<PAGE>
Goldman Sachs Funds
EMERGING MARKETS EQUITY FUND Semiannual Report February 29, 2000
Long-term capital growth potential
through a diversified portfolio
of emerging markets stocks.
[GRAPHIC]
[LOGO OF GOLDMAN SACHS]
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Market Overview
Dear Shareholder,
During the period under review, emerging markets as a whole continued
to perform well, as many equity markets were aided by stronger
economies and foreign demand.
. Market Review: Overall,Emerging Markets Perform Well -- In
our last report to shareholders, we expressed a belief that,
despite their recent price gains, emerging market equities
remained an attractive long-term investment. This proved to
be an accurate forecast, as emerging markets in general
posted very strong returns during the reporting period. In
many cases, double, and in some instances, triple-digit
returns were generated by emerging market countries.
In Asia, large current surpluses led to a positive interest
rate environment, and restructuring of corporate debt
resulted in positive gains in earnings, even with moderate
top-line growth. In Latin America, the fallout of the
Brazilian devaluation was relatively minor. And, as
recessionary factors abated in many Latin American
countries, their markets generally performed well. In the
Europe, Middle East, Africa (EMEA) region, positive
political events overshadowed negative events and countries
such as Turkey and Russia produced outstanding results.
. Market Outlook: Cautiously Optimistic -- The main factor
affecting the outlook for emerging market equities continues
to be the prospect for better growth around the globe.
Global growth provides a positive backdrop for emerging
market economies, as it typically results in increased
capital flows from more developed countries. In addition,
low valuations, which are prevalent in many emerging market
companies, will likely draw attention from international
investors, as these securities are offered at discounted
prices relative to those of the developed countries. On the
other hand, rising interest rates in the U.S., and/or a
volatile U.S. dollar may substantially affect the U.S.
markets. This, in turn, could weaken emerging market
countries that depend on the larger U.S. market to anchor
their own. Additionally, a weakened U.S. economy would
likely decrease foreign investments into emerging market
countries.
Based on these uncertainties and the potential for
short-term market volatility, we encourage you to work
closely with your financial advisor to maintain a long-term
focus on your investment portfolio. As always, we appreciate
your support and we look forward to serving your investment
needs in the years to come.
Sincerely,
/s/ David B. Ford
David B. Ford
Co-Head, Goldman Sachs Asset Management
- ----------------
. NOT FDIC /s/ David W. Blood
INSURED
David W. Blood
. May Lose Value Co-Head, Goldman Sachs Asset Management
. No Bank March 13, 2000
Guarantee
- ----------------
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Fund Basics
as of February 29, 2000
Assets Under Management $235.0 Million
Number of Holdings
240
NASDAQ SYMBOLS
Class A Shares
GEMAX
Class B Shares
GEKBX
Class C Shares
GEMCX
Institutional Shares
GEMIX
Service Shares
GEMSX
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
PERFORMANCE REVIEW
- -----------------------------------------------------------------------------
Fund Total Return
August 31, 1999-February 29, 2000 (without sales charge)1 MSCI EMF Index2
- -----------------------------------------------------------------------------
<S> <C> <C>
Class A 28.94% 23.53%
Class B 28.66 23.53
Class C 28.68 23.53
Institutional 29.24 23.53
Service 29.06 23.53
- -----------------------------------------------------------------------------
</TABLE>
1 The net asset value represents the net assets of the Fund (ex-dividend)
divided by the total number of shares. The Fund's performance assumes the
reinvestment of dividends and other distributions.
2 The Morgan Stanley Capital International (MSCI) Emerging Markets Free (EMF)
Index (with dividends reinvested) is an unmanaged market
capitalization-weighted composite of securities in over 30 emerging market
countries, including Argentina, Botswana, Brazil, Chile, China, Colombia,
the Czech Republic, Egypt, Greece, Hong Kong, Hungary, India, Israel,
Jordan, Kenya, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines,
Poland, Portugal, Russia, Singapore, South Africa, South Korea, Sri Lanka,
Taiwan, Thailand, Turkey, Venezuela and Zimbabwe. "Free" indicates an index
that excludes shares in otherwise free markets that are not purchasable by
foreigners. Investors cannot directly invest in the Index. The Index
figures do not reflect any fees or expenses.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
STANDARDIZED TOTAL RETURNS3
- -----------------------------------------------------------------------------
For the period ended Class A Class B Class C Institutional Service
12/31/99
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Last 6 Months 14.88% 16.28% 20.29% 22.11% 21.77%
One Year 53.62 56.59 60.84 63.71 63.00
Since Inception 6.98 8.10 9.69 10.84 8.79
(12/15/97)
- ------------------------------------------------------------------------------
</TABLE>
3 The Standardized Total Returns are average annual total returns or
cumulative total returns (only if the performance period is one year or
less) as of the most recent calendar quarter-end. They assume reinvestment
of all distributions at net asset value. These returns reflect a maximum
initial sales charge of 5.5% for Class A shares, the assumed deferred sales
charge for Class B shares (5% maximum declining to 0% after six years) and
the assumed deferred sales charge for Class C shares (1% if redeemed within
12 months of purchase). Because Institutional and Service shares do not
involve a sales charge, such a charge is not applied to their Standardized
Total Returns.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
TOP 10 COMPANY HOLDINGS AS OF 2/29/00
- -------------------------------------------------------------------------------------------
% of Total
Company Holding Net Assets Country Line of Business
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Telefonos de Mexico SA ADR 4.6% Mexico Telecommunications
Samsung Electronics 3.0 South Korea Semiconductors
Taiwan Semiconductor Manufacturing 2.2 Taiwan Semiconductors
Tele Norte Leste Participacoes SA ADR 2.1 Brazil Telecommunications
Embratel Participacoes SA ADR 1.8 Brazil Telecommunications
ICICI Ltd. ADR 1.7 India Banks
Compania Anonima Nacional Telefonos
de Venezuela Class D ADR 1.5 Venezuela Telecommunications
Telesp Celular Participacoes SA 1.5 Brazil Telecommunications
United Microelectronics Corp. Ltd. 1.5 Taiwan Semiconductors
Cia de Telecomunicaciones
de Chile SA ADR 1.4 Chile Telecommunications
- -------------------------------------------------------------------------------------------
</TABLE>
The top 10 company holdings may not be representative of the Fund's future
investments.
Total return figures represent past performance and do not indicate future
results, which will vary. The investment return and principal value of an
investment will fluctuate and, therefore, an investor's shares, when redeemed,
may be worth more or less than their original cost. Performance reflects expense
limitations in effect. In their absence, performance would be reduced.
1
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Performance Overview
Dear Shareholder,
We are pleased to report on the performance of the Goldman Sachs
Emerging Markets Equity Fund for the six month period that ended
February 29, 2000.
Performance Review
Over the six month period ended February 29, 2000, the Fund's
Class A, B, C, Institutional and Service share classes generated
cumulative total returns, without sales charges, of 28.94%,
28.66%, 28.68%, 29.24% and 29.06%, respectively. These returns
compare favorably to the Fund's benchmark, the Morgan Stanley
Capital International (MSCI) Emerging Markets Free (EMF) Index,
which generated a cumulative total return of 23.53%.
The Fund's strong absolute and relative returns were largely due
to astute regional allocations and stock selection.
Regional Allocation
For much of the reporting period, the Fund held overweight
positions in Latin America and Asia, while maintaining its
underweight position in EMEA (Europe, Middle East, Africa). The
largest overweight position in Latin America was Brazil, and the
largest overweight position in Asia was in India. In EMEA, Greece
and South Africa remained the largest underweight positions.
Portfolio Highlights
. Taiwan Semiconductor Manufacturing (TSMC) -- TSMC is a world
leader in the manufacturing of integrated circuits. The firm is
currently benefiting from a strong trend towards outsourcing from
the U.S. and Japan. To help meet with rapidly expanding demand,
the company has increased capacity by acquiring certain of its
competitors. We expect the outsourcing trend to continue over the
next several years, resulting in a very positive supply/demand
environment for semiconductor firms like TSMC.
. Checkpoint Software -- Checkpoint is an Israeli-based Internet
infrastructure company with strong management, a proven business
model, high cash flow and real earnings. The firm is a global
market leader in providing Internet security solutions to
corporations, and is a prime beneficiary from further development
of the e-commerce market. Going forward, we believe that the
company is strategically well-positioned to rapidly grow its
business.
. Samsung Electronics -- Samsung Electronics is one of the top
Dynamic Random Access Memory or DRAM producers in the world, with
process and product technology that sets the global standard. It
has also developed itself as a leading CDMA handset and
infrastructure manufacturer, as well as establishing a facility
to develop liquid crystal displays that are used for laptop
computers. Its growing market share in these areas, combined with
a recognized brand name, should allow the firm to continue to
expand.
2
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
INVESTMENT PROCESS OVERVIEW
The investment process for the Goldman Sachs Emerging Markets Equity Fund
combines both qualitative and quantitative analysis, with an emphasis on
portfolio manager input.
