<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 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. 9 /X/
AND
REGISTRATION STATEMENT UNDER
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 10 /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
KEVIN P. ROBINS
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 November 13, 1998 pursuant to paragraph (a)
of Rule 485
/ / 75 days after filing pursuant to paragraph (a)
</TABLE>
<TABLE>
<CAPTION>
Title of Securities Being Registered........................ Units of Beneficial Interest
<S> <C>
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
BISHOP STREET FUNDS
CROSS REFERENCE SHEET
POST-EFFECTIVE AMENDMENT NO. 9
<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 Shares; How to Exchange 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
Item 15. Control Persons and Principal Holders of
Securities....................................... Trustees and Officers of the Trust
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- -------------------------------------------------------------- --------------------------------------------------
<S> <C> <C>
Item 16. Investment Advisory and Other Services............ The 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.............................. *
</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
NOVEMBER , 1998
INSTITUTIONAL HIGH GRADE INCOME FUND
INSTITUTIONAL EQUITY FUND
<PAGE>
Bishop Street Funds (the Trust) is a mutual fund that offers shares in seven
separate investment portfolios (each a Fund and together the Funds). This
Prospectus provides you with important information about the Institutional
Equity Fund and Institutional High Grade Equity Fund (each a "Fund" and together
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 or passed upon the accuracy or adequacy of this Prospectus.
Any 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.
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 -- This section 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" OR "US"?
In this Prospectus, "we" or "us" generally means the Bishop Street Funds.
"We" or "us" 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
Institutional Equity Fund...................................... 6
Institutional High Grade Income Fund........................... 8
Risk Considerations.............................................. 10
Performance Information.......................................... 13
How to Purchase Shares........................................... 14
How to Sell Shares............................................... 16
How to Exchange Shares........................................... 17
More Information About Doing Business With Us.................... 18
Dividends and Distributions...................................... 18
Tax Information.................................................. 19
General Information.............................................. 21
Fund Investments & Practices..................................... 23
Investment Restrictions.......................................... 25
Glossary......................................................... 26
</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 Institutional Equity Fund, and Institutional
High Grade Income Fund.
4 Bishop Street Funds
<PAGE>
Questions & Answers
- -------------------------------------------
Below are answers to commonly asked questions about 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, unlike bank accounts and CDs, your principal and
rate of return are not insured or guaranteed by the U.S. Government. 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 without a sales charge (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. Consult your tax advisor for more information on the tax
consequences of your mutual fund investment.
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.
Bishop Street Funds 5
<PAGE>
Institutional Equity Fund
- -------------------------------------------
Fund Summary
Main Objective: CAPITAL APPRECIATION
Secondary Objective: Current income
Investment Focus: EQUITY SECURITIES
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 Institutional Equity Fund offers you the opportunity to realize long-
term CAPITAL APPRECIATION, combined with current income. It is designed
for investors who are willing to accept the risk of share price
VOLATILITY in exchange for long-term CAPITAL APPRECIATION potential.
[LOGO]
The Institutional 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 Institutional 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>
Institutional Equity Fund
- -------------------------------------------
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 Institutional 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) .65%
Other Expenses After Fee
Waivers(2) .35%
------
Total Operating Expenses
After Fee Waivers(3) 1.00%
</TABLE>
(1) ABSENT VOLUNTARY WAIVERS, INVESTMENT ADVISORY FEES WOULD BE .74%.
(2) ABSENT VOLUNTARY WAIVERS, OTHER EXPENSES WOULD BE .65%. OTHER
EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
(3) ABSENT THE WAIVERS DESCRIBED ABOVE, TOTAL FUND OPERATING EXPENSES
WOULD BE 1.39%. THESE WAIVERS ARE VOLUNTARY AND MAY BE DISCONTINUED
AT ANY TIME.
<TABLE>
<CAPTION>
Example 1 Year 3 Years
<S> <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. $10 $32
</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>
Institutional 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 Institutional High Grade Income Fund seeks to provide high TOTAL
RETURN consistent with prudent investment risk.
