<PAGE>
Goldman
Sachs Variable Insurance Trust
- --------------------------------------------------------------------------------
GOLDMAN SACHS ASSET MANAGEMENT 32 OLD SLIP, NEW YORK, NEW YORK 10005
- --------------------------------------------------------------------------------
Asset Allocation Portfolios
Annual Report
December 31, 1999
Goldman
Sachs
<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 (individually, the "Portfolio",
collectively, the "Portfolios"). This annual report covers the period from April
1, 1999, when the Portfolios began operations, through December 31, 1999.
Performance Review
From April 1, 1999 through December 31, 1999, the Portfolios generated
the following aggregate total returns: Conservative Strategy: 6.98%;
Balanced Strategy: 11.52%; Growth and Income Strategy: 15.00%; Growth
Strategy: 19.71%; Aggressive Growth: 45.39%.
The performance of your Portfolio is driven primarily by three factors:
1) strategic asset allocation policy; 2) underlying fund performance;
and 3) tactical reallocation. By reallocating your Portfolio on a
quarterly basis, we seek to enhance the performance of your Portfolio
over the long term.
Over the year, the Portfolios benefited from tactical reallocation
decisions. More specifically, the Portfolios benefited by being
overweight in stock funds, which outperformed fixed income funds. The
Portfolios' overweight positions in international stock funds relative
to domestic stock funds and global bond funds relative to domestic bond
funds helped performance during the period.
The Portfolios' strong performance from tactical reallocation was
enhanced by the performance of the underlying Goldman Sachs funds
relative to their benchmarks.
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 the preservation of capital and secondarily, considers
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. The Portfolios
invest primarily in other Goldman Sachs fixed Income, Equity, and Money
Market funds and are subject to the risk associated with investment in
such Funds.
Portfolio Composition
The Portfolios change their tactical weightings quarterly, based on
prevailing market conditions. As of December 31, 1999, the Portfolios
diversified their assets among the following Goldman Sachs Funds:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio Portfolio Weighting as a Percentage of Total Investments
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Conservative Strategy 51.0% Goldman Sachs Variable Insurance 15.1% GSVIT Global Income
Trust ("GSVIT") ShortDuration Govt. 2.0% Goldman Sachs ("GS") Real Estate
16.3% GSVIT CORE /SM/ Large Cap Growth Securities
15.6% GSVIT CORE /SM/ Large Cap Value
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
<TABLE>
<CAPTION>
Shareholder Letter (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Portfolio Weighting as a Percentage of Total Investments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Balanced Strategy 33.0% GS High Yield 9.7% GSVIT CORE Large Cap Growth
22.7% GSVIT CORE /SM/ International Equity 3.9% GSVIT Global Income
18.3% GSVIT Short Duration Govt. 1.9% GS Real Estate Securities
8.6% GSVIT CORE Large Cap Value 1.9% GSVIT CORE Small Cap Equity
- ------------------------------------------------------------------------------------------------------------------------------------
Growth and Income Strategy 22.8% GSVIT CORE International Equity 4.9% GS Emerging Markets Equity
19.6% GSVIT Global Income 4.7% GS High Yield
13.7% GSVIT CORE Large Cap Value 3.9% GSVIT CORE Small Cap Equity
15.9% GSVIT CORE Large Cap Growth 2.1% GS International Small Cap
10.6% GS CORE Fixed Income 1.8% GS Real Estate Securities
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Strategy 29.3% GSVIT CORE International Equity 4.8% GSVIT CORE Small Cap Equity
19.8% GSVIT CORE Large Cap Value 3.6% GS CORE Fixed Income
18.9% GSVIT CORE Large Cap Growth 2.6% GS International Small Cap
11.3% GSVIT Global Income 2.2% GS Real Estate Securities
5.7% GS Emerging Markets Equity 1.8% GS High Yield
- ------------------------------------------------------------------------------------------------------------------------------------
Aggressive Growth Strategy 32.4% GSVIT CORE International Equity 6.5% GSVIT CORE Small Cap Equity
23.6% GSVIT CORE Large Cap Growth 4.0% GS International Small Cap
22.9% GSVIT CORE Large Cap Value 2.3% GS Real Estate Securities
8.3% GS Emerging Markets Equity
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Actual Fund weighting in asset allocation portfolios may differ slightly from
the figures shown above due to rounding. The above figures are not indicative of
future allocations.
Current Outlook
As explained below, we continue to favor stocks versus bonds, and stocks and
bonds versus cash. In equities, we continue to underweight the UK and North
America versus other international equities. In fixed income, we continue our
preference for international versus domestic bonds.
Global Asset Allocation
We are only mildly positive on stocks. The favorable inflation environment is
offset by expensive valuations and below-average growth prospects. We are also
mildly positive on bonds due to attractive valuation levels. Our views translate
into a small overweight of stocks versus bonds and stocks and bonds versus cash.
Equities
Our favorite region is Non-Japan Asia, especially Singapore. This is followed by
Japan and continental Europe. Our least favorite regions are the UK and North
America.
Within non-Japan Asia, we are bullish on Singapore due mostly to strong capital
flows. We are also favorable on Hong Kong and Australia. Hong Kong has strong
fund flows and good valuation levels, while Australia exhibits strong earnings
momentum. We consider New Zealand unattractive, mainly as a result of poor
momentum and export prospects.
We are not positive on the UK equity market, as it stacks up poorly across all
of our forecast variables. Although we generally prefer Canadian equities to the
U.S. equities, we consider North America the least attractive region due mainly
to expensive valuations and poor export prospects.
2
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Shareholder Letter (continued)
Bonds
We are most favorable on the bond market of Japan, followed by Australian
and Swedish bond markets. We consider the U.S., UK and Switzerland the
least attractive bond markets.
Our bullishness on Japan is driven primarily by market out performance and
strong fund flows. Within Europe, we are most positive on Sweden, where
yield-related forecast variables and monetary conditions appear favorable.
We find Switzerland among the least attractive bond markets globally due to
poor valuations and weak fund flows. The UK looks unattractive as a result
of unfavorable monetary conditions and below-average yield-related forecast
variables. Within the Dollar Bloc, we are bullish on Australia given the
attractive yield-related forecast variables and relatively strong capital
flows. With poor market performance and unfavorable monetary conditions,
the U.S. is our least favorable bond market globally.
Currencies
Our favorite currencies are the Singapore dollar and the Japanese yen. In
general, we prefer the Dollar Bloc to the European currencies, including
the Euro and the British pound.
Within the Dollar Bloc, our optimism on the Singapore dollar is motivated
primarily by a supportive interest-rate environment, strong fund flows and
attractive long-term value. We are also positive on the Australian and
Canadian dollars, where market performance appears strong. Our positive
outlook on the Japanese yen can be attributed mostly to strong medium-term
momentum and good long-term value. We consider the Euro and Greek drachma
the least attractive currencies globally, as they look poor across most of
our forecast variables.
We thank you for your investment and look forward to your continued
confidence.
Goldman Sachs Quantitative Strategies Team
January 31, 2000
3
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Performance Summary
December 31, 1999
The following graph shows the value as of December 31, 1999 of a $10,000
investment made on April 1, 1999 (Portfolio's commencement date of operations).
For comparative purposes, the performance of the portfolio's benchmarks (the S&P
500 Index, Lehman Brothers Aggregate Bond Index and two-year U.S. Treasury
Security ("Two-Year T-Bill")) are also shown. All performance data shown
represents past performance and should not be considered indicative of future
performance, which will fluctuate with changes in market conditions. These
performance fluctuations will cause an investor's shares, when redeemed, to be
worth more or less than original cost.
- --------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust Conservative Strategy Portfolio's
Lifetime Performance
- --------------------------------------------------------------------------------
Performance of a $10,000 Investment, Distributions Reinvested April 1, 1999 to
December 31, 1999
<TABLE>
<CAPTION>
Goldman
Sachs
Variable
Insurance
Trust Lehman
Conservative Brothers
Strategy S&P 500 Aggregate Two-Year
Month Portfolio Index Bond Index T-Bill
- ----- ------------ ------- ---------- --------
<S> <C> <C> <C> <C>
4/1/1999 (inception date) 10,000 10,000 10,000 10,000
Apr-99 10,170 10,387 10,032 10,022
May-99 10,140 10,142 9,944 10,007
Jun-99 10,230 10,705 9,912 10,030
Jul-99 10,020 10,371 9,870 10,053
Aug-99 9,970 10,319 9,865 10,076
Sep-99 10,000 10,036 9,980 10,136
Oct-99 10,130 10,671 10,017 10,141
Nov-99 10,260 10,888 10,015 10,156
Dec-99 10,698 11,529 9,967 10,164
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return through December 31, 1999(a) Since Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Goldman Sachs Variable Insurance Trust Conservative Strategy Portfolio 6.98%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999 and represents the cumulative total
return since the Portfolio has not been in operation for a full 12 months.
4
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Performance Summary
December 31, 1999
The following graph shows the value as of December 31, 1999 of a $10,000
investment made on April 1, 1999 (Portfolio's commencement date of operations).
For comparative purposes, the performance of the portfolio's benchmarks (the S&P
500 Index, Lehman Brothers High Yield Bond Index and Two-Year T-Bill) are also
shown. All performance data shown represents past performance and should not be
considered indicative of future performance, which will fluctuate with changes
in market conditions. These performance fluctuations will cause an investor's
shares, when redeemed, to be worth more or less than original cost.
- --------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust Balanced Strategy Portfolio's Lifetime
Performance
- --------------------------------------------------------------------------------
Performance of a $10,000 Investment, Distributions Reinvested April 1, 1999 to
December 31, 1999
<TABLE>
<CAPTION>
Goldman Sachs
Variable
Insurance
Trust Lehman
Balanced Brothers
Strategy S&P 500 High Yield Two-Year
Month Portfolio Index Bond Index T-Bill
- ----- --------- ------- ---------- --------
<S> <C> <C> <C> <C>
4/1/1999 (inception date) 10,000 10,000 10,000 10,000
Apr-99 10,270 10,387 10,194 10,022
May-99 10,060 10,142 10,056 10,007
Jun-99 10,310 10,705 10,035 10,030
Jul-99 10,200 10,371 10,075 10,053
Aug-99 10,150 10,319 9,964 10,076
Sep-99 10,070 10,036 9,892 10,136
Oct-99 10,480 10,671 9,827 10,141
Nov-99 10,690 10,888 9,942 10,156
Dec-99 11,152 11,529 10,054 10,164
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return through December 31, 1999(a) Since Inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Goldman Sachs Variable Insurance Trust Balanced Strategy Portfolio 11.52%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999 and represents the cumulative total
return since the Portfolio has not been in operation for a full 12 months.
5
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Investments
December 31, 1999
- ------------------------------------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST
CONSERVATIVE STRATEGY PORTFOLIO
- ------------------------------------------------------
Shares Description
Value
- ------------------------------------------------------
Mutual Funds (Institutional Shares) - 193.7%
- ------------------------------------------------------
Equity - 65.7%
685 Goldman Sachs Variable Insurance
Trust CORE Large Cap Value Fund - $ 7,272
30.2%
483 Goldman Sachs Variable Insurance
Trust CORE Large Cap Growth Fund - 7,635
31.7%
106 Goldman Sachs Real Estate Securities
Fund - 3.8% 919
--------
$ 15,826
- ------------------------------------------------------
Fixed Income - 128.0%
2,445 Goldman Sachs Variable Insurance
Trust Short Duration Government $ 23,790
Fund - 98.7%
718 Goldman Sachs Variable Insurance
Trust Global Income Fund - 29.3% 7,056
--------
$ 30,846
- ------------------------------------------------------
TOTAL MUTUAL FUNDS
(Cost $45,640) $ 46,672
- ------------------------------------------------------
TOTAL INVESTMENTS
(Cost $45,640) $ 46,672
- -----------------------------------------------------
- ------------------------------------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST
BALANCED STRATEGY PORTFOLIO
- ------------------------------------------------------
Shares Description Value
- ------------------------------------------------------
Mutual Funds (Institutional Shares) - 111.4%
Equity - 49.9%
- ------------------------------------------------------
2,953 Goldman Sachs Variable Insurance
Trust CORE International Equity $ 36,176
Fund - 25.3%
1,300 Goldman Sachs Variable Insurance
Trust CORE Large Cap Value Fund - 13,796
9.6%
977 Goldman Sachs Variable Insurance
Trust CORE Large Cap Growth Fund - 15,433
10.8%
340 Goldman Sachs Real Estate
Securities 2,956
Fund - 2.1%
285 Goldman Sachs Variable Insurance
Trust CORE /SM/ Small Cap Equity Fund 3,023
- 2.1%
--------
$ 71,384
- ------------------------------------------------------
Fixed Income - 61.5%
5,410 Goldman Sachs Variable Insurance
Trust Short Duration Government $ 52,635
Fund - 36.8%
2,974 Goldman Sachs Variable Insurance
Trust Global Income Fund - 20.4% 29,236
680 Goldman Sachs High Yield Fund - 6,189
4.3%
----------
$ 88,060
- ------------------------------------------------------
TOTAL MUTUAL FUNDS
(Cost $156,710) $ 159,444
- ------------------------------------------------------
TOTAL INVESTMENTS
(Cost $156,710) $ 159,444
- ------------------------------------------------------
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 are an integral part of these financial statements. 6
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Performance Summary
December 31, 1999
The following graph shows the value as of December 31, 1999 of a $10,000
investment made on April 1, 1999 (Portfolio's commencement date of operations).
For comparative purposes, the performance of the portfolio's benchmarks (the S&P
500 Index, Lehman Brothers High Yield Bond Index, Lehman Brothers Aggregate Bond
Index and Morgan Stanley EAFE Index ("MSCI EAFE")) are also shown. All
performance data shown represents past performance and should not be considered
indicative of future performance, which will fluctuate with changes in market
conditions. These performance fluctuations will cause an investor's shares, when
redeemed, to be worth more or less than original cost.
- --------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust Growth and Income Strategy Portfolio's
Lifetime Performance
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance of a $10,000 Investment, Distributions Reinvested April 1, 1999 to
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Goldman
Sachs
Variable
Insurance
Trust Growth Lehman Lehman
and Income Brothers Brothers
Strategy S&P 500 High Yield Aggregate MSCI
Month Portfolio Index Bond Index Bond Index EAFE
- ----- --------- ------- ---------- ---------- ------
<S> <C> <C> <C> <C> <C>
4/1/1999 (inception date) 10,000 10,000 10,000 10,000 10,000
Apr-99 10,380 10,387 10,194 10,032 10,407
May-99 10,120 10,142 10,056 9,944 9,873
Jun-99 10,580 10,705 10,035 9,912 10,260
Jul-99 10,390 10,371 10,075 9,870 10,567
Aug-99 10,290 10,319 9,964 9,865 10,609
Sep-99 10,180 10,036 9,892 9,980 10,718
Oct-99 10,550 10,671 9,827 10,017 11,122
Nov-99 10,860 10,888 9,942 10,015 11,510
Dec-99 11,500 11,529 10,054 9,967 12,545
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Total Return through December 31, 1999(a) Since Inception
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Goldman Sachs Variable Insurance Trust Growth and Income Strategy Portfolio 15.00%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999 and represents the cumulative total
return since the Portfolio has not been in operation for a full 12 months.
7
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Performance Summary
December 31, 1999
The following graph shows the value as of December 31, 1999 of a $10,000
investment made on April 1, 1999 (Portfolio's commencement date of operations).
For comparative purposes, the performance of the portfolio's benchmarks (the S&P
500 Index, MSCI EAFE, Russell 2000 Index and Morgan Stanley Emerging Markets
Free Index ("MSCI EMF")) are also shown. All performance data shown represents
past performance and should not be considered indicative of future performance,
which will fluctuate with changes in market conditions. These performance
fluctuations will cause an investor's shares, when redeemed, to be worth more or
less than original cost.
- --------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust Growth Strategy Portfolio's Lifetime
Performance
- --------------------------------------------------------------------------------
Performance of a $10,000 Investment, Distributions Reinvested April 1, 1999 to
December 31, 1999
<TABLE>
<CAPTION>
Goldman
Sachs
Variable
Insurance
Trust Growth
Strategy S&P 500 MSCI Russell MSCI
Month Portfolio Index EAFE 2000 Index EMF
- ----- ------------ ------- ------ ---------- ------
<S> <C> <C> <C> <C> <C>
4/1/1999 (inception date) 10,000 10,000 10,000 10,000 10,000
Apr-99 10,490 10,387 10,407 10,896 11,237
May-99 10,200 10,142 9,873 11,055 11,172
Jun-99 10,830 10,705 10,260 11,555 12,440
Jul-99 10,580 10,371 10,567 11,238 12,101
Aug-99 10,470 10,319 10,609 10,822 12,212
Sep-99 10,230 10,036 10,718 10,825 11,798
Oct-99 10,770 10,671 11,122 10,869 12,050
Nov-99 11,190 10,888 11,510 11,518 13,130
Dec-99 11,971 11,529 12,545 12,819 14,801
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Total Return through December 31, 1999(a) Since Inception
- -----------------------------------------------------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust Growth Strategy Portfolio 19.71%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999 and represents the cumulative total
return since the Portfolio has not been in operation for a full 12 months.
8
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Investments
December 31, 1999
- ------------------------------------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST
GROWTH AND INCOME STRATEGY PORTFOLIO
- ------------------------------------------------------
Shares Description Value
- ------------------------------------------------------
Mutual Funds (Institutional Shares) - 112.1%
- ------------------------------------------------------
Equity - 73.0%
4,222 Goldman Sachs Variable Insurance
Trust CORE International Equity $ 51,721
Fund - 25.6%
2,941 Goldman Sachs Variable Insurance
Trust CORE Large Cap Value Fund - 31,199
15.4%
2,286 Goldman Sachs Variable Insurance
Trust CORE Large Cap Growth Fund - 36,118
17.8%
941 Goldman Sachs Emerging Markets
Equity Fund - 5.5% 11,122
830 Goldman Sachs Variable Insurance
Trust CORE Small Cap Equity Fund - 8,793
4.3%
459 Goldman Sachs Real Estate
Securities 3,991
Fund - 2.0%
320 Goldman Sachs International Small
Cap Fund - 2.4% 4,785
----------
$ 147,729
- ------------------------------------------------------
Fixed Income - 39.1%
4,514 Goldman Sachs Variable Insurance
Trust Global Income Fund - 21.9% $ 44,370
2,566 Goldman Sachs Core Fixed Income
Fund - 11.9% 24,044
1,172 Goldman Sachs High Yield Fund - 5.3% 10,667
----------
$ 79,081
- ------------------------------------------------------
TOTAL MUTUAL FUNDS
(Cost $212,310) $ 226,810
- ------------------------------------------------------
TOTAL INVESTMENTS
(Cost $212,310) $ 226,810
- ------------------------------------------------------
- ------------------------------------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST
GROWTH STRATEGY PORTFOLIO
- ------------------------------------------------------
Shares Description Value
- ------------------------------------------------------
Mutual Funds (Institutional Shares) - 106.0%
- ------------------------------------------------------
Equity - 88.4%
5,130 Goldman Sachs Variable Insurance
Trust CORE International Equity $ 62,841
Fund - 31.0%
4,008 Goldman Sachs Variable Insurance
Trust CORE Large Cap Value Fund - 42,521
21.0%
2,570 Goldman Sachs Variable Insurance
Trust CORE Large Cap Growth Fund - 40,603
20.1%
1,036 Goldman Sachs Emerging Markets
Equity Fund - 6.0% 12,244
965 Goldman Sachs Variable Insurance
Trust CORE Small Cap Equity Fund - 10,227
5.1%
554 Goldman Sachs Real Estate
Securities 4,810
Fund - 2.4%
380 Goldman Sachs International Small
Cap Fund - 2.8% 5,681
----------
$ 178,927
- ------------------------------------------------------
Fixed Income - 17.6%
2,469 Goldman Sachs Variable Insurance
Trust Global Income Fund - 12.0% $ 24,269
817 Goldman Sachs Core Fixed Income
Fund - 3.7% 7,656
418 Goldman Sachs High Yield Fund - 1.9% 3,804
----------
$ 35,729
- ------------------------------------------------------
TOTAL MUTUAL FUNDS
(Cost $203,208) $ 214,656
- ------------------------------------------------------
TOTAL INVESTMENTS
(Cost $203,208) $ 214,656
- ------------------------------------------------------
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.
