Sub-Adviser at:

Wellington Management Company
75 State Street
Boston, MA 02109
Attention: Legal Department

<PAGE>

To the Trust or the Fund at:

Bishop Street Funds
680 East Swedesford Road
Wayne, PA 19087
Attention: General Counsel

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers designated below as of the day and year first written above.

FIRST HAWAIIAN BANK WELLINGTON MANAGEMENT COMPANY

By: By:
---------------------------- -----------------------------------
Title: Title:
------------------------- -------------------------------

BISHOP STREET FUNDS

By:
--------------------------

Title:
-------------------------

<PAGE>

DISTRIBUTION AGREEMENT
BISHOP STREET FUNDS

THIS AGREEMENT is made as of this 27th day of January, 1995 between Bishop
Street Funds (the "Trust"), a Massachusetts business trust and SEI Financial
Services Company (the "Distributor"), a Pennsylvania corporation.

WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 Act"), and its shares (the "Shares") are
registered with the SEC under the Securities Act of 1933, as amended (the "1933
Act"); and

WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and Distributor hereby agree as follows:

ARTICLE 1. SALE OF SHARES. The Trust grants to the Distributor the
exclusive right to sell Shares of the Trust at the net asset value per Share in
accordance with the current prospectus, as agent and on behalf of the Trust,
during the term of this Agreement and subject to the registration requirements
of the 1933 Act, the rules and regulations of the SEC and the laws governing the
sale of securities in the various states (the "Blue Sky Laws").

ARTICLE 2. SOLICITATION OF SALES. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Trust; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares.

ARTICLE 3. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized
by the Trust to give any information or to make any representations other than
those contained in the current registration statements and prospectuses of the
Trust filed with the SEC or contained in Shareholder reports or other material
that may be prepared by or on behalf of the Trust for the Distributor's use.
The Distributor may prepare and distribute sales literature and other material
as it may deem appropriate, provided that such literature and materials have
been approved by an officer of the Trust prior to their use.

ARTICLE 4. REGISTRATION OF SHARES. The Trust agrees that it will take all
action necessary to register Shares under the federal and state securities laws
so that there will be available for sale the number of Shares the Distributor
may reasonably be expected to sell and to pay all fees associated with said
registration. The Trust shall make available to the Distributor such number of
copies of its currently effective prospectus and statement of additional

<PAGE>

information as the Distributor may reasonably request. The Trust shall furnish
to the Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection with
the distribution of Shares of the Trust.

ARTICLE 5. COMPENSATION. As compensation for the services performed and
the expenses assumed under this Agreement relative to Retail Class B shares, and
to the extent provided in the Trust's annual budget under its Retail Class B
shares Distribution Plan adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Trust shall reimburse the Distributor for
(i) the cost of preparing and printing prospectuses and statements of additional
information, reports to Shareholders, sales literature and other materials for
potential investors, (ii) advertising, (iii) expenses incurred in connection
with the distribution of units.

ARTICLE 6. INDEMNIFICATION OF DISTRIBUTOR. The Trust agrees to indemnify
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Trust does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statements or omission was made in reliance upon, and in conformity with,
information furnished to the Trust by or on behalf of the Distributor.

In no case (i) is the indemnity of the Trust to be deemed to protect the
Distributor against any liability to the Trust or its Shareholders to which the
Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Trust of any claim shall not relieve the Trust from any liability
which it may have to the Distributor or any person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph.

The Trust shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Trust and satisfactory to the indemnified defendants in the

<PAGE>

suit whose approval shall not be unreasonably withheld. In the event that the
Trust elects to assume the defense of any suit and retain counsel, the
indemnified defendants shall bear the fees and expenses of any additional
counsel retained by them. If the Trust does not elect to assume the defense of
a suit, it will reimburse the indemnified defendants for the reasonable fees and
expenses of any counsel retained by the indemnified defendants.

The Trust agrees to notify the Distributor promptly of the commencement of
any litigation or proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of its Shares.

ARTICLE 7. INDEMNIFICATION OF TRUST. The Distributor covenants and agrees
that it will indemnify and hold harmless the Trust and each of its Trustees and
officers and each person, if any, who controls the Trust within the meaning of
Section 15 of the Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, damages, claim or expense and reasonable counsel fees incurred in
connection therewith) based upon the 1933 Act or any other statute or common law
and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Shareholder reports or other information
filed or made public by the Trust (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon and in conformity
with information furnished to the Trust by or on behalf of the Distributor.

In no case (i) is the indemnity of the Distributor in favor of the Trust or
any other person indemnified to be deemed to protect the Trust or any other
person against any liability to which the Trust or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Trust or any person
indemnified unless the Trust or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Trust or upon any person (or after the
Trust or such person shall have received notice of service on any designated
agent). However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Trust or any
person against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph.

The Distributor shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the

<PAGE>

defendants in the suit shall bear the fees and expenses of any additional
counsel retained by them. If the Distributor does not elect to assume the
defense of any suit, it will reimburse the indemnified defendants in the suit
for the reasonable fees and expenses of any counsel retained by them.

The Distributor agrees to notify the Trust promptly of the commencement of
any litigation or proceedings against it in connection with the issue and sale
of any of the Trusts' Shares.

ARTICLE 8. EFFECTIVE DATE. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for two
years from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Trustees of the Trust, or the vote of a majority of the outstanding voting
securities of the Trust, and (ii) the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or the Trust's Distribution Plan
or interested persons of any such party (the "Qualified Trustees"), cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As used
in this paragraph the terms "vote of a majority of the outstanding voting
securities", "assignment" and "interested person" shall have the respective
meanings specified in the 1940 Act. In addition, this Agreement may at any time
be terminated without penalty by the Distributor, by a vote of a majority of
Qualified Trustees or by vote of a majority of the outstanding voting securities
of the Trust, upon not less than sixty days prior written notice to the other
party.

ARTICLE 9. NOTICES. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at 680 East Swedesford Road, Wayne, PA, Attention:
Legal Department and if to the Distributor, 680 East Swedesford Road, Wayne, PA
19087, Attention: General Counsel.

ARTICLE 10. LIMITATION OF LIABILITY. A copy of the Declaration of Trust
of the Trust is on file with the Secretary of the Commonwealth of Massachusetts,
and notice is hereby given that this Agreement is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees, officers or
shareholders of the Trust individually but binding only upon the assets and
property of the Trust.

ARTICLE 11. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.

ARTICLE 12. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more

<PAGE>

counterparts, each of which when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the Trust and the Distributor have each duly executed
this Agreement, as of the day and year above written.

BISHOP STREET FUNDS SEI FINANCIAL SERVICES COMPANY

By: /s/Kathryn L. Stanton By: /s/Sandra K. Orlow
--------------------- --------------------------------
Name: Kathryn L. Stanton Name: Sandra K. Orlow
Title: Vice President Title: Vice President

Attest: /s/Signature Appears Here Attest: /s/Signature Appears Here
--------------------------- ---------------------------------

<PAGE>

BISHOP STREET FUNDS

CUSTODIAN AGREEMENT

Bishop Street Funds (the Trust), an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), hereby appoints Chemical Bank (the "Bank") to act as custodian of the
portfolio securities, cash and other property of the Trust from time to time
deposited with or collected by the Bank for the Trust, and the Bank accepts such
appointment, subject to the following terms and conditions contained in this
agreement, as the same may be amended from time to time (the "Agreement").

1. DEFINITIONS.

ACCOUNT. The term "Account" means (i) each separate custodian account
opened in the name of the Trust on the books and records of the Bank to hold
Securities deposited with, transferred to, and collected by, the Bank for the
account of the Trust, and (ii) a general deposit demand cash account to which
the Bank shall credit monies received by the Bank for the account of or from the
Trust, and which is subject only to draft or order by Bank.

DEPOSITORY. The term "Depository" means any depository service which
acts as a system for the central handling of securities where all securities of
any particular class or series of any issuer deposited within the system are
treated as fungible and may be transferred by bookkeeping entry without physical
delivery of the Securities.

PROCEEDS. The term "Proceeds" means interest, dividends, proceeds
from transfers of Securities and other monies and properties received with
respect to the Securities in the Account or upon the sale, exchange, transfer or
other disposition thereof.

SECURITIES. The term "Securities" means U.S. dollar-denominated
stocks, bonds, rights, warrants, and all other negotiable or non-negotiable
paper issued in certificated or book entry form, commonly known as securities in
banking custom or practice, and any Securities-related property.

2. OBLIGATIONS OF TRUST AND BANK. The Trust and the Bank agree to
conduct all activities in connection with this Agreement in accordance with the
Global Securities Services Client Reference Guide, as the same may be amended
from time to time, provided to the Trust by the Bank

3. CONDITIONS PRECEDENT. The obligations of the Bank hereunder are
subject to receipt of a certificate of the Secretary or any Assistant Secretary
of the Trust, contemporaneously dated

<PAGE>

with the date hereof, substantially in the form of Annex A hereto (or in a
substitute form of certificate acceptable to the Bank), which certificate the
Bank shall be entitled to rely upon unless and until a superseding certificate
acceptable to the Bank is received by the Bank.

4. DIRECTIONS. The Bank, acting as agent for the Trust, is
authorized, directed and instructed subject to the further provisions of this
Agreement:

(i) to hold Securities issued only in bearer form in bearer
form;

(ii) to register in the name of the nominee of the Bank, the
Bank's Depositories, or sub-custodians, (A) Securities issued only in registered
form, and (B) Securities issued in both bearer and registered form, which are
freely interchangeable without penalty;

(iii) to deposit any Securities which are eligible for deposit
(a) with any domestic or foreign Depository on such terms and conditions as such
Depository may require, including provisions for limitation or exclusion of
liability on the part of the Depository; and (b)with any sub-custodian which the
Bank uses, including any subsidiary or affiliate of the Bank;

(iv)(a) to credit to the Account all Proceeds received and
payable on or in respect of the Account,

(b) to debit the Account for the cost of acquiring Securities
the Bank has received for the Account, against delivery of such Securities to
the Bank,

(c) to present for payment Securities and other obligations
(including coupons) upon maturity, when called for redemption, and when income
payments are due, and

(d) to make exchanges of Securities which, in the Bank's
opinion, are purely ministerial as, for example, the exchange of Securities in
temporary form for Securities in definitive form or the mandatory exchange of
certificates;

(v) to forward to the Trust, and/or any other person designated
by the Trust, all proxies and proxy materials received by the Bank in connection
with Securities held in the Account, which have been registered in the name of
the Bank's nominee, or are being held by any domestic Depository, or domestic
sub-custodian, on behalf of the Bank;

(vi) to sell any fractional interest of any Securities which the
Bank has received resulting from any stock dividend, stock split, distribution,
exchange, conversion or

<PAGE>

similar activity;

(vii) to release the Trust's name, address and aggregate share
position to the issuers of any domestic Securities in the Account provided,
however, the Trust may instruct the Bank not to provide any such information to
any issuer;

(viii) to endorse and collect an checks, drafts or other orders
for the payment of money received by the Bank for the account of or from the
Trust;

(ix) at the direction of the Trust, to enroll designated
domestic Securities in the Account in a program for the automatic reinvestment
of all income and capital gains distributions on those Securities in new shares
(an "Automatic Reinvestment Program"), or instruct any Depository holding such
Securities to enroll those Securities in an Automatic Reinvestment Program;

(x) at the direction of the Trust, to receive, deliver and
transfer Securities and make payments and collections of monies in connection
therewith, enter purchase and sale orders and perform any other acts incidental
or necessary to the performance of the above acts with brokers, dealers or
similar agents selected by the Trust, including any broker, dealer or similar
agent affiliated with the Bank, for the account and risk of the Trust in
accordance with accepted industry practice in the relevant market, provided,
however, if it is determined that any certificated Securities are not
immediately transferable or if the Customer determines not to transfer any
certificated Securities to a Depository or sub-custodian, the Bank, or the
Bank's nominee, the Bank's sole responsibility for such Securities under this
Agreement shall be to safekeep the Securities in accordance with Section 15
hereof;

(xi) to notify the Trust and/or any other person designated by
the Trust upon receipt of notice by the Bank of any call for redemption, tender
offer, subscription rights, merger, consolidation, reorganization or
recapitalization which (i) appears in The Wall Street Journal (New York
edition), The Standard & Poor's Called Bond Record for Preferred Stocks,
Financial Daily Called Bond Service, The Kenny Services, any official
notifications from The Depository Trust Company and such other publications or
Services to which the Bank may from time to time subscribe, (ii) requires the
Bank to act in response thereto, and (iii) pertain to domestic Securities in the
Account which have been registered in the name of the Bank's nominee or are
being held by a Depository or sub-custodian on behalf of the Bank.
Notwithstanding anything contained herein to the contrary, the Trust shall have
the sole responsibility for monitoring the applicable dates on which Securities
with put option features must be exercised. All solicitation fees payable to the
Bank as agent in connection herewith will be retained by the Bank unless
expressly agreed to

<PAGE>

the contrary in writing by the Bank, and

(xii) to act upon all instructions which reasonably appear to
have been signed, sent or transmitted by any of the persons (each an "Authorized
Person") listed on the certificate referenced in Section 3 hereof as the same
may be amended from time to time.

Notwithstanding anything in this Section 4 to the contrary, the Bank is
authorized to hold Securities for the Trust which have transfer limitations
imposed upon them by the Securities Act of 1933, as amended, or represent shares
of mutual funds (i) in the name of the Trust, (ii) in the name of the Bank's
nominee, or (iii) with any Depository or sub-custodian.

5. REPORTS. The Bank shall furnish to the Trust all such periodic
and special reports as the Trust may request and which are set forth in Exhibit
I hereto.

6. FUNDING OF ACCOUNT. The Trust shall have credited to the Account
prior to the time the Bank must settle for any Securities delivered to the
Account for purchase on any settlement day, sufficient immediately available
funds to pay for such deliveries. Should the Trust fail to have sufficient
immediately available funds in the Account to settle a transaction pursuant to
the preceding sentence (a "Deficit"), the Bank may elect in its sole discretion
(i) to reject the settlement of the transaction, (ii) to settle the transaction
on behalf of the Trust and debit the Account (A) for the amount of such Deficit
and (B) for the amount of the funding or other cost or expense incurred or
sustained by the Bank for the Trust's failure to have sufficient immediately
available funds in the Account by the applicable settlement deadline for the
Bank, or (iii) to reverse the posting of the Securities made to the Account. The
Bank reserves the right to reverse any erroneous or provisional entries to the
Account retroactively to the date upon which the correct entry, or no entry,
should have been made. The foregoing rights of the Bank are in addition to and
not in limitation of any other rights or remedies available to it under this
Agreement or otherwise.

No prior action or course of dealing on the part of the Bank with
respect to the settlement of Securities transactions on behalf of the Trust
shall be used by or give rise to any claim or action by the Trust against the
Bank for the Bank's refusal to pay or settle for a Securities transaction the
Trust has not timely funded as required herein.

7. INSTRUCTIONS. Any instruction given by the Trust to the Bank
pursuant to this Agreement, may, in the Bank's discretion, be written, oral, by
telephone, facsimile or electronic communication including but not limited to
S.W.I.F.T. and tested telex (collectively the "Authorized Means") which the Bank
reasonably believes to be genuine and which is received by the Bank

<PAGE>

at the address listed in Section 21 hereof. Written confirmations, if any, of
oral instructions provided by the Trust shall in no way affect any action taken
by the Bank in reasonable reliance upon the oral instructions. Instructions from
any Authorized Person shall be deemed to be instructions from the Trust for any
purpose herein. The Bank shall not be obligated to act upon, or be liable for
failure to act upon, any instruction or any cancellation or modification of an
instruction received after the Bank's published cut-off time for transactions.

8. DEPOSITORIES AND SUB-CUSTODIANS. Any Securities deposited with
any Depository or with any sub-custodian will be represented in accounts in the
name of the Bank which include only property held by the Bank as custodian for
customers in which the Bank acts in a fiduciary or agency capacity.

Should any Securities which are forwarded to the Bank by the Trust,
and which are subsequently deposited to the Bank's account in any Depository or
with any sub-custodian, or which the Trust may arrange to deposit in the Bank's
account in any Depository or with any sub-custodian, not be deemed acceptable
for deposit by such Depository or sub-custodian, for any reason, and as a result
thereof there is a short position in the account of the Bank with the Depository
for such Security the Trust agrees to furnish the Bank immediately with like
Securities in acceptable form. Further, the Bank is authorized to charge the
Account for any cost to the Bank to replace such Securities, and any replacement
and/or penalty fees imposed by the Depository or sub-custodian.