[LOGO]
- ---------------------------------------------------------------------
Fund Investments
The Institutional High Grade Income Fund is designed for conservative
investors who want a higher level of income than what most money market
funds provide and are willing to accept some share price VOLATILITY.
TOTAL RETURN generally refers to both CAPITAL APPRECIATION and income.
The Fund, however, focuses on achieving high TOTAL RETURN through income,
rather than through CAPITAL APPRECIATION.
[LOGO]
The 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 SECURITIES OF FOREIGN ISSUERS, MORTGAGE-BACKED and
ASSET-BACKED SECURITIES, and VARIABLE AND FLOATING RATE INSTRUMENTS. To
some extent, the Fund may invest in INVESTMENT GRADE OBLIGATIONS and
other securities, and may engage in other investment practices. See "FUND
INVESTMENTS & PRACTICES."
Under normal market conditions, the Institutional 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.
8 Bishop Street Funds
<PAGE>
Institutional High Grade Income Fund
- -------------------------------------------
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 - Interest Rate Risk
- Market Risk - Prepayment 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 Institutional High Grade
Income 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) .43%
Other Expenses After Fee
Waivers(2) .37%
--
Total Operating Expenses
After Fee Waivers(3) .80%
</TABLE>
(1) ABSENT VOLUNTARY WAIVERS, INVESTMENT ADVISORY FEES WOULD BE .55%.
(2) ABSENT VOLUNTARY WAIVERS, OTHER EXPENSES WOULD BE .69%. OTHER
EXPENSES ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
(3) ABSENT THE WAIVERS DESCRIBED ABOVE, TOTAL FUND OPERATING EXPENSES
WOULD BE 1.24%. THESE WAIVERS ARE VOLUNTARY AND MAY BE DISCONTINUED
AT ANY TIME.
<TABLE>
<CAPTION>
Example 1 Year 3 Years
<S> <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. $8 $26
</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 9
<PAGE>
Risk Considerations
- -------------------------------------------
<TABLE>
<CAPTION>
Funds Subject to
Type of Risk that Risk
<S> <C>
Call Risk -- The possibility that during Institutional High
periods of falling interest rates, DEBT Grade Income Fund
OBLIGATIONS with high interest rates will be
prepaid (or "called") by the issuer prior to
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 Institutional High
will be unable to make timely payments of Grade Income Fund
either principal or interest.
Currency Risk -- The possibility that changes Institutional High
in foreign exchange rates will affect, Grade Income Fund
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 Institutional Equity
securities may suffer substantial declines in Fund
credit quality and market value due to Institutional High
corporate or governmental restructurings. Grade Income Fund
While event risk may be high for certain
securities held by a Fund, event risk is
decreased by diversification of the Fund's
holdings.
Foreign Security Risks -- There are risks Institutional High
associated with investing in SECURITIES OF Grade Income Fund
FOREIGN ISSUERS, including:
Volatility -- Foreign markets can be more
volatile than U.S. markets because of the
diplomatic, political, or economic
developments that may affect investments in
foreign countries.
</TABLE>
10 Bishop Street Funds
<PAGE>
- -------------------------------------------
<TABLE>
<CAPTION>
Funds Subject to
Type of Risk that Risk
<S> <C>
Foreign Security Risks (cont')
Foreign Taxes -- Some foreign governments Institutional High
levy withholding taxes against dividend and Grade Income Fund
interest income. Although in some countries
a portion of these taxes is 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 in
foreign countries than in the U.S.
Fund Risk -- The possibility that a Fund's Both Funds
performance during a specific period may not
meet, or exceed, that of its market benchmark.
Interest Rate Risk -- The potential for a Institutional High
decline in the price of FIXED-INCOME Grade Income Fund
SECURITIES due to rising interest rates. This
risk is greater for long-term securities than
it is for short-term securities.