9
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Performance Summary
December 31, 1999
The following graph shows the value as of December 31, 1999 of a $10,000
investment made on April 1, 1999 (Portfolio's commencement date of operations).
For comparative purposes, the performance of the portfolio's benchmarks (the S&P
500 Index, MSCI EAFE, Russell 2000 Index and MSCI EMF) are also shown. All
performance data shown represents past performance and should not be considered
indicative of future performance, which will fluctuate with changes in market
conditions. These performance fluctuations will cause an investor's shares, when
redeemed, to be worth more or less than original cost.
- --------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust Aggressive Growth Strategy Portfolio's
Lifetime Performance
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Performance of a $10,000 Investment, Distributions Reinvested April 1, 1999 to
December 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Goldman Sachs
Variable
Insurance
Trust
Aggressive
Growth
Strategy S&P 500 MSCI Russell MSCI
Month Portfolio Index EAFE 2000 Index EMF
- ----- ---------- ------- ------ ---------- ------
<S> <C> <C> <C> <C> <C>
4/1/1999 (inception date) 10,000 10,000 10,000 10,000 10,000
Apr-99 10,590 10,387 10,407 10,896 11,237
May-99 10,270 10,142 9,873 11,055 11,172
Jun-99 11,060 10,705 10,260 11,555 12,440
Jul-99 10,720 10,371 10,567 11,238 12,101
Aug-99 10,600 10,319 10,609 10,822 12,212
Sep-99 10,260 10,036 10,718 10,825 11,798
Oct-99 10,830 10,671 11,122 10,869 12,050
Nov-99 11,330 10,888 11,510 11,518 13,130
Dec-99 14,539 11,529 12,545 12,819 14,801
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Total Return through December 31, 1999(a) Since Inception
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
Goldman Sachs Variable Insurance Trust Aggressive Growth Strategy Portfolio 45.39%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999 and represents the cumulative total
return since the Portfolio has not been in operation for a full 12 months.
10
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Investments
December 31, 1999
- ------------------------------------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST
AGGRESSIVE GROWTH STRATEGY PORTFOLIO
- ------------------------------------------------------
Shares Description Value
- ------------------------------------------------------
Mutual Funds (Institutional Shares) - 127.6%
- ------------------------------------------------------
Equity - 127.6%
2,434 Goldman Sachs Variable Insurance
Trust CORE International Equity $ 29,822
Fund - 41.4%
1,985 Goldman Sachs Variable Insurance
Trust CORE Large Cap Value Fund - 21,066
29.2%
1,371 Goldman Sachs Variable Insurance
Trust CORE Large Cap Growth Fund - 21,661
30.1%
644 Goldman Sachs Emerging Markets
Equity Fund - 10.6% 7,614
563 Goldman Sachs Variable Insurance
Trust CORE Small Cap Equity Fund - 5,967
8.3%
249 Goldman Sachs Real Estate
Securities 2,160
Fund - 3.0%
243 Goldman Sachs International Small
Cap Fund - 5.0% 3,640
----------
$ 91,930
- ------------------------------------------------------
TOTAL MUTUAL FUNDS
(Cost $79,605) $ 91,930
- ------------------------------------------------------
TOTAL INVESTMENTS
(Cost $79,605) $ 91,930
- ------------------------------------------------------
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 an integral part of these financial statements.
11
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Assets and Liabilities
December 31, 1999
<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 $45,640, $156,710, $212,310,$203,208
$79,605, respectively) $ 46,672 $159,444 $ 226,810 $214,656 $ 91,930
Receivables:
Investment securities sold - - 3,115 - -
Dividends and interest 1,943 5,308 4,401 2,466 2,438
Receivable for fund shares sold - 19,858 - 6,561 4,304
Reimbursement from adviser 20,764 20,484 17,401 23,185 18,929
Other assets 124 27 - 1,739 123
- -----------------------------------------------------------------------------------------------------------------------
Total assets 69,503 205,121 251,727 248,607 117,724
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Liabilities:
- -----------------------------------------------------------------------------------------------------------------------
Due to custodian - 15,417 3,121 - -
Payables:
Payable for fund shares redeemed - - 193 192 47
Amounts owed to affiliates 6,055 6,057 6,018 6,011 6,054
Accrued expenses and other liabilities 39,352 40,473 40,058 39,992 39,598
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities 45,407 61,947 49,390 46,195 45,699
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Net Assets:
- -----------------------------------------------------------------------------------------------------------------------
Paid-in capital 23,461 140,947 188,355 191,469 60,144
Accumulated undistributed net investment income - - - - -
Accumulated net realized loss on investment transactions (397) (507) (518) (505) (444)
Net unrealized gain on investments 1,032 2,734 14,500 11,448 12,325
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 24,096 $143,174 $202,337 $202,412 $72,025
- -----------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding, no par value
(unlimited number of shares authorized) 5,380 15,012 19,270 18,993 5,751
Net asset value and redemption price per share $4.48 $9.54 $10.50 $10.66 $12.52
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are integral part of these financial statements.
