BISHOP STREET FUNDS, 485APOS, 1999-04-13

BISHOP STREET FUNDS
485APOS, 1999-04-13

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 13, 1999

File No. 811-8572
File No. 33-80514

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|

POST-EFFECTIVE AMENDMENT NO. 11 |X|
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
AMENDMENT NO. 12 |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 1-888-462-5386

KEVIN P. ROBINS
C/O SEI INVESTMENTS COMPANY
OAKS, PENNSYLVANIA 19456
(NAME AND ADDRESS OF AGENT FOR SERVICE)

Copies to:
RICHARD W. GRANT, ESQUIRE
JOHN H. GRADY, JR., ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP
1701 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103

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

|_| immediately upon filing pursuant to paragraph (b)
|_| on [date] pursuant to paragraph (b)
|X| 60 days after filing pursuant to paragraph (a)
|_| 75 days after filing pursuant to paragraph (a)
|_| on [date] pursuant to paragraph (a) of Rule 485.

BISHOP STREET FUNDS
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BISHOP STREET FUNDS

CLASS A SHARES

PROSPECTUS

June 14, 1999

EQUITY FUND
HIGH GRADE INCOME FUND
HAWAII MUNICIPAL BOND FUND

Investment Adviser: FIRST HAWAIIAN BANK

The Securities and Exchange Commission has not approved any Fund shares or
determined whether this prospectus is accurate or complete.
It is a crime for anyone to tell you otherwise.

Page 1 of 31
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HOW TO READ THIS PROSPECTUS

The Bishop Street Funds is a mutual fund family that offers different classes of
shares in separate investment portfolios (Funds). The Funds have individual
investment goals and strategies. Please read this prospectus and keep it for
future reference.

This prospectus has been arranged into different sections so that you can easily
review this important information. On the next page, there is some general
information you should know about the Funds.

If you would like more detailed information about the Funds, please see:

Page
EQUITY FUND XXX
HIGH GRADE INCOME FUND XXX
HAWAII MUNICIPAL BOND FUND XXX
MORE INFORMATION ABOUT RISK XXX
EACH FUND'S OTHER INVESTMENTS XXX
INVESTMENT ADVISER AND INVESTMENT TEAM XXX
THE BOARD OF TRUSTEES XXX
PURCHASING, SELLING AND EXCHANGING FUND SHARES XXX
DIVIDENDS, DISTRIBUTIONS AND TAXES XXX
FINANCIAL HIGHLIGHTS XXX
HOW TO OBTAIN MORE INFORMATION ABOUT THE
BISHOP STREET FUNDS Back Cover

Page 2 of 31
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Introduction

Each Fund is a mutual fund. A mutual fund pools shareholders' money and, using
professional investment managers, invests it in securities.

Each Fund has its own investment goal and strategies for reaching that goal. The
investment manager invests Fund assets in a way that they believe will help the
Fund achieve its goal. Still, investing in each Fund involves risk and there is
no guarantee that a Fund will achieve its goal. An investment manager's
judgments about the markets, the economy, or companies may not anticipate actual
market movements, economic conditions or company performance, and these
judgments may affect the return on your investment. In fact, no matter how good
a job an investment manager does, you could lose money on your investment in the
Fund, just as you could with other investments. A Fund share is not a bank
deposit and it is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any government agency.

The value of your investment in a Fund is based on the market value of the
securities a Fund holds. These prices change daily due to economic and other
events that affect particular companies and other issuers. These price
movements, sometimes called volatility, may be greater or lesser depending on
the types of securities a Fund owns and the markets in which they trade. The
effect on a Fund of a change in the value of a single security will depend on
how widely a Fund diversifies its holdings.

Page 3 of 31
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EQUITY FUND

Fund Summary

Investment Goal Long-term capital appreciation

Investment Focus Common stocks and other equity securities

Share Price Volatility High

Principal Investment Strategy Investing in a diversified portfolio of U.S.
equity securities

Investor Profile Investors seeking long-term capital
appreciation, who are willing to accept the
risk of share price volatility

Investment Strategy of the Equity Fund

The Equity Fund primarily invests in common stocks and other equity securities
that the Adviser believes have potential for capital appreciation. Such
instruments include convertible securities. Generally, the Fund invests in
securities of companies with market capitalizations in excess of $500 million.
The Fund seeks to be diversified across issuers and major economic sectors.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.

Principal Risks of Investing in the Equity Fund

Since it purchases equity securities, the Fund is subject to the risk that stock
prices will fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate drastically from day-to-day. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.

The Fund's investment approach, with its emphasis on common stocks and other
equity securities, is expected to provide returns consistent with the
performance of the U.S. stock market, as generally measured by the U.S. stock
market indices such as the S&P 500. Because the Adviser does not employ a
specific "growth" or "value" discipline, the Fund can be expected to perform
differently than funds that employ a specific investment style.

Page 4 of 31
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The Fund is also subject to the risk that its market segment, equity securities,
may underperform other fixed income market segments or the fixed income security
portion of the market as a whole.

Performance Information+

The bar chart and the performance table below illustrate the risks and
volatility of an investment in the Fund. Of course, the Fund's past performance
does not necessarily indicate how the Fund will perform in the future.

This bar chart shows changes in the performance of the Fund's Shares from year
to year.

1998 33.05%

Best Quarter Worst Quarter
23.34% (9.11%)
(12/31/98) (9/30/98)

This table compares the Fund's average annual total returns for the period
ending December 31, 1998 to those of the S&P 500 Composite Index and the
Consumer Price Index.

1 Year Since Inception
--------------------------------------------------------------------------
Equity Fund 33.05% 28.47%*
S&P 500 Composite Index 28.60% 28.38%**
Consumer Price Index 1.61% 1.73%**

*Since January 31, 1997
**Since January 31, 1997

What is an Index?

An index measures the market prices of a specific group of securities in a
particular market or securities in a market sector. You cannot invest directly
in an index. Unlike a mutual fund, an index does not have an investment adviser
and does not pay any commissions or expenses. If an index had expenses, its
performance would be lower.

+The Performance Information provided reflects the returns of an existing class
of shares not offered in this prospectus. The existing class and Class A Shares
will have substantially similar annual returns because the shares are invested
in the same portfolio of securities. The existing class of shares does not
currently charge sales expenses and therefore the annual returns of the class
will differ only to the extent that they do not have the same expenses.

Page 5 of 31
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Fund Fees and Expenses

This table describes the shareholder fees that you may pay if you purchase or
sell Fund shares. You would pay these fees directly from your investment in the
Fund.

Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of
offering price) 5.75%

Maximum Deferred Sales Charge (Load) (as a percentage of net asset value) None

Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other
Distributions (as a percentage of offering price) None

Redemption Fee (as a percentage of amount redeemed, if applicable) None

Exchange Fee None

Maximum Account Fee None

Every mutual fund has operating expenses to pay for services such as
professional advisory, shareholder, administration and custody services and
other costs of doing business. This table describes the highest fees and
expenses that you may pay indirectly if you hold shares of the Fund.

Annual Fund Operating Expenses

Management Fees 0.74%
Distribution and Service Fees 0.25%
Other Expenses 0.58%
--------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.57%

The Fund's total actual annual fund operating expenses are less than the amount
shown above because the Adviser is waiving a portion of the fees in order to
keep total operating expenses at a specified level. The Adviser may discontinue
all or part of these waivers at any time. With these fee waivers, the Fund's
actual total operating expenses are as follows:

Equity Fund 1.25%

For more information about these fees, see "Investment Adviser and Investment
Team" and "Dividends, Distributions and Taxes."

Example

Page 6 of 31
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This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Fund for the time periods indicated and that you sell your
shares at the end of each period.

The Example also assumes that each year your investment has a 5% return and Fund
expenses remain the same. Although your actual costs and returns might be
different, your approximate costs of investing $10,000 in the Fund would be:

1 Year 3 Years 5 Years 10 Years
----------------------------------------------
$726 $1,042 $1,381 $2,335

Page 7 of 31
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HIGH GRADE INCOME FUND

Fund Summary

Investment Goal High total return

Investment Focus Corporate and U.S. Government debt
obligations

Share Price Volatility Medium

Principal Investment Strategy Investing in high grade U.S. debt
obligations of domestic corporations and the
U.S. Government

Investor Profile Conservative investors seeking income, who
are willing to accept some degree of share
price volatility

Investment Strategy of the High Grade Income Fund

The High Grade Income Fund primarily invests in high grade debt obligations of
domestic corporations and the U.S. Government. High grade debt obligations are
those rated in the two highest ratings categories by either S&P or other
nationally recognized statistical rating organizations, and include
mortgage-backed and variable and floating rate instruments.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.

Principal Risks of Investing in the High Grade Income Fund

The prices of the Fund's fixed income securities respond to economic
developments, particularly interest rate changes, as well as to perceptions
about the creditworthiness of individual issuers, including governments.
Generally, the Fund's fixed income securities will decrease in value if interest
rates rise and vice versa, and the volatility of lower rated securities is even
greater than that of higher rated securities. Also, longer-term securities are
generally more volatile, so the average maturity or duration of these securities
affects risk.

The Fund is also subject to the risk that its market segment, fixed income
securities, may underperform other equity market segments or the equity security
portion of the market as a whole.

The mortgages underlying mortgage-backed securities may be paid off early, which
makes it difficult to determine their actual maturity and therefore calculate
how they will respond to changes in interest rates. The Fund may have to
reinvest prepaid amounts at lower interest rates. This risk of prepayment is an
additional risk of mortgage-backed securities.

