<PAGE>
Goldman
Sachs Variable Insurance Trust
- --------------------------------------------------------------------------------
GOLDMAN SACHS ASSET MANAGEMENT ONE NEW YORK PLAZA, 42ND FLOOR, NEW YORK,
NEW YORK 10004
- --------------------------------------------------------------------------------
Semiannual [LOGO OF GOLDMAN
June 30, 1998 SACHS APPEARS HERE]
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Dear Shareholders,
ON BEHALF OF GOLDMAN SACHS, IT IS A PLEASURE TO WELCOME YOU AS A SHAREHOLDER
IN THE GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND.
IN THE FUTURE, YOU WILL RECEIVE ANNUAL AND SEMIANNUAL REPORTS THAT DESCRIBE
THE FUND'S PERFORMANCE AND STRATEGIC DEVELOPMENTS. THIS SEMIANNUAL REPORT
COVERS THE PERIOD FROM JANUARY 12, 1998, WHEN THE FUND BEGAN OPERATIONS,
THROUGH JUNE 30, 1998.
Market Review
The U.S. stock market generated strong performance during
the period under review, though not without an increase in
overall market volatility. Thus far in 1998, the mantle of
market leadership has been assumed by mega-cap stocks --
the largest and most liquid stocks in the Standard &
Poor's 500 Index. Several factors -- including ongoing
Asian market turbulence, benign inflation and concern in
the face of a mature bull market -- have made mega-caps the
investment of choice among U.S. investors, as these invest-
ments represent safety and predictability.
Performance Review
From January 12, 1998 through June 30, 1998, the Fund gen-
erated a 13.90% cumulative total return. Over the same time
period, the Fund's benchmark, the Standard & Poor's 500 In-
dex (with dividends reinvested), generated a cumulative to-
tal return of 23.08%.
Investment Objective
The Fund seeks long-term capital growth primarily through
investments in equity securities of companies that are con-
sidered to have favorable prospects for capital apprecia-
tion and/or dividend-paying abililty.
Sector Performance
As bottom-up stock-pickers, the Fund's management team fo-
cuses on individual companies first, but sometimes finds a
concentration of value within particular industries or sec-
tors. With this in mind, the Fund is currently overweight
in tobacco stocks. Over the longer term, the team believes
that these companies are committed to rewarding sharehold-
ers and exhibit substantially better fundamental value than
their stock prices currently indicate. The Fund remains un-
derweight in pharmaceuticals and media and communications
stocks, as management believes the strong fundamentals of
these industries are already reflected in stock prices.
1
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Portfolio Composition
In the current market environment, the management team has
found opportunities to invest in companies that sell at a
substantial discount to the market and to their respective
industries. This valuation dichotomy may be a result of
limited near-term earnings visibility, cyclically out-of-
favor status, or companies that are poorly followed or mis-
understood. The team believes that by performing rigorous,
proprietary fundamental research into these low-expectation
stocks, it is building a portfolio that offers long-term
value.
Top 10 Portfolio Holdings as of June 30, 1998*
<TABLE>
<CAPTION>
PERCENTAGE OF
COMPANY LINE OF BUSINESS NET ASSETS
------- ---------------- -------------
<S> <C> <C>
Aetna, Inc. Healthcare Management 4.1%
Quantum Corp. Personal Computers and Peripherals 3.7
RJR Nabisco
Holdings, Inc. Tobacco 3.6
Loews Corp. Insurance Brokers and Other Insurance 3.4
Union Carbide Corp. Chemical Products 3.4
Fluor Corp. Construction/Environmental Services 3.3
Cigna Corp. Insurance-Life 3.3
Philip Morris
Compa-nies, Inc. Tobacco 3.2
Raytheon Co. Aerospace/Defense 3.2
Tosco Corp. Energy Refining and Marketing 2.9
</TABLE>
* The top 10 holdings may not be representative of the
Fund's future investments.
Outlook
Although the Fund's short-term performance has trailed the
market, the management team believes that its rigorous
research has the potential to produce long-term appreciation.
Most importantly, when the current excesses are wrung from
the system, the team believes that its discipline has the
potential to dampen volatility and preserve capital.
Goldman Sachs Asset Management thanks you for your
investment and looks forward to your continued confidence.
Goldman Sachs U.S. Value Portfolio Management Team
June 30, 1998
2
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND
Statement of Investments
June 30, 1998 (Unaudited)
SHARES DESCRIPTION VALUE
COMMON STOCKS - 78.7%
AEROSPACE/DEFENSE - 6.9%
1,300 Boeing Co. $ 57,931
1,600 Lockheed Martin Corp. 169,400
3,400 Raytheon Co. 195,925
----------
423,256
- --------------------------------------------------------------------------------
AIRFREIGHT, TRUCK & OTHER - 1.1%
1,100 FDX Corp.* 69,025
- --------------------------------------------------------------------------------
AUTO SUPPLIERS - 2.6%
3,100 Lear Corp.* 159,069
- --------------------------------------------------------------------------------
BANKS - 7.0%
2,300 Chase Manhattan Corp. 173,650
2,300 NationsBank Corp. 175,950
1,200 Republic of New York Corp. 75,525
----------
425,125
- --------------------------------------------------------------------------------
CHEMICAL PRODUCTS - 4.9%
3,100 IMC Global, Inc. 93,387
3,900 Union Carbide Corp. 208,163
----------
301,550
- --------------------------------------------------------------------------------
CONSTRUCTION/ENVIRONMENTAL SERVICES - 3.3%
4,000 Fluor Corp. 204,000
- --------------------------------------------------------------------------------
DEPARTMENT STORES - 2.1%
2,100 Sears Roebuck & Co. 128,231
- --------------------------------------------------------------------------------
ENERGY REFINING & MARKETING - 5.1%
2,500 Enron Corp. 135,156
6,100 Tosco Corp. 179,188
----------
314,344
- --------------------------------------------------------------------------------
FOREST PRODUCTS - 2.6%
2,700 Georgia Pacific Corp. 159,131
- --------------------------------------------------------------------------------
HEALTHCARE MANAGEMENT - 8.1%
3,300 Aetna, Inc. 251,212
3,800 Foundation Health Systems, Inc.* 100,225
4,700 Tenet Healthcare Corp.* 146,875
----------
498,312
- --------------------------------------------------------------------------------
INSURANCE BROKERS & OTHER INSURANCE - 3.4%
2,400 Loews Corp. 209,100
- --------------------------------------------------------------------------------
INSURANCE-LIFE - 4.8%
1,300 American General Corp. 92,544
2,900 Cigna Corp. 200,100
----------
292,644
- --------------------------------------------------------------------------------
INTEGRATED OIL - 2.6%
2,700 Texaco, Inc. 161,156
- --------------------------------------------------------------------------------
LOGISTICS/RAIL - 2.6%
5,600 Canadian Pacific, Ltd. 158,900
- --------------------------------------------------------------------------------
PERSONAL COMPUTERS AND PERIPHERALS - 5.8%
11,000 Quantum Corp.* 228,250
5,300 Seagate Technology, Inc.* 126,206
----------
354,456
- --------------------------------------------------------------------------------
STEEL - 1.2%
3,900 Ispat International NV* $ 73,125
- --------------------------------------------------------------------------------
SUPERMARKETS - 0.4%
500 Supervalu, Inc. 22,188
- --------------------------------------------------------------------------------
TIRE & OTHER RELATED RUBBER PRODUCTS - 2.2%
2,100 Goodyear Tire & Rubber Co. 135,319
- --------------------------------------------------------------------------------
TOBACCO - 8.6%
5,000 Philip Morris Companies, Inc. 196,875
9,200 RJR Nabisco Holdings, Inc. 218,500
4,100 UST, Inc. 110,700
----------
526,075
- --------------------------------------------------------------------------------
UTILITIES - 3.4%
4,600 Entergy Corp. 132,250
2,200 Unicom Corp. 77,138
----------
209,388
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $4,775,558) $4,824,394
- --------------------------------------------------------------------------------
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
U.S. TREASURY OBLIGATIONS - 1.2%
U.S. Treasury Bills(a)
$75,000 5.06% 09/17/98 $ 74,202
- --------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $74,182) $ 74,202
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 21.2%
Joint Repurchase Agreement Account(a)
$1,300,000 5.83% 07/01/98 $1,300,000
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $1,300,000) $1,300,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $6,149,740)(B) $6,198,596
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION:
Gross unrealized gain for investments in which
value exceeds cost $ 228,389
Gross unrealized loss for investments in which
cost exceeds value (191,410)
- --------------------------------------------------------------------------------
Net unrealized gain $ 36,979
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 3
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND
Statement of Investments
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Futures contracts open at June 30, 1998 are as follows:
NUMBER OF
CONTRACTS SETTLEMENT UNREALIZED
TYPE LONG(C) MONTH GAIN
- --------------------------------------------------------------------------------
S&P 500 Stock Index 3 September 1998 $17,564
- --------------------------------------------------------------------------------
* Non-income producing security.
(a) The security is being segregated as collateral for open futures contracts
and futures margin requirements.
(b) The aggregate cost for federal income tax purposes is $6,161,617.
(c) Each S&P 500 Stock Index represents $250,000 in notional par value. The
total net notional amount and net market value are $750,000 and $857,250,
respectively. The determination of notional amounts as presented here are
indicative only of volume of activity and not a measure of market risk.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
4 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE U.S. EQUITY FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Dear Shareholders,
ON BEHALF OF GOLDMAN SACHS, IT IS A PLEASURE TO WELCOME YOU AS A SHAREHOLDER
IN THE GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE U.S. EQUITY FUND.
IN THE FUTURE, YOU WILL RECEIVE ANNUAL AND SEMIANNUAL REPORTS THAT DESCRIBE THE
FUND'S PERFORMANCE, AS WELL AS INFORMATION REGARDING SPECIFIC HOLDINGS. THIS
SEMIANNUAL REPORT COVERS THE SHORT PERIOD FROM FEBRUARY 13, 1998, WHEN THE FUND
BEGAN OPERATIONS, THROUGH JUNE 30, 1998.
Market Review
The U.S. stock market generated strong performance during
the period under review, though not without an increase in
overall market volatility. The mantle of market leadership
was assumed by mega-cap stocks -- the largest and most liq-
uid stocks in the Standard & Poor's 500 Index. Several fac-
tors -- including ongoing Asian market turbulence, benign
inflation and concern in the face of a mature bull mar-
ket -- conspired to make mega-caps the investment of choice
among U.S. investors. Ultimately, their performance far
outstripped that of the broader market during the brief pe-
riod under review.
Performance Review
From February 13, 1998 through June 30, 1998, the Fund
generated a 12.60% cumulative total return, outperforming the
11.34% cumulative total return of its benchmark, the
Standard & Poor's 500 Index (with dividends reinvested) by
nearly 130 basis points.
Throughout the fiscal period, successful stock selection
helped the Fund's returns as the quantitative model empha-
sized stocks with characteristics that fared well in the
macroeconomic environment. Early on, of the three invest-
ment themes considered by our model -- Value, Momentum and
Low Risk -- the Fund favored Value and Low Risk, given in-
creased market volatility, low equity risk premiums and a
slowing economy.
Investment Objective
The Fund seeks long-term capital growth and dividend income
through a broadly diversified portfolio of large-cap and
blue-chip equity securities representing all major sectors
of the U.S. economy.
The portfolio employs a disciplined approach that combines
fundamental investment research provided by Goldman Sachs
Global Investment Research Department and consensus opin-
ions with quantitative analysis generated by the Asset Man-
agement Division's proprietary model. This quantitative
system evaluates each stock using many different criteria,
including valuation measures, growth expectations, earnings
momentum and risk profile. It also objectively analyzes the
impact of current economic conditions on different types.
While maintaining a profile close to that of the benchmark,
those stocks ranked highly by both the quantitative model,
the
5
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE U.S. EQUITY FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Goldman Sachs Global Investment Research Department and
consensus opinion are selected for the portfolio.
Sector Performance
In general, the Fund's sector exposure approximated that of
the S&P 500 Index. It favored defensive, value stocks, as
demonstrated by a slight overweighting in "cheap" sec-
tors -- for example, consumer durables -- and less volatile
sectors such as energy. The Fund maintained a slight
underweighting in "pricey" sectors, including consumer
nondurables, and cyclical sectors such as basic industry.
These differences stem from the Fund's bottom-up stock
selection process, not from economic forecasts for specific
sectors.
Portfolio Composition
Top 10 Portfolio Holdings as of June 30, 1998*
<TABLE>
<CAPTION>
PERCENTAGE OF
COMPANY LINE OF BUSINESS NET ASSETS
------- ---------------- -------------
<S> <C> <C>
General Electric Co. Electric Equipment 3.1%
Hertz Corp. Auto/Vehicle 1.9
Travelers Property & Casualty Corp. Insurance-Property and Casualty 1.9
Exxon Corp. Integrated Oil 1.8
Microsoft Corp. Software & Services 1.6
Nationwide Financial Services, Inc. Insurance-Property and Casualty 1.6
American International Group, Inc. Insurance-Property and Casualty 1.5
AMR Corp. Airlines 1.5
NationsBank Corp. Banks 1.4
Xerox Corp. Enterprise Systems 1.4
</TABLE>
* The top 10 holdings may not be representative of the
Fund's future investments.
Portfolio Highlights
The CORE investment process analyzes each stock based upon
its value, momentum and risk characteristics. As mentioned
previously, throughout the period under review, the Fund
placed above-average emphasis on the Value theme and
underweighted the Momentum theme. This stance was assumed
given the cautionary conditions that have been in existence
for several months, including increased market volatility,
low risk premiums and a slowing economy.
.In general, the position on Value and Momentum, combined
with the qualitative stock insights provided by the Goldman
Sachs Global Investment Research Department and consensus
opinion produced positive performance results.
.The Low Risk theme generated slightly mixed results, as
some relatively volatile stocks turned in better-than-ex-
pected performance.
6
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE U.S. EQUITY FUND
Outlook
The model uses a dynamic weighting scheme that translates
current economic conditions into tangible data that
identifies which factors should be emphasized or avoided. The
current market is characterized by a strong but slowing
economy, a low dividend yield, a flat yield curve, below-
average equity risk and market default premiums, and high
market volatility. Therefore, the Fund's management team is
placing a higher-than-average weight on value and fundamental
research factors (such as quality of management) and less
emphasis on growth and momentum.
Goldman Sachs Asset Management thanks you for your
investment and looks forward to your continued confidence.