12
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Operations
For the Period Ended December 31, 1999
<TABLE>
<CAPTION>
Growth Aggressive
Conservative Balanced and 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> <C>
Income distributions from underlying funds $ 1,834 $ 4,028 $ 2,801 $ 831 $ 686
Interest 44 - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total income 1,878 4,028 2,801 831 686
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Management fees 100 35 62 38 40
Transfer agent fees 21,380 21,369 21,324 21,323 21,368
Custodian fees 24,537 25,026 24,716 24,574 23,745
Registration fees 187 110 128 112 112
Professional fees 30,393 30,393 30,393 30,393 30,393
Trustee fees 4,006 4,006 4,006 4,006 4,006
Printing fees 10,384 10,384 10,384 10,823 10,103
Organization expenses 12,001 12,001 12,001 12,001 12,001
Other 3,903 3,903 3,903 3,903 3,903
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses 106,891 107,227 106,917 107,173 105,671
- -----------------------------------------------------------------------------------------------------------------------------------
Less-- expenses reimbursed and fees waived by
Goldman Sachs (106,724) (107,169) (106,813) (107,109) (105,605)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses 167 58 104 64 66
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,711 3,970 2,697 767 620
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Realized and unrealized gain:
- -----------------------------------------------------------------------------------------------------------------------------------
Capital gain distributions from underlying funds 189 1,440 2,214 1,941 2,037
Net realized gain (loss) from investment transactions 6,053 (455) (541) (414) 2,806
Net change in unrealized gain on investments 1,032 2,734 14,500 11,448 12,325
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain 7,274 3,719 16,173 12,975 17,168
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 8,985 $ 7,689 $ 18,870 $ 13,742 $ 7,788
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Statements of Changes in Net Assets
For the Period Ended December 31, 1999
<TABLE>
<CAPTION>
Growth Aggressive
Conservative Balanced and Income Growth Growth
Strategy Strategy Strategy Strategy Strategy
Portfolio(a) Portfolio(a) Portfolio(a) Portfolio(a) Portfolio(a)
- ----------------------------------------------------------------------------------------------------------------------------------
From operations:
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net investment income $ 1,711 $ 3,970 $ 2,697 $ 767$ $ 620
Net realized gain 6,242 985 1,673 1,527 4,843
Net change in unrealized gain on investments 1,032 2,734 14,500 11,448 12,325
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 8,985 7,689 18,870 13,742 17,788
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income (1,711) (3,970) (2,697) (767) (620)
In excess of net investment income (6,806) (1,550) (2,295) (1,993) (5,242)
From capital (5,385) (11,891) (11,672) (17,388) (1,658)
From net realized gain on investment - - - (103) (111)
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (13,902) (17,411) (16,664) (20,251) (7,631)
- ----------------------------------------------------------------------------------------------------------------------------------
From share transactions:
- ----------------------------------------------------------------------------------------------------------------------------------
Net Proceeds from sales of shares 343,976 125,516 173,760 178,771 44,267
Reinvestment of dividends and distributions 13,882 17,406 16,661 20,248 7,624
Cost of shares repurchased (338,845) (26) (290) (98) (23)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from share 19,013 142,896 190,131 198,921 51,868
transactions
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE 14,096 133,174 192,337 192,412 62,025
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets:
- ----------------------------------------------------------------------------------------------------------------------------------
Beginning of period 10,000 10,000 10,000 10,000 10,000
- ----------------------------------------------------------------------------------------------------------------------------------
End of period $ 24,096 $ 143,174 $ 202,337 $ 202,412 $ 72,025
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income $ - $ - $ - $ - $ -
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Commenced operations on April 1, 1999.
The accompanying notes are an integral part these financial statements.
14
<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
Operation (a) Distribution to shareholders
------------------------ ----------------------------------------
Net
Net increase
Net asset realized In excess of (decrease) Net asset
value, Net and From net net From net in net value,
beginning investment unrealized investment investment From realized asset end
of period income gain income income capital gain value of period
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD ENDED DECEMBER 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Conservative
Strategy Portfolio (e) $10.00 $0.20(f) $ 0.44(f) $(0.20) $(0.78) $(5.18) $ - $(5.52) $ 4.48
Balanced Strategy
Portfolio (e) 10.00 0.70 0.44 (0.70) (0.10) (0.80) - (0.46) 9.54
Growth and Income
Strategy Portfolio (e) 10.00 0.27 1.22 (0.27) (0.12) (0.60) - 0.50 10.50
Growth Strategy
Portfolio (e) 10.00 0.27 1.69 (0.27) (0.10) (0.92) (0.01) 0.66 10.66
Aggressive Growth
Strategy Portfolio (e) 10.00 0.48 3.74 (0.48) (0.91) (0.29) (0.02) 2.52 12.52
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ratio assuming no
expense reimbursements
-------------------------
Ratio of Ratio of Ratio of
Net net net Ratio of net
assets at expenses investment expenses investment
Total end of to average income to to average loss to Portfolio
return period net average net net average turnover
(b)(c) (in 000s) assets (d) assets(d) assets(d) assets(d) rate(c)
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD ENDED DECEMBER 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Conservative
Strategy Portfolio (e) 6.98% $24 0.25% 2.57% 160.24% (157.42)% 461%
Balanced Strategy
Portfolio (e) 11.52 143 0.25 17.05 460.49 (443.19) 103
Growth and Income
Strategy Portfolio (e) 15.00 202 0.25 6.49 257.41 (250.67) 56
Growth Strategy
Portfolio (e) 19.71 202 0.25 3.01 420.13 (416.87) 72
Aggressive Growth
Strategy Portfolio (e) 45.39 72 0.25 2.35 400.99 (398.39) 179
- ------------------------------------------------------------------------------------------------------------------------------------
</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.
