<PAGE>
As filed with the Securities and Exchange Commission on
October 1, 1998
1933 Act Registration No. 33-17619
1940 Act Registration No. 811-5349
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
____________
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 ( X )
Post-Effective Amendment No. 47 ( X )
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 ( X )
Amendment No. 49 ( X )
(Check appropriate box or boxes)
__________
GOLDMAN SACHS TRUST
(Exact name of registrant as specified in charter)
4900 Sears Tower
Chicago, Illinois 60606-6303
(Address of principal executive offices)
Registrant's Telephone Number,
including Area Code 312-993-4400
____________
Michael J. Richman, Esq. Copies to:
Goldman, Sachs & Co. Jeffrey A. Dalke, Esq.
85 Broad Street - 12th Floor Drinker Biddle & Reath LLP
New York, New York 10004 1345 Chestnut Street
Philadelphia, PA 19107
(Name and address of agent for service)
<PAGE>
It is proposed that this filing will become effective (check appropriate box)
( ) Immediately upon filing pursuant to paragraph (b)
( ) On (date) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(1)
( ) On (date) pursuant to paragraph (a)(1)
( ) 75 days after filing pursuant to paragraph (a)(2)
(X) On December 15, 1998 pursuant to paragraph (a)(2) of rule 485.
Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2.
On January 27, 1998 Registrant filed a Rule 24f-2 notice on behalf of its fixed
income trusts for their fiscal year ended October 31, 1997.
On March 31, 1998 Registrant filed a Rule 24f-2 notice on behalf of its money
market funds for their fiscal year ended December 31, 1997.
On April 30, 1998 Registrant filed a Rule 24f-2 notice on behalf of its equity
funds for their fiscal year ended January 31, 1998.
This registration statement is being filed solely to include a new fund of the
RegistrantGoldman Sachs CORE Large Cap Value Fund.
<PAGE>
GOLDMAN SACHS TRUST
Goldman Sachs Domestic Equity Funds
Class A, Class B and Class C Shares
---------------
CROSS REFERENCE SHEET
(as required by Rule 481)
PART A CAPTION
- ------ -------
Goldman Sachs Domestic Equity Funds
- -----------------------------------
Goldman Sachs Balanced Fund, Goldman Sachs Growth and Income Fund, Goldman Sachs
CORE U.S. Equity Fund, Goldman Sachs CORE Large Cap Value Fund, Goldman Sachs
CORE Large Cap Growth Fund, Goldman Sachs CORE Small Cap Equity Fund, Goldman
Sachs Cap Growth Fund, Goldman Sachs Mid Cap Equity Fund and Goldman Small Cap
Value Fund.
1. Cover Page Cover Page
2. Synopsis Fund Highlights; Fees and Expenses
3. Condensed Financial
Information Financial Highlights
4. General Description Cover Page; Fund Highlights;
of Registrant Investment Objective and Policies;
Description of Securities; Risk Factors; Investment
Techniques; Investment Restrictions; Portfolio
Turnover; Shares of the Trust;
5. Management of the Fund Management
6. Capital Stock and Dividends; Shares of the Trust;
Other Securities Taxation;
7. Purchase of Securities How to Invest; Net Asset Value;
Being Offered Services Available to Shareholders; Distribution and
Service Plans;
8. Redemption or How to sell Shares of the Funds;
Repurchase Services Available to Shareholders;
Distribution and Service Plans;
9. Pending Legal Not Applicable
Proceedings
<PAGE>
PART B CAPTION
- ------ -------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information Introduction
and History
13. Investment Objectives Investment Policies;
and Policies Investment Restrictions
14. Management of the Management
Registrant
15. Control Persons and Shares of the Trust
Principal Holders of
Securities
16. Investment Advisory Management
and Other Services
17. Brokerage Allocation Portfolio Transactions
and Other Securities and Brokerage
18. Capital Stock and Shares of the Trust
Other Securities
19. Purchase, Redemption Management; Net Asset Value;
and Pricing of Other Information; Other Information
Securities Being Regarding Purchases, Redemptions, Ex-
Offered changes and Dividends.
20. Tax Status Taxation
21. Underwriters Management-Distributor
22. Calculation of Performance Information
Performance Data
23. Financial Statements Not Applicable
Part C
- ------
Information required to be included in Part C is set forth under the appropriate
Item, so numbered in Part C to this Registration Statement.
<PAGE>
GOLDMAN SACHS TRUST
Goldman Sachs Domestic Equity Funds
Institutional Shares
---------------
CROSS REFERENCE SHEET
(as required by Rule 481)
PART A CAPTION
- ------ -------
Goldman Sachs Domestic Equity Funds
- -----------------------------------
Goldman Sachs Balanced Fund, Goldman Sachs Growth and Income Fund, Goldman Sachs
CORE U.S. Equity Fund, Goldman Sachs CORE Large Cap Value Fund, Goldman Sachs
CORE Large Cap Growth Fund, Goldman Sachs CORE Small Cap Equity Fund, Goldman
Sachs Cap Growth Fund, Goldman Sachs Mid Cap Equity Fund and Goldman Small Cap
Value Fund.
1. Cover Page Cover Page
2. Synopsis Fund Highlights; Fees and Expenses
3. Condensed Financial
Information Financial Highlights
4. General Description Cover Page; Fund Highlights;
of Registrant Investment Objective and Policies;
Description of Securities; Risk Factors; Investment
Techniques; Investment Restrictions; Portfolio
Turnover; Shares of the Trust;
5. Management of the Fund Management
6. Capital Stock and Dividends; Shares of the Trust;
Other Securities Taxation;
7. Purchase of Securities Purchase of Institutional Shares; Net
Being Offered Asset Value;
8. Redemption or
Repurchase Redemption of Institutional Shares;
9. Pending Legal Not Applicable
Proceedings
<PAGE>
PART B CAPTION
- ------ -------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information Introduction
and History
13. Investment Objectives Investment Policies;
and Policies Investment Restrictions
14. Management of the Management
Registrant
15. Control Persons and Shares of the Trust
Principal Holders of
Securities
16. Investment Advisory Management
and Other Services
17. Brokerage Allocation Portfolio Transactions
and Other Securities and Brokerage
18. Capital Stock and Shares of the Trust
Other Securities
19. Purchase, Redemption Management; Net Asset Value;
and Pricing of Other Information; Other Information
Securities Being Regarding Purchases, Redemptions, Ex-
Offered changes and Dividends.
20. Tax Status Taxation
21. Underwriters Management-Distributor
22. Calculation of Performance Information
Performance Data
23. Financial Statements Not Applicable
Part C
- ------
Information required to be included in Part C is set forth under the appropriate
Item, so numbered in Part C to this Registration Statement.
<PAGE>
GOLDMAN SACHS TRUST
Goldman Sachs Domestic Equity Funds
Service Shares
---------------
CROSS REFERENCE SHEET
(as required by Rule 481)
PART A CAPTION
- ------ -------
Goldman Sachs Domestic Equity Funds
- -----------------------------------
Goldman Sachs Balanced Fund, Goldman Sachs Growth and Income Fund, Goldman Sachs
CORE U.S. Equity Fund, Goldman Sachs CORE Large Cap Value Fund, Goldman Sachs
CORE Large Cap Growth Fund, Goldman Sachs CORE Small Cap Equity Fund, Goldman
Sachs Cap Growth Fund, Goldman Sachs Mid Cap Equity Fund and Goldman Small Cap
Value Fund.
1. Cover Page Cover Page
2. Synopsis Fund Highlights; Fees and Expenses
3. Condensed Financial
Information Financial Highlights
4. General Description Cover Page; Fund Highlights;
of Registrant Investment Objective and Policies;
Description of Securities; Risk Factors; Investment
Techniques; Investment Restrictions; Portfolio
Turnover; Shares of the Trust;
5. Management of the Fund Management
6. Capital Stock and Dividends; Shares of the Trust;
Other Securities Taxation;
7. Purchase of Securities Purchase of Service Shares; Net
Being Offered Asset Value; Additional Services
8. Redemption or Redemption of Service Shares;
Repurchase Additional Services
9. Pending Legal Not Applicable
Proceedings
<PAGE>
PART B CAPTION
- ------ -------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information Introduction
and History
13. Investment Objectives Investment Policies;
and Policies Investment Restrictions
14. Management of the Management
Registrant
15. Control Persons and Shares of the Trust
Principal Holders of
Securities
16. Investment Advisory Management
and Other Services
17. Brokerage Allocation Portfolio Transactions
and Other Securities and Brokerage
18. Capital Stock and Shares of the Trust
Other Securities
19. Purchase, Redemption Management; Net Asset Value;
and Pricing of Other Information; Other Information
Securities Being Regarding Purchases, Redemptions, Ex-
Offered changes and Dividends.
20. Tax Status Taxation
21. Underwriters Management-Distributor
22. Calculation of Performance Information
Performance Data
23. Financial Statements Not Applicable
Part C
- ------
Information required to be included in Part C is set forth under the appropriate
Item, so numbered in Part C to this Registration Statement.
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS
GOLDMAN SACHS DOMESTIC EQUITY FUNDS
December 15, 1998 CLASS A, B AND C SHARES
GOLDMAN SACHS BALANCED FUND
Seeks long-term capital growth and current income through investments in eq-
uity and fixed-income securities.
GOLDMAN SACHS GROWTH AND INCOME FUND
Seeks long-term growth of capital and growth of income through investments
in equity securities that are considered to have favorable prospects for
capital appreciation and/or dividend paying ability.
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
Seeks long-term growth of capital and dividend income through a broadly di-
versified portfolio of equity securities of large cap U.S. issuers that are
selling at low to modest valuations relative to general market measures and
that are expected to have favorable prospects for capital appreciation
and/or dividend-paying ability.
GOLDMAN SACHS CORE U.S. EQUITY FUND
Seeks long-term growth of capital and dividend income through a broadly di-
versified portfolio of large cap and blue chip equity securities represent-
ing all major sectors of the U.S. economy.
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
Seeks long-term growth of capital through a broadly diversified portfolio of
equity securities of large cap U.S. issuers that are expected to have better
prospects for earnings growth than the growth rate of the general domestic
economy. Dividend income is a secondary consideration.
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
Seeks long-term growth of capital through a broadly diversified portfolio of
equity securities of U.S. issuers which are included in the Russell 2000 In-
dex at the time of investment.
GOLDMAN SACHS CAPITAL GROWTH FUND
Seeks long-term growth of capital through diversified investments in equity
securities of companies that are considered to have long-term capital appre-
ciation potential.
GOLDMAN SACHS MID CAP EQUITY FUND
Seeks long-term capital appreciation primarily through investments in equity
securities of companies with public stock market capitalizations within the
range of the market capitalization of companies constituting the Russell
Midcap Index at the time of investment (currentlybetween $400 million and
$16 billion).
GOLDMAN SACHS SMALL CAP VALUE FUND
Seeks long-term capital growth through investments in equity securities of
companies with public stock market capitalizations of $1 billion or less at
the time of investment.
Goldman Sachs Asset Management ("GSAM"), New York, New York, a separate
operating division of Goldman, Sachs & Co. ("Goldman Sachs"), serves as
investment adviser to the Balanced, Growth and Income, CORE Large Cap Value,
CORE Large Cap Growth, CORE Small Cap Equity, Mid Cap Equity and Small Cap
Value (formerly "Small Cap Equity") Funds. Goldman Sachs Funds Management, L.P.
("GSFM"), New York, New York, an affiliate of Goldman Sachs, serves as
investment adviser to the CORE U.S. Equity (formerly the "Select Equity Fund")
and Capital Growth Funds. GSAM and GSFM are each referred to in this Prospectus
as the "Investment Adviser." Goldman Sachs serves as each Fund's distributor
and transfer agent.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN A FUND INVOLVES INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
(continued on next page)
<PAGE>
(cover continued)
This Prospectus provides information about Goldman Sachs Trust (the "Trust")
and the Funds that a prospective investor should understand before investing.
This Prospectus should be retained for future reference. A Statement of
Additional Information (the "Additional Statement"), dated December 15, 1998,
containing further information about the Trust and the Funds which may be of
interest to investors, has been filed with the Securities and Exchange
Commission ("SEC"), is incorporated herein by reference in its entirety, and
may be obtained without charge from Goldman Sachs by calling the telephone
number, or writing to one of the addresses, listed on the back cover of this
Prospectus. The SEC maintains a Web site (http://www.sec.gov) that contains
the Additional Statement and other information regarding the Trust.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights.................... 3
Fees and Expenses.................. 8
Financial Highlights............... 13
Investment Objectives and Policies. 21
Description of Securities.......... 26
Investment Techniques.............. 32
Risk Factors....................... 36
Investment Restrictions............ 37
Portfolio Turnover................. 38
Management......................... 38
Expenses........................... 44
Reports to Shareholders............ 44
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
How to Invest...................... 44
Services Available to Shareholders. 50
Distribution and Service Plans..... 53
How to Sell Shares of the Funds.... 54
Dividends.......................... 56
Net Asset Value.................... 56
Performance Information............ 57
Shares of the Trust................ 58
Taxation........................... 58
Additional Information............. 59
Appendix .......................... A-1
Account Application
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
The following is intended to highlight certain information and is
qualified in its entirety by the more detailed information contained in
this Prospectus.
WHAT IS THE GOLDMAN SACHS TRUST?
The Goldman Sachs Trust is an open-end management investment company
that offers its shares ("Shares") in several investment funds (commonly
known as mutual funds (the "Funds")). Each Fund pools the monies of
investors by selling its Shares to the public and investing these monies
in a portfolio of securities designed to achieve that Fund's stated
investment objectives.
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS?
Each Fund has distinct investment objectives and policies. There can be
no assurance that a Fund's objectives will be achieved. Each Fund is a
"diversified open-end management company" as defined in the Investment
Company Act of 1940, as amended (the "Act"). For a further description of
each Fund's investment objectives and policies, see "Investment
Objectives and Policies," "Description of Securities" and "Investment
Techniques."
- --------------------------------------------------------------------------------
<TABLE>
FUND NAME INVESTMENT OBJECTIVES INVESTMENT CRITERIA BENCHMARK
--------- --------------------- ------------------- ---------
<S> <C> <C> <C>
BALANCED Long-term capital Between 45% and 65% of total Lehman Aggregate Bond
FUND growth and current assets in equity securities Index and the
income. and at least 25% in fixed- Standard & Poor's
income senior securities. Index of 500 Common
Stocks (the "S&P 500
Index")
- ----------------------------------------------------------------------------------------
GROWTH AND Long-term growth of At least 65% of total assets S&P 500 Index
INCOME FUND capital and growth of in equity securities that the
income. Investment Adviser considers
to have favorable prospects
for capital appreciation
and/or dividend-paying
ability.
- ----------------------------------------------------------------------------------------
CORE LARGE Long-term growth of At least 90% of total assets Russell 1000 Value
CAP VALUE capital and dividend in equity securities of U.S. Index
FUND income. issuers, including certain
foreign issuers traded in the
U.S. The Fund seeks to achieve
its objective through a
broadly diversified portfolio
of equity securities of large
cap U.S. issuers that are
selling at low to modest
valuations relative to general
market measures such as
earnings, book value and other
fundamental accounting
measures, and that are
expected to have favorable
prospects for capital
appreciation and/or dividend-
paying ability. The Fund's
investments are selected using
both a variety of quantitative
techniques and fundamental
research in seeking to
maximize the Fund's expected
return, while maintaining
risk, style, capitalization
and industry characteristics
similar to the Russell 1000
Value Index.
</TABLE>
(continued)
3
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND NAME INVESTMENT OBJECTIVES INVESTMENT CRITERIA BENCHMARK
--------- --------------------- ------------------- ---------
<S> <C> <C> <C>
CORE U.S. Long-term growth of At least 90% of total assets S&P 500 Index
EQUITY FUND capital and dividend in equity securities of U.S.
income. issuers, including certain
foreign issuers traded in the
U.S. The Fund seeks to achieve
its objective through a
broadly diversified portfolio
of large cap and blue chip
equity securities representing
all major sectors of the U.S.
economy. The Fund's
investments are selected using
both a variety of
quantitative techniques and
fundamental research in
seeking to maximize the Fund's
expected return, while
maintaining risk, style,
capitalization and
industry characteristics
similar to the S&P 500 Index.
- --------------------------------------------------------------------------------------
CORE LARGE Long-term growth of At least 90% of total assets Russell 1000 Growth
CAP GROWTH capital. in equity securities of U.S. Index
FUND Dividend income is a issuers, including certain
secondary foreign issuers traded in the
consideration. U.S. The Fund seeks to achieve
its objective through a
broadly diversified portfolio
of equity securities of large
cap U.S. issuers that are
expected to have better
prospects for earnings growth
than the growth rate of the
general domestic economy. The
Fund's investments are
selected using both a variety
of quantitative techniques and
fundamental research in
seeking to maximize the Fund's
expected return, while
maintaining risk, style,
capitalization and industry
characteristics similar to the
Russell 1000 Growth Index.
- --------------------------------------------------------------------------------------
CORE SMALL Long-term growth of At least 90% of total assets Russell 2000 Index
CAP EQUITY capital. in equity securities of U.S.
FUND issuers, including certain
foreign issuers traded in the
U.S. The Fund seeks to achieve
its objective through a
broadly diversified portfolio
of equity securities of U.S.
issuers which are included in
the Russell 2000 Index at the
time of investment. The Fund's
investments are selected using
both a variety of quantitative
techniques and fundamental
research in seeking to
maximize the Fund's expected
return, while maintaining
risk, style, capitalization
and industry characteristics
similar to the Russell 2000
Index.
- --------------------------------------------------------------------------------------
CAPITAL Long-term capital At least 90% of total assets S&P 500 Index
GROWTH FUND growth. in a diversified portfolio of
equity securities. The
Investment Adviser considers
long-term capital appreciation
potential in selecting
investments.
</TABLE>
(continued)
4
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND NAME INVESTMENT OBJECTIVES INVESTMENT CRITERIA BENCHMARK
--------- --------------------- ------------------- ---------
<S> <C> <C> <C>
MID CAP Long-term capital At least 65% of total assets Russell Midcap Index
EQUITY FUND appreciation. in equity securities of
companies with public stock
market capitalizations within
the range of the market
capitalization of companies
constituting the Russell
Midcap Index at the time of
investment (currently between
$400 million and $16 billion)
("Mid-Cap Companies").
- -----------------------------------------------------------------------------------------
SMALL CAP Long-term capital At least 65% of total assets Russell 2000
VALUE FUND growth. in equity securities of
companies with public stock
market capitalizations of $1
billion or less at the time of
investment.
</TABLE>
WHAT ARE THE RISK FACTORS AND SPECIAL CHARACTERISTICS THAT I SHOULD
CONSIDER BEFORE INVESTING?
Each Fund's Share price will fluctuate with market, economic and, to the
extent applicable, foreign exchange conditions, so that an investment in
any of the Funds may be worth more or less when redeemed than when
purchased. None of the Funds should be relied upon as a complete investment
program. There can be no assurance that a Fund's investment objectives will
be achieved. See "Risk Factors."
Risks of Investing in Small Capitalization Companies. To the extent that
a Fund invests in the securities of small market capitalization companies,
the Fund may be exposed to a higher degree of risk and price volatility.
Securities of such issuers may lack sufficient market liquidity to enable a
Fund to effect sales at an advantageous time or without a substantial drop
in price.
Foreign Risks. Investments in securities of foreign issuers and
currencies involve risks that are different form those associated with
investments in domestic securities. The risks associated with foreign
investments and currencies include changes in relative currency exchange
rates, political and economic developments, the imposition of exchange
controls, confiscation and other governmental restrictions. Generally,
there is less availability of data on foreign companies and securities
markets as well as less regulation of foreign stock exchanges, brokers and
issuers. A Fund's investments in emerging markets and countries ("Emerging
Countries") involves greater risks than investments in the developed
countries of Western Europe, the United States, Canada, Australia, New
Zealand and Japan.
Other. A Fund's use of certain investment techniques, including derivatives,
forward contracts, options and futures, will subject the Fund to greater risk
than funds that do not employ such techniques.
WHO MANAGES THE FUNDS?
Goldman Sachs Asset Management serves as Investment Adviser to the Balanced,
Growth and Income, CORE Large Cap Value, CORE Large Cap Growth, CORE Small Cap
Equity, Mid Cap Equity and Small Cap Value Funds. Goldman Sachs Funds
Management, L.P. serves as Investment Adviser to the CORE U.S. Equity and
Capital Growth Funds. As of August 21, 1998, the Investment Adviser, together
with its affiliates, acted as investment adviser or distributor for assets in
excess of $168 billion.
5
<PAGE>
WHO DISTRIBUTES THE FUNDS' SHARES?
Goldman Sachs acts as distributor of each Fund's Shares (the "Distributor").
WHAT IS THE MINIMUM INVESTMENT?
<TABLE>
<CAPTION>
MINIMUM
--------------------
INITIAL
PURCHASE ADDITIONAL
TYPE OF PURCHASE AMOUNT INVESTMENTS
- ---------------- -------- -----------
<S> <C> <C>
Regular Purchases......................................... $1,000 $50
Tax-Sheltered Retirement Plans (excluding SIMPLE IRAs and
Education IRAs) and UGMA/UTMA Purchases.................. $ 250 $50
SIMPLE IRAs and Education IRAs............................ $ 50 $50
Automatic Investment Plan................................. $ 50 $50
403(b) Plans.............................................. $ 200 $50
</TABLE>
For further information, see "How to Invest--How to Buy Shares of the Funds"
on page 45.
HOW DO I PURCHASE SHARES?
You may purchase Shares of the Funds through Goldman Sachs and certain
investment dealers, including members of the National Association of Securities
Dealers, Inc. (the "NASD") and certain other financial service firms that have
agreements with Goldman Sachs relating to the sale of Shares ("Authorized
Dealers"). See "How to Invest" on page 44.
WHAT ARE MY PURCHASE ALTERNATIVES?
The Funds offer three classes of Shares through this Prospectus. These Shares
may be purchased, at the investor's choice, at a price equal to their next
determined net asset value ("NAV") (i) plus an initial sales charge imposed at
the time of purchase ("Class A Shares"); (ii) with a contingent deferred sales
charge ("CDSC") imposed on redemptions within six years of purchase ("Class B
Shares"); or (iii) without any initial sales charge or CDSC, as long as Shares
are held for one year or more ("Class C Shares"). Direct purchases of $1
million or more of Class A Shares will be sold without an initial sales charge
and may be subject to a CDSC at the time of certain redemptions.
<TABLE>
<CAPTION>
MAXIMUM INITIAL MAXIMUM CONTINGENT
ALL FUNDS SALES CHARGE DEFERRED SALES CHARGE
--------- --------------- ---------------------
<S> <C> <C>
Class A................. 5.5% (See above)
Class B................. N/A 5% declining to 0% after six years
Class C................. N/A 1% if Shares are redeemed within 12 months of purchase
</TABLE>
Over time, the CDSC and distribution and service fees attributable to Class B
or Class C Shares will exceed the initial sales charge and the distribution and
service fees attributable to Class A Shares. Class B Shares convert to Class A
Shares, which are subject to lower distribution and service fees, eight years
after initial purchase. Class C Shares, which are subject to the same
distribution and service fees as Class B Shares, do not convert to Class A
Shares and are subject to the higher distribution and service fees
indefinitely. See "How to Invest--Alternative Purchase Arrangements" on page
44.
6
<PAGE>
HOW DO I SELL MY SHARES?
You may redeem Shares upon request on any Business Day, as defined under
"Additional Information," at the NAV next determined after receipt of such
request in proper form, subject to any applicable CDSC. See "How to Sell Shares
of the Funds."
HOW DO I RECEIVE DIVIDENDS AND DISTRIBUTIONS?
<TABLE>
<CAPTION>
INVESTMENT INCOME DIVIDENDS CAPITAL GAINS
FUND DECLARED AND PAID DISTRIBUTIONS
- ---- --------------------------- -------------
<S> <C> <C>
Balanced.............................. Quarterly Annually
Growth and Income..................... Quarterly Annually
CORE Large Cap Value.................. Quarterly Annually
CORE U.S. Equity...................... Annually Annually
CORE Large Cap Growth................. Annually Annually
CORE Small Cap Equity................. Annually Annually
Capital Growth........................ Annually Annually
Mid Cap Equity........................ Annually Annually
Small Cap Value....................... Annually Annually
</TABLE>
You may receive dividends and distributions in additional Shares of the same
class of the Fund in which you have invested or you may elect to receive them
in cash, Shares of the same class of other mutual funds sponsored by Goldman
Sachs (the "Goldman Sachs Funds") or ILA Service Units of the Prime Obligations
Portfolio or the Tax-Exempt Diversified Portfolio, if you hold Class A Shares
of a Fund, or ILA Class B or Class C Units of the Prime Obligations Portfolio,
if you hold Class B or Class C Shares of a Fund (the "ILA Portfolios"). For
further information concerning dividends and distributions, see "Dividends."
7
<PAGE>
FEES AND EXPENSES
<TABLE>
<CAPTION>
GROWTH
AND CORE
BALANCED INCOME LARGE CAP
FUND FUND VALUE FUND
----------------------------- ----------------------------- -----------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER
TRANSACTION
EXPENSES:
Maximum Sales
Charge Imposed
on Purchases... 5.5%/1/ none none 5.5%/1/ none none 5.5%/1/ none none
Maximum Sales
Charge Imposed
on Reinvested
Dividends...... none none none none none none none none none
Maximum Deferred
Sales Charge... none/1/ 5.0%/2/ 1.0%/3/ none/1/ 5.0%/2/ 1.0%/3/ none/1/ 5.0%/2/ 1.0%/3/
Redemption
Fees/4/........ none none none none none none none none none
Exchange
Fees/4/........ none none none none none none none none none
ANNUAL FUND
OPERATING
EXPENSES:
(as a percentage
of average daily
net assets)/5/
Management Fees
(after waivers
and
reimbursements)/6/. 0.65% 0.65% 0.65% 0.70% 0.70% 0.70% 0.60% 0.60% 0.60%
Distribution and
Service Fees... 0.25% 1.00% 1.00% 0.25% 1.00% 1.00% 0.25% 1.00% 1.00%
Other Expenses
(after waivers
and
reimbursements)/7/. 0.20% 0.20% 0.20% 0.24% 0.24% 0.24% 0.19% 0.19% 0.19%
---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL FUND
OPERATING
EXPENSES (after
waivers and
reimbursements)/8/. 1.10% 1.85% 1.85% 1.19% 1.94% 1.94% 1.04% 1.79% 1.79%
==== ==== ==== ==== ==== ==== ==== ==== ====
<CAPTION>
CORE U.S. CORE CORE
EQUITY LARGE CAP SMALL CAP
FUND GROWTH FUND EQUITY FUND
-------------------------------- -------------------------------- --------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER
TRANSACTION
EXPENSES:
Maximum Sales
Charge Imposed
on Purchases... 5.5%/1/ none none 5.5%/1/ none none 5.5%/1/ none none
Maximum Sales
Charge Imposed
on Reinvested
Dividends...... none none none none none none none none none
Maximum Deferred
Sales Charge... none/1/ 5.0%/2/ 1.0%/3/ none/1/ 5.0%/2/ 1.0%/3/ none/1/ 5.0%/2/ 1.0%/3/
Redemption
Fees/4/........ none none none none none none none none none
Exchange
Fees/4/........ none none none none none none none none none
ANNUAL FUND
OPERATING
EXPENSES:
(as a percentage
of average daily
net assets)/5/
Management Fees
(after waivers
and
reimbursements)/6/. 0.70% 0.70% 0.70% 0.60% 0.60% 0.60% 0.85% 0.85% 0.85%
Distribution and
Service Fees... 0.25% 1.00% 1.00% 0.25% 1.00% 1.00% 0.25% 1.00% 1.00%
Other Expenses
(after waivers
and
reimbursements)/7/. 0.19% 0.19% 0.19% 0.19% 0.19% 0.19% 0.23% 0.23% 0.23%
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL FUND
OPERATING
EXPENSES (after
waivers and
reimbursements)/8/. 1.14% 1.89% 1.89% 1.04% 1.79% 1.79% 1.33% 2.08% 2.08%
========== ========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
8
<PAGE>
FEES AND EXPENSES (CONTINUED)
<TABLE>
<CAPTION>
SMALL
CAPITAL MID CAP CAP
GROWTH EQUITY VALUE
FUND FUND FUND
----------------------------- ----------------------------- -----------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES:
Maximum Sales Charge
Imposed on Purchases.... 5.5%/1/ none none 5.5%/1/ none none 5.5%/1/ none none
Maximum Sales Charge
Imposed on Reinvested
Dividends............... none none none none none none none none none
Maximum Deferred Sales
Charge.................. none/1/ 5.0%/2/ 1.0%/3/ none/1/ 5.0%/2/ 1.0%/3/ none/1/ 5.0%/2/ 1.0%/3/
Redemption Fees/4/...... none none none none none none none none none
Exchange Fees/4/........ none none none none none none none none none
ANNUAL FUND OPERATING
EXPENSES: (as a
percentage of average
daily net assets)/5/
Management Fees (after
waivers and
reimbursements)......... 1.00% 1.00% 1.00% 0.75% 0.75% 0.75% 1.00% 1.00% 1.00%
Distribution and Service
Fees.................... 0.25% 1.00% 1.00% 0.25% 1.00% 1.00% 0.25% 1.00% 1.00%
Other Expenses (after
waivers and
reimbursements)/7/...... 0.19% 0.19% 0.19% 0.29% 0.29% 0.29% 0.25% 0.25% 0.25%
---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL FUND OPERATING
EXPENSES (after waivers
and reimbursements)/8/... 1.44% 2.19% 2.19% 1.29% 2.04% 2.04% 1.50% 2.25% 2.25%
==== ==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
- ----
/1/ As a percentage of the offering price. No sales charge is imposed on
purchases of Class A Shares by certain classes of investors. A CDSC of
1.00% is imposed on certain redemptions (within 18 months of purchase) of
Class A Shares sold without an initial sales charge as part of an
investment of $1 million or more. See "How to Invest--Offering Price--
Class A Shares."
/2/ A CDSC is imposed upon Shares redeemed within six years of purchase at a
rate of 5% in the first year, declining to 1% in the sixth year, and
eliminated thereafter. See "How to Invest--Offering Price--Class B
Shares."
/3/ A CDSC of 1.00% is imposed on Shares redeemed within 12 months of
purchase. See "How to Invest--Offering Price--Class C Shares."
/4/ A transaction fee of $7.50 may be charged for redemption proceeds paid by
wire. In addition to free reinvestments of dividends and distributions in
Shares of other Goldman Sachs Funds or units of the ILA Portfolios and
free automatic exchanges pursuant to the Automatic Exchange Program, six
free exchanges are permitted in each twelve month period. A fee of $12.50
may be charged for each subsequent exchange during such period. See "How
to Invest--Exchange Privilege."
/5/ The Funds' annual operating expenses have been restated to reflect fees
and expenses in effect as of September 1, 1998, except for the CORE Large
Cap Value Fund which are based on estimated amounts for the current fiscal
year.
/6/ The Investment Adviser has voluntarily agreed not to impose a portion of
the management fee on the CORE U.S. Equity and CORE Large Cap Growth Funds
equal to 0.05% and 0.15%, respectively. Without such limitations,
management fees would be 0.75% of each Fund's average daily net assets.
/7/ The Investment Adviser has voluntarily agreed to reduce or limit certain
other expenses (excluding management, distribution and service fees,
transfer agency fees (equal to 0.19% of the average daily net assets of
each Fund's Class A, B and C Shares), taxes, interest and brokerage fees
and litigation, indemnification and other extraordinary expenses) for each
Fund to the extent such expenses exceed the following percentages of
average daily net assets:
<TABLE>
<CAPTION>
OTHER
EXPENSES
--------
<S> <C>
Balanced......................................................... 0.01%
Growth and Income................................................ 0.05%
CORE Large Cap Value............................................. 0.00%
CORE U.S. Equity................................................. 0.00%
CORE Large Cap Growth............................................ 0.00%
CORE Small Cap Equity............................................ 0.04%
Capital Growth................................................... 0.00%
Mid Cap Equity................................................... 0.10%
Small Cap Value.................................................. 0.06%
</TABLE>
9
<PAGE>
/8/ Without the limitations described above, "Other Expenses" and "Total
Operating Expenses" of the Funds would be as set forth below:
<TABLE>
<CAPTION>
TOTAL
OTHER OPERATING
EXPENSES EXPENSES
-------- ---------
<S> <C> <C>
Balanced
Class A.............................................. 0.43% 1.33%
Class B.............................................. 0.43% 2.08%
Class C.............................................. 0.43% 2.08%
Growth and Income
Class A.............................................. 0.27% 1.22%
Class B.............................................. 0.27% 1.97%
Class C.............................................. 0.27% 1.97%
CORE Large Cap Value
Class A.............................................. 0.71% 1.56%
Class B.............................................. 0.71% 2.31%
Class C.............................................. 0.71% 2.31%
CORE U.S. Equity
Class A.............................................. 0.27% 1.27%
Class B.............................................. 0.27% 2.02%
Class C.............................................. 0.27% 2.02%
CORE Large Cap Growth
Class A.............................................. 0.37% 1.37%
Class B.............................................. 0.37% 2.12%
Class C.............................................. 0.37% 2.12%
CORE Small Cap Equity
Class A.............................................. 0.63% 1.73%
Class B.............................................. 0.63% 2.48%
Class C.............................................. 0.63% 2.48%
Capital Growth
Class A.............................................. 0.25% 1.50%
Class B.............................................. 0.25% 2.25%
Class C.............................................. 0.25% 2.25%
Mid Cap Equity
Class A.............................................. 0.31% 1.31%
Class B.............................................. 0.31% 2.06%
Class C.............................................. 0.31% 2.06%
Small Cap Value
Class A.............................................. 0.28% 1.53%
Class B.............................................. 0.28% 2.28%
Class C.............................................. 0.28% 2.28%
</TABLE>
EXAMPLE
You would pay the following expenses on a hypothetical $1,000 investment
(including the maximum sales charge) assuming (i) a 5% annual return; and (ii)
redemption at the end of each time period.
<TABLE>
<CAPTION>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Balanced Fund
Class A Shares................................ $66 $88 $112 $182
Class B Shares
--Assuming complete redemption at end of peri-
od........................................... 66 86 119 197
--Assuming no redemption...................... 19 58 100 197
Class C Shares
--Assuming complete redemption at end of peri-
od........................................... 28 58 100 217
--Assuming no redemption...................... 19 58 100 217
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Growth and Income Fund
Class A Shares................................ $66 $91 $117 $191
Class B Shares
--Assuming complete redemption at end of
period....................................... 67 89 124 207
--Assuming no redemption...................... 20 61 105 207
Class C Shares
--Assuming complete redemption at end of
period....................................... 29 61 105 226
--Assuming no redemption...................... 20 61 105 226
CORE Large Cap Value
Class A Shares................................ 65 86 109 175
Class B Shares
--Assuming complete redemption at end of
period....................................... 65 84 116 191
--Assuming no redemption...................... 18 56 97 191
Class C Shares
--Assuming complete redemption at end of peri-
od........................................... 27 56 97 211
--Assuming no redemption...................... 18 56 97 211
CORE U.S. Equity Fund
Class A Shares................................ 66 89 114 186
Class B Shares
--Assuming complete redemption at end of
period....................................... 66 87 121 201
--Assuming no redemption...................... 19 59 102 201
Class C Shares
--Assuming complete redemption at end of
period....................................... 28 59 102 221
--Assuming no redemption...................... 19 59 102 221
CORE Large Cap Growth Fund
Class A Shares................................ 65 86 109 175
Class B Shares
--Assuming complete redemption at end of
period....................................... 65 84 116 191
--Assuming no redemption...................... 18 56 97 191
Class C Shares
--Assuming complete redemption at end of
period....................................... 27 56 97 211
--Assuming no redemption...................... 18 56 97 211
CORE Small Cap Equity Fund
Class A Shares................................ 68 95 124 206
Class B Shares
--Assuming complete redemption at end of
period....................................... 68 93 131 222
--Assuming no redemption...................... 21 65 112 222
Class C Shares
--Assuming complete redemption at end of
period....................................... 30 65 112 241
--Assuming no redemption...................... 21 65 112 241
Capital Growth Fund
Class A Shares................................ 69 98 129 218
Class B Shares
--Assuming complete redemption at end of
period....................................... 69 97 136 233
--Assuming no redemption...................... 22 69 117 233
Class C Shares
--Assuming complete redemption at end of
period....................................... 31 69 117 252
--Assuming no redemption...................... 22 69 117 252
Mid Cap Equity Fund
Class A Shares................................ 68 92 129 218
Class B Shares
--Assuming complete redemption at end of
period....................................... 68 92 129 218
--Assuming no redemption...................... 21 64 110 218
Class C Shares
--Assuming complete redemption at end of
period....................................... 30 64 110 237
--Assuming no redemption...................... 21 64 110 237
Small Cap Value Fund
Class A Shares................................ 69 100 132 224
Class B Shares
--Assuming complete redemption at end of
period....................................... 70 98 139 240
--Assuming no redemption...................... 23 70 120 240
Class C Shares
--Assuming complete redemption at end of
period....................................... 32 70 120 258
--Assuming no redemption...................... 23 70 120 258
</TABLE>
11
<PAGE>
The hypothetical example assumes that a CDSC will not apply to redemptions
of Class A Shares within the first 18 months. Class B Shares convert to Class
A Shares eight years after purchase; therefore, Class A expenses are used in
the hypothetical example after year eight.
The Investment Adviser and Goldman Sachs may modify or discontinue any of
the limitations set forth above in the future at their discretion. The
information set forth in the foregoing table and hypothetical example relates
only to Class A, B and C Shares. Each Fund also offers Institutional and
Service Shares, which are subject to different fees and expenses (which affect
performance), have different minimum investment requirements and are entitled
to different services than Class A, Class B and Class C Shares. Information
regarding Institutional and Service Shares may be obtained from your sales
representative or from Goldman Sachs by calling the number on the back cover
page of this Prospectus. Because of the Distribution and Service Plans, long-
term shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the NASD's rules regarding investment
companies.
In addition to the compensation itemized above, certain institutions that
sell Fund Shares and/or their salespersons may receive other compensation in
connection with the sale and distribution of Class A, Class B and Class C
Shares of the Funds or for services to their customers' accounts and/or the
Funds. For additional information regarding such compensation, see
"Management" and "Services Available to Shareholders" in this Prospectus and
"Other Information Regarding Purchases, Redemptions, Exchanges and Dividends"
in the Additional Statement.
The purpose of the foregoing table is to assist investors in understanding
the various fees and expenses of a Fund that an investor will bear directly or
indirectly. The information on the fees and expenses included in the table and
hypothetical example above are based on each Fund's fees and expenses (actual
or estimated) and should not be considered as representative of past or future
expenses. Actual fees and expenses may be greater or less than those
indicated. Moreover, while the example assumes a 5% annual return, a Fund's
actual performance will vary and may result in an actual return greater or
less than 5%. See "Management--Investment Advisers."
12
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The following data for the years and periods ended on or before January 31,
1998 have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report incorporated by reference into the Additional
Statement from the Annual Report to shareholders of the Funds for the year
ended January 31, 1998 (the "Annual Report"). This information should be read
in conjunction with the financial statements and related notes incorporated by
reference and attached to the Additional Statement. The Annual Report also
contains performance information and is available upon request and without
charge by calling the telephone number or writing to one of the addresses on
the back cover of this Prospectus. Information for the period ended July 31,
1998 has not been audited. During the periods shown, the Trust did not offer
Shares of the CORE Large Cap Value Fund. Accordingly, there are no financial
highlights for this Fund.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------- -------------------------------------------------
NET REALIZED
AND UNREALIZED
GAIN (LOSS) ON
INVESTMENT, IN EXCESS OF
FUTURES AND FROM NET NET REALIZED
NET ASSET FOREIGN FROM IN EXCESS REALIZED GAIN GAIN ON
VALUE, NET CURRENCY NET OF NET ON INVESTMENT INVESTMENT
BEGINNING INVESTMENT RELATED INVESTMENT INVESTMENT AND FUTURES AND FUTURES
OF PERIOD INCOME TRANSACTIONS INCOME INCOME TRANSACTIONS TRANSACTIONS
--------- ---------- -------------- ---------- ---------- ------------- -------------
BALANCED FUND
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $20.29 $0.29 $(0.21) $(0.28) $ -- $ -- $ --
1998--Class B
Shares.......... 20.20 0.20 (0.20) (0.21) -- -- --
1998--Class C
Shares.......... 20.17 0.20 (0.21) (0.21) -- -- --
1998--Institu-
tional Shares... 20.29 0.32 (0.21) (0.31) -- -- --
1998--Service
Shares.......... 20.28 0.26 (0.21) (0.25) -- -- --
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 18.78 0.57 2.66 (0.56) -- (1.16) --
1998--Class B
Shares.......... 18.73 0.50 2.57 (0.42) (0.02) (1.16) --
1998--Class C
Shares(b)....... 21.10 0.25 0.24 (0.22) (0.04) (0.64) (0.52)
1998--Institu-
tional
Shares(b)....... 21.18 0.26 0.32 (0.23) (0.08) (0.45) (0.71)
1998--Service
Shares(b)....... 21.18 0.22 0.32 (0.22) (0.06) (0.72) (0.44)
- ------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 17.31 0.66 2.47 (0.66) -- (1.00) --
1997--Class B
Shares(b)....... 17.46 0.42 2.34 (0.42) (0.07) (1.00) --
- ------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 14.22 0.51 3.43 (0.50) -- (0.35) --
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1995--Class A
Shares(b)....... 14.18 0.10 0.02 (0.08) -- -- --
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
-------------------------
RATIO OF RATIO OF
NET NET RATIO OF NET NET
INCREASE NET ASSET ASSETS AT NET INVESTMENT RATIO OF INVESTMENT
(DECREASE) VALUE, PORTFOLIO END OF EXPENSES TO INCOME TO EXPENSES INCOME (LOSS)
IN NET END OF TOTAL TURNOVER PERIOD AVERAGE NET AVERAGE NET TO AVERAGE TO AVERAGE
ASSET VALUE PERIOD RETURN(A) RATE(F) (IN 000'S) ASSETS ASSETS NET ASSETS NET ASSETS
----------- --------- ----------- ------------ ---------- ------------ ------------ ----------- -------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $(0.20) $20.09 0.34%(d) 69.31%(d) $191,408 1.00%(c) 2.86%(c) 1.45%(c) 2.41%(c)
1998--Class B
Shares.......... (0.21) 19.99 (0.04)(d) 69.31(d) 38,923 1.75(c) 2.11(c) 1.95(c) 1.91(c)
1998--Class C
Shares.......... (0.22) 19.95 (0.08)(d) 69.31(d) 15,693 1.75(c) 2.12(c) 1.95(c) 1.92(c)
1998--Institu-
tional Shares... (0.20) 20.09 0.45(d) 69.31(d) 8,646 0.75(c) 3.11(c) 0.95(c) 2.91(c)
1998--Service
Shares.......... (0.20) 20.08 0.26(d) 69.31(d) 447 1.25(c) 2.51(c) 1.45(c) 2.31(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 1.51 20.29 17.54 190.43 163,636 1.00 2.94 1.57 2.37
1998--Class B
Shares.......... 1.47 20.20 16.71 190.43 23,639 1.76 2.14 2.07 1.83
1998--Class C
Shares(b)....... (0.93) 20.17 2.49(d) 190.43 8,850 1.77(c) 2.13(c) 2.08(c) 1.82(c)
1998--Institu-
tional
Shares(b)....... (0.89) 20.29 2.93(d) 190.43 8,367 0.76(c) 3.13(c) 1.07(c) 2.82(c)
1998--Service
Shares(b)....... (0.90) 20.28 2.66(d) 190.43 16 1.26(c) 2.58(c) 1.57(c) 2.27(c)
- ------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 1.47 18.78 18.59 208.11 81,410 1.00 3.76 1.77 2.99
1997--Class B
Shares(b)....... 1.27 18.73 16.22(d) 208.11 2,110 1.75(c) 2.59(c) 2.27(c) 2.07(c)
- ------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 3.09 17.31 28.10 197.10 50,928 1.00 3.65 1.90 2.75
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1995--Class A
Shares(b)....... 0.04 14.22 0.87(d) 14.71 7,510 1.00(c) 3.39(c) 8.29(c) (3.90)(c)
</TABLE>
- -------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period,
reinvestments of all dividends and distributions, a complete redemption of
the investment at the NAV at the end of the period and no sales or
redemption charges. Total return would be reduced if a sales or redemption
charge were taken into account.
(b) Class A and Class B Share activity commenced on October 12, 1994 and May
1, 1996, respectively. Class C, Institutional and Service Share activity
commenced on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
(f) Includes the effects of mortgage dollar roll transactions.
13
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
-------------------------- ------------------------------------------------
NET IN EXCESS OF
REALIZED AND FROM NET NET REALIZED
NET ASSET NET UNREALIZED FROM IN EXCESS REALIZED GAIN GAIN ON
VALUE, INVESTMENT GAIN (LOSS) ON NET OF NET ON INVESTMENT INVESTMENT ADDITIONAL
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES PAID-IN
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS CAPITAL
--------- ---------- -------------- ---------- ---------- ------------- ------------ ----------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTH ENDED JULY 31 (UNAUDITED),
- --------------------------------------------
1998--Class A
Shares.......... $25.93 $0.09 $(0.41) $(0.08) $ -- $ -- $ -- $ --
1998--Class B
Shares.......... 25.73 -- (0.41) -- -- -- -- --
1998--Class C
Shares.......... 25.70 0.01 (0.43) (0.01) -- -- -- --
1998--Institu-
tional Shares... 25.95 0.13 (0.40) (0.13) -- -- -- --
1998--Service
Shares.......... 25.92 0.07 (0.39) (0.07) -- -- -- --
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 23.18 0.11 5.27 (0.11) -- (2.52) -- --
1998--Class B
Shares.......... 23.10 0.04 5.14 -- (0.03) (2.45) (0.07) --
1998--Class C
Shares(b)....... 28.20 (0.01) 0.06 -- (0.03) (1.42) (1.10) --
1998--
Institutional
Shares.......... 23.19 0.27 5.23 (0.22) -- (0.24) (2.28) --
1998--Service
Shares.......... 23.17 0.14 5.23 (0.06) (0.04) (2.52) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 19.98 0.35 5.18 (0.35) (0.01) (1.97) -- --
1997--Class B
Shares(b)....... 20.82 0.17 4.31 (0.17) (0.06) (1.97) -- --
1997--Institu-
tional
Shares(b)....... 21.25 0.29 3.96 (0.30) (0.04) (1.97) -- --
1997--Service
Shares(b)....... 20.71 0.28 4.50 (0.28) (0.07) (1.97) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 15.80 0.33 4.75 (0.30) -- (0.60) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.79 0.20(f) 0.30(f) (0.20) (0.07) (0.33) -- 0.11(f)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1994--Class A
Shares(b)....... 14.18 0.15 1.68 (0.15) (0.01) (0.06) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
--------------------------
RATIO
OF NET RATIO
NET NET RATIO INVESTMENT OF NET
INCREASE NET ASSET ASSETS AT OF NET INCOME (LOSS) RATIO INVESTMENT
(DECREASE) VALUE, PORTFOLIO END OF EXPENSES TO TO AVERAGE OF EXPENSES INCOME (LOSS)
IN NET END OF TOTAL TURNOVER PERIOD AVERAGE NET NET TO AVERAGE TO AVERAGE
ASSET VALUE PERIOD RETURN(A) RATE (IN 000S) ASSETS ASSETS NET ASSETS NET ASSETS
----------- --------- ------------ ------------ ---------- ------------ ------------- ------------ -------------
GROWTH AND INCOME FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTH ENDED JULY 31 (UNAUDITED),
- --------------------------------------------
1998--Class A
Shares.......... $(0.40) $25.53 (1.26)%(d) 37.78%(d) $1,356,662 1.22%(c) 0.64%(c) 1.38%(c) 0.48%(c)
1998--Class B
Shares.......... (0.41) 25.32 (1.59)(d) 37.78(d) 416,520 1.88(c) (0.03)(c) 1.88(c) (0.03)(c)
1998--Class C
Shares.......... (0.43) 25.27 (1.63)(d) 37.78(d) 63,080 1.88(c) (0.03)(c) 1.88(c) (0.03)(c)
1998--Institu-
tional Shares... (0.40) 25.55 (1.07)(d) 37.78(d) 192,094 0.80(c) 1.06(c) 0.80(c) 1.06(c)
1998--Service
Shares.......... (0.39) 25.53 (1.26)(d) 37.78(d) 12,338 1.30(c) 0.57(c) 1.30(c) 0.57(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 2.75 25.93 23.71 61.95 1,216,582 1.25 0.43 1.42 0.26
1998--Class B
Shares.......... 2.63 25.73 22.87 61.95 307,815 1.94 (0.35) 1.94 (0.35)
1998--Class C
Shares(b)....... (2.50) 25.70 0.51(d) 61.95 31,686 1.99(c) (0.48)(c) 1.99(c) (0.48)(c)
1998--
Institutional
Shares.......... 2.76 25.95 24.24 61.95 36.225 0.83 0.76 0.83 0.76
1998--Service
Shares.......... 2.75 25.92 23.63 61.95 8,893 1.32 0.32 1.32 0.32
- -----------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 3.20 23.18 28.42 53.03 615,103 1.22 1.60 1.43 1.39
1997--Class B
Shares(b)....... 2.28 23.10 22.23(d) 53.03 17,346 1.93(c) 0.15(c) 1.93(c) 0.15(c)
1997--Institu-
tional
Shares(b)....... 1.94 23.19 20.77(d) 53.03 193 0.82(c) 1.36(c) 0.82(c) 1.36(c)
1997--Service
Shares(b)....... 2.46 23.17 23.87(d) 53.03 3,174 1.32(c) 0.94(c) 1.32(c) 0.94(c)
- -----------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 4.18 19.98 32.45 57.93 436,757 1.20 1.67 1.45 1.42
- -----------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 0.01 15.80 3.97 71.80 193,772 1.25 1.28 1.58 0.95
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1994--Class A
Shares(b)....... 1.61 15.79 13.08(d) 102.23 41,528 1.25(c) 1.23(c) 3.24(c) (0.76)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on February 5, 1993, May 1, 1996, August 15, 1997, June 3, 1996
and March 6, 1996, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
(f) Calculated based on the average Shares outstanding methodology.
14
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM DISTRIBUTIONS TO
INVESTMENT OPERATIONS(E) SHAREHOLDERS
------------------------- -----------------------------------------------
FROM NET IN EXCESS OF NET
NET REALIZED REALIZED NET REALIZED INCREASE/ NET
NET ASSET NET AND UNREALIZED IN EXCESS GAIN ON GAIN ON (DECREASE) ASSET
VALUE, INVESTMENT GAIN (LOSS) ON FROM NET OF NET INVESTMENT INVESTMENT IN NET VALUE,
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES ASSET END OF TOTAL
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS VALUE PERIOD RETURN(A)
--------- ---------- -------------- ---------- ---------- ------------ ------------ ---------- ------ ---------
CORE U.S. EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $26.59 $0.03 $3.61 $ -- $ -- $ -- $ -- $3.64 $30.23 13.69%(d)
1998--Class B
Shares.......... 26.32 (0.04) 3.58 -- -- -- -- 3.54 29.86 13.45(d)
1998--Class C
Shares.......... 26.24 (0.04) 3.56 -- -- -- -- 3.52 29.76 13.41(d)
1998--Institu-
tional Shares... 26.79 0.10 3.66 -- -- -- -- 3.76 30.55 14.04(d)
1998--Service
Shares.......... 26.53 0.05 3.60 -- -- -- -- 3.65 30.18 13.76(d)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 23.32 0.11 5.63 (0.12) -- (2.35) -- 3.27 26.59 24.96
1998--Class B
Shares.......... 23.18 0.11 5.44 -- (0.06) (2.00) (0.35) 3.14 26.32 24.28
1998--Class C
Shares(b)....... 27.48 0.03 1.22 -- (0.14) (0.67) (1.68) (1.24) 26.24 4.85(d)
1998--Institu-
tional Shares... 23.44 0.30 5.65 (0.24) (0.01) (1.33) (1.02) 3.35 26.79 25.76
1998--Service
Shares.......... 23.27 0.19 5.57 (0.07) (0.08) (2.35) -- 3.26 26.53 25.11
- ----------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 19.66 0.16 4.46 (0.16) -- (0.80) -- 3.66 23.32 23.75
1997--Class B
Shares(b)....... 20.44 0.04 3.70 (0.04) (0.16) (0.80) -- 2.74 23.18 18.59(d)
1997--Institu-
tional Shares... 19.71 0.30 4.51 (0.28) -- (0.80) -- 3.73 23.44 24.63
1997--Service
Shares(b)....... 21.02 0.13 3.15 (0.13) (0.10) (0.80) -- 2.25 23.27 15.92(d)
- ----------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 14.61 0.19 5.43 (0.16) -- (0.41) -- 5.05 19.66 38.63
1996--Institu-
tional
Shares(b)....... 16.97 0.16 3.23 (0.24) -- (0.41) -- 2.74 19.71 20.14(d)
- ----------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.93 0.20 (0.38) (0.20) -- (0.94) -- (1.32) 14.61 (1.10)
- ----------------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 15.46 0.17 2.08 (0.17) -- (1.61) -- 0.47 15.93 15.12
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
-----------------------
RATIO OF RATIO OF RATIO OF
NET NET RATIO OF NET
NET EXPENSES INVESTMENT EXPENSES INVESTMENT
ASSETS AT TO INCOME TO INCOME
PORTFOLIO END OF AVERAGE (LOSS) TO AVERAGE (LOSS) TO
TURNOVER PERIOD NET AVERAGE NET AVERAGE
RATE (IN 000S) ASSETS NET ASSETS ASSETS NET ASSETS
----------- --------- ---------- ------------ ---------- ------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 22.52%(d) $527,753 1.26%(c) 0.23%(c) 1.43%(c) 0.06%(c)
1998--Class B
Shares.......... 22.52(d) 102,565 1.76(c) (0.29)(c) 1.93(c) (0.46)(c)
1998--Class C
Shares.......... 22.52(d) 15,316 1.76(c) (0.32)(c) 1.93(c) (0.49)(c)
1998--Institu-
tional Shares... 22.52(d) 298,853 0.65(c) 0.83(c) 0.82(c) 0.66(c)
1998--Service
Shares.......... 22.52(d) 10,388 1.15(c) 0.33(c) 1.32(c) 0.16(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 65.89 398,393 1.28 0.51 1.47 0.32
1998--Class B
Shares.......... 65.89 59,208 1.79 (0.05) 1.96 (0.22)
1998--Class C
Shares(b)....... 65.89 6,267 1.78(c) (0.21)(c) 1.95(c) (0.38)(c)
1998--Institu-
tional Shares... 65.89 202,893 0.65 1.16 0.82 0.99
1998--Service
Shares.......... 65.89 7,841 1.15 0.62 1.32 0.45
- ----------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 37.78 225,968 1.29 0.91 1.53 0.67
1997--Class B
Shares(b)....... 37.28 17,258 1.83(c) 0.06(c) 2.00(c) (0.11)(c)
1997--Institu-
tional Shares... 37.28 148,942 0.65 1.52 0.85 1.32
1997--Service
Shares(b)....... 37.28 3,666 1.15(c) 0.69(c) 1.35(c) 0.49(c)
- ----------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 39.35 129,045 1.25 1.01 1.55 0.71
1996--Institu-
tional
Shares(b)....... 39.35 64,829 0.65(c) 1.49(c) 0.96(c) 1.18(c)
- ----------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 56.18 94,968 1.38 1.33 1.63 1.08
- ----------------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 87.73 92,769 1.42 0.92 1.67 0.67
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class B, Class C, Institutional and Service Share activity commenced on May
1, 1996, August 15, 1997, June 15, 1995 and June 7, 1996, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
15
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM DISTRIBUTIONS TO
INVESTMENT OPERATIONS(E) SHAREHOLDERS
------------------------- -----------------------------------------------
NET FROM NET IN EXCESS OF
REALIZED AND REALIZED NET REALIZED
NET ASSET NET UNREALIZED FROM IN EXCESS GAIN ON GAIN ON NET NET ASSET
VALUE, INVESTMENT GAIN (LOSS) ON NET OF NET INVESTMENT INVESTMENT INCREASE VALUE,
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES IN NET END OF
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS ASSET VALUE PERIOD
--------- ---------- -------------- ---------- ---------- ------------ ------------ ----------- ---------
CORE LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $11.97 $0.01 $1.97 $ -- $ -- $ -- $ -- $1.98 $13.95
1998--Class B
Shares.......... 11.92 (0.02) 1.95 -- -- -- -- 1.93 13.85
1998--Class C
Shares.......... 11.93 (0.02) 1.93 -- -- -- -- 1.91 13.84
1998--Institu-
tional Shares... 11.97 0.01 1.99 -- -- -- -- 2.00 13.97
1998--Service
Shares.......... 11.95 -- 1.96 -- -- -- -- 1.96 13.91
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1998--Class A
Shares(b)....... 10.00 0.01 2.35 (0.01) -- (0.32) (0.06) 1.97 11.97
1998--Class B
Shares(b)....... 10.00 (0.03) 2.33 -- -- (0.18) (0.20) 1.92 11.92
1998--Class C
Shares(b)....... 11.80 (0.02) 0.54 -- (0.01) (0.38) -- 0.13 11.93
1998--Institu-
tional
Shares(b)....... 10.00 0.01 2.35 (0.01) -- (0.19) (0.19) 1.97 11.97
1998--Service
Shares(b)....... 10.00 (0.02) 2.35 -- -- (0.08) (0.30) 1.95 11.95
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER OF FEES
OR EXPENSE LIMITATIONS
----------------------------------------
RATIO
NET RATIO RATIO OF NET OF NET
ASSETS AT OF NET INVESTMENT RATIO OF INVESTMENT
PORTFOLIO END OF EXPENSES INCOME (LOSS) EXPENSES TO (LOSS) TO
TOTAL TURNOVER PERIOD TO AVERAGE TO AVERAGE NET AVERAGE NET AVERAGE
RETURN(A) RATE (IN 000'S) NET ASSETS ASSETS ASSETS NET ASSETS
----------- ----------- ---------- ----------- -------------- ------------------- --------------------
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 16.54%(d) 45.79%(d) $116,939 0.90%(c) 0.19%(c) 1.61%(c) (0.52)%(c)
1998--Class B
Shares.......... 16.19(d) 45.79(d) 49,881 1.65(c) (0.56)(c) 2.11(c) (1.02)(c)
1998--Class C
Shares.......... 16.01(d) 45.79(d) 15,724 1.65(c) (0.57)(c) 2.11(c) (1.03)(c)
1998--Institu-
tional Shares... 16.71(d) 45.79(d) 135,153 0.65(c) 0.42 (c) 1.11(c) (0.04)(c)
1998--Service
Shares.......... 16.40(d) 45.79(d) 507 1.15(c) (0.04)(c) 1.61(c) (0.50)(c)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1998--Class A
Shares(b)....... 23.79(d) 74.97(d) 53,786 0.91(c) 0.12 (c) 2.40(c) (1.37)(c)
1998--Class B
Shares(b)....... 23.26(d) 74.97(d) 13,857 1.67(c) (0.72)(c) 2.91(c) (1.96)(c)
1998--Class C
Shares(b)....... 4.56(d) 74.97(d) 4,132 1.68(c) (0.76)(c) 2.92(c) (2.00)(c)
1998--Institu-
tional
Shares(b)....... 23.89(d) 74.97(d) 4,656 0.72(c) 0.42 (c) 1.96(c) (0.82)(c)
1998--Service
Shares(b)....... 23.56(d) 74.97(d) 115 1.17(c) (0.21)(c) 2.41(c) (1.45)(c)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class A, Class B, Institutional and Service Share activity commenced on
May 1, 1997. Class C Share activity commenced on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
16
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM DISTRIBUTIONS TO
INVESTMENT OPERATIONS(E) SHAREHOLDERS
------------------------- -----------------------
NET
REALIZED AND FROM NET
UNREALIZED REALIZED
NET ASSET NET GAIN (LOSS) ON FROM GAIN ON NET NET ASSET
VALUE, INVESTMENT INVESTMENT AND NET INVESTMENT INCREASE VALUE, PORTFOLIO
BEGINNING INCOME FUTURES INVESTMENT AND FUTURES IN NET END OF TOTAL TURNOVER
OF PERIOD (LOSS) TRANSACTIONS INCOME TRANSACTIONS ASSET VALUE PERIOD RETURN(A) RATE
--------- ---------- -------------- ---------- ------------ ----------- --------- --------- ---------
CORE SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $10.59 $ -- $0.11 $ -- $ -- $0.11 $10.70 1.04%(d) 16.06%(d)
1998--Class B
Shares.......... 10.56 (0.03) 0.10 -- -- 0.07 10.63 0.66(d) 16.06(d)
1998--Class C
Shares.......... 10.57 (0.03) 0.10 -- -- 0.07 10.64 0.66(d) 16.06(d)
1998--Institu-
tional Shares... 10.61 0.02 0.10 -- -- 0.12 10.73 1.13(d) 16.06(d)
1998--Service
Shares.......... 10.60 (0.01) 0.11 -- -- 0.10 10.70 0.94(d) 16.06(d)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1998--Class A
Shares(b)....... 10.00 (0.01) 0.65 -- (0.05) 0.59 10.59 6.37(d) 37.65(d)
1998--Class B
Shares(b)....... 10.00 (0.03) 0.64 -- (0.05) 0.56 10.56 6.07(d) 37.65(d)
1998--Class C
Shares(b)....... 10.00 (0.02) 0.64 -- (0.05) 0.57 10.57 6.17(d) 37.65(d)
1998--Institu-
tional
Shares(b)....... 10.00 0.01 0.65 -- (0.05) 0.61 10.61 6.57(d) 37.65(d)
1998--Service
Shares(b)....... 10.00 0.01 0.64 -- (0.05) 0.60 10.60 6.47(d) 37.65(d)
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER OF FEES
OR EXPENSE LIMITATIONS
---------------------------
RATIO
NET RATIO RATIO OF NET OF NET
ASSETS AT OF NET INVESTMENT RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS) EXPENSES TO INCOME (LOSS)
PERIOD TO AVERAGE TO AVERAGE AVERAGE NET TO AVERAGE
(IN 000S) NET ASSETS NET ASSETS ASSETS NET ASSETS
--------- ----------- ------------- ------------ --------------
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $20,989 1.25%(c) 0.07%(c) 2.14%(c) (0.82)%(c)
1998--Class B
Shares.......... 14,843 1.95(c) (0.62)(c) 2.64(c) (1.31)(c)
1998--Class C
Shares.......... 4,433 1.95(c) (0.62)(c) 2.64(c) (1.31)(c)
1998--Institu-
tional Shares... 44,614 0.95(c) 0.46(c) 1.64(c) (0.23)(c)
1998--Service
Shares.......... 22 1.45(c) (0.40)(c) 2.14(c) (1.09)(c)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1998--Class A
Shares(b)....... 11,118 1.25(c) (0.36)(c) 3.92(c) (3.03)(c)
1998--Class B
Shares(b)....... 9,957 1.95(c) (1.04)(c) 4.37(c) (3.46)(c)
1998--Class C
Shares(b)....... 2,557 1.95(c) (1.07)(c) 4.37(c) (3.49)(c)
1998--Institu-
tional
Shares(b)....... 9,026 0.95(c) 0.15 (c) 3.37(c) (2.27)(c)
1998--Service
Shares(b)....... 2 1.45(c) 0.40 (c) 3.87(c) (2.02)(c)
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Commenced operations on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
17
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------- -----------------------------------------------
NET FROM NET IN EXCESS OF NET
NET ASSET NET REALIZED AND FROM IN EXCESS REALIZED NET REALIZED INCREASE NET ASSET
VALUE, INVESTMENT UNREALIZED NET OF NET GAIN ON GAIN ON (DECREASE) VALUE,
BEGINNING INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT INVESTMENT IN NET END OF
OF PERIOD (LOSS) INVESTMENTS INCOME INCOME TRANSACTIONS TRANSACTIONS ASSET VALUE PERIOD
--------- ---------- -------------- ---------- ---------- ------------ ------------ ----------- ---------
CAPITAL GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $18.48 $(0.01) $ 3.32 $ -- $ -- $ -- $ -- $ 3.31 $21.79
1998--Class B
Shares.......... 18.27 (0.06) 3.26 -- -- -- -- 3.20 21.47
1998--Class C
Shares.......... 18.24 (0.05) 3.23 -- -- -- -- 3.18 21.42
1998--Institu-
tional Shares... 18.45 0.01 3.32 -- -- -- -- 3.33 21.78
1998--Service
Shares.......... 18.46 (0.02) 3.30 -- -- -- -- 3.28 21.74
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 16.73 0.02 4.78 (0.01) (0.01) (3.03) -- 1.75 18.48
1998--Class B
Shares.......... 16.67 0.02 4.61 -- -- (1.20) (1.83) 1.60 18.27
1998--Class C
Shares(b)....... 19.73 (0.02) 1.60 -- (0.04) (0.47) (2.56) (1.49) 18.24
1998--Institu-
tional
Shares(b)....... 19.88 0.02 1.66 (0.01) (0.07) (0.41) (2.62) (1.43) 18.45
1998--Service
Shares(b)....... 19.88 (0.01) 1.66 -- (0.04) (0.76) (2.27) (1.42) 18.46
- --------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 14.91 0.10 3.56 (0.10) (0.02) (1.72) -- 1.82 16.73
1997--Class B
Shares(b)....... 15.67 0.01 2.81 (0.01) (0.09) (1.72) -- 1.00 16.67
- --------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 13.67 0.12 3.93 (0.12) -- (2.69) -- 1.24 14.91
- --------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.96 0.03 (0.69) (0.01) -- (1.62) -- (2.29) 13.67
- --------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 14.64 0.02 2.40 (0.01) (0.02) (1.07) -- 1.32 15.96
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER OF FEES
---------------------------
RATIO
NET RATIO RATIO OF NET OF NET
ASSETS AT OF NET INVESTMENT RATIO OF INVESTMENT
PORTFOLIO END OF EXPENSES INCOME (LOSS) TO EXPENSES TO INCOME (LOSS)
TOTAL TURNOVER PERIOD TO AVERAGE AVERAGE NET AVERAGE NET TO AVERAGE
RETURN(A) RATE (IN 000S) NET ASSETS ASSETS ASSETS NET ASSETS
----------- ----------- ---------- ----------- ---------------- ------------ --------------
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... 17.91%(d) 10.02%(d) $1,639,118 1.39%(c) (0.12)%(c) 1.64%(c) (0.37)%(c)
1998--Class B
Shares.......... 17.52(d) 10.02(d) 125,092 2.14(c) (0.92)(c) 2.14(c) (0.92)(c)
1998--Class C
Shares.......... 17.43(d) 10.02(d) 27,385 2.14(c) (0.94)(c) 2.14(c) (0.94)(c)
1998--Institu-
tional Shares... 18.05(d) 10.02(d) 15,248 1.10(c) 0.11 (c) 1.10(c) 0.11 (c)
1998--Service
Shares.......... 17.77(d) 10.02(d) 1,222 1.60(c) (0.44)(c) 1.60(c) (0.44)(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 29.71 61.50 1,256,595 1.40 0.08 1.65 (0.17)
1998--Class B
Shares.......... 28.73 61.50 40,827 2.18 (0.77) 2.18 (0.77)
1998--Class C
Shares(b)....... 8.83(d) 61.50 5,395 2.21(c) (0.86)(c) 2.21(c) (0.86)(c)
1998--Institu-
tional
Shares(b)....... 9.31(d) 61.50 7,262 1.16(c) 0.18 (c) 1.16(c) 0.18 (c)
1998--Service
Shares(b)....... 9.18(d) 61.50 2 1.50(c) (0.16)(c) 1.50(c) (0.16)(c)
- --------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 25.97 52.92 920,646 1.40 0.62 1.65 0.37
1997--Class B
Shares(b)....... 19.39(d) 52.92 3,221 2.15(c) (0.39)(c) 2.15(c) (0.39)(c)
- --------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 30.45 63.90 881,056 1.36 0.65 1.61 0.40
- --------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... (4.38) 38.36 862,105 1.38 0.16 1.63 (0.09)
- --------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 16.89 36.12 833,682 1.38 0.13 1.63 (0.12)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class B, Class C, Institutional and Service Share activity commenced on May
1, 1996, August 15, 1997, August 15, 1997 and August 15, 1997,
respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
18
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
--------------------------- ---------------------------------------------
NET REALIZED
AND UNREALIZED
GAIN (LOSS) ON NET
INVESTMENTS, FROM NET INCREASE NET
NET ASSET NET OPTIONS AND IN EXCESS REALIZED (DECREASE) ASSET
VALUE, INVESTMENT FOREIGN CURRENCY FROM NET OF NET GAIN ON IN NET VALUE,
BEGINNING INCOME RELATED INVESTMENT INVESTMENT INVESTMENT ASSET END OF TOTAL
OF PERIOD (LOSS) TRANSACTIONS INCOME INCOME TRANSACTIONS VALUE PERIOD RETURN(A)
--------- ---------- ---------------- ---------- ---------- ------------ ---------- ------ ---------
MID CAP EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $21.61 $0.03 $(0.79) $ -- $ -- $ -- $(0.76) $20.85 (3.52)%(d)
1998--Class B
Shares.......... 21.57 (0.02) (0.78) -- -- -- (0.80) 20.77 (3.71)(d)
1998--Class C
Shares.......... 21.59 (0.02) (0.79) -- -- -- (0.81) 20.78 (3.75)(d)
1998--Institu-
tional Shares... 21.65 0.09 (0.80) -- -- -- (0.71) 20.94 (3.28)(d)
1998--Service
Shares.......... 21.62 -- (0.75) -- -- -- (0.75) 20.87 (3.47)(d)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares(b)....... 23.63 0.09 0.76 (0.06) (0.04) $(2.77) (2.02) 21.61 3.42(d)
1998--Class B
Shares(b)....... 23.63 0.06 0.74 (0.09) -- (2.77) (2.06) 21.57 3.17(d)
1998--Class C
Shares(b)....... 23.63 0.06 0.76 (0.09) -- (2.77) (2.04) 21.59 3.27(d)
1998--Institu-
tional Shares... 18.73 0.16 5.66 (0.13) -- (2.77) 2.92 21.65 30.86
1998--Service
Shares(b)....... 23.01 0.09 1.40 (0.11) -- (2.77) (1.39) 21.62 6.30(d)
- ------------------------------------------------------------------------------------------------------------------------
1997--Institu-
tional Shares... 15.91 0.24 3.77 (0.24) (0.93) (0.02) 2.82 18.73 25.63
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1996--Institu-
tional
Shares(b)....... 15.00 0.13 0.90 (0.12) -- -- 0.91 15.91 6.89(d)
<CAPTION>
RATIOS ASSUMING NO
EXPENSE LIMITATIONS
------------------------
RATIO OF RATIO OF
NET NET RATIO OF RATIO OF
NET EXPENSES INVESTMENT EXPENSES NET
ASSETS AT TO INCOME TO INVESTMENT
PORTFOLIO END OF AVERAGE (LOSS) TO AVERAGE INCOME (LOSS)
TURNOVER PERIOD NET AVERAGE NET TO AVERAGE
RATE (IN 000S) ASSETS NET ASSETS ASSETS NET ASSETS
----------- --------- ---------- ------------ ---------- -------------
MID CAP EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 27.55%(d) $118,663 1.35%(c) 0.28%(c) 1.47%(c) 0.16%(c)
1998--Class B
Shares.......... 27.55(d) 46,268 1.85(c) (0.21)(c) 1.97(c) (0.33)(c)
1998--Class C
Shares.......... 27.55(d) 12,615 1.85(c) (0.21)(c) 1.97(c) (0.33)(c)
1998--Institu-
tional Shares... 27.55(d) 230,251 0.85(c) 0.79 (c) 0.97(c) 0.67 (c)
1998--Service
Shares.......... 27.55(d) 83 1.35(c) 0.18 (c) 1.47(c) 0.06 (c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares(b)....... 62.60 90,588 1.35(c) 0.33(c) 1.47(c) 0.21%(c)
1998--Class B
Shares(b)....... 62.60 28,743 1.85(c) (0.20)(c) 1.97(c) (0.32)(c)
1998--Class C
Shares(b)....... 62.60 6,445 1.85(c) (0.23)(c) 1.97(c) (0.35)(c)
1998--Institu-
tional Shares... 62.60 236,440 0.85 0.78 0.97 0.66
1998--Service
Shares(b)....... 62.60 8 1.35(c) 0.63(c) 1.43(c) 0.51(c)
- ------------------------------------------------------------------------------------------------------------------------
1997--Institu-
tional Shares... 74.03 145,253 0.85 1.35 0.91 1.29
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1996--Institu-
tional
Shares(b)....... 58.77(d) 135,671 0.85(c) 1.67(c) 0.98(c) 1.54(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on August 15, 1997, August 15, 1997, August 15, 1997, August 1,
1995 and July 18, 1997, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
19
<PAGE>
<TABLE>
<CAPTION>
INCOME (LOSS) FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------------- ------------------------------------
FROM NET
NET REALIZED REALIZED GAIN
NET ASSET NET AND UNREALIZED FROM ON INVESTMENT, IN EXCESS NET INCREASE
VALUE, INVESTMENT GAIN (LOSS) ON NET OPTIONS AND OF NET (DECREASE)
BEGINNING INCOME INVESTMENT AND INVESTMENT FUTURES INVESTMENT IN NET ASSET
OF PERIOD (LOSS) OPTIONS TRANSACTIONS INCOME TRANSACTIONS INCOME VALUE
--------- ---------- -------------------- ---------- -------------- ---------- ------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $24.05 $(0.02) $(0.17) $ -- $ -- $ -- $(0.19)
1998--Class B
Shares.......... 23.73 (0.11) (0.17) -- -- -- (0.28)
1998--Class C
Shares.......... 23.73 (0.09) (0.19) -- -- -- (0.28)
1998--Institu-
tional Shares... 24.09 0.03 (0.18) -- -- -- (0.15)
1998--Service
Shares.......... 24.05 -- (0.19) -- -- -- (0.19)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 20.91 0.14 5.33 -- (2.33) -- 3.14
1998--Class B
Shares.......... 20.80 (0.01) 5.27 -- (2.33) -- 2.93
1998--Class C
Shares(b)....... 24.69 (0.06) 1.43 -- (1.99) (0.34) (0.96)
1998--Institu-
tional
Shares(b)....... 24.91 0.03 1.48 -- (2.05) (0.28) (0.82)
1998--Service
Shares(b)....... 24.91 (0.01) 1.48 -- (2.02) (0.31) (0.86)
- ---------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 17.29 (0.21) 4.92 -- (1.09) -- 3.62
1997--Class B
Shares(b)....... 20.79 (0.11) 1.21 -- (1.09) -- 0.01
- ---------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 16.14 (0.23) 1.39 -- (0.01) -- 1.15
- ---------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 20.67 (0.07) (3.53) -- (0.69) (0.24) (4.53)
- ---------------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 16.68 (0.04) 5.03 -- (1.00) -- 3.99
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1993--Class A
Shares(b)....... 14.18 0.03 2.50 (0.03) -- -- 2.50
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER
OF FEES
----------------------------
RATIO OF RATIO OF
NET ASSETS RATIO OF NET INVESTMENT RATIO OF NET INVESTMENT
NET ASSET PORTFOLIO AT END OF NET EXPENSES INCOME (LOSS) TO EXPENSES TO INCOME (LOSS)
VALUE, END TOTAL TURNOVER PERIOD TO AVERAGE AVERAGE NET AVERAGE TO AVERAGE NET
OF PERIOD RETURN(A) RATE (IN 000S) NET ASSETS ASSETS NET ASSETS ASSETS
---------- ------------- ----------- ---------- ------------ ---------------- ------------ ---------------
SMALL CAP VALUE FUND
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $23.86 (0.79)%(d) 46.40%(d) $402,797 1.50%(c) (0.16)%(c) 1.75%(c) (0.41)%(c)
1998--Class B
Shares.......... 23.45 (1.18)(d) 46.40(d) 54,241 2.25(c) (0.90)(c) 2.25(c) (0.90)(c)
1998--Class C
Shares.......... 23.45 (1.18)(d) 46.40(d) 9,308 2.25(c) (0.88)(c) 2.25(c) (0.88)(c)
1998--Institu-
tional Shares... 23.94 (0.62)(d) 46.40(d) 18,197 1.15(c) 0.21(c) 1.15(c) 0.21(c)
1998--Service
Shares.......... 23.86 (0.79)(d) 46.40(d) 76 1.65(c) (0.09)(c) 1.65(c) (0.09)(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 24.05 26.17 84.81 370,246 1.54 (0.28) 1.76 (0.50)
1998--Class B
Shares.......... 23.73 25.29 84.81 42,677 2.29 (0.92) 2.29 (0.92)
1998--Class C
Shares(b)....... 23.73 5.51(d) 84.81 5,604 2.09(c) (0.79)(c) 2.09(c) (0.79)(c)
1998--Institu-
tional
Shares(b)....... 24.09 6.08(d) 84.81 14,626 1.16(c) 0.27(c) 1.16(c) 0.27(c)
1998--Service
Shares(b)....... 24.05 5.91(d) 84.81 2 1.45(c) (0.07)(c) 1.45(c) (0.07)(c)
- ------------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 20.91 27.28 99.46 212,061 1.60 (0.72) 1.85 (0.97)
1997--Class B
Shares(b)....... 20.80 5.39(d) 99.46 3,674 2.35(c) (1.63)(c) 2.35(c) (1.63)(c)
- ------------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 17.29 7.20 57.58 204,994 1.41 (0.59) 1.66 (0.84)
- ------------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 16.14 (17.53) 43.67 319,487 1.53 (0.53) 1.78 (0.78)
- ------------------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 20.67 30.13 56.81 261,074 1.60 (0.45) 1.85 (0.70)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1993--Class A
Shares(b)....... 16.68 17.86(d) 7.12 59,339 1.65(c) 0.62(c) 2.70(c) (0.43)(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on October 22, 1992, May 1, 1996, August 15, 1997, August 15,
1997 and August 15, 1997, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
20
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and principal investment policies of each Fund are
described below. Other investment practices and management techniques, which
involve certain risks, are described under "Description of Securities," "Risk
Factors" and "Investment Techniques." There can be no assurance that a Fund's
investment objectives will be achieved.
The Investment Adviser may purchase for the Funds common stocks, preferred
stocks, interests in real estate investment trusts, convertible debt
obligations, convertible preferred stocks, equity interests in trusts,
partnerships, joint ventures, limited liability companies and similar
enterprises, warrants and stock purchase rights ("equity securities"). In
choosing a Fund's securities, the Investment Adviser utilizes first-hand
fundamental research, including visiting company facilities to assess
operations and to meet decision-makers. The Investment Adviser may also use
macro analysis of numerous economic and valuation variables to anticipate
changes in company earnings and the overall investment climate. The Investment
Adviser is able to draw on the research and market expertise of the Goldman
Sachs Global Investment Research Department and other affiliates of the
Investment Adviser, as well as information provided by other securities
dealers. Equity securities in a Fund's portfolio will generally be sold when
the Investment Adviser believes that the market price fully reflects or
exceeds the securities' fundamental valuation or when other more attractive
investments are identified.
Value Style Funds. The Growth and Income, Mid Cap Equity, Small Cap Value
Funds and the equity portion of the Balanced Fund are managed using a value
oriented approach. The Investment Adviser evaluates securities using
fundamental analysis and intends to purchase equity securities that are, in
its view, underpriced relative to a combination of such companies' long-term
earnings prospects, growth rate, free cash flow and/or dividend-paying
ability. Consideration will be given to the business quality of the issuer.
Factors positively affecting the Investment Adviser's view of that quality
include the competitiveness and degree of regulation in the markets in which
the company operates, the existence of a management team with a record of
success, the position of the company in the markets in which it operates, the
level of the company's financial leverage and the sustainable return on
capital invested in the business. The Funds may also purchase securities of
companies that have experienced difficulties and that, in the opinion of the
Investment Adviser, are available at attractive prices.
Growth Style Funds. The Capital Growth Fund is managed using a growth equity
oriented approach. Equity securities for this Fund are selected based on their
prospects for above average growth. The Investment Adviser will select
securities of growth companies trading, in the Investment Adviser's opinion,
at a reasonable price relative to other industries, competitors and historical
price/earnings multiples. The Fund generally will invest in companies whose
earnings are believed to be in a relatively strong growth trend, or, to a
lesser extent, in companies in which significant further growth is not
anticipated but whose market value per share is thought to be undervalued. In
order to determine whether a security has favorable growth prospects, the
Investment Adviser ordinarily looks for one or more of the following
characteristics in relation to the security's prevailing price: prospects for
above average sales and earnings growth per share; high return on invested
capital; free cash flow generation; sound balance sheet, financial and
accounting policies, and overall financial strength; strong competitive
advantages; effective research, product development, and marketing; pricing
flexibility; strength of management; and general operating characteristics
that will enable the company to compete successfully in its marketplace.
21
<PAGE>
Quantitative Style Funds. The CORE Large Cap Value, CORE U.S. Equity, CORE
Large Cap Growth and CORE Small Cap Equity Funds (the "CORE Funds") are
managed using both quantitative and fundamental techniques. CORE is an acronym
for "Computer-Optimized, Research-Enhanced," which reflects the CORE Funds'
investment process. This investment process and the proprietary multifactor
model used to implement it are discussed below.
Investment Process. The Investment Adviser begins with a broad universe of
U.S. equity securities for the CORE Funds. As described more fully below, the
Investment Adviser uses a proprietary multifactor model (the "Multifactor
Model") to forecast the returns of different markets and individual
securities. In the case of an equity security followed by the Goldman Sachs
Global Investment Research Department (the "Research Department"), a rating is
assigned based upon the Research Department's evaluation. In the discretion of
the Investment Adviser, ratings may also be assigned to equity securities
based on research ratings obtained from other industry sources.
In building a diversified portfolio for each CORE Fund, the Investment
Adviser utilizes optimization techniques to seek to maximize the Fund's
expected return, while maintaining a risk profile similar to the Fund's
benchmark. Each portfolio is primarily comprised of securities rated highest
by the foregoing investment process and has risk characteristics and industry
weightings similar to the relevant Fund's benchmark.
Multifactor Model. The Multifactor Model is a rigorous computerized rating
system for forecasting the returns of different equity markets and individual
equity securities according to fundamental investment characteristics. The
CORE Funds use the Multifactor Model to forecast the returns of securities
held in each Fund's portfolio. The Multifactor Model incorporates common
variables covering measures of value, growth, momentum and risk (e.g.,
book/price ratio, earnings/price ratio, price momentum, price volatility,
consensus growth forecasts, earnings estimate revisions and earnings
stability). All of the factors used in the Multifactor Model have been shown
to significantly impact the performance of the securities and markets they
were designed to forecast.
The weightings assigned to the factors in the Multifactor Model used by the
CORE Funds are derived using a statistical formulation that considers each
factor's historical performance in different market environments. As such, the
Multifactor Model is designed to evaluate each security using only the factors
that are statistically related to returns in the anticipated market
environment. Because it includes many disparate factors, the Investment
Adviser believes that the Multifactor Model is broader in scope and provides a
more thorough evaluation than most conventional quantitative models.
Securities and markets ranked highest by the Multifactor Model do not have one
dominant investment characteristic; rather, they possess an attractive
combination of investment characteristics.
Research Department. In assigning ratings to equity securities, the Research
Department uses a four category rating system ranging from "recommended for
purchase" to "likely to underperform." The ratings reflect the analyst's
judgment as to the investment results of a specific security and incorporate
economic outlook, valuation, risk and a variety of other factors.
By employing both a quantitative (i.e., the Multifactor Model) and a
qualitative (i.e., research enhanced) method of selecting securities, the CORE
Funds seek to capitalize on the strengths of each discipline.
22
<PAGE>
BALANCED FUND
Objective. The Fund's investment objective is to provide investors with
long-term capital growth and current income. The Fund seeks capital
appreciation primarily through the equity component of its portfolio while
investing in fixed income securities primarily to provide income for regular
quarterly dividends.
Primary Investment Focus. The Fund invests, under normal circumstances,
between 45% and 65% of its total assets in equity securities. The Fund also
invests at least 25% of its total assets in fixed-income senior securities and
the remainder of its assets in other fixed income securities and cash. The
percentage of the portfolio invested in equity and fixed-income securities
will vary from time to time as the Investment Adviser evaluates their relative
attractiveness based on market valuations, economic growth and inflation
prospects. This allocation is subject to the Fund's intention to pay regular
quarterly dividends. The amount of quarterly dividends can also be expected to
fluctuate in accordance with factors such as prevailing interest rates and the
percentage of the Fund's assets invested in fixed-income securities.
Other. Although the Fund's equity investments consist primarily of publicly
traded U.S. securities, the Fund may invest up to 10% of its total assets in
the equity securities of foreign issuers, including issuers in Emerging
Countries and equity securities quoted in foreign currencies. A portion of the
Fund's portfolio of equity securities may be selected primarily to provide
current income. Equity securities selected to provide current income may
include interests in real estate investment trusts, convertible securities,
preferred stocks, utility stocks and interests in limited partnerships.
The Fund's fixed-income securities primarily include securities issued by
the U.S. Government, its agencies, instrumentalities or sponsored enterprises,
corporations or other entities, mortgage-backed and asset-backed securities,
municipal securities and custodial receipts. The Fund may also invest in debt
obligations (U.S. dollar and non-U.S. dollar denominated) issued or guaranteed
by one or more foreign governments or any of their political subdivisions,
agencies or instrumentalities and foreign corporations or other entities. Such
securities are collectively referred to herein as "fixed-income securities."
The Fund's investments in fixed-income securities that are issued by foreign
issuers, including issuers in Emerging Countries, may not exceed 10% of the
Fund's total assets. The Fund may employ certain currency techniques to seek
to hedge against currency exchange rate fluctuations or to seek to increase
total return. When used to seek to enhance return, these management techniques
are considered speculative. Such currency management techniques involve risks
different from those associated with investing solely in securities of U.S.
issuers quoted in U.S. dollars. See "Description of Securities," "Investment
Techniques" and "Risk Factors."
GROWTH AND INCOME FUND
Objectives. The Fund's investment objectives are to provide investors with
long-term growth of capital and growth of income.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 65% of its total assets in equity securities that the Investment Adviser
considers to have favorable prospects for capital appreciation and/or
dividend-paying ability.
Other. The Fund may invest up to 35% of its total assets in fixed-income
securities that, in the opinion of the Investment Adviser, offer the potential
to further the Fund's investment objectives. In addition, although the Fund
will invest primarily in publicly traded U.S. securities, it may invest up to
25% of its total assets in foreign securities, including securities of issuers
in Emerging Countries and securities quoted in foreign currencies.
23
<PAGE>
CORE LARGE CAP VALUE FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital and dividend income. The Fund seeks to achieve its
objective through a broadly diversified portfolio of equity securities of
large cap U.S. issuers that are selling at low to modest valuations relative
to general market measures such as earnings, book value and other fundamental
accounting measures, and that are expected to have favorable prospects for
capital appreciation and/or dividend-paying ability.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the Russell 1000 Value Index. The Fund seeks a portfolio comprised of
companies with above average capitalizations and low to moderate valuations as
measured by price/earnings ratios, book value and other fundamental accounting
measures. The Fund may invest only in fixed-income securities that are
considered cash equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CORE U.S. EQUITY FUND (FORMERLY, THE "SELECT EQUITY FUND")
Objective: The Fund's investment objective is to provide investors with
long-term growth of capital and dividend income. The Fund seeks to achieve its
objective through a broadly diversified portfolio of large cap and blue chip
equity securities representing all major sectors of the U.S. economy.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the S&P 500 Index. The Fund seeks a broad representation in most major
sectors of the U.S. economy and a portfolio comprised of companies with
average long-term earnings growth expectations and dividend yields. The Fund
may invest only in fixed-income securities that are considered cash
equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives And Policies--Quantitative Style Funds."
CORE LARGE CAP GROWTH FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital. The Fund seeks to achieve its objective through a
broadly diversified portfolio of equity securities of large cap U.S. issuers
that are expected to have better prospects for earnings growth than the growth
rate of the general domestic economy. Dividend income is a secondary
consideration.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Investment
Adviser emphasizes a company's growth prospects in analyzing equity securities
to be purchased by the Fund. The Fund's investments are selected using both a
variety of quantitative techniques and fundamental
24
<PAGE>
research in seeking to maximize the Fund's expected return, while maintaining
risk, style, capitalization and industry characteristics similar to the
Russell 1000 Growth Index. The Fund seeks a portfolio comprised of companies
with above average capitalizations and earnings growth expectations and below
average dividend yields. The Fund may invest only in fixed-income securities
that are considered cash equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CORE SMALL CAP EQUITY FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital. The Fund seeks to achieve its objective through a
broadly diversified portfolio of equity securities of U.S. issuers which are
included in the Russell 2000 Index at the time of investment.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the Russell 2000 Index. The Fund seeks a portfolio comprised of companies
with small market capitalizations, strong expected earnings growth and
momentum, and better valuation and risk characteristics than the Russell 2000
Index. The Fund may invest only in fixed-income securities that are considered
cash equivalents.
The Investment Adviser believes that the companies in which the Fund may
invest offer greater opportunity for growth of capital than larger, more
mature, better known companies. Investments in small market capitalization
issuers involve special risks. See "Description of Securities" and "Risk
Factors." If the issuer of a portfolio security held by the Fund is no longer
included in the Russell 2000 Index, the Fund may, but is not required to, sell
the security.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CAPITAL GROWTH FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities. The Fund seeks to achieve
its investment objective by investing in a diversified portfolio of equity
securities that are considered by the Investment Adviser to have long-term
capital appreciation potential.
Other. Although the Fund will invest primarily in publicly traded U.S.
securities, it may invest up to 10% of its total assets in foreign securities,
including securities of issuers in Emerging Countries and securities quoted in
foreign currencies.
MID CAP EQUITY FUND
Objective. The Fund's investment objective is to provide investors with
long-term capital appreciation.
Primary Investment Focus. The Fund invests, under normal circumstances,
substantially all of its assets in equity securities and at least 65% of its
total assets in equity securities of Mid-Cap Companies with public stock
25
<PAGE>
market capitalizations (based upon shares available for trading on an
unrestricted basis) within the range of the market capitalization of companies
constituting the Russell Midcap Index at the time of investment (currently
between $400 million and $16 billion). If the capitalization of an issuer
increases above $16 billion after purchase of such issuer's securities, the
Fund may, but is not required to, sell the securities. Dividend income, if
any, is an incidental consideration.
Other. The Fund may invest up to 35% of its total assets in fixed-income
securities. In addition, although the Fund will invest primarily in publicly
traded U.S. securities, it may invest up to 25% of its total assets in foreign
securities, including securities of issuers in Emerging Countries and
securities quoted in foreign currencies.
SMALL CAP VALUE FUND (FORMERLY, THE "SMALL CAP EQUITY FUND")
Objective. The Fund's investment objective is to provide investors with
long-term capital growth.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 65% of its total assets in equity securities of companies with public
stock market capitalizations of $1 billion or less at the time of investment.
Under normal circumstances, the Fund's investment horizon for ownership of
stocks will be two to three years. Dividend income, if any, is an incidental
consideration. If the market capitalization of a company held by the Fund
increases above the amount stated above, the Fund may, consistent with its
investment objective, continue to hold the security.
Small Capitalization Companies. The Fund invests in companies which the
Investment Adviser believes are well managed niche businesses that have the
potential to achieve high or improving returns on capital and/or above average
sustainable growth. The Fund may invest in securities of small market
capitalization companies which may have experienced financial difficulties.
Investments may also be made in companies that are in the early stages of
their life and that the Investment Adviser believes have significant growth
potential. The Investment Adviser believes that the companies in which the
Fund may invest offer greater opportunity for growth of capital than larger,
more mature, better known companies. However, investments in such small market
capitalization companies involve special risks. See "Description of
Securities" and "Risk Factors."
Other. The Fund may invest in the aggregate up to 35% of its total assets in
the equity securities of companies with public stock market capitalizations in
excess of $1 billion at the time of investment and in fixed- income
securities. In addition, although the Fund will invest primarily in publicly
traded U.S. securities, it may invest up to 25% of its total assets in foreign
securities, including securities of issuers in Emerging Countries and
securities quoted in foreign currencies.
DESCRIPTION OF SECURITIES
The Funds may invest in equity and fixed income securities in accordance
with the investment policies stated above. Certain of these permitted
investments are described in more detail in this section.
CONVERTIBLE SECURITIES
Each Fund may invest in convertible securities, including debt obligations
and preferred stock of the issuer convertible at a stated exchange rate into
common stock of the issuer. Convertible securities generally offer lower
interest or dividend yields than non-convertible securities of similar
quality. As with all fixed-income securities,
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the market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. However, when
the market price of the common stock underlying a convertible security exceeds
the conversion price, the convertible security tends to reflect the market
price of the underlying common stock. As the market price of the underlying
common stock declines, the convertible security tends to trade increasingly on
a yield basis, and thus may not decline in price to the same extent as the
underlying common stock. Convertible securities rank senior to common stocks
in an issuer's capital structure and consequently entail less risk than the
issuer's common stock. In evaluating a convertible security, the Investment
Adviser will give primary emphasis to the attractiveness of the underlying
common stock. The convertible debt securities in which the Balanced Fund
invests will be rated, at the time of investment, B or better by Standard &
Poor's Ratings Group ("Standard & Poor's") or Moody's Investors Service, Inc.
("Moody's"), or if unrated by such rating organizations, determined to be of
comparable quality by the Investment Adviser. The convertible securities in
which the CORE Funds invest are not subject to any minimum rating criteria.
The convertible debt securities in which the other Funds may invest are
subject to the same rating criteria as a Fund's investments in non-convertible
debt securities. Convertible debt securities are equity investments for
purposes of each Fund's investment policies.
FOREIGN INVESTMENTS
FOREIGN SECURITIES. Each Fund may invest in the securities of foreign
issuers (provided that the CORE Funds may only invest in equity securities of
foreign issuers that are traded in the U.S.). Investments in foreign
securities may offer potential benefits that are not available from
investments exclusively in equity securities of domestic issuers quoted in
U.S. dollars. Foreign countries may have economic policies or business cycles
different from those of the U.S. and markets for foreign securities do not
necessarily move in a manner parallel to U.S. markets.
Investing in the securities of foreign issuers involves certain special
risks, including those set forth below, which are not typically associated
with investing in U.S. dollar denominated or quoted securities of U.S.
issuers. Such investments may be affected by changes in currency rates,
changes in foreign or U.S. laws or restrictions applicable to such investments
and in exchange control regulations (e.g., currency blockage). A decline in
the exchange rate of the currency (i.e., weakening of the currency against the
U.S. dollar) in which a portfolio security is quoted or denominated relative
to the U.S. dollar would reduce the value of the portfolio security. In
addition, if the currency in which a Fund receives dividends, interest or
other payments declines in value against the U.S. dollar before such income is
distributed as dividends to shareholders or converted to U.S. dollars, the
Fund may have to sell portfolio securities to obtain sufficient cash to pay
such dividends. The expected introduction of a single currency, the euro, on
January 1, 1999 for participating European nations in the Economic and
Monetary Union ("EU") presents unique uncertainties, including whether the
payment and operational systems of banks and other financial institutions will
be ready by the scheduled launch date; the creation of suitable clearing and
settlement payment systems for the new currency; the legal treatment of
certain outstanding financial contracts after January 1, 1999 that refer to
existing currencies rather than the euro; the establishment and maintenance of
exchange rates for currencies being converted into the euro and the euro; the
fluctuation of the euro relative to non-euro currencies during the transition
period from January 1, 1999 to December 31, 2000 and beyond; whether the
interest rate, tax and labor regimes of European countries participating in
the euro will converge over time; and whether the conversion of the currencies
of other EU countries such as the United Kingdom, Denmark and Greece into the
euro and the admission of other non-EU countries such as Poland, Latvia and
Lithuania as members of the EU may have an impact on the euro. These or other
factors, including political and economic risks, could cause market
disruptions before or after the introduction of the euro, and could adversely
affect the value of securities and foreign currencies held by the Funds.
Commissions on transactions in foreign securities may be higher than those for
similar transactions on
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domestic stock markets. In addition, clearance and settlement procedures may
be different in foreign countries and, in certain markets, such procedures
have been unable to keep pace with the volume of securities transactions, thus
making it difficult to conduct such transactions.
Foreign issuers are not generally subject to uniform accounting, auditing
and financial reporting standards comparable to those applicable to U.S.
issuers. There may be less publicly available information about a foreign
issuer than about a U.S. issuer. In addition, there is generally less
government regulation of foreign markets, companies and securities dealers
than in the United States. Foreign securities markets may have substantially
less volume than U.S. securities markets and securities of many foreign
issuers are less liquid and more volatile than securities of comparable
domestic issuers. Furthermore, with respect to certain foreign countries,
there is a possibility of nationalization, expropriation or confiscatory
taxation, imposition of withholding or other taxes on dividend or interest
payments (or, in some cases, capital gains), limitations on the removal of
funds or other assets of the Funds, political or social instability or
diplomatic developments which could affect investments in those countries.
INVESTMENTS IN ADRS, EDRS AND GDRS. Each Fund may invest in foreign
securities which take the form of sponsored and unsponsored American
Depository Receipts ("ADRs") and Global Depository Receipts ("GDRs") and each
Fund, other than the CORE Funds, may also invest in European Depository
Receipts ("EDRs") or other similar instruments representing securities of
foreign issuers (together, "Depository Receipts"). ADRs represent the right to
receive securities of foreign issuers deposited in a domestic bank or a
correspondent bank. Prices of ADRs are quoted in U.S. dollars, and ADRs are
traded in the United States on exchanges or over-the-counter and are sponsored
and issued by domestic banks. EDRs and GDRs are receipts evidencing an
arrangement with a non-U.S. bank. EDRs and GDRs are not necessarily quoted in
the same currency as the underlying security. To the extent a Fund acquires
Depository Receipts through banks which do not have a contractual relationship
with the foreign issuer of the security underlying the Depository Receipts to
issue and service such Depository Receipts (unsponsored Depository Receipts),
there may be an increased possibility that the Fund would not become aware of
and be able to respond to corporate actions, such as stock splits or rights
offerings involving the foreign issuer, in a timely manner. In addition, the
lack of information may result in inefficiencies in the valuation of such
instruments. Investment in Depository Receipts does not eliminate all the
risks inherent in investing in securities of non-U.S. issuers. The market
value of Depository Receipts is dependent upon the market value of the
underlying securities and fluctuations in the relative value of the currencies
in which the Depository Receipt and the underlying securities are quoted.
However, by investing in Depository Receipts, such as ADRs, that are quoted in
U.S. dollars, a Fund may avoid currency risks during the settlement period for
purchases and sales.
FOREIGN CURRENCY TRANSACTIONS. Because investment in foreign issuers will
usually involve currencies of foreign countries, and because the Balanced Fund
may have currency exposure independent of its securities positions, the value
of the assets of a Fund as measured in U.S. dollars will be affected by
changes in foreign currency exchange rates. A Fund may, to the extent it
invests in foreign securities, purchase or sell foreign currencies on a spot
basis and may also purchase or sell forward foreign currency exchange
contracts for hedging purposes and to seek to protect against anticipated
changes in future foreign currency exchange rates. In addition, the Balanced
Fund may enter into such contracts to seek to increase total return when the
Investment Adviser anticipates that the foreign currency will appreciate or
depreciate in value, but securities denominated or quoted in that currency do
not present attractive investment opportunities and are not held in the Fund's
portfolio. When entered into to seek to enhance return, forward foreign
currency exchange contracts are considered speculative. The Balanced Fund may
also engage in cross-hedging by using forward contracts in a currency
different from that in which the hedged security is denominated or quoted if
the Investment Adviser determines that there is a
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pattern of correlation between the two currencies. If a Fund enters into a
forward foreign currency exchange contract to buy foreign currency for any
purpose or the Balanced Fund enters into forward foreign currency exchange
contracts to sell foreign currency to seek to increase total return, the Fund
will segregate cash or liquid assets in an amount equal to the value of the
Fund's total assets committed to the consummation of the forward contract, or
otherwise cover its position in a manner permitted by the SEC. The Fund will
incur costs in connection with conversions between various currencies. A Fund
may hold foreign currency received in connection with investments in foreign
securities when, in the judgment of the Investment Adviser, it would be
beneficial to convert such currency into U.S. dollars at a later date, based
on anticipated changes in the relevant exchange rate.
Currency exchange rates may fluctuate significantly over short periods of
time causing, along with other factors, a Fund's NAV to fluctuate. Currency
exchange rates generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of investments in
different countries, actual or anticipated changes in interest rates and other
complex factors, as seen from an international perspective. Currency exchange
rates also can be affected unpredictably by the intervention of U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the U.S. or abroad. To the
extent that a substantial portion of a Fund's total assets, adjusted to
reflect the Fund's net position after giving effect to currency transactions,
is denominated or quoted in the currencies of foreign countries, the Fund will
be more susceptible to the risk of adverse economic and political developments
within those countries.
The market in forward foreign currency exchange contracts, currency swaps
and other privately negotiated currency instruments offers less protection
against defaults by the other party to such instruments than is available for
currency instruments traded on an exchange. Such contracts are subject to the
risk that the counterparty to the contract will default on its obligations.
Since these contracts are not guaranteed by an exchange or clearinghouse, a
default on the contract would deprive the Fund of unrealized profits,
transaction costs or the benefits of a currency hedge or force the Fund to
cover its purchase or sale commitments, if any, at the current market price. A
Fund will not enter into forward foreign currency exchange contracts, currency
swaps or other privately negotiated currency instruments unless the credit
quality of the unsecured senior debt or the claims-paying ability of the
counterparty is considered to be investment grade by the Investment Adviser.
The Balanced Fund may also engage in a variety of foreign currency
management techniques. For a discussion of such instruments and the risks
associated with their use, see "Investment Objective and Policies" in the
Additional Statement.
FIXED-INCOME SECURITIES
U.S. GOVERNMENT SECURITIES. Each Fund may invest in U.S. Government
securities. Generally, these securities include U.S. Treasury obligations and
obligations issued or guaranteed by U.S. Government agencies,
instrumentalities or sponsored enterprises. U.S. Government securities also
include Treasury receipts and other stripped U.S. Government securities, where
the interest and principal components of stripped U.S. Government securities
are traded independently. A Fund may also invest in zero coupon U.S. Treasury
securities and in zero coupon securities issued by financial institutions,
which represent a proportionate interest in underlying U.S. Treasury
securities. A zero coupon security pays no interest to its holder during its
life and its value consists of the difference between its face value at
maturity and its cost. The market prices of zero coupon securities generally
are more volatile than the market prices of securities that pay interest
periodically. See "Taxation" in the Additional Statement.
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FOREIGN GOVERNMENT SECURITIES. The Balanced Fund may invest in debt
obligations of foreign governments and governmental agencies, including those
of Emerging Countries. Investment in sovereign debt obligations involves
special risks not present in debt obligations of corporate issuers. The issuer
of the debt or the governmental authorities that control the repayment of the
debt may be unable or unwilling to repay principal or interest when due in
accordance with the terms of such debt, and the Fund may have limited recourse
in the event of a default. Periods of economic uncertainty may result in the
volatility of market prices of sovereign debt, and in turn the Fund's NAV, to
a greater extent than the volatility inherent in debt obligations of U.S.
issuers. A sovereign debtor's willingness or ability to repay principal and
pay interest in a timely manner may be affected by, among other factors, its
cash flow situation, the extent of its foreign currency reserves, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of the debt service burden to the economy as a whole, the
sovereign debtor's policy toward international lenders and the political
constraints to which a sovereign debtor may be subject.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. Each Fund (other than the CORE
Funds) may invest in mortgage-backed securities ("Mortgage-Backed
Securities"), which represent direct or indirect participations in, or are
collateralized by and payable from, mortgage loans secured by real property.
Each Fund (other than the CORE Funds) may also invest in asset-backed
securities ("Asset-Backed Securities"). The principal and interest payments on
Asset-Backed Securities are collateralized by pools of assets such as auto
loans, credit card receivables, leases, installment contracts and personal
property. Such asset pools are securitized through the use of special purpose
trusts or corporations. Principal and interest payments may be credit enhanced
by a letter of credit, a pool insurance policy or a senior/subordinated
structure.
The Balanced Fund may also invest in stripped Mortgage-Backed Securities
("SMBS") (including interest only and principal only securities), which are
derivative multiple class Mortgage-Backed Securities. SMBS are usually
structured with two different classes: one that receives 100% of the interest
payments and the other that receives 100% of the principal payments from a
pool of mortgage loans. If the underlying mortgage loans experience different
than anticipated prepayments of principal, the Fund may fail to recoup fully
its initial investment in these securities. The market value of the class
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates. The yields on a class of SMBS that
receives all or most of the interest from mortgage loans are generally higher
than prevailing market yields on other Mortgage-Backed Securities because
their cash flow patterns are more volatile and there is a greater risk that
the initial investment will not be fully recouped. The Fund's investments in
SMBS may require the Fund to sell portfolio securities to generate sufficient
cash to satisfy certain income distribution requirements.
CORPORATE DEBT OBLIGATIONS. Each Fund may invest in corporate debt
obligations. Corporate debt obligations are subject to the risk of an issuer's
inability to meet principal and interest payments on the obligations.
BANK OBLIGATIONS. Each Fund may invest in obligations issued or guaranteed
by U.S. or foreign banks. Bank obligations, including without limitations,
time deposits, bankers' acceptances and certificates of deposit, may be
general obligations of the parent bank or may be limited to the issuing branch
by the terms of the specific obligations or by government regulation. Banks
are subject to extensive but different governmental regulations which may
limit both the amount and types of loans which may be made and interest rates
which may be charged. In addition, the profitability of the banking industry
is largely dependent upon the availability and cost of funds for the purpose
of financing lending operations under prevailing money market conditions.
General economic conditions as well as exposure to credit losses arising from
possible financial difficulties of borrowers play an important part in the
operation of this industry.
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STRUCTURED SECURITIES. Each Fund may invest in structured securities. The
value of the principal of and/or interest on such securities is determined by
reference to changes in the value of specific currencies, interest rates,
commodities, indices or other financial indicators (the "Reference") or the
relative change in two or more References. The interest rate or the principal
amount payable upon maturity or redemption may be increased or decreased
depending upon changes in the applicable Reference. The terms of the
structured securities may provide that in certain circumstances no principal
is due at maturity and, therefore, result in the loss of a Fund's investment.
Structured securities may be positively or negatively indexed, so that
appreciation of the Reference may produce an increase or decrease in the
interest rate or value of the security at maturity. In addition, changes in
the interest rates or the value of the security at maturity may be a multiple
of changes in the value of the Reference. Consequently, structured securities
may entail a greater degree of market risk than other types of fixed-income
securities. Structured securities may also be more volatile, less liquid and
more difficult to price accurately than less complex securities.
RATING CRITERIA. Except as noted below, each Fund (other than the CORE
Funds, which only invest in debt instruments that are cash equivalents) may
invest in debt securities rated at least investment grade at the time of
investment. Investment grade debt securities are securities rated BBB or
higher by Standard & Poor's or Baa or higher by Moody's. A security will be
deemed to have met a rating requirement if it receives the minimum required
rating from at least one such rating organization even though it has been
rated below the minimum rating by one or more other rating organizations, or
if unrated by such rating organizations, determined by the Investment Adviser
to be of comparable credit quality. The Balanced Fund may invest up to 10% of
its total assets in debt securities that are rated BB or B by Standard &
Poor's or Ba or B by Moody's. The Growth and Income, Capital Growth and Small
Cap Value Funds may invest up to 10%, 10% and 35%, respectively, of their
total assets in debt securities which are unrated or rated in the lowest
rating categories by Standard & Poor's or Moody's (i.e., BB or lower by
Standard & Poor's or Ba or lower by Moody's), including securities rated D by
Moody's or Standard & Poor's. Mid Cap Equity Fund may invest up to 10% of its
total assets in below investment grade debt securities rated B or higher by
Standard & Poor's or B or higher by Moody's. Fixed- income securities rated
BBB or Baa are considered medium-grade obligations with speculative
characteristics, and adverse economic conditions or changing circumstances may
weaken their issuers' capacity to pay interest and repay principal. Fixed-
income securities rated BB or Ba or below (or comparable unrated securities)
are commonly referred to as "junk bonds" and are considered predominantly
speculative and may be questionable as to principal and interest payments. In
some cases, such bonds may be highly speculative, have poor prospects for
reaching investment grade standing and be in default. As a result, investment
in such bonds will entail greater speculative risks than those associated with
investment in investment grade bonds. Also, to the extent that the rating
assigned to a security in a Fund's portfolio is downgraded by a rating
organization, the market price and liquidity of such security may be adversely
affected. See Appendix A to the Additional Statement for a description of the
corporate bond ratings assigned by Standard & Poor's and Moody's.
REAL ESTATE INVESTMENT TRUSTS ("REITS")
Each Fund may invest in REITs, which are pooled investment vehicles that
invest primarily in either real estate or real estate related loans. The value
of a REIT is affected by changes in the value of the properties owned by the
REIT or securing mortgage loans held by the REIT. REITs are dependent upon
cash flow from their investments to repay financing costs and the ability of
the REITs' manager. REITs are also subject to risks generally associated with
investments in real estate. A Fund will indirectly bear its proportionate
share of any expenses, including management fees, paid by a REIT in which it
invests.
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INVESTMENT TECHNIQUES
OPTIONS ON SECURITIES AND SECURITIES INDICES
Each Fund (other than the CORE Large Cap Value, CORE U.S. Equity and CORE
Large Cap Growth Funds) may write (sell) covered call and put options and
purchase call and put options on any securities in which it may invest or on
any securities index composed of securities in which it may invest. The
writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The use of options to seek to
increase total return involves the risk of loss if the Investment Adviser is
incorrect in its expectation of fluctuations in securities prices or interest
rates. The successful use of options for hedging purposes also depends in part
on the ability of the Investment Adviser to manage future price fluctuations
and the degree of correlation between the options and securities markets. If
the Investment Adviser is incorrect in its expectation of changes in
securities prices or determination of the correlation between the securities
indices on which options are written and purchased and the securities in a
Fund's investment portfolio, the investment performance of the Fund will be
less favorable than it would have been in the absence of such options
transactions. The writing of options could significantly increase a Fund's
portfolio turnover rate and, therefore, associated brokerage commissions or
spreads.
OPTIONS ON FOREIGN CURRENCIES
A Fund may, to the extent it invests in foreign securities, purchase and
sell (write) call and put options on foreign currencies for the purpose of
protecting against declines in the U.S. dollar value of foreign portfolio
securities and anticipated dividends on such securities and against increases
in the U.S. dollar cost of foreign securities to be acquired. In addition, the
Balanced Fund may use options on currency to cross-hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates for a different currency, if there is a pattern of correlation
between the two currencies. As with other kinds of options transactions,
however, the writing of an option on a foreign currency will constitute only a
partial hedge, up to the amount of the premium received. If an option that a
Fund has written is exercised, the Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates, thereby incurring
losses. The purchase of an option on foreign currency may constitute an
effective hedge against exchange rate fluctuations; however, in the event of
exchange rate movements adverse to a Fund's position, the Fund may forfeit the
entire amount of the premium plus related transaction costs. In addition to
purchasing put and call options for hedging purposes, the Balanced Fund may
purchase call or put options on currency to seek to increase total return when
the Investment Adviser anticipates that the currency will appreciate or
depreciate in value, but the securities quoted or denominated in that currency
do not present attractive investment opportunities and are not held in the
Fund's portfolio. When purchased or sold to seek to increase total return,
options on currencies are considered speculative. Options on foreign
currencies written or purchased by the Funds are traded on U.S. and foreign
exchanges or over-the-counter.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
To seek to increase total return or to hedge against changes in interest
rates, securities prices or currency exchange rates, a Fund may purchase and
sell various kinds of futures contracts, and purchase and write call and put
options on any of such futures contracts. Each Fund may also enter into
closing purchase and sale transactions with respect to any such contracts and
options. The futures contracts may be based on various securities (such as
U.S. Government securities), foreign currencies, securities indices and other
financial
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instruments and indices. The CORE Large Cap Value, CORE U.S. Equity and CORE
Large Cap Growth Funds may enter into such transactions only with respect to
the S&P 500 Index in the case of the CORE U.S. Equity Fund and a
representative index in the case of the CORE Large Cap Value and CORE Large
Cap Growth Funds. A Fund will engage in futures and related options
transactions for bona fide hedging purposes as defined in regulations of the
Commodity Futures Trading Commission or to seek to increase total return to
the extent permitted by such regulations. A Fund may not purchase or sell
futures contracts or purchase or sell related options to seek to increase
total return, except for closing purchase or sale transactions, if immediately
thereafter the sum of the amount of initial margin deposits and premiums paid
on the Fund's outstanding positions in futures and related options entered
into for the purpose of seeking to increase total return would exceed 5% of
the market value of the Fund's net assets. These transactions involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating a Fund to purchase securities or currencies, require the
Fund to segregate and maintain cash or liquid assets with a value equal to the
amount of the Fund's obligations or to otherwise cover the obligations in a
manner permitted by the SEC.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. See
"Investment Objectives and Policies--Futures Contracts and Options on Futures
Contracts" in the Additional Statement. Thus, while a Fund may benefit from
the use of futures and options on futures, unanticipated changes in interest
rates, securities prices or currency exchange rates may result in poorer
overall performance than if the Fund had not entered into any futures
contracts or options transactions. Because perfect correlation between a
futures position and portfolio position that is intended to be protected is
impossible to achieve, the desired protection may not be obtained and a Fund
may be exposed to risk of loss. The loss incurred by a Fund in entering into
futures contracts and in writing call options on futures is potentially
unlimited and may exceed the amount of the premium received. Futures markets
are highly volatile and the use of futures may increase the volatility of a
Fund's NAV. The profitability of a Fund's trading in futures to seek to
increase total return depends upon the ability of the Investment Adviser to
analyze correctly the futures markets. In addition, because of the low margin
deposits normally required in futures trading, a relatively small price
movement in a futures contract may result in substantial losses to a Fund.
Further, futures contracts and options on futures may be illiquid, and
exchanges may limit fluctuations in futures contract prices during a single
day. The Funds may engage in futures transactions on both U.S. and foreign
exchanges. Foreign exchanges may not provide the same protection as U.S.
exchanges.
STANDARD AND POOR'S DEPOSITORY RECEIPTS
Each Fund may, consistent with its objectives, purchase Standard & Poor's
Depository Receipts ("SPDRs"). SPDRs are American Stock Exchange-traded
securities that represent ownership in the SPDR Trust, a trust which has been
established to accumulate and hold a portfolio of common stocks that is
intended to track the price performance and dividend yield of the S&P 500.
This trust is sponsored by a subsidiary of the American Stock Exchange. SPDRs
may be used for several reasons, including but not limited to: facilitating
the handling of cash flows or trading, or reducing transaction costs. The use
of SPDRs would introduce additional risk to the Fund as the price movement of
the instrument does not perfectly correlate with the price action of the
underlying index.
EQUITY SWAPS
Each Fund may invest up to 10% of its total assets in equity swaps. Equity
swaps allow the parties to a swap agreement to exchange the dividend income or
other components of return on an equity investment (e.g., a group of equity
securities or an index) for a component of return on another non-equity or
equity investment. An equity swap may be used by a Fund to invest in a market
without owning or taking physical custody of securities
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in circumstances in which direct investment may be restricted for legal
reasons or is otherwise impractical. Equity swaps are derivatives and their
value can be very volatile. To the extent that the Investment Adviser does not
accurately analyze and predict the potential relative fluctuation of the
components swapped with another party, a Fund may suffer a loss. The value of
some components of an equity swap (such as the dividends on a common stock)
may also be sensitive to changes in interest rates. Furthermore, during the
period a swap is outstanding, a Fund may suffer a loss if the counterparty
defaults. In connection with its investments in equity swaps, a Fund will
either segregate cash or liquid assets or otherwise cover its obligations in a
manner required by the SEC.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS
Each Fund may purchase when-issued securities. When-issued transactions
arise when securities are purchased by a Fund with payment and delivery taking
place in the future in order to secure what is considered to be an
advantageous price and yield to the Fund at the time of entering into the
transaction. Each Fund may also purchase or sell securities on a forward
commitment basis; that is, make contracts to purchase or sell securities for a
fixed price at a future date beyond the customary three-day settlement period.
The purchase of securities on a when-issued or forward commitment basis
involves a risk of loss if the value of the security to be purchased declines
prior to the settlement date. Conversely, securities sold on a forward
commitment basis involve the risk that the value of the securities to be sold
may increase prior to the settlement date. Although a Fund would generally
purchase securities on a when-issued or forward commitment basis with the
intention of acquiring securities for its portfolio, a Fund may dispose of
when-issued securities or forward commitments prior to settlement if the
Investment Adviser deems it appropriate to do so. A Fund will segregate cash
or liquid assets in an amount sufficient to meet the purchase price until
three days prior to the settlement date. Alternatively, each Fund may enter
into offsetting contracts for the forward sale of other securities that it
owns.
ILLIQUID AND RESTRICTED SECURITIES
A Fund will not invest more than 15% of its net assets in illiquid
investments, which include securities (both foreign and domestic) that are not
readily marketable, certain SMBS, repurchase agreements maturing in more than
seven days, time deposits with a notice or demand period of more than seven
days, certain over-the-counter options, and certain restricted securities,
unless it is determined, based upon a review of the trading markets for a
specific restricted security, that such restricted security is eligible for
resale pursuant to Rule 144A under the Securities Act of 1933 and, therefore,
is liquid. The Trustees have adopted guidelines under which the Investment
Adviser determines and monitors the liquidity of portfolio securities, subject
to the oversight of the Trustees. Investing in restricted securities eligible
for resale pursuant to Rule 144A may decrease the liquidity of a Fund's
portfolio to the extent that qualified institutional buyers become for a time
uninterested in purchasing these restricted securities. The purchase price and
subsequent valuation of restricted and illiquid securities normally reflect a
discount, which may be significant, from the market price of comparable
securities for which a liquid market exists.
REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements with dealers in U.S.
Government securities and member banks of the Federal Reserve System which
furnish collateral at least equal in value or market price to the amount of
their repurchase obligation. The Balanced Fund may also enter into repurchase
agreements involving certain foreign government securities. If the other party
or "seller" defaults, a Fund might suffer a loss to the extent that the
proceeds from the sale of the underlying securities and other collateral held
by the Fund in connection
34
<PAGE>
with the related repurchase agreement are less than the repurchase price. In
addition, in the event of bankruptcy of the seller or failure of the seller to
repurchase the securities as agreed, a Fund could suffer losses, including
loss of interest on or principal of the security and costs associated with
delay and enforcement of the repurchase agreement. The Trustees have reviewed
and approved certain counterparties whom they believe to be creditworthy and
have authorized the Funds to enter into repurchase agreements with such
counterparties. In addition, each Fund, together with other registered
investment companies having management agreements with an Investment Adviser
or its affiliates, may transfer uninvested cash balances into a single joint
account, the daily aggregate balance of which will be invested in one or more
repurchase agreements.
LENDING OF PORTFOLIO SECURITIES
Each Fund may seek to increase its income by lending portfolio securities.
Under present regulatory policies, such loans may be made to institutions,
such as certain broker-dealers, and are required to be secured continuously by
collateral in cash, cash equivalents, or U.S. Government securities maintained
on a current basis in an amount at least equal to the market value of the
securities loaned. Cash collateral may be invested in cash equivalents. If the
Investment Adviser determines to make securities loans, the value of the
securities loaned may not exceed 33 1/3% of the value of the total assets of a
Fund (including the loan collateral). A Fund may experience a loss or delay in
the recovery of its securities if the institution with which it has engaged in
a portfolio loan transaction breaches its agreement with the Fund.
MORTGAGE DOLLAR ROLLS
The Balanced Fund may enter into mortgage "dollar rolls" in which the Fund
sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase substantially similar (same
type, coupon and maturity) but not identical securities on a specified future
date. During the roll period, the Fund loses the right to receive principal
and interest paid on the securities sold. However, the Fund would benefit to
the extent of any difference between the price received for the securities
sold and the lower forward price for the future purchase or fee income plus
the interest earned on the cash proceeds of the securities sold until the
settlement date for the forward purchase. Unless such benefits exceed the
income, capital appreciation and gain or loss due to mortgage prepayments that
would have been realized on the securities sold as part of the mortgage dollar
roll, the use of this technique will diminish the investment performance of
the Fund. The Fund will segregate cash or liquid assets in an amount equal to
the forward purchase price until the settlement date. Successful use of
mortgage dollar rolls depends upon the Investment Adviser's ability to predict
correctly interest rates and mortgage prepayments. There is no assurance that
mortgage dollar rolls can be successfully employed. For financial reporting
and tax purposes, the Fund treats mortgage dollar rolls as two separate
transactions: one involving the purchase of a security and a separate
transaction involving a sale. The Fund does not currently intend to enter into
mortgage dollar rolls that are accounted for as a financing.
SHORT SALES AGAINST-THE-BOX
Each Fund (other than the CORE Funds) may make short sales of securities or
maintain a short position, provided that at all times when a short position is
open the Fund owns an equal amount of such securities or securities
convertible into or exchangeable for, without payment of any further
consideration, an equal amount of the securities of the same issuer as the
securities sold short (a short sale against-the-box). Not more than 25% of a
Fund's net assets (determined at the time of the short sale) may be subject to
such short sales. As a result of recent tax legislation, short sales may not
generally be used to defer the recognition of gain for tax purposes with
respect to appreciated securities in a Fund's portfolio.
35
<PAGE>
TEMPORARY INVESTMENTS
Each Fund may, for temporary defensive purposes, invest 100% of its total
assets (except that the CORE Funds may only hold up to 35% of their respective
total assets) in U.S. Government securities, repurchase agreements
collateralized by U.S. Government securities, commercial paper rated at least
A-2 by Standard & Poor's or P-2 by Moody's, certificates of deposit, bankers'
acceptances, repurchase agreements, non-convertible preferred stocks and non-
convertible corporate bonds with a remaining maturity of less than one year.
When a Fund's assets are invested in such instruments, the Fund may not be
achieving its investment objective.
MISCELLANEOUS TECHNIQUES
In addition to the techniques and investments described above, each Fund
may, with respect to no more than 5% of its net assets, engage in the
following techniques and investments: (i) warrants and stock purchase rights;
(ii) currency swaps (Balanced Fund only); (iii) credit swaps, mortgage swaps,
index swaps and interest rate swaps, caps, floors and collars (Balanced Fund
only); (iv) yield curve options and inverse floating rate securities (Balanced
Fund only); (v) other investment companies including World Equity Benchmark
Shares; (vi) unseasoned companies; (vii) municipal securities (Balanced Fund
only); (viii) loan participations (Balanced Fund only); (ix) custodial
receipts; and (x) reverse repurchase agreements for investment purposes
(Balanced Fund only).
In addition, each Fund may borrow up to 33 1/3% of its total assets from
banks for temporary or emergency purposes. A Fund may not make additional
investments if borrowings (excluding covered mortgage dollar rolls) exceed 5%
of its total assets. For more information, see the Additional Statement.
RISK FACTORS
RISKS OF INVESTING IN EQUITY SECURITIES. In general, the Funds are subject
to the risks associated with investments in common stocks and other equity
securities. Stock values fluctuate in response to the activities of individual
companies and in response to general market and economic conditions and,
accordingly, the value of the stocks that a Fund holds may decline over short
or extended periods. The U.S. stock markets tend to be cyclical, with periods
when stock prices generally rise and periods when prices generally decline. As
of the date of this Prospectus, domestic stock markets were trading at or
close to record high levels and there can be no guarantee that such levels
will continue.
RISKS OF INVESTING IN SMALL CAPITALIZATION COMPANIES. Investing in the
securities of such companies involves greater risk and the possibility of
greater portfolio price volatility. Historically, small market capitalization
stocks and stocks of recently organized companies have been more volatile in
price than the larger market capitalization stocks included in the S&P 500
Index. Among the reasons for the greater price volatility of these small
company and unseasoned stocks are the less certain growth prospects of smaller
firms and the lower degree of liquidity in the markets for such stocks.
SPECIAL RISKS OF INVESTMENTS IN EMERGING MARKETS. Investing in the
securities of issuers in Emerging Countries involves risks in addition to
those discussed under "Description of Securities-- Foreign Investments." The
Growth and Income, Mid Cap Equity and Small Cap Value Funds may each invest up
to 25%, the Balanced Fund may invest up to 20% and the Capital Growth Fund may
invest up to 10% of their respective total assets in securities of issuers in
Emerging Countries. Emerging Countries are generally located in the Asia-
Pacific region, Eastern Europe, Latin and South America and Africa.
36
<PAGE>
Foreign investment in the securities markets of certain Emerging Countries
is restricted or controlled to varying degrees which may limit investment in
such countries or increase the administrative costs of such investments.
Certain countries may restrict or prohibit investment opportunities in issuers
or industries deemed important to national interests. Such restrictions may
affect the market price, liquidity and rights of securities that may be
purchased by a Fund. The repatriation of both investment income and capital
from certain Emerging Countries is subject to restrictions such as the need
for governmental consents. Many Emerging Countries may be subject to a greater
degree of economic, political and social instability than is the case in
Western Europe, the United States, Canada, Australia, New Zealand and Japan.
Many Emerging Countries do not have fully democratic governments. For example,
governments of some Emerging Countries are authoritarian in nature or have
been installed or removed as a result of military coups, while governments in
other Emerging Countries have periodically used force to suppress civil
dissent. Many Emerging Countries have experienced currency devaluations and
substantial and, in some cases, extremely high rates of inflation, which have
a negative effect on the economies and securities markets of such Emerging
Countries. Settlement procedures in Emerging Countries are frequently less
developed and reliable than those in the United States and may involve a
Fund's delivery of securities before receipt of payment for their sale. In
addition, significant delays are common in certain markets in registering the
transfer of securities. Settlement or registration problems may make it more
difficult for a Fund to value its portfolio securities and could cause the
Fund to miss attractive investment opportunities, to have a portion of its
assets uninvested or to incur losses due to the failure of a counterparty to
pay for securities the Fund has delivered or the Fund's inability to complete
its contractual obligations.
RISKS OF INVESTING IN FIXED-INCOME SECURITIES. When interest rates decline,
the market value of fixed- income securities tends to increase. Conversely,
when interest rates increase, the market value of fixed income securities
tends to decline. Volatility of a security's market value will differ
depending upon the security's duration, the issuer and the type of instrument.
Investments in fixed-income securities are subject to the risk that the issuer
could default on its obligations and a Fund could sustain losses on such
investments. A default could impact both interest and principal payments.
RISKS OF DERIVATIVE TRANSACTIONS. A Fund's transactions, if any, in options,
futures, options on futures, swaps, structured securities and currency
transactions involve certain risks, including a possible lack of correlation
between changes in the value of hedging instruments and the portfolio assets
(if any) being hedged, the potential illiquidity of the markets for derivative
instruments, the risks arising from margin requirements and related leverage
factors associated with such transactions. The use of these management
techniques to seek to increase total return may be regarded as a speculative
practice and involves the risk of loss if the Investment Adviser is incorrect
in its expectation of fluctuations in securities prices, interest rates or
currency prices. A Fund's use of certain derivative transactions may be
limited by the requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), for qualification as a regulated investment company.
INVESTMENT RESTRICTIONS
Each Fund is subject to certain investment restrictions that are described
in detail under "Investment Restrictions" in the Additional Statement.
Fundamental investment restrictions of a Fund cannot be changed without
approval of a majority of the outstanding Shares of that Fund as defined in
the Additional Statement. Each Fund's investment objectives and all policies
not specifically designated as fundamental are non-fundamental and may be
changed without shareholder approval. If there is a change in a Fund's
investment
37
<PAGE>
objectives, shareholders should consider whether that Fund remains an
appropriate investment in light of their then current financial positions and
needs.
PORTFOLIO TURNOVER
A high rate of portfolio turnover (100% or more) involves correspondingly
greater expenses which must be borne by a Fund and its shareholders. See
"Financial Highlights" for a statement of each Fund's historical portfolio
turnover rate (other than CORE Large Cap Value Fund). It is anticipated that
the annual portfolio turnover rate of the CORE Large Cap Value Fund will
generally not exceed 75%. The portfolio turnover rate is calculated by
dividing the lesser of the dollar amount of sales or purchases of portfolio
securities by the average monthly value of a Fund's portfolio securities,
excluding securities having a maturity at the date of purchase of one year or
less. The Investment Adviser will not consider the portfolio turnover rate a
limiting factor in making investment decisions for a Fund consistent with the
Fund's investment objectives and portfolio management policies.
MANAGEMENT
TRUSTEES AND OFFICERS
The Trustees are responsible for deciding matters of general policy and
reviewing the actions of the Investment Adviser, Distributor and transfer
agent. The officers of the Trust conduct and supervise each Fund's daily
business operations. The Additional Statement contains information as to the
identity of, and other information about, the Trustees and officers of the
Trust.
INVESTMENT ADVISERS
INVESTMENT ADVISERS. Goldman Sachs Asset Management, One New York Plaza,
New York, New York 10004, a separate operating division of Goldman Sachs,
serves as investment adviser to the Balanced, Growth and Income, CORE Large
Cap Value, CORE Large Cap Growth, CORE Small Cap Equity, Mid Cap Equity and
Small Cap Value Funds. Goldman Sachs registered as an investment adviser in
1981. Goldman Sachs Funds Management, L.P., One New York Plaza, New York,
New York 10004, a Delaware limited partnership which is an affiliate of
Goldman Sachs, serves as the investment adviser to the CORE U.S. Equity and
Capital Growth Funds. Goldman Sachs Funds Management, L.P. registered as an
investment adviser in 1990. As of August 21, 1998, GSAM and GSFM, together
with their affiliates, acted as investment adviser or distributor for assets
in excess of $168 billion.
Under a Management Agreement with each Fund, the applicable Investment
Adviser, subject to the general supervision of the Trustees, provides day-to-
day advice as to the Fund's portfolio transactions. Goldman Sachs has agreed
to permit the Funds to use the name "Goldman Sachs" or a derivative thereof as
part of each Fund's name for as long as a Fund's Management Agreement is in
effect.
In performing its investment advisory services, each Investment Adviser,
while remaining ultimately responsible for the management of the Funds, is
able to draw upon the research and expertise of its asset management
affiliates for portfolio decisions and management with respect to certain
portfolio securities. In addition, the Investment Adviser will have access to
the research of, and certain proprietary technical models
38
<PAGE>
developed by, Goldman Sachs and may apply quantitative and qualitative
analysis in determining the appropriate allocations among the categories of
issuers and types of securities.
Under the Management Agreement, the Investment Adviser also: (i) supervises
all non-advisory operations of each Fund that it advises; (ii) provides
personnel to perform such executive, administrative and clerical services as
are reasonably necessary to provide effective administration of each Fund;
(iii) arranges for at each Fund's expense (a) the preparation of all required
tax returns, (b) the preparation and submission of reports to existing
shareholders, (c) the periodic updating of prospectuses and Additional
Statements and (d) the preparation of reports to be filed with the SEC and
other regulatory authorities; (iv) maintains each Fund's records; and (v)
provides office space and all necessary office equipment and services.
FUND MANAGERS
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
------------------------- -------------------------- ----------- ----------------------------
<C> <C> <C> <S>
George D. Adler Senior Portfolio Manager-- Since Mr. Adler joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1990 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. From 1988 to 1990
he was a director of
portfolio management at
Banc One in Ohio.
- ------------------------------------------------------------------------------------------------------
Eileen A. Aptman Senior Portfolio Manager-- Since Ms. Aptman joined the
Vice President Mid Cap Equity 1996 Investment Adviser in
Small Cap Value 1997 1993. From 1990 to 1993,
she worked at Delphi
Management as an equity
analyst, focusing her
research efforts on
value stocks.
- ------------------------------------------------------------------------------------------------------
Jonathan A. Beinner Senior Portfolio Manager-- Since Mr. Beinner joined the
Managing Director and Balanced (Fixed Income) 1994 Investment Adviser in
Co-Head U.S. Fixed 1990. From 1988 to 1990,
Income he worked as a portfolio
manager at Franklin
Savings Association in
the trading and
arbitrage group.
- ------------------------------------------------------------------------------------------------------
Melissa Brown Senior Portfolio Manager-- Since Ms. Brown joined the
Vice President CORE Large Cap Value 1998 Investment Adviser in
CORE U.S. Equity 1998 1998. From 1984 to 1998,
CORE Large Cap Growth 1998 she was the director of
CORE Small Cap Equity 1998 Quantitative Equity
Research and served on
the Investment Policy
Committee at Prudential
Securities.
- ------------------------------------------------------------------------------------------------------
Kent A. Clark Senior Portfolio Manager-- Since Mr. Clark joined the
Vice President CORE Large Cap Value 1998 Investment Adviser in
CORE U.S. Equity 1996 1992.
CORE Large Cap Growth 1997
CORE Small Cap Equity 1997
- ------------------------------------------------------------------------------------------------------
Robert G. Collins Senior Portfolio Manager-- Since Mr. Collins joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1991 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. His past
experiences include work
as a special situations
analyst with Raymond
James & Associates for
five years.
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
-------------- ------------------- ----------- ----------------------------
<C> <C> <C> <S>
Herbert E. Ehlers Senior Portfolio Manager-- Since Mr. Ehlers joined the
Managing Director Capital Growth 1997 Investment Adviser in
1997. From 1994 to 1997,
he was the Chief
Investment Officer and
Chairman of Liberty
Investment Management,
Inc. He was a portfolio
manager and president at
Liberty's predecessor
firm, Eagle Asset
Management, from 1984 to
1994.
- -------------------------------------------------------------------------------------------------
Gregory H. Ekizian Senior Portfolio Manager-- Since Mr. Ekizian joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1990 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. and its predecessor
firm, Eagle Asset
Management.
- -------------------------------------------------------------------------------------------------
Paul D. Farrell Senior Portfolio Manager-- Since Mr. Farrell joined the
Vice President Mid Cap Equity 1998 Investment Adviser in
Small Cap Value 1992 1991. In 1998, he became
responsible for managing
the Investment Adviser's
Value team. During 1991,
he served as a managing
director at Plaza
Investment Managers, the
investment subsidiary of
GEICO Corp., a major
insurance company. From
1986 to 1991, he was
employed by Goldman
Sachs as a vice
president in the
investment research
department and was
responsible for the
formation of the firm's
Emerging Growth Research
Group.
- -------------------------------------------------------------------------------------------------
Greg Gigliotti Senior Portfolio Manager-- Since Mr. Gigliotti joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1997. From 1996 to 1997
Mid Cap Equity 1998 he was a Vice President
and senior analyst at
Franklin Mutual
Advisors, Inc., the
asset management
division of Franklin
Resources, Inc. From
1989 to 1996 he was a
Vice President and
senior analyst at Heine
Securities Corporation
which was purchased by
Franklin Resources, Inc.
- -------------------------------------------------------------------------------------------------
Robert C. Jones Senior Portfolio Manager-- Since Mr. Jones joined the
Managing Director CORE Large Cap Value 1998 Investment Adviser in
CORE U.S. Equity 1991 1989. From 1987 to 1989,
CORE Large Cap Growth 1997 he was the senior
CORE Small Cap Equity 1997 quantitative analyst in
the Goldman Sachs
Investment Research
Department and the
author of the monthly
Stock Selection
publication.
- -------------------------------------------------------------------------------------------------
Richard C. Lucy Senior Portfolio Manager-- Since Mr. Lucy joined the
Vice President and Balanced (Fixed Income) 1994 Investment Adviser in
Co-Head U.S. 1992. From 1983 to 1992,
Fixed Income he managed fixed income
assets at Brown Brothers
Harriman & Co.
- -------------------------------------------------------------------------------------------------
Matthew B. McLennan Senior Portfolio Manager-- Since Mr. McLennan joined the
Vice President Mid Cap Equity 1998 Investment Adviser in
Small Cap Value 1996 1995. From 1994 to 1995,
he worked in the
Investment Banking
Division of Goldman
Sachs in Australia. From
1991 to 1994, Mr.
McLennan worked at
Queensland Investment
Corporation in
Australia.
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
---------------------- -------------------------- ----------- ----------------------------
<C> <C> <C> <S>
Victor H. Pinter Senior Portfolio Manager-- Since Mr. Pinter joined the
Vice President CORE Large Cap Value 1998 Investment Adviser in
CORE U.S. Equity 1996 1990. From 1985 to 1990,
CORE Large Cap Growth 1997- he was a project manager
CORE Small Cap Equity 1997 in the Information
Technology Division of
the Investment Adviser.
- ----------------------------------------------------------------------------------------------------
Thomas S. Price Senior Portfolio Manager-- Since Mr. Price joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1997. From 1996 to 1997
Mid Cap Equity 1998 he was a Vice President
and senior analyst at
Franklin Mutual
Advisors, Inc., the
asset management
division of Franklin
Resources, Inc. From
1993 to 1996 he was a
Vice President and
senior analyst at Heine
Securities Corporation
which was purchased by
Franklin Resources, Inc.
- ----------------------------------------------------------------------------------------------------
David G. Shell Senior Portfolio Manager-- Since Mr. Shell joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1987 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. and its predecessor
firm, Eagle Asset
Management.
- ----------------------------------------------------------------------------------------------------
Ernest C. Segundo, Jr. Senior Portfolio Manager-- Since Mr. Segundo joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1992 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. From 1990 to 1992,
he was an equity
research analyst with
Fidelity Management &
Research Company.
- ----------------------------------------------------------------------------------------------------
Lawrence S. Sibley Senior Portfolio Manager-- Since Mr. Sibley joined the
Vice President Growth and Income 1997 Investment Adviser in
Balanced (Equity) 1997 1997. From 1994 to 1997,
Mid Cap Equity 1997 he headed Institutional
Equity Sales at J.P.
Morgan Securities and
from 1987 to 1994, he
was a principal of
Sanford C. Bernstein &
Co. in its Institutional
Sales Department.
- ----------------------------------------------------------------------------------------------------
Karma Wilson Senior Portfolio Manager-- Since Ms. Wilson joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1994. Prior to 1994, she
Mid Cap Equity 1998 was an investment
analyst with Bankers
Trust Australia Ltd.
Before 1992 she was
employed at Arthur
Andersen LLP.
</TABLE>
It is the responsibility of the Investment Adviser to make the investment
decisions for a Fund and to place the purchase and sale orders for the Fund's
portfolio transactions in U.S. and foreign markets. Such orders may be
directed to any broker including, to the extent and in the manner permitted by
applicable law, Goldman Sachs or its affiliates. In effecting purchases and
sales of portfolio securities for the Funds, the Investment Adviser will seek
the best price and execution of a Fund's orders. In doing so, where two or
more brokers or dealers offer comparable prices and execution for a particular
trade, consideration may be given to whether the broker or dealer provides
investment research or brokerage services or sells Shares of any Goldman Sachs
Fund. See the Additional Statement for a further description of the Investment
Adviser's brokerage allocation practices.
41
<PAGE>
As compensation for its services rendered and assumption of certain expenses
pursuant to separate Management Agreements, GSAM and GSFM are entitled to the
following fees, computed daily and payable monthly at the annual rates listed
below:
<TABLE>
<CAPTION>
FOR THE FISCAL
CONTRACTUAL YEAR OR PERIOD ENDED
RATE* JANUARY 31, 1998*
----------- --------------------
<S> <C> <C>
GSAM
----
Balanced.................................. 0.65% 0.65%
Growth and Income......................... 0.70% 0.70%
CORE Large Cap Value...................... 0.60% N/A
CORE Large Cap Growth..................... 0.75% 0.60%
CORE Small Cap Equity..................... 0.85% 0.75%
Mid Cap Equity............................ 0.75% 0.75%
Small Cap Value........................... 1.00% 1.00%
GSFM
----
CORE U.S. Equity.......................... 0.75% 0.59%
Capital Growth............................ 1.00% 1.00%
</TABLE>
- ---------------------
* All numbers are annualized. The difference, if any, between the stated fees
and the actual fees paid by the Funds reflects that the applicable
Investment Adviser did not charge the full amount of the fees to which it
would have been entitled. Effective September 1, 1998, the management fee
for the CORE U.S. Equity and CORE Small Cap Equity Funds will equal 0.70%
and 0.85%, respectively. As of January 31, 1998, the CORE Large Cap Value
Fund had not commenced operations. The Investment Adviser may discontinue
or modify any limitations in the future at its discretion.
