<PAGE>
Goldman Sachs Funds
- --------------------------------------------------------------------------------
CORE/SM/ Equity Funds Annual Report August 31, 1999
- --------------------------------------------------------------------------------
Long-term capital growth potential
through diversified portfolios of
stocks with attractive quantitative
and qualitative rankings.
[GS LOGO APPEARS HERE]
<PAGE>
MARKET OVERVIEW
Goldman Sachs CORE Equity Funds
Dear Shareholder,
During the period under review, the ongoing strength of the U.S. economy and
stock market surprised many experts, and Asian markets rebounded dramatically
following 1998's economic crisis.
. Market Review: Overall, Global Markets Performed Well -- As the
reporting period began, a cloud hovering over the world's equity markets
was appearing to lift. Concerted action from the G-7, including multiple
interest rate cuts by the Federal Reserve Board, began to elevate fears
of a global financial meltdown. The euro currency was launched amid much
fanfare. And the Japanese government finally appeared ready to seriously
address its structural problems.
In most cases, this has led to positive market returns around the
world. The U.S. stock market has moved forward against a backdrop of
shifting preferences for equities and rising interest rates. In Asia, a
dramatic rebound unfolded after last year's currency crisis. Investors
who were previously underweight in the region moved to increase their
exposure, creating an attractive investment environment. And in Japan,
the market has generated very strong returns, due to unexpected gains in
the country's domestic economy and a flood of capital from institutional
investors. One of the few disappointments occurred in Europe. The
euphoria surrounding the launch of the euro was short lived, as the
markets retreated on heels of the conflict in Bosnia, rising U.S.
interest rates and data indicating sluggish production in the region.
. Market Outlook: Mixed Signals Prevail -- In the shorter-term, the
outlook for the U.S. stock market appears generally positive. Corporate
profits should remain healthy, and we would expect to see strong
economic growth for the remainder of 1999. While inflation could be
somewhat higher than in years past, it should remain moderate. However,
the Federal Reserve has made it clear that increased signs of inflation
will be dealt with swiftly.
The outlook for Asia as a region has improved, although it is
important to note that intra-regional discrepancies still exist. We
believe that several countries have "bottomed out" and are now showing
signs of recovery following the crises of 1998. On a cautious note, we
recognize that a recovery in Asia is very dependent on the continued
strength of the U.S. market. Consequently, it will be important to
closely monitor all economic data coming out of the U.S. in an effort to
determine its impact on the Asian markets.
In Japan, for the time being, we remain cautious on the market, given
the recent rally and the concerns of equity valuations. Based on the
current price levels, the market seems to have discounted much of the
earnings recovery expected to materialize in late 1999. On a positive
note, many companies are in the process of implementing restructuring
plans that they announced several months back -- benefits of which could
improve earnings.
And in Continental Europe, the outlook is relatively positive, given
signs of an economic recovery within the major economies in the region,
the resurgence in business and consumer confidence, and the added
benefit of Asia and Japan restocking inventories.
. Special Note: Reporting Period Change -- The fiscal year-end of the
Funds has been changed to August 31. Previously, the Funds had a January
31 fiscal year-end. Because of the new reporting period, 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, Goldman Sachs Asset Co-Head, Goldman Sachs Asset
Management Management
September 3, 1999
- ----------------------
. NOT FDIC
INSURED
. May Lose Value
. No Bank
Guarantee
- ----------------------
<PAGE>
FUND BASICS
CORE(SM) U.S. Equity Fund
as of August 31, 1999
Assets Under Management
$1.2 Billion
Number of Holdings
175
NASDAQ Symbols
Class A Shares
GSSQX
Class B Shares
GSSBX
Class C Shares
GSUSX
Institutional Shares
GSELX
Service Shares
GSESX
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PERFORMANCE REVIEW
- -------------------------------------------------------------------------------------------------
January 31, 1999-August 31, 1999 Fund Total Return (without sales charge)/1/ S&P 500 Index/2/
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 3.73% 3.98%
Class B 3.26 3.98
Class C 3.27 3.98
Institutional 3.97 3.98
Service 3.65 3.98
- -------------------------------------------------------------------------------------------------
</TABLE>
/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 S&P 500 Index (with dividends reinvested) figures do not
reflect any fees or expenses. In addition, investors cannot invest directly
in the Index.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
STANDARDIZED TOTAL RETURNS/3/
- -------------------------------------------------------------------------------------------------
For the period ended 6/30/99 Class A Class B Class C Institutional Service
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months 6.81% 7.61% 11.62% 13.24% 12.96%
One Year 10.67 11.14 15.21 17.63 17.06
Five Years 23.71 N/A N/A N/A 25.17/4/
Since Inception 16.77 23.63 20.45 26.51 17.62/4/
(5/24/91) (5/1/96) (8/15/97) (6/15/95) (5/24/91)
- -------------------------------------------------------------------------------------------------
</TABLE>
/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.
/4/Performance data for Service shares prior to 6/7/96 is that of Class A
shares (excluding the impact of front-end sales charges applicable to Class
A shares since Service shares are not subject to any sales charges).
Performance of Class A shares of the CORE U.S. Equity Fund reflects the
expenses applicable to the Fund's Class A shares. The fees applicable to
Services shares are different from those applicable to Class A shares which
impact performance ratings and rankings for a class of shares.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Top 10 Holdings as of 8/31/99
- -------------------------------------------------------------------------------------------------
Holding % of Total Net Assets Line of Business
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Microsoft Corp. 5.3% Computer Software
General Electric Co. 3.3 Heavy Electrical
International Business Machines, Inc. 3.1 Computer Hardware
Exxon Corp. 2.7 Energy Resources
Intel Corp. 2.3 Semiconductors
American International Group, Inc. 2.3 Property Insurance
Royal Dutch Petroleum Co. ADR 2.2 Energy Resources
AT&T Corp. 2.2 Telephone
Tyco International Ltd. 1.8 Medical Products
Bristol-Myers Squibb Co. 1.8 Drugs
- -------------------------------------------------------------------------------------------------
</TABLE>
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 fee
waivers and expense limitations in effect. In their absence, performance would
be reduced.
1
<PAGE>
PERFORMANCE OVERVIEW
CORE U.S. Equity Fund
Dear Shareholder,
We are pleased to report on the performance of the Goldman Sachs CORE U.S.
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 ended August 31, 1999, the Fund's Class A,
B, C, Institutional and Service shares generated total cumulative
returns, without sales charges, of 3.73%, 3.26%, 3.27%, 3.97%, and
3.65%, respectively. These figures compared to the 3.98% total
cumulative return of the Fund's benchmark, the S&P 500 Index.
The CORE strategy is a well-defined investment process that has
historically provided consistent, risk-managed performance. We seek to
buy stocks that are attractively valued and favored by fundamental
research analysts and have experienced good momentum. These themes are
considered relative to the S&P 500 Index. The diversification of our
models typically adds value, because when one theme doesn't work, others
usually do. For example, when momentum stocks underperform, value stocks
have historically advanced more than average. Portfolios are constructed
taking into account stocks' risk characteristics as well as their
expected returns.
During the reporting period, we experienced dramatic shifts in
investor sentiment, which made stock picking unusually difficult. During
the first quarter of the year the stock market's rally was extremely
narrow, limited mostly to a few very large growth companies and the
technology sector. Early in the second quarter, investors rotated assets
into value-oriented, smaller-cap and cyclical issues. However, they were
again favoring large-cap growth by the time the second quarter ended,
and continued to favor large growth until the end of the period under
review. In the first quarter, the momentum theme of our quantitative
process helped us to select winning stocks, although as the market's
preferences shifted, these results were difficult to maintain. Overall,
during the reporting period the Fund provided a competitive return
compared to its benchmark.
Portfolio Positioning
The CORE investment process analyzes each stock based upon its Value,
Momentum and Risk characteristics, as well as a fundamental Research
assessment. Throughout the period under review, we placed the most
emphasis on the Momentum theme, followed by Value and Research.
Stability accounted for the lowest proportion of a company's expected
excess return.
. Early in the period under review, the Stability theme produced the best
returns; Value and Research both produced results in the opposite
direction of what we would expect.
. During the second calendar quarter, Value fared much better than in the
first quarter, producing the highest returns of the four themes. Whereas
less stable companies had higher returns than their more-stable
counterparts, Momentum helped slightly.
. Near the end of the period, the themes produced mixed results.
Performance of several of the underlying models produced very negative
results, while others had unusually good returns.
2
<PAGE>
PERFORMANCE OVERVIEW
The Goldman Sachs CORE U.S. Equity Fund seeks long-term capital growth and
dividend income by investing in a broadly diversified portfolio of large-cap
equity securities representing all major sectors of the U.S. economy.
- --------------------------------------------------------------------------------
CORE INVESTMENT PROCESS
- --------------------------------------------------------------------------------
Computer Optimized
. Risk management tools designed to minimize industry and style risk.
. Emphasis on stock selection with attention to attractive quantitative and
qualitative ratings.
. Construct portfolio with maximum expected return forecast within risk
guidelines.
Research Enhanced
. Fundamental Research from Goldman Sachs' Global Investment Research
Department and other research sources.
. Quantitative insights from proprietary multi-factor model rank each stock
by its value, momentum and risk characteristics.
CORE Process
Result: A risk-managed portfolio grounded by a rigorous quantitative model
and enhanced by fundamental research.
Portfolio Highlights
Noteworthy company performance spanned a diverse group of sectors, including:
. Technology holdings IBM (up 36.4%; 3% of net assets) and Lexmark
International Group (up 55.9%; 1% of net assets).
. Retailer Best Buys Co. (up 55.1%; 1% of net assets).
. Chemical company leader Dow Chemicals (up 31.1%; 1% of net assets).
Portfolio Outlook
Despite a period of shifting investor preference and above average return
dispersion (the difference between the best- and worst-performing stocks), the
Fund's investment process led to competitive returns during the period, as it
has done in the past. Going forward, we continue to believe that cheaper stocks
should outpace more expensive ones, good momentum stocks should do better than
poor momentum stocks, and lower-risk stocks should perform better than higher
risk stocks. As such, we anticipate remaining fully invested and expect that the
value we add over time will be due to stock selection, as opposed to sector or
size allocations.
We thank you for your investment and look forward to your continued confidence.
Goldman Sachs Quantitative Equity Investment Team
New York
September 3, 1999
3
<PAGE>
FUND BASICS
CORE(SM) Large Cap Growth Fund
as of August 31, 1999
Assets Under Management
$871 Million
Number of Holdings
135
NASDAQ Symbols
Class A Shares
GLCGX
Class B Shares
GCLCX
Class C Shares
GLCCX
Institutional Shares
GCGIX
Service Shares
GSCLX
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
PERFORMANCE REVIEW
- --------------------------------------------------------------------------------------------------------------
January 31, 1999-August 31, 1999 Fund Total Return (without sales charge)/1/ Russell 1000 Growth Index/2/
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.26% 2.66%
Class B 4.82 2.66
Class C 4.75 2.66
Institutional 5.49 2.66
Service 5.21 2.66
- --------------------------------------------------------------------------------------------------------------
</TABLE>
/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 Russell 1000 Growth Index (with dividends reinvested) figures
do not reflect any fees or expenses. In addition, investors cannot invest
directly in the Index.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
STANDARDIZED TOTAL RETURNS/3/
- --------------------------------------------------------------------------------------------------------------
For the period ended 6/30/99 Class A Class B Class C Institutional Service
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months 5.00% 5.76% 9.76% 11.40% 11.07%
One Year 13.33 14.10 18.19 20.52 19.90
Five Years 28.03/4/ N/A N/A 29.68/4/ 29.41/4/
Since Inception 21.35/4/ 27.89 22.82 22.38/4/ 22.21/4/
(11/11/91) (5/1/97) (8/15/97) (11/11/91) (5/1/97)
- --------------------------------------------------------------------------------------------------------------
</TABLE>
/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.
/4/Performance data for Service shares prior to May 1, 1997 (commencement of
operations) is that of Class A shares. Class A share performance for such
period is that of a predecessor separate account (which converted into
Class A shares) adjusted to reflect the higher fees and expenses applicable
to the Fund's Class A shares. Although the predecessor separate account was
managed by Goldman Sachs Asset Management in a manner and pursuant to
investment objectives in all material respects equivalent to management and
investment objectives of the CORE Large Cap Growth Fund, the separate
account was not registered under the Investment Company Act of 1940 (the
"Act") and was not subject to certain investment restrictions imposed by
the Act. If it had registered under the Act, performance might have been
adversely affected.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Top 10 Holdings as of 8/31/99
- --------------------------------------------------------------------------------------------------------------
Holding % of Total Net Assets Line of Business
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Microsoft Corp. 6.6% Computer Software
General Electric Co. 5.2 Heavy Electrical
Cisco Systems, Inc. 4.7 Computer Hardware
Intel Corp. 3.9 Semiconductors
Amgen, Inc. 3.8 Drugs
QUALCOMM, Inc. 2.8 Electrical Equipment
Eastman Kodak Co. 2.6 Leisure
Johnson & Johnson 2.6 Medical Products
Hewlett-Packard Co. 2.3 Computer Hardware
Procter & Gamble Co. 2.3 Home Products
- --------------------------------------------------------------------------------------------------------------
</TABLE>
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 fee
waivers and expense limitations in effect. In their absence, performance would
be reduced.
4
<PAGE>
PERFORMANCE OVERVIEW
CORE Large Cap Growth Fund
Dear Shareholder,
We are pleased to report on the performance of the Goldman Sachs CORE Large Cap
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 ended August 31, 1999, the Fund's Class A, B, C,
Institutional and Service shares generated total cumulative returns, without
sales charges, of 5.26%, 4.82%, 4.75%, 5.49% and 5.21%, respectively. These
figures compare favorably to the 2.66% total cumulative return of the Fund's
benchmark, the Russell 1000 Growth Index.
The CORE strategy is a well-defined investment process that has
historically provided consistent, risk-managed performance. We seek to buy
stocks that are attractively valued and favored by fundamental research
analysts and have experienced good momentum. These themes are considered
relative to the Russell 1000 Growth Index. The diversification of our models
typically adds value, because when one theme doesn't work, others usually
do. For example, when momentum stocks underperform, value stocks typically
advance more than average. Portfolios are constructed taking into account
stocks' risk characteristics as well as their expected returns.
The Fund's investment process and diversification of themes were key
benefits during the reporting period, as we experienced dramatic shifts in
investor sentiment. During the first quarter of the year the stock market's
rally was extremely narrow, limited mostly to a few very large growth
companies and the technology sector. Early in the second quarter, investors
rotated assets into value-oriented, smaller-cap and cyclical issues.
However, they were again favoring large-cap growth by the time the second
quarter ended, and continued to favor large growth until the end of the
period under review. In the first quarter, the momentum theme of our
quantitative process helped us to select winning stocks, although as the
market's preferences shifted, these results were difficult to maintain.
Overall, during the reporting period the Fund was able to outperform its
benchmark.
Portfolio Positioning
The CORE investment process analyzes each stock based upon its Value,
Momentum and Risk characteristics as well as a fundamental Research
assessment. Throughout the period under review, we placed the most emphasis
on the Momentum theme, followed by Value and Research. Stability accounted
for the lowest proportion of a company's expected excess return.
. Early in the period under review, the Stability theme produced the best
returns; Momentum worked well, but Value and Research both produced results
in the opposite direction of what we would expect.
. During the second calendar quarter, Value fared much better than in the
first quarter, producing the highest returns of the four themes. Whereas
less stable companies and those less favored by research analysts had
higher returns than their more-stable and better-rated counterparts,
momentum helped returns.
. Near the end of the period, Value, Momentum and Stability all helped
returns in the large-cap Growth universe; Research, however, did not fare
as strongly.
5
<PAGE>
PERFORMANCE OVERVIEW
The Goldman Sachs CORE Large Cap Growth Fund seeks long-term capital growth,
primarily by investing in a broadly diversified portfolio of equity securities
that are expected to have better prospects for earnings growth than the growth
rate of the general domestic economy.
Portfolio Highlights
Noteworthy company performance spanned a diverse group of sectors,
including:
. Technology holdings Cisco Systems (up 21.6%; 5% of net assets), Hewlett
Packard (up 35.0%; 2% of net assets) and Exodus Communications (up 49.4%;
1% of net assets).
. Photographic supplier Eastman Kodak (up 14.5%; 3% of net assets).
. Biotechnology leader Amgen (up 30.2%; 4% of net assets).
Portfolio Outlook
As always, the Fund remains fully invested in stocks. Our sector weightings
and distribution among size categories are targeted to stay close to those
of the Russell 1000 Growth Index, as do exposures to other risk factors
(such as dividend yield). Based on long-term results, our quantitative
process prefers low P/E and low price/book stocks with good momentum
characteristics that exhibit lower volatility in stock price and earnings,
and that are favored by research analysts. As such, we maintain an exposure
to securities that display these factors.
We thank you for your investment and look forward to your continued
confidence.
Goldman Sachs Quantitative Equity Investment Team
New York
September 3, 1999
6
<PAGE>
FUND BASICS
CORE(SM) Small Cap Equity Fund
as of August 31, 1999
Assets Under Management
$135.3 Million
Number of Holdings
329
NASDAQ Symbols
Class A Shares
GCSAX
Class B Shares
GCSBX
Class C Shares
GCSCX
Institutional Shares
GCSIX
Service Shares
GCSSX
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Performance Review
- -------------------------------------------------------------------------------------------------------------
January 31, 1999-August 31, 1999 Fund Total Return (without sales charge)/1/ Russell 2000 Index/2/
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 0.69% 1.01%
Class B 0.20 1.01
Class C 0.20 1.01
Institutional 0.98 1.01
Service 0.59 1.01
- -------------------------------------------------------------------------------------------------------------
</TABLE>
/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 Russell 2000 Index (with dividends reinvested) figures do not
reflect any fees or expenses. In addition, investors cannot invest directly
in the Index.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Standardized Total Returns/3/
- -------------------------------------------------------------------------------------------------------------
For the period ended 6/30/99 Class A Class B Class C Institutional Service
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months 0.19% 0.69% 4.69% 6.32% 6.05%
One Year -13.20 -13.43 -9.70 -7.81 -8.23
Since Inception 0.94 1.19 3.34 4.41 3.96
(8/15/97)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
/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.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Top 10 Holdings as of 8/31/99
- -------------------------------------------------------------------------------------------------------------
Holding % of Total Net Assets Line of Business
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Hollywood Entertainment Co. 1.5% Specialty Retail
Millennium Pharmaceuticals 1.3 Drugs
Delphi Financial Group, Inc. 1.2 Life Insurance
Sandisk Corp. 1.1 Computer Hardware
CTS Corp. 1.1 Semiconductors
Sawtek, Inc. 1.1 Electrical Equipment
Southwest Securities Group, Inc. 1.0 Security/Asset Management
Federal Signal Corp. 1.0 Electrical Equipment
Alpharma, Inc. 0.8 Drugs
Toro Co. 0.8 Industrial Parts
- -------------------------------------------------------------------------------------------------------------
</TABLE>
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 their absence, performance would be reduced.
7
<PAGE>
PERFORMANCE OVERVIEW
CORE Small Cap Equity Fund
Dear Shareholder,
We are pleased to report on the performance of the Goldman Sachs CORE Small
Cap 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 ended August 31, 1999, the Fund's Class A,
B, C, Institutional and Service shares generated cumulative total
returns, without sales charges, of 0.69%, 0.20%, 0.20%, 0.98% and 0.59%,
respectively. These figures compare to the 1.01% cumulative total return
of the Fund's benchmark, the Russell 2000 Index.
The CORE strategy is a well-defined investment process that has
historically provided consistent, risk-managed performance. We seek to
buy stocks that are attractively valued and favored by fundamental
research analysts and have experienced good momentum. These themes are
considered relative to the Russell 2000 Index. The diversification of
our models typically adds value, because when one theme doesn't work,
others usually do. For example, when momentum stocks underperform, value
stocks typically advance more than average. Portfolios are constructed
taking into account stocks' risk characteristics as well as their
expected returns.
We experienced dramatic shifts in investor sentiment during the
reporting period. In the first quarter of the year the stock market's
rally was extremely narrow, limited mostly to a few very large growth
companies and the technology sector. Early in the second quarter,
investors rotated assets into value-oriented, smaller-cap and cyclical
issues. However, they were again favoring large-cap growth by the time
the second quarter ended, and continued to favor large growth until the
end of the period under review.
Portfolio Positioning
The CORE investment process analyzes each stock based upon its Value,
Momentum and Risk characteristics as well as a fundamental Research
assessment. Throughout the period under review, we placed the most
emphasis on the Momentum theme, followed by Value and Research.
Stability accounted for the lowest proportion of a company's expected
excess return.
. During the first quarter, the small-cap stocks that fared the best were
those with no earnings -- mainly Internet-related stocks. Since earnings
are a critical component in our evaluation of stocks, we had a difficult
time during that period.
. Later in the evaluation period, returns to our investment themes within
the Russell 2000 Index reverted to a more typical pattern. We
experienced the best returns from our Stability theme, but Value and
Research also did well. Momentum, however, did not add value.
8
<PAGE>
PERFORMANCE OVERVIEW
The Goldman Sachs CORE Small Cap Equity Fund seeks long-term capital growth by
investing primarily in a broadly diversified portfolio of equity securities of
U.S. issuers that are included in the Russell 2000 Index at the time of
investment.
Portfolio Highlights
Noteworthy company performance spanned a diverse group of sectors,
including:
. Technology holdings SanDisk Corp. (up 192.2%; 1% of net assets),
Broadvision (up 134.8%; 1% of net assets) and CTS Corp. (up 100.7%; 1% of
net assets).
. Credit service provider Advanta Corp. (up 45.3%; 1% of net assets)
. Synthetics manufacturer Wellman Inc. (up 82.0%; 1% of net assets)
Portfolio Outlook
As always, the Fund remains fully invested in stocks. The Fund's sector
weightings and distribution among size categories are targeted to stay
close to those of the Russell 2000 Index, as do exposures to other risk
factors (such as dividend yield). Based on long-term results, our
quantitative process prefers low P/E and low price/book stocks with good
momentum characteristics that exhibit lower volatility in stock price and
earnings, and are favored by research analysts. In summary, we expect the
factors that comprise the quantitative model will help us find the stocks
with the potential to outperform the index.
We thank you for your investment and look forward to your continued
confidence.
Goldman Sachs Quantitative Equity Investment Team
New York
September 3, 1999
9
<PAGE>
FUND BASICS
CORE(SM) Large Cap Value Fund
as of August 31, 1999
Assets Under Management
$303.1 Million
Number of Holdings
189
NASDAQ Symbols
Class A Shares
GCVAX
Class B Shares
GCVBX
Class C Shares
GCVCX
Institutional Shares
GCVIX
Service Shares
GCLSX
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PERFORMANCE REVIEW
- -------------------------------------------------------------------------------------------------------------------
January 31, 1999-August 31, 1999 Fund Total Return (without sales charge)/1/ Russell 1000 Value Index/2/
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 4.31% 4.66%
Class B 3.68 4.66
Class C 3.73 4.66
Institutional 4.35 4.66
Service 4.11 4.66
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
/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 Russell 1000 Value Index (with dividends reinvested) figures
do not reflect any fees or expenses. In addition, investors cannot invest
directly in the Index.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
STANDARDIZED TOTAL RETURNS/3/
- -------------------------------------------------------------------------------------------------------------------
For the period ended 6/30/99 Class A Class B Class C Institutional Service
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months 6.99% 7.67% 11.63% 13.36% 13.10%
Since Inception 6.87 7.67 11.63 13.36 13.10
(12/31/98)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
/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.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 8/31/99
- -------------------------------------------------------------------------------------------------------------------
Holding % of Total Net Assets Line of Business
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Exxon Corp. 4.4% Energy Resources
AT&T Corp. 2.8 Telephone
American International Group, Inc. 2.5 Property Insurance
BankAmerica Corp. 2.2 Banks
Chevron Corp. 2.2 Energy Resources
Chase Manhattan Corp. 2.2 Banks
Citigroup, Inc. 2.1 Banks
International Business Machines, Inc. 1.8 Computer Hardware
GTE Corp. 1.6 Telephone
Mobil Corp. 1.5 Energy Resources
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
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 their absence, performance would be reduced.
