<PAGE>
Goldman
Sachs Variable Insurance Trust
- --------------------------------------------------------------------------------
GOLDMAN SACHS ASSET MANAGEMENT 32 OLD SLIP, 17TH FLOOR, NEW YORK, NEW YORK 10005
- --------------------------------------------------------------------------------
Asset Allocation Portfolios (Goldman Sachs Logo)
Semiannual Report
June 30, 1999
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Shareholder Letter
Dear Shareholders,
We are pleased to report on the performance of the Goldman Sachs Variable
Insurance Trust Asset Allocation Portfolios (the "Portfolios"). This semi-annual
report covers the period from April 1, 1999, when the Portfolios began
operations, through June 30, 1999.
Performance
The performance of your Portfolio is driven by three factors: 1) strategic asset
allocation policy; 2) fund performance; and 3) tactical reallocation. By
reallocating your Portfolio on a quarterly basis, we seek to enhance its
performance over the long term.
During the period from commencement of operations through June 30, 1999, the
Asset Allocation Portfolios benefited from the portfolio management team's
tactical reallocation decisions. More specifically, we maintained an overweight
position in global stocks, which outperformed both bonds and cash. The
Portfolios' overweight position in global bonds relative to domestic bonds also
helped performance during the period. Later in the reporting period, our
preference for cash over bonds added substantial value, particularly in the more
conservative portfolios.
The Portfolios' good performance from tactical reallocation was enhanced by (1)
outstanding performance in the emerging market sector; and (2) the performance
of the underlying Goldman Sachs Funds.
From April 1, 1999 through June 30, 1999, the Portfolios generated the following
cumulative total returns: Conservative Strategy: 2.30%; Balanced Strategy:
3.10%; Growth and Income Strategy: 5.80%; Growth Strategy: 8.30%; Aggressive
Growth: 10.60%.
Investment Objectives
The Portfolios are designed to provide a comprehensive investment program in a
single investment and capitalize on the benefits of asset allocation. The
Conservative Strategy Portfolio seeks current income, consistent with
preservation of capital and the potential for capital appreciation. The Balanced
Strategy Portfolio seeks current income and long-term capital appreciation. The
Growth and Income Strategy Portfolio seeks long-term capital appreciation and
current income. The Growth Strategy Portfolio seeks long-term capital
appreciation and secondarily current income. The Aggressive Growth Strategy
Portfolio seeks long-term capital appreciation.
Portfolio Composition*
The Portfolios change their tactical weightings quarterly, based on prevailing
market conditions. As of June 30, 1999, the Portfolios diversified their assets
among the following Goldman Sachs Funds:
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
Conservative Strategy Goldman Sachs Variable Insurance Trust ("GSVIT")
<S> <C> <C>
50% Short Duration Government Fund
18 GSVIT Global Income Fund
12 GSVIT CORE Large Cap Value Fund
10 Goldman Sachs ("GS") Financial Square Prime Obligations Fund
7 GSVIT CORE Large Cap Growth Fund
3 GS Real Estate Securities Fund
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Actual Fund weighting in asset allocation portfolios may differ slightly from
the figures shown above due to rounding, differences in returns of the
underlying Funds, or both. The above figures are not indicative of future
allocations.
