<PAGE>
Goldman Sachs Funds
Core Equity Funds
[GRAPHIC APPEARS HERE]
Annual Report January 31, 1999
Long-term capital growth potential through diversified portfolios of stocks with
attractive quantitative and qualitative rankings.
[LOGO OF GOLDMAN SACHS APPEARS HERE]
<PAGE>
Market Overview
Goldman Sachs CORE Equity Funds
Dear Shareholder,
During the review period, events that began in Asia in 1997 continued to roil
financial markets around the world.
- ----------------------
. Not FDIC insured
. May Lose Value
. No Bank Guarantee
- ----------------------
. Market Review: Global Markets Fluctuate Along With Investor Confidence -
The arrival of 1998 heralded another step up in the staircase pattern of
global equity prices. Worries about contagion from Asia and Japan receded
rapidly from the prior months, and the deflationary influence from the East
helped cool the U.S. and European economies, thereby lowering bond yields
and increasing equity valuations. In contrast, the second half of the
period was marked by a trend of escalating volatility. Political and
economic woes in Indonesia, Russia and Brazil affected market performance
around the globe, while the continuing weakness of the Japanese yen placed
further pressure on the emerging Asian economies. The consequent collapse
of several hedge funds further upset the financial sector and, in response,
investors sought security in the form of fixed income investments.
By period end, equity markets rebounded on renewed confidence that
concerted action from the G-7, including an easing of rates by the Federal
Reserve Board, would help avert a global financial meltdown. Markets were
further boosted by encouraging news out of Japan, which appeared to
indicate it may finally begin to address its structural problems.
. Market Outlook: Optimism Prevails -- We are generally positive on the U.S.
economy. Over the last decade, global communication has increased,
resulting from significant technological advances as well as a generally
stable world political environment. We believe that this trend, combined
with favorable demographic trends (including the aging of the baby
boomers), will benefit U.S. companies over the long term.
In Europe, with the advent of the single currency, the euro, prospects for
equities are bright. We believe that the consolidation process within
industries will continue unabated. As companies strive to lower their costs
and to dominate in Europe, investors stand to benefit.
In Japan, it may take some time until we start to see clear signs of a
recovery. However, the government seems to be moving in the right direction
by, for example, engineering cuts in taxes. Also, a number of Japanese
companies, including those that had been reluctant to restructure their
businesses, have finally come to grips with their problems. This may mean
that once corporate revenues stop declining further, there could be a
substantive pick-up in bottom-line earnings for next year. As investors'
outlook for corporate profit improves, we believe the equity market is
likely to stabilize and move upward.
Going forward, macro risks to Asian markets include a slowing of the U.S.
and European economies and a possible renewed weakness in the yen. We also
believe that investors will begin to focus on the timing of economic
recoveries in Asian countries, as well as a possible earnings recovery for
many companies. Therefore, stock selectivity will become more important in
the coming year, since not all companies or sectors will participate
equally in the economic recovery.
We encourage you to maintain your long term investment program, and look
forward to serving your investment needs in the years ahead.
Sincerely,
/s/ David B. Ford /s/ John P. McNulty
David B. Ford John P. McNulty
Co-Head, Goldman Co-Head, Goldman Sachs Asset
Sachs Asset Management Management
February 26, 1999
<PAGE>
Fund Basics
CORE U.S. Equity Fund
as of January 31, 1999
Assets Under Managemen
$1.1 Billion
Number of Holdings
146
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, 1998-January 31, 1999 Fund Total Return (without sales charge)/1/ S&P 500 Index/2/
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 26.89% 32.48%
Class B 26.19% 32.48%
Class C 26.19% 32.48%
Institutional 27.65% 32.48%
Service 27.00% 32.48%
- ----------------------------------------------------------------------------------------------------------------
</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
investment of dividends and other distributions.
/2/ The 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>
- ----------------------------------------------------------------------------------------------------------------
Total Return (with sales charge)
- ----------------------------------------------------------------------------------------------------------------
For the period ended 12/31/98 Class A Class B Class C Institutional Service
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months/3/ -2.09% -1.88% 2.18% 3.87%/5/ 3.63%/5/
One Year/4/ 14.58% 15.44% 19.52% 21.95%/5/ 21.32%/5/
Five Years/4/ 20.21% N/A N/A N/A 21.65%/5/
Since Inception/4/ 16.07% 22.91% 18.16% 26.23%/5/ 16.98%/5,6/
(5/24/91) (5/1/96) (8/15/97) (6/15/95) (5/24/91)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
/3/ The Cumulative Total Return (with sales charge) is determined by computing
the percentage change in the value of $1,000 invested at the maximum public
offering price for the specified periods, assuming reinvestment of all
distributions at NAV. The total return calculation reflects a maximum
initial sales charge of 5.5% for Class A shares, the assumed deferred sales
charge for Class B shares (5% maximum declining to 1% in the sixth year) and
the assumed deferred sales charge for Class C shares (1% if redeemed within
12 months of purchase). The public offering price of the Class A shares on
December 31, 1998 was $33.20 and represents the NAV plus the maximum sales
charge of 5.5%.
/4/ The Average Annual Total Return (with sales charge) is determined by
computing the annual percentage change in the value of $1,000 invested at
the maximum public offering price for specified periods, assuming
reinvestment of all distributions at NAV.
/5/ Cumulative or Average Annual Total Returns as of 12/31/98.
/6/ 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 company Holdings as of 1/31/99
- ----------------------------------------------------------------------------------------------------------------
Company Holding % of Total Net Assets Line of Business
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Microsoft Corp. 5.6% Software & Services
General Electric Co. 4.4% Electronics
AT&T Corp. 4.2% Telecommunications
International Business
Machines, Inc. 3.2% Enterprise Systems
Intel Corp. 3.1% Semiconductors
Exxon Corp. 3.1% Integrated Oil
Wal Mart Stores, Inc. 2.5% Retail
Pfizer, Inc. 2.3% Pharmaceuticals
American International
Group, Inc. 1.6% Insurance
Cisco Systems, Inc. 1.6% Telecom. Equipment
- ----------------------------------------------------------------------------------------------------------------
</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 12-month period ended January 31, 1999.
Performance Review
Over the 12-month period ended January 31, 1999, the Fund's Class A, B, C,
Institutional and Service shares generated annual total returns, without sales
charges, of 26.89%, 26.19%, 26.19%, 27.65% and 27.00%, respectively. These
returns underperformed the 32.48% annualized return of the Fund's benchmark, the
S&P 500 Index. However, all of the Fund's share classes outperformed the 17.35%
average return of its peers, as represented by the Lipper Growth and Income Fund
peer group average.
The Fund's underperformance versus its benchmark is primarily attributable to
events that took place in the final half of the review period, and particularly
from July through October 1998. The four months ended October were characterized
by a sharp increase in volatility. The spread in returns between the best- and
worst-performing stocks in our universe was two times higher than normal. This
meant that the penalty for not choosing the right stocks was much higher than we
would normally expect.
In addition, during this period, most of the factors in our quantitative model
produced results completely opposite to their long-term averages. For example,
overvalued stocks (especially those with high price/book and high price/earnings
ratios) soundly trounced their more cheaply valued counterparts. In the
large-cap sector, stocks with strong price momentum underperformed stocks with
poor price momentum.
The qualitative research portion of the Fund's investment
model also produced mixed results, thus negatively impacting performance.
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 fiscal year under review, we placed the most emphasis on the
Momentum theme, followed by Research and Value. Risk accounted for about 15% of
a company's expected excess return.
. Early in the period under review, all of the four themes that make up the
model predicted returns as we expected, with Momentum generating the
highest returns.
. Mid-period, as mentioned previously, most of the factors in our model
produced results completely opposite to their long-term averages.
. After performing contrary to our expectations at mid-period, most of our
model factors returned to a more normal forecasting ability in the final
months of the period, especially among larger cap stocks. Both Value and
Momentum produced better-than-average results, while Research was about
average. The Risk theme, however, generated negative results.
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 and
blue-chip 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 Microsoft Corp. (up 136.0%) and Intel Corp. (up 74.2%)
generated strong returns over the period.
. Telecommunications companies AT&T Corp. (up 47.9%), MCI Worldcom, Inc. (up
122.7%) and BellSouth Corp. (up 50.2%) generated strong performance over
the review period.
Portfolio Outlook
Returns reverted to a more normal pattern starting in October, both for the
factors we track and for the overall portfolio. Although stock volatility
remains higher than average, we have implemented a few changes in our process to
help ensure a more accurate forecast of portfolio risk versus the benchmark. We
maintain a strong conviction, however, that our model factors have the potential
to generate strong returns over the long term. Cheaper stocks should outpace
more expensive ones, good momentum stocks should do better than poor momentum
stocks, lower risk stocks should perform better than higher risk stocks, as
should those favored by research analysts.
We thank you for your investment and look forward to your continued confidence.
Goldman Sachs Quantitative Equity Team
New York
February 26, 1999
3
<PAGE>
Fund Basics
CORE Large Cap Growth Fund
as of January 31, 1999
Assets Under Management
$603.7 Million
Number of Holdings
136
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, 1998-January 31, 1999 Fund Total Return (without sales charge)/1/ Russell 1000 Growth Index/2/
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 35.10% 42.59%
Class B 34.07% 42.59%
Class C 34.04% 42.59%
Institutional 35.54% 42.59%
Service 34.85% 42.59%
- -------------------------------------------------------------------------------------------------------------------
</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
investment of dividends and other distributions.
/2/ The 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>
- -------------------------------------------------------------------------------------------------
Total Return (with sales charge)
- -------------------------------------------------------------------------------------------------
For the period ended 12/31/98 Class A Class B Class C Institutional Service
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months/3/ 2.01% 2.53% 6.61% 8.19%/5/ 7.95%/5/
One Year/4/ 23.26% 24.39% 28.39% 30.64%/5/ 30.13%/5/
Five Years/4/ 25.74%/6/ N/A N/A 27.19%/5/,/6/ 27.00%/5/
Since Inception/4/ 21.19%/6/ 28.74% 22.80% 22.25%/5/,/6/ 22.12%/5/
(11/11/91) (5/1/97) (8/15/97) (11/11/91) (5/1/97)
- -------------------------------------------------------------------------------------------------
</TABLE>
/3/ The Cumulative Total Return (with sales charge) is determined by computing
the percentage change in the value of $1,000 invested at the maximum public
offering price for the specified periods, assuming reinvestment of all
distributions at NAV. The total return calculation reflects a maximum
initial sales charge of 5.5% for Class A shares, the assumed deferred sales
charge for Class B shares (5% maximum declining to 1% in the sixth year),
and the assumed deferred sales charge for Class C shares (1% if redeemed
within 12 months of purchase). The public offering price of the Class A
shares on December 31, 1998 was $16.21 and represents the NAV plus the
maximum sales charge of 5.5%.
/4/ The Average Annual Total Return (with sales charge) is determined by
computing the annual percentage change in the value of $1,000 invested at
the maximum public offering price for specified periods, assuming
reinvestment of all distributions at NAV. The total return calculation
reflects sales charges.
/5/ Cumulative or Average Annual Total Return as of 12/31/98.
/6/ Performance data for Institutional 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 5 company Holdings as of 1/31/99
- -------------------------------------------------------------------------------
Company Holding % of Total Net Assets Line of Business
- -------------------------------------------------------------------------------
<S> <C> <C>
Microsoft Corp. 5.8% Software & Services
General Electric Co. 5.4% Electronics
Intel Corp. 4.8% Semiconductors
Pfizer, Inc. 3.5% Pharmaceuticals
Cisco Systems Inc. 2.8% Telecom. Equipment
- -------------------------------------------------------------------------------
</TABLE>
The top 5 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 12-month period ended January 31, 1999.
Performance Review
Over the 12-month period ended January 31, 1999, the Fund's Class A, B, C,
Institutional and Service shares generated strong annual total returns, without
sales charges, of 35.10%, 34.07%, 34.04%, 35.54% and 34.85%, respectively. While
these returns underperformed the 42.59% annualized return of the Fund's
benchmark, the Russell 1000 Growth Index, they outperformed the 27.06% annual
total return of the Fund's peers, as represented by the Lipper Growth Fund peer
group average.
The Fund's underperformance versus its benchmark is primarily attributable to
events that took place in the final half of the review period, and particularly
from August through October 1998. During this period, most of the factors in our
quantitative model produced results completely opposite to their long-term
averages. For example, overvalued stocks (especially those with high price/book
and high price/earnings ratios) soundly trounced their more cheaply valued
counterparts. In the large-cap sector, stocks with strong price momentum
underperformed stocks with poor price momentum.
The qualitative research portion of the Fund's investment model also produced
mixed results, thus negatively impacting performance.
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 fiscal year under review, we placed the most emphasis on the
Momentum theme, followed by Research and Value. Risk accounted for about 15% of
a company's expected excess return.
. Early in the fiscal year, the position on Momentum, combined with the
qualitative stock insights provided by Goldman Sachs Global Investment
Research Department as well as consensus opinions, produced positive
performance results. Value also helped returns. The Risk theme, however,
detracted from performance, as higher risk generally fared best in the
market environment.
. Mid-period, as mentioned previously, most of the factors in our model
produced results completely opposite to their long-term averages.
. As we experienced early in the fiscal year, at period end, the Value and
Momentum themes helped performance, as returns attributable to both were
higher than average. The Research theme also generated positive results.
The Risk theme, however, generated negative results, producing returns
opposite from what we anticipated.
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.
- --------------------------------------------------------------------------------
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:
. Healthcare holdings Abbot Laboratories (up 33.0%), Wellpoint Health Net
Works, Inc. (up 52.7%) and Schering Plough Corp. (up 52.1%) generated
strong performance over the period.
. Microsoft Corp. (up 136.0%) and Intel Corp. (up 74.2%), both technology
holdings, generated strong returns over the period.
. Telecommunications companies AT&T Corp. (up 41.2%) and MCI Worldcom, Inc.
(up 68.6%) generated positive returns over the review period.
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 are our exposures to other risk factors (such as
dividend yield). Over the long term, our quantitative process has preferred low
price/earnings and low price/book stocks with good momentum characteristics. We
therefore intend to maintain an exposure to these factors.
We thank you for your investment and look forward to your continued confidence.
Goldman Sachs Quantitative Equity Investment Team
New York
February 26, 1999
6
<PAGE>
Fund Basics
CORE Small Cap Equity Fund
as of January 31, 1999
Assets Under Management
$148.9 Million
Number of Holdings
443
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, 1998-January 31, 1999 Fund Total Return (without sales charge)/1/ Russell 2000 Index/2/
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A -3.97% 0.33%
Class B -4.64% 0.33%
Class C -4.64% 0.33%
Institutional -3.64% 0.33%
Service -4.07% 0.33%
- --------------------------------------------------------------------------------------------------------------
</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
investment of dividends and other distributions.
/2/ The 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>
- ----------------------------------------------------------------------------------------------------------
Total Return (with sales charge)
- ----------------------------------------------------------------------------------------------------------
For the period ended 12/31/98 Class A Class B Class C Institutional Service
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months/3/ -18.15% -18.09% -14.56% -13.29%/5/ -13.46%/5/
One Year/4/ -11.17% -11.29% -7.47% -5.63%/5/ -6.06%/5/
Since Inception/4/ -2.93% -2.53% -0.47% -1.44%/5/ -1.04%/5/
(8/15/97)
- ----------------------------------------------------------------------------------------------------------
</TABLE>
/3/ The Cumulative Total Return (with sales charge) is determined by computing
the percentage change in the value of $1,000 invested at the maximum public
offering price for specified periods, assuming reinvestment of all
distributions at NAV. The total return calculation reflects a maximum
initial sales charge of 5.5% for Class A shares, the assumed deferred sales
charge for Class B shares (5% maximum declining to 1% in the sixth year),
and the assumed deferred sales charge for Class C shares (1% if redeemed
within 12 months of purchase). The public offering price of the Class A
shares on December 31, 1998 was $10.69 and represents the NAV plus the
maximum sales charge of 5.5%.
/4/ The Average Annual Total Return (with sales charge) is determined by
computing the annual percentage change in the value of $1,000 invested at
the maximum public offering price for specified periods, assuming
reinvestment of all distributions at NAV.
/5/ Cumulative or Average Annual Total Returns as of 12/31/98.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Top 10 company Holdings as of 1/31/99
- --------------------------------------------------------------------------------
Company Holding % of Total Net Assets Line of Business
- --------------------------------------------------------------------------------
<S> <C> <C>
Fingerhut Companies, Inc. 0.9% Specialty Retail
Federal Signal Corp. 0.9% Diversified Manufacturing
Lycos, Inc. 0.8% Business Services
Alaska Air Group, Inc. 0.8% Airlines
Ann Taylor Stores Corp. 0.7% Retail
Mindspring Enterprises, Inc. 0.6% Business Services
Clorox Co. 0.6% Consumer Staples
Cellular Communications 0.5% Telecommunications
Excite, Inc. 0.5% Business Services
Playtex Products, Inc. 0.5% Consumer 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.
7
<PAGE>
Performance Overview
CORE Small Cap Equity Fund
Dear Shareholders,
We are pleased to report on the performance of the Goldman Sachs CORE Small Cap
Equity Fund for the 12-month period ended January 31, 1999.
Performance Review
Over the 12-month period ended January 31, 1999, the Fund's Class A, B, C,
Institutional and Service shares generated annual total returns, without sales
charges, of -3.97%, -4.64%, -4.64%, -3.64% and -4.07%, respectively. These
returns underperformed the 0.33% annualized return of the Fund's benchmark, the
Russell 2000 Index.
The Fund's underperformance versus its benchmark is primarily attributable to
events that took place in the final half of the review period, and particularly
from July through October 1998. The four months ended October were characterized
by a sharp increase in volatility. The spread in returns between the best- and
worst-performing stocks in our universe was two times higher than normal. This
meant that the penalty for not choosing the right stocks was much higher than we
would normally expect.
At the same time, in the third quarter, the factors we use to predict return
produced results completely opposite of their long-term averages: richly valued
stocks outpaced cheap ones; stocks with poor momentum fared better than those
with good momentum; low beta - but high residual volatility - stocks did well,
as did those that were not favored by research analysts. Thus the
diversification of our models did not help returns.
Portfolio Positioning
The CORE investment process analyses each stock based upon its Value, Momentum
and Risk characteristics as well as a fundamental Research assessment.
Throughout the fiscal year under review, we placed the most emphasis on the
Momentum theme, followed by Research and Value. Risk accounted for about 15% of
a company's expected excess return.
. Early in the period under review, of the four themes that make up the
model, Momentum and Value fared well at forecasting returns among small-cap
stocks. Although Research's contribution was minimal, it was still
positive. Finally, with regard to our Risk theme, higher risk stocks
generated the most positive performance, counter to our expectations.
. Mid-period, as mentioned previously, most of the factors in our model
produced results completely opposite to their long-term averages.
. After performing contrary to our expectations at mid-period, Momentum and
Research returned to a more normal forecasting ability in the final months
of the period. The Value theme neither helped nor hurt performance in the
small-cap universe. The Risk theme, however, generated negative results,
producing returns opposite from what we anticipated.
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.
- --------------------------------------------------------------------------------
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:
. Information service companies such as Valassis Communications, Inc. (up
50.9%) and Catalina Marketing Corp. (up 58.9%) generated strong returns
over the period.
. The Fund benefited from the performance of several telecommunications
companies, including Winstar Communications, Inc. (up 230.0%) and Skytel
Communications (up 113.5%).
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). Over the long term, our quantitative process has preferred low
price/earnings and low price/book stocks with good momentum characteristics. We
therefore intend to maintain an exposure to these factors.
We thank you for your investment and look forward to your continued confidence.
Goldman Sachs Quantitative Equity Investment Team
New York
February 26, 1999
9
<PAGE>
FUND BASICS
CORE Large Cap Value Fund
as of January 31, 1999
Assets Under Management
$60.7 Million
Number of Holdings
167
NASDAQ Symbols
Class A Shares
GCVAX
Class B Shares
GCVBX
Class C Shares
GCVCX
Institutional Shares
GCVIX
Service Shares
GCLSX
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
PERFORMANCE REVIEW
- --------------------------------------------------------------------------------------------------------------------
December 31, 1998-January 31, 1999 Fund Total Return (without sales charge) 1 Russell 1000 Value Index 2
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 1.50% 0.80%
Class B 1.50% 0.80%
Class C 1.50% 0.80%
Institutional 1.60% 0.80%
Service 1.60% 0.80%
- --------------------------------------------------------------------------------------------------------------------
</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
investment of dividends and other distributions.
2 The Russell 1000 Value Index (with dividends reinvested) figures do not
reflect any fees or expenses. In addition, investors cannot invest directly in
the Index.
- --------------------------------------------------------------------------------
TOP 10 COMPANY HOLDINGS AS OF 1/31/99
- --------------------------------------------------------------------------------
Company Holding % of Total Net Assets Line of Business
- --------------------------------------------------------------------------------
Exxon Corp. 4.5% Integrated Oil
Eastman Kodak Co. 3.5% Consumer Products
Chevron Corp. 3.0% Integrated Oil
AT&T Corp. 3.0% Telecommunications
Lowes Corp. 2.5% Insurance Services
International Business
Machines, Inc. 2.5% Enterprise Systems
Mobil Corp. 2.5% Integrated Oil
Chase Manhattan Corp. 2.3% Banks
Sprint Corp. 2.3% Telecommunications
BankAmerica Corp. 2.2% Banks
- --------------------------------------------------------------------------------
The top 10 holdings may not be representative of the Fund's future investments.
Total return figures represent past performance and do not indicate future
results, which will vary. The investment return and principal value of an
investment will fluctuate and, therefore, an investor's shares, when redeemed,
may be worth more or less than their original cost. Performance reflects expense
limitations in effect. In its absence, performance would be reduced.
10
<PAGE>
Performance Overview
CORE Large Cap Value Fund
Dear Shareholder,
It is a pleasure to welcome you as a shareholder in the Goldman Sachs CORE Large
Cap Value Fund. This annual report covers the brief period from December 31,
1998, when the Fund was initiated, through January 31, 1999.
Performance Review
Over the one-month period ended January 31, 1999, the Fund's Class A, B, C,
Institutional and Service shares generated cumulative total returns, without
sales charges, of 1.50%, 1.50%, 1.50%, 1.60% and 1.60%, respectively. Over the
same time period, the Fund's benchmark, the Russell 1000 Value Index, generated
a cumulative total return of 0.80%.
