<PAGE>
Goldman Sachs Funds
- --------------------------------------------------------------------------------
ASIA GROWTH FUND Annual Report August 31, 1999
- --------------------------------------------------------------------------------
Long-term capital growth potential
[GRAPHIC APPEARS HERE] through a diversified portfolio of stocks
related to Asia,excluding Japan.
[LOGO OF GOLDMAN
SACHS APPEARS HERE]
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Market Overview
Dear Shareholder,
During the period under review, increasing evidence that Asia's economies
were recovering far more quickly than anticipated led to a dramatic market
rebound.
. Asian Equities Surge -- In our last report to shareholders, we
pointed out that, while Asia continued to present significant risks,
some key trends were emerging that would clear the way for a
corporate and economic recovery in selected countries over the years
to come. These included governments selling off nationalized
financial assets, banking reforms and monetary policies that
increased competitiveness of domestic business, and interest rates
being allowed to fall.
As we write to you today, much of this has come to pass. The
prevailing theme throughout much of the region is one of stronger
economic fundamentals -- evidenced by increasing consumption,
significant progress on financial restructuring, and progressive
measures to stimulate economic growth.
This abrupt turnaround has not been lost on the investment
community. As Asian markets advanced throughout much of the reporting
period, investors who were previously underweight in the region moved
to increase their exposure. This helped to fuel the rally, as it
created a more attractive investment environment.
. Market Outlook: A Watchful Eye On Continued Progress -- We see
encouraging signs emerging from the region that point to a
continuation of an economic recovery in Asia. In many areas, GDP
figures regularly exceed even the most optimistic projections. And
much needed economic reforms continue to be enacted.
At the same time, there are potential risks to consider. Some
experts feel the recovery, both on an economic and financial market
front, has come too far, too fast. But the greatest risk could be the
economic and interest rate environment in the United States. A
sustained recovery in Asia is closely tied to the continued strength
of the United States market. Should interest rates in the U.S. rise,
it could hinder a more lasting recovery in Asia.
. 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 /s/ John P. McNulty
David B. Ford John P. McNulty
Co-Head, Co-Head,
Goldman Sachs Asset Goldman Sachs Asset
Management International Management International
September 3, 1999
--------------
. NOT FDIC
INSURED
. May Lose Value
. No Bank
Guarantee
---------------
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Fund Basics
as of August 31, 1999
Assets Under Management
$106.1 Million
Number of Holdings
134
NASDAQ SYMBOLS
Class A Shares
GSAGX
Class B Shares
GSABX
Class C Shares
GSACX
Institutional Shares
GSAIX
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
Fund Total Return MSCI AC Asia Free
January 31,1999-August 31,1999 (without sales charge)/1/ (Ex Japan) Index/2/
- --------------------------------------------------------------------------------
Class A 42.11% 45.49%
Class B 41.67 45.49
Class C 41.28 45.49
Institutional 42.61 45.49
- --------------------------------------------------------------------------------
/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 unmanaged Morgan Stanley Capital International (MSCI) All Country (AC)
Asia Free (ex Japan) Index is a market capitalization-weighted composite of
securities in 10 Asian countries, including Hong Kong, India, Indonesia,
Malaysia, Pakistan, Singapore, South Korea, Sri Lanka, Thailand and the
Philippines. Total returns are calculated without dividends reinvested.
"Free" indicates an index that excludes shares in otherwise free markets that
are not purchasable by foreigners. The Index figures do not reflect any fees
or expenses. 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
- --------------------------------------------------------------------------------
Last 6 Months 29.14% 31.42% 35.22% 37.23%
One Year 47.73 50.49 54.29 57.32
Since Inception -5.32 -14.30 -17.77 -10.50
(7/8/94) (5/1/96) (8/15/97) (2/2/96)
- --------------------------------------------------------------------------------
/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 COMPANY HOLDINGS AS OF 8/31/99
- --------------------------------------------------------------------------------
% of Total
Company Holding Net Assets Country Line of Business
- --------------------------------------------------------------------------------
Hutchison Whampoa 5.6% Hong Kong Financial Services
Samsung Electronics 5.1 South Korea Consumer Durables
Hindustan Lever Ltd. 4.1 India Tobacco
Korea Electric Power Corp. 3.0 South Korea Electrical Utilities
Infosys Technologies Ltd. 2.7 India Computer Software
Hong Kong Telecom 2.2 Hong Kong Telecommunications
Taiwan Semiconductor 2.2 Taiwan Electrical Equipment
Hang Seng Bank Ltd. 1.8 Hong Kong Banks
Cheung Kong Holdings Ltd. 1.6 Hong Kong Real Estate
Cathay Pacific Airways 1.4 Hong Kong Airlines
- --------------------------------------------------------------------------------
The top 10 company holdings may not be representative of the Funds 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 investors shares, when redeemed,
may be worth more or less than their original cost. Performance reflects expense
limitations in effect. In their absence, performance would be reduced.
1
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Performance Overview
Dear Shareholder:
We are pleased to report on the performance of the Goldman Sachs Asia Growth
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 and
Institutional share classes generated cumulative total returns, without
sales charges, of 42.11%, 41.67%, 41.28% and 42.61%, respectively. Over the
same time period, the Fund's benchmark, the MSCI AC Asia Free (Ex Japan)
Index, generated a cumulative total return of 45.49%. While the Fund's
absolute return numbers were impressive, its performance lagged on a
relative basis, due in part to regional allocations and stock selection.
Portfolio Composition
Early in the reporting period, we held an underweight position in Hong
Kong. We believed that its determination to defend the peg would make the
recovery process more difficult by depressing asset prices and wages.
However, we gradually increased our exposure to Hong Kong, as positive
economic signs began to emerge. These included an increase in property
transactions and a more accommodative banking industry. Elsewhere, we
maintained overweight positions in Singapore, India and Indonesia for much
of the period.
Portfolio
. Infosys Technologies Ltd.-- Infosys, the leading information technology
("IT") service provider in India, continues to be a strong performer for
the Fund. The company pioneered an offshore software development model that
even its U.S. counterparts are now trying to emulate. With a proven track
record of successful execution of projects, Infosys has gathered an
impressive list of clients that includes VISA and Nordstrom. Going forward,
we believe Infosys will continue to enjoy the advantages of low costs and
access to a highly qualified talent pool by expanding its operations in
India. Simultaneously, it should improve its revenue by establishing a
stronger presence in the U.S. and by getting involved in software
development at the IT strategy stage.
. Singapore Press Holdings Ltd.(SPH) -- Singapore Press operates a newspaper
monopoly in Singapore, and in recent years has also diversified into
businesses as diverse as mobile telephony, cable television (including
broadband cable access), and property. The firm can be viewed as the
dominant media presence in the most "wired" country in Asia, with a stake
in virtually every growth area in information technology. Its core
publishing business should also be a beneficiary of a strengthening
Singaporean economy, as rising advertising revenues flow through to
earnings.
2
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
INVESTMENT
PROCESS OVERVIEW
The investment process for the Goldman Sachs Asia Growth Fund combines both
qualitative and quantitative analysis, with an emphasis on portfolio manager
input.
Company Visits
-----------------
Internal Research
-------------------
Return Expectations
---------------
Stock Selection
---------------
---------------
Portfolio
Construction
--------------
. Stock & Industry
Views Relative
to Benchmark
--------------
Portfolio Review
& Analysis
--------------
. Performance
Measurement
& Attribution
. BARRA
. Risk Analysis
New Acquisitions
. Far Eastern Textile Ltd.-- Far Eastern Textile (FET) is the Far Eastern
Group's flagship and also one of Taiwan's few fully integrated textile
manufacturers. While its core business is cyclical in nature and low in
growth potential, Far Eastern Textile's holdings in cellular and real
estate should create earnings growth and value for the next several years.
Taiwan is experiencing explosive growth in its overall cellular market, as
mobile penetration has increased from 20% to 30% within the past 12 months.
Far East Tone, a 58%-owned subsidiary of Far Eastern Textile, is one of
three island-wide cellular operators and is expected to contribute about
50% of FET's net profit.
. Li & Fung Ltd.-- Li & Fung is a Hong Kong trading company that provides
value-added services such as outsourcing, trade finance, product design,
and logistics to its clients in the U.S. and Europe via its global sourcing
network. Li & Fung sources soft goods such as garments and hard goods, such
as sporting goods and gift items, for specialty stores such as Toys R Us
and Restoration Hardware, and major labels such as Reebok. Its success lies
in its ability to provide a full range of outsourcing services, high order
turnover, and above-average commissions on orders, giving the company an
extremely high return on equity. The company seeks to increase its pricing
power further through additional integration of services, such as raw
materials procurement and trade financing. Meanwhile, top line growth
should continue to grow as a function of increased outsourcing among U.S.
and European retailers.
Portfolio Outlook
Our outlook on Asia as a region has improved, although it is important to
note that intra-regional discrepancies still exist. Industrial production
and economic growth has increased in many countries leading a rapid rise in
equity prices. On a cautious note, we recognize that a recovery in Asia is
very dependent on the continued strength of the U.S. market. Consequently,
we will be closely monitoring all economic data coming out of the U.S. in
an effort to determine its impact on the Asian markets.
We thank you for your investment and we look forward to your continued
confidence in the future.
Goldman Sachs Asia Equity Investment Team
Singapore
September 3, 1999
3
<PAGE>
GOLDMAN SACHS ASIA GROWTH 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 porfolio 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 ASIA GROWTH 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%) in Class A shares on
July 8, 1994 (commencement of operations) of the Goldman Sachs Asia Growth
Fund. For comparative purposes, the performance of the Fund's benchmark (the
Morgan Stanley All Country Asia Free ex Japan Index ("MSCI Index") is shown.
This performance data represents past performance and should not be consid-
ered indicative of future performance which will fluctuate with changes in
market conditions. These performance fluctuations will cause an investor's
shares, when redeemed, to be worth more or less than their original cost.
Performance of Class B, Class C and Institutional shares will vary from Class
A due to differences in fees and loads.
Asia Growth Fund's Lifetime Performance
Performance of a $10,000 Investment, Distributions Reinvested July 8, 1994 to
August 31, 1999
[LINE GRAPH APPEARS HERE]
MSCI Class A
7/8/94 10,000 9,450
Jul-94 10,700 9,847
Aug-94 11,539 10,473
Sep-94 11,298 10,520
Oct-94 11,456 10,567
Nov-94 10,431 9,933
Dec-94 10,126 9,705
Jan-95 9,075 8,934
Feb-95 9,822 9,504
Mar-95 9,790 9,471
Apr-95 9,636 9,316
May-95 10,705 10,450
Jun-95 10,522 10,289
Jul-95 10,702 10,504
Aug-95 10,191 10,048
Sep-95 10,297 10,269
Oct-95 10,108 10,034
Nov-95 9,865 9,779
Dec-95 10,340 10,341
Jan-96 11,131 11,300
Feb-96 11,236 11,341
Mar-96 11,299 11,218
Apr-96 11,687 11,862
May-96 11,537 11,842
Jun-96 11,343 11,465
Jul-96 10,484 10,656
Aug-96 10,782 10,773
Sep-96 10,953 10,793
Oct-96 10,734 10,485
Nov-96 11,229 10,999
Dec-96 11,178 11,165
Jan-97 11,395 11,186
Feb-97 11,482 11,097
Mar-97 10,954 10,651
Apr-97 10,630 10,431
May-97 11,087 11,152
Jun-97 11,471 11,261
Jul-97 11,543 11,330
Aug-97 9,480 9,135
Sep-97 9,424 9,055
Oct-97 7,314 6,786
Nov-97 6,802 6,655
Dec-97 6,534 6,580
Jan-98 5,957 5,761
Feb-98 7,210 6,772
Mar-98 7,088 6,655
Apr-98 6,454 6,208
May-98 5,450 5,370
Jun-98 4,820 4,874
Jul-98 4,685 4,806
Aug-98 3,998 4,153
Sep-98 4,386 4,586
Oct-98 5,331 5,356
Nov-98 5,753 5,603
Dec-98 5,864 5,576
Jan-99 5,763 5,356
Feb-99 5,642 5,253
Mar-99 6,299 5,816
Apr-99 7,442 6,669
May-99 7,271 6,476
Jun-99 8,392 7,618
Jul-99 8,193 7,446
Aug-99 8,384 7,611
<TABLE>
<CAPTION>
Average Annual Total Return through August 31, 1999
Since Inception Five Years One Year Seven Months
<S> <C> <C> <C> <C>
Class A (commenced July 8,
1994)
Excluding sales charges - 4.12% -6.18% 83.28% 42.11%
Including sales charges - 5.16% -7.23% 73.24% 34.34%
-----------------------------------------------------------------------------
Class B (commenced May 1,
1996)
Excluding contingent
deferred charges -12.88% n/a 82.24% 41.67%
Including contingent
deferred charges -13.67% n/a 77.25% 36.67%
-----------------------------------------------------------------------------
Class C (commenced August
15, 1997)
Excluding contingent
deferred charges -16.50% n/a 82.35% 41.28%
Including contingent
deferred charges -16.50% n/a 81.35% 40.28%
-----------------------------------------------------------------------------
Institutional Class (com-
menced February 2, 1996) -10.03% n/a 84.62% 42.61%
-----------------------------------------------------------------------------
</TABLE>
5
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Investments
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - 83.1%
<C> <S> <C>
China - 2.6%
1,402,000 Angang New Steel Co. Ltd. Class H (Steel) $ 198,613
356,000 China Telecom Ltd.* (Telecommunications) 1,104,921
330,000 Great Wall Technology Co. Class H (Electrical
Equipment) 214,619
444,000 Guangdong Kelon Electrical Holdings Co. Ltd. Class H
(Appliance) 454,584
1,238,000 Shandong International Power Development Co. Ltd.
Class H* (Electrical Utilities) 247,125
1,262,000 Yanzhou Coal Mining Co. Ltd. Class H (Mining) 552,589
------------
2,772,451
-------------------------------------------------------------------------------
Hong Kong - 25.8%
391,000 Axa China Region Ltd. (Insurance) 274,434
869,000 Cathay Pacific Airways (Airlines) 1,477,263
198,000 Cheung Kong Holdings Ltd. (Real Estate) 1,727,582
159,000 CLP Holdings Ltd. (Utilities) 751,497
1,178,000 Cosco Pacific Ltd. (Industrial Services) 1,031,617
262,400 Dah Sing Financial Holdings (Banks) 1,044,206
283,000 Dao Heng Bank Group Ltd. (Financial Services) 1,290,190
345,500 Dickson Concepts International Ltd. (Specialty
Retail) 320,365
486,000 First Pacific Co. (Financial Services) 375,536
744,000 Giordano International Ltd. (Specialty Retail) 689,874
168,000 Hang Seng Bank Ltd. (Banks) 1,898,543
1,060,000 Hengan International Group Co. Ltd.* (Health) 392,471
405,184 HKR International Ltd. (Real Estate) 313,089
729,000 Hong Kong & China Gas Co. Ltd. (Utilities) 1,037,418
1,051,400 Hong Kong Telecom (Telecommunications) 2,383,114
605,000 Hutchison Whampoa (Financial Services) 5,902,040
234,500 Johnson Electric Holdings Ltd. (Electrical Equipment) 1,057,000
370,000 Li & Fung Ltd. (Wholesale) 1,186,493
10,000 New World China Land Ltd.* (Real Estate) 8,049
425,000 New World Development Co. Ltd. (Real Estate) 1,023,516
862,000 South China Morning Post Holdings Ltd. (Publishing) 543,961
137,000 Sun Hung Kai Properties Co. Ltd. (Real Estate) 1,164,471
109,000 Television Broadcasts Ltd. (Media) 488,506
356,000 Wharf Holdings Co. Ltd. (Real Estate) 967,379
------------
27,348,614
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
India - 11.2%
440 Colgate Palmolive Ltd. (Home Products) $ 2,839
2,144 Glaxo India Ltd. (Drugs) 34,767
34,300 Hindalco Industries Ltd. (Nonferrous Metals) 724,264
71,465 Hindustan Lever Ltd. (Home Products) 4,380,776
1,885 Hindustan Lever Ltd. (Tobacco) 115,550
43,000 Housing Development Finance Corp. Ltd.*
(Construction) 255,577
22,200 Infosys Technologies Ltd. (Computer Software) 2,859,575
68,796 ITC Ltd. (Multi-Industrial) 1,625,943
510 Larsen & Toubro Ltd. (Multi-Industrial) 4,593
87,400 Mahanagar Telephone Nigam Ltd. (Telephone) 406,091
14,400 Niit Ltd. (Business Services) 702,197
23,100 Punjab Tractors Ltd. (Agriculture) 732,266
------------
11,844,438
----------------------------------------------------------------------------
Indonesia - 2.3%
1,108,500 Pab K Tjiwi Kimia (Paper) 317,953
1,612,500 PT Bank Pan Indonesia Tbk - Alien Market (Banks) 294,329
133,600 PT Gudang Garam Tbk (Tobacco) 322,242
790,000 PT Indofood Sukses* (Food & Beverage) 844,589
2,516,000 PT Matahari Putra Prima Tbk* (Merchandising) 254,224
640,520 PT Telekomunikasi Indonesia Series B
(Telecommunications) 246,354
413,000 PT Tempo Scan Pacific Tbk (Health) 218,077
------------
2,497,768
----------------------------------------------------------------------------
Malaysia - 2.1%
84,000 Berjaya Sports Toto Berhad (Leisure) 194,526
53,000 Edaran Otomobil Nasional Berhad (Auto) 195,263
209,000 Malayan Banking Berhad (Banks) 687,500
69,000 New Straits Times Press M Berhad (Publishing) 150,711
28,000 Public Bank Berhad - Alien Market (Banks) 26,379
343,000 Public Bank Berhad (Banks) 288,842
189,000 Resorts World Berhad (Leisure) 479,961
79,000 Tenaga Nasional Berhad (Electrical Utilities) 180,868
------------
2,204,050
----------------------------------------------------------------------------
Philippines - 1.6%
108,000 Bank of the Philippine Islands (Banks) 310,321
54,190 Manila Electric Co. Class B (Electrical Utilities) 161,170
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Philippines - (continued)
45,400 Metropolitan Bank and Trust (Banks) $ 374,758
20,400 Philippine Long Distance Telephone Co.
(Telecommunications) 483,327
2,074,400 SM Prime (Construction) 381,679
------------
1,711,255
---------------------------------------------------------------------------
Singapore - 5.1%
152,000 City Developments (Real Estate) 920,939
22,000 Cycle & Carriage Ltd. (Auto) 124,146
178,000 Datacraft Asia Ltd. (Telecommunications) 687,080
150,000 First Capital Corp. Ltd. (Real Estate) 208,494
348,000 GES International Ltd. (Computer Hardware) 349,344
75,664 Singapore Press Holdings Ltd. (Publishing) 1,258,445
474,000 Singapore Telecommunications Ltd.
(Telecommunications) 841,853
107,000 Venture Manufacturing Ltd. (Electrical Equipment) 1,023,285
------------
5,413,586
---------------------------------------------------------------------------
South Korea - 17.1%
12,150 Daelim Industrial Co. (Construction) 186,804
47,440 Hana Bank (Banks) 421,957
100,278 Hankook Tire Co. Ltd. (Auto) 464,651
15,010 Hite Brewery Co.* (Alcohol) 469,182
23,420 Honam Petrochemical Corp. (Chemicals) 480,105
8,030 Housing & Commercial Bank* (Banks) 187,741
17,000 Hyundai Motor Co. Ltd.* (Auto) 527,065
23,570 Hyundai Securities (Financial Services) 557,055
84,340 Korea Electric Power Corp. (Electrical Utilities) 3,143,549
7,900 Korea Telecom Corp. ADR* (Telecommunications) 256,750
30,500 LG Chemical Ltd. (Chemicals) 974,036
20,000 LG Electronics (Appliance) 847,099
3,381 Pohang Iron & Steel Co. Ltd. (Steel) 452,518
28,630 Pohang Iron & Steel Co. Ltd. ADR (Steel) 1,052,153
28,749 Samsung Electronics (Consumer Durables) 5,455,126
115,690 Shinhan Bank (Banks) 1,244,611
274 Sindo Ricoh (Electrical Equipment) 10,677
6,330 SK Corp. (Energy Resources) 152,821
171 SK Telecom Co. Ltd. (Telecommunications) 171,072
5,898 SK Telecom Co. Ltd. ADR (Telecommunications) 66,721
14,433 Trigem Computer, Inc. (Computer Software) 1,075,903
------------
18,197,596
---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Taiwan - 12.1%
303,600 Acer Peripherals, Inc. (Business Services) $ 787,642
239,750 Acer, Inc. (Computer Hardware) 512,673
60,000 Asustek Computer, Inc. (Computer Hardware) 645,283
1,006,356 Bank Sinopac (Financial Services) 620,270
217,850 Cathay Life Insurance Co. (Insurance) 654,235
674,560 Chinatrust Commercial Bank (Banks) 674,560
98,800 Compeq Manufacturing Co. Ltd. (Electrical Equipment) 497,107
452,720 Evergreen Marine Corp. (Ship Transportation) 468,380
719,040 Far Eastern Textile Ltd. (Apparel) 1,042,382
151,650 Formosa Plastics Corp. (Chemicals) 290,901
176,400 Hon Hai Precision (Electrical Equipment) 1,148,264
589,200 Kang Na Hsiung Enterprise (Home Products) 383,536
421,000 Macronix International Co. Ltd. (Semiconductors) 513,673
198,240 President Chain Stores (Specialty Retail) 585,992
56,640 Quanta Computer (Business Services) 552,151
1 Siliconware Precis (Electrical Equipment) 2
543,156 Taiwan Semiconductor (Electrical Equipment) 2,305,851
437,000 United Microelectonics Corp. Ltd. (Electrical
Equipment) 1,113,113
------------
12,796,015
------------------------------------------------------------------------------
Thailand - 3.2%
40,000 Advanced Info Service Public-Alien Market*
(Telecommunications) 549,060
52,000 BEC World PLC - Alien Market (Entertainment) 309,395
58,000 Delta Electronics Thailand Public Co. Ltd. - Alien
Market (Electrical Equipment) 460,125
258,000 Land and House Public Co. Ltd. - Alien Market* (Real
Estate) 390,501
12,500 Siam Cement Public - Alien Market* (Construction) 323,591
847,300 TelecomAsia Corp. Public - Alien Market*
(Telecommunications) 812,585
211,300 Thai Farmers Bank - Alien Market* (Banks) 303,275
242,000 Tipco Asphalt Public Co. Ltd. - Alien Market*
(Construction) 268,398
------------
3,416,930
------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $69,760,620) $ 88,202,703
------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
Shares/
Units Description Value
Preferred Stock - 0.2%
<C> <S> <C>
Thailand - 0.2%
210,400 Siam Commercial Bank Public Co. Ltd.* (Banks) $ 238,841
----------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost $147,829) $ 238,841
----------------------------------------------------------------------------
Rights - 0.2%
Taiwan - 0.0%
38,640 Quanta Computer Inc. - Rights exp. 09/09/1999*
(Computer Hardware) $ 110
Thailand - 0.2%
211,300 Thai Farmers Bank Public Co. Ltd. -Alien Market -
Rights exp. 09/16/1999* (Banks) 192,993
----------------------------------------------------------------------------
TOTAL RIGHTS
(Cost $0) $ 193,103
----------------------------------------------------------------------------
Warrants - 0.1%
Indonesia - 0.0%
178,500 PT Bank Pan Indonesia Tbk -Alien Market exp.
07/08/2002* (Banks) $ 9,891
----------------------------------------------------------------------------
Thailand - 0.1%
210,400 Siam Commercial Bank Public Co. Ltd. - Alien Market
exp. 05/10/2002* (Banks) 94,713
----------------------------------------------------------------------------
TOTAL WARRANTS
(Cost $0) $ 104,604
----------------------------------------------------------------------------
</TABLE>
Equity Swaps - 3.1%
<TABLE>
<S> <C> <C>
Singapore - 3.1%
87,000 Units Development Bank of Singapore
Equity Swap*
exp. 05/18/2000 $ 992,890
69,000 Units Development Bank of Singapore
Equity Swap*
exp. 05/25/2000 787,465
64,000 Units Development Bank of Singapore
Equity Swap*
exp. 07/28/2000 727,855
123,000 Units Overseas Chinese Banking
Corporation Equity Swap*
exp. 05/18/2000 811,720
----------------------------------------------------------
TOTAL EQUITY SWAPS
(Cost $2,850,462) $ 3,319,930
----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares/
Units Description Value
Structured Notes - 11.2%
<C> <S> <C>
Singapore - 2.0%
33,000 Units Merrill Lynch International - SIA exp.
02/18/2000* $ 302,445
91 Units UBS AG Equity Linked Note -Overseas Chinese
Banking Corporation exp. 04/10/2000* 653,007
74 Units UBS AG Equity Linked Note -Singapore Airlines
exp. 04/10/2000* 693,395
70 Units UBS AG Equity Linked Note -United Overseas
Bank exp. 04/10/2000* 456,645
-----------------------------------------------------------------------------
2,105,492
-----------------------------------------------------------------------------
South Korea - 3.6%
396,323 Units Merrill Lynch Call Warrant on KOSPI 200 exp.
09/03/2000* 3,768,279
-----------------------------------------------------------------------------
Taiwan - 5.6%
161,224 Units Taiwan Index Linked Note exp. 12/30/1999 1,804,096
3,300,000 Units Taiwan Index Linked Note exp. 03/27/2000 4,148,430
-----------------------------------------------------------------------------
5,952,526
-----------------------------------------------------------------------------
TOTAL STRUCTURED NOTES
(Cost $8,265,020) $ 11,826,297
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
Short-Term Obligation - 2.4%
<S> <C> <C> <C>
State Street Bank & Trust Euro-
Time Deposit
$2,595,000 5.50% 09/01/1999 $ 2,595,000
-----------------------------------------------
TOTAL SHORT-TERM OBLIGATION
(Cost $2,595,000) $ 2,595,000
-----------------------------------------------
TOTAL INVESTMENTS
(Cost $83,618,931) $106,480,478
-----------------------------------------------
</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.
8
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
<TABLE>
<CAPTION>
As a % of
total net assets
Common and Preferred Stock Industry Classifications
<S> <C>
Agriculture 0.7%
Airlines 1.4
Alcohol 0.5
Apparel 1.0
Appliance 1.2
Auto 1.2
Banks 7.5
Business Services 1.9
Chemicals 1.7
Computer Hardware 1.4
Computer Software 3.7
Construction 1.3
Consumer Durables 5.1
Drugs 0.0
Electrical Equipment 7.4
Electrical Utilities 3.5
Energy Resources 0.2
Entertainment 0.3
Financial Services 8.2
Food & Beverage 0.8
Health 0.6
Home Products 4.5
Industrial Services 1.0
Insurance 0.9
Leisure 0.6
Media 0.5
Merchandising 0.2
Mining 0.5
Multi-Industrial 1.5
Nonferrous Metals 0.7
Paper 0.3
Publishing 1.8
Real Estate 6.3
Semiconductors 0.5
Ship Transportation 0.5
Specialty Retail 1.5
Steel 1.6
Telecommunications 7.2
Telephone 0.4
Tobacco 0.4
Utilities 1.7
Wholesale 1.1
---------------------------------------------------
TOTAL COMMON AND
PREFERRED STOCK 83.3%
---------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Assets and Liabilities
August 31, 1999
Assets:
<TABLE>
<S> <C>
Investment in securities, at value (identified cost
$83,618,931) $106,480,478
Cash, at value 280,501
Receivables:
Investment securities sold, at value 1,497,940
Dividends and interest, at value 154,163
Fund shares sold 149,471
Reimbursement from investment adviser 67,546
Other assets, at value 35,994
------------------------------------------------------------------------------
Total assets 108,666,093
------------------------------------------------------------------------------
Liabilities:
Payables:
Investment securities purchased, at value 1,029,743
Capital gains tax 1,147,250
Fund shares repurchased 82,050
Amounts owed to affiliates 144,295
Accrued expenses and other liabilities, at value 92,135
------------------------------------------------------------------------------
Total liabilities 2,495,473
------------------------------------------------------------------------------
Net Assets:
Paid-in capital 181,349,428
Accumulated net realized loss from investment, futures and
foreign currency related transactions (96,891,937)
Net unrealized gain on investments, futures and translation of
assets and liabilities denominated in foreign currencies 21,713,129
------------------------------------------------------------------------------
NET ASSETS $106,170,620
------------------------------------------------------------------------------
Net asset value, offering and redemption price per share(a)
Class A $11.07
Class B $10.88
Class C $10.85
Institutional $11.24
------------------------------------------------------------------------------
Shares outstanding:
Class A 7,609,126
Class B 667,091
Class C 210,286
Institutional 1,099,697
------------------------------------------------------------------------------
Total shares outstanding, $.001 par value (unlimited number of
shares authorized) 9,586,200
------------------------------------------------------------------------------
</TABLE>
(a) Maximum public offering price per share (NAV per share multiplied by
1.0582) for Class A shares is $11.71. 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.
10
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Operations
For the Seven-Month Period Ended August 31, 1999
<TABLE>
<S> <C>
Investment income:
Dividends(a) $ 686,073
Interest 47,286
-----------------------------------------------------------------------------
Total income 733,359
-----------------------------------------------------------------------------
Expenses:
Management fees 501,770
Distribution and service fees(b) 250,094
Custodian fees 137,465
Transfer agent fees(c) 88,932
Registration fees 72,739
Professional fees 45,145
Trustee fees 6,074
Other 32,460
-----------------------------------------------------------------------------
Total expenses 1,134,679
-----------------------------------------------------------------------------
Less -- expenses reimbursed (211,592)
-----------------------------------------------------------------------------
Net expenses 923,087
-----------------------------------------------------------------------------
NET INVESTMENT LOSS (189,728)
-----------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment, futures and
foreign currency related transactions:
Net realized gain (loss) from:
Investment transactions 2,517,806
Futures transactions 774,816
Foreign currency related transactions (79,301)
Net change in unrealized gain (loss) on:
Investments 26,459,314
Translation of assets and liabilities denominated in foreign
currencies 2,769
-----------------------------------------------------------------------------
Net realized and unrealized gain on investment, futures and
foreign currency related transactions 29,675,404
-----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $29,485,676
-----------------------------------------------------------------------------
</TABLE>
(a) Taxes withheld on dividends were $54,723.
(b) Class A, Class B and Class C had distribution and service fees of
$208,976, $32,196 and $8,922, respectively.
(c) Class A, Class B, Class C and Institutional Class had transfer agent fees
of $79,412, $6,117, $1,695 and $1,708, respectively.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Changes in Net Assets
For the Seven-Month Period Ended August 31, 1999
<TABLE>
<S> <C>
From operations:
Net investment loss $ (189,728)
Net realized gain from investment, futures and foreign
currency related transactions 3,213,321
Net change in unrealized gain (loss) on investments and
translation of assets and liabilities denominated in foreign
currencies 26,462,083
----------------------------------------------------------------------------
Net increase in net assets resulting from operations 29,485,676
----------------------------------------------------------------------------
Distributions to shareholders:
In excess of net investment income
Class A shares --
Class B shares --
Class C shares --
Institutional shares (43,226)
----------------------------------------------------------------------------
Total distributions to shareholders (43,226)
----------------------------------------------------------------------------
From share transactions:
Proceeds from sales of shares 97,742,029
Reinvestment of dividends and distributions 40,413
Cost of shares repurchased (90,383,194)
----------------------------------------------------------------------------
Net increase in net assets resulting from share transactions 7,399,248
----------------------------------------------------------------------------
TOTAL INCREASE 36,841,698
----------------------------------------------------------------------------
Net assets:
Beginning of period 69,328,922
----------------------------------------------------------------------------
End of period $106,170,620
----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Changes in Net Assets
For the Year Ended January 31, 1999
<TABLE>
<S> <C>
From operations:
Net investment income $ 492,262
Net realized loss from investment, futures and foreign
currency related transactions (27,883,885)
Net change in unrealized loss on investments, futures and
translation of assets and liabilities denominated in foreign
currencies 21,285,501
-----------------------------------------------------------------------------
Net decrease in net assets resulting from operations (6,106,122)
-----------------------------------------------------------------------------
From share transactions:
Proceeds from sales of shares 138,273,446
Cost of shares repurchased (154,943,929)
-----------------------------------------------------------------------------
Net decrease in net assets resulting from share transactions (16,670,483)
-----------------------------------------------------------------------------
TOTAL DECREASE (22,776,605)
-----------------------------------------------------------------------------
Net assets:
Beginning of year 92,105,527
-----------------------------------------------------------------------------
End of year $ 69,328,922
-----------------------------------------------------------------------------
Accumulated distributions in excess of net investment income $ (105,797)
-----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
GOLDMAN SACHS ASIA GROWTH 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 $ 7.79 $(0.02) $3.30 $ -- $ -- $ -- $3.28
1999 - Class B Shares 7.68 (0.04) 3.24 -- -- -- 3.20
1999 - Class C Shares 7.68 (0.04) 3.21 -- -- -- 3.17
1999 - Institutional
Shares 7.91 0.01 3.36 -- (0.04) -- 3.33
FOR THE YEARS ENDED JANUARY 31,
1999 - Class A Shares 8.38 0.07 (0.66) -- -- -- (0.59)
1999 - Class B Shares 8.31 0.01 (0.64) -- -- -- (0.63)
1999 - Class C Shares 8.29 -- (0.61) -- -- -- (0.61)
1999 - Institutional
Shares 8.44 0.03 (0.56) -- -- -- (0.53)
----------------------------------------------------------------------------------------------------------------
1998 - Class A Shares 16.31 -- (7.90) -- (0.03) -- (7.93)
1998 - Class B Shares 16.24 0.01 (7.91) -- (0.03) -- (7.93)
1998 - Class C Shares
(commenced August 15,
1997) 15.73 0.01 (7.42) -- (0.03) -- (7.44)
1998 - Institutional
Shares 16.33 0.10 (7.96) (0.03) -- -- (7.89)
----------------------------------------------------------------------------------------------------------------
1997 - Class A Shares 16.49 0.06 (0.11) (0.12) -- (0.01) (0.18)
1997 - Class B Shares
(commenced May 1, 1996) 17.31 (0.05) (0.48) (0.51) (0.03) -- (1.07)
1997 - Institutional
Shares (commenced Febru-
ary 2, 1996) 16.61 0.04 (0.11) (0.11) (0.06) (0.04) (0.28)
----------------------------------------------------------------------------------------------------------------
1996 - Class A Shares 13.31 0.17 3.44 (0.12) (0.14) (0.17) 3.18
FOR THE PERIOD ENDED JANUARY 31,
1995 - Class A Shares
(commenced July 8, 1994) 14.18 0.11 (0.89) 0.01 -- (0.10) (0.87)
----------------------------------------------------------------------------------------------------------------
</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.