Goldman Sachs Quantitative Equity Management Team
June 30, 1998
7
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE U.S. EQUITY FUND
Statement of Investments
June 30, 1998 (Unaudited)
SHARES DESCRIPTION VALUE
COMMON STOCKS - 96.9%
ADVERTISING & MARKETING - 0.4%
600 Valassis Communications, Inc.* $ 23,138
-------------------------------------------------------------------------------
AEROSPACE/DEFENSE - 2.2%
1,300 General Motors Corp. Class H 61,262
200 Raytheon Co.* 11,525
400 Sundstrand Corp. 22,900
300 Textron, Inc. 21,506
300 United Technologies Corp. 27,750
----------
144,943
-------------------------------------------------------------------------------
AGRICULTURE/HEAVY EQUIPMENT - 1.7%
500 Case Corp. 24,125
700 Caterpillar, Inc. 37,012
500 Deere & Co. 26,437
200 Nacco Industries, Inc. 25,850
----------
113,424
-------------------------------------------------------------------------------
AIR FREIGHT, TRUCK & OTHER - 1.4%
2,000 Airborne Freight Corp. 69,875
400 Ryder Systems, Inc. 12,625
200 Seacor Smit, Inc.* 12,263
----------
94,763
-------------------------------------------------------------------------------
AIRLINES - 3.1%
400 Alaska Air Group, Inc.* 21,825
2,100 America West Holdings Corp. Class B* 59,981
1,200 AMR Corp.* 99,900
200 Delta Air Lines, Inc. 25,850
----------
207,556
-------------------------------------------------------------------------------
AUTO SUPPLIERS - 0.4%
300 Arvin Industries, Inc. 10,894
800 Coltec Industries, Inc.* 15,900
----------
26,794
-------------------------------------------------------------------------------
AUTO/VEHICLE - 4.0%
1,100 Ford Motor Co. 64,900
1,100 General Motors Corp. 73,494
2,900 Hertz Corp. 128,506
----------
266,900
-------------------------------------------------------------------------------
BANKS - 7.1%
400 American Express Co. 45,600
300 Bank of New York, Inc. 18,206
600 BankAmerica Corp. 51,862
800 Chase Manhattan Corp. 60,400
200 Citicorp 29,850
300 Comerica, Inc. 19,875
200 First Chicago NBD Corp. 17,725
700 First Union Corp. 40,775
500 HF Ahmanson & Co. 35,500
1,200 NationsBank Corp. 91,800
600 U.S. Bancorp 25,800
100 Wells Fargo & Co. 36,900
----------
474,293
-------------------------------------------------------------------------------
CHEMICAL PRODUCTS - 2.5%
1,300 Crompton & Knowles Corp. $ 32,744
300 Dow Chemicals Co. 29,006
500 Du Pont (E.I.) de Nemours & Co. 37,312
100 IMC Global, Inc. 3,013
1,500 Lyondell Petrochemical Co. 45,656
600 Solutia, Inc. 17,213
----------
164,944
-------------------------------------------------------------------------------
COMMERCIAL PRODUCTS - 1.7%
500 Allied Signal, Inc. 22,187
1,000 Herman Miller, Inc. 24,313
200 Tyco International, Ltd. 12,600
2,500 Wellman, Inc. 56,719
----------
115,819
-------------------------------------------------------------------------------
COMMERCIAL SERVICES - 0.2%
500 Interim Services, Inc.* 16,063
-------------------------------------------------------------------------------
CONSTRUCTION/ENVIRONMENTAL SERVICES - 0.7%
300 ACX Technologies, Inc.* 6,525
300 Fluor Corp. 15,300
400 USG Corp.* 21,650
----------
43,475
-------------------------------------------------------------------------------
CONSUMER STAPLES - 1.8%
600 Gillette Co. 34,013
900 Procter & Gamble Co. 81,956
----------
115,969
-------------------------------------------------------------------------------
DEPARTMENT STORES - 2.8%
1,600 Dayton Hudson Corp. 77,600
800 Federated Department Stores, Inc.* 43,050
1,100 Walmart Stores, Inc. 66,825
----------
187,475
-------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 3.5%
200 Aeroquip-Vickers, Inc. 11,675
300 American Standard Companies, Inc.* 13,406
2,300 General Electric Co. 209,300
----------
234,381
-------------------------------------------------------------------------------
ENERGY REFINING & MARKETING - 0.9%
450 Columbia Gas Systems, Inc. 25,031
400 Sun Company, Inc. 15,525
500 USX-Marathon Group, Inc. 17,156
----------
57,712
-------------------------------------------------------------------------------
ENTERPRISE SYSTEMS - 3.6%
600 Ceridian Corp.* 35,250
400 Hewlett Packard Co. 23,950
600 International Business Machines Corp. 68,888
800 Unisys Corp.* 22,600
900 Xerox Corp. 91,463
----------
242,151
-------------------------------------------------------------------------------
8 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE U.S. EQUITY FUND
SHARES DESCRIPTION VALUE
COMMON STOCKS - (CONTINUED)
FOOD & BEVERAGES - 3.4%
1,800 Archer Daniels-Midland Co. $ 34,875
1,000 Coca Cola Co. 85,500
800 Interstate Bakeries Corp. 26,550
800 Pepsico, Inc. 32,950
600 Unilever NV 47,363
----------
227,238
-------------------------------------------------------------------------------
HEALTH SUPPLIERS/SERVICES - 1.4%
400 Bergen Brunswig Corp. 18,550
300 Cardinal Health, Inc. 28,125
600 Johnson & Johnson 44,250
----------
90,925
-------------------------------------------------------------------------------
HEALTHCARE MANAGEMENT - 2.5%
4,400 Beverly Enterprises, Inc.* 60,775
900 Columbia HCA Healthcare Corp. 26,212
500 Integrated Health Services, Inc. 18,750
600 Lincare Holdings, Inc.* 25,238
800 Tenet Healthcare Corp.* 25,000
100 Wellpoint Health Networks, Inc.* 7,400
----------
163,375
-------------------------------------------------------------------------------
HOME BUILDERS - 0.3%
500 Fleetwood Enterprises, Inc. 20,000
-------------------------------------------------------------------------------
HOME FURNISHING & SERVICES - 0.2%
600 Pier 1 Imports, Inc. 14,325
-------------------------------------------------------------------------------
HOTELS & RESTAURANTS - 0.2%
400 Tricon Global Restaurants, Inc.* 12,675
-------------------------------------------------------------------------------
INSURANCE BROKERS & OTHER INSURANCE - 0.2%
200 MBIA, Inc. 14,975
-------------------------------------------------------------------------------
INSURANCE-LIFE - 3.7%
700 Equitable Companies, Inc. 52,456
2,100 Nationwide Financial Services, Inc. 107,100
600 Protective Life Corp. 22,013
1,100 Travelers Group, Inc. 66,688
----------
248,257
-------------------------------------------------------------------------------
INSURANCE-PROPERTY AND CASUALTY - 5.6%
200 Allmerica Financial Corp. 13,000
900 Allstate Corp. 82,406
700 American International Group, Inc. 102,200
300 Conseco, Inc. 14,025
400 Everest Reinsurance Holdings, Inc. 15,375
200 Hartford Financial Services Group, Inc. 22,875
2,900 Travelers Property & Casualty Corp. 124,338
----------
374,219
-------------------------------------------------------------------------------
INTEGRATED OIL - 3.9%
1,700 Exxon Corp. 121,231
700 Mobil Corp. 53,638
1,000 Royal Dutch Petroleum ADR 54,813
500 Texaco, Inc. 29,844
----------
259,526
-------------------------------------------------------------------------------
INVESTMENT BROKERS & MANAGERS - 4.1%
1,500 Bear Stearns Companies Inc. 85,312
500 Lehman Brothers Holdings, Inc. 38,781
800 Merrill Lynch & Co., Inc. 73,800
800 Morgan Stanley, Dean Witter, Discover and Co. 73,100
----------
270,993
-------------------------------------------------------------------------------
LOCAL EXCHANGE COMPANIES - 1.9%
700 Ameritech Corp. 31,412
300 Bellsouth Corp. 20,137
1,300 GTE Corp. 72,312
----------
123,861
-------------------------------------------------------------------------------
LOGISTICS/RAIL - 0.1%
200 Gatx Corp. 8,775
-------------------------------------------------------------------------------
MEDIA & COMMUNICATIONS - 3.2%
400 AH Belo Corp. 9,750
1,200 AT&T Corp. 68,550
300 Meredith Corp. 14,081
400 Sprint Corp. 28,200
600 TCI Group* 23,063
400 Walt Disney Co. 42,025
600 Worldcom, Inc.* 29,063
----------
214,732
-------------------------------------------------------------------------------
OIL & GAS SERVICES - 0.8%
600 BJ Services Co.* 17,437
300 Camco International, Inc. 23,362
500 Ensco International, Inc. 8,687
----------
49,486
-------------------------------------------------------------------------------
PACKAGING - 0.5%
200 Aptargroup, Inc. 12,437
500 Owens-Illinois, Inc.* 22,375
----------
34,812
-------------------------------------------------------------------------------
PERSONAL COMPUTERS AND PERIPHERALS - 0.7%
500 Compaq Computer Corp. 14,187
500 Lexmark International Group, Inc.* 30,500
----------
44,687
-------------------------------------------------------------------------------
PHARMACEUTICALS - 5.6%
1,000 Abbott Laboratories 40,875
800 American Home Products Corp. 41,400
700 Bristol-Myers Squibb Co. 80,456
400 Eli Lilly & Co. 26,425
600 Merck & Co. 80,250
-------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 9
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE U.S. EQUITY FUND
Statement of Investments
June 30, 1998 (Unaudited)
SHARES DESCRIPTION VALUE
COMMON STOCKS - (CONTINUED)
PHARMACEUTICALS - (CONTINUED)
400 Pfizer, Inc. $ 43,475
400 Schering Plough Corp. 36,650
300 Warner Lambert Co. 20,813
----------
370,344
-------------------------------------------------------------------------------
RETAIL - 2.0%
700 Best Buy Company, Inc.* 25,287
1,300 Ingram Micro, Inc.* 57,525
1,600 Zale Corp.* 50,900
----------
133,712
-------------------------------------------------------------------------------
SEMICONDUCTORS - 0.8%
700 Intel Corp. 51,888
-------------------------------------------------------------------------------
SOFTWARE & SERVICES - 3.4%
300 Automatic Data Processing, Inc. 21,862
1,400 Dun & Bradstreet Corp.* 50,575
1,500 Learning Company, Inc.* 44,438
1,000 Microsoft Corp.* 108,375
----------
225,250
-------------------------------------------------------------------------------
SPECIALTY FINANCE & AGENCIES - 2.9%
445 Associates First Capital Corp. 34,209
1,600 C.I.T. Group, Inc. 60,000
1,000 Federal National Mortgage Association 60,750
500 Providian Financial Corp. 39,281
----------
194,240
-------------------------------------------------------------------------------
SPECIALTY RETAIL - 2.5%
1,400 Abercrombie & Fitch Co.* 61,600
400 American Greetings Corp. 20,375
500 Fingerhut Companies, Inc. 16,500
1,000 Intimate Brands, Inc. 27,563
500 Ross Stores, Inc. 21,500
800 TJX Companies, Inc. 19,300
----------
166,838
-------------------------------------------------------------------------------
STEEL - 1.2%
1,100 AK Steel Holding Corp. 19,662
3,200 Armco, Inc.* 20,400
3,300 Bethlehem Steel Corp.* 41,044
----------
81,106
-------------------------------------------------------------------------------
SUPERMARKETS - 1.9%
300 Albertson's Inc. 15,544
3,600 Food Lion, Inc. 38,250
800 Kroger Co.* 34,300
1,000 Safeway, Inc.* 40,688
----------
128,782
-------------------------------------------------------------------------------
TEXTILES - 0.5%
500 Footstar, Inc.* 24,000
200 Sara Lee Corp. 11,188
----------
35,188
-------------------------------------------------------------------------------
TIRE & OTHER RELATED RUBBER PRODUCTS - 0.2%
200 Goodyear Tire & Rubber Co. 12,888
-------------------------------------------------------------------------------
TOBACCO - 1.4%
1,600 Philip Morris Companies, Inc. 63,000
500 RJR Nabisco Holdings, Inc. 11,875
400 Universal Corp. 14,950
----------
89,825
-------------------------------------------------------------------------------
UTILITIES - 3.8%
700 Dominion Resources, Inc. 28,525
500 Duke Energy Co. 29,625
900 Edison International, Inc. 26,606
300 FPL Group, Inc. 18,900
900 Pinnacle West Capital Co. 40,500
1,800 Texas Utilities Co. 74,925
900 Unicom Corp. 31,556
----------
250,637
-------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $5,865,231) $6,443,359
OTHER INVESTMENT - 2.4%
1,400 Standard & Poors Depository Receipt* $ 158,725
-------------------------------------------------------------------------------
TOTAL OTHER INVESTMENT
(COST $153,764) $ 158,725
-------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $6,018,995)(A). $6,602,084
-------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION:
Gross unrealized gain for investments in
which value exceeds cost $ 687,886
Gross unrealized loss for investments in
which cost exceeds value (104,797)
-------------------------------------------------------------------------------
Net unrealized gain $ 583,089
-------------------------------------------------------------------------------
* Non-income producing security.
(a) The amount stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE LARGE CAP GROWTH FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Dear Shareholders,
ON BEHALF OF GOLDMAN SACHS, IT IS A PLEASURE TO WELCOME YOU AS A SHAREHOLDER
IN THE GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE LARGE CAP GROWTH FUND.
IN THE FUTURE, YOU WILL RECEIVE ANNUAL AND SEMIANNUAL REPORTS THAT DESCRIBE
THE FUND'S PERFORMANCE, AS WELL AS INFORMATION REGARDING SPECIFIC HOLDINGS.
THIS SEMIANNUAL REPORT COVERS THE SHORT PERIOD FROM FEBRUARY 13, 1998, WHEN
THE FUND BEGAN OPERATIONS, THROUGH JUNE 30, 1998.
Market Review
The U.S. stock market generated strong performance during
the period under review, though not without an increase in
overall market volatility. The mantle of market leadership
was assumed by mega-cap stocks -- the largest and most liq-
uid stocks in the Standard & Poor's 500 Index. Several fac-
tors -- including ongoing Asian market turbulence, benign
inflation and concern in the face of a mature bull mar-
ket -- conspired to make mega-caps the investment of choice
among U.S. investors. Ultimately, their performance far
outstripped that of the broader market during the brief pe-
riod under review.
Performance Review
From February 13, 1998 through June 30, 1998, the Fund gen-
erated a 12.60% cumulative total return, outperforming the
11.65% cumulative total return generated by its benchmark,
the Russell 1000 Growth Index, by nearly 100 basis points.
Investment Objective
The Fund seeks long-term capital growth, primarily through
a broadly diversified portfolio of equity securities of
large cap U.S. issuers that are expected to have better
prospects for earnings growth than the growth rate of the
general domestic economy. Dividend income is a secondary
consideration.
The portfolio employs a disciplined approach that combines
fundamental investment research provided by Goldman Sachs
Global Investment Research Department and consensus opin-
ions with quantitative analysis generated by the Asset Man-
agement Division's proprietary model. This quantitative
system evaluates each stock using many different criteria,
including valuation measures, growth expectations, earnings
momentum and risk profile. It also objectively analyses the
impact of current economic conditions on different types of
stocks to determine where the emphasis should be placed.
While maintaining a profile close to that of the benchmark,
those stocks ranked highly by both the quantitative model,
the Goldman Sachs Global Investment Research Department and
consensus opinion are selected for the portfolio.
11
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE LARGE CAP GROWTH FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Sector Performance
Throughout the period, the Fund's sector exposures were fairly
similar to those of its benchmark. This is residual to the
management team's bottom up process, not the result of an explicit
top-down decision to overweight or under-weight any given sector.
Portfolio Composition
Top 10 Portfolio Holdings as of June 30, 1998*
PERCENTAGE OF
COMPANY LINE OF BUSINESS NET ASSETS
------- ---------------- -------------
Microsoft Corp. Software & Services 3.5%
American
International
Group, Inc. Insurance-Property and Casualty 3.1
General Electric
Co. Electric Equipment 2.7
Travelers Group,
Inc. Insurance-Life 2.5
Dayton Hudson
Corp. Department Stores 2.2
Merrill Lynch &
Company, Inc. Investment Brokers & Managers 2.1
Pfizer, Inc. Pharmaceuticals 2.0
Intel Corp. Semiconductors 1.9
Abbott
Laboratories Pharmaceuticals 1.9
Coca Cola Co. Food & Beverage 1.7
* The top 10 holdings may not be representative of the
Fund's future investments.
Portfolio Highlights
The CORE investment process analyses each stock based upon its
value, momentum and risk characteristics. Throughout the period
under review, the Fund placed above-average em-phasis on the Value
theme and underweighted the Momentum theme. This stance was
assumed given the cautionary condi-tions that have been in
existence for several months, in-cluding increased market
volatility, low risk premiums and a slowing economy.
.In general, the position on Value and Momentum, combined with the
qualitative stock insights provided by the Goldman Sachs Global
Investment Research Department and consensus opinion, produced
positive performance results.
.The Low Risk theme, however, generated slightly mixed results, as
some relatively volatile stocks turned in better-than-expected
performance.
Outlook
The model uses a dynamic weighting scheme that translates current
economic conditions into tangible data that identifies which
factors should be emphasized or avoided. The current market is
characterized by a strong but slowing economy, a low dividend
yield, a flat yield curve, below-average equity risk and market
default premiums, and high market volatility. Therefore,
12
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE LARGE CAP GROWTH FUND
the Fund's management team is placing a higher-than-average weight on
value and fundamental research factors (such as quality of
management) and less emphasis on growth and momentum.
Goldman Sachs Asset Management thanks you for your investment and
look forward to your continued confidence.
Goldman Sachs Quantitative Equity Management Team
June 30, 1998
13
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE LARGE CAP GROWTH FUND
Statement of Investments
June 30, 1998 (Unaudited)
SHARES DESCRIPTION VALUE
COMMON STOCKS - 95.6%
ADVERTISING & MARKETING - 0.6%
900 Valassis Communications, Inc.* $ 34,706
-------------------------------------------------------------------------
AEROSPACE/DEFENSE - 1.2%
1,300 General Motors Corp. Class H 61,262
300 Gulfstream Aerospace Corp.* 13,950
----------
75,212
-------------------------------------------------------------------------
AGRICULTURE/HEAVY EQUIPMENT - 1.3%
900 Caterpillar, Inc. 47,587
600 Dover Corp. 20,550
100 Nacco Industries, Inc. 12,925
----------
81,062
-------------------------------------------------------------------------
AIRFREIGHT, TRUCK & OTHER - 1.6%
2,500 Airborne Freight Corp. 87,344
200 FDX Corp.* 12,550
----------
99,894
-------------------------------------------------------------------------
AIRLINES - 3.5%
800 Alaska Air Group, Inc.* 43,650
2,100 America West Holdings Corp.* 59,981
600 AMR Corp.* 49,950
300 Delta Air Lines, Inc. 38,775
300 UAL Corp.* 23,400
----------
215,756
-------------------------------------------------------------------------
AUTO SUPPLIERS - 0.4%
1,100 Coltec Industries, Inc.* 21,862
-------------------------------------------------------------------------
AUTO/VEHICLE - 2.9%
200 Ford Motor Co. 11,800
500 General Motors Corp. 33,406
2,200 Hertz Corp. 97,487
1,200 Navistar International Corp.* 34,650
----------
177,343
-------------------------------------------------------------------------
BANKS - 2.2%
300 American Express Co. 34,200
300 BankAmerica Corp. 25,931
1,800 Dime Bancorp, Inc. 53,887
300 NationsBank Corp. 22,950
----------
136,968
-------------------------------------------------------------------------
CHEMICAL PRODUCTS - 1.3%
300 Avery Dennison Corp. 16,125
200 Dow Chemicals Co. 19,337
600 IMC Global, Inc. 18,075
900 Solutia, Inc. 25,819
----------
79,356
-------------------------------------------------------------------------
COMMERCIAL PRODUCTS - 0.9%
400 Herman Miller, Inc. 9,725
400 Tyco International, Ltd. 25,200
800 Wellman, Inc. 18,150
----------
53,075
-------------------------------------------------------------------------
COMMERCIAL SERVICES - 0.7%
800 Interim Services, Inc.* 25,700
400 Trinity Industries, Inc. 16,600
----------
42,300
-------------------------------------------------------------------------
CONSTRUCTION/ENVIRONMENTAL SERVICES - 0.6%
700 ACX Technologies, Inc.* 15,225
400 USG Corp.* 21,650
----------
36,875
-------------------------------------------------------------------------
CONSUMER STAPLES - 3.4%
900 Alberto Culver Co. Class B 26,100
1,400 Gillette Co. 79,363
1,100 Procter & Gamble Co. 100,169
----------
205,632
-------------------------------------------------------------------------
DEPARTMENT STORES - 4.4%
2,800 Dayton Hudson Corp. 135,800
800 Federated Department Stores, Inc.* 43,050
400 Fred Meyer, Inc.* 17,000
800 Proffitt's, Inc.* 32,300
700 Walmart Stores, Inc. 42,525
----------
270,675
-------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 3.0%
300 Aeroquip-Vickers, Inc. 17,512
1,800 General Electric Co. 163,800
----------
181,312
-------------------------------------------------------------------------
ENERGY REFINING & MARKETING - 0.9%
600 Columbia Gas Systems, Inc. 33,375
600 Sun Company, Inc. 23,288
----------
56,663
-------------------------------------------------------------------------
ENTERPRISE SYSTEMS - 2.9%
400 Ceridian Corp.* 23,500
600 Hewlett-Packard Co. 35,925
200 International Business Machines Corp. 22,963
600 Sun Microsystems, Inc.* 26,063
1,300 Unisys Corp.* 36,725
300 Xerox Corp. 30,487
----------
175,663
-------------------------------------------------------------------------
ENTERTAINMENT & LEISURE - 0.8%
1,200 Carnival Cruise Lines Corp. 47,550
-------------------------------------------------------------------------
FOOD & BEVERAGES - 2.5%
1,300 Archer Daniels-Midland Co. 25,187
1,200 Coca Cola Co. 102,600
700 Interstate Bakeries Corp. 23,231
----------
151,018
-------------------------------------------------------------------------
HEALTH SUPPLIERS/SERVICES - 3.3%
1,000 Bergen Brunswig Corp. 46,375
1,100 Biomet, Inc. 36,369
200 Cardinal Health, Inc. 18,750
-------------------------------------------------------------------------
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE LARGE CAP GROWTH FUND
Shares Description Value
COMMON STOCKS - (CONTINUED)
HEALTH SUPPLIERS/SERVICES - (CONTINUED)
400 Guidant Corp. $ 28,525
700 Johnson & Johnson 51,625
900 Sybron International Corp.* 22,725
--------
204,369
-------------------------------------------------------------------------
HEALTHCARE MANAGEMENT - 3.3%
2,900 Beverly Enterprises, Inc.* 40,056
1,700 Columbia HCA Healthcare Corp. 49,512
400 Integrated Health Services, Inc. 15,000
600 Lincare Holdings, Inc.* 25,238
700 Tenet Healthcare Corp.* 21,875
700 Wellpoint Health Networks, Inc.* 51,800
--------
203,481
-------------------------------------------------------------------------
HOME BUILDERS - 0.1%
200 Fleetwood Enterprises, Inc. 8,000
-------------------------------------------------------------------------
HOME FURNISHING & SERVICES - 1.1%
700 Ethan Allen Interiors, Inc. 34,956
1,300 Pier 1 Imports, Inc. 31,038
--------
65,994
-------------------------------------------------------------------------
INSURANCE BROKERS & OTHER INSURANCE - 0.2%
200 AMBAC, Inc. 11,700
-------------------------------------------------------------------------
INSURANCE-LIFE - 4.3%
700 Equitable Companies, Inc. 52,456
400 Nationwide Financial Services, Inc. 20,400
600 Protective Life Corp. 22,013
300 SunAmerica, Inc. 17,231
2,500 Travelers Group, Inc. 151,563
--------
263,663
-------------------------------------------------------------------------
INSURANCE-PROPERTY AND CASUALTY - 4.2%
1,300 American International Group, Inc. 189,800
400 Conseco, Inc. 18,700
1,100 Travelers Property & Casualty Corp. 47,163
--------
255,663
-------------------------------------------------------------------------
INVESTMENT BROKERS & MANAGERS - 6.4%
1,600 Bear Stearns Companies Inc. 91,000
600 Donaldson, Lufkin & Jenrette, Inc. 30,488
500 Lehman Brothers Holdings, Inc. 38,781
1,400 Merrill Lynch & Company, Inc. 129,150
1,100 Morgan Stanley, Dean Witter, Discover and Co. 100,513
--------
389,932
-------------------------------------------------------------------------
LOCAL EXCHANGE COMPANIES - 0.9%
1,000 GTE Corp. 55,625
-------------------------------------------------------------------------
MACHINERY - 0.1%
200 Kennametal, Inc. 8,350
-------------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
MEDIA & COMMUNICATIONS - 1.5%
100 MCI Communications, Inc. 5,813
800 Walt Disney Co. 84,050
--------
89,863
-------------------------------------------------------------------------
OIL & GAS EXPLORATION - 0.2%
1,000 Santa Fe Energy Resources, Inc.* 10,750
-------------------------------------------------------------------------
OIL & GAS SERVICES - 1.0%
400 Camco International, Inc. 31,150
1,300 Ensco International, Inc. 22,587
500 Global Marine, Inc.* 9,344
--------
63,081
-------------------------------------------------------------------------
PACKAGING - 0.2%
300 Owens-Illinois, Inc.* 13,425
-------------------------------------------------------------------------
PERSONAL COMPUTERS AND PERIPHERALS - 1.7%
100 Banctec, Inc.*(a) 2,312
2,000 Compaq Computer Corp. 56,750
700 Lexmark International Group, Inc.* 42,700
--------
101,762
-------------------------------------------------------------------------
PHARMACEUTICALS - 8.0%
2,800 Abbott Laboratories 114,450
600 American Home Products Corp. 31,050
400 Eli Lilly & Co. 26,425
700 ICN Pharmaceuticals, Inc. 31,981
300 Merck & Co. 40,125
1,100 Pfizer, Inc. 119,556
700 Schering-Plough Corp. 64,138
900 Warner-Lambert Co. 62,438
--------
490,163
-------------------------------------------------------------------------
RECREATIONAL PRODUCTS - 0.4%
600 Mattel, Inc. 25,388
-------------------------------------------------------------------------
RETAIL - 3.0%
1,300 Best Buy Company, Inc.* 46,962
2,300 Ingram Micro, Inc.* 101,775
100 Tiffany & Co. 4,800
1,000 Zale Corp.* 31,813
--------
185,350
-------------------------------------------------------------------------
SEMICONDUCTORS - 2.6%
1,600 Intel Corp. 118,600
1,000 Tech Data Corp.* 42,875
--------
161,475
-------------------------------------------------------------------------
SOFTWARE & SERVICES - 6.9%
1,200 Cadence Design Systems, Inc.* 37,500
300 Computer Associates International, Inc. 16,669
1,900 Dun & Bradstreet Corp.* 68,637
2,800 Learning Company, Inc.* 82,950
2,000 Microsoft Corp.* 216,750
--------
422,506
-------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE LARGE CAP GROWTH FUND
Statement of Investments
June 30, 1998 (Unaudited)
Shares Description Value
COMMON STOCKS - (CONTINUED)
SPECIALTY FINANCE & AGENCIES - 2.2%
1,600 C.I.T. Group, Inc. $ 60,000
1,200 Federal National Mortgage Association 72,900
----------
132,900
---------------------------------------------------------------------------
SPECIALTY RETAIL - 3.3%
1,300 Abercrombie & Fitch Co.* 57,200
500 Gap, Inc. 30,812
400 Intimate Brands, Inc. 11,025
1,400 Ross Stores, Inc. 60,200
1,800 TJX Companies, Inc. 43,425
----------
202,662
---------------------------------------------------------------------------
STEEL - 0.7%
900 AK Steel Holding Corp. 16,087
2,000 Bethlehem Steel Corp.* 24,875
----------
40,962
---------------------------------------------------------------------------
SUPERMARKETS - 1.9%
200 CVS Corp. 7,788
1,500 Food Lion, Inc. 15,937
700 Kroger Co.* 30,013
1,600 Safeway, Inc.* 65,100
----------
118,838
---------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 0.2%
200 Tellabs, Inc.* 14,325
---------------------------------------------------------------------------
TEXTILES - 1.1%
600 Footstar, Inc.* 28,800
1,000 Jones Apparel Group, Inc.* 36,563
----------
65,363
---------------------------------------------------------------------------
TOBACCO - 1.7%
2,100 Philip Morris Companies, Inc. 82,688
600 Universal Corp. 22,425
----------
105,113
---------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $5,283,213) $5,853,625
---------------------------------------------------------------------------
OTHER INVESTMENTS - 1.8%
1,000 Standard & Poors Depository Receipt* $ 113,375
---------------------------------------------------------------------------
TOTAL OTHER INVESTMENTS
(COST $109,831) $ 113,375
---------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $5,393,036)(B) $5,967,000
---------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION:
Gross unrealized gain for investments in
which value exceeds cost $ 701,532
Gross unrealized loss for investments in
which cost exceeds value (127,568)
---------------------------------------------------------------------------
Net unrealized gain $ 573,964
---------------------------------------------------------------------------
* Non-income producing security.
(a) There are common stock rights attached to this security.
(b) The amount stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE SMALL CAP EQUITY FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Dear Shareholders,
ON BEHALF OF GOLDMAN SACHS, IT IS A PLEASURE TO WELCOME YOU AS A SHAREHOLDER
IN THE GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE SMALL CAP EQUITY FUND.
IN THE FUTURE, YOU WILL RECEIVE ANNUAL AND SEMIANNUAL REPORTS THAT DESCRIBE THE
FUND'S PERFORMANCE, AS WELL AS INFORMATION REGARDING SPECIFIC HOLDINGS. THIS
SEMIANNUAL REPORT COVERS THE SHORT PERIOD FROM FEBRUARY 13, 1998, WHEN THE
PORTFOLIO BEGAN OPERATIONS, THROUGH JUNE 30, 1998.
Market Review
The U.S. stock market generated strong performance during
the period under review, though not without an increase in
overall market volatility. The mantle of market leadership
was assumed by mega-cap stocks -- the largest and most liq-
uid stocks in the Standard & Poor's 500 Index. Several fac-
tors -- including ongoing Asian market turbulence, benign
inflation and concern in the face of a mature bull mar-
ket -- conspired to make mega-caps the investment of choice
among U.S. investors. Ultimately, their performance far
outstripped that of the broader market during the brief pe-
riod under review. Conversely, small-capitalization stocks
lagged the market over the same period.
Performance Review
From February 13, 1998 through June 30, 1998, the Fund gen-
erated a cumulative total return of 5.20%, outperforming
the 1.45% cumulative total return of its benchmark, the
Russell 2000 Index, by 375 basis points.
Investment Objective
The Fund seeks long-term capital growth, primarily through
a broadly diversified portfolio of equity securities of
U.S. issuers that are included in the Russell 2000 Index at
the time of investment.
The portfolio employs a disciplined approach that combines
fundamental investment research provided by Goldman Sachs
Global Investment Research Department and consensus opin-
ions with quantitative analysis generated by the Asset Man-
agement Division's proprietary model. This quantitative
system evaluates each stock using many different criteria,
including valuation measures, growth expectations, earnings
momentum and risk profile. It also objectively analyzes the
impact of current economic conditions on different types of
stocks to determine where the emphasis should be placed.
While maintaining a profile close to that of the benchmark,
those stocks ranked highly by both the quantitative model,
the Goldman Sachs Global Investment Research Department and
consensus opinion are selected for the portfolio.
17
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE SMALL CAP EQUITY FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Sector Performance
In general, the Fund's sector exposure approximated that of the
Russell 2000 Index. It favored defensive, value stocks, as
demonstrated by a slight overweighting in the less over-valued
sectors -- for example, financials. The portfolio maintained a
slight underweighting in more overpriced sec-tors, including
technology. These differences stem from the Fund's bottom-up stock
selection process, not from economic forecasts for specific
sectors.
Portfolio Composition
Top 10 Portfolio Holdings as of June 30, 1998*
<TABLE>
<CAPTION>
PERCENTAGE OF
COMPANY LINE OF BUSINESS NET ASSETS
------- ---------------- -------------
<S> <C> <C>
FirstFed Financial Corp. Banks 2.3%
Hartford Life, Inc. Insurance-Life 1.7
CNB BancShares, Inc. Banks 1.3
Nationwide Financial Services, Inc. Insurance-Life 1.2
Learning Company, Inc. Software & Services 1.2
U.S. Rentals, Inc. Agriculture/Heavy Equipment 1.1
Delphi Financial Group, Inc. Insurance-Life 1.1
Zale Corp. Retail 1.1
Oneok Inc. Pipelines 1.0
Interim Services, Inc. Commercial Services 1.0
</TABLE>
* The top 10 holdings may not be representative of the Fund's
future investments.
Portfolio Highlights
The CORE investment process analyzes each stock based upon its
value, momentum and risk characteristics. Throughout the period
under review, the Fund placed above-average em-phasis on the Value
theme and underweighted the Momentum theme. We assumed this stance
given the cautionary condi-tions that have been in existence for
several months, in-cluding increased market volatility, low risk
premiums and a slowing economy.
.In general, the position on Value and Momentum, combined with the
qualitative stock insights provided by the Goldman Sachs Global
Investment Research Department and consensus opinion, produced
positive performance results.
.The Low Risk theme, however, generated slightly mixed results, as
some relatively volatile stocks turned in better-than-expected
performance.
18
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE SMALL CAP EQUITY FUND
Outlook
The model uses a dynamic weighting scheme that translates
current economic conditions into tangible data that identi-
fies which factors should be emphasized or avoided. The
current market is characterized by a strong but slowing
economy, a low dividend yield, a flat yield curve, below-
average equity risk and market default premiums, and high
market volatility. As such, the Fund's management team is
placing a higher-than-average weight on value and fundamen-
tal research factors (such as quality of management) and
less emphasis on growth and momentum.
Goldman Sachs Asset Management thanks you for your invest-
ment and looks forward to your continued confidence.
Goldman Sachs Quantitative Equity Management Team
June 30, 1998
19
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE SMALL CAP EQUITY FUND
Statement of Investments
June 30, 1998 (Unaudited)
Shares Description Value
COMMON STOCKS - 99.2%
ADVERTISING - 0.2%
300 Advo, Inc.* $ 8,456
---------------------------------------------------------------------------
AEROSPACE/DEFENSE - 0.9%
750 AAR Corp. 22,172
400 Alliant Techsystems, Inc.* 25,300
----------
47,472
---------------------------------------------------------------------------
AGRICULTURE/HEAVY EQUIPMENT - 3.4%
900 Allied Products Corp.(a) 19,069
800 Cort Business Services Corp.* 25,200
300 Nacco Industries, Inc. 38,775
1,400 Terex Corp.* 39,900
1,500 U.S. Rentals, Inc.* 59,156
----------
182,100
---------------------------------------------------------------------------
AIR FREIGHT, TRUCK & OTHER - 2.0%
600 Airborne Freight Corp. 20,962
500 Avondale Industries, Inc.* 13,797
1,500 Consolidated Freightways Corp.* 20,906
500 Seacor Smit, Inc.* 30,656
1,100 Yellow Corp.* 20,419
----------
106,740
---------------------------------------------------------------------------
AIRLINES - 1.4%
500 Alaska Air Group, Inc.* 27,281
1,700 America West Holdings Corp.*(a) 48,556
----------
75,837
---------------------------------------------------------------------------
ALCOHOLIC BEVERAGES - 0.9%
600 Adolph Coors Co. Class B 20,400
2,200 Boston Beer, Inc.* 28,050
----------
48,450
---------------------------------------------------------------------------
AUTO SUPPLIERS - 1.1%
400 Arvin Industries, Inc. 14,525
1,800 Excel Industries, Inc. 25,762
100 Federal-Mogul Corp. 6,750
200 SPX Corp.* 12,875
----------
59,912
---------------------------------------------------------------------------
AUTO/VEHICLE - 1.6%
1,300 Budget Group, Inc.* 41,519
3,600 Rollins Truck Leasing Corp. 44,550
----------
86,069
---------------------------------------------------------------------------
BANKS - 8.1%
600 Albank Financial Corp. 42,337
1,500 CNB Bancshares, Inc. 72,000
600 Community Bank Systems, Inc. 18,787
1,000 First Commonwealth Financial Corp. 28,250
1,200 First Republic Bank, Inc.* 43,350
2,400 FirstFed Financial Corp.* 124,800
49 M & T Bank Corp. 27,146
1,000 Southwest Bancorp. of Texas, Inc.* 18,813
2,760 Sovereign Bancorp, Inc. 45,109
500 UST Corp. 13,250
----------
433,842
---------------------------------------------------------------------------
BUILDING & CONSTRUCTION PRODUCTS - 0.1%
200 Nortek, Inc.* 6,150
---------------------------------------------------------------------------
BUSINESS SERVICES - 1.0%
1,300 AC Nielsen Corp.* 32,825
500 Stone & Webster, Inc. 19,813
----------
52,638
---------------------------------------------------------------------------
CHEMICAL PRODUCTS - 1.3%
600 Dexter Corp. 19,087
1,400 The Scotts Co.* 52,150
----------
71,237
---------------------------------------------------------------------------
COMMERCIAL PRODUCTS - 1.3%
700 Applied Power, Inc. 24,062
700 Knoll, Inc.* 20,650
1,100 Wellman, Inc. 24,956
----------
69,668
---------------------------------------------------------------------------
COMMERCIAL SERVICES - 3.8%
400 Bowne & Company, Inc. 18,000
1,700 Interim Services, Inc.* 54,612
700 Metamor Worldwide, Inc.* 24,631
600 SPS Transaction Services, Inc.* 18,825
500 Staffmark, Inc.* 18,313
600 Wackenhut Corp. 13,575
1,500 World Color Press Co.* 52,500
----------
200,456
---------------------------------------------------------------------------
CONSTRUCTION/ENVIRONMENTAL SERVICES - 2.2%
800 ACX Technologies, Inc.* 17,400
400 Allied Waste Industries, Inc.* 9,600
1,000 CACI International, Inc.* 21,062
500 Carlisle Companies, Inc. 21,531
1,300 Newpark Resources, Inc.* 14,463
600 Texas Industries, Inc. 31,800
----------
115,856
---------------------------------------------------------------------------
CONSUMER STAPLES - 0.8%
400 Alberto Culver Co. Class B 11,600
900 Department 56, Inc. 31,950
----------
43,550
---------------------------------------------------------------------------
DEPARTMENT STORES - 1.5%
1,000 Ames Department Stores, Inc.* 26,313
600 Consolidated Stores Corp.* 21,750
800 Proffitt's, Inc.* 32,300
----------
80,363
---------------------------------------------------------------------------
ENERGY REFINING & MARKETING - 0.6%
1,500 Calpine Corp.* 30,281
---------------------------------------------------------------------------
20 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE SMALL CAP EQUITY FUND
Shares Description Value
COMMON STOCKS - (CONTINUED)
ENTERPRISE SYSTEMS - 0.3%
400 Avid Technology, Inc.* $ 13,400
---------------------------------------------------------------------------
