GOLDMAN SACHS TRUST, 485APOS, 2000-11-22

GOLDMAN SACHS TRUST
485APOS, 2000-11-22

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As filed with the Securities and Exchange Commission
November 22, 2000

1933 Act Registration No. 33-17619
1940 Act Registration No. 811-5349

================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                 ____________

                                   Form N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 (X)

Post-Effective Amendment No. 68 (X)

and/or

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 (X)

Amendment No. 70 (X)

                       (Check appropriate box or boxes)
                                  __________

                              GOLDMAN SACHS TRUST
              (Exact name of registrant as specified in charter)

                               4900 Sears Tower
                         Chicago, Illinois 60606-6303
                   (Address of principal executive offices)

                        Registrant's Telephone Number,
                       including Area Code 312-655-4400
                                 ____________



Howard B. Surloff, Esq.                      Copies to:
Goldman Sachs Asset Management               Jeffrey A. Dalke, Esq.
32 Old Slip                                  Drinker Biddle & Reath LLP
New York, New York 10005                     One Logan Square


                                             18/th/ and Cherry Streets
(Name and address of agent for service)      Philadelphia, PA 19103

It is proposed that this filing will become effective (check appropriate box)

( )  Immediately upon filing pursuant to paragraph (b)
( )  On (date) pursuant to paragraph (b)

( )  60 days after filing pursuant to paragraph (a)(1)
( )  On (date) pursuant to paragraph (a)(1)

(X)  75 days after filing pursuant to paragraph (a)(2)
( )  On (date) pursuant to paragraph (a)(2) of rule 485.

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any State.

Preliminary Prospectus dated November 22, 2000

Subject to Completion

Prospectus

Class A, B and C Shares

February 5, 2001

GOLDMAN SACHS GLOBAL SECTOR FUNDS

n	Goldman Sachs Global Consumer Growth Fund

n	Goldman Sachs Global Financial Services Fund

n	Goldman Sachs Global Health Sciences Fund

n	Goldman Sachs Global Infrastructure and Resources Fund

n	Goldman Sachs Global Technology Fund

Artwork To Be Inserted

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

AN INVESTMENT IN A FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN A FUND INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.

[LOGO OF GOLDMAN SACHS]

NOT FDIC-INSURED

May Lose Value

No Bank Guarantee

General Investment
Management Approach

Goldman Sachs Asset Management (“GSAM”) and Goldman Sachs Asset Management International (“GSAMI”) are separate business units of the Investment Management Division (“IMD”) of Goldman, Sachs & Co. (“Goldman Sachs”), and together serve as the investment adviser to each Fund. Goldman Sachs Asset Management and Goldman Sachs Asset Management International are referred to in this Prospectus as the “Investment Adviser.”

GLOBAL SECTOR STYLE FUNDS

Goldman Sachs’ Global Sector Fund Philosophy:

The Investment Adviser believes that the behavior of global equity markets is changing as:

Revenues are driven by global expansion

Globalization drives companies to merge across regions and continents

Investors increasingly invest globally rather than regionally

As a result of these changes many investors are selecting stocks within global sectors rather than within regional or local sectors. This shift in investment methodology has led to the emergence of global sector allocations as an important portfolio management tool.

The Goldman Sachs Global Sector Funds leverage the resources of our global portfolio management teams. Through an integrated research process, we construct portfolios of our best worldwide ideas for each sector. Through intensive, hands-on research our global sector portfolio teams seek to identify and invest in companies with:

A strong business franchise and competitive advantages

Skillful management whose interests are aligned with shareholders

Potential to generate high returns on invested capital

Potential to drive sustainable growth through reinvestment

Attractive relative valuation

Fund Investment Objectives
and Strategies

Goldman Sachs Global Consumer

Growth Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the consumer products and services sectors.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Equity Securities. The Fund invests, under normal circumstances, at least 80% of its total assets in equity securities of companies in the consumer products and services sectors. These sectors consist of companies that derive or are expected to derive a substantial portion of their revenues from manufacturing, marketing, retailing or distributing consumer products or services. Consumer products may include beverages, tobacco, food, textiles and personal care products. Consumer services may include media, telecommunications, general retailing, travel, leisure, entertainment, hotels, real estate, consumer internet services, restaurants and publishing.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

securities of issuers in any other single country. The Fund may also invest up to 30% of its total assets in companies located in countries with emerging economies and those with less developed securities markets, including countries in Africa, Asia, Eastern Europe and Latin and South America.

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

The Investment Adviser believes that worldwide prosperity will continue to increase, which will lead to higher consumer spending and new opportunities in the consumer products and services sectors. The Fund seeks to achieve its investment objective by investing in equity securities of companies that the Investment Adviser believes are best positioned to benefit from this potential growth.

Because of its concentrated sector focus, the Fund’s investment performance will be closely tied to many factors which affect consumer products and services companies. These factors include government regulation, competition, changes in demographics and consumer tastes and economic conditions. The Fund’s net asset value (“NAV”) is more likely to have greater fluctuations than that of a fund that does not concentrate its investments in a particular industry sector.

Other. The Fund may invest in the aggregate up to 20% of its total assets in equity securities of companies outside of the consumer products and services sectors and in fixed-income securities, such as government, corporate and bank debt obligations.

Goldman Sachs

Global Financial Services Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the financial services sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Equity Securities. The Fund invests, under normal circumstances, at least 80% of its total assets in equity securities of companies in the financial services sector. This sector consists of companies that derive or are expected to derive a substantial portion of their revenues from financial services activities. Financial services companies may include companies involved in banking, investment banking/brokerage, investment management, insurance, consumer finance, mortgage lending and servicing, leasing and companies providing technological solutions and other services to financial services companies.

The Fund will invest in domestic and foreign securities and may allocate its assets among countries as determined by the Investment Adviser, as long as the Fund’s assets are invested in at least three countries. The Fund expects to invest a substantial portion of its assets in securities of companies in the developed countries of North America, Western Europe, the Pacific region, Japan, Australia and New Zealand. The Fund may invest more than 25% of its total assets in the securities of issuers located in each of the United States, Canada, Germany, Japan and the United Kingdom. Not more than 25% of the Fund’s total assets will be invested in securities of issuers in any other single country. The Fund may also invest up to 30% of its total assets in companies located in countries with emerging economies and those with less developed securities markets, including countries in Africa, Asia, Eastern Europe and Latin and South America.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

The Investment Adviser believes that global demographic change, due to the world’s aging population in developed countries, will create increasing demand for savings and pension services, boosting the growth of the financial services sector as a whole. Increasing deregulation across markets, industry consolidation as well as technological advancements such as the internet, are all factors that may contribute to the sector’s earnings growth. The Fund seeks to achieve its investment objective by investing in equity securities of companies that the Investment Adviser believes are best positioned to benefit from this potential growth.

Because of its concentrated sector focus, the Fund’s investment performance will be closely tied to many factors which affect financial services companies. These factors include economic conditions, interest rates, intense competition and government regulation. The Fund’s NAV is more likely to have greater fluctuations than that of a fund that does not concentrate its investments in a particular industry sector.

Other. The Fund may invest in the aggregate up to 20% of its total assets in equity securities of companies outside of the financial services sector and in fixed-income securities, such as government, corporate and bank debt obligations.

Goldman Sachs

Global Health Sciences Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the health sciences sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Equity Securities. The Fund invests, under normal circumstances, at least 80% of its total assets in equity securities of companies in the health sciences sector. This sector consists of companies that derive or are expected to derive a substantial portion of their revenues from activities in the health sciences sector. Health sciences companies may include companies involved in general and specialized healthcare services, biotechnology/genomics, pharmaceuticals, medical devices and supplies, hospital management and managed care services.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

The Investment Adviser believes that long-term growth opportunities exist from scientific advances in healthcare and the potential and current commercial application of products, healthcare equipment and services. These opportunities, and the demographic profile of the world’s developed countries may contribute to the growth in healthcare spending. The Fund seeks to achieve its investment objective by investing in equity securities of companies that the Investment Adviser believes are best positioned to benefit from this potential growth.

Because of its concentrated sector focus, the Fund’s investment performance will be closely tied to many factors which affect health sciences companies. These factors include intense competition and government regulation. The Fund’s NAV is more likely to have greater fluctuation than that of a fund that does not concentrate its investments in a particular industry sector.

Other. The Fund may invest in the aggregate up to 20% of its total assets in equity securities of companies outside of the health sciences sector and in fixed-income securities, such as government, corporate and bank debt obligations.

A-7

Goldman Sachs Global

Infrastructure and Resources Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the infrastructure and resources sectors.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Equity Securities. The Fund invests, under normal circumstances, at least 80% of its total assets in equity securities of companies in the infrastructure and resources sectors. These sectors consist of companies that derive or are expected to derive a substantial portion of their revenues from activities related to energy, materials, industrials and utilities. Infastructure and resources companies may include companies involved with transportation, aerospace and defense, engineering, metals, construction, oil and gas, chemicals, mining, paper, forest products, automobiles, water, power, environmental services, manufacturing, heavy machinery and electrical equipment.

The Fund will invest in domestic and foreign securities and may allocate its assets among countries as determined by the Investment Adviser, as long as the Fund’s assets are invested in at least three countries. The Fund expects to invest a substantial portion of it assets in securities of companies in the developed countries of North America, Western Europe, the Pacific region, Japan, Australia and New Zealand. The Fund may invest more that 25% of its total assets in the securities of issuers located in each of the United States, Canada, Germany, Japan and the United Kingdom. Not more that 25% of the Fund’s total assets will be invested in securities of issuers in any other single country. The Fund may also invest up to 30% of its total assets in companies located in countries with emerging economies and those with less developed securities markets, including countries in Africa, Asia, Eastern Europe and Latin and South America.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

The Investment Adviser believes many companies in the infrastructure and resources sectors experience a high level of cyclicality in their profitability. The market for these companies has a tendency to overreact to both positive and negative macroeconomic developments. There are significant opportunities to take advantage of the potential mispricing of securities from what the Investment Adviser considers to be their long-term fundamental value.

The Investment Adviser will determine the relative allocation of the Fund’s investments between the infrastructure and resources sectors, and it is possible that at times the Fund may be invested predominately or exclusively in one of these sectors but not the other.

Because of its concentrated sector focus, the Fund’s investment performance will be closely tied to many factors which affect infrastructure and resource related companies. These factors include economic conditions, the level and volatility of commodity prices and government regulation. The Fund’s NAV is more likely to have greater fluctuation than that of a fund that does not concentrate its investments in a particular industry sector.

Other. The Fund may invest in the aggregate up to 20% of its total assets in equity securities of companies outside of the infrastructure and resources sectors and in fixed-income securities, such as government, corporate and bank debt obligations.

A-9

Goldman Sachs

Global Technology Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the technology sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Equity Securities. The Fund invests, under normal circumstances, at least 80% of its total assets in equity securities of companies in the technology sector. This sector consists of companies that derive or are expected to derive a substantial portion of their revenues from technology and technology-related products and services. Technology and technology-related products and services may include products and services related to telecommunications, computer hardware and software, information services, semiconductors, the internet and electronics.

The Fund will invest in domestic and foreign securities and may allocate its assets among countries as determined by the Investment Adviser, as long as the Fund’s assets are invested in at least three countries. The Fund expects to invest a substantial portion of its assets in securities of companies in the developed countries of North America, Western Europe, the Pacific region, Japan, Australia and New Zealand. The Fund may invest more that 25% of its total assets in the securities of issuers located in each of the United States, Canada, Germany, Japan and the United Kingdom. Not more than 25% of the Fund’s total assets will be invested in securities of issuers in any other single country. The Fund may also invest up to 30% of its total assets in companies located in countries with emerging economies and those with less developed securities markets, including countries in Africa, Asia, Eastern Europe and Latin and South America.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

The Investment Adviser believes that advances in technology are providing companies throughout the world with opportunities to improve productivity, competitiveness and speed to market, and that investment in this sector offers significant long-term growth opportunities. The Fund seeks to achieve its investment objective by investing in equity securities of companies that the Investment Adviser believes are best positioned to benefit from this potential growth.

Because of its concentrated sector focus, the Fund’s investment performance will be closely tied to many factors which affect technology and technology-related products and services. These factors include intense competition, rapid obsolescence of products and government regulation. The Fund’s NAV is more likely to have greater fluctuations than that of a fund that does not concentrate its investments in a particular industry sector.

Other. The Fund may invest in the aggregate up to 20% of its total assets in equity securities of companies outside of the technology sector and in fixed-income securities, such as government, corporate and bank debt obligations.

Other Investment Practices
and Securities

The table below identifies some of the investment techniques that may (but are not required to) be used by the Funds in seeking to achieve their investment objectives. Numbers in this table show allowable usage only; for actual usage, consult the Funds’ annual and semi-annual reports. For more information see Appendix A.

10 Percent of total assets (italic type) 10 Percent of net assets (roman type) Ÿ No specific percentage limitation on usage; limited only by the objectives and strategies of the Fund	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Investment Practices

Borrowings	33 1/3	33 1/3	33 1/3	33 1/3	33 1/3

Credit, Index, Interest Rate and Mortgage Swaps*	15	15	15	15	15

Currency Swaps*	15	15	15	15	15

Cross Hedging of Currencies	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Custodial Receipts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Equity Swaps*	15	15	15	15	15

Foreign Currency Transactions	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Futures Contracts and Options on Futures Contracts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Investment Company Securities (including exchange-traded funds)	10	10	10	10	10

Options on Foreign Currencies ¹	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Options on Securities and Securities Indices ²	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Repurchase Agreements	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Securities Lending	33 1/3	33 1/3	33 1/3	33 1/3	33 1/3

Short Sales Against the Box	25	25	25	25	25

Unseasoned Companies	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Warrants and Stock Purchase Rights	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

When-Issued Securities and Forward Commitments	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

*	Limited to 15% of net assets (together with other illiquid securities) for all structured securities which are not deemed to be liquid and all swap transactions.

1	The Funds may purchase and sell call and put options.

2	The Funds may sell covered call and put options and purchase call and put options.

OTHER INVESTMENT PRACTICES AND SECURITIES

10 Percent of total assets (italic type) 10 Percent of net assets (roman type) Ÿ No specific percentage limitation on usage; limited only by the objectives and strategies of the Fund	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Investment Securities

American, European and Global Depositary Receipts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Asset-Backed and Mortgage- Backed Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Bank Obligations ^3,4	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Convertible Securities ⁵	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Corporate Debt Obligations ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Equity Securities	80+	80+	80+	80+	80+

Emerging Country Securities	30	30	30	30	30

Fixed Income Securities ⁶	20	20	20	20	20

Foreign Securities	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Foreign Government Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Non-Investment Grade Fixed Income Securities ³	^Ÿ7	^Ÿ7	^Ÿ7	^Ÿ7	^Ÿ7

Real Estate Investment Trusts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Stripped Mortgage-Backed Securities ^*, ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Structured Securities ^*	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Temporary Investments	100	100	100	100	100

U.S. Government Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

3	Limited by the amount the Fund invests in fixed-income securities.

4	Issued by U.S. or foreign banks.

5	Convertible securities purchased by the Funds use the same rating criteria for convertible and non-convertible debt securities.

6	Except as noted under “Non-Investment Grade Fixed Income Securities,” fixed-income securities are investment grade (e.g., BBB or higher by Standard & Poor’s Rating Group (“Standard & Poor’s”) or Baa or higher by Moody’s Investor Services, Inc. (“Moody’s)).

7	May be BB or lower by Standard & Poor’s or Ba or lower by Moody’s.

Principal Risks of the Funds

Loss of money is a risk of investing in each Fund. An investment in a Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The following summarizes important risks that apply to the Funds and may result in a loss of your investment. None of the Funds should be relied upon as a complete investment program. There can be no assurance that a Fund will achieve its investment objective.

Ÿ Applicable	Global Consumer Growth	Global Financial Services	Global Health Sciences	Global Infrastructure and Resources	Global Technology


Industry Concentration	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Credit/Default	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Emerging Countries	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Interest Rate	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Small Cap	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Foreign	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Derivatives	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Management	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Market	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Liquidity	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

REIT Risk	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Stock	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Geographic	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Initial Public Offering (“IPO”)	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

All Funds:

Industry Concentration Risk—The risk that, because the Funds concentrate their investments in specific industry sectors, they will be subject to greater risk of loss as a result of adverse economic, business or other developments relating to those industry sectors than if their investments were diversified across different industry sectors. This risk may cause the NAVs and performance of the Funds to be subject to abrupt changes, and may result in investor losses. Particular risks relevant to the industry sectors in which the Funds invest include the following:

PRINCIPAL RISKS OF THE FUNDS

Consumer products and services companies are particularly subject to risk of loss caused by government regulation, competition, changes in demographics and consumer tastes and economic conditions.

Financial services companies are particularly subject to risk of loss caused by economic conditions, interest rates, intense competition and government regulation.

Health sciences companies are particularly subject to risk of loss caused by intense competition and government regulation.

Infrastructure and resources companies are particularly subject to risk of loss caused by economic conditions, the level and volatility of commodity prices and government regulation.

Technology companies are particularly subject to risk of loss caused by intense competition, rapid obsolescence of products and government regulation.

n	*Credit/Default Risk*—The risk that an issuer or guarantor of fixed-income securities held by a Fund (which may have low credit ratings) may default on its obligation to pay interest and repay principal.

Emerging Countries Risk—The securities markets of Asian, Latin and South American, Eastern European, African and other emerging countries are less liquid, are especially subject to greater price volatility, have smaller market capitalizations, have less government regulation and are not subject to as extensive and frequent accounting, financial and other reporting requirements as the securities markets of more developed countries. Further, investment in equity securities of issuers located in Russia and certain other emerging countries involves risk of loss resulting from problems in share registration and custody and substantial economic and political disruptions. These risks are not normally associated with investment in more developed countries.

n	*Interest Rate Risk*—The risk that when interest rates increase, securities held by a Fund will decline in value. Long-term fixed-income securities will normally have more price volatility because of this risk than short-term fixed-income securities.

Small Cap Stock Risk—The securities of small capitalization stocks involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. Securities of such issuers may lack sufficient market liquidity to enable a Fund to effect sales at an advantageous time or without a substantial drop in price.

Foreign Risks—The risk that when a Fund invests in foreign securities, it will be subject to risk of loss not typically associated with domestic issuers. Loss may result because of less foreign government regulation, less public information and less economic, political and social stability. Loss may also result from the imposition of exchange controls, confiscations and other government restrictions. A Fund will also be subject to the risk of negative foreign currency rate fluctuations. Foreign risks will normally be greatest when a Fund invests in issuers located in emerging countries.

n	*Derivatives Risk*—The risk that loss may result from a Fund’s investments in options, futures, swaps, structured securities and other derivative instruments. These instruments may be leveraged so that small changes may produce disproportionate losses to a Fund.

n	*Management Risk*—The risk that a strategy used by the Investment Adviser may fail to produce the intended results.

n	*Market Risk*—The risk that the value of the securities in which a Fund invests may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be temporary or last for extended periods.

Liquidity Risk—The risk that a Fund will not be able to pay redemption proceeds within the time period stated in this Prospectus because of unusual market conditions, an unusually high volume of redemption requests, or other reasons. Funds that invest in non-investment grade fixed-income securities, small capitalization stocks and emerging country issuers will be especially subject to the risk that during certain periods the liquidity of particular issuers or industries, or all securities within these investment categories, will shrink or disappear suddenly and without warning as a result of adverse economic, market or political events, or adverse investor perceptions whether or not accurate. The Goldman Sachs Asset Allocation Portfolios (the “Asset Allocation Portfolios”) expect to invest a significant percentage of their assets in the Funds and other funds for which Goldman Sachs now or in the future acts as investment adviser or underwriter. Redemptions by an Asset Allocation Portfolio of its position in a Fund may further increase liquidity risk and may impact a Fund’s NAV.

REIT Risk—Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs whose underlying properties are concentrated in a particular industry or geographic region are also subject to risks affecting such industries and regions. The securities of REITs involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. Securities of such issuers may lack sufficient market liquidity to enable a Fund to effect sales of an advantageous time or without a substantial drop in price.

n	*Stock Risk*—The risk that stock prices have historically risen and fallen in periodic cycles. Recently, U.S. stock markets and certain foreign stock markets were trading at or close to record high levels. There is no guarantee that such levels will continue.

Geographic Risk—The risk that investment loss may result from developments in a particular foreign country or region. Concentration of the investments by a Fund in issuers located in a particular country or region will subject the Fund, to a greater extent than if investments were less concentrated, to the risks of adverse securities markets, exchange rates and social, political, regulatory or economic events which may occur in that country or region.

IPO Risk—The risk that the market value of IPO shares will fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk. When a Fund’s asset base is small, a significant portion of the Fund’s performance could be attributable to investments in IPOs, because such investments would have a magnified impact on the Fund. As the Fund’s assets grow, the effect of the Fund’s investments in IPOs on the Fund’s performance probably will decline, which could reduce the Fund’s performance.

More information about the Funds’ portfolio securities and investment techniques, and their associated risks, is provided in Appendix A. You should consider the investment risks discussed in this section and in Appendix A. Both are important to your investment choice.

Fund Performance

HOW THE FUNDS HAVE PERFORMED

The Funds commenced operations as of the date of this Prospectus. Therefore, no performance information is provided in this section.

Fund Fees and Expenses (Class A, B and C Shares)

This table describes the fees and expenses that you would pay if you buy and hold Class A, Class B, or Class C Shares of a Fund.

	Global Consumer Growth Fund
	Class A		Class B		Class C

Shareholder Fees
(fees paid directly from your investment):

Maximum Sales Charge (Load) Imposed on Purchases	5.5%	¹	None		None
Maximum Deferred Sales Charge (Load) ²	None	¹	5.0%	³	1.0%	⁴
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None		None		None
Redemption Fees ⁵	None		None		None
Exchange Fees ⁵	None		None		None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):⁶

Management Fees	1.10%		1.10%		1.10%
Distribution and Service (12b-1) Fees	0.50%		1.00%		1.00%
Other Expenses ⁷	1.42%		1.42%		1.42%

Total Fund Operating Expenses*	3.02%		3.52%		3.52%

See page for all other footnotes.

As a result of the current expense limitations, “Other Expenses” and “Total Fund Operating Expenses” of the Fund which are actually incurred as of the date of this Prospectus are as set forth below. The expense limitations may be terminated at any time at the option of the Investment Adviser. If this occurs, “Other Expenses” and “Total Fund Operating Expenses” may increase without shareholder approval.

	Global Consumer Growth Fund
	Class A	Class B	Class C

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets): ⁶
Management Fees	1.10%	1.10%	1.10%
Distribution and Service (12b-1) Fees	0.50%	1.00%	1.00%
Other Expenses ⁷	0.30%	0.30%	0.30%

Total Fund Operating Expenses (after current expense limitations)	1.90%	2.40%	2.40%

FUND FEES AND EXPENSES

	Global Financial Services Fund
	Class A		Class B		Class C

Shareholder Fees
(fees paid directly from your investment):

Maximum Sales Charge (Load) Imposed on Purchases	5.5%	¹	None		None
Maximum Deferred Sales Charge (Load) ²	None	¹	5.0%	³	1.0%	⁴
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None		None		None
Redemption Fees ⁵	None		None		None
Exchange Fees ⁵	None		None		None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):⁶

Management Fees	1.10%		1.10%		1.10%
Distribution and Service (12b-1) Fees	0.50%		1.00%		1.00%
Other Expenses ⁷	0.90%		0.90%		0.90%

Total Fund Operating Expenses*	2.50%		3.00%		3.00%

See page for all other footnotes.

As a result of the current expense limitations, “Other Expenses” and “Total Fund Operating Expenses” of the Fund which are actually incurred as of the date of this Prospectus are as set forth below. The waivers and expense limitations may be terminated at any time at the option of the Investment Adviser. If this occurs, “Other Expenses” and “ Total Fund Operating Expenses” may increase without shareholder approval.

	Global Financial Services Fund
	Class A	Class B	Class C

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets): ⁶
Management Fees	1.10%	1.10%	1.10%
Distribution and Service (12b-1) Fees	0.50%	1.00%	1.00%
Other Expenses ⁷	0.30%	0.30%	0.30%

Total Fund Operating Expenses (after current waivers and expense limitations)	1.90%	2.40%	2.40%

Fund Fees and Expenses continued

This table describes the fees and expenses that you would pay if you buy and hold Class A, Class B, or Class C Shares of a Fund.

	Global Health Sciences Fund
	Class A		Class B		Class C

Shareholder Fees
(fees paid directly from your investment):

Maximum Sales Charge (Load) Imposed on Purchases	5.5%	¹	None		None
Maximum Deferred Sales Charge (Load) ²	None	¹	5.0%	³	1.0%	⁴
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None		None		None
Redemption Fees ⁵	None		None		None
Exchange Fees ⁵	None		None		None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):⁶

Management Fees	1.10%		1.10%		1.10%
Distribution and Service (12b-1) Fees	0.50%		1.00%		1.00%
Other Expenses ⁷	0.87%		0.87%		0.87%

Total Fund Operating Expenses*	2.47%		2.97%		2.97%

See page for all other footnotes.

	Global Health Sciences Fund
	Class A	Class B	Class C

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets): ⁶
Management Fees	1.10%	1.10%	1.10%
Distribution and Service (12b-1) Fees	0.50%	1.00%	1.00%
Other Expenses ⁷	0.30%	0.30%	0.30%

Total Fund Operating Expenses (after current expense limitations)	1.90%	2.40%	2.40%

FUND FEES AND EXPENSES

	Global Infrastructure and Resources Fund
	Class A		Class B		Class C

Shareholder Fees
(fees paid directly from your investment):

Maximum Sales Charge (Load) Imposed on Purchases	5.5%	¹	None		None
Maximum Deferred Sales Charge (Load) ²	None	¹	5.0%	³	1.0%	⁴
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None		None		None
Redemption Fees ⁵	None		None		None
Exchange Fees ⁵	None		None		None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):⁶

Management Fees	1.10%		1.10%		1.10%
Distribution and Service (12b-1) Fees	0.50%		1.00%		1.00%
Other Expenses ⁷	1.42%		1.42%		1.42%

Total Fund Operating Expenses*	3.02%		3.52%		3.52%

See page for all other footnotes.

As a result of the current expense limitations, “Other Expenses” and “Total Fund Operating Expenses” of the Fund which are actually incurred as of the date of this Prospectus are as set forth below. The waivers and expense limitations may be terminated at any time at the option of the Investment Adviser. If this occurs, “Other Expenses” and “ Total Fund Operating Expenses” may increase without shareholder approval.

	Global Infrastructure and Resources Fund
	Class A	Class B	Class C

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets): ⁶
Management Fees	1.10%	1.10%	1.10%
Distribution and Service (12b-1) Fees	0.50%	1.00%	1.00%
Other Expenses ⁷	0.30%	0.30%	0.30%

Total Fund Operating Expenses (after current waivers and expense limitations)	1.90%	2.40%	2.40%

Fund Fees and Expenses continued

	Global Technology Fund
	Class A		Class B		Class C

Shareholder Fees
(fees paid directly from your investment):

Maximum Sales Charge (Load) Imposed on Purchases	5.5%	¹	None		None
Maximum Deferred Sales Charge (Load) ²	None	¹	5.0%	³	1.0%	⁴
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None		None		None
Redemption Fees ⁵	None		None		None
Exchange Fees ⁵	None		None		None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):⁶

Management Fees	1.10%		1.10%		1.10%
Distribution and Service (12b-1) Fees	0.50%		1.00%		1.00%
Other Expenses ⁷	0.92%		0.92%		0.92%

Total Fund Operating Expenses*	2.52%		3.02%		3.02%

See page for all other footnotes.

As a result of the current expense limitations, “Other Expenses” and “Total Fund Operating Expenses” of the Fund which are actually incurred as of the date of this Prospectus are as set forth below. The waivers and expense limitations may be terminated at any time at the option of the Investment Adviser. If this occurs, “Other Expenses” and “ Total Fund Operating Expenses” may increase without shareholder approval.

	Global Technology Fund
	Class A	Class B	Class C

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets): ⁶
Management Fees	1.10%	1.10%	1.10%
Distribution and Service (12b-1) Fees	0.50%	1.00%	1.00%
Other Expenses ⁷	0.30%	0.30%	0.30%

Total Fund Operating Expenses (after current waivers and expense limitations)	1.90%	2.40%	2.40%

FUND FEES AND EXPENSES

The maximum sales charge is a percentage of the offering price. A contingent deferred sales charge (“CDSC”) of 1% is imposed on certain redemptions (within 18 months of purchase) of Class A Shares sold without an initial sales charge as part of an investment of $1 million or more.