Performance over the period was driven by good stock selection among the biggest
names in the index; good stock selection within the finance and utilities
sectors also drove the relative gains.
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, the greatest emphasis was placed on the
Momentum theme, while the least was placed on the Risk theme.
. During the period, the Value and Momentum themes helped performance, as
returns attributable to these themes were higher than average. The Risk
theme and Research themes, however, generated negative results, producing
returns opposite from what we anticipated.
- --------------------------------------------------------------------------------
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.
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 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 Value Index; thus the heaviest weightings are in finance and
utilities. We also seek to mimic the bench- mark in our exposures to other risk
factors (such as dividend yield). Over the long term, our quantitative process
has preferred low price/earnings and low price/book stocks with good Momentum
characteristics that fundamental research analysts consider attractive. We
therefore intend to maintain an exposure to these factors, while also continuing
to prefer lower risk to higher risk stocks.
We thank you for your investment and look forward to your continued confidence.
Goldman Sachs Quantitative Equity Team
New York
February 26, 1999
12
<PAGE>
Fund Basics
CORE International Equity Fund
as of January 31, 1999
Assets Under Management
$402.2 Million
Number of Holdings
272
NASDAQ Symbols
Class A Shares
GCIAX
Class B Shares
GCIBX
Class C Shares
GCICX
Institutional Shares
GCIIX
Service Shares
GCISX
- --------------------------------------------------------------------------------
Performance Review
- --------------------------------------------------------------------------------
January 31, 1998- Fund Total Return
January 31, 1999 (without sales charge) 1 MSCI Gross EAFE Index 2
- --------------------------------------------------------------------------------
Class A 8.37% 14.73%
Class B 8.03% 14.73%
Class C 8.03% 14.73%
Institutional 9.20% 14.73%
Service 8.74% 14.73%
- --------------------------------------------------------------------------------
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
investment of dividends and other distributions.
2 The 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>
- -----------------------------------------------------------------------------------------------
Total Return (with sales charge)
- -----------------------------------------------------------------------------------------------
For the period ended 12/31/98 Class A Class B Class C Institutional Service
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months 3 -5.64% -5.38% -1.40% 0.19% 5 -0.03% 5
One Year 4 7.57% 8.36% 12.34% 14.57% 5 14.09% 5
Since Inception 4 -4.09% -3.41% -0.44% 0.55% 5 0.12% 5
(8/15/97)
- -----------------------------------------------------------------------------------------------
</TABLE>
3 The Cumulative Total Return (with sales charge) is determined by computing the
percentage change in the value of $1,000 invested at the maximum public offering
price for specified periods, assuming reinvestment of all distributions at NAV.
The total return calculation reflects a maximum initial sales charge of 5.5% for
Class A shares, the assumed deferred sales charge for Class B shares (5% maximum
declining to 1% in the sixth year) and the assumed deferred sales charge for
Class C shares (1% if redeemed within 12 months of purchase). The public
offering price of the Class A shares on December 31, 1998 was $10.54 and
represents the NAV plus the maximum sales charge of 5.5%.
4 The Average Annual Total Return (with sales charge) is determined by computing
the annual percentage change in the value of $1,000 invested at the maximum
public offering price for specified periods, assuming reinvestment of all
distributions at NAV.
5 Cumulative or Average Annual Total Returns as of 12/31/98.
- --------------------------------------------------------------------------------
Top 10 company Holdings as of 1/31/99
- --------------------------------------------------------------------------------
% of Total
Company Holding Net Assets Country Line of Business
- --------------------------------------------------------------------------------
Nokia AB 4.1% Finland Telecom Equipment
Telefonica de Espana SA 2.6% Spain Telecommunications
Roche Holdings AG 2.1% Switzerland Health/Personal Care
British Telecom 2.0% United Kingdom Telecommunications
Novartis AG 1.8% Switzerland Pharmaceuticals
Glaxo Wellcome PLC 1.8% United Kingdom Pharmaceuticals
Daimler Chrysler AG 1.8% Germany Auto/Vehicle
France Telecom 1.7% France Telecommunications
Endesa SA 1.4% Spain Electrical Services
Toyota Motor Corp. 1.4% Japan Auto/Vehicle
- --------------------------------------------------------------------------------
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.
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 12-month period ended January 31, 1999.
Performance Review
Over the 12-month period ended January 31, 1999, the Fund's Class A, B, C,
Institutional and Service shares generated annual total returns, without sales
charges, of 8.37%, 8.03%, 8.03%, 9.20% and 8.74%, respectively. These returns
underperformed the 14.73% annualized return of the Fund's benchmark, the Morgan
Stanley Capital International (MSCI) Gross Europe, Australasia, Far East (EAFE)
Index.
The past year has been marked by extremes. Volatility increased dramatically in
the third quarter of 1998, as the effects of Russia's debt crisis spread through
both developing and developed markets. The increased volatility drove investors
to the "safest" assets, primarily large capitalization stocks. Consequently,
during the review period, the usual relationships between value, momentum and
returns broke down. Relative valuations did not help find stocks or countries
that outperformed.
Regional Allocations
Continental Europe was the most heavily weighted region throughout
the fiscal year under review. More specifically, within Continental Europe, we
favored such countries as Finland, Sweden and Spain. We underweighted the U.K.,
Germany and France, as valuation and momentum factors in these countries were
weak.
The Fund had an overweight exposure to Japanese equities for most of the review
period, given the country's attractively valued equity market. By the end of
1998, we moved this position to neutral due to weak momentum, unattractive risk
factors and worsened currency-related indicators. Conversely, a neutral position
in Asia (excluding Japan) was moved to an overweight position in view of
attractive valuations, favorable risk factors and good currency-related
indicators.
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
Noteworthy company performance spanned a diverse group of countries and sectors,
including:
. Singapore Airlines Ltd. (Singapore, up 68.4%) and Qantas Airways
(Australia, up 17.9%), both airlines, generated good positive returns.
. Banks such as Banca Commercial Italiana (Italy, up 57.8%) and Bank of Tokyo
Mitsubishi (Japan, up 28.1%) generated good returns over the period.
. Health care companies Glaxo Wellcome PLC (U.K., up 27.5%), Hoechst AG
(Germany, up 26.8%) and Zeneca Group (U.K., up 19.6%) performed well over
the period.
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
Forecast Returns
. Countries, currencies and individual stocks.
. Common investment themes (Value, Momentum and Risk).
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).
Monitor Holdings and Performance
. Continually review return forecasts and portfolio risk.
. Adjust positions as needed.
. Verify sources of value added.
Portfolio Outlook
The Fund is positioned to invest in assets that are cheap relative to
fundamentals and that possess strong momentum characteristics. In addition, our
risk management strategy helps us as we seek to mitigate exposures to factors
that are not related to value and momentum. Our goal is to invest in a portfolio
of international stocks that has characteristics similar to the MSCI Gross EAFE
Index. We thank you for your investment and look forward to your continued
confidence.
Goldman Sachs Quantitative Equity Investment Team
New York
February 26, 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?
Resources and Relationships
Our portfolio management teams are located on-site, around the world, in New
York, London, Tokyo and Singapore. Their understanding of local economies,
markets, industries and cultures helps deliver what many investors want: access
to global investment opportunities and consistent, risk-adjusted performance.
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.
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
January 31, 1999
The following graph shows the value, as of January 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) of 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
January 31, 1999
[LINE GRAPH]
S&P 500 Class A-Core US
-----------------------------------
5/24/91 $10,000 9,450
MAY 10,377 9,626
JUNE 9,902 9,099
7/91 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
1/92 11,095 10,116
FEB 11,239 10,237
MAR 11,020 9,894
APR 11,343 10,069
MAY 11,399 10,005
JUNE 11,229 9,632
7/92 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
1/93 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
7/93 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
1/94 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
7/94 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
1/95 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
7/95 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
1/96 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
7/96 19,646 16,882
AUG 20,061 17,179
SEPT 21,190 17,973
OCT 21,774 18,544
NOV 23,420 19,865
DEC 22,956 19,462
1/97 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
7/97 29,889 25,174
AUG 28,215 23,971
SEPT 29,761 25,237
OCT 28,767 24,239
NOV 30,099 25,077
DEC 30,616 25,651
1/98 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
7/98 35,654 29,294
AUG 30,499 24,410
SEPT 32,454 25,610
OCT 35,092 27,364
NOV 37,219 29,109
DEC 39,362 31,101
1/99 41,008 32,697
<TABLE>
<CAPTION>
Average Annual Total Return through
January 31, 1999 Since Inception Five Years One Year
<S> <C> <C> <C>
Class A (commenced May 24, 1991)
Excluding sales charges 17.49% 21.89% 26.89%
Including sales charges 16.64% 20.51% 19.91%
-----------------------------------------------------------------------------
Class B (commenced May 1, 1996)
Excluding contingent deferred sales
charges 25.25% n/a 26.19%
Including contingent deferred sales
charges 24.39% n/a 21.08%
-----------------------------------------------------------------------------
Class C (commenced August 15, 1997)
Excluding contingent deferred sales
charges 21.05% n/a 26.19%
Including contingent deferred sales
charges 21.05% n/a 25.17%
-----------------------------------------------------------------------------
Institutional Class (commenced June 15,
1995) 27.30% n/a 27.65%
-----------------------------------------------------------------------------
Service Class (commenced June 7, 1996) 25.33% n/a 27.00%
-----------------------------------------------------------------------------
</TABLE>
17
<PAGE>
GOLDMAN SACHS CORE U.S. EQUITY FUND
Statement of Investments
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 96.7%
Advertising & Marketing - 0.1%
23,100 Valassis Communications, Inc.* $ 1,180,988
--------------------------------------------------------
Aerospace/Defense - 0.6%
12,000 Honeywell, Inc. 782,250
12,300 Textron, Inc. 915,581
45,600 United Technologies Corp. 5,446,350
-------------
7,144,181
--------------------------------------------------------
Agriculture/Heavy Equipment - 0.8%
189,900 Caterpillar, Inc. 8,225,044
24,400 Deere & Co. 794,525
-------------
9,019,569
--------------------------------------------------------
Airlines - 0.5%
73,400 America West Holdings Corp.* 1,578,100
47,200 AMR Corp.* 2,773,000
18,100 Delta Air Lines, Inc. 987,581
-------------
5,338,681
--------------------------------------------------------
Auto/Vehicle - 2.1%
46,100 Avis Rent A Car, Inc.* 1,233,175
12,681 Daimlerchrysler AG 1,313,276
246,900 Ford Motor Co. 15,168,919
132,900 Hertz Corp. 5,772,844
-------------
23,488,214
--------------------------------------------------------
Automobiles & Automobile Parts - 0.1%
23,800 Harley Davidson, Inc.(a) 1,237,600
--------------------------------------------------------
Banks - 5.0%
167,762 BankAmerica Corp. 11,219,084
61,900 Chase Manhattan Corp. 4,762,431
15,300 Comerica, Inc. 955,294
13,600 Fifth Third Bancorp 930,750
57,700 Firstar Corp. 5,088,419
244,200 Fleet Financial Group, Inc. 10,821,113
84,900 Mellon Bank Corp. 5,688,300
91,600 PNC Bank Corp. 4,688,775
44,600 State Street Corp. 3,188,900
73,700 Suntrust Banks, Inc. 5,191,244
82,900 U.S. Bancorp 2,792,694
-------------
55,327,004
--------------------------------------------------------
Basic Industries - 0.4%
247,400 Barrick Gold Corp. 4,716,063
--------------------------------------------------------
Broadcast Media - 0.8%
105,300 Viacom, Inc. Class B* 8,950,500
--------------------------------------------------------
Chemical Products - 1.6%
102,100 Dow Chemicals Co. 8,991,181
76,800 Du Pont (E.I.) de Nemours & Co. 3,931,200
38,900 Millennium Chemicals, Inc. 671,025
--------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Chemical Products - (continued)
52,400 PPG Industries, Inc. $ 2,816,500
36,000 Solutia, Inc. 688,500
-------------
17,098,406
--------------------------------------------------------------
Commercial Products - 0.1%
27,700 Danaher Corp. 1,481,950
--------------------------------------------------------------
Communication-Equipment - 1.0%
234,500 General Motors Corp. Class H 11,549,125
--------------------------------------------------------------
Computer Services/Software - 1.5%
89,200 Eastman Kodak Co. 5,831,450
133,200 Gateway 2000, Inc.* 10,289,700
-------------
16,121,150
--------------------------------------------------------------
Computers/Office - 1.4%
120,400 Xerox Corp. 14,929,600
--------------------------------------------------------------
Conglomerates - 1.3%
73,400 Allied Signal, Inc. 2,862,600
154,204 Tyco International Ltd. 11,883,346
-------------
14,745,946
--------------------------------------------------------------
Construction/Environmental Services - 0.0%
19,700 ACX Technologies, Inc.* 279,494
--------------------------------------------------------------
Consumer Products - 0.2%
64,400 Sara Lee Corp. 1,642,200
--------------------------------------------------------------
Consumer Staples - 1.5%
39,200 Clorox Co. 4,904,900
125,500 Procter & Gamble Co. 11,404,813
-------------
16,309,713
--------------------------------------------------------------
Electrical Services - 0.3%
94,200 Public Service Enterprise 3,738,563
--------------------------------------------------------------
Electronics & Other Electrical Equipment -
4.5%
15,300 Emerson Electric Co. 890,269
461,900 General Electric Co. 48,441,763
-------------
49,332,032
--------------------------------------------------------------
Energy Refining & Marketing - 0.1%
26,150 Columbia Gas Systems, Inc. 1,353,263
--------------------------------------------------------------
Enterprise Systems - 3.5%
34,400 EMC Corp.* 3,745,300
190,900 International Business Machines, Inc. 34,982,425
-------------
38,727,725
--------------------------------------------------------------
Entertainment & Leisure - 0.1%
33,626 Walt Disney Co. 1,109,658
--------------------------------------------------------------
Financial Services - 0.4%
126,600 Wells Fargo Co. 4,423,088
--------------------------------------------------------------
</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)
Food & Beverages - 3.9%
265,100 Archer Daniels Midland Co. $ 4,009,638
135,500 Coca-Cola Co. 8,866,781
86,000 Interstate Bakeries Corp. 2,112,375
403,900 Pepsico, Inc. 15,777,344
139,600 The Seagram Company Ltd. 6,613,550
79,400 Unilever NV 6,074,100
-------------
43,453,788
------------------------------------------------------------
Forest Products - 0.8%
130,000 International Paper Co. 5,143,125
58,300 Weyerhaeuser Co. 3,155,488
-------------
8,298,613
------------------------------------------------------------
Health Suppliers/Services - 2.0%
59,900 Cardinal Health, Inc. 4,428,856
179,900 Johnson & Johnson 15,291,500
23,708 Medtronic, Inc. 1,889,258
-------------
21,609,614
------------------------------------------------------------
Health/Personal Care - 0.1%
34,700 Alberto Culver Co. Class B 893,525
------------------------------------------------------------
Healthcare Management - 0.6%
12,500 Aetna, Inc. 1,126,563
241,900 Beverly Enterprises, Inc.* 1,375,806
120,100 Columbia/HCA Healthcare Corp. 2,176,813
112,600 Tenet Healthcare Corp.* 2,336,450
-------------
7,015,632
------------------------------------------------------------
Hotels & Restaurants - 0.3%
106,500 Marriott International, Inc. 3,740,813
------------------------------------------------------------
Industrial Machinery - 0.1%
8,800 Nacco Industries, Inc. 745,250
------------------------------------------------------------
Insurance - 1.8%
175,115 American International Group, Inc. 18,025,900
20,000 MBIA, Inc. 1,311,250
-------------
19,337,150
------------------------------------------------------------
Insurance-Life - 2.2%
65,100 American General Corp. 4,642,444
69,200 Cigna Corp. 5,700,350
173,600 Equitable Companies, Inc. 12,108,600
10,200 Nationwide Financial Services, Inc. 488,963
28,100 Protective Life Corp. 971,206
-------------
23,911,563
------------------------------------------------------------
Insurance-Property and Casualty - 1.3%
212,612 Allstate Corp. 7,986,238
225,500 Travelers Property & Casualty Corp. 6,497,219
-------------
14,483,457
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Integrated Oil - 5.9%
479,600 Exxon Corp. $ 33,781,825
171,800 Mobil Corp. 15,064,713
343,900 Royal Dutch Petroleum ADR 13,777,494
41,400 Texaco, Inc. 1,961,325
-------------
64,585,357
-----------------------------------------------------------
Internet Software - 0.2%
6,700 Yahoo!* 2,373,475
-----------------------------------------------------------
Logistics/Rail - 0.4%
74,500 Burlington Northern Santa Fe Corp. 2,579,563
48,700 GATX Corp. 1,811,031
-------------
4,390,594
-----------------------------------------------------------
Media & Communications - 1.8%
120,100 Gannett Co. 7,904,081
52,000 SBC Communications, Inc. 2,808,000
135,900 Tele-Communications, Inc.* 9,317,644
-------------
20,029,725
-----------------------------------------------------------
Packaging & Container - 0.1%
38,400 Aptargroup, Inc. 1,048,800
-----------------------------------------------------------
Personal Computers and Peripherals - 1.4%
152,300 Dell Computer Corp.* 15,230,000
-----------------------------------------------------------
Pharmaceuticals - 9.2%
130,600 Abbott Laboratories 6,064,738
87,100 American Home Products Corp. 5,111,681
56,400 Amgen, Inc.* 7,208,625
19,900 Biogen, Inc.* 1,955,175
103,300 Bristol-Myers Squibb Co. 13,241,769
69,800 Eli Lilly & Co. 6,539,388
83,800 Merck & Co. 12,297,650
194,200 Pfizer, Inc. 24,978,975
123,200 Schering-Plough Corp. 6,714,400
237,000 Warner-Lambert Co. 17,108,438
-------------
101,220,839
-----------------------------------------------------------
Recreational Products - 0.1%
44,000 Mattel, Inc. 998,250
-----------------------------------------------------------
Restaurants & Hotels - 0.3%
61,010 Tricon Global Restaurants, Inc.* 2,901,788
-----------------------------------------------------------
Retail - 3.9%
203,400 Dayton Hudson Corp. 12,966,750
43,600 Federated Department Stores, Inc.* 1,823,025
322,600 Wal-Mart Stores, Inc. 27,743,600
-------------
42,533,375
-----------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
GOLDMAN SACHS CORE U.S. EQUITY FUND
Statement of Investments
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Security and Commodity Brokers - 2.5%
189,100 Merrill Lynch & Company, Inc. $ 14,371,600
156,500 Morgan Stanley Dean Witter & Co. 13,586,156
-------------
27,957,756
---------------------------------------------------------
Semiconductors - 3.1%
246,100 Intel Corp. 34,684,719
---------------------------------------------------------
Software & Services - 6.0%
91,000 Automatic Data Processing, Inc. 3,873,188
353,300 Microsoft Corp.* 61,827,500
-------------
65,700,688
---------------------------------------------------------
Specialty Finance & Agencies - 1.2%
157,770 Associates First Capital Corp. 6,399,546
74,200 C.I.T. Group, Inc. 2,365,125
40,800 Providian Financial Corp. 4,113,150
-------------
12,877,821
---------------------------------------------------------
Specialty Retail - 2.7%
91,100 American Greetings Corp. 3,598,450
140,400 Best Buy Co., Inc.* 12,741,300
122,400 Home Depot, Inc. 7,389,900
111,100 Lowes Companies, Inc. 6,478,519
-------------
30,208,169
---------------------------------------------------------
Steel - 0.3%
120,900 AK Steel Holding Corp. 2,516,231
130,400 Bethlehem Steel Corp.* 1,124,700
-------------
3,640,931
---------------------------------------------------------
Supermarkets - 2.1%
117,600 Albertson's, Inc. 7,173,600
67,400 Fleming Companies, Inc. 602,388
130,400 Food Lion, Inc. 1,271,400
136,100 Kroger Co.* 8,642,350
98,034 Safeway, Inc.* 5,502,158
-------------
23,191,896
---------------------------------------------------------
Telecommunications - 8.5%
104,600 Ameritech Corp. 6,812,075
510,300 AT&T Corp. 46,309,725
96,800 BellSouth Corp. 4,319,700
184,600 GTE Corp. 12,460,500
193,300 MCI Worldcom, Inc.* 15,415,675
102,900 Sprint Corp. 8,630,738
-------------
93,948,413
---------------------------------------------------------
Telecommunications Equipment - 3.0%
156,650 Cisco Systems, Inc.* 17,476,266
127,300 Lucent Technologies, Inc. 14,329,206
20,000 Northern Telecom Ltd. 1,262,500
-------------
33,067,972
---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Textile-Apparel Manufacturers - 0.2%
68,400 Intimate Brands, Inc. $ 2,727,450
-------------------------------------------------------
Tobacco - 1.1%
228,300 Philip Morris Companies, Inc. 10,730,100
47,900 Universal Corp. 1,451,969
--------------
12,182,069
-------------------------------------------------------
Utilities - 1.7%
35,900 Ameren Corp. 1,409,075
24,200 Consolidated Edison, Inc. 1,196,388
22,400 Dominion Resources, Inc. 1,002,400
24,600 Duke Energy Co. 1,520,588
67,900 Edison International, Inc. 1,888,469
69,200 FPL Group, Inc. 3,797,350
46,100 PECO Energy Co. 1,760,444
17,600 Pinnacle West Capital Corp. 704,000
98,300 Texas Utilities Co. 4,319,056
47,000 Unicom Corp. 1,674,361
--------------
19,272,131
-------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $741,895,168) $1,067,506,336
-------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
GOLDMAN SACHS CORE U.S. EQUITY FUND
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
U.S. Treasury Obligations - 0.2%
<C> <S> <C> <C>
U.S. Treasury Bill(b)
$2,025,000 4.48% 02/04/98 $ 2,023,681
-----------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $2,023,681) $ 2,023,681
-----------------------------------------------------------------
Repurchase Agreement - 2.7%
Joint Repurchase Agreement Account(b)
$29,300,000 4.84% 02/01/99 $ 29,300,000
-----------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $29,300,000) $ 29,300,000
-----------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $773,218,849)(c) $1,098,830,017
-----------------------------------------------------------------
</TABLE>
Federal Income Tax Information:
<TABLE>
<S> <C> <C>
Gross
unrealized gain
for investments
in which value
exceeds cost $ 345,963,143
Gross
unrealized loss
for investments
in which cost
exceeds value (21,505,840)
--------------------------------
Net unrealized
gain $ 324,457,303
--------------------------------
</TABLE>
Futures contracts open at January 31, 1999 are as follows:
<TABLE>
<CAPTION>
Number of
Contracts Settlement Unrealized
Type Long(d) Month Gain
-----------------------------------------------
<S> <C> <C> <C>
S&P 500 Index 106 March 1999 $731,610
-----------------------------------------------
</TABLE>
* Non-income producing security.