1
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Shareholder Letter (continued)
Portfolio Composition* (continued)
<TABLE>
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Balanced Strategy 35% GSVIT Short Duration Government Fund
20 GSVIT CORE International Equity Fund
19 GSVIT Global Income Fund
9 GSVIT CORE Large Cap Value Fund
8 GSVIT CORE Large Cap Growth Fund
4 GS High Yield Fund
2 GS Real Estate Securities Fund
2 GSVIT CORE Small Cap Equity Fund
1 GS Financial Square Prime Obligations Fund
- ----------------------------------------------------------------------------------------------------
Growth and Income Strategy 21% GSVIT CORE International Equity Fund
20 GSVIT Global Income Fund
15 GSVIT CORE Large Cap Value Fund
14 GSVIT CORE Large Cap Growth Fund
12 GS Core Fixed Income Fund
5 GS High Yield Fund
4 GS Emerging Markets Equity Fund
4 GSVIT CORE Small Cap Equity Fund
2 GS Real Estate Securities Fund
2 GS International Small Cap Fund
1 GS Financial Square Prime Obligations Fund
- ----------------------------------------------------------------------------------------------------
Growth Strategy 28% GSVIT CORE International Equity Fund
22 GSVIT CORE Large Cap Value Fund
17 GSVIT CORE Large Cap Growth Fund
12 GSVIT Global Income Fund
5 GS Emerging Markets Equity Fund
5 GSVIT CORE Small Cap Equity Fund
4 GS Core Fixed Income Fund
2 GS International Small Cap Fund
2 GS High Yield Fund
2 GS Real Estate Securities Fund
1 GS Financial Square Prime Obligations Fund
- ----------------------------------------------------------------------------------------------------
Aggressive Growth Strategy 32% GSVIT CORE International Equity Fund
27 GSVIT CORE Large Cap Value Fund
21 GSVIT CORE Large Cap Growth Fund
7 GS Emerging Markets Equity Fund
6 GSVIT CORE Small Cap Equity Fund
4 GS International Small Cap Fund
3 GS Real Estate Securities Fund
- ----------------------------------------------------------------------------------------------------
</TABLE>
* Actual Fund weighting in asset allocation portfolios may differ slightly from
the figures shown above due to rounding, differences in returns of the
underlying Funds, or both. The above figures are not indicative of future
allocations.
The Asset Allocation Portfolios invest primarily in other Goldman Sachs Fixed
Income, Equity and Money Market Funds and are subject to the risks associated
with investment in such Funds. Total return figures represent past performance
and do not indicate future results, which will vary. The investment return
and principal value of an investment will fluctuate and, therefore, an
investor's shares, when redeemed, may be worth more or less than their original
cost.
2
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Shareholder Letter (continued)
Current Outlook
For the third quarter, we continue to favor global stocks over global bonds, and
we continue our overweight cash position relative to bonds. In equities, we
continue to overweight international equities versus the U.S. equities. In
fixed income, we continue to underweight U.S. bonds relative to international
bonds.
Global Asset Allocation
We continue to favor global stocks over global bonds, and continue our slight
preference for cash versus bonds. While continuing a slight overweight in
equities, our valuation, inflationary fears, and in particular growth sub-models
all worsened, making us only modestly bullish on stocks. Though real bond
yields remain high, we are slightly negative on bonds versus cash as a result of
poor momentum indicators.
Equities
We maintain a negative view on the U.S., mainly as a result of poor value
factors. We remain positive on non-Japan Asia, specifically Hong Kong and
Singapore, which continue to show market outperformance and relatively
attractive value factors. Our outlook on Japan has turned more positive,
attributed mostly to attractive value indicators and improved market
performance. Within Europe, we continue to underweight Germany, Netherlands and
the U.K., as value and momentum measures remain weak. Austria, Belgium,
Finland, and Ireland are our favorite European countries. Austria, Belgium and
Ireland possess strong value factors while Finland shows favorable momentum
measures.
Bonds
We continue to underweight both the U.K. and the U.S.. The U.K. displays
unfavorable yield-related factors while the U.S. shows poor relative market
momentum. Australia and Sweden continue to be highly ranked in our bond model,
due particularly to strong market performance and steep yield curves. We remain
neutral on Japan, as poor yield-related indicators offset market outperformance.
Currencies
Our view on the U.S. dollar continues to be highly positive, driven by strength
across most value and momentum measures. We have become modestly positive on
Japan, primarily as a result of continued market outperformance and attractive
long-term value. We maintain an overweight position in the British pound, due
primarily to improved market performance and favorable yield-related variables.
Some of our least favorite currencies include the Euro, New Zealand dollar and
Swedish krona, which show poor momentum and yield-related indicators.
We thank you for your investment and look forward to your continued confidence.