Should any Securities of the Trust held in any Depository or with any
sub-custodian be called for a partial redemption by the issuer of such
Securities, the Bank is authorized to allot the called portion to the respective
holders in any manner deemed to be fair and equitable in the Bank's judgment.

9. TRUST'S REPRESENTATIONS AND WARRANTIES. The Trust represents and
warrants that:

(i) the Trust is authorized to open the Account and to exercise all
incidents of ownership with respect to the Securities held in the Account;

(ii) the Trust is a Mutual Fund duly authorized and validly existing
under the laws of the Commonwealth of Massachusetts;

(iii) and, the Trust shall comply with Federal Reserve Act Regulations
G, T, U and X as such Regulations apply to its activities under this Agreement.

The Trust further represents and warrants that: (i) it has the legal
right, power and authority to execute, deliver and perform this Agreement and to
carry out all of the transactions

<PAGE>

contemplated hereby; (ii) it has obtained all necessary authorizations; (iii)
the execution, delivery and performance of this Agreement and the carrying out
of any of the transactions contemplated hereby will not be in conflict with,
result in a breach of or constitute a default under any agreement or other
instrument to which the Trust is a party or which is otherwise known to the
Trust; (iv) it does not require the consent or approval of any governmental
agency or instrumentality, except any such consents and approvals which the
Trust has obtained; (v) the execution and delivery of this Agreement by the
Trust will not violate any law, regulation, charter, by-law, order of any court
or governmental agency or judgment applicable to the Trust; and (vi) all persons
executing this Agreement on behalf of the Trust and carrying out the
transactions contemplated hereby on behalf of the Trust are duly authorized to
do so. In the event any of the foregoing representations should become untrue,
incorrect or misleading, the Trust agrees to notify the Bank immediately in
writing thereof.

10. All Securities shall be U.S. dollar-denominated and of U.S.
origin.

11. BANK'S REPRESENTATIONS AND WARRANTIES. The Bank represents and
warrants that: (i) it has the legal right, power and authority to execute,
deliver and perform this Agreement and to carry out all of the transactions
contemplated hereby; (ii) it has obtained all necessary authorizations; (iii)
the execution, delivery and performance of this Agreement and the carrying out
of any of the transactions contemplated hereby will not be in conflict with,
result in a breach of or constitute a default under any agreement or other
instrument to which the Bank is a party or which is otherwise known to the Bank;
(iv) it does not require the consent or approval of any governmental agency or
instrumentality, except any such consents and approvals which the Bank has
obtained; (v) the execution and delivery of this Agreement by the Bank will not
violate any law, regulation, charter, by-law, order of any court or governmental
agency or judgment applicable to the Bank; and (vi) all persons executing this
Agreement on behalf of the Bank and carrying out the transactions contemplated
hereby on behalf of the Bank are duly authorized to do so. In the event that
any of the foregoing representations should become untrue, incorrect or
misleading, the Bank agrees to notify the TRUST immediately in writing thereof.

12. RECORDS. The Bank shall maintain appropriate regular business
records relating to its duties hereunder. The books and records pertaining to
the Trust which are in the possession of the Bank shall be the property of the
Trust. Such books and records shall be prepared and maintained as required by
Rules 31-A-1 and 31-A-2 of the 1940 Act and other applicable securities laws and
rules and regulations. The Trust or its authorized representatives shall have
access to such books and records at all times during the Bank's normal business
hours.

<PAGE>

13. COMPENSATION. The Trust agrees to pay the Bank compensation for
its services hereunder at the fees stated in Exhibit 2 hereto, and the Bank is
authorized to charge the Account for such compensation. All expenses and taxes
payable with respect to the Securities in the Account including, without
limitation, commission charges on purchases and sales and the amount of any loss
or liability for stockholders' assessments or otherwise, claimed or asserted
against the Bank or against the Bank's nominee by reason of any registration
hereunder shall be charged to the Trust.

14. INVESTMENT ADVICE. The Bank shall not supervise, recommend or
advise the Trust relative to the investment, purchase, sale, retention or other
disposition of any property held hereunder unless provided for by separate
written agreement.

15. STANDARD OF CARE. All Securities held by the Bank in the Account
shall be kept with the care exercised as to the Bank's own similar property, but
the Bank assumes entire responsibility for loss of the property occasioned by
reason of the negligence of, or robbery, burglary or theft by, its employees,
agents or sub-custodians. The Bank may at its option insure itself against loss
from any cause but shall be under no obligation to insure for the benefit of the
Trust.

16. BANK'S LIABILITY. The Bank shall be under no duty to take or omit
to take any action with respect to any property held in the Account, except in
accordance with Sections 2 and 4 hereof. The Bank shall have no liability to
the Trust with respect to losses suffered by the Trust in connection with,
arising out of or in any way related to the transactions contemplated and
relationship established by this Agreement, or any act, omission or event
occurring in connection herewith, unless such losses were the direct result of
acts or omissions on the part of the Bank or any of its sub-custodians
constituting negligence or willful misconduct. Notwithstanding anything
contained herein to the contrary, the Bank shall not be responsible for any
expense, loss or damage to the Trust caused from events beyond the reasonable
control of the Bank, including but not limited to such events as war, natural
disaster, civil strife, labor disputes or closure or disruption of any market.
The term "sub-custodian" as used in this Agreement shall not mean or include the
Federal Reserve Bank of New York, The Depository Trust Company, Participants
Trust Company, or any other Depositories or systems for the central handling of
Securities, or equivalent book-based entries in which Securities deposited by
issuers are treated as fungible and may be transferred or pledged exclusively by
bookkeeping entry. The Bank shall have no liability with respect to, and the
Trust hereby waives, releases and agrees not to sue upon any claims for any
special, speculative, indirect or consequential damages suffered by the Trust in
connection with the transactions contemplated and the relationship established
by this Agreement even if the Bank is advised as to the possibility thereof.

<PAGE>

All payments for which the Bank shall be liable in connection with
this Agreement shall be computed and payable in U.S. Dollars.

17. INDEMNIFICATION. The Trust agrees to indemnify the Bank for, and
hold it harmless from and against, any claim, loss, liability, damage or expense
in connection with, arising out of or in any way related to any action or thing
which the Bank takes, does or omits to do (1) at the request of the Trust, or
(2) upon instructions, except that the Trust shall not be liable for any loss,
liability, damage or expense that is determined to be the direct result of acts
or omissions on the part of the Bank or any of its sub-custodians constituting
negligence or willful misconduct.

18. TAXES. The Trust agrees to pay, indemnify, and hold harmless the
Bank from and against any and all liabilities, penalties, interest or additions
to tax with respect to, or resulting from, any delay in, or failure by, the Bank
(i) to pay, withhold or report any Federal, state or foreign taxes imposed on,
or in respect of, the property held in the Account, or this Agreement, or (ii)
to report interest, dividend or other income paid or credited to the Account,
whether such failure or delay by the Bank to pay, withhold or report tax or
income is a result of the Bank's own acts or omissions, provided, however, the
Trust shall not be liable to the Bank for any penalty or additions to tax due as
a result of the Bank's failure to pay or withhold tax or to report to the
Customer interest, dividend or other income paid or credited to the Account
solely as a result of the Bank's negligent acts or omissions.

19. SUBROGATION. Should the Bank, for any reason, extend its own
funds to the Trust to complete a pending Securities transaction or to reimburse
the Trust in respect of such a transaction in connection with this Agreement,
the Trust agrees to execute and deliver to the Bank, upon the Bank's request,
all contracts, documents, and other papers and information in connection with
such transaction, and to take all other action reasonably requested by the Bank
and necessary to enable the Bank to enforce, in the Bank's own name or in the
name of the Trust, any rights the Trust may have against the Trust's
counterparty.

20. SEGREGATION AND LIEN.

SEGREGATION OF SECURITIES. The Trust's own Securities ("Proprietary
Securities") shall be maintained in a separate Account or Accounts with the Bank
in which the Trust shall maintain only Proprietary Securities (each such Account
a "Proprietary Securities Account"). Any Account which is not clearly designated
by the Trust on the Bank's records as a non Proprietary Securities Account shall
be treated by the Bank as a Proprietary Securities Account holding Proprietary
Securities for all purposes of this Agreement, including this Section 20.

<PAGE>

SECURITIES ACCOUNT. The Trust hereby pledges, assigns and grants to
the Bank a continuing security interest in, and a lien on the Securities and any
Proceeds thereof and any other monies in any Securities Account and any
Securities and Proceeds otherwise in the possession or under the control of the
Bank for credit to such Account, and the Bank shall have all of the rights and
remedies of a secured party under the New York Uniform Commercial Code, as
security for any and all obligations, matured or not matured, absolute or
contingent, now due or hereafter to become due of the Trust to the Bank pursuant
to this Agreement.

SET-OFF. The Bank may, upon notice to the Trust, setoff any sums held
for the Trust or standing to the credit of any of the Trust's cash accounts with
the Bank (other than an account to which the Bank has waived in writing its
right of set-off), in or towards the satisfaction of any obligation of the Trust
to the Bank under this Agreement, whether or not any such sums or credits or
obligations are matured or unmatured direct or indirect, absolute or contingent.

RIGHTS OF THE BANK. Any provision of this Section 20 shall not be
deemed or construed to limit the rights of the Bank pursuant to any other
agreement of the Trust with the Bank.

21. NOTICES. All communications (other than instructions pursuant to
Section 6 hereof) which are to be furnished hereunder to either party, or under
any amendment hereto, shall be sent by mail to the address listed below,
provided that in the event that the Bank, in its sole discretion, shall
determine that an emergency exists, the Bank may use such other means of
communications as the Bank deems advisable.

To the Customer: Bishop Street Funds
-------------------
680 E. Swedesford Road
----------------------
Wayne, PA 19087
----------------------
Attn: Legal Department
-----------------------

To the Bank: Chemical Bank
Customer Securities Services
4 New York Plaza
New York, New York 10004
Attention: (Customer's designated
account administrator)

22. WAIVERS AND AMENDMENTS. This Agreement, and any amendment
hereto, may be amended and the terms and conditions hereof may be waived, only
by a written instrument signed by the Bank and the Trust. References to this
Agreement herein, or in any amendment hereto, shall be to this Agreement, as
amended from time

<PAGE>

to time. Any waiver shall be effective only in the specific instance and for the
purpose for which given.

23. COUNTERPARTS. This Agreement, and any amendment hereto, may be
executed in several counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same instrument.

24. HEADINGS. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

25. TERMINATION. This Agreement shall remain in force until
expressly terminated in a writing specifying a date at least 90 days after the
date of receipt by the non-terminating party, sent by registered mail by either
party to the other. The Trust shall promptly appoint a successor custodian,
which custodian shall be a bank in good standing with the legal capacity to act
as custodian for the Trust. Upon receipt of written instructions from the Trust,
the Bank shall deliver all monies of the Trust it may then be holding hereunder
directly to the successor custodian, shall take all steps necessary to transfer
all certified securities held hereunder to the successor custodian, and shall
further cause the Trust's book-entry securities to be re-registered in the name
of the successor custodian. The Bank shall have the right to withhold an amount
equal to the amount due and owing to the Bank prior to effecting any such
transfer or registration. The Bank shall cease to have any liability to the
Trust or responsibility for any Securities in the Account (other than to
safekeep the Securities) that may remain with the Bank after the termination
date.

26. SURVIVAL. The Trust's and the Bank's rights and obligations
under Section 1 hereof shall survive the termination of this Agreement.

27. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Trust and the Bank relating to the subject matter hereof and
supersedes all prior agreements, representations and understandings, if any,
relating to such subject matter. No other agreement, statement or promise made
by any party to any employee, officer or agent of any party, which is not
contained in this Agreement shall be binding or valid.

28. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Bank and the Trust and their respective successors
and assigns, except that neither party hereto may transfer or assign this
Agreement or any of its rights or interest hereunder without the prior written
consent of the other party except as provided in Section 36 hereof.

29. SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement or any amendment

<PAGE>

hereto, should be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein or therein shall in no way be affected, prejudiced or disturbed thereby.

30. FURTHER ASSURANCES. Each of the parties shall execute such
documents and other papers and take such further actions as may reasonably be
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.

31. GOVERNING LAW. This Agreement, and any amendments hereto, shall
be governed, construed and interpreted in accordance with the laws of the State
of New York applicable to agreements made and to be performed entirely within
such State.

32. RESERVATION OF RIGHT. The Bank reserves the right not to
accept for deposit to the Account any Security which is in a form or condition
which the Bank, in its sole discretion, determines not to be suitable for the
services it provides under this Agreement.

33. ADDITIONAL ACCOUNTS. If the Bank hereafter is instructed to open
one or more additional custody accounts for the Trust, unless the Bank and the
Trust shall otherwise expressly agree, such accounts shall be governed by the
provisions of this Agreement.

34. ADDITIONAL DUTIES. If the Trust shall ask the Bank to perform any
duties or responsibilities not specifically set forth in this Agreement and the
Bank chooses to perform such additional duties or responsibilities, the Bank
shall be held to the same standard of care and shall be entitled to all the
protective provisions (including but not limited to limitation on liability and
indemnification) set forth herein.

35. MASSACHUSETTS BUSINESS TRUST - LIMITATION OF LIABILITY. A copy of
the Trust's Agreement and Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as trustees and
not individually and that the obligations of this instrument are not binding
upon any of the Trustees, officers or shareholders of the Trust individually,
but binding only the assets and property of the Trust.

36. MERGER. Any corporation or banking association into which the
Bank may be merged or with which the Bank may be consolidated, or any
corporation or banking association resulting from any merger or consolidation to
which the Bank shall be a party, or any corporation or banking association
succeeding to the Bank's business, shall succeed to all its rights, obligations
and immunities hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto,

<PAGE>

anything herein to the contrary notwithstanding, PROVIDED, HOWEVER, in every
case that said successor corporation or banking institution or association
maintains the qualifications set out in Section 17(f) of the 1940 Act.

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of this 24th day of October, 1994.

Bishop Street Funds
-------------------
By: /s/ signature appears here
--------------------------
Name: Kathryn L. Stanton
-------------------
Title: Vice President
---------------

Accepted By:

CHEMICAL BANK

By: /s/ signature appears here
--------------------------
Name: Frank Decicco

Title: Vice President

<PAGE>

Annex A

BISHOP STREET FUNDS
ASSISTANT SECRETARY'S CERTIFICATE

The undersigned, a duly elected Assistant Secretary of Bishop Street
Funds, a Massachusetts business trust (the "Trust"), does hereby certify that:

1. The following resolution was adopted at a meeting of the Board of
Trustees of the Trust on August 5, 1994:

VOTED: That Chemical Bank, as custodian to the Trust, is authorized to
act on the written, telephoned or telegraphed instructions of any
one of the following persons, each of whom is authorized to issue
Proper Instructions as defined in the Custody Agreement, provided
that all telephoned or telegraphed instructions are confirmed in
writing:

Any Officer of the Trust

SEI Employees

John Alshefski Jean Young
Bob DellaCroce Jack McCue
Jeffrey Cohen
Anthony Fischer

Employees of First Hawaiian Bank

Linda Kaita Catherine Rice Marlinda Boter
Richard Chaves Mark Yoshida Ruby Matsumoto
Elizabeth Navarro Lori Kiyabu Keith Katsuda
Denise Dicho Edith Alegria Lani Guillermo
Pauline Dela Cruz Cecilia Pimmel Frank Tanralil
Susan Ramelb Dinah Calvez Orest Saikevych
Fran Duhaylonsod Maria Lagadon Jamie Tovstein

Employees of Wellington Management Company

John Keogh Jerry Tucker Fran O'Shea
Tim Smith Lisa White Mary Ann Tynan
Annette Bagley Kevin Blake
Peter Curry Peter Curry
John Gooch John Gooch
Katherine Han Julie Jenkins Hadden
Shannon Shields Christine Manfredi

Employees of Supervised Service Company

Douglas Anderson Brian O'Hare
Robert Ciarlelli Frank Salerno

<PAGE>

Sal DiRosa Sharon Scheid
Gary Johnson Karen Schultz
Patrick Meikel

2. The foregoing resolution has not been amended, modified or revoked and
is in full force and effect on the date hereof.

IN WITNESS WHEREOF, the undersigned has executed this Assistant Secretary's
Certificate as of the 24th day of October, 1994.

/s/ signature appears here
--------------------------
Name: Kevin P. Robins
Title: Assistant Secretary

<PAGE>

EXHIBIT 1

THE BANK SHALL FURNISH THE FOLLOWING REPORTS TO THE TRUST:

(a) A monthly statement summarizing all transactions and entries for the
Account;

(b) A monthly report of Securities belonging to the Trust showing the market
value at the end of such month;

(d) Special reports, as reasonably requested by the Trust.