10
<PAGE>
PERFORMANCE OVERVIEW
CORE Large Cap Value Fund
Dear Shareholder,
We are pleased to report on the performance of the Goldman Sachs CORE Large Cap
Value 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 ended August 31, 1999, the Fund's Class A, B, C,
Institutional and Service shares generated cumulative total returns, without
sales charges, of 4.31%, 3.68%, 3.73%, 4.35% and 4.11%, respectively. These
figures compare to the 4.66% cumulative total return of the Fund's
benchmark, the Russell 1000 Value Index.
The CORE strategy is a well-defined investment process that has
historically provided consistent, risk-managed performance. We seek to buy
stocks that are attractively valued and favored by fundamental research
analysts and have experienced good momentum. These themes are considered
relative to the Russell 1000 Value Index. The diversification of our models
typically adds value, because when one theme doesn't work, others usually
do. For example, when momentum stocks underperform, value stocks typically
advance more than average. Portfolios are constructed taking into account
stocks' risk characteristics as well as their expected returns.
We experienced dramatic shifts in investor sentiment during the period
under review. In the first quarter of the year the stock market's rally was
extremely narrow, limited mostly to a few very large growth companies and
the technology sector. Early in the second quarter, investors rotated assets
into value-oriented, smaller-cap and cyclical issues. However, they were
again favoring large-cap growth by the time the second quarter ended, and
continued to favor large growth until the end of the period under review. In
the first quarter, the Momentum theme of our quantitative process helped us
to select winning stocks, although as the market's preferences shifted,
these results were difficult to maintain.
Portfolio Positioning
The CORE investment process analyzes each stock based upon its Value,
Momentum and Risk characteristics as well as a fundamental Research
assessment. Throughout the period under review, we placed the most emphasis
on the Momentum theme, followed by Value and Research. Stability accounted
for the lowest proportion of a company's expected excess return.
. Early in the period under review, the Stability theme produced the best
returns; unfortunately, that theme carried the lowest weight. Value and
Research worked as well, but Momentum, the most highly emphasized theme,
produced results in the opposite direction of what we would expect. These
return patterns continued into the second calendar quarter, with the
exception of the Stability theme -- more volatile stocks produced better
returns during the reporting period.
. Near the end of the period, the only theme to produce the kind of returns
we would expect within the Value universe was Research.
11
<PAGE>
PERFORMANCE OVERVIEW
The Goldman Sachs
CORE Large Cap Value Fund seeks long-term growth of capital by investing
primarily in a broadly diversified portfolio of equity securities of large cap
U.S. issuers that are selling at low to modest valuations relative to general
market measures.
Portfolio Highlights
Noteworthy company performance spanned a diverse group of sectors,
including:
. Retailers Best Buys Co. (up 55.1%; 1% of net assets) and Tiffany & Co. (up
86.2%; 1% of net assets).
. Technology holding Lexmark International (up 55.9%; 1% of net assets).
Portfolio Outlook
As always, the Fund remains fully invested in stocks. The Fund's sector
weightings and distribution among size categories are targeted to stay
close to those of the Russell 1000 Value Index, as do exposures to other
risk factors (such as dividend yield). Based on long-term results, our
quantitative process prefers low P/E and low price/book stocks with good
momentum characteristics that exhibit lower volatility in stock price and
earnings, and that are favored by research analysts. As such, we maintain
an exposure to securities that display these factors.
We thank you for your investment and look forward to your continued
confidence.
Goldman Sachs Quantitative Equity Investment Team
New York
September 3, 1999
12
<PAGE>
FUND BASICS
CORE(SM) International Equity Fund
as of August 31, 1999
Assets Under Management
$399.8 Million
Number of Holdings
293
NASDAQ SYMBOLS
Class A Shares
GCIAX
Class B Shares
GCIBX
Class C Shares
GCICX
Institutional Shares
GCIIX
Service Shares
GCISX
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
PERFORMANCE REVIEW
- ---------------------------------------------------------------------------------------------------------
January 31, 1999-August 31, 1999 Fund Total Return (without sales charge)/1/ MSCI Gross EAFE Index/2/
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 8.92% 7.93%
Class B 8.64 7.93
Class C 8.63 7.93
Institutional 9.34 7.93
Service 9.08 7.93
- ---------------------------------------------------------------------------------------------------------
</TABLE>
/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) Gross Europe,
Australasia, Far East (EAFE) Index is a market capitalization weighted
composite of securities in 21 developed markets, including Australia,
Austria, Belgium, Denmark, Finland, Germany, Hong Kong, Ireland, Italy,
Japan and the United Kingdom. Total returns are calculated without
dividends reinvested. Investors cannot invest directly in the Index. The
Index figures do not reflect any fees or expenses.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
STANDARDIZED TOTAL RETURNS/3/
- ---------------------------------------------------------------------------------------------------------
For the period ended 6/30/99 Class A Class B Class C Institutional Service
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months 0.38% 1.04% 4.94% 6.58% 6.30%
One Year 0.23 0.62 4.51 6.79 6.27
Since Inception 0.15 0.69 2.79 3.87 3.40
(8/15/97)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
/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.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 8/31/99
- ---------------------------------------------------------------------------------------------------------
% of Total
Holding Net Assets Country Line of Business
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bank of Tokyo Mitsubishi 1.9% Japan Banks
Nokia AB Oyj Series A 1.8 Finland Telecommunication
Daimler Chrysler AG 1.7 Germany Auto
ENI SpA 1.6 Italy Energy Resources
BP Amoco PLC 1.6 Britain Energy Resources
Toyota Motor Corp. 1.6 Japan Auto
British Telecom PLC 1.5 Britain Telecommunication
France Telecom 1.4 France Telecommunication
Telefonica de Espana SA 1.4 Spain Telecommunication
Nippon Telephone & Telegraph Corp. 1.3 Japan Telecommunication
- ---------------------------------------------------------------------------------------------------------
</TABLE>
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 their absence, performance would be reduced.
13
<PAGE>
PERFORMANCE OVERVIEW
CORE International Equity Fund
Dear Shareholder,
We are pleased to report on the performance of the Goldman Sachs CORE
International 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 ended August 31, 1999, the Fund's Class A,
B, C, Institutional and Service shares generated cumulative total
returns, without sales charges, of 8.92%, 8.64%, 8.63%, 9.34% and 9.08%,
respectively. These figures compare favorably to the 7.93% cumulative
total return of the Fund's benchmark, the Morgan Stanley Capital
International (MSCI) Gross Europe, Australia, Far East (EAFE) Index.
The CORE strategy is designed to add value at both the country and
security level by focusing on three investment strategies -- relative
Value, Momentum and Risk. Each strategy is based on sound economic
reasoning and then validated through rigorous empirical research. These
strategies are combined to form views on the countries and stocks in our
investment universe. Our approach seeks to identify attractive equity
markets, and attractive stocks within those markets, while managing the
amount of risk relative to a specified benchmark. The goal of our
portfolio construction process is to maximize exposure to our model's
return forecasts while mitigating unintended active risks.
Regional Allocations
Country allocations accounted for about two-thirds of the Fund's
outperformance during the period. Both Finland and Singapore were
overweighted, benefiting the Fund as Finland rose substantially in U.S.
dollar terms versus the MSCI Gross EAFE index. An underweight position
in the Netherlands also helped performance, as the Dutch market
underperformed the index during the reporting period.
Sector Allocations
In general, the Fund's sector exposure approximated that of its
benchmark, the MSCI Gross EAFE Index. Slight differences in weightings
are a result of the Fund's bottom-up stock selection process, rather
than any economic forecast for specific sectors.
Portfolio Highlights
During the period, relative value strategies experienced strong ability
to distinguish outperforming individual equities globally, while
momentum was not rewarded. The portfolio was helped by stock selections
in Italy, Spain and the Netherlands. Being overweight Telecom Italia and
Montedison in Italy, and Telefonica and Repsol in Spain, particularly
boosted portfolio performance.
14
<PAGE>
PERFORMANCE OVERVIEW
The Goldman Sachs CORE International Equity Fund seeks long-term capital
appreciation, primarily through equity securities of large-cap companies that
are organized or whose securities are principally traded outside the United
States.
- --------------------------------------------------------------------------------
Core International Investment Process
- --------------------------------------------------------------------------------
1 Forecast Returns
. Countries, currencies and individual stocks.
. Common investment themes (Value, Momentum and Risk).
2 Construct Efficient Portfolios
. Maximize expected return for a given level of risk.
. Determine optimal country weights using equity market and currency return
forecasts.
. Construct a portfolio using stock return forecasts and optimal country
weights.
. Mirror benchmark exposures to common risk factors (style and industries).
3 Monitor Holdings and Performance
. Continually review return forecasts and portfolio risk.
. Adjust positions as needed.
. Verify sources of value added.
Portfolio Outlook
As always, the Fund remains substantially invested in stocks, and our sector and
capitalization weightings are targeted to stay relatively close to that of the
MSCI Gross EAFE index. Based on our investment strategy, we will continue to
emphasize a diversified portfolio of stocks with strong value and momentum
characteristics.
We thank you for your investment and look forward to your continued confidence.
Goldman Sachs Quantitative Equity Investment Team
New York
September 3, 1999
15
<PAGE>
GOLDMAN SACHS CORE EQUITY FUNDS
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.
16
<PAGE>
GOLDMAN SACHS CORE U.S. 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%) in Class A shares on
May 24, 1991 (commencement of operations) in the Goldman Sachs CORE U.S. Eq-
uity Fund. For comparative purposes, the performance of the Fund's benchmark
(the Standard and Poor's 500 Index ("S&P 500 Index")) is shown. This perfor-
mance data represents past performance and should not be considered indica-
tive 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, Institutional and Service shares will vary from Class A
due to differences in fees and loads.
CORE U.S. Equity Fund's Lifetime Performance
Growth of a $10,000 Investment, Distributions Reinvested May 24, 1991 to
August 31, 1999.
[LINE GRAPH APPEARS HERE]
Core US Equity
S&P 500 Index Class A-Core US Equity
5/24/91 10,000 9,450
MAY 10,377 9,626
JUNE 9,902 9,099
Jul-91 10,363 9,586
AUG 10,609 9,860
SEPT 10,431 9,726
OCT 10,571 9,586
NOV 10,145 9,273
DEC 11,306 10,384
Jan-92 11,095 10,116
FEB 11,239 10,237
MAR 11,020 9,894
APR 11,343 10,069
MAY 11,399 10,055
JUNE 11,229 9,632
Jul-92 11,688 9,847
AUG 11,449 9,625
SEPT 11,583 9,773
OCT 11,623 9,827
NOV 12,019 10,277
DEC 12,167 10,381
Jan-93 12,268 10,551
FEB 12,436 10,606
MAR 12,698 10,960
APR 12,391 10,462
MAY 12,722 10,653
JUNE 12,760 10,824
Jul-93 12,708 10,701
AUG 13,191 11,103
SEPT 13,089 11,180
OCT 13,360 11,517
NOV 13,233 11,306
DEC 13,393 11,705
Jan-94 13,848 12,147
FEB 13,472 11,979
MAR 12,885 11,438
APR 13,050 11,735
MAY 13,264 11,720
JUNE 12,939 11,461
Jul-94 13,364 11,933
AUG 13,912 12,315
SEPT 13,572 11,969
OCT 13,878 12,227
NOV 13,372 11,734
DEC 13,570 11,857
Jan-95 13,922 12,013
FEB 14,465 12,465
MAR 14,893 12,811
APR 15,331 13,312
MAY 15,944 13,855
JUNE 16,314 14,266
Jul-95 16,855 14,833
AUG 16,898 14,883
SEPT 17,611 15,474
OCT 17,547 15,358
NOV 18,318 15,878
DEC 18,671 16,035
Jan-96 19,306 16,654
FEB 19,486 16,933
MAR 19,673 17,111
APR 19,962 17,314
MAY 20,477 17,704
JUNE 20,555 17,746
Jul-96 19,646 16,882
AUG 20,061 17,179
SEP 21,190 17,973
OCT 21,774 18,544
NOV 23,420 19,865
DEC 22,956 19,462
Jan-97 24,391 20,620
FEB 24,582 20,682
MAR 23,572 19,904
APR 24,977 21,053
MAY 26,498 22,203
JUNE 27,685 23,220
Jul-97 29,889 25,174
AUG 28,215 23,971
SEP 29,761 25,237
OCT 28,767 24,239
NOV 30,099 25,077
DEC 30,616 25,651
Jan-98 30,956 25,767
FEB 33,188 27,715
MAR 34,887 29,265
APR 35,240 29,556
MAY 34,634 29,042
JUNE 36,040 30,021
Jul-98 35,654 29,294
AUG 30,499 24,410
SEP 32,454 25,610
OCT 35,092 27,364
NOV 37,219 29,109
DEC 39,362 31,101
Jan-99 41,008 32,697
FEB 39,732 31,725
MAR 41,322 33,232
APR 42,921 34,283
MAY 41,908 33,401
JUNE 44,213 35,155
Jul-99 42,833 34,233
AUG 42,619 33,916
<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 May 24,
1991)
Excluding sales charges 16.68% 22.45% 38.94% 3.73%
Including sales charges 15.89% 21.07% 31.28% -1.98%
-----------------------------------------------------------------------------
Class B (commenced May 1, 1996)
Excluding contingent
deferred sales charges 21.60% n/a 37.90% 3.26%
Including contingent
deferred sales charges 20.93% n/a 32.79% -1.74%
-----------------------------------------------------------------------------
Class C (commenced August 15, 1997)
Excluding contingent
deferred sales charges 16.48% n/a 37.89% 3.27%
Including contingent
deferred sales charges 16.48% n/a 36.87% 2.27%
-----------------------------------------------------------------------------
Institutional Class (com-
menced June 15, 1995) 24.28% n/a 39.54% 3.97%
-----------------------------------------------------------------------------
Service Class (commenced
June 7, 1996) 22.12% n/a 38.81% 3.65%
-----------------------------------------------------------------------------
</TABLE>
17
<PAGE>
GOLDMAN SACHS CORE U.S. EQUITY FUND
Statement of Investments
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 99.6%
Airlines - 0.3%
33,100 AMR Corp.* $ 1,940,488
36,400 Delta Air Lines, Inc. 1,849,575
--------------
3,790,063
---------------------------------------------------------------
Alcohol - 0.4%
91,700 The Seagram Company Ltd. 4,865,831
---------------------------------------------------------------
Apparel - 0.1%
23,700 Nike, Inc. Class B 1,096,125
---------------------------------------------------------------
Banks - 6.0%
167,762 BankAmerica Corp. 10,149,601
61,900 Chase Manhattan Corp. 5,180,256
395,450 Citigroup, Inc. 17,572,809
22,400 Comerica, Inc. 1,166,200
19,800 Fifth Third Bancorp 1,311,750
173,100 Firstar Corp. 4,641,244
248,600 Fleet Financial Group, Inc. 9,897,387
169,800 Mellon Bank Corp. 5,667,075
91,600 PNC Bank Corp. 4,791,825
73,700 Suntrust Banks, Inc. 4,739,831
82,900 U.S. Bancorp 2,559,538
126,600 Wells Fargo & Co. 5,040,263
--------------
72,717,779
---------------------------------------------------------------
Chemical - 1.6%
43,700 Aptargroup, Inc. 1,125,275
122,000 Dow Chemicals Co. 13,862,250
52,400 PPG Industries, Inc. 3,147,275
58,500 Solutia, Inc. 1,170,000
--------------
19,304,800
---------------------------------------------------------------
Clothing - 0.1%
44,700 Intimate Brands, Inc. 1,723,744
---------------------------------------------------------------
Computer Hardware - 9.5%
92,800 Apple Computer, Inc.* 6,055,200
313,300 Cisco Systems, Inc.* 21,245,656
27,400 Dell Computer Corp.* 1,337,462
101,800 EMC Corp.* 6,108,000
107,000 Hewlett-Packard Co. 11,275,125
300,300 International Business Machines, Inc. 37,406,119
177,100 Lexmark International Group, Inc.* 13,946,625
68,800 Sun Microsystems, Inc.* 5,469,600
30,800 Tech Data Corp.* 1,141,525
240,800 Xerox Corp. 11,498,200
--------------
115,483,512
---------------------------------------------------------------
Computer Software - 6.0%
700,400 Microsoft Corp.* 64,830,775
209,400 Novell, Inc.* 4,960,163
33,300 Oracle Corp.* 1,215,450
43,300 Rational Software Corp.* 1,171,806
29,300 Unisys Corp.* 1,259,900
--------------
73,438,094
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Consumer Durables - 0.2%
31,700 Whirlpool Corp. $ 2,240,794
-------------------------------------------------------------
Defense/Aerospace - 1.9%
234,800 Allied Signal, Inc. 14,381,500
145,200 General Dynamics Corp. 9,147,600
--------------
23,529,100
-------------------------------------------------------------
Department Store - 2.1%
184,300 Dayton Hudson Corp. 10,689,400
43,600 Federated Department Stores, Inc.* 2,005,600
31,000 The May Department Stores Co. 1,210,938
272,600 Wal-Mart Stores, Inc. 12,079,587
--------------
25,985,525
-------------------------------------------------------------
Drugs - 7.2%
75,100 Allergan, Inc. 7,500,612
207,100 Amgen, Inc.* 17,228,131
103,500 Biogen, Inc.* 7,943,625
307,600 Bristol-Myers Squibb Co. 21,647,350
149,300 Merck & Co. 10,031,094
346,500 Pfizer, Inc. 13,080,375
70,800 Pharmacia & Upjohn, Inc. 3,699,300
123,200 Schering-Plough Corp. 6,475,700
--------------
87,606,187
-------------------------------------------------------------
Electrical Equipment - 3.6%
27,700 Danaher Corp. 1,627,375
35,300 Eaton Corp. 3,459,400
33,200 Johnson Controls, Inc. 2,270,050
148,900 Lucent Technologies, Inc. 9,538,906
21,400 PE Corp.--PE Biosystems Group 1,472,587
85,100 QUALCOMM, Inc.* 16,355,156
217,300 Qwest Communications International,
Inc.* 6,247,375
18,000 Solectron Corp.* 1,408,500
61,800 Vishay Intertechnology, Inc.* 1,324,838
--------------
43,704,187
-------------------------------------------------------------
Electrical Utilities - 2.5%
33,300 Ameren Corp. 1,334,081
29,200 Consolidated Edison, Inc. 1,284,800
29,400 Dominion Resources, Inc. 1,359,750
59,700 Duke Energy Co. 3,432,750
146,300 Edison International, Inc. 3,712,362
81,500 FPL Group, Inc. 4,401,000
32,700 GPU, Inc. 1,115,888
53,400 PECO Energy Co. 2,169,375
123,100 Public Service Enterprise 5,047,100
98,300 Texas Utilities Co. 3,975,006
60,300 Unicom Corp. 2,329,088
--------------
30,161,200
-------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
GOLDMAN SACHS CORE U.S. EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Energy Resources - 6.4%
423,400 Exxon Corp. $ 33,395,675
175,100 Mobil Corp. 17,925,863
433,300 Royal Dutch Petroleum Co. ADR 26,810,437
--------------
78,131,975
---------------------------------------------------------------
Entertainment - 1.0%
130,400 Carnival Cruise Lines Corp. 5,827,250
31,700 Royal Caribbean Cruise Lines 1,483,956
113,400 Viacom, Inc. Class B* 4,769,888
--------------
12,081,094
---------------------------------------------------------------
Financial Services - 2.1%
157,770 Associates First Capital Corp. 5,413,483
44,700 Federal Home Loan Mortgage Corp. 2,302,050
19,400 Federal National Mortgage Association 1,205,225
21,500 H&R Block, Inc. 1,195,938
51,400 Marsh & McLennan Co. 3,742,562
145,600 Providian Financial Corp. 11,302,200
--------------
25,161,458
---------------------------------------------------------------
Food & Beverage - 4.8%
235,725 Archer Daniels Midland Co. 3,064,425
63,700 Coca-Cola Co. 3,810,056
103,700 ConAgra, Inc. 2,540,650
46,800 General Mills, Inc. 3,919,500
714,300 Nabisco Group Holdings Corp. 12,678,825
214,500 Nabisco Holdings Corp. 8,432,531
403,900 Pepsico, Inc. 13,783,087
69,700 Supervalu, Inc. 1,568,250
122,492 Unilever NV 8,436,637
--------------
58,233,961
---------------------------------------------------------------
Forest - 0.7%
87,000 Georgia-Pacific Corp. 3,599,625
35,800 International Paper Co. 1,684,838
58,300 Weyerhaeuser Co. 3,279,375
--------------
8,563,838
---------------------------------------------------------------
Gas Utilities - 0.1%
45,000 Keyspan Corp. 1,327,500
---------------------------------------------------------------
Gold - 0.4%
247,400 Barrick Gold Corp. 4,793,375
---------------------------------------------------------------
Grocery - 0.8%
104,600 Food Lion, Inc. 826,994
278,800 Kroger Co.* 6,447,250
42,934 Safeway, Inc.* 1,999,114
--------------
9,273,358
---------------------------------------------------------------
Heavy Electrical - 3.5%
39,900 Emerson Electric Co. 2,498,738
357,300 General Electric Co. 40,129,256
--------------
42,627,994
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Home Products - 1.6%
97,200 Fortune Brands, Inc. $ 3,645,000
160,800 Procter & Gamble Co. 15,959,400
--------------
19,604,400
---------------------------------------------------------
Hotel - 0.3%
106,500 Marriott International, Inc. 3,647,625
---------------------------------------------------------
Industrial Parts - 1.2%
110,000 Caterpillar, Inc. 6,228,750
59,100 Ingersoll-Rand Co. 3,760,238
69,800 United Technologies Corp. 4,615,525
--------------
14,604,513
---------------------------------------------------------
Industrial Services - 0.5%
139,100 Hertz Corp. 5,607,469
---------------------------------------------------------
Information Services - 1.1%
108,200 America Online, Inc.* 9,880,013
84,900 First Data Corp. 3,735,600
--------------
13,615,613
---------------------------------------------------------
Leisure - 1.4%
203,500 Eastman Kodak Co. 14,944,531
77,400 Hasbro, Inc. 1,891,463
--------------
16,835,994
---------------------------------------------------------
Life Insurance - 1.5%
44,500 Aetna, Inc. 3,459,875
32,900 AFLAC, Inc. 1,478,444
16,900 American General Corp. 1,199,900
122,500 Cigna Corp. 11,002,031
25,200 Hartford Life, Inc. 1,094,625
--------------
18,234,875
---------------------------------------------------------
Media - 1.9%
33,900 Cox Communications, Inc.* 1,260,656
95,300 Fox Entertainment Group, Inc.* 2,197,856
219,900 General Motors Corp. Class H* 11,324,850
118,400 Infinity Broadcasting Corp.* 3,204,200
21,400 Time Warner, Inc. 1,269,288
58,400 Univision Communications, Inc.* 4,307,000
--------------
23,563,850
---------------------------------------------------------
Medical Products - 4.0%
130,600 Abbott Laboratories 5,664,775
40,700 Bausch & Lomb, Inc. 2,688,744
29,300 Boston Scientific Corp.* 994,369
179,900 Johnson & Johnson 18,394,775
213,893 Tyco International Ltd. 21,670,034
--------------
49,412,697
---------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
GOLDMAN SACHS CORE U.S. EQUITY FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Medical Providers - 1.1%
200,600 Beverly Enterprises, Inc.* $ 1,003,000
120,100 Columbia/HCA Healthcare Corp. 2,957,463
1 Lifepoint Hospitals, Inc.* 7
79,300 Tenet Healthcare Corp.* 1,382,794
1 Triad Hospitals, Inc.* 11
82,100 United Healthcare Corp. 4,992,706
42,900 Wellpoint Health Networks, Inc. 3,126,337
--------------
13,462,318
-----------------------------------------------------------------
Mining - 0.4%
39,800 Alcoa, Inc. 2,569,588
150,000 Bethlehem Steel Corp.* 1,153,125
56,700 Inco Ltd. 1,162,350
--------------
4,885,063
-----------------------------------------------------------------
Motor Vehicle - 1.4%
246,900 Ford Motor Co. 12,869,662
76,800 Navistar International Corp.* 3,734,400
--------------
16,604,062
-----------------------------------------------------------------
Oil Services - 0.6%
108,100 Schlumberger Ltd. 7,215,675
-----------------------------------------------------------------
Property Insurance - 4.1%
212,612 Allstate Corp. 6,976,331
302,293 American International Group, Inc. 28,018,783
59,100 Hartford Financial Services Group, Inc. 2,685,356
18,800 Jefferson-Pilot Corp. 1,254,900
26,800 Loews Corp. 2,103,800
244,700 Travelers Property & Casualty Corp. 8,686,850
--------------
49,726,020
-----------------------------------------------------------------
Publishing - 0.2%
22,000 Gannett Co. 1,494,625
23,600 Knight Ridder, Inc. 1,272,925
--------------
2,767,550
-----------------------------------------------------------------
Railroads - 0.4%
177,000 Burlington Northern Santa Fe Corp. 5,133,000
-----------------------------------------------------------------
Restaurants - 0.2%
59,410 Tricon Global Restaurants, Inc.* 2,413,531
-----------------------------------------------------------------
Security/Asset Management - 1.5%
122,200 Charles Schwab Corp. 4,826,900
105,900 Equitable Companies, Inc. 6,539,325
81,100 Morgan Stanley Dean Witter & Co. 6,959,394
--------------
18,325,619
-----------------------------------------------------------------
Semiconductors - 2.9%
341,400 Intel Corp. 28,058,812
51,400 Texas Instruments, Inc. 4,218,013
38,300 Xilinx, Inc.* 2,678,606
--------------
34,955,431
-----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Specialty Retail - 3.4%
164,800 Best Buy Co., Inc.* $ 11,577,200
169,400 Circuit City Stores, Inc. 7,284,200
111,900 Lowes Co., Inc. 5,063,475
112,400 Tandy Corp. 5,310,900
208,500 The Home Depot, Inc. 12,744,562
--------------
41,980,337
-------------------------------------------------------
Telephone - 6.5%
283,300 Ameritech Corp. 17,883,312
591,675 AT&T Corp. 26,625,375
96,800 BellSouth Corp. 4,380,200
32,500 Centurytel, Inc. 1,277,656
170,500 MCI Worldcom, Inc.* 12,915,375
78,000 SBC Communications, Inc. 3,744,000
284,700 Sprint Corp. 12,633,563
--------------
79,459,481
-------------------------------------------------------
Thrifts - 0.1%
12,800 Golden West Financial Corp. 1,162,400
-------------------------------------------------------
Tobacco - 0.8%
228,300 Philip Morris Companies, Inc. 8,546,981
43,300 Universal Corp. 1,228,638
--------------
9,775,619
-------------------------------------------------------
Wireless - 1.2%
190,400 Alltel Corp. 12,875,800
34,500 United States Cellular Corp.* 1,942,781
--------------
14,818,581
-------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $954,461,619) $1,213,653,217
-------------------------------------------------------
TOTAL INVESTMENTS
(Cost $954,461,619) $1,213,653,217
-------------------------------------------------------
</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.