(f) Calculated based on the average shares outstanding methodology.
- -------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust Asset Allocation Funds - Tax
Information (unaudited)
During the tax year ended December 31, 1999, 0.93%, 2.70%, 6.17%, 11.10%,
and 5.86% of the ordinary income dividends paid from net investment income
by the Conservative Strategy, Balanced Strategy, Growth and Income Strategy,
Growth Strategy and Aggressive Growth Strategy Portfolios qualify for the
dividends deduction available to corporations.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Notes to Financial Statements
December 31, 1999
- --------------------------------------------------------------------------------
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.
At December 31, 1999, the Portfolios' aggregate unrealized gains and losses
based on cost for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Unrealized Gross Unrealized Net Unrealized
Portfolio Tax Cost Gain Loss Gain
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Conservative Strategy $ 46,037 $ 1,794 $ 1,159 $ 635
- ------------------------------------------------------------------------------------------------------------------------
Balanced Strategy 157,217 5,554 3,327 2,227
- ------------------------------------------------------------------------------------------------------------------------
Growth and Income Strategy 212,783 15,866 1,839 14,027
- ------------------------------------------------------------------------------------------------------------------------
Growth Strategy 203,713 11,749 806 10,943
- ------------------------------------------------------------------------------------------------------------------------
Aggressive Growth Strategy 80,049 11,881 - 11,881
========================================================================================================================
</TABLE>
16
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Notes to Financial Statements
December 31, 1999
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.
- --------------------------------------------------------------------------------
3. AGREEMENTS
- --------------------------------------------------------------------------------
As of September 1, 1999, Goldman Sachs & Co. ("Goldman Sachs") established a new
operating division called the Investment Management Division ("IMD"). This newly
created entity includes Goldman Sachs Asset Management ("GSAM"). Pursuant to an
Investment Management Agreement (the "Agreement"), GSAM, serves as the
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 the 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.
Pursuant to the Distribution and Transfer Agent Agreements, Goldman Sachs
serves as the Distributor of each Portfolio's shares at no cost to the
Portfolios. Goldman Sachs also serves as the Transfer Agent of the Portfolios
and has voluntarily waived its fees. Goldman Sachs may discontinue or modify
this waiver in the future at its discretion.
At December 31, 1999, the amounts owed to affiliates were as follows:
<TABLE>
<CAPTION>
Portfolio Fees Agent Fees Total
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Conservative Strategy $ 4 $6,051 $6,055
- --------------------------------------------------------------------------------------------------------------------
Balanced Strategy 16 6,041 6,057
- --------------------------------------------------------------------------------------------------------------------
Growth and Income Strategy 23 5,995 6,018
- --------------------------------------------------------------------------------------------------------------------
Growth Strategy 16 5,995 6,011
- --------------------------------------------------------------------------------------------------------------------
Aggressive Growth Strategy 14 6,040 6,054
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Included in the "Receivable Reimbursement from Adviser" in the accompanying
Statements of Assets and Liabilities of the Growth Strategy Portfolio was $5,490
related to capital contribution from affiliated parties.
As of December 31, 1999, Goldman Sachs was the beneficial owner of 44%, 8%,
6%, 6% and 20% of the outstanding shares of the Conservative Strategy, Balanced
Strategy, Growth and Income Strategy, Growth Strategy and Aggressive Growth
Strategy Portfolios, respectively.
- --------------------------------------------------------------------------------
4. PORTFOLIO SECURITY TRANSACTIONS
- --------------------------------------------------------------------------------
Purchases and proceeds of sales or maturities of long-term securities for the
period ended December 31, 1999, were as follows:
<TABLE>
<CAPTION>
Portfolio Purchases Sales
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Conservative Strategy $ 466,669 $ 427,082
- --------------------------------------------------------------------------------------------------------------------
Balanced Strategy 205,336 48,171
- --------------------------------------------------------------------------------------------------------------------
Growth and Income Strategy 255,981 43,130
- --------------------------------------------------------------------------------------------------------------------
Growth Strategy 243,710 40,088
- --------------------------------------------------------------------------------------------------------------------
Aggressive Growth Strategy 165,200 88,401
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
5. LINE OF CREDIT FACILITY
- --------------------------------------------------------------------------------
The Portfolios participate in a $250,000,000 committed and a $250,000,000
uncommitted, 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
17
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
Notes to Financial Statements
December 31, 1999
borrowings is based on the Federal Funds rate. The committed facility also
requires a fee to be paid by the Portfolios based on the amount of the
commitment, which has not been utilized. During the period ended December 31,
1999, the Portfolios did not have any borrowings under either of these
facilities.