<PAGE>

EXHIBIT 2

FEES

The following represents proposed custodian charges for the First Hawaiian
mutual funds:

ASSET FEES
- ----------
- - Asset charges .5 b.p.

TRANSACTION FEES
- ----------------

- - Book Entry $4.50
- - Physical $10.00
- - PTC $10.00
- - Wires $10.00
(incoming/outgoing)

<PAGE>

03 1359* (8-79)

CERTIFICATION OF OFFICERS

September 2, 1994

I, the undersigned, DO HEREBY CERTIFY to Chemical Bank,
________________________________ that the Present Officers of
Bishop Street Funds duly elected to hold office until their
respective successors are chosen, and empowered to act for and on
behalf of this Corporation in any of its business with the said
Bank within the authority prescribed in the resolutions heretofore
certified to the said Bank, are

NAME TITLE

David G. Lee President & Chief
Executive Officer
Carmen V. Romeo Treasurer & Assistant
Secretary
Sandra K. Orlow Vice President &
Assistant Secretary
Kevin P. Robins Vice President &
Assistant Secretary
Robert B. Carroll Vice President &
Assistant Secretary
Kathryn L. Stanton Vice President &
Assistant Secretary
Jeffrey A. Cohen Controller & Chief Acct.
Officer
John H. Grady, Jr. Secretary
Allison E. Koebig Assistant Secretary
Christine Trecroci Assistant Secretary
Richard W. Grant Assistant Secretary

IN WITNESS WHEREOF, I have hereunto set my hand as Secretary and
affixed the Corporate Seal this 2nd day of September, 1994.

SEAL /s/ signature appears here
--------------------------
Assistant Secretary

<PAGE>
ADMINISTRATION AGREEMENT
BISHOP STREET FUNDS

THIS AGREEMENT is made as of this 27th day of January, 1995, by and
between the Bishop Street Funds (the "Trust"), a Massachusetts business
trust, and SEI Financial Management Corporation (the "Administrator"), a
Delaware corporation.

WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several series of shares; and

WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide, management, shareholder services and
administrative services to such portfolios of the Trust as the Trust and the
Administrator may agree on (the "Portfolios") and as listed on the schedule(s)
attached hereto (the "Schedule") and made a part of this Agreement, on the terms
and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:

ARTICLE 1. RETENTION OF THE ADMINISTRATOR. The Trust hereby retains
the Administrator to act as the administrator of the Portfolios and to furnish
the Portfolios with the management and administrative services as set forth
below. The Administrator hereby accepts such employment to perform the duties
set forth below.

The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.

ARTICLE 2. ADMINISTRATIVE SERVICES. The Administrator shall perform or
supervise the performance by others of administrative services in connection
with the operations of the Portfolios, and, on behalf of the Trust, will
investigate, assist in the selection of and conduct relations with custodians,
depositories, accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Portfolios' operations. The Administrator
shall provide the Trustees of the Trust with such reports regarding investment
performance as they may reasonably request but shall have no responsibility for
supervising the performance by any investment adviser or sub-adviser of its
responsibilities.

The Administrator shall provide the Trust with regulatory reporting, fund
accounting and related portfolio accounting services, all necessary office
space, equipment, personnel compensation and facilities (including facilities
for Shareholders' and Trustees' meetings) for handling the affairs of the
Portfolios and such other services as the Administrator shall, from time to
time, determine to be necessary to perform its obligations under this Agreement.

<PAGE>

The Administrator shall make reports to the Trust's Trustees concerning the
performance of its obligations hereunder; furnish advice and recommendations
with respect to other aspects of the business and affairs of the Portfolios as
the Trust and the Administrator shall determine desirable; and shall provide the
Portfolios' Shareholders with the reports described in the Portfolios' then
current prospectuses.

The Administrator shall calculate the daily net asset value of the
Portfolios in accordance with the procedures prescribed in the Trust's
Registration Statement and such other procedures as may be established by the
Trustees of the Trust.

The Administrator shall answer such correspondence and inquiries from
Shareholders, securities brokers and others relating to its duties hereunder and
such other correspondence and inquiries as may from time to time on such terms
as may be mutually agreed upon between the Administrator and the Fund.

Also, the Administrator may perform other services for the Trust as agreed
from time to time, including, but not limited to, preparation and mailing of
appropriate Federal income tax forms and returns to the Internal Revenue Service
and other appropriate taxing authorities for all of which the Trust will pay the
Administrator's out-of-pocket expenses.

ARTICLE 3. ALLOCATION OF CHARGES AND EXPENSES.

(A) THE ADMINISTRATOR. The Administrator shall furnish at its own expense
the executive, supervisory and clerical personnel necessary to perform its
obligations under this Agreement. The Administrator shall also provide the items
which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Trust retained by the Trustees of the Trust
to perform services on behalf of the Trust.

(B) THE TRUST. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust not otherwise allocated herein, including, without
limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the cost of custodial
services, the cost of pricing services, the cost of initial and ongoing
registration of the Shares under Federal and state securities laws, fees and
out-of-pocket expenses of Trustees who are not affiliated persons of the
Administrator or the investment adviser to the Trust or any affiliated
corporation of the Administrator or the investment adviser, insurance, interest,
brokerage costs, litigation and other extraordinary or nonrecurring expenses,
and all fees and charges of investment advisers to the Trust.

<PAGE>

ARTICLE 4. COMPENSATION OF THE ADMINISTRATOR.

(A) ADMINISTRATION FEE. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Trust shall pay to the Administrator compensation at an annual
rate specified in the Schedule. Such compensation shall be calculated and
accrued daily, and paid to the Administrator monthly. The Trust shall also
reimburse the Administrator for its reasonable out of pocket expenses, including
the travel and lodging expenses incurred by officers and employees of the
Administrator in connection with attendance at meetings of the Board of
Trustees.

If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, the Administrator's compensation
for that part of the month in which this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Payment of the Administrator's compensation for the preceding month shall
be made promptly.

(B) COMPENSATION FROM TRANSACTIONS. The Trust hereby authorizes any entity
or person associated with the Administrator which is a member of a national
securities exchange to effect any transaction on the exchange for the account of
the Trust which is permitted by Section 11 (a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Trust hereby consents to the
retention of compensation for such transactions in accordance with Rule 11a2-
2(T) (a) (2) (iv).

(C) SURVIVAL OF COMPENSATION RATES. All rights of compensation under this
Agreement for services performed as of the termination date shall survive the
termination of this Agreement.

ARTICLE 5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable law which
cannot be waived or modified hereby. (As used in this Article 5, the term
"Administrator" shall include directors, officers, employees and other corporate
agents of the Administrator as well as that corporation itself.)

So long as the Administrator acts in good faith and with due diligence and
without gross negligence, the Trust assumes full responsibility and shall
indemnify the Administrator and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of said
administration, transfer agency, and dividend disbursing relationships to the
Trust or any other service rendered to the Trust hereunder. The

<PAGE>

indemnity and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.

The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or hold the
Administrator harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust, but failure to do so in good faith shall not affect the rights
hereunder.

The Administrator may apply to the Trust at any time for instructions and
may consult counsel for the Trust or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.

Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Administrator be held to have
notice of any change of authority of any officers, employee or agent of the
Trust until receipt of written notice thereof from the Trust.

ARTICLE 6. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Trustees, officers, employees
and Shareholders of the Trust are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
and its counsel are or may be or become similarly interested in the Trust, and
that the Administrator may be or become interested in the Trust as a Shareholder
or otherwise.

ARTICLE 7. DURATION OF THIS AGREEMENT. The Term of this Agreement
shall be as specified in the Schedule.

This Agreement shall not be assignable by either party without the written
consent of the other party.

ARTICLE 8. AMENDMENTS. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Trustees of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Trustees meeting called
for the purpose of voting on such approval.

<PAGE>

For special cases, the parties hereto may amend such procedures set forth
herein as may be appropriate or practical under the circumstances, and the
Administrator may conclusively assume that any special procedure which has been
approved by the Trust does not conflict with or violate any requirements of its
Declaration of Trust, By-Laws or then current prospectuses, or any rule,
regulation or requirement of any regulatory body.

ARTICLE 9. TRUSTEES' LIABILITY. A copy of the Declaration of Trust of the
Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or Shareholders of the Trust individually, but binding only upon the
assets and property of the Trust.

ARTICLE 10. CERTAIN RECORDS. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and 31a-
2 under the 1940 Act which are prepared or maintained by the Administrator on
behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.

In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Trust has
agreed to indemnify the Administrator against such liability.

ARTICLE 11. DEFINITIONS OF CERTAIN TERMS. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.

ARTICLE 12. NOTICE. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at 680 East Swedesford Road, Wayne, PA 19087-1658,
Attention Legal Department and if to the Administrator at 680 East Swedesford
Road, Wayne, PA 19087-1658, Attention: Legal Department.

ARTICLE 13. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.

<PAGE>

ARTICLE 14. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

BISHOP STREET FUNDS

By: /s/Kathryn L. Stanton Attest: /s/Signature Appears Here
------------------------------- -------------------------
Name: Kathryn L. Stanton
Title: Vice President

SEI FINANCIAL MANAGEMENT CORPORATION

By: /s/Sandra K. Orlow Attest: /s/Signature Appears Here
------------------------------- -------------------------
Name: Sandra K. Orlow
Title: Vice President

<PAGE>

SCHEDULE DATED JANUARY 27, 1995
TO THE ADMINISTRATION AGREEMENT
DATED JANUARY 27, 1995
BETWEEN
BISHOP STREET FUNDS
AND
SEI FINANCIAL MANAGEMENT CORPORATION

Fees: Pursuant to Article 4, Section A, the Trust shall pay the
Administrator compensation for services rendered to the Bishop
Street High Grade Income Fund, Bishop Street Hawaii Tax-Free
Fund, Bishop Street Equity Fund and Bishop Street Money Market
Fund (the Funds") at an annual rate of .20% of the average daily
net assets of the Funds, which is calculated daily and paid
monthly.

Term: Pursuant to Article 7, the term of this Agreement shall commence
on January , 1995 and shall remain in effect for 3 years (the
"Initial Term"). This Agreement shall continue in effect for
successive periods of 1 year after the Initial Term, unless
terminated by either party on not less than 90 days prior written
notice to the other party. In the event of a material breach of
this Agreement by either party, the non-breaching party shall
notify the breaching party in writing of such breach and upon
receipt of such notice, the breaching party shall have 45 days to
remedy the breach or the non-breaching party may immediately
terminate this Agreement.

<PAGE>

TRANSFER AGENCY AGREEMENT

This Agreement made as of the 30th of January, 1995, by and between Bishop
Street Funds (hereinafter referred to as the "Trust") a Massachusetts business
trust, having its principal office and place of business at 2 Oliver Street,
Boston, MA 02181 and Supervised Service Company, Inc. (hereinafter referred to
as the "Transfer Agent") a Delaware corporation having its principal office and
place of business at 120 South LaSalle, Chicago, Illinois 60603.

W I T N E S S E T H :

That for and in consideration of the mutual promises hereinafter set forth, the
parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS

Whenever used in this Agreement, the following words and phrases shall have the
following meanings:

l. "Approved Institution" shall mean an entity so named in a Certificate.
From time to time, the Trust may amend a previously delivered Certificate by
delivering to the Transfer Agent a Certificate naming an additional entity or
deleting an existing one.

2. The "Board of Trustees" shall mean the Board of Trustees of the Trust.

3. "Certificate" shall mean any notice, instruction, or other instrument
in writing, authorized or required by this Agreement to be given to the Transfer
Agent by the Trust which is signed by any Officer and actually received by the
Transfer

<PAGE>

Agent.

4. "Custodian" shall mean the financial institution appointed as
custodian under the terms and conditions of the Custody Agreement between the
financial institution and the Trust, or its successor(s).

5. "Trust Business Day" shall be deemed to be each day on which the New
York Stock Exchange, Inc. is open for trading.

6. "Officer" shall be deemed to be the Trust's President, Vice President,
Secretary, Treasurer, Controller, Assistant Controller, Assistant Treasurer,
Assistant Secretary, and any other person duly authorized by the Board of
Trustees to execute any Certificate, instruction, notice or other instrument on
behalf of the Trust and named in the Certificate annexed hereto as Appendix A,
as such Certificate may be amended from time to time, and any person reasonably
believed by the Transfer Agent to be such a person.

7. "Out-of-Pocket Expenses" means amounts reasonably necessary and
actually incurred by Transfer Agent in the provision of Transfer Agent services
or pursuant to this Agreement for the following purposes: postage, envelopes,
check forms, continuous forms, forms for reports and statements, stationery, and
other similar items, telephone and telegraph charges incurred in answering
inquiries from dealers or shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent storage of records
and cost of insertion of materials in mailing envelopes by outside firms, any
charges associated with

2
<PAGE>

special or exception processing and such other expenses as are paid or incurred
by Transfer Agent at the request of the Trust. Transfer Agent may, at its
option, arrange to have various service providers submit invoices directly to
the Trust for payment of out-of-pocket expenses reimbursable hereunder.

8. "Prospectus" shall mean the most recent Trust prospectus actually
received by the Transfer Agent from the Trust with respect to which the Trust
has indicated a registration statement under the Federal Securities Act of 1933
has become effective, including the Statement of Additional Information,
incorporated by reference therein.

9 "Shares" shall mean all or any part of each class or series of the
shares of beneficial interest of the Trust or Portfolio listed in the
Certificate as to which the Transfer Agent acts as transfer agent hereunder, as
may be amended from time to time, which are authorized and/or issued by the
Trust.

10. "Transfer Agent" shall mean Supervised Service Company, Inc., ("SSC"),
as transfer agent and dividend disbursing agent under the terms and conditions
of this Agreement, its successor(s) or assign(s).

ARTICLE II
APPOINTMENT OF TRANSFER AGENT

1. The Trust hereby constitutes and appoints the Transfer Agent as
transfer agent of all the Shares of the Trust and as dividend disbursing agent
during the period of this Agreement.

2. The Transfer Agent hereby accepts appointment as transfer

3
<PAGE>

agent and dividend disbursing agent and agrees to perform duties thereof as
hereinafter set forth.

3. In connection with such appointment, the Trust upon the request of the
Transfer Agent, shall deliver the following documents to the Transfer Agent:

(i) A copy of the Declaration of Trust of the Trust and all amendments
thereto certified by the Secretary of the Trust;

(ii) A copy of the By-Laws of the Trust certified by the Secretary of
the Trust;

(iii) A copy of a resolution of the Board of Trustees of the Trust
certified by the Secretary of the Trust appointing the Transfer Agent and
authorizing the execution of this Transfer Agency Agreement;

(iv) A Certificate signed by the Secretary of the Trust specifying:
the number of authorized Shares, the number of such authorized Shares issued,
the number of such authorized Shares issued and currently outstanding; the names
and specimen signatures of the Officers of the Trust; and the name and address
of the legal counsel for the Trust;

(v) Copies of the Trust's Registration Statement, as amended to date,
and the most recently filed Post-Effective Amendment thereto, filed by the Trust
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, and under the Investment Company Act of 1940, as amended, together with
any applications filed in connection therewith; and

(vi) Opinion of counsel for the Trust with respect to the validity of
the authorized and outstanding Shares, whether

4
<PAGE>

such Shares are fully paid and non-assessable and the status of such Shares
under the Securities Act of 1933, as amended, and any other applicable federal
law or regulation (i.e., if subject to registration, that they have been
registered and that the Registration Statement has become effective or, if
exempt, the specific grounds therefor).

ARTICLE III
ISSUANCE,
REDEMPTION AND TRANSFER OF SHARES

1. (a) The Transfer Agent acknowledges that it has received a copy of
the Trust's Prospectus, which Prospectus describes how sales and redemption of
shares of the Trust shall be made, and the Transfer Agent agrees to accept
purchase orders and redemption requests with respect to Trust shares on each
Trust Business Day in accordance with such Prospectus. The Trust agrees to
provide the Transfer Agent with sufficient advance notice to enable the Transfer
Agent to effect any changes in the procedures set forth in the Prospectus
regarding such purchase and redemption procedure; provided, however, that in no
event will such advance notice be less than 30 days.

(b) The Transfer Agent shall also accept with respect to each Trust
Business Day, at such times as are agreed upon from time to time by the Transfer
Agent and the Trust, a computer tape or electronic data transmission consistent
in all respects with the Transfer Agent's record format, as amended from time to
time, which is believed by the Transfer Agent to be furnished by or on behalf of
any Approved Institution. The Transfer Agent shall not

5
<PAGE>

be liable for any losses or damages to the Trust or its shareholders in the
event that a computer tape or electronic data transmission from an Approved
Institution is unable to be processed for any reason beyond the control of the
Transfer Agent, or if any of the information on such tape or transmission is
found to be incorrect.