FOOD & BEVERAGES - 1.8%
700 Michael Foods, Inc. 20,562
2,000 Pilgrims Pride Corp. 40,000
1,800 Ralcorp Holdings, Inc.* 33,975
----------
94,537
---------------------------------------------------------------------------
FOREST PRODUCTS - 2.0%
1,400 Playtex Products, Inc.* 22,313
1,400 Schweitzer-Mauduit International, Inc. 40,600
700 United Stationers, Inc.* 45,325
----------
108,238
---------------------------------------------------------------------------
GAMING - 1.4%
2,700 Boyd Gaming Corp.* 15,525
700 Dover Downs Entertainment, Inc. 21,700
1,300 Grand Casinos, Inc.* 21,775
300 SFX Entertainment, Inc.* 13,763
----------
72,763
---------------------------------------------------------------------------
HEALTH SUPPLIERS/SERVICES - 2.6%
300 Arterial Vascular Engineering, Inc.* 10,725
400 Cooper Companies, Inc.* 14,575
1,100 Input/Output, Inc.* 19,594
1,500 OEC Medical Systems, Inc.* 33,750
1,800 Sun Healthcare Group, Inc.* 26,325
600 Waters Corp.* 35,363
----------
140,332
---------------------------------------------------------------------------
HEALTHCARE MANAGEMENT - 2.3%
1,200 American Homepatient, Inc.* 22,950
900 Integrated Health Services, Inc. 33,750
1,600 Novacare, Inc.* 18,800
1,300 Paragon Health Network, Inc.* 20,963
800 Trigon Healthcare, Inc.* 28,950
----------
125,413
---------------------------------------------------------------------------
HOME BUILDERS - 1.4%
800 Fairfield Communities, Inc.* 15,350
1,300 Lennar Corp. 38,350
500 NVR, Inc. LP* 20,531
----------
74,231
---------------------------------------------------------------------------
HOME FURNISHING & SERVICES - 2.4%
600 Ethan Allen Interiors, Inc. 29,962
1,200 Furniture Brands International, Inc.* 33,675
1,300 Pier 1 Imports, Inc. 31,038
1,100 Williams-Sonoma, Inc.* 34,994
----------
129,669
---------------------------------------------------------------------------
HOTELS & RESTAURANTS - 4.0%
1,400 Buffets, Inc.* 21,962
2,400 Ruby Tuesday, Inc. 37,200
900 Showbiz Pizza Time, Inc.* 36,281
2,100 Signature Resorts, Inc.* 34,650
1,950 Sonic Corp.* 43,631
5,400 Sunburst Hospitality Corp.* 37,463
----------
211,187
---------------------------------------------------------------------------
INFORMATION MANAGEMENT - 2.0%
1,600 American Business Information, Inc.* 25,600
2,000 BA Merchant Services, Inc.* 40,375
1,100 Sabre Group Holdings, Inc.* 41,800
----------
107,775
---------------------------------------------------------------------------
INSURANCE BROKERS & OTHER INSURANCE - 3.4%
500 Arthur J Gallagher & Co. 22,375
400 Capital Re Corp. 28,650
700 Fidelity National Financial, Inc. 27,869
500 Financial Security Assurance Holdings, Ltd. 29,375
600 First American Financial Corp. 54,000
600 SCPIE Holdings, Inc. 20,325
----------
182,594
---------------------------------------------------------------------------
INSURANCE-LIFE - 4.8%
1,020 Delphi Financial Group, Inc.* 57,439
1,000 FBL Financial Group, Inc. 25,625
1,600 Hartford Life, Inc. 91,100
1,300 Nationwide Financial Services, Inc. 66,300
300 Reinsurance Group of America, Inc. 17,738
----------
258,202
---------------------------------------------------------------------------
INSURANCE-PROPERTY AND CASUALTY - 1.2%
1,000 Chartwell Re Corp. 29,437
600 Fremont General Corp. 32,512
----------
61,949
---------------------------------------------------------------------------
INVESTMENT BROKERS & MANAGERS - 0.3%
400 Jefferies Group, Inc. 16,400
---------------------------------------------------------------------------
MACHINERY - 2.3%
1,600 Columbus Mckinnon Corp. 41,600
1,400 Commercial Intertech Corp. 25,375
1,000 Kaydon Corp. 35,312
800 Thomas Industries, Inc. 19,550
----------
121,837
---------------------------------------------------------------------------
MEDIA & COMMUNICATIONS - 2.6%
2,800 Ascent Entertainment Group* 31,150
700 Big Flower Holdings, Inc.* 21,000
1,000 Commonwealth Telephone Enterprises, Inc.* 26,375
1,100 McClatchy Newspapers, Inc. 38,087
1,600 Paging Network, Inc.* 22,400
----------
139,012
---------------------------------------------------------------------------
MISCELLANEOUS-CONSUMER - 0.3%
600 California Water Services Group 15,075
---------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 21
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE SMALL CAP EQUITY FUND
Statement of Investments
June 30, 1998 (Unaudited)
Shares Description Value
COMMON STOCKS - (CONTINUED)
NONFERROUS METALS - 1.5%
500 AFC Cable Systems, Inc.* $ 17,750
2,550 Encore Wire Corp.* 41,119
500 Superior Telecom, Inc. 20,813
----------
79,682
---------------------------------------------------------------------------
OIL & GAS EXPLORATION - 1.3%
1,000 Barrett Resources Corp.* 37,437
1,300 Cabot Oil & Gas Corp. 26,000
200 Cliffs Drilling Co.* 6,563
----------
70,000
---------------------------------------------------------------------------
OIL & GAS SERVICES - 1.6%
900 Marine Drilling Companies, Inc.* 14,400
1,600 Pool Energy Services Co.* 23,600
1,600 Seitel, Inc.* 25,900
400 Veritas DGC, Inc.* 19,975
----------
83,875
---------------------------------------------------------------------------
PACKAGING - 0.8%
700 Aptargroup, Inc. 43,531
---------------------------------------------------------------------------
PERSONAL COMPUTERS AND PERIPHERALS - 1.7%
800 Banctec, Inc.*(a) 18,500
1,900 CHS Electronics, Inc.* 33,962
2,800 Sandisk Corp.* 38,675
----------
91,137
---------------------------------------------------------------------------
PHARMACEUTICALS - 3.4%
800 Alpharma, Inc. 17,600
1,600 Bindley Western Industries, Inc. 52,800
1,100 Herbalife International, Inc. 27,087
700 ICN Pharmaceuticals, Inc. 31,981
1,300 NBTY, Inc.* 23,888
1,400 Nu Skin Asia Pacific, Inc.* 27,300
----------
180,656
---------------------------------------------------------------------------
PIPELINES - 1.9%
1,300 Aquarion Co. 44,444
1,400 Oneok, Inc. 55,825
----------
100,269
---------------------------------------------------------------------------
RECREATIONAL PRODUCTS - 0.4%
900 Russ Berrie and Company, Inc. 22,500
---------------------------------------------------------------------------
RETAIL - 3.3%
600 Best Buy Company, Inc.* 21,675
800 Fabri-Centers of America* 21,900
1,300 Inacom Corp.* 41,275
900 Michaels Stores, Inc.* 31,753
1,800 Zale Corp.* 57,263
----------
173,866
---------------------------------------------------------------------------
SEMICONDUCTORS - 2.4%
2,000 Anixter International, Inc.* $ 38,125
2,200 Esterline Technologies Corp.* 45,925
1,200 Micro Linear Corp.* 5,475
600 Sanmina Corp.* 26,025
800 The DII Group, Inc.* 13,650
----------
129,200
---------------------------------------------------------------------------
SOFTWARE & SERVICES - 3.4%
600 Arbor Software Corp.* 18,862
2,200 Learning Company, Inc.* 65,175
900 Platinum Technology, Inc.* 25,706
900 Symantec Corp.* 23,513
500 Systems & Computer Tech Corp.* 13,500
1,800 USCS International, Inc.* 37,238
----------
183,994
---------------------------------------------------------------------------
SPECIALTY FINANCE & AGENCIES - 1.5%
600 Americredit Corp.* 21,413
2,300 Resource Bancshares Mortgage Group, Inc. 42,838
900 Southern Pacific Funding Corp.* 14,119
----------
78,370
---------------------------------------------------------------------------
SPECIALTY RETAIL - 3.1%
1,200 Abercrombie & Fitch Co.* 52,800
400 Brylane, Inc.* 18,400
900 Goody's Family Clothing, Inc.* 49,387
1,500 Huffy Corp.(a) 27,187
450 Pacific Sunwear of California, Inc.* 15,750
----------
163,524
---------------------------------------------------------------------------
STEEL - 1.7%
1,100 AK Steel Holding Corp. 19,663
1,700 Armco, Inc.* 10,837
200 Lone Star Technologies, Inc.* 3,050
2,500 National Steel Corp. Class B 29,688
700 Reliance Steel & Aluminum Corp. 27,038
----------
90,276
---------------------------------------------------------------------------
SUPERMARKETS - 1.0%
1,800 Fleming Companies, Inc. 31,612
400 Whole Foods Market, Inc.* 24,200
----------
55,812
---------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 0.5%
1,400 California Microwave, Inc.* 24,500
---------------------------------------------------------------------------
TEXTILES - 0.9%
1,100 Nautica Enterprises, Inc.* 29,494
500 Oxford Industries, Inc. 17,469
----------
46,963
---------------------------------------------------------------------------
22 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE SMALL CAP EQUITY FUND
Shares Description Value
COMMON STOCKS - (CONTINUED)
UTILITIES - 1.5%
1,300 Public Service Company of New Mexico $ 29,494
1,700 TNP Enterprises, Inc. 52,488
----------
81,982
--------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $5,010,939) $5,291,828
--------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $5,010,939)(B) $5,291,828
--------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION:
Gross unrealized gain for investments in
which value exceeds cost $ 515,419
Gross unrealized loss for investments in
which cost exceeds value (234,530)
--------------------------------------------------------------------------
Net unrealized gain $ 280,889
--------------------------------------------------------------------------
* Non-income producing security.
(a) There are common stock rights attached to these securities.
(b) The amount stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements. 23
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Dear Shareholders,
ON BEHALF OF GOLDMAN SACHS, IT IS A PLEASURE TO WELCOME YOU AS A SHAREHOLDER
IN THE GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND.
IN THE FUTURE, YOU WILL RECEIVE ANNUAL AND SEMIANNUAL REPORTS THAT DESCRIBE
THE FUND'S PERFORMANCE, AS WELL AS INFORMATION REGARDING SPECIFIC HOLDINGS.
THIS SEMIANNUAL REPORT COVERS THE SHORT PERIOD FROM APRIL 30, 1998, WHEN THE
FUND BEGAN OPERATIONS, THROUGH JUNE 30, 1998.
Market Review
During the brief period under review, the U.S. equity mar-
ket advanced 2.27%. Year-to-date, the mantle of market
leadership has been held by mega-cap stocks -- the largest
and most liquid stocks in the Standard & Poor's 500 Index.
Several factors -- including ongoing Asian market turbu-
lence, benign inflation and concern about the
sustainability of the current bull market -- have led U.S.
investors to seek quality companies with sustainable and
predictable earnings and cash flow growth.
Performance Review
From April 30, 1998 through June 30, 1998, the Fund gener-
ated a 2.80% cumulative total return. Over the same time
period, the Fund's benchmark, the Standard & Poor's 500 In-
dex (with dividends reinvested), generated a cumulative to-
tal return of 2.27%.
Investment Objective
The Fund seeks long-term capital growth, primarily through
investments in a diversified portfolio of companies that
are considered to have long-term capital appreciation po-
tential.
Sector Performance
As bottom-up stock pickers, the Fund's management team fo-
cuses on the real worth of the business, and to the extent
that it finds several businesses in related industries that
have long-term growth potential, the team may develop an
overweighting in a given sector. Recently, the team found
several companies that meet its criteria -- strong fran-
chise, dominant market share, free cash flow, high return
on invested capital and predictable/sustainable growth --
within the healthcare and consumer nondurables sectors.
Poised to benefit from favorable demographic trends and the
businesses' own enduring competitive advantage, these areas
have drawn the management team's attention and investment.
Conversely, the Fund is underweighted in the more cyclical
basic industry and consumer durables sectors relative to
the benchmark.
24
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND
Portfolio Composition
In recent months, investors have been attempting to distin-guish,
from the rest of the marketplace, businesses that can sustain
growth in the face of Asia's crisis. As the market has assigned a
premium to consistency and sustainability of above-average
earnings growth, the man-agement team's strategy has reaped some
of the benefits of its long-term outlook and focus on enduring
competitive ad-vantage.
Top 10 Portfolio Holdings as of June 30, 1998*
PERCENTAGE OF
COMPANY LINE OF BUSINESS NET ASSETS
------- ---------------- -------------
Bristol-Myers Squibb Co. Pharmaceuticals 2.8%
Microsoft Corp. Software & Services 2.6
Warner Lambert Co. Pharmaceuticals 2.5
General Electric Co. Electrical Equipment 2.5
BankAmerica Corp. Banks 2.4
State Street Boston Corp. Banks 2.3
Pfizer, Inc. Pharmaceuticals 2.3
Banc One Corp. Banks 2.2
American Home Products Corp. Pharmaceuticals 2.2
Liberty Media Group Media & Communications 2.1
* The top 10 holdings may not be representative of the Fund's
future investments.
Outlook
The outlook for the economy and the stock market appears
favorable, with expectations of low inflation, stable interest
rates and modest economic growth. In this environ-ment, the Fund's
management team will continue to seek companies that are
strategically poised for long-term growth. In the near term, given
high levels of global volatility, the team believes that its
portfolio benefits from the ownership of high quality companies
with stable earn-ings growth and enduring competitive advantage.
Goldman Sachs Asset Management thanks you for your investment and
looks forward to your continued confidence.
Goldman Sachs U.S. Active Equity Growth Management Team
June 30, 1998
25
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND
Statement of Investments
June 30, 1998 (Unaudited)
Shares Description Value
COMMON STOCKS - 95.1%
ADVERTISING & MARKETING - 1.5%
1,400 Valassis Communications, Inc.* $ 53,988
---------------------------------------------------------------------------
AEROSPACE/DEFENSE - 0.4%
300 Boeing Co. 13,369
---------------------------------------------------------------------------
AUTO SUPPLIERS - 0.5%
300 Lear Corp.* 15,394
---------------------------------------------------------------------------
BANKS - 9.7%
1,300 Banc One Corp. 72,556
900 BankAmerica Corp. 77,794
200 Citicorp 29,850
500 First Union Corp. 29,125
400 NationsBank Corp. 30,600
1,100 State Street Boston Corp. 76,450
----------
316,375
---------------------------------------------------------------------------
BUSINESS SERVICES - 0.5%
400 H & R Block, Inc. 16,850
---------------------------------------------------------------------------
CHEMICAL PRODUCTS - 2.0%
400 BetzDearborn, Inc.(a) 16,550
200 Du Pont (E.I.) de Nemours & Co. 14,925
200 Minnesota Mining and Manufacturing Co. 16,437
300 Monsanto Co. 16,763
----------
64,675
---------------------------------------------------------------------------
COMMERCIAL SERVICES - 1.5%
900 Ecolab, Inc. 27,900
500 Galileo International, Inc. 22,531
----------
50,431
---------------------------------------------------------------------------
CONSUMER STAPLES - 5.6%
400 Avon Products, Inc. 31,000
200 Clorox Co. 19,075
500 Colgate Palmolive Co. 44,000
600 Gillette Co. 34,012
600 Procter & Gamble Co. 54,638
----------
182,725
---------------------------------------------------------------------------
DEPARTMENT STORES - 2.0%
300 Federated Department Stores, Inc.* 16,144
800 Walmart Stores, Inc. 48,600
----------
64,744
---------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 2.9%
300 American Standard Companies,Inc.* 13,406
900 General Electric Co. 81,900
----------
95,306
---------------------------------------------------------------------------
ENERGY REFINING & MARKETING - 1.6%
1,000 AES Corp.* 52,562
---------------------------------------------------------------------------
ENTERPRISE SYSTEMS - 2.4%
400 Cisco Systems, Inc.* $ 36,825
700 EMC Corp.* 31,369
100 Xerox Corp. 10,163
----------
78,357
---------------------------------------------------------------------------
FOOD & BEVERAGES - 6.7%
800 Coca Cola Co. 68,400
600 Nabisco Holdings Corp. 21,638
1,100 Pepsico, Inc. 45,306
400 Ralston Purina Co. 46,725
400 William Wrigley Jr. Co. 39,200
----------
221,269
---------------------------------------------------------------------------
FUNERAL SERVICES - 1.3%
1,000 Service Corp. International 42,875
---------------------------------------------------------------------------
HEALTH SUPPLIERS/SERVICES - 1.4%
600 Johnson & Johnson 44,250
---------------------------------------------------------------------------
HEALTHCARE MANAGEMENT - 1.2%
500 Aetna, Inc. 38,062
---------------------------------------------------------------------------
HOME FURNISHING & SERVICES - 0.4%
400 Sherwin Williams Co. 13,250
---------------------------------------------------------------------------
HOTELS & RESTAURANTS - 1.1%
1,100 Marriott International, Inc. 35,612
---------------------------------------------------------------------------
INFORMATION MANAGEMENT - 0.6%
400 Envoy Corp.* 18,950
---------------------------------------------------------------------------
INSURANCE BROKERS & OTHER INSURANCE - 0.4%
200 AMBAC, Inc. 11,700
---------------------------------------------------------------------------
INSURANCE-LIFE - 2.2%
300 Hartford Life, Inc. 17,081
400 Nationwide Financial Services, Inc. 20,400
600 SunAmerica, Inc. 34,463
----------
71,944
---------------------------------------------------------------------------
INSURANCE-PROPERTY AND CASUALTY - 0.9%
200 American International Group, Inc. 29,200
---------------------------------------------------------------------------
INTEGRATED OIL - 2.5%
100 Atlantic Richfield Co. 7,812
400 Exxon Corp. 28,525
300 Mobil Corp. 22,987
200 Texaco, Inc. 11,938
300 Unocal Corp. 10,725
----------
81,987
---------------------------------------------------------------------------
INVESTMENT BROKERS & MANAGERS - 0.4%
600 Waddell & Reed Financial, Inc. 14,363
---------------------------------------------------------------------------
MEDIA & COMMUNICATIONS - 12.8%
1,800 AH Belo Corp. 43,875
300 Cablevision Systems Corp. 25,050
---------------------------------------------------------------------------
26 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND
Shares Description Value
COMMON STOCKS - (CONTINUED)
MEDIA & COMMUNICATIONS - (CONTINUED)
400 CBS, Inc. $ 12,700
400 Central Newspapers, Inc. 27,900
400 Chancellor Media Corp.* 19,862
400 Gannett Co. 28,425
600 HBO & Co. 21,150
500 Jacor Communications, Inc.* 29,500
1,800 Liberty Media Group* 69,863
400 New York Times Co. 31,700
700 TCI Group* 26,906
500 Time Warner, Inc. 42,719
200 Tribune Co. 13,763
200 Walt Disney Co. 21,012
400 Ziff Davis, Inc.* 5,550
----------
419,975
---------------------------------------------------------------------------
OIL & GAS SERVICES - 2.1%
1,000 Schlumberger, Ltd. 68,313
---------------------------------------------------------------------------
PHARMACEUTICALS - 11.6%
1,400 American Home Products Corp. 72,450
800 Bristol-Myers Squibb Co. 91,950
700 Pfizer, Inc. 76,081
500 Schering Plough Corp. 45,813
300 Sigma Aldrich Corp. 10,538
1,200 Warner Lambert Co. 83,250
----------
380,082
---------------------------------------------------------------------------
RECREATIONAL PRODUCTS - 0.7%
600 Hasbro, Inc. 23,587
---------------------------------------------------------------------------
SEMICONDUCTORS - 0.7%
300 Intel Corp. 22,237
---------------------------------------------------------------------------
SOFTWARE & SERVICES - 4.8%
1,300 First Data Corp. 43,306
800 Microsoft Corp.* 86,700
300 Peoplesoft, Inc.* 14,100
300 Sterling Commerce, Inc.* 14,550
----------
158,656
---------------------------------------------------------------------------
SPECIALTY FINANCE & AGENCIES - 5.1%
400 C.I.T. Group, Inc. 15,000
900 Federal Home Loan Mortgage Corp. 42,356
700 Federal National Mortgage Association 42,525
2,000 MBNA Corp. 66,000
----------
165,881
---------------------------------------------------------------------------
SPECIALTY RETAIL - 2.4%
200 Home Depot, Inc. 16,612
1,200 Tandy Corp. 63,675
----------
80,287
---------------------------------------------------------------------------
SUPERMARKETS - 2.3%
400 CVS Corp. 15,575
500 Rite Aid Corp. 18,781
1,000 Walgreen Co. 41,313
----------
75,669
---------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 1.8%
700 Lucent Technologies, Inc. 58,231
---------------------------------------------------------------------------
TOBACCO - 1.1%
900 Philip Morris Companies, Inc. 35,438
---------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $3,024,450) $3,116,594
---------------------------------------------------------------------------
Principal Interest Maturity
Amount Rate Date Value
REPURCHASE AGREEMENT - 3.1%
Joint Repurchase Agreement Account
$100,000 5.83% 07/01/98 $ 100,000
---------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $100,000) $ 100,000
---------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST
$3,124,450)(B) $3,216,594
---------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION:
Gross unrealized gain for investments in which value
exceeds cost $ 171,071
Gross unrealized loss for investments in which cost
exceeds value (78,927)
---------------------------------------------------------------------------
Net unrealized gain $ 92,144
---------------------------------------------------------------------------
* Non-income producing security.