Page 8 of 31
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Although the Fund's U.S. Government securities are considered to be among the
safest investments, they are not guaranteed against price movements due to
changing interest rates. Obligations issued by some U.S. Government agencies are
backed by the U.S. Treasury, while others are backed solely by the ability of
the agency to borrow from the U.S. Treasury or by the agency's own resources.

The Fund's investment approach, with its emphasis on high quality corporate and
U.S. Government obligations of medium maturity, is expected to provide total
return through income and some capital appreciation with moderate risk to
principal and less sensitivity to changing interest rates than longer term or
lower quality bond funds.

Performance Information+

This bar chart shows changes in the performance of the Fund's Shares from year
to year.

1998 9.09%

Best Quarter Worst Quarter
5.42% (0.20%)
(9/30/98) (12/31/98)

This table compares the Fund's average annual total returns for the period
ending December 31,1998 to those of the Lehman Brothers Government/Corporate
Bond Index and Consumer Price Index.

1 Year Since Inception
--------------------------------------------------------------------------
High Grade Income Fund 9.09% 8.90%*
Lehman Brothers Government/
Corporate Bond Index 9.47% 9.98%**
Consumer Price Index 1.61% 1.73%**

*Since January 31, 1997
**Since January 31, 1997

What is an Index?

Page 9 of 31
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Fund Fees and Expenses

This table describes the shareholder fees that you may pay if you purchase or
sell Fund shares. You would pay these fees directly from your investment in the
Fund.

Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of
offering price) 4.75%

Maximum Deferred Sales Charge (Load) (as a percentage of net
asset value) None

Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other
Distributions (as a percentage of offering price) None

Redemption Fee (as a percentage of amount redeemed, if applicable) None

Exchange Fee None

Maximum Account Fee None

Page 10 of 31
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Annual Fund Operating Expenses

Management Fees 0.55%
Distribution and Service Fees 0.25%
Other Expenses 0.66%
--------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.46%

The Fund's total actual annual operating expenses are less than the amount
shown above because the Adviser is waiving a portion of the fees in order to
keep total operating expenses at a specified level. The Adviser may discontinue
all or part of these waivers at any time. With these fee waivers, the Fund's
actual total operating expenses are as follows:

High Grade Income Fund 1.05%

For more information about these fees, see "Investment Adviser and Investment
Team" and "Dividends, Distributions and Taxes."

Example

1 Year 3 Years 5 Years 10 Years
----------------------------------------------
$617 $915 $1,235 $2,138

Page 11 of 31
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HAWAII MUNICIPAL BOND FUND

Fund Summary

Investment Goal High current income exempt from federal and
Hawaii income taxes

Investment Focus Hawaii municipal bonds

Share Price Volatility Medium

Principal Investment Strategy Investing in a focused portfolio of
investment grade municipal bonds

Investor Profile Investors seeking tax-exempt current income
who are willing to accept the risk of
investing in a portfolio of municipal
securities

Investment Strategy of the Hawaii Municipal Bond Fund

The Hawaii Municipal Bond Fund primarily invests in investment grade municipal
bonds, the interest from which is exempt from federal and Hawaii state income
taxes. While the Adviser attempts to maximize the portion of the Fund's assets
invested in Hawaii issues, the Fund may also invest in the municipal bonds
issued by other U.S. states, territories and possessions. There is no
restriction upon the amount of the Fund's assets that may be invested in
obligations that pay income subject to the federal alternative minimum tax.
There are no limits on the average maturity of the Fund's portfolio. The Adviser
will use its judgment to invest in securities that will provide a high level of
current income in light of current market conditions.

Due to its investment strategy, the Fund may buy and sell securities frequently.
This may result in higher transaction costs and additional capital gains tax
liabilities.

Principal Risks of Investing in the Hawaii Municipal Bond Fund

The Fund is also subject to the risk that its market segment, fixed income
securities, may underperform other equity market segments or the equity security
portion of the market as a whole.

Page 12 of 31
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There may be economic or political changes that impact the ability of municipal
issuers to repay principal and to make interest payments on municipal
securities. Changes in the financial condition or credit rating of municipal
issuers also may adversely affect the value of the Fund's securities.

The Fund's concentration of investments in securities of issuers located in a
single state subjects the Fund to economic and government policies of that
state.

The Fund is non-diversified, which means that it may invest in the securities of
relatively few issuers. As a result, the Fund may be more susceptible to a
single adverse economic or political/regulatory occurrence affecting one or more
of these issuers, and may experience increased volatility due to its investments
in those securities.

The Fund's investment approach, with its emphasis on investment grade municipal
bonds, is expected to provide current tax-exempt income with moderate risk to
principal. The Fund is not expected to perform as well as a comparable taxable
bond fund, but may do as well or better on an after-tax basis.

Performance Information+

This bar chart shows changes in the Fund's performance from year to year.

1996 4.21%
1997 8.52%
1998 5.84%

Best Quarter Worst Quarter
3.39% (1.68%)
(6/30/97) (3/31/96)

This table compares the Fund's average annual total returns for the period
ending December 31, 1998 to those of the Lehman Brothers Municipal Bond Index
and Consumer Price Index.

1 Year 3 Years Since Inception
--------------------------------------------------------------------------

Hawaii Municipal Bond Fund 5.84% 6.18% 7.22%*
Lehman Brothers Municipal
Bond Index 6.48% 6.69% 8.09%**

Consumer Price Index 1.61% 2.22% 2.24%**

*Since February 15, 1995
**Since February 28, 1995

What is an Index?

Page 13 of 31
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Fund Fees and Expenses

This table describes the shareholder fees that you may pay if you purchase or
sell Fund shares. You would pay these fees directly from your investment in the
Fund.

Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of
offering price) 4.25%

Maximum Deferred Sales Charge (Load) (as a percentage of net asset value) None

Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other
Distributions (as a percentage of offering price) None

Redemption Fee (as a percentage of amount redeemed, if applicable) None

Exchange Fee None

Maximum Account Fee None

Annual Fund Operating Expenses

Management Fees 0.35%
Distribution and Service Fees 0.25%
Other Expenses 0.66%
--------------------------------------------------------------------------
Total Annual Fund Operating Expenses 1.26%

Hawaii Municipal Bond Fund 0.66%

Page 14 of 31
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For more information about these fees, see "Investment Adviser and Investment
Team" and "Dividends, Distributions and Taxes."

Example

1 Year 3 Years 5 Years 10 Years
----------------------------------------------
$597 $856 $1,134 $1,925

Page 15 of 31
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More Information About Risk

Management Risk - The risk that a All Funds
strategy used by the fund's management
may fail to produce the intended result

Equity Risk - Equity securities include Equity Fund
public and privately issued equity
securities, common and preferred stocks,
warrants, rights to subscribe to common
stock and convertible securities, as
well as instruments that attempt to
track the price movement of equity
indices. Investments in equity
securities and equity derivatives in
general are subject to market risks that
may cause their prices to fluctuate over
time. The value of securities
convertible into equity securities, such
as warrants or convertible debt, is also
affected by prevailing interest rates,
the credit quality of the issuer and any
call provision. Fluctuations in the
value of equity securities in which a
mutual fund invests will cause a fund's
net asset value to fluctuate. An
investment in a portfolio of equity
securities may be more suitable for
long-term investors who can bear the
risk of these share price fluctuations.

Fixed Income Risk - The market value of High Grade Income Fund
fixed income investments changes in
response to interest rate changes and Hawaii Municipal Bond Fund
other factors. During periods of falling
interest rates, the values of
outstanding fixed income securities
generally rise. Moreover, while
securities with longer maturities tend
to produce higher yields, the prices of
longer maturity securities are also
subject to greater market fluctuations
as a result of changes in interest
rates. In addition to these fundamental
risks, different types of fixed income
securities may be subject to the
following additional risks:

Call Risk - During periods of High Grade Income Fund
falling interest rates, certain
debt obligations with high Hawaii Municipal Bond Fund
interest rates may 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
at lower interest rates.

Page 16 of 31
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Credit Risk - The possibility that High Grade Income Fund
an issuer will be unable to make
timely payments of either Hawaii Municipal Bond Fund
principal or interest. Since the
Fund purchases securities backed
by credit enhancements from banks
and other financial institutions,
changes in the credit ratings of
these institutions could cause the
Fund to lose money and may affect
the Fund's share price.

Event Risk - Securities may suffer High Grade Income Fund
declines in credit quality and market
value due to issuer restructurings or Hawaii Municipal Bond Fund
other factors. The overall risk of these
declines should be reduced because of
the Fund's multiple holdings.

Municipal Issuer Risk - There may be Hawaii Municipal Bond Fund
economic or political changes that
impact the ability of municipal issuers
to repay principal and to make interest
payments on municipal securities.
Changes to the financial condition or
credit rating of municipal issuers may
also adversely affect the value of the
Fund's municipal securities.
Constitutional or legislative limits on
borrowing by municipal issuers may
result in reduced supplies of municipal
securities. Moreover, certain municipal
securities are backed only by a
municipal issuer's ability to levy and
collect taxes.

Mortgage-Backed Securities - High Grade Income Fund
Mortgage-backed securities are fixed
income securities representing an
interest in a pool of underlying
mortgage loans. They are sensitive to
changes in interest rates, but may
respond to these changes differently
from other fixed income securities due
to the possibility of prepayment of the
underlying mortgage loans. As a result,
it may not be possible to determine in
advance the actual maturity date or
average life of a mortgage-backed
security. Rising interest rates tend to
discourage refinancings, with the result
that the average life and volatility of
the security will increase, exacerbating
its decrease in market price. When
interest rates fall, however,
mortgage-backed securities may not gain
as much in market value because of the
expectation of additional mortgage
prepayments that must be reinvested at
lower interest rates. Prepayment risk
may make it difficult to calculate the
average maturity of a portfolio of
mortgage-backed securities and,
therefore, to assess the volatility risk
of that portfolio.

Page 17 of 31
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Regional Risk - To the extent that a Hawaii Municipal Bond Fund
Fund's investments are concentrated in a
specific geographic region, a Fund may
be subject to the political and other
developments affecting that region.
Regional economies are often closely
interrelated, and political and economic
developments affecting one region,
country or state often affect other
regions, countries or states, thus
subjecting a Fund to additional risks.

Year 2000 Risk - The Funds depends on All Funds
the smooth functioning of computer
systems in almost every aspect of their
business. Like other mutual funds,
businesses and individuals around the
world, the Funds 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 Funds have
asked their service providers whether
they expect to have their computer
systems adjusted for the year 2000
transition, and are seeking assurances
from each service provider that they are
devoting significant resources to
prevent material adverse consequences to
the Funds. While it is likely that such
assurances will be obtained, the Funds
and their 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
Funds do business.

Page 18 of 31
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The Fund's Other Investments

In addition to the investments and strategies described in this prospectus, each
Fund also may invest in other securities, use other strategies and engage in
other investment practices. These investments and strategies, as well as those
described in this prospectus, are described in detail in our Statement of
Additional Information. Of course, the Fund cannot guarantee that any Fund will
achieve its investment goal.

The investments and strategies described in this prospectus are those that we
use under normal conditions. During unusual economic or market conditions, or
for temporary defensive or liquidity purposes, each Fund may invest up to 100%
of its assets in taxable money market instruments, repurchase agreements and
short-term obligations. When a Fund is investing for temporary defensive
purposes, it is not pursuing its investment goal.

Investment Adviser and Investment Team

Investment Adviser

The Investment Adviser makes investment decisions for the Funds and continuously
reviews, supervises and administers its Fund's respective investment program.
The Board of Trustees supervises the Adviser and establishes policies that the
Adviser must follow in its management activities.

First Hawaiian Bank, serves as the Adviser to the Equity Fund, High Grade Income
Fund and Hawaii Municipal Bond Fund. As of December 31, 1998, First Hawaiian
Bank had approximately $7.25 billion in assets under management.

Investment Team

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 Equity and 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.

Louis M. Levitas has managed the Hawaii Municipal Bond Fund for the Adviser
since its inception in February 1995. He manages the Fund pursuant to an
agreement between the Adviser and Bank of the West. Mr. Levitas has been a
municipal bond specialist since 1970.

Page 19 of 31
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The 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.

The Trustees of the Trust are as follows:

NAME BUSINESS HISTORY
- ---- ----------------

Martin Anderson Attorney, Goodsill Anderson Quinn & Stifel since
1951

Charles E. Carlbom President and CEO, Western Family Food, Inc. -
Western Family Holding Inc. (1982-1997); President
and CEO, United Grocers, Inc. since 1997

Philip H. Ching Vice Chairman, First Hawaiian Bank (1968-1996)

James L. Huffman Dean and Professor, Lewis & Clark Law School since
1973

Shunichi Kimura Regent, University of Hawaii (1995-1996); Judge,
State of Hawaii Judiciary (1974-1994); Mediator,
Mediation Specialists of Hawaii (1994-1998)

Robert A. Nesher Director and Executive Vice President of the
Administrator and the Distributor (1981-1994)

William S. Richardson Trustee, Kamehameha Schools Bishop Estate
(1982-1992)

Peter F. Sansevero Regional Director of the Northwestern Region and
First Vice President, Merrill Lynch (1958-1997)

Manual R. Sylvester Managing Partner, Coopers & Lybrand
L.L.P.(1978-1992); Executive Partner, Coopers &
Lybrand L.L.P. (1992)

Joyce S. Tsunoda Chancellor, Hawaii Community College since 1983;
Senior Vice President, University of Hawaii System
since 1989

Page 20 of 31
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Purchasing, Selling and Exchanging Fund Shares

How to Purchase Fund Shares

You may purchase shares by:

o Mail;
o Telephone;
o Wire; or
o Direct Deposit.

You may purchase shares on any day that the New York Stock Exchange is open for
business (a Business Day). (Shares cannot be purchased by Federal Reserve Wire
on days when either the New York Stock Exchange or the Federal Reserve is
closed).

To purchase shares directly from us, please call 1-800-262-9565. Write your
check, payable in U.S. dollars, to the name of the Fund. We cannot accept
third-party checks, credit cards, credit card checks or cash.

You may also purchase shares through a representative of certain correspondent
banks of First Hawaiian Bank, or other financial institutions that have executed
dealer agreements.

A Fund may reject any purchase order if it is determined that accepting the
order would not be in the best interests of the Fund or its shareholders.

The price per share (the offering price) will be the net asset value per share
(NAV) next determined after a Fund receives your purchase order

We calculate each bond and equity fund's NAV once each Business Day at 4:00
p.m., Eastern time. So, for you to be eligible to receive dividends declared on
the day you submit your purchase order, generally we must receive your order
before 4:00 p.m., Eastern time.

Certain investors who deal with a financial institution or financial
intermediary will have to follow the institution's or intermediary's procedures
for transacting with the Fund. If you purchase, sell or exchange Fund shares
through a financial institution (rather than directly from us), you may have to
transmit your purchase, sale and exchange requests to your financial institution
at an earlier time for your transaction to become effective that day. This
allows the financial institution time to process your request and transmit it to
us. For more information about how to purchase, sell or exchange Fund shares
through your financial institution, you should contact your financial
institution directly.

How We Calculate NAV

NAV for one Fund share is the value of that share's portion of all of the assets
in the Fund.

In calculating NAV, a Fund generally values its investment portfolio at market
price. If market prices are unavailable or a Fund thinks that they are
unreliable, fair value prices may be determined in good faith using methods
approved by the Board of Trustees.

Page 21 of 31
<PAGE>

Some Funds hold securities that are listed on foreign exchanges. These
securities may trade on weekends or other days when the Funds do not calculate
NAV. As a result, the NAV of these Funds' shares may change on days when you
cannot purchase or sell Fund shares.

Minimum Purchases

Automatic Investment Plan

If you have a checking or savings account with a First Hawaiian Bank affiliate
bank, you may purchase shares automatically through regular deductions from your
account. With a $1,000 minimum initial investment, ($500 for those investing in
retirement plans; $100 for officers, directors and employees of First Hawaiian
Bank or its affiliates who have arranged to purchase shares through the
Automatic Investment Plan), you may begin regularly scheduled investments from
$50.

The Distributor may, from time to time in its sole discretion, institute one or
more promotional incentive programs for dealers, which will be paid for by the
Distributor from any fees it receives or from any other source available to it.
Under any such program, the Distributor may provide incentives, in the form of
cash or other compensation, including merchandise, airline vouchers, trips and
vacation packages, to dealers selling shares of the Funds.

Page 22 of 31
<PAGE>

Sales Charges

Front-End Sales Charges - Class A Shares

The offering price of Class A Shares is the NAV next calculated after a Fund
receives your request, plus the front-end sales load.

The amount of any front-end sales charge included in your offering price varies,
depending on the amount of your investment:

Equity Fund

<TABLE>
<CAPTION>
Your Sales Charge as a Your Sales Charges as a
If Your Investment is: Percentage of Offering Price Percentage of Your Net Investment
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 5.75% 6.10%
$50,000 but less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 3.50% 3.63%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $1,000,000 2.00% 2.04%
$1,000,000 and over* 0.00% 0.00%
</TABLE>

* Even though you do not pay a sales charge on purchases of $1,000,000 or more,
the Distributor may pay dealers a 1% commission for these transactions.

High Grade Income Fund

<TABLE>
<CAPTION>
Your Sales Charge as a Your Sales Charges as a
If Your Investment is: Percentage of Offering Price Percentage of Your Net Investment
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 4.75% 4.99%
$50,000 but less than $100,000 4.50% 4.71%
$100,000 but less than $250,000 3.50% 3.63%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $1,000,000 2.00% 2.04%
$1,000,000 and over* 0.00% 0.00%
</TABLE>

* Even though you do not pay a sales charge on purchases of $1,000,000 or more,
the Distributor may pay dealers a 1% commission for these transactions.

Hawaii Municipal Bond Fund

<TABLE>
<CAPTION>
Your Sales Charge as a Your Sales Charges as a
If Your Investment is: Percentage of Offering Price Percentage of Your Net Investment
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 4.25% 4.44%
$50,000 but less than $100,000 4.00% 4.17%
$100,000 but less than $250,000 3.50% 3.63%
$250,000 but less than $500,000 2.50% 2.56%
$500,000 but less than $1,000,000 2.00% 2.04%
$1,000,000 and over* 0.00% 0.00%
</TABLE>

* Even though you do not pay a sales charge on purchases of $1,000,000 or more,
the Distributor may pay dealers a 1% commission for these transactions.

Page 23 of 31
<PAGE>

Waiver of Front-End Sales Charge -- Class A Shares

The front-end sales charge will be waived on Class A Shares purchased:

o by reinvestment of dividends and distributions;
o by persons repurchasing shares they redeemed within the last 30 days (see
"Repurchase of Class A Shares");
o by investors who purchase shares with redemption proceeds (but only to the
extent of such redemption proceeds) from another investment company within
90 days of such redemption, provided that, the investors paid either a
front-end or contingent deferred sales charge on the original shares
redeemed;
o by employees, and members of their immediate family, of First Hawaiian
Bank and its affiliates;
o by employees and retirees of the Administrator or Distributor;
o by Trustees and officers of Bishop Street Funds;
o by persons reinvesting distributions from qualified employee benefit
retirement plans and rollovers from individual retirement accounts
("IRAs") previously with First Hawaiian Bank;
o by persons investing an amount less than or equal to the value of an
account distribution when an account for which a bank affiliated with
First Hawaiian Bank acted in a fiduciary, administrative, custodial or
investment advisory capacity is closed; or
o through dealers, retirement plans, asset allocation programs and financial
institutions that, under their dealer agreements with the Distributor or
otherwise, do not receive any portion of the front-end sales charge.

Repurchase of Class A Shares

You may repurchase any amount of Class A Shares of any Fund at NAV (without the
normal front-end sales charge), up to the limit of the value of any amount of
Class A Shares (other than those which were purchased with reinvested dividends
and distributions) that you redeemed within the past 30 days. In effect, this
allows you to reacquire shares that you may have had to redeem, without
re-paying the front-end sales charge. To exercise this privilege, the Fund must
receive your purchase order within 30 days of your redemption. In addition, you
must notify the Fund when you send in your purchase order that you are
repurchasing shares.

Reduced Sales Charges -- Class A Shares

Rights of Accumulation. In calculating the appropriate sales charge rate, this
right allows you to add the value of the Class A Shares you already own to the
amount that you are currently purchasing. The Fund will combine the value of
your current purchases with the current value of any Class A Shares you
purchased previously for (i) your account, (ii) your spouse's account, (iii) a
joint account with your spouse, or (iv) your minor children's trust or custodial
accounts. A fiduciary purchasing shares for the same fiduciary account, trust or
estate may also use this right of accumulation. The Fund will only consider the
value of Class A Shares purchased previously that were sold subject to a sales
charge. To be entitled to a reduced sales charge based on shares already owned,
you must ask us for the reduction at the time of purchase. You must provide the
Fund with your account number(s) and, if applicable, the account numbers for

Page 24 of 31
<PAGE>

your spouse and/or children (and provide the children's ages). The Fund may
amend or terminate this right of accumulation at any time.

Letter of Intent. You may purchase Class A Shares at the sales charge rate
applicable to the total amount of the purchases you intend to make over a
13-month period. In other words, a Letter of Intent allows you to purchase Class
A Shares of a Fund over a 13-month period and receive the same sales charge as
if you had purchased all the shares at the same time. The Fund will only
consider the value of Class A Shares sold subject to a sales charge. As a
result, Class A Shares purchased with dividends or distributions will not be
included in the calculation. To be entitled to a reduced sales charge based on
shares you intend to purchase over the 13-month period, you must send the Fund a
Letter of Intent. In calculating the total amount of purchases, you may include
in your letter purchases made up to 90 days before the date of the Letter. The
13-month period begins on the date of the first purchase, including those
purchases made in the 90-day period before the date of the Letter. Please note
that the purchase price of these prior purchases will not be adjusted.

You are not legally bound by the terms of your Letter of Intent to purchase the
amount of your shares stated in the Letter. The Letter does, however, authorize
the Fund to hold in escrow ___% of the total amount you intend to purchase. If
you do not complete the total intended purchase at the end of the 13-month
period, the Fund's transfer agent will redeem the necessary portion of the
escrowed shares to make up the difference between the reduced rate sales charge
(based on the amount you intended to purchase) and the sales charge that would
normally apply (based on the actual amount you purchased).

Combined Purchase/Quantity Discount Privilege. When calculating the appropriate
sales charge rate, the Fund will combine same day purchases of Class A Shares
(that are subject to a sales charge) made by you, your spouse and your minor
children (under age 21). This combination also applies to Class A Shares you
purchase with a Letter of Intent.

General Information About Sales Charges

Your securities dealer is paid a commission when you buy your shares and is paid
a servicing fee as long as you hold your shares. Your securities dealer or
servicing agent may receive different levels of compensation depending on which
Class of shares you buy.

From time to time, some financial institutions, including brokerage firms
affiliated with the Adviser, may be reallowed up to the entire sales charge.
Firms that receive a reallowance of the entire sales charge may be considered
underwriters for the purpose of federal securities law.

The Distributor may, from time to time in its sole discretion, institute one or
more promotional incentive programs for dealers, which will be paid for by the
Distributor from any sales charge it receives or from any other source available
to it. Under any such program, the Distributor may provide incentives, in the
form of cash or other compensation, including merchandise, airline vouchers,
trips and vacation packages, to dealers selling shares of the Fund.

Page 25 of 31
<PAGE>

Selling Fund Shares

How to Sell Your Fund Shares

If you own your shares directly, you may sell (sometimes called "redeem") your
shares on any Business Day by contacting a Fund directly by mail or telephone at
1-800-262-9565.

If you would like to sell $5,000 or more of your shares, please notify the Fund
in writing and include a signature guarantee by a bank or other financial
institution (a notarized signature is not sufficient).

The sale price of each share will be the next NAV determined after the Fund
receives your request.

Systematic Withdrawal Plan

If you have at least $10,000 in the Equity Fund, High Grade Income Fund or
Hawaii Municipal Bond Fund in your account, you may use the systematic
withdrawal plan. Under the plan you may arrange monthly, quarterly, semi-annual
or annual automatic withdrawals of at least $50 from any Fund. The proceeds of
each withdrawal will be mailed to you by check or electronically transferred to
your bank account.

Receiving Your Money

Normally, we will send your sale proceeds within seven Business Days after we
receive your request. Your proceeds can be wired to your bank account if your
redemption proceeds are in excess of $500 (subject to a $15 fee) or sent to you
by check. If you recently purchased your shares by check, redemption proceeds
may not be available until your check has cleared (which may take up to 15 days
from your date of purchase).

Redemptions in Kind

The Fund generally pays sale (redemption) proceeds in cash. However, under
unusual conditions that make the payment of cash unwise (and for the protection
of the Fund's remaining shareholders) we might pay all or part of your
redemption proceeds in liquid securities with a market value equal to the
redemption price (redemption in kind). It is highly unlikely that your shares
would ever be redeemed in kind, but if they were you would probably have to pay
transaction costs to sell the securities distributed to you, as well as taxes on
any capital gains from the sale as with any redemption.

Involuntary Sales of Your Shares

If your account balance drops below $1,000 ($500 for officers, directors and
employees of First Hawaiian Bank or its affiliates, and those investing in
retirement plans; $100 for officers,

Page 26 of 31
<PAGE>

directors and employees of First Hawaiian Bank, or its affiliates who have
arranged to purchase shares through the Automatic Investment Plan) because of
redemptions you may be required to sell your shares.

But, we will always give you at least 60 days' written notice to give you time
to add to your account and avoid the sale of your shares.

Suspension of Your Right to Sell Your Shares

A Fund may suspend your right to sell your shares if the NYSE restricts trading,
the SEC declares an emergency or for other reasons. More information about this
is in our Statement of Additional Information.

Exchanging Fund Shares

How to Exchange Your Shares

You may exchange your shares on any Business Day by contacting us directly by
mail or telephone.

You may also exchange shares through your financial institution by mail or
telephone.

You will be notified before any fee is charged. If you recently purchased shares
by check, you may not be able to exchange your shares until your check has
cleared (which may take up to 15 days from your date of purchase). This exchange
privilege may be changed or canceled at any time upon 60 days' notice.

When you exchange shares, you are really selling your shares and buying other
Fund shares. So, your sale price and purchase price will be based on the NAV
next calculated after the Fund receives your exchange request.

Telephone Transactions

Purchasing, selling and exchanging Fund shares over the telephone is extremely
convenient, but not without risk. Although the Fund has certain safeguards and
procedures to confirm the identity of callers and the authenticity of
instructions, the Fund is not responsible for any losses or costs incurred by
following telephone instructions we reasonably believe to be genuine. If you or
your financial institution transact with the Fund over the telephone, you will
generally bear the risk of any loss.

Page 27 of 31
<PAGE>

Dividends, Distributions and Taxes

Each Fund distributes its income as follows:

Equity Fund Declared and paid quarterly
High Grade Income Fund Declared daily and paid monthly
Hawaii Municipal Bond Fund Declared daily and paid monthly

Each Fund makes distributions of capital gains, if any, at least annually. If
you own Fund shares on a Fund's record date, you will be entitled to receive the
distribution.

You will receive dividends and distributions in the form of additional Fund
shares unless you elect to receive payment in cash. To elect cash payment, you
must notify the Fund in writing prior to the date of the distribution. Your
election will be effective for dividends and distributions paid after the Fund
receives your written notice. To cancel your election, simply send the Fund
written notice.

Taxes

Please consult your tax adviser regarding your specific questions about federal,
state and local income taxes. Below we have summarized some important tax issues
that affect the Funds and their shareholders. This summary is based on current
tax laws, which may change.

Each Fund will distribute substantially all of its income and capital gains, if
any. The dividends and distributions you receive may be subject to federal,
state and local taxation, depending upon your tax situation. Distributions you
receive from a Fund may be taxable whether or not you reinvest them. Capital
gains distributions may be taxable at different rates depending on the length of
time a Fund holds its portfolio securities. Each sale or exchange is a taxable
event.

The Hawaii Municipal Bond Fund intends to distribute primarily federally
tax-exempt income. The Fund may invest a portion of its assets in securities
that generate taxable income for federal or state income taxes. Income exempt
from federal tax may be subject to state and local taxes. Any capital gains
distributed by the Fund may be taxable.

The Fund uses a tax management technique known as "first in, first out."

More information about taxes is in the Statement of Additional Information.

Page 28 of 31
<PAGE>

Financial Highlights

The tables that follow present performance information about each Fund. This
information is intended to help you understand each Fund's financial performance
for the past five years, or, if shorter, the period of the Fund's operations.
Some of this information reflects financial information for a single Fund share.
The total returns in the table represent the rate that you would have earned (or
lost) on an investment in a Fund, assuming you reinvested all of your dividends
and distributions. This information has been audited by __________________,
independent public accountants. Their report, along with each Fund's financial
statements, appears in the annual report that accompanies our Statement of
Additional Information. You can obtain the annual report, which contains more
performance information, at no charge by calling 1-800-262-9565.

Page 29 of 31
<PAGE>

BISHOP STREET FUNDS

Investment Adviser

First Hawaiian Bank
999 Bishop Street
Honolulu, Hawaii 96813

Distributor

SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456

Legal Counsel

Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103

More information about the Funds are available without charge through the
following:

Statement of Additional Information (SAI)

The SAI dated June 14, 1999, includes detailed information about the Bishop
Street Funds. The SAI is on file with the SEC and is incorporated by reference
into this prospectus. This means that the SAI, for legal purposes, is a part of
this prospectus.

Annual and Semi-Annual Reports

These reports list each Fund's holdings and contain information from the Fund's
managers about strategies, and recent market conditions and trends. The reports
also contain detailed financial information about the Funds.

To Obtain More Information:

By Telephone: Call 1-800-262-9565

By Mail: Write to the Funds
Bishop Street Funds
c/o SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456

Page 30 of 31
<PAGE>

From the SEC: You can also obtain the SAI or the Annual and Semi-annual reports,
as well as other information about the Bishop Street Funds, from the SEC's
website ("http://www.sec.gov"). You may review and copy documents at the SEC
Public Reference Room in Washington, DC (for information call 1-800-SEC-0330).
You may request documents by mail from the SEC, upon payment of a duplicating
fee, by writing to: Securities and Exchange Commission, Public Reference
Section, Washington, DC 20549-6009. The Fund's Investment Company Act
registration number is 811-08572.

Page 31 of 31
<PAGE>

BISHOP STREET FUNDS
A No-Load Mutual Fund Family Advised by First Hawaiian Bank

Equity Fund, High Grade Income Fund and Hawaii Municipal Bond Fund

Statement of Additional Information

Class A Shares

June 14, 1999

This Statement of Additional Information is not a prospectus. It is
intended to provide additional information regarding the activities and
operations of the Trust. Please read this in conjunction with the Trust's
prospectus dated June 14, 1999. Prospectuses may be obtained through the
Distributor, SEI Investments Distribution Co., Oaks, Pennsylvania 19456.

TABLE OF CONTENTS

Page
----

The Trust S-__
Description of Permitted Investments S-__
Investment Limitations S-__
Investment Adviser S-__
The Administrator S-__
The Distributor S-__
The Transfer Agent S-__
The Custodian S-__
Independent Auditors S-__
Legal Counsel S-__
Trustees and Officers of the Trust S-__
Reporting S-__
Performance Information S-__
Calculation of Total Return S-__
Purchasing Shares S-__
Redeeming Shares S-__
Determination of Net Asset Value S-__
Taxes S-__
Fund Transactions S-__
Trading Practices and Brokerage S-__
Description of Shares S-__
Shareholder Liability S-__
Limitation of Trustees' Liability S-__
Year 2000 S-__
<PAGE>

THE TRUST

Bishop Street Funds (the "Trust") is an open-ended 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 Agreement and Declaration of Trust permits the
Trust to offer separate series of units of beneficial interest ("shares"). Each
share of each series represents an equal proportionate interest in that series.
Please see "Description of Shares" for more information.

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

DESCRIPTION OF PERMITTED INVESTMENTS

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

AMERICAN DEPOSITARY RECEIPTS (ADRs) -- 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.

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.

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 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.

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

S-2
<PAGE>

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.

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

S-3
<PAGE>

originally purchased at a premium to decline in price to its par value, which
may result in a loss.

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.

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

INVESTMENT COMPANY SHARES -- Shares of other mutual funds which may be
purchased by the Funds to the extent consistent with applicable law. Under these
rules and regulations of the Investment Company Act of 1940 (the "1940 Act"), a
Fund is prohibited from acquiring the securities of other investment companies
if, as a result of such acquisition, the Fund would own more than 3% of the
total voting stock of the company; securities issued by any one investment
company represented more than 5% of the Fund's assets; or securities (other than
treasury stock) issued by all investment companies would represent more than 10%
of the total assets of the Fund. These investment companies typically incur fees
that are separate from those fees incurred directly by the Fund. A Fund's
purchase of such investment company securities results in the layering of
expenses, such that shareholders of the Funds would indirectly bear a
proportionate share of the operating expenses of such investment companies,
including advisory fees.

MORTGAGE-BACKED -- 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.

S-4
<PAGE>

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

MUNICIPAL SECURITIES -- Municipal notes include, but are not limited to,
general obligation notes, tax anticipation notes (notes sold to finance working
capital needs of the issuer in anticipation of receiving taxes on a future
date), revenue anticipation notes (notes sold to provide needed cash prior to
receipt of expected non-tax revenues from a specific source), bond anticipation
notes, certificates of indebtedness, demand notes and construction loan notes.

Private activity bonds are issued by or on behalf of states or political
subdivisions thereof to finance privately owned or operated facilities for
business and manufacturing housing, sports, and pollution control and to finance
activities of and facilities for charitable institutions. Private activity bonds
are also used to finance public facilities such as airports, mass transit
systems, ports, parking and low income housing. The payment of the principal and
interest on private activity bonds is dependent solely on the ability of the
facility's user to meet its financial obligations and may be secured by a pledge
of real and personal property so financed.

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

The Adviser has the authority to purchase securities at a price which
would result in a yield to maturity lower than that generally offered by the
seller at the time of purchase when they can simultaneously acquire the right to
sell the securities back to the seller, the issuer, or a third party (the
"writer") at an agreed-upon price at any time during a stated period or on a
certain date. Such a right is generally denoted as a "standby commitment" or a
"put." The purpose of engaging in transactions involving puts is to maintain
flexibility and liquidity in order to meet redemptions and remain as fully
invested as possible in municipal securities. The right to put the securities
depends on the writer's ability to pay for the securities at the time the put is
exercised. The Funds will limit their put transactions to those with
institutions which the Adviser believes present minimum credit risks, and the
Adviser will use its best efforts to initially determine and

S-5
<PAGE>

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

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

Special Considerations Relating to Hawaii Municipal Securities

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

Municipal securities which are payable only from the revenues derived from
a particular facility may be adversely affected by Hawaii laws or regulations
which make it more difficult for the particular facility to generate revenues
sufficient to pay such interest and principal including, among others, laws and
regulations which limit the amount of fees, rates or other charges which may be
imposed for use of the facility or which increase competition among facilities
of that type or which limit or otherwise have the effect of reducing the use of
such facilities generally,

S-6
<PAGE>

thereby reducing the revenues generated by the particular facility. Municipal
securities, the payment of interest and principal on which is insured in whole
or in part by a Hawaii governmentally created fund, may be adversely affected by
Hawaii laws or regulations which restrict the aggregate proceeds available for
payment of principal and interest in the event of a default on such municipal
securities. Similarly, municipal securities, the payment of interest and
principal on which is secured, in whole or in part, by an interest in real
property may be adversely affected by Hawaii laws which limit the availability
of remedies or the scope of remedies available in the event of a default on such
municipal securities. Because of the diverse nature of such laws and regulations
and the impossibility of either predicting in which specific municipal
securities the Hawaii Municipal Bond Fund will invest from time to time or
predicting the nature or extent of future changes in existing laws or
regulations or the future enactment or adoption of additional laws or
regulations, it is not presently possible to determine the impact of such laws
and regulations on the securities in which the Fund may invest and, therefore,
on the shares of the Fund.

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

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.

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

Repurchase agreements are considered to be loans by the participating Fund
for purposes of its investment limitations. Repurchase agreements entered into
by the Funds will provide that the underlying security at all times shall have a
value at least equal to 102% of the resale price stated in the agreement. Under
all repurchase agreements entered into by the Funds, the Fund takes actual or
constructive possession of the underlying collateral. However, if the seller
defaults, the Fund could realize a loss on the sale of the underlying security
to the extent that the proceeds of sale including accrued interest are less than
the resale price provided in the

S-7
<PAGE>

agreement including interest. In addition, even though the Bankruptcy Code
provides protection for most repurchase agreements, if the seller should be
involved in bankruptcy or insolvency proceedings, the Fund may incur delay and
costs in selling the underlying security or may suffer a loss of principal and
interest if the Fund is treated as an unsecured creditor and required to return
the underlying security to the seller's estate.

SECURITIES LENDING -- Each of the Funds may lend securities pursuant to
agreements requiring that the loans be continuously secured by cash or liquid
securities as collateral equal to 100% of the market value at all times of the
securities lent. Such loans will not be made if, as a result, the aggregate
amount of all outstanding securities loans for a Fund exceed one-third of the
value of its total assets taken at fair market value. A Fund will continue to
receive interest on the securities lent while simultaneously earning interest on
the investment of the cash collateral in U.S. Government securities. However, a
Fund will normally pay lending fees to broker-dealers and related expenses from
the interest earned on invested collateral. There may be risks of delay in
receiving additional collateral or risks of delay in recovery of the securities
or even loss of rights in the collateral should the borrower of the securities
fail financially. 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.

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.

STRIPPED MORTGAGE-BACKED SECURITIES (SMBs) are usually structured with two
classes that receive specified proportions of 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.

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.