- --------------------------------------------------------------------------------
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 Portfolios' custodian.
- --------------------------------------------------------------------------------
7. CERTAIN RECLASSIFICATIONS
- --------------------------------------------------------------------------------
In accordance with Statement of Position 93-2, the Conservative Strategy
Portfolio reclassified $5,552 from paid-in capital and $6,639 from accumulated
net realized gain on investment to undistributed net investment income. Balanced
Strategy Portfolio reclassified $11,949 from paid-in capital and $1,492 from
accumulated net realized gain on investment to undistributed net investment
income. Growth and Income Strategy Portfolio reclassified $11,776 from paid-in
capital and $2,191 from accumulated net realized gain on investment to
undistributed net investment income. Growth Strategy Portfolio reclassified
$17,452 from paid-in capital and $1,929 from accumulated net realized gain on
investment to undistributed net investment income. Aggressive Growth Strategy
Portfolio reclassified $1,724 from paid-in capital and $5,176 from accumulated
net realized gain on investment to undistributed net investment income. These
reclassifications have no impact on the net asset value of each Portfolio and
are designed to present the Portfolios' capital accounts on a tax basis.
- --------------------------------------------------------------------------------
8. SUMMARY OF SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Share activity for the period ended December 31, 1999 was as follows:
<TABLE>
<CAPTION>
Reinvestment of
Shares Dividends Shares
Portfolio Sold and Distributions Repurchased Net Increase
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Conservative Strategy 35,397 3,127 (33,144) 5,380
- ----------------------------------------------------------------------------------------------------------------------
Balanced Strategy 13,173 1,842 (3) 15,012
- ----------------------------------------------------------------------------------------------------------------------
Growth and Income Strategy 17,711 1,605 (46) 19,270
- ----------------------------------------------------------------------------------------------------------------------
Growth Strategy 17,095 1,925 (27) 18,993
- ----------------------------------------------------------------------------------------------------------------------
Aggressive Growth Strategy 5,035 722 (6) 5,751
======================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
9. CHANGE IN INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
On October 26, 1999, the Board of Trustees of the Portfolios, upon the
recommendation of the Board's audit committee, determined not to retain Arthur
Andersen LLP and approved a change of the Portfolios' independent auditors to
Ernst & Young LLP. For the period ended December 31, 1999, Arthur Andersen LLP's
audit reports contained no adverse opinion or disclaimer of opinion; nor were
their reports qualified or modified as to uncertainty, audit scope, or
accounting principles. Further, there were no disagreements between the
Portfolios and Arthur Andersen LLP on accounting principles or practices,
financial statement disclosure or audit scope or procedure, which if not
resolved to the satisfaction of Arthur Andersen LLP would have caused them to
make reference to the disagreement in their reports.
- --------------------------------------------------------------------------------
10. OTHER MATTERS
- --------------------------------------------------------------------------------
On February 3, 2000, the Board of Trustees of the Portfolios approved
liquidation and termination of such Portfolios, subject to all annuity contract
owners exchanging or being formally substituted out of such Portfolios.
18
<PAGE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST ASSET ALLOCATION PORTFOLIOS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
Goldman Sachs Variable Insurance Trust - Asset Allocation Portfolios:
We have audited the accompanying statements of assets and liabilities of Goldman
Sachs Conservative Strategy Portfolio, Goldman Sachs Balanced Strategy
Portfolio, Goldman Sachs Growth and Income Strategy Portfolio, Goldman Sachs
Growth Strategy Portfolio, and Goldman Sachs Aggressive Strategy Portfolio, the
portfolios constituting Goldman Sachs Variable Insurance Trust - Asset
Allocation Portfolios (a Delaware Business Trust), including the statements of
investments, as of December 31, 1999, and the related statements of operations,
statements of changes in net assets and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1999 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Goldman Sachs Conservative Strategy Portfolio, Goldman Sachs Balanced Strategy
Portfolio, Goldman Sachs Growth and Income Strategy Portfolio, Goldman Sachs
Growth Strategy Portfolio, and Goldman Sachs Aggressive Strategy Portfolio,
constituting Goldman Sachs Variable Insurance Trust - Asset Allocation
Portfolios as of December 31, 1999, the results of their operations, the changes
in their net assets and the financial highlights for the period presented, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 17, 2000
19
<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 Nancy L. Mucker, Vice President
Mary P. McPherson John M. Perlowski, Treasurer
Alan A. Shuch Adrien E. Deberghes Jr., Assistant Treasurer
Jackson W. Smart, Jr. Philip V. Giuca, Jr., Assistant Treasurer
William H. Springer Michael J. Richman, Secretary
Richard P. Strubel Howard B. Surloff, Assistant Secretary
Valerie A. Zondorak, Assistant Secretary
</TABLE>
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent
GOLDMAN SACHS ASSET MANAGEMENT
Investment Adviser
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:
Conservative Strategy, Balanced Strategy, Growth 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 2000 Goldman, Sachs & Co. All right reserved. Date of first use:
February 24, 2000