(a) There are common stock rights attached to these securities.
(b) The amount stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements. 27
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP EQUITY FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Dear Shareholders,
ON BEHALF OF GOLDMAN SACHS, IT IS A PLEASURE TO WELCOME YOU AS A SHAREHOLDER
IN THE GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP EQUITY FUND.
IN THE FUTURE, YOU WILL RECEIVE ANNUAL AND SEMIANNUAL REPORTS THAT DESCRIBE
THE FUND'S PERFORMANCE AND STRATEGIC DEVELOPMENTS. THIS SEMIANNUAL REPORT
COVERS THE SHORT PERIOD FROM MAY 1, 1998, WHEN THE FUND BEGAN OPERATIONS,
THROUGH JUNE 30, 1998.
Market Review
During the brief period covered by this report, the market
advanced 2.27%. Year-to-date, the mantle of market leader-
ship has been held by mega-cap stocks -- the largest and
most liquid stocks in the Standard & Poor's 500 Index.
Through the end of June, the Russell 2000 and Russell Mid
Cap Indexes both trailed the S&P 500 by a substantial mar-
gin. Several factors --including ongoing Asian market tur-
bulence, benign inflation and concern about the
sustainability of the current bull market -- have made
mega-caps the investment of choice among U.S. investors.
Performance Review
From May 1, 1998 through June 30, 1998, the Fund generated
a -6.00% return. Over the same time period, the Fund's
benchmark, the Russell Midcap Index, generated a return of
-1.76%.
Investment Objective
The Fund seeks long-term capital appreciation, primarily
through equity securities of companies with public stock
market capitalizations within the range of the market capi-
talization of companies constituting the Russell Midcap In-
dex at the time of investment. (Currently, between $400
million and $16 billion.)
Portfolio Composition
In the less-than favorable market environment for mid-cap
stocks, the Fund's management team has found opportunities
to invest in companies which it believes sell at a substan-
tial discount to the market and to their respective indus-
tries. This valuation dichotomy may be a result of limited
near-term earnings visibility, cyclically out-of-favor sta-
tus or companies that are under-followed or misunderstood.
The Team believes that by performing rigorous fundamental
research into these low-expectation stocks, they are build-
ing a portfolio which offers long-term potential value.
28
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP EQUITY FUND
Top 10 Portfolio Holdings as of June 30, 1998*
PERCENTAGE OF
COMPANY LINE OF BUSINESS NET ASSETS
------- ---------------- -------------
Aetna, Inc. Healthcare Management 4.1%
Quantum Corp. Personal Computers and Peripherals 3.3
Union Carbide
Corp. Chemicals Products 3.3
Loews Corp. Insurance Brokers & Other Insurance 2.7
Fruit of the
Loom Inc. Textiles 2.7
Georgia-Pa-
cific Corp. Forest Products 2.5
Republic of
New York
Corp. Banks 2.4
Central Maine
Power Co. Utilities 2.4
Fluor Corp. Construction/Environmental Services 2.3
Tosco Corp. Energy Refining and Marketing 2.2
* The top 10 holdings may not be representative of the
Fund's future investments.
Outlook
The Fund's management team remains focused on researching mid-cap
companies that sell at a discount not only to the broader market
but also to their long-term earning and cash flow generating
abilities. The Team believes that its rigorous research has the
potential to generate a portfolio of discounted names poised for
long-term appreciation. Most importantly, when the current
excesses are wrung from the system, the team believes that its
discipline has the po-potential to dampen volatility and preserve
capital.
Goldman Sachs Asset Management thanks you for your investment and
looks forward to your continued confidence.
Goldman Sachs U.S. Value Portfolio Management Team
June 30, 1998
29
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP EQUITY FUND
Statement of Investments
June 30, 1998 (Unaudited)
Shares Description Value
COMMON STOCKS - 73.2%
AIR FREIGHT, TRUCK & OTHER - 2.1%
1,300 CNF Transportation, Inc. $ 55,250
---------------------------------------------------------------------------
AIRLINES - 0.7%
300 Continental Airlines, Inc. Class B* 18,262
---------------------------------------------------------------------------
AUTO SUPPLIERS - 2.0%
1,000 Lear Corp.* 51,313
---------------------------------------------------------------------------
BANKS - 3.5%
1,200 Pacific Century Financial Corp. 28,800
1,000 Republic of New York Corp. 62,938
----------
91,738
---------------------------------------------------------------------------
CHEMICAL PRODUCTS - 4.6%
1,300 IMC Global, Inc. 39,162
1,600 Union Carbide Corp. 85,400
----------
124,562
---------------------------------------------------------------------------
CONSTRUCTION/ENVIRONMENTAL SERVICES - 2.3%
1,200 Fluor Corp. 61,200
---------------------------------------------------------------------------
ENERGY REFINING & MARKETING - 2.2%
2,000 Tosco Corp. 58,750
---------------------------------------------------------------------------
FOREST PRODUCTS - 5.3%
1,100 Georgia-Pacific Corp. 64,831
2,000 Georgia-Pacific Corp. (Timber Group) 46,125
1,800 Stone Container Corp.* 28,125
----------
139,081
---------------------------------------------------------------------------
GAMING COMPANIES - 1.9%
2,900 Circus Circus Enterprises, Inc.* 49,119
---------------------------------------------------------------------------
HEALTHCARE MANAGEMENT - 7.9%
1,400 Aetna, Inc. 106,575
1,400 Foundation Health Systems, Inc.* 36,925
1,800 Tenet Healthcare Corp.* 56,250
200 Trigon Healthcare, Inc.* 7,238
----------
206,988
---------------------------------------------------------------------------
INSURANCE BROKERS & OTHER INSURANCE - 2.7%
800 Loews Corp. 69,700
---------------------------------------------------------------------------
INSURANCE-LIFE - 2.5%
300 American General Corp. 21,356
900 Reliastar Financial Corp. 43,200
----------
64,556
---------------------------------------------------------------------------
INSURANCE-PROPERTY AND CASUALTY - 3.4%
500 Allmerica Financial Corp. 32,500
1,200 CNA Financial Corp.* 55,875
----------
88,375
---------------------------------------------------------------------------
LOGISTICS/RAIL - 1.8%
1,700 Canadian Pacific, Ltd. 48,237
---------------------------------------------------------------------------
PERSONAL COMPUTERS AND PERIPHERALS - 4.9%
800 CHS Electronics, Inc.* 14,300
4,200 Quantum Corp.* 87,150
1,100 Seagate Technology, Inc.* 26,194
----------
127,644
---------------------------------------------------------------------------
PHARMACEUTICALS - 1.4%
3,600 Perrigo Co.* 36,225
---------------------------------------------------------------------------
REAL ESTATE - 1.2%
2,800 Laser Mortgage Management, Inc.* 30,450
---------------------------------------------------------------------------
SEMICONDUCTORS - 3.6%
800 Avnet, Inc. 43,750
700 Lam Research Corp.* 13,387
2,150 Vishay Intertechnology, Inc.* 38,566
----------
95,703
---------------------------------------------------------------------------
STEEL - 3.7%
2,400 AK Steel Holding Corp. 42,900
1,700 Ispat International NV* 31,875
900 Ucar International, Inc.* 26,269
----------
101,044
---------------------------------------------------------------------------
SUPERMARKETS - 1.5%
2,200 Fleming Companies, Inc. 38,637
---------------------------------------------------------------------------
TEXTILES - 2.7%
2,100 Fruit of the Loom, Inc.* 69,694
---------------------------------------------------------------------------
TIRE & OTHER RELATED RUBBER PRODUCTS - 2.0%
800 Goodyear Tire & Rubber Co. 51,550
---------------------------------------------------------------------------
TOBACCO - 2.0%
1,900 UST, Inc. 51,300
---------------------------------------------------------------------------
UTILITIES - 7.3%
3,200 Central Maine Power Co. 62,400
1,600 Entergy Corp. 46,000
2,700 Northeast Utilities* 45,731
1,100 Unicom Corp. 38,569
----------
192,700
---------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $2,053,610) $1,922,078
---------------------------------------------------------------------------
30 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP EQUITY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C>
REPURCHASE AGREEMENT - 26.7%
Joint Repurchase Agreement Account(a)
$700,000 5.83% 07/01/98 $ 700,000
-------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $700,000) $ 700,000
-------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $2,753,610)(B) $2,622,078
-------------------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION:
Gross unrealized gain for investments in which
value exceeds cost $ 35,111
Gross unrealized loss for investments in which
cost exceeds value (166,643)
-------------------------------------------------------------------------------------------
Net unrealized loss $ (131,532)
-------------------------------------------------------------------------------------------
</TABLE>
Futures contracts open at June 30, 1998 are as follows:
NUMBER OF
CONTRACTS SETTLEMENT UNREALIZED
TYPE LONG(C) MONTH LOSS
-------------------------------------------------------------------------------
S&P 500 Stock Index 1 September 1998 ($758)
-------------------------------------------------------------------------------
* Non-income producing security.
(a) The security is being segregated as collateral for open futures
contracts.
(b) The amount stated also represents aggregate cost for federal income tax
purposes.
(c) Each S&P 500 Stock Index represents $250,000 in notional par value. The
total net notional amount and net market value are $250,000 and $285,750,
respectively. The determination of notional amounts as presented here are
indicative only of volume of activity and not a measure of market risk.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements. 31
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Dear Shareholders,
ON BEHALF OF GOLDMAN SACHS, IT IS A PLEASURE TO WELCOME YOU AS A SHAREHOLDER
IN THE GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND.
IN THE FUTURE, YOU WILL RECEIVE ANNUAL AND SEMIANNUAL REPORTS THAT DESCRIBE
THE FUND'S PERFORMANCE, AS WELL AS INFORMATION REGARDING SPECIFIC HOLDINGS.
THIS SEMIANNUAL REPORT COVERS THE SHORT PERIOD FROM JANUARY 12, 1998, WHEN
THE FUND BEGAN OPERATIONS, THROUGH JUNE 30, 1998.
Market Review
.Europe -- Overall, Europe's markets were very positive. A
continuance of merger and acquisition activity and con-
solidation moves were the primary drivers that helped Eu-
ropean stocks surge upwards. As the period progressed,
Europe's equity markets continued their overall impres-
sive showing, despite ongoing Far East market turbulence
and a brief period of profit taking in April. In addition
to the consolidation trend occurring throughout Europe,
other factors, particularly the convergence of interest
rates across Europe, figured heavily into the positive
performance of equity markets.
.Japan -- The Japanese stock market was weak during most
of the period under review. Stock prices fell sharply in
late 1997 as investors' concerns over Asia's financial
crisis were aggravated by a series of bankruptcies --
among them, one of the four largest brokerage houses in
Japan. Investor sentiment improved significantly in late
January, after the government revealed various economic
measures designed to prevent further deterioration of the
domestic economy. The announcements substantially lifted
low-priced stocks that had underperformed the market in
previous months. In the ensuing weeks, expectations for
additional fiscal stimulus policy packages helped support
the market intermittently. However, in the final weeks of
the period, negative news on corporate fundamentals out-
weighed the market, causing it to retreat.
.Asia -- Asian markets were generally weak at the start of
the period under review. In February, these markets
staged a brief comeback as investors, believing that the
Asian crisis was abating, showed renewed interest in the
region. The optimism was short-lived, however, and Asian
markets turned in mixed performance in the ensuing
months. A weakening Japanese economy, political upheaval
and rioting in Indonesia, and nuclear testing by India
and Pakistan all contributed to poor market performance.
Performance Review
From January 12, 1998 through June 30, 1998, the Fund gen-
erated a 19.50% cumulative total return. Over the same time
period, the Fund's benchmark, the Financial Times Actuaries
Euro Pac Index (unhedged with dividends reinvested), gener-
ated a cumulative total return of 18.35%.
32
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND
The Fund's strong performance versus the benchmark during the fiscal
period can be attributed primarily to successful stock selection across
regions.
Investment Objective
The Fund seeks long-term capital growth, primarily through equity
securities of companies that are organized outside the United States or
whose securities are principally traded outside the United States.
Regional Allocations
During the period under review, the Fund maintained an overweight
position in Europe versus the benchmark. The presence of trends and
events -- including good economic growth -- contributed to a strong
market in this region.
Conversely, the Fund was underweight in Asia and Japan. In Asia, the
team chose to concentrate the Fund's holdings in Australia and New
Zealand in view of the ongoing economic problems in other countries
within the region. In Japan, an unfavorable earnings outlook prompted
the team to maintain an underweight position throughout the period.
Portfolio Composition
As of June 30, 1998, 94.8% of the Fund was invested in equity
securities, with the remaining portion in cash.
Top 10 Portfolio Holdings as of June 30, 1998*
PERCENTAGE OF
COMPANY COUNTRY LINE OF BUSINESS NET ASSETS
------- ------- ---------------- -------------
Rentokil Initial
PLC UK Business Services 4.4%
Aegon NV Netherlands Insurance 4.0
Securitas AB Sweden Business Services 3.7
Bank of Ireland Ireland Banks 3.6
Telecom Italia Mo-
bile SPA Italy Utilities 3.4
ForeningsSparbanken
AB Sweden Banks 3.3
Ver Ned Uitgevers
(VNU) Netherlands Media & Communications 3.3
Misys PLC UK Business Services 3.2
Adecco SA Switzerland Business Services 2.9
Adidas Solomon AG Germany Textiles 2.9
* The top 10 holdings may not be representative of the Fund's future
investments.
Portfolio Highlights
.Securitas (Sweden) -- A pan-European security services com-pany,
Securitas has demonstrated strong cash generation and earnings growth
due to good underlying structural demand for increasingly
sophisticated, higher value-added security services. Moreover, the
company has the advantage of operating in a highly fragmented
marketplace, providing significant reinvestment opportunities through
acquisition.
33
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND
Shareholder Letter
June 30, 1998 (Unaudited)
.SMC (Japan) -- SMC's management has implemented a strategy
that is focused on expanding its global sales network, a
move that has already contributed to the company's rising
market share in the business of manufacturing pneumatic
control devices.
.Nintendo (Japan) -- Nintendo, one of the largest video game
manufacturers in the industry, has the potential to demon-
strate strong earnings growth over the next few years as
new games software for the company's Nintendo-64 platform
is introduced.
Key New Acquisitions
.VNU (Netherlands) -- Based in Holland, VNU is a successful
publisher of consumer magazines and regional newspapers.
Presently, the company is expanding its operations into new
areas of growth -- most notably marketing information serv-
ices and telephone directories.
.Yamanouchi Pharmaceutical (Japan) -- Management at
Yamanouchi, the developer of the anti-ulcer drug
famotidine, has grown more focused on improving the
company's returns on capital. Further adding to the attrac-
tiveness of the company is the fact that Yamanouchi is cur-
rently in the process of developing several new drugs with
global potential.
.Select Appointments (UK) -- A leading global provider of
specialist temporary staffing services, Select Appointments
is focused on attractive growth areas such as information
technology, accountancy, legal, medical and teaching per-
sonnel. These industries tend to have higher operating
profitability and lower cyclicality than those catered to
by traditional blue-collar temporary employment services.
Furthermore, the company is run by a skilled management
team that has successfully reinvested in the business both
internally and through acquisition, effecting some 40
transactions of smaller staffing services companies over
the past five years.
Outlook
.Europe -- Presently, of the markets in which the Fund in-
vests, the management team remains most positive on Europe.
Europe's economic prospects are strong, and ongoing re-
structuring among European businesses is generating strong
corporate earnings. Moreover, the team believes that there
will be a considerable amount of merger and acquisition ac-
tivity, both pre- and post-monetary union, as European
businesses seek critical mass in a single European market.
Fund management believes this activity will be most evident
within the financial sector, as banks stand to lose the
protection of national currency franchises and face the
threat of disintermediation, due to the development of a
deep and liquid European corporate bond market. Finally,
the laws of supply and demand should also work in European
stocks' favor. Presently, national pension systems in Eu-
rope are underfunded, and governments are increasingly en-
couraging individuals to invest privately in mutual funds
for retirement -- in effect, creating an "equity culture."
At the same time, equity supply in Europe is tightening as
more and more European companies are participating in share
buyback programs. These two factors combined should further
bode well for European equity market performance.
34
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND
.Japan -- In Japan, corporate earnings for the fiscal year
ended March 1998 came in somewhat lower than previously an-
ticipated. This was primarily due to a rapid slowdown in
the domestic economy and the deterioration in Asian econo-
mies during the second half of the year. Although the earn-
ings outlook does not look promising for the first half of
this year, the Fund's management team expects profit levels
to edge up in the second half, especially for electronics-
related companies against the backdrop of expected recovery
in the personal computer market during the latter part of
the year. The team is less sanguine about domestic demand
related stocks, for it believes strong recovery in the do-
mestic market is not yet in the offing. Therefore, the team
will limit its exposure to domestic stocks that possess at-
tractive valuations. It is worth noting that a growing num-
ber of the Japanese companies have announced their
intentions to change their Articles of Incorporation to buy
back shares. The Fund's managers believe it is a positive
sign that a growing number of Japanese companies have grad-
ually become conscious of the advancement of shareholders'
value, which should be supportive of the equity market in
the long run.
.Asia -- In the near-term, the team intends to keep a close
eye on markets in Asia. Although it expects that the pace
of bankruptcy and balance sheet restructuring will in-
crease -- which is positive for the region over the long
term -- a weakening yen is a near-term negative for the re-
gion's currencies and markets. Therefore, the team intends
to maintain its defensive investment stance. To this end,
it will continue to focus on companies with strong balance
sheets and dominant business franchises.