The maximum CDSC is a percentage of the lesser of the NAV at the time of the redemption or the NAV when the shares were originally purchased.

A CDSC is imposed upon Class B Shares redeemed within six years of purchase at a rate of 5% in the first year, declining to 1% in the sixth year, and eliminated thereafter.

⁴

A CDSC of 1% is imposed on Class C Shares redeemed within 12 months of purchase.

⁵

A transaction fee of $7.50 may be charged for redemption proceeds paid by wire. In addition to free reinvestments of dividends and distributions in shares of other Goldman Sachs Funds or shares of the Goldman Sachs Institutional Liquid Assets Portfolios (the “ILA Portfolios”) and free automatic exchanges pursuant to the Automatic Exchange Program, six free exchanges are permitted in each 12-month period. A fee of $12.50 may be charged for each subsequent exchange during such period.

⁶

Each Fund’s expenses are estimated for the current fiscal year.

⁷

“Other Expenses” include transfer agency fees equal, on an annualized basis, to 0.19% of the average daily net assets of each Fund’s Class A, B and C Shares, plus all other ordinary expenses not detailed above. The Investment Adviser has voluntarily agreed to reduce or limit “Other Expenses” (excluding management fees, distribution and service fees, transfer agency fees, taxes, interest and brokerage fees and litigation, indemnification and other extraordinary expenses) to the following percentages of each Fund’s average daily net assets, respectively:

Fund		Other Expenses

Global Consumer Growth		0.11%

Global Financial Services		0.11%

Global Health Sciences		0.11%

Global Infrastructure and Resources		0.11%

Global Technology		0.11%

Example

The following Example is intended to help you compare the cost of investing in a Fund (without the expense limitations) with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Class A, B or C Shares of a Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that a Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

Fund	1 Year	3 Years

Global Consumer Growth
Class A Shares	$4,334	$7,362
Class B Shares
– Assuming complete redemption at end of period	$ 855	$1,380
– Assuming no redemption	$ 355	$1,080
Class C Shares
– Assuming complete redemption at end of period	$ 455	$1,080
– Assuming no redemption	$ 355	$1,080

Global Financial Services
Class A Shares	$ 789	$1,286
Class B Shares
– Assuming complete redemption at end of period	$ 803	$1,227
– Assuming no redemption	$ 303	$ 927
Class C Shares
– Assuming complete redemption at end of period	$ 403	$ 927
– Assuming no redemption	$ 303	$ 927

Global Health Sciences
Class A Shares	$ 786	$1,277
Class B Shares
– Assuming complete redemption at end of period	$ 800	$1,218
– Assuming no redemption	$ 300	$ 918
Class C Shares
– Assuming complete redemption at end of period	$ 400	$ 918
– Assuming no redemption	$ 300	$ 918

FUND FEES AND EXPENSES

Fund	1 Year	3 Years

Global Infrastructure and Resources
Class A Shares	$838	$1,432
Class B Shares
– Assuming complete redemption at end of period	$855	$1,380
– Assuming no redemption	$355	$1,080
Class C Shares
– Assuming complete redemption at end of period	$455	$1,080
– Assuming no redemption	$355	$1,080

Global Technology
Class A Shares	$791	$1,291
Class B Shares
– Assuming complete redemption at end of period	$805	$1,233
– Assuming no redemption	$305	$ 933
Class C Shares
– Assuming complete redemption at end of period	$405	$ 933
– Assuming no redemption	$305	$ 933

The hypothetical example assumes that a CDSC will not apply to redemptions of Class A Shares within the first 18 months.

Certain institutions that sell Fund shares and/or their salespersons may receive other compensation in connection with the sale and distribution of Class A, Class B and Class C Shares for services to their customers’ accounts and/or the Funds. For additional information regarding such compensation, see “What Should I Know When I Purchase Shares Through An Authorized Dealer?”

Service Providers

INVESTMENT ADVISER

Investment Adviser

GSAM		GSAMI
32 Old Slip		133 Peterborough Court
New York, New York 10005		London, England EC4A 2BB

GSAM and GSAMI serve as the investment adviser to each Fund.

GSAM and GSAMI are separate business units of IMD of Goldman Sachs. Goldman Sachs registered as an investment adviser in 1981. GSAMI, a member of the Investment Management Regulatory Organization Limited since 1990 and a registered investment adviser since 1991, is an affiliate of Goldman Sachs. As of September 30, 2000, GSAM and GSAMI, along with other units of IMD, had assets under management of $281.3 billion.

The Investment Adviser provides day-to-day advice regarding the Funds’ portfolio transactions. The Investment Adviser makes the investment decisions for the Funds and places purchase and sale orders for the Funds’ portfolio transactions in U.S. and foreign markets. As permitted by applicable law, these orders may be directed to any brokers, including Goldman Sachs and its affiliates. While the Investment Adviser is ultimately responsible for the management of the Funds, it is able to draw upon the research and expertise of its asset management affiliates for portfolio decisions and management with respect to certain portfolio securities. In addition, the Investment Adviser has access to the research and certain proprietary technical models developed by Goldman Sachs, and will apply quantitative and qualitative analysis in determining the appropriate allocations among categories of issuers and types of securities.

The Investment Adviser also performs the following additional services for the Funds:

Supervises all non-advisory operations of the Funds

Provides personnel to perform necessary executive, administrative and clerical services to the Funds

Arranges for the preparation of all required tax returns, reports to shareholders, prospectuses and statements of additional information and other reports filed with the Securities and Exchange Commission (the “SEC”) and other regulatory authorities

Maintains the records of each Fund

Provides office space and all necessary office equipment and services

MANAGEMENT FEES

As compensation for its services and its assumption of certain expenses, the Investment Adviser is entitled to the following fees, computed daily and payable monthly, at the annual rates (as a percentage of each respective Fund’s average daily net assets) listed below:

		Contractual Rate

Global Consumer Growth		1.10%

Global Financial Services		1.10%

Global Health Sciences		1.10%

Global Infrastructure and Resources		1.10%

Global Technology		1.10%

The Investment Adviser may voluntarily waive a portion of its advisory fee from time to time, and may discontinue any voluntary waiver at any time at its discretion.

FUND MANAGERS

M. Roch Hillenbrand, a Managing Director of Goldman Sachs since 1997, is the Head of Global Equities for GSAM, overseeing the United States, Europe, Japan, and non-Japan Asia. In this capacity, he is responsible for managing the group as it defines and implements global portfolio management processes that are consistent, reliable and predictable. Since 1981, Mr. Hillenbrand has been President of
Commodities Corporation LLC, of which Goldman Sachs is the parent company. Over the course of his 19-year career at Commodities Corporation, Mr. Hillenbrand has had extensive experience in dealing with internal and external investment managers who have managed a range of futures and equities strategies across multiple markets, using a variety of styles.

SERVICE PROVIDERS

GLOBAL CONSUMER GROWTH TEAM

The portfolio managers leverage the fundamental research and local market presence of the 29 member Global Consumer Growth Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL CONSUMER GROWTH FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Gregory H. Ekizian Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Ekizian joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1990 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

David G. Shell Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Shell joined the Investment Adviser as a portfolio manager in 1997. From 1987 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Rory Bateman Executive Director Portfolio Manager	GSAMI—London	Since 2001	Mr. Bateman joined the Investment Adviser as a research analyst in 1996 and was a portfolio manager with the European Management Group. From 1995 to 1996, he was an analyst with CIN Management.

GLOBAL FINANCIAL SERVICES TEAM

The portfolio managers leverage the fundamental research and local market presence of the 13 member Global Financial Services Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL FINANCIAL SERVICES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Sunreil Mahindru Executive Director Senior Portfolio Manager	GSAMI—London	Since 2001	Mr. Mahindru joined the Investment Adviser as a portfolio manager in 1996 and is now a senior portfolio manager with the United Kingdom Portfolio Management Group. From 1993 to 1996, he was an analyst at CIN Management.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Shogo Maeda Managing Director Senior Portfolio Manager	GSAMI— Tokyo	Since 2001	Mr. Maeda joined the Investment Adviser as a portfolio manager in 1994. From 1987 to 1994, he worked at Nomura Investment Management Incorporated as a Senior Portfolio Manager.

GLOBAL HEALTH SCIENCES TEAM

The portfolio managers leverage the fundamental research and local market presence of the 21 member Global Health Sciences Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL HEALTH SCIENCES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Gregory H. Ekizian Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Ekizian joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1990 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

Stuart McPherson Executive Director Senior Portfolio Manager	GSAMI— London	Since 2001	Mr. McPherson joined the Investment Adviser as a senior portfolio manager in 1996. From 1987 to 1996, he worked as both an U.S. equity analyst and an equity portfolio manager for CIN Management.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Miyako Shibamoto Vice President Portfolio Manager	GSAMI— Tokyo	Since 2001	Ms. Shibamoto joined the Investment Adviser as a member of the Japanese Equity team in March 1998. From 1993 to 1994, she was an Assistant Vice President and from 1994 to 1998, she was a Vice President at Scudder Stevens and Clark (Japan).

SERVICE PROVIDERS

GLOBAL INFRASTRUCTURE AND RESOURCES TEAM

The portfolio managers leverage the fundamental research and local market presence of the 18 member Global Infrastructure and Resources Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL INFRASTRUCTURE AND RESOURCES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Julian Abel Executive Director Portfolio Manager	GSAMI— London	Since 2001	Mr. Abel joined the Investment Adviser in 1996 as a senior portfolio manager with the UK and European Equity Team. Prior to joining Goldman Sachs, he spent twelve years at CIN Management.

Kamran Baig Executive Director Portfolio Manager	GSAMI— London	Since 2001	Mr. Baig joined the Investment Adviser as a senior portfolio manager in the Pan-European Institutional Portfolio Management Group in 2000. From 1992 to 2000, he was a senior industry research analyst for Alliance Capital Management.

GLOBAL TECHNOLOGY TEAM

The portfolio managers leverage the fundamental research and local market presence of the 21 member Global Technology Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL TECHNOLOGY FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Robert G. Collins Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Collins joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1991 to 1997, he was a portfolio manager at Liberty.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Tara Connolly Executive Director Senior Portfolio Manager	GSAMI— London	Since 2001	Ms. Connolly joined the Investment Adviser in 1997 as a research analyst and is a senior portfolio manager for the Goldman Sachs Technology Portfolio, a foreign fund. Prior to this, she spent three years with Goldman Sachs’ Investment Banking Division in New York and was a consultant at the Wharton Small Business Development Center.

Hadi Kabalan Associate Portfolio Manager	GSAMI— London	Since 2001	Mr. Kabalan joined the Investment Adviser in April 1997 as a research analyst and is a portfolio manager for the Goldman Sachs Technology Portfolio, a foreign fund. From December 1996 to April 1997, he was an analyst in the discretionary investment private banking area of Citibank.

Scott Kolar Vice President Senior Portfolio Manager	GSAM— Tampa	Since 2001	Mr. Kolar joined the Investment Adviser as an equity analyst in 1997 and became a portfolio manager in 1999. From 1994 to 1997, he was an equity analyst and information systems specialist at Liberty.

David G. Shell Managing Director Senior Portfolio Manager	GSAM— Tampa	Since 2001	Mr. Shell joined the Investment Adviser as a portfolio manager in 1997. From 1987 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

DISTRIBUTOR AND TRANSFER AGENT

Goldman Sachs, 85 Broad Street, New York, New York 10004, serves as the exclusive distributor (the “Distributor”) of each Fund’s shares. Goldman Sachs, 4900 Sears Tower, Chicago, Illinois 60606-6372, also serves as the Funds’ transfer agent (the “Transfer Agent”) and, as such, performs various shareholder servicing functions.

From time to time, Goldman Sachs or any of its affiliates may purchase and hold shares of the Funds. Goldman Sachs reserves the right to redeem at any time some or all of the shares acquired for its own account.

SERVICE PROVIDERS

ACTIVITIES OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER ACCOUNTS MANAGED BY GOLDMAN SACHS

The involvement of the Investment Adviser, Goldman Sachs and their affiliates in the management of, or their interest in, other accounts and other activities of Goldman Sachs may present conflicts of interest with respect to a Fund or limit a Fund’s investment activities. Goldman Sachs and its affiliates engage in proprietary trading and advise accounts and funds which have investment objectives similar to those of the Funds and/or which engage in and compete for transactions in the same types of securities, currencies and instruments as the Funds. Goldman Sachs and its affiliates will not have any obligation to make available any information regarding their proprietary activities or strategies, or the activities or strategies used for other accounts managed by them, for the benefit of the management of the Funds. The results of a Fund’s investment activities, therefore, may differ from those of Goldman Sachs and its affiliates, and it is possible that a Fund could sustain losses during periods in which Goldman Sachs and its affiliates and other accounts achieve significant profits on their trading for proprietary or other accounts. In addition, the Funds may, from time to time, enter into transactions in which other clients of Goldman Sachs have an adverse interest. A Fund’s activities may be limited because of regulatory restrictions applicable to Goldman Sachs and its affiliates, and/or their internal policies designed to comply with such restrictions.

Dividends

Each Fund pays dividends from its net investment income and capital gain net income. You may choose to have dividends paid in:

Cash

n	Additional shares of the same class of the same Fund

n	Shares of the same or an equivalent class of another Goldman Sachs Fund. Special restrictions may apply for certain ILA Portfolios. See the Additional Statement.

You may indicate your election on your Account Application. Any changes may be submitted in writing to Goldman Sachs at any time before the record date for a particular dividend. If you do not indicate any choice, dividends will be reinvested automatically in the applicable Fund.

The election to reinvest dividends in additional shares will not affect the tax treatment of such dividends, which will be treated as received by you and then used to purchase the shares.

Dividends from net investment income and capital gain net income are declared and paid annually by each Fund.

The Funds’ investments in foreign securities may be subject to foreign withholding taxes. Under certain circumstances, the Funds may elect to pass-through these taxes to you. If this election is made, a proportionate amount of such taxes will constitute a distribution to you, which would allow you either (1) to credit such proportionate amount of foreign taxes against your U.S. federal income tax liability or (2) to take such amount as an itemized deduction.

From time to time a portion of a Fund’s dividends may constitute a return of capital.

At the time of an investor’s purchase of shares of a Fund, a portion of the NAV per share may be represented by undistributed income or undistributed realized appreciation of the Fund’s portfolio securities. Therefore, subsequent distributions on such shares from such income or realized appreciation may be taxable to you even if the NAV of the shares is, as a result of the distributions, reduced below the cost of such shares and the distributions (or portions thereof) represent a return of a portion of the purchase price.

Shareholder Guide

The following section will provide you with answers to some of the most often asked questions regarding buying and selling the Funds’ shares.

HOW TO BUY SHARES

How Can I Purchase Class A, Class B And Class C Shares Of The Funds?

You may purchase shares of the Funds through:

Goldman Sachs;

Authorized Dealers; or

Directly from Goldman Sachs Trust (the “Trust”).

In order to make an initial investment in a Fund, you must furnish to the Fund, Goldman Sachs or your Authorized Dealer the information in the Account Application.

To Open an Account:

Complete the Account Application

Mail your payment and Account Application to:

Your Authorized Dealer

–

Purchases by check or Federal Reserve draft should be made payable to your Authorized Dealer

–

Your Authorized Dealer is responsible for forwarding payment promptly (within three business days) to the Fund

Goldman Sachs Funds c/o National Financial Data Services, Inc. (“NFDS”), P.O. Box 219711, Kansas City, MO 64121-9711

–

Purchases by check or Federal Reserve draft should be made payable to Goldman Sachs Funds – (Name of Fund and Class of Shares)

–

NFDS will not accept a check drawn on a foreign bank, a third-party check, cash, money orders, travelers checques or credit card checks

–

Federal funds wire, Automated Clearing House Network (“ACH”) transfer or bank wires should be sent to State Street Bank and Trust Company (“State Street”) (each Fund’s custodian). Please call the Funds at 1-800-526-7384 to get detailed instructions on how to wire your money.

SHAREHOLDER GUIDE

What Is My Minimum Investment In The Funds?

	Initial	Additional

Regular Accounts	$1,000	$50

Tax-Sheltered Retirement Plans (excluding SIMPLE IRAs and Education IRAs)	$250	$50

Uniform Gift to Minors Act Accounts/Uniform Transfer to Minors Act Accounts	$250	$50

403(b) Plan Accounts	$200	$50

SIMPLE IRAs and Education IRAs	$50	$50

Automatic Investment Plan Accounts	$50	$50

What Alternative Sales Arrangements Are Available?

The Funds offer three classes of shares through this Prospectus.



Maximum Amount You Can Buy In The Aggregate Across Funds	Class A	No limit

	Class B	$250,000

	Class C	$1,000,000

Initial Sales Charge	Class A	Applies to purchases of less than $1 million— varies by size of investment with a maximum of 5.5%

	Class B	None

	Class C	None

CDSC	Class A	1.00% on certain investments of $1 million or more if you sell within 18 months

	Class B	6 year declining CDSC with a maximum of 5%

	Class C	1% if shares are redeemed within 12 months of purchase

Conversion Feature	Class A	None

	Class B	Class B Shares convert to Class A Shares after 8 years

	Class C	None

What Else Should I Know About Share Purchases?

The Trust reserves the right to:

Refuse to open an account if you fail to (i) provide a social security number or other taxpayer identification number; or (ii) certify that such number is correct (if required to do so under applicable law).

Reject or restrict any purchase or exchange order by a particular purchaser (or group of related purchasers). This may occur, for example, when a pattern of frequent purchases, sales or exchanges of shares of a Fund is evident, or if purchases, sales or exchanges are, or a subsequent abrupt redemption might be, of a size that would disrupt management of a Fund.

Close a Fund to new investors from time to time and reopen any such Fund whenever it is deemed appropriate by a Fund’s Investment Adviser.

Modify or waive the minimum investment amounts.

Modify the manner in which shares are offered.

Modify the sales charge rates applicable to future purchases of shares.

The Funds may allow you to purchase shares with securities instead of cash if consistent with a Fund’s investment policies and operations and if approved by the Fund’s Investment Adviser.

How Are Shares Priced?

The price you pay or receive when you buy, sell or exchange shares is determined by a Fund’s NAV and share class. Each class calculates its NAV as follows:

		(Value of Assets of the Class) – (Liabilities of the Class) Number of Outstanding Shares of the Class
	NAV =

The Funds’ investments are valued based on market quotations or, if accurate quotations are not readily available, the fair value of the Fund’s investments may be determined in good faith under procedures established by the Trustees.

NAV per share of each share class is calculated by the Fund’s custodian on each business day as of the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. New York time). Fund shares will not be priced on any day the New York Stock Exchange is closed.

When you buy shares, you pay the NAV next calculated after the Funds receive your order in proper form, plus any applicable sales charge.

When you sell shares, you receive the NAV next calculated after the Funds receive your order in proper form, less any applicable CDSC.

Note: The time at which transactions and shares are priced and the time by which orders must be received may be changed in case of an emergency or if regular trading on the New York Stock Exchange is stopped at a time other than 4:00 p.m. New York time.

Foreign securities may trade in their local markets on days a Fund is closed. As a result, if a Fund holds foreign securities, its NAV may be impacted on days when investors may not purchase or redeem Fund shares.

SHAREHOLDER GUIDE

In addition, the impact of events that occur after the publication of market quotations used by a Fund to price its securities (for example, in foreign markets), but before the close of regular trading on the New York Stock Exchange will normally not be reflected in a Fund’s next determined NAV unless the Trust, in its discretion, makes an adjustment in light of the nature and materiality of the event, its effect on Fund operations and other relevant factors.

COMMON QUESTIONS ABOUT THE PURCHASE OF CLASS A SHARES

What Is The Offering Price Of Class A Shares?

The offering price of Class A Shares of each Fund is the next determined NAV per share plus an initial sales charge paid to Goldman Sachs at the time of purchase of shares. The sales charge varies depending upon the amount you purchase. In some cases, described below, the initial sales charge may be eliminated altogether, and the offering price will be the NAV per share. The current sales charges and commissions paid to Authorized Dealers are as follows:

Amount of Purchase (including sales charge, if any)	Sales Charge as Percentage of Offering Price	Sales Charge as Percentage of Net Amount Invested	Maximum Dealer Allowance as Percentage of Offering Price*

Less than $50,000	5.50%	5.82%	5.00%
$50,000 up to (but less than) $100,000	4.75	4.99	4.00
$100,000 up to (but less than) $250,000	3.75	3.90	3.00
$250,000 up to (but less than) $500,000	2.75	2.83	2.25
$500,000 up to (but less than) $1 million	2.00	2.04	1.75
$1 million or more	0.00**	0.00**	***

Dealer’s allowance may be changed periodically. During special promotions, the entire sales charge may be allowed to Authorized Dealers. Authorized Dealers to whom substantially the entire sales charge is allowed may be deemed to be “underwriters” under the Securities Act of 1933.

No sales charge is payable at the time of purchase of Class A Shares of $1 million or more, but a CDSC of 1% may be imposed in the event of certain redemptions within 18 months of purchase.

***

The Distributor may pay a one-time commission to Authorized Dealers who initiate or are responsible for purchases of $1 million or more of shares of the Funds equal to 1.00% of the amount under $3 million, 0.50% of the next $2 million, and 0.25% thereafter. The Distributor may also pay, with respect to all or a portion of the amount purchased, a commission in accordance with the foregoing schedule to Authorized Dealers who initiate or are responsible for purchases of $500,000 or more by certain pension and profit sharing plans, pension funds and other company-sponsored benefit plans investing in the Funds which satisfy the criteria set forth below in “When Are Class A Shares Not Subject To A Sales Load?” or $1 million or more by certain “wrap” accounts. Purchases by such plans will be made at NAV with no initial sales charge, but if all of the shares held are redeemed within 18 months after the end of the calendar month in which such purchase was made, a CDSC of 1% may be imposed upon the plan sponsor or the third party administrator. In addition, Authorized Dealers will remit to the Distributor such payments received in connection with “wrap” accounts in the event that shares are redeemed within 18 months after the end of the calendar month in which the purchase was made.

What Else Do I Need To Know About Class A Shares’ CDSC?

Purchases of $1 million or more of Class A Shares will be made at NAV with no initial sales charge. However, if you redeem shares within 18 months after the end of the calendar month in which the purchase was made, excluding any period of time in which the shares were exchanged into and remained invested in an equivalent class of an ILA Portfolio, a CDSC of 1% may be imposed. The CDSC may not be imposed if your Authorized Dealer enters into an agreement with the Distributor to return all or an applicable prorated portion of its commission to the Distributor. The CDSC is waived on redemptions in certain circumstances. See “In What Situations May The CDSC On Class A, B Or C Shares Be Waived Or Reduced?” below.

When Are Class A Shares Not Subject To A Sales Load?

Class A Shares of the Funds may be sold at NAV without payment of any sales charge to the following individuals and entities:

Goldman Sachs, its affiliates or their respective officers, partners, directors or employees (including retired employees and former partners), any partnership of which Goldman Sachs is a general partner, any Trustee or officer of the Trust and designated family members of any of these individuals;

Qualified retirement plans of Goldman Sachs;

Trustees or directors of investment companies for which Goldman Sachs or an affiliate acts as sponsor;

Any employee or registered representative of any Authorized Dealer or their respective spouses, children and parents;

Banks, trust companies or other types of depository institutions investing for their own account or investing for discretionary or non-discretionary accounts;

Any state, county or city, or any instrumentality, department, authority or agency thereof, which is prohibited by applicable investment laws from paying a sales charge or commission in connection with the purchase of shares of a Fund;

Pension and profit sharing plans, pension funds and other company-sponsored benefit plans that:

Buy shares of Goldman Sachs Funds worth $500,000 or more; or

Have 100 or more eligible employees at the time of purchase; or

Certify that they expect to have annual plan purchases of shares of Goldman Sachs Funds of $200,000 or more; or

Are provided administrative services by certain third-party administrators that have entered into a special service arrangement with Goldman Sachs relating to such plans; or

Have at the time of purchase aggregate assets of at least $2,000,000;

SHAREHOLDER GUIDE

“Wrap” accounts for the benefit of clients of broker-dealers, financial institutions or financial planners, provided they have entered into an agreement with GSAM specifying aggregate minimums and certain operating policies and standards;

Registered investment advisers investing for accounts for which they receive asset-based fees;

Accounts over which GSAM or its advisory affiliates have investment discretion; or

Shareholders receiving distributions from a qualified retirement plan invested in the Goldman Sachs Funds and reinvesting such proceeds in a Goldman Sachs IRA.

You must certify eligibility for any of the above exemptions on your Account Application and notify the Fund if you no longer are eligible for the exemption. The Fund will grant you an exemption subject to confirmation of your entitlement. You may be charged a fee if you effect your transactions through a broker or agent.

How Can The Sales Charge On Class A Shares Be Reduced?

Right of Accumulation: When buying Class A Shares in Goldman Sachs Funds, your current aggregate investment determines the initial sales load you pay. You may qualify for reduced sales charges when the current market value of holdings (shares at current offering price), plus new purchases, reaches $50,000 or more. Class A Shares of any of the Goldman Sachs Funds may be combined under the Right of Accumulation. To qualify for a reduced sales load, you or your Authorized Dealer must notify the Funds’ Transfer Agent at the time of investment that a quantity discount is applicable. Use of this service is subject to a check of appropriate records. The Additional Statement has more information about the Right of Accumulation.

Statement of Intention: You may obtain a reduced sales charge by means of a written Statement of Intention which expresses your non-binding commitment to invest in the aggregate $50,000 or more (not counting reinvestments of dividends and distributions) within a period of 13 months in Class A Shares of one or more Goldman Sachs Fund. Any investments you make during the period will receive the discounted sales load based on the full amount of your investment commitment. If the investment commitment of the Statement of Intention is not met prior to the expiration of the 13-month period, the entire amount will be subject to the higher applicable sales charge. By signing the Statement of Intention, you authorize the Transfer Agent to escrow and redeem Class A Shares in your account to pay this additional charge. The Additional Statement has more information about the Statement of Intention, which you should read carefully.

COMMON QUESTIONS ABOUT THE PURCHASE OF CLASS B SHARES

What Is The Offering Price Of Class B Shares?

You may purchase Class B Shares of the Funds at the next determined NAV without an initial sales charge. However, Class B Shares redeemed within six years of purchase will be subject to a CDSC at the rates shown in the table below based on how long you held your shares.

The CDSC schedule is as follows:

Year Since Purchase

CDSC as a Percentage of Dollar Amount Subject to CDSC

First

Second

Third

Fourth

Fifth

Sixth

Seventh and thereafter

None

Proceeds from the CDSC are payable to the Distributor and may be used in whole or in part to defray the Distributor’s expenses related to providing distribution-related services to the Funds in connection with the sale of Class B Shares, including the payment of compensation to Authorized Dealers. A commission equal to 4% of the amount invested is paid to Authorized Dealers.

What Should I Know About The Automatic Conversion Of Class B Shares?

Class B Shares of a Fund will automatically convert into Class A Shares of the same Fund at the end of the calendar quarter that is eight years after the purchase date.

If you acquire Class B Shares of a Fund by exchange from Class B Shares of another Goldman Sachs Fund, your Class B Shares will convert into Class A Shares of such Fund based on the date of the initial purchase and the CDSC schedule of that purchase.

If you acquire Class B Shares through reinvestment of distributions, your Class B Shares will convert into Class A Shares based on the date of the initial purchase of the shares on which the distribution was paid.

The conversion of Class B Shares to Class A Shares will not occur at any time the Funds are advised that such conversions may constitute taxable events for federal tax purposes, which the Funds believe is unlikely. If conversions do not occur as a result of possible taxability, Class B Shares would continue to be subject to higher expenses than Class A Shares for an indeterminate period.

A COMMON QUESTION ABOUT THE PURCHASE OF CLASS C SHARES

What Is The Offering Price Of Class C Shares?

You may purchase Class C Shares of the Funds at the next determined NAV without paying an initial sales charge. However, if you redeem Class C Shares within 12 months of purchase, a CDSC of 1% will normally be deducted from the redemption proceeds; provided that in connection with purchases by pension and profit sharing plans, pension funds and other company-sponsored benefit plans, where all of the Class C Shares are redeemed within 12 months of purchase, a CDSC of 1% may be imposed upon the plan sponsor or third party administrator.