The Investment Adviser has voluntarily agreed to reduce or limit certain
"Other Expenses" of the Funds (excluding management, distribution and service
fees, transfer agency fees, taxes, interest and brokerage fees and litigation,
indemnification and other extraordinary expenses) to the extent such expenses
exceed 0.01%, 0.05%, 0.00%, 0.00%, 0.00%, 0.04%, 0.00%, 0.10% and 0.06% per
annum of the average daily net assets of the Balanced, Growth and Income, CORE
Large Cap Value, CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap
Equity, Capital Growth, Mid Cap Equity and Small Cap Value Funds,
respectively. Such reductions or limits, if any, may be discontinued or
modified by the applicable Investment Adviser in its discretion at any time.
ACTIVITIES OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER ACCOUNTS MANAGED BY
GOLDMAN SACHS. The involvement of the Investment Adviser, Goldman Sachs and
their affiliates in the management of, or their interest in, other accounts
and other activities of Goldman Sachs may present conflicts of interest with
respect to a Fund or limit a Fund's investment activities. Goldman Sachs and
its affiliates engage in proprietary trading and advise accounts and funds
which have investment objectives similar to those of the Funds and/or which
engage in and compete for transactions in the same types of securities,
currencies and instruments as the Funds. Goldman Sachs and its affiliates will
not have any obligation to make available any information regarding their
proprietary activities or strategies, or the activities or strategies used for
other accounts managed by them, for the benefit of the management of the
Funds. The results of a Fund's investment activities, therefore, may differ
from those of Goldman Sachs and its affiliates and it is possible that a Fund
could sustain losses during periods in which Goldman Sachs and its affiliates
and other accounts achieve significant profits on their trading for
proprietary or other accounts. In addition, the Funds may, from time to time,
enter into transactions in which other clients of Goldman Sachs have an
adverse interest. From time to time, a Fund's activities may be limited
because of
42
<PAGE>
regulatory restrictions applicable to Goldman Sachs and its affiliates, and/or
their internal policies designed to comply with such restrictions. See
"Management--Activities of Goldman Sachs and its Affiliates and Other Accounts
Managed by Goldman Sachs" in the Additional Statement for further information.
DISTRIBUTOR AND TRANSFER AGENT
Goldman Sachs, 85 Broad Street, New York, New York 10004, serves as the
exclusive distributor (the "Distributor") of each Fund's Shares. Shares may
also be sold by Authorized Dealers. Authorized Dealers include investment
dealers that are members of the NASD and certain other financial service
firms. To become an Authorized Dealer, a dealer or financial service firm must
enter into a sales agreement with Goldman Sachs. The minimum investment
requirements, services, programs and purchase and redemption options for
Shares purchased through a particular Authorized Dealer may be different from
those available to investors purchasing through other Authorized Dealers.
Goldman Sachs, 4900 Sears Tower, Chicago, Illinois 60606, also serves as
each Fund's transfer agent (the "Transfer Agent") and as such performs various
shareholder servicing functions. As compensation for the services rendered to
each Fund by Goldman Sachs (as Transfer Agent), Goldman Sachs is entitled to a
fee with respect to each Fund's Class A, Class B and Class C Shares equal, on
an annual basis, to 0.19% of average daily net assets. Shareholders with
inquiries regarding any Fund should contact Goldman Sachs (as Transfer Agent)
at the address or the telephone number set forth on the back cover page of
this Prospectus.
From time to time, Goldman Sachs or any of its affiliates may purchase and
hold Shares of the Funds. Goldman Sachs reserves the right to redeem at any
time some or all of the Shares acquired for its own account.
YEAR 2000
Many computer systems were designed using only two digits to signify the
year (for example, "98" for "1998"). On January 1, 2000, if these computer
systems are not corrected, they may incorrectly interpret "00" as the year
"1900" rather than the year "2000," leading to computer shutdowns or errors
(commonly known as the "Year 2000 Problem"). To the extent these systems
conduct forward-looking calculations, these computer problems may occur prior
to January 1, 2000. Like other investment companies and financial and business
organizations, the Funds could be adversely affected in their ability to
process securities trades, price securities, provide shareholder account
services and otherwise conduct normal business operations if the computer
systems used by the Investment Adviser or other Fund service providers do not
adequately address this problem in a timely manner. The Investment Adviser has
established a dedicated group to analyze these issues and to implement the
systems modifications necessary to prepare for the Year 2000 Problem.
Currently, the Investment Adviser does not anticipate that the transition to
the 21st Century will have any material impact on its ability to continue to
service the Funds at current levels. In addition, the Investment Adviser has
sought assurances from the Funds' other service providers that they are taking
the steps necessary so that they do not experience Year 2000 Problems, and the
Investment Adviser will continue to monitor the situation. At this time,
however, no assurance can be given that the actions taken by the Investment
Adviser and the Funds' other service providers will be sufficient to avoid any
adverse effect on the Funds due to the Year 2000 Problem.
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<PAGE>
EXPENSES
The Funds are responsible for the payment of their expenses. The expenses
include, without limitation: fees payable to the Investment Adviser;
distribution and service fees; custodial and transfer agency fees; brokerage
fees and commissions; filing fees for the registration or qualification of the
Funds' Shares under federal or state securities laws, organizational expenses;
fees and expenses incurred in connection with membership in investment company
organizations; taxes; interest; costs of liability insurance, fidelity bonds
or indemnification; any costs, expenses or losses arising out of any liability
of, or claim for damages or other relief asserted against, the Funds for
violation of any law; legal and auditing fees and expenses (including the cost
of legal and certain accounting services rendered by employees of the
Investment Adviser and its affiliates with respect to the Funds); expenses of
preparing and setting in type prospectuses, Additional Statements, proxy
material, financial reports and notices and the printing and distributing of
the same to shareholders and regulatory authorities; compensation and expenses
of the Trust's "non-interested" Trustees; and extraordinary organizational
expenses, if any, incurred by the Trust.
REPORTS TO SHAREHOLDERS
Shareholders will receive an annual report containing audited financial
statements and a semi-annual report. To eliminate unnecessary duplication,
only one copy of such reports may be sent to shareholders with the same
mailing address. Shareholders who desire a duplicate copy of such reports to
be mailed to their residence should contact Goldman Sachs at 800-526-7384.
Each shareholder will also be provided with a printed confirmation for each
transaction in the shareholder's account and an individual quarterly account
statement. A year-to-date statement for any account will be provided upon
request made to Goldman Sachs. The Funds do not generally provide sub-
accounting services.
HOW TO INVEST
ALTERNATIVE PURCHASE ARRANGEMENTS
Each Fund continuously offers through this Prospectus Class A, Class B and
Class C Shares, as described more fully in "How to Buy Shares of the Funds."
If you do not specify in your instructions to the Funds which class of Shares
you wish to purchase, the Funds will assume that your instructions apply to
Class A Shares.
CLASS A SHARES. If you invest less than $1 million in Class A Shares you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A Shares of a
Fund, no sales charge will be imposed at the time of purchase, but you may
incur a deferred sales charge equal to 1.00% if you redeem your Shares within
18 months of purchase. Class A Shares are subject to distribution and service
fees of 0.25% per annum of each Fund's average daily net assets attributable
to Class A Shares.
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<PAGE>
CLASS B SHARES. Class B Shares are sold without an initial sales charge, but
are subject to a CDSC of up to 5% if redeemed within six years of purchase.
Class B Shares are subject to distribution and service fees of 1.00% per annum
of each Fund's average daily net assets attributable to Class B Shares. See
"Distribution and Service Plans." Class B Shares will automatically convert to
Class A Shares, based on their relative NAVs, eight years after the initial
purchase. Your entire investment in Class B Shares is available to work for
you from the time you make your initial investment, but the distribution and
service fee paid by Class B Shares will cause your Class B Shares (until
conversion to Class A Shares) to have a higher expense ratio and to pay lower
dividends, to the extent dividends are paid, than Class A Shares.
CLASS C SHARES. Class C Shares are sold without an initial sales charge, but
are subject to a CDSC of 1% if redeemed within 12 months of purchase. Class C
Shares are subject to distribution and service fees of 1.00% per annum of each
Fund's average daily net assets attributable to Class C Shares. See
"Distribution and Service Plans." Class C Shares have no conversion feature,
and accordingly, an investor that purchases Class C Shares will be subject to
the distribution and service fee imposed on Class C Shares for an indefinite
period, subject to annual approval by the Fund's Board of Trustees and certain
regulatory limitations. Your entire investment in Class C Shares is available
to work for you from the time you make your initial investment, but the
distribution and service fee paid by Class C Shares will cause your Class C
Shares to have a higher expense ratio and to pay lower dividends, to the
extent dividends are paid, than Class A Shares (or Class B Shares after
conversion to Class A Shares).
FACTORS TO CONSIDER IN CHOOSING CLASS A, CLASS B OR CLASS C SHARES. The
decision as to which class to purchase depends on the amount you invest, the
intended length of the investment and your personal situation. For example, if
you are making an investment of $50,000 or more that qualifies for a reduced
sales charge, you should consider purchasing Class A Shares. A brief
description of when the initial sales charge may be reduced or eliminated is
set forth below under "Right of Accumulation" and "Statement of Intention." If
you prefer not to pay an initial sales charge on an investment and plan to
hold your investment for at least six years, you might consider purchasing
Class B Shares. If you prefer not to pay an initial sales charge and are
unsure of the length of your investment or plan to hold your investment for
less than eight years, you may prefer Class C Shares. There is no size limit
on the purchase of Class A Shares. A maximum purchase limitation of $250,000
and $1,000,000 in the aggregate normally applies to purchases of Class B
Shares and Class C Shares, respectively. Although Class C Shares are subject
to a CDSC for only 12 months and at a lower rate than Class B Shares, Class C
Shares do not have the conversion feature applicable to Class B Shares, making
them subject to higher distribution and service fees for an indefinite period.
Authorized Dealers may receive different compensation for selling Class A,
Class B or Class C Shares.
HOW TO BUY SHARES OF THE FUNDS--CLASS A, CLASS B AND CLASS C SHARES
You may purchase Shares of the Funds through any Authorized Dealer
(including Goldman Sachs) or directly from a Fund, c/o National Financial Data
Services, Inc. ("NFDS"), P.O. Box 419711, Kansas City, MO 64141-6711 on any
Business Day (as defined under "Additional Information") at the NAV next
determined after receipt of an order as described below under "Other Purchase
Information," plus, in the case of Class A Shares, any applicable sales
charge. Currently, each Fund's NAV is determined as of the close of regular
trading on the New York Stock Exchange (which is normally, but not always,
4:00 p.m. New York time).
The minimum initial investment in each Fund is $1,000. An initial investment
minimum of $250 applies to purchases in connection with tax-sheltered
retirement plans, Individual Retirement Account Plans (excluding SIMPLE IRAs
and Education IRAs) or accounts established under the Uniform Gift to Minors
Act ("UGMA"),
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<PAGE>
and an initial investment minimum of $200 applies to purchases in connection
with 403(b) plans. The minimum initial investment for purchases in connection
with SIMPLE and Education IRAs, as well as purchases through the Automatic
Investment Plan, is $50. The minimum subsequent investment is $50. These
requirements may be waived at the discretion of the Trust's officers.
You may pay for purchases of Shares by check (except that the Trust will not
accept a check drawn on a foreign bank or a third party check), Federal
Reserve draft, federal funds wire, ACH transfer or bank wire. Purchases of
Shares by check or Federal Reserve draft should be made payable as follows:
(i) to an investor's Authorized Dealer, if purchased through such Authorized
Dealer, or (ii) to Goldman Sachs Domestic Equity Funds--(Name of Fund and
class of Shares) and sent to NFDS, P.O. Box 419711, Kansas City, MO 64141-
6711. Federal funds wires, ACH transfers and bank wires should be sent to
State Street Bank and Trust Company ("State Street"). Payment must be received
within three Business Days after receipt of the purchase order. An investor's
Authorized Dealer is responsible for forwarding payment promptly to the Fund.
In order to make an initial investment in a Fund, an investor must establish
an account with the Fund by furnishing to the Fund, Goldman Sachs or the
investor's Authorized Dealer the information in the Account Application
attached to this Prospectus. The Funds may refuse to open an account for any
investor who fails to (i) provide a social security number or other taxpayer
identification number; or (ii) certify that such number is correct (if
required to do so under applicable law).
The Funds reserve the right to redeem Shares of any shareholder whose
account balance is less than $50 as a result of earlier redemptions. Such
redemptions will not be implemented if the value of a shareholder's account
falls below the minimum account balance solely as a result of market
conditions. A Fund will give sixty (60) days' prior written notice to
shareholders whose Shares are being redeemed to allow them to purchase
sufficient additional Shares of the Fund to avoid such redemption. In
addition, the Funds and Goldman Sachs reserve the right to modify the minimum
investment, the manner in which Shares are offered and the sales charge rates
applicable to future purchases of Shares.
OFFERING PRICE--CLASS A SHARES
The offering price of Class A Shares of each Fund is the next determined NAV
per Share plus a sales charge, if any, paid to Goldman Sachs at the time of
purchase of Shares as shown in the following table:
<TABLE>
<CAPTION>
SALES CHARGE MAXIMUM DEALER
SALES CHARGE AS AS PERCENTAGE ALLOWANCE AS
AMOUNT OF PURCHASE PERCENTAGE OF OF NET AMOUNT PERCENTAGE OF
(INCLUDING SALES CHARGE, IF ANY) OFFERING PRICE INVESTED OFFERING PRICE***
- -------------------------------- --------------- ------------- -----------------
<S> <C> <C> <C>
Less than $50,000.............................. 5.50% 5.82% 5.00%
$50,000 up to (but less than) $100,000......... 4.75 4.99 4.00
$100,000 up to (but less than) $250,000........ 3.75 3.90 3.00
$250,000 up to (but less than) $500,000........ 2.75 2.83 2.25
$500,000 up to (but less than) $1 million...... 2.00 2.04 1.75
$1 million or more............................. 0.00* 0.00* **
</TABLE>
(footnotes on next page)
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<PAGE>
- --------
* No sales charge is payable at the time of purchase of Class A Shares of $1
million or more, but a CDSC may be imposed in the event of certain
redemption transactions made within 18 months of purchase.
** Goldman Sachs pays a one-time commission to Authorized Dealers who
initiate or are responsible for purchases of $1 million or more of Shares
of the Funds equal to 1.00% of the amount under $3 million, 0.50% of the
next $2 million, and 0.25% thereafter. Goldman Sachs may also pay, with
respect to all or a portion of the amount purchased, a commission in
accordance with the foregoing schedule to Authorized Dealers who initiate
or are responsible for plans investing in the Funds which satisfy the
criteria set forth in (h) below or "wrap" accounts purchasing $1 million
or more which satisfy the criteria set forth in (i) below. Purchases by
such plans will be made at NAV with no initial sales charge, but if all of
the Shares held are redeemed within 18 months after the end of the
calendar month in which such purchase was made, a CDSC, as described
below, of 1.00% may be imposed upon the plan sponsor or the third party
administrator. In addition, Authorized Dealers shall remit to Goldman
Sachs such payments received in connection with "wrap" accounts in the
event that Shares are redeemed within 18 months after the end of the
calendar month in which the purchase was made.
*** During special promotions, the entire sales charge may be reallowed to
Authorized Dealers. Authorized Dealers to whom substantially the entire
sales charge is reallowed may be deemed to be "underwriters" under the
Securities Act of 1933.
Purchases of $1 million or more of Class A Shares will be made at NAV with
no initial sales charge, but if the Shares are redeemed within 18 months after
the end of the calendar month in which the purchase was made, excluding any
period of time in which the Shares were exchanged into and remained invested
in an ILA Portfolio (the "CDSC period"), a CDSC of 1.00% may be imposed
unless, in certain cases, the investor's Authorized Dealer enters into an
agreement with Goldman Sachs to return all or an applicable prorated portion
of its commission to Goldman Sachs. Any applicable CDSC will be assessed on an
amount equal to the lesser of the current market value or the original
purchase cost of the redeemed Class A Shares. Accordingly, no CDSC will be
imposed on increases in account value above the initial purchase price,
including any dividend or capital gains distributions which have been
reinvested in additional Class A Shares. Upon redemption of Shares subject to
a CDSC, shareholders will receive that portion of the appreciation in account
value attributable to the Shares actually redeemed. In determining whether a
CDSC applies to a redemption, it will be assumed that the redemption is first
made from any Class A Shares in your account that are not subject to the CDSC.
The CDSC is waived on redemptions in certain circumstances. See "Waiver or
Reduction of Contingent Deferred Sales Charges" below.
Class A Shares of the Funds may be sold at NAV without payment of any sales
charge to: (a) Goldman Sachs, its affiliates or their respective officers,
partners, directors or employees (including retired employees and former
partners), any partnership of which Goldman Sachs is a general partner, any
Trustee or officer of the Trust and designated family members of any of the
above individuals; (b) qualified retirement plans of Goldman Sachs; (c)
trustees or directors of investment companies for which Goldman Sachs or an
affiliate acts as sponsor; (d) any employee or registered representative of
any Authorized Dealer or their respective spouses, children and parents; (e)
banks, trust companies or other types of depository institutions investing for
their own account or investing for accounts for which they have investment
discretion; (f) banks, trust companies or other types of depository
institutions investing for accounts for which they do not have investment
discretion; (g) any state, county or city, or any instrumentality, department,
authority or agency thereof, which is prohibited by applicable investment laws
from paying a sales charge or commission in connection with the purchase of
Shares of a Fund; (h) pension and profit sharing plans, pension funds and
other company-sponsored benefit plans that (1) buy Shares worth $500,000 or
more, or (2) have at the time of purchase, 100 or more eligible participants,
or (3) certify that they project to have annual plan purchases of $200,000 or
more, or (4) are provided administrative services by certain third-party
administrators that have entered into a special service arrangement with
Goldman
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<PAGE>
Sachs relating to such plan; (i) "wrap" accounts for the benefit of clients of
broker-dealers, financial institutions or financial planners, provided that
they have entered into an agreement with GSAM specifying aggregate minimums
and certain operating policies and standards; (j) registered investment
advisers investing for accounts for which they receive asset-based fees; (k)
accounts over which GSAM or its advisory affiliates have investment
discretion; and (l) shareholders receiving distributions from a qualified
retirement plan invested in the Goldman Sachs Funds and reinvesting such
proceeds in a Goldman Sachs IRA. Purchasers must certify eligibility for an
exemption on the Account Application and notify Goldman Sachs if the
shareholder is no longer eligible for an exemption. Exemptions will be granted
subject to confirmation of a purchaser's entitlement. Investors purchasing
Shares of the Funds at NAV without payment of any initial sales charge may be
charged a fee if they effect transactions in Shares through a broker or agent.
In addition, under certain circumstances, dividends and distributions from any
of the Goldman Sachs Funds may be reinvested in Shares of each Fund at NAV, as
described under "Cross-Reinvestment of Dividends and Distributions and
Automatic Exchange Program."
RIGHT OF ACCUMULATION--CLASS A SHARES
Class A purchasers may qualify for reduced sales charges when the current
market value of holdings (Shares at current offering price), plus new
purchases, reaches $50,000 or more. Class A Shares of the Goldman Sachs Funds
may be combined under the Right of Accumulation. See the Additional Statement
for more information about the Right of Accumulation.
STATEMENT OF INTENTION--CLASS A SHARES
Purchases of $50,000 or more made over a 13-month period are eligible for
reduced sales charges. Class A Shares of the Goldman Sachs Funds may be
combined under the Statement of Intention. See the Additional Statement for
more information about the Statement of Intention.
OFFERING PRICE--CLASS B SHARES
Investors may purchase Class B Shares of the Funds at the next determined
NAV without the imposition of an initial sales charge. However, Class B Shares
redeemed within six years of purchase will be subject to a CDSC at the rates
shown in the table below. At redemption, the charge will be assessed on the
amount equal to the lesser of the current market value or the original
purchase cost of the Shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including Shares
derived from the reinvestment of dividends or capital gains distributions.
Upon redemption of Shares subject to a CDSC, shareholders will receive that
portion of the appreciation in account value attributable to the Shares
actually redeemed.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B Shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a month will be aggregated and deemed to have been made on
the first day of that month. In processing redemptions of Class B Shares, the
Funds will first redeem Shares not subject to any CDSC, and then Shares held
longest during the applicable period.
<TABLE>
<CAPTION>
CDSC AS A
PERCENTAGE OF
YEAR SINCE DOLLAR AMOUNT
PURCHASE SUBJECT TO CDSC
---------- ---------------
<S> <C>
First........................................................ 5.0%
Second....................................................... 4.0%
Third........................................................ 3.0%
Fourth....................................................... 3.0%
Fifth........................................................ 2.0%
Sixth........................................................ 1.0%
Seventh and thereafter....................................... none
</TABLE>
48
<PAGE>
Proceeds from the CDSC are payable to the distributor and may be used in
whole or part to defray the distributor's expenses related to providing
distribution-related services to the Funds in connection with the sale of
Class B Shares, including the payment of compensation to Authorized Dealers. A
commission equal to 4.00% of the amount invested is paid to Authorized
Dealers.
Class B Shares of a Fund will automatically convert into Class A Shares of
the same Fund at the end of the calendar quarter that is eight years after the
purchase date, except as noted below. Class B Shares of a Fund acquired by
exchange from Class B Shares of another Goldman Sachs Fund will convert into
Class A Shares of such Fund based on the date of the initial purchase. Class B
Shares acquired through reinvestment of distributions will convert into Class
A Shares based on the date of the initial purchase of the Shares on which the
distribution was paid. The conversion of Class B Shares to Class A Shares will
not occur at any time the Funds are advised that such conversions may
constitute taxable events for federal tax purposes, which the Funds believe is
unlikely. If conversions do not occur as a result of possible taxability,
Class B Shares would continue to be subject to higher expenses than Class A
Shares for an indeterminate period.
OFFERING PRICE--CLASS C SHARES
Investors may purchase Class C Shares of the Funds at the next determined
NAV without the imposition of an initial sales charge. However, if Class C
Shares are redeemed within 12 months of purchase, a CDSC of 1% will be
deducted from the redemption proceeds. At redemption, the charge will be
assessed on the amount equal to the lesser of the current market value or the
original purchase cost of the Shares being redeemed. No CDSC will be imposed
on increases in account value above the initial purchase price, including
Shares derived from the reinvestment of dividends or capital gains
distributions. Upon redemption of Shares subject to a CDSC, shareholders will
receive that portion of the appreciation in account value attributable to the
Shares actually redeemed.
For the purpose of determining the number of months from the time of any
purchase, all payments during a month will be aggregated and deemed to have
been made on the first day of that month. In processing redemptions of Class C
Shares, the Funds will first redeem Shares held for longer than 12 months, and
then Shares held for the longest period during the 12 month period. Proceeds
from the CDSC are payable to the Distributor and may be used in whole or in
part to defray the Distributor's expenses related to providing distribution-
related services to the Funds in connection with the sale of Class C Shares,
including the payment of compensation to Authorized Dealers. An amount equal
to 1.00% of the amount invested is paid by the Distributor to Authorized
Dealers.
REINVESTMENT OF REDEMPTION PROCEEDS--CLASS A, CLASS B AND CLASS C SHARES
A shareholder who redeems Class A or Class B Shares of a Fund may reinvest
at NAV any portion or all of the redemption proceeds (plus that amount
necessary to acquire a fractional Share to round off his purchase to the
nearest full Share) in Class A Shares of the same Fund or any other Goldman
Sachs Fund. A shareholder who redeems Class C Shares of a Fund may reinvest at
NAV any portion or all of the redemption proceeds (plus that amount necessary
to acquire a fractional Share to round off the purchase to the nearest full
Share) in Class C Shares of the same Fund or any other Goldman Sachs Fund.
Shareholders should obtain and read the applicable prospectuses of such other
funds and consider their objectives, policies and applicable fees before
investing in any of such funds. This reinvestment privilege is subject to the
condition that the Shares redeemed have been held for at least thirty (30)
days before the redemption and that the reinvestment is effected within ninety
(90) days after such redemption. If you redeemed Class A or Class C Shares,
paid a CDSC upon redemption and
49
<PAGE>
reinvest in Class A or Class C Shares subject to the conditions set forth
above, your account will be credited with the amount of the CDSC previously
charged, and the reinvested Shares will continue to be subject to a CDSC. In
this case, the holding period of the Class A or Class C Shares acquired
through reinvestment for purposes of computing the CDSC payable upon a
subsequent redemption will include the holding period of the redeemed Shares.
If you redeemed Class B Shares and paid a CDSC upon redemption, you are
permitted to reinvest the redemption proceeds in Class A Shares at NAV as
described above, but the amount of the CDSC paid upon redemption will not be
credited to your account.
A reinvesting shareholder may be subject to tax as a result of such
redemption. If the redemption occurs within 90 days after the original
purchase of Class A Shares, any sales charge paid on the original purchase
cannot be taken into account by a reinvesting shareholder to the extent an
otherwise applicable sales charge is not imposed pursuant to the reinvestment
privilege for purposes of determining gain or loss, if any, realized on the
redemption, but instead will be added to the tax basis of the Class A Shares
received in the reinvestment. To the extent that any loss is realized and
Shares of the same Fund are purchased within 30 days before or after the
redemption, some or all of the loss may not be allowed as a deduction
depending upon the number of Shares purchased. Shareholders should consult
their own tax advisers concerning the tax consequences of a redemption and
reinvestment. Upon receipt of a written request, the reinvestment privilege
may be exercised once annually by a shareholder, except that there is no such
time limit as to the availability of this privilege in connection with
transactions the sole purpose of which is to reinvest the proceeds at NAV in a
tax-sheltered retirement plan.
WAIVER OR REDUCTION OF CONTINGENT DEFERRED SALES CHARGE--CLASS A, B AND C
SHARES
The CDSC on Class B, Class C and Class A Shares that are subject to a CDSC
may be waived or reduced if the redemption relates to: (a) retirement
distributions or loans to participants or beneficiaries from pension and
profit sharing plans, pension funds and other company-sponsored benefit plans
(each a "Plan"); (b) the death or disability (as defined in Section 72(m)(7)
of the Code) of a participant or beneficiary in a Plan; (c) hardship
withdrawals by a participant or beneficiary in a Plan; (d) satisfying the
minimum distribution requirements of the Code; (e) the establishment of
"substantially equal periodic payments" as described in Section 72(t)(2) of
the Code; (f) the separation from service by a participant or beneficiary in a
Plan; (g) the death or disability (as defined in Section 72(m)(7) of the Code)
of a shareholder if the redemption is made within one year of such event; (h)
excess contributions distributed from a Plan; (i) distributions from a
qualified retirement plan invested in the Goldman Sachs Funds which are being
rolled over to a Goldman Sachs IRA; and (j) redemption proceeds which are to
be reinvested in accounts or non-registered products over which GSAM or its
advisory affiliates have investment discretion. In addition, Class A, Class B
and Class C Shares subject to a Systematic Withdrawal Plan may be redeemed
without a CDSC. However, Goldman Sachs reserves the right to limit such
redemptions, on an annual basis, to 12% each of the value of your Class B and
Class C Shares and 10% of the value of your Class A Shares.
SERVICES AVAILABLE TO SHAREHOLDERS
AUTOMATIC INVESTMENT PLAN
Systematic cash investments may be made through a shareholder's bank via the
Automated Clearing House Network or a shareholder's checking account via bank
draft each month. Required forms are available from Goldman Sachs or any
Authorized Dealer.
50
<PAGE>
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS AND AUTOMATIC EXCHANGE
PROGRAM
A shareholder may elect to cross-reinvest dividends and capital gain
distributions paid by a Fund in Shares of the same class or an equivalent
class of other Goldman Sachs Funds or ILA Portfolios. See "Fund Highlights." A
shareholder may also elect to exchange automatically a specified dollar amount
of Shares of a Fund for Shares of the same Class or an equivalent class of any
other Goldman Sachs Fund or ILA Portfolio. Shares acquired through cross-
reinvestment of dividends or the automatic exchange program will be purchased
at NAV and will not be subject to any initial sales charge or CDSC as a result
of the cross-reinvestment or exchange, but Shares subject to a CDSC acquired
under the automatic exchange program may be subject to a CDSC at the time of
redemption from the fund into which the exchange is made determined on the
basis of the date and value of the investor's initial purchase of the Fund
from which the exchange (or any prior exchange) is made. Automatic exchanges
are made monthly on the 15th day of each month or the first Business Day
thereafter. The minimum dollar amount for automatic exchanges must be at least
$50 per month. Cross-reinvestments and automatic exchanges are subject to the
following conditions: (i) the value of the shareholder's account(s) in the
Fund which is paying the dividend or from which the automatic exchange is
being made must equal or exceed $5,000; and (ii) the value of the account in
the acquired fund must equal or exceed the acquired fund's minimum initial
investment requirement or the shareholder must elect to continue cross-
reinvestment or automatic exchanges until the value of acquired fund Shares in
the shareholder's account equals or exceeds the acquired fund's minimum
initial investment requirement. A Fund shareholder may elect cross-
reinvestment into an identical account or an account registered in a different
name or with a different address, social security or other taxpayer
identification number, provided that the account in the acquired fund has been
established, appropriate signatures have been obtained and the minimum initial
investment requirement has been satisfied. A Fund shareholder should obtain
and read the prospectus of the fund into which dividends are invested or
automatic exchanges are made.
TAX-SHELTERED RETIREMENT PLANS
The Funds offer their Shares for purchase by retirement plans, including
traditional and Roth IRAs for individuals and their spouses, IRA plans for
employees in connection with employer sponsored SEP, SAR-SEP and SIMPLE IRA
plans, 403(b) plans and defined contribution plans such as 401(k) Salary
Reduction Plans. Detailed information concerning these plans may be obtained
from the Transfer Agent. The information sets forth the service fee charged
for retirement plans and describes the federal income tax consequences of
establishing a plan. This information should be read carefully, and
consultation with an attorney or tax adviser may be advisable.
EXCHANGE PRIVILEGE
Shares of a Fund may be exchanged at NAV without the imposition of an
initial sales charge or CDSC at the time of exchange for Shares of the same
class or an equivalent class of any other Fund, Goldman Sachs Fund or ILA
Portfolio. A shareholder needs to obtain and read the prospectus of the fund
into which the exchange is made. The Shares of these other funds acquired by
an exchange may later be exchanged for Shares of the same class (or an
equivalent class) of the original Fund at the next determined NAV without the
imposition of an initial sales charge or CDSC if the dollar amount in the Fund
resulting from such exchanges is below the shareholder's all-time highest
dollar amount on which it has previously paid the applicable sales charge.
Shares of these other funds purchased through dividends and/or capital gains
reinvestment may be exchanged for Shares of the Funds without a sales charge.
In addition to free automatic exchanges pursuant to the Automatic Exchange
Program, six free exchanges are permitted in each 12 month period. A fee of
$12.50 may be charged for each subsequent exchange during such period. The
exchange privilege may be materially modified or withdrawn at any time upon 60
days' notice to shareholders and is subject to certain limitations.
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<PAGE>
An exchange of Shares subject to a CDSC will not be subject to the
applicable CDSC at the time of exchange. Shares subject to a CDSC acquired in
an exchange will be subject to the CDSC of the Shares originally held. For
purposes of determining the amount of any applicable CDSC, the length of time
a shareholder has owned Shares will be measured from the date the shareholder
acquired the original Shares subject to a CDSC and will not be affected by any
subsequent exchange.
An exchange may be made by identifying the applicable Fund and Class of
Shares and either writing to Goldman Sachs, Attention: Goldman Sachs Domestic
Equity Funds, Shareholder Services, c/o NFDS, P.O. Box 419711, Kansas City, MO
64141-6711 or, unless the investor has specifically declined telephone
exchange privileges on the Account Application or elected in writing not to
utilize telephone exchanges, by a telephone request to the Transfer Agent at
800-526-7384 (7:00 a.m. to 3:00 p.m. Chicago time). Certain procedures are
employed to prevent unauthorized or fraudulent exchange requests as set forth
under "How to Sell Shares of the Funds." Under the telephone exchange
privilege, Shares may be exchanged among accounts with different names,
addresses and social security or other taxpayer identification numbers only if
the exchange instructions are in writing and received in accordance with the
procedures set forth under "How to Sell Shares of the Funds." In times of
drastic economic or market changes the telephone exchange privilege may be
difficult to implement.
For federal income tax purposes, an exchange, including an automatic
exchange, is treated as a redemption of the Shares surrendered in the
exchange, on which an investor may be subject to tax, followed by a purchase
of Shares received in the exchange. If such redemption occurs within ninety
(90) days after the purchase of such Shares, to the extent a sales charge that
would otherwise apply to the Shares received in the exchange is not imposed,
the sales charge paid on such purchase of Class A Shares cannot be taken into
account by the exchanging shareholder for purposes of determining gain or
loss, if any, realized on such redemption for federal income tax purposes, but
instead will be added to the tax basis of the Shares received in the exchange.
Shareholders should consult their own tax advisers concerning the tax
consequences of an exchange.
Eligible investors may exchange certain classes of Shares for another class
of Shares of the same Fund. For further information, call Goldman Sachs at the
number set forth on the back of the Prospectus.
All exchanges which represent an initial investment in a Fund must satisfy
the minimum investment requirements of the Fund into which the Shares are
being exchanged. Exchanges are available only in states where exchanges may
legally be made.
OTHER PURCHASE INFORMATION
Authorized Dealers and other financial intermediaries may be authorized to
accept, on the Trust's behalf, purchase, redemption and exchange orders placed
by or on behalf of their customers and, if approved by the Trust, to designate
other intermediaries to accept such orders. In these cases, a Fund will be
deemed to have received an order that is in proper form when the order is
accepted by an Authorized Dealer or intermediary on a Business Day, and the
order will be priced at a Fund's NAV per Share (adjusted for any applicable
sales charge) next determined after such acceptance. Otherwise, a Fund or
Goldman Sachs must receive an order in proper form before it is effective.
Authorized Dealers and intermediaries will be responsible for transmitting
accepted orders to the Funds within the period agreed upon by them. Customers
should contact their Authorized Dealers or intermediaries to learn whether
they are authorized to accept orders for the Trust.
Authorized Dealers and other financial intermediaries provide varying
arrangements for their clients to purchase and redeem Fund Shares. Some may
establish higher minimum investment requirements and others may limit the
availability of certain privileges with respect to the purchase and redemption
of Shares or the
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reinvestment of dividends. Firms may arrange with their clients for other
investment or administrative services and may independently establish and
charge additional fees not described in this Prospectus to their clients for
such services. If Shares of a Fund are held in a "street name" account or were
purchased through an Authorized Dealer, shareholders should contact the
Authorized Dealer to purchase, redeem or exchange Shares, to make changes in
or give instructions concerning the account or to obtain information about the
account.
The Funds and Goldman Sachs each reserves the right to reject any specific
purchase order (including exchanges) or to restrict purchases or exchanges by
a particular purchaser (or group of related purchasers). This may occur, for
example, when a purchaser or a group of purchasers' pattern of frequent
purchases, sales or exchanges of Shares of a Fund is evident, or if purchases,
sales or exchanges are, or a subsequent abrupt redemption might be, of a size
that would disrupt management of a Fund.
In the sole discretion of Goldman Sachs, a Fund may accept securities
instead of cash for the purchase of Shares of the Fund. Such purchases will be
permitted only if the Investment Adviser determines that any securities
acquired in this manner are consistent with the Fund's investment objectives,
restrictions and policies and are desirable investments for the Fund.
The Investment Adviser, Distributor, and/or their affiliates also pay
additional compensation, from time to time, out of their assets and not as an
additional charge to the Funds, to selected Authorized Dealers and other
persons in connection with the sale, distribution and/or servicing of Shares
of the Funds and other Goldman Sachs Funds (such as additional payments based
on new sales, amounts exceeding pre-established thresholds, or the length of
time their customers' assets have remained in a Fund) and, subject to
applicable NASD regulations, contribute to various non-cash and cash incentive
arrangements to promote the sale of Shares, as well as sponsor various
educational programs, sales contests and/or promotions in which participants
may receive reimbursement of expenses, entertainment and prizes such as travel
awards, merchandise, cash, investment research and educational information and
related support materials. This additional compensation can vary among
Authorized Dealers depending upon such factors as the amounts their customers
have invested (or may invest) in particular Goldman Sachs Funds, the
particular program involved, or the amount of reimbursable expenses.
Additional compensation based on sales may, but is currently not expected to,
exceed 0.50% (annualized) of the amount invested. For further information, see
"Other Information Regarding Purchases, Redemptions, Exchanges and Dividends"
in the Additional Statement.
DISTRIBUTION AND SERVICE PLANS
The Trust has adopted distribution and service plans on behalf of the Funds'
Class A, Class B and Class C Shares (each a "Plan"). Under the Plans, Goldman
Sachs is entitled to a monthly fee from each Fund for distribution services
equal, on an annual basis, to 0.25%, 0.75% and 0.75%, respectively, of a
Fund's average daily net assets attributable to Class A, Class B and Class C
Shares, respectively.
Goldman Sachs may use this distribution fee for its expenses of distributing
Class A, Class B and Class C Shares of the Funds. The types of expenses for
which Goldman Sachs may be compensated for distribution services under the
Plans include: compensation paid to and expenses incurred by Authorized
Dealers, Goldman Sachs and their respective officers, employees and sales
representatives; commissions paid to Authorized Dealers; allocable overhead;
telephone and travel expenses; interest expenses and other costs associated
with the
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financing of such compensation and expenses; the printing of prospectuses for
prospective shareholders; preparation and distribution of sales literature and
advertising of any type; and all other expenses incurred in connection with
activities primarily intended to result in the sale of Class A, Class B and
Class C Shares. Goldman Sachs may also use payments under the Class A Plan for
personal and account maintenance services as described below. The aggregate
compensation that may be received under the Plans for distribution services
may not exceed the limitations imposed by the NASD's Conduct Rules. Payments
for distribution services are also subject to the requirements of Rule 12b-1
under the Act.
Under the Plans for Class B and Class C Shares, Goldman Sachs is also
entitled to receive a separate fee equal on an annual basis to 0.25% of each
Fund's average daily net assets attributable to Class B or Class C Shares.
This fee is for personal and account maintenance services, and may be used to
make payments to Goldman Sachs, Authorized Dealers and their officers, sales
representatives and employees for responding to inquiries of, and furnishing
assistance to, shareholders regarding ownership of their Shares or their
accounts or similar services not otherwise provided on behalf of the Funds. If
the distribution or service fees received by Goldman Sachs pursuant to the
Plans exceed its expenses, Goldman Sachs may realize a profit from these
arrangements. The Plans will be reviewed and are subject to approval annually
by the Trustees.
In connection with the sale of Class C Shares, Goldman Sachs begins paying
the 0.75% distribution fee as an ongoing commission, and the 0.25% ongoing
service fee, to Authorized Dealers after the Shares have been held for one
year. All of these fees are paid by Goldman Sachs on a quarterly basis.
HOW TO SELL SHARES OF THE FUNDS
Each Fund will redeem its Shares upon the request of a shareholder on any
Business Day at the NAV next determined after the receipt of such request in
proper form, subject to any applicable CDSC. See "Net Asset Value." Redemption
proceeds will normally be mailed by check to a shareholder within three
Business Days of receipt of a properly executed request. If the Shares to be
redeemed were recently purchased by check, a Fund may delay transmittal of
redemption proceeds until such time as it has assured itself that good funds
have been collected for the purchase of such Shares. This may take up to 15
days. Redemption requests may be made by writing to or calling the Transfer
Agent at the address or telephone number set forth on the back cover page of
this Prospectus or an Authorized Dealer.
The Trust accepts telephone requests for redemption of Shares for amounts up
to $50,000 within any seven calendar day period, except for investors who have
specifically declined telephone redemption privileges on the Account
Application or elected in writing not to utilize telephone redemptions
(proceeds which are sent to a Goldman Sachs brokerage account are not subject
to the $50,000 limit). It may be difficult to implement redemptions by
telephone in times of drastic economic or market changes. By completing an
Account Application, an investor agrees that the Trust, the Distributor and
the Transfer Agent shall not be liable for any loss incurred by the investor
by reason of the Trust accepting unauthorized telephone redemption requests if
the Trust reasonably believes the instructions to be genuine. Thus,
shareholders risk possible losses in the event of a telephone redemption not
authorized by them. The Trust may accept telephone redemption instructions
from any person identifying himself or herself as the owner of an account or
the owner's broker where the owner has not declined in writing to utilize this
service.
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In an effort to prevent unauthorized or fraudulent redemption and exchange
requests by telephone, Goldman Sachs and NFDS each employ reasonable
procedures specified by the Trust to confirm that such instructions are
genuine. Consequently, proceeds of telephone redemption requests will be sent
only to the shareholder's address of record or authorized bank account
designated in the Account Application and exchanges of Shares will be made
only to an identical account. Telephone requests will also be recorded. The
Trust may implement other procedures from time to time concerning telephone
redemptions and exchanges. If reasonable procedures are not employed, the
Trust may be liable for any loss due to unauthorized or fraudulent
transactions. Proceeds of telephone redemptions will be mailed to the
shareholder's address of record or wired to the authorized bank account
indicated on the Account Application, unless the shareholder provides written
instructions (accompanied by a signature guarantee) indicating another
address. Telephone redemptions will not be accepted during the 30-day period
following any change in a shareholder's address of record. This redemption
option does not apply to Shares held in a "street name" account. Shareholders
whose accounts are held in "street name" should contact their broker of record
who may effect telephone redemptions on their behalf. The Trust reserves the
right to terminate or modify the telephone redemption service at any time.
Written requests for redemptions must be signed by each shareholder with its
signature guaranteed by a bank, a securities broker or dealer, a credit union
having authority to issue signature guarantees, a savings and loan
association, a building and loan association, a cooperative bank, a federal
savings bank or association, a national securities exchange, a registered
securities association or a clearing agency, provided that such institution
satisfies the standards established by the Transfer Agent.
The Funds will also arrange for the proceeds of redemptions effected by any
means to be wired as federal funds to the bank account designated in the
shareholder's Account Application. Redemption proceeds will normally be wired
on the next Business Day in federal funds (for a total of one Business Day
delay) following receipt of a properly executed wire transfer redemption
request. Wiring of redemption proceeds may be delayed one additional Business
Day if the Federal Reserve Bank is closed on the day redemption proceeds would
ordinarily be wired. A transaction fee of $7.50 may be charged for payments of
redemption proceeds by wire. In order to change the bank designated on the
Account Application to receive redemption proceeds, a written request must be
received by the Transfer Agent. This request must be signature guaranteed as
set forth above. Further documentation may be required for executors, trustees
or corporations. Once wire transfer instructions have been given by Goldman
Sachs or an Authorized Dealer, neither a Fund, the Trust, Goldman Sachs nor
any Authorized Dealer assumes any further responsibility for the performance
of intermediaries or the shareholder's bank in the transfer process. If a
problem with such performance arises, the shareholder should deal directly
with such intermediaries or bank.
Additional documentation regarding a redemption by any means may be required
to effect a redemption when deemed appropriate by the Transfer Agent. The
request for such redemption will not be considered to have been received in
proper form until such additional documentation has been received.
SYSTEMATIC WITHDRAWAL PLAN
A shareholder may draw on shareholdings systematically via check or ACH in
any amount specified by the shareholder over $50. Checks are only available on
or about the 25th of each month. Each systematic withdrawal is a redemption
and therefore a taxable transaction. A minimum balance of $5,000 in Shares of
a Fund is required. The maintenance of a withdrawal plan concurrently with
purchases of additional Class A, Class B or Class C Shares would be
disadvantageous because of the sales charge imposed on your purchases of Class
A Shares or the imposition of a CDSC on your redemptions of Class A, Class B
or Class C Shares. The CDSC
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applicable to Class A, Class B or Class C Shares redeemed under a systematic
withdrawal plan may be waived. See "How to Invest--Waiver or Reduction of
Contingent Deferred Sales Charge." See the Additional Statement for more
information about the Systematic Withdrawal Plan.
DIVIDENDS
Each dividend from net investment income and capital gains distributions, if
any, declared by a Fund on its outstanding Shares will, at the election of
each shareholder, be paid in: (i) cash; (ii) additional Shares of the same
class of the Fund; or (iii) Shares of the same or an equivalent class of other
Goldman Sachs Funds or units of the ILA Portfolios (the Prime Obligations
Portfolio only for Class B and Class C), as described under "Cross-
Reinvestment of Dividends and Distributions and Automatic Exchange Program."
This election should initially be made on a shareholder's Account Application
and may be changed upon written notice to Goldman Sachs at any time prior to
the record date for a particular dividend or distribution. If no election is
made, all dividends from net investment income and capital gain distributions
will be reinvested in the applicable Fund.
The election to reinvest dividends and distributions paid by a Fund in
additional Shares or units of the Fund or another Goldman Sachs Fund or ILA
Portfolio will not affect the tax treatment of such dividends and
distributions, which will be treated as received by the shareholder and then
used to purchase Shares or units of the Fund, another Goldman Sachs Fund or an
ILA Portfolio.
Each Fund intends that all or substantially all of its net investment income
and net realized capital gains, after reduction by available capital losses,
including any capital losses carried forward from prior years, will be
declared as dividends for each taxable year. The Balanced, CORE Large Cap
Value and Growth and Income Funds will pay dividends from net investment
income quarterly. Each other Fund will pay dividends at least annually. All of
the Funds will pay dividends from net investment income, and dividends from
net realized capital gains, reduced by available capital losses, at least
annually. From time to time, a portion of any Fund's dividends may constitute
a return of capital.
At the time of an investor's purchase of Shares of a Fund a portion of the
NAV per Share may be represented by undistributed income of the Fund or
realized or unrealized appreciation of the Fund's portfolio securities.
Therefore, subsequent distributions on such Shares from such income or
realized appreciation may be taxable to the investor even if the NAV of the
investor's Shares is, as a result of the distributions, reduced below the cost
of such Shares and the distributions (or portions thereof) represent a return
of a portion of the purchase price.
NET ASSET VALUE
The NAV per Share of each Class of a Fund is calculated by the Fund's
custodian as of the close of regular trading on the New York Stock Exchange
(which is normally, but not always, 3:00 p.m. Chicago time, 4:00 p.m. New York
time), on each Business Day (as such term is defined under "Additional
Information"). The NAV per Share of each Class is calculated by determining
the net assets attributed to each Class and dividing by the number of
outstanding Shares of that Class. Portfolio securities are valued based on
market quotations or, if accurate quotations are not readily available, at
fair value as determined in good faith under procedures established by the
Trustees.
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PERFORMANCE INFORMATION
From time to time each Fund may publish average annual total return and the
Balanced, CORE Large Cap Value and Growth and Income Funds may publish their
yield and distribution rates in advertisements and communications to
shareholders or prospective investors. Average annual total return is
determined by computing the average annual percentage change in value of
$1,000 invested at the maximum public offering price for specified periods
ending with the most recent calendar quarter, assuming reinvestment of all
dividends and distributions at NAV. The total return calculation assumes a
complete redemption of the investment at the end of the relevant period. Total
return calculations for Class A Shares reflect the effect of paying the
maximum initial sales charge. Investment at a lower sales charge would result
in higher performance figures. Total return calculations for Class B and Class
C Shares reflect deduction of the applicable CDSC imposed upon redemption of
Class B and Class C Shares held for the applicable period. Each Fund may also
from time to time advertise total return on a cumulative, average, year-by-
year or other basis for various specified periods by means of quotations,
charts, graphs or schedules. In addition, each Fund may furnish total return
calculations based on investments at various sales charge levels or at NAV.
Any performance information which is based on a Fund's NAV per Share would be
reduced if any applicable sales charge were taken into account. In addition to
the above, each Fund may from time to time advertise its performance relative
to certain averages, performance rankings, indices, other information prepared
by recognized mutual fund statistical services and investments for which
reliable performance information is available.
The Balanced, CORE Large Cap Value and Growth and Income Funds compute their
yield by dividing net investment income earned during a recent 30 day period
by the product of the average daily number of Shares outstanding and entitled
to receive dividends during the period and the maximum offering price per
Share on the last day of the relevant period. The results are compounded on a
bond equivalent (semi-annual) basis and then annualized. Net investment income
per Share is equal to the dividends and interest earned during the period,
reduced by accrued expenses for the period. The calculation of net investment
income for these purposes may differ from the net investment income determined
for accounting purposes. The Balanced, CORE Large Cap Value and Growth and
Income Funds' quotations of distribution rate are calculated by annualizing
the most recent distribution of net investment income for a monthly, quarterly
or other relevant period and dividing this amount by the NAV per Share on the
last day of the period for which the distribution rate is being calculated.
Each Fund's yield, total return and distribution rate will be calculated
separately for each Class of Shares in existence. Because each Class of Shares
may be subject to different expenses, the yield, total return and distribution
rate calculations with respect to each Class of Shares for the same period
will differ. The investment performance of the Class A, Class B and Class C
Shares will be affected by the payment of a sales charge, distribution and
service fees and other Class specific expenses. See "Shares of the Trust."
The Funds' performance quotations do not reflect any fees charged by an
Authorized Dealer to its customer accounts in connection with investments in
the Funds. The investment results of a Fund will fluctuate over time and any
presentation of investment results for any prior period should not be
considered a representation of what an investment may earn or what the Fund's
performance may be in any future period. In addition to information provided
in shareholder reports, the Funds may, in their discretion, from time to time,
make a list of their holdings available to investors upon request.
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SHARES OF THE TRUST
Goldman Sachs Trust was formed under the laws of the State of Delaware on
January 28, 1997. On April 30, 1997, Goldman Sachs Equity Portfolios, Inc., a
Maryland corporation was reorganized into the Trust. The Trustees have
authority under the Trust's Declaration of Trust to create and classify Shares
of beneficial interest in separate series, without further action by
shareholders. Additional series may be added in the future. The Trustees also
have authority to classify and reclassify any series or portfolio of Shares
into one or more Classes. Information about the Trust's other series and
Classes is contained in separate prospectuses.
When issued, Shares are fully paid and non-assessable. In the event of
liquidation, shareholders of each class are entitled to share pro rata in the
net assets of the applicable Fund available for distribution to the
shareholders of such class. All Shares are freely transferable and have no
preemptive, subscription or conversion rights. Shareholders are entitled to
one vote per Share, provided that at the option of the Trustees, shareholders
will be entitled to a number of votes based upon the NAVs represented by their
Shares.
[As of April 3, 1998, State Street Bank and Trust Company as Trustee for
Goldman Sachs Profit Sharing Master Trust, Attention: Louis Pereira, P.O. Box
1992, Boston, MA 02105-1992 was recordholder of 59.9% of Mid Cap Equity Fund's
outstanding Shares.]
The Trust does not intend to hold annual meetings of shareholders. However,
recordholders may, under certain circumstances, as permitted by the Act,
communicate with other shareholders in connection with requiring a special
meeting of shareholders. The Trustees will call a special meeting of
shareholders for the purpose of electing Trustees if, at any time, less than a
majority of Trustees holding office at the time were elected by shareholders.
In the interest of economy and convenience, the Trust does not issue
certificates representing the Funds' Shares. Instead, the Transfer Agent
maintains a record of each shareholder's ownership. Each shareholder receives
confirmation of purchase and redemption orders from the Transfer Agent. Fund
Shares and any dividends and distributions paid by the Funds are reflected in
account statements from the Transfer Agent.
TAXATION
FEDERAL TAXES
Each Fund is treated as a separate entity for tax purposes. The CORE Large
Cap Value Fund intends to elect and each other Fund has elected to be treated
as a regulated investment company, and each Fund intends to continue to
qualify for such treatment for each taxable year under Subchapter M of the
Code. To qualify as such, a Fund must satisfy certain requirements relating to
the sources of its income, diversification of its assets and distribution of
its income to shareholders. As a regulated investment company, a Fund will not
be subject to federal income or excise tax on any net investment income and
net realized capital gains that are distributed to its shareholders in
accordance with certain timing requirements of the Code.
Dividends paid by a Fund from net investment income, certain net realized
foreign exchange gains, the excess of net short-term capital gain over net
long-term capital loss and original issue discount or market discount
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income will be taxable to shareholders as ordinary income. Distributions out
of the net capital gain (the excess of net long-term capital gain over net
short-term capital loss), if any, of a Fund will be taxed to shareholders as
long-term capital gains, regardless of the length of time a shareholder has
held his or her Shares or whether such gain was reflected in the price paid
for the Shares. These tax consequences will apply whether distributions are
received in cash or reinvested in Shares. A Fund's dividends that are paid to
its corporate shareholders and are attributable to qualifying dividends such
Fund receives from U.S. domestic corporations may be eligible, in the hands of
such corporate shareholders, for the corporate dividends-received deduction,
subject to certain holding period requirements and debt financing limitations
under the Code. Certain distributions paid by a Fund in January of a given
year may be taxable to shareholders as if received the prior December 31.
Shareholders will be informed annually about the amount and character of
distributions received from the Funds for federal income tax purposes.
Investors should consider the tax implications of buying Shares immediately
prior to a distribution. Investors who purchase Shares shortly before the
record date for a distribution will pay a per Share price that includes the
value of the anticipated distribution and will be taxed on the distribution
even though the distribution represents a return of a portion of the purchase
price.
Redemptions and exchanges of Shares are taxable events.
Individuals and certain other classes of shareholders may be subject to 31%
backup withholding of federal income tax on distributions, redemptions and
exchanges if they fail to furnish their correct taxpayer identification number
and certain certifications required by the Internal Revenue Service or if they
are otherwise subject to backup withholding. Individuals, corporations and
other shareholders that are not U.S. persons under the Code are subject to
different tax rules and may be subject to nonresident alien withholding at the
rate of 30% (or a lower rate provided by an applicable tax treaty, if any) on
amounts treated as ordinary dividends from the Funds.
Each Fund may be subject to foreign withholding or other foreign taxes on
income or gain from certain foreign securities. In general, the Funds do not
anticipate that they will be eligible to pass any foreign tax credits through
to their shareholders; however, the Funds may deduct these taxes in computing
their taxable income, if any.
OTHER TAXES
In addition to federal taxes, a shareholder may be subject to state, local
or foreign taxes on payments received from the Funds. A state income (and
possibly local income and/or intangible property) tax exemption may be
available to the extent (if any) a Fund's distributions are derived from
interest on (or, in the case of intangible property taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in
some states that certain thresholds for holdings of such obligations and/or
reporting requirements are satisfied. For a further discussion of certain tax
consequences of investing in Shares of the Funds, see "Taxation" in the
Additional Statement. Shareholders are urged to consult their own tax advisers
regarding specific questions as to federal, state and local taxes as well as
to any foreign taxes.
ADDITIONAL INFORMATION
As used in this Prospectus, the term "Business Day" means any day the New
York Stock Exchange is open for trading, which is Monday through Friday except
for holidays. The New York Stock Exchange is closed on the following holidays:
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day (observed), Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
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APPENDIX
STATEMENT OF INTENTION
(APPLICABLE ONLY TO CLASS A SHARES PURCHASED SUBJECT TO A SALES CHARGE)
If a shareholder anticipates purchasing $50,000 or more of Class A Shares of
a Fund alone or in combination with Class A Shares of another Fund or another
Goldman Sachs Fund within a 13-month period, the shareholder may obtain Shares
of the Fund at the same reduced sales charge as though the total quantity were
invested in one lump sum by filing this Statement of Intention incorporated by
reference in the Account Application. Income dividends and capital gain
distributions taken in additional Shares will not apply toward the completion
of this Statement of Intention.
To ensure that the reduced price will be received on future purchases, the
investor must inform Goldman Sachs that this Statement of Intention is in
effect each time Shares are purchased. Subject to the conditions mentioned
below, each purchase will be made at the public offering price applicable to a
single transaction of the dollar amount specified on the Account Application.
The investor makes no commitment to purchase additional Shares, but if the
investor's purchases within 13 months plus the value of Shares credited toward
completion do not total the sum specified, the investor will pay the increased
amount of the sales charge prescribed in the Escrow Agreement.
ESCROW AGREEMENT
Out of the initial purchase (or subsequent purchases if necessary), 5% of
the dollar amount specified on the Account Application shall be held in escrow
by the Transfer Agent in the form of Shares registered in the investor's name.
All income dividends and capital gains distributions on escrowed Shares will
be paid to the investor or to his or her order. When the minimum investment so
specified is completed (either prior to or by the end of the 13th month), the
investor will be notified and the escrowed Shares will be released. In signing
the Account Application, the investor irrevocably constitutes and appoints the
Transfer Agent his or her attorney to surrender for redemption any or all
escrowed Shares with full power of substitution in the premises.
If the intended investment is not completed, the investor will be asked to
remit to Goldman Sachs any difference between the sales charge on the amount
specified and on the amount actually attained. If the investor does not within
20 days after written request by Goldman Sachs pay such difference in the
sales charge, the Transfer Agent will redeem an appropriate number of the
escrowed Shares in order to realize such difference. Shares remaining after
any such redemption will be released by the Transfer Agent.
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GOLDMAN SACHS ASSET
MANAGEMENT
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
GOLDMAN SACHS FUNDS
MANAGEMENT, L.P.
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
GOLDMAN, SACHS & CO.
DISTRIBUTOR
85 BROAD STREET
NEW YORK, NEW YORK 10004
GOLDMAN, SACHS & CO.
TRANSFER AGENT
4900 SEARS TOWER
CHICAGO, ILLINOIS 60606
STATE STREET BANK AND TRUST COMPANY
CUSTODIAN
1776 HERITAGE DRIVE
NORTH QUINCY, MASSACHUSETTS 02171
ARTHUR ANDERSEN LLP
INDEPENDENT PUBLIC ACCOUNTANTS
225 FRANKLIN STREET
BOSTON, MA 02110
TOLL FREE (IN U.S.) . . . . . . . . 800-526-7384
EQDOMPROABC
501416
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GOLDMAN SACHS DOMESTIC
EQUITY FUNDS
- --------------------------------------------------------------------------------
PROSPECTUS
CLASS A, B AND C SHARES
LOGO
Goldman
Sachs
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<PAGE>
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PROSPECTUS
GOLDMAN SACHS DOMESTIC EQUITY FUNDS
INSTITUTIONAL SHARES
December 15, 1998
GOLDMAN SACHS BALANCED FUND GOLDMAN SACHS CORE SMALL CAP
EQUITY FUND
Seeks long-term capital growth Seeks long-term growth of capital
and current income through in- through a broadly diversified portfolio
vestments in equity and fixed- of equity securities of U.S. issuers
income securities. which are included in the Russell 2000
Index at the time of investment.
GOLDMAN SACHS GROWTH AND INCOME
FUND
Seeks long-term growth of cap- GOLDMAN SACHS CAPITAL GROWTH FUND
ital and growth of income Seeks long-term growth of capital
through investments in equity through diversified investments in eq-
securities that are considered uity securities of companies that are
to have favorable prospects considered to have long-term capital ap-
for capital appreciation preciation potential.
and/or dividend paying abili-
ty. GOLDMAN SACHS MID CAP EQUITY FUND
Seeks long-term capital appreciation
primarily through investments in equity
GOLDMAN SACHS CORE LARGE CAP securities of companies with public
VALUE FUND stock market capitalizations within the
range of the market capitalization of
Seeks long-term growth of cap- companies constituting the Russell
ital and dividend income Midcap Index at the time of investment
through a broadly diversified (currently between $400 million and $16
portfolio of equity securities billion).
of large cap U.S. issuers that
are selling at low to modest
valuations relative to general GOLDMAN SACHS SMALL CAP VALUE FUND
market measures and that are Seeks long-term capital growth through
expected to have favorable investments in equity securities of com-
prospects for capital appreci- panies with public stock market capital-
ation and/or dividend-paying izations of $1 billion or less at the
ability. time of investment.
GOLDMAN SACHS CORE U.S. EQUITY
FUND
Seeks long-term growth of cap-
ital and dividend income
through a broadly diversified
portfolio of large cap and
blue chip equity securities
representing all major sectors
of the U.S. economy.
GOLDMAN SACHS CORE LARGE CAP
GROWTH FUND
Seeks long-term growth of cap-
ital through a broadly diver-
sified portfolio of equity se-
curities of large cap U.S. is-
suers that are expected to
have better prospects for
earnings growth than the
growth rate of the general do-
mestic economy. Dividend in-
come is a secondary considera-
tion.
-----------------
INSTITUTIONAL SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN A FUND INVOLVES
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
(continued on next page)
<PAGE>
(cover continued)
Goldman Sachs Asset Management ("GSAM"), New York, New York, a separate
operating division of CORE Large Cap Value, Goldman, Sachs & Co. ("Goldman
Sachs"), serves as investment adviser to the Balanced, Growth and Income, CORE
Large Cap Growth, CORE Small Cap Equity, Mid Cap Equity and Small Cap Value
(formerly "Small Cap Equity") Funds. Goldman Sachs Funds Management, L.P.
("GSFM"), New York, New York, an affiliate of Goldman Sachs, serves as
investment adviser to the CORE U.S. Equity (formerly the "Select Equity Fund")
and Capital Growth Funds. GSAM and GSFM are each referred to in this
Prospectus as the "Investment Adviser." Goldman Sachs serves as each Fund's
distributor and transfer agent.
This Prospectus provides information about Goldman Sachs Trust (the "Trust")
and the Funds that a prospective investor should understand before investing.
This Prospectus should be retained for future reference. A Statement of
Additional Information (the "Additional Statement"), dated December 15, 1998,
containing further information about the Trust and the Funds which may be of
interest to investors, has been filed with the Securities and Exchange
Commission ("SEC"), is incorporated herein by reference in its entirety, and
may be obtained without charge from Goldman Sachs by calling the telephone
number, or writing to one of the addresses, listed on the back cover of this
Prospectus. The SEC maintains a Web site (http://www.sec.gov) that contains
the Additional Statement and other information regarding the Trust.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights.................... 3
Fees and Expenses.................. 7
Financial Highlights............... 9
Investment Objectives and Policies. 17
Description of Securities.......... 22
Investment Techniques.............. 28
Risk Factors....................... 32
Investment Restrictions............ 34
Portfolio Turnover................. 34
Management......................... 34
Expenses........................... 39
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Net Asset Value.................... 40
Performance Information............ 40
Shares of the Trust................ 41
Taxation........................... 42
Additional Information............. 43
Reports to Shareholders............ 44
Dividends.......................... 44
Purchase of Institutional Shares... 44
Exchange Privilege................. 47
Redemption of Institutional Shares. 47
Appendix .......................... A-1
Account Information Form
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
The following is intended to highlight certain information and is
qualified in its entirety by the more detailed information contained in
this Prospectus.
WHAT IS THE GOLDMAN SACHS TRUST?
The Goldman Sachs Trust is an open-end management investment company
that offers its shares ("Shares") in several investment funds (commonly
known as mutual funds (the "Funds")). Each Fund pools the monies of
investors by selling its Shares to the public and investing these monies
in a portfolio of securities designed to achieve that Fund's stated
investment objectives.
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS?
Each Fund has distinct investment objectives and policies. There can be
no assurance that a Fund's objectives will be achieved. Each Fund is a
"diversified open-end management company" as defined in the Investment
Company Act of 1940, as amended (the "Act"). For a further description of
each Fund's investment objectives and policies, see "Investment
Objectives and Policies," "Description of Securities" and "Investment
Techniques."
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT
FUND NAME OBJECTIVES INVESTMENT CRITERIA BENCHMARK
--------- ---------- ------------------- ---------
BALANCED Long-term Between 45% and 65% of total assets in Lehman Aggregate
FUND capital growth equity securities and at least 25% in Bond Index and
and current fixed-income senior securities. the Standard &
income. Poor's Index of
500 Common
Stocks (the "S&P
500 Index")
- ----------------------------------------------------------------------------------------
GROWTH AND Long-term growth At least 65% of total assets in equity S&P 500 Index
INCOME FUND of capital and securities that the Investment Adviser
growth of considers to have favorable prospects
income. for capital appreciation and/or
dividend-paying ability.
- ----------------------------------------------------------------------------------------
CORE LARGE Long-term growth At least 90% of total assets in equity Russell 1000
CAP VALUE of capital and securities of U.S. issuers, including Value Index
FUND dividend income. certain foreign issuers traded in the
U.S. The Fund seeks to achieve its
objective through a broadly diversified
portfolio of equity securities of large
cap U.S. issuers that are selling at
low to modest valuations relative to
general market measures such as
earnings, book value and other
fundamental accounting measures, and
that are expected to have favorable
prospects for capital appreciation
and/or dividend-paying ability. The
Fund's investments are selected using
both a variety of quantitative
techniques and fundamental research in
seeking to maximize the Fund's expected
return, while maintaining risk, style,
capitalization and industry
characteristics similar to the Russell
1000 Value Index.
- ----------------------------------------------------------------------------------------
CORE U.S. Long-term growth At least 90% of total assets in equity S&P 500 Index
EQUITY FUND of capital and securities of U.S. issuers, including
dividend income. certain foreign issuers traded in the
U.S. The Fund seeks to achieve its
objective through a broadly diversified
portfolio of large cap and blue chip
equity securities representing all
major sectors of the U.S. economy. The
Fund's investments are selected using
both a variety of quantitative
techniques and fundamental research in
seeking to maximize the Fund's
expected return, while maintaining
risk, style, capitalization and
industry characteristics similar to the
S&P 500 Index.
- ----------------------------------------------------------------------------------------
</TABLE>
(continued)
3
<PAGE>
<TABLE>
<S> <C> <C> <C>
INVESTMENT
FUND NAME OBJECTIVES INVESTMENT CRITERIA BENCHMARK
--------- ---------- ------------------- ---------
CORE LARGE Long-term growth At least 90% of total assets in equity Russell 1000
CAP GROWTH of capital. securities of U.S. issuers, including Growth Index
FUND Dividend income certain foreign issuers traded in the
is a secondary U.S. The Fund seeks to achieve its
consideration. objective through a broadly diversified
portfolio of equity securities of large
cap U.S. issuers that are expected to
have better prospects for earnings
growth than the growth rate of the
general domestic economy. The Fund's
investments are selected using both a
variety of quantitative techniques and
fundamental research in seeking to
maximize the Fund's expected returns,
while maintaining risk, style,
capitalization and industry
characteristics similar to the Russell
1000 Growth Index.
- --------------------------------------------------------------------------------------
CORE SMALL Long-term growth At least 90% of total assets in equity Russell 2000
CAP EQUITY of capital. securities of U.S. issuers, including Index
FUND certain foreign issuers traded in the
U.S. The Fund seeks to achieve its
investment objective through a broadly
diversified portfolio of equity
securities of U.S. issuers which are
included in the Russell 2000 Index at
the time of investment. The Fund's
investments are selected using both a
variety of quantitative techniques and
fundamental research in seeking to
maximize the Fund's expected return,
while maintaining risk, style,
capitalization and industry
characteristics similar to the Russell
2000 Index.
- --------------------------------------------------------------------------------------
CAPITAL Long-term At least 90% of total assets in a S&P 500 Index
GROWTH FUND capital growth. diversified portfolio of equity
securities. The Investment Adviser
considers long-term capital
appreciation potential in selecting
investments.
- --------------------------------------------------------------------------------------
MID CAP Long-term At least 65% of total assets in Russell Midcap
EQUITY FUND capital equity securities of companies with Index
appreciation. public stock market capitalizations
within the range of the market
capitalization of companies
constituting the Russell Midcap Index
at the time of investment (currently
between $400 million and $16 billion)
("Mid-Cap Companies").
- --------------------------------------------------------------------------------------
SMALL CAP Long-term At least 65% of total assets in equity Russell 2000
VALUE FUND capital growth. securities of companies with public
stock market capitalizations of $1
billion or less at the time of
investment.
</TABLE>
WHAT ARE THE RISK FACTORS AND SPECIAL CHARACTERISTICS THAT I SHOULD CONSIDER
BEFORE INVESTING?
Each Fund's Share price will fluctuate with market, economic and, to the
extent applicable, foreign exchange conditions, so that an investment in
any of the Funds may be worth more or less when redeemed than when
purchased. None of the Funds should be relied upon as a complete investment
program. There can be no assurance that a Fund's investment objectives will
be achieved. See "Risk Factors."
Risks of Investing in Small Capitalization Companies. To the extent that
a Fund invests in the securities of small market capitalization companies,
the Fund may be exposed to a higher degree of risk and price volatility.
Securities of such issuers may lack sufficient market liquidity to enable a
Fund to effect sales at an advantageous time or without a substantial drop
in price.
4
<PAGE>
Foreign Risks. Investments in securities of foreign issuers and
currencies involve risks that are different from those associated with
investments in domestic securities. The risks associated with foreign
investments and currencies include changes in relative currency exchange
rates, political and economic developments, the imposition of exchange
controls, confiscation and other governmental restrictions. Generally,
there is less availability of data on foreign companies and securities
markets as well as less regulation of foreign stock exchanges, brokers and
issuers. A Fund's investments in emerging markets and countries ("Emerging
Countries") involves greater risks than investments in the developed
countries of Western Europe, the United States, Canada, Australia, New
Zealand and Japan.
Other. A Fund's use of certain investment techniques, including
derivatives, forward contracts, options and futures, will subject the Fund
to greater risk than funds that do not employ such techniques.
WHO MANAGES THE FUNDS?
Goldman Sachs Asset Management serves as Investment Adviser to the
Balanced, Growth and Income, CORE Large Cap Value, CORE Large Cap Growth,
CORE Small Cap Equity, Mid Cap Equity and Small Cap Value Funds. Goldman
Sachs Funds Management, L.P. serves as Investment Adviser to the CORE
U.S. Equity and Capital Growth Funds. As of August 21, 1998, the
Investment Adviser, together with its affiliates, acted as investment
adviser or distributor for assets in excess of $168 billion.
WHO DISTRIBUTES THE FUNDS' SHARES?
Goldman Sachs acts as distributor of each Fund's Shares (the
"Distributor").
WHAT IS THE MINIMUM INVESTMENT?
The minimum initial investment is $1,000,000 or $10,000,000 (depending
upon an investor's eligibility) in Institutional Shares of a Fund alone or
in combination with Institutional Shares (or the corresponding class) of
any other mutual fund sponsored by Goldman Sachs and designated as an
eligible fund for this purpose.
HOW DO I PURCHASE INSTITUTIONAL SHARES?
You may purchase Institutional Shares of the Funds through Goldman Sachs.
Institutional Shares are purchased at the current net asset value ("NAV")
without any sales load. See "Purchase of Institutional Shares."
HOW DO I SELL MY INSTITUTIONAL SHARES?
You may redeem Institutional Shares upon request on any Business Day, as
defined under "Additional Information," at the NAV next determined after
receipt of such request in proper form. See "Redemption of Institutional
Shares."
5
<PAGE>
HOW DO I RECEIVE DIVIDENDS AND DISTRIBUTIONS?
<TABLE>
<CAPTION>
INVESTMENT INCOME DIVIDENDS
--------------------------- CAPITAL GAINS
FUND DECLARED AND PAID DISTRIBUTIONS
- ---- ----------------- -------------
<S> <C> <C>
Balanced.............................. Quarterly Annually
Growth and Income..................... Quarterly Annually
CORE Large Cap Value.................. Quarterly Annually
CORE U.S. Equity...................... Annually Annually
CORE Large Cap Growth................. Annually Annually
CORE Small Cap Equity................. Annually Annually
Capital Growth........................ Annually Annually
Mid Cap Equity........................ Annually Annually
Small Cap Value....................... Annually Annually
</TABLE>
Recordholders of Institutional Shares may receive dividends and
distributions in additional Institutional Shares of the Fund in which they
have invested or may elect to receive them in cash. For further information
concerning dividends and distributions, see "Dividends."
6
<PAGE>
FEES AND EXPENSES
(INSTITUTIONAL SHARES)
<TABLE>
<CAPTION>
CORE CORE CORE
GROWTH LARGE LARGE SMALL MID SMALL
AND CAP CORE U.S. CAP CAP CAPITAL CAP CAP
BALANCED INCOME VALUE EQUITY GROWTH EQUITY GROWTH EQUITY VALUE
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------- ------ ----- --------- ------ ------ ------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES:
Maximum Sales Charge
Imposed on Purchases.. None None None None None None None None None
Maximum Sales Charge
Imposed on Reinvested
Dividends............. None None None None None None None None None
Redemption Fees........ None None None None None None None None None
Exchange Fees.......... None None None None None None None None None
ANNUAL FUND OPERATING
EXPENSES:
(as a percentage of
average daily net
assets)/1/
Management Fees (after
waivers and
reimbursements)/2/.... 0.65% 0.70% 0.60% 0.70% 0.60% 0.85% 1.00% 0.75% 1.00%
Distribution Fees...... None None None None None None None None None
Other Expenses (after
waivers and
reimbursements)/3/.... 0.05% 0.09% 0.04% 0.04% 0.04% 0.08% 0.04% 0.14% 0.10%
---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL FUND OPERATING
EXPENSES (after waivers
and reimbursements)/4/. 0.70% 0.79% 0.64% 0.74% 0.64% 0.93% 1.04% 0.89% 1.10%
==== ==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
- ---------------------
/1/ The Funds' annual operating expenses have been restated to reflect fees
and expenses in effect as of September 1, 1998, except for the CORE Large
Cap Value Fund which are based on estimated amounts for the current fiscal
year.
/2/ The Investment Adviser has voluntarily agreed not to impose a portion of
the management fee on the CORE U.S. Equity and CORE Large Cap Growth Funds
equal to 0.05% and 0.15%, respectively. Without such limitations,
management fees would be 0.75% of each Fund's average daily net assets.
/3/ The Investment Adviser has voluntarily agreed to reduce or limit certain
other expenses (excluding management fees, transfer agency fees (equal to
0.04% of the average daily net assets of each Fund's Institutional
Shares), taxes, interest and brokerage fees and litigation,
indemnification and other extraordinary expenses) for each Fund to the
extent such expenses exceed the following percentages of average daily net
assets:
<TABLE>
<CAPTION>
OTHER
EXPENSES
--------
<S> <C>
Balanced......................................................... 0.01%
Growth and Income................................................ 0.05%
CORE Large Cap Value............................................. 0.00%
CORE U.S. Equity................................................. 0.00%
CORE Large Cap Growth............................................ 0.00%
CORE Small Cap Equity............................................ 0.04%
Capital Growth................................................... 0.00%
Mid Cap Equity................................................... 0.10%
Small Cap Value.................................................. 0.06%
</TABLE>
/4/ Without the limitations described above, "Other Expenses" and "Total
Operating Expenses" of the Institutional Shares of the Funds would be as
set forth below:
<TABLE>
<CAPTION>
TOTAL
OTHER OPERATING
EXPENSES EXPENSES
-------- ---------
<S> <C> <C>
Balanced............................................... 0.28% 0.93%
Growth and Income...................................... 0.12% 0.82%
CORE Large Cap Value................................... 0.56% 1.16%
CORE U.S. Equity....................................... 0.12% 0.87%
CORE Large Cap Growth.................................. 0.22% 0.97%
CORE Small Cap Equity.................................. 0.48% 1.33%
Capital Growth......................................... 0.10% 1.10%
Mid Cap Equity......................................... 0.16% 0.91%
Small Cap Value........................................ 0.13% 1.13%
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a hy-
pothetical $1,000 investment, assuming (1) a
5% annual return and (2) redemption at the
end of each time period:
Balanced...................................... $ 7 $22 $39 $87
Growth and Income............................. 8 25 44 98
CORE Large Cap Value.......................... 7 20 36 80
CORE U.S. Equity.............................. 8 24 41 92
CORE Large Cap Growth......................... 7 20 36 80
CORE Small Cap Equity......................... 9 30 51 114
Capital Growth................................ 11 33 57 127
Mid Cap Equity................................ 9 28 49 110
Small Cap Value............................... 11 35 61 134
</TABLE>
The Investment Adviser and Goldman Sachs may modify or discontinue any of
the limitations set forth above in the future at their discretion. The
information set forth in the foregoing table and hypothetical example relates
only to Institutional Shares of the Funds. Each Fund also offers Service
Shares and Class A, Class B and Class C Shares, which are subject to different
fees and expenses (which affect performance), have different minimum
investment requirements and are entitled to different services. Information
regarding Service, Class A, Class B and Class C Shares may be obtained from an
investor's sales representative or from Goldman Sachs by calling the number on
the back cover of this Prospectus.
Institutions that invest in Institutional Shares on behalf of their
customers may charge fees directly to their customer accounts in connection
with their investments. Such fees, if any, may affect the return such
customers realize with respect to their investments.
Certain institutions may also receive other compensation in connection with
the sales and distribution of Institutional Shares or for services to their
customer's accounts and/or the Funds. For additional information regarding
such compensation, see "Purchase of Institutional Shares" in the Prospectus
and the Additional Statement.
The purpose of the foregoing table is to assist investors in understanding
the various fees and expenses of a Fund that an investor will bear directly or
indirectly. The information on the fees and expenses included in the table and
hypothetical example above are based on each Fund's fees and expenses (actual
or estimated) and should not be considered as representative of past or future
expenses. Actual fees and expenses may be greater or less than those
indicated. Moreover, while the example assumes a 5% annual return, a Fund's
actual performance will vary and may result in an actual return greater or
less than 5%. See "Management--Investment Advisers."
8
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The following data for the years and periods ended on or before January 31,
1998 have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report incorporated by reference into the Additional
Statement from the Annual Report to shareholders of the Funds for the year
ended January 31, 1998 (the "Annual Report"). This information should be read
in conjunction with the financial statements and related notes incorporated by
reference and attached to the Additional Statement. The Annual Report also
contains performance information and is available upon request and without
charge by calling the telephone number or writing to one of the addresses on
the back cover of this Prospectus. Information for the period ended July 31,
1998 has not been audited. During the periods shown, the Trust did not offer
Shares of the CORE Large Cap Value Fund. Accordingly, there are no financial
highlights for this Fund.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
--------------------------- ------------------------------------------------
NET REALIZED
AND UNREALIZED
GAIN (LOSS) ON IN EXCESS OF
INVESTMENT, FROM NET NET REALIZED NET
NET ASSET FUTURES AND FROM IN EXCESS REALIZED GAIN GAIN ON INCREASE NET ASSET
VALUE, NET FOREIGN CURRENCY NET OF NET ON INVESTMENT INVESTMENT (DECREASE) VALUE,
BEGINNING INVESTMENT RELATED INVESTMENT INVESTMENT AND FUTURES AND FUTURES IN NET END OF
OF PERIOD INCOME TRANSACTIONS INCOME INCOME TRANSACTIONS TRANSACTIONS ASSET VALUE PERIOD
--------- ---------- ---------------- ---------- ---------- ------------- ------------ ----------- ---------
BALANCED FUND
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $20.29 $0.29 $(0.21) $(0.28) $ -- $ -- $ -- $(0.20) $20.09
1998--Class B
Shares.......... 20.20 0.20 (0.20) (0.21) -- -- -- (0.21) 19.99
1998--Class C
Shares.......... 20.17 0.20 (0.21) (0.21) -- -- -- (0.22) 19.95
1998--Institu-
tional Shares... 20.29 0.32 (0.21) (0.31) -- -- -- (0.20) 20.09
1998--Service
Shares.......... 20.28 0.26 (0.21) (0.25) -- -- -- (0.20) 20.08
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 18.78 0.57 2.66 (0.56) -- (1.16) -- 1.51 20.29
1998--Class B
Shares.......... 18.73 0.50 2.57 (0.42) (0.02) (1.16) -- 1.47 20.20
1998--Class C
Shares(b)....... 21.10 0.25 0.24 (0.22) (0.04) (0.64) (0.52) (0.93) 20.17
1998--Institu-
tional
Shares(b)....... 21.18 0.26 0.32 (0.23) (0.08) (0.45) (0.71) (0.89) 20.29
1998--Service
Shares(b)....... 21.18 0.22 0.32 (0.22) (0.06) (0.72) (0.44) (0.90) 20.28
- -----------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 17.31 0.66 2.47 (0.66) -- (1.00) -- 1.47 18.78
1997--Class B
Shares(b)....... 17.46 0.42 2.34 (0.42) (0.07) (1.00) -- 1.27 18.73
- -----------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 14.22 0.51 3.43 (0.50) -- (0.35) -- 3.09 17.31
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1995--Class A
Shares(b)....... 14.18 0.10 0.02 (0.08) -- -- -- 0.04 14.22
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
-------------------------
RATIO OF RATIO OF
NET RATIO OF NET NET
ASSETS AT NET INVESTMENT RATIO OF INVESTMENT
PORTFOLIO END OF EXPENSES TO INCOME TO EXPENSES INCOME (LOSS)
TOTAL TURNOVER PERIOD AVERAGE NET AVERAGE NET TO AVERAGE TO AVERAGE
RETURN(A) RATE(F) (IN 000'S) ASSETS ASSETS NET ASSETS NET ASSETS
----------- ------------ ---------- ------------ ------------ ----------- -------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 0.34%(d) 69.31%(d) $191,408 1.00%(c) 2.86%(c) 1.45%(c) 2.41%(c)
1998--Class B
Shares.......... (0.04)(d) 69.31(d) 38,923 1.75(c) 2.11(c) 1.95(c) 1.91(c)
1998--Class C
Shares.......... (0.08)(d) 69.31(d) 15,693 1.75(c) 2.12(c) 1.95(c) 1.92(c)
1998--Institu-
tional Shares... 0.45(d) 69.31(d) 8,646 0.75(c) 3.11(c) 0.95(c) 2.91(c)
1998--Service
Shares.......... 0.26(d) 69.31(d) 447 1.25(c) 2.51(c) 1.45(c) 2.31(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 17.54 190.43 163,636 1.00 2.94 1.57 2.37
1998--Class B
Shares.......... 16.71 190.43 23,639 1.76 2.14 2.07 1.83
1998--Class C
Shares(b)....... 2.49(d) 190.43 8,850 1.77(c) 2.13(c) 2.08(c) 1.82(c)
1998--Institu-
tional
Shares(b)....... 2.93(d) 190.43 8,367 0.76(c) 3.13(c) 1.07(c) 2.82(c)
1998--Service
Shares(b)....... 2.66(d) 190.43 16 1.26(c) 2.58(c) 1.57(c) 2.27(c)
- -----------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 18.59 208.11 81,410 1.00 3.76 1.77 2.99
1997--Class B
Shares(b)....... 16.22(d) 208.11 2,110 1.75(c) 2.59(c) 2.27(c) 2.07(c)
- -----------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 28.10 197.10 50,928 1.00 3.65 1.90 2.75
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1995--Class A
Shares(b)....... 0.87(d) 14.71 7,510 1.00(c) 3.39(c) 8.29(c) (3.90)(c)
</TABLE>
- -------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class A and Class B Share activity commenced on October 12, 1994 and May
1, 1996, respectively. Class C, Institutional and Service Share activity
commenced on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
(f) Includes the effect of mortgage dollar roll transactions.
9
<PAGE>
<TABLE>
<CAPTION>
INCOME (LOSS)
FROM INVESTMENT
OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
-------------------------- ------------------------------------------------
NET IN EXCESS OF
REALIZED AND FROM NET NET REALIZED NET
NET ASSET NET UNREALIZED FROM IN EXCESS REALIZED GAIN GAIN ON INCREASE
VALUE, INVESTMENT GAIN (LOSS) ON NET OF NET ON INVESTMENT INVESTMENT ADDITIONAL (DECREASE)
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES PAID-IN IN NET
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS CAPITAL ASSET VALUE
--------- ---------- -------------- ---------- ---------- ------------- ------------ ---------- -----------
GROWTH AND INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $25.93 $0.09 $(0.41) $(0.08) $ -- $ -- $ -- $ -- $(0.40)
1998--Class B
Shares.......... 25.73 -- (0.41) -- -- -- -- -- (0.41)
1998--Class C
Shares.......... 25.70 0.01 (0.43) (0.01) -- -- -- -- (0.43)
1998--
Institutional
Shares.......... 25.95 0.13 (0.40) (0.13) -- -- -- -- (0.40)
1998--Service
Shares.......... 25.92 0.07 (0.39) (0.07) -- -- -- -- (0.39)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 23.18 0.11 5.27 (0.11) -- (2.52) -- -- 2.75
1998--Class B
Shares.......... 23.10 0.04 5.14 -- (0.03) (2.45) (0.07) -- 2.63
1998--Class C
Shares(b)....... 28.20 (0.01) 0.06 -- (0.03) (1.42) (1.10) -- (2.50)
1998--
Institutional
Shares.......... 23.19 0.27 5.23 (0.22) -- (0.24) (2.28) -- 2.76
1998--Service
Shares.......... 23.17 0.14 5.23 (0.06) (0.04) (2.52) -- -- 2.75
- ------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 19.98 0.35 5.18 (0.35) (0.01) (1.97) -- -- 3.20
1997--Class B
Shares(b)....... 20.82 0.17 4.31 (0.17) (0.06) (1.97) -- -- 2.28
1997--
Institutional
Shares(b)....... 21.25 0.29 3.96 (0.30) (0.04) (1.97) -- -- 1.94
1997--Service
Shares(b)....... 20.71 0.28 4.50 (0.28) (0.07) (1.97) -- -- 2.46
- ------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 15.80 0.33 4.75 (0.30) -- (0.60) -- -- 4.18
- ------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.79 0.20(f) 0.30(f) (0.20) (0.07) (0.33) -- 0.11(f) 0.01
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1994--Class A
Shares(b)....... 14.18 0.15 1.68 (0.15) (0.01) (0.06) -- -- 1.61
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
--------------------------
RATIO
OF NET RATIO
NET RATIO INVESTMENT OF NET
NET ASSET ASSETS AT OF NET INCOME (LOSS) RATIO INVESTMENT
VALUE, PORTFOLIO END OF EXPENSES TO TO AVERAGE OF EXPENSES INCOME (LOSS)
END OF TOTAL TURNOVER PERIOD AVERAGE NET NET TO AVERAGE TO AVERAGE
PERIOD RETURN(A) RATE (IN 000S) ASSETS ASSETS NET ASSETS NET ASSETS
--------- ------------ ------------ ---------- ------------ ------------- ------------ -------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $25.53 (1.26)%(d) 37.78%(d) $1,356,662 1.22%(c) 0.64%(c) 1.38%(c) 0.48%(c)
1998--Class B
Shares.......... 25.32 (1.59)(d) 37.78(d) 416,520 1.88(c) (0.03)(c) 1.88(c) (0.03)(c)
1998--Class C
Shares.......... 25.27 (1.63)(d) 37.78(d) 63,080 1.88(c) (0.03)(c) 1.88(c) (0.03)(c)
1998--
Institutional
Shares.......... 25.55 (1.07)(d) 37.78(d) 192,094 0.80(c) 1.06(c) 0.80(c) 1.06(c)
1998--Service
Shares.......... 25.53 (1.26)(d) 37.78(d) 12,338 1.30(c) 0.57(c) 1.30(c) 0.57(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 25.93 23.71 61.95 1,216,582 1.25 0.43 1.42 0.26
1998--Class B
Shares.......... 25.73 22.87 61.95 307,815 1.94 (0.35) 1.94 (0.35)
1998--Class C
Shares(b)....... 25.70 0.51(d) 61.95 31,686 1.99(c) (0.48)(c) 1.99(c) (0.48)(c)
1998--
Institutional
Shares.......... 25.95 24.24 61.95 36.225 0.83 0.76 0.83 0.76
1998--Service
Shares.......... 25.92 23.63 61.95 8,893 1.32 0.32 1.32 0.32
- ------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 23.18 28.42 53.03 615,103 1.22 1.60 1.43 1.39
1997--Class B
Shares(b)....... 23.10 22.23(d) 53.03 17,346 1.93(c) 0.15(c) 1.93(c) 0.15(c)
1997--
Institutional
Shares(b)....... 23.19 20.77(d) 53.03 193 0.82(c) 1.36(c) 0.82(c) 1.36(c)
1997--Service
Shares(b)....... 23.17 23.87(d) 53.03 3,174 1.32(c) 0.94(c) 1.32(c) 0.94(c)
- ------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 19.98 32.45 57.93 436,757 1.20 1.67 1.45 1.42
- ------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.80 3.97 71.80 193,772 1.25 1.28 1.58 0.95
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1994--Class A
Shares(b)....... 15.79 13.08(d) 102.23 41,528 1.25(c) 1.23(c) 3.24(c) (0.76)(c)
</TABLE>
- -------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on February 5, 1993, May 1, 1996, August 15, 1997, June 3, 1996
and March 6, 1996, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
(f) Calculated based on the average Shares outstanding methodology.
10
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM DISTRIBUTIONS TO
INVESTMENT OPERATIONS(E) SHAREHOLDERS
------------------------- -----------------------------------------------
FROM NET IN EXCESS OF NET
NET REALIZED REALIZED NET REALIZED INCREASE/ NET
NET ASSET NET AND UNREALIZED IN EXCESS GAIN ON GAIN ON (DECREASE) ASSET
VALUE, INVESTMENT GAIN (LOSS) ON FROM NET OF NET INVESTMENT INVESTMENT IN NET VALUE,
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES ASSET END OF TOTAL
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS VALUE PERIOD RETURN(A)
--------- ---------- -------------- ---------- ---------- ------------ ------------ ---------- ------ ---------
CORE U.S. EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $26.59 $0.03 $3.61 $ -- $ -- $ -- $ -- $3.64 $30.23 13.69%(d)
1998--Class B
Shares.......... 26.32 (0.04) 3.58 -- -- -- -- 3.54 29.86 13.45(d)
1998--Class C
Shares.......... 26.24 (0.04) 3.56 -- -- -- -- 3.52 29.76 13.41(d)
1998--Institu-
tional Shares... 26.79 0.10 3.66 -- -- -- -- 3.76 30.55 14.04(d)
1998--Service
Shares.......... 26.53 0.05 3.60 -- -- -- -- 3.65 30.18 13.76(d)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 23.32 0.11 5.63 (0.12) -- (2.35) -- 3.27 26.59 24.96
1998--Class B
Shares.......... 23.18 0.11 5.44 -- (0.06) (2.00) (0.35) 3.14 26.32 24.28
1998--Class C
Shares(b)....... 27.48 0.03 1.22 -- (0.14) (0.67) (1.68) (1.24) 26.24 4.85(d)
1998--Institu-
tional Shares... 23.44 0.30 5.65 (0.24) (0.01) (1.33) (1.02) 3.35 26.79 25.76
1998--Service
Shares.......... 23.27 0.19 5.57 (0.07) (0.08) (2.35) -- 3.26 26.53 25.11
- ----------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 19.66 0.16 4.46 (0.16) -- (0.80) -- 3.66 23.32 23.75
1997--Class B
Shares(b)....... 20.44 0.04 3.70 (0.04) (0.16) (0.80) -- 2.74 23.18 18.59(d)
1997--Institu-
tional Shares... 19.71 0.30 4.51 (0.28) -- (0.80) -- 3.73 23.44 24.63
1997--Service
Shares(b)....... 21.02 0.13 3.15 (0.13) (0.10) (0.80) -- 2.25 23.27 15.92(d)
- ----------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 14.61 0.19 5.43 (0.16) -- (0.41) -- 5.05 19.66 38.63
1996--Institu-
tional
Shares(b)....... 16.97 0.16 3.23 (0.24) -- (0.41) -- 2.74 19.71 20.14(d)
- ----------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.93 0.20 (0.38) (0.20) -- (0.94) -- (1.32) 14.61 (1.10)
- ----------------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 15.46 0.17 2.08 (0.17) -- (1.61) -- 0.47 15.93 15.12
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
-------------------------
RATIO OF RATIO OF RATIO OF
NET NET RATIO OF NET
NET EXPENSES INVESTMENT EXPENSES INVESTMENT
ASSETS AT TO INCOME TO INCOME
PORTFOLIO END OF AVERAGE (LOSS) TO AVERAGE (LOSS) TO
TURNOVER PERIOD NET AVERAGE NET AVERAGE
RATE (IN 000S) ASSETS NET ASSETS ASSETS NET ASSETS
----------- --------- ---------- ------------ ------------ ------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 22.52%(d) $527,753 1.26%(c) 0.23%(c) 1.43%(c) 0.06%(c)
1998--Class B
Shares.......... 22.52(d) 102,565 1.76(c) (0.29)(c) 1.93(c) (0.46)(c)
1998--Class C
Shares.......... 22.52(d) 15,316 1.76(c) (0.32)(c) 1.93(c) (0.49)(c)
1998--Institu-
tional Shares... 22.52(d) 298,853 0.65(c) 0.83(c) 0.82(c) 0.66(c)
1998--Service
Shares.......... 22.52(d) 10,388 1.15(c) 0.33(c) 1.32(c) 0.16(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 65.89 398,393 1.28 0.51 1.47 0.32
1998--Class B
Shares.......... 65.89 59,208 1.79 (0.05) 1.96 (0.22)
1998--Class C
Shares(b)....... 65.89 6,267 1.78(c) (0.21)(c) (c)1.95(c) (0.38)(c)
1998--Institu-
tional Shares... 65.89 202,893 0.65 1.16 0.82 0.99
1998--Service
Shares.......... 65.89 7,841 1.15 0.62 1.32 0.45
- ----------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 37.78 225,968 1.29 0.91 1.53 0.67
1997--Class B
Shares(b)....... 37.28 17,258 1.83(c) 0.06(c) 2.00(c) (0.11)(c)
1997--Institu-
tional Shares... 37.28 148,942 0.65 1.52 0.85 1.32
1997--Service
Shares(b)....... 37.28 3,666 1.15(c) 0.69(c) 1.35(c) 0.49(c)
- ----------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 39.35 129,045 1.25 1.01 1.55 0.71
1996--Institu-
tional
Shares(b)....... 39.35 64,829 0.65(c) 1.49(c) 0.96(c) 1.18(c)
- ----------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 56.18 94,968 1.38 1.33 1.63 1.08
- ----------------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 87.73 92,769 1.42 0.92 1.67 0.67
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class B, Class C, Institutional and Service Share activity commenced on May
1, 1996, August 15, 1997, June 15, 1995 and June 7, 1996, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
11
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT
OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
---------------------- -----------------------------------------------
NET
REALIZED
AND FROM NET IN EXCESS OF
UNREALIZED REALIZED NET REALIZED NET NET
NET ASSET NET GAIN (LOSS) IN EXCESS GAIN ON GAIN ON INCREASE ASSET
VALUE, INVESTMENT ON FROM NET OF NET INVESTMENT INVESTMENT IN NET VALUE,
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES ASSET END OF
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS VALUE PERIOD
--------- ---------- ----------- ---------- ---------- ------------ ------------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CORE LARGE CAP GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $11.97 $ 0.01 $1.97 $ -- $ -- $ -- $ -- $1.98 $13.95
1998--Class B
Shares.......... 11.92 (0.02) 1.95 -- -- -- -- 1.93 13.85
1998--Class C
Shares.......... 11.93 (0.02) 1.93 -- -- -- -- 1.91 13.84
1998--
Institutional
Shares.......... 11.97 0.01 1.99 -- -- -- -- 2.00 13.97
1998--Service
Shares.......... 11.95 -- 1.96 -- -- -- -- 1.96 13.91
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER OF
FEES OR EXPENSE
LIMITATIONS
------------------------
NET RATIO OF RATIO OF
ASSETS NET NET RATIO OF RATIO OF
AT END EXPENSES INVESTMENT EXPENSES NET
OF TO INCOME TO INVESTMENT
PORTFOLIO PERIOD AVERAGE (LOSS) TO AVERAGE LOSS TO
TOTAL TURNOVER (IN NET AVERAGE NET AVERAGE
RETURN(A) RATE 000S) ASSETS NET ASSETS ASSETS NET ASSETS
----------- ----------- -------- ---------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... 16.54%(d) 45.79%(d) $116,939 0.90%(c) 0.19%(c) 1.61%(c) (0.52)%(c)
1998--Class B
Shares.......... 16.19(d) 45.79(d) 49,881 1.65(c) (0.56)(c) 2.11(c) (1.02)(c)
1998--Class C
Shares.......... 16.01(d) 45.79(d) 15,724 1.65(c) (0.57)(c) 2.11(c) (1.03)(c)
1998--
Institutional
Shares.......... 16.71(d) 45.79(d) 135,153 0.65(c) 0.42(c) 1.11(c) (0.04)(c)
1998--Service
Shares.......... 16.40(d) 45.79(d) 507 1.15(c) (0.04)(c) 1.61(c) (0.50)(c)
FOR THE PERIOD
ENDED JANUARY
31,
- --------------
1998--Class A
Shares(b)....... 10.00 0.01 2.35 (0.01) -- (0.32) (0.06) 1.97 11.97
1998--Class B
Shares(b)....... 10.00 (0.03) 2.33 -- -- (0.18) (0.20) 1.92 11.92
1998--Class C
Shares(b)....... 11.80 (0.02) 0.54 -- (0.01) (0.38) -- 0.13 11.93
1998--
Institutional
Shares(b)....... 10.00 0.01 2.35 (0.01) -- (0.19) (0.19) 1.97 11.97
1998--Service
Shares(b)....... 10.00 (0.02) 2.35 -- -- (0.08) (0.30) 1.95 11.95
FOR THE PERIOD
ENDED JANUARY
31,
- --------------
1998--Class A
Shares(b)....... 23.79(d) 74.97(d) 53,786 0.91(c) 0.12(c) 2.40(c) (1.37)(c)
1998--Class B
Shares(b)....... 23.26(d) 74.97(d) 13,857 1.67(c) (0.72)(c) 2.91(c) (1.96)(c)
1998--Class C
Shares(b)....... 4.56(d) 74.97(d) 4,132 1.68(c) (0.76)(c) 2.92(c) (2.00)(c)
1998--
Institutional
Shares(b)....... 23.89(d) 74.97(d) 4,656 0.72(c) 0.42(c) 1.96(c) (0.82)(c)
1998--Service
Shares(b)....... 23.56(d) 74.97(d) 115 1.17(c) (0.21)(c) 2.41(c) (1.45)(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class A, Class B, Institutional and Service Share activity commenced on May
1, 1997. Class C Share activity commenced on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
12
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM DISTRIBUTIONS TO
INVESTMENT OPERATIONS(E) SHAREHOLDERS
------------------------- -----------------------
NET
REALIZED AND FROM NET
UNREALIZED REALIZED
NET ASSET NET GAIN (LOSS) ON FROM GAIN ON NET NET ASSET
VALUE, INVESTMENT INVESTMENT AND NET INVESTMENT INCREASE VALUE, PORTFOLIO
BEGINNING INCOME FUTURES INVESTMENT AND FUTURES IN NET END OF TOTAL TURNOVER
OF PERIOD (LOSS) TRANSACTIONS INCOME TRANSACTIONS ASSET VALUE PERIOD RETURN(A) RATE
--------- ---------- -------------- ---------- ------------ ----------- --------- --------- ---------
CORE SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $10.59 $ -- $0.11 $ -- $ -- $0.11 $10.70 1.04%(d) 16.06%(d)
1998--Class B
Shares.......... 10.56 (0.03) 0.10 -- -- 0.07 10.63 0.66(d) 16.06(d)
1998--Class C
Shares.......... 10.57 (0.03) 0.10 -- -- 0.07 10.64 0.66(d) 16.06(d)
1998--Institu-
tional Shares... 10.61 0.02 0.10 -- -- 0.12 10.73 1.13(d) 16.06(d)
1998--Service
Shares.......... 10.60 (0.01) 0.11 -- -- 0.10 10.70 0.94(d) 16.06(d)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1998--Class A
Shares(b)....... 10.00 (0.01) 0.65 -- (0.05) 0.59 10.59 6.37(d) 37.65(d)
1998--Class B
Shares(b)....... 10.00 (0.03) 0.64 -- (0.05) 0.56 10.56 6.07(d) 37.65(d)
1998--Class C
Shares(b)....... 10.00 (0.02) 0.64 -- (0.05) 0.57 10.57 6.17(d) 37.65(d)
1998--Institu-
tional
Shares(b)....... 10.00 0.01 0.65 -- (0.05) 0.61 10.61 6.57(d) 37.65(d)
1998--Service
Shares(b)....... 10.00 0.01 0.64 -- (0.05) 0.60 10.60 6.47(d) 37.65(d)
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER OF FEES
OR EXPENSE LIMITATIONS
---------------------------
RATIO
NET RATIO RATIO OF NET OF NET
ASSETS AT OF NET INVESTMENT RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS) EXPENSES TO INCOME (LOSS)
PERIOD TO AVERAGE TO AVERAGE AVERAGE NET TO AVERAGE
(IN 000S) NET ASSETS NET ASSETS ASSETS NET ASSETS
--------- ----------- ------------- ------------ --------------
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $20,989 1.25%(c) 0.07%(c) 2.14%(c) (0.82)%(c)
1998--Class B
Shares.......... 14,843 1.95(c) (0.62)(c) 2.64(c) (1.31)(c)
1998--Class C
Shares.......... 4,433 1.95(c) (0.62)(c) 2.64(c) (1.31)(c)
1998--Institu-
tional Shares... 44,614 0.95(c) 0.46 (c) 1.64(c) (0.23)(c)
1998--Service
Shares.......... 22 1.45(c) (0.40)(c) 2.14(c) (1.09)(c)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1998--Class A
Shares(b)....... 11,118 1.25(c) (0.36)(c) 3.92(c) (3.03)(c)
1998--Class B
Shares(b)....... 9,957 1.95(c) (1.04)(c) 4.37(c) (3.46)(c)
1998--Class C
Shares(b)....... 2,557 1.95(c) (1.07)(c) 4.37(c) (3.49)(c)
1998--Institu-
tional
Shares(b)....... 9,026 0.95(c) 0.15 (c) 3.37(c) (2.27)(c)
1998--Service
Shares(b)....... 2 1.45(c) 0.40 (c) 3.87(c) (2.02)(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Commenced operations on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
13
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------ -------------------------------------
IN EXCESS
NET OF NET
NET ASSET NET REALIZED AND IN EXCESS FROM NET REALIZED NET INCREASE
VALUE, INVESTMENT UNREALIZED FROM NET OF NET REALIZED GAIN GAIN ON (DECREASE) NET ASSET
BEGINNING INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT ON INVESTMENT INVESTMENT IN NET ASSET VALUE, END
OF PERIOD (LOSS) INVESTMENTS INCOME INCOME TRANSACTIONS TRANSACTIONS VALUE OF PERIOD
--------- ---------- -------------- ---------- ---------- ------------- ------------ ------------ ----------
CAPITAL GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $18.48 $(0.01) $3.32 $ -- $ -- $ -- $ -- $3.31 $21.79
1998--Class B
Shares.......... 18.27 (0.06) 3.26 -- -- -- -- 3.20 21.47
1998--Class C
Shares.......... 18.24 (0.05) 3.23 -- -- -- -- 3.18 21.42
1998--Institu-
tional Shares... 18.45 0.01 3.32 -- -- -- -- 3.33 21.78
1998--Service
Shares.......... 18.46 (0.02) 3.30 -- -- -- -- 3.28 21.74
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 16.73 0.02 4.78 (0.01) (0.01) (3.03) -- 1.75 18.48
1998--Class B
Shares.......... 16.67 0.02 4.61 -- -- (1.20) (1.83) 1.60 18.27
1998--Class C
Shares(b)....... 19.73 (0.02) 1.60 -- (0.04) (0.47) (2.56) (1.49) 18.24
1998--Institu-
tional
Shares(b)....... 19.88 0.02 1.66 (0.01) (0.07) (0.41) (2.62) (1.43) 18.45
1998--Service
Shares(b)....... 19.88 (0.01) 1.66 -- (0.04) (0.76) (2.27) (1.42) 18.46
- -----------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 14.91 0.10 3.56 (0.10) (0.02) (1.72) -- 1.82 16.73
1997--Class B
Shares(b)....... 15.67 0.01 2.81 (0.01) (0.09) (1.72) -- 1.00 16.67
- -----------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 13.67 0.12 3.93 (0.12) -- (2.69) -- 1.24 14.91
- -----------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.96 0.03 (0.69) (0.01) -- (1.62) -- (2.29) 13.67
- -----------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 14.64 0.02 2.40 (0.01) (0.02) (1.07) -- 1.32 15.96
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES
---------------------------
RATIO OF RATIO OF NET
NET ASSETS RATIO OF NET INVESTMENT RATIO OF INVESTMENT
PORTFOLIO AT END OF NET EXPENSES INCOME (LOSS) EXPENSES TO INCOME (LOSS)
TOTAL TURNOVER PERIOD TO AVERAGE TO AVERAGE AVERAGE NET TO AVERAGE
RETURN(A) RATE (IN 000S) NET ASSETS NET ASSETS ASSETS NET ASSETS
----------- ----------- ---------- ------------ --------------- ------------ --------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 17.91%(d) 10.02%(d) $1,639,118 1.39%(c) (0.12)%(c) 1.64%(c) (0.37)%(c)
1998--Class B
Shares.......... 17.52(d) 10.02(d) 125,092 2.14(c) (0.92)(c) 2.14(c) (0.92)(c)
1998--Class C
Shares.......... 17.43(d) 10.02(d) 27,385 2.14(c) (0.94)(c) 2.14(c) (0.94)(c)
1998--Institu-
tional Shares... 18.05(d) 10.02(d) 15,248 1.10(c) 0.11 (c) 1.10(c) 0.11 (c)
1998--Service
Shares.......... 17.77(d) 10.02(d) 1,222 1.60(c) (0.44)(c) 1.60(c) (0.44)(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 29.71 61.50 1,256,595 1.40 0.08 1.65 (0.17)
1998--Class B
Shares.......... 28.73 61.50 40,827 2.18 (0.77) 2.18 (0.77)
1998--Class C
Shares(b)....... 8.83(d) 61.50 5,395 2.21(c) (0.86)(c) 2.21(c) (0.86)(c)
1998--Institu-
tional
Shares(b)....... 9.31(d) 61.50 7,262 1.16(c) 0.18 (c) 1.16(c) 0.18 (c)
1998--Service
Shares(b)....... 9.18(d) 61.50 2 1.50(c) (0.16)(c) 1.50(c) (0.16)(c)
- -----------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 25.97 52.92 920,646 1.40 0.62 1.65 0.37
1997--Class B
Shares(b)....... 19.39(d) 52.92 3,221 2.15(c) (0.39)(c) 2.15(c) (0.39)(c)
- -----------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 30.45 63.90 881,056 1.36 0.65 1.61 0.40
- -----------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... (4.38) 38.36 862,105 1.38 0.16 1.63 (0.09)
- -----------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 16.89 36.12 833,682 1.38 0.13 1.63 (0.12)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class B, Class C, Institutional and Service Share activity commenced on
May 1, 1996, August 15, 1997, August 15, 1997 and August 15, 1997,
respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
14
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------------- ---------------------------------------------
NET REALIZED
AND UNREALIZED NET
GAIN (LOSS) ON FROM NET INCREASE NET
NET ASSET NET INVESTMENTS, IN EXCESS REALIZED (DECREASE) ASSET
VALUE, INVESTMENT OPTIONS AND FROM NET OF NET GAIN ON IN NET VALUE,
BEGINNING INCOME FOREIGN CURRENCY INVESTMENT INVESTMENT INVESTMENT ASSET END OF TOTAL
OF PERIOD (LOSS) RELATED TRANSACTIONS INCOME INCOME TRANSACTIONS VALUE PERIOD RETURN(A)
--------- ---------- -------------------- ---------- ---------- ------------ ---------- ------ ---------
MID CAP EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $21.61 $0.03 $(0.79) $ -- $ -- $ -- $(0.76) $20.85 (3.52)%(d)
1998--Class B
Shares.......... 21.57 (0.02) (0.78) -- -- -- (0.80) 20.77 (3.71)(d)
1998--Class C
Shares.......... 21.59 (0.02) (0.79) -- -- -- (0.81) 20.78 (3.75)(d)
1998--Institu-
tional Shares... 21.65 0.09 (0.80) -- -- -- (0.71) 20.94 (3.28)(d)
1998--Service
Shares.......... 21.62 -- (0.75) -- -- -- (0.75) 20.87 (3.47)(d)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares(b)....... 23.63 0.09 0.76 (0.06) (0.04) (2.77) (2.02) 21.61 3.42(d)
1998--Class B
Shares(b)....... 23.63 0.06 0.74 (0.09) -- (2.77) (2.06) 21.57 3.17(d)
1998--Class C
Shares(b)....... 23.63 0.06 0.76 (0.09) -- (2.77) (2.04) 21.59 3.27(d)
1998--Institu-
tional Shares... 18.73 0.16 5.66 (0.13) -- (2.77) 2.92 21.65 30.86
1998--Service
Shares(b)....... 23.01 0.09 1.40 (0.11) -- (2.77) (1.39) 21.62 6.30(d)
- ----------------------------------------------------------------------------------------------------------------------------
1997--Institu-
tional Shares... 15.91 0.24 3.77 (0.24) (0.93) (0.02) 2.82 18.73 25.63
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1996--Institu-
tional
Shares(b)....... 15.00 0.13 0.90 (0.12) -- -- 0.91 15.91 6.89(d)
<CAPTION>
RATIOS ASSUMING NO
EXPENSE LIMITATIONS
------------------------
RATIO OF RATIO OF
NET NET RATIO OF RATIO OF
EXPENSES INVESTMENT EXPENSES NET
NET ASSETS TO INCOME TO INVESTMENT
PORTFOLIO AT END OF AVERAGE (LOSS) TO AVERAGE INCOME (LOSS)
TURNOVER PERIOD NET AVERAGE NET TO AVERAGE
RATE (IN 000S) ASSETS NET ASSETS ASSETS NET ASSETS
----------- ---------- ---------- ------------ ---------- -------------
MID CAP EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 27.55%(d) $118,663 1.35%(c) 0.28%(c) 1.47%(c) 0.16%(c)
1998--Class B
Shares.......... 27.55(d) 46,268 1.85(c) (0.21)(c) 1.97(c) (0.33)(c)
1998--Class C
Shares.......... 27.55(d) 12,615 1.85(c) (0.21)(c) 1.97(c) (0.33)(c)
1998--Institu-
tional Shares... 27.55(d) 230,251 0.85(c) 0.79 (c) 0.97(c) 0.67 (c)
1998--Service
Shares.......... 27.55(d) 83 1.35(c) 0.18 (c) 1.47(c) 0.06 (c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares(b)....... 62.60 90,588 1.35(c) 0.33 (c) 1.47(c) 0.21 (c)
1998--Class B
Shares(b)....... 62.60 28,743 1.85(c) (0.20)(c) 1.97(c) (0.32)(c)
1998--Class C
Shares(b)....... 62.60 6,445 1.85(c) (0.23)(c) 1.97(c) (0.35)(c)
1998--Institu-
tional Shares... 62.60 236,440 0.85 0.78 0.97 0.66
1998--Service
Shares(b)....... 62.60 8 1.35(c) 0.63(c) 1.43(c) 0.51(c)
- ----------------------------------------------------------------------------------------------------------------------------
1997--Institu-
tional Shares... 74.03 145,253 0.85 1.35 0.91 1.29
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1996--Institu-
tional
Shares(b)....... 58.77(d) 135,671 0.85(c) 1.67(c) 0.98(c) 1.54(c)
</TABLE>
- -------------------------------------------------------------------------------
(a) Assumes Investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on August 15, 1997, August 15, 1997, August 15, 1997, August 1,
1995 and July 18, 1997, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
15
<PAGE>
<TABLE>
<CAPTION>
INCOME (LOSS) FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------------- -------------------------------------
FROM NET
NET REALIZED REALIZED GAIN
NET ASSET NET AND UNREALIZED FROM ON INVESTMENT, IN EXCESS NET INCREASE
VALUE, INVESTMENT GAIN (LOSS) ON NET OPTIONS AND OF NET (DECREASE) NET ASSET
BEGINNING INCOME INVESTMENT AND INVESTMENT, FUTURES INVESTMENT IN NET ASSET VALUE, END
OF PERIOD (LOSS) OPTIONS TRANSACTIONS INCOME TRANSACTIONS INCOME VALUE OF PERIOD
--------- ---------- -------------------- ----------- -------------- ---------- ------------ ----------
SMALL CAP VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $24.05 $(0.02) $(0.17) $ -- $ -- $ -- $(0.19) $23.86
1998--Class B
Shares.......... 23.73 (0.11) (0.17) -- -- -- (0.28) 23.45
1998--Class C
Shares.......... 23.73 (0.09) (0.19) -- -- -- (0.28) 23.45
1998--Institu-
tional Shares... 24.09 0.03 (0.18) -- -- -- (0.15) 23.94
1998--Service
Shares.......... 24.05 -- (0.19) -- -- -- (0.19) 23.86
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 20.91 0.14 5.33 -- (2.33) -- 3.14 24.05
1998--Class B
Shares.......... 20.80 (0.01) 5.27 -- (2.33) -- 2.93 23.73
1998--Class C
Shares(b)....... 24.69 (0.06) 1.43 -- (1.99) (0.34) (0.96) 23.73
1998--Institu-
tional
Shares(b)....... 24.91 0.03 1.48 -- (2.05) (0.28) (0.82) 24.09
1998--Service
Shares(b)....... 24.91 (0.01) 1.48 -- (2.02) (0.31) (0.86) 24.05
- ------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 17.29 (0.21) 4.92 -- (1.09) -- 3.62 20.91
1997--Class B
Shares(b)....... 20.79 (0.11) 1.21 -- (1.09) -- 0.01 20.80
- ------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 16.14 (0.23) 1.39 -- (0.01) -- 1.15 17.29
- ------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 20.67 (0.07) (3.53) -- (0.69) (0.24) (4.53) 16.14
- ------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 16.68 (0.04) 5.03 -- (1.00) -- 3.99 20.67
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1993--Class A
Shares(b)....... 14.18 0.03 2.50 (0.03) -- -- 2.50 16.68
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER
OF FEES
----------------------------
RATIO OF RATIO OF
NET ASSETS RATIO OF NET INVESTMENT RATIO OF NET INVESTMENT
PORTFOLIO AT END OF NET EXPENSES INCOME (LOSS) TO EXPENSES TO INCOME (LOSS)
TOTAL TURNOVER PERIOD TO AVERAGE AVERAGE NET AVERAGE TO AVERAGE NET
RETURN(A) RATE (IN 000S) NET ASSETS ASSETS NET ASSETS ASSETS
------------- ----------- ---------- ------------ ---------------- ------------ ---------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... (0.79)%(d) 46.40%(d) $402,797 1.50%(c) (0.16)%(c) 1.75%(c) (0.41)%(c)
1998--Class B
Shares.......... (1.18)(d) 46.40(d) 54,241 2.25(c) (0.90)(c) 2.25(c) (0.90)(c)
1998--Class C
Shares.......... (1.18)(d) 46.40(d) 9,308 2.25(c) (0.88)(c) 2.25(c) (0.88)(c)
1998--Institu-
tional Shares... (0.62)(d) 46.40(d) 18,197 1.15(c) 0.21(c) 1.15(c) 0.21(c)
1998--Service
Shares.......... (0.79)(d) 46.40(d) 76 1.65(c) (0.09)(c) 1.65(c) (0.09)(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 26.17 84.81 370,246 1.54 (0.28) 1.76 (0.50)
1998--Class B
Shares.......... 25.29 84.81 42,677 2.29 (0.92) 2.29 (0.92)
1998--Class C
Shares(b)....... 5.51(d) 84.81 5,604 2.09(c) (0.79)(c) 2.09(c) (0.79)(c)
1998--Institu-
tional
Shares(b)....... 6.08(d) 84.81 14,626 1.16(c) 0.27(c) 1.16(c) 0.27(c)
1998--Service
Shares(b)....... 5.91(d) 84.81 2 1.45(c) (0.07)(c) 1.45(c) (0.07)(c)
- ------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 27.28 99.46 212,061 1.60 (0.72) 1.85 (0.97)
1997--Class B
Shares(b)....... 5.39(d) 99.46 3,674 2.35(c) (1.63)(c) 2.35(c) (1.63)(c)
- ------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 7.20 57.58 204,994 1.41 (0.59) 1.66 (0.84)
- ------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... (17.53) 43.67 319,487 1.53 (0.53) 1.78 (0.78)
- ------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 30.13 56.81 261,074 1.60 (0.45) 1.85 (0.70)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1993--Class A
Shares(b)....... 17.86(d) 7.12 59,339 1.65(c) 0.62(c) 2.70(c) (0.43)(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on October 22, 1992, May 1, 1996, August 15, 1997, August 15,
1997 and August 15, 1997, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
16
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and principal investment policies of each Fund are
described below. Other investment practices and management techniques, which
involve certain risks are described under "Description of Securities," "Risk
Factors" and "Investment Techniques." There can be no assurance that a Fund's
investment objectives will be achieved.
The Investment Adviser may purchase for the Funds common stocks, preferred
stocks, interests in real estate investment trusts, convertible debt
obligations, convertible preferred stocks, equity interests in trusts,
partnerships, joint ventures, limited liability companies and similar
enterprises, warrants and stock purchase rights ("equity securities"). In
choosing a Fund's securities, the Investment Adviser utilizes first-hand
fundamental research, including visiting company facilities to assess
operations and to meet decision-makers. The Investment Adviser may also use
macro analysis of numerous economic and valuation variables to anticipate
changes in company earnings and the overall investment climate. The Investment
Adviser is able to draw on the research and market expertise of the Goldman
Sachs Global Investment Research Department and other affiliates of the
Investment Adviser, as well as information provided by other securities
dealers. Equity securities in a Fund's portfolio will generally be sold when
the Investment Adviser believes that the market price fully reflects or
exceeds the securities' fundamental valuation or when other more attractive
investments are identified.
Value Style Funds. The Growth and Income, Mid Cap Equity, Small Cap Value
Funds and the equity portion of the Balanced Fund are managed using a value
oriented approach. The Investment Adviser evaluates securities using
fundamental analysis and intends to purchase equity securities that are, in
its view, underpriced relative to a combination of such companies' long-term
earnings prospects, growth rate, free cash flow and/or dividend-paying
ability. Consideration will be given to the business quality of the issuer.
Factors positively affecting the Investment Adviser's view of that quality
include the competitiveness and degree of regulation in the markets in which
the company operates, the existence of a management team with a record of
success, the position of the company in the markets in which it operates, the
level of the company's financial leverage and the sustainable return on
capital invested in the business. The Funds may also purchase securities of
companies that have experienced difficulties and that, in the opinion of the
Investment Adviser, are available at attractive prices.
Growth Style Funds. The Capital Growth Fund is managed using a growth equity
oriented approach. Equity securities for this Fund is selected based on their
prospects for above average growth. The Investment Adviser will select
securities of growth companies trading, in the Investment Adviser's opinion,
at a reasonable price relative to other industries, competitors and historical
price/earnings multiples. The Fund generally will invest in companies whose
earnings are believed to be in a relatively strong growth trend, or, to a
lesser extent, in companies in which significant further growth is not
anticipated but whose market value per share is thought to be undervalued. In
order to determine whether a security has favorable growth prospects, the
Investment Adviser ordinarily looks for one or more of the following
characteristics in relation to the security's prevailing price: prospects for
above average sales and earnings growth per share; high return on invested
capital; free cash flow generation; sound balance sheet, financial and
accounting policies, and overall financial strength; strong competitive
advantages; effective research, product development, and marketing; pricing
flexibility; strength of management; and general operating characteristics
that will enable the company to compete successfully in its marketplace.
17
<PAGE>
Quantitative Style Funds. The CORE Large Cap Value, CORE U.S. Equity, CORE
Large Cap Growth and CORE Small Cap Equity Funds (the "CORE Funds") are
managed using both quantitative and fundamental techniques. CORE is an acronym
for "Computer-Optimized, Research-Enhanced," which reflects the CORE Funds'
investment process. This investment process and the proprietary multifactor
model used to implement it are discussed below.
Investment Process. The Investment Adviser begins with a broad universe of
U.S. equity securities for the CORE Funds. As described more fully below, the
Investment Adviser uses a proprietary multifactor model (the "Multifactor
Model") to forecast the returns of different markets and individual
securities. In the case of an equity security followed by the Goldman Sachs
Global Investment Research Department (the "Research Department"), a rating is
assigned based upon the Research Department's evaluation. In the discretion of
the Investment Adviser, ratings may also be assigned to equity securities
based on research ratings obtained from other industry sources.
In building a diversified portfolio for each CORE Fund, the Investment
Adviser utilizes optimization techniques to seek to maximize the Fund's
expected return, while maintaining a risk profile similar to the Fund's
benchmark. Each portfolio is primarily comprised of securities rated highest
by the foregoing investment process and has risk characteristics and industry
weightings similar to the relevant Fund's benchmark.
Multifactor Model. The Multifactor Model is a rigorous computerized rating
system for forecasting the returns of different equity markets and individual
equity securities according to fundamental investment characteristics. The
CORE Funds use the Multifactor Model to forecast the returns of securities
held in each Fund's portfolio. The Multifactor Model incorporates common
variables covering measures of value, growth, momentum and risk (e.g.,
book/price ratio, earnings/price ratio, price momentum, price volatility,
consensus growth forecasts, earnings estimate revisions and earnings
stability). All of the factors used in the Multifactor Model have been shown
to significantly impact the performance of the securities and markets they
were designed to forecast.
The weightings assigned to the factors in the Multifactor Model used by the
CORE Funds are derived using a statistical formulation that considers each
factor's historical performance in different market environments. As such, the
Multifactor Model is designed to evaluate each security using only the factors
that are statistically related to returns in the anticipated market
environment. Because it includes many disparate factors, the Investment
Adviser believes that the Multifactor Model is broader in scope and provides a
more thorough evaluation than most conventional, quantitative models.
Securities and markets ranked highest by the Multifactor Model do not have one
dominant investment characteristic; rather, they possess an attractive
combination of investment characteristics.
Research Department. In assigning ratings to equity securities, the Research
Department uses a four category rating system ranging from "recommended for
purchase" to "likely to underperform." The ratings reflect the analyst's
judgment as to the investment results of a specific security and incorporate
economic outlook, valuation, risk and a variety of other factors.
By employing both a quantitative (i.e., the Multifactor Model) and a
qualitative (i.e., research enhanced) method of selecting securities, the CORE
Funds seek to capitalize on the strengths of each discipline.
18
<PAGE>
BALANCED FUND
Objective. The Fund's investment objective is to provide investors with
long-term capital growth and current income. The Fund seeks capital
appreciation primarily through the equity component of its portfolio while
investing in fixed income securities primarily to provide income for regular
quarterly dividends.
Primary Investment Focus. The Fund invests, under normal circumstances,
between 45% and 65% of its total assets in equity securities. The Fund also
invests at least 25% of its total assets in fixed-income senior securities and
the remainder of its assets in other fixed income securities and cash. The
percentage of the portfolio invested in equity and fixed-income securities
will vary from time to time as the Investment Adviser evaluates their relative
attractiveness based on market valuations, economic growth and inflation
prospects. This allocation is subject to the Fund's intention to pay regular
quarterly dividends. The amount of quarterly dividends can also be expected to
fluctuate in accordance with factors such as prevailing interest rates and the
percentage of the Fund's assets invested in fixed-income securities.
Other. Although the Fund's equity investments consist primarily of publicly
traded U.S. securities, the Fund may invest up to 10% of its total assets in
the equity securities of foreign issuers, including issuers in Emerging
Countries and equity securities quoted in foreign currencies. A portion of the
Fund's portfolio of equity securities may be selected primarily to provide
current income. Equity securities selected to provide current income may
include interests in real estate investment trusts, convertible securities,
preferred stocks, utility stocks and interests in limited partnerships.
The Fund's fixed-income securities primarily include securities issued by
the U.S. Government, its agencies, instrumentalities or sponsored enterprises,
corporations or other entities, mortgage-backed and asset-backed securities,
municipal securities and custodial receipts. The Fund may also invest in debt
obligations (U.S. dollar and non-U.S. dollar denominated) issued or guaranteed
by one or more foreign governments or any of their political subdivisions,
agencies or instrumentalities and foreign corporations or other entities. Such
securities are collectively referred to herein as "fixed-income securities."
The Fund's investments in fixed-income securities that are issued by foreign
issuers, including issuers in Emerging Countries, may not exceed 10% of the
Fund's total assets. The Fund may employ certain currency techniques to seek
to hedge against currency exchange rate fluctuations or to seek to increase
total return. When used to seek to enhance return, these management techniques
are considered speculative. Such currency management techniques involve risks
different from those associated with investing solely in securities of U.S.
issuers quoted in U.S. dollars. See "Description of Securities," "Investment
Techniques" and "Risk Factors."
GROWTH AND INCOME FUND
Objectives. The Fund's investment objectives are to provide investors with
long-term growth of capital and growth of income.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 65% of its total assets in equity securities that the Investment Adviser
considers to have favorable prospects for capital appreciation and/or
dividend-paying ability.
Other. The Fund may invest up to 35% of its total assets in fixed-income
securities that, in the opinion of the Investment Adviser, offer the potential
to further the Fund's investment objectives. In addition, although the Fund
will invest primarily in publicly traded U.S. securities, it may invest up to
25% of its total assets in foreign securities, including securities of issuers
in Emerging Countries and securities quoted in foreign currencies.
19
<PAGE>
CORE LARGE CAP VALUE FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital and dividend income. The Fund seeks to achieve its
objective through a broadly diversified portfolio of equity securities of
large cap U.S. issuers that are selling at low to modest valuations relative
to general market measures such as earnings, book value and other fundamental
accounting measures, and that are expected to have favorable prospects for
capital appreciation and/or dividend-paying ability.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the Russell 1000 Value Index. The Fund seeks a portfolio comprised of
companies with above average capitalizations and low to moderate valuations as
measured by price/earnings ratios, book value and other fundamental accounting
measures. The Fund may invest only in fixed-income securities that are
considered cash equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CORE U.S. EQUITY FUND (FORMERLY, THE "SELECT EQUITY FUND")
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital and dividend income. The Fund seeks to achieve its
objective through a broadly diversified portfolio of large cap and blue chip
equity securities representing all major sectors of the U.S. economy.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the S&P 500 Index. The Fund seeks a broad representation in most major
sectors of the U.S. economy and a portfolio comprised of companies with
average long-term earnings growth expectations and dividend yields. The Fund
may invest only in fixed-income securities that are considered cash
equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CORE LARGE CAP GROWTH FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital. The Fund seeks to achieve its objective through a
broadly diversified portfolio of equity securities of large cap U.S. issuers
that are expected to have better prospects for earnings growth than the growth
rate of the general domestic economy. Dividend income is a secondary
consideration.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Investment
Adviser emphasizes a company's growth prospects in analyzing equity securities
to be purchased by
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the Fund. The Fund's investments are selected using both a variety of
quantitative techniques and fundamental research in seeking to maximize the
Fund's expected return, while maintaining risk, style, capitalization and
industry characteristics similar to the Russell 1000 Growth Index. The Fund
seeks a portfolio comprised of companies with above average capitalizations
and earnings growth expectations and below average dividend yields. The Fund
may invest only in fixed-income securities that are considered cash
equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CORE SMALL CAP EQUITY FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital. The Fund seeks to achieve its objective through a
broadly diversified portfolio of equity securities of U.S. issuers which are
included in the Russell 2000 Index at the time of investment.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the Russell 2000 Index. The Fund seeks a portfolio comprised of companies
with small market capitalizations, strong expected earnings growth and
momentum, and better valuation and risk characteristics than the Russell 2000
Index. The Fund may invest only in fixed-income securities that are considered
cash equivalents.
The Investment Adviser believes that companies in which the Fund may invest
offer greater opportunity for growth of capital than larger, more mature,
better known companies. Investments in small market capitalization issuers
involve special risks. See "Description of Securities" and "Risk Factors." If
the issuer of a portfolio security held by the Fund is no longer included in
the Russell 2000 Index, the Fund may, but is not required to, sell the
security.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CAPITAL GROWTH FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities. The Fund seeks to achieve
its investment objective by investing in a diversified portfolio of equity
securities that are considered by the Investment Adviser to have long-term
capital appreciation potential.
Other. Although the Fund will invest primarily in publicly traded U.S.
securities, it may invest up to 10% of its total assets in foreign securities,
including securities of issuers in Emerging Countries and securities quoted in
foreign currencies.
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MID CAP EQUITY FUND
Objective. The Fund's investment objective is to provide investors with
long-term capital appreciation.
Primary Investment Focus. The Fund invests, under normal circumstances,
substantially all of its assets in equity securities and at least 65% of its
total assets in equity securities of Mid-Cap Companies with public stock
market capitalizations (based upon shares available for trading on an
unrestricted basis) within the range of the market capitalization of companies
constituting the Russell Midcap Index at the time of investment (currently
between $400 million and $16 billion). If the capitalization of an issuer
increases above $16 billion after purchase of such issuer's securities, the
Fund may, but is not required to, sell the securities. Dividend income, if
any, is an incidental consideration.
Other. The Fund may invest up to 35% of its total assets in fixed-income
securities. In addition, although the Fund will invest primarily in publicly
traded U.S. securities, it may invest up to 25% of its total assets in foreign
securities, including securities of issuers in Emerging Countries and
securities quoted in foreign currencies.
SMALL CAP VALUE FUND (FORMERLY, THE "SMALL CAP EQUITY FUND")
Objective. The Fund's investment objective is to provide investors with
long-term capital growth.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 65% of its total assets in equity securities of companies with public
stock market capitalizations of $1 billion or less at the time of investment.
Under normal circumstances, the Fund's investment horizon for ownership of
stocks will be two to three years. Dividend income, if any, is an incidental
consideration. If the market capitalization of a company held by the Fund
increases above the amount stated above, the Fund may, consistent with its
investment objective, continue to hold the security.
Small Capitalization Companies. The Fund invests in companies which the
Investment Adviser believes are well managed niche businesses that have the
potential to achieve high or improving returns on capital and/or above average
sustainable growth. The Fund may invest in securities of small market
capitalization companies which may have experienced financial difficulties.
Investments may also be made in companies that are in the early stages of
their life and that the Investment Adviser believes have significant growth
potential. The Investment Adviser believes that the companies in which the
Fund may invest offer greater opportunity for growth of capital than larger,
more mature, better known companies. However, investments in such small market
capitalization companies involve special risks. See "Description of
Securities" and "Risk Factors."
Other. The Fund may invest in the aggregate up to 35% of its total assets in
the equity securities of companies with public stock market capitalizations in
excess of $1 billion at the time of investment and in fixed- income
securities. In addition, although the Fund will invest primarily in publicly
traded U.S. securities, it may invest up to 25% of its total assets in foreign
securities, including securities of issuers in Emerging Countries and
securities quoted in foreign currencies.
DESCRIPTION OF SECURITIES
The Funds may invest in equity and fixed income securities in accordance
with the investment policies stated above. Certain of these permitted
investments are described in more detail in this section.
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CONVERTIBLE SECURITIES
Each Fund may invest in convertible securities, including debt obligations
and preferred stock of the issuer convertible at a stated exchange rate into
common stock of the issuer. Convertible securities generally offer lower
interest or dividend yields than non-convertible securities of similar
quality. As with all fixed-income securities, the market value of convertible
securities tends to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, when the market price of the
common stock underlying a convertible security exceeds the conversion price,
the convertible security tends to reflect the market price of the underlying
common stock. As the market price of the underlying common stock declines, the
convertible security tends to trade increasingly on a yield basis, and thus
may not decline in price to the same extent as the underlying common stock.
Convertible securities rank senior to common stocks in an issuer's capital
structure and consequently entail less risk than the issuer's common stock. In
evaluating a convertible security, the Investment Adviser will give primary
emphasis to the attractiveness of the underlying common stock. The convertible
debt securities in which the Balanced Fund invests will be rated, at the time
of investment, B or better by Standard & Poor's Ratings Group ("Standard &
Poor's") or Moody's Investors Service, Inc. ("Moody's"), or if unrated by such
rating organizations, determined to be of comparable quality by the Investment
Adviser. The convertible securities in which the CORE Funds invest are not
subject to any minimum rating criteria. The convertible debt securities in
which the other Funds may invest are subject to the same rating criteria as a
Fund's investments in non-convertible debt securities. Convertible debt
securities are equity investments for purposes of each Fund's investment
policies.
FOREIGN INVESTMENTS
FOREIGN SECURITIES. Each Fund may invest in the securities of foreign
issuers (provided that the CORE Funds may only invest in equity securities of
foreign issuers that are traded in the U.S.). Investments in foreign
securities may offer potential benefits that are not available from
investments exclusively in equity securities of domestic issuers quoted in
U.S. dollars. Foreign countries may have economic policies or business cycles
different from those of the U.S. and markets for foreign securities do not
necessarily move in a manner parallel to U.S. markets.
Investing in the securities of foreign issuers involves certain special
risks, including those set forth below, which are not typically associated
with investing in U.S. dollar denominated or quoted securities of U.S.
issuers. Such investments may be affected by changes in currency rates,
changes in foreign or U.S. laws or restrictions applicable to such investments
and in exchange control regulations (e.g., currency blockage). A decline in
the exchange rate of the currency (i.e., weakening of the currency against the
U.S. dollar) in which a portfolio security is quoted or denominated relative
to the U.S. dollar would reduce the value of the portfolio security. In
addition, if the currency in which a Fund receives dividends, interest or
other payments declines in value against the U.S. dollar before such income is
distributed as dividends to shareholders or converted to U.S. dollars, the
Fund may have to sell portfolio securities to obtain sufficient cash to pay
such dividends. The expected introduction of a single currency, the euro, on
January 1, 1999 for participating European nations in the Economic and
Monetary Union ("EU") presents unique uncertainties, including whether the
payment and operational systems of banks and other financial institutions will
be ready by the scheduled launch date; the creation of suitable clearing and
settlement payment systems for the new currency; the legal treatment of
certain outstanding financial contracts after January 1, 1999 that refer to
existing currencies rather than the euro; the establishment and maintenance of
exchange rates for currencies being converted into the euro and the euro; the
fluctuation of the euro relative to non-euro currencies during the transition
period from January 1, 1999 to December 31, 2000 and beyond; whether the
interest rate, tax and labor regimes of European countries
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participating in the euro will converge over time; and whether the conversion
of the currencies of other EU countries such as the United Kingdom, Denmark
and Greece into the euro and the admission of other non-EU countries such as
Poland, Latvia and Lithuania as members of the EU may have an impact on the
euro. These or other factors, including political and economic risks, could
cause market disruptions before or after the introduction of the euro, and
could adversely affect the value of securities and foreign currencies held by
the Funds. Commissions on transactions in foreign securities may be higher
than those for similar transactions on domestic stock markets. In addition,
clearance and settlement procedures may be different in foreign countries and,
in certain markets, such procedures have been unable to keep pace with the
volume of securities transactions, thus making it difficult to conduct such
transactions.
Foreign issuers are not generally subject to uniform accounting, auditing
and financial reporting standards comparable to those applicable to U.S.
issuers. There may be less publicly available information about a foreign
issuer than about a U.S. issuer. In addition, there is generally less
government regulation of foreign markets, companies and securities dealers
than in the United States. Foreign securities markets may have substantially
less volume than U.S. securities markets and securities of many foreign
issuers are less liquid and more volatile than securities of comparable
domestic issuers. Furthermore, with respect to certain foreign countries,
there is a possibility of nationalization, expropriation or confiscatory
taxation, imposition of withholding or other taxes on dividend or interest
payments (or, in some cases, capital gains), limitations on the removal of
funds or other assets of the Funds, political or social instability or
diplomatic developments which could affect investments in those countries.
INVESTMENTS IN ADRS, EDRS AND GDRS. Each Fund may invest in foreign
securities which take the form of sponsored and unsponsored American
Depository Receipts ("ADRs") and Global Depository Receipts ("GDRs") and each
Fund, other than the CORE Funds, may also invest in European Depository
Receipts ("EDRs") or other similar instruments representing securities of
foreign issuers (together, "Depository Receipts"). ADRs represent the right to
receive securities of foreign issuers deposited in a domestic bank or a
correspondent bank. Prices of ADRs are quoted in U.S. dollars, and ADRs are
traded in the United States on exchanges or over-the-counter and are sponsored
and issued by domestic banks. EDRs and GDRs are receipts evidencing an
arrangement with a non-U.S. bank. EDRs and GDRs are not necessarily quoted in
the same currency as the underlying security. To the extent a Fund acquires
Depository Receipts through banks which do not have a contractual relationship
with the foreign issuer of the security underlying the Depository Receipts to
issue and service such Depository Receipts (unsponsored Depository Receipts),
there may be an increased possibility that the Fund would not become aware of
and be able to respond to corporate actions, such as stock splits or rights
offerings involving the foreign issuer, in a timely manner. In addition, the
lack of information may result in inefficiencies in the valuation of such
instruments. Investment in Depository Receipts does not eliminate all the
risks inherent in investing in securities of non-U.S. issuers. The market
value of Depository Receipts is dependent upon the market value of the
underlying securities and fluctuations in the relative value of the currencies
in which the Depository Receipt and the underlying securities are quoted.
However, by investing in Depository Receipts, such as ADRs, that are quoted in
U.S. dollars, a Fund may avoid currency risks during the settlement period for
purchases and sales.
FOREIGN CURRENCY TRANSACTIONS. Because investment in foreign issuers will
usually involve currencies of foreign countries, and because the Balanced Fund
may have currency exposure independent of its securities positions, the value
of the assets of a Fund as measured in U.S. dollars will be affected by
changes in foreign currency exchange rates. A Fund may, to the extent it
invests in foreign securities, purchase or sell foreign currencies on a spot
basis and may also purchase or sell forward foreign currency exchange
contracts for hedging
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purposes and to seek to protect against anticipated changes in future foreign
currency exchange rates. In addition, the Balanced Fund may enter into such
contracts to seek to increase total return when the Investment Adviser
anticipates that the foreign currency will appreciate or depreciate in value,
but securities denominated or quoted in that currency do not present
attractive investment opportunities and are not held in the Fund's portfolio.
When entered into to seek to enhance return, forward foreign currency exchange
contracts are considered speculative. The Balanced Fund may also engage in
cross-hedging by using forward contracts in a currency different from that in
which the hedged security is denominated or quoted if the Investment Adviser
determines that there is a pattern of correlation between the two currencies.
If a Fund enters into a forward foreign currency exchange contract to buy
foreign currency for any purpose or the Balanced Fund enter into forward
foreign currency exchange contracts to sell foreign currency to seek to
increase total return, the Fund will segregate cash or liquid assets in an
amount equal to the value of the Fund's total assets committed to the
consummation of the forward contract, or otherwise cover its position in a
manner permitted by the SEC. The Fund will incur costs in connection with
conversions between various currencies. A Fund may hold foreign currency
received in connection with investments in foreign securities when, in the
judgment of the Investment Adviser, it would be beneficial to convert such
currency into U.S. dollars at a later date, based on anticipated changes in
the relevant exchange rate.
Currency exchange rates may fluctuate significantly over short periods of
time causing, along with other factors, a Fund's NAV to fluctuate. Currency
exchange rates generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of investments in
different countries, actual or anticipated changes in interest rates and other
complex factors, as seen from an international perspective. Currency exchange
rates also can be affected unpredictably by the intervention of U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the U.S. or abroad. To the
extent that a substantial portion of a Fund's total assets, adjusted to
reflect the Fund's net position after giving effect to currency transactions,
is denominated or quoted in the currencies of foreign countries, the Fund will
be more susceptible to the risk of adverse economic and political developments
within those countries.
The market in forward foreign currency exchange contracts, currency swaps
and other privately negotiated currency instruments offers less protection
against defaults by the other party to such instruments than is available for
currency instruments traded on an exchange. Such contracts are subject to the
risk that the counterparty to the contract will default on its obligations.
Since these contracts are not guaranteed by an exchange or clearinghouse, a
default on the contract would deprive the Fund of unrealized profits,
transaction costs or the benefits of a currency hedge or force the Fund to
cover its purchase or sale commitments, if any, at the current market price. A
Fund will not enter into forward foreign currency exchange contracts, currency
swaps or other privately negotiated currency instruments unless the credit
quality of the unsecured senior debt or the claims-paying ability of the
counterparty is considered to be investment grade by the Investment Adviser.
The Balanced Fund may also engage in a variety of foreign currency
management techniques. For a discussion of such instruments and the risks
associated with their use, see "Investment Objective and Policies" in the
Additional Statement.