- --------------------
Asset Allocation
Committee
- --------------------
. Proprietary
Quantitative Model
. Portfolio
Manager Views
- ------------------
Country Allocation
- ------------------
- -------------------
Company Visits
--------------
Internal Research
-----------------
Return Expectations
- -------------------
- ---------------
Stock Selection
- ---------------
- --------------------
Portfolio
Construction
- --------------------
. Stock & Industry
Views Relative
to Benchmark
- --------------------
- --------------------
Portfolio Review
& Analysis
- --------------------
. Performance
Measurement
& Attribution
. BARRA
. Risk Analysis
- --------------------
Portfolio Outlook
. Asia -- Asia continues to be the world leader in technology production
companies, manufacturing the vast majority of the world's key technology
goods. The benefits to the economies of Taiwan, Korea, India and Singapore
are dramatic, allowing the development of critical masses of companies in
software and hardware that will spur self-sustaining growth. As the final
vestiges of the financial crisis recede, Asian companies with lower debt
levels and a greater focus on returns on equity should continue to succeed.
. Latin America -- Within Latin America, our favorite market continues to be
Brazil. There is new evidence suggesting that an economic recovery is
underway, as its government has been able to continuously deliver on both
the fiscal side and the structural reform front. After a short-lived
increase in inflation during the second half of 1999, the trend has turned
downwards. And while valuations have risen with the market, they remain
attractive relative to many other emerging market countries. In addition to
Brazil, we remain bullish on Chile, due to its stronger than expected
growth, and on Venezuela, with its very low relative valuations. The main
risk to the Latin American region is economic uncertainty in the U.S.
. Europe, Middle East, Africa (EMEA) -- In general, we remain optimistic for
the region due to the strong economic fundamentals of some of the
underlying markets and economies. The convergence theme towards the
European Union and Emerging Markets Union remains in check, and this should
translate into strong fundamental performance for the corporate sector,
while giving the region a defensive character. Greece is expected to leave
the MSCI Emerging Market Free Index by the end of the year and to join the
Developed Europe Index.
We thank you for your investment and look forward to your continued
confidence.
Goldman Sachs Emerging Markets Equity Investment Team
New York, London and Singapore
February 29, 2000
3
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
The Goldman Sachs Advantage
Founded in 1869, Goldman, Sachs & Co. is a premier financial services
firm traditionally known on Wall Street and around the world for its
institutional expertise.
Today, the firm's Investment Management Division provides
individual investors the opportunity to tap the resources of a
global institutional powerhouse -- and put this expertise to work
in their individual portfolios.
What Sets Goldman Sachs Funds Apart?
1
Resources and Relationships
Our portfolio management teams are located on-site, around the
world, in New York, London, Tokyo and Singapore. Their
understanding of local economies, markets, industries and
cultures helps deliver what many investors want: access to global
investment opportunities and consistent, risk-adjusted
performance.
2
In-Depth Research
Our portfolio management teams make on-site visits to hundreds of
companies each month, then construct selective portfolios with an
emphasis on their best ideas. Our teams also have access to
Goldman, Sachs & Co.'s Global Investment Research Department.
3
Risk Management
In this, our institutional heritage is clear. Institutions, as
well as many individual investors, often look to us to manage the
risks of global investing over time in different market
environments.
To learn more about the Goldman Sachs Funds, call your investment
professional today.
4
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Performance Summary
February 29, 2000 (Unaudited)
The following graph shows the value as of February 29, 2000, of a $10,000 in-
vestment made on December 15, 1997 (commencement of operations) in Class A
Shares (maximum sales charge of 5.5%), Class B Shares (applicable contingent
deferred sales charges of 5.0% declining to 0% after six years), Class C
Shares (applicable contingent deferred sales charges of 1% if redeemed within
twelve months), Institutional and Service Shares (at NAV) of the Goldman
Sachs Emerging Markets Equity Fund. For comparative purposes, the performance
of the Fund's benchmark (the Morgan Stanley Emerging Markets Free Index
("MSCI EMF")) is shown. This performance data represents past performance and
should not be considered indicative of future performance which will fluctu-
ate with changes in market conditions. These performance fluctuations will
cause an investor's shares, when redeemed, to be worth more or less than
their original cost.
Emerging Markets Equity Fund's Lifetime Performance
Growth of a $10,000 Investment, Distributions Reinvested December 15, 1997 to
February 29, 2000
[GRAPH]
<TABLE>
<CAPTION>
Morgan Stanley Class A Class B Class C Institutional Service
<S> <C> <C> <C> <C> <C> <C>
12/15/97 10,000 9,450 10,000 10,000 10,000 10,000
12/97 10,621 9,679 10,240 10,240 10,230 10,240
1/98 9,788 9,159 9,690 9,700 9,700 9,690
2/98 10,810 9,896 10,470 10,470 10,480 10,450
3/98 11,279 10,312 10,900 10,910 10,930 10,860
4/98 11,156 10,369 10,960 10,970 11,000 10,890
5/98 9,628 8,875 9,380 9,390 9,420 9,290
6/98 8,618 8,034 8,500 8,510 8,560 8,390
7/98 8,891 8,308 8,780 8,790 8,840 8,620
8/98 6,321 5,879 6,220 6,230 6,270 6,070
9/98 6,722 6,191 6,550 6,560 6,610 6,390
10/98 7,429 6,796 7,180 7,190 7,250 7,020
11/98 8,047 7,070 7,470 7,470 7,550 7,300
12/98 7,931 7,059 7,451 7,466 7,541 7,290
1/99 7,802 6,931 7,315 7,331 7,405 7,154
2/99 7,879 6,803 7,170 7,185 7,269 7,029
3/99 8,917 7,660 8,064 8,090 8,188 7,904
4/99 10,020 8,635 9,095 9,119 9,243 8,925
5/99 9,962 8,369 8,803 8,828 8,961 8,644
6/99 11,093 9,442 9,927 9,962 10,110 9,758
7/99 10,791 9,206 9,677 9,712 9,870 9,518
8/99 10,889 9,117 9,584 9,608 9,786 9,425
9/99 10,521 8,841 9,282 9,306 9,483 9,133
10/99 10,745 9,048 9,500 9,525 9,713 9,362
11/99 11,709 9,974 10,458 10,492 10,716 10,310
12/99 13,198 11,480 12,039 12,083 12,345 11,882
1/00 13,278 11,470 12,029 12,062 12,335 11,872
2/00 13,453 11,756 12,019 12,364 12,648 12,164
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return through
February 29, 2000(a) Since Inception One Year Six Months(b)
<S> <C> <C> <C>
Class A
Excluding sales charges 10.37% 72.54% 28.94%
Including sales charges 7.59% 63.12% 21.84%
-----------------------------------------------------------------------------
Class B
Excluding contingent deferred sales
charges 9.94% 71.73% 28.66%
Including contingent deferred sales
charges 8.67% 66.76% 23.66%
-----------------------------------------------------------------------------
Class C
Excluding contingent deferred sales
charges 10.07% 71.81% 28.68%
Including contingent deferred sales
charges 10.07% 70.82% 27.68%
-----------------------------------------------------------------------------
Institutional Class 11.21% 73.73% 29.24%
-----------------------------------------------------------------------------
Service Class 9.26% 72.78% 29.06%
-----------------------------------------------------------------------------
</TABLE>
(a) Commencement date of operations was December 15, 1997 for all share clas-
ses.
(b) Not annualized.