Proceeds from the CDSC are payable to the Distributor and may be used in whole or in part to defray the Distributor’s expenses related to providing distribution-related services to the Funds in connection with the sale of Class C Shares, including the payment of compensation to Authorized Dealers. An amount equal to 1% of the amount invested is normally paid by the Distributor to Authorized Dealers.

COMMON QUESTIONS APPLICABLE TO THE PURCHASE OF CLASS A, B AND C SHARES

What Else Do I Need To Know About The CDSC On Class A, B Or C Shares?

The CDSC is based on the lesser of the NAV of the shares at the time of redemption or the original offering price (which is the original NAV).

No CDSC is charged on shares acquired from reinvested dividends or capital gains distributions.

No CDSC is charged on the per share appreciation of your account over the initial purchase price.

When counting the number of months since a purchase of Class B or Class C Shares was made, all payments made during a month will be combined and considered to have been made on the first day of that month.

To keep your CDSC as low as possible, each time you place a request to sell shares, the Funds will first sell any shares in your account that do not carry a CDSC and then the shares in your account that have been held the longest.

In What Situations May The CDSC On Class A, B Or C Shares Be Waived Or Reduced?

The CDSC on Class A, Class B and Class C Shares that are subject to a CDSC may be waived or reduced if the redemption relates to:

Retirement distributions or loans to participants or beneficiaries from pension and profit sharing plans, pension funds and other company-sponsored benefit plans (each a “Retirement Plan”);

The death or disability (as defined in Section 72(m)(7) of the Internal Revenue Code of 1986, as amended (the “Code”)) of a participant or beneficiary in a Retirement Plan;

Hardship withdrawals by a participant or beneficiary in a Retirement Plan;

Satisfying the minimum distribution requirements of the Code;

Establishing “substantially equal periodic payments” as described under Section 72(t)(2) of the Code;

The separation from service by a participant or beneficiary in a Retirement Plan;

The death or disability (as defined in Section 72(m)(7) of the Code) of a shareholder if the redemption is made within one year of the event;

Excess contributions distributed from a Retirement Plan;

Distributions from a qualified Retirement Plan invested in the Goldman Sachs Funds which are being rolled over to a Goldman Sachs IRA; or

Redemption proceeds which are to be reinvested in accounts or non-registered products over which GSAM or its advisory affiliates have investment discretion.

In addition, Class A, B and C Shares subject to a systematic withdrawal plan may be redeemed without a CDSC. The Funds reserve the right to limit such redemptions, on an annual basis, to 12% each of the value of your Class B and C Shares and 10% of the value of your Class A Shares.

How Do I Decide Whether To Buy Class A, B Or C Shares?

The decision as to which Class to purchase depends on the amount you invest, the intended length of the investment and your personal situation.

Class A Shares. If you are making an investment of $50,000 or more that qualifies for a reduced sales charge, you should consider purchasing Class A Shares.

Class B Shares. If you plan to hold your investment for at least six years and would prefer not to pay an initial sales charge, you might consider purchasing Class B Shares. By not paying a front-end sales charge, your entire investment in Class B Shares is available to work for you from the time you make your initial investment. However, the distribution and service fee paid by Class B Shares will cause your Class B Shares (until conversion to Class A Shares) to have a higher expense ratio, and thus lower performance and lower dividend payments (to the extent dividends are paid) than Class A Shares. A maximum purchase limitation of $250,000 in the aggregate normally applies to Class B Shares.

Class C Shares. If you are unsure of the length of your investment or plan to hold your investment for less than six years and would prefer not to pay an initial sales charge, you may prefer Class C Shares. By not paying a front-end sales charge, your entire investment in Class C Shares is available to work for you from the time you make your initial investment. However, the distribution and service fee paid by Class C Shares will cause your Class C Shares to have a higher expense ratio, and thus lower performance and lower dividend payments (to the extent dividends are paid) than Class A Shares (or Class B Shares after conversion to Class A Shares).

Although Class C Shares are subject to a CDSC for only 12 months, Class C Shares do not have the conversion feature applicable to Class B Shares and your investment will therefore pay higher distribution fees indefinitely.

A maximum purchase limitation of $1,000,000 in the aggregate normally applies to purchases of Class C Shares.

Note: Authorized Dealers may receive different compensation for selling Class A, Class B or Class C Shares.

In addition to Class A, Class B and Class C Shares, each Fund also offers other classes of shares to investors. These other share classes are subject to different fees and expenses (which affect performance), have different minimum investment requirements and are entitled to different services. Information regarding these other share classes may be obtained from your sales representative or from Goldman Sachs by calling the number on the back cover of this Prospectus.

HOW TO SELL SHARES

How Can I Sell Class A, Class B And Class C Shares Of The Funds?

You may arrange to take money out of your account by selling (redeeming) some or all of your shares. Each Fund will redeem its shares upon request on any business day at the NAV next determined after receipt of such request in proper form, subject to any applicable CDSC. You may request that redemption proceeds be sent to you by check or by wire (if the wire instructions are on record). Redemptions may be requested in writing or by telephone.

Instructions For Redemptions:


By Writing:	n Write a letter of instruction that includes:
		n Your name(s) and signature(s) n Your account number n The Fund names and Class of Shares n The dollar amount you want to sell n How and where to send the proceeds




	n Obtain a signature guarantee (see details below)
	n Mail your request to:
		Goldman Sachs Funds c/o NFDS P.O. Box 219711 Kansas City, MO 64121-9711

By Telephone:	If you have not declined the telephone redemption privilege on your Account Application:
	n 1-800-526-7384 (8:00 a.m. to 4:00 p.m. New York time) n You may redeem up to $50,000 of your shares within any 7 calendar day period n Proceeds which are sent directly to a Goldman Sachs brokerage account are not subject to the $50,000 limit

When Do I Need A Signature Guarantee To Redeem Shares?

A signature guarantee is required if:

You are requesting in writing to redeem shares in an amount over $50,000;

You would like the redemption proceeds sent to an address that is not your address of record; or

You would like to change the bank designated on your Account Application.

A signature guarantee must be obtained from a bank, brokerage firm or other financial intermediary that is a member of an approved Medallion Guarantee Program or that is otherwise approved by Goldman Sachs. A notary public cannot provide a signature guarantee. Additional documentation may be required for executors, trustees or corporations or when deemed appropriate by the Transfer Agent.

What Do I Need To Know About Telephone Redemption Requests?

The Trust, the Distributor and the Transfer Agent will not be liable for any loss you may incur in the event that the Trust accepts unauthorized telephone redemption requests that the Trust reasonably believes to be genuine. The Trust may accept telephone redemption instructions from any person identifying himself or herself as the owner of an account or the owner’s registered representative where the owner has not declined in writing to use this service. Thus, you risk possible losses if a telephone redemption is not authorized by you.

SHAREHOLDER GUIDE

In an effort to prevent unauthorized or fraudulent redemption and exchange requests by telephone, Goldman Sachs and NFDS each employ reasonable procedures specified by the Trust to confirm that such instructions are genuine. If reasonable procedures are not employed, the Trust may be liable for any loss due to unauthorized or fraudulent transactions. The following general policies are currently in effect:

All telephone requests are recorded.

Proceeds of telephone redemption requests will be sent only to your address of record or authorized bank account designated in the Account Application (unless you provide written instructions and a signature guarantee, indicating another address or account) and exchanges of shares normally will be made only to an identically registered account.

Telephone redemptions by check to your address of record will not be accepted during the 30-day period following any change in your address of record.

The telephone redemption option does not apply to shares held in a “street name” account. “Street name” accounts are accounts maintained and serviced by your Authorized Dealer. If your account is held in “street name,” you should contact your registered representative of record, who may make telephone redemptions on your behalf.

The telephone redemption option may be modified or terminated at any time.

Note: It may be difficult to make telephone redemptions in times of drastic economic or market conditions.

How Are Redemption Proceeds Paid?

By Wire: You may arrange for your redemption proceeds to be wired as federal funds to the bank account designated in your Account Application. The following general policies govern wiring redemption proceeds:

Redemption proceeds will normally be wired on the next business day in federal funds (for a total of one business day delay), but may be paid up to three business days following receipt of a properly executed wire transfer redemption request. If you are selling shares you recently paid for by check, the Fund will pay you when your check has cleared, which may take up to 15 days. If the Federal Reserve Bank is closed on the day that the redemption proceeds would ordinarily be wired, wiring the redemption proceeds may be delayed one additional business day.

A transaction fee of $7.50 may be charged for payments of redemption proceeds by wire. Your bank may also charge wiring fees. You should contact your bank directly to learn whether it charges such fees.

To change the bank designated on your Account Application, you must send written instructions (with your signature guaranteed) to the Transfer Agent.

Neither the Trust, Goldman Sachs nor any Authorized Dealer assumes any responsibility for the performance of your bank or any intermediaries in the transfer process. If a problem with such performance arises, you should deal directly with your bank or any such intermediaries.

By Check: You may elect to receive your redemption proceeds by check. Redemption proceeds paid by check will normally be mailed to the address of record within three business days of a properly executed redemption request. If you are selling shares you recently paid for by check, the Fund will pay you when your check has cleared, which may take up to 15 days.

What Else Do I Need To Know About Redemptions?

The following generally applies to redemption requests:

Additional documentation may be required when deemed appropriate by the Transfer Agent. A redemption request will not be in proper form until such additional documentation has been received.

The Trust reserves the right to:

Redeem your shares if your account balance is less than $50 as a result of a redemption. The Funds will not redeem your shares on this basis if the value of your account falls below the minimum account balance solely as a result of market conditions. The Funds will give you 60 days’ prior written notice to allow you to purchase sufficient additional shares of the Fund in order to avoid such redemption.

Redeem your shares in other circumstances determined by the Board of Trustees to be in the best interests of the Trust.

Pay redemptions by a distribution in-kind of securities (instead of cash). If you receive redemption proceeds in-kind, you should expect to incur transaction costs upon the disposition of those securities.

Reinvest any dividends or other distributions which you have elected to receive in cash should your check for such dividends or other distributions be returned to the Fund as undeliverable or remain uncashed for six months. In addition, that distribution and all future distributions payable to you will be reinvested at NAV in additional shares of the same class and Fund on which the distributions are paid. No interest will accrue on amounts represented by uncashed distribution or redemption checks.

Can I Reinvest Redemption Proceeds In The Same Or Another Goldman Sachs Fund?

You may redeem shares of a Fund and reinvest a portion or all of the redemption proceeds (plus any additional amounts needed to round off purchases to the nearest full share) at NAV. To be eligible for this privilege, you must hold the shares you want to redeem for at least 30 days and you must reinvest the share proceeds within 90 days after you redeem. You may reinvest as follows:

Class A or B Shares—Class A Shares of the same Fund or any other Goldman Sachs Fund

SHAREHOLDER GUIDE

Class C Shares—Class C Shares of the same Fund or any other Goldman Sachs Fund

You should obtain and read the applicable prospectuses before investing in any other Funds.

If you pay a CDSC upon redemption of Class A or Class C Shares and then reinvest in Class A or Class C Shares as described above, your account will be credited with the amount of the CDSC you paid. The reinvested shares will, however, continue to be subject to a CDSC. The holding period of the shares acquired through reinvestment will include the holding period of the redeemed shares for purposes of computing the CDSC payable upon a subsequent redemption. For Class B Shares, you may reinvest the redemption proceeds in Class A Shares at NAV but the amount of the CDSC paid upon redemption of the Class B Shares will not be credited to your account.

The reinvestment privilege may be exercised at any time in connection with transactions in which the proceeds are reinvested at NAV in a tax-sheltered retirement plan. In other cases, the reinvestment privilege may be exercised once per year upon receipt of a written request.

You may be subject to tax as a result of a redemption. You should consult your tax adviser concerning the tax consequences of a redemption and reinvestment.

Can I Exchange My Investment From One Fund To Another?

You may exchange shares of a Fund at NAV without the imposition of an initial sales charge or CDSC at the time of exchange for shares of the same class or an equivalent class of any other Goldman Sachs Fund. The exchange privilege may be materially modified or withdrawn at any time upon 60 days’ written notice to you.

Instructions For Exchanging Shares:

By Writing:

n Write a letter of instruction that includes:

n Your name(s) and signature(s)

n Your account number

n The Fund names and Class of Shares

n The dollar amount you want to exchange

n Obtain a signature guarantee (see details above)

n Mail the request to:

Goldman Sachs Funds

c/o NFDS

P.O. Box 219711

Kansas City, MO 64121-9711

or for overnight delivery—

Goldman Sachs Funds

c/o NFDS

330 West 9th St.

Poindexter Bldg., 1st Floor

Kansas City, MO 64105

By Telephone:

If you have not declined the telephone exchange
privilege on your Account Application:

n 1-800-526-7384
(8:00 a.m. to 4:00 p.m. New York time)

You should keep in mind the following factors when making or considering an exchange:

You should obtain and carefully read the prospectus of the Fund you are acquiring before making an exchange.

There is no charge for exchanges made pursuant to the Automatic Exchange Program.

The exchanged shares may later be exchanged for shares of the same class (or an equivalent class) of the original Fund at the next determined NAV without the imposition of an initial sales charge or CDSC if the amount in the Fund resulting from such exchanges is less than the largest amount on which you have previously paid the applicable sales charge.

When you exchange shares subject to a CDSC, no CDSC will be charged at that time. The exchanged shares will be subject to the CDSC of the shares originally held. For purposes of determining the amount of the applicable CDSC, the length of time you have owned the shares will be measured from the date you acquired the original shares subject to a CDSC and will not be affected by a subsequent exchange.

Eligible investors may exchange certain classes of shares for another class of shares of the same Fund. For further information, call Goldman Sachs Funds at 1-800-526-7384.

All exchanges which represent an initial investment in a Fund must satisfy the minimum initial investment requirements of that Fund.

Exchanges are available only in states where exchanges may be legally made.

It may be difficult to make telephone exchanges in times of drastic economic or market conditions.

Goldman Sachs and NFDS may use reasonable procedures described under “What Do I Need to Know About Telephone Redemption Requests?” in an effort to prevent unauthorized or fraudulent telephone exchange requests.

Telephone exchanges normally will be made only to an identically registered account. Shares may be exchanged among accounts with different names, addresses and social security or other taxpayer identification numbers only if the exchange instructions are in writing and accompanied by a signature guarantee.

Right to Reject or Restrict Purchase and Exchange Orders. Purchases and exchanges should be made for investment purposes only. The Trust reserves the right to reject or restrict any specific purchase or exchange request. Because an exchange request involves both a request to redeem shares of one fund and to purchase shares of another fund, Goldman Sachs Funds will consider the underlying redemption and purchase requests conditioned upon the acceptance of each of these underlying requests. Therefore, in the event that Goldman Sachs rejects an exchange request, neither the redemption nor the purchase side of the exchange will be processed.

Excessive Trading Practices. The Trust does not permit market-timing or other excessive trading practices. Excessive, short-term (market-timing) trading practices may disrupt portfolio management strategies, and harm fund performance and negatively impact long-term shareholders. As noted above, the Trust reserves the right to reject or restrict any purchase order (including exchanges) from any investor. Neither the Trust nor the Investment Adviser will be held liable for any gain or loss resulting from rejected purchases. To minimize harm to the Trust and its shareholders, the Trust will exercise these rights if an investor has a history of excessive trading or if an investor’s trading, in the judgment of the Trust, has been or may be disruptive to a fund. In making this judgment, trades executed in multiple accounts under common ownership or control may be considered together.

For federal income tax purposes, an exchange is treated as a redemption of the shares surrendered in the exchange, on which you may be subject to tax, followed by a purchase of shares received in the exchange. You should consult your tax adviser concerning the tax consequences of an exchange.

SHAREHOLDER SERVICES

Can I Arrange To Have Automatic Investments Made On A Regular Basis?

You may be able to make systematic cash investments through your bank via ACH transfer or your checking account via bank draft each month. Forms for this option are available from Goldman Sachs, your Authorized Dealer or you may check the appropriate box on the Account Application.

Can My Dividends From A Fund Be Invested In Other Funds?

You may elect to cross-reinvest dividends paid by a Fund in shares of the same class or an equivalent class of any other Goldman Sachs Fund.

Shares will be purchased at NAV.

No initial sales charge or CDSC will be imposed.

You may elect cross-reinvestment into an identically registered account or an account registered in a different name or with a different address, social security number or taxpayer identification number provided that the account has been properly established, appropriate signature guarantees obtained and the minimum initial investment has been satisfied.

Can I Arrange To Have Automatic Exchanges Made On A Regular Basis?

You may elect to exchange automatically a specified dollar amount of shares of a Fund for shares of the same class or an equivalent class of any other Goldman Sachs Fund.

Shares will be purchased at NAV.

No initial sales charge is imposed.

Shares subject to a CDSC acquired under this program may be subject to a CDSC at the time of redemption from the Fund into which the exchange is made depending upon the date and value of your original purchase.

Automatic exchanges are made monthly on the 15th day of each month or the first business day thereafter.

Minimum dollar amount: $50 per month.

What Else Should I Know About Cross-Reinvestments And Automatic Exchanges?

Cross-reinvestments and automatic exchanges are subject to the following conditions:

You must hold $5,000 or more in the Fund which is paying the dividend or from which the exchange is being made.

You must invest an amount in the Fund into which cross-reinvestments or automatic exchanges are being made that is equal to that Fund’s minimum initial investment or continue to cross-reinvest or to make automatic exchanges until such minimum initial investment is met.

You should obtain and read the prospectus of the Fund into which dividends are invested or automatic exchanges are made.

Can I Have Automatic Withdrawals Made On A Regular Basis?

You may draw on your account systematically via check or ACH transfer in any amount of $50 or more.

It is normally undesirable to maintain a systematic withdrawal plan at the same time that you are purchasing additional Class A, Class B or Class C Shares because of the sales charge imposed on your purchases of Class A Shares or the imposition of a CDSC on your redemptions of Class A, Class B or Class C Shares.

You must have a minimum balance of $5,000 in a Fund.

Checks are mailed on or about the 25th day of each month.

Each systematic withdrawal is a redemption and therefore a taxable transaction.

The CDSC applicable to Class A, Class B or Class C Shares redeemed under the systematic withdrawal plan may be waived.

SHAREHOLDER GUIDE

What Types of Reports Will I Be Sent Regarding My Investment?

You will be provided with a printed confirmation of each transaction in your account and an individual quarterly account statement. A year-to-date statement for your account will be provided upon request made to Goldman Sachs. If your account is held in “street name” you may receive your statement and confirmations on a different schedule.

You will also receive an annual shareholder report containing audited financial statements and a semi-annual shareholder report. If you have consented to the delivery of a single copy of shareholder reports, prospectuses and other information to all shareholders who share the same mailing address with your account, you may revoke your consent at any time by contacting Goldman Sachs Funds by phone at 1-800-526-7384 or by mail at Goldman Sachs Funds, 4900 Sears Tower—60th Floor, Chicago, IL 60606-6372. The Funds will begin sending individual copies to you within 30 days after receipt of your revocation.

The Funds do not generally provide sub-accounting services.

What Should I Know When I Purchase Shares Through An Authorized Dealer?

Authorized Dealers and other financial intermediaries may provide varying arrangements for their clients to purchase and redeem Fund shares. They may charge additional fees not described in this Prospectus to their customers for such services.

If shares of a Fund are held in a “street name” account with an Authorized Dealer, all recordkeeping, transaction processing and payments of distributions relating to your account will be performed by the Authorized Dealer, and not by the Fund and its Transfer Agent. Since the Funds will have no record of your transactions, you should contact the Authorized Dealer to purchase, redeem or exchange shares, to make changes in or give instructions concerning the account or to obtain information about your account. The transfer of shares in a “street name” account to an account with another dealer or to an account directly with the Fund involves special procedures and will require you to obtain historical purchase information about the shares in the account from the Authorized Dealer.

Authorized Dealers and other financial intermediaries may be authorized to accept, on behalf of the Trust, purchase, redemption and exchange orders placed by or on behalf of their customers, and if approved by the Trust, to designate other intermediaries to accept such orders. In these cases:

A Fund will be deemed to have received an order that is in proper form when the order is accepted by an Authorized Dealer or intermediary on a business day, and the order will be priced at the Fund’s NAV per share (adjusted for any applicable sales charge) next determined after such acceptance.

Authorized Dealers and intermediaries are responsible for transmitting accepted orders to the Funds within the time period agreed upon by them.

You should contact your Authorized Dealer or intermediary to learn whether it is authorized to accept orders for the Trust.

The Investment Adviser, Distributor and/or their affiliates may pay additional compensation from time to time, out of their assets and not as an additional charge to the Funds, to selected Authorized Dealers and other persons in connection with the sale, distribution and/or servicing of shares of the Funds and other Goldman Sachs Funds. Additional compensation based on sales may, but is currently not expected to, exceed 0.50% (annualized) of the amount invested.

DISTRIBUTION SERVICES AND FEES

What Are The Different Distribution And Service Fees Paid By Class A, B and C Shares?

The Trust has adopted distribution and service plans (each a “Plan”) under which Class A, Class B and Class C Shares bear distribution and service fees paid to Authorized Dealers and Goldman Sachs. If the fees received by Goldman Sachs pursuant to the Plans exceed its expenses, Goldman Sachs may realize a profit from this arrangement. Goldman Sachs pays the distribution and service fees on a quarterly basis.

Under the Plans, Goldman Sachs is entitled to a monthly fee from each Fund for distribution services equal, on an annual basis, to 0.25%, 0.75% and 0.75%, respectively, of a Fund’s average daily net assets attributed to Class A, Class B and Class C Shares. Because these fees are paid out of the Fund’s assets on an ongoing basis, over time, these fees will increase the cost of your investment and may cost you more than paying other types of such charges.

The distribution fees are subject to the requirements of Rule 12b-1 under the Act, and may be used (among other things) for:

Compensation paid to and expenses incurred by Authorized Dealers, Goldman Sachs and their respective officers, employees and sales representatives;

Commissions paid to Authorized Dealers;

Allocable overhead;

Telephone and travel expenses;

Interest and other costs associated with the financing of such compensation and expenses;

Printing of prospectuses for prospective shareholders;

Preparation and distribution of sales literature or advertising of any type; and

SHAREHOLDER GUIDE

All other expenses incurred in connection with activities primarily intended to result in the sale of Class A, Class B and Class C Shares.

In connection with the sale of Class C Shares, Goldman Sachs normally begins paying the 0.75% distribution fee as an ongoing commission to Authorized Dealers after the shares have been held for one year.

PERSONAL ACCOUNT MAINTENANCE SERVICES AND FEES

Under the Plans, Goldman Sachs is also entitled to receive a separate fee equal on an annual basis to 0.25% of each Fund’s average daily net assets attributed to Class A Shares, Class B or Class C Shares. This fee is for personal and account maintenance services, and may be used to make payments to Goldman Sachs, Authorized Dealers and their officers, sales representatives and employees for responding to inquiries of, and furnishing assistance to, shareholders regarding ownership of their shares or their accounts or similar services not otherwise provided on behalf of the Funds. If the fees received by Goldman Sachs pursuant to the Plans exceed its expenses, Goldman Sachs may realize a profit from this arrangement. With respect to Class A Shares, Goldman Sachs may use the distribution fees paid by the Funds for personal and account maintenance services.

In connection with the sale of Class C Shares, Goldman Sachs normally begins paying the 0.25% ongoing service fee to Authorized Dealers after the shares have been held for one year.

Taxation

As with any investment, you should consider how your investment in the Funds will be taxed. The tax information below is provided as general information. More tax information is available in the Additional Statement. You should consult your tax adviser about the federal, state, local or foreign tax consequences of your investment in the Funds.

Unless your investment is an IRA or other tax-advantaged account, you should consider the possible tax consequences of Fund distributions and the sale of your Fund shares.

DISTRIBUTIONS

Distributions you receive from the Funds are generally subject to federal income tax, and may also be subject to state or local taxes. This is true whether you reinvest your distributions in additional Fund shares or receive them in cash. For federal tax purposes, the Funds’ income dividend distributions and short-term capital gain distributions are taxable to you as ordinary income. Any long-term capital gain distributions are taxable as long-term capital gains, no matter how long you have owned your Fund shares.

Although distributions are generally treated as taxable to you in the year they are paid, distributions declared in October, November or December but paid in January are taxable as if they were paid in December. A percentage of the Funds’ dividends paid to corporate shareholders may be eligible for the corporate dividends-received deduction. The Funds will inform shareholders of the character and tax status of all distributions promptly after the close of each calendar year.

Each Fund may be subject to foreign withholding or other foreign taxes on income or gain from certain foreign securities. In general, the Funds may deduct these taxes in computing their taxable income.

If you buy shares of a Fund before it makes a distribution, the distribution will be taxable to you even though it may actually be a return of a portion of your investment. This is known as “buying a dividend.”

SALES AND EXCHANGES

Your sale of Fund shares is a taxable transaction for federal income tax purposes, and may also be subject to state and local taxes. For tax purposes, the exchange of your Fund shares for shares of a different Goldman Sachs Fund is the same as a sale. When you sell your shares, you will generally recognize a capital gain or loss in an amount equal to the difference between your adjusted tax basis in the shares and the amount received. Generally, this gain or loss is long-term or short-term depending on whether your holding period exceeds twelve months, except that any loss realized on shares held for six months or less will be treated as a long-term capital loss to the extent of any long-term capital gain dividends that were received on the shares.

OTHER INFORMATION

When you open your account, you should provide your social security or tax identification number on your Account Application. By law, each Fund must withhold 31% of your taxable distributions and any redemption proceeds if you do not provide your correct taxpayer identification number, or certify that it is correct, or if the IRS instructs the Fund to do so. Non-U.S. investors may be subject to U.S. withholding and estate tax.

Appendix A

Additional Information on Portfolio Risks, Securities and Techniques

A. General Portfolio Risks

The Funds will be subject to the risks associated with equity securities. “Equity securities” may include common stocks, preferred stocks, interests in real estate investment trusts, convertible debt obligations, convertible preferred stocks, equity interests in trusts, partnerships, joint ventures, limited liability companies and similar enterprises, warrants and stock purchase rights. In general, stock values fluctuate in response to the activities of individual companies and in response to general market and economic conditions. Accordingly, the value of the stocks that a Fund holds may decline over short or extended periods. The stock markets tend to be cyclical, with periods when stock prices generally rise and periods when prices generally decline. The volatility of equity securities means that the value of your investment in the Funds may increase or decrease. Recently, certain stock markets have traded at or close to record high levels and there can be no guarantee that such levels will continue.

To the extent that a Fund invests in fixed-income securities, that Fund will also be subject to the risks associated with its fixed-income securities. These risks include interest rate risk, credit risk and call/extension risk. In general, interest rate risk involves the risk that when interest rates decline, the market value of fixed-income securities tends to increase (although many mortgage related securities will have less potential than other debt securities for capital appreciation during periods of declining rates). Conversely, when interest rates increase, the market value of fixed-income securities tends to decline. Credit risk involves the risk that an issuer or guarantor could default on its obligations, and a Fund will not recover its investment. Call risk and extension risk are normally present in mortgage-backed securities and asset-backed securities. For example, homeowners have the option to prepay their mortgages. Therefore, the duration of a security backed by home mortgages can either shorten (call risk) or lengthen (extension risk). In general, if interest rates on new mortgage loans fall sufficiently below the interest rates on existing outstanding mortgage loans, the rate of prepayment would be expected to increase. Conversely, if mortgage loan interest rates rise above the interest rates on existing outstanding mortgage loans, the rate of prepayment would be expected to decrease. In either case, a change in the prepayment rate can result in losses to investors.

The Investment Adviser will not consider the portfolio turnover rate a limiting factor in making investment decisions for a Fund. A high rate of portfolio turnover (100% or more) involves correspondingly greater expenses which must be borne by a Fund and its shareholders, and is also likely to result in higher short-term capital gains taxable to shareholders. The portfolio turnover rate is calculated by dividing the lesser of the dollar amount of sales or purchases of portfolio securities by the average monthly value of a Fund’s portfolio securities, excluding securities having a maturity at the date of purchase of one year or less.