FIXED-INCOME SECURITIES
U.S. GOVERNMENT SECURITIES. Each Fund may invest in U.S. Government
securities. Generally, these securities include U.S. Treasury obligations and
obligations issued or guaranteed by U.S. Government agencies,
instrumentalities or sponsored enterprises. U.S. Government securities also
include Treasury receipts and other
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stripped U.S. Government securities, where the interest and principal
components of stripped U.S. Government securities are traded independently. A
Fund may also invest in zero coupon U.S. Treasury securities and in zero
coupon securities issued by financial institutions, which represent a
proportionate interest in underlying U.S. Treasury securities. A zero coupon
security pays no interest to its holder during its life and its value consists
of the difference between its face value at maturity and its cost. The market
prices of zero coupon securities generally are more volatile than the market
prices of securities that pay interest periodically. See "Taxation" in the
Additional Statement.
FOREIGN GOVERNMENT SECURITIES. The Balanced Fund may invest in debt
obligations of foreign governments and governmental agencies, including those
of Emerging Countries. Investment in sovereign debt obligations involves
special risks not present in debt obligations of corporate issuers. The issuer
of the debt or the governmental authorities that control the repayment of the
debt may be unable or unwilling to repay principal or interest when due in
accordance with the terms of such debt, and the Fund may have limited recourse
in the event of a default. Periods of economic uncertainty may result in the
volatility of market prices of sovereign debt, and in turn the Fund's NAV, to
a greater extent than the volatility inherent in debt obligations of U.S.
issuers. A sovereign debtor's willingness or ability to repay principal and
pay interest in a timely manner may be affected by, among other factors, its
cash flow situation, the extent of its foreign currency reserves, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of the debt service burden to the economy as a whole, the
sovereign debtor's policy toward international lenders and the political
constraints to which a sovereign debtor may be subject.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. Each Fund (other than the CORE
Funds) may invest in mortgage-backed securities ("Mortgage-Backed
Securities"), which represent direct or indirect participations in, or are
collateralized by and payable from, mortgage loans secured by real property.
Each Fund (other than the CORE Funds) may also invest in asset-backed
securities ("Asset-Backed Securities"). The principal and interest payments on
Asset-Backed Securities are collateralized by pools of assets such as auto
loans, credit card receivables, leases, installment contracts and personal
property. Such asset pools are securitized through the use of special purpose
trusts or corporations. Principal and interest payments may be credit enhanced
by a letter of credit, a pool insurance policy or a senior/subordinated
structure.
The Balanced Fund may also invest in stripped Mortgage-Backed Securities
("SMBS") (including interest only and principal only securities), which are
derivative multiple class Mortgage-Backed Securities. SMBS are usually
structured with two different classes: one that receives 100% of the interest
payments and the other that receives 100% of the principal payments from a
pool of mortgage loans. If the underlying mortgage loans experience different
than anticipated prepayments of principal, the Fund may fail to recoup fully
its initial investment in these securities. The market value of the class
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates. The yields on a class of SMBS that
receives all or most of the interest from mortgage loans are generally higher
than prevailing market yields on other Mortgage-Backed Securities because
their cash flow patterns are more volatile and there is a greater risk that
the initial investment will not be fully recouped. The Fund's investments in
SMBS may require the Fund to sell portfolio securities to generate sufficient
cash to satisfy certain income distribution requirements.
CORPORATE DEBT OBLIGATIONS. Each Fund may invest in corporate debt
obligations. Corporate debt obligations are subject to the risk of an issuer's
inability to meet principal and interest payments on the obligations.
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BANK OBLIGATIONS. Each Fund may invest in obligations issued or guaranteed
by U.S. or foreign banks. Bank obligations, including without limitations,
time deposits, bankers' acceptances and certificates of deposit, may be
general obligations of the parent bank or may be limited to the issuing branch
by the terms of the specific obligations or by government regulation. Banks
are subject to extensive but different governmental regulations which may
limit both the amount and types of loans which may be made and interest rates
which may be charged. In addition, the profitability of the banking industry
is largely dependent upon the availability and cost of funds for the purpose
of financing lending operations under prevailing money market conditions.
General economic conditions as well as exposure to credit losses arising from
possible financial difficulties of borrowers play an important part in the
operation of this industry.
STRUCTURED SECURITIES. Each Fund may invest in structured securities. The
value of the principal of and/or interest on such securities is determined by
reference to changes in the value of specific currencies, interest rates,
commodities, indices or other financial indicators (the "Reference") or the
relative change in two or more References. The interest rate or the principal
amount payable upon maturity or redemption may be increased or decreased
depending upon changes in the applicable Reference. The terms of the
structured securities may provide that in certain circumstances no principal
is due at maturity and, therefore, result in the loss of a Fund's investment.
Structured securities may be positively or negatively indexed, so that
appreciation of the Reference may produce an increase or decrease in the
interest rate or value of the security at maturity. In addition, changes in
the interest rates or the value of the security at maturity may be a multiple
of changes in the value of the Reference. Consequently, structured securities
may entail a greater degree of market risk than other types of fixed-income
securities. Structured securities may also be more volatile, less liquid and
more difficult to price accurately than less complex securities.
RATING CRITERIA. Except as noted below, each Fund (other than the CORE
Funds, which only invest in debt instruments that are cash equivalents) may
invest in debt securities rated at least investment grade at the time of
investment. Investment grade debt securities are securities rated BBB or
higher by Standard & Poor's or Baa or higher by Moody's. A security will be
deemed to have met a rating requirement if it receives the minimum required
rating from at least one such rating organization even though it has been
rated below the minimum rating by one or more other rating organizations, or
if unrated by such rating organizations, determined by the Investment Adviser
to be of comparable credit quality. The Balanced Fund may invest up to 10% of
its total assets on debt securities that are rated BB or B by Standard &
Poor's or Ba or B by Moody's. The Growth and Income, Capital Growth and Small
Cap Value Funds may invest up to 10%, 10% and 35%, respectively, of their
total assets in debt securities which are unrated or rated in the lowest
rating categories by Standard & Poor's or Moody's (i.e., BB or lower by
Standard & Poor's or Ba or lower by Moody's), including securities rated D by
Moody's or Standard & Poor's. Mid Cap Equity Fund may invest up to 10% of its
total assets in below investment grade debt securities rated B or higher by
Standard & Poor's or B or higher by Moody's. Fixed-income securities rated BBB
or Baa are considered medium-grade obligations with speculative
characteristics, and adverse economic conditions or changing circumstances may
weaken their issuers' capacity to pay interest and repay principal. Fixed-
income securities rated BB or Ba or below (or comparable unrated securities)
are commonly referred to as "junk bonds," are considered predominately
speculative and may be questionable as to principal and interest payments. In
some cases, such bonds may be highly speculative, have poor prospects for
reaching investment grade standing and be in default. As a result, investment
in such bonds will entail greater speculative risks than those associated with
investment in investment grade bonds. Also, to the extent that the rating
assigned to a security in a Fund's portfolio is downgraded by a rating
organization, the market price and liquidity of such security may be adversely
affected. See Appendix A to the Additional Statement for a description of the
corporate bond ratings assigned by Standard & Poor's and Moody's.
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REAL ESTATE INVESTMENT TRUSTS ("REITS")
Each Fund may invest in REITs, which are pooled investment vehicles that
invest primarily in either real estate or real estate related loans. The value
of a REIT is affected by changes in the value of the properties owned by the
REIT or securing mortgage loans held by the REIT. REITs are dependent upon
cash flow from their investments to repay financing costs and the ability of
the REITs' manager. REITs are also subject to risks generally associated with
investments in real estate. A Fund will indirectly bear its proportionate
share of any expenses, including management fees, paid by a REIT in which it
invests.
INVESTMENT TECHNIQUES
OPTIONS ON SECURITIES AND SECURITIES INDICES
Each Fund (other than the CORE Large Cap Value, CORE U.S. Equity and CORE
Large Cap Growth Funds) may write (sell) covered call and put options and
purchase call and put options on any securities in which it may invest or on
any securities index composed of securities in which it may invest. The
writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The use of options to seek to
increase total return involves the risk of loss if the Investment Adviser is
incorrect in its expectation of fluctuations in securities prices or interest
rates. The successful use of options for hedging purposes also depends in part
on the ability of the Investment Adviser to manage future price fluctuations
and the degree of correlation between the options and securities markets. If
the Investment Adviser is incorrect in its expectation of changes in
securities prices or determination of the correlation between the securities
indices on which options are written and purchased and the securities in a
Fund's investment portfolio, the investment performance of the Fund will be
less favorable than it would have been in the absence of such options
transactions. The writing of options could significantly increase a Fund's
portfolio turnover rate and, therefore, associated brokerage commissions or
spreads.
OPTIONS ON FOREIGN CURRENCIES
A Fund may, to the extent it invests in foreign securities, purchase and
sell (write) call and put options on foreign currencies for the purpose of
protecting against declines in the U.S. dollar value of foreign portfolio
securities and anticipated dividends on such securities and against increases
in the U.S. dollar cost of foreign securities to be acquired. In addition, the
Balanced Fund may use options on currency to cross-hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates for a different currency, if there is a pattern of correlation
between the two currencies. As with other kinds of options transactions,
however, the writing of an option on a foreign currency will constitute only a
partial hedge, up to the amount of the premium received. If an option that a
Fund has written is exercised, the Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates, thereby incurring
losses. The purchase of an option on foreign currency may constitute an
effective hedge against exchange rate fluctuations; however, in the event of
exchange rate movements adverse to a Fund's position, the Fund may forfeit the
entire amount of the premium plus related transaction costs. In addition to
purchasing call and put options for hedging purposes, the Balanced Fund may
purchase call or put options on currency to seek to increase total return when
the Investment Adviser anticipates that the currency will appreciate or
depreciate in value, but the securities quoted or denominated in that currency
do not present attractive investment opportunities and are not held in the
Fund's portfolio. When purchased or sold to seek to increase total return,
options on currencies are considered speculative. Options on foreign
currencies written or purchased by the Funds are traded on U.S. and foreign
exchanges or over-the-counter.
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FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
To seek to increase total return or to hedge against changes in interest
rates, securities prices or currency exchange rates, a Fund may purchase and
sell various kinds of futures contracts, and purchase and write call and put
options on any of such futures contracts. Each Fund may also enter into
closing purchase and sale transactions with respect to any such contracts and
options. The futures contracts may be based on various securities (such as
U.S. Government securities), foreign currencies, securities indices and other
financial instruments and indices. The CORE Large Cap Value, CORE U.S. Equity
and CORE Large Cap Growth Funds may enter into such transactions only with
respect to the S&P 500 Index in the case of the CORE U.S. Equity Fund and a
representative index in the case of the CORE Large Cap Value and CORE Large
Cap Growth Funds. A Fund will engage in futures and related options
transactions for bona fide hedging purposes as defined in regulations of the
Commodity Futures Trading Commission or to seek to increase total return to
the extent permitted by such regulations. A Fund may not purchase or sell
futures contracts or purchase or sell related options to seek to increase
total return, except for closing purchase or sale transactions, if immediately
thereafter the sum of the amount of initial margin deposits and premiums paid
on the Fund's outstanding positions in futures and related options entered
into for the purpose of seeking to increase total return would exceed 5% of
the market value of the Fund's net assets. These transactions involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating a Fund to purchase securities or currencies, require the
Fund to segregate and maintain cash or liquid assets with a value equal to the
amount of the Fund's obligations or to otherwise cover the obligations in a
manner permitted by the SEC.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. See
"Investment Objectives and Policies--Futures Contracts and Options on Future
Contracts" in the Additional Statement. Thus, while a Fund may benefit from
the use of futures and options on futures, unanticipated changes in interest
rates, securities prices or currency exchange rates may result in poorer
overall performance than if the Fund had not entered into any futures
contracts or options transactions. Because perfect correlation between a
futures position and portfolio position that is intended to be protected is
impossible to achieve, the desired protection may not be obtained and a Fund
may be exposed to risk of loss. The loss incurred by a Fund in entering into
futures contracts and in writing call options on futures is potentially
unlimited and may exceed the amount of the premium received. Futures markets
are highly volatile and the use of futures may increase the volatility of a
Fund's NAV. The profitability of a Fund's trading in futures to seek to
increase total return depends upon the ability of the Investment Adviser to
analyze correctly the futures markets. In addition, because of the low margin
deposits normally required in futures trading, a relatively small price
movement in a futures contract may result in substantial losses to a Fund.
Further, futures contracts and options on futures may be illiquid, and
exchanges may limit fluctuations in futures contract prices during a single
day. The Funds may engage in futures transactions on both U.S. and foreign
exchanges. Foreign exchanges may not provide the same protection as U.S.
exchanges.
STANDARD AND POOR'S DEPOSITORY RECEIPTS
Each Fund may, consistent with its objectives, purchase Standard & Poor's
Depository Receipts ("SPDRs"). SPDRs are American Stock Exchange-traded
securities that represent ownership in the SPDR Trust, a trust which has been
established to accumulate and hold a portfolio of common stocks that is
intended to track the price performance and dividend yield of the S&P 500.
This trust is sponsored by a subsidiary of the American Stock Exchange. SPDRs
may be used for several reasons, including but not limited to: facilitating
the handling of cash flows or trading, or reducing transaction costs. The use
of SPDRs would introduce additional risk to the
29
<PAGE>
Fund as the price movement of the instrument does not perfectly correlate with
the price action of the underlying index.
EQUITY SWAPS
Each Fund may invest up to 10% of its total assets in equity swaps. Equity
swaps allow the parties to a swap agreement to exchange the dividend income or
other components of return on an equity investment (e.g., a group of equity
securities or an index) for a component of return on another non-equity or
equity investment. An equity swap may be used by a Fund to invest in a market
without owning or taking physical custody of securities in circumstances in
which direct investment may be restricted for legal reasons or is otherwise
impractical. Equity swaps are derivatives and their value can be very
volatile. To the extent that the Investment Adviser does not accurately
analyze and predict the potential relative fluctuation of the components
swapped with another party, a Fund may suffer a loss. The value of some
components of an equity swap (such as the dividends on a common stock) may
also be sensitive to changes in interest rates. Furthermore, during the period
a swap is outstanding, a Fund may suffer a loss if the counterparty defaults.
In connection with its investments in equity swaps, a Fund will either
segregate cash or liquid assets or otherwise cover its obligations in a manner
required by the SEC.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS
Each Fund may purchase when-issued securities. When-issued transactions
arise when securities are purchased by a Fund with payment and delivery taking
place in the future in order to secure what is considered to be an
advantageous price and yield to the Fund at the time of entering into the
transaction. Each Fund may also purchase or sell securities on a forward
commitment basis; that is, make contracts to purchase or sell securities for a
fixed price at a future date beyond the customary three-day settlement period.
The purchase of securities on a when-issued or forward commitment basis
involves a risk of loss if the value of the security to be purchased declines
prior to the settlement date. Conversely, securities sold on a forward
commitment basis involve the risk that the value of the securities to be sold
may increase prior to the settlement date. Although a Fund would generally
purchase securities on a when-issued or forward commitment basis with the
intention of acquiring securities for its portfolio, a Fund may dispose of
when-issued securities or forward commitments prior to settlement if the
Investment Adviser deems it appropriate to do so. A Fund will segregate cash
or liquid assets in an amount sufficient to meet the purchase price until
three days prior to the settlement date. Alternatively, each Fund may enter
into offsetting contracts for the forward sale of other securities that it
owns.
ILLIQUID AND RESTRICTED SECURITIES
A Fund will not invest more than 15% of its net assets in illiquid
investments, which include securities (both foreign and domestic) that are not
readily marketable, certain SMBS, repurchase agreements maturing in more than
seven days, time deposits with a notice or demand period of more than seven
days, certain over-the-counter options and certain restricted securities,
unless it is determined, based upon a review of the trading markets for a
specific restricted security, that such restricted security is eligible for
resale under Rule 144A under the Securities Act of 1933 and, therefore, is
liquid. The Trustees have adopted guidelines under which the Investment
Adviser determines and monitors the liquidity of portfolio securities, subject
to the oversight of the Trustees. Investing in restricted securities eligible
for resale pursuant to Rule 144A may decrease the liquidity of a Fund's
portfolio to the extent that qualified institutional buyers become for a time
uninterested in purchasing these restricted securities. The purchase price and
subsequent valuation of restricted and illiquid securities normally reflect a
discount, which may be significant, from the market price of comparable
securities for which a liquid market exists.
30
<PAGE>
REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements with dealers in U.S.
Government securities and member banks of the Federal Reserve System which
furnish collateral at least equal in value or market price to the amount of
their repurchase obligation. The Balanced Fund may also enter into repurchase
agreements involving certain foreign government securities. If the other party
or "seller" defaults, a Fund might suffer a loss to the extent that the
proceeds from the sale of the underlying securities and other collateral held
by the Fund in connection with the related repurchase agreement are less than
the repurchase price. In addition, in the event of bankruptcy of the seller or
failure of the seller to repurchase the securities as agreed, a Fund could
suffer losses, including loss of interest on or principal of the security and
costs associated with delay and enforcement of the repurchase agreement. The
Trustees have reviewed and approved certain counterparties whom they believe
to be creditworthy and have authorized the Funds to enter into repurchase
agreements with such counterparties. In addition, each Fund, together with
other registered investment companies having management agreements with an
Investment Adviser or its affiliates, may transfer uninvested cash balances
into a single joint account, the daily aggregate balance of which will be
invested in one or more repurchase agreements.
LENDING OF PORTFOLIO SECURITIES
Each Fund may also seek to increase its income by lending portfolio
securities. Under present regulatory policies, such loans may be made to
institutions, such as certain broker-dealers, and are required to be secured
continuously by collateral in cash, cash equivalents, or U.S. Government
securities maintained on a current basis in an amount at least equal to the
market value of the securities loaned. Cash collateral may be invested in cash
equivalents. If the Investment Adviser determines to make securities loans,
the value of the securities loaned may not exceed 33 1/3% of the value of the
total assets of a Fund (including the loan collateral). A Fund may experience
a loss or delay in the recovery of its securities if the institution with
which it has engaged in a portfolio loan transaction breaches its agreement
with the Fund.
MORTGAGE DOLLAR ROLLS
The Balanced Fund may enter into mortgage "dollar rolls" in which the Fund
sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase substantially similar (same
type, coupon and maturity) but not identical securities on a specified future
date. During the roll period, the Fund loses the right to receive principal
and interest paid on the securities sold. However, the Fund would benefit to
the extent of any difference between the price received for the securities
sold and the lower forward price for the future purchase or fee income plus
the interest earned on the cash proceeds of the securities sold until the
settlement date for the forward purchase. Unless such benefits exceed the
income, capital appreciation and gain or loss due to mortgage prepayments that
would have been realized on the securities sold as part of the mortgage dollar
roll, the use of this technique will diminish the investment performance of
the Fund. The Fund will segregate cash or liquid assets in an amount equal to
the forward purchase price until the settlement date. Successful use of
mortgage dollar rolls depends upon the Investment Adviser's ability to predict
correctly interest rates and mortgage prepayments. There is no assurance that
mortgage dollar rolls can be successfully employed. For financial reporting
and tax purposes, the Fund treats mortgage dollar rolls as two separate
transactions: one involving the purchase of a security and a separate
transaction involving a sale. The Fund does not currently intend to enter into
mortgage dollar rolls that are accounted for as a financing.
SHORT SALES AGAINST-THE-BOX
Each Fund (other than the CORE Funds) may make short sales of securities or
maintain a short position, provided that at all times when a short position is
open the Fund owns an equal amount of such securities or
31
<PAGE>
securities convertible into or exchangeable for, without payment of any
further consideration, an equal amount of the securities of the same issuer as
the securities sold short (a short sale against-the-box). Not more than 25% of
a Fund's net assets (determined at the time of the short sale) may be subject
to such short sales. As a result of recent tax legislation, short sales may
not generally be used to defer the recognition of gain for tax purposes with
respect to appreciated securities in a Fund's portfolio.
TEMPORARY INVESTMENTS
Each Fund may, for temporary defensive purposes, invest 100% of its total
assets (except that the CORE Funds may only hold up to 35% of their respective
total assets) in U.S. Government securities, repurchase agreements
collateralized by U.S. Government securities, commercial paper rated at least
A-2 by Standard & Poor's or P-2 by Moody's, certificates of deposit, bankers'
acceptances, repurchase agreements, non-convertible preferred stocks and non-
convertible corporate bonds with a remaining maturity of less than one year.
When a Fund's assets are invested in such instruments, the Fund may not be
achieving its investment objective.
MISCELLANEOUS TECHNIQUES
In addition to the techniques and investments described above, each Fund
may, with respect to no more than 5% of its net assets, engage in the
following techniques and investments: (i) warrants and stock purchase rights;
(ii) currency swaps (Balanced Fund only); (iii) credit swaps, mortgage swaps,
index swaps and interest rate swaps, caps, floors and collars (Balanced Fund
only); (iv) yield curve options and inverse floating rate securities (Balanced
Fund only); (v) other investment companies including World Equity Benchmark
Shares; (vi) unseasoned companies; (vii) municipal securities (Balanced Fund
only); (viii) loan participations (Balanced Fund only); (ix) custodial
receipts; and (x) reverse repurchase agreements for investment purposes
(Balanced Fund only).
In addition, each Fund may borrow up to 33 1/3% of its total assets from
banks for temporary or emergency purposes. A Fund may not make additional
investments if borrowings (excluding covered mortgage dollar rolls) exceed 5%
of its total assets. For more information see the Additional Statement.
RISK FACTORS
Risks of Investing in Equity Securities. In general, the Funds are subject
to the risks associated with investments in common stocks and other equity
securities. Stock values fluctuate in response to the activities of individual
companies and in response to general market and economic conditions and,
accordingly, the value of the stocks that a Fund holds may decline over short
or extended periods. The U.S. stock markets tend to be cyclical, with periods
when stock prices generally rise and periods when prices generally decline. As
of the date of this Prospectus, domestic stock markets were trading at or
close to record high levels and there can be no guarantee that such levels
will continue.
RISKS OF INVESTING IN SMALL CAPITALIZATION COMPANIES. Investing in the
securities of such companies involves greater risk and the possibility of
greater portfolio price volatility. Historically, small market capitalization
stocks and stocks of recently organized companies have been more volatile in
price than the larger market capitalization stocks included in the S&P 500
Index. Among the reasons for the greater price volatility of
32
<PAGE>
these small company and unseasoned stocks are the less certain growth
prospects of smaller firms and the lower degree of liquidity in the markets
for such stocks.
SPECIAL RISKS OF INVESTMENTS IN EMERGING MARKETS. Investing in the
securities of issuers in Emerging Countries involves risks in addition to
those discussed under "Description of Securities-- Foreign Investments." The
Growth and Income, Mid Cap Equity and Small Cap Value Funds may each invest up
to 25%, the Balanced Fund may invest up to 20% and the Capital Growth Fund may
invest up to 10% of their respective total assets in securities of issuers in
Emerging Countries. Emerging Countries are generally located in the Asia-
Pacific region, Eastern Europe, Latin and South America and Africa.
Foreign investment in the securities markets of certain Emerging Countries
is restricted or controlled to varying degrees which may limit investment in
such countries or increase the administrative costs of such investments.
Certain countries may restrict or prohibit investment opportunities in issuers
or industries deemed important to national interests. Such restrictions may
affect the market price, liquidity and rights of securities that may be
purchased by a Fund. The repatriation of both investment income and capital
from certain Emerging Countries is subject to restrictions such as the need
for governmental consents. Many Emerging Countries may be subject to a greater
degree of economic, political and social instability than is the case in
Western Europe, the United States, Canada, Australia, New Zealand and Japan.
Many Emerging Countries do not have fully democratic governments. For example,
governments of some Emerging Countries are authoritarian in nature or have
been installed or removed as a result of military coups, while governments in
other Emerging Countries have periodically used force to suppress civil
dissent. Many Emerging Countries have experienced currency devaluations and
substantial and, in some cases, extremely high rates of inflation, which have
a negative effect on the economies and securities markets of such Emerging
Countries. Settlement procedures in Emerging Countries are frequently less
developed and reliable than those in the United States and may involve a
Fund's delivery of securities before receipt of payment for their sale. In
addition, significant delays are common in certain markets in registering the
transfer of securities. Settlement or registration problems may make it more
difficult for a Fund to value its portfolio securities and could cause the
Fund to miss attractive investment opportunities, to have a portion of its
assets uninvested or to incur losses due to the failure of a counterparty to
pay for securities the Fund has delivered or the Fund's inability to complete
its contractual obligations.
RISKS OF INVESTING IN FIXED-INCOME SECURITIES. When interest rates decline,
the market value of fixed-income securities tends to increase. Conversely,
when interest rates increase, the market value of fixed income securities
tends to decline. Volatility of a security's market value will differ
depending upon the security's duration, the issuer and the type of instrument.
Investments in fixed-income securities are subject to the risk that the issuer
could default on its obligations and a Fund could sustain losses on such
investments. A default could impact both interest and principal payments.
RISKS OF DERIVATIVE TRANSACTIONS. A Fund's transactions, if any, in options,
futures, options on futures, swaps, structured securities and currency
transactions involve certain risks, including a possible lack of correlation
between changes in the value of hedging instruments and the portfolio assets
(if any) being hedged, the potential illiquidity of the markets for derivative
instruments, the risks arising from margin requirements and related leverage
factors associated with such transactions. The use of these management
techniques to seek to increase total return may be regarded as a speculative
practice and involves the risk of loss if the Investment Adviser is incorrect
in its expectation of fluctuations in securities prices, interest rates or
currency prices. A Fund's use of certain derivative transactions may be
limited by the requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), for qualification as a regulated investment company.
33
<PAGE>
INVESTMENT RESTRICTIONS
Each Fund is subject to certain investment restrictions that are described
in detail under "Investment Restrictions" in the Additional Statement.
Fundamental investment restrictions of a Fund cannot be changed without
approval of a majority of the outstanding Shares of that Fund as defined in
the Additional Statement. Each Fund's investment objectives and all policies
not specifically designated as fundamental are non-fundamental and may be
changed without shareholder approval. If there is a change in a Fund's
investment objectives, shareholders should consider whether that Fund remains
an appropriate investment in light of their then current financial positions
and needs.
PORTFOLIO TURNOVER
A high rate of portfolio turnover (100% or more) involves correspondingly
greater expenses which must be borne by a Fund and its shareholders. See
"Financial Highlights" for a statement of each Fund's historical portfolio
turnover rate (other than CORE Large Cap Value Fund). It is anticipated that
the annual portfolio turnover rate of the CORE Large Cap Value Fund will
generally not exceed 75%. The portfolio turnover rate is calculated by
dividing the lesser of the dollar amount of sales or purchases of portfolio
securities by the average monthly value of a Fund's portfolio securities,
excluding securities having a maturity at the date of purchase of one year or
less. The Investment Adviser will not consider the portfolio turnover rate a
limiting factor in making investment decisions for a Fund consistent with the
Fund's investment objectives and portfolio management policies.
MANAGEMENT
TRUSTEES AND OFFICERS
The Trustees are responsible for deciding matters of general policy and
reviewing the actions of the Investment Adviser, Distributor and transfer
agent. The officers of the Trust conduct and supervise the Funds' daily
business operations. The Additional Statement contains information as to the
identity of, and other information about, the Trustees and officers of the
Trust.
INVESTMENT ADVISERS
INVESTMENT ADVISERS. Goldman Sachs Asset Management, One New York Plaza, New
York, New York 10004, a separate operating division of Goldman Sachs, serves
as investment adviser to the Balanced, Growth and Income, CORE Large Cap
Value, CORE Large Cap Growth, CORE Small Cap Equity, Mid Cap Equity and Small
Cap Value Funds. Goldman Sachs registered as an investment adviser in 1981.
Goldman Sachs Funds Management, L.P., One New York Plaza, New York, New York
10004, a Delaware limited partnership which is an affiliate of Goldman Sachs,
serves as the investment adviser to the CORE U.S. Equity and Capital Growth
Funds. Goldman Sachs Funds Management, L.P. registered as an investment
adviser in 1990. As of August 21,
34
<PAGE>
1998, GSAM and GSFM together with their affiliates, acted as investment
adviser or distributor for assets in excess of $168 billion.
Under a Management Agreement with each Fund, the applicable Investment
Adviser, subject to the general supervision of the Trustees, provides day-to-
day advice as to the Fund's portfolio transactions. Goldman Sachs has agreed
to permit the Funds to use the name "Goldman Sachs" or a derivative thereof as
part of each Fund's name for as long as a Fund's Management Agreement is in
effect.
In performing its investment advisory services, each Investment Adviser,
while remaining ultimately responsible for the management of the Funds, is
able to draw upon the research and expertise of its asset management
affiliates for portfolio decisions and management with respect to certain
portfolio securities. In addition, the Investment Adviser will have access to
the research of, and certain proprietary technical models developed by,
Goldman Sachs and may apply quantitative and qualitative analysis in
determining the appropriate allocations among the categories of issuers and
types of securities.
Under the Management Agreement, the Investment Adviser also: (i) supervises
all non-advisory operations of each Fund that it advises; (ii) provides
personnel to perform such executive, administrative and clerical services as
are reasonably necessary to provide effective administration of each Fund;
(iii) arranges for at each Fund's expense (a) the preparation of all required
tax returns, (b) the preparation and submission of reports to existing
shareholders, (c) the periodic updating of prospectuses and Additional
Statements and (d) the preparation of reports to be filed with the SEC and
other regulatory authorities; (iv) maintains each Fund's records; and (v)
provides office space and all necessary office equipment and services.
FUND MANAGERS
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
------------------------- ------------------- ----------- ----------------------------
<C> <C> <C> <S>
George D. Adler Senior Since Mr. Adler joined the
Vice President Portfolio Manager-- 1997 Investment Adviser in
Capital Growth 1997. From 1990 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. From 1988 to 1990
he was a director of
portfolio management at
Banc One in Ohio.
- --------------------------------------------------------------------------------------------
Eileen A. Aptman Senior Portfolio Since Ms. Aptman joined the
Vice President Manager-- 1996 Investment Adviser in
Mid Cap Equity 1997 1993. From 1990 to 1993,
Small Cap Value she worked at Delphi
Management as an equity
analyst, focusing her
research efforts on
value stocks.
- --------------------------------------------------------------------------------------------
Jonathan A. Beinner Senior Portfolio Since Mr. Beinner joined the
Managing Director and Manager--Balanced 1994 Investment Adviser in
Co-Head U.S. Fixed (Fixed Income) 1990. From 1988 to 1990,
Income he worked as a portfolio
manager at Franklin
Savings Association in
the trading and
arbitrage group.
- --------------------------------------------------------------------------------------------
Melissa Brown Senior Portfolio Since Ms. Brown joined the
Vice President Manager-- 1998 Investment Adviser in
CORE Large Cap 1998 1998. From 1984 to 1998,
Value CORE U.S. 1998 she was the director of
Equity 1998 Quantitative Equity
CORE Large Cap Research and served on
Growth the Investment Policy
CORE Small Cap Committee at Prudential
Equity Securities.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
------------------- -------------------------- ----------- ----------------------------
<C> <C> <C> <S>
Kent A. Clark Senior Portfolio Manager-- Since Mr. Clark joined the
Vice President CORE Large Cap Value CORE 1998 Investment Adviser in
U.S. Equity 1996 1992.
CORE Large Cap Growth 1997
CORE Small Cap Equity 1997
- -------------------------------------------------------------------------------------------------
Robert G. Collins Senior Portfolio Manager-- Since Mr. Collins joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1991 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. His past
experiences include work
as a special situations
analyst with Raymond
James & Associates for
five years.
- -------------------------------------------------------------------------------------------------
Herbert E. Ehlers Senior Portfolio Manager-- Since Mr. Ehlers joined the
Managing Director Capital Growth 1997 Investment Adviser in
1997. From 1994 to 1997,
he was the Chief
Investment Officer and
Chairman of Liberty
Investment Management,
Inc. He was a portfolio
manager and president at
Liberty's predecessor
firm, Eagle Asset
Management, from 1984 to
1994.
- -------------------------------------------------------------------------------------------------
Gregory H. Ekizian Senior Portfolio Manager-- Since Mr. Ekizian joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1990 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. and its predecessor
firm, Eagle Asset
Management.
- -------------------------------------------------------------------------------------------------
Paul D. Farrell Senior Portfolio Manager-- Since Mr. Farrell joined the
Vice President Mid Cap Equity 1998 Investment Adviser in
Small Cap Value 1992 1991. In 1998, he became
responsible for managing
the Investment Adviser's
Value team. During 1991,
he served as a managing
director at Plaza
Investment Managers, the
investment subsidiary of
GEICO Corp., a major
insurance company. From
1986 to 1991, he was
employed by Goldman
Sachs as a vice
president in the
investment research
department and was
responsible for the
formation of the firm's
Emerging Growth Research
Group.
- -------------------------------------------------------------------------------------------------
Greg Gigliotti Senior Portfolio Manager-- Since Mr. Gigliotti joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1997. From 1996 to 1997
Mid Cap Equity 1998 he was a Vice President
and senior analyst at
Franklin Mutual
Advisors, Inc., the
asset management
division of Franklin
Resources, Inc. From
1989 to 1996 he was a
Vice President and
senior analyst at Heine
Securities Corporation
which was purchased by
Franklin Resources, Inc.
- -------------------------------------------------------------------------------------------------
Robert C. Jones Senior Portfolio Manager-- Since Mr. Jones joined the
Managing Director CORE Large Cap Value CORE 1998 Investment Adviser in
U.S. Equity 1991 1989. From 1987 to 1989,
CORE Large Cap Growth 1997 he was the senior
CORE Small Cap Equity 1997 quantitative analyst in
the Goldman Sachs
Investment Research
Department and the
author of the monthly
Stock Selection
publication.
- -------------------------------------------------------------------------------------------------
Richard C. Lucy Senior Portfolio Manager-- Since Mr. Lucy joined the
Vice President and Balanced (Fixed Income) 1994 Investment Adviser in
Co-Head U.S. 1992. From 1983 to 1992,
Fixed Income he managed fixed income
assets at Brown Brothers
Harriman & Co.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
---------------------- -------------------------- ----------- ----------------------------
<C> <C> <C> <S>
Matthew B. McLennan Senior Portfolio Manager-- Since Mr. McLennan joined the
Vice President Mid Cap Equity 1998 Investment Adviser in
Small Cap Value 1996 1995. From 1994 to 1995,
he worked in the
Investment Banking
Division of Goldman
Sachs in Australia. From
1991 to 1994, Mr.
McLennan worked at
Queensland Investment
Corporation in
Australia.
- ----------------------------------------------------------------------------------------------------
Victor H. Pinter Senior Portfolio Manager-- Since Mr. Pinter joined the
Vice President CORE Large Cap Value CORE 1998 Investment Adviser in
U.S. Equity 1996 1990. From 1985 to 1990,
CORE Large Cap Growth 1997 he was a project manager
CORE Small Cap Equity 1997 in the Information
Technology Division of
the Investment Adviser.
- ----------------------------------------------------------------------------------------------------
Thomas S. Price Senior Portfolio Manager-- Since Mr. Price joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1997. From 1996 to 1997
Mid Cap Equity 1998 he was a Vice President
and senior analyst at
Franklin Mutual
Advisors, Inc., the
asset management
division of Franklin
Resources, Inc. From
1993 to 1996 he was a
Vice President and
senior analyst at Heine
Securities Corporation
which was purchased by
Franklin Resources, Inc.
- ----------------------------------------------------------------------------------------------------
David G. Shell Senior Portfolio Manager-- Since Mr. Shell joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1987 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. and its predecessor
firm, Eagle Asset
Management.
- ----------------------------------------------------------------------------------------------------
Ernest C. Segundo, Jr. Senior Portfolio Manager-- Since Mr. Segundo joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1992 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. From 1990 to 1992,
he was an equity
research analyst with
Fidelity Management &
Research Company.
- ----------------------------------------------------------------------------------------------------
Lawrence S. Sibley Senior Portfolio Manager-- Since Mr. Sibley joined the
Vice President Growth and Income 1997 Investment Adviser in
Balanced (Equity) 1997 1997. From 1994 to 1997,
Mid Cap Equity 1997 he headed Institutional
Equity Sales at J.P.
Morgan Securities and
from 1987 to 1994, he
was a principal of
Sanford C. Bernstein &
Co. in its Institutional
Sales Department.
- ----------------------------------------------------------------------------------------------------
Karma Wilson Senior Portfolio Manager-- Since Ms. Wilson joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1994. Prior to 1994, she
Mid Cap Equity 1998 was an investment
analyst with Bankers
Trust Australia Ltd.
Before 1992 she was
employed at Arthur
Andersen LLP.
</TABLE>
It is the responsibility of the Investment Adviser to make the investment
decisions for a Fund and to place the purchase and sale orders for the Fund's
portfolio transactions in U.S. and foreign markets. Such orders may be
directed to any broker including, to the extent and in the manner permitted by
applicable law, Goldman Sachs or its affiliates. In effecting purchases and
sales of portfolio securities for the Funds, the Investment Adviser will seek
the best price and execution of a Fund's orders. In doing so, where two or
more brokers or dealers offer comparable prices and execution for a particular
trade, consideration may be given to whether the broker or dealer provides
investment research or brokerage services or sells Shares of any Goldman Sachs
Fund. See the Additional Statement for a further description of the Investment
Adviser's brokerage allocation practices.
37
<PAGE>
As compensation for its services rendered and assumption of certain expenses
pursuant to separate Management Agreements, GSAM and GSFM are entitled to the
following fees, computed daily and payable monthly at the annual rates listed
below:
<TABLE>
<CAPTION>
FOR THE FISCAL
CONTRACTUAL YEAR OR PERIOD ENDED
RATE* JANUARY 31, 1998*
----------- --------------------
<S> <C> <C>
GSAM
----
Balanced.................................. 0.65% 0.65%
Growth and Income......................... 0.70% 0.70%
CORE Large Cap Value...................... 0.60% N/A
CORE Large Cap Growth..................... 0.75% 0.60%
CORE Small Cap Equity..................... 0.85% 0.75%
Mid Cap Equity............................ 0.75% 0.75%
Small Cap Value........................... 1.00% 1.00%
GSFM
----
CORE U.S. Equity.......................... 0.75% 0.59%
Capital Growth............................ 1.00% 1.00%
</TABLE>
- ---------------------
*All numbers are annualized. The difference, if any, between the stated fees
and the actual fees paid by the Funds reflects that the applicable Investment
Adviser did not charge the full amount of the fees to which it would have been
entitled. Effective September 1, 1998, the management fee for the CORE U.S.
Equity and CORE Small Cap Equity Funds will equal 0.70% and 0.85%,
respectively. As of January 31, 1998, the CORE Large Cap Value Fund had not
commenced operations. The Investment Adviser may discontinue or modify any
limitations in the future at its discretion.
The Investment Adviser has voluntarily agreed to reduce or limit certain
"Other Expenses" of the Funds (excluding management fees, service fees,
transfer agency fees, taxes, interest and brokerage fees and litigation,
indemnification and other extraordinary expenses) to the extent such expenses
exceed 0.01%, 0.05%, 0.00%, 0.00%, 0.00%, 0.04%, 0.00%, 0.10% and 0.06% per
annum of the average daily net assets of the Balanced, Growth and Income, CORE
Large Cap Value, CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap
Equity, Capital Growth, Mid Cap Equity and Small Cap Value Funds,
respectively. Such reductions or limits, if any, may be discontinued or
modified by the applicable Investment Adviser in its discretion at any time.
ACTIVITIES OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER ACCOUNTS MANAGED BY
GOLDMAN SACHS. The involvement of the Investment Adviser, Goldman Sachs and
their affiliates in the management of, or their interest in, other accounts
and other activities of Goldman Sachs may present conflicts of interest with
respect to a Fund or limit a Fund's investment activities. Goldman Sachs and
its affiliates engage in proprietary trading and advise accounts and funds
which have investment objectives similar to those of the Funds and/or which
engage in and compete for transactions in the same type of securities,
currencies and instruments as the Funds. Goldman Sachs and its affiliates will
not have any obligation to make available any information regarding their
proprietary activities or strategies, or the activities or strategies used for
other accounts managed by them, for the benefit of the management of the
Funds. The results of a Fund's investment activities, therefore, may differ
from those of Goldman Sachs and its affiliates and it is possible that a Fund
could sustain losses during periods in which Goldman Sachs and its affiliates
and other accounts achieve significant profits on their trading for
proprietary or other accounts. In addition, the Funds may, from time to time,
enter into transactions in which other clients of
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Goldman Sachs have an adverse interest. From time to time, a Fund's activities
may be limited because of regulatory restrictions applicable to Goldman Sachs
and its affiliates, and/or their internal policies designed to comply with
such restrictions. See "Management--Activities of Goldman Sachs and its
Affiliates and Other Accounts Managed by Goldman Sachs" in the Additional
Statement for further information.
DISTRIBUTOR AND TRANSFER AGENT
Goldman Sachs, 85 Broad Street, New York, New York 10004, serves as the
exclusive distributor (the "Distributor") of each Fund's Shares. Goldman
Sachs, 4900 Sears Tower, Chicago, Illinois 60606, also serves as each Fund's
transfer agent (the "Transfer Agent") and as such performs various shareholder
servicing functions. Shareholders with inquiries regarding a Fund should
contact Goldman Sachs (as Transfer Agent) at the address or the telephone
number set forth on the back cover page of this Prospectus. Goldman Sachs is
entitled to receive a transfer agency fee with respect to each Fund's
Institutional and Service Shares equal, on an annual basis, to 0.04% of
average daily net assets.
From time to time, Goldman Sachs or any of its affiliates may purchase and
hold Shares of the Funds. Goldman Sachs reserves the right to redeem at any
time some or all of the Shares acquired for its own account.
YEAR 2000
Many computer systems were designed using only two digits to signify the
year (for example, "98" for "1998"). On January 1, 2000, if these computer
systems are not corrected, they may incorrectly interpret "00" as the year
"1900" rather than the year "2000," leading to computer shutdowns or errors
(commonly known as the "Year 2000 Problem"). To the extent these systems
conduct forward-looking calculations, these computer problems may occur prior
to January 1, 2000. Like other investment companies and financial and business
organizations, the Funds could be adversely affected in their ability to
process securities trades, price securities, provide shareholder account
services and otherwise conduct normal business operations if the computer
systems used by the Investment Adviser or other Fund service providers do not
adequately address this problem in a timely manner. The Investment Adviser has
established a dedicated group to analyze these issues and to implement the
systems modifications necessary to prepare for the Year 2000 Problem.
Currently, the Investment Adviser does not anticipate that the transition to
the 21st Century will have any material impact on its ability to continue to
service the Funds at current levels. In addition, the Investment Adviser has
sought assurances from the Funds' other service providers that they are taking
the steps necessary so that they do not experience Year 2000 Problems, and the
Investment Adviser will continue to monitor the situation. At this time,
however, no assurance can be given that the actions taken by the Investment
Adviser and the Funds' other service providers will be sufficient to avoid any
adverse effect on the Funds due to the Year 2000 Problem.
EXPENSES
The Funds are responsible for the payment of their expenses. The expenses
include, without limitation; fees payable to the Investment Adviser; custodial
and transfer agency fees; service fees paid to Service Organizations;
brokerage fees and commissions; filing fees for the registration or
qualification of the Funds' Shares under federal or state securities laws,
organizational expenses; fees and expenses incurred in connection with
membership in investment company organizations; taxes; interest; costs of
liability insurance, fidelity bonds or indemnification; any costs, expenses or
losses arising out of any liability of, or claim for damages or other relief
39
<PAGE>
asserted against, the Funds for violation of any law; legal and auditing fees
and expenses (including the cost of legal and certain accounting services
rendered by employees of the Investment Adviser and its affiliates with
respect to the Funds); expenses of preparing and setting in type prospectuses,
Additional Statements, proxy material, financial reports and notices and the
printing and distributing of the same to shareholders and regulatory
authorities; compensation and expenses of the Trust's "non-interested"
Trustees; and extraordinary organizational expenses, if any, incurred by the
Trust.
NET ASSET VALUE
The NAV per Share of each Class of a Fund is calculated by the Fund's
custodian as of the close of regular trading on the New York Stock Exchange
(which is normally, but not always, 3:00 p.m. Chicago time, 4:00 p.m. New York
time), on each Business Day (as such term is defined under "Additional
Information"). NAV per Share of each Class is calculated by determining the
net assets attributed to each Class and dividing by the number of outstanding
Shares of that Class. Portfolio securities are valued based on market
quotations or, if accurate quotations are not readily available, at fair value
as determined in good faith under procedures established by the Trustees.
PERFORMANCE INFORMATION
From time to time each Fund may publish average annual total return and the
Balanced, CORE Large Cap Value and Growth and Income Funds may publish their
yield and distribution rates in advertisements and communications to
shareholders or prospective investors. Average annual total return is
determined by computing the average annual percentage change in value of
$1,000 invested at the maximum public offering price for specified periods
ending with the most recent calendar quarter, assuming reinvestment of all
dividends and distributions at NAV. The total return calculation assumes a
complete redemption of the investment at the end of the relevant period. Each
Fund may also from time to time advertise total return on a cumulative,
average, year-by-year or other basis for various specified periods by means of
quotations, charts, graphs or schedules. In addition, each Fund may furnish
total return calculations based on investments at various sales charge levels
or at NAV. Any performance information which is based on the NAV per Share
would be reduced if any applicable sales charge were taken into account. In
addition to the above, each Fund may from time to time advertise its
performance relative to certain averages, performance rankings, indices, other
information prepared by recognized mutual fund statistical services and
investments for which reliable performance information is available.
The Balanced, CORE Large Cap Value and Growth and Income Funds compute their
yield by dividing net investment income earned during a recent thirty-day
period by the product of the average daily number of Shares outstanding and
entitled to receive dividends during the period and the maximum offering price
per Share on the last day of the relevant period. The results are compounded
on a bond equivalent (semi-annual) basis and then annualized. Net investment
income per Share is equal to the dividends and interest earned during the
period, reduced by accrued expenses for the period. The calculation of net
investment income for these purposes may differ from the net investment income
determined for accounting purposes. The Balanced, CORE Large Cap Value and
Growth and Income Funds' quotations of distribution rate are calculated by
annualizing the most
40
<PAGE>
recent distribution of net investment income for a monthly, quarterly or other
relevant period and dividing this amount by the NAV per Share on the last day
of the period for which the distribution rate is being calculated.
Each Fund's total return, yield and distribution rate will be calculated
separately for each Class of Shares in existence. Because each Class of Shares
may be subject to different expenses, the total return, yield and distribution
rate calculations with respect to each Class of Shares for the same period
will differ. See "Shares of the Trust."
The Funds' performance quotations do not reflect any fees charged by a
Service Organization to its customer accounts in connection with investments
in the Funds. The investment results of a Fund will fluctuate over time and
any presentation of investment results for any prior period should not be
considered a representation of what an investment may earn or what the Fund's
performance may be in any future period. In addition to information provided
in shareholder reports, the Funds may, in their discretion, from time to time
make a list of their holdings available to investors upon request.
SHARES OF THE TRUST
Goldman Sachs Trust was formed under the laws of the State of Delaware on
January 28, 1997. On April 30, 1997, Goldman Sachs Equity Portfolios, Inc., a
Maryland corporation was reorganized into the Trust. The Trustees have
authority under the Trust's Declaration of Trust to create and classify Shares
of beneficial interests in separate series, without further action by
shareholders. Additional series may be added in the future. The Trustees also
have authority to classify and reclassify any series or portfolio of Shares
into one or more Classes. Information about the Trust's other series and
Classes is contained in separate prospectuses.
When issued, Shares are fully paid and non-assessable. In the event of
liquidation, shareholders of each class are entitled to share pro rata in the
net assets of the applicable Fund available for distribution to the
shareholders of such Class. All Shares are freely transferable and have no
preemptive, subscription or conversion rights. Shareholders are entitled to
one vote per Share, provided that, at the option of the Trustees, shareholders
will be entitled to a number of votes based upon the NAVs represented by their
Shares.
[As of April 3, 1998, State Street Bank and Trust Company as Trustee for
Goldman Sachs Profit Sharing Master Trust, Attention: Louis Pereira, P.O. Box
1992, Boston, MA 02105-1992 was recordholder of 59.9% of Mid Cap Equity Fund's
outstanding Shares.]
The Trust does not intend to hold annual meetings of shareholders. However,
recordholders may, under certain circumstances, as permitted by the Act,
communicate with other shareholders in connection with requiring a special
meeting of shareholders. The Trustees will call a special meeting of
shareholders for the purpose of electing Trustees if, at any time, less than a
majority of Trustees holding office at the time were elected by shareholders.
In the interest of economy and convenience, the Trust does not issue
certificates representing the Funds' Shares. Instead, the Transfer Agent
maintains a record of each shareholder's ownership. Each shareholder receives
confirmation of purchase and redemption orders from the Transfer Agent. Fund
Shares and any dividends and distributions paid by the Fund are reflected in
account statements from the Transfer Agent.
41
<PAGE>
TAXATION
FEDERAL TAXES
Each Fund is treated as a separate entity for tax purposes. The CORE Large
Cap Value Fund intends to elect and each other Fund has elected to be treated
as a regulated investment company, and each Fund intends to continue to
qualify for such treatment for each taxable year under Subchapter M of the
Code. To qualify as such, a Fund must satisfy certain requirements relating to
the sources of its income, diversification of its assets and distribution of
its income to shareholders. As a regulated investment company, a Fund will not
be subject to federal income or excise tax on any net investment income and
net realized capital gains that are distributed to its shareholders in
accordance with certain timing requirements of the Code.
Dividends paid by a Fund from net investment income, certain net realized
foreign exchange gains, the excess of net short-term capital gain over net
long-term capital loss and original issue discount or market discount income
will be taxable to its shareholders as ordinary income. Distributions out of
the net capital gain (the excess of net long-term capital gain over net short-
term capital loss), if any, of a Fund will be taxed to shareholders as long-
term capital gains, regardless of the length of time a shareholder has held
his or her Shares or whether such gain was reflected in the price paid for the
Shares. These tax consequences will apply whether distributions are received
in cash or reinvested in Shares. A Fund's dividends that are paid to its
corporate shareholders and are attributable to qualifying dividends such Fund
receives from U.S. domestic corporations may be eligible, in the hands of such
corporate shareholders, for the corporate dividends-received deduction,
subject to certain holding period requirements and debt financing limitations
under the Code. Certain distributions paid by a Fund in January of a given
year may be taxable to shareholders as if received the prior December 31.
Shareholders will be informed annually about the amount and character of
distributions received from the Funds for federal income tax purposes.
Investors should consider the tax implications of buying Shares immediately
prior to a distribution. Investors who purchase Shares shortly before the
record date for a distribution will pay a per Share price that includes the
value of the anticipated distribution and will be taxed on the distribution
even though the distribution represents a return of a portion of the purchase
price.
Redemptions and exchanges of Shares are taxable events.
Individuals and certain other classes of shareholders may be subject to 31%
backup withholding of federal income tax on distributions, redemptions and
exchanges if they fail to furnish their correct taxpayer identification number
and certain certifications required by the Internal Revenue Service or if they
are otherwise subject to backup withholding. Individuals, corporations and
other shareholders that are not U.S. persons under the Code are subject to
different tax rules and may be subject to nonresident alien withholding at the
rate of 30% (or a lower rate provided by an applicable tax treaty, if any) on
amounts treated as ordinary dividends from the Funds.
Each Fund may be subject to foreign withholding or other foreign taxes on
income or gain from certain foreign securities. In general, the Funds do not
anticipate that they will be eligible to pass any foreign tax credits through
to their shareholders; however, the Funds may deduct these taxes in computing
their taxable income, if any.
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<PAGE>
OTHER TAXES
In addition to federal taxes, a shareholder may be subject to state, local
or foreign taxes on payments received from the Funds. A state income (and
possibly local income and/or intangible property) tax exemption may be
available to the extent (if any) a Fund's distributions are derived from
interest on (or, in the case of intangible property taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in
some states that certain thresholds for holdings of such obligations and/or
reporting requirements are satisfied. For a further discussion of certain tax
consequences of investing in Shares of the Funds, see "Taxation" in the
Additional Statement. Shareholders are urged to consult their own tax advisers
regarding specific questions as to federal, state and local taxes as well as
to any foreign taxes.
ADDITIONAL INFORMATION
As used in this Prospectus, the term "Business Day" means any day the New
York Stock Exchange is open for trading, which is Monday through Friday except
for holidays. The New York Stock Exchange is closed on the following holidays:
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day (observed), Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
43
<PAGE>
REPORTS TO SHAREHOLDERS
Recordholders of Institutional Shares of the Funds will receive an annual
report containing audited financial statements and a semi-annual report. To
eliminate unnecessary duplication, only one copy of such reports may be sent to
recordholders with the same mailing address. Recordholders who desire a
duplicate copy of such reports to be mailed to their residence should contact
Goldman Sachs at 800-621-2550. Each recordholder of Institutional Shares will
also be provided with a printed confirmation for each transaction in its
account and a quarterly account statement. A year-to-date statement for any
account will be provided upon request made to Goldman Sachs. The Funds do not
generally provide subaccounting services with respect to beneficial ownership
of Institutional Shares.
DIVIDENDS
Each dividend from net investment income and capital gain distributions, if
any, declared by a Fund on its outstanding Institutional Shares will, at the
election of each shareholder, be paid: (i) in cash; or (ii) in additional
Institutional Shares of such Fund. This election should initially be made on a
shareholder's Account Information Form and may be changed upon written notice
to Goldman Sachs at any time prior to the record date for a particular dividend
or distribution. If no election is made, all dividends from net investment
income and capital gain distributions will be reinvested in Institutional
Shares of the applicable Fund.
The election to reinvest dividends and distributions paid by a Fund in
additional Institutional Shares of the Fund will not affect the tax treatment
of such dividends and distributions, which will be treated as received by the
shareholder and then used to purchase Institutional Shares of a Fund.
Each Fund intends that all or substantially all its net investment income and
net capital gains, after reduction by available capital losses, including any
capital losses carried forward from prior years, will be declared as dividends
for each taxable year. The Balanced, CORE Large Cap Value and Growth and Income
Funds will pay dividends from net investment income quarterly. Each other Fund
will pay dividends from net investment income, and dividends from net realized
capital gains, reduced by available capital losses, at least annually. From
time to time, a portion of a Fund's dividends may constitute a return of
capital.
At the time of an investor's purchase of Shares of a Fund, a portion of the
NAV per Share may be represented by undistributed income of the Fund or
realized or unrealized appreciation of the Fund's portfolio securities.
Therefore, subsequent distributions on such Shares from such income or realized
appreciation may be taxable to the investor even if the NAV of the investor's
Shares is, as a result of the distributions, reduced below the cost of such
Shares and the distributions (or portions thereof) represent a return of a
portion of the purchase price.
PURCHASE OF INSTITUTIONAL SHARES
Institutional Shares may be purchased on any Business Day at the NAV per
Share next determined after receipt of an order. No sales load will be charged.
Currently, the NAV is determined as of the close of regular trading on the New
York Stock Exchange (which is normally, but not always, 3:00 p.m. Chicago time,
4:00 p.m. New York time), as described under "Net Asset Value." Purchases of
Institutional Shares of the Funds must be
44
<PAGE>
settled within three (3) Business Days of the receipt of a complete purchase
order. Payment of the proceeds of redemption of Shares purchased by check may
be delayed for a period of time as described under "Redemption of Institutional
Shares."
Prior to making an initial investment in a Fund, an investor must open an
account with a Fund by furnishing necessary information to the Fund or Goldman
Sachs. An Account Information Form, a copy of which is attached to this
Prospectus, should be used to open such an account. Subsequent purchases may be
made in the manner set forth below.
PURCHASE PROCEDURES
Purchases of Institutional Shares may be made by qualified investors by
placing an order with Goldman Sachs at 800-621-2550 and either wiring federal
funds to State Street Bank and Trust Company ("State Street") or initiating an
ACH transfer. Purchases may also be made by check (except that the Trust will
not accept a check drawn on a foreign bank or a third party check) or Federal
Reserve draft made payable to "Goldman Sachs Domestic Equity Funds--Name of
Fund and Class of Shares" and should be directed to "Goldman Sachs Domestic
Equity Funds--Name of Fund and Class of Shares," c/o National Financial Data
Services, Inc. ("NFDS"), P.O. Box 419711, Kansas City, MO 64141-6711.
MINIMUM INITIAL INVESTMENTS
Institutional Shares of the Fund are offered to: (a) banks, trust companies
or other types of depository institutions investing for their own account or on
behalf of their clients; (b) pension and profit sharing plans, pension funds
and other company-sponsored benefit plans; (c) any state, county, city or any
instrumentality, department, authority or agency thereof; (d) corporations and
other for-profit business organizations with assets of at least $100 million or
publicly traded securities outstanding; (e) "wrap" accounts for the benefit of
clients of broker-dealers, financial institutions or financial planners,
provided that they have entered into an agreement with GSAM specifying
aggregate minimums and certain operating policies and standards; and (f)
registered investment advisers investing for accounts for which they receive
asset-based fees. With respect to these investors, the minimum initial
investment is $1,000,000 in Institutional Shares of a Fund alone or in
combination with other assets under the management of GSAM and its affiliates.
The minimum initial investment in Institutional Shares for (a) individual
investors; (b) qualified non-profit organizations, charitable trusts,
foundations and endowments; and (c) accounts over which GSAM or its advisory
affiliates have investment discretion is $10,000,000.
The foregoing minimum investment requirements may be waived at the discretion
of the Trust's officers. In addition, the minimum investment requirement may be
waived for current and former officers, partners, directors or employees of
Goldman Sachs or any of its affiliates or for other investors at the discretion
of the Trust's officers. No minimum amount is required for subsequent
investments.
OTHER PURCHASE INFORMATION
The Trust may authorize certain institutions (including banks, trust
companies, brokers and investment advisers) that provide recordkeeping,
reporting and processing services to their customers to accept on the Trust's
45
<PAGE>
behalf purchase, redemption and exchange orders placed by or on behalf of such
customers and, if approved by the Trust, to designate other intermediaries to
accept such orders. In these cases, a Fund will be deemed to have received an
order in proper form by or on behalf of a customer when the order is accepted
by the authorized institution or intermediary on a Business Day, and the order
will be priced at a Fund's NAV per Share next determined after such acceptance.
The institution or intermediary will be responsible for transmitting accepted
orders to the Trust within the period agreed upon by them. A customer should
contact an institution to learn whether it is authorized to accept orders for
the Trust. Such institutions may receive payments from the Funds or Goldman
Sachs for the services provided by them with respect to the Funds'
Institutional Shares. These payments may be in addition to other servicing
and/or sub-transfer agency payments borne by the Funds and their Share Classes.
The Investment Adviser, Distributor, and/or their affiliates also pay
additional compensation, from time to time, out of their assets and not as an
additional charge to the Funds, to selected institutions (including banks,
trust companies, brokers and investment advisers) and other persons in
connection with the sale and/or servicing of Shares of the Funds and other
investment portfolios of the Trust (such as additional payments based on new
sales, amounts exceeding pre-established thresholds, or the length of time
clients' assets have remained in the Trust), and subject to applicable NASD
regulations, contribute to various non-cash and cash incentive arrangements to
promote the sale of Shares, as well as sponsor various educational programs,
sales contests and/or promotions in which participants may receive
reimbursement of expenses, entertainment and prizes such as travel awards,
merchandise, cash, investment research and educational information and related
support materials. This additional compensation may vary among institutions
depending upon such factors as the amounts their clients have invested (or may
invest) in particular portfolios of the Trust, the particular program involved,
or the amount of reimbursable expenses. Additional compensation based on sales
may, but is currently not expected to, exceed 0.50% (annualized) of the amount
invested. For further information, see the Additional Statement.
The Funds reserve the right to redeem the Institutional Shares of any
shareholder of record whose account balance is less than $50 as a result of
earlier redemptions. Such redemptions will not be implemented if the value of a
recordholder's account falls below the minimum account balance solely as a
result of market conditions. The Trust will give 60 days' prior written notice
to recordholders whose Institutional Shares are being redeemed to allow them to
purchase sufficient additional Institutional Shares of a Fund to avoid such
redemption.
The Funds and Goldman Sachs each reserve the right to reject any specific
purchase order (including exchanges) or to restrict purchases or exchanges by a
particular purchaser (or group of related purchasers). This may occur, for
example, when a purchaser or group of purchasers' pattern of frequent
purchases, sales or exchanges of Institutional Shares of a Fund is evident, or
if purchases, sales or exchanges are, or a subsequent abrupt redemption might
be, of a size that would disrupt management of a Fund.
In the sole discretion of Goldman Sachs, a Fund may accept securities instead
of cash for the purchase of Shares of the Fund. Such purchases will be
permitted only if the Investment Adviser determines that any securities
acquired in this manner are consistent with the Fund's investment objectives,
restrictions and policies and are desirable investments for the Fund.
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EXCHANGE PRIVILEGE
Institutional Shares of the Fund may be exchanged for: (i) Institutional
Shares of any other mutual fund sponsored by Goldman Sachs and designated as an
eligible fund for this purpose; and (ii) the corresponding class of any Goldman
Sachs Money Market Fund at the NAV next determined either by writing to Goldman
Sachs, Attention: Goldman Sachs Domestic Equity Funds--Name of Fund and Class
of Shares, c/o GSAM Shareholder Services, 4900 Sears Tower, Chicago, Illinois
60606 or, if previously elected in the Fund's Account Information Form, by
telephone at 800-621-2550 (7:00 a.m. to 5:30 p.m. Chicago time). A shareholder
should obtain and read the prospectus relating to any other fund and its Shares
and consider its investment objective, policies and applicable fees before
making an exchange. Under the telephone exchange privilege, Institutional
Shares may be exchanged among accounts with different names, addresses and
social security or other taxpayer identification numbers only if the exchange
request is in writing and is received in accordance with the procedures set
forth under "Redemption of Institutional Shares."
In an effort to prevent unauthorized or fraudulent exchanges by telephone,
Goldman Sachs employs reasonable procedures as set forth under "Redemption of
Institutional Shares" to confirm that such instructions are genuine. In times
of drastic economic or market changes the telephone exchange privilege may be
difficult to implement. For federal income tax purposes, an exchange is treated
as a sale of the Institutional Shares surrendered in the exchange on which an
investor may realize a gain or loss, followed by a purchase of Institutional
Shares, or the corresponding class of any Goldman Sachs Money Market Fund
received in the exchange. Shareholders should consult their own tax adviser
concerning the tax consequences of an exchange.
Each exchange which represents an initial investment in a Fund must satisfy
the minimum investment requirements of the Fund into which the Institutional
Shares are being exchanged, except that this requirement may be waived at the
discretion of the officers of the Fund. Exchanges are available only in states
where exchanges may legally be made. The exchange privilege may be materially
modified or withdrawn at any time on 60 days' written notice to holders of
Institutional Shares and is subject to certain limitations. See "Purchase of
Institutional Shares."
REDEMPTION OF INSTITUTIONAL SHARES
The Funds will redeem Institutional Shares upon request of a recordholder of
such Shares on any Business Day at the NAV next determined after receipt of a
request in proper form by Goldman Sachs from the recordholder. (See "Purchase
of Institutional Shares--Other Purchase Information" for a description of
limited situations where an institution or other intermediary may be authorized
to accept requests for the Funds.) If Institutional Shares to be redeemed were
recently purchased by check, a Fund may delay transmittal of redemption
proceeds until such time as it has assured itself that good funds have been
collected for the purchase of such Institutional Shares. This may take up to 15
days. Redemption requests may be made by a shareholder of record by writing to
or calling the Transfer Agent at the address or telephone number set forth on
the back cover of this Prospectus. A shareholder of record may request
redemptions by telephone if the optional telephone redemption privilege is
elected on the Account Information Form accompanying this Prospectus. It may be
difficult to implement redemptions by telephone in times of drastic economic or
market changes.
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In an effort to prevent unauthorized or fraudulent redemption or exchange
requests by telephone, Goldman Sachs employs reasonable procedures specified by
the Trust to confirm that such instructions are genuine. Among other things,
any redemption request that requires money to go to an account or address other
than that designated on the Account Information Form must be in writing and
signed by an authorized person designated on the Account Information Form. Any
such written request is also confirmed by telephone with both the requesting
party and the designated bank account to verify instructions. Exchanges among
accounts with different names, addresses and social security or other taxpayer
identification numbers must be in writing and signed by an authorized person
designated on the Account Information Form. Other procedures may be implemented
from time to time concerning telephone redemptions and exchanges. If reasonable
procedures are not implemented, the Trust may be liable for any loss due to
unauthorized or fraudulent transactions. In all other cases, neither the Funds,
the Trust nor Goldman Sachs will be responsible for the authenticity of
redemption or exchange instructions received by telephone.
Written requests for redemptions must be signed by each recordholder whose
signature has been guaranteed by a bank, a securities broker or dealer, a
credit union having authority to issue signature guarantees, a savings and loan
association, a building and loan association, a cooperative bank, a federal
savings bank or association, a national securities exchange, a registered
securities association or a clearing agency, provided that such institution
satisfies the standards established by the Transfer Agent.
The Funds will arrange for the proceeds of redemptions effected by any means
to be wired as federal funds to the bank account designated in the
recordholder's Account Information Form or, if the recordholder elects in
writing, by check. Redemption proceeds paid by wire transfer will normally be
wired on the next Business Day in federal funds (for a total one-day delay),
but may be paid up to three Business Days after receipt of a properly executed
redemption request. Wiring of redemption proceeds may be delayed one additional
Business Day if the Federal Reserve Bank is closed on the day redemption
proceeds would originally be wired. Redemption proceeds paid by check will
normally be mailed to the address of record within three Business Days of
receipt of a properly executed redemption request. In order to change the bank
designated on the Account Information Form to receive redemption proceeds, a
written request must be received by the Transfer Agent. This request must be
signature guaranteed as set forth above. Further documentation may be required
for executors, trustees or corporations. Once wire transfer instructions have
been given by Goldman Sachs, neither the Funds, the Trust nor Goldman Sachs
assumes any further responsibility for the performance of intermediaries or the
recordholder's bank in the transfer process. If a problem with such performance
arises, the recordholder should deal directly with such intermediaries or bank.
Additional documentation regarding a redemption by any means may be required
to effect a redemption when deemed appropriate by Goldman Sachs. The request
for such redemption will not be considered to have been received in proper form
until such additional documentation has been received.
Institutions (including banks, trust companies, brokers and investment
advisers) are responsible for the timely transmittal of redemption requests by
their customers to the Transfer Agent. In order to facilitate the timely
transmittal of redemption requests, these institutions have established times
by which redemption requests must be received by them. Additional documentation
may be required when deemed appropriate by an institution.
--------------------
48
<PAGE>
APPENDIX
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON ACCOUNT
INFORMATION FORM
You are required by law to provide a Fund with your correct Taxpayer
Identification Number (TIN), regardless of whether you file tax returns.
Failure to do so may subject you to penalties. Failure to provide your correct
TIN and to sign your name in the Certification section of the Account
Information Form could result in withholding of 31% by a Fund for the federal
backup withholding tax on distributions, redemptions, exchanges and other
payments relating to your account.
Any tax withheld may be credited against taxes owed on your federal income
tax return.
If you do not have a TIN, you should apply for one immediately by contacting
your local office of the Social Security Administration or the Internal
Revenue Service (IRS). Backup withholding could also apply to payments
relating to your account prior to a Fund's receipt of your TIN.
Special rules apply for certain entities. For example, for an account
established under a Uniform Gifts or Transfers to Minors Act, the TIN of the
minor should be furnished.
If you have been notified by the IRS that you are subject to backup
withholding because you failed to report all your interest and/or dividend
income on your tax return and you have not been notified by the IRS that such
withholding should cease, you must cross out item (2) in the Certification
section of the Account Information Form.
If you are an exempt recipient, you should furnish your TIN and certify your
exemption by signing the Certification section and writing "exempt" after your
signature. Exempt recipients include: corporations, tax-exempt pension plans
and IRAs, governmental agencies, financial institutions, registered securities
and commodities dealers and others.
If you are a nonresident alien or foreign entity, you must provide a
completed Form W-8 to a Fund in order to avoid backup withholding on certain
payments. Other payments to you may be subject to nonresident alien
withholding of up to 30%.
For further information regarding backup and nonresident alien withholding,
see Sections 3406, 1441 and 1442 of the Code and consult your tax adviser.
A-1
<PAGE>
- --------------------------------------------------------------------------------
GOLDMAN SACHS ASSET
MANAGEMENT
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
GOLDMAN SACHS FUNDS
MANAGEMENT, L.P.
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
GOLDMAN, SACHS & CO.
DISTRIBUTOR
85 BROAD STREET
NEW YORK, NEW YORK 10004
GOLDMAN, SACHS & CO.
TRANSFER AGENT
4900 SEARS TOWER
CHICAGO, ILLINOIS 60606
STATE STREET BANK AND TRUST COMPANY
CUSTODIAN
1776 HERITAGE DRIVE
NORTH QUINCY, MASSACHUSETTS 02171
ARTHUR ANDERSEN, LLP
INDEPENDENT PUBLIC ACCOUNTANTS
225 FRANKLIN STREET
BOSTON, MASSACHUSETTS 02110
TOLL FREE (IN U.S.) . . . . . . . . 800-621-2550
EQDOMPROINST
501417
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOLDMAN SACHS DOMESTIC
EQUITY FUNDS
- --------------------------------------------------------------------------------
PROSPECTUS
INSTITUTIONAL SHARES
LOGO
Goldman
Sachs
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS
GOLDMAN SACHS DOMESTIC EQUITY FUNDS
SERVICE SHARES
December 15, 1998
<TABLE>
<S> <C>
GOLDMAN SACHS BALANCED FUND GOLDMAN SACHS CORE SMALL CAP
Seeks long-term capital growth EQUITY FUND
and current income through in- Seeks long-term growth of capital
vestments in equity and fixed- through a broadly diversified portfolio
income securities. of equity securities of U.S. issuers
which are included in the Russell 2000
GOLDMAN SACHS GROWTH AND INCOME Index at the time of investment.
FUND
Seeks long-term growth of cap- GOLDMAN SACHS CAPITAL GROWTH FUND
ital and growth of income Seeks long-term growth of capital
through investments in equity through diversified investments in eq-
securities that are considered uity securities of companies that are
to have favorable prospects considered to have long-term capital ap-
for capital appreciation preciation potential.
and/or dividend paying abili-
ty. GOLDMAN SACHS MID CAP EQUITY FUND
Seeks long-term capital appreciation
GOLDMAN SACHS CORE LARGE CAP primarily through investments in equity
VALUE FUND securities of companies with public
Seeks long-term growth of stock market capitalizations within the
capital and dividend income range of the market capitalization of
through a broadly diversified companies constituting the Russell
portfolio of equity securities Midcap Index at the time of investment
of large cap U.S. issuers that (currently between $400 million and $16
are selling at low to modest billion).
valuations relative to general
market measures and that are GOLDMAN SACHS SMALL CAP VALUE FUND
expected to have favorable Seeks long-term capital growth through
prospects for capital investments in equity securities of com-
appreciation and/or dividend- panies with public stock market capital-
paying ability. izations of $1 billion or less at the
time of investment.
GOLDMAN SACHS CORE U.S. EQUITY
FUND
Seeks long-term growth of cap-
ital and dividend income
through a broadly diversified
portfolio of large cap and
blue chip equity securities
representing all major sectors
of the U.S. economy.
GOLDMAN SACHS CORE LARGE CAP
GROWTH FUND
Seeks long-term growth of
capital through a broadly
diversified portfolio of
equity securities of large cap
U.S. issuers that are expected
to have better prospects for
earnings growth than the
growth rate of the general
domestic economy. Dividend
income is a secondary
consideration.
</TABLE>
-------------
SERVICE SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN A FUND INVOLVES INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
(continued on next page)
<PAGE>
(cover continued)
Goldman Sachs Asset Management ("GSAM"), New York, New York, a separate
operating division of Goldman, Sachs & Co. ("Goldman Sachs"), serves as
investment adviser to the Balanced, Growth and Income, CORE Large Cap Value,
CORE Large Cap Growth, CORE Small Cap Equity, Mid Cap Equity and Small Cap
Value (formerly "Small Cap Equity") Funds. Goldman Sachs Funds Management, L.P.
("GSFM"), New York, New York, an affiliate of Goldman Sachs, serves as
investment adviser to the CORE U.S. Equity (formerly the "Select Equity Fund")
and Capital Growth Funds. GSAM and GSFM are each referred to in this Prospectus
as the "Investment Adviser." Goldman Sachs serves as each Fund's distributor
and transfer agent.
This Prospectus provides information about Goldman Sachs Trust (the "Trust")
and the Funds that a prospective investor should understand before investing.
This Prospectus should be retained for future reference. A Statement of
Additional Information (the "Additional Statement"), dated December 15, 1998,
containing further information about the Trust and the Funds which may be of
interest to investors, has been filed with the Securities and Exchange
Commission ("SEC"), is incorporated herein by reference in its entirety, and
may be obtained without charge from Service Organizations (as defined herein),
or Goldman Sachs by calling the telephone number, or writing to one of the
addresses, listed on the back cover of this Prospectus. The SEC maintains a Web
site (http://www.sec.gov) that contains the Additional Statement and other
information regarding the Trust.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Fund Highlights.................... 3
Fees and Expenses.................. 7
Financial Highlights............... 9
Investment Objectives and Policies. 17
Description of Securities.......... 22
Investment Techniques.............. 28
Risk Factors....................... 32
Investment Restrictions............ 34
Portfolio Turnover................. 34
Management......................... 34
Expenses........................... 39
Net Asset Value.................... 40
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Performance Information....... 40
Shares of the Trust........... 41
Taxation...................... 42
Additional Information........ 43
Additional Services........... 44
Reports to Shareholders....... 44
Dividends..................... 45
Purchase of Service Shares.... 45
Exchange Privilege............ 47
Redemption of Service Shares.. 47
Appendix...................... A-1
</TABLE>
2
<PAGE>
FUND HIGHLIGHTS
The following is intended to highlight certain information and is
qualified in its entirety by the more detailed information contained in
this Prospectus.
WHAT IS THE GOLDMAN SACHS TRUST?
The Goldman Sachs Trust is an open-end management investment company
that offers its shares ("Shares") in several investment funds (commonly
known as mutual funds (the "Funds")). Each Fund pools the monies of
investors by selling its Shares to the public and investing these monies
in a portfolio of securities designed to achieve that Fund's stated
investment objectives.
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS?
Each Fund has distinct investment objectives and policies. There can be
no assurance that a Fund's objectives will be achieved. Each Fund is a
"diversified open-end management company" as defined in the Investment
Company Act of 1940, as amended (the "Act"). For a further description of
each Fund's investment objectives and policies, see "Investment
Objectives and Policies," "Description of Securities" and "Investment
Techniques."
- --------------------------------------------------------------------------------
<TABLE>
INVESTMENT
FUND NAME OBJECTIVES INVESTMENT CRITERIA BENCHMARK
--------- ---------- ------------------- ---------
<S> <C> <C> <C>
BALANCED Long-term Between 45% and 65% of total assets in Lehman Aggregate
FUND capital growth equity securities and at least 25% in Bond Index and
and current fixed-income senior securities. the Standard &
income. Poor's Index of
500 Common
Stocks (the "S&P
500 Index")
- ----------------------------------------------------------------------------------------
GROWTH AND Long-term growth At least 65% of total assets in equity S&P 500 Index
INCOME FUND of capital and securities that the Investment Adviser
growth of considers to have favorable prospects
income. for capital appreciation and/or
dividend-paying ability.
- ----------------------------------------------------------------------------------------
CORE LARGE Long-term growth At least 90% of total assets in equity Russell 1000
CAP VALUE of capital and securities of U.S. issuers, including Value
FUND dividend income. certain foreign issuers traded in the Index
U.S. The Fund seeks to achieve its
objective through a broadly diversified
portfolio of equity securities of large
cap U.S. issuers that are selling at
low to modest valuations relative to
general market measures such as
earnings, book value and other
fundamental accounting measures, and
that are expected to have favorable
prospects for capital appreciation
and/or dividend-paying ability. The
Fund's investments are selected using
both a variety of quantitative
techniques and fundamental research in
seeking to maximize the Fund's expected
return, while maintaining risk, style,
capitalization and industry
characteristics similar to the Russell
1000 Value Index.
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
INVESTMENT
FUND NAME OBJECTIVES INVESTMENT CRITERIA BENCHMARK
--------- ---------- ------------------- ---------
<S> <C> <C> <C>
CORE U.S. Long-term growth At least 90% of total assets in equity S&P 500 Index
EQUITY FUND of capital and securities of U.S. issuers, including
dividend income. certain foreign issuers in the U.S. The
Fund seeks to achieve its objective
through a broadly diversified portfolio
of large cap and blue chip equity
securities representing all major
sectors of the U.S. economy. The Fund's
investments are selected using both a
variety of quantitative techniques and
fundamental research in seeking to
maximize the Fund's expected return,
while maintaining risk, style,
capitalization and industry
characteristics similar to the S&P 500
Index.
- --------------------------------------------------------------------------------------
CORE LARGE Long-term growth At least 90% of total assets in equity Russell 1000
CAP GROWTH of capital. securities of U.S. issuers, including Growth Index
FUND Dividend income certain foreign issuers traded in the
is a secondary U.S. The Fund seeks to achieve its
consideration. objective through a broadly diversified
portfolio of equity securities of large
cap U.S. issuers that are expected to
have better prospects for earnings
growth than the growth rate of the
general domestic economy. The Fund's
investments are selected using both a
variety of quantitative techniques and
fundamental research in seeking to
maximize the Fund's expected return,
while maintaining risk, style,
capitalization and industry
characteristics similar to the Russell
1000 Growth Index.
- --------------------------------------------------------------------------------------
CORE SMALL Long-term growth At least 90% of total assets in equity Russell 2000
CAP EQUITY of capital. securities of U.S. issuers, including Index
FUND certain foreign issuers traded in the
U.S. The Fund seeks to achieve its
investment objective through a broadly
diversified portfolio of equity
securities of U.S. issuers which are
included in the Russell 2000 Index at
the time of investment. The Fund's
investments are selected using both a
variety of quantitative techniques and
fundamental research in seeking to
maximize the Fund's expected return,
while maintaining risk, style,
capitalization and industry
characteristics similar to the Russell
2000 Index.
- --------------------------------------------------------------------------------------
CAPITAL Long-term At least 90% of total assets in a S&P 500 Index
GROWTH FUND capital growth. diversified portfolio of equity
securities. The Investment Adviser
considers long-term capital
appreciation potential in selecting
investments.
- --------------------------------------------------------------------------------------
MID CAP Long-term At least 65% of total assets in Russell Midcap
EQUITY FUND capital equity securities of companies with Index
appreciation. public stock market capitalizations
within the range of the market
capitalization of companies
constituting the Russell Midcap Index
at the time of investment (currently
between $400 million and $16 billion)
("Mid-Cap Companies").
- --------------------------------------------------------------------------------------
SMALL CAP Long-term At least 65% of total assets in equity Russell 2000
VALUE FUND capital growth. securities of companies with public
stock market capitalizations of $1
billion or less at the time of
investment.
- --------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
WHAT ARE THE RISK FACTORS AND SPECIAL CHARACTERISTICS THAT I SHOULD
CONSIDER BEFORE INVESTING?
Each Fund's Share price will fluctuate with market, economic and, to the
extent applicable, foreign exchange conditions, so that an investment in
any of the Funds may be worth more or less when redeemed than when
purchased. None of the Funds should be relied upon as a complete investment
program. There can be no assurance that a Fund's investment objectives will
be achieved. See "Risk Factors."
Risks of Investing in Small Capitalization Companies. To the extent that
a Fund invests in the securities of small market capitalization companies,
the Fund may be exposed to a higher degree of risk and price volatility.
Securities of such issuers may lack sufficient market liquidity to enable a
Fund to effect sales at an advantageous time or without a substantial drop
in price.
Foreign Risks. Investments in securities of foreign issuers and
currencies involve risks that are different from those associated with
investments in domestic securities. The risks associated with foreign
investments and currencies include changes in relative currency exchange
rates, political and economic developments, the imposition of exchange
controls, confiscation and other governmental restrictions. Generally,
there is less availability of data on foreign companies and securities
markets as well as less regulation of foreign stock exchanges, brokers and
issuers. A Fund's investments in emerging markets and countries ("Emerging
Countries") involves greater risks than investments in the developed
countries of Western Europe, the United States, Canada, Australia, New
Zealand and Japan.
Other. A Fund's use of certain investment techniques, including
derivatives, forward contracts, options and futures, will subject the Fund
to greater risk than funds that do not employ such techniques.
WHO MANAGES THE FUNDS?
Goldman Sachs Asset Management serves as Investment Adviser to the Balanced,
Growth and Income, CORE Large Cap Value, CORE Large Cap Growth, CORE Small Cap
Equity, Mid Cap Equity and Small Cap Value Funds. Goldman Sachs Funds
Management, L.P. serves as Investment Adviser to the CORE U.S. Equity and
Capital Growth Funds. As of August 21, 1998, the Investment Adviser, together
with its affiliates, acted as investment adviser or distributor for assets in
excess of $168 billion.
WHO DISTRIBUTES THE FUNDS' SHARES?
Goldman Sachs acts as distributor of each Fund's Shares (the "Distributor").
WHAT IS THE MINIMUM INVESTMENT?
The Funds do not have any minimum purchase or account requirements with
respect to Service Shares. A Service Organization may, however, impose a
minimum amount for initial and subsequent investments in Service Shares,
and may establish other requirements such as a minimum account balance.
5
<PAGE>
HOW DO I PURCHASE SERVICE SHARES?
Customers of Service Organizations may invest in Service Shares only
through their Service Organizations. Service Shares of a Fund are purchased
at the current net asset value ("NAV") without any sales load. See
"Purchase of Service Shares."
ADDITIONAL SERVICES. The Trust, on behalf of the Funds, has adopted a
Service Plan with respect to the Service Shares which authorizes a Fund to
compensate Service Organizations for providing account administration and
shareholder liaison services to their customers who are the beneficial
owners of such Shares. The Trust, on behalf of the Funds, will enter into
agreements with each Service Organization which will provide for
compensation to the Service Organization in an amount up to 0.50% (on an
annualized basis) of the average daily net assets of the Service Shares of
the Funds attributable to or held in the name of the Service Organization
for its customers. See "Additional Services."
HOW DO I SELL MY SERVICE SHARES?
You may redeem Service Shares upon request on any Business Day, as
defined under "Additional Information," at the NAV next determined after
receipt of such request in proper form. See "Redemption of Service Shares."
HOW DO I RECEIVE DIVIDENDS AND DISTRIBUTIONS?
<TABLE>
<CAPTION>
INVESTMENT INCOME DIVIDENDS CAPITAL GAINS
FUND DECLARED AND PAID DISTRIBUTIONS
- ---- ----------------- -------------
<S> <C> <C>
Balanced.............................. Quarterly Annually
Growth and Income..................... Quarterly Annually
CORE Large Cap Value.................. Quarterly Annually
CORE U.S. Equity...................... Annually Annually
CORE Large Cap Growth................. Annually Annually
CORE Small Cap Equity................. Annually Annually
Capital Growth........................ Annually Annually
Mid Cap Equity........................ Annually Annually
Small Cap Value....................... Annually Annually
</TABLE>
Recordholders of Service Shares may receive dividends and distributions
in additional Service Shares of the Fund in which they have invested or may
elect to receive them in cash. For further information concerning dividends
and distributions, see "Dividends."
6
<PAGE>
FEES AND EXPENSES
(SERVICE SHARES)
<TABLE>
<CAPTION>
CORE CORE CORE
GROWTH LARGE CORE LARGE SMALL MID SMALL
AND CAP U.S. CAP CAP CAPITAL CAP CAP
BALANCED INCOME VALUE EQUITY GROWTH EQUITY GROWTH EQUITY VALUE
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------- ------ ----- ------ ------ ------ ------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION
EXPENSES:
Maximum Sales Charge
Imposed on Purchases.. None None None None None None None None None
Maximum Sales Charge
Imposed on Reinvested
Dividends............. None None None None None None None None None
Redemption Fees........ None None None None None None None None None
Exchange Fees.......... None None None None None None None None None
ANNUAL FUND OPERATING
EXPENSES: (as a
percentage of average
daily net assets)/1/
Management Fees (after
waivers and
reimbursements)/2/.... 0.65% 0.70% 0.60% 0.70% 0.60% 0.85% 1.00% 0.75% 1.00%
Service Fees/3/........ 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Other Expenses (after
waivers and reimburse-
ments)/4/............. 0.05% 0.09% 0.04% 0.04% 0.04% 0.08% 0.04% 0.14% 0.10%
---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL FUND OPERATING
EXPENSES (after waivers
and reimbursements)/5/. 1.20% 1.29% 1.14% 1.24% 1.14% 1.43% 1.54% 1.39% 1.60%
==== ==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
- ---------------------
/1/ The Funds' annual operating expenses have been restated to reflect fees
and expenses in effect as of September 1, 1998, except for the CORE Large
Cap Value Fund which are based on estimated amounts for the current fiscal
year.
/2/ The Investment Adviser has voluntarily agreed not to impose a portion of
the management fee on the CORE U.S. Equity and CORE Large Cap Growth Funds
equal to 0.05% and 0.15%, respectively. Without such limitations,
management fees would be 0.75% of each Fund's average daily net assets.
/3/ Service Organizations may charge other fees to their customers who are
beneficial owners of Service Shares in connection with their customer
accounts.
/4/ The Investment Adviser has voluntarily agreed to reduce or limit certain
other expenses (excluding management fees, service fees, transfer agency
fees (equal to 0.04% of the average daily net assets of each Fund's
Service Shares), taxes, interest and brokerage fees and litigation,
indemnification and other extraordinary expenses) for each Fund to the
extent such expenses exceed the following percentages of average daily net
assets:
<TABLE>
<CAPTION>
OTHER
EXPENSES
--------
<S> <C>
Balanced......................................................... 0.01%
Growth and Income................................................ 0.05%
CORE Large Cap Value............................................. 0.00%
CORE U.S. Equity................................................. 0.00%
CORE Large Cap Growth............................................ 0.00%
CORE Small Cap Equity............................................ 0.04%
Capital Growth................................................... 0.00%
Mid Cap Equity................................................... 0.10%
Small Cap Value.................................................. 0.06%
</TABLE>
7
<PAGE>
/5/ Without the limitations described above, "Other Expenses" and "Total
Operating Expenses" of the Service Shares of the Funds would be as set
forth below:
<TABLE>
<CAPTION>
TOTAL
OTHER OPERATING
EXPENSES EXPENSES
-------- ---------
<S> <C> <C>
Balanced .............................................. 0.28% 1.43%
Growth and Income...................................... 0.12% 1.32%
CORE Large Cap Value................................... 0.56% 1.66%
CORE U.S. Equity....................................... 0.12% 1.37%
CORE Large Cap Growth.................................. 0.22% 1.47%
CORE Small Cap Equity.................................. 0.48% 1.83%
Capital Growth......................................... 0.10% 1.60%
Mid Cap Equity......................................... 0.16% 1.41%
Small Cap Value........................................ 0.13% 1.63%
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a hy-
pothetical $1,000 investment, assuming (1) a
5% annual return and (2) redemption at the
end of each time period:
Balanced...................................... $12 $38 $66 $145
Growth and Income............................. $13 $41 $71 $156
CORE Large Cap Value.......................... $12 $36 $63 $139
CORE U.S. Equity.............................. $13 $39 $68 $150
CORE Large Cap Growth......................... $12 $36 $63 $139
CORE Small Cap Equity......................... $15 $45 $78 $171
Capital Growth................................ $16 $49 $84 $183
Mid Cap Equity................................ $14 $44 $76 $167
Small Cap Value............................... $16 $50 $87 $190
</TABLE>
The Investment Adviser and Goldman Sachs may modify or discontinue any of
the limitations set forth above in the future at their discretion. The
information set forth in the foregoing table and hypothetical example relates
only to Service Shares of the Funds. Each Fund also offers Institutional
Shares and Class A, Class B and Class C Shares, which are subject to different
fees and expenses (which affect performance), have different minimum
investment requirements and are entitled to different services. Information
regarding Institutional, Class A, Class B and Class C Shares may be obtained
from an investor's sales representative or from Goldman Sachs by calling the
number on the back of this Prospectus.
In addition to the compensation itemized above, certain Service
Organizations may receive other compensation in connection with the sale and
distribution of Service Shares or for services to their customers' accounts
and/or the Funds. For additional information regarding such compensation, see
"Purchase of Service Shares" in this Prospectus and the Additional Statement.
The purpose of the foregoing table is to assist investors in understanding
the various fees and expenses of a Fund that an investor will bear directly or
indirectly. The information on the fees and expenses included in the table and
hypothetical example above is based on each Fund's fees and expenses (actual
or estimated) and should not be considered as representative of future
expenses. Actual fees and expenses may be greater or less than those
indicated. Moreover, while the example assumes a 5% annual return, a Fund's
actual performance will vary and may result in an actual return greater or
less than 5%. See "Management--Investment Advisers" and "Additional Services."
8
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The following data for the years and periods ended on or before January 31,
1998 have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report incorporated by reference into the Additional
Statement from the Annual Report to shareholders of the Funds for the year
ended January 31, 1998 (the "Annual Report"). This information should be read
in conjunction with the financial statements and related notes incorporated by
reference and attached to the Additional Statement. The Annual Report also
contains performance information and is available upon request and without
charge by calling the telephone number or writing to one of the addresses on
the back cover of this Prospectus. Information for the period ended July 31,
1998 has not been audited. During the periods shown, the Trust did not offer
Shares of the CORE Large Cap Value Fund. Accordingly, there are no financial
highlights for this Fund.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
--------------------------- ------------------------------------------------
NET REALIZED
AND UNREALIZED
GAIN (LOSS) ON IN EXCESS OF
INVESTMENT, FROM NET NET REALIZED NET
NET ASSET FUTURES AND FROM IN EXCESS REALIZED GAIN GAIN ON INCREASE NET ASSET
VALUE, NET FOREIGN CURRENCY NET OF NET ON INVESTMENT INVESTMENT (DECREASE) VALUE,
BEGINNING INVESTMENT RELATED INVESTMENT INVESTMENT AND FUTURES AND FUTURES IN NET END OF
OF PERIOD INCOME TRANSACTIONS INCOME INCOME TRANSACTIONS TRANSACTIONS ASSET VALUE PERIOD
--------- ---------- ---------------- ---------- ---------- ------------- ------------ ----------- ---------
BALANCED FUND
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $20.29 $0.29 $(0.21) $(0.28) $ -- $ -- $ -- $(0.20) $20.09
1998--Class B
Shares.......... 20.20 0.20 (0.20) (0.21) -- -- -- (0.21) 19.99
1998--Class C
Shares.......... 20.17 0.20 (0.21) (0.21) -- -- -- (0.22) 19.95
1998--Institu-
tional Shares... 20.29 0.32 (0.21) (0.31) -- -- -- (0.20) 20.09
1998--Service
Shares.......... 20.28 0.26 (0.21) (0.25) -- -- -- (0.20) 20.08
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 18.78 0.57 2.66 (0.56) -- (1.16) -- 1.51 20.29
1998--Class B
Shares.......... 18.73 0.50 2.57 (0.42) (0.02) (1.16) -- 1.47 20.20
1998--Class C
Shares(b)....... 21.10 0.25 0.24 (0.22) (0.04) (0.64) (0.52) (0.93) 20.17
1998--Institu-
tional
Shares(b)....... 21.18 0.26 0.32 (0.23) (0.08) (0.45) (0.71) (0.89) 20.29
1998--Service
Shares(b)....... 21.18 0.22 0.32 (0.22) (0.06) (0.72) (0.44) (0.90) 20.28
- -----------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 17.31 0.66 2.47 (0.66) -- (1.00) -- 1.47 18.78
1997--Class B
Shares(b)....... 17.46 0.42 2.34 (0.42) (0.07) (1.00) -- 1.27 18.73
- -----------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 14.22 0.51 3.43 (0.50) -- (0.35) -- 3.09 17.31
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1995--Class A
Shares(b)....... 14.18 0.10 0.02 (0.08) -- -- -- 0.04 14.22
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
-------------------------
RATIO OF RATIO OF
NET RATIO OF NET NET
ASSETS AT NET INVESTMENT RATIO OF INVESTMENT
PORTFOLIO END OF EXPENSES TO INCOME TO EXPENSES INCOME (LOSS)
TOTAL TURNOVER PERIOD AVERAGE NET AVERAGE NET TO AVERAGE TO AVERAGE
RETURN(A) RATE(F) (IN 000'S) ASSETS ASSETS NET ASSETS NET ASSETS
----------- ------------ ---------- ------------ ------------ ----------- -------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 0.34%(d) 69.31%(d) $191,408 1.00%(c) 2.86%(c) 1.45%(c) 2.41%(c)
1998--Class B
Shares.......... (0.04)(d) 69.31(d) 38,923 1.75(c) 2.11(c) 1.95(c) 1.91(c)
1998--Class C
Shares.......... (0.08)(d) 69.31(d) 15,693 1.75(c) 2.12(c) 1.95(c) 1.92(c)
1998--Institu-
tional Shares... 0.45(d) 69.31(d) 8,646 0.75(c) 3.11(c) 0.95(c) 2.91(c)
1998--Service
Shares.......... 0.26(d) 69.31(d) 447 1.25(c) 2.51(c) 1.45(c) 2.31(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 17.54 190.43 163,636 1.00 2.94 1.57 2.37
1998--Class B
Shares.......... 16.71 190.43 23,639 1.76 2.14 2.07 1.83
1998--Class C
Shares(b)....... 2.49(d) 190.43 8,850 1.77(c) 2.13(c) 2.08(c) 1.82(c)
1998--Institu-
tional
Shares(b)....... 2.93(d) 190.43 8,367 0.76(c) 3.13(c) 1.07(c) 2.82(c)
1998--Service
Shares(b)....... 2.66(d) 190.43 16 1.26(c) 2.58(c) 1.57(c) 2.27(c)
- -----------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 18.59 208.11 81,410 1.00 3.76 1.77 2.99
1997--Class B
Shares(b)....... 16.22(d) 208.11 2,110 1.75(c) 2.59(c) 2.27(c) 2.07(c)
- -----------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 28.10 197.10 50,928 1.00 3.65 1.90 2.75
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1995--Class A
Shares(b)....... 0.87(d) 14.71 7,510 1.00(c) 3.39(c) 8.29(c) (3.90)(c)
</TABLE>
- -------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class A and Class B Share activity commenced on October 12, 1994 and May
1, 1996, respectively. Class C, Institutional and Service Share activity
commenced on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
(f) Includes the effect of mortgage dollar roll transactions.
9
<PAGE>
<TABLE>
<CAPTION>
INCOME (LOSS)
FROM INVESTMENT
OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
-------------------------- ------------------------------------------------
NET IN EXCESS OF
REALIZED AND FROM NET NET REALIZED NET
NET ASSET NET UNREALIZED FROM IN EXCESS REALIZED GAIN GAIN ON INCREASE
VALUE, INVESTMENT GAIN (LOSS) ON NET OF NET ON INVESTMENT INVESTMENT ADDITIONAL (DECREASE)
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES PAID-IN IN NET
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS CAPITAL ASSET VALUE
--------- ---------- -------------- ---------- ---------- ------------- ------------ ---------- -----------
GROWTH AND INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $25.93 $0.09 $(0.41) $(0.08) $ -- $ -- $ -- $ -- $(0.40)
1998--Class B
Shares.......... 25.73 -- (0.41) -- -- -- -- -- (0.41)
1998--Class C
Shares.......... 25.70 0.01 (0.43) (0.01) -- -- -- -- (0.43)
1998--
Institutional
Shares.......... 25.95 0.13 (0.40) (0.13) -- -- -- -- (0.40)
1998--Service
Shares.......... 25.92 0.07 (0.39) (0.07) -- -- -- -- (0.39)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 23.18 0.11 5.27 (0.11) -- (2.52) -- -- 2.75
1998--Class B
Shares.......... 23.10 0.04 5.14 -- (0.03) (2.45) (0.07) -- 2.63
1998--Class C
Shares(b)....... 28.20 (0.01) 0.06 -- (0.03) (1.42) (1.10) -- (2.50)
1998--
Institutional
Shares.......... 23.19 0.27 5.23 (0.22) -- (0.24) (2.28) -- 2.76
1998--Service
Shares.......... 23.17 0.14 5.23 (0.06) (0.04) (2.52) -- -- 2.75
- ------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 19.98 0.35 5.18 (0.35) (0.01) (1.97) -- -- 3.20
1997--Class B
Shares(b)....... 20.82 0.17 4.31 (0.17) (0.06) (1.97) -- -- 2.28
1997--
Institutional
Shares(b)....... 21.25 0.29 3.96 (0.30) (0.04) (1.97) -- -- 1.94
1997--Service
Shares(b)....... 20.71 0.28 4.50 (0.28) (0.07) (1.97) -- -- 2.46
- ------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 15.80 0.33 4.75 (0.30) -- (0.60) -- -- 4.18
- ------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.79 0.20(f) 0.30(f) (0.20) (0.07) (0.33) -- 0.11(f) 0.01
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1994--Class A
Shares(b)....... 14.18 0.15 1.68 (0.15) (0.01) (0.06) -- -- 1.61
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
--------------------------
RATIO
OF NET RATIO
NET RATIO INVESTMENT OF NET
NET ASSET ASSETS AT OF NET INCOME (LOSS) RATIO INVESTMENT
VALUE, PORTFOLIO END OF EXPENSES TO TO AVERAGE OF EXPENSES INCOME (LOSS)
END OF TOTAL TURNOVER PERIOD AVERAGE NET NET TO AVERAGE TO AVERAGE
PERIOD RETURN(A) RATE (IN 000S) ASSETS ASSETS NET ASSETS NET ASSETS
--------- ------------ ------------ ---------- ------------ ------------- ------------ -------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $25.53 (1.26)%(d) 37.78%(d) $1,356,662 1.22%(c) 0.64%(c) 1.38%(c) 0.48%(c)
1998--Class B
Shares.......... 25.32 (1.59)(d) 37.78(d) 416,520 1.88(c) (0.03)(c) 1.88(c) (0.03)(c)
1998--Class C
Shares.......... 25.27 (1.63)(d) 37.78(d) 63,080 1.88(c) (0.03)(c) 1.88(c) (0.03)(c)
1998--
Institutional
Shares.......... 25.55 (1.07)(d) 37.78(d) 192,094 0.80(c) 1.06(c) 0.80(c) 1.06(c)
1998--Service
Shares.......... 25.53 (1.26)(d) 37.78(d) 12,338 1.30(c) 0.57(c) 1.30(c) 0.57(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 25.93 23.71 61.95 1,216,582 1.25 0.43 1.42 0.26
1998--Class B
Shares.......... 25.73 22.87 61.95 307,815 1.94 (0.35) 1.94 (0.35)
1998--Class C
Shares(b)....... 25.70 0.51(d) 61.95 31,686 1.99(c) (0.48)(c) 1.99(c) (0.48)(c)
1998--
Institutional
Shares.......... 25.95 24.24 61.95 36.225 0.83 0.76 0.83 0.76
1998--Service
Shares.......... 25.92 23.63 61.95 8,893 1.32 0.32 1.32 0.32
- ------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 23.18 28.42 53.03 615,103 1.22 1.60 1.43 1.39
1997--Class B
Shares(b)....... 23.10 22.23(d) 53.03 17,346 1.93(c) 0.15(c) 1.93(c) 0.15(c)
1997--
Institutional
Shares(b)....... 23.19 20.77(d) 53.03 193 0.82(c) 1.36(c) 0.82(c) 1.36(c)
1997--Service
Shares(b)....... 23.17 23.87(d) 53.03 3,174 1.32(c) 0.94(c) 1.32(c) 0.94(c)
- ------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 19.98 32.45 57.93 436,757 1.20 1.67 1.45 1.42
- ------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.80 3.97 71.80 193,772 1.25 1.28 1.58 0.95
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1994--Class A
Shares(b)....... 15.79 13.08(d) 102.23 41,528 1.25(c) 1.23(c) 3.24(c) (0.76)(c)
</TABLE>
- -------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on February 5, 1993, May 1, 1996, August 15, 1997, June 3, 1996
and March 6, 1996, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
(f) Calculated based on the average Shares outstanding methodology.
10
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM DISTRIBUTIONS TO
INVESTMENT OPERATIONS(E) SHAREHOLDERS
------------------------- -----------------------------------------------
FROM NET IN EXCESS OF NET
NET REALIZED REALIZED NET REALIZED INCREASE/ NET
NET ASSET NET AND UNREALIZED IN EXCESS GAIN ON GAIN ON (DECREASE) ASSET
VALUE, INVESTMENT GAIN (LOSS) ON FROM NET OF NET INVESTMENT INVESTMENT IN NET VALUE,
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES ASSET END OF TOTAL
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS VALUE PERIOD RETURN(A)
--------- ---------- -------------- ---------- ---------- ------------ ------------ ---------- ------ ---------
CORE U.S. EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $26.59 $0.03 $3.61 $ -- $ -- $ -- $ -- $3.64 $30.23 13.69%(d)
1998--Class B
Shares.......... 26.32 (0.04) 3.58 -- -- -- -- 3.54 29.86 13.45(d)
1998--Class C
Shares.......... 26.24 (0.04) 3.56 -- -- -- -- 3.52 29.76 13.41(d)
1998--Institu-
tional Shares... 26.79 0.10 3.66 -- -- -- -- 3.76 30.55 14.04(d)
1998--Service
Shares.......... 26.53 0.05 3.60 -- -- -- -- 3.65 30.18 13.76(d)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 23.32 0.11 5.63 (0.12) -- (2.35) -- 3.27 26.59 24.96
1998--Class B
Shares.......... 23.18 0.11 5.44 -- (0.06) (2.00) (0.35) 3.14 26.32 24.28
1998--Class C
Shares(b)....... 27.48 0.03 1.22 -- (0.14) (0.67) (1.68) (1.24) 26.24 4.85(d)
1998--Institu-
tional Shares... 23.44 0.30 5.65 (0.24) (0.01) (1.33) (1.02) 3.35 26.79 25.76
1998--Service
Shares.......... 23.27 0.19 5.57 (0.07) (0.08) (2.35) -- 3.26 26.53 25.11
- ----------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 19.66 0.16 4.46 (0.16) -- (0.80) -- 3.66 23.32 23.75
1997--Class B
Shares(b)....... 20.44 0.04 3.70 (0.04) (0.16) (0.80) -- 2.74 23.18 18.59(d)
1997--Institu-
tional Shares... 19.71 0.30 4.51 (0.28) -- (0.80) -- 3.73 23.44 24.63
1997--Service
Shares(b)....... 21.02 0.13 3.15 (0.13) (0.10) (0.80) -- 2.25 23.27 15.92(d)
- ----------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 14.61 0.19 5.43 (0.16) -- (0.41) -- 5.05 19.66 38.63
1996--Institu-
tional
Shares(b)....... 16.97 0.16 3.23 (0.24) -- (0.41) -- 2.74 19.71 20.14(d)
- ----------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.93 0.20 (0.38) (0.20) -- (0.94) -- (1.32) 14.61 (1.10)
- ----------------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 15.46 0.17 2.08 (0.17) -- (1.61) -- 0.47 15.93 15.12
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES OR
EXPENSE LIMITATIONS
-------------------------
RATIO OF RATIO OF RATIO OF
NET NET RATIO OF NET
NET EXPENSES INVESTMENT EXPENSES INVESTMENT
ASSETS AT TO INCOME TO INCOME
PORTFOLIO END OF AVERAGE (LOSS) TO AVERAGE (LOSS) TO
TURNOVER PERIOD NET AVERAGE NET AVERAGE
RATE (IN 000S) ASSETS NET ASSETS ASSETS NET ASSETS
----------- --------- ---------- ------------ ------------ ------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 22.52%(d) $527,753 1.26%(c) 0.23%(c) 1.43%(c) 0.06%(c)
1998--Class B
Shares.......... 22.52(d) 102,565 1.76(c) (0.29)(c) 1.93(c) (0.46)(c)
1998--Class C
Shares.......... 22.52(d) 15,316 1.76(c) (0.32)(c) 1.93(c) (0.49)(c)
1998--Institu-
tional Shares... 22.52(d) 298,853 0.65(c) 0.83(c) 0.82(c) 0.66(c)
1998--Service
Shares.......... 22.52(d) 10,388 1.15(c) 0.33(c) 1.32(c) 0.16(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 65.89 398,393 1.28 0.51 1.47 0.32
1998--Class B
Shares.......... 65.89 59,208 1.79 (0.05) 1.96 (0.22)
1998--Class C
Shares(b)....... 65.89 6,267 1.78(c) (0.21)(c) (c)1.95(c) (0.38)(c)
1998--Institu-
tional Shares... 65.89 202,893 0.65 1.16 0.82 0.99
1998--Service
Shares.......... 65.89 7,841 1.15 0.62 1.32 0.45
- ----------------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 37.78 225,968 1.29 0.91 1.53 0.67
1997--Class B
Shares(b)....... 37.28 17,258 1.83(c) 0.06(c) 2.00(c) (0.11)(c)
1997--Institu-
tional Shares... 37.28 148,942 0.65 1.52 0.85 1.32
1997--Service
Shares(b)....... 37.28 3,666 1.15(c) 0.69(c) 1.35(c) 0.49(c)
- ----------------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 39.35 129,045 1.25 1.01 1.55 0.71
1996--Institu-
tional
Shares(b)....... 39.35 64,829 0.65(c) 1.49(c) 0.96(c) 1.18(c)
- ----------------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 56.18 94,968 1.38 1.33 1.63 1.08
- ----------------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 87.73 92,769 1.42 0.92 1.67 0.67
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class B, Class C, Institutional and Service Share activity commenced on May
1, 1996, August 15, 1997, June 15, 1995 and June 7, 1996, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
11
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT
OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
---------------------- -----------------------------------------------
NET
REALIZED
AND FROM NET IN EXCESS OF
UNREALIZED REALIZED NET REALIZED NET NET
NET ASSET NET GAIN (LOSS) IN EXCESS GAIN ON GAIN ON INCREASE ASSET
VALUE, INVESTMENT ON FROM NET OF NET INVESTMENT INVESTMENT IN NET VALUE,
BEGINNING INCOME INVESTMENTS INVESTMENT INVESTMENT AND FUTURES AND FUTURES ASSET END OF
OF PERIOD (LOSS) AND FUTURES INCOME INCOME TRANSACTIONS TRANSACTIONS VALUE PERIOD
--------- ---------- ----------- ---------- ---------- ------------ ------------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CORE LARGE CAP GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $11.97 $ 0.01 $1.97 $ -- $ -- $ -- $ -- $1.98 $13.95
1998--Class B
Shares.......... 11.92 (0.02) 1.95 -- -- -- -- 1.93 13.85
1998--Class C
Shares.......... 11.93 (0.02) 1.93 -- -- -- -- 1.91 13.84
1998--
Institutional
Shares.......... 11.97 0.01 1.99 -- -- -- -- 2.00 13.97
1998--Service
Shares.......... 11.95 -- 1.96 -- -- -- -- 1.96 13.91
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER OF
FEES OR EXPENSE
LIMITATIONS
------------------------
NET RATIO OF RATIO OF
ASSETS NET NET RATIO OF RATIO OF
AT END EXPENSES INVESTMENT EXPENSES NET
OF TO INCOME TO INVESTMENT
PORTFOLIO PERIOD AVERAGE (LOSS) TO AVERAGE LOSS TO
TOTAL TURNOVER (IN NET AVERAGE NET AVERAGE
RETURN(A) RATE 000S) ASSETS NET ASSETS ASSETS NET ASSETS
----------- ----------- -------- ---------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... 16.54%(d) 45.79%(d) $116,939 0.90%(c) 0.19%(c) 1.61%(c) (0.52)%(c)
1998--Class B
Shares.......... 16.19(d) 45.79(d) 49,881 1.65(c) (0.56)(c) 2.11(c) (1.02)(c)
1998--Class C
Shares.......... 16.01(d) 45.79(d) 15,724 1.65(c) (0.57)(c) 2.11(c) (1.03)(c)
1998--
Institutional
Shares.......... 16.71(d) 45.79(d) 135,153 0.65(c) 0.42(c) 1.11(c) (0.04)(c)
1998--Service
Shares.......... 16.40(d) 45.79(d) 507 1.15(c) (0.04)(c) 1.61(c) (0.50)(c)
FOR THE PERIOD
ENDED JANUARY
31,
- --------------
1998--Class A
Shares(b)....... 10.00 0.01 2.35 (0.01) -- (0.32) (0.06) 1.97 11.97
1998--Class B
Shares(b)....... 10.00 (0.03) 2.33 -- -- (0.18) (0.20) 1.92 11.92
1998--Class C
Shares(b)....... 11.80 (0.02) 0.54 -- (0.01) (0.38) -- 0.13 11.93
1998--
Institutional
Shares(b)....... 10.00 0.01 2.35 (0.01) -- (0.19) (0.19) 1.97 11.97
1998--Service
Shares(b)....... 10.00 (0.02) 2.35 -- -- (0.08) (0.30) 1.95 11.95
FOR THE PERIOD
ENDED JANUARY
31,
- --------------
1998--Class A
Shares(b)....... 23.79(d) 74.97(d) 53,786 0.91(c) 0.12(c) 2.40(c) (1.37)(c)
1998--Class B
Shares(b)....... 23.26(d) 74.97(d) 13,857 1.67(c) (0.72)(c) 2.91(c) (1.96)(c)
1998--Class C
Shares(b)....... 4.56(d) 74.97(d) 4,132 1.68(c) (0.76)(c) 2.92(c) (2.00)(c)
1998--
Institutional
Shares(b)....... 23.89(d) 74.97(d) 4,656 0.72(c) 0.42(c) 1.96(c) (0.82)(c)
1998--Service
Shares(b)....... 23.56(d) 74.97(d) 115 1.17(c) (0.21)(c) 2.41(c) (1.45)(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class A, Class B, Institutional and Service Share activity commenced on May
1, 1997. Class C Share activity commenced on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
12
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM DISTRIBUTIONS TO
INVESTMENT OPERATIONS(E) SHAREHOLDERS
------------------------- -----------------------
NET
REALIZED AND FROM NET
UNREALIZED REALIZED
NET ASSET NET GAIN (LOSS) ON FROM GAIN ON NET NET ASSET
VALUE, INVESTMENT INVESTMENT AND NET INVESTMENT INCREASE VALUE, PORTFOLIO
BEGINNING INCOME FUTURES INVESTMENT AND FUTURES IN NET END OF TOTAL TURNOVER
OF PERIOD (LOSS) TRANSACTIONS INCOME TRANSACTIONS ASSET VALUE PERIOD RETURN(A) RATE
--------- ---------- -------------- ---------- ------------ ----------- --------- --------- ---------
CORE SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $10.59 $ -- $0.11 $ -- $ -- $0.11 $10.70 1.04%(d) 16.06%(d)
1998--Class B
Shares.......... 10.56 (0.03) 0.10 -- -- 0.07 10.63 0.66(d) 16.06(d)
1998--Class C
Shares.......... 10.57 (0.03) 0.10 -- -- 0.07 10.64 0.66(d) 16.06(d)
1998--Institu-
tional Shares... 10.61 0.02 0.10 -- -- 0.12 10.73 1.13(d) 16.06(d)
1998--Service
Shares.......... 10.60 (0.01) 0.11 -- -- 0.10 10.70 0.94(d) 16.06(d)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1998--Class A
Shares(b)....... 10.00 (0.01) 0.65 -- (0.05) 0.59 10.59 6.37(d) 37.65(d)
1998--Class B
Shares(b)....... 10.00 (0.03) 0.64 -- (0.05) 0.56 10.56 6.07(d) 37.65(d)
1998--Class C
Shares(b)....... 10.00 (0.02) 0.64 -- (0.05) 0.57 10.57 6.17(d) 37.65(d)
1998--Institu-
tional
Shares(b)....... 10.00 0.01 0.65 -- (0.05) 0.61 10.61 6.57(d) 37.65(d)
1998--Service
Shares(b)....... 10.00 0.01 0.64 -- (0.05) 0.60 10.60 6.47(d) 37.65(d)
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER OF FEES
OR EXPENSE LIMITATIONS
---------------------------
RATIO
NET RATIO RATIO OF NET OF NET
ASSETS AT OF NET INVESTMENT RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS) EXPENSES TO INCOME (LOSS)
PERIOD TO AVERAGE TO AVERAGE AVERAGE NET TO AVERAGE
(IN 000S) NET ASSETS NET ASSETS ASSETS NET ASSETS
--------- ----------- ------------- ------------ --------------
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $20,989 1.25%(c) 0.07%(c) 2.14%(c) (0.82)%(c)
1998--Class B
Shares.......... 14,843 1.95(c) (0.62)(c) 2.64(c) (1.31)(c)
1998--Class C
Shares.......... 4,433 1.95(c) (0.62)(c) 2.64(c) (1.31)(c)
1998--Institu-
tional Shares... 44,614 0.95(c) 0.46 (c) 1.64(c) (0.23)(c)
1998--Service
Shares.......... 22 1.45(c) (0.40)(c) 2.14(c) (1.09)(c)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1998--Class A
Shares(b)....... 11,118 1.25(c) (0.36)(c) 3.92(c) (3.03)(c)
1998--Class B
Shares(b)....... 9,957 1.95(c) (1.04)(c) 4.37(c) (3.46)(c)
1998--Class C
Shares(b)....... 2,557 1.95(c) (1.07)(c) 4.37(c) (3.49)(c)
1998--Institu-
tional
Shares(b)....... 9,026 0.95(c) 0.15 (c) 3.37(c) (2.27)(c)
1998--Service
Shares(b)....... 2 1.45(c) 0.40 (c) 3.87(c) (2.02)(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Commenced operations on August 15, 1997.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
13
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------ -------------------------------------
IN EXCESS
NET OF NET
NET ASSET NET REALIZED AND IN EXCESS FROM NET REALIZED NET INCREASE
VALUE, INVESTMENT UNREALIZED FROM NET OF NET REALIZED GAIN GAIN ON (DECREASE) NET ASSET
BEGINNING INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT ON INVESTMENT INVESTMENT IN NET ASSET VALUE, END
OF PERIOD (LOSS) INVESTMENTS INCOME INCOME TRANSACTIONS TRANSACTIONS VALUE OF PERIOD
--------- ---------- -------------- ---------- ---------- ------------- ------------ ------------ ----------
CAPITAL GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $18.48 $(0.01) $3.32 $ -- $ -- $ -- $ -- $3.31 $21.79
1998--Class B
Shares.......... 18.27 (0.06) 3.26 -- -- -- -- 3.20 21.47
1998--Class C
Shares.......... 18.24 (0.05) 3.23 -- -- -- -- 3.18 21.42
1998--Institu-
tional Shares... 18.45 0.01 3.32 -- -- -- -- 3.33 21.78
1998--Service
Shares.......... 18.46 (0.02) 3.30 -- -- -- -- 3.28 21.74
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 16.73 0.02 4.78 (0.01) (0.01) (3.03) -- 1.75 18.48
1998--Class B
Shares.......... 16.67 0.02 4.61 -- -- (1.20) (1.83) 1.60 18.27
1998--Class C
Shares(b)....... 19.73 (0.02) 1.60 -- (0.04) (0.47) (2.56) (1.49) 18.24
1998--Institu-
tional
Shares(b)....... 19.88 0.02 1.66 (0.01) (0.07) (0.41) (2.62) (1.43) 18.45
1998--Service
Shares(b)....... 19.88 (0.01) 1.66 -- (0.04) (0.76) (2.27) (1.42) 18.46
- -----------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 14.91 0.10 3.56 (0.10) (0.02) (1.72) -- 1.82 16.73
1997--Class B
Shares(b)....... 15.67 0.01 2.81 (0.01) (0.09) (1.72) -- 1.00 16.67
- -----------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 13.67 0.12 3.93 (0.12) -- (2.69) -- 1.24 14.91
- -----------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 15.96 0.03 (0.69) (0.01) -- (1.62) -- (2.29) 13.67
- -----------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 14.64 0.02 2.40 (0.01) (0.02) (1.07) -- 1.32 15.96
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER
OF FEES
---------------------------
RATIO OF RATIO OF NET
NET ASSETS RATIO OF NET INVESTMENT RATIO OF INVESTMENT
PORTFOLIO AT END OF NET EXPENSES INCOME (LOSS) EXPENSES TO INCOME (LOSS)
TOTAL TURNOVER PERIOD TO AVERAGE TO AVERAGE AVERAGE NET TO AVERAGE
RETURN(A) RATE (IN 000S) NET ASSETS NET ASSETS ASSETS NET ASSETS
----------- ----------- ---------- ------------ --------------- ------------ --------------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 17.91%(d) 10.02%(d) $1,639,118 1.39%(c) (0.12)%(c) 1.64%(c) (0.37)%(c)
1998--Class B
Shares.......... 17.52(d) 10.02(d) 125,092 2.14(c) (0.92)(c) 2.14(c) (0.92)(c)
1998--Class C
Shares.......... 17.43(d) 10.02(d) 27,385 2.14(c) (0.94)(c) 2.14(c) (0.94)(c)
1998--Institu-
tional Shares... 18.05(d) 10.02(d) 15,248 1.10(c) 0.11 (c) 1.10(c) 0.11 (c)
1998--Service
Shares.......... 17.77(d) 10.02(d) 1,222 1.60(c) (0.44)(c) 1.60(c) (0.44)(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 29.71 61.50 1,256,595 1.40 0.08 1.65 (0.17)
1998--Class B
Shares.......... 28.73 61.50 40,827 2.18 (0.77) 2.18 (0.77)
1998--Class C
Shares(b)....... 8.83(d) 61.50 5,395 2.21(c) (0.86)(c) 2.21(c) (0.86)(c)
1998--Institu-
tional
Shares(b)....... 9.31(d) 61.50 7,262 1.16(c) 0.18 (c) 1.16(c) 0.18 (c)
1998--Service
Shares(b)....... 9.18(d) 61.50 2 1.50(c) (0.16)(c) 1.50(c) (0.16)(c)
- -----------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 25.97 52.92 920,646 1.40 0.62 1.65 0.37
1997--Class B
Shares(b)....... 19.39(d) 52.92 3,221 2.15(c) (0.39)(c) 2.15(c) (0.39)(c)
- -----------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 30.45 63.90 881,056 1.36 0.65 1.61 0.40
- -----------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... (4.38) 38.36 862,105 1.38 0.16 1.63 (0.09)
- -----------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 16.89 36.12 833,682 1.38 0.13 1.63 (0.12)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class B, Class C, Institutional and Service Share activity commenced on
May 1, 1996, August 15, 1997, August 15, 1997 and August 15, 1997,
respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
14
<PAGE>
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------------- ---------------------------------------------
NET REALIZED
AND UNREALIZED NET
GAIN (LOSS) ON FROM NET INCREASE NET
NET ASSET NET INVESTMENTS, IN EXCESS REALIZED (DECREASE) ASSET
VALUE, INVESTMENT OPTIONS AND FROM NET OF NET GAIN ON IN NET VALUE,
BEGINNING INCOME FOREIGN CURRENCY INVESTMENT INVESTMENT INVESTMENT ASSET END OF TOTAL
OF PERIOD (LOSS) RELATED TRANSACTIONS INCOME INCOME TRANSACTIONS VALUE PERIOD RETURN(A)
--------- ---------- -------------------- ---------- ---------- ------------ ---------- ------ ---------
MID CAP EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... $21.61 $0.03 $(0.79) $ -- $ -- $ -- $(0.76) $20.85 (3.52)%(d)
1998--Class B
Shares.......... 21.57 (0.02) (0.78) -- -- -- (0.80) 20.77 (3.71)(d)
1998--Class C
Shares.......... 21.59 (0.02) (0.79) -- -- -- (0.81) 20.78 (3.75)(d)
1998--Institu-
tional Shares... 21.65 0.09 (0.80) -- -- -- (0.71) 20.94 (3.28)(d)
1998--Service
Shares.......... 21.62 -- (0.75) -- -- -- (0.75) 20.87 (3.47)(d)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares(b)....... 23.63 0.09 0.76 (0.06) (0.04) (2.77) (2.02) 21.61 3.42(d)
1998--Class B
Shares(b)....... 23.63 0.06 0.74 (0.09) -- (2.77) (2.06) 21.57 3.17(d)
1998--Class C
Shares(b)....... 23.63 0.06 0.76 (0.09) -- (2.77) (2.04) 21.59 3.27(d)
1998--Institu-
tional Shares... 18.73 0.16 5.66 (0.13) -- (2.77) 2.92 21.65 30.86
1998--Service
Shares(b)....... 23.01 0.09 1.40 (0.11) -- (2.77) (1.39) 21.62 6.30(d)
- ----------------------------------------------------------------------------------------------------------------------------
1997--Institu-
tional Shares... 15.91 0.24 3.77 (0.24) (0.93) (0.02) 2.82 18.73 25.63
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1996--Institu-
tional
Shares(b)....... 15.00 0.13 0.90 (0.12) -- -- 0.91 15.91 6.89(d)
<CAPTION>
RATIOS ASSUMING NO
EXPENSE LIMITATIONS
------------------------
RATIO OF RATIO OF
NET NET RATIO OF RATIO OF
EXPENSES INVESTMENT EXPENSES NET
NET ASSETS TO INCOME TO INVESTMENT
PORTFOLIO AT END OF AVERAGE (LOSS) TO AVERAGE INCOME (LOSS)
TURNOVER PERIOD NET AVERAGE NET TO AVERAGE
RATE (IN 000S) ASSETS NET ASSETS ASSETS NET ASSETS
----------- ---------- ---------- ------------ ---------- -------------
MID CAP EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UN-
AUDITED),
- -------------------------------------
1998--Class A
Shares.......... 27.55%(d) $118,663 1.35%(c) 0.28%(c) 1.47%(c) 0.16%(c)
1998--Class B
Shares.......... 27.55(d) 46,268 1.85(c) (0.21)(c) 1.97(c) (0.33)(c)
1998--Class C
Shares.......... 27.55(d) 12,615 1.85(c) (0.21)(c) 1.97(c) (0.33)(c)
1998--Institu-
tional Shares... 27.55(d) 230,251 0.85(c) 0.79 (c) 0.97(c) 0.67 (c)
1998--Service
Shares.......... 27.55(d) 83 1.35(c) 0.18 (c) 1.47(c) 0.06 (c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares(b)....... 62.60 90,588 1.35(c) 0.33 (c) 1.47(c) 0.21 (c)
1998--Class B
Shares(b)....... 62.60 28,743 1.85(c) (0.20)(c) 1.97(c) (0.32)(c)
1998--Class C
Shares(b)....... 62.60 6,445 1.85(c) (0.23)(c) 1.97(c) (0.35)(c)
1998--Institu-
tional Shares... 62.60 236,440 0.85 0.78 0.97 0.66
1998--Service
Shares(b)....... 62.60 8 1.35(c) 0.63(c) 1.43(c) 0.51(c)
- ----------------------------------------------------------------------------------------------------------------------------
1997--Institu-
tional Shares... 74.03 145,253 0.85 1.35 0.91 1.29
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1996--Institu-
tional
Shares(b)....... 58.77(d) 135,671 0.85(c) 1.67(c) 0.98(c) 1.54(c)
</TABLE>
- -------------------------------------------------------------------------------
(a) Assumes Investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the
investment at the NAV at the end of the period and no sales or redemption
charges. Total return would be reduced if a sales or redemption charge
were taken into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on August 15, 1997, August 15, 1997, August 15, 1997, August 1,
1995 and July 18, 1997, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
15
<PAGE>
<TABLE>
<CAPTION>
INCOME (LOSS) FROM
INVESTMENT OPERATIONS(E) DISTRIBUTIONS TO SHAREHOLDERS
------------------------------- -------------------------------------
FROM NET
NET REALIZED REALIZED GAIN
NET ASSET NET AND UNREALIZED FROM ON INVESTMENT, IN EXCESS NET INCREASE
VALUE, INVESTMENT GAIN (LOSS) ON NET OPTIONS AND OF NET (DECREASE) NET ASSET
BEGINNING INCOME INVESTMENT AND INVESTMENT, FUTURES INVESTMENT IN NET ASSET VALUE, END
OF PERIOD (LOSS) OPTIONS TRANSACTIONS INCOME TRANSACTIONS INCOME VALUE OF PERIOD
--------- ---------- -------------------- ----------- -------------- ---------- ------------ ----------
SMALL CAP VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... $24.05 $(0.02) $(0.17) $ -- $ -- $ -- $(0.19) $23.86
1998--Class B
Shares.......... 23.73 (0.11) (0.17) -- -- -- (0.28) 23.45
1998--Class C
Shares.......... 23.73 (0.09) (0.19) -- -- -- (0.28) 23.45
1998--Institu-
tional Shares... 24.09 0.03 (0.18) -- -- -- (0.15) 23.94
1998--Service
Shares.......... 24.05 -- (0.19) -- -- -- (0.19) 23.86
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 20.91 0.14 5.33 -- (2.33) -- 3.14 24.05
1998--Class B
Shares.......... 20.80 (0.01) 5.27 -- (2.33) -- 2.93 23.73
1998--Class C
Shares(b)....... 24.69 (0.06) 1.43 -- (1.99) (0.34) (0.96) 23.73
1998--Institu-
tional
Shares(b)....... 24.91 0.03 1.48 -- (2.05) (0.28) (0.82) 24.09
1998--Service
Shares(b)....... 24.91 (0.01) 1.48 -- (2.02) (0.31) (0.86) 24.05
- ------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 17.29 (0.21) 4.92 -- (1.09) -- 3.62 20.91
1997--Class B
Shares(b)....... 20.79 (0.11) 1.21 -- (1.09) -- 0.01 20.80
- ------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 16.14 (0.23) 1.39 -- (0.01) -- 1.15 17.29
- ------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... 20.67 (0.07) (3.53) -- (0.69) (0.24) (4.53) 16.14
- ------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 16.68 (0.04) 5.03 -- (1.00) -- 3.99 20.67
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1993--Class A
Shares(b)....... 14.18 0.03 2.50 (0.03) -- -- 2.50 16.68
<CAPTION>
RATIOS ASSUMING NO
VOLUNTARY WAIVER
OF FEES
----------------------------
RATIO OF RATIO OF
NET ASSETS RATIO OF NET INVESTMENT RATIO OF NET INVESTMENT
PORTFOLIO AT END OF NET EXPENSES INCOME (LOSS) TO EXPENSES TO INCOME (LOSS)
TOTAL TURNOVER PERIOD TO AVERAGE AVERAGE NET AVERAGE TO AVERAGE NET
RETURN(A) RATE (IN 000S) NET ASSETS ASSETS NET ASSETS ASSETS
------------- ----------- ---------- ------------ ---------------- ------------ ---------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31 (UNAUDITED),
- ---------------------------------------------
1998--Class A
Shares.......... (0.79)%(d) 46.40%(d) $402,797 1.50%(c) (0.16)%(c) 1.75%(c) (0.41)%(c)
1998--Class B
Shares.......... (1.18)(d) 46.40(d) 54,241 2.25(c) (0.90)(c) 2.25(c) (0.90)(c)
1998--Class C
Shares.......... (1.18)(d) 46.40(d) 9,308 2.25(c) (0.88)(c) 2.25(c) (0.88)(c)
1998--Institu-
tional Shares... (0.62)(d) 46.40(d) 18,197 1.15(c) 0.21(c) 1.15(c) 0.21(c)
1998--Service
Shares.......... (0.79)(d) 46.40(d) 76 1.65(c) (0.09)(c) 1.65(c) (0.09)(c)
FOR THE YEARS ENDED JANUARY 31,
- -------------------------------
1998--Class A
Shares.......... 26.17 84.81 370,246 1.54 (0.28) 1.76 (0.50)
1998--Class B
Shares.......... 25.29 84.81 42,677 2.29 (0.92) 2.29 (0.92)
1998--Class C
Shares(b)....... 5.51(d) 84.81 5,604 2.09(c) (0.79)(c) 2.09(c) (0.79)(c)
1998--Institu-
tional
Shares(b)....... 6.08(d) 84.81 14,626 1.16(c) 0.27(c) 1.16(c) 0.27(c)
1998--Service
Shares(b)....... 5.91(d) 84.81 2 1.45(c) (0.07)(c) 1.45(c) (0.07)(c)
- ------------------------------------------------------------------------------------------------------------------------
1997--Class A
Shares.......... 27.28 99.46 212,061 1.60 (0.72) 1.85 (0.97)
1997--Class B
Shares(b)....... 5.39(d) 99.46 3,674 2.35(c) (1.63)(c) 2.35(c) (1.63)(c)
- ------------------------------------------------------------------------------------------------------------------------
1996--Class A
Shares.......... 7.20 57.58 204,994 1.41 (0.59) 1.66 (0.84)
- ------------------------------------------------------------------------------------------------------------------------
1995--Class A
Shares.......... (17.53) 43.67 319,487 1.53 (0.53) 1.78 (0.78)
- ------------------------------------------------------------------------------------------------------------------------
1994--Class A
Shares.......... 30.13 56.81 261,074 1.60 (0.45) 1.85 (0.70)
FOR THE PERIOD ENDED JANUARY 31,
- --------------------------------
1993--Class A
Shares(b)....... 17.86(d) 7.12 59,339 1.65(c) 0.62(c) 2.70(c) (0.43)(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) Assumes investment at the NAV at the beginning of the period, reinvestment
of all dividends and distributions, a complete redemption of the investment
at the NAV at the end of the period and no sales or redemption charges.
Total return would be reduced if a sales or redemption charge were taken
into account.
(b) Class A, Class B, Class C, Institutional and Service Share activity
commenced on October 22, 1992, May 1, 1996, August 15, 1997, August 15,
1997 and August 15, 1997, respectively.
(c) Annualized.
(d) Not annualized.
(e) Includes the balancing effect of calculating per Share amounts.
16
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and principal investment policies of each Fund are
described below. Other investment practices and management techniques, which
involve certain risks are described under "Description of Securities," "Risk
Factors" and "Investment Techniques." There can be no assurance that a Fund's
investment objectives will be achieved.
The Investment Adviser may purchase for the Funds common stocks, preferred
stocks, interests in real estate investment trusts, convertible debt
obligations, convertible preferred stocks, equity interests in trusts,
partnerships, joint ventures, limited liability companies and similar
enterprises, warrants and stock purchase rights ("equity securities"). In
choosing a Fund's securities, the Investment Adviser utilizes first-hand
fundamental research, including visiting company facilities to assess
operations and to meet decision-makers. The Investment Adviser may also use
macro analysis of numerous economic and valuation variables to anticipate
changes in company earnings and the overall investment climate. The Investment
Adviser is able to draw on the research and market expertise of the Goldman
Sachs Global Investment Research Department and other affiliates of the
Investment Adviser, as well as information provided by other securities
dealers. Equity securities in a Fund's portfolio will generally be sold when
the Investment Adviser believes that the market price fully reflects or
exceeds the securities' fundamental valuation or when other more attractive
investments are identified.
Value Style Funds. The Growth and Income, Mid Cap Equity, Small Cap Value
Funds and the equity portion of the Balanced Fund are managed using a value
oriented approach. The Investment Adviser evaluates securities using
fundamental analysis and intends to purchase equity securities that are, in
its view, underpriced relative to a combination of such companies' long-term
earnings prospects, growth rate, free cash flow and/or dividend-paying
ability. Consideration will be given to the business quality of the issuer.
Factors positively affecting the Investment Adviser's view of that quality
include the competitiveness and degree of regulation in the markets in which
the company operates, the existence of a management team with a record of
success, the position of the company in the markets in which it operates, the
level of the company's financial leverage and the sustainable return on
capital invested in the business. The Funds may also purchase securities of
companies that have experienced difficulties and that, in the opinion of the
Investment Adviser, are available at attractive prices.
Growth Style Funds. The Capital Growth Fund is managed using a growth equity
oriented approach. Equity securities for this Fund is selected based on their
prospects for above average growth. The Investment Adviser will select
securities of growth companies trading, in the Investment Adviser's opinion,
at a reasonable price relative to other industries, competitors and historical
price/earnings multiples. The Fund generally will invest in companies whose
earnings are believed to be in a relatively strong growth trend, or, to a
lesser extent, in companies in which significant further growth is not
anticipated but whose market value per share is thought to be undervalued. In
order to determine whether a security has favorable growth prospects, the
Investment Adviser ordinarily looks for one or more of the following
characteristics in relation to the security's prevailing price: prospects for
above average sales and earnings growth per share; high return on invested
capital; free cash flow generation; sound balance sheet, financial and
accounting policies, and overall financial strength; strong competitive
advantages; effective research, product development, and marketing; pricing
flexibility; strength of management; and general operating characteristics
that will enable the company to compete successfully in its marketplace.
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Quantitative Style Funds. The CORE Large Cap Value, CORE U.S. Equity, CORE
Large Cap Growth and CORE Small Cap Equity Funds (the "CORE Funds") are
managed using both quantitative and fundamental techniques. CORE is an acronym
for "Computer-Optimized, Research-Enhanced," which reflects the CORE Funds'
investment process. This investment process and the proprietary multifactor
model used to implement it are discussed below.
Investment Process. The Investment Adviser begins with a broad universe of
U.S. equity securities for the CORE Funds. As described more fully below, the
Investment Adviser uses a proprietary multifactor model (the "Multifactor
Model") to forecast the returns of different markets and individual
securities. In the case of an equity security followed by the Goldman Sachs
Global Investment Research Department (the "Research Department"), a rating is
assigned based upon the Research Department's evaluation. In the discretion of
the Investment Adviser, ratings may also be assigned to equity securities
based on research ratings obtained from other industry sources.
In building a diversified portfolio for each CORE Fund, the Investment
Adviser utilizes optimization techniques to seek to maximize the Fund's
expected return, while maintaining a risk profile similar to the Fund's
benchmark. Each portfolio is primarily comprised of securities rated highest
by the foregoing investment process and has risk characteristics and industry
weightings similar to the relevant Fund's benchmark.
Multifactor Model. The Multifactor Model is a rigorous computerized rating
system for forecasting the returns of different equity markets and individual
equity securities according to fundamental investment characteristics. The
CORE Funds use the Multifactor Model to forecast the returns of securities
held in each Fund's portfolio. The Multifactor Model incorporates common
variables covering measures of value, growth, momentum and risk (e.g.,
book/price ratio, earnings/price ratio, price momentum, price volatility,
consensus growth forecasts, earnings estimate revisions and earnings
stability). All of the factors used in the Multifactor Model have been shown
to significantly impact the performance of the securities and markets they
were designed to forecast.
The weightings assigned to the factors in the Multifactor Model used by the
CORE Funds are derived using a statistical formulation that considers each
factor's historical performance in different market environments. As such, the
Multifactor Model is designed to evaluate each security using only the factors
that are statistically related to returns in the anticipated market
environment. Because it includes many disparate factors, the Investment
Adviser believes that the Multifactor Model is broader in scope and provides a
more thorough evaluation than most conventional, quantitative models.
Securities and markets ranked highest by the Multifactor Model do not have one
dominant investment characteristic; rather, they possess an attractive
combination of investment characteristics.
Research Department. In assigning ratings to equity securities, the Research
Department uses a four category rating system ranging from "recommended for
purchase" to "likely to underperform." The ratings reflect the analyst's
judgment as to the investment results of a specific security and incorporate
economic outlook, valuation, risk and a variety of other factors.
By employing both a quantitative (i.e., the Multifactor Model) and a
qualitative (i.e., research enhanced) method of selecting securities, the CORE
Funds seek to capitalize on the strengths of each discipline.
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BALANCED FUND
Objective. The Fund's investment objective is to provide investors with
long-term capital growth and current income. The Fund seeks capital
appreciation primarily through the equity component of its portfolio while
investing in fixed income securities primarily to provide income for regular
quarterly dividends.
Primary Investment Focus. The Fund invests, under normal circumstances,
between 45% and 65% of its total assets in equity securities. The Fund also
invests at least 25% of its total assets in fixed-income senior securities and
the remainder of its assets in other fixed income securities and cash. The
percentage of the portfolio invested in equity and fixed-income securities
will vary from time to time as the Investment Adviser evaluates their relative
attractiveness based on market valuations, economic growth and inflation
prospects. This allocation is subject to the Fund's intention to pay regular
quarterly dividends. The amount of quarterly dividends can also be expected to
fluctuate in accordance with factors such as prevailing interest rates and the
percentage of the Fund's assets invested in fixed-income securities.
Other. Although the Fund's equity investments consist primarily of publicly
traded U.S. securities, the Fund may invest up to 10% of its total assets in
the equity securities of foreign issuers, including issuers in Emerging
Countries and equity securities quoted in foreign currencies. A portion of the
Fund's portfolio of equity securities may be selected primarily to provide
current income. Equity securities selected to provide current income may
include interests in real estate investment trusts, convertible securities,
preferred stocks, utility stocks and interests in limited partnerships.
The Fund's fixed-income securities primarily include securities issued by
the U.S. Government, its agencies, instrumentalities or sponsored enterprises,
corporations or other entities, mortgage-backed and asset-backed securities,
municipal securities and custodial receipts. The Fund may also invest in debt
obligations (U.S. dollar and non-U.S. dollar denominated) issued or guaranteed
by one or more foreign governments or any of their political subdivisions,
agencies or instrumentalities and foreign corporations or other entities. Such
securities are collectively referred to herein as "fixed-income securities."
The Fund's investments in fixed-income securities that are issued by foreign
issuers, including issuers in Emerging Countries, may not exceed 10% of the
Fund's total assets. The Fund may employ certain currency techniques to seek
to hedge against currency exchange rate fluctuations or to seek to increase
total return. When used to seek to enhance return, these management techniques
are considered speculative. Such currency management techniques involve risks
different from those associated with investing solely in securities of U.S.
issuers quoted in U.S. dollars. See "Description of Securities," "Investment
Techniques" and "Risk Factors."
GROWTH AND INCOME FUND
Objectives. The Fund's investment objectives are to provide investors with
long-term growth of capital and growth of income.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 65% of its total assets in equity securities that the Investment Adviser
considers to have favorable prospects for capital appreciation and/or
dividend-paying ability.
Other. The Fund may invest up to 35% of its total assets in fixed-income
securities that, in the opinion of the Investment Adviser, offer the potential
to further the Fund's investment objectives. In addition, although the Fund
will invest primarily in publicly traded U.S. securities, it may invest up to
25% of its total assets in foreign securities, including securities of issuers
in Emerging Countries and securities quoted in foreign currencies.
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CORE LARGE CAP VALUE FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital and dividend income. The Fund seeks to achieve its
objective through a broadly diversified portfolio of equity securities of
large cap U.S. issuers that are selling at low to modest valuations relative
to general market measures such as earnings, book value and other fundamental
accounting measures, and that are expected to have favorable prospects for
capital appreciation and/or dividend-paying ability.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the Russell 1000 Value Index. The Fund seeks a portfolio comprised of
companies with above average capitalizations and low to moderate valuations as
measured by price/earnings ratios, book value and other fundamental accounting
measures. The Fund may invest only in fixed-income securities that are
considered cash equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CORE U.S. EQUITY FUND (FORMERLY, THE "SELECT EQUITY FUND")
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital and dividend income. The Fund seeks to achieve its
objective through a broadly diversified portfolio of large cap and blue chip
equity securities representing all major sectors of the U.S. economy.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the S&P 500 Index. The Fund seeks a broad representation in most major
sectors of the U.S. economy and a portfolio comprised of companies with
average long-term earnings growth expectations and dividend yields. The Fund
may invest only in fixed-income securities that are considered cash
equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CORE LARGE CAP GROWTH FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital. The Fund seeks to achieve its objective through a
broadly diversified portfolio of equity securities of large cap U.S. issuers
that are expected to have better prospects for earnings growth than the growth
rate of the general domestic economy. Dividend income is a secondary
consideration.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Investment
Adviser emphasizes a company's growth prospects in analyzing equity securities
to be purchased by
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the Fund. The Fund's investments are selected using both a variety of
quantitative techniques and fundamental research in seeking to maximize the
Fund's expected return, while maintaining risk, style, capitalization and
industry characteristics similar to the Russell 1000 Growth Index. The Fund
seeks a portfolio comprised of companies with above average capitalizations
and earnings growth expectations and below average dividend yields. The Fund
may invest only in fixed-income securities that are considered cash
equivalents.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CORE SMALL CAP EQUITY FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital. The Fund seeks to achieve its objective through a
broadly diversified portfolio of equity securities of U.S. issuers which are
included in the Russell 2000 Index at the time of investment.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities of U.S. issuers, including
certain foreign issuers that are traded in the United States. The Fund's
investments are selected using both a variety of quantitative techniques and
fundamental research in seeking to maximize the Fund's expected return, while
maintaining risk, style, capitalization and industry characteristics similar
to the Russell 2000 Index. The Fund seeks a portfolio comprised of companies
with small market capitalizations, strong expected earnings growth and
momentum, and better valuation and risk characteristics than the Russell 2000
Index. The Fund may invest only in fixed-income securities that are considered
cash equivalents.
The Investment Adviser believes that companies in which the Fund may invest
offer greater opportunity for growth of capital than larger, more mature,
better known companies. Investments in small market capitalization issuers
involve special risks. See "Description of Securities" and "Risk Factors." If
the issuer of a portfolio security held by the Fund is no longer included in
the Russell 2000 Index, the Fund may, but is not required to, sell the
security.
For a description of the investment process of the Fund, see "Investment
Objectives and Policies--Quantitative Style Funds."
CAPITAL GROWTH FUND
Objective. The Fund's investment objective is to provide investors with
long-term growth of capital.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 90% of its total assets in equity securities. The Fund seeks to achieve
its investment objective by investing in a diversified portfolio of equity
securities that are considered by the Investment Adviser to have long-term
capital appreciation potential.
Other. Although the Fund will invest primarily in publicly traded U.S.
securities, it may invest up to 10% of its total assets in foreign securities,
including securities of issuers in Emerging Countries and securities quoted in
foreign currencies.
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MID CAP EQUITY FUND
Objective. The Fund's investment objective is to provide investors with
long-term capital appreciation.
Primary Investment Focus. The Fund invests, under normal circumstances,
substantially all of its assets in equity securities and at least 65% of its
total assets in equity securities of Mid-Cap Companies with public stock
market capitalizations (based upon shares available for trading on an
unrestricted basis) within the range of the market capitalization of companies
constituting the Russell Midcap Index at the time of investment (currently
between $400 million and $16 billion). If the capitalization of an issuer
increases above $16 billion after purchase of such issuer's securities, the
Fund may, but is not required to, sell the securities. Dividend income, if
any, is an incidental consideration.
Other. The Fund may invest up to 35% of its total assets in fixed-income
securities. In addition, although the Fund will invest primarily in publicly
traded U.S. securities, it may invest up to 25% of its total assets in foreign
securities, including securities of issuers in Emerging Countries and
securities quoted in foreign currencies.
SMALL CAP VALUE FUND (FORMERLY, THE "SMALL CAP EQUITY FUND")
Objective. The Fund's investment objective is to provide investors with
long-term capital growth.
Primary Investment Focus. The Fund invests, under normal circumstances, at
least 65% of its total assets in equity securities of companies with public
stock market capitalizations of $1 billion or less at the time of investment.
Under normal circumstances, the Fund's investment horizon for ownership of
stocks will be two to three years. Dividend income, if any, is an incidental
consideration. If the market capitalization of a company held by the Fund
increases above the amount stated above, the Fund may, consistent with its
investment objective, continue to hold the security.
Small Capitalization Companies. The Fund invests in companies which the
Investment Adviser believes are well managed niche businesses that have the
potential to achieve high or improving returns on capital and/or above average
sustainable growth. The Fund may invest in securities of small market
capitalization companies which may have experienced financial difficulties.
Investments may also be made in companies that are in the early stages of
their life and that the Investment Adviser believes have significant growth
potential. The Investment Adviser believes that the companies in which the
Fund may invest offer greater opportunity for growth of capital than larger,
more mature, better known companies. However, investments in such small market
capitalization companies involve special risks. See "Description of
Securities" and "Risk Factors."
Other. The Fund may invest in the aggregate up to 35% of its total assets in
the equity securities of companies with public stock market capitalizations in
excess of $1 billion at the time of investment and in fixed- income
securities. In addition, although the Fund will invest primarily in publicly
traded U.S. securities, it may invest up to 25% of its total assets in foreign
securities, including securities of issuers in Emerging Countries and
securities quoted in foreign currencies.
DESCRIPTION OF SECURITIES
The Funds may invest in equity and fixed income securities in accordance
with the investment policies stated above. Certain of these permitted
investments are described in more detail in this section.
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CONVERTIBLE SECURITIES
Each Fund may invest in convertible securities, including debt obligations
and preferred stock of the issuer convertible at a stated exchange rate into
common stock of the issuer. Convertible securities generally offer lower
interest or dividend yields than non-convertible securities of similar
quality. As with all fixed-income securities, the market value of convertible
securities tends to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, when the market price of the
common stock underlying a convertible security exceeds the conversion price,
the convertible security tends to reflect the market price of the underlying
common stock. As the market price of the underlying common stock declines, the
convertible security tends to trade increasingly on a yield basis, and thus
may not decline in price to the same extent as the underlying common stock.
Convertible securities rank senior to common stocks in an issuer's capital
structure and consequently entail less risk than the issuer's common stock. In
evaluating a convertible security, the Investment Adviser will give primary
emphasis to the attractiveness of the underlying common stock. The convertible
debt securities in which the Balanced Fund invests will be rated, at the time
of investment, B or better by Standard & Poor's Ratings Group ("Standard &
Poor's") or Moody's Investors Service, Inc. ("Moody's"), or if unrated by such
rating organizations, determined to be of comparable quality by the Investment
Adviser. The convertible securities in which the CORE Funds invest are not
subject to any minimum rating criteria. The convertible debt securities in
which the other Funds may invest are subject to the same rating criteria as a
Fund's investments in non-convertible debt securities. Convertible debt
securities are equity investments for purposes of each Fund's investment
policies.
FOREIGN INVESTMENTS
FOREIGN SECURITIES. Each Fund may invest in the securities of foreign
issuers (provided that the CORE Funds may only invest in equity securities of
foreign issuers that are traded in the U.S.). Investments in foreign
securities may offer potential benefits that are not available from
investments exclusively in equity securities of domestic issuers quoted in
U.S. dollars. Foreign countries may have economic policies or business cycles
different from those of the U.S. and markets for foreign securities do not
necessarily move in a manner parallel to U.S. markets.
Investing in the securities of foreign issuers involves certain special
risks, including those set forth below, which are not typically associated
with investing in U.S. dollar denominated or quoted securities of U.S.
issuers. Such investments may be affected by changes in currency rates,
changes in foreign or U.S. laws or restrictions applicable to such investments
and in exchange control regulations (e.g., currency blockage). A decline in
the exchange rate of the currency (i.e., weakening of the currency against the
U.S. dollar) in which a portfolio security is quoted or denominated relative
to the U.S. dollar would reduce the value of the portfolio security. In
addition, if the currency in which a Fund receives dividends, interest or
other payments declines in value against the U.S. dollar before such income is
distributed as dividends to shareholders or converted to U.S. dollars, the
Fund may have to sell portfolio securities to obtain sufficient cash to pay
such dividends. The expected introduction of a single currency, the euro, on
January 1, 1999 for participating European nations in the Economic and
Monetary Union ("EU") presents unique uncertainties, including whether the
payment and operational systems of banks and other financial institutions will
be ready by the scheduled launch date; the creation of suitable clearing and
settlement payment systems for the new currency; the legal treatment of
certain outstanding financial contracts after January 1, 1999 that refer to
existing currencies rather than the euro; the establishment and maintenance of
exchange rates for currencies being converted into the euro and the euro; the
fluctuation of the euro relative to non-euro currencies during the transition
period from January 1, 1999 to December 31, 2000 and beyond; whether the
interest rate, tax and labor regimes of European countries
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participating in the euro will converge over time; and whether the conversion
of the currencies of other EU countries such as the United Kingdom, Denmark
and Greece into the euro and the admission of other non-EU countries such as
Poland, Latvia and Lithuania as members of the EU may have an impact on the
euro. These or other factors, including political and economic risks, could
cause market disruptions before or after the introduction of the euro, and
could adversely affect the value of securities and foreign currencies held by
the Funds. Commissions on transactions in foreign securities may be higher
than those for similar transactions on domestic stock markets. In addition,
clearance and settlement procedures may be different in foreign countries and,
in certain markets, such procedures have been unable to keep pace with the
volume of securities transactions, thus making it difficult to conduct such
transactions.
Foreign issuers are not generally subject to uniform accounting, auditing
and financial reporting standards comparable to those applicable to U.S.
issuers. There may be less publicly available information about a foreign
issuer than about a U.S. issuer. In addition, there is generally less
government regulation of foreign markets, companies and securities dealers
than in the United States. Foreign securities markets may have substantially
less volume than U.S. securities markets and securities of many foreign
issuers are less liquid and more volatile than securities of comparable
domestic issuers. Furthermore, with respect to certain foreign countries,
there is a possibility of nationalization, expropriation or confiscatory
taxation, imposition of withholding or other taxes on dividend or interest
payments (or, in some cases, capital gains), limitations on the removal of
funds or other assets of the Funds, political or social instability or
diplomatic developments which could affect investments in those countries.
INVESTMENTS IN ADRS, EDRS AND GDRS. Each Fund may invest in foreign
securities which take the form of sponsored and unsponsored American
Depository Receipts ("ADRs") and Global Depository Receipts ("GDRs") and each
Fund, other than the CORE Funds, may also invest in European Depository
Receipts ("EDRs") or other similar instruments representing securities of
foreign issuers (together, "Depository Receipts"). ADRs represent the right to
receive securities of foreign issuers deposited in a domestic bank or a
correspondent bank. Prices of ADRs are quoted in U.S. dollars, and ADRs are
traded in the United States on exchanges or over-the-counter and are sponsored
and issued by domestic banks. EDRs and GDRs are receipts evidencing an
arrangement with a non-U.S. bank. EDRs and GDRs are not necessarily quoted in
the same currency as the underlying security. To the extent a Fund acquires
Depository Receipts through banks which do not have a contractual relationship
with the foreign issuer of the security underlying the Depository Receipts to
issue and service such Depository Receipts (unsponsored Depository Receipts),
there may be an increased possibility that the Fund would not become aware of
and be able to respond to corporate actions, such as stock splits or rights
offerings involving the foreign issuer, in a timely manner. In addition, the
lack of information may result in inefficiencies in the valuation of such
instruments. Investment in Depository Receipts does not eliminate all the
risks inherent in investing in securities of non-U.S. issuers. The market
value of Depository Receipts is dependent upon the market value of the
underlying securities and fluctuations in the relative value of the currencies
in which the Depository Receipt and the underlying securities are quoted.
However, by investing in Depository Receipts, such as ADRs, that are quoted in
U.S. dollars, a Fund may avoid currency risks during the settlement period for
purchases and sales.
FOREIGN CURRENCY TRANSACTIONS. Because investment in foreign issuers will
usually involve currencies of foreign countries, and because the Balanced Fund
may have currency exposure independent of its securities positions, the value
of the assets of a Fund as measured in U.S. dollars will be affected by
changes in foreign currency exchange rates. A Fund may, to the extent it
invests in foreign securities, purchase or sell foreign currencies on a spot
basis and may also purchase or sell forward foreign currency exchange
contracts for hedging
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purposes and to seek to protect against anticipated changes in future foreign
currency exchange rates. In addition, the Balanced Fund may enter into such
contracts to seek to increase total return when the Investment Adviser
anticipates that the foreign currency will appreciate or depreciate in value,
but securities denominated or quoted in that currency do not present
attractive investment opportunities and are not held in the Fund's portfolio.
When entered into to seek to enhance return, forward foreign currency exchange
contracts are considered speculative. The Balanced Fund may also engage in
cross-hedging by using forward contracts in a currency different from that in
which the hedged security is denominated or quoted if the Investment Adviser
determines that there is a pattern of correlation between the two currencies.
If a Fund enters into a forward foreign currency exchange contract to buy
foreign currency for any purpose or the Balanced Fund enter into forward
foreign currency exchange contracts to sell foreign currency to seek to
increase total return, the Fund will segregate cash or liquid assets in an
amount equal to the value of the Fund's total assets committed to the
consummation of the forward contract, or otherwise cover its position in a
manner permitted by the SEC. The Fund will incur costs in connection with
conversions between various currencies. A Fund may hold foreign currency
received in connection with investments in foreign securities when, in the
judgment of the Investment Adviser, it would be beneficial to convert such
currency into U.S. dollars at a later date, based on anticipated changes in
the relevant exchange rate.
Currency exchange rates may fluctuate significantly over short periods of
time causing, along with other factors, a Fund's NAV to fluctuate. Currency
exchange rates generally are determined by the forces of supply and demand in
the foreign exchange markets and the relative merits of investments in
different countries, actual or anticipated changes in interest rates and other
complex factors, as seen from an international perspective. Currency exchange
rates also can be affected unpredictably by the intervention of U.S. or
foreign governments or central banks, or the failure to intervene, or by
currency controls or political developments in the U.S. or abroad. To the
extent that a substantial portion of a Fund's total assets, adjusted to
reflect the Fund's net position after giving effect to currency transactions,
is denominated or quoted in the currencies of foreign countries, the Fund will
be more susceptible to the risk of adverse economic and political developments
within those countries.
The market in forward foreign currency exchange contracts, currency swaps
and other privately negotiated currency instruments offers less protection
against defaults by the other party to such instruments than is available for
currency instruments traded on an exchange. Such contracts are subject to the
risk that the counterparty to the contract will default on its obligations.
Since these contracts are not guaranteed by an exchange or clearinghouse, a
default on the contract would deprive the Fund of unrealized profits,
transaction costs or the benefits of a currency hedge or force the Fund to
cover its purchase or sale commitments, if any, at the current market price. A
Fund will not enter into forward foreign currency exchange contracts, currency
swaps or other privately negotiated currency instruments unless the credit
quality of the unsecured senior debt or the claims-paying ability of the
counterparty is considered to be investment grade by the Investment Adviser.
The Balanced Fund may also engage in a variety of foreign currency
management techniques. For a discussion of such instruments and the risks
associated with their use, see "Investment Objective and Policies" in the
Additional Statement.
FIXED-INCOME SECURITIES
U.S. GOVERNMENT SECURITIES. Each Fund may invest in U.S. Government
securities. Generally, these securities include U.S. Treasury obligations and
obligations issued or guaranteed by U.S. Government agencies,
instrumentalities or sponsored enterprises. U.S. Government securities also
include Treasury receipts and other
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stripped U.S. Government securities, where the interest and principal
components of stripped U.S. Government securities are traded independently. A
Fund may also invest in zero coupon U.S. Treasury securities and in zero
coupon securities issued by financial institutions, which represent a
proportionate interest in underlying U.S. Treasury securities. A zero coupon
security pays no interest to its holder during its life and its value consists
of the difference between its face value at maturity and its cost. The market
prices of zero coupon securities generally are more volatile than the market
prices of securities that pay interest periodically. See "Taxation" in the
Additional Statement.
FOREIGN GOVERNMENT SECURITIES. The Balanced Fund may invest in debt
obligations of foreign governments and governmental agencies, including those
of Emerging Countries. Investment in sovereign debt obligations involves
special risks not present in debt obligations of corporate issuers. The issuer
of the debt or the governmental authorities that control the repayment of the
debt may be unable or unwilling to repay principal or interest when due in
accordance with the terms of such debt, and the Fund may have limited recourse
in the event of a default. Periods of economic uncertainty may result in the
volatility of market prices of sovereign debt, and in turn the Fund's NAV, to
a greater extent than the volatility inherent in debt obligations of U.S.
issuers. A sovereign debtor's willingness or ability to repay principal and
pay interest in a timely manner may be affected by, among other factors, its
cash flow situation, the extent of its foreign currency reserves, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of the debt service burden to the economy as a whole, the
sovereign debtor's policy toward international lenders and the political
constraints to which a sovereign debtor may be subject.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. Each Fund (other than the CORE
Funds) may invest in mortgage-backed securities ("Mortgage-Backed
Securities"), which represent direct or indirect participations in, or are
collateralized by and payable from, mortgage loans secured by real property.
Each Fund (other than the CORE Funds) may also invest in asset-backed
securities ("Asset-Backed Securities"). The principal and interest payments on
Asset-Backed Securities are collateralized by pools of assets such as auto
loans, credit card receivables, leases, installment contracts and personal
property. Such asset pools are securitized through the use of special purpose
trusts or corporations. Principal and interest payments may be credit enhanced
by a letter of credit, a pool insurance policy or a senior/subordinated
structure.
The Balanced Fund may also invest in stripped Mortgage-Backed Securities
("SMBS") (including interest only and principal only securities), which are
derivative multiple class Mortgage-Backed Securities. SMBS are usually
structured with two different classes: one that receives 100% of the interest
payments and the other that receives 100% of the principal payments from a
pool of mortgage loans. If the underlying mortgage loans experience different
than anticipated prepayments of principal, the Fund may fail to recoup fully
its initial investment in these securities. The market value of the class
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates. The yields on a class of SMBS that
receives all or most of the interest from mortgage loans are generally higher
than prevailing market yields on other Mortgage-Backed Securities because
their cash flow patterns are more volatile and there is a greater risk that
the initial investment will not be fully recouped. The Fund's investments in
SMBS may require the Fund to sell portfolio securities to generate sufficient
cash to satisfy certain income distribution requirements.
CORPORATE DEBT OBLIGATIONS. Each Fund may invest in corporate debt
obligations. Corporate debt obligations are subject to the risk of an issuer's
inability to meet principal and interest payments on the obligations.
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BANK OBLIGATIONS. Each Fund may invest in obligations issued or guaranteed
by U.S. or foreign banks. Bank obligations, including without limitations,
time deposits, bankers' acceptances and certificates of deposit, may be
general obligations of the parent bank or may be limited to the issuing branch
by the terms of the specific obligations or by government regulation. Banks
are subject to extensive but different governmental regulations which may
limit both the amount and types of loans which may be made and interest rates
which may be charged. In addition, the profitability of the banking industry
is largely dependent upon the availability and cost of funds for the purpose
of financing lending operations under prevailing money market conditions.
General economic conditions as well as exposure to credit losses arising from
possible financial difficulties of borrowers play an important part in the
operation of this industry.
STRUCTURED SECURITIES. Each Fund may invest in structured securities. The
value of the principal of and/or interest on such securities is determined by
reference to changes in the value of specific currencies, interest rates,
commodities, indices or other financial indicators (the "Reference") or the
relative change in two or more References. The interest rate or the principal
amount payable upon maturity or redemption may be increased or decreased
depending upon changes in the applicable Reference. The terms of the
structured securities may provide that in certain circumstances no principal
is due at maturity and, therefore, result in the loss of a Fund's investment.
Structured securities may be positively or negatively indexed, so that
appreciation of the Reference may produce an increase or decrease in the
interest rate or value of the security at maturity. In addition, changes in
the interest rates or the value of the security at maturity may be a multiple
of changes in the value of the Reference. Consequently, structured securities
may entail a greater degree of market risk than other types of fixed-income
securities. Structured securities may also be more volatile, less liquid and
more difficult to price accurately than less complex securities.
RATING CRITERIA. Except as noted below, each Fund (other than the CORE
Funds, which only invest in debt instruments that are cash equivalents) may
invest in debt securities rated at least investment grade at the time of
investment. Investment grade debt securities are securities rated BBB or
higher by Standard & Poor's or Baa or higher by Moody's. A security will be
deemed to have met a rating requirement if it receives the minimum required
rating from at least one such rating organization even though it has been
rated below the minimum rating by one or more other rating organizations, or
if unrated by such rating organizations, determined by the Investment Adviser
to be of comparable credit quality. The Balanced Fund may invest up to 10% of
its total assets on debt securities that are rated BB or B by Standard &
Poor's or Ba or B by Moody's. The Growth and Income, Capital Growth and Small
Cap Value Funds may invest up to 10%, 10% and 35%, respectively, of their
total assets in debt securities which are unrated or rated in the lowest
rating categories by Standard & Poor's or Moody's (i.e., BB or lower by
Standard & Poor's or Ba or lower by Moody's), including securities rated D by
Moody's or Standard & Poor's. Mid Cap Equity Fund may invest up to 10% of its
total assets in below investment grade debt securities rated B or higher by
Standard & Poor's or B or higher by Moody's. Fixed-income securities rated BBB
or Baa are considered medium-grade obligations with speculative
characteristics, and adverse economic conditions or changing circumstances may
weaken their issuers' capacity to pay interest and repay principal. Fixed-
income securities rated BB or Ba or below (or comparable unrated securities)
are commonly referred to as "junk bonds," are considered predominately
speculative and may be questionable as to principal and interest payments. In
some cases, such bonds may be highly speculative, have poor prospects for
reaching investment grade standing and be in default. As a result, investment
in such bonds will entail greater speculative risks than those associated with
investment in investment grade bonds. Also, to the extent that the rating
assigned to a security in a Fund's portfolio is downgraded by a rating
organization, the market price and liquidity of such security may be adversely
affected. See Appendix A to the Additional Statement for a description of the
corporate bond ratings assigned by Standard & Poor's and Moody's.
27
<PAGE>
REAL ESTATE INVESTMENT TRUSTS ("REITS")
Each Fund may invest in REITs, which are pooled investment vehicles that
invest primarily in either real estate or real estate related loans. The value
of a REIT is affected by changes in the value of the properties owned by the
REIT or securing mortgage loans held by the REIT. REITs are dependent upon
cash flow from their investments to repay financing costs and the ability of
the REITs' manager. REITs are also subject to risks generally associated with
investments in real estate. A Fund will indirectly bear its proportionate
share of any expenses, including management fees, paid by a REIT in which it
invests.
INVESTMENT TECHNIQUES
OPTIONS ON SECURITIES AND SECURITIES INDICES
Each Fund (other than the CORE Large Cap Value, CORE U.S. Equity and CORE
Large Cap Growth Funds) may write (sell) covered call and put options and
purchase call and put options on any securities in which it may invest or on
any securities index composed of securities in which it may invest. The
writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The use of options to seek to
increase total return involves the risk of loss if the Investment Adviser is
incorrect in its expectation of fluctuations in securities prices or interest
rates. The successful use of options for hedging purposes also depends in part
on the ability of the Investment Adviser to manage future price fluctuations
and the degree of correlation between the options and securities markets. If
the Investment Adviser is incorrect in its expectation of changes in
securities prices or determination of the correlation between the securities
indices on which options are written and purchased and the securities in a
Fund's investment portfolio, the investment performance of the Fund will be
less favorable than it would have been in the absence of such options
transactions. The writing of options could significantly increase a Fund's
portfolio turnover rate and, therefore, associated brokerage commissions or
spreads.
OPTIONS ON FOREIGN CURRENCIES
A Fund may, to the extent it invests in foreign securities, purchase and
sell (write) call and put options on foreign currencies for the purpose of
protecting against declines in the U.S. dollar value of foreign portfolio
securities and anticipated dividends on such securities and against increases
in the U.S. dollar cost of foreign securities to be acquired. In addition, the
Balanced Fund may use options on currency to cross-hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates for a different currency, if there is a pattern of correlation
between the two currencies. As with other kinds of options transactions,
however, the writing of an option on a foreign currency will constitute only a
partial hedge, up to the amount of the premium received. If an option that a
Fund has written is exercised, the Fund could be required to purchase or sell
foreign currencies at disadvantageous exchange rates, thereby incurring
losses. The purchase of an option on foreign currency may constitute an
effective hedge against exchange rate fluctuations; however, in the event of
exchange rate movements adverse to a Fund's position, the Fund may forfeit the
entire amount of the premium plus related transaction costs. In addition to
purchasing call and put options for hedging purposes, the Balanced Fund may
purchase call or put options on currency to seek to increase total return when
the Investment Adviser anticipates that the currency will appreciate or
depreciate in value, but the securities quoted or denominated in that currency
do not present attractive investment opportunities and are not held in the
Fund's portfolio. When purchased or sold to seek to increase total return,
options on currencies are considered speculative. Options on foreign
currencies written or purchased by the Funds are traded on U.S. and foreign
exchanges or over-the-counter.
28
<PAGE>
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
To seek to increase total return or to hedge against changes in interest
rates, securities prices or currency exchange rates, a Fund may purchase and
sell various kinds of futures contracts, and purchase and write call and put
options on any of such futures contracts. Each Fund may also enter into
closing purchase and sale transactions with respect to any such contracts and
options. The futures contracts may be based on various securities (such as
U.S. Government securities), foreign currencies, securities indices and other
financial instruments and indices. The CORE Large Cap Value, CORE U.S. Equity
and CORE Large Cap Growth Funds may enter into such transactions only with
respect to the S&P 500 Index in the case of the CORE U.S. Equity Fund and a
representative index in the case of the CORE Large Cap Value and CORE Large
Cap Growth Funds. A Fund will engage in futures and related options
transactions for bona fide hedging purposes as defined in regulations of the
Commodity Futures Trading Commission or to seek to increase total return to
the extent permitted by such regulations. A Fund may not purchase or sell
futures contracts or purchase or sell related options to seek to increase
total return, except for closing purchase or sale transactions, if immediately
thereafter the sum of the amount of initial margin deposits and premiums paid
on the Fund's outstanding positions in futures and related options entered
into for the purpose of seeking to increase total return would exceed 5% of
the market value of the Fund's net assets. These transactions involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating a Fund to purchase securities or currencies, require the
Fund to segregate and maintain cash or liquid assets with a value equal to the
amount of the Fund's obligations or to otherwise cover the obligations in a
manner permitted by the SEC.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. See
"Investment Objectives and Policies--Futures Contracts and Options on Future
Contracts" in the Additional Statement. Thus, while a Fund may benefit from
the use of futures and options on futures, unanticipated changes in interest
rates, securities prices or currency exchange rates may result in poorer
overall performance than if the Fund had not entered into any futures
contracts or options transactions. Because perfect correlation between a
futures position and portfolio position that is intended to be protected is
impossible to achieve, the desired protection may not be obtained and a Fund
may be exposed to risk of loss. The loss incurred by a Fund in entering into
futures contracts and in writing call options on futures is potentially
unlimited and may exceed the amount of the premium received. Futures markets
are highly volatile and the use of futures may increase the volatility of a
Fund's NAV. The profitability of a Fund's trading in futures to seek to
increase total return depends upon the ability of the Investment Adviser to
analyze correctly the futures markets. In addition, because of the low margin
deposits normally required in futures trading, a relatively small price
movement in a futures contract may result in substantial losses to a Fund.
Further, futures contracts and options on futures may be illiquid, and
exchanges may limit fluctuations in futures contract prices during a single
day. The Funds may engage in futures transactions on both U.S. and foreign
exchanges. Foreign exchanges may not provide the same protection as U.S.
exchanges.
STANDARD AND POOR'S DEPOSITORY RECEIPTS
Each Fund may, consistent with its objectives, purchase Standard & Poor's
Depository Receipts ("SPDRs"). SPDRs are American Stock Exchange-traded
securities that represent ownership in the SPDR Trust, a trust which has been
established to accumulate and hold a portfolio of common stocks that is
intended to track the price performance and dividend yield of the S&P 500.
This trust is sponsored by a subsidiary of the American Stock Exchange. SPDRs
may be used for several reasons, including but not limited to: facilitating
the handling of cash flows or trading, or reducing transaction costs. The use
of SPDRs would introduce additional risk to the
29
<PAGE>
Fund as the price movement of the instrument does not perfectly correlate with
the price action of the underlying index.
EQUITY SWAPS
Each Fund may invest up to 10% of its total assets in equity swaps. Equity
swaps allow the parties to a swap agreement to exchange the dividend income or
other components of return on an equity investment (e.g., a group of equity
securities or an index) for a component of return on another non-equity or
equity investment. An equity swap may be used by a Fund to invest in a market
without owning or taking physical custody of securities in circumstances in
which direct investment may be restricted for legal reasons or is otherwise
impractical. Equity swaps are derivatives and their value can be very
volatile. To the extent that the Investment Adviser does not accurately
analyze and predict the potential relative fluctuation of the components
swapped with another party, a Fund may suffer a loss. The value of some
components of an equity swap (such as the dividends on a common stock) may
also be sensitive to changes in interest rates. Furthermore, during the period
a swap is outstanding, a Fund may suffer a loss if the counterparty defaults.
In connection with its investments in equity swaps, a Fund will either
segregate cash or liquid assets or otherwise cover its obligations in a manner
required by the SEC.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS
Each Fund may purchase when-issued securities. When-issued transactions
arise when securities are purchased by a Fund with payment and delivery taking
place in the future in order to secure what is considered to be an
advantageous price and yield to the Fund at the time of entering into the
transaction. Each Fund may also purchase or sell securities on a forward
commitment basis; that is, make contracts to purchase or sell securities for a
fixed price at a future date beyond the customary three-day settlement period.
The purchase of securities on a when-issued or forward commitment basis
involves a risk of loss if the value of the security to be purchased declines
prior to the settlement date. Conversely, securities sold on a forward
commitment basis involve the risk that the value of the securities to be sold
may increase prior to the settlement date. Although a Fund would generally
purchase securities on a when-issued or forward commitment basis with the
intention of acquiring securities for its portfolio, a Fund may dispose of
when-issued securities or forward commitments prior to settlement if the
Investment Adviser deems it appropriate to do so. A Fund will segregate cash
or liquid assets in an amount sufficient to meet the purchase price until
three days prior to the settlement date. Alternatively, each Fund may enter
into offsetting contracts for the forward sale of other securities that it
owns.
ILLIQUID AND RESTRICTED SECURITIES
A Fund will not invest more than 15% of its net assets in illiquid
investments, which include securities (both foreign and domestic) that are not
readily marketable, certain SMBS, repurchase agreements maturing in more than
seven days, time deposits with a notice or demand period of more than seven
days, certain over-the-counter options and certain restricted securities,
unless it is determined, based upon a review of the trading markets for a
specific restricted security, that such restricted security is eligible for
resale under Rule 144A under the Securities Act of 1933 and, therefore, is
liquid. The Trustees have adopted guidelines under which the Investment
Adviser determines and monitors the liquidity of portfolio securities, subject
to the oversight of the Trustees. Investing in restricted securities eligible
for resale pursuant to Rule 144A may decrease the liquidity of a Fund's
portfolio to the extent that qualified institutional buyers become for a time
uninterested in purchasing these restricted securities. The purchase price and
subsequent valuation of restricted and illiquid securities normally reflect a
discount, which may be significant, from the market price of comparable
securities for which a liquid market exists.
30
<PAGE>
REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements with dealers in U.S.
Government securities and member banks of the Federal Reserve System which
furnish collateral at least equal in value or market price to the amount of
their repurchase obligation. The Balanced Fund may also enter into repurchase
agreements involving certain foreign government securities. If the other party
or "seller" defaults, a Fund might suffer a loss to the extent that the
proceeds from the sale of the underlying securities and other collateral held
by the Fund in connection with the related repurchase agreement are less than
the repurchase price. In addition, in the event of bankruptcy of the seller or
failure of the seller to repurchase the securities as agreed, a Fund could
suffer losses, including loss of interest on or principal of the security and
costs associated with delay and enforcement of the repurchase agreement. The
Trustees have reviewed and approved certain counterparties whom they believe
to be creditworthy and have authorized the Funds to enter into repurchase
agreements with such counterparties. In addition, each Fund, together with
other registered investment companies having management agreements with an
Investment Adviser or its affiliates, may transfer uninvested cash balances
into a single joint account, the daily aggregate balance of which will be
invested in one or more repurchase agreements.
LENDING OF PORTFOLIO SECURITIES
Each Fund may also seek to increase its income by lending portfolio
securities. Under present regulatory policies, such loans may be made to
institutions, such as certain broker-dealers, and are required to be secured
continuously by collateral in cash, cash equivalents, or U.S. Government
securities maintained on a current basis in an amount at least equal to the
market value of the securities loaned. Cash collateral may be invested in cash
equivalents. If the Investment Adviser determines to make securities loans,
the value of the securities loaned may not exceed 33 1/3% of the value of the
total assets of a Fund (including the loan collateral). A Fund may experience
a loss or delay in the recovery of its securities if the institution with
which it has engaged in a portfolio loan transaction breaches its agreement
with the Fund.
MORTGAGE DOLLAR ROLLS
The Balanced Fund may enter into mortgage "dollar rolls" in which the Fund
sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase substantially similar (same
type, coupon and maturity) but not identical securities on a specified future
date. During the roll period, the Fund loses the right to receive principal
and interest paid on the securities sold. However, the Fund would benefit to
the extent of any difference between the price received for the securities
sold and the lower forward price for the future purchase or fee income plus
the interest earned on the cash proceeds of the securities sold until the
settlement date for the forward purchase. Unless such benefits exceed the
income, capital appreciation and gain or loss due to mortgage prepayments that
would have been realized on the securities sold as part of the mortgage dollar
roll, the use of this technique will diminish the investment performance of
the Fund. The Fund will segregate cash or liquid assets in an amount equal to
the forward purchase price until the settlement date. Successful use of
mortgage dollar rolls depends upon the Investment Adviser's ability to predict
correctly interest rates and mortgage prepayments. There is no assurance that
mortgage dollar rolls can be successfully employed. For financial reporting
and tax purposes, the Fund treats mortgage dollar rolls as two separate
transactions: one involving the purchase of a security and a separate
transaction involving a sale. The Fund does not currently intend to enter into
mortgage dollar rolls that are accounted for as a financing.
SHORT SALES AGAINST-THE-BOX
Each Fund (other than the CORE Funds) may make short sales of securities or
maintain a short position, provided that at all times when a short position is
open the Fund owns an equal amount of such securities or
31
<PAGE>
securities convertible into or exchangeable for, without payment of any
further consideration, an equal amount of the securities of the same issuer as
the securities sold short (a short sale against-the-box). Not more than 25% of
a Fund's net assets (determined at the time of the short sale) may be subject
to such short sales. As a result of recent tax legislation, short sales may
not generally be used to defer the recognition of gain for tax purposes with
respect to appreciated securities in a Fund's portfolio.
TEMPORARY INVESTMENTS
Each Fund may, for temporary defensive purposes, invest 100% of its total
assets (except that the CORE Funds may only hold up to 35% of their respective
total assets) in U.S. Government securities, repurchase agreements
collateralized by U.S. Government securities, commercial paper rated at least
A-2 by Standard & Poor's or P-2 by Moody's, certificates of deposit, bankers'
acceptances, repurchase agreements, non-convertible preferred stocks and non-
convertible corporate bonds with a remaining maturity of less than one year.
When a Fund's assets are invested in such instruments, the Fund may not be
achieving its investment objective.
MISCELLANEOUS TECHNIQUES
In addition to the techniques and investments described above, each Fund
may, with respect to no more than 5% of its net assets, engage in the
following techniques and investments: (i) warrants and stock purchase rights;
(ii) currency swaps (Balanced Fund only); (iii) credit swaps, mortgage swaps,
index swaps and interest rate swaps, caps, floors and collars (Balanced Fund
only); (iv) yield curve options and inverse floating rate securities (Balanced
Fund only); (v) other investment companies including World Equity Benchmark
Shares; (vi) unseasoned companies; (vii) municipal securities (Balanced Fund
only); (viii) loan participations (Balanced Fund only); (ix) custodial
receipts; and (x) reverse repurchase agreements for investment purposes
(Balanced Fund only).
In addition, each Fund may borrow up to 33 1/3% of its total assets from
banks for temporary or emergency purposes. A Fund may not make additional
investments if borrowings (excluding covered mortgage dollar rolls) exceed 5%
of its total assets. For more information see the Additional Statement.
RISK FACTORS
Risks of Investing in Equity Securities. In general, the Funds are subject
to the risks associated with investments in common stocks and other equity
securities. Stock values fluctuate in response to the activities of individual
companies and in response to general market and economic conditions and,
accordingly, the value of the stocks that a Fund holds may decline over short
or extended periods. The U.S. stock markets tend to be cyclical, with periods
when stock prices generally rise and periods when prices generally decline. As
of the date of this Prospectus, domestic stock markets were trading at or
close to record high levels and there can be no guarantee that such levels
will continue.
RISKS OF INVESTING IN SMALL CAPITALIZATION COMPANIES. Investing in the
securities of such companies involves greater risk and the possibility of
greater portfolio price volatility. Historically, small market capitalization
stocks and stocks of recently organized companies have been more volatile in
price than the larger market capitalization stocks included in the S&P 500
Index. Among the reasons for the greater price volatility of
32
<PAGE>
these small company and unseasoned stocks are the less certain growth
prospects of smaller firms and the lower degree of liquidity in the markets
for such stocks.
SPECIAL RISKS OF INVESTMENTS IN EMERGING MARKETS. Investing in the
securities of issuers in Emerging Countries involves risks in addition to
those discussed under "Description of Securities-- Foreign Investments." The
Growth and Income, Mid Cap Equity and Small Cap Value Funds may each invest up
to 25%, the Balanced Fund may invest up to 20% and the Capital Growth Fund may
invest up to 10% of their respective total assets in securities of issuers in
Emerging Countries. Emerging Countries are generally located in the Asia-
Pacific region, Eastern Europe, Latin and South America and Africa.
Foreign investment in the securities markets of certain Emerging Countries
is restricted or controlled to varying degrees which may limit investment in
such countries or increase the administrative costs of such investments.
Certain countries may restrict or prohibit investment opportunities in issuers
or industries deemed important to national interests. Such restrictions may
affect the market price, liquidity and rights of securities that may be
purchased by a Fund. The repatriation of both investment income and capital
from certain Emerging Countries is subject to restrictions such as the need
for governmental consents. Many Emerging Countries may be subject to a greater
degree of economic, political and social instability than is the case in
Western Europe, the United States, Canada, Australia, New Zealand and Japan.
Many Emerging Countries do not have fully democratic governments. For example,
governments of some Emerging Countries are authoritarian in nature or have
been installed or removed as a result of military coups, while governments in
other Emerging Countries have periodically used force to suppress civil
dissent. Many Emerging Countries have experienced currency devaluations and
substantial and, in some cases, extremely high rates of inflation, which have
a negative effect on the economies and securities markets of such Emerging
Countries. Settlement procedures in Emerging Countries are frequently less
developed and reliable than those in the United States and may involve a
Fund's delivery of securities before receipt of payment for their sale. In
addition, significant delays are common in certain markets in registering the
transfer of securities. Settlement or registration problems may make it more
difficult for a Fund to value its portfolio securities and could cause the
Fund to miss attractive investment opportunities, to have a portion of its
assets uninvested or to incur losses due to the failure of a counterparty to
pay for securities the Fund has delivered or the Fund's inability to complete
its contractual obligations.
RISKS OF INVESTING IN FIXED-INCOME SECURITIES. When interest rates decline,
the market value of fixed-income securities tends to increase. Conversely,
when interest rates increase, the market value of fixed income securities
tends to decline. Volatility of a security's market value will differ
depending upon the security's duration, the issuer and the type of instrument.
Investments in fixed-income securities are subject to the risk that the issuer
could default on its obligations and a Fund could sustain losses on such
investments. A default could impact both interest and principal payments.
RISKS OF DERIVATIVE TRANSACTIONS. A Fund's transactions, if any, in options,
futures, options on futures, swaps, structured securities and currency
transactions involve certain risks, including a possible lack of correlation
between changes in the value of hedging instruments and the portfolio assets
(if any) being hedged, the potential illiquidity of the markets for derivative
instruments, the risks arising from margin requirements and related leverage
factors associated with such transactions. The use of these management
techniques to seek to increase total return may be regarded as a speculative
practice and involves the risk of loss if the Investment Adviser is incorrect
in its expectation of fluctuations in securities prices, interest rates or
currency prices. A Fund's use of certain derivative transactions may be
limited by the requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), for qualification as a regulated investment company.
33
<PAGE>
INVESTMENT RESTRICTIONS
Each Fund is subject to certain investment restrictions that are described
in detail under "Investment Restrictions" in the Additional Statement.
Fundamental investment restrictions of a Fund cannot be changed without
approval of a majority of the outstanding Shares of that Fund as defined in
the Additional Statement. Each Fund's investment objectives and all policies
not specifically designated as fundamental are non-fundamental and may be
changed without shareholder approval. If there is a change in a Fund's
investment objectives, shareholders should consider whether that Fund remains
an appropriate investment in light of their then current financial positions
and needs.
PORTFOLIO TURNOVER
A high rate of portfolio turnover (100% or more) involves correspondingly
greater expenses which must be borne by a Fund and its shareholders. See
"Financial Highlights" for a statement of each Fund's historical portfolio
turnover rate (other than CORE Large Cap Value Fund). It is anticipated that
the annual portfolio turnover rate of the CORE Large Cap Value Fund will
generally not exceed 75%. The portfolio turnover rate is calculated by
dividing the lesser of the dollar amount of sales or purchases of portfolio
securities by the average monthly value of a Fund's portfolio securities,
excluding securities having a maturity at the date of purchase of one year or
less. The Investment Adviser will not consider the portfolio turnover rate a
limiting factor in making investment decisions for a Fund consistent with the
Fund's investment objectives and portfolio management policies.
MANAGEMENT
TRUSTEES AND OFFICERS
The Trustees are responsible for deciding matters of general policy and
reviewing the actions of the Investment Adviser, Distributor and transfer
agent. The officers of the Trust conduct and supervise the Funds' daily
business operations. The Additional Statement contains information as to the
identity of, and other information about, the Trustees and officers of the
Trust.
INVESTMENT ADVISERS
INVESTMENT ADVISERS. Goldman Sachs Asset Management, One New York Plaza, New
York, New York 10004, a separate operating division of Goldman Sachs, serves
as investment adviser to the Balanced, Growth and Income, CORE Large Cap
Value, CORE Large Cap Growth, CORE Small Cap Equity, Mid Cap Equity and Small
Cap Value Funds. Goldman Sachs registered as an investment adviser in 1981.
Goldman Sachs Funds Management, L.P., One New York Plaza, New York, New York
10004, a Delaware limited partnership which is an affiliate of Goldman Sachs,
serves as the investment adviser to the CORE U.S. Equity and Capital Growth
Funds. Goldman Sachs Funds Management, L.P. registered as an investment
adviser in 1990. As of August 21,
34
<PAGE>
1998, GSAM and GSFM together with their affiliates, acted as investment
adviser or distributor for assets in excess of $168 billion.
Under a Management Agreement with each Fund, the applicable Investment
Adviser, subject to the general supervision of the Trustees, provides day-to-
day advice as to the Fund's portfolio transactions. Goldman Sachs has agreed
to permit the Funds to use the name "Goldman Sachs" or a derivative thereof as
part of each Fund's name for as long as a Fund's Management Agreement is in
effect.
In performing its investment advisory services, each Investment Adviser,
while remaining ultimately responsible for the management of the Funds, is
able to draw upon the research and expertise of its asset management
affiliates for portfolio decisions and management with respect to certain
portfolio securities. In addition, the Investment Adviser will have access to
the research of, and certain proprietary technical models developed by,
Goldman Sachs and may apply quantitative and qualitative analysis in
determining the appropriate allocations among the categories of issuers and
types of securities.
Under the Management Agreement, the Investment Adviser also: (i) supervises
all non-advisory operations of each Fund that it advises; (ii) provides
personnel to perform such executive, administrative and clerical services as
are reasonably necessary to provide effective administration of each Fund;
(iii) arranges for at each Fund's expense (a) the preparation of all required
tax returns, (b) the preparation and submission of reports to existing
shareholders, (c) the periodic updating of prospectuses and Additional
Statements and (d) the preparation of reports to be filed with the SEC and
other regulatory authorities; (iv) maintains each Fund's records; and (v)
provides office space and all necessary office equipment and services.
FUND MANAGERS
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
------------------------- ------------------- ----------- ----------------------------
<C> <C> <C> <S>
George D. Adler Senior Since Mr. Adler joined the
Vice President Portfolio Manager-- 1997 Investment Adviser in
Capital Growth 1997. From 1990 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. From 1988 to 1990
he was a director of
portfolio management at
Banc One in Ohio.
- --------------------------------------------------------------------------------------------
Eileen A. Aptman Senior Portfolio Since Ms. Aptman joined the
Vice President Manager-- 1996 Investment Adviser in
Mid Cap Equity 1997 1993. From 1990 to 1993,
Small Cap Value she worked at Delphi
Management as an equity
analyst, focusing her
research efforts on
value stocks.
- --------------------------------------------------------------------------------------------
Jonathan A. Beinner Senior Portfolio Since Mr. Beinner joined the
Managing Director and Manager--Balanced 1994 Investment Adviser in
Co-Head U.S. Fixed (Fixed Income) 1990. From 1988 to 1990,
Income he worked as a portfolio
manager at Franklin
Savings Association in
the trading and
arbitrage group.
- --------------------------------------------------------------------------------------------
Melissa Brown Senior Portfolio Since Ms. Brown joined the
Vice President Manager-- 1998 Investment Adviser in
CORE Large Cap 1998 1998. From 1984 to 1998,
Value CORE U.S. 1998 she was the director of
Equity 1998 Quantitative Equity
CORE Large Cap Research and served on
Growth the Investment Policy
CORE Small Cap Committee at Prudential
Equity Securities.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
------------------- -------------------------- ----------- ----------------------------
<C> <C> <C> <S>
Kent A. Clark Senior Portfolio Manager-- Since Mr. Clark joined the
Vice President CORE Large Cap Value CORE 1998 Investment Adviser in
U.S. Equity 1996 1992.
CORE Large Cap Growth 1997
CORE Small Cap Equity 1997
- -------------------------------------------------------------------------------------------------
Robert G. Collins Senior Portfolio Manager-- Since Mr. Collins joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1991 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. His past
experiences include work
as a special situations
analyst with Raymond
James & Associates for
five years.
- -------------------------------------------------------------------------------------------------
Herbert E. Ehlers Senior Portfolio Manager-- Since Mr. Ehlers joined the
Managing Director Capital Growth 1997 Investment Adviser in
1997. From 1994 to 1997,
he was the Chief
Investment Officer and
Chairman of Liberty
Investment Management,
Inc. He was a portfolio
manager and president at
Liberty's predecessor
firm, Eagle Asset
Management, from 1984 to
1994.
- -------------------------------------------------------------------------------------------------
Gregory H. Ekizian Senior Portfolio Manager-- Since Mr. Ekizian joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1990 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. and its predecessor
firm, Eagle Asset
Management.
- -------------------------------------------------------------------------------------------------
Paul D. Farrell Senior Portfolio Manager-- Since Mr. Farrell joined the
Vice President Mid Cap Equity 1998 Investment Adviser in
Small Cap Value 1992 1991. In 1998, he became
responsible for managing
the Investment Adviser's
Value team. During 1991,
he served as a managing
director at Plaza
Investment Managers, the
investment subsidiary of
GEICO Corp., a major
insurance company. From
1986 to 1991, he was
employed by Goldman
Sachs as a vice
president in the
investment research
department and was
responsible for the
formation of the firm's
Emerging Growth Research
Group.
- -------------------------------------------------------------------------------------------------
Greg Gigliotti Senior Portfolio Manager-- Since Mr. Gigliotti joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1997. From 1996 to 1997
Mid Cap Equity 1998 he was a Vice President
and senior analyst at
Franklin Mutual
Advisors, Inc., the
asset management
division of Franklin
Resources, Inc. From
1989 to 1996 he was a
Vice President and
senior analyst at Heine
Securities Corporation
which was purchased by
Franklin Resources, Inc.
- -------------------------------------------------------------------------------------------------
Robert C. Jones Senior Portfolio Manager-- Since Mr. Jones joined the
Managing Director CORE Large Cap Value CORE 1998 Investment Adviser in
U.S. Equity 1991 1989. From 1987 to 1989,
CORE Large Cap Growth 1997 he was the senior
CORE Small Cap Equity 1997 quantitative analyst in
the Goldman Sachs
Investment Research
Department and the
author of the monthly
Stock Selection
publication.
- -------------------------------------------------------------------------------------------------
Richard C. Lucy Senior Portfolio Manager-- Since Mr. Lucy joined the
Vice President and Balanced (Fixed Income) 1994 Investment Adviser in
Co-Head U.S. 1992. From 1983 to 1992,
Fixed Income he managed fixed income
assets at Brown Brothers
Harriman & Co.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
YEARS
PRIMARILY
NAME AND TITLE FUND RESPONSIBILITY RESPONSIBLE FIVE YEAR EMPLOYMENT HISTORY
---------------------- -------------------------- ----------- ----------------------------
<C> <C> <C> <S>
Matthew B. McLennan Senior Portfolio Manager-- Since Mr. McLennan joined the
Vice President Mid Cap Equity 1998 Investment Adviser in
Small Cap Value 1996 1995. From 1994 to 1995,
he worked in the
Investment Banking
Division of Goldman
Sachs in Australia. From
1991 to 1994, Mr.
McLennan worked at
Queensland Investment
Corporation in
Australia.
- ----------------------------------------------------------------------------------------------------
Victor H. Pinter Senior Portfolio Manager-- Since Mr. Pinter joined the
Vice President CORE Large Cap Value CORE 1998 Investment Adviser in
U.S. Equity 1996 1990. From 1985 to 1990,
CORE Large Cap Growth 1997 he was a project manager
CORE Small Cap Equity 1997 in the Information
Technology Division of
the Investment Adviser.
- ----------------------------------------------------------------------------------------------------
Thomas S. Price Senior Portfolio Manager-- Since Mr. Price joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1997. From 1996 to 1997
Mid Cap Equity 1998 he was a Vice President
and senior analyst at
Franklin Mutual
Advisors, Inc., the
asset management
division of Franklin
Resources, Inc. From
1993 to 1996 he was a
Vice President and
senior analyst at Heine
Securities Corporation
which was purchased by
Franklin Resources, Inc.
- ----------------------------------------------------------------------------------------------------
David G. Shell Senior Portfolio Manager-- Since Mr. Shell joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1987 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. and its predecessor
firm, Eagle Asset
Management.
- ----------------------------------------------------------------------------------------------------
Ernest C. Segundo, Jr. Senior Portfolio Manager-- Since Mr. Segundo joined the
Vice President Capital Growth 1997 Investment Adviser in
1997. From 1992 to 1997,
he was a portfolio
manager at Liberty
Investment Management,
Inc. From 1990 to 1992,
he was an equity
research analyst with
Fidelity Management &
Research Company.
- ----------------------------------------------------------------------------------------------------
Lawrence S. Sibley Senior Portfolio Manager-- Since Mr. Sibley joined the
Vice President Growth and Income 1997 Investment Adviser in
Balanced (Equity) 1997 1997. From 1994 to 1997,
Mid Cap Equity 1997 he headed Institutional
Equity Sales at J.P.
Morgan Securities and
from 1987 to 1994, he
was a principal of
Sanford C. Bernstein &
Co. in its Institutional
Sales Department.
- ----------------------------------------------------------------------------------------------------
Karma Wilson Senior Portfolio Manager-- Since Ms. Wilson joined the
Vice President Growth and Income 1998 Investment Adviser in
Balanced (Equity) 1998 1994. Prior to 1994, she
Mid Cap Equity 1998 was an investment
analyst with Bankers
Trust Australia Ltd.
Before 1992 she was
employed at Arthur
Andersen LLP.
</TABLE>
It is the responsibility of the Investment Adviser to make the investment
decisions for a Fund and to place the purchase and sale orders for the Fund's
portfolio transactions in U.S. and foreign markets. Such orders may be
directed to any broker including, to the extent and in the manner permitted by
applicable law, Goldman Sachs or its affiliates. In effecting purchases and
sales of portfolio securities for the Funds, the Investment Adviser will seek
the best price and execution of a Fund's orders. In doing so, where two or
more brokers or dealers offer comparable prices and execution for a particular
trade, consideration may be given to whether the broker or dealer provides
investment research or brokerage services or sells Shares of any Goldman Sachs
Fund. See the Additional Statement for a further description of the Investment
Adviser's brokerage allocation practices.
37
<PAGE>
As compensation for its services rendered and assumption of certain expenses
pursuant to separate Management Agreements, GSAM and GSFM are entitled to the
following fees, computed daily and payable monthly at the annual rates listed
below:
<TABLE>
<CAPTION>
FOR THE FISCAL
CONTRACTUAL YEAR OR PERIOD ENDED
RATE* JANUARY 31, 1998*
----------- --------------------
<S> <C> <C>
GSAM
----
Balanced.................................. 0.65% 0.65%
Growth and Income......................... 0.70% 0.70%
CORE Large Cap Value...................... 0.60% N/A
CORE Large Cap Growth..................... 0.75% 0.60%
CORE Small Cap Equity..................... 0.85% 0.75%
Mid Cap Equity............................ 0.75% 0.75%
Small Cap Value........................... 1.00% 1.00%
GSFM
----
CORE U.S. Equity.......................... 0.75% 0.59%
Capital Growth............................ 1.00% 1.00%
</TABLE>
- ---------------------
*All numbers are annualized. The difference, if any, between the stated fees
and the actual fees paid by the Funds reflects that the applicable Investment
Adviser did not charge the full amount of the fees to which it would have been
entitled. Effective September 1, 1998, the management fee for the CORE U.S.
Equity and CORE Small Cap Equity Funds will equal 0.70% and 0.85%,
respectively. As of January 31, 1998, the CORE Large Cap Value Fund had not
commenced operations. The Investment Adviser may discontinue or modify any
limitations in the future at its discretion.
The Investment Adviser has voluntarily agreed to reduce or limit certain
"Other Expenses" of the Funds (excluding management fees, service fees,
transfer agency fees, taxes, interest and brokerage fees and litigation,
indemnification and other extraordinary expenses) to the extent such expenses
exceed 0.01%, 0.05%, 0.00%, 0.00%, 0.00%, 0.04%, 0.00%, 0.10% and 0.06% per
annum of the average daily net assets of the Balanced, Growth and Income, CORE
Large Cap Value, CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap
Equity, Capital Growth, Mid Cap Equity and Small Cap Value Funds,
respectively. Such reductions or limits, if any, may be discontinued or
modified by the applicable Investment Adviser in its discretion at any time.
ACTIVITIES OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER ACCOUNTS MANAGED BY
GOLDMAN SACHS. The involvement of the Investment Adviser, Goldman Sachs and
their affiliates in the management of, or their interest in, other accounts
and other activities of Goldman Sachs may present conflicts of interest with
respect to a Fund or limit a Fund's investment activities. Goldman Sachs and
its affiliates engage in proprietary trading and advise accounts and funds
which have investment objectives similar to those of the Funds and/or which
engage in and compete for transactions in the same type of securities,
currencies and instruments as the Funds. Goldman Sachs and its affiliates will
not have any obligation to make available any information regarding their
proprietary activities or strategies, or the activities or strategies used for
other accounts managed by them, for the benefit of the management of the
Funds. The results of a Fund's investment activities, therefore, may differ
from those of Goldman Sachs and its affiliates and it is possible that a Fund
could sustain losses during periods in which Goldman Sachs and its affiliates
and other accounts achieve significant profits on their trading for
proprietary or other accounts. In addition, the Funds may, from time to time,
enter into transactions in which other clients of
38
<PAGE>
Goldman Sachs have an adverse interest. From time to time, a Fund's activities
may be limited because of regulatory restrictions applicable to Goldman Sachs
and its affiliates, and/or their internal policies designed to comply with
such restrictions. See "Management--Activities of Goldman Sachs and its
Affiliates and Other Accounts Managed by Goldman Sachs" in the Additional
Statement for further information.
DISTRIBUTOR AND TRANSFER AGENT
Goldman Sachs, 85 Broad Street, New York, New York 10004, serves as the
exclusive distributor (the "Distributor") of each Fund's Shares. Goldman
Sachs, 4900 Sears Tower, Chicago, Illinois 60606, also serves as each Fund's
transfer agent (the "Transfer Agent") and as such performs various shareholder
servicing functions. Shareholders with inquiries regarding a Fund should
contact Goldman Sachs (as Transfer Agent) at the address or the telephone
number set forth on the back cover page of this Prospectus. Goldman Sachs is
entitled to receive a transfer agency fee with respect to each Fund's
Institutional and Service Shares equal, on an annual basis, to 0.04% of
average daily net assets.
From time to time, Goldman Sachs or any of its affiliates may purchase and
hold Shares of the Funds. Goldman Sachs reserves the right to redeem at any
time some or all of the Shares acquired for its own account.
YEAR 2000
Many computer systems were designed using only two digits to signify the
year (for example, "98" for "1998"). On January 1, 2000, if these computer
systems are not corrected, they may incorrectly interpret "00" as the year
"1900" rather than the year "2000," leading to computer shutdowns or errors
(commonly known as the "Year 2000 Problem"). To the extent these systems
conduct forward-looking calculations, these computer problems may occur prior
to January 1, 2000. Like other investment companies and financial and business
organizations, the Funds could be adversely affected in their ability to
process securities trades, price securities, provide shareholder account
services and otherwise conduct normal business operations if the computer
systems used by the Investment Adviser or other Fund service providers do not
adequately address this problem in a timely manner. The Investment Adviser has
established a dedicated group to analyze these issues and to implement the
systems modifications necessary to prepare for the Year 2000 Problem.
Currently, the Investment Adviser does not anticipate that the transition to
the 21st Century will have any material impact on its ability to continue to
service the Funds at current levels. In addition, the Investment Adviser has
sought assurances from the Funds' other service providers that they are taking
the steps necessary so that they do not experience Year 2000 Problems, and the
Investment Adviser will continue to monitor the situation. At this time,
however, no assurance can be given that the actions taken by the Investment
Adviser and the Funds' other service providers will be sufficient to avoid any
adverse effect on the Funds due to the Year 2000 Problem.
EXPENSES
The Funds are responsible for the payment of their expenses. The expenses
include, without limitation; fees payable to the Investment Adviser; custodial
and transfer agency fees; service fees paid to Service Organizations;
brokerage fees and commissions; filing fees for the registration or
qualification of the Funds' Shares under federal or state securities laws,
organizational expenses; fees and expenses incurred in connection with
membership in investment company organizations; taxes; interest; costs of
liability insurance, fidelity bonds or indemnification; any costs, expenses or
losses arising out of any liability of, or claim for damages or other relief
39
<PAGE>
asserted against, the Funds for violation of any law; legal and auditing fees
and expenses (including the cost of legal and certain accounting services
rendered by employees of the Investment Adviser and its affiliates with
respect to the Funds); expenses of preparing and setting in type prospectuses,
Additional Statements, proxy material, financial reports and notices and the
printing and distributing of the same to shareholders and regulatory
authorities; compensation and expenses of the Trust's "non-interested"
Trustees; and extraordinary organizational expenses, if any, incurred by the
Trust.
NET ASSET VALUE
The NAV per Share of each Class of a Fund is calculated by the Fund's
custodian as of the close of regular trading on the New York Stock Exchange
(which is normally, but not always, 3:00 p.m. Chicago time, 4:00 p.m. New York
time), on each Business Day (as such term is defined under "Additional
Information"). NAV per Share of each Class is calculated by determining the
net assets attributed to each Class and dividing by the number of outstanding
Shares of that Class. Portfolio securities are valued based on market
quotations or, if accurate quotations are not readily available, at fair value
as determined in good faith under procedures established by the Trustees.
PERFORMANCE INFORMATION
From time to time each Fund may publish average annual total return and the
Balanced, CORE Large Cap Value and Growth and Income Funds may publish their
yield and distribution rates in advertisements and communications to
shareholders or prospective investors. Average annual total return is
determined by computing the average annual percentage change in value of
$1,000 invested at the maximum public offering price for specified periods
ending with the most recent calendar quarter, assuming reinvestment of all
dividends and distributions at NAV. The total return calculation assumes a
complete redemption of the investment at the end of the relevant period. Each
Fund may also from time to time advertise total return on a cumulative,
average, year-by-year or other basis for various specified periods by means of
quotations, charts, graphs or schedules. In addition, each Fund may furnish
total return calculations based on investments at various sales charge levels
or at NAV. Any performance information which is based on the NAV per Share
would be reduced if any applicable sales charge were taken into account. In
addition to the above, each Fund may from time to time advertise its
performance relative to certain averages, performance rankings, indices, other
information prepared by recognized mutual fund statistical services and
investments for which reliable performance information is available.
The Balanced, CORE Large Cap Value and Growth and Income Funds compute their
yield by dividing net investment income earned during a recent thirty-day
period by the product of the average daily number of Shares outstanding and
entitled to receive dividends during the period and the maximum offering price
per Share on the last day of the relevant period. The results are compounded
on a bond equivalent (semi-annual) basis and then annualized. Net investment
income per Share is equal to the dividends and interest earned during the
period, reduced by accrued expenses for the period. The calculation of net
investment income for these purposes may differ from the net investment income
determined for accounting purposes. The Balanced, CORE Large Cap Value and
Growth and Income Funds' quotations of distribution rate are calculated by
annualizing the most
40
<PAGE>
recent distribution of net investment income for a monthly, quarterly or other
relevant period and dividing this amount by the NAV per Share on the last day
of the period for which the distribution rate is being calculated.
Each Fund's total return, yield and distribution rate will be calculated
separately for each Class of Shares in existence. Because each Class of Shares
may be subject to different expenses, the total return, yield and distribution
rate calculations with respect to each Class of Shares for the same period
will differ. See "Shares of the Trust."
The Funds' performance quotations do not reflect any fees charged by a
Service Organization to its customer accounts in connection with investments
in the Funds. The investment results of a Fund will fluctuate over time and
any presentation of investment results for any prior period should not be
considered a representation of what an investment may earn or what the Fund's
performance may be in any future period. In addition to information provided
in shareholder reports, the Funds may, in their discretion, from time to time
make a list of their holdings available to investors upon request.
SHARES OF THE TRUST
Goldman Sachs Trust was formed under the laws of the State of Delaware on
January 28, 1997. On April 30, 1997, Goldman Sachs Equity Portfolios, Inc., a
Maryland corporation was reorganized into the Trust. The Trustees have
authority under the Trust's Declaration of Trust to create and classify Shares
of beneficial interests in separate series, without further action by
shareholders. Additional series may be added in the future. The Trustees also
have authority to classify and reclassify any series or portfolio of Shares
into one or more Classes. Information about the Trust's other series and
Classes is contained in separate prospectuses.
When issued, Shares are fully paid and non-assessable. In the event of
liquidation, shareholders of each class are entitled to share pro rata in the
net assets of the applicable Fund available for distribution to the
shareholders of such Class. All Shares are freely transferable and have no
preemptive, subscription or conversion rights. Shareholders are entitled to
one vote per Share, provided that, at the option of the Trustees, shareholders
will be entitled to a number of votes based upon the NAVs represented by their
Shares.
[As of April 3, 1998, State Street Bank and Trust Company as Trustee for
Goldman Sachs Profit Sharing Master Trust, Attention: Louis Pereira, P.O. Box
1992, Boston, MA 02105-1992 was recordholder of 59.9% of Mid Cap Equity Fund's
outstanding Shares.]
The Trust does not intend to hold annual meetings of shareholders. However,
recordholders may, under certain circumstances, as permitted by the Act,
communicate with other shareholders in connection with requiring a special
meeting of shareholders. The Trustees will call a special meeting of
shareholders for the purpose of electing Trustees if, at any time, less than a
majority of Trustees holding office at the time were elected by shareholders.
In the interest of economy and convenience, the Trust does not issue
certificates representing the Funds' Shares. Instead, the Transfer Agent
maintains a record of each shareholder's ownership. Each shareholder receives
confirmation of purchase and redemption orders from the Transfer Agent. Fund
Shares and any dividends and distributions paid by the Fund are reflected in
account statements from the Transfer Agent.
41
<PAGE>
TAXATION
FEDERAL TAXES
Each Fund is treated as a separate entity for tax purposes. The CORE Large
Cap Value Fund intends to elect and each other Fund has elected to be treated
as a regulated investment company, and each Fund intends to continue to
qualify for such treatment for each taxable year under Subchapter M of the
Code. To qualify as such, a Fund must satisfy certain requirements relating to
the sources of its income, diversification of its assets and distribution of
its income to shareholders. As a regulated investment company, a Fund will not
be subject to federal income or excise tax on any net investment income and
net realized capital gains that are distributed to its shareholders in
accordance with certain timing requirements of the Code.
Dividends paid by a Fund from net investment income, certain net realized
foreign exchange gains, the excess of net short-term capital gain over net
long-term capital loss and original issue discount or market discount income
will be taxable to its shareholders as ordinary income. Distributions out of
the net capital gain (the excess of net long-term capital gain over net short-
term capital loss), if any, of a Fund will be taxed to shareholders as long-
term capital gains, regardless of the length of time a shareholder has held
his or her Shares or whether such gain was reflected in the price paid for the
Shares. These tax consequences will apply whether distributions are received
in cash or reinvested in Shares. A Fund's dividends that are paid to its
corporate shareholders and are attributable to qualifying dividends such Fund
receives from U.S. domestic corporations may be eligible, in the hands of such
corporate shareholders, for the corporate dividends-received deduction,
subject to certain holding period requirements and debt financing limitations
under the Code. Certain distributions paid by a Fund in January of a given
year may be taxable to shareholders as if received the prior December 31.
Shareholders will be informed annually about the amount and character of
distributions received from the Funds for federal income tax purposes.
Investors should consider the tax implications of buying Shares immediately
prior to a distribution. Investors who purchase Shares shortly before the
record date for a distribution will pay a per Share price that includes the
value of the anticipated distribution and will be taxed on the distribution
even though the distribution represents a return of a portion of the purchase
price.
Redemptions and exchanges of Shares are taxable events.
Individuals and certain other classes of shareholders may be subject to 31%
backup withholding of federal income tax on distributions, redemptions and
exchanges if they fail to furnish their correct taxpayer identification number
and certain certifications required by the Internal Revenue Service or if they
are otherwise subject to backup withholding. Individuals, corporations and
other shareholders that are not U.S. persons under the Code are subject to
different tax rules and may be subject to nonresident alien withholding at the
rate of 30% (or a lower rate provided by an applicable tax treaty, if any) on
amounts treated as ordinary dividends from the Funds.
Each Fund may be subject to foreign withholding or other foreign taxes on
income or gain from certain foreign securities. In general, the Funds do not
anticipate that they will be eligible to pass any foreign tax credits through
to their shareholders; however, the Funds may deduct these taxes in computing
their taxable income, if any.
42
<PAGE>
OTHER TAXES
In addition to federal taxes, a shareholder may be subject to state, local
or foreign taxes on payments received from the Funds. A state income (and
possibly local income and/or intangible property) tax exemption may be
available to the extent (if any) a Fund's distributions are derived from
interest on (or, in the case of intangible property taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in
some states that certain thresholds for holdings of such obligations and/or
reporting requirements are satisfied. For a further discussion of certain tax
consequences of investing in Shares of the Funds, see "Taxation" in the
Additional Statement. Shareholders are urged to consult their own tax advisers
regarding specific questions as to federal, state and local taxes as well as
to any foreign taxes.
ADDITIONAL INFORMATION
As used in this Prospectus, the term "Business Day" means any day the New
York Stock Exchange is open for trading, which is Monday through Friday except
for holidays. The New York Stock Exchange is closed on the following holidays:
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day (observed), Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
43
<PAGE>
ADDITIONAL SERVICES
The Trust, on behalf of the Funds, has adopted a Service Plan with respect to
the Service Shares which authorizes a Fund to compensate certain institutions
("Service Organizations") for providing account administration and personal and
account maintenance services to their customers who are beneficial owners of
such Shares. The Trust, on behalf of the Funds, enters into agreements with
Service Organizations which purchase Service Shares on behalf of their custom-
ers ("Service Agreements"). The Service Agreements provide for compensation to
the Service Organizations in an amount up to 0.50% (on an annualized basis) of
the average daily net assets of the Service Shares of the Fund attributable to
or held in the name of the Service Organization for its customers; provided,
however, that the fee paid for personal and account maintenance services may
not exceed 0.25% of such average daily net assets. The services provided by the
Service Organizations may include acting, directly or through an agent, as the
sole shareholder of record, maintaining account records for customers, process-
ing orders to purchase, redeem or exchange Service Shares for customers, re-
sponding to inquiries from prospective and existing shareholders and assisting
customers with investment procedures.
The Trust may authorize certain Service Organizations to accept on the
Trust's behalf, purchase, redemption and exchange orders placed by their
customers and, if approved by the Trust, to designate other intermediaries to
accept such orders. In these cases, a Fund will be deemed to have received an
order in proper form when the order is accepted by the authorized Service
Organization or intermediary on a Business Day, and the order will be priced at
a Fund's NAV per Share next determined after such acceptance. The Service
Organization or intermediary will be responsible for transmitting accepted
orders to the Trust within the period agreed upon by them. A customer may
contact its Service Organization to learn whether the Service Organization is
authorized to accept orders. Service Organizations that are authorized to
accept orders for the Trust may receive payments from the Funds or Goldman
Sachs that are in addition to the payments payable by the Trust under the
Service Plan.
Holders of Service Shares of a Fund bear all expenses and fees paid to Serv-
ice Organizations under the Service Plan as well as any other expenses which
are directly attributable to such Shares.
Service Organizations may charge fees directly to their customers who are the
beneficial owners of Service Shares in connection with their customer accounts.
These fees would be in addition to any amounts received by the Service Organi-
zation under a Service Agreement and may affect the return earned on an invest-
ment in a Fund. The Trust, on behalf of the Funds, accrues payments made pursu-
ant to a Service Agreement daily. All inquiries of beneficial owners of Service
Shares should be directed to such owners' Service Organization.
For the fiscal year ended January 31, 1998, the Trust paid the Service
Organizations fees at the annual rate of 0.50% of each Fund's average daily net
assets attributable to Service Shares.
REPORTS TO SHAREHOLDERS
Recordholders of Service Shares of the Funds will receive an annual report
containing audited financial statements and a semi-annual report. Each
recordholder of Service Shares will also be provided with a printed confirma-
tion for each transaction in its account and a quarterly account statement. A
year-to-date statement for any account will be provided to a Service Organiza-
tion upon request made to Goldman Sachs.
44
<PAGE>
Service Organizations will be responsible for providing services similar to
those described above to their customers who are the beneficial owners of such
Shares. For example, Service Organizations are responsible for providing each
customer exercising investment discretion with quarterly statements with re-
spect to such customer's account in lieu of an immediate confirmation of each
transaction.
DIVIDENDS
Each dividend from net investment income and capital gain distributions, if
any, declared by a Fund on its outstanding Service Shares will, at the election
of each shareholder, be paid: (i) in cash; or (ii) in additional Service Shares
of such Fund. This election should initially be made on a shareholder's Account
Information Form and may be changed upon written notice to Goldman Sachs at any
time prior to the record date for a particular dividend or distribution. If no
election is made, all dividends from net investment income and capital gain
distributions will be reinvested in Service Shares of the applicable Fund.
The election to reinvest dividends and distributions paid by a Fund in addi-
tional Service Shares of the Fund will not affect the tax treatment of such
dividends and distributions, which will be treated as received by the share-
holder and then used to purchase Service Shares of a Fund.
Each Fund intends that all or substantially all its net investment income and
net capital gains, after reduction by available capital losses, including any
capital losses carried forward from prior years, will be declared as dividends
for each taxable year. The Balanced, CORE Large Cap Value and Growth and Income
Funds will pay dividends from net investment income quarterly. Each other Fund
will pay dividends from net investment income, and dividends from net realized
capital gains, reduced by available capital losses, at least annually. From
time to time, a portion of a Fund's dividends may constitute a return of
capital.
At the time of an investor's purchase of Shares of a Fund a portion of the
NAV per Share may be represented by undistributed income of the Fund or real-
ized or unrealized appreciation of the Fund's portfolio securities. Therefore,
subsequent distributions on such Shares from such income or realized apprecia-
tion may be taxable to the investor even if the NAV of the investor's Shares
is, as a result of the distributions, reduced below the cost of such Shares and
the distributions (or portions thereof) represent a return of a portion of the
purchase price.
PURCHASE OF SERVICE SHARES
Customers of Service Organizations may invest in Service Shares only through
their Service Organizations. Service Shares may be purchased on any Business
Day at the NAV per Share next determined after receipt of an order by Goldman
Sachs from a Service Organization. (See "Additional Services" for a description
of limited situations where a Service Organization or other intermediary may be
authorized to accept orders for the Funds.) No sales load will be charged. Cur-
rently, the NAV is determined as of the close of regular trading on the New
York Stock Exchange (which is normally, but not always, 3:00 p.m. Chicago time,
4:00 p.m. New York time), as described under "Net Asset Value." Purchases of
Service Shares of the Funds must be settled within three (3) Business Days of
the receipt of a complete purchase order. Payment of the proceeds of redemption
of Shares purchased by check may be delayed for a period of time as described
under "Redemption of Service Shares."
45
<PAGE>
The Service Organizations are responsible for the timely transmittal of
purchase orders to Goldman Sachs and payments to State Street Bank and Trust
Company ("State Street"). In order to facilitate timely transmittal, the
Service Organizations have established times by which purchase orders and
payments must be received by them.
PURCHASE PROCEDURES
Purchases of Service Shares may be made by a Service Organization placing an
order with Goldman Sachs at 800-621-2550 and either wiring federal funds to
State Street or initiating an ACH transfer. Purchases may also be made by a
Service Organization by check (except that the Trust will not accept a check
drawn on a foreign bank or a third party check) or Federal Reserve draft made
payable to "Goldman Sachs Domestic Equity Funds--Name of Fund and Class of
Shares" and should be directed to "Goldman Sachs Domestic Equity Funds--Name of
Fund and Class of Shares," c/o National Financial Data Services, Inc. ("NFDS"),
P.O. Box 419711, Kansas City, MO 64141-6711.
OTHER PURCHASE INFORMATION
The Funds do not have any minimum purchase or account requirements with
respect to Service Shares. A Service Organization may, however, impose a
minimum amount for initial and subsequent investments in Service Shares, and
may establish other requirements such as a minimum account balance. A Service
Organization may effect redemptions of noncomplying accounts, and may impose a
charge for any special services rendered to its customers. Customers should
contact their Service Organization for further information concerning such
requirements and charges.
The Investment Adviser, Distributor, and/or their affiliates also pay
additional compensation, from time to time, out of their assets and not as an
additional charge to the Funds, to selected Service Organizations and other
persons in connection with the sale of Shares of the Funds and other investment
portfolios of the Trust (such as additional payments based on new sales amounts
exceeding pre-established thresholds, or the length of time customer assets
have remained in the Trust) and, subject to applicable NASD regulations,
contribute to various non-cash and cash incentive arrangements to promote the
sale of Shares, as well as sponsor various educational programs, sales contests
and/or promotions in which participants may receive reimbursement of expenses,
entertainment and prizes such as travel awards, merchandise, cash, investment
research and educational information and related support materials. This
additional compensation can vary among Service Organizations depending upon
such factors as the amounts their customers have invested (or may invest) in
particular investment portfolios of the Trust, the particular program involved,
or the amount of reimbursable expenses. Additional compensation based on sales
may, but is currently not expected to, exceed 0.50% (annualized) of the amount
invested. For further information, see the Additional Statement.
The Funds reserve the right to redeem Service Shares of any Service Organiza-
tion whose account balance is less than $50 as a result of earlier redemptions.
Such redemptions will not be implemented if the value of a recordholder's ac-
count falls below the minimum account balance solely as a result of market con-
ditions. The Trust will give 60 days' prior written notice to Service Organiza-
tions whose Service Shares are being redeemed to allow them to purchase suffi-
cient additional Service Shares to avoid such redemption.
The Funds and Goldman Sachs each reserve the right to reject any specific
purchase order (including exchanges) or to restrict purchases or exchanges by a
particular purchaser (or group of related purchasers). This
46
<PAGE>
may occur, for example, when a purchaser or group of purchaser's pattern of
frequent purchases, sales or exchanges of Service Shares of a Fund is evident,
or if purchases, sales, or exchanges are, or a subsequent abrupt redemption
might be, of a size that would disrupt management of a Fund.
In the sole discretion of Goldman Sachs, a Fund may accept securities instead
of cash for the purchase of Shares of the Fund. Such purchases will be
permitted only if the Investment Adviser determines that any securities
acquired in this manner are consistent with the Fund's investment objectives,
restrictions and policies and are desirable investments for the Fund.
EXCHANGE PRIVILEGE
Service Shares of the Funds may be exchanged by a Service Organization for:
(i) Service Shares of any other mutual fund sponsored by Goldman Sachs and des-
ignated as an eligible fund for this purpose; and (ii) the corresponding class
of any Goldman Sachs Money Market Fund at the NAV next determined either by
writing to Goldman Sachs, Attention: Goldman Sachs Domestic Equity Funds--Name
of Fund and Class of Shares, c/o GSAM Shareholder Services, 4900 Sears Tower,
Chicago, Illinois 60606 or, if previously elected in the Fund's Account Infor-
mation Form, by telephone at 800-621-2550 (7:00 a.m. to 5:30 p.m. Chicago
time). A shareholder should obtain and read the prospectus relating to any
other fund and its Shares and consider its investment objective, policies and
applicable fees before making an exchange. Service Shares acquired by telephone
exchange must be registered in the same name(s) and have the same address as
Service Shares of the Fund for which the exchange is being made.
In an effort to prevent unauthorized or fraudulent exchanges by telephone,
Goldman Sachs employs reasonable procedures as set forth under "Redemption of
Service Shares" to confirm that such instructions are genuine. In times of
drastic economic or market changes the telephone exchange privilege may be dif-
ficult to implement. For federal income tax purposes, an exchange is treated as
a sale of the Service Shares surrendered in the exchange, on which an investor
may realize a gain or loss, followed by a purchase of Service Shares or the
corresponding class of any Goldman Sachs Money Market Fund received in the ex-
change. Shareholders should consult their own tax advisers concerning the tax
consequences of an exchange. Exchanges are available only in states where ex-
changes may legally be made. The exchange privilege may be materially modified
or withdrawn at any time on 60 days' written notice to recordholders of Service
Shares and is subject to certain limitations. See "Purchase of Service Shares."
REDEMPTION OF SERVICE SHARES
The Funds will redeem their Service Shares upon request of a recordholder of
such Shares on any Business Day at the NAV next determined after the receipt of
a request in proper form by Goldman Sachs. (See "Additional Services" for a de-
scription of limited situations where a Service Organization or other interme-
diary may be authorized to accept requests for the Funds.) If Service Shares to
be redeemed were recently purchased by check, a Fund may delay transmittal of
redemption proceeds until such time as it has assured itself that good funds
have been collected for the purchase of such Service Shares. This may take up
to 15 days. Redemption
47
<PAGE>
requests may be made by a Service Organization by writing to or calling the
Transfer Agent at the address or telephone number set forth on the back cover
of this Prospectus. A Service Organization may request redemptions by telephone
if the optional telephone redemption privilege is elected on the Account Infor-
mation Form. It may be difficult to implement redemptions by telephone in times
of drastic economic or market changes.
In an effort to prevent unauthorized or fraudulent redemption or exchange
requests by telephone, Goldman Sachs employs reasonable procedures specified by
the Trust to confirm that such instructions are genuine. Among other things,
any redemption request that requires money to go to an account or address other
than that designated on the Account Information Form must be in writing and
signed by an authorized person designated on the Account Information Form. Any
such written request is also confirmed by telephone with both the requesting
party and the designated bank account to verify instructions. Exchanges among
accounts with different names, addresses and social security or other taxpayer
identification numbers must be in writing and signed by an authorized person
designated on the Account Information Form. Other procedures may be implemented
from time to time concerning telephone redemptions and exchanges. If reasonable
procedures are not implemented, the Trust may be liable for any loss due to
unauthorized or fraudulent transactions. In all other cases, neither the Funds,
the Trust nor Goldman Sachs will be responsible for the authenticity of
redemption or exchange instructions received by telephone.
The Funds will arrange for the proceeds of redemptions effected by any means
to be wired to the recordholder of Service Shares or, if the recordholder
elects in writing, by check. Redemption proceeds paid by wire transfer will
normally be wired on the next Business Day in federal funds (for a total one-
day delay), but may be paid up to three days after receipt of a properly
executed redemption request. Wiring of redemption proceeds may be delayed one
additional Business Day if the Federal Reserve Bank is closed on the day
redemption proceeds would ordinarily be wired. Redemption proceeds paid by
check will normally be mailed to the address of record within three Business
Days of receipt of a properly executed redemption request. Once wire transfer
instructions have been given by Goldman Sachs, neither the Funds, the Trust nor
Goldman Sachs assumes any further responsibility for the performance of
intermediaries or the customer's Service Organization in the transfer process.
If a problem with such performance arises, the customer should deal directly
with such intermediaries or Service Organizations.
Additional documentation regarding a redemption by any means may be required
to effect a redemption when deemed appropriate by the Transfer Agent. The
request for such redemption will not be considered to have been received in
proper form until such additional documentation has been submitted to the
Transfer Agent by the recordholder of Service Shares.
Service Organizations are responsible for the timely transmittal of
redemption requests by their customers to the Transfer Agent. In order to
facilitate timely transmittal of redemption requests, Service Organizations
have established times by which redemption requests must be received by them.
Additional documentation may be required when deemed appropriate by a Service
Organization.
--------------------
48
<PAGE>
APPENDIX
GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON ACCOUNT INFORMATION FORM
You are required by law to provide a Fund with your correct Taxpayer
Identification Number (TIN), regardless of whether you file tax returns.
Failure to do so may subject you to penalties. Failure to provide your correct
TIN and to sign your name in the Certification section of the Account
Information Form could result in withholding of 31% by a Fund for the federal
backup withholding tax on distributions, redemptions, exchanges and other
payments relating to your account.
Any tax withheld may be credited against taxes owed on your federal income
tax return.
If you do not have a TIN, you should apply for one immediately by contacting
your local office of the Social Security Administration or the Internal
Revenue Service (IRS). Backup withholding could also apply to payments
relating to your account prior to a Fund's receipt of your TIN.
Special rules apply for certain entities. For example, for an account
established under a Uniform Gifts or Transfers to Minors Act, the TIN of the
minor should be furnished.
If you have been notified by the IRS that you are subject to backup
withholding because you failed to report all your interest and/or dividend
income on your tax return and you have not been notified by the IRS that such
withholding should cease, you must cross out item (2) in the Certification
section of the Account Information Form.
If you are an exempt recipient, you should furnish your TIN and certify your
exemption by signing the Certification section and writing "exempt" after your
signature. Exempt recipients include: corporations, tax-exempt pension plans
and IRAs, governmental agencies, financial institutions, registered securities
and commodities dealers and others.
If you are a nonresident alien or foreign entity, you must provide a
completed Form W-8 to a Fund in order to avoid backup withholding on certain
payments. Other payments to you may be subject to nonresident alien
withholding of up to 30%.
For further information regarding backup and nonresident alien withholding,
see Sections 3406, 1441 and 1442 of the Code and consult your tax adviser.
A-1
<PAGE>
- --------------------------------------------------------------------------------
GOLDMAN SACHS ASSET
MANAGEMENT
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
GOLDMAN SACHS FUNDS
MANAGEMENT, L.P.
ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10004
GOLDMAN, SACHS & CO.
DISTRIBUTOR
85 BROAD STREET
NEW YORK, NEW YORK 10004
GOLDMAN, SACHS & CO.
TRANSFER AGENT
4900 SEARS TOWER
CHICAGO, ILLINOIS 60606
STATE STREET BANK AND TRUST COMPANY
CUSTODIAN
1776 HERITAGE DRIVE
NORTH QUINCY, MASSACHUSETTS 02171
ARTHUR ANDERSEN, LLP
INDEPENDENT PUBLIC ACCOUNTANTS
225 FRANKLIN STREET
BOSTON, MASSACHUSETTS 02110
TOLL FREE (IN U.S.) . . . . . . . . 800-621-2550
EQDOMPROSVC
501418
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOLDMAN SACHS
DOMESTIC
EQUITY FUNDS
- --------------------------------------------------------------------------------
PROSPECTUS
SERVICE SHARES
LOGO
Goldman
Sachs
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
SERVICE SHARES
INSTITUTIONAL SHARES
GOLDMAN SACHS BALANCED FUND
GOLDMAN SACHS GROWTH AND INCOME FUND
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
GOLDMAN SACHS CORE U.S. EQUITY FUND
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
GOLDMAN SACHS CAPITAL GROWTH FUND
GOLDMAN SACHS MID CAP EQUITY FUND
GOLDMAN SACHS INTERNATIONAL EQUITY FUND
GOLDMAN SACHS SMALL CAP VALUE FUND
GOLDMAN SACHS EUROPEAN EQUITY FUND
GOLDMAN SACHS JAPANESE EQUITY FUND
GOLDMAN SACHS INTERNATIONAL SMALL CAP FUND
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
GOLDMAN SACHS ASIA GROWTH FUND
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
(EQUITY PORTFOLIOS OF GOLDMAN SACHS TRUST)
4900 Sears Tower
Chicago, Illinois 60606-6303
This Statement of Additional Information (the "Additional Statement") is
not a Prospectus. This Additional Statement should be read in conjunction with
the Prospectuses for the Class A Shares, Class B Shares, Class C Shares, Service
Shares and Institutional Shares of: Goldman Sachs Balanced Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs CORE Large Cap Value Fund, Goldman Sachs
CORE U.S. Equity Fund, Goldman Sachs CORE Large Cap Growth Fund, Goldman Sachs
CORE Small Cap Equity Fund, Goldman Sachs Capital Growth Fund, Goldman Sachs
Mid Cap Equity Fund and Goldman Sachs Small Cap Value Fund dated December 15,
1998; Goldman Sachs CORE International Equity Fund, Goldman Sachs International
Equity Fund, Goldman Sachs European Equity Fund, Goldman Sachs Japanese Equity
Fund, Goldman Sachs International Small Cap Fund, Goldman Sachs Emerging Markets
Equity Fund and Goldman Sachs Asia Growth Fund dated October 1, 1998; and
Goldman Sachs Real Estate Securities Fund dated October 1, 1997, as revised
September 1, 1998 (the "Prospectuses"), which may be obtained without charge
from Goldman, Sachs & Co. by calling the telephone number, or writing to one of
the addresses, listed below.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
----
<S> <C>
INTRODUCTION....................................................................................... B-4
INVESTMENT POLICIES................................................................................ B-6
INVESTMENT RESTRICTIONS............................................................................ B-44
PORTFOLIO TRANSACTIONS AND BROKERAGE............................................................... B-65
NET ASSET VALUE.................................................................................... B-72
PERFORMANCE INFORMATION............................................................................ B-74
SHARES OF THE TRUST................................................................................ B-83
TAXATION........................................................................................... B-88
FINANCIAL STATEMENTS............................................................................... B-96
OTHER INFORMATION.................................................................................. B-96
DISTRIBUTION AND SERVICE PLANS..................................................................... B-98
OTHER INFORMATION REGARDING MAXIMUM SALES CHARGE, PURCHASES, REDEMPTIONS, EXCHANGES AND DIVIDENDS.. B-105
SERVICE PLAN....................................................................................... B-109
APPENDIX A......................................................................................... 1-A
APPENDIX B......................................................................................... 1-B
</TABLE>
The date of this Additional Statement is December 15, 1998.
B-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
GOLDMAN SACHS FUNDS MANAGEMENT, L.P. GOLDMAN, SACHS & CO.
Adviser to: Distributor
Goldman Sachs CORE U.S. Equity Fund 85 Broad Street
Goldman Sachs Capital Growth Fund New York, New York 10004
One New York Plaza
New York, New York 10004
GOLDMAN SACHS ASSET MANAGEMENT GOLDMAN SACHS ASSET
Adviser to: MANAGEMENT INTERNATIONAL
Goldman Sachs Balanced Fund Adviser to:
Goldman Sachs Growth and Income Fund Goldman Sachs International Equity Fund
Goldman Sachs CORE Large Cap Value Fund Goldman Sachs European Equity Fund
Goldman Sachs CORE Large Cap Growth Fund Goldman Sachs Japanese Equity Fund
Goldman Sachs CORE Small Cap Equity Fund Goldman Sachs International Small Cap Fund
Goldman Sachs CORE International Equity Fund Goldman Sachs Emerging Markets Equity Fund
Goldman Sachs Mid Cap Equity Fund Goldman Sachs Asia Growth Fund
Goldman Sachs Small Cap Value Fund 133 Peterborough Court
Goldman Sachs Real Estate Securities Fund London, England EC4A 2BB
One New York Plaza
New York, New York 10004
GOLDMAN, SACHS & CO.
Transfer Agent
4900 Sears Tower
Chicago, Illinois 60606
</TABLE>
Toll free (in U.S.)
Class A, B and C Shares 800-526-7384
Institutional and Services Shares 800-621-2550
B-3
<PAGE>
INTRODUCTION
Goldman Sachs Trust (the "Trust") is an open-end, management investment
company. The following series of the Trust are described in this Additional
Statement: Goldman Sachs Balanced Fund ("Balanced Fund"), Goldman Sachs Growth
and Income Fund ("Growth and Income Fund"), Goldman Sachs CORE Large Cap Value
Fund ("CORE Large Cap Value Fund"), Goldman Sachs CORE U.S. Equity Fund ("CORE
U.S. Equity Fund")(formerly known as "Goldman Sachs Select Equity Fund"),
Goldman Sachs CORE Large Cap Growth Fund ("CORE Large Cap Growth Fund"), Goldman
Sachs CORE Small Cap Equity Fund ("CORE Small Cap Equity Fund"), Goldman Sachs
CORE International Equity Fund ("CORE International Equity Fund"), Goldman Sachs
Mid Cap Equity Fund ("Mid Cap Equity Fund"), Goldman Sachs Capital Growth Fund
("Capital Growth Fund"), Goldman Sachs International Equity Fund
("International Equity Fund"), Goldman Sachs Small Cap Value Fund ("Small Cap
Value Fund"), Goldman Sachs European Equity Fund ("European Equity Fund"),
Goldman Sachs Japanese Equity Fund ("Japanese Equity Fund"), Goldman Sachs
International Small Cap Fund ("International Small Cap Fund"), Goldman Sachs
Emerging Markets Equity Fund ("Emerging Markets Equity Fund"), Goldman Sachs
Asia Growth Fund ("Asia Growth Fund") and Goldman Sachs Real Estate Securities
Fund ("Real Estate Securities Fund") (collectively referred to herein as the
"Funds").
The Funds, except the European Equity, Japanese Equity, International Small
Cap, CORE Large Cap Value, CORE Large Cap Growth, CORE International Equity,
CORE Small Cap Equity and Real Estate Securities Funds, were initially organized
as a series of a corporation formed under the laws of the State of Maryland on
September 27, 1989 and were reorganized as a Delaware business trust as of April
30, 1997. The Trustees have authority under the Trust's charter to create and
classify shares into separate series and to classify and reclassify any series
or portfolio of shares into one or more classes without further action by
shareholders. Pursuant thereto, the Trustees have created the Funds and other
series. Additional series may be added in the future from time to time. Each
Fund currently offers five classes of shares: Class A Shares, Class B Shares,
Class C Shares, Institutional Shares and Service Shares. See "Shares of the
Trust."
Goldman Sachs Asset Management, ("GSAM") a separate operating division of
Goldman, Sachs & Co. ("Goldman Sachs"), serves as investment adviser to the
Balanced, Growth and Income, CORE Large Cap Value, CORE Large Cap Growth, CORE
Small Cap Equity, CORE International Equity, Real Estate Securities, Mid Cap
Equity and Small Cap Equity Funds. Goldman Sachs Fund Management, L.P.,
("GSFM") an affiliate of Goldman Sachs, serves as investment adviser to the CORE
U.S. Equity and Capital Growth Funds. Goldman Sachs Asset Management
International ("GSAMI"), an affiliate of Goldman Sachs, serves as investment
adviser to the International Equity, European Equity, Japanese Equity,
International Small Cap, Emerging Markets Equity and Asia Growth Funds. GSAM,
GSFM and GSAMI are sometimes referred to collectively herein as the "Advisers."
Goldman Sachs serves as each Fund's distributor and transfer agent. Each Fund's
custodian is State Street Bank and Trust Company ("State Street").
B-4
<PAGE>
The following information relates to and supplements the description of
each Fund's investment policies contained in the Prospectus. See the
Prospectuses for a fuller description of the Funds' investment objectives and
policies. There is no assurance that each Fund will achieve its objective.
B-5
<PAGE>
INVESTMENT POLICIES
Each Fund's share price will fluctuate with market, economic and, to the
extent applicable, foreign exchange conditions, so that an investment in any of
the Funds may be worth more or less when redeemed than when purchased. None of
the Funds should be relied upon as a complete investment program.
BALANCED FUND
- -------------
The investment objective of the Balanced Fund is to provide shareholders
with long-term capital growth and current income. The Balanced Fund seeks to
achieve its investment objective by investing in a balanced portfolio
diversified among both equity and fixed income securities.
Balanced Fund is intended to provide a foundation on which an investor can
build an investment portfolio or to serve as the core of an investment program,
depending on the investor's goals. Balanced Fund is designed for relatively
conservative investors who seek a combination of long-term capital growth and
current income in a single investment. Balanced Fund offers a portfolio of
equity and fixed income securities intended to provide less volatility than a
portfolio completely invested in equity securities and greater diversification
than a portfolio invested in only one asset class. Balanced Fund may be
appropriate for people who seek capital appreciation but are concerned about the
volatility typically associated with a fund that invests solely in stocks and
other equity securities.
FIXED INCOME STRATEGIES DESIGNED TO MAXIMIZE RETURN AND MANAGE RISK
- -------------------------------------------------------------------
GSAM's approach to managing the fixed income portion of Balanced Fund's
portfolio seeks to provide high returns relative to a market benchmark, the
Lehman Brothers Aggregate Bond Index, while also seeking to provide high current
income. This approach emphasizes (1) sector allocation strategies which enable
GSAM to tactically overweight or underweight one sector of the fixed-income
market (i.e., mortgages, corporate bonds, U.S. Treasuries, non-dollar bonds,
emerging market debt) versus another; (2) individual security selection based on
identifying relative value (fixed income securities inexpensive relative to
others in their sector); and (3) to a lesser extent, strategies based on GSAM's
expectation of the direction of interest rates or the spread between short-term
and long-term interest rates such as yield curve strategy.
GSAM seeks to manage fixed income portfolio risk in a number of ways.
These include diversifying the fixed income portion of the Balanced Fund's
portfolio among various types of fixed income securities and utilizing
sophisticated quantitative models to understand how the fixed income portion of
the portfolio will perform under a variety of market and economic scenarios.
In addition, GSAM uses extensive credit analysis to select and to monitor any
investment-grade or non-investment grade bonds that may be included in the
Balanced Fund's portfolio. In employing this and other investment strategies,
the GSAM team has access to extensive fundamental research and analysis
available through Goldman Sachs and a broad range of other sources.
B-6
<PAGE>
A number of investment strategies will be used in selecting fixed income
securities for the Fund's portfolio. GSAM's fixed income investment philosophy
is to actively manage the portfolio within a risk-controlled framework. The
Adviser de-emphasizes interest rate anticipation by monitoring the duration of
the portfolio within a narrow range of the Adviser's target duration, and
instead focuses on seeking to add value through sector selection, security
selection and yield curve strategies.
MARKET SECTOR SELECTION. Market sector selection is the underweighting or
overweighting of one or more market sectors (i.e., U.S. Treasuries, U.S.
Government agency securities, corporate securities, mortgage-backed securities
and asset-backed securities). GSAM may decide to overweight or underweight a
given market sector or subsector (e.g., within the corporate sector,
industrials, financial issuers and utilities) based on, among other things,
expectations of future yield spreads between different sectors or subsectors.
ISSUER SELECTION. Issuer selection is the purchase and sale of corporate
securities based on a corporation's current and expected credit standing (within
the constraints imposed by Balanced Fund's minimum credit quality requirements).
This strategy focuses on four types of investment-grade corporate issuers.
Selection of securities from the first type of issuers - those with low but
stable credit - is intended to enhance total returns by providing incremental
yield. Selecting securities from the second type of issuers - those with low
and intermediate but improving credit quality - is intended to enhance total
returns in two stages. Initially, these securities are expected to provide
incremental yield. Eventually, price appreciation should occur relative to
alternative securities as credit quality improves, the nationally recognized
statistical rating organizations upgrade credit ratings, and credit spreads
narrow. Securities from the third type of issuers - issuers with deteriorating
credit quality - will be avoided, since total returns are typically enhanced by
avoiding the widening of credit spreads and the consequent relative price
depreciation. Finally, total returns can be enhanced by focusing on securities
that are rated differently by different rating organizations. If the securities
are trading in line with the higher published quality rating while GSAM concurs
with the lower published quality rating, the securities would generally be sold
and any potential price deterioration avoided. On the other hand, if the
securities are trading in line with the lower published quality rating while the
higher published quality rating is considered more realistic, the securities may
be purchased in anticipation of the expected market reevaluation and relative
price appreciation.
YIELD CURVE STRATEGY. Yield curve strategy consists of overweighting or
underweighting different maturity sectors relative to a benchmark to take
advantage of the shape of the yield curve. Three alternative maturity sector
selections are available: a "barbell" strategy in which short and long maturity
sectors are overweighted while intermediate maturity sectors are underweighted;
a "bullet" strategy in which, conversely, short-and long-maturity sectors are
underweighted while intermediate-maturity sectors are overweighted; and a
"neutral yield curve" strategy in which the maturity distribution mirrors that
of a benchmark.
B-7
<PAGE>
CORE LARGE CAP VALUE, CORE U.S. EQUITY, CORE LARGE CAP GROWTH, CORE SMALL CAP
EQUITY AND CORE INTERNATIONAL EQUITY FUNDS
- ---------------------------------------------------------------------------
Under normal circumstances, these Funds will invest at least 90% of their
total assets in equity securities.
The investment strategy of the CORE Large Cap Value, CORE U.S. Equity, CORE
Large Cap Growth, CORE Small Cap Equity and CORE International Equity Funds will
be implemented to the extent it is consistent with maintaining a Fund's
qualification as a regulated investment company under the Internal Revenue Code.
Since normal settlement for equity securities is three trading days (for
certain international markets settlement may be longer), the Funds will need to
hold cash balances to satisfy shareholder redemption requests. Such cash
balances will normally range from 2% to 5% of a Fund's net assets. The CORE
Large Cap Value, CORE U.S. Equity and CORE Large Cap Equity Funds may purchase
futures contracts only with respect to the S&P 500 Index (in the case of CORE
U.S. Equity Fund) and a representative index (in the case of CORE Large Cap
Value, CORE Large Cap Growth Funds) in order to keep a Fund's effective equity
exposure close to 100%. The CORE Small Cap Equity and CORE International Equity
Funds may purchase other types of futures contracts as described under
"Investment Policies Futures Contracts and Options on Futures Contracts." The
other Funds may purchase and sell futures contracts based on various securities
(such as U.S. Government Securities), securities indicies, foreign currencies
and other financial instruments and indicies. For example, if cash balances are
equal to 10% of the net assets, the Fund may enter into long futures contracts
covering an amount equal to 10% of the Fund's net assets. As cash balances
fluctuate based on new contributions or withdrawals, a Fund may enter into
additional contracts or close out existing positions.
THE MULTIFACTOR MODELS. The Multifactor Models are rigorous computerized
rating systems for evaluating different equity markets, currencies and
individual equity securities according to a variety of investment
characteristics (or factors). The factors used by the Multifactor Models
incorporate many variables studied by traditional fundamental analysts and cover
measures of value, growth, momentum, risk (e.g. price/earnings ratio, book/price
ratio, growth forecasts, earning estimate revisions, price momentum, volatility
and earnings stability). All of these factors have been shown to significantly
impact the performance of the equity securities, currencies and markets they
were designated to forecast.
Because they include many disparate factors, the Adviser believes that the
Multifactor Models are broader in scope and provide a more thorough evaluation
than most conventional, value-oriented quantitative models. As a result, the
securities, currencies and markets ranked highest by the Multifactor Models do
not have one dominant investment characteristic (such as a low price/earnings
ratio); rather, such securities or markets possess many different investment
characteristics. By using a variety of relevant factors to select securities,
currencies or markets, the Adviser believes that the Fund will be better
balanced and have more consistent performance than an investment portfolio that
uses only one or two factors to select such investments.
B-8
<PAGE>
The Adviser will monitor, and may occasionally suggest and make changes to,
the method by which securities, currencies or markets are selected for or
weighted in a Fund. Such changes (which may be the result of changes in the
Multifactor Models or the method of applying the Multifactor Models) may
include: (i) evolutionary changes to the structure of the Multifactor Models
(e.g., the addition of new factors or a new means of weighting the factors);
(ii) changes in trading procedures (e.g., trading frequency or the manner in
which a Fund uses futures); or (iii) changes in the method by which securities,
currencies or markets are weighted in a Fund. Any such changes will preserve a
Fund's basic investment philosophy of combining qualitative and quantitative
methods of selecting securities using a disciplined investment process.
INTERNATIONAL EQUITY FUND
- -------------------------
International Equity Fund will seek to achieve its investment objective by
investing primarily in equity and equity-related securities of issuers that are
organized outside the United States or whose securities are principally traded
outside the United States. Because research coverage outside the United States
is fragmented and relatively unsophisticated, many foreign companies that are
well-positioned to grow and prosper have not come to the attention of investors.
GSAMI believes that the high historical returns and less efficient pricing of
foreign markets create favorable conditions for the International Equity Fund's
highly focused investment approach. For a description of the risks of the
International Equity Fund's investments in Asia, see "Investing in Emerging
Markets, including Asia and Eastern European."
A RIGOROUS PROCESS OF STOCK SELECTION. Using fundamental industry and
company research, GSAMI's equity team in London, Singapore and Tokyo seeks to
identify companies that may achieve superior long-term returns. Stocks are
carefully selected for International Equity Fund's portfolio through a three-
stage investment process. Because the International Equity Fund is a long-term
holder of stocks, the portfolio managers adjust the Fund's portfolio only when
expected returns fall below acceptable levels or when the portfolio managers
identify substantially more attractive investments.
Using the research of Goldman Sachs as well as information gathered from
other sources in Europe and the Asia-Pacific region, the Adviser seeks to
identify attractive industries around the world. Such industries are expected
to have favorable underlying economics and allow companies to generate
sustainable and predictable high returns. As a rule, they are less economically
sensitive, relatively free of regulation and favor strong franchises.
Within these industries the Adviser seeks to identify well-run companies
that enjoy a stable competitive advantage and are able to benefit from the
favorable dynamics of the industry. This stage includes analyzing the current
and expected financial performance of the company; contacting suppliers,
customers and competitors; and meeting with management. In particular, the
portfolio managers look for companies whose managers have a strong commitment to
both maintaining the high returns of the existing business and reinvesting the
capital generated at high rates of return. Management should act in the
interests of the owners and seek to maximize returns to all stockholders.
B-9
<PAGE>
GSAMI's currency team manages the foreign exchange risk embedded in foreign
equities by means of a currency overlay program. The program may be utilized to
protect the value of foreign investments in sustained periods of dollar
appreciation and to add returns by seeking to take advantage of foreign exchange
fluctuations.
The members of GSAMI's international equity team bring together years of
experience in analyzing and investing in companies in Europe and the Asia-
Pacific region. Their expertise spans a wide range of skills including
investment analysis, investment management, investment banking and business
consulting. GSAM's worldwide staff of over 300 professionals includes portfolio
managers based in London, Singapore and Tokyo who bring firsthand knowledge of
their local markets and companies to every investment decision.
CORPORATE DEBT OBLIGATIONS
- --------------------------
Each Fund may, under normal market conditions, invest in corporate debt
obligations, including obligations of industrial, utility and financial issuers.
CORE Large Cap Value, CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap
Equity and CORE International Equity Funds may only invest in debt securities
that are cash equivalents. Corporate debt obligations are subject to the risk of
an issuer's inability to meet principal and interest payments on the obligations
and may also be subject to price volatility due to such factors as market
interest rates, market perception of the creditworthiness of the issuer and
general market liquidity.
An economic downturn could severely affect the ability of highly leveraged
issuers of junk bond securities to service their debt obligations or to repay
their obligations upon maturity. Factors having an adverse impact on the market
value of junk bonds will have an adverse effect on a Fund's net asset value to
the extent it invests in such securities. In addition, a Fund may incur
additional expenses to the extent it is required to seek recovery upon a default
in payment of principal or interest on its portfolio holdings.
The secondary market for junk bonds, which is concentrated in relatively
few market makers, may not be as liquid as the secondary market for more highly
rated securities. This reduced liquidity may have an adverse effect on the
ability of Balanced, Growth and Income, Capital Growth, Mid Cap Equity, Small
Cap Value, International Equity, European Equity, Japanese Equity, International
Small Cap, Emerging Markets Equity, Asia Growth and Real Estate Securities Funds
to dispose of a particular security when necessary to meet their redemption
requests or other liquidity needs. Under adverse market or economic conditions,
the secondary market for junk bonds could contract further, independent of any
specific adverse changes in the condition of a particular issuer. As a result,
the Advisers could find it difficult to sell these securities or may be able to
sell the securities only at prices lower than if such securities were widely
traded. Prices realized upon the sale of such lower rated or unrated
securities, under such circumstances, may be less than the prices used in
calculating a Fund's net asset value.
Since investors generally perceive that there are greater risks associated
with the medium to lower rated securities of the type in which Balanced, Growth
and Income, Capital Growth,
B-10
<PAGE>
Mid Cap Equity, Small Cap Value, International Equity, European Equity, Japanese
Equity, International Small Cap, Emerging Markets Equity, Asia Growth and Real
Estate Securities Funds may invest, the yields and prices of such securities may
tend to fluctuate more than those for higher rated securities. In the lower
quality segments of the fixed-income securities market, changes in perceptions
of issuers' creditworthiness tend to occur more frequently and in a more
pronounced manner than do changes in higher quality segments of the fixed-income
securities market, resulting in greater yield and price volatility.
Another factor which causes fluctuations in the prices of fixed-income
securities is the supply and demand for similarly rated securities. In
addition, the prices of fixed-income securities fluctuate in response to the
general level of interest rates. Fluctuations in the prices of portfolio
securities subsequent to their acquisition will not affect cash income from such
securities but will be reflected in a Fund's net asset value.
Medium to lower rated and comparable non-rated securities tend to offer
higher yields than higher rated securities with the same maturities because the
historical financial condition of the issuers of such securities may not have
been as strong as that of other issuers. Since medium to lower rated securities
generally involve greater risks of loss of income and principal than higher
rated securities, investors should consider carefully the relative risks
associated with investment in securities which carry medium to lower ratings and
in comparable unrated securities. In addition to the risk of default, there are
the related costs of recovery on defaulted issues. The Advisers will attempt to
reduce these risks through portfolio diversification and by analysis of each
issuer and its ability to make timely payments of income and principal, as well
as broad economic trends and corporate developments.
ZERO COUPON BONDS
- -----------------
A Fund's investments in fixed income securities may include zero coupon
bonds, which are debt obligations issued or purchased at a significant discount
from face value. The discount approximates the total amount of interest the
bonds would have accrued and compounded over the period until maturity. Zero
coupon bonds do not require the periodic payment of interest. Such investments
benefit the issuer by mitigating its need for cash to meet debt service but also
require a higher rate of return to attract investors who are willing to defer
receipt of such cash. Such investments may experience greater volatility in
market value than debt obligations which provide for regular payments of
interest. In addition, if an issuer of zero coupon bonds held by a Fund
defaults, the Fund may obtain no return at all on its investment. Each Fund
will accrue income on such investments for each taxable year which (net of
deductible expenses, if any) is distributable to shareholders and which, because
no cash is generally received at the time of accrual, may require the
liquidation of other portfolio securities to obtain sufficient cash to satisfy
the Fund's distribution obligations. See "Taxation."
VARIABLE AND FLOATING RATE SECURITIES
- -------------------------------------
The interest rates payable on certain fixed income securities in which a
Fund may invest are not fixed and may fluctuate based upon changes in market
rates. A variable rate obligation has an interest rate which is adjusted at
predesignated periods in response to changes in the
B-11
<PAGE>
market rate of interest on which the interest rate is based. Variable and
floating rate obligations are less effective than fixed rate instruments at
locking in a particular yield. Nevertheless, such obligations may fluctuate in
value in response to interest rate changes if there is a delay between changes
in market interest rates and the interest reset date for the obligation.
CUSTODIAL RECEIPTS
- ------------------
Each Fund may invest up to 5% of its net assets in custodial receipts in
respect of securities issued or guaranteed as to principal and interest by the
U.S. Government, its agencies, instrumentalities, political subdivisions or
authorities. Such custodial receipts evidence ownership of future interest
payments, principal payments or both on certain notes or bonds issued by the
U.S. Government, its agencies, instrumentalities, political subdivisions or
authorities. These custodial receipts are known by various names, including
"Treasury Receipts," "Treasury Investors Growth Receipts" ("TIGRs"), and
"Certificates of Accrual on Treasury Securities" ("CATs"). For securities law
purposes, custodial receipts are not considered U.S. Government securities.
MUNICIPAL SECURITIES
- --------------------
Balanced Fund may invest up to 5% of its net assets in municipal
securities. Municipal securities consist of bonds, notes and other instruments
issued by or on behalf of states, territories and possessions of the United
States (including the District of Columbia) and their political subdivisions,
agencies or instrumentalities, the interest on which is exempt from regular
federal income tax. Municipal securities are often issued to obtain funds for
various public purposes. Municipal securities also include "private activity
bonds" or industrial development bonds, which are issued by or on behalf of
public authorities to obtain funds for privately operated facilities, such as
airports and waste disposal facilities, and, in some cases, commercial and
industrial facilities.
The yields and market values of municipal securities are determined
primarily by the general level of interest rates, the creditworthiness of the
issuers of municipal securities and economic and political conditions affecting
such issuers. Due to their tax exempt status, the yields and market prices of
municipal securities may be adversely affected by changes in tax rates and
policies, which may have less effect on the market for taxable fixed income
securities. Moreover, certain types of municipal securities, such as housing
revenue bonds, involve prepayment risks which could affect the yield on such
securities.
Investments in municipal securities are subject to the risk that the issuer
could default on its obligations. Such a default could result from the
inadequacy of the sources or revenues from which interest and principal payments
are to be made or the assets collateralizing such obligations. Revenue bonds,
including private activity bonds, are backed only by specific assets or revenue
sources and not by the full faith and credit of the governmental issuer.
MORTGAGE-BACKED SECURITIES
- --------------------------
B-12
<PAGE>
GENERAL CHARACTERISTICS. Each Fund (other than CORE Large Cap Value, CORE
U.S. Equity, CORE Large Cap Growth, CORE Small Cap Equity and CORE International
Equity Funds) may invest in mortgage-backed securities. Each mortgage pool
underlying mortgage-backed securities consists of mortgage loans evidenced by
promissory notes secured by first mortgages or first deeds of trust or other
similar security instruments creating a first lien on owner occupied and non-
owner occupied one-unit to four-unit residential properties, multifamily (i.e.,
five or more) properties, agriculture properties, commercial properties and
mixed use properties (the "Mortgaged Properties"). The Mortgaged Properties may
consist of detached individual dwelling units, multifamily dwelling units,
individual condominiums, townhouses, duplexes, triplexes, fourplexes, row
houses, individual units in planned unit developments and other attached
dwelling units. The Mortgaged Properties may also include residential
investment properties and second homes.
The investment characteristics of adjustable and fixed rate mortgage-backed
securities differ from those of traditional fixed income securities. The major
differences include the payment of interest and principal on mortgage-backed
securities on a more frequent (usually monthly) schedule, and the possibility
that principal may be prepaid at any time due to prepayments on the underlying
mortgage loans or other assets. These differences can result in significantly
greater price and yield volatility than is the case with traditional fixed
income securities. As a result, if a Fund purchases mortgage-backed securities
at a premium, a faster than expected prepayment rate will reduce both the market
value and the yield to maturity from those which were anticipated. A prepayment
rate that is slower than expected will have the opposite effect of increasing
yield to maturity and market value. Conversely, if a Fund purchases mortgage-
backed securities at a discount, faster than expected prepayments will increase,
while slower than expected prepayments will reduce yield to maturity and market
values. To the extent that a Fund invests in mortgage-backed securities, the
Advisers may seek to manage these potential risks by investing in a variety of
mortgage-backed securities and by using certain hedging techniques.
GOVERNMENT GUARANTEED MORTGAGE-BACKED SECURITIES. There are several types
of guaranteed mortgage-backed securities currently available, including
guaranteed mortgage pass-through certificates and multiple class securities,
which include guaranteed Real Estate Mortgage Investment Conduit Certificates
("REMIC Certificates"), collateralized mortgage obligations and stripped
mortgage-backed securities. A Fund is permitted to invest in other types of
mortgage-backed securities that may be available in the future to the extent
consistent with its investment policies and objective.
A Fund's investments in mortgage-backed securities may include securities
issued or guaranteed by the U.S. Government or one of its agencies, authorities,
instrumentalities or sponsored enterprises, such as the Government National
Mortgage Association ("Ginnie Mae"), the Federal National Mortgage Association
("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac").
GINNIE MAE CERTIFICATES. Ginnie Mae is a wholly-owned corporate
instrumentality of the United States. Ginnie Mae is authorized to guarantee the
timely payment of the principal of and interest on certificates that are based
on and backed by a pool of mortgage loans insured by
B-13
<PAGE>
the Federal Housing Administration ("FHA Loans"), or guaranteed by the Veterans
Administration ("VA Loans"), or by pools of other eligible mortgage loans. In
order to meet its obligations under any guaranty, Ginnie Mae is authorized to
borrow from the United States Treasury in an unlimited amount.
FANNIE MAE CERTIFICATES. Fannie Mae is a stockholder-owned corporation
chartered under an act of the United States Congress. Each Fannie Mae
Certificate is issued and guaranteed by Fannie Mae and represents an undivided
interest in a pool of mortgage loans (a "Pool") formed by Fannie Mae. Each Pool
consists of residential mortgage loans ("Mortgage Loans") either previously
owned by Fannie Mae or purchased by it in connection with the formation of the
Pool. The Mortgage Loans may be either conventional Mortgage Loans (i.e., not
insured or guaranteed by any U.S. Government agency) or Mortgage Loans that are
either insured by the Federal Housing Administration ("FHA") or guaranteed by
the Veterans Administration ("VA"). However, the Mortgage Loans in Fannie Mae
Pools are primarily conventional Mortgage Loans. The lenders originating and
servicing the Mortgage Loans are subject to certain eligibility requirements
established by Fannie Mae.
Fannie Mae has certain contractual responsibilities. With respect to each
Pool, Fannie Mae is obligated to distribute scheduled monthly installments of
principal and interest after Fannie Mae's servicing and guaranty fee, whether or
not received, to Certificate holders. Fannie Mae also is obligated to
distribute to holders of Certificates an amount equal to the full principal
balance of any foreclosed Mortgage Loan, whether or not such principal balance
is actually recovered. The obligations of Fannie Mae under its guaranty of the
Fannie Mae Certificates are obligations solely of Fannie Mae.
FREDDIE MAC CERTIFICATES. Freddie Mac is a publicly held U.S. Government
sponsored enterprise. The principal activity of Freddie Mac currently is the
purchase of first lien, conventional, residential mortgage loans and
participation interests in such mortgage loans and their resale in the form of
mortgage securities, primarily Freddie Mac Certificates. A Freddie Mac
Certificate represents a pro rata interest in a group of mortgage loans or
participation in mortgage loans (a "Freddie Mac Certificate group") purchased by
Freddie Mac.
Freddie Mac guarantees to each registered holder of a Freddie Mac
Certificate the timely payment of interest at the rate provided for by such
Freddie Mac Certificate (whether or not received on the underlying loans).
Freddie Mac also guarantees to each registered Certificate holder ultimate
collection of all principal of the related mortgage loans, without any offset or
deduction, but does not, generally, guarantee the timely payment of scheduled
principal. The obligations of Freddie Mac under its guaranty of Freddie Mac
Certificates are obligations solely of Freddie Mac.
The mortgage loans underlying the Freddie Mac and Fannie Mae Certificates
consist of adjustable rate or fixed rate mortgage loans with original terms to
maturity of between five and thirty years. Substantially all of these mortgage
loans are secured by first liens on one-to-four-family residential properties or
multifamily projects. Each mortgage loan must meet the applicable standards set
forth in the law creating Freddie Mac or Fannie Mae. A Freddie Mac
B-14
<PAGE>
Certificate group may include whole loans, participation interests in whole
loans and undivided interests in whole loans and participations comprising
another Freddie Mac Certificate group.
MORTGAGE PASS-THROUGH SECURITIES. Each Fund (other than CORE Large Cap
Value, CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap Equity and CORE
International Equity Funds) may invest in both government guaranteed and
privately issued mortgage pass-through securities ("Mortgage Pass-Throughs");
that is, fixed or adjustable rate mortgage-backed securities which provide for
monthly payments that are a "pass-through" of the monthly interest and principal
payments (including any prepayments) made by the individual borrowers on the
pooled mortgage loans, net of any fees or other amounts paid to any guarantor,
administrator and/or servicer of the underlying mortgage loans.
The following discussion describes only a few of the wide variety of
structures of Mortgage Pass-Throughs that are available or may be issued.
DESCRIPTION OF CERTIFICATES. Mortgage Pass-Throughs may be issued in one
or more classes of senior certificates and one or more classes of subordinate
certificates. Each such class may bear a different pass-through rate.
Generally, each certificate will evidence the specified interest of the holder
thereof in the payments of principal or interest or both in respect of the
mortgage pool comprising part of the trust fund for such certificates.
Any class of certificates may also be divided into subclasses entitled to
varying amounts of principal and interest. If a REMIC election has been made,
certificates of such subclasses may be entitled to payments on the basis of a
stated principal balance and stated interest rate, and payments among different
subclasses may be made on a sequential, concurrent, pro rata or disproportionate
--------
basis, or any combination thereof. The stated interest rate on any such
subclass of certificates may be a fixed rate or one which varies in direct or
inverse relationship to an objective interest index.
Generally, each registered holder of a certificate will be entitled to
receive its pro rata share of monthly distributions of all or a portion of
--------
principal of the underlying mortgage loans or of interest on the principal
balances thereof, which accrues at the applicable mortgage pass-through rate, or
both. The difference between the mortgage interest rate and the related
mortgage pass-through rate (less the amount, if any, of retained yield) with
respect to each mortgage loan will generally be paid to the servicer as a
servicing fee. Since certain adjustable rate mortgage loans included in a
mortgage pool may provide for deferred interest (i.e., negative amortization),
the amount of interest actually paid by a mortgagor in any month may be less
than the amount of interest accrued on the outstanding principal balance of the
related mortgage loan during the relevant period at the applicable mortgage
interest rate. In such event, the amount of interest that is treated as
deferred interest will be added to the principal balance of the related mortgage
loan and will be distributed pro rata to certificate-holders as principal of
--------
such mortgage loan when paid by the mortgagor in subsequent monthly payments or
at maturity.
RATINGS. The ratings assigned by a rating organization to Mortgage Pass-
Throughs address the likelihood of the receipt of all distributions on the
underlying mortgage loans by the related certificate-holders under the
agreements pursuant to which such certificates are issued.
B-15
<PAGE>
A rating organization's ratings take into consideration the credit quality of
the related mortgage pool, including any credit support providers, structural
and legal aspects associated with such certificates, and the extent to which the
payment stream on such mortgage pool is adequate to make payments required by
such certificates. A rating organization's ratings on such certificates do not,
however, constitute a statement regarding frequency of prepayments on the
related mortgage loans. In addition, the rating assigned by a rating
organization to a certificate does not address the remote possibility that, in
the event of the insolvency of the issuer of certificates where a subordinated
interest was retained, the issuance and sale of the senior certificates may be
recharacterized as a financing and, as a result of such recharacterization,
payments on such certificates may be affected.
CREDIT ENHANCEMENT. Credit support falls generally into two categories:
(i) liquidity protection and (ii) protection against losses resulting from
default by an obligor on the underlying assets. Liquidity protection refers to
the provision of advances, generally by the entity administering the pools of
mortgages, the provision of a reserve fund, or a combination thereof, to ensure,
subject to certain limitations, that scheduled payments on the underlying pool
are made in a timely fashion. Protection against losses resulting from default
ensures ultimate payment of the obligations on at least a portion of the assets
in the pool. Such credit support can be provided by among other things, payment
guarantees, letters of credit, pool insurance, subordination, or any combination
thereof.
SUBORDINATION; SHIFTING OF INTEREST; RESERVE FUND. In order to achieve
ratings on one or more classes of Mortgage Pass-Throughs, one or more classes of
certificates may be subordinate certificates which provide that the rights of
the subordinate certificate-holders to receive any or a specified portion of
distributions with respect to the underlying mortgage loans may be subordinated
to the rights of the senior certificate-holders. If so structured, the
subordination feature may be enhanced by distributing to the senior certificate-
holders on certain distribution dates, as payment of principal, a specified
percentage (which generally declines over time) of all principal payments
received during the preceding prepayment period ("shifting interest credit
enhancement"). This will have the effect of accelerating the amortization of
the senior certificates while increasing the interest in the trust fund
evidenced by the subordinate certificates. Increasing the interest of the
subordinate certificates relative to that of the senior certificates is intended
to preserve the availability of the subordination provided by the subordinate
certificates. In addition, because the senior certificate-holders in a shifting
interest credit enhancement structure are entitled to receive a percentage of
principal prepayments which is greater than their proportionate interest in the
trust fund, the rate of principal prepayments on the mortgage loans will have an
even greater effect on the rate of principal payments and the amount of interest
payments on, and the yield to maturity of, the senior certificates.
In addition to providing for a preferential right of the senior
certificate-holders to receive current distributions from the mortgage pool, a
reserve fund may be established relating to such certificates (the "Reserve
Fund"). The Reserve Fund may be created with an initial cash deposit by the
originator or servicer and augmented by the retention of distributions otherwise
available to the subordinate certificate-holders or by excess servicing fees
until the Reserve Fund reaches a specified amount.
B-16
<PAGE>
The subordination feature, and any Reserve Fund, are intended to enhance
the likelihood of timely receipt by senior certificate-holders of the full
amount of scheduled monthly payments of principal and interest due them and will
protect the senior certificate-holders against certain losses; however, in
certain circumstances the Reserve Fund could be depleted and temporary
shortfalls could result. In the event the Reserve Fund is depleted before the
subordinated amount is reduced to zero, senior certificate-holders will
nevertheless have a preferential right to receive current distributions from the
mortgage pool to the extent of the then outstanding subordinated amount. Unless
otherwise specified, until the subordinated amount is reduced to zero, on any
distribution date any amount otherwise distributable to the subordinate
certificates or, to the extent specified, in the Reserve Fund will generally be
used to offset the amount of any losses realized with respect to the mortgage
loans ("Realized Losses"). Realized Losses remaining after application of such
amounts will generally be applied to reduce the ownership interest of the
subordinate certificates in the mortgage pool. If the subordinated amount has
been reduced to zero, Realized Losses generally will be allocated pro rata among
--------
all certificate-holders in proportion to their respective outstanding interests
in the mortgage pool.
ALTERNATIVE CREDIT ENHANCEMENT. As an alternative, or in addition to the
credit enhancement afforded by subordination, credit enhancement for Mortgage
Pass-Throughs may be provided by mortgage insurance, hazard insurance, by the
deposit of cash, certificates of deposit, letters of credit, a limited guaranty
or by such other methods as are acceptable to a rating agency. In certain
circumstances, such as where credit enhancement is provided by guarantees or a
letter of credit, the security is subject to credit risk because of its exposure
to an external credit enhancement provider.
VOLUNTARY ADVANCES. Generally, in the event of delinquencies in payments
on the mortgage loans underlying the Mortgage Pass-Throughs, the servicer agrees
to make advances of cash for the benefit of certificate-holders, but only to the
extent that it determines such voluntary advances will be recoverable from
future payments and collections on the mortgage loans or otherwise.
OPTIONAL TERMINATION. Generally, the servicer may, at its option with
respect to any certificates, repurchase all of the underlying mortgage loans
remaining outstanding at such time as the aggregate outstanding principal
balance of such mortgage loans is less than a specified percentage (generally 5-
10%) of the aggregate outstanding principal balance of the mortgage loans as of
the cut-off date specified with respect to such series.
MULTIPLE CLASS MORTGAGE-BACKED SECURITIES AND COLLATERALIZED MORTGAGE
OBLIGATIONS. A Fund may invest in multiple class securities including
collateralized mortgage obligations ("CMOs") and REMIC Certificates. These
securities may be issued by U.S. Government agencies and instrumentalities such
as Fannie Mae or Freddie Mac or by trusts formed by private originators of, or
investors in, mortgage loans, including savings and loan associations, mortgage
bankers, commercial banks, insurance companies, investment banks and special
purpose subsidiaries of the foregoing. In general, CMOs are debt obligations of
a legal entity that are collateralized by, and multiple class mortgage-backed
securities represent direct ownership interests in, a pool of mortgage loans or
mortgage-backed securities the payments on which are used to make payments on
the CMOs or multiple class mortgage-backed securities.
B-17
<PAGE>
Fannie Mae REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by Fannie Mae. In addition, Fannie Mae
will be obligated to distribute the principal balance of each class of REMIC
Certificates in full, whether or not sufficient funds are otherwise available.
Freddie Mac guarantees the timely payment of interest on Freddie Mac REMIC
Certificates and also guarantees the payment of principal as payments are
required to be made on the underlying mortgage participation certificates
("PCs"). PCs represent undivided interests in specified level payment,
residential mortgages or participation therein purchased by Freddie Mac and
placed in a PC pool. With respect to principal payments on PCs, Freddie Mac
generally guarantees ultimate collection of all principal of the related
mortgage loans without offset or deduction. Freddie Mac also guarantees timely
payment of principal of certain PCs.
CMOs and guaranteed REMIC Certificates issued by Fannie Mae and Freddie Mac
are types of multiple class mortgage-backed securities. Investors may purchase
beneficial interests in REMICs, which are known as "regular" interests or
"residual" interests. The Funds do not intend to purchase residual interests in
REMICs. The REMIC Certificates represent beneficial ownership interests in a
REMIC trust, generally consisting of mortgage loans or Fannie Mae, Freddie Mac
or Ginnie Mae guaranteed mortgage- backed securities (the "Mortgage Assets").
The obligations of Fannie Mae or Freddie Mac under their respective guaranty of
the REMIC Certificates are obligations solely of Fannie Mae or Freddie Mac,
respectively.
CMOs and REMIC Certificates are issued in multiple classes. Each class of
CMOs or REMIC Certificates, often referred to as a "tranche," is issued at a
specific adjustable or fixed interest rate and must be fully retired no later
than its final distribution date. Principal prepayments on the Mortgage Loans
or the Mortgage Assets underlying the CMOs or REMIC Certificates may cause some
or all of the classes of CMOs or REMIC Certificates to be retired substantially
earlier than their final distribution dates. Generally, interest is paid or
accrues on all classes of CMOs or REMIC Certificates on a monthly basis.
The principal of and interest on the Mortgage Assets may be allocated among
the several classes of CMOs or REMIC Certificates in various ways. In certain
structures (known as "sequential pay" CMOs or REMIC Certificates), payments of
principal, including any principal prepayments, on the Mortgage Assets generally
are applied to the classes of CMOs or REMIC Certificates in the order of their
respective final distribution dates. Thus, no payment of principal will be made
on any class of sequential pay CMOs or REMIC Certificates until all other
classes having an earlier final distribution date have been paid in full.
Additional structures of CMOs and REMIC Certificates include, among others,
"parallel pay" CMOs and REMIC Certificates. Parallel pay CMOs or REMIC
Certificates are those which are structured to apply principal payments and
prepayments of the Mortgage Assets to two or more classes concurrently on a
proportionate or disproportionate basis. These simultaneous payments are taken
into account in calculating the final distribution date of each class.
B-18
<PAGE>
A wide variety of REMIC Certificates may be issued in parallel pay or
sequential pay structures. These securities include accrual certificates (also
known as "Z-Bonds"), which only accrue interest at a specified rate until all
other certificates having an earlier final distribution date have been retired
and are converted thereafter to an interest-paying security, and planned
amortization class ("PAC") certificates, which are parallel pay REMIC
Certificates that generally require that specified amounts of principal be
applied on each payment date to one or more classes or REMIC Certificates (the
"PAC Certificates"), even though all other principal payments and prepayments of
the Mortgage Assets are then required to be applied to one or more other classes
of the Certificates. The scheduled principal payments for the PAC Certificates
generally have the highest priority on each payment date after interest due has
been paid to all classes entitled to receive interest currently. Shortfalls, if
any, are added to the amount payable on the next payment date. The PAC
Certificate payment schedule is taken into account in calculating the final
distribution date of each class of PAC. In order to create PAC tranches, one or
more tranches generally must be created that absorb most of the volatility in
the underlying mortgage assets. These tranches tend to have market prices and
yields that are much more volatile than other PAC classes.
STRIPPED MORTGAGE-BACKED SECURITIES. The Balanced and Real Estate
Securities Funds may invest in stripped mortgage-backed securities ("SMBS"),
which are derivative multiclass mortgage securities. Although the market for
such securities is increasingly liquid, certain SMBS may not be readily
marketable and will be considered illiquid for purposes of the Fund's limitation
on investments in illiquid securities. The market value of the class consisting
entirely of principal payments generally is unusually volatile in response to
changes in interest rates. The yields on a class of SMBS that receives all or
most of the interest from Mortgage Assets are generally higher than prevailing
market yields on other mortgage-backed securities because their cash flow
patterns are more volatile and there is a greater risk that the initial
investment will not be fully recouped.
INVERSE FLOATING RATE SECURITIES
- --------------------------------
Balanced Fund may invest up to 5% of its net assets in leveraged inverse
floating rate debt instruments ("inverse floaters"). The interest rate on an
inverse floater resets in the opposite direction from the market rate of
interest to which the inverse floater is indexed. An inverse floater may be
considered to be leveraged to the extent that its interest rate varies by a
magnitude that exceeds the magnitude of the change in the index rate of
interest. The higher degree of leverage inherent in inverse floaters is
associated with greater volatility in their market values. Accordingly, the
duration of an inverse floater may exceed its stated final maturity. Certain
inverse floaters may be deemed to be illiquid securities for purposes of the
Fund's 15% limitation on investments in such securities.
ASSET-BACKED SECURITIES
- -----------------------
Asset-backed securities represent participation in, or are secured by and
payable from, assets such as motor vehicle installment sales, installment loan
contracts, leases of various types of real and personal property, receivables
from revolving credit (credit card) agreements and other categories of
receivables. Such assets are securitized through the use of trusts and special
B-19
<PAGE>
purpose corporations. Payments or distributions of principal and interest may be
guaranteed up to certain amounts and for a certain time period by a letter of
credit or a pool insurance policy issued by a financial institution unaffiliated
with the trust or corporation, or other credit enhancements may be present.
Like mortgage-backed securities, asset-backed securities are often subject
to more rapid repayment than their stated maturity date would indicate as a
result of the pass-through of prepayments of principal on the underlying loans.
A Fund's ability to maintain positions in such securities will be affected by
reductions in the principal amount of such securities resulting from
prepayments, and its ability to reinvest the returns of principal at comparable
yields is subject to generally prevailing interest rates at that time. To the
extent that a Fund invests in asset-backed securities, the values of such Fund's
portfolio securities will vary with changes in market interest rates generally
and the differentials in yields among various kinds of asset-backed securities.
Asset-backed securities present certain additional risks that are not
presented by mortgage-backed securities because asset-backed securities
generally do not have the benefit of a security interest in collateral that is
comparable to mortgage assets. Credit card receivables are generally unsecured
and the debtors on such receivables are entitled to the protection of a number
of state and federal consumer credit laws, many of which give such debtors the
right to set-off certain amounts owed on the credit cards, thereby reducing the
balance due. Automobile receivables generally are secured, but by automobiles
rather than residential real property. Most issuers of automobile receivables
permit the loan servicers to retain possession of the underlying obligations.
If the servicer were to sell these obligations to another party, there is a
risk that the purchaser would acquire an interest superior to that of the
holders of the asset-backed securities. In addition, because of the large
number of vehicles involved in a typical issuance and technical requirements
under state laws, the trustee for the holders of the automobile receivables may
not have a proper security interest in the underlying automobiles. Therefore,
there is the possibility that, in some cases, recoveries on repossessed
collateral may not be available to support payments on these securities.
LOAN PARTICIPATIONS
- -------------------
The Balanced Fund may invest in loan participations. Such loans must be to
issuers in whose obligations the Balanced Fund may invest. A loan participation
is an interest in a loan to a U.S. or foreign company or other borrower which is
administered and sold by a financial intermediary. In a typical corporate loan
syndication, a number of lenders, usually banks (co-lenders), lend a corporate
borrower a specified sum pursuant to the terms and conditions of a loan
agreement. One of the co-lenders usually agrees to act as the agent bank with
respect to the loan.
Participation interests acquired by the Balanced Fund may take the form of
a direct or co-lending relationship with the corporate borrower, an assignment
of an interest in the loan by a co-lender or another participant, or a
participation in the seller's share of the loan. When the Balanced Fund acts as
co-lender in connection with a participation interest or when the Balanced Fund
acquires certain participation interests, the Balanced Fund will have direct
recourse against the borrower if the borrower fails to pay scheduled principal
and interest. In cases where the
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<PAGE>
Balanced Fund lacks direct recourse, it will look to the agent bank to enforce
appropriate credit remedies against the borrower. In these cases, the Balanced
Fund may be subject to delays, expenses and risks that are greater than those
that would have been involved if the Fund had purchased a direct obligation
(such as commercial paper) of such borrower. For example, in the event of the
bankruptcy or insolvency of the corporate borrower, a loan participation may be
subject to certain defenses by the borrower as a result of improper conduct by
the agent bank. Moreover, under the terms of the loan participation, the
Balanced Fund may be regarded as a creditor of the agent bank (rather than of
the underlying corporate borrower), so that the Balanced Fund may also be
subject to the risk that the agent bank may become insolvent. The secondary
market, if any, for these loan participations is limited and any loan
participations purchased by the Balanced Fund will be regarded as illiquid.
For purposes of certain investment limitations pertaining to
diversification of the Balanced Fund's portfolio investments, the issuer of a
loan participation will be the underlying borrower. However, in cases where the
Balanced Fund does not have recourse directly against the borrower, both the
borrower and each agent bank and co-lender interposed between the Balanced Fund
and the borrower will be deemed issuers of a loan participation.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
- --------------------------------------------------
Each Fund may purchase and sell futures contracts and may also purchase and
write options on futures contracts. CORE Large Cap Value, CORE U.S. Equity and
CORE Large Cap Growth Funds may only enter into such transactions with respect
to the S&P 500 Index, for the CORE U.S. Equity Fund and a representative index
in the case of the CORE Large Cap Value, CORE Large Cap Growth Funds. The other
Funds may purchase and sell futures contracts based on various securities (such
as U.S. Government securities), securities indices, foreign currencies and other
financial instruments and indices. Each Fund will engage in futures and related
options transactions, only for bona fide hedging purposes as defined below or
for purposes of seeking to increase total return to the extent permitted by
regulations of the Commodity Futures Trading Commission ("CFTC"). Futures
contracts entered into by a Fund are traded on U.S. exchanges or boards of trade
that are licensed and regulated by the CFTC or on foreign exchanges. Neither
the CFTC, National Futures Association nor any domestic exchange regulates
activities of any foreign exchange or boards of trade, including the execution,
delivery and clearing of transactions, or has the power to compel enforcement of
the rules of a foreign exchange or board of trade or any applicable foreign law.
This is true even if the exchange is formally linked to a domestic market so
that a position taken on the market may be liquidated by a transaction on
another market. Moreover, such laws or regulations will vary depending on the
foreign country in which the foreign futures or foreign options transaction
occurs. For these reasons, persons who trade foreign futures or foreign options
contracts may not be afforded certain of the protective measures provided by the
Commodity Exchange Act, the CFTC's regulations and the rules of the National
Futures Association and any domestic exchange, including the right to use
reparations proceedings before the CFTC and arbitration proceedings provided by
the National Futures Association or any domestic futures exchange. In
particular, a Fund's investments in foreign futures or foreign options
transactions may not be provided the same protections in respect of transactions
on United States futures exchanges.
B-21
<PAGE>
FUTURES CONTRACTS. A futures contract may generally be described as an
agreement between two parties to buy and sell particular financial instruments
for an agreed price during a designated month (or to deliver the final cash
settlement price, in the case of a contract relating to an index or otherwise
not calling for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, a Fund can
seek through the sale of futures contracts to offset a decline in the value of
its current portfolio securities. When rates are falling or prices are rising,
a Fund, through the purchase of futures contracts, can attempt to secure better
rates or prices than might later be available in the market when it effects
anticipated purchases. Similarly, each Fund (other than CORE Large Cap Value,
CORE U.S. Equity, CORE Large Cap Growth and CORE Small Cap Equity Funds) can
sell futures contracts on a specified currency to protect against a decline in
the value of such currency and its portfolio securities which are quoted or
denominated in such currency. Each Fund (other than CORE Large Cap Value, CORE
U.S. Equity, CORE Large Cap Growth and CORE Small Cap Equity Funds) can purchase
futures contracts on foreign currency to establish the price in U.S. dollars of
a security quoted or denominated in such currency that such Fund has acquired or
expects to acquire.
Positions taken in the futures market are not normally held to maturity,
but are instead liquidated through offsetting transactions which may result in a
profit or a loss. While each Fund will usually liquidate futures contracts on
securities or currency in this manner, a Fund may instead make or take delivery
of the underlying securities or currency whenever it appears economically
advantageous for the Fund to do so. A clearing corporation associated with the
exchange on which futures are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.
HEDGING STRATEGIES. Hedging, by use of futures contracts, seeks to
establish with more certainty than would otherwise be possible the effective
price, rate of return or currency exchange rate on portfolio securities or
securities that a Fund owns or proposes to acquire. A Fund may, for example,
take a "short" position in the futures market by selling futures contracts to
seek to hedge against an anticipated rise in interest rates or a decline in
market prices or (other than CORE Large Cap Value, CORE U.S. Equity, CORE Large
Cap Growth and CORE Small Cap Equity Funds) foreign currency rates that would
adversely affect the dollar value of such Fund's portfolio securities.
Similarly, each Fund (other than CORE Large Cap Value, CORE U.S. Equity, CORE
Large Cap Growth and CORE Small Cap Equity Funds) may sell futures contracts on
a currency in which its portfolio securities are quoted or denominated or in one
currency to seek to hedge against fluctuations in the value of securities quoted
or denominated in a different currency if there is an established historical
pattern of correlation between the two currencies. If, in the opinion of the
applicable Adviser, there is a sufficient degree of correlation between price
trends for a Fund's portfolio securities and futures contracts based on other
financial instruments, securities indices or other indices, a Fund may also
enter into such futures contracts as part of its hedging strategy. Although
under some circumstances prices of securities in a Fund's portfolio may be more
or less volatile than prices of such futures contracts, the Advisers will
attempt to estimate the extent of this volatility difference based on historical
patterns and compensate for any such differential by having a Fund enter into a
greater or lesser number of futures contracts or by attempting to achieve only a
partial hedge against price
B-22
<PAGE>
changes affecting a Fund's securities portfolio. When hedging of this character
is successful, any depreciation in the value of portfolio securities will be
substantially offset by appreciation in the value of the futures position. On
the other hand, any unanticipated appreciation in the value of a Fund's
portfolio securities would be substantially offset by a decline in the value of
the futures position.
On other occasions, a Fund may take a "long" position by purchasing such
futures contracts. This would be done, for example, when a Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.
OPTIONS ON FUTURES CONTRACTS. The acquisition of put and call options on
futures contracts will give a Fund the right (but not the obligation), for a
specified price, to sell or to purchase, respectively, the underlying futures
contract at any time during the option period. As the purchaser of an option on
a futures contract, a Fund obtains the benefit of the futures position if prices
move in a favorable direction but limits its risk of loss in the event of an
unfavorable price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium
which may partially offset a decline in the value of a Fund's assets. By
writing a call option, a Fund becomes obligated, in exchange for the premium, to
sell a futures contract if the option is exercised, which may have a value
higher than the exercise price. Conversely, the writing of a put option on a
futures contract generates a premium, which may partially offset an increase in
the price of securities that a Fund intends to purchase. However, a Fund
becomes obligated to purchase a futures contract if the option is exercised,
which may have a value lower than the exercise price. Thus, the loss incurred
by a Fund in writing options on futures is potentially unlimited and may exceed
the amount of the premium received. A Fund will incur transaction costs in
connection with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same financial
instrument. There is no guarantee that such closing transactions can be
effected. A Fund's ability to establish and close out positions on such options
will be subject to the development and maintenance of a liquid market.