5
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Statement of Investments
February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - 87.8%
Argentina - 0.6%
29,100 Telefonica de Argentina SA Class B ADR
(Telecommunications) $ 1,329,506
------------
Brazil - 7.2%
208,806 Companhia Cervejaria Brahma ADR (Food & Beverage) 2,688,377
24,100 Companhia Siderurgica Nacional ADR (Steel) 735,050
177,112 Embratel Participacoes SA ADR (Telecommunications) 4,250,688
36,149 Tele Centro Sul Participacoes SA ADR
(Telecommunications) 2,607,247
189,700 Tele Norte Leste Participacoes SA ADR
(Telecommunications) 4,837,350
58,200 Uniao De Bancos Brasileiros SA GDR (Financial
Services) 1,695,075
------------
16,813,787
------------------------------------------------------------------------------
Chile - 5.1%
58,600 Banco Santander Chile ADR (Financial Services) 868,013
40,500 Banco Santiago ADR (Banks) 810,000
27,200 BBV Banco BHIF ADR (Financial Services) 499,800
168,800 Cia de Telecomunicaciones de Chile SA ADR
(Telecommunications) 3,376,000
33,700 Compania Cervecerias Unidas SA ADR (Food &
Beverage) 867,775
96,600 Distribucion y Servicio D&S SA ADR (Merchandising) 1,859,550
108,100 Embotelladora Andina SA Series B ADR (Food &
Beverage) 1,445,837
104,746 Empresa Nacional de Electricidad SA Endesa ADR
(Electrical Utilities) 1,243,859
50,204 Enersis SA ADR (Electrical Utilities) 978,978
------------
11,949,812
------------------------------------------------------------------------------
China - 1.5%
247,000 China Telecom Ltd.* (Telecommunications) 2,277,076
241,000 Guangdong Kelon Electrical Holdings Co. Ltd. Class
H (Appliance) 117,668
1,318,000 Jiangxi Copper Co. Ltd. Class H* (Nonferrous
Metals) 118,542
160,000 Legend Holdings (Electrical Equipment) 740,084
1,186,000 Yanzhou Coal Mining Co. Ltd. Class H (Mining) 185,910
------------
3,439,280
------------------------------------------------------------------------------
Colombia - 0.8%
32,600 Banco Ganadero SA Class B ADR (Banks) 421,762
353,400 Bavaria SA (Food & Beverage) 1,514,248
------------
1,936,010
------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Czech Republic - 0.4%
3,300 Ceske Radiokomunikace GDR* (Telecommunications) $ 202,950
48,700 CEZ* (Electrical Utilities) 162,313
24,915 SPT Telecom AS* (Telecommunications) 522,949
------------
888,212
-------------------------------------------------------------------------------
Greece - 2.7%
11,335 Alpha Credit Bank (Banks) 816,005
5,561 Attica Enterprises Holding SA (Ship Transportation) 81,127
8,320 Commercial Bank of Greece (Banks) 550,404
6,720 Ergo Bank SA (Banks) 176,949
57,015 Hellenic Telecommunications Organization SA (OTE)
(Telecommunications) 1,696,483
4,430 Heracles General Cement SA (Construction) 121,321
9,692 Intracom (Electrical Equipment) 433,419
17,255 National Bank of Greece (Banks) 1,173,894
36,900 Panafon Hellenic Telecom SA (Telecommunications) 596,949
14,946 STET Hellas Telecommunications SA ADR*
(Telecommunications) 447,446
3,510 Titan Cement Co. (Mining) 167,206
------------
6,261,203
-------------------------------------------------------------------------------
Hong Kong - 1.0%
292,000 China Resources Enterprise Ltd. (Real Estate) 377,057
248,000 Citic Pacific Ltd. (Multi-Industrial) 1,245,911
1,506,000 TCL International Holdings Ltd.* (Electronics
Equipment) 793,355
------------
2,416,323
-------------------------------------------------------------------------------
Hungary - 1.5%
5,100 BorsodChem Rt. (Chemicals) 203,061
55,972 Magyar Travkozlesi Rt ADR (Telecommunications) 2,571,214
19,980 Mol Magyar Olaj-es Gazipari Rt Class S GDR (Energy
Resources) 377,622
8,145 OTP Bank Rt. GDR (Financial Services) 460,193
------------
3,612,090
-------------------------------------------------------------------------------
India - 7.1%
115,050 Hindalco Industries Ltd. GDR+ (Nonferrous Metals) 2,416,050
108,000 ICICI Ltd. ADR* (Banks) 3,996,000
98,600 ITC Ltd. GDR (Tobacco) 2,183,990
87,750 Mahanagar Telephone Nigam Ltd. GDR
(Telecommunications) 1,680,412
43,300 Mahindra & Mahindra Ltd. GDR (Auto) 545,580
34,300 Ranbaxy Laboratories Ltd. GDR (Medical Products) 1,008,420
61,100 Reliance Industries Ltd. GDR+ (Chemicals) 1,206,725
30,200 State Bank of India GDR (Banks) 457,530
84,100 Videsh Sanchar Nigam Ltd. GDR (Telecommunications) 3,069,650
------------
16,564,357
-------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Indonesia - 1.8%
24 Daya Guna Samudera (Food & Beverage) $ 5
5,895,600 PT Bank Pan Indonesia Tbk -Alien Market* (Banks) 376,906
292,000 PT Gudang Garam Tbk (Tobacco) 486,339
200,000 PT Hanjaya Mandala Sampoerna Tbk* (Multi-
Industrial) 330,417
1,572,500 PT Indah Kiat Pulp & Paper Corp.* (Paper) 433,866
632,000 PT Indofood Sukses* (Food & Beverage) 523,123
20,000 PT Indosat (Persero) Tbk ADR (Telecommunications) 358,750
2,272,000 PT Matahari Putra Prima Tbk* (Merchandising) 305,787
2,484,200 PT Telekomunikasi Indonesia Series B
(Telecommunications) 1,220,368
519,000 PT Tempo Scan Pacific Tbk (Health) 251,467
------------
4,287,028
-------------------------------------------------------------------------------
Israel - 4.4%
288,330 Bank Hapoalim (Banks) 854,897
595,162 Bank Leumi (Banks) 1,306,933
144,697 Bezeq Israel Telecomm (Telecommunications) 876,659
23,200 Blue Square Chain Investments & Properties Ltd.
(Specialty Retail) 333,900
14,000 Check Point Software Technologies Ltd.* (Computer
Software) 2,855,125
7,400 ECI Telecom Ltd. (Electrical Equipment) 244,200
6,800 Galileo Technology Ltd.* (Computer Software) 130,475
4,800 Gilat Satellite Networks Ltd. (Electrical
Equipment) 719,700
225,717 ICL Israel Chemical (Chemicals) 264,574
13,106 IDB Holding Corp. Ltd. (Multi-Industrial) 481,284
17,513 Koors Industries Ltd. ADR (Multi-Industrial) 346,976
7,900 Matav-Cable Systems Media Ltd. (Broadcasting) 267,250
5,800 Orbotech Ltd.* (Computer Software) 533,963
37,518 Super Sol (Merchandising) 135,641
22,720 Teva Pharmaceutical Industries Ltd. ADR (Medical
Products) 979,800
------------
10,331,377
-------------------------------------------------------------------------------
Malaysia - 2.9%
244,000 Arab-Malaysian Finance Berhad-Alien Market* (Banks) 388,474
288,000 Malayan Banking Berhad (Banks) 1,296,000
151,000 New Straits Times Press M Berhad* (Publishing) 635,789
477,000 Public Bank Berhad-Alien Market (Banks) 646,461
297,000 Public Bank Berhad (Banks) 328,263
379,000 Resorts World Berhad (Leisure) 1,376,368
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Malaysia - (continued)
115,000 Telekom Malaysia Berhad (Telecommunications) $ 487,237
92,000 Tenaga Nasional Berhad (Electrical Utilities) 305,053
145,000 Unisem (M) Berhad (Electrical Equipment) 1,373,684
------------
6,837,329
------------------------------------------------------------------------------
Mexico - 9.3%
38,431 Cemex SA de CV ADR* (Mining) 821,463
1,056,600 Cifra Ser C Class C* (Merchandising) 2,425,723
24,000 Fomento Economico Mexicano, SA de CV Series B
(Food & Beverage) 1,066,500
208,400 Grupo Carso SA Series A* (Multi-Industrial) 812,237
292,300 Grupo Financiero Banamax Accival, SA de CV Banacci
Series O* (Banks) 1,246,918
2,031,900 Grupo Financiero Bancomer SA de CV Series O*
(Banks) 1,002,390
260,300 Grupo Modelo SA Series C (Tobacco) 590,643
26,500 Grupo Televisa SA GDR* (Broadcasting) 2,035,531
6,900 Kimberly Clark (Medical Products) 21,477
164,800 Telefonos de Mexico SA ADR (Telecommunications) 10,835,600
70,000 TV Azteca, SA de CV ADR (Broadcasting) 975,625
------------
21,834,107
------------------------------------------------------------------------------
Pakistan - 0.4%
79,000 Fauji Fertilizer Co. Ltd. (Chemicals) 95,757
352,000 Hub Power Co. Ltd.* (Electrical Utilities) 186,921
44,400 Pakistan State Oil Co. Ltd. (Energy Resources) 209,720
610,000 Pakistan Telecommunications Co. Ltd.
(Telecommunications) 376,739
------------
869,137
------------------------------------------------------------------------------
Peru - 1.3%
24,400 Credicorp Ltd. (Banks) 298,900
141,900 Telefonica del Peru SAA Class B ADR
(Telecommunications) 2,784,788
191,700 Union de Cervecerias Backus y Johnston SAA
(Alcohol) 78,006
------------
3,161,694
------------------------------------------------------------------------------
Philippines - 0.9%
406,100 ABS-CBN Broadcasting Corp. PDR* (Broadcasting) 450,892
432,000 Ayala Corp. (Multi-Industrial) 92,767
172,800 Bank of the Philippine Islands (Banks) 392,152
1,223,100 Benpres Holdings Corp.* (Multi-Industrial) 220,862
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Statement of Investments (continued)
February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Philippines - (continued)
46,500 Manila Electric Co. Class B (Electrical Utilities) $ 85,103
8,700 Philippine Long Distance Telephone Co.