The following sections provide further information on certain types of securities and investment techniques that may be used by the Funds, including their associated risks. Additional information is provided in the Additional Statement, which is available upon request. Among other things, the Additional Statement describes certain fundamental investment restrictions that cannot be changed without shareholder approval. You should note, however, that all investment objectives, and all investment policies not specifically designated as fundamental, are non-fundamental and may be changed without shareholder approval. If there is a change in a Fund’s investment objective, you should consider whether that Fund remains an appropriate investment in light of your then current financial position and needs.

B. Other Portfolio Risks

Risks of Investing in Specific Industry Sectors. Industry risk is the risk that a group of related stocks will decline in price due to industry-specific developments. Companies in the same or similar industries may share common characteristics and are more likely to react to the same industry-specific market or economic developments than companies in unrelated industries. Because the investments of each Fund are concentrated in a specific industry sector, each Fund’s investment performance will be closely tied to the factors affecting that sector, and each Fund’s NAV is more likely to have greater fluctuations than the NAV of a fund that is not concentrated in a particular industry sector. Risks relevant to each Fund’s industry sector are described below. These risks may cause the NAVs and performance of the Funds to be subject to abrupt changes, and may result in investor losses.

Consumer Products and Services Sector. The performance of consumer products and services companies relates closely to the actual and perceived performance of the overall economy and consumer confidence. Changes in governmental policies and the need for regulatory approvals may also have a material effect on the products and services offered by these companies. In addition, many consumer products and services companies have unpredictable earnings, due in part to changes in demographics and consumer tastes and intense compe tition. Some companies in this industry sector, such as tobacco companies and companies subject to product liability claims, may be subject to existing or potential litigation brought by government bodies or consumers that can have a material adverse affect on their prospects and share values.

Financial Services Sector. Companies in the financial services sector are subject to rapid business changes, intense competition and volatile performance related to the availability and cost of capital and prevailing interest rates. The profitability of financial services companies may be adversely affected by rising interest rates, which may restrict the availability and increase the cost of capital, and declining economic conditions, which may cause credit losses due to financial difficulties of borrowers.

Financial services companies are subject to extensive governmental regulation. Within the United States, government regulation of the financial services industry has changed significantly during the past several years, as many previous legal barriers separating different financial service segments have been modified or eliminated. Recent business combinations have included banking, insurance and securities firms under single ownership. The deregulation of financial services companies in the United States has resulted in increased competition and reduced profitability for certain companies. Similarly, foreign financial services companies, particularly those in Japan, have reported financial difficulties attributed to increased competition, regulatory changes and general economic difficulties.

In addition to the foregoing, the performance of insurance companies will be affected by claims activity. Property and casualty insurance profits may be affected by weather catastrophes and other disasters. Life and health insurers’ profits may be affected by mortality and morbidity rates. Individual companies may be exposed to material risks, including reserve inadequacy, problems in investment portfolios (due to real estate or “junk bond” holdings, for example), and the inability to collect from reinsurance carriers. Potential tax law changes also may adversely affect insurance companies’ policy sales, tax obligations and profitability.

Health Sciences Sector. Health sciences companies generally are subject to intense competition and substantial governmental regulation. Changes in governmental policy or regulation can have a material effect on the demand for products and services offered by companies in health sciences industries. Regulatory approvals are generally required before new drugs and medical products, devices or procedures may be introduced, and before the acquisition of additional facilities by healthcare providers. Unanticipated problems may arise in connection with their development and introduction, and obtaining required gov ernment approvals may be a lengthy and expensive process with an uncertain outcome. These delays may result in the need for companies to seek additional capital, potentially diluting the interests of existing investors. In addition, the products and services offered by health sciences companies may be subject to patent expirations.

Consumers tend to react quickly to new products and services offered by health science companies. Because of this competition, health sciences companies may have slim or negative profit margins as the companies compete for market share. In addition, some health science industries are characterized by single product focus and rapidly changing technologies. These changes may render existing products and technologies obsolete.

The health sciences sector includes biotechnology companies. In comparison to more developed companies, there may be a thin trading market in biotechnology securities, and adverse developments in the biotechnology industry may be more likely to result in decreases in the value of biotechnology stocks. Biotechnology companies are often small, start-up ventures whose products are only in the research stage. Therefore, the market values of biotechnology companies are often based upon speculation and expectations about future products, research progress and new product filings with regulatory authorities.

Many health sciences companies receive government funding, subsidies or reimbursements. Withdrawal or curtailment of this support can have an adverse impact on the profitability and market prices of such companies. In addition, health sciences companies may be exposed to potential product liability risks that are related to testing, manufacturing, marketing and selling their products. These product liability claims may have a material adverse effect on the business, prospects and values of health sciences companies in which the Fund invests.

Infrastructure and Resources Sectors. Infrastructure and resources companies are often subject to significant governmental regulation. This regulation may affect, and in some cases directly limit, the rates of return that may be earned by such companies and the kinds of services they offer. In addition, many of these companies have heavy capital commitments in their facilities, plants and equipment, and historically have been subject to significant costs associated with compliance with environmental and other safety regulations.

Competition is intense for many infrastructure and resources companies. Many infrastructure companies are also affected by changes in prevailing interest rates because prices of equity and debt securities of infrastructure companies tend to increase when interest rates decline and decrease when interest rates rise. Resources companies may also be subject to irregular fluctuations in earnings due to changes in the availability of money, the level of interest rates and other factors.

The value of securities of resources companies will fluctuate in response to market conditions for the particular resources with which they are involved. Changes in inventory levels and changes, perceived or actual, in production and consumption will affect these prices. For some resources companies, such price fluctuations may be substantial over very short periods of time. The stock prices of some resources companies tend to fluctuate in correlation with various stages of inflationary cycles and perceived inflationary trends.

Technology Sector. Technology companies generally are subject to intense competition, rapid obsolescence of products and government regulation. Competition among technology companies may result in aggressive pricing of their products and services, which may affect negatively the profitability and financial condition of technology companies. In addition, because of the rapid pace of technological development, products or services developed by technology companies may become rapidly obsolete or have relatively short product cycles. Technology companies are also frequently dependent on the existence and health of other products or industries and may face uncertainties relating to product licensing, trademarks and patent protection.

Many attractive investment opportunities in the technology sector may be smaller, start-up companies offering emerging products or services. Smaller or newer companies may suffer more significant losses as well as realize more substantial growth than larger or more established issuers because they may lack depth of management, be unable to generate funds necessary for growth or potential development, or be developing or marketing new products for which markets are not yet established and may never be established. In addition, such companies may be insignificant factors in their industries and may become subject to

intense competition from larger or more established companies. Technology companies may also be dependent on the success of a principal product, and may rely on sole source providers and third-party manufacturers. Because of these and related factors, investments in such companies tend to be more volatile and speculative.

Risks of Investing in Small Capitalization Companies. Each Fund may invest in small capitalization companies. Investments in small capitalization companies involve greater risk and portfolio price volatility than investments in larger capitalization stocks. Among the reasons for the greater price volatility of these investments are the less certain growth prospects of smaller firms and the lower degree of liquidity in the markets for such securities. Small capitalization companies may be thinly traded and may have to be sold at a discount from current market prices or in small lots over an extended period of time. In addition, these securities are subject to the risk that during certain periods the liquidity of particular issuers or industries, or all securities in these investment categories, will shrink or disappear suddenly and without warning as a result of adverse economic or market conditions, or adverse investor perceptions whether or not accurate. Because of the lack of sufficient market liquidity, a Fund may incur losses because it will be required to effect sales at a disadvantageous time and only then at a substantial drop in price. Small capitalization companies include “unseasoned” issuers that do not have an established financial history; often have limited product lines, markets or financial resources; may depend on or use a few key personnel for management; and may be susceptible to losses and risks of bankruptcy. Transaction costs for these investments are often higher than those of larger capitalization companies. Investments in small capitalization companies may be more difficult to price precisely than other types of securities because of their characteristics and lower trading volumes.

Risks of Foreign Investments. Each Fund may invest in foreign investments. Foreign investments involve special risks that are not typically associated with U.S. dollar denominated or quoted securities of U.S. issuers. Foreign investments may be affected by changes in currency rates, changes in foreign or U.S. laws or restrictions applicable to such investments and changes in exchange control regulations (e.g., currency blockage). A decline in the exchange rate of the currency (i.e., weakening of the currency against the U.S. dollar) in which a portfolio security is quoted or denominated relative to the U.S. dollar would reduce the value of the portfolio security. In addition, if the currency in which a Fund receives dividends, interest or other payments declines in value against the U.S. dollar before such income is distributed as dividends to shareholders or converted to U.S. dollars, the Fund may have to sell portfolio securities to obtain sufficient cash to pay such dividends.

The introduction of a single currency, the euro, on January 1, 1999 for participating nations in the European Economic and Monetary Union has presented unique uncertainties, including the legal treatment of certain outstanding financial contracts after January 1, 1999 that refer to existing currencies rather than the euro; the establishment and maintenance of exchange rates for currencies being converted into the euro; the fluctuation of the euro relative to non-euro currencies during the transition period from January 1, 1999 to December 31, 2001 and beyond; whether the interest rate, tax and labor regimes of European countries participating in the euro will converge over time; and whether the conversion of the currencies of other countries that now are or may in the future become members of the European Union (“EU”), may have an impact on the euro. These or other factors, including political and economic risks, could cause market disruptions, and could adversely affect the value of securities held by the Funds. Because of the number of countries using this single currency, a significant portion of the foreign assets held by the Funds may be denominated in the euro.

Brokerage commissions, custodial services and other costs relating to investment in international securities markets generally are more expensive than in the United States. In addition, clearance and settlement procedures may be different in foreign countries and, in certain markets, such procedures have been unable to keep pace with the volume of securities transactions, thus making it difficult to conduct such transactions.

Foreign issuers are not generally subject to uniform accounting, auditing and financial reporting standards comparable to those applicable to U.S. issuers. There may be less publicly available information about a foreign issuer than about a U.S. issuer. In addition, there is generally less government regulation of foreign markets, companies and securities dealers than in the United States. Foreign securities markets may have substantially less volume than U.S. securities markets and securities of many foreign issuers are less liquid and more volatile than securities of comparable domestic issuers. Furthermore, with respect to certain foreign countries, there is a possibility of nationalization, expropriation or confiscatory taxation, imposition of withholding or other taxes on dividend or interest payments (or, in some cases, capital gains), limitations on the removal of funds or other assets of the Funds, and political or social instability or diplomatic developments which could affect investments in those countries.

Concentration of a Fund’s assets in one or a few countries and currencies will subject a Fund to greater risks than if a Fund’s assets were not geographically concentrated.

Investment in sovereign debt obligations by certain Funds involves risks not present in debt obligations of corporate issuers. The issuer of the debt or the governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when due in accordance with the terms of such debt, and a Fund may have limited recourse to compel payment in the event of a default. Periods of economic uncertainty may result in the volatility of market prices of sovereign debt, and in turn a Fund’s NAV, to a greater extent than the volatility inherent in debt obligations of U.S. issuers.

A sovereign debtor’s willingness or ability to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy toward international lenders, and the political constraints to which a sovereign debtor may be subject.

Investments in foreign securities may take the form of sponsored and unsponsored American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”) and European Depositary Receipts (“EDRs”) or other similar instruments representing securities of foreign issuers. ADRs represent the right to receive securities of foreign issuers deposited in a domestic bank or a correspondent bank. Prices of ADRs are quoted in U.S. dollars, and ADRs are traded in the United States. EDRs and GDRs are receipts evidencing an arrangement with a non-U.S. bank. EDRs and GDRs are not necessarily quoted in the same currency as the underlying security.

Risks of Emerging Countries. Each Fund may invest in securities of issuers located in emerging countries. The risks of foreign investment are heightened when the issuer is located in an emerging country. Emerging countries are generally located in the Asia-Pacific region, Eastern Europe, Latin and South America and Africa. A Fund’s purchase and sale of portfolio securities in certain emerging countries may be constrained by limitations as to daily changes in the prices of listed securities, periodic trading or settlement volume and/or limitations on aggregate holdings of foreign investors. Such limitations may be computed based on the aggregate trading volume by or holdings of a Fund, the Investment Adviser, its affiliates and their respective clients and other service providers. A Fund may not be able to sell securities in circumstances where price, trading or settlement volume limitations have been reached.

Foreign investment in the securities markets of certain emerging countries is restricted or controlled to varying degrees which may limit investment in such countries or increase the administrative costs of such investments. For example, certain Asian countries require governmental approval prior to investments by foreign persons or limit investment by foreign persons to only a specified percentage of an issuer’s outstanding securities or a specific class of securities which may have less advantageous terms (including price) than securities of the issuer available for purchase by nationals. In addition, certain countries may restrict or prohibit investment opportunities in issuers or industries deemed important to national interests. Such restrictions may affect the market price, liquidity and rights of securities that may be purchased by a Fund. The repatriation of both investment income and capital from certain emerging countries is subject to restrictions such as the need for governmental consents. Due to restrictions on direct investment in equity securities in certain Asian and other countries, it is anticipated that a Fund may invest in such countries through other investment funds in such countries.

APPENDIX A

Many emerging countries have experienced currency devaluations and substantial (and, in some cases, extremely high) rates of inflation, which have had a negative effect on the economies and securities markets of such emerging countries. Economies in emerging countries generally are dependent heavily upon commodity prices and international trade and, accordingly, have been and may continue to be affected adversely by the economies of their trading partners, trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade.

Many emerging countries are subject to a substantial degree of economic, political and social instability. Governments of some emerging countries are authoritarian in nature or have been installed or removed as a result of military coups, while governments in other emerging countries have periodically used force to suppress civil dissent. Disparities of wealth, the pace and success of democratization, and ethnic, religious and racial disaffection, among other factors, have also led to social unrest, violence and/or labor unrest in some emerging countries. Unanticipated political or social developments may result in sudden and significant investment losses. Investing in emerging countries involves greater risk of loss due to expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments and on repatriation of capital invested.

A Fund’s investment in emerging countries may also be subject to withholding or other taxes, which may be significant and may reduce the return from an investment in such country to the Fund.

Settlement procedures in emerging countries are frequently less developed and reliable than those in the United States and often may involve a Fund’s delivery of securities before receipt of payment for their sale. In addition, significant delays are common in certain markets in registering the transfer of securities. Settlement or registration problems may make it more difficult for a Fund to value its portfolio securities and could cause the Fund to miss attractive investment opportunities, to have a portion of its assets uninvested or to incur losses due to the failure of a counterparty to pay for securities the Fund has delivered or the Fund’s inability to complete its contractual obligation because of theft or other reasons. The creditworthiness of the local securities firms used by a Fund in emerging countries may not be as sound as the creditworthiness of firms used in more developed countries. As a result, the Fund may be subject to a greater risk of loss if a securities firm defaults in the performance of its responsibilities.

The small size and inexperience of the securities markets in certain emerging countries and the limited volume of trading in securities in those countries may make a Fund’s investments in such countries less liquid and more volatile than investments in countries with more developed securities markets (such as the United States, Japan and most Western European countries). A Fund’s investments in emerging countries are subject to the risk that the liquidity of a particular investment, or investments generally, in such countries will shrink or disappear suddenly and without warning as a result of adverse economic, market or political conditions or adverse investor perceptions, whether or not accurate. Because of the lack of sufficient market liquidity, a Fund may incur losses because it will be required to effect sales at a disadvantageous time and only then at a substantial drop in price. Investments in emerging countries may be more difficult to price precisely because of the characteristics discussed above and lower trading volumes.

A Fund’s use of foreign currency management techniques in emerging countries may be limited. Due to the limited market for these instruments in emerging countries, the Investment Adviser does not currently anticipate that a significant portion of the Funds’ currency exposure in emerging countries, if any, will be covered by such instruments.

Risks of Derivative Investments. A Fund’s transactions in options, futures, options on futures, swaps, interest rate caps, floors and collars, structured securities and currency transactions involve additional risk of loss. Loss can result from a lack of correlation between changes in the value of derivative instruments and the portfolio assets (if any) being hedged, the potential illiquidity of the markets for derivative instruments, or the risks arising from margin requirements and related leverage factors associated with such transactions. The use of these management techniques also involves the risk of loss if the Investment Adviser is incorrect in its expectation of fluctuations in securities prices, interest rates or currency prices. Each Fund may also invest in derivative investments for non-hedging purposes (that is, to seek to increase total return). Investing for non-hedging purposes is considered a speculative practice and presents even greater risk of loss.

Risks of Illiquid Securities. Each Fund may invest up to 15% of its net assets in illiquid securities which cannot be disposed of in seven days in the ordinary course of business at fair value. Illiquid securities include:

Both domestic and foreign securities that are not readily marketable

Certain stripped mortgage-backed securities

Repurchase agreements and time deposits with a notice or demand period of more than seven days

Certain over-the-counter options

Certain structured securities and all swap transactions

Certain restricted securities, unless it is determined, based upon a review of the trading markets for a specific restricted security, that such restricted security is eligible for resale pursuant to Rule 144A under the Securities Act of 1933 (“144A Securities”) and, therefore, is liquid.

APPENDIX A

Investing in 144A Securities may decrease the liquidity of a Fund’s portfolio to the extent that qualified institutional buyers become for a time uninterested in purchasing these restricted securities. The purchase price and subsequent valuation of restricted and illiquid securities normally reflect a discount, which may be significant, from the market price of comparable securities for which a liquid market exists.

Credit Risks. Debt securities purchased by the Funds may include securities (including zero coupon bonds) issued by the U.S. government (and its agencies, instrumentalities and sponsored enterprises), domestic and foreign corporations, banks and other issuers. Further information is provided in the Additional Statement.

Debt securities rated BBB or higher by Standard & Poor’s or Baa or higher by Moody’s are considered “investment grade.” Securities rated BBB or Baa are considered medium-grade obligations with speculative characteristics, and adverse economic conditions or changing circumstances may weaken their issuers’ capacity to pay interest and repay principal. A security will be deemed to have met a rating requirement if it receives the minimum required rating from at least one such rating organization even though it has been rated below the minimum rating by one or more other rating organizations, or if unrated by such rating organizations, determined by the Investment Adviser to be of comparable credit quality.

The Funds may invest in fixed-income securities rated BB or Ba or below (or comparable unrated securities) which are commonly referred to as “junk bonds.” Junk bonds are considered predominantly speculative and may be questionable as to principal and interest payments.

In some cases, junk bonds may be highly speculative, have poor prospects for reaching investment grade standing and be in default. As a result, investment in such bonds will present greater speculative risks than those associated with investment in investment grade bonds. Also, to the extent that the rating assigned to a security in a Fund’s portfolio is downgraded by a rating organization, the market price and liquidity of such security may be adversely affected.

Risks of Initial Public Offerings. Each Fund may make significant investments in IPOs. An IPO is a company’s first offering of stock to the public. IPO risk is the risk that the market value of IPO shares will fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk. When a Fund’s asset base is small, a significant portion of the Fund’s performance could be attributable to investments in IPOs, because such investments would have a magnified impact on the Fund. As the Fund’s assets grow, the effect of the Fund’s investments in IPOs on the Fund’s performance probably will decline, which could reduce the Fund’s performance. Because of the price volatility of IPO shares, a Fund may choose to hold IPO shares for a very short period of time. This may increase the turnover of the Fund’s portfolio and may lead to increased expenses to the Fund, such as commissions and transaction costs. By selling IPO shares, the Fund may realize taxable gains it will subsequently distribute to shareholders. In addition, the market for IPO shares can be speculative and/or inactive for extended periods of time. There is no assurance that a Fund will be able to obtain allocable portions of IPO shares. The limited number of shares available for trading in some IPOs may make it more difficult for a Fund to buy or sell significant amounts of shares without an unfavorable impact on prevailing prices. Investors in IPO shares can be affected by substantial dilution in the value of their shares, by sales of additional shares and by concentration of control in existing management and principal shareholders.

The Funds’ investments in IPO shares may include the securities of “unseasoned” companies (companies with less than three years of continuous operations), which presents risks considerably greater than common stocks of more established companies. These companies may have limited operating histories and their prospects for profitability may be uncertain. These companies may be involved in new and evolving businesses and may be vulnerable to competition and changes in technology, markets and economic conditions. They may be more dependent on key managers and third parties and may have limited product lines.

Temporary Investment Risks. Each Fund may, for temporary defensive purposes, invest a certain percentage of its total assets in:

U.S. government securities

Commercial paper rated at least A-2 by Standard & Poor’s or P-2 by Moody’s

Certificates of deposit

Bankers’ acceptances

Repurchase agreements

Non-convertible preferred stocks and non-convertible corporate bonds with a remaining maturity of less than one year

When a Fund’s assets are invested in such instruments, the Fund may not be achieving its investment objective.

APPENDIX A

C. Portfolio Securities and Techniques

This section provides further information on certain types of securities and investment techniques that may be used by the Funds, including their associated risks. Further information is provided in the Additional Statement, which is available upon request.

Convertible Securities. Each Fund may invest in convertible securities. Convertible securities are preferred stock or debt obligations that are convertible into common stock. Convertible securities generally offer lower interest or dividend yields than non-convertible securities of similar quality. Convertible securities in which a Fund invests are subject to the same rating criteria as its other investments in fixed-income securities. Convertible securities have both equity and fixed-income risk characteristics. Like all fixed-income securities, the value of convertible securities is susceptible to the risk of market losses attributable to changes in interest rates. Generally, the market value of convertible securities tends to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price of the convertible security, the convertible security tends to reflect the market price of the underlying common stock. As the market price of the underlying common stock declines, the convertible security, like a fixed-income security, tends to trade increasingly on a yield basis, and thus may not decline in price to the same extent as the underlying common stock.

Foreign Currency Transactions. A Fund may, to the extent consistent with its investment policies, purchase or sell foreign currencies on a cash basis or through forward contracts. A forward contract involves an obligation to purchase or sell a specific currency at a future date at a price set at the time of the contract. A Fund may engage in foreign currency transactions for hedging purposes and to seek to protect against anticipated changes in future foreign currency exchange rates. In addition, certain Funds may also enter into such transactions to seek to increase total return, which is considered a speculative practice.

Each Fund may also engage in cross-hedging by using forward contracts in a currency different from that in which the hedged security is denominated or quoted if the Investment Adviser determines that there is a pattern of correlation between the two currencies. A Fund may hold foreign currency received in connection with investments in foreign securities when, in the judgment of the Investment Adviser, it would be beneficial to convert such currency into U.S. dollars at a later date (e.g. the Investment Adviser may anticipate the foreign currency to appreciate against the U.S. dollar).

Currency exchange rates may fluctuate significantly over short periods of time, causing, along with other factors, a Fund’s NAV to fluctuate (when the Fund’s NAV fluctuates, the value of your shares may go up or down). Currency exchange rates also can be affected unpredictably by the intervention of U.S. or foreign governments or central banks, or the failure to intervene, or by currency controls or political developments in the United States or abroad.

The market in forward foreign currency exchange contracts, currency swaps and other privately negotiated currency instruments offers less protection against defaults by the other party to such instruments than is available for currency instruments traded on an exchange. Such contracts are subject to the risk that the counterparty to the contract will default on its obligations. Since these contracts are not guaranteed by an exchange or clearinghouse, a default on a contract would deprive a Fund of unrealized profits, transaction costs or the benefits of a currency hedge or could force the Fund to cover its purchase or sale commitments, if any, at the current market price.

Structured Securities. Each Fund may invest in structured securities. Structured securities are securities whose value is determined by reference to changes in the value of specific currencies, interest rates, commodities, indices or other financial indicators (the “Reference”) or the relative change in two or more References. The interest rate or the principal amount payable upon maturity or redemption may be increased or decreased depending upon changes in the applicable Reference. Structured securities may be positively or negatively indexed, so that appreciation of the Reference may produce an increase or decrease in the interest rate or value of the security at maturity. In addition, changes in the interest rates or the value of the security at maturity may be a multiple of changes in the value of the Reference. Consequently, structured securities may present a greater degree of market risk than other types of securities and may be more volatile, less liquid and more difficult to price accurately than less complex securities.

REITs. Each Fund may invest in REITs. REITs are pooled investment vehicles that invest primarily in either real estate or real estate related loans. The value of a REIT is affected by changes in the value of the properties owned by the REIT or securing mortgage loans held by the REIT. REITs are dependent upon the ability of the REITs’ managers, and are subject to heavy cash flow dependency, default by borrowers and the qualification of the REITs under applicable regulatory requirements for favorable income tax treatment. REITs are also subject to risks generally associated with investments in real estate including possible declines in the value of real estate, general and local economic conditions, environmental problems and changes in interest rates. To the extent that assets underlying a REIT are concentrated geographically, by property type or in certain other respects, these risks may be heightened. A Fund will indirectly bear its proportionate share of any expenses, including management fees, paid by a REIT in which it invests.

Options on Securities, Securities Indices and Foreign Currencies. A put option gives the purchaser of the option the right to sell, and the writer (seller) of the option the obligation to buy, the underlying instrument during the option period. A call option gives the purchaser of the option the right to buy, and the writer (seller) of the option the obligation to sell, the underlying instrument during the option period. Each Fund may write (sell) covered call and put options and purchase put and call options on any securities in which it may invest or on any securities index consisting of securities in which it may invest. A Fund may also, to the extent that it invests in foreign securities, purchase and sell (write) put and call options on foreign currencies.

The writing and purchase of options is a highly specialized activity which involves special investment risks. Options may be used for either hedging or cross-hedging purposes, or to seek to increase total return (which is considered a speculative activity). The successful use of options depends in part on the ability of the Investment Adviser to manage future price fluctuations and the degree of correlation between the options and securities (or currency) markets. If the Investment Adviser is incorrect in its expectation of changes in market prices or determination of the correlation between the instruments or indices on which options are written and purchased and the instruments in a Fund’s investment portfolio, the Fund may incur losses that it would not otherwise incur. The use of options can also increase a Fund’s transaction costs. Options written or purchased by the Funds may be traded on either U.S. or foreign exchanges or over-the-counter. Foreign and over-the-counter options will present greater possibility of loss because of their greater illiquidity and credit risks.

Futures Contracts and Options on Futures Contracts. Futures contracts are standardized, exchange-traded contracts that provide for the sale or purchase of a specified financial instrument or currency at a future time at a specified price. An option on a futures contract gives the purchaser the right (and the writer of the option the obligation) to assume a position in a futures contract at a specified exercise price within a specified period of time. A futures contract may be based on various securities (such as U.S. government securities), foreign currencies, securities indices and other financial instruments and indices. The Funds may engage in futures transactions on both U.S. and foreign exchanges.

Each Fund may purchase and sell futures contracts, and purchase and write call and put options on futures contracts, in order to seek to increase total return or to hedge against changes in interest rates, securities prices or, to the extent a Fund invests in foreign securities, currency exchange rates, or to otherwise manage its term structure, sector selection and duration in accordance with its investment objectives and policies. Each Fund may also enter into closing purchase and sale transactions with respect to such contracts and options. A Fund will engage in futures and related options transactions for bona fide hedging purposes as defined in regulations of the Commodity Futures Trading Commission or to seek to increase total return to the extent permitted by such regulations. A Fund may not purchase or sell futures contracts or purchase or sell related options to seek to increase total return, except for closing purchase or sale transactions, if immediately thereafter the sum of the amount of initial margin deposits and premiums paid on the Fund’s outstanding positions in futures and related options entered into for the purpose of seeking to increase total return would exceed 5% of the market value of the Fund’s net assets.

Futures contracts and related options present the following risks:

While a Fund may benefit from the use of futures and options on futures, unanticipated changes in interest rates, securities prices or currency exchange rates may result in poorer overall performance than if the Fund had not entered into any futures contracts or options transactions.

Because perfect correlation between a futures position and portfolio position that is intended to be protected is impossible to achieve, the desired protection may not be obtained and a Fund may be exposed to additional risk of loss.

The loss incurred by a Fund in entering into futures contracts and in writing call options on futures is potentially unlimited and may exceed the amount of the premium received.

Futures markets are highly volatile and the use of futures may increase the volatility of a Fund’s NAV.

As a result of the low margin deposits normally required in futures trading, a relatively small price movement in a futures contract may result in substantial losses to a Fund.

Futures contracts and options on futures may be illiquid, and exchanges may limit fluctuations in futures contract prices during a single day.

Foreign exchanges may not provide the same protection as U.S. exchanges.

