INVESTMENT ADVISER:
FIRST HAWAIIAN BANK
DISTRIBUTOR:
SEI FINANCIAL SERVICES COMPANY
A FAMILY OF MUTUAL FUNDS
ADVISED BY FIRST HAWAIIAN BANK
BISHOP
STREET
FUNDS
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1996
MONEY MARKET FUND
TREASURY MONEY MARKET FUND
HAWAII MUNICIPAL BOND FUND
THIS INFORMATION MUST BE PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS FOR
EACH FUND DESCRIBED.
BSF-F-004-02
<PAGE>
BISHOP STREET FUNDS
LETTER TO SHAREHOLDERS
DEAR SHAREHOLDERS:
ONCE AGAIN WE ARE PLEASED TO SUBMIT TO YOU THE BISHOP STREET FUNDS' SEMI-ANNUAL
REPORT TO SHAREHOLDERS. THIS REPORT COVERS THE SIX-MONTH PERIOD ENDING JUNE 30,
1996. IN ADDITION TO PROVIDING PERFORMANCE AND FINANCIAL INFORMATION ABOUT THE
MONEY MARKET FUND AND THE HAWAII MUNICIPAL BOND FUND FOR THE FIRST HALF OF
FISCAL 1996, IT ALSO PROVIDES A "FIRST LOOK" AT THE NEW TREASURY MONEY MARKET
FUND WHICH WAS LAUNCHED ON MAY 1, 1996.
SHAREHOLDERS OF THE BISHOP STREET FUNDS DURING THE PERIOD BENEFITED FROM THE
CONSERVATIVE INVESTMENT PHILOSOPHY PRACTICED BY FIRST HAWAIIAN BANK AND
WELLINGTON MANAGEMENT COMPANY, THE FUNDS' INVESTMENT ADVISERS. WE BELIEVE THAT
THIS CONSERVATIVE MANAGEMENT STYLE IS THE BEST APPROACH IN A YEAR THAT IS LIKELY
TO BE CHARACTERIZED BY POLITICAL SURPRISES INHERENT DURING A PRESIDENTIAL
ELECTION AND ECONOMIC SURPRISES PRODUCED BY REPORTS WHICH RAISE FEARS OF
INFLATION.
DESPITE A DELUGE OF ECONOMIC REPORTS DURING THE PERIOD, THE MARKETS WERE MOST
INFLUENCED BY STRONG EMPLOYMENT GROWTH WHICH CONTINUED INTO THE SECOND QUARTER.
AN IMPROVING JOB MARKET DROVE CONSUMER CONFIDENCE AND SPENDING AND MAY
ULTIMATELY TRANSLATE INTO STRONGER DOMESTIC GROWTH. THE POSSIBILITY OF STRONGER
GROWTH FUELED EXPECTATIONS THAT THE FEDERAL RESERVE WOULD RAISE SHORT TERM
INTEREST RATES TO WARD OFF INFLATION. WHILE TO DATE THE FED HAS HELD SHORT TERM
INTEREST RATES STEADY AT 5.25%, THE YIELD CURVE FOR MONEY MARKET SECURITIES
STEEPENED AND THE YIELD ON THE BENCHMARK 30-YEAR U.S. TREASURY BOND HAS RISEN
NEARLY 1 PERCENTAGE POINT AS THE MARKET ANTICIPATES FUTURE FED TIGHTENING.
THE BISHOP STREET MONEY MARKET AND TREASURY MONEY MARKET FUNDS HAVE POSITIONED
THEMSELVES TO QUICKLY TAKE ADVANTAGE OF POTENTIAL FUTURE FED RATE HIKES BY
SHORTENING THEIR AVERAGE WEIGHTED MATURITIES. THE BISHOP STREET HAWAII MUNICIPAL
BOND FUND HAS POSITIONED ITSELF ON THE SHORTER END OF THE LONG TERM MUNICIPAL
BOND MATURITY SPECTRUM IN ORDER TO PROVIDE A RELATIVELY HIGH AFTER-TAX INCOME
STREAM WHILE ATTEMPTING TO MINIMIZE PRICE FLUCTUATIONS.
NATURALLY, IT IS IMPOSSIBLE TO PREDICT WITH ABSOLUTE CERTAINTY THE FUTURE COURSE
OF THE ECONOMY AND THE DIRECTION OF INTEREST RATES. HOWEVER, WE WANT YOU TO KNOW
THAT WE ARE VIGILANT IN OUR MANAGEMENT OF THE BISHOP STREET FUNDS AND RESPONSIVE
TO A CONTINUOUSLY CHANGING ECONOMIC ENVIRONMENT. AS ALWAYS, DESPITE THE
UNCERTAINTIES OF TODAY'S MARKET, OUR COMMITMENT TO YOU IS TO PROVIDE YOU WITH
SOUND INVESTMENT MANAGEMENT AND QUALITY SERVICE.