(Telecommunications) 188,946
15,750 Philippine Long Distance Telephone Co. ADR
(Telecommunications) 342,562
173,540 San Miguel Corp. "B" Class B (Tobacco) 203,268
1,570,200 SM Prime (Construction) 210,740
------------
2,187,292
------------------------------------------------------------------------------
Poland - 1.0%
1,340 Bank Slaski (Banks) 83,328
33,130 Elektrim Spolka Akcyjna SA* (Multi-Industrial) 477,263
29,400 KGHM Polska Miedz SA (Nonferrous Metals) 236,471
12,000 Orbis SA* (Leisure) 112,653
32,300 Polski Koncern Naftowy SA GDR* (Energy Resources) 343,995
4,700 Prokom Software SA (Computer Software) 310,324
89,200 Telekomunikacja Polska SA (Telecommunications) 813,829
12,100 Wielkopolski Bank Kredytowy (Financial Services) 73,791
------------
2,451,654
------------------------------------------------------------------------------
Russia - 3.2%
35,600 AO Tatneft ADR (Energy Resources) 418,300
4,930 Gedeon Richter Ltd. Class S GDR (Medical Products) 344,361
54,273 LUKoil Holding ADR (Energy Resources) 2,198,056
27,108 Mosenergo ADR (Electrical Utilities) 128,763
15,755 OAO Gazprom ADR (Oil and Gas) 128,403
1,865 RAO Unified Energy Systems GDR (Electrical
Utilities) 25,090
138,597 RAO Unified Energy Systems Class S (Electrical
Utilities) 1,871,060
29,400 Rostelecom ADR* (Telecommunications) 514,500
168,502 Surgutneftegaz ADR (Energy Resources) 1,853,522
------------
7,482,055
------------------------------------------------------------------------------
South Africa - 7.1%
51,600 ABSA Group Ltd. (Financial Services) 199,511
41,800 Anglo American Platinum Corp. (Nonferrous Metals) 1,187,406
21,529 Angloglold (Mining) 1,117,816
37,956 Bidvest Group Ltd. (Multi-Industrial) 311,483
513,400 BOE Ltd. (Financial Services) 481,275
86,000 Comparex Holdings Ltd. (Business Services) 600,568
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
South Africa - (continued)
110,980 De Beers Centenary (Agriculture) $ 2,434,502
143,739 Dimension Data Holdings Ltd. (Computer Software) 1,338,373
785,698 FirstRand Ltd. (Financial Services) 983,285
107,220 Gold Fields Ltd. (Mining) 497,478
14,900 Impala Platinum Holdings Ltd. (Nonferrous Metals) 531,429
10,720 Investec Group Ltd. (Banks) 446,631
40,319 Liberty Life Association of Africa (Information
Services) 393,232
162,300 M-Cell Ltd. (Telecommunications) 973,313
31,400 Nedcor Ltd. (Banks) 664,026
89,465 Rembrandt Group (Tobacco) 776,545
441,400 Sanlam Ltd. (Information Services) 557,279
68,900 Sappi Ltd. (Pulp and Paper) 570,859
106,025 Sasol (Chemicals) 679,336
180,479 South African Brewery (Alcohol) 1,395,640
44,028 Tiger Brands Ltd.*
(Multi-Industrial) 472,485
------------
16,612,472
-----------------------------------------------------------------------------
South Korea - 9.4%
9,620 Cheil Jedang Corp. (Food & Beverage) 620,011
17,700 Dongwon Securities (Financial Services) 361,478
1,770 Hankook Tire Co. Ltd. (Auto) 4,162
45,803 Housing & Commercial Bank (Banks) 815,955
5 Hyundai Motor Co. Ltd. (Auto) 53
22,000 Hyundai Securities Co. (Financial Services) 361,770
43,800 Korea Electric Power Corp. ADR (Electrical
Utilities) 602,250
9,000 Korea Electric Power Corp. ADR (Electrical
Utilities) 391,500
68,200 Korea Electric Power Corp. (Electrical Utilities) 1,706,349
5,500 Korea Thrunet Co. Ltd.* (Telecommunications) 325,187
12,040 Korea Tobacco & Ginseng Corp. (Tobacco) 294,852
1,550 Korean Air (Airlines) 10,620
31,000 LG Chemical Ltd. (Chemicals) 820,835
22,800 LG Electronics (Appliance) 468,657
28,090 Mirae Co. ADR (Electrical Equipment) 366,926
13,388 Pohang Iron & Steel Co. Ltd. (Steel) 1,359,330
4,500 Pohang Iron & Steel Co. Ltd. ADR (Steel) 113,062
34,000 Samsung Corp.* (Wholesale) 369,727
9,470 Samsung Display Devices Co. (Electrical Equipment) 275,450
31,006 Samsung Electronics (Semiconductors) 7,017,506
4,818 Samsung Fire & Marine Insurance (Insurance) 136,945
14,115 Samsung Securities Co. Ltd. (Financial Services) 431,772
120,160 Shinhan Bank (Banks) 1,147,310
10,648 SK Corp. (Energy Resources) 240,052
781 SK Telecom Co. Ltd. (Telecommunications) 2,899,996
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
South Korea - (continued)
14,101 SK Telecom Co. Ltd. ADR (Telecommunications) $ 633,664
4,000 Trigem Computer, Inc.* (Electrical Equipment) 401,377
------------
22,176,796
------------------------------------------------------------------------------
Taiwan - 10.4%
440,000 Acer, Inc. (Electrical Equipment) 1,196,743
207,000 Ambit Microsystems Corp. (Electrical Equipment) 2,130,684
101,000 Asustek Computer, Inc. (Appliance) 1,260,032
1,393,850 Bank Sinopac (Financial Services) 957,988
369,900 Cathay Life Insurance Co. (Insurance) 1,024,153
568,000 China Development Industrial Bank (Multi-
Industrial) 962,085
106,000 Compeq Manufacturing Co. Ltd. (Electrical
Equipment) 652,573
105,000 Delta Electronics, Inc. (Electrical Equipment) 506,189
352,330 Far Eastern Textile Ltd. (Apparel) 768,929
359,960 Formosa Chemicals & Fibre Corp. (Chemicals) 539,354
234,840 Hon Hai Precision (Electrical Equipment) 2,187,760
569,970 Nan Ya Plastic Corp. (Chemicals) 1,262,474
249,060 President Chain Stores (Specialty Retail) 1,087,102
55,000 Procomp Informatics Co. Ltd.* (Semiconductors) 429,967
580,000 Taiwan Cement Corp. (Construction) 814,267
774,842 Taiwan Semiconductor (Semiconductors) 5,073,070
945,000 United Microelectonics Corp. Ltd. (Semiconductors) 3,462,948
------------
24,316,318
------------------------------------------------------------------------------
Thailand - 1.4%
35,000 Advanced Info Service Public-Alien Market*
(Telecommunications) 543,618
129,800 Bangkok Bank Public-Alien Market* (Banks) 209,437
78,000 BEC World PLC -Alien Market (Entertainment) 585,281
32,000 Delta Electronics (Thailand) Public Co. Ltd. -
Alien Market (Electrical Equipment) 367,729
281,000 Land & House Public Co. Ltd.-Alien Market* (Real
Estate) 130,861
82,500 PTT Exploration & Production Public-Alien Market*
(Energy Resources) 396,104
43,000 Shin Corp. Public Co. Ltd.-Alien Market* (Computer
Hardware) 340,706
9,200 Siam Cement Public-Alien Market* (Construction) 166,066
288,800 TelecomAsia Corp. Public-Alien Market*
(Telecommunications) 401,585
263,600 Thai Farmers Bank Public Co. Ltd.-Alien Market*
(Banks) 248,973
------------
3,390,360
------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Common Stocks - (continued)
Turkey - 4.1%
17,439,600 Akcansa Cimento AS (Construction) $ 387,031
11,210,700 Arcelik AS (Consumer Durables) 663,453
2,563,400 Aygaz AS (Electrical Utilities) 303,406
5,596,700 Ege Biracilik Ve Malt Sanayii AS (Tobacco) 360,439
18,756,457 Eregli Demir ve Celik Fabrikalari TAS Erdemir
(Steel) 808,025
6,238,000 Ford Otomotiv Sanayi AS (Motor Vehicle) 298,591
927,730 Migros (Merchandising) 557,108
13,348,800 Tofas Turk Otomobil Fabrikasi AS (Motor Vehicle) 167,291
39,767,140 Turkiye Garanti Bankasi AS (Banks) 595,280
50,901,926 Turkiye Is Bankasi Isbank Class C (Banks) 2,436,495
1,600,500 Vestel Elektronik Sanayi ve Ticaret AS* (Appliance) 522,343
87,728,740 Yapi Kredi Bankesi (Banks) 2,595,909
------------
9,695,371
-------------------------------------------------------------------------------
United Kingdom - 0.1%
138,215 Coca-Cola Beverages PLC*
(Food & Beverage) 266,204
-------------------------------------------------------------------------------
United States - 0.4%
23,100 Bio-Technology General Corp.* (Medical Products) 443,953
2,700 DSP Group, Inc.* (Computer Software) 237,094
7,850 UBS AG (Banks) 182,905
------------
863,952
-------------------------------------------------------------------------------
Venezuela - 1.8%
58,300 C.A. La Electricidad de Caracas ADR (Electrical
Utilities) 831,230
105,000 Compania Anonima Nacional Telefonos de Venezuela
Class D ADR (Telecommunications) 3,497,813
------------
4,329,043
-------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $161,278,887) $206,302,769
-------------------------------------------------------------------------------
Preferred Stocks - 9.7%
Brazil - 9.5%
410,426,530 Banco Bradesco SA (Banks) $ 2,950,521
31,849,000 Banco Itau SA (Banks) 2,530,987
69,000 Companhia Brasileira de Distribuicao Grupo Pao de
Acucar ADR (Merchandising) 2,328,750
1,358,000 Companhia Cervejaria Brahma (Food & Beverage) 837,229
62,500 Companhia Vale do Rio Doce (Steel) 1,661,482
10,880,600 Petroleo Brasileiro SA
(Energy Resources) 2,830,925
1,000 Tele Centro Sul Participacoes SA
(Telecommunications) 14
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Statement of Investments (continued)
February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
<C> <S> <C>
Preferred Stocks - (continued)
Brazil - (continued)
161,944,678 Telesp Celular Participacoes SA
(Telecommunications) $ 3,482,543
28,000 Telesp Celular Participacoes SA ADR
(Telecommunications) 1,508,500
84,516,695 Telesp Telecomunicacoes de
Sao Paulo SA (Telecommunications) 2,867,258
101,100 Ultrapar Participacoes SA ADR* (Multi-Industrial) 1,225,837
------------
22,224,046
-----------------------------------------------------------------------------
Russia - 0.2%
48,155 LUKoil Holding ADR
(Energy Resources) 517,666
-----------------------------------------------------------------------------
Thailand - 0.0%
133,100 Siam Commercial Bank Public Co. Ltd.* (Banks) 80,318
-----------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $17,629,595) $ 22,822,030
-----------------------------------------------------------------------------
Warrants - 0.0%
Indonesia - 0.0%
277,200 PT Bank Pan Indonesia Tbk - Alien Market exp.