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

S-8
<PAGE>

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

VARIABLE AND FLOATING RATE INSTRUMENTS involve certain debt obligations
that may carry variable or floating rates of interest, and may involve a
conditional or unconditional demand feature. Such instruments bear interest at
rates which are not fixed, but which vary with changes in specified market rates
or indices.

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-9
<PAGE>

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

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

INVESTMENT LIMITATIONS

Fundamental Policies

A Fund may not:

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

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

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

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

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

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

7. Make short sales of securities or purchase securities on margin, except
that each Fund

S-10
<PAGE>

may obtain short-term credits as necessary for the clearance of security
transactions.

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

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

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

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

Non-Fundamental Policy

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

The foregoing percentages will apply at the time 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 __________ __, 1999. The
Advisory Agreement provides that the Adviser shall not be protected against any
liability to the Trust or its Shareholders by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard of its obligations or duties thereunder.

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

The continuance of the Advisory Agreement, after the first two years, must
be specifically approved at least annually (i) by the vote of a majority of the
Trustees who are not

S-11
<PAGE>

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 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 interest 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 or sub-administrator to the following other mutual funds: The
Achievement Funds Trust, The Advisors' Inner Circle Fund, Alpha Select Funds,
The Arbor Fund, ARK Funds, Armada Funds, Boston 1784 Funds(R), CrestFunds(R),
Inc., CUFUND, The Expedition Funds, First American Funds, Inc., First American
Investment Funds, Inc., First American Strategy Funds, Inc., HighMark Funds,
Huntington Funds, The Nevis Fund, Inc., Oak Associates Funds, The PBHG Funds,
Inc., PBHG Advisor Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar
Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional International Trust, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI
Classic Funds, STI Classic Variable Trust and TIP Funds.

The Administrator is entitled to a fee, calculated daily and paid monthly,
at an annual rate of 0.20% of average daily not assets of each of the Funds.

S-12
<PAGE>

THE DISTRIBUTOR

SEI Investments Distribution Co. (the "Distributor"), a wholly-owned
subsidiary of SEI, serves as a distributor. Financial institutions that are the
record owner of shares for the account of their customers may impose separate
fees for account services to their customers.

Each Fund has adopted a shareholder servicing plan (the "Service Plan")
under which a shareholder servicing fee of up to .25% of average daily net
assets attributable to each Fund will be paid to the Distributor. Under the
Service Plan, the Distributor may perform, or may compensate other service
providers for performing, the following shareholder and administrative services:
maintaining client account; 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 amount is pays
to third parties.

THE TRANSFER AGENT

DST Systems, Inc., 330 W. 9th Street, Kansas City, Missouri 64105 serves as the
Funds' transfer agent.

THE CUSTODIAN

Chase Manhattan Bank, New York, New York 10041 serves as the Funds' custodian.

INDEPENDENT AUDITORS

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, Pennsylvania
19103 serves as legal counsel to the Funds.

TRUSTEES AND OFFICERS OF THE TRUST

The management and affairs of the Trust are supervised by the Trustees
under the laws governing business trusts in the Commonwealth of Massachusetts.
The Trustees and executive officers of the Trust and their principal occupations
for the last five years are set forth below. An asterisk (*) indicates an
interested person as defined by the 1940 Act.

*MARTIN ANDERSON (DOB 11/16/23) - Trustee - Attorney, Goodsill, Anderson,
Quinn & Stifel since 1951.

CHARLES E. CARLBOM (DOB 08/20/34) - Trustee - President and CEO, United
Grocers

S-13
<PAGE>

Inc. since 1997; President and CEO, Western Family Food Inc. - Western Family
Holding Inc. (1982- 1997).

*PHILIP H. CHING (DOB 01/11/31) - Trustee - 1700 Palaau St., Honolulu, HI.
Retired since 1996. Vice Chairman First Hawaiian Bank from 1968 to 1996.

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

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

LYDIA A. GAVALIS (DOB 06/05/64) -- Vice President and Assistant Secretary
- -- Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998. Assistant General Counsel and Director of Arbitration,
Philadelphia Stock Exchange, 1989-1998.

JOHN H. GRADY, JR. (DOB 06/01/61) -- Secretary -- Partner since 1995,
Morgan, Lewis & Bockius LLP (law firm), counsel to the Trust, SEI Investments,
the Administrator and the Distributor.

KATHY HEILIG (DOB 12/21/58) -- Vice President and Assistant Secretary
- --Treasurer of SEI Investments since 1997; Assistant Controller of SEI
Investments since 1995; Vice President of SEI Investments since 1991.

JAMES L. HUFFMAN (DOB 03/25/45) - Trustee - Dean and Professor, Lewis &
Clark Law School since 1973.

SHUNICHI KIMURA (DOB 03/15/30) - Trustee - 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).

ROBERT A. NESHER (DOB 08/17/46) - Trustee - The Advisors' Inner Circle
Fund, The Arbor Fund, Bishop Street Funds since 1998, Boston 1784 Funds(R), The
Expedition Funds, Oak Associates Funds, Pillar Funds, 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 and SEI Tax Exempt Trust; Trustee - and Executive Vice
President of the Administrator and the Distributor (1981-1994); .

JOSEPH M. O'DONNELL (DOB 11/13/54) -- Vice President and Assistant
Secretary -- Vice President and Assistant Secretary of the Administrator and the
Distributor since 1998.

S-14
<PAGE>

Vice President and General Counsel, FPS Services, Inc., 1993-1997.

SANDRA K. ORLOW (DOB 10/18/53) -- Vice President and Assistant Secretary
- --Secretary of the Distributor since 1998; Vice President of the Distributor
since 1988. Vice President and Assistant Secretary of the Manager since 1988.
Assistant Secretary of the Distributor from 1988 to 1998.

*WILLIAM S. RICHARDSON (DOB 12/22/19) - Trustee - Retired since 1992.

KEVIN P. ROBINS (DOB 04/15/61) - Vice President and Assistant Secretary -
Senior Vice President, General Counsel and Assistant Secretary of SEI, the
Administrator and Distributor since 1994. Vice President of SEI, the
Administrator and Distributor 1992-1994.

*PETER F. SANSEVERO (DOB 01/06/33) - Trustee - Regional Director of the
Northwestern Region and First Vice President, Merrill Lynch (1958-1997).

LYNDA J. STRIEGEL (DOB 10/30/48) - Vice President and Assistant Secretary
of the Administrator and the Distributor since 1998; Senior Asset Management
Counsel, Barnett Banks, Inc. (1997-1998); Partner, Groom and Nordberg, Chartered
(1996-1997); Associate General Counsel, Riggs Bank, N.A. (1991-1995).

MANUEL R. SYLVESTER (DOB 06/20/30) - Trustee - Retired since 1992.

JOYCE S. TSUNODA (DOB 01/01/38) - Trustee - Chancellor - Hawaii Community
College since 1983. Senior Vice President - University of Hawaii System since
1989.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Person and Position Aggregate Pension or Estimated Total Compensation From
Compensation Retirement Benefits Annual Registrant and Fund Complex
From Registrant Accrued as Part Benefits Paid to Directors for FYE
for FYE 12/31/98 of Fund Expenses Upon 12/31/98
Retirement
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Martin Anderson, Trustee* $10,000 $0 $0 $10,000 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Charles E. Carlbom, $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Philip H. Ching, Trustee* $10,000 $0 $0 $10.000 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Todd B. Cipperman, Vice President and
Assistant Secretary $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Robert Dellacroce, Controller and Chief
Financial Officer $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Lydia A. Gavalis, Vice President and
Assistant Secretary $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
John H. Grady, Secretary $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Kathy Heilig, Vice President and
Assistant Secretary $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
James L. Huffman, Trustee $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Shunichi Kimura, Trustee $10,000 $0 $0 $10,000 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Nesher, Trustee $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph M. O'Donnell, Vice President
and Assistant Secretary $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Sandra K. Orlow, Vice President and
Assistant Secretary ...................... $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

S-15
<PAGE>

<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William S. Richardson, Trustee* $10,000 $0 $0 $10,000 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Kevin P. Robins, Vice President and $ 0 $0 $0 $ 0 for services on 1 board
Assistant Secretary
- ------------------------------------------------------------------------------------------------------------------------------------
Peter S. Sansevero, Trustee* $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Lynda J. Striegel, Vice President and
Assistant Secretary $ 0 $0 $0 $ 0 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Manuel R. Sylvester, Trustee $10,000 $0 $0 $10,000 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
Joyce S. Tsunoda, Trustee $10,000 $0 $0 $10,000 for services on 1 board
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

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

REPORTING

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

PERFORMANCE

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

The yield of a money market fund fluctuates, and the annualization of a
week's dividend is not a representation by the Trust as to what an investment in
a money market fund will actually yield in the future. Actual yields will depend
on such variables as asset quality, average asset maturity, the type of
instruments the Fund invests in, changes in interest rates on money market
instruments, changes in the expenses of the Fund and other factors.

Other Yields. The Hawaii Municipal Bond Fund and the High Grade Income
Fund may advertise a 30-day yield. The Hawaii Municipal Bond Fund also may
advertise a 30-day tax-equivalent yield. Tax equivalent yields are computed by
dividing that portion of the Fund's yield which is tax-exempt by 1 minus a
stated federal and state income tax rate and adding the product to that portion,
if any, of the Fund's yield that is not tax-exempt. (Tax equivalent yields
assume the payment of Federal income taxes at a rate of 31% and Hawaii income
taxes at a rate of 10%.) These figures will be based on historical earnings and
are not intended to indicate future performance. The 30-day yield of these Funds
refers to the annualized income generated by an investment in the Funds over a
specified 30-day period. The yield is calculated by assuming that the income
generated by the investment during that period generated each period over one
year and is shown as a percentage of the investment. In particular, yield will
be calculated according to the following formula:

Yield = (2 (a - b/cd + 1)6 - 1) where a = dividends and interest earned
during the period; b = expenses accrued for the period (net of 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.