14
<PAGE>
GOLDMAN SACHS ASIA GROWTH 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) expenses income (loss) to Portfolio
value, end Total period to average to average to average average turnover
of period return(b) (in 000s) net assets net assets net assets net assets rate
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$11.07 42.11%(d) $84,269 1.85%(c) (0.38)%(c) 2.27%(c) (0.80)%(c) 96.58%(d)
10.88 41.67(d) 7,258 2.35(c) (0.90)(c) 2.77(c) (1.32)(c) 96.58(d)
10.85 41.28(d) 2,281 2.35(c) (0.89)(c) 2.77(c) (1.31)(c) 96.58(d)
11.24 42.61(d) 12,363 1.20(c) 0.14(c) 1.62(c) (0.28)(c) 96.58(d)
- ---------------------------------------------------------------------------------------------------------------------
7.79 (7.04) 59,940 1.93 0.63 2.48 0.08 106.00
7.68 (7.58) 4,190 2.45 0.10 2.97 (0.42) 106.00
7.68 (7.36) 999 2.45 0.10 2.97 (0.42) 106.00
7.91 (6.28) 4,200 1.16 1.10 1.68 0.58 106.00
- ---------------------------------------------------------------------------------------------------------------------
8.38 (48.49) 87,437 1.75 0.31 1.99 0.07 105.16
8.31 (48.70) 3,359 2.30 (0.29) 2.50 (0.49) 105.16
8.29 (47.17)(d) 436 2.35(c) (0.26)(c) 2.55(c) (0.46)(c) 105.16
8.44 (48.19) 874 1.11 0.87 1.31 0.67 105.16
- ---------------------------------------------------------------------------------------------------------------------
16.31 (1.01) 263,014 1.67 0.20 1.87 -- 48.40
16.24 (6.02)(d) 3,354 2.21(c) (0.56)(c) 2.37(c) (0.72)(c) 48.40
16.33 (1.09)(d) 13,322 1.10(c) 0.54(c) 1.26(c) 0.38(c) 48.40
- ---------------------------------------------------------------------------------------------------------------------
16.49 26.49 205,539 1.77 1.05 2.02 0.80 88.80
- ---------------------------------------------------------------------------------------------------------------------
13.31 (5.46)(d) 124,298 1.90(c) 1.83(c) 2.38(c) 1.35(c) 36.08(d)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
GOLDMAN SACHS ASIA GROWTH 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 Asia Growth
Fund (the "Fund"). The Fund is a diversified portfolio offering five classes
of shares -- Class A, Class B, Class C, Institutional and Service (Service
shares have not commenced operations).
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 the 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 securities
are valued at prices supplied by independent pricing services, broker / deal-
er-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 the 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.
Investing in emerging markets may involve special risks and considerations
not typically associated with investing in the United States. These risks in-
clude revaluation of currencies, high rates of inflation, repatriation re-
strictions on income and capital and future adverse political and economic
developments. Moreover, securities issued in these markets may be less liq-
uid, subject to government ownership controls, delayed settlements, and their
prices may be more volatile than those of comparable securities in the United
States.
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. In ad-
dition, it is the Fund's policy to accrue for estimated capital gains taxes
on appreciated foreign securities held.
C. Derivative Financial Instruments -- The Fund may utilize derivative finan-
cial instruments such as structured notes and equity swaps. Such instruments
are used by the Fund as a means of investing in a particular market or in-
creasing the return on the Fund's investments or both. The value of the prin-
cipal and/or interest on such securities is determined by reference to
changes in the value of the financial indicators including, but not limited
to indices, currencies or interest rates. These financial instruments may
subject the Fund to a greater degree of market or counterparty risk and loss
than other types of securities.
16
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
D. 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.
E. 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 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 extinguished by de-
livery of the currency. Risks may arise upon entering these contracts from
the potential inability of counterparties to meet the terms of their con-
tracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
F. 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.
17
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Notes to Financial Statements (continued)
August 31, 1999
G. 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.
18
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
H. 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, mortgage dollar rolls,
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.
I. Expenses -- Expenses incurred by the Trust which do not specifically re-
late to an individual Fund of the Trust are allocated to the Funds based on a
straight-line or pro rata basis depending on 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.
