<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
----------------
Supplement dated March 5, 1999 to
Prospectus dated January 1, 1998
On the Cover Page and under "FUND HIGHLIGHTS -- What are the Investment
Objectives and Policies of the Funds" and "INVESTMENT OBJECTIVES AND POLICIES
- -- Mid Cap Equity Fund," the following changes are made:
The range of public stock market capitalizations in which the Fund will
invest is amended such that the Mid Cap Equity Fund will seek to meet its
objective primarily through investments in equity securities of companies
with public stock market capitalizations within the range of the market
capitalization of companies constituting the Russell Midcap Index at the
time of investment (currently between $400 million and $16 billion).
Under "OVERVIEW OF INVESTMENT STYLES -- EQUITY FUNDS" the International
Equity Fund is deleted from the "Growth Style " section and the following
paragraph is added:
Actively Managed Fund. The International Equity Fund is managed using an
active international approach, which utilizes a consistent process of stock
selection undertaken by portfolio management teams located within each of
the major investment regions, including Europe, Japan, Asia and the United
States. In selecting securities, the Investment Adviser uses a long-term,
bottom-up strategy based on first-hand fundamental research that is
designed to give broad exposure to the available opportunities while
seeking to add return primarily through stock selection. Equity securities
for this Fund are evaluated based on three key factors--the business, the
management and the valuation. The Investment Adviser ordinarily seeks
securities that have, in the Investment Adviser's opinion, superior
earnings growth potential, sustainable franchise value with management
attuned to creating shareholder value and relatively discounted valuations.
In addition, the Investment Adviser uses a multi-factor risk model which
seeks to assure that deviations from the benchmark are justifiable.
Under "INVESTMENT OBJECTIVES AND POLICIES" the second sentence of the
"Primary Investment Focus" of the CORE U.S. Equity Fund, and the first sentence
of "Primary Investment Focus" of each of the CORE Large Cap Growth and CORE
Small Cap Equity Funds have been revised to delete the requirement that equity
securities of foreign issuers, in which each Fund may invest, must comply with
U.S. accounting standards.
Under "INVESTMENT OBJECTIVES AND POLICIES" subsections "Global Income Fund"
and "High Yield Fund" the second sentence of subsection "Other" for each Fund
is revised to add credit swaps as one of the active management techniques that
the Fund may employ to manage its duration and term structure, to seek to hedge
its exposure to foreign currencies and to seek to enhance returns. In addition,
credit swaps, which is limited to 5% of net assets, is added to item (iii) of
subsection "Miscellaneous Techniques" under the section "INVESTMENT
TECHNIQUES."
Under "DESCRIPTION OF SECURITIES" subsection "Foreign Investments--Foreign
Securities" the following language has been added after the fourth sentence of
the second paragraph:
The introduction of a single currency, the euro, on January 1, 1999 for
participating European nations in the European Economic and Monetary Union
presents unique uncertainties, including the legal treatment of certain
outstanding financial contracts after January 1, 1999 that refer to
existing currencies rather than the euro; the establishment and maintenance
of exchange rates for currencies being converted into the euro; the
fluctuation of the euro relative to non-euro currencies during the
transition period from January 1, 1999 to December 31, 2001 and beyond;
whether the interest rate, tax and labor regimes of European countries
participating in the euro will converge over time; and whether the
conversion of the currencies of other countries that now are or may in the
future become members of the European Union ("EU")
<PAGE>
may have an impact on the euro. These or other factors, including political
and economic risks, could cause market disruptions could adversely affect
the value of securities held by the Funds.
Brokerage commissions, custodial services and other costs relating to
investment in international securities markets generally are more expensive
than in the United States. In addition, clearance and settlement procedures
may be different in foreign countries and, in certain markets, such
procedures have been unable to keep pace with the volume of securities
transactions, thus making it difficult to conduct such transactions.
Under "INVESTMENT TECHNIQUES" subsection "Futures Contracts and Options on
Futures Contracts" the third sentence of the first paragraph has been revised
to read as follows:
The futures contracts may be based on various securities (such as U.S.
Government securities), foreign currencies, securities indices and other
financial instruments and indices, whether domestic or foreign.
Under "INVESTMENT TECHNIQUES" the following two paragraphs are added after
subsection "Futures Contracts and Options on Futures Contracts":
Standard & Poor's Depository Receipts
Each Fund (other than the High Yield and Global Income Funds) may,
consistent with its objectives, purchase Standard & Poor's Depository
receipts ("SPDRs"). SPDRs are American Stock Exchange-traded securities
that represent ownership in the SPDR Trust, a trust which has been
established to accumulate and hold a portfolio of common stocks that is
intended to track the price performance and dividend yield of the S&P 500.