2. On each Trust Business Day, the Transfer Agent shall, as of the time
at which the Trust computes the net asset value of the Trust, issue to and
redeem from the accounts specified in a purchase order, redemption request, or
computer tape or electronic data transmission, which in accordance with the
Prospectus is effective on such Trust Business Day, the appropriate number of
full and fractional Shares based on the net asset value per Share of such Trust
specified in an advice received on such Trust Business Day from the Trust.
Notwithstanding the foregoing, if a redemption specified in a computer tape or
electronic data transmission is for a dollar value of Shares in excess of the
dollar value of Shares in the specified account, the Transfer Agent shall not
effect such redemption in whole or in part and shall within twenty-four hours
orally advise the Approved Institution which supplied such tape of the
discrepancy.

3. In connection with a reinvestment of a dividend or distribution of
Shares of the Trust, the Transfer Agent shall as of each Trust Business Day, as
specified in a Certificate or resolution described in paragraph 1 of succeeding
Article IV, issue Shares of the Trust based on the net asset value per Share

6
<PAGE>

of such Trust specified in an advice received from the Trust on such Trust
Business Day.

4. On each Trust Business Day the Transfer Agent shall supply the Trust
with a statement specifying with respect to the immediately preceding Trust
Business Day: the total number of Shares of the Trust (including fractional
Shares) issued and outstanding at the opening of business on such day; the total
number of Shares of the Trust sold on such day, pursuant to preceding paragraph
2 of this Article; the total number of Shares of the Trust redeemed from
Shareholders by the Transfer Agent on such day; the total number of Shares of
the Trust, if any, sold on such day pursuant to preceding paragraph 3 of this
Article, and the total number of Shares of the Trust issued and outstanding.

5. In connection with each purchase and each redemption of Shares, the
Transfer Agent shall send such statements as are prescribed by the Federal
Securities laws applicable to transfer agents or as described in the Prospectus.

6. As of each Trust Business Day the Transfer Agent shall furnish the
Trust with an advice setting forth the number and dollar amount of Shares to be
redeemed on such Trust Business Day in accordance with paragraph 2 of this
Article.

7. Upon receipt of a proper redemption request and moneys paid to it by
the Custodian in connection with a redemption of Shares, the Transfer Agent
shall cancel the redeemed Shares and after making appropriate deduction for any
withholding of taxes required of it by applicable law (a) in the case of a
redemption

7
<PAGE>

of Shares pursuant to a redemption described in preceding paragraph 1(a) of this
Article, make payment in accordance with the Trust's redemption and payment
procedures described in the Prospectus, and (b) in the case of a redemption of
Shares pursuant to a computer tape or electronic data transmission described in
preceding paragraph 1(b) of this Article, make payment by directing a federal
funds wire order to the account previously designated by the Approved
Institution specified in said computer tape or electronic data transmission.

8. The Transfer Agent shall not be required to issue any Shares after it
has received from an Officer of the Trust or from an appropriate federal or
state authority written notification that the sale of Shares has been suspended
or discontinued, and the Transfer Agent shall be entitled to rely upon such
written notification.

9. Upon the issuance of any Shares in accordance with this Agreement the
Transfer Agent shall not be responsible for the payment of any original issue or
other taxes required to be paid by the Trust in connection with such issuance of
any Shares.

10. The Transfer Agent shall accept a computer tape or electronic data
transmission consistent with the Transfer Agent's record format, as amended from
time to time, which is reasonably believed by the Transfer Agent to be furnished
by or on behalf of any Approved Institution and is represented to be
instructions with respect to the transfer of Shares from one account of such
Approved Institution to another such account, and shall effect the transfers
specified in said computer tape or electronic data

8
<PAGE>

transmission. The Transfer Agent shall not be liable for any losses to the Trust
or its shareholders in the event that a computer tape or electronic data
transmission from an Approved Institution is unable to be processed for any
reason beyond the control of the Transfer Agent, or if any of the information on
such tape or transmission is found to be incorrect.

11. (a) Except as otherwise provided in sub-paragraph (b) of this
paragraph and in paragraph 13 of this Article, Shares will be transferred or
redeemed upon presentation to the Transfer Agent of instructions properly
endorsed for transfer or redemption, accompanied by such documents as the
Transfer Agent deems necessary to evidence the authority of the person baking
such transfer or redemption, and bearing satisfactory evidence of the payment of
stock transfer taxes. In the case of estates where no administration is
contemplated, the Transfer Agent may, without further approval of the Trust,
transfer or redeem Shares registered in the name of a decedent where the current
market value of the Shares being transferred does not exceed such amount as may
from time to time be prescribed by various states. The Transfer Agent reserves
the right to refuse to transfer or redeem Shares until it is satisfied that the
instructions are valid and genuine, and for that purpose it will require, unless
otherwise instructed by an authorized officer of the Trust, a guarantee of
signature by an "Eligible Guarantor Institution" as that term is defined by SEC
Rule l7Ad-15. The Transfer Agent also reserves the right to refuse to transfer
or redeem Shares until it is satisfied that the requested transfer or redemption
is legally

9
<PAGE>

authorized, and it shall incur no liability to the Trust for its refusal, in
good faith, to make transfers or redemptions which the Transfer Agent, in its
reasonable judgment, deems improper or unauthorized, or until it is satisfied
that there is no basis to any claims adverse to such transfer or redemption.
The Transfer Agent may, in effecting transfers and redemptions of Shares, rely
upon those provisions of the Uniform Act for the Simplification of Fiduciary
Security Transfers or the Uniform Commercial Code, as the same may be amended
from time to time, applicable to the transfer of securities, and the Trust shall
indemnify the Transfer Agent for any act done or omitted by it in good faith in
reliance upon such laws. In no event, however, will the Trust indemnify the
Transfer Agent for any act done by it as a result of willful misfeasance, bad
faith, negligence or reckless disregard of its duties.

(b) Notwithstanding the foregoing or any other provision contained in this
Agreement to the contrary, the Transfer Agent shall be fully protected by the
Trust in not requiring any instruments, documents, assurances, endorsements or
guarantees, including, without limitation, any signature guarantees, in
connection with a redemption, or transfer, of Shares whenever the Transfer Agent
reasonably believes that requiring the same would be inconsistent with the
transfer and redemption procedures as described in the Prospectus.

12. Notwithstanding any provision contained in this agreement to the
contrary, the Transfer Agent shall not be required, as a condition to any
transfer of Shares pursuant to

10
<PAGE>

paragraph 11 of this Article or any redemption of any Shares pursuant to a
computer tape or electronic data transmission described in this Agreement, any
documents, including, without limitation, any documents of the kind described in
sub-paragraph (a) of paragraph 11 of this Article, to evidence the authority of
the person requesting the transfer or redemption and/or the payment of any stock
transfer taxes, and shall be fully protected in acting in accordance with the
applicable provisions of this Article.

13. (a) As used in this Agreement, the terms "computer tape" or electronic
data transmission and "computer tape believed by the Transfer Agent to be
furnished by an Approved Institution," shall include any tapes generated by the
Transfer Agent to reflect information believed by the Transfer Agent to have
been input by an Approved Institution, via a remote terminal or other similar
link, into a data processing, storage, or collection system, or similar system
(the "System"), located on the Transfer Agent's premises. For purposes of
paragraph 1 of this Article, such a computer tape or electronic data
transmission shall be deemed to have been furnished at such times as are agreed
upon from time to time by the Transfer Agent and Trust only if the information
reflected thereon was input to the System at such times as are agreed upon from
time to time by the Transfer Agent and the Trust.

(b) Nothing contained in this Agreement shall constitute any agreement or
representation by the Transfer Agent to permit, or to agree to permit, any
Approved Institution to input

11
<PAGE>

information into a System.

(c) The Transfer Agent reserves the right to approve, in advance, any
Approved Institution, such approval not to be unreasonably withheld. The
Transfer Agent also reserves the right to terminate any and all automated data
communications, at its discretion, upon a reasonable attempt to notify the Trust
when in the opinion of the Transfer Agent continuation of such communications
would jeopardize the accuracy and/or integrity of the Trust's records on the
System.

ARTICLE IV
DIVIDENDS AND DISTRIBUTIONS

1. The Trust shall furnish to the Transfer Agent a copy of a resolution
of its Board of Trustees, certified by the Secretary or any Assistant Secretary,
either (i) setting forth the date of the declaration of a dividend or
distribution, the date of accrual or payment, as the case may be, thereof, the
record date as of which Shareholders entitled to payment, or accrual, as the
case may be, shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount, if any, payable to the Transfer
Agent on such payment date, or (ii) authorizing the declaration of dividends and
distributions on a daily or other periodic basis and authorizing the Transfer
Agent to rely on a Certificate setting forth the information described in
subsection (i) of this paragraph.

2. Upon the mail date specified in such Certificate or

12
<PAGE>

resolution, as the case may be, the Trust shall, in the case of a cash dividend
or distribution, cause the Custodian to deposit in an account in the name of the
Transfer Agent on behalf of the Trust an amount of cash, if any, sufficient for
the Transfer Agent to make the payment, as of the mail date, specified in such
Certificate or resolution, as the case may be, to the Shareholders who were of
record on the record date. The Transfer Agent will, upon receipt of any such
cash, make payment of such cash dividends or distributions to the shareholders
of record as of the record date by: (i) mailing a check, payable to the
registered shareholder, to the address of record or dividend mailing address, or
(ii) wiring such amounts to the accounts previously designated by an Approved
Institution, as the case may be. The Transfer Agent shall not be liable for any
improper payments made in good faith and without negligence, in accordance with
a Certificate or resolution described in the preceding paragraph. If the
Transfer Agent shall not receive from the Custodian sufficient cash to make
payments of any cash dividend or distribution to all shareholders of the Trust
as of the record date, the Transfer Agent shall, upon notifying the Trust,
withhold payment to all shareholders of record as of the record date until
sufficient cash is provided to the Transfer Agent.

3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or capital
gain distributions due to the shareholders. It is expressly agreed and
understood that the Transfer Agent is not liable for any loss as a result of
processing a distribution

13
<PAGE>

based on information provided in the Certificate that is incorrect. The Trust
agrees to pay the Transfer Agent for any and all costs, both direct and
out-of-pocket expenses, incurred in such corrective work as necessary to remedy
such error.

4. It is understood that the Transfer Agent shall file such appropriate
information returns concerning the payment of dividend and capital gain
distributions with the proper federal, state and local authorities as are
required by law to be filed by the Trust but shall in no way be responsible for
the collection or withholding of taxes due on such dividends or distributions
due to shareholders, except and only to the extent, required by applicable law.

ARTICLE V
CONCERNING THE TRUST

1. The Trust represents to the Transfer Agent that:

(a) It is a business trust duly organized and existing under the laws
of the Commonwealth of Massachusetts.

(b) It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement.

(d) It is an investment company registered under the Investment
Company Act of 1940, as amended.

(e) A registration statement under the Securities Act of 1933, as
amended, with respect to the Shares is effective.

14
<PAGE>

The Trust shall notify the Transfer Agent if such registration statement or any
state securities registrations have been terminated or a stop order has been
entered with respect to the Shares.

2. Each copy of the Declaration of Trust of the Trust and copies of all
amendments thereto shall be certified by the Secretary of State (or other
appropriate official) of the state of organization, and if such Declaration of
Trust and/or amendments are required by law also to be filed with a county or
other officer or official body, a certificate of such filing shall be filed with
a certified copy submitted to the Transfer Agent. Each copy of the By-Laws and
copies of all amendments thereto, and copies of resolutions of the Board of
Trustees of the Trust, shall be certified by the Secretary of the Trust under
seal.

3. The Trust shall promptly deliver to the Transfer Agent written notice
of any change in the Officers authorized to sign Share Certificates,
notifications or requests, together with a specimen signature of each new
Officer.

4. It shall be the sole responsibility of the Trust to deliver to the
Transfer Agent the Trust's currently effective Prospectus and, for purposes of
this Agreement, the Transfer Agent shall not be deemed to have notice of any
information contained in such Prospectus until a reasonable time after it is
actually received by the Transfer Agent.

15
<PAGE>

ARTICLE VI
CONCERNING THE TRANSFER AGENT

1. The Transfer Agent represents and warrants to the Trust that:

(a) It is a corporation duly organized and existing under the laws of
the State of Delaware.

(b) It is empowered under applicable law and by its Charter and
By-laws to enter into and perform this Agreement.

(d) It is duly registered as a transfer agent under Section 17A of
the securities Exchange Act of 1934, as amended.

2. The Transfer Agent shall not be liable and shall be indemnified in
acting upon any computer tape or electronic data transmission, writing or
document reasonably believed by it to be genuine and to have been signed or made
by an Officer of the Trust or person designated by the Trust and shall not be
held to have any notice of any change of authority of any person until receipt
of written notice thereof from the Trust or such person.

3. The Transfer Agent upon notice to the Trust may establish such
additional procedures, rules and regulations governing the transfer or
registration of Shares as it may deem advisable and consistent with such rules
and regulations generally adopted by mutual fund transfer agents.

4. The Transfer Agent shall keep such records as are specified in
Schedule II hereto in the form and manner, and for such period, as it may deem
advisable and is agreeable to the

16
<PAGE>

Trust but not inconsistent with the rules and regulations of appropriate
government authorities, in particular Rules 31a-2 and 31a-3 under the Investment
Company Act of 1940, as amended. The Transfer Agent acknowledges that such
records are the property of the Trust. The Transfer Agent may deliver to the
Trust from time to time at its discretion, for safekeeping or disposition by the
Trust in accordance with law, such records, papers, documents accumulated in the
execution of its duties as such Transfer Agent, as the Transfer Agent may deem
expedient, other than those which the Transfer Agent is itself required to
maintain pursuant to applicable laws and regulations. The Trust shall assume
all responsibility for any failure thereafter to produce any record, paper, or
other document so returned, if and when required. The records specified in
schedule II hereto maintained by the Transfer Agent pursuant to this paragraph
4, which have not been previously delivered to the Trust pursuant to the
foregoing provisions of this paragraph 4, shall be considered to be the property
of the Trust, shall be made available upon request for inspection by the
officers, employees, and auditors of the Trust, and records shall be delivered
to the Trust upon request and in any event upon the date of termination of this
Agreement, as specified in Article VII of this Agreement, in the form and manner
kept by the Transfer Agent on such date of termination or such earlier date as
may be requested by the Trust.

5. The Transfer Agent shall not be liable for any loss or damage,
including reasonable counsel fees, resulting from its actions or omissions to
act or otherwise, except for any loss or

17
<PAGE>

damage arising out of its bad faith, negligence, willful misfeasance or reckless
disregard of its duties under this agreement.

6. (a) The Trust shall indemnify and exonerate, save and hold harmless
the Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including reasonable attorney's fees)
and liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by any prior
transfer agent of the Trust or as a result of any action taken or omitted to be
taken by the Transfer Agent in good faith and without negligence or willful
misconduct or in reliance upon (i) any provision of this Agreement; (ii) the
Prospectus; (iii) any instruction or order including, without limitation, any
computer tape or electronic data transmission reasonably believed by the
Transfer Agent to have been received from an Approved Institution; (iv) any
instrument or order reasonably believed by it to be genuine and to be signed,
countersigned or executed by any duly authorized Officer of the Trust; (v) any
Certificate or other instructions of an Officer; or (vi) any opinion of legal
counsel for the Trust. The Trust shall indemnify and exonerate, save and hold
the Transfer Agent harmless from and against any and all claims (whether with or
without basis in fact or law), demands, expenses (including reasonable
attorney's fees) and liabilities of any and every nature which the Transfer
Agent may sustain or incur or which may

18
<PAGE>

be asserted against the Transfer Agent by any person by reason of or as a result
of any action taken or omitted to be taken by the Transfer Agent in good faith
and without negligence in connection with its appointment or in reliance upon
any law, act, regulation or any interpretation of the same even though such law,
act or regulation may thereafter have been altered, changed, amended or
repealed.

(b) The Transfer Agent shall not settle any claim, demand, expense
or liability to which it may seek indemnity pursuant to paragraph 6(a) above
(each, an "Indemnifiable Claim") without the express written consent of an
Officer of the Trust. The Transfer Agent shall notify the Trust within 15 days
of receipt of notification of an Indemnifiable Claim, provided that the failure
by the Transfer Agent to furnish such notification shall not impair its right to
seek indemnification from the Trust unless the Trust is unable to adequately
defend the Indemnifiable Claim as a result of such failure, and further
provided, that if as a result of the Transfer Agent's failure to provide the
Trust with timely notice of the institution of litigation a judgment by default
is entered, prior to seeking indemnification from the Trust the Transfer Agent,
at its own cost and expense, shall open such judgment. The Trust shall have the
right to defend any Indemnifiable Claim at its own expense, provided that such
defense shall be conducted by counsel selected by the Trust and reasonably
acceptable to the Transfer Agent. The Transfer Agent may join in such defense
at its own expense, but to the extent that it shall so desire the Trust shall
direct such defense. The

19
<PAGE>

Trust shall not settle any Indemnifiable Claim without the express written
consent of the Transfer Agent if the Transfer Agent determines that such
settlement would have a material adverse effect on the Transfer Agent beyond the
scope of this Agreement. In such event, each of the Trust and the Transfer
Agent shall be responsible for their own defense at their own cost and expense,
and such claim shall not be deemed an Indemnifiable Claim hereunder. If the
Trust shall fail or refuse to defend an Indemnifiable Claim, the Transfer Agent
may provide its own defense at the cost and expense of the Trust. Anything in
this Agreement to the contrary notwithstanding, the Trust shall not indemnify
the Transfer Agent against any liability or expense arising out of the Transfer
Agent's willful misfeasance, bad faith, negligence or reckless disregard of its
duties and obligations under this Agreement. The Transfer Agent shall indemnify
and hold the Trust harmless from and against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to any action or failure or omission to act by the Transfer Agent
as a result of the Transfer Agent's lack of good faith, negligence or willful
misconduct.

7. The Transfer Agent shall not be liable to the Trust with respect to
any redemption draft on which the signature of the drawer is forged and as to
which the Trust's Custodian has advised the Transfer Agent to honor the
redemption; nor shall Transfer Agent be liable for any material alteration to or
absence or forgery of any endorsement, it being understood that

20
<PAGE>

the Transfer Agent's sole responsibility with respect to inspecting redemption
drafts is to use reasonable care to verify the drawer's signature against
signatures on file.

8. There shall be excluded from the consideration of whether the Transfer
Agent has been negligent or has breached this Agreement, any period of time, and
only such period of time, during which the Transfer Agent's performance is
materially affected, by reason of circumstances beyond its reasonable control
(collectively, "Causes"), including, without limitation (except as provided
below), (a) mechanical breakdowns of equipment (including any alternative power
supply and operating systems software), flood or catastrophe, acts of God,
failures of transportation, communication or power supply, strikes, lockouts,
work stoppages or other similar circumstances.

9. At any time the Transfer Agent may apply to an Officer of the Trust
for written instructions with respect to any matter arising in connection with
the Transfer Agent's duties and obligations under this Agreement, and the
Transfer Agent shall not be liable for any action taken or permitted by it in
good faith in accordance with such written instructions. Such application by the
Transfer Agent for written instructions from an Officer of the Trust shall set
forth in writing any action proposed to be taken or omitted by the Transfer
Agent with respect to its duties or obligations under this Agreement and the
date on and/or after which such action shall be taken. The Transfer Agent shall
not be liable for any action taken or omitted in accordance with a proposal
included in any such

21
<PAGE>

application on or after the date specified therein unless, prior to taking or
omitting any such action, the Transfer Agent has received written instructions
in response to such application specifying the action to be taken or omitted.
The Transfer Agent may consult counsel of the Trust, or upon notice to the
Trust, its own counsel, at the expense of the Trust and shall be fully protected
with respect to anything done or omitted by it in good faith in accordance with
the advice or opinion of counsel to the Trust or its own counsel.

10. In case of any requests or demands for the inspection of the
shareholder records of the Trust, the Transfer Agent will endeavor to notify the
Trust promptly and to secure instructions from an Officer as to such inspection.
The Transfer Agent reserves the right, however, to exhibit the shareholder
records to any person whenever it receives an opinion from its counsel that
there is a reasonable likelihood that the Transfer Agent will be held liable for
the failure to exhibit the shareholder records to such person; provided,
however, that in connection with any such disclosure the Transfer Agent shall
promptly notify the Trust that such disclosure has been made or is to be made.

11. At the request of an Officer of the Trust the Transfer Agent will
address and mail such appropriate notices to shareholders as the Trust may
direct.

12. Notwithstanding any of the foregoing provisions of this Agreement, the
Transfer Agent shall be under no duty or obligation to inquire into, and shall
not be liable for:

(a) The legality of the issue or sale of any Shares,

22
<PAGE>

the sufficiency of the amount to be received therefor, or the authority of the
Approved Institution or of the Trust, as the case may be, to request such sale
or issuance;

(b) The legality of a transfer of Shares, or of a redemption of any
Shares, the propriety of the amount to be paid therefor, or the authority of the
Approved Institution or of the Trust, as the case may be, to request such
transfer or redemption;

(c) The legality of the declaration of any dividend by the Trust, or
the legality of the issue of any Shares in payment of any stock dividend; or

(d) The legality of any recapitalization or readjustment of Shares.

13. The Transfer Agent shall be entitled to receive and the Trust hereby
agrees to pay to the Transfer Agent for its performance hereunder, including its
performance of the duties and functions set forth in Schedule I hereto, (i) its
reasonable out-of-pocket expenses (including reasonable legal expenses and
attorney's fees) incurred in connection with its performance hereunder and (ii)
such compensation as may be agreed upon in writing from time to time by the
Transfer Agent and the Trust.

14. The Transfer Agent shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied in this Agreement
against the Transfer Agent.

15. Purchase and Prices of Services.

23
<PAGE>

(a) The Trust will compensate the Transfer Agent for, and Transfer
Agent will provide, beginning on the execution date of this Agreement and
continuing until the termination of this Agreement as provided hereinafter, the
Services set forth in Schedule I.

(b) The current unit prices for the Services are set forth in Schedule
III (the "Schedule III Fee Schedule"). Once in each calendar year, the Transfer
Agent may elect to raise the Schedule III Fees upon ninety (90) days prior
notice to the Trust. Notwithstanding the annual right to raise the Schedule III
Fees, the Transfer Agent may increase prices due to changes in legal or
regulatory requirements subject to the approval of the Trust, which approval
shall not be unreasonably withheld.

16. Billing and Payment.

(a) The Transfer Agent shall bill the Trust as follows:

(i) monthly in arrears for Accounts maintained and Out-of-Pocket
Expenses; and (ii) monthly in advance for estimated postage expenses to be
incurred by the Transfer Agent for the following month. Documentation to
support reconciliation of actual postage expenses will be provided to the Trust
monthly. The Transfer Agent may from time to time request the Trust to make
additional advances when appropriate.

(b) The Trust shall pay the Transfer Agent in immediately available funds
at United Missouri Bank in Kansas City, Missouri within thirty (30) days of the
date of the bill. Any amounts due under this Agreement which are not paid
within said thirty (30) day period shall bear interest at the rate of one and
one-half

24
<PAGE>

percent (1 1/2%) per month from such date until paid in full.

ARTICLE VII
TERMINATION

Either of the parties hereto may terminate this Agreement by giving to the
other party a notice in writing specifying the date of such termination, which
shall be not less than ninety (90) days after the date of receipt of such
notice. In the event such notice is given by the Trust, it shall be accompanied
by a copy of a resolution of the Board of Trustees of the Trust, certified by
the Secretary or any Assistant Secretary, electing to terminate this Agreement
and designating the successor transfer agent or transfer agents. In the event
such notice is given by the Transfer Agent, the Trust shall on or before the
termination date, deliver to the Transfer Agent a copy of a resolution of its
Board of Trustees certified by the Secretary or any Assistant Secretary
designating a successor transfer agent or transfer agents. In the absence of
such designation by the Trust, the Trust shall upon the date specified in the
notice of termination of this Agreement and delivery of the records maintained
hereunder, be deemed to be its own transfer agent and the Transfer Agent shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement.

In the event this Agreement is terminated as provided herein, the Transfer
Agent shall deliver the records of the Trust on electromagnetic media to the
Trust or its successor transfer agent. The Trust shall be responsible to the
Transfer Agent for

25
<PAGE>

the reasonable costs and expenses associated with the preparation and delivery
of such media. In the event the Agreement is terminated, the Transfer Agent
also shall cooperate in facilitating the transfer of the Services provided under
this Agreement to the Trust or a successor transfer agent.

ARTICLE VIII
MISCELLANEOUS

1. The Trust agrees that prior to effecting any change in the Prospectus
which would increase or alter the duties and obligations of the Transfer Agent
hereunder, it shall advise the Transfer Agent of such proposed change at least
30 days prior to the intended date of the same, and shall proceed with such
change only if it shall have received the written consent of the Transfer Agent
thereto, which consent shall not be unreasonably withheld.

2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Trust shall be sufficiently given if addressed
to the Trust and sent by first class mail, postage paid or delivered to it at
its office at the address first above written, or at such other place as the
Trust may from time to time designate in writing.

3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Transfer Agent shall be sufficiently given if
addressed to the Transfer Agent and mailed or delivered to the Secretary at 120
South LaSalle, Chicago, IL 60603, with a copy to the President at 811 Main
Street, Kansas City, MO 64105, or at such other place as the

26
<PAGE>

Transfer Agent may from time to time designate in writing.

4. This Agreement may not be amended or modified in any manner except by
a written agreement executed by both parties with the formality of this
Agreement.

5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns. This Agreement shall not be
assignable by either party without the written consent of the other party,
except that the Transfer Agent may assign this Agreement to a corporate
affiliate with advance written notice to and consent by the Trust, which consent
shall not be unreasonably withheld.

6. This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois.

7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.

8. The provisions of this Agreement are intended to benefit only the
Transfer Agent and the Trust, and no rights shall be granted to any other person
by virtue of this Agreement.

9. (a) The Transfer Agent will endeavor to assist in resolving
shareholder inquiries and errors relating to the period during which prior
transfer agents acted as such for the Trust. Any such inquiries or errors which
cannot be expediently resolved by the Transfer Agent will be referred to the
Trust.

(b) The Transfer Agent shall only be responsible for the safekeeping
and maintenance of transfer agency records and

27
<PAGE>

correspondence of the Trust created or produced prior to the time of conversion
which are under its control and acknowledged in a writing to the Trust to be in
its possession. Any expenses or liabilities incurred by the Transfer Agent as a
result of shareholder inquiries, regulatory compliance or audits related to such
records and not caused as a result of Transfer Agent's bad faith, willful
malfeasance or negligence shall be the responsibility of the Trust.

10. A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that this Agreement is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this Agreement are not
binding on any of the Trustees, officers or unitholders of the Trust
individually but are binding only on the assets and property of the Trust.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officer, thereunto duly authorized and
their respective corporate seals to be hereunto affixed, as the day and year
first above written.

Supervised Service Company, Inc. Bishop Street Funds

By: /s/ Signature appears here By: /s/ Signature appears here
-------------------------- --------------------------
(Signature) (Signature)

Thomas M. Blodgett Kathryn L. Stanton
-------------------------- -------------------------
(Name) (Name)

SVP Vice President
-------------------------- -------------------------
(Title) (Title)

28
<PAGE>

SCHEDULE I
DESCRIPTION OF SERVICES

In consideration of the fees to be paid in such manner and at such times as
Trust and Transfer Agent bay agree, Transfer Agent will provide the services set
forth below:

Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check Redemptions, Automatic Withdrawals,
wire Order Trades, Dividends, Dividend statements, Dealer Statements.

DAILY ACTIVITY

Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:

Name and Address, including Zip Code

Balance of Shares

Number of Shares, issuance date of each Share outstanding and cancellation
date of each share no longer outstanding, if issued

Balance of dollars available for redemption

Dividend code (daily accrual, monthly reinvest, monthly cash or quarterly
cash)

Type of account code

Establishment date indicating the date an account was opened, carrying
forward pre-conversion data as available

Original establishment date for accounts opened by exchange

W-9 withholding status and periodic reporting

State of residence code

Social Security or taxpayer identification number, and indication of
certification

Historical transactions on the account for the most recent 18 months, or
other period as mutually agreed to from time-to-time

Indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e. male, female, joint tenant, etc.

29
<PAGE>

An alternate or "secondary" account number issued by a dealer (or bank,
etc.) to a customer for use, inquiry and transaction input by "remote
accessors"

FUNCTIONS

Answer investor and dealer telephone and/or written inquiries, except those
concerning Trust policy, or requests for investment advice which will be
referred to the Trust, or those which the Trust chooses to answer

Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied

Process and confirm address changes

Process standard account record changes as required, i.e. Dividend Codes,
etc.

Microfilm source documents for transactions, such as account applications
and correspondence

Perform backup withholding for those accounts which federal government
regulations indicate is necessary

Perform withholdings on liquidations, if applicable, for employee benefit
plans. Prepare and mail 5498s and 1099R's

Solicit missing taxpayer identification numbers

Provide remote access inquiry to Trust records via Trust supplied hardware
(Trust responsible for connection line and monthly fee)

REPORTS PROVIDED

Daily Journals Reflecting all shares and
dollar activity for the
previous day

Blue Sky Report Supply information monthly
for Trust's preparation of
Blue Sky Reporting

N-SAR Report Supply monthly correspondence,
redemption and liquidation
information for use in Trust's
N-SAR Report

Additionally, monthly average daily balance reports will be provided at the
Trust's request to the Trust at no charge.

30
<PAGE>

Prepare and mail copies of summary statements to dealers and investment
advisers

Generate and mail confirmation statements for financial transactions

DIVIDEND ACTIVITY

Reinvest or pay in cash including reinvesting in other funds within the
fund group serviced by the Transfer Agent as described in each Trust
Prospectus

Distribute capital gains simultaneously with income dividends

DEALER SERVICES

Prepare and mail confirmation statements to dealers daily

Prepare and mail copies of statements to dealers, same frequency as
investor statements

ANNUAL MEETINGS

Assist Trust in obtaining a qualified service to: address and mail proxies
and related material, tabulate returned proxies and supply daily reports
when sufficient proxies have been received

Prepare certified list of stockholders, hard copy or microform

PERIODIC ACTIVITIES

Mail transaction confirmation statements daily to investors

Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably specified
by the Transfer Agent)

Mail periodic statement to investors

Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1099R, 1099DIV, 1099B, 1042 and 1042S

Enclose various marketing material as designated by the Trust in statement
mailings, i.e. monthly and quarterly statements (material must be adaptable
to mechanical equipment as reasonably specified by the Transfer Agent)

31
<PAGE>

SCHEDULE II
RECORDS MAINTAINED BY TRANSFER AGENT

- - Account applications

- - Checks including check registers, reconciliation records, any adjustment
records and tax withholding documentation

- - Liquidation, redemption, withdrawal and transfer requests including stock
powers, signature guarantees and any supporting documentation

<PAGE>

[MORGAN, LEWIS & BOCKIUS LETTERHEAD]

September 1, 1994

Bishop Street Funds
c/o CT Corporation
2 Oliver Street
Boston, MA 02109

Ladies and Gentlemen:

We are furnishing this opinion with respect to the proposed offer and
sale from time to time of an indefinite number of units of beneficial interest,
$.00001 par value (the "Shares"), of Bishop Street Funds (the "Trust"), a
Massachusetts business trust, in registration under the Securities Act of 1933
by a Registration Statement on Form N-1A (File No. 33-80514; 811-8572) as
amended from time to time (the "Registration Statement").

We have acted as counsel to the Trust since its inception, and we are
familiar with the actions taken by its Trustees to authorize the issuance of the
Shares. We have reviewed the Declaration of Trust, the By-laws, and the minute
books of the Trust, and such other certificates, documents and opinions of
counsel as we deem necessary for the purpose of this opinion.

We have reviewed the Trust's Notification of Registration on Form N-8A
under the Investment Company Act of 1940. We have assisted in the preparation
of the Trust's Registration Statement, including all pre-effective amendments
thereto, filed or to be filed with the Securities and Exchange Commission.

In our review we have assumed the genuineness of all signatures, the
authenticity and completeness of all documents purporting to be originals
(whether reviewed by us in original or in copy form), and the conformity to the
originals of all documents purporting to be copies.

We have assumed the appropriate action will be taken to register or
qualify the sale of the Shares under any applicable state and federal laws
regulating sales and offerings of securities.

Based upon the foregoing, we are of the opinion that:

1. The Trust is a business trust validly existing under the laws of
the Commonwealth of Massachusetts. The Trust is authorized under its
Declaration of Trust to issue an unlimited number of Shares in series
representing interests in the Money Market Fund, High Grade

<PAGE>

[MORGAN, LEWIS & BOCKIUS LETTERHEAD]

Income Fund, Hawaii Tax-Free Fund and Equity Fund, and in such other series or
classes as the Trustees may hereafter duly authorize.

2. Upon the issuance of any Shares of any of the series or classes
of the Trust for payment therefor as described in, and in accordance with the
Registration Statement and the Declaration of Trust and By-laws of the Trust,
the Shares so issued will be validly issued, fully paid and non-assessable,
except that, as set forth in the Registration Statement, shareholders of the
Shares of the Trust may under certain circumstances be held personally liable
for its obligations.

This opinion is intended only for your use in connection with the
offering of Shares and may not be relied upon by any other person.

We hereby consent to the inclusion of this opinion as Exhibit 10 to
the Trust's Registration Statement to be filed with the Securities and Exchange
Commission and to the reference to our firm under the caption "Counsel and
Independent Accountants" in the Prospectuses and Statement of Additional
Information filed as part of such Registration Statement.

Very truly yours,

/s/ Morgan, Lewis & Bockius

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this Post Effective Amendment No. 3 to the
Registration Statement under the Securities Act of 1933 on Form N-1A (File No.
33-80514) of our report dated February 16, 1996 accompanying financial
statements and financial highlights of Bishop Street Funds in the Statement of
Additional Information. We also consent to the reference to our Firm under the
captions "Financial Highlights", "Financial Information" and "Counsel and
Independent Accountants" in the filing.

/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 29, 1996

<PAGE>

DISTRIBUTION PLAN
BISHOP STREET FUNDS
RETAIL CLASS B

WHEREAS, Bishop Street Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended (the "1940 Act"); and

WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Trust and the owners of units (the "shares") of beneficial interest (the
"Shareholders") in the Trust;

NOW, THEREFORE, the Trustees of the Trust hereby adopt this Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act.

SECTION 1. The Trust has adopted this Retail Class B Distribution Plan
(the "Plan") to enable the Trust to directly or indirectly bear expenses
relating to the distribution of Retail Class B shares of the Bishop Street High
Grade Income, Bishop Street Hawaii Tax-Free, Bishop Street Equity and Bishop
Street Money Market Funds and such other Funds of the Trust as may be added to
the Plan and listed on a Schedule A attached hereto (each a "Fund") of which the
Trust is the issuer.

SECTION 2. The Trust will pay the Distributor a fee at the annual rate
specified on Schedule A hereto. The Distributor of the Class B shares of each
Fund may retain all or a part of this fee as compensation for distribution or
shareholder services it provides or it may use such fees for compensation of
broker/dealers and other financial institutions and intermediaries that provide
distribution or shareholder services as specified by the Distributor. The actual
fee to be paid by the Distributor to broker/dealers and financial institutions
and intermediaries will be negotiated based on the extent and quality of
services provided.

SECTION 3. This Plan shall not take effect as to a Fund until it has been
approved (a) by a vote of at least a majority of the outstanding Retail Class B
shares of such Fund; and (b) together with any related agreements, by votes of
the majority of both (i) the Trustees of the Trust and (ii) the Qualified
Trustees (as defined herein), cast in person at a meeting of the Board of
Trustees called for the purpose of voting on this Plan or such agreement.

SECTION 4. This Plan shall continue in effect for a period of more than
one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 3 herein for the approval of this Plan.

SECTION 5. Any person authorized to direct the disposition of monies paid
or payable by the Trust pursuant to this Plan or any related agreement shall
provide to the Trustees of the Trust, at least quarterly, a written report of
the amounts so expended and the purposes for which such expenditures were made.

<PAGE>

SECTION 6. This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees or, with respect to Retail Class B shares of
a Fund, by vote of a majority of the Retail Class B shares of the Fund.
Termination by the Retail Class B shareholders of a Fund will not affect the
validity of this Plan with respect to Retail Class B shares of any other Fund.

SECTION 7. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees or with
respect to Retail Class B shares of a Fund, by vote of a majority of the Retail
Class B shares of the Fund, on not more than 60 days written notice to any other
party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.

SECTION 8. This Plan may be amended in the manner provided in part (b) of
Section 3 herein for the approval of this Plan; provided, however, that the plan
may not be amended to increase materially the amount of distribution expenses
permitted pursuant to Section 2 hereof with respect to the Retail Class B shares
of a Fund without the approval of Shareholders holding a majority of the
outstanding Retail Class B shares of such Fund of the Trust.

SECTION 9. While this Plan is in effect, the selection and nomination of
those Trustees who are not interested persons of the Trust shall be committed to
the discretion of the Trustees then in office who are not interested persons of
the Trust.

SECTION 10. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the terms "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act and the
rules and regulations thereunder, subject to such exemptions as may be granted
by the Securities and Exchange Commission.

SECTION 11. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.

January 27, 1995

<PAGE>

SCHEDULE A DATED JANUARY 27, 1995
TO THE
BISHOP STREET FUNDS
RETAIL CLASS B
DISTRIBUTION PLAN DATED
JANUARY 27, 1995

The Distributor receives a fee, paid on a monthly basis, as set forth below.
This fee is calculated based on the annual rate said below, applied to the
average daily net assets of the Fund.

FUND FEE
- ---- ---

Bishop Street High Grade Income Fund .25%

Bishop Street Hawaii Tax-Free Fund .25%

Bishop Street Equity Fund .25%

Bihop Street Money Market Fund .10%

<PAGE>

SCHEDULE B DATED FEBRUARY , 1996
TO THE
BISHOP STREET FUNDS
RETAIL CLASS B
DISTRIBUTION PLAN DATED
JANUARY 27, 1995

The Distributor receives a fee, paid on a monthly basis, as set forth below.
This fee is calculated based on the annual rate said below, applied to the
average daily net assets of the Fund.

FUND FEE
- ---- ---

Bishop Street High Grade Income Fund .25%

Bishop Street Hawaii Tax-Free Fund .25%

Bishop Street Equity Fund .25%

Bishop Street Money Market Fund .10%

Bishop Street Treasury Money Market Fund .10%

<PAGE>

This schedule is included to illustrate how yield will be calculated for the
Money Market Fund. The Fund was not in operation for the seven day period
ending August 31, 1994. The dividend factors presented are an estimate of
future operations. The Fund has a fiscal year ending September 30.

Last 7 daily dividend factors:

Money Market Fund

Class A

day 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000077518
day 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000077505
day 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000077426
day 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000077264
day 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000077264
day 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000077264
day 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000077510
-----------
Base Period Return 0.000541751
Annualized Yield=(bpr/1)x365/7 2.82%

Effective Yield=((bpr + 1) to the 365/7
power) - 1 2.86%

Money Market Fund

Class B

day 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000085738
day 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000085724
day 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000085646
day 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000085485
day 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000085485
day 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000085485
day 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.000085730
-----------
Base Period Return 0.000599293
Annualized Yield=(bpr/1)x365/7 3.12%

Effective Yield=((bpr + 1) to the 365/7
power) - 1 3.17%

<PAGE>

This schedule is included to illustrate how yield and total return will be
calculated for the High Grade Income, Hawaii Tax-Free and Equity Funds. The
Funds were not in operation as of August 31, 1994. The examples presented are
an estimate of future operations. The Funds have a fiscal year ending September
30.

Yield = 2 [(a-b) + 1)6-1]
cd

HIGH GRADE INCOME HAWAII TAX-FREE EQUITY
CLASS A CLASS A CLASS A
------- ------- -------
a= 1,327,254 439,867 329,262
b= 123,743 78,735 34,053
c= 33,159,711 12,828,687 5,282,833
d= 10.50 10.04 10.09
Yield= 3.88% 3.39% 6.74%

HIGH GRADE INCOME HAWAII TAX-FREE EQUITY
CLASS B CLASS B CLASS B
------- ------- -------
a= 1,327,254 439,867 329,262
b= 123,743 46,976 34,053
c= 33,152,711 12,828,687 5,282,833
d= 10.13 10.08 10.09
Yield= 4.34% 3.68% 6.74%

Total Return P(1 + T)n = ERV

HIGH GRADE INCOME HAWAII TAX-FREE EQUITY
CLASS A CLASS A CLASS A
------- ------- -------
P= 1,000 1,000 1,000
n= 1 1 1
ERV= 1,058.60 1,052.60 853.30
T= 5.86% 5.26% 14.67%

<PAGE>

HIGH GRADE INCOME HAWAII TAX-FREE EQUITY
CLASS B CLASS B CLASS B
------- ------- -------
P= 1,000 1,000 1,000
n= 1 1 1
ERV= 1,064.40 1057.20 831.60
T= 6.44% 5.72% 16.84%

<PAGE>

BISHOP STREET FUNDS

RULE 18f-3
MULTIPLE CLASS PLAN

AUGUST 3, 1995

INTRODUCTION

Bishop Street Funds (the "Trust"), a registered investment company
that currently consists of four (4) separately managed portfolios (Bishop Street
High Grade Income Fund, Bishop Street Hawaii Tax-Free Fund, Bishop Street Equity
Fund, and Bishop Street Money Market Fund) and that may consist of additional
portfolios in the future as listed on Schedule A hereto (each a "Fund" and,
collectively, the "Funds"), have elected to rely on Rule 18f-3 under the
Investment Company Act of 1940, as amended (the "1940 Act") in offering multiple
classes of units of beneficial interest ("shares") in each Fund. The Plan sets
forth the differences among classes, including shareholder services,
distribution arrangements, expense allocations, and conversion or exchange
options.

A. ATTRIBUTES OF SHARE CLASSES

The rights of each existing class of the Funds (I.E., Retail and
Institutional Classes) shall be as set forth in the resolutions and related
materials of the Trust's Board adopted pursuant to the order dated September 9,
1993, obtained by SEI Liquid Asset Trust, ET AL. (Inv. Co. Act Release No.
IC-19698), and attached hereto as Exhibits A - C.

With respect to any class of shares of a Fund created after the date
hereof, each share of a Fund will represent an equal PRO RATA interest in the
Fund and will have identical terms and conditions, except that: (i) each new
class will have a different class name (or other designation) that identifies
the class as separate from any other class; (ii) each class will separately bear
any distribution expenses ("distribution fees") in connection with a plan
adopted pursuant to Rule 12b-1 under the 1940 Act (a "Rule 12b-1 Plan"), and
will separately bear any non-Rule 12b-1 Plan service payments ("service fees")
that are made under any servicing agreement entered into with respect to that
class; (iii) each class may bear, consistent with rulings and other published
statements of position by the Internal Revenue Service, the expenses of the
Fund's operations which are directly attributable to such class ("Class
Expenses"); and (iv) shareholders of the class will have exclusive voting rights
regarding the Rule 12b-1 Plan and the servicing agreements relating to such
class, and will have separate voting rights on any matter submitted to
shareholders in which the interests of that class differ from the interests of
any other class.

<PAGE>

B. EXPENSE ALLOCATIONS

Expenses of each existing class and of each class created after the
date hereof shall be allocated as follows: (i) distribution and shareholder
servicing payments associated with any Rule 12b-1 Plan or servicing agreement
relating to each class of shares are (or will be) borne exclusively by that
class; (ii) any incremental transfer agency fees relating to a particular class
are (or will be) borne exclusively by that class; and (iii) class Expenses
relating to a particular class are (or will be) borne exclusively by that class.

Until and unless changed by the Board, the methodology and procedures
for calculating the net asset value of the various classes of shares and the
proper allocation of income and expenses among the various classes of shares
shall be as set forth in the "Report" rendered by Arthur Anderson LLP.

C. AMENDMENT OF PLAN; PERIODIC REVIEW

This Plan must be amended to properly describe (through additional
exhibits hereto or otherwise) each new class of shares approved by the Board
after the date hereof.

The Board of the Trust, including a majority of the independent
Trustees, must periodically review this Plan for its continued appropriateness,
and must approve any material amendment of the Plan as it relates to any class
of any Fund covered by the Plan.

-2-
<PAGE>

EXHIBIT A

DISTRIBUTION PLAN
BISHOP STREET FUNDS
RETAIL CLASS B

WHEREAS, Bishop Street Funds (the "Trust") is engaged in business as an
open-end investment company registered under the Investment Company Act of 1940,
as amended (the "1940 Act"); and

NOW, THEREFORE, the Trustees of the Trust hereby adopt this Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act.

<PAGE>

SECTION 11. This Plan shall not obligate the Trust or any other party to
enter into an agreement with any particular person.

<PAGE>

SCHEDULE A DATED JANUARY , 1995
TO THE
BISHOP STREET FUNDS
RETAIL CLASS B
DISTRIBUTION PLAN DATED
JANUARY , 1995

The Distributor receives a fee, paid on a monthly basis, as set forth below.
This fee is calculated based on the annual rate said below, applied to the
average daily net assets of the Fund.

FUND FEE
- ---- ---

Bishop Street High Grade Income Fund .25%

Bishop Street Hawaii Tax-Free Fund .25%

Bishop Street Equity Fund .25%

Bishop Street Money Market Fund .10%

<PAGE>

SCHEDULE B DATED FEBRUARY , 1996
TO THE
BISHOP STREET FUNDS
RETAIL CLASS B
DISTRIBUTION PLAN DATED
JANUARY 27, 1995

The Distributor receives a fee, paid on a monthly basis, as set forth below.
This fee is calculated based on the annual rate said below, applied to the
average daily net assets of the Fund.

FUND FEE
- ---- ---

Bishop Street High Grade Income Fund .25%

Bishop Street Hawaii Tax-Free Fund .25%

Bishop Street Equity Fund .25%

Bishop Street Money Market Fund .10%

Bishop Street Treasury Money Market Fund .10%

<PAGE>
Exhibit B

DISTRIBUTION PLAN
(RETAIL CLASS B SHARES)

VOTED: That the form of Distribution Plan for Retail Class B Shares presented
to this meeting be, and the same hereby is, approved.

FURTHER
VOTED: That the Distribution Plan for Retail Class B Shares be submitted to
the sole initial shareholder of the Retail Class B Shares of the
Bishop Street Money Market, Bishop Street High Grade Income, Bishop
Street Hawaii Tax-Free and Bishop Street Equity Funds for approval
following the initial issuance of the shares of such class.

------------------------------

CREATION OF CLASSES

WHEREAS: The Board of Trustees has determined, based upon the information
presented, that the implementation of the Multi-Class Structure is in
the best interests of the Trust and its future shareholders because it
will (i) enable investors to choose the purchase option best suited to
their individual needs, thereby attracting investors and assets to the
Trust to the benefit of the Trust and its shareholders; (ii)
facilitate distribution of the Trust's shares; and (iii) place the
Trust in a competitive position in relation to other mutual funds that
have implemented or are seeking to implement similar distribution
arrangements.

NOW, THEREFORE, based upon approval by the Securities and Exchange Commission of
the exemptive application filed by the Administrator and Distributor authorizing
the creation of classes of shares sold subject to sales charge, be it

VOTED: That the shares of the Funds may be divided into two classes of
shares:

(i) Institutional Class A Shares, to be offered (without a Rule 12b-1
Plan or sales charge) primarily to agency, fiduciary, custodial and
advisory clients of First Hawaiian Bank; and

(ii) Retail Class B Shares, to be offered primarily to individuals
and to cash sweep customers of First Hawaiian Bank in connection with
the Fund's existing Distribution Plan that will be approved by the
sole

<PAGE>

initial shareholder pursuant to Rule 12b-1 under the Investment
Company Act of 1940 authorizing payment of a distribution fee not to
exceed .25% (on an annual basis) of the average daily net assets
attributable to Retail Class B Shares of the Bishop Street Hawaii
Tax-Free, Bishop Street High Grade Income and Bishop Street Equity
Funds and including an initial sales charge, not to exceed 3.50% of
the purchase price of such Retail Class B Shares, and a distribution
fee not to exceed .10% (on an annual basis) of the average daily net
assets attributable to Retail Class B Shares of the Bishop Street
Money Market Fund.

VOTED: That the Board of Trustees hereby establishes, effective upon
implementation of the Multi-Class System with respect to the Trust
(the "Effective Date"), an unlimited number of shares of beneficial
interest of the Funds of the Trust's Institutional Class A Shares.

VOTED: That the Board of Trustees hereby establishes, effective upon the
Effective Date, an unlimited number of shares of beneficial interest
of the Funds of the Trust's Retail Class B Shares.

VOTED: That each class of each Fund shall vote separately with respect to the
adoption or amendment of any distribution plan as to such class.

-2-
<PAGE>
EXHIBIT C

PROSPECTUS

BISHOP STREET FUNDS
INVESTMENT ADVISER:
FIRST HAWAIIAN BANK

BISHOP STREET HIGH GRADE INCOME FUND
BISHOP STREET HAWAII TAX-FREE FUND
BISHOP STREET EQUITY FUND

INSTITUTIONAL CLASS A SHARES ARE OFFERED PRIMARILY TO AGENCY, FIDUCIARY,
CUSTODIAL AND ADVISORY CLIENTS OF FIRST HAWAIIAN BANK. RETAIL CLASS B SHARES ARE
OFFERED PRIMARILY TO INDIVIDUALS.

------------------------------------------------------------------------------
| THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR |
| ENDORSED BY, ANY BANK, INCLUDING FIRST HAWAIIAN BANK OR ITS AFFILIATES. THE |
| TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE |
| CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. |
| INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE LOSS OF |
| PRINCIPAL. |
------------------------------------------------------------------------------

This Prospectus sets forth concisely the basic information about the Funds and
the Trust that a prospective investor should know before investing. Investors
are advised to read this Prospectus and retain it for future reference. A
Statement of Additional Information dated January 30, 1995 has been filed with
the Securities and Exchange Commission and is available without charge by
calling 1-800-262-9565. The Statement of Additional Information is incorporated
into this Prospectus by reference.

JANUARY 30, 1995
<PAGE>
2

SUMMARY

WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF EACH FUND? The High Grade
Income Fund seeks high total return consistent with prudent investment risk by
investing primarily in high grade U.S. dollar-denominated bonds and debentures
issued by U.S. and foreign corporations. The Hawaii Tax-Free Fund seeks to
provide high current income that is exempt from Federal and State of Hawaii
income taxes by investing primarily in bonds and notes issued by the State of
Hawaii, its agencies, instrumentalities and political sub-divisions ("Hawaii
Municipal Securities"). The Equity Fund seeks long-term growth of capital with a
secondary goal of current income by investing primarily in common stocks of
domestic issuers and U.S. dollar denominated equity securities of foreign
issuers. There is no assurance that any Fund will meet its investment objective.
See "Investment Objectives and Policies" and "Description of Permitted
Investments and Risk Factors."

WHAT ARE THE RISKS INVOLVED WITH AN INVESTMENT IN THE FUNDS? The Funds' shares
will fluctuate in value with changes in the prices of their underlying portfolio
securities. Values of fixed income securities and, correspondingly, share prices
of Funds invested in such securities tend to vary inversely with interest rates
and may be affected by other market and economic factors as well. Common stocks
in which the Equity Fund invests may be more volatile and may fluctuate in value
more than other types of investments. The Hawaii Tax-Free Fund is a
non-diversified portfolio that invests primarily in Hawaii Municipal Securities.
There are other risks involved in the ownership of a mutual fund. See
"Description of Permitted Investments and Risk Factors."

WHO IS THE ADVISER? First Hawaiian Bank serves as the Adviser of the Funds. See
"Expense Summary" and "The Adviser."

WHO IS THE ADMINISTRATOR? SEI Financial Management Corporation serves as the
Administrator and shareholder servicing agent of the Trust. See "Expense
Summary" and "The Administrator."

WHO IS THE TRANSFER AGENT? Supervised Service Company serves as transfer agent
and dividend disbursing agent for the Trust. See "The Transfer Agent."

WHO IS THE DISTRIBUTOR? SEI Financial Services Company serves as distributor of
the Trust's shares. See "The Distributor."

<PAGE>
5

THE TRUST

BISHOP STREET FUNDS (the "Trust") is an open-end management investment company
that offers units of beneficial interest ("shares") in the Funds through
separate Classes (Retail Class B and Institutional Class A), which provide for
variations in sales charges, distribution costs, voting rights and dividends.
Except for these differences, each share of each Fund represents an undivided,
proportionate interest in the Fund. This Prospectus offers shares of the Trust's
High Grade Income Fund, Hawaii Tax-Free Fund and Equity Fund (the "Funds").
Additional information pertaining to the Trust may be obtained in writing from
SEI Financial Services Company, 680 East Swedesford Road, Wayne, PA 19087.
Information regarding the Trust's Money Market Fund is contained in a separate
prospectus that may be obtained by calling 1-800-262-9565.

INVESTMENT OBJECTIVES AND POLICIES

Each Fund has its own investment objectives and policies. There can be no
assurance that the investment objective of a Fund will be met.

HIGH GRADE INCOME FUND

The investment objective of the Fund is to provide high total return consistent
with prudent investment risk.

The Fund may also invest in floating or variable rate obligations and zero
coupon securities, and may purchase securities on a "when-issued" basis.

HAWAII TAX-FREE FUND

The investment objective of this Fund is to provide high current income that is
exempt from Federal and State of Hawaii income taxes.

The Fund invests primarily (at least 80% of its assets under normal market
conditions) in bonds and notes issued by states, territories, and possessions of
the U.S. and their agencies, authorities, instrumentalities and political
subdivisions, that are rated AAA, AA, A or BBB by S&P, Aaa, Aa, A or Baa by
Moody's or AAA, AA, A or BBB by Fitch Investors Service ("Fitch"), and which pay
interest that is not subject to ordinary Federal income tax and is not treated
as a preference item for purposes of the Federal alternative minimum tax
("Municipal Securities"). This is a fundamental policy of the Fund. Under normal
circumstances, the Fund will invest at least 65% of its assets in Municipal
Securities issued by the State of Hawaii, its agencies,
<PAGE>
8

The Adviser is entitled to a fee, which is calculated daily and paid monthly, at
an annual rate of .55% of the High Grade Income Fund's average daily net assets,
.35% of the Hawaii Tax-Free Fund's average daily net assets, and .74% of the
Equity Fund's average daily net assets. The Adviser may from time to time waive
all or a portion of its fee in order to limit the operating expenses of a Fund.
Any such waiver is voluntary and may be terminated at any time in the Adviser's
sole discretion.

Orest Saikevych is the portfolio manager of the Bishop Street Equity Fund. Mr.
Saikevych has been active in the investment management business for twelve years
and has managed First Hawaiian Bank's Pooled Equity Fund since 1987.

The day-to-day management of the Bishop Street High Grade Income and Bishop
Street Hawaii Tax-Free Funds' investments is the responsibility of a team of
investment professionals. Decisions are made by committee and no person has
primary responsibility for making recommendations to the committee.

THE ADMINISTRATOR

THE TRANSFER AGENT

Supervised Service Company ("Transfer Agent"), P.O. Box 419721, Kansas City,
Missouri 64141-6721, serves as the Transfer Agent and dividend disbursing agent
for the Trust.

THE DISTRIBUTOR

The Funds may execute brokerage or other agency transactions through the
Distributor, for which the Distributor receives compensation.

HOW TO PURCHASE SHARES

GENERAL INFORMATION

Shares of the Funds are available for sale in the State of Hawaii and Guam.

You may purchase shares of the Funds on any day on which both the New York Stock
Exchange and Federal Reserve wire system are open for business ("Business Days")
except for Hawaii state banking holidays. However, shares of the Funds cannot be
purchased by Federal Reserve wire on Federal holidays restricting wire
transfers. The minimum initial investment in any Fund is $1,000 ($500 for IRAs
and $500 for officers, directors, or employees of First Hawaiian Bank or its
affiliates). The Distributor may waive the minimum investment at its discretion.
Subsequent purchases of shares must be at least $100.

The net asset value per share of each Fund is determined as of 4:00 p.m., New
York time on each Business Day by dividing the total market value of that Fund's
investments and other assets, less any liabilities, by the total outstanding
shares of the Fund. Purchases will be made in full and fractional shares
calculated to three decimal places. Pursuant to guidelines adopted and monitored
by the Trustees of the Trust, each Fund may use a pricing service to provide
market quotations or fair market valuations. A pricing service may derive such
valuations through the use of a matrix system to value fixed income securities
which considers factors such as securities prices, yield features, ratings, and
developments related to a specific security. Although the methodology and
procedures for determining net asset value are identical for both classes of a
Fund, the net asset value per share of such classes will differ because of the
distribution expenses charged to Retail Class B shares.

The Trust reserves the right to reject a purchase order for shares when the
Distributor determines that it is not in the best interest of the Trust and/or
its Shareholders to accept such order.

Shareholders who own their shares of record and who desire to transfer
registration of their shares should contact the Transfer Agent at 1-800-262-9565
for further instructions.

HOW TO PURCHASE INSTITUTIONAL CLASS A SHARES

Institutional Class A shares may only be purchased by First Hawaiian Bank in its
capacity as Agent, Fiduciary, Custodian or Adviser.

HOW TO PURCHASE RETAIL CLASS B SHARES

HOW TO PURCHASE BY MAIL

You may purchase shares of a Fund by completing and signing an Account
Application form and mailing it, along with a check (or other negotiable bank
instrument or money order) payable to "Bishop Street (Fund Name)," to the
Transfer Agent at P.O. Box 419721, Kansas City, Missouri 64141-6721. You may
purchase more shares at any time by mailing payment also to the Transfer Agent
at the above address. Orders placed by mail will be executed on receipt of your
payment. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees incurred.

You may obtain Account Application Forms by calling the Distributor at
1-800-262-9565.

HOW TO PURCHASE BY WIRE

HOW TO PURCHASE THROUGH AN AUTOMATIC INVESTMENT PLAN ("AIP")

HOW TO PURCHASE THROUGH FINANCIAL INSTITUTIONS

Customers who desire to transfer the registration of shares beneficially owned
by them but held of record by a financial institution should contact the
institution to accomplish such change.

SALES CHARGES

RETAIL CLASS B SHARES

SALES LOAD The following table shows the regular sales charge on Retail Class B
shares to a "single purchaser" (defined below) together with the sales charge
that is reallowed to certain financial intermediaries (the "reallowance").

The sales charge shown in the table is the maximum sales charge that applies to
sales through financial intermediaries. Under certain circumstances, the
Distributor may use its own funds to compensate financial institutions and
intermediaries in amounts additional to the commissions shown above. In
addition, the Distributor may, from time to time in its sole discretion,
institute one or more promotional incentive programs, which will be paid by the
Distributor from the sales charges it receives or from any other source
available to it. Under any such program, the Distributor will provide
promotional incentives in the form of cash or other compensation, including
merchandise, airline vouchers, trips and vacation packages, to all dealers
selling shares of the Funds. Under certain circumstances, reallowances of up to
the amount of the entire sales charge may be paid to certain financial
institutions, who might then be deemed to be "underwriters" under the Securities
Act of 1933.

REDUCED SALES CHARGE:

RIGHTS OF ACCUMULATION

The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Funds for their own combined individual and
joint accounts or for trust or custodial accounts for their minor children, and
(iii) a fiduciary purchasing for any one trust, estate or fiduciary account,
including employee benefit plans created under Sections 401 or 457 of the
Internal Revenue Code of 1986, as amended (the "Code") including related plans
of the same employer.

To exercise your right of accumulation based upon shares you already own, you
must ask the Distributor for this reduced sales charge at the time of your
additional purchase and provide the account number(s) of the investor, as
applicable, the investor and
<PAGE>
11

spouse, and their minor children. The Funds may amend or terminate this right of
accumulation at any time as to subsequent purchases.

REDUCED SALES CHARGE: LETTER OF INTENT

WAIVER OF SALES LOAD

In addition, purchases of Retail Class B shares of a Fund that are funded by the
proceeds from the redemption (within 60 days of the purchase of Fund shares) of
shares of any unrelated open-end investment company that charges a sales load
may be made at net asset value. To make such a purchase at net asset value, the
investor or the investor's broker must, at the time of purchase, submit a
written request to the Transfer Agent that the purchase be processed at net
asset value pursuant to this privilege, accompanied by a photocopy of the
confirmation (or similar evidence) showing the redemption from the unrelated
fund. The redemption of the shares of the non-related fund is, for federal
income tax purposes, a sale upon which a gain or loss may be realized.

EXCHANGES OF SHARES

You may exchange Retail Class B or Institutional Class A shares of any Fund for
Retail Class B or Institutional Class A shares, respectively, of any other Fund
sold through this prospectus without paying any additional sales charge.
Exchanges are generally made at net asset value.

The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' notice.

REDEMPTION OF SHARES

You may redeem your shares without charge on any Business Day. There is,
however, a $15 charge for
<PAGE>
13

OTHER INFORMATION REGARDING REDEMPTIONS

PERFORMANCE

From time to time, each of the Funds may advertise yield and total return. The
Hawaii Tax-Free Fund may also advertise a tax-equivalent yield. These figures
are based on historical earnings and are not intended to indicate future
performance. No representation can be made concerning actual future yields or
returns.

The Funds may periodically compare their performance to that of other mutual
funds tracked by mutual funds rating services (such as Lipper Analytical),
financial and business publications and periodicals, broad groups of comparable
mutual funds or unmanaged indices which may assume investment of dividends but
generally do not reflect deductions for administrative and management costs. The
Funds may quote Morningstar, Inc., a service that ranks mutual funds on the
basis of risk-adjusted performance. The Funds may use long-term performance of
these capital market indices to demonstrate general long-term risk versus reward
scenarios and could include the value of a hypothetical investment in any of the
capital markets. The Funds may also quote financial and business publications
and periodicals as they relate to fund management, investment philosophy, and
investment techniques.

Shareholders but approval will be sought for certain changes in the operation of
the Trust and for the election of Trustees under certain circumstances.

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders should direct inquiries to Bishop Street Funds at P.O. Box 419721,
Kansas City, MO 64141-6721 or by calling 1-800-262-9565.

DIVIDENDS

Shareholders automatically receive all income dividends and capital gains
distributions in the form of additional shares at the net asset value next
determined following the record date, unless the Shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Bishop Street Funds at P.O. Box 419721, Kansas City, MO
64141-6721, at least 15 days prior to the distribution. Shareholders may receive
payments for cash distributions in the form of a check, by Federal Reserve wire
transfer or ACH.

The dividends on Retail Class B Shares of the Funds will normally be lower than
those on Institutional Class A Shares because of the distribution expenses
charged to Retail Class B Shares.

COUNSEL AND INDEPENDENT ACCOUNTANTS

Morgan, Lewis & Bockius serves as counsel to the Trust. Coopers & Lybrand L.L.P.
serves as the independent accountant of the Trust.

CUSTODIAN

Chemical Bank, (the "Custodian"), acts as custodian of the Trust's assets. The
Custodian holds cash, securities and other assets of the Trust as required by
the 1940 Act.

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of the permitted investments for the various
Funds and the various risk factors associated therewith:

BISHOP STREET FUNDS
INVESTMENT ADVISER:
FIRST HAWAIIAN BANK

BISHOP STREET MONEY MARKET FUND

This Prospectus sets forth concisely the basic information about the Fund and
the Trust that a prospective investor should know before investing. Investors
are advised to read this Prospectus and retain it for future reference. A
Statement of Additional Information dated January 30, 1995 has been filed with
the Securities and Exchange Commission and is available without charge by
calling 1-800-262-9565. The Statement of Additional Information is incorporated
into this Prospectus by reference.

JANUARY 30, 1995
<PAGE>
2

SUMMARY

WHO IS THE ADMINISTRATOR? SEI Financial Management Corporation serves as the
Administrator and shareholder servicing agent of the Trust. See "Expense
Summary" and "The Administrator."

WHO IS THE TRANSFER AGENT? Supervised Service Company serves as transfer agent
and dividend disbursing agent for the Trust. See "The Transfer Agent."

WHO IS THE DISTRIBUTOR? SEI Financial Services Company serves as distributor of
the Trust's shares. See "The Distributor."

HOW DO I PURCHASE, EXCHANGE OR REDEEM SHARES? Purchases, exchanges or
redemptions of shares may be made on any day on which both the New York Stock
Exchange and Federal Reserve wire system are open for business ("Business Days")
except for Hawaii state banking holidays. A purchase, exchange or redemption
order will be executed at a per share price equal to the net asset value per
share next determined after the receipt of the purchase, exchange or redemption
order. Orders must be placed prior to 1:00 p.m., New York Time, on any Business
Day for the order to be effective that day. The minimum initial investment is
$1,000 ($500 for IRAs and $500 for officers, directors, or employees of First
Hawaiian Bank and its affiliates). Subsequent purchases of shares must be at
least $100. Net asset value is determined as of 1:00 p.m., New York Time, on
each Business Day. See "Purchase of Shares," "Exchange of Shares," and
"Redemption of Shares."