J. 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 reporting purposes is determined in accordance with income tax
rules. Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net invest-
ment income or net realized gain on investment transactions, or from paid-in
capital, depending on the type of book / tax differences that may exist.
The Fund had approximately $95,393,000 at August 31, 1999 (the Fund's tax
year end) of capital loss carryforwards expiring 2002 through 2007 for fed-
eral tax purposes. These amounts are available to be carried forward to off-
set future capital gains to the extent permitted by applicable laws or
regulations.
At August 31, 1999 the aggregate cost of portfolio securities for federal
income tax purposes is $85,163,314. Accordingly, the gross unrealized gain on
investments was $23,258,713 and the gross unrealized loss on investments was
$1,941,549 resulting in a net unrealized gain of $21,317,164.
19
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Notes to Financial Statements (continued)
August 31, 1999
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, indemnification costs and other ex-
traordinary expenses) to the extent such expenses exceed, on an annual basis,
.16% of the average daily net assets of the Fund. Goldman Sachs has agreed to
reimburse approximately $212,000 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, 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 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 $106,000 for the period ended
August 31, 1999.
Goldman Sachs also serves as the transfer agent of the Fund for a fee. The
fees charged for such transfer agency services are calculated daily and pay-
able 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 shares.
As of August 31, 1999, the amounts owed to affiliates were approximately
$87,000, $42,000 and $15,000 for management, distribution and service and
transfer agent fees, respectively.
20
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
4. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and proceeds of sales or maturities of securities (excluding short-
term investments and futures transactions) for the period ended August 31,
1999, were $89,434,272 and $81,172,174, respectively.
For the period ended August 31, 1999, Goldman Sachs earned approximately
$35,000 of brokerage commissions from portfolio transactions.
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 as unrealized gains
or losses. When contracts are closed, the Fund realizes a gain or loss which
is reported in the Statement of Operations.
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, the Fund had no open futures
contracts.
21
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Notes to Financial Statements (continued)
August 31, 1999
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. The facility is to be used solely for temporary or emergency pur-
poses. 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.
22
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
6. SUMMARY OF SHARE TRANSACTIONS
Share activity is as follows:
<TABLE>
<CAPTION>
For the Seven-Month
Period For the Year Ended
Ended August 31, 1999 January 31, 1999
-----------------------------
--------------------------
Shares Dollars Shares Dollars
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Shares
Shares sold 7,428,461 $ 68,519,866 15,227,587 $ 114,095,624
Shares repurchased (7,511,626) (69,221,284) (17,965,578) (136,028,026)
---------------------------------------------------
(83,165) (701,418) (2,737,991) (21,932,402)
------------------------------------------------------------------------------
Class B Shares
Shares sold 201,786 2,022,897 345,699 2,823,123
Shares repurchased (80,372) (733,280) (204,359) (1,519,808)
---------------------------------------------------
121,414 1,289,617 141,340 1,303,315
------------------------------------------------------------------------------
Class C Shares
Shares sold 2,420,991 19,122,822 2,148,809 16,213,829
Shares repurchased (2,340,851) (18,439,726) (2,071,174) (15,859,777)
---------------------------------------------------
80,140 683,096 77,635 354,052
------------------------------------------------------------------------------
Institutional Shares
Shares sold 753,741 8,076,444 636,785 5,140,870
Reinvestment of divi-
dends 3,661 40,413 -- --
Shares repurchased (188,772) (1,988,904) (209,306) (1,536,318)
---------------------------------------------------
568,630 6,127,953 427,479 3,604,552
------------------------------------------------------------------------------
NET INCREASE (DECREASE) 687,019 $ 7,399,248 (2,091,537) $ (16,670,483)
------------------------------------------------------------------------------
</TABLE>
7. CERTAIN RECLASSIFICATIONS
In accordance with Statement of Position 93-2, the Fund reclassified $338,751
from paid-in capital to accumulated undistributed net investment income and
$624,078 from paid-in capital to accumulated net realized loss from invest-
ment, futures and foreign currency related transactions. These reclassifica-
tions 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.
23
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Report of Independent Public Accountants
To the Shareholders and Board of Trustees ofGoldman Sachs Trust -- Asia
Growth Fund:
We have audited the accompanying statement of assets and liabilities of
Goldman Sachs Asia Growth Fund, one of the portfolios constituting Goldman
Sachs Trust -- Equity Funds (a Delaware Business Trust), including the state-
ment of investments, as of August 31, 1999, and the related statement of op-
erations, 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 au-
dit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and the financial highlights re-
ferred to above present fairly, in all material respects, the financial posi-
tion of Goldman Sachs Asia Growth 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
24
<PAGE>
GOLDMAN SACHS FUND PROFILE
Goldman Sachs Asia Growth Fund
An Investment Idea for the Long Term
History has shown that a long-term plan that includes stocks of emerging
market countries is more likely to provide greater returns and reduce
overall portfolio volatility over time than a portfolio that invests only
in U.S.-based stocks.
Goldman Sachs Asia Growth Fund provides investors access to the benefits
associated with emerging market investing. The Fund seeks long-term capital
appreciation, primarily through equity securities of companies related to
Asia, excluding Japan.
Target Your Needs
The Goldman Sachs Asia Growth 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
that 30 investment options for
globas diversification across
borders, investment sytles, asset
classses and security capitalizations.
[GRAPHIC APPEARS HERE]
INTERNATIONAL EQUITY
MONEY FIXED DOMESTIC -Goldman Sachs Asia
MARKETS INCOME EQUITY Growth Fund
--------------------------------------------------------------------------
Lowest Risk/Return Highest Risk/Return
For More Information
To learn more about the Goldman Sachs Asia Growth 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 develop-ments. 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.
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 AGAR /11.8K /10-99