S-16
<PAGE>

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

CALCULATION OF 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: P (1 + T)n = ERV, where P = a hypothetical initial payment of $1,000; T
= average annual total return; n = number of years; and ERV = ending redeemable
value of a hypothetical $1,000 payment made at the beginning of the designated
time period as of the end of such period or the life of the fund. The formula
for calculating aggregate total return can be expressed as (ERV/P) - 1.

The calculation of total return assumes reinvestment of all dividends and
capital gain distribution on the reinvestment dates during the period and that
the entire investment is redeemed at the end of the period.

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.

PURCHASING SHARES

Purchases and redemptions of shares of the Funds may be made on any day
the New York Stock

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<PAGE>

Exchange and the Federal Reserve wire system are open for business. Currently,
the weekdays on which the Trust is closed for business are: New Year's Day,
Martin Luther King, Jr.'s Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and
Christmas Day. Purchases and redemptions will be made in full and fractional
shares that are calculated to three decimal places.

REDEEMING SHARES

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

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

DETERMINATION OF NET ASSET VALUE

The securities of the Equity, High Grade Income and Hawaii Municipal Bond
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 additional federal income tax
considerations generally affecting the Funds and their shareholders that are not
described in the Funds' prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussion here and in the Funds' prospectus is not intended as a substitute for
careful tax planning. Shareholders are urged to consult with their tax advisors
with specific reference to their own tax situation, including their state and
local tax liabilities.

Federal Income Tax Treatment of Dividends and Distributions

The following general discussion of certain federal income tax
consequences is based on

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<PAGE>

the Internal Revenue Code of 1986, as amended (the "Code") and the regulations
issued thereunder as in effect on the date of this Statement of Additional
Information. New legislation, as well as administrative changes or court
decisions, may significantly change the conclusions expressed herein, and may
have a retroactive effect with respect to the transactions contemplated herein.

Qualification as a Regulated Investment Company

Each Fund intends to qualify and elect to be treated as a "regulated
investment company" ("RIC") as defined under Subchapter M of the Code. By
following such a policy, each Fund expects to eliminate or reduce to a nominal
amount the federal taxes to which they may be subject.

In order to qualify as a RIC, a Fund must distribute at least 90% of its
net investment income (that generally includes dividends, taxable interest, and
the excess of net short-term capital gains over net long-term capital losses
less operating expenses) and at least 90% of its net tax exempt interest income,
for each tax year, if any, to its shareholders and also must meet several
additional requirements. Included 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) of any one issuer or of two or more
issuers which the Fund controls and which are engaged in the same, similar or
related trades or businesses.

Some of the Funds may make investments in securities (such as STRIPS) that
bear "original issue discount" or "acquisition discount" (collectively, "OID
Securities"). The holder of such securities is deemed to have received interest
income even though no cash payments have been received. Accordingly, OID
Securities may not produce sufficient current cash receipts to match the amount
of distributable net investment income the Funds must distribute to satisfy the
Distribution Requirement. In some cases, the Funds may have to borrow money or
dispose of other investments in order to make sufficient cash distributions to
satisfy the Distribution Requirement.

Although each Fund intends to distribute substantially all of its net
investment income and may distribute its capital gains for any taxable year,
each Fund will be subject to federal income taxation to the extent any such
income or gains are not distributed.

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<PAGE>

If the Funds fail to qualify for any taxable year as a RIC, all of their
taxable income will be subject to tax at regular corporate income tax rates
without any deduction for distributions to shareholders and such distributions
generally will be taxable to shareholders as ordinary dividends to the extent of
a Fund's current and accumulated earnings and profits. In this event,
distributions generally will be eligible for the dividends-received deduction
for corporate shareholders.

Fund Distributions

Distributions of investment company taxable income will be taxable to
shareholders as ordinary income, regardless of whether such distributions are
paid in cash or are reinvested in additional Shares, to the extent of a Fund's
earnings and profits. Each Fund anticipates that it will distribute
substantially all of its investment company taxable income for each taxable
year.

Each Fund may either retain or distribute to shareholders its excess of
net long-term capital gains over net short-term capital losses ("net capital
gains"). If such gains are distributed as a capital gains distribution, they are
taxable to shareholders who are individuals at a maximum rate of 20%, regardless
of the length of time the shareholder has held the shares. If any such gains are
retained, a Fund will pay federal income tax thereon.

In the case of corporate shareholders, distributions (other than capital
gains distributions) from a RIC generally qualify for the dividends-received
deduction to the extent of the gross amount of qualifying dividends received by
a Fund for the year. Generally, and subject to certain limitations, a dividend
will be treated as a qualifying dividend if it has been received from a domestic
corporation. Accordingly, it is not expected that any High Grade Income Fund,
Hawaii Municipal Bond Fund, Money Market Fund, or Treasury Money Market Fund
distribution will qualify for the corporate dividends-received deduction.
Conversely, distributions from the Equity Fund generally will qualify for the
corporate dividends-received deduction.

Ordinarily, investors should include all dividends as income in the year
of payment. However, dividends declared payable to shareholders of record in
October, November, or December of one year, but paid in January of the following
year, will be deemed for tax purposes to have been received by the shareholder
and paid by the Fund in the year in which the dividends were declared.

Each Fund will provide a statement annually to shareholders as to the
federal tax status of distributions paid (or deemed to be paid) by the Fund
during the year, including the amount of dividends eligible for the corporate
dividends-received deduction.

Sale or Exchange of Fund Shares

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<PAGE>

Generally, gain or loss on the sale or exchange of a Share will be capital
gain or loss that will be long-term if the Share has been held for more than
twelve months and otherwise will be short-term. For individuals, long-term
capital gains are currently taxed at a maximum rate of 20% and short-term
capital gains are currently taxed at ordinary income tax rates. However, if a
shareholder realizes a loss on the sale, exchange or redemption of a Share held
for six months or less and has previously received a capital gains distribution
with respect to the Share (or any undistributed net capital gains of a Fund with
respect to such Share are included in determining the shareholder's long-term
capital gains), the shareholder must treat the loss as a long-term capital loss
to the extent of the amount of the prior capital gains distribution (or any
undistributed net capital gains of a Fund that have been included in determining
such shareholder's long-term capital gains). In addition, any loss realized on a
sale or other disposition of Shares will be disallowed to the extent an investor
repurchases (or enters into a contract or option to repurchase) Shares within a
period of 61 days (beginning 30 days before and ending 30 days after the
disposition of the Shares). This loss disallowance rule will apply to Shares
received through the reinvestment of dividends during the 61-day period.

In certain cases, a Fund will be required to withhold, and remit to the
United States Treasury, 31% of any distributions paid to a shareholder who (1)
has failed to provide a correct taxpayer identification number, (2) is subject
to backup withholding by the Internal Revenue Service, or (3) has failed to
certify to the Fund that such shareholder is not subject to backup withholding.

Federal Excise Tax

If a Fund fails to distribute in a calendar year at least 98% of its
ordinary income for the year and 98% of its capital gain net income (the excess
of short and long term capital gains over short and long term capital losses)
for the one-year period ending October 31 of that year (and any retained amount
from the prior calendar year), the Fund will be subject to a nondeductible 4%
Federal excise tax on the undistributed amounts. Each Fund intends to make
sufficient distributions to avoid imposition of this tax, or to retain, at most
its net capital gains and pay tax thereon.

Additional Considerations for Hawaii Municipal Bond Fund

The Fund intends to qualify to pay "exempt interest dividends" to its
shareholders by satisfying the Code's requirement that at the close of each
quarter of its taxable year at least 50% of the value of its total assets
consist of obligations the interest on which is exempt from federal income tax.
As long as this and certain other requirements are met, dividends derived from
the Fund's net tax-exempt interest income will be "exempt interest dividends"
that are excluded from your gross income for federal income tax purposes. Exempt
interest dividends may, however, have collateral deferral income tax
consequences, including alternative minimum tax

S-21
<PAGE>

consequences, as discussed below.

Exempt-interest dividends may be subject to the alternative minimum tax
imposed by Section 55 of the Code (the "Alternative Minimum Tax"). The
Alternative Minimum Tax is imposed at a rate of up to 28% in the case of
non-corporate taxpayers and at the rate of 20% in the case of corporate
taxpayers, to the extent it exceeds the taxpayer's regular tax liability. The
Alternative Minimum Tax may be affected by the receipt of exempt-interest
dividends in two circumstances. First, exempt-interest dividends derived from
certain "private activity bonds" issued after August 7, 1986, will generally be
an item of tax preference and therefore potentially subject to the Alternative
Minimum Tax. The Fund intends, when possible, to avoid investing in private
activity bonds. Second, in the case of exempt-interest dividends received by
corporate shareholders, all exempt-interest dividends, regardless of when the
bonds from which they are derived were issued or whether they are derived from
private activity bonds, will be included in the corporation's "adjusted current
earnings," as defined in Section 56(g) of the Code, in calculating the
corporation's alternative minimum taxable income for purposes of determining the
Alternative Minimum Tax.

The percentage of income that constitutes "exempt-interest dividends" will
be determined for each year for the Fund and will be applied uniformly to all
dividends declared with respect to the Fund during that year. This percentage
may differ from the actual percentage for any particular day.

Interest on indebtedness incurred or continued by shareholders to purchase
or carry Shares of the Fund will not be deductible for federal income tax
purposes. 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 will 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% 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.