(a) There are common stock rights attached to these securities.
(b) Portions of these securities are being segregated as collateral for
futures contracts.
(c) The aggregate cost for federal income tax purposes is $774,372,714.
(d) Each S&P 500 Stock Index future utilize a multiplier of 250 per contract
with the index value at time of purchase in notional par value. The net
notional amount and market value at risk are $27,461,390 and $28,193,000,
respectively. The determination of notional amounts does not consider
market risk factors and therefore notional amounts as presented here are
indicative only of volume of activity and not a measure of market risk.
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.
21
<PAGE>
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
Performance Summary
January 31, 1999
The following graph shows the value, as of January 31, 1999, of a $10,000 in-
vestment made (with the maximum sales charge of 5.5% and contingent deferred
sales charges of 5.0% for Class A and B, respectively and at NAV for the In-
stitutional and Service classes) on May 1, 1997 (commencement of operations)
of 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 represents past performance and should not be consid-
ered indicative of future performance which will fluctuate with changes in
market conditions. These performance fluctuations will cause an investor's
shares, when redeemed, to be worth more or less than their original cost.
Performance of Class C share will vary from Class A, Class B, Institutional
and Service shares.
CORE Large Cap Growth Fund's Lifetime Performance
Growth of a $10,000 Investment, Distributions Reinvested May 1, 1997 to
January 31, 1999
[LINE GRAPH]
Russell 1000 Class A Class B Institutional Service
- ------------------------------------------------------------------------
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
- ------------------------------------------------------------------------
7/97 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
- ------------------------------------------------------------------------
1/98 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
- ------------------------------------------------------------------------
7/98 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
- ------------------------------------------------------------------------
1/99 17,874 15,807 16,112 16,791 16,662
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Return through January
31, 1999 Since Inception One Year
<S> <C> <C>
Class A (commenced May 1, 1997)
Excluding sales charges 33.08% 35.10%
Including sales charges 28.87% 27.64%
-----------------------------------------------------------------------
Class B (commenced May 1, 1997)
Excluding contingent deferred sales charges 33.11% 34.07%
Including contingent deferred sales charges 31.21% 29.07%
-----------------------------------------------------------------------
Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges 25.90% 34.04%
Including contingent deferred sales charges 25.90% 33.04%
-----------------------------------------------------------------------
Institutional Class (commenced May 1, 1997) 22.88% 35.54%
-----------------------------------------------------------------------
Service Class (commenced May 1, 1997) 32.79% 34.85%
-----------------------------------------------------------------------
</TABLE>
22
<PAGE>
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
Statement of Investments
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - 95.7%
<C> <S> <C>
Aerospace/Defense - 0.3%
27,200 Honeywell, Inc. $ 1,773,100
18,700 Rockwell International Corp. 812,281
------------
2,585,381
--------------------------------------------------------------
Agriculture/Heavy Equipment - 0.3%
23,200 Caterpillar, Inc. 1,004,850
33,100 Dover Corp. 1,028,169
------------
2,033,019
--------------------------------------------------------------
Alcohol - 0.4%
29,500 Anheuser Busch Companies, Inc. 2,085,281
5,100 Brown Forman Corp. Class B 368,156
------------
2,453,437
--------------------------------------------------------------
Auto/Vehicle - 1.5%
80,800 Ford Motor Co. 4,964,150
93,100 Hertz Corp. 4,044,031
------------
9,008,181
--------------------------------------------------------------
Banks - 0.3%
78,700 Dime Bancorp, Inc. 1,908,475
--------------------------------------------------------------
Basic Industries - 0.3%
94,600 Barrick Gold Corp. 1,803,313
--------------------------------------------------------------
Broadcast Media - 0.8%
54,900 Viacom, Inc. Class B* 4,666,500
--------------------------------------------------------------
Chemical Products - 1.0%
7,400 Avery Dennison Corp. 365,838
32,100 Dow Chemicals Co. 2,826,806
4,000 Minnesota Mining and Manufacturing Co. 310,500
9,200 PPG Industries, Inc. 494,500
98,600 Solutia, Inc. 1,885,725
------------
5,883,369
--------------------------------------------------------------
Commercial Products - 0.2%
21,600 Danaher Corp. 1,155,600
--------------------------------------------------------------
Communication-Equipment - 1.2%
148,800 General Motors Corp. Class H 7,328,400
--------------------------------------------------------------
Communications Services Companies - 0.4%
21,200 Airtouch Communications, Inc.* 2,047,125
13,400 United States Cellular Corp.* 602,163
------------
2,649,288
--------------------------------------------------------------
Computer Services/Software - 2.4%
219,700 Eastman Kodak Co. 14,362,888
--------------------------------------------------------------
Computers/Office - 0.8%
48,700 Unisys Corp.* 1,613,188
26,700 Xerox Corp. 3,310,800
------------
4,923,988
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Conglomerates - 0.8%
60,700 Tyco International Ltd. $ 4,677,694
-------------------------------------------------------------
Construction/Environmental Services - 0.1%
24,200 ACX Technologies, Inc.* 343,338
-------------------------------------------------------------
Consumer Staples - 2.2%
29,100 Clorox Co. 3,641,138
103,700 Procter & Gamble Co. 9,423,738
------------
13,064,876
-------------------------------------------------------------
Electronics & Other Electrical Equipment - 5.8%
8,500 Conexant Systems, Inc.* 154,594
12,500 Emerson Electric Co. 727,344
312,200 General Electric Co. 32,741,975
19,800 Johnson Controls, Inc. 1,275,863
------------
34,899,776
-------------------------------------------------------------
Enterprise Systems - 3.3%
11,900 Ceridian Corp.* 944,563
71,400 EMC Corp.* 7,773,675
16,300 Hewlett-Packard Co. 1,277,513
34,100 International Business Machines, Inc. 6,248,825
33,300 Sun Microsystems, Inc.* 3,721,275
------------
19,965,851
-------------------------------------------------------------
Entertainment & Leisure - 0.5%
66,900 Carnival Cruise Lines Corp. 3,282,281
-------------------------------------------------------------
Financial Services - 0.6%
14,700 Capital One Financial Corp. 1,945,913
47,300 Wells Fargo Co. 1,652,544
------------
3,598,457
-------------------------------------------------------------
Food & Beverages - 4.7%
66,895 Archer Daniels Midland Co. 1,011,787
228,900 Coca-Cola Co. 14,978,644
17,500 Coca-Cola Enterprises, Inc. 619,063
139,900 IBP, Inc. 3,375,088
83,100 Pepsico, Inc. 3,246,094
67,200 Unilever NV 5,140,800
------------
28,371,476
-------------------------------------------------------------
Forest Products - 0.1%
9,800 Weyerhaeuser Co. 530,425
-------------------------------------------------------------
Health Suppliers/Services - 2.6%
69,300 Allegiance Corp. 3,127,163
87,300 Bergen Brunswig Corp. 2,444,400
17,950 Cardinal Health, Inc. 1,327,178
105,700 Johnson & Johnson 8,984,500
------------
15,883,241
-------------------------------------------------------------
Health/Personal Care - 0.1%
13,000 Alberto Culver Co. Class B 334,750
-------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
Statement of Investments
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Healthcare Management - 1.9%
53,500 Beverly Enterprises, Inc.* $ 304,281
51,200 Biomet, Inc. 1,875,200
88,500 Columbia/HCA Healthcare Corp. 1,604,063
34,900 Tenet Healthcare Corp.* 724,175
96,400 Wellpoint Health Networks, Inc.* 7,211,925
------------
11,719,644
-----------------------------------------------------------
Industrial Machinery - 0.1%
11,800 Ingersoll-Rand Co. 560,500
-----------------------------------------------------------
Insurance - 0.5%
29,700 American International Group, Inc. 3,057,244
-----------------------------------------------------------
Insurance Services - 0.1%
5,800 Loews Corp. 488,288
-----------------------------------------------------------
Insurance-Life - 1.0%
50,900 Equitable Companies, Inc. 3,550,275
34,400 Hartford Life, Inc. 1,939,300
14,800 Nationwide Financial Services, Inc. 709,475
------------
6,199,050
-----------------------------------------------------------
Insurance-Property and Casualty - 0.2%
36,500 Travelers Property & Casualty Corp. 1,051,656
-----------------------------------------------------------
Integrated Oil - 0.8%
62,300 Exxon Corp. 4,388,256
9,700 Royal Dutch Petroleum ADR 388,606
------------
4,776,862
-----------------------------------------------------------
Internet Software - 2.8%
73,200 America Online, Inc.* 12,860,325
10,600 Yahoo!* 3,755,050
------------
16,615,375
-----------------------------------------------------------
Media & Communications - 0.3%
29,800 Gannett Co. 1,961,213
-----------------------------------------------------------
Personal Computers and Peripherals - 3.1%
44,300 Apple Computer, Inc.* 1,824,606
33,400 CHS Electronics, Inc.* 498,913
89,700 Compaq Computer Corp. 4,271,963
104,300 Dell Computer Corp.* 10,430,000
14,300 Lexmark International Group, Inc.* 1,617,688
------------
18,643,170
-----------------------------------------------------------
Pharmaceuticals - 14.5%
146,500 Abbott Laboratories 6,803,094
36,700 American Home Products Corp. 2,153,831
68,000 Amgen, Inc.* 8,691,250
21,400 Biogen, Inc.* 2,102,550
125,300 Bristol-Myers Squibb Co. 16,061,894
10,800 Eli Lilly & Co. 1,011,825
32,200 Guidant Corp. 1,897,788
68,400 Merck & Co. 10,037,700
165,600 Pfizer, Inc. 21,300,300
-----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Pharmaceuticals (continued)
122,100 Schering-Plough Corp. $ 6,654,450
149,400 Warner-Lambert Co. 10,784,813
------------
87,499,495
--------------------------------------------------------
Publishing - 0.3%
3,100 Washington Post Co. 1,763,900
--------------------------------------------------------
Recreational Products - 0.3%
27,700 Hasbro, Inc. 1,030,094
23,300 Mattel, Inc. 528,619
------------
1,558,713
--------------------------------------------------------
Restaurants & Hotels - 0.2%
5,700 McDonalds Corp. 449,231
14,600 Tricon Global Restaurants, Inc.* 694,413
------------
1,143,644
--------------------------------------------------------
Retail - 4.9%
137,000 Ann Taylor Stores Corp.* 5,308,750
107,100 Dayton Hudson Corp. 6,827,625
105,800 Ingram Micro, Inc.* 3,207,063
28,800 Saks, Inc.* 1,060,200
97,100 TJX Companies, Inc. 2,870,519
122,100 Wal-Mart Stores, Inc. 10,500,600
------------
29,774,757
--------------------------------------------------------
Security and Commodity Brokers - 2.1%
86,600 Lehman Brothers Holdings, Inc. 4,735,938
31,600 Merrill Lynch & Co., Inc. 2,401,600
65,500 Morgan Stanley Dean Witter & Co. 5,686,219
------------
12,823,757
--------------------------------------------------------
Semiconductors - 5.0%
206,800 Intel Corp. 29,145,875
31,200 Tech Data Corp.* 978,900
------------
30,124,775
--------------------------------------------------------
Software & Services - 7.3%
68,700 Automatic Data Processing, Inc. 2,924,044
21,800 BMC Software, Inc.* 1,017,788
13,200 Cadence Design Systems, Inc.* 422,400
44,800 Computer Sciences Corp.(a)* 3,071,600
21,600 Compuware Corp.* 1,431,000
200,600 Microsoft Corp.* 35,105,000
------------
43,971,832
--------------------------------------------------------
Specialty Finance & Agencies - 1.8%
26,080 Associates First Capital Corp. 1,057,870
97,450 Providian Financial Corp. 9,824,178
------------
10,882,048
--------------------------------------------------------
Specialty Retail - 2.9%
8,600 American Greetings Corp. 339,700
51,500 Best Buy Co., Inc.* 4,673,625
--------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
GOLDMAN SACHS CORE LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Specialty Retail (continued)
140,900 Home Depot, Inc. $ 8,506,838
64,400 Lowes Companies, Inc. 3,755,325
7,700 Tandy Corp. 415,800
------------
17,691,288
-------------------------------------------------------------
Steel - 0.1%
8,800 Nucor Corp. 431,200
-------------------------------------------------------------
Supermarkets - 2.8%
70,000 Albertson's, Inc. 4,270,000
23,600 Food Lion, Inc. 230,100
77,000 Kroger Co.* 4,889,500
25,400 Rite Aid Corp. 1,247,775
116,900 Safeway, Inc.* 6,561,013
------------
17,198,388
-------------------------------------------------------------
Telecommunications - 2.9%
108,600 AT&T Corp.(b) 9,855,450
17,300 BCE, Inc. 772,013
9,900 BellSouth Corp. 441,788
41,900 GTE Corp. 2,828,250
30,500 MCI Worldcom, Inc.* 2,432,375
4,150 Sprint Corp PCS Group* 132,281
14,000 Sprint Corp. 1,174,250
------------
17,636,407
-------------------------------------------------------------
Telecommunications Equipment - 7.3%
150,800 Cisco Systems, Inc.* 16,823,625
292,600 General Instrument Corp.* 10,387,300
132,000 Lucent Technologies, Inc. 14,858,250
28,000 Northern Telecom Ltd. 1,767,500
------------
43,836,675
-------------------------------------------------------------
Textile-Apparel Manufacturers - 0.1%
21,000 Footstar, Inc.* 531,563
-------------------------------------------------------------
Tobacco - 1.6%
11,200 Fortune Brands, Inc. 372,400
181,300 Philip Morris Companies, Inc. 8,521,100
16,300 Universal Corp. 494,094
------------
9,387,594
-------------------------------------------------------------
Transportation-Rail - 0.1%
10,200 Kansas City Southern Industries, Inc. 484,500
-------------------------------------------------------------
Utilities - 0.0%
4,400 Duke Energy Co. 271,959
-------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $470,473,885) $577,799,501
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<C> <S> <C> <C>
U.S. Treasury Obligation - 0.2%
U.S. Treasury Bill(b)
$ 1,150,000 4.29% 02/04/99 $ 1,149,589
-------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $1,149,589) $ 1,149,589
-------------------------------------------------------
Repurchase Agreement - 3.5%
Joint Repurchase Agreement Account(b)
$21,100,000 4.84% 02/01/99 $ 21,100,000
-------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $21,100,000) $ 21,100,000
-------------------------------------------------------
TOTAL INVESTMENTS
(Cost $492,723,474)(c) $600,049,090
-------------------------------------------------------
-------------------------------------------------------
</TABLE>
Federal Income Tax Information:
<TABLE>
<S> <C> <C>
Gross
unrealized
gain for
investments
in which
value exceeds
cost $120,014,745
Gross
unrealized
loss for
investments
in which
cost exceeds
value (12,689,129)
----------------------------
Net
unrealized
gain $107,325,616
----------------------------
</TABLE>
Futures contracts open at January 31, 1999 are as follows:
<TABLE>
<CAPTION>
Number of
Contracts Settlement Unrealized
Type Long(d) Month Gain
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
S&P 500 Index 64 March 1999 $470,089
--------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) There are common stock rights attached to these securities.
(b) Portions of these securities are being segregated as collateral for
futures contracts.
(c) The aggregate cost for federal income tax purposes is $492,723,474.
(d) Each S&P 500 Stock Index future utilize a multiplier of 250 per contract
with the index value at time of purchase in notional par value. The net
notional amount and market value at risk are $20,033,911 and $20,504,000,
respectively. The determination of notional amounts does not consider
market risk factors and therefore notional amounts as presented here are
indicative only of volume of activity and not a measure of market risk.
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.
25
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
Performance Summary
January 31, 1999
The following graph shows the value, as of January 31, 1999, of a $10,000 in-
vestment made (with the maximum sales charge of 5.5% per Class A and contin-
gent deferred sales charges of 5.0% and 1.0% for Class B and C, respectively
and at NAV for the Institutional and Service Classes) on August 15, 1997
(commencement of operations) of the Goldman Sachs CORE Small Cap Equity Fund.