Goldman Sachs Quantitative Research Group
New York, July 29, 1999
3
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Investments
June 30, 1999 (Unaudited)
CONSERVATIVE STRATEGY PORTFOLIO
Shares Description Value
Mutual Funds (Institutional Shares) - 108.8%
Equity - 23.7%
111 GSVIT CORE Large Cap
Value Fund - 12.5% $ 1,295
63 GSVIT CORE Large Cap
Growth Fund - 8.0% 822
33 GS Real Estate Securities
Fund - 3.2% 330
-------
$ 2,447
- ---------------------------------------------------------------------
Fixed Income - 70.7%
539 GSVIT Short Duration Government
Fund - 52.1% $ 5,378
189 GSVIT Global Income Fund - 18.6% 1,925
-------
$ 7,303
- ---------------------------------------------------------------------
Money Market - 14.4%
1,491 GS Financial Square Prime
Obligations Fund - 14.4% $ 1,491
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $11,045) (a) $11,241
- ---------------------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments in which
value exceeds cost $ 224
Gross unrealized loss for investments in which
cost exceeds value (28)
Net unrealized gain $ 196
- ---------------------------------------------------------------------
BALANCED STRATEGY PORTFOLIO
Shares Description Value
Mutual Funds (Institutional Shares) - 106.5%
Equity - 44.8%
212 GSVIT CORE International
Equity Fund - 21.3% $ 2,222
95 GSVIT CORE Large Cap
Value Fund - 10.1% 1,048
74 GSVIT CORE Large Cap
Growth Fund - 9.3% 972
23 Goldman Sachs Real Estate
Securities Fund - 2.2% 224
21 GSVIT CORE Small Cap
Equity Fund - 1.9% 202
-------
$ 4,668
- ---------------------------------------------------------------------
Fixed Income - 61.1%
382 GSVIT Short Duration
Government Fund - 36.7% $ 3,816
206 GSVIT Global Income
Fund - 20.1% 2,098
47 GS High Yield Fund - 4.3% 443
-------
$ 6,357
- ---------------------------------------------------------------------
Money Market - 0.6%
63 GS Financial Square Prime
Obligations Fund - 0.6% $ 63
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $10,817) (a) $11,088
- ---------------------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments in which
value exceeds cost $ 317
Gross unrealized loss for investments in which
cost exceeds value (46)
- ---------------------------------------------------------------------
Net unrealized gain $ 271
- ---------------------------------------------------------------------
(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.
For information on the underlying mutual funds, please call our toll free
Shareholder Service Line at 1-800-526-7384 or visit us on the web at
www.gs.com/funds.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Investments
June 30, 1999 (Unaudited)
GROWTH AND INCOME STRATEGY PORTFOLIO
Shares Description Value
Mutual Funds (Institutional Shares) - 111.0%
Equity - 69.0%
265 GSVIT CORE International
Equity Fund - 23.2% $ 2,774
179 GSVIT CORE Large Cap
Value Fund - 16.7% 1,995
146 GSVIT CORE Large Cap
Growth Fund - 16.0% 1,916
56 GS Emerging Markets
Equity Fund - 4.5% 540
53 GSVIT CORE Small Cap
Equity Fund - 4.2% 504
27 GS Real Estate
Securities Fund - 2.2% 267
22 GS International Small
Cap Fund - 2.2% 265
-------
$ 8,261
- ---------------------------------------------------------------------
Fixed Income - 41.4%
261 GSVIT Global Income
Fund - 22.2% $ 2,656
165 GS Core Fixed
Income Fund - 13.3% 1,596
74 GS High Yield Fund - 5.9% 704
-------
$ 4,956
- ---------------------------------------------------------------------
Money Market - 0.6%
72 Financial Square Prime Obligations
Fund - 0.6% $ 72
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $12,709) (a) $13,289
- ---------------------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments in which
value exceeds cost $ 634
Gross unrealized loss for investments in which
cost exceeds value (54)
Net unrealized gain $ 580
- ---------------------------------------------------------------------
GROWTH STRATEGY PORTFOLIO
Shares Description Value
Mutual Funds (Institutional Shares) - 89.8%
Equity - 73.6%
281 GSVIT CORE International
Equity Fund - 24.1% $ 2,944
218 GSVIT CORE Large Cap
Value Fund - 19.8% 2,417
152 GSVIT CORE Large Cap
Growth Fund - 16.4% 2,001
57 GS Emerging Markets
Equity Fund - 4.6% 557
56 GSVIT CORE Small Cap
Equity Fund - 4.3% 532
28 GS Real Estate
Securities Fund - 2.2% 274
22 GS International Small
Cap Fund - 2.2% 272
-------
$ 8,997
- ---------------------------------------------------------------------
Fixed Income -15.6%
127 GSVIT Global Income
Fund - 10.6% $ 1,297
43 GS Core Fixed Income
Fund - 3.3% 411
21 GS High Yield Fund - 1.7% 204
-------
$ 1,912
- ---------------------------------------------------------------------
Money Market - 0.6%
72 GS Financial Square Prime
Obligations Fund - 0.6% $ 72
- ---------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $10,269) (a) $10,981
- ---------------------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments in which
value exceeds cost $ 733
Gross unrealized loss for investments in which
cost exceeds value (21)
Net unrealized gain $ 712
- ---------------------------------------------------------------------
(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.