OTHER CONSIDERATIONS. Each Fund will engage in futures transactions and
will engage in related options transactions only for bona fide hedging as
defined in the regulations of the CFTC or to seek to increase total return to
the extent permitted by such regulations. A Fund will determine that the price
fluctuations in the futures contracts and options on futures used for hedging
purposes are substantially related to price fluctuations in securities held by
the Fund or which it expects to purchase. Except as stated below, each Fund's
futures transactions will be entered into for traditional hedging purposes --
i.e., futures contracts will be sold to protect against a decline in the price
of securities (or the currency in which they are quoted or denominated) that the
Fund owns, or futures contracts will be purchased to protect the Fund
B-23
<PAGE>
against an increase in the price of securities (or the currency in which they
are quoted or denominated) it intends to purchase.
In addition to bona fide hedging, a CFTC regulation permits a Fund to
engage in other future transactions if the aggregate initial margin and premiums
required to establish such positions in futures contracts and options on futures
do not exceed 5% of the net asset value of such Fund's portfolio, after taking
into account unrealized profits and losses on any such positions and excluding
the amount by which such options were in-the-money at the time of purchase. A
Fund will engage in transactions in futures contracts and, for a Fund permitted
to do so, related options transactions only to the extent such transactions are
consistent with the requirements of the Code for maintaining its qualification
as a regulated investment company for federal income tax purposes (see
"Taxation").
Transactions in futures contracts and options on futures involve brokerage
costs, require margin deposits and, in certain cases, require the Fund to
segregate with its custodian cash or liquid assets in an amount equal to the
underlying value of such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for a Fund than if it had not
entered into any futures contracts or options transactions. In the event of an
imperfect correlation between a futures position and a portfolio position which
is intended to be protected, the desired protection may not be obtained and a
Fund may be exposed to risk of loss.
Perfect correlation between a Fund's futures positions and portfolio
positions will be difficult to achieve because no futures contracts based on
individual equity or corporate fixed-income securities are currently available.
In addition, it is not possible for a Fund to hedge fully or perfectly against
currency fluctuations affecting the value of securities quoted or denominated in
foreign currencies because the value of such securities is likely to fluctuate
as a result of independent factors not related to currency fluctuations.
OPTIONS ON SECURITIES AND SECURITIES INDICES
- --------------------------------------------
WRITING COVERED OPTIONS. Each Fund may write (sell) covered call and put
options on any securities in which it may invest (other than CORE Large Cap
Value, CORE U.S. Equity and CORE Large Cap Growth Funds). A call option written
by a Fund obligates such Fund to sell specified securities to the holder of the
option at a specified price if the option is exercised at any time before the
expiration date. All call options written by a Fund are covered, which means
that such Fund will own the securities subject to the option as long as the
option is outstanding or such Fund will use the other methods described below.
A Fund's purpose in writing covered call options is to realize greater income
than would be realized on portfolio securities transactions alone. However, a
Fund may forego the opportunity to profit from an increase in the market price
of the underlying security.
B-24
<PAGE>
A put option written by a Fund would obligate such Fund to purchase
specified securities from the option holder at a specified price if the option
is exercised at any time before the expiration date. All put options written by
a Fund would be covered, which means that such Fund would have deposited with
its custodian cash or liquid assets with a value at least equal to the exercise
price of the put option. The purpose of writing such options is to generate
additional income for the Fund. However, in return for the option premium, each
Fund accepts the risk that it may be required to purchase the underlying
securities at a price in excess of the securities' market value at the time of
purchase.
Call and put options written by a Fund will also be considered to be
covered to the extent that the Fund's liabilities under such options are wholly
or partially offset by its rights under call and put options purchased by the
Fund.
In addition, a written call option or put option may be covered by
maintaining segregated cash or liquid assets (either of which may be quoted or
denominated in any currency), by entering into an offsetting forward contract
and/or by purchasing an offsetting option which, by virtue of its exercise price
or otherwise, reduces a Fund's net exposure on its written option position.
A Fund may also write (sell) covered call and put options on any securities
index composed of securities in which it may invest. Options on securities
indices are similar to options on securities, except that the exercise of
securities index options requires cash payments and does not involve the actual
purchase or sale of securities. In addition, securities index options are
designed to reflect price fluctuations in a group of securities or segment of
the securities market rather than price fluctuations in a single security.
A Fund may cover call options on a securities index by owning securities
whose price changes are expected to be similar to those of the underlying index,
or by having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional cash consideration which has
been segregated by the Fund) upon conversion or exchange of other securities in
its portfolio. A Fund may cover call and put options on a securities index by
segregating cash or liquid assets with a value equal to the exercise price.
A Fund may terminate its obligations under an exchange traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."
PURCHASING OPTIONS. Each Fund (other than the CORE Large Cap Value, CORE
U.S. Equity and CORE Large Cap Growth Funds) may purchase put and call options
on any securities in which it may invest or options on any securities index
composed of securities in which it may invest. A Fund would also be able to
enter into closing sale transactions in order to realize gains or minimize
losses on options it had purchased.
A Fund would normally purchase call options in anticipation of an increase
in the market value of securities of the type in which it may invest. The
purchase of a call option would entitle
B-25
<PAGE>
a Fund, in return for the premium paid, to purchase specified securities at a
specified price during the option period. A Fund would ordinarily realize a gain
if, during the option period, the value of such securities exceeded the sum of
the exercise price, the premium paid and transaction costs; otherwise such a
Fund would realize either no gain or a loss on the purchase of the call option.
A Fund would normally purchase put options in anticipation of a decline in
the market value of securities in its portfolio ("protective puts") or in
securities in which it may invest. The purchase of a put option would entitle a
Fund, in exchange for the premium paid, to sell specified securities at a
specified price during the option period. The purchase of protective puts is
designed to offset or hedge against a decline in the market value of a Fund's
securities. Put options may also be purchased by a Fund for the purpose of
affirmatively benefiting from a decline in the price of securities which it does
not own. A Fund would ordinarily realize a gain if, during the option period,
the value of the underlying securities decreased below the exercise price
sufficiently to more than cover the premium and transaction costs; otherwise
such a Fund would realize either no gain or a loss on the purchase of the put
option. Gains and losses on the purchase of protective put options would tend
to be offset by countervailing changes in the value of the underlying portfolio
securities.
A Fund would purchase put and call options on securities indices for the
same purposes as it would purchase options on individual securities. For a
description of options on securities indices, see "Writing Covered Options"
above.
YIELD CURVE OPTIONS. Balanced Fund, with respect to up to 5% of its net
assets, may enter into options on the yield "spread" or differential between two
securities. Such transactions are referred to as "yield curve" options. In
contrast to other types of options, a yield curve option is based on the
difference between the yields of designated securities, rather than the prices
of the individual securities, and is settled through cash payments.
Accordingly, a yield curve option is profitable to the holder if this
differential widens (in the case of a call) or narrows (in the case of a put),
regardless of whether the yields of the underlying securities increase or
decrease.
Balanced Fund may purchase or write yield curve options for the same
purposes as other options on securities. For example, Balanced Fund may
purchase a call option on the yield spread between two securities if it owns one
of the securities and anticipates purchasing the other security and wants to
hedge against an adverse change in the yield spread between the two securities.
Balanced Fund may also purchase or write yield curve options in an effort to
increase its current income if, in the judgment of the Adviser, Balanced Fund
will be able to profit from movements in the spread between the yields of the
underlying securities. The trading of yield curve options is subject to all of
the risks associated with the trading of other types of options. In addition,
however, such options present risk of loss even if the yield of one of the
underlying securities remains constant, if the spread moves in a direction or to
an extent which was not anticipated.
Yield curve options written by the Balanced Fund will be "covered." A call
(or put) option is covered if the Balanced Fund holds another call (or put)
option on the spread between the same two securities and segregates cash or
liquid assets sufficient to cover the Balanced
B-26
<PAGE>
Fund's net liability under the two options. Therefore, the Balanced Fund's
liability for such a covered option is generally limited to the difference
between the amount of the Balanced Fund's liability under the option written by
the Balanced Fund less the value of the option held by the Balanced Fund. Yield
curve options may also be covered in such other manner as may be in accordance
with the requirements of the counterparty with which the option is traded and
applicable laws and regulations. Yield curve options are traded over-the-
counter, and because they have been only recently introduced, established
trading markets for these options have not yet developed.
RISKS ASSOCIATED WITH OPTIONS TRANSACTIONS. There is no assurance that a
liquid secondary market on an options exchange will exist for any particular
exchange-traded option or at any particular time. If a Fund is unable to effect
a closing purchase transaction with respect to covered options it has written,
the Fund will not be able to sell the underlying securities or dispose of
segregated assets until the options expire or are exercised. Similarly, if a
Fund is unable to effect a closing sale transaction with respect to options it
has purchased, it will have to exercise the options in order to realize any
profit and will incur transaction costs upon the purchase or sale of underlying
securities.
Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation may not at all
times be adequate to handle current trading volume; or (vi) one or more
exchanges could, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that exchange (or in
that class or series of options) would cease to exist, although outstanding
options on that exchange that had been issued by the Options Clearing
Corporation as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.
Each Fund may purchase and sell both options that are traded on U.S. and
foreign exchanges and options traded over-the-counter with broker-dealers who
make markets in these options. The ability to terminate over-the-counter
options is more limited than with exchange-traded options and may involve the
risk that broker-dealers participating in such transactions will not fulfill
their obligations.
Transactions by each Fund in options on securities and indices will be
subject to limitations established by each of the exchanges, boards of trade or
other trading facilities governing the maximum number of options in each class
which may be written or purchased by a single investor or group of investors
acting in concert. Thus, the number of options which a Fund may write or
purchase may be affected by options written or purchased by other investment
advisory clients of the Advisers. An exchange, board of trade or other trading
facility may order the liquidation of positions found to be in excess of these
limits, and it may impose certain other sanctions.
B-27
<PAGE>
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The successful use of protective
puts for hedging purposes depends in part on the Adviser's ability to predict
future price fluctuations and the degree of correlation between the options and
securities markets.
REAL ESTATE INVESTMENT TRUSTS
- -----------------------------
Each Fund may invest in shares of REITs. The Real Estate Securities Fund
expects that a substantial portion of its total assets will be invested in
REITs. REITs are pooled investment vehicles which invest primarily in income
producing real estate or real estate related loans or interest. REITs are
generally classified as equity REITs, mortgage REITs or a combination of equity
and mortgage REITs. Equity REITs invest the majority of their assets directly
in real property and derive income primarily from the collection of rents.
Equity REITs can also realize capital gains by selling properties that have
appreciated in value. Mortgage REITs invest the majority of their assets in
real estate mortgages and derive income from the collection of interest
payments. Like regulated investment companies such as the Funds, REITs are not
taxed on income distributed to shareholders provided they comply with certain
requirements under the Code. A Fund will indirectly bear its proportionate share
of any expenses paid by REITs in which it invests in addition to the expenses
paid by a Fund.
Investing in REITs involves certain unique risks. Equity REITs may be
affected by changes in the value of the underlying property owned by such REITs,
while mortgage REITs may be affected by the quality of any credit extended.
REITs are dependent upon management skills, are not diversified (except to the
extent the Code requires), and are subject to the risks of financing projects.
REITs are subject to heavy cash flow dependency, default by borrowers, self-
liquidation, and the possibilities of failing to qualify for the exemption from
tax for distributed income under the Code and failing to maintain their
exemptions from the Investment Company Act of 1940, as amended (the "Act").
REITs (especially mortgage REITs) are also subject to interest rate risks.
WARRANTS AND STOCK PURCHASE RIGHTS
- ----------------------------------
Each Fund may invest up to 5% of its net assets, calculated at the time of
purchase, in warrants or rights (other than those acquired in units or attached
to other securities) which entitle the holder to buy equity securities at a
specific price for a specific period of time. A Fund will invest in warrants
and rights only if such equity securities are deemed appropriate by the Adviser
for investment by the Fund. CORE Large Cap Value, CORE U.S. Equity, CORE Large
Cap Growth, CORE Small Cap Equity and CORE International Equity Funds have no
present intention of acquiring warrants or rights. Warrants and rights have no
voting rights, receive no dividends and have no rights with respect to the
assets of the issuer.
FOREIGN SECURITIES
- ------------------
Investments in foreign securities may offer potential benefits not
available from investments solely in U.S. dollar-denominated or quoted
securities of domestic issuers. Such
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<PAGE>
benefits may include the opportunity to invest in foreign issuers that appear,
in the opinion of the applicable Adviser, to offer better opportunity for long-
term growth of capital and income than investments in U.S. securities, the
opportunity to invest in foreign countries with economic policies or business
cycles different from those of the United States and the opportunity to reduce
fluctuations in portfolio value by taking advantage of foreign stock markets
that do not necessarily move in a manner parallel to U.S. markets.
Investing in foreign securities involves certain special risks, including
those set forth below, which are not typically associated with investing in U.S.
dollar-denominated or quoted securities of U.S. issuers. Investments in foreign
securities usually involve currencies of foreign countries. Accordingly, any
Fund that invests in foreign securities may be affected favorably or unfavorably
by changes in currency rates and in exchange control regulations and may incur
costs in connection with conversions between various currencies. The Balanced,
CORE International Equity, International Equity, European Equity, International
Small Cap, Emerging Markets Equity and Asia Growth Funds may be subject to
currency exposure independent of their securities positions.
Currency exchange rates may fluctuate significantly over short periods of
time. They generally are determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of investments in different
countries, actual or anticipated changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates
also can be affected unpredictably by intervention by U.S. or foreign
governments or central banks or the failure to intervene or by currency controls
or political developments in the United States or abroad.
Since foreign issuers generally are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies, there may be less publicly
available information about a foreign company than about a U.S. company. Volume
and liquidity in most foreign securities markets are less than in the United
States and securities of many foreign companies are less liquid and more
volatile than securities of comparable U.S. companies. Fixed commissions on
foreign securities exchanges are generally higher than negotiated commissions on
U.S. exchanges, although each Fund endeavors to achieve the most favorable net
results on its portfolio transactions. There is generally less government
supervision and regulation of foreign securities exchanges, brokers, dealers and
listed and unlisted companies than in the United States.
Foreign markets also have different clearance and settlement procedures,
and in certain markets there have been times when settlements have been unable
to keep pace with the volume of securities transactions, making it difficult to
conduct such transactions. Such delays in settlement could result in temporary
periods when some of a Fund's assets are uninvested and no return is earned on
such assets. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to the Fund due to subsequent declines in
value of the portfolio securities or, if the Fund has entered into a contract to
sell the securities, could result in possible liability to the purchaser. In
addition, with respect to certain foreign countries, there is the possibility of
expropriation or
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<PAGE>
confiscatory taxation, political or social instability, or diplomatic
developments which could affect a Fund's investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position.
Each Fund may invest in foreign securities which take the form of sponsored
and unsponsored American Depository Receipts ("ADRs") and Global Depository
Receipts ("GDRs") and (except for CORE Large Cap Value, CORE U.S. Equity, CORE
Large Cap Growth and CORE Small Cap Equity Funds) may also invest in European
Depository Receipts ("EDRs") or other similar instruments representing
securities of foreign issuers (together, "Depository Receipts").
ADRs represent the right to receive securities of foreign issuers deposited
in a domestic bank or a correspondent bank. ADRs are traded on domestic
exchanges or in the U.S. over-the-counter market and, generally, are in
registered form. EDRs and GDRs are receipts evidencing an arrangement with a
non-U.S. bank similar to that for ADRs and are designed for use in the non-U.S.
securities markets. EDRs and GDRs are not necessarily quoted in the same
currency as the underlying security.
To the extent a Fund acquires Depository Receipts through banks which do
not have a contractual relationship with the foreign issuer of the security
underlying the Depository Receipts to issue and service such Depository Receipts
(unsponsored), there may be an increased possibility that the Fund would not
become aware of and be able to respond to corporate actions such as stock splits
or rights offerings involving the foreign issuer in a timely manner. In
addition, the lack of information may result in inefficiencies in the valuation
of such instruments.
Each Fund (except CORE Large Cap Value, CORE U.S. Equity, CORE Large Cap
Growth and CORE Small Cap Equity Funds) may invest in countries with emerging
economies or securities markets. Political and economic structures in many of
such countries may be undergoing significant evolution and rapid development,
and such countries may lack the social, political and economic stability
characteristic of more developed countries. Certain of such countries may have
in the past failed to recognize private property rights and have at times
nationalized or expropriated the assets of private companies. As a result, the
risks described above, including the risks of nationalization or expropriation
of assets, may be heightened. See "Investing in Emerging Markets, including Asia
and Eastern Europe," below.
A Fund (other than CORE Large Cap Value, CORE U.S. Equity, CORE Large Cap
Growth and CORE Small Cap Equity Funds) may invest in securities of issuers
domiciled in a country other than the country in whose currency the instrument
is denominated or quoted. The Funds may also invest in securities quoted or
denominated in the European Currency Unit ("ECU"), which is a "basket"
consisting of specified amounts of the currencies of certain of the member
states of the European Community. The specific amounts of currencies comprising
the ECU may be adjusted by the Council of Ministers of the European Community
from time to time to reflect changes in relative values of the underlying
currencies. In addition, the Funds may invest in securities quoted or
denominated in other currency "baskets."
B-30
<PAGE>
INVESTING IN EMERGING MARKETS, INCLUDING ASIA AND EASTERN EUROPE. CORE
International Equity, International Equity, European Equity, International Small
Cap, Asia Growth and Emerging Markets Equity Funds are intended for long-term
investors who can accept the risks associated with investing primarily in equity
and equity-related securities of foreign issuers, including Emerging Countries
issuers and Asian Companies (as defined in the Prospectus) (in the case of Asia
Growth Fund), as well as the risks associated with investments quoted or
denominated in foreign currencies. The Balanced, Growth and Income, Small Cap
Value, Mid Cap Equity and Capital Growth Funds may invest, to a lesser extent,
in equity and equity-related securities of foreign issuers, including Emerging
Countries issuers.
The pace of change in many Emerging Countries, and in particular those in
Asia and Eastern Europe, over the last 10 years has been rapid, marked by
substantial economic change. Combined with capital market development, high
government expenditure, increased consumer wealth and taxation policies favoring
company expansions. See "Risk Factors" in the Prospectus.
Each of the securities markets of the Emerging Countries is less liquid and
subject to greater price volatility and has a smaller market capitalization than
the U.S. securities markets. Issuers and securities markets in such countries
are not subject to as extensive and frequent accounting, financial and other
reporting requirements or as comprehensive government regulations as are issuers
and securities markets in the U.S. In particular, the assets and profits
appearing on the financial statements of Emerging Country issuers may not
reflect their financial position or results of operations in the same manner as
financial statements for U.S. issuers. Substantially less information may be
publicly available about Emerging Country issuers than is available about
issuers in the United States.
Certain of the Emerging Country securities markets are marked by a high
concentration of market capitalization and trading volume in a small number of
issuers representing a limited number of industries, as well as a high
concentration of ownership of such securities by a limited number of investors.
The markets for securities in certain Emerging Countries are in the earliest
stages of their development. Even the markets for relatively widely traded
securities in Emerging Countries may not be able to absorb, without price
disruptions, a significant increase in trading volume or trades of a size
customarily undertaken by institutional investors in the securities markets of
developed countries. Additionally, market making and arbitrage activities are
generally less extensive in such markets, which may contribute to increased
volatility and reduced liquidity of such markets. The limited liquidity of
Emerging Country markets may also affect a Fund's ability to accurately value
its portfolio securities or to acquire or dispose of securities at the price and
time it wishes to do so or in order to meet redemption requests.
Transaction costs, including brokerage commissions or dealer mark-ups, in
Emerging Countries may be higher than in the United States and other developed
securities markets. In addition, existing laws and regulations are often
inconsistently applied. As legal systems in Emerging Countries develop, foreign
investors may be adversely affected by new or amended laws and regulations. In
circumstances where adequate laws exist, it may not be possible to obtain swift
and equitable enforcement of the law.
B-31
<PAGE>
Foreign investment in the securities markets of certain Emerging Countries
is restricted or controlled to varying degrees. These restrictions may limit a
Fund's investment in certain Emerging Countries and may increase the expenses of
the Fund. Certain Emerging Countries require governmental approval prior to
investments by foreign persons or limit investment by foreign persons to only a
specified percentage of an issuer's outstanding securities or a specific class
of securities which may have less advantageous terms (including price) than
securities of the company available for purchase by nationals. In addition, the
repatriation of both investment income and capital from several of the Emerging
Countries is subject to restrictions such as the need for certain governmental
consents. Even where there is no outright restriction on repatriation of
capital, the mechanics of repatriation may affect certain aspects of the
operation of a Fund. A Fund may be required to establish special custodial or
other arrangements before investing in certain emerging countries.
Each of the Emerging Countries may be subject to a substantially greater
degree of economic, political and social instability and disruption than is the
case in the United States, Japan and most Western European countries. Such
instability may result from, among other things, the following: (i)
authoritarian governments or military involvement in political and economic
decision making, including changes or attempted changes in governments through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic or social conditions; (iii) internal insurgencies;
(iv) hostile relations with neighboring countries; and (v) ethnic, religious and
racial disaffection or conflict. Such economic, political and social
instability could disrupt the principal financial markets in which the Funds may
invest and adversely affect the value of the Funds' assets.
The economies of Emerging Countries may differ unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate of inflation,
capital reinvestment, resources, self-sufficiency and balance of payments. Many
Emerging Countries have experienced in the past, and continue to experience,
high rates of inflation. In certain countries inflation has at times
accelerated rapidly to hyperinflationary levels, creating a negative interest
rate environment and sharply eroding the value of outstanding financial assets
in those countries. The economies of many Emerging Countries are heavily
dependent upon international trade and are accordingly affected by protective
trade barriers and the economic conditions of their trading partners. In
addition, the economies of some Emerging Countries are vulnerable to weakness in
world prices for their commodity exports.
A Fund's income and, in some cases, capital gains from foreign stocks and
securities will be subject to applicable taxation in certain of the countries in
which it invests, and treaties between the U.S. and such countries may not be
available in some cases to reduce the otherwise applicable tax rates. See
"Taxation."
Foreign markets also have different clearance and settlement procedures,
and in certain markets there have been times when settlements have been unable
to keep pace with the volume of securities transactions, making it difficult to
conduct such transactions. Such delays in settlement could result in temporary
periods when a portion of the assets of a Fund is uninvested and no return is
earned on such assets. The inability of a Fund to make intended security
B-32
<PAGE>
purchases or sales due to settlement problems could result either in losses to
the Fund due to subsequent declines in value of the portfolio securities or, if
the Fund has entered into a contract to sell the securities, could result in
possible liability to the purchaser.
INVESTING IN JAPAN. The Japanese Equity Fund invests in the equity
securities of Japanese companies. Japan's economy, the second-largest in the
world, has grown substantially over the last three decades. The boom in Japan's
equity and property markets during the expansion of the late 1980's supported
high rates of investment and consumer spending on durable goods, but both of
these components of demand have now retreated sharply following the decline in
asset prices. Profits have fallen sharply, unemployment has reached a
historical high and consumer confidence is low. The banking sector continues to
suffer from non-performing loans and this economy is subject to deflationary
pressures. Numerous discount-rate cuts since its peak in 1991, a succession of
fiscal stimulus packages, support plans for the debt-burdened financial system
and spending for reconstruction following the Kobe earthquake may help to
contain the recessionary forces, but substantial uncertainties remain.
In addition to the cyclical downturn, Japan is suffering through structural
adjustments. Like the Europeans, the Japanese have seen a deterioration of
their competitiveness due to high wages, a strong currency and structural
rigidities. Finally, Japan is reforming its political process and deregulating
its economy. This has brought about turmoil, uncertainty and a crisis of
confidence.
While the Japanese governmental system itself seems stable, the dynamics of
the country's politics have been unpredictable in recent years. The economic
crisis of 1990-92 brought the downfall of the conservative Liberal Democratic
Party, which had ruled since 1955. Since then, the country has seen a series of
unstable multi-party coalitions and several prime ministers come and go, because
of politics as well as personal scandals. While there appears to be no reason
for anticipating civic unrest, it is impossible to know when the political
instability will end and what trade and fiscal policies might be pursued by the
government that emerges.
Japan's heavy dependence on international trade has been adversely affected
by trade tariffs and other protectionist measures as well as the economic
condition of its trading partners. While Japan subsidizes its agricultural
industry, only 19% of its land is suitable for cultivation and it is only 50%
self-sufficient in food production. Accordingly, it is highly dependent on
large imports of wheat, sorghum and soybeans. In addition, industry, its most
important economic sector, depends on imported raw materials and fuels,
including iron ore, copper, oil and many forest products. Japan's high volume
of exports, such as automobiles, machine tools and semiconductors, have caused
trade tensions, particularly with the United States. Some trade agreements,
however, have been implemented to reduce these tensions. The relaxing of
official and de facto barriers to imports, or hardships created by any pressures
brought by trading partners, could adversely affect Japan's economy. A
substantial rise in world oil or commodity prices could also have a negative
affect. The strength of the yen itself may prove an impediment to strong
continued exports and economic recovery, because it makes Japanese goods sold in
other countries more expensive and reduces the value of foreign earnings
repatriated to Japan. Because the Japanese economy is so dependent on exports,
any fall-off in exports may be seen as a sign of economic weakness, which may
adversely affect the market.
B-33
<PAGE>
Geologically, Japan is located in a volatile area of the world, and has
historically been vulnerable to earthquakes, volcanoes and other natural
disasters. As demonstrated by the Kobe earthquake in January of 1995, in which
5,000 people were killed and billions of dollars of damage was sustained, these
natural disasters can be significant enough to affect the country's economy.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Growth and Income, Mid
Cap Equity, Capital Growth and Small Cap Value Funds may enter into forward
foreign currency exchange contracts for hedging purposes. The Balanced, CORE
International Equity, International Equity, European Equity, Japanese Equity,
International Small Cap, Emerging Markets Equity and Asia Growth Funds may enter
into forward foreign currency exchange contracts for hedging purposes and to
seek to increase total return. A forward foreign currency exchange contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. These contracts are
traded in the interbank market between currency traders (usually large
commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are generally charged at any stage for
trades.
At the maturity of a forward contract a Fund may either accept or make
delivery of the currency specified in the contract or, at or prior to maturity,
enter into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are often, but
not always, effected with the currency trader who is a party to the original
forward contract.
A Fund may enter into forward foreign currency exchange contracts in
several circumstances. First, when a Fund enters into a contract for the
purchase or sale of a security denominated or quoted in a foreign currency, or
when a Fund anticipates the receipt in a foreign currency of dividend or
interest payments on such a security which it holds, the Fund may desire to
"lock in" the U.S. dollar price of the security or the U.S. dollar equivalent of
such dividend or interest payment, as the case may be. By entering into a
forward contract for the purchase or sale, for a fixed amount of dollars, of the
amount of foreign currency involved in the underlying transactions, the Fund
will attempt to protect itself against an adverse change in the relationship
between the U.S. dollar and the subject foreign currency during the period
between the date on which the security is purchased or sold, or on which the
dividend or interest payment is declared, and the date on which such payments
are made or received.
Additionally, when the Adviser believes that the currency of a particular
foreign country may suffer a substantial decline against the U.S. dollar, it may
enter into a forward contract to sell, for a fixed amount of U.S. dollars, the
amount of foreign currency approximating the value of some or all of such Fund's
portfolio securities quoted or denominated in such foreign currency. The
precise matching of the forward contract amounts and the value of the securities
involved will not generally be possible because the future value of such
securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. Using forward
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<PAGE>
contracts to protect the value of a Fund's portfolio securities against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange
which a Fund can achieve at some future point in time. The precise projection of
short-term currency market movements is not possible, and short-term hedging
provides a means of fixing the U.S. dollar value of only a portion of a Fund's
foreign assets.
Balanced, CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds may engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities quoted or
denominated in a different currency if GSAM or GSAMI determines that there is a
pattern of correlation between the two currencies. Balanced, CORE International
Equity, International Equity, European Equity, Japanese Equity, International
Small Cap, Emerging Markets Equity and Asia Growth Funds may also purchase and
sell forward contracts to seek to increase total return when GSAM or GSAMI
anticipates that the foreign currency will appreciate or depreciate in value,
but securities quoted or denominated in that currency do not present attractive
investment opportunities and are not held in the Fund's portfolio.
Balanced, CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds may also enter into forward contracts to seek to increase total
return. Unless otherwise covered in accordance with applicable regulations,
cash or liquid assets of a Fund will be segregated in an amount equal to the
value of the Fund's total assets committed to the consummation of forward
foreign currency exchange contracts. If the value of the segregated assets
declines, additional cash or liquid assets will be segregated on a daily basis
so that the value of the assets will equal the amount of a Fund's commitments
with respect to such contracts. The segregated assets will be marked-to-market
on a daily basis. Although the contracts are not presently regulated by the
CFTC, the CFTC may in the future assert authority to regulate these contracts.
In such event, a Fund's ability to utilize forward foreign currency exchange
contracts may be restricted.
While a Fund may enter into forward contracts to reduce currency exchange
rate risks, transactions in such contracts involve certain other risks. Thus,
while the Fund may benefit from such transactions, unanticipated changes in
currency prices may result in a poorer overall performance for the Fund than if
it had not engaged in any such transactions. Moreover, there may be imperfect
correlation between a Fund's portfolio holdings of securities quoted or
denominated in a particular currency and forward contracts entered into by such
Fund. Such imperfect correlation may cause a Fund to sustain losses which will
prevent the Fund from achieving a complete hedge or expose the Fund to risk of
foreign exchange loss.
Markets for trading foreign forward currency contracts offer less
protection against defaults than is available when trading in currency
instruments on an exchange. Since a forward foreign currency exchange contract
is not guaranteed by an exchange or clearinghouse, a default on the contract
would deprive a Fund of unrealized profits or force the Fund to cover its
commitments for purchase or resale, if any, at the current market price.
B-35
<PAGE>
WRITING AND PURCHASING CURRENCY CALL AND PUT OPTIONS. Each Fund (except
CORE Large Cap Value, CORE U.S. Equity, CORE Large Cap Growth and CORE Small Cap
Equity Funds) may write covered put and call options and purchase put and call
options on foreign currencies for the purpose of protecting against declines in
the U.S. dollar value of portfolio securities and against increases in the U.S.
dollar cost of securities to be acquired. As with other kinds of option
transactions, however, the writing of an option on foreign currency will
constitute only a partial hedge, up to the amount of the premium received. If
and when a Fund seeks to close out an option, the Fund could be required to
purchase or sell foreign currencies at disadvantageous exchange rates, thereby
incurring losses. The purchase of an option on foreign currency may constitute
an effective hedge against exchange rate fluctuations; however, in the event of
exchange rate movements adverse to a Fund's position, the Fund may forfeit the
entire amount of the premium plus related transaction costs. Options on foreign
currencies to be written or purchased by a Fund will be traded on U.S. and
foreign exchanges or over-the-counter.
Balanced, CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds may use options on currency to cross-hedge, which involves writing
or purchasing options on one currency to hedge against changes in exchange rates
for a different currency with a pattern of correlation. In addition, Balanced,
CORE International Equity, International Equity, European Equity, Japanese
Equity, International Small Cap, Emerging Markets Equity and Asia Growth Funds
may purchase call or put options on currency to seek to increase total return
when the Adviser anticipates that the currency will appreciate or depreciate in
value, but the securities quoted or denominated in that currency do not present
attractive investment opportunities and are not included in the Fund's
portfolio.
A call option written by a Fund obligates a Fund to sell specified currency
to the holder of the option at a specified price if the option is exercised at
any time before the expiration date. A put option written by a Fund would
obligate a Fund to purchase specified currency from the option holder at a
specified price if the option is exercised at any time before the expiration
date. The writing of currency options involves a risk that a Fund will, upon
exercise of the option, be required to sell currency subject to a call at a
price that is less than the currency's market value or be required to purchase
currency subject to a put at a price that exceeds the currency's market value.
For a description of how to cover written put and call options, see "Written
Covered Options" above.
A Fund may terminate its obligations under a call or put option by
purchasing an option identical to the one it has written. Such purchases are
referred to as "closing purchase transactions." A Fund would also be able to
enter into closing sale transactions in order to realize gains or minimize
losses on options purchased by the Fund.
A Fund would normally purchase call options on foreign currency in
anticipation of an increase in the U.S. dollar value of currency in which
securities to be acquired by a Fund are quoted or denominated. The purchase of
a call option would entitle the Fund, in return for the premium paid, to
purchase specified currency at a specified price during the option period. A
Fund would ordinarily realize a gain if, during the option period, the value of
such currency
B-36
<PAGE>
exceeded the sum of the exercise price, the premium paid and transaction costs;
otherwise the Fund would realize either no gain or a loss on the purchase of the
call option.
A Fund would normally purchase put options in anticipation of a decline in
the U.S. dollar value of currency in which securities in its portfolio are
quoted or denominated ("protective puts"). The purchase of a put option would
entitle a Fund, in exchange for the premium paid, to sell specified currency at
a specified price during the option period. The purchase of protective puts is
designed merely to offset or hedge against a decline in the dollar value of a
Fund's portfolio securities due to currency exchange rate fluctuations. A Fund
would ordinarily realize a gain if, during the option period, the value of the
underlying currency decreased below the exercise price sufficiently to more than
cover the premium and transaction costs; otherwise the Fund would realize either
no gain or a loss on the purchase of the put option. Gains and losses on the
purchase of protective put options would tend to be offset by countervailing
changes in the value of underlying currency or portfolio securities.
In addition to using options for the hedging purposes described above,
Balanced, CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds may use options on currency to seek to increase total return.
Balanced, CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds may write (sell) covered put and call options on any currency in
order to realize greater income than would be realized on portfolio securities
transactions alone. However, in writing covered call options for additional
income, Balanced, CORE International Equity, International Equity, European
Equity, Japanese Equity, International Small Cap, Emerging Markets Equity and
Asia Growth Funds may forego the opportunity to profit from an increase in the
market value of the underlying currency. Also, when writing put options,
Balanced, CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds accept, in return for the option premium, the risk that they may be
required to purchase the underlying currency at a price in excess of the
currency's market value at the time of purchase.
Balanced, CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds would normally purchase call options to seek to increase total
return in anticipation of an increase in the market value of a currency.
Balanced, CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds would ordinarily realize a gain if, during the option period, the
value of such currency exceeded the sum of the exercise price, the premium paid
and transaction costs. Otherwise Balanced, CORE International Equity,
International Equity, European Equity, Japanese Equity, International Small Cap,
Emerging Markets Equity and Asia Growth Funds would realize either no gain or a
loss on the purchase of the call option. Put options may be purchased by a Fund
for the purpose of benefiting from a decline in the value of currencies which it
does not own. A Fund would ordinarily realize a gain if, during the option
period, the value of the underlying currency decreased below the exercise price
sufficiently to more than cover the premium and transaction costs. Otherwise
the Fund would realize either no gain or a loss on the purchase of the put
option.
B-37
<PAGE>
SPECIAL RISKS ASSOCIATED WITH OPTIONS ON CURRENCY. An exchange traded
options position may be closed out only on an options exchange which provides a
secondary market for an option of the same series. Although a Fund will
generally purchase or write only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option, or at any particular time.
For some options no secondary market on an exchange may exist. In such event,
it might not be possible to effect closing transactions in particular options,
with the result that a Fund would have to exercise its options in order to
realize any profit and would incur transaction costs upon the sale of underlying
securities pursuant to the exercise of put options. If a Fund as a covered call
option writer is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying currency (or security quoted
or denominated in that currency) until the option expires or it delivers the
underlying currency upon exercise.
There is no assurance that higher than anticipated trading activity or
other unforeseen events might not, at times, render certain of the facilities of
the Options Clearing Corporation inadequate, and thereby result in the
institution by an exchange of special procedures which may interfere with the
timely execution of customers' orders.
A Fund may purchase and write over-the-counter options to the extent
consistent with its limitation on investments in illiquid securities. Trading
in over-the-counter options is subject to the risk that the other party will be
unable or unwilling to close out options purchased or written by a Fund.
The amount of the premiums which a Fund may pay or receive may be adversely
affected as new or existing institutions, including other investment companies,
engage in or increase their option purchasing and writing activities.
CURRENCY SWAPS, MORTGAGE SWAPS, CREDIT SWAPS, INDEX SWAPS AND INTEREST RATE
- ---------------------------------------------------------------------------
SWAPS, CAPS, FLOORS AND COLLARS
- -------------------------------
The Balanced, CORE International Equity, International Equity, European
Equity, Japanese Equity, International Small Cap, Emerging Markets Equity and
Asia Growth Funds may, with respect to up to 5% of their net assets, enter into
currency swaps for both hedging purposes and to seek to increase total return.
In addition, the Balanced and Real Estate Securities Funds may, with respect to
5% of their net assets, enter into mortgage, credit, index and interest rate
swaps and other interest rate swap arrangements such as rate caps, floors and
collars, for hedging purposes or to seek to increase total return. Currency
swaps involve the exchange by a Fund with another party of their respective
rights to make or receive payments in specified currencies. Interest rate swaps
involve the exchange by a Fund with another party of their respective
commitments to pay or receive interest, such as an exchange of fixed rate
payments for floating rate payments. Mortgage swaps are similar to interest
rate swaps in that they represent commitments to pay and receive interest. The
notional principal amount, however, is tied to a reference pool or pools of
mortgages. Index swaps involve the exchange by a Fund with another party of the
respective amounts payable with respect to a notional principal amount at
interest rates equal to two specified indices. Credit swaps involve the receipt
of floating or fixed
B-38
<PAGE>
rate payments in exchange for assuming potential credit losses of an underlying
security. Credit swaps give one party to a transaction the right to dispose of
or acquire an asset (or group of assets), or the right to receive or make a
payment for the other party, upon the occurrence of specified credit events. The
purchase of an interest rate cap entitles the purchaser, to the extent that a
specified index exceeds a predetermined interest rate, to receive payment of
interest on a notional principal amount from the party selling such interest
rate cap. The purchase of an interest rate floor entitles the purchaser, to the
extent that a specified index falls below a predetermined interest rate, to
receive payments of interest on a notional principal amount from the party
selling the interest rate floor. An interest rate collar is the combination of a
cap and a floor that preserves a certain return within a predetermined range of
interest rates.
A Fund will enter into interest rate, mortgage and index swaps only on a
net basis, which means that the two payment streams are netted out, with the
Fund receiving or paying, as the case may be, only the net amount of the two
payments. Interest rate, index and mortgage swaps do not involve the delivery
of securities, other underlying assets or principal. Accordingly, the risk of
loss with respect to interest rate, index and mortgage swaps is limited to the
net amount of interest payments that the Fund is contractually obligated to
make. If the other party to an interest rate, index or mortgage swap defaults,
the Fund's risk of loss consists of the net amount of interest payments that the
Fund is contractually entitled to receive. In contrast, currency swaps usually
involve the delivery of a gross payment stream in one designated currency in
exchange for the gross payment stream in another designated currency.
Therefore, the entire payment stream under a currency swap is subject to the
risk that the other party to the swap will default on its contractual delivery
obligations. To the extent that the net amount payable under an interest rate,
index or mortgage swap and the entire amount of the payment stream payable by a
Fund under a currency swap or an interest rate floor, cap or collar is
segregated in cash or liquid assets, the Funds and the Advisers believe that
swaps do not constitute senior securities under the Act and, accordingly, will
not treat them as being subject to a Fund's borrowing restrictions.
A Fund will not enter into swap transactions unless the unsecured
commercial paper, senior debt or claims paying ability of the other party
thereto is considered to be investment grade by the Adviser.
The use of interest rate, mortgage, index, credit and currency swaps, as
well as interest rate caps, floors and collars, is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. If an Adviser is incorrect in
its forecasts of market values, interest rates and currency exchange rates, the
investment performance of a Fund would be less favorable than it would have been
if this investment technique were not used. The Advisers, under the supervision
of the Board of Trustees, are responsible for determining and monitoring the
liquidity of the Funds' transactions in swaps, caps, floors and collars.
EQUITY SWAPS
- ------------
Each Fund may enter into equity swap contracts to invest in a market
without owning or taking physical custody of securities in circumstances in
which direct investment is restricted for
B-39
<PAGE>
legal reasons or is otherwise impracticable. The counterparty to an equity swap
contract will typically be a bank, investment banking firm or broker/dealer. The
counterparty will generally agree to pay the Fund the amount, if any, by which
the notional amount of the equity swap contract would have increased in value
had it been invested in the particular stocks, plus the dividends that would
have been received on those stocks. The Fund will agree to pay to the
counterparty a floating rate of interest on the notional amount of the equity
swap contract plus the amount, if any, by which that notional amount would have
decreased in value had it been invested in such stocks. Therefore, the return to
the Fund on any equity swap contract should be the gain or loss on the notional
amount plus dividends on the stocks less the interest paid by the Fund on the
notional amount.
A Fund will enter into equity swaps only on a net basis, which means that
the two payment streams are netted out, with the Fund receiving or paying, as
the case may be, only the net amount of the two payments. Payments may be made
at the conclusion of an equity swap contract or periodically during its term.
Equity swaps do not involve the delivery of securities or other underlying
assets. Accordingly, the risk of loss with respect to equity swaps is limited
to the net amount of payments that a Fund is contractually obligated to make.
If the other party to an equity swap defaults, a Fund's risk of loss consists of
the net amount of payments that such Fund is contractually entitled to receive,
if any. The net amount of the excess, if any, of a Fund's obligations over its
entitlements with respect to each equity swap will be accrued on a daily basis
and an amount of cash or liquid assets, having an aggregate net asset value at
least equal to such accrued excess will be maintained in a segregated account by
a Fund's custodian. Inasmuch as these transactions are entered into for hedging
purposes or are offset by segregated cash or liquid assets, as permitted by
applicable law, the Funds and their Advisers believe that transactions do not
constitute senior securities under the Act and, accordingly, will not treat them
as being subject to a Fund's borrowing restrictions.
The swap market has grown substantially in recent years with a large number
of banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid in comparison with the markets for other similar
instruments which are traded in the over-the-counter market. The Advisers,
under the supervision of the Board of Trustees, are responsible for determining
and monitoring the liquidity of the Funds' transactions in swaps, caps, floors
and collars.
The Funds will not enter into any swap transactions unless the unsecured
commercial paper, senior debt or claims-paying ability of the other party is
rated A or better by a nationally recognized statistical rating organization.
If there is a default by the other party to such a transaction, a Fund will have
contractual remedies pursuant to the agreements related to the transaction.
The use of equity swaps is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Advisers are incorrect in their
forecasts of market values, the investment performance of a Fund would be less
favorable than it would have been if this investment technique were not used.
B-40
<PAGE>
LENDING OF PORTFOLIO SECURITIES
- -------------------------------
Each Fund may lend portfolio securities. Under present regulatory
policies, such loans may be made to institutions such as brokers or dealers and
would be required to be secured continuously by collateral in cash, cash
equivalents or U.S. Government securities maintained on a current basis at an
amount at least equal to the market value of the securities loaned. A Fund
would be required to have the right to call a loan and obtain the securities
loaned at any time on five days' notice. For the duration of a loan, a Fund
would continue to receive the equivalent of the interest or dividends paid by
the issuer on the securities loaned and would also receive compensation from
investment of the collateral. A Fund would not have the right to vote any
securities having voting rights during the existence of the loan, but a Fund
would call the loan in anticipation of an important vote to be taken among
holders of the securities or the giving or withholding of their consent on a
material matter affecting the investment. As with other extensions of credit
there are risks of delay in recovering, or even loss of rights in, the
collateral should the borrower of the securities fail financially. However, the
loans would be made only to firms deemed by the Advisers to be of good standing,
and when, in the judgment of the Advisers, the consideration which can be earned
currently from securities loans of this type justifies the attendant risk. If
the Advisers determine to make securities loans, it is intended that the value
of the securities loaned would not exceed one-third of the value of the total
assets of a Fund (including the loan collateral).
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS
- ----------------------------------------------
Each Fund may purchase securities on a when-issued basis or purchase or
sell securities on a forward commitment basis. These transactions involve a
commitment by a Fund to purchase or sell securities at a future date. The price
of the underlying securities (usually expressed in terms of yield) and the date
when the securities will be delivered and paid for (the settlement date) are
fixed at the time the transaction is negotiated. When-issued purchases and
forward commitment transactions are negotiated directly with the other party,
and such commitments are not traded on exchanges. A Fund will purchase
securities on a when-issued basis or purchase or sell securities on a forward
commitment basis only with the intention of completing the transaction and
actually purchasing or selling the securities. If deemed advisable as a matter
of investment strategy, however, a Fund may dispose of or negotiate a commitment
after entering into it. A Fund may realize a capital gain or loss in connection
with these transactions. For purposes of determining a Fund's duration, the
maturity of when-issued or forward commitment securities will be calculated from
the commitment date. A Fund is required to segregate until three days prior to
the settlement date, cash and liquid assets in an amount sufficient to meet the
purchase price. Alternatively, a Fund may enter into offsetting contracts for
the forward sale of other securities that it owns. Securities purchased or sold
on a when-issued or forward commitment basis involve a risk of loss if the value
of the security to be purchased declines prior to the settlement date or if the
value of the security to be sold increases prior to the settlement date.
B-41
<PAGE>
INVESTMENT IN UNSEASONED COMPANIES
- ----------------------------------
Each Fund may invest up to 5% of its net assets, calculated at the time of
purchase, in companies (including predecessors) which have operated less than
three years, except that this limitation does not apply to debt securities which
have been rated investment grade or better by at least one nationally recognized
statistical rating organization. The securities of such companies may have
limited liquidity, which can result in their being priced higher or lower than
might otherwise be the case. In addition, investments in unseasoned companies
are more speculative and entail greater risk than do investments in companies
with an established operating record.
OTHER INVESTMENT COMPANIES
- --------------------------
A Fund reserves the right to invest up to 5% of its net assets in the
securities of other investment companies (including SPDRs) but may not acquire
more than 3% of the voting securities of any other investment company. Pursuant
to an exemptive order obtained from the SEC, the Funds may invest in money
market funds for which an Adviser or any of its affiliates serves as investment
adviser. A Fund will indirectly bear its proportionate share of any management
fees and other expenses paid by investment companies in which it invests in
addition to the advisory and administration fees paid by the Fund. However, to
the extent that the Fund invests in a money market fund for which an Adviser or
any of its affiliates acts as adviser, the advisory and administration fees
payable by the Fund to an Adviser will be reduced by an amount equal to the
Fund's proportionate share of the advisory and administration fees paid by such
money market fund to the Adviser.
SPDRs are interests in a unit investment trust ("UIT") that may be obtained
from the UIT or purchased in the secondary market (SPDRs are listed on the
American Stock Exchange). The UIT will issue SPDRs in aggregations known as
"Creation Units" in exchange for a "Portfolio Deposit" consisting of (a) a
portfolio of securities substantially similar to the component securities
("Index Securities") of the Standard & Poor's 500 Composite Stock Price Index
(the "S&P Index"), (b) a cash payment equal to a pro rata portion of the
dividends accrued on the UIT's portfolio securities since the last dividend
payment by the UIT, net of expenses and liabilities, and (c) a cash payment or
credit ("Balancing Amount") designed to equalize the net asset value of the S&P
Index and the net asset value of a Portfolio Deposit.
SPDRs are not individually redeemable, except upon termination of the UIT.
To redeem, the Portfolio must accumulate enough SPDRs to reconstitute a Creation
Unit. The liquidity of small holdings of SPDRs, therefore, will depend upon the
existence of a secondary market. Upon redemption of a Creation Unit, the
Portfolio will receive Index Securities and cash identical to the Portfolio
Deposit required of an investor wishing to purchase a Creation Unit that day.
The price of SPDRs is derived from and based upon the securities held by
the UIT. Accordingly, the level of risk involved in the purchase or sale of a
SPDR is similar to the risk involved in the purchase or sale of traditional
common stock, with the exception that the pricing mechanism for SPDRs is based
on a basket of stocks. Disruptions in the markets for the
B-42
<PAGE>
securities underlying SPDRs purchased or sold by the Funds could result in
losses on SPDRs. Trading in SPDRs involves risks similar to those risks,
described under "Risk Associated with Options Transactions," involved in the
writing of options on securities.
Each Fund (other than CORE Large Cap Value, CORE U.S. Equity, CORE Large
Cap Growth and CORE Small Cap Equity Funds) may also purchase shares of
investment companies investing primarily in foreign securities, including
"country funds." Country funds have portfolios consisting primarily of
securities of issuers located in one foreign country or region. Each Fund
(other than the Real Estate Securities Fund) may, subject to the limitations
stated above, invest in World Equity Benchmark Shares ("WEBS") and similar
securities that invest in securities included in foreign securities
indices.
REPURCHASE AGREEMENTS
- ---------------------
Each Fund may enter into repurchase agreements with selected broker-
dealers, banks or other financial institutions. A repurchase agreement is an
arrangement under which a Fund purchases securities and the seller agrees to
repurchase the securities within a particular time and at a specified price.
Custody of the securities is maintained by a Fund's custodian. The repurchase
price may be higher than the purchase price, the difference being income to a
Fund, or the purchase and repurchase prices may be the same, with interest at a
stated rate due to a Fund together with the repurchase price on repurchase. In
either case, the income to a Fund is unrelated to the interest rate on the
security subject to the repurchase agreement.
For purposes of the Act and generally for tax purposes, a repurchase
agreement is deemed to be a loan from a Fund to the seller of the security. For
other purposes, it is not clear whether a court would consider the security
purchased by a Fund subject to a repurchase agreement as being owned by a Fund
or as being collateral for a loan by a Fund to the seller. In the event of
commencement of bankruptcy or insolvency proceedings with respect to the seller
of the security before repurchase of the security under a repurchase agreement,
a Fund may encounter delay and incur costs before being able to sell the
security. Such a delay may involve loss of interest or a decline in price of
the security. If the court characterizes the transaction as a loan and a Fund
has not perfected a security interest in the security, a Fund may be required to
return the security to the seller's estate and be treated as an unsecured
creditor of the seller. As an unsecured creditor, a Fund would be at risk of
losing some or all of the principal and interest involved in the transaction.
As with any unsecured debt instrument purchased for a Fund, the Advisers
seek to minimize the risk of loss from repurchase agreements by analyzing the
creditworthiness of the obligor, in this case the seller of the security. Apart
from the risk of bankruptcy or insolvency proceedings, there is also the risk
that the seller may fail to repurchase the security. However, if the market
value of the security subject to the repurchase agreement becomes less than the
repurchase price (including accrued interest), a Fund will direct the seller of
the security to deliver additional securities so that the market value of all
securities subject to the repurchase agreement equals or exceeds the repurchase
price. Certain repurchase agreements which provide for settlement in more than
seven days can be liquidated before the nominal fixed term on seven days or less
notice. Such repurchase agreements will be regarded as liquid instruments.
B-43
<PAGE>
In addition, a Fund, together with other registered investment companies
having advisory agreements with the Advisers or their affiliates, may transfer
uninvested cash balances into a single joint account, the daily aggregate
balance of which will be invested in one or more repurchase agreements.
REVERSE REPURCHASE AGREEMENTS
- -----------------------------
The Balanced Fund may borrow money for temporary purposes by entering into
transactions called reverse repurchase agreements. Under these arrangements, the
Fund will sell portfolio securities to dealers in U.S. Government Securities or
members of the Federal Reserve System, with an agreement to repurchase the
security on an agreed date, price and interest payment. Reverse repurchase
agreements involve the possible risk that the value of portfolio securities the
Fund relinquishes may decline below the price the Fund must pay when the
transaction closes. Borrowings may magnify the potential for gain or loss on
amounts invested resulting in an increase in the speculative character of the
Fund's outstanding shares.
When a Fund enters into a reverse repurchase agreement, it places in a
separate custodial account either liquid assets or other high grade debt
securities that have a value equal to or greater than the repurchase price. The
account is then continuously monitored to make sure that an appropriate value is
maintained. Reverse repurchase agreements are considered to be borrowings under
the 1940 Act
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted by the Trust as
fundamental policies that cannot be changed without the affirmative vote of the
holders of a majority (as defined in the Act) of the outstanding voting
securities of the affected Fund. The investment objective of each Fund and all
other investment policies or practices of each Fund are considered by the Trust
not to be fundamental and accordingly may be changed without shareholder
approval. See "Investment Objectives and Policies" in the Prospectus. For
purposes of the Act, "majority" means the lesser of (a) 67% or more of the
shares of the Trust or a Fund present at a meeting, if the holders of more than
50% of the outstanding shares of the Trust or a Fund are present or represented
by proxy, or (b) more than 50% of the shares of the Trust or a Fund. For
purposes of the following limitations, any limitation which involves a maximum
percentage shall not be considered violated unless an excess over the percentage
occurs immediately after, and is caused by, an acquisition or encumbrance of
securities or assets of, or borrowings by, a Fund. With respect to the Funds'
fundamental investment restriction no. 3, asset coverage of at least 300% (as
defined in the Act), inclusive of any amounts borrowed, must be maintained at
all times.
A Fund may not:
(1) Make any investment inconsistent with the Fund's classification as a
diversified company under the Investment Company Act of 1940, as
B-44
<PAGE>
amended (the "Act"). This restriction does not, however, apply to any Fund
classified as a non-diversified company under the Act.
(2) Invest 25% or more of its total assets in the securities of one or more
issuers conducting their principal business activities in the same industry
(other than the Goldman Sachs Real Estate Securities Fund, which will
invest at least 25% or more of its total assets in the real estate
industry) (excluding the U.S. Government or any of its agencies or
instrumentalities).
(3) Borrow money, except (a) the Fund may borrow from banks (as defined in the
Act) or through reverse repurchase agreements in amounts up to 33-1/3% of
its total assets (including the amount borrowed), (b) the Fund may, to the
extent permitted by applicable law, borrow up to an additional 5% of its
total assets for temporary purposes, (c) the Fund may obtain such short-
term credits as may be necessary for the clearance of purchases and sales
of portfolio securities, (d) the Fund may purchase securities on margin to
the extent permitted by applicable law and (e) the Fund may engage in
transactions in mortgage dollar rolls which are accounted for as
financings.
(4) Make loans, except through (a) the purchase of debt obligations in
accordance with the Fund's investment objective and policies, (b)
repurchase agreements with banks, brokers, dealers and other financial
institutions, and (c) loans of securities as permitted by applicable law.
(5) Underwrite securities issued by others, except to the extent that the sale
of portfolio securities by the Fund may be deemed to be an underwriting.
(6) Purchase, hold or deal in real estate, although a Fund may purchase and
sell securities that are secured by real estate or interests therein,
securities of real estate investment trusts and mortgage-related securities
and may hold and sell real estate acquired by a Fund as a result of the
ownership of securities.
(7) Invest in commodities or commodity contracts, except that the Fund may
invest in currency and financial instruments and contracts that are
commodities or commodity contracts.
(8) Issue senior securities to the extent such issuance would violate
applicable law.
Each Fund may, notwithstanding any other fundamental investment
restriction or policy, invest some or all of its assets in a single open-end
investment company or series thereof with substantially the same investment
objective, restrictions and policies as the Fund.
B-45
<PAGE>
In addition to the fundamental policies mentioned above, the Trustees
have adopted the following non-fundamental policies which can be changed or
amended by action of the Trustees without approval of shareholders.
A Fund may not:
(a) Invest in companies for the purpose of exercising control or management.
(b) Invest more than 15% of the Fund's net assets in illiquid investments
including repurchase agreements maturing in more than seven days,
securities which are not readily marketable and restricted securities not
eligible for resale pursuant to Rule 144A under the 1933 Act.
(c) Purchase additional securities if the Fund's borrowings (excluding covered
mortgage dollar rolls) exceed 5% of its net assets.
(d) Make short sales of securities, except short sales against the box.
B-46
<PAGE>
MANAGEMENT
Information pertaining to the Trustees and officers of the Trust is
set forth below. Trustees and officers deemed to be "interested persons" of the
Trust for purposes of the Act are indicated by an asterisk.
<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
Ashok N. Bakhru, 56 Chairman Executive Vice President - Finance and
1325 Ave. of the Americas & Trustee Administration and Chief Financial
New York, NY 10019 Officer, Coty Inc. (since April 1996);
President, ABN Associates (June 1994
to March 1996); Senior Vice President
of Scott Paper Company (until June
1994); Director of Arkwright Mutual
Insurance Company; Trustee of
International House of Philadelphia;
Member of Cornell University Council;
Trustee of the Walnut Street Theater.
*David B. Ford, 52 Trustee Managing Director, Goldman Sachs
One New York Plaza (since 1996); General Partner, Goldman
New York, NY 10004 Sachs (1986-1996); Co-Head of Goldman
Sachs Asset Management (since December
1994).
*Douglas C. Grip, 36 Trustee Vice President, Goldman Sachs (since
One New York Plaza & President May 1996); President, MFS Retirement
New York, NY 10004 Services Inc., of Massachusetts
Financial Services (prior thereto).
*John P. McNulty, 46 Trustee Managing Director, Goldman Sachs
One New York Plaza (since 1996); General Partner of
New York, NY 10004 Goldman Sachs (1990-1994 and
1995-1996); Co-Head of Goldman Sachs
Asset Management (since November
1996); Limited Partner of Goldman
Sachs (1994 to November 1995).
Mary P. McPherson, 63 Trustee Vice President and Senior Program
The Andrew W. Mellon Foundation Officer, The Andrew W. Mellon
</TABLE>
B-47
<PAGE>
<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
140 East 62nd Street Foundation (since October 1997);
New York, NY 10021 President Emeritus of Bryn Mawr
College (1978-1997); Director of
Josiah Macy, Jr. Foundation (since
1977); Director of the Philadelphia
Contributionship (since 1985);
Director of Amherst College (since
1986); Director of Dayton Hudson
Corporation (1988-1997); Director of
the Spenser Foundation (since 1993);
and member of PNC Advisory Board
(since 1993).
*Alan A. Shuch, 49 Trustee Limited Partner, Goldman Sachs (since
One New York Plaza 1994); Director and Vice President of
New York, NY 10004 Goldman Sachs Funds Management, Inc.
(from April 1990 to November 1994);
President and Chief Operating Officer,
GSAM (from September 1988 to November
1994); Limited Partner, Goldman Sachs
since December 1994.
Jackson W. Smart, Jr. 68 Trustee Chairman, Executive Committee, First
One Northfield Plaza #218 Commonwealth, Inc. (a managed dental
Northfield, IL 60093 care company) (since January 1996);
Chairman and Chief Executive Officer,
MSP Communications Inc. (a company
engaged in radio broadcasting)
(October 1988 to December 1997);
Director, Federal Express Corporation
(since 1976); Evanston Hospital
Corporation (since 1980); First
Commonwealth, Inc. (since 1996) and
North American Private Equity Group (a
venture capital fund) (______ to
______).
William H. Springer, 69 Trustee Vice Chairman and Chief Financial and
701 Morningside Drive Administrative Officer of Ameritech (a
Lake Forest, IL 60045 telecommunications holding company)
(February 1987 to June 1991);
Director, Walgreen Co. (a
</TABLE>
B-48
<PAGE>
<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
retail drug store business); Director
of Baker, Fentress & Co. (a closed-
end, non-diversified management
investment company) (April 1992 to
present).
Richard P. Strubel, 59 Trustee Managing Director, Tandem Partners,
737 N. Michigan Ave., Suite 1405 Inc. (since 1990); Director of Kaynar
Chicago, IL 60611 Technologies Inc. (since March 1997);
President and Chief Executive Officer,
Microdot, Inc. (a diversified
manufacturer of fastening systems and
connectors) (January 1984 to October
1994).
*Nancy L. Mucker, 49 Vice President Vice President, Goldman Sachs (since
4900 Sears Tower April 1985); Manager of Shareholder
Chicago, IL 60606 Servicing of GSAM (since November
1989).
*John M. Perlowski, 34 Treasurer Vice President, Goldman Sachs (since
One New York Plaza July 1995); Director, Investors Bank
New York, NY 10004 and Trust (November 1993).
*James A. Fitzpatrick, 38 Vice President Vice President of Goldman Sachs Asset
4900 Sears Tower Management (since April 1997); Vice
Chicago, IL 60606 President and General Manager, First
Data Corporation - Investor Services
Group (prior thereto).
*Michael J. Richman, 38 Secretary General Counsel of the Funds Group of
85 Broad Street Goldman Sachs Asset Management (since
New York, NY 10004 December 1997); Associate General
Counsel of Goldman Sachs Asset
Management (February 1994 to December
1997); Vice President and Assistant
General Counsel of Goldman Sachs
(since June 1992); Counsel to the
Funds Group, GSAM (since June 1992);
Partner, Hale and Dorr (September 1991
to June 1992).
</TABLE>
B-49
<PAGE>
<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
*Howard B. Surloff, 33 Assistant Secretary Assistant General Counsel, Goldman
85 Broad Street Sachs Asset Management and Associate
New York, NY 10004 General Counsel to the Funds Group
(since December 1997); Assistant
General Counsel and Vice President,
Goldman Sachs (since November 1993 and
May 1994, respectively); Counsel to
the Funds Group, Goldman Sachs Asset
Management (since November 1993);
Associate of Shereff, Friedman,
Hoffman & Goodman (prior thereto).
*Valerie A. Zondorak, 33 Assistant Secretary Assistant General Counsel, Goldman
85 Broad Street Sachs Asset Management and Associate
New York, NY 10004 General Counsel to the Funds Group
(since December 1997); Vice President
and Assistant General Counsel, Goldman
Sachs (since March 1997 and December
1997, respectively); Counsel to the
Funds Group, Goldman Sachs Asset
Management (since March 1997);
Associate of Shereff, Friedman,
Hoffman & Goodman (prior thereto).
*Steven E. Hartstein, 35 Assistant Secretary Legal Products Analyst, Goldman Sachs
85 Broad Street (June 1993 to present); Funds
New York, NY 10004 Compliance Officer, Citibank Global
Asset Management (August 1991 to June
1993).
*Deborah Farrell, 27 Assistant Secretary Legal Assistant, Goldman Sachs
85 Broad Street (January 1996 to present); Executive
New York, NY 10004 Secretary, Goldman Sachs (January 1994
to January 1996); Legal Secretary,
Cleary, Gottlieb, Steen and Hamilton
(September 1990 to January 1994).
*Kaysie P. Uniacke, 37 Assistant Secretary Managing Director, Goldman Sachs Asset
One New York Plaza Management (since 1997), Vice
New York, NY 10004 President and Senior Portfolio
</TABLE>
B-50
<PAGE>
<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
Manager, Goldman Sachs Asset
Management (1988 1997).
</TABLE>
B-51
<PAGE>
<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
*Elizabeth D. Anderson, 29 Assistant Secretary Portfolio Manager, GSAM (April 1996 to
One New York Plaza present); Junior Portfolio Manager,
New York, NY 10004 Goldman Sachs Asset Management (1995
to April 1996); Funds Trading
Assistant, GSAM (1993 - 1995);
Compliance Analyst, Prudential
Insurance (1991 - 1993).
</TABLE>
Each interested Trustee and officer holds comparable positions with certain
other companies of which Goldman Sachs, GSAM or an affiliate thereof is the
investment adviser, administrator and/or distributor. As of April 3, 1998, the
Trustees and officers of the Trust as a group owned less than 1% of the
outstanding shares of beneficial interest of each Fund.
The Trust pays each Trustee, other than those who are "interested persons" of
Goldman Sachs, a fee for each Trustee meeting attended and an annual fee. Such
Trustees are also reimbursed for travel expenses incurred in connection with
attending such meetings.
B-52
<PAGE>
The following table sets forth certain information with respect to the
compensation of each Trustee of the Trust (or its predecessors) for the one-year
period ended January 31, 1998:
Pension or Total Compensation
Aggregate Retirement Benefits from Goldman Sachs
Compensation Accrued as Part of Mutual Funds
Name of Trustee from the Funds Funds' Expenses (including the Funds)**
- --------------- -------------- --------------- -----
Ashok N. Bakhru* $93,750 $0 $93,750
David B. Ford 0 0 0
Douglas C. Grip 0 0 0
John P. McNulty 0 0 0
Mary P. McPherson 70,500 0 70,500
Alan A. Shuch 0 0 0
Jackson W. Smart 70,500 0 70,500
William H. Springer 70,500 0 70,500
Richard P. Strubel 70,500 0 70,500
______________
* Includes compensation as Chairman of the Board of Trustees.
** The Goldman Sachs Funds consisted of 43 mutual funds on January 31, 1998.
B-53
<PAGE>
MANAGEMENT SERVICES
- -------------------
As stated in the Funds' Prospectus, GSFM, One New York Plaza, New
York, New York, a Delaware limited partnership and an affiliate of Goldman
Sachs, 85 Broad Street, New York, New York, serves as investment adviser to CORE
U.S. Equity and Capital Growth Funds. GSAM, One New York Plaza, New York, New
York, a separate operating division of Goldman Sachs, serves as investment
adviser to Balanced, Growth and Income, CORE Large Cap Value, CORE Large Cap
Growth, CORE Small Cap Equity, CORE International Equity, Real Estate
Securities, Mid Cap Equity and Small Cap Value Funds. GSAMI, 133 Peterborough
Court, London, England, EC4A 2BB serves as investment adviser to International
Equity, European Equity, Japanese Equity, International Small Cap, Emerging
Markets Equity and Asia Growth Funds. See "Management" in the Funds' Prospectus
for a description of the applicable Adviser's duties to the Funds.
Founded in 1869, Goldman Sachs is among the oldest and largest
investment banking firms in the United States. Goldman Sachs is a leader in
developing portfolio strategies and in many fields of investing and financing,
participating in financial markets worldwide and serving individuals,
institutions, corporations and governments. Goldman Sachs is also among the
principal market sources for current and thorough information on companies,
industrial sectors, markets, economies and currencies, and trades and makes
markets in a wide range of equity and debt securities 24-hours a day. The firm
is headquartered in New York and has offices throughout the U.S. and in Beijing,
Frankfurt, George Town, Hong Kong, London, Madrid, Mexico City, Milan, Montreal,
Osaka, Paris, Sao Paulo, Seoul, Shanghai, Singapore, Sydney, Taipei, Tokyo,
Toronto, Vancouver and Zurich. It has trading professionals throughout the
United States, as well as in London, Tokyo, Hong Kong and Singapore. The active
participation of Goldman Sachs in the world's financial markets enhances its
ability to identify attractive investments.
The Advisers have access to the substantial research and market
expertise of Goldman Sachs whose investment research effort is one of the
largest in the industry. The Goldman Sachs Global Investment Research
Department covers approximately 1,700 companies, including approximately 2,000
U.S. corporations in 60 industries. The in-depth information and analyses
generated by Goldman Sachs' research analysts are available to the Advisers. For
more than a decade, Goldman Sachs has been among the top-ranked firms in
Institutional Investor's annual "All-America Research Team" survey. In
addition, many of Goldman Sachs' economists, securities analysts, portfolio
strategists and credit analysts have consistently been highly ranked in
respected industry surveys conducted in the U.S. and abroad. Goldman Sachs is
also among the leading investment firms using quantitative analytics (now used
by a growing number of investors) to structure and evaluate portfolios.
In managing the Funds, the Advisers have access to Goldman Sachs'
economics research. The Economics Research Department conducts economic,
financial and currency markets research which analyzes economic trends and
interest and exchange rate movement worldwide. The Economics Research
Department tracks factors such as inflation and money supply figures, balance of
trade figures, economic growth, commodity prices, monetary and fiscal policies,
and political events that can influence interest rates and currency trends. The
success of Goldman
B-54
<PAGE>
Sachs' international research team has brought wide recognition to its members.
The team has earned top rankings in the Institutional Investor's annual "All
British Research Team Survey" in the following categories: Economics (U.K.)
1986-1993; Economics/International 1989-1993; and Currency Forecasting 1986-
1993. In addition, the team has also earned top rankings in the annual "Extel
Financial Survey" of U.K. investment managers in the following categories: U.K.
Economy 1989-1995; International Economies 1986, 1988-1995; and Currency
Movements 1986-1993.
In allocating assets among foreign countries and currencies for the
Funds which can invest in foreign securities (in particular, the CORE
International Equity, International Equity, International Small Cap, Emerging
Markets Equity and Asia Growth Funds), the Advisers will have access to the
Global Asset Allocation Model. The model is based on the observation that the
prices of all financial assets, including foreign currencies, will adjust until
investors globally are comfortable holding the pool of outstanding assets.
Using the model, the Advisers will estimate the total returns from each currency
sector which are consistent with the average investor holding a portfolio equal
to the market capitalization of the financial assets among those currency
sectors. These estimated equilibrium returns are then combined with the
expectations of Goldman Sachs' research professionals to produce an optimal
currency and asset allocation for the level of risk suitable for a Fund given
its investment objectives and criteria.
Each Fund's management agreement provides that the Advisers may render
similar services to others as long as the services provided by the Advisers
thereunder are not impaired thereby.
The CORE Large Cap Value, European Equity, Japanese Equity and
International Small Cap Funds' management agreements were initially approved by
the Trustees, including a majority of the non-interested Trustees (as defined
below) who are not parties to the management agreement on November __, 1998,
July 22, 1998, April 23, 1998 and April 23, 1998, respectively. The CORE Small
Cap Equity, CORE International Equity and Real Estate Securities Funds'
management agreements were initially approved by the Trustees, including a
majority of the non-interested Trustees (as defined below) who are not parties
to the management agreements, on July 22, 1997. The CORE Large Cap Growth and
Emerging Markets Equity Funds' management agreements were initially approved by
the Trustees, including a majority of the non-interested Trustees (as defined
below) who are not parties to the management agreements, on April 23, 1997. The
other Funds' management agreements were most recently approved by the Trustees,
including a majority of the Trustees who are not parties to the management
agreements or "interested persons" (as such term is defined in the Act) of any
party thereto (the "non-interested Trustees"), on April 22, 1998. These
arrangements were most recently approved by the shareholders of each Fund (other
than CORE Large Cap Value, CORE Large Cap Growth, CORE Small Cap Equity, CORE
International Equity, Real Estate Securities, European Equity, Japanese Equity,
International Small Cap and Emerging Markets Equity Funds) on April 21, 1997.
The sole shareholder of the CORE Large Cap Value, CORE Large Cap Growth, CORE
Small Cap Equity, CORE International Equity, Emerging Markets Equity, Real
Estate Securities, Japanese Equity December __, 1998, International Small Cap
and European Equity Funds approved these arrangements on April 30, 1997, August
13, 1997, August 13, 1997, December 8, 1997, April 29, 1998, April 29, 1998,
April 29, 1998 and
B-55
<PAGE>
September 24, 1998, respectively. Each management agreement will remain in
effect until June 30, 1999 and from year to year thereafter provided such
continuance is specifically approved at least annually by (a) the vote of a
majority of the outstanding voting securities of such Fund or a majority of the
Trustees, and (b) the vote of a majority of the non-interested Trustees, cast in
person at a meeting called for the purpose of voting on such approval. Each
management agreement will terminate automatically if assigned (as defined in the
Act) and is terminable at any time without penalty by the Trustees or by vote of
a majority of the outstanding voting securities of the affected Fund on 60 days'
written notice to the Adviser and by the Adviser on 60 days' written notice to
the Trust.
Pursuant to the management agreements the Advisers are entitled to
receive the fees listed below, payable monthly based on such Fund's average
daily net assets. In addition, the Advisers are voluntarily limiting their
management fees for certain funds to the annual rates also listed below:
<TABLE>
<CAPTION>
Management Management
With Fee Without Fee
Fund Limitations Limitations
- ---- ------------------------ -------------------
<S> <C> <C>
GSAM
Balanced Fund 0.65% 0.65%
Growth and Income Fund 0.70% 0.70%
CORE Large Cap Value Fund % %
CORE Large Cap Growth Fund 0.60% 0.75%
CORE Small Cap Equity Fund 0.85% 0.85%
CORE International Equity Fund 0.85% 0.85%
Mid Cap Equity Fund 0.75% 0.75%
Small Cap Value Fund 1.00% 1.00%
Real Estate Securities Fund 0.85% 0.85%
<CAPTION>
<S> <C> <C>
GSFM
CORE U.S. Equity Fund 0.70% 0.75%
Capital Growth Fund 1.00% 1.00%
<CAPTION>
<S> <C> <C>
GSAMI
International Equity Fund 1.00% 1.00%
European Equity 1.00% 1.00%
Japanese Equity Fund 1.00% 1.00%
International Small Cap Fund 1.20% 1.20%
Emerging Markets Equity Fund 1.20% 1.20%
Asia Growth Fund 1.00% 1.00%
</TABLE>
GSAM, GSFM and GSAMI may discontinue or modify the above limitations in the
future at their discretion.
Prior to May 1, 1997, the Funds then in operation had separate investment
advisory (and subadvisory, in the case of the International Equity Fund) and
administration agreements. Effective May 1, 1997, the services under such
agreements were combined in the management
B-56
<PAGE>
agreement. The services required to be performed for the Funds and the combined
advisory (and subadvisory, in the case of the International Equity Fund) and
administration fees payable by the Funds under the former advisory (and
subadvisory, in the case of the International Equity Fund) and administration
agreements are identical to the services and fees under the management
agreement.
For the last three fiscal years the amounts of the combined investment
advisory (and subadvisory, in the case of the International Equity Fund) and
administration fees incurred by each Fund then in existence were as follows
(with and without the fee limitations that were then in effect):
<TABLE>
<CAPTION>
1998 1997 1996
======================== ======================== ========================
With Fee Without Fee With Fee Without Fee With Fee Without Fee
Limitations Limitations Limitations Limitations Limitations Limitations
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balanced Fund $ 870,444 $ 870,844 $ 402,183 $ 402,183 $ 193,041 $ 193,041
Growth and Income Fund 7,740,380 7,740,380 3,541,318 3,541,318 2,225,553 2,225,553
CORE Large Cap Value Fund/2/ N/A N/A N/A N/A N/A N/A
CORE U.S. Equity Fund 3,087,383 3,924,639 1,667,381 2,119,552 817,563 1,019,639
CORE Large Cap Growth Fund/1/ 182,628 228,283 N/A N/A N/A N/A
CORE Small Cap Equity Fund/1/ 65,418 74,140 N/A N/A N/A N/A
CORE International Equity Fund/1/ 51,031 57,835 N/A N/A N/A N/A
Capital Growth Fund 10,913,224 10,913,224 8,697,265 8,697,265 9,335,745 9,335,745
Mid Cap Equity Fund 1,653,946 1,653,946 964,945 964,945 489,043 489,043
International Equity Fund 6,772,826 7,525,362 4,124,076 4,638,203 2,794,872 2,794,872
Small Cap Value Fund 3,206,411 3,206,411 2,130,703 2,130,703 2,908,839 2,908,839
European Equity Fund/2/ N/A N/A N/A N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A N/A N/A N/A
International Small Cap Fund/2/ N/A N/A N/A N/A N/A N/A
Emerging Market Equity Fund/1/ 31,937 34,840 N/A N/A N/A N/A
Asia Growth Fund 1,874,193 2,179,299 2,221,857 2,583,555 1,563,641 1,563,641
Real Estate Securities Fund/2/ N/A N/A N/A N/A N/A N/A
</TABLE>
- ----------
1 The CORE Large Cap Growth, CORE Small Cap Equity, CORE International Equity
and Emerging Markets Equity Funds commenced operations on May 1, 1997, August
15, 1997, August 15, 1997 and December 15, 1997, respectively.
2 Not Operational.
Under the Management Agreement, each Adviser also: (i) supervises all non-
advisory operations of each Fund that it advises; (ii) provides personnel to
perform such executive, administrative and clerical services as are reasonably
necessary to provide effective administration of each Fund; (iii) arranges for
at each Fund's expense: (a) the preparation of all required tax returns, (b) the
preparation and submission of reports to existing shareholders, (c) the periodic
updating of prospectuses and statements of additional information and (d) the
preparation of reports to be filed with the SEC and other regulatory
authorities; (iv) maintains
B-57
<PAGE>
each Fund's records; and (v) provides office space and all necessary office
equipment and services.
ACTIVITIES OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER ACCOUNTS MANAGED
BY GOLDMAN SACHS. The involvement of the Advisers and Goldman Sachs and their
affiliates in the management of, or their interest in, other accounts and other
activities of Goldman Sachs may present conflicts of interest with respect to
the Funds or impede their investment activities.
Goldman Sachs and its affiliates, including, without limitation, the
Advisers and their advisory affiliates, have proprietary interests in, and may
manage or advise with respect to, accounts or funds (including separate accounts
and other funds and collective investment vehicles) which have investment
objectives similar to those of the Funds and/or which engage in transactions in
the same types of securities, currencies and instruments as the Funds. Goldman
Sachs and its affiliates are major participants in the global currency,
equities, swap and fixed income markets, in each case both on a proprietary
basis and for the accounts of customers. As such, Goldman Sachs and its
affiliates are actively engaged in transactions in the same securities,
currencies and instruments in which the Funds invest. Such activities could
affect the prices and availability of the securities, currencies and instruments
in which the Funds will invest, which could have an adverse impact on each
Fund's performance. Such transactions, particularly in respect of proprietary
accounts or customer accounts other than those included in the Advisers' and
their advisory affiliates' asset management activities, will be executed
independently of the Funds' transactions and thus at prices or rates that may be
more or less favorable. When the Advisers and their advisory affiliates seek
to purchase or sell the same assets for their managed accounts, including the
Funds, the assets actually purchased or sold may be allocated among the accounts
on a basis determined in its good faith discretion to be equitable. In some
cases, this system may adversely affect the size or the price of the assets
purchased or sold for the Funds.
From time to time, the Funds' activities may be restricted because of
regulatory restrictions applicable to Goldman Sachs and its affiliates, and/or
their internal policies designed to comply with such restrictions. As a result,
there may be periods, for example, when the Advisers and/or their affiliates
will not initiate or recommend certain types of transactions in certain
securities or instruments with respect to which the Advisers and/or their
affiliates are performing services or when position limits have been reached.
In connection with their management of the Funds, the Advisers may have
access to certain fundamental analysis and proprietary technical models
developed by Goldman Sachs and other affiliates. The Advisers will not be under
any obligation, however, to effect transactions on behalf of the Funds in
accordance with such analysis and models. In addition, neither Goldman Sachs
nor any of its affiliates will have any obligation to make available any
information regarding their proprietary activities or strategies, or the
activities or strategies used for other accounts managed by them, for the
benefit of the management of the Funds and it is not anticipated that the
Advisers will have access to such information for the purpose of managing the
Funds. The proprietary activities or portfolio strategies of Goldman Sachs and
its affiliates or the activities or strategies used for accounts managed by them
or other customer accounts could conflict with the transactions and strategies
employed by the Advisers in managing the Funds.
B-58
<PAGE>
The results of each Fund's investment activities may differ significantly
from the results achieved by the Advisers and their affiliates for their
proprietary accounts or accounts (including investment companies or collective
investment vehicles) managed or advised by them. It is possible that Goldman
Sachs and its affiliates and such other accounts will achieve investment results
which are substantially more or less favorable than the results achieved by a
Fund. Moreover, it is possible that a Fund will sustain losses during periods
in which Goldman Sachs and its affiliates achieve significant profits on their
trading for proprietary or other accounts. The opposite result is also
possible.
The investment activities of Goldman Sachs and its affiliates for their
proprietary accounts and accounts under their management may also limit the
investment opportunities for the Fund in certain emerging markets in which
limitations are imposed upon the aggregate amount of investment, in the
aggregate or individual issuers, by affiliated foreign investors.
An investment policy committee which may include partners of Goldman Sachs
and its affiliates may develop general policies regarding a Fund's activities
but will not be involved in the day-to-day management of such Fund. In such
instances, those individuals may, as a result, obtain information regarding the
Fund's proposed investment activities which is not generally available to the
public. In addition, by virtue of their affiliation with Goldman Sachs, any
such member of an investment policy committee will have direct or indirect
interests in the activities of Goldman Sachs and its affiliates in securities
and investments similar to those in which the Fund invests.
In addition, certain principals and certain of the employees of the
Advisers are also principals or employees of Goldman Sachs or their affiliated
entities. As a result, the performance by these principals and employees of
their obligations to such other entities may be a consideration of which
investors in the Funds should be aware.
Each Adviser may enter into transactions and invest in currencies or
instruments on behalf of a Fund in which customers of Goldman Sachs serve as the
counterparty, principal or issuer. In such cases, such party's interests in the
transaction will be adverse to the interests of a Fund, and such party may have
no incentive to assure that the Funds obtain the best possible prices or terms
in connection with the transactions. Goldman Sachs and its affiliates may also
create, write or issue derivative instruments for customers of Goldman Sachs or
its affiliates, the underlying securities or instruments of which may be those
in which a Fund invests or which may be based on the performance of a Fund. The
Funds may, subject to applicable law, purchase investments which are the subject
of an underwriting or other distribution by Goldman Sachs or its affiliates and
may also enter transactions with other clients of Goldman Sachs or its
affiliates where such other clients have interests adverse to those of the
Funds. At times, these activities may cause departments of the Firm to give
advice to clients that may cause these clients to take actions adverse to the
interests of the client. To the extent affiliated transactions are permitted,
the Funds will deal with Goldman Sachs and its affiliates on an arms-length
basis.
Each Fund will be required to establish business relationships with its
counterparties based on the Fund's own credit standing. Neither Goldman Sachs
nor its affiliates will have any
B-59
<PAGE>
obligation to allow their credit to be used in connection with a Fund's
establishment of its business relationships, nor is it expected that a Fund's
counterparties will rely on the credit of Goldman Sachs or any of its affiliates
in evaluating the Fund's creditworthiness.
From time to time, Goldman Sachs or any of its affiliates may, but is not
required to, purchase and hold shares of a Fund in order to increase the assets
of the Fund. Increasing a Fund's assets may enhance investment flexibility and
diversification and may contribute to economies of scale that tend to reduce the
Fund's expense ratio. Goldman Sachs reserves the right to redeem at any time
some or all of the shares of a Fund acquired for its own account. A large
redemption of shares of a Fund by Goldman Sachs could significantly reduce the
asset size of the Fund, which might have an adverse effect on the Fund's
investment flexibility, portfolio diversification and expense ratio. Goldman
Sachs will consider the effect of redemptions on a Fund and other shareholders
in deciding whether to redeem its shares.
It is possible that a Fund's holdings will include securities of entities
for which Goldman Sachs performs investment banking services as well as
securities of entities in which Goldman Sachs makes a market. From time to
time, Goldman Sachs' activities may limit the Funds' flexibility in purchases
and sales of securities. When Goldman Sachs is engaged in an underwriting or
other distribution of securities of an entity, the Advisers may be prohibited
from purchasing or recommending the purchase of certain securities of that
entity for the Funds.
DISTRIBUTOR AND TRANSFER AGENT
- ------------------------------
Goldman Sachs serves as the exclusive distributor of shares of the Funds
pursuant to a "best efforts" arrangement as provided by a distribution agreement
with the Trust on behalf of each Fund. Pursuant to the distribution agreement,
after the Prospectus and periodic reports have been prepared, set in type and
mailed to shareholders, Goldman Sachs will pay for the printing and distribution
of copies thereof used in connection with the offering to prospective investors.
Goldman Sachs will also pay for other supplementary sales literature and
advertising costs. Goldman Sachs may enter into sales agreements with certain
investment dealers and other financial service firms (the "Authorized Dealers")
to solicit subscriptions for Shares of the Funds. Goldman Sachs receives a
portion of the sales charge imposed on the sale, in the case of Class A Shares,
or redemption in the case of Class B and Class C Shares (and in certain cases,
Class A Shares), of such Fund shares. No Class B Shares were outstanding during
the fiscal year ended January 31, 1996. No Class C Shares were outstanding
during the fiscal years ended January 31, 1996 and 1997.
Goldman Sachs retained the following commissions on sales of Class A, Class
B and Class C Shares during the following periods:
<TABLE>
<CAPTION>
Class A & B Class A&B Class A
------------------ ------------------ ---------------------
1998 1997 1997
================== ================== =====================
<S> <C> <C> <C>
Balanced Fund $ 387,000 $ 94,000 $ 28,000
Growth and Income Fund 2,405,000 555,000 771,000
CORE Large Cap Value Fund2 N/A N/A N/A
</TABLE>
B-60
<PAGE>
<TABLE>
<CAPTION>
Class A & B Class A&B Class A
------------------ ------------------ ---------------------
1998 1997 1997
================== ================== =====================
<S> <C> <C> <C>
CORE U.S. Equity Fund 566,000 380,000 108,000
CORE Large Cap Growth Fund/1/ 129,000 N/A N/A
CORE Small Cap Equity Fund/1/ 49,000 N/A N/A
CORE International Equity Fund/1/ 24,000 N/A N/A
Capital Growth Fund 743,000 323,000 523,000
Mid Cap Equity Fund 704,000 N/A N/A
International Equity Fund 1,091,000 1,563,000 211,000
Small Cap Value Fund 662,000 219,000 202,000
European Equity/2/ N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A
International Small Cap Fund/2/ N/A N/A N/A
Emerging Market Equity Fund/1/ 107,000 N/A N/A
Asia Growth Fund 414,000 1,397,000 507,000
Real Estate Securities Fund/2/ N/A N/A N/A
</TABLE>
______________________________
1 The CORE Large Cap Growth, CORE Small Cap Equity, CORE International Equity,
and Emerging Markets Equity Funds commenced operations on May 1, 1997, August
15, 1997, August 15, 1997, and December 15, 1997, respectively.
2 Not operational.
Goldman Sachs serves as the Trust's transfer agent. Under its transfer
agency agreement with the Trust, Goldman Sachs has undertaken with the Trust to
(i) record the issuance, transfer and redemption of shares, (ii) provide
confirmations of purchases and redemptions, and quarterly statements, as well as
certain other statements, (iii) provide certain information to the Trust's
custodian and the relevant sub-custodian in connection with redemptions, (iv)
provide dividend crediting and certain disbursing agent services, (v) maintain
shareholder accounts, (vi) provide certain state Blue Sky and other information,
(vii) provide shareholders and certain regulatory authorities with tax related
information, (viii) respond to shareholder inquiries, and (ix) render certain
other miscellaneous services. For the last three fiscal years the amounts paid
to Goldman Sachs by each Fund then in existence performed were as follows under
the fee schedules then in effect:
B-61
<PAGE>
<TABLE>
<CAPTION>
Class A, B &
C Class A & B Class A
-------------- ------------- ---------------
1998 1997 1996
============== ============= ===============
<S> <C> <C> <C>
Balanced Fund $ 240,869 $148,576 $ 72,067
Growth and Income Fund 1,545,495 870,527 542,671
CORE Large Cap Value Fund/2/ N/A N/A N/A
CORE U.S. Equity Fund 483,534 319,246 103,682
CORE Large Cap Growth Fund/1/ 107,944 N/A N/A
CORE Small Cap Equity Fun/1/ 62,625 N/A N/A
CORE International Equity Fund/1/ 36,474 N/A N/A
Capital Growth Fund 992,678 908,310 549,844
MidCap Equity Fund 142,558 N/A N/A
International Equity Fund 860,719 586,243 129,313
Small Cap Value Fund 595,479 511,883 254,292
European Equity/2/ N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A
International Small Cap Fund/2/ N/A N/A N/A
Emerging Markets Equity Fund/1/ 1,907 N/A N/A
Asia Growth Fund 370,233 385,114 192,097
Real Estate Securities Fund/2/ N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Institutional Shares Service Shares
------------------------------------------- -------------------------------
1998 1997 1996 1998 1997
============== ============ ============= ================ =============
<S> <C> <C> <C> <C> <C>
Balanced Fund/1/ $ N/A $ N/A $ N/A $ N/A $ N/A
Growth and Income Fund 2,593 15 N/A 5,033 488
CORE Large Cap Value Fund/2/ N/A N/A N/A N/A N/A
CORE U.S. Equity Fund 0 N/A 11,571 0 N/A
CORE Large Cap Growth Fund/1/ 49 N/A N/A 21 N/A
CORE Small Cap Equity Fund/1/ 0 N/A N/A 0 N/A
CORE International Equity Fund/1/ 0 N/A N/A 0 N/A
Capital Growth Fund/1/ 683 N/A N/A 0 N/A
Mid Cap Equity Fund/1/ 74,315 51,464 26,082 1 N/A
International Equity Fund 0 N/A N/A 0 N/A
Small Cap Value Fund/1/ 2,674 N/A N/A 0 N/A
European Equity/2/ N/A N/A N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A N/A N/A
International Small Cap Fund/2/ N/A N/A N/A N/A N/A
Emerging Markets Equity Fund/1/ 617 N/A N/A 0 N/A
Asia Growth Fund 0 N/A N/A 0 N/A
Real Estate Securities Fund/2/ N/A N/A N/A N/A N/A
</TABLE>
- ---------------------------
1 The CORE Large Cap Growth, CORE Small Cap Equity, CORE International Equity
and Emerging Markets Equity Funds commenced operations on May 1, 1997,
August 15, 1997, August 15, 1997, and December 15, 1997, respectively.
2 Not Operational.
B-62
<PAGE>
The Trust's distribution and transfer agency agreements each provide that
Goldman Sachs may render similar services to others so long as the services
Goldman Sachs provides thereunder are not impaired thereby. Such agreements
also provide that the Trust will indemnify Goldman Sachs against certain
liabilities.
Expenses
- --------
Except as set forth in the Prospectus under "Management," the Trust is
responsible for the payment of its expenses. The expenses include, without
limitation, the fees payable to the Advisers, the fees and expenses payable to
the Trust's custodian and subcustodians, transfer agent fees, brokerage fees and
commissions, filing fees for the registration or qualification of the Trust's
shares under federal or state securities laws, expenses of the organization of
the Trust, fees and expenses incurred by the Trust in connection with membership
in investment company organizations, taxes, interest, costs of liability
insurance, fidelity bonds or indemnification, any costs, expenses or losses
arising out of any liability of, or claim for damages or other relief asserted
against, the Trust for violation of any law, legal and auditing fees and
expenses (including the cost of legal and certain accounting services rendered
by employees of GSAM, GSAMI and Goldman Sachs with respect to the Trust),
expenses of preparing and setting in type prospectuses, statements of additional
information, proxy material, reports and notices and the printing and
distributing of the same to the Trust's shareholders and regulatory authorities,
any expenses assumed by a Fund pursuant to its distribution and service plans,
compensation and expenses of its "non-interested" Trustees and extraordinary
expenses, if any, incurred by the Trust. Except for fees under any distribution
and service plans applicable to a particular class and transfer agency fees, all
Fund expenses are borne on a non-class specific basis.
The Advisers voluntarily have agreed to reduce or limit certain "Other
Expenses" (excluding management, distribution and service fees, transfer agency
fees, taxes, interest and brokerage fees and litigation, indemnification and
other extraordinary expenses) for the following Funds to the extent such
expenses exceed the following percentage of average daily net assets:
<TABLE>
<CAPTION>
Other
Expenses
--------------------
<S> <C>
Balanced Fund 0.01%
Growth and Income Fund 0.05%
CORE Large Cap Value Fund %
CORE U.S. Equity Fund 0.00%
CORE Large Cap Growth Fund 0.00%
CORE Small Cap Equity Fund 0.04%
CORE International Equity Fund 0.12%
Capital Growth Fund 0.00%
Mid Cap Equity Fund 0.10%
Small Cap Value Fund 0.06%
International Equity Fund 0.10%
European Equity Fund 0.10%
</TABLE>
B-63
<PAGE>
<TABLE>
<S> <C>
Japanese Equity Fund 0.01%
International Small Cap Fund 0.16%
Emerging Markets Equity Fund 0.15%
Asia Growth Fund 0.16%
Real Estate Securities Fund 0.00%
</TABLE>
Such reductions or limits, if any, are calculated monthly on a cumulative
basis and may be discontinued or modified by the applicable Adviser in its
discretion at any time.
Fees and expenses of legal counsel, registering shares of a Fund, holding
meetings and communicating with shareholders may include an allocable portion of
the cost of maintaining an internal legal and compliance department. Each Fund
may also bear an allocable portion of the applicable Adviser's costs of
performing certain accounting services not being provided by a Fund's Custodian.
For the last three fiscal years the amounts of certain "Other Expenses" of
each Fund then in existence that were reduced or otherwise limited were as
follows under the expense limitations that were then in effect:
<TABLE>
<CAPTION>
1998 1997 1996
============== ============== ================
<S> <C> <C> <C>
Balanced Fund $420,659 $319,552 $192,405
Growth and Income Fund 0 0 0
CORE Large Cap Value Fund/2/ N/A N/A N/A
CORE U.S. Equity Fund 63,253 104,833 110,581
CORE Large Cap Growth Fund/1/ 332,713 N/A N/A
CORE Small Cap Equity Fund/1/ 202,498 N/A N/A
CORE International Equity Fund/1/ 206,055 N/A N/A
Capital Growth Fund 0 N/A N/A
Mid Cap Equity Fund 264,378 72,441 85,515
International Equity Fund 0 144,265 N/A
Small Cap Value Fund 0 N/A N/A
European Equity Fund/2/ N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A
International Small Cap Fund/2/ N/A N/A N/A
Emerging Markets Equity Fund/1/ 112,725 N/A N/A
Asia Growth Fund 125,828 50,407 0
Real Estate Securities Fund/2/ N/A N/A N/A
</TABLE>
- --------------
1 The CORE Large Cap Growth, CORE Small Cap Equity, CORE International Equity,
Emerging Markets Equity Funds commenced operations on May 1, 1997, August
15, 1997, August 15, 1997, and December 15, 1997, respectively.
2 Not operational.
B-64
<PAGE>
CUSTODIAN AND SUB-CUSTODIANS
- ----------------------------
State Street, P.O. Box 1713, Boston, Massachusetts 02105, is the custodian
of the Trust's portfolio securities and cash. State Street also maintains the
Trust's accounting records. State Street may appoint domestic and foreign sub-
custodians from time to time to hold certain securities purchased by the Trust
and to hold cash for the Trust.
INDEPENDENT PUBLIC ACCOUNTANTS
- ------------------------------
Arthur Andersen LLP, independent public accountants, 225 Franklin Street,
Boston, Massachusetts 02110, have been selected as auditors of the Trust. In
addition to audit services, Arthur Andersen LLP, prepares the Trust's federal
and state tax returns, and provides consultation and assistance on accounting,
internal control and related matters.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Advisers are responsible for decisions to buy and sell securities for
the Funds, the selection of brokers and dealers to effect the transactions and
the negotiation of brokerage commissions, if any. Purchases and sales of
securities on a securities exchange are effected through brokers who charge a
commission for their services. Orders may be directed to any broker including,
to the extent and in the manner permitted by applicable law, Goldman Sachs.
In the over-the-counter market, securities are generally traded on a "net"
basis with dealers acting as principal for their own accounts without a stated
commission, although the price of a security usually includes a profit to the
dealer. In underwritten offerings, securities are purchased at a fixed price
which includes an amount of compensation to the underwriter, generally referred
to as the underwriter's concession or discount. On occasion, certain money
market instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.
In placing orders for portfolio securities of a Fund, the Advisers are
generally required to give primary consideration to obtaining the most favorable
price and efficient execution under the circumstances. This means that an
Adviser will seek to execute each transaction at a price and commission, if any,
which provides the most favorable total cost or proceeds reasonably attainable
in the circumstances. As permitted by Section 28(e) of the Securities Exchange
Act of 1934, the Fund may pay a broker which provides brokerage and research
services to the Fund an amount of disclosed commission in excess of the
commission which another broker would have charged for effecting that
transaction. Such practice is subject to a good faith determination that such
commission is reasonable in light of the services provided and to such policies
as the Trustees may adopt from time to time. While the Advisers generally seek
reasonably competitive spreads or commissions, a Fund will not necessarily be
paying the lowest spread or commission available. Within the framework of this
policy, the Advisers will consider research and investment services provided by
brokers or dealers who effect or are parties to portfolio
B-65
<PAGE>
transactions of a Fund, the Advisers and their affiliates, or their other
clients. Such research and investment services are those which brokerage houses
customarily provide to institutional investors and include research reports on
particular industries and companies, economic surveys and analyses,
recommendations as to specific securities and other products or services (e.g.,
quotation equipment and computer related costs and expenses), advice concerning
the value of securities, the advisability of investing in, purchasing or selling
securities, the availability of securities or the purchasers or sellers of
securities, furnishing analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and performance of
accounts, effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement) and providing lawful and appropriate
assistance to the Advisers in the performance of their decision-making
responsibilities. Such services are used by the Advisers in connection with all
of their investment activities, and some of such services obtained in connection
with the execution of transactions for a Fund may be used in managing other
investment accounts. Conversely, brokers furnishing such services may be
selected for the execution of transactions of such other accounts, whose
aggregate assets are far larger than those of a Fund, and the services furnished
by such brokers may be used by the Advisers in providing management services for
the Trust.
In circumstances where two or more broker-dealers offer comparable prices
and execution capability, preference may be given to a broker-dealer which has
sold shares of the Fund as well as shares of other investment companies or
accounts managed by the Advisers. This policy does not imply a commitment to
execute all portfolio transactions through all broker-dealers that sell shares
of the Fund.
On occasions when an Adviser deems the purchase or sale of a security to be
in the best interest of a Fund as well as its other customers (including any
other fund or other investment company or advisory account for which such
Adviser acts as investment adviser or subadviser), the Adviser, to the extent
permitted by applicable laws and regulations, may aggregate the securities to be
sold or purchased for the Fund with those to be sold or purchased for such other
customers in order to obtain the best net price and most favorable execution
under the circumstances. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by the applicable Adviser in the manner it considers to be equitable and
consistent with its fiduciary obligations to such Fund and such other customers.
In some instances, this procedure may adversely affect the price and size of the
position obtainable for a Fund.
Commission rates in the U.S. are established pursuant to negotiations with
the broker based on the quality and quantity of execution services provided by
the broker in the light of generally prevailing rates. The allocation of orders
among brokers and the commission rates paid are reviewed periodically by the
Trustees.
Subject to the above considerations, the Advisers may use Goldman Sachs as
a broker for a Fund. In order for Goldman Sachs to effect any portfolio
transactions for each Fund, the commissions, fees or other remuneration received
by Goldman Sachs must be reasonable and fair compared to the commissions, fees
or other remuneration paid to other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities
B-66
<PAGE>
exchange during a comparable period of time. This standard would allow Goldman
Sachs to receive no more than the remuneration which would be expected to be
received by an unaffiliated broker in a commensurate arm's-length transaction.
Furthermore, the Trustees, including a majority of the Trustees who are not
"interested" Trustees, have adopted procedures which are reasonably designed to
provide that any commissions, fees or other remuneration paid to Goldman Sachs
are consistent with the foregoing standard. Brokerage transactions with Goldman
Sachs are also subject to such fiduciary standards as may be imposed upon
Goldman Sachs by applicable law.
B-67
<PAGE>
For the past three fiscal years, each Fund in existence paid brokerage
commissions as follows:
<TABLE>
<CAPTION>
Total Total Brokerage
Brokerage Amount of Commissions
Total Commissions Transaction Paid
Brokerage Paid to on which to Brokers
Commissions Affiliated Commissions Providing
Paid Persons Paid Research
==== ======= ==== ========
<S> <C> <C> <C> <C>
Fiscal Year Ended
January 31, 1998:
Balanced Fund $ 111,054 $ 13,185(12%)/1/ $2,731,475,157(1%)/2/ N/A
Growth and Income Fund 1,550,312 190,001(12%)/1/ 9,046,102,538(3%)/2/ N/A
CORE Large Cap Value Fund/3/ N/A N/A N/A N/A
CORE U.S. Equity Fund 944,895 0 (0%)/1/ 1,996,000,522(0%)/2/ N/A
CORE Large Cap Growth Fund 54,360 288 (1%)/1/ 200,813,608(0%)/2/ N/A
CORE Small Cap Equity Fund 59,517 0 (0%)/1/ 159,674,227(0%)/2/ N/A
CORE International Equity Fund 43,120 0 (0%)/1/ 142,395,942(0%)/2/ N/A
Capital Growth Fund 514,890 37,947 (7%)/1/ 2,748,868,081(5%)/2/ N/A
Mid Cap Equity Fund 480,808 76,398(15%)/1/ 2,584,258,044(2%)/2/ N/A
International Equity Fund 506,607 0 (0%)/1/ 3,898,716,988(0%)/2/ N/A
Small Cap Value Fund 646,533 82,143(13%)/1/ 5,686,763,232(1%)/2/ N/A
European Equity Fund/3/ N/A N/A N/A N/A
Japanese Equity Fund/3/ N/A N/A N/A N/A
International Small Cap Fund/3/ N/A N/A N/A N/A
Emerging Markets Equity Fund 59,999 6,230(10%)/1/ 236,915,108(1%)/2/ N/A
Asia Growth Fund 814,656 2,885 (0%)/1/ 2,160,632,195(1%)/2/ N/A
Real Estate Securities Fund N/A N/A N/A N/A
</TABLE>
- ----------------------------
1 Percentage of total commissions paid.
2 Percentage of total amount of transactions involving the payment of
commissions effected through affiliated persons.
3 Not operational.
B-68
<PAGE>
<TABLE>
<CAPTION>
Total Total Brokerage
Brokerage Amount of Commissions
Total Commissions Transaction Paid
Brokerage Paid to on which to Brokers
Commissions Affiliated Commissions Providing
Paid Persons Paid Research
==== ======= ==== ========
<S> <C> <C> <C> <C>
Fiscal Year Ended
January 31, 1997:
Balanced Fund $ 62,072 $ 5,112 (8%)/1/ $ 1,057,742(15%)/2/ $ 0
Growth and Income Fund 779,396 77,587(10%)/1/ 13,310,208(9%)/2/ 0
CORE Large Cap Value Fund/3/ N/A N/A N/A N/A
CORE U.S. Equity Fund 279,620 0(0%)/1/ 6,706,824(0%)/2/ 0
CORE Large Cap Growth Fund/3/ N/A N/A N/A N/A
CORE Small Cap Equity Fund/3/ N/A N/A N/A N/A
CORE International Equity Fund/3/ N/A N/A N/A N/A
Capital Growth Fund 1,460,140 304,052(21%)/1/ 29,920,578(1%)/2/ 42,039
Mid Cap Equity Fund 364,294 22,134(6%)/1/ 6,655,100(7%)/2/ 0
International Equity Fund 1,529,436 0(0%) 48,059,958(0%)/2/ 0
European Equity Fund/3/ N/A N/A N/A N/A
Small Cap Value Fund 758,205 36,087(5%)/1/ 16,439,842(1%)/2/ 0
Japanese Equity Fund/3/ N/A N/A N/A N/A
International Small Cap Fund/3/ N/A N/A N/A N/A
Emerging Markets Equity Fund/3/ N/A N/A N/A N/A
Asia Growth Fund 1,554,313 50,624(3%)/1/ 102,609,295(4%)/2/ 0
Real Estate Securities Fund/3/ N/A N/A N/A N/A
</TABLE>
__________________
1 Percentage of total commissions paid.
2 Percentage of total amount of transactions involving the payment of
commissions effected through affiliated persons.
3 Not operational.
B-69
<PAGE>
<TABLE>
<CAPTION>
Total Total Brokerage
Brokerage Amount of Commissions
Total Commissions Transaction Paid
Brokerage Paid to on which to Brokers
Commissions Affiliated Commissions Providing
Paid Persons Paid Research
==== ======= ==== ========
<S> <C> <C> <C> <C>
Fiscal Year Ended
January 31, 1996:
Balanced Fund $ 56,860 $ 7,391(13%)/1/ $ 29,697,202(13%)/2/ $ 0
Growth and Income Fund 841,605 71,218(8%)/1/ 425,040,430(9%)/2/ 0
CORE Large Cap Value Fund/3/ N/A N/A N/A N/A
CORE U.S. Equity Fund 121,424 0(0%)/1/ 148,427,497(0%)/2/ 0
CORE Large Cap Growth Fund/3/ N/A N/A N/A N/A
CORE Small Cap Equity Fund/3/ N/A N/A N/A N/A
CORE International Equity Fund/3/ N/A N/A N/A N/A
Capital Growth Fund 1,979,949 284,660(14%)/1/ 1,034,755,196(11%)/2/ 0
Mid Cap Equity Fund 315,212 40,935(13%)/1/ 142,547,552(11%)/2/ 0
International Equity Fund 1,260,992 13,629(1%)/1/ 359,700,166(1%)/2/ 0
Small Cap Value Fund 690,234 72,980(11%)/1/ 170,616,044(6%)/2/ 0
European Equity Fund/3/ N/A N/A N/A N/A
Japanese Equity Fund/3/ N/A N/A N/A N/A
International Small Cap Fund/3/ N/A N/A N/A N/A
Emerging Markets Equity Fund/3/ N/A N/A N/A N/A
Asia Growth Fund 1,676,525 3,778(0%)/1/ 247,662,049(2%)/2/ 0
Real Estate Securities Fund/3/ N/A N/A N/A N/A
</TABLE>
- ----------------------------
1 Percentage of total commissions paid.
2 Percentage of total amount of transactions involving the payment of
commissions effected through affiliated persons.
3 Not operational.
B-70
<PAGE>
During the fiscal year ended January 31, 1998, the Trust acquired and sold
securities of its regular broker-dealers. As of January 31, 1998, the Trust
held the following amounts of securities of its regular broker/dealers, as
defined in Rule 10b-1 under the Act, or their parents ($ in thousands):
Fund Broker/Dealer Amount
- --------------------- -------------------- -------
Balanced Fund Bear Stearns $ 7,534
Lehman Brothers 5,954
Nomura Securities 5,901
Salomon Smith Barney 2,511
Morgan Stanley 425
Growth and Income Morgan Stanley 51,948
Fund Bear Stearns 32,164
Lehman Brothers 25,420
Nomura Securites 25,195
Salomon Smith Barney 10,721
Capital Growth Fund State Street 13,026
Bear Stearns 9,494
Lehman Brothers 7,504
Nomura Securities 7,437
Salomon Smith Barney 3,165
Small Cap Value Bear Stearns 12,074
Fund Lehman Brothers 9,543
Nomura Securities 9,458
Salomon Smith Barney 4,025
International State Street 24,412
Equity Fund
Asia Growth Fund State Street 4,920
Mid Cap Equity Fund Bear Stearns 10,870
Lehman Brothers 8,591
Nomura Securities 8,515
Salomon Smith Barney 3,623
Emerging Markets State Street 5,727
Equity Fund
B-71
<PAGE>
Fund Broker/Dealer Amount
- --------------------- -------------------- -------
CORE U.S. Equity Morgan Stanley $ 6,707
Fund Lehman Brothers 4,434
Merrill Lynch 2,878
Bear Stearns 1,823
Nomura Securities 1,428
Salomon Smith Barney 608
CORE Large Cap Merrill Lynch 1,578
Growth Fund Morgan Stanley 1,080
Lehman Brothers 929
Bear Stearns 722
Nomura Securities 566
Lehman Brothers 358
Salomon Smith Barney 241
CORE International State Street 2,391
Fund
CORE Small Cap Fund Bear Stearns 275
Lehman Brothers 217
Nomura Securities 216
Salomon Smith Barney 92
NET ASSET VALUE
Under the Act, the Trustees are responsible for determining in good faith
the fair value of securities of each Fund. In accordance with procedures
adopted by the Trustees, the net value per share of each class of each Fund is
calculated by determining the value of the net assets attributed to each class
of that Fund and dividing by the number of outstanding shares of that class.
All securities are valued as of the close of regular trading on the New York
Stock Exchange (normally, but not always, 4:00 p.m. New York time) on each
Business Day (as defined in the Prospectus).
In the event that the New York Stock Exchange or the national securities
exchange on which stock options are traded adopt different trading hours on
either a permanent or temporary basis, the Trustees will reconsider the time at
which net asset value is computed. In addition, each Fund may compute its net
asset value as of any time permitted pursuant to any exemption, order or
statement of the SEC or its staff.
Portfolio securities of the Fund for which accurate market quotations are
available are valued as follows: (a) securities listed on any U.S. or foreign
stock exchange or on the National
B-72
<PAGE>
Association of Securities Dealers Automated Quotations System ("NASDAQ") will be
valued at the last sale price on the exchange or system in which they are
principally traded, on the valuation date. If there is no sale on the valuation
day, securities traded will be valued at the mean between the closing bid and
asked prices, or if closing bid and asked prices are not available, at the
exchange defined close price on the exchange or system in which such securities
are principally traded. If the relevant exchange or system has not closed by the
above-mentioned time for determining the Funds net asset value, the securities
will be valued at the mean between the bid and asked prices at the time the net
asset value is determined; (b) over-the-counter securities not quoted on NASDAQ
will be valued at the last sale price on the valuation day or, if no sale
occurs, at the mean between the last bid and asked price; (c) equity securities
for which no prices are obtained under section (a) or (b) including those for
which a pricing service supplies no exchange quotation or a quotation that is
believed by the portfolio manager/trader to be inaccurate, will be valued at
their fair value in accordance with procedures approved by the Board of
Trustees; (d) fixed income securities with a remaining maturity of 60 days or
more for which accurate market quotations are readily available will be valued
according to dealer-supplied bid quotations or bid quotations from a recognized
pricing service (e.g., Merrill Lynch, J.J. Kenny, Muller Data Corp., Bloomberg,
EJV, Reuters or Standard & Poor's); (e) fixed income securities for which
accurate market quotations are not readily available are valued by the Advisers
based on valuation models that take into account spread and daily yield changes
on government securities in the appropriate market (i.e., matrix pricing); (f)
debt securities with a remaining maturity of 60 days or less are valued by the
Adviser at amortized cost, which the Trustees have determined to approximate
fair value; and (g) all other instruments, including those for which a pricing
service supplies no exchange quotation or a quotation that is believed by the
portfolio manager/trader to be inaccurate, will be valued at fair value in
accordance with the valuation procedures approved by the Board of Trustees.
Generally, trading in securities on European and Far Eastern securities
exchanges and on over-the-counter markets is substantially completed at various
times prior to the close of business on each Business Day in New York (i.e., a
day on which the New York Stock Exchange is open for trading). In addition,
European or Far Eastern securities trading generally or in a particular country
or countries may not take place on all Business Days in New York. Furthermore,
trading takes place in various foreign markets on days which are not Business
Days in New York and days on which the Funds' net asset values are not
calculated. Such calculation does not take place contemporaneously with the
determination of the prices of the majority of the portfolio securities used in
such calculation. Events affecting the values of portfolio securities that
occur between the time their prices are determined and the close of regular
trading on the New York Stock Exchange will not be reflected in a Fund's
calculation of net asset values unless the Trustees deem that the particular
event would materially affect net asset value, in which case an adjustment may
be made.
The proceeds received by each Fund and each other series of the Trust from
the issue or sale of its shares, and all net investment income, realized and
unrealized gain and proceeds thereof, subject only to the rights of creditors,
will be specifically allocated to such Fund and constitute the underlying assets
of that Fund or series. The underlying assets of each Fund will be segregated
on the books of account, and will be charged with the liabilities in respect of
such
B-73
<PAGE>
Fund and with a share of the general liabilities of the Trust. Expenses of the
Trust with respect to the Funds and the other series of the Trust are generally
allocated in proportion to the net asset values of the respective Funds or
series except where allocations of direct expenses can otherwise be fairly made.
PERFORMANCE INFORMATION
A Fund may from time to time quote or otherwise use total return, yield
and/or distribution rate information in advertisements, shareholder reports or
sales literature. Average annual total return and yield are computed pursuant
to formulas specified by the SEC.
Yield is computed by dividing net investment income earned during a recent
thirty-day period by the product of the average daily number of shares
outstanding and entitled to receive dividends during the period and the maximum
public offering price per share on the last day of the relevant period. The
results are compounded on a bond equivalent (semi-annual) basis and then
annualized. Net investment income per share is equal to the dividends and
interest earned during the period, reduced by accrued expenses for the period.
The calculation of net investment income for these purposes may differ from the
net investment income determined for accounting purposes.
The distribution rate for a specified period is calculated by annualizing
distributions of net investment income for such period and dividing this amount
by the net asset value per share or maximum public offering price on the last
day of the period.
Average annual total return for a specified period is derived by
calculating the actual dollar amount of the investment return on a $1,000
investment made at the maximum public offering price at the beginning of the
period, and then calculating the annual compounded rate of return which would
produce that amount, assuming a redemption at the end of the period. This
calculation assumes a complete redemption of the investment. It also assumes
that all dividends and distributions are reinvested at net asset value on the
reinvestment dates during the period.
Year-by-year total return and cumulative total return for a specified
period are each derived by calculating the percentage rate required to make a
$1,000 investment (made at the maximum public offering price with all
distributions reinvested) at the beginning of such period equal to the actual
total value of such investment at the end of such period. The table set forth
below indicates the total return (capital changes plus reinvestment of all
distributions) on a hypothetical investment of $1,000 in a Fund for the periods
indicated.
Occasionally, statistics may be used to specify Fund volatility or risk.
Measures of volatility or risk are generally used to compare a Fund's net asset
value or performance relative to a market index. One measure of volatility is
beta. Beta is the volatility of a fund relative to the total market. A beta of
more than 1.00 indicates volatility greater than the market, and a beta of less
than 1.00 indicates volatility less than the market. Another measure of
volatility or risk is standard deviation. Standard deviation is used to measure
variability of net asset value or total
B-74
<PAGE>
return around an average, over a specified period of time. The premise is that
greater volatility connotes greater risk undertaken in achieving performance.
From time to time the Trust may publish an indication of a Fund's past
performance as measured by independent sources such as (but not limited to)
Lipper Analytical Services, Inc., Morningstar Mutual Funds, Weisenberger
Investment Companies Service, Donoghue's Money Fund Report, Micropal, Barron's,
Business Week, Consumer's Digest, Consumer's Report, Investors Business Daily,
The New York Times, Kiplinger's Personal Finance Magazine, Changing Times,
Financial World, Forbes, Fortune, Money, Personal Investor, Sylvia Porter's
Personal Finance and The Wall Street Journal. The Trust may also advertise
information which has been provided to the NASD for publication in regional and
local newspapers. In addition, the Trust may from time to time advertise a
Fund's performance relative to certain indices and benchmark investments,
including: (a) the Lipper Analytical Services, Inc. Mutual Fund Performance
Analysis, Fixed Income Analysis and Mutual Fund Indices (which measure total
return and average current yield for the mutual fund industry and rank mutual
fund performance); (b) the CDA Mutual Fund Report published by CDA Investment
Technologies, Inc. (which analyzes price, risk and various measures of return
for the mutual fund industry); (c) the Consumer Price Index published by the
U.S. Bureau of Labor Statistics (which measures changes in the price of goods
and services); (d) Stocks, Bonds, Bills and Inflation published by Ibbotson
Associates (which provides historical performance figures for stocks, government
securities and inflation); (e) the Salomon Brothers' World Bond Index (which
measures the total return in U.S. dollar terms of government bonds, Eurobonds
and foreign bonds of ten countries, with all such bonds having a minimum
maturity of five years); (f) the Lehman Brothers Aggregate Bond Index or its
component indices; (g) the Standard & Poor's Bond Indices (which measure yield
and price of corporate, municipal and U.S. Government bonds); (h) the J.P.
Morgan Global Government Bond Index; (i) other taxable investments including
certificates of deposit (CDs), money market deposit accounts (MMDAs), checking
accounts, savings accounts, money market mutual funds and repurchase agreements;
(j) Donoghues' Money Fund Report (which provides industry averages for 7-day
annualized and compounded yields of taxable, tax-free and U.S. Government money
funds); (k) the Hambrecht & Quist Growth Stock Index; (l) the NASDAQ OTC
Composite Prime Return; (m) the Russell Midcap Index; (n) the Russell 2000 Index
- - Total Return; (o) the Russell 1000 Value Index; (p) the Russell 1000 Growth
Index-Total Return; (q) the Value-Line Composite-Price Return; (r) the Wilshire
4500 Index; (s) the FT-Actuaries Europe and Pacific Index; (t) historical
investment data supplied by the research departments of Goldman Sachs, Lehman
Brothers, First Boston Corporation, Morgan Stanley including the EAFE Indices,
and the Morgan Stanley Capital International Combined Asia ex Japan Free Index,
the Morgan Stanley Capital International Emerging Markets Free Index, Salomon
Brothers, Merrill Lynch, Donaldson Lufkin and Jenrette or other providers of
such data; (u) the FT-Actuaries Europe and Pacific Index; (v) CDA/Wiesenberger
Investment Companies Services or Wiesenberger Investment Companies Service; (w)
The Goldman Sachs Commodities Index; (x) information produced by Micropal, Inc.;
and (y) The Toykyo Price Index. The composition of the investments in such
indices and the characteristics of such benchmark investments are not identical
to, and in some cases are very different from, those of the Fund's portfolio.
These indices and averages are generally unmanaged and the items
B-75
<PAGE>
included in the calculations of such indices and averages may not be identical
to the formulas used by a Fund to calculate its performance figures.
Information used in advertisements and materials furnished to present and
prospective investors may include statements or illustrations relating to the
appropriateness of certain types of securities and/or mutual funds to meet
specific financial goals. Such information may address:
.. cost associated with aging parents;
.. funding a college education (including its actual and estimated cost);
.. health care expenses (including actual and projected expenses);
.. long-term disabilities (including the availability of, and coverage provided
by, disability insurance);
.. retirement (including the availability of social security benefits, the tax
treatment of such benefits and statistics and other information relating to
maintaining a particular standard of living and outliving existing assets);
.. asset allocation strategies and the benefits of diversifying among asset
classes;
.. the benefits of international and emerging market investments;
.. the effects of inflation on investing and saving;
.. the benefits of establishing and maintaining a regular pattern of investing
and the benefits of dollar-cost averaging; and
.. measures of portfolio risk, including but not limited to, alpha, beta and
standard deviation.
The Trust may from time to time use comparisons, graphs or charts in
advertisements to depict the following types of information:
.. the performance of various types of securities (common stocks, small company
stocks, long-term government bonds, treasury bills and certificates of
deposit) over time. However, the
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<PAGE>
characteristics of these securities are not identical to, and may be very
different from, those of a Fund's portfolio;
.. the dollar and non-dollar based returns of various market indices (i.e.,
Morgan Stanley Capital International EAFE Index, FT-Actuaries Europe &
Pacific Index and the Standard & Poor's Index of 500 Common Stocks) over
varying periods of time;
.. total stock market capitalizations of specific countries and regions on a
global basis;
.. performance of securities markets of specific countries and regions; and
.. value of a dollar amount invested in a particular market or type of security
over different periods of time.
In addition, the Trust may from time to time include rankings of
Goldman, Sachs & Co.'s research department by publications such as the
Institutional Investor and the Wall Street Journal in advertisements.
The CORE Large Cap Growth Fund was organized on May 1, 1997 and has no
operating or performance history prior thereto. However, in accordance with
interpretive positions expressed by the staff of the SEC, the Fund has adopted
the adjusted performance record of a separate account managed by the Advisers
for periods prior to the Funds' commencement of operations which converted into
Class A Shares as of the commencement date. Any quotation of performance data of
this Fund relating to this period will include the adjusted performance record
of the applicable separate account. The performance record of the separate
account quoted by the Fund have been adjusted downward based on the expenses
applicable to Class A Shares (the class into which the separate account
transferred) to reflect the expenses expected to be incurred by the Fund as
stated in the expense table in the Prospectus. These expenses include any sales
charges and asset-based charges (i.e., fees under Distribution and Service
Plans) imposed and other operating expenses. Total return quotations will be
calculated pursuant to SEC approved methodology. Prior to May 1, 1997, the
separate account was a separate investment advisory account under discretionary
management by the Adviser and had substantially similar investment objectives,
policies and strategies as the Fund. Unlike the Fund, the separate account was
not registered as an investment company under the Act and therefore was not
subject to certain investment restrictions and operational requirements that are
imposed on investment companies by the Act. If the separate account had been
registered as an investment company under the Act, the separate account's
performance may have been adversely affected by such restrictions and
requirements. On May 1, 1997, the separate account transferred a portion of its
assets to the Fund in exchange for Fund shares. The performance record of each
other class has been linked to the performance of the separate account (based on
Class A expenses) and the Class A performance for any periods prior to
commencement of operations of a class of shares.
B-77
<PAGE>
The Service Shares of the Balanced, Capital Growth, Small Cap Value,
Growth and Income, CORE U.S. Equity, CORE Large Cap Growth and International
Equity Funds commenced operations on August 15, 1997, August 15, 1997, August
15, 1997, March 16, 1996, June 7, 1996, May 1, 1997 and March 6, 1996,
respectively. The Service Shares of these Funds had no operating or performance
history prior thereto. However, in accordance with interpretive positions
expressed by the staff of the SEC, each of these Funds has adopted the
performance records of its respective Class A Shares from that class' inception
date (October 12, 1994, April 20, 1990, October 22, 1992, February 5, 1993, May
24, 1991, May 1, 1997 and December 1, 1992 respectively) to the inception dates
of Service Shares stated above. Quotations of performance data of these Funds
relating to this period include the adjusted performance record of the
applicable Class A Shares (excluding the impact of any applicable front-end
sales charge). The performance records of the applicable Class A Shares reflect
the expenses incurred by the Fund. These expenses include asset-based charges
(i.e., fees under Distribution and Service Plans) imposed and other operating
expenses. Total return quotations are calculated pursuant to SEC-approved
methodology.
B-78
<PAGE>
INTRODUCTION
VALUE OF $1,000 INVESTMENT
(AVERAGE ANNUAL TOTAL RETURN)
<TABLE>
<CAPTION>
Assumes
Maximum
Applicable
Sales
Fund Class Time Period Charge**
- ----------------- ----- ----------- ----------
<S> <C> <C> <C>
Balanced Fund A 10/12/94-7/31/98 - Since inception %
Balanced Fund A 2/1/97-7/31/98 - One year
Balanced Fund B 5/1/96-7/31/97 - Since inception
Balanced Fund B 2/1/97-7/31/98 - One year
Balanced Fund C 8/15/97-7/31/98 - Since inception*
Balanced Fund Institutional 8/15/97-7/31/98 - Since inception*
Balanced Fund Service 10/12/94-7/31/98 - Since inception
Balanced Funds Service 2/1/97-7/31/98 - One Year
Growth and Income A 2/5/93-7/31/98 - Since inception
Growth and Income A 2/1/97-7/31/98 - One year
Growth and Income B 5/1/96-7/31/98 - Since inception
Growth and Income B 2/1/97-7/31/98 - One year
Growth and Income C 8/15/97-7/31/98 - Since inception*
Growth and Income Institutional 6/3/96-7/31/98 - Since inception
Growth and Income Institutional 2/1/97-7/31/98 - One year
Growth and Income Service 2/5/93-7/31/98 - Since inception
Growth and Income Service 2/1/97-7/31/98 - One year
CORE U.S. Equity A 5/24/91-7/31/98 - Since inception
CORE U.S. Equity A 2/1/93-7/31/98 - Five year
CORE U.S. Equity A 2/1/97-7/31/98 - One year
CORE U.S. Equity B 5/1/96-7/31/98 - Since inception
CORE U.S. Equity B 2/1/97-7/31/98 - One year
CORE U.S. Equity C 8/15/97-7/31/98 - Since inception*
CORE U.S. Equity Institutional 6/15/95-7/31/98 - Since inception
CORE U.S. Equity Institutional 2/1/97-7/31/98 - One year
CORE U.S. Equity Service 5/24/91-7/31/98 - Since inception
CORE U.S. Equity Service 2/1/93-7/31/98 - Five year
CORE U.S. Equity Service 2/1/97-7/31/98 - One year
CORE Large Cap Growth A 11/11/91-7/31/98 - Since inception
CORE Large Cap Growth A 2/1/93-7/31/98 - Five year
CORE Large Cap Growth A 2/1/97-7/31/98 - One year
Assuming no voluntary
waiver of fees and no
expense reimbursements
----------------------
Assumes
maximum
Assumes Applicable Assumes
no sales sales no sales
Fund Charge Charge** Charge
- ----------------- -------- ---------------- --------
<S> <C> <C> <C>
Balanced Fund % % %
Balanced Fund
Balanced Fund
Balanced Fund
Balanced Fund
Balanced Fund
Balanced Fund
Balanced Funds
Growth and Income
Growth and Income
Growth and Income
Growth and Income
Growth and Income
Growth and Income
Growth and Income
Growth and Income
Growth and Income
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE U.S. Equity
CORE Large Cap Growth
CORE Large Cap Growth
CORE Large Cap Growth
</TABLE>
B-79
<PAGE>
INTRODUCTION
VALUE OF $1,000 INVESTMENT
(AVERAGE ANNUAL TOTAL RETURN)
<TABLE>
<CAPTION>
Assumes
Maximum
Applicable
Sales
Fund Class Time Period Charge**
- ----------------- ----- ----------- ----------
<S> <C> <C> <C>
CORE Large Cap Growth B 5/1/97-7/31/98 Since inception*
CORE Large Cap Growth C 8/15/97-7/31/98 Since inception*
CORE Large Cap Growth Institutional 11/11/91-7/31/98 Since inception
CORE Large Cap Growth Institutional 2/1/93-7/31/98 Five year
CORE Large Cap Growth Institutional 2/1/97-7/31/98 - One year
CORE Large Cap Growth Service 11/11/91-7/31/98 Since inception
CORE Large Cap Growth Service 2/1/93-7/31/98 Five year
CORE Large Cap Growth Service 2/1/97-7/31/98 One year
CORE Small Cap Equity A 8/15/97-7/31/98 - Since inception*
CORE Small Cap Equity B 8/15/97-7/31/98 - Since inception*
CORE Small Cap Equity C 8/15/97-7/31/98 - Since inception*
CORE Small Cap Equity Institutional 8/15/97-7/31/98 - Since inception*
CORE Small Cap Equity Service 8/15/97-7/31/98 - Since inception*
CORE International Equity A 8/15/97-7/31/98 - Since inception*
CORE International Equity B 8/15/97-7/31/98 - Since inception*
CORE International Equity C 8/15/97-7/31/98 - Since inception*
CORE International Equity Institutional 8/15/97-7/31/98 - Since inception*
CORE International Equity Service 8/15/97-7/31/98 - Since inception*
Capital Growth A 4/20/90-7/31/98 - Since inception
Capital Growth A 2/1/93-7/31/98 - Five year
Capital Growth A 2/1/97-7/31/98 - One year
Capital Growth B 5/1/96-7/31/98 - Since inception
Capital Growth B 2/1/97-7/31/98 - One year
Capital Growth C 8/15/97-7/31/98 - Since inception*
Capital Growth Institutional 8/15/97-7/31/98 - Since inception*
Capital Growth Service 4/20/90-7/31/98 - Since inception
Capital Growth Service 2/1/93-7/31/98 - Five year
Capital Growth Service 2/1/97-7/31/98 - One year
Mid Cap Equity A 8/15/97-7/31/98 - Since inception*
Mid Cap Equity B 8/15/97-7/31/98 - Since inception*
Assuming no voluntary
waiver of fees and no
expense reimbursements
----------------------
Assumes
maximum
Assumes Applicable Assumes
no sales sales no sales
Fund Charge Charge** Charge
- ----------------- -------- ---------------- --------
<S> <C> <C> <C>
CORE Large Cap Growth
CORE Large Cap Growth
CORE Large Cap Growth
CORE Large Cap Growth
CORE Large Cap Growth
CORE Large Cap Growth
CORE Large Cap Growth
CORE Large Cap Growth
CORE Small Cap Equity
CORE Small Cap Equity
CORE Small Cap Equity
CORE Small Cap Equity
CORE Small Cap Equity
CORE International Equity
CORE International Equity
CORE International Equity
CORE International Equity
CORE International Equity
Capital Growth
Capital Growth
Capital Growth
Capital Growth
Capital Growth
Capital Growth
Capital Growth
Capital Growth
Capital Growth
Capital Growth
Mid Cap Equity
Mid Cap Equity
</TABLE>
B-80
<PAGE>
INTRODUCTION
VALUE OF $1,000 INVESTMENT
(AVERAGE ANNUAL TOTAL RETURN)
<TABLE>
<CAPTION>
Assumes
Maximum
Applicable
Sales
Fund Class Time Period Charge**
- ----------------- ----- ----------- ----------
<S> <C> <C> <C>
Mid Cap Equity C 8/15/97-7/31/98 - Since inception*
Mid Cap Equity Institutional 8/1/95-7/31/98 - Since inception
Mid Cap Equity Institutional 2/1/97-7/31/98 - One year
Mid Cap Equity Service 7/18/97-7/31/98 - Since inception*
International Equity A 12/1/92-7/31/98 - Since inception
International Equity A 2/1/93-7/31/98 - Five year
International Equity A 2/1/97-7/31/98 - One year
International Equity B 5/1/96-7/31/98 - Since inception
International Equity B 2/1/97-7/31/98 - One year
International Equity C 8/15/97-7/31/98 - Since inception*
International Equity Institutional 2/7/96-7/31/98 - Since inception
International Equity Institutional 2/1/97-7/31/98 - One year
International Equity Service 12/1/92-7/31/98 - Since inception
International Equity Service 2/1/93-7/31/98 Five year
International Equity Service 2/1/97-7/31/98 One year
Small Cap Value A 10/22/92-7/31/98 - Since inception
Small Cap Value A 2/1/93-7/31/98 - Five year
Small Cap Value A 2/1/97-7/31/98 - One year
Small Cap Value B 5/1/96-7/31/98 - Since inception
Small Cap Value B 2/1/97-7/31/98 - One year
Small Cap Value C 8/15/97-7/31/98 - Since inception*
Small Cap Value Institutional 8/15/97-7/31/98 - Since inception*
Small Cap Value Service 10/22/92-7/31/98 - Since inception
Small Cap Value Service 2/1/93-7/31/98 - Five year
Small Cap Value Service 2/1/97-7/31/98 - One year
Asia Growth A 7/8/94-7/31/98 - Since inception
Asia Growth A 2/1/97-7/31/98 - One year
Asia Growth B 5/1/96-7/31/98 - Since inception
Asia Growth B 2/1/97-7/31/98 - One year
Asia Growth C 8/15/97-7/31/98 - Since inception*
Asia Growth Institutional 2/2/96-7/31/98 - Since inception
Assuming no voluntary
waiver of fees and no
expense reimbursements
----------------------
Assumes
maximum
Assumes Applicable Assumes
no sales sales no sales
Fund Charge Charge** Charge
- ----------------- -------- ---------------- --------
<S> <C> <C> <C>
Mid Cap Equity
Mid Cap Equity
Mid Cap Equity
Mid Cap Equity
International Equity
International Equity
International Equity
International Equity
International Equity
International Equity
International Equity
International Equity
International Equity
International Equity
International Equity
Small Cap Value
Small Cap Value
Small Cap Value
Small Cap Value
Small Cap Value
Small Cap Value
Small Cap Value
Small Cap Value
Small Cap Value
Small Cap Value
Asia Growth
Asia Growth
Asia Growth
Asia Growth
Asia Growth
Asia Growth
</TABLE>
B-81
<PAGE>
INTRODUCTION
VALUE OF $1,000 INVESTMENT
(AVERAGE ANNUAL TOTAL RETURN)
<TABLE>
<CAPTION>
Assumes
Maximum
Applicable
Sales
Fund Class Time Period Charge**
- ----------------- ----- ----------- ----------
<S> <C> <C> <C>
Asia Growth Institutional 2/1/97-7/31/98 - One year
Emerging Markets Equity A 12/15/97-7/31/98 - Since inception*
Emerging Markets Equity B 12/15/97-7/31/98 - Since inception*
Emerging Markets Equity C 12/15/97-7/31/98 - Since inception*
Emerging Markets Equity Institutional 12/15/97-7/31/98 - Since inception*
Emerging Markets Equity Service 12/15/97-7/31/98 - Since inception*
Assuming no voluntary
waiver of fees and no
expense reimbursements
----------------------
Assumes
maximum
Assumes Applicable Assumes
no sales sales no sales
Fund Charge Charge** Charge
- ----------------- -------- ---------------- --------
<S> <C> <C> <C>
Asia Growth
Emerging Markets Equity
Emerging Markets Equity
Emerging Markets Equity
Emerging Markets Equity
Emerging Markets Equity
</TABLE>
__________________________
All returns are average annual total returns.
* Represents an aggregate total return (not annualized) since this class has
not completed a full twelve months of operations.
** Total return reflects a maximum initial sales charge of 5.5% for Class A
Shares, the assumed deferred sales charge for Class B Shares (5% maximum
declining to 0% after six years) and the assumed deferred sales charge for
Class C Shares (1% if redeemed within 12 months of purchase).
B-82
<PAGE>
From time to time, advertisements or information may include a discussion of
certain attributes or benefits to be derived by an investment in the Fund. Such
advertisements or information may include symbols, headlines or other material
which highlight or summarize the information discussed in more detail in the
communication.
The Trust may from time to time summarize the substance of discussions
contained in shareholder reports in advertisements and publish the adviser's
views as to markets, the rationale for a Fund's investments and discussions of a
Fund's current asset allocation.
In addition, from time to time, advertisements or information may include a
discussion of asset allocation models developed by GSAM and/or its affiliates,
certain attributes or benefits to be derived from asset allocation strategies
and the Goldman Sachs mutual funds that may be offered as investment options for
the strategic asset allocations. Such advertisements and information may also
include GSAM's current economic outlook and domestic and international market
views to suggest periodic tactical modifications to current asset allocation
strategies. Such advertisements and information may include other materials
which highlight or summarize the services provided in support of an asset
allocation program.
A Fund's performance data will be based on historical results and will not be
intended to indicate future performance. A Fund's total return and yield will
vary based on market conditions, portfolio expenses, portfolio investments and
other factors. The value of a Fund's shares will fluctuate and an investor's
shares may be worth more or less than their original cost upon redemption. The
Trust may also, at its discretion, from time to time make a list of a Fund's
holdings available to investors upon request.
Total return will be calculated separately for each class of shares in
existence. Because each class of shares may be subject to different expenses,
total return with respect to each class of shares of a Fund will differ.
SHARES OF THE TRUST
The Funds, except the CORE International Equity, CORE Small Cap Equity, CORE
Large Cap Value, CORE Large Cap Growth, European Equity, Japanese Equity,
International Small Cap, Emerging Markets Equity and Real Estate Securities
Funds were reorganized from series of a Maryland corporation as part of Goldman
Sachs Trust, a Delaware business trust, by a Declaration of Trust dated January
28, 1997, on April 30, 1997.
The Act requires that where more than one class or series of shares exists,
each class or series must be preferred over all other classes or series in
respect of assets specifically allocated to such class or series. The Trustees
also have authority to classify and reclassify any series of shares into one or
more classes of shares. As of the date of this Additional Statement, the
Trustees have classified the shares of the Funds into five classes:
Institutional Shares, Service Shares, Class A Shares, Class B Shares and Class C
Shares.
B-83
<PAGE>
Each Institutional Share, Service Share, Class A Share, Class B Share and
Class C Share of a Fund represents a proportionate interest in the assets
belonging to the applicable class of the Fund. All expenses of a Fund are borne
at the same rate by each class of shares, except that fees under Service Plans
are borne exclusively by Service Shares, fees under Distribution and Service
Plans are borne exclusively by Class A, Class B or Class C Shares and transfer
agency fees may be borne at different rates by different share classes. The
Trustees may determine in the future that it is appropriate to allocate other
expenses differently between classes of shares and may do so to the extent
consistent with the rules of the SEC and positions of the Internal Revenue
Service. Each class of shares may have different minimum investment
requirements and be entitled to different shareholder services. With limited
exceptions, shares of a class may only be exchanged for shares of the same or an
equivalent class of another fund. See "Exchange Privilege" in the Prospectus.
Institutional Shares may be purchased at net asset value without a sales
charge for accounts in the name of an investor or institution that is not
compensated by a Fund under a Plan for services provided to the institution's
customers.
Service Shares may be purchased at net asset value without a sales charge for
accounts held in the name of an institution that, directly or indirectly,
provides certain account administration and shareholder liaison services to its
customers, including maintenance of account records and processing orders to
purchase, redeem and exchange Service Shares. Service Shares bear the cost of
account administration fees at the annual rate of up to 0.50% of the average
daily net assets of the Fund attributable to Service Shares.
Class A Shares are sold, with an initial sales charge of up to 5.5%, through
brokers and dealers who are members of the National Association of Securities
Dealers, Inc. and certain other financial service firms that have sales
agreements with Goldman Sachs. Class A Shares bear the cost of distribution and
service fees at the aggregate rate of up to 0.25% of the average daily net
assets of such Class A Shares (.50% with respect to the CORE International
Equity, International Equity, European Equity, Japanese Equity, International
Small Cap, Emerging Markets, Asia Growth, Global Income and Real Estate
Securities Funds). With respect to Class A Shares, the Distributor at its
discretion may use compensation for distribution services paid under the
Distribution and Services Plan for personal and account maintenance services and
expenses so long as such total compensation under the Plan does not exceed the
maximum cap on "service fees" imposed by the NASD.
Class B Shares of the Funds are sold subject to a contingent deferred sales
charge of up to 5.0% through brokers and dealers who are members of the National
Association of Securities Dealers Inc. and certain other financial services
firms that have sales arrangements with Goldman Sachs. Class B Shares bear the
cost of distribution (Rule 12b-1) fees at the aggregate rate of up to 0.75% of
the average daily net assets attributable to Class B Shares. Class B Shares
also bear the cost of service fees at an annual rate of up to 0.25% of the
average daily net assets attributable to Class B Shares.
Class C Shares of the Funds are sold subject to a contingent deferred sales
charge of up to 1.0% through brokers and dealers who are members of the National
Association of Securities
B-84
<PAGE>
Dealers Inc. and certain other financial services firms that have sales
arrangements with Goldman Sachs. Class C Shares bear the cost of distribution
(Rule 12b-1) fees at the aggregate rate of up to 0.75% of the average daily net
assets attributable to Class C Shares. Class C Shares also bear the cost of
service fees at an annual rate of up to 0.25% of the average daily net assets
attributable to Class C Shares.
It is possible that an institution or its affiliate may offer different
classes of shares (i.e., Institutional, Service, Class A Shares, Class B Shares
and Class C Shares) to its customers and thus receive different compensation
with respect to different classes of shares of each Fund. Dividends paid by
each Fund, if any, with respect to each class of shares will be calculated in
the same manner, at the same time on the same day and will be the same amount,
except for differences caused by the differences in expenses discussed above.
Similarly, the net asset value per share may differ depending upon the class of
shares purchased.
Certain aspects of the shares may be altered after advance notice to
shareholders if it is deemed necessary in order to satisfy certain tax
regulatory requirements.
When issued, shares are fully paid and non-assessable. In the event of
liquidation, shareholders are entitled to share pro rata in the net assets of
the applicable class of the relevant Fund available for distribution to such
shareholders. All shares are freely transferable and have no preemptive,
subscription or conversion rights.
[UPDATE]
As of April 13, 1998 State Street Bank & Trust Company as Trustee (GS Profit
Sharing Master Trust), P.O. Box 1992, Boston, MA 02105, was recordholder of
13.2% and Marine Midland Bank as Trustee (Mark IV Ind & Subs Employees
Retirement Income Fund) P.O. Box 1329, Attention: Mutual Fund Processing,
Buffalo, NY 14240, was recordholder of 6.0% of CORE U.S. Equity Fund's
outstanding shares; Fluor Corporation, Master Retirement Trust, 3353 Michelson
Drive, Irvine, CA 92698, was recordholder of 17.0%, Goldman Sachs CORE Large Cap
Fund, Omnibus A/C - Growth and Income Strategy, 4900 Sears Tower, Chicago, IL
60606, was recordholder of 8.7% and Goldman Sachs CORE Large Cap Growth Fund,
Omnibus A/C - Growth Strategy, 4900 Sears Tower, Chicago, IL 60606, was
recordholder of 7.7% of CORE Large Cap Growth Fund; Goldman Sachs CORE Small
Cap, Omnibus A/C Growth Strategy, 4900 Sears Tower, Chicago, IL 60606, was
recordholder of 10.9%, The Goldman Sachs Group LP, Seed Account, Attn: Karen
Yost, 85 Broad Street, New York, NY 10004, was recordholder of 10.9% and Goldman
Sachs CORE Small Cap Equity Fund, Omnibus A/C Growth & Income Strategy, 4900
Sears Tower, Chicago, IL 60606, was recordholder of 9.7% of CORE Small Cap
Equity Fund's outstanding shares; Goldman Sachs CORE International Equity Fund,
Omnibus A/C Growth & Income Strategy, 4900 Sears Tower, Chicago, IL 60606, was
recordholder of 29.1%, Goldman Sachs CORE International Equity Fund, Omnibus A/C
- - Growth Strategy, 4900 Sears Tower, Chicago, IL 60606, was recordholder of
23.1%, The Goldman Sachs Group LP, Seed Account, Attn: Karen Yost, 85 Broad
Street, New York, NY 10004, was recordholder of 11.7%, Goldman Sachs CORE
International Equity Fund, Omnibus A/C Aggressive Growth Strategy, 4900 Sears
Tower, Chicago, IL 60606, was recordholder of 9.6% and Goldman Sachs CORE
International Equity Fund,
B-85
<PAGE>
Omnibus A/C Income Strategy, 4900 Sears Tower, Chicago, IL 60606, was
recordholder of 5.7% of CORE International Equity Fund's outstanding shares;
State Street Bank and Trust Company as Trustee, (GS Profit Sharing Master
Trust), was recordholder of 59.9% of Mid Cap Equity Fund's outstanding shares;
Ralph Lauren 1997 CRUT, C/O Arnold Cohen, 111 W. 40th Street, New York, NY
10018, was recordholder of 11.1%, B.J. McCloskey, T.D. McCloskey, W.R. Jordan,
R.L. Branstein as Trustees, McCloskey Trust U/A/D 8/10/72, P.O. Box 7846, Aspen,
CO 81612, was recordholder of 9.8%, GTE Investment Management Corporation, Attn:
Robert Nunt, One Stamford Forum, Stamford, CT 06904, was recordholder of 7.2%,
Goldman Sachs Emerging Markets Equity Fund, Omnibus A/C Growth & Income
Strategy, 4900 Sears Tower, Chicago, IL 60606, was recordholder of 5.9% and
Goldman Sachs Emerging Markets Equity Fund, Omnibus A/C Growth Strategy, 4900
Sears Tower, Chicago, IL 60606, was recordholder of 5.8% of Emerging Markets
Equity Fund's outstanding shares; State Street Bank and Trust Company as
Trustee, FBO Goldman Sachs Employee Pension Plan, Attn: Jennifer Consigli, 200
Newport Avenue, North Quincy, MA 02170, was recordholder of 6.4% of Asia Growth
Fund's outstanding shares.
Rule 18f-2 under the Act provides that any matter required to be submitted by
the provisions of the Act or applicable state law, or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Trust
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class or series affected
by such matter. Rule 18f-2 further provides that a class or series shall be
deemed to be affected by a matter unless the interests of each class or series
in the matter are substantially identical or the matter does not affect any
interest of such class or series. However, Rule 18f-2 exempts the selection of
independent public accountants, the approval of principal distribution contracts
and the election of directors from the separate voting requirements of Rule 18f-
2.
The Trust is not required to hold annual meetings of shareholders and does not
intend to hold such meetings. In the event that a meeting of shareholders is
held, each share of the Trust will be entitled, as determined by the Trustees,
either to one vote for each share or to one vote for each dollar of net asset
value represented by such shares on all matters presented to shareholders
including the elections of Trustees (this method of voting being referred to as
"dollar based voting"). However, to the extent required by the Act or otherwise
determined by the Trustees, series and classes of the Trust will vote separately
from each other. Shareholders of the Trust do not have cumulative voting rights
in the election of Trustees. Meetings of shareholders of the Trust, or any
series or class thereof, may be called by the Trustees, certain officers or upon
the written request of holders of 10% or more of the shares entitled to vote at
such meetings. The shareholders of the Trust will have voting rights only with
respect to the limited number of matters specified in the Declaration of Trust
and such other matters as the Trustees may determine or may be required by law.
The Declaration of Trust provides for indemnification of Trustees, officers,
employees and agents of the Trust unless the recipient is adjudicated (i) to be
liable by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such person's office or (ii)
not to have acted in good faith in the reasonable belief that such person's
actions were in the best interest of the Trust. The Declaration of Trust
provides that, if any shareholder or former shareholder of any series is held
personally liable solely by reason of being or
B-86
<PAGE>
having been a shareholder and not because of the shareholder's acts or omissions
or for some other reason, the shareholder or former shareholder (or heirs,
executors, administrators, legal representatives or general successors) shall be
held harmless from and indemnified against all loss and expense arising from
such liability. The Trust, acting on behalf of any affected series, must, upon
request by such shareholder, assume the defense of any claim made against such
shareholder for any act or obligation of the series and satisfy any judgment
thereon from the assets of the series.
The Declaration of Trust permits the termination of the Trust or of any series
or class of the Trust (i) by a majority of the affected shareholders at a
meeting of shareholders of the Trust, series or class; or (ii) by a majority of
the Trustees without shareholder approval if the Trustees determine that such
action is in the best interest of the Trust, series or its respective
shareholders. The factors and events that the Trustees may take into account in
making such determination include (i) the inability of the Trust or any
successor series or class to maintain its assets at an appropriate size; (ii)
changes in laws or regulations governing the Trust, series or class or affecting
assets of the type in which it invests; or (iii) economic developments or trends
having a significant adverse impact on their business or operations.
The Declaration of Trust authorizes the Trustees without shareholder approval
to cause the Trust, or any series thereof, to merge or consolidate with any
corporation, association, trust or their organization or sell or exchange all or
substantially all of the property belonging to the Trust or any series thereof.
In addition, the Trustees, without shareholder approval, may adopt a master-
feeder structure by investing all or a portion of the assets of a series of the
Trust in the securities of another open-end investment company.
The Declaration of Trust permits the Trustees to amend the Declaration of
Trust without a shareholder vote. However, shareholders of the Trust have the
right to vote on any amendment (i) that would adversely affect the voting rights
of shareholder; (ii) that is required by law to be approved by shareholders;
(iii) that would amend the provisions of the Declaration of Trust regarding
amendments and supplements thereto; or (iv) that the Trustees determine to
submit to shareholders.
The Trustees may appoint separate Trustees with respect to one or more series
or classes of the Trust's shares (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other series or
class of the Trust. The Series Trustees have, to the exclusion of any other
Trustees of the Delaware Trust, all the powers and authorities of Trustees under
the Trust Instrument with respect to any other series or class.
SHAREHOLDER AND TRUSTEE LIABILITY
- ---------------------------------
Under Delaware Law, the shareholders of the Funds are not generally subject to
liability for the debts or obligations of the Trust. Similarly, Delaware law
provides that a series of the Trust will not be liable for the debts or
obligations of any other series of the Trust. However, no similar statutory or
other authority limiting business trust shareholder liability exists in other
states. As a result, to the extent that a Delaware business trust or a
shareholder is subject to the jurisdiction of courts of such other states, the
courts may not apply Delaware law and may thereby subject the
B-87
<PAGE>
Delaware business trust shareholders to liability. To guard against this risk,
the Declaration of Trust contains an express disclaimer of shareholder liability
for acts or obligations of a Fund. Notice of such disclaimer will normally be
given in each agreement, obligation or instrument entered into or executed by a
series or the Trustees. The Declaration of Trust provides for indemnification by
the relevant Fund for all loss suffered by a shareholder as a result of an
obligation of the series. The Declaration of Trust also provides that a series
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the series and satisfy any judgment
thereon. In view of the above, the risk of personal liability of shareholders of
a Delaware business trust is remote.
In addition to the requirements under Delaware law, the Declaration of Trust
provides that shareholders of a series may bring a derivative action on behalf
of the series only if the following conditions are met: (a) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the series, or 10% of the outstanding shares of
the class to which such action relates, shall join in the request for the
Trustees to commence such action; and (b) the Trustees must be afforded a
reasonable amount of time to consider such shareholder request and to
investigate the basis and to employ other advisers in considering the merits of
the request and shall require an undertaking by the shareholders making such
request to reimburse the series for the expense of any such advisers in the
event that the Trustees determine not to bring such action.
The Declaration of Trust further provides that the Trustees will not be liable
for error of judgment or mistakes of fact or law, but nothing in the Declaration
of Trust protects a Trustee against liability to which he or she would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his or her office.
TAXATION
The following is a summary of the principal U.S. federal income, and certain
state and local, tax considerations regarding the purchase, ownership and
disposition of shares in each Fund of the Trust. This summary does not address
special tax rules applicable to certain classes of investors, such as tax-exempt
entities, insurance companies and financial institutions. Each prospective
shareholder is urged to consult his own tax adviser with respect to the specific
federal, state, local and foreign tax consequences of investing in each Fund.
The summary is based on the laws in effect on the date of this Additional
Statement, which are subject to change.
GENERAL
- -------
Each Fund is a separate taxable entity. CORE Large Cap Value, Real Estate
Securities, European Equity, Japanese Equity and International Small Cap Funds
each intend to elect and each other Fund has elected to be treated and intends
to qualify for each taxable year as a regulated investment company under
Subchapter M of the Code.
B-88
<PAGE>
Qualification as a regulated investment company under the Code requires, among
other things, that (a) a Fund derive at least 90% of its gross income for its
taxable year from dividends, interest, payments with respect to securities loans
and gains from the sale or other disposition of stocks or securities or foreign
currencies, or other income (including but not limited to gains from options,
futures, and forward contracts) derived with respect to its business of
investing in such stock, securities or currencies (the "90% gross income test");
and (b) such Fund diversify its holdings so that, at the close of each quarter
of its taxable year, (i) at least 50% of the market value of such Fund's total
(gross) assets is comprised of cash, cash items, U.S. Government securities,
securities of other regulated investment companies and other securities limited
in respect of any one issuer to an amount not greater in value than 5% of the
value of such Fund's total assets and to not more than 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of its
total (gross) assets is invested in the securities of any one issuer (other than
U.S. Government securities and securities of other regulated investment
companies) or two or more issuers controlled by the Fund and engaged in the
same, similar or related trades or businesses. For purposes of the 90% gross
income test, income that a Fund earns from equity interests in certain entities
that are not treated as corporations (e.g., partnerships or trusts) for U.S. tax
purposes will generally have the same character for such Fund as in the hands of
such an entity; consequently, a Fund may be required to limit its equity
investments in such entities that earn fee income, rental income, or other
nonqualifying income. In addition, future Treasury regulations could provide
that qualifying income under the 90% gross income test will not include gains
from foreign currency transactions that are not directly related to a Fund's
principal business of investing in stock or securities or options and futures
with respect to stock or securities. Using foreign currency positions or
entering into foreign currency options, futures and forward or swap contracts
for purposes other than hedging currency risk with respect to securities in a
Fund's portfolio or anticipated to be acquired may not qualify as "directly-
related" under these tests.
If a Fund complies with such provisions, then in any taxable year in which
such Fund distributes, in compliance with the Code's timing and other
requirements, at least 90% of its "investment company taxable income" (which
includes dividends, taxable interest, taxable accrued original issue discount
and market discount income, income from securities lending, any net short-term
capital gain in excess of net long-term capital loss, certain net realized
foreign exchange gains and any other taxable income other than "net capital
gain," as defined below, and is reduced by deductible expenses), and at least
90% of the excess of its gross tax-exempt interest income (if any) over certain
disallowed deductions, such Fund (but not its shareholders) will be relieved of
federal income tax on any income of the Fund, including long-term capital gains,
distributed to shareholders. However, if a Fund retains any investment company
taxable income or "net capital gain" (the excess of net long-term capital gain
over net short-term capital loss), it will be subject to a tax at regular
corporate rates on the amount retained. If the Fund retains any net capital
gain, the Fund may designate the retained amount as undistributed capital gains
in a notice to its shareholders who, if subject to U.S. federal income tax on
long-term capital gains, (i) will be required to include in income for federal
income tax purposes, as long-term capital gain, their shares of such
undistributed amount, and (ii) will be entitled to credit their proportionate
shares of the tax paid by the Fund against their U.S. federal income tax
liabilities, if any, and to claim refunds to the extent the credit exceeds such
liabilities. For U.S. federal income tax purposes, the tax basis of shares
owned by a shareholder of the Fund will be increased by an amount equal under
current law to 65%
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of the amount of undistributed net capital gain included in the shareholder's
gross income. Each Fund intends to distribute for each taxable year to its
shareholders all or substantially all of its investment company taxable income,
net capital gain and any net tax-exempt interest. Exchange control or other
foreign laws, regulations or practices may restrict repatriation of investment
income, capital or the proceeds of securities sales by foreign investors such as
the CORE International Equity, International Equity, European Equity, Japanese
Equity, International Small Cap, Emerging Markets Equity or Asia Growth Funds
and may therefore make it more difficult for such a Fund to satisfy the
distribution requirements described above, as well as the excise tax
distribution requirements described below. However, each Fund generally expects
to be able to obtain sufficient cash to satisfy such requirements from new
investors, the sale of securities or other sources. If for any taxable year a
Fund does not qualify as a regulated investment company, it will be taxed on all
of its investment company taxable income and net capital gain at corporate
rates, and its distributions to shareholders will be taxable as ordinary
dividends to the extent of its current and accumulated earnings and profits.
In order to avoid a 4% federal excise tax, each Fund must distribute (or be
deemed to have distributed) by December 31 of each calendar year at least 98% of
its taxable ordinary income for such year, at least 98% of the excess of its
capital gains over its capital losses (generally computed on the basis of the
one-year period ending on October 31 of such year), and all taxable ordinary
income and the excess of capital gains over capital losses for the previous year
that were not distributed for such year and on which the Fund paid no federal
income tax. For federal income tax purposes, dividends declared by a Fund in
October, November or December to shareholders of record on a specified date in
such a month and paid during January of the following year are taxable to such
shareholders as if received on December 31 of the year declared. The Funds
anticipate that they will generally make timely distributions of income and
capital gains in compliance with these requirements so that they will generally
not be required to pay the excise tax. For federal income tax purposes, each
Fund is permitted to carry forward a net capital loss in any year to offset its
own capital gains, if any, during the eight years following the year of the
loss. Asia Growth Fund had approximately $184,000, $5,487,000 and $10,408,000
and $14,137,000 at October 31, 1997 of capital loss carry forwards expiring in
2002, 2003, 2004 and 2005, respectively, for federal tax purposes. These amounts
are available to be carried forward to offset future capital gains to the extent
permitted by the Code and applicable tax regulations.
Gains and losses on the sale, lapse, or other termination of options and
futures contracts, options thereon and certain forward contracts (except certain
foreign currency options, forward contracts and futures contracts) will
generally be treated as capital gains and losses. Certain of the futures
contracts, forward contracts and options held by a Fund will be required to be
"marked-to-market" for federal income tax purposes, that is, treated as having
been sold at their fair market value on the last day of the Fund's taxable year.
These provisions may require a Fund to recognize income or gains without a
concurrent receipt of cash. Any gain or loss recognized on actual or deemed
sales of these futures contracts, forward contracts, or options will (except for
certain foreign currency options, forward contracts, and futures contracts) be
treated as 60% long-term capital gain or loss and 40% short-term capital gain or
loss. As a result of certain hedging transactions entered into by a Fund, the
Fund may be required to defer the recognition of losses on futures contracts,
forward contracts, and options or underlying securities or foreign currencies to
the extent of any
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unrecognized gains on related positions held by such Fund and the
characterization of gains or losses as long-term or short-term may be changed.
The tax provisions described above applicable to options, futures and forward
contracts may affect the amount, timing and character of a Fund's distributions
to shareholders. Application of certain requirements for qualification as a
regulated investment company and/or these tax rules to certain investment
practices, such as dollar rolls, or certain derivatives such as interest rate
swaps, floors, caps and collars and currency, mortgage or index swaps may be
unclear in some respects, and a Fund may therefore be required to limit its
participation in such transactions. Certain tax elections may be available to a
Fund to mitigate some of the unfavorable consequences described in this
paragraph.
Section 988 of the Code contains special tax rules applicable to certain
foreign currency transactions and instruments that may affect the amount, timing
and character of income, gain or loss recognized by a Fund. Under these rules,
foreign exchange gain or loss realized with respect to foreign currencies and
certain futures and options thereon, foreign currency-denominated debt
instruments, foreign currency forward contracts, and foreign currency-
denominated payables and receivables will generally be treated as ordinary
income or loss, although in some cases elections may be available that would
alter this treatment. If a net foreign exchange loss treated as ordinary loss
under Section 988 of the Code were to exceed a Fund's investment company taxable
income (computed without regard to such loss) for a taxable year, the resulting
loss would not be deductible by the Fund or its shareholders in future years.
Net loss, if any, from certain foregoing currency transactions or instruments
could exceed net investment income otherwise calculated for accounting purposes
with the result being either no dividends being paid or a portion of a Fund's
dividends being treated as a return of capital for tax purposes, nontaxable to
the extent of a shareholder's tax basis in his shares and, once such basis is
exhausted, generally giving rise to capital gains.
A Fund's investment in zero coupon securities, deferred interest securities,
certain structured securities or other securities bearing original issue
discount or, if a Fund elects to include market discount in income currently,
market discount, as well as any "mark to market" gain from certain options,
futures or forward contracts, as described above, will generally cause it to
realize income or gain prior to the receipt of cash payments with respect to
these securities or contracts. In order to obtain cash to enable it to
distribute this income or gain, maintain its qualification as a regulated
investment company and avoid federal income or excise taxes, the Fund may be
required to liquidate portfolio securities that it might otherwise have
continued to hold.
Each Fund (other than CORE Large Cap Value, CORE U.S. Equity, CORE Large Cap
Growth and CORE Small Cap Equity Funds) anticipates that it will be subject to
foreign taxes on its income (possibly including, in some cases, capital gains)
from foreign securities. Tax conventions between certain countries and the U.S.
may reduce or eliminate such taxes in some cases. If, as may occur for CORE
International Equity, International Equity, European Equity, Japanese Equity,
International Small Cap, Emerging Markets Equity and Asia Growth Funds, more
than 50% of a Fund's total assets at the close of any taxable year consists of
stock or securities of foreign corporations, the Fund may file an election with
the Internal Revenue Service pursuant to which shareholders of the Fund would be
required to (i) include in ordinary gross income (in addition to taxable
dividends actually received) their pro rata shares of foreign income taxes paid
by the Fund that are treated as income taxes under U.S. tax regulations (which
excludes, for example, stamp
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taxes, securities transaction taxes, and similar taxes) even though not actually
received by such shareholders, and (ii) treat such respective pro rata portions
as foreign income taxes paid by them.
If the CORE International Equity, International Equity, European Equity,
Japanese Equity, International Small Cap, Emerging Markets Equity and Asia
Growth Funds make this election, its respective shareholders may then deduct
such pro rata portions of qualified foreign taxes in computing their taxable
incomes, or, alternatively, use them as foreign tax credits, subject to
applicable limitations, against their U.S. federal income taxes. Shareholders
who do not itemize deductions for federal income tax purposes will not, however,
be able to deduct their pro rata portion of foreign taxes paid by a Fund,
although such shareholders will be required to include their shares of such
taxes in gross income if the election is made.
If a shareholder chooses to take credit for the foreign taxes deemed paid by
such shareholder as a result of any such election by CORE International Equity,
International Equity, European Equity, Japanese Equity, International Small
Cap, Emerging Markets Equity or Asia Growth Funds, the amount of the credit that
may be claimed in any year may not exceed the same proportion of the U.S. tax
against which such credit is taken which the shareholder's taxable income from
foreign sources (but not in excess of the shareholder's entire taxable income)
bears to his entire taxable income. For this purpose, distributions from long-
term and short-term capital gains or foreign currency gains by a Fund will
generally not be treated as income from foreign sources. This foreign tax
credit limitation may also be applied separately to certain specific categories
of foreign-source income and the related foreign taxes. As a result of these
rules, which have different effects depending upon each shareholder's particular
tax situation, certain shareholders of CORE International Equity, International
Equity, European Equity, Japanese Equity, International Small Cap, Emerging
Markets Equity and Asia Growth Funds may not be able to claim a credit for the
full amount of their proportionate share of the foreign taxes paid by such Fund
even if the election is made by such a Fund.
Shareholders who are not liable for U.S. federal income taxes, including tax-
exempt shareholders, will ordinarily not benefit from this election. Each year,
if any, that the CORE International Equity, International Equity, European
Equity, Japanese Equity, International Small Cap, Emerging Markets Equity or
Asia Growth Funds files the election described above, its shareholders will be
notified of the amount of (i) each shareholder's pro rata share of qualified
foreign taxes paid by a Fund and (ii) the portion of Fund dividends which
represents income from each foreign country. The other Funds will not be
entitled to elect to pass foreign taxes and associated credits or deductions
through to their shareholders because they will not satisfy the 50% requirement
described above. If a Fund cannot or does not make this election, it may deduct
such taxes in computing the amount it is required to distribute.
If a Fund acquires stock (including, under proposed regulations, an option to
acquire stock such as is inherent in a convertible bond) in certain foreign
corporations that receive at least 75% of their annual gross income from passive
sources (such as interest, dividends, rents, royalties or capital gain) or hold
at least 50% of their assets in investments producing such passive income
("passive foreign investment companies"), the Fund could be subject to federal
income tax and additional interest charges on "excess distributions" received
from such companies or gain from the sale of
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stock in such companies, even if all income or gain actually received by the
Fund is timely distributed to its shareholders. The Fund would not be able to
pass through to its shareholders any credit or deduction for such a tax. In some
cases, elections may be available that would ameliorate these adverse tax
consequences, but such elections would require the Fund to include each year
certain amounts as income or gain (subject to the distribution requirements
described above) without a concurrent receipt of cash. Each Fund may limit
and/or manage its holdings in passive foreign investment companies to minimize
its tax liability or maximize its return from these investments.
Investments in lower-rated securities may present special tax issues for a
Fund to the extent actual or anticipated defaults may be more likely with
respect to such securities. Tax rules are not entirely clear about issues such
as when a Fund may cease to accrue interest, original issue discount, or market
discount; when and to what extent deductions may be taken for bad debts or
worthless securities; how payments received on obligations in default should be
allocated between principal and income; and whether exchanges of debt
obligations in a workout context are taxable. These and other issues will be
addressed by a Fund, in the event it invests in such securities, in order to
seek to eliminate or minimize any adverse tax consequences.
TAXABLE U.S. SHAREHOLDERS - DISTRIBUTIONS
- -----------------------------------------
For U.S. federal income tax purposes, distributions by a Fund, whether
reinvested in additional shares or paid in cash, generally will be taxable to
shareholders who are subject to tax. Shareholders receiving a distribution in
the form of newly issued shares will be treated for U.S. federal income tax
purposes as receiving a distribution in an amount equal to the amount of cash
they would have received had they elected to receive cash and will have a cost
basis in each share received equal to such amount divided by the number of
shares received.
Distributions from investment company taxable income for the year will be
taxable as ordinary income. Distributions designated as derived from a Fund's
dividend income, if any, that would be eligible for the dividends received
deduction if such Fund were not a regulated investment company may be eligible,
for the dividends received deduction for corporate shareholders. The dividends-
received deduction, if available, is reduced to the extent the shares with
respect to which the dividends are received are treated as debt-financed under
federal income tax law and is eliminated if the shares are deemed to have been
held for less than a minimum period, generally 46 days. Because eligible
dividends are limited to those a Fund receives from U.S. domestic corporations,
it is unlikely that a substantial portion of the distributions made by CORE
International Equity, International Equity, European Equity, Japanese Equity,
International Small Cap, Asia Growth and Emerging Markets Equity Funds will
qualify for the dividends-received deduction. The entire dividend, including
the deducted amount, is considered in determining the excess, if any, of a
corporate shareholder's adjusted current earnings over its alternative minimum
taxable income, which may increase its liability for the federal alternative
minimum tax, and the dividend may, if it is treated as an "extraordinary
dividend" under the Code, reduce such shareholder's tax basis in its shares of a
Fund. Capital gain dividends (i.e., dividends from net capital gain) if
designated as such in a written notice to shareholders mailed not later than 60
days after a Fund's taxable year closes, will be taxed to shareholders as long-
term capital gain regardless of how long shares have been held by shareholders,
but are not eligible for the dividends received deduction for corporations.
Such
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long-term capital gain will be 20% rate gain, depending upon the Fund's holding
period for the assets the sale of which generated the capital gain.
Distributions, if any, that are in excess of a Fund's current and accumulated
earnings and profits will first reduce a shareholder's tax basis in his shares
and, after such basis is reduced to zero, will generally constitute capital
gains to a shareholder who holds his shares as capital assets.
Different tax treatment, including penalties on certain excess contributions
and deferrals, certain pre-retirement and post-retirement distributions, and
certain prohibited transactions is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
TAXABLE U.S. SHAREHOLDERS - SALE OF SHARES
- ------------------------------------------
When a shareholder's shares are sold, redeemed or otherwise disposed of in a
transaction that is treated as a sale for tax purposes, the shareholder will
generally recognize gain or loss equal to the difference between the
shareholder's adjusted tax basis in the shares and the cash, or fair market
value of any property, received. Assuming the shareholder holds the shares as a
capital asset at the time of such sale, such gain or loss should be capital in
character, and long-term if the shareholder has a tax holding period for the
shares of more than one year, otherwise short-term. In general, the maximum
long-term capital gain rate will be 20% for capital gains on assets held more
than one year. Shareholders should consult their own tax advisers with
reference to their particular circumstances to determine whether a redemption
(including an exchange) or other disposition of Fund shares is properly treated
as a sale for tax purposes, as is assumed in this discussion. If a shareholder
receives a capital gain dividend with respect to shares and such shares have a
tax holding period of six months or less at the time of a sale or redemption of
such shares, then any loss the shareholder realizes on the sale or redemption
will be treated as a long-term capital loss to the extent of such capital gain
dividend. All or a portion of any sales load paid upon the purchase of shares
of a Fund will not be taken into account in determining gain or loss on the
redemption or exchange of such shares within 90 days after their purchase to the
extent the redemption proceeds are reinvested, or the exchange is effected,
without payment of an additional sales load pursuant to the reinvestment or
exchange privilege. The load not taken into account will be added to the tax
basis of the newly-acquired shares. Additionally, any loss realized on a sale
or redemption of shares of a Fund may be disallowed under "wash sale" rules to
the extent the shares disposed of are replaced with other shares of the same
Fund within a period of 61 days beginning 30 days before and ending 30 days
after the shares are disposed of, such as pursuant to a dividend reinvestment in
shares of such Fund. If disallowed, the loss will be reflected in an adjustment
to the basis of the shares acquired.
Each Fund may be required to withhold, as "backup withholding," federal income
tax at a rate of 31% from dividends (including capital gain dividends) and share
redemption and exchange proceeds to individuals and other non-exempt
shareholders who fail to furnish such Fund with a correct taxpayer
identification number ("TIN") certified under penalties of perjury, or if the
Internal Revenue Service or a broker notifies the Fund that the payee is subject
to backup withholding as a result of failing to properly report interest or
dividend income to the Internal Revenue Service or that the TIN furnished by the
payee to the Fund is incorrect, or if (when required to do so) the payee
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fails to certify under penalties of perjury that it is not subject to backup
withholding. A Fund may refuse to accept an application that does not contain
any required TIN or certification that the TIN provided is correct. If the
backup withholding provisions are applicable, any such dividends and proceeds,
whether paid in cash or reinvested in additional shares, will be reduced by the
amounts required to be withheld. Any amounts withheld may be credited against a
shareholder's U.S. federal income tax liability.
NON-U.S. SHAREHOLDERS
- ---------------------
The discussion above relates solely to U.S. federal income tax law as it
applies to "U.S. persons" subject to tax under such law. Shareholders who, as to
the United States, are not "U.S. persons," (i.e., are nonresident aliens,
foreign corporations, fiduciaries of foreign trusts or estates, foreign
partnerships or other non-U.S. investors) generally will be subject to U.S.
federal withholding tax at the rate of 30% on distributions treated as ordinary
income unless the tax is reduced or eliminated pursuant to a tax treaty or the
dividends are effectively connected with a U.S. trade or business of the
shareholder. In the latter case the dividends will be subject to tax on a net
income basis at the graduated rates applicable to U.S. individuals or domestic
corporations. Distributions of net capital gain, including amounts retained by
a Fund which are designated as undistributed capital gains, to a non-U.S.
shareholder will not be subject to U.S. federal income or withholding tax unless
the distributions are effectively connected with the shareholder's trade or
business in the United States or, in the case of a shareholder who is a
nonresident alien individual, the shareholder is present in the United States
for 183 days or more during the taxable year and certain other conditions are
met. Non-U.S. shareholders may also be subject to U.S. federal withholding tax
on deemed income resulting from any election by CORE International Equity,
International Equity, European Equity, Japanese Equity, International Small Cap,
Emerging Markets Equity or Asia Growth Funds to treat qualified foreign taxes it
pays as passed through to shareholders (as described above), but they may not be
able to claim a U.S. tax credit or deduction with respect to such taxes.
Any capital gain realized by a non-U.S. shareholder upon a sale or redemption
of shares of a Fund will not be subject to U.S. federal income or withholding
tax unless the gain is effectively connected with the shareholder's trade or
business in the U.S., or in the case of a shareholder who is a nonresident alien
individual, the shareholder is present in the U.S. for 183 days or more during
the taxable year and certain other conditions are met.
Non-U.S. persons who fail to furnish a Fund with an IRS Form W-8 or an
acceptable substitute may be subject to backup withholding at the rate of 31% on
capital gain dividends and the proceeds of redemptions and exchanges. Each
shareholder who is not a U.S. person should consult his or her tax adviser
regarding the U.S. and non-U.S. tax consequences of ownership of shares of and
receipt of distributions from the Funds.
STATE AND LOCAL
- ---------------
Each Fund may be subject to state or local taxes in jurisdictions in which
such Fund may be deemed to be doing business. In addition, in those states or
localities which have income tax laws,
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the treatment of such Fund and its shareholders under such laws may differ from
their treatment under federal income tax laws, and investment in such Fund may
have tax consequences for shareholders different from those of a direct
investment in such Fund's portfolio securities. Shareholders should consult
their own tax advisers concerning these matters.
FINANCIAL STATEMENTS
The audited financial statements and related Reports of Independent Public
Accountants, contained in the 1998 Annual Report of each of the Funds (except
Core Larg Cap Value, Real Estate Securities, European Equity, Japanese Equity
and International Small Cap Funds), are incorporated herein by reference into
this Additional Statement and attached hereto. In addition, the unaudited
financial statements contained in the Semi-Annual Report for the period ended
July 31, 1998 of each of the Funds (except CORE Large Cap Value, Real Estate
Securities and European Equity Funds) are incorporated by reference into this
Additional Statement. No other part of the Annual or any Semi-Annual Report is
incorporated by reference herein.
OTHER INFORMATION
Each Fund will redeem shares solely in cash up to the lesser of $250,000 or 1%
of the net asset value of the Fund during any 90-day period for any one
shareholder. Each Fund, however, reserves the right to pay redemptions
exceeding $250,000 or 1% of the net asset value of the Fund at the time of
redemption by a distribution in kind of securities (instead of cash) from such
Fund. The securities distributed in kind would be readily marketable and would
be valued for this purpose using the same method employed in calculating the
Fund's net asset value per share. See "Net Asset Value." If a shareholder
receives redemption proceeds in kind, the shareholder should expect to incur
transaction costs upon the disposition of the securities received in the
redemption.
The right of a shareholder to redeem shares and the date of payment by each
Fund may be suspended for more than seven days for any period during which the
New York Stock Exchange is closed, other than the customary weekends or
holidays, or when trading on such Exchange is restricted as determined by the
SEC; or during any emergency, as determined by the SEC, as a result of which it
is not reasonably practicable for such Fund to dispose of securities owned by it
or fairly to determine the value of its net assets; or for such other period as
the SEC may by order permit for the protection of shareholders of such Fund.
As stated in the Prospectuses, the Trust may authorize Service Organizations
and other institutions that provide recordkeeping, reporting and processing
services to their customers to accept on the Trust's behalf purchase, redemption
and exchange orders placed by or on behalf of their customers and, if approved
by the Trust, to designate other intermediaries to accept such orders. These
institutions may receive payments from the Trust or Goldman Sachs for their
services. In some, but not all, cases these payments will be pursuant to a
Distribution or Service Plan described in the Prospectuses and this Additional
Statement. Certain Service Organizations or institutions may enter into sub-
transfer agency agreements with the Trust or Goldman Sachs with respect to their
services.
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The Adviser, Distributor and/or their affiliates may pay, out of their own
assets, compensation to Authorized Dealers for the sale and distribution of
Shares of the Funds and/or for the servicing of those Shares. These payments
("Additional Payments") would be in addition to the payments by the Funds
described in the Funds' Prospectus and this Additional Statement for
distribution and shareholder servicing and processing, and would also be in
addition to the sales commissions payable to dealers as set forth in the
Prospectus. These Additional Payments may take the form of "due diligence"
payments for an Authorized Dealer's examination of the Funds and payments for
providing extra employee training and information relating to the Funds;
"listing" fees for the placement of the Funds on a dealer's list of mutual funds
available for purchase by its customers; "finders" or "referral" fees for
directing investors to the Funds; "marketing support" fees for providing
assistance in promoting the sale of the Funds' Shares; and payments for the sale
of Shares and/or the maintenance of Share balances. In addition, the Adviser,
Distributor and/or their affiliates may make Additional Payments for
subaccounting, administrative and/or shareholder processing services that are in
addition to the shareholder servicing and processing fees paid by the Funds.
The Additional Payments made by the Adviser, Distributor and their affiliates
may be a fixed dollar amount, may be based on the number of customer accounts
maintained by an Authorized Dealer, or may be based on a percentage of the value
of Shares sold to, or held by, customers of the Authorized Dealers involved, and
may be different for different Authorized Dealers. Furthermore, the Adviser,
Distributor and/or their affiliates may contribute to various non-cash and cash
incentive arrangements to promote the sale of shares, as well as sponsor various
educational programs, sales contests and/or promotions in which participants may
receive prizes such as travel awards, merchandise and cash and/or investment
research pertaining to particular securities and other financial instruments or
to the securities and financial markets generally, educational information and
related support materials and software. The Adviser, Distributor and their
affiliates may also pay for the travel expenses, meals, lodging and
entertainment of Authorized Dealers and their salespersons and guests in
connection with educational, sales and promotional programs subject to
applicable NASD regulations.
The Prospectuses and this Additional Statement do not contain all the
information included in the Registration Statement filed with the SEC under the
1933 Act with respect to the securities offered by the Prospectuses. Certain
portions of the Registration Statement have been omitted from the Prospectuses
and this Additional Statement pursuant to the rules and regulations of the SEC.
The Registration Statement including the exhibits filed therewith may be
examined at the office of the SEC in Washington, D.C.
Statements contained in the Prospectuses or in this Additional Statement as to
the contents of any contract or other document referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement of which the
Prospectuses and this Additional Statement form a part, each such statement
being qualified in all respects by such reference.
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DISTRIBUTION AND SERVICE PLANS
(CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES ONLY)
DISTRIBUTION AND SERVICE PLANS. As described in the Prospectus, the Trust has
adopted, on behalf of Class A, Class B and Class C Shares of each Fund,
distribution and service plans (each a "Plan") pursuant to Rule 12b-1 under the
Act. See "Distribution and Service Plans" in the Prospectus.
The Plans for each Fund were most recently approved on July 22, 1998 by a
majority vote of the Trustees of the Trust, including a majority of the non-
interested Trustees of the Trust who have no direct or indirect financial
interest in the Plans, cast in person at a meeting called for the purpose of
approving the Plans.
The compensation for distribution services payable under a Plan may not exceed
0.25%, 0.75% and 0.75%, per annum of a Fund's average daily net assets
attributable to Class A, Class B and Class C Shares respectively, of such Fund.
Under the Plans for Class A (CORE International Equity, International Equity,
European Equity, Japanese Equity, International Small Cap, Emerging Markets
Equity, Asia Growth and Real Estate Securities Funds only), Class B and Class C
Shares, Goldman Sachs is also entitled to received a separate fee for personal
and account maintenance services equal to an annual basis of 0.25% of each
Fund's average daily net assets attributable to Class A, Class B or Class C
Shares. With respect to Class A Shares, the Distributor at its discretion may
use compensation for distribution services paid under the Plan for personal and
account maintenance services and expenses so long as such total compensation
under the Plan does not exceed the maximum cap on "service fees" imposed by the
NASD.
Each Plan is a compensation plan which provides for the payment of a specified
fee without regard to the expenses actually incurred by Goldman Sachs. If such
fee exceeds Goldman Sachs' expenses, Goldman Sachs may realize a profit from
these arrangements. The distribution fees received by Goldman Sachs under the
Plans and contingent deferred sales charge on Class B and Class C Shares may be
sold by Goldman Sachs as distributor to entities which provide financing for
payments to Authorized Dealers in respect of sales of Class A, Class B and Class
C Shares. To the extent such fees are not paid to such dealers, Goldman Sachs
may retain such fee as compensation for its services and expenses of
distributing the Funds' Class A, Class B and Class C Shares.
Under each Plan, Goldman Sachs, as distributor of each Fund's Class A, Class B
and Class C Shares, will provide to the Trustees of the Trust for their review,
and the Trustees of the Trust will review at least quarterly, a written report
of the services provided and amounts expended by Goldman Sachs under the Plans
and the purposes for which such services were performed and expenditures were
made.
The Plans will remain in effect until May 1, 1999 and from year to year
thereafter, provided that such continuance is approved annually by a majority
vote of the Trustees of the Trust, including a majority of the non-interested
Trustees of the Trust who have no direct or indirect financial interest in the
Plans. The Plans may not be amended to increase materially the amount of
distribution compensation without approval of a majority of the outstanding
Class A, Class B or Class C Shares
B-98
<PAGE>
of the affected Fund and share class. All material amendments of a Plan must
also be approved by the Trustees of the Trust in the manner described above. A
Plan may be terminated at any time as to any Fund without payment of any penalty
by a vote of a majority of the non-interested Trustees of the Trust or by vote
of a majority of the Class A, Class B or Class C Shares, respectively, of the
applicable Fund and share class. If a Plan was terminated by the Trustees of the
Trust and no successor plan was adopted, the Fund would cease to make payments
to Goldman Sachs under the Plan and Goldman Sachs would be unable to recover the
amount of any of its unreimbursed expenditures. So long as a Plan is in effect,
the selection and nomination of non-interested Trustees of the Trust will be
committed to the discretion of the non-interested Trustees of the Trust. The
Trustees of the Trust have determined that in their judgment there is a
reasonable likelihood that the Plans will benefit the Funds and their Class A,
Class B and Class C Shareholders.
For the fiscal years ended January 31, 1998, January 31, 1997 and January 31,
1996 the distribution fees paid to Goldman Sachs pursuant to its Class A Plan by
each Fund then in existence were as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---------- -------- --------
<S> <C> <C> <C>
Balanced Fund $ 0 $ 0 $ 10,103
Growth and Income Fund 723,634 139,025 191,414
CORE Large Cap Value Fund/2/ N/A N/A N/A
CORE U.S. Equity Fund 720,025 363,264 264,159
CORE Large Cap Growth Fund/1/ 0 N/A N/A
CORE Small Cap Equity Fund/1/ 1,380 N/A N/A
CORE International Equity Fund/1/ 2,751 N/A N/A
Capital Growth Fund 0 0 770,488
Mid Cap Equity Fund/1/ 67,478 N/A N/A
International Equity Fund 1,416,253 900,274 231,028
Small Cap Value Fund 0 0 272,353
European Equity Fund/2/ N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A
International Small Cap Fund/2/ N/A N/A N/A
Emerging Markets Equity Fund/1/ 3,381 N/A N/A
Asia Growth Fund 431,390 526,448 114,156
Real Estate Securities Fund/2/ N/A N/A N/A
</TABLE>
- -----------
1 The Class A Share class of the Mid Cap Equity, CORE Large Cap Growth, CORE
Small Cap Equity, CORE International Equity and Emerging Markets Equity
Funds commenced operations on August 15, 1997, May 1, 1997, August 15,
1997, August 15, 1997 and December 15, 1997, respectively.
2 Not Operational.
B-99
<PAGE>
Without the voluntary limitations then in effect, the Funds would have
paid Goldman Sachs the following distribution fees during the fiscal years ended
January 31, 1998, January 31, 1997 and January 31, 1996 pursuant to their
respective Class A Plans:
<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Balanced Fund $ 301,397 $ 153,392 $ 84,350
Growth and Income Fund 2,324,970 1,252,257 986,255
CORE Large Cap Value Fund/2/ N/A N/A N/A
CORE U.S. Equity Fund 771,451 432,457 389,883
CORE Large Cap Growth Fund/1/ 61,924 N/A N/A
CORE Small Cap Equity Fund/1/ 6,898 N/A N/A
CORE International Equity Fund/1/ 2,751 N/A N/A
Capital Growth Fund 2,678,370 2,171,462 3,104,424
Mid Cap Equity Fund1/1/ 67,478 N/A N/A
International Equity Fund 1,632,745 1,071,755 929,746
Small Cap Value Fund 727,298 529,684 999,563
European Equity Fund/2/ N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A
International Small Cap Fund/2/ N/A N/A N/A
Emerging Markets Equity Fund/1/ 3,381 N/A N/A
Asia Growth Fund 513,560 626,724 505,066
Real Estate Securities Fund/2/ N/A N/A N/A
</TABLE>
- --------------------
1. The Class A Share class of the Mid Cap Equity, CORE Large Cap Growth, CORE
Small Cap Equity, CORE International Equity and Emerging Markets Equity
Funds commenced operations on August 15, 1997, May 1, 1997, August 15, 1997,
August 15, 1997 and December 15, 1997, respectively.
2. Not Operational.
B-100
<PAGE>
During the fiscal years ended January 31, 1998, January 31, 1997 and
January 31, 1996 Goldman Sachs was paid the following distribution fees under
the Class B Plan of each applicable Fund with Class B shares then in existence:
<TABLE>
<CAPTION>
1998 1997 1996
---------- ------- ----
<S> <C> <C> <C>
Balanced Fund $ 74,569 $ 3,861 N/A
Growth and Income Fund 1,117,813 28,075 N/A
CORE Large Cap Value Fund/2/ N/A N/A N/A
CORE U.S. Equity Fund 265,025 36,508 N/A
CORE Large Cap Growth Fund/1/ 34,332 N/A N/A
CORE Small Cap Equity Fund/1/ 20,064 N/A N/A
CORE International Equity Fund/1/ 5,700 N/A N/A
Capital Growth Fund 127,395 7,632 N/A
Mid Cap Equity Fund/1/ 47,585 N/A N/A
International Equity Fund 314,578 44,148 N/A
Small Cap Value Fund 160,608 8,973 N/A
European Equity Fund/2/ N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A
International Small Cap Fund/2/ N/A N/A N/A
Emerging Markets Equity Fund/1/ 38 N/A N/A
Asia Growth Fund 28,550 10,229 N/A
Real Estate Securities Fund/2/ N/A N/A N/A
</TABLE>
- --------------
1 Class B Shares of the Mid Cap Equity, CORE Large Cap Growth, CORE Small Cap
Equity, CORE International Equity and Emerging Markets Equity Funds
commenced operations on August 15, 1997, May 1, 1997, August 15, 1997,
August 15, 1997 and December 15, 1997, respectively.
2 Not Operational.
B-101
<PAGE>
During the fiscal year ended January 31, 1998, Goldman Sachs was paid
the following distribution fees under the Class C Plan of each applicable Fund
with Class C shares then in existence:
<TABLE>
<CAPTION>
1998
-------
<S> <C>
Balanced $13,290
Growth and Income 57,542
CORE Large Cap Value Fund/1/ N/A
CORE U.S. Equity Fund 14,614
CORE Large Cap Growth Fund 6,880
CORE Small Cap Equity Fund 4,038
CORE International Equity Fund 3,118
Capital Growth Fund 9,607
Mid Cap Equity Fund 10,495
International Equity Fund 7,485
Small Cap Value Fund 12,158
European Equity Fund/1/ N/A
Japanese Equity Fund/1/ N/A
International Small Cap Fund/1/ N/A
Emerging Markets Fund 28
Asia Growth Fund 2,854
Real Estate Securities Fund/1/ N/A
</TABLE>
- ------------
1. Not Operational
No distribution fees were paid to Goldman Sachs under the Class C Plans during
the fiscal year ended January 31, 1997.
B-102
<PAGE>
During the fiscal year ended January 31, 1998, Goldman Sachs incurred
the following expenses in connection with distribution under the Class A Plan of
each applicable Fund with Class A Shares then in existence:
<TABLE>
<CAPTION>
Compensation Printing and Preparation
and Expenses Allocable Mailing of and
of the Overhead, Prospectuses Distribution
Distributor Telephone to Other of Sales
Compensation & Its Sales and Travel Than Current Literature and
to Dealers Personnel Expenses Shareholders Advertising
------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Fiscal Year Ended January 31, 1998:
Balanced Fund/1/ $ N/A $ N/A $ N/A $ N/A $ N/A
Growth and Income Fund 80,177 2,763,000 1,137,000 164,000 235,000
CORE Large Cap Value Fund/2/ N/A N/A N/A N/A N/A
CORE U.S. Equity Fund 41,621 546,000 260,000 29,000 69,000
CORE Large Cap Growth Fund N/A N/A N/A N/A N/A
CORE Small Cap Equity Fund 534 338,000 138,000 19,000 33,000
CORE International Equity Fund 0 294,000 126,000 16,000 22,000
Capital Growth Fund/1/ N/A N/A N/A N/A N/A
Mid Cap Equity 10,090 539,000 154,000 32,000 44,000
International Equity Fund/1/ 240,271 537,000 236,000 32,000 50,000
European Equity Fund/2/ N/A N/A N/A N/A N/A
Japanese Equity Fund/2/ N/A N/A N/A N/A N/A
International Small Cap/2/ N/A N/A N/A N/A N/A
Small Cap Value Fund/1/ N/A N/A N/A N/A N/A
Asia Growth Fund 112,925 281,000 114,000 17,000 31,000
Emerging Market Equity Fund N/A N/A N/A N/A N/A
Real Estate Securities Fund/2/ N/A N/A N/A N/A N/A
</TABLE>
The table above reflects amounts expended by Goldman Sachs, which amounts are in
excess of the compensation received by Goldman Sachs under the Class A Plans.
The payments under the Class A Plan were used by Goldman Sachs to compensate it
for the expenses shown above on a pro-rata basis.
_______________
1 For the period presented, Goldman Sachs did not impose the 0.25% 12b-1 fee for
these Funds. As no distribution expenses were incurred during this period for
these Funds, no expenses are reflected above.
2 Not Operational.
B-103
<PAGE>
For the fiscal years and periods indicated below, Goldman Sachs
received service fees from the Fund pursuant to the service Plans then in
existence at the rate of 0.25% of each Fund's average daily net assets
attributable to Class A, Class B, or Class C Shares, which totalled:
<TABLE>
<CAPTION>
Class A Class B Class C
---------------------------------- ------------------ -------
1998 1997 1996/1/ 1998 1997/2/ 1998
---------- ---------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Balanced Fund $ 301,397 $ 153,392 $ 64,145 $ 24,856 $ 1,294 $ 4,430
Growth and Income Fund 2,324,970 1,252,257 603,426 372,604 9,358 19,181
CORE Large Cap Value Fund/4/ N/A N/A N/A N/A N/A N/A
CORE U.S. Equity Fund 771,451 432,457 182,881 88,342 12,169 4,871
CORE Large Cap Growth Fund/3/ 61,924 N/A N/A 11,444 N/A 2,293
CORE Small Cap Equity Fund/3/ 6,898 N/A N/A 6,688 N/A 1,346
CORE International Equity Fund/3/ 2,748 N/A N/A 1,900 N/A 1,040
Capital Growth Fund 2,678,370 2,171,462 1,563,448 42,465 2,854 3,202
Mid Cap Equity Fund 67,485 N/A N/A 15,862 N/A 3,499
International Equity Fund 1,632,745 1,071,755 470,027 104,859 14,733 2,496
Small Cap Value Fund 727,298 569,684 458,857 53,536 2,992 4,052
European Equity Fund/4/ N/A N/A N/A N/A N/A N/A
Japanese Equity Fund/4/ N/A N/A N/A N/A N/A N/A
International Small Cap Fund/4/ N/A N/A N/A N/A N/A N/A
Emerging Market Equity Fund/3/ 3,424 N/A N/A 13 N/A 10
Asia Growth Fund 513,560 626,724 276,754 9,517 3,410 951
Real Estate Securities Fund/4/ N/A N/A N/A N/A N/A N/A
</TABLE>
- --------------------
1 For the period commencing June 1, 1995.
2 For the period commencing May 1, 1996.
3 The CORE Large Cap Growth, CORE Small Equity, CORE International Equity and
Emerging Markets Equity Funds commenced operations on May 1, 1997, August 15,
1997, August 15, 1997 and December 15, 1997, respectively.
4 Not Operational
B-104
<PAGE>
OTHER INFORMATION REGARDING MAXIMUM SALES CHARGE, PURCHASES, REDEMPTIONS,
EXCHANGES AND DIVIDENDS
(CLASS A SHARES, CLASS B SHARES AND CLASS C SHARES ONLY)
MAXIMUM SALES CHARGES
- ---------------------
Class A Shares of each Fund are sold at a maximum sales charge of
5.5%. Using the initial offering price per share, as of January 31, 1998 and
$10.00 for the CORE Large Cap Value, Real Estate Securities, European Equity,
Japanese Equity and International Small Cap Funds, the maximum offering price of
each Fund's Class A shares would be as follows:
<TABLE>
<CAPTION>
Maximum Offering
Net Asset Sales Price to
Value Charge Public
----------- ------- --------
<S> <C> <C> <C>
Balanced Fund $20.29 5.5% $21.47
Growth and Income Fund 25.93 5.5% 27.44
CORE U.S. Equity Fund 26.59 5.5% 28.14
CORE Large Cap Value Fund 10.00 5.5% 10.55
CORE Large Cap Growth Fund 11.97 5.5% 12.67
CORE Small Cap Equity Fund 10.59 5.5% 11.21
CORE International Equity Fund 9.22 5.5% 9.76
Capital Growth Fund 18.48 5.5% 19.56
Mid Cap Equity Fund 21.61 5.5% 22.87
International Equity Fund 19.85 5.5% 21.01
Small Cap Value Fund 24.05 5.5% 25.45
European Equity Fund 10.00 5.5% 10.55
Japanese Equity Fund 10.00 5.5% 10.55
International Small Cap Fund 10.00 5.5% 10.55
Emerging Market Equity Fund 9.69 5.5% 10.25
Asia Growth Fund 8.38 5.5% 8.87
Real Estate Securities Fund 10.00 5.5% 10.55
</TABLE>
The following information supplements the information in the Prospectus under
the captions "How to Invest," "How to Sell Shares of the Funds" and "Dividends."
Please see the Prospectus for more complete information.
OTHER PURCHASE INFORMATION
- --------------------------
If shares of a Fund are held in a "street name" account with an Authorized
Dealer, all recordkeeping, transaction processing and payments of distributions
relating to the beneficial owner's account will be performed by the Authorized
Dealer, and not by the Fund and its Transfer Agent. Since the Funds will have
no record of the beneficial owner's transactions, a beneficial owner should
contact the Authorized Dealer to purchase, redeem or exchange shares,
B-105
<PAGE>
to make changes in or give instructions concerning the account or to obtain
information about the account. The transfer of shares in a "street name" account
to an account with another dealer or to an account directly with the Fund
involves special procedures and will require the beneficial owner to obtain
historical purchase information about the shares in the account from the
Authorized Dealer.
RIGHT OF ACCUMULATION (CLASS A)
- -------------------------------
A Class A shareholder qualifies for cumulative quantity discounts if the current
purchase price of the new investment plus the shareholder's current holdings of
existing Class A Shares (acquired by purchase or exchange) of the Funds and
Class A Shares of any other Goldman Sachs Fund (as defined in the Prospectus)
total the requisite amount for receiving a discount. For example, if a
shareholder owns shares with a current market value of $35,000 and purchases
additional Class A Shares of any Fund with a purchase price of $25,000, the
sales charge for the $25,000 purchase would be 4.75% (the rate applicable to a
single purchase of more than $50,000). Class A Shares purchased without the
imposition of a sales charge may not be aggregated with Class A Shares purchased
subject to a sales charge. Class A Shares of the Funds and any other Goldman
Sachs Fund purchased (i) by an individual, his spouse and his children, and (ii)
by a trustee, guardian or other fiduciary of a single trust estate or a single
fiduciary account, will be combined for the purpose of determining whether a
purchase will qualify for such right of accumulation and, if qualifying, the
applicable sales charge level. For purposes of applying the right of
accumulation, shares of the Funds and any other Goldman Sachs Fund purchased by
an existing client of the Private Client Services Division of Goldman Sachs will
be combined with Class A Shares held by any other Private Client Services
account. In addition, Class A Shares of the Funds and Class A Shares of any
other Goldman Sachs Fund purchased by partners, directors, officers or employees
of the same business organization, groups of individuals represented by and
investing on the recommendation of the same accounting firm, certain affinity
groups or other similar organizations (collectively, "eligible persons") may be
combined for the purpose of determining whether a purchase will qualify for the
right of accumulation and, if qualifying, the applicable sales charge level.
This right of accumulation is subject to the following conditions: (i) the
business organization's, group's or firm's agreement to cooperate in the
offering of the Funds' shares to eligible persons; and (ii) notification to the
Funds at the time of purchase that the investor is eligible for this right of
accumulation. In addition, in connection with SIMPLE IRA accounts, cumulative
quantity discounts are available on a per plan basis if (1) your employee has
been assigned a cumulative discount number by Goldman Sachs, and (2) your
account, alone or in combination with the accounts of other plan participants
also invested in Class A Shares of the Goldman Sachs Funds, totals the requisite
aggregate amount as described in the Prospectus.
B-106
<PAGE>
STATEMENT OF INTENTION (CLASS A)
- --------------------------------
If a shareholder anticipates purchasing at least $50,000 of Class A Shares of a
Fund alone or in combination with Class A shares of any other Goldman Sachs Fund
within a 13-month period, the shareholder may purchase shares of the Fund at a
reduced sales charge by submitting a Statement of Intention (the "Statement").
Shares purchased pursuant to a Statement will be eligible for the same sales
charge discount that would have been available if all of the purchases had been
made at the same time. The shareholder or his Authorized Dealer must inform
Goldman Sachs that the Statement is in effect each time shares are purchased.
There is no obligation to purchase the full amount of shares indicated in the
Statement. A shareholder may include the value of all Class A Shares on which a
sales charge has previously been paid as an "accumulation credit" toward the
completion of the Statement, but a price readjustment will be made only on Class
A Shares purchased within ninety (90) days before submitting the Statement. The
Statement authorizes the Transfer Agent to hold in escrow a sufficient number of
shares which can be redeemed to make up any difference in the sales charge on
the amount actually invested. For purposes of satisfying the amount specified
on the Statement, the gross amount of each investment, exclusive of any
appreciation on shares previously purchased, will be taken into account.
CROSS-REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
- -------------------------------------------------
A Fund shareholder should obtain and read the prospectus relating to any other
Fund, Goldman Sachs Fund or ILA Portfolio (as defined in the Prospectus) and its
shares or units and consider its investment objective, policies and applicable
fees before electing cross-reinvestment into that Fund or Portfolio. The
election to cross-reinvest dividends and capital gain distributions will not
affect the tax treatment of such dividends and distributions, which will be
treated as received by the shareholder and then used to purchase shares of the
acquired fund. Such reinvestment of dividends and distributions in shares of
other Goldman Sachs Funds or in units of ILA Portfolios is available only in
states where such reinvestment may legally be made.
AUTOMATIC EXCHANGE PROGRAM
- --------------------------
A Fund shareholder may elect to exchange automatically a specified dollar amount
of shares of a Fund into an identical account of another Fund or an account
registered in a different name or with a different address, social security or
other taxpayer identification number, provided that the account in the acquired
fund has been established, appropriate signatures have been obtained and the
minimum initial investment requirement has been satisfied. A Fund shareholder
should obtain and read the prospectus relating to any other Goldman Sachs Fund
and its shares and consider its investment objective, policies and applicable
fees and expenses before electing an automatic exchange into that Goldman Sachs
Fund.
B-107
<PAGE>
SYSTEMATIC WITHDRAWAL PLAN
- --------------------------
A systematic withdrawal plan (the "Systematic Withdrawal Plan") is available to
shareholders of a Fund whose shares are worth at least $5,000. The Systematic
Withdrawal Plan provides for monthly payments to the participating shareholder
of any amount not less than $50.
Dividends and capital gain distributions on shares held under the Systematic
Withdrawal Plan are reinvested in additional full and fractional shares of the
applicable Fund at net asset value. The Transfer Agent acts as agent for the
shareholder in redeeming sufficient full and fractional shares to provide the
amount of the systematic withdrawal payment. The Systematic Withdrawal Plan may
be terminated at any time. Goldman Sachs reserves the right to initiate a fee
of up to $5 per withdrawal, upon thirty (30) days written notice to the
shareholder. Withdrawal payments should not be considered to be dividends,
yield or income. If periodic withdrawals continuously exceed new purchases and
reinvested dividends and capital gains distributions, the shareholder's original
investment will be correspondingly reduced and ultimately exhausted. The
maintenance of a withdrawal plan concurrently with purchases of additional Class
A, Class B or Class C Shares would be disadvantageous because of the sales
charge imposed on purchases of Class A Shares or the imposition of a CDSC on
redemptions of Class A, Class B or Class C Shares. The CDSC applicable to Class
A, Class B or Class C Shares redeemed under a systematic withdrawal plan may be
waived. See "How to Invest -- Waiver or Reduction of Continent Deferred Sales
Charge" in the Prospectus. In addition, each withdrawal constitutes a
redemption of shares, and any gain or loss realized must be reported for federal
and state income tax purposes. A shareholder should consult his or her own tax
adviser with regard to the tax consequences of participating in the Systematic
Withdrawal Plan. For further information or to request a Systematic Withdrawal
Plan, please write or call the Transfer Agent.
B-108
<PAGE>
SERVICE PLAN
(SERVICE SHARES ONLY)
The Funds have adopted a service plan (the "Plan") with respect to its Service
Shares which authorizes it to compensate Service Organizations for providing
certain administration services and personal and account maintenance services to
their customers who are or may become beneficial owners of such Shares.
Pursuant to the Plan, each Fund enters into agreements with Service
Organizations which purchase Service Shares of the Fund on behalf of their
customers ("Service Agreements"). Under such Service Agreements the Service
Organizations may perform some or all of the following services: (a) act,
directly or through an agent, as the sole shareholder of record and nominee for
all customers, (b) maintain account records for each customer who beneficially
owns Service Shares of a Fund, (c) answer questions and handle correspondence
from customers regarding their accounts, (d) process customer orders to
purchase, redeem and exchange Service Shares of a Fund, and handle the
transmission of funds representing the customers' purchase price or redemption
proceeds, (e) issue confirmations for transactions in shares by customers, (f)
provide facilities to answer questions from prospective and existing investors
about Service Shares of a Fund, (g) receive and answer investor correspondence,
including requests for prospectuses and statements of additional information,
(h) display and make prospectuses available on the Service Organization's
premises, (i) assist customers in completing application forms, selecting
dividend and other account options and opening custody accounts with the Service
Organization and (j) act as liaison between customers and a Fund, including
obtaining information from the Fund, working with the Fund to correct errors and
resolve problems and providing statistical and other information to a Fund. As
compensation for such services, each Fund will pay each Service Organization a
service fee in an amount up to 0.50% (on an annualized basis) of the average
daily net assets of the Service Shares of such Fund attributable to or held in
the name of such Service Organization.
The Funds have adopted the Plan pursuant to Rule 12b-1 under the Act in order to
avoid any possibility that payments to the Service Organizations pursuant to the
Service Agreements might violate the Act. Rule 12b-1, which was adopted by the
SEC under the Act, regulates the circumstances under which an investment company
or series thereof may bear expenses associated with the distribution of its
shares. In particular, such an investment company or series thereof cannot
engage directly or indirectly in financing any activity which is primarily
intended to result in the sale of shares issued by the company unless it has
adopted a plan pursuant to, and complies with the other requirements of, such
Rule. The Trust believes that fees paid for the services provided in the Plan
and described above are not expenses incurred primarily for effecting the
distribution of Service Shares. However, should such payments be deemed by a
court or the SEC to be distribution expenses, such payments would be duly
authorized by the Plan.
The Glass-Steagall Act prohibits all entities which receive deposits from
engaging to any extent in the business of issuing, underwriting, selling or
distributing securities, although institutions such as national banks are
permitted to purchase and sell securities upon the order and for the account of
their customers. In addition, under some state securities laws, banks and other
B-109
<PAGE>
financial institutions purchasing Service Shares on behalf of their customers
may be required to register as dealers. Should future legislative or
administrative action or judicial or administrative decisions or interpretations
prohibit or restrict the activities of one or more of the Service Organizations
in connection with a Fund, such Service Organizations might be required to alter
materially or discontinue the services performed under their Service Agreements.
If one or more of the Service Organizations were restricted from effecting
purchases or sales of Service Shares automatically pursuant to pre-authorized
instructions, for example, effecting such transactions on a manual basis might
affect the size and/or growth of a Fund. Any such alteration or discontinuance
of services could require the Board of Trustees to consider changing a Fund's
method of operations or providing alternative means of offering Service Shares
of the Fund to customers of such Service Organizations, in which case the
operation of such Fund, its size and/or its growth might be significantly
altered. It is not anticipated, however, that any alteration of a Fund's
operations would have any effect on the net asset value per share or result in
financial losses to any shareholder.
Conflict of interest restrictions (including the Employee Retirement Income
Security Act of 1974) may apply to a Service Organization's receipt of
compensation paid by a Fund in connection with the investment of fiduciary
assets in Service Shares of a Fund. Service Organizations, including banks
regulated by the Comptroller of the Currency, the Federal Reserve Board or the
Federal Deposit Insurance Corporation, and investment advisers and other money
managers subject to the jurisdiction of the SEC, the Department of Labor or
state securities commissions, are urged to consult legal advisers before
investing fiduciary assets in Service Shares of a Fund. In addition, under
some state securities laws, banks and other financial institutions purchasing
Service Shares on behalf of their customers may be required to register as
dealers.
The Trustees, including a majority of the Trustees who are not interested
persons of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or the related Service Agreements, most recently voted
to approve the Plan and related Service Agreements at a meeting called for the
purpose of voting on such Plan and Service Agreements on April 22, 1998. The
Plan and related Service Agreements will remain in effect until May 1, 1999 and
will continue in effect thereafter only if such continuance is specifically
approved annually by a vote of the Trustees in the manner described above. The
Plan may not be amended to increase materially the amount to be spent for the
services described therein without approval of the Service Shareholders of the
affected Fund and all material amendments of the Plan must also be approved by
the Trustees in the manner described above. The Plan may be terminated at any
time by a majority of the Trustees as described above or by a vote of a majority
of the outstanding Service Shares of the affected Fund. The Service Agreements
may be terminated at any time, without payment of any penalty, by vote of a
majority of the Trustees as described above or by a vote of a majority of the
outstanding Service Shares of the affected Fund on not more than sixty (60)
days' written notice to any other party to the Service Agreements. The Service
Agreements will terminate automatically if assigned. So long as the Plan is in
effect, the selection and nomination of those Trustees who are not interested
persons will be committed to the discretion of the non-interested Trustees. The
Trustees have determined that, in its judgment, there is a reasonable likelihood
that the Plans will benefit the Funds and the holders of Service
B-110
<PAGE>
Shares of the Funds. In the Trustees' quarterly review of the Plan and related
Service Agreements, the Board will consider their continued appropriateness and
the level of compensation provided therein.
B-111
<PAGE>
APPENDIX A
DESCRIPTION OF BOND RATINGS*
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium-grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa: Bonds which are rated Baa are considered as medium-grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
- --------------
* THE RATING SYSTEMS DESCRIBED HEREIN ARE BELIEVED TO BE THE MOST RECENT RATING
SYSTEMS AVAILABLE FROM MOODY'S INVESTORS SERVICE, INC. AND STANDARD AND
POOR'S RATINGS GROUP AT THE DATE OF THIS ADDITIONAL STATEMENT FOR THE
SECURITIES LISTED. RATINGS ARE GENERALLY GIVEN TO SECURITIES AT THE TIMES OF
ISSUANCE. WHILE THE RATING AGENCIES MAY FROM TIME TO TIME REVISE SUCH
RATINGS, THEY UNDERTAKE NO OBLIGATION TO DO SO, AND THE RATINGS INDICATED DO
NOT NECESSARILY REPRESENT RATINGS WHICH WILL BE GIVEN TO THESE SECURITIES ON
THE DATE OF THE FUND'S FISCAL YEAR END.
1-A
<PAGE>
B: Bonds which are rated B generally lack characteristics of
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds which
may be in default, and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
Unrated: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies
that are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances
arise, the effects of which preclude satisfactory analysis; if there is no
longer available reasonable up-to-date data to permit a judgment to be formed;
if a bond is called for redemption; or for other reasons.
NOTE: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's
believes possess the strongest investment attributes are designated by the
symbols Aa1, A1, Baa1, Ba1 and B1.
Moody's also provides credit ratings for commercial paper. These are
promissory obligations (1) not having an original maturity in excess of one
year, unless explicitly noted.
Description of Ratings of State and Municipal
Commercial Paper
---------------------------------------------
Moody's commercial paper ratings are opinions of the ability of
issuers to repay punctually senior debt obligations which have an original
maturity in excess of nine months. Moody's three highest commercial paper
rating categories are as follows:
2-A
<PAGE>
PRIME 1: Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term debt obligations.
Prime-1 repayment ability will often be evidenced by many of the following
characteristics:
- Leading market positions in well established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate reliance on
debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
- Well established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, may be
more subject to variation. Capitalized characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
PRIME-3: Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The
effect of industry characteristics and market compositions may be more
pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate liquidity is
maintained.
STANDARD & POOR'S RATINGS GROUP
AAA: Bonds and debt rated AAA have the highest rating assigned by
Standard & Poor's. Capacity to meet the financial commitment on the obligation
is extremely strong.
AA: Bonds and debt rated AA have a very strong capacity to meet the
financial commitment on the obligation and differ from the higher rated issues
only in small degree.
A: Bonds and debt rated A have a strong capacity to meet the
financial commitment on the obligation although they are somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than bonds in higher rated categories.
3-A
<PAGE>
BBB: Bonds and debt rated BBB are regarded as having an adequate
capacity to meet the financial commitment on the obligation. Whereas they
normally exhibit adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity of the
obligor.
BB, B, CCC, CC, C: Bonds and debt rated BB, B, CCC, CC and C are
regarded as having significant speculative characteristics with respect to the
capacity to meet the financial commitment on the obligation. BB indicates the
least degree of speculation and C the highest. While such bonds will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties of major risk exposures to adverse conditions.
BB: Bonds and debt rated BB have less vulnerability to nonpayment
than other speculative issues. However, such securities face major ongoing
uncertainties or exposure to adverse business, financial, or economic conditions
which could lead to the obligor's inadequate capacity to meet the financial
commitment on the obligation.
B: Bonds and debt rated B are more vulnerable to non-payment but the
obligor currently has the capacity to meet its financial commitment on the
obligation. Adverse business, financial or economic conditions will likely
impair capacity or willingness to meet its financial commitment on the
obligation.
CCC: Bonds and debt rated CCC are currently vulnerable to non-
payment, and are dependent upon favorable business, financial, and economic
conditions to meet their financial commitment on the obligation. In the event
of adverse business, financial, or economic conditions, such securities are not
likely to have the capacity to meet their financial commitment on the
obligation.
CC: The rating CC is typically applied to bonds and debt that
are currently highly vulnerable to non-payment.
C: The C rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but debt service
payments on this obligation are continued.
D: Bonds and debt rated D are in payment default. The D rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The D rating
also will be used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.
R: This rating is attached to highlight derivative, hybrid, and
certain other obligations that Standard & Poor's believes may experience high
volatility or high variability in
4-A
<PAGE>
expected returns due to non-credit risks. Examples of such obligations are:
securities whose principal or interest return is indexed to equities,
commodities, or currencies, certain swaps and options; and interest-only and
principal-only mortgage securities. The absence of an "r" symbol should not be
taken as an indication that an obligation will exhibit no volatility or
variability in total return.
STANDARD & POOR'S RATINGS GROUP
A Standard & Poor's commercial paper rating is a current assessment of
the likelihood of timely payment of debt having an original maturity of no more
than 365 days. Standard & Poor's commercial paper rating categories are as
follows:
A-1 Obligations are rated in the highest category indicating that the
obligor's capacity to meet its financial commitment is strong. Within this
category, certain obligations are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial commitment on these
obligations is extremely strong.
A-2 Obligations are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations rated "A-
1". However, the obligor's capacity to meet its financial commitment on the
obligation is satisfactory.
A-3 Obligations exhibit adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
B- Obligations are regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
C- Obligations are currently vulnerable to nonpayment and are
dependent on favorable business, financial, and economic conditions for the
obligor to meet its financial obligation.
D- Obligations are in payment default. The "D" rating category is
used when payments on an obligation are not made on the date due, even if the
applicable grace period has not expired, unless Standard & Poor's believes such
payments will be made during such grace period. The "D" rating will also be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
FITCH IBCA, Inc.
Bond Ratings
- ------------
5-A
<PAGE>
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings
take into consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA: Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong capacity for
timely payment of financial commitments, which is unlikely to be adversely
affected by reasonably foreseeable events.
AA: Bonds rated AA are considered to be investment grade and of very
high credit quality. These ratings denote a very low expectation of investment
risk and indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.
A: Bonds rated A are considered to be investment grade and of high
credit quality. These ratings denote a low expectation of investment risk and
indicate strong capacity of timely payment of financial commitments.
BBB: Bonds rated BBB are considered to be investment grade and of
good credit quality. These ratings denote that there is currently a low
expectation of investment risk. The capacity for timely payment of financial
commitments is adequate, but adverse circumstances and in economic conditions
are more likely to impair this category.
BB: Bonds are considered to be speculative. These ratings indicate
that there is a possibility of credit risk developing, particularly as the
result of adverse economic changes over time; however, business or financial
alternatives may be available to allow financial commitments to be met.
Securities rated in this category are not investment grade.
B: Bonds are considered highly speculative. These ratings indicate
that significant credit risk is present, but a limited margin of safety remains.
Financial commitments are currently being met; however, capacity for continued
payment is contingent upon a sustained, favorable business and economic
environment.
CCC: Bonds have certain identifiable characteristics that, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
CC: Bonds are minimally protected. Default in payment of
interest and/or principal seems probable over time.
C: Bonds are in imminent default in payment of interest or
principal.
DDD, DD, and D: Bonds are in default on interest and/or principal
payments. Such bonds are extremely speculative and should be valued on the
basis of their ultimate recovery
6-A
<PAGE>
value in liquidation or reorganization of the obligor. DDD represents the
highest potential for recovery on these bonds, and D represents the lowest
potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category. The Fitch IBCA
ratings from and including "AA" to "B" may be modified by the addition of a plus
or minus sign.
Investment Grade Short-Term Ratings
- -----------------------------------
Fitch IBCA's short-term ratings apply to debt obligations that have
time horizons of less than 12 months for most obligations or up to three years
for U.S. public finance securities.
F 1: Highest Credit Quality. Issues assigned this rating reflect the
strongest capacity for timely payment of financial commitments; may have
an added "+" to denote any exceptionally strong credit feature.
F 2: Good Credit Quality. Issues assigned this rating have a satisfactory
capacity for timely payment of financial commitments, but the margin
of safety is not as great as for issues assigned F 1 ratings.
F 3: Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the degree of capacity for timely payment of financial
commitments is adequate; however, near-term adverse changes could result
in a reduction to non-investment grade.
B: Securities possess speculative credit quality. This designation
indicates minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and
economic conditions.
C: Securities possess high default risk. This designation indicates that
the capacity for meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.
D: Default. Issues assigned this rating are in actual or imminent payment
default.
LOC: The symbol LOC indicates that the rating is based on a letter of credit
issued by a commercial bank.
DUFF & PHELPS
-------------
Long Term Debt and Preferred Stock
- ----------------------------------
AAA: Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.
7-A
<PAGE>
AA+, AA, AA-: High credit quality. Protection factors are strong.
Risk is modest but may vary slightly from time to time because of economic
conditions. However, risk factors are more variable and greater in periods of
economic stress.
A+, A, A-: Debt possesses protection factors which are average but
adequate. However, risk factors are more variable and greater in periods of
economic stress.
BBB+, BBB, BBB-: Below average protection factors but still
considered sufficient for prudent investment. Considerable variability in risk
during economic cycles.
BB+, BB, BB-: Below investment grade but deemed likely to meet
obligations when due. Present or prospective financial protection factors
fluctuate according to industry conditions or company fortunes. Overall quality
may move up or down frequently within this category.
B+, B, B-: Below investment grade and possessing risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in the rating within
this category or into a higher or lower rating grade.
CCC: Well below investment grade securities. Considerable
uncertainty exists as to timely payment of principal, interest or preferred
dividends. Protection factors are narrow and risk can be substantial with
unfavorable economic/industry conditions, and/or with unfavorable company
developments.
D: Defaulted debt obligation.
Commercial Paper/Certificates of Deposits
- -----------------------------------------
D-1+: Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or ready access to alternative sources
of funds, is clearly outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations.
D-1: Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors
are minor.
D-1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are
very small.
D-2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good. Risk
factors are small.
8-A
<PAGE>
D-3: Satisfactory liquidity and other protection factors qualify issues as
investment grade. Risk factors are larger and subject to more
variation. Nevertheless, timely payment is expected.
D-4: Speculative investment characteristics. Liquidity is not sufficient to
insure against disruption in debt service. Operating factors and
market access may be subject to a high degree of variation.
D-5: Issuer failed to meet scheduled principal and/or interest payments.
Notes: Bonds which are unrated may expose the investor to risks with respect to
capacity to pay interest or repay principal which are similar to the
risks of lower-rated bonds. The Fund is dependent on the Investment
Adviser's judgment, analysis and experience in the evaluation of such
bonds.
Investors should note that the assignment of a rating to a bond by a
rating service may not reflect the effect of recent developments on
the issuer's ability to make interest and principal payments.
Description of Ratings of State and Municipal Notes
---------------------------------------------------
MOODY'S INVESTORS SERVICE, INC.
Moody's ratings for state and municipal short-term obligations will
be designated Moody's Investment Grade ("MIG") and variable rate demand
obligations are designated Variable Moody's Investment Grade ("VMIG"). Such
ratings recognize the differences between short-term credit risk and long-term
risk. Symbols used will be as follows:
MIG-1/VMIG-1: This designation denotes best quality enjoying strong
protection by established cash flows, superior liquidity support or demonstrated
broad based access to the market for refinancing.
MIG-2/VMIG-2: This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
MIG-3/VMIG-3: This designation denotes favorable quality. All
security elements are accounted for but there is lacking the undeniable strength
of the preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
MIG-4/VMIG-4: This designation denotes adequate quality carrying
specific risk but having protection commonly regarded as required of an
investment security and not distinctly or predominantly speculative.
9-A
<PAGE>
SG: This designation denotes speculative quality. Debt instruments
in this category lack margins of protection.
STANDARD & POOR'S RATINGS GROUP
A Standard and Poor's note rating reflects the liquidity concerns and
market access risks unique to notes. Notes due in three years or less will
likely receive a note rating.
Note rating symbols are as follows:
SP-1: Strong capacity to pay principal and interest. Those issues determined
to possess very strong characteristics will be given a plus (+)
designation.
SP-2: Satisfactory capacity to pay principal and interest with some
vulnerability to adverse financial and economic changes over the term
of the notes.
SP-3: Speculative capacity to pay principal and interest.
10-A
<PAGE>
APPENDIX B
BUSINESS PRINCIPLES OF GOLDMAN, SACHS & CO.
Goldman Sachs is noted for its Business Principles, which guide all of
the firm's activities and serve as the basis for its distinguished reputation
among investors worldwide.
OUR CLIENT'S INTERESTS ALWAYS COME FIRST. Our experience shows that
if we serve our clients well, our own success will follow.
OUR ASSETS ARE OUR PEOPLE, CAPITAL AND REPUTATION. If any of these
assets diminish, reputation is the most difficult to restore. We are dedicated
to complying fully with the letter and spirit of the laws, rules and ethical
principles that govern us. Our continued success depends upon unswerving
adherence to this standard.
WE TAKE GREAT PRIDE IN THE PROFESSIONAL QUALITY OF OUR WORK. We have
an uncompromising determination to achieve excellence in everything we
undertake. Though we may be involved in a wide variety and heavy volume of
activity, we would, if it came to a choice, rather be best than biggest.
WE STRESS CREATIVITY AND IMAGINATION IN EVERYTHING WE DO. While
recognizing that the old way may still be the best way, we constantly strive to
find a better solution to a client's problems. We pride ourselves on having
pioneered many of the practices and techniques that have become standard in the
industry.
WE MAKE AN UNUSUAL EFFORT TO IDENTIFY AND RECRUIT THE VERY BEST PERSON
FOR EVERY JOB. Although our activities are measured in billions of dollars, we
select our people one by one. In a service business, we know that without the
best people, we cannot be the best firm.
WE OFFER OUR PEOPLE THE OPPORTUNITY TO MOVE AHEAD MORE RAPIDLY THAN IS
POSSIBLE AT MOST OTHER PLACES. We have yet to find limits to the responsibility
that our best people are able to assume. Advancement depends solely on ability,
performance and contribution to the Firm's success, without regard to race,
color, religion, sex, age, national origin, disability, sexual orientation, or
any impermissible criterion or circumstance.
WE STRESS TEAMWORK IN EVERYTHING WE DO. While individual creativity
is always encouraged, we have found that team effort often produces the best
results. We have no room for those who put their personal interests ahead of
the interests of the Firm and its clients.
THE DEDICATION OF OUR PEOPLE TO THE FIRM AND THE INTENSE EFFORT THEY
GIVE THEIR JOBS
1-B
<PAGE>
ARE GREATER THAN ONE FINDS IN MOST OTHER ORGANIZATIONS. We think that this is an
important part of our success.
WE CONSIDER OUR SIZE AN ASSET THAT WE TRY HARD TO PRESERVE. We want
to be big enough to undertake the largest project that any of our clients could
contemplate, yet small enough to maintain the loyalty, the intimacy and the
esprit de corps that we all treasure and that contribute greatly to our success.
WE CONSTANTLY STRIVE TO ANTICIPATE THE RAPIDLY CHANGING NEEDS OF OUR
CLIENTS AND TO DEVELOP NEW SERVICES TO MEET THOSE NEEDS. We know that the world
of finance will not stand still and that complacency can lead to distinction.
WE REGULARLY RECEIVE CONFIDENTIAL INFORMATION AS PART OF OUR NORMAL
CLIENT RELATIONSHIPS. To breach a confidence or to use confidential information
improperly or carelessly would be unthinkable.
OUR BUSINESS IS HIGHLY COMPETITIVE, AND WE AGGRESSIVELY SEEK TO EXPAND
OUR CLIENT RELATIONSHIPS. However, we must always be fair competitors and must
never denigrate other firms.
INTEGRITY AND HONESTY ARE THE HEART OF OUR BUSINESS. We expect our
people to maintain high ethical standards in everything they do, both in their
work for the firm and in their personal lives.
GOLDMAN, SACHS & CO.'S INVESTMENT BANKING AND SECURITIES ACTIVITIES
Goldman, Sachs & Co. is a leading global investment banking and
securities firm with a number of distinguishing characteristics.
Privately owned and ranked among Wall Street's best capitalized firms,
with partners' capital of approximately $6.1 billion as of November 28, 1997.
With thirty-seven offices around the world, Goldman Sachs employs over
11,000 professionals focused on opportunities in major markets.
The number one underwriter of all international equity issuers from
(1993-1996).
A research budget of $200 million for 1997.
Premier lead manager of negotiated municipal bond offerings over the
past six years (1990-1996).*
- --------------------------------
* SOURCE: SECURITIES DATA CORPORATION. COMMON STOCK RANKING EXCLUDES REITS,
INVESTMENT TRUSTS AND RIGHTS.
2-B
<PAGE>
The number one lead manager of U.S. common stock offerings for the
past eight years (1989-1996).
The number one lead manager for initial public offerings (IPOs)
worldwide (1989-1996).
3-B
<PAGE>
GOLDMAN, SACHS & CO.'S HISTORY OF EXCELLENCE
1865 End of Civil War
1869 Marcus Goldman opens Goldman Sachs
1890 Dow Jones Industrial Average first published
1896 Goldman Sachs joins New York Stock Exchange
1906 Goldman Sachs takes Sears Roebuck & Co. public (longest-standing client
relationship)
Dow Jones Industrial Average tops 100
1925 Goldman Sachs finances Warner Brothers, producer of the first talking
film
1956 Goldman Sachs co-manages Ford's public offering, the largest to date
1970 London office opens
1972 Dow Jones Industrial Average breaks 1000
1986 Goldman Sachs takes Microsoft public
1991 Provides advisory services for the largest privatization in the region
of the sale of Telefonos de Mexico
1995 Dow Jones Industrial Average breaks 5000
1996 Goldman Sachs takes Deutsche Telecom public
Dow Jones Industrial Average breaks 6000
1997 Dow Jones Industrial Average breaks 7000
Goldman Sachs increases assets under management by 100% over 1996
4-B
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(a) Financial Statements
Included in the Prospectus:
Financial Highlights for Goldman Sachs Balanced Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman
Sachs CORE Large Cap Growth Fund, Goldman Sachs CORE Small Cap Equity
Fund, Goldman Sachs Capital Growth Fund, Goldman Sachs Mid Cap Equity
Fund and Goldman Small Cap Value Fund for the period ended January 31,
1998 (audited);
Financial Highlights for Goldman Sachs Balanced Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman
Sachs CORE Large Cap Growth Fund, Goldman Sachs CORE Small Cap Equity
Fund, Goldman Sachs Capital Growth Fund, Goldman Sachs Mid Cap Equity
Fund and Goldman Small Cap Value Fund for the six month period ended
July 31, 1998 (unaudited);
Incorporated by Reference into the Additional Statement:
Statement of Investments as of January 31, 1998 for Goldman Sachs Capital
Growth Fund, Goldman Sachs CORE U.S. Equity Fund (formerly Select Equity
Fund), Goldman Sachs CORE Small Cap Equity Fund, Goldman Sachs CORE
International Equity Fund, Goldman Sachs Small Cap Value Fund, Goldman
Sachs International Equity Fund, Goldman Sachs Growth and Income Fund,
Goldman Sachs Asia Growth Fund, Goldman Sachs Balanced Fund, Goldman Sachs
Mid Cap Equity Fund, Goldman Sachs CORE Large Cap Growth Fund and Goldman
Sachs Emerging Markets Equity Fund.
Statement of Investments as of July 31, 1998 for Goldman Sachs Capital
Growth Fund, Goldman Sachs CORE U.S. Equity Fund (formerly Select Equity
Fund), Goldman Sachs CORE Small Cap Equity Fund, Goldman Sachs CORE
International Equity Fund, Goldman Sachs Small Cap Value Fund, Goldman
Sachs International Equity Fund, Goldman Sachs Growth and Income Fund,
Goldman Sachs Asia Growth Fund, Goldman Sachs Balanced Fund, Goldman Sachs
Mid Cap Equity Fund, Goldman Sachs CORE Large Cap Growth Fund and Goldman
Sachs Emerging Markets Equity Fund.
Statement of Assets and Liabilities as of January 31, 1998 for Goldman
Sachs Capital Growth Fund, Goldman Sachs CORE
<PAGE>
U.S. Equity Fund (formerly Select Equity Fund), Goldman Sachs CORE Small
Cap Equity Fund, Goldman Sachs CORE International Equity Fund, Goldman
Sachs Small Cap Value Fund, Goldman Sachs International Equity Fund,
Goldman Sachs Growth and Income Fund, Goldman Sachs Asia Growth Fund,
Goldman Sachs Balanced Fund, Goldman Sachs Mid Cap Equity Fund, Goldman
Sachs CORE Large Cap Growth Fund and Goldman Sachs Emerging Markets Equity
Fund.
Statement of Assets and Liabilities as of July 31, 1998 for Goldman Sachs
Capital Growth Fund, Goldman Sachs CORE U.S. Equity Fund (formerly Select
Equity Fund), Goldman Sachs CORE Small Cap Equity Fund, Goldman Sachs CORE
International Equity Fund, Goldman Sachs Small Cap Value Fund, Goldman
Sachs International Equity Fund, Goldman Sachs Growth and Income Fund,
Goldman Sachs Asia Growth Fund, Goldman Sachs Balanced Fund, Goldman Sachs
Mid Cap Equity Fund, Goldman Sachs CORE Large Cap Growth Fund and Goldman
Sachs Emerging Markets Equity Fund.
Statement of Operations for the year ended January 31, 1998 for Goldman
Sachs Capital Growth Fund, Goldman Sachs CORE U.S. Equity Fund (formerly
Select Equity Fund), Goldman Sachs CORE Small Cap Equity Fund, Goldman
Sachs CORE International Equity Fund, Goldman Sachs Small Cap Value Fund,
Goldman Sachs International Equity Fund, Goldman Sachs Growth and Income
Fund, Goldman Sachs Asia Growth Fund, Goldman Sachs Balanced Fund, Goldman
Sachs Mid Cap Equity Fund, Goldman Sachs CORE Large Cap Growth Fund and
Goldman Sachs Emerging Markets Equity Fund.
Statement of Operations for the six months ended July 31, 1998 for Goldman
Sachs Capital Growth Fund, Goldman Sachs CORE U.S. Equity Fund (formerly
Select Equity Fund), Goldman Sachs CORE Small Cap Equity Fund, Goldman
Sachs CORE International Equity Fund, Goldman Sachs Small Cap Value Fund,
Goldman Sachs International Equity Fund, Goldman Sachs Growth and Income
Fund, Goldman Sachs Asia Growth Fund, Goldman Sachs Balanced Fund, Goldman
Sachs Mid Cap Equity Fund, Goldman Sachs CORE Large Cap Growth Fund and
Goldman Sachs Emerging Markets Equity Fund.
Statement of Changes in Net Assets for the years ended January 31, 1997 and
January 31, 1998 for Goldman Sachs Capital Growth Fund, Goldman Sachs CORE
U.S. Equity Fund (formerly Select Equity Fund), Goldman Sachs CORE Small
Cap Equity Fund, Goldman Sachs CORE International Equity Fund, Goldman
Sachs Small Cap Value Fund, Goldman Sachs International Equity Fund,
Goldman Sachs Growth and Income Fund, Goldman Sachs Asia Growth Fund,
Goldman Sachs Balanced Fund, Goldman Sachs Mid Cap Equity Fund, Goldman
Sachs CORE Large Cap Growth Fund and Goldman Sachs Emerging Markets Equity
Fund.
<PAGE>
Financial Highlights for the year ended January 31, 1998 for Goldman Sachs
Capital Growth Fund, Goldman Sachs CORE U.S. Equity Fund (formerly Select
Equity Fund), Goldman Sachs CORE Small Cap Equity Fund, Goldman Sachs CORE
International Equity Fund, Goldman Sachs Small Cap Value Fund, Goldman
Sachs International Equity Fund, Goldman Sachs Growth and Income Fund,
Goldman Sachs Asia Growth Fund, Goldman Sachs Balanced Fund, Goldman Sachs
Mid Cap Equity Fund, Goldman Sachs CORE Large Cap Growth Fund and Goldman
Sachs Emerging Markets Equity Fund.
Financial Highlights for the six months ended July 31, 1998 for Goldman
Sachs Capital Growth Fund, Goldman Sachs CORE U.S. Equity Fund (formerly
Select Equity Fund), Goldman Sachs CORE Small Cap Equity Fund, Goldman
Sachs CORE International Equity Fund, Goldman Sachs Small Cap Value Fund,
Goldman Sachs International Equity Fund, Goldman Sachs Growth and Income
Fund, Goldman Sachs Asia Growth Fund, Goldman Sachs Balanced Fund, Goldman
Sachs Mid Cap Equity Fund, Goldman Sachs CORE Large Cap Growth Fund and
Goldman Sachs Emerging Markets Equity Fund.
Notes to Financial Statements.
Report of Independent Public Accountants
with respect to the fiscal year ended January 31, 1998.
The following exhibits relating to Goldman Sachs Trust are incorporated
herein by reference to Post-Effective Amendment No. 26 to Goldman Sachs Trust's
Registration Statement on Form N-1A (Accession No. 000950130-95-002856); to
Post-Effective Amendment No. 27 to such Registration Statement (Accession No.
0000950130-96-004931); to Post-Effective Amendment No. 29 to such Registration
Statement (Accession No. 0000950130-97-000573); to Post-Effective Amendment No.
31 to such Registration Statement (Accession No. 0000950130-97-000805); to Post-
Effective Amendment No. 33 to such Registration Statement (Accession No.
0000950130-97-0001867); to Post-Effective Amendment No. 40 to such Registration
Statement (Accession No. 0000950130-97-004495); and to Post-Effective Amendment
No. 41 to such Registration Statement (Accession No 0000-950130-98-000676);
Post-Effective Amendment No. 43 to such Registration Statement (Accession No.
0000950130-98-000965); to Post-Effective Amendment No. 44 to such Registration
Statement (Accession No. 0000950130-98-002160) and to Post-Effective Amendment
No. 46 to such Registration Statement (Accession No. 0000950130-98-003563).
(a)(1). Agreement and Declaration of Trust. (Accession No. 0000950130-
97-000573)
(a)(2). Amendment No. 1 to Agreement and Declaration of Trust.
(Accession No. 0000950130-97-004495)
<PAGE>
(a)(3). Amendment No. 2 to Agreement and Declaration of Trust.
(Accession No. 0000950130-97-004495)
(a)(4). Amendment No.3 dated January 28, 1997 to the Agreement and
Declaration of Trust. (Accession No. 0000950130-98-000676)
(a)(5). Amendment No. 4 dated January 28, 1998 to the Agreement and
Declaration of Trust as amended, dated January 28, 1997.
(Accession No. 0000950130-98-000676)
(b). By-laws of the Delaware business trust. (Accession
No. 0000950130-97-000573)
(c). Not applicable.
(d)(1). Management Agreement dated April 30, 1997 between Registrant on
behalf of Goldman Sachs Short Duration Government Fund and
Goldman Sachs Funds Management, L.P. (Accession No. 0000950130-
98-000676)
(d)(2). Management Agreement dated April 30, 1997 between Registrant on
behalf of Goldman Sachs Adjustable Rate Government Fund and
Goldman Sachs Funds Management, L.P. (Accession No. 0000950130-
98-000676)
(d)(3). Advisory Agreement between Registrant and Goldman, Sachs & Co.,
filed as Exhibit A.(Accession No. 0000950130-98-000965)
(d)(4). Management Agreement dated April 30, 1997 between Registrant on
behalf of Goldman Sachs Short Duration Tax-Free Fund and Goldman
Sachs Asset Management. (Accession No. 0000950130-98-000676)
(d)(5). Management Agreement dated April 30, 1997 between Registrant on
behalf of Goldman Sachs Core Fixed Income Fund and Goldman Sachs
Asset Management. (Accession No. 0000950130-98-000676)
(d)(6). Consent dated June 20, 1987 to change in duties under the
Advisory Agreement and Distribution Agreement between Registrant
and Goldman, Sachs & Co. (Accession No. 0000950130-98-000965)
(d)(7). Management Agreement dated April 23, 1998 on behalf of the
Registrant and Goldman Sachs Asset Management, Goldman Sachs
Funds Management L.P. and Goldman Sachs Asset Management
International. (Accession No. 0000950130-98-000676)
<PAGE>
(d)(8). Management Agreement dated January 1, 1998 on behalf of the
Goldman Sachs Asset Allocation Portfolios and Goldman Sachs Asset
Management. (Accession No. 0000950130-98-000676)
(d)(9). Management Agreement dated April 30, 1997 between the Registrant
on behalf of Goldman Sachs - Institutional Liquid Assets and
Goldman Sachs Asset Management. (Accession No. 0000950130-98-
000676)
(d)(10). Consent pursuant to paragraph 1 of each Advisory Agreement and
Distribution Agreement regarding Treasury Instruments, Tax-Exempt
New Jersey and Tax-Exempt New York Portfolio (Accession No.
0000950130-98-000965)
(e). Distribution Agreement dated April 30, 1997 as amended October
21, 1997 between Registrant and Goldman, Sachs & Co. (Accession
No. 0000950130-97-004495)
(f). Not applicable.
(g)(1). Custodian Agreement between Registrant and State Street Bank and
Trust Company. (Accession No. 0000950130-95-002856)
(g)(2). Custodian Agreement between Registrant and State Street Bank and
Trust Company, filed as Exhibit 1(e) (Accession No. 0000950130-
98-000965)
(g)(3). Letter-agreement dated December 27, 1978 between Registrant and
State Street Bank and Trust Company pertaining to the fees
payable by Registrant pursuant to the Custodian Agreement, filed
as Exhibit 8(c) (Accession No. 0000950130-98-000965)
(g)(4). Amendment dated May 28, 1981 to the Custodian Agreement referred
to above as Exhibit 8(a) (Accession No. 0000950130-98-000965)
(g)(5). Fee schedule relating to the Custodian Agreement between
Registrant on behalf of the Goldman Sachs Asset Allocation
Portfolios and State Street Bank and Trust Company. (Accession
No. 0000950130-97-004495)
(g)(6). Letter Agreement dated June 14, 1984 between Registrant and State
Street Bank and Trust Company pertaining to a change in wire
charges under the Custodian Agreement, filed as Exhibit 8(f)
(Accession No. 0000950130-98-000965)
<PAGE>
(g)(7). Letter Agreement dated March 28, 1983 between Registrant and
State Street Bank and Trust Company pertaining to the latter's
designation of Bank of America, N.T. and S.A. as its subcustodian
and certain other matters, filed as Exhibit 8(d) (Accession No.
0000950130-98-000965)
(g)(8). Letter Agreement dated March 21, 1985 between Registrant and
State Street Bank and Trust Company pertaining to the creation of
a joint repurchase agreement account, filed as Exhibit 8(g)
(Accession No. 0000950130-98-000965)
(g)(9). Letter Agreement dated November 7, 1985, with attachments,
between Registrant and State Street Bank and Trust Company
authorizing State Street Bank and Trust Company to permit
redemption of units by check, filed as Exhibit 8(h) (Accession
No. 0000950130-98-000965)
(g)(10). Money Transfer Services Agreement dated November 14, 1985,
including attachment, between Registrant and State Street Bank
and Trust Company pertaining to transfers of funds on deposit
with State Street Bank and Trust Company, filed as Exhibit 8(i)
(Accession No. 0000950130-98-000965)
(g)(11). Letter Agreement dated November 27, 1985 between Registrant and
State Street Bank and Trust Company amending the Custodian
Agreement (Accession No. 0000950130-98-000965)
(g)(12). Letter Agreement dated July 22, 1986 between Registrant and State
Street Bank and Trust Company pertaining to a change in wire
charges (Accession No. 0000950130-98-000965)
(h)(1). Wiring Agreement dated June 20, 1987 among Goldman, Sachs & Co.,
State Street Bank and Trust Company and The Northern Trust
Company (Accession No. 0000950130-98-000965)
(h)(2). Letter Agreement dated June 20, 1987 between Registrant and State
Street Bank and Trust Company amending the Custodian Agreement
(Accession No. 0000950130-98-000965)
(h)(3). Letter Agreement dated June 20, 1987 regarding use of checking
account between Registrant and The Northern Trust Company
(Accession No. 0000950130-98-000965)
(h)(4). Letter Agreement between Registrant and State Street Bank and
Trust Company pertaining to the
<PAGE>
latter's designation of Security Pacific National Bank as its
sub-custodian and certain other matters (Accession No.
0000950130-98-000965)
(h)(5). Amendment dated July 19, 1988 to the Custodian Agreement between
Registrant and State Street Bank and Trust Company (Accession No.
0000950130-98-000965)
(h)(6). Amendment dated September 15, 1988 to the Custodian Agreement
between Registrant and State Street Bank and Trust Company
(Accession No. 0000950130-98-000965)
(h)(7). Transfer Agency Agreement between Registrant and Goldman, Sachs &
Co. (Accession No. 0000950130-95-002856)
(h)(8). Fee schedule relating to Transfer Agency Agreement between
Registrant on behalf of the Goldman Sachs Asset Allocation
Portfolios and Goldman, Sachs & Co. (Accession No. 0000950130-
97-004495)
(h)(9). Transfer Agency Agreement dated May 1, 1988 between Registrant
and Goldman, Sachs & Co. and schedule of fees pertaining thereto.
(Accession No. 0000950130-98-000965)
(i)(1). Opinion of Drinker, Biddle & Reath, LLP. (Accession No.
0000950130-97-004495)
(i)(2). Opinion of Morris, Nichols, Arsht & Tunnell. (Accession No.
0000950130-97-001867)
(i)(3). Opinion of Drinker, Biddle & Reath, LLP.(Japanese Equity and
International Small Cap). (Accession No. 0000950130-98-003563)
(i)(4). Opinion of Drinker, Biddle & Reath, LLP.(Cash Management Shares).
(Accession No. 0000950130-98-003563)
(k). Not applicable.
(l). Not applicable.
(m)(1). Class A Plan of Distribution pursuant to Rule 12b-1 dated January
28, 1998. (Accession No. 0000950130-98-000676)
(m)(2). Class B Plan of Distribution pursuant to Rule 12b-1 dated January
28, 1998. (Accession No. 0000950130-98-000676)
<PAGE>
(m)(3). Class C Plan of Distribution pursuant to Rule 12b-1 dated January
28, 1998. (Accession No. 0000950130-98-000676)
(m)(4). Cash Management Shares Plan of Distribution pursuant to Rule 12b-
1 dated May 1, 1998. (Accession No. 0000950130-98-002160)
(p)(1). Powers of Attorney of Messrs. Bakhru, Ford, Grip, Shuch,
Smart, Springer, Strubel, McNulty, Mosior, Gilman, Perlowski,
Richman, Surloff, Mmes. MacPherson, Mucker and Taylor.
(Accession No. 0000950130-97-000805)
(p)(2). Powers of Attorney dated October 21, 1997 on behalf of James A.
Fitzpatrick and Valerie A. Zondorak. (Accession No. 0000950130-
98-000676)
The following exhibits relating to Goldman Sachs Trust are filed herewith
electronically pursuant to EDGAR rules:
(a)(6). Amendment No. 5 dated April 23, 1998 to Agreement and Declaration
of Trust as amended, dated January 28, 1997.
(a) (7) Amendment No. 6 dated July 22, 1998 to Agreement and Declaration
of Trust as amended dated January 28, 1997
(d)(11) Management Agreement dated April 30, 1977 as amended July 22, 1998,
between Registrant, Goldman Sachs Asset Management, Goldman Sachs
Funds Management L.P and Goldman Sachs Asset Management
International.
(e)(2) Distribution Agreement dated April 30, 1997 as amended July 22,
1998 between Registrant and Goldman, Sachs & Co.
(h)(10). Fee schedule dated July 31, 1998 relating to Transfer Agency
Agreement between Registrant on behalf of all Funds of Goldman
Sachs Trust other than the Institutional Liquid Assets and
Financial Square Money Market Funds.
(j). Consent of Independent Auditors
(m)(5). Class A Distribution and Service Plan Amended and Restated as of
September 1, 1998.
(m)(6). Class B Distribution and Service Plan Amended and Restated as of
September 1, 1998.
(m)(7). Class C Distribution and Service Plan Amended and Restated as of
September 1, 1998.
<PAGE>
(o). Plan dated September 1, 1998 entered into by Registrant pursuant
to Rule 18f-3.
27. Financial Data Schedules.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
-------------------------------------------------------------
Not Applicable.
ITEM 25. NUMBER OF HOLDERS OF SECURITIES.
-------------------------------
Number of
Title of Class Record Holders
- -------------- --------------
Treasury Obligations Portfolio
ILA Units 372
ILA Administration Units 50
ILA Service Units 18
Treasury Instruments Portfolio
ILA Units 267
ILA Administration Units 37
ILA Service Units 25
Federal Portfolio
ILA Units 2,265
ILA Administration Units 44
ILA Service Units 30
Government Portfolio
ILA Units 411
ILA Administration Units 33
ILA Service Units 15
Cash Management Shares 2
Prime Obligations Portfolio
ILA Retail Class (Service Units) 953
ILA Units 769
ILA Class B 368
ILA Class C 139
ILA Administration Units 52
ILA Service Units 28
Cash Management Shares 2
Money Market Portfolio
ILA Units 1,907
ILA Administration Units 36
ILA Service Units 15
Cash Management Shares 2
Tax-Exempt Diversified Portfolio
ILA Retail Class (Service Units) 70
ILA Units 2,504
ILA Administration Units 59
ILA Service Units 21
Cash Management Shares 2
Tax-Exempt California Portfolio
<PAGE>
ILA Units 1,378
ILA Administration Units 13
ILA Service Units 6
Cash Management Shares 2
Tax-Exempt New York Portfolio
ILA Units 329
ILA Administration Units 9
ILA Service Units 6
Cash Management Shares 2
Financial Square Treasury Obligations Fund
FST Shares 271
FST Administration Shares 67
FST Service Shares 74
FST Preferred Shares 26
Financial Square Prime Obligations Fund
FST Shares 427
FST Administration Shares 58
FST Service Shares 66
FST Preferred Shares 24
Financial Square Government Fund
FST Shares 238
FST Administration Shares 55
FST Service Shares 37
FST Preferred Shares 23
Financial Square Money Market Fund
FST Shares 498
FST Administration Shares 47
FST Service Shares 36
FST Preferred Shares 23
Financial Square Tax-Free Money Market Fund
FST Shares 238
FST Administration Shares 51
FST Service Shares 55
FST Preferred Shares 21
Financial Square Treasury Instruments Fund
FST Shares 33
FST Administration Shares 16
FST Service Shares 17
FST Preferred Shares 6
Financial Square Federal Fund
FST Shares 105
FST Administration Shares 26
FST Service Shares 24
FST Preferred Shares 11
Financial Square Municipal Money Market Fund
FST Shares 0
FST Administration Shares 0
FST Service Shares 0
FST Preferred Shares 0
Financial Square Premium Money Market Fund
FST Shares 55
FST Administration Shares 11
FST Service Shares 15
FST Preferred Shares 8
<PAGE>
Goldman Sachs Short Duration Government Fund
Class A 207
Class B 93
Class C 81
Institutional Shares 274
Administration Shares 16
Service Shares 9
Goldman Sachs Adjustable Rate Government Fund
Class A 391
Institutional Shares 854
Administration Shares 22
Service Shares 6
Goldman Sachs Short Duration Tax-Free Fund
Class A 129
Class B 13
Class C 18
Institutional Shares 307
Administration Shares 10
Service Shares 0
Goldman Sachs CORE Fixed Income Fund
Class A 649
Class B 247
Class C 125
Institutional Shares 41
Administration Shares 11
Service Shares 6
Goldman Sachs Global Income Fund
Class A 4,480
Class B 523
Class C 192
Institutional Shares 62
Service Shares 5
Goldman Sachs Government Income Fund
Class A 1,601
Class B 550
Class C 139
Institutional Shares 6
Service Shares 2
Goldman Sachs Municipal Income Fund
Class A 1,704
Class B 114
Class C 49
Institutional Shares 4
Service Shares 1
Goldman Sachs High Yield Fund
Class A 2,726
Class B 1,200
Class C 428
Institutional Shares 12
Service Shares 3
Goldman Sachs Capital Growth Fund
Class A 51,389
Class B 10,971
Class C 2,262
<PAGE>
Institutional Shares 29
Service Shares 9
Goldman Sachs CORE U.S. Equity Fund
Class A 21,776
Class B 7,523
Class C 1,011
Institutional Shares 51
Service Shares 9
Goldman Sachs Small Cap Value Fund
Class A 23,966
Class B 5,540
Class C 923
Institutional Shares 16
Service Shares 6
Goldman Sachs International Equity Fund
Class A 30,999
Class B 6,576
Class C 731
Institutional Shares 63
Service Shares 10
Goldman Sachs Growth and Income Fund
Class A 70,778
Class B 29,231
Class C 3,835
Institutional Shares 59
Service Shares 19
Goldman Sachs Asia Growth Fund
Class A 8,627
Class B 877
Class C 180
Institutional Shares 9
Service Shares 3
Goldman Sachs Balanced Fund
Class A 8,673
Class B 2,539
Class C 790
Institutional Shares 13
Service Shares 7
Goldman Sachs Mid Cap Equity Fund
Class A 6,136
Class B 3,519
Class C 894
Institutional Shares 53
Service Shares 7
Goldman Sachs CORE Large Cap Growth Fund
Class A 5,778
Class B 3,587
Class C 1,051
Institutional Shares 44
Service Shares 9
Goldman Sachs Emerging Markets Equity Fund
Class A 809
Class B 70
Class C 40
<PAGE>
Institutional Shares 20
Service Shares 5
Goldman Sachs CORE Small Cap Equity Fund
Class A 1,879
Class B 950
Class C 326
Institutional Shares 18
Service Shares 7
Goldman Sachs CORE International Equity Fund
Class A 1,573
Class B 727
Class C 208
Institutional Shares 23
Service Shares 6
Goldman Sachs Japanese Equity Fund
Class A 96
Class B 48
Class C 14
Institutional Shares 5
Service Shares 5
Goldman Sachs International Small Cap Fund
Class A 296
Class B 25
Class C 17
Institutional Shares 5
Service Shares 5
Goldman Sachs Real Estate Securities Fund
Class A 0
Class B 5
Class C 0
Institutional Shares 0
Service Shares 0
Goldman Sachs Income Strategy Portfolio
Class A 683
Class B 650
Class C 437
Institutional Shares 6
Service Shares 10
Goldman Sachs Growth & Income Strategy Portfolio
Class A 3,915
Class B 3,858
Class C 2,027
Institutional Shares 10
Service Shares 12
Goldman Sachs Growth Strategy Portfolio
Class A 4,746
Class B 4,778
Class C 2,099
Institutional Shares 8
Service Shares 14
Goldman Sachs Aggressive Growth Strategy Portfolio
Class A 3,269
Class B 2,707
Class C 1,338
<PAGE>
Institutional Shares 5
Service Shares 11
(Information supplied as of September 8, 1998)
ITEM 26. INDEMNIFICATION
---------------
Article III of the Declaration of Trust of Goldman Sachs Trust, Delaware
business trust, provides for indemnification of the Trustees, officers and
agents of the Trust, subject to certain limitations. The Declaration of Trust
is incorporated by reference to Exhibit (a)(1).
The Management Agreement with each of the Funds (other than the ILA Portfolios)
provides that the applicable Investment Adviser will not be liable for any error
of judgment or mistake of law or for any loss suffered by a Fund, except a loss
resulting from wilful misfeasance, bad faith or gross negligence on the part of
the Investment Adviser or from reckless disregard by the Investment Adviser of
its obligations or duties under the Management Agreement. Section 7 of the
Management Agreement with respect to the ILA Portfolios provides that the ILA
Portfolios will indemnify the Adviser against certain liabilities; provided,
however, that such indemnification does not apply to any loss by reason of its
willful misfeasance, bad faith or gross negligence or the Adviser's reckless
disregard of its obligation under the Management Agreement. The Management
Agreements are incorporated by reference to Exhibits (d)(1) through (d)(10);
Section 9 of the Distribution Agreement between the Registrant and Goldman Sachs
dated April 30, 1997 and Section 7 of the Transfer Agency Agreements between the
Registrant and Goldman, Sachs & Co. dated July 15, 1991, April 30, 1997 and July
15, 1997 each provide that the Registrant will indemnify Goldman, Sachs & Co.
against certain liabilities. A copy of such Agreements are incorporated as
Exhibits (e), (h)(7) and (h)(9), respectively, to the Registrant's Registration
Statement.
Mutual fund and Trustees and officers liability policies purchased jointly by
the Registrant, Goldman Sachs Money Market Trust, Goldman Sachs Equity
Portfolios, Inc., Trust for Credit Unions, The Northern Institutional Funds
(formerly The Benchmark Funds), Goldman Sachs Variable Insurance Trust and The
Commerce Funds and Goldman, Sachs & Co. insure such persons and their respective
trustees, partners, officers and employees, subject to the policies' coverage
limits and exclusions and varying deductibles, against loss resulting from
claims by reason of any act, error, omission, misstatement, misleading
statement, neglect or breach of duty.
ITEM 27. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
----------------------------------------------------
The business and other connections of the officers and Managing Directors of
Goldman, Sachs & Co., Goldman Sachs Funds
<PAGE>
Management, L.P., and Goldman Sachs Asset Management International are listed on
their respective Forms ADV as currently filed with the Commission (File Nos.
801-16048, 801-37591 and 801-38157, respectively) the text of which are hereby
incorporated by reference.
ITEM 28. PRINCIPAL UNDERWRITERS.
----------------------
(a). Goldman, Sachs & Co. or an affiliate or a division thereof currently
serves as investment adviser and distributor of the units of Trust for Credit
Unions, for shares of Goldman Sachs Trust and for shares of Goldman Sachs
Variable Insurance Trust. Goldman, Sachs & Co., or a division thereof currently
serves as administrator and distributor of the units or shares of Northern
Institutional Funds (formerly The Benchmark Funds) and The Commerce Funds.
(b). Set forth below is certain information pertaining to the Managing
Directors of Goldman, Sachs & Co., the Registrant's principal underwriter, who
are members of Goldman, Sachs & Co.'s Executive Committee. None of the members
of the executive committee holds a position or office with the Registrant.
GOLDMAN SACHS EXECUTIVE COMMITTEE
Name and Principal
Business Address Position
---------------- --------
Jon S. Corzine (1) Chief Executive Officer
Robert J. Hurst (1) Managing Director
Henry M. Paulson, Jr. (1) Chief Operating Officer
John A. Thain (1)(3) Chief Financial Officer
John L. Thornton (3) Managing Director
Roy J. Zuckerberg (2) Managing Director
_______________________
(1) 85 Broad Street, New York, NY 10004
(2) One New York Plaza, New York, NY 10004
(3) Peterborough Court, 133 Fleet Street, London EC4A 2BB, England
(c) Not Applicable.
ITEM 29. LOCATION OF ACCOUNTS AND RECORDS.
--------------------------------
The Declaration of Trust, By-laws, minute books of the Registrant and certain
investment adviser records are in the physical possession of Goldman Sachs Asset
Management, One New York Plaza, New York, New York 10004. All other accounts,
books and other documents required to be maintained under Section 31(a) of the
Investment Company Act of 1940 and the Rule promulgated thereunder are in the
physical possession of State Street Bank and Trust Company, P.O. Box 1713,
Boston, Massachusetts 02105 except for certain transfer agency records which are
maintained
<PAGE>
by Goldman, Sachs & Co., 4900 Sears Tower, Chicago, Illinois 60606.
ITEM 30. MANAGEMENT SERVICES
-------------------
Not applicable.
ITEM 31. UNDERTAKINGS
------------
(a) The Portfolios undertake to furnish each person to whom a prospectus is
delivered with the latest Annual Report upon request without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 47 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and State of New York on the
1st day of October, 1998.
GOLDMAN SACHS TRUST
(A Delaware business trust)
By: /s/ Michael Richman
-------------------------
Michael J. Richman
Secretary
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
NAME TITLE DATE
- ---- ----- ----
*Douglas C. Grip President and
- ------------------
Douglas C. Grip Trustee October 1, 1998
*Scott M. Gilman Principal Accounting
- -----------------
Scott M. Gilman Officer And Principal
Financial Officer October 1, 1998
*David B. Ford Trustee October 1, 1998
- -----------------
David B. Ford
*Mary Patterson McPherson Trustee October 1, 1998
- --------------------------
Mary Patterson McPherson
*Ashok N. Bakhru Trustee October 1, 1998
- ------------------
Ashok N. Bakhru
*Alan A. Shuch Trustee October 1, 1998
- ---------------
Alan A. Shuch
*Jackson W. Smart Trustee October 1, 1998
- ----------------------
Jackson W. Smart, Jr.
*John P. McNulty Trustee October 1, 1998
- ------------------
John P. McNulty
*William H. Springer Trustee October 1, 1998
- ---------------------
William H. Springer
*Richard P. Strubel Trustee October 1, 1998
- --------------------
Richard P. Strubel
Richard P. Strubel
*By: /s/ Michael Richman
--------------------
Michael J. Richman,
Attorney-In-Fact
* Pursuant to a power of attorney previously filed.
<PAGE>
Index To Exhibits
(a)(6). Amendment No. 5 dated April 23, 1998 to Agreement and Declaration of
Trust as amended, dated January 28, 1997.
(a)(7) Amendment No.6 dated July 22, 1998 to Agreement and Declaration of
Trust as amended dated January 28, 1997
(d)(11) Management Agreement dated April 30, 1997 as amended July 22, 1998,
between Registrant, Goldman Sachs Asset Management, Goldman Sachs Funds
Management L.P and Goldman Sachs Asset Management International.
(e)(2) Distribution Agreement dated April 30, 1997 as amended July 22, 1998
between Registrant and Goldman, Sachs & Co.
(h)(10). Fee schedule dated July 31, 1998 relating to Transfer Agency Agreement
between Registrant on behalf of all Funds of Goldman Sachs Trust other
than the Institutional Liquid Assets and Financial Square Money Market
Funds.
(j). Consent of Independent Auditors
(m)(5). Class A Distribution and Service Plan Amended and Restated as of
September 1, 1998.
(m)(6). Class B Distribution and Service Plan Amended and Restated as of
September 1, 1998.
(m)(7). Class C Distribution and Service Plan Amended and Restated as of
September 1, 1998.
(o). Plan dated September 1, 1998 entered into by Registrant pursuant to
Rule 18f-3.
