BISHOP STREET FUNDS, 485APOS, 1998-02-26

BISHOP STREET FUNDS
485APOS, 1998-02-26

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 26, 1998

FILE NO. 33-80514
FILE NO. 811-8572
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-1A

REGISTRATION STATEMENT UNDER THE

SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 7 /X/
AND
REGISTRATION STATEMENT UNDER
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 8 /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 Investments Company
Oaks, Pennsylvania 19456
(Name and Address of Agent for Service)

COPIES TO:

<TABLE>
<S> <C>
Richard W. Grant, Esq. John H. Grady, Jr., Esq.
Morgan, Lewis & Bockius Morgan, Lewis & Bockius
LLP LLP
2000 One Logan Square 1800 M Street, N.W.
Philadelphia, Pennsylvania Washington, D.C. 20036
19103
</TABLE>

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

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

<TABLE>
<C> <S>
/ / immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/X/ on April 30, 1998 pursuant to paragraph (a) of
Rule 485
/ / 75 days after filing pursuant to paragraph (a)
</TABLE>

<TABLE>
<CAPTION>
<S> <C>
Title of Securities Being Registered...................................... Units of Beneficial Interest
</TABLE>

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- --------------------------------------------------------------------------------
<PAGE>

BISHOP STREET FUNDS
CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 7

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- --------------------------------------------------
<S> <C> <C>

PART A--

Item 1. Cover Page........................................ Cover Page
Item 2. Synopsis.......................................... Transaction and Operating Expenses; Questions &
Answers
Item 3. Condensed Financial Information................... Financial and Performance Highlights
Item 4. General Description of Registrant................. The Trust; General Information--The Trust; Fund
Investments & Practices; Investment Restrictions;
Glossary; Fund Summary; Fund Objective; Fund
Investments; Fund Risks; Risk Considerations
Item 5. Management of the Fund............................ General Information--Board of Trustees; General
Information--Investment Adviser; General
Information--Investment Sub-Adviser; General
Information--Portfolio Management; General
Information-- Distribution; General Information--
Administration; Back Cover; Transaction and
Operating Expenses
Item 5A. Management's Discussion of Fund Performance....... *
Item 6. Capital Stock and Other Securities................ General Information--Voting Rights; General
Information--Shareholder Inquiries; Tax
Information
Item 7. Purchase of Securities Being Offered.............. How to Purchase Shares; General
Information--Distribution; Transaction and
Operating Expenses
Item 8. Redemption or Repurchase.......................... How to Sell Your Shares; How to Exchange Your
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 Trust
Item 13. Investment Objectives and Policies................ Description of Permitted Investments; Investment
Limitations; Description of Shares ; Fund
Transactions; Appendix
Item 14. Management of the Registrant...................... Trustees and Officers of the Trust; The
Administrator; Limitations of Trustees' Liability
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- --------------------------------------------------
<S> <C> <C>
Item 15. Control Persons and Principal Holders of
Securities....................................... Trustees and Officers of the Trust; 5%
Shareholders
Item 16. Investment Advisory and Other Services............ The Adviser; The Sub-Adviser; The Administrator;
The Distributor; Back Cover (prospectus)
Item 17. Brokerage Allocation.............................. Fund Transactions
Item 18. Capital Stock and Other Securities................ Description of Shares; the Trust; Shareholder
Liability
Item 19. Purchase, Redemption, and Pricing of Securities
Being Offered.................................... Purchase and Redemption of Shares; Determination
of Net Asset Value
Item 20. Tax Status........................................ Taxes
Item 21. Underwriters...................................... The Distributor
Item 22. Calculation of Performance Data................... Performance
Item 23. Financial Statements.............................. Financial Information
</TABLE>

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

ii
<PAGE>
A NO-LOAD MUTUAL FUND FAMILY ADVISED BY FIRST HAWAIIAN BANK

BISHOP
-------
STREET
-------
FUNDS

PROSPECTUS
APRIL 30, 1998

EQUITY FUND
HAWAII MUNICIPAL BOND FUND
HIGH GRADE INCOME FUND
MONEY MARKET FUND
TREASURY MONEY MARKET FUND
<PAGE>
Bishop Street Funds (the Trust) is a mutual fund that offers shares in five
separate investment portfolios (each a Fund and together the Funds). This
Prospectus provides you with important information about the Funds that you
should know before investing. Please read this Prospectus carefully and keep it
for future reference.

THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED OF
THE TRUST'S SHARES. THE SEC HAS NOT REVIEWED OR APPROVED OF THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY STATEMENT OR REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

THE FUNDS:
- ARE NOT BANK DEPOSITS
- ARE NOT FEDERALLY INSURED
- ARE NOT GUARANTEED BY ANY BANK OR GOVERNMENT AGENCY
- ARE NOT GUARANTEED TO ACHIEVE THEIR GOALS

INVESTING IN THE FUNDS INVOLVES RISK. YOU MAY LOSE MONEY.

AN INVESTMENT IN A MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT A MONEY MARKET FUND WILL
BE ABLE TO MAINTAIN A CONSTANT VALUE OF $1.00 PER SHARE.

WHAT IS A PROSPECTUS?
A prospectus gives you information you need in order to make an informed
investment decision. It describes how each Fund operates and invests its assets,
and contains expense information.

To guide you through the Prospectus, you should look for:
- - FUND SUMMARY -- Provides basic information about a Fund.
- - FUND OBJECTIVE -- What is each Fund's goal? What makes one Fund different
from another Fund?
- - FUND INVESTMENTS -- How do we invest your money? How does the Fund
achieve its goal or objective?
- - FUND RISKS -- What are the key risks of investing in this Fund?

WHY DO WE USE ITALICIZED PRINT THROUGHOUT THE PROSPECTUS?
Throughout the Prospectus, you will see that we have italicized important terms
and words. To help you better understand the Bishop Street Funds and your
investment, we explain the meanings and importance of these terms and words in
the Glossary.

WHO ARE "WE"?
In this Prospectus, "We" generally means the Bishop Street Funds. "We" sometimes
refers to the Adviser or other companies hired by the Trust to perform services.

WHO ARE "YOU"?
In this Prospectus, "You" means the potential investor or shareholder.
<PAGE>
TABLE OF CONTENTS

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

<TABLE>
<S> <C>
The Trust........................................................ 4
Questions & Answers.............................................. 5
Fund Information
Equity Fund.................................................... 6
Hawaii Municipal Bond Fund..................................... 9
High Grade Income Fund......................................... 12
Money Market Fund.............................................. 15
Treasury Money Market Fund..................................... 18
Risk Considerations.............................................. 21
How to Purchase Shares........................................... 24
How to Sell Your Shares.......................................... 27
How to Exchange Your Shares...................................... 28
More Information About Doing Business With Us.................... 29
Dividends and Distributions...................................... 29
Tax Information.................................................. 30
General Information.............................................. 32
Fund Investments & Practices..................................... 36
Investment Restrictions.......................................... 39
Glossary......................................................... 40
</TABLE>

YOU SHOULD NOT INVEST IN THESE FUNDS IF:
- - you want FDIC insurance coverage or guaranteed rates of return;
- - you are unwilling to accept that you may lose money on your investment; or
- - you are unwilling to accept the risks of investing in the Funds.
<PAGE>
THE TRUST

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

Bishop Street Funds is an open-end management investment company, commonly known
as a mutual fund. The Funds provide a convenient and economical way for you to
invest in a number of professionally managed portfolios of securities. This
Prospectus offers shares of the Equity Fund, Hawaii Municipal Bond Fund, and
High Grade Income Fund, Money Market Fund and Treasury Money Market Fund.

4 Bishop Street Funds
<PAGE>
QUESTIONS & ANSWERS

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

Below are answers to common questions on investing in mutual funds. If you need
more information, please contact us at 1-800-262-9565.

WHO SHOULD INVEST IN MUTUAL FUNDS?
Mutual funds are appropriate for people who want a range of investment
opportunities, but don't have the time or expertise to manage their investments
themselves.

HOW SAFE IS MY INVESTMENT?
It's important to realize that your principal and rate of return are not insured
or guaranteed by the U.S. Government, unlike bank accounts and CDs. Like all
investments, mutual funds involve risk--including the risk of loss of
principal--in exchange for the opportunity for gain.

CAN I SELL MY FUND SHARES QUICKLY IF NEEDED?
Yes. You can sell (redeem) your shares on any business day at their current net
asset value. Of course, share prices will fluctuate, and Fund shares may be
worth more or less than the original purchase price when redeemed.

WHAT ARE THE COSTS ASSOCIATED WITH PURCHASING SHARES OF THE BISHOP STREET FUNDS?
The Bishop Street Funds are offered to the public "no-load." We do not charge a
sales commission when you invest in the Funds or redeem your shares. You'll find
more detailed information on Fund fees and expenses in the pages that follow.

WHAT ARE THE TAX CONSEQUENCES OF MUTUAL FUND INVESTING?
Generally speaking, dividend income from mutual funds is taxed at regular income
tax rates, while capital gains distributions (if any) are taxed at the capital
gains rate. Tax-exempt funds, a special kind of mutual fund, generate returns
that are exempt from federal and/or state income tax. Consult your tax advisor
for more information on the tax consequences of your mutual fund investment.

Bishop Street Funds 5
<PAGE>
EQUITY FUND

- -------------------------------------------
FUND SUMMARY
Main Objective: Long-term growth of capital
Secondary Objective: Current income
Investment Focus: Common stocks
Share Price Volatility: High
[LOGO]
- ---------------------------------------------------------------------
FUND OBJECTIVE
The Equity Fund seeks to produce long-term growth of capital, with a
secondary goal of current income.
[LOGO]
- ---------------------------------------------------------------------
FUND INVESTMENTS
The Equity Fund offers you the opportunity to realize long-term growth of
capital, combined with current income, by investing in a diversified
portfolio of EQUITY SECURITIES. It is designed for investors who are
willing to accept the risk of share price VOLATILITY in exchange for
long-term growth potential.
[LOGO]

The Equity Fund primarily invests in a diversified portfolio of EQUITY
SECURITIES traded in the U.S. that the Adviser believes have potential
for capital appreciation. Generally, the Fund invests in securities of
companies with market capitalizations in excess of $500 million. To some
extent, the Fund may invest in other securities and engage in other
investment practices. See "FUND INVESTMENTS & PRACTICES."
- ---------------------------------------------------------------------
FUND RISKS
The Equity Fund is subject to the following types of risks:
- Event Risk - Fund Risk - Market Risk
For a description of these risks, see "RISK CONSIDERATIONS."
[LOGO]

6 Bishop Street Funds
<PAGE>
- -------------------------------------------

TRANSACTION AND OPERATING EXPENSES
The purpose of the following table is to help you understand the various
costs and expenses that you, as a shareholder, will bear directly or
indirectly when you invest in shares of the Equity Fund.
[LOGO]

SHAREHOLDER TRANSACTION EXPENSES NONE

(FINANCIAL INTERMEDIARIES MAY IMPOSE ACCOUNT FEES OR OTHER CHARGES.)

<TABLE>
<S> <C>
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF NET ASSETS)
Investment Advisory Fees
After Fee Waivers(1) %
Other Expenses After Expense
Reimbursements(2) %
Total Operating Expenses
After Fee Waivers and
Reimbursements(3) %
</TABLE>

(1) ABSENT VOLUNTARY WAIVERS, INVESTMENT ADVISORY FEES WOULD BE .74%.
(2) ABSENT EXPENSE REIMBURSEMENTS, OTHER EXPENSES WOULD BE %.
(3) ABSENT THE WAIVERS AND REIMBURSEMENTS DESCRIBED ABOVE, TOTAL FUND
OPERATING EXPENSES WOULD BE %. THESE WAIVERS AND REIMBURSEMENTS
ARE VOLUNTARY AND MAY BE DISCONTINUED AT ANY TIME.

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
You would pay the
following expenses on a
$1,000 investment,
assuming:
(1) a 5% annual return;
and
(2) redemption at the end
of each time period. $ $ $ $
</TABLE>

YOU SHOULD NOT CONSIDER THE INFORMATION CONTAINED IN THIS TABLE AS AN
INDICATION OR REPRESENTATION OF THE FUND'S PAST OR FUTURE EXPENSES. THE
FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN ABOVE. If you
purchase shares through a FINANCIAL INTERMEDIARY, you may be charged
separate fees by the FINANCIAL INTERMEDIARY.

Bishop Street Funds 7
<PAGE>
EQUITY FUND

- -------------------------------------------
FINANCIAL AND PERFORMANCE HIGHLIGHTS
The table that follows presents information about the investment results
of the Equity Fund. The financial highlights for the Fund for the period
from inception through December 31, 1997 have been audited by
, independent public accountants, whose report appears in
our annual report and accompanies the Statement of Additional
Information. The annual report, which contains more information about the
Fund's performance, is available at no charge by calling us at
1-800-262-9565.
[LOGO]
For a Share Outstanding Throughout The Period Ended December 31,

<TABLE>
<CAPTION>
1997(1)
<S> <C>
Net Asset Value, Beginning of Period $
Net Investment Income (Loss) $
Realized and Unrealized Net Gain (Losses) on Investments $
Distributions from Net Investment Income $
Distributions from Realized Capital Gains (Losses) $
Net Asset Value, End of Period $
Total Return %*
Net Assets, End of Period (000) $
Ratio of Expenses to Average Net Assets %*
Ratio of Expenses to Average Net Assets (Excluding Waivers
and Reimbursements) %*
Ratio of Net Investment Income (Loss) to Average Net Assets %*
Ratio of Net Investment Income (Loss) to Average Net Assets
(Excluding Waivers and Reimbursements) %*
Portfolio Turnover Rate(2) %
Average Commission Rate** $
</TABLE>

(*) ANNUALIZED
(**) AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES
DURING THE PERIOD.
(1) COMMENCED OPERATIONS ON JANUARY 31, 1997.
(2) A PORTFOLIO TURNOVER RATE OF 100% OR MORE, IF CONTINUED, WILL LIKELY
RESULT IN TRANSACTION COSTS, HIGHER LEVELS OF REALIZED CAPITAL GAINS AND
ADDITIONAL TAXES THAN IF THE TURNOVER RATE WAS LOWER.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.