For comparative purposes, the performance of the Fund's benchmark (Russell
2000 Growth Index) is shown. This performance data represents past perfor-
mance and should not be considered indicative of future performance which
will fluctuate with changes in market conditions. These performance fluctua-
tions 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
January 31, 1999
[LINE GRAPH]
Institut- 2000
Class A Class B Class C ional Service Index
- ---------------------------------------------------------------
8/15/97 $ 9,450 $10,000 $10,000 $10,000 $10,000 $10,000
- ---------------------------------------------------------------
8/97 9,707 10,260 10,260 10,270 10,260 10,284
- ---------------------------------------------------------------
9/97 10,340 10,940 10,940 10,950 10,950 10,037
- ---------------------------------------------------------------
10/97 9,896 10,460 10,460 10,480 10,480 10,552
- ---------------------------------------------------------------
11/97 9,849 10,400 10,410 10,430 10,420 10,484
- ---------------------------------------------------------------
12/97 10,206 10,767 10,767 10,807 10,797 10,667
- ---------------------------------------------------------------
1/98 10,054 10,607 10,617 10,657 10,647 10,499
- ---------------------------------------------------------------
2/98 10,832 11,420 11,430 11,480 11,470 11,274
- ---------------------------------------------------------------
3/98 11,354 11,963 11,973 12,043 12,013 11,852
- ---------------------------------------------------------------
4/98 11,535 12,154 12,154 12,234 12,204 11,917
- ---------------------------------------------------------------
5/98 10,975 11,551 11,561 11,641 11,611 11,275
- ---------------------------------------------------------------
6/98 11,079 11,661 11,661 11,762 11,722 11,298
- ---------------------------------------------------------------
7/98 10,158 10,677 10,687 10,777 10,747 10,383
- ---------------------------------------------------------------
8/98 8,060 8,467 8,477 8,558 8,528 8,367
- ---------------------------------------------------------------
9/98 8,363 8,809 8,819 8,909 8,869 9,022
- ---------------------------------------------------------------
10/98 8,487 8,909 8,919 9,020 8,980 9,390
- ---------------------------------------------------------------
11/98 9,038 9,482 9,492 9,612 9,562 9,882
- ---------------------------------------------------------------
12/98 9,597 10,054 10,064 10,199 10,143 10,494
- ---------------------------------------------------------------
1/99 9,654 9,713 10,125 10,269 10,214 10,633
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Return through January 31,
1999 Since Inception One Year
<S> <C> <C>
Class A (commenced August 15, 1997)
Excluding sales charges 1.46% -3.97%
Including sales charges -2.37% -9.29%
---------------------------------------------------------------------------
Class B (commenced August 15, 1997)
Excluding contingent deferred sales charges 0.78% -4.64%
Including contingent deferred sales charges -1.97% -9.41%
---------------------------------------------------------------------------
Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges 0.85% -4.64%
Including contingent deferred sales charges 0.85% -5.59%
---------------------------------------------------------------------------
Institutional Class (commenced August 15, 1997) 1.83% -3.64%
---------------------------------------------------------------------------
Service Class (commenced August 15, 1997) 1.45% -4.07%
---------------------------------------------------------------------------
</TABLE>
26
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
Statement of Investments
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - 96.9%
<C> <S> <C>
Advertising & Marketing - 0.3%
8,600 Valassis Communications, Inc.* $ 439,675
--------------------------------------------------------------
Aerospace/Defense - 0.6%
12,700 AAR Corp.(a) 246,063
12,100 Gencorp, Inc. 282,838
18,900 OEA, Inc. 251,606
14,600 Tristar Aerospace Co.* 119,538
------------
900,045
--------------------------------------------------------------
Agriculture/Heavy Equipment - 0.4%
14,800 Allied Products Corp. 96,200
9,900 Cort Business Services Corp.* 185,625
9,360 United Rentals, Inc.* 329,940
------------
611,765
--------------------------------------------------------------
Airfreight, Truck & Other - 0.2%
8,000 Seacor Smit, Inc.* 356,000
--------------------------------------------------------------
Airlines - 1.3%
22,100 Alaska Air Group, Inc.* 1,113,288
18,000 America West Holdings Corp.* 387,000
7,000 Asa Holdings, Inc. 218,750
5,600 Atlas Air, Inc.* 288,050
------------
2,007,088
--------------------------------------------------------------
Alcoholic Beverages - 0.5%
8,200 Adolph Coors Co. Class B 525,313
19,500 The Boston Beer Company, Inc.* 187,688
------------
713,001
--------------------------------------------------------------
Auto Suppliers - 1.0%
14,050 A.O. Smith Corp. 337,200
10,700 Arvin Industries, Inc. 423,319
7,800 CSK Auto Corp.* 263,250
19,400 Excel Industries, Inc. 474,088
------------
1,497,857
--------------------------------------------------------------
Auto/Vehicle - 0.3%
15,000 Avis Rent A Car, Inc.* 401,250
--------------------------------------------------------------
Automobiles & Automobile Parts - 1.2%
15,900 Clarcor, Inc. 327,938
12,300 Gentex Corp.* 281,363
8,700 Modine Manufacturing Co. 250,125
17,400 Simpson Industries, Inc. 182,700
25,200 Standard Products Co. 486,675
9,500 Superior Industries International, Inc. 260,656
------------
1,789,457
--------------------------------------------------------------
Banks - 6.2%
13,200 Bancwest Corp. 592,350
24,300 Brookline Bancorp, Inc. 288,563
12,120 CNB Bancshares, Inc. 499,950
--------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Banks - (continued)
8,400 Commerce Bancorp, Inc. $ 379,050
15,700 Community Bank System, Inc. 433,713
14,000 Cullen Frost Bankers, Inc. 727,125
13,600 First Commonwealth Financial Corp. 333,200
5,400 First Republic Bank Corp.* 131,625
14,000 Hubco, Inc. 453,250
19,900 Imperial Bancorp* 365,663
30,600 Independence Community BA* 459,000
9,100 Independent Bank Corp. 141,050
8,800 Mainstreet Financial Corp. 391,600
14,200 One Valley Bancorp, Inc. 447,300
15,900 Peoples Bancorp, Inc. 162,975
73,747 Republic Security Financial 677,551
14,900 Roslyn Bancorp, Inc. 279,375
20,400 Southwest Bancorp of Texas, Inc.* 270,300
19,600 Staten Island Bancorp, Inc. 374,850
12,650 Trustco Bank Corp. 343,131
11,700 United Bankshares, Inc. 283,725
13,500 UST Corp. 311,344
12,900 Westamerica Bancorp 453,919
14,500 Western Bancorp 465,813
------------
9,266,422
---------------------------------------------------------
Broadcast Media - 1.2%
8,700 Century Communications* 294,713
12,900 Cox Radio, Inc.* 581,306
7,800 Echostar Communications* 427,050
12,600 Macromedia, Inc.* 441,788
------------
1,744,857
---------------------------------------------------------
Building Materials & Construction - 0.6%
5,400 Coachmen Industries, Inc. 135,000
12,300 Integrated Electrical Services* 236,775
18,800 Morrison Knudsen Corp.* 205,625
12,800 TJ International, Inc. 308,800
------------
886,200
---------------------------------------------------------
Business Services - 6.0%
10,200 ABM Industries, Inc. 337,238
11,600 Acxiom Corp.* 295,800
6,400 Catalina Marketing Corp.* 427,200
22,800 Cotelligent, Inc.* 477,375
10,000 Devry, Inc.* 294,375
6,700 Excite, Inc.* 793,950
8,200 F.Y.I., Inc. 319,800
6,600 Hooper Holmes, Inc. 188,100
4,900 Incyte Pharmaceuticals, Inc.* 147,000
13,500 Interim Services, Inc.* 286,875
7,600 Legato Systems, Inc.* 458,850
8,400 Lycos, Inc.* 1,150,800
6,500 Medquist, Inc.* 225,063
10,100 Metzler Group, Inc.* 507,525
9,000 Mindspring Enterprises, Inc.* 918,000
14,300 National Data Corp. 756,113
12,100 Rollins, Inc. 201,919
---------------------------------------------------------
</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)
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Business Services - (continued)
9,200 Service Experts, Inc.* $ 226,550
8,600 Sylvan Learning System, Inc.* 270,363
15,400 URS Corp.* 335,913
9,600 Wallace Computer Services, Inc. 230,400
8,800 World Access, Inc.* 91,300
------------
8,940,509
---------------------------------------------------------
Chemical Products - 1.7%
17,500 Cambrex Corp. 432,031
13,700 Catalytica, Inc.* 202,075
18,100 Dexter Corp. 530,556
12,500 Nova Corp.* 399,219
10,100 WD 40 Co. 273,963
67,800 Wellman, Inc. 639,863
------------
2,477,707
---------------------------------------------------------
Chemicals-Commodity - 0.3%
17,100 Geon Co. 410,400
---------------------------------------------------------
Commercial Products - 0.1%
6,700 Knoll, Inc.* 157,450
---------------------------------------------------------
Commercial Services - 1.1%
11,900 Century Business Services, Inc.* 166,600
9,400 Dendrite International, Inc.* 286,700
7,800 Metamor Worldwide, Inc.* 209,625
21,900 Sensormatic Electronics* 239,531
17,900 Wackenhut Corp. 439,669
14,600 World Color Press Co.* 359,525
------------
1,701,650
---------------------------------------------------------
Communications - 0.5%
22,900 Foster Wheeler Corp. 293,406
14,200 Kaman Corp. 206,788
9,400 Regal Beloit Corp. 216,200
------------
716,394
---------------------------------------------------------
Communications & Media Service - 1.1%
5,900 Adelphia Communications* 355,475
13,000 Aliant Communications, Inc. 552,500
15,800 American Tower Corp.* 406,850
10,900 Vanguard Cellular System* 318,825
------------
1,633,650
---------------------------------------------------------
Computer Services/Software - 4.4%
58,600 Acclaim Entertainment, Inc.* 542,050
9,000 American Management Systems, Inc.* 330,188
6,700 Aris Corp.* 81,238
12,050 Boole Babbage, Inc.* 371,291
7,600 Broadvision, Inc.* 318,250
9,400 CACI International, Inc.* 173,313
11,900 Cerner Corp.* 290,063
9,800 Clarify, Inc.* 261,538
8,600 Geotel Communications Corp.* 335,938
---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Computer Services/Software - (continued)
8,100 Hnc Software, Inc.* $ 233,888
7,800 Hyperion Solutions Corp.* 146,738
7,000 IDT Corp.* 108,500
26,000 Informix Corp.* 284,375
16,000 Insituform Technologies, Inc.* 240,000
4,700 Jack Henry & Associates, Inc. 180,363
12,000 Microchip Technology, Inc.* 346,500
7,400 Project Software & Development, Inc.* 187,775
18,900 Rational Software Corp.* 624,881
13,400 Read Rite Corp.* 223,613
14,400 Sandisk Corp.* 415,800
12,800 Software AG Systems, Inc.* 219,200
8,300 Transaction Systems Architects* 395,288
7,900 Wind River Systems, Inc.* 260,700
------------
6,571,490
------------------------------------------------------------
Computer Software and Services - 0.2%
8,400 AVT Corp.* 228,900
------------------------------------------------------------
Computers/Computer Peripherals & Software - 0.1%
6,000 Visio Corp.* 151,125
------------------------------------------------------------
Construction/Environmental Services - 2.0%
10,800 ACX Technologies, Inc.* 153,225
6,930 Allied Waste Industries, Inc.* 141,199
7,900 Ameron International Corp. 304,644
15,200 Comfort Systems U.S.A.* 273,600
7,200 Dycom Industries, Inc.* 281,250
4,300 Elcor Corp. 148,888
10,500 Florida Rock Industrial, Inc. 303,844
10,900 Granite Construction, Inc. 352,888
9,400 Lone Star Industries, Inc. 345,450
12,500 NCI Building Systems, Inc.* 334,375
4,200 Stone & Webster, Inc. 131,775
11,100 Tower Automotive, Inc.* 280,275
------------
3,051,413
------------------------------------------------------------
Consumer Products - 1.0%
15,600 American Safety Razor Co.* 171,600
22,200 Herbalife International, Inc. 337,163
47,200 Playtex Products, Inc.* 775,850
21,700 Weider Nutrition International, Inc. 157,325
------------
1,441,938
------------------------------------------------------------
Consumer Staples - 0.9%
6,631 Clorox Co. 829,704
19,800 Media Arts Group, Inc.* 267,300
41,500 Paragon Trade Brands, Inc.* 210,094
------------
1,307,098
------------------------------------------------------------
Diversified Manufacturing - 1.5%
47,200 Federal Signal Corp. 1,253,750
12,500 General Cable Corp. 235,938
7,900 Getchell Gold Corp.* 209,350
------------------------------------------------------------
</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>
Diversified Manufacturing - (continued)
20,600 Helix Technology Corp. $ 422,300
3,700 Precision Castparts Corp. 140,369
------------
2,261,707
---------------------------------------------------------
Electrical Services - 1.2%
3,200 Central Hudson Gas & Electric 129,000
2,800 Cilcorp, Inc. 161,350
16,000 Eastern Utilities Association 473,000
13,400 Empire District Electric Co. 333,325
10,500 Hawaiian Electric Industries, Inc. 393,094
12,900 Nevada Power Co. 319,275
------------
1,809,044
---------------------------------------------------------
Electronics & Other Electrical Equipment - 1.7%
14,500 Baldor Electric Co. 287,281
7,300 C-cube Microsystems, Inc.* 146,913
13,200 Group Maintenance America* 197,175
3,200 Jabil Circuit, Inc.* 228,600
14,100 Juno Lighting, Inc. 313,725
9,400 Novellus Systems, Inc.* 687,375
16,900 Park Electrochemical Corp. 505,944
15,400 Watsco, Inc. 236,775
------------
2,603,788
---------------------------------------------------------
Electronics-Semiconductors - 0.1%
7,100 Aavid Thermal Technologies* 118,925
---------------------------------------------------------
Energy Refining & Marketing - 1.1%
19,000 Avista Corp. 351,500
15,200 Calpine Corp.* 562,400
24,700 Octel Corp.* 328,819
9,100 Penn Virginia Corp. 186,550
16,100 Snyder Oil Corp. 183,138
------------
1,612,407
---------------------------------------------------------
Engineering - 0.3%
9,400 Jacobs Engineering Group, Inc.* 394,213
---------------------------------------------------------
Enterprise Systems - 0.4%
8,500 Avid Technology, Inc.* 247,563
9,900 Electronics For Imaging, Inc.* 356,400
------------
603,963
---------------------------------------------------------
Entertainment & Leisure - 0.9%
13,500 Hollywood Entertainment Co.* 456,469
13,000 International Speedway Corp. 552,500
11,700 Premier Parks, Inc.* 370,744
------------
1,379,713
---------------------------------------------------------
Environmental Services - 0.1%
3,459 Waste Management, Inc. 172,734
---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Financial Services - 2.2%
25,800 Advanta Corp. $ 353,944
12,900 Advest Group, Inc. 326,531
12,000 Carolina First Corp. 263,250
6,700 CMAC Investment Corp. 293,963
26,800 Credit Acceptance Corp.* 189,275
20,000 Delta Financial Corp.* 152,500
20,500 Everen Capital Corp. 499,688
9,000 Fair Isaac & Co., Inc. 454,500
11,400 Financial Federal Corp.* 266,475
15,300 Reliance Bancorp, Inc. 481,950
------------
3,282,076
-------------------------------------------------------------
Food & Beverages - 1.2%
17,900 Agribrands International* 601,888
14,700 International Multifoods Corp. 354,638
8,800 Michael Foods, Inc. 196,900
11,300 Pilgrims Pride Corp. 264,138
14,800 Universal Foods Corp. 333,000
------------
1,750,564
-------------------------------------------------------------
Forest Products - 0.7%
13,800 Kimball International, Inc. Class-B 243,225
8,100 Schweitzer-Mauduit International, Inc. 111,375
51,800 Unisource Worldwide, Inc. 427,350
10,800 United Stationers, Inc.* 253,800
------------
1,035,750
-------------------------------------------------------------
Gaming - 0.5%
21,200 Boyd Gaming Corp.* 74,200
16,600 Harveys Casino Resorts 477,250
6,175 Lakes Gaming, Inc.* 59,820
24,700 Park Place Entertainment Corp.* 168,269
------------
779,539
-------------------------------------------------------------
Health & Medical Services - 6.3%
6,600 Agouron Pharmaceuticals, Inc.* 391,463
36,800 Ameripath, Inc.* 427,800
8,700 Amerisource Health Corp.* 674,250
12,700 Ballard Medical Products 307,181
10,400 Chemed Corp. 332,150
14,600 Covance, Inc.* 459,900
7,000 Gilead Sciences, Inc.* 301,000
10,200 Hanger Orthopedic Group* 255,000
7,600 Icos Corp.* 203,300
4,600 Inhale Therapeutic Systems* 153,525
19,100 Ivax Corp.* 259,044
6,100 Jones Pharmaceutical, Inc. 194,438
3,600 Life Technologies, Inc. 136,350
11,800 Maxxim Medical, Inc.* 320,075
6,300 Medicis Pharmaceutical Co.* 448,088
9,400 Medimmune, Inc.* 465,300
10,400 Millennium Pharmaceutical* 394,875
3,600 Pathogenesis Corp.* 175,950
-------------------------------------------------------------
</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)
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Health & Medical Services - (continued)
5,000 Pediatrix Medical Group, Inc.* $ 322,813
17,300 Primark Corp.* 415,200
9,800 Renal Care Group, Inc.* 303,800
6,400 ResMed, Inc.* 315,200
21,200 Roberts Pharmaceutical Co.* 413,400
4,900 Sepracor, Inc.* 562,275
10,000 Sequus Pharmaceuticals, Inc.* 190,000
26,300 Sunrise Medical, Inc.* 208,756
5,600 Vertex Pharmaceuticals, Inc.* 176,400
14,300 Veterinary Centers America, Inc.* 260,975
5,400 Visx, Inc.* 329,400
------------
9,397,908
--------------------------------------------------------
Health Suppliers/Services - 1.0%
18,800 Imation Corp. 292,575
9,800 Mettler-Toldeo International* 259,700
12,300 Owens & Minor, Inc. 161,438
18,123 Priority Healthcare Corp.* 704,532
------------
1,418,245
--------------------------------------------------------
Healthcare Management - 1.1%
33,300 American Homepatient, Inc.* 83,250
9,752 Charter One Financial, Inc. 273,056
29,000 Mariner Post-Acute Network, Inc.* 137,750
19,000 Novacare, Inc.* 54,625
13,000 OEC Medical Systems, Inc.* 365,625
19,200 Quest Diagnostics, Inc.* 363,600
10,600 Sierra Health Services, Inc.* 200,075
20,000 Sun Healthcare Group, Inc.* 101,250
------------
1,579,231
--------------------------------------------------------
Home Builders - 1.4%
13,800 Champion Enterprises, Inc.* 322,575
16,300 Kaufman & Broad Home Co. 459,456
14,400 Pulte Corp. 434,700
16,600 Ryland Group, Inc. 433,675
10,600 Toll Brothers, Inc.* 243,800
4,300 U S Home Corp.* 152,650
------------
2,046,856
--------------------------------------------------------
Hotels & Restaurants - 0.9%
19,600 Buffets, Inc.* 177,625
25,600 Lubys Cafeterias, Inc. 395,200
20,500 Ruby Tuesday, Inc. 408,719
14,500 Sonic Corp.* 366,125
------------
1,347,669
--------------------------------------------------------
Household Durables - 0.5%
15,400 Aaron Rents, Inc. 213,675
15,100 La-Z-Boy, Inc. 271,800
7,700 Toro Co. 267,575
------------
753,050
--------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Industrial Machinery - 1.3%
11,400 Applied Power, Inc. $ 421,800
12,900 Briggs & Stratton Corp. 701,438
9,200 Kaydon Corp. 308,775
5,100 Nacco Industries, Inc. 431,906
------------
1,863,919
---------------------------------------------------------
Information Management - 1.2%
28,600 BA Merchant Services, Inc.* 575,575
6,200 Choicepoint, Inc.* 337,900
4,900 Earthlink Network, Inc.* 391,388
24,000 Infousa, Inc. Class B* 139,500
10,500 National Computer Systems, Inc. 401,625
------------
1,845,988
---------------------------------------------------------
Insurance - 1.6%
14,400 Arthur J. Gallagher & Co. 720,000
15,500 Capital Re Corp. 281,906
18,491 Fidelity National Financial, Inc. 492,323
14,300 First American Financial Corp. 437,044
15,200 Highlands Insurance Group* 197,600
6,300 SCPIE Holdings, Inc. 187,031
------------
2,315,904
---------------------------------------------------------
Insurance Services - 1.0%
6,600 Argonaut Group Inc. 174,900
7,000 E. W. Blanch Holding, Inc. 396,813
16,800 Selective Insurance Group 306,600
7,200 Stewart Information Services Corp. 385,200
7,200 Trenwick Group, Inc. 237,600
------------
1,501,113
---------------------------------------------------------
Insurance-Life - 1.0%
9,858 Delphi Financial Group, Inc.* 494,132
17,200 FBL Financial Group, Inc. 371,950
10,100 Reinsurance Group of America, Inc. 679,856
------------
1,545,938
---------------------------------------------------------
Insurance-Property and Casualty - 0.6%
13,300 Chartwell Re Corp. 309,225
12,309 Medical Assurance, Inc.* 375,425
14,700 TIG Holdings, Inc. 232,444
------------
917,094
---------------------------------------------------------
Internet Software - 0.2%
1,200 Network Solutions, Inc.* 289,200
---------------------------------------------------------
Investment Brokers & Managers - 0.7%
4,400 Dain Rauscher Corp. 135,850
19,100 Eaton Vance Corp. 393,938
9,500 Jeffries Group, Inc. 498,156
------------
1,027,944
---------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Machinery - 0.7%
12,700 Columbus McKinnon Corp. $ 287,338
11,600 Commercial Intertech Corp. 163,850
12,900 Flowserve Corp. 216,881
13,000 Thomas Industries, Inc. 238,875
5,000 Zebra Technologies, Inc.* 150,938
------------
1,057,882
-------------------------------------------------------
Media & Communications - 1.3%
25,700 Ascent Entertainment Group* 314,825
13,000 Big Flower Press Holdings, Inc.* 369,688
20,400 McClatchy Newspapers, Inc. 596,700
8,200 Media General, Inc. 410,000
6,300 Metris Companies, Inc. 318,150
------------
2,009,363
-------------------------------------------------------
Medical/Biotechnology - 0.1%
14,400 PSS World Medical, Inc.* 225,000
-------------------------------------------------------
Metals-Diversified - 0.2%
21,000 Asarco, Inc. 292,688
-------------------------------------------------------
Miscellaneous-Consumer - 0.4%
7,000 Alltrista Corp.* 168,875
14,300 California Water Services Group 372,694
------------
541,569
-------------------------------------------------------
Nonferrous Metals - 0.5%
9,700 AFC Cable Systems, Inc.* 341,925
39,700 Battle Mountain Gold Co. 146,394
10,900 Chase Industries, Inc.* 115,813
14,750 Encore Wire Corp.* 132,750
------------
736,882
-------------------------------------------------------
Office & Business Equipment - 2.4%
8,800 Adac Laboratories* 194,150
5,000 CSG Systems International, Inc.* 374,375
13,200 Data General Corp.* 258,225
13,700 Gerber Scientific, Inc. 262,869
9,100 Micron Electronics, Inc.* 139,913
12,800 Network Appliances, Inc.* 678,400
15,700 Psinet, Inc.* 532,819
9,300 Safeguard Scientifics, Inc.* 356,306
9,600 Wang Laboratories, Inc.* 212,400
8,600 Xircom, Inc.* 389,150
8,800 Xylan Corp.* 178,200
------------
3,576,807
-------------------------------------------------------
Oil & Gas Exploration - 0.4%
17,800 Cabot Oil & Gas Corp. 233,625
12,000 Devon Energy Corp. 314,250
26,100 Range Resources Corp. 79,931
------------
627,806
-------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Oil & Gas Services - 1.0%
13,600 Barrett Resources Corp.* $ 236,300
12,300 Cross Timbers Oil Co. 85,331
8,400 Houston Exploration Co.* 119,700
21,800 Oceaneering International, Inc.* 209,825
9,100 Peoples Energy Corp. 313,950
24,500 Pool Energy Services Co.* 294,000
11,700 SEMCO Energy, Inc. 190,125
------------
1,449,231
-------------------------------------------------------
Packaging & Container - 0.4%
10,700 Aptargroup, Inc. 292,244
6,600 Ball Corp. 297,000
------------
589,244
-------------------------------------------------------
Paper & Forest Products - 0.4%
16,400 Potlatch Corp. 566,825
-------------------------------------------------------
Personal Computers and Peripherals - 0.7%
11,500 Banctec, Inc.* 149,500
11,800 Bell & Howell Co.* 448,400
30,800 CHS Electronics, Inc.* 460,075
------------
1,057,975
-------------------------------------------------------
Pharmaceuticals - 0.6%
12,700 Alpharma, Inc. 439,738
18,133 Bindley Western Industries, Inc. 457,858
------------
897,596
-------------------------------------------------------
Pipelines - 0.8%
18,000 Aquarion Co. 694,125
17,100 Oneok, Inc. 500,175
------------
1,194,300
-------------------------------------------------------
Printing & Publishing - 0.2%
25,100 Hollinger International, Inc. 329,438
-------------------------------------------------------
Real Estate - 0.3%
30,200 Security Capital Group, Inc.* 381,275
-------------------------------------------------------
Recreational Products - 0.7%
26,700 Huffy Corp. 387,150
12,400 Jostens, Inc. 289,075
11,700 Russ Berrie and Company, Inc. 282,263
12,300 Sturm Ruger & Co., Inc. 134,531
------------
1,093,019
-------------------------------------------------------
Retail - 3.8%
25,000 Ann Taylor Stores Corp.* 968,750
14,800 Blair Corp. 309,875
8,300 Department 56, Inc.* 262,488
9,000 Express Scripts, Inc.* 591,750
9,500 Genovese Drug Stores 241,063
20,400 Heilig Meyers Co. 133,875
21,100 Inacom Corp.* 275,619
-------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
Statement of Investments (continued)
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Retail - (continued)
7,600 Long Drug Stores, Inc. $ 291,175
11,900 Michaels Stores, Inc.* 223,125
8,500 Micro Warehouse, Inc.* 331,500
16,000 Musicland Stores Corp.* 195,000
27,600 Petsmart, Inc.* 248,400
5,900 Shopko Stores Inc.* 187,325
9,900 The Buckle, Inc.* 264,825
21,500 The Cato Corp. 184,766
14,400 Transworld Entertainment* 212,400
22,400 Zale Corp.* 735,000
------------
5,656,936
---------------------------------------------------------------
Retail Trade - 0.2%
15,700 Central Garden & Pet Co.* 252,181
---------------------------------------------------------------
Savings and Loan - 0.5%
46,800 FirstFed Financial Corp.* 745,875
---------------------------------------------------------------
Semiconductors - 3.4%
16,300 Actel Corp.* 297,475
15,700 Anixter International, Inc.* 254,144
16,000 C&D Technologies, Inc. 382,000
13,600 California Microwave, Inc.* 153,000
9,600 CTS Corp. 456,600
21,200 Cypress Semiconductor Corp.* 212,000
10,700 Dallas Semiconductor Corp. 392,556
14,800 Esterline Technologies Corp.* 280,275
8,100 Level One Communications, Inc.* 319,950
11,300 Marshall Industries, Inc.* 254,956
11,200 Methode Electronics, Inc. 140,000
18,700 Micro Linear Corp.* 91,163
18,300 Neomagic Corp.* 257,344
6,900 Oak Industries, Inc.* 259,181
6,600 PMC-Sierra, Inc.* 490,463
2,200 QLogic Corp.* 303,325
11,800 Remec, Inc.* 236,000
11,000 Smart Modular Technologies* 225,500
------------
5,005,932
---------------------------------------------------------------
Software & Services - 0.8%
6,600 Computer Horizons Corp.* 131,588
3,286 DST Systems, Inc.* 203,527
5,300 New Era of Networks, Inc.* 318,331
4,500 Realnetworks, Inc.* 318,656
15,600 Systems & Computer Tech Corp.* 156,000
------------
1,128,102
---------------------------------------------------------------
Specialty Finance & Agencies - 0.8%
43,100 Long Beach Financial Corp.* 452,550
2,300 Rambus, Inc.* 172,788
42,425 Resource Bancshares Mortgage Group, Inc. 631,072
------------
1,256,410
---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Specialty Retail - 1.7%
65,900 Fingerhut Companies, Inc. $ 1,383,900
10,800 Goody's Family Clothing, Inc.* 116,438
45,600 Handleman Co.* 555,750
9,100 Linens-n-Things, Inc.* 335,563
6,625 Pacific Sunwear of California, Inc.* 167,695
------------
2,559,346
------------------------------------------------------------
Steel - 1.4%
15,700 AK Steel Holding Corp. 326,756
39,200 Armco, Inc.* 193,550
31,300 Bethlehem Steel Corp.* 269,963
20,400 Birmingham Steel Corp. 90,525
4,800 Cleveland Cliffs, Inc. 196,200
36,700 National Steel Corp. 346,356
15,100 Quanex Corp. 299,169
11,000 Reliance Steel & Aluminum Corp. 301,125
------------
2,023,644
------------------------------------------------------------
Supermarkets - 0.2%
29,200 Fleming Companies, Inc. 260,975
------------------------------------------------------------
Telecommunications - 1.9%
33,500 Cellular Communications Puerto Rico* 812,375
13,600 CoreComm Ltd.* 314,500
9,000 ICG Communications* 169,313
8,400 ITC Deltacom, Inc.* 126,000
16,700 Network Equipment Technologies, Inc.* 157,606
26,400 Paging Network, Inc.* 176,550
17,400 Skytel Communications* 458,925
12,300 U.S. LEC Corp.* 176,044
11,900 WinStar Communications, Inc.* 510,956
------------
2,902,269
------------------------------------------------------------
Telecommunications Equipment - 0.9%
10,100 Aspect Telecommunications Corp.* 90,900
4,800 Concord Communications, Inc.* 249,300
7,500 Plantronics, Inc.* 605,156
10,300 Polycom, Inc.* 261,363
8,100 Tekelec* 162,000
------------
1,368,719
------------------------------------------------------------
Temporary Help Services - 0.1%
8,600 StaffMark, Inc.* 172,000
------------------------------------------------------------
Textiles - 1.8%
3,700 American Eagle Outfitters* 252,988
22,900 Brown Group, Inc. 367,831
7,000 Kellwood Co. 194,250
14,100 Kenneth Cole Productions* 319,013
9,700 Nautica Enterprises, Inc.* 152,775
11,600 Oxford Industries, Inc. 303,775
16,300 Phillips-Van Heusen Corp. 102,894
8,300 Quiksilver, Inc.* 279,088
------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
GOLDMAN SACHS CORE SMALL CAP EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Textiles - (continued)
9,800 Russell Corp. $ 192,938
13,200 Springs Industries, Inc. 551,100
------------
2,716,652
-----------------------------------------------------------
Tires & Rubber - 0.6%
13,500 Bandag, Inc. 529,875
21,700 Mark IV Industries, Inc. 325,500
------------
855,375
-----------------------------------------------------------
Tobacco - 0.3%
22,400 Dimon, Inc. 148,400
9,100 Universal Corp. 275,844
------------
424,244
-----------------------------------------------------------
Transportation - 0.2%
14,375 Varlen Corp. 345,000
-----------------------------------------------------------
Transportation/Storage - 1.0%
13,500 Alexander & Baldwin, Inc. 272,953
17,400 Arnold Industries, Inc. 263,175
5,300 Midwest Express Holdings* 154,363
19,200 Overseas Shipholding Group 290,400
11,600 Xtra Corp. 483,575
------------
1,464,466
-----------------------------------------------------------
Trucking - 0.4%
26,250 Rollins Truck Leasing Corp. 311,719
18,200 Yellow Corp.* 326,463
------------
638,182
-----------------------------------------------------------
Utilities - 1.9%
23,700 CMP Group, Inc. 426,600
3,400 Commonwealth Energy Systems 133,450
8,900 Equitable Resources, Inc. 231,956
17,800 Northwestern Corp. 473,925
15,700 Public Service Company of New Mexico 295,356
25,200 Southwestern Energy Co. 176,400
13,100 TNP Enterprises, Inc. 465,869
25,200 UGI Corp. 552,783
------------
2,756,339
-----------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $125,381,489) $144,217,370
-----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
U.S. Treasury Obligation - 0.4%
<S> <C> <C> <C>
U.S. Treasury Bill(a)
$550,000 4.48% 02/04/99 $ 549,797
---------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $549,797) $ 549,797
---------------------------------------------
Repurchase Agreement - 2.4%
Joint Repurchase Agreement Account(a)
$3,500,000 4.84% 02/01/99 $ 3,500,000
---------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $3,500,000) $ 3,500,000
---------------------------------------------
TOTAL INVESTMENTS
(Cost $129,431,286)(b) $148,267,167
---------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
Federal Income
Tax Information:
Gross unrealized
gain for
investments in
which
value exceeds
cost $ 28,795,570
Gross unrealized
loss for
investments in
which
cost exceeds
value (11,072,128)
--------------------------------
Net unrealized
gain $ 17,723,442
--------------------------------
</TABLE>
Futures contracts open at January 31, 1999 are as follows:
<TABLE>
<CAPTION>
Number of
Contracts Settlement Unrealized
Type Long(c) Month Loss
----------------------------------------------------
<S> <C> <C> <C>
Russell 2000 Index 19 March 1999 $(20,300)
----------------------------------------------------
</TABLE>
* Non-income producing security.
