<PAGE>
Goldman Sachs Funds
EUROPEAN EQUITY FUND
[GRAPHIC APPEARS HERE]
Annual Report August 31, 1999
Long-term capital growth potential
through investments in equity markets
located throughout Europe.
----------
Goldman
Sachs
----------
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Market Overview
Dear Shareholder,
During the period under review, European equity markets have underperformed the
U.S. and Japan. This was due to sluggish economic growth which has been
reflected in the weakening Euro; uncertainty over the war in Bosnia; and
concerns about the robust growth in the U.S. economy, which is likely to
precipitate further rises in interest rates.
. Market Review: European Equities Underperformed--As the reporting
period began, the outlook for European equities was generally
positive. Despite the turmoil created by the Asian currency crisis, a
recessionary environment did not appear to be the likely scenario for
Euroland. In addition, the advent of the euro was causing positive
strategic changes in corporate Europe, culminating in large scale
mergers in a diverse group of industries. With this upward momentum in
place, most European equity markets rebounded to start the year. In
addition, countries like France, Italy and Germany had used lower
interest rates as a means to improve consumer and business confidence
to try to stimulate economic growth.
However, the euphoria surrounding the launch of the euro was short
lived. Throughout the reporting period the markets retreated on
concerns of emerging market instability, the war in Bosnia and rising
U.S. interest rates. In addition, the production levels were sluggish
in much of the region, most notably in Germany and Italy. The trend of
slow growth was reflected in the significant weakening of the euro
versus the dollar. The European Central Bank refused to intervene to
strengthen the euro, as it regards a depreciated euro as positive for
exports, and because there appears to be no immediate threat of
inflation given the excess capacity in Euroland.
. Market Outlook--We are positive on the outlook for Continental
Europe given the continued backdrop of capacity within the major
economies in Euroland, the resurgence in business and consumer
confidence, and the added benefit of Asia and Japan restocking
inventories. Even though the euro is likely to continue to strengthen
modestly, it is unlikely to hamper the attractiveness of exports. We
also continue to see consolidation in key sectors, such as financials
and utilities. In addition, there are opportunities arising from the
development of newer sectors such as cable, digital media and Internet
franchises.
. Special Note: Reporting Period Change -- The fiscal year-end of your
Fund has been changed to August 31. Previously, your Fund had a
January 31 fiscal year-end. This will serve as the Fund's annual
report. This change does not affect your Fund's investment objective
or strategy in any way.
We encourage you to maintain your long term investment program and we
look forward to serving your investment needs in the years to come.
Sincerely,
/s/ David B. Ford
David B. Ford
Co-Head, Goldman Sachs Asset Management
/s/ John P. McNulty
John P. McNulty
Co-Head, Goldman Sachs Asset Management
September 3, 1999
. NOT FDIC INSURED
. May Lose Value
. No Bank Guarantee
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Fund Basics
as of August 31, 1999
- --------------------------------------------------------------------------------
Performance Review
- --------------------------------------------------------------------------------
January 31, 1999 - Fund Total Return FT/S&P Actuaries
August 31, 1999 (without sales charge)/1/ European Index/2/
- --------------------------------------------------------------------------------
Class A -3.69% 1.84%
Class B -3.94 1.84
Class C -3.93 1.84
Institutional -3.35 1.84
Service -3.61 1.84
- --------------------------------------------------------------------------------
/1/ The net asset value represents the net assets of the Fund (ex-dividend)
divided by the total number of shares. The Fund's performance assumes the
reinvestment of dividends and other distributions.
/2/ The FT/S&P Actuaries Europe Index (unhedged) is an unmanaged market
capitalization-weighted composite of approximately 750 stocks from 16
countries in Europe. Total returns are calculated without dividends
reinvested. In addition, investors cannot invest directly in the Index.
- --------------------------------------------------------------------------------
Standardized Total Returns/3/
- --------------------------------------------------------------------------------
For the period ended 6/30/99 Class A Class B Class C Institutional Service
- --------------------------------------------------------------------------------
Last 6 months -6.81% -6.55% -2.53% -1.03% -1.46%
Since inception 8.70 9.70 13.80 15.60 15.00
(10/1/98)
- --------------------------------------------------------------------------------
/3/ The Standardized Total Returns are average annual total returns or
cumulative total returns (only if the performance period is one year or
less) as of the most recent calendar quarter-end. They assume reinvestment
of all distributions at net asset value. These returns reflect a maximum
initial sales charge of 5.5% for Class A shares and 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). Because Institutional and Service
shares do not involve a sales charge, such a charge is not applied to their
Standardized Total Returns.
- --------------------------------------------------------------------------------
Top 10 Holdings as of 8/31/99
- --------------------------------------------------------------------------------
% of Total
Holding Net Assets Country Line of Business
- --------------------------------------------------------------------------------
Vodafone AirTouch PLC 3.3% Britain Telecommunications
Glaxo Wellcome PLC 2.7 Britain Health
Skandia Forsakring 2.7 Sweden Insurance
Rhone-Poulenc SA 2.7 France Chemicals
Getronics NV 2.5 Netherlands Business Services
Mannesmann AG 2.5 Germany Machinery
Nokia AB Oyj 2.4 Finland Telecommunications
British Telecom PLC 2.4 Britain Telecommunications
Securitas AB 2.4 Sweden Business Services
Preussag AG 2.3 Germany Multi-Industrial
- --------------------------------------------------------------------------------
The top 10 holdings may not be representative of the Fund's future
investments.
Total return figures represent past performance and do not indicate future
results, which will vary. The investment return and principal value of an
investment will fluctuate and, therefore, an investor's shares, when
redeemed, may be worth more or less than their original cost. Performance
reflects expense limitations in effect. In its absence, performance would
be reduced.