Equity Swaps. Each Fund may invest in equity swaps. Equity swaps allow the parties to a swap agreement to exchange the dividend income or other components of return on an equity investment (for example, a group of equity securities or an index) for a component of return on another non-equity or equity investment.

An equity swap may be used by a Fund to invest in a market without owning or taking physical custody of securities in circumstances in which direct investment may be restricted for legal reasons or is otherwise impractical. Equity swaps are derivatives and their value can be very volatile. To the extent that the Investment Adviser does not accurately analyze and predict the potential relative fluctuation of the components swapped with another party, a Fund may suffer a loss. The value of some components of an equity swap (such as the dividends on a common stock) may also be sensitive to changes in interest rates. Furthermore, a Fund may suffer a loss if the counterparty defaults.

When-Issued Securities and Forward Commitments. Each Fund may purchase when-issued securities and enter into forward commitments. When-issued securities are securities that have been authorized, but not yet issued. When-issued securities are purchased in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction. A forward commitment involves the entering into a contract to purchase or sell securities for a fixed price at a future date beyond the customary settlement period.

The purchase of securities on a when-issued or forward commitment basis involves a risk of loss if the value of the security to be purchased declines before the settlement date. Conversely, the sale of securities on a forward commitment basis involves the risk that the value of the securities sold may increase before the settlement date. Although a Fund will generally purchase securities on a when-issued or forward commitment basis with the intention of acquiring the securities for its portfolio, a Fund may dispose of when-issued securities or forward commitments prior to settlement if the Investment Adviser deems it appropriate.

Repurchase Agreements. Repurchase agreements involve the purchase of securities subject to the seller’s agreement to repurchase them at a mutually agreed upon date and price. Each Fund may enter into repurchase agreements with dealers in U.S. government securities and member banks of the Federal Reserve System which furnish collateral at least equal in value or market price to the amount of their repurchase obligation.

If the other party or “seller” defaults, a Fund might suffer a loss to the extent that the proceeds from the sale of the underlying securities and other collateral held by the Fund are less than the repurchase price and the Fund’s costs associated with delay and enforcement of the repurchase agreement. In addition, in the event of bankruptcy of the seller, a Fund could suffer additional losses if a court determines that the Fund’s interest in the collateral is not enforceable.

In evaluating whether to enter into a repurchase agreement, the Investment Adviser will carefully consider the creditworthiness of the seller. Certain Funds, together with other registered investment companies having advisory agreements with the Investment Adviser or any of its affiliates, may transfer uninvested cash balances into a single joint account, the daily aggregate balance of which will be invested in one or more repurchase agreements.

Lending of Portfolio Securities. Each Fund may engage in securities lending. Securities lending involves the lending of securities owned by a Fund to financial institutions such as certain broker-dealers. The borrowers are required to secure their loan continuously with cash, cash equivalents, U.S. government securities or letters of credit in an amount at least equal to the market value of the securities loaned. Cash collateral may be invested in cash equivalents. To the extent that cash collateral is invested in other investment securities, such collateral will be subject to market depreciation or appreciation, and a Fund will be responsible for any loss that might result from its investment of the borrowers’ collateral. If the Investment Adviser determines to make securities loans, the value of the securities loaned may not exceed 33¹ /3% of the value of the total assets of a Fund (including the loan collateral).

A Fund may lend its securities to increase its income. A Fund may, however, experience delay in the recovery of its securities, or a capital loss, if the institution with which it has engaged in a portfolio loan transaction breaches its agreement with the Fund.

Short Sales Against-the-Box. Each Fund may make short sales against-the-box. A short sale against-the-box means that at all times when a short position is open the Fund will own an equal amount of securities sold short, or securities convertible into or exchangeable for, without payment of any further consideration, an equal amount of the securities of the same issuer as the securities sold short.

Preferred Stock, Warrants and Rights. Each Fund may invest in preferred stock, warrants and rights. Preferred stocks are securities that represent an ownership interest providing the holder with claims on the issuer’s earnings and assets before common stock owners but after bond owners. Unlike debt securities, the obligations of an issuer of preferred stock, including dividend and other payment obligations, may not typically be accelerated by the holders of such preferred stock on the occurrence of an event of default or other non-compliance by the issuer of the preferred stock.

Warrants and other rights are options to buy a stated number of shares of common stock at a specified price at any time during the life of the warrant or right. The holders of warrants and rights have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer.

Other Investment Companies. Each Fund may invest in securities of other investment companies (including exchange-traded funds such as SPDRs and iShares ^SM , as defined below) subject to statutory limitations prescribed by the Act. These limitations include a prohibition on any Fund acquiring more than 3% of the voting shares of any other investment company, and a prohibition on investing more than 5% of a Fund’s total assets in securities of any one investment company or more than 10% of its total assets in securities of all investment companies. A Fund will indirectly bear its proportionate share of any management fees and other expenses paid by such other investment companies. Exchange-traded funds such as SPDRs and iShares ^SM are shares of unaffiliated investment companies which are traded like traditional equity securities on a national securities exchange or the NASDAQ National Market System.

Standard & Poor’s Depositary Receipts™. The Funds may, consistent with their investment policies, purchase Standard & Poor’s Depositary Receipts (“SPDRs”). SPDRs are securities traded on the American Stock Exchange (“AMEX”) that represent ownership in the SPDR Trust, a trust which has been established to accumulate and hold a portfolio of common stocks that is intended to track the price performance and dividend yield of the S&P 500. The SPDR Trust is sponsored by a subsidiary of the AMEX. SPDRs may be used for several reasons, including, but not limited to, facilitating the handling of cash flows or trading, or reducing transaction costs. The price movement of SPDRs may not perfectly parallel the price action of the S&P 500.

iShares ^SM (formerly called World Equity Benchmark Shares). iShares are shares of an investment company that invests substantially all of its assets in securities included in the MSCI indices for specified countries. iShares are listed on the AMEX and were initially offered to the public in 1996. The market prices of iShares are expected to fluctuate in accordance with both changes in the NAVs of their underlying indices and supply and demand of iShares on the AMEX. To date, iShares have traded at relatively modest discounts and premiums to their NAVs. However, iShares have a limited operating history and information is lacking regarding the actual performance and trading liquidity of iShares for extended periods or over complete market cycles. In addition, there is no assurance that the requirements of the AMEX necessary to maintain the listing of iShares will continue to be met or will remain unchanged. In the event substantial market or other disruptions affecting iShares should occur in the future, the liquidity and value of a Fund’s shares could also be substantially and adversely affected. If such disruptions were to occur, a Fund could be required to reconsider the use of iShares as part of its investment strategy.

Unseasoned Companies. Each Fund may invest in companies (including predecessors) which have operated less than three years. The securities of such companies may have limited liquidity, which can result in their being priced higher or lower than might otherwise be the case. In addition, investments in unseasoned companies are more speculative and entail greater risk than do investments in companies with an established operating record.

Corporate Debt Obligations. Corporate debt obligations include bonds, notes, debentures, commercial paper and other obligations of corporations to pay interest and repay principal, and include securities issued by banks and other financial institutions. Each Fund may invest in corporate debt obligations issued by U.S. and certain non-U.S. issuers which issue securities denominated in the U.S. dollar (including Yankee and Euro obligations). In addition to obligations of corporations, corporate debt obligations include securities issued by banks and other financial institutions and supranational entities (i.e., the World Bank, the International Monetary Fund, etc.).

Bank Obligations. Each Fund may invest in obligations issued or guaranteed by U.S. or foreign banks. Bank obligations, including without limitations, time deposits, bankers’ acceptances and certificates of deposit, may be general obligations of the parent bank or may be limited to the issuing branch by the terms of the specific obligations or by government regulations. Banks are subject to extensive but different governmental regulations which may limit both the amount and types of loans which may be made and interest rates which may be charged. In addition, the profitability of the banking industry is largely dependent upon the availability and cost of funds for the purpose of financing lending operations under prevailing money market conditions. General economic conditions as well as exposure to credit losses arising from possible financial difficulties of borrowers play an important part in the operation of this industry.

U.S. Government Securities. Each Fund may invest in U.S. government securities. U.S. government securities include U.S. Treasury obligations and obligations issued or guaranteed by U.S. government agencies, instrumentalities or sponsored enterprises. U.S. government securities may be supported by (a) the full faith and credit of the U.S. Treasury (such as the Government National Mortgage Association (“Ginnie Mae”)); (b) the right of the issuer to borrow from the U.S. Treasury (such as securities of the Student Loan Marketing Association); (c) the discretionary authority of the U.S. government to purchase certain obligations of the issuer (such as the Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”)); or (d) only the credit of the issuer. U.S. government securities also include Treasury receipts, zero coupon bonds and other stripped U.S. government securities, where the interest and principal components of stripped U.S. government securities are traded independently.

Custodial Receipts. Each Fund may invest in custodial receipts. Interests in U.S. government securities may be purchased in the form of custodial receipts that evidence ownership of future interest payments, principal payments or both on certain notes or bonds issued or guaranteed as to principal and interest by the U.S. government, its agencies, instrumentalities, political subdivisions or authorities. For certain securities law purposes, custodial receipts are not considered obligations of the U.S. government.

Mortgage-Backed Securities. Each Fund may invest in mortgage-backed securities. Mortgage-backed securities represent direct or indirect participations in, or are collateralized by and payable from, mortgage loans secured by real property. Mortgage-backed securities can be backed by either fixed rate mortgage loans or adjustable rate mortgage loans, and may be issued by either a governmental or non-governmental entity. Privately issued mortgage-backed securities are normally structured with one or more types of “credit enhancement.” However, these mortgage-backed securities typically do not have the same credit standing as U.S. government guaranteed mortgage-backed securities.

Mortgage-backed securities may include multiple class securities, including collateralized mortgage obligations (“CMOs”) and Real Estate Mortgage Investment Conduit (“REMIC”) pass-through or participation certificates. CMOs provide an investor with a specified interest in the cash flow from a pool of underlying mortgages or of other mortgage-backed securities. CMOs are issued in multiple classes. In many cases, payments of principal are applied to the CMO classes in the order of their respective stated maturities, so that no principal payments will be made on a CMO class until all other classes having an earlier stated maturity date are paid in full. A REMIC is a CMO that qualifies for special tax treatment under the Code and invests in certain mortgages principally secured by interests in real property and other permitted investments.

Mortgaged-backed securities also include stripped mortgage-backed securities (“SMBS”), which are derivative multiple class mortgage-backed securities. SMBS are usually structured with two different classes: one that receives substantially all of the interest payments and the other that receives substantially all of the principal payments from a pool of mortgage loans. The market value of SMBS consisting entirely of principal payments generally is unusually volatile in response to changes in interest rates. The yields on SMBS that receive all or most of the interest from mortgage loans are generally higher than prevailing market yields on other mortgage-backed securities because their cash flow patterns are more volatile and there is a greater risk that the initial investment will not be fully recouped.

Asset-Backed Securities. Each Fund may invest in asset-backed securities. Asset-backed securities are securities whose principal and interest payments are collateralized by pools of assets such as auto loans, credit card receivables, leases, installment contracts and personal property. Asset-backed securities are often subject to more rapid repayment than their stated maturity date would indicate as a result of the pass-through of prepayments of principal on the underlying loans. During periods of declining interest rates, prepayment of loans underlying asset-backed securities can be expected to accelerate. Accordingly, a Fund’s ability to maintain positions in such securities will be affected by reductions in the principal amount of such securities resulting from prepayments, and its ability to reinvest the returns of principal at comparable yields is subject to generally prevailing interest rates at that time. Asset-backed securities present credit risks that are not presented by mortgage-backed securities. This is because asset-backed securities generally do not have the benefit of a security interest in collateral that is comparable to mortgage assets. There is the possibility that, in some cases, recoveries on repossessed collateral may not be available to support payments on these securities. In the event of a default, a Fund may suffer a loss if it cannot sell collateral quickly and receive the amount it is owed.

Borrowings. Each Fund can borrow money from banks and other financial institutions in amounts not exceeding one-third of its total assets for temporary or emergency purposes. A Fund may not make additional investments if borrowings exceed 5% of its total assets.

Appendix B

Prior Performance of Similarly Advised
Account of the Investment Adviser

GLOBAL TECHNOLOGY FUND

GSAM and GSAMI have served as investment adviser and sub-adviser, respectively, for one discretionary private account that has investment objectives, policies, and strategies substantially similar to the Global Technology Fund. The following table sets forth the performance data relating to the historical performance of that account. The information is provided to illustrate the past performance of the Investment Adviser in managing a substantially similar account as measured against the Index and does not represent the performance of the Global Technology Fund. Investors should not consider this performance data as a substitute for the performance of the Global Technology Fund nor should investors consider this data as an indication of future performance of the Global Technology Fund or of the Investment Adviser. The Index is unmanaged and investors cannot invest directly in the Index.

	Private Account Performance (including Class A sales charge)	Private Account Performance (including Class B sales charge)	Private Account Performance (including Class C sales charge)	Private Account Performance (excluding sales charges)	Index

2000	%	%	%	%	%

1999	%	%	%	%	%

1998	%	%	%	%	%

1997	%	%	%	%	%

1996	%	%	%	%	%

	Average Annual Total Return for the Period Ended / /00
	1 Year	3 Year	Since Inception /96

Private Account Performance (including Class A sales charge)	%	%	%

Private Account Performance (including Class B sales charge)	%	%	%

Private Account Performance (including Class C sales charge)	%	%	%

Private Account Performance (excluding sales charges)	%	%	%

Index	%	%	%

The performance information with respect to the discretionary private account is net of applicable investment management fees, brokerage commissions, execution costs and custodial fees, without provision for foreign, federal and state taxes, if any. Since fees, commissions and taxes may differ for the private discretionary account and the Global Technology Fund, performance data for identical periods may differ.

Performance reflects the deduction of the maximum 5.5% front-end sales charge with respect to Class A Shares and the maximum CDSC with respect to Class B Shares (5%) and Class C Shares (1%). All returns presented reflect the reinvestment of dividends and other earnings. The average expenses of the discretionary private account used in calculating the Investment Adviser’s performance data were % annualized, which are lower than the estimated expenses of Class A, Class B and Class C Shares of the Global Technology Fund stated under “Fund Fees and Expenses” above. The performance of the discretionary private account would have been lower if it had been subject to the expenses of the Global Technology Fund. In addition, the discretionary private account is not subject to the same diversification requirements, specific tax restrictions and investment limitations imposed on the Global Technology Fund by the Act and Subchapter M of the Code. Consequently, the performance results of the Investment Adviser’s discretionary private account could have been adversely affected if the discretionary private account had been regulated as an investment company under the federal securities laws.

Index
General Investment Management Approach		Service Providers
Fund Investment Objectives and Strategies		Dividends
Goldman Sachs Global Consumer Growth Fund		Shareholder Guide
Goldman Sachs Global Financial Services Fund		How To Buy Shares
Goldman Sachs Global Health Sciences Fund		How To Sell Shares
Goldman Sachs Global Infrastructure and Resources Fund		Taxation
Goldman Sachs Global Technology Fund		Appendix A Additional Information on Portfolio Risks, Securities and Techniques
Other Investment Practices and Securities		Appendix B Global Technology Fund—Prior Performance of Similarly Advised Account of the Investment Adviser
Principal Risks of the Funds
Fund Performance
Fund Fees and Expenses

Global Sector Funds

Prospectus (Class A, B and C Shares)

FOR MORE INFORMATION

Annual/Semi-annual Report

Additional information about the Funds’ investments is available in the Funds’ annual and semi-annual reports to shareholders. In the Funds’ annual reports, you will find a discussion of the market conditions and investment strategies that significantly affected the Funds’ performance during the last fiscal year. The annual report for the Global Consumer Growth, Global Financial Services, Global Health Sciences, Global Infrastructure and Resources and Global Technology Funds for the fiscal period ended October 31, 2001 will become available to shareholders in December 2001.

Statement of Additional Information

Additional information about the Funds and their policies is also available in the Funds’ Additional Statement. The Additional Statement is incorporated by reference into this Prospectus (is legally considered part of this Prospectus).

The Funds’ annual and semi-annual reports, and the Additional Statement, are available free upon request by calling Goldman Sachs at 1-800-526-7384.

To obtain other information and for shareholder inquiries:

By telephone – Call 1-800-526-7384

By mail – Goldman Sachs Funds, 4900 Sears Tower – 60th Floor, Chicago, IL 60606-6372

By e-mail – [email protected]

On the Internet – Text-only versions of the Funds’ documents are located online and may be downloaded from:

SEC EDGAR database – http://www.sec.gov

Goldman Sachs – http://www.gs.com (Prospectus Only)

You may review and obtain copies of Fund documents by visiting the SEC’s Public Reference Room in Washington, D.C. You may also obtain copies of Fund documents, after paying a duplicating fee, by writing to the SEC’s Public Reference Section, Washington, D.C. 20549-0102 or by electronic request to: [email protected]. Information on the operation of the public reference room may be obtained by calling the SEC at (202) 942-8090.

The Funds’ investment company registration number is 811-5349.

Standard & Poor’s Depositary Receipts™ is a trademark of The McGraw-Hill Companies, Inc.

iShares ^SM is a service mark of Barclays Global Investors.

Preliminary Prospectus dated November 22, 2000

Subject to Completion

Prospectus

Institutional Shares

February 5, 2001

GOLDMAN SACHS GLOBAL SECTOR FUNDS

Goldman Sachs Global Consumer Growth Fund

Goldman Sachs Global Financial Services Fund

n	Goldman Sachs Global Health Sciences Fund

n	Goldman Sachs Global Infrastructure and Resources Fund

n	Goldman Sachs Global Technology Fund

[Artwork to be inserted]

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

[LOGO OF GOLDMAN SACHS]

NOT FDIC-INSURED

May Lose Value

No Bank Guarantee

General Investment
Management Approach

GLOBAL SECTOR STYLE FUNDS

Goldman Sachs’ Global Sector Fund Philosophy:

The Investment Adviser believes that the behavior of global equity markets is changing as:

Revenues are driven by global expansion

Globalization drives companies to merge across regions and continents

Investors increasingly invest globally rather than regionally

A strong business franchise and competitive advantages

Skillful management whose interests are aligned with shareholders

Potential to generate high returns on invested capital

Potential to drive sustainable growth through reinvestment

Attractive relative valuation

Fund Investment Objectives
and Strategies

Goldman Sachs Global Consumer

Growth Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the consumer products and services sectors.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

Goldman Sachs

Global Financial Services Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the financial services sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

Goldman Sachs

Global Health Sciences Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the health sciences sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

A-7

Goldman Sachs Global

Infrastructure and Resources Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the infrastructure and resources sectors.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will invest in domestic and foreign securities and may allocate its assets among countries as determined by the Investment Adviser, as long as the Fund’s assets are invested in at least three countries. The Fund expects to invest a substantial portion of it assets in securities of companies in the developed countries of North America, Western Europe, the Pacific region, Japan, Australia and New Zealand. The Fund may invest more that 25% of its total assets in the securities of issuers located in each of the United States, Canada, Germany, Japan and the United Kingdom. Not more that 25% of the Fund’s total assets will be invested in securities of issuers in any other single country. The Fund may also invest up to 30% of its total assets in companies located in countries with emerging economies and those with less developed securities markets, including countries in Africa, Asia, Eastern Europe and Latin and South America.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

A-9

Goldman Sachs

Global Technology Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the technology sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will invest in domestic and foreign securities and may allocate its assets among countries as determined by the Investment Adviser, as long as the Fund’s assets are invested in at least three countries. The Fund expects to invest a substantial portion of its assets in securities of companies in the developed countries of North America, Western Europe, the Pacific region, Japan, Australia and New Zealand. The Fund may invest more that 25% of its total assets in the securities of issuers located in each of the United States, Canada, Germany, Japan and the United Kingdom. Not more than 25% of the Fund’s total assets will be invested in securities of issuers in any other single country. The Fund may also invest up to 30% of its total assets in companies located in countries with emerging economies and those with less developed securities markets, including countries in Africa, Asia, Eastern Europe and Latin and South America.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

Other Investment Practices
and Securities

10 Percent of total assets (italic type) 10 Percent of net assets (roman type) Ÿ No specific percentage limitation on usage; limited only by the objectives and strategies of the Fund	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Investment Practices

Borrowings	33 1/3	33 1/3	33 1/3	33 1/3	33 1/3

Credit, Index, Interest Rate and Mortgage Swaps*	15	15	15	15	15

Currency Swaps*	15	15	15	15	15

Cross Hedging of Currencies	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Custodial Receipts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Equity Swaps*	15	15	15	15	15

Foreign Currency Transactions	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Futures Contracts and Options on Futures Contracts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Investment Company Securities (including exchange-traded funds)	10	10	10	10	10

Options on Foreign Currencies ¹	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Options on Securities and Securities Indices ²	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Repurchase Agreements	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Securities Lending	33 1/3	33 1/3	33 1/3	33 1/3	33 1/3

Short Sales Against the Box	25	25	25	25	25

Unseasoned Companies	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Warrants and Stock Purchase Rights	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

When-Issued Securities and Forward Commitments	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

*	Limited to 15% of net assets (together with other illiquid securities) for all structured securities which are not deemed to be liquid and all swap transactions.

1	The Funds may purchase and sell call and put options.

2	The Funds may sell covered call and put options and purchase call and put options.

OTHER INVESTMENT PRACTICES AND SECURITIES

10 Percent of total assets (italic type) 10 Percent of net assets (roman type) Ÿ No specific percentage limitation on usage; limited only by the objectives and strategies of the Fund	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Investment Securities

American, European and Global Depositary Receipts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Asset-Backed and Mortgage- Backed Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Bank Obligations ^3,4	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Convertible Securities ⁵	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Corporate Debt Obligations ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Equity Securities	80+	80+	80+	80+	80+

Emerging Country Securities	30	30	30	30	30

Fixed Income Securities ⁶	20	20	20	20	20

Foreign Securities	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Foreign Government Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Non-Investment Grade Fixed Income Securities ³	^Ÿ7	^Ÿ7	^Ÿ7	^Ÿ7	^Ÿ7

Real Estate Investment Trusts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Stripped Mortgage-Backed Securities ^*, ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Structured Securities ^*	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Temporary Investments	100	100	100	100	100

U.S. Government Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

3	Limited by the amount the Fund invests in fixed-income securities.

4	Issued by U.S. or foreign banks.

5	Convertible securities purchased by the Funds use the same rating criteria for convertible and non-convertible debt securities.

6	Except as noted under “Non-Investment Grade Fixed Income Securities,” fixed-income securities are investment grade (e.g., BBB or higher by Standard & Poor’s Rating Group (“Standard & Poor’s”) or Baa or higher by Moody’s Investor Services, Inc. (“Moody’s)).

7	May be BB or lower by Standard & Poor’s or Ba or lower by Moody’s.

Principal Risks of the Funds

Ÿ Applicable	Global Consumer Growth	Global Financial Services	Global Health Sciences	Global Infrastructure and Resources	Global Technology


Industry Concentration	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Credit/Default	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Emerging Countries	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Interest Rate	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Small Cap	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Foreign	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Derivatives	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Management	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Market	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Liquidity	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

REIT Risk	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Stock	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Geographic	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Initial Public Offering (“IPO”)	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

All Funds:

PRINCIPAL RISKS OF THE FUNDS

Consumer products and services companies are particularly subject to risk of loss caused by government regulation, competition, changes in demographics and consumer tastes and economic conditions.

Financial services companies are particularly subject to risk of loss caused by economic conditions, interest rates, intense competition and government regulation.

Health sciences companies are particularly subject to risk of loss caused by intense competition and government regulation.

Infrastructure and resources companies are particularly subject to risk of loss caused by economic conditions, the level and volatility of commodity prices and government regulation.

Technology companies are particularly subject to risk of loss caused by intense competition, rapid obsolescence of products and government regulation.

n	*Credit/Default Risk*—The risk that an issuer or guarantor of fixed-income securities held by a Fund (which may have low credit ratings) may default on its obligation to pay interest and repay principal.

n	*Interest Rate Risk*—The risk that when interest rates increase, securities held by a Fund will decline in value. Long-term fixed-income securities will normally have more price volatility because of this risk than short-term fixed-income securities.

n	*Derivatives Risk*—The risk that loss may result from a Fund’s investments in options, futures, swaps, structured securities and other derivative instruments. These instruments may be leveraged so that small changes may produce disproportionate losses to a Fund.

n	*Management Risk*—The risk that a strategy used by the Investment Adviser may fail to produce the intended results.

n	*Market Risk*—The risk that the value of the securities in which a Fund invests may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be temporary or last for extended periods.

n	*Stock Risk*—The risk that stock prices have historically risen and fallen in periodic cycles. Recently, U.S. stock markets and certain foreign stock markets were trading at or close to record high levels. There is no guarantee that such levels will continue.

Fund Performance

HOW THE FUNDS HAVE PERFORMED

The Funds commenced operations as of the date of this Prospectus. Therefore, no performance information is provided in this section.

Fund Fees and Expenses (Institutional Shares)

This table describes the fees and expenses that you would pay if you buy and hold Institutional Shares of a Fund.

	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Shareholder Fees
(fees paid directly from your investment):

Maximum Sales Charge (Load) Imposed on Purchases	None	None	None	None	None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None	None	None	None	None
Redemption Fees	None	None	None	None	None
Exchange Fees	None	None	None	None	None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):¹

Management Fees	1.10%	1.10%	1.10%	1.10%	1.10%
Distribution and Service (12b-1) Fees	None	None	None	None	None
Other Expenses ²	1.27%	0.75%	0.72%	1.27%	0.77%

Total Fund Operating Expenses*	2.37%	1.85%	1.82%	2.37%	1.87%

See page for all other footnotes.

As a result of current expense limitations, “Other Expenses” and “Total Fund Operating Expenses” of the Funds which are actually incurred as of the date of this Prospectus are as set forth below. The expense limitations may be terminated at any time at the option of the Investment Adviser. If this occurs, “Other Expenses” and “Total Fund Operating Expenses” may increase without shareholder approval.

	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets): ¹
Management Fees	1.10%	1.10%	1.10%	1.10%	1.10%
Distribution and Services (12b-1) Fees	None	None	None	None	None
Other Expenses ²	0.15%	0.15%	0.15%	0.15%	0.15%

Total Fund Operating Expenses (after current expense limitations)	1.25%	1.25%	1.25%	1.25%	1.25%

Fund Fees and Expenses continued

¹ Each Fund’s expenses are estimated for the current fiscal year.

² “Other Expenses” include transfer agency fees equal to 0.04% of the average daily net assets of each Fund’s Institutional Shares plus all other ordinary expenses not detailed above. The Investment Adviser has voluntarily agreed to reduce or limit “Other Expenses”(excluding management fees, transfer agency fees, taxes, interest and brokerage fees and litigation, indemnification and other extraordinary expenses) to the following percentages of each Fund’s average daily net assets:

Fund		Other Expenses


Global Consumer Growth		0.11%

Global Financial Services		0.11%

Global Health Sciences		0.11%

Global Infrastructure and Resources		0.11%

Global Technology		0.11%

FUND FEES AND EXPENSES

Example

The following Example is intended to help you compare the cost of investing in a Fund (without the expense limitations) with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Institutional Shares of a Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that a Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

Fund	1 Year	3 Years

Global Consumer Growth	$240	$739

Global Financial Services	$188	$582

Global Health Sciences	$185	$573

Global Infrastructure and Resources	$240	$739

Global Technology	$190	$588

Institutions that invest in Institutional Shares on behalf of their customers may charge other fees directly to their customer accounts in connection with their investments. You should contact your institution for information regarding such charges. Such fees, if any, may affect the return such customers realize with respect to their investments.

Certain institutions that invest in Institutional Shares on behalf of their customers may receive other compensation in connection with the sale and distribution of Institutional Shares or for services to their customers’ accounts and/or the Funds. For additional information regarding such compensation, see “Shareholder Guide” in the Prospectus and “Other Information” in the Statement of Additional Information (“Additional Statement”).

Service Providers

INVESTMENT ADVISER

Investment Adviser

GSAM		GSAMI
32 Old Slip		133 Peterborough Court
New York, New York 10005		London, England EC4A 2BB

GSAM and GSAMI serve as the investment adviser to each Fund.