(a) Portions of these securities are being segregated as collateral for
futures contracts.
(b) The aggregate cost for federal income tax purposes is $130,543,725.
(c) Each Russell 2000 Index future utilize a multiplier of 500 per contract
with the index value at time of purchase in notional par value. The net
notional amount and market value at risk are $4,076,800 and $4,056,500,
respectively. The determination of notional amounts does not consider
market risk factors and therefore notional amounts as presented here are
indicative only of volume of activity and not a measure of market risk.
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.
33
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
Statement of Investments
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 98.9%
Aerospace/Defense - 0.9%
6,800 Honeywell, Inc. $ 443,275
800 Textron, Inc. 59,550
400 United Technologies Corp. 47,775
-----------
550,600
-----------------------------------------------------
Airfreight, Truck & Other - 0.0%
600 Seacor Smit, Inc.* 26,700
-----------------------------------------------------
Airlines - 1.4%
6,100 Alaska Air Group, Inc.* 307,287
9,800 Delta Air Lines, Inc. 534,712
-----------
841,999
-----------------------------------------------------
Auto/Vehicle - 1.1%
9,400 Ford Motor Co. 577,513
1,400 Hertz Corp. 60,812
-----------
638,325
-----------------------------------------------------
Automobiles & Automobile Parts - 0.1%
1,000 Harley Davidson, Inc. 52,000
-----------------------------------------------------
Autos and Trucks - 0.1%
600 General Motors Corp. 53,850
-----------------------------------------------------
Banks - 13.5%
17,600 Banc One Corp. 921,800
20,200 BankAmerica Corp. 1,350,875
15,100 BB&T Corp. 577,575
17,800 Chase Manhattan Corp. 1,369,488
18,500 Citigroup, Inc. 1,037,156
2,800 Comerica, Inc. 174,825
19,500 First Union Corp. 1,026,188
8,200 Fleet Financial Group, Inc. 363,362
7,300 Mellon Bank Corp. 489,100
6,800 National City Corp. 483,225
5,800 PNC Bank Corp. 296,888
1,000 Suntrust Banks, Inc. 70,438
-----------
8,160,920
-----------------------------------------------------
Basic Industries - 0.4%
5,500 Barrick Gold Corp. 104,843
2,800 Corning, Inc. 136,500
-----------
241,343
-----------------------------------------------------
Business Services - 0.2%
2,000 NCR Corp.* 97,500
-----------------------------------------------------
Chemical Products - 2.3%
6,100 Dow Chemicals Co. 537,181
500 Du Pont (E.I.) de Nemours & Co. 25,594
2,800 Monsanto Co. 133,175
11,200 PPG Industries, Inc. 602,000
700 Vulcan Materials Co. 96,294
-----------
1,394,244
-----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Communication-Equipment - 0.6%
7,900 General Motors Corp. Class H $ 389,075
-----------------------------------------------------------
Communications Services Companies - 2.8%
10,800 Airtouch Communications, Inc.* 1,042,875
14,100 United States Cellular Corp.* 633,619
-----------
1,676,494
-----------------------------------------------------------
Computer Services/Software - 0.7%
2,500 Gateway 2000, Inc.* 193,125
11,000 Novell, Inc.* 224,125
-----------
417,250
-----------------------------------------------------------
Computers/Office - 0.2%
1,200 Xerox Corp. 148,800
-----------------------------------------------------------
Conglomerates - 0.1%
600 Tyco International Ltd. 46,238
-----------------------------------------------------------
Consumer Products - 3.5%
32,600 Eastman Kodak Co. 2,131,225
-----------------------------------------------------------
Consumer Staples - 0.3%
1,400 Clorox Co. 175,175
-----------------------------------------------------------
Electrical Services - 2.8%
5,900 DTE Energy Co. 238,950
12,900 New England Electric Systems 631,294
1,800 P G & E Corp. 57,486
17,800 Public Service Enterprise 706,438
2,200 The Southern Co. 59,263
-----------
1,693,431
-----------------------------------------------------------
Electronics & Other Electrical Equipment -
2.6%
3,300 AMP, Inc. 173,662
5,000 Arrow Electronics, Inc.* 82,500
17,000 Emerson Electric Co. 989,187
5,400 Johnson Controls, Inc. 347,963
-----------
1,593,312
-----------------------------------------------------------
Enterprise Systems - 2.7%
500 EMC Corp.* 54,438
8,300 International Business Machines, Inc. 1,520,975
2,100 Unisys Corp.* 69,563
-----------
1,644,976
-----------------------------------------------------------
Entertainment & Leisure - 0.4%
6,300 Royal Caribbean Cruise Lines 250,425
200 Viacom, Inc. Class B* 17,000
-----------
267,425
-----------------------------------------------------------
Financial Services - 5.1%
5,000 Capital One Financial Corp. 661,875
13,200 Countrywide Credit, Inc. 627,000
-----------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Financial Services - (continued)
8,400 Federal National Mortgage Association $ 612,150
3,300 Heller Financial, Inc. 90,338
19,300 Regions Financial, Corp. 740,638
10,600 Wells Fargo & Co. (New) 370,338
-----------
3,102,339
-----------------------------------------------------------
Food & Beverages - 0.9%
600 General Mills, Inc. 50,363
17,000 IBP, Inc. 410,125
900 Nabisco Holdings Corp. 37,856
1,400 Ralston Purina Co. 38,325
-----------
536,669
-----------------------------------------------------------
Forest Products - 0.7%
8,000 Weyerhaeuser Co. 433,000
-----------------------------------------------------------
Health & Medical Services - 0.6%
1,500 Bausch & Lomb, Inc. 92,062
1,100 Pacificare Health Systems* 77,825
4,700 United Healthcare Corp. 210,325
-----------
380,212
-----------------------------------------------------------
Health Suppliers/Services - 0.0%
300 Waters Corp.* 27,300
-----------------------------------------------------------
Healthcare Management - 0.9%
2,000 McKesson, Inc. 150,250
100 Trigon Healthcare, Inc.* 3,194
5,100 Wellpoint Health Networks, Inc.* 381,544
-----------
534,988
-----------------------------------------------------------
Holding Company-Diversified - 0.1%
2,800 Crane Co. 76,125
-----------------------------------------------------------
Home Furnishing & Services - 0.3%
6,500 Sherwin Williams Co. 166,563
-----------------------------------------------------------
Household Durables - 0.7%
2,200 Maytag Corp. 139,013
6,800 Whirlpool Corp. 305,575
-----------
444,588
-----------------------------------------------------------
Household Products - 0.1%
2,100 Premark International, Inc. 71,925
-----------------------------------------------------------
Industrial Machinery - 0.9%
6,700 Ingersoll-Rand Co. 318,250
1,500 Nacco Industries, Inc. 127,031
2,300 York International Corp. 88,263
-----------
533,544
-----------------------------------------------------------
Information Management - 0.6%
8,900 Sabre Group Holdings, Inc.* 392,713
-----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Insurance - 1.1%
3,800 American International Group, Inc. $ 391,162
600 Financial Security Assurance Holdings Ltd. 32,963
3,800 MBIA, Inc. 249,138
-----------
673,263
----------------------------------------------------------------
Insurance Services - 3.8%
5,100 AMBAC, Inc. 305,043
18,200 Loews Corp. 1,532,213
7,800 Marsh & McLennan & Co. 490,425
-----------
2,327,681
----------------------------------------------------------------
Insurance-Life - 1.8%
900 American General Corp. 64,181
2,400 Equitable Companies, Inc. 167,400
8,500 Hartford Life, Inc. 479,188
7,600 Nationwide Financial Services, Inc. 364,325
700 Protective Life Corp. 24,193
-----------
1,099,287
----------------------------------------------------------------
Insurance-Property and Casualty - 0.8%
7,100 Allstate Corp. 266,694
6,600 Travelers Property & Casualty Corp. 190,163
-----------
456,857
----------------------------------------------------------------
Integrated Oil - 11.0%
6,400 Atlantic Richfield Co. 367,200
397 BP Amoco PLC 32,205
24,700 Chevron Corp. 1,846,325
39,000 Exxon Corp. 2,747,063
17,200 Mobil Corp. 1,508,225
4,100 Royal Dutch Petroleum ADR 164,256
500 Texaco, Inc. 23,687
-----------
6,688,961
----------------------------------------------------------------
Logistics/Rail - 0.1%
1,600 Norfolk Southern Corp. 44,100
----------------------------------------------------------------
Media & Communications - 1.2%
300 Pulitzer Publishing Co. 23,905
4,600 SBC Communications, Inc. 248,400
Tele-Communications, Inc.
4,100 (Liberty Media Group)* 281,106
3,100 U.S. West, Inc. 191,231
-----------
744,642
----------------------------------------------------------------
Metal Products - 0.5%
3,300 Aluminum Company of America, Inc. 275,962
----------------------------------------------------------------
Office & Business Equipment - 0.2%
2,000 Pitney-Bowes, Inc. 137,625
----------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
35
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
Statement of Investments (continued)
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Personal Computers and Peripherals - 0.4%
1,500 Apple Computer, Inc* $ 61,781
6,100 CHS Electronics, Inc.* 91,118
800 Lexmark International Group, Inc.* 90,500
-----------
243,399
--------------------------------------------------------
Pharmaceuticals - 0.7%
3,300 Amgen, Inc.* 421,781
--------------------------------------------------------
Restaurants & Hotels - 0.6%
7,100 Tricon Global Restaurants, Inc.* 337,694
--------------------------------------------------------
Retail - 1.2%
100 American Stores Co. 3,625
4,600 Ann Taylor Stores Corp.* 178,250
1,800 Dayton Hudson Corp. 114,750
1,500 Federated Department Stores, Inc.* 62,719
1,700 Ingram Micro, Inc.* 51,531
3,000 Tiffany & Co. 172,688
3,700 Zale Corp.* 121,406
-----------
704,969
--------------------------------------------------------
Retail Trade - 0.2%
5,100 Staples, Inc.* 145,988
--------------------------------------------------------
Security and Commodity Brokers - 1.7%
2,600 Bear Stearns Companies, Inc. 122,524
3,100 Lehman Brothers Holdings, Inc. 169,531
2,600 Merrill Lynch & Co., Inc. 197,600
6,500 Morgan Stanley Dean Witter & Co. 564,281
-----------
1,053,936
--------------------------------------------------------
Semiconductors - 0.9%
3,800 Intel Corp. 535,563
--------------------------------------------------------
Semiconductors & Electronics - 0.4%
3,100 Motorola, Inc. 223,975
--------------------------------------------------------
Software & Services - 0.2%
2,000 Computer Sciences Corp.* 137,125
--------------------------------------------------------
Specialty Finance & Agencies - 1.4%
4,700 C.I.T. Group, Inc. 149,813
5,000 Golden West Financial 469,375
2,300 Providian Financial Corp. 231,869
-----------
851,057
--------------------------------------------------------
Specialty Retail - 1.7%
100 American Greetings Corp. 3,950
2,200 Best Buy Co., Inc.* 199,650
4,000 Home Depot, Inc. 241,500
9,000 Lowes Companies, Inc. 524,813
1,700 Office Depot, Inc.* 59,075
-----------
1,028,988
--------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Steel - 1.0%
3,100 AK Steel Holding Corp. $ 64,518
8,800 Nucor Corp. 431,200
4,900 USX-US Steel Group 127,706
-----------
623,424
----------------------------------------------------
Supermarkets - 2.2%
10,500 CVS Corp. 574,875
2,000 Kroger Co.* 127,000
12,600 Rite Aid Corp. 618,975
-----------
1,320,850
----------------------------------------------------
Technology Capital Goods - 0.3%
3,000 Applied Materials, Inc.* 189,563
----------------------------------------------------
Telecommunications - 12.0%
4,500 Ameritech Corp. 293,062
19,900 AT&T Corp. 1,805,925
15,400 BCE, Inc. 687,225
13,200 Bell Atlantic Corp. 792,000
2,900 BellSouth Corp. 129,412
6,100 Cincinnati Bell, Inc. 123,906
16,900 GTE Corp. 1,140,750
8,800 MCI Worldcom, Inc.* 701,800
16,300 Sprint Corp. 1,367,163
4,200 Telephone & Data Systems, Inc. 223,650
-----------
7,264,893
----------------------------------------------------
Telecommunications Equipment - 0.2%
3,000 General Instrument Corp.* 106,500
----------------------------------------------------
Textiles - 0.1%
100 Mohawk Industries, Inc.* 3,850
1,200 VF Corp. 51,150
-----------
55,000
----------------------------------------------------
Tobacco - 1.5%
8,600 Fortune Brands, Inc. 285,950
23,200 RJR Nabisco Holdings Corp. 626,400
-----------
912,350
----------------------------------------------------
Transportation-Rail - 0.5%
7,000 Burlington Northern Santa Fe 242,375
1,100 CSX Corp. 44,275
-----------
286,650
----------------------------------------------------
Transportation/Storage - 0.1%
2,000 Tidewater, Inc. 43,250
----------------------------------------------------
Utilities - 3.5%
4,700 Dominion Resources, Inc. 210,325
3,900 Energy East Corp. 199,631
1,400 Entergy Corp. 41,213
7,900 FPL Group, Inc. 433,512
30,900 Keyspan Energy, Inc. 836,231
----------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
36
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Utilities - (continued)
4,500 Texas Utilities Co. $ 197,719
5,500 Unicom Corp. 195,938
-----------
2,114,569
-----------------------------------------
TOTAL COMMON STOCKS
(Cost $60,101,321) $59,990,750
-----------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
U.S. Treasury Obligation - 0.7%
<S> <C> <C> <C>
U.S. Treasury Bill(c)
$450,000 4.38% 02/04/99 $ 449,836
--------------------------------------------
TOTAL U.S. TREASURY OBLIGA-
TION
(Cost $449,836) $ 449,836
--------------------------------------------
TOTAL INVESTMENTS
(Cost $60,551,157)(a) $60,440,586
--------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
Federal Income
Tax Information:
Gross unrealized
gain for
investments in
which value
exceeds cost $ 1,371,796
Gross unrealized
loss for
investments in
which cost
exceeds value (1,482,367)
-------------------------------
Net unrealized
loss $ (110,571)
-------------------------------
</TABLE>
Futures contracts open at January 31, 1999 are as follows:
<TABLE>
<CAPTION>
Number of
Contracts Settlement Unrealized
Type Long(b) Month Gain
------------------------------------------------
<S> <C> <C> <C>
S&P 500 Index 1 March, 1999 $993
------------------------------------------------
</TABLE>
* Non-income producing security.
(a) The aggregate cost for federal income tax purposes is $60,551,157.
(b) Each S&P 500 Stock Index future utilizes a multiplier of 250 per contract
with the index value at time of purchase in notional par value. The net
notional amount and market value at risk are $319,382 and $320,375, re-
spectively. The determination of notional amounts does not consider mar-
ket risk factors and therefore notional amounts as presented here are
indicative only of volume of activity and not a measure of market risk.
(c) This security is being segregated as collateral for futures contracts.
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.
37
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Performance Summary
January 31, 1999
The following graph shows the value, as of January 31, 1999, of a $10,000 in-
vestment made (with the maximum sales charge of 5.5% per Class A and contin-
gent deferred sales charges of 5.0% and 1.0% for Class B and C, respectively
and at NAV for the Institutional and Service Classes) on August 15, 1997
(commencement of operations) of the Goldman Sachs CORE International Equity
Fund. For comparative purposes, the performance of the Fund's benchmark (Mor-
gan Stanley Gross Europe, Australia, Far East Index ("MS Gross EAFE 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 International Equity Fund's Lifetime Performance
Performance of a $10,000 Investment, Distributions Reinvested August 15, 1997
to January 31, 1999
[LINE GRAPH]
Morgan Stanley
Class A Class B Class C Institutional Service Gross EAP
- ------------------------------------------------------------------------------
8/15/97 $ 9,450 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
- ------------------------------------------------------------------------------
8/97 9,045 9,570 9,570 9,570 9,570 9,540
- ------------------------------------------------------------------------------
9/97 9,405 9,950 9,950 9,960 9,950 10,076
- ------------------------------------------------------------------------------
10/97 8,620 9,910 9,120 9,130 9,120 9,304
- ------------------------------------------------------------------------------
11/97 8,365 8,840 8,840 8,860 8,850 9,211
- ------------------------------------------------------------------------------
12/97 8,293 8,760 8,770 8,794 8,780 9,294
- ------------------------------------------------------------------------------
1/98 8,728 9,210 9,220 9,255 9,230 9,722
- ------------------------------------------------------------------------------
2/98 9,361 9,880 9,890 9,936 9,910 10,348
- ------------------------------------------------------------------------------
3/98 9,655 10,190 10,200 10,256 10,230 10,669
- ------------------------------------------------------------------------------
4/98 9,645 10,170 10,180 10,246 10,220 10,755
- ------------------------------------------------------------------------------
5/98 9,541 10,060 10,080 10,146 10,110 10,706
- ------------------------------------------------------------------------------
6/98 9,456 9,970 9,980 10,056 10,020 10,789
- ------------------------------------------------------------------------------
7/98 9,579 10,090 10,100 10,186 10,150 10,901
- ------------------------------------------------------------------------------
8/98 8,179 8,620 8,620 8,704 8,670 9,553
- ------------------------------------------------------------------------------
9/98 7,943 8,370 8,370 8,464 8,420 9,262
- ------------------------------------------------------------------------------
10/98 8,747 9,210 9,220 9,325 9,280 10,230
- ------------------------------------------------------------------------------
11/98 9,134 9,620 9,630 9,746 9,690 10,757
- ------------------------------------------------------------------------------
12/98 9,440 9,930 9,940 10,076 10,017 11,184
- ------------------------------------------------------------------------------
1/99 9,459 9,552 9,960 10,106 10,037 11,154
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Return through January 31,
1999 Since Inception One Year
<S> <C> <C>
Class A (commenced August 15, 1997)
Excluding sales charges 0.05% 8.37%
Including sales charges -3.73% 2.38%
---------------------------------------------------------------------------
Class B (commenced August 15, 1997)
Excluding contingent deferred sales charges -0.34% 8.03%
Including contingent deferred sales charges -3.08% 3.04%
---------------------------------------------------------------------------
Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges -0.27% 8.03%
Including contingent deferred sales charges -0.27% 7.03%
---------------------------------------------------------------------------
Institutional Class (commenced August 15, 1997) 0.72% 9.20%
---------------------------------------------------------------------------
Service Class (commenced August 15, 1997) 0.25% 8.74%
---------------------------------------------------------------------------
</TABLE>
38
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Statement of Investments
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 97.8%
Australia - 0.5%
65,400 Coca Cola Amatil (Food & Beverages) $ 267,377
49,600 General Property Trust (Real Estate) 93,082
218,209 Leighton Holdings (Construction) 886,340
13,700 National Australia Bank (Banking) 230,261
65,300 Publishing & Broadcasting Ltd. (Broadcast Media) 337,206
50,900 Qantas Airways (Airlines) 110,908
31,100 Tab Corp Holdings Ltd. (Entertainment & Leisure) 221,509
------------
2,146,683
-----------------------------------------------------------------------------
Austria - 2.1%
13,600 Austria Tabakwerke AG (Tobacco) 1,049,875
5,350 Austrian Airlines (Airlines) 185,489
83,850 Bank Austria AG (Banking) 3,717,343
11,050 Bbag Oest Brau Beteiligungs (Food & Beverages) 562,737
3,800 EVN Energie Versorgung Neideroesterreich AG (Utility) 547,732
7,300 Flughafen Wien AG (Business Services) 327,782
10,822 Rhi AG (Manufacturing-Miscellaneous) 242,963
64,100 Va Stahl AG (Steel) 1,881,392
------------
8,515,313
-----------------------------------------------------------------------------
Britain - 18.6%
32,300 Abbey National (Insurance) 636,810
97,829 Allied Domecq PLC (Food & Beverages) 755,077
173,100 Allied Zurich (Insurance Services) 2,672,088
237,700 Arjo Wiggins Appleton PLC (Paper & Forest Products) 395,095
77,400 Bank of Scotland (Banking) 982,078
27,600 Barclays Bank (Banking) 607,737
279,671 BG (Gas Distribution & Pipeline) 1,735,160
262,470 Billiton PLC (Metals-Diversified) 501,059
39,200 Boc Group, Inc. (Chemical Products) 536,639
232,100 British Aerospace PLC (Aerospace/ Defense) 1,762,778
72,300 British Airways PLC (Airlines) 421,204
170,000 British American Tobacco (Tobacco) 1,761,146
39,900 British Energy PLC (Utility) 453,078
194,100 British Petroleum (Oil & Gas) 2,644,884
494,000 British Telecom (Telecommunications) 7,585,066
161,483 Cable & Wireless (Telecommunications) 2,341,281
141,900 Compass Group (Food & Beverages) 1,856,523
36,590 Daily Mail & General Trust (Publishing) 1,806,485
88,300 General Electric Co. (Electronics & Other Electrical
Equipment) 821,758
213,980 Glaxo Wellcome PLC (Pharmaceuticals) 7,208,449
73,400 Halifax PLC (Banking) 873,344
74,300 Hanson PLC (Building Materials) 485,434
134,000 HSBC Holdings PLC (HKD 10) (Banking) 3,398,273
85,300 HSBC Holdings PLC (GBP 75) (Banking) 2,333,086
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Britain - (continued)
56,050 J. Sainsbury PLC (Supermarkets) $ 396,638
160,500 Kingfisher Group (Retail) 1,638,957
145,500 Lex Service PLC (Retail) 878,779
33,500 Lloyds TSB Group PLC (Banking) 436,637
101,900 Lonrho (Mining) 570,169
146,300 National Power (Electrical Services) 1,150,861
256,500 Norwich Union PLC (Insurance Services) 1,973,421
154,858 P & O Finance BV (Shipping) 1,692,203
78,900 Pearson (Publishing) 1,749,022
37,762 Provident Financial (Financial Services) 570,491
52,900 Railtrack Group PLC (Transportation-Rail) 1,345,039
435,077 Rolls Royce (Aerospace/Defense) 1,775,696
154,925 Royal Bank of Scotland Group (Banking) 2,756,119
60,700 RTZ Corp. (Mining) 728,227
219,800 Safeway (Retail) 994,744
98,500 Slough Estates (Real Estate) 478,199
69,300 Smith Group (Business Services) 680,861
229,800 Smithkline Beecham (Health & Medical Services) 3,097,310
40,600 Standard Chartered (Banking) 551,227
372,700 Tarmac (Building Materials) 650,154
39,208 Thames Water (Water Supply and Other Sanitary
Services) 687,187
137,442 Tomkins PLC (Diversified) 497,614
144,418 Unilever NV (Consumer Products) 1,431,954
57,700 United Utility (Business Services) 745,412
49,500 Utd Assurance Group (Insurance Services) 476,554
52,800 Zeneca Group (Health & Medical Services) 2,424,314
------------
74,952,321
---------------------------------------------------------------------------
Finland - 5.5%
12,100 Asko AS (Multi) 180,186
131,110 Enso OY (Forest Products) 1,180,391
105,400 Finnair (Airlines) 542,755
4,200 Huhtamaki OY (Food & Beverages) 156,599
8,300 Kesko (Retail) 117,938
131,600 Merita PLC (Banking) 845,219
160,850 Metsa Serla OY (Forest Products) 1,115,362
112,850 Nokia AB OY Series A (Telecommunications Equipment) 16,484,266
2,000 Nokia AB OY Series K (Telecommunications Equipment) 286,461
15,750 Pohjola Group Insurance Corp. (Insurance Services) 912,199
18,250 UPM Kymmene OY (Paper & Forest Products) 477,151
------------
22,298,527
---------------------------------------------------------------------------
France - 10.1%
7,250 Alcatel Alsthom (Computers/Office) 845,571
11,000 Accor (Recreational Services) 2,250,765
29,850 Assurances Generales de France (Insurance Services) 1,750,890
</TABLE>
The accompanying notes are an integral part of these financial statements.
39
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Statement of Investments (continued)
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
France - (continued)
33,000 Axa (Insurance) $ 4,794,129
25,180 Banque National de Paris (Banking) 2,288,438
23,600 Casino Guich Perr (Retail) 2,293,734
5,800 Christian Dior (Textiles) 755,575
10,700 Elf Aquitaine (Oil & Gas) 1,160,372
13,800 Erid Beghin Say (Consumer Products) 2,274,637
71,800 France Telecom (Telecommunications) 6,766,185
10,850 GTM Entrepose (Building Materials & Construction) 1,057,001
2,500 Havas Advertising (Business Services) 412,072
4,005 Labinal (Aerospace/Defense) 837,694
11,300 Pechiney (Miscellaneous Manufacturer) 385,358
44,400 Renault Regie Nationale (Auto/Vehicle) 2,473,113
1,900 Saint Gobain (Building Products) 266,090
900 Sefimeg (Recreational Services) 62,408
18,100 Suez Lyonnaise Eaux (Financial Services) 3,732,336
39,100 Thomson PLC (Aerospace/Defense) 1,577,866
15,850 Vivendi (Business Services) 4,637,701
------------
40,621,935
---------------------------------------------------------------------------
Germany - 7.0%
1,900 Allianz AG Holdings (Insurance) 697,623
71,550 BASF AG (Chemical Products) 2,643,370
63,700 Commerzbank AG (Banking) 1,904,408
5,400 Continental AG (Tires & Rubber) 145,481
68,065 Daimler Chrysler AG (Auto/Vehicle) 7,095,093
64,850 Deutsche Telekom AG (Telecommunications) 2,948,729
12,350 Fag Kugelfischer (Industrial Machinery) 91,253
38,375 Hoechst AG (Pharmaceuticals) 1,648,941
101,600 Lufthansa AG (Airlines) 2,142,410
4,850 Man AG (Industrial Machinery) 1,309,394
69,400 Merck KGAA (Pharmaceuticals) 2,548,161
4,200 Rheinmetall AG (Machinery) 76,151
24,975 Siemens AG (Electronics) 1,775,815
3,750 Thyssen AG (Miscellaneous Manufacturer) 635,159
29,500 Veba AG (Utility) 1,757,188
9,150 Volkswagen AG (Auto/Vehicle) 718,727
------------
28,137,903
---------------------------------------------------------------------------
Hong Kong - 4.4%
1,121,000 Amoy Properties (Real Estate) 719,721
235,200 Bank of East Asia (Banking) 335,402
347,000 Cathay Pacific Air (Transportation/ Storage) 338,098
40,000 Cheung Kong Holdings Ltd. (Real Estate) 277,462
542,500 CLP Holdings Ltd. (Utility) 2,464,382
194,500 Dao Heng Bank Group (Banking) 479,423
---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Hong Kong - (continued)
625,000 Elec & Eltek International (Semiconductors &
Electronics) $ 117,760
396,000 First Pacific Co. (Multi) 249,135
266,000 Guoco Group (Financial Services) 411,935
46,500 Hang Seng Bank (Banking) 388,560
193,000 Henderson Land Development Co. (Real Estate) 839,369
662,000 Hong Kong & China Gas Co. (Utility) 768,893
324,500 Hong Kong Electric (Utility) 950,618
1,930,400 Hong Kong Telecom (Telecommunications) 3,126,487
388,000 Hutchison Whampoa (Diversified) 2,753,975
344,900 Jardine Matheson ADR (Financial Services) 917,435
85,000 Kerry Properties (Real Estate) 53,476
392,000 Kumagai Gumi (Building Materials) 135,324
132,000 National Mutual Asia (Insurance Services) 98,802
1,678,000 Sino Land Co. (Real Estate) 817,475
45,000 Sun Hung Kai Properties Co. (Real Estate) 296,175
299,500 Swire Pacific Ltd. (Diversified) 1,279,353
------------
17,819,260
----------------------------------------------------------------------------
Italy - 3.4%
356,500 Banca Commercial Italiana (Banking) 2,269,407
94,300 Fiat SpA (Auto/Vehicle) 304,435
323,200 Instituto National Assicurazioni (Insurance
Services) 778,883
85,350 Istit Fin Ind (Conglomerates) 1,241,877
204,900 Magneti Marelli (Industrial Machinery) 319,100
1,410,300 Montedison SpA (Chemical Products) 1,434,827
42,100 RAS (Insurance Services) 492,929
78,000 Rolo Banca 1473 (Banking) 2,021,596
292,125 Telecom Italia SpA (Telecommunications) 2,736,282
3,211,500 Unione Immobiliare (Real Estate Investment
Management) 1,931,206
------------
13,530,542
----------------------------------------------------------------------------
Japan - 21.1%
7,000 Acom Co. (Financial Services) 421,189
18,000 Alps Electric Co. (Electronics & Other Electrical
Equipment) 335,934
297,000 Bank of Tokyo Mitsubishi (Banking) 3,538,244
94,000 Canon, Inc. (Computers/Office) 2,037,929
41,000 Canon Sales Co., Inc. (Computers/Office) 593,767
32,000 Chugoku Electric Power Co. (Utility) 540,666
74,000 Chuo Trust & Bank (Financial Services) 369,346
94,000 Daicel Chemical Industries (Chemical Products) 267,402
72,000 Daiichi Pharmaceutical Co. (Health/ Personal Care) 1,112,228
----------------------------------------------------------------------------
</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>
Common Stocks - (continued)
Japan - (continued)
106 East Japan Railway (Railroads) $ 652,420
154,000 Fuji Bank (Banking) 649,162
386,000 Fuji Heavy Industries Ltd. (Automobiles & Automobile
Parts) 2,176,147
167,000 Fujitsu Ltd. (Computers/Office) 2,192,500
177,000 Hino Motors (Industrial Machinery) 599,638
476,000 Hitachi (Electronics & Other Electrical Equipment) 3,426,231
51,000 Honda Motor Co. Ltd. (Auto/Vehicle) 1,899,228
592,000 Ishikawajima Har (Industrial Machinery) 1,041,059
167,000 Izumiya Co. (Retail) 1,783,656
73,000 Kirin Brewery Ltd. (Alcohol) 886,660
38,900 Kokusai Den Kdd (Telecommunications) 1,341,321
425,000 Konica Corporation (Recreation/Consumer Goods) 1,967,372
28,000 Kyocera Corp. (Electronics) 1,494,073
172,000 Kyowa Hakko Kogyo (Health & Medical Services) 892,582
81,600 Kyushu Electric Power Co., Inc. (Utility) 1,347,045
120,000 Lion Corp. (Health & Medical Services) 496,530
651,000 Marubeni Corp. (Wholesale) 1,116,754
108,000 Matsushita Electric Industrial Co. (Electronics &
Other Electrical Equipment) 1,839,645
102,000 Mitsubishi Electric (Electronics) 364,898
702,000 Mitsubishi Heavy Industries Ltd. (Industrial
Machinery) 2,850,239
19,000 Mitsubishi Real Estate (Recreational Services) 177,053
229,000 Mitsubishi Trust & Banking (Banking) 1,859,558
154,000 Mitsui Co. (Trading/Wholesale) 925,288
280,000 Mitsui Osk Lines (Transportation/Storage) 446,532
210,000 Mitsui Petrochemical Industries (Oil & Gas Services) 798,328
50,000 Mitsui Soko Co. (Transportation/Storage) 184,475
59,000 Mycal Corp. (Retail) 368,734
8,000 Nichiei Co. (Financial Services) 557,907
1,900 Nintendo Company Ltd. (Entertainment & Leisure) 176,889
349,000 Nippon Express Co. (Transportation) 1,808,103
605,000 Nippon Oil Co. Ltd. (Oil & Gas) 1,971,380
41,000 Nippon Paper Industries (Paper & Forest Products) 169,648
443 Nippon Telephone & Telegraph Corp. (Telecommunications) 3,582,035
97,000 Nishimatsu Construction (Construction) 505,883
263,000 Nissan Motor Co. (Auto/Vehicle) 952,200
735,000 NKK Corp. (Steel) 437,179
17 NTT Mobile Communications* (Telecommunications) 718,072
29,100 Orix Corp. (Financial Services) 1,989,250
197,000 Sakura Bank (Banking) 482,290
47,000 Sankyo Company Ltd. (Pharmaceuticals) 984,526
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Japan - (continued)
578,000 Sanyo Electric Co. Ltd. (Electronics & Other
Electrical Equipment) $ 1,773,786
232,000 Sekisui House (Building Materials & Construction) 2,335,899
36,000 Shikoku Electric Power (Electrical Services) 605,146
174,000 Shionogi & Co. (Health & Medical Services) 1,274,945
544,000 Snow Brand Milk (Food & Beverages) 2,527,615
15,200 Sony Corp. (Electronics & Other Electrical Equipment) 1,107,194
173,000 Sumitomo Bank (Banking) 2,169,863
442,000 Sumitomo Osaka Cement (Building Materials) 861,101
557,000 Taiheiyo Cement (Building Materials) 1,320,417
24,000 Takeda Chemical Industries (Pharmaceuticals) 858,584
52,000 Tokyo Electric Power (Electrical Services) 1,131,848
203,000 Toppan Printing Co. (Business Services) 2,385,147
37,000 Toyo Seikan Kaisha (Containers-Metal and Glass) 701,694
211,000 Toyota Motor Corp. (Auto/Vehicle) 5,565,794
307 West Japan Railway (Transportation/ Rail) 1,349,683
308,000 Yasuda Fire & Marine Insurance (Insurance) 1,571,794
------------
84,869,705
-----------------------------------------------------------------------------
Netherlands - 0.1%
1,875 ASR Verzekeringsgr (Insurance) 159,003
1,000 ING Groep NV* (Financial Services) 58,315
------------
217,318
-----------------------------------------------------------------------------
Norway - 0.4%
381,514 Christiania Bank OG (Banking) 1,674,130
-----------------------------------------------------------------------------
Portugal - 0.6%
19,700 Banco Port Atlan (Banking) 376,219
19,140 Banco Totta E Acores (Banking) 424,269
71,400 Electricidade de Portugal SA (Utility) 1,745,025
------------
2,545,513
-----------------------------------------------------------------------------
Singapore - 4.1%
556,000 Acma Ltd. (Retail) 238,239
491,000 City Developments (Real Estate) 2,002,305
308,000 Dairy Farm International ADR (Retail) 320,320
959,000 DBS Land (Real Estate) 1,297,937
119,000 Development Bank of Singapore (Banking) 914,303
92,000 Fraser & Neave (Beverages/Tobacco) 320,804
760,000 Hong Kong Land Holdings ADR (Real Estate) 866,400
439,000 Hotel Properties (Hotels & Restaurants) 188,106
91,000 Keppel Land (Real Estate) 93,582
381,000 Marco Polo Development Ltd. (Hotels & Restaurants) 389,557
-----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
41
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Statement of Investments (continued)
January 31, 1999
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Singapore - (continued)
220,000 National Steel Ltd. (Steel) $ 244,444
138,500 Overseas Chinese Banking Corp--Alien Market
(Banking) 949,527
249,000 Overseas Union Bank--Foreign (Banking) 927,128
13,000 Rothmans Industries (Beverage/Tobacco) 82,210
137,400 Singapore Airlines Ltd. (Airlines) 933,865
63,000 Singapore Land (Real Estate) 128,085
139,500 Singapore Press Holdings Ltd. (Media &
Communications) 1,582,979
2,303,300 Singapore Telecommunications (Telecommunications) 3,226,254
363,300 United Engineers (Construction) 244,777
332,000 United Industrial Corp. (Real Estate) 135,390
167,000 United Overseas Bank (Banking) 996,868
52,000 Venture Manufacturing (Electronics) 225,887
------------
16,308,967
---------------------------------------------------------------------------
Spain - 8.5%
81,300 Argentaria Corp Bancaria de Espana (Banking) 2,084,945
23,900 Banco Bilbao Vizcaya SA (Banking) 358,078
28,000 Banco Popular Espanol (Banking) 2,005,227
60,000 Dragados Y Construcciones (Construction) 2,229,621
207,400 Endesa SA (Electrical Services) 5,773,810
228,625 Iberdrola SA (Utility) 3,991,902
8,400 Petroleos Cia Esp (Oil & Gas) 311,288
76,150 Repsol SA (Oil & Gas Services) 4,133,407
226,829 Telefonica de Espana SA (Telecommunications) 10,378,375
156,300 Union Electric Fenosa (Electrical Services) 2,697,091
------------
33,963,744
---------------------------------------------------------------------------
Sweden - 3.0%
59,400 Electrolux AB (Appliance Manufacturer) 922,727
74,000 Ericsson Telecommunications (Telecommunications
Equipment) 2,004,545
6,600 Esselte (Business Services) 109,304
74,600 Gambro (Medical Products and Supplies) 723,082
298,600 Nordbanken Holding AB (Banking) 2,070,070
93,900 Skand Enskilda Banken (Banking) 1,103,032
60,350 Svenska Handelsbanken (Banking) 2,401,820
9,400 Trelleborg AB (Diversified Manufacturing) 88,699
91,207 Volvo AB (Auto/Vehicle) 2,488,219
------------
11,911,498
---------------------------------------------------------------------------
Switzerland - 8.4%
1,600 Baloise Holdings (Insurance) 1,503,568
1,100 Danzas Holding AG (Business Services) 453,897
6,334 George Fischer AG (Industrial Machinery) 2,007,206
1,890 Holderbank Financiere Glarus AG (Construction) 1,983,078
---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C> <C>
Common Stocks - (continued)
Switzerland - (contin-
ued)
1,848 Jelmoli Holdings AG
(Retail) $ 1,756,207
120 Movenpick Holdings
(Leisure) 67,830
974 Nestle SA (Food &
Beverages) 1,785,862
3,920 Novartis AG Regular
Shares (Pharmaceuticals) 7,356,405
605 Novartis AG Bearer Shares
(Pharmaceuticals) 1,137,928
40 Pargesa Holdings SA
(Financial Services) 56,808
636 Roche Holdings AG
(Health/Personal Care) 8,308,938
2,963 SAirGroup (Airlines) 632,252
72 Schindler Holdings AG
(Industrial Machinery) 126,673
1,685 Schw Ruckversicher
(Insurance Services) 4,189,582
258 UBS AG (Banking) 83,673
3,365 Zurich Allied AG
(Insurance) 2,489,334
------------
33,939,241
--------------------------------------------------
TOTAL COMMON STOCKS
(Cost $371,539,902) $393,452,600
--------------------------------------------------
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
<C> <S> <C> <C>
Short-Term Obligations - 1.7%
FHLMC Discount Note
500,000 4.79% 03/04/99 $ 497,938
State Street Bank & Trust Time Deposit
6,505,000 4.68% 02/01/99 6,505,000
--------------------------------------------------
TOTAL SHORT-TERM OBLIGATIONS
(Cost $7,002,938) $ 7,002,938
--------------------------------------------------
TOTAL INVESTMENTS
(Cost $378,542,840)(a) $400,455,538
--------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Federal Income Tax
Information:
Gross unrealized
gain for
investments in
which value
exceeds cost $ 36,588,864
Gross unrealized
loss for
investments in
which cost
exceeds value (16,446,197)
------------------------------------
Net unrealized
gain $ 20,142,667
------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
42
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Futures contracts open at January 31, 1999 are as follows:
<TABLE>
<CAPTION>
Number of
Contracts Settlement Unrealized
Type Long(b) Multiplier Month Gain (Loss)
------------------------------------------------------------------
<S> <C> <C> <C> <C>
FTSE 100 Index 18 GBP10 3/99 $(17,152)
All Ordinaries Index 8 AUD25 3/99 2,297
CAC-40-10EU Index 14 EUR10 3/99 17,585
IBEX 35 Index 4 EUR10 2/99 1,089
Hang Seng Index 5 HKD50 2/99 (12,909)
TOPIX Index 25 JPY10,000 3/99 35,146
MIB 30 Index 2 ITL10,000 3/99 (915)
DAX Index 7 EUR25 3/99 11,867
--------
$ 37,008
------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) The aggregate cost for federal income tax purposes is $380,312,871.
(b) Each index future utilizes a multiplier for each contract with the index
value at time of purchase in notional par value. The total net notional
amount and market value at risk are $7,401,325 and $7,438,333, respec-
tively. The determination of notional amounts does not consider market
risk factors and therefore notional amounts presented here are indicative
only of volume of activity and not a measure of market risk.
<TABLE>
<CAPTION>
Percentage of
Total Net Assets
Common Stock Industry Classifications
<S> <C>
Aerospace/Defense 1.5%
Airlines 1.2
Alcohol 0.2
Appliance Manufacturer 0.2
Auto/Vehicle 5.8
Banking 12.9
Beverages/Tobacco 0.1
Broadcast Media 0.1
Building Materials & Construction 1.7
Business Services 2.4
Chemical Products 1.2
Computers/Office 1.4
Conglomerates 0.3
Construction 1.5
Consumer Products 0.9
Containers--Metal and Glass 0.2
Diversified 1.1
Diversified Manufacturing 0.0
Electrical Services 2.8
Electronics & Other Electrical Equipment 3.3
Entertainment & Leisure 0.1
Financial Services 2.3
Food & Beverages 2.0
Forest Products 0.6
Gas Distribution & Pipeline 0.4
Health & Medical Services 4.3
Hotels & Restaurants 0.1
Industrial Machinery 2.1
Insurance Services 6.2
Leisure 0.0
</TABLE>
<TABLE>
<CAPTION>
Percentage of
Total Net Assets
Common Stock Industry Classifications - (continued)
<S> <C>
Machinery 0.0%
Manufacturing--Miscellaneous 0.1
Media & Communications 0.4
Medical Products and Supplies 0.2
Metals--Diversified 0.1
Mining 0.3
Miscellaneous Manufacturer 0.3
Multi 0.1
Oil & Gas Services 2.7
Paper & Forest Products 0.3
Pharmaceuticals 5.5
Publishing 0.9
Railroads 0.2
Real Estate 2.0
Real Estate Investment Management 0.5
Recreation/Consumer Goods 0.5
Recreational Services 0.6
Retail 2.6
Semiconductors & Electronics 0.0
Shipping 0.4
Steel 0.6
Supermarkets 0.1
Telecommunications 11.2
Telecommunications Equipment 4.8
Textiles 0.2
Tires & Rubber 0.0
Tobacco 0.7
Trading/Wholesale 0.2
Transportation 1.3
Utility 3.6
Water Supply and Other Sanitary Services 0.2
Wholesale 0.3
-----------------------------------------------------------
TOTAL COMMON STOCK 97.8%
-----------------------------------------------------------
</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.
43
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Statements of Assets and Liabilities
January 31, 1999
<TABLE>
<CAPTION>
Goldman Sachs
CORE U.S.
Equity Fund
Assets:
<S> <C>
Investment in securities, at value (identified cost
$773,218,849, $492,723,474, $129,431,286, $60,551,157 and
$378,542,840, respectively) $1,098,830,017
Cash 82,876
Receivables:
Investment securities sold --
Dividends and interest 745,721
Fund shares sold 5,754,546
Variation margin 356,431
Reimbursement from investment adviser 98,263
Other assets 60,263
-----------------------------------------------------------------------------
Total assets 1,105,928,117
-----------------------------------------------------------------------------
Liabilities:
Due to Bank --
Payables:
Investment securities purchased --
Fund shares repurchased 1,079,037
Amounts owed to affiliates 1,086,372
Variation margin --
Accrued expenses and other liabilities 137,919
-----------------------------------------------------------------------------
Total liabilities 2,303,328
-----------------------------------------------------------------------------
Net Assets:
Paid-in capital 766,173,617
Accumulated undistributed (distributions in excess of) net
investment income --
Accumulated net realized gain (loss) on investment, futures
and foreign currency transactions 11,108,394
Net unrealized gain (loss) on investments, futures and
translation of assets and liabilities denominated in foreign
currencies 326,342,778
-----------------------------------------------------------------------------
NET ASSETS $1,103,624,789
-----------------------------------------------------------------------------
Net asset value, offering and redemption price per share:(a)
Class A $32.98
Class B $32.50
Class C $32.40
Institutional $33.29
Service $32.85
-----------------------------------------------------------------------------
Shares outstanding:
Class A 18,359,982
Class B 4,687,864
Class C 830,687
Institutional 9,228,681
Service 353,120
-----------------------------------------------------------------------------
Total shares outstanding, $.001 par value (unlimited number
of shares authorized) 33,460,334
-----------------------------------------------------------------------------
</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 $34.90, $17.11, $10.75, $10.74 and $10.56, respectively. At redemp-
tion, Class B and Class C shares may be subject to a contingent sales
charge, assessed on the amount equal to the lesser of the current net as-
set value or the original purchase price of the shares.
The accompanying notes are an integral part of these financial statements.
44
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
Goldman Sachs Goldman Sachs Goldman Sachs Goldman Sachs
CORE Large Cap CORE Small Cap CORE Large Cap CORE International
Growth Fund Equity Fund Value Fund Equity Fund
<S> <C> <C> <C>
$ 600,049,090 $148,267,167 $60,440,586 $400,455,538
3,015 34,099 -- 174,294
3,830,372 1,085,241 -- --
231,439 58,208 27,560 379,021
-- 293,806 300,195 1,762,945
259,588 20,018 993 --
224,331 252,020 137,091 255,412
39,222 37,103 454 195,757
--------------------------------------------------------------------------------
604,637,057 150,047,662 60,906,879 403,222,967
--------------------------------------------------------------------------------
-- -- 58,146 --
-- 744,241 -- --
282,004 166,172 28,071 319,537
451,519 158,385 14,222 387,992
-- -- -- 20,194
204,732 110,211 135,923 261,680
--------------------------------------------------------------------------------
938,255 1,179,009 236,362 989,403
--------------------------------------------------------------------------------
513,507,470 149,429,512 60,775,637 389,211,161
(158,558) (61,646) 37,422 (153,510)
(17,445,815) (19,314,794) (32,964) (8,772,493)
107,795,705 18,815,581 (109,578) 21,948,406
--------------------------------------------------------------------------------
$ 603,698,802 $148,868,653 $60,670,517 $402,233,564
--------------------------------------------------------------------------------
$16.17 $10.16 $10.15 $9.98
$15.98 $10.07 $10.15 $9.95
$15.99 $10.08 $10.15 $9.96
$16.21 $10.20 $10.16 $10.06
$16.11 $10.16 $10.16 $10.02
--------------------------------------------------------------------------------
10,855,306 6,305,945 656,325 11,053,406
5,862,727 1,529,888 33,500 743,573
2,319,627 650,443 26,441 375,620
18,242,633 6,150,352 5,256,829 27,897,671
103,240 5,350 160 2,165
--------------------------------------------------------------------------------
37,383,533 14,641,978 5,973,255 40,072,435
--------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Statements of Operations
For the Year Ended January 31, 1999
<TABLE>
<CAPTION>
Goldman Sachs
CORE U.S.
Equity Fund
<S> <C> <C> <C> <C>
Investment income:
Dividends(b) $ 11,451,637
Interest 827,363
-------------------------------------------------------------------------------
Total income 12,279,000
-------------------------------------------------------------------------------
Expenses:
Management fees 6,647,941
Distribution & service fees(c) 3,111,494
Custodian fees 177,112
Transfer agent fees 1,076,031
Registration fees 144,105
Professional fees 83,204
Trustee fees 6,984
Service share fees 49,461
Other 123,042
-------------------------------------------------------------------------------
Total expenses 11,419,374
-------------------------------------------------------------------------------
Less -- expenses reimbursed and fees waived by
Goldman Sachs (1,177,130)
-------------------------------------------------------------------------------
Net expenses 10,242,244
-------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 2,036,756
-------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment, futures and currency
transactions:
Net realized gain (loss) from:
Investment transactions 28,128,478
Futures transactions (649,916)
Foreign currency related transactions --
Net change in unrealized gain (loss) on:
Investments 175,773,451
Futures 648,974
Translation of assets and liabilities denominated
in foreign currencies --
-------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investment, futures, and foreign currency
transactions 203,900,987
-------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $205,937,743
-------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations December 31, 1998.
(b) For the CORE U.S. Equity Fund, CORE Large Cap Growth Fund and CORE Inter-
national Equity Fund taxes withheld on dividends were $76,587, $3,992 and
$450,810, respectively.
(c) Class A, Class B and Class C of the following funds had distribution and
services fees of:
Goldman Sachs CORE U.S. Equity Fund -- $1,963,368, $995,389 and $152,737,
respectively.
Goldman Sachs CORE Large Cap Growth Fund -- 405,481, 449,058 and 156,368,
respectively.
Goldman Sachs CORE Small Cap Equity Fund -- 102,281, 140,016 and 44,551,
respectively.
Goldman Sachs CORE Large Cap Value Fund -- 579, 122 and 82, respectively.
Goldman Sachs CORE International Equity Fund -- 208,905, 54,688 and 27,157,
respectively.
The accompanying notes are an integral part of these financial statements.
46
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
Goldman Sachs Goldman Sachs Goldman Sachs Goldman Sachs
CORE Large Cap CORE Small Cap CORE Large Cap CORE International
Growth Fund Equity Fund Value Fund(a) Equity Fund
<S> <C> <C> <C>
$ 2,053,010 $ 1,040,297 $ 30,857 $ 3,302,032
733,718 292,376 20,869 696,313
--------------------------------------------------------------------------------
2,786,728 1,332,673 51,726 3,998,345
--------------------------------------------------------------------------------
2,072,619 769,013 12,245 1,890,475
1,010,907 286,848 783 290,750
118,101 113,289 15,518 533,938
394,222 268,859 1,194 288,494
184,435 120,585 69,300 111,780
63,789 73,032 25,567 68,985
8,044 7,491 -- 7,429
2,992 74 -- 52
108,953 100,901 26,788 84,171
--------------------------------------------------------------------------------
3,964,062 1,740,092 151,395 3,276,074
--------------------------------------------------------------------------------
(1,161,690) (580,689) (137,091) (685,081)
--------------------------------------------------------------------------------
2,802,372 1,159,403 14,304 2,590,993
--------------------------------------------------------------------------------
(15,644) 173,270 37,422 1,407,352
--------------------------------------------------------------------------------
(14,071,031) (16,176,071) -- (16,186,227)
(2,852,808) (2,751,353) (32,964) 643,844
-- -- -- 6,955,966
102,315,384 18,073,332 (110,571) 21,787,722
461,047 (20,694) 993 37,008
-- -- -- 23,568
--------------------------------------------------------------------------------
85,852,592 (874,786) (142,542) 13,261,881
--------------------------------------------------------------------------------
$ 85,836,948 $ (701,516) $(105,120) $ 14,669,233
--------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Statements of Changes in Net Assets
For the Year Ended January 31, 1999
<TABLE>
<CAPTION>
Goldman Sachs
CORE U.S.
Equity Fund
<S> <C>
From operations:
Net investment income (loss) $ 2,036,756
Net realized gain (loss) on investment, futures and foreign
currency transactions 27,478,562
Net change in unrealized gain (loss) on investments, futures
and foreign currency 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 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 of operations December /31/, /1998/.
The accompanying notes are an integral part of these financial statements.
48
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
Goldman Sachs Goldman Sachs Goldman Sachs Goldman Sachs
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
Statements of Changes in Net Assets
For the Period Ended January 31, 1998
<TABLE>
<CAPTION>
Goldman Sachs
CORE U.S.
Equity Fund
<S> <C>
From operations:
Net investment income (loss) $ 3,590,909
Net realized gain (loss) on investment, futures and foreign
currency related transactions 51,660,805
Net change in unrealized gain on investments, futures and
translation of assets and liabilities denominated in
foreign currencies 58,735,381
-----------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 113,987,095
-----------------------------------------------------------------------------
Distributions to shareholders:
From net investment income
Class A shares (1,575,637)
Class B shares --
Class C shares --
Institutional shares (1,709,339)
Service shares (33,980)
In excess of net investment income
Class A shares (51,278)
Class B shares (119,427)
Class C shares (23,315)
Institutional shares --
Service shares (2,900)
From net realized gain on investment, foreign currency and
futures transactions
Class A shares (30,719,012)
Class B shares (4,237,947)
Class C shares (358,883)
Institutional shares (15,675,265)
Service shares (556,742)
-----------------------------------------------------------------------------
Total distributions to shareholders (55,063,725)
-----------------------------------------------------------------------------
From share transactions:
Net proceeds from sales of shares 265,252,943
Reinvestment of dividends and distributions 52,659,270
Cost of shares repurchased (98,067,148)
-----------------------------------------------------------------------------
Net increase in net assets resulting from share transactions 219,845,065
-----------------------------------------------------------------------------
TOTAL INCREASE 278,768,435
-----------------------------------------------------------------------------
Net assets:
Beginning of period 395,833,695
-----------------------------------------------------------------------------
End of period $674,602,130
-----------------------------------------------------------------------------
Accumulated undistributed (distributions in excess of) net
investment income $ 75,033
-----------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations for the CORE Large Cap Growth, CORE Small Cap
Equity and CORE International Equity Funds were May 1, 1997, August 15,
1997 and August 15, 1997, respectively.
The accompanying notes are an integral part of these financial statements.
50
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
Goldman Sachs Goldman Sachs Goldman Sachs
CORE Large Cap CORE Small Cap CORE International
Growth Fund(a) Equity Fund(a) Equity Fund(a)
<S> <C> <C>
$ (10,741) $ (39,085) $ 15,364
1,346,393 (276,521) (689,695)
5,019,274 762,943 100,108
--------------------------------------------------------------------------------------
6,354,926 447,337 (574,223)
--------------------------------------------------------------------------------------
(10,499) -- --
-- -- --
-- -- --
(3) -- (13,900)
-- -- --
-- -- (1,401)
-- -- --
(461) -- --
-- -- --
(2) -- --
(1,392,427) (37,526) --
(359,671) (34,574) --
(84,478) (7,527) --
(79) (29,872) --
(3,578) (7) --
--------------------------------------------------------------------------------------
(1,851,198) (109,506) (15,301)
--------------------------------------------------------------------------------------
79,057,752 32,949,538 30,283,218
1,734,068 94,459 15,251
(8,749,395) (721,453) (573,438)
--------------------------------------------------------------------------------------
72,042,425 32,322,544 29,725,031
--------------------------------------------------------------------------------------
76,546,153 32,660,375 29,135,507
--------------------------------------------------------------------------------------
-- -- --
--------------------------------------------------------------------------------------
$76,546,153 $32,660,375 $29,135,507
--------------------------------------------------------------------------------------
(16,664) $ (35,674) $ (11,740)
--------------------------------------------------------------------------------------
</TABLE>
51
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements
January 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 and
the CORE International Equity Fund, collectively the "Funds" or individually
a "Fund". At January 31, 1999, each Fund offered 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. Certain
reclassifications have been made to the prior period amounts to conform with
the current period presentation. Such reclassifications have no effect as
previously reported net asset values of the Funds.
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 mean between the closing bid and
asked prices. Debt securities are valued at prices supplied by an independent
pricing services, which reflect broker / dealer-supplied valuations or matrix
pricing systems. Unlisted equity and debt securities for which market quota-
tions are available are valued at the last sale price on valuation date, or
if no sale occurs, at the mean between the most recent bid and asked prices.
Short-term debt obligations maturing in sixty days or less are valued at am-
ortized cost. Restricted securities, and other securities for which quota-
tions 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. It is
the Funds' policy, where necessary, to accrue for estimated capital gains
taxes in foreign securities.
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.
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 forwards
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
52
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Fund realizes gains or losses at the time a forward contract is offset by en-
try 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. 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 as well as timing
differences associated with having different book and tax year ends.
CORE Small Cap Equity, CORE Large Cap Growth and CORE International Equity
Funds had approximately $19,364,000, $18,495,000 and $14,803,548, respec-
tively at October 31, 1998 (the Fund's tax year end) of capital loss
carryforward expiring in 2006 for Federal tax purposes. These amounts are
available to be carried forward to offset future capital gains to the extent
permitted by applicable law or regulations.
F. 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 for their services with respect to such shares. Effective September
1, 1998, each class of shares of the Funds separately bears its respective
class-specific transfer agency fees.
G. 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.
H. Futures Contracts -- The Funds may enter into futures transactions to
hedge against changes in interest rates, securities prices, currency exchange
rates or to seek to increase total return.
Upon entering into a futures contract, the Funds are required to deposit
with a broker an amount of cash or securities equal to the minimum "initial
margin" requirement of the associated futures exchange. Subsequent payments
for futures
53
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
January 31, 1999
contracts ("variation margin") are paid or received by the Funds, depending
on the fluctuations in the value of the contracts, and are recorded for fi-
nancial 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 Operations.
The use of futures contracts involve, to varying degrees, elements of mar-
ket and counterparty risk which may exceed the amounts recognized in the
Statements of Assets and Liabilities. Changes in the value of the futures
contract may not directly correlate with changes in the value of the under-
lying securities. This risk may decrease the effectiveness of the Funds'
strategies and potentially result in a loss.
3. AGREEMENTS
Pursuant to the 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 for
CORE Large Cap Growth, CORE Small Cap Equity, CORE Large Cap Value and CORE
International Equity Fund and Goldman Sachs Funds Management, L.P. ("GSFM"),
an affiliate of Goldman Sachs, serves as the investment adviser for 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 the CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap Equity, CORE
Large Cap Value and CORE International Equity Funds, respectively.
Each adviser had voluntarily agreed to limit certain "Other Expenses" for
the CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap Equity and CORE
International Equity Funds (excluding management fees, distribution and
service fees, transfer agent fees for CORE U.S. Equity Fund, taxes, interest,
brokerage, litigation, Service share fees, indemnification costs and extraor-
dinary expenses) through August 31, 1998, to the extent such expenses exceed,
on an annual basis, .06%, .05%, .20% and .25% of the average daily net assets
of the funds, respectively. Effective September 1, 1998 (December 31, 1998
for CORE Large Cap Value), the expense limitation for the CORE U.S. Equity,
CORE Large Cap Growth, CORE Small Cap Equity, CORE Large Cap Value and CORE
International Funds was modified to .00%, .00%, .04%, .00% and .12% (exclud-
ing management fees, distribution and service fees, transfer agent fees, tax-
es, interest, brokerage, litigation, Service share fees, indemnification
costs and other extraordinary expense).
Goldman Sachs serves as the Distributor of shares of the Funds pursuant to
a Distribution Agreement. Goldman Sachs may receive a portion of the Class A
sales load and Class B and Class C contingent deferred sales charge and has
advised the Funds that it retained approximately $517,000, $361,000,
$121,000, $1,000 and $94,000 during the year ended January 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.
Prior to September 1, 1998, the Trust, on behalf of each Fund (except for
CORE Large Cap Value which had not commenced operations), had adopted Distri-
bution Plans (the "Distribution Plans") pursuant to Rule 12b-1. Under the
Distribution Plans, Goldman Sachs was entitled to receive a quarterly fee
from each Fund for distribution services equal, on an annual basis, to .25%,
.75% and .75% of the Funds' average daily net assets attributable to Class A,
Class B and Class C shares, respectively.
Prior to September 1, 1998, the Trust, on behalf of each Fund (except for
CORE Large Cap Value which had not commenced operations), had also adopted
Authorized Dealer Service Plans (the "Dealer Service Plans") pursuant to
which Goldman Sachs and Authorized Dealers were compensated for providing
personal and account maintenance services. Each Fund paid a fee under the
Dealer Service Plan equal, on an annual basis, up to .25% of its average
daily net assets attributable to Class A, Class B and Class C shares.
54
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Effective September 1, 1998, the Distribution Plans and Dealer Service
Plans were combined into a Distribution and Service Plan. Under the Distribu-
tion and Service Plan, Goldman Sachs and/or Authorized Dealers are entitled
to a monthly fee from each Fund for distribution and shareholder maintenance
services equal, on an annual basis, to .25% (.50% on CORE International Equi-
ty), 1.00%, and 1.00% of each of the Fund's average daily net assets attrib-
utable to Class A, Class B and Class C shares, respectively.