This trust is sponsored by a subsidiary of the American Stock Exchange.
SPDRs may be used for several reasons, including but not limited to:
facilitating the handling of cash flows or trading, or reducing transaction
costs. The use of SPDRs would introduce additional risks to the Fund as the
price movement of the instrument does not perfectly correlate with the
price action of the underlying index.
Equity Swaps
Each Fund (other than the High Yield and Global Income Funds) may invest up
to 10% of its total assets in equity swaps. Equity swaps allow the parties
to a swap agreement to exchange the dividend income or other components of
return on an equity investment (e.g., a group of equity securities or an
index) for a component of return on another non-equity or equity
investment. An equity swap may be used by a Fund to invest in a market
without owning or taking physical custody of securities in circumstances in
which direct investment may be restricted for legal reasons or is otherwise
impractical. Equity swaps are derivatives and their value can be very
volatile. To the extent that the Investment Adviser does not accurately
analyze and predict the potential relative fluctuation of the components
swapped with another party, a Fund may suffer a loss. The value of some
components of an equity swap (such as the dividends on a common stock) may
also be sensitive to changes in interest rates. Furthermore, during the
period a swap is outstanding, a Fund may suffer a loss if the counterparty
defaults. In connection with its investments in equity swaps, a Fund will
either segregate cash or liquid assets or otherwise cover its obligations
in a manner required by the SEC.
Under "INVESTMENT TECHNIQUES" the second paragraph after subsection
"Currency Swaps" has been revised to read as follows:
A Fund will not enter into swap transactions unless the unsecured
commercial paper, senior debt or claims-paying ability of the other party
thereto is rated investment grade by S&P or Moody's, or, if unrated by such
rating organizations, determined to be of comparable quality by the
Investment Adviser. The use of currency swaps is a highly specialized
activity which involves investment techniques and risks different from
those associated with ordinary portfolio securities transactions.
Under "INVESTMENT TECHNIQUES" subsection "When-Issued Securities and Forward
Commitments" the following sentences are added:
Each Fund may sell securities on a forward commitment basis; that is, make
contracts to sell securities for a fixed price at a future date beyond the
customary, three-day settlement. Securities sold on a forward
<PAGE>
commitment basis involve the risk that the value of the securities to be
sold may increase prior to the settlement date.
Under "INVESTMENT TECHNIQUES" subsection "Miscellaneous Techniques" the
language "and Standard and Poor's Depository Receipts" under item (i) is
deleted and the following language is added at the end of the paragraph:
(viii) reverse repurchase agreements for investment purposes (Global Income
and High Yield Funds only).
Under "MANAGEMENT" subsection "Investment Advisers--Fund Managers" the
following portfolio managers have been added:
M. Roch Hillenbrand, a Managing Director of Goldman, Sachs & Co., is the
Head of Global Equities for Goldman Sachs Asset Management, overseeing
U.S., Europe, Japan, and non-Japan Asia. In this capacity, he is
responsible for managing the group as it defines and implements global
portfolio management processes that are consistent, reliable and
predictable. Roch is also President of Commodities Corporation LLC, of
which Goldman, Sachs & Co. is the parent company. Over the course of his
18-year career at Commodities Corporation, Roch has had extensive
experience in dealing with internal and external investment managers who
have managed a range of futures and equities strategies across multiple
markets, using a variety of styles.
All of the Value Style Funds, which include the Growth and Income Fund and
Mid Cap Equity Fund, are managed on a team basis with certain members of
the team taking primary responsibility for particular Funds. Each member of
the team generally participates in the active discussion of the
composition, structure and strategy of each Fund. The members of the Value
Team are Eileen Aptman, Paul D. Farrell, Matthew B. McLennan and Karma
Wilson.
Fund Managers
<TABLE>
<CAPTION>
Years
Primarily Five Year Employment
Name and Title Fund Responsibility Responsible History
- --------------------------------------------------------------------------------------
<C> <C> <C> <S>
Guy P. de C. Bennett Portfolio Manager- Since Mr. Bennett joined the
Vice President International Equity 1998 Investment Adviser in
1996 and is also co-head
of GSAM's Japanese
Equity Group in Tokyo.
From 1984 to 1996, he
was a portfolio manager
and an Executive
Director at CIN
Management
- --------------------------------------------------------------------------------------
Melissa Brown Senior Portfolio Manager-- Since Ms. Brown joined the
Vice President CORE U.S. Equity 1998 Investment Adviser in
CORE Large Cap Growth 1998 1998. From 1984 to 1998,
CORE Small Cap Equity 1998 she was the director of
Quantitative Equity
Research and served on
the Investment Policy
Committee at Prudential
Securities.