The Investment Adviser also performs the following additional services for the Funds:

Supervises all non-advisory operations of the Funds

Provides personnel to perform necessary executive, administrative and clerical services to the Funds

Maintains the records of each Fund

Provides office space and all necessary office equipment and services

MANAGEMENT FEES

		Contractual Rate

Global Consumer Growth		1.10%

Global Financial Services		1.10%

Global Health Sciences		1.10%

Global Infrastructure and Resources		1.10%

Global Technology		1.10%

The Investment Adviser may voluntarily waive a portion of its advisory fee from time to time, and may discontinue any voluntary waiver at any time at its discretion.

FUND MANAGERS

SERVICE PROVIDERS

GLOBAL CONSUMER GROWTH TEAM

The portfolio managers leverage the fundamental research and local market presence of the 29 member Global Consumer Growth Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL CONSUMER GROWTH FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Gregory H. Ekizian Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Ekizian joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1990 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

David G. Shell Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Shell joined the Investment Adviser as a portfolio manager in 1997. From 1987 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Rory Bateman Executive Director Portfolio Manager	GSAMI—London	Since 2001	Mr. Bateman joined the Investment Adviser as a research analyst in 1996 and was a portfolio manager with the European Management Group. From 1995 to 1996, he was an analyst with CIN Management.

GLOBAL FINANCIAL SERVICES TEAM

The portfolio managers leverage the fundamental research and local market presence of the 13 member Global Financial Services Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL FINANCIAL SERVICES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Sunreil Mahindru Executive Director Senior Portfolio Manager	GSAMI—London	Since 2001	Mr. Mahindru joined the Investment Adviser as a portfolio manager in 1996 and is now a senior portfolio manager with the United Kingdom Portfolio Management Group. From 1993 to 1996, he was an analyst at CIN Management.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Shogo Maeda Managing Director Senior Portfolio Manager	GSAMI— Tokyo	Since 2001	Mr. Maeda joined the Investment Adviser as a portfolio manager in 1994. From 1987 to 1994, he worked at Nomura Investment Management Incorporated as a Senior Portfolio Manager.

GLOBAL HEALTH SCIENCES TEAM

The portfolio managers leverage the fundamental research and local market presence of the 21 member Global Health Sciences Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL HEALTH SCIENCES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Gregory H. Ekizian Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Ekizian joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1990 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

Stuart McPherson Executive Director Senior Portfolio Manager	GSAMI— London	Since 2001	Mr. McPherson joined the Investment Adviser as a senior portfolio manager in 1996. From 1987 to 1996, he worked as both an U.S. equity analyst and an equity portfolio manager for CIN Management.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Miyako Shibamoto Vice President Portfolio Manager	GSAMI— Tokyo	Since 2001	Ms. Shibamoto joined the Investment Adviser as a member of the Japanese Equity team in March 1998. From 1993 to 1994, she was an Assistant Vice President and from 1994 to 1998, she was a Vice President at Scudder Stevens and Clark (Japan).

SERVICE PROVIDERS

GLOBAL INFRASTRUCTURE AND RESOURCES TEAM

GLOBAL INFRASTRUCTURE AND RESOURCES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Julian Abel Executive Director Portfolio Manager	GSAMI— London	Since 2001	Mr. Abel joined the Investment Adviser in 1996 as a senior portfolio manager with the UK and European Equity Team. Prior to joining Goldman Sachs, he spent twelve years at CIN Management.

Kamran Baig Executive Director Portfolio Manager	GSAMI— London	Since 2001	Mr. Baig joined the Investment Adviser as a senior portfolio manager in the Pan-European Institutional Portfolio Management Group in 2000. From 1992 to 2000, he was a senior industry research analyst for Alliance Capital Management.

GLOBAL TECHNOLOGY TEAM

The portfolio managers leverage the fundamental research and local market presence of the 21 member Global Technology Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL TECHNOLOGY FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Robert G. Collins Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Collins joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1991 to 1997, he was a portfolio manager at Liberty.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Tara Connolly Executive Director Senior Portfolio Manager	GSAMI— London	Since 2001	Ms. Connolly joined the Investment Adviser in 1997 as a research analyst and is a senior portfolio manager for the Goldman Sachs Technology Portfolio, a foreign fund. Prior to this, she spent three years with Goldman Sachs’ Investment Banking Division in New York and was a consultant at the Wharton Small Business Development Center.

Hadi Kabalan Associate Portfolio Manager	GSAMI— London	Since 2001	Mr. Kabalan joined the Investment Adviser in April 1997 as a research analyst and is a portfolio manager for the Goldman Sachs Technology Portfolio, a foreign fund. From December 1996 to April 1997, he was an analyst in the discretionary investment private banking area of Citibank.

Scott Kolar Vice President Senior Portfolio Manager	GSAM— Tampa	Since 2001	Mr. Kolar joined the Investment Adviser as an equity analyst in 1997 and became a portfolio manager in 1999. From 1994 to 1997, he was an equity analyst and information systems specialist at Liberty.

David G. Shell Managing Director Senior Portfolio Manager	GSAM— Tampa	Since 2001	Mr. Shell joined the Investment Adviser as a portfolio manager in 1997. From 1987 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

DISTRIBUTOR AND TRANSFER AGENT

SERVICE PROVIDERS

ACTIVITIES OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER ACCOUNTS MANAGED BY GOLDMAN SACHS

Dividends

Each Fund pays dividends from its net investment income and capital gain net income. You may choose to have dividends paid in:

Cash

n	Additional shares of the same class of the same Fund

n	Shares of the same or an equivalent class of another Goldman Sachs Fund. Special restrictions may apply for certain ILA Portfolios. See the Additional Statement.

The election to reinvest dividends in additional shares will not affect the tax treatment of such dividends, which will be treated as received by you and then used to purchase the shares.

Dividends from net investment income and capital gain net income are declared and paid annually by each Fund.

From time to time a portion of a Fund’s dividends may constitute a return of capital.

Shareholder Guide

The following section will provide you with answers to some of the most often asked questions regarding buying and selling the Funds’ Institutional Shares.

HOW TO BUY SHARES

How Can I Purchase Institutional Shares Of The Funds?

You may purchase Institutional Shares on any business day at their NAV next determined after receipt of an order. No sales load is charged. You should place an order with Goldman Sachs at 1-800-621-2550 and either:

Wire federal funds to The Northern Trust Company (“Northern”), as subcustodian for State Street Bank and Trust Company (“State Street”) (each Fund’s custodian) on the next business day; or

Send a check or Federal Reserve draft payable to Goldman Sachs Funds—(Name of Fund and Class of Shares), 4900 Sears Tower—60th Floor, Chicago, IL 60606-6372. The Fund will not accept a check drawn on a foreign bank or a third-party check.

In order to make an initial investment in a Fund, you must furnish to the Fund or Goldman Sachs the Account Application. Purchases of Institutional Shares must be settled within three business days of receipt of a complete purchase order.

In certain instances, the Trust may require a signature guarantee in order to effect purchase, redemption or exchange transactions. Signature guarantees must be obtained from a bank, brokerage firm or other financial intermediary that is a member of an approved Medallion Guarantee Program or that is otherwise approved by the Trust. A notary public cannot provide a signature guarantee.

How Do I Purchase Shares Through A Financial Institution?

Certain institutions (including banks, trust companies, brokers and investment advisers) that provide recordkeeping, reporting and processing services to their customers may be authorized to accept, on behalf of Goldman Sachs Trust (the “Trust”), purchase, redemption and exchange orders placed by or on behalf of their customers, and may designate other intermediaries to accept such orders, if approved by the Trust. In these cases:

A Fund will be deemed to have received an order in proper form when the order is accepted by the authorized institution or intermediary on a business day, and the order will be priced at the Fund’s NAV next determined after such acceptance.

Authorized institutions and intermediaries will be responsible for transmitting accepted orders and payments to the Trust within the time period agreed upon by them.

You should contact your institution or intermediary to learn whether it is authorized to accept orders for the Trust.

These institutions may receive payments from the Funds or Goldman Sachs for the services provided by them with respect to the Funds’ Institutional Shares. These payments may be in addition to other payments borne by the Funds.

The Investment Adviser, Distributor and/or their affiliates may pay additional compensation from time to time, out of their assets and not as an additional charge to the Funds, to certain institutions and other persons in connection with the sale, distribution and/or servicing of shares of the Funds and other Goldman Sachs Funds. Additional compensation based on sales may, but is currently not expected to, exceed 0.50% (annualized) of the amount invested.

In addition to Institutional Shares, each Fund also offers other classes of shares to investors. These other share classes are subject to different fees and expenses (which affect performance), have different minimum investment requirements and are entitled to different services than Institutional Shares. Information regarding these other share classes may be obtained from your sales representative or from Goldman Sachs by calling the number on the back cover of this Prospectus.

SHAREHOLDER GUIDE

What is My Minimum Investment in the Funds?

Type of Investor		Minimum Investment

n	Banks, trust companies or other depository institutions investing for their own account or on behalf of clients	$1,000,000 in Institutional Shares of a Fund alone or in combination with other assets under the management of GSAM and its affiliates
n	Pension and profit sharing plans, pension funds and other company- sponsored benefit plans
n	State, county, city or any instrumentality, department, authority or agency thereof
n	Corporations with at least $100 million in assets or in outstanding publicly traded securities
n	“Wrap” account sponsors (provided they have an agreement covering the arrangement with GSAM)
n	Registered investment advisers investing for accounts for which they receive asset-based fees

n	Individual investors	$10,000,000
n	Qualified non-profit organizations, charitable trusts, foundations and endowments
n	Accounts over which GSAM or its advisory affiliates have investment discretion

The minimum investment requirement may be waived for current and former officers, partners, directors or employees of Goldman Sachs or any of its affiliates or for other investors at the discretion of the Trust’s officers. No minimum amount is required for subsequent investments.

What Else Should I Know About Share Purchases?

The Trust reserves the right to:

Modify or waive the minimum investment amounts.

Reject or restrict any purchase or exchange orders by a particular purchaser (or group of related purchasers). This may occur, for example, when a pattern of frequent purchases, sales or exchanges of Institutional Shares of a Fund is evident, or if purchases, sales or exchanges are, or a subsequent abrupt redemption might be, of a size that would disrupt the management of a Fund.

Close a Fund to new investors from time to time and reopen any such Fund whenever it is deemed appropriate by a Fund’s Investment Adviser.

The Funds may allow you to purchase shares with securities instead of cash if consistent with a Fund’s investment policies and operations and if approved by the Fund’s Investment Adviser.

How Are Shares Priced?

The price you pay or receive when you buy, sell or exchange Institutional Shares is determined by a Fund’s NAV. The Funds calculate NAV as follows:

(Value of Assets of the Class)

NAV =

– (Liabilities of the Class)

Number of Outstanding Shares of the Class

NAV per share of each class is calculated by State Street on each business day as of the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. New York time). Fund shares will not be priced on any day the New York Stock Exchange is closed.

When you buy shares, you pay the NAV next calculated after the Funds receive your order in proper form.

When you sell shares, you receive the NAV next calculated after the Funds receive your order in proper form.

SHAREHOLDER GUIDE

HOW TO SELL SHARES

How Can I Sell Institutional Shares Of The Funds?

You may arrange to take money out of your account by selling (redeeming) some or all of your shares. Generally, each Fund will redeem its Institutional Shares upon request on any business day at their NAV next determined after receipt of such request in proper form. You may request that redemption proceeds be sent to you by check or by wire (if the wire instructions are on record). Redemptions may be requested in writing or by telephone.

Instructions For Redemptions:

By Writing:	n Write a letter of instruction that includes:
	n Your name(s) and signature(s)
	n Your account number
	n The Fund names and Class of Shares
	n The dollar amount you want to sell
	n How and where to send the proceeds
	n Mail your request to:
	Goldman Sachs Funds
	4900 Sears Tower—60th Floor
	Chicago, IL 60606-6372

By Telephone:	If you have elected the telephone redemption privilege on your Account Application:
	n 1-800-621-2550
	(8:00 a.m. to 4:00 p.m. New York time)

Certain institutions and intermediaries are authorized to accept redemption requests on behalf of the Funds as described under “How Do I Purchase Shares Through A Financial Institution?”

What Do I Need To Know About Telephone Redemption Requests?

The Trust, the Distributor and the Transfer Agent will not be liable for any loss you may incur in the event that the Trust accepts unauthorized telephone redemption requests that the Trust reasonably believes to be genuine. In an effort to prevent unauthorized or fraudulent redemption and exchange requests by telephone, Goldman Sachs employs reasonable procedures specified by the Trust to confirm that such instructions are genuine. If reasonable procedures are not employed, the Trust may be liable for any loss due to unauthorized or fraudulent transactions. The following general policies are currently in effect:

All telephone requests are recorded.

Any redemption request that requires money to go to an account or address other than that designated on the Account Application must be in writing and signed by an authorized person designated on the Account Application. The written request may be confirmed by telephone with both the requesting party and the designated bank account to verify instructions.

The telephone redemption option may be modified or terminated at any time.

Note: It may be difficult to make telephone redemptions in times of drastic economic or market conditions.

How Are Redemption Proceeds Paid?

To change the bank designated on your Account Application, you must send written instructions signed by an authorized person designated on the Account Application to the Transfer Agent.

Neither the Trust, Goldman Sachs nor any other institution assumes any responsibility for the performance of your bank or any intermediaries in the transfer process. If a problem with such performance arises, you should deal directly with your bank or any such intermediaries.

By Check: You may elect in writing to receive your redemption proceeds by check. Redemption proceeds paid by check will normally be mailed to the address of record within three business days of a properly executed redemption request. If you are selling shares you recently paid for by check, the Fund will pay you when your check has cleared, which may take up to 15 days.

What Else Do I Need To Know About Redemptions?

The following generally applies to redemption requests:

Additional documentation may be required when deemed appropriate by the Transfer Agent. A redemption request will not be in proper form until such additional documentation has been received.

Institutions (including banks, trust companies, brokers and investment advisers) are responsible for the timely transmittal of redemption requests by their customers to the Transfer Agent. In order to facilitate the timely transmittal of redemption requests, these institutions may set times by which they must receive redemption requests. These institutions may also require additional documentation from you.

The Trust reserves the right to:

Redeem your shares if your account balance falls below $50 as a result of earlier redemptions. The Funds will not redeem your shares on this basis if the value of your account falls below the minimum account balance solely as a result of market conditions. The Fund will give you 60 days’ prior written notice to allow you to purchase sufficient additional shares of the Fund in order to avoid such redemption.

Redeem your shares in other circumstances determined by the Board of Trustees to be in the best interest of the Trust.

Reinvest any dividends or other distributions which you have elected to receive in cash should your check for such dividends or other distributions be returned to the Fund as undeliverable or remain uncashed for six months. In addition, that distribution and all future distributions payable to you will be reinvested at NAV in additional Institutional Shares of the Fund that pays the distributions. No interest will accrue on amounts represented by uncashed distribution or redemption checks.

Can I Exchange My Investment From One Fund To Another?

You may exchange Institutional Shares of a Fund at NAV for Institutional Shares of any other Goldman Sachs Fund. The exchange privilege may be materially modified or withdrawn at any time upon 60 days’ written notice to you.

Instructions For Exchanging Shares:

By Writing:	n	Write a letter of instruction that includes:
		n Your name(s) and signature(s) n Your account number n The Fund names and Class of Shares n The dollar amount to be exchanged
	n	Mail the request to: Goldman Sachs Funds 4900 Sears Tower—60th Floor Chicago, IL 60606-6372

By Telephone:	If you have elected the telephone exchange privilege on your Account Application:
	n	1-800-621-2550 (8:00 a.m. to 4:00 p.m. New York time)

You should keep in mind the following factors when making or considering an exchange:

You should obtain and carefully read the prospectus of the Fund you are acquiring before making an exchange.

All exchanges which represent an initial investment in a Fund must satisfy the minimum initial investment requirements of that Fund, except that this requirement may be waived at the discretion of the Trust.

Telephone exchanges normally will be made only to an identically registered account.

Shares may be exchanged among accounts with different names, addresses and social security or other taxpayer identification numbers only if the exchange instructions are in writing and are signed by an authorized person designated on the Account Application.

Exchanges are available only in states where exchanges may be legally made.

It may be difficult to make telephone exchanges in times of drastic economic or market conditions.

Goldman Sachs may use reasonable procedures described under “What Do I Need To Know About Telephone Redemption Requests?” in an effort to prevent unauthorized or fraudulent telephone exchange requests.

What Types of Reports Will I Be Sent Regarding Investments In Institutional Shares?

You will receive an annual report containing audited financial statements and a semi-annual report. To eliminate unnecessary duplication, only one copy of such reports will be sent to shareholders with the same mailing address. If you would like a duplicate copy to be mailed to you, please contact Goldman Sachs Funds at 1-800-621-2550. You will also be provided with a printed confirmation for each transaction in your account and a monthly account statement. The Funds do not generally provide sub-accounting services.

Taxation

Unless your investment is an IRA or other tax-advantaged account, you should consider the possible tax consequences of Fund distributions and the sale of your Fund shares.

DISTRIBUTIONS

SALES AND EXCHANGES

OTHER INFORMATION

Appendix A

Additional Information on Portfolio Risks, Securities and Techniques

A. General Portfolio Risks

B. Other Portfolio Risks

Concentration of a Fund’s assets in one or a few countries and currencies will subject a Fund to greater risks than if a Fund’s assets were not geographically concentrated.

APPENDIX A

A Fund’s investment in emerging countries may also be subject to withholding or other taxes, which may be significant and may reduce the return from an investment in such country to the Fund.

Both domestic and foreign securities that are not readily marketable

Certain stripped mortgage-backed securities

Repurchase agreements and time deposits with a notice or demand period of more than seven days

Certain over-the-counter options

Certain structured securities and all swap transactions

APPENDIX A

Temporary Investment Risks. Each Fund may, for temporary defensive purposes, invest a certain percentage of its total assets in:

U.S. government securities

Commercial paper rated at least A-2 by Standard & Poor’s or P-2 by Moody’s

Certificates of deposit

Bankers’ acceptances

Repurchase agreements

Non-convertible preferred stocks and non-convertible corporate bonds with a remaining maturity of less than one year

When a Fund’s assets are invested in such instruments, the Fund may not be achieving its investment objective.

APPENDIX A

C. Portfolio Securities and Techniques

Futures contracts and related options present the following risks:

The loss incurred by a Fund in entering into futures contracts and in writing call options on futures is potentially unlimited and may exceed the amount of the premium received.

Futures markets are highly volatile and the use of futures may increase the volatility of a Fund’s NAV.

As a result of the low margin deposits normally required in futures trading, a relatively small price movement in a futures contract may result in substantial losses to a Fund.

Futures contracts and options on futures may be illiquid, and exchanges may limit fluctuations in futures contract prices during a single day.

Foreign exchanges may not provide the same protection as U.S. exchanges.

Appendix B

Prior Performance of Similarly Advised Account of the Investment Adviser

GLOBAL TECHNOLOGY FUND

	Private Account Performance		Index

2000		%		%
1999		%		%
1998		%		%
1997		%		%
1996		%		%

Average Annual Total Return
for the Period Ended   /  /00

1 Year

3 Year

Since
Inception
/  /

Private Account Performance % % %

               Index % % %

All returns presented reflect the reinvestment of dividends and other earnings. The average expenses of the discretionary private account used in calculating the Investment Adviser’s performance data were % annualized, which are lower than the estimated expenses of Institutional Shares of the Global Technology Fund stated under “Fund Fees and Expenses” above. The performance of the discretionary private account would have been lower if it had been subject to the expenses of the Global Technology Fund. In addition, the discretionary private account is not subject to the same diversification requirements, specific tax restrictions and investment limitations imposed on the Global Technology Fund by the Act and Subchapter M of the Code. Consequently, the performance results of the Investment Adviser’s discretionary private account could have been adversely affected if the discretionary private account had been regulated as an investment company under the federal securities laws.

Index

General Investment
Management Approach

Fund Investment Objectives
and Strategies
    Goldman Sachs Global Consumer
     Growth Fund
     Goldman Sachs Global Financial
     Services Fund
     Goldman Sachs Global Health
     Sciences Fund
     Goldman Sachs Global
     Infrastructure and Resources Fund
     Goldman Sachs Global
     Technology Fund

Other Investment Practices and
Securities

Principal Risks of the Funds

Fund Performance

Fund Fees and Expenses

Service Providers

Dividends

Shareholder Guide
How To Buy Shares
How To Sell Shares

Taxation

Appendix A
Additional Information on
Portfolio Risks, Securities and
Techniques

Appendix B
Global Technology Fund—
Prior Performance of Similarly
Advised Account of the
Investment Adviser

Global Sector Funds

Prospectus (Institutional Shares)

FOR MORE INFORMATION

Annual/Semi-annual Report

Statement of Additional Information

The Funds’ annual and semi-annual reports, and the Additional Statement, are available free upon request by calling Goldman Sachs at 1-800-621-2550.

To obtain other information and for shareholder inquiries:

By telephone – Call 1-800-621-2550

By mail – Goldman Sachs Funds, 4900 Sears Tower – 60th Floor, Chicago, IL 60606-6372

By e-mail – [email protected]

On the Internet – Text-only versions of the Funds’ documents are located online and may be downloaded from:

SEC EDGAR database – http://www.sec.gov

The Funds’ investment company registration number is 811-5349.

Standard and Poor’s Depositary Receipts™ is a trademark of the McGraw-Hill Companies, Inc.

iShares ^SM is a service mark of Barclays Global Investors.

Preliminary Prospectus dated November 22, 2000

Subject to Completion

Prospectus

Service
Shares

February 5, 2001

GOLDMAN SACHS GLOBAL SECTOR FUNDS

n	Goldman Sachs Global Consumer Growth Fund

n	Goldman Sachs Global Financial Services Fund

n	Goldman Sachs Global Health Sciences Fund

n	Goldman Sachs Global Infrastructure and Resources Fund

n	Goldman Sachs Global Technology Fund

[LOGO OF GOLDMAN SACHS]

[Artwork to Be Inserted]

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

NOT FDIC-INSURED

May Lose Value

No Bank Guarantee

General Investment
Management Approach

GLOBAL SECTOR STYLE FUNDS

Goldman Sachs’ Global Sector Fund Philosophy:

The Investment Adviser believes that the behavior of global equity markets is changing as:

Revenues are driven by global expansion

Globalization drives companies to merge across regions and continents

Investors increasingly invest globally rather than regionally

A strong business franchise and competitive advantages

Skillful management whose interests are aligned with shareholders

Potential to generate high returns on invested capital

Potential to drive sustainable growth through reinvestment

Attractive relative valuation

Fund Investment Objectives
and Strategies

Goldman Sachs Global Consumer

Growth Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the consumer products and services sectors.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

Goldman Sachs

Global Financial Services Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the financial services sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

Goldman Sachs

Global Health Sciences Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the health sciences sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

A-7

Goldman Sachs Global

Infrastructure and Resources Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the infrastructure and resources sectors.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will invest in domestic and foreign securities and may allocate its assets among countries as determined by the Investment Adviser, as long as the Fund’s assets are invested in at least three countries. The Fund expects to invest a substantial portion of it assets in securities of companies in the developed countries of North America, Western Europe, the Pacific region, Japan, Australia and New Zealand. The Fund may invest more that 25% of its total assets in the securities of issuers located in each of the United States, Canada, Germany, Japan and the United Kingdom. Not more that 25% of the Fund’s total assets will be invested in securities of issuers in any other single country. The Fund may also invest up to 30% of its total assets in companies located in countries with emerging economies and those with less developed securities markets, including countries in Africa, Asia, Eastern Europe and Latin and South America.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

A-9

Goldman Sachs

Global Technology Fund

FUND FACTS

Objective:

Long-term growth of capital

Investment Focus:

Equity securities of domestic and foreign companies that offer the potential for long-term growth of capital with a primary focus on the technology sector.

Investment Style:

Global Sector

INVESTMENT OBJECTIVE

The Fund seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

The Fund will invest in domestic and foreign securities and may allocate its assets among countries as determined by the Investment Adviser, as long as the Fund’s assets are invested in at least three countries. The Fund expects to invest a substantial portion of its assets in securities of companies in the developed countries of North America, Western Europe, the Pacific region, Japan, Australia and New Zealand. The Fund may invest more that 25% of its total assets in the securities of issuers located in each of the United States, Canada, Germany, Japan and the United Kingdom. Not more than 25% of the Fund’s total assets will be invested in securities of issuers in any other single country. The Fund may also invest up to 30% of its total assets in companies located in countries with emerging economies and those with less developed securities markets, including countries in Africa, Asia, Eastern Europe and Latin and South America.

FUND INVESTMENT OBJECTIVES AND STRATEGIES

The Fund may invest in securities of companies of any capitalization, but expects to invest a substantial portion of its assets in large cap securities.

Other Investment Practices
and Securities

10 Percent of total assets (italic type) 10 Percent of net assets (roman type) Ÿ No specific percentage limitation on usage; limited only by the objectives and strategies of the Fund	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Investment Practices

Borrowings	33 1/3	33 1/3	33 1/3	33 1/3	33 1/3

Credit, Index, Interest Rate and Mortgage Swaps*	15	15	15	15	15

Currency Swaps*	15	15	15	15	15

Cross Hedging of Currencies	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Custodial Receipts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Equity Swaps*	15	15	15	15	15

Foreign Currency Transactions	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Futures Contracts and Options on Futures Contracts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Investment Company Securities (including exchange-traded funds)	10	10	10	10	10

Options on Foreign Currencies ¹	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Options on Securities and Securities Indices ²	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Repurchase Agreements	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Securities Lending	33 1/3	33 1/3	33 1/3	33 1/3	33 1/3

Short Sales Against the Box	25	25	25	25	25

Unseasoned Companies	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Warrants and Stock Purchase Rights	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

When-Issued Securities and Forward Commitments	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

*	Limited to 15% of net assets (together with other illiquid securities) for all structured securities which are not deemed to be liquid and all swap transactions.

1	The Funds may purchase and sell call and put options.

2	The Funds may sell covered call and put options and purchase call and put options.

OTHER INVESTMENT PRACTICES AND SECURITIES

10 Percent of total assets (italic type) 10 Percent of net assets (roman type) Ÿ No specific percentage limitation on usage; limited only by the objectives and strategies of the Fund	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Investment Securities

American, European and Global Depositary Receipts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Asset-Backed and Mortgage- Backed Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Bank Obligations ^3,4	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Convertible Securities ⁵	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Corporate Debt Obligations ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Equity Securities	80+	80+	80+	80+	80+

Emerging Country Securities	30	30	30	30	30

Fixed Income Securities ⁶	20	20	20	20	20

Foreign Securities	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Foreign Government Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Non-Investment Grade Fixed Income Securities ³	^Ÿ7	^Ÿ7	^Ÿ7	^Ÿ7	^Ÿ7

Real Estate Investment Trusts	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Stripped Mortgage-Backed Securities ^*, ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Structured Securities ^*	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Temporary Investments	100	100	100	100	100

U.S. Government Securities ³	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

3	Limited by the amount the Fund invests in fixed-income securities.

4	Issued by U.S. or foreign banks.

5	Convertible securities purchased by the Funds use the same rating criteria for convertible and non-convertible debt securities.

6	Except as noted under “Non-Investment Grade Fixed Income Securities,” fixed-income securities are investment grade (e.g., BBB or higher by Standard & Poor’s Rating Group (“Standard & Poor’s”) or Baa or higher by Moody’s Investor Services, Inc. (“Moody’s)).

7	May be BB or lower by Standard & Poor’s or Ba or lower by Moody’s.

Principal Risks of the Funds

Ÿ Applicable	Global Consumer Growth	Global Financial Services	Global Health Sciences	Global Infrastructure and Resources	Global Technology


Industry Concentration	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Credit/Default	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Emerging Countries	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Interest Rate	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Small Cap	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Foreign	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Derivatives	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Management	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Market	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Liquidity	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

REIT Risk	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Stock	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Geographic	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

Initial Public Offering (“IPO”)	Ÿ	Ÿ	Ÿ	Ÿ	Ÿ

All Funds:

PRINCIPAL RISKS OF THE FUNDS

Consumer products and services companies are particularly subject to risk of loss caused by government regulation, competition, changes in demographics and consumer tastes and economic conditions.

Financial services companies are particularly subject to risk of loss caused by economic conditions, interest rates, intense competition and government regulation.

Health sciences companies are particularly subject to risk of loss caused by intense competition and government regulation.

Infrastructure and resources companies are particularly subject to risk of loss caused by economic conditions, the level and volatility of commodity prices and government regulation.