20
<PAGE>
GOLDMAN SACHS CORE LARGE CAP 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% for Class A and applica-
ble maximum contingent deferred sales charges of 5.0% declining to 0% after
six years for Class B and at NAV for the Institutional and Service classes)
on May 1, 1997 (commencement of operations) in the Goldman Sachs CORE Large
Cap Growth Fund. For comparative purposes, the performance of the Fund's
benchmark (Russell 1000 Growth Index) is shown. This performance data repre-
sents past performance and should not be considered indicative of future per-
formance 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 C shares
will vary from Class A, Class B, Institutional and Service shares due to dif-
ferences in fees and loads.
CORE Large Cap Growth Fund's Lifetime Performance
Growth of a $10,000 Investment, Distributions Reinvested May 1, 1997 to
August 31, 1999.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Russell 1000 Growth Class A Class B Institutional Service
<S> <C> <C> <C> <C> <C> <C>
5/1/97 10,000 9,450 10,000 10,000 10,000
MAY 10,722 9,972 10,540 10,550 10,550
JUNE 11,151 10,425 11,020 11,040 11,030
Jul-97 12,137 11,295 11,940 11,950 11,940
AUG 11,427 10,983 11,610 11,630 11,610
SEP 11,989 11,474 12,120 12,150 12,120
OCT 11,545 11,096 11,700 11,750 11,720
NOV 12,036 11,342 11,960 12,020 11,970
DEC 12,171 11,485 12,109 12,172 12,129
Jan-98 12,535 11,700 12,326 12,389 12,356
FEB 13,477 12,717 13,391 13,465 13,421
MAR 14,015 13,313 14,011 14,097 14,042
APR 14,208 13,538 14,249 14,345 14,290
MAY 13,805 13,176 13,846 13,962 13,897
JUNE 14,651 13,870 14,570 14,697 14,621
Jul-98 14,554 13,636 14,321 14,459 14,383
AUG 12,370 11,251 11,809 11,933 11,860
SEP 13,320 11,936 12,513 12,659 12,574
OCT 14,391 12,689 13,299 13,466 13,381
NOV 15,486 13,676 14,323 14,512 14,415
DEC 16,883 14,976 15,667 15,900 15,783
Jan-99 17,874 15,807 16,525 16,791 16,662
FEB 17,057 15,054 15,729 15,994 15,866
MAR 17,956 15,934 16,649 16,936 16,797
APR 17,979 16,081 16,784 17,102 16,941
MAY 17,427 15,680 16,360 16,688 16,528
JUNE 18,647 16,638 17,353 17,713 17,531
Jul-99 18,054 16,237 16,918 17,289 17,107
AUG 18,348 16,638 17,011 17,713 17,531
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return through
August 31, 1999 Since Inception One Year Seven Months
<S> <C> <C> <C>
Class A (commenced May 1, 1997)
Excluding sales charges 27.38% 47.88% 5.26%
Including sales charges 24.34% 39.75% -0.53%
-----------------------------------------------------------------------------
Class B (commenced May 1, 1997)
Excluding contingent deferred sales
charges 26.50% 46.69% 4.82%
Including contingent deferred sales
charges 25.53% 41.69% -0.18%
-----------------------------------------------------------------------------
Class C (commenced August 15, 1997)
Excluding contingent deferred sales
charges 20.64% 46.81% 4.75%
Including contingent deferred sales
charges 20.64% 45.81% 3.75%
-----------------------------------------------------------------------------
Institutional Class (commenced May
1, 1997) 27.72% 48.43% 5.49%
-----------------------------------------------------------------------------
Service Class (commenced May 1,
1997) 27.15% 47.82% 5.21%
-----------------------------------------------------------------------------
</TABLE>
21
<PAGE>
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
Statement of Investments
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - 98.1%
<C> <S> <C>
Airlines - 0.0%
24,400 Southwest Airlines Co. $ 407,175
-------------------------------------------------------------
Alcohol - 0.7%
29,500 Anheuser-Busch Companies, Inc. 2,271,500
67,500 The Seagram Company Ltd. 3,581,719
------------
5,853,219
-------------------------------------------------------------
Apparel - 0.6%
115,000 Nike, Inc. Class B 5,318,750
-------------------------------------------------------------
Banks - 0.1%
37,500 Firstar Corp. 1,005,469
-------------------------------------------------------------
Chemical - 1.0%
9,600 Avery Dennison Corp. 526,800
70,500 Dow Chemicals Co. 8,010,563
------------
8,537,363
-------------------------------------------------------------
Clothing - 0.3%
53,800 Ann Taylor Stores Corp.* 1,782,125
21,000 Footstar, Inc.* 682,500
------------
2,464,625
-------------------------------------------------------------
Computer Hardware - 13.6%
69,900 Apple Computer, Inc.* 4,560,975
600,800 Cisco Systems, Inc.* 40,741,750
7,100 Electronics for Imaging, Inc.* 416,237
142,800 EMC Corp.* 8,568,000
188,400 Hewlett-Packard Co. 19,852,650
118,000 International Business Machines, Inc. 14,698,375
156,400 Lexmark International Group, Inc.* 12,316,500
127,000 Sun Microsystems, Inc.* 10,096,500
105,500 Tech Data Corp.* 3,910,094
67,300 Xerox Corp. 3,213,575
------------
118,374,656
-------------------------------------------------------------
Computer Software - 9.9%
63,700 Adobe Systems, Inc. 6,346,112
625,700 Microsoft Corp.* 57,916,356
181,700 Novell, Inc.* 4,304,019
365,000 Oracle Corp.* 13,322,500
55,100 Sabre Group Holdings, Inc.* 3,085,600
22,700 Unisys Corp.* 976,100
------------
85,950,687
-------------------------------------------------------------
Department Store - 1.9%
94,300 Dayton Hudson Corp. 5,469,400
244,200 Wal-Mart Stores, Inc. 10,821,113
------------
16,290,513
-------------------------------------------------------------
Drugs - 11.4%
49,200 Allergan, Inc. 4,913,850
400,000 Amgen, Inc.* 33,275,000
2,500 Andrx Corp.* 179,688
39,100 Biogen, Inc.* 3,000,925
279,400 Bristol-Myers Squibb Co. 19,662,775
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Drugs - (continued)
17,700 Genzyme Corp.* $ 998,944
20,000 Immunex Corp.* 1,346,250
158,200 Merck & Co. 10,629,062
496,800 Pfizer, Inc. 18,754,200
122,100 Schering-Plough Corp. 6,417,881
------------
99,178,575
-----------------------------------------------------------------
Electrical Equipment - 7.2%
7,000 Danaher Corp. 411,250
218,000 General Instrument Corp.* 10,722,875
10,900 Johnson Controls, Inc. 745,288
272,900 Lucent Technologies, Inc. 17,482,656
43,800 PE Corp.--PE Biosystems Group 3,013,987
124,800 QUALCOMM, Inc.* 23,985,000
186,500 Qwest Communications International, Inc.* 5,361,875
12,400 Solectron Corp.* 970,300
3,300 Teradyne, Inc.* 224,606
------------
62,917,837
-----------------------------------------------------------------
Electrical Utilities - 0.3%
30,500 Calpine Corp.* 2,764,063
-----------------------------------------------------------------
Energy Resources - 0.3%
30,600 Exxon Corp. 2,413,575
-----------------------------------------------------------------
Entertainment - 0.5%
109,800 Viacom, Inc. Class B* 4,618,463
-----------------------------------------------------------------
Environmental Services - 0.2%
20,300 Allied Waste Industries, Inc.* 258,825
117,800 Republic Services, Inc.* 1,281,075
------------
1,539,900
-----------------------------------------------------------------
Financial Services - 1.0%
10,400 Marsh & McLennan Co. 757,250
97,450 Providian Financial Corp. 7,564,556
------------
8,321,806
-----------------------------------------------------------------
Food & Beverage - 4.9%
228,900 Coca-Cola Co. 13,691,081
17,500 Coca-Cola Enterprises, Inc. 497,656
59,600 ConAgra, Inc. 1,460,200
19,400 General Mills, Inc. 1,624,750
34,800 H.J. Heinz Co. 1,624,725
25,700 Hormel Foods Corp. 1,034,425
275,600 IBP, Inc. 6,321,575
13,400 Keebler Foods Co.* 399,488
310,700 Nabisco Group Holdings Corp. 5,514,925
64,300 Nabisco Holdings Corp. 2,527,794
83,100 Pepsico, Inc. 2,835,787
9,300 Quaker Oats Co. 621,356
60,803 Unilever NV 4,187,807
------------
42,341,569
-----------------------------------------------------------------
Gold - 0.2%
91,600 Barrick Gold Corp. 1,774,750
-----------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Grocery - 1.2%
201,200 Kroger Co.* $ 4,652,750
116,900 Safeway, Inc.* 5,443,156
------------
10,095,906
------------------------------------------------------------
Heavy Electrical - 5.3%
12,500 Emerson Electric Co. 782,813
406,500 General Electric Co. 45,655,031
------------
46,437,844
------------------------------------------------------------
Home Products - 2.8%
86,800 Clorox Co. 3,927,700
11,200 Fortune Brands, Inc. 420,000
199,700 Procter & Gamble Co. 19,820,225
------------
24,167,925
------------------------------------------------------------
Hotel - 0.3%
78,900 Marriott International, Inc. 2,702,325
4,530 MGM Grand, Inc.* 222,536
------------
2,924,861
------------------------------------------------------------
Industrial Parts - 0.3%
23,200 Caterpillar, Inc. 1,313,700
25,800 United Technologies Corp. 1,706,025
------------
3,019,725
------------------------------------------------------------
Industrial Services - 0.9%
11,300 Cintas Corp. 580,537
179,500 Hertz Corp. 7,236,094
------------
7,816,631
------------------------------------------------------------
Information Services - 4.0%
66,400 America Online, Inc.* 6,063,150
43,000 Automatic Data Processing, Inc. 1,690,437
44,800 Computer Sciences Corp. 3,099,600
25,300 Electronic Data Systems 1,419,963
148,200 Exodus Communications, Inc.* 11,911,575
133,900 First Data Corp. 5,891,600
26,500 Interpublic Group of Companies, Inc. 1,050,063
33,100 Omnicom Group, Inc. 2,494,912
6,000 Sotheby's Holdings, Inc. 174,750
5,600 VeriSign, Inc.* 606,550
------------
34,402,600
------------------------------------------------------------
Leisure - 2.6%
313,200 Eastman Kodak Co. 23,000,625
------------------------------------------------------------
Media - 0.8%
31,800 Fox Entertainment Group, Inc.* 733,388
110,200 General Motors Corp. Class H* 5,675,300
5,400 Univision Communications, Inc.* 398,250
------------
6,806,938
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Medical Products - 5.0%
146,500 Abbott Laboratories $ 6,354,437
28,200 Bausch & Lomb, Inc. 1,862,963
220,200 Johnson & Johnson 22,515,450
45,200 Medtronic, Inc. 3,536,900
90,200 Tyco International Ltd. 9,138,387
------------
43,408,137
-----------------------------------------------------------
Medical Providers - 2.3%
88,500 Columbia/HCA Healthcare Corp. 2,179,312
33,100 Healthsouth Corp.* 271,006
26,700 Lincare Holdings, Inc.* 704,213
28,700 Pacificare Health Systems* 1,722,000
59,000 Tenet Healthcare Corp.* 1,028,812
31,900 Trigon Healthcare, Inc.* 1,158,369
177,000 Wellpoint Health Networks, Inc.* 12,898,875
------------
19,962,587
-----------------------------------------------------------
Motor Vehicle - 1.4%
11,900 Delphi Automative Systems Corp. 223,125
246,400 Navistar International Corp.* 11,981,200
------------
12,204,325
-----------------------------------------------------------
Oil Refining - 0.1%
17,800 Dynegy, Inc. 418,300
9,800 The Coastal Corp. 424,463
------------
842,763
-----------------------------------------------------------
Oil Services - 0.3%
45,100 Schlumberger Ltd. 3,010,425
-----------------------------------------------------------
Property Insurance - 1.6%
136,500 American International Group, Inc. 12,651,844
36,500 Travelers Property & Casualty Corp. 1,295,750
------------
13,947,594
-----------------------------------------------------------
Restaurants - 0.6%
11,400 McDonald's Corp. 471,675
121,200 Tricon Global Restaurants, Inc.* 4,923,750
------------
5,395,425
-----------------------------------------------------------
Security/Asset Management - 2.0%
451,500 Charles Schwab Corp. 17,834,250
-----------------------------------------------------------
Semiconductors - 4.0%
413,600 Intel Corp. 33,992,750
8,000 Texas Instruments, Inc. 656,500
------------
34,649,250
-----------------------------------------------------------
Specialty Retail - 4.1%
112,300 Best Buy Co., Inc.* 7,889,075
119,300 Circuit City Stores, Inc. 5,129,900
131,000 CVS Corp. 5,461,063
10,800 Lowes Co., Inc. 488,700
-----------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Specialty Retail - (continued)
239,500 The Home Depot, Inc. $ 14,639,437
40,200 Tiffany & Co. 2,125,575
------------
35,733,750
------------------------------------------------------
Telephone - 3.0%
7,700 Ameritech Corp. 486,062
162,900 AT&T Corp. 7,330,500
33,700 BCE, Inc. 1,575,475
161,900 MCI Worldcom, Inc.* 12,263,925
66,100 SBC Communications, Inc. 3,172,800
28,000 Sprint Corp. 1,242,500
------------
26,071,262
------------------------------------------------------
Tobacco - 1.1%
256,400 Philip Morris Companies, Inc. 9,598,975
------------------------------------------------------
Truck Freight - 0.1%
28,500 FDX Corp.* 1,209,469
------------------------------------------------------
Wireless - 0.2%
11,000 Alltel Corp. 743,875
5,300 Telephone & Data Systems, Inc. 369,013
13,400 United States Cellular Corp.* 754,587
------------
1,867,475
------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $725,725,430) $854,481,737
------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<C> <S> <C> <C>
Repurchase Agreement - 1.6%
Joint Repurchase Agreement
$13,600,000 5.52% 09/01/1999 $ 13,600,000
-----------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $13,600,000) $ 13,600,000
-----------------------------------------------
TOTAL INVESTMENTS
(Cost $739,325,430) $868,081,737
-----------------------------------------------
</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.
24
<PAGE>
GOLDMAN SACHS CORE SMALL CAP 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% per Class A and applica-
ble maximum 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 August
15, 1997 (commencement of operations) in the Goldman Sachs CORE Small Cap Eq-
uity Fund. For comparative purposes, the performance of the Fund's benchmark
(Russell 2000 Growth Index) is shown. This performance data represents past
performance and should not be considered indicative of future performance
which will fluctuate with changes in market conditions. These performance
fluctuations will cause an investor's shares, when redeemed, to be worth more
or less than their original cost.
CORE Small Cap Equity Fund's Lifetime Performance
Growth of a $10,000 Investment, Distributions Reinvested August 15, 1997 to
August 31, 1999.