</TABLE>
Bishop Street Funds 11
<PAGE>
Risk Considerations
- -------------------------------------------
<TABLE>
<CAPTION>
Funds Subject to
Type of Risk that Risk
<S> <C>
Market Risk -- The possibility that stock or Both 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 Institutional High
MORTGAGE-BACKED and ASSET-BACKED SECURITIES Grade Income Fund
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 the 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>
12 Bishop Street Funds
<PAGE>
- -------------------------------------------
PERFORMANCE INFORMATION
The Institutional Equity and Institutional High Grade Income Funds are each the
successor to common trust funds. The common trust funds were previously managed
by First Hawaiian Bank. Substantially all of the assets of those common trust
funds were transferred to the Funds when each Fund started operating. Total
return, a type of performance calculation for the predecessor common trust
funds, is presented below. You may find this performance information helpful
because the common trust funds were managed using the same investment objective
policies and restrictions as those used by each of the Funds. The performance
information relates to a period of time before the effective date of each Fund's
registration.
The total return of a fund refers to the average compounded rate of return on a
hypothetical investment. This includes any sales charge imposed for designated
time periods, such as the period from which a fund started operating through a
specified date. When we compute total return, we assume that your entire
investment is redeemed at the end of each period and that you reinvest all
income dividends and capital gains distributions.
Please keep in mind that performance information such as total return is not
necessarily indicative of the future performance of a Fund. The predecessor
common trust funds were not subject to certain investment limitations,
diversification requirements and other restrictions imposed by the 1940 Act and
the Internal Revenue Code. If these had been imposed, a common trust fund's
performance may have been adversely affected. The predecessor common trust funds
did not incur expenses that correspond to the advisory, administrative, and
other fees to which each Fund is now subject. Accordingly, the following
performance information has been adjusted by applying the current total expense
ratios of the Funds. This adjustment reduced the actual performance of the
common trust funds.
The average annual returns (adjusted to reflect Fund expenses, before voluntary
waivers and reimbursements) for the following periods:
<TABLE>
<CAPTION>
Since
One Year Three Years Five Years Ten Years Inception
<S> <C> <C> <C> <C> <C>
Institutional Equity Common Trust
Fund -- -- -- -- --
Institutional High Grade Income
Common Trust Fund -- -- -- -- --
</TABLE>
Bishop Street Funds 13
<PAGE>
How To Purchase Shares
- -------------------------------------------
General Information
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 Fund 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 a Fund 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.
We calculate NAV as of the regularly-scheduled close of normal trading on
the NYSE (normally, 4:00 p.m., Eastern time) on each Business Day. 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 Through a Financial Intermediary
You may purchase shares from First Hawaiian Bank representatives or
through FINANCIAL INTERMEDIARIES. 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.
Purchasing Directly from the Transfer Agent
You also may purchase shares of the Funds directly from us by mail or
wire. If you decide to buy shares directly from us, call us at
1-800-262-9565 to obtain an Account Application if you do not already
have one.
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.
14 Bishop Street Funds
<PAGE>
- -------------------------------------------
If your check does not clear, your purchase will be canceled and you
could be liable for any costs incurred.
Initial Purchase
To purchase shares of any Fund for the first time, you must invest at
least $1,000 in a 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 a Fund. Officers,
directors and employees of First Hawaiian Bank or its affiliates who have
arranged to purchase shares through the Automatic Investment Plan (see
"Purchasing by Automatic Investment Plan") may buy shares with an initial
purchase of $100 in any Fund.
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. 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 the minimum initial and
additional purchase amounts at our discretion.
Bishop Street Funds 15
<PAGE>
How To Sell Shares
- -------------------------------------------
You may sell (redeem) your shares on any Business Day. You should contact
your FINANCIAL INTERMEDIARY for instructions on how to redeem shares. 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
in order to get that Business Day's NAV. 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. You also may
redeem your shares by contacting us by mail or telephone.
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 securities that have a market
value equal to the redemption price (a "redemption in kind"). If you
decide to sell these securities you would probably have to pay capital
gains taxes and brokerage costs on that sale.
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
from any Fund. You may use the SWP if you automatically reinvest your
dividends (see "DIVIDENDS AND DISTRIBUTIONS" below) and have an account
that is worth, in the aggregate, at least $10,000.
16 Bishop Street Funds
<PAGE>
- -------------------------------------------
For more information about the SWP, please contact your FINANCIAL
INTERMEDIARY.
Involuntary Redemptions
If your account balance drops below the required minimum initial purchase
amount due to redemptions from your account, including redemptions
through the SWP, 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 Shares
- -------------------------------------------
You may exchange shares of the Institutional High Grade Income Fund and
the Institutional Equity Fund for shares of the Hawaii Municipal Bond
Fund, Money Market Fund AND the Treasury Money Market 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. The Hawaii Municipal Money Market
and Treasury Market Funds are offered through a separate prospectus.
Please read the prospectus before you exchange your shares. You can
obtain a prospectus by calling us at 1-800-262-9565.
Bishop Street Funds 17
<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
we 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 want to transfer the registration of your shares to another
FINANCIAL INTERMEDIARY or become the record owner of your shares, then
you should contact your FINANCIAL INTERMEDIARY for instructions on how 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
- -------------------------------------------
The Institutional High Grade Income Fund declares income dividends daily
and pays them monthly. The Institutional 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 any 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, please contact your FINANCIAL INTERMEDIARY. Your election will
become effective for dividends paid after we receive your written notice.
18 Bishop Street Funds
<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 a Fund will be taxed as
ordinary income whether you receive the dividends in cash or additional
shares. Capital gains distributions 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 Fund held
the security.
Corporate shareholders in the Institutional 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 redemption or exchange of Fund shares is a taxable event to you.
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.
Bishop Street Funds 19
<PAGE>
Tax Information
- -------------------------------------------
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. 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.
20 Bishop Street Funds
<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 to 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, we are not required to hold annual
shareholder meetings unless otherwise required by the Investment Company
Act of 1940 (the 1940 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
Please contact your FINANCIAL INTERMEDIARY to obtain information on
account statements, procedures, and other related information.
Investment Adviser
First Hawaiian Bank (the Adviser), whose principal business address is
999 Bishop Street, Honolulu, Hawaii 96813, is the investment adviser to
the Funds. The Adviser is a wholly-owned subsidiary of First Hawaiian,
Bishop Street Funds 21
<PAGE>
General Information
- -------------------------------------------
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 may voluntarily waive all or a portion of its fees to limit
Total Fund Operating Expenses.
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 Institutional Equity and Institutional High Grade Income Funds are
managed by a team of investment professionals from the Adviser. No one
person is primarily responsible for making investment recommendations to
the team.
Distribution
SEI Investments Distribution Co. (the Distributor), a wholly-owned
subsidiary of SEI Investments Company, serves as the Trust'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 Investments Mutual Fund Services (the Administrator) acts as the
Trust's 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.
22 Bishop Street Funds
<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>
<TABLE>
<CAPTION>
Institutional
High
Institutional Grade
Equity Income
Fund Fund
<S> <C> <C>
Traditional Investments
ADRS 35% X
ASSET-BACKED SECURITIES -- 35%(6)
BANK OBLIGATIONS -- 35%(1)
COMMERCIAL PAPER -- 35%(1)
CONVERTIBLE SECURITIES 35% --
CORPORATE DEBT
OBLIGATIONS -- X(1,2)
EQUITY SECURITIES X --
INVESTMENT COMPANY
SHARES 10% 10%
MORTGAGE-BACKED
SECURITIES -- 35%(4)
REPURCHASE AGREEMENTS 35% 35%
RESTRICTED SECURITIES 15% 15%
SECURITIES OF FOREIGN
ISSUERS * X(1)
SUPRANATIONAL AGENCY
OBLIGATIONS -- 35%
U.S. GOVERNMENT AGENCY
AND TREASURY
OBLIGATIONS -- X(5)
VARIABLE & FLOATING RATE
INSTRUMENTS -- X
ZERO COUPON OBLIGATIONS -- X
</TABLE>
Bishop Street Funds 23
<PAGE>
Fund Investments & Practices
- -------------------------------------------
<TABLE>
<CAPTION>
Institutional
High
Institutional Grade
Equity Income
Fund Fund
<S> <C> <C>
Investment Practices
BORROWING 33 1/3% 33 1/3%
ILLIQUID SECURITIES 15%(3) 15%(3)
SECURITIES LENDING 50% 50%
STANDBY COMMITMENTS 33 1/3% 33 1/3%
WHEN-ISSUED SECURITIES 33 1/3% 33 1/3%
</TABLE>
(1) 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) MAY INVEST IN U.S. TREASURY RECEIPTS.
(6) RATED IN THE THREE HIGHEST RATINGS CATEGORIES BY S&P OR MOODY'S, OR
UNRATED EQUIVALENTS.
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
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.
24 Bishop Street Funds
<PAGE>
Investment Restrictions
- -------------------------------------------
Concentration
The Institutional Equity and Institutional High Grade Income Funds may not
invest more than 25% of each Fund's assets in any one industry.
Diversification
Each Fund is a DIVERSIFIED FUND. 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.
These investment restrictions are fundamental which means that they 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 25
<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 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.
BORROWING is an investment practice used by mutual funds. The 1940 Act permits a
mutual fund to borrow money (i) for temporary purposes (for up to 5% of the
fund's total assets) and (ii) from banks, subject to certain asset coverage
requirements.
CAPITAL APPRECIATION refers to the increase in value of a security.
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.
26 Bishop Street Funds
<PAGE>
- -------------------------------------------
COMMON AND PREFERRED STOCKS represent units of ownership in corporations. Owners
of common stocks typically are entitled to vote on important matters. Owners of
preferred stocks 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 refers to the amount of a mutual fund's assets that are invested
in securities of issuers engaged in the same or similar industries.
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, for example, COMMON AND PREFERRED STOCKS, WARRANTS,
RIGHTS and CONVERTIBLE SECURITIES. These securities may be publicly or privately
issued.
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.
Bishop Street Funds 27
<PAGE>
Glossary
- -------------------------------------------
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.
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 our 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-backed 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, 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
28 Bishop Street Funds
<PAGE>
- -------------------------------------------
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.
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.
Bishop Street Funds 29
<PAGE>
Glossary
- -------------------------------------------
PORTFOLIO TURNOVER RATE is the rate 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 under 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 is an investment practice that Funds use 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,
30 Bishop Street Funds
<PAGE>
- -------------------------------------------
COMMON STOCKS and MUNICIPAL SECURITIES. More information about the various
ratings categories is in our Statement of Additional Information.
STANDBY COMMITMENTS AND PUTS permit the holder to sell securities subject to the
standby commitment or put 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.
TOTAL RETURN generally refers to annual return on an investment, including
appreciation and income.
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 U.S. 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
Bishop Street Funds 31
<PAGE>
Glossary
- -------------------------------------------
rates which are not fixed, but which vary with changes in specified market rates
or indices.
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.
YIELD refers to the return on an investor's capital investment, which takes into
account interest payments, purchase price, maturity and other factors.
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.
32 Bishop Street Funds
<PAGE>
<TABLE>
<CAPTION>
BISHOP STREET FUNDS ORGANIZATIONAL OVERVIEW
<S> <C>
INVESTMENT ADVISER First Hawaiian Bank
999 Bishop Street
Honolulu, Hawaii 96813
DISTRIBUTOR SEI Investments Distribution Co.
Oaks, Pennsylvania 19456
ADMINISTRATOR SEI Investments Mutual Fund
Services
Oaks, Pennsylvania 19456
TRANSFER AGENT DST Systems, Inc.