Goldman Sachs Asset Management thanks you for your invest-
ment and looks forward to your continued confidence.
Goldman Sachs International Equity Management Team
June 30, 1998
35
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND
Statement of Investments
June 30, 1998 (Unaudited)
Shares Description Value
COMMON STOCKS - 90.0%
AUSTRALIAN DOLLAR - 3.2%
21,400 Fosters Brewing Group, LTD. (Alcohol) $ 50,479
1,700 Lend Lease Corp. (Financial Services) 34,455
6,950 Tab Corp Holdings, Ltd. (Entertainment & Leisure) 35,592
11,000 Tab, Ltd. (Entertainment & Leisure)* 16,251
13,400 Westpac Banking Corp. (Banks) 81,933
7,300 Woodside Petroleum, Ltd. (Oil & Gas Services) 36,524
18,900 Woolworths, Ltd. (Food & Grocery) 61,594
----------
316,828
-------------------------------------------------------------------------
BRITISH POUND STERLING - 17.7%
18,766 Electrocomponents (Electronics) 147,268
16,934 Great Universal Stores PLC (Retail) 223,370
9,340 Hays PLC (Business Services) 156,730
7,751 Lloyds TSB Group PLC (Banks) 108,517
5,508 Misys PLC (Business Services) 313,148
60,087 Rentokil Initial PLC (Business Services) 432,411
9,261 Select Appointments Holdings PLC (Business Services) 132,209
12,114 Siebe (Engineering) 242,114
----------
1,755,767
-------------------------------------------------------------------------
DANISH KRONE - 0.7%
515 Novo Nordisk A/S (Healthcare Management) 71,071
-------------------------------------------------------------------------
DEUTSCHEMARK - 2.9%
1,649 Adidas Solomon AG (Textiles) 287,566
-------------------------------------------------------------------------
FRENCH FRANC - 10.8%
737 Alcatel Alsthom (Cie Gen El) (Computers/Office) 150,065
1,709 Credit Local de France (Financial Services) 230,102
1,978 Elf Aquitaine (Energy) 278,098
2,325 SGS Thomson Microelectronics (Electronics)* 164,789
1,181 Societe Generale (Financial Services) 245,549
----------
1,068,603
-------------------------------------------------------------------------
HONG KONG DOLLAR - 1.6%
23,500 Asia Satellite Telecom Holdings (Utilities) 38,823
10,000 Cheung Kong Holdings, Ltd. (Real Estate) 49,174
17,000 Dao Heng Bank Group, Ltd. (Banks) 24,135
13,500 Hong Kong Electric Holdings (Utilities) 41,817
----------
153,949
-------------------------------------------------------------------------
IRISH POUND - 3.5%
17,221 Bank of Ireland (Banks) 352,395
-------------------------------------------------------------------------
ITALIAN LIRA - 3.7%
3,085 Arnoldo Mondadori Editore (Media & Communications) 36,463
54,660 Telecom Italia Mobile SPA (Utilities) 334,405
----------
370,868
-------------------------------------------------------------------------
JAPANESE YEN - 17.8%
2,900 Aderans Company, Ltd. (Retail) 63,759
6,000 Canon, Inc. (Computers/Office) 136,689
1,900 Circle K Japan Co. (Retail) 66,370
3,400 Ito En, Ltd. (Food & Beverages) 105,735
7,000 Kokuyo Company, Ltd. (Computers/Office) 118,970
3,000 Max Co. (Electronics) 26,166
4,000 Mirai Industry Company, Ltd. (Electronics) 33,702
24,000 Mitsui Marine & Fire (Insurance) 120,981
12,000 NGK Insulators, Ltd. (Auto Components) 104,578
1,500 Nintendo Corp., Ltd. (Entertainment & Leisure) 139,401
1,000 Rohm Co. (Electronics) 103,059
5,000 Sankyo Co. (Financial Services) 114,269
2,200 Shimachu Co. (Retail) 36,277
1,700 SMC Corp. (Machinery) 129,710
3,000 Takefuji Corp. (Financial Services) 138,859
2,000 TDK Corp. (Consumer Goods) 148,261
7,000 Toppan Forms Company, Ltd. (Printing) 91,734
4,000 Yamanouchi Pharmaceutical (Pharmaceuticals) 83,605
----------
1,762,125
-------------------------------------------------------------------------
NETHERLANDS GUILDER - 9.1%
4,527 Aegon NV (Insurance) 394,185
658 Baan Co. NV (Computers/Office)* 23,662
8,919 Ver Ned Uitgevers (Media & Communications) 324,248
1,145 Wolters Kluwer (Media & Communications) 157,267
----------
899,362
-------------------------------------------------------------------------
NEW ZEALAND DOLLAR - 0.6%
18,300 Telecom Corp. of New Zealand I/R (Utilities) 39,232
4,400 Telecom Corp. of New Zealand (Utilities) 18,179
----------
57,411
-------------------------------------------------------------------------
PORTUGUESE ESCUDO - 1.9%
8,246 Electricidade de Portugal SA (Electronics) 191,811
-------------------------------------------------------------------------
SINGAPORE DOLLAR - 0.4%
22,000 Parkway Holdings, Ltd. (Conglomerates) 38,255
-------------------------------------------------------------------------
36 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND
Shares Description Value
COMMON STOCKS - (CONTINUED)
SPANISH PESETA - 2.3%
8,946 Banco Santander SA (Banks) $ 228,973
---------------------------------------------------------------------------
SWEDISH KRONA - 9.0%
7,136 Ericsson Telecommunications (Computers/Office) 208,461
7,394 Securitas AB (Business Services) 362,005
10,795 ForeningsSparbanken AB 324,824
----------
895,290
---------------------------------------------------------------------------
SWISS FRANC - 4.8%
632 Adecco SA (Business Services) 285,471
114 Novartis AG (Healthcare Management) 190,013
----------
475,484
---------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $7,984,093) $8,925,758
---------------------------------------------------------------------------
PREFERRED STOCKS - 4.8%
DEUTSCHEMARK - 4.8%
1,078 Fresenius AG (Healthcare Management) $ 204,428
2,700 Henkel KGAA - Vorzug (Chemical Products) 267,238
----------
471,666
---------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(COST $392,316) $ 471,666
---------------------------------------------------------------------------
RIGHTS - 0.0%
SWISS FRANC - 0.0%
2,895 Adecco SA* (Business Services) $ 0
---------------------------------------------------------------------------
TOTAL RIGHTS
(COST $0) $ 0
---------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $8,376,409)(A) $9,397,424
---------------------------------------------------------------------------
---------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: Gross unrealized gain
for investments in which value exceeds cost $1,297,533
Gross unrealized loss for investments in which
cost exceeds value (276,518)
---------------------------------------------------------------------------
Net unrealized gain $1,021,015
---------------------------------------------------------------------------
* Non-income producing security.
(a) The amount stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
COMMON AND PREFERRED STOCK
INDUSTRY CONCENTRATIONS
Alcohol 0.5%
Auto Components 1.1
Banks 11.3
Business Services 17.0
Chemical Products 2.7
Computers/Office 6.4
Conglomerates 0.4
Consumer Goods 1.5
Electronics 6.7
Energy 2.8
Engineering 2.5
Entertainment & Leisure 1.9
Financial Services 7.7
Food & Beverages 1.1
Food & Grocery 0.6
Healthcare Management 4.7
Insurance 5.2
Machinery 1.3
Media & Communications 5.2
Oil & Gas Services 0.4
Pharmaceuticals 0.8
Printing 0.9
Real Estate 0.5
Retail 3.9
Textiles 2.9
Utilities 4.8
---------------------------------------------------------------------------
TOTAL COMMON AND PREFERRED STOCKS 94.8%
---------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 37
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST GLOBAL INCOME FUND
Shareholder Letter
June 30, 1998 (Unaudited)
Dear Shareholders,
ON BEHALF OF GOLDMAN SACHS, IT IS A PLEASURE TO WELCOME YOU AS A SHAREHOLDER
IN THE GOLDMAN SACHS VARIABLE INSURANCE TRUST GLOBAL INCOME FUND.
IN THE FUTURE, YOU WILL RECEIVE ANNUAL AND SEMIANNUAL REPORTS THAT DESCRIBE
THE FUND'S PERFORMANCE, AS WELL AS INFORMATION REGARDING SPECIFIC HOLDINGS.
THIS SEMIANNUAL REPORT COVERS THE SHORT PERIOD FROM JANUARY 12, 1998, WHEN
THE FUND BEGAN OPERATIONS, THROUGH JUNE 30, 1998.
Market Review
.DOLLAR BLOC -- Late in 1997, U.S. bond prices rose as fixed
income securities became the investment of choice in the
aftermath of Asia's financial crisis. The rally continued
into 1998, helped along by, among other factors, a
strengthening U.S. dollar. By period-end, however, it was
apparent that Asia's impact was less severe than anticipat-
ed. Interest in domestic bonds waned somewhat as volatility
in overseas markets subsided. Elsewhere in the dollar bloc,
Canadian bonds, after a period of good performance, fared
poorly as Canada's Central Bank increased rates to support
a declining dollar. Australian and New Zealand markets also
faltered, in part due to New Zealand's declining dollar and
a downgrade in Australia's foreign debt rating.
.EUROPE -- Late in 1997, Europe's bond markets rallied fol-
lowing an announcement by German officials that European
Monetary Union (EMU) short-term interest rates would con-
verge at the lower level of the core markets. The rallies
continued into the new year, reinforced in part by "softer"
retail sales data and lower-than-expected gross domestic
product data. Italy was the exception, as ongoing concerns
about its suitability as a member of EMU adversely affected
its bond market.
.JAPAN -- Continued troubles within the banking sector were
a significant factor behind Japan's poor bond market per-
formance. After a brief journey into positive territory in
December, the market would turn in a poor showing in the
wake of the resignation of the Minister of Finance and amid
assumptions that measures of fiscal stimulus were in the
offing. When the long-awaited economic stimulus package was
finally released, it was viewed skeptically. Although the
package was larger than anticipated, significant doubt re-
mained as to whether it could lead to Japan's long-term re-
covery.
Performance Review
From January 12, 1998 through June 30, 1998, the Fund gen-
erated a 2.70% cumulative total return. Over the same time
period, the Fund's benchmark, the JP Morgan Global Govern-
ment Bond Index (hedged), generated a cumulative total re-
turn of 4.98%.
38
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST GLOBAL INCOME FUND
Investment Objective
The Fund seeks high total return, emphasizing current in-
come and, to a lesser extent, providing opportunities for
capital appreciation, primarily through investments in high
quality fixed income securities of U.S. and foreign issuers
and foreign currencies.
Portfolio Positioning
At the onset of the period, the Fund held a neutral posi-
tion in Europe relative to the benchmark. As the period
drew to a close, the position was increased to an
overweighting to better situate the Fund to take advantage
of the ongoing strength of the European bond markets. Like-
wise, the Fund's position in the dollar bloc countries was
neutral at the start of the period. By period-end, however,
the position shifted to an underweighting as continued ro-
bust economic growth and labor market strength led to con-
cerns of increasing inflationary pressures in the U.S.,
thus setting the stage for a potential interest rate hike.
In Japan, the Fund's position was underweight versus the
benchmark early in the period, but was increased to an
overweighting in order to take advantage of the deteriora-
tion in Japanese economic activity. At the close of the pe-
riod, this position was again underweighted, reflecting the
Fund management team's preference to focus instead on the
opportunities in Europe.
Portfolio Composition
Top 10 Portfolio Holdings as of June 30, 1998*
PERCENTAGE OF
BONDS DENOMINATION NET ASSETS
------------------ -------------
U.S. Dollar 23.7%
British Pound Sterling 17.5
Japanese Yen 12.1
German Deutschemark 9.0
French Franc 6.8
Danish Krone 6.4
Italian Lira 5.9
Australian Dollar 5.1
Spanish Peseta 3.7
Canadian Dollar 2.0
* The top 10 holdings may not be representative of the Fund's
future investments.
Portfolio Highlights
.GERMAN 10-YEAR MATURITIES -- In the German market, the Fund's
management team invested primarily in 10-year matu-rities, as the
relatively steep yield curve offered favora-ble running yields
(the difference between short rates and, in this case, 10-year
rates). The slope of the curve re-flected a 75-basis point rate
increase discounted by the market in anticipation of the
introduction of the Euro on January 1, 1999. The steep yield curve
also led to an over-weight position in German bonds versus other
European mar-kets, to better capture the higher running yield.
39
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST GLOBAL INCOME FUND
Shareholder Letter
June 30, 1998 (Unaudited)
.DANISH GOVERNMENT BONDS -- Uncertainty regarding whether or
not Denmark will become an early member of EMU prompted a
sell-off in this market during the period. Goldman Sachs
Asset Management's team of portfolio managers viewed this
as an opportunity to purchase Danish government bonds. Cur-
rently, polls continue to suggest that the referendum on
EMU will be passed. More importantly, favorable economic
fundamentals support a tightening in the spread.
.JAPANESE BONDS -- The Fund held a broad range of yen-denom-
inated bonds throughout the period. Despite yields reaching
new all-time lows, Japan faces enormous economic structural
changes. The team believes these changes will continue to
place downward pressure on an already severely depressed
economy. In turn, this could lead to further deflationary
pressures that could force the Bank of Japan to maintain an
accommodative monetary policy stance for the foreseeable
future. In view of this, the team intends to maintain an
underweight position in Japanese Bonds.
Key New Acquisitions
.European Spread Products--The team purchased European
spread products (non-government bonds issued by government-
backed entities) during the period, focusing on those that
it believes will have broad-based appeal as European coun-
tries are united under EMU. The elimination of different
currencies will put an end to exchange rate risk, and
should encourage investors to look beyond national bounda-
ries to investments in other countries. Among the issuers
that should benefit are the heavily government-owned util-
ity companies, as well as banks that provide export financ-
ing.
Outlook
Going forward, the Fund management team views the U.S. mar-
ket cautiously, given an increase in the risk that the Fed-
eral Reserve Board will move to tighten interest rates
during the summer. With this in mind, the team intends to
continue to underweight this position versus the benchmark.
Conversely, the team intends to maintain an overweight po-
sition in Europe, as it views these markets positively. In-
flationary pressures are less obvious than those in the
U.S., most notably in the labor market, and therefore, in-
terest rates are likely to remain on hold. Finally, as pre-
viously mentioned (see "Portfolio Highlights"), the team
intends to maintain an underweight position in Japan.
Goldman Sachs Asset Management thanks you for your invest-
ment and looks forward to your continued confidence.
Goldman Sachs Global Income Management Team
June 30, 1998
40
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST GLOBAL INCOME FUND
Statement of Investments
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
<S> <C> <C> <C>
DEBT OBLIGATIONS - 68.6%
AUSTRALIAN DOLLAR - 5.1%
Commonwealth of Australia
AUD 350,000 8.75% 08/15/08(b) $ 269,371
----------------------------------------------------------------------------------------------
BRITISH POUND STERLING - 17.5%
Abbey National Treasury
BPS 100,000 8.00% 04/02/03(b) $ 174,558
United Kingdom Treasury
200,000 6.75 11/26/04(b) 345,732
100,000 7.75 09/08/06(b) 185,426
100,000 9.00 08/06/12(b) 217,738
----------
$ 923,454
----------------------------------------------------------------------------------------------
CANADIAN DOLLAR - 2.0%
Government of Canada
CAD 150,000 6.00% 06/01/08(b) $ 106,928
----------------------------------------------------------------------------------------------
DANISH KRONE - 6.4%
Kingdom of Denmark
DKK 400,000 8.00% 03/15/06(b) $ 69,597
Kingdom of Germany
1,600,000 8.00 05/15/03(b) 266,163
----------
$ 335,760
----------------------------------------------------------------------------------------------
DEUTSCHEMARK - 9.0%
Baden Wuerttemberg L Finance
DEM 200,000 5.38% 02/05/10(b) $ 113,338
Federal Republic of Germany
100,000 6.50 07/15/03(b) 60,511
200,000 5.38 02/22/99(b) 112,013
300,000 6.25 01/04/24(b) 187,042
----------
$ 472,904
----------------------------------------------------------------------------------------------
FRENCH FRANC - 6.9%
Government of France
FRF 800,000 4.75% 03/12/02(b) $ 134,176
1,300,000 5.50 10/25/07(b) 226,038
----------
$ 360,214
----------------------------------------------------------------------------------------------
ITALIAN LIRA - 5.9%
Republic of Italy
ITL 400,000,000 8.50% 08/01/04(b) $ 267,680
70,000,000 6.75 07/01/07(b) 44,299
----------
$ 311,979
----------------------------------------------------------------------------------------------
JAPANESE YEN - 12.1%
Asian Development Bank
JPY 20,000,000 5.63% 02/18/02(b) $ 168,529
Federal National Mortgage Association
20,000,000 2.13 10/09/07(b) 150,575
Government of Spain
30,000,000 3.10 09/20/06(b) 243,693
International Bank For Reconstruction and Development
10,000,000 2.00 02/18/08(b) 74,989
----------
$ 637,786
----------------------------------------------------------------------------------------------
SPANISH PESETA - 3.7%
Government of Spain
ESP 25,000,000 10.30% 06/15/02(b) $ 196,434
----------------------------------------------------------------------------------------------
TOTAL DEBT OBLIGATIONS
(COST $3,608,140) $3,614,830
----------------------------------------------------------------------------------------------
CORPORATE BONDS - 14.4%
Bayerische Landesbank Girozent
USD 250,000 6.63% 06/25/07 $ 260,805
Ford Motor Credit Corp.
200,000 6.13 04/28/03(b) 200,014
Merrill Lynch and Co., Inc.
100,000 6.00 02/12/03(b) 99,612
Nederlandse Waterschapsbank
100,000 6.13 02/13/08(b) 100,600
Ontario Hydro
100,000 6.10 01/30/08(b) 100,060
----------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $763,361) $ 761,091
----------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 9.3%
United States Treasury Bonds
USD 100,000 6.75% 08/15/26(b) $ 114,484
United States Treasury Notes
100,000 6.25 02/15/03(b) 102,906
250,000 7.00 07/15/06(b) 273,007
----------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $489,116) $ 490,397
----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $4,860,617)(A) $4,866,318
----------------------------------------------------------------------------------------------
</TABLE>
FEDERAL INCOME TAX INFORMATION:
Gross unrealized gain for investments in which value exceeds cost $41,946
Gross unrealized loss for investments in which cost exceeds value (36,245)
------------------------------------------------------------------------------
Net unrealized gain $5,701
------------------------------------------------------------------------------
(a) The amount stated also represents aggregate cost for federal income tax
purposes.