8 Bishop Street Funds
<PAGE>
HAWAII MUNICIPAL BOND FUND

- -------------------------------------------
FUND SUMMARY
Main objective: High double tax-exempt income
Credit Quality: Investment Grade
Investment Focus: Tax-exempt securities
Share Price Volatility: Moderate
[LOGO]
- ---------------------------------------------------------------------
FUND OBJECTIVE
The Hawaii Municipal Bond Fund seeks to provide current income that is
exempt from regular Federal and State of Hawaii income taxes.
[LOGO]
- ---------------------------------------------------------------------
FUND INVESTMENTS
The Hawaii Municipal Bond Fund can help you keep more of the income you
earn by investing in securities that pay income that is exempt from both
federal and Hawaii personal income taxes. It is designed for investors
who want tax-exempt income, and who are willing to accept some share
price VOLATILITY.
[LOGO]

The Hawaii Municipal Bond Fund primarily invests in INVESTMENT GRADE
SECURITIES that pay income exempt from regular federal income tax and
state of Hawaii income taxes, such as HAWAII MUNICIPAL SECURITIES and
DEBT OBLIGATIONS issued by Guam, Puerto Rico and the U.S. Virgin Islands.
There is no restriction upon the amount of the Fund's assets that may be
invested in obligations that pay income treated as a preference item for
purposes of the federal alternative minimum tax. To some extent, the Fund
also may invest in TAXABLE SECURITIES, and may engage in other investment
practices. See "FUND INVESTMENTS & PRACTICES."

The Fund is a non-diversified fund. This means that the Fund may invest
in securities of a smaller number of issuers (e.g. Hawaii issuers)
compared to a DIVERSIFIED FUND. As a result, the Fund may be more
susceptible than a DIVERSIFIED FUND to the risks associated with a
particular issuer. See "INVESTMENT RESTRICTIONS" and the Glossary for
more information.

There is no restriction on the Fund's AVERAGE WEIGHTED MATURITY or on the
maturity of any single security. The Adviser will use its judgment to
invest in securities with maturities that will provide a high level of
current income in light of current market conditions.

Bishop Street Funds 9
<PAGE>
HAWAII MUNICIPAL BOND FUND

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

FUND RISKS
The Hawaii Municipal Bond Fund is subject to the following types of
risks:
- Call Risk - Credit Risk - Event Risk - Fund Risk
- Geographic Risk - Interest Rate Risk - Market Risk
For a description of these risks, see "RISK CONSIDERATIONS."
[LOGO]
- ---------------------------------------------------------------------
TRANSACTION AND OPERATING EXPENSES
The purpose of the following table is to help you understand the various
costs and expenses that you, as a shareholder, will bear directly or
indirectly when you invest in shares of the Hawaii Municipal Bond Fund.
[LOGO]

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES NONE
(FINANCIAL INTERMEDIARIES MAY IMPOSE ACCOUNT FEES
OR OTHER CHARGES.)
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF NET
ASSETS)
Investment Advisory Fees After Fee Waivers(1) %
Other Expenses After Expense Reimbursements(2) %
Total Operating Expenses After Fee Waivers and
Reimbursements(3) %
</TABLE>

(1) ABSENT VOLUNTARY WAIVERS, INVESTMENT ADVISORY FEES WOULD BE .35%.
(2) ABSENT EXPENSE REIMBURSEMENTS, OTHER EXPENSES WOULD BE %.
(3) ABSENT THE WAIVERS AND REIMBURSEMENTS DESCRIBED ABOVE, TOTAL FUND
OPERATING EXPENSES WOULD BE %. THESE WAIVERS AND REIMBURSEMENTS
ARE VOLUNTARY AND MAY BE DISCONTINUED AT ANY TIME.

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
You would pay the
following expenses on a
$1,000 investment,
assuming:
(1) a 5% annual return;
and
(2) redemption at the end
of each time period. $ $ $ $
</TABLE>

10 Bishop Street Funds
<PAGE>

- -------------------------------------------
FINANCIAL AND PERFORMANCE HIGHLIGHTS
The table that follows presents information about the investment results
of the Hawaii Municipal Bond Fund. The financial highlights for the Fund
for the period from inception through December 31, 1996 have been audited
by Coopers & Lybrand L.L.P., independent public accountants, whose report
appears in our annual report and accompanies the Statement of Additional
Information. The annual report, which contains more information about the
Fund's performance, is available at no charge by calling us at
1-800-262-9565.
[LOGO]

For a Share Outstanding Throughout The Period Ended December 31,

<TABLE>
<CAPTION>
1997 1996 1995(1)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.47 10.00
Net Investment Income (Loss) $ 0.55 0.45
Net Realized and Unrealized Gain (Loss) on
Investments $ (0.12) 0.47
Distributions from Net Investment Income $ (0.55) (0.45)
Distributions from Realized Capital Gains
(Losses) $ (0.01) --
Net Asset Value, End of Period $ 10.34 10.47
Total Return** % 4.21 10.91*
Net Assets, End of Period (000) $ 15,408 9,411
Ratio of Expenses to Average Net Assets % 0.21 0.27*
Ratio of Expenses to Average Net Assets
(Excluding Waivers and Reimbursements) % 0.85 1.10*
Ratio of Net Investment Income (Loss) to
Average Net Assets % 5.33 5.24*
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers and
Reimbursements) % 4.68 4.40*
Portfolio Turnover Rate % 27 68
</TABLE>

(*) ANNUALIZED
(**) DOES NOT REFLECT THE SALES CHARGE.
(1) COMMENCED OPERATIONS ON FEBRUARY 15, 1995.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.

Bishop Street Funds 11
<PAGE>
HIGH GRADE INCOME FUND

- -------------------------------------------
FUND SUMMARY
Main Objective: High total return
Credit Quality: High (AA rating or better)
Investment Focus: Corporate and U.S. Government Obligations
Share Price Volatility: Moderate
[LOGO]
- ---------------------------------------------------------------------
FUND OBJECTIVE
The High Grade Income Fund seeks to provide high total return consistent
with prudent investment risk.
[LOGO]
- ---------------------------------------------------------------------
FUND INVESTMENTS
The High Grade Income Fund is designed for conservative investors who
want a higher level of income than most money market funds provide and
are willing to accept some share price VOLATILITY.
[LOGO]

The High Grade Income Fund primarily invests in high grade DEBT
OBLIGATIONS denominated in U.S. dollars and issued by domestic and
foreign corporations and governments. The Adviser considers high grade
DEBT OBLIGATIONS to be those that are rated in the two highest ratings
categories by either S&P, Moody's or other ratings agencies.

The Fund may invest in INVESTMENT GRADE OBLIGATIONS, SECURITIES OF
FOREIGN ISSUERS, MORTGAGE- and ASSET-BACKED SECURITIES, and VARIABLE AND
FLOATING RATE INSTRUMENTS. To some extent, the Fund may invest in other
securities and engage in other investment practices. See "FUND
INVESTMENTS & PRACTICES."

Under normal market conditions, the High Grade Income Fund's AVERAGE
WEIGHTED MATURITY will range from 5 to 12 years. The Fund's AVERAGE
WEIGHTED MATURITY will directly impact the Fund's exposure to interest
rate risk. The Fund's intermediate-term maturity should allow the Fund to
seek higher yields than shorter-term bond funds with less sensitivity to
changing interest rates than longer-term bond funds.

12 Bishop Street Funds
<PAGE>
- -------------------------------------------

FUND RISKS
The High Grade Income Fund may be subject to the following types of
risks:
- Call Risk - Credit Risk - Currency Risk - Event Risk
- Foreign Security Risks - Fund Risk - Prepayment Risk
- Interest Rate Risk - Market Risk
For a description of these risks, please see "RISK CONSIDERATIONS."
[LOGO]
- ---------------------------------------------------------------------
TRANSACTION AND OPERATING EXPENSES
The purpose of the following table is to help you understand the various
costs and expenses that you, as a shareholder, will bear directly or
indirectly when you invest in shares of the High Grade Income Fund.
[LOGO]

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES NONE
(FINANCIAL INTERMEDIARIES MAY
IMPOSE ACCOUNT FEES OR OTHER
CHARGES.)
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF NET ASSETS)
Investment Advisory Fees
After Fee Waivers(1) %
Other Expenses After Expense
Reimbursements(2) %
Total Operating Expenses
After Fee Waivers and
Reimbursements(3) %
</TABLE>

(1) ABSENT VOLUNTARY WAIVERS, INVESTMENT ADVISORY FEES WOULD BE .55%.
(2) ABSENT EXPENSE REIMBURSEMENTS, OTHER EXPENSES WOULD BE . %.
(3) ABSENT THE WAIVERS AND REIMBURSEMENTS DESCRIBED ABOVE, TOTAL FUND
OPERATING EXPENSES WOULD BE %. THESE WAIVERS AND REIMBURSEMENTS
ARE VOLUNTARY AND MAY BE DISCONTINUED AT ANY TIME.

Bishop Street Funds 13
<PAGE>
HIGH GRADE INCOME FUND

- -------------------------------------------
FINANCIAL AND PERFORMANCE HIGHLIGHTS
The table that follows presents information about the investment results
of the High Grade Income Fund. The financial highlights for the Fund for
the period from inception through December 31, 1997 have been audited by
, independent public accountants, whose report appears in our
annual report and accompanies the Statement of Additional Information.
The annual report, which contains more information about the Fund's
performance, is available at no charge by calling us at 1-800-262-9565.
[LOGO]

For a Share Outstanding Throughout The Period Ended December 31,

(*) ANNUALIZED
(1) COMMENCED OPERATIONS ON JANUARY 31, 1997.
(2) A PORTFOLIO TURNOVER RATE OF 100% OR MORE, IF CONTINUED, WILL LIKELY
RESULT IN HIGHER TRANSACTION COSTS, HIGHER LEVELS OF REALIZED CAPITAL
GAINS AND ADDITIONAL TAXES THAN IF THE TURNOVER RATE WAS LOWER.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.

14 Bishop Street Funds
<PAGE>
MONEY MARKET FUND

- -------------------------------------------
FUND SUMMARY
Main Objective: Maximum stability and liquidity
Credit Quality: High
Secondary Objective: Current income
Investment Focus: Short-term money market securities
Share Price Volatility: Very Low
[LOGO]
- ---------------------------------------------------------------------
FUND OBJECTIVE
The Money Market Fund seeks to preserve principal and maintain a high
degree of liquidity while providing current income.
[LOGO]
- ---------------------------------------------------------------------
FUND INVESTMENTS
The Money Market Fund is appropriate for conservative, income-oriented
investors who want a "parking place" for money earmarked for near-term
needs or awaiting investment, or who want market returns without taking
significant principal risk. The Money Market Fund invests in high quality
MONEY MARKET INSTRUMENTS denominated in U.S. dollars. The Money Market
Fund may enter into REPURCHASE AGREEMENTS, and may invest in YANKEE BONDS
and VARIABLE AND FLOATING RATE INSTRUMENTS. To some extent, the Fund may
invest in other securities and engage in other investment practices. See
"FUND INVESTMENTS & PRACTICES."
[LOGO]

The Money Market Fund complies with SEC rules which impose certain
quality, maturity and diversification requirements. The Fund's assets are
valued using the amortized cost method, which enables the Fund to
maintain a stable net asset value per share. All securities purchased by
the Fund must have remaining maturities of 397 calendar days or less.
Although the Fund is managed to maintain a stable price per share of
$1.00, there is no guarantee that the price will be constantly
maintained.
- ---------------------------------------------------------------------
FUND RISKS
The Money Market Fund may be subject to the following types of risks:
- Call Risk - Credit Risk - Event Risk - Fund Risk - Interest Rate
Risk - Market Risk
For a description of these risks, see "RISK CONSIDERATIONS."
[LOGO]

Bishop Street Funds 15
<PAGE>
MONEY MARKET FUND

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

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES NONE
(FINANCIAL INTERMEDIARIES MAY
IMPOSE ACCOUNT FEES OR OTHER
CHARGES.)
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
Investment Advisory Fees
After Fee Waivers(1) %
Other Expenses After Expense
Reimbursements(2) %
Total Operating Expenses
After Fee Waivers and
Reimbursements(3) %
</TABLE>

16 Bishop Street Funds
<PAGE>

- -------------------------------------------
FINANCIAL AND PERFORMANCE HIGHLIGHTS
The table that follows presents information about the investment results
of the Money Market Fund. The financial highlights for the Fund for the
period from inception through December 31, 1996 have been audited by
Coopers & Lybrand L.L.P., independent public accountants, whose report
appears in our annual report and accompanies the Statement of Additional
Information. The annual report, which contains more information about the
Fund's performance, is available at no charge by calling us
1-800-262-9565.
[LOGO]

For a Share Outstanding Throughout The Period Ended December 31,

<TABLE>
<CAPTION>
1997 1996 1995(1)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 1.00
Net Investment Income (Loss) $ 0.05 0.05
Net Realized and Unrealized Gain (Loss) on
Investments $ -- --
Distributions from Net Investment Income $ (0.05) (0.05)
Distributions from Realized Capital Gains
(Losses) $ -- --
Net Asset Value, End of Period $ 1.00 1.00
Total Return % 5.12 5.67*
Net Assets, End of Period (000) $ 274,125 305,120
Ratio of Expenses to Average Net Assets % 0.49 0.50*
Ratio of Expenses to Average Net Assets
(Excluding Waivers and Reimbursements) % 0.60 0.66*
Ratio of Net Investment Income (Loss) to
Average Net Assets % 5.01 5.50*
Ratio of Net Investment Income (Loss) to
Average Net Assets (Excluding Waivers and
Reimbursements) % 4.90 5.34*
</TABLE>

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

Bishop Street Funds 17
<PAGE>
TREASURY MONEY MARKET FUND

- -------------------------------------------
FUND SUMMARY
Main Objective: Maximum stability and liquidity
Investment Focus: U.S. Treasury Obligations
Secondary Objective: Current income
Credit Quality: High
Share Price Volatility: Very Low
[LOGO]
- ---------------------------------------------------------------------
FUND OBJECTIVE
The Treasury Money Market Fund seeks to preserve principal value and
maintain a high degree of liquidity while providing current income.
[LOGO]
- ---------------------------------------------------------------------
FUND INVESTMENTS
The Treasury Money Market Fund is appropriate for conservative, income-
oriented investors who want a "parking place" for money earmarked for
near-term needs or awaiting investment, or who want market returns
without taking significant principal risk. The Treasury Money Market Fund
invests exclusively in U.S. TREASURY OBLIGATIONS and REPURCHASE
AGREEMENTS involving U.S. TREASURY OBLIGATIONS. The Fund may engage in
certain investment practices. See "FUND INVESTMENTS & PRACTICES."
[LOGO]

The Treasury Money Market Fund complies with SEC rules which impose
certain quality, maturity and diversification requirements. The Fund's
assets are valued using the amortized cost method, which enables the Fund
to maintain a stable net asset value per share. All securities purchased
by the Fund must have remaining maturities of 397 calendar days or less.
Although the Fund is managed to maintain a stable price per share of
$1.00, there is no guarantee that the price will be constantly
maintained.
- ---------------------------------------------------------------------
FUND RISKS
The Treasury Money Market Fund may be subject to the following types of
risks:
- Fund Risk - Interest Rate Risk - Market Risk
For a description of these risks, see "RISK CONSIDERATIONS."
[LOGO]

18 Bishop Street Funds
<PAGE>
- -------------------------------------------

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES NONE
(FINANCIAL INTERMEDIARIES MAY
IMPOSE ACCOUNT FEES OR OTHER
CHARGES.)
ANNUAL FUND OPERATING EXPENSES (AS A
PERCENTAGE OF NET ASSETS)
Investment Advisory Fees
After Fee Waivers(1) %
Other Expenses After Expense
Reimbursements(2) %
Total Operating Expenses
After Fee Waivers and
Reimbursements(3) %
</TABLE>

(1) ABSENT VOLUNTARY WAIVERS, INVESTMENT ADVISORY FEES WOULD BE .30%.
(2) ABSENT EXPENSE REIMBURSEMENTS, OTHER EXPENSES WOULD BE %.
(3) ABSENT THE WAIVERS AND REIMBURSEMENTS DESCRIBED ABOVE, TOTAL FUND
OPERATING EXPENSES WOULD BE %. THESE WAIVERS AND REIMBURSEMENTS
ARE VOLUNTARY AND MAY BE DISCONTINUED AT ANY TIME.