330 W. 9th 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
NOVEMBER , 1998
This Statement of Additional Information is not a prospectus. It is intended
to provide additional information regarding the activities and operations of the
Bishop Street Funds (the "Trust"). Please read this in conjunction with the
Trust's prospectus dated November , 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-5
The Adviser............................................................................................... S-5
The Administrator......................................................................................... S-6
The Distributor........................................................................................... S-7
Trustees and Officers of the Trust........................................................................ S-7
Reporting................................................................................................. S-8
Performance............................................................................................... S-8
Purchase and Redemption of Shares......................................................................... S-9
Determination of Net Asset Value.......................................................................... S-10
Taxes..................................................................................................... S-10
Fund Transactions......................................................................................... S-12
Description of Shares..................................................................................... S-13
Limitation of Trustees' Liability......................................................................... S-14
Shareholder Liability..................................................................................... S-14
Year 2000................................................................................................. S-14
Appendix.................................................................................................. S-15
</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 Amended and Restated Agreement and Declaration of Trust
dated September 1, 1994 (the "Declaration of Trust"). The 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
Institutional Equity Fund and Institutional High Grade Income Fund (each a
"Fund," and together 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
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Company Act of 1940 (the "1940 Act"), a Fund is prohibited from acquiring the
securities of other investment companies if, as a result of such acquisition,
the Fund would own more than 3% of the total voting stock of the company;
securities issued by any one investment company represented more than 5% of the
Fund's assets; or securities (other than treasury stock) issued by all
investment companies would represent more than 10% of the total assets of the
Fund. These investment companies typically incur fees that are separate from
those fees incurred directly by the Fund. A Fund's purchase of such investment
company securities results in the layering of expenses, such that shareholders
of the Fund 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.
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.
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.
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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, including the value of the collateral, taken at fair
market value. Effectively, a Fund may loan securities up to 50% of the value of
its total assets. A Fund will continue to receive interest on the securities
lent while simultaneously earning interest on the investment of the cash
collateral in U.S. Government securities. However, a Fund will normally pay
lending fees to broker-dealers and related expenses from the interest earned on
invested collateral. There may be risks of delay in receiving additional
collateral or risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail financially.
However, loans are made only to borrowers deemed by the Adviser to be of good
standing and when, in the judgment of the Adviser, the consideration which can
be earned currently from such securities loans justifies the attendant risk. Any
loan may be terminated by either party upon reasonable notice to the other
party.
VARIABLE AMOUNT MASTER DEMAND NOTES--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 Fund, 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.
S-4
<PAGE>
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.
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 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.
6. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts. However, each of the 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.
The foregoing percentages will apply at the time 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.
S-5
<PAGE>
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 .55% of the daily average net assets of the Institutional
High Grade Income Fund and .74% of the daily average net assets of the
Institutional Equity Fund.
THE ADMINISTRATOR
The Trust and SEI Investments Mutual Funds Services (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.
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, Armada 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, The Nevis Funds, Marquis
Funds-Registered Trademark-, Monitor Funds, Morgan Grenfell Investment Trust,
Oak Associates Funds, 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 Institutional
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-6
<PAGE>
THE DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor"), a wholly-owned
subsidiary of SEI Investments, 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.
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, their respective dates of birth,
and their principal occupations for the last five years are set forth below.
Each may have held other positions with the named companies during that period.
Unless otherwise noted, the business address of each Trustee and each Executive
Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain officers
of the Trust also serve as officers of some or all of the following: The
Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK
Funds, Armada 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, Oak Associates Funds, 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 Institutional International Trust, SEI Liquid Asset Trust, SEI Tax
Exempt Trust, STI Classic Funds, STI Classic Variable Trust, TIP Funds and TIP
Institutional Funds, each of which is an open-end management investment company
managed by SEI Investments Mutual Funds Services or its affiliates and, except
for Santa Barbara Group of Mutual Funds, Inc., distributed by SEI Investments
Distribution Co.
*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 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).
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 L.L.P.,
(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.