Technology companies are particularly subject to risk of loss caused by intense competition, rapid obsolescence of products and government regulation.

n	*Credit/Default Risk*—The risk that an issuer or guarantor of fixed-income securities held by a Fund (which may have low credit ratings) may default on its obligation to pay interest and repay principal.

n	*Interest Rate Risk*—The risk that when interest rates increase, securities held by a Fund will decline in value. Long-term fixed-income securities will normally have more price volatility because of this risk than short-term fixed-income securities.

n	*Derivatives Risk*—The risk that loss may result from a Fund’s investments in options, futures, swaps, structured securities and other derivative instruments. These instruments may be leveraged so that small changes may produce disproportionate losses to a Fund.

n	*Management Risk*—The risk that a strategy used by the Investment Adviser may fail to produce the intended results.

n	*Market Risk*—The risk that the value of the securities in which a Fund invests may go up or down in response to the prospects of individual companies and/or general economic conditions. Price changes may be temporary or last for extended periods.

n	*Stock Risk*—The risk that stock prices have historically risen and fallen in periodic cycles. Recently, U.S. stock markets and certain foreign stock markets were trading at or close to record high levels. There is no guarantee that such levels will continue.

Fund Performance

HOW THE FUNDS HAVE PERFORMED

The Funds commenced operations as of the date of this Prospectus. Therefore, no performance information is provided in this section.

Fund Fees and Expenses (Service Shares)

This table describes the fees and expenses that you would pay if you buy and hold Service Shares of a Fund.

	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Shareholder Fees
(fees paid directly from your investment):

Maximum Sales Charge (Load) Imposed on Purchases	None	None	None	None	None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends	None	None	None	None	None
Redemption Fees	None	None	None	None	None
Exchange Fees	None	None	None	None	None

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):¹

Management Fees	1.10%	1.10%	1.10%	1.10%	1.10%
Service Fees ²	0.50%	0.50%	0.50%	0.50%	0.50%
Other Expenses ³	1.27%	0.75%	0.72%	1.27%	0.77%

Total Fund Operating Expenses*	2.87%	2.35%	2.32%	2.87%	2.37%

See page for all other footnotes.

	Global Consumer Growth Fund	Global Financial Services Fund	Global Health Sciences Fund	Global Infrastructure and Resources Fund	Global Technology Fund

Annual Fund Operating Expenses
(expenses that are deducted from Fund assets): ¹
Management Fees	1.10%	1.10%	1.10%	1.10%	1.10%
Service Fees ²	0.50%	0.50%	0.50%	0.50%	0.50%
Other Expenses ³	0.15%	0.15%	0.15%	0.15%	0.15%

Total Fund Operating Expenses (after current expense limitations)	1.75%	1.75%	1.75%	1.75%	1.75%

Fund Fees and Expenses continued

Each Fund’s expenses are estimated for the current fiscal year.

Service Organizations may charge other fees to their customers who are beneficial owners of Service Shares in connection with their customers’ accounts. Such fees may affect the return customers realize with respect to their investments.

“Other Expenses” include transfer agency fees equal to 0.04% of the average daily net assets of each Fund’ s Service Shares, plus all other ordinary expenses not detailed above. The Investment Adviser has voluntarily agreed to reduce or limit “Other Expenses” (excluding management fees, transfer agency fees, service fees, taxes, interest and brokerage fees and litigation, indemnification and other extraordinary expenses) to the following percentages of each Fund’s average daily net assets:

Fund	Other Expenses


Global Consumer Growth	0.11	%

Global Financial Services	0.11	%

Global Health Sciences	0.11	%

Global Infrastructure and Resources	0.11	%

Global Technology	0.11	%

FUND FEES AND EXPENSES

Example

The following Example is intended to help you compare the cost of investing in a Fund (without the expense limitations) with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in Service Shares of a Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that a Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

Fund	1 Year	3 Years

Global Consumer Growth	$290	$889

Global Financial Services	$238	$733

Global Health Sciences	$235	$724

Global Infrastructure and Resources	$290	$889

Global Technology	$240	$739

Service Organizations that invest in Service Shares on behalf of their customers may charge other fees directly to their customer accounts in connection with their investments. You should contact your Service Organization for information regarding such charges. Such fees, if any, may affect the return such customers realize with respect to their investments.

Certain Service Organizations that invest in Service Shares may receive other compensation in connection with the sale and distribution of Service Shares or for services to their customers’ accounts and/or the Funds. For additional information regarding such compensation, see “Shareholder Guide” in the Prospectus and “Other Information” in the Statement of Additional Information (“Additional Statement”).

Service Providers

INVESTMENT ADVISER

Investment Adviser

GSAM		GSAMI
32 Old Slip		133 Peterborough Court
New York, New York 10005		London, England EC4A 2BB

GSAM and GSAMI serve as the investment adviser to each Fund.

The Investment Adviser also performs the following additional services for the Funds:

Supervises all non-advisory operations of the Funds

Provides personnel to perform necessary executive, administrative and clerical services to the Funds

Maintains the records of each Fund

Provides office space and all necessary office equipment and services

MANAGEMENT FEES

		Contractual Rate

Global Consumer Growth		1.10%

Global Financial Services		1.10%

Global Health Sciences		1.10%

Global Infrastructure and Resources		1.10%

Global Technology		1.10%

The Investment Adviser may voluntarily waive a portion of its advisory fee from time to time, and may discontinue any voluntary waiver at any time at its discretion.

FUND MANAGERS

SERVICE PROVIDERS

GLOBAL CONSUMER GROWTH TEAM

The portfolio managers leverage the fundamental research and local market presence of the 29 member Global Consumer Growth Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL CONSUMER GROWTH FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Gregory H. Ekizian Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Ekizian joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1990 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

David G. Shell Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Shell joined the Investment Adviser as a portfolio manager in 1997. From 1987 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Rory Bateman Executive Director Portfolio Manager	GSAMI—London	Since 2001	Mr. Bateman joined the Investment Adviser as a research analyst in 1996 and was a portfolio manager with the European Management Group. From 1995 to 1996, he was an analyst with CIN Management.

GLOBAL FINANCIAL SERVICES TEAM

The portfolio managers leverage the fundamental research and local market presence of the 13 member Global Financial Services Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL FINANCIAL SERVICES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Sunreil Mahindru Executive Director Senior Portfolio Manager	GSAMI—London	Since 2001	Mr. Mahindru joined the Investment Adviser as a portfolio manager in 1996 and is now a senior portfolio manager with the United Kingdom Portfolio Management Group. From 1993 to 1996, he was an analyst at CIN Management.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Shogo Maeda Managing Director Senior Portfolio Manager	GSAMI— Tokyo	Since 2001	Mr. Maeda joined the Investment Adviser as a portfolio manager in 1994. From 1987 to 1994, he worked at Nomura Investment Management Incorporated as a Senior Portfolio Manager.

GLOBAL HEALTH SCIENCES TEAM

The portfolio managers leverage the fundamental research and local market presence of the 21 member Global Health Sciences Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL HEALTH SCIENCES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Gregory H. Ekizian Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Ekizian joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1990 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

Stuart McPherson Executive Director Senior Portfolio Manager	GSAMI— London	Since 2001	Mr. McPherson joined the Investment Adviser as a senior portfolio manager in 1996. From 1987 to 1996, he worked as both an U.S. equity analyst and an equity portfolio manager for CIN Management.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Miyako Shibamoto Vice President Portfolio Manager	GSAMI— Tokyo	Since 2001	Ms. Shibamoto joined the Investment Adviser as a member of the Japanese Equity team in March 1998. From 1993 to 1994, she was an Assistant Vice President and from 1994 to 1998, she was a Vice President at Scudder Stevens and Clark (Japan).

SERVICE PROVIDERS

GLOBAL INFRASTRUCTURE AND RESOURCES TEAM

GLOBAL INFRASTRUCTURE AND RESOURCES FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Julian Abel Executive Director Portfolio Manager	GSAMI— London	Since 2001	Mr. Abel joined the Investment Adviser in 1996 as a senior portfolio manager with the UK and European Equity Team. Prior to joining Goldman Sachs, he spent twelve years at CIN Management.

Kamran Baig Executive Director Portfolio Manager	GSAMI— London	Since 2001	Mr. Baig joined the Investment Adviser as a senior portfolio manager in the Pan-European Institutional Portfolio Management Group in 2000. From 1992 to 2000, he was a senior industry research analyst for Alliance Capital Management.

GLOBAL TECHNOLOGY TEAM

The portfolio managers leverage the fundamental research and local market presence of the 21 member Global Technology Team located in London, New York, Singapore, Tampa, Florida and Tokyo.

GLOBAL TECHNOLOGY FUND

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Robert G. Collins Managing Director Senior Portfolio Manager	GSAM—Tampa	Since 2001	Mr. Collins joined the Investment Adviser as portfolio manager and Co-Chair of the Growth Equity Investment Committee in 1997. From 1991 to 1997, he was a portfolio manager at Liberty.

Name and Title	Location	Years Primarily Responsible	Five Year Employment History

Tara Connolly Executive Director Senior Portfolio Manager	GSAMI— London	Since 2001	Ms. Connolly joined the Investment Adviser in 1997 as a research analyst and is a senior portfolio manager for the Goldman Sachs Technology Portfolio, a foreign fund. Prior to this, she spent three years with Goldman Sachs’ Investment Banking Division in New York and was a consultant at the Wharton Small Business Development Center.

Hadi Kabalan Associate Portfolio Manager	GSAMI— London	Since 2001	Mr. Kabalan joined the Investment Adviser in April 1997 as a research analyst and is a portfolio manager for the Goldman Sachs Technology Portfolio, a foreign fund. From December 1996 to April 1997, he was an analyst in the discretionary investment private banking area of Citibank.

Scott Kolar Vice President Senior Portfolio Manager	GSAM— Tampa	Since 2001	Mr. Kolar joined the Investment Adviser as an equity analyst in 1997 and became a portfolio manager in 1999. From 1994 to 1997, he was an equity analyst and information systems specialist at Liberty.

David G. Shell Managing Director Senior Portfolio Manager	GSAM— Tampa	Since 2001	Mr. Shell joined the Investment Adviser as a portfolio manager in 1997. From 1987 to 1997, he was a portfolio manager at Liberty and its predecessor firm, Eagle.

DISTRIBUTOR AND TRANSFER AGENT

SERVICE PROVIDERS

ACTIVITIES OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER ACCOUNTS MANAGED BY GOLDMAN SACHS

Dividends

Each Fund pays dividends from its net investment income and capital gain net income. You may choose to have dividends paid in:

Cash

n	Additional shares of the same class of the same Fund

n	Shares of the same or an equivalent class of another Goldman Sachs Fund. Special restrictions may apply for certain ILA Portfolios. See the Additional Statement.

The election to reinvest dividends in additional shares will not affect the tax treatment of such dividends, which will be treated as received by you and then used to purchase the shares.

Dividends from net investment income and capital gain net income are declared and paid annually by each Fund.

From time to time a portion of a Fund’s dividends may constitute a return of capital.

Shareholder Guide

The following section will provide you with answers to some of the most often asked questions regarding buying and selling the Funds’ Service Shares.

HOW TO BUY SHARES

How Can I Purchase Service Shares Of The Funds?

Generally, Service Shares may be purchased only through institutions that have agreed to provide account administration and personal and account maintenance services to their customers who are the beneficial owners of Service Shares. These institutions are called “Service Organizations.” Customers of a Service Organization will normally give their purchase instructions to the Service Organization, and the Service Organization will, in turn, place purchase orders with Goldman Sachs. Service Organizations will set times by which purchase orders and payments must be received by them from their customers. Generally, Service Shares may be purchased from the Funds on any business day at their NAV next determined after receipt of an order by Goldman Sachs from a Service Organization. No sales load is charged. Purchases of Service Shares must be settled within three business days of receipt of a complete purchase order.

Service Organizations are responsible for transmitting purchase orders and payments to Goldman Sachs in a timely fashion. Service Organizations should place an order with Goldman Sachs at 1-800-621-2550 and either:

Wire federal funds to The Northern Trust Company (“Northern”), as subcustodian for State Street Bank and Trust Company (“State Street”) (each Fund’s custodian) on the next business day; or

What Do I Need To Know About Service Organizations?

Service Organizations may provide the following services in connection with their customers’ investments in Service Shares:

Acting, directly or through an agent, as the sole shareholder of record

Maintaining account records for customers

Processing orders to purchase, redeem or exchange shares for customers

Responding to inquiries from prospective and existing shareholders

Assisting customers with investment procedures

In addition, some (but not all) Service Organizations are authorized to accept, on behalf of Goldman Sachs Trust (the “ Trust”), purchase, redemption and exchange orders placed by or on behalf of their customers, and may designate other intermediaries to accept such orders, if approved by the Trust. In these cases:

A Fund will be deemed to have received an order in proper form when the order is accepted by the authorized Service Organization or intermediary on a business day, and the order will be priced at the Fund’s NAV next determined after such acceptance.

Service Organizations or intermediaries will be responsible for transmitting accepted orders and payments to the Trust within the time period agreed upon by them.

You should contact your Service Organization directly to learn whether it is authorized to accept orders for the Trust.

Pursuant to a service plan adopted by the Trust’s Board of Trustees, Service Organizations are entitled to receive payment for their services from the Trust of up to 0.50% (on an annualized basis) of the average daily net assets of the Service Shares of the Funds, which are attributable to or held in the name of the Service Organization for its customers.

The Investment Adviser, Distributor and/or their affiliates may pay additional compensation from time to time, out of their assets and not as an additional charge to the Funds, to selected Service Organizations and other persons in connection with the sale, distribution and/or servicing of shares of the Funds and other Goldman Sachs Funds. Additional compensation based on sales may, but is currently not expected to, exceed 0.50% (annualized) of the amount invested.

In addition to Service Shares, each Fund also offers other classes of shares to investors. These other share classes are subject to different fees and expenses (which affect performance), have different minimum investment requirements and are entitled to different services than Service Shares. Information regarding these other share classes may be obtained from your sales representative or from Goldman Sachs by calling the number on the back cover of this Prospectus.

What Is My Minimum Investment In The Funds?

The Funds do not have any minimum purchase or account requirements with respect to Service Shares. A Service Organization may, however, impose a minimum amount for initial and subsequent investments in Service Shares, and may establish other requirements such as a minimum account balance. A Service Organization may redeem Service Shares held by non-complying accounts, and may impose a charge for any special services.

What Else Should I Know About Share Purchases?

The Trust reserves the right to:

Reject or restrict any purchase or exchange orders by a particular purchaser (or group of related purchasers). This may occur, for example, when a pattern of frequent purchases, sales or exchanges of Service Shares of a Fund is evident, or if purchases, sales or exchanges are, or a subsequent abrupt redemption might be, of a size that would disrupt the management of a Fund.

Close a Fund to new investors from time to time and reopen any such Fund whenever it is deemed appropriate by a Fund’s Investment Adviser.

The Funds may allow Service Organizations to purchase shares with securities instead of cash if consistent with a Fund’s investment policies and operations and if approved by the Fund’s Investment Adviser.

How Are Shares Priced?

The price you pay or receive when you buy, sell or exchange Service Shares is determined by a Fund’s NAV. The Funds calculate NAV as follows:

(Value of Assets of the Class)

NAV =

– (Liabilities of the Class)

Number of Outstanding Shares of the Class

When you buy shares, you pay the NAV next calculated after the Funds receive your order in proper form.

When you sell shares, you receive the NAV next calculated after the Funds receive your order in proper form.

HOW TO SELL SHARES

How Can I Sell Service Shares Of The Funds?

Generally, Service Shares may be sold (redeemed) only through Service Organizations. Customers of a Service Organization will normally give their redemption instructions to the Service Organization, and the Service Organization will, in turn, place redemption orders with the Funds. Generally, each Fund will redeem its Service Shares upon request on any business day at their NAV next determined after receipt of such request in proper form. Redemption proceeds may be sent to recordholders by check or by wire (if the wire instructions are on record).

A Service Organization may request redemptions in writing or by telephone if the optional telephone redemption privilege is elected on the Account Application.



By Writing:		Goldman Sachs Funds 4900 Sears Tower—60th Floor Chicago, IL 60606-6372

By Telephone:		If you have elected the telephone redemption privilege on your Account Application:
		n 1-800-621-2550 (8:00 a.m. to 4:00 p.m. New York time)

What Do I Need To Know About Telephone Redemption Requests?

The Trust, the Distributor and the Transfer Agent will not be liable for any loss you may incur in the event that the Trust accepts unauthorized telephone redemption requests that the Trust reasonably believes to be genuine. In an effort to prevent unauthorized or fraudulent redemption and exchange requests by telephone, Goldman Sachs employs reasonable procedures specified by the Trust to confirm that such instructions are genuine. If reasonable procedures are not employed, the Trust may be liable for any loss due to unauthorized or fraudulent transactions. The following general policies are currently in effect:

All telephone requests are recorded.

The telephone redemption option may be modified or terminated at any time.

Note: It may be difficult to make telephone redemptions in times of drastic economic or market conditions.

How Are Redemption Proceeds Paid?

By Wire: The Funds will arrange for redemption proceeds to be wired as federal funds to the bank account designated in the recordholder’s Account Application. The following general policies govern wiring redemption proceeds:

Redemption proceeds will normally be wired on the next business day in federal funds (for a total of one business day delay), but may be paid up to three business days following receipt of a properly executed wire transfer redemption request. If the shares to be sold were recently paid for by check, the Fund will pay the redemption proceeds when the check has cleared, which may take up to 15 days. If the Federal Reserve Bank is closed on the day that the redemption proceeds would ordinarily be wired, wiring the redemption proceeds may be delayed one additional business day.

To change the bank designated on your Account Application, you must send written instructions signed by an authorized person designated on the Account Application to the Service Organization.

Neither the Trust, Goldman Sachs nor any other institution assumes any responsibility for the performance of intermediaries or your Service Organization in the transfer process. If a problem with such performance arises, you should deal directly with such intermediaries or Service Organization.

By Check: A recordholder may elect in writing to receive redemption proceeds by check. Redemption proceeds paid by check will normally be mailed to the address of record within three business days of receipt of a properly executed redemption request. If the shares to be sold were recently paid for by check, the Fund will pay the redemption proceeds when the check has cleared, which may take up to 15 days.

What Else Do I Need To Know About Redemptions?

The following generally applies to redemption requests:

Additional documentation may be required when deemed appropriate by the Transfer Agent. A redemption request will not be in proper form until such additional documentation has been received.

Service Organizations are responsible for the timely transmittal of redemption requests by their customers to the Transfer Agent. In order to facilitate the timely transmittal of redemption requests, Service Organizations may set times by which they must receive redemption requests. Service Organizations may also require additional documentation from you.

The Trust reserves the right to:

Redeem the Service Shares of any Service Organization whose account balance falls below $50 as a result of a redemption. The Funds will not redeem Service Shares on this basis if the value of the account falls below the minimum account balance solely as a result of market conditions. The Fund will give 60 days’ prior written notice to allow a Service Organization to purchase sufficient additional shares of the Fund in order to avoid such redemption.

Redeem your shares in other circumstances determined by the Board of Trustees to be in the best interest of the Trust.

Reinvest any dividends or other distributions which you have elected to receive in cash should your check for such dividends or other distributions be returned to the Fund as undeliverable or remain uncashed for six months. In addition, that distribution and all future distributions payable to you will be reinvested at NAV in additional Service Shares of the Fund that pays the distributions. No interest will accrue on amounts represented by uncashed distribution or redemption checks.

Can I Exchange My Investment From One Fund To Another?

A Service Organization may exchange Service Shares of a Fund at NAV for Service Shares of any other Goldman Sachs Fund. The exchange privilege may be materially modified or withdrawn at any time upon 60 days’ written notice.

Instructions For Exchanging Shares:

By Writing:	n	Write a letter of instruction that includes: n The recordholder name(s) and signature(s) n The account number n The Fund names and Class of Shares n The dollar amount to be exchanged
	n	Mail the request to: Goldman Sachs Funds 4900 Sears Tower—60th Floor Chicago, IL 60606-6372

By Telephone:	If you have elected the telephone exchange privilege on your Account Application:
	n	1-800-621-2550 (8:00 a.m. to 4:00 p.m. New York time)

SHAREHOLDER GUIDE

You should keep in mind the following factors when making or considering an exchange:

You should obtain and carefully read the prospectus of the Fund you are acquiring before making an exchange.

Telephone exchanges normally will be made only to an identically registered account.

Exchanges are available only in states where exchanges may be legally made.

It may be difficult to make telephone exchanges in times of drastic economic or market conditions.

What Types Of Reports Will Be Sent Regarding Investments In Service Shares?

Service Organizations will receive from the Funds annual reports containing audited financial statements and semi-annual reports. Service Organizations will also be provided with a printed confirmation for each transaction in their account and a monthly account statement. Service Organizations are responsible for providing these or other reports to their customers who are the beneficial owners of Service Shares in accordance with the rules that apply to their accounts with the Service Organizations.

Taxation

Unless your investment is an IRA or other tax-advantaged account, you should consider the possible tax consequences of Fund distributions and the sale of your Fund shares.

DISTRIBUTIONS

SALES AND EXCHANGES

OTHER INFORMATION

Appendix A

Additional Information on Portfolio Risks, Securities and Techniques

A. General Portfolio Risks

B. Other Portfolio Risks

Concentration of a Fund’s assets in one or a few countries and currencies will subject a Fund to greater risks than if a Fund’s assets were not geographically concentrated.

APPENDIX A

A Fund’s investment in emerging countries may also be subject to withholding or other taxes, which may be significant and may reduce the return from an investment in such country to the Fund.

Both domestic and foreign securities that are not readily marketable

Certain stripped mortgage-backed securities

Repurchase agreements and time deposits with a notice or demand period of more than seven days

Certain over-the-counter options

Certain structured securities and all swap transactions

APPENDIX A

Temporary Investment Risks. Each Fund may, for temporary defensive purposes, invest a certain percentage of its total assets in:

U.S. government securities

Commercial paper rated at least A-2 by Standard & Poor’s or P-2 by Moody’s

Certificates of deposit

Bankers’ acceptances

Repurchase agreements

Non-convertible preferred stocks and non-convertible corporate bonds with a remaining maturity of less than one year

When a Fund’s assets are invested in such instruments, the Fund may not be achieving its investment objective.

APPENDIX A

C. Portfolio Securities and Techniques

Futures contracts and related options present the following risks:

The loss incurred by a Fund in entering into futures contracts and in writing call options on futures is potentially unlimited and may exceed the amount of the premium received.

Futures markets are highly volatile and the use of futures may increase the volatility of a Fund’s NAV.

As a result of the low margin deposits normally required in futures trading, a relatively small price movement in a futures contract may result in substantial losses to a Fund.

Futures contracts and options on futures may be illiquid, and exchanges may limit fluctuations in futures contract prices during a single day.

Foreign exchanges may not provide the same protection as U.S. exchanges.

Appendix B

Prior Performance of Similarly Advised Account of the Investment Adviser

GLOBAL TECHNOLOGY FUND

GSAM and GSAMI have served as investment adviser and sub-adviser,
respectively, for one discretionary private account that has investment objectives, policies, and strategies substantially similar to the Global Technology Fund. The following table sets forth the performance data relating to the historical performance of that account. The information is provided to illustrate the past performance of the Investment Adviser in managing a substantially similar account as measured against the Index and does not represent the performance of the Global Technology Fund. Investors should not consider this performance data as a substitute for the performance of the Global Technology Fund nor should investors consider this data as an indication of future performance of the Global Technology Fund or of the Investment Adviser. The Index is unmanaged and investors cannot invest directly in the Index.

	Private Account Performance		Index

2000		%		%
1999		%		%
1998		%		%
1997		%		%
1996		%		%

Average Annual Total Return
for the Period Ended   /  /00

1 Year

3 Year

Since
Inception
/  /96

Private Account Performance % % %

               Index % % %

All returns presented reflect the reinvestment of dividends and other earnings. The average expenses of the discretionary private account used in calculating the Investment Adviser’s performance data were % annualized, which are lower than the estimated expenses of Service Shares of the Global Technology Fund stated under “Fund Fees and Expenses” above. The performance of the discretionary private account would have been lower if it had been subject to the expenses of the Global Technology Fund. In addition, the discretionary private account is not subject to the same diversification requirements, specific tax restrictions and investment limitations imposed on the Global Technology Fund by the Act and Subchapter M of the Code. Consequently, the performance results of the Investment Adviser’s discretionary private account could have been adversely affected if the discretionary private account had been regulated as an investment company under the federal securities laws.

Index

General Investment Management Approach		Service Providers

Fund Investment Objectives and Strategies		Dividends

	Goldman Sachs Global Consumer Growth Fund	Shareholder Guide

	Goldman Sachs Global Financial Services Fund	How To Buy Shares

	Goldman Sachs Global Health Sciences Fund	How To Sell Shares

	Goldman Sachs Global Infrastructure and Resources Fund	Taxation

	Goldman Sachs Global Technology Fund	Appendix A Additional Information on Portfolio Risks, Securities and Techniques

Other Investment Practices and Securities		Appendix B Global Technology Fund— Prior Performance of Similarly Advised Account of the Investment Adviser

Principal Risks of the Funds

Fund Performance

Fund Fees and Expenses

Global Sector Funds

Prospectus (Service Shares)

FOR MORE INFORMATION

Annual/Semi-annual Report

Statement of Additional Information

The Funds’ annual and semi-annual reports, and the Additional Statement, are available free upon request by calling Goldman Sachs at 1-800-621-2550.

To obtain other information and for shareholder inquiries:

By telephone – Call 1-800-621-2550

By mail – Goldman Sachs Funds, 4900 Sears Tower – 60th Floor, Chicago, IL 60606-6372

By e-mail – [email protected]

On the Internet – Text-only versions of the Funds’ documents are located online and may be downloaded from:

SEC EDGAR database – http://www.sec.gov

[LOGO OF GOLDMAN SACHS]

The Funds’ investment company registration number is 811-5349.

Standard & Poor’s Depositary Receipts ^TM is a trademark of The McGraw-Hill Companies, Inc.

iShares ^SM is a service mark of Barclays Global Investors.


INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY STATE.

                                    PART B
                PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
                            DATED NOVEMBER 22, 2000
                             SUBJECT TO COMPLETION

                                CLASS A SHARES
                                CLASS B SHARES
                                CLASS C SHARES
                                SERVICE SHARES
                             INSTITUTIONAL SHARES

                   GOLDMAN SACHS GLOBAL CONSUMER GROWTH FUND
                 GOLDMAN SACHS GLOBAL FINANCIAL SERVICES FUND
                   GOLDMAN SACHS GLOBAL HEALTH SCIENCES FUND
            GOLDMAN SACHS GLOBAL INFRASTRUCTURE AND RESOURCES FUND
                     GOLDMAN SACHS GLOBAL TECHNOLOGY FUND


              (Each a Global Sector Fund of Goldman Sachs Trust)

                               4900 Sears Tower
                         Chicago, Illinois 60606-6303

     This Statement of Additional Information (the "Additional
Statement") is not a Prospectus. This Additional Statement should be read in
conjunction with the Prospectuses for the Class A Shares, Class B Shares, Class
C Shares, Service Shares and Institutional Shares of the Goldman Sachs Global
Consumer Growth Fund, Goldman Sachs Global Financial Services Fund, Goldman
Sachs Global Health Sciences Fund, Goldman Sachs Global Infrastructure and
Resources Fund and Goldman Sachs Global Technology Fund dated February 5, 2001
(the "Prospectuses"), which may be obtained without charge from Goldman, Sachs &
Co. by calling the telephone number, or writing to one of the addresses, listed
below.