Bishop Street Funds 19
<PAGE>
TREASURY MONEY MARKET FUND

- -------------------------------------------
FINANCIAL AND PERFORMANCE HIGHLIGHTS
The table that follows presents information about the investment results
of the Treasury Money Market Fund. The financial highlights for the Fund
for the period from inception through December 31, 1996 have been audited
by Coopers & Lybrand L.L.P., independent public accountants, whose report
appears in our annual report and accompanies the Statement of Additional
Information. The annual report, which contains more information about the
Fund's performance, is available at no charge by calling us at
1-800-262-9565.
[LOGO]

For a Share Outstanding Throughout The Period Ended December 31,

<TABLE>
<CAPTION>
1997 1996(1)
<S> <C> <C>
Net Asset Value, Beginning of Period $ 1.00
Net Investment Income (Loss) $ 0.03
Net Realized and Unrealized Gain (Loss) on
Investments $ --
Distributions from Net Investment Income $ (0.03)
Distributions from Realized Capital Gains (Losses) $ --
Net Asset Value, End of Period $ 1.00
Total Return % 5.08*
Net Assets, End of Period (000) $ 180,201
Ratio of Expenses to Average Net Assets % 0.42
Ratio of Expenses to Average Net Assets (Excluding
Waivers and Reimbursements) % 0.65
Ratio of Net Investment Income (Loss) to Average
Net Assets % 4.96
Ratio of Net Investment Income (Loss) to Average
Net Assets (Excluding Waivers and Reimbursements) % 4.74
</TABLE>

(*) ANNUALIZED
(1) COMMENCED OPERATIONS ON MAY 1, 1996.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
THERE CAN BE NO ASSURANCE THAT A FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. EACH FUND'S INVESTMENT OBJECTIVE IS FUNDAMENTAL AND MAY
NOT BE CHANGED WITHOUT SHAREHOLDER APPROVAL.

20 Bishop Street Funds
<PAGE>
RISK CONSIDERATIONS

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

<TABLE>
<CAPTION>
FUNDS SUBJECT TO
TYPE OF RISK THAT RISK
<S> <C>
CALL RISK -- The possibility that during Hawaii Municipal Bond
periods of falling interest rates, debt Fund
obligations with high interest rates will be High Grade Income Fund
prepaid (or "called") by the issuer prior to Money Market Fund
maturity. This may cause a Fund's AVERAGE
WEIGHTED MATURITY to fluctuate, and may
require a Fund to invest the resulting
proceeds elsewhere, at generally lower
interest rates.

CREDIT RISK -- The possibility that an issuer Hawaii Municipal Bond
will be unable to make timely payments of Fund
either principal or interest. High Grade Income Fund
Money Market Fund

CURRENCY RISK -- The possibility that changes High Grade Income Fund
in foreign exchange rates will affect,
favorably or unfavorably, the value of foreign
securities or the U.S. dollar amount of income
or gain received on such securities.

EVENT RISK -- The possibility that issuers of Equity Fund
securities may suffer substantial declines in Hawaii Municipal Bond
credit quality and market value due to Fund
corporate or governmental restructurings, such High Grade Income Fund
declines may impact the market value of their Money Market Fund
securities. While event risk may be high for
certain securities held by a Fund, Event Risk
is lessened by diversification of the Fund's
holdings.

FOREIGN SECURITY RISKS -- There are risks High Grade Income Fund
associated with investing in SECURITIES OF
FOREIGN ISSUERS, including:
CURRENCY FLUCTUATIONS -- Changes in foreign
exchange rates may affect, favorably or
unfavorably, the value of foreign securities
or the U.S. dollar amount of income or gain
received on such securities.
VOLATILITY -- Foreign markets can be more
volatile than in U.S. markets. Diplomatic,
political, or economic developments may
affect investments in foreign countries.
</TABLE>

Bishop Street Funds 21
<PAGE>
RISK CONSIDERATIONS

- -------------------------------------------
<TABLE>
<CAPTION>
FUNDS SUBJECT TO
TYPE OF RISK THAT RISK
<S> <C>
FOREIGN SECURITY RISKS (CONT')
FOREIGN TAXES -- Some foreign governments
levy withholding taxes against dividend and
interest income. Although in some countries
a portion of these taxes are recoverable,
the non-recovered portion will reduce the
income received from such securities.
REGULATORY ENVIRONMENT -- Foreign companies
generally are not subject to uniform
accounting, auditing, and financial
reporting standards comparable to those
applicable to U.S. companies. Foreign banks
and issuers and foreign branches of U.S.
banks may be subject to less stringent
reserve requirements and to different
accounting, auditing, reporting and record
keeping standards than those applicable to
U.S. banks and issuers and domestic branches
of U.S. banks. There is generally less
government regulation of securities
exchanges, brokers, and listed companies
abroad than in the U.S.

FUND RISK -- The possibility that a Fund's All Funds
performance during a specific period may not
meet, or exceed, that of its market benchmark.

GEOGRAPHIC RISK -- The risk that a Fund's Hawaii Municipal Bond
concentration of investments in securities of Fund
issuers located in a single state or
geographic region subject that Fund to
economic conditions and government policies of
that state or region that could adversely
affect the value of a Fund's investments.

INTEREST RATE RISK -- The potential for a Hawaii Municipal Bond
decline in the price of fixed-income Fund
securities due to rising interest rates. This High Grade Income Fund
risk is greater for long-term securities than Money Market Fund
short-term securities. Treasury Money
Market Fund
</TABLE>

22 Bishop Street Funds
<PAGE>
- -------------------------------------------
<TABLE>
<CAPTION>
FUNDS SUBJECT TO
TYPE OF RISK THAT RISK
<S> <C>
MARKET RISK -- The possibility that stock or All Funds
bond prices in general will decline over
short, or even extended, periods of time.
Markets tend to be cyclical, and consequently,
will experience periods when prices generally
rise and periods when prices generally
decline.

PREPAYMENT RISK -- The risk that High Grade Income Fund
MORTGAGE-BACKED and ASSET-BACKED SECURITIES
may be retired substantially earlier than
their stated maturities or final distribution
dates, resulting in a loss of all, or part, of
any premium paid. This may require a Fund to
reinvest the resulting proceeds elsewhere,
generally at lower interest rates. This also
may cause the Fund's AVERAGE WEIGHTED MATURITY
to fluctuate.
</TABLE>

Bishop Street Funds 23
<PAGE>
HOW TO PURCHASE SHARES

- -------------------------------------------
GENERAL INFORMATION
You may purchase shares of the Funds directly from us by mail or wire.
You also may purchase shares from a First Hawaiian Bank representative or
through FINANCIAL INTERMEDIARIES.

Fund shares are offered continuously and without a sales charge. The
price per share (the offering price) will be the net asset value per
share (NAV) next determined after we receive your purchase. You may
purchase a Fund's shares on any day that we calculate the Fund's NAV. We
calculate NAV on days that the New York Stock Exchange (NYSE) and the
Federal Reserve Wire System are both open for business (a Business Day).

The NAV of the Funds is calculated by:
(1) taking the current market value of a Fund's total assets;
(2) subtracting the Fund's liabilities; and
(3) dividing the result by the total number of shares owned by the Fund's
shareholders.

The Money Market and Treasury Money Market Funds are required to use the
amortized cost valuation method to determine the current market value of
their assets. The amortized cost method is described in detail in our
Statement of Additional Information. We expect the NAV for the Money
Market and Treasury Money Market Funds to remain constant at $1.00 per
share.

For the Money Market and Treasury Money Market Funds, we calculate NAV as
of 1:00 p.m., Eastern time, on each Business Day. For the Equity, High
Grade Income and Hawaii Municipal Bond Funds, we calculate NAV as of the
close of regular trading on the NYSE (normally, 4:00 p.m., Eastern time).
If we receive your order and payment before NAV is calculated, then your
purchase order will be effective that same Business Day. If we receive
your order and payment after NAV is calculated, your purchase order will
be effective the next Business Day.

PURCHASING DIRECTLY FROM THE TRANSFER AGENT
If you decide to buy shares directly, call us at 1-800-262-9565 to obtain
an Account Application, if you do not already have one. You should make
your check or money order payable in U.S. dollars to "Bishop Street
Funds" and include the name of the appropriate Fund on your check. WE
CANNOT ACCEPT THIRD PARTY CHECKS, CREDIT CARDS, CREDIT CARD CHECKS, OR
CASH.

24 Bishop Street Funds
<PAGE>
- -------------------------------------------

BY MAIL
You can mail your Account Application and check (or money order) to us
at:
Bishop Street Funds
c/o DST Systems, Inc.
P.O. Box 419721
Kansas City, Missouri 64141-6721

We will complete your purchase order when we receive your payment. PLEASE
NOTE THAT IF YOU PURCHASE SHARES WITH A CHECK AND THEN SELL THOSE SHARES
WITHIN A SHORT PERIOD OF TIME, WE MAY DELAY PAYMENT TO YOU UNTIL YOUR
CHECK CLEARS OR FOR UP TO 15 BUSINESS DAYS, WHICHEVER COMES FIRST. If
your check does not clear, your purchase will be canceled and you could
be liable for any costs incurred.

BY WIRE
You may purchase shares by wiring Federal Funds to us. Before you wire
funds, you must contact us and complete an Account Application. After you
have established an account, you may purchase shares by wire as long as
you first call us at 1-800-262-9565 and then include your account number
in the wire instructions. Fund shares cannot be purchased by wire on
Federal holidays that restrict wire transfers.

PURCHASING THROUGH A FINANCIAL INTERMEDIARY
Fund shares are sold without a sales charge. However, FINANCIAL
INTERMEDIARIES may charge fees for services provided in connection with
purchasing shares. FINANCIAL INTERMEDIARIES also may set an earlier time
for a purchase order to be effective on the same Business Day. This
allows the FINANCIAL INTERMEDIARY time to process and transmit your order
to us. For more information about how to purchase shares through a
FINANCIAL INTERMEDIARY, you should contact that FINANCIAL INTERMEDIARY
directly.

INITIAL PURCHASE
To purchase shares of any Fund for the first time, you must invest at
least $1,000 in any Fund. Officers, directors, and employees of First
Hawaiian Bank or its affiliates, and those investing in retirement plans
may buy shares with an initial purchase of $500 in any Fund. Officers,
directors and employees of First Hawaiian Bank or its affiliates who have
arranged to purchase shares through the Automatic Investment Plan (see
"Automatic Investment Plan" below) may buy shares with an initial
purchase of $100 in any Fund.

Bishop Street Funds 25
<PAGE>
HOW TO PURCHASE SHARES

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

ADDITIONAL PURCHASES
To purchase additional shares of any Fund, you must invest at least $100.
If you have arranged to purchase shares through the Automatic Investment
Plan (see below), then you must invest at least $50.

PURCHASING BY AUTOMATIC INVESTMENT PLAN (AIP)
You may purchase additional shares automatically through regular
deductions from your checking or savings account. After you have
established an account and have submitted the minimum initial investment
(see "Initial Purchase" above for those persons exempt from the minimum
initial investments), you may begin regularly scheduled investments of at
least $50 per month. You may select the AIP on your Application Form.
Please contact us at 1-800-262-9565 or your FINANCIAL INTERMEDIARY to
obtain an Account Application, if you do not already have one.

PURCHASES -- THE DISTRIBUTOR
We reserve the right to reject a purchase order for shares if we
determine that accepting the order would not be in the best interests of
the Trust or its shareholders. We may waive minimum initial and
additional purchase amounts at our discretion.

26 Bishop Street Funds
<PAGE>
HOW TO SELL YOUR SHARES

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

You may sell (also known as redeem) your shares on any Business Day by
contacting us by mail or telephone. If your request is for more than
$5,000 or if you are requesting that the proceeds from your redemption be
sent to an address or an account that is different from what we have on
our records, then we may require a written redemption request with a
signature guarantee (a notarized signature is not sufficient).

The redemption price of each share will be the next NAV determined after
we receive your redemption request. In other words, we must receive
redemption requests for a Fund by the time the Fund's NAV is calculated
to get that Business Day's NAV.

If you purchased your shares through a FINANCIAL INTERMEDIARY rather than
directly from us, you should contact your FINANCIAL INTERMEDIARY for
instructions on how to redeem shares. You may have to transmit your
redemption request to the FINANCIAL INTERMEDIARY at an earlier time in
order for your redemption to be effective that Business Day.

RECEIVING YOUR MONEY
Your redemption proceeds normally will be sent within 7 Business Days
after we receive your request. Your proceeds can be sent to you by check
or, if your redemption proceeds are in excess of $500, wired to your bank
account for a $15 fee. We reserve the right to waive the $15 wire fee at
our discretion. IF YOU RECENTLY PURCHASED YOUR SHARES BY CHECK OR THROUGH
AN AIP, THEN YOUR PROCEEDS MAY NOT BE AVAILABLE UNTIL YOUR CHECK HAS
CLEARED (WHICH MAY TAKE UP TO 15 BUSINESS DAYS).

REDEMPTIONS IN KIND
We intend to pay your redemption proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection
of the remaining shareholders of the Fund) we reserve the right to pay
all or part of your redemption proceeds in liquid securities that have a
market value equal to the redemption price (a "redemption in kind").
Although it is highly unlikely that your shares would ever actually be
redeemed in kind, if it did happen, you would probably have to pay the
brokerage costs to sell the securities distributed to you, as well as
taxes on any capital gains.

SYSTEMATIC WITHDRAWAL PLAN (SWP)
Under the Systematic Withdrawal Plan (SWP), you may arrange monthly,
quarterly, semi-annual, or annual automatic withdrawals of $50 or more

Bishop Street Funds 27
<PAGE>
HOW TO SELL YOUR SHARES

- -------------------------------------------
from any Fund. The proceeds can be mailed to you or electronically
transferred to your bank account. If you automatically reinvest your
dividends (see "DIVIDENDS AND DISTRIBUTIONS" below) and have an account:

- in the Equity, High Grade Income and Hawaii Municipal Bond Funds that
is worth, in the aggregate, at least $10,000;
or

- in the Money Market and Treasury Money Market Funds that is worth, in
the aggregate, at least $20,000;

then you may use the SWP.

You may change or cancel your SWP at any time by giving us written
notice. We may require a signature guarantee on the written notice. You
may select the SWP on your Application Form. If you need an Application
Form, please call us at 1-800-262-9565.

INVOLUNTARY REDEMPTIONS
If your account balance drops below the required minimum initial purchase
amount due to redemptions, including redemptions through the SWP, from
your account, you may be required to redeem your remaining shares. You
will always be given at least 60 days' written notice to give you time to
add to your account and avoid the involuntary redemption.

HOW TO EXCHANGE YOUR SHARES
- -------------------------------------------

You may exchange shares of any Fund for shares of any other Fund. You can
request an exchange by mail, or by telephone if you elected the telephone
exchange option on your Account Application. If you purchased Fund shares
through a FINANCIAL INTERMEDIARY, you should contact your FINANCIAL
INTERMEDIARY to exchange your shares.

28 Bishop Street Funds
<PAGE>
MORE INFORMATION ABOUT DOING
BUSINESS WITH US

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

SHARE TRANSACTIONS OVER THE TELEPHONE
Telephone redemption and exchange transactions are extremely convenient,
but not without risk. To try to keep your telephone transactions as safe,
secure, and risk-free as possible, we have developed certain safeguards
and procedures for determining the identity of callers and authenticity
of instructions. However, we will not be responsible for any loss,
liability, cost, or expense for following telephone or wire instructions
they reasonably believed to be genuine. If you or your FINANCIAL
INTERMEDIARY choose to make telephone transactions, you will generally
bear the risk of any loss.

FINANCIAL INTERMEDIARIES -- TRANSFERRING RECORD OWNERSHIP OF YOUR
SHARES
If you own shares through a FINANCIAL INTERMEDIARY and want to transfer
the registration to another FINANCIAL INTERMEDIARY or become the record
owner of your shares, then you should contact your FINANCIAL INTERMEDIARY
for instructions to make this change. If you are the record owner of your
shares and you wish to transfer the registration to a FINANCIAL
INTERMEDIARY, then please contact us at 1-800-262-9565 for instructions.

DIVIDENDS AND DISTRIBUTIONS
- -------------------------------------------

Income dividends are declared daily and paid monthly by each of the Funds
except for the Equity Fund. The Equity Fund declares and pays dividends
quarterly. If you own shares on a Fund's record date, you will be
entitled to receive dividends from that Fund. The Funds make
distributions of capital gains at least annually.

You will receive dividends and distributions in the form of additional
shares unless you elect to receive payment in cash. To elect a cash
payment, you must notify us in writing at least 15 days prior to the date
of distribution. Your election will become effective for dividends paid
after we receive your written notice. To cancel your election, simply
send us written notice.

Bishop Street Funds 29
<PAGE>
TAX INFORMATION

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

The following is a summary of some important tax issues that affect the
Funds and their shareholders. The summary is based on current tax laws,
which may be changed by legislative, judicial, or administrative action.
We have not tried to present a detailed explanation of the tax treatment
of the Funds or their shareholders. More information about taxes is in
our Statement of Additional Information. We urge you to consult your tax
advisor regarding specific questions as to Federal, state, and local
income taxes.

TAX STATUS OF EACH FUND
Each Fund is treated as a separate entity for Federal income tax purposes
and intends to qualify for the special tax treatment afforded to
regulated investment companies. As long as a Fund qualifies as a
regulated investment company, it pays no Federal income tax on the
earnings it distributes to its shareholders.

TAX STATUS OF DISTRIBUTIONS
Each Fund will distribute substantially all of its income and capital
gains. The income dividends you receive from the Funds will be taxed as
ordinary income whether you receive the dividends in cash or additional
shares. Capital gains dividends will be treated as gain from the sale or
exchange of a capital asset held for more than one year, which may be
taxed at different rates depending upon the length of time the Funds held
the security.

Corporate shareholders in the Equity Fund may be entitled to a dividends-
received deduction for the portion of dividends they receive which are
attributable to dividends received by a Fund from U.S. corporations.

Distributions paid in January but declared as dividends by a Fund in
October, November, or December of the previous year, may be taxable to
you in the previous year.

TAX STATUS OF SHARE TRANSACTIONS
Each sale, redemption, or exchange of Fund shares is a taxable event to
you.

30 Bishop Street Funds
<PAGE>
- -------------------------------------------

TAX-EXEMPT DISTRIBUTIONS
The Hawaii Municipal Bond Fund may pay "exempt interest" dividends. These
dividends are excludable from your gross income for Federal income tax
purposes, but may have other Federal income tax consequences (i.e.,
alternative minimum tax). Current Federal tax laws limit the types and
number of debt obligations that pay exempt interest. This may hinder the
Fund's ability to pay exempt interest dividends.

STATE TAX CONSIDERATIONS
A Fund is not liable for any income or franchise tax in Massachusetts as
long as it qualifies as a regulated investment company for Federal income
tax purposes.

Distributions by the Funds to you may be subject to state and local
taxation. However, a portion of the distributions you receive
attributable to interest on U.S. Government obligations may be exempt
from state taxation. In addition, a portion of the distributions you
receive attributable to interest on a state's municipal obligations may
be exempt from taxation in that state. For example, interest on certain
securities is exempt from Hawaii state income taxation. The portion of
distributions you receive from the Hawaii Municipal Bond Fund
attributable to such interest is not included in your Hawaii state
taxable income. Each year we will notify you of the percentage of income
and distributions that may be tax exempt under state law. You should
verify your tax liability with your tax advisor.

Bishop Street Funds 31
<PAGE>
GENERAL INFORMATION

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

THE TRUST
The Trust is organized as a Massachusetts business trust and permitted to
offer separate portfolios of shares. All payments received by the Trust
for shares of any Fund belong to that Fund. Each Fund has its own assets
and liabilities.

BOARD OF TRUSTEES
The Board of Trustees supervises the management and affairs of the Trust.
The Trustees have approved contracts with certain companies that provide
us with essential management services.

VOTING RIGHTS
We offer units of beneficial interest (shares) in the Funds. Each share
represents an undivided, proportional interest in a Fund. Shareholders of
record receive one vote for every full Fund share owned. Each Fund will
vote separately on matters relating solely that Fund. If you are a
customer of a financial intermediary that has purchased shares of a Fund
for your account, you may, depending on the nature of your account, have
certain voting rights.

As a Massachusetts business trust, the we are not required to hold annual
shareholder meetings unless otherwise required by the Investment Company
Act. However, a meeting may be called by shareholders owning at least 10%
of the outstanding shares of the Trust. If a meeting is requested by
shareholders, we will provide appropriate assistance and information to
the shareholders who requested the meeting.

REPORTING
If you purchased shares directly from us, you will receive our unaudited
financial information and audited financial statements, proxy statements,
and other reports. If you purchased shares of a Fund through a FINANCIAL
INTERMEDIARY, you may, depending on the nature of your account, receive
all or a portion of this information directly from your FINANCIAL
INTERMEDIARY.

SHAREHOLDER INQUIRIES
You may contact us at 1-800-262-9565 or your FINANCIAL INTERMEDIARY to
obtain information on account statements, procedures, and other related
information.

32 Bishop Street Funds
<PAGE>
- -------------------------------------------

INVESTMENT ADVISER
First Hawaiian Bank (the Adviser), whose principal business address is
999 Bishop Street, Honolulu, Hawaii 96813, is the Adviser to the Funds.
The Adviser is a wholly-owned subsidiary of First Hawaiian, Inc. The
Adviser and its corporate predecessors have provided trust and asset
management services in Hawaii for over 70 years. As of December 31, 1997,
the Adviser's Trust and Investments Division had approximately $9.2
billion in assets under management. The Adviser is entitled to a fee,
computed daily and paid monthly at an annual rate as follows:

<TABLE>
<CAPTION>
FUND % OF AVERAGE DAILY NET ASSETS
- ----------------------------------------- -------------------------------
<S> <C>
Equity Fund .74%
Hawaii Municipal Bond Fund .35%
High Grade Income Fund .55%
Money Market Fund .30%
Treasury Money Market Fund .30%
</TABLE>

For the fiscal year ended December 31, 1997, the Adviser received
advisory fees computed daily and paid monthly at an annual rate as
follows:

<TABLE>
<CAPTION>
FUND % OF AVERAGE DAILY NET ASSETS
- ----------------------------------------- -------------------------------
<S> <C>
Equity Fund [ %]
Hawaii Municipal Bond Fund [ %]
High Grade Income Fund [ %]
Money Market Fund [ %]
Treasury Money Market Fund [ %]
</TABLE>

The Adviser may voluntarily waive all or a portion of its fees to limit
Total Fund Operating Expenses.

Bishop Street Funds 33
<PAGE>
GENERAL INFORMATION

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

INVESTMENT SUB-ADVISER
Wellington Management Company, LLP (the Sub-Adviser), whose principal
business address is 75 State Street, Boston, Massachusetts 02109, is the
Sub-Adviser to the Money Market and Treasury Money Market Funds. The
Sub-Adviser is a professional investment counseling firm. The Sub-Adviser
and its predecessor organizations have provided advisory services to
investment companies since 1928. As of December 31, 1997, the Sub-Adviser
had approximately $175 billion in assets under management. For its
advisory services, the Sub-Adviser is entitled to a fee computed daily
and paid monthly at the annual rate of .075% of the aggregate daily net
assets of the Money Market and Treasury Money Market Funds up to $500
million, and .020% in excess of $500 million.

PORTFOLIO MANAGEMENT
The Adviser makes investment decisions for each Fund and continuously
reviews, supervises, and administers each Fund's investment program. The
Board of Trustees supervises the Adviser and establishes the policies
that the Adviser must follow in its day-to-day management activities.

The Sub-Adviser manages the Money Market Funds on a day-to-day basis. The
Sub-Adviser selects, buys, and sells securities for the Money Market and
Treasury Money Market Funds under the supervision of the Adviser and the
Board of Trustees.

The Equity and High Grade Income Funds are managed by a team of
investment professionals from First Hawaiian Bank. No one person is
primarily responsible for making investment recommendations to the team.

Louis M. Levitas has managed the Hawaii Municipal Bond Fund for the
Adviser since its inception. In December 1996, he became an employee of
Pacific One Dealer Center, and has continued his work for the Adviser
pursuant to an agreement between Pacific One Dealer Center and the
Adviser. Mr. Levitas has been a municipal bond specialist since 1970.

34 Bishop Street Funds
<PAGE>
- -------------------------------------------

DISTRIBUTION
SEI Investments Distribution Co. (the Distributor), a wholly-owned
subsidiary of SEI Investments Company, serves as each Fund's distributor
under a distribution agreement. Under the Trust's shareholder servicing
plan, the Distributor receives a fee of up to .25% of the average daily
net assets of each Fund. The service fee may be used for personal service
and maintenance of shareholder accounts. The Distributor may keep any
profits from this servicing arrangement.

Each Fund may use the Distributor as its broker for portfolio
transactions. The Distributor receives compensation from the Funds for
its brokerage services.

ADMINISTRATION
SEI Fund Resources (the Administrator) acts as the Funds' administrator.
For its administrative services, 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
voluntarily waive all or a portion of its fees to limit Total Fund
Operating Expenses.

Bishop Street Funds 35
<PAGE>
FUND INVESTMENTS & PRACTICES

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

LEGEND

<TABLE>
<S> <C> <C>
% - Maximum percentage permissible. All percentages shown are
of total assets unless otherwise noted.
X - No policy limitation; Fund may be currently using.
* - Permitted, but not typically used.
- -- - Not permitted.
</TABLE>

- ---------------------------------------------------------------------
MONEY MARKET FUNDS

<TABLE>
<CAPTION>
TREASURY
MONEY MONEY
MARKET MARKET
FUND FUND
<S> <C> <C>
TRADITIONAL INVESTMENTS
Bank Obligations X --
Commercial Paper X(1) --
Municipal Securities X(2) --
Repurchase Agreements X X(3)
U.S. Government Agency and Treasury
Obligations X X(4)
Zero Coupon Obligations X --
Variable & Floating Rate Instruments X --
Yankee Bonds X --
INVESTMENT PRACTICES
Borrowing 33 1/3% 33 1/3%
Illiquid Securities 10%(5) 10%(5)
Securities Lending 50% 50%
Standby Commitments 33 1/3% 33 1/3%
When-Issued Securities 33 1/3% 33 1/3%
</TABLE>

(1) MUST BE RATED IN THE HIGHEST RATINGS CATEGORY OR UNRATED EQUIVALENT.
(2) MUST BE RATED IN THE TWO HIGHEST RATINGS CATEGORIES OR UNRATED EQUIVALENT.
(3) MAY INVEST IN REPURCHASE AGREEMENTS INVOLVING U. S. TREASURY OBLIGATIONS
ONLY.
(4) MAY INVEST IN U.S. TREASURY OBLIGATIONS ONLY.
(5) PERCENTAGE BASED ON NET ASSETS, NOT TOTAL ASSETS.