For information on the underlying mutual funds, please call our toll free
Shareholder Service Line at 1-800-526-7384 or visit us on the web at
www.gs.com/funds.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Investments
June 30, 1999 (Unaudited)
AGGRESSIVE GROWTH STRATEGY PORTFOLIO
Shares Description Value
Mutual Funds (Institutional Shares) - 83.3%
Equity - 83.3%
267 GSVIT CORE International
Equity Fund - 25.0% $ 2,790
232 GSVIT CORE Large Cap
Value Fund - 23.0% 2,570
154 GSVIT CORE Large Cap
Growth Fund - 18.1% 2,019
68 GS Emerging Markets
Equity Fund - 5.9% 658
65 GSVIT CORE Small Cap
Equity Fund - 5.5% 618
30 GS International Small
Cap Fund - 3.3% 368
28 GS Real Estate
Securities Fund - 2.5% 278
-------
$ 9,301
- ------------------------------------------------------
TOTAL INVESTMENTS
(Cost $8,519) (a) $ 9,301
- ------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments
in which Gross unrealized loss for investments
in which cost exceeds value
-
- ------------------------------------------------------
Net unrealized gain $ 782
- ------------------------------------------------------
(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.
For information on the underlying mutual funds, please call our toll free
Shareholder Service Line at 1-800-526-7384 or visit us on the web at
www.gs.com/funds.
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Assets and Liabilities
June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Growth Aggressive
Conservative Balanced and Income Growth Growth
Strategy Strategy Strategy Strategy Strategy
Portfolio Portfolio Portfolio Portfolio Portfolio
Assets:
<S> <C> <C> <C> <C> <C>
Investment in securities, at value
(identified cost $11,045, $10,817, $12,709, $10,269,
$8,519, respectively) $ 11,241 $ 11,088 $ 13,289 $ 10,981 $ 9,301
Receivables:
Investment securities sold 3,177 3,563 3,587 6,166 6,137
Dividends and interest 16 29 25 10 5
Reimbursement from adviser 19,802 19,658 19,054 19,050 19,652
Other assets 27 27 27 27 28
-------------------------------------------------------------------------------------------------------------------
Total assets 34,263 34,365 35,982 36,234 35,123
-------------------------------------------------------------------------------------------------------------------
Liabilities:
Due to custodian 3,548 3,579 3,602 6,192 6,137
Amounts owed to affiliates 3,304 3,315 3,359 3,359 3,315
Accrued expenses and other liabilities 17,082 17,061 17,049 14,455 14,505
-------------------------------------------------------------------------------------------------------------------
Total liabilities 23,934 23,955 24,010 24,006 23,957
-------------------------------------------------------------------------------------------------------------------
Net Assets:
Paid-in capital 10,100 10,100 11,356 11,354 10,101
Accumulated undistributed net investment
income (loss) 15 27 29 7 (1)
Accumulated net realized gain on investment
transactions 18 12 7 155 284
Net unrealized gain on investments 196 271 580 712 782
-------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 10,329 $ 10,410 $ 11,972 $ 12,228 $ 11,166
-------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding, no par
value (unlimited number of shares authorized) 1,010 1,010 1,132 1,129 1,010
Net asset value and redemption price per share $ 10.23 $ 10.31 $ 10.58 $ 10.83 $ 11.06
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Operations
For the Period Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Growth
and Aggressive
Conservative Balanced Income Growth Growth
Strategy Strategy Strategy Strategy Strategy
Portfolio(a) Portfolio(a) Portfolio(a) Portfolio(a) Portfolio(a)
Investment income:
<S> <C> <C> <C> <C> <C>
Income distributions from underlying funds $ 21 $ 33 $ 35 $ 13 $ 5
Expenses:
Management fees 4 4 4 4 4
Transfer agent fees 3,302 3,313 3,357 3,357 3,313
Custodian fees 7,914 7,923 7,930 7,926 7,917
Registration fees 19 19 19 19 19
Professional fees 9,864 9,864 9,864 9,864 9,864
Trustee fees 34 34 34 34 34
Organization expenses 4,964 4,964 4,964 4,964 4,964
Other 4,623 4,623 4,623 4,623 4,623
---------------------------------------------------------------------------------------------------------------
Total expenses 30,724 30,744 30,795 30,791 30,738
---------------------------------------------------------------------------------------------------------------
Less-- expenses reimbursed by Goldman Sachs
(30,718) (30,738) (30,789) (30,785) (30,732)
---------------------------------------------------------------------------------------------------------------
Net expenses 6 6 6 6 6
---------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 15 27 29 7 (1)
---------------------------------------------------------------------------------------------------------------
Realized and unrealized gain on investments:
Net realized gain from investment transactions 18 12 7 155 284
Net change in unrealized gain on investments 196 271 580 712 782
---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain 214 283 587 867 1,066
---------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 229 310 616 874 1,065
---------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999.