- --------------------------------------------------------------------------------------
Paul D. Farrell Senior Portfolio Manager- Since Mr. Farrell joined the
Managing Director Mid Cap Equity 1998 Investment Adviser in
Growth and Income 1999 1991. In 1998, he became
responsible for managing
the Investment Adviser's
Value Team. During 1991,
he served as a managing
director at Plaza
Investment Managers, the
investment subsidiary of
GEICO Corp., a major
insurance company. From
1986 to 1991, he was
employed by Goldman
Sachs as a Vice
President in the
investment research
department and was
responsible for the
formation of the firm's
Emerging Growth Research
Group.
- --------------------------------------------------------------------------------------
Rachel Golder Portfolio Manager- Since Ms. Golder joined the
Vice President High Yield Fund 1999 Investment Adviser in
1997. She is responsible
for managing high yield
assets. Prior to joining
the Investment Adviser,
Ms. Golder spent six
years at Saudi
International Bank in
London as a high yield
credit analyst and
portfolio manager.
- --------------------------------------------------------------------------------------
Matthew B. McLennan Senior Portfolio Manager- Since Mr. McLennan joined the
Vice President Mid Cap Equity 1998 Investment Adviser in
1995. From 1994 to 1995,
he worked in the
Investment Banking
Division of Goldman
Sachs in Australia. From
1991 to 1994, Mr.
McLennan worked at
Queensland Investment
Corporation in
Australia.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Years
Primarily Five Year Employment
Name and Title Fund Responsibility Responsible History
- -------------------------------------------------------------------------------------
<C> <C> <C> <S>
Susan Noble Senior Portfolio Manager-- Since Ms. Noble joined the
Executive Director International Equity 1998 Investment Adviser in
October 1997 as Senior
Portfolio Manager and
head of the European
Equity team. From 1986
to 1997, she worked at
Fleming Investment
Management in London,
where she most recently
was Portfolio Management
Director for the
European equity
investment strategy and
process.
- -------------------------------------------------------------------------------------
Karma Wilson Senior Portfolio Manager- Since Ms. Wilson joined the
Vice President Growth and Income 1998 Investment Adviser in
Mid Cap Equity 1998 1994. Prior to 1994, she
was an investment
analyst with Bankers
Trust Australia Ltd.
Before 1992, she was
employed at Arthur
Andersen LLP.
</TABLE>
In addition, Eileen A. Aptman is no longer serving as portfolio manager of
the Growth and Income Fund; Greg Gigliotti Thomas S. Price Lawrence S. Sibley
are no longer serving as a portfolio managers of the Growth and Income and Mid
Cap Equity Funds; Richard Buckholz is no longer serving as a portfolio manager
of the High Yield Fund; Allessandro P.G. Lunghi and Danny Truell are no longer
serving as a portfolio managers of the International Equity Fund; and G. Lee
Anderson and Ronald E. Gutfleish are no longer serving as portfolio managers of
the Growth and Income and Mid Cap Equity Funds.
Under "MANAGEMENT," the following paragraph is added to the end of the
section:
Year 2000
Many computer systems were designed using only two digits to signify the
year (for example, "98" for 1998). On January 1, 2000, if these computer
systems are not corrected, they may incorrectly interpret "00" as the year
"1900" rather than the year "2000," which may lead to computer shutdowns or
errors (commonly known as the "Year 2000 Problem"). To the extent these
systems conduct forward-looking calculations, these computer problems may
occur prior to January 1, 2000. Like other investment companies and
financial and business organizations, the Funds could be adversely affected
in their ability to process securities trades, price securities, provide
shareholder account services and otherwise conduct normal business
operations if the Investment Adviser or other Fund service providers do not
adequately address this problem in a timely manner.
In order to address the Year 2000 Problem, the Investment Adviser has taken
the following measures:
(i) The Investment Adviser has established a dedicated group to analyze
these issues and to implement the systems modifications necessary to prepare
for the Year 2000 Problem. (ii) The Investment Adviser has sought assurances
from the Funds' other service providers that they are taking the steps
necessary so that they do not experience Year 2000 Problems, and the Investment
Adviser will continue to monitor the situation.
Currently, the Investment Adviser does not anticipate that the transition to
the 21st century will have any material impact on its ability to continue to
service the Funds at current levels.
In addition, the Investment Adviser has undertaken measures to appropriately
take into account available information concerning the Year 2000 preparedness
of the issuers of securities held by the Funds. The Investment Adviser may
obtain such Year 2000 information from various sources which the Investment
Adviser believes to be reliable, including the issuers' public regulatory
filings. However, the Investment Adviser is not in a position to verify the
accuracy or completeness of such information.
At this time, however, no assurance can be given that the actions taken by
the Investment Adviser and the Funds' other service providers will be
sufficient to avoid any adverse effect on the Funds due to the Year 2000
Problem.