36 Bishop Street Funds
<PAGE>
- -------------------------------------------

NON-MONEY MARKET FUNDS

<TABLE>
<CAPTION>
HIGH
HAWAII GRADE
EQUITY MUNICIPAL INCOME
FUND BOND FUND FUND
<S> <C> <C> <C>
TRADITIONAL INVESTMENTS
ADRs 35% -- X
Asset-Backed Securities -- -- 35%(7)
Bank Obligations -- -- 35%(1)
Commercial Paper -- -- 35%(1)
Convertible Debt Obligations 35% -- --
Corporate Debt Obligations -- 20%(3) X(1,2)
Equity Securities X -- --
Investment Company Shares 10% 10% 10%
Mortgage-Backed Securities -- -- 35%(4)
Municipal Securities -- X(5) --
Repurchase Agreements 35% 20%(3) 35%
Restricted Securities 15% 15% 15%
Securities of Foreign Issuers * -- X(1)
Supranational Agency Obligations -- -- 35%
U.S. Government Agency and
Treasury Obligations -- 20%(3) X(6)
Variable & Floating Rate
Instruments -- X X
Zero Coupon Obligations -- X X
INVESTMENT PRACTICES
Borrowing 33 1/3% 33 1/3% 33 1/3%
Illiquid Securities 15%(3) 15%(3) 15%(3)
Securities Lending 50% 50% 50%
Standby Commitments 33 1/3% 33 1/3% 33 1/3%
When-Issued Securities 33 1/3% 33 1/3% 33 1/3%
</TABLE>

(1) MUST BE RATED IN THE TWO HIGHEST RATINGS CATEGORIES BY S&P OR MOODY'S, OR
UNRATED EQUIVALENTS.
(2) MAY INVEST UP TO 5% IN SECURITIES RATED BBB BY S&P OR Baa BY MOODY'S, OR
UNRATED EQUIVALENTS.
(3) PERCENTAGE IS BASED ON NET ASSETS, NOT TOTAL ASSETS.
(4) INCLUDES PRIVATELY ISSUED MORTGAGE-BACKED SECURITIES RATED A OR HIGHER BY
S&P OR MOODY'S, OR UNRATED EQUIVALENTS.
(5) WILL INVEST AT LEAST 65% OF ITS ASSETS IN MUNICIPAL SECURITIES ISSUED BY
THE STATE OF HAWAII. WILL INVEST AT LEAST 80% OF ITS NET ASSETS IN
INVESTMENT GRADE MUNICIPAL SECURITIES THAT PAY INCOME EXEMPT FROM REGULAR
FEDERAL INCOME TAX.
(6) MAY INVEST IN U.S. TREASURY RECEIPTS.
(7) MUST BE RATED IN THE THREE HIGHEST RATINGS CATEGORIES BY S&P OR MOODY'S,
OR UNRATED EQUIVALENTS.

Bishop Street Funds 37
<PAGE>
FUND INVESTMENTS & PRACTICES

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

Under normal market conditions, the Funds will follow the practices and
policies outlined above. However, for temporary defensive purposes during
periods when the Adviser determines that market conditions warrant, the
Non-Money Market Funds may invest up to 100% of each Fund's assets in
taxable money market instruments, repurchase agreements and short-term
obligations. In addition, each Fund may hold a portion of its assets in
cash. When a Fund invests for temporary defensive purposes, it will not
be pursuing its respective investment objective.

38 Bishop Street Funds
<PAGE>
INVESTMENT RESTRICTIONS

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

CONCENTRATION
The Equity and High Grade Income Funds may not invest more than 25% of each
Fund's assets in any one industry. The Hawaii Municipal Bond Fund has no such
restriction on concentration, but it will not invest more than 25% of its assets
in securities of non-governmental entities that are in the same industry. The
Money Market and Treasury Money Market Funds may not invest more than 25% of
each Fund's assets in any one industry, but may do so with respect to U.S.
Government obligations and U.S. bank obligations.

DIVERSIFICATION
Except for the Hawaii Municipal Bond Fund, each Fund is a diversified fund. For
the Equity and High Grade Income Funds, this means that the Funds may not, with
respect to 75% of each Fund's assets:

- - invest more than 5% of its assets in the securities of any one issuer; and

- - purchase more than 10% of the outstanding voting securities of any one issuer.

The Hawaii Municipal Bond Fund complies with the diversification requirements
under the Internal Revenue Code.

For the Money Market Funds, which comply with more stringent diversification
requirements under SEC rules, this means that each Fund may generally not invest
more than 5% of its assets in the securities of any one issuer (excluding U.S.
Government issuers).

These investment restrictions are fundamental and may not be changed without
shareholder approval. The Funds have other fundamental investment restrictions,
which are described in our Statement of Additional Information.

Bishop Street Funds 39
<PAGE>
GLOSSARY

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

This Glossary includes descriptions of each italicized term in this Prospectus,
as well as some of the permitted investments for the Funds. Our Statement of
Additional Information has further discussion of these investments.

AMERICAN DEPOSITARY RECEIPTS (ADRs) are securities typically issued by a U.S.
financial institutions (depositaries). ADRs represent ownership interests in a
security, or a pool of securities, issued by a foreign issuer and deposited with
the depositary. ADRs may be available through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of the
security underlying the receipt and a depositary. An unsponsored facility may be
established by a depositary without the participation of the issuer of the
underlying security.

ASSET-BACKED SECURITIES are securities backed by non-mortgage assets such as
company receivables, truck and auto loans, leases, and credit card receivables.
These securities are generally issued as pass-through certificates, which
represent undivided fractional ownership interests in the underlying pools of
assets. Asset-backed securities may also be debt obligations, which are also
known as collateralized obligations and are generally issued as the debt of a
special purpose entity, such as a trust, organized solely for the purpose of
owning these assets and issuing DEBT OBLIGATIONS.

AVERAGE WEIGHTED MATURITY is calculated by first multiplying the dollar value of
each investment of a Fund by the number of days remaining to its maturity, then
adding those figures together and dividing that total by the dollar value of the
Fund's portfolio investments.

BANK OBLIGATIONS are SHORT-TERM OBLIGATIONS issued by U.S. and foreign banks,
including bankers' acceptances, certificates of deposit, custodial receipts, and
time deposits.

COMMERCIAL PAPER is a term used to describe unsecured short-term promissory
notes issued by municipalities, corporations, and other entities that have
maturities generally from a few days to nine months.

COMMON AND PREFERRED STOCKS represent units of ownership in a corporation.
Owners of common stocks typically are entitled to vote on important matters.
Owners of preferred stock ordinarily do not have voting rights, but are entitled
to dividends at a specified rate. Preferred stockholders have a prior claim to
common stockholders with respect to dividends.

CONCENTRATION relates to the amount of a mutual fund's assets that are invested
in securities of issuers engaged in the same or similar industries.

40 Bishop Street Funds
<PAGE>
- -------------------------------------------

CONVERTIBLE SECURITIES are securities, either DEBT OBLIGATIONS or preferred
stocks, issued by corporations that are exchangeable for a set number of another
security at a prestated price. The market value of a convertible security is
also affected by prevailing interest rates, the credit quality of the issuer,
and call option provisions.

CORPORATE DEBT OBLIGATIONS are DEBT OBLIGATIONS issued by corporations with
maturities exceeding 270 days.

DEBT OBLIGATIONS represent money borrowed that obligates the issuer, (e.g., a
corporation, municipality, government, government agency) to repay the borrowed
amount at maturity (when the obligation is due and payable) and usually to pay
the holder interest at specific times (e.g., bonds, notes, debentures).

DIVERSIFIED FUNDS invest in the securities of a larger number of issuers than
non-diversified mutual funds. As a result, diversified mutual funds generally
will be less susceptible to the risks associated with a particular issuer than
non-diversified mutual funds. See "RISK CONSIDERATIONS."

EQUITY SECURITIES include COMMON AND PREFERRED STOCKS, WARRANTS, RIGHTS and
CONVERTIBLE SECURITIES. These securities may be publicly or privately issued.

FEDERAL FUNDS are funds deposited by commercial banks at Federal Reserve Banks,
Banks that are members of the Federal Reserve may transfer funds on behalf of
customers on a same-day basis by debiting and crediting balances in the various
other Federal Reserve Banks.

FINANCIAL INTERMEDIARY is any entity, such as a bank, broker-dealer, or other
financial institution, that has entered into an arrangement with us to sell Fund
shares to its customers.

FIXED-INCOME SECURITIES are securities that pay a fixed rate of return. This
term generally refers to DEBT OBLIGATIONS and PREFERRED STOCKS.

ILLIQUID SECURITIES are securities that cannot be disposed of within seven days
at approximately the price at which they are being carried on a mutual fund's
books.

INVESTMENT COMPANY SHARES are shares of other mutual funds which may be
purchased by the Funds to a limited extent.

INVESTMENT GRADE OBLIGATIONS are debt obligations rated BBB or better by S&P or
Baa or better by Moody's, or their unrated equivalents. Securities rated BBB by
S&P or Baa by MOODY'S have speculative characteristics.

Bishop Street Funds 41
<PAGE>
GLOSSARY

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

MONEY MARKET INSTRUMENTS are high quality, dollar-denominated, SHORT-TERM
OBLIGATIONS, including BANK OBLIGATIONS, U.S. TREASURY OBLIGATIONS, U.S.
GOVERNMENT AGENCY OBLIGATIONS, and short-term corporate obligations.

MOODY'S (Moody's Investors Service) is one of the two best known rating agencies
in the country. Like S&P, Moody's is a nationally recognized statistical rating
organization that rates certain securities, such as bonds, COMMERCIAL PAPER,
COMMON STOCKS and MUNICIPAL SECURITIES. More information about the various
ratings categories is in the Statement of Additional Information.

MORTGAGE-BACKED SECURITIES entitle the holder to a share of all interest and
principal payments from mortgages underlying the security. The mortgages backing
these securities include conventional thirty-year fixed mortgages, graduated
payment mortgages, adjustable rate mortgages, and floating rate mortgages.

During periods of declining interest rates, prepayment of mortgages underlying
mortgage-back securities may accelerate. It is often not possible to predict
accurately the average life or realized yield of a particular issue. The
following securities are types of mortgage-backed securities:

GOVERNMENT PASS-THROUGH SECURITIES are securities issued or guaranteed by a
U.S. Government agency representing an interest in a pool of mortgage loans.
Government and private guarantees do not extend to the securities' value,
which is likely to vary inversely with fluctuations in interest rates.

PRIVATE PASS-THROUGH SECURITIES are mortgage-backed securities issued by a
non-governmental entity, such as a trust. While they are generally
structured with one or more types of credit enhancement, private
pass-through securities typically lack a guarantee by an entity having the
credit status of a governmental agency or instrumentality.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) are debt obligations or multi-
class pass-through certificates issued by agencies or instrumentalities of
the U.S. Government, or by private originators, or investors in mortgage
loans. Each class of a CMO is issued with a specific fixed or floating
interest 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. This can result in a loss of all, or part, of any
premium paid.

42 Bishop Street Funds
<PAGE>
- -------------------------------------------

REMICs are CMOs that qualify for special tax treatment under the Internal
Revenue Code. They invest in certain mortgages that are principally secured
by interests in real property. These securities are often guaranteed as to
the payment of principal and/or interest as payments are required to be made
on the underlying mortgage participation certificates.

STRIPPED MORTGAGE-BACKED SECURITIES (SMBS) are usually structured with two
classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive
all of the interest payments, and the other class may receive all of the
principal payments. SMBs are extremely sensitive to changes in interest
rates because of the impact of prepayment of principal on the underlying
mortgage securities.

ARMS (ADJUSTABLE RATE MORTGAGE SECURITIES) are pass-through certificates
representing ownership in a pool of adjustable rate mortgages. ARMs make
monthly payments based on a pro rata share of interest and principal
payments, and prepayments of principal on the pool of underlying mortgages.
The adjustable rate feature reduces, but does not eliminate, price
fluctuations in this type of mortgage-backed security.

MUNICIPAL SECURITIES include:

- - debt obligations issued by, or on behalf of, public authorities to obtain
funds to be used for various public facilities, for refunding outstanding
obligations, for general operating expenses, and for lending these funds to
other public institutions and facilities; and

- - certain private activity and industrial development debt obligations issued
by, or on behalf of, public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
facilities (sometimes called industrial development bonds).

The two principal types of municipal securities are general obligation bonds and
revenue bonds. General obligation bonds are backed by the taxing power of the
issuing municipality. Revenue bonds are backed by the revenues of a project or
facility (for example, tolls from a bridge). Industrial development bonds are
typically classified as revenue bonds. Certificates of participation represent
an interest in an underlying obligation or commitment, such as an obligation
issued in connection with a leasing arrangement. The payment of principal and
interest on private activity and industrial development bonds generally is
totally dependent on the ability of a facility's user to meet its financial
obligations and the pledge, if any, of real and personal property as security
for the payment.

Bishop Street Funds 43
<PAGE>
GLOSSARY

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

PORTFOLIO TURNOVER RATE is the rate that at which a mutual fund buys and sells
securities in its portfolio. A portfolio turnover rate of 100% indicates that a
mutual fund replaced 100% of the securities in its portfolio in one year.

REPURCHASE AGREEMENTS are agreements by which a mutual fund obtains a security
and simultaneously agrees to return the security to the seller at an agreed upon
price on an agreed upon date within a number of days from the date of purchase.
A Fund will enter into repurchase agreements only with financial institutions
judged to present minimal risk of bankruptcy during the term of the agreement
based on established guidelines.

RESTRICTED SECURITIES are securities that may not be sold freely to the public
without registering under the Securities Act of 1933 or an exemption from
registration.

RIGHTS give existing shareholders of a corporation the right, but not the
obligation, to buy shares of the corporation at a given price, usually below the
offering price, during a specified period.

SECURITIES LENDING -- To generate additional income, a Fund may lend securities
which it owns pursuant to agreements requiring that the loan be continuously and
fully secured by collateral. A Fund continues to receive interest on the loaned
securities while simultaneously earning interest on the investment of cash
collateral.

SECURITIES OF FOREIGN ISSUERS are securities issued by foreign corporations,
including, foreign branches of U.S. banks and foreign banks, and by foreign
governments or their agencies or instrumentalities. There are special risk
considerations associated with foreign securities.

SHORT-TERM OBLIGATIONS are debt obligations maturing (becoming payable) in 397
calendar days or less, including commercial paper and other short-term
obligations. Short-term corporate obligations are short-term obligations issued
by corporations.

SIGNATURE GUARANTEES are given by financial institutions or broker-dealers and
are used to validate a person's signature by comparing a signature in the
institution's files with the new signature.

S&P (STANDARD & POOR'S CORPORATION) is one of the two best known ratings
agencies in the country. Like Moody's, S&P is a nationally recognized
statistical rating organization that rates certain securities, such as bonds,
COMMERCIAL PAPER,

44 Bishop Street Funds
<PAGE>
- -------------------------------------------
COMMON STOCKS and MUNICIPAL SECURITIES. More information about the various
ratings categories is in the Statement of Additional Information.

STANDBY COMMITMENTS AND PUTS -- Securities subject to standby commitments or
puts permit the holder to sell the securities at a fixed price prior to
maturity. Securities subject to a standby commitment or put may be sold at any
time at the current market price. However, unless the standby commitment or put
was an integral part of the security as originally issued, it may not be
marketable or assignable.