27. Financial Data Schedules
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFEENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 581
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> DEC-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 36,034,862
<INVESTMENTS-AT-VALUE> 35,179,242
<RECEIVABLES> 3,032,473
<ASSETS-OTHER> 71,870
<OTHER-ITEMS-ASSETS> 1,553,153
<TOTAL-ASSETS> 39,836,738
<PAYABLE-FOR-SECURITIES> 2,662,464
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 235,236
<TOTAL-LIABILITIES> 2,897,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37,805,183
<SHARES-COMMON-STOCK> 1,824,207
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,872
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 22,454
<ACCUM-APPREC-OR-DEPREC> 863,563
<NET-ASSETS> 36,939,038
<DIVIDEND-INCOME> 10,077
<INTEREST-INCOME> 55,754
<OTHER-INCOME> 0
<EXPENSES-NET> 45,959
<NET-INVESTMENT-INCOME> 19,872
<REALIZED-GAINS-CURRENT> 22,454
<APPREC-INCREASE-CURRENT> (863,563)
<NET-CHANGE-FROM-OPS> (886,017)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,824,207
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (866,145)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34,840
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 161,587
<AVERAGE-NET-ASSETS> 10,284,320
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.31)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.69
<EXPENSE-RATIO> 1.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 582
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> DEC-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 36,034,862
<INVESTMENTS-AT-VALUE> 35,179,242
<RECEIVABLES> 3,032,473
<ASSETS-OTHER> 71,870
<OTHER-ITEMS-ASSETS> 1,553,153
<TOTAL-ASSETS> 39,836,738
<PAYABLE-FOR-SECURITIES> 2,662,464
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 235,236
<TOTAL-LIABILITIES> 2,897,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37,805,183
<SHARES-COMMON-STOCK> 6,579
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,872
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 22,454
<ACCUM-APPREC-OR-DEPREC> 863,563
<NET-ASSETS> 36,939,038
<DIVIDEND-INCOME> 10,077
<INTEREST-INCOME> 55,754
<OTHER-INCOME> 0
<EXPENSES-NET> 45,959
<NET-INVESTMENT-INCOME> 19,872
<REALIZED-GAINS-CURRENT> 22,454
<APPREC-INCREASE-CURRENT> (863,563)
<NET-CHANGE-FROM-OPS> (886,017)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,579
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (866,145)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34,840
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 161,587
<AVERAGE-NET-ASSETS> 38,394
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.31)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.69
<EXPENSE-RATIO> 2.41
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 587
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> DEC-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 36,034,862
<INVESTMENTS-AT-VALUE> 35,179,242
<RECEIVABLES> 3,032,473
<ASSETS-OTHER> 71,870
<OTHER-ITEMS-ASSETS> 1,553,153
<TOTAL-ASSETS> 39,836,738
<PAYABLE-FOR-SECURITIES> 2,662,464
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 235,236
<TOTAL-LIABILITIES> 2,897,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37,805,183
<SHARES-COMMON-STOCK> 7,520
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,872
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 22,454
<ACCUM-APPREC-OR-DEPREC> 863,563
<NET-ASSETS> 36,939,038
<DIVIDEND-INCOME> 10,077
<INTEREST-INCOME> 55,754
<OTHER-INCOME> 0
<EXPENSES-NET> 45,959
<NET-INVESTMENT-INCOME> 19,872
<REALIZED-GAINS-CURRENT> 22,454
<APPREC-INCREASE-CURRENT> (863,563)
<NET-CHANGE-FROM-OPS> (886,017)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,579
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (866,145)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34,840
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 161,587
<AVERAGE-NET-ASSETS> 29,164
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.30)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.70
<EXPENSE-RATIO> 2.48
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 583
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> DEC-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 36,034,862
<INVESTMENTS-AT-VALUE> 35,179,242
<RECEIVABLES> 3,032,473
<ASSETS-OTHER> 71,870
<OTHER-ITEMS-ASSETS> 1,553,153
<TOTAL-ASSETS> 39,836,738
<PAYABLE-FOR-SECURITIES> 2,662,464
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 235,236
<TOTAL-LIABILITIES> 2,897,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37,805,183
<SHARES-COMMON-STOCK> 1,971,850
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,872
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 22,454
<ACCUM-APPREC-OR-DEPREC> 863,563
<NET-ASSETS> 36,939,038
<DIVIDEND-INCOME> 10,077
<INTEREST-INCOME> 55,754
<OTHER-INCOME> 0
<EXPENSES-NET> 45,959
<NET-INVESTMENT-INCOME> 19,872
<REALIZED-GAINS-CURRENT> 22,454
<APPREC-INCREASE-CURRENT> (863,563)
<NET-CHANGE-FROM-OPS> (886,017)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,973,802
<NUMBER-OF-SHARES-REDEEMED> 1,952
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (866,145)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34,840
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 161,587
<AVERAGE-NET-ASSETS> 11,723,990
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> (.31)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.70
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 586
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> DEC-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 36,034,862
<INVESTMENTS-AT-VALUE> 35,179,242
<RECEIVABLES> 3,032,473
<ASSETS-OTHER> 71,870
<OTHER-ITEMS-ASSETS> 1,553,153
<TOTAL-ASSETS> 39,836,738
<PAYABLE-FOR-SECURITIES> 2,662,464
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 235,236
<TOTAL-LIABILITIES> 2,897,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37,805,183
<SHARES-COMMON-STOCK> 160
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,872
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 22,454
<ACCUM-APPREC-OR-DEPREC> 863,563
<NET-ASSETS> 36,939,038
<DIVIDEND-INCOME> 10,077
<INTEREST-INCOME> 55,754
<OTHER-INCOME> 0
<EXPENSES-NET> 45,959
<NET-INVESTMENT-INCOME> 19,872
<REALIZED-GAINS-CURRENT> 22,454
<APPREC-INCREASE-CURRENT> (863,563)
<NET-CHANGE-FROM-OPS> (886,017)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 160
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (866,145)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34,840
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 161,587
<AVERAGE-NET-ASSETS> 1,557
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.31)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.69
<EXPENSE-RATIO> 2.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 551
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 695,518,696
<INVESTMENTS-AT-VALUE> 814,030,729
<RECEIVABLES> 19,114,760
<ASSETS-OTHER> 350,734
<OTHER-ITEMS-ASSETS> 168,187
<TOTAL-ASSETS> 833,664,410
<PAYABLE-FOR-SECURITIES> 4,696,706
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,387,515
<TOTAL-LIABILITIES> 18,084,221
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 725,610,554
<SHARES-COMMON-STOCK> 35,149,596
<SHARES-COMMON-PRIOR> 27,765,580
<ACCUMULATED-NII-CURRENT> 772,084
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 27,613,162
<ACCUM-APPREC-OR-DEPREC> 116,810,713
<NET-ASSETS> 815,580,189
<DIVIDEND-INCOME> 8,798,407
<INTEREST-INCOME> 1,698,940
<OTHER-INCOME> 0
<EXPENSES-NET> 12,483,760
<NET-INVESTMENT-INCOME> (1,986,413)
<REALIZED-GAINS-CURRENT> 32,896,260
<APPREC-INCREASE-CURRENT> 36,728,856
<NET-CHANGE-FROM-OPS> 67,638,703
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 28,622,667
<DISTRIBUTIONS-OTHER> 21,496,431
<NUMBER-OF-SHARES-SOLD> 21,390,200
<NUMBER-OF-SHARES-REDEEMED> 16,346,724
<SHARES-REINVESTED> 2,340,540
<NET-CHANGE-IN-ASSETS> 67,638,703
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1,612,885
<OVERDISTRIB-NII-PRIOR> 25,666
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,525,362
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,452,788
<AVERAGE-NET-ASSETS> 653,097,870
<PER-SHARE-NAV-BEGIN> 19.32
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 2.04
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.54
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.85
<EXPENSE-RATIO> 1.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 552
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 695,518,696
<INVESTMENTS-AT-VALUE> 814,030,729
<RECEIVABLES> 19,114,760
<ASSETS-OTHER> 350,734
<OTHER-ITEMS-ASSETS> 168,187
<TOTAL-ASSETS> 833,664,410
<PAYABLE-FOR-SECURITIES> 4,696,706
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,387,515
<TOTAL-LIABILITIES> 18,084,221
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 725,610,554
<SHARES-COMMON-STOCK> 2,808,047
<SHARES-COMMON-PRIOR> 997,807
<ACCUMULATED-NII-CURRENT> 772,084
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 27,613,162
<ACCUM-APPREC-OR-DEPREC> 116,810,713
<NET-ASSETS> 815,580,189
<DIVIDEND-INCOME> 8,798,407
<INTEREST-INCOME> 1,698,940
<OTHER-INCOME> 0
<EXPENSES-NET> 12,483,760
<NET-INVESTMENT-INCOME> (1,986,413)
<REALIZED-GAINS-CURRENT> 32,896,260
<APPREC-INCREASE-CURRENT> 36,728,856
<NET-CHANGE-FROM-OPS> 67,638,703
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,220,047
<DISTRIBUTIONS-OTHER> 2,621,560
<NUMBER-OF-SHARES-SOLD> 1,885,737
<NUMBER-OF-SHARES-REDEEMED> 267,333
<SHARES-REINVESTED> 191,836
<NET-CHANGE-IN-ASSETS> 67,638,703
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1,612,885
<OVERDISTRIB-NII-PRIOR> 25,666
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,525,362
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,452,788
<AVERAGE-NET-ASSETS> 41,943,734
<PER-SHARE-NAV-BEGIN> 19.24
<PER-SHARE-NII> (.08)
<PER-SHARE-GAIN-APPREC> 2.02
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.48
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.70
<EXPENSE-RATIO> 2.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST DATED JANUARY 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 557
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 695,518,696
<INVESTMENTS-AT-VALUE> 814,030,729
<RECEIVABLES> 19,114,760
<ASSETS-OTHER> 350,734
<OTHER-ITEMS-ASSETS> 168,187
<TOTAL-ASSETS> 833,664,410
<PAYABLE-FOR-SECURITIES> 4,696,706
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,387,515
<TOTAL-LIABILITIES> 18,084,221
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 725,610,554
<SHARES-COMMON-STOCK> 172,210
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 772,084
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 27,613,162
<ACCUM-APPREC-OR-DEPREC> 116,810,713
<NET-ASSETS> 815,580,189
<DIVIDEND-INCOME> 8,798,407
<INTEREST-INCOME> 1,698,940
<OTHER-INCOME> 0
<EXPENSES-NET> 12,483,760
<NET-INVESTMENT-INCOME> (1,986,413)
<REALIZED-GAINS-CURRENT> 32,896,260
<APPREC-INCREASE-CURRENT> 36,728,856
<NET-CHANGE-FROM-OPS> 67,638,703
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 247,769
<NUMBER-OF-SHARES-SOLD> 196,809
<NUMBER-OF-SHARES-REDEEMED> 35,076
<SHARES-REINVESTED> 10,477
<NET-CHANGE-IN-ASSETS> 67,638,703
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1,612,885
<OVERDISTRIB-NII-PRIOR> 25,666
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,525,362
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,452,788
<AVERAGE-NET-ASSETS> 2,143,498
<PER-SHARE-NAV-BEGIN> 22.60
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> (1.38)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.62
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.56
<EXPENSE-RATIO> 2.27
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 553
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 695,518,696
<INVESTMENTS-AT-VALUE> 814,030,729
<RECEIVABLES> 19,114,760
<ASSETS-OTHER> 350,734
<OTHER-ITEMS-ASSETS> 168,187
<TOTAL-ASSETS> 833,664,410
<PAYABLE-FOR-SECURITIES> 4,696,706
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,387,515
<TOTAL-LIABILITIES> 18,084,221
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 725,610,554
<SHARES-COMMON-STOCK> 2,817,977
<SHARES-COMMON-PRIOR> 3,524,169
<ACCUMULATED-NII-CURRENT> 772,084
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 27,613,162
<ACCUM-APPREC-OR-DEPREC> 116,810,713
<NET-ASSETS> 815,580,189
<DIVIDEND-INCOME> 8,798,407
<INTEREST-INCOME> 1,698,940
<OTHER-INCOME> 0
<EXPENSES-NET> 12,483,760
<NET-INVESTMENT-INCOME> (1,986,413)
<REALIZED-GAINS-CURRENT> 32,896,260
<APPREC-INCREASE-CURRENT> 36,728,856
<NET-CHANGE-FROM-OPS> 67,638,703
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 161,909
<DISTRIBUTIONS-OF-GAINS> 2,452,650
<DISTRIBUTIONS-OTHER> 1,534,383
<NUMBER-OF-SHARES-SOLD> 1,616,872
<NUMBER-OF-SHARES-REDEEMED> 2,433,763
<SHARES-REINVESTED> 110,699
<NET-CHANGE-IN-ASSETS> 67,638,703
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1,612,885
<OVERDISTRIB-NII-PRIOR> 25,666
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,525,362
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,452,788
<AVERAGE-NET-ASSETS> 54,649,155
<PER-SHARE-NAV-BEGIN> 19.40
<PER-SHARE-NII> .10
<PER-SHARE-GAIN-APPREC> 2.92
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.64
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.97
<EXPENSE-RATIO> 1.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 556
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 695,518,696
<INVESTMENTS-AT-VALUE> 814,030,729
<RECEIVABLES> 19,114,760
<ASSETS-OTHER> 350,734
<OTHER-ITEMS-ASSETS> 168,187
<TOTAL-ASSETS> 833,664,410
<PAYABLE-FOR-SECURITIES> 4,696,706
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 13,387,515
<TOTAL-LIABILITIES> 18,084,221
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 725,610,554
<SHARES-COMMON-STOCK> 152,953
<SHARES-COMMON-PRIOR> 34,830
<ACCUMULATED-NII-CURRENT> 772,084
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 27,613,162
<ACCUM-APPREC-OR-DEPREC> 116,810,713
<NET-ASSETS> 815,580,189
<DIVIDEND-INCOME> 8,798,407
<INTEREST-INCOME> 1,698,940
<OTHER-INCOME> 0
<EXPENSES-NET> 12,483,760
<NET-INVESTMENT-INCOME> (1,986,413)
<REALIZED-GAINS-CURRENT> 32,896,260
<APPREC-INCREASE-CURRENT> 36,728,856
<NET-CHANGE-FROM-OPS> 67,638,703
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 23,952
<DISTRIBUTIONS-OTHER> 185,496
<NUMBER-OF-SHARES-SOLD> 118,403
<NUMBER-OF-SHARES-REDEEMED> 11,421
<SHARES-REINVESTED> 11,141
<NET-CHANGE-IN-ASSETS> 67,638,703
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 1,612,885
<OVERDISTRIB-NII-PRIOR> 25,666
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,525,362
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,452,788
<AVERAGE-NET-ASSETS> 1,847,127
<PER-SHARE-NAV-BEGIN> 19.34
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 2.06
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.58
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.84
<EXPENSE-RATIO> 1.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 541
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 424,132,831
<INVESTMENTS-AT-VALUE> 438,668,181
<RECEIVABLES> 2,805,052
<ASSETS-OTHER> 55,163
<OTHER-ITEMS-ASSETS> 4,286
<TOTAL-ASSETS> 441,532,682
<PAYABLE-FOR-SECURITIES> 6,870,089
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,507,290
<TOTAL-LIABILITIES> 8,377,379
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 394,203,466
<SHARES-COMMON-STOCK> 15,394,383
<SHARES-COMMON-PRIOR> 10,140,493
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 24,416,487
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,535,350
<NET-ASSETS> 433,155,303
<DIVIDEND-INCOME> 2,210,842
<INTEREST-INCOME> 1,879,477
<OTHER-INCOME> 0
<EXPENSES-NET> 5,092,220
<NET-INVESTMENT-INCOME> (1,001,901)
<REALIZED-GAINS-CURRENT> 54,033,025
<APPREC-INCREASE-CURRENT> 9,929,833
<NET-CHANGE-FROM-OPS> 62,960,957
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 30,853,322
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,020,650
<NUMBER-OF-SHARES-REDEEMED> 2,963,020
<SHARES-REINVESTED> 1,196,260
<NET-CHANGE-IN-ASSETS> 217,420,497
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,385,605
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,206,411
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,819,518
<AVERAGE-NET-ASSETS> 290,919,029
<PER-SHARE-NAV-BEGIN> 20.91
<PER-SHARE-NII> .14
<PER-SHARE-GAIN-APPREC> 5.33
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.33
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.05
<EXPENSE-RATIO> 1.54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 542
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 424,132,831
<INVESTMENTS-AT-VALUE> 438,668,181
<RECEIVABLES> 2,805,052
<ASSETS-OTHER> 55,163
<OTHER-ITEMS-ASSETS> 4,286
<TOTAL-ASSETS> 441,532,682
<PAYABLE-FOR-SECURITIES> 6,870,089
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,507,290
<TOTAL-LIABILITIES> 8,377,379
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 394,203,466
<SHARES-COMMON-STOCK> 1,798,680
<SHARES-COMMON-PRIOR> 176,544
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 24,416,487
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,535,350
<NET-ASSETS> 433,155,303
<DIVIDEND-INCOME> 2,210,842
<INTEREST-INCOME> 1,879,477
<OTHER-INCOME> 0
<EXPENSES-NET> 5,092,220
<NET-INVESTMENT-INCOME> (1,011,901)
<REALIZED-GAINS-CURRENT> 54,033,025
<APPREC-INCREASE-CURRENT> 9,929,833
<NET-CHANGE-FROM-OPS> 62,960,957
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 3,473,153
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,538,327
<NUMBER-OF-SHARES-REDEEMED> 94,963
<SHARES-REINVESTED> 133,772
<NET-CHANGE-IN-ASSETS> 217,420,497
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,385,605
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,206,411
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,819,518
<AVERAGE-NET-ASSETS> 21,414,341
<PER-SHARE-NAV-BEGIN> 20.80
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 5.27
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.33
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.73
<EXPENSE-RATIO> 2.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 547
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 424,132,831
<INVESTMENTS-AT-VALUE> 438,668,181
<RECEIVABLES> 2,805,052
<ASSETS-OTHER> 55,163
<OTHER-ITEMS-ASSETS> 4,286
<TOTAL-ASSETS> 441,532,682
<PAYABLE-FOR-SECURITIES> 6,870,089
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,507,290
<TOTAL-LIABILITIES> 8,377,379
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 394,203,466
<SHARES-COMMON-STOCK> 236,148
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 24,416,487
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,535,350
<NET-ASSETS> 433,155,303
<DIVIDEND-INCOME> 2,210,842
<INTEREST-INCOME> 1,879,477
<OTHER-INCOME> 0
<EXPENSES-NET> 5,092,220
<NET-INVESTMENT-INCOME> (1,001,901)
<REALIZED-GAINS-CURRENT> 54,033,025
<APPREC-INCREASE-CURRENT> 9,929,833
<NET-CHANGE-FROM-OPS> 62,960,957
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 325,092
<DISTRIBUTIONS-OTHER> 56,555
<NUMBER-OF-SHARES-SOLD> 237,741
<NUMBER-OF-SHARES-REDEEMED> 14,344
<SHARES-REINVESTED> 12,751
<NET-CHANGE-IN-ASSETS> 217,420,497
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,385,605
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,206,411
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,819,518
<AVERAGE-NET-ASSETS> 3,480,781
<PER-SHARE-NAV-BEGIN> 24.69
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> 1.43
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.33
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.73
<EXPENSE-RATIO> 2.09
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIREYT BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 543
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-INST.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 424,132,831
<INVESTMENTS-AT-VALUE> 438,668,181
<RECEIVABLES> 2,805,052
<ASSETS-OTHER> 55,163
<OTHER-ITEMS-ASSETS> 4,286
<TOTAL-ASSETS> 441,532,682
<PAYABLE-FOR-SECURITIES> 6,870,089
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,507,290
<TOTAL-LIABILITIES> 8,377,379
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 394,203,466
<SHARES-COMMON-STOCK> 607,122
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 24,416,487
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,535,350
<NET-ASSETS> 433,155,303
<DIVIDEND-INCOME> 2,210,842
<INTEREST-INCOME> 1,879,477
<OTHER-INCOME> 0
<EXPENSES-NET> 5,092,220
<NET-INVESTMENT-INCOME> (1,001,901)
<REALIZED-GAINS-CURRENT> 54,033,025
<APPREC-INCREASE-CURRENT> 9,929,833
<NET-CHANGE-FROM-OPS> 62,960,957
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,149,003
<DISTRIBUTIONS-OTHER> 156,436
<NUMBER-OF-SHARES-SOLD> 553,727
<NUMBER-OF-SHARES-REDEEMED> 61
<SHARES-REINVESTED> 53,456
<NET-CHANGE-IN-ASSETS> 217,420,497
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,385,605
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,206,411
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,819,518
<AVERAGE-NET-ASSETS> 13,354,706
<PER-SHARE-NAV-BEGIN> 24.91
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 1.48
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.33
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.09
<EXPENSE-RATIO> 1.16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 546
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-SERV.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 424,132,831
<INVESTMENTS-AT-VALUE> 438,668,181
<RECEIVABLES> 2,805,052
<ASSETS-OTHER> 55,163
<OTHER-ITEMS-ASSETS> 4,286
<TOTAL-ASSETS> 441,532,682
<PAYABLE-FOR-SECURITIES> 6,870,089
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,507,290
<TOTAL-LIABILITIES> 8,377,379
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 394,203,466
<SHARES-COMMON-STOCK> 70
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 24,416,487
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,535,350
<NET-ASSETS> 433,155,303
<DIVIDEND-INCOME> 2,210,842
<INTEREST-INCOME> 1,879,477
<OTHER-INCOME> 0
<EXPENSES-NET> 5,092,220
<NET-INVESTMENT-INCOME> (1,001,901)
<REALIZED-GAINS-CURRENT> 54,033,025
<APPREC-INCREASE-CURRENT> 9,929,833
<NET-CHANGE-FROM-OPS> 62,960,957
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 130
<DISTRIBUTIONS-OTHER> 19
<NUMBER-OF-SHARES-SOLD> 64
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 6
<NET-CHANGE-IN-ASSETS> 217,420,497
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,385,605
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,206,411
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,819,518
<AVERAGE-NET-ASSETS> 1,633
<PER-SHARE-NAV-BEGIN> 24.91
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 1.48
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.33
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.05
<EXPENSE-RATIO> 1.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 531
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 944,367,127
<INVESTMENTS-AT-VALUE> 1,307,391,418
<RECEIVABLES> 5,956,700
<ASSETS-OTHER> 16,729
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,313,462,349
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,381,656
<TOTAL-LIABILITIES> 3,381,656
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 943,792,262
<SHARES-COMMON-STOCK> 67,981,133
<SHARES-COMMON-PRIOR> 54,480,662
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,264,140
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 363,024,291
<NET-ASSETS> 1,310,080,693
<DIVIDEND-INCOME> 14,709,637
<INTEREST-INCOME> 1,485,991
<OTHER-INCOME> 0
<EXPENSES-NET> (15,449,381)
<NET-INVESTMENT-INCOME> 746,247
<REALIZED-GAINS-CURRENT> 171,487,631
<APPREC-INCREASE-CURRENT> 110,348,766
<NET-CHANGE-FROM-OPS> 282,582,644
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,509,637)
<DISTRIBUTIONS-OF-GAINS> (175,320,995)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 268,104,441
<NUMBER-OF-SHARES-REDEEMED> (150,961,069)
<SHARES-REINVESTED> 169,448,560
<NET-CHANGE-IN-ASSETS> 286,591,932
<ACCUMULATED-NII-PRIOR> 3,918,068
<ACCUMULATED-GAINS-PRIOR> 81,054,296
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,913,224
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,127,751
<AVERAGE-NET-ASSETS> 1,091,322,448
<PER-SHARE-NAV-BEGIN> 16.73
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 4.78
<PER-SHARE-DIVIDEND> (.02)
<PER-SHARE-DISTRIBUTIONS> (3.03)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.48
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 532
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 944,367,127
<INVESTMENTS-AT-VALUE> 1,307,391,418
<RECEIVABLES> 5,956,700
<ASSETS-OTHER> 16,729
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,313,462,349
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,381,656
<TOTAL-LIABILITIES> 3,381,656
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 943,792,262
<SHARES-COMMON-STOCK> 2,234,279
<SHARES-COMMON-PRIOR> 57,043
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,264,140
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 363,024,291
<NET-ASSETS> 1,310,080,693
<DIVIDEND-INCOME> 14,709,637
<INTEREST-INCOME> 1,485,991
<OTHER-INCOME> 0
<EXPENSES-NET> (15,449,381)
<NET-INVESTMENT-INCOME> 746,247
<REALIZED-GAINS-CURRENT> 171,487,631
<APPREC-INCREASE-CURRENT> 110,348,766
<NET-CHANGE-FROM-OPS> 282,582,644
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (4,612,854)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 268,104,441
<NUMBER-OF-SHARES-REDEEMED> (150,961,069)
<SHARES-REINVESTED> 169,448,560
<NET-CHANGE-IN-ASSETS> 286,591,932
<ACCUMULATED-NII-PRIOR> 3,918,068
<ACCUMULATED-GAINS-PRIOR> 81,054,296
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,913,224
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,127,751
<AVERAGE-NET-ASSETS> 1,091,322,448
<PER-SHARE-NAV-BEGIN> 16.67
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 4.61
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.27
<EXPENSE-RATIO> 2.18
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 537
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 944,367,127
<INVESTMENTS-AT-VALUE> 1,307,391,418
<RECEIVABLES> 5,956,700
<ASSETS-OTHER> 16,729
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,313,462,349
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,381,656
<TOTAL-LIABILITIES> 3,381,656
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 943,792,262
<SHARES-COMMON-STOCK> 295,829
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,264,140
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 363,024,291
<NET-ASSETS> 1,310,080,693
<DIVIDEND-INCOME> 14,709,637
<INTEREST-INCOME> 1,485,991
<OTHER-INCOME> 0
<EXPENSES-NET> (15,449,381)
<NET-INVESTMENT-INCOME> 746,247
<REALIZED-GAINS-CURRENT> 171,487,631
<APPREC-INCREASE-CURRENT> 110,348,766
<NET-CHANGE-FROM-OPS> 282,582,644
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,981)
<DISTRIBUTIONS-OF-GAINS> (595,780)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 268,104,441
<NUMBER-OF-SHARES-REDEEMED> (150,961,069)
<SHARES-REINVESTED> 169,448,560
<NET-CHANGE-IN-ASSETS> 286,591,932
<ACCUMULATED-NII-PRIOR> 3,918,068
<ACCUMULATED-GAINS-PRIOR> 81,054,296
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,913,224
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,127,751
<AVERAGE-NET-ASSETS> 1,091,322,448
<PER-SHARE-NAV-BEGIN> 19.73
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 1.60
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> (.47)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.24
<EXPENSE-RATIO> 2.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 533
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-INST.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 944,367,127
<INVESTMENTS-AT-VALUE> 1,307,391,418
<RECEIVABLES> 5,956,700
<ASSETS-OTHER> 16,729
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,313,462,349
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,381,656
<TOTAL-LIABILITIES> 3,381,656
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 943,792,262
<SHARES-COMMON-STOCK> 393,638
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,264,140
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 363,024,291
<NET-ASSETS> 1,310,080,693
<DIVIDEND-INCOME> 14,709,637
<INTEREST-INCOME> 1,485,991
<OTHER-INCOME> 0
<EXPENSES-NET> (15,449,381)
<NET-INVESTMENT-INCOME> 746,247
<REALIZED-GAINS-CURRENT> 171,487,631
<APPREC-INCREASE-CURRENT> 110,348,766
<NET-CHANGE-FROM-OPS> 282,582,644
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (25,870)
<DISTRIBUTIONS-OF-GAINS> (887,545)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 268,104,441
<NUMBER-OF-SHARES-REDEEMED> (150,961,069)
<SHARES-REINVESTED> 169,448,560
<NET-CHANGE-IN-ASSETS> 286,591,932
<ACCUMULATED-NII-PRIOR> 3,918,068
<ACCUMULATED-GAINS-PRIOR> 81,054,296
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,913,224
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,127,751
<AVERAGE-NET-ASSETS> 1,091,322,448
<PER-SHARE-NAV-BEGIN> 19.88
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 1.66
<PER-SHARE-DIVIDEND> (.08)
<PER-SHARE-DISTRIBUTIONS> (.41)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.45
<EXPENSE-RATIO> 1.16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 536
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-SERV.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 944,367,127
<INVESTMENTS-AT-VALUE> 1,307,391,418
<RECEIVABLES> 5,956,700
<ASSETS-OTHER> 16,729
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,313,462,349
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,381,656
<TOTAL-LIABILITIES> 3,381,656
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 943,792,262
<SHARES-COMMON-STOCK> 94
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,264,140
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 363,024,291
<NET-ASSETS> 1,310,080,693
<DIVIDEND-INCOME> 14,709,637
<INTEREST-INCOME> 1,485,991
<OTHER-INCOME> 0
<EXPENSES-NET> (15,449,381)
<NET-INVESTMENT-INCOME> 746,247
<REALIZED-GAINS-CURRENT> 171,487,631
<APPREC-INCREASE-CURRENT> 110,348,766
<NET-CHANGE-FROM-OPS> 282,582,644
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4)
<DISTRIBUTIONS-OF-GAINS> (244)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 268,104,441
<NUMBER-OF-SHARES-REDEEMED> (150,961,069)
<SHARES-REINVESTED> 169,448,560
<NET-CHANGE-IN-ASSETS> 286,591,932
<ACCUMULATED-NII-PRIOR> 3,918,068
<ACCUMULATED-GAINS-PRIOR> 81,054,296
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,913,224
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 18,127,751
<AVERAGE-NET-ASSETS> 1,091,322,448
<PER-SHARE-NAV-BEGIN> 19.88
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 1.66
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> (.76)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.46
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 571
<NAME> GOLDMAN SACHS MID-CAP EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 323,999,308
<INVESTMENTS-AT-VALUE> 357,177,734
<RECEIVABLES> 7,959,036
<ASSETS-OTHER> 182,622
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,362,282
<PAYABLE-FOR-SECURITIES> 2,176,758
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 961,909
<TOTAL-LIABILITIES> 3,138,667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 314,226,803
<SHARES-COMMON-STOCK> 4,191,937
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 130,093
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,688,293
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,178,426
<NET-ASSETS> 362,223,615
<DIVIDEND-INCOME> 2,931,678
<INTEREST-INCOME> 680,409
<OTHER-INCOME> 0
<EXPENSES-NET> (2,086,887)
<NET-INVESTMENT-INCOME> 1,525,200
<REALIZED-GAINS-CURRENT> 33,414,228
<APPREC-INCREASE-CURRENT> 11,262,563
<NET-CHANGE-FROM-OPS> 46,201,991
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (152,691)
<DISTRIBUTIONS-OF-GAINS> (2,003,140)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 219,499,016
<NUMBER-OF-SHARES-REDEEMED> (48,291,135)
<SHARES-REINVESTED> 27,184,097
<NET-CHANGE-IN-ASSETS> 198,391,978
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,502,660
<OVERDISTRIB-NII-PRIOR> (25,142)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,653,946
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,351,265
<AVERAGE-NET-ASSETS> 220,525,983
<PER-SHARE-NAV-BEGIN> 23.63
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> .76
<PER-SHARE-DIVIDEND> (.10)
<PER-SHARE-DISTRIBUTIONS> (2.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.61
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED DECEMBER 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 572
<NAME> GOLDMAN SACHS MID-CAP EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 323,999,308
<INVESTMENTS-AT-VALUE> 357,177,734
<RECEIVABLES> 7,959,036
<ASSETS-OTHER> 182,622
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,362,282
<PAYABLE-FOR-SECURITIES> 2,176,758
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 961,909
<TOTAL-LIABILITIES> 3,138,667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 314,226,803
<SHARES-COMMON-STOCK> 1,332,295
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 130,093
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,688,293
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,178,426
<NET-ASSETS> 362,223,615
<DIVIDEND-INCOME> 2,931,678
<INTEREST-INCOME> 680,409
<OTHER-INCOME> 0
<EXPENSES-NET> (2,086,887)
<NET-INVESTMENT-INCOME> 1,525,200
<REALIZED-GAINS-CURRENT> 33,414,228
<APPREC-INCREASE-CURRENT> 11,262,563
<NET-CHANGE-FROM-OPS> 46,201,991
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (36,518)
<DISTRIBUTIONS-OF-GAINS> (739,050)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 219,499,016
<NUMBER-OF-SHARES-REDEEMED> (48,291,135)
<SHARES-REINVESTED> 27,184,097
<NET-CHANGE-IN-ASSETS> 198,391,978
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,502,660
<OVERDISTRIB-NII-PRIOR> (25,142)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,653,946
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,351,265
<AVERAGE-NET-ASSETS> 220,525,983
<PER-SHARE-NAV-BEGIN> 23.63
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> .74
<PER-SHARE-DIVIDEND> (.09)
<PER-SHARE-DISTRIBUTIONS> (2.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.57
<EXPENSE-RATIO> 1.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 577
<NAME> GOLDMAN SACHS MID-CAP EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 323,999,308
<INVESTMENTS-AT-VALUE> 357,177,734
<RECEIVABLES> 7,959,036
<ASSETS-OTHER> 182,622
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,362,282
<PAYABLE-FOR-SECURITIES> 2,176,758
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 961,909
<TOTAL-LIABILITIES> 3,318,667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 314,226,803
<SHARES-COMMON-STOCK> 298,521
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 130,093
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,688,293
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,178,426
<NET-ASSETS> 362,223,615
<DIVIDEND-INCOME> 2,931,678
<INTEREST-INCOME> 680,409
<OTHER-INCOME> 0
<EXPENSES-NET> (2,086,887)
<NET-INVESTMENT-INCOME> 1,525,200
<REALIZED-GAINS-CURRENT> 33,414,228
<APPREC-INCREASE-CURRENT> 11,262,563
<NET-CHANGE-FROM-OPS> 46,201,991
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,184)
<DISTRIBUTIONS-OF-GAINS> (118,344)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 219,499,016
<NUMBER-OF-SHARES-REDEEMED> (48,291,135)
<SHARES-REINVESTED> 27,184,097
<NET-CHANGE-IN-ASSETS> 198,391,978
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,502,660
<OVERDISTRIB-NII-PRIOR> (25,142)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,653,946
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,351,265
<AVERAGE-NET-ASSETS> 220,525,983
<PER-SHARE-NAV-BEGIN> 23.63
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> .76
<PER-SHARE-DIVIDEND> (.09)
<PER-SHARE-DISTRIBUTIONS> (2.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.59
<EXPENSE-RATIO> 1.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 573
<NAME> GOLDMAN SACHS MID-CAP EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 323,999,308
<INVESTMENTS-AT-VALUE> 357,177,734
<RECEIVABLES> 7,959,036
<ASSETS-OTHER> 182,622
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,362,282
<PAYABLE-FOR-SECURITIES> 2,176,758
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 961,909
<TOTAL-LIABILITIES> 3,138,667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 314,226,803
<SHARES-COMMON-STOCK> 10,921,229
<SHARES-COMMON-PRIOR> 7,755,774
<ACCUMULATED-NII-CURRENT> 130,093
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,688,293
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,178,426
<NET-ASSETS> 362,223,615
<DIVIDEND-INCOME> 2,931,678
<INTEREST-INCOME> 680,409
<OTHER-INCOME> 0
<EXPENSES-NET> (2,086,887)
<NET-INVESTMENT-INCOME> 1,525,200
<REALIZED-GAINS-CURRENT> 33,414,228
<APPREC-INCREASE-CURRENT> 11,262,563
<NET-CHANGE-FROM-OPS> 46,201,991
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,204,893)
<DISTRIBUTIONS-OF-GAINS> (23,361,534)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 219,499,016
<NUMBER-OF-SHARES-REDEEMED> (48,291,135)
<SHARES-REINVESTED> 27,184,097
<NET-CHANGE-IN-ASSETS> 198,391,978
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,502,660
<OVERDISTRIB-NII-PRIOR> (25,142)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,653,946
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,351,265
<AVERAGE-NET-ASSETS> 220,525,983
<PER-SHARE-NAV-BEGIN> 18.73
<PER-SHARE-NII> .16
<PER-SHARE-GAIN-APPREC> 5.66
<PER-SHARE-DIVIDEND> (.13)
<PER-SHARE-DISTRIBUTIONS> (2.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.65
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED INITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 576
<NAME> GOLDMAN SACHS MID-CAP EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> JUL-18-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 323,999,308
<INVESTMENTS-AT-VALUE> 357,177,734
<RECEIVABLES> 7,959,036
<ASSETS-OTHER> 182,622
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 365,362,282
<PAYABLE-FOR-SECURITIES> 2,176,758
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 961,909
<TOTAL-LIABILITIES> 3,138,667
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 314,226,803
<SHARES-COMMON-STOCK> 360
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 130,093
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 14,688,293
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,178,426
<NET-ASSETS> 362,223,615
<DIVIDEND-INCOME> 2,931,678
<INTEREST-INCOME> 680,409
<OTHER-INCOME> 0
<EXPENSES-NET> (2,086,887)
<NET-INVESTMENT-INCOME> 1,525,200
<REALIZED-GAINS-CURRENT> 33,414,228
<APPREC-INCREASE-CURRENT> 11,262,563
<NET-CHANGE-FROM-OPS> 46,201,991
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (23)
<DISTRIBUTIONS-OF-GAINS> (307)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 219,499,016
<NUMBER-OF-SHARES-REDEEMED> (48,291,135)
<SHARES-REINVESTED> 27,184,097
<NET-CHANGE-IN-ASSETS> 198,391,978
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 7,502,660
<OVERDISTRIB-NII-PRIOR> (25,142)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,653,946
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,351,265
<AVERAGE-NET-ASSETS> 220,525,983
<PER-SHARE-NAV-BEGIN> 23.01
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> 1.40
<PER-SHARE-DIVIDEND> (.11)
<PER-SHARE-DISTRIBUTIONS> (2.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.62
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 521
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 1,438,070,463
<INVESTMENTS-AT-VALUE> 1,582,875,373
<RECEIVABLES> 32,344,628
<ASSETS-OTHER> 78,206
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,615,298,207
<PAYABLE-FOR-SECURITIES> 9,325,328
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,771,748
<TOTAL-LIABILITIES> 14,097,076
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,396,713,617
<SHARES-COMMON-STOCK> 46,918,649
<SHARES-COMMON-PRIOR> 23,131,801
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (614,031)
<ACCUMULATED-NET-GAINS> 60,296,635
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 144,804,910
<NET-ASSETS> 1,601,201,131
<DIVIDEND-INCOME> 15,481,524
<INTEREST-INCOME> 2,863,267
<OTHER-INCOME> 0
<EXPENSES-NET> (14,821,672)
<NET-INVESTMENT-INCOME> 3,523,119
<REALIZED-GAINS-CURRENT> 172,955,906
<APPREC-INCREASE-CURRENT> 19,463,359
<NET-CHANGE-FROM-OPS> 195,942,384
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,826,646)
<DISTRIBUTIONS-OF-GAINS> (101,878,845)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918,965,833
<NUMBER-OF-SHARES-REDEEMED> (142,245,348)
<SHARES-REINVESTED> 127,012,752
<NET-CHANGE-IN-ASSETS> 965,385,139
<ACCUMULATED-NII-PRIOR> 1,608,067
<ACCUMULATED-GAINS-PRIOR> 28,763,093
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,740,380
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16,423,008
<AVERAGE-NET-ASSETS> 1,105,768,628
<PER-SHARE-NAV-BEGIN> 23.18
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> 5.27
<PER-SHARE-DIVIDEND> (.11)
<PER-SHARE-DISTRIBUTIONS> (2.52)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.93
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 522
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 1,438,070,463
<INVESTMENTS-AT-VALUE> 1,582,875,373
<RECEIVABLES> 32,344,628
<ASSETS-OTHER> 78,206
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,615,298,207
<PAYABLE-FOR-SECURITIES> 9,325,328
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,771,748
<TOTAL-LIABILITIES> 14,097,076
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,396,713,617
<SHARES-COMMON-STOCK> 11,963,607
<SHARES-COMMON-PRIOR> 106,312
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (614,031)
<ACCUMULATED-NET-GAINS> 60,296,635
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 144,804,910
<NET-ASSETS> 1,601,201,131
<DIVIDEND-INCOME> 15,481,524
<INTEREST-INCOME> 2,863,267
<OTHER-INCOME> 0
<EXPENSES-NET> (14,821,672)
<NET-INVESTMENT-INCOME> 3,523,119
<REALIZED-GAINS-CURRENT> 172,955,906
<APPREC-INCREASE-CURRENT> 19,463,359
<NET-CHANGE-FROM-OPS> 195,942,384
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (72,045)
<DISTRIBUTIONS-OF-GAINS> (23,537,191)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918,965,833
<NUMBER-OF-SHARES-REDEEMED> (142,245,348)
<SHARES-REINVESTED> 127,012,752
<NET-CHANGE-IN-ASSETS> 965,385,139
<ACCUMULATED-NII-PRIOR> 1,608,067
<ACCUMULATED-GAINS-PRIOR> 28,763,093
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,740,380
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16,423,008
<AVERAGE-NET-ASSETS> 1,105,768,628
<PER-SHARE-NAV-BEGIN> 23.10
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 5.14
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> (2.45)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.73
<EXPENSE-RATIO> 1.94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 527
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 1,438,070,463
<INVESTMENTS-AT-VALUE> 1,582,875,373
<RECEIVABLES> 32,344,628
<ASSETS-OTHER> 78,206
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,615,298,207
<PAYABLE-FOR-SECURITIES> 9,325,328
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,771,748
<TOTAL-LIABILITIES> 14,097,076
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,396,713,617
<SHARES-COMMON-STOCK> 1,233,014
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (614,031)
<ACCUMULATED-NET-GAINS> 60,296,635
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 144,804,910
<NET-ASSETS> 1,601,201,131
<DIVIDEND-INCOME> 15,481,524
<INTEREST-INCOME> 2,863,267
<OTHER-INCOME> 0
<EXPENSES-NET> (14,821,672)
<NET-INVESTMENT-INCOME> 3,523,119
<REALIZED-GAINS-CURRENT> 172,955,906
<APPREC-INCREASE-CURRENT> 19,463,359
<NET-CHANGE-FROM-OPS> 195,942,384
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,576)
<DISTRIBUTIONS-OF-GAINS> (2,142,196)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918,965,833
<NUMBER-OF-SHARES-REDEEMED> (142,245,348)
<SHARES-REINVESTED> 127,012,752
<NET-CHANGE-IN-ASSETS> 965,385,139
<ACCUMULATED-NII-PRIOR> 1,608,067
<ACCUMULATED-GAINS-PRIOR> 28,763,093
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,740,380
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16,423,008
<AVERAGE-NET-ASSETS> 1,105,768,628
<PER-SHARE-NAV-BEGIN> 28.20
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .06
<PER-SHARE-DIVIDEND> (.03)
<PER-SHARE-DISTRIBUTIONS> (1.42)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.70
<EXPENSE-RATIO> 1.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 523
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-INST.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 1,438,070,463
<INVESTMENTS-AT-VALUE> 1,582,875,373
<RECEIVABLES> 32,344,628
<ASSETS-OTHER> 78,206
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,615,298,207
<PAYABLE-FOR-SECURITIES> 9,325,328
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,771,748
<TOTAL-LIABILITIES> 14,097,076
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,396,713,617
<SHARES-COMMON-STOCK> 1,396,153
<SHARES-COMMON-PRIOR> 624
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (614,031)
<ACCUMULATED-NET-GAINS> 60,296,635
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 144,804,910
<NET-ASSETS> 1,601,201,131
<DIVIDEND-INCOME> 15,481,524
<INTEREST-INCOME> 2,863,267
<OTHER-INCOME> 0
<EXPENSES-NET> (14,821,672)
<NET-INVESTMENT-INCOME> 3,523,119
<REALIZED-GAINS-CURRENT> 172,955,906
<APPREC-INCREASE-CURRENT> 19,463,359
<NET-CHANGE-FROM-OPS> 195,942,384
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (92,867)
<DISTRIBUTIONS-OF-GAINS> (1,915,213)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918,965,833
<NUMBER-OF-SHARES-REDEEMED> (142,245,348)
<SHARES-REINVESTED> 127,012,752
<NET-CHANGE-IN-ASSETS> 965,385,139
<ACCUMULATED-NII-PRIOR> 1,608,067
<ACCUMULATED-GAINS-PRIOR> 28,763,093
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,740,380
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16,423,008
<AVERAGE-NET-ASSETS> 1,105,768,628
<PER-SHARE-NAV-BEGIN> 23.19
<PER-SHARE-NII> .27
<PER-SHARE-GAIN-APPREC> 5.23
<PER-SHARE-DIVIDEND> (.22)
<PER-SHARE-DISTRIBUTIONS> (.24)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.95
<EXPENSE-RATIO> .83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 526
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-SERV.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 1,438,070,463
<INVESTMENTS-AT-VALUE> 1,582,875,373
<RECEIVABLES> 32,344,628
<ASSETS-OTHER> 78,206
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,165,298,207
<PAYABLE-FOR-SECURITIES> 9,325,328
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,771,748
<TOTAL-LIABILITIES> 14,097,076
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,396,713,617
<SHARES-COMMON-STOCK> 343,095
<SHARES-COMMON-PRIOR> 30,041
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (614,031)
<ACCUMULATED-NET-GAINS> 60,296,635
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 144,804,910
<NET-ASSETS> 1,601,201,131
<DIVIDEND-INCOME> 15,481,524
<INTEREST-INCOME> 2,863,267
<OTHER-INCOME> 0
<EXPENSES-NET> (14,821,672)
<NET-INVESTMENT-INCOME> 3,523,119
<REALIZED-GAINS-CURRENT> 172,955,906
<APPREC-INCREASE-CURRENT> 19,463,359
<NET-CHANGE-FROM-OPS> 195,942,384
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (20,774)
<DISTRIBUTIONS-OF-GAINS> (761,129)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 918,965,833
<NUMBER-OF-SHARES-REDEEMED> (142,245,348)
<SHARES-REINVESTED> 127,012,752
<NET-CHANGE-IN-ASSETS> 965,385,139
<ACCUMULATED-NII-PRIOR> 1,608,067
<ACCUMULATED-GAINS-PRIOR> 28,763,093
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,740,380
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16,423,008
<AVERAGE-NET-ASSETS> 1,105,768,628
<PER-SHARE-NAV-BEGIN> 23.17
<PER-SHARE-NII> .14
<PER-SHARE-GAIN-APPREC> 5.23
<PER-SHARE-DIVIDEND> (.10)
<PER-SHARE-DISTRIBUTIONS> (2.52)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.92
<EXPENSE-RATIO> 1.32
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 561
<NAME> GOLDMAN SACHS ASIA GROWTH FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 110,553,383
<INVESTMENTS-AT-VALUE> 84,920,018
<RECEIVABLES> 4,639,905
<ASSETS-OTHER> 14,334
<OTHER-ITEMS-ASSETS> 3,678,542
<TOTAL-ASSETS> 93,252,799
<PAYABLE-FOR-SECURITIES> 134,703
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,012,569
<TOTAL-LIABILITIES> 1,147,272
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 191,631,821
<SHARES-COMMON-STOCK> 10,430,282
<SHARES-COMMON-PRIOR> 16,122,122
<ACCUMULATED-NII-CURRENT> 137,887
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 73,629,726
<ACCUM-APPREC-OR-DEPREC> (26,034,455)
<NET-ASSETS> 92,105,527
<DIVIDEND-INCOME> 3,567,537
<INTEREST-INCOME> 909,396
<OTHER-INCOME> 0
<EXPENSES-NET> 3,777,890
<NET-INVESTMENT-INCOME> 699,043
<REALIZED-GAINS-CURRENT> (57,330,108)
<APPREC-INCREASE-CURRENT> (57,053,599)
<NET-CHANGE-FROM-OPS> (113,684,664)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (455,983)
<NUMBER-OF-SHARES-SOLD> 7,223,511
<NUMBER-OF-SHARES-REDEEMED> 12,959,028
<SHARES-REINVESTED> 43,677
<NET-CHANGE-IN-ASSETS> (187,470,404)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (1,316,323)
<OVERDIST-NET-GAINS-PRIOR> (16,439,588)
<GROSS-ADVISORY-FEES> 2,179,299
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,290,994
<AVERAGE-NET-ASSETS> 205,423,844
<PER-SHARE-NAV-BEGIN> 16.31
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (7.90)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.38
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 562
<NAME> GOLDMAN SACHS ASIA GROWTH FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 110,553,383
<INVESTMENTS-AT-VALUE> 84,920,018
<RECEIVABLES> 4,639,905
<ASSETS-OTHER> 14,334
<OTHER-ITEMS-ASSETS> 3,678,542
<TOTAL-ASSETS> 93,252,799
<PAYABLE-FOR-SECURITIES> 134,703
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,012,569
<TOTAL-LIABILITIES> 1,147,272
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 191,631,821
<SHARES-COMMON-STOCK> 404,337
<SHARES-COMMON-PRIOR> 206,387
<ACCUMULATED-NII-CURRENT> 137,887
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 73,629,726
<ACCUM-APPREC-OR-DEPREC> (26,034,455)
<NET-ASSETS> 92,105,527
<DIVIDEND-INCOME> 3,567,537
<INTEREST-INCOME> 909,396
<OTHER-INCOME> 0
<EXPENSES-NET> 3,777,890
<NET-INVESTMENT-INCOME> 699,043
<REALIZED-GAINS-CURRENT> (57,330,108)
<APPREC-INCREASE-CURRENT> (57,053,599)
<NET-CHANGE-FROM-OPS> (113,684,664)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (10,435)
<NUMBER-OF-SHARES-SOLD> 303,767
<NUMBER-OF-SHARES-REDEEMED> 106,535
<SHARES-REINVESTED> 718
<NET-CHANGE-IN-ASSETS> (187,470,404)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (1,316,323)
<OVERDIST-NET-GAINS-PRIOR> (16,439,588)
<GROSS-ADVISORY-FEES> 2,179,299
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,290,994
<AVERAGE-NET-ASSETS> 3,806,733
<PER-SHARE-NAV-BEGIN> 16.24
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> (7.91)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.31
<EXPENSE-RATIO> 2.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 567
<NAME> GOLDMAN SACHS ASIA GROWTH FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1998
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 110,553,383
<INVESTMENTS-AT-VALUE> 84,920,018
<RECEIVABLES> 4,639,905
<ASSETS-OTHER> 14,334
<OTHER-ITEMS-ASSETS> 3,678,542
<TOTAL-ASSETS> 93,252,799
<PAYABLE-FOR-SECURITIES> 134,703
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,012,569
<TOTAL-LIABILITIES> 1,147,272
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 191,631,821
<SHARES-COMMON-STOCK> 52,511
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 137,887
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 73,629,726
<ACCUM-APPREC-OR-DEPREC> (26,034,455)
<NET-ASSETS> 92,105,527
<DIVIDEND-INCOME> 3,567,537
<INTEREST-INCOME> 909,396
<OTHER-INCOME> 0
<EXPENSES-NET> 3,777,890
<NET-INVESTMENT-INCOME> 699,043
<REALIZED-GAINS-CURRENT> (57,330,108)
<APPREC-INCREASE-CURRENT> (57,053,599)
<NET-CHANGE-FROM-OPS> (113,684,664)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (617)
<NUMBER-OF-SHARES-SOLD> 70,257
<NUMBER-OF-SHARES-REDEEMED> 17,794
<SHARES-REINVESTED> 48
<NET-CHANGE-IN-ASSETS> (817,470,404)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (1,316,323)
<OVERDIST-NET-GAINS-PRIOR> (16,439,588)
<GROSS-ADVISORY-FEES> 2,179,299
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,290,994
<AVERAGE-NET-ASSETS> 817,142
<PER-SHARE-NAV-BEGIN> 15.73
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> (7.42)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.29
<EXPENSE-RATIO> 2.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 563
<NAME> GOLDMAN SACHS ASIA GROWTH FUND-INST.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1998
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 110,553,383
<INVESTMENTS-AT-VALUE> 84,920,018
<RECEIVABLES> 4,639,905
<ASSETS-OTHER> 14,334
<OTHER-ITEMS-ASSETS> 3,678,542
<TOTAL-ASSETS> 93,252,799
<PAYABLE-FOR-SECURITIES> 134,703
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,012,569
<TOTAL-LIABILITIES> 1,147,272
<SENIOR-EQUITY> 091,631,821
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 103,588
<SHARES-COMMON-PRIOR> 815,499
<ACCUMULATED-NII-CURRENT> 137,887
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 73,629,726
<ACCUM-APPREC-OR-DEPREC> (26,034,455)
<NET-ASSETS> 92,105,527
<DIVIDEND-INCOME> 3,567,537
<INTEREST-INCOME> 909,396
<OTHER-INCOME> 0
<EXPENSES-NET> 3,777,890
<NET-INVESTMENT-INCOME> 699,043
<REALIZED-GAINS-CURRENT> (57,330,108)
<APPREC-INCREASE-CURRENT> (57,053,599)
<NET-CHANGE-FROM-OPS> (113,684,664)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (22,635)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 163,318
<NUMBER-OF-SHARES-REDEEMED> 875,506
<SHARES-REINVESTED> 277
<NET-CHANGE-IN-ASSETS> (817,470,404)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> (1,316,323)
<OVERDIST-NET-GAINS-PRIOR> (16,439,588)
<GROSS-ADVISORY-FEES> 2,179,299
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,290,994
<AVERAGE-NET-ASSETS> 8,318,773
<PER-SHARE-NAV-BEGIN> 16.33
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 7.96
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .03
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.44
<EXPENSE-RATIO> 1.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 511
<NAME> GOLDMAN SACHS BALANCED FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 206,265,978
<INVESTMENTS-AT-VALUE> 217,081,749
<RECEIVABLES> 14,631,666
<ASSETS-OTHER> 103,966
<OTHER-ITEMS-ASSETS> 30,564
<TOTAL-ASSETS> 231,847,945
<PAYABLE-FOR-SECURITIES> 25,762,034
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,577,666
<TOTAL-LIABILITIES> 27,339,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 188,861,586
<SHARES-COMMON-STOCK> 8,064,620
<SHARES-COMMON-PRIOR> 4,336,101
<ACCUMULATED-NII-CURRENT> 410,404
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,386,005
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,850,250
<NET-ASSETS> 204,508,245
<DIVIDEND-INCOME> 1,068,241
<INTEREST-INCOME> 4,207,232
<OTHER-INCOME> 0
<EXPENSES-NET> 1,434,281
<NET-INVESTMENT-INCOME> 3,841,192
<REALIZED-GAINS-CURRENT> 13,321,612
<APPREC-INCREASE-CURRENT> 2,251,255
<NET-CHANGE-FROM-OPS> 19,414,059
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,280,878
<DISTRIBUTIONS-OF-GAINS> 8,192,911
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,149,265
<NUMBER-OF-SHARES-REDEEMED> 942,243
<SHARES-REINVESTED> 521,497
<NET-CHANGE-IN-ASSETS> 120,988,118
<ACCUMULATED-NII-PRIOR> 180,204
<ACCUMULATED-GAINS-PRIOR> 990,062
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 870,444
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,156,337
<AVERAGE-NET-ASSETS> 120,558,886
<PER-SHARE-NAV-BEGIN> 18.78
<PER-SHARE-NII> .57
<PER-SHARE-GAIN-APPREC> 2.66
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.72
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.29
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 512
<NAME> GOLDMAN SACHS BALANCED FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 206,265,978
<INVESTMENTS-AT-VALUE> 217,081,749
<RECEIVABLES> 14,631,666
<ASSETS-OTHER> 103,966
<OTHER-ITEMS-ASSETS> 30,564
<TOTAL-ASSETS> 231,847,945
<PAYABLE-FOR-SECURITIES> 25,762,034
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,577,666
<TOTAL-LIABILITIES> 27,339,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 188,861,586
<SHARES-COMMON-STOCK> 1,170,246
<SHARES-COMMON-PRIOR> 112,660
<ACCUMULATED-NII-CURRENT> 410,404
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,386,005
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,850,250
<NET-ASSETS> 204,508,245
<DIVIDEND-INCOME> 1,068,241
<INTEREST-INCOME> 4,207,232
<OTHER-INCOME> 0
<EXPENSES-NET> 1,434,281
<NET-INVESTMENT-INCOME> 3,841,192
<REALIZED-GAINS-CURRENT> 13,321,612
<APPREC-INCREASE-CURRENT> 2,251,255
<NET-CHANGE-FROM-OPS> 19,414,059
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 212,816
<DISTRIBUTIONS-OF-GAINS> 995,615
<DISTRIBUTIONS-OTHER> 503
<NUMBER-OF-SHARES-SOLD> 1,042,755
<NUMBER-OF-SHARES-REDEEMED> 41,140
<SHARES-REINVESTED> 55,971
<NET-CHANGE-IN-ASSETS> 120,988,118
<ACCUMULATED-NII-PRIOR> 180,204
<ACCUMULATED-GAINS-PRIOR> 990,062
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 870,444
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,156,337
<AVERAGE-NET-ASSETS> 9,942,537
<PER-SHARE-NAV-BEGIN> 18.73
<PER-SHARE-NII> .50
<PER-SHARE-GAIN-APPREC> 2.57
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.60
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.20
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 517
<NAME> GOLDMAN SACHS BALANCED FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 206,265,978
<INVESTMENTS-AT-VALUE> 217,081,749
<RECEIVABLES> 14,631,666
<ASSETS-OTHER> 103,966
<OTHER-ITEMS-ASSETS> 30,564
<TOTAL-ASSETS> 231,847,945
<PAYABLE-FOR-SECURITIES> 25,762,034
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,577,666
<TOTAL-LIABILITIES> 27,339,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 188,861,586
<SHARES-COMMON-STOCK> 438,867
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 410,404
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,386,005
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,850,250
<NET-ASSETS> 204,508,245
<DIVIDEND-INCOME> 1,068,241
<INTEREST-INCOME> 4,207,232
<OTHER-INCOME> 0
<EXPENSES-NET> 1,434,281
<NET-INVESTMENT-INCOME> 3,841,192
<REALIZED-GAINS-CURRENT> 13,321,612
<APPREC-INCREASE-CURRENT> 2,251,255
<NET-CHANGE-FROM-OPS> 19,414,059
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 37,737
<DISTRIBUTIONS-OF-GAINS> 180,689
<DISTRIBUTIONS-OTHER> 152,487
<NUMBER-OF-SHARES-SOLD> 441,362
<NUMBER-OF-SHARES-REDEEMED> 17,257
<SHARES-REINVESTED> 14,762
<NET-CHANGE-IN-ASSETS> 120,988,118
<ACCUMULATED-NII-PRIOR> 180,204
<ACCUMULATED-GAINS-PRIOR> 990,062
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 870,444
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,156,337
<AVERAGE-NET-ASSETS> 3,804,700
<PER-SHARE-NAV-BEGIN> 21.10
<PER-SHARE-NII> .25
<PER-SHARE-GAIN-APPREC> .25
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.41
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.17
<EXPENSE-RATIO> 1.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 513
<NAME> GOLDMAN SACHS BALANCED FUND-INST.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 206,265,978
<INVESTMENTS-AT-VALUE> 217,081,749
<RECEIVABLES> 14,631,666
<ASSETS-OTHER> 103,966
<OTHER-ITEMS-ASSETS> 30,564
<TOTAL-ASSETS> 231,847,945
<PAYABLE-FOR-SECURITIES> 25,762,034
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,577,666
<TOTAL-LIABILITIES> 27,339,700
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 188,861,586
<SHARES-COMMON-STOCK> 412,422
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 410,404
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,386,005
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,850,250
<NET-ASSETS> 204,508,245
<DIVIDEND-INCOME> 1,068,241
<INTEREST-INCOME> 4,207,232
<OTHER-INCOME> 0
<EXPENSES-NET> 1,434,281
<NET-INVESTMENT-INCOME> 3,841,192
<REALIZED-GAINS-CURRENT> 13,321,612
<APPREC-INCREASE-CURRENT> 2,251,255
<NET-CHANGE-FROM-OPS> 19,414,059
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 51,094
<DISTRIBUTIONS-OF-GAINS> 164,436
<DISTRIBUTIONS-OTHER> 279,473
<NUMBER-OF-SHARES-SOLD> 422,391
<NUMBER-OF-SHARES-REDEEMED> 34,951
<SHARES-REINVESTED> 24,982
<NET-CHANGE-IN-ASSETS> 120,988,118
<ACCUMULATED-NII-PRIOR> 180,204
<ACCUMULATED-GAINS-PRIOR> 990,062
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 870,444
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,156,337
<AVERAGE-NET-ASSETS> 3,510,122
<PER-SHARE-NAV-BEGIN> 21.18
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> .26
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.47
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.29
<EXPENSE-RATIO> .76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 611
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 29,506,202
<INVESTMENTS-AT-VALUE> 29,631,178
<RECEIVABLES> 2,259,962
<ASSETS-OTHER> 27,076
<OTHER-ITEMS-ASSETS> 1,348,620
<TOTAL-ASSETS> 33,266,836
<PAYABLE-FOR-SECURITIES> 3,842,039
<SENIOR-LONG-TERM-DEBT> 289,290
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 4,131,329
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,772,894
<SHARES-COMMON-STOCK> 768,392
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 11,740
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 675,755
<ACCUM-APPREC-OR-DEPREC> 100,108
<NET-ASSETS> 29,135,507
<DIVIDEND-INCOME> 69,116
<INTEREST-INCOME> 31,547
<OTHER-INCOME> 0
<EXPENSES-NET> 85,299
<NET-INVESTMENT-INCOME> 15,364
<REALIZED-GAINS-CURRENT> (689,695)
<APPREC-INCREASE-CURRENT> 100,108
<NET-CHANGE-FROM-OPS> 574,223
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 1,401
<NUMBER-OF-SHARES-SOLD> 794,938
<NUMBER-OF-SHARES-REDEEMED> 26,072
<SHARES-REINVESTED> 156
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57,835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 298,158
<AVERAGE-NET-ASSETS> 2,362,248
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> .77
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.23
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 612
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 29,506,202
<INVESTMENTS-AT-VALUE> 29,631,178
<RECEIVABLES> 2,259,962
<ASSETS-OTHER> 27,076
<OTHER-ITEMS-ASSETS> 1,348,620
<TOTAL-ASSETS> 33,266,836
<PAYABLE-FOR-SECURITIES> 3,842,039
<SENIOR-LONG-TERM-DEBT> 289,290
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 4,131,329
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,772,894
<SHARES-COMMON-STOCK> 295,542
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 11,740
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 675,755
<ACCUM-APPREC-OR-DEPREC> 100,108
<NET-ASSETS> 29,135,507
<DIVIDEND-INCOME> 69,116
<INTEREST-INCOME> 31,547
<OTHER-INCOME> 0
<EXPENSES-NET> 85,299
<NET-INVESTMENT-INCOME> 15,364
<REALIZED-GAINS-CURRENT> (689,695)
<APPREC-INCREASE-CURRENT> 100,108
<NET-CHANGE-FROM-OPS> 574,223
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 307,513
<NUMBER-OF-SHARES-REDEEMED> 11,971
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57,835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 298,158
<AVERAGE-NET-ASSETS> 1,631,716
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .77
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.21
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 617
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 29,506,202
<INVESTMENTS-AT-VALUE> 29,631,178
<RECEIVABLES> 2,259,962
<ASSETS-OTHER> 27,076
<OTHER-ITEMS-ASSETS> 1,348,620
<TOTAL-ASSETS> 33,266,836
<PAYABLE-FOR-SECURITIES> 3,842,039
<SENIOR-LONG-TERM-DEBT> 289,290
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 4,131,329
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,772,894
<SHARES-COMMON-STOCK> 174,438
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 11,740
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 675,755
<ACCUM-APPREC-OR-DEPREC> 100,108
<NET-ASSETS> 29,135,507
<DIVIDEND-INCOME> 69,116
<INTEREST-INCOME> 31,547
<OTHER-INCOME> 0
<EXPENSES-NET> 85,299
<NET-INVESTMENT-INCOME> 15,364
<REALIZED-GAINS-CURRENT> (689,695)
<APPREC-INCREASE-CURRENT> 100,108
<NET-CHANGE-FROM-OPS> 574,223
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 192,766
<NUMBER-OF-SHARES-REDEEMED> 18,328
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57,835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 298,158
<AVERAGE-NET-ASSETS> 893,487
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .76
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.22
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 613
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 29,506,202
<INVESTMENTS-AT-VALUE> 29,631,178
<RECEIVABLES> 2,259,962
<ASSETS-OTHER> 27,076
<OTHER-ITEMS-ASSETS> 1,348,620
<TOTAL-ASSETS> 33,266,836
<PAYABLE-FOR-SECURITIES> 3,842,039
<SENIOR-LONG-TERM-DEBT> 289,290
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 4,131,329
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,772,894
<SHARES-COMMON-STOCK> 1,920,464
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 11,740
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 675,755
<ACCUM-APPREC-OR-DEPREC> 100,108
<NET-ASSETS> 29,135,507
<DIVIDEND-INCOME> 69,116
<INTEREST-INCOME> 31,547
<OTHER-INCOME> 0
<EXPENSES-NET> 85,299
<NET-INVESTMENT-INCOME> 15,364
<REALIZED-GAINS-CURRENT> (689,695)
<APPREC-INCREASE-CURRENT> 100,108
<NET-CHANGE-FROM-OPS> 574,223
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 13,900
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,925,620
<NUMBER-OF-SHARES-REDEEMED> 6,759
<SHARES-REINVESTED> 1,603
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57,835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 298,158
<AVERAGE-NET-ASSETS> 9,723,517
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .76
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.24
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FORM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 616
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 29,506,202
<INVESTMENTS-AT-VALUE> 29,631,178
<RECEIVABLES> 2,259,962
<ASSETS-OTHER> 27,076
<OTHER-ITEMS-ASSETS> 1,348,620
<TOTAL-ASSETS> 33,266,836
<PAYABLE-FOR-SECURITIES> 3,842,039
<SENIOR-LONG-TERM-DEBT> 289,290
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 4,131,329
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,772,894
<SHARES-COMMON-STOCK> 161
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 11,740
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 675,755
<ACCUM-APPREC-OR-DEPREC> 100,108
<NET-ASSETS> 29,135,507
<DIVIDEND-INCOME> 69,116
<INTEREST-INCOME> 31,547
<OTHER-INCOME> 0
<EXPENSES-NET> 85,299
<NET-INVESTMENT-INCOME> 15,364
<REALIZED-GAINS-CURRENT> (689,695)
<APPREC-INCREASE-CURRENT> 100,108
<NET-CHANGE-FROM-OPS> 574,223
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 161
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 57,835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 298,158
<AVERAGE-NET-ASSETS> 1,418
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .78
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.23
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 621
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 30,830,473
<INVESTMENTS-AT-VALUE> 31,593,022
<RECEIVABLES> 1,156,372
<ASSETS-OTHER> 40,508
<OTHER-ITEMS-ASSETS> 136,905
<TOTAL-ASSETS> 32,926,807
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 266,432
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,319,133
<SHARES-COMMON-STOCK> 1,049,487
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 35,674
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 386,027
<ACCUM-APPREC-OR-DEPREC> 762,943
<NET-ASSETS> 32,660,375
<DIVIDEND-INCOME> 48,424
<INTEREST-INCOME> 35,771
<OTHER-INCOME> 0
<EXPENSES-NET> 123,280
<NET-INVESTMENT-INCOME> (39,085)
<REALIZED-GAINS-CURRENT> 276,521
<APPREC-INCREASE-CURRENT> 762,943
<NET-CHANGE-FROM-OPS> 447,337
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 37,526
<NUMBER-OF-SHARES-SOLD> 1,082,435
<NUMBER-OF-SHARES-REDEEMED> 35,569
<SHARES-REINVESTED> 2,621
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 74,140
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 340,019
<AVERAGE-NET-ASSETS> 5,924,621
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .65
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.50
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 622
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 30,830,473
<INVESTMENTS-AT-VALUE> 31,593,022
<RECEIVABLES> 1,156,372
<ASSETS-OTHER> 40,508
<OTHER-ITEMS-ASSETS> 136,905
<TOTAL-ASSETS> 32,926,807
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 266,432
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,319,133
<SHARES-COMMON-STOCK> 942,850
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 35,674
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 386,027
<ACCUM-APPREC-OR-DEPREC> 762,943
<NET-ASSETS> 32,660,375
<DIVIDEND-INCOME> 48,424
<INTEREST-INCOME> 35,771
<OTHER-INCOME> 0
<EXPENSES-NET> 123,280
<NET-INVESTMENT-INCOME> (39,085)
<REALIZED-GAINS-CURRENT> 276,521
<APPREC-INCREASE-CURRENT> 762,943
<NET-CHANGE-FROM-OPS> 447,337
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 34,574
<NUMBER-OF-SHARES-SOLD> 952,128
<NUMBER-OF-SHARES-REDEEMED> 12,396
<SHARES-REINVESTED> 3,118
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 74,140
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 340,019
<AVERAGE-NET-ASSETS> 5,743,747
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> .64
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.56
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 627
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 30,830,473
<INVESTMENTS-AT-VALUE> 31,593,022
<RECEIVABLES> 1,156,372
<ASSETS-OTHER> 40,508
<OTHER-ITEMS-ASSETS> 136,905
<TOTAL-ASSETS> 32,926,807
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 266,432
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,319,133
<SHARES-COMMON-STOCK> 242,025
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 35,674
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 386,027
<ACCUM-APPREC-OR-DEPREC> 762,943
<NET-ASSETS> 32,660,375
<DIVIDEND-INCOME> 48,424
<INTEREST-INCOME> 35,771
<OTHER-INCOME> 0
<EXPENSES-NET> 123,280
<NET-INVESTMENT-INCOME> (39,085)
<REALIZED-GAINS-CURRENT> 276,521
<APPREC-INCREASE-CURRENT> 762,943
<NET-CHANGE-FROM-OPS> 447,337
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 7,527
<NUMBER-OF-SHARES-SOLD> 259,583
<NUMBER-OF-SHARES-REDEEMED> 18,140
<SHARES-REINVESTED> 582
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 74,140
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 340,019
<AVERAGE-NET-ASSETS> 1,155,876
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .64
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.57
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 623
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 30,830,473
<INVESTMENTS-AT-VALUE> 31,593,022
<RECEIVABLES> 1,156,372
<ASSETS-OTHER> 40,508
<OTHER-ITEMS-ASSETS> 136,905
<TOTAL-ASSETS> 32,926,807
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 266,432
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,319,133
<SHARES-COMMON-STOCK> 850,858
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 35,674
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 386,027
<ACCUM-APPREC-OR-DEPREC> 762,943
<NET-ASSETS> 32,660,375
<DIVIDEND-INCOME> 48,424
<INTEREST-INCOME> 35,771
<OTHER-INCOME> 0
<EXPENSES-NET> 123,280
<NET-INVESTMENT-INCOME> (39,085)
<REALIZED-GAINS-CURRENT> 276,521
<APPREC-INCREASE-CURRENT> 762,943
<NET-CHANGE-FROM-OPS> 447,337
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 29,872
<NUMBER-OF-SHARES-SOLD> 850,292
<NUMBER-OF-SHARES-REDEEMED> 2,351
<SHARES-REINVESTED> 2,917
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 74,140
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 340,019
<AVERAGE-NET-ASSETS> 5,901,722
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .65
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.61
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 626
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 30,830,473
<INVESTMENTS-AT-VALUE> 31,593,022
<RECEIVABLES> 1,156,372
<ASSETS-OTHER> 40,508
<OTHER-ITEMS-ASSETS> 136,905
<TOTAL-ASSETS> 32,926,807
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 266,432
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,319,133
<SHARES-COMMON-STOCK> 160
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 35,674
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 386,027
<ACCUM-APPREC-OR-DEPREC> 762,943
<NET-ASSETS> 32,660,375
<DIVIDEND-INCOME> 48,424
<INTEREST-INCOME> 35,771
<OTHER-INCOME> 0
<EXPENSES-NET> 123,280
<NET-INVESTMENT-INCOME> (39,085)
<REALIZED-GAINS-CURRENT> 276,521
<APPREC-INCREASE-CURRENT> 762,943
<NET-CHANGE-FROM-OPS> 447,337
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 7
<NUMBER-OF-SHARES-SOLD> 160
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 74,140
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 340,019
<AVERAGE-NET-ASSETS> 1,613
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .63
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.60
<EXPENSE-RATIO> 1.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 601
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 69,319,703
<INVESTMENTS-AT-VALUE> 74,329,935
<RECEIVABLES> 2,263,792
<ASSETS-OTHER> 124,918
<OTHER-ITEMS-ASSETS> 142,249
<TOTAL-ASSETS> 76,860,894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 314,741
<TOTAL-LIABILITIES> 314,741
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72,037,383
<SHARES-COMMON-STOCK> 4,491,866
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 16,664
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 493,840
<ACCUM-APPREC-OR-DEPREC> 5,019,274
<NET-ASSETS> 76,546,153
<DIVIDEND-INCOME> 258,531
<INTEREST-INCOME> 50,565
<OTHER-INCOME> 0
<EXPENSES-NET> 319,837
<NET-INVESTMENT-INCOME> (10,741)
<REALIZED-GAINS-CURRENT> 1,346,393
<APPREC-INCREASE-CURRENT> 5,019,274
<NET-CHANGE-FROM-OPS> 6,354,926
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 10,499
<DISTRIBUTIONS-OF-GAINS> 1,161,485
<DISTRIBUTIONS-OTHER> 230,942
<NUMBER-OF-SHARES-SOLD> 4,984,608
<NUMBER-OF-SHARES-REDEEMED> 609,700
<SHARES-REINVESTED> 116,958
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 228,283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 760,129
<AVERAGE-NET-ASSETS> 32,756,696
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 2.35
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .39
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.97
<EXPENSE-RATIO> .90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 602
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 69,319,703
<INVESTMENTS-AT-VALUE> 74,329,935
<RECEIVABLES> 2,263,792
<ASSETS-OTHER> 124,918
<OTHER-ITEMS-ASSETS> 142,249
<TOTAL-ASSETS> 76,860,894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 314,741
<TOTAL-LIABILITIES> 314,741
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72,037,383
<SHARES-COMMON-STOCK> 1,162,113
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 16,664
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 493,840
<ACCUM-APPREC-OR-DEPREC> 5,019,274
<NET-ASSETS> 76,546,153
<DIVIDEND-INCOME> 258,531
<INTEREST-INCOME> 50,565
<OTHER-INCOME> 0
<EXPENSES-NET> 319,837
<NET-INVESTMENT-INCOME> (10,741)
<REALIZED-GAINS-CURRENT> 1,346,393
<APPREC-INCREASE-CURRENT> 5,019,274
<NET-CHANGE-FROM-OPS> 6,354,926
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 165,444
<DISTRIBUTIONS-OTHER> 194,227
<NUMBER-OF-SHARES-SOLD> 1,245,868
<NUMBER-OF-SHARES-REDEEMED> 113,110
<SHARES-REINVESTED> 29,355
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 228,283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 760,129
<AVERAGE-NET-ASSETS> 6,053,662
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> 2.33
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .38
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.92
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 607
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 69,319,703
<INVESTMENTS-AT-VALUE> 74,329,935
<RECEIVABLES> 2,263,792
<ASSETS-OTHER> 124,918
<OTHER-ITEMS-ASSETS> 142,249
<TOTAL-ASSETS> 76,860,894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 314,741
<TOTAL-LIABILITIES> 314,741
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72,037,383
<SHARES-COMMON-STOCK> 346,492
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 16,664
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 493,840
<ACCUM-APPREC-OR-DEPREC> 5,019,274
<NET-ASSETS> 76,546,153
<DIVIDEND-INCOME> 258,531
<INTEREST-INCOME> 50,565
<OTHER-INCOME> 0
<EXPENSES-NET> 319,837
<NET-INVESTMENT-INCOME> (10,741)
<REALIZED-GAINS-CURRENT> 1,346,393
<APPREC-INCREASE-CURRENT> 5,019,274
<NET-CHANGE-FROM-OPS> 6,354,926
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 16,967
<DISTRIBUTIONS-OTHER> 67,972
<NUMBER-OF-SHARES-SOLD> 351,956
<NUMBER-OF-SHARES-REDEEMED> 11,868
<SHARES-REINVESTED> 6,404
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 228,283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 760,129
<AVERAGE-NET-ASSETS> 1,969,597
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 2.34
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .39
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.93
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 603
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-INST.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 69,319,703
<INVESTMENTS-AT-VALUE> 74,329,935
<RECEIVABLES> 2,263,792
<ASSETS-OTHER> 124,918
<OTHER-ITEMS-ASSETS> 142,249
<TOTAL-ASSETS> 76,860,894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 314,741
<TOTAL-LIABILITIES> 314,741
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72,037,383
<SHARES-COMMON-STOCK> 388,928
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 16,664
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 493,840
<ACCUM-APPREC-OR-DEPREC> 5,019,274
<NET-ASSETS> 76,546,153
<DIVIDEND-INCOME> 259,531
<INTEREST-INCOME> 50,565
<OTHER-INCOME> 0
<EXPENSES-NET> 319,837
<NET-INVESTMENT-INCOME> (10,741)
<REALIZED-GAINS-CURRENT> 1,346,393
<APPREC-INCREASE-CURRENT> 5,019,274
<NET-CHANGE-FROM-OPS> 6,354,926
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3
<DISTRIBUTIONS-OF-GAINS> 79
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 392,622
<NUMBER-OF-SHARES-REDEEMED> 3,701
<SHARES-REINVESTED> 7
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 228,283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 760,129
<AVERAGE-NET-ASSETS> 161,755
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 2.35
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .39
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.97
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 606
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-SERV.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> MAY-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 69,319,703
<INVESTMENTS-AT-VALUE> 74,329,935
<RECEIVABLES> 2,263,792
<ASSETS-OTHER> 124,918
<OTHER-ITEMS-ASSETS> 142,249
<TOTAL-ASSETS> 76,860,894
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 314,741
<TOTAL-LIABILITIES> 314,741
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 72,037,383
<SHARES-COMMON-STOCK> 9,619
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 16,664
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 493,840
<ACCUM-APPREC-OR-DEPREC> 5,019,274
<NET-ASSETS> 76,546,153
<DIVIDEND-INCOME> 258,531
<INTEREST-INCOME> 50,565
<OTHER-INCOME> 0
<EXPENSES-NET> 319,837
<NET-INVESTMENT-INCOME> (10,741)
<REALIZED-GAINS-CURRENT> 1,346,393
<APPREC-INCREASE-CURRENT> 5,019,274
<NET-CHANGE-FROM-OPS> 6,354,926
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,739
<DISTRIBUTIONS-OTHER> 1,841
<NUMBER-OF-SHARES-SOLD> 9,303
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 316
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 228,283
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 760,129
<AVERAGE-NET-ASSETS> 67,861
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 2.35
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .39
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.95
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 591
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 520,501,426
<INVESTMENTS-AT-VALUE> 670,339,143
<RECEIVABLES> 5,703,497
<ASSETS-OTHER> 7,229
<OTHER-ITEMS-ASSETS> 85,588
<TOTAL-ASSETS> 676,135,457
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,533,327
<TOTAL-LIABILITIES> 1,533,327
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 520,091,264
<SHARES-COMMON-STOCK> 14,985,404
<SHARES-COMMON-PRIOR> 9,688,806
<ACCUMULATED-NII-CURRENT> 75,033
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,515,480
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 149,920,353
<NET-ASSETS> 674,602,130
<DIVIDEND-INCOME> 8,627,109
<INTEREST-INCOME> 756,432
<OTHER-INCOME> 0
<EXPENSES-NET> 5,792,632
<NET-INVESTMENT-INCOME> 3,590,909
<REALIZED-GAINS-CURRENT> 51,660,805
<APPREC-INCREASE-CURRENT> 58,735,381
<NET-CHANGE-FROM-OPS> 113,987,095
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,596,139
<DISTRIBUTIONS-OF-GAINS> 30,719,012
<DISTRIBUTIONS-OTHER> 30,776
<NUMBER-OF-SHARES-SOLD> 6,317,528
<NUMBER-OF-SHARES-REDEEMED> 2,217,030
<SHARES-REINVESTED> 1,196,100
<NET-CHANGE-IN-ASSETS> 278,768,435
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,402,524
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,924,639
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,744,567
<AVERAGE-NET-ASSETS> 308,580,547
<PER-SHARE-NAV-BEGIN> 23.32
<PER-SHARE-NII> .11
<PER-SHARE-GAIN-APPREC> 5.63
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.47
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.59
<EXPENSE-RATIO> 1.29
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 592
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 520,501,426
<INVESTMENTS-AT-VALUE> 670,339,143
<RECEIVABLES> 5,703,497
<ASSETS-OTHER> 7,229
<OTHER-ITEMS-ASSETS> 85,588
<TOTAL-ASSETS> 676,135,457
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,533,327
<TOTAL-LIABILITIES> 1,533,327
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 520,091,264
<SHARES-COMMON-STOCK> 2,249,148
<SHARES-COMMON-PRIOR> 744,222
<ACCUMULATED-NII-CURRENT> 75,033
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,515,480
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 149,920,353
<NET-ASSETS> 674,602,130
<DIVIDEND-INCOME> 8,627,109
<INTEREST-INCOME> 756,432
<OTHER-INCOME> 0
<EXPENSES-NET> 5,792,632
<NET-INVESTMENT-INCOME> 3,590,909
<REALIZED-GAINS-CURRENT> 51,660,805
<APPREC-INCREASE-CURRENT> 58,735,381
<NET-CHANGE-FROM-OPS> 113,987,095
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 4,237,947
<DISTRIBUTIONS-OTHER> 676,325
<NUMBER-OF-SHARES-SOLD> 1,587,418
<NUMBER-OF-SHARES-REDEEMED> 243,200
<SHARES-REINVESTED> 160,708
<NET-CHANGE-IN-ASSETS> 278,768,435
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,402,524
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,924,639
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,744,567
<AVERAGE-NET-ASSETS> 35,336,714
<PER-SHARE-NAV-BEGIN> 23.18
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 5.42
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.41
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.32
<EXPENSE-RATIO> 1.83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 597
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> AUG-15-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 520,501,426
<INVESTMENTS-AT-VALUE> 670,339,143
<RECEIVABLES> 5,703,497
<ASSETS-OTHER> 7,229
<OTHER-ITEMS-ASSETS> 85,588
<TOTAL-ASSETS> 676,135,457
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,533,327
<TOTAL-LIABILITIES> 1,533,327
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 520,091,264
<SHARES-COMMON-STOCK> 238,838
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 75,033
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,515,480
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 149,920,353
<NET-ASSETS> 674,602,130
<DIVIDEND-INCOME> 8,627,109
<INTEREST-INCOME> 756,432
<OTHER-INCOME> 0
<EXPENSES-NET> 5,792,632
<NET-INVESTMENT-INCOME> 3,590,909
<REALIZED-GAINS-CURRENT> 51,660,805
<APPREC-INCREASE-CURRENT> 58,735,381
<NET-CHANGE-FROM-OPS> 113,987,095
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 358,883
<DISTRIBUTIONS-OTHER> 276,166
<NUMBER-OF-SHARES-SOLD> 301,152
<NUMBER-OF-SHARES-REDEEMED> 75,324
<SHARES-REINVESTED> 13,010
<NET-CHANGE-IN-ASSETS> 278,768,435
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,402,524
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,924,639
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,744,567
<AVERAGE-NET-ASSETS> 4,183,614
<PER-SHARE-NAV-BEGIN> 27.48
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 1.19
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.50
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.24
<EXPENSE-RATIO> 1.83
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 593
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 520,501,426
<INVESTMENTS-AT-VALUE> 670,339,143
<RECEIVABLES> 5,703,497
<ASSETS-OTHER> 7,229
<OTHER-ITEMS-ASSETS> 85,588
<TOTAL-ASSETS> 676,135,457
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,533,327
<TOTAL-LIABILITIES> 1,533,327
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 520,091,264
<SHARES-COMMON-STOCK> 7,573,189
<SHARES-COMMON-PRIOR> 6,351,958
<ACCUMULATED-NII-CURRENT> 75,033
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,515,480
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 149,920,353
<NET-ASSETS> 674,602,130
<DIVIDEND-INCOME> 8,627,109
<INTEREST-INCOME> 756,432
<OTHER-INCOME> 0
<EXPENSES-NET> 5,792,632
<NET-INVESTMENT-INCOME> 3,590,909
<REALIZED-GAINS-CURRENT> 51,660,805
<APPREC-INCREASE-CURRENT> 58,735,381
<NET-CHANGE-FROM-OPS> 113,987,095
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,709,339
<DISTRIBUTIONS-OF-GAINS> 15,675,265
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,723,166
<NUMBER-OF-SHARES-REDEEMED> 1,139,364
<SHARES-REINVESTED> 637,429
<NET-CHANGE-IN-ASSETS> 278,768,435
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,402,524
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,924,639
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,744,567
<AVERAGE-NET-ASSETS> 171,974,911
<PER-SHARE-NAV-BEGIN> 23.44
<PER-SHARE-NII> .30
<PER-SHARE-GAIN-APPREC> 5.65
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.60
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.79
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF GOLDMAN SACHS TRUST ON BEHALF OF THE EQUITY FUNDS DATED JANUARY 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 596
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1997
<PERIOD-END> JAN-31-1998
<INVESTMENTS-AT-COST> 520,501,426
<INVESTMENTS-AT-VALUE> 670,339,143
<RECEIVABLES> 5,703,497
<ASSETS-OTHER> 7,229
<OTHER-ITEMS-ASSETS> 85,588
<TOTAL-ASSETS> 676,135,457
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,533,327
<TOTAL-LIABILITIES> 1,533,327
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 520,091,264
<SHARES-COMMON-STOCK> 295,570
<SHARES-COMMON-PRIOR> 157,464
<ACCUMULATED-NII-CURRENT> 75,033
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,515,480
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 149,920,353
<NET-ASSETS> 674,602,130
<DIVIDEND-INCOME> 8,627,109
<INTEREST-INCOME> 756,432
<OTHER-INCOME> 0
<EXPENSES-NET> 5,792,632
<NET-INVESTMENT-INCOME> 3,590,909
<REALIZED-GAINS-CURRENT> 51,660,805
<APPREC-INCREASE-CURRENT> 58,735,381
<NET-CHANGE-FROM-OPS> 113,987,095
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 34,331
<DISTRIBUTIONS-OF-GAINS> 556,742
<DISTRIBUTIONS-OTHER> 2,549
<NUMBER-OF-SHARES-SOLD> 132,991
<NUMBER-OF-SHARES-REDEEMED> 17,860
<SHARES-REINVESTED> 22,975
<NET-CHANGE-IN-ASSETS> 278,768,435
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,402,524
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,924,639
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,744,567
<AVERAGE-NET-ASSETS> 5,444,487
<PER-SHARE-NAV-BEGIN> 23.27
<PER-SHARE-NII> .19
<PER-SHARE-GAIN-APPREC> 5.57
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 2.50
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.53
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
AMENDMENT NO. 5
TO THE
DECLARATION OF TRUST
OF
GOLDMAN SACHS TRUST
This AMENDMENT NO. 5 dated the 28 day of January, 1998 to the AGREEMENT AND
DECLARATION OF TRUST (the "Declaration"), as amended, dated the 28th day of
January, 1997 is made by the Trustees name below;
WHEREAS, the Trustees have established a trust for the investment and
reinvestment of funds contributed thereto;
WHEREAS, the Trustees divided the beneficial interest in the trust
assets into transferable shares of beneficial interest and divided such shares
of beneficial interest into separate Series;
WHEREAS, the Trustees desire to create new Series and designate new
Classes of shares;
NOW, THEREFORE, in consideration of the foregoing premises and the agreements
contained herein, the undersigned, being all of the Trustees of the Trust and
acting in accordance with Article V, Section 1 of the Declaration, hereby amend
the Declaration as follows:
The Trust shall consist of one or more Series. Without limiting the
authority of the Trustees to establish and designate any further Series,
the Trustees hereby establish the following 43 Series: Goldman Sachs
Adjustable Rate Government Fund, Goldman Sachs Short Duration Government
Fund, Goldman Sachs Short Duration Tax-Free Fund, Goldman Sachs Core Fixed
Income Fund, Goldman Sachs Global Income Fund, Goldman Sachs Government
Income Fund, Goldman Sachs Municipal Income Fund, Goldman Sachs High Yield
Fund, Goldman Sachs Balanced Fund, Goldman Sachs CORE Large Cap Growth
Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs CORE Small Cap
Equity Fund, Goldman Sachs CORE International Equity Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs Capital Growth Fund, Goldman Sachs
Mid Cap Equity Fund, Goldman Sachs Small Cap Value Fund, Goldman Sachs
International Equity Fund, Goldman Sachs Asia Growth Fund, Goldman Sachs
Emerging Markets Equity Fund, Goldman Sachs Real Estate Securities Fund,
Goldman Sachs International Small Cap Fund, Goldman Sachs Japanese Equity
Fund, Goldman Sachs Growth Strategy Portfolio, Goldman Sachs Aggressive
Growth Strategy Portfolio, Goldman Sachs Income Strategy Portfolio, Goldman
Sachs Growth and Income Strategy Portfolio, Institutional Liquid Assets- -
Prime Obligations Portfolio, Institutional Liquid Assets-Government
Portfolio, Institutional Liquid Assets-Treasury Obligations Portfolio,
Institutional Liquid Assets-Money Market Portfolio, Institutional Liquid
Assets-Federal Portfolio, Institutional Liquid Assets-Treasury Instruments
Portfolio, Institutional Liquid Assets-Tax-Exempt Diversified Portfolio,
Institutional Liquid Assets-Tax- Exempt New York Portfolio, Institutional
Liquid Assets-Tax-Exempt California Portfolio, Goldman Sachs-Financial
Square Prime Obligations Fund, Goldman Sachs-Financial Square Government
Fund, Goldman Sachs-Financial Square Treasury Obligations Fund, Goldman
Sachs-Financial Square Money Market Fund, Goldman Sachs-Financial Square
Premium Money Market Fund, Goldman
<PAGE>
Sachs-Financial Square Municipal Money Market Fund, Goldman Sachs-Financial
Square Tax-Free Fund, Goldman Sachs-Financial Square Federal Fund, and
Goldman Sachs-Financial Square Treasury Instruments Fund (the "Existing
Series"). Each additional Series shall be established and is effective upon
the adoption of a resolution of a majority of the Trustees or any
alternative date specified in such resolution. The Trustees may designate
the relative rights and preferences of the Shares of each Series. The
Trustees may divide the Shares of any Series into Classes. Without limiting
the authority of the Trustees to establish and designate any further
Classes, the Trustees hereby establish the following classes of shares with
respect to the series set forth below:
Class A Shares: Goldman Sachs Adjustable Rate Government Fund, Goldman Sachs
Global Income Fund, Goldman Sachs Government Income Fund,
Goldman Sachs Municipal Income Fund, Goldman Sachs High Yield
Fund, Goldman Sachs Short Duration Government Fund, Goldman
Sachs Short Duration Tax-Free Fund, Goldman Sachs Core Fixed
Income Fund, Goldman Sachs Balanced Fund, Goldman Sachs CORE
U.S. Equity Fund, Goldman Sachs CORE Small Cap Equity Fund,
Goldman Sachs CORE International Equity Fund, Goldman Sachs
CORE Large Cap Growth Fund, Goldman Sachs Growth and Income
Fund, Goldman Sachs Mid-Cap Equity Fund, Goldman Sachs
Capital Growth Fund, Goldman Sachs Small Cap Value Fund,
Goldman Sachs International Equity Fund, Goldman Sachs
Emerging Markets Equity Fund, Goldman Sachs Asia Growth Fund,
Goldman Sachs Real Estate Securities Fund, Goldman Sachs
International Small Cap Fund, Goldman Sachs Japanese Equity
Fund, Goldman Sachs Growth Strategy Portfolio, Goldman Sachs
Aggressive Growth Strategy Portfolio, Goldman Sachs Income
Strategy Portfolio, Goldman Sachs Growth and Income Strategy
Portfolio.
Class B Shares Goldman Sachs Global Income Fund, Goldman Sachs Government
Income Fund, Goldman Sachs Municipal Income Fund, Goldman
Sachs High Yield Fund, Goldman Sachs Short Duration
Government Fund, Goldman Sachs Short Duration Tax-Free Fund,
Goldman Sachs Core Fixed Income Fund, Goldman Sachs Balanced
Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs CORE
Small Cap Equity Fund, Goldman Sachs CORE International
Equity Fund, Goldman Sachs CORE Large Cap Growth Fund,
Goldman Sachs Growth and Income Fund, Goldman Sachs Mid-Cap
Equity Fund, Goldman Sachs Capital Growth Fund, Goldman Sachs
Small Cap Value Fund, Goldman Sachs International Equity
Fund, Goldman Sachs Emerging Markets Equity Fund, Goldman
Sachs Asia Growth Fund, Goldman Sachs International Small Cap
Fund, Goldman Sachs Japanese Equity Fund, Institutional
Liquid Assets Prime Obligations Portfolio, Goldman Sachs Real
Estate Securities Fund, Goldman Sachs Growth Strategy
Portfolio, Goldman Sachs Aggressive Growth Strategy
Portfolio, Goldman Sachs Income Strategy Portfolio, Goldman
Sachs Growth and Income Strategy Portfolio.
Class C Shares Goldman Sachs Global Income Fund, Goldman Sachs Government
Income Fund, Goldman Sachs Municipal Income Fund, Goldman
Sachs High Yield Fund, Goldman Sachs Short Duration
Government Fund, Goldman Sachs Short Duration Tax-Free Fund,
Goldman Sachs Core Fixed Income Fund, Goldman Sachs Balanced
Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs CORE
Small Cap Equity Fund, Goldman Sachs CORE International
Equity Fund, Goldman Sachs CORE Large Cap Growth Fund,
Goldman Sachs Growth and Income Fund, Goldman Sachs Mid-Cap
Equity Fund, Goldman Sachs Capital Growth Fund, Goldman Sachs
Small Cap Value Fund, Goldman Sachs International Equity
Fund, Goldman Sachs Emerging Markets Equity Fund, Goldman
Sachs Asia Growth Fund, Goldman Sachs International Small Cap
Fund, Goldman Sachs Japanese Equity Fund, Institutional
Liquid Assets Prime Obligations Portfolio, Goldman Sachs Real
Estate Securities Fund, Goldman Sachs Growth Strategy
Portfolio, Goldman Sachs Aggressive Growth Strategy
Portfolio, Goldman Sachs Income Strategy Portfolio, Goldman
Sachs Growth and Income Strategy Portfolio.
<PAGE>
Institutional Shares: Goldman Sachs Adjustable Rate Government Fund, Goldman
Sachs Short Duration Government Fund, Goldman Sachs Short
Duration Tax-Free Fund, Goldman Sachs Government Income
Fund, Goldman Sachs Municipal Income Fund, Goldman Sachs
Core Fixed Income Fund, Goldman Sachs Global Income Fund,
Goldman Sachs High Yield Fund, Goldman Sachs Balanced
Fund, Goldman Sachs Small Cap Value Fund, Goldman Sachs
Capital Growth Fund, Goldman Sachs CORE Large Cap Growth
Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs Mid-Cap Equity
Fund, Goldman Sachs International Equity Fund, Goldman
Sachs Emerging Markets Equity Fund, Goldman Sachs Asia
Growth Fund, Goldman Sachs International Small Cap Fund,
Goldman Sachs Japanese Equity Fund, Goldman Sachs-
Financial Square Prime Obligations Fund, Goldman Sachs-
Financial Square Government Fund, Goldman Sachs-Financial
Square Treasury Obligations Fund, Goldman Sachs-Financial
Square Money Market Fund, Goldman Sachs-Financial Square
Premium Money Market Fund, Goldman Sachs-Financial Square
Municipal Money Market Fund, Goldman Sachs-Financial
Square Tax-Free Fund, Goldman Sachs-Financial Square
Federal Fund, Goldman Sachs-Financial Square Treasury
Instruments Fund, Institutional Liquid Assets-Prime
Obligations Portfolio, Institutional Liquid Assets-
Government Portfolio, Institutional Liquid Assets-
Treasury Obligations Portfolio, Institutional Liquid
Assets-Money Market Portfolio, Institutional Liquid
Assets-Federal Portfolio, Institutional Liquid Assets-
Treasury Instruments Portfolio, Institutional Liquid
Assets-Tax-Exempt Diversified Portfolio, Institutional
Liquid Assets-Tax-Exempt New York Portfolio,
Institutional Liquid Assets-Tax-Exempt California
Portfolio, Goldman Sachs Real Estate Securities Fund,
Goldman Sachs Growth Strategy Portfolio, Goldman Sachs
Aggressive Growth Strategy Portfolio, Goldman Sachs
Income Strategy Portfolio, Goldman Sachs Growth and
Income Strategy Portfolio.
Service Shares: Goldman Sachs Adjustable Rate Government Fund, Goldman
Sachs Short Duration Government Fund, Goldman Sachs Short
Duration Tax-Free Fund, Goldman Sachs Government Income
Fund, Goldman Sachs Municipal Income Fund, Goldman Sachs
Core Fixed Income Fund, Goldman Sachs Global Income Fund,
Goldman Sachs High Yield Fund, Goldman Sachs Balanced
Fund, Goldman Sachs Small Cap Value Fund, Goldman Sachs
Capital Growth Fund, Goldman Sachs CORE U.S. Equity Fund,
Goldman Sachs CORE Large Cap Growth Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs Mid-Cap Equity
Fund, Goldman Sachs International Equity Fund, Goldman
Sachs Emerging Markets Equity Fund, Goldman Sachs Asia
Growth Fund, Goldman Sachs International Small Cap Fund,
Goldman Sachs Japanese Equity Fund, Goldman Sachs-
Financial Square Prime Obligations Fund, Goldman Sachs-
Financial Square Government Fund, Goldman Sachs-Financial
Square Treasury Obligations Fund, Goldman Sachs-Financial
Square Money Market Fund, Goldman Sachs-Financial Square
Premium Money Market Fund, Goldman Sachs-Financial Square
Municipal Money Market Fund, Goldman Sachs-Financial
Square Tax-Free Fund, Goldman Sachs-Financial Square
Federal Fund, Goldman Sachs-Financial Square Treasury
Instruments Fund, Institutional Liquid Assets-Prime
Obligations Portfolio, Institutional Liquid Assets-
Government Portfolio, Institutional Liquid Assets-
Treasury Obligations Portfolio, Institutional Liquid
Assets-Money Market Portfolio, Institutional Liquid
Assets-Federal Portfolio, Institutional Liquid Assets-
Treasury Instruments Portfolio, Institutional Liquid
Assets-Tax-Exempt Diversified Portfolio, Institutional
Liquid Assets-Tax-Exempt New York Portfolio,
Institutional Liquid Assets-Tax-Exempt California
Portfolio, Goldman Sachs Real Estate Securities Fund,
Goldman Sachs Growth Strategy Portfolio, Goldman Sachs
Aggressive Growth Strategy Portfolio, Goldman Sachs
Income Strategy Portfolio, Goldman Sachs Growth and
Income Strategy Portfolio.
Administration Shares: Goldman Sachs Adjustable Rate Government Fund, Goldman
Sachs Short Duration Government Fund, Goldman Sachs Short
Duration Tax-Free Fund, Goldman Sachs Core
<PAGE>
Fixed Income Fund, Goldman Sachs-Financial Square Prime
Obligations Fund, Goldman Sachs-Financial Square
Government Fund, Goldman Sachs-Financial Square Treasury
Obligations Fund, Goldman Sachs-Financial Square Money
Market Fund, Goldman Sachs-Financial Square Premium Money
Market Fund, Goldman Sachs-Financial Square Municipal
Money Market Fund, Goldman Sachs-Financial Square Tax-
Free Fund, Goldman Sachs-Financial Square Federal Fund,
Goldman Sachs-Financial Square Treasury Instruments Fund,
Institutional Liquid Assets-Prime Obligations Portfolio,
Institutional Liquid Assets-Government Portfolio,
Institutional Liquid Assets-Treasury Obligations
Portfolio, Institutional Liquid Assets-Money Market
Portfolio, Institutional Liquid Assets-Federal Portfolio,
Institutional Liquid Assets-Treasury Instruments
Portfolio, Institutional Liquid Assets-Tax-Exempt
Diversified Portfolio, Institutional Liquid Assets-Tax-
Exempt New York Portfolio and Institutional Liquid
Assets-Tax-Exempt California Portfolio.
Preferred
Administration Shares: Goldman Sachs-Financial Square Prime Obligations Fund,
Goldman Sachs-Financial Square Government Fund, Goldman
Sachs-Financial Square Treasury Obligations Fund, Goldman
Sachs-Financial Square Money Market Fund, Goldman Sachs-
Financial Square Premuim Money Market Fund, Goldman
Sachs-Financial Square Municipal Money Market Fund,
Goldman Sachs-Financial Square Tax-Free Fund, Goldman
Sachs-Financial Square Federal Fund and Goldman Sachs-
Financial Square Treasury Instruments Fund.
Cash Management
Shares: Institutional Liquid Assets-Prime Obligations Portfolio,
Institutional Liquid Assets-Money Market Portfolio,
Institutional Liquid Assets-Government Portfolio,
Institutional Liquid Assets-Tax-Exempt Diversified
Portfolio, Institutional Liquid Assets-Tax-Exempt
California Portfolio, Institutional Liquid Assets-Tax-
Exempt New York Portfolio.
All capitalized terms which are not defined herein shall have the same
meanings as are assigned to those terms in the Declaration.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
date first written above.
/s/ Ashok N. Bakhru
_________________________________________
Ashok N. Bakhru,
as Trustee and not individually
/s/ David B. Ford
________________________________________
David B. Ford,
as Trustee and not individually
/s/ Douglas Grip
________________________________________
Douglas Grip,
as Trustee and not individually
<PAGE>
/s/ John P. McNulty
________________________________________
John P. McNulty,
as Trustee and not individually,
/s/ Mary P. McPherson
________________________________________
Mary P. McPherson
as Trustee and not individually,
/s/ Alan A. Shuch
________________________________________
Alan A. Shuch
as Trustee and not individually,
/s/ Jackson W. Smart
________________________________________
Jackson W. Smart,
as Trustee and not individually,
/s/ William H. Springer
________________________________________
William H. Springer
as Trustee and not individually,
/s/ Richard P. Strubel
________________________________________
Richard P. Strubel
as Trustee and not individually,
<PAGE>
EXHIBIT (a)(7)
AMENDMENT NO AMENDMENT NO. 6
TO THE
DECLARATION OF TRUST
OF
GOLDMAN SACHS TRUST
This AMENDMENT NO. 6 dated the 22 day of July, 1998 to the AGREEMENT AND
DECLARATION OF TRUST (the "Declaration"), as amended, dated the 28th day of
January, 1997 is made by the Trustees name below;
WHEREAS, the Trustees have established a trust for the investment and
reinvestment of funds contributed thereto;
WHEREAS, the Trustees divided the beneficial interest in the trust
assets into transferable shares of beneficial interest and divided such shares
of beneficial interest into separate Series;
WHEREAS, the Trustees desire to create new Series and designate new
Classes of shares;
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements contained herein, the undersigned, being all of the Trustees of the
Trust and acting in accordance with Article V, Section 1 of the Declaration,
hereby amend the Declaration as follows:
The Trust shall consist of one or more Series. Without limiting the
authority of the Trustees to establish and designate any further Series,
the Trustees hereby establish the following 43 Series: Goldman Sachs
Adjustable Rate Government Fund, Goldman Sachs Short Duration Government
Fund, Goldman Sachs Short Duration Tax-Free Fund, Goldman Sachs Core Fixed
Income Fund, Goldman Sachs Global Income Fund, Goldman Sachs Government
Income Fund, Goldman Sachs Municipal Income Fund, Goldman Sachs High Yield
Fund, Goldman Sachs Balanced Fund, Goldman Sachs CORE Large Cap Growth
Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs CORE Small Cap
Equity Fund, Goldman Sachs CORE International Equity Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs Capital Growth Fund, Goldman Sachs
Mid Cap Equity Fund, Goldman Sachs Small Cap Value Fund, Goldman Sachs
International Equity Fund, Goldman Sachs Asia Growth Fund, Goldman Sachs
Emerging Markets Equity Fund, Goldman Sachs Real Estate Securities Fund,
Goldman Sachs International Small Cap Fund, Goldman Sachs Japanese Equity
Fund, Goldman Sachs European Equity Fund, Goldman Sachs Growth Strategy
Portfolio, Goldman Sachs Aggressive Growth Strategy Portfolio, Goldman
Sachs Income Strategy Portfolio, Goldman Sachs Growth and Income Strategy
Portfolio, Institutional Liquid Assets- - Prime Obligations Portfolio,
Institutional Liquid Assets-Government Portfolio, Institutional Liquid
Assets-Treasury Obligations Portfolio, Institutional Liquid Assets-Money
Market Portfolio, Institutional Liquid Assets-Federal Portfolio,
Institutional Liquid Assets-Treasury Instruments Portfolio, Institutional
Liquid Assets-Tax-Exempt Diversified Portfolio, Institutional Liquid
Assets-Tax-Exempt New York Portfolio, Institutional Liquid Assets-Tax-
Exempt California Portfolio, Goldman Sachs-Financial Square Prime
Obligations Fund, Goldman Sachs-Financial Square Government Fund, Goldman
Sachs-Financial Square Treasury Obligations Fund, Goldman Sachs-Financial
Square Money Market Fund, Goldman Sachs-Financial Square Premium Money
Market Fund, Goldman Sachs-Financial Square Municipal Money Market Fund,
Goldman Sachs-Financial Square Tax-Free Fund, Goldman Sachs-Financial
Square Federal Fund, and Goldman Sachs-Financial Square Treasury
Instruments Fund (the "Existing Series"). Each additional Series shall be
<PAGE>
established and is effective upon the adoption of a resolution of a
majority of the Trustees or any alternative date specified in such
resolution. The Trustees may designate the relative rights and preferences
of the Shares of each Series. The Trustees may divide the Shares of any
Series into Classes. Without limiting the authority of the Trustees to
establish and designate any further Classes, the Trustees hereby establish
the following classes of shares with respect to the series set forth below:
Class A Shares: Goldman Sachs Adjustable Rate Government Fund, Goldman Sachs
Global Income Fund, Goldman Sachs Government Income Fund,
Goldman Sachs Municipal Income Fund, Goldman Sachs High
Yield Fund, Goldman Sachs Short Duration Government Fund,
Goldman Sachs Short Duration Tax-Free Fund, Goldman Sachs
Core Fixed Income Fund, Goldman Sachs Balanced Fund, Goldman
Sachs CORE U.S. Equity Fund, Goldman Sachs CORE Small Cap
Equity Fund, Goldman Sachs CORE International Equity Fund,
Goldman Sachs CORE Large Cap Growth Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs Mid-Cap Equity Fund,
Goldman Sachs Capital Growth Fund, Goldman Sachs Small Cap
Value Fund, Goldman Sachs International Equity Fund, Goldman
Sachs Emerging Markets Equity Fund, Goldman Sachs Asia
Growth Fund, Goldman Sachs Real Estate Securities Fund,
Goldman Sachs International Small Cap Fund, Goldman Sachs
Japanese Equity Fund, Goldman Sachs European Equity Fund,
Goldman Sachs Growth Strategy Portfolio, Goldman Sachs
Aggressive Growth Strategy Portfolio, Goldman Sachs Income
Strategy Portfolio, Goldman Sachs Growth and Income Strategy
Portfolio.
Class B Shares Goldman Sachs Global Income Fund, Goldman Sachs Government
Income Fund, Goldman Sachs Municipal Income Fund, Goldman
Sachs High Yield Fund, Goldman Sachs Short Duration
Government Fund, Goldman Sachs Short Duration Tax-Free Fund,
Goldman Sachs Core Fixed Income Fund, Goldman Sachs Balanced
Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs
CORE Small Cap Equity Fund, Goldman Sachs CORE International
Equity Fund, Goldman Sachs CORE Large Cap Growth Fund,
Goldman Sachs Growth and Income Fund, Goldman Sachs Mid-Cap
Equity Fund, Goldman Sachs Capital Growth Fund, Goldman
Sachs Small Cap Value Fund, Goldman Sachs International
Equity Fund, Goldman Sachs Emerging Markets Equity Fund,
Goldman Sachs Asia Growth Fund, Goldman Sachs International
Small Cap Fund, Goldman Sachs Japanese Equity Fund,
Institutional Liquid Assets Prime Obligations Portfolio,
Goldman Sachs Real Estate Securities Fund, Goldman Sachs
European Equity Fund, Goldman Sachs Growth Strategy
Portfolio, Goldman Sachs Aggressive Growth Strategy
Portfolio, Goldman Sachs Income Strategy Portfolio, Goldman
Sachs Growth and Income Strategy Portfolio.
Class C Shares Goldman Sachs Global Income Fund, Goldman Sachs Government
Income Fund, Goldman Sachs Municipal Income Fund, Goldman
Sachs High Yield Fund, Goldman Sachs Short Duration
Government Fund, Goldman Sachs Short Duration Tax-Free Fund,
Goldman Sachs Core Fixed Income Fund, Goldman Sachs Balanced
Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs
CORE Small Cap Equity Fund, Goldman Sachs CORE International
Equity Fund, Goldman Sachs CORE Large Cap Growth Fund,
Goldman Sachs Growth and Income Fund, Goldman Sachs Mid-Cap
Equity Fund, Goldman Sachs Capital Growth Fund, Goldman
Sachs Small Cap Value Fund, Goldman Sachs International
Equity Fund, Goldman Sachs Emerging Markets Equity Fund,
Goldman Sachs Asia Growth Fund, Goldman Sachs International
Small Cap Fund, Goldman Sachs Japanese Equity Fund,
Institutional Liquid Assets Prime Obligations Portfolio,
Goldman Sachs Real Estate Securities Fund, Goldman Sachs
European Equity Fund, Goldman Sachs Growth Strategy
Portfolio, Goldman Sachs Aggressive Growth Strategy
Portfolio, Goldman Sachs Income Strategy Portfolio, Goldman
Sachs Growth and Income Strategy Portfolio.
<PAGE>
Institutional Shares: Goldman Sachs Adjustable Rate Government Fund, Goldman
Sachs Short Duration Government Fund, Goldman Sachs Short
Duration Tax-Free Fund, Goldman Sachs Government Income
Fund, Goldman Sachs Municipal Income Fund, Goldman Sachs
Core Fixed Income Fund, Goldman Sachs Global Income Fund,
Goldman Sachs High Yield Fund, Goldman Sachs Balanced
Fund, Goldman Sachs Small Cap Value Fund, Goldman Sachs
Capital Growth Fund, Goldman Sachs CORE Large Cap Growth
Fund, Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs Mid-Cap Equity
Fund, Goldman Sachs International Equity Fund, Goldman
Sachs Emerging Markets Equity Fund, Goldman Sachs Asia
Growth Fund, Goldman Sachs International Small Cap Fund,
Goldman Sachs Japanese Equity Fund, Goldman Sachs-
Financial Square Prime Obligations Fund, Goldman Sachs-
Financial Square Government Fund, Goldman Sachs-Financial
Square Treasury Obligations Fund, Goldman Sachs-Financial
Square Money Market Fund, Goldman Sachs-Financial Square
Premium Money Market Fund, Goldman Sachs-Financial Square
Municipal Money Market Fund, Goldman Sachs-Financial
Square Tax- Free Fund, Goldman Sachs-Financial Square
Federal Fund, Goldman Sachs-Financial Square Treasury
Instruments Fund, Institutional Liquid Assets-Prime
Obligations Portfolio, Institutional Liquid Assets-
Government Portfolio, Institutional Liquid Assets-
Treasury Obligations Portfolio, Institutional Liquid
Assets-Money Market Portfolio, Institutional Liquid
Assets-Federal Portfolio, Institutional Liquid Assets-
Treasury Instruments Portfolio, Institutional Liquid
Assets-Tax-Exempt Diversified Portfolio, Institutional
Liquid Assets-Tax-Exempt New York Portfolio,
Institutional Liquid Assets-Tax-Exempt California
Portfolio, Goldman Sachs Real Estate Securities Fund,
Goldman Sachs European Equity Fund, Goldman Sachs Growth
Strategy Portfolio, Goldman Sachs Aggressive Growth
Strategy Portfolio, Goldman Sachs Income Strategy
Portfolio, Goldman Sachs Growth and Income Strategy
Portfolio.
Service Shares: Goldman Sachs Adjustable Rate Government Fund, Goldman
Sachs Short Duration Government Fund, Goldman Sachs Short
Duration Tax-Free Fund, Goldman Sachs Government Income
Fund, Goldman Sachs Municipal Income Fund, Goldman Sachs
Core Fixed Income Fund, Goldman Sachs Global Income Fund,
Goldman Sachs High Yield Fund, Goldman Sachs Balanced
Fund, Goldman Sachs Small Cap Value Fund, Goldman Sachs
Capital Growth Fund, Goldman Sachs CORE U.S. Equity Fund,
Goldman Sachs CORE Large Cap Growth Fund, Goldman Sachs
Growth and Income Fund, Goldman Sachs Mid-Cap Equity
Fund, Goldman Sachs International Equity Fund, Goldman
Sachs Emerging Markets Equity Fund, Goldman Sachs Asia
Growth Fund, Goldman Sachs International Small Cap Fund,
Goldman Sachs Japanese Equity Fund, Goldman Sachs-
Financial Square Prime Obligations Fund, Goldman Sachs-
Financial Square Government Fund, Goldman Sachs-Financial
Square Treasury Obligations Fund, Goldman Sachs-Financial
Square Money Market Fund, Goldman Sachs-Financial Square
Premium Money Market Fund, Goldman Sachs-Financial Square
Municipal Money Market Fund, Goldman Sachs-Financial
Square Tax-Free Fund, Goldman Sachs-Financial Square
Federal Fund, Goldman Sachs-Financial Square Treasury
Instruments Fund, Institutional Liquid Assets-Prime
Obligations Portfolio, Institutional Liquid Assets-
Government Portfolio, Institutional Liquid Assets-
Treasury Obligations Portfolio, Institutional Liquid
Assets-Money Market Portfolio, Institutional Liquid
Assets-Federal Portfolio, Institutional Liquid Assets-
Treasury Instruments Portfolio, Institutional Liquid
Assets-Tax-Exempt Diversified Portfolio, Institutional
Liquid Assets-Tax-Exempt New York Portfolio,
Institutional Liquid Assets-Tax-Exempt California
Portfolio, Goldman Sachs Real Estate Securities Fund,
Goldman Sachs European Equity Fund, Goldman Sachs Growth
Strategy Portfolio, Goldman Sachs Aggressive Growth
Strategy Portfolio, Goldman Sachs Income Strategy
Portfolio, Goldman Sachs Growth and Income Strategy
Portfolio.
Administration Shares: Goldman Sachs Adjustable Rate Government Fund, Goldman
Sachs Short Duration Government Fund, Goldman Sachs Short
Duration Tax-Free Fund, Goldman Sachs Core
<PAGE>
Fixed Income Fund, Goldman Sachs-Financial Square Prime
Obligations Fund, Goldman Sachs-Financial Square
Government Fund, Goldman Sachs-Financial Square Treasury
Obligations Fund, Goldman Sachs-Financial Square Money
Market Fund, Goldman Sachs-Financial Square Premium Money
Market Fund, Goldman Sachs-Financial Square Municipal
Money Market Fund, Goldman Sachs-Financial Square Tax-
Free Fund, Goldman Sachs-Financial Square Federal Fund,
Goldman Sachs-Financial Square Treasury Instruments Fund,
Institutional Liquid Assets-Prime Obligations Portfolio,
Institutional Liquid Assets-Government Portfolio,
Institutional Liquid Assets-Treasury Obligations
Portfolio, Institutional Liquid Assets-Money Market
Portfolio, Institutional Liquid Assets-Federal Portfolio,
Institutional Liquid Assets-Treasury Instruments
Portfolio, Institutional Liquid Assets-Tax-Exempt
Diversified Portfolio, Institutional Liquid Assets-Tax-
Exempt New York Portfolio and Institutional Liquid
Assets-Tax-Exempt California Portfolio.
Preferred
Administration Shares: Goldman Sachs-Financial Square Prime Obligations Fund,
Goldman Sachs-Financial Square Government Fund, Goldman
Sachs-Financial Square Treasury Obligations Fund, Goldman
Sachs-Financial Square Money Market Fund, Goldman Sachs-
Financial Square Premuim Money Market Fund, Goldman
Sachs-Financial Square Municipal Money Market Fund,
Goldman Sachs-Financial Square Tax-Free Fund, Goldman
Sachs-Financial Square Federal Fund and Goldman Sachs-
Financial Square Treasury Instruments Fund.
Cash Management
Shares: Institutional Liquid Assets-Prime Obligations Portfolio,
Institutional Liquid Assets-Money Market Portfolio,
Institutional Liquid Assets-Government Portfolio,
Institutional Liquid Assets-Tax-Exempt Diversified
Portfolio, Institutional Liquid Assets-Tax-Exempt
California Portfolio, Institutional Liquid Assets-Tax-
Exempt New York Portfolio.
All capitalized terms which are not defined herein shall have the same
meanings as are assigned to those terms in the Declaration.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
date first written above.
/s/ Ashok N. Bakhru
_________________________________________
Ashok N. Bakhru,
as Trustee and not individually
/s/ David B. Ford
________________________________________
David B. Ford,
as Trustee and not individually
/s/ Douglas Grip
________________________________________
Douglas Grip,
as Trustee and not individually
________________________________________
<PAGE>
John P. McNulty,
as Trustee and not individually,
________________________________________
Mary P. McPherson
as Trustee and not individually,
________________________________________
Alan A. Shuch
as Trustee and not individually,
________________________________________
Jackson W. Smart,
as Trustee and not individually,
________________________________________
William H. Springer
as Trustee and not individually,
________________________________________
Richard P. Strubel
as Trustee and not individually,
<PAGE>
EXHIBIT (d)(11)
GOLDMAN SACHS TRUST
4900 Sears Tower
Chicago, Illinois 60606
April 30, 1997
Goldman Sachs Asset Management Goldman Sachs Asset Management
Goldman Sachs Funds Management L.P. International
One New York Plaza, 133 Peterborough CT
New York, New York 10004 London, England
MANAGEMENT AGREEMENT
--------------------
Dear Sirs:
Goldman Sachs Trust (the "Registrant") is organized as a business trust under
the laws of the State of Delaware to engage in the business of an investment
company. The shares of the Registrant ("Shares") may be divided into multiple
series ("Series"), including the Series listed on Annex A (including any Series
added to Annex A in the future, each a "Fund"). Each Series will represent the
interests in a separate portfolio of securities and other assets. Each Series
may be terminated, and additional Series established, from time to time by
action of the Trustees. The Registrant on behalf of each Fund has selected you
to act as the investment adviser and administrator of the Funds and to provide
certain services, as more fully set forth below, and you are willing to act as
such investment adviser and administrator and to perform such services under the
terms and conditions hereinafter set forth. Accordingly, the Registrant agrees
with you as follows:
1. Name of Registrant. The Registrant may use any name including or
------------------
derived from the name "Goldman Sachs" in connection with a Fund only for so long
as this Agreement or any extension, renewal or amendment hereof remains in
effect, including any similar agreement with any organization which shall have
succeeded to your business as investment adviser or administrator. Upon the
termination of this Agreement, the Registrant (to the extent that it lawfully
can) will cause the Funds to cease to use such a name or any other name
indicating that it is advised by or otherwise connected with you or any
organization which shall have so succeeded to your business.
2. Sub-Advisers. You may engage one or more investment advisers which are
-------------
either registered as such or specifically exempt from registration under the
Investment Advisers Act of 1940, as amended, to act as sub-advisers to provide
with respect to the Fund certain services set forth in Paragraphs 3 and 6
hereof, all as shall be set forth in a written contract to which the Registrant,
on behalf of the Fund, and you shall be parties, which contract shall be subject
to approval by the vote of a majority of the Trustees who are not interested
persons of you, the sub-adviser, or of the Registrant, cast in person at a
meeting called for the purpose of voting on such approval and by the vote of a
majority of the outstanding voting securities of the Fund and otherwise
consistent with the terms of the Investment Company Act of 1940 Act, as amended
(the "1940 Act").
3. Management Services.
-------------------
(a) You will regularly provide each Fund with investment research,
advice and supervision and will furnish continuously an investment program
for each Fund consistent with the investment objectives and policies of the
Fund. You will determine from time to time what securities shall be
purchased for a Fund, what securities shall be held or sold by a Fund, and
what portion of a Fund's assets shall be held uninvested as cash, subject
always to the provisions of the Registrant's Declaration of Trust and By-
Laws and of the 1940 Act, and to the
<PAGE>
investment objectives, policies and restrictions of the Fund, as each of
the same shall be from time to time in effect, and subject, further, to
such policies and instructions as the Trustees of the Registrant may from
time to time establish.
(b) Subject to the general supervision of the Trustees of the
Registrant, you will provide certain administrative services to each Fund.
You will, to the extent such services are not required to be performed by
others pursuant to the custodian agreement (or the transfer agency
agreement to the extent that a person other than you is serving thereunder
as the Registrant's transfer agent), (i) provide supervision of all aspects
of each Fund's operations not referred to in paragraph (a) above; (ii)
provide each Fund with personnel to perform such executive, administrative
and clerical services as are reasonably necessary to provide effective
administration of the Fund; (iii) arrange for, at the Registrant's expense,
(a) the preparation for each Fund of all required tax returns, (b) the
preparation and submission of reports to existing shareholders and (c) the
periodic updating of the Fund's prospectuses and statements of additional
information and the preparation of reports filed with the Securities and
Exchange Commission and other regulatory authorities; (iv) maintain all of
the Funds' records and (v) provide the Funds with adequate office space and
all necessary office equipment and services including telephone service,
heat, utilities, stationery supplies and similar items.
(c) You will also provide to the Registrant's Trustees such periodic
and special reports as the Trustees may reasonably request. You shall for
all purposes herein be deemed to be an independent contractor and shall,
except as otherwise expressly provided or authorized, have no authority to
act for or represent the Registrant or the Funds in any way or otherwise be
deemed an agent of the Registrant or the Funds.
(d) You will maintain all books and records with respect to the
Funds' securities transactions required by sub-paragraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than
those records being maintained by the Fund's custodian or transfer agent)
and preserve such records for the periods prescribed therefor by Rule 31a-2
of the 1940 Act. You will also provide to the Registrant's Trustees such
periodic and special reports as the Board may reasonably request.
(e) You will notify the Registrant of any change in your membership
within a reasonable time after such change.
(f) Your services hereunder are not deemed exclusive and you shall
be free to render similar services to others.
4. Allocation of Charges and Expenses. You will pay all costs incurred by you
----------------------------------
in connection with the performance of your duties under paragraph 3. You will
pay the compensation and expenses of all personnel of yours and will make
available, without expense to the Funds, the services of such of your partners,
officers and employees as may duly be elected officers or Trustees of the
Registrant, subject to their individual consent to serve and to any limitations
imposed by law. You will not be required to pay any expenses of any Fund other
than those specifically allocated to you in this paragraph 4. In particular,
but without limiting the generality of the foregoing, you will not be required
to pay: (i) organization expenses of the Funds; (ii) fees and expenses incurred
by the Funds in connection with membership in investment company organizations;
(iii) brokers' commissions; (iv) payment for portfolio pricing services to a
pricing agent, if any; (v) legal, auditing or accounting expenses (including an
allocable portion of the cost of your employees rendering legal and accounting
services to the Fund); (vi) taxes or governmental fees; (vii) the fees and
expenses of the transfer agent of the Registrant; (viii) the cost of preparing
stock certificates or any other expenses, including clerical expenses of issue,
redemption or repurchase of Shares of the Fund; (ix) the expenses of and fees
for registering or qualifying Shares for sale and of maintaining the
registration of the Funds and registering the Registrant as a broker or a
dealer; (x) the fees and expenses of Trustees of the Registrant who are not
affiliated with you; (xi) the cost of preparing and distributing reports and
notices to shareholders, the Securities and Exchange Commission and other
regulatory authorities; (xii) the fees or disbursements of custodians of each
Fund's assets, including
<PAGE>
expenses incurred in the performance of any obligations enumerated by the
Declaration of Trust or By-Laws of the Registrant insofar as they govern
agreements with any such custodian; or (xiii) litigation and indemnification
expenses and other extraordinary expenses not incurred in the ordinary course of
the Fund's business. You shall not be required to pay expenses of activities
which are primarily intended to result in sales of Shares of the Funds.
5. Compensation of the Manager.
---------------------------
(a) For all services to be rendered and payments made as provided in
paragraphs 3 and 4 hereof, the Registrant on behalf of each Fund will pay
you each month a fee at an annual rate equal to the percentage of the
average daily net assets of the Fund set forth with respect to such Fund on
Annex A. The "average daily net assets" of a Fund shall be determined on
the basis set forth in the Fund's prospectus(es) or otherwise consistent
with the 1940 Act and the regulations promulgated thereunder.
(b) In addition to the foregoing, you may from time to time agree
not to impose all or a portion of your fee otherwise payable hereunder (in
advance of the time such fee or portion thereof would otherwise accrue)
and/or undertake to pay or reimburse a Fund for all or a portion of its
expenses not otherwise required to be borne or reimbursed by you. Any such
fee reduction or undertaking may be discontinued or modified by you at any
time.
6. Avoidance of Inconsistent Position. In connection with purchases or sales
----------------------------------
of portfolio securities for the account of the Funds, neither you nor any of
your partners, officers or employees will act as a principal, except as
otherwise permitted by the 1940 Act. You or your agent shall arrange for the
placing of all orders for the purchase and sale of portfolio securities for each
Fund's account with brokers or dealers (including Goldman, Sachs & Co.) selected
by you. In the selection of such brokers or dealers (including Goldman, Sachs &
Co.) and the placing of such orders, you are directed at all times to seek for
the Funds the most favorable execution and net price available. It is also
understood that it is desirable for the Funds that you have access to
supplemental investment and market research and security and economic analyses
provided by brokers who may execute brokerage transactions at a higher cost to a
Fund than may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore, you are
authorized to place orders for the purchase and sale of securities for the Funds
with such brokers, subject to review by the Registrant's Trustees from time to
time with respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to you in
connection with your services to other clients. If any occasion should arise in
which you give any advice to your clients concerning the Shares of the Funds,
you will act solely as investment counsel for such clients and not in any way on
behalf of any Fund. You may, on occasions when you deem the purchase or sale of
a security to be in the best interests of a Fund as well as your other customers
(including any other Series or any other investment company or advisory account
for which you or any of your affiliates acts as an investment adviser),
aggregate, to the extent permitted by applicable laws and regulations, the
securities to be sold or purchased in order to obtain the best net price and the
most favorable execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by you in the manner you consider to be the most equitable and consistent
with your fiduciary obligations to the Fund and to such other customers. In
addition, you are authorized to take into account the sale of shares of the
Registrant in allocating purchase and sale orders for portfolio securities to
brokers or dealers (including brokers and dealers that are affiliated with you),
provided that you believe that the quality of the transaction and the commission
is comparable to what they would be with other qualified firms.
7. Limitation of Liability of Manager and Fund. You shall not be liable for
-------------------------------------------
any error of judgment or mistake of law or for any loss suffered by a Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on your part
in the performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though also
employed by you, who may be or become an employee of and paid by the Registrant
or the Funds shall be deemed, when acting within the scope of his employment by
the Funds, to be acting in such employment solely for the Funds and not as your
employee or agent. The
<PAGE>
Fund shall not be liable for any claims against any other Series of the
Registrant.
8. Duration and Termination of this Agreement. This Agreement shall remain in
------------------------------------------
force as to each Fund until June 30, 1998 and shall continue for periods of one
year thereafter, but only so long as such continuance is specifically approved
at least annually (a) by the vote of a majority of the Trustees who are not
interested persons (as defined in the 1940 Act) of the Registrant and have no
financial interest in this Agreement, cast in person at a meeting called for
the purpose of voting on such approval and (b) by a vote of a majority of the
Trustees of the Registrant or of a majority of the outstanding voting securities
of such Fund. The aforesaid requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder. This
Agreement may, on 60 days written notice to the other party, be terminated in
its entirety or as to a particular Fund at any time without the payment of any
penalty, by the Trustees of the Registrant, by vote of a majority of the
outstanding voting securities of a Fund, or by you. This Agreement shall
automatically terminate in the event of its assignment. In interpreting the
provisions of this Agreement, the definitions contained in Section 2(a) of the
1940 Act (particularly the definitions of "interested person," "assignment" and
"majority of the outstanding voting securities"), as from time to time amended,
shall be applied, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission by any rule, regulation or order.
9. Amendment of this Agreement. No provisions of this Agreement may be
---------------------------
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective as to a Fund until approved by vote of the holders of a majority of
the outstanding voting securities of such Fund and by a majority of the Trustees
of the Registrant, including a majority of the Trustees who are not interested
persons (as defined in the 1940 Act) of the Registrant and have no financial
interest in this Agreement, cast in person at a meeting called for the purpose
of voting on such amendment. Notwithstanding the foregoing, this Agreement may
be amended at any time to add to a new Fund to Annex A provided such amendment
is approved by a majority of the Trustees of the Registrant, including a
majority of the Trustees who are not interested persons (as defined in the 1940
Act) of the Registrant and have no financial interest in this Agreement. This
paragraph does not apply to any agreement described in paragraph 5(b) hereof,
which shall be effective during the period you specify in a prospectus, sticker,
or other document made available to current or prospective shareholders.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
11. Miscellaneous. The captions in this Agreement are included for convenience
-------------
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. This Agreement may be
executed simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
The name Goldman Sachs Trust is the designation of the Trustees for the
time being under a Declaration of Trust dated January 28, 1997 as amended from
time to time, and all persons dealing with the Trust or a Funds must look
solely to the property of the Trust or such Fund for the enforcement of any
claims as none of Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Trust. No
Fund shall be liable for any claims against any other Series.
If you are in agreement with the foregoing, please sign the form of
acceptance on the Registrant counterpart of this letter and return such
counterpart to the Registrant, whereupon this letter shall become a binding
contract.
<PAGE>
Yours very truly,
GOLDMAN SACHS TRUST
Attest: /s/ Michael J. Richman By: /s/ Douglas C. Grip
------------------------------ ------------------------------
Michael J. Richman Douglas C. Grip
Secretary of the Registrant President of the
Registrant
The foregoing Agreement is hereby accepted as of the date thereof.
GOLDMAN SACHS ASSET MANAGEMENT,
A DIVISION OF GOLDMAN, SACHS & CO.
Attest: /s/ Michael J. Richman By: /s/ David B. Ford
------------------------------ ------------------------------
Michael J. Richman David B. Ford
Counsel to the Funds Group Managing Director
GOLDMAN SACHS FUNDS MANAGEMENT L.P.,
EACH AN AFFILIATE OF GOLDMAN, SACHS & CO.
Attest: /s/ Michael J. Richman By: /s/ David B. Ford
------------------------------ ------------------------------
Michael J. Richman David B. Ford
Counsel to the Funds Group Managing Director
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL,
EACH AN AFFILIATE OF GOLDMAN, SACHS & CO.
Attest: /s/ Michael J. Richman By: /s/ David B. Ford
------------------------------ ------------------------------
Michael J. Richman David B. Ford
Counsel to the Funds Group Managing Director
<PAGE>
ANNEX A
GOLDMAN SACHS ASSET MANAGEMENT
Annual Rate
------------
Goldman Sachs Government Income Fund 0.65%
Goldman Sachs Municipal Income Fund 0.55%
Goldman Sachs High Yield Fund 0.70%
Goldman Sachs Balanced Fund 0.65%
Goldman Sachs Growth and Income Fund 0.70%
Goldman Sachs CORE Large Cap Growth Fund 0.75%
Goldman Sachs CORE Small Cap Equity Fund 1.00%
Goldman Sachs CORE International Equity Fund 1.00%
Goldman Sachs Mid Cap Equity Fund 0.75%
Goldman Sachs Small Cap Value Fund 1.00%
Goldman Sachs Growth Strategy Portfolio 0.25%
Goldman Sachs Aggressive Growth Strategy Portfolio 0.25%
Goldman Sachs Income Strategy Portfolio 0.25%
Goldman Sachs Growth and Income Portfolio 0.25%
Goldman Sachs Real Estate Securities Fund 1.00%
Goldman Sachs-Financial Square Prime Obligations Fund 0.205%
Goldman Sachs-Financial Square Money Market Fund 0.205%
Goldman Sachs-Financial Square Premium Money Market Fund 0.205%
Goldman Sachs-Financial Square Treasury Obligations Fund 0.205%
Goldman Sachs-Financial Square Treasury Instruments Fund 0.205%
Goldman Sachs-Financial Square Government Fund 0.205%
Goldman Sachs-Financial Square Federal Fund 0.205%
Goldman Sachs-Financial Square Tax-Free Money Market Fund 0.205%
Goldman Sachs-Financial Square Municipal Money Market Fund 0.205%
GOLDMAN SACHS FUNDS MANAGEMENT L.P.
Goldman Sachs CORE U.S. Equity Fund 0.75%
Goldman Sachs Capital Growth Fund 1.00%
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
Goldman Sachs Global Income Fund 0.90%
Goldman Sachs International Equity Fund 1.00%
Goldman Sachs Emerging Markets Equity Fund 1.20%
Goldman Sachs Asia Growth Fund 1.00%
Goldman Sachs International Small Cap Fund 1.20%
Goldman Sachs Japanese Equity Fund 1.00%
Goldman Sachs European Equity Fund 1.00%
Dated: July 22, 1998
6
<PAGE>
EXHIBIT (e)(2)
GOLDMAN SACHS TRUST
DISTRIBUTION AGREEMENT
April 30, 1997, as amended July 22, 1998
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Goldman Sachs Trust (the "Trust"), an open-end
-----
management investment company organized as a business trust under the laws of
the State of Delaware, and consisting of one or more separate series, has
appointed you, the "Distributor," and that you shall be the exclusive
-----------
distributor in connection with the offering and sale of the shares of beneficial
interest, par value $.001 per share (the "Shares"), corresponding to each of the
------
series of the Trust listed in Exhibit A, as the same may be supplemented from
---------
time to time (each such series, a "Fund"). Each Fund may offer one or more
----
classes of its shares (each a "Class") which Classes shall have such relative
rights and conditions and shall be sold in the manner set forth from time to
time in the Trust's Registration Statements, as defined below. The
organization, administration and policies of each Fund are described in its
respective Prospectuses and SAIs (as those terms are defined below). (This
letter, as amended from time to time, shall be referred to hereinafter as the
"Agreement".)
- ----------
1. DEFINITIONS. (a) The terms which follow, when used in this Agreement, shall
-----------
have the meanings indicated.
"Effective Date" shall mean the date that any Registration Statement or
--------------
any post-effective amendment thereto becomes effective.
"Preliminary Prospectus" shall mean any preliminary prospectus relating
----------------------
to the Shares of a Fund or Funds or one or more Classes included in any
Registration Statement or filed with the Securities and Exchange Commission
(the "Commission") pursuant to Rule 497(a).
"Prospectus" shall mean any prospectus relating to the Shares of a Fund
----------
or Funds or one or more Classes, filed with the Commission pursuant to Rule
497 or, if no filing pursuant to Rule 497 is required, the form of final
prospectus relating thereto included in any Registration Statement, in each
case together with any amendments or supplements thereto.
"Registration Statement" shall mean any registration statement on Form
----------------------
N-1A relating to the Shares of a Fund, including all exhibits thereto, as
of the Effective Date of the most recent post-effective amendment thereto.
The registration statements of the Trust may be separately filed with the
Commission according to its fixed income, equity and money market fund
offerings.
"Rule 497" refers to such rule (or any successor rule or rules) under
--------
the Securities Act (as defined in Section 2 below).
"SAI" shall mean any statement of additional information relating to the
---
Shares of a Fund or Funds or one or more Classes, filed with the Commission
pursuant to Rule 497 or, if no filing pursuant to Rule 497 is required, the
final statement of additional information included in any Registration
Statement.
<PAGE>
The "Initial Acceptance Date" of any Fund shall mean the first date on
-----------------------
which the Trust sells Shares of such Fund pursuant to any Registration
Statement.
References in this Agreement to "Rules and Regulations" shall be deemed
---------------------
to be references to such rules and regulations as then in effect, and
references to this Agreement and the Fund Agreements (as defined in Section
2 below), shall be deemed to be references to such agreements as then in
effect.
2. REPRESENTATIONS AND WARRANTIES. The Trust represents and warrants to and
------------------------------
agrees with you, for your benefit and the benefit of each Authorized Dealer
(as defined in Section 3 below), as set forth below in this Section 2. Each
of the representations, warranties and agreements made in this Section 2
shall be deemed made on the date hereof, on the date of any filing of any
Prospectus pursuant to Rule 497 and any Effective Date after the date
hereof, with the same effect as if made on each such date.
(a) The Trust meets the requirements for use of Form N-1A under the Securities
Act of 1933, as amended (the "Securities Act"), the Investment Company Act
--------------
of 1940, as amended (the "Investment Company Act"), and the Rules and
----------------------
Regulations of the Commission under each such Act and in respect of said
form (or of such successor form as the Commission may adopt). The Trust
has filed with the Commission Registration Statements (File Number 33-
17619) on Form N-1A with respect to an indefinite number of Shares of the
Funds and is duly registered as an open-end management investment company.
Prior to the date hereof, the Trust has filed post-effective amendments to
the Registration Statements, including related Preliminary Prospectuses,
for the registration under the Securities Act and the Investment Company
Act of the offering and sale of the Shares of the Funds, each of which has
previously been furnished to you. Each such amendment has become effective
and no stop order suspending the effectiveness of any such amendment has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission.
(b) The Trust's notification of registration on Form N-8A (as amended) complies
with the applicable requirements of the Investment Company Act and the
Rules and Regulations thereunder.
(c) Each Registration Statement, Prospectus and SAI conform, and any further
amendments or supplements to any Registration Statement, Prospectus or SAI
will conform, in all material respects, with the Securities Act and
Investment Company Act and the Rules and Regulations thereunder; the
Prospectuses and the SAIs do not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and, on each Effective Date, the Registration
Statements did not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; provided,
--------
however, that the Trust makes no representations or warranties as to the
-------
information contained in or omitted from any Registration Statement,
Prospectus or SAI in reliance upon and in conformity with information
furnished in writing to the Trust by you (with respect to information
relating solely to your role as distributor of the Shares of the Funds)
expressly for use therein.
(d) No order preventing or suspending the use of any Preliminary Prospectus has
been issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements
of the Securities Act and the Rules and Regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this
-2-
<PAGE>
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Trust by you (with respect to information relating solely to
your role as the exclusive distributor of the Shares of the Funds)
expressly for use therein.
(e) The Trust has been duly created and is lawfully and validly existing as a
business trust under the laws of the State of Delaware, and has, on the
date hereof, and will have, on and after the date hereof, full power and
authority to own its properties and conduct its business as described in
each Registration Statement, Prospectus and SAI, and is duly qualified to
do business under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts
material business.
(f) The Trust's authorized capitalization is as set forth in the Registration
Statements. Issuance of the Shares of the Funds as contemplated by this
Agreement and by each Prospectus and SAI has been duly and validly
authorized, and the Shares of the Funds, when issued and paid for as
contemplated hereby and thereby, will be fully-paid and, except as
contemplated by the Prospectus and SAI, nonassessable and will conform to
the description thereof contained in the corresponding Prospectus and SAI.
The holders of outstanding shares of each Fund are not entitled to
preemptive or other rights to subscribe for the Shares of any Fund, other
than as contemplated by the Prospectus and SAI relating to each Fund.
(g) This Agreement has been duly authorized, executed and delivered by the
Trust.
(h) On or prior to the Initial Acceptance Date, all of the agreements described
in each Prospectus and SAI relating to the Fund or Funds whose Shares are
first being sold on such date (collectively, the "Fund Agreements") will
---------------
have been duly authorized, executed and delivered by the Trust, and will
comply in all material respects with the Investment Company Act and the
Rules and Regulations thereunder.
(i) The Fund Agreements constitute or will constitute, on and after the Initial
Acceptance Date, assuming due authorization, execution and delivery by the
parties thereto other than the Trust, valid and legally binding
instruments, enforceable in accordance with their respective terms,
subject, as to enforceability, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(j) No consent, approval, authorization or order of any court or governmental
agency or body is or shall be required, as the case may be, for the
consummation from time to time of the transactions contemplated by this
Agreement and the Fund Agreements, except such as may be required (i) under
the Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Investment Company Act, the Rules and Regulations
-------------
under each of the foregoing or the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD") (any of which that
----
were required before offers were made will have been obtained before such
offers were made and all of which will have been obtained, with respect to
each Fund, by the Effective Date of the post-effective amendment relating
to the Fund, except for those which become required under such acts or
rules or any other law or regulation after the Fund's Effective Date but
that were not required before such Effective Date, all of which shall be
obtained in a timely manner) or (ii) state securities laws of any
jurisdiction in connection with the issuance, offer or redemption of the
Shares of each Fund by the Trust.
(k) The operations and activities of the Trust and each Fund as contemplated by
the Prospectuses and the SAIs, the performance by the Trust and each Fund
of this Agreement and the Fund Agreements,
-3-
<PAGE>
the making of the offer or the sale of Shares of each Fund and consummation
from time to time of such sales, the redemption of Shares of each Fund, or
any other transactions contemplated herein, in the Fund Agreements, in the
Prospectuses or in the SAIs, will not conflict with, result in a breach of,
or constitute a default under, the declaration of trust or the Trust's By-
laws or, in any material respect, the terms of any other agreement or
instrument to which the Trust is a party or by which it is bound, or any
order or regulation applicable to the Trust of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Trust.
(l) There is not pending, or to the best knowledge of the Trust, threatened,
any action, suit or proceeding before any court or governmental agency,
authority or body or any arbitrator to which the Trust is (or, to the best
knowledge of the Trust, is threatened to be) a party, of a character
required to be described in any Registration Statement, Prospectus or SAI
which is not described as required.
(m) There is no contract or other document of a character required to be
described in any Registration Statement, Prospectus or SAI, or to be filed
as an exhibit, which is not described or filed as required.
(n) Except as stated or contemplated in the Registration Statements,
Prospectuses and SAIs, (i) the Trust has not incurred any liabilities or
obligations, direct or contingent, or entered into any transactions,
whether or not in the ordinary course of business, that are material to the
Trust, (ii) there has not been any material adverse change, or, any
development involving a prospective material adverse change, in the
condition (financial or other) of the Trust, (iii) there has been no
dividend or distribution paid or declared in respect of the Trust, and (iv)
the Trust has not incurred any indebtedness for borrowed money.
(o) Each Fund will elect or has elected to be treated as a regulated investment
company as defined in Section 851(a) of the Internal Revenue Code of 1986
for its first taxable year and will operate so as to qualify as such in its
current and all subsequent taxable years.
(p) Except as stated or contemplated in any Prospectus or SAI, the Trust owns
all of its assets free and clear in all material respects of all liens,
security interests, pledges, mortgages, charges and other encumbrances or
defects.
3. SELECTION OF AUTHORIZED DEALERS; OTHER SERVICES AS DISTRIBUTOR.
--------------------------------------------------------------
(a) With respect to each Class subject to a sales charge, the Distributor shall
have the right on the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions herein
set forth, to make arrangements for (i) securities dealers (including bank-
affiliated dealers) that are members in good standing of the NASD, (ii)
foreign securities dealers which are not eligible for membership in the
NASD who have agreed to comply as though they were NASD members with the
provisions of Sections 2730, IM-2730, 2740, IM-2740, 2750 and IM-2750 of
the Conduct Rules of the NASD and with Section 2420 thereof as that Section
applies to a non-NASD member broker or dealer in a foreign country, or
(iii) banks, as defined in Section 3(a)(6) of the Exchange Act, which are
duly organized and validly existing in good standing under the laws of the
jurisdiction in which they are organized, to solicit from the public orders
to purchase Shares of the Funds. Such securities dealers and banks
("Authorized Dealers") selected by you in accordance with dealer agreements
--------------------
with you ("Dealer Agreements") shall solicit such orders pursuant to their
-----------------
respective Dealer Agreements. You will act only on your own behalf as
principal in entering into each such Dealer Agreement. With respect to
each Class that is not subject to a sales charge, you shall act as
Principal Underwriter of such shares.
(b) You acknowledge that the only information provided to you by the Trust is
that contained in each
-4-
<PAGE>
Registration Statement, Prospectus and SAI. Neither you nor any Authorized
Dealer nor any other person is authorized by the Trust to give any
information or to make any representations, other than those contained in
the relevant Registration Statement, Prospectus and SAI and any sales
literature approved by appropriate representatives of the Trust. You may
undertake or arrange for such advertising and promotion as you believe is
reasonable in connection with the solicitation of orders to purchase Shares
of a Fund; provided, however, that you will provide the Trust with and
-------- -------
obtain the Trust's approval of copies of any advertising and promotional
materials approved, produced or used by you prior to their use. You will
file such materials with the Commission and the NASD as may be required by
the Exchange Act and the Investment Company Act and the Rules and
Regulations thereunder and by the rules of the NASD.
(c) You agree to perform such services as are described in each Registration
Statement, Prospectus and SAI as to be performed by the Distributor
including, without limitation, distributing Account Information Forms.
(d) All of your activities as distributor of the Shares of the Funds shall
comply, in all material respects, with all applicable laws, Rules and
Regulations, including, without limitation, all rules and regulations made
or adopted by the Commission or by any securities association registered
under the Exchange Act, including the NASD, as in effect from time to time.
4. OFFERING BY THE DISTRIBUTOR.
---------------------------
(a) You will act as agent for the Trust in the distribution of Shares of the
Funds and you agree to use your best efforts to offer and sell Shares of
the Funds subject to a sales charge to the public at the public offering
price as set forth in the relevant Prospectus, subject to any waivers or
reductions of any applicable sales charges, dealer allowances and fees as
you and each of the Authorized Dealers, if any, shall have agreed to in
writing. You may also subscribe for Shares of a Fund as principals for
resale to the public or for resale to Authorized Dealers. You shall devote
reasonable time and effort to effect sales of Shares of the Funds, but you
shall not be obligated to sell any specific number of Shares. Nothing
contained herein shall prevent you from entering into like distribution
arrangements with other investment companies.
(b) The Distributor is authorized to purchase Shares of any Fund presented to
them by Authorized Dealers at the price determined in accordance with, and
in the manner set forth in, the Prospectus for such Fund.
(c) Unless you are otherwise notified by the Trust, any right granted to you to
accept orders for Shares of any Fund or to make sales on behalf of the
Trust or to purchase Shares of any Fund for resale will not apply to (i)
Shares issued in connection with the merger or consolidation of any other
investment company with the Trust or its acquisition, by purchase or
otherwise, of all or substantially all of the assets of any investment
company or substantially all the outstanding securities of any such
company, and (ii) Shares that may be offered by the Trust to shareholders
by virtue of their being such shareholders.
5. COMPENSATION.
------------
(a) With respect to any Class which is sold to the public subject to a sales
charge, you will be entitled to receive that portion of the sales charges
applicable to sales of Shares of such Class and not reallocated to
Authorized Dealers as set forth in the relevant Prospectus, subject to any
waivers or
-5-
<PAGE>
reductions of such sales charges, if any, in accordance with Section 4 of
this Agreement. In addition, you shall be entitled to receive the entire
--------------------------------------------------------
amount of any contingent deferred sales charge imposed and paid by
------------------------------------------------------------------
shareholders upon the redemption or repurchase of Shares of any Class
---------------------------------------------------------------------
subject to such charges as set forth in the relevant Prospectus, subject to
---------------------------------------------------------------------------
any waivers or reductions of such sales charges that may be disclosed in
------------------------------------------------------------------------
such Prospectus. With respect to any shares sold subject to a contingent
---------------
deferred sales charge, such charge shall be payable in such amounts as
disclosed in the applicable Prospectus as the same was in effect at the
time of sale. The right to receive any contingent deferred sales charge
granted hereunder shall apply to all shares sold during the term of this
Agreement, and to the extent permitted by the Investment Company Act and
other applicable laws, shall continue with respect to such shares
notwithstanding termination of this Agreement. In connection with each
transaction in which you are acting as an Authorized Dealer, you also will
be entitled to that portion of the sales charges, if any, payable to an
Authorized Dealer in such transaction.
(b) The Trust has entered into Plans of Distribution pursuant to Rule 12b-1
under the 1940 Act ("Rule 12b-1 Plans") with respect to certain classes of
certain Funds. The Trust shall pay to you as distributor of such Classes
the compensation pursuant to the Rule 12b-1 Plans as shall be set forth
from time to time in the Prospectuses and SAIs and provided for under the
Rule 12b-1 Plan.
(c) The amounts payable as compensation pursuant to this Section 5 shall be
subject to the limitations in Section 2830 of the Conduct Rules of the
NASD.
6. UNDERTAKINGS. The Trust agrees with you, for your benefit, that:
------------
(a) The Trust shall sell Shares of the Funds so long as it has such Shares
available for sale and shall cause the transfer agent (the "Transfer
--------
Agent") to record on its books the ownership of such Shares registered in
such names and amounts as you have requested in writing or other means, as
promptly as practicable after receipt by the Trust of the payment therefor.
The Trust will make such filings under the Investment Company Act with, and
pay such fees to, the Commission as are necessary to register Shares of any
Fund sold by you on behalf of the Trust. Prior to the termination of this
Agreement, the Trust will not file any amendment to any Registration
Statement or amendment or supplement to any Prospectus or SAI (whether
pursuant to the Securities Act, the Investment Company Act, or otherwise)
without prior notice to you; provided, however, that nothing contained in
-------- -------
this Agreement shall in any way limit the Trust's right to file such
amendments to any Registration Statement, or amendments or supplements to
any Prospectus or SAI as the Trust may deem advisable, such right being in
all respects absolute and unconditional, it being understood that this
proviso shall not relieve the Trust of its obligation to give prior notice
of any such amendment or supplement to you. Subject to the foregoing
sentence, if the filing of any Prospectus or SAI, as the case may be,
contained in any Registration Statement at the relevant Effective Date, or
any amendment or supplement thereto, is required under Rule 497, the Trust
will cause such Prospectus or SAI, and any amendment or supplement thereto,
to be filed with the Commission pursuant to the applicable paragraph of
Rule 497 within the time period prescribed and will, if requested, provide
evidence satisfactory to you of such timely filing. The Trust will
promptly advise you (i) when such Prospectus or SAI shall have been filed
(if required) with the Commission pursuant to Rule 497, (ii) when, prior to
termination of this Agreement, any amendment to any Registration Statement
shall have been filed or become effective, (iii) of any request by the
Commission for any amendment of any Registration Statement or amendment or
supplement to any Prospectus or SAI or for any additional information
relating to or that could affect disclosure in any of the foregoing, (iv)
of the issuance by the Commission of any order suspending the effectiveness
of any Registration Statement, or suspending the registration of the Trust
under the Investment Company Act, or the institution or (to the best
knowledge of the Trust) threatening of any proceeding for that purpose, and
(v) of the receipt by the
-6-
<PAGE>
Trust of any notification with respect to the suspension of the
qualification of the offer or sale of Shares of a Fund in any jurisdiction
or the initiation or (to the best knowledge of the Trust) threatening of
any proceeding for such purpose. The Trust will use its best efforts to
prevent the issuance of any such order or suspension and, if issued, to
obtain as soon as possible the withdrawal or suspension thereof.
(b) If, at any time when a Prospectus or SAI is required to be delivered under
the Securities Act, any event occurs as a result of which such Prospectus
or SAI would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made not misleading, or if
it shall be necessary to amend any Registration Statement or amend or
supplement any Prospectus or SAI to comply with the Securities Act, the
Investment Company Act or the Rules and Regulations thereunder, the Trust
will notify you promptly of any such circumstance and promptly will prepare
and file with the Commission, subject to the third sentence of Section
6(a), an amendment or supplement which will correct such statement or
omission or effect such compliance.
(c) As soon as practicable (giving effect to the normal periodic reporting
requirements under the Investment Company Act and the Rules and Regulations
thereunder), the Trust will make generally available to its shareholders
and, subject to Section 8 of this Agreement, to you (with sufficient copies
for the Authorized Dealers), a report containing the financial statements
required to be included in such reports under Section 30(d) of the
Investment Company Act and Rule 30d-1 thereunder.
(d) Subject to Section 8 of this Agreement, the Trust will furnish to you as
many conformed copies of the Registration Statements including exhibits
thereto, on each Effective Date, as you may reasonably request for yourself
and for delivery to the Authorized Dealers and, so long as delivery of a
Prospectus or SAI by you or any Authorized Dealer may be required by law,
the number of copies of each Prospectus and each SAI as you may reasonably
request for yourself and for delivery to the Authorized Dealers.
(e) To the extent required by applicable state law, the Trust will use its best
efforts to arrange for the qualification of an appropriate number of the
Shares of the Funds for sale under the laws of such of the 50 states of the
United States, the District of Columbia, the Commonwealth of Puerto Rico,
the Territory of Guam, and such other jurisdiction as you and the Trust may
approve, and will maintain such qualifications in effect as long as may be
reasonably requested by you, provided that the Trust shall not be required
in connection herewith or as a condition hereto to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction. You shall furnish such information and other material
relating to your affairs and activities as may be required by the Trust in
connection with such qualifications.
(f) The Trust shall keep you fully informed with respect to its affairs and,
subject to Section 8 of this Agreement, the Trust, if so requested, will
furnish to you, as soon as they are available (with sufficient copies for
the Authorized Dealers), copies of all reports, communications and
financial statements sent by the Trust to its shareholders or filed by, or
on behalf of, the Trust with the Commission.
(g) The Trust agrees that on each date the Trust is required to file with the
Commission a notice under paragraph (b)(1) of Rule 24f-2 under the
Investment Company Act, the Trust, if so requested, shall furnish to you a
copy of the opinion of counsel for the Trust required by such Rule to the
effect that the Shares covered by the notice were legally issued, fully
paid and nonassessable. The Trust further agrees that if, in connection
with the filing of any post-effective amendment to any Registration
Statement after the date of this Agreement:
-7-
<PAGE>
(i) a change is made to the statements under the caption "Shares of the
Fund" in any Prospectus or SAI that is deemed material by you, the Trust,
if so requested, shall furnish to you an opinion of counsel for the Trust,
dated the date of such post-effective amendment, to the effect of paragraph
2 (to the extent it relates to the description of the Shares);
(ii) the Fund Agreements are amended or modified in any manner, the Trust,
if so requested, shall furnish to you an opinion of counsel for the Trust,
dated the date of such post-effective amendment; or
(iii) any change is made to the statements under the caption "Taxation" in
any Prospectus or SAI, the Trust, if so requested, shall furnish to you an
opinion of counsel for the Trust, dated the date of such post-effective
amendment.
Any opinion or statement furnished pursuant to this Section 6(g) shall be
modified as necessary to relate to this Agreement and the Fund Agreements
and the Rules and Regulations as then in effect and shall state that the
Authorized Dealers may rely on it.
(h) The Trust, if so requested, shall furnish to you on each subsequent
Effective Date with respect to an amendment of a Registration Statement
which first includes certified financial statements for the preceding
fiscal year, in respect of a Fund, a copy of the report of the Trust's
independent public accountants with respect to the financial statements and
selected per share data and ratios relating to such Fund, addressed to you.
The Trust further agrees that the Trust, if so requested, shall furnish to
you (i) on each date on which the Trust, pursuant to the preceding
sentence, furnishes to you a report of its independent public accountants,
a certificate of its treasurer or assistant treasurer in a form reasonably
satisfactory to you describing in reasonable detail how the figures
included under the captions "Portfolio Transactions" and "Performance
Information" (or similar captions) in the Prospectus or SAI of such Fund
and the figures relating to the aggregate amounts of remuneration paid to
officers, trustees and members of the advisory board and affiliated persons
thereof (as required by Section 30(d)(5) of the Investment Company Act)
were calculated and confirming that such calculations are in conformity
with the Rules and Regulations under the Investment Company Act and (ii) on
each date the Trust files with the Commission the Trust's required semi-
annual financial statements, a certificate of its treasurer or assistant
treasurer in a form reasonably satisfactory to you, describing the manner
in which such financial statements were prepared and confirming that such
financial statements have been prepared in conformity with the Rules and
Regulations under the Investment Company Act.
7. CONDITIONS TO YOUR OBLIGATIONS AS DISTRIBUTOR AND PRINCIPAL UNDERWRITER.
-----------------------------------------------------------------------
Your obligations as distributor of the Shares of the Funds shall be subject
to the accuracy of the representations and warranties on the part of the
Trust contained herein as of the dates when made or deemed to have been
made, to the accuracy in all material respects of the statements made in
any certificates, letters or opinions delivered pursuant to the provisions
of Sections 6 or 7 of this Agreement, to the performance by the Trust of
its obligations hereunder and to the following additional conditions:
(a) If filing of any Prospectus or SAI, or any amendment or supplement to any
Prospectus or SAI, or any other document is required pursuant to any
applicable provision of Rule 497, such Prospectus or SAI, or any such
amendment or supplement and other document will be filed in the manner and
within the time period required by the applicable provision of Rule 497;
and no order suspending the effectiveness of the amendment shall have been
issued and no proceedings for that purpose shall have been instituted or,
to the best knowledge of the Trust, threatened and the Trust shall have
complied with any request of the Commission for additional information (to
be included in the relevant
-8-
<PAGE>
Registration Statement, Prospectus, SAI or as the Commission otherwise
shall have requested).
(b) At the Initial Acceptance Date with respect to each Fund, you shall have
received from counsel to the Distributors, if so requested, such opinion or
opinions, dated the Initial Acceptance Date, with respect to the issuance
and sale of the Shares, the relevant Registration Statement, Prospectus and
SAI and other related matters as you may reasonably require, and the Trust
shall have furnished to such counsel such documents as they may request for
the purpose of enabling them to pass upon such matters. Each such opinion
shall state that the Authorized Dealers may rely on it.
(c) There shall not have been any change, or any development involving a
prospective change, in or affecting the Trust the effect of which in any
case is, in your good faith judgment, so material and adverse as to make it
impractical or inadvisable to proceed with the offering of Shares of the
Funds as contemplated by this Agreement.
(d) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; (iii) the outbreak or escalation of
hostilities involving the United States or the declaration of a national
emergency or war if the effect of any such event specified in this Clause
(iii) in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares of a Fund on the
terms and in the manner contemplated in any Prospectus.
(e) The Trust shall have furnished to you such further information,
certificates and documents as you may have reasonably requested.
If any of the conditions specified in this Section 7 shall not have been
fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions, certificates or letters mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to you, this Agreement and
all your obligations hereunder may be cancelled by you. In the event of
such cancellation, the Trust shall remain liable for the expenses set forth
in Section 8.
8. EXPENSES.
--------
(a) The Trust will pay (or will enter into arrangements providing that parties
other than you will pay) all fees and expenses:
(1) in connection with the preparation, setting in type and filing of the
Registration Statements (including Prospectuses and SAIs) under the
Securities Act or the Investment Company Act, or both, and any
amendments or supplements thereto that may be made from time to time;
(2) in connection with the registration and qualification of Shares of the
Funds for sale in the various jurisdictions in which it is determined
to be advisable to qualify such Shares of the Funds for sale
(including registering the Trust as a broker or dealer or any officer
of the Trust or other person as agent or salesman of the Trust in any
such jurisdictions);
(3) of preparing, setting in type, printing and mailing any notice, proxy
statement, report, Prospectus, SAI or other communication to
shareholders in their capacity as such;
(4) of preparing, setting in type, printing and mailing Prospectuses
annually, and any supplements thereto, to existing shareholders;
-9-
<PAGE>
(5) in connection with the issue and transfer of Shares of the Funds
resulting from the acceptance by you of orders to purchase Shares of
the Funds placed with you by investors, including the expenses of
printing and mailing confirmations of such purchase orders and the
expenses of printing and mailing a Prospectus included with the
confirmation of such orders and, if requested by the purchaser, an
SAI;
(6) of any issue taxes or any initial transfer taxes;
(7) of WATS (or equivalent) telephone lines other than the portion
allocated to you in this Section 8;
(8) of wiring funds in payment of Share purchases or in satisfaction of
redemption or repurchase requests, unless such expenses are paid for
by the investor or shareholder who initiates the transaction;
(9) of the cost of printing and postage of business reply envelopes sent
to shareholders;
(10) of one of more CRT terminals connected with the computer facilities of
the Transfer Agent other than the portion allocated to you in this
Section 8;
(11) permitted to be paid or assumed by any Fund or Funds or any Class
thereof pursuant to (a) a Rule 12b-1 Plan adopted by such Fund or
Funds in conformity with the requirements of Rule 12b-1 under the
Investment Company Act ("Rule 12b-1") or any successor rule,
----------
notwithstanding any other provision to the contrary herein or (b) any
other plan adopted by a Fund providing for account administration or
shareholder liaison services (a "Service Plan");
(12) of the expense of setting in type, printing and postage of any
periodic newsletter to shareholders other than the portion allocated
to you in this Section 8; and
(13) of the salaries and overhead of persons employed by you as shareholder
representatives other than the portion allocated to you in this
Section 8.
(b) Except as provided in any Rule 12b-1 Plan or Service Plan, you shall pay or
arrange for the payment of all fees and expenses:
(1) of printing and distributing any Prospectuses or reports prepared for
your use in connection with the offering of Shares of the Funds to the
public;
(2) of preparing, setting in type, printing and mailing any other
literature used by you in connection with the offering of Shares of
the Funds to the public;
(3) of advertising in connection with the offering of Shares of the Funds
to the public;
(4) incurred in connection with your registration as a broker or dealer or
the registration or qualification of your officers, partners,
directors, agents or representatives under Federal and state laws;
(5) of that portion of WATS (or equivalent) telephone lines allocated to
you on the basis of use by investors (but not shareholders) who
request information or Prospectuses;
-10-
<PAGE>
(6) of that portion of the expense of setting in type, printing and
postage of any periodic newsletter to shareholders attributable to
promotional material included in such newsletter at your request
concerning investment companies other than the Trust or concerning the
Trust to the extent you are required to assume the expense thereof
pursuant to this Section 8, except such material which is limited to
information, such as listings of other investment companies and their
investment objectives, given in connection with the exchange privilege
as from time to time described in the Prospectuses;
(7) of that portion of the salaries and overhead of persons employed by
you as shareholder representatives attributable to the time spent by
such persons in responding to requests from investors, but not
shareholders, for information about the Trust;
(8) of any activity which is primarily intended to result in the sale of
Shares of any Class of a Fund, unless a 12b-1 Plan shall be in effect
which provides that shares of such Classes shall bear some or all of
such expenses, in which case such Class shall bear such expenses in
accordance with such Plan; and
(9) of that portion of one or more CRT terminals connected with the
computer facilities of the Transfer Agent attributable to your use of
such terminal(s) to gain access to such of the Transfer Agent's
records as also serve as your records.
Expenses which are to be allocated between you and the Trust shall be
allocated pursuant to reasonable procedures or formulae mutually agreed
upon from time to time, which procedures or formulae shall to the extent
practicable reflect studies of relevant empirical data.
9. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Trust will indemnify you and hold you harmless against any losses,
claims, damages or liabilities, to which you may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, Registration Statement,
Prospectus, or SAI or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statement therein not misleading, and will
reimburse you for any legal or other expenses reasonably incurred by you in
connection with investigating or defending any such action or claim;
provided, however, that the Trust shall not be liable in any such case to
-------- -------
the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any Registration Statement, any Preliminary
Prospectus, or any Prospectus or SAI in reliance upon and in conformity
with written information furnished to the Trust by you expressly for use
therein.
(b) You will indemnify and hold harmless the Trust against any losses, claims,
damages or liabilities to which the Trust may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof), arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, any Preliminary Prospectus, or any
Prospectus or SAI, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Registration Statement, any Preliminary Prospectus, or any Prospectus or
SAI in reliance upon and in conformity with written information furnished
to the Trust by you expressly for use therein; and will reimburse the
-11-
<PAGE>
Trust for any legal or other expenses reasonably incurred by the Trust in
connection with investigating or defending any such action or claim.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof the indemnifying party
shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs
of investigation.
(d) If the indemnification provided for in this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Trust on the one hand and you on the
other from the offering of the Shares of the Fund or Funds in respect of
which such losses, claims, damages or liabilities (or actions in respect
thereof) arose. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Trust on the
one hand and you on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) as well as any other relative equitable
considerations. The relative benefits received by the Trust on the one
hand and you on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Shares of the relevant
Funds (before deducting expenses) received by the Trust bear to the total
compensation received by you in selling Shares of such Funds under this
Agreement, including any sales charge as set forth in the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Trust on the one hand or you on the other and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Trust
and you agree that it would not be just and equitable if the contributions
pursuant to this subsection (d) were determined by pro rata allocation or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), you shall not be required to contribute
any amount in excess of the amount by which the total price at which the
Shares of the relevant Funds sold by you and distributed to the public were
offered to the public exceeds the amount of any damages which you have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
-12-
<PAGE>
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) The obligations of the Trust under this Section 9 shall be in addition to
any liability which the Trust may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls you within
the meaning of the Securities Act; and your obligations under this Section
9 shall be in addition to any liability which you may otherwise have and
shall extend, upon the same terms and conditions, to each trustee or
officer of the Trust (including any person who, with his consent, is named
in the relevant Registration Statement as about to become a trustee of the
Trust) and to each person, if any, who controls the Trust within the
meaning of the Securities Act.
(f) It is understood, however, that nothing in this paragraph 9 shall protect
any indemnified party against, or entitle any indemnified party to
indemnification against, or contribution with respect to, any liability to
the Trust or its shareholders to which such indemnified party is subject,
by reason of its willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of any reckless disregard of its
obligations and duties, under this Agreement, or otherwise to an extent or
in a manner that is inconsistent with Section 17(i) of the Investment
Company Act.
10. TERM.
----
(a) This Agreement shall commence on the date first set forth above and
continue in effect until June 30, 1998 and then for successive annual
periods after June 30, 1998, provided such continuance is specifically
approved at least annually by (i) the Trustees of the Trust or (ii) a vote
of a majority (as defined in the Investment Company Act) of the Fund's
outstanding voting securities, provided that in either event the
continuance is also approved by a vote of a majority of the Trustees of the
Trust who are not interested persons (as defined in the Investment Company
Act) of the Trust or any party to this Agreement, by vote cast in person at
a meeting called for the purpose of voting on such approval. The Trust
authorizes, if and when you so determine, you to assign to a third party
any payments with respect to one or more Classes of Shares that you are
entitled to receive for your services hereunder, including any payments of
initial or deferred sales charges or payments in accordance with a Rule
12b-1 or Service Plan so long as such Plan is in effect, free and clear of
any offset, defense or counterclaim the Trust may have against you and
except to the extent that any change or modification after the date hereof
of (x) the provisions of the Investment Company Act, the Rules and
Regulations thereunder or other applicable law or (y) any interpretation of
the Investment Company Act, the Rules and Regulations thereunder or other
applicable law shall restrict your right to make such transfer free and
clear of any offset, defense or counterclaim.
(b) The sale of Shares of the Funds in accordance with the terms of this
Agreement shall be subject to termination or suspension in the absolute
discretion of the Trust, by notice given to you as set forth in Section 12
hereof.
(c) This Agreement will terminate automatically in the event of its assignment
(as defined in the Investment Company Act). In addition, this Agreement
may be terminated by the Trust at any time with respect to any Class of its
Shares, without the payment of any penalty, by vote of a majority of the
Trustees of the Trust who are not interested persons (as defined in the
Investment Company Act) of the Trust or by a vote of a majority of the
outstanding voting securities of such Class on 60 days' written notice.