Assets Under Management
$82.1 Million
Number of Holdings
69
NASDAQ Symbols
Class A Shares
GSEAX
Class B Shares
GSUBX
Class C Shares
GSUCX
Institutional Shares
GSEIX
Service Shares
GEESX
1
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Performance Overview
Dear Shareholder,
We are pleased to report on the performance of the Goldman Sachs European Equity
Fund for the seven-month period ended August 31, 1999. This reporting period is
based on the Fund's new August 31st fiscal year-end.
Performance Review
Over the seven-month period covered by this report, the Fund's A, B, C,
Institutional and Service share classes generated cumulative total
returns, without sales charges, of -3.69%, -3.94%, -3.93%, -3.35% and
-3.61%, respectively. Over the same time period, the Fund's benchmark,
the FT/S&P Actuaries Europe Total Return Index, generated a cumulative
total return of 1.84%. Absolute performance was adversely affected by
weak stocks markets throughout much of Europe. The Fund's
underperformance versus its benchmark was due in part to regional
allocations and stock selection.
Portfolio Composition
During the reporting period the Fund maintained overweight country
exposures in France, Netherlands and Sweden. Underweight positions were
held in the U.K., Germany, Switzerland and Italy.
The Fund has predominantly focused on strong business franchises within
sectors offering long-term structural growth prospects within Europe.
Most notably, the Fund is overweight in the following sectors:
Electrical Equipment; Non-Cyclical Consumer Goods; Media; Telecoms and
Support and Computer Services. These overweight positions were generated
because we continue to find attractively priced quality stocks within
these sectors. In addition there is much consolidation (Telecoms) and/or
development of new technologies (Electrical Equipment, Media, Telecoms)
within these sectors.
On the other hand, throughout much of the reporting period the Fund held
underweight positions in the Resources (Mining and Oil), Basic
Industries (Construction), Cyclical Consumer Goods (Automobiles), and
Financials. These underweight positions were due to concerns regarding
the outlook in certain of these sectors, and the fact that we do not
find enough attractively priced investments meeting our criteria.
Portfolio Highlights
. Mannesmann--Mannesmann is a long-standing engineering company that has
successfully transformed itself into one of Europe's leading
telecommunications companies. Mannesmann is currently the second largest
mobile phone company in Europe, with significant exposure to the fast-
growing German market. Furthermore, the potential for linked fixed
access and mobile assets in Germany, France and Italy could lead to
significant further gains.
2
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
INVESTMENT PROCESS OVERVIEW
Goldman Sachs European Equity Fund's investment process unites Goldman Sachs
Asset Management's excellence in research, portfolio construction and risk
management in a systematic approach.
---------------------
Research Process
---------------------
Consumer
-------------
Energy, Transport, Utilities
-----------
Financials
--------------
Industrials
European List
Sector View
------------------------
Portfolio Construction
------------------------
Investment Guidelines
Risk Analysis
Optimal Portfolio
------------------------
Risk Management
------------------------
Performance Monitoring & Attribution
. Nokia -- Nokia is a dominant player in the mobile telephone market, as
it has a 28% global market share in handsets. Efficient manufacturing
enables Nokia to quickly bring new products to market. And in our
opinion, Nokia should continue to benefit from its position as a leader
in GSM (global standard for mobile communications) technology and
data/voice mobile operations.
. Skandia -- Skandia is one of the world's largest global players in the
market for long-term savings products. Skandia is the third largest
variable annuity provider in the U.S. and it expects continued strong
growth. In addition, the company acts as an arranger between independent
agents and large fund management companies, and is the largest purchaser
of asset management services in the U.S.
Portfolio Outlook
We continue to invest in quality stocks that we believe are undervalued
and possess strong growth opportunities. Such stocks are located in a
wide variety of sectors. Currently, one of the more favored sectors is
telecommunications, where both technological advances and consolidation
on both a European and global level are proceeding at a rapid pace. In
addition, certain electronic, service, pharmaceutical and leisure
companies remain attractive. While the sector rotation towards value
stocks has made the past period challenging, we continue to believe in
the structural growth of the aforementioned sectors.
We thank you for your investment and look forward to your continued
confidence.
Goldman Sachs European Equity Investment Team
London
September 3, 1999
3
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
The Goldman Sachs Advantage
Founded in 1869, Goldman, Sachs & Co. is a premier financial services firm
traditionally known on Wall Street and around the world for its institutional
expertise.
Today, the firm's Asset Management Division provides individual
investors the opportunity to tap the resources of a global institutional
powerhouse -- and put this expertise to work in their individual
portfolios.
What Sets Goldman Sachs Funds Apart?
1
---------------------------
Resources and Relationships
---------------------------
Our portfolio management teams are located on-site, around the world,
in New York, London, Tokyo and Singapore. Their understanding of local
economies, markets, industries and cultures helps deliver what many
investors want: access to global investment opportunities and
consistent, risk-adjusted performance.
2
---------------------------
In-Depth Research
---------------------------
Our portfolio management teams make on-site visits to hundreds of
companies each month, then construct selective portfolios with an
emphasis on their best ideas. Our teams also have access to Goldman,
Sachs & Co.'s Global Investment Research Department.
3
---------------------------
Risk Management
---------------------------
In this, our institutional heritage is clear. Institutions, as well as
many individual investors, often look to us to manage the risks of
global investing over time in different market environments.
To learn more about the Goldman Sachs Family of Funds, call your
investment professional today.
4
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Performance Summary
August 31, 1999
The following graph shows the value, as of August 31, 1999, of a $10,000 in-
vestment made (with the maximum sales charge of 5.5% for Class A and a maxi-
mum contingent deferred sales charges of 5.0% declining to 0% after six years
for Class B and 1% if redeemed within twelve months for Class C, respectively
and at NAV for the Institutional and Service classes) on October 1, 1998
(commencement of operations) in the Goldman Sachs European Equity Fund. For
comparative purposes, the performance of the Fund's benchmark (FT/S&P Europe
Unhedged) is shown. This performance data represents past performance and
should not be considered indicative of future performance which will fluctu-
ate with changes in market conditions. These performance fluctuations will
cause an investor's shares, when redeemed, to be worth more or less than
their original cost.
European Equity Fund's Lifetime Performance
Growth of a $10,000 Investment, Distributions Reinvested October 1, 1998 to
August 31, 1999
[LINE GRAPH APPEARS HERE]
FT/S&P Europe
Unhedged Class A Class B Class C Institutional Service
10/1/98 10,000 9,450 10,000 10,000 10,000 10,000
10/98 10,792 9,972 10,550 10,550 10,560 10,550
11/98 11,405 10,350 10,940 10,940 10,960 10,950
12/98 11,867 11,021 11,660 11,660 11,680 11,670
1/99 11,786 11,531 12,190 12,200 12,230 12,200
2/99 11,519 11,153 11,790 11,800 11,840 11,800
3/99 11,691 11,210 11,840 11,850 11,900 11,860
4/99 12,105 11,163 11,790 11,800 11,860 11,810
5/99 11,505 10,633 11,220 11,230 11,300 11,250
6/99 11,716 10,870 11,470 11,480 11,560 11,500
7/99 11,872 11,011 11,620 11,630 11,720 11,660
8/99 12,002 11,106 11,210 11,620 11,820 11,760
<TABLE>
<CAPTION>
Aggregate Total Return through August 31,
1999(a) Since Inception Seven Months
<S> <C> <C>
Class A
Excluding sales charges 17.50% -3.69%
Including sales charges 11.06% -8.99%
--------------------------------------------------------------------------
Class B
Excluding contingent deferred sales charges 17.10% -3.94%
Including contingent deferred sales charges 12.10% -8.74%
--------------------------------------------------------------------------
Class C
Excluding contingent deferred sales charges 17.20% -3.93%
Including contingent deferred sales charges 16.20% -4.90%
--------------------------------------------------------------------------
Institutional Class 18.20% -3.35%
--------------------------------------------------------------------------
Service Class 17.60% -3.61%
--------------------------------------------------------------------------
</TABLE>
(a) Commencement date of operations was October 1, 1998 for all share clas-
ses.
5
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Statement of Investments
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - 95.5%
<C> <S> <C>
Britain - 30.3%
121,196 Allied Zurich PLC (Insurance) $ 1,475,025
42,860 AstraZeneca Group PLC (Health) 1,699,697
22,305 Barclays PLC (Banks) 662,783
46,943 Bowthorpe PLC (Electrical Equipment) 451,621
87,317 BP Amoco PLC (Energy Resources) 1,619,684
129,489 British Telecom PLC (Telecommunications) 1,983,226
88,372 Carlton Communications PLC (Media) 670,346
92,363 Diageo PLC (Tobacco) 937,626
78,932 General Electric Co. PLC (Electrical Equipment) 788,582
85,150 Glaxo Wellcome PLC (Health) 2,237,379
73,445 Great Universal Stores PLC (Specialty Retail) 739,671
52,108 Halifax Group PLC (Banks) 581,790
104,497 HSBC Holdings PLC (Banks) 1,294,484
81,121 Lloyds TSB Group PLC (Banks) 1,123,017
105,521 Misys PLC (Business Services) 934,541
25,888 National Westminster Bank PLC (Banks) 531,437
126,406 Rentokil Initial PLC (Business Services) 506,372
95,407 Select Appointment Holdings PLC* (Business Services) 1,361,464
137,804 Shell Transport & Trading Co. (Energy Resources) 1,099,074
156,383 Stagecoach Holdings PLC (Railroads) 544,061
94,890 Unilever NV (Food & Beverage) 893,056
134,029 Vodafone AirTouch PLC (Telecommunications) 2,699,637
-----------
24,834,573
---------------------------------------------------------------------------
Denmark - 0.8%
11,974 ISS International Service System Series B* (Business
Services) 660,381
---------------------------------------------------------------------------
Finland - 2.4%
23,897 Nokia AB Oyj Series A (Telecommunications) 1,997,075
---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
France - 17.3%
1,943 Accor SA (Hotel) $ 468,221
22,636 Alstom* (Machinery) 763,382
10,951 Axa (Insurance) 1,364,655
2,694 Carrefour SA* (Specialty Retail) 438,876
5,915 Dexia France (Banks) 771,510
9,323 Elf Aquitaine (Energy Resources) 1,637,147
9,331 Equant* (Computer Software) 826,679
45,309 Rhone-Poulenc SA (Chemicals) 2,200,951
23,175 SEITA (Tobacco) 1,265,008
6,566 Societe Generale (Banks) 1,287,064
3,425 ST Microelectronics (Semiconductors) 227,714
10,349 Total Fina SA Class B (Energy Resources) 1,335,618
21,334 Vivendi (Business Services) 1,649,733
-----------
14,236,558
----------------------------------------------------------------------------
Germany - 7.5%
33,372 Commerzbank AG (Banks) 1,196,757
6,976 HypoVereinsbank (Financial Services) 413,993
13,303 Mannesmann AG (Machinery) 2,043,337
32,826 Preussag AG (Multi-Industrial) 1,871,676
7,880 Siemens AG (Diversified Industrial Manufacturing) 663,534
-----------
6,189,297
----------------------------------------------------------------------------
Ireland - 0.9%
82,997 Bank of Ireland* (Banks) 752,432
----------------------------------------------------------------------------
Italy - 3.0%
52,272 San Paolo-IMI SpA (Banks) 702,811
641,261 Seat Pagine Gialle SpA (Business Services) 885,257
196,071 Unicredito Italiano SpA (Banks) 906,397
-----------
2,494,465
----------------------------------------------------------------------------
Netherlands - 15.3%
8,349 Aegon NV (Financial Services) 731,289
25,778 Benckiser NV Class B (Food & Beverage) 1,576,162
26,572 Fortis Netherlands NV (Financial Services) 900,899
42,355 Getronics NV (Business Services) 2,076,722
25,394 ING Groep NV (Financial Services) 1,394,191
11,307 Koninklijke Royal Philips Electronics NV* (Appliance) 1,166,806
31,248 KPN NV (Telecommunications) 1,401,561
33,293 Libertel NV* (Telecommunications) 633,942
32,942 TNT Post Group NV (Business Services) 813,693
47,326 VNU NV (Media) 1,817,316
-----------
12,512,581
----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Spain - 4.6%
21,843 Acerinox SA (Steel) $ 719,771
37,474 Endesa SA (Electrical Utilities) 753,195
16,700 Sogecable SA* (Broadcasting) 455,432
112,677 Telefonica de Espana SA* (Telecommunications) 1,799,849
-----------
3,728,247
-----------------------------------------------------------------------
Sweden - 6.9%
45,731 Ericsson Telecommunications Series B (Electrical
Equipment) 1,477,523
134,705 Securitas AB Series B (Business Services) 1,930,668
109,417 Skandia Forsakring (Insurance) 2,232,729
-----------
5,640,920
-----------------------------------------------------------------------
Switzerland - 6.5%
510 Nestle SA (Food & Beverage) 1,008,065
927 Novartis AG (Health) 1,335,929
118 Roche Holding AG* (Health) 1,366,669
5,743 UBS AG (Banks) 1,623,013
-----------
5,333,676
-----------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $74,061,084) $78,380,205
-----------------------------------------------------------------------
Preferred Stocks - 1.6%
Germany - 1.6%
10,723 Henkel KGAA Vorzug, Non-Voting (Chemicals) $ 777,017
1,422 SAP AG (Computer Software) 571,620
-----------
1,348,637
-----------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $1,419,946) $ 1,348,637
-----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
Short-Term Obligations - 6.1%
<S> <C> <C> <C>
State Street Bank & Trust Euro-Time Deposits
$2,255,535 2.50% 09/01/1999 $ 2,360,080
2,527,933 2.45 09/02/1999 2,674,173
----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(Cost $5,034,253) $ 5,034,253
----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $80,515,283) $84,763,095
----------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements. 7
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
As a % of total
net assets
<C> <S>
Common and Preferred Stock Industry Classifications
Appliance 1.4%
Banks 13.9
Broadcasting 0.6
Business Services 13.2
Chemicals 3.6
Computer Software 1.7
Diversified Industrial Manufacturing 0.8
Electrical Equipment 3.3
Electrical Utilities 0.9
Energy Resources 6.9
Financial Services 4.2
Food & Beverage 4.2
Health 8.1
Hotel 0.6
Insurance 6.2
Machinery 3.4
Media 3.0
Multi-Industrial 2.3
Railroads 0.7
Semiconductors 0.3
Specialty Retail 1.4
Steel 0.9
Telecommunications 12.8
Tobacco 2.7
----------------------------------------------------------------------
TOTAL COMMON AND PREFERRED STOCK 97.1%
----------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Statement of Assets and Liabilities
August 31, 1999
Assets:
<TABLE>
<S> <C>
Investment in securities, at value (identified cost $80,515,283) $84,763,095
Cash, at value 576,666
Receivables:
Investment securities sold, at value 498,662
Dividends and interest, at value 176,916
Fund shares sold 50,195
Variation Margin(a) 287,388
Reimbursement from investment adviser 63,662
Other assets, at value 109,165
------------------------------------------------------------------------------
Total assets 86,525,749
------------------------------------------------------------------------------
Liabilities:
Payables:
Investment securities purchased, at value 4,188,750
Fund shares repurchased 22,229
Amounts owed to affiliates 112,743
Accrued expenses and other liabilities, at value 105,581
------------------------------------------------------------------------------
Total liabilities 4,429,303
------------------------------------------------------------------------------
Net Assets:
Paid-in capital 74,025,095
Accumulated undistributed net realized gain from investment,
futures and foreign currency related transactions 3,868,953
Net unrealized gain on investments, futures, and translation of
assets and liabilities denominated in foreign currencies 4,202,398
------------------------------------------------------------------------------
NET ASSETS $82,096,446
------------------------------------------------------------------------------
Net asset value, offering and redemption price per share:(a)
Class A $11.75
Class B $11.71
Class C $11.72
Institutional $11.82
Service $11.76
------------------------------------------------------------------------------
Shares outstanding:
Class A 6,371,125
Class B 75,037
Class C 33,088
Institutional 504,557
Service 160
------------------------------------------------------------------------------
Total shares outstanding, $0.001 par value (unlimited number of
shares authorized) 6,983,967
------------------------------------------------------------------------------
</TABLE>
(a) Includes approximately $95,000 relating to initial margin requirements
for futures transactions.
(b) Maximum public offering price per share (NAV per share multiplied by
1.0582) for Class A shares is $12.43. At redemption, Class B and Class C
shares may be subject to a contingent deferred sales charge, assessed on
the amount equal to the lesser of the current net asset value or the
original purchase price of the shares.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Statement of Operations
For the Seven-Month Period Ended August 31, 1999
<TABLE>
<S> <C>
Investment income:
Dividends(a) $ 1,142,109
Interest 34,247
-----------------------------------------------------------------------------
Total income 1,176,356
-----------------------------------------------------------------------------
Expenses:
Management fees 451,498
Distribution and service fees(b) 200,123
Custodian fees 145,205
Transfer agent fees(c) 76,945
Professional fees 42,920
Registration fees 40,319
Trustee fees 6,273
Service share fees 6
Other 39,707
-----------------------------------------------------------------------------
Total expenses 1,002,996
-----------------------------------------------------------------------------
Less -- expenses reimbursed (227,469)
-----------------------------------------------------------------------------
Net expenses 775,527
-----------------------------------------------------------------------------
NET INVESTMENT INCOME 400,829
-----------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment, futures and
foreign currency related transactions:
Net realized gain from:
Investment transactions 1,771,250
Futures transactions 18,310
Foreign currency related transactions 192,409
Net change in unrealized gain on:
Investments (4,993,757)
Futures (38,422)
Translation of assets and liabilities denominated in foreign
currencies (40,697)
-----------------------------------------------------------------------------
Net realized and unrealized loss on investment, futures and
foreign currency related transactions (3,090,907)
-----------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(2,690,078)
-----------------------------------------------------------------------------
</TABLE>
(a) Taxes withheld on dividends were $132,015.
(b) Class A, Class B and Class C had distribution and service fees of
$192,446, $4,365 and $3,312, respectively.
(c) Class A, Class B, Class C, Institutional Class and Service Class had
transfer agent fees of $73,129, $829, $629, $2,357 and $1, respectively.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the
Seven-Month For the
Period Ended Period Ended
August 31, 1999 January 31, 1999(a)
<S> <C> <C>
From operations:
Net investment income (loss) $ 400,829 $ (172,676)
Net realized gain from investment,
futures and foreign currency related
transactions 1,981,969 1,555,106
Net change in unrealized gain on
investments, futures and translation
of assets and liabilities denominated
in foreign currencies (5,072,876) 9,275,274
-----------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (2,690,078) 10,657,704
-----------------------------------------------------------------------------
From share transactions:
Proceeds from sales of shares 30,108,519 65,352,139
Cost of shares repurchased (20,233,820) (1,098,018)
-----------------------------------------------------------------------------
Net increase in net assets resulting
from share transactions 9,874,699 64,254,121
-----------------------------------------------------------------------------
TOTAL INCREASE 7,184,621 74,911,825
-----------------------------------------------------------------------------
Net assets:
Beginning of period 74,911,825 --
-----------------------------------------------------------------------------
End of period $82,096,446 $74,911,825
-----------------------------------------------------------------------------
Accumulated net investment loss $ -- $ (175,403)
-----------------------------------------------------------------------------
</TABLE>
(a) Commencement date of operations was October 1, 1998 for all share clas-
ses.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout each Period
<TABLE>
<CAPTION>
Income from
investment operations(a) Distributions to shareholders
------------------------- ------------------------------------
Net asset Net In excess Net increase
value, investment Net realized From net of net (decrease)
beginning income and unrealized investment investment From net in net asset
of period (loss) gain (loss) income income realized gains value
FOR THE SEVEN-MONTH PERIOD ENDED AUGUST 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1999 - Class A Shares $12.20 $0.05 $(0.50) $-- $-- $-- $(0.45)
1999 - Class B Shares 12.19 0.03 (0.51) -- -- -- (0.48)
1999 - Class C Shares 12.20 0.04 (0.52) -- -- -- (0.48)
1999 - Institutional
Shares 12.23 0.18 (0.59) -- -- -- (0.41)
1999 - Service Shares 12.20 0.08 (0.52) -- -- -- (0.44)
FOR THE PERIOD ENDED JANUARY 31,
1999 - Class A Shares
(commenced October 1,
1998) 10.00 (0.03) 2.23 -- -- -- 2.20
1999 - Class B Shares
(commenced October 1,
1998) 10.00 (0.02) 2.21 -- -- -- 2.19
1999 - Class C Shares
(commenced October 1,
1998) 10.00 (0.01) 2.21 -- -- -- 2.20
1999 - Institutional
Shares (commenced Octo-
ber 1, 1998) 10.00 (0.01) 2.24 -- -- -- 2.23
1999 - Service Shares
(commenced October 1,
1998) 10.00 (0.03) 2.23 -- -- -- 2.20
</TABLE>
------------------------------------------------------------------------------
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales or redemption charges. Total return would be reduced if a sales or
redemption charge were taken into account.
(c) Annualized.
(d) Not annualized.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver
of fees or expense limitations
-----------------------------------
Ratio of Ratio of
Net assets Ratio of net investment Ratio of net investment
Net asset at end of net expenses income (loss) to expenses to income (loss) to Portfolio
value, end Total period to average average net average net average net turnover
of period return(b) (in 000s) net assets assets assets assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$11.75 (3.69)%(d) $74,862 1.79%(c) 0.80%(c) 2.29%(c) 0.30%(c) 54.98%(d)
11.71 (3.94)(d) 879 2.29(c) 0.43(c) 2.79(c) (0.07)(c) 54.98(d)
11.72 (3.93)(d) 388 2.29(c) 0.42(c) 2.79(c) (0.08)(c) 54.98(d)
11.82 (3.35)(d) 5,965 1.14(c) 1.53(c) 1.64(c) 1.03(c) 54.98(d)
11.76 (3.61)(d) 2 1.64(c) 1.10(c) 2.14(c) 0.60(c) 54.98(d)
12.20 22.00(d) 61,151 1.79(c) (1.19)(c) 2.80(c) (2.20)(c) 70.77(d)
12.19 21.90(d) 432 2.29(c) (1.78)(c) 3.30(c) (2.79)(c) 70.77(d)
12.20 22.00(d) 587 2.29(c) (1.83)(c) 3.30(c) (2.84)(c) 70.77(d)
12.23 22.30(d) 12,740 1.14(c) (0.33)(c) 2.15(c) (1.34)(c) 70.77(d)
12.20 22.00(d) 2 1.64(c) (0.69)(c) 2.65(c) (1.70)(c) 70.77(d)
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Notes to Financial Statements
August 31, 1999
1. ORGANIZATION
Goldman Sachs Trust (the "Trust") is a Delaware business trust registered un-
der the Investment Company Act of 1940 (as amended) as an open-end, manage-
ment investment company. The Trust includes the Goldman Sachs European Equity
Fund (the "Fund"). The Fund is a diversified portfolio offering five classes
of shares -- Class A, Class B, Class C, Institutional and Service.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies consist-
ently followed by the Fund. The preparation of financial statements in con-
formity with generally accepted accounting principles requires management to
make estimates and assumptions that may affect the reported amounts. Actual
results could differ from those estimates. Effective for fiscal year 1999,
the Board of Trustees approved a change in the fiscal year end of the Fund
from January 31 to August 31. Accordingly, the financial statements of the
Fund are presented for a seven-month period ended August 31, 1999.
A. Investment Valuation -- Investments in securities traded on a U.S. or for-
eign securities exchange or the NASDAQ system are valued daily at their last
sale or closing price on the principal exchange on which they are traded.
If no sale occurs, securities are valued at the last bid price. Debt securi-
ties are valued at prices supplied by independent pricing services, broker /
dealer-supplied valuations or matrix pricing systems. Unlisted equity and
debt securities for which market quotations are available are valued at the
last sale price on valuation date or, if no sale occurs, at the last bid
price. Short-term debt obligations maturing in sixty days or less are valued
at amortized cost. Securities for which quotations are not readily available
are valued at fair value using methods approved by the Board of Trustees of
the Trust.
B. Security Transactions and Investment Income -- Security transactions are
recorded as of the trade date. Realized gains and losses on sales of portfo-
lio securities are calculated using the identified-cost basis. Dividend in-
come is recorded on the ex-dividend date. Dividends for which the Fund has
the choice to receive either cash or stock are recognized as investment in-
come in an amount equal to the cash dividend. Interest income is recorded on
the basis of interest accrued, premium amortized and discount earned.
C. Foreign Currency Translations -- The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in foreign currencies are
translated into U.S. dollars on the following basis: (i) investment valua-
tions, foreign currency and other assets and liabilities initially expressed
in foreign currencies are converted each business day into U.S. dollars based
on current exchange rates; (ii) purchases and sales of foreign investments,
income and expenses are converted into U.S. dollars based on currency ex-
change rates prevailing on the respective dates of such transactions.
Net realized and unrealized gain (loss) on foreign currency transactions
will represent: (i) foreign exchange gains and losses from the sale and hold-
ings of foreign currencies; (ii) currency gains and losses between trade date
and settlement date on investment securities transactions and forward ex-
change contracts; and (iii) gains and losses from the difference between
amounts of dividends, interest and foreign withholding taxes recorded and the
amounts actually received.
14
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
D. Forward Foreign Currency Exchange Contracts -- The Fund may enter into
forward foreign currency exchange contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date as a hedge or
cross-hedge against either specific transactions or portfolio positions. The
Fund may also purchase and sell such contracts to seek to increase total re-
turn. All commitments are "marked-to-market" daily at the applicable transla-
tion rates and any resulting unrealized gains or losses are recorded in the
Fund's financial statements. The Fund realizes gains or losses at the time a
forward contract is offset by entry into a closing transaction or extin-
guished by the delivery of the currency. Risks may arise upon entering these
contracts from the potential inability of counterparties to meet the terms of
their contracts and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
E. Short Securities Positions -- The Fund may enter into covered short sales.
Short securities positions are accounted for at cost and subsequently marked-
to-market to reflect the current market value of the position. The market
value of the short position is recorded as a liability on the Fund's records
and any difference between this market value and the sales proceeds is re-
ported as an unrealized gain or loss. Gains and losses are realized when a
short position is closed out by delivering securities back to the broker.
F. Option Accounting Principles -- When the Fund writes call or put options,
an amount equal to the premium received is recorded as an asset and as an
equivalent liability. The amount of the liability is subsequently marked-to-
market to reflect the current market value of the option written. When a
written option expires on its stipulated expiration date or the Fund enters
into a closing purchase transaction, the Fund realizes a gain or loss without
regard to any unrealized gain or loss on the underlying security, and the li-
ability related to such option is extinguished. When a written call option is
exercised, the Fund realizes a gain or loss from the sale of the underlying
security, and the proceeds of the sale are increased by the premium origi-
nally received. When a written put option is exercised, the amount of the
premium originally received will reduce the cost of the security which the
Fund purchases upon exercise. There is a risk of loss from a change in value
of such options which may exceed the related premiums received.
Upon the purchase of a call option or a protective put option by the Fund,
the premium paid is recorded as an investment and subsequently marked-to-mar-
ket to reflect the current market value of the option. If an option which the
Fund has purchased expires on the stipulated expiration date, the Fund will
realize a loss in the amount of the cost of the option. If the Fund enters
into a closing sale transaction, the Fund will realize a gain or loss, de-
pending on whether the sale proceeds for the closing sale transaction are
greater or less than the cost of the option. If the Fund exercises a pur-
chased put option, the Fund will realize a gain or loss from the sale of the
underlying security, and the proceeds from such sale will be decreased by the
premium originally paid. If the Fund exercises a purchased call option, the
cost of the security which the Fund purchases upon exercise will be increased
by the premium originally paid.
15
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Notes to Financial Statements (continued)
August 31, 1999
G. Segregation Transactions -- The Fund may enter into certain derivative
transactions to seek to increase total return. Forward foreign currency ex-
change contracts, futures contracts, written options, when-issued securities
and forward commitments represent examples of such transactions. As a result
of entering into these transactions, the Fund is required to segregate liquid
assets on the accounting records equal to or greater than the market value of
the corresponding transactions.
H. Expenses -- Expenses incurred by the Trust which do not specifically re-
late to an individual fund of the Trust are generally allocated to the funds
based on a straight-line or pro rata basis depending upon the nature of the
expense.
Class A, Class B and Class C shares bear all expenses and fees relating to
their respective Distribution and Service plans. Shareholders of Service
shares bear all expenses and fees paid to service organizations. Each class
of shares of the Fund separately bears its respective class-specific transfer
agency fees.
I. Federal Taxes -- It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute each year substantially all of its investment company taxable
income and capital gains to its shareholders. Accordingly, no federal tax
provision is required.
The characterization of distributions to shareholders for financial report-
ing purposes is determined in accordance with income tax rules. Therefore,
the source of the Fund's distributions may be shown in the accompanying fi-
nancial statements as either from or in excess of net investment income or
net realized gain on investment transactions, or from paid-in capital, de-
pending on the type of book / tax differences that may exist.
At August 31, 1999 the aggregate cost of portfolio securities for federal
income tax purposes is $80,573,070. Accordingly, the gross unrealized gain on
investments was $7,311,967 and the gross unrealized loss on investments was
$3,121,942 resulting in a net unrealized gain of $4,190,025.
16
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
3. AGREEMENTS
Pursuant to the Investment Management Agreement ("the Agreement"), Goldman
Sachs Asset Management International ("GSAMI"), an affiliate of Goldman Sachs
Asset Management ("GSAM"), a separate operating division of Goldman, Sachs &
Co. ("Goldman Sachs"), serves as the investment adviser to the Fund. Under
the Agreement, GSAMI, subject to the general supervision of the Trust's Board
of Trustees, manages the Fund's portfolio. As compensation for the services
rendered under the Agreement, the assumption of the expenses related thereto
and administering the Fund's business affairs, including providing facili-
ties, GSAMI is entitled to a fee, computed daily and payable monthly, at an
annual rate equal to 1.00% of the average daily net assets of the Fund.
The adviser has voluntarily agreed to limit certain "Other Expenses" (ex-
cluding management fees, distribution and service fees, transfer agent fees,
taxes, interest, brokerage, litigation, Service share fees, indemnification
costs and other extraordinary expenses) to the extent such expenses exceed,
on an annual basis, .10% of the average daily net assets of the Fund. Goldman
Sachs has agreed to reimburse approximately $227,000 for the period ended Au-
gust 31, 1999.
Goldman Sachs serves as the distributor of shares of the Fund pursuant to a
Distribution Agreement. Goldman Sachs may receive a portion of the Class A
sales load and Class B and Class C contingent deferred sales charges and has
advised the Fund that it retained approximately $218,000 for the period ended
August 31, 1999.
The Trust on behalf of the Fund, has adopted Distribution and Service
Plans. Under the Distribution and Service Plans, Goldman Sachs and/or autho-
rized dealers are entitled to a monthly fee from the Fund for distribution
and shareholder maintenance services equal, on an annual basis, up to .50%,
1.00%, and 1.00% of the Fund's average daily net assets attributable to Class
A, Class B and Class C shares, respectively.
Goldman Sachs also serves as the transfer agent of the Fund for a fee. Fees
charged for such transfer agency services are calculated daily and payable
monthly at an annual rate as follows: 0.19% of average daily net assets for
Class A, Class B and Class C shares and 0.04% of average daily net assets for
Institutional and Service shares.
The Trust, on behalf of the Fund, has adopted a Service Plan. This Plan al-
lows for Service shares to compensate service organizations for providing va-
rying levels of account administration and shareholder liaison services to
their customers who are beneficial owners of such shares. The Service Plan
provides for compensation to the service organizations in an amount up to
.50% (on an annualized basis), of the average daily net asset value of the
Service shares.
As of August 31, 1999, the amounts owed to affiliates were approximately
$69,000, $32,000 and $12,000 for management, distribution and service and
transfer agent fees, respectively.
17
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Notes to Financial Statements (continued)
August 31, 1999
4. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and proceeds of sales or maturities of securities (excluding short-
term investments and futures) for the period ended August 31, 1999, were
$56,125,932 and $41,061,882, respectively.
The Fund may enter into futures transactions to hedge against changes in
interest rates, securities prices, currency exchange rates or to seek to in-
crease total return. Upon entering into a futures contract, the Fund is re-
quired to deposit with a broker or the Fund's custodian bank, an amount of
cash or securities equal to the minimum "initial margin" requirement of the
associated futures exchange. Subsequent payments for futures contracts
("variation margin") are paid or received by the Fund, depending on the fluc-
tuations in the value of the contracts, and are recorded for financial re-
porting purposes as unrealized gains or losses. When contracts are closed,
the Fund realizes a gain or loss which is reported in the Statement of Opera-
tions.
The use of futures contracts involve, to varying degrees, elements of mar-
ket risk which may exceed the amounts recognized in the Statement of Assets
and Liabilities. Changes in the value of the futures contracts may not di-
rectly correlate with changes in the value of the underlying securities. This
risk may decrease the effectiveness of the Fund's hedging strategies and po-
tentially result in a loss.
At August 31, 1999, open futures contracts were as follows:
<TABLE>
<CAPTION>
Number of
Contracts Settlement Market Unrealized
Type Long Month Value Loss
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FTSE 100 Index 3 September 1999 $300,902 $ (1,407)
MIB 30 Index 2 September 1999 356,876 (6,443)
EURX DAX Index 6 September 1999 839,166 (30,572)
----------------------------------------------------------------------------------
$(38,422)
----------------------------------------------------------------------------------
</TABLE>
5. LINE OF CREDIT FACILITY
The Fund participated in a $250,000,000 uncommitted and a $50,000,000 commit-
ted, unsecured revolving line of credit facility which was terminated on
April 30, 1999. Effective April 30, 1999, the Fund now participates in a
$250,000,000 uncommitted and a $250,000,000 committed, unsecured revolving
line of credit facility. Under the most restrictive arrangement, the Fund
must own securities having a market value in excess of 400% of the total bank
borrowings. This facility is to be used solely for temporary or emergency
purposes. The interest rate on borrowings is based on the Federal Funds rate.
The committed facility also requires a fee to be paid by the Fund based on
the amount of the commitment which has not been utilized. During the period
ended August 31, 1999, the Fund did not have any borrowings under any of
these facilities.
18
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
6. CERTAIN RECLASSIFICATIONS
In accordance with Statement of Position 93-2, the Fund reclassified $250,368
from accumulated undistributed net investment income to accumulated undis-
tributed net realized gain from investments, futures and foreign currency re-
lated transactions and $24,942 from paid-in-capital to accumulated
undistributed net investment income. These reclassifications have no impact
on the net asset value of the Fund and are designed to present the Fund's
capital accounts on a tax basis.