SUPRANATIONAL AGENCY OBLIGATIONS are DEBT OBLIGATIONS established through the
joint participation of several governments, and include the Asian Development
Bank, the Inter-American Development Bank, International Bank for Reconstruction
and Development (World Bank), African Development Bank, European Economic
Community, European Investment Bank, and the Nordic Investment Bank.

TAXABLE SECURITIES are securities that generate income which is subject to
Federal income tax, such as U.S. TREASURY OBLIGATIONS, CORPORATE DEBT
OBLIGATIONS and ASSET-BACKED and MORTGAGE-BACKED SECURITIES.

U.S. GOVERNMENT AGENCY OBLIGATIONS are obligations issued or guaranteed by
agencies or instrumentalities of the U.S. Government. Some of these securities
are supported by the full faith and credit of the U.S. Treasury, others are
supported by the right of the issuer to borrow from the Treasury, and others are
supported only by the credit of the agency or instrumentality.

U.S. TREASURY OBLIGATIONS consist of bills, notes, and bonds issued by the U.S.
Treasury. They also consist of separately traded interest and principal
component parts of these obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities (STRIPS). Receipts are similar to STRIPS, but are issued by banks or
broker-dealers, and are created by depositing U.S. Treasury obligations into a
special account at a custodian bank. The custodian holds the income from the
receipts for the benefit of the receipt owners.

VARIABLE AND FLOATING RATE INSTRUMENTS involve certain DEBT OBLIGATIONS that 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.

Bishop Street Funds 45
<PAGE>
GLOSSARY

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

VOLATILITY is the tendency of a security's value to rise or fall sharply in a
short time period.

WARRANTS give holders the right, but not the obligation, to buy shares of a
company at a given price, usually higher than the market price, during a
specified period.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES involve the purchase of an
instrument with payment and delivery taking place in the future. Delivery of,
and payment for, these securities may occur a month or more after the date of
the purchase commitment. The interest rate realized on these securities is fixed
as of the purchase date and no interest accrues to a Fund before settlement.

YANKEE BONDS are U.S. dollar denominated DEBT OBLIGATIONS issued in the U.S. by
foreign banks and corporations.

ZERO COUPON OBLIGATIONS are DEBT OBLIGATIONS that do not bear any interest, but
instead are issued at a deep discount from face value or par. The value of a
zero coupon obligation increases over time to reflect the interest accreted.
Such obligations will not result in the payment of interest until maturity, and
will have greater price volatility than similar securities that are issued at
face value or par and pay interest periodically.

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

Additional information about the Funds is included in our Statement of
Additional Information dated April 30, 1998. Our Statement of Additional
Information has been filed with the SEC and is incorporated by reference into
this Prospectus. You may obtain a copy of our Statement of Additional
Information, or the annual or semi-annual report, without charge by contacting
us by phone at 1-800-262-9565 or by mail at SEI Investments Distribution Co.,
Oaks, Pennsylvania, 19456.

WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS THAT ARE NOT CONTAINED IN THIS PROSPECTUS OR IN OUR STATEMENT OF
ADDITIONAL INFORMATION IN CONNECTION WITH THE OFFERING OF FUND SHARES. DO NOT
RELY UPON SUCH INFORMATION OR REPRESENTATIONS AS HAVING BEEN AUTHORIZED BY US.

46 Bishop Street Funds
<PAGE>

<TABLE>
<CAPTION>
BISHOP STREET FUNDS ORGANIZATIONAL OVERVIEW
<S> <C>
INVESTMENT ADVISER First Hawaiian Bank
999 Bishop Street
Honolulu, Hawaii 96813
INVESTMENT SUB-ADVISER Wellington Management
Company, LLP
75 State Street
Boston, Massachusetts 02109
DISTRIBUTOR SEI Investments Distribution Co.
Oaks, Pennsylvania 19456
ADMINISTRATOR SEI Fund Resources
Oaks, Pennsylvania 19456
TRANSFER AGENT DST Systems, Inc.
1004 Baltimore Street
Kansas City, Missouri 64105
CUSTODIAN Chase Manhattan Bank
New York, New York 10041
LEGAL COUNSEL Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
AUDITORS Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania 19103
Advised by
[LOGO]
</TABLE>

BSF-F-007-02
<PAGE>

BISHOP STREET FUNDS
A NO-LOAD MUTUAL FUND FAMILY ADVISED BY FIRST HAWAIIAN BANK
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 1998

This Statement of Additional Information is not a prospectus. It is intended
to provide additional information regarding the activities and operations of the
Trust. Please read this in conjunction with the Trust's prospectus dated April
30, 1998. Prospectuses may be obtained through the Distributor, SEI Investments
Distribution Co., Oaks, Pennsylvania 19456.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
The Trust................................................................................................. S-2
Description of Permitted Investments...................................................................... S-2
Investment Limitations.................................................................................... S-6
The Adviser............................................................................................... S-7
The Sub-Adviser........................................................................................... S-8
The Administrator......................................................................................... S-8
The Distributor........................................................................................... S-10
Trustees and Officers of the Trust........................................................................ S-10
Reporting................................................................................................. S-12
Performance............................................................................................... S-12
Purchase and Redemption of Shares......................................................................... S-14
Determination of Net Asset Value.......................................................................... S-14
Taxes..................................................................................................... S-15
Fund Transactions......................................................................................... S-18
Description of Shares..................................................................................... S-20
Limitation of Trustees' Liability......................................................................... S-20
Shareholder Liability..................................................................................... S-20
5% Shareholders........................................................................................... S-20
Financial Information..................................................................................... S-21
Appendix.................................................................................................. S-22
</TABLE>

<PAGE>
THE TRUST

Bishop Street Funds (the "Trust") is an open-end management investment
company. The Trust is 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"). Each share of each Series
represents an equal proportionate interest in that Series. Please see
"Description of Shares" for more information.

This Statement of Additional Information relates to the Trust's Equity Fund,
Hawaii Municipal Bond Fund, High Grade Income 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.

FOREIGN SECURITIES--U.S. dollar denominated obligations of foreign issuers
may consist of obligations of foreign branches of U.S. banks and of foreign
banks, including European Certificates of Deposit, European Time Deposits,
Canadian Time Deposits and Yankee Certificates of Deposits, and investments in
Canadian Commercial Paper, foreign securities and Europaper. American Depositary
Receipts have 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.

GNMA SECURITIES--Securities issued by the Government National Mortgage
Association ("GNMA"), a wholly-owned U.S. Government corporation, guarantee 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 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
accurately predict 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.

INVESTMENT COMPANY SHARES--Shares of other mutual funds which may be
purchased by the Funds to the extent consistent with applicable law. Under these
rules and regulations of the Investment Company Act of 1940 (the "1940 Act"), a
Fund is prohibited from acquiring the securities of other

S-2
<PAGE>

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 of the Funds would
indirectly bear a proportionate share of the operating expenses of such
investment companies, including advisory fees.

MORTGAGE-BACKED 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 additional 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.

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.

Asset-backed securities 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.

MUNICIPAL SECURITIES--Municipal notes include, but are not limited to,
general obligation notes, tax 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.

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.

Investments in 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 the Fund can demand payment of the obligation at

S-3
<PAGE>

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 in order 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 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. 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, a 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.

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

S-4
<PAGE>

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
securities. Because of the diverse nature of such laws and regulations and the
impossibility of either predicting in which specific municipal securities the
Hawaii Municipal Bond 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 INVESTMENTS--The Funds are not prohibited from investing in
obligations of banks which are clients of SEI Investments Company. 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.

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.

SECURITIES LENDING--Each of the Funds may lend securities pursuant to
agreements requiring that the loans be continuously secured by cash or liquid
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.

S-5
<PAGE>

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.

VARIABLE AMOUNT MASTER DEMAND NOTES--are debt obligations 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.

WHEN-ISSUED SECURITIES--When-issued 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.

INVESTMENT LIMITATIONS

FUNDAMENTAL POLICIES

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% of total assets taken at
current value at the time of the incurrence of such loan.

S-6
<PAGE>
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
rules and the Investment Company Act of 1940 and the regulations thereunder.

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 POLICY

No Fund may invest in illiquid securities in an amount exceeding, in the
aggregate, 15% of the Fund's net assets (except for all money market funds, for
which the limit is 10%).

The foregoing percentages will apply at the time of the Fund purchases the
security and shall not be considered violated unless an excess occurs or exists
immediately after, and as a result of, a purchase of such 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 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

S-7
<PAGE>
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 years ended December 31, 1995, 1996 and 1997, the Funds paid
the following advisory fees:

<TABLE>
<CAPTION>
ADVISORY FEES PAID ADVISORY FEES WAIVED
------------------------------------- -------------------------------------
1995 1996 1997 1995 1996 1997
------------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Hawaii Municipal Bond Fund........ $ 0 $ 0 $ 49,931.76 $ 78,455 $
High Grade Income Fund............ * * * * $
Equity Fund....................... * * * * $
Treasury Money Market Fund........ * $ 189,543 * $ 126,363 $
Money Market Fund................. $ 377,090.24 $ 931,000 $ 422,799.05 $ 0 $
</TABLE>

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

* Not in operation during such period.

THE SUB-ADVISER

The Adviser has entered into a sub-advisory agreement (the "Sub-Advisory
Agreement") with Wellington Management Company, LLP (the "Sub-Adviser") relating
to the Money Market and Treasury Money Market Funds. Under the Sub-Advisory
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 years ended December 31, 1995, 1996 and 1997, the Money
Market and Treasury Money Market Funds paid the following sub-advisory fees:

<TABLE>
<CAPTION>
SUB-ADVISORY FEES PAID SUB-ADVISORY FEES WAIVED
------------------------------------- -------------------------------------------------------
1995 1996 1997 1995 1996 1997
------------- ---------- ---------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund................ $ 199,972.32 $ 245,175 $ $ 0 $ 0 $
Treasury Money Market Fund....... * $ 78,977 $ * $ 0 $
</TABLE>

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

* Not in operation during such period.

THE ADMINISTRATOR

The Trust and SEI Fund Resources (the "Administrator") have entered into an
administration agreement (the "Administration Agreement") dated January 27,
1995. Under the Administration Agreement, the Administrator 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 for the Funds.

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.

S-8
<PAGE>

For the fiscal years ended December 31, 1995, 1996 and 1997, the Funds paid
the following administrative fees:

<TABLE>
<CAPTION>
ADMINISTRATIVE FEES PAID ADMINISTRATIVE FEES WAIVED
------------------------------------- ----------------------------------------
1995 1996 1997 1995 1996 1997
------------- ---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Hawaii Municipal Bond Fund..... $ 0 $ 0 $ $ 15,374.15 $ 44,816 $
High Grade Income Fund......... * * $ * * $
Equity Fund.................... * * $ * * $
Treasury Money Market Fund..... * $ 105,303 $ * $ 105,000 $
Money Market Fund.............. $ 533,244.01 $ 326,909 $ $ 0 $ 326,909 $
</TABLE>

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

* Not in operation during such period.

The Administrator, a Delaware business trust, has its principal business
offices at Oaks, Pennsylvania 19456. SEI Investments Management Corporation
("SIMC"), a wholly-owned subsidiary of SEI Investments Company ("SEI
Investments"), is the owner of all beneficial interests in the Administrator.
SEI Investments and its subsidiaries and affiliates, including the
Administrator, 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 and
its affiliates also serve as administrator to the following other mutual funds:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund,
ARK Funds, Boston 1784 Funds-Registered Trademark-, CoreFunds, Inc., CrestFunds,
Inc., CUFUND, The Expedition Funds, FMB Funds Inc., First American Funds, Inc.,
First American Investment Funds, Inc., First American Strategy Funds, Inc.,
HighMark Funds, Marquis Funds-Registered Trademark-, Monitor Funds, Morgan
Grenfell Investment Trust, The PBHG Funds, Inc., PBHG Insurance Series Fund,
Inc., The Pillar Funds, Santa Barbara Group of Mutual Funds, Inc., SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI International Trust, SEI
Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic
Variable Trust, TIP Funds and TIP Institutional Funds.

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-9
<PAGE>
THE DISTRIBUTOR

SEI Investments Distribution Co. (the "Distributor"), a wholly-owned
subsidiary of SEI, serves as a distributor. 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 (the "Service Plan")
under which a shareholder servicing fee of up to .25% of average daily net
assets attributable to each Fund 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.

For the fiscal year ended December 31, 1997, 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 ($ AMOUNT) ($ AMOUNT) ($ AMOUNT) ($ AMOUNT) ($ AMOUNT) ($ AMOUNT)
- ----------------------------------- ----------- ------------- --------------- --------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Money Market Fund.................. $ $ $ $ $ $
Treasury Money Market Fund......... $ $ $ $ $ $
High Grade Income Fund.............
Hawaii Municipal Bond Fund......... $ $ $ $ $ $
Equity Fund........................
</TABLE>

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

* Not in operation during such period.

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 (DOB 11/16/23)--Trustee--P.O. Box 3196, Honolulu, HI,
Attorney, Goodsill, Anderson, Quinn & Stifel since 1951.

*PHILIP H. CHING (DOB 01/11/31)--Trustee--1700 Palaau St., Honolulu, HI.
Retired since 1996. Vice Chairman First Hawaiian Bank (banking) from 1958 to
1996.

SHUNICHI KIMURA (DOB 03/15/30)--Trustee--34 Lilinoe St., Hilo, HI.
Mediator--Mediation Specialists of Hawaii from November, 1994 to the present.
Judge -- State of Hawaii Judiciary from May, 1974 to April, 1994.
Regent--University of Hawaii (1995-1996); Mayor--County of Hawaii (1968 to
1974); Chairman and Chief Executive of the County of Hawaii (1964-1968).

S-10
<PAGE>

MANUAL R. SYLVESTER (DOB 06/20/30)--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 & Lybrand LLP,
Certified Public Accounting.

JOYCE S. TSUNODA (DOB 01/01/38)--Trustee--1814 Hoolehua Street, Pearl City,
HI 96782. Administrator University of Hawaii since 1974. Senior Vice
President--University of Hawaii and Chancellor for Community Colleges.

*WILLIAM S. RICHARDSON (DOB 12/22/19)--Trustee--3335 Loulu Street, Honolulu,
HI. Retired since 1992. Trustee, Kamehameha Schools Bishop Estate (charitable
educational trust) from 1982 to 1992.

*DAVID G. LEE (DOB 04/16/52)--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, G.W. Sierra Trust Funds prior to 1991.

SANDRA K. ORLOW (DOB 10/18/53)--Vice President and Assistant Secretary--Vice
President and Assistant Secretary of the Administrator and Distributor since
1988.