(b) The security is being segregated as collateral for forward foreign
currency exchange contracts.
(c) The principal amount of each security is stated in the currency in which
the bond is denominated. See below:
AUD=Australian Dollar FRF=French Franc
BPS=British Pound Sterling ITL=Italian Lira
CAD=Canadian Dollar JPY=Japanese Yen
DKK=Danish Krone ESP=Spanish Peseta
DEM=Deutschemark USD=United States Dollar
Interest rates represent either the stated coupon rate, annualized yield on
date of purchase for discounted notes, or for floating rate securities, the
current reset rate, which is based upon current interest rate indices.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements. 41
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Statements of Assets and Liabilities
June 30, 1998 (Unaudited)
GROWTH AND
INCOME FUND
ASSETS:
Investment in securities, at value (identified cost
$6,149,740, $6,018,995, $5,393,036, $5,010,939, $3,124,450,
$2,753,610, $8,376,409 and $4,860,617) $6,198,596
Cash, at value 30,912
Receivables:
Investment securities sold 8,799
Forward foreign currency exchange contracts --
Fund shares sold 90,714
Dividends and interest, at value 9,737
Deferred organization expenses, net 19,746
Other assets --
---------------------------------------------------------------------------
TOTAL ASSETS 6,358,504
---------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 185,374
Forward foreign currency exchange contracts --
Fund shares repurchased --
Management fees 3,204
Transfer Agent fees 4,816
Variation margin 7,875
Accrued expenses and other liabilities 25,277
---------------------------------------------------------------------------
TOTAL LIABILITIES 226,546
---------------------------------------------------------------------------
NET ASSETS:
Paid-in capital 5,890,817
Accumulated undistributed net investment income 29,592
Accumulated undistributed net realized gain (loss) on
investment and futures transactions 145,129
Accumulated net realized foreign currency gain (loss) --
Net unrealized gain (loss) on investment and futures 66,420
Net unrealized gain on translation of assets and liabilities
denominated in foreign currencies --
---------------------------------------------------------------------------
NET ASSETS $6,131,958
---------------------------------------------------------------------------
Total shares of beneficial interest outstanding, no par value
(unlimited shares authorized) 538,433
Net asset value and redemption price per share $ 11.39
---------------------------------------------------------------------------
42 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
<TABLE>
<CAPTION>
CORE U.S. CORE LARGE CAP CORE SMALL CAP CAPITAL MID CAP INTERNATIONAL GLOBAL
EQUITY FUND GROWTH FUND EQUITY FUND GROWTH FUND EQUITY FUND EQUITY FUND INCOME FUND
<S> <C> <C> <C> <C> <C> <C>
$6,602,084 $5,967,000 $5,291,828 $3,216,594 $2,622,078 $9,397,424 $4,866,318
24,756 99,682 33,685 81,409 40,522 392,518 273,794
-- -- -- -- -- 108,650 --
-- -- -- -- -- 35,998 94,465
14,108 51,624 -- 20,999 20,258 24,948 --
6,233 3,381 1,558 2,195 2,433 23,200 90,310
19,950 19,950 19,950 20,366 20,372 19,745 19,745
6,374 6,238 13,369 9,018 11,439 14,209 4,384
--------------------------------------------------------------------------------------------------
6,673,505 6,147,875 5,360,390 3,350,581 2,717,102 10,016,692 5,349,016
--------------------------------------------------------------------------------------------------
-- -- -- 33,640 51,050 52,243 --
-- -- -- -- -- 16,472 46,718
-- -- 127 -- -- 12 36
3,574 3,313 3,215 1,893 1,392 7,974 3,880
7,096 3,590 2,791 4,630 4,574 3,635 4,883
-- -- -- -- 758 -- --
17,342 16,486 17,302 34,659 34,330 22,651 21,160
--------------------------------------------------------------------------------------------------
28,012 23,389 23,435 74,822 92,104 102,987 76,677
--------------------------------------------------------------------------------------------------
5,985,956 5,483,019 5,077,544 3,186,627 2,745,381 8,620,129 5,137,274
18,734 5,948 13,031 4,032 6,411 48,621 107,342
57,714 61,555 (34,509) (7,044) 5,496 185,612 (15,355)
-- -- -- -- -- 26,535 (25,207)
583,089 573,964 280,889 92,144 (132,290) 1,021,015 5,701
-- -- -- -- -- 11,793 62,584
--------------------------------------------------------------------------------------------------
$6,645,493 $6,124,486 $5,336,955 $3,275,759 $2,624,998 $9,913,705 $5,272,339
--------------------------------------------------------------------------------------------------
590,045 543,893 507,314 318,684 279,403 829,706 513,433
$ 11.26 $ 11.26 $ 10.52 $ 10.28 $ 9.40 $ 11.95 $ 10.27
--------------------------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Statements of Operations
For the Period Ended June 30, 1998(a) (Unaudited)
GROWTH AND
INCOME FUND
INVESTMENT INCOME(B):
Dividends $ 27,298
Interest 16,399
----------------------------------------------------------------
TOTAL INCOME 43,697
----------------------------------------------------------------
EXPENSES:
Management fees 11,754
Custodian fees 18,081
Transfer agent fees 12,033
Professional fees 15,988
Amortization of deferred organization expenses 961
Trustee fees 2,489
Other 4,928
----------------------------------------------------------------
TOTAL EXPENSES 66,234
----------------------------------------------------------------
Less -- expenses reimbursed by Goldman Sachs (52,129)
----------------------------------------------------------------
NET EXPENSES 14,105
----------------------------------------------------------------
NET INVESTMENT INCOME 29,592
----------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT,
FUTURES AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) from:
Investment transactions 83,445
Futures transactions 61,684
Foreign currency related transactions --
Net change in unrealized gain (loss) on:
Investments 48,856
Futures 17,564
Translation of assets and liabilities denominated
in foreign currencies --
----------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT, FUTURES AND FOREIGN CURRENCY
TRANSACTIONS 211,549
----------------------------------------------------------------
NET INCREASE (DECREASE) IN ASSETS RESULTING FROM
OPERATIONS $241,141
----------------------------------------------------------------
(a) The Growth and Income, International Equity and Global Income Funds
commenced operations on January 12, 1998; the CORE U.S. Equity, CORE
Large Cap Growth and CORE Small Cap Equity Funds commenced operations on
February 13, 1998; the Capital Growth and Mid Cap Equity Funds commenced
operations on April 30, 1998 and May 1, 1998, respectively.
(b) For the Growth and Income, CORE U.S. Equity, CORE Large Cap Growth, Mid
Cap Equity, International Equity and Global Income Funds, taxes withheld
on dividends and interests were $112, $255, $147, $24, $12,321 and
$1,858, respectively.
44 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
<TABLE>
<CAPTION>
CORE U.S. CORE LARGE CAP CORE SMALL CAP CAPITAL MID CAP INTERNATIONAL GLOBAL
EQUITY FUND GROWTH FUND EQUITY FUND GROWTH FUND EQUITY FUND EQUITY FUND INCOME FUND
<S> <C> <C> <C> <C> <C> <C>
$ 29,575 $ 17,336 $ 26,377 $ 6,063 $ 5,366 $ 80,383 $ --
6,183 5,228 4,631 2,580 4,323 13,421 132,208
----------------------------------------------------------------------------------------------------
35,758 22,564 31,008 8,643 9,689 93,804 132,208
----------------------------------------------------------------------------------------------------
14,896 14,544 14,989 3,843 2,761 36,146 21,314
19,872 14,221 20,373 7,190 6,907 42,100 17,677
10,425 8,065 10,425 4,630 4,574 9,474 12,021
14,270 14,271 14,270 8,219 8,120 16,710 18,006
756 756 756 340 334 961 961
2,221 2,222 2,222 1,307 1,291 2,489 2,489
4,399 4,399 4,283 2,585 2,555 4,931 4,926
----------------------------------------------------------------------------------------------------
66,839 58,478 67,318 28,114 26,542 112,811 77,394
----------------------------------------------------------------------------------------------------
(49,815) (41,862) (49,341) (23,503) (23,264) (67,628) (52,528)
----------------------------------------------------------------------------------------------------
17,024 16,616 17,977 4,611 3,278 45,183 24,866
----------------------------------------------------------------------------------------------------
18,734 5,948 13,031 4,032 6,411 48,621 107,342
----------------------------------------------------------------------------------------------------
57,714 61,555 (34,509) (7,044) 229 185,612 (15,355)
-- -- -- -- 5,267 -- --
-- -- -- -- -- 26,535 (25,207)
583,089 573,964 280,889 92,144 (131,532) 1,021,015 5,701
-- -- -- -- (758) -- --
-- -- -- -- -- 11,793 62,584
----------------------------------------------------------------------------------------------------
640,803 635,519 246,380 85,100 (126,794) 1,244,955 27,723
----------------------------------------------------------------------------------------------------
$659,537 $641,467 $259,411 $ 89,132 $(120,383) $1,293,576 $135,065
----------------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Statements of Changes in Net Assets
For the Period Ended June 30, 1998(a) (Unaudited)
GROWTH AND
INCOME
FUND
FROM OPERATIONS:
Net investment income $ 29,592
Net realized gain (loss) on investment and futures transactions 145,129
Net realized gain (loss) on foreign currency related
transactions --
Net change in unrealized gain (loss) on investments and futures 66,420
Net change in unrealized gain on translation of assets and
liabilities denominated in foreign currencies --
-----------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 241,141
-----------------------------------------------------------------------------
FROM SHARE TRANSACTIONS:
Proceeds from sales of shares 5,795,832
Reinvestment of dividends and distributions --
Cost of shares repurchased (5,015)
-----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 5,790,817
-----------------------------------------------------------------------------
TOTAL INCREASE 6,031,958
-----------------------------------------------------------------------------
NET ASSETS:
Beginning of period 100,000
-----------------------------------------------------------------------------
End of period $6,131,958
-----------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME $ 29,592
-----------------------------------------------------------------------------
SUMMARY OF SHARE TRANSACTIONS:
Shares sold 538,857
Shares repurchased (424)
-----------------------------------------------------------------------------
TOTAL 538,433
-----------------------------------------------------------------------------
(a) The Growth and Income, International Equity and Global Income Funds
commenced operations on January 12, 1998; the CORE U.S. Equity, CORE
Large Cap Growth and CORE Small Cap Equity Funds commenced operations on
February 13, 1998; the Capital Growth and Mid Cap Equity Funds commenced
operations on April 30, 1998 and May 1, 1998, respectively.
46 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
<TABLE>
<CAPTION>
CAPITAL
CORE U.S. CORE LARGE CAP CORE SMALL CAP GROWTH MID CAP INTERNATIONAL GLOBAL
EQUITY FUND GROWTH FUND EQUITY FUND FUND EQUITY FUND EQUITY FUND INCOME FUND
<S> <C> <C> <C> <C> <C> <C>
$ 18,734 $ 5,948 $ 13,031 $ 4,032 $ 6,411 $ 48,621 $ 107,342
57,714 61,555 (34,509) (7,044) 5,496 185,612 (15,355)
-- -- -- -- -- 26,535 (25,207)
583,089 573,964 280,889 92,144 (132,290) 1,021,015 5,701
-- -- -- -- -- 11,793 62,584
-----------------------------------------------------------------------------------------------
659,537 641,467 259,411 89,132 (120,383) 1,293,576 135,065
-----------------------------------------------------------------------------------------------
5,987,293 5,483,865 5,077,671 3,186,627 2,753,752 8,635,141 5,137,479
-- -- -- -- -- -- --
(1,337) (846) (127) -- (8,371) (15,012) (205)
-----------------------------------------------------------------------------------------------
5,985,956 5,483,019 5,077,544 3,186,627 2,745,381 8,620,129 5,137,274
-----------------------------------------------------------------------------------------------
6,645,493 6,124,486 5,336,955 3,275,759 2,624,998 9,913,705 5,272,339
-----------------------------------------------------------------------------------------------
-- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------
$6,645,493 $6,124,486 $5,336,955 $3,275,759 $2,624,998 $9,913,705 $5,272,339
-----------------------------------------------------------------------------------------------
$ 18,734 $ 5,948 $ 13,031 $ 4,032 $ 6,411 $ 48,621 $ 107,342
-----------------------------------------------------------------------------------------------
590,165 543,972 507,326 318,684 280,253 830,957 513,453
(120) (79) (12) 0 (850) (1,251) (20)
-----------------------------------------------------------------------------------------------
590,045 543,893 507,314 318,684 279,403 829,706 513,433
-----------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Financial Highlights
Selected Data for a Share Outstanding
INCOME FROM
INVESTMENT OPERATIONS(B)
----------------------------------------
NET REALIZED
AND UNREALIZED
NET REALIZED GAIN ON
NET ASSET AND UNREALIZED FOREIGN
VALUE, NET GAIN (LOSS) ON CURRENCY
BEGINNING INVESTMENT INVESTMENTS RELATED
OF PERIOD INCOME AND FUTURES TRANSACTIONS
FOR THE PERIOD ENDED JUNE 30, 1998(A) (UNAUDITED)
Growth and Income Fund $10.00 $0.06 $1.33 $ --
-----------------------------------------------------------------------------
CORE U.S. Equity Fund 10.00 0.03 1.23 --
-----------------------------------------------------------------------------
CORE Large Cap Growth Fund 10.00 0.01 1.25 --
-----------------------------------------------------------------------------
CORE Small Cap Equity Fund 10.00 0.03 0.49 --
-----------------------------------------------------------------------------
Capital Growth Fund 10.00 0.01 0.27 --
-----------------------------------------------------------------------------
Mid Cap Equity Fund 10.00 0.02 (0.62) --
-----------------------------------------------------------------------------
International Equity Fund 10.00 0.06 1.71 0.18
-----------------------------------------------------------------------------
Global Income Fund 10.00 0.21 0.04 0.02
-----------------------------------------------------------------------------
(a) The Growth and Income, International Equity and Global Income Funds
commenced operations on January 12, 1998; the CORE U.S. Equity, CORE
Large Cap Growth and CORE Small Cap Equity Funds commenced operations on
February 13, 1998; the Capital Growth and Mid Cap Equity Funds commenced
operations on April 30, 1998 and May 1, 1998, respectively.
(b) Includes the balancing effect of calculating per share amounts.
(c) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of period.
(d) Annualized.
48 The accompanying notes are an integral part of these financial statements.
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
<TABLE>
<CAPTION>
RATIOS ASSUMING
NO EXPENSE
REIMBURSEMENTS
---------------------------
RATIO OF
RATIO NET
RATIO OF NET NET INVESTMENT
NET ASSET OF NET INVESTMENT ASSETS AT RATIO OF INCOME
VALUE, EXPENSES INCOME PORTFOLIO END OF EXPENSES (LOSS) TO
END OF TOTAL TO AVERAGE TO AVERAGE TURNOVER PERIOD TO AVERAGE AVERAGE
PERIOD RETURN(C) NET ASSETS(D) NET ASSETS(D) RATE (IN 000'S) NET ASSETS(D) NET ASSETS(D)
<S> <C> <C> <C> <C> <C> <C> <C>
$11.39 13.90 % 0.90% 1.89% 18% $6,132 4.23% (1.44)%
----------------------------------------------------------------------------------------------------
11.26 12.60 0.80 0.88 16 6,645 3.14 (1.46)
----------------------------------------------------------------------------------------------------
11.26 12.60 0.80 0.29 16 6,125 2.81 (1.72)
----------------------------------------------------------------------------------------------------
10.52 5.20 0.90 0.65 20 5,337 3.37 (1.82)
----------------------------------------------------------------------------------------------------
10.28 2.80 0.90 0.79 4 3,276 5.49 (3.80)
----------------------------------------------------------------------------------------------------
9.40 (6.00) 0.95 1.86 5 2,625 7.69 (4.88)
----------------------------------------------------------------------------------------------------
11.95 19.50 1.25 1.35 36 9,914 3.12 (0.52)
----------------------------------------------------------------------------------------------------
10.27 2.70 1.05 4.53 92 5,272 3.27 2.31
----------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Notes to Financial Statements
June 30, 1998 (Unaudited)
1. ORGANIZATION
Goldman Sachs Variable Insurance Trust (the "Trust") is a Delaware business
trust registered under the Investment Company Act of 1940, as amended ("the
Act") as an open-end, management investment company. The Trust includes
Goldman Sachs Growth and Income Fund ("Growth and Income"), Goldman Sachs
CORE U.S. Equity Fund ("CORE U.S. Equity"), Goldman Sachs CORE Large Cap
Growth Fund ("CORE Large Cap Growth"), Goldman Sachs CORE Small Cap Equity
Fund ("CORE Small Cap Equity"), Goldman Sachs Capital Growth Fund ("Capital
Growth"), Goldman Sachs Mid Cap Equity Fund ("Mid Cap Equity"), Goldman Sachs
International Equity Fund ("International Equity") and Goldman Sachs Global
Income Fund ("Global Income"), collectively, "the Funds" or individually a
"Fund". Each Fund, except the Global Income Fund is diversified under the
Act. The Global Income Fund is a "non-diversified" Fund under the Act.
Shares of the Trust may be purchased and held by separate accounts of par-
ticipating life insurance companies for the purpose of funding variable annu-
ity contracts and variable life insurance policies. Shares of the Trust are
not offered directly to the general public.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make es-
timates and assumptions that may affect the reported amounts.
A. INVESTMENT VALUATION -- Securities listed on any U.S. or foreign stock ex-
change or on the National Association of Securities Dealers Automated Quota-
tions System ("NASDAQ") will be valued at the last sale price on the exchange
or system in which they are principally traded on the valuation date. If
there is no sale on the valuation day, securities traded will be valued at
the mean between the closing bid and asked prices. Over-the-counter securi-
ties not quoted on NASDAQ will be valued at the last sale price on the valua-
tion day or, if no sale occurs, at the mean between the last bid and asked
price. Debt securities are valued at prices supplied by an independent pric-
ing service, which reflect broker/dealer-supplied valuations and matrix pric-
ing systems. Short-term debt obligations maturing in sixty days or less are
valued at amortized cost. Restricted securities, and other securities for
which quotations are not readily available, are valued at fair value using
methods approved by the Board of Trustees of the Trust.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME -- Securities transactions
are recorded on the trade date. Realized gains and losses on sales of invest-
ments are calculated on the identified-cost basis. Dividend income is re-
corded on the ex-dividend date. Dividends for which the fund has the choice
to receive either cash or stock are recognized as investment income in an
amount equal to the cash dividend. Interest income is determined on the basis
of interest accrued, premium amortized and discount earned. Growth and Income
and Global Income do not amortize premiums. In addition, it is the Funds'
policy to accrue for estimated capital gains taxes on foreign securities held
by the Funds subject to such taxes.