<PAGE>
5

THE TRUST

BISHOP STREET FUNDS (the "Trust") is an open-end management investment company
that offers units of beneficial interest ("shares") in the Fund through separate
Classes (Retail Class B and Institutional Class A), which provide for variations
in sales charges, distribution costs, voting rights and dividends. Except for
these differences, each share of each Fund represents an undivided,
proportionate interest in the Fund. This Prospectus offers shares of the Trust's
Money Market Fund. Information regarding the Trust's High Grade Income Fund,
Hawaii Tax-Free Fund and Equity Fund is contained in a separate prospectus that
may be obtained by calling 1-800-262-9565.

INVESTMENT OBJECTIVE AND POLICIES

The Fund invests in the following U.S. dollar-denominated, high quality debt
obligations with remaining maturities of 397 days or less: (i) commercial paper
rated in the highest short-term ratings categories of a nationally recognized
statistical rating organization ("NRSRO"), or, if not rated, determined by the
Adviser to be of comparable quality; (ii) obligations (certificates of deposit,
time deposits, notes and bankers' acceptances) of U.S. savings and loan and
thrift institutions and U.S. commercial banks, provided that such institutions
(or, in the case of a branch, the parent institution) have total assets of $500
million or more as shown on their last published financial statements at the
time of investment; (iii) short-term corporate obligations with a remaining term
of not more than one year of issuers with commercial paper of comparable
priority and security meeting the above ratings; (iv) U.S. Treasury obligations
and obligations issued or guaranteed as to principal and interest by the
agencies or instrumentalities of the U.S. Government, including STRIPS; (v)
receipts; and (vi) repurchase agreements involving any of the foregoing
obligations.

The Fund may invest in floating or variable rate obligations, and may purchase
securities on a "when-issued" basis.

INVESTMENT LIMITATIONS

The Fund may not:

The foregoing percentage limitations will apply at the time of the purchase of a
security. Additional investment limitations are set forth in the Statement of
Additional Information.

FUNDAMENTAL POLICIES

The Fund's investment objective and the foregoing investment limitations are
fundamental policies. Fundamental policies cannot be changed with
<PAGE>
6

respect to the Fund without the consent of the holders of a majority of the
Fund's outstanding shares.

THE ADVISER

The Adviser is a wholly-owned subsidiary of First Hawaiian, Inc. The Adviser has
not previously served as an investment adviser to a mutual fund. The Adviser and
its corporate predecessors have provided trust and asset management services in
Hawaii for over 70 years. As of December 30, 1994, the Adviser had assets under
management of approximately $1.5 billion for trust and agency clients.

THE SUB-ADVISER

The Sub-Adviser is a professional investment counseling firm which provides
investment services to investment companies, employee benefit plans, endowments,
foundations, and other institutions and individuals. As of September 30, 1994
Wellington had discretionary management authority with respect to approximately
$82 billion of assets. The Sub-Adviser and its predecessor organizations have
provided investment advisory services to investment companies since 1933 and to
investment counseling clients since 1960. Wellington Management Company, 75
State Street, Boston, MA 02109, is a Massachusetts general partnership, of which
the following persons are managing partners: Robert W. Doran, Duncan M.
McFarland and John B. Neff.

THE ADMINISTRATOR

The Administrator is entitled to a fee, calculated daily and paid monthly, at an
annual rate of .20% of the average daily net assets of the Fund.

THE TRANSFER AGENT

Supervised Service Company (the "Transfer Agent"), P.O. Box 419721, Kansas City,
Missouri 64141-6721, serves as the Transfer Agent and dividend disbursing agent
for the Trust.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary of
SEI, serves as distributor. The Retail Class B shares of the Trust have a
<PAGE>
7

Rule 12b-1 Distribution Plan (the "Retail Class B Plan"), under which such
shares of the Fund bear distribution expenses and related service fees at the
annual rate of up to .10% of their average daily net assets. Financial
institutions that are the record owner of shares for the account of their
customers may impose separate fees for account services to their customers.

The Fund may execute repurchase agreements through the Distributor, for which
the Distributor receives compensation.

HOW TO PURCHASE SHARES

GENERAL INFORMATION

Shares of the Fund are available for sale in the State of Hawaii and Guam.

The net asset value per share of the Fund is determined as of 1:00 p.m., New
York time on each Business Day by dividing the total market value of the Fund's
investments and other assets, less any liabilities, by the total outstanding
shares of the Fund. The Fund values its portfolio securities using the amortized
cost method of valuation, approximating market value. Purchases will be made in
full and fractional shares calculated to three decimal places. Pursuant to
guidelines adopted and monitored by the Trustees of the Trust, the Fund may use
a pricing service to provide market quotations or fair market valuations. A
pricing service may derive such valuations through the use of a matrix system to
value fixed income securities which considers factors such as securities prices,
yield features, ratings, and developments related to a specific security.
Although the methodology and procedures for determining net asset value are
identical for both classes of the Fund, the net asset value per share of such
classes may differ because of the distribution expenses charged to Retail Class
shares.

The Trust reserves the right to reject a purchase order for shares when the
Distributor determines that it is not in the best interest of the Trust and/or
its Shareholders to accept such order.

Shareholders who own their shares of record and who desire to transfer
registration of their shares should contact the Transfer Agent at 1-800-262-9565
for further instructions.

HOW TO PURCHASE INSTITUTIONAL CLASS A SHARES

Institutional Class A shares may only be purchased by First Hawaiian Bank in its
capacity as Agent, Fiduciary, Custodian or Adviser.

HOW TO PURCHASE RETAIL CLASS B SHARES

Retail Class B shares of the Fund may be purchased directly from the Transfer
Agent by mail, by wire or through an automatic investment plan ("AIP"). Shares
may also be purchased through broker-dealers that have established a dealer
agreement with the Distributor.

HOW TO PURCHASE BY MAIL

Money Market Fund," to the Transfer Agent at P.O. Box 419721, Kansas City,
Missouri 64141-6721. You may purchase more shares at any time by mailing payment
to the Transfer Agent at the above address. Orders placed by mail will be
executed on receipt of your payment. If your check does not clear, your purchase
will be canceled and you could be liable for any losses or fees incurred.

You may obtain Account Application Forms by calling the Distributor at
1-800-262-9565.

HOW TO PURCHASE BY WIRE

You may purchase shares by wiring Federal funds, provided that your Account
Application has been previously received. You must wire funds to the Transfer
Agent and the wire instructions must include your account number. You must call
the Transfer Agent at 1-800-262-9565 before wiring any funds. An order to
purchase shares by Federal funds wire will be deemed to have been received by
the Fund on the Business Day of the wire; provided that the shareholder wires
funds to the Transfer Agent prior to 1:00 p.m., New York time. If the Transfer
Agent does not receive the wire by 1:00 p.m., New York time, the order will be
executed on the next Business Day.

HOW TO PURCHASE THROUGH AN AUTOMATIC INVESTMENT PLAN ("AIP")

HOW TO PURCHASE THROUGH FINANCIAL INSTITUTIONS

Customers who desire to transfer the registration of shares beneficially owned
by them but held of record by a financial institution should contact the
institution to accomplish such change.

EXCHANGE OF SHARES

You may exchange Retail Class B or Institutional Class A shares of the Money
Market Fund for Retail Class B or Institutional Class A shares, respectively, of
the High Grade Income, Hawaii Tax-Free or Equity Funds of the Trust at net asset
value plus any applicable sales charge. Exchanges of Retail Class B or
Institutional Class A shares of any other Fund of the Trust for Retail Class B
shares or Institutional Class A shares of the Money Market Fund will be made at
net asset value.

Exchanges will be made only after instructions in writing or by telephone (an
"Exchange Request") are received by the Transfer Agent. In order to effect an
exchange of shares by telephone, you must elect the telephone exchange option on
your Account Application Form. If an Exchange Request in good order is received
by the Transfer Agent on any Business Day, the exchange will occur on that day.
The exchange privilege may be exercised only in those states where the class of
shares of the "new" Fund may legally be sold.

Customers who beneficially own shares held by a financial institution should
contact that institution if
<PAGE>
9

they wish to exchange shares. The institution will contact the Transfer Agent
and effect the exchange on behalf of the Customer.

The Trust reserves the right to change the terms or conditions of the exchange
privilege discussed herein upon sixty days' notice.

REDEMPTION OF SHARES

BY MAIL

A written request for redemption must be received by the Transfer Agent, P.O.
Box 419721, Kansas City, Missouri 64141-6721 in order to constitute a valid
redemption request.

BY TELEPHONE

SYSTEMATIC WITHDRAWAL PLAN ("SWP")

The Fund offers a Systematic Withdrawal Plan ("SWP"), which you may use to
receive regular distributions from your account. Upon commencement of the SWP,
your account must have a current value of $20,000 or more. You may elect to
receive automatic payments via check or ACH of $50 or more on a monthly,
quarterly, semi-annual or annual basis. You may obtain an SWP Application Form
by contacting the Distributor at 1-800-262-9565.

be depleted. Thus, depending on the frequency and amounts of the withdrawal
payments and/or any fluctuations in the net asset value per share, your original
investment could be exhausted entirely. You may change or cancel the SWP at any
time on written notice to the Transfer Agent. The Transfer Agent may require
that the signature on the written notice be guaranteed.

OTHER INFORMATION REGARDING REDEMPTIONS

PERFORMANCE

For the Fund, the performance of Institutional Class A shares will be higher
than that of Retail Class B shares because of the distribution expenses charged
to Retail Class B shares.

benchmark while measures of benchmark correlation indicate how valid a
comparative benchmark might be. Measures of volatility and correlation are
calculated using averages of historical data and cannot be calculated precisely.

TAXES

The following summary of Federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the Federal, state, or local income tax treatment of the Fund or
its Shareholders. Accordingly, Shareholders are urged to consult their tax
advisers regarding specific questions as to Federal, state and local income
taxes. State and local tax consequences of an investment in the Fund may differ
from the Federal income tax consequences described below. Additional information
concerning taxes is set forth in the Statement of Additional Information.

TAX STATUS OF THE FUND

TAX STATUS OF DISTRIBUTIONS

The Fund distributes substantially all of its net investment income (including
net short-term capital gains) and net capital gains to Shareholders. Dividends
from the Fund's net investment company taxable income are taxable to its
Shareholders as ordinary income (whether received in cash or in additional
shares) to the extent of the Fund's earnings and profits. Distributions of net
capital gains do not qualify for that deduction and are taxable to Shareholders
as long-term capital gains, regardless of how long Shareholders have held their
shares and regardless of whether the distributions are received in cash or in
additional shares. The Fund provides annual reports to Shareholders of the
Federal income tax status of all distributions.

The Fund intends to make sufficient distributions to avoid liability for the
Federal excise tax.

Sale, exchange or redemption of Fund Shares is a taxable transaction to the
Shareholder.

GENERAL INFORMATION

THE TRUST

The Trust was organized as a Massachusetts business trust under Declaration of
Trust dated May 25, 1994. The Declaration of Trust permits the Trust to offer
separate portfolios of shares and different classes of each portfolio. In
addition to the Fund, the Trust consists of the following portfolios: Bishop
Street High Grade Income, Hawaii Tax-Free, and Equity Funds. All consideration
received by the
<PAGE>
12

Trust for shares of any Fund and all assets of such Fund belong to that Fund and
would be subject to the liabilities related thereto.

TRUSTEES OF THE TRUST

The Trustees of the Trust are as follows:

<TABLE>
<CAPTION>
NAME BUSINESS HISTORY
- ------------------------- ----------------------------
<S> <C>
Mr. Martin Anderson Attorney--Goodsill,
Anderson, Quinn & Stifel
Mr. Philip H. Ching Vice Chairman--First
Hawaiian Bank
Honorable Shunichi Kimura Judge--State of Hawaii
Judiciary 1974-1994
Honorable William S. Trustee--Kamehameha Schools
Richardson Bishop Estate (through
1992); Chief
Justice--Supreme Court of
Hawaii, (through 1983)
Lieutenant Governor--State
of Hawaii (1962-1966)
Mr. Manuel R. Sylvester Managing and Executive
Partner--Coopers & Lybrand
(through 1992)
Dr. Joyce S. Tsunoda Educator and Administrator--
University of Hawaii
Mr. David G. Lee Senior Vice President--SEI
Financial Management
Corporation
</TABLE>

VOTING RIGHTS

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholders should direct inquiries to Bishop Street Funds at P.O. Box 419721,
Kansas City, MO 64141-6721 or by calling 1-800-262-9565.

DIVIDENDS

receive the dividend. If any net capital gains are realized, they will be
distributed by the Fund at least annually.

Shareholders automatically receive all income dividends and capital gains
distributions in additional shares at the net asset value next determined
following the record date, unless the Shareholder has elected to take such
payment in the form of cash. Shareholders may change their election by providing
written notice to the Bishop Street Funds at P.O. Box 419721, Kansas City, MO
64141-6721 at least 15 days prior to the distribution. Shareholders may receive
payments for cash distributions in the form of a check, by Federal Reserve wire
transfer or ACH.

The dividends on Retail Class B Shares of the Fund will be lower than those on
Institutional Class A Shares because of the distribution expenses charged to
Retail Class B Shares.

COUNSEL AND INDEPENDENT ACCOUNTANTS

Morgan, Lewis & Bockius serves as counsel to the Trust. Coopers & Lybrand L.L.P.
serves as the independent accountant of the Trust.

CUSTODIAN

Chemical Bank, (the "Custodian"), acts as custodian of the Trust's assets. The
Custodian holds cash, securities and other assets of the Trust as required by
the 1940 Act.

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of the permitted investments for the Fund and the
various risk factors associated therewith:

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 010
<NAME> MONEY MARKET FUND CLASS A
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-30-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 309894
<INVESTMENTS-AT-VALUE> 309894
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 309894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1116
<TOTAL-LIABILITIES> 1116
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 308774
<SHARES-COMMON-STOCK> 305116
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 308778
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15991
<OTHER-INCOME> 0
<EXPENSES-NET> 1334
<NET-INVESTMENT-INCOME> 14657
<REALIZED-GAINS-CURRENT> 4
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14661
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14594
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 752769
<NUMBER-OF-SHARES-REDEEMED> 447659
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> 308778
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 800
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1757
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .051
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .051
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> MONEY MARKET FUND CLASS B
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> FEB-17-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 309894
<INVESTMENTS-AT-VALUE> 309894
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 309894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1116
<TOTAL-LIABILITIES> 1116
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 308774
<SHARES-COMMON-STOCK> 3658
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 308778
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 15991
<OTHER-INCOME> 0
<EXPENSES-NET> 1334
<NET-INVESTMENT-INCOME> 14657
<REALIZED-GAINS-CURRENT> 4
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 14661
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 14594
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5529
<NUMBER-OF-SHARES-REDEEMED> 1930
<SHARES-REINVESTED> 59
<NET-CHANGE-IN-ASSETS> 308778
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 800
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1757
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .047
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .047
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 020
<NAME> HAWAII MUNICIPAL BOND FUND CLASS A
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> FEB-16-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 15106
<INVESTMENTS-AT-VALUE> 15594
<RECEIVABLES> 0
<ASSETS-OTHER> 519
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 16113
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15585
<SHARES-COMMON-STOCK> 899
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 41
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 487
<NET-ASSETS> 16113
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 422
<OTHER-INCOME> 0
<EXPENSES-NET> 23
<NET-INVESTMENT-INCOME> 399
<REALIZED-GAINS-CURRENT> 41
<APPREC-INCREASE-CURRENT> 487
<NET-CHANGE-FROM-OPS> 927
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 221
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9397
<NUMBER-OF-SHARES-REDEEMED> 381
<SHARES-REINVESTED> 97
<NET-CHANGE-IN-ASSETS> 16113
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 27
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 88
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .451
<PER-SHARE-GAIN-APPREC> .473
<PER-SHARE-DIVIDEND> .452
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.47
<EXPENSE-RATIO> .27
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> HAWAII MUNICIPAL BOND FUND CLASS B
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> FEB-15-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 15106
<INVESTMENTS-AT-VALUE> 15594
<RECEIVABLES> 0
<ASSETS-OTHER> 519
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 16113
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15585
<SHARES-COMMON-STOCK> 640
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 41
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 487
<NET-ASSETS> 16113
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 422
<OTHER-INCOME> 0
<EXPENSES-NET> 23
<NET-INVESTMENT-INCOME> 399
<REALIZED-GAINS-CURRENT> 41
<APPREC-INCREASE-CURRENT> 487
<NET-CHANGE-FROM-OPS> 927
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 178
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6868
<NUMBER-OF-SHARES-REDEEMED> 516
<SHARES-REINVESTED> 120
<NET-CHANGE-IN-ASSETS> 16113
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 27
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 88
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .453
<PER-SHARE-GAIN-APPREC> .472
<PER-SHARE-DIVIDEND> .451
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.47
<EXPENSE-RATIO> .33
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>