7. SUMMARY OF SHARE TRANSACTIONS
Share activity is as follows:
<TABLE>
<CAPTION>
For the Seven-Month Period Ended For the Period Ended
August 31, 1999 January 31, 1999(a)
---------------------------------- ----------------------------
Shares Dollars Shares Dollars
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold 2,119,807 $24,745,494 5,087,352 $53,619,415
Shares repurchased (759,657) (8,753,714) (76,377) (844,311)
-------------------------------------------------------------------
1,360,150 15,991,780 5,010,975 52,775,104
-----------------------------------------------------------------------------------------
Class B Shares
Shares sold 53,116 627,367 35,445 410,945
Shares repurchased (13,524) (156,078) -- --
-------------------------------------------------------------------
39,592 471,289 35,445 410,945
-----------------------------------------------------------------------------------------
Class C Shares
Shares sold 148,372 1,718,395 48,110 570,630
Shares repurchased (163,394) (1,909,241) -- --
-------------------------------------------------------------------
(15,022) (190,846) 48,110 570,630
-----------------------------------------------------------------------------------------
Institutional Shares
Shares sold 254,200 3,017,263 1,062,367 10,749,551
Shares repurchased (791,417) (9,414,787) (20,593) (253,707)
-------------------------------------------------------------------
(537,217) (6,397,524) 1,041,774 10,495,844
-----------------------------------------------------------------------------------------
Service Shares
Shares sold -- -- 160 1,598
-------------------------------------------------------------------
-- -- 160 1,598
-----------------------------------------------------------------------------------------
NET INCREASE 847,503 $ 9,874,699 6,136,464 $64,254,121
-----------------------------------------------------------------------------------------
</TABLE>
(a)Commencement date of operations was October 1, 1998 for all share classes.
19
<PAGE>
GOLDMAN SACHS EUROPEAN EQUITY FUND
Report of Independent Public Accountants
To the Shareholders and Board of Trustees of Goldman Sachs Trust -- European
Equity Fund:
We have audited the accompanying statement of assets and liabilities of
Goldman Sachs European Equity Fund, one of the portfolios constituting
Goldman Sachs Trust -- Equity Funds (a Delaware Business Trust), including
the statement of investments, as of August 31, 1999, and the related state-
ment of operations, the statements of changes in net assets and the financial
highlights for the periods presented. These financial statements and the fi-
nancial highlights are the responsibility of the Fund's management. Our re-
sponsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the finan-
cial statements. Our procedures included confirmation of securities owned as
of August 31, 1999 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant esti-
mates made by management, as well as evaluating the overall financial state-
ment presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and the financial highlights re-
ferred to above present fairly, in all material respects, the financial posi-
tion of Goldman Sachs European Equity Fund as of August 31, 1999, the results
of its operations, the changes in its net assets and the financial highlights
for the periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 8, 1999
20
<PAGE>
GOLDMAN SACHS FUND PROFILE
Goldman Sachs
European Equity Fund
An Investment Idea for the Long Term
History has shown that a long-term plan that includes international
stocks can help provide greater protection against market volatility
over time than a portfolio that invests only in U.S. stocks.
Goldman Sachs European Equity Fund offers investors access to the
benefits associated with international market diversification. The Fund
seeks long-term capital growth through investments in equity securities
of European countries.
Target Your Needs
The Goldman Sachs European Equity Fund has a distinct investment
objective and a defined place on the risk/return spectrum. As your
investment objectives change, you can exchange shares within Goldman
Sachs Funds without any additional charge.* (Please note: in general,
greater returns are associated with greater risk.)
Goldman Sachs Funds
Goldman Sachs Funds offers more than 30 investment options for global
diversification across borders, investment styles, asset classes and
security capitalizations.
[GRAPHIC APPEARS HERE]
For More Information
To learn more about the Goldman Sachs European Equity Fund and other
Goldman Sachs Funds, call your investment professional today.
*The exchange privilege is subject to termination and its terms are
subject to change.
<PAGE>
GOLDMAN SACHS ASSET MANAGEMENT 32 OLD SLIP, 17TH FLOOR, NEW YORK, NEW YORK 10005
TRUSTEES
Ashok N. Bakhru, Chairman
David B. Ford
Douglas C. Grip
John P. McNulty
Mary P. McPherson
Alan A. Shuch
Jackson W. Smart, Jr.
William H. Springer
Richard P. Strubel
OFFICERS
Douglas C. Grip, President
Jesse H. Cole, Vice President
James A. Fitzpatrick, Vice President
Nancy L. Mucker, Vice President
John M. Perlowski, Treasurer
Adrien E. Deberghes, Jr., Assistant Treasurer
Philip V. Giuca, Jr., Assistant Treasurer
Michael J. Richman, Secretary
Howard B. Surloff, Assistant Secretary
Valerie A. Zondorak, Assistant Secretary
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
Investment Adviser
GOLDMAN SACHS INTERNATIONAL
Peterborough Court, 133 Fleet Street
London EC4A 2BB, England
Visit our internet address: www.gs.com/funds
This material is not authorized for distribution to prospective investors unless
preceded or accompanied by a current Prospectus. Investors should read the
Prospectus carefully before investing or sending money.
Emerging markets securities are volatile. They are subject to substantial
currency fluctuations and sudden economic and political developments. At times,
the Fund may be unable to sell certain of its portfolio securities without a
substantial drop in price, if at all.
Concentration of the Fund's assets in one or a few countries (or a particular
geographic area) and currencies will subject a fund to greater risks than if a
fund's assets were not geographically concentrated.
The stocks of smaller companies are often associated with higher risks,
including greater volatility, than stocks of larger companies.
An investment in a money market fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any government agency. Although a money market
fund seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.
Copyright 1999 Goldman, Sachs & Co. All rights reserved. Date of first use:
October 15, 1999
EUROPEAR / 3.5K / 10-99