C. FOREIGN CURRENCY TRANSLATIONS -- Amounts denominated in foreign currencies
are translated into U.S. dollars on the following basis: (i) investment valu-
ations, other assets and liabilities initially expressed in foreign curren-
cies are converted each business day into U.S. dollars based upon current
exchange rates; (ii) purchases and sales of foreign investments, income and
expenses are converted into U.S. dollars based upon currency exchange rates
prevailing on the respective dates of such transactions.
50
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Net realized and unrealized gain (loss) on foreign currency transactions
will represent: (i) foreign currency exchange gains and losses from the sale
and holdings of foreign currencies and investments; (ii) gains and losses be-
tween trade date and settlement date on investment securities transactions
and forward exchange contracts; and (iii) gains and losses from the differ-
ence between amounts of interest and dividend recorded and the amounts actu-
ally received.
D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- International Equity and
Global Income may enter into forward foreign currency exchange contracts for
the purchase or sale of a specific foreign currency at a fixed price on a fu-
ture date as a hedge or cross-hedge against either specific transactions or
portfolio positions. International Equity and Global Income may also purchase
and sell forward contracts to seek to increase total return. All commitments
are "marked-to-market" daily at the applicable translation rates and any re-
sulting unrealized gains or losses are recorded in each Fund's financial
statements. The Funds record realized gains or losses at the time the forward
contract is offset by entry into a closing transaction or extinguished by de-
livery of the currency. Risks may arise upon entering into these contracts
from the potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
E. MORTGAGE DOLLAR ROLLS -- The Global Income may enter into mortgage "dollar
rolls" in which the Fund sells securities in the current month for delivery
and simultaneously contracts with the same counterparty to repurchase similar
(same type, coupon and maturity) but not identical securities on a specified
future date. During the roll period, the Fund loses the right to receive
principal and interest paid on the securities sold. However, the Fund bene-
fits to the extent of any difference between the price received for the secu-
rities sold and the lower forward price for the future purchase (often
referred to as the "drop") or fee income plus the interest earned on the cash
proceeds of the securities sold until the settlement date of the forward pur-
chase. The Fund will hold and maintain in a segregated account, until the
settlement date, cash or liquid assets, high-grade debt securities in an
amount equal to the forward purchase price. For financial reporting and tax
reporting purposes, the Fund treats mortgage dollar rolls as two separate
transactions; one involving the purchase of a security and a separate trans-
action involving a sale.
F. FUTURES CONTRACTS -- The Funds may enter into futures transactions to
hedge against changes in interest rates, securities prices, currency exchange
rates or to seek an increase of total return.
Upon entering into a futures contract, the Funds are required to deposit
with a broker an amount of cash or securities equal to the minimum initial
margin requirement of the futures exchange on which the contract is traded.
Payments for mark to market on futures contracts ("variation margin") are
paid or received by the Funds daily, dependent on the daily fluctuations in
the value of the contracts, and are recorded for financial reporting purposes
as unrealized gains or losses. When contracts are closed, the Funds realize a
gain or loss equal to the difference between the value of the futures con-
tract to sell and the value of futures contract to buy. Gains and losses are
reported in the Statements of Operations.
The use of futures contracts involve, to varying degrees, elements of mar-
ket and counterparty risk which may exceed the amounts recognized in the
Statements of Assets and Liabilities. Changes in the value of the futures
contract may not directly correlate with changes in the value of the under-
lying securities. This risk may decrease the effectiveness of the Funds'
hedging strategies and potentially result in a loss.
G. FEDERAL TAXES -- It is each Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute each year substantially all of its investment company taxable
and tax-
exempt income to its shareholders. Accordingly, no federal tax provisions are
required.
The characterization of distributions to shareholders for financial report-
ing purposes is determined in accordance with income tax rules. Therefore,
the source of a portfolio's distributions may be shown in the accompanying
financial statements
51
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Notes to Financial Statements
June 30, 1998 (Unaudited)
as either from or in excess of net investment income or net realized gain on
investment transactions, or from paid-in-capital, depending on the type of
book/tax differences that may exist as well as timing differences associated
with having different book and tax year ends.
H. DEFERRED ORGANIZATION EXPENSES -- Organization-related costs are being am-
ortized on a straight-line basis over a period of five years.
The deferred organization costs for the Growth and Income, International
Equity and Global Income Funds each have an unamortized period remaining
through January 12, 2003; the CORE U.S. Equity, CORE Large Cap Growth and
CORE Small Cap Equity Funds each have an unamortized period remaining through
February 13, 2003; the Capital Growth and Mid Cap Equity Funds have an unam-
ortized period remaining through April 30, 2003 and May 1, 2003, respective-
ly.
I. EXPENSES -- Expenses incurred by the Trust that do not specifically relate
to an individual portfolio of the Trust are generally allocated to the port-
folios based on a pro-rata basis.
3. AGREEMENTS
Pursuant to the Investment Management Agreement (the "Agreement"), Goldman
Sachs Asset Management ("GSAM"), a separate operating division of Goldman,
Sachs & Co. ("Goldman Sachs"), serves as the investment advisor for the
Growth and Income, CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap
Equity, Capital Growth and Mid Cap Equity Funds. Goldman Sachs Asset Manage-
ment International ("GSAMI"), an affiliate of Goldman Sachs, serves as the
investment advisor for International Equity and Global Income Fund. Under the
Agreement, the advisers, subject to the general supervision of the Trust's
Board of Trustees, manage the Funds' portfolios (GSAM and GSAMI are each re-
ferred to herein as the "investment advisor.") As compensation for the serv-
ices rendered pursuant to the Agreement, the assumption of the expenses
related thereto and administering the Funds' business affairs, including pro-
viding facilities, the advisor is entitled to a fee, computed daily and pay-
able monthly at an annual rate equal to .75%, .70%, .70%, .75%, .75%, .80%,
1.00% and .90% of average daily net assets of Growth and Income, CORE U.S.
Equity, CORE Large Cap Growth, CORE Small Cap Equity, Capital Growth, Mid Cap
Equity, International Equity and Global Income, respectively.
The advisor has voluntarily agreed to limit certain "Other Expenses" of the
Funds (excluding management fees, taxes, interest, brokerage fees, litigation
and indemnification and other extraordinary expenses) to the extent that such
expenses exceed .15%, .10%, .10%, .15%, .15%, .15%, .25% and .15% of the av-
erage daily net assets of Growth and Income, CORE U.S. Equity, CORE Large Cap
Growth, CORE Small Cap Equity, Capital Growth, Mid Cap Equity, International
Equity and Global Income, respectively.
Goldmans Sachs serves as the distributor of each Fund's shares at no cost
to the Funds.
52
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
For the period ended June 30, 1998, the advisors have voluntarily agreed to
reimburse other expenses as follows (amounts in thousands):
<TABLE>
<CAPTION>
REIMBURSEMENT
(PAYABLE)
FUND REIMBURSEMENT OUTSTANDING
------------------------------------------------------------------------------------------
<S> <C> <C>
Growth and Income $52 $(6)
------------------------------------------------------------------------------------------
CORE U.S. Equity 50 6
------------------------------------------------------------------------------------------
CORE Large Cap Growth 42 6
------------------------------------------------------------------------------------------
CORE Small Cap Equity 49 13
------------------------------------------------------------------------------------------
Capital Growth 24 9
------------------------------------------------------------------------------------------
Mid Cap Equity 23 11
------------------------------------------------------------------------------------------
International Equity 68 14
------------------------------------------------------------------------------------------
Global Income 53 4
------------------------------------------------------------------------------------------
</TABLE>
The reimbursement outstanding balance is included in other assets in the ac-
companying statements of assets and liabilities or accrued expenses and other
liabilities.
4. PORTFOLIO SECURITY TRANSACTIONS
Purchases and proceeds of sales or maturities of long-term securities for the
period ended June 30, 1998, were as follows:
<TABLE>
<CAPTION>
SALES OR SALES OR MATURITIES
PURCHASES OF PURCHASES MATURITIES OF (EXCLUDING U.S.
U.S. GOVERNMENT (EXCLUDING U.S. U.S. GOVERNMENT GOVERNMENT AND
AND AGENCY GOVERNMENT AND AND AGENCY AGENCY
OBLIGATIONS AGENCY OBLIGATIONS) OBLIGATIONS OBLIGATIONS)
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth and
Income -- $5,235,919 -- $ 543,806
--------------------------------------------------------------------------------------
CORE U.S. Equity -- 6,874,673 -- 913,392
--------------------------------------------------------------------------------------
CORE Large Cap Growth -- 6,208,858 -- 877,377
--------------------------------------------------------------------------------------
CORE Small Cap Equity -- 6,090,213 -- 1,044,765
--------------------------------------------------------------------------------------
Capital Growth -- 3,141,907 -- 110,413
--------------------------------------------------------------------------------------
Mid Cap Equity -- 2,150,504 -- 97,123
--------------------------------------------------------------------------------------
International Equity -- 11,042,993 -- 2,852,196
--------------------------------------------------------------------------------------
Global Income $1,416,834 7,796,691 $1,340,375 2,997,142
--------------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Notes to Financial Statements
June 30, 1998 (Unaudited)
At June 30, 1998, International Equity had outstanding forward foreign cur-
rency exchange contracts both to purchase and sell foreign currencies as fol-
lows:
FOREIGN CURRENCY CONTRACTUAL CURRENT UNREALIZED
PURCHASE CONTRACTS VALUE VALUE GAIN/(LOSS)
------------------------------------------------------------------------------
Deutsche Mark Expiring 07/23/98 $ 441,903 $ 436,511 $(5,392)
Deutsche Mark Expiring 09/29/98 119,494 120,815 1,321
------------------------------------------------------------------------------
TOTAL FOREIGN CURRENCY PURCHASE CONTRACTS $ 561,397 $ 557,326 $(4,071)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
FOREIGN CURRENCY CONTRACTUAL CURRENT UNREALIZED
SALE CONTRACTS VALUE VALUE GAIN/(LOSS)
------------------------------------------------------------------------------
Swiss Franc Expiring 08/28/98 $ 449,689 $ 430,780 $18,909
Swiss Franc Expiring 08/28/98 7,633 7,671 (38)
British Pound Sterling Expiring 09/29/98 119,494 121,228 (1,734)
Hong Kong Dollar Expiring 08/10/98 163,358 164,272 (914)
------------------------------------------------------------------------------
TOTAL FOREIGN CURRENCY SALE CONTRACTS $ 740,174 $ 723,951 $16,223
------------------------------------------------------------------------------
At June 30, 1998, Global Income had outstanding forward foreign currency
exchange contracts, both to purchase and sell foreign currencies as follows:
FOREIGN CURRENCY CONTRACTUAL CURRENT UNREALIZED
PURCHASE CONTRACTS VALUE VALUE GAIN/(LOSS)
---------------------------------------------------------------------------
Deutsche Mark Expiring 07/16/98 $ 252,841 $ 252,869 $ 28
Deutsche Mark Expiring 09/22/98 4,508 4,458 (50)
Deutsche Mark Expiring 09/29/98 63,839 64,545 706
Greek Drachma Expiring 11/10/98 73,236 72,638 (598)
Philippine Peso Expiring 08/12/98 51,000 49,128 (1,872)
Singapore Dollar Expiring 09/25/98 3,557 3,498 (59)
Thailand Baht Expiring 09/22/98 42,000 38,967 (3,033)
---------------------------------------------------------------------------
TOTAL FOREIGN CURRENCY PURCHASE CON-
TRACTS $ 490,981 $ 486,103 $ (4,878)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
FOREIGN CURRENCY CONTRACTUAL CURRENT UNREALIZED
SALE CONTRACTS VALUE VALUE GAIN/(LOSS)
---------------------------------------------------------------------------
Australian Dollar Expiring 07/17/98 $ 256,509 $ 270,379 $(13,870)
British Pound Expiring 09/29/98 999,125 1,000,388 (1,263)
Canadian Dollar Expiring 08/24/98 111,389 111,524 (135)
Danish Krone 07/16/98 337,741 331,628 6,113
Deutsche Mark Expiring 07/23/98 376,511 371,917 4,594
Deutsche Mark Expiring 07/24/98 115,935 115,743 192
Deutsche Mark Expiring 11/10/98 72,538 69,169 3,369
French Frank Expiring 07/30/98 365,501 361,085 4,416
Italian Lira Expiring 08/13/98 319,679 314,604 5,075
Japanese Yen Expiring 07/23/98 64,314 59,932 4,382
Japanese Yen Expiring 07/24/98 615,928 584,023 31,905
Japanese Yen Expiring 09/22/98 6,334 6,413 (79)
Malaysian Ringgit Expiring 09/22/98 42,000 36,530 5,470
Singapore Dollar Expiring 08/12/98 85,000 82,033 2,967
Spanish Pesta Expiring 09/10/98 212,381 208,699 3,682
Swiss Frank Expiring 08/28/98 253,226 242,578 10,648
---------------------------------------------------------------------------
TOTAL FOREIGN CURRENCY SALE CONTRACTS $4,234,111 $4,166,645 $ 67,466
---------------------------------------------------------------------------
54
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
The contractual amounts of forward foreign currency exchange contracts do
not necessarily represent the amounts potentially subject to risk. The mea-
surement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered. At June 30,
1998, International Equity and Global Income had sufficient cash and/or secu-
rities to cover any commitments under these contracts.
At June 30, 1998, International Equity and Global Income has recorded a
"Receivable for forward currency exchange contracts" and "Payable for forward
foreign currency exchange contracts" resulting from open forward foreign cur-
rency exchange contracts of $20,230 and $8,078, respectively for Interna-
tional Equity and $83,547 and $20,959, respectively for Global Income, in the
accompanying Statement of Assets and Liabilities. Included in the receivable
and payable for forward foreign currency exchange contracts are $15,768 and
$8,394, respectively for International Equity and $10,918 and $25,759, re-
spectively for Global Income, related to forward contracts closed but not
settled as of June 30, 1998.
For the period ended June 30, 1998, the Growth and Income and Mid Cap Eq-
uity incurred commission expenses of approximately $100 and $90, respective-
ly, in connection with futures contracts entered into with Goldman Sachs.
Growth and Income and Mid Cap Equity owe approximately $8,000 and $1,000, re-
spectively, to Goldman Sachs related to variation margin on futures contracts
as of June 30, 1998.
5. REPURCHASE AGREEMENTS
During the term of a repurchase agreement, the value of the underlying secu-
rities, including accrued interest, is required to equal or exceed the value
of the repurchase agreement. The underlying securities for all repurchase
agreements are held in safekeeping at the Funds' custodian.
6. JOINT REPURCHASE AGREEMENT ACCOUNT
The Funds, together with other registered investment companies having advi-
sory agreements with GSAM or its affiliates, transfer uninvested cash into
joint accounts, the daily aggregate balance of which is invested in one or
more repurchase agreements. The underlying securities for the repurchase
agreements are U.S. Treasury and agency obligations. At June 30, 1998, Growth
and Income, Capital Growth and Mid Cap Equity had undivided interests in the
repurchase agreements in the following joint account which equaled
$1,300,000, $100,000, and $700,000, respectively, in principal amount. At
June 30, 1998, the repurchase agreements held in the joint account along with
the corresponding underlying securities (including the type of securities,
market values, interest rates and maturity dates) were as follows:
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
AMOUNT RATE DATE COST
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CIBC OPPENHEIMER, INC. $250,000,000 5.70% 07/01/98 $ 250,000,000
dated 06/30/98, repurchase price $250,039,583 (total collateral value $255,475,765
consisting of FHLMC: 7.00%, 12/01/27)
-------------------------------------------------------------------------------------
LEHMAN BROTHERS, INC. 300,000,000 6.00 07/01/98 300,000,000
dated 06/30/98, repurchase price $300,050,000 (total collateral value $305,999,913
consisting of FHLMC: 6.00%-10.50%, 09/01/98-12/01/27;
FNMA: 6.00%-12.50%, 12/01/00-08/01/26)
-------------------------------------------------------------------------------------
LEHMAN BROTHERS, INC. 270,000,000 5.85 07/01/98 270,000,000
dated 06/30/98, repurchase price $270,043,875 (total collateral value $275,398,468
consisting of FHLMC: 5.50%-9.00%, 10/01/98-11/01/27;
FNMA: 6.29%-12.00%, 10/01/00-11/01/27)
-------------------------------------------------------------------------------------
SALOMON-SMITH BARNEY 264,400,000 5.75 07/01/98 264,400,000
dated 06/30/98, repurchase price $264,442,231 (total collateral value $269,848,754
consisting of U.S. Treasury Stripped Interest Only Security: 05/15/04; U.S. Treasury
Stripped Principal Only Securities: 7.50%-8.75%, 08/15/00-11/15/01)
-------------------------------------------------------------------------------------
TOTAL JOINT REPURCHASE AGREEMENT ACCOUNT $1,084,400,000
-------------------------------------------------------------------------------------
</TABLE>
55
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
Notes to Financial Statements
June 30, 1998 (Unaudited)
7. LINE OF CREDIT FACILITY
The Funds participate in a $250,000,000 uncommitted, unsecured revolving line
of credit facility. The facility is to be used solely for temporary or emer-
gency purposes. Under the most restrictive arrangement, each Fund must own
securities having a market value in excess of 300% of the total bank
borrowings. The interest rate on the borrowings is based on the Federal Funds
Rate at the time of participation. During the period ended June 30, 1998, the
Funds did not have any borrowings under this facility.
56
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
57
<PAGE>
TRUSTEES OFFICERS
Ashok N. Bakhru, Chairman Douglas C. Grip, President
David B. Ford James A. Fitzpatrick, Vice President
Douglas C. Grip Nancy L. Mucker, Vice President
John P. McNulty John M. Perlowski, Treasurer
Mary P. McPherson Michael J. Richman, Secretary
Alan A. Shuch Howard B. Surloff, Assistant Secretary
Jackson W. Smart, Jr. Valerie A. Zondorak, Assistant Secretary
William H. Springer
Richard P. Strubel
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent
GOLDMAN SACHS ASSET MANAGEMENT
Investment Adviser
GOLDMAN SACHS ASSET MANAGEMENT
113 Peterborough Court
London, England EC4A 288
Toll Free (in U.S.): 800-292-4726
This report is prepared for the general information of contract owners and is
not an offer of shares of the Goldman Sachs Variable Insurance Trust: Growth and
Income, CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap Equity, Capital
Growth, Mid Cap Equity, International Equity and Global Income Funds.
This material is not authorized for distribution to prospective investors unless
preceded or accompanied by a current Prospectus which contains facts concerning
the Fund's objectives, policies, management, expenses and other information.