[LINE GRAPH APPEARS HERE]
Core Small Cap Equity
Russell 2000
Growth Index Class A Class B Class C Institutional Service
8/15/97 10,000 9,450 10,000 10,000 10,000 10,000
Aug-97 10,284 9,707 10,260 10,260 10,270 10,260
Sep-97 11,037 10,340 10,940 10,940 10,950 10,950
Oct-97 10,552 9,896 10,460 10,460 10,480 10,480
Nov-97 10,484 9,849 10,400 10,410 10,430 10,420
Dec-97 10,667 10,206 10,767 10,767 10,807 10,797
Jan-98 10,499 10,054 10,607 10,617 10,657 10,647
Feb-98 11,274 10,832 11,420 11,430 11,480 11,470
Mar-98 11,852 11,354 11,963 11,973 12,043 12,013
Apr-98 11,917 11,535 12,154 12,154 12,234 12,204
May-98 11,275 10,975 11,551 11,561 11,641 11,611
Jun-98 11,298 11,079 11,661 11,661 11,762 11,722
Jul-98 10,383 10,158 10,677 10,687 10,777 10,747
Aug-98 8,367 8,060 8,467 8,477 8,558 8,528
Sep-98 9,022 8,383 8,809 8,819 8,909 8,869
Oct-98 9,390 8,487 8,909 8,919 9,020 8,980
Nov-98 9,882 9,038 9,482 9,492 9,612 9,562
Dec-98 10,494 9,597 10,054 10,064 10,199 10,143
Jan-99 10,633 9,654 10,115 10,125 10,269 10,214
Feb-99 9,772 8,846 9,261 9,271 9,414 9,359
Mar-99 9,924 8,903 9,311 9,321 9,474 9,409
Apr-99 10,814 9,578 10,014 10,024 10,209 10,133
May-99 10,971 9,702 10,135 10,145 10,330 10,254
Jun-99 11,467 10,177 10,627 10,637 10,843 10,757
Jul-99 11,153 10,101 10,536 10,547 10,763 10,676
Aug-99 10,740 9,721 9,833 10,145 10,370 10,274
<TABLE>
<CAPTION>
Average Annual Total Return through
August 31, 1999 Since Inception One Year Seven Months
<S> <C> <C> <C>
Class A (commenced August 15, 1997)
Excluding sales charges 1.38% 20.60% 0.69%
Including sales charges -1.37% 14.02% -4.84%
-----------------------------------------------------------------------------
Class B (commenced August 15, 1997)
Excluding contingent deferred sales
charges 0.66% 19.69% 0.20%
Including contingent deferred sales
charges -0.82% 14.69% -4.80%
-----------------------------------------------------------------------------
Class C (commenced August 15, 1997)
Excluding contingent deferred sales
charges 0.70% 19.67% 0.20%
Including contingent deferred sales
charges 0.70% 18.67% -0.80%
-----------------------------------------------------------------------------
Institutional Class (commenced August
15, 1997) 1.79% 21.18% 0.98%
-----------------------------------------------------------------------------
Service Class (commenced August 15,
1997) 1.33% 20.48% 0.59%
-----------------------------------------------------------------------------
</TABLE>
25
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
Statement of Investments
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - 99.4%
<C> <S> <C>
Airlines - 1.6%
22,700 Alaska Air Group, Inc.* $ 981,775
18,000 America West Holdings Corp. Class B* 351,000
51,700 Frontier Airlines, Inc.* 649,481
5,600 Midwest Express Holdings, Inc.* 151,200
------------
2,133,456
-----------------------------------------------------------
Apparel - 3.0%
34,200 Brown Group, Inc. 594,225
28,000 K-Swiss, Inc. 878,500
7,000 Kellwood Co. 167,125
5,200 Kenneth Cole Productions, Inc.* 177,775
11,600 Oxford Industries, Inc. 250,850
16,300 Phillips-Van Heusen Corp. 138,550
12,450 Quiksilver, Inc.* 214,763
9,800 Russell Corp. 164,150
18,100 Springs Industries, Inc. 679,881
44,800 Wellman, Inc. 753,200
------------
4,019,019
-----------------------------------------------------------
Banks - 4.5%
19,000 Bancwest Corp. 794,437
24,300 Brookline Bancorp, Inc. 264,263
5,800 Commerce Bancorp, Inc. 249,400
5,900 First Charter Corp. 128,325
17,600 First Commonwealth Financial Corp. 423,500
14,000 Hudson United Bancorp 445,375
12,492 Imperial Bancorp* 212,364
30,600 Independence Community Bank Corp. 378,675
9,100 Independent Bank Corp. 122,850
8,000 Net.B@nk, Inc.* 186,000
14,200 One Valley Bancorp, Inc. 543,150
20,400 Southwest Bancorp of Texas, Inc.* 351,900
12,650 Trustco Bank Corp. 376,338
11,700 United Bankshares, Inc. 300,544
13,500 UST Corp. 410,062
21,300 Western Bancorp 846,675
------------
6,033,858
-----------------------------------------------------------
Chemical - 2.4%
10,700 Aptargroup, Inc. 275,525
5,200 Brady Corp. 156,000
18,100 Dexter Corp. 659,519
12,100 Gencorp, Inc. 260,150
17,100 Geon Co. 510,862
4,700 H.B. Fuller Co. 283,175
24,700 Octel Corp.* 280,963
27,800 Spartech Corp. 773,187
------------
3,199,381
-----------------------------------------------------------
Clothing - 1.2%
31,700 Ann Taylor Stores Corp.* 1,050,062
4,600 Talbots, Inc. 142,313
9,900 The Buckle, Inc.* 167,063
21,500 The Cato Corp. 288,906
------------
1,648,344
-----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Computer Hardware - 3.1%
10,600 Advanced Digital Information Corp.* $ 341,850
13,700 Gerber Scientific, Inc. 279,994
18,800 Imation Corp.* 529,925
20,200 Inacom Corp.* 196,950
4,700 Jack Henry & Associates, Inc. 152,750
37,800 MTI Technology Corp.* 843,412
5,800 Proxim, Inc.* 282,750
18,000 Sandisk Corp.* 1,518,750
------------
4,146,381
------------------------------------------------------------
Computer Software - 7.2%
13,700 Advantage Learning Systems, Inc.* 307,394
11,400 Advent Software, Inc.* 560,025
8,400 AVT Corp.* 237,300
9,100 Broadvision, Inc.* 906,019
19,900 CACI International, Inc.* 447,750
6,900 Clarify, Inc.* 303,600
7,300 Concord Communications, Inc.* 269,416
9,400 Dendrite International, Inc.* 391,275
16,000 Genesys Telecommunication* 468,000
19,600 IMR Global Corp.* 334,425
26,000 Informix Corp.* 189,312
25,500 Mentor Graphics Corp.* 228,703
7,600 Mercury Interactive Corp.* 362,900
21,700 National Computer Systems, Inc. 846,300
23,600 Peregrine Systems, Inc.* 778,800
6,900 Pervasive Software, Inc.* 146,625
30,600 Progress Software Corp.* 937,125
7,400 Project Software & Development, Inc.* 325,137
12,600 Remedy Corp.* 308,700
68,100 Sybase, Inc.* 851,250
8,300 Transaction Systems Architects, Inc.* 244,331
8,100 TSI International Software Ltd.* 153,900
5,200 Visual Networks, Inc.* 215,800
------------
9,814,087
------------------------------------------------------------
Construction - 2.9%
13,400 Comfort Systems USA, Inc.* 189,275
6,450 Elcor Corp. 124,163
10,500 Florida Rock Industrial, Inc. 419,344
10,900 Granite Construction, Inc. 272,500
13,200 Group Maintenance America Corp.* 162,525
16,000 Insituform Technologies, Inc.* 332,000
8,800 Jacobs Engineering Group, Inc.* 290,400
16,300 Kaufman & Broad Home Co. 333,131
9,100 M.D.C. Holdings, Inc. 171,194
18,800 Morrison Knudsen Corp.* 202,100
7,200 NCI Building Systems, Inc.* 131,850
14,400 Pulte Corp. 333,000
16,600 Ryland Group, Inc. 399,437
12,800 TJ International, Inc. 372,800
4,300 U.S. Home Corp.* 129,000
------------
3,862,719
------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Consumer Durables - 0.6%
11,400 Applied Power, Inc. $ 349,125
15,100 La- Z-Boy, Inc. 331,256
5,600 Salton, Inc.* 156,100
------------
836,481
----------------------------------------------------------
Defense/Aerospace - 0.4%
12,700 AAR Corp. 271,463
3,700 Precision Castparts Corp. 131,350
8,500 Triumph Group, Inc.* 210,375
------------
613,188
----------------------------------------------------------
Department Store - 0.6%
27,000 Shopko Stores, Inc.* 772,875
----------------------------------------------------------
Drugs - 6.1%
33,300 Alpharma, Inc. 1,128,037
17,400 Amerisource Health Corp.* 449,138
49,810 Bindley Western Industries, Inc. 834,317
17,500 Cambrex Corp. 470,313
18,800 Chirex, Inc.* 568,700
14,600 Covance, Inc.* 234,513
7,000 Gilead Sciences, Inc.* 545,562
28,000 Herbalife International, Inc. 336,000
9,150 Jones Pharmaceutical, Inc. 247,622
30,100 Millennium Pharmaceutical* 1,774,019
31,284 Priority Healthcare Corp. Class B* 879,862
21,200 Roberts Pharmaceutical Co.* 568,425
4,800 Syncor International Corp.* 172,800
------------
8,209,308
----------------------------------------------------------
Electrical Equipment - 5.9%
12,000 Aavid Thermal Technologies, Inc.* 273,000
15,600 Aeroflex, Inc.* 255,450
12,800 Artesyn Technologies, Inc.* 280,800
12,600 C-Cube Microsystems, Inc.* 350,437
16,200 DII Group, Inc.* 574,087
16,000 Esterline Technologies Corp.* 262,000
63,700 Federal Signal Corp. 1,333,719
8,000 Kemet Corp.* 206,500
13,800 Kimball International, Inc. Class B 266,513
24,800 Methode Electronics, Inc. 446,400
6,900 Oak Industries, Inc.* 216,488
19,300 Park Electrochemical Corp. 560,906
23,800 Pioneer Standard Electronics, Inc. 336,175
6,800 Polycom, Inc.* 248,625
44,000 Sawtek, Inc.* 1,454,750
21,900 Sensormatic Electronics Corp.* 255,956
7,800 Technitrol, Inc. 273,000
8,600 Xircom, Inc.* 342,388
------------
7,937,194
----------------------------------------------------------
Electrical Utilities - 2.1%
19,000 Avista Corp. 327,750
23,700 CMP Group, Inc. 629,531
4,800 Eastern Utilities Assoc. 143,700
----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Electrical Utilities - (continued)
13,400 Empire District Electric Co. $ 341,700
16,900 Hawaiian Electric Industries, Inc. 601,006
15,700 Public Service Company of New Mexico 295,356
1,458 Sierra Pacific Resources 35,539
13,100 TNP Enterprises, Inc. 489,613
------------
2,864,195
---------------------------------------------------------------
Energy Resources - 1.1%
13,600 Barrett Resources Corp.* 490,450
17,800 Cabot Oil & Gas Corp. 339,312
12,300 Cross Timbers Oil Co. 152,213
8,400 Houston Exploration Co.* 178,500
25,200 Southwestern Energy Co. 225,225
5,200 St. Mary Land & Exploration Co. 137,800
------------
1,523,500
---------------------------------------------------------------
Entertainment - 0.7%
76,700 Handleman Co.* 1,016,275
---------------------------------------------------------------
Financial Services - 3.8%
51,200 Advanta Corp. 1,008,000
41,800 Arcadia Financial Ltd.* 237,737
14,400 Arthur J. Gallagher & Co. 786,600
26,800 Credit Acceptance Corp.* 157,450
7,000 E.W. Blanch Holdings, Inc. 463,750
11,400 Financial Federal Corp.* 214,463
35,500 Long Beach Financial Corp.* 534,719
12,600 Metris Companies, Inc. 347,287
5,700 NCO Group, Inc.* 259,350
63,325 Resource Bancshares Mortgage Group, Inc. 379,950
57,500 Security Capital Group, Inc. Class B* 808,594
------------
5,197,900
---------------------------------------------------------------
Food & Beverage - 2.3%
16,000 Agribrands International, Inc.* 778,000
5,000 American Italian Pasta Co.* 140,000
4,700 Corn Products International 153,044
29,200 Fleming Companies, Inc. 352,225
14,700 International Multifoods Corp. 333,506
8,800 Michael Foods, Inc. 243,650
19,300 Pilgrim's Pride Corp. Class B 205,063
9,650 Pilgrim's Pride Corp.* 78,406
22,000 Smithfield Foods, Inc.* 646,250
11,600 Universal Foods Corp. 245,050
------------
3,175,194
---------------------------------------------------------------
Forest - 1.0%
21,300 ACX Technologies, Inc.* 263,588
9,300 Glatfelter (P.H.) Co. 122,644
19,500 Potlatch Corp. 753,187
10,800 United Stationers, Inc.* 244,350
------------
1,383,769
---------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Gas Utilities - 2.3%
27,000 Aquarion Co. $ 972,000
14,300 California Water Services Group 427,212
11,100 Equitable Resources, Inc. 407,925
17,100 Oneok, Inc. 531,169
11,700 SEMCO Energy, Inc. 169,650
25,200 UGI Corp. 578,025
------------
3,085,981
------------------------------------------------------
Heavy Electrical - 1.4%
14,050 A.O. Smith Corp. 381,106
9,900 Anixter International, Inc.* 208,519
14,500 Baldor Electric Co. 257,375
16,000 C&D Technologies, Inc. 504,000
22,900 Foster Wheeler Corp. 296,269
9,400 Regal Beloit Corp. 209,737
------------
1,857,006
------------------------------------------------------
Heavy Machinery - 0.6%
5,400 Astec Industries, Inc.* 182,925
12,700 Columbus McKinnon Corp. 222,250
5,800 Nacco Industries, Inc. 451,675
------------
856,850
------------------------------------------------------
Home Products - 0.7%
45,400 Playtex Products, Inc.* 661,138
10,100 WD-40 Co. 247,450
------------
908,588
------------------------------------------------------
Hotel - 0.4%
41,400 Aztar Corp.* 380,362
21,700 Boyd Gaming Corp.* 116,638
------------
497,000
------------------------------------------------------
Industrial Parts - 3.9%
18,200 Clarcor, Inc. 326,463
11,100 Commercial Intertech Corp. 138,750
12,900 Flowserve Corp. 203,981
20,600 Helix Technology Corp. 581,950
14,200 Kaman Corp. 185,488
13,500 Kennametal, Inc. 357,750
21,700 Mark IV Industries, Inc. 429,931
17,100 Thomas Industries, Inc. 332,381
44,100 Timken Co. 774,506
30,400 Toro Co. 1,117,200
30,600 Watsco, Inc. 428,400
17,600 Watts Industries, Inc. 387,200
------------
5,264,000
------------------------------------------------------
Industrial Services - 3.9%
20,800 Aaron Rents, Inc. Class B 393,900
10,200 ABM Industries, Inc. 234,600
31,700 Avis Rent A Car, Inc.* 697,400
16,400 Chemed Corp. 498,150
------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Industrial Services - (continued)
5,700 Cort Business Services Corp.* $ 142,856
57,700 Dollar Thrifty Automotive Group, Inc.* 1,085,481
13,500 Interim Services, Inc.* 248,906
7,800 Metamor Worldwide, Inc.* 125,044
14,600 Personnel Group of America, Inc.* 122,275
14,600 Rent-A-Center, Inc. * 323,938
26,250 Rollins Truck Leasing Corp. 272,344
12,100 Rollins, Inc. 189,819
20,200 Wackenhut Corp. 488,587
11,600 Xtra Corp.* 525,625
------------
5,348,925
-----------------------------------------------------------------
Information Services - 2.6%
9,000 American Management Systems, Inc.* 257,625
13,700 Bell & Howell Co.* 458,950
28,600 Concentric Network Corp.* 627,412
8,200 F.Y.I., Inc.* 268,038
9,000 Fair Isaac & Co., Inc. 254,250
17,000 infoUSA, Inc. Class B* 86,063
4,600 Maximus, Inc.* 159,275
6,500 Medquist, Inc.* 226,281
6,150 Profit Recovery Group International, Inc.* 234,084
38,000 URS Corp.* 940,500
------------
3,512,478
-----------------------------------------------------------------
Leisure - 1.8%
18,800 Action Performance Co., Inc.* 464,125
26,800 Callaway Golf Co. 266,325
18,900 Hollywood Park, Inc.* 320,118
6,400 JAKKS Pacific, Inc.* 193,600
11,700 Russ Berrie and Company, Inc. 274,219
5,800 SCP Pool Corp.* 133,400
41,700 Station Casinos, Inc.* 844,425
------------
2,496,212
-----------------------------------------------------------------
Life Insurance - 1.5%
46,979 Delphi Financial Group, Inc.* 1,667,754
17,200 FBL Financial Group, Inc. 340,775
------------
2,008,529
-----------------------------------------------------------------
Media - 0.5%
25,700 Ascent Entertainment Group, Inc.* 350,163
11,900 Gaylord Entertainment Co. 362,950
------------
713,113
-----------------------------------------------------------------
Medical Products - 1.3%
2,000 IDEC Pharmaceuticals Corp.* 254,125
13,000 OEC Medical Systems, Inc.* 448,500
16,600 ResMed, Inc.* 460,650
27,100 Sola International, Inc.* 430,213
20,300 Sunrise Medical, Inc.* 142,100
------------
1,735,588
-----------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Medical Providers - 1.1%
49,900 Ameripath, Inc.* $ 467,813
13,200 Hooper Holmes, Inc. 303,600
26,000 Quest Diagnostics, Inc.* 687,375
------------
1,458,788
--------------------------------------------------------------
Mining - 3.0%
39,200 Armco, Inc.* 269,500
49,500 Asarco, Inc. 1,033,312
31,300 Bethlehem Steel Corp.* 240,619
11,600 Commercial Metals Co. 355,250
30,100 Cyprus Amax Minerals Co. 509,819
63,900 National Steel Corp. Class B 519,187
16,100 Oregon Steel Mills, Inc. 176,094
23,200 Quanex Corp. 603,200
11,000 Reliance Steel & Aluminum Corp. 364,375
------------
4,071,356
--------------------------------------------------------------
Motor Vehicle - 1.8%
10,700 Arvin Industries, Inc. 382,525
6,770 Dura Automotive Systems, Inc.* 175,174
8,700 Modine Manufacturing Co. 258,825
5,400 Monaco Coach Corp.* 156,600
17,400 Simpson Industries, Inc. 217,500
25,200 Standard Products Co. 872,550
5,600 Superior Industries International, Inc. 156,800
11,100 Tower Automotive, Inc.* 222,000
------------
2,441,974
--------------------------------------------------------------
Oil Refining - 0.4%
22,400 Northwestern Corp. 554,400
--------------------------------------------------------------
Oil Services - 1.9%
11,000 Helmerich & Payne, Inc. 303,188
11,600 Marine Drilling Co., Inc.* 184,150
21,400 National Oilwell, Inc.* 363,800
21,800 Oceaneering International, Inc.* 437,362
72,300 Parker Drilling Co.* 361,500
24,500 Pool Energy Services Co.* 646,187
29,800 Seitel, Inc.* 290,550
------------
2,586,737
--------------------------------------------------------------
Property Insurance - 2.2%
7,100 Argonaut Group, Inc. 179,275
39,500 Capital Re Corp. 478,937
6,200 Commerce Group, Inc. 137,950
9,091 Fidelity National Financial, Inc. 139,774
28,600 First American Financial Corp. 425,425
10,909 Medical Assurance, Inc.* 274,089
6,900 PMA Capital Corp. 136,706
6,700 Radian Group 310,294
6,300 SCPIE Holdings, Inc. 190,969
16,800 Selective Insurance Group 299,250
14,400 Stewart Information Services Corp. 299,700
7,200 Trenwick Group, Inc. 157,950
------------
3,030,319
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Publishing - 1.5%
13,000 Big Flower Press Holdings, Inc.* $ 375,375
11,800 Jostens, Inc. 237,475
8,200 Pulitzer, Inc. 359,262
50,400 Wallace Computer Services, Inc. 1,077,300
------------
2,049,412
--------------------------------------------------------------
Restaurants - 1.5%
11,700 Buffets, Inc.* 130,894
25,600 Luby's Cafeterias, Inc. 342,400
36,300 Rare Hospitality International, Inc.* 714,656
20,500 Ruby Tuesday, Inc. 371,563
14,500 Sonic Corp.* 444,062
------------
2,003,575
--------------------------------------------------------------
Security/Asset Management - 2.0%
12,900 Advest Group, Inc. 246,713
21,400 Jeffries Group, Inc. 529,650
9,000 John Nuveen Co. 351,562
6,400 National Discount Brokers Group, Inc.* 195,600
40,280 Southwest Securities Group, Inc. 1,359,450
------------
2,682,975
--------------------------------------------------------------
Semiconductors - 3.5%
54,600 3dfx Interactive, Inc.* 607,425
13,400 Actel Corp.* 210,213
30,600 CTS Corp. 1,457,325
21,200 Cypress Semiconductor Corp.* 490,250
43,000 Kent Electronics Corp.* 728,313
13,800 Lam Research Corp.* 778,837
9,100 Transwitch Corp.* 452,156
------------
4,724,519
--------------------------------------------------------------
Specialty Retail - 3.6%
13,500 Bandag, Inc. 448,875
11,600 Genesco, Inc.* 137,750
33,000 Haverty Furniture Cos., Inc. 534,187
20,400 Heilig Meyers Co. 108,375
151,800 Hollywood Entertainment Co.* 2,058,787
27,300 HomeBase, Inc.* 119,438
11,900 Michaels Stores, Inc.* 365,181
8,500 Micro Warehouse, Inc.* 104,125
16,000 Musicland Stores Corp.* 136,000
14,600 Pep Boys-Manny, Moe & Jack 212,613
27,600 PETsMART, Inc.* 132,825
15,400 School Specialty, Inc.* 190,575
32,500 Spiegel, Inc.* 290,469
------------
4,839,200
--------------------------------------------------------------
Telephone - 0.8%
22,300 Dycom Industries, Inc.* 688,513
11,900 US LEC Corp.* 386,750
------------
1,075,263
--------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Thrifts - 2.4%
12,000 Carolina First Corp. $ 262,500
5,400 First Republic Bank San Francisco California* 138,712
30,800 FirstFed Financial Corp.* 469,700
15,200 Reliance Bancorp, Inc. 525,350
73,747 Republic Security Financial 705,206
37,300 Richmond County Financial 739,006
19,600 Staten Island Bancorp, Inc. 351,575
------------
3,192,049
--------------------------------------------------------------------
Tobacco - 0.6%
24,500 Dimon, Inc. 105,656
24,300 Universal Corp. 689,513
------------
795,169
--------------------------------------------------------------------
Truck Freight - 1.1%
10,000 Alexander & Baldwin, Inc. 241,875
17,400 Arnold Industries, Inc. 247,950
14,000 Consolidated Freightways Corp.* 151,375
10,700 Overseas Shipholding Group 149,131
8,000 Seacor Smit, Inc.* 415,500
18,200 Yellow Corp. * 288,925
------------
1,494,756
--------------------------------------------------------------------
Wireless - 0.6%
39,375 Price Communications Corp.* 809,648
</TABLE>
<TABLE>
-----------------------------
<S> <C> <C>
TOTAL COMMON
STOCKS
(Cost
$127,072,813) $134,481,534
-----------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Repurchase Agreement - 0.8%
Joint Repurchase Agreement
$1,100,000 5.52% 09/01/1999 $ 1,100,000
---------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,100,000) $ 1,100,000
---------------------------------------------
TOTAL INVESTMENTS
(Cost $128,172,813) $135,581,534
---------------------------------------------
</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.
30
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE 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% per Class A and applica-
ble maximum 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 Decem-
ber 31, 1998 (commencement of operations) in the Goldman Sachs CORE Large Cap
Value Fund. For comparative purposes, the performance of the Fund's benchmark
(Russell 1000 Value Index) is shown. This performance data represents past
performance and should not be considered indicative of future performance
which will fluctuate with changes in market conditions. These performance
fluctuations will cause an investor's shares, when redeemed, to be worth more
or less than their original cost.
CORE Large Cap Value Fund's Lifetime Performance
Growth of a $10,000 Investment, Distributions Reinvested January 1, 1999 to
August 31, 1999(a).
[LINE GRAPH APPEARS HERE]
Core Large Cap Equity
Russell 1000
Value index Class A Class B Class C InstitutionaL Service
1/1/99 10,000 9,450 10,000 10,000 10,000 10,000
Jan-99 10,080 9,594 10,150 10,150 10,160 10,160
Feb-99 9,938 9,461 10,000 10,000 10,010 10,010
Mar-99 10,144 9,690 10,227 10,227 10,259 10,246
Apr-99 11,091 10,532 11,107 11,107 11,150 11,137
May-99 10,969 10,362 10,927 10,927 10,970 10,957
Jun-99 11,287 10,699 11,275 11,270 11,336 11,310
Jul-99 10,956 10,339 10,884 10,889 10,954 10,929
Aug-99 10,550 10,007 10,022 10,428 10,602 10,578
<TABLE>
<CAPTION>
Average Annual Total Return through August
31, 1999 Since Inception Seven Months
<S> <C> <C>
Class A (commenced December 31, 1998)
Excluding sales charges 5.87% 4.31%
Including sales charges 0.07% -1.42%
--------------------------------------------------------------------------
Class B (commenced December 31, 1998)
Excluding contingent deferred sales charges 5.23% 3.68%
Including contingent deferred sales charges 0.22% -1.33%
--------------------------------------------------------------------------
Class C (commenced December 31, 1998)
Excluding contingent deferred sales charges 5.29% 3.73%
Including contingent deferred sales charges 4.28% 2.73%
--------------------------------------------------------------------------
Institutional Class (commenced December 31,
1998) 6.02% 4.35%
--------------------------------------------------------------------------
Service Class (commenced December 31, 1998) 5.78% 4.11%
--------------------------------------------------------------------------
</TABLE>
(a) For comparative purposes, initial investments are assumed to be made on
the first day of the month following commencement of operations.