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<PAGE>
*WILLIAM S. RICHARDSON (DOB 12/22/19)--Trustee--3335 Loulu Street, Honolulu,
HI. Retired since 1992. Trustee, Kamehameha Schools Bishop Estate (charitable
educational trust) 1982-1992.
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. Associate, Morgan,
Lewis & Bockius LLP, 1993-1995. Associate, Ropes & Gray (law firm), 1988-1993.
KATHRYN L. STANTON (DOB 11/19/58)--Vice President and Assistant Secretary,
Deputy General Counsel--Vice President, Assistant Secretary of SEI Investments,
the Administrator and Distributor since 1994. Associate, Morgan, Lewis & Bockius
LLP (law firm) 1989-1994.
TODD CIPPERMAN (DOB 02/14/66)--Vice President and 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.
ROBERT DELLACROCE (DOB 12/17/63)--Controller and 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*.......... $ 10,500 $ 0 $0 $10,500 for services on 1
board
Philip H. Ching, Trustee*.......... $ 11,500 $ 0 $0 $11,500 for services on 1
board
Shunichi Kimura, Trustee........... $ 11,500 $ 0 $0 $11,500 for services on 1
board
Manuel R. Sylvester, Trustee....... $ 11,500 $ 0 $0 $11,500 for services on 1
board
Joyce S. Tsunoda, Trustee.......... $ 11,500 $ 0 $0 $11,500 for services on 1
board
William S. Richardson, Trustee*.... $ 11,500 $ 0 $0 $11,500 for services on 1
board
</TABLE>
- ------------------------------
* Messrs. Ching, Anderson and Richardson are Trustees who may be deemed to be
"interested" persons of the Trust as the term is defined in the Investment
Company Act of 1940.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust.
REPORTING
The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
Shareholder reports to Shareholders of record.
PERFORMANCE
YIELDS. Yields are one basis upon which investors may compare the Funds
with other funds; however, yields of other funds and other investment vehicles
may not be comparable because of the factors set forth below and differences in
the methods used in valuing portfolio instruments.
The Institutional High Grade Income Fund may advertise a 30-day yield. 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
S-8
<PAGE>
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.
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 Funds' performance may from time to time be compared to other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical
Services), financial and business publications and periodicals, to broad groups
of comparable mutual funds or to unmanaged indices which may assume investment
of dividends but generally do not reflect deductions for administrative and
management costs. The Funds may quote Morningstar, Inc., a service that ranks
mutual funds on the basis of risk-adjusted performance. The Funds may quote
Ibbotson Associates of Chicago, Illinois, which provides historical returns of
the capitals markets in the U.S. The Funds may use long term performance of
these capital markets to demonstrate general long-term risk vs. reward scenarios
and could include the value of a hypothetical investment in any of the capital
markets. The Funds may also quote financial and business publications and
periodicals as they relate to fund management, investment philosophy, and
investment techniques.
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, Thanksgiving Day, and 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
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<PAGE>
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 securities of the Institutional Equity and Institutional 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.
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
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<PAGE>
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 distribution.
Interest on indebtedness incurred by Shareholders to purchase or carry
shares of the Fund will not be deductible for federal income tax purposes to the
extent the Fund distributes exempt-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.
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 U.S. 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.
S-11
<PAGE>
FUND TRANSACTIONS
Subject to policies established by the Trustees, the Adviser is 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 may 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 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
S-12
<PAGE>
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 1934 Act 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.
DESCRIPTION OF SHARES
The 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 Declaration of Trust provides 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.
S-13
<PAGE>
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.
YEAR 2000
The Trust depends on the smooth functioning of computer systems in almost
every aspect of its business. Like other mutual funds, businesses and
individuals around the world, the Trust could be adversely affected if the
computer systems used by its service providers do not properly process dates on
and after January 1, 2000 and distinguish between the year 2000 and the year
1900. The Trust has asked its service providers whether they expect to have
their computer systems adjusted for the year 2000 transition, and received
assurances from each that its system is expected to accommodate the year 2000
without material adverse consequences to the Trust. The Trust and its
shareholders may experience losses if these assurances prove to be incorrect or
as a result of year 2000 computer difficulties experienced by issuers of
portfolio securities or third parties, such as custodians, banks, broker-dealers
or others with which the Trust does business.