WE ENCOURAGE YOU TO READ THIS ENTIRE REPORT COMPLETELY. IF YOU HAVE ANY
QUESTIONS ABOUT THIS REPORT OR THE BISHOP STREET FUNDS, WE INVITE YOU TO CALL
OUR INVESTORS' SERVICE AREA AT 1-800-262-9565.
AGAIN, WE THANK YOU FOR THE TRUST YOU HAVE PLACED IN THE BISHOP STREET FUNDS.
SINCERELY,
(/S/ RPBERT A. ALM)
ROBERT A. ALM
SENIOR VICE PRESIDENT AND MANAGER,
FINANCIAL MANAGEMENT GROUP
FIRST HAWAIIAN BANK, INVESTMENT ADVISER
<PAGE>
JUNE 30, 1996 (Unaudited)
STATEMENT OF NET ASSETS
MONEY MARKET FUND
- ----------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------------------------------------------------------
COMMERCIAL PAPER (62.2%)
American Home Products
5.400%, 08/13/96 $ 5,000 $ 4,968
Associates Corporation of
North America
5.360%, 07/15/96 11,400 11,376
Bear Stearns
5.300%, 07/16/96 10,200 10,177
Centric Funding
5.350%, 07/17/96 5,000 4,988
5.300%, 08/01/96 6,000 5,973
Chrysler Financial
5.300%, 07/01/96 11,000 11,000
Ciesco
5.330%, 07/17/96 11,500 11,473
Coca Cola Enterprises
5.350%, 07/22/96 11,500 11,464
Corporate Receivables
5.400%, 07/09/96 1,000 999
Dean Witter Discover
5.300%, 08/01/96 10,000 9,954
Dresser Industries
5.400%, 07/17/96 2,057 2,052
Enterprise Funding
5.310%, 08/23/96 1,426 1,415
Ford Motor Credit
5.250%, 08/01/96 11,500 11,448
General Motors Acceptance
5.270%, 08/23/96 2,000 1,984
5.450%, 11/08/96 9,000 8,823
Government Development Bank
of Puerto Rico
5.320%, 07/03/96 7,500 7,498
5.320%, 07/18/96 3,500 3,491
International Lease Finance
5.400%, 07/12/96 3,700 3,694
National Fuel Gas
5.400%, 07/22/96 10,000 9,969
National Rural Utilities
5.400%, 07/03/96 2,300 2,299
5.340%, 07/08/96 2,500 2,497
- ----------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------------------------------------------------------
New Center Asset Trust
5.270%, 09/24/96 $ 3,000 $ 2,963
Ranger Funding
5.350%, 07/03/96 8,443 8,440
5.420%, 07/16/96 1,008 1,006
Riverwood Funding
5.300%, 07/31/96 10,000 9,956
Sears Roebuck Acceptance
5.400%, 07/22/96 11,000 10,965
Smith Barney
5.350%, 07/10/96 10,000 9,987
SunTrust Banks
5.250%, 09/03/96 5,000 4,953
Transamerica Finance
5.340%, 07/09/96 1,340 1,338
Whirlpool Finance
5.310%, 08/21/96 11,000 10,917
--------
TOTAL COMMERCIAL PAPER
(Cost $198,067) 198,067
--------
FLOATING RATE NOTES (12.0%)
CoreStates Capital (A)
5.440%, 10/08/96 10,000 10,000
Peoples Security Life (A)
5.580%, 07/01/96 10,000 10,000
SMM Trust 96-1 (A)
5.480%, 05/29/97 8,000 8,000
SMM Trust 95-B (A)
5.488%, 08/02/96 2,000 2,000
Travelers Insurance
5.570%, 07/01/96 8,000 8,000
--------
TOTAL FLOATING RATE NOTES
(Cost $38,000) 38,000
--------
MEDIUM TERM NOTES (2.2%)
NationsBank (A)
5.500%, 11/18/96 3,000 3,001
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
BISHOP STREET FUNDS
- ----------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------------------------------------------------------
Wells Fargo (A)
5.582%, 08/16/96 $ 4,075 $ 4,075
--------
TOTAL MEDIUM TERM NOTES
(Cost $7,076) 7,076
--------
CERTIFICATES OF DEPOSIT/BANK NOTES (13.5%)
Bank of Hawaii
5.570%, 11/06/96 5,000 5,002
Barnett Banks
5.390%, 07/08/96 10,000 10,000
First Alabama Bank
5.230%, 07/22/96 5,000 5,000
First Union National Bank
5.330%, 07/02/96 1,000 1,000
PNC Bank (A)
5.377%, 01/06/97 11,000 10,996
South Trust Central Carolina
5.450%, 10/04/96 6,000 5,999
Southtrust Bank of Alabama (A)
5.563%, 06/17/97 5,000 4,998
--------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES
(Cost $42,995) 42,995
--------
BANKERS ACCEPTANCE (0.8%)
First National Bank of Boston
5.320%, 09/17/96 2,646 2,616
--------
TOTAL BANKERS ACCEPTANCE
(Cost $2,616) 2,616
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS (4.9%)
Federal Farm Credit Bank
5.697%, 06/03/97 9,000 8,988
Federal Home Loan Mortgage
Corporation
5.390%, 07/18/96 4,630 4,618
Federal National Mortgage
Association
5.366%, 07/10/96 2,000 1,997
--------
- ----------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $15,603) $ 15,603
--------
U.S. TREASURY OBLIGATION (4.5%)
U.S. Treasury Note
7.500%, 01/31/97 $14,000 14,186
--------
TOTAL U.S. TREASURY OBLIGATION
(Cost $14,186) 14,186
--------
TOTAL INVESTMENTS (100.1%)
(Cost $318,543) 318,543
--------
OTHER ASSETS AND LIABILITIES, NET (-0.1%) (326)
--------
NET ASSETS:
Fund Shares of Institutional Class (unlimited
authorization -- no par value) based on
315,303,028 outstanding shares of
beneficial interest 315,303
Fund Shares of Retail Class (unlimited
authorization -- no par value) based on
2,940,697 outstanding shares of
beneficial interest 2,941
Accumulated Net Realized Loss on
Investments (27)
--------
TOTAL NET ASSETS (100.0%) $318,217
========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE --
INSTITUTIONAL CLASS $1.00
========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE --
RETAIL CLASS $1.00
========
- --------------------------------------------------------------------------------
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON JUNE 30, 1996. THE DATE SHOWN IS THE NEXT SCHEDULED
RESET DATE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
JUNE 30, 1996 (Unaudited)
STATEMENT OF NET ASSETS
TREASURY MONEY MARKET FUND
- ----------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------------------------------------------------------
U.S. TREASURY OBLIGATIONS (31.8%)
U.S. Treasury Bill
0.000%, 09/05/96 $30,000 $ 29,720
U.S. Treasury Note
7.500%, 01/31/97 25,000 25,274
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $54,994) 54,994
--------
REPURCHASE AGREEMENTS (68.1%)
Chase
5.47%, dated 06/28/96, matures
07/01/96, repurchase price
$30,004,558 (collateralized by
U.S. Treasury Note, par value
$31,665,000, 5.75%, matures
08/15/03: market value
$30,603,512) 30,000 30,000
DWR
5.30%, dated 06/28/96, matures
07/01/96, repurchase price
$7,001,031 (collateralized by
U.S. Treasury Note, par value
$7,330,000, 5.50%, matures
04/15/97: market value
$7,200,686) 7,000 7,000
Goldman Sachs
5.35%, dated 06/28/96, matures
07/01/96, repurchase price
$7,001,040 (collateralized by
U.S. Treasury Bond, par value
$6,820,000, 7.50%, matures
11/15/16: market value
$7,212,500) 7,000 7,000
JP Morgan
5.43%, dated 06/28/96, matures
07/01/96, repurchase price
$7,001,056 (collateralized by
U.S. Treasury Note, par value
$6,800,000, 8.75%, matures
10/15/97: market value
$7,155,176) 7,000 7,000
Lanstan
5.45%, dated 06/28/96, matures
07/01/96, repurchase price
$6,878,041 (collateralized by
U.S. Treasury Note, par value
$6,770,000, 6.375%, matures
06/30/97: market value
$7,019,644) 6,877 6,877
- --------------------------------------------------------------
FACE
AMOUNT VALUE
DESCRIPTION (000) (000)
- --------------------------------------------------------------
Lehman Brothers
5.50%, dated 06/28/96, matures
07/01/96, repurchase price
$23,003,514 (collateralized by
U.S. Treasury Note, par value
$30,470,000, 5.875%, matures
04/30/98: market value
$30,595,206) $23,000 $ 23,000
Morgan Stanley
5.32%, dated 06/28/96, matures
07/01/96, repurchase price
$7,001,034 (collateralized by
U.S. Treasury Note, par value
$5,245,000, 11.75%, matures
02/15/10: market value
$7,139,291) 7,000 7,000
UBS
5.48%, dated 06/28/96, matures
07/01/96, repurchase price
$30,004,568 (collateralized by
various U.S. Treasury Notes,
total par value $28,983,000,
6.875% - 8.50%, 01/31/00 -
03/31/00: total market value
$30,600,876) 30,000 30,000
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $117,877) 117,877
--------
TOTAL INVESTMENTS (99.9%)
(Cost $172,871) 172,871
--------
OTHER ASSETS AND LIABILITIES, NET (0.1%) 152
--------
NET ASSETS:
Fund Shares of Institutional Class
(unlimited authorization -- no par
value) based on 173,023,020
outstanding shares of
beneficial interest 173,023
--------
TOTAL NET ASSETS (100.0%) $173,023
========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE --
INSTITUTIONAL CLASS $1.00
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
BISHOP STREET FUNDS
HAWAII MUNICIPAL BOND FUND
- -------------------------------------------------------------
FACE MARKET
AMOUNT VALUE
DESCRIPTION (000) (000)
- -------------------------------------------------------------
MUNICIPAL BONDS (99.4%)
HAWAII (85.7%)
Hawaii County Ser A, GO,
FGIC Insured
5.600%, 05/01/12 $ 450 $ 448
Hawaii County, GO, MBIA Insured
6.850%, 12/01/02 250 260
Hawaii County, Hawaii Refunding
and Improvement, GO, Ser A,
FGIC Insured
5.300%, 05/01/05 220 222
Hawaii County, Ser A, GO,
FGIC Insured
5.600%, 05/01/13 190 189
Hawaii State, Ser CE, GO
5.250%, 06/01/11 500 474
Hawaii State Airport Systems, RB
AMBAC Insured
5.700%, 07/01/07 310 313
Hawaii State Airport Systems, RB,
FGIC Insured
7.000%, 07/01/20 755 816
Hawaii State Airport Systems, RB,
MBIA Insured
6.250%, 07/01/06 1,000 1,066
Hawaii State Airport Systems,
Ser 2, RB, FGIC Insured
7.500%, 07/01/20 50 55
Hawaii State Airport Systems,
Ser 2, RB
6.900%, 07/01/12 60 66
7.000%, 07/01/18 505 542
Hawaii State Department of
Budget & Finance Special
Purpose Mortgage, Hawaii
Electric Incorporated Project,
Ser A, RB, MBIA Insured
6.600%, 01/01/25 350 363
Hawaii State Department of
Budget & Finance Special
Purpose Mortgage, Kaiser
Permanente Project, Ser A, RB
6.500%, 03/01/11 300 311
Hawaii State Department of
Budget & Finance Special
Purpose Mortgage, Kapiolani
Health Care System Project, RB
6.300%, 07/01/08 525 541
- --------------------------------------------------------------
FACE MARKET
AMOUNT VALUE
DESCRIPTION (000) (000)
- --------------------------------------------------------------
Hawaii State Department of
Budget & Finance Special
Purpose Mortgage, Kapiolani
Health Care, RB
6.400%, 07/01/13 $ 350 $ 356
Hawaii State Department of
Budget & Finance Special
Purpose Mortgage, Queens
Medical Center Project, RB,
FGIC Insured
5.800%, 07/01/06 100 103
7.000%, 07/01/08 75 79
Hawaii State Department of
Budget & Finance Special
Purpose Mortgage, St. Francis
Medical Center Project, RB,
CGIC Insured
5.875%, 07/01/01 210 220
6.500%, 07/01/22 930 967
Hawaii State Department of
Budget & Finance, Kapiolani
Hospital, RB
6.000%, 07/01/11 250 249
Hawaii State Department of
Budget & Finance, Queens
Health Systems, Ser A, RB
6.000%, 07/01/20 750 738
Hawaii State Department of
Budget & Finance, Queens
Health Systems, Ser A, RB
5.875%, 07/01/11 250 249
Hawaii State Department of
Budget & Finance, Hawaiian
Electric, RB
6.200%, 05/01/26 750 755
Hawaii State Harbor Capital
Improvement Revenue, RB,
FGIC Insured
6.250%, 07/01/15 150 153
Hawaii State Harbor Capital
Improvement, RB, FGIC Insured
6.500%, 07/01/19 225 232
Hawaii State Harbor Capital
Improvement, RB, FGIC Insured
6.200%, 07/01/08 150 156
Hawaii State Harbor Capital
Improvement, RB, MBIA Insured
7.000%, 07/01/17 375 402
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
JUNE 30, 1996 (Unaudited)
STATEMENT OF NET ASSETS
HAWAII MUNICIPAL BOND FUND (continued)
- --------------------------------------------------------------
FACE MARKET
AMOUNT VALUE
DESCRIPTION (000) (000)
- --------------------------------------------------------------
Hawaii State Highway Project, RB
5.000%, 07/01/11 $ 510 $ 473
5.000%, 07/01/12 250 230
Hawaii State Housing, Finance &
Development Corporation
Affordable Rental Housing
Program, Ser 1995 A, RB
6.000%, 07/01/15 350 344
6.050%, 07/01/22 250 245
Hawaii State Housing, Finance &
Development Corporation Single
Family Mortgage Purchase, RB
5.550%, 07/01/07 500 494
Hawaii State Housing, Finance &
Development Corporation Single
Family Mortgage Purchase,
Ser B, RB, FNMA Collateral
5.700%, 07/01/13 595 582
5.850%, 07/01/17 1,770 1,739
Hawaii State Housing, Finance &
Development Corporation
University of Hawaii Faculty
Housing Project, RB,
AMBAC Insured
5.650%, 10/01/16 700 683
Hawaii State, Ser BZ, GO
6.000%, 10/01/12 130 135
Hawaii State, Ser CH, GO
6.000%, 11/01/10 100 106
Hawaii State, Ser CJ, GO
6.250%, 01/01/15 150 154
Hawaii Street, Ser CL 5, GO
5.100%, 03/01/06 250 247
Honolulu City & County Board of
Water Supply, RB
5.800%, 07/01/16 750 740
Honolulu City & County Board of
Water Supply, RB
5.250%, 07/01/07 250 247
Honolulu City & County Mortgage
Smith Berentia, Ser A, RB,
FHA & MBIA Insured
7.800%, 07/01/24 100 107
Honolulu City & County Ser A, GO
5.700%, 04/01/09 245 248
Honolulu City & County Waipahu
Towers Project, Ser A, RB,
GNMA Collateral
6.900%, 06/20/35 200 209
- --------------------------------------------------------------
FACE MARKET
AMOUNT VALUE
DESCRIPTION (000) (000)
- --------------------------------------------------------------
Honolulu City & County, Ser A,
GO, MBIA Insured
6.000%, 11/01/10 $ 500 $ 522
Honolulu City & County, Ser A, GO
6.000%, 01/01/10 150 157
Kauai County, Refunding Ser A,
GO, MBIA Insured
5.400%, 02/01/04 50 51
Kauai County, Ser B, GO,
AMBAC Insured
5.750%, 08/01/06 285 295
Kauai County, Ser B, GO,
MBIA Insured
5.900%, 02/01/13 260 260
Maui County, Board of Water
Supply, Ser A, RB, FGIC Insured
6.000%, 12/01/01 520 554
Maui County, GO, FGIC Insured
5.000%, 09/01/08 115 110
5.000%, 09/01/09 200 190
5.125%, 12/15/12 100 94
Maui County, GO, MBIA Insured
5.750%, 06/01/13 250 252
Maui County, Refunding GO,
FGIC Insured
5.125%, 12/15/10 290 277
Maui County, Ser A, GO,
FGIC Insured
5.750%, 01/01/11 250 253
-------
20,323
-------
GUAM (2.5%)
Guam Power Authority, Ser A,
RB, AMBAC Insured
6.375%, 10/01/08 400 428
Guam, Government Limited
Obligation, Ser A, RB
7.100%, 11/15/09 150 157
-------
585
-------
PUERTO RICO (8.7%)
Commonwealth of Puerto Rico,
GO, AMBAC Insured
5.750%, 07/01/24 375 370
Commonwealth of Puerto Rico,
GO, FSA Insured
6.000%, 07/01/22 150 152
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
BISHOP STREET FUNDS
- --------------------------------------------------------------
FACE MARKET
AMOUNT VALUE
DESCRIPTION (000) (000)
- --------------------------------------------------------------
Puerto Rico Commonwealth
Highway & Transportation
Authority Highway Revenue,
RB Prerefunded 07/01/02 @ 100
6.625%, 07/01/18 $ 280 $ 310
Puerto Rico Electric Power
Authority, Ser O, RB,
CGIC Insured
6.000%, 07/01/10 150 154
Puerto Rico Housing, Banking &
Finance Agency, Single Family
Mortgage, Affordable Housing
Mortgage Portfolio I, RB, GNMA/
FNMA/FHLMC Collateral
6.100%, 10/01/15 300 300
Puerto Rico Industrial Tourist
Educational Medical
Environmental Control Facilities
Hospital Auxilio Muto Oblig.
Group, RB, MBIA Insured
6.250%, 07/01/24 300 309
University of Puerto Rico, Ser M,
RB, MBIA Insured
5.250%, 06/01/25 500 461
-------
2,056
-------
TEXAS (1.9%)
Harris County Texas, FGIC Insured
5.000%, 08/15/16 500 452
-------
VIRGIN ISLANDS (0.6%)
Virgin Islands Housing Finance
Authority Single Family, GNMA
Mortgage Backed Securities
Program, Ser A, RB
6.500%, 03/01/25 150 151
-------
TOTAL MUNICIPAL BONDS
(Cost $23,653) 23,567
-------
CASH EQUIVALENTS (2.5%)
Dreyfus Tax Exempt Cash
Management Fund 273 274
Nuveen Federal Tax Exempt
Money Market 318 318
-------
TOTAL CASH EQUIVALENTS
(Cost $592) 592
-------
TOTAL INVESTMENTS (101.9%)
(Cost $24,245) 24,159
-------
OTHER ASSETS AND LIABILITIES, NET (-1.9%) (458)
-------
- --------------------------------------------------------------
MARKET
VALUE
DESCRIPTION (000)
- --------------------------------------------------------------
NET ASSETS:
Fund Shares of Institutional Class (unlimited
authorization -- no par value) based on
1,418,580 outstanding shares of
beneficial interest $ 14,446
Fund Shares of Retail Class (unlimited
authorization -- no par value) based
on 925,545 outstanding shares of
beneficial interest 9,405
Accumulated Net Realized Loss on Investments (64)
Net Unrealized Depreciation on Investments (86)
-------
TOTAL NET ASSETS (100.0%) $23,701
=======
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE --
INSTITUTIONAL CLASS $ 10.11
=======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- RETAIL CLASS $ 10.11
=======
MAXIMUM OFFERING PRICE PER SHARE -
RETAIL CLASS ($10.11(DIVIDE)96.5%) $ 10.48
=======
- --------------------------------------------------------------------------------
AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CGIC--CAPITAL GUARANTY INSURANCE CORPORATION
FGIC--FEDERAL GUARANTY INSURANCE CORPORATION
FHA--FEDERAL HOUSING AUTHORITY
FHLMC--FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA--FINANCIAL SECURITY ASSURANCE
GNMA--GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO--GENERAL OBLIGATION
MBIA--MUNICIPAL BOND INSURANCE ASSOCIATION
RB--REVENUE BOND
SER--SERIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
FOR THE PERIOD ENDED JUNE 30, 1996
STATEMENT OF OPERATIONS (000)
(Unaudited)
- --------------------------------------------------------------------------------
HAWAII
MONEY MARKET TREASURY MONEY MUNICIPAL BOND
FUND MARKET FUND(2) FUND
============ ============== ==============
INTEREST INCOME: $8,891 $1,344 $ 576
------ ------ -----
EXPENSES:
Investment Adviser Fee 484 75 36
Investment Adviser Fee Waiver (4) (30) (36)
Contribution by Investment
Adviser -- -- (10)
Management Fee 322 50 20
Management Fee Waiver (161) (25) (20)
Custody Fees 17 7 4
Transfer Agent Fees 18 7 15
Registration Fees 44 17 7
Distribution Fees (1) 2 -- 10
Distribution Fee Waiver -- -- (10)
Trustees Fees 22 3 1
Printing Fees 14 2 1
Professional Fees 26 4 2
Amortization of Deferred
Organizational Costs 3 -- 3
Miscellaneous Expenses 21 -- (1)
------ ------ -----
Total Expenses 808 110 22
------ ------ -----
Net Investment Income 8,083 1,234 554
------ ------ -----
Net Realized Loss on Investments (31) -- (105)
Change in Unrealized Depreciation
on Investments -- -- (573)
------ ------ -----
Net Realized and Unrealized Loss
on Investments (31) -- (678)
------ ------ -----
Increase (Decrease) in Net Assets
Resulting from Operations $8,052 $1,234 $(124)
====== ====== =====
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) ALL DISTRIBUTION FEES ARE INCURRED IN THE RETAIL CLASS B.
(2) COMMENCED OPERATIONS ON MAY 1, 1996.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 (UNAUDITED) BISHOP STREET FUNDS
AND FOR THE PERIOD ENDED DECEMBER 31, 1995
STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
TREASURY
MONEY MARKET MONEY MARKET
FUND FUND
========================== =============
01/01/96 01/30/95 (1) 5/01/96 (2)
TO 06/30/96 TO 12/31/95 TO 06/30/96
-------------------------- -------------
INVESTMENT ACTIVITIES:
Net Investment Income $ 8,083 $ 14,657 $ 1,234
Net Realized Gain (Loss) on
Investments (31) 4 --
Change in Unrealized Appreciation
on Investments -- -- --
-------- --------- --------
Increase in Net Assets Resulting
From Operations 8,052 14,661 1,234
-------- --------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Institutional Class A (8,001) (14,594) (1,234)
Retail Class B (82) (63) --
-------- --------- --------
Total Distributions (8,083) (14,657) (1,234)
-------- --------- --------
Change in Net Assets (31) 4 --
-------- --------- --------
CAPITAL SHARE TRANSACTIONS:
(ALL AT $1.00 PER SHARE)
Institutional Class A Shares:
Proceeds from Shares Issued 215,118 752,769 317,866
Reinvestment of Cash Distributions 6 6 --
Cost of Shares Redeemed (204,937) (447,659) (144,843)
-------- --------- --------
Total Institutional Capital
Share Transactions 10,187 305,116 173,023
Retail Class B Shares:
Proceeds from Shares Issued 2,067 5,529 --
Reinvestment of Cash Distributions 64 59 --
Cost of Shares Redeemed (2,848) (1,930) --
-------- --------- --------
Total Retail Capital Share
Transactions (717) 3,658 --
-------- --------- --------
Net Increase in Net Assets From
Share Transactions 9,470 308,774 173,023
-------- --------- --------
Total Increase in Net Assets 9,439 308,778 173,023
NET ASSETS:
Beginning of Period 308,778 -- --
-------- --------- --------
End of Period $318,217 $ 308,778 $173,023
======== ========= ========
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) COMMENCED OPERATIONS ON JANUARY 30, 1995.
(2) COMMENCED OPERATIONS ON MAY 1, 1996.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 (UNAUDITED) AND FOR THE PERIOD
ENDED DECEMBER 31, 1995
STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
HAWAII MUNICIPAL BOND
FUND
===============================
01/01/96 02/15/95 (1)
TO 06/30/96 TO 12/31/95
-------------------------------
INVESTMENT ACTIVITIES:
Net Investment Income $ 554 $ 399
Net Realized Gain (Loss) on Investments (105) 41
Change in Unrealized Appreciation
(Depreciation) on Investments (573) 487
------- -------
Increase (Decrease) in Net Assets
Resulting From Operations (124) 927
------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income:
Institutional Class A Shares (334) (221)
Retail Class B Shares (220) (178)
------- -------
Total Distributions (554) (399)
------- -------
Change in Net Assets (678) 528
------- -------
CAPITAL SHARE TRANSACTIONS:
Institutional Class A Shares:
Proceeds from Shares Issued 5,506 9,397
Reinvestment of Cash Distributions 125 97
Cost of Shares Redeemed (298) (381)
------- -------
Total Institutional Capital
Share Transactions 5,333 9,113
Retail Class B Shares:
Proceeds from Shares Issued 3,507 6,868
Reinvestment of Cash Distributions 152 120
Cost of Shares Redeemed (726) (516)
------- -------
Total Retail Capital Share
Transactions 2,933 6,472
------- -------
Net Increase in Net Assets From Capital
Share Transactions 8,266 15,585
------- -------
Total Increase in Net Assets 7,588 16,113
NET ASSETS:
Beginning of Period 16,113 --
------- -------
End of Period $23,701 $16,113
======= =======
CAPITAL SHARE TRANSACTIONS:
Institutional Class A Shares:
Shares Issued 537 927
Shares Issued in Lieu of Cash Distributions 12 9
Shares Redeemed (30) (37)
------- -------
Total Institutional Capital Share
Transactions 519 899
------- -------
Retail Class B Shares:
Shares Issued 342 679
Shares Issued in Lieu of Cash Distributions 15 12
Shares Redeemed (71) (51)
------- -------
Total Retail Capital Share Transactions 286 640
------- -------
Net Increase in Capital Shares 805 1,539
======= =======
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) COMMENCED OPERATIONS ON FEBRUARY 15, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
BISHOP STREET FUNDS
FINANCIAL HIGHLIGHTS
(Unaudited)
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES DISTRIBUTIONS
--------------------- -------------
NET
NET REALIZED NET
ASSET AND ASSET
VALUE, NET UNREALIZED NET VALUE,
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT CAPITAL END OF TOTAL
OF PERIOD INCOME INVESTMENTS INCOME GAINS PERIOD RETURN (6)
--------- ---------- -------------- ---------- ------- ------ ----------
- -----------------
MONEY MARKET FUND
- -----------------
<C> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED JUNE 30,
1996: $1.00 $0.03 -- $(0.03) -- $1.00 5.34%
FOR THE PERIOD ENDED DECEMBER 31,
1995(1): $1.00 $0.05 -- $(0.05) -- $1.00 5.67%
RETAIL CLASS B
FOR THE PERIOD ENDED JUNE 30,
1996: $1.00 $0.03 -- $(0.03) -- $1.00 5.23%
FOR THE PERIOD ENDED DECEMBER 31,
1995(2): $1.00 $0.05 -- $(0.05) -- $1.00 5.55%
- --------------------------
TREASURY MONEY MARKET FUND
- --------------------------
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED JUNE 30,
1996(5): -- $0.01 -- $(0.01) -- $1.00 5.10%
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED JUNE 30,
1996: $10.47 $0.27 $(0.36) $(0.27) -- $10.11 (0.84%)*
FOR THE PERIOD ENDED DECEMBER 31,
1995(4): $10.00 $0.45 $ 0.47 $(0.45) -- $10.47 10.91%
RETAIL CLASS B
FOR THE PERIOD ENDED JUNE 30,
1996: $10.47 $0.27 $(0.36) $(0.27) -- $10.11 (0.84%)*
FOR THE PERIOD ENDED DECEMBER 31,
1995(3): $10.00 $0.45 $ 0.47 $(0.45) -- $10.47 10.85%
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
NET INVESTMENT
RATIO OF EXPENSES TO RATIO OF INCOME TO
NET EXPENSES AVERAGE NET AVERAGE
ASSETS, TO NET ASSETS INVESTMENT NET ASSETS
END OF AVERAGE EXCLUDING FEE INCOME TO EXCLUDING FEE PORTFOLIO
PERIOD NET WAIVERS AND AVERAGE WAIVERS AND TURNOVER
(000) ASSETS REIMBURSEMENTS NET ASSETS REIMBURSEMENTS RATE
------- -------- -------------- ----------- -------------- ---------
- -----------------
MONEY MARKET FUND
- -----------------
<C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED JUNE 30,
1996: $315,277 0.50% 0.53% 4.98% 4.95% --
FOR THE PERIOD ENDED DECEMBER 31,
1995(1): $305,120 0.50% 0.66% 5.50% 5.34% --
RETAIL CLASS B
FOR THE PERIOD ENDED JUNE 30,
1996: $ 2,940 0.60% 0.63% 4.88% 4.85% --
FOR THE PERIOD ENDED DECEMBER 31,
1995(2): $ 3,658 0.60% 0.76% 5.26% 5.10% --
- --------------------------
TREASURY MONEY MARKET FUND
- --------------------------
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED JUNE 30,
1996(5): $173,023 0.44% 0.56% 4.91% 4.79% --
- --------------------------
HAWAII MUNICIPAL BOND FUND
- --------------------------
INSTITUTIONAL CLASS A
FOR THE PERIOD ENDED JUNE 30,
1996: $ 14,340 0.21% 0.75% 5.32% 4.78% 12%
FOR THE PERIOD ENDED JUNE 30,
1995(4): $ 9,411 0.27% 1.10% 5.24% 4.40% 68%
RETAIL CLASS B
FOR THE PERIOD ENDED JUNE 30,
1996: $ 9,361 0.21% 1.00% 5.32% 5.32% 12%
FOR THE PERIOD ENDED DECEMBER 31,
1995(3): $ 6,702 0.33% 1.45% 5.14% 4.02% 68%
<FN>
* RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
** AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(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.
(5) COMMENCED OPERATIONS ON MAY 1, 1996.
(6) TOTAL RETURN DOES NOT REFLECT APPLICABLE SALES CHARGE FOR THE HAWAII
MUNICIPAL BOND FUND
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
JUNE 30, 1996 (Unaudited)
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 five funds (the "Funds") which
includes the High Grade Income Fund, Hawaii Municipal Bond Fund (formerly Hawaii
Tax-Free Fund), Equity Fund, the Treasury Money Market Fund and the Money Market
Fund. Effective January 29, 1996, 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 June 30, 1996. This report pertains only to the
Treasury Money Market Fund, Money Market Fund and the Hawaii Municipal Bond
Fund. The Funds' prospectus provides a description of each Fund's investment
objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
================================================================================
The following is a summary of significant accounting policies followed by
the Trust.
SECURITY VALUATION -- Investment securities held by the Money Market and
Treasury Money Market Funds are stated at amortized cost, which approximates
market value. Under this valuation method, purchase discounts and premiums are
accreted and amortized ratably to maturity and are included in interest income.
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
<PAGE>
BISHOP STREET FUNDS
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.
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,
the Money Market Fund and the Treasury 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 $134,000 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.
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 Treasury Money Market Fund, 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 Treasury
Money Market Fund, the Money Market Fund and the Hawaii Municipal Bond Fund, in
order to limit the operating expenses of the Fund to 0.44%, 0.50% and 0.21%,
respectively.
Wellington Management Company (The "Sub-Adviser") serves as the investment
sub-adviser for the Money Market Fund and the Treasury 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 0.75%
of the average daily net assets of the Fund up to $500 million and 0.20% of the
average daily net assets of the Fund in excess of $500 million.
<PAGE>
JUNE 30, 1996 (Unaudited)
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 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 0.10% and 0.25% 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 June 30,
1996 are presented below for the Hawaii Municipal Bond Fund.
FUND INVESTMENT TRANSACTIONS
HAWAII MUNICIPAL BOND
FUND
=====================
Purchases
U.S. Government Securities $ --
Other 11,220,360
Sales
U.S. Government Securities $ --
Other 2,352,058
At June 30, 1996 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 June 30, 1996
for the Hawaii Municipal Bond Fund is as follows:
Gross Unrealized Appreciation $ 148,468
Gross Unrealized Depreciation (234,241)
---------
Net Unrealized Depreciation $ (85,773)
=========
<PAGE>
JUNE 30, 1996 (Unaudited)
6. CONCENTRATION OF CREDIT RISK (Unaudited)
================================================================================
The Hawaii Municipal Bond Fund invests primarily in debt instruments in
the state of Hawaii. The issuers' ability to meet their obligations may be
affected by economic developments in that state. At June 30, 1996, the
percentage of the Fund investments by each revenue source was as follows:
HAWAII MUNICIPAL BOND
FUND
=====================
Cash Equivalents 2.5%
Education Bonds 4.7%
General Obligation Bonds 22.5%
Hospital Bonds 17.1%
Housing Bonds 16.2%
Mortgage Revenue Bonds 1.1%
Transportation Bonds 21.8%
Utility Bonds 13.4%
Other Revenue Bonds 0.7%
-----
100.0%
======
The ratings of long-term debt holdings as a percentage of total value of
investments at June 30, 1996 are as follows:
HAWAII MUNICIPAL BOND
STANDARD & POOR'S RATING FUND
======================== =====================
AAA 56.9%
AA 18.7%
A 16.4%
A- 3.2%
Not Rated 4.8%
------
100.0%
======
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