31
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
Statement of Investments
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 99.0%
Airlines - 0.5%
19,400 Delta Air Lines, Inc. $ 985,762
10,300 UAL Corp.* 667,569
------------
1,653,331
-------------------------------------------------------------
Apparel - 0.4%
23,200 Nike, Inc. Class B 1,073,000
-------------------------------------------------------------
Banks - 14.9%
17,500 Bank of New York Co., Inc. 625,625
105,000 Bank One Corp. 4,213,125
112,400 BankAmerica Corp. 6,800,200
15,100 BB&T Corp. 505,850
78,200 Chase Manhattan Corp. 6,544,362
140,850 Citigroup, Inc. 6,259,022
34,300 Comerica, Inc. 1,785,744
5,700 Fifth Third Bancorp 377,625
117,100 Firstar Corp. 3,139,744
11,300 FirstMerit Corp. 296,978
103,200 Fleet Financial Group, Inc. 4,108,650
32,800 Mellon Bank Corp. 1,094,700
9,200 Mercantile Bancorp., Inc. 507,725
24,400 National City Corp. 674,050
16,900 PNC Bank Corp. 884,081
19,300 Regions Financial Corp 681,531
16,600 SouthTrust Corp. 586,188
38,100 Suntrust Banks, Inc. 2,450,306
45,700 UnionBanCal Corp. 1,753,738
48,100 Wells Fargo & Co. 1,914,981
2,200 Zions Bancorp 109,450
------------
45,313,675
-------------------------------------------------------------
Chemical - 3.1%
31,800 Avery Dennison Corp. 1,745,025
38,900 Dow Chemicals Co. 4,420,012
16,165 Du Pont (E.I.) de Nemours & Co. 1,024,457
14,600 PPG Industries, Inc. 876,912
6,500 Rohm & Haas Co. 242,938
11,000 Sherwin Williams Co. 268,125
16,600 Vulcan Materials Co. 707,575
------------
9,285,044
-------------------------------------------------------------
Computer Hardware - 3.6%
1,500 Apple Computer, Inc.* 97,875
5,500 Electronics for Imaging, Inc.* 322,438
15,900 Hewlett-Packard Co. 1,675,462
44,400 International Business Machines, Inc. 5,530,575
39,400 Lexmark International Group, Inc.* 3,102,750
4,700 Pitney-Bowes Inc. 277,300
------------
11,006,400
-------------------------------------------------------------
Computer Software - 0.9%
3,300 Microsoft Corp.* 305,456
71,100 Novell, Inc.* 1,684,181
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Computer Software - (continued)
17,500 Oracle Corp.* $ 638,750
2,100 Unisys Corp.* 90,300
------------
2,718,687
----------------------------------------------------------
Consumer Durables - 0.2%
10,500 Whirlpool Corp. 742,219
----------------------------------------------------------
Defense/Aerospace - 1.8%
44,700 Allied Signal, Inc. 2,737,875
26,800 General Dynamics Corp. 1,688,400
17,200 Raytheon Co. Class B 1,171,750
------------
5,598,025
----------------------------------------------------------
Department Store - 0.2%
3,900 Federated Department Stores, Inc.* 179,400
7,600 J. C. Penney Co., Inc. 275,500
------------
454,900
----------------------------------------------------------
Drugs - 2.3%
28,000 Allergan, Inc. 2,796,500
24,400 Amgen, Inc.* 2,029,775
7,900 Andrx Corp.* 567,813
20,700 Bristol-Myers Squibb Co. 1,456,762
1,200 Genzyme Corp.* 67,725
600 Pharmacia & Upjohn, Inc. 31,350
------------
6,949,925
----------------------------------------------------------
Electrical Equipment - 0.7%
28,100 Johnson Controls, Inc. 1,921,338
3,100 Motorola, Inc. 285,975
------------
2,207,313
----------------------------------------------------------
Electrical Utilities - 5.6%
21,700 Alliant Energy Corp. 627,944
6,700 Calpine Corp.* 607,187
78,000 Dominion Resources, Inc. 3,607,500
29,500 DTE Energy Co. 1,163,406
7,800 Energy East Corp. 195,000
82,200 Entergy Corp. 2,450,587
35,500 FPL Group, Inc. 1,917,000
27,200 PECO Energy Co. 1,105,000
1,800 PG&E Corp. 54,563
45,100 Public Service Enterprise 1,849,100
2,200 Southern Co. 59,538
60,100 Texas Utilities Co. 2,430,294
25,900 Unicom Corp. 1,000,387
------------
17,067,506
----------------------------------------------------------
Energy Resources - 9.9%
24,100 Apache Corp. 1,096,550
5,500 Atlantic Richfield Co. 483,656
71,000 Chevron Corp. 6,549,750
34,028 Conoco, Inc. Class B 914,496
167,300 Exxon Corp. 13,195,787
----------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Energy Resources - continued
45,700 Mobil Corp. $ 4,678,538
48,900 Royal Dutch Petroleum Co. ADR 3,025,688
------------
29,944,465
--------------------------------------------------------------------
Entertainment - 0.5%
14,200 Carnival Cruise Lines Corp. 634,563
18,000 Royal Caribbean Cruise Lines 842,625
------------
1,477,188
--------------------------------------------------------------------
Financial Services - 3.0%
1,100 American Express Co. 151,250
12,000 Aon Corp. 400,500
4,700 C.I.T. Group, Inc. 111,919
13,200 Countrywide Credit Industries, Inc. 424,050
26,300 Federal National Mortgage Association 1,633,888
17,200 H&R Block, Inc. 956,750
10,600 Heller Financial, Inc. 242,475
44,600 Marsh & McLennan Co. 3,247,437
24,000 Providian Financial Corp. 1,863,000
------------
9,031,269
--------------------------------------------------------------------
Food & Beverage - 3.6%
45,900 ConAgra, Inc. 1,124,550
600 General Mills, Inc. 50,250
14,000 Hormel Foods Corp. 563,500
102,100 IBP, Inc. 2,341,919
191,600 Nabisco Group Holdings Corp. 3,400,900
87,400 Nabisco Holdings Corp. 3,435,912
6,500 Supervalu, Inc. 146,250
------------
11,063,281
--------------------------------------------------------------------
Forest - 0.5%
13,500 Georgia-Pacific Corp. 558,563
14,900 Weyerhaeuser Co. 838,125
------------
1,396,688
--------------------------------------------------------------------
Gas Utilities - 0.5%
52,700 Keyspan Corp. 1,554,650
--------------------------------------------------------------------
Gold - 1.7%
169,000 Barrick Gold Corp. 3,274,375
108,700 Freeport-McMoRan Copper & Gold, Inc. Class B 1,745,994
26,500 Placer Dome, Inc. 274,937
------------
5,295,306
--------------------------------------------------------------------
Grocery - 0.4%
63 Albertson's, Inc. 3,020
47,600 Kroger Co.* 1,100,750
------------
1,103,770
--------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Heavy Electrical - 0.9%
21,000 Emerson Electric Co. $ 1,315,125
22,600 Phelps Dodge Corp. 1,264,187
------------
2,579,312
--------------------------------------------------------------
Home Products - 0.2%
17,700 Fortune Brands, Inc. 663,750
2,100 Premark International, Inc. 69,825
------------
733,575
--------------------------------------------------------------
Hotel - 0.2%
19,900 Marriott International, Inc. 681,575
--------------------------------------------------------------
Industrial Parts - 2.1%
23,900 Ingersoll-Rand Co. 1,520,638
28,500 Parker Hannifin Corp. 1,246,875
12,600 Tecumseh Products Co. 718,200
2,200 Textron, Inc. 177,650
39,700 United Technologies Corp. 2,625,162
------------
6,288,525
--------------------------------------------------------------
Industrial Services - 0.6%
20,600 Dollar Thrifty Automotive Group, Inc.* 387,537
31,900 Hertz Corp. 1,285,969
------------
1,673,506
--------------------------------------------------------------
Information Services - 0.2%
7,400 Rhythms NetConnections, Inc.* 283,050
9,600 Sotheby's Holdings, Inc. 279,600
------------
562,650
--------------------------------------------------------------
Leisure - 1.4%
59,500 Eastman Kodak Co. 4,369,531
--------------------------------------------------------------
Life Insurance - 2.5%
6,300 Aetna, Inc. 489,825
23,100 American General Corp. 1,640,100
19,100 Cigna Corp. 1,715,419
40,600 Hartford Life, Inc. 1,763,562
9,800 Lincoln National Corp. 459,375
30,300 Nationwide Financial Services, Inc. 1,105,950
8,500 Unumprovident Corp. 306,531
------------
7,480,762
--------------------------------------------------------------
Media - 3.3%
67,800 Cox Communications, Inc.* 2,521,312
122,800 Fox Entertainment Group, Inc.* 2,832,075
113,700 Infinity Broadcasting Corp.* 3,077,006
4,200 Time Warner, Inc. 249,113
18,700 Univision Communications, Inc.* 1,379,125
------------
10,058,631
--------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
33
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Medical Products - 1.3%
34,800 Bausch & Lomb, Inc. $ 2,298,975
16,831 Tyco International Ltd. 1,705,191
------------
4,004,166
--------------------------------------------------------------
Medical Providers - 0.5%
19,600 Pacificare Health Systems * 1,176,000
2,300 Trigon Healthcare, Inc.* 83,519
4,700 United Healthcare Corp. 285,819
------------
1,545,338
--------------------------------------------------------------
Mining - 0.6%
9,100 Alcan Aluminum, Ltd. 299,163
6,600 Alcoa, Inc. 426,112
39,400 USX-US Steel Group 1,063,800
------------
1,789,075
--------------------------------------------------------------
Motor Vehicle - 1.8%
17,123 Delphi Automative Systems Corp. 321,056
27,900 Ford Motor Co. 1,454,288
63,700 Navistar International Corp.* 3,097,412
9,800 Paccar, Inc. 540,225
------------
5,412,981
--------------------------------------------------------------
Oil Refining - 0.7%
33,200 Texaco, Inc. 2,108,200
--------------------------------------------------------------
Property Insurance - 6.9%
3,600 Allmerica Financial Corp. 203,400
28,300 Allstate Corp. 928,594
22,400 AMBAC Financial Group, Inc. 1,183,000
80,125 American International Group, Inc. 7,426,586
76,200 Hartford Financial Services Group, Inc. 3,462,337
13,600 Jefferson-Pilot Corp. 907,800
43,500 Loews Corp. 3,414,750
6,900 The PMI Group, Inc. 293,250
88,400 Travelers Property & Casualty Corp. 3,138,200
------------
20,957,917
--------------------------------------------------------------
Publishing - 0.3%
9,800 Knight Ridder, Inc. 528,587
4,600 Mcgraw-Hill Companies, Inc. 237,763
5,500 R.R. Donnelley & Sons Co. 172,563
------------
938,913
--------------------------------------------------------------
Railroads - 1.1%
74,400 Burlington Northern Santa Fe Corp. 2,157,600
7,400 Canadian National Railway Co. 470,362
2,800 CSX Corp. 122,325
24,100 Norfolk Southern Corp. 631,119
------------
3,381,406
--------------------------------------------------------------
Restaurants - 0.2%
31,300 Brinker International, Inc.* 751,200
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Security/Asset Management - 2.0%
66,935 Bear Stearns Companies, Inc. $ 2,786,169
2,400 Equitable Companies, Inc. 148,200
19,100 Morgan Stanley Dean Witter & Co. 1,639,019
39,900 Paine Webber Group, Inc. 1,566,075
------------
6,139,463
--------------------------------------------------------
Semiconductors - 0.8%
5,500 LSI Logic Corp.* 312,125
15,000 Texas Instruments, Inc. 1,230,938
10,800 Xilinx, Inc.* 755,325
------------
2,298,388
--------------------------------------------------------
Specialty Retail - 3.7%
21,600 Best Buy Co., Inc.* 1,517,400
55,100 Circuit City Stores, Inc. 2,369,300
56,600 CVS Corp. 2,359,512
17,000 Lowes Co., Inc. 769,250
5,100 Staples, Inc.* 110,925
2,200 Tandy Corp. 103,950
9,000 The Home Depot, Inc. 550,125
39,800 Tiffany & Co. 2,104,425
37,000 Zale Corp.* 1,283,438
------------
11,168,325
--------------------------------------------------------
Telephone - 11.2%
57,800 Ameritech Corp. 3,648,625
188,246 AT&T Corp. 8,471,070
49,600 BCE, Inc. 2,318,800
63,300 Bell Atlantic Corp. 3,877,125
67,800 BellSouth Corp. 3,067,950
24,600 Centurytel, Inc. 967,088
71,400 GTE Corp. 4,899,825
5,100 MCI Worldcom, Inc.* 386,325
61,600 SBC Communications, Inc. 2,956,800
72,500 Sprint Corp. 3,217,187
------------
33,810,795
--------------------------------------------------------
Thrifts - 0.6%
19,100 Golden West Financial Corp. 1,734,519
--------------------------------------------------------
Tobacco - 0.2%
17,500 Philip Morris Companies, Inc. 655,156
--------------------------------------------------------
Truck Freight - 0.1%
5,200 FDX Corp.* 220,675
--------------------------------------------------------
Wireless - 1.3%
24,700 Telephone & Data Systems, Inc. 1,719,738
37,400 United States Cellular Corp.* 2,106,087
------------
3,825,825
--------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $298,694,782) $300,107,051
--------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
Repurchase Agreement - 0.3%
<S> <C> <C> <C>
Joint Repurchase Agreement
$800,000 5.52% 09/01/1999 $ 800,000
---------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $800,000) $ 800,000
---------------------------------------------
TOTAL INVESTMENTS
(Cost $299,494,782) $300,907,051
---------------------------------------------
</TABLE>
* Non-income producing security.
The percentages 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.
35
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL 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% per Class A and applica-
ble maximum 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 August
15, 1997 (commencement of operations) in the Goldman Sachs CORE International
Equity Fund. For comparative purposes, the performance of the Fund's bench-
mark (Morgan Stanley Capital International Gross Europe, Australia, Far East
Index ("MSCI Gross EAFE Index")) is shown. This performance data represents
past performance and should not be considered indicative of future perfor-
mance which will fluctuate with changes in market conditions. These perfor-
mance fluctuations will cause an investor's shares, when redeemed, to be
worth more or less than their original cost.
CORE International Equity Fund's Lifetime Performance
Performance of a $10,000 Investment, Distributions Reinvested August 15, 1997
to August 31, 1999.
[LINE GRAPH APPEARS HERE]
Core Int'l Equity Fund
Morgan Stanley
Gross EAFE Index Class A Class B Class C Institutional Service
8/15/97 10,000 9,450 10,000 10,000 10,000 10,000
Aug-97 9,540 9,045 9,570 9,570 9,570 9,570
Sep-97 10,076 9,405 9,950 9,950 9,960 9,950
Oct-97 9,304 8,620 9,110 9,120 9,130 9,120
Nov-97 9,211 8,365 8,840 8,840 8,860 8,850
Dec-97 9,294 8,293 8,760 8,770 8,794 8,780
Jan-98 9,722 8,728 9,210 9,220 9,255 9,230
Feb-98 10,348 9,361 9,880 9,890 9,936 9,910
Mar-98 10,669 9,655 10,190 10,200 10,256 10,230
Apr-98 10,755 9,645 10,170 10,180 10,246 10,220
May-98 10,706 9,541 10,060 10,080 10,146 10,110
Jun-98 10,789 9,456 9,970 9,980 10,056 10,020
Jul-98 10,901 9,579 10,090 10,100 10,186 10,150
Aug-98 9,553 8,179 8,620 8,620 8,704 8,670
Sep-98 9,262 7,943 8,370 8,370 8,464 8,420
Oct-98 10,230 8,747 9,210 9,220 9,325 9,280
Nov-98 10,757 9,134 9,620 9,630 9,746 9,690
Dec-98 11,184 9,440 9,930 9,940 10,076 10,017
Jan-99 11,154 9,459 9,950 9,960 10,106 10,037
Feb-99 10,891 9,250 9,730 9,730 9,885 9,817
Mar-99 11,348 9,591 10,080 10,090 10,257 10,187
Apr-99 11,810 10,103 10,620 10,630 10,809 10,728
May-99 11,204 9,572 10,050 10,060 10,246 10,157
Jun-99 11,643 10,027 10,530 10,530 10,739 10,648
Jul-99 11,993 10,274 10,780 10,790 11,010 10,908
Aug-99 12,039 10,302 10,510 10,820 11,050 10,948
<TABLE>
<CAPTION>
Average Annual Total Return through
August 31, 1999 Since Inception One Year Seven Months
<S> <C> <C> <C>
Class A (commenced August 15,
1997)
Excluding sales charges 4.30% 25.96% 8.92%
Including sales charges 1.47% 19.07% 2.94%
----------------------------------------------------------------------------
Class B (commenced August 15,
1997)
Excluding contingent deferred
sales charges 3.88% 25.41% 8.64%
Including contingent deferred
sales charges 2.46% 20.41% 3.64%
----------------------------------------------------------------------------
Class C (commenced August 15,
1997)
Excluding contingent deferred
sales charges 3.93% 25.52% 8.63%
Including contingent deferred
sales charges 3.93% 24.52% 7.63%
----------------------------------------------------------------------------
Institutional Class (com-
menced August 15, 1997) 5.00% 26.96% 9.34%
----------------------------------------------------------------------------
Service Class (commenced Au-
gust 15, 1997) 4.53% 26.28% 9.08%
----------------------------------------------------------------------------
</TABLE>
36
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Statement of Investments
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 99.2%
Belgium - 0.7%
14,700 Dexia Belgium Credit Communal (Banks) $ 2,150,619
100 Electrabel SA (Utilities) 33,460
19,400 Fortis B (Insurance) 666,974
------------
2,851,053
-----------------------------------------------------------------------
Britain - 14.7%
32,300 Abbey National (Banks) 555,498
43,829 Allied Domecq PLC (Tobacco) 403,329
103,900 Allied Zurich PLC (Insurance) 1,264,523
85,200 AMEC PLC (Construction) 365,976
140,800 Arjo Wiggins Appleton PLC (Paper) 487,016
58,800 AstraZeneca Group PLC (Health) 2,331,828
30,300 Barclays PLC (Banks) 900,351
193,971 BG (Utilities) 1,167,107
262,470 Billiton PLC (Nonferrous Metals) 1,069,378
335,600 BP Amoco PLC (Energy Resources) 6,225,203
83,800 British American Tobacco (Tobacco) 702,399
311,200 British Steel PLC (Steel) 817,326
385,100 British Telecom PLC (Telecommunication) 5,898,108
78,583 Cable & Wireless (Telecommunication) 900,142
1 Carillion PLC * (Construction) 2
16,790 Daily Mail & General Trust (Broadcasting) 945,412
29,600 Debenhams PLC (Merchandising) 187,625
78,400 Diageo PLC (Tobacco) 795,880
171,885 FKI PLC (Electrical Equipment) 587,624
11,400 General Electric Co. PLC (Electrical Equipment) 113,893
250,536 George Wimpey PLC (Construction) 606,891
119,380 Glaxo Wellcome PLC (Health) 3,136,798
11,100 Granada Group PLC (Leisure) 98,932
63,895 Halifax Group PLC (Banks) 713,393
41,800 Hanson PLC (Construction) 356,077
277,000 HSBC Holdings PLC (Banks) 3,431,411
64,150 J. Sainsbury PLC (Merchandising) 442,232
44,944 Kingfisher Group (Merchandising) 540,848
68,312 Lex Service PLC (Business Services) 673,689
43,100 National Power (Utilities) 305,960
88,700 National Westminster Bank PLC (Banks) 1,820,860
235,500 Norwich Union PLC (Insurance) 1,606,420
21,258 P & O Finance BV (Ship Transportation) 341,999
20,000 Pearson (Broadcasting) 412,497
35,300 Railtrack Group PLC (Business Services) 674,105
28,800 Reuters Group PLC (Business Services) 423,256
23,900 RMC Group PLC (Construction) 395,462
435,077 Rolls Royce (Defense/Aerospace) 1,730,632
122,325 Royal Bank of Scotland Group (Banks) 2,522,932
-----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Britain - (continued)
99,300 Safeway (Merchandising) $ 412,165
304,046 Smith Group (Health) 1,017,431
82,600 Smith Group (Merchandising) 761,442
184,300 Smithkline Beecham (Health) 2,398,701
59,400 Standard Chartered PLC (Banks) 864,843
1 Tarmac (Construction) 8
37,308 Thames Water (Business Services) 537,189
58,466 Unilever NV (Food & Beverage) 550,252
12,721 Unilever NV (Food & Beverage) 886,137
57,700 United Utility (Business Services) 686,926
118,900 Vodafone AirTouch PLC (Telecommunication) 2,394,906
50,900 Whitbread PLC (Leisure) 701,780
209,767 Williams PLC (Electrical Utilities) 1,191,281
51,300 Wolseley PLC (Construction) 404,404
------------
58,760,479
--------------------------------------------------------------------
Finland - 2.6%
85,000 Finnair Series 1 (Airlines) 427,107
153,000 Merita PLC (Banks) 809,255
85,550 Metsa Serla OY (Paper) 810,871
84,000 Nokia AB Oyj Series A (Telecommunication) 7,019,890
35,000 UPM Kymmene OY (Paper) 1,212,560
------------
10,279,683
--------------------------------------------------------------------
France - 8.0%
10,650 Assurances Generales de France (Insurance) 550,574
31,400 Axa (Insurance) 3,912,901
32,380 Banque National de Paris (Banks) 2,479,929
9,400 Carrefour SA (Specialty Retail) 1,531,343
10,500 Casino Guich Perr (Merchandising) 1,107,410
2,700 Compagnie de Saint Gobain (Construction) 522,683
1,800 Danone (Food & Beverage) 445,947
14,836 Dexia France (Banks) 1,935,102
12,500 Elf Aquitaine (Energy Resources) 2,195,038
689,300 Eurotunnel SA * (Business Services) 1,050,013
72,300 France Telecom (Telecommunication) 5,636,762
9,450 GTM Entrepose (Construction) 1,033,657
1,400 L' Oreal SA (Health) 905,625
1,310 Labinal (Electrical Equipment) 185,279
16,600 Lafarge SA (Construction) 1,785,883
11,200 Lagardere S.C.A. (Multi-Industrial) 454,960
8,800 Pechiney (Nonferrous Metals) 512,930
8,000 Pernod Ricard (Tobacco) 614,399
4,800 Pinault-Printemps-Redoute SA (Merchandising) 832,739
15,000 Rhone-Poulenc SA (Chemical) 728,647
4,300 SEITA (Tobacco) 234,716
--------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
37
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
France - (continued)
400 Societe Eurafrance SA (Financial Services) $ 245,844
17,400 Suez Lyonnaise Eaux (Business Services) 2,906,399
------------
31,808,780
-----------------------------------------------------------------------------
Germany - 9.0%
13,050 Allianz AG Holdings (Insurance) 3,441,571
350 AMB Aachener & Muenchener Beteiligungs AG (Insurance) 29,620
71,450 BASF AG (Chemical) 3,242,526
30,250 Bayer AG (Chemical) 1,316,798
59,800 Commerzbank AG (Banks) 2,144,494
91,715 Daimler Chrysler AG (Auto) 6,927,276
102,250 Deutsche Telekom AG (Telecommunication) 4,532,118
36,550 Fag Kugelfischer (Industrial Services) 384,711
11,275 Hoechst AG (Health) 477,090
6,800 HypoVereinsbank (Banks) 403,548
4,700 IWKA AG (Machinery) 89,047
300 Karstadt AG (Merchandising) 142,175
34,400 Lufthansa AG (Airlines) 665,937
57,750 Man AG (Machinery) 1,954,906
2,023 Mannesmann AG (Machinery) 310,732
46,100 Merck KGAA (Health) 1,570,293
4,700 Meto AG * (Appliance) 35,965
7,050 Metro AG (Merchandising) 404,961
50,525 Siemens AG (Electrical Equipment) 4,254,449
6,500 Thyssen AG * (Steel) 151,960
51,900 Veba AG (Utilities) 3,310,614
------------
35,790,791
-----------------------------------------------------------------------------
Hong Kong - 3.3%
760,000 Amoy Properties (Real Estate) 748,754
193,000 Bank of East Asia (Banks) 444,912
129,000 Cathay Pacific Airways (Airlines) 219,295
57,000 Cheung Kong Holdings Ltd. (Real Estate) 497,334
220,500 CLP Holdings Ltd. (Utilities) 1,042,171
319,000 Great Eagle Holdings Ltd. (Real Estate) 468,338
140,000 Hang Seng Bank Ltd. (Banks) 1,582,120
17,000 Harbour Centre Development Ltd. (Leisure) 13,574
118,000 Hong Kong & China Gas Co. Ltd. (Utilities) 167,922
272,000 Hong Kong Construction Holdings Ltd. (Construction) 133,112
801,400 Hong Kong Telecom (Telecommunication) 1,816,461
266,000 Hutchison Whampoa (Financial Services) 2,594,947
50,000 Johnson Electric Holdings Ltd. (Electrical Equipment) 225,373
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Hong Kong - (continued)
88,000 New World Development Co. Ltd. (Real Estate) $ 211,928
597,000 Sino Land Co. (Real Estate) 299,849
165,000 Sun Hung Kai Properties Co. Ltd. (Real Estate) 1,402,465
168,500 Swire Pacific Ltd. Class A (Multi-Industrial) 868,009
30,000 Television Broadcasts Ltd. (Media) 134,451
158,000 Wharf Holdings Co. Ltd. (Real Estate) 429,342
------------
13,300,357
------------------------------------------------------------------------
Italy - 5.7%
73,700 Assicurazioni Generali (Insurance) 2,490,934
327,600 Banca Commercial Italiana (Banks) 2,231,792
77,700 Banca Popolare di Milano BPM (Banks) 563,857
391,900 CIR-Compagnie Industriali Riunite SpA (Multi-
Industrial) 583,716
1,049,700 ENI SpA (Energy Resources) 6,318,316
492,200 Istituto Nazionale delle Assicurazioni SpA
(Insurance) 1,187,136
23,700 Italcementi SpA (Construction) 323,416
55,650 Magneti Marelli SpA (Industrial Services) 145,996
70,200 Mediaset SpA (Broadcasting) 620,822
559,900 Montedison SpA (Multi-Industrial) 844,013
10,800 Pirelli SpA * (Industrial Services) 20,222
59,300 Rolo Banca 1473 (Banks) 1,176,197
70,800 San Paolo-IMI SpA (Banks) 951,925
65,500 Sirti SpA (Construction) 338,824
32,400 Telecom Italia Mobile SpA (Telecommunication) 112,420
117,400 Telecom Italia SpA-ITL50 (Telecommunication) 684,296
395,125 Telecom Italia SpA-ITL1000 (Telecommunication) 3,983,376
------------
22,577,258
------------------------------------------------------------------------
Japan - 28.8%
41,000 77 Bank Ltd. (Banks) 401,619
29,200 Acom Co. (Financial Services) 2,967,138
80,000 Alps Electric Co. (Electrical Utilities) 2,326,794
520,000 Bank of Tokyo Mitsubishi (Banks) 7,776,100
41,000 Canon Sales Co., Inc. (Business Services) 652,865
46,000 Canon, Inc. (Computer Hardware) 1,346,321
39 Central Japan Railway Co. (Railroads) 253,258
79,000 Chiba Bank Ltd. (Banks) 296,968
32,000 Chugoku Electric Power Co. (Utilities) 527,992
79,000 Chuo Trust & Bank (Financial Services) 517,346
------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
38
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Japan - (continued)
111,000 Cosmo Oil Co. Ltd. (Energy Resources) $ 203,046
271,000 Daicel Chemical Industries (Chemical) 1,115,379
88,000 Daiichi Pharmaceutical Co. (Health) 1,361,028
117,000 Dainippon Pharmaceutical Co. Ltd. (Health) 721,251
57,000 Daito Trust Construction Co. Ltd. (Construction) 742,900
48,000 Daiwa Securities Group, Inc. (Financial Services) 435,067
271 DDI Corp. (Telecommunication) 1,710,248
241,000 Fuji Heavy Industries Ltd. (Auto) 1,922,093
102,000 Fujitsu Ltd. (Computer Hardware) 2,994,649
391,000 Hitachi (Electrical Equipment) 3,973,119
36,000 Hitachi Chemical Co. Ltd. (Chemical) 540,321
42,000 Honda Motor Co. Ltd. (Auto) 1,690,218
328,000 Industrial Bank of Japan Ltd. (Banks) 3,344,949
225,000 Ishikawajima Har (Machinery) 442,448
172,000 Izumiya Co. (Merchandising) 1,596,744
51,000 JUSCO Co. Ltd. (Merchandising) 984,223
59,000 Kaken Pharmaceutical Co. Ltd. (Health) 431,701
22,800 KDD Corp. (Telecommunication) 1,782,961
244,000 Konica Corp. (Multi-Industrial) 984,168
40,200 Kyocera Corp. (Electrical Utilities) 2,647,277
243,000 Kyowa Hakko Kogyo (Health) 1,844,697
55,600 Kyushu Electric Power Co., Inc. (Utilities) 889,925
120,000 Lion Corp. (Health) 460,969
108,000 Matsushita Electric Industrial Co. (Appliance) 2,133,626
202,000 Mazda Motor Corp. (Auto) 1,136,233
379,000 Mitsubishi Electric (Electrical Equipment) 1,920,391
626,000 Mitsubishi Heavy Industries Ltd. (Machinery) 2,731,074
73,000 Mitsubishi Trust & Banking (Banks) 767,824
254,000 Mitsui Co. (Wholesale) 1,791,137
731,000 Mitsui Osk Lines (Ship Transportation) 1,404,033
63,000 Mitsui Soko Co. (Business Services) 210,317
20,000 Mitsumi Electric Co. Ltd. (Electrical Equipment) 601,820
10,000 Nichiei Co.* (Financial Services) 923,766
344,000 Nippon Express Co. (Railroads) 2,633,448
59,000 Nippon Kayaku Co. Ltd. (Health) 339,964
514,000 Nippon Oil Co. Ltd. (Energy Resources) 2,280,057
129,000 Nippon Suisan Kaisha Ltd. (Food & Beverage) 253,670
466 Nippon Telephone & Telegraph Corp. (Telecommunication) 5,242,420
97,000 Nishimatsu Construction (Construction) 563,360
140,000 Nissan Motor Co.* (Auto) 816,939
------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Japan - (continued)
128 NTT Mobile Communications Network, Inc.*
(Telecommunication) $ 2,118,992
173,000 Sakura Bank Ltd. (Banks) 917,730
75,000 Sankyo Co. Ltd. (Health) 2,092,194
3,000 Secom Co. Ltd. (Business Services) 410,207
151,000 Sekisui Chemical Co. Ltd. (Construction) 842,457
208,000 Sekisui House (Construction) 2,239,137
63,000 Sharp Corp. (Electrical Equipment) 962,272
15,000 Shikoku Electric Power (Utilities) 241,460
236,000 Shionogi & Co. (Health) 2,028,993
300,000 Showa Denko KK (Chemical) 411,579
397,000 Snow Brand Milk (Food & Beverage) 1,819,152
15,200 Sony Corp. (Appliance) 1,971,336
50,000 Sumitomo Bank (Banks) 685,965
419,000 Sumitomo Osaka Cement (Construction) 793,278
115,000 Suzuki Motor Corp. (Auto) 1,945,854
315,000 Taiheiyo Cement (Construction) 826,862
50,000 Takeda Chemical Industries Ltd. (Health) 2,515,206
65,000 Tokyo Electric Power (Electrical Utilities) 1,515,983
155,000 Toppan Printing Co. (Business Services) 1,984,726
185,000 Toshiba Corp. (Electrical Equipment) 1,646,362
104,000 Toyo Seikan Kaisha (Multi-Industrial) 2,425,573
210,000 Toyota Motor Corp. (Auto) 6,203,869
221 West Japan Railway (Railroads) 879,270
308,000 Yasuda Fire & Marine Insurance (Insurance) 2,121,224
------------
115,235,542
----------------------------------------------------------------------------
Netherlands - 5.5%
159,800 ABN AMRO Holding NV (Banks) 3,896,473
7,600 DSM NV (Chemical) 895,216
9,750 Heineken NV (Tobacco) 486,822
90,200 ING Groep NV (Financial Services) 4,952,196
38,200 Koninklijke Ahold NV (Merchandising) 1,369,894
6,400 Koninklijke Hoogovens NV (Steel) 370,670
71,200 Koninklijke Nedlloyd NV (Railroads) 2,033,610
35,786 Koninklijke Royal Philips Electronics NV (Appliance) 3,692,873
18,200 KPN NV (Telecommunication) 816,321
54,700 Royal Dutch Petroleum Co. (Energy Resources) 3,367,706
------------
21,881,781
----------------------------------------------------------------------------
Portugal - 0.5%
40,900 Banco Comercial Portugues SA (Banks) 1,087,708
10,100 Banco Espirito Santo SA (Banks) 256,530
9,700 Banco Mello SA (Banks) 90,811
----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
39
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Statement of Investments (continued)
August 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Portugal - (continued)
3,400 Banco Port Atlan* (Banks) $ 51,289
24,800 BPI-SGPS SA (Banks) 498,721
------------
1,985,059
-------------------------------------------------------------------------------
Singapore - 5.6%
543,000 Acma Ltd. (Telecommunication) 412,854
174,000 City Developments (Real Estate) 1,054,232
872,000 Comfort Group Ltd. (Railroads) 440,273
26,000 Creative Technology Ltd. (Electrical Equipment) 257,915
220,970 DBS Bank Ltd. (Banks) 2,533,247
532,000 DBS Land (Real Estate) 1,213,472
404,000 Hotel Properties Ltd. (Leisure) 371,963
68,000 Jurong Shipyard Ltd. (Machinery) 306,980
173,000 Keppel Corp. Ltd. (Multi-Industrial) 560,053
305,000 Marco Polo Development Ltd. (Real Estate) 456,549
242,000 Overseas Chinese Banking Corp.-- Alien Market (Banks) 1,696,228
98,500 Overseas Union Bank Ltd. (Banks) 514,880
372,400 Singapore Airlines Ltd. (Airlines) 3,495,052
99,000 Singapore Press Holdings Ltd. (Publishing) 1,646,570
767,000 Singapore Technologies Engineering Ltd. (Machinery) 924,865
1,607,700 Singapore Telecommunications Ltd. (Telecommunication) 2,855,375
298,300 United Engineers (Construction) 306,539
615,000 United Industrial Corp. Ltd. (Real Estate) 352,525
373,700 United Overseas Bank (Banks) 2,774,725
32,000 Venture Manufacturing Ltd. (Electrical Equipment) 306,029
------------
22,480,326
-------------------------------------------------------------------------------
Spain - 6.0%
13,400 Acerinox SA (Steel) 441,557
52,000 Argentaria Corp. Bancaria de Espana (Banks) 1,185,426
63,600 Banco Bilbao Vizcaya SA (Banks) 849,064
233,600 Banco Santander Central Hispano SA (Banks) 2,350,051
14,100 Compania Espanola de Petroleos SA (Energy Resources) 170,337
8,800 Corporacion Financiera Alba SA (Multi-Industrial) 258,048
103,600 Dragados Y Construcciones SA (Construction) 1,270,185
224,400 Endesa SA (Electrical Utilities) 4,510,247
13,500 Fomento de Construcciones y Contratas SA
(Construction) 799,020
5,700 Gas Natural SDG SA (Gas Utilities) 134,825
40,900 Iberdrola SA (Utilities) 589,716
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Spain - (continued)
185,950 Repsol SA (Energy Resources) $ 3,886,933
339,103 Telefonica de Espana SA * (Telecommunication) 5,416,672
161,100 Union Electric Fenosa (Utilities) 2,300,664
------------
24,162,745
---------------------------------------------------------------------------
Sweden - 2.9%
114,900 Electrolux AB (Appliance) 2,316,701
111,100 Ericsson Telecommunications Series B (Electrical
Equipment) 3,589,530
8,180 Esselte Series B (Business Services) 69,053
17,400 Hennes & Mauritz AB Series B (Merchandising) 440,653
15,600 Mo och Domsjoe AB Series B (Paper) 477,493
18,100 Scania AB Series B (Machinery) 682,625
64,300 Skandinaviska Enskilda Banken Series A (Banks) 667,758
156,650 Svenska Handelsbanken Series A (Banks) 2,178,601
6,700 Volvo AB Series A (Auto) 189,208
39,207 Volvo AB Series B (Auto) 1,100,063
------------
11,711,685
---------------------------------------------------------------------------
Switzerland - 5.9%
356 Alusuisse-Lonza Group Ltd. (Multi-Industrial) 423,613
1,879 Baloise Holdings (Insurance) 1,573,804
995 Compagnie Financiere Richemont AG Class A (Multi-
Industrial) 1,894,361
3,712 Credit Suisse Group (Banks) 701,813
3,215 George Fischer AG (Machinery) 988,283
281 Jelmoli Holding AG (Merchandising) 285,142
320 Movenpick Holdings (Leisure) 141,733
1,993 Nestle SA (Food & Beverage) 3,939,360
2,778 Novartis AG (Health) 4,003,464
90 Pargesa Holding AG (Financial Services) 142,791
36 Roche Holding AG--CHF 100 (Health) 642,559
301 Roche Holding AG--Genussheine NPV (Health) 3,486,164
205 Schindler Holdings AG (Machinery) 332,022
418 Schindler Holdings AG--PTG Certificates (Machinery) 637,763
1,485 Schw Ruckversicher (Insurance) 2,900,889
2,423 Valora Holding AG (Merchandising) 611,877
1,703 Zurich Allied AG (Insurance) 1,000,838
------------
23,706,476
---------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $355,012,667) $396,532,015
---------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
40
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C> <C>
Preferred Stocks - 0.0%
Germany -
0.0%
3,050 Rheinmetall AG
(Defense/Aerospace) $ 48,558
-------------------------------------
Italy - 0.0%
5,075 IFI Instituto
Finanziario (Multi-
Industrial) 133,678
-------------------------------------
TOTAL PREFERRED STOCKS
(Cost $223,137) $182,236
-------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<S> <C> <C> <C>
Short-Term Obligation - 0.5%
Federal Home Loan Mortgage Corp.+
$2,000,000 5.12% 10/05/1999 $ 1,990,433
-----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATION
(Cost $1,990,433) $ 1,990,433
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $357,226,237) $398,704,684
-----------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
# This security is issued with a zero-coupon. The interest rate disclosed for
this security represents effective yield to maturity.
+ A portion of this security is segregated as collateral for initial margin
requirement on Futures transactions.
<TABLE>
<CAPTION>
Percentage of
Total Net Assets
Common and Preferred Stock Industry Classifications
<S> <C>
Airlines 1.2%
Appliance 2.5
Auto 5.5
Banks 15.8
Broadcasting 0.5
Business Services 2.6
Chemical 2.1
Computer Hardware 1.1
Construction 3.7
Defense/Aerospace 0.4
Electrical Equipment 4.7
Electrical Utilities 3.1
Energy Resources 6.2
Financial Services 3.2
Food & Beverage 2.0
Gas Utilities 0.0
Health 7.9
Industrial Services 0.1
Insurance 5.7
Leisure 0.3
Machinery 2.4
Media 0.0
Merchandising 2.5
Multi-Industrial 2.4
Nonferrous Metals 0.4
Paper 0.7
Publishing 0.4
Railroads 1.6
Real Estate 1.8
Ship Transportation 0.4
Specialty Retail 0.4
Steel 0.4
Telecommunication 13.3
Tobacco 0.8
Utilities 2.6
Wholesale 0.5
---------------------------------------------------
TOTAL COMMON AND PREFERRED STOCK 99.2%
---------------------------------------------------
</TABLE>
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.
41
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Statements of Assets and Liabilities
August 31, 1999
<TABLE>
<CAPTION>
CORE U.S.
Equity Fund
Assets:
<S> <C>
Investment in securities, at value (identified cost
$954,461,619, $739,325,430, $128,172,813, $299,494,782 and
$357,226,237, respectively) $1,213,653,217
Cash, at value(b) 1,262,143
Receivables:
Dividends and interest, at value 1,498,809
Fund shares sold 4,206,938
Variation margin --
Reimbursement from investment adviser 79,868
Other assets 43,817
-----------------------------------------------------------------------------
Total assets 1,220,744,792
-----------------------------------------------------------------------------
Liabilities:
Payables:
Fund shares repurchased 901,001
Amounts owed to affiliates 1,300,526
Variation margin 4,700
Accrued expenses and other liabilities, at value 111,274
-----------------------------------------------------------------------------
Total liabilities 2,317,501
-----------------------------------------------------------------------------
Net Assets:
Paid-in capital 839,411,583
Accumulated undistributed net investment income 804,328
Accumulated net realized gain (loss) on investment, futures
and foreign currency related transactions 119,046,115
Net unrealized gain on investments, futures and translation
of assets and liabilities denominated in foreign currencies 259,165,265
-----------------------------------------------------------------------------
NET ASSETS $1,218,427,291
-----------------------------------------------------------------------------
Net asset value, offering and redemption price per share:(a)
Class A $34.21
Class B $33.56
Class C $33.46
Institutional $34.61
Service $34.05
-----------------------------------------------------------------------------
Shares outstanding:
Class A 17,954,472
Class B 6,378,289
Class C 1,295,997
Institutional 9,691,645
Service 328,989
-----------------------------------------------------------------------------
Total shares outstanding, $.001 par value (unlimited number
of shares authorized) 35,649,392
-----------------------------------------------------------------------------
</TABLE>
(a) Maximum public offering price per share (NAV per share multiplied by
1.0582) for Class A shares of CORE U.S. Equity, CORE Large Cap Growth,
CORE Small Cap Equity, CORE Large Cap Value and CORE International Equity
is $36.20, $18.01, $10.83, $11.16 and $11.50, respectively. At redemp-
tion, 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.
(b) Includes restricted cash of $1,000,000, $840,000 and $730,000, respec-
tively for CORE U.S. Equity, CORE Large Cap Growth and CORE Large Cap
Value relating to initial margin requirements on futures transaction.
The accompanying notes are an integral part of these financial statements.
42
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
CORE Large Cap CORE Small Cap CORE Large Cap CORE International
Growth Fund Equity Fund Value Fund Equity Fund
<S> <C> <C> <C>
$868,081,737 $135,581,534 $300,907,051 $398,704,684
1,100,045 138,210 871,140 170,410
394,311 150,437 562,628 699,211
3,531,077 343,489 1,183,792 513,940
-- 6,038 -- --
93,491 80,885 75,161 66,216
16,168 7,958 11,674 390,148
---------------------------------------------------------------------------------
873,216,829 136,308,551 303,611,446 400,544,609
---------------------------------------------------------------------------------
1,277,379 711,057 153,665 142,388
801,680 141,779 218,553 375,052
68,112 -- 7,662 19,348
43,857 113,239 110,643 201,760
---------------------------------------------------------------------------------
2,191,028 966,075 490,523 738,548
---------------------------------------------------------------------------------
737,567,028 135,129,996 297,783,487 352,664,249
-- -- 478,248 2,637,600
4,870,886 (7,201,585) 3,465,457 2,990,037
128,587,887 7,414,065 1,393,731 41,514,175
---------------------------------------------------------------------------------
$871,025,801 $135,342,476 $303,120,923 $399,806,061
---------------------------------------------------------------------------------
$17.02 $10.23 $10.55 $10.87
$16.75 $10.09 $10.50 $10.81
$16.75 $10.10 $10.51 $10.82
$17.10 $10.30 $10.55 $11.00
$16.95 $10.22 $10.55 $10.93
---------------------------------------------------------------------------------
17,671,442 5,146,281 8,633,441 10,530,336
10,842,024 1,358,479 1,377,281 848,293
4,507,009 620,920 764,208 454,208
18,166,722 6,082,226 17,965,455 24,651,243
148,098 6,243 1,253 715
---------------------------------------------------------------------------------
51,335,295 13,214,149 28,741,638 36,484,795
---------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Statements of Operations
For the Seven-Month Period Ended August 31, 1999
<TABLE>
<CAPTION>
CORE U.S.
Equity Fund
<S> <C>
Investment income:
Dividends(a) $ 8,477,941
Interest 504,234
------------------------------------------------------------------------------
Total income 8,982,175
------------------------------------------------------------------------------
Expenses:
Management fees 5,212,778
Distribution and service fees(b) 2,231,754
Transfer agent fees(b) 1,018,447
Custodian fees 112,034
Registration fees 96,553
Printing fees 80,359
Professional fees 38,456
Trustee fees 6,426
Service share fees 34,586
Other 34,541
------------------------------------------------------------------------------
Total expenses 8,865,934
------------------------------------------------------------------------------
Less -- expenses reimbursed and fees waived (688,087)
------------------------------------------------------------------------------
Net expenses 8,177,847
------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 804,328
------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment, futures and
foreign currency related transactions:
Net realized gain (loss) from:
Investment transactions 107,390,321
Futures transactions 547,400
Foreign currency related transactions --
Net change in unrealized gain (loss) on:
Investments (66,419,570)
Futures (757,943)
Translation of assets and liabilities denominated in foreign
currencies --
------------------------------------------------------------------------------
Net realized and unrealized gain on investment, futures, and
foreign currency related transactions 40,760,208
------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 41,564,536
------------------------------------------------------------------------------
</TABLE>
(a) For the CORE U.S. Equity, CORE Large Cap Growth, CORE Large Cap Value and
CORE International Equity Funds, taxes withheld on dividends were
$188,196, $85,193, $7,443, and $756,799, respectively.
(b) Class-specific distribution and service and transfer agent fees were as
follows:
<TABLE>
<CAPTION>
Distribution and Service
fees Transfer Agent fees
---------------------------- -----------------------------------------------
Class A Class B Class C Class A Class B Class C Institutional Service
-------- ---------- -------- -------- -------- ------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CORE U.S. Equity Fund $901,485 $1,115,835 $214,434 $685,129 $212,009 $40,742 $77,800 $2,767
CORE Large Cap Growth
Fund 366,944 858,809 343,654 278,878 163,174 65,294 68,733 511
CORE Small Cap Equity
Fund 84,036 80,244 34,375 63,867 15,246 6,531 14,387 14
CORE Large Cap Value
Fund 88,576 40,251 23,517 67,318 7,648 4,468 41,227 1
CORE International Eq-
uity Fund 321,043 47,034 25,018 121,996 8,936 4,753 62,671 2
</TABLE>
The accompanying notes are an integral part of these financial statements.
44
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
CORE Large Cap CORE Small Cap CORE Large Cap CORE International
Growth Fund Equity Fund Value Fund Equity Fund
<S> <C> <C> <C>
$ 3,489,915 $ 940,243 $ 2,534,169 $ 5,529,675
640,310 46,896 254,574 48,544
--------------------------------------------------------------------------------
4,130,225 987,139 2,788,743 5,578,219
--------------------------------------------------------------------------------
3,300,995 689,175 869,263 1,938,801
1,569,407 198,655 152,344 393,095
576,590 100,045 120,662 198,358
78,061 68,779 78,440 333,972
114,096 91,643 52,789 76,842
80,207 85,213 57,431 32,313
39,551 37,516 40,096 46,483
6,426 6,426 4,664 6,074
6,385 176 13 20
23,069 21,408 11,667 10,405
--------------------------------------------------------------------------------
5,794,787 1,299,036 1,387,369 3,036,363
--------------------------------------------------------------------------------
(984,006) (275,311) (239,291) (223,253)
--------------------------------------------------------------------------------
4,810,781 1,023,725 1,148,078 2,813,110
--------------------------------------------------------------------------------
(680,556) (36,586) 1,640,665 2,765,109
--------------------------------------------------------------------------------
19,998,250 12,409,919 2,862,192 11,051,910
2,319,152 (296,710) 636,227 918,205
-- -- -- (179,050)
21,430,691 (11,427,160) 1,522,840 19,565,749
(638,509) 25,644 (19,531) (3,516)
-- -- -- 3,536
--------------------------------------------------------------------------------
43,109,584 711,693 5,001,728 31,356,834
--------------------------------------------------------------------------------
$ 42,429,028 $ 675,107 $ 6,642,393 $ 34,121,943
--------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Statements of Changes in Net Assets
For the Seven-Month Period Ended August 31, 1999
<TABLE>
<CAPTION>
CORE U.S.
Equity Fund
<S> <C>
From operations:
Net investment income (loss) $ 804,328
Net realized gain from investment, futures and foreign
currency related transactions 107,937,721
Net change in unrealized gain (loss) on investments, futures
and translation of assets and liabilities denominated in
foreign currencies (67,177,513)
------------------------------------------------------------------------------
Net increase in net assets resulting from operations 41,564,536
------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income
Class A shares --
Class B shares --
Class C shares --
Institutional shares --
Service shares --
------------------------------------------------------------------------------
Total distributions to shareholders --
------------------------------------------------------------------------------
From share transactions:
Proceeds from sales of shares 319,448,902
Reinvestment of dividends and distributions --
Cost of shares repurchased (246,210,936)
------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from share
transactions 73,237,966
------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) 114,802,502
------------------------------------------------------------------------------
Net assets:
Beginning of period 1,103,624,789
------------------------------------------------------------------------------
End of period $1,218,427,291
------------------------------------------------------------------------------
Accumulated undistributed net investment income $ 804,328
------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
46
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
CORE Large Cap CORE Small Cap CORE Large Cap CORE International
Growth Fund Equity Fund Value Fund Equity Fund
<S> <C> <C> <C>
$ (680,556) $ (36,586) $ 1,640,665 $ 2,765,109
22,317,402 12,113,209 3,498,419 11,791,065
20,792,182 (11,401,516) 1,503,309 19,565,769
-----------------------------------------------------------------------------
42,429,028 675,107 6,642,393 34,121,943
-----------------------------------------------------------------------------
-- -- (229,621) (2,101)
-- -- (19,258) --
-- -- (7,228) --
-- -- (950,208) --
-- -- (5) --
-----------------------------------------------------------------------------
-- -- (1,206,320) (2,101)
-----------------------------------------------------------------------------
351,963,413 32,163,634 299,579,334 76,300,041
-- -- 301,711 2,066
(127,065,442) (46,364,918) (62,866,712) (112,849,452)
-----------------------------------------------------------------------------
224,897,971 (14,201,284) 237,014,333 (36,547,345)
-----------------------------------------------------------------------------
267,326,999 (13,526,177) 242,450,406 (2,427,503)
-----------------------------------------------------------------------------
603,698,802 148,868,653 60,670,517 402,233,564
-----------------------------------------------------------------------------
$ 871,025,801 $135,342,476 $ 303,120,923 $ 399,806,061
-----------------------------------------------------------------------------
$ -- $ -- $ 478,248 $ 2,637,600
-----------------------------------------------------------------------------
</TABLE>
47
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Statements of Changes in Net Assets
For the Year Ended January 31, 1999
<TABLE>
<CAPTION>
CORE U.S.
Equity Fund
<S> <C>
From operations:
Net investment income (loss) $ 2,036,756
Net realized gain (loss) from investment, futures and
foreign currency related transactions 27,478,562
Net change in unrealized gain (loss) on investments, futures
and foreign currency related transactions 176,422,425
------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 205,937,743
------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income
Class A shares (627,909)
Class B shares --
Class C shares --
Institutional shares (1,448,951)
Service shares (34,929)
In excess of net investment income
Class A shares (111,425)
Class B shares --
Class C shares --
Institutional shares (257,121)
Service shares (6,198)
From net realized gain on investment, futures and foreign
currency related transactions
Class A shares (10,973,418)
Class B shares (2,631,225)
Class C shares (453,366)
Institutional shares (6,196,732)
Service shares (222,218)
------------------------------------------------------------------------------
Total distributions to shareholders (22,963,492)
------------------------------------------------------------------------------
From share transactions:
Proceeds from sales of shares 472,932,540
Reinvestment of dividends and distributions 21,759,127
Cost of shares repurchased (248,643,259)
------------------------------------------------------------------------------
Net increase in net assets resulting from share transactions 246,048,408
------------------------------------------------------------------------------
TOTAL INCREASE 429,022,659
------------------------------------------------------------------------------
Net assets:
Beginning of year 674,602,130
------------------------------------------------------------------------------
End of year $1,103,624,789
------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess of) net
investment income $ --
------------------------------------------------------------------------------
</TABLE>
(a) Commencement date of operations was December 31, 1998 for all share clas-
ses.