KEVIN P. ROBINS (DOB 04/15/61)--Vice President and Assistant
Secretary--Senior Vice President, General Counsel and Assistant Secretary of SEI
Investments, the Administrator and Distributor since 1994. Vice President of SEI
Investments, the Administrator and Distributor 1992-1994. Associate, Morgan,
Lewis & Bockius LLP (law firm), 1988-1992.

JOHN H. GRADY, JR. (DOB 06/01/61)--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.

KATHRYN L. STANTON (DOB 11/19/58)--Vice President and Assistant Secretary,
Deputy General Counsel--Vice President, Assistant Secretary of SEI, the
Administrator and Distributor, since 1994. Associate, Morgan, Lewis & Bockius
LLP (law firm) 1989-1994.

TODD CIPPERMAN (DOB 02/14/66)--Vice President, Assistant Secretary--Vice
President, Assistant Secretary of SEI Investments, the Administrator and
Distributor since May, 1995, Associate, Dewey Ballantine (law firm) 1994-1995,
Associate, Winston & Strawn (law firm) 1991-1995.

JOSEPH LYDON (DOB 09/27/59)--Vice President, Assistant Secretary--Director
of Business Administration, SEI Investments, 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.

ROBERT DELLACROCE (DOB 12/17/63)--Controller, Chief Financial
Officer--Director, Funds Administration and Accounting since 1994; Senior Audit
Manager, Arthur Andersen LLP, 1986-1994.

<TABLE>
<CAPTION>
AGGREGATE PENSION OR ESTIMATED TOTAL COMPENSATION FROM
COMPENSATION RETIREMENT BENEFITS ANNUAL REGISTRANT AND FUND COMPLEX
FROM REGISTRANT ACCRUED AS PART BENEFITS UPON PAID TO DIRECTORS FOR FYE
NAME OF PERSON AND POSITION FOR FYE 12/31/97 OF FUND EXPENSES RETIREMENT 12/31/97
- ----------------------------------- ----------------- ----------------------- ------------- ----------------------------
<S> <C> <C> <C> <C>
Martin Anderson, Trustee*.......... $ $ 0 $0 $ for services on 1
board
Philip H. Ching, Trustee*.......... N/A $ 0 $0 $ for services on 1
board
Shunichi Kimura, Trustee........... $ $ 0 $0 $ for services on 1
board
Manuel R. Sylvester, Trustee....... $ $ 0 $0 $ for services on 1
board
Joyce S. Tsunoda, Trustee.......... $ $ 0 $0 $ for services on 1
board
William S. Richardson, Trustee*.... $ $ 0 $0 $ 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.

S-11
<PAGE>
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 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 yield" (also
called "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 similarly calculated 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, 1997, the seven-day yield and
seven-day effective yield for the Money Market Fund were % and %,
respectively.

For the seven-day period ended December 31, 1997, the seven-day yield and
seven-day effective yield for the Treasury Money Market Fund were % and
%, respectively.

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 the product to that portion, if any, of the

S-12
<PAGE>
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:

6
Yield = (2 (a-b/cd + 1) -1) where a = dividends and interest earned during
the period; b = expenses accrued for the period (net of reimbursements); c = the
average 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, 1997, the 30-day yield and 30-day
tax equivalent yield for the Hawaii Municipal Bond Fund were % and %,
respectively. For the 30-day period ended December 31, 1997, the 30-day yield
for the High Grade Income Fund was %.

TOTAL RETURN. From time to time, certain of the 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: n
P (1 + T) = 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. The performance
results listed below refer to results for the fiscal year ended December 31,
1997.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
------------------------------
FUND 1-YEAR SINCE INCEPTION
- --------------------------------- ----------- -----------------
<S> <C> <C>
Equity Fund %
Hawaii Municipal Bond Fund %
High Grade Income Fund %
Money Market Fund %
Treasury Money Market Fund %
</TABLE>

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

S-13
<PAGE>
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.

S-14
<PAGE>
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.

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. Currently, the weekdays on which the Trust is closed for business are:
New Year's Day, Martin Luther King Jr.'s Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans' Day,
Thanksgiving Day, Christmas Day.

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.

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 SEC 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 SEC 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 1940 Act, 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

S-15
<PAGE>
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
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 Equity, Hawaii Municipal Bond and High Grade Income
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.

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) 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 (iii) 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) (A) of any one issuer or (B) 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.

S-16
<PAGE>
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.

If a Fund should fail to qualify as a RIC 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.

A dividends received deduction is available to corporations that receive
dividends from domestic corporations. Dividends paid by an equity fund generally
will be eligible for the dividends received deduction for corporate shareholders
to the extent they are derived from dividends from domestic corporations. 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. A non-corporate taxpayer's long-term capital gain from assets held (i) for
more than one year, but not more than 18 months, generally are taxable at the
maximum rate of 28 percent and (ii) for more than 18 months generally are
taxable at the maximum rate of 20 percent. 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 loss.

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-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 CONSIDERATIONS 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

S-17
<PAGE>

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
Alternative Minimum 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). 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.

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 U.S. 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 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
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

S-18
<PAGE>

and its territories, such as Guam, Puerto Rico and the U.S. Virgin Islands, is
exempt from State of Hawaii income taxation. While the Hawaii Municipal Bond
Fund intends to invest primarily in obligations such as these which produce
tax-exempt interest, if the Fund invests in obligations that are not exempt for
Hawaii purposes, a portion of the Fund's distribution will be subject to Hawaii
income tax.

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 selects brokers or dealers to execute transactions for the
purchase or sale of portfolio securities on the basis of its judgment of their
professional capability to provide the service. The primary consideration is to
have brokers or dealers provide transactions at best price and execution for the
Trust. Best price and execution includes many factors, including the price paid
or received for a security, the commission charged, the promptness and
reliability of execution, the confidentiality and placement accorded the order
and other factors affecting the overall benefit obtained by the account on the
transaction. The Trust's determination of what are reasonably competitive rates
is based upon the professional knowledge of its trading department as to rates
paid and charged for similar transactions throughout the securities industry. In
some instances, the Trust pays a minimal share transaction cost when the
transaction presents no difficulty. Some trades are made on a net basis where
the Trust either buys securities directly from the dealer or sells them to the
dealer. In these instances, there is no direct commission charged but there is a
spread (the difference between the buy and sell price) which is the equivalent
of a commission.

The Trust may allocate out of all commission business generated by all of
the Funds and accounts under management by the Adviser, brokerage business to
brokers or dealers who provide brokerage and research services. These research
services include advice, either directly or through publications or writings, as
to the value of securities, the advisability of investing in, purchasing or
selling securities, and the availability of securities or purchasers or sellers
of securities; furnishing of analyses and reports concerning issuers, securities
or industries; providing information on economic factors and trends, assisting
in determining portfolio strategy, providing computer software used in security
analyses, and providing portfolio performance evaluation and technical market
analyses. Such services are used by the Adviser in connection with its
investment decision-making process with respect to one or more funds and
accounts managed by it, and may not be used exclusively with respect to the fund
or account generating the brokerage.

As provided in the Securities Exchange Act of 1934 (the "1934 Act") higher
commissions may be paid to broker-dealers who provide brokerage and research
services than to broker-dealers who do not provide

S-19
<PAGE>

such services if such higher commissions are deemed reasonable in relation to
the value of the brokerage and research services provided. Although transactions
are directed to broker-dealers who provide such brokerage and research services,
the Trust believes that the commissions paid to such broker-dealers are not, in
general, higher than commissions that would be paid to broker-dealers not
providing such services and that such commissions are reasonable in relation to
the value of the brokerage and research services provided. In addition,
portfolio transactions which generate commissions or their equivalent are
directed to broker-dealers who provide daily portfolio pricing services to the
Trust. Subject to best price and execution, commissions used for pricing may or
may not be generated by the funds receiving the pricing service.

The Adviser may place a combined order for two or more accounts or funds
engaged in the purchase or sale of the same security if, in its judgment, joint
execution is in the best interest of each participant and will result in best
price and execution. Transactions involving commingled orders are allocated in a
manner deemed equitable to each account or fund. It is believed that the ability
of the accounts to participate in volume transactions will generally be
beneficial to the accounts and funds. Although it is recognized that, in some
cases, the joint execution of orders could adversely affect the price or volume
of the security that a particular account or Fund may obtain, it is the opinion
of the Adviser and the Trust's Board of Trustees that the advantages of combined
orders outweigh the possible disadvantages of separate transactions.

Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc., and subject to seeking best price and execution, the Funds, at
the request of the Distributor, give consideration to sales of shares of the
Trust as a factor in the selection of brokers and dealers to execute Trust
portfolio transactions.

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.

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.

The portfolio turnover rate for the Hawaii Municipal Bond Fund was 27.41%
for the fiscal year ended December 31, 1996, and % for the fiscal year ended
December 31, 1997. For the fiscal year ended December 31, 1997, the portfolio
turnover rate for the Equity Fund was % and the High Grade Income Fund was
%.

S-20
<PAGE>

For the Trust's fiscal year ended December 31, 1996, the Trust paid no
brokerage fees. For the fiscal year ended December 31, 1997, the Trust paid
.

DESCRIPTION OF SHARES

The Agreement and Declaration of Trust authorizes the issuance of an
unlimited number of shares of each series. Each share of each Fund represents an
equal proportionate interest in that Fund with each other 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. 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 6, 1998, 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

<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- --------------------------------------- ------------------- -----------------
<S> <C> <C>
First Hawaiian Bank 223,852,778.31 98.27%
Asset Management Div.
Attn: Bishop Street Funds Dept.
P.O. Box 3708
Honolulu, HI 96811-3708
</TABLE>

S-21
<PAGE>
BISHOP STREET HIGH GRADE INCOME FUND

<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- --------------------------------------- ----------------- ---------------
<S> <C> <C>
First Hawaiian Bank 2,570,679.41 99.73%
Asset Management Div.
Attn: Bishop Street Funds Dept.
P.O. Box 3708
Honolulu, HI 96811-3708
</TABLE>

BISHOP STREET HAWAII MUNICIPAL BOND FUND

<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- --------------------------------------- ----------------- -----------------
<S> <C> <C>
First Hawaiian Bank 1,020,359.144 37.17%
Asset Management Div.
Attn: Bishop Street Funds Dept.
P.O. Box 3708
Honolulu, HI 96811-3708

First Hawaiian Bank 676,355.970 24.64%
Asset Management Div.
Attn: Bishop Street Funds Dept.
P.O. Box 3708
Honolulu, HI 96811-3708
</TABLE>

BISHOP STREET TREASURY MONEY MARKET FUND

<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- --------------------------------------- ----------------- ---------------
<S> <C> <C>
First Hawaiian Bank 228,596,743.10 100.00%
Trust and Investments Div.
Attn: Bishop Street Funds Dept.
P.O. Box 3708
Honolulu, HI 96811-3708
</TABLE>

BISHOP STREET EQUITY FUND

<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF FUND
- --------------------------------------- ----------------- ---------------
<S> <C> <C>
First Hawaiian Bank 5,683,144.21 99.73%
Asset Management Div.
Attn: Bishop Street Funds Dept.
P.O. Box 3708
Honolulu, HI 96811-3708
</TABLE>

FINANCIAL INFORMATION

The Trust's financial statements for the fiscal year ended December 31,
1996, including notes thereto and the report of Coopers & Lybrand L.L.P.
thereon, are herein incorporated by reference. A copy of the 1997 Annual Report
must accompany the delivery of this Statement of Additional Information.

S-22
<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.

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

S-22
<PAGE>
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 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-23
<PAGE>
BISHOP STREET FUNDS

PART C: OTHER INFORMATION

POST-EFFECTIVE AMENDMENT NO. 7

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS:

(a) Financial Statements

Part A: Financial and Performance Highlights

Part B: None

(b) Additional Exhibits

1 Agreement and Declaration of Trust of the Registrant as originally
filed with the Registrant's Registration Statement on June 20, 1994,
incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form N-1A (File No.
33-80514), as filed February 29, 1996.

1(a) Amended and Restated Agreement and Declaration of Trust as
originally filed with the Registrant's Pre-Effective Amendment No. 1
on September 7, 1994, incorporated herein by reference to
Post-Effective Amendment No. 3 to the Registrant's Registration
Statement on Form N-1A (File No. 33-80514), as filed February 29,
1996.

2 By-Laws of the Registrant as originally filed with the Registrant's
Registration Statement on June 20, 1994, incorporated herein by
reference to Post-Effective Amendment No. 3 to the Registrant's
Registration Statement on Form N-1A (File No. 33-80514), as filed
February 29, 1996.

2(a) Amended By-Laws of the Registrant as originally filed with the
Registrant's Pre-Effective Amendment No. 1 on September 7, 1994,
incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form N-1A (File No.
33-80514), as filed February 29, 1996.

2(b) Amended By-Laws of the Registrant is filed herewith.

5(a) Investment Advisory Agreement between the Registrant and First
Hawaiian Bank, incorporated herein by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement on Form
N-1A (File No. 33-80514), as filed February 29, 1996.

5(b) Investment Sub-Advisory Agreement by and among the Registrant, First
Hawaiian Bank and Wellington Management Company, LLP, incorporated
herein by reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form N-1A (File No. 33-80514),
as filed February 29, 1996.

5(c) Amended and Restated Investment Sub-Advisory Agreement by and among
the Registrant, First Hawaiian Bank and Wellington Management
Company, LLP, incorporated herein by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on Form
N-1A (File No. 33-80514), as filed April 30, 1997.

5(d) Schedule B dated April 30, 1996, to the Investment Advisory
Agreement dated January 27, 1995, between the Registrant and First
Hawaiian Bank, incorporated herein by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on Form
N-1A (File No. 33-80514), as filed April 30, 1997.

C-1
<PAGE>
6 Distribution Agreement between the Registrant and SEI Financial
Services Company, incorporated herein by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement on Form
N-1A (File No. 33-80514), as filed February 29, 1996.

8 Custodian Agreement between the Registrant and Chemical Bank, N.A.,
incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form N-1A (File No.
33-80514), as filed February 29, 1996.

9(a) Administration Agreement between the Registrant and SEI Financial
Management Corporation, incorporated herein by reference to
Post-Effective Amendment No. 3 to the Registrant's Registration
Statement on Form N-1A (File No. 33-80514), as filed February 29,
1996.

9(b) Transfer Agent Agreement between the Registrant and Supervised
Service Company, incorporated herein by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement on Form
N-1A (File No. 33-80514), as filed February 29, 1996.

9(c) Consent to Assignment and Assumption of the Administration Agreement
between the Trust and SEI Financial Management Corporation to SEI
Fund Resources, incorporated herein by reference to Post-Effective
Amendment No. 5 to the Registrant's Registration Statement on Form
N-1A (File No. 33-80514), as filed April 30, 1997.