Entities or persons who are "substantial users" (or persons related to
"substantial users") of facilities financed by industrial development bonds or
private activity bonds should consult their tax advisors before purchasing
Shares. "Substantial user" is defined generally as including a "non-exempt
person" who regularly uses in trade or business a part of such a facility.

Current federal law limits the types and volume of bonds qualifying for
the federal income tax exemption of interest, which may have an effect on the
ability of the Fund to

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<PAGE>

purchase sufficient amounts of tax-exempt securities to satisfy the Code's
requirements for the payment of exempt interest dividends.

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

The Fund may not be a suitable investment for tax-exempt shareholders and
plans because such shareholders and plans would not gain any additional benefit
from the receipt of exempt-interest dividends.

STATE AND LOCAL 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. Shareholders are urged to
consult their tax advisors as to the consequences of these and other state and
local tax rules affecting an investment in the Funds.

Hawaii Taxation

The State of Hawaii has specifically adopted Sections 852 through 855 of
the Code, which provisions provide for pass-through treatment of exempt interest
dividends and capital gains, i.e., distributions by the Hawaii Municipal Bond
Fund of dividends representing exempt interest and capital gains retain their
original character in the hands of shareholders. As the State of Hawaii's
Department of Taxation has confirmed in response to a request by special counsel
for the Trust, distributions from the Hawaii Municipal Bond Fund to its
shareholders which are attributable to interest on obligations exempt from
income tax in the State of Hawaii will not be subject to Hawaii income tax in
the hands of shareholders so long as at least 50% of the Hawaii Municipal Bond
Fund's assets are invested in securities the interest from which is exempt from
Hawaii state taxation. In addition, the Department of Taxation has confirmed
that interest income on obligations issued by the U.S. Government and its
territories is exempt from State of Hawaii income taxation. While the Hawaii
Municipal Bond Fund intends to invest primarily in obligations which produce
tax-exempt interest, if the Fund invests in obligations that are not exempt for
Hawaii purposes, a portion of the Fund's distribution will be subject to Hawaii
income tax.

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<PAGE>

FUND TRANSACTIONS

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

The money market securities in which the Funds invest are traded primarily
in the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Adviser
will deal directly with the dealers who make a market in the securities involved
except in those circumstances where better prices and execution are available
elsewhere. Such dealers usually are acting as principal for their own account.
On occasion, securities may be purchased directly from the issuer.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

S-24
<PAGE>

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 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

S-25
<PAGE>

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 then
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.

TRADING PRACTICES AND BROKERAGE

DESCRIPTION OF SHARES

The Agreement and Declaration of Trust ("Declaration of Trust") authorizes
the issuance of an unlimited number of each series. Each share of each Fund
represents an equal proportionate interest in that Fund with each other share of
that Fund. Shares are entitled upon liquidation to a pro rata share in the net
assets of the Funds, shareholders have no preemptive rights. The Agreement and
Declaration of Trust 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.

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

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<PAGE>

the Trust property for any shareholder held personally liable for the
obligations of the Trust.

LIMITATION OF TRUSTEES' LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for
his or her 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 or her willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.

YEAR 2000

The Funds depend on the smooth functioning of computer systems in almost every
aspect of their business. Like other mutual funds, businesses and individuals
around the world, the Fund could be adversely affected if the computer systems
used by their service providers do not properly process dates on and after
January 1, 2000 and distinguish between the year 2000 and the year 1900. The
Funds have asked their 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 Funds. The Funds and their 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 Funds do business.

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<PAGE>

PART C: OTHER INFORMATION

ITEM 23. EXHIBITS:

(a)(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.

(a)(2) 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.

(b)(1) 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.

(b)(2) 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.

(b)(3) 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.

(d)(1) 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.

(d)(2) 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.

(d)(3) Amended and Restated Investment Sub-Advisory Agreement by and among
the
<PAGE>

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.

(d)(4) 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.

(e) 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.

(f) Not Applicable.

(g) 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.

(h)(1) 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.

(h)(2) 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.

(h)(3) 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

(i) 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.
<PAGE>

(j) Not Applicable.

(k) Not Applicable.

(l) Not Applicable.

(m) 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.

(n) Not applicable.

(o) 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.

(p) Not Applicable.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:

See 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.
<PAGE>

ITEM 25. 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
Trustor 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 26. 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:

<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 & Chief Executive
Director Officer
John C. Couch Alexander & Baldwin, Inc. Chairman, President & Chief
Executive Officer
Walter A. Dods, Jr. First Hawaiian, Inc. Chairman & Chief Executive
Director, Chairman and Officer
Chief Executive Officer
Dr. Julia Ann Forhlich Blood Bank of Hawaii President
Director
Paul Mullin Ganley Estate of S.W. Damon, President
Director Carlsmith, Ball
Wichman, Case & Ichiki Partner
Estate of S.M. Damon
David W. Haig Estate of S.W. Damon Trustee
Director
Warren H. Haruki GTE Hawaiian Tel President
Director
Howard K. Hiroki PricewaterhouseCoopers LLP Partner (retired)
Director
</TABLE>

<PAGE>

<TABLE>
<S> <C> <C>
John A. Hoag First Hawaiian, Inc. President (retired)
Director
David C. Hulihee Royal Contracting Co., Ltd. President & Treasurer
Director
Glenn A. Kaya Hawaii Seiyu, Ltd. President
Director
Dr. Richard R. Kelly 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 Chairman
Director for High Technology
Research
Dr. Roderick F. McPhee Punahou School President (retired)
Director
Wesley T. Park Hawaii Dental Service President & Chief Executive
Director Officer
George P. Shea, Jr. First Insurance Company of Chairman, President & Chief
Director Hawaii, Ltd. 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
Gen. Fred C. Weyand Estate of S.M. Damon Trustee
Director
James C. Wo Bojim Investments Chairman & Chief Executive
Director BJ Management Corp. Officer Vice President
& Treasurer
Robert C. Wo BJ Management Corp. President & 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. Guerro, 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
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
Lily K. Yao -- --
Vice Chairman
</TABLE>

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 27. 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:

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
Huntington Funds January 11, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
<PAGE>

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
Alpha Select Funds January 1, 1998
Oak Associates Funds February 27, 1998
The Nevis Fund, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998

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

(b) Furnish the Information required by the following table with respect
to each director, officer or partner of each principal underwriter named in the
answer to Item 21 of Part B. Unless other wise noted, the business address of
each director or officer is Oaks, PA 19456.

<TABLE>
<CAPTION>
Position And Officers
Name Position And Officer 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 Hutchinson 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, 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
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C>
Lydia A. Gavalis Vice President & Assistant Secretary Vice President and
Assistant Secretary
Greg Gettinger Vice President & Assistant Secretary --
Kathy Heilig Vice President Vice President and
Assistant Secretary
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 --
Joseph M. O'Donnell Vice President & Assistant Secretary Vice President and
Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President &
General Counsel & Secretary 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 --
Lynda J. Striegel 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 28. 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 the runer, are
maintained as follows:

(a) With respect to Rules 31a-1(a); 31(a)-1(b); (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);
<PAGE>

(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 Advisor and Sub-Adviser:

First Hawaiian Bank Wellington Management Company, LLP
999 Biship Street 75 State Street
Honolulu, Hawaii 96813 Boston, Massachusetts 02109

ITEM 29. MANAGEMENT SERVICES:

None.

ITEM 30: 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 appropriate 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 charges.
<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. 11 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 10 day of April, 1999.

By: /s/ Robert A. Nesher
--------------------------
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 April 10, 1999
- ------------------------------
Martin Anderson

Trustee April ____, 1999
- ------------------------------
Charles E. Carlbom

Trustee April ____, 1999
- ------------------------------
Philip H. Ching

/s/ James L. Huffman Trustee April 10, 1999
- ------------------------------
James L. Huffman

/s/ Shunichi Kimura Trustee April 10, 1999
- ------------------------------
Shunichi Kimura

Trustee April ____, 1999
- ------------------------------
William S. Richardson

/s/ Peter F. Sansevero Trustee April 10, 1999
- ------------------------------
Peter F. Sansevero

Trustee April ____, 1999
- ------------------------------
Manuel R. Sylvester

/s/ Joyce S. Tsunoda Trustee April 10, 1999
- ------------------------------
Joyce S. Tsunoda

/s/ Robert DellaCroce Controller and Chief April 10, 1999
- ------------------------------
Robert DellaCroce Financial Officer

/s/ Robert A. Nesher President and Trustee April 10, 1999
- ------------------------------
Robert A. Nesher
<PAGE>

EXHIBIT INDEX

NAME EXHIBIT
- ---- -------

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

EX-99.A(2) 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.B(1) 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.B(2) Amended By-Laws of 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.B(3) Amended By-Laws of the Registrant, incorporated herein by
reference to Post-Effective Amendment No. 7 to the
Registrant's Registration Statement on From N-1A (File No.
33-80514), as filed on February 26, 1998.

EX-99.D(1) 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 N1-A (File No. 33-80514), as
filed February 29, 1996.

EX-99.D(2) 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 From N-1A
(File No. 33- 80514), as filed February 29, 1996.
<PAGE>

EX-99.D(3) 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 From N-1A (File No. 33-80514), as
filed April 30, 1997.

EX-99.D(4) 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 From N-1A (File No. 33-80514), as
filed April 30, 1997.

EX-99.E 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.G 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
From N-1A (File No. 80514), as filed February 29, 1996.

EX-99.H(1) 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.

EX-99.H(2) 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.H(3) 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.I 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.
<PAGE>

EX-99.J Not Applicable.

EX-99.M 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.O 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.