The accompanying notes are an integral part of these financial statements.
48
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
CORE Large Cap CORE Small Cap CORE Large Cap CORE International
Growth Fund Equity Fund Value Fund(a) Equity Fund
<S> <C> <C> <C>
$ (15,644) $ 173,270 $ 37,422 $ 1,407,352
(16,923,839) (18,927,424) (32,964) (8,586,417)
102,776,431 18,052,638 (109,578) 21,848,298
-----------------------------------------------------------------------------
85,836,948 (701,516) (105,120) 14,669,233
-----------------------------------------------------------------------------
-- (47,356) -- (250,453)
-- -- -- --
-- -- -- --
-- (125,897) -- (808,555)
-- (17) -- (35)
-- (6,981) -- --
-- -- -- --
-- -- -- --
(125,793) (18,557) -- --
(218) (3) -- --
(10,120) -- -- --
(4,694) -- -- --
(1,573) -- -- --
(12,174) -- -- --
(85) -- -- --
-----------------------------------------------------------------------------
(154,657) (198,811) -- (1,059,043)
-----------------------------------------------------------------------------
502,793,514 153,543,862 62,186,814 470,437,011
57,232 80,120 -- 288,383
(61,380,388) (36,515,377) (1,411,177) (111,237,527)
-----------------------------------------------------------------------------
441,470,358 117,108,605 60,775,637 359,487,867
-----------------------------------------------------------------------------
527,152,649 116,208,278 60,670,517 373,098,057
-----------------------------------------------------------------------------
76,546,153 32,660,375 -- 29,135,507
-----------------------------------------------------------------------------
$ 603,698,802 $148,868,653 $60,670,517 $ 402,233,564
-----------------------------------------------------------------------------
$ (158,558) $ (61,646) $ 37,422 $ (153,510)
-----------------------------------------------------------------------------
</TABLE>
49
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
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 CORE U.S. Equity Fund, CORE
Large Cap Growth Fund, CORE Small Cap Equity Fund, CORE Large Cap Value Fund
and the CORE International Equity Fund, collectively the "Funds" or individu-
ally a "Fund". Each 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 Funds. 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 Funds
from January 31 to August 31. Accordingly, the financial statements of the
Funds 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 an 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 Trust's Board of
Trustees.
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 Funds 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
upon current exchange rates; and (ii) purchases and sales of foreign invest-
ments, income and expenses are converted into U.S. dollars based upon cur-
rency exchange 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.
50
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
D. Forward Foreign Currency Exchange Contracts -- The CORE International 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 posi-
tions. The CORE International Equity Fund may also purchase and sell forward
contracts to seek to increase total return. All commitments are "marked-to-
market" daily at the applicable translation 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 extinguished by delivery of the currency.
Risks may arise upon entering into these contracts from the potential inabil-
ity of counterparties to meet the terms of their contracts and from unantici-
pated movements in the value of a foreign currency relative to the U.S.
dollar.
E. Option Accounting Principles -- When the Funds write 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 Funds enter
into a closing purchase transaction, the Funds realize 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 Funds realize 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
Funds purchase 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 Funds,
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
Funds have purchased expires on the stipulated expiration date, the Funds
will realize a loss in the amount of the cost of the option. If the Funds en-
ter into a closing sale transaction, the Funds will realize a gain or loss,
depending on whether the sale proceeds for the closing sale transaction are
greater or less than the cost of the option. If the Funds exercise a pur-
chased put option, the Funds 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 Funds exercise a purchased call option, the
cost of the security which the Funds purchase upon exercise will be increased
by the premium originally paid.
F. Segregation Transactions -- The Funds 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 Funds are required to segregate liq-
uid assets on the accounting records equal to or greater than the market
value of the corresponding transactions.
G. Expenses -- Expenses incurred by the Trust that do not specifically relate
to an individual fund of the Trust are generally allocated to the funds on a
straight-line or pro rata basis depending upon the nature of the expense.
Class A, Class B and Class C shareholders of the Funds bear all expenses
and fees relating to their respective Distribution and Service plans. Share-
holders of Service shares bear all expenses and fees paid to service organi-
zations. Each class of shares of the Funds separately bears its respective
class-specific transfer agency fees.
51
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
August 31, 1999
H. Federal Taxes -- It is each 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
provisions are required.
The characterization of distributions to shareholders for financial report-
ing purposes is determined in accordance with income tax rules. Therefore,
the source of each 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.
The CORE Small Cap Equity Fund has approximately $6,229,000 at August 31,
1999, (the Funds' tax year-end) of capital loss carryforward expiring in 2006
for Federal tax purposes. This amount is available to be carried forward to
offset future capital gains to the extent permitted by applicable law or reg-
ulations.
At August 31, 1999, the Funds' aggregate unrealized gains and losses based
on cost for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Tax Gross Gross Net Unrealized
Fund Cost Unrealized Gain Unrealized Loss Gain
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORE U.S. Equity $955,624,468 $288,195,962 $(30,167,213) $258,028,749
------------------------------------------------------------------------------
CORE Large Cap
Growth 739,371,161 155,297,694 (26,587,118) 128,710,576
------------------------------------------------------------------------------
CORE Small Cap
Equity 129,139,677 19,348,820 (12,906,963) 6,441,857
------------------------------------------------------------------------------
CORE Large Cap
Value 299,612,333 17,144,758 (15,850,040) 1,294,718
------------------------------------------------------------------------------
CORE Interna-
tional Equity 357,922,824 51,010,803 (10,228,943) 40,781,860
------------------------------------------------------------------------------
</TABLE>
3. AGREEMENTS
Pursuant to Investment Management Agreements ("the Agreements"), Goldman
Sachs Asset Management ("GSAM"), a separate operating division of Goldman,
Sachs & Co. ("Goldman Sachs"), serves as the investment adviser to CORE Large
Cap Growth, CORE Small Cap Equity, CORE Large Cap Value and CORE Interna-
tional Equity Fund and Goldman Sachs Funds Management, L.P. ("GSFM"), an af-
filiate of Goldman Sachs, serves as the investment adviser to CORE U.S.
Equity Fund. Under the Agreements, the respective adviser, subject to the
general supervision of the Trust's Board of Trustees, manages the Funds'
portfolios. As compensation for the services rendered pursuant to the Agree-
ments, the assumption of the expenses related thereto and administering the
Funds' business affairs, including providing facilities, the respective ad-
viser is entitled to a fee, computed daily and payable monthly, at an annual
rate equal to .75%, .75%, .85%, .60% and .85% of the average daily net assets
of CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap Equity, CORE Large
Cap Value and CORE International Equity Funds, respectively. For the period
ended August 31, 1999, the advisers for CORE U.S. Equity and CORE Large Cap
Growth have voluntarily agreed to waive a portion of their management fee
equal annually to .05% and .15%, respectively, of each Fund's average daily
net assets. The advisers may discontinue or modify these waivers in the fu-
ture at their discretion.
52
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Each adviser has voluntarily agreed to limit certain "Other Expenses" for
the CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap Equity, CORE
Large Cap Value and CORE International Equity Funds (excluding management
fees, distribution and service fees, transfer agent fees, taxes, interest,
brokerage, litigation, Service share fees, indemnification costs and extraor-
dinary expenses), to the extent such expenses exceed, on an annual basis,
.00%, .00%, .04%, .00%, and .12% of the average daily net assets of the
funds, respectively.
The Trust, on behalf of each 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 each Fund for distribution
and shareholder maintenance services equal, on an annual basis, to .25% (.50%
for CORE International Equity), 1.00% and 1.00% of the Funds' 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 Funds pursuant to
Distribution Agreements. Goldman Sachs may receive a portion of the Class A
sales load and Class B and Class C contingent deferred sales charge and has
advised the Funds that it retained approximately $248,000, $210,000, $26,000,
$47,000 and $21,000 during the period ended August 31, 1999 for the CORE U.S.
Equity, CORE Large Cap Growth, CORE Small Cap Equity, CORE Large Cap Value
and CORE International Equity Funds, respectively.
Goldman Sachs also serves as the transfer agent of the Funds for a fee.
Fees charged for such transfer agency services are calculated daily and pay-
able monthly at an annual rate as follows: .19% of the average daily net as-
sets for Class A, Class B and Class C shares and .04% of the average daily
net assets for Institutional and Service shares.
The Trust, on behalf of each Fund, has adopted a Service Plan. This plan
allows for Service shares to compensate service organizations for providing
varying 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 a annualized basis), of the average daily net asset value of the
Service shares.
For the period ended August 31, 1999, the Funds' advisers have voluntarily
agreed to waive certain fees and reimburse other expenses as follows (in
thousands):
<TABLE>
<CAPTION>
Fund Management Fees Waiver Reimbursement Total Waivers and Reimbursement
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORE U.S. Equity $347 $341 $688
--------------------------------------------------------------------------------------------
CORE Large Cap Growth 660 324 984
--------------------------------------------------------------------------------------------
CORE Small Cap Equity -- 275 275
--------------------------------------------------------------------------------------------
CORE Large Cap Value -- 239 239
--------------------------------------------------------------------------------------------
CORE International Eq-
uity -- 223 223
--------------------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
August 31, 1999
At August 31, 1999, the amounts owed to affiliates were as follows (in thou-
sands):
<TABLE>
<CAPTION>
Management Distribution Transfer
Fund Fees and Service Fees Agent Fees Total
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORE U.S. Equity $727 $347 $227 $1,301
-------------------------------------------------------------------------------
CORE Large Cap Growth 432 272 98 802
-------------------------------------------------------------------------------
CORE Small Cap Equity 99 29 14 142
-------------------------------------------------------------------------------
CORE Large Cap Value 156 38 25 219
-------------------------------------------------------------------------------
CORE International Equity 285 60 30 375
-------------------------------------------------------------------------------
</TABLE>
4. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and proceeds of sales or maturities of securities (excluding short-
term investments, futures and options) for the period ended August 31, 1999,
were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales or Maturities
--------------------------------------------------------------------------------------
<S> <C> <C>
CORE U.S. Equity $592,318,250 $487,142,120
--------------------------------------------------------------------------------------
CORE Large Cap Growth 474,330,442 239,077,147
--------------------------------------------------------------------------------------
CORE Small Cap Equity 71,726,971 82,445,566
--------------------------------------------------------------------------------------
CORE Large Cap Value 318,279,705 82,548,436
--------------------------------------------------------------------------------------
CORE International Equity 250,079,310 277,435,318
--------------------------------------------------------------------------------------
</TABLE>
For the period ended August 31, 1999, Goldman Sachs earned approximately
$5,000, $5,000, $700 and $1,800 of brokerage commissions from portfolio
transactions executed on behalf of the CORE U.S. Equity, CORE Large Cap
Growth, CORE Small Cap Equity and CORE Large Cap Value Funds, respectively.
The Funds 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 Funds are 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 Funds, depending on the
fluctuations in the value of the contracts, and are recorded for financial
reporting purposes as unrealized gains or losses. When contracts are closed,
the Funds realize a gain or loss which is reported in the Statement of Opera-
tions.
54
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
The use of futures contracts involve, to varying degrees, elements of mar-
ket risk which may exceed the amounts recognized in the Statements of Assets
and Liabilities. Changes in the value of the futures contract may not di-
rectly correlate with changes in the value of the underlying securities. This
risk may decrease the effectiveness of the Funds' strategies and potentially
result in a loss. At August 31, 1999, open futures contracts were as follows:
<TABLE>
<CAPTION>
Number of
Contracts Settlement Market Unrealized
Fund Type Long Month Value Gain (Loss)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CORE U.S. Equity Fund S&P 500 Index 3 September 1999 $ 989,850 $ (26,333)
---------------------------------------------------------------------------------------------
CORE Large Cap Growth
Fund S&P 500 Index 44 September 1999 $14,517,800 $(168,420)
---------------------------------------------------------------------------------------------
CORE Small Cap Equity
Fund Russell 2000 Index 5 September 1999 $ 1,071,000 $ 5,344
---------------------------------------------------------------------------------------------
CORE Large Cap Value
Fund S&P 500 Index 5 September 1999 $ 1,649,750 $ (18,538)
---------------------------------------------------------------------------------------------
CORE International Eq-
uity Fund FTSE 100 Index 8 September 1999 $ 802,405 $ 3,107
All Ordinaries Index 2 September 1999 94,324 (4,989)
CAC-40-10EU Index 7 September 1999 340,776 2,516
IBEX 35 Index 2 September 1999 207,804 (287)
Hang Seng Index 1 September 1999 87,638 (936)
TOPIX Index 6 September 1999 805,872 28,247
MIB 30 Index 1 September 1999 178,438 (2,337)
DAX Index 3 September 1999 419,583 8,171
---------------------
$ 2,936,840 $ 33,492
---------------------------------------------------------------------------------------------
</TABLE>
5. LINE OF CREDIT FACILITY
The Funds participated in a $250,000,000 uncommitted and a $50,000,000 com-
mitted, unsecured revolving line of credit facility which was terminated on
April 30, 1999. Effective April 30, 1999, the Funds now participate in a
$250,000,000 uncommitted and a $250,000,000 committed, unsecured revolving
line of credit facility. Under the most restrictive arrangement, each Fund
must own securities having a market value in excess of 400% of the total bank
borrowings. These facilities are to be used solely for temporary or emergency
purposes. The interest rate on borrowings is based on the Federal Funds rate.
The committed facility also requires a fee to be paid by the Funds based on
the amount of the commitment which has not been utilized. During the period
ended August 31, 1999, the Funds did not have any borrowings under any of
these facilities.
6. REPURCHASE AGREEMENTS
During the term of a repurchase agreement, the value of the underlying secu-
rities, including accrued interest, is required to equal or exceed the value
of the repurchase agreement. The underlying securities for all repurchase
agreements are held in safekeeping at each Fund's custodian.
55
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
August 31, 1999
7. JOINT REPURCHASE AGREEMENT ACCOUNT
The Funds, together with other registered investment companies having manage-
ment agreements with GSAM and GSFM or their affiliates, transfer uninvested
cash into joint accounts, the daily aggregate balance of which is invested in
one or more repurchase agreements.
At August 31, 1999, the CORE Large Cap Growth, CORE Small Cap Equity and
CORE Large Cap Value Funds had undivided interests in the repurchase agree-
ments in the joint account which equaled $13,600,000, $1,100,000 and
$800,000, respectively, in principal amount. At August 31, 1999, the follow-
ing repurchase agreements held in this joint account were fully collateral-
ized by Federal Agency obligations:
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Repurchase Agreements Amount Rate Date Cost
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Banc of America Securities LLC $1,300,000,000 5.52% 09/01/1999 $1,300,000,000
---------------------------------------------------------------------------------------
Bear Stearns & Co., Inc. 300,000,000 5.51 09/01/1999 300,000,000
---------------------------------------------------------------------------------------
Deutsche Bank Securities Inc. 1,006,800,000 5.50 09/01/1999 1,006,800,000
---------------------------------------------------------------------------------------
Lehman Brothers, Inc. 300,000,000 5.65 09/01/1999 300,000,000
---------------------------------------------------------------------------------------
Salomon Smith Barney Holdings, Inc. 200,000,000 5.50 09/01/1999 200,000,000
---------------------------------------------------------------------------------------
TOTAL JOINT REPURCHASE AGREEMENT ACCOUNT $3,106,800,000
---------------------------------------------------------------------------------------
</TABLE>
8. OTHER MATTERS
As of August 31, 1999, Goldman, Sachs & Co. Profit Sharing Master Trust was
the beneficial owner of approximately 13% of the outstanding shares of the
CORE U.S. Equity Fund. In addition, the following Goldman Sachs Asset Alloca-
tion Portfolios were beneficial owners of the Funds (as a percentage of out-
standing shares):
<TABLE>
<CAPTION>
Goldman Sachs Goldman Sachs Goldman Sachs Goldman Sachs Goldman Sachs
Conservative Strategy Balanced Strategy Growth and Income Growth Strategy Aggressive Growth
Fund Portfolio Portfolio Strategy Portfolio Portfolio Strategy Portfolio
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CORE Large Cap Growth 0.1% 1.0% 7.3% 6.3% 2.9%
----------------------------------------------------------------------------------------------------------------------
CORE Small Cap Equity -- 1.3 11.9 10.4 5.5
----------------------------------------------------------------------------------------------------------------------
CORE Large Cap Value 0.5 2.9 20.8 21.0 10.2
----------------------------------------------------------------------------------------------------------------------
CORE International Eq-
uity -- 5.2 23.7 21.3 9.3
----------------------------------------------------------------------------------------------------------------------
</TABLE>
56
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
9. CERTAIN RECLASSIFICATIONS
In accordance with Statement of Position 93-2, the CORE Large Cap Growth Fund
reclassified $838,413 from paid-in capital and $701 from accumulated net re-
alized gain on investment and futures transactions to accumulated undistrib-
uted net investment income. CORE Small Cap Equity reclassified $98,232 from
paid-in capital to accumulated undistributed net investment income. CORE
Large Cap Value reclassified $2 from accumulated undistributed net investment
income to accumulated net realized gain on investment and futures transac-
tions, and $6,483 from paid-in capital to accumulated undistributed net in-
vestment income. CORE International Equity Fund reclassified $28,102 and $433
from accumulated net realized gain on investment, futures and foreign cur-
rency related transactions to accumulated undistributed net investment income
and paid-in capital, respectively. These reclassifications have no impact on
the net asset values of each Fund and are designed to present each Fund's
capital accounts on a tax basis.
Goldman Sachs Trust -- CORE Equity Funds -- Tax Information (unaudited)
During the tax year ended August 31, 1999, 53.80% of the ordi-
nary income dividends paid by the CORE Large Cap Value Fund, qual-
ify for the dividends received deduction available for
corporations.
57
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
August 31, 1999
10. SUMMARY OF SHARE TRANSACTIONS
Share activity for the seven-month period ended August 31, 1999, is as fol-
lows:
<TABLE>
<CAPTION>
CORE U.S. Equity Fund
-----------------------------
Shares Dollars
-----------------------------
<S> <C> <C>
Class A Shares
Shares sold 4,480,478 $152,209,945
Reinvestment of dividends and distributions -- --
Shares repurchased (4,885,988) (165,197,641)
-----------------------------
(405,510) (12,987,696)
---------------------------------------------------------------------
Class B Shares
Shares sold 2,114,834 70,617,885
Reinvestment of dividends and distributions -- --
Shares repurchased (424,409) (14,199,866)
-----------------------------
1,690,425 56,418,019
---------------------------------------------------------------------
Class C Shares
Shares sold 622,703 20,790,097
Reinvestment of dividends and distributions -- --
Shares repurchased (157,393) (5,321,657)
-----------------------------
465,310 15,468,440
----------------------------------------------------------------------
Institutional Shares
Shares sold 2,156,813 74,023,816
Reinvestment of dividends and distributions -- --
Shares repurchased (1,693,849) (58,817,319)
-----------------------------
462,964 15,206,497
----------------------------------------------------------------------
Service Shares
Shares sold 53,313 1,807,159
Reinvestment of dividends and distributions -- --
Shares repurchased (77,444) (2,674,453)
-----------------------------
(24,131) (867,294)
---------------------------------------------------------------------
NET INCREASE (DECREASE) 2,189,058 $ 73,237,966
---------------------------------------------------------------------
</TABLE>
58
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
CORE Large Cap Value
CORE Large Cap Growth Fund CORE Small Cap Equity Fund Fund CORE International Equity Fund
------------------------------------------------------------------------------------------------------------------------
Shares Dollars Shares Dollars Shares Dollars Shares Dollars
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10,470,228 $ 170,184,476 1,258,148 $ 13,030,383 9,581,268 $104,106,541 4,236,762 $ 43,587,990
-- -- -- -- 20,832 227,047 193 2,066
(3,654,092) (60,336,764) (2,417,812) (24,600,070) (1,624,984) (18,072,273) (4,760,025) (49,081,701)
------------------------------------------------------------------------------------------------------------------------
6,816,136 109,847,712 (1,159,664) (11,569,687) 7,977,116 86,261,315 (523,070) (5,491,645)
------------------------------------------------------------------------------------------------------------------------
5,780,900 93,035,450 301,937 3,002,544 1,385,917 15,120,099 209,022 2,180,794
-- -- -- -- 1,345 14,579 -- --
(801,603) (12,987,080) (473,346) (4,654,066) (43,481) (468,504) (104,302) (1,068,660)
------------------------------------------------------------------------------------------------------------------------
4,979,297 80,048,370 (171,409) (1,651,522) 1,343,781 14,666,174 104,720 1,112,134
------------------------------------------------------------------------------------------------------------------------
2,791,478 45,140,043 159,684 1,608,796 751,112 8,221,628 495,659 5,019,291
-- -- -- -- 610 6,613 -- --
(604,096) (9,757,233) (189,207) (1,825,005) (13,955) (152,653) (417,071) (4,248,461)
------------------------------------------------------------------------------------------------------------------------
2,187,382 35,382,810 (29,523) (216,209) 737,767 8,075,588 78,588 770,830
------------------------------------------------------------------------------------------------------------------------
2,587,072 42,841,502 1,430,824 14,494,462 16,847,196 172,118,566 2,418,684 25,505,971
-- -- -- -- 4,958 53,468 -- --
(2,662,983) (43,943,062) (1,498,950) (15,266,801) (4,143,528) (44,173,282) (5,665,112) (58,430,254)
------------------------------------------------------------------------------------------------------------------------
(75,911) (1,101,560) (68,126) (772,339) 12,708,626 127,998,752 (3,246,428) (32,924,283)
------------------------------------------------------------------------------------------------------------------------
47,403 761,942 2,880 27,449 1,092 12,500 553 5,995
-- -- -- -- 1 4 -- --
(2,545) (41,303) (1,987) (18,976) -- -- (2,003) (20,376)
------------------------------------------------------------------------------------------------------------------------
44,858 720,639 893 8,473 1,093 12,504 (1,450) (14,381)
------------------------------------------------------------------------------------------------------------------------
13,951,762 $ 224,897,971 (1,427,829) $ (14,201,284) 22,768,383 $237,014,333 (3,587,640) $ (36,547,345)
------------------------------------------------------------------------------------------------------------------------
</TABLE>
59
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
August 31, 1999
11. SUMMARY OF SHARE TRANSACTIONS
Share activity for the year ended January 31, 1999, is as follows:
<TABLE>
<CAPTION>
CORE U.S. Equity Fund
---------------------
Shares Dollars
---------------------
<S> <C> <C>
Class A Shares
Shares sold 8,753,952 $ 259,032,390
Reinvestment of dividends and distributions 381,760 11,200,848
Shares repurchased (5,761,134) (166,304,148)
---------------------
3,374,578 103,929,090
-----------------------------------------------------------------------
Class B Shares
Shares sold 2,857,310 83,492,448
Reinvestment of dividends and distributions 83,374 2,414,741
Shares repurchased (501,968) (14,454,259)
---------------------
2,438,716 71,452,930
-----------------------------------------------------------------------
Class C Shares
Shares sold 670,600 19,394,950
Reinvestment of dividends and distributions 13,055 377,761
Shares repurchased (91,806) (2,614,971)
---------------------
591,849 17,157,740
-----------------------------------------------------------------------
Institutional Shares
Shares sold 3,495,701 106,922,172
Reinvestment of dividends and distributions 252,278 7,502,432
Shares repurchased (2,092,487) (62,588,379)
---------------------
1,655,492 51,836,225
-----------------------------------------------------------------------
Service Shares
Shares sold 138,492 4,090,580
Reinvestment of dividends and distributions 8,981 263,345
Shares repurchased (89,923) (2,681,502)
---------------------
57,550 1,672,423
-----------------------------------------------------------------------
NET INCREASE 8,118,185 $ 246,048,408
-----------------------------------------------------------------------
</TABLE>
(a) Commencement date of operations was December 31, 1998 for all share clas-
ses.