10 Opinion and Consent of Counsel as originally filed with the
Registrant's Pre-Effective Amendment No. 1 on September 7, 1994,
incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form N-1A (File No.
33-80514), as filed February 29, 1996.

11 Consent of Independent Public Accountants, filed herewith

15 12b-1 Plan as originally filed with the Registrant's Pre-Effective
Amendment No. 1 on September 7, 1994, incorporated herein by
reference to Post-Effective Amendment No. 3 to the Registrant's
Registration Statement on Form N-1A (File No. 33-80514), as filed
February 29, 1996.

16 Performance Calculations as originally filed with the Registrant's
Pre-Effective Amendment No. 1 on September 7, 1994, incorporated
herein by reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form N-1A (File No. 33-80514),
as filed February 29, 1996.

C-2
<PAGE>

18 Rule 18f-3 Plan as originally filed with the Registrant's
Post-Effective Amendment No. 1 on July 31, 1995, incorporated herein
by reference to Post-Effective Amendment No. 3 to the Registrant's
Registration Statement on Form N-1A (File No. 33-80514), as filed
February 29, 1996.

27 Financial Data Schedules -- Not Applicable

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:

See the Prospectus and the Statement of Additional Information regarding the
Registrant's control relationships. The Administrator is a subsidiary of SEI
Investments Company, which also controls the distributor of the Registrant, SEI
Investments Distribution Co., 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 6, 1998:

<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- ------------------------------------------------------------------------------ -----------------
<S> <C>
Bishop Street High Grade Income Fund.......................................... 5
Bishop Street Hawaii Municipal Bond Fund...................................... 313
Bishop Street Equity Fund..................................................... 9
Bishop Street Money Market Fund............................................... 99
Bishop Street Treasury Money Market Fund...................................... 3
</TABLE>

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 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:

C-3
<PAGE>
FIRST HAWAIIAN BANK

<TABLE>
<CAPTION>
NAME AND POSITION NAME OF CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- -------------------------------------------- -------------------------------------------- ------------------------
<S> <C> <C>
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, Inc. Chairman, President and
Director Chief Executive
Officer
Walter A. Dods, Jr. First Hawaiian, Inc. Chairman and Chief
Director, Chairman and Chief Executive Executive Officer
Officer
Craig D. Eerkes Tri-City Oil Company Chairman and Chief
Director Executive Officer
Dr. Julia Ann Frohlich Blood Bank of Hawaii President
Director
Paul Mullin Ganley Estate of S.M. Damon Carlsmith, Ball, Trustee
Director Wichman, Murray, Case & Ichiki Partner
David M. Haig Estate of S.M. Damon Trustee
Director
Warren H. Haruki GTE Hawaiian Tel President
Director
Howard K. Hiroki Coopers & Lybrand Partner (retired)
Director
John A. Hoag First Hawaiian, Inc. President (retired)
Director
David C. Hulihee Royal Contracting Co., Ltd. President and Treasurer
Director
Glenn A. Kaya Hawaii Seiyu, Ltd. President
Director
Dr. Richard R. Kelley Outrigger Enterprises Chairman of the Board
Director
Bert T. Kobayashi, Jr. Kobayashi, Sugita & Goda Principal
Director
Dr. Richard T. Mamiya Richard Mamiya, M.D., Inc. Heart Surgeon
Director
Dr. Fujio Matsuda Pacific International Center for High Chairman
Director Technology Research
Dr. Roderick F. McPhee Punahou School President (retired)
Director
George P. Shea, Jr. First Insurance Company of Hawaii, Ltd. Chairman, President and
Director Chief Executive
Officer (retired)
</TABLE>

C-4
<PAGE>

<TABLE>
<CAPTION>
NAME AND POSITION NAME OF CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- -------------------------------------------- -------------------------------------------- ------------------------
<S> <C> <C>
R. Dwayne Steele Grace Pacific Corporation Chairman
Director
John K. Tsui First Hawaiian, Inc. President
Director, President & Chief Operating
Officer
Jenai Sullivan Wall Foodland Super Market, Ltd. President
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
Howard H. Karr -- --
Vice Chairman
Donald G. Horner -- --
Vice Chairman
Robert A. Alm -- --
Senior Vice President
Gary L. Caulfield -- --
Executive Vice President
Anthony R. Guerrero, Jr. -- --
Executive Vice President
Thomas P. Huber -- --
Executive Vice President and General
Counsel
Gerald M. Pang -- --
Executive Vice President and Chief Credit
Officer
Barbara S. Tomber -- --
Executive Vice President
Albert M. Yamada -- --
Executive Vice President and Chief
Financial Officer
Lily K. Yao -- --
Vice Chairman
</TABLE>

C-5
<PAGE>
WELLINGTON MANAGEMENT COMPANY

The list required by this Item 28 of officers and directors of Wellington
Management Company, LLP, 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 Company, LLP,
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 the securities of
the Registrant also acts as a principal underwriter, distributor or investment
adviser.

Registrant's distributor, SEI Investments Distribution Co. (the
"Distributor"), acts as distributor for:

<TABLE>
<S> <C>
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
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
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds-Registered Trademark- August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
The Expedition Funds June 9, 1997
TIP Institutional Funds January 1, 1998
</TABLE>

The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement

C-6
<PAGE>
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 Oaks, PA 19456.

<TABLE>
<CAPTION>
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 & President-- --
Investment Advisory Group

Gilbert L. Beebower Executive Vice President --

Richard B. Lieb Executive Vice President, President--Investment Services --
Division

Dennis J. McGonigle Executive Vice President --

Leo J. Dolan, Jr. Senior Vice President --

Carl A. Guarino Senior Vice President --

Larry Hutchison Senior Vice President --

David G. Lee Senior Vice President President and Chief
Executive Officer

Jack May Senior Vice President --

A. Keith McDowell Senior Vice President --

Hartland J. McKeown Senior Vice President --

Barbara J. Moore Senior Vice President --

Kevin P. Robins Senior Vice President, General Counsel & Secretary Vice President and
Assistant Secretary

Robert Wagner Senior Vice President --

Patrick K. Walsh Senior Vice President --

Robert Aller Vice President --

Gordon W. Carpenter Vice President --

Todd Cipperman Vice President & Assistant Secretary Vice President and
Assistant Secretary

Robert Crudup Vice President & Managing Director --

Barbara Doyne Vice President --

Jeff Drennen Vice President --

Vic Galef Vice President & Managing Director --

Kathy Heilig Vice President & Treasurer --

Michael Kantor Vice President --

Samuel King Vice President --

Kim Kirk Vice President & Managing Director --
</TABLE>

C-7
<PAGE>

John Krzeminski Vice President & Managing Director --

Carolyn McLaurin Vice President & Managing Director --

W. Kelso Morrill Vice President --

Mark Nagle Vice President --

Joanne Nelson Vice President --

Sandra K. Orlow Vice President & Assistant Secretary Vice President and
Assistant Secretary

Cynthia M. Parrish Vice President & Assistant Secretary --

Donald Pepin Vice President & Managing Director --

Kim Rainey Vice President --

Rob Redican Vice President --

Mark Samuels Vice President & Managing Director --

Steve Smith Vice President --

Daniel Spaventa Vice President --

Kathryn L. Stanton Vice President & Assistant Secretary Vice President and
Assistant Secretary

Wayne M. Withrow Vice President & Managing Director --

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:

Chase Manhattan Bank
4 New York Plaza
New York, New York 10004

(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 Fund Resources
Oaks, Pennsylvania 19456

(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:

<TABLE>
<S> <C>
First Hawaiian Bank Wellington Management Company, LLP
1132 Bishop Street 75 State Street
17th Floor Boston, Massachusetts 02109
Honolulu, Hawaii 96813
</TABLE>

C-8
<PAGE>
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 undertakes to furnish each person to whom a prospectus for any
series of the Registrant is delivered with a copy of the Registrant's latest
annual report to shareholders for such series, when such annual report is issued
containing information called for by Item 5A of Form N-1A, upon request and
without charge.

C-9
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
Post-Effective Amendment No. 7 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 25th day of February, 1998.

By: /s/ DAVID G. LEE
-----------------------------------------
David G. Lee
PRESIDENT AND CHIEF EXECUTIVE 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 25, 1998
Martin Anderson

/s/ PHILIP H. CHING
- ------------------------------ Trustee February 25, 1998
Philip H. Ching

/s/ SHUNICHI KIMURA
- ------------------------------ Trustee February 25, 1998
Shunichi Kimura

/s/ WILLIAM S. RICHARDSON
- ------------------------------ Trustee February 25, 1998
William S. Richardson

/s/ MANUEL R. SYLVESTER
- ------------------------------ Trustee February 25, 1998
Manuel R. Sylvester

/s/ JOYCE S. TSUNODA
- ------------------------------ Trustee February 25, 1998
Joyce S. Tsunoda

/s/ DAVID G. LEE
- ------------------------------ Trustee, President and February 25, 1998
David G. Lee Chief Executive Officer

/s/ ROBERT DELLACROCE
- ------------------------------ Controller and Chief February 25, 1998
Robert DellaCroce Financial Officer

<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
NAME EXHIBIT
- ----------------- -----------------------------------------------------------------------------------------------
<S> <C>
EX-99.B1 Agreement and Declaration of Trust of the Registrant dated May 25, 1994, as originally filed
with the Registrant's Registration Statement on June 20, 1994, incorporated herein by
reference to Post-Effective Amendment No. 3 to the Registrant's Registration Statement on
Form N-1A (File No. 33-80514), as filed February 29, 1996.

EX-99.B1(a) Amended and Restated Agreement and Declaration of Trust as originally filed with the
Registrant's Pre-Effective Amendment No. 1 on September 7, 1994, incorporated herein by
reference to Post-Effective Amendment No. 3 to the Registrant's Registration Statement on
Form N-1A (File No. 33-80514), as filed February 29, 1996.

EX-99.B2 By-Laws of the Registrant as originally filed with the Registrant's Registration Statement on
June 20, 1994, incorporated herein by reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form N-1A (File No. 33-80514), as filed February 29,
1996.

EX-99.B2(a) Amended By-Laws of the Registrant as originally filed with the Registrant's Pre-Effective
Amendment No. 1 on September 7, 1994, incorporated herein by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement on Form N-1A (File No. 33-80514),
as filed February 29, 1996.

EX-99.B2(b) Amended By-Laws of the Registrant is filed herewith.

EX-99.B5(a) Investment Advisory Agreement between the Registrant and First Hawaiian Bank, incorporated
herein by reference to Post-Effective Amendment No. 3 to the Registrant's Registration
Statement on Form N-1A (File No. 33-80514), as filed February 29, 1996.

EX-99.B5(b) Investment Sub-Advisory Agreement by and among the Registrant, First Hawaiian Bank and
Wellington Management Company, LLP, incorporated herein by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement on Form N-1A (File No. 33-80514),
as filed February 29, 1996.

EX-99.B5(c) Amended and Restated Investment Sub-Advisory Agreement by and among the Registrant, First
Hawaiian Bank and Wellington Management Company, LLP, incorporated herein by reference to
Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form N-1A (File
No. 33-80514), as filed April 30, 1997.

EX-99.B5(d) Schedule B dated April 30, 1996, to the Investment Advisory Agreement dated January 27, 1995,
between the Registrant and First Hawaiian Bank, incorporated herein by reference to
Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form N-1A (File
No. 33-80514), as filed April 30, 1997.

EX-99.B6 Distribution Agreement between the Registrant and SEI Financial Services Company, incorporated
herein by reference to Post-Effective Amendment No. 3 to the Registrant's Registration
Statement on Form N-1A (File No. 33-80514), as filed February 29, 1996.

EX-99.B8 Custodian Agreement between the Registrant and Chemical Bank, N.A., incorporated herein by
reference to Post-Effective Amendment No. 3 to the Registrant's Registration Statement on
Form N-1A (File No. 33-80514), as filed February 29, 1996.

EX-99.B9(a) Administration Agreement between the Registrant and SEI Financial Management Corporation,
incorporated herein by reference to Post-Effective Amendment No. 3 to the Registrant's
Registration Statement on Form N-1A (File No. 33-80514), as filed February 29, 1996.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
NAME EXHIBIT
- ----------------- -----------------------------------------------------------------------------------------------
<S> <C>
EX-99.B9(b) Transfer Agent Agreement between the Registrant and Supervised Service Company, incorporated
herein by reference to Post-Effective Amendment No. 3 to the Registrant's Registration
Statement on Form N-1A (File No. 33-80514), as filed February 29, 1996.

EX-99.B9(c) Consent to Assignment and Assumption of the Administration Agreement between the Trust and SEI
Financial Management Corporation to SEI Fund Resources, incorporated herein by reference to
Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form N-1A (File
No. 33-80514), as filed April 30, 1997.

EX-99.B10 Opinion and Consent of Counsel as originally filed with the Registrant's Pre-Effective
Amendment No. 1 on September 7, 1994, incorporated herein by reference to Post-Effective
Amendment No. 3 to the Registrant's Registration Statement on Form N-1A (File No. 33-80514),
as filed February 29, 1996.

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

EX-99.B15 12b-1 Plan as originally filed with the Registrant's Pre-Effective Amendment No. 1 on September
7, 1994, incorporated herein by reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form N-1A (File No. 33-80514), as filed February 29,
1996.

EX-99.B16 Performance Calculations as originally filed with the Registrant's Pre-Effective Amendment No.
1 on September 7, 1994, incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form N-1A (File No. 33-80514), as filed February
29, 1996.

EX-99.B18 Rule 18f-3 Plan as originally filed with the Registrant's Post-Effective Amendment No. 1 on
July 31, 1995, incorporated herein by reference to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form N-1A (File No. 33-80514), as filed February 29,
1996.

EX-99.B27 Financial Data Schedules -- Not Applicable
</TABLE>

<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.

1
<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 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.

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 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 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.

2
<PAGE>

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.

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 Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given

3
<PAGE>

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.

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

4
<PAGE>

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 removal, or any right to damages on account of such removal.

5
<PAGE>

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 purpose by the vote of the Trustees and need not bear the seal of the
Trust.

6
<PAGE>

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. REPORTS TO SHAREHOLDERS

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.

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>

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this Post-Effective Amendment
No. 7 to the Registration Statement under the Securities Act of 1933 on Form
N-1A (File No. 33-80514) of our report dated February 18, 1997 on our audit of
the financial statements and financial highlights of the Bishop Street Funds as
of, and for the period ended, December 31, 1996 in the Statement of Additional
Information. We also consent to the reference to our Firm under the headings
"Financial Highlights" and "Counsel and Independent Accountants" in the
Prospectus and under the heading "Financial Statements" in the Statement of
Additional Information.

COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 24, 1998