Goldman Sachs also serves as the Transfer Agent of the Funds for a fee. Ef-
fective September 1, 1998, the fees charged for such transfer agency services
are calculated daily and payable monthly at an annual rate as follows: .19%
of the average daily net assets 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 year ended January 31, 1999, Goldman Sachs, GSAM, GSFM and the Dis-
tributor have voluntarily agreed to waive certain fees and reimburse other
expenses as follows (in thousands):
<TABLE>
<CAPTION>
Waivers
-----------------------
Distribution Total Waivers
and Service and
Fund Management Fees Reimbursement Reimbursement
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORE U.S. Equity $956 $-- $221 $1,177
------------------------------------------------------------------------------
CORE Large Cap Growth 414 135 613 1,162
------------------------------------------------------------------------------
CORE Small Cap Equity 39 21 521 581
------------------------------------------------------------------------------
CORE Large Cap Value -- -- 137 137
------------------------------------------------------------------------------
CORE International Equity 80 -- 605 685
------------------------------------------------------------------------------
</TABLE>
At January 31, 1999, the amounts owed to affiliates were as follows (in thou-
sands):
<TABLE>
<CAPTION>
Distribution
Management and Service Transfer
Fund Fees Fees Agent Fees Total
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORE U.S. Equity $618 $262 $206 $1,086
----------------------------------------------------------------------------------
CORE Large Cap Growth 264 133 55 452
----------------------------------------------------------------------------------
CORE Small Cap Equity 107 33 18 158
----------------------------------------------------------------------------------
CORE Large Cap Value 12 1 1 14
----------------------------------------------------------------------------------
CORE International Equity 298 58 32 388
----------------------------------------------------------------------------------
</TABLE>
55
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
January 31, 1999
4. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and proceeds of sales or maturities of securities (excluding short-
term investments, futures and options) for the year ended January 31, 1999,
were as follows:
<TABLE>
<CAPTION>
Sales or
Fund Purchases Maturities
----------------------------------------------------------------------------------------
<S> <C> <C>
CORE U.S. Equity $752,770,216 $553,224,260
----------------------------------------------------------------------------------------
CORE Large Cap Growth 586,593,226 169,043,346
----------------------------------------------------------------------------------------
CORE Small Cap Equity 176,054,196 64,462,158
----------------------------------------------------------------------------------------
CORE Large Cap Value 60,101,321 --
----------------------------------------------------------------------------------------
CORE International Equity 770,339,385 409,727,132
----------------------------------------------------------------------------------------
</TABLE>
For the year ended January 31, 1999, Goldman Sachs earned approximately
$284,000, $82,000, $62,000 and $130 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, respectively.
5. 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.
6. 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 January 31, 1999, the CORE U.S. Equity, CORE Large Cap Growth and CORE
Small Cap Equity Funds had undivided interests in the repurchase agreements
in the joint account which equaled $29,300,000, $21,100,000 and $3,500,000,
respectively, in principal amount. At January 31, 1999, the following repur-
chase agreements held in this joint account were fully collateralized by fed-
eral agency obligations:
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Repurchase Agreements Amount Rate Date Cost
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ABN/AMRO, Inc. $875,000,000 4.84% 02/01/99 $875,000,000
--------------------------------------------------------------------------------------
Bear Stearns & Co. 250,000,000 4.83 02/01/99 250,000,000
--------------------------------------------------------------------------------------
NationsBanc Montgomery Securities LLC 1,000,000,000 4.84 02/01/99 1,000,000,000
--------------------------------------------------------------------------------------
CS First Boston Corp. 363,500,000 4.83 02/01/99 363,500,000
--------------------------------------------------------------------------------------
TOTAL JOINT REPURCHASE AGREEMENT ACCOUNT $2,488,500,000
--------------------------------------------------------------------------------------
</TABLE>
56
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
7. LINE OF CREDIT FACILITY
The Funds (except for CORE Large Cap Value Fund) participate in a
$250,000,000 uncommitted, unsecured revolving line of credit facility. In ad-
dition, the Funds (except for CORE Large Cap Value Fund) participate in a
$50,000,000 committed, unsecured revolving line of credit facility. Both fa-
cilities are to be used solely for temporary or emergency purposes. Under the
most restrictive arrangement, the Funds must own securities having a market
value in excess of 300% of the total bank borrowings. The interest rate on
the borrowings is based on the federal funds rate. The committed facility
also requires a fee to be paid based on the amount of the commitment which
has not been utilized. During the year ended January 31, 1999, the Funds did
not have any borrowings under these facilities.
8. OTHER MATTERS AND CERTAIN RECLASSIFICATIONS
As of January 31, 1999, Goldman, Sachs & Co. Profit Sharing Master Trust was
the beneficial owner of approximately 13.9% 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
Balanced Strategy Growth and Income Growth Strategy Aggressive Growth
Fund Portfolio Strategy Portfolio Portfolio Strategy Portfolio
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORE Large Cap Growth % 11.8% 10.4% %
------------------------------------------------------------------------------------------------
CORE Small Cap Equity -- 12.4 11.2 --
------------------------------------------------------------------------------------------------
CORE Large Cap Value 5.7 31.9 33.6 13.4
------------------------------------------------------------------------------------------------
CORE International Eq-
uity 5.5 25.9 22.4 9.7
------------------------------------------------------------------------------------------------
</TABLE>
In accordance with Statement of Position 93-2, the CORE U.S. Equity Fund re-
classified $33,945 from accumulated net realized gain on investment, futures
and foreign currency transactions to paid-in capital, and $374,744 from accu-
mulated net realized gain on investment, futures and foreign currency trans-
actions to accumulated distributions in excess of net investment income. CORE
Large Cap Growth Fund reclassified $510 from accumulated distributions in ex-
cess of net investment income to accumulated net realized loss on investment,
futures and foreign currency transactions, and $271 from paid-in capital to
accumulated distributions in excess of net investment income. CORE Small Cap
Equity Fund reclassified $400 from accumulated distributions in excess of net
investment income to paid-in capital, $31 from accumulated distributions in
excess of net investment income to accumulated net realized loss on invest-
ment, futures and foreign currency transactions, and $1,374 from accumulated
net realized loss on investment, futures and foreign currency transactions to
paid-in capital. CORE International Equity Fund reclassified $489,679 from
accumulated distributions in excess of net investment income to accumulated
net realized loss on investment, futures and foreign currency transactions,
and $400 from accumulated distributions in excess of net investment income to
paid-in capital. These reclassifications have no impact on the net asset
value of each Fund and are designed to present each Fund's capital accounts
on a tax basis.
On January 1, 1999, the European Monetary Union "EMU" introduced a new sin-
gle currency, the euro, which will replace the national currencies of the
participating member countries. Until 2002, the national currencies will con-
tinue to exist, but exchange rates will be tied to the euro. The introduction
of the euro is likely to affect all stages of the investment process, includ-
ing trading, foreign exchange and accounting. Because this change to a single
currency is new, the introduction of the euro may result in market volatility
and may affect the business or financial conditions of European issuers or of
a Portfolio investing in European issuers. In addition, while the conversion
will eliminate currency risk among participating nations, currency risk be-
tween the euro and the U.S. dollar remains a factor.
57
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
January 31, 1999
9. SUMMARY OF SHARE TRANSACTIONS
Share activity for the year ended January 31, 1999 is as follows:
<TABLE>
<CAPTION>
Goldman Sachs
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 of operation December 31, 1998.
58
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
Goldman Sachs
Goldman Sachs Goldman Sachs CORE Large Cap Value Goldman Sachs
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 $ 6,646,108 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) (30,470) (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 30,484,309 302,474,259
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) (44,209,006)
----------------------------------------------------------------------------------------------------------------------
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>
Goldman Sachs Trust -- Core Equity Funds -- Tax Information (unaudited)
For the year ended January 31, 1999, 100.0%, 49.76% and 12.13%
of the dividends paid from net investment income by the CORE Small
Cap Equity, CORE U.S. Equity and CORE Large Cap Growth Funds re-
spectively, qualify for the dividends received deduction available
to corporations.
Pursuant to Section 852 of the Internal Revenue Code, CORE U.S.
Equity Fund designates $20,926,736 as a capital gain dividend for
its year ended January 31, 1999.
For the year ended January 31, 1999, the total amount of income
received by the CORE International Equity Fund from sources within
foreign countries and possessions of the United States was $.0682
per share all of which is attributable to qualified passive in-
come. The total amount of taxes paid by the Fund to such countries
was $.0095 per share. A separate notice containing the country by
country components of these totals has been previously mailed to
the shareholders.
59
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
Notes to Financial Statements (continued)
January 31, 1999
9. SUMMARY OF SHARE TRANSACTIONS
Share activity for the year ended January 31, 1998 is as follows:
<TABLE>
<CAPTION>
Goldman Sachs
CORE U.S. Equity Fund
---------------------
Shares Dollars
---------------------
<S> <C> <C>
Class A Shares
Shares sold 6,317,528 $166,483,899
Reinvestment of dividends and distributions 1,196,100 30,986,861
Shares repurchased (2,217,030) (58,462,482)
---------------------
5,296,598 139,008,278
----------------------------------------------------------------------
Class B Shares
Shares sold 1,587,418 41,644,211
Reinvestment of dividends and distributions 160,708 4,120,872
Shares repurchased (243,200) (6,477,303)
---------------------
1,504,926 39,287,780
----------------------------------------------------------------------
Class C Shares
Shares sold 301,152 8,133,714
Reinvestment of dividends and distributions 13,010 332,320
Shares repurchased (75,324) (2,069,721)
---------------------
238,838 6,396,313
----------------------------------------------------------------------
Institutional Shares
Shares sold 1,723,166 45,504,817
Reinvestment of dividends and distributions 637,429 16,625,599
Shares repurchased (1,139,364) (30,605,181)
---------------------
1,221,231 31,525,235
----------------------------------------------------------------------
Service Shares
Shares sold 132,991 3,486,302
Reinvestment of dividends and distributions 22,975 593,618
Shares repurchased (17,860) (452,461)
---------------------
138,106 3,627,459
----------------------------------------------------------------------
NET INCREASE 8,399,699 $219,845,065
----------------------------------------------------------------------
</TABLE>
(a) Commencement of operations for the CORE Large Cap Growth, CORE Small Cap
Equity and CORE International Equity Funds were May 1, 1997, August 15,
1997 and August 15, 1997, respectively.
60
<PAGE>
GOLDMAN SACHS TRUST - CORE EQUITY FUNDS
<TABLE>
<CAPTION>
Goldman Sachs Goldman Sachs Goldman Sachs
CORE Large Cap Growth Fund(a) CORE Small Cap Equity Fund(a) CORE International Equity Fund(a)
----------------------------------------------------------------------------------------------------
Shares Dollars Shares Dollars Shares Dollars
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4,984,608 $ 55,490,159 1,082,435 $ 11,495,763 794,938 $ 7,369,683
116,958 1,326,300 2,621 26,811 156 1,351
(609,700) (7,218,956) (35,569) (376,899) (26,702) (238,798)
----------------------------------------------------------------------------------------------------
4,491,866 49,597,503 1,049,487 11,145,675 768,392 7,132,236
----------------------------------------------------------------------------------------------------
1,245,868 14,674,329 952,128 10,018,888 307,513 2,897,478
29,355 331,745 3,118 31,832 -- --
(113,110) (1,345,680) (12,396) (128,919) (11,971) (110,882)
----------------------------------------------------------------------------------------------------
1,162,113 13,660,394 942,850 9,921,801 295,542 2,786,596
----------------------------------------------------------------------------------------------------
351,956 4,181,116 259,583 2,755,067 192,766 1,797,901
6,404 72,365 582 5,937 -- --
(11,868) (140,832) (18,140) (190,833) (18,328) (161,309)
----------------------------------------------------------------------------------------------------
346,492 4,112,649 242,025 2,570,171 174,438 1,636,592
----------------------------------------------------------------------------------------------------
392,622 4,603,030 850,292 8,678,220 1,925,620 18,216,557
7 79 2,917 29,872 1,603 13,900
(3,701) (43,927) (2,351) (24,802) (6,759) (62,449)
----------------------------------------------------------------------------------------------------
388,928 4,559,182 850,858 8,683,290 1,920,464 18,168,008
----------------------------------------------------------------------------------------------------
9,303 109,118 160 1,600 161 1,599
316 3,579 -- 7 -- --
-- -- -- -- -- --
----------------------------------------------------------------------------------------------------
9,619 112,697 160 1,607 161 1,599
----------------------------------------------------------------------------------------------------
6,399,018 $ 72,042,425 3,085,380 $ 32,322,544 3,158,997 $ 29,725,031
----------------------------------------------------------------------------------------------------
</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(d) Distributions to shareholders
-------------------------- -------------------------------------
Net realized From net
Net asset Net and unrealized In excess realized gain Net increase
value, investment gain (loss) on From net of net on investment (decrease)
beginning income investments investment investment and futures in net asset
of period (loss) and futures income income transactions value
FOR THE YEARS ENDED JANUARY 31,
<S> <C> <C> <C> <C> <C> <C> <C>
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
---------------------------------------------------------------------------------------------------------------------
1995 - Class A Shares 15.93 0.20 (0.38) (0.20) -- (0.94) (1.32)
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) 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.
(b) Annualized.
(c) Not annualized.
(d) Includes the balancing effect of calculating per share amounts.
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
-----------------------------------
Ratio of Ratio of
Net assets Ratio of net investment Ratio of net investment
Net asset at end of net expenses income (loss) expenses to income (loss) to
value, end Total period to average to average average net average
of period return(a) (in 000s) net assets net assets assets net assets
<CAPTION>
Net asset Portfolio
value, end turnover
of period rate
<S> <C> <C> <C> <C> <C> <C>
$32.98 26.89% $605,566 1.23% 0.15% 1.36% 0.02%
32.50 26.19 152,347 1.85 (0.50) 1.98 (0.63)
32.40 26.19 26,912 1.87 (0.53) 2.00 (0.66)
33.29 27.65 307,200 0.69 0.69 0.82 0.56
32.85 27.00 11,600 1.19 0.19 1.32 0.06
- ----------------------------------------------------------------------------------------------------------------------------------
26.59 24.96 398,393 1.28 0.51 1.47 0.32
26.32 24.28 59,208 1.79 (0.05) 1.96 (0.22)
26.24 4.85(c) 6,267 1.78(b) (0.21)(b) 1.95(b) (0.38)(b)
26.79 25.76 202,893 0.65 1.16 0.82 0.99
26.53 25.11 7,841 1.15 0.62 1.32 0.45
- ----------------------------------------------------------------------------------------------------------------------------------
23.32 23.75 225,968 1.29 0.91 1.53 0.67
23.18 18.59(c) 17,258 1.83(b) 0.06(b) 2.00(b) (0.11)(b)
23.44 24.63 148,942 0.65 1.52 0.85 1.32
23.27 15.92(c) 3,666 1.15(b) 0.69(b) 1.35(b) 0.49(b)
- ----------------------------------------------------------------------------------------------------------------------------------
19.66 38.63 129,045 1.25 1.01 1.55 0.71
19.71 20.14(c) 64,829 0.65(b) 1.49(b) 0.96(b) 1.18(b)
- ----------------------------------------------------------------------------------------------------------------------------------
14.61 (1.10) 94,968 1.38 1.33 1.63 1.08
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
$32.98 63.79%
32.50 63.79
32.40 63.79
33.29 63.79
32.85 63.79
- ----------------------------------------------------------------------------------------------------------------------------------
26.59 65.89
26.32 65.89
26.24 65.89
26.79 65.89
26.53 65.89
- ----------------------------------------------------------------------------------------------------------------------------------
23.32 37.78
23.18 37.28
23.44 37.28
23.27 37.28
- ----------------------------------------------------------------------------------------------------------------------------------
19.66 39.35
19.71 39.35
- ----------------------------------------------------------------------------------------------------------------------------------
14.61 56.18
- ----------------------------------------------------------------------------------------------------------------------------------
</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(d) Distributions to shareholders
----------------------------- -------------------------------------
Net realized From net
Net asset and unrealized In excess realized gain
value, Net gain on From net of net on investment Net increase
beginning investment investments investment investment and futures in net asset
of period income (loss) and futures income income transactions value
FOR THE YEAR ENDED JANUARY 31,
<S> <C> <C> <C> <C> <C> <C> <C>
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 -- (.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) 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.
(b) Annualized.
(c) Not annualized.
(d) Includes the balancing effect of calculating per share amounts.
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
-----------------------------------
Ratio of
Net assets Ratio of net investment Ratio of Ratio of
Net asset at end of net expenses income (loss) to expenses to net investment Portfolio
value, end Total period to average average net average net income (loss) to turnover
of period return(a) (in 000s) net assets assets assets average net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$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(c) 53,786 0.91(b) 0.12(b) 2.40(b) (1.37)(b) 74.97(c)
11.92 23.26(c) 13,857 1.67(b) (0.72)(b) 2.91(b) (1.96)(b) 74.97(c)
11.93 4.56(c) 4,132 1.68(b) (0.76)(b) 2.92(b) (2.00)(b) 74.97(c)
11.97 23.89(c) 4,656 0.72(b) 0.42(b) 1.96(b) (0.82)(b) 74.97(c)
11.95 23.56(c) 115 1.17(b) (0.21)(b) 2.41(b) (1.45)(b) 74.97(c)
</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(d) shareholders
---------------------------- ------------------------
Net realized
and unrealized From net
Net asset gain (loss) on realized gain
value, Net investment From net on investment Net increase
beginning investment and futures investment and futures in net asset
of period income (loss) transactions income transactions value
FOR THE YEAR ENDED JANUARY 31,
<S> <C> <C> <C> <C> <C> <C>
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) 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.
(b) Annualized.
(c) Not annualized.
(d) Includes the balancing effect of calculating per share amounts.
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
-----------------------------------
Ratio of Ratio of
Net assets Ratio of net investment Ratio of net investment
Net asset at end of net expenses income (loss) to expenses to income (loss) to Portfolio
value, end Total period to average average net average net average net turnover
of period return(a) (in 000s) net assets assets assets assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$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(c) 11,118 1.25(b) (0.36)(b) 3.92(b) (3.03)(b) 37.65(c)
10.56 6.07(c) 9,957 1.95(b) (1.04)(b) 4.37(b) (3.46)(b) 37.65(c)
10.57 6.17(c) 2,557 1.95(b) (1.07)(b) 4.37(b) (3.49)(b) 37.65(c)
10.61 6.57(c) 9,026 0.95(b) 0.15(b) 3.37(b) (2.27)(b) 37.65(c)
10.60 6.47(c) 2 1.45(b) 0.40(b) 3.87(b) (2.02)(b) 37.65(c)
</TABLE>
- -------------------------------------------------------------------------------
67
<PAGE>
GOLDMAN SACHS CORE LARGE CAP VALUE FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Income from Distributions to
investment operations(d) shareholders
------------------------- ------------------------
Net realized
and unrealized From net
Net asset gain on realized gain
value, Net investment From net on investment Net increase
beginning investment and futures investment and futures in net asset
of period income transactions income transactions value
FOR THE PERIOD ENDED JANUARY 31,
<S> <C> <C> <C> <C> <C> <C>
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) 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.
(b) Annualized.
(c) Not annualized.
(d) Includes the balancing effect of calculating per share amounts.
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
-----------------------------------
Ratio of Ratio of
Net assets Ratio of net investment Ratio of net investment
Net asset at end of net expenses income to expenses to income to average Portfolio
value, end Total period to average average net average net net turnover
of period return(a)(c) (in 000s) net assets(b) assets(b) assets(b) assets(b) rate
<S> <C> <C> <C> <C> <C> <C> <C>
$10.15 1.50% $ 6,665 1.08% 1.45% 8.03% (5.50)% 0%
10.15 1.50 340 1.82 0.84 8.77 (6.11) 0
10.15 1.50 268 1.83 0.70 8.78 (6.25) 0
10.16 1.60 53,396 0.66 1.97 7.61 (4.98) 0
10.16 1.60 2 1.16 2.17 8.11 (4.78) 0
</TABLE>
- --------------------------------------------------------------------------------
69
<PAGE>
GOLDMAN SACHS CORE INTERNATIONAL EQUITY FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
Income from Distributions to
investment operations(d) shareholders
------------------------------ ------------------------
Net realized
and unrealized
gain (loss) on From net
Net asset Net investments, realized gain Net increase
value, investment futures and foreign From net on investment (decrease)
beginning income currency related investment and futures in net asset
of period (loss) transactions income transactions value
FOR THE YEAR ENDED JANUARY 31,
<S> <C> <C> <C> <C> <C> <C>
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) 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.
(b) Annualized.
(c) Not annualized.
(d) Includes the balancing effect of calculating per share amounts.
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
-----------------------------------
Ratio of Ratio of
Net assets Ratio of net investment Ratio of net investment
Net asset at end of net expenses income (loss) to expenses to income (loss) to Portfolio
value, end Total period to average average net average net average net turnover
of period return(a) (in 000s) net assets assets assets assets rate
<S> <C> <C> <C> <C> <C> <C>
$ 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)(c) 7,087 1.50(b) (0.27)(b) 4.87(b) (3.90)(b) 25.16(c)
9.21 (7.90)(c) 2,721 2.00(b) (0.72)(b) 5.12(b) (3.84)(b) 25.16(c)
9.22 (7.80)(c) 1,608 2.00(b) (0.73)(b) 5.12(b) (3.85)(b) 25.16(c)
9.24 (7.45)(c) 17,719 1.00(b) 0.59 (b) 4.12(b) (2.53)(b) 25.16(c)
9.23 (7.70)(c) 1 1.50(b) 0.26 (b) 4.62(b) (2.86)(b) 25.16(c)
</TABLE>
- --------------------------------------------------------------------------------
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 January 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 January 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 January 31, 1999, the results of their operations, the
changes in their net assets and the financial highlights for the periods pre-
sented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
March 19, 1999
72
<PAGE>
Goldman Sachs Asset Management
One New York Plaza, 42nd Floor, New York, New York 10004
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
Anne E. Marcel, Vice President
Nancy L. Mucker, Vice President
John M. Perlowski, 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 and active management
techniques entail risks in addition to those customarily associated with
investing in dollar-denominated securities of U.S issuers. Compared with
domestic securities markets, foreign markets may be less liquid, more volatile
and less subject to government regulation, and may make available less public
information about issuers. The Funds may incur losses because of changes in
securities prices expressed in local currencies, movements in exchange rates or
both.
The stocks of smaller companies are often associated with higher risks,
including greater volatility, than stocks of larger companies.
Source: Lipper Analytical Services, Inc. All Rights Reserved. The Lipper Growth
Fund category includes funds that invest in companies whose long-term earnings
are expected to grow significantly faster than the earnings of stocks
represented in the major unmanaged stock indices. The Lipper Small Cap Fund
category includes funds that by prospectus or portfolio practice invests
primarily in companies with market capitalizations less than $1 billion at the
time of purchase. The Lipper Growth and Income Fund category includes funds
which combine a growth of earnings orientation and an income requirement for
level and or rising dividends. Past Performance is no guarantee of future
results.
Copyright 1999 Goldman, Sachs & Co. All rights reserved. Date of first use:
March 31, 1999 COREAR / 79K / 3-99