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Changes in Net Assets
For the Period Ended June 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
Growth
and Aggressive
Conservative Balanced Income Growth Growth
Strategy Strategy Portfolio(a) Strategy Strategy
Portfolio(a) Portfolio(a) Strategy Portfolio(a) Portfolio(a)
<S> <C> <C> <C> <C> <C>
From operations:
Net investment income (loss) $ 15 $ 27 $ 29 $ 7 $ (1)
Net realized gain from investment transactions 18 12 7 155 284
Net change in unrealized gain on investments 196 271 580 712 782
----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 229 310 616 874 1,065
----------------------------------------------------------------------------------------------------------------
From share transactions:
Proceeds from sales of shares 100 100 1,356 1,354 101
Reinvestment of dividends and distributions - - - - -
Cost of shares repurchased - - - - -
----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from share
transactions 100 100 1,356 1,354 101
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
TOTAL INCREASE 329 410 1,972 2,228 1,166
----------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 10,000 10,000 10,000 10,000 10,000
----------------------------------------------------------------------------------------------------------------
End of period $10,329 $10,410 $11,972 $12,228 $11,166
----------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment $ 15 $ 27 $ 29 $ 7 $ (1)
income (loss)
----------------------------------------------------------------------------------------------------------------
Summary of Share Transactions:
Shares sold 1,010 1,010 1,132 1,129 1,010
Reinvestment of dividends and distributions - - - - -
Shares repurchased - - - - -
----------------------------------------------------------------------------------------------------------------
TOTAL 1,010 1,010 1,132 1,129 1,010
----------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999.
The accompanying notes are an integral part of these financia; statements.
9
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Financial Highlights
Selected Data for a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Income from
investment Distributions to
---------- shareholders
operations(a) ------------
----------
Net asset Net Net Net
value, Net realized From From increase Net asset assets at
beginning investment and net net in net value, Total end of
of income unrealize investment investment asset end return period
period (loss) gain income income value of period (b)(c) (in 000s)
FOR THE PERIOD ENDED JUNE 30, (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Conservative
Strategy Portfolio (e) $10.00 $0.01 $0.22 $ - $ - $0.23 $10.23 2.30% $10
Balanced
Strategy Portfolio (e) 10.00 0.03 0.28 - - 0.31 10.31 3.10 10
Growth and Income
Strategy Portfolio (e) 10.00 0.03 0.55 - - 0.58 10.58 5.80 12
Growth Strategy
Portfolio (e) 10.00 0.01 0.82 - - 0.83 10.83 8.30 12
Aggressive Growth
Strategy Portfolio (e) 10.00 (0.00) 1.06 - - 1.06 11.06 10.60 11
</TABLE>
<TABLE>
<CAPTION>
Ratios assuming no
expense
reimbursements
--------------
Ratio of
Ratio of net Ratio of
net investment Ratio net
expenses income expenses investment
to average (loss) to to average loss to Portfolio
net average net net average net turnover
assets(d) assets(d) assets(d) aseets(d) rate(c)
FOR THE PERIOD ENDED JUNE 30, (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Conservative 0.25% 0.58% 1,194.20% (1,193.37)% 84%
Strategy Portfolio (e)
Balanced 0.25 1.04 1,188.11 (1,186.82) 78
Strategy Portfolio (e)
Growth and Income
Strategy Portfolio (e) 0.25 1.09 1,154.58 (1,153.24) 74
Growth Strategy
Portfolio (e) 0.25 0.26 1,142.20 (1,141.68) 95
Aggressive Growth
Strategy Portfolio (e) 0.25 (0.04) 1,162.40 (1,162.19) 94
</TABLE>
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment at net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period.
(c) Not annualized.
(d) Annualized.
(e) Commenced operations on April 1, 1999.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Notes to Financial Statements
June 30, 1999 (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) as an
open-end, management investment company. The Trust includes Goldman Sachs
Conservative Strategy Portfolio (Conservative Strategy), Goldman Sachs Balanced
Strategy Portfolio (Balanced Strategy), Goldman Sachs Growth and Income Strategy
Portfolio (Growth and Income Strategy), Goldman Sachs Growth Strategy Portfolio
(Growth Strategy) and Goldman Sachs Aggressive Growth Strategy Portfolio
(Aggressive Growth Strategy), collectively, (the "Portfolios") or individually
(a "Portfolio").
Shares of the Trust may be purchased and held by separate accounts of
participating life insurance companies for the purpose of funding variable
annuity 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 Portfolios. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that may affect the reported amounts. Actual
results could differ from these estimates and assumptions.
A. Investment Valuation -- Each Portfolio invests in a combination of
Underlying Funds (the "Underlying Funds") for which Goldman Sachs Asset
Management ("GSAM"), a separate operating division of Goldman Sachs & Co.
("Goldman Sachs"), Goldman Sachs Funds Management L.P. ("GSFM") and Goldman
Sachs Asset Management International ("GSAMI"), affiliates of Goldman Sachs, act
as investment adviser. Investments in the Underlying Funds are valued at the
closing net asset value per share of each Underlying Fund on the day of
valuation. Because each Portfolio invests primarily in other mutual funds, which
fluctuate in value, the Portfolios' shares will correspondingly fluctuate in
value. Short-term debt obligations maturing in sixty days or less are valued at
amortized cost.
B. Securities Transactions and Investment Income -- Security transactions are
recorded as of the trade date. Realized gains and losses on sales of portfolio
securities are calculated on the identified cost basis. Dividend income and
capital gains distributions from the Underlying Funds are recorded on the ex-
dividend date. Interest income is recorded on the basis of interest accrued.
C. Federal Taxes -- It is each Portfolio'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 income and capital gains to its shareholders. Accordingly, no
federal tax provisions are required.
The characterization of distributions to shareholders for financial reporting
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 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.
D. Expenses -- Expenses incurred by the Trust that do not specifically relate
to an individual Portfolio of the Trust are allocated to the Portfolios based on
a straight-line or pro rata basis depending upon the nature of the expense.
11
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Notes to Financial Statements (continued)
June 30, 1999 (Unaudited)
3. AGREEMENTS
Pursuant to an Investment Management Agreement (the "Agreement"), Goldman Sachs
Asset Management, a separate operating division of Goldman, Sachs & Co.
("Goldman Sachs"), serves as Portfolios' investment adviser. Under the
Agreement, GSAM, subject to the general supervision of the Trust's Board of
Trustees, manages the Portfolios. As compensation for the services rendered
pursuant to the Agreement, the assumption of the expenses related thereto and
administering the Portfolios' business affairs, including providing facilities,
GSAM is entitled to a fee, computed daily and payable monthly at an annual rate
equal to .15% of average daily net assets of each Portfolio.
During the period, GSAM has voluntarily agreed to limit "Other Expenses"
(excluding management fees, taxes, interest, brokerage, litigation,
indemnification costs and other extraordinary expenses) to the extent that such
expenses exceed .10% of the average daily net assets of each Portfolio.
Goldman Sachs serves as Distributor, at no cost to the Portfolios, and
Transfer Agent, for a fee, of the shares of the Portfolios pursuant to
Distribution and Transfer Agent Agreements.
