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GOLDMAN SACHS VARIABLE INSURANCE TRUST
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SUPPLEMENT DATED MAY 1, 1998 TO
PROSPECTUS DATED JANUARY 1, 1998
On the Cover Page and under "Fund Highlights--What are the Investment
Objectives and Policies of the Funds" and "Investment Objectives and
Policies--Mid Cap Equity Fund," the following changes are made:
The range of public stock market capitalization in which the Fund will
invest is amended such that the Mid Cap Equity Fund will seek to meet its
objective primarily through investments in equity securities of companies
with public stock market capitalizations within the range of the market
capitalization of companies constituting the Russell Midcap Index at the
time of investment (currently between $400 million and $16 billion).
Under "Overview of Investment Styles--Equity Funds" the International Equity
Fund is deleted from the "Growth Style" section and the following paragraph is
added:
ACTIVELY MANAGED FUND. The International Equity Fund is managed using an
active international approach, which utilizes a consistent process of stock
selection undertaken by portfolio management teams located within each of
the major investment regions, including Europe, Japan, Asia and the United
States. In selecting securities, the Investment Adviser uses a long-term,
bottom-up strategy based on first-hand fundamental research that is
designed to give broad exposure to the available opportunities while
seeking to add return primarily through stock selection. Equity securities
for this Fund are evaluated based on three key factors--the business, the
management and the valuation. The Investment Adviser ordinarily seeks
securities that have, in the Investment Adviser's opinion, superior
earnings growth potential, sustainable franchise value with management
attuned to creating shareholder value and relatively discounted valuations.
In addition, the Investment Adviser uses a multi-factor risk model which
seeks to assure that deviations from the benchmark are justifiable.
Under "INVESTMENT TECHNIQUES" subsection the following two paragraphs are
added after subsection "Futures Contracts and Options on Futures Contracts:"
STANDARD & POOR'S DEPOSITORY RECEIPTS
Each Fund (other than the High Yield and Global Income Funds) may,
consistent with its objectives, purchase Standard & Poor's Depository
receipts ("SPDRs"). SPDRs are American Stock Exchange-traded securities
that represent ownership in the SPDR Trust, a trust which has been
established to accumulate and hold a portfolio of common stocks that is
intended to track the price performance and dividend yield of the S&P 500.
This trust is sponsored by a subsidiary of the American Stock Exchange.
SPDRs may be used for several reasons, including but not limited to:
facilitating the handling of cash flows or trading, or reducing transaction
costs. The use of SPDRs would introduce additional risks to the portfolio
as the price movement of the instrument does not perfectly correlate with
the price action of the underlying index.
EQUITY SWAPS
Each Fund (other than the High Yield and Global Income Funds) may invest up
to 10% of its total assets in equity swaps. Equity swaps allow the parties
to a swap agreement to exchange the dividend income or other components of
return on an equity investment (e.g., a group of equity securities or an
index) for a component of return on another non-equity or equity
investment. An equity swap may be used by a Fund to invest in a market
without owning or taking physical custody of securities in circumstances in
which direct investment is restricted for legal reasons or is otherwise
impractical. Equity swaps are derivatives and their value can be very
volatile. To the extent that the Investment Adviser does not accurately
analyze and predict the potential relative fluctuation of the components
swapped with another party, a Fund may suffer a loss. The value of some
components of an equity swap (such as the dividends on a common stock) may
also be
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sensitive to changes in interest rates. Furthermore, during the period a
swap is outstanding, a Fund may suffer a loss if the counterparty defaults.
In connection with its investments in equity swaps, a Fund will either
segregate cash or liquid assets or otherwise cover its portion in a manner
required by the SEC.
Under "INVESTMENT TECHNIQUES" subsection "Miscellaneous Techniques" the
language "and Standard and Poor's Depository Receipts" under item (i) is
deleted.
Under "MANAGEMENT" subsection "Fund Managers," the following portfolio
managers have been added:
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<CAPTION>
YEARS
FUND PRIMARILY FIVE YEARS
NAME AND TITLE RESPONSIBILITY RESPONSIBLE EMPLOYMENT HISTORY
-------------- ------------------- ----------- ---------------------------
Guy P. de C. Portfolio Manager-- Since 1997 Mr. Bennett joined the
Bennett International Investment Adviser in 1996
Vice President Equity and is also co-head of our
Japanese Equity Group in
Tokyo. From 1984 to 1996,
he was a portfolio manager
and an Executive Director
at CIN Management.
<C> <C> <C> <S>
Lawrence S. Sibley Portfolio Manager-- Since 1997 Mr. Sibley joined the
Vice President Growth and Income Investment Adviser in 1997.
Mid Cap Equity From 1994 to 1997 he headed
Institutional Equity Sales
at J.P. Morgan Securities
and from 1987 to 1994, he
was a principal of Sanford
C. Bernstein & Co. in its
Institutional Sales
Department.
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