11. REPRESENTATION AND INDEMNITIES TO SURVIVE. The respective agreements,
-----------------------------------------
representations, warranties, indemnities and other statements of the Trust
and you set forth in or made pursuant to this Agreement will, to the extent
permitted by applicable law, remain in full force and effect, regardless of
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<PAGE>
any investigation made by or on behalf of you, any Authorized Dealer or the
Trust, or any of the controlling persons referred to in Section 9 hereof,
and will survive the offer of the Shares of the Funds. The provisions of
Section 8, 9 and 11 hereof and your right to receive any contingent
deferred sale charges shall, to the extent permitted by applicable law,
survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and effective
-------
only on receipt, and, if sent to you, mailed, delivered or telegraphed and
confirmed to you at Goldman, Sachs & Co., 85 Broad Street, York, New York
10004, Attention: Registration Department (Distributors - Goldman Sachs
Funds) or, if sent to the Trust, mailed, delivered or telegraphed and
confirmed to it at Goldman Sachs Trust, 4900 Sears Tower, Chicago, Ill.
60606, Attention: Secretary.
13. AFFILIATES. The Trust recognizes that your partners, officers and
----------
employees may from time to time serve as directors, trustees, officers and
employees of corporations and business entities (including other investment
companies), and that you or your affiliates may enter into distribution or
other agreements with other corporations and business entities.
14. SUCCESSORS. This Agreement will inure to the benefit of and be binding
----------
upon the parties hereto and their respective successors and, to the extent
set forth herein, each of the officers, trustees and controlling persons
referred to in Section 9 hereof, and no other person will have any right or
obligation hereunder.
15. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. MISCELLANEOUS. The captions in this Agreement are included for convenience
-------------
of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. This Agreement
may be executed simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
The name "Goldman Sachs Trust" is the designation of the Trustees for the
time being under a Declaration of Trust dated January 28, 1997, as amended
from time to time, and all persons dealing with the Trust must look solely
to the property of the Trust for the enforcement of any claims against the
Trust as neither the Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Trust. No
series of the Trust shall be liable for any claims against any other series
of the Trust.
-14-
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement between you and
the Trust, and, to the extent set forth herein, shall be for the benefit of each
Authorized Dealer.
Very truly yours,
GOLDMAN SACHS TRUST
/s/ Douglas C. Grip
By: ___________________________
Name: Douglas C. Grip
Title: President of the Trust
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
/s/ David B. Ford
- ----------------------------
(Goldman, Sachs & Co.)
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<PAGE>
EXHIBIT A
---------
SERIES ("FUNDS") OF GOLDMAN SACHS TRUST, A DELAWARE BUSINESS TRUST (THE "TRUST")
- --------------------------------------------------------------------------------
GOLDMAN SACHS FIXED INCOME FUNDS:
--------------------------------
Goldman Sachs Adjustable Rate Government Fund
Goldman Sachs Core Fixed Income Fund
Goldman Sachs Global Income Fund
Goldman Sachs Government Income Fund
Goldman Sachs Municipal Income Fund
Goldman Sachs Short Duration Tax-Free Fund
Goldman Sachs Short Duration Government Fund
Goldman Sachs High Yield Fund
GOLDMAN SACHS EQUITY FUNDS:
--------------------------
Goldman Sachs Balanced Fund
Goldman Sachs CORE Large Cap Growth Fund
Goldman Sachs CORE U.S. Equity Fund
Goldman Sachs CORE Small Cap Equity Fund
Goldman Sachs CORE International Equity Fund
Goldman Sachs Growth and Income Fund
Goldman Sachs Capital Growth Fund
Goldman Sachs International Equity Fund
Goldman Sachs Small Cap Value Fund
Goldman Sachs Asia Growth Fund
Goldman Sachs Emerging Markets Equity Fund
Goldman Sachs Mid-Cap Equity Fund
Goldman Sachs Real Estate Securities Fund
Goldman Sachs International Small Cap Fund
Goldman Sachs Japanese Equity Fund
Goldman Sachs European Equity Fund
GOLDMAN SACHS ASSET ALLOCATION PORTFOLIOS
-----------------------------------------
Goldman Sachs Growth Strategy Portfolio
Goldman Sachs Aggressive Growth Strategy Portfolio
Goldman Sachs Income Strategy Portfolio
Goldman Sachs Growth and Income Strategy Portfolio
GOLDMAN SACHS MONEY MARKET FUNDS:
--------------------------------
Goldman Sachs-Institutional Liquid Assets Portfolios:
----------------------------------------------------
Prime Obligations Portfolio
Government Portfolio
Treasury Obligations Portfolio
Federal Portfolio
Money Market Portfolio
Treasury Instruments Portfolio
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<PAGE>
Tax-Exempt Diversified Portfolio
Tax-Exempt California Portfolio
Tax-Exempt New York Portfolio
Financial Square Funds:
----------------------
Prime Obligations Fund
Government Fund
Treasury Obligations Fund
Money Market Fund
Tax-Free Money Market Fund
Federal Fund
Treasury Instruments Fund
Municipal Money Market Fund
Premium Money Market Fund
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<PAGE>
EXHIBIT (h)(10)
GOLDMAN, SACHS & CO.
Fee Information for Services as
Plan, Transfer and Dividend Disbursing Agent
GOLDMAN SACHS TRUST
On behalf of
All Funds Other Than ILA and FST Money Market Funds
For the services provided and the expenses assumed by Goldman, Sachs &
Co. pursuant to the Transfer Agency Agreement with respect to all Funds of
Goldman Sachs Trust (the "Trust") other than the Institutional Liquid Assets and
Financial Square Money Market Funds, the Trust shall pay to Goldman, Sachs &
Co. as full compensation therefor a fee payable monthly at the respective annual
rates of .19% of the average daily net asset value of each Fund's Class A,
Class B and Class C Shares and .04% of the average daily net asset value of each
Fund's Institutional, Service and (where applicable) Administration Shares.
Goldman, Sachs & Co. shall bear all expenses incurred by it in
connection with the performance of its duties under the Transfer Agency
Agreement, including the expenses referred to in paragraph 6.02 thereof.
Goldman, Sachs & Co. Goldman Sachs Trust
By: /s/ David B. Ford By: /s/ Nancy Mucker
------------------------ -------------------------
(Authorized Officer) (Authorized Officer)
Date: 7/31/98 Date: 7/31/98
------------------------ ------------------------
<PAGE>
EXHIBIT 99(J)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
for Goldman Sachs Trust-Domestic Equity Funds dated March 12, 1998 (and to all
references to our firm) included in or made a part of the Post-Effective
Amendment No. 47 and Amendment No. 49 to Registration Statement File Nos.
33-17619 and 811-5349, respectively.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 1, 1998
<PAGE>
EXHIBIT (m)(5)
GOLDMAN SACHS TRUST
On behalf of each of its series that has designated
a class of its shares as the "Class A Shares" thereof
CLASS A DISTRIBUTION AND
SERVICE PLAN
Amended and Restated as of
September 1, 1998
WHEREAS, Goldman Sachs Trust (the "Trust") engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, the Trust's Board of Trustees has divided the Trust's shares into
series and classes and may create additional series and classes from time to
time;
WHEREAS, the Trust has established a class of shares of beneficial interest
designated as Class A Shares (the "Shares") with respect to certain series of
the Trust;
WHEREAS, the Trust, on behalf of each series that is authorized to issue Class
A Shares (a "Fund"), has previously adopted a Plan of Distribution pursuant to
Rule 12b-1 under the Act and a separate Authorized Dealer Service Plan;
WHEREAS, the Board of Trustees of the Trust desires, for administrative
convenience, to amend and restate the aforesaid Plans as a Distribution and
Service Plan, and has determined that there is a reasonable likelihood that
adoption of said combined Plan will benefit each Fund and its shareholders; and
WHEREAS, the Trust, on behalf of each Fund, employs Goldman, Sachs & Co. (the
"Distributor") as distributor of the Class A Shares pursuant to a Distribution
Agreement dated April 30, 1997, as amended July 22, 1998.
NOW, THEREFORE, the Trust, on behalf of the each Fund, hereby adopts, and the
Distributor hereby agrees to the terms of, this Distribution and Service Plan
(the " Plan") on the following terms and conditions:
<PAGE>
1. Distribution Plan.
-----------------
(a) The Trust, on behalf of each Fund, is authorized to compensate the
Distributor for distribution services performed and expenses incurred
by the Distributor in connection with each Fund's Class A Shares. The
amount of such compensation paid during any one year shall not exceed
.25% of the average daily net assets of a Fund attributable to such
Class A Shares. Such compensation shall be calculated and accrued daily
and payable monthly or at such other intervals as the Board of Trustees
may determine. The compensation payable pursuant to this paragraph 1 is
intended to finance activities that are primarily intended to result in
the sale of Class A Shares of the Funds within the meaning of Rule 12b-
1 under the Act, and is subject to the approval and other provisions of
that Rule. In addition, the Distributor may, in its discretion, use the
compensation paid under this paragraph 1 for "personal and account
maintenance services and expenses" as defined in paragraph 2 below,
which shall not be deemed to be "distribution services and expenses";
provided that the total compensation paid under this paragraph 1 and
under paragraph 2 below for "personal and account maintenance services
and expenses" may not exceed the maximum cap imposed on "service fees"
by subsection (d) of Section 2830 of the Conduct Rules of the NASD.
(b) Distribution services and expenses for which Distributor may be
compensated pursuant to this paragraph 1 include, without limitation:
initial and ongoing compensation to and expenses of brokers and dealers
who are members of the National Association of Securities Dealers, Inc.
("NASD"), other financial services firms that have entered into an
agreement with the Distributor or their respective officers, sales
representatives and employees; compensation to (including sales
commissions) and expenses of the Distributor and any of its officers,
sales representatives and employees, including allocable overhead,
travel and telephone expenses, who engage in or support distribution of
a Fund's Class A Shares; interest expenses and other costs associated
with the financing of such compensation and expenses; printing of
reports and prospectuses for other than existing shareholders; and
preparation, printing and distribution of sales literature and
advertising materials.
(c) Appropriate adjustments to payments made pursuant to clause (a) of this
paragraph 1 shall be made whenever necessary to ensure that no payment
is made by the Trust on behalf of a Fund for distribution services and
expenses in excess of the applicable maximum cap imposed on asset-
based, front-end and deferred sales charges by subsection (d) of
Section 2830 of the Conduct Rules of the NASD.
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<PAGE>
2. Service Plan.
------------
(a) The Trust, on behalf of each Fund, is authorized to compensate the
Distributor for personal and account maintenance services performed and
expenses incurred by the Distributor in connection with each Fund's
Class A Shares. The amount of such compensation paid during any one
year shall not exceed such percentage as is approved from time to time
in the manner provided in paragraph 3(a) below (and until such approval
shall be zero) of the average daily net assets of a Fund attributable
to such Class A Shares. Such compensation shall be calculated and
accrued daily and payable quarterly or at such other intervals as the
Board of Trustees may determine. The compensation payable pursuant to
this paragraph 2 is intended to finance personal and account
maintenance services and expenses, which are not primarily intended to
result in the sale of Class A Shares of the Funds within the meaning of
Rule 12b-1 under the Act, and is not subject to the approval and other
provisions of that Rule.
(b) Personal and account maintenance services include, but are not limited
to, payments made to or on account of the Distributor, other brokers,
dealers and financial service firms that have entered into agreements
with the Distributor or their respective officers, sales
representatives and employees who respond to inquiries of, and furnish
assistance to, shareholders regarding their ownership of Shares or
their accounts or who provide similar services not otherwise provided
by or on behalf of a Fund.
(c) Pursuant to paragraph 3(a) below, .25% is approved as the percentage
compensation payable under this paragraph 2 with respect to the CORE
International Equity Fund, International Equity Fund, European Equity
Fund, Japanese Equity Fund, International Small Cap Fund, Emerging
Markets Equity Fund, Asia Growth Fund, Global Income Fund and Real
Estate Securities Fund.
3. General Provisions.
------------------
(a) This Plan shall not take effect until the Plan, together with any
related agreement, has been approved by votes of a majority of both (a)
the Board of Trustees of the Trust and (b) those Trustees of the Trust
who are not "interested persons" of the Trust (as defined by the Act)
and who have no direct or indirect financial interest in the operation
of the Plan or any agreements related to it (the "Independent
Trustees") cast in person at a meeting (or meetings) called for the
purpose of voting on the Trust's Class A Distribution and Authorized
Dealer Service Plans and such related agreements.
-3-
<PAGE>
(b) This Plan shall remain in effect until May 1, 1999 and shall continue
in effect thereafter so long as such continuance is specifically
approved at least annually in the manner provided in paragraph 3(a).
(c) The Distributor shall provide to the Board of Trustees of the Trust and
the Board shall review, at least quarterly, a written report of
services and expenses provided or incurred under this Plan, and the
purposes for which such services were performed and expenses were
incurred.
(d) This Plan may be terminated with respect to a Fund at any time by a
vote of a majority of the Independent Trustees or by vote of a majority
of the outstanding Class A Shares of such Fund. The Trust authorizes
the Distributor, if the Distributor so elects, to assign to a third
party any payments that the Distributor is entitled to receive for the
Distributor's services hereunder free and clear of any offset, defense
or counterclaim the Trust may have against the Distributor (it being
understood that the foregoing does not constitute a waiver of any claim
the Trust or a Fund may have against the Distributor) and except to the
extent that any change or modification after the date hereof of (x) the
provisions of the Act, the rules and regulations thereunder or other
applicable law or (y) any interpretation of the Act, the rules and
regulations thereunder or other applicable law shall restrict the
Distributor's right to make such transfer free and clear of any offset,
defense or counterclaim.
(e) This Plan may not be amended with respect to any Fund to increase
materially the amount of compensation payable for distribution services
and expenses pursuant to paragraph 1 unless such amendment is approved
by a vote of at least a majority (as defined in the Act) of the
outstanding Class A Shares of such Fund, except to the extent that the
approval of another class of such Fund is required in accordance with
Rule 18f-3 under the Act, in which case the approval of a majority (as
defined in the Act) of the outstanding voting securities of such class
shall also be required. No material amendment to this Plan shall be
made unless approved in the manner provided in paragraph 3(a).
(f) While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of the
Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
(g) The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 3(c), for a period of not
less than six years from the date of this Plan, any such agreement or
any such report, as the case may be, the first two years in an easily
accessible place.
(h) This Plan only relates to the Class A Shares of a Fund and the
compensation determined in accordance with paragraph 1 and paragraph 2
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<PAGE>
shall be based upon the average daily net assets of the Fund
attributable to Class A Shares. The obligations of the Trust and the
Funds hereunder are not personally binding upon, nor shall resort be
had to the private property of any of the Trustees, shareholders,
officers, employees or agents of the Trust, but only the Trust's
property allocable to Class A Shares shall be bound. No series of the
Trust shall be responsible for the obligations of any other series of
the Trust.
IN WITNESS WHEREOF, the Trust (on behalf of each Fund that has designated a
class of its shares as the "Class A Shares" thereof) and the Distributor have
executed this Distribution and Service Plan as of the day and year first above
written.
GOLDMAN SACHS TRUST
By: /s/ Douglas C. Grip
-------------------------------
GOLDMAN, SACHS & CO.
By: /s/ David B. Ford
-------------------------------
-5-
<PAGE>
EXHIBIT (m)(6)
GOLDMAN SACHS TRUST
On behalf of each of its series that has designated
a class of its shares as the "Class B Shares" thereof
CLASS B DISTRIBUTION AND
SERVICE PLAN
Amended and Restated as of
September 1, 1998
WHEREAS, Goldman Sachs Trust (the "Trust") engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, the Trust's Board of Trustees has divided the Trust's shares into
series and classes and may create additional series and classes from time to
time;
WHEREAS, the Trust has established a class of shares of beneficial interest
designated as Class B Shares (the "Shares") with respect to certain series of
the Trust;
WHEREAS, the Trust, on behalf of each series that is authorized to issue Class
B Shares (a "Fund"), has previously adopted a Plan of Distribution pursuant to
Rule 12b-1 under the Act and a separate Authorized Dealer Service Plan;
WHEREAS, the Board of Trustees of the Trust desires, for administrative
convenience, to amend and restate the aforesaid Plans as a Distribution and
Service Plan, and has determined that there is a reasonable likelihood that
adoption of said combined Plan will benefit each Fund and its shareholders; and
WHEREAS, the Trust, on behalf of each Fund, employs Goldman, Sachs & Co. (the
"Distributor") as distributor of the Class B Shares pursuant to a Distribution
Agreement dated April 30, 1997, as amended July 22, 1998.
NOW, THEREFORE, the Trust, on behalf of the each Fund, hereby adopts, and the
Distributor hereby agrees to the terms of, this Distribution and Service Plan
(the "Plan") on the following terms and conditions:
<PAGE>
1. Distribution Plan.
-----------------
(a) The Trust, on behalf of each Fund, is authorized to compensate the
Distributor for distribution services performed and expenses incurred
by the Distributor in connection with each Fund's Class B Shares. The
amount of such compensation paid during any one year shall not exceed
.75% of the average daily net assets of a Fund attributable to such
Class B Shares. Such compensation shall be calculated and accrued daily
and payable monthly or at such other intervals as the Board of Trustees
may determine. The compensation payable pursuant to this paragraph 1 is
intended to finance activities that are primarily intended to result in
the sale of Class B Shares of the Funds within the meaning of Rule 12b-
1 under the Act, and is subject to the approval and other provisions of
that Rule. No compensation paid under this paragraph 1 shall be for
"personal and account maintenance services and expenses" as defined in
paragraph 2 below.
(b) Distribution services and expenses for which Distributor may be
compensated pursuant to this paragraph 1 include, without limitation:
initial and ongoing compensation to and expenses of brokers and dealers
who are members of the National Association of Securities Dealers, Inc.
("NASD"), other financial services firms that have entered into an
agreement with the Distributor or their respective officers, sales
representatives and employees; compensation to (including sales
commissions) and expenses of the Distributor and any of its officers,
sales representatives and employees, including allocable overhead,
travel and telephone expenses, who engage in or support distribution of
a Fund's Class B Shares; interest expenses and other costs associated
with the financing of such compensation and expenses; printing of
reports and prospectuses for other than existing shareholders; and
preparation, printing and distribution of sales literature and
advertising materials.
(c) Appropriate adjustments to payments made pursuant to clause (a) of this
paragraph 1 shall be made whenever necessary to ensure that no payment
is made by the Trust on behalf of a Fund in excess of the applicable
maximum cap imposed on asset-based, front-end and deferred sales
charges by subsection (d) of Section 2830 of the Conduct Rules of the
NASD.
2. Service Plan.
------------
(a) The Trust, on behalf of each Fund, is authorized to compensate the
Distributor for personal and account maintenance services performed and
expenses incurred by the Distributor in connection with each Fund's
Class B Shares. The amount of such compensation paid during any one
year shall not exceed .25% of the average daily net assets of a Fund
attributable
-2-
<PAGE>
to such Class B Shares. Such compensation shall be calculated and
accrued daily and payable quarterly or at such other intervals as the
Board of Trustees may determine. The compensation payable pursuant to
this paragraph 2 is intended to finance personal and account
maintenance services and expenses, which are not primarily intended to
result in the sale of Class B Shares of the Funds within the meaning of
Rule 12b-1 under the Act, and is not subject to the approval and other
provisions of that Rule.
(b) Personal and account maintenance services include, but are not limited
to, payments made to or on account of the Distributor, other brokers,
dealers and financial service firms that have entered into agreements
with the Distributor or their respective officers, sales
representatives and employees who respond to inquiries of, and furnish
assistance to, shareholders regarding their ownership of Shares or
their accounts or who provide similar services not otherwise provided
by or on behalf of a Fund.
3. General Provisions.
------------------
(a) This Plan shall not take effect until the Plan, together with any
related agreement, has been approved by votes of a majority of both (a)
the Board of Trustees of the Trust and (b) those Trustees of the Trust
who are not "interested persons" of the Trust (as defined by the Act)
and who have no direct or indirect financial interest in the operation
of the Plan or any agreements related to it (the "Independent
Trustees") cast in person at a meeting (or meetings) called for the
purpose of voting on the Trust's Class B Distribution and Authorized
Dealer Service Plans and such related agreements.
(b) This Plan shall remain in effect until May 1, 1999 and shall continue
in effect thereafter so long as such continuance is specifically
approved at least annually in the manner provided in paragraph 3(a).
(c) The Distributor shall provide to the Board of Trustees of the Trust and
the Board shall review, at least quarterly, a written report of
services and expenses provided or incurred under this Plan, and the
purposes for which such services were performed and expenses were
incurred.
(d) This Plan may be terminated with respect to a Fund at any time by a
vote of a majority of the Independent Trustees or by vote of a majority
of the outstanding Class B Shares of such Fund. The Trust authorizes
the Distributor, if the Distributor so elects, to assign to a third
party any payments that the Distributor is entitled to receive for the
Distributor's services hereunder free and clear of any offset, defense
or counterclaim the Trust may have against the Distributor (it being
understood that the foregoing does not constitute a waiver of any claim
the Trust or a Fund
-3-
<PAGE>
may have against the Distributor) and except to the extent that any
change or modification after the date hereof of (x) the provisions of
the Act, the rules and regulations thereunder or other applicable law
or (y) any interpretation of the Act, the rules and regulations
thereunder or other applicable law shall restrict the Distributor's
right to make such transfer free and clear of any offset, defense or
counterclaim.
(e) This Plan may not be amended with respect to any Fund to increase
materially the amount of compensation payable for distribution services
and expenses pursuant to paragraph 1 unless such amendment is approved
by a vote of at least a majority (as defined in the Act) of the
outstanding Class B Shares of such Fund, except to the extent that the
approval of another class of such Fund is required in accordance with
Rule 18f-3 under the Act, in which case the approval of a majority (as
defined in the Act) of the outstanding voting securities of such class
shall also be required. No material amendment to this Plan shall be
made unless approved in the manner provided in paragraph 3(a).
(f) While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of the
Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
(g) The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 3(c), for a period of not
less than six years from the date of this Plan, any such agreement or
any such report, as the case may be, the first two years in an easily
accessible place.
(h) This Plan only relates to the Class B Shares of a Fund and the
compensation determined in accordance with paragraph 1 and paragraph 2
shall be based upon the average daily net assets of the Fund
attributable to Class B Shares. The obligations of the Trust and the
Funds hereunder are not personally binding upon, nor shall resort be
had to the private property of any of the Trustees, shareholders,
officers, employees or agents of the Trust, but only the Trust's
property allocable to Class B Shares shall be bound. No series of the
Trust shall be responsible for the obligations of any other series of
the Trust.
-4-
<PAGE>
IN WITNESS WHEREOF, the Trust (on behalf of each Fund that has designated a
class of its shares as the "Class B Shares" thereof) and the Distributor have
executed this Distribution and Service Plan as of the day and year first above
written.
GOLDMAN SACHS TRUST
/s/ Douglas C. Grip
By:__________________________________
GOLDMAN, SACHS & CO.
/s/ David B. Ford
By:__________________________________
-5-
<PAGE>
EXHIBIT (m)(7)
GOLDMAN SACHS TRUST
On behalf of each of its series that has designated
a class of its shares as the "Class C Shares" thereof
CLASS C DISTRIBUTION AND
SERVICE PLAN
Amended and Restated as of
September 1, 1998
WHEREAS, Goldman Sachs Trust (the "Trust") engages in business as an open-end
management investment company and is registered as such under the Investment
Company Act of 1940, as amended (the "Act");
WHEREAS, the Trust's Board of Trustees has divided the Trust's shares into
series and classes and may create additional series and classes from time to
time;
WHEREAS, the Trust has established a class of shares of beneficial interest
designated as Class C Shares (the "Shares") with respect to certain series of
the Trust;
WHEREAS, the Trust, on behalf of each series that is authorized to issue Class
C Shares (a "Fund"), has previously adopted a Plan of Distribution pursuant to
Rule 12b-1 under the Act and a separate Authorized Dealer Service Plan;
WHEREAS, the Board of Trustees of the Trust desires, for administrative
convenience, to amend and restate the aforesaid Plans as a Distribution and
Service Plan, and has determined that there is a reasonable likelihood that
adoption of said combined Plan will benefit each Fund and its shareholders; and
WHEREAS, the Trust, on behalf of each Fund, employs Goldman, Sachs & Co. (the
"Distributor") as distributor of the Class C Shares pursuant to a Distribution
Agreement dated April 30, 1997, as amended July 22, 1998.
NOW, THEREFORE, the Trust, on behalf of the each Fund, hereby adopts, and the
Distributor hereby agrees to the terms of, this Distribution and Service Plan
(the " Plan") on the following terms and conditions:
<PAGE>
1. Distribution Plan.
-----------------
(a) The Trust, on behalf of each Fund, is authorized to compensate the
Distributor for distribution services performed and expenses incurred
by the Distributor in connection with each Fund's Class C Shares. The
amount of such compensation paid during any one year shall not exceed
.75% of the average daily net assets of a Fund attributable to such
Class C Shares. Such compensation shall be calculated and accrued daily
and payable monthly or at such other intervals as the Board of Trustees
may determine. The compensation payable pursuant to this paragraph 1 is
intended to finance activities that are primarily intended to result in
the sale of Class C Shares of the Funds within the meaning of Rule 12b-
1 under the Act, and is subject to the approval and other provisions of
that Rule. No compensation paid under this paragraph 1 shall be for
"personal and account maintenance services and expenses" as defined in
paragraph 2 below.
(b) Distribution services and expenses for which Distributor may be
compensated pursuant to this paragraph 1 include, without limitation:
initial and ongoing compensation to and expenses of brokers and dealers
who are members of the National Association of Securities Dealers, Inc.
("NASD"), other financial services firms that have entered into an
agreement with the Distributor or their respective officers, sales
representatives and employees; compensation to (including sales
commissions) and expenses of the Distributor and any of its officers,
sales representatives and employees, including allocable overhead,
travel and telephone expenses, who engage in or support distribution of
a Fund's Class C Shares; interest expenses and other costs associated
with the financing of such compensation and expenses; printing of
reports and prospectuses for other than existing shareholders; and
preparation, printing and distribution of sales literature and
advertising materials.
(c) Appropriate adjustments to payments made pursuant to clause (a) of this
paragraph 1 shall be made whenever necessary to ensure that no payment
is made by the Trust on behalf of a Fund in excess of the applicable
maximum cap imposed on asset-based, front-end and deferred sales
charges by subsection (d) of Section 2830 of the Conduct Rules of the
NASD.
2. Service Plan.
------------
(a) The Trust, on behalf of each Fund, is authorized to compensate the
Distributor for personal and account maintenance services performed and
expenses incurred by the Distributor in connection with each Fund's
Class C Shares. The amount of such compensation paid during any one
year
<PAGE>
shall not exceed .25% of the average daily net assets of a Fund
attributable to such Class C Shares. Such compensation shall be
calculated and accrued daily and payable quarterly or at such other
intervals as the Board of Trustees may determine. The compensation
payable pursuant to this paragraph 2 is intended to finance personal
and account maintenance services and expenses, which are not primarily
intended to result in the sale of Class C Shares of the Funds within
the meaning of Rule 12b-1 under the Act, and is not subject to the
approval and other provisions of that Rule.
(b) Personal and account maintenance services include, but are not limited
to, payments made to or on account of the Distributor, other brokers,
dealers and financial service firms that have entered into agreements
with the Distributor or their respective officers, sales
representatives and employees who respond to inquiries of, and furnish
assistance to, shareholders regarding their ownership of Shares or
their accounts or who provide similar services not otherwise provided
by or on behalf of a Fund.
3. General Provisions.
------------------
(a) This Plan shall not take effect until the Plan, together with any
related agreement, has been approved by votes of a majority of both (a)
the Board of Trustees of the Trust and (b) those Trustees of the Trust
who are not "interested persons" of the Trust (as defined by the Act)
and who have no direct or indirect financial interest in the operation
of the Plan or any agreements related to it (the "Independent
Trustees") cast in person at a meeting (or meetings) called for the
purpose of voting on the Trust's Class C Distribution and Authorized
Dealer Service Plans and such related agreements.
(b) This Plan shall remain in effect until May 1, 1999 and shall continue
in effect thereafter so long as such continuance is specifically
approved at least annually in the manner provided in paragraph 3(a).
(c) The Distributor shall provide to the Board of Trustees of the Trust and
the Board shall review, at least quarterly, a written report of
services and expenses provided or incurred under this Plan, and the
purposes for which such services were performed and expenses were
incurred.
(d) This Plan may be terminated with respect to a Fund at any time by a
vote of a majority of the Independent Trustees or by vote of a majority
of the outstanding Class C Shares of such Fund. The Trust authorizes
the Distributor, if the Distributor so elects, to assign to a third
party any payments that the Distributor is entitled to receive for the
Distributor's services hereunder free and clear of any offset, defense
or counterclaim the Trust may have against the Distributor (it being
understood that the
<PAGE>
foregoing does not constitute a waiver of any claim the Trust or a Fund
may have against the Distributor) and except to the extent that any
change or modification after the date hereof of (x) the provisions of
the Act, the rules and regulations thereunder or other applicable law
or (y) any interpretation of the Act, the rules and regulations
thereunder or other applicable law shall restrict the Distributor's
right to make such transfer free and clear of any offset, defense or
counterclaim.
(e) This Plan may not be amended with respect to any Fund to increase
materially the amount of compensation payable for distribution services
and expenses pursuant to paragraph 1 unless such amendment is approved
by a vote of at least a majority (as defined in the Act) of the
outstanding Class C Shares of such Fund, except to the extent that the
approval of another class of such Fund is required in accordance with
Rule 18f-3 under the Act, in which case the approval of a majority (as
defined in the Act) of the outstanding voting securities of such class
shall also be required. No material amendment to this Plan shall be
made unless approved in the manner provided in paragraph 3(a).
(f) While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of the
Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
(g) The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 3(c), for a period of not
less than six years from the date of this Plan, any such agreement or
any such report, as the case may be, the first two years in an easily
accessible place.
(h) This Plan only relates to the Class C Shares of a Fund and the
compensation determined in accordance with paragraph 1 and paragraph 2
shall be based upon the average daily net assets of the Fund
attributable to Class C Shares. The obligations of the Trust and the
Funds hereunder are not personally binding upon, nor shall resort be
had to the private property of any of the Trustees, shareholders,
officers, employees or agents of the Trust, but only the Trust's
property allocable to Class C Shares shall be bound. No series of the
Trust shall be responsible for the obligations of any other series of
the Trust.
<PAGE>
IN WITNESS WHEREOF, the Trust (on behalf of each Fund that has designated a
class of its shares as the "Class C Shares" thereof) and the Distributor have
executed this Distribution and Service Plan as of the day and year first above
written.
GOLDMAN SACHS TRUST
/s/ Douglas C. Grip
By:_______________________________
GOLDMAN, SACHS & CO.
/s/ David B. Ford
By:_______________________________
<PAGE>
EXHIBIT (o)
GOLDMAN SACHS TRUST
PLAN IN ACCORDANCE WITH RULE 18F-3
(THE "PLAN")
September 1, 1998
This Plan is applicable to each series of Goldman Sachs Trust. Unless
otherwise determined by the Board of Trustees, each future series will issue
multiple classes of shares in accordance with this Plan.
Each class of shares of each Fund will have the same relative rights and
privileges and be subject to the same sales charges, fees and expenses except as
set forth below. In addition, extraordinary expenses attributable to one or
more classes shall be borne by such classes. The Board of Trustees may
determine in the future that other allocations of expenses or other services to
be provided to a class of shares are appropriate and amend this Plan accordingly
without the approval of shareholders of any class. Unless a class of shares is
otherwise designated, it shall have the terms set forth below with respect to
Class A Shares. Except as set forth in a Fund's prospectus, shares may be
exchanged only for shares of the same class of another Fund or, to the extent
permitted by the officers of the Trust, shares of another class of the same
Fund.
INSTITUTIONAL SHARES/1/
Institutional Shares are sold at net asset value without a sales charge and
are subject to the minimum purchase requirements set forth in the relevant
Fund's prospectus. Institutional Shares are not subject to an Administration,
Preferred Administration, Service or Distribution and Service Plan.
Institutional Shares shall be entitled to the shareholder services set forth
from time to time in the Fund's prospectuses with respect to Institutional
Shares.
ADMINISTRATION SHARES/2/
Administration Shares are sold at net asset value without a sales charge
and are subject to the minimum purchase requirements set forth in the relevant
Fund's prospectus. Administration Shares are sold only to or through certain
service organizations that have entered into agreements with the Funds.
Administration Shares are subject to a fee under an Administration Plan adopted
with respect to the relevant Fund but are not subject to fees under any Service,
Preferred Administration or Distribution and Service Plan. The Administration
Shareholders have exclusive voting rights, if any, with respect to a Fund's
Administration Plan. Administration Shares shall be entitled to the shareholder
services set forth from time to time in the Fund's prospectuses with respect to
Administration Shares.
PREFERRED SHARES
Preferred Shares are sold at net asset value without a sales charge and are
subject to the minimum purchase requirements set forth in the relevant Fund's
prospectus. Preferred Shares are sold only to or through certain service
organizations that have entered into agreements with the
____________________________
/1/ Includes ILA Units and FST Shares
/2/ Includes ILA Administration Units and FST Administration Shares
<PAGE>
Funds. Preferred Shares are subject to a fee under a Preferred Administration
Plan adopted with respect to the relevant Fund but are not subject to fees under
any Administration, Service or Distribution and Service Plan. The Preferred
Shareholders have exclusive voting rights, if any, with respect to a Fund's
Preferred Administration Plan. Preferred Shares shall be entitled to the
shareholder services set forth from time to time in the Funds' prospectuses with
respect to Preferred Shares.
SERVICE SHARES/3/
Service Shares are sold at net asset value without a sales charge and are
subject to the minimum purchase requirements set forth in the relevant Fund's
prospectus. Service Shares are sold only to or through service organizations
that have entered into agreements with the Funds. Service Shares are subject to
a fee under the Service Plan adopted with respect to the relevant Fund but are
not subject to fees under any Administration, Preferred Administration or
Distribution and Service Plan. The Service Shareholders have exclusive voting
rights, if any, with respect to a Fund's Service Plan. Service Shares shall be
entitled to the shareholder services set forth from time to time in the Fund's
prospectus with respect to Service Shares.
CASH MANAGEMENT SHARES
Cash Management Shares are sold at net asset value without a sales charge
and are subject to the minimum purchase requirements set forth in the relevant
Fund's prospectus. Cash Management Shares are sold only to or through certain
service organizations that have entered into agreements with the Funds. Cash
Management Shares are subject to fees under a Service Plan and a Distribution
Plan for Cash Management Shares but are not subject to fees under any
Administration, Preferred Administration or Distribution and Service Plan. The
Cash Management Shares have exclusive voting rights, if any, with respect to a
Fund's Service Plan and Distribution Plan for Cash Management Shares. Cash
Management Shares shall be entitled to the shareholder services set forth from
time to time in the Funds' prospectuses with respect to Cash Management Shares.
CLASS A SHARES
Class A Shares are sold at net asset value per share plus the applicable
sales charge as set forth in the relevant Fund's prospectus. Certain Class A
Shares purchased at net asset value may be subject to a contingent deferred
sales charge as set forth in the Funds' prospectuses. Class A Shares are sold
subject to the minimum purchase requirements set forth in the relevant Fund's
prospectus. Class A Shares are subject to fees under the Distribution and
Service Plan adopted with respect to Class A Shares, on the terms set forth in
the relevant Fund's prospectus, but are not subject to fees under any
Administration or Service Plan. A wire transfer fee may be imposed in connection
with the payment of redemption proceeds from Class A Shares that is not imposed
in connection with other classes of shares. The Class A Shareholders have
exclusive voting rights, if any, with respect to a Fund's Distribution and
Service Plan adopted with respect to Class A Shares, subject to the voting
rights, if any, granted to the Fund's other share classes by Rule 18f-3 under
the Investment Company Act of 1940. Class A Shares shall be entitled to
_______________________
/3/ Includes ILA Service Units and FST Service Shares
2
<PAGE>
the shareholder services set forth from time to time in the Funds' prospectuses
with respect to Class A Shares.
CLASS B SHARES
Class B Shares will be sold at net asset value without a sales charge
imposed at the time of purchase. If a shareholder redeems Class B Shares which
have been held for less than the time period specified in the applicable
prospectus at the time of purchase (the "Purchase Prospectus"), a deferred sales
charge, on the terms set forth in the Purchase Prospectus, will be imposed at
the time of redemption of such Class B Shares. The deferred sales charge is
waived in the circumstances set forth in the Purchase Prospectus. In the case of
an exchange, a deferred sales charge is not imposed at the time of exchange but
may be payable upon subsequent redemption of the Class B Shares acquired on
exchange as provided in the Funds' prospectuses from time to time. Class B
Shares, as well as Class B Shares issued upon exchange of or reinvestment of
distributions on such Class B Shares, will automatically convert to Class A
Shares of the same Fund (Service Shares in the case of Class B Shares issued by
any Goldman Sachs Money Market Fund) after such period following purchase as
shall be specified in the Purchase Prospectus. Class B Shares are sold subject
to the minimum purchase requirements set forth in the relevant Fund's
prospectus. A wire transfer fee may be imposed in connection with the payment of
redemption proceeds from Class B Shares that is not imposed in connection with
other classes of shares. Class B Shares are subject to fees under the
Distribution and Service Plan adopted with respect to the Class B Shares, on the
terms set forth in the relevant Fund's prospectus, but are not subject to fees
under any Administration or Service Plan. The Class B Shareholders have
exclusive voting rights, if any, with respect to a Fund's Distribution and
Service Plan adopted with respect to Class B Shares. Class B Shares are entitled
to the shareholder services set forth from time to time in the Funds'
prospectuses with respect to Class B Shares.
CLASS C SHARES
Class C Shares will be sold at net asset value without a sales charge
imposed at the time of purchase. If a shareholder redeems Class C Shares which
have been held for less than the time period specified in the applicable
prospectus as the time of purchase (the "Purchase Prospectus"), a deferred sales
charge, on the terms set forth in the Purchase Prospectus, will be imposed at
the time of redemption of such Class C Shares. The deferred sales charge is
waived in the circumstances set forth in the Purchase Prospectus. In the case of
an exchange, a deferred sales charge is not imposed at the time of exchange but
may be payable upon subsequent redemption of the Class C Shares acquired on
exchange as provided in the Funds' prospectuses from time to time. Class C
Shares have no conversion feature and are subject to distribution and service
fees as set forth in the Fund's prospectuses. Class C Shares are sold subject to
the minimum purchase requirements set forth in the relevant Fund's prospectus. A
wire transfer fee may be imposed in connection with the payment of redemption
proceeds from Class C Shares that is not imposed in connection with other
classes of shares. Class C Shares are subject to fees under Distribution and
Service Plan adopted with respect to the Class C Shares, on the terms set forth
in the relevant Fund's prospectus, but are not subject to fees under any
Administration or Service Plan. The Class C Shareholders have exclusive voting
rights, if any, with respect to a Fund's Distribution and Service Plan adopted
with respect to Class C Shares. Class C Shares are entitled to the shareholder
services set forth from time to time in the Funds' prospectuses with respect to
Class C Shares.
3
<PAGE>
TRANSFER AGENCY FEES
Transfer agency fees incurred by the Trust's portfolios are treated as
class expenses.
EXPENSE ALLOCATION
Expenses that are treated as class expenses under this Plan will be borne
by a Fund's respective share classes. Fund expenses will be allocated daily to
the respective share classes in accordance with Rule 18f-3(c) as now or
hereafter in effect, subject to the oversight of the Board of Trustees.
4
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 511
<NAME> GOLDMAN SACHS BALANCED FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 265,524,624
<INVESTMENTS-AT-VALUE> 264,782,956
<RECEIVABLES> 12,119,101
<ASSETS-OTHER> 191,142
<OTHER-ITEMS-ASSETS> 50,181
<TOTAL-ASSETS> 277,143,380
<PAYABLE-FOR-SECURITIES> 21,071,385
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 954,700
<TOTAL-LIABILITIES> 22,026,085
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 244,428,942
<SHARES-COMMON-STOCK> 9,526,414
<SHARES-COMMON-PRIOR> 8,064,620
<ACCUMULATED-NII-CURRENT> 571,765
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,876,964
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (760,376)
<NET-ASSETS> 255,117,295
<DIVIDEND-INCOME> 1,056,222
<INTEREST-INCOME> 3,644,966
<OTHER-INCOME> 0
<EXPENSES-NET> 1,380,656
<NET-INVESTMENT-INCOME> 3,320,532
<REALIZED-GAINS-CURRENT> 6,490,959
<APPREC-INCREASE-CURRENT> (11,610,626)
<NET-CHANGE-FROM-OPS> (1,799,135)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,529,348
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,230,239
<NUMBER-OF-SHARES-REDEEMED> 872,134
<SHARES-REINVESTED> 103,689
<NET-CHANGE-IN-ASSETS> 50,609,050
<ACCUMULATED-NII-PRIOR> 410,404
<ACCUMULATED-GAINS-PRIOR> 4,386,005
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 791,642
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,864,518
<AVERAGE-NET-ASSETS> 245,600,676
<PER-SHARE-NAV-BEGIN> 20.29
<PER-SHARE-NII> .29
<PER-SHARE-GAIN-APPREC> (.21)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .28
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.09
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 512
<NAME> GOLDMAN SACHS BALANCED FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 265,524,624
<INVESTMENTS-AT-VALUE> 264,782,956
<RECEIVABLES> 12,119,101
<ASSETS-OTHER> 191,142
<OTHER-ITEMS-ASSETS> 50,181
<TOTAL-ASSETS> 277,143,380
<PAYABLE-FOR-SECURITIES> 21,071,385
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 954,700
<TOTAL-LIABILITIES> 22,026,085
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 244,428,942
<SHARES-COMMON-STOCK> 1,946,992
<SHARES-COMMON-PRIOR> 1,170,246
<ACCUMULATED-NII-CURRENT> 571,765
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,876,964
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (760,376)
<NET-ASSETS> 255,117,295
<DIVIDEND-INCOME> 1,056,222
<INTEREST-INCOME> 3,644,966
<OTHER-INCOME> 0
<EXPENSES-NET> 1,380,656
<NET-INVESTMENT-INCOME> 3,320,532
<REALIZED-GAINS-CURRENT> 6,490,959
<APPREC-INCREASE-CURRENT> (11,610,626)
<NET-CHANGE-FROM-OPS> (1,799,135)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 347,480
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 873,368
<NUMBER-OF-SHARES-REDEEMED> 111,028
<SHARES-REINVESTED> 14,406
<NET-CHANGE-IN-ASSETS> 50,609,050
<ACCUMULATED-NII-PRIOR> 410,404
<ACCUMULATED-GAINS-PRIOR> 4,386,005
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 791,642
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,864,518
<AVERAGE-NET-ASSETS> 245,600,676
<PER-SHARE-NAV-BEGIN> 20.20
<PER-SHARE-NII> .20
<PER-SHARE-GAIN-APPREC> (.20)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .21
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.99
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 517
<NAME> GOLDMAN SACHS BALANCED FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 265,524,624
<INVESTMENTS-AT-VALUE> 264,782,956
<RECEIVABLES> 12,119,101
<ASSETS-OTHER> 191,142
<OTHER-ITEMS-ASSETS> 50,181
<TOTAL-ASSETS> 277,143,380
<PAYABLE-FOR-SECURITIES> 21,071,385
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 954,700
<TOTAL-LIABILITIES> 22,026,085
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 244,428,942
<SHARES-COMMON-STOCK> 786,453
<SHARES-COMMON-PRIOR> 438,867
<ACCUMULATED-NII-CURRENT> 571,765
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,876,964
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (760,376)
<NET-ASSETS> 255,117,295
<DIVIDEND-INCOME> 1,056,222
<INTEREST-INCOME> 3,644,966
<OTHER-INCOME> 0
<EXPENSES-NET> 1,380,656
<NET-INVESTMENT-INCOME> 3,320,532
<REALIZED-GAINS-CURRENT> 6,490,959
<APPREC-INCREASE-CURRENT> (11,610,626)
<NET-CHANGE-FROM-OPS> (1,799,135)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 140,623
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 407,086
<NUMBER-OF-SHARES-REDEEMED> 64,943
<SHARES-REINVESTED> 5,443
<NET-CHANGE-IN-ASSETS> 50,609,050
<ACCUMULATED-NII-PRIOR> 410,404
<ACCUMULATED-GAINS-PRIOR> 4,386,005
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 791,642
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,864,518
<AVERAGE-NET-ASSETS> 245,600,676
<PER-SHARE-NAV-BEGIN> 20.17
<PER-SHARE-NII> .20
<PER-SHARE-GAIN-APPREC> (.21)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .21
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.95
<EXPENSE-RATIO> 1.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 513
<NAME> GOLDMAN SACHS BALANCED FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 265,524,624
<INVESTMENTS-AT-VALUE> 264,782,956
<RECEIVABLES> 12,119,101
<ASSETS-OTHER> 191,142
<OTHER-ITEMS-ASSETS> 50,181
<TOTAL-ASSETS> 277,143,380
<PAYABLE-FOR-SECURITIES> 21,071,385
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 954,700
<TOTAL-LIABILITIES> 22,026,085
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 244,428,942
<SHARES-COMMON-STOCK> 430,378
<SHARES-COMMON-PRIOR> 412,422
<ACCUMULATED-NII-CURRENT> 571,765
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,876,964
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (760,376)
<NET-ASSETS> 255,117,295
<DIVIDEND-INCOME> 1,056,222
<INTEREST-INCOME> 3,644,966
<OTHER-INCOME> 0
<EXPENSES-NET> 1,380,656
<NET-INVESTMENT-INCOME> 3,320,532
<REALIZED-GAINS-CURRENT> 6,490,959
<APPREC-INCREASE-CURRENT> (11,610,626)
<NET-CHANGE-FROM-OPS> (1,799,135)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 141,516
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 75,472
<NUMBER-OF-SHARES-REDEEMED> 63,815
<SHARES-REINVESTED> 6,299
<NET-CHANGE-IN-ASSETS> 50,609,050
<ACCUMULATED-NII-PRIOR> 410,404
<ACCUMULATED-GAINS-PRIOR> 4,386,005
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 791,642
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,864,518
<AVERAGE-NET-ASSETS> 245,600,676
<PER-SHARE-NAV-BEGIN> 20.29
<PER-SHARE-NII> .32
<PER-SHARE-GAIN-APPREC> (.21)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .31
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.09
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 516
<NAME> GOLDMAN SACHS BALANCED FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 265,524,624
<INVESTMENTS-AT-VALUE> 264,782,956
<RECEIVABLES> 12,119,101
<ASSETS-OTHER> 191,142
<OTHER-ITEMS-ASSETS> 50,181
<TOTAL-ASSETS> 277,143,380
<PAYABLE-FOR-SECURITIES> 21,071,385
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 954,700
<TOTAL-LIABILITIES> 22,026,085
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 244,428,942
<SHARES-COMMON-STOCK> 22,250
<SHARES-COMMON-PRIOR> 780
<ACCUMULATED-NII-CURRENT> 571,765
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,876,964
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (760,376)
<NET-ASSETS> 255,117,295
<DIVIDEND-INCOME> 1,056,222
<INTEREST-INCOME> 3,644,966
<OTHER-INCOME> 0
<EXPENSES-NET> 1,380,656
<NET-INVESTMENT-INCOME> 3,320,532
<REALIZED-GAINS-CURRENT> 6,490,959
<APPREC-INCREASE-CURRENT> (11,610,626)
<NET-CHANGE-FROM-OPS> (1,799,135)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 204
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21,460
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 10
<NET-CHANGE-IN-ASSETS> 50,609,050
<ACCUMULATED-NII-PRIOR> 410,404
<ACCUMULATED-GAINS-PRIOR> 4,386,005
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 791,642
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,864,518
<AVERAGE-NET-ASSETS> 245,600,676
<PER-SHARE-NAV-BEGIN> 20.28
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> (.21)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .25
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.08
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 521
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 2,037,859,226
<INVESTMENTS-AT-VALUE> 2,019,787,384
<RECEIVABLES> 64,997,709
<ASSETS-OTHER> 79,128
<OTHER-ITEMS-ASSETS> 51,751
<TOTAL-ASSETS> 2,084,915,972
<PAYABLE-FOR-SECURITIES> 31,806,432
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,415,939
<TOTAL-LIABILITIES> 44,222,371
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,909,601,006
<SHARES-COMMON-STOCK> 53,147,731
<SHARES-COMMON-PRIOR> 46,918,649
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 376,702
<ACCUMULATED-NET-GAINS> 149,541,139
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (18,071,842)
<NET-ASSETS> 2,040,693,601
<DIVIDEND-INCOME> 14,756,464
<INTEREST-INCOME> 3,797,985
<OTHER-INCOME> 0
<EXPENSES-NET> 13,467,782
<NET-INVESTMENT-INCOME> 5,086,667
<REALIZED-GAINS-CURRENT> 89,244,504
<APPREC-INCREASE-CURRENT> (162,876,752)
<NET-CHANGE-FROM-OPS> (68,545,581)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,157,463
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,263,555
<NUMBER-OF-SHARES-REDEEMED> 7,175,413
<SHARES-REINVESTED> 140,940
<NET-CHANGE-IN-ASSETS> 439,492,470
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 60,296,635
<OVERDISTRIB-NII-PRIOR> 614,031
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,017,056
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14,595,666
<AVERAGE-NET-ASSETS> 2,021,488,177
<PER-SHARE-NAV-BEGIN> 25.93
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> (.41)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .08
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.53
<EXPENSE-RATIO> 1.22
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 522
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 2,037,859,226
<INVESTMENTS-AT-VALUE> 2,019,787,384
<RECEIVABLES> 64,997,709
<ASSETS-OTHER> 79,128
<OTHER-ITEMS-ASSETS> 51,751
<TOTAL-ASSETS> 2,084,915,972
<PAYABLE-FOR-SECURITIES> 31,806,432
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,415,939
<TOTAL-LIABILITIES> 44,222,371
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,909,601,006
<SHARES-COMMON-STOCK> 16,448,379
<SHARES-COMMON-PRIOR> 11,963,607
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 376,702
<ACCUMULATED-NET-GAINS> 149,541,139
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (18,071,842)
<NET-ASSETS> 2,040,693,601
<DIVIDEND-INCOME> 14,756,464
<INTEREST-INCOME> 3,797,985
<OTHER-INCOME> 0
<EXPENSES-NET> 13,467,782
<NET-INVESTMENT-INCOME> 5,086,667
<REALIZED-GAINS-CURRENT> 89,244,504
<APPREC-INCREASE-CURRENT> (162,876,752)
<NET-CHANGE-FROM-OPS> (68,545,581)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,734,215
<NUMBER-OF-SHARES-REDEEMED> 1,249,443
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 439,492,470
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 60,296,635
<OVERDISTRIB-NII-PRIOR> 614,031
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,017,056
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14,595,666
<AVERAGE-NET-ASSETS> 2,021,488,117
<PER-SHARE-NAV-BEGIN> 25.73
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.41)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.32
<EXPENSE-RATIO> 1.88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 527
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 2,037,859,226
<INVESTMENTS-AT-VALUE> 2,019,787,384
<RECEIVABLES> 64,997,709
<ASSETS-OTHER> 79,128
<OTHER-ITEMS-ASSETS> 51,751
<TOTAL-ASSETS> 2,084,915,972
<PAYABLE-FOR-SECURITIES> 31,806,432
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,415,939
<TOTAL-LIABILITIES> 44,222,371
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,909,601,006
<SHARES-COMMON-STOCK> 2,495,856
<SHARES-COMMON-PRIOR> 1,233,014
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 376,702
<ACCUMULATED-NET-GAINS> 149,541,139
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (18,071,842)
<NET-ASSETS> 2,040,693,601
<DIVIDEND-INCOME> 14,756,464
<INTEREST-INCOME> 3,797,985
<OTHER-INCOME> 0
<EXPENSES-NET> 13,467,782
<NET-INVESTMENT-INCOME> 5,086,667
<REALIZED-GAINS-CURRENT> 89,244,504
<APPREC-INCREASE-CURRENT> (162,876,752)
<NET-CHANGE-FROM-OPS> (68,545,581)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 22,272
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,539,698
<NUMBER-OF-SHARES-REDEEMED> 277,488
<SHARES-REINVESTED> 632
<NET-CHANGE-IN-ASSETS> 439,492,470
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 60,296,635
<OVERDISTRIB-NII-PRIOR> 614,031
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,017,056
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14,595,666
<AVERAGE-NET-ASSETS> 2,021,488,177
<PER-SHARE-NAV-BEGIN> 25.70
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> (.43)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.27
<EXPENSE-RATIO> 1.88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 523
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 2,037,859,226
<INVESTMENTS-AT-VALUE> 2,019,787,384
<RECEIVABLES> 64,997,709
<ASSETS-OTHER> 79,128
<OTHER-ITEMS-ASSETS> 51,751
<TOTAL-ASSETS> 2,084,915,972
<PAYABLE-FOR-SECURITIES> 31,806,432
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,415,939
<TOTAL-LIABILITIES> 44,222,371
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,909,601,006
<SHARES-COMMON-STOCK> 7,518,494
<SHARES-COMMON-PRIOR> 1,396,153
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 376,702
<ACCUMULATED-NET-GAINS> 149,541,139
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (18,071,842)
<NET-ASSETS> 2,040,693,601
<DIVIDEND-INCOME> 14,756,464
<INTEREST-INCOME> 3,797,985
<OTHER-INCOME> 0
<EXPENSES-NET> 13,467,782
<NET-INVESTMENT-INCOME> 5,086,667
<REALIZED-GAINS-CURRENT> 89,244,504
<APPREC-INCREASE-CURRENT> (162,876,752)
<NET-CHANGE-FROM-OPS> (68,545,581)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 641,067
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,710,128
<NUMBER-OF-SHARES-REDEEMED> 592,594
<SHARES-REINVESTED> 4,807
<NET-CHANGE-IN-ASSETS> 439,492,470
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 60,296,635
<OVERDISTRIB-NII-PRIOR> 614,031
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,017,056
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14,595,666
<AVERAGE-NET-ASSETS> 2,021,488,177
<PER-SHARE-NAV-BEGIN> 25.95
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> (.40)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .13
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.55
<EXPENSE-RATIO> .81
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 526
<NAME> GOLDMAN SACHS GROWTH AND INCOME FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 2,037,859,226
<INVESTMENTS-AT-VALUE> 2,019,787,384
<RECEIVABLES> 64,997,709
<ASSETS-OTHER> 79,128
<OTHER-ITEMS-ASSETS> 51,751
<TOTAL-ASSETS> 2,084,915,972
<PAYABLE-FOR-SECURITIES> 31,806,432
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,415,939
<TOTAL-LIABILITIES> 44,222,371
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,909,601,006
<SHARES-COMMON-STOCK> 483,317
<SHARES-COMMON-PRIOR> 343,095
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 376,702
<ACCUMULATED-NET-GAINS> 149,541,139
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (18,071,842)
<NET-ASSETS> 2,040,693,601
<DIVIDEND-INCOME> 14,756,464
<INTEREST-INCOME> 3,797,985
<OTHER-INCOME> 0
<EXPENSES-NET> 13,467,782
<NET-INVESTMENT-INCOME> 5,086,667
<REALIZED-GAINS-CURRENT> 89,244,504
<APPREC-INCREASE-CURRENT> (162,876,752)
<NET-CHANGE-FROM-OPS> (68,545,581)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 28,536
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 151,968
<NUMBER-OF-SHARES-REDEEMED> 12,651
<SHARES-REINVESTED> 905
<NET-CHANGE-IN-ASSETS> 439,492,470
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 60,296,635
<OVERDISTRIB-NII-PRIOR> 614,031
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,017,056
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14,595,666
<AVERAGE-NET-ASSETS> 2,021,488,177
<PER-SHARE-NAV-BEGIN> 25.92
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> (.39)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .07
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.53
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 531
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,228,465,100
<INVESTMENTS-AT-VALUE> 1,796,302,656
<RECEIVABLES> 27,340,361
<ASSETS-OTHER> 85,160
<OTHER-ITEMS-ASSETS> 30,184
<TOTAL-ASSETS> 1,823,758,361
<PAYABLE-FOR-SECURITIES> 5,787,162
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,906,411
<TOTAL-LIABILITIES> 15,693,573
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,200,364,042
<SHARES-COMMON-STOCK> 75,217,102
<SHARES-COMMON-PRIOR> 67,981,133
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,297,973
<ACCUMULATED-NET-GAINS> 41,161,163
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 567,837,556
<NET-ASSETS> 1,808,064,788
<DIVIDEND-INCOME> 8,602,135
<INTEREST-INCOME> 1,456,263
<OTHER-INCOME> 0
<EXPENSES-NET> 11,356,371
<NET-INVESTMENT-INCOME> (1,297,973)
<REALIZED-GAINS-CURRENT> 37,897,023
<APPREC-INCREASE-CURRENT> 204,813,265
<NET-CHANGE-FROM-OPS> 241,412,315
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,379,015
<NUMBER-OF-SHARES-REDEEMED> 7,143,046
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497,984,095
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,264,140
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,953,076
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,216,138
<AVERAGE-NET-ASSETS> 1,603,813,983
<PER-SHARE-NAV-BEGIN> 18.48
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 3.32
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.79
<EXPENSE-RATIO> 1.39
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 532
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,228,465,100
<INVESTMENTS-AT-VALUE> 1,796,302,656
<RECEIVABLES> 27,340,361
<ASSETS-OTHER> 85,160
<OTHER-ITEMS-ASSETS> 30,184
<TOTAL-ASSETS> 1,823,758,361
<PAYABLE-FOR-SECURITIES> 5,787,162
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,906,411
<TOTAL-LIABILITIES> 15,693,573
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,200,364,042
<SHARES-COMMON-STOCK> 5,826,554
<SHARES-COMMON-PRIOR> 2,234,279
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,297,973
<ACCUMULATED-NET-GAINS> 41,161,163
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 567,837,556
<NET-ASSETS> 1,808,064,788
<DIVIDEND-INCOME> 8,602,135
<INTEREST-INCOME> 1,456,263
<OTHER-INCOME> 0
<EXPENSES-NET> 11,356,371
<NET-INVESTMENT-INCOME> (1,297,973)
<REALIZED-GAINS-CURRENT> 37,897,023
<APPREC-INCREASE-CURRENT> 204,813,265
<NET-CHANGE-FROM-OPS> 241,412,315
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,710,874
<NUMBER-OF-SHARES-REDEEMED> 118,599
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497,984,095
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,264,140
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,953,076
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,216,138
<AVERAGE-NET-ASSETS> 1,603,813,983
<PER-SHARE-NAV-BEGIN> 18.27
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> 3.26
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.47
<EXPENSE-RATIO> 2.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 537
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,228,465,100
<INVESTMENTS-AT-VALUE> 1,796,302,656
<RECEIVABLES> 27,340,361
<ASSETS-OTHER> 85,160
<OTHER-ITEMS-ASSETS> 30,184
<TOTAL-ASSETS> 1,823,758,361
<PAYABLE-FOR-SECURITIES> 5,787,162
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,906,411
<TOTAL-LIABILITIES> 15,693,573
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,200,364,042
<SHARES-COMMON-STOCK> 1,278,409
<SHARES-COMMON-PRIOR> 295,829
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,297,973
<ACCUMULATED-NET-GAINS> 41,161,163
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 567,837,556
<NET-ASSETS> 1,808,064,788
<DIVIDEND-INCOME> 8,602,135
<INTEREST-INCOME> 1,456,263
<OTHER-INCOME> 0
<EXPENSES-NET> 11,356,371
<NET-INVESTMENT-INCOME> (1,297,973)
<REALIZED-GAINS-CURRENT> 37,897,023
<APPREC-INCREASE-CURRENT> 204,813,265
<NET-CHANGE-FROM-OPS> 241,412,315
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,040,192
<NUMBER-OF-SHARES-REDEEMED> 57,612
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497,984,095
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,264,140
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,953,076
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,216,138
<AVERAGE-NET-ASSETS> 1,603,813,983
<PER-SHARE-NAV-BEGIN> 18.24
<PER-SHARE-NII> (.05)
<PER-SHARE-GAIN-APPREC> 3.23
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.42
<EXPENSE-RATIO> 2.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 533
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,228,465,100
<INVESTMENTS-AT-VALUE> 1,796,302,656
<RECEIVABLES> 27,340,361
<ASSETS-OTHER> 85,160
<OTHER-ITEMS-ASSETS> 30,184
<TOTAL-ASSETS> 1,823,758,361
<PAYABLE-FOR-SECURITIES> 5,787,162
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,906,411
<TOTAL-LIABILITIES> 15,693,573
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,200,364,042
<SHARES-COMMON-STOCK> 699,981
<SHARES-COMMON-PRIOR> 393,638
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,297,973
<ACCUMULATED-NET-GAINS> 41,161,163
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 567,837,556
<NET-ASSETS> 1,808,064,788
<DIVIDEND-INCOME> 8,602,135
<INTEREST-INCOME> 1,456,263
<OTHER-INCOME> 0
<EXPENSES-NET> 11,356,371
<NET-INVESTMENT-INCOME> (1,297,973)
<REALIZED-GAINS-CURRENT> 37,897,023
<APPREC-INCREASE-CURRENT> 204,813,265
<NET-CHANGE-FROM-OPS> 241,412,315
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 682,259
<NUMBER-OF-SHARES-REDEEMED> 375,916
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497,984,095
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,264,140
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,953,076
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,216,138
<AVERAGE-NET-ASSETS> 1,603,813,983
<PER-SHARE-NAV-BEGIN> 18.45
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 3.32
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.78
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 536
<NAME> GOLDMAN SACHS CAPITAL GROWTH FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 1,228,465,100
<INVESTMENTS-AT-VALUE> 1,796,302,656
<RECEIVABLES> 27,340,361
<ASSETS-OTHER> 85,160
<OTHER-ITEMS-ASSETS> 30,184
<TOTAL-ASSETS> 1,823,758,361
<PAYABLE-FOR-SECURITIES> 5,787,162
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,906,411
<TOTAL-LIABILITIES> 15,693,573
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,200,364,042
<SHARES-COMMON-STOCK> 56,220
<SHARES-COMMON-PRIOR> 94
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 1,297,973
<ACCUMULATED-NET-GAINS> 41,161,163
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 567,837,556
<NET-ASSETS> 1,808,064,788
<DIVIDEND-INCOME> 8,602,135
<INTEREST-INCOME> 1,456,263
<OTHER-INCOME> 0
<EXPENSES-NET> 11,356,371
<NET-INVESTMENT-INCOME> (1,297,973)
<REALIZED-GAINS-CURRENT> 37,897,023
<APPREC-INCREASE-CURRENT> 204,813,265
<NET-CHANGE-FROM-OPS> 241,412,315
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 56,131
<NUMBER-OF-SHARES-REDEEMED> 5
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 497,984,095
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 3,264,140
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,953,076
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,216,138
<AVERAGE-NET-ASSETS> 1,603,813,983
<PER-SHARE-NAV-BEGIN> 18.46
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 3.30
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.74
<EXPENSE-RATIO> 1.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 541
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 525,307,636
<INVESTMENTS-AT-VALUE> 488,050,599
<RECEIVABLES> 6,397,359
<ASSETS-OTHER> 98,497
<OTHER-ITEMS-ASSETS> 56,454
<TOTAL-ASSETS> 494,602,891
<PAYABLE-FOR-SECURITIES> 5,076,379
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,907,251
<TOTAL-LIABILITIES> 9,983,630
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 456,925,501
<SHARES-COMMON-STOCK> 16,883,768
<SHARES-COMMON-PRIOR> 15,394,383
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 598,236
<ACCUMULATED-NET-GAINS> 65,549,033
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (37,257,037)
<NET-ASSETS> 484,619,261
<DIVIDEND-INCOME> 1,823,834
<INTEREST-INCOME> 1,612,602
<OTHER-INCOME> 0
<EXPENSES-NET> 4,034,672
<NET-INVESTMENT-INCOME> (598,236)
<REALIZED-GAINS-CURRENT> 41,132,546
<APPREC-INCREASE-CURRENT> (51,792,387)
<NET-CHANGE-FROM-OPS> (11,258,077)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,823,269
<NUMBER-OF-SHARES-REDEEMED> 3,333,884
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 51,463,958
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 24,416,487
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,564,550
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,574,293
<AVERAGE-NET-ASSETS> 517,271,203
<PER-SHARE-NAV-BEGIN> 24.05
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> (.17)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.86
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 542
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 525,307,636
<INVESTMENTS-AT-VALUE> 488,050,599
<RECEIVABLES> 6,397,359
<ASSETS-OTHER> 98,479
<OTHER-ITEMS-ASSETS> 56,454
<TOTAL-ASSETS> 494,602,891
<PAYABLE-FOR-SECURITIES> 5,076,379
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,907,251
<TOTAL-LIABILITIES> 9,983,630
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 456,925,501
<SHARES-COMMON-STOCK> 2,312,907
<SHARES-COMMON-PRIOR> 1,798,680
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 598,236
<ACCUMULATED-NET-GAINS> 65,549,033
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (37,257,037)
<NET-ASSETS> 484,619,261
<DIVIDEND-INCOME> 1,823,834
<INTEREST-INCOME> 1,612,602
<OTHER-INCOME> 0
<EXPENSES-NET> 4,034,672
<NET-INVESTMENT-INCOME> (598,236)
<REALIZED-GAINS-CURRENT> 41,132,546
<APPREC-INCREASE-CURRENT> (51,792,387)
<NET-CHANGE-FROM-OPS> (11,258,077)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 674,342
<NUMBER-OF-SHARES-REDEEMED> 160,155
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 51,463,958
<ACCUMULATED-NII-PRIOR> 24,416,487
<ACCUMULATED-GAINS-PRIOR> 14,535,350
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,564,550
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,574,293
<AVERAGE-NET-ASSETS> 517,271,203
<PER-SHARE-NAV-BEGIN> 23.73
<PER-SHARE-NII> (.11)
<PER-SHARE-GAIN-APPREC> (.17)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.45
<EXPENSE-RATIO> 2.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 547
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 525,307,636
<INVESTMENTS-AT-VALUE> 488,050,599
<RECEIVABLES> 6,397,359
<ASSETS-OTHER> 98,479
<OTHER-ITEMS-ASSETS> 56,454
<TOTAL-ASSETS> 494,602,891
<PAYABLE-FOR-SECURITIES> 5,076,379
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,907,251
<TOTAL-LIABILITIES> 9,983,630
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 456,925,501
<SHARES-COMMON-STOCK> 396,832
<SHARES-COMMON-PRIOR> 236,148
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 598,236
<ACCUMULATED-NET-GAINS> 65,549,033
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (37,257,037)
<NET-ASSETS> 484,619,261
<DIVIDEND-INCOME> 1,823,834
<INTEREST-INCOME> 1,612,602
<OTHER-INCOME> 0
<EXPENSES-NET> 4,034,672
<NET-INVESTMENT-INCOME> (598,236)
<REALIZED-GAINS-CURRENT> 41,132,546
<APPREC-INCREASE-CURRENT> (51,792,387)
<NET-CHANGE-FROM-OPS> (11,258,077)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 197,273
<NUMBER-OF-SHARES-REDEEMED> 36,589
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 51,463,958
<ACCUMULATED-NII-PRIOR> 24,416,487
<ACCUMULATED-GAINS-PRIOR> 14,535,350
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,564,550
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,574,293
<AVERAGE-NET-ASSETS> 517,271,203
<PER-SHARE-NAV-BEGIN> 23.73
<PER-SHARE-NII> (.09)
<PER-SHARE-GAIN-APPREC> (.19)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.45
<EXPENSE-RATIO> 2.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 543
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 525,307,636
<INVESTMENTS-AT-VALUE> 488,050,599
<RECEIVABLES> 6,397,359
<ASSETS-OTHER> 98,479
<OTHER-ITEMS-ASSETS> 56,454
<TOTAL-ASSETS> 494,602,891
<PAYABLE-FOR-SECURITIES> 5,076,379
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,907,251
<TOTAL-LIABILITIES> 9,983,630
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 456,925,501
<SHARES-COMMON-STOCK> 759,962
<SHARES-COMMON-PRIOR> 607,122
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 598,236
<ACCUMULATED-NET-GAINS> 65,549,033
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (37,257,037)
<NET-ASSETS> 484,619,261
<DIVIDEND-INCOME> 1,823,834
<INTEREST-INCOME> 1,612,602
<OTHER-INCOME> 0
<EXPENSES-NET> 4,034,672
<NET-INVESTMENT-INCOME> (598,236)
<REALIZED-GAINS-CURRENT> 41,132,546
<APPREC-INCREASE-CURRENT> (51,792,387)
<NET-CHANGE-FROM-OPS> (11,258,077)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 155,023
<NUMBER-OF-SHARES-REDEEMED> 2,183
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 51,463,958
<ACCUMULATED-NII-PRIOR> 24,416,487
<ACCUMULATED-GAINS-PRIOR> 14,535,350
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,564,550
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,574,293
<AVERAGE-NET-ASSETS> 517,271,203
<PER-SHARE-NAV-BEGIN> 24.09
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> (.18)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.94
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 546
<NAME> GOLDMAN SACHS SMALL CAP VALUE FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 525,307,636
<INVESTMENTS-AT-VALUE> 488,050,599
<RECEIVABLES> 6,397,359
<ASSETS-OTHER> 98,479
<OTHER-ITEMS-ASSETS> 56,454
<TOTAL-ASSETS> 494,602,891
<PAYABLE-FOR-SECURITIES> 5,076,379
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,907,251
<TOTAL-LIABILITIES> 9,983,630
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 456,925,501
<SHARES-COMMON-STOCK> 3,195
<SHARES-COMMON-PRIOR> 70
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 598,236
<ACCUMULATED-NET-GAINS> 65,549,033
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (37,257,037)
<NET-ASSETS> 484,619,261
<DIVIDEND-INCOME> 1,823,834
<INTEREST-INCOME> 1,612,602
<OTHER-INCOME> 0
<EXPENSES-NET> 4,034,672
<NET-INVESTMENT-INCOME> (598,236)
<REALIZED-GAINS-CURRENT> 41,132,546
<APPREC-INCREASE-CURRENT> (51,792,387)
<NET-CHANGE-FROM-OPS> (11,258,077)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,125
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 51,463,958
<ACCUMULATED-NII-PRIOR> 24,416,487
<ACCUMULATED-GAINS-PRIOR> 14,535,350
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,564,550
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,574,293
<AVERAGE-NET-ASSETS> 517,271,203
<PER-SHARE-NAV-BEGIN> 24.05
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.19)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.86
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 551
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUNDS-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 904,513,056
<INVESTMENTS-AT-VALUE> 1,087,661,956
<RECEIVABLES> 28,814,058
<ASSETS-OTHER> 70,861
<OTHER-ITEMS-ASSETS> 215,044
<TOTAL-ASSETS> 1,116,761,919
<PAYABLE-FOR-SECURITIES> 14,445,435
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,056,827
<TOTAL-LIABILITIES> 60,502,262
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 831,414,641
<SHARES-COMMON-STOCK> 38,495,187
<SHARES-COMMON-PRIOR> 35,149,596
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 6,495,192
<ACCUMULATED-NET-GAINS> 46,482,372
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 184,857,836
<NET-ASSETS> 1,056,259,657
<DIVIDEND-INCOME> 8,658,965
<INTEREST-INCOME> 1,025,426
<OTHER-INCOME> 0
<EXPENSES-NET> 8,194,898
<NET-INVESTMENT-INCOME> 1,489,493
<REALIZED-GAINS-CURRENT> 65,338,765
<APPREC-INCREASE-CURRENT> 68,047,123
<NET-CHANGE-FROM-OPS> 134,875,381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 34,723,847
<NUMBER-OF-SHARES-REDEEMED> 31,378,942
<SHARES-REINVESTED> 687
<NET-CHANGE-IN-ASSETS> 240,679,468
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 11,942,587
<OVERDIST-NET-GAINS-PRIOR> 14,898,491
<GROSS-ADVISORY-FEES> 4,854,415
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,797,238
<AVERAGE-NET-ASSETS> 978,929,036
<PER-SHARE-NAV-BEGIN> 19.85
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 3.09
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.97
<EXPENSE-RATIO> 1.69
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 552
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 904,513,056
<INVESTMENTS-AT-VALUE> 1,087,661,956
<RECEIVABLES> 28,814,058
<ASSETS-OTHER> 70,861
<OTHER-ITEMS-ASSETS> 215,044
<TOTAL-ASSETS> 1,116,761,919
<PAYABLE-FOR-SECURITIES> 14,445,435
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,056,827
<TOTAL-LIABILITIES> 60,502,262
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 831,414,641
<SHARES-COMMON-STOCK> 3,130,527
<SHARES-COMMON-PRIOR> 2,808,047
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 6,495,192
<ACCUMULATED-NET-GAINS> 46,482,372
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 184,857,836
<NET-ASSETS> 1,056,259,657
<DIVIDEND-INCOME> 8,658,965
<INTEREST-INCOME> 1,025,426
<OTHER-INCOME> 0
<EXPENSES-NET> 8,194,898
<NET-INVESTMENT-INCOME> 1,489,493
<REALIZED-GAINS-CURRENT> 65,338,765
<APPREC-INCREASE-CURRENT> 68,047,123
<NET-CHANGE-FROM-OPS> 134,875,381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 552,213
<NUMBER-OF-SHARES-REDEEMED> 229,971
<SHARES-REINVESTED> 238
<NET-CHANGE-IN-ASSETS> 240,679,468
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 11,942,587
<OVERDIST-NET-GAINS-PRIOR> 14,898,491
<GROSS-ADVISORY-FEES> 4,854,415
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,797,238
<AVERAGE-NET-ASSETS> 978,929,036
<PER-SHARE-NAV-BEGIN> 19.70
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 3.08
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.74
<EXPENSE-RATIO> 2.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 557
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 904,513,056
<INVESTMENTS-AT-VALUE> 1,087,661,956
<RECEIVABLES> 28,814,058
<ASSETS-OTHER> 70,861
<OTHER-ITEMS-ASSETS> 215,044
<TOTAL-ASSETS> 1,116,761,919
<PAYABLE-FOR-SECURITIES> 14,445,435
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,056,827
<TOTAL-LIABILITIES> 60,502,262
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 831,414,641
<SHARES-COMMON-STOCK> 345,788
<SHARES-COMMON-PRIOR> 172,210
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 6,495,192
<ACCUMULATED-NET-GAINS> 46,482,372
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 184,857,836
<NET-ASSETS> 1,056,259,657
<DIVIDEND-INCOME> 8,658,965
<INTEREST-INCOME> 1,025,426
<OTHER-INCOME> 0
<EXPENSES-NET> 8,194,898
<NET-INVESTMENT-INCOME> 1,489,493
<REALIZED-GAINS-CURRENT> 65,338,765
<APPREC-INCREASE-CURRENT> 68,047,123
<NET-CHANGE-FROM-OPS> 134,875,381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,487,005
<NUMBER-OF-SHARES-REDEEMED> 1,313,427
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 240,679,468
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 11,942,587
<OVERDIST-NET-GAINS-PRIOR> 14,898,491
<GROSS-ADVISORY-FEES> 4,854,415
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,797,238
<AVERAGE-NET-ASSETS> 978,929,036
<PER-SHARE-NAV-BEGIN> 19.56
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 3.04
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.58
<EXPENSE-RATIO> 2.21
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 553
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 904,513,056
<INVESTMENTS-AT-VALUE> 1,087,661,956
<RECEIVABLES> 28,814,058
<ASSETS-OTHER> 70,861
<OTHER-ITEMS-ASSETS> 215,044
<TOTAL-ASSETS> 1,116,761,919
<PAYABLE-FOR-SECURITIES> 14,445,435
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,056,827
<TOTAL-LIABILITIES> 60,502,262
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 831,414,641
<SHARES-COMMON-STOCK> 3,838,681
<SHARES-COMMON-PRIOR> 2,817,977
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 6,495,192
<ACCUMULATED-NET-GAINS> 46,482,372
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 184,857,836
<NET-ASSETS> 1,056,259,657
<DIVIDEND-INCOME> 8,658,965
<INTEREST-INCOME> 1,025,426
<OTHER-INCOME> 0
<EXPENSES-NET> 8,194,898
<NET-INVESTMENT-INCOME> 1,489,493
<REALIZED-GAINS-CURRENT> 65,338,765
<APPREC-INCREASE-CURRENT> 68,047,123
<NET-CHANGE-FROM-OPS> 134,875,381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,288,018
<NUMBER-OF-SHARES-REDEEMED> 267,314
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 240,679,468
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 11,942,587
<OVERDIST-NET-GAINS-PRIOR> 14,898,491
<GROSS-ADVISORY-FEES> 4,854,415
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,797,238
<AVERAGE-NET-ASSETS> 978,929,036
<PER-SHARE-NAV-BEGIN> 19.97
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> 3.14
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.18
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 556
<NAME> GOLDMAN SACHS INTERNATIONAL EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 904,513,056
<INVESTMENTS-AT-VALUE> 1,087,661,956
<RECEIVABLES> 28,814,058
<ASSETS-OTHER> 70,861
<OTHER-ITEMS-ASSETS> 215,044
<TOTAL-ASSETS> 1,116,761,919
<PAYABLE-FOR-SECURITIES> 14,445,435
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,056,827
<TOTAL-LIABILITIES> 60,502,262
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 831,414,641
<SHARES-COMMON-STOCK> 173,083
<SHARES-COMMON-PRIOR> 152,953
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 6,495,192
<ACCUMULATED-NET-GAINS> 46,482,372
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 184,857,836
<NET-ASSETS> 1,056,259,657
<DIVIDEND-INCOME> 8,658,965
<INTEREST-INCOME> 1,025,426
<OTHER-INCOME> 0
<EXPENSES-NET> 8,194,898
<NET-INVESTMENT-INCOME> 1,489,493
<REALIZED-GAINS-CURRENT> 65,338,765
<APPREC-INCREASE-CURRENT> 68,047,123
<NET-CHANGE-FROM-OPS> 134,875,381
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 55,251
<NUMBER-OF-SHARES-REDEEMED> 35,121
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 240,679,468
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 11,942,587
<OVERDIST-NET-GAINS-PRIOR> 14,898,491
<GROSS-ADVISORY-FEES> 4,854,415
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,797,238
<AVERAGE-NET-ASSETS> 978,929,036
<PER-SHARE-NAV-BEGIN> 19.84
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 3.10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.98
<EXPENSE-RATIO> 1.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 561
<NAME> GOLDMAN SACHS ASIA GROWTH FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 100,932,491
<INVESTMENTS-AT-VALUE> 70,192,367
<RECEIVABLES> 1,713,594
<ASSETS-OTHER> 137,698
<OTHER-ITEMS-ASSETS> 721,897
<TOTAL-ASSETS> 72,765,556
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,879,093
<TOTAL-LIABILITIES> 1,879,093
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 184,699,934
<SHARES-COMMON-STOCK> 9,231,029
<SHARES-COMMON-PRIOR> 10,430,282
<ACCUMULATED-NII-CURRENT> 473,668
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 83,619,423
<ACCUM-APPREC-OR-DEPREC> (30,667,716)
<NET-ASSETS> 70,886,463
<DIVIDEND-INCOME> 1,053,932
<INTEREST-INCOME> 191,270
<OTHER-INCOME> 0
<EXPENSES-NET> 909,421
<NET-INVESTMENT-INCOME> 335,781
<REALIZED-GAINS-CURRENT> (9,989,697)
<APPREC-INCREASE-CURRENT> (4,633,261)
<NET-CHANGE-FROM-OPS> (14,287,177)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,137,705
<NUMBER-OF-SHARES-REDEEMED> 8,336,958
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (21,219,064)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 23,347,264
<OVERDIST-NET-GAINS-PRIOR> 50,144,575
<GROSS-ADVISORY-FEES> 458,773
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,142,097
<AVERAGE-NET-ASSETS> 92,515,094
<PER-SHARE-NAV-BEGIN> 8.38
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> (1.43)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.99
<EXPENSE-RATIO> 1.97
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 562
<NAME> GOLDMAN SACHS ASIA GROWTH FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 100,932,491
<INVESTMENTS-AT-VALUE> 70,192,367
<RECEIVABLES> 1,713,594
<ASSETS-OTHER> 137,698
<OTHER-ITEMS-ASSETS> 721,897
<TOTAL-ASSETS> 72,765,556
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,879,093
<TOTAL-LIABILITIES> 1,879,093
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 184,699,934
<SHARES-COMMON-STOCK> 629,855
<SHARES-COMMON-PRIOR> 404,337
<ACCUMULATED-NII-CURRENT> 473,668
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 83,619,423
<ACCUM-APPREC-OR-DEPREC> (30,667,716)
<NET-ASSETS> 70,886,463
<DIVIDEND-INCOME> 1,053,932
<INTEREST-INCOME> 191,270
<OTHER-INCOME> 0
<EXPENSES-NET> 909,421
<NET-INVESTMENT-INCOME> 335,781
<REALIZED-GAINS-CURRENT> (9,989,697)
<APPREC-INCREASE-CURRENT> (4,633,261)
<NET-CHANGE-FROM-OPS> (14,287,177)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 283,041
<NUMBER-OF-SHARES-REDEEMED> 57,523
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (21,219,064)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 23,347,264
<OVERDIST-NET-GAINS-PRIOR> 50,144,575
<GROSS-ADVISORY-FEES> 458,773
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,142,097
<AVERAGE-NET-ASSETS> 92,515,094
<PER-SHARE-NAV-BEGIN> 8.31
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (1.40)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.91
<EXPENSE-RATIO> 2.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 567
<NAME> GOLDMAN SACHS ASIA GROWTH FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 100,932,491
<INVESTMENTS-AT-VALUE> 70,192,367
<RECEIVABLES> 1,713,594
<ASSETS-OTHER> 137,698
<OTHER-ITEMS-ASSETS> 721,897
<TOTAL-ASSETS> 72,765,556
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,879,093
<TOTAL-LIABILITIES> 1,879,093
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 184,699,934
<SHARES-COMMON-STOCK> 111,977
<SHARES-COMMON-PRIOR> 52,511
<ACCUMULATED-NII-CURRENT> 473,668
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 83,619,423
<ACCUM-APPREC-OR-DEPREC> (30,667,716)
<NET-ASSETS> 70,886,463
<DIVIDEND-INCOME> 1,053,932
<INTEREST-INCOME> 191,270
<OTHER-INCOME> 0
<EXPENSES-NET> 909,421
<NET-INVESTMENT-INCOME> 335,781
<REALIZED-GAINS-CURRENT> (9,989,697)
<APPREC-INCREASE-CURRENT> (4,633,261)
<NET-CHANGE-FROM-OPS> (14,287,177)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 129,668
<NUMBER-OF-SHARES-REDEEMED> 70,202
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (21,219,064)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 23,347,264
<OVERDIST-NET-GAINS-PRIOR> 50,144,575
<GROSS-ADVISORY-FEES> 458,773
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,142,097
<AVERAGE-NET-ASSETS> 92,515,094
<PER-SHARE-NAV-BEGIN> 8.29
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> (1.40)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 6.90
<EXPENSE-RATIO> 2.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 563
<NAME> GOLDMAN SACHS ASIA GROWTH FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 100,932,491
<INVESTMENTS-AT-VALUE> 70,192,367
<RECEIVABLES> 1,713,594
<ASSETS-OTHER> 137,698
<OTHER-ITEMS-ASSETS> 721,897
<TOTAL-ASSETS> 72,765,556
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,879,093
<TOTAL-LIABILITIES> 1,879,093
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 184,699,934
<SHARES-COMMON-STOCK> 179,302
<SHARES-COMMON-PRIOR> 103,588
<ACCUMULATED-NII-CURRENT> 473,668
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 83,619,423
<ACCUM-APPREC-OR-DEPREC> (30,667,716)
<NET-ASSETS> 70,886,463
<DIVIDEND-INCOME> 1,053,932
<INTEREST-INCOME> 191,270
<OTHER-INCOME> 0
<EXPENSES-NET> 909,421
<NET-INVESTMENT-INCOME> 335,781
<REALIZED-GAINS-CURRENT> (9,989,697)
<APPREC-INCREASE-CURRENT> (4,633,261)
<NET-CHANGE-FROM-OPS> (14,287,177)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 231,777
<NUMBER-OF-SHARES-REDEEMED> 156,063
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (21,219,064)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 23,347,264
<OVERDIST-NET-GAINS-PRIOR> 50,144,575
<GROSS-ADVISORY-FEES> 458,773
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,142,097
<AVERAGE-NET-ASSETS> 92,515,094
<PER-SHARE-NAV-BEGIN> 8.44
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> (1.44)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.07
<EXPENSE-RATIO> 1.10
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 626
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 87,076,392
<INVESTMENTS-AT-VALUE> 84,046,673
<RECEIVABLES> 1,059,729
<ASSETS-OTHER> 130,033
<OTHER-ITEMS-ASSETS> 42,855
<TOTAL-ASSETS> 85,279,290
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 378,321
<TOTAL-LIABILITIES> 378,321
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 88,874,445
<SHARES-COMMON-STOCK> 2,099
<SHARES-COMMON-PRIOR> 160
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 20,240
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 698,317
<ACCUM-APPREC-OR-DEPREC> (3,254,919)
<NET-ASSETS> 84,900,969
<DIVIDEND-INCOME> 321,912
<INTEREST-INCOME> 107,869
<OTHER-INCOME> 0
<EXPENSES-NET> 414,347
<NET-INVESTMENT-INCOME> 15,434
<REALIZED-GAINS-CURRENT> (312,290)
<APPREC-INCREASE-CURRENT> (4,017,862)
<NET-CHANGE-FROM-OPS> (4,314,718)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,939
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 52,240,594
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 35,674
<OVERDIST-NET-GAINS-PRIOR> 386,027
<GROSS-ADVISORY-FEES> 268,291
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 638,074
<AVERAGE-NET-ASSETS> 63,650,418
<PER-SHARE-NAV-BEGIN> 10.60
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.70
<EXPENSE-RATIO> 1.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 631
<NAME> GOLDMAN SACHS INTERNATIONAL SMALL CAP FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 33,866,031
<INVESTMENTS-AT-VALUE> 34,487,824
<RECEIVABLES> 6,367,654
<ASSETS-OTHER> 91,192
<OTHER-ITEMS-ASSETS> 6,915
<TOTAL-ASSETS> 40,953,585
<PAYABLE-FOR-SECURITIES> 3,937,386
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 187,089
<TOTAL-LIABILITIES> 4,124,475
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35,965,811
<SHARES-COMMON-STOCK> 2,434,371
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,708
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 211,777
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 631,814
<NET-ASSETS> 36,829,110
<DIVIDEND-INCOME> 37,934
<INTEREST-INCOME> 42,282
<OTHER-INCOME> 0
<EXPENSES-NET> 60,508
<NET-INVESTMENT-INCOME> 19,708
<REALIZED-GAINS-CURRENT> 211,777
<APPREC-INCREASE-CURRENT> 631,814
<NET-CHANGE-FROM-OPS> 863,299
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,435,135
<NUMBER-OF-SHARES-REDEEMED> 764
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 36,829,110
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 46,263
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 200,919
<AVERAGE-NET-ASSETS> 15,295,219
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> .62
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 1.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 632
<NAME> GOLDMAN SACHS INTERNATIONAL SMALL CAP FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 33,866,031
<INVESTMENTS-AT-VALUE> 34,487,824
<RECEIVABLES> 6,367,654
<ASSETS-OTHER> 91,192
<OTHER-ITEMS-ASSETS> 6,915
<TOTAL-ASSETS> 40,953,585
<PAYABLE-FOR-SECURITIES> 3,937,386
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 187,089
<TOTAL-LIABILITIES> 4,124,475
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35,965,811
<SHARES-COMMON-STOCK> 23,343
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,708
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 211,777
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 631,814
<NET-ASSETS> 36,829,110
<DIVIDEND-INCOME> 37,934
<INTEREST-INCOME> 42,282
<OTHER-INCOME> 0
<EXPENSES-NET> 60,508
<NET-INVESTMENT-INCOME> 19,708
<REALIZED-GAINS-CURRENT> 211,777
<APPREC-INCREASE-CURRENT> 631,814
<NET-CHANGE-FROM-OPS> 863,299
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 23,362
<NUMBER-OF-SHARES-REDEEMED> 19
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 36,829,110
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 46,263
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 200,919
<AVERAGE-NET-ASSETS> 15,295,219
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .63
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 2.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 621
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 87,076,392
<INVESTMENTS-AT-VALUE> 84,046,673
<RECEIVABLES> 1,059,729
<ASSETS-OTHER> 130,033
<OTHER-ITEMS-ASSETS> 42,855
<TOTAL-ASSETS> 85,279,290
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 378,321
<TOTAL-LIABILITIES> 378,321
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 88,874,445
<SHARES-COMMON-STOCK> 1,961,650
<SHARES-COMMON-PRIOR> 1,049,487
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 20,240
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 698,317
<ACCUM-APPREC-OR-DEPREC> (3,254,919)
<NET-ASSETS> 84,900,969
<DIVIDEND-INCOME> 321,912
<INTEREST-INCOME> 107,869
<OTHER-INCOME> 0
<EXPENSES-NET> 414,347
<NET-INVESTMENT-INCOME> 15,434
<REALIZED-GAINS-CURRENT> (312,290)
<APPREC-INCREASE-CURRENT> (4,017,862)
<NET-CHANGE-FROM-OPS> (4,314,718)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,150,036
<NUMBER-OF-SHARES-REDEEMED> 237,873
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 52,240,594
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 35,674
<OVERDIST-NET-GAINS-PRIOR> 386,027
<GROSS-ADVISORY-FEES> 268,291
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 638,074
<AVERAGE-NET-ASSETS> 63,650,418
<PER-SHARE-NAV-BEGIN> 10.59
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> .11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.70
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 622
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 87,076,392
<INVESTMENTS-AT-VALUE> 84,046,673
<RECEIVABLES> 1,059,729
<ASSETS-OTHER> 130,033
<OTHER-ITEMS-ASSETS> 42,855
<TOTAL-ASSETS> 85,279,290
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 378,321
<TOTAL-LIABILITIES> 378,321
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 88,874,445
<SHARES-COMMON-STOCK> 1,396,084
<SHARES-COMMON-PRIOR> 942,850
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 20,240
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 698,317
<ACCUM-APPREC-OR-DEPREC> (3,254,919)
<NET-ASSETS> 84,900,969
<DIVIDEND-INCOME> 321,912
<INTEREST-INCOME> 107,869
<OTHER-INCOME> 0
<EXPENSES-NET> 414,347
<NET-INVESTMENT-INCOME> 15,434
<REALIZED-GAINS-CURRENT> (312,290)
<APPREC-INCREASE-CURRENT> (4,017,862)
<NET-CHANGE-FROM-OPS> (4,314,718)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 494,617
<NUMBER-OF-SHARES-REDEEMED> 41,383
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 52,240,594
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 35,674
<OVERDIST-NET-GAINS-PRIOR> 386,027
<GROSS-ADVISORY-FEES> 268,291
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 638,074
<AVERAGE-NET-ASSETS> 63,650,418
<PER-SHARE-NAV-BEGIN> 10.56
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.63
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 627
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 87,076,392
<INVESTMENTS-AT-VALUE> 84,046,673
<RECEIVABLES> 1,059,729
<ASSETS-OTHER> 130,033
<OTHER-ITEMS-ASSETS> 42,855
<TOTAL-ASSETS> 85,279,290
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 378,321
<TOTAL-LIABILITIES> 378,321
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 88,874,445
<SHARES-COMMON-STOCK> 416,656
<SHARES-COMMON-PRIOR> 242,025
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 20,240
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 698,317
<ACCUM-APPREC-OR-DEPREC> (3,254,919)
<NET-ASSETS> 84,900,969
<DIVIDEND-INCOME> 321,912
<INTEREST-INCOME> 107,869
<OTHER-INCOME> 0
<EXPENSES-NET> 414,347
<NET-INVESTMENT-INCOME> 15,434
<REALIZED-GAINS-CURRENT> (312,290)
<APPREC-INCREASE-CURRENT> (4,017,862)
<NET-CHANGE-FROM-OPS> (4,314,718)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 209,566
<NUMBER-OF-SHARES-REDEEMED> 34,935
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 52,240,594
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 35,674
<OVERDIST-NET-GAINS-PRIOR> 386,027
<GROSS-ADVISORY-FEES> 268,291
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 638,074
<AVERAGE-NET-ASSETS> 63,650,418
<PER-SHARE-NAV-BEGIN> 10.57
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.73
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 623
<NAME> GOLDMAN SACHS CORE SMALL CAP EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 87,076,392
<INVESTMENTS-AT-VALUE> 84,046,673
<RECEIVABLES> 1,059,729
<ASSETS-OTHER> 130,033
<OTHER-ITEMS-ASSETS> 42,855
<TOTAL-ASSETS> 85,279,290
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 378,321
<TOTAL-LIABILITIES> 378,321
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 88,874,445
<SHARES-COMMON-STOCK> 4,156,687
<SHARES-COMMON-PRIOR> 850,858
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 20,240
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 698,317
<ACCUM-APPREC-OR-DEPREC> (3,254,919)
<NET-ASSETS> 84,900,969
<DIVIDEND-INCOME> 321,912
<INTEREST-INCOME> 107,869
<OTHER-INCOME> 0
<EXPENSES-NET> 414,347
<NET-INVESTMENT-INCOME> 15,434
<REALIZED-GAINS-CURRENT> (312,290)
<APPREC-INCREASE-CURRENT> (4,017,862)
<NET-CHANGE-FROM-OPS> (4,314,718)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,503,433
<NUMBER-OF-SHARES-REDEEMED> 2,343,275
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 52,240,594
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 35,674
<OVERDIST-NET-GAINS-PRIOR> 386,027
<GROSS-ADVISORY-FEES> 268,291
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 638,074
<AVERAGE-NET-ASSETS> 63,650,418
<PER-SHARE-NAV-BEGIN> 10.61
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.73
<EXPENSE-RATIO> .95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 571
<NAME> GOLDMAN SACHS MID CAP EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 419,871,388
<INVESTMENTS-AT-VALUE> 407,307,279
<RECEIVABLES> 10,272,131
<ASSETS-OTHER> 269,177
<OTHER-ITEMS-ASSETS> 34,732
<TOTAL-ASSETS> 417,883,319
<PAYABLE-FOR-SECURITIES> 7,443,427
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,559,857
<TOTAL-LIABILITIES> 10,003,284
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 379,872,787
<SHARES-COMMON-STOCK> 5,690,789
<SHARES-COMMON-PRIOR> 4,191,937
<ACCUMULATED-NII-CURRENT> 1,259,172
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39,312,185
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (12,564,109)
<NET-ASSETS> 407,880,035
<DIVIDEND-INCOME> 2,751,354
<INTEREST-INCOME> 782,027
<OTHER-INCOME> 0
<EXPENSES-NET> 2,404,302
<NET-INVESTMENT-INCOME> 1,129,079
<REALIZED-GAINS-CURRENT> 24,623,892
<APPREC-INCREASE-CURRENT> (45,742,535)
<NET-CHANGE-FROM-OPS> (19,989,564)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,127,975
<NUMBER-OF-SHARES-REDEEMED> 1,629,123
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 45,656,420
<ACCUMULATED-NII-PRIOR> 130,093
<ACCUMULATED-GAINS-PRIOR> 14,688,293
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,618,705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,652,835
<AVERAGE-NET-ASSETS> 435,231,892
<PER-SHARE-NAV-BEGIN> 21.61
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> (.79)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.85
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 572
<NAME> GOLDMAN SACHS MID CAP EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 419,871,388
<INVESTMENTS-AT-VALUE> 407,307,279
<RECEIVABLES> 10,272,131
<ASSETS-OTHER> 269,177
<OTHER-ITEMS-ASSETS> 34,732
<TOTAL-ASSETS> 417,883,319
<PAYABLE-FOR-SECURITIES> 7,443,427
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,559,857
<TOTAL-LIABILITIES> 10,003,284
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 379,872,787
<SHARES-COMMON-STOCK> 2,227,600
<SHARES-COMMON-PRIOR> 1,332,295
<ACCUMULATED-NII-CURRENT> 1,259,172
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39,312,185
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (12,564,109)
<NET-ASSETS> 407,880,035
<DIVIDEND-INCOME> 2,751,354
<INTEREST-INCOME> 782,027
<OTHER-INCOME> 0
<EXPENSES-NET> 2,404,302
<NET-INVESTMENT-INCOME> 1,129,079
<REALIZED-GAINS-CURRENT> 24,623,892
<APPREC-INCREASE-CURRENT> (45,742,535)
<NET-CHANGE-FROM-OPS> (19,989,564)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,003,946
<NUMBER-OF-SHARES-REDEEMED> 108,641
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 45,656,420
<ACCUMULATED-NII-PRIOR> 130,093
<ACCUMULATED-GAINS-PRIOR> 14,688,293
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,618,705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,652,835
<AVERAGE-NET-ASSETS> 435,231,892
<PER-SHARE-NAV-BEGIN> 21.57
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> (.78)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.77
<EXPENSE-RATIO> 1.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 577
<NAME> GOLDMAN SACHS MID CAP EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 419,871,388
<INVESTMENTS-AT-VALUE> 407,307,279
<RECEIVABLES> 10,272,131
<ASSETS-OTHER> 269,177
<OTHER-ITEMS-ASSETS> 34,732
<TOTAL-ASSETS> 417,883,319
<PAYABLE-FOR-SECURITIES> 7,443,427
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,559,857
<TOTAL-LIABILITIES> 10,003,284
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 379,872,787
<SHARES-COMMON-STOCK> 607,053
<SHARES-COMMON-PRIOR> 298,521
<ACCUMULATED-NII-CURRENT> 1,259,172
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39,312,185
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (12,564,109)
<NET-ASSETS> 407,880,035
<DIVIDEND-INCOME> 2,751,354
<INTEREST-INCOME> 782,027
<OTHER-INCOME> 0
<EXPENSES-NET> 2,404,302
<NET-INVESTMENT-INCOME> 1,129,079
<REALIZED-GAINS-CURRENT> 24,623,892
<APPREC-INCREASE-CURRENT> (45,742,535)
<NET-CHANGE-FROM-OPS> (19,989,564)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 353,053
<NUMBER-OF-SHARES-REDEEMED> 44,521
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 45,656,420
<ACCUMULATED-NII-PRIOR> 130,093
<ACCUMULATED-GAINS-PRIOR> 14,688,293
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,618,705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,652,835
<AVERAGE-NET-ASSETS> 435,231,892
<PER-SHARE-NAV-BEGIN> 21.59
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> (.79)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.78
<EXPENSE-RATIO> 1.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 573
<NAME> GOLDMAN SACHS MID CAP EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 419,871,388
<INVESTMENTS-AT-VALUE> 407,307,279
<RECEIVABLES> 10,272,131
<ASSETS-OTHER> 269,177
<OTHER-ITEMS-ASSETS> 34,732
<TOTAL-ASSETS> 417,883,319
<PAYABLE-FOR-SECURITIES> 7,443,427
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,559,857
<TOTAL-LIABILITIES> 10,003,284
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 379,872,787
<SHARES-COMMON-STOCK> 10,992,894
<SHARES-COMMON-PRIOR> 10,921,229
<ACCUMULATED-NII-CURRENT> 1,259,172
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39,312,185
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (12,564,109)
<NET-ASSETS> 407,880,035
<DIVIDEND-INCOME> 2,751,354
<INTEREST-INCOME> 782,027
<OTHER-INCOME> 0
<EXPENSES-NET> 2,404,302
<NET-INVESTMENT-INCOME> 1,129,079
<REALIZED-GAINS-CURRENT> 24,623,892
<APPREC-INCREASE-CURRENT> (45,742,535)
<NET-CHANGE-FROM-OPS> (19,989,564)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 556,447
<NUMBER-OF-SHARES-REDEEMED> 484,782
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 45,656,420
<ACCUMULATED-NII-PRIOR> 130,093
<ACCUMULATED-GAINS-PRIOR> 14,688,293
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,618,705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,652,835
<AVERAGE-NET-ASSETS> 435,231,892
<PER-SHARE-NAV-BEGIN> 21.65
<PER-SHARE-NII> .09
<PER-SHARE-GAIN-APPREC> (.80)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.94
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 576
<NAME> GOLDMAN SACHS MID CAP EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 419,871,388
<INVESTMENTS-AT-VALUE> 407,307,279
<RECEIVABLES> 10,272,131
<ASSETS-OTHER> 269,177
<OTHER-ITEMS-ASSETS> 34,732
<TOTAL-ASSETS> 417,883,319
<PAYABLE-FOR-SECURITIES> 7,443,427
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,559,857
<TOTAL-LIABILITIES> 10,003,284
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 379,872,787
<SHARES-COMMON-STOCK> 3,973
<SHARES-COMMON-PRIOR> 360
<ACCUMULATED-NII-CURRENT> 1,259,172
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 39,312,185
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (12,564,109)
<NET-ASSETS> 407,880,035
<DIVIDEND-INCOME> 2,751,354
<INTEREST-INCOME> 782,027
<OTHER-INCOME> 0
<EXPENSES-NET> 2,404,302
<NET-INVESTMENT-INCOME> 1,129,079
<REALIZED-GAINS-CURRENT> 24,623,892
<APPREC-INCREASE-CURRENT> (45,742,535)
<NET-CHANGE-FROM-OPS> (19,989,564)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,613
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 45,656,420
<ACCUMULATED-NII-PRIOR> 130,093
<ACCUMULATED-GAINS-PRIOR> 14,688,293
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,618,705
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,652,835
<AVERAGE-NET-ASSETS> 435,231,892
<PER-SHARE-NAV-BEGIN> 21.62
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (.75)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.87
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 581
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 177,954,882
<INVESTMENTS-AT-VALUE> 151,465,470
<RECEIVABLES> 1,616,061
<ASSETS-OTHER> 191,740
<OTHER-ITEMS-ASSETS> 3,012,499
<TOTAL-ASSETS> 156,285,770
<PAYABLE-FOR-SECURITIES> 553,408
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 527,313
<TOTAL-LIABILITIES> 1,080,721
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 180,231,729
<SHARES-COMMON-STOCK> 5,957,974
<SHARES-COMMON-PRIOR> 1,824,207
<ACCUMULATED-NII-CURRENT> 1,078,534
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 510,450
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (26,615,664)
<NET-ASSETS> 155,205,049
<DIVIDEND-INCOME> 1,485,665
<INTEREST-INCOME> 446,293
<OTHER-INCOME> 0
<EXPENSES-NET> 873,296
<NET-INVESTMENT-INCOME> 1,058,662
<REALIZED-GAINS-CURRENT> 532,904
<APPREC-INCREASE-CURRENT> (25,752,101)
<NET-CHANGE-FROM-OPS> (24,160,535)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,166,538
<NUMBER-OF-SHARES-REDEEMED> 1,032,771
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 118,266,011
<ACCUMULATED-NII-PRIOR> 6,210
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 8,792
<GROSS-ADVISORY-FEES> 642,999
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,151,772
<AVERAGE-NET-ASSETS> 108,054,607
<PER-SHARE-NAV-BEGIN> 9.69
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> .94
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.79
<EXPENSE-RATIO> 2.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 582
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 177,954,882
<INVESTMENTS-AT-VALUE> 151,465,470
<RECEIVABLES> 1,616,061
<ASSETS-OTHER> 191,740
<OTHER-ITEMS-ASSETS> 3,012,499
<TOTAL-ASSETS> 156,285,770
<PAYABLE-FOR-SECURITIES> 553,408
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 527,313
<TOTAL-LIABILITIES> 1,080,721
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 180,231,729
<SHARES-COMMON-STOCK> 49,880
<SHARES-COMMON-PRIOR> 6,579
<ACCUMULATED-NII-CURRENT> 1,078,534
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 510,450
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (26,615,664)
<NET-ASSETS> 115,205,049
<DIVIDEND-INCOME> 1,485,665
<INTEREST-INCOME> 446,293
<OTHER-INCOME> 0
<EXPENSES-NET> 873,296
<NET-INVESTMENT-INCOME> 1,058,662
<REALIZED-GAINS-CURRENT> 532,904
<APPREC-INCREASE-CURRENT> (25,752,101)
<NET-CHANGE-FROM-OPS> (24,160,535)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 45,829
<NUMBER-OF-SHARES-REDEEMED> 2,528
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 118,266,011
<ACCUMULATED-NII-PRIOR> 6,210
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 8,792
<GROSS-ADVISORY-FEES> 642,999
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,151,772
<AVERAGE-NET-ASSETS> 108,054,607
<PER-SHARE-NAV-BEGIN> 9.69
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .93
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.79
<EXPENSE-RATIO> 2.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 587
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 177,954,882
<INVESTMENTS-AT-VALUE> 151,465,470
<RECEIVABLES> 1,616,061
<ASSETS-OTHER> 191,740
<OTHER-ITEMS-ASSETS> 3,012,499
<TOTAL-ASSETS> 156,285,770
<PAYABLE-FOR-SECURITIES> 553,408
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 527,313
<TOTAL-LIABILITIES> 1,080,721
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 180,231,729
<SHARES-COMMON-STOCK> 28,661
<SHARES-COMMON-PRIOR> 7,520
<ACCUMULATED-NII-CURRENT> 1,078,534
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 510,450
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (26,615,664)
<NET-ASSETS> 155,205,049
<DIVIDEND-INCOME> 1,485,665
<INTEREST-INCOME> 446,293
<OTHER-INCOME> 0
<EXPENSES-NET> 873,296
<NET-INVESTMENT-INCOME> 1,058,662
<REALIZED-GAINS-CURRENT> 532,904
<APPREC-INCREASE-CURRENT> (25,752,101)
<NET-CHANGE-FROM-OPS> (24,160,535)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 24,991
<NUMBER-OF-SHARES-REDEEMED> 3,850
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 118,266,011
<ACCUMULATED-NII-PRIOR> 6,210
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 8,792
<GROSS-ADVISORY-FEES> 642,999
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,151,772
<AVERAGE-NET-ASSETS> 108,054,607
<PER-SHARE-NAV-BEGIN> 9.70
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .94
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.79
<EXPENSE-RATIO> 2.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 583
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 177,954,882
<INVESTMENTS-AT-VALUE> 151,465,470
<RECEIVABLES> 1,616,061
<ASSETS-OTHER> 191,740
<OTHER-ITEMS-ASSETS> 3,012,499
<TOTAL-ASSETS> 156,285,770
<PAYABLE-FOR-SECURITIES> 553,408
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 527,313
<TOTAL-LIABILITIES> 1,080,721
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 180,231,729
<SHARES-COMMON-STOCK> 11,546,320
<SHARES-COMMON-PRIOR> 1,971,850
<ACCUMULATED-NII-CURRENT> 1,078,534
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 510,450
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (26,615,664)
<NET-ASSETS> 155,205,049
<DIVIDEND-INCOME> 1,485,665
<INTEREST-INCOME> 446,293
<OTHER-INCOME> 0
<EXPENSES-NET> 873,296
<NET-INVESTMENT-INCOME> 1,058,662
<REALIZED-GAINS-CURRENT> 532,904
<APPREC-INCREASE-CURRENT> (25,752,101)
<NET-CHANGE-FROM-OPS> (24,160,535)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,666,551
<NUMBER-OF-SHARES-REDEEMED> 1,092,081
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 118,266,011
<ACCUMULATED-NII-PRIOR> 6,210
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 8,792
<GROSS-ADVISORY-FEES> 642,999
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,151,772
<AVERAGE-NET-ASSETS> 108,054,607
<PER-SHARE-NAV-BEGIN> 9.70
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> .92
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.79
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 586
<NAME> GOLDMAN SACHS EMERGING MARKETS EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 177,954,882
<INVESTMENTS-AT-VALUE> 151,465,470
<RECEIVABLES> 1,616,061
<ASSETS-OTHER> 191,740
<OTHER-ITEMS-ASSETS> 3,012,499
<TOTAL-ASSETS> 156,285,770
<PAYABLE-FOR-SECURITIES> 553,408
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 527,313
<TOTAL-LIABILITIES> 1,080,721
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 180,231,729
<SHARES-COMMON-STOCK> 160
<SHARES-COMMON-PRIOR> 160
<ACCUMULATED-NII-CURRENT> 1,078,534
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 510,450
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (26,615,664)
<NET-ASSETS> 115,205,049
<DIVIDEND-INCOME> 1,485,665
<INTEREST-INCOME> 446,293
<OTHER-INCOME> 0
<EXPENSES-NET> 873,296
<NET-INVESTMENT-INCOME> 1,058,662
<REALIZED-GAINS-CURRENT> 532,904
<APPREC-INCREASE-CURRENT> (25,752,101)
<NET-CHANGE-FROM-OPS> (24,160,535)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 118,266,011
<ACCUMULATED-NII-PRIOR> 6,210
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 8,792
<GROSS-ADVISORY-FEES> 642,999
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 108,054,607
<AVERAGE-NET-ASSETS> 1,583
<PER-SHARE-NAV-BEGIN> 9.69
<PER-SHARE-NII> (.13)
<PER-SHARE-GAIN-APPREC> .94
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.79
<EXPENSE-RATIO> 1.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 591
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 750,558,240
<INVESTMENTS-AT-VALUE> 952,208,449
<RECEIVABLES> 6,748,888
<ASSETS-OTHER> 80,182
<OTHER-ITEMS-ASSETS> 77,690
<TOTAL-ASSETS> 959,115,209
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,240,401
<TOTAL-LIABILITIES> 4,240,401
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 708,284,493
<SHARES-COMMON-STOCK> 17,461,477
<SHARES-COMMON-PRIOR> 14,985,404
<ACCUMULATED-NII-CURRENT> 1,531,939
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44,084,376
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 200,974,000
<NET-ASSETS> 954,874,808
<DIVIDEND-INCOME> 5,658,623
<INTEREST-INCOME> 534,719
<OTHER-INCOME> 0
<EXPENSES-NET> 4,736,436
<NET-INVESTMENT-INCOME> 1,456,906
<REALIZED-GAINS-CURRENT> 39,568,896
<APPREC-INCREASE-CURRENT> 51,053,647
<NET-CHANGE-FROM-OPS> 92,079,449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,373,115
<NUMBER-OF-SHARES-REDEEMED> 1,897,042
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 280,272,678
<ACCUMULATED-NII-PRIOR> 75,033
<ACCUMULATED-GAINS-PRIOR> 4,515,480
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,135,590
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,447,353
<AVERAGE-NET-ASSETS> 843,086,650
<PER-SHARE-NAV-BEGIN> 26.59
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> 3.61
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 30.23
<EXPENSE-RATIO> 1.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 592
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 750,558,240
<INVESTMENTS-AT-VALUE> 952,208,449
<RECEIVABLES> 6,748,888
<ASSETS-OTHER> 80,812
<OTHER-ITEMS-ASSETS> 77,690
<TOTAL-ASSETS> 959,115,209
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,240,401
<TOTAL-LIABILITIES> 4,240,401
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 708,284,493
<SHARES-COMMON-STOCK> 3,435,462
<SHARES-COMMON-PRIOR> 2,249,148
<ACCUMULATED-NII-CURRENT> 1,531,939
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44,084,376
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 200,974,000
<NET-ASSETS> 954,874,808
<DIVIDEND-INCOME> 5,658,623
<INTEREST-INCOME> 534,719
<OTHER-INCOME> 0
<EXPENSES-NET> 4,736,436
<NET-INVESTMENT-INCOME> 1,456,906
<REALIZED-GAINS-CURRENT> 39,568,896
<APPREC-INCREASE-CURRENT> 51,053,647
<NET-CHANGE-FROM-OPS> 92,079,449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,357,106
<NUMBER-OF-SHARES-REDEEMED> 170,792
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 280,272,678
<ACCUMULATED-NII-PRIOR> 75,033
<ACCUMULATED-GAINS-PRIOR> 4,515,480
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,135,590
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,447,353
<AVERAGE-NET-ASSETS> 843,086,650
<PER-SHARE-NAV-BEGIN> 26.32
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> 3.58
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 29.86
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 597
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 750,558,240
<INVESTMENTS-AT-VALUE> 952,208,449
<RECEIVABLES> 6,748,888
<ASSETS-OTHER> 80,182
<OTHER-ITEMS-ASSETS> 77,690
<TOTAL-ASSETS> 959,115,209
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,240,401
<TOTAL-LIABILITIES> 4,240,401
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 708,284,493
<SHARES-COMMON-STOCK> 514,584
<SHARES-COMMON-PRIOR> 238,838
<ACCUMULATED-NII-CURRENT> 1,531,939
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44,084,376
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 200,974,000
<NET-ASSETS> 954,874,808
<DIVIDEND-INCOME> 5,658,623
<INTEREST-INCOME> 534,719
<OTHER-INCOME> 0
<EXPENSES-NET> 4,736,436
<NET-INVESTMENT-INCOME> 1,456,906
<REALIZED-GAINS-CURRENT> 39,568,896
<APPREC-INCREASE-CURRENT> 51,053,647
<NET-CHANGE-FROM-OPS> 92,079,449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 298,123
<NUMBER-OF-SHARES-REDEEMED> 22,377
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 280,272,678
<ACCUMULATED-NII-PRIOR> 75,033
<ACCUMULATED-GAINS-PRIOR> 4,515,480
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,135,590
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,447,353
<AVERAGE-NET-ASSETS> 843,086,650
<PER-SHARE-NAV-BEGIN> 26.24
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> 3.56
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 29.76
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENC TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 593
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 750,558,240
<INVESTMENTS-AT-VALUE> 952,208,449
<RECEIVABLES> 6,748,888
<ASSETS-OTHER> 80,182
<OTHER-ITEMS-ASSETS> 77,690
<TOTAL-ASSETS> 959,115,209
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,240,401
<TOTAL-LIABILITIES> 4,240,401
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 708,284,493
<SHARES-COMMON-STOCK> 9,782,463
<SHARES-COMMON-PRIOR> 7,573,189
<ACCUMULATED-NII-CURRENT> 1,531,939
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44,084,376
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 200,974,000
<NET-ASSETS> 954,874,808
<DIVIDEND-INCOME> 5,658,623
<INTEREST-INCOME> 534,719
<OTHER-INCOME> 0
<EXPENSES-NET> 4,736,436
<NET-INVESTMENT-INCOME> 1,456,906
<REALIZED-GAINS-CURRENT> 39,568,896
<APPREC-INCREASE-CURRENT> 51,053,647
<NET-CHANGE-FROM-OPS> 92,079,449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,373,307
<NUMBER-OF-SHARES-REDEEMED> 164,033
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 280,272,678
<ACCUMULATED-NII-PRIOR> 75,033
<ACCUMULATED-GAINS-PRIOR> 4,515,480
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,135,590
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,447,353
<AVERAGE-NET-ASSETS> 843,086,650
<PER-SHARE-NAV-BEGIN> 26.79
<PER-SHARE-NII> .10
<PER-SHARE-GAIN-APPREC> 3.66
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 30.55
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 596
<NAME> GOLDMAN SACHS CORE US EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 750,558,240
<INVESTMENTS-AT-VALUE> 952,208,449
<RECEIVABLES> 6,748,888
<ASSETS-OTHER> 80,182
<OTHER-ITEMS-ASSETS> 77,690
<TOTAL-ASSETS> 959,115,209
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,240,401
<TOTAL-LIABILITIES> 4,240,401
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 708,284,493
<SHARES-COMMON-STOCK> 344,244
<SHARES-COMMON-PRIOR> 295,570
<ACCUMULATED-NII-CURRENT> 1,531,939
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44,084,376
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 200,974,000
<NET-ASSETS> 954,874,808
<DIVIDEND-INCOME> 5,658,623
<INTEREST-INCOME> 534,719
<OTHER-INCOME> 0
<EXPENSES-NET> 4,736,436
<NET-INVESTMENT-INCOME> 1,456,906
<REALIZED-GAINS-CURRENT> 39,568,896
<APPREC-INCREASE-CURRENT> 51,053,647
<NET-CHANGE-FROM-OPS> 92,079,449
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 74,235
<NUMBER-OF-SHARES-REDEEMED> 25,561
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 280,272,678
<ACCUMULATED-NII-PRIOR> 75,033
<ACCUMULATED-GAINS-PRIOR> 4,515,480
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,135,590
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,447,353
<AVERAGE-NET-ASSETS> 843,086,650
<PER-SHARE-NAV-BEGIN> 26.53
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 3.60
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 30.18
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLMDNA
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 601
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 302,189,309
<INVESTMENTS-AT-VALUE> 314,110,080
<RECEIVABLES> 4,671,711
<ASSETS-OTHER> 249,575
<OTHER-ITEMS-ASSETS> 29,294
<TOTAL-ASSETS> 319,030,660
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 826,337
<TOTAL-LIABILITIES> 826,337
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 299,819,035
<SHARES-COMMON-STOCK> 8,381,989
<SHARES-COMMON-PRIOR> 4,491,866
<ACCUMULATED-NII-CURRENT> 73,976
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,493,653
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,817,659
<NET-ASSETS> 318,204,323
<DIVIDEND-INCOME> 648,922
<INTEREST-INCOME> 310,863
<OTHER-INCOME> 0
<EXPENSES-NET> 869,145
<NET-INVESTMENT-INCOME> 90,640
<REALIZED-GAINS-CURRENT> 6,987,493
<APPREC-INCREASE-CURRENT> 6,798,385
<NET-CHANGE-FROM-OPS> 13,876,518
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,324,879
<NUMBER-OF-SHARES-REDEEMED> 434,756
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 241,658,170
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 16,664
<OVERDIST-NET-GAINS-PRIOR> 493,840
<GROSS-ADVISORY-FEES> 663,785
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,389,715
<AVERAGE-NET-ASSETS> 178,476,423
<PER-SHARE-NAV-BEGIN> 11.97
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 1.97
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.95
<EXPENSE-RATIO> .90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 602
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 302,189,309
<INVESTMENTS-AT-VALUE> 314,110,080
<RECEIVABLES> 4,671,711
<ASSETS-OTHER> 249,575
<OTHER-ITEMS-ASSETS> 29,294
<TOTAL-ASSETS> 319,030,660
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 826,337
<TOTAL-LIABILITIES> 826,337
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 299,819,035
<SHARES-COMMON-STOCK> 3,602,353
<SHARES-COMMON-PRIOR> 1,162,113
<ACCUMULATED-NII-CURRENT> 73,976
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,493,653
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,817,659
<NET-ASSETS> 318,204,323
<DIVIDEND-INCOME> 648,922
<INTEREST-INCOME> 310,863
<OTHER-INCOME> 0
<EXPENSES-NET> 869,145
<NET-INVESTMENT-INCOME> 90,640
<REALIZED-GAINS-CURRENT> 6,987,493
<APPREC-INCREASE-CURRENT> 6,798,385
<NET-CHANGE-FROM-OPS> 13,876,518
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,555,049
<NUMBER-OF-SHARES-REDEEMED> 114,809
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 241,658,170
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 16,664
<OVERDIST-NET-GAINS-PRIOR> 493,840
<GROSS-ADVISORY-FEES> 663,785
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,389,715
<AVERAGE-NET-ASSETS> 178,476,423
<PER-SHARE-NAV-BEGIN> 11.92
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 1.95
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.85
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 607
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 302,189,309
<INVESTMENTS-AT-VALUE> 314,110,080
<RECEIVABLES> 4,671,711
<ASSETS-OTHER> 249,575
<OTHER-ITEMS-ASSETS> 29,294
<TOTAL-ASSETS> 319,030,660
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 826,337
<TOTAL-LIABILITIES> 826,337
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 299,819,035
<SHARES-COMMON-STOCK> 1,136,062
<SHARES-COMMON-PRIOR> 346,492
<ACCUMULATED-NII-CURRENT> 73,976
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,493,653
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,817,659
<NET-ASSETS> 318,204,323
<DIVIDEND-INCOME> 648,922
<INTEREST-INCOME> 310,863
<OTHER-INCOME> 0
<EXPENSES-NET> 869,145
<NET-INVESTMENT-INCOME> 90,640
<REALIZED-GAINS-CURRENT> 6,987,493
<APPREC-INCREASE-CURRENT> 6,798,385
<NET-CHANGE-FROM-OPS> 13,876,518
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 832,280
<NUMBER-OF-SHARES-REDEEMED> 42,710
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 241,658,170
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 16,664
<OVERDIST-NET-GAINS-PRIOR> 493,840
<GROSS-ADVISORY-FEES> 663,785
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,389,715
<AVERAGE-NET-ASSETS> 178,476,423
<PER-SHARE-NAV-BEGIN> 11.93
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> 1.93
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.84
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 603
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 302,189,309
<INVESTMENTS-AT-VALUE> 314,110,080
<RECEIVABLES> 4,671,711
<ASSETS-OTHER> 249,575
<OTHER-ITEMS-ASSETS> 29,294
<TOTAL-ASSETS> 319,030,660
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 826,337
<TOTAL-LIABILITIES> 826,337
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 299,819,035
<SHARES-COMMON-STOCK> 9,676,665
<SHARES-COMMON-PRIOR> 388,928
<ACCUMULATED-NII-CURRENT> 73,976
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,493,653
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,817,659
<NET-ASSETS> 318,204,323
<DIVIDEND-INCOME> 648,922
<INTEREST-INCOME> 310,863
<OTHER-INCOME> 0
<EXPENSES-NET> 869,145
<NET-INVESTMENT-INCOME> 90,640
<REALIZED-GAINS-CURRENT> 6,987,493
<APPREC-INCREASE-CURRENT> 6,798,385
<NET-CHANGE-FROM-OPS> 13,876,518
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,196,002
<NUMBER-OF-SHARES-REDEEMED> 908,265
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 241,658,170
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 16,664
<OVERDIST-NET-GAINS-PRIOR> 493,840
<GROSS-ADVISORY-FEES> 663,785
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,389,715
<AVERAGE-NET-ASSETS> 178,476,423
<PER-SHARE-NAV-BEGIN> 11.97
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 1.99
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.97
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 606
<NAME> GOLDMAN SACHS CORE LARGE CAP GROWTH FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 302,189,309
<INVESTMENTS-AT-VALUE> 314,110,080
<RECEIVABLES> 4,671,711
<ASSETS-OTHER> 249,575
<OTHER-ITEMS-ASSETS> 29,294
<TOTAL-ASSETS> 319,030,660
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 826,337
<TOTAL-LIABILITIES> 826,337
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 299,819,035
<SHARES-COMMON-STOCK> 36,483
<SHARES-COMMON-PRIOR> 9,619
<ACCUMULATED-NII-CURRENT> 73,976
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6,493,653
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 11,817,659
<NET-ASSETS> 318,204,323
<DIVIDEND-INCOME> 648,922
<INTEREST-INCOME> 310,863
<OTHER-INCOME> 0
<EXPENSES-NET> 869,145
<NET-INVESTMENT-INCOME> 90,640
<REALIZED-GAINS-CURRENT> 6,987,493
<APPREC-INCREASE-CURRENT> 6,798,385
<NET-CHANGE-FROM-OPS> 13,876,518
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 26,864
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 241,658,170
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 16,664
<OVERDIST-NET-GAINS-PRIOR> 493,840
<GROSS-ADVISORY-FEES> 663,785
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,389,715
<AVERAGE-NET-ASSETS> 178,476,423
<PER-SHARE-NAV-BEGIN> 11.95
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 1.96
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.91
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 611
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 245,448,150
<INVESTMENTS-AT-VALUE> 248,020,043
<RECEIVABLES> 2,358,961
<ASSETS-OTHER> 161,416
<OTHER-ITEMS-ASSETS> 1,178,536
<TOTAL-ASSETS> 251,718,956
<PAYABLE-FOR-SECURITIES> 5,142,686
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,138,017
<TOTAL-LIABILITIES> 6,280,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 243,023,345
<SHARES-COMMON-STOCK> 2,082,717
<SHARES-COMMON-PRIOR> 768,392
<ACCUMULATED-NII-CURRENT> 1,067,631
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1,219,404
<ACCUM-APPREC-OR-DEPREC> 2,566,681
<NET-ASSETS> 245,438,253
<DIVIDEND-INCOME> 1,523,474
<INTEREST-INCOME> 217,415
<OTHER-INCOME> 0
<EXPENSES-NET> 661,518
<NET-INVESTMENT-INCOME> 1,079,371
<REALIZED-GAINS-CURRENT> (543,649)
<APPREC-INCREASE-CURRENT> 2,466,573
<NET-CHANGE-FROM-OPS> 3,002,295
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,424,896
<NUMBER-OF-SHARES-REDEEMED> 110,571
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 216,302,746
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 148,309
<OVERDIST-NET-GAINS-PRIOR> 539,186
<GROSS-ADVISORY-FEES> 505,202
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 979,484
<AVERAGE-NET-ASSETS> 119,856,157
<PER-SHARE-NAV-BEGIN> 9.22
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> .86
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.13
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 612
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 245,448,150
<INVESTMENTS-AT-VALUE> 248,020,043
<RECEIVABLES> 2,358,961
<ASSETS-OTHER> 161,416
<OTHER-ITEMS-ASSETS> 1,178,536
<TOTAL-ASSETS> 251,718,956
<PAYABLE-FOR-SECURITIES> 5,142,686
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,138,017
<TOTAL-LIABILITIES> 6,280,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 243,023,345
<SHARES-COMMON-STOCK> 611,192
<SHARES-COMMON-PRIOR> 295,542
<ACCUMULATED-NII-CURRENT> 1,067,631
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1,219,404
<ACCUM-APPREC-OR-DEPREC> 2,566,681
<NET-ASSETS> 245,438,253
<DIVIDEND-INCOME> 1,523,474
<INTEREST-INCOME> 217,415
<OTHER-INCOME> 0
<EXPENSES-NET> 661,518
<NET-INVESTMENT-INCOME> 1,079,371
<REALIZED-GAINS-CURRENT> (543,649)
<APPREC-INCREASE-CURRENT> 2,466,573
<NET-CHANGE-FROM-OPS> 3,002,295
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 322,482
<NUMBER-OF-SHARES-REDEEMED> 6,832
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 216,302,746
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 148,309
<OVERDIST-NET-GAINS-PRIOR> 539,186
<GROSS-ADVISORY-FEES> 505,202
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 979,484
<AVERAGE-NET-ASSETS> 119,856,157
<PER-SHARE-NAV-BEGIN> 9.21
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .85
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.09
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 617
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 245,448,150
<INVESTMENTS-AT-VALUE> 248,020,043
<RECEIVABLES> 2,358,961
<ASSETS-OTHER> 161,416
<OTHER-ITEMS-ASSETS> 1,178,536
<TOTAL-ASSETS> 251,718,956
<PAYABLE-FOR-SECURITIES> 5,142,686
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,138,071
<TOTAL-LIABILITIES> 6,280,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 243,023,345
<SHARES-COMMON-STOCK> 284,498
<SHARES-COMMON-PRIOR> 174,438
<ACCUMULATED-NII-CURRENT> 1,067,631
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1,219,404
<ACCUM-APPREC-OR-DEPREC> 2,566,681
<NET-ASSETS> 245,438,253
<DIVIDEND-INCOME> 1,523,474
<INTEREST-INCOME> 217,415
<OTHER-INCOME> 0
<EXPENSES-NET> 661,518
<NET-INVESTMENT-INCOME> 1,079,371
<REALIZED-GAINS-CURRENT> (543,649)
<APPREC-INCREASE-CURRENT> 2,466,573
<NET-CHANGE-FROM-OPS> 3,002,295
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 147,294
<NUMBER-OF-SHARES-REDEEMED> 37,234
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 216,302,746
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 148,309
<OVERDIST-NET-GAINS-PRIOR> 539,186
<GROSS-ADVISORY-FEES> 505,202
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 979,484
<AVERAGE-NET-ASSETS> 119,856,157
<PER-SHARE-NAV-BEGIN> 9.22
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> .84
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.10
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 613
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 245,448,150
<INVESTMENTS-AT-VALUE> 248,020,043
<RECEIVABLES> 2,358,961
<ASSETS-OTHER> 161,416
<OTHER-ITEMS-ASSETS> 1,178,536
<TOTAL-ASSETS> 251,718,956
<PAYABLE-FOR-SECURITIES> 5,142,686
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,138,017
<TOTAL-LIABILITIES> 6,280,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 243,023,345
<SHARES-COMMON-STOCK> 21,161,232
<SHARES-COMMON-PRIOR> 1,920,464
<ACCUMULATED-NII-CURRENT> 1,067,631
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1,219,404
<ACCUM-APPREC-OR-DEPREC> 2,566,681
<NET-ASSETS> 245,438,253
<DIVIDEND-INCOME> 1,523,474
<INTEREST-INCOME> 217,415
<OTHER-INCOME> 0
<EXPENSES-NET> 661,518
<NET-INVESTMENT-INCOME> 1,079,371
<REALIZED-GAINS-CURRENT> (543,649)
<APPREC-INCREASE-CURRENT> 2,466,573
<NET-CHANGE-FROM-OPS> 3,002,295
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20,420,363
<NUMBER-OF-SHARES-REDEEMED> 1,179,595
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 216,302,746
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 148,309
<OVERDIST-NET-GAINS-PRIOR> 539,186
<GROSS-ADVISORY-FEES> 505,202
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 979,484
<AVERAGE-NET-ASSETS> 119,856,157
<PER-SHARE-NAV-BEGIN> 9.24
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> .89
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.17
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 616
<NAME> GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 245,448,150
<INVESTMENTS-AT-VALUE> 248,020,043
<RECEIVABLES> 2,358,961
<ASSETS-OTHER> 161,416
<OTHER-ITEMS-ASSETS> 1,178,536
<TOTAL-ASSETS> 251,718,956
<PAYABLE-FOR-SECURITIES> 5,142,686
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,138,017
<TOTAL-LIABILITIES> 6,280,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 243,023,345
<SHARES-COMMON-STOCK> 1,097
<SHARES-COMMON-PRIOR> 161
<ACCUMULATED-NII-CURRENT> 1,067,631
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 1,219,404
<ACCUM-APPREC-OR-DEPREC> 2,566,681
<NET-ASSETS> 245,438,253
<DIVIDEND-INCOME> 1,523,474
<INTEREST-INCOME> 217,415
<OTHER-INCOME> 0
<EXPENSES-NET> 661,518
<NET-INVESTMENT-INCOME> 1,079,371
<REALIZED-GAINS-CURRENT> (543,649)
<APPREC-INCREASE-CURRENT> 2,466,573
<NET-CHANGE-FROM-OPS> 3,002,295
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 936
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 216,302,746
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 148,309
<OVERDIST-NET-GAINS-PRIOR> 539,186
<GROSS-ADVISORY-FEES> 505,202
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 979,484
<AVERAGE-NET-ASSETS> 119,856,157
<PER-SHARE-NAV-BEGIN> 9.23
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .91
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.15
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31,1 998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 637
<NAME> GOLDMAN SACHS INTERNATIONAL SMALL CAP FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 33,866,031
<INVESTMENTS-AT-VALUE> 34,487,824
<RECEIVABLES> 6,367,654
<ASSETS-OTHER> 91,192
<OTHER-ITEMS-ASSETS> 6,915
<TOTAL-ASSETS> 40,953,585
<PAYABLE-FOR-SECURITIES> 3,937,386
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 187,089
<TOTAL-LIABILITIES> 4,124,475
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35,965,811
<SHARES-COMMON-STOCK> 9,186
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,708
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 211,777
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 631,814
<NET-ASSETS> 36,829,110
<DIVIDEND-INCOME> 37,934
<INTEREST-INCOME> 42,282
<OTHER-INCOME> 0
<EXPENSES-NET> 60,508
<NET-INVESTMENT-INCOME> 19,708
<REALIZED-GAINS-CURRENT> 211,777
<APPREC-INCREASE-CURRENT> 631,814
<NET-CHANGE-FROM-OPS> 863,299
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,186
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 36,829,110
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 46,263
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 200,919
<AVERAGE-NET-ASSETS> 15,295,219
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .63
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 2.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31,1 998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 633
<NAME> GOLDMAN SACHS INTERNATIONAL SMALL CAP FUND-INST.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 33,866,031
<INVESTMENTS-AT-VALUE> 34,487,824
<RECEIVABLES> 6,367,654
<ASSETS-OTHER> 91,192
<OTHER-ITEMS-ASSETS> 6,915
<TOTAL-ASSETS> 40,953,585
<PAYABLE-FOR-SECURITIES> 3,937,386
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 187,089
<TOTAL-LIABILITIES> 4,124,475
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35,965,811
<SHARES-COMMON-STOCK> 1,000,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,708
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 211,777
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 631,814
<NET-ASSETS> 36,829,110
<DIVIDEND-INCOME> 37,934
<INTEREST-INCOME> 42,282
<OTHER-INCOME> 0
<EXPENSES-NET> 60,508
<NET-INVESTMENT-INCOME> 19,708
<REALIZED-GAINS-CURRENT> 211,777
<APPREC-INCREASE-CURRENT> 631,814
<NET-CHANGE-FROM-OPS> 863,299
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,000,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 36,829,110
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 46,263
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 200,919
<AVERAGE-NET-ASSETS> 15,295,219
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .03
<PER-SHARE-GAIN-APPREC> .60
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.63
<EXPENSE-RATIO> 1.40
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31,1 998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 636
<NAME> GOLDMAN SACHS INTERNATIONAL SMALL CAP FUND-SERV.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 33,866,031
<INVESTMENTS-AT-VALUE> 34,487,824
<RECEIVABLES> 6,367,654
<ASSETS-OTHER> 91,192
<OTHER-ITEMS-ASSETS> 6,915
<TOTAL-ASSETS> 40,953,585
<PAYABLE-FOR-SECURITIES> 3,937,386
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 187,089
<TOTAL-LIABILITIES> 4,124,475
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35,965,811
<SHARES-COMMON-STOCK> 150
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,708
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 211,777
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 631,814
<NET-ASSETS> 36,829,110
<DIVIDEND-INCOME> 37,934
<INTEREST-INCOME> 42,282
<OTHER-INCOME> 0
<EXPENSES-NET> 60,508
<NET-INVESTMENT-INCOME> 19,708
<REALIZED-GAINS-CURRENT> 211,777
<APPREC-INCREASE-CURRENT> 631,814
<NET-CHANGE-FROM-OPS> 863,299
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 150
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 36,829,110
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 46,263
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 200,919
<AVERAGE-NET-ASSETS> 15,295,219
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> .61
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.62
<EXPENSE-RATIO> 1.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31,1 998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 641
<NAME> GOLDMAN SACHS JAPANESE EQUITY FUND-CLASS A
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 14,572,611
<INVESTMENTS-AT-VALUE> 14,788,370
<RECEIVABLES> 207,511
<ASSETS-OTHER> 68,734
<OTHER-ITEMS-ASSETS> 670,335
<TOTAL-ASSETS> 15,734,950
<PAYABLE-FOR-SECURITIES> 46,247
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,448
<TOTAL-LIABILITIES> 94,695
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15,452,687
<SHARES-COMMON-STOCK> 461,444
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12,402
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 20,859
<ACCUM-APPREC-OR-DEPREC> 220,829
<NET-ASSETS> 15,640,255
<DIVIDEND-INCOME> 2,118
<INTEREST-INCOME> 26,582
<OTHER-INCOME> 0
<EXPENSES-NET> 41,102
<NET-INVESTMENT-INCOME> (12,402)
<REALIZED-GAINS-CURRENT> (20,859)
<APPREC-INCREASE-CURRENT> 220,829
<NET-CHANGE-FROM-OPS> 187,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 577,828
<NUMBER-OF-SHARES-REDEEMED> 116,384
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,640,255
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 35,290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148,046
<AVERAGE-NET-ASSETS> 14,001,029
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.09
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 642
<NAME> GOLDMAN SACHS JAPANESE EQUITY FUND-CLASS B
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 14,572,611
<INVESTMENTS-AT-VALUE> 14,788,370
<RECEIVABLES> 207,511
<ASSETS-OTHER> 68,734
<OTHER-ITEMS-ASSETS> 670,335
<TOTAL-ASSETS> 15,734,950
<PAYABLE-FOR-SECURITIES> 46,247
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,448
<TOTAL-LIABILITIES> 94,695
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15,452,687
<SHARES-COMMON-STOCK> 70,030
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12,402
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 20,859
<ACCUM-APPREC-OR-DEPREC> 220,829
<NET-ASSETS> 15,640,255
<DIVIDEND-INCOME> 2,118
<INTEREST-INCOME> 26,582
<OTHER-INCOME> 0
<EXPENSES-NET> 41,102
<NET-INVESTMENT-INCOME> (12,402)
<REALIZED-GAINS-CURRENT> (20,859)
<APPREC-INCREASE-CURRENT> 220,829
<NET-CHANGE-FROM-OPS> 187,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 70,030
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,640,255
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 35,290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148,046
<AVERAGE-NET-ASSETS> 14,001,029
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> .11
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.08
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 647
<NAME> GOLDMAN SACHS JAPANESE EQUITY FUND-CLASS C
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 14,572,611
<INVESTMENTS-AT-VALUE> 14,788,370
<RECEIVABLES> 207,511
<ASSETS-OTHER> 68,734
<OTHER-ITEMS-ASSETS> 670,335
<TOTAL-ASSETS> 15,734,950
<PAYABLE-FOR-SECURITIES> 46,247
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,448
<TOTAL-LIABILITIES> 94,695
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15,452,687
<SHARES-COMMON-STOCK> 17,643
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12,402
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 20,859
<ACCUM-APPREC-OR-DEPREC> 220,829
<NET-ASSETS> 15,640,255
<DIVIDEND-INCOME> 2,118
<INTEREST-INCOME> 26,582
<OTHER-INCOME> 0
<EXPENSES-NET> 41,102
<NET-INVESTMENT-INCOME> (12,402)
<REALIZED-GAINS-CURRENT> (20,859)
<APPREC-INCREASE-CURRENT> 220,829
<NET-CHANGE-FROM-OPS> 187,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 17,845
<NUMBER-OF-SHARES-REDEEMED> 202
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,640,255
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 35,290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148,046
<AVERAGE-NET-ASSETS> 14,001,029
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.08
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 643
<NAME> GOLDMAN SACHS JAPANESE EQUITY FUND-INST.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 14,572,611
<INVESTMENTS-AT-VALUE> 14,788,370
<RECEIVABLES> 207,511
<ASSETS-OTHER> 68,734
<OTHER-ITEMS-ASSETS> 670,335
<TOTAL-ASSETS> 15,734,950
<PAYABLE-FOR-SECURITIES> 46,247
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,448
<TOTAL-LIABILITIES> 94,695
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15,452,687
<SHARES-COMMON-STOCK> 1,000,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12,402
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 20,859
<ACCUM-APPREC-OR-DEPREC> 220,829
<NET-ASSETS> 15,640,255
<DIVIDEND-INCOME> 2,118
<INTEREST-INCOME> 26,582
<OTHER-INCOME> 0
<EXPENSES-NET> 41,102
<NET-INVESTMENT-INCOME> (12,402)
<REALIZED-GAINS-CURRENT> (20,859)
<APPREC-INCREASE-CURRENT> 220,829
<NET-CHANGE-FROM-OPS> 187,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,000,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,640,255
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 35,290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148,046
<AVERAGE-NET-ASSETS> 14,001,029
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.10
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GOLDMAN
SACHS EQUITY FUNDS SEMI ANNUAL REPORT DATED JULY 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 646
<NAME> GOLDMAN SACHS JAPANESE EQUITY FUND-SERV.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 14,572,611
<INVESTMENTS-AT-VALUE> 14,788,370
<RECEIVABLES> 207,511
<ASSETS-OTHER> 68,734
<OTHER-ITEMS-ASSETS> 670,335
<TOTAL-ASSETS> 15,734,950
<PAYABLE-FOR-SECURITIES> 46,247
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48,448
<TOTAL-LIABILITIES> 94,695
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15,452,687
<SHARES-COMMON-STOCK> 150
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 12,402
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 20,859
<ACCUM-APPREC-OR-DEPREC> 220,829
<NET-ASSETS> 15,640,255
<DIVIDEND-INCOME> 2,118
<INTEREST-INCOME> 26,582
<OTHER-INCOME> 0
<EXPENSES-NET> 41,102
<NET-INVESTMENT-INCOME> (12,402)
<REALIZED-GAINS-CURRENT> (20,859)
<APPREC-INCREASE-CURRENT> 220,829
<NET-CHANGE-FROM-OPS> 187,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 150
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,640,255
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 35,290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 148,046
<AVERAGE-NET-ASSETS> 14,001,029
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.09
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