60
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
CORE Large Cap Value
CORE Large Cap Growth Fund CORE Small Cap Equity Fund Fund(a) CORE International Equity Fund
----------------------------------------------------------------------------------------------------------------------
Shares Dollars Shares Dollars Shares Dollars Shares Dollars
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8,392,008 $ 114,907,937 6,683,657 $ 62,993,476 659,370 $ 6,646,109 16,982,750 $ 159,894,304
775 9,734 5,387 51,508 -- -- 25,532 247,660
(2,029,343) (26,663,301) (1,432,586) (14,382,982) (3,045) (30,471) (6,723,268) (65,336,060)
----------------------------------------------------------------------------------------------------------------------
6,363,440 88,254,370 5,256,458 48,662,002 656,325 6,615,638 10,285,014 94,805,904
----------------------------------------------------------------------------------------------------------------------
5,276,877 72,837,485 828,354 8,824,797 33,500 341,048 515,393 5,051,846
1,075 13,374 -- -- -- -- -- --
(577,338) (7,608,153) (241,316) (2,380,103) -- -- (67,362) (640,971)
----------------------------------------------------------------------------------------------------------------------
4,700,614 65,242,706 587,038 6,444,694 33,500 341,048 448,031 4,410,875
----------------------------------------------------------------------------------------------------------------------
2,156,694 29,856,923 565,318 5,743,510 26,441 266,200 308,917 2,996,602
93 1,154 -- -- -- -- -- --
(183,652) (2,472,936) (156,900) (1,557,935) -- -- (107,735) (1,051,525)
----------------------------------------------------------------------------------------------------------------------
1,973,135 27,385,141 408,418 4,185,575 26,441 266,200 201,182 1,945,077
----------------------------------------------------------------------------------------------------------------------
19,639,867 283,752,115 7,133,876 75,923,060 5,393,552 54,931,857 30,484,309 302,474,224
2,288 32,678 2,982 28,592 -- -- 4,168 40,723
(1,788,450) (24,482,623) (1,837,364) (18,190,952) (136,723) (1,380,706) (4,511,270) (44,208,971)
----------------------------------------------------------------------------------------------------------------------
17,853,705 259,302,170 5,299,494 57,760,700 5,256,829 53,551,151 25,977,207 258,305,976
----------------------------------------------------------------------------------------------------------------------
105,509 1,439,054 5,527 59,019 160 1,600 2,004 20,035
21 292 2 20 -- -- -- --
(11,909) (153,375) (339) (3,405) -- -- -- --
----------------------------------------------------------------------------------------------------------------------
93,621 1,285,971 5,190 55,634 160 1,600 2,004 20,035
----------------------------------------------------------------------------------------------------------------------
30,984,515 $ 441,470,358 11,556,598 $ 117,108,605 5,973,255 $60,775,637 36,913,438 $ 359,487,867
----------------------------------------------------------------------------------------------------------------------
</TABLE>
61
<PAGE>
GOLDMAN SACHS CORE U.S. 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 $32.98 $ 0.03 $1.20 $ -- $ -- $ -- $ 1.23
1999 - Class B Shares 32.50 (0.11) 1.17 -- -- -- 1.06
1999 - Class C Shares 32.40 (0.10) 1.16 -- -- -- 1.06
1999 - Institutional
Shares 33.29 0.11 1.21 -- -- -- 1.32
1999 - Service Shares 32.85 0.01 1.19 -- -- -- 1.20
FOR THE YEARS ENDED JANUARY 31,
1999 - Class A Shares 26.59 0.04 7.02 (0.03) (0.01) (0.63) 6.39
1999 - Class B Shares 26.32 (0.10) 6.91 -- -- (0.63) 6.18
1999 - Class C Shares 26.24 (0.10) 6.89 -- -- (0.63) 6.16
1999 - Institutional
Shares 26.79 0.20 7.11 (0.15) (0.03) (0.63) 6.50
1999 - Service Shares 26.53 0.06 7.01 (0.10) (0.02) (0.63) 6.32
----------------------------------------------------------------------------------------------------------------
1998 - Class A Shares 23.32 0.11 5.63 (0.12) -- (2.35) 3.27
1998 - Class B Shares 23.18 0.11 5.44 -- (0.06) (2.35) 3.14
1998 - Class C Shares
(commenced August 15,
1997) 27.48 0.03 1.22 -- (0.14) (2.35) (1.24)
1998 - Institutional
Shares 23.44 0.30 5.65 (0.24) (0.01) (2.35) 3.35
1998 - Service Shares 23.27 0.19 5.57 (0.07) (0.08) (2.35) 3.26
----------------------------------------------------------------------------------------------------------------
1997 - Class A Shares 19.66 0.16 4.46 (0.16) -- (0.80) 3.66
1997 - Class B Shares
(commenced May 1, 1996) 20.44 0.04 3.70 (0.04) (0.16) (0.80) 2.74
1997 - Institutional
Shares 19.71 0.30 4.51 (0.28) -- (0.80) 3.73
1997 - Service Shares
(commenced June 7, 1996) 21.02 0.13 3.15 (0.13) (0.10) (0.80) 2.25
----------------------------------------------------------------------------------------------------------------
1996 - Class A Shares 14.61 0.19 5.43 (0.16) -- (0.41) 5.05
1996 - Institutional
Shares (commenced June
15, 1995) 16.97 0.16 3.23 (0.24) -- (0.41) 2.74
----------------------------------------------------------------------------------------------------------------
</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.
62
<PAGE>
GOLDMAN SACHS CORE U.S. EQUITY FUND
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver
of fees or expense limitations
-----------------------------------
Net assets Ratio of Ratio of
Net asset at end of Ratio of net investment Ratio of net investment Portfolio
value, end Total period net expenses to income (loss) to expenses to income (loss) to turnover
of period return(b) (in 000s) average net assets average net assets average net assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$34.21 3.73%(d) $614,310 1.14%(c) 0.15%(c) 1.24%(c) 0.05%(c) 41.84%(d)
33.56 3.26(d) 214,087 1.89(c) (0.60)(c) 1.99(c) (0.70)(c) 41.84(d)
33.46 3.27(d) 43,361 1.89(c) (0.61)(c) 1.99(c) (0.71)(c) 41.84(d)
34.61 3.97(d) 335,465 0.74(c) 0.54(c) 0.84(c) 0.44(c) 41.84(d)
34.05 3.65(d) 11,204 1.24(c) 0.06(c) 1.34(c) (0.04)(c) 41.84(d)
32.98 26.89 605,566 1.23 0.15 1.36 0.02 63.79
32.50 26.19 152,347 1.85 (0.50) 1.98 (0.63) 63.79
32.40 26.19 26,912 1.87 (0.53) 2.00 (0.66) 63.79
33.29 27.65 307,200 0.69 0.69 0.82 0.56 63.79
32.85 27.00 11,600 1.19 0.19 1.32 0.06 63.79
- ------------------------------------------------------------------------------------------------------------------------------
26.59 24.96 398,393 1.28 0.51 1.47 0.32 65.89
26.32 24.28 59,208 1.79 (0.05) 1.96 (0.22) 65.89
26.24 4.85(d) 6,267 1.78(c) (0.21)(c) 1.95(c) (0.38)(c) 65.89
26.79 25.76 202,893 0.65 1.16 0.82 0.99 65.89
26.53 25.11 7,841 1.15 0.62 1.32 0.45 65.89
- ------------------------------------------------------------------------------------------------------------------------------
23.32 23.75 225,968 1.29 0.91 1.53 0.67 37.28
23.18 18.59(d) 17,258 1.83(c) 0.06(c) 2.00(c) (0.11)(c) 37.28
23.44 24.63 148,942 0.65 1.52 0.85 1.32 37.28
23.27 15.92(d) 3,666 1.15(c) 0.69(c) 1.35(c) 0.49(c) 37.28
- ------------------------------------------------------------------------------------------------------------------------------
19.66 38.63 129,045 1.25 1.01 1.55 0.71 39.35
19.71 20.14(d) 64,829 0.65(c) 1.49(c) 0.96(c) 1.18(c) 39.35
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
63
<PAGE>
GOLDMAN SACHS CORE LARGE CAP 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 In excess
value, Net Net realized From net of net Net increase
beginning investment and unrealized investment investment From net in net asset
of period income (loss) gain 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 $16.17 $(0.01) $0.86 $ -- $ -- $ -- $0.85
1999 - Class B Shares 15.98 (0.07) 0.84 -- -- -- 0.77
1999 - Class C Shares 15.99 (0.07) 0.83 -- -- -- 0.76
1999 - Institutional
Shares 16.21 0.03 0.86 -- -- -- 0.89
1999 - Service Shares 16.11 (0.02) 0.86 -- -- -- 0.84
FOR THE YEAR ENDED JANUARY 31,
1999 - Class A Shares 11.97 0.01 4.19 -- -- -- 4.20
1999 - Class B Shares 11.92 (0.06) 4.12 -- -- -- 4.06
1999 - Class C Shares 11.93 (0.05) 4.11 -- -- -- 4.06
1999 - Institutional
Shares 11.97 0.02 4.23 -- (0.01) -- 4.24
1999 - Service Shares 11.95 (0.01) 4.17 -- -- -- 4.16
FOR THE PERIOD ENDED JANUARY 31,
1998 - Class A Shares
(commenced May 1, 1997) 10.00 0.01 2.35 (0.01) -- (0.38) 1.97
1998 - Class B Shares
(commenced May 1, 1997) 10.00 (0.03) 2.33 -- -- (0.38) 1.92
1998 - Class C Shares
(commenced August 15,
1997) 11.80 (0.02) 0.54 -- (0.01) (0.38) 0.13
1998 - Institutional
Shares (commenced May 1,
1997) 10.00 0.01 2.35 (0.01) -- (0.38) 1.97
1998 - Service Shares
(commenced May 1, 1997) 10.00 (0.02) 2.35 -- -- (0.38) 1.95
</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.
64
<PAGE>
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver
of fees or expense limitations
-----------------------------------
Net assets Ratio of Ratio of
Net asset at end of Ratio of net investment Ratio of net investment Portfolio
value, end Total period net expenses to income (loss) to expenses to (loss) to turnover
of period return(b) (in 000s) average net assets average net assets average net assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$17.02 5.26%(d) $300,684 1.04%(c) (0.11)%(c) 1.26%(c) (0.33)%(c) 32.74%(d)
16.75 4.82(d) 181,626 1.79(c) (0.87)(c) 2.01(c) (1.09)(c) 32.74(d)
16.75 4.75(d) 75,502 1.79(c) (0.87)(c) 2.01(c) (1.09)(c) 32.74(d)
17.10 5.49(d) 310,704 0.64(c) 0.31(c) 0.86(c) 0.09(c) 32.74(d)
16.95 5.21(d) 2,510 1.14(c) (0.21)(c) 1.36(c) (0.43)(c) 32.74(d)
16.17 35.10 175,510 0.97 0.05 1.46 (0.44) 63.15
15.98 34.07 93,711 1.74 (0.73) 2.11 (1.10) 63.15
15.99 34.04 37,081 1.74 (0.74) 2.11 (1.11) 63.15
16.21 35.54 295,734 0.65 0.35 1.02 (0.02) 63.15
16.11 34.85 1,663 1.15 (0.16) 1.52 (0.53) 63.15
11.97 23.79(d) 53,786 0.91(c) 0.12(c) 2.40(c) (1.37)(c) 74.97(d)
11.92 23.26(d) 13,857 1.67(c) (0.72)(c) 2.91(c) (1.96)(c) 74.97(d)
11.93 4.56(d) 4,132 1.68(c) (0.76)(c) 2.92(c) (2.00)(c) 74.97(d)
11.97 23.89(d) 4,656 0.72(c) 0.42(c) 1.96(c) (0.82)(c) 74.97(d)
11.95 23.56(d) 115 1.17(c) (0.21)(c) 2.41(c) (1.45)(c) 74.97(d)
</TABLE>
- -------------------------------------------------------------------------------
65
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from Distributions to
investment operations(a) shareholders
---------------------------- -------------------------
Net asset
value, Net Net realized From net Net increase
beginning investment and unrealized investment From net in net asset
of period income (loss) gain (loss) income realized gains value
FOR THE SEVEN-MONTH PERIOD ENDED AUGUST 31,
<S> <C> <C> <C> <C> <C> <C>
1999 - Class A Shares $10.16 $(0.01) $0.08 $ -- $ -- $0.07
1999 - Class B Shares 10.07 (0.05) 0.07 -- -- 0.02
1999 - Class C Shares 10.08 (0.05) 0.07 -- -- 0.02
1999 - Institutional
Shares 10.20 0.02 0.08 -- -- 0.10
1999 - Service Shares 10.16 (0.01) 0.07 -- -- 0.06
FOR THE YEAR ENDED JANUARY 31,
1999 - Class A Shares 10.59 0.01 (0.43) (0.01) -- (0.43)
1999 - Class B Shares 10.56 (0.05) (0.44) -- -- (0.49)
1999 - Class C Shares 10.57 (0.04) (0.45) -- -- (0.49)
1999 - Institutional
Shares 10.61 0.04 (0.43) (0.02) -- (0.41)
1999 - Service Shares 10.60 0.01 (0.44) (0.01) -- (0.44)
FOR THE PERIOD ENDED JANUARY 31,
1998 - Class A Shares
(commenced August 15,
1997) 10.00 (0.01) 0.65 -- (0.05) 0.59
1998 - Class B Shares
(commenced August 15,
1997) 10.00 (0.03) 0.64 -- (0.05) 0.56
1998 - Class C Shares
(commenced August 15,
1997) 10.00 (0.02) 0.64 -- (0.05) 0.57
1998 - Institutional
Shares (commenced August
15, 1997) 10.00 0.01 0.65 -- (0.05) 0.61
1998 - Service Shares
(commenced August 15,
1997) 10.00 0.01 0.64 -- (0.05) 0.60
</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.
66
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver
of fees or expense limitations
-----------------------------------
Net assets Ratio of Ratio of Ratio of
Net asset at end of net expenses net investment Ratio of net investment Portfolio
value, end Total period to average income (loss) to expenses to loss to turnover
of period return(b) (in 000s) net assets average net assets average net assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$10.23 0.69%(d) $52,660 1.33%(c) (0.12)%(c) 1.67%(c) (0.46)%(c) 52.03%(d)
10.09 0.20(d) 13,711 2.08(c) (0.86)(c) 2.42(c) (1.20)(c) 52.03(d)
10.10 0.20(d) 6,274 2.08(c) (0.86)(c) 2.42(c) (1.20)(c) 52.03(d)
10.30 0.98(d) 62,633 0.93(c) 0.28(c) 1.27(c) (0.06)(c) 52.03(d)
10.22 0.59(d) 64 1.43(c) (0.22)(c) 1.77(c) (0.56)(c) 52.03(d)
10.16 (3.97) 64,087 1.31 0.08 2.00 (0.61) 75.38
10.07 (4.64) 15,406 2.00 (0.55) 2.62 (1.17) 75.38
10.08 (4.64) 6,559 2.01 (0.56) 2.63 (1.18) 75.38
10.20 (3.64) 62,763 0.94 0.60 1.56 (0.02) 75.38
10.16 (4.07) 54 1.44 0.01 2.06 (0.61) 75.38
10.59 6.37(d) 11,118 1.25(c) (0.36)(c) 3.92(c) (3.03)(c) 37.65(d)
10.56 6.07(d) 9,957 1.95(c) (1.04)(c) 4.37(c) (3.46)(c) 37.65(d)
10.57 6.17(d) 2,557 1.95(c) (1.07)(c) 4.37(c) (3.49)(c) 37.65(d)
10.61 6.57(d) 9,026 0.95(c) 0.15(c) 3.37(c) (2.27)(c) 37.65(d)
10.60 6.47(d) 2 1.45(c) 0.40(c) 3.87(c) (2.02)(c) 37.65(d)
</TABLE>
- -------------------------------------------------------------------------------
67
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from Distributions to
investment operations(a) shareholders
------------------------- -------------------------
Net asset
value, Net Net realized From net Net increase
beginning investment and unrealized investment From net in net asset
of period income gain income realized gains value
FOR THE SEVEN-MONTH PERIOD ENDED AUGUST 31,
<S> <C> <C> <C> <C> <C> <C>
1999 - Class A Shares $10.15 $0.04 $0.40 $(0.04) $ -- $0.40
1999 - Class B Shares 10.15 0.01 0.36 (0.02) -- 0.35
1999 - Class C Shares 10.15 0.01 0.37 (0.02) -- 0.36
1999 - Institutional
Shares 10.16 0.06 0.38 (0.05) -- 0.39
1999 - Service Shares 10.16 0.02 0.40 (0.03) -- 0.39
FOR THE PERIOD ENDED JANUARY 31,
1999 - Class A Shares
(commenced December 31,
1998) 10.00 0.01 0.14 -- -- 0.15
1999 - Class B Shares
(commenced December 31,
1998) 10.00 -- 0.15 -- -- 0.15
1999 - Class C Shares
(commenced December 31,
1998) 10.00 -- 0.15 -- -- 0.15
1999 - Institutional
Shares (commenced Decem-
ber 31, 1998) 10.00 0.01 0.15 -- -- 0.16
1999 - Service Shares
(commenced December 31,
1998) 10.00 0.02 0.14 -- -- 0.16
</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.
68
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver
of fees or expense limitations
------------------------------------------
Net assets Ratio of Ratio of
Net asset at end of Ratio of net investment Ratio of net investment income
value, end Total period net expenses to income to expenses to (loss) to
of period return(b)(d) (in 000s) average net assets(c) average net assets(c) average net assets(c) average net assets(c)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$10.55 4.31% 91,072 1.04% 0.87% 1.21% 0.70%
10.50 3.68 14,464 1.79 0.05 1.96 (0.12)
10.51 3.73 8,032 1.79 0.09 1.96 (0.08)
10.55 4.35 189,540 0.64 1.29 0.81 1.12
10.55 4.11 13 1.14 0.72 1.31 0.55
- -----------------------------------------------------------------------------------------------------------------------------
10.15 1.50 6,665 1.08 1.45 8.03 (5.50)
10.15 1.50 340 1.82 0.84 8.77 (6.11)
10.15 1.50 268 1.83 0.70 8.78 (6.25)
10.16 1.60 53,396 0.66 1.97 7.61 (4.98)
10.16 1.60 2 1.16 2.17 8.11 (4.78)
<CAPTION>
Portfolio
turnover
rate(d)
- -----------------------------------------------------------------------------------------------------------------------------
<C>
36.10%
36.10
36.10
36.10
36.10
- -----------------------------------------------------------------------------------------------------------------------------
0.00
0.00
0.00
0.00
0.00
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
69
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from Distributions to
investment operations(a) shareholders
------------------------- -------------------------
Net asset Net Net increase
value, investment Net realized From net (decrease)
beginning income and unrealized investment From net in net asset
of period (loss) gain (loss) income realized gains value
FOR THE SEVEN-MONTH PERIOD ENDED AUGUST 31,
<S> <C> <C> <C> <C> <C> <C>
1999 - Class A Shares $ 9.98 $ 0.05 $0.84 $ -- $ -- $ 0.89
1999 - Class B Shares 9.95 0.01 0.85 -- -- 0.86
1999 - Class C Shares 9.96 0.01 0.85 -- -- 0.86
1999 - Institutional
Shares 10.06 0.09 0.85 -- -- 0.94
1999 - Service Shares 10.02 0.01 0.90 -- -- 0.91
FOR THE YEAR ENDED JANUARY 31,
1999 - Class A Shares 9.22 (0.01) 0.79 (0.02) -- 0.76
1999 - Class B Shares 9.21 -- 0.74 -- -- 0.74
1999 - Class C Shares 9.22 -- 0.74 -- -- 0.74
1999 - Institutional
Shares 9.24 0.05 0.80 (0.03) -- 0.82
1999 - Service Shares 9.23 -- 0.81 (0.02) -- 0.79
FOR THE PERIOD ENDED JANUARY 31,
1998 - Class A Shares
(commenced August 15,
1997) 10.00 -- (0.78) -- -- (0.78)
1998 - Class B Shares
(commenced August 15,
1997) 10.00 (0.02) (0.77) -- -- (0.79)
1998 - Class C Shares
(commenced August 15,
1997) 10.00 (0.02) (0.76) -- -- (0.78)
1998 - Institutional
Shares (commenced August
15, 1997) 10.00 0.02 (0.76) (0.02) -- (0.76)
1998 - Service Shares
(commenced August 15,
1997) 10.00 0.01 (0.78) -- -- (0.77)
</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.
70
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver
of fees or expense limitations
-----------------------------------
Net assets Ratio of Ratio of
Net asset at end of Ratio of net investment Ratio of net investment Portfolio
value, end Total period net expenses to income (loss) to expenses to income (loss) to turnover
of period return(b) (in 000s) average net assets average net assets average net assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$10.87 8.92%(d) $114,502 1.66%(c) 0.78%(c) 1.76%(c) 0.68%(c) 64.97%(d)
10.81 8.64(d) 9,171 2.16(c) 0.26(c) 2.26(c) 0.16(c) 64.97(d)
10.82 8.63(d) 4,913 2.16(c) 0.23(c) 2.26(c) 0.13(c) 64.97(d)
11.00 9.34(d) 271,212 1.01(c) 1.43(c) 1.11(c) 1.33(c) 64.97(d)
10.93 9.08(d) 8 1.51(c) 0.07(c) 1.61(c) (0.03)(c) 64.97(d)
9.98 8.37 110,338 1.63 (0.11) 1.94 (0.42) 194.61
9.95 8.03 7,401 2.08 (0.03) 2.39 (0.34) 194.61
9.96 8.03 3,742 2.08 (0.04) 2.39 (0.35) 194.61
10.06 9.20 280,731 1.01 0.84 1.32 0.53 194.61
10.02 8.74 22 1.50 0.02 1.81 (0.29) 194.61
9.22 (7.66)(d) 7,087 1.50(c) (0.27)(c) 4.87(c) (3.90)(c) 25.16(d)
9.21 (7.90)(d) 2,721 2.00(c) (0.72)(c) 5.12(c) (3.84)(c) 25.16(d)
9.22 (7.80)(d) 1,608 2.00(c) (0.73)(c) 5.12(c) (3.85)(c) 25.16(d)
9.24 (7.45)(d) 17,719 1.00(c) 0.59 (c) 4.12(c) (2.53)(c) 25.16(d)
9.23 (7.70)(d) 1 1.50(c) 0.26 (c) 4.62(c) (2.86)(c) 25.16(d)
</TABLE>
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71
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Report of Independent Public Accountants
To the Shareholders and Board of Trustees of Goldman Sachs Trust - CORE Eq-
uity Funds:
We have audited the accompanying statements of assets and liabilities of
Goldman Sachs CORE U.S. Equity Fund, CORE Large Cap Growth Fund, CORE Small
Cap Equity Fund, CORE Large Cap Value Fund and CORE International Equity
Fund, portfolios of Goldman Sachs Trust--Equity Funds (a Delaware Business
Trust), including the statements of investments, as of August 31, 1999, and
the related statements of operations, the statements of changes in net assets
and the financial highlights for the periods presented. These financial
statements and the financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing 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 CORE U.S. Equity Fund, CORE Large Cap Growth Fund, CORE
Small Cap Equity Fund, CORE Large Cap Value Fund and CORE International Eq-
uity Fund as of August 31, 1999, the results of their operations, the changes
in their 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
72
<PAGE>
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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
Investment Adviser,
Distributor and Transfer Agent
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.
CORE International Equity Fund's foreign investments may be more volatile than
an investment in U.S. securities and are subject to the risks of currency
fluctuations and political developments.
The stocks of smaller companies are often associated with higher risks,
including greater volatility, than stocks of larger companies.
CORE(SM) is a service mark of Goldman, Sachs & Co.
Copyright 1999 Goldman, Sachs & Co. All rights reserved.
Date of first use: October 15, 1999 COREAR / 90K / 10-99