At June 30, 1999, the amounts owed to affiliates were as follows:
<TABLE>
<CAPTION>
Management Transfer
Portfolio Fees Agent Fees Total
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Conservative Strategy $2 $3,302 $3,304
- ----------------------------------------------------------------------------------
Balanced Strategy 2 3,313 3,315
- ----------------------------------------------------------------------------------
Growth and Income Strategy 2 3,357 3,359
- ----------------------------------------------------------------------------------
Growth Strategy 2 3,357 3,359
Aggressive Growth Strategy 2 3,313 3,315
- ----------------------------------------------------------------------------------
</TABLE>
As of June 30, 1999, Goldman Sachs was the beneficial owner of 100%, 100%,
89%, 89% and 100% of the outstanding shares of the Conservative Strategy,
Balanced Strategy, Growth and Income Strategy, Growth Strategy and Aggressive
Growth Strategy, respectively.
4. PORTFOLIO SECURITY TRANSACTIONS
Purchases and proceeds of sales or maturities of long-term securities for the
period ended June 30, 1999, were as follows:
<TABLE>
<CAPTION>
Portfolio Purchases Sales
- -------------------------------------------------------------------------------
<S> <C> <C>
Conservative Strategy $21,438 $10,411
- -------------------------------------------------------------------------------
Balanced Strategy 21,581 10,776
Growth and Income Strategy 23,627 10,925
- -------------------------------------------------------------------------------
Growth Strategy 23,527 13,413
Aggressive Growth Strategy 21,096 12,861
- -------------------------------------------------------------------------------
</TABLE>
5. LINE OF CREDIT FACILITY
The Portfolios participated in a $250,000,000 uncommitted, unsecured revolving
line of credit facility. Under the most restrictive arrangement, each Portfolio
must have owned securities having a market value in excess of 300% of the total
bank borrowings. Effective April 30, 1999, the Portfolios now participate in a
$250,000,000 uncommitted unsecured and a $250,000,000 committed, unsecured
revolving line of credit facility. Under the most restrictive arrangement, each
Portfolio must own securities having a market value in excess of 400% of the
total bank borrowings. These facilities are to be used solely for temporary or
emergency purposes. The interest rate on the borrowings is based on the Federal
Funds rate. The committed facility also requires a fee to be paid by each
Portfolio based on the amount of the commitment which has not been utilized.
During the period ended June 30, 1999, the Portfolios did not have any
borrowings under these facilities.
12
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Notes to Financial Statements (continued)
June 30, 1999 (unaudited)
6. REPURCHASE AGREEMENTS
During the term of a repurchase agreement, the value of the underlying
securities, 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 Portfolio's custodian.
7. JOINT REPURCHASE AGREEMENT ACCOUNT
The Portfolios, together with other registered investment companies having
management agreements with GSAM or their affiliates, transfer uninvested cash
into joint accounts, the daily aggregate balance of which is invested in one or
more repurchase agreements.
13
<PAGE>
<TABLE>
<CAPTION>
TRUSTEES OFFICERS
<S> <C>
Ashok N. Bakhru, Chairman Douglas C. Grip, President
David B. Ford Jesse Cole, Vice President
Douglas C. Grip James A. Fitzpatrick, Vice President
John P. McNulty Anne Marcel, Vice President
Mary P. McPherson Nancy L. Mucker, Vice President
Alan A. Shuch John M. Perlowski, Treasurer
Jackson W. Smart, Jr. Adrien E. Deberghes Jr., Assistant
Treasurer
William H. Springer Philip V. Giuca, Jr., Assistant Treasurer
Richard P. Strubel Michael J. Richman, Secretary
Howard B. Surloff, Assistant Secretary
Valerie A. Zondorak, Assistant Secretary
GOLDMAN SACHS & CO.
Distributor and Transfer Agent
GOLDMAN SACHS ASSET MANAGEMENT
Investment Adviser
Toll Free (in U.S.): 800-292-4726
</TABLE>
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:
Conservative Strategy, Balanced Strategy, Growth and Income Strategy, Growth
Strategy and Aggressive Growth Strategy Portfolios.
This material is not authorized for distribution to prospective investors unless
preceded or accompanied by a current Prospectus which contains facts concerning
the Portfolio's objectives, policies, management, expenses and other
information.
(C) Copyright 1999 Goldman, Sachs & Co. All rights reserved. Date of first use:
August 27, 1999