S-14
<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 high degree of 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
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<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 and 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-16
<PAGE>
BISHOP STREET FUNDS
PART C: OTHER INFORMATION
POST-EFFECTIVE AMENDMENT NO. 9
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS:
(a) Financial Statements
Part A: Not Applicable
Part B: Not Applicable
(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 incorporated herein by reference
to Post-Effective Amendment No. 7 to the Registrant's Registration
Statement on Form N-1A (File No. 33-80514), as filed February 26,
1998.
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 Not Applicable
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.
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<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 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 , 1998:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- ------------------------------------------------------------------------------ -----------------
<S> <C>
Bishop Street High Grade Income Fund.......................................... 9
Bishop Street Hawaii Municipal Bond Fund...................................... 353
Bishop Street Equity Fund..................................................... 43
Bishop Street Money Market Fund............................................... 115
Bishop Street Treasury Money Market Fund...................................... 8
</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
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
Dr. Julia Ann Frohlich Blood Bank of Hawaii President
Director
Paul Mullin Ganley Estate of S.M. Damon; Carlsmith, Ball, Trustee
Director Wichman, 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
Wesley T. Park Hawaii Dental Service President and Chief
Director Executive Officer
George P. Shea, Jr. First Insurance Company of Hawaii, Ltd. Chairman, President and
Director Chief Executive
Officer (retired)
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
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION NAME OF CONNECTION WITH
WITH INVESTMENT ADVISER OTHER COMPANY OTHER COMPANY
- -------------------------------------------- -------------------------------------------- ------------------------
<S> <C> <C>
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, General Counsel
and Assistant Secretary
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 Institutional 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
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
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
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
Oak Associates Funds February 27, 1998
The Nevis Funds June 29, 1998
The Parkstone August 14, 1998
Group of Funds
</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 --
Carmen V. Romeo Director --
Mark J. Held President & Chief Operating Officer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Dennis J. McGonigle Executive Vice President --
Robert M. Silvestri Chief Financial Officer & Treasurer --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
Jack May 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
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 --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
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 --
</TABLE>
C-7
<PAGE>
<TABLE>
<CAPTION>
POSITION AND OFFICE POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
- ------------------------- ------------------------------------------------------------ ------------------------
<S> <C> <C>
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 --
Maria Rinehart 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
Lori L. White Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
</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 Investments Mutual Funds Services
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>
ITEM 31. MANAGEMENT SERVICES:
None.
C-8
<PAGE>
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. 9 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 10th day of August, 1998.
By: /s/ ROBERT A. NESHER
-----------------------------------------
PRESIDENT
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 August 10, 1998
Martin Anderson
/s/ PHILIP H. CHING
- ------------------------------ Trustee August 10 1998
Philip H. Ching
/s/ SHUNICHI KIMURA
- ------------------------------ Trustee August 10, 1998
Shunichi Kimura
/s/ WILLIAM S. RICHARDSON
- ------------------------------ Trustee August 10, 1998
William S. Richardson
/s/ MANUEL SYLVESTER
- ------------------------------ Trustee August 10, 1998
Manuel R. Sylvester
/s/ JOYCE S. TSUNODA
- ------------------------------ Trustee August 10, 1998
Joyce S. Tsunoda
/s/ ROBERT DELLACROCE
- ------------------------------ Controller and Chief August 10, 1998
Robert DellaCroce Financial Officer
/s/ ROBERT A. NESHER
- ------------------------------ President August 10, 1998
Robert A. Nesher
<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, incorporated herein by reference to Post-Effective Amendment
No. 7 to the Registrant's Registration Statement on Form N-1A (File No. 33-80514), as filed
on February 26, 1998.
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 Not Applicable
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.
</TABLE>