                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----

INTRODUCTION.............................................................    B-1
INVESTMENT POLICIES......................................................    B-1
INVESTMENT RESTRICTIONS..................................................   B-34
MANAGEMENT...............................................................   B-37
PORTFOLIO TRANSACTIONS AND BROKERAGE.....................................   B-55
NET ASSET VALUE..........................................................   B-57
PERFORMANCE INFORMATION..................................................   B-58
SHARES OF THE TRUST......................................................   B-63
TAXATION.................................................................   B-67
OTHER INFORMATION........................................................   B-75
DISTRIBUTION AND SERVICE PLANS...........................................   B-77
OTHER INFORMATION REGARDING MAXIMUM SALES CHARGE, PURCHASES, REDEMPTIONS,
     EXCHANGES AND DIVIDENDS.............................................   B-78
SERVICE PLAN.............................................................   B-81
Appendix A...............................................................    1-A
Appendix B...............................................................    1-B
Appendix C (Statement of Intention and Escrow Agreement).................    1-C

    The date of this Additional Statement is February 5, 2001

                                      -i-


GOLDMAN SACHS ASSET MANAGEMENT
32 Old Slip
New York, New York 10005
Investment Adviser

GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
133 Peterborough Court
London, England EC4A 2BB
Investment Adviser

GOLDMAN, SACHS & CO.
Distributor
85 Broad Street
New York, New York 10004

GOLDMAN, SACHS & CO.
Transfer Agent
4900 Sears Tower
Chicago, Illinois 60606



                    Toll free (in U.S.) . . . 800-621-2550

                                     -ii-


                                 INTRODUCTION

     Goldman Sachs Trust (the "Trust") is an open-end, management investment
company. The Trust is organized as a Delaware business trust, and is a successor
to a Massachusetts business trust that was combined with the Trust on April 30,
1997. This Additional Statement describes the Trust's Goldman Sachs Global
Consumer Growth Fund ("Global Consumer Growth Fund"), Goldman Sachs Global
Financial Services Fund ("Global Financial Services Fund"), Goldman Sachs Global
Health Sciences Fund ("Global Health Sciences Fund"), Goldman Sachs Global
Infrastructure and Resources Fund ("Global Infrastructure and Resources Fund")
and Goldman Sachs Global Technology Fund ("Global Technology Fund")
(collectively referred to herein as the "Funds").

     The Trustees have authority under the Trust's charter to create and
classify shares into separate series and to classify and reclassify any series
or Fund of shares into one or more classes without further action by
shareholders.  Pursuant thereto, the Trustees have created the Funds and other
series.  Additional series may be added in the future from time to time.  The
Funds currently offers five classes of shares: Class A Shares, Class B Shares,
Class C Shares, Institutional Shares and Service Shares.  See "Shares of the
Trust."

     Goldman Sachs Asset Management ("GSAM") and Goldman Sachs Asset Management
("GSAMI") are separate business units of the Investment Management Division of
Goldman, Sachs & Co. ("Goldman Sachs"). Together they serve as Investment
Adviser to the Funds. GSAM and GSAMI are sometimes individually referred to as
an "Investment Adviser" and collectively herein as the "Investment Advisers." In
addition, Goldman Sachs serves as each Fund's distributor and transfer agent.
Each Fund's custodian is State Street Bank and Trust Company ("State Street").

     The following information relates to and supplements the description of
each Fund's investment policies contained in the Prospectuses.  See the
Prospectuses for a more complete description of the Funds' investment objective
and policies.  There is no assurance that a Fund will achieve its objective.
Capitalized terms used but not defined herein have the same meaning as in the
prospectuses.

                              INVESTMENT POLICIES

     Each Fund has a distinct investment objective and policies.  There can be
no assurance that a Fund's objective will be achieved. Each Fund is a
diversified open-end management company as defined in the Investment Company Act
of 1940, as amended (the "Act"). The investment objective and policies of each
Fund, and the associated risks of each Fund, are discussed in the Funds'
prospectus, which should be read carefully before an investment is made.
Additional information about the Funds, their policies, and the investment
instruments they may hold, is provided below.


     Each Fund's share price will fluctuate with market and economic conditions,
so that an investment in the Fund may be worth more or less when redeemed than
when purchased.  None of the Funds should be relied upon as a complete
investment program.

General Information Regarding the Funds.
---------------------------------------

                                      B-1


     The Investment Adviser may purchase for the Funds common stocks, preferred
stocks, interests in real estate investment trusts, convertible debt
obligations, convertible preferred stocks, equity interests in trusts,
partnerships, joint ventures, limited liability companies and similar
enterprises, warrants and stock purchase rights ("equity securities"). In
choosing a Fund's securities, the Investment Adviser utilizes first-hand
fundamental research, including visiting company facilities to assess operations
and to meet decision-makers. The Investment Adviser may also use macro analysis
of numerous economic and valuation variables to anticipate changes in company
earnings and the overall investment climate. The Investment Adviser is able to
draw on the research and market expertise of the Goldman Sachs Global Investment
Research Department and other affiliates of the Investment Adviser, as well as
information provided by other securities dealers. Equity securities in a Fund's
portfolio will generally be sold when the Investment Adviser believes that the
market price fully reflects or exceeds the securities' fundamental valuation or
when other more attractive investments are identified.

Corporate Debt Obligations
--------------------------

     Each Fund may, under normal market conditions, invest in corporate debt
obligations, including obligations of industrial, utility and financial issuers.
Corporate debt obligations are subject to the risk of an issuer's inability to
meet principal and interest payments on the obligations and may also be subject
to price volatility due to such factors as market interest rates, market
perception of the creditworthiness of the issuer and general market liquidity.

     An economic downturn could severely affect the ability of highly leveraged
issuers of junk bond securities to service their debt obligations or to repay
their obligations upon maturity. Factors having an adverse impact on the market
value of junk bonds will have an adverse effect on a Fund's net asset value to
the extent it invests in such securities. In addition, a Fund may incur
additional expenses to the extent it is required to seek recovery upon a default
in payment of principal or interest on its portfolio holdings.

     The secondary market for junk bonds, which is concentrated in relatively
few market makers, may not be as liquid as the secondary market for more highly
rated securities.  This reduced liquidity may have an adverse effect on the
ability of the Funds to dispose of a particular security when necessary to meet
their redemption requests or other liquidity needs.  Under adverse market or
economic conditions, the secondary market for junk bonds could contract further,
independent of any specific adverse changes in the condition of a particular
issuer.  As a result, the Investment Adviser could find it difficult to sell
these securities or may be able to sell the securities only at prices lower than
if such securities were widely traded.  Prices realized upon the sale of such
lower rated or unrated securities, under such circumstances, may be less than
the prices used in calculating a Fund's net asset value.

     Since investors generally perceive that there are greater risks associated
with the medium to lower rated securities of the type in which the Funds may
invest, the yields and prices of such securities may tend to fluctuate more than
those for higher rated securities.  In the lower quality segments of the fixed-
income securities market, changes in perceptions of issuers' creditworthiness

                                      B-2


tend to occur more frequently and in a more pronounced manner than do changes in
higher quality segments of the fixed-income securities market, resulting in
greater yield and price volatility.

     Another factor which causes fluctuations in the prices of fixed-income
securities is the supply and demand for similarly rated securities. In addition,
the prices of fixed-income securities fluctuate in response to the general level
of interest rates. Fluctuations in the prices of portfolio securities subsequent
to their acquisition will not affect cash income from such securities but will
be reflected in a Fund's net asset value.

     Medium to lower rated and comparable non-rated securities tend to offer
higher yields than higher rated securities with the same maturities because the
historical financial condition of the issuers of such securities may not have
been as strong as that of other issuers. Since medium to lower rated securities
generally involve greater risks of loss of income and principal than higher
rated securities, investors should consider carefully the relative risks
associated with investment in securities which carry medium to lower ratings and
in comparable unrated securities. In addition to the risk of default, there are
the related costs of recovery on defaulted issues. The Investment Adviser will
attempt to reduce these risks through portfolio diversification and by analysis
of each issuer and its ability to make timely payments of income and principal,
as well as broad economic trends and corporate developments.

     The Investment Adviser employs its own credit research and analysis, which
includes a study of existing debt, capital structure, ability to service debt
and to pay dividends, the issuer's sensitivity to economic conditions, its
operating history and the current trend of earnings.  The Investment Adviser
continually monitors the investments in a Fund's portfolio and evaluates whether
to dispose of or to retain non-investment grade and comparable unrated
securities whose credit ratings or credit quality may have changed.

U.S. Government Securities
--------------------------

     Each Fund may invest in U.S. government securities.  Generally, these
securities include U.S. Treasury obligations and obligations issued or
guaranteed by U.S. government agencies, instrumentalities or sponsored
enterprises.

Bank Obligations
----------------

     Each Fund may invest in obligations issued or guaranteed by U.S. or foreign
banks. Bank obligations, including without limitation, time deposits, bankers'
acceptances and certificates of deposit, may be general obligations of the
parent bank or may be limited to the issuing branch by the terms of the specific
obligations or by government regulation. Banks are subject to extensive but
different governmental regulations which may limit both the amount and types of
loans which may be made and interest rates which may be charged. In addition,
the profitability of the banking industry is largely dependent upon the
availability and cost of funds for the purpose of financing lending operations
under prevailing money market conditions. General economic conditions as well as
exposure to credit losses arising from possible financial difficulties of
borrowers play an important part in the operation of this industry.

                                      B-3


Zero Coupon Bonds
-----------------

     A Fund's investments in fixed-income securities may include zero coupon
bonds, which are debt obligations issued or purchased at a significant discount
from face value.  The discount approximates the total amount of interest the
bonds would have accrued and compounded over the period until maturity.  Zero
coupon bonds do not require the periodic payment of interest.  Such investments
benefit the issuer by mitigating its need for cash to meet debt service but also
require a higher rate of return to attract investors who are willing to defer
receipt of such cash.  Such investments may experience greater volatility in
market value than debt obligations which provide for regular payments of
interest.  In addition, if an issuer of zero coupon bonds held by a Fund
defaults, the Fund may obtain no return at all on its investment.  Each Fund
will accrue income on such investments for each taxable year which (net of
deductible expenses, if any) is distributable to shareholders and which, because
no cash is generally received at the time of accrual, may require the
liquidation of other portfolio securities to obtain sufficient cash to satisfy
the Fund's distribution obligations.

Variable and Floating Rate Securities
-------------------------------------

     The interest rates payable on certain fixed-income securities in which a
Fund may invest are not fixed and may fluctuate based upon changes in market
rates. A variable rate obligation has an interest rate which is adjusted at
predesignated periods in response to changes in the market rate of interest on
which the interest rate is based. Variable and floating rate obligations are
less effective than fixed rate instruments at locking in a particular yield.
Nevertheless, such obligations may fluctuate in value in response to interest
rate changes if there is a delay between changes in market interest rates and
the interest reset date for the obligation.

Custodial Receipts
------------------

     Each Fund may invest in custodial receipts in respect of securities issued
or guaranteed as to principal and interest by the U.S. Government, its agencies,
instrumentalities, political subdivisions or authorities. Such custodial
receipts evidence ownership of future interest payments, principal payments or
both on certain notes or bonds issued or guaranteed as to principal and interest
by the U.S. Government, its agencies, instrumentalities, political subdivisions
or authorities. These custodial receipts are known by various names, including
"Treasury Receipts," "Treasury Investors Growth Receipts" ("TIGRs"), and
"Certificates of Accrual on Treasury Securities" ("CATs"). For certain
securities law purposes, custodial receipts are not considered U.S. Government
securities.

Mortgage-Backed Securities
--------------------------

     General Characteristics.  Each Fund may invest in mortgage-backed
securities.  Each mortgage pool underlying mortgage-backed securities consists
of mortgage loans evidenced by promissory notes secured by first mortgages or
first deeds of trust or other similar security instruments creating a first lien
on owner occupied and non-owner occupied one-unit to four-unit residential
properties, multifamily (i.e., five or more) properties, agriculture properties,
commercial

                                      B-4


properties and mixed use properties (the "Mortgaged Properties"). The Mortgaged
Properties may consist of detached individual dwelling units, multifamily
dwelling units, individual condominiums, townhouses, duplexes, triplexes,
fourplexes, row houses, individual units in planned unit developments and other
attached dwelling units. The Mortgaged Properties may also include residential
investment properties and second homes.

     The investment characteristics of adjustable and fixed rate mortgage-backed
securities differ from those of traditional fixed-income securities. The major
differences include the payment of interest and principal on mortgage-backed
securities on a more frequent (usually monthly) schedule, and the possibility
that principal may be prepaid at any time due to prepayments on the underlying
mortgage loans or other assets. These differences can result in significantly
greater price and yield volatility than is the case with traditional fixed-
income securities. As a result, if a Fund purchases mortgage-backed securities
at a premium, a faster than expected prepayment rate will reduce both the market
value and the yield to maturity from those which were anticipated. A prepayment
rate that is slower than expected will have the opposite effect of increasing
yield to maturity and market value. Conversely, if a Fund purchases mortgage-
backed securities at a discount, faster than expected prepayments will increase,
while slower than expected prepayments will reduce yield to maturity and market
values. To the extent that a Fund invests in mortgage-backed securities, the
Investment Adviser may seek to manage these potential risks by investing in a
variety of mortgage-backed securities and by using certain hedging techniques.

     Government Guaranteed Mortgage-Backed Securities. There are several types
of guaranteed mortgage-backed securities currently available, including
guaranteed mortgage pass-through certificates and multiple class securities,
which include guaranteed Real Estate Mortgage Investment Conduit Certificates
("REMIC Certificates"), collateralized mortgage obligations and stripped
mortgage-backed securities. A Fund is permitted to invest in other types of
mortgage-backed securities that may be available in the future to the extent
consistent with its investment policies and objective.

     A Fund's investments in mortgage-backed securities may include securities
issued or guaranteed by the U.S. Government or one of its agencies, authorities,
instrumentalities or sponsored enterprises, such as the Government National
Mortgage Association ("Ginnie Mae"), the Federal National Mortgage Association
("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac").

     Ginnie Mae Certificates.  Ginnie Mae is a wholly-owned corporate
instrumentality of the United States.  Ginnie Mae is authorized to guarantee the
timely payment of the principal of and interest on certificates that are based
on and backed by a pool of mortgage loans insured by the Federal Housing
Administration ("FHA Loans"), or guaranteed by the Veterans Administration ("VA
Loans"), or by pools of other eligible mortgage loans.  In order to meet its
obligations under any guaranty, Ginnie Mae is authorized to borrow from the
United States Treasury in an unlimited amount.

     Fannie Mae Certificates.  Fannie Mae is a stockholder-owned corporation
chartered under an act of the United States Congress. Each Fannie Mae
Certificate is issued and guaranteed by

                                      B-5


Fannie Mae and represents an undivided interest in a pool of mortgage loans (a
"Pool") formed by Fannie Mae. Each Pool consists of residential mortgage loans
("Mortgage Loans") either previously owned by Fannie Mae or purchased by it in
connection with the formation of the Pool. The Mortgage Loans may be either
conventional Mortgage Loans (i.e., not insured or guaranteed by any U.S.
Government agency) or Mortgage Loans that are either insured by the Federal
Housing Administration ("FHA") or guaranteed by the Veterans Administration
("VA"). However, the Mortgage Loans in Fannie Mae Pools are primarily
conventional Mortgage Loans. The lenders originating and servicing the Mortgage
Loans are subject to certain eligibility requirements established by Fannie Mae.

     Fannie Mae has certain contractual responsibilities.  With respect to each
Pool, Fannie Mae is obligated to distribute scheduled monthly installments of
principal and interest after Fannie Mae's servicing and guaranty fee, whether or
not received, to Certificate holders.  Fannie Mae also is obligated to
distribute to holders of Certificates an amount equal to the full principal
balance of any foreclosed Mortgage Loan, whether or not such principal balance
is actually recovered.  The obligations of Fannie Mae under its guaranty of the
Fannie Mae Certificates are obligations solely of Fannie Mae.

     Freddie Mac Certificates. Freddie Mac is a publicly held U.S. Government
sponsored enterprise. The principal activity of Freddie Mac currently is the
purchase of first lien, conventional, residential mortgage loans and
participation interests in such mortgage loans and their resale in the form of
mortgage securities, primarily Freddie Mac Certificates. A Freddie Mac
Certificate represents a pro rata interest in a group of mortgage loans or
participation in mortgage loans (a "Freddie Mac Certificate group") purchased by
Freddie Mac.

     Freddie Mac guarantees to each registered holder of a Freddie Mac
Certificate the timely payment of interest at the rate provided for by such
Freddie Mac Certificate (whether or not received on the underlying loans).
Freddie Mac also guarantees to each registered Certificate holder ultimate
collection of all principal of the related mortgage loans, without any offset or
deduction, but does not, generally, guarantee the timely payment of scheduled
principal.  The obligations of Freddie Mac under its guaranty of Freddie Mac
Certificates are obligations solely of Freddie Mac.

     The mortgage loans underlying the Freddie Mac and Fannie Mae Certificates
consist of adjustable rate or fixed rate mortgage loans with original terms to
maturity of between five and thirty years.  Substantially all of these mortgage
loans are secured by first liens on one-to-four-family residential properties or
multifamily projects.  Each mortgage loan must meet the applicable standards set
forth in the law creating Freddie Mac or Fannie Mae.  A Freddie Mac Certificate
group may include whole loans, participation interests in whole loans and
undivided interests in whole loans and participations comprising another Freddie
Mac Certificate group.

     Mortgage Pass-Through Securities.  Each Fund may invest in both government
guaranteed and privately issued mortgage pass-through securities ("Mortgage
Pass-Throughs"); that is, fixed or adjustable rate mortgage-backed securities
which provide for monthly payments that are a "pass-through" of the monthly
interest and principal payments (including any prepayments) made

                                      B-6


by the individual borrowers on the pooled mortgage loans, net of any fees or
other amounts paid to any guarantor, administrator and/or servicer of the
underlying mortgage loans.

     The following discussion describes only a few of the wide variety of
structures of Mortgage Pass-Throughs that are available or may be issued.

     Description of Certificates.  Mortgage Pass-Throughs may be issued in one
or more classes of senior certificates and one or more classes of subordinate
certificates.  Each such class may bear a different pass-through rate.
Generally, each certificate will evidence the specified interest of the holder
thereof in the payments of principal or interest or both in respect of the
mortgage pool comprising part of the trust fund for such certificates.

     Any class of certificates may also be divided into subclasses entitled to
varying amounts of principal and interest.  If a REMIC election has been made,
certificates of such subclasses may be entitled to payments on the basis of a
stated principal balance and stated interest rate, and payments among different
subclasses may be made on a sequential, concurrent, pro rata or disproportionate
                                                    --- ----
basis, or any combination thereof.  The stated interest rate on any such
subclass of certificates may be a fixed rate or one which varies in direct or
inverse relationship to an objective interest index.

     Generally, each registered holder of a certificate will be entitled to
receive its pro rata share of monthly distributions of all or a portion of
            --- ----
principal of the underlying mortgage loans or of interest on the principal
balances thereof, which accrues at the applicable mortgage pass-through rate, or
both. The difference between the mortgage interest rate and the related mortgage
pass-through rate (less the amount, if any, of retained yield) with respect to
each mortgage loan will generally be paid to the servicer as a servicing fee.
Since certain adjustable rate mortgage loans included in a mortgage pool may
provide for deferred interest (i.e., negative amortization), the amount of
interest actually paid by a mortgagor in any month may be less than the amount
of interest accrued on the outstanding principal balance of the related mortgage
loan during the relevant period at the applicable mortgage interest rate. In
such event, the amount of interest that is treated as deferred interest will be
added to the principal balance of the related mortgage loan and will be
distributed pro rata to certificate-holders as principal of such mortgage loan
            --- ----
when paid by the mortgagor in subsequent monthly payments or at maturity.

     Ratings.  The ratings assigned by a rating organization to Mortgage Pass-
Throughs address the likelihood of the receipt of all distributions on the
underlying mortgage loans by the related certificate-holders under the
agreements pursuant to which such certificates are issued. A rating
organization's ratings take into consideration the credit quality of the related
mortgage pool, including any credit support providers, structural and legal
aspects associated with such certificates, and the extent to which the payment
stream on such mortgage pool is adequate to make payments required by such
certificates. A rating organization's ratings on such certificates do not,
however, constitute a statement regarding frequency of prepayments on the
related mortgage loans. In addition, the rating assigned by a rating
organization to a certificate does not address the remote possibility that, in
the event of the insolvency of the issuer of certificates where a subordinated
interest was retained, the issuance and sale of the senior certificates may be
recharacterized as a financing and, as a result of such recharacterization,
payments on such certificates may be affected.

                                      B-7


     Credit Enhancement.  Credit support falls generally into two categories:
(i) liquidity protection and (ii) protection against losses resulting from
default by an obligor on the underlying assets.  Liquidity protection refers to
the provision of advances, generally by the entity administering the pools of
mortgages, the provision of a reserve fund, or a combination thereof, to ensure,
subject to certain limitations, that scheduled payments on the underlying pool
are made in a timely fashion. Protection against losses resulting from default
ensures ultimate payment of the obligations on at least a portion of the assets
in the pool.  Such credit support can be provided by, among other things,
payment guarantees, letters of credit, pool insurance, subordination, or any
combination thereof.

     Subordination; Shifting of Interest; Reserve Fund.  In order to achieve
ratings on one or more classes of Mortgage Pass-Throughs, one or more classes of
certificates may be subordinate certificates which provide that the rights of
the subordinate certificate-holders to receive any or a specified portion of
distributions with respect to the underlying mortgage loans may be subordinated
to the rights of the senior certificate-holders.  If so structured, the
subordination feature may be enhanced by distributing to the senior certificate-
holders on certain distribution dates, as payment of principal, a specified
percentage (which generally declines over time) of all principal payments
received during the preceding prepayment period ("shifting interest credit
enhancement").  This will have the effect of accelerating the amortization of
the senior certificates while increasing the interest in the trust fund
evidenced by the subordinate certificates.  Increasing the interest of the
subordinate certificates relative to that of the senior certificates is intended
to preserve the availability of the subordination provided by the subordinate
certificates.  In addition, because the senior certificate-holders in a shifting
interest credit enhancement structure are entitled to receive a percentage of
principal prepayments which is greater than their proportionate interest in the
trust fund, the rate of principal prepayments on the mortgage loans will have an
even greater effect on the rate of principal payments and the amount of interest
payments on, and the yield to maturity of, the senior certificates.

     In addition to providing for a preferential right of the senior
certificate-holders to receive current distributions from the mortgage pool, a
reserve fund may be established relating to such certificates (the "Reserve
Fund").  The Reserve Fund may be created with an initial cash deposit by the
originator or servicer and augmented by the retention of distributions otherwise
available to the subordinate certificate-holders or by excess servicing fees
until the Reserve Fund reaches a specified amount.

     The subordination feature, and any Reserve Fund, are intended to enhance
the likelihood of timely receipt by senior certificate-holders of the full
amount of scheduled monthly payments of principal and interest due them and will
protect the senior certificate-holders against certain losses; however, in
certain circumstances the Reserve Fund could be depleted and temporary
shortfalls could result.  In the event the Reserve Fund is depleted before the
subordinated amount is reduced to zero, senior certificate-holders will
nevertheless have a preferential right to receive current distributions from the
mortgage pool to the extent of the then outstanding subordinated amount. Unless
otherwise specified, until the subordinated amount is reduced to zero, on any
distribution date any amount otherwise distributable to the subordinate
certificates or, to the extent specified, in

                                      B-8


the Reserve Fund will generally be used to offset the amount of any losses
realized with respect to the mortgage loans ("Realized Losses"). Realized Losses
remaining after application of such amounts will generally be applied to reduce
the ownership interest of the subordinate certificates in the mortgage pool. If
the subordinated amount has been reduced to zero, Realized Losses generally will
be allocated pro rata among all certificate-holders in proportion to their
             --- ----
respective outstanding interests in the mortgage pool.

     Alternative Credit Enhancement.  As an alternative, or in addition to the
credit enhancement afforded by subordination, credit enhancement for Mortgage
Pass-Throughs may be provided by mortgage insurance, hazard insurance, by the
deposit of cash, certificates of deposit, letters of credit, a limited guaranty
or by such other methods as are acceptable to a rating agency.  In certain
circumstances, such as where credit enhancement is provided by guarantees or a
letter of credit, the security is subject to credit risk because of its exposure
to an external credit enhancement provider.

     Voluntary Advances.  Generally, in the event of delinquencies in payments
on the mortgage loans underlying the Mortgage Pass-Throughs, the servicer agrees
to make advances of cash for the benefit of certificate-holders, but only to the
extent that it determines such voluntary advances will be recoverable from
future payments and collections on the mortgage loans or otherwise.

     Optional Termination.  Generally, the servicer may, at its option with
respect to any certificates, repurchase all of the underlying mortgage loans
remaining outstanding at such time if the aggregate outstanding principal
balance of such mortgage loans is less than a specified percentage (generally
5-10%) of the aggregate outstanding principal balance of the mortgage loans as
of the cut-off date specified with respect to such series.

     Multiple Class Mortgage-Backed Securities and Collateralized Mortgage
Obligations.  A Fund may invest in multiple class securities including
collateralized mortgage obligations ("CMOs") and REMIC Certificates.  These
securities may be issued by U.S. Government agencies and instrumentalities such
as Fannie Mae or Freddie Mac or by trusts formed by private originators of, or
investors in, mortgage loans, including savings and loan associations, mortgage
bankers, commercial banks, insurance companies, investment banks and special
purpose subsidiaries of the foregoing.  In general, CMOs are debt obligations of
a legal entity that are collateralized by, and multiple class mortgage-backed
securities represent direct ownership interests in, a pool of mortgage loans or
mortgage-backed securities the payments on which are used to make payments on
the CMOs or multiple class mortgage-backed securities.

     Fannie Mae REMIC Certificates are issued and guaranteed as to timely
distribution of principal and interest by Fannie Mae.  In addition, Fannie Mae
will be obligated to distribute the principal balance of each class of REMIC
Certificates in full, whether or not sufficient funds are otherwise available.

     Freddie Mac guarantees the timely payment of interest on Freddie Mac REMIC
Certificates and also guarantees the payment of principal as payments are
required to be made on the underlying

                                      B-9


mortgage participation certificates ("PCs"). PCs represent undivided interests
in specified level payment, residential mortgages or participations therein
purchased by Freddie Mac and placed in a PC pool. With respect to principal
payments on PCs, Freddie Mac generally guarantees ultimate collection of all
principal of the related mortgage loans without offset or deduction. Freddie Mac
also guarantees timely payment of principal of certain PCs.

     CMOs and guaranteed REMIC Certificates issued by Fannie Mae and Freddie Mac
are types of multiple class mortgage-backed securities. Investors may purchase
beneficial interests in REMICs, which are known as "regular" interests or
"residual" interests. The Funds do not intend to purchase residual interests in
REMICs. The REMIC Certificates represent beneficial ownership interests in a
REMIC trust, generally consisting of mortgage loans or Fannie Mae, Freddie Mac
or Ginnie Mae guaranteed mortgage-backed securities (the "Mortgage Assets"). The
obligations of Fannie Mae or Freddie Mac under their respective guaranty of the
REMIC Certificates are obligations solely of Fannie Mae or Freddie Mac,
respectively.

     CMOs and REMIC Certificates are issued in multiple classes. Each class of
CMOs or REMIC Certificates, often referred to as a "tranche," is issued at a
specific adjustable or fixed interest rate and must be fully retired no later
than its final distribution date. Principal prepayments on the Mortgage Loans or
the Mortgage Assets underlying the CMOs or REMIC Certificates may cause some or
all of the classes of CMOs or REMIC Certificates to be retired substantially
earlier than their final distribution dates. Generally, interest is paid or
accrues on all classes of CMOs or REMIC Certificates on a monthly basis.

     The principal of and interest on the Mortgage Assets may be allocated among
the several classes of CMOs or REMIC Certificates in various ways.  In certain
structures (known as "sequential pay" CMOs or REMIC Certificates), payments of
principal, including any principal prepayments, on the Mortgage Assets generally
are applied to the classes of CMOs or REMIC Certificates in the order of their
respective final distribution dates.  Thus, no payment of principal will be made
on any class of sequential pay CMOs or REMIC Certificates until all other
classes having an earlier final distribution date have been paid in full.

     Additional structures of CMOs and REMIC Certificates include, among others,
"parallel pay" CMOs and REMIC Certificates.  Parallel pay CMOs or REMIC
Certificates are those which are structured to apply principal payments and
prepayments of the Mortgage Assets to two or more classes concurrently on a
proportionate or disproportionate basis.  These simultaneous payments are taken
into account in calculating the final distribution date of each class.

     A wide variety of REMIC Certificates may be issued in parallel pay or
sequential pay structures.  These securities include accrual certificates (also
known as "Z-Bonds"), which only accrue interest at a specified rate until all
other certificates having an earlier final distribution date have been retired
and are converted thereafter to an interest-paying security, and planned
amortