<PAGE>
BISHOP STREET FUNDS
SUPPLEMENT DATED APRIL 30, 1997 TO THE HIGH GRADE INCOME FUND, HAWAII MUNICIPAL
BOND FUND, EQUITY FUND, MONEY MARKET FUND AND TREASURY MONEY MARKET FUND
PROSPECTUS DATED APRIL 30, 1997.
This supplement provides different information from that contained in certain
portions of the Prospectus, and should be retained and read in conjunction with
such Prospectus.
THE FOLLOWING INFORMATION REPLACES THE FIRST THREE PARAGRAPHS ON PAGE 1 OF THE
PROSPECTUS.
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
BISHOP STREET MONEY MARKET FUND
BISHOP STREET TREASURY MONEY MARKET FUND
An investor may purchase either Retail Class B or Institutional Class A shares
of each Fund. Excluding the Money Market and Treasury Money Market Funds, 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. Retail Class B shares of the Money
Market and Treasury Money Market Funds and Institutional Class A shares of each
Fund are sold without a front-end sales load. First Hawaiian Bank, the Funds'
investment adviser, is an affiliate of First Hawaiian, Inc.
INSTITUTIONAL CLASS A SHARES OF THE FUNDS ARE OFFERED PRIMARILY TO AGENCY,
FIDUCIARY, CUSTODIAL AND ADVISORY CLIENTS OF FIRST HAWAIIAN BANK. RETAIL CLASS B
SHARES OF THE BISHOP STREET HIGH GRADE INCOME, HAWAII MUNICIPAL BOND AND EQUITY
FUNDS ARE OFFERED PRIMARILY TO INDIVIDUALS. RETAIL CLASS B SHARES OF THE BISHOP
STREET MONEY MARKET FUND AND THE BISHOP STREET TREASURY MONEY MARKET FUND ARE
OFFERED PRIMARILY TO INDIVIDUALS AND CASH SWEEP CUSTOMERS OF FIRST HAWAIIAN
BANK.
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH OF THE "SUMMARY" SECTION.
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 Funds.
THE FOLLOWING INFORMATION REPLACES THE SECOND SENTENCE OF "HOW DO I PURCHASE,
EXCHANGE OR REDEEM SHARES?" SECTION OF THE SUMMARY.
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.
<PAGE>
THE FOLLOWING INFORMATION REPLACES THE "EXPENSE SUMMARY" SECTION.
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% .33% .53%
Rule 12b-1 Fee(2)..................................................... .00% .00% .00%
Other Expenses (after expense reimbursements)(3)...................... .21% .47% .47%
- ----------------------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers and expense reimbursements)(4)................... .21% .80% 1.00%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) These amounts for the Hawaii Municipal Bond Fund have been restated to
reflect reductions in fee waiver and expense reimbursement arrangements
effective in the current fiscal year. As discussed below, the Adviser and
the Administrator have agreed to waive a portion of their fee, and reserve
the right to terminate their 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.
(2) The Distributor has agreed to waive its right to receive fees under the Rule
12b-1 Distribution Plan. Absent this waiver, the maximum Rule 12b-1 Fee
would be .25%.
(3) These amounts represent estimates for the current fiscal year for the High
Grade Income and Equity Funds. 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 of that Fund. Other
Expenses for the Hawaii Municipal Bond Fund have been restated to reflect
fees for the current fiscal year and, absent expense reimbursements, Other
Expenses for Hawaii Municipal Bond Fund would be .41%.
(4) These amounts for the Hawaii Municipal Bond Fund have been restated to
reflect reductions in fee waiver and expense reimbursement arrangements
effective in the current fiscal year. Absent the Adviser's and the
Administrator's fee waivers and expense reimbursements, total operating
expenses would be 1.26% for the Hawaii Municipal Bond Fund, 1.50% for the
High Grade Income Fund and 1.69% for the Equity Fund.
<TABLE>
<CAPTION>
EXAMPLE
- -------------------------------------------------------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 (2)
assessment of maximum sales charge, and (3) redemption at the end of each
time period:
Hawaii Municipal Bond Fund............................................... $ 37 $ 42 $ 46 $ 61
High Grade Income Fund................................................... 43 60 N/A N/A
Equity Fund.............................................................. 45 66 N/A N/A
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</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."
<PAGE>
<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% .33% .53%
Other Expenses (after expense reimbursements)(2)...................... .21% .47% .47%
- ----------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers and reimbursements)(3).... .21% .80% 1.00%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) These amounts for the Hawaii Municipal Bond Fund have been restated to
reflect reductions in fee waiver and expense reimbursement arrangements
effective in the current fiscal year. As discussed below, the Adviser and
the Administrator have agreed to waive a portion of their fee, and reserve
the right to terminate their 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.
(2) These amounts represent estimates for the current fiscal year for the High
Grade Income and Equity Funds. 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 of that Fund. Other
Expenses for the Hawaii Municipal Bond Fund have been restated to reflect
fees for the current fiscal year and, absent expense reimbursements, Other
Expenses for Hawaii Municipal Bond Fund would be .41%.
(3) These amounts for the Hawaii Municipal Bond Fund have been restated to
reflect reductions in fee waiver and expense reimbursement arrangements
effective in the current fiscal year. Absent the Adviser's and the
Administrator's fee waivers and expense reimbursements, total operating
expenses would be 1.01% for the Hawaii Municipal Bond Fund, 1.25% for the
High Grade Income Fund and 1.44% for the Equity Fund.
<TABLE>
<CAPTION>
EXAMPLE
- -------------------------------------------------------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
(2) assessment of maximum sales charge, and (3) redemption at the end of
each time period:
Hawaii Municipal Bond Fund............................................... $ 2 $ 7 $ 12 $ 27
High Grade Income Fund................................................... 8 26 N/A N/A
Equity Fund.............................................................. 10 32 N/A N/A
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</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 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>
<TABLE>
<CAPTION>
RETAIL CLASS B SHARES
--------------------------
TREASURY
MONEY MONEY
SHAREHOLDER TRANSACTION EXPENSES MARKET FUND MARKET FUND
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................................... None None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................................... None None
Maximum Contingent Deferred Sales Charge....................................... None None
Exchange Fee................................................................... None None
Wire Redemption Fee............................................................ $15 $15
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
- -----------------------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1)........................................... .16% .08%
Rule 12b-1 Fee(2).............................................................. .00% .00%
Other Expenses (after fee waivers)............................................. .34% .36%(3)
- -----------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers and expense reimbursements)(4)..... .50% .44%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) These numbers have been restated to reflect reductions in fee waiver
arrangements effective in the current fiscal year. The Adviser and the
Administrator have agreed to waive a portion of their fees. Absent fee
waivers, advisory fees would be .30% for each Fund. The Adviser and the
Administrator reserve the right to terminate the waiver at any time in their
sole discretion.
(2) The Distributor has agreed to waive its right to receive fees under the Rule
12b-1 Distribution Plan. Absent this waiver, the maximum Rule 12b-1 fee
would be .25%.
(3) Absent the Adviser's voluntary fee waivers, shareholder servicing fees would
be .25% for each Fund. This amount represents an estimate (after fee
waivers) for the current fiscal year.
(4) These numbers have been restated to reflect reductions in fee waiver
arrangements effective in the current fiscal year. Absent the Adviser's and
the Adminstrator's fee waivers, total operating expenses would be 1.12% for
the Money Market Fund and 1.14% for the Treasury Money Market Fund.
<TABLE>
<CAPTION>
EXAMPLE
- -------------------------------------------------------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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:...............................
Money Market Fund........................................................ $ 5 $ 16 $ 28 $ 63
Treasury Money Market Fund............................................... 5 14 N/A N/A
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</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>
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS A
SHARES
--------------------------
TREASURY
MONEY MONEY
SHAREHOLDER TRANSACTION EXPENSES MARKET FUND MARKET FUND
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Exchange Fee................................................................... None None
Wire Redemption Fee............................................................ None None
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
- -----------------------------------------------------------------------------------------------------------
Advisory Fees (after fee waivers)(1)........................................... .16% .08%
Other Expenses................................................................. .34% .36%(2)
- -----------------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee waivers)(3)................................ .50% .44%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) These numbers have been restated to reflect reductions in fee waiver
arrangements effective in the current fiscal year. The Adviser and the
Administrator have agreed to waive a portion of their fees. Absent fee
waivers, advisory fees would be .30% for the Fund. The Adviser and the
Administrator reserve the right to terminate the waiver at any time in their
sole discretion.
(2) These amounts represent estimates (after fee waivers) for the current fiscal
year.
(3) These numbers have been restated to reflect reductions in fee waiver
arrangements effective in the current fiscal year for the Money Market Fund.
Absent the Adviser's and the Adminstrator's fee waivers, total operating
expenses would be .87% for the Money Market Fund and .89% for the Treasury
Money Market Fund.
<TABLE>
<CAPTION>
EXAMPLE
- -------------------------------------------------------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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:
Money Market Fund........................................................ $ 5 $ 16 $ 28 $ 63
Treasury Money Market Fund............................................... 5 14 N/A N/A
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</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 shares
through First Hawaiian Bank agency, fiduciary, custodial or advisory account
will pay a separate fee for those services. See "Purchase of Shares."
<PAGE>
THE FOLLOWING INFORMATION REPLACES THE "FINANCIAL HIGHLIGHTS" SECTION.
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 18,
1997 on the Trust's financial statements as of December 31, 1996 incorporated by
reference 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 1996 Annual Report to Shareholders and is available without charge by
calling 1-800-262-9565. As of January 31, 1997, the Equity and High Grade Income
Funds had commenced operations and made Institutional Class A shares available
for purchase.
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
INVESTMENT ACTIVITIES
------------------------
NET
REALIZED
AND DISTRIBUTIONS NET
NET ASSET UNREALIZED ---------------------- ASSET
VALUE, NET GAIN (LOSS) NET VALUE,
BEGINNING INVESTMENT ON INVESTMENT CAPITAL END OF
OF PERIOD INCOME INVESTMENTS INCOME GAINS PERIOD TOTAL RETURN
--------- ---------- ----------- ----------- ------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
HAWAII MUNICIPAL BOND FUND
INSTITUTIONAL CLASS A
1996 10.47 0.55 (0.12 ) (0.55) (0.01) 10.34 4.21%
1995(1) 10.00 0.45 0.47 (0.45) -- 10.47 10.91%*
RETAIL CLASS B**
1996 10.47 0.55 (0.11 ) (0.55) (0.01) 10.35 4.31%(3)
1995(2) 10.00 0.45 0.47 (0.45) -- 10.47 10.85%*(3)
<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 INVESTMENT EXCLUDING FEE
END OF EXPENSES TO FEE WAIVERS INCOME TO WAIVERS AND PORTFOLIO
PERIOD AVERAGE NET AND REIM- AVERAGE NET REIM- TURNOVER
(000) ASSETS BURSEMENTS ASSETS BURSEMENTS RATE
------- ----------- ------------ ------------ ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
HAWAII MUNICIPAL BOND FUND
INSTITUTIONAL CLASS A
1996 $15,408 0.21% 0.85% 5.33% 4.68% 27%
1995(1) $ 9,411 0.27%* 1.10%* 5.24%* 4.40%* 68%
RETAIL CLASS B**
1996 $ 8,841 0.21% 1.05% 5.33% 4.48% 27%
1995(2) $ 6,702 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 February 15, 1995.
(2) Commenced operations on February 16, 1995.
(3) Total Return does not reflect applicable sales charges for the Hawaii
Municipal Bond Fund.
<PAGE>
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 18,
1997 on the Trust's financial statements as of December 31, 1996 incorporated by
reference 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 1996 Annual Report to Shareholders and is available without charge by
calling 1-800-262-9565.
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 TOTAL
OF PERIOD INCOME INVESTMENTS INCOME GAINS OF PERIOD RETURN
----------- ----------- ------------ ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
INSTITUTIONAL CLASS A
1996 1.00 0.05 -- (0.05) -- 1.00 5.12%
1995(1) 1.00 0.05 -- (0.05) -- 1.00 5.67%*
RETAIL CLASS B
1996 1.00 0.05 -- (0.05) -- 1.00 5.02%
1995(2) 1.00 0.05 -- (0.05) -- 1.00 5.55%*
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME TO
AVERAGE NET RATIO OF AVERAGE NET
NET ASSETS NET ASSETS
ASSETS, RATIO OF EXCLUDING INVESTMENT EXCLUDING
END OF EXPENSES FEE WAIVERS INCOME TO FEE WAIVERS PORTFOLIO
PERIOD TO AVERAGE AND REIM- AVERAGE NET AND REIM- TURNOVER
(000) NET ASSETS BURSEMENTS ASSETS BURSEMENTS RATE
---------- ---------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
INSTITUTIONAL CLASS A
1996 $ 274,125 0.49% 0.60% 5.01% 4.90% --
1995(1) $ 305,120 0.50%* 0.66%* 5.50%* 5.34%* --
RETAIL CLASS B
1996 $ 4,518 0.59% 0.76% 4.91% 4.74% --
1995(2) $ 3,658 0.60%* 0.76%* 5.26%* 5.10%* --
</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>
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 18,
1997 on the Trust's financial statements as of December 31, 1996 incorporated by
reference 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 1996 Annual Report to Shareholders and is available without charge by
calling 1-800-262-9565.
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 TOTAL
OF PERIOD INCOME INVESTMENTS INCOME GAINS OF PERIOD RETURN
----------- ----------- ------------ ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BISHOP STREET TREASURY MONEY
MARKET FUND
INSTITUTIONAL CLASS A (1)
1996 1.00 0.03 -- (0.03) -- 1.00 5.08%*
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
EXPENSES TO INCOME TO
AVERAGE NET RATIO OF AVERAGE NET
NET ASSETS NET ASSETS
ASSETS, RATIO OF EXCLUDING INVESTMENT EXCLUDING
END OF EXPENSES FEE WAIVERS INCOME TO FEE WAIVERS PORTFOLIO
PERIOD TO AVERAGE AND REIM- AVERAGE NET AND REIM- TURNOVER
(000) NET ASSETS BURSEMENTS ASSETS BURSEMENTS RATE
---------- ---------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
BISHOP STREET TREASURY MONEY
MARKET FUND
INSTITUTIONAL CLASS A (1)
1996 $ 180,201 0.42% 0.65% 4.96% 4.74% --
</TABLE>
Amounts Designated as "--" are either $0 or have been rounded to $0.
* Annualized
(1) The Fund commenced operations on May 1, 1996.
<PAGE>
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH OF "THE TRUST" SECTION.
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, 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, Equity Fund, Money Market Fund and
Treasury Money Market Fund (the "Funds").
THE FOLLOWING INFORMATION REPLACES "THE DISTRIBUTOR" SECTION.
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"), however, the Distributor
has agreed to waive its right to receive fees under the Retail Class B Plan.
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.
Each Fund has adopted a shareholder servicing plan for its Institutional Class A
and Retail Class B shares (the "Service Plan") under which a shareholder
servicing fee of up to .25% of average daily net assets attributable to the
shares of each class will be paid to the Distributor. Under the Service Plan,
the Distributor may perform, or may compensate other service providers for
performing, the following shareholder and administrative services: maintaining
client accounts; arranging for bank wires; responding to client inquiries
concerning services provided on investments; assisting clients in changing
dividend options, account designations and addresses; sub-accounting; providing
information on share positions to clients; forwarding shareholder communications
to clients; processing purchase, exchange and redemption orders; and processing
dividend payments. Under the Service Plan, the Distributor may retain as a
profit any difference between the fee it receives and the amount it pays to
third parties.
The Funds may execute brokerage or other agency transactions through the
Distributor, for which the Distributor receives compensation.
THE FOLLOWING INFORMATION REPLACES THE SECOND PARAGRAPH OF THE "HOW TO PURCHASE
SHARES"; "GENERAL INFORMATION" SECTION.
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., Eastern time for the High Grade Income, Hawaii Municipal Bond and
Equity Funds and before 1:00 p.m., Eastern time for the Money Market and
Treasury Money Market Funds. The purchase price (the "Offering Price") of Retail
Class B shares for the High Grade Income, Hawaii Municipal Bond and Equity Funds
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 for the High Grade Income, Hawaii Municipal Bond and Equity Funds is the
net asset value next determined after the purchase order is effective. The
purchase price of shares of the Money Market and Treasury Money Market Funds is
the net asset value determined after the purchase order is effective. Purchases
will be made in full and fractional shares calculated to three decimal places.
THE FOLLOWING INFORMATION SHOULD BE INSERTED AFTER THE EIGHTH PARAGRAPH OF THE
"HOW TO PURCHASE SHARES" -- "GENERAL" SECTION.
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.
<PAGE>
THE FOLLOWING INFORMATION REPLACES THE LAST PARAGRAPH OF THE "HOW TO PURCHASE
SHARES" -- "GENERAL" SECTION.
HOW TO PURCHASE RETAIL CLASS B SHARES
Retail Class B shares of the Funds (except the Treasury Money Market 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.
Retail Class B shares of the Treasury Money Market Fund are not yet available
for purchase by investors.
UNDER THE "HOW TO PURCHASE THROUGH AN AUTOMATIC INVESTMENT PLAN ("AIP"), DELETE
THE FOLLOWING LANGUAGE FROM THE THIRD SENTENCE:
"or, for Customers, your financial institution"
THE FOLLOWING INFORMATION SHOULD BE INSERTED AFTER THE "HOW TO PURCHASE SHARES"
SECTION.
SALES CHARGES
The following table shows the regular sales charge on Retail Class B shares of
the High Grade Income, Hawaii Municipal Bond and Equity Funds 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.
There are no sales charges applicable to shares of the Treasury Money Market and
Money Market Funds.
REDUCED SALES CHARGE:
RIGHTS OF ACCUMULATION
In calculating the sales charge rates applicable to current purchases of Retail
Class B shares of the High Grade Income, Hawaii Municipal Bond and Equity Funds,
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 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
<PAGE>
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 High Grade Income, Hawaii Municipal Bond
and Equity 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 High Grade Income, Hawaii Municipal
Bond and Equity 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 the High Grade Income, Hawaii
Municipal Bond and Equity Funds 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.
THE FOLLOWING INFORMATION REPLACES THE FIRST TWO PARAGRAPHS OF THE "EXCHANGE OF
SHARES" SECTION.
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
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. With respect to High Grade Income, Hawaii
Municipal Bond and Equity Fund shareholders, if an Exchange Request in good
order is received by the Transfer Agent by 4:00 p.m. Eastern time, on any
Business Day, the exchange will occur on that day. With respect to Money Market
and Treasury Money Market Fund shareholders, if an Exchange Request in good
order is received by the Transfer Agent on any Business Day, the exchange will
occur that day. The exchange privilege may be exercised only into a class of
shares that are currently offered for purchase to investors.
<PAGE>
THE FOLLOWING INFORMATION SHOULD BE INSERTED AT THE END OF THE "SYSTEMATIC
WITHDRAWAL PLAN ("SWP") SECTION.
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.
THE FOLLOWING INFORMATION REPLACES THE FOURTH PARAGRAPH OF THE "PERFORMANCE"
SECTION.
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.
THE FOLLOWING INFORMATION SHOULD BE INSERTED AFTER THE FIFTH PARAGRAPH OF THE
"PERFORMANCE" SECTION.
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)
charged to Retail Class B shares.
THE FOLLOWING INFORMATION REPLACES THE SECOND SENTENCE OF THE "GENERAL
INFORMATION; 'THE TRUST"' SECTION.
"The Declaration of Trust permits the Trust to offer separate portfolios of
shares and different classes of each portfolio."
THE FOLLOWING INFORMATION SHOULD BE INSERTED AFTER THE THIRD SENTENCE OF THE
"VOTING RIGHTS" SECTION.
"The Shareholders of each class of each Fund will vote separately on matters
pertaining to its distribution plan."
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
BISHOP STREET FUNDS
SUPPLEMENT DATED APRIL 30, 1997 TO THE HIGH GRADE INCOME FUND, HAWAII
MUNICIPAL BOND FUND, EQUITY FUND, MONEY MARKET FUND AND TREASURY MONEY MARKET
FUND STATEMENT OF ADDITIONAL INFORMATION DATED APRIL 30, 1997.
This supplement provides different information from that contained in
certain portions of the Statement of Additional Information, and should be
retained and read in conjunction with such Statement of Additional Information.
THE FOLLOWING INFORMATION REPLACES "THE TRUST" SECTION.
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 dividends and sales
loads. 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").
THE FOLLOWING INFORMATION REPLACES "THE DISTRIBUTOR" SECTION.
THE DISTRIBUTOR
SEI Financial Services Company (the "Distributor"), a wholly-owned
subsidiary of SEI, serves as a distributor. The Retail Class B shares of the
Trust have a Rule 12b-1 Distribution Plan (the "Retail Class B Plan"), however,
the Distributor has agreed to waive its right to receive fees under the Retail
Class B Plan. 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.
Each Fund has adopted a shareholder servicing plan for its Institutional
Class A and Retail Class B shares (the "Service Plan") under which a shareholder
servicing fee of up to .25% of average daily net assets attributable to shares
of each class will be paid to the Distributor. Under the Service Plan, the
Distributor may perform, or may compensate other service providers for
performing, the following shareholder and administrative services: maintaining
client accounts; arranging for bank wires; responding to client inquiries
concerning services provided on investments; assisting clients in changing
dividend options, account designations and addresses; sub-accounting; providing
information on share positions to clients; forwarding shareholder communications
to clients; processing purchase, exchange and redemption orders; and processing
dividend payments. Under the Service Plan, the Distributor may retain as profit
any difference between the fee it receives and the amount it pays to third
parties.
For the fiscal year ended December 31, 1995, the Hawaii Municipal Bond Fund
incurred no distribution fees and the Money Market Fund incurred $1,185 in
distribution fees.
As of the fiscal year ended December 31, 1995, the High Grade Income, Equity
and Treasury Money Market Funds had not commenced operations.
<PAGE>
For the fiscal year ended December 31, 1996, the Funds incurred the
following distribution expenses:
<TABLE>
<CAPTION>
AMOUNT PAID
TO 3RD PROSPECTUS
PARTIES PRINTING & COSTS
BY SFS FOR MAILING COSTS ASSOCIATED
DISTRIBUTOR (NEW WITH
RELATED SALES SHAREHOLDERS REGISTRATION
TOTAL SERVICES EXPENSES ADVERTISING ONLY) FEES
PORTFOLIO/CLASS ($ AMOUNT) ($ AMOUNT) ($ AMOUNT) ($ AMOUNT) ($ AMOUNT) ($ AMOUNT)
- ----------------------------------- ----------- ------------- --------------- --------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS A
Money Market Fund.................. $ 99,283 $ 0 $ 0 $ 0 $ 28,101 $ 71,182
Treasury Money Market Fund......... $ 76,065 $ 0 $ 0 $ 0 $ 13,672 $ 62,393
High Grade Income Fund............. * * * * * *
Hawaii Municipal Bond Fund......... $ 7,785 $ 0 $ 0 $ 0 $ 1,192 $ 6,593
Equity Fund........................ * * * * * *
RETAIL CLASS B
Money Market Fund.................. $ 4,620 $ 3,584 $ 0 $ 0 $ 312 $ 723
Treasury Money Market Fund......... * * * * * *
High Grade Income Fund............. * * * * * *
Hawaii Municipal Bond Fund......... $ 5,036 $ 0 $ 0 $ 0 $ 756 $ 4,280
Equity Fund........................ * * * * * *
</TABLE>
- ------------------------
* Not in operation during such period.
THE FOLLOWING INFORMATION REPLACES THE FOURTH AND FIFTH PARAGRAPHS OF THE
"PERFORMANCE"--"MONEY MARKET FUND YIELDS" SECTION.
For the seven-day period ended December 31, 1996, the seven-day yield and
seven-day effective yield for the Money Market Fund were 5.02% and 5.15%,
respectively, for the Institutional Class A shares, and 4.92% and 5.04%,
respectively, for the Retail Class B shares.
For the seven-day period ended December 31, 1996, the seven-day yield and
seven-day effective yield for the Treasury Money Market Fund were 5.03% and
5.15%, respectively, for the Institutional Class A shares. As of the fiscal year
ended December 31, 1996, the Retail Class B shares of the Treasury Money Market
Fund were not available for purchase by investors.
THE FOLLOWING INFORMATION REPLACES THE FOURTH PARAGRAPH OF THE
"PERFORMANCE"--"OTHER YIELDS" SECTION.
For the 30-day period ended December 31, 1996, the 30-day yield and 30-day
tax equivalent yield for the Hawaii Municipal Bond Fund were 5.31% and 7.70%,
respectively, for the Institutional Class A shares and 5.13% and 7.43%,
respectively, for the Retail Class B shares. As of the fiscal year ended
December 31, 1996, the High Grade Income and Equity Funds had not commenced
operations.
<PAGE>
THE FOLLOWING INFORMATION REPLACES THE SECOND PARAGRAPH AND THE CHART IN THE
"PERFORMANCE"--"TOTAL RETURN" SECTION.
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.
<TABLE>
<CAPTION>
CLASS/WITHOUT LOAD AVERAGE ANNUAL TOTAL
FUND WITH LOAD RETURN SINCE INCEPTION
- ------------------------------------ ------------------------------------ ---------------------------------------
<S> <C> <C>
Money Market Fund Institutional 5.38%
Money Market Fund Retail 5.27%
Treasury Money Market Fund Institutional 5.08%
Treasury Money Market Fund Retail N/A
Hawaii Municipal Bond Fund Institutional/without load 7.28%
Hawaii Municipal Bond Fund Retail/with load 7.31%
Hawaii Municipal Bond Fund Retail/without load 5.31%
</TABLE>
THE FOLLOWING INFORMATION REPLACES THE "DESCRIPTION OF SHARES" SECTION.
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.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