07/08/2002* (Banks) $ 6,342
-----------------------------------------------------------------------------
Thailand - 0.0%
276,100 Siam Commercial Bank Public Co. Ltd. - Alien
Market exp. 05/10/2002* (Banks) 67,368
-----------------------------------------------------------------------------
TOTAL WARRANTS
(Cost $0) $ 73,710
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
Short-Term Obligation - 1.2%
<C> <S> <C> <C>
State Street Bank & Trust Euro - Time Deposit
$2,668,000 5.75% 03/01/2000 $ 2,668,000
-----------------------------------------------------------------------------------------------
TOTAL SHORT-TERM OBLIGATION
(Cost $2,668,000) $ 2,668,000
-----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $181,576,482) $231,866,509
-----------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
+ Security is exempt from registration under Rule 144A of the Securities Act
of 1933. Such security may be resold, normally to qualified institutional
buyers in transactions exempt from registration.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
------------------------------------------------------------------------------
Investment Abbreviations:
ADR--American Depositary Receipt
GDR--Global Depositary Receipt
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
<TABLE>
<S> <C>
Percentage of
Total Net Assets
Common and Preferred Stock Industry Classifications +
Agriculture 1.0%
Alcohol 0.6
Apparel 0.3
Appliance 1.0
Auto 0.2
Banks 13.4
Broadcasting 1.6
Business Services 0.3
Chemicals 2.2
Computer Hardware 0.1
Computer Software 2.3
Construction 0.7
Consumer Durables 0.3
Electrical
Equipment 4.9
Electrical
Utilities 3.8
Electronics
Equipment 0.3
Energy Resources 4.0
Entertainment 0.3
Financial Services 3.1
Food & Beverage 4.2
Health 0.1
Information
Services 0.4
Insurance 0.5
Leisure 0.6
Medical Products 1.2
Merchandising 3.3
Mining 1.2
Motor Vehicle 0.2
Multi-Industrial 2.9
Nonferrous Metals 1.9
Oil and Gas 0.1
Paper 0.2
Publishing 0.3
Pulp and Paper 0.2
Real Estate 0.2
Semiconductors 6.8
Specialty Retail 0.6
Steel 2.0
Telecommunications 27.8
Tobacco 2.1
Wholesale 0.2
-------------------------------------------------------------------------
TOTAL COMMON AND PREFERRED STOCK 97.4%
-------------------------------------------------------------------------
</TABLE>
+ Industry concentrations greater than one tenth of one percent are disclosed.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Statement of Assets and Liabilities
February 29, 2000 (Unaudited)
Assets:
<TABLE>
<S> <C>
Investment in securities, at value (identified cost
$181,576,482) $231,866,509
Cash, at value 2,344,116
Receivables:
Investment securities sold, at value 215,628
Dividends and interest, at value 381,642
Fund shares sold 1,398,952
Reimbursement from investment adviser 49,554
Deferred organization expenses, net 8,219
Other assets 4,684
------------------------------------------------------------------------------
Total assets 236,269,304
------------------------------------------------------------------------------
Liabilities:
Payables:
Investment securities purchased, at value 249,428
Fund shares repurchased 268,196
Amounts owed to affiliates 281,059
Capital gains tax 264,980
Accrued expenses and other liabilities, at value 172,067
------------------------------------------------------------------------------
Total liabilities 1,235,730
------------------------------------------------------------------------------
Net Assets:
Paid-in capital 194,814,842
Accumulated net investment loss (356,634)
Accumulated net realized loss on investment and foreign
currency related transactions (9,448,235)
Net unrealized gain on investments and translation of assets
and liabilities denominated in foreign currencies 50,023,601
------------------------------------------------------------------------------
NET ASSETS $235,033,574
------------------------------------------------------------------------------
Net asset value, offering and redemption price per share:(a)
Class A $11.94
Class B $11.85
Class C $11.89
Institutional $12.11
Service $11.68
------------------------------------------------------------------------------
Shares outstanding:
Class A 7,180,857
Class B 197,703
Class C 153,909
Institutional 11,979,382
Service 154
------------------------------------------------------------------------------
Total shares outstanding, $.001 par value (unlimited number of
shares authorized) 19,512,005
------------------------------------------------------------------------------
</TABLE>
(a) Maximum public offering price per share (NAV per share multiplied by
1.0582) for Class A Shares is $12.63. At redemption, Class B and Class C
Shares may be subject to a contingent deferred sales charge, assessed on
the amount equal to the lesser of the current net asset value or the
original purchase price of the shares.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Statement of Operations
For the Six Months Ended February 29, 2000 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Dividends(a) $ 1,268,952
Interest 91,383
-------------------------------------------------------------
Total income 1,360,335
-------------------------------------------------------------
Expenses:
Management fees 1,216,852
Custodian fees 298,656
Distribution and Service fees(b) 199,528
Transfer Agent fees(c) 98,496
Professional fees 26,728
Trustee fees 4,008
Amortization of deferred organization expenses 1,467
Other 24,173
-------------------------------------------------------------
Total expenses 1,869,908
-------------------------------------------------------------
Less -- expenses reimbursed (198,867)
-------------------------------------------------------------
Net expenses 1,671,041
-------------------------------------------------------------
NET INVESTMENT LOSS (310,706)
-------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Realized and unrealized gain (loss) on investment and foreign
currency related transactions:
Net realized gain (loss) from:
Investment transactions 25,345,941
Foreign currency related transactions (1,681,056)
Net change in unrealized gain (loss) on:
Investments 28,708,111
Translation of assets and liabilities denominated in foreign
currencies (81,298)
----------------------------------------------------------------------------
Net realized and unrealized gain on investment and foreign
currency related transactions 52,291,698
----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $51,980,992
----------------------------------------------------------------------------
</TABLE>
(a) Taxes withheld on dividends were $132,018.
(b) Class A, Class B and Class C had Distribution and Service fees of
$186,700, $6,828 and $6,000, respectively.
(c) Class A, Class B, Class C, Institutional Class and Service Class had
Transfer Agent fees of $70,946, $1,297, $1,140, $25,112 and $1, respec-
tively.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six For the Seven For the
Months Ended Months Ended Year Ended
February 29, 2000 August 31, 1999 January 31, 1999
(Unaudited)
<S> <C> <C> <C>
From operations:
Net investment income
(loss) $ (310,706) $ 238,988 $ 1,649,430
Net realized gain (loss)
on investment and
foreign currency related
transactions 23,664,885 12,150,716 (41,326,432)
Net change in unrealized
gain (loss) on
investments and
translation of assets
and liabilities
denominated in foreign
currencies 28,626,813 31,170,452 (8,910,101)
--------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations 51,980,992 43,560,156 (48,587,103)
--------------------------------------------------------------------------------
Distributions to share-
holders:
From net investment
income
Class A Shares -- -- (569,869)
Class B Shares -- -- (4,352)
Class C Shares -- -- (2,737)
Institutional Shares -- -- (1,092,333)
Service Shares -- -- (11)
In excess of net
investment income
Class A Shares -- -- (1,680,766)
Class B Shares -- -- (12,834)
Class C Shares -- -- (8,074)
Institutional Shares -- -- (3,221,713)
Service Shares -- -- (33)
--------------------------------------------------------------------------------
Total distributions to
shareholders -- -- (6,592,722)
--------------------------------------------------------------------------------
From share transactions:
Proceeds from sales of
shares 52,361,792 32,173,466 220,344,538
Reinvestment of
dividends and
distributions -- -- 4,301,531
Cost of shares
repurchased (45,650,157) (43,018,256) (62,779,701)
--------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from share transactions 6,711,635 (10,844,790) 161,866,368
--------------------------------------------------------------------------------
TOTAL INCREASE 58,692,627 32,715,366 106,686,543
--------------------------------------------------------------------------------
Net assets:
Beginning of period 176,340,947 143,625,581 36,939,038
--------------------------------------------------------------------------------
End of period $235,033,574 $176,340,947 $143,625,581
--------------------------------------------------------------------------------
Accumulated
undistributed net
investment income (loss) $ (356,634) $ (45,928) $ 26,133
--------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Notes to Financial Statements
February 29, 2000 (Unaudited)
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 management
investment company. The Trust includes the Goldman Sachs Emerging Markets
Equity Fund (the "Fund"). The Fund is a diversified portfolio offering five
classes of shares -- Class A, Class B, Class C, Institutional and Service.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies consist-
ently followed by the Fund. The preparation of financial statements in con-
formity with generally accepted accounting principles requires management to
make estimates and assumptions that may affect the reported amounts. Actual
results could differ from those estimates. Effective for fiscal year 1999,
the Board of Trustees approved a change in the fiscal year end of the Fund
from January 31 to August 31. Accordingly, the Statements of Changes in Net
Assets, Summary of Share Transactions and Financial Highlights of the Fund
are included for the seven months ended August 31, 1999 and for the year
ended January 31, 1999.
A. Investment Valuation -- Investments in securities traded on a U.S. or for-
eign securities exchange or the NASDAQ system are valued daily at their last
sale price on the principal exchange on which they are traded. If no sale oc-
curs, securities are valued at the last bid price. Debt securities are valued
at prices supplied by independent pricing services, broker/dealer-supplied
valuations or matrix pricing systems. Unlisted equity and debt securities for
which market quotations are available are valued at the last sale price on
valuation date or, if no sale occurs, at the last bid price. Short-term debt
obligations maturing in sixty days or less are valued at amortized cost,
which approximates market value. Securities for which quotations are not
readily available are valued at fair value using methods approved by the
Board of Trustees of the Trust.
Investing in emerging markets may involve special risks and considerations
not typically associated with investing in the United States. These risks in-
clude revaluation of currencies, high rates of inflation, repatriation re-
strictions on income and capital, and adverse political and economic
developments. Moreover, securities issued in these markets may be less liq-
uid, subject to government ownership controls, delayed settlements, and their
prices more volatile than those of comparable securities in the United
States.
B. Security Transactions and Investment Income -- Security transactions are
recorded as of the trade date. Realized gains and losses on sales of portfo-
lio securities are calculated using the identified-cost basis. Dividend in-
come is recorded on the ex-dividend date. Dividends for which the Fund has
the choice to receive either cash or stock are recognized as investment in-
come in an amount equal to the cash dividend. Interest income is recorded on
the basis of interest accrued, premium amortized and discount earned. It is
the Fund's policy, where necessary, to accrue for estimated capital gains
taxes on appreciated foreign securities.
C. Federal Taxes -- It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute each year substantially all of its investment company taxable
income and capital gains to its shareholders. Accordingly, no federal tax
provision is required.
The characterization of distributions to shareholders for financial report-
ing purposes is determined in accordance with income tax rules. Therefore,
the source of the Fund's distributions may be shown in the accompanying fi-
nancial statements as either from or in excess of net investment income or
net realized gain on investment transactions, or from paid-in capital, de-
pending on the type of book/tax differences that may exist.
15
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Notes to Financial Statements (continued)
February 29, 2000 (Unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
At February 29, 2000, the aggregate cost of portfolio securities for fed-
eral income tax purposes is $187,649,024. Accordingly, the gross unrealized
gain on investments was $45,912,789 and the gross unrealized loss on invest-
ments was $1,695,304 resulting in a net unrealized gain of $44,217,485.
The Fund had approximately $26,886,000 at August 31, 1999 (the Fund's tax
year end) of capital loss carryforward expiring 2006 for federal tax purpos-
es. This amount is available to be carried forward to offset future capital
gains to the extent permitted by applicable laws or regulations.
D. Expenses -- Expenses incurred by the Trust which do not specifically re-
late to an individual Fund of the Trust are allocated to the Funds based on a
straight-line or pro rata basis depending upon the nature of the expense.
Class A, Class B and Class C Shares bear all expenses and fees relating to
their respective Distribution and Service Plans. Shareholders of Service
shares bear all expenses and fees paid to service organizations. Each class
of shares separately bears its respective class-specific Transfer Agency
fees.
E. Deferred Organization Expenses -- Organization-related costs are amortized
on a straight-line basis over a period of five years.
F. Foreign Currency Translations -- The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in foreign currencies are
translated into U.S. dollars on the following basis: (i) investment valua-
tions, foreign currency and other assets and liabilities initially expressed
in foreign currencies are converted each business day into U.S. dollars based
on current exchange rates; and (ii) purchases and sales of foreign invest-
ments, income and expenses are converted into U.S. dollars based on currency
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.
G. Derivative Financial Instruments -- The Fund may utilize derivative finan-
cial instruments such as structured notes and equity swaps. Such instruments
are used by the Fund as a means of investing in a particular market or in-
creasing the return on the Fund's investments or both. The value of the prin-
cipal of and/or interest on such securities is determined by reference to
changes in the value of the financial indicators including, but not limited
to indices, currencies or interest rates. These financial instruments may
subject the Fund to a greater degree of market or counterparty risk and loss
than other types of securities.
H. Short Securities Positions -- The Fund may enter into covered short sales.
Short securities positions are accounted for at cost and subsequently marked-
to-market to reflect the current market value of the position. The market
value of the short position is recorded as a liability on the Fund's records
and any difference between this market value and the sales proceeds is re-
ported as an unrealized gain or loss. Gains and losses are realized when a
short position is closed out by delivering securities back to the broker.
I. Segregation Transactions -- The Fund may enter into certain derivative
transactions to seek to increase total return. Forward foreign currency ex-
change contracts, futures contracts, written options, mortgage dollar rolls,
when-issued securities and forward commitments represent examples of such
transactions. As a result of entering into these transactions, the Fund is
required to segregate liquid assets on the accounting records equal to or
greater than the market value of the corresponding transactions.
16
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
3. AGREEMENTS
Pursuant to the Investment Management Agreement (the "Agreement"), Goldman
Sachs Asset Management International ("GSAMI"), a unit of the Investment Man-
agement Division of Goldman, Sachs & Co. ("Goldman Sachs"), serves as the in-
vestment adviser to the Fund. Under the Agreement, GSAMI, subject to the
general supervision of the Trust's Board of Trustees, manages the Fund's
portfolio. As compensation for the services rendered under the Agreement, the
assumption of the expenses related thereto and administering the Fund's busi-
ness affairs, including providing facilities, GSAMI is entitled to a fee,
computed daily and payable monthly, at an annual rate equal to 1.20% of the
average daily net assets of the Fund.
The investment adviser has voluntarily agreed to limit certain "Other Ex-
penses" (excluding management fees, distribution and service fees, transfer
agent fees, taxes, interest, brokerage, litigation, Service share fees, in-
demnification costs and other extraordinary expenses) to the extent such ex-
penses exceed, on an annual basis, 0.15% of the average daily net assets of
the Fund. Goldman Sachs reimbursed approximately $199,000 for the period
ended February 29, 2000.
The Trust, on behalf of the Fund, has adopted Distribution and Service
Plans. Under the Distribution and Service Plans, Goldman Sachs and/or autho-
rized dealers are entitled to a monthly fee from the Fund for distribution
and shareholder maintenance services equal, on an annual basis, to 0.50%,
1.00% and 1.00% of the Fund's average daily net assets attributable to Class
A, Class B and Class C Shares, respectively.
Goldman Sachs serves as the distributor of shares of the Fund pursuant to a
Distribution Agreement. Goldman Sachs may receive a portion of the Class A
sales load and Class B and Class C contingent deferred sales charges and has
advised the Fund that it has retained approximately $53,000 for the period
ended February 29, 2000.
Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. Fees
charged for such transfer agency services are calculated daily and payable
monthly at an annual rate as follows: 0.19% of average daily net assets for
Class A, Class B and Class C Shares and 0.04% of average daily net assets for
Institutional and Service shares.
The Trust, on behalf of the Fund, has adopted a Service Plan. This Plan al-
lows for Service Shares to compensate service organizations for providing va-
rying levels of account administration and shareholder liaison services to
their customers who are beneficial owners of such shares. The Service Plan
provides for compensation to the service organizations in an amount up to
0.50% (on an annualized basis), of the average daily net asset value of the
Service Shares.
As of February 29, 2000, the amounts owed to affiliates were approximately
$225,000, $38,000 and $18,000 for Management, Distribution and Service and
Transfer Agent fees, respectively.
17
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Notes to Financial Statements (continued)
February 29, 2000 (Unaudited)
4. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and proceeds of sales or maturities of securities (excluding short-
term investments) for the year ended February 29, 2000 were $134,210,804 and
$125,091,699, respectively. For the period ended February 29, 2000, Goldman
Sachs earned approximately $97,000 of brokerage commissions from portfolio
transactions.
Forward Foreign Currency Exchange Contracts -- The Fund may enter into for-
ward foreign currency exchange contracts for the purchase or sale of a spe-
cific foreign currency at a fixed price on a future date as a hedge or cross-
hedge against either specific transactions or portfolio positions. The Fund
may also purchase and sell such contracts to seek to increase total return.
All commitments are "marked-to-market" daily at the applicable translation
rates and any resulting unrealized gains or losses are recorded in the Fund's
financial statements. The Fund realizes gains or losses at the time a forward
contract is offset by entry into a closing transaction or extinguished by de-
livery of the currency. Risks may arise upon entering these contracts from
the potential inability of counterparties to meet the terms of their con-
tracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. At February 29, 2000 the Fund had no outstanding
forward foreign currency exchange contracts.
Futures Contracts -- The Fund 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 Fund is required to deposit with a broker or the Fund's custodian bank,
an amount of cash or securities equal to the minimum "initial margin" re-
quirement of the associated futures exchange. Subsequent payments for futures
contracts ("variation margin") are paid or received by the Fund, depending on
the fluctuations in the value of the contracts, and are recorded for finan-
cial reporting purposes as unrealized gains or losses. When contracts are
closed, the Fund realizes a gain or loss which is reported in the Statement
of Operations.
The use of futures contracts involve, to varying degrees, elements of mar-
ket risk which may exceed the amounts recognized in the Statement of Assets
and Liabilities. Changes in the value of the futures contract may not di-
rectly correlate with changes in the value of the underlying securities. This
risk may decrease the effectiveness of the Fund's hedging strategies and po-
tentially result in a loss. At February 29, 2000, the Fund had no open
futures contracts.
18
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
4. PORTFOLIO SECURITIES TRANSACTIONS (continued)
Option Accounting Principles -- When the Fund writes call or put options, an
amount equal to the premium received is recorded as an asset and as an equiv-
alent liability. The amount of the liability is subsequently marked-to-market
to reflect the current market value of the option written. When a written op-
tion expires on its stipulated expiration date or the Fund enters into a
closing purchase transaction, the Fund realizes a gain or loss without regard
to any unrealized gain or loss on the underlying security, and the liability
related to such option is extinguished. When a written call option is exer-
cised, the Fund realizes a gain or loss from the sale of the underlying secu-
rity, and the proceeds of the sale are increased by the premium originally
received. When a written put option is exercised, the amount of the premium
originally received will reduce the cost of the security which the Fund pur-
chases upon exercise. There is a risk of loss from a change in value of such
options which may exceed the related premiums received.
Upon the purchase of a call option or a protective put option by the Fund,
the premium paid is recorded as an investment and subsequently marked-to-mar-
ket to reflect the current market value of the option. If an option which the
Fund has purchased expires on the stipulated expiration date, the Fund will
realize a loss in the amount of the cost of the option. If the Fund enters
into a closing sale transaction, the Fund will realize a gain or loss, de-
pending on whether the sale proceeds for the closing sale transaction are
greater or less than the cost of the option. If the Fund exercises a pur-
chased put option, the Fund will realize a gain or loss from the sale of the
underlying security, and the proceeds from such sale will be decreased by the
premium originally paid. If the Fund exercises a purchased call option, the
cost of the security which the Fund purchases upon exercise will be increased
by the premium originally paid. At February 29, 2000, there were no open
written option contracts.
5. LINE OF CREDIT FACILITY
The Fund participates in a $250,000,000 committed, unsecured revolving line
of credit facility. Under the most restrictive arrangement, the Fund must own
securities having a market value in excess of 400% of the total bank
borrowings. This facility is to be used solely for temporary or emergency
purposes. The interest rate on borrowings is based on the Federal Funds rate.
The committed facility also requires a fee to be paid by the Fund based on
the amount of the commitment. During the period ended February 29, 2000, the
Fund did not have any borrowings under any of these facilities.
19
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Notes to Financial Statements (continued)
February 29, 2000 (Unaudited)
6. OTHER MATTERS
As of February 29, 2000, the Goldman Sachs Growth and Income Strategy Portfo-
lio, the Goldman Sachs Growth Strategy Portfolio and the Goldman Sachs Ag-
gressive Growth Strategy Portfolio were beneficial owners of approximately
9%, 8% and 5% of the outstanding shares of the Fund, respectively.
7. CHANGE IN INDEPENDENT ACCOUNTANTS
On October 26, 1999 the Board of Trustees of the Fund, upon the recommenda-
tion of the Board's audit committee, determined not to retain Arthur Andersen
LLP and approved a change of the Fund's independent accountants to
PricewaterhouseCoopers LLP. For the period ended August 31, 1999 and the year
ended January 31, 1999, Arthur Andersen LLP's audit reports contained no ad-
verse opinion or disclaimer of opinion; nor were their reports qualified or
modified as to uncertainty, audit scope, or accounting principles. Further,
there were no disagreements between the Fund and Arthur Andersen LLP on ac-
counting principles or practices, financial statement disclosure or audit
scope or procedure, which if not resolved to the satisfaction of Arthur An-
dersen LLP would have caused them to make reference to the disagreement in
their report.
20
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
8. SUMMARY OF SHARE TRANSACTIONS
Share activity is as follows:
<TABLE>
<CAPTION>
For the Six Months For the Seven Months For the Year
Ended February 29, 2000 Ended Ended
(unaudited) August 31, 1999 January 31, 1999
------------------------------------------------------------------------------
Shares Dollars Shares Dollars Shares Dollars
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares
Shares sold 2,492,498 $ 26,671,415 2,397,786 $ 20,583,469 10,357,445 $ 89,405,582
Reinvestment of divi-
dends and distributions -- -- -- -- 318,269 2,176,957
Shares repurchased (2,404,641) (25,440,722) (2,788,776) (23,870,559) (5,015,931) (38,121,169)
------------------------------------------------------------------------------
87,857 1,230,693 (390,990) (3,287,090) 5,659,783 53,461,370
------------------------------------------------------------------------------------------------------
Class B Shares
Shares sold 120,735 1,388,887 54,000 468,026 73,263 638,031
Reinvestment of divi-
dends and distributions -- -- -- -- 1,969 13,468
Shares repurchased (28,577) (303,761) (13,777) (120,123) (16,489) (112,961)
------------------------------------------------------------------------------
92,158 1,085,126 40,223 347,903 58,743 538,538
------------------------------------------------------------------------------------------------------
Class C Shares
Shares sold 58,198 692,826 92,068 838,996 44,699 387,030
Reinvestment of divi-
dends and distributions -- -- -- -- 1,550 10,621
Shares repurchased (22,770) (219,303) (12,341) (114,463) (15,015) (115,705)
------------------------------------------------------------------------------
35,428 473,523 79,727 724,533 31,234 281,946
------------------------------------------------------------------------------------------------------
Institutional Shares
Shares sold 2,112,721 23,607,303 1,216,533 10,282,975 13,487,704 129,913,895
Reinvestment of divi-
dends and distributions -- -- -- -- 304,854 2,100,442
Shares repurchased (1,726,441) (19,684,903) (2,338,484) (18,913,111) (3,049,355) (24,429,866)
------------------------------------------------------------------------------
386,280 3,922,400 (1,121,951) (8,630,136) 10,743,203 107,584,471
------------------------------------------------------------------------------------------------------
Service Shares
Shares sold 154 1,361 -- -- -- --
Reinvestment of divi-
dends and distributions -- -- -- -- 6 43
Share repurchased (166) (1,468) -- -- -- --
------------------------------------------------------------------------------
(12) (107) -- -- 6 43
------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) 601,711 $ 6,711,635 (1,392,991) $(10,844,790) 16,492,969 $161,866,368
------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from
investment operations(a) Distributions to shareholders
--------------------------- ------------------------------------
Net asset Net In excess Net increase
value, investment Net realized From net of net (decrease)
beginning income and unrealized investment investment From net in net asset
of period (loss) gain (loss) income income realized gains value
FOR THE SIX MONTHS ENDED FEBRUARY 29, (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 - Class A Shares $ 9.26 $(0.04)(e) $ 2.72(e) $ -- $ -- $ -- $ 2.68
2000 - Class B Shares 9.21 (0.07)(e) 2.71(e) -- -- -- 2.64
2000 - Class C Shares 9.24 (0.06)(e) 2.71(e) -- -- -- 2.65
2000 - Institutional
Shares 9.37 -- (e) 2.74(e) -- -- -- 2.74
2000 - Service Shares 9.05 (0.01)(e) 2.64(e) -- -- -- 2.63
FOR THE SEVEN MONTHS ENDED AUGUST 31,
1999 - Class A Shares 7.04 (0.01) 2.23 -- -- -- 2.22
1999 - Class B Shares 7.03 (0.03) 2.21 -- -- -- 2.18
1999 - Class C Shares 7.05 (0.03) 2.22 -- -- -- 2.19
1999 - Institutional
Shares 7.09 0.02 2.26 -- -- -- 2.28
1999 - Service Shares 6.87 0.01 2.17 -- -- -- 2.18
FOR THE YEAR ENDED JANUARY 31,
1999 - Class A Shares 9.69 0.04 (2.40) (0.07) (0.22) -- (2.65)
1999 - Class B Shares 9.69 0.03 (2.41) (0.07) (0.21) -- (2.66)
1999 - Class C Shares 9.70 0.01 (2.39) (0.07) (0.20) -- (2.65)
1999 - Institutional
Shares 9.70 0.06 (2.36) (0.08) (0.23) -- (2.61)
1999 - Service Shares 9.69 (0.13) (2.41) (0.07) (0.21) -- (2.82)
FOR THE PERIOD ENDED JANUARY 31,
1998 - Class A Shares
(commenced December 15,
1997) 10.00 -- (0.31) -- -- -- (0.31)
1998 - Class B Shares
(commenced December 15,
1997) 10.00 -- (0.31) -- -- -- (0.31)
1998 - Class C Shares
(commenced December 15,
1997) 10.00 -- (0.30) -- -- -- (0.30)
1998 - Institutional
Shares (commenced Decem-
ber 15, 1997) 10.00 0.01 (0.31) -- -- -- (0.30)
1998 - Service Shares
(commenced December 15,
1997) 10.00 -- (0.31) -- -- -- (0.31)
------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment at the net asset value at the beginning of the
period, reinvestment of all dividends and distributions, a complete
redemption of the investment at the net asset value at the end of
the period and no sales or redemption charges. Total return would be
reduced if a sales or redemption charge were taken into account.
(c) Not annualized.
(d) Annualized.
(e) Calculated based on the average shares outstanding methodology.
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
GOLDMAN SACHS EMERGING MARKETS EQUITY FUND
<TABLE>
<CAPTION>
Ratios assuming no expense limitations
---------------------------------------
Ratio of
Net assets Ratio of net investment Ratio of Ratio of net
Net asset at end of net expenses income (loss) expenses to investment income Portfolio
value, end Total period to average to average average net (loss) to average turnover
of period return(b) (in 000s) net assets net assets assets net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$11.94 28.94%(c) $ 85,749 2.04%(d) (0.71)%(d) 2.24%(d) (0.91)%(d) 63.84%(c)
11.85 28.66(c) 2,343 2.54(d) (1.29)(d) 2.74(d) (1.49)(d) 63.84(c)
11.89 28.68(c) 1,830 2.54(d) (1.22)(d) 2.74(d) (1.42)(d) 63.84(c)
12.11 29.24(c) 145,110 1.39(d) (0.05)(d) 1.59(d) (0.25)(d) 63.84(c)
11.68 29.06(c) 2 1.89(d) (0.25)(d) 2.09(d) (0.45)(d) 63.84(c)
9.26 31.53(c) 65,698 2.04(d) (0.15)(d) 2.41(d) (0.52)(d) 63.24(c)
9.21 31.01(c) 972 2.54(d) (0.71)(d) 2.91(d) (1.08)(d) 63.24(c)
9.24 31.06(c) 1,095 2.54(d) (0.85)(d) 2.91(d) (1.22)(d) 63.24(c)
9.37 32.16(c) 108,574 1.39(d) 0.50(d) 1.76(d) 0.13(d) 63.24(c)
9.05 31.73(c) 2 1.89(d) 0.12(d) 2.26(d) (0.25)(d) 63.24(c)
7.04 (24.32) 52,704 2.09 0.80 2.53 0.36 153.67
7.03 (24.51) 459 2.59 0.19 3.03 (0.25) 153.67
7.05 (24.43) 273 2.59 0.28 3.03 (0.16) 153.67
7.09 (23.66) 90,189 1.35 1.59 1.79 1.15 153.67
6.87 (26.17) 1 1.85 (1.84) 2.29 (2.28) 153.67
9.69 (3.10)(c) 17,681 1.90(d) 0.55(d) 5.88(d) (3.43)(d) 3.35(c)
9.69 (3.10)(c) 64 2.41(d) 0.05(d) 6.39(d) (3.93)(d) 3.35(c)
9.70 (3.00)(c) 73 2.48(d) (0.27)(d) 6.46(d) (4.25)(d) 3.35(c)
9.70 (3.00)(c) 19,120 1.30(d) 0.80(d) 5.28(d) (3.18)(d) 3.35(c)
9.69 (3.10)(c) 2 2.72(d) (0.05)(d) 6.70(d) (4.03)(d) 3.35(c)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
(This page intentionally left blank)
<PAGE>
GOLDMAN SACHS FUND PROFILE
Goldman Sachs Emerging Markets Equity Fund
An Investment Idea for the Long Term
History has shown that a long-term plan that includes stocks of
emerging market countries is more likely to provide greater returns
and reduce overall portfolio volatility over time than a portfolio
that invests only in U.S.-based stocks.
Goldman Sachs Emerging Markets Equity Fund offers investors access to
the benefits associated with emerging market investing. The Fund seeks
long-term capital appreciation, primarily through equity securities of
emerging country issuers.
Target Your Needs
The Goldman Sachs Emerging Markets Equity Fund has a distinct
investment objective and a defined place on the risk/return spectrum.
As your investment objectives change, you can exchange shares within
Goldman Sachs Funds without an additional charge.* (Please note: in
general, greater returns are associated with greater risk.)
----------------------------------------------------------------------
Goldman Sachs Funds
Goldman Sachs Funds offers more than 30 investment options for global
diversification across borders, investment sytles, asset classes and
security capitalizations.
[GRAPH]
INTERNATIONAL
EQUITY
.Goldman Sachs
Emerging
Markets Equity
Fund
DOMESTIC
EQUITY
FIXED
INCOME
MONEY
MARKET
-- Lower Risk/Return Higher Risk/Return --
ASSET ALLOCATION
SPECIALTY
For More Information
To learn more about the Goldman Sachs Emerging Markets Equity Fund and
other Goldman Sachs Funds, call your investment professional today.
*The exchange privilege is subject to termination and its terms are
subject to change.
<PAGE>
GOLDMAN SACHS ASSET MANAGEMENT 32 OLD SLIP, 17TH FLOOR, NEW YORK, NEW YORK 10005
TRUSTEES OFFICERS
Ashok N. Bakhru, Chairman Douglas C. Grip, President
David B. Ford Jesse H. Cole, Vice President
Douglas C. Grip James A. Fitzpatrick, Vice President
John P. McNulty Nancy L. Mucker, Vice President
Mary P. McPherson John M. Perlowski, Treasurer
Alan A. Shuch Philip V. Giuca, Jr., Assistant Treasurer
Jackson W. Smart, Jr. Michael J. Richman, Secretary
William H. Springer Howard B. Surloff, Assistant Secretary
Richard P. Strubel Valerie A. Zondorak, Assistant Secretary
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
Investment Adviser
GOLDMAN SACHS INTERNATIONAL
Peterborough Court, 133 Fleet Street
London EC4A 2BB, England
Visit our internet address: www.gs.com/funds
This material is not authorized for distribution to prospective investors unless
preceded or accompanied by a current Prospectus. Investors should read the
Prospectus carefully before investing or sending money.
Emerging markets securities are volatile. They are subject to substantial
currency fluctuations and sudden economic and political developments. At times,
the Fund may be unable to sell certain of its portfolio securities without a
substantial drop in price, if at all.
The Fund may participate in the Initial Public Offering (IPO) market, and a
portion of the Fund's returns consequently may be attributable to its investment
in IPOs, which may have a magnified impact due to the Fund's small asset base.
As the Fund's assets grow, it is probable that the effect of the Fund's
investment in IPOs on its total returns may not be as significant.
Goldman, Sachs & Co. is the distributor of the Fund.
Copyright 2000 Goldman, Sachs & Co. All rights reserved. Date of first use:
April 30, 2000/00-528 EMESAR/6.5K/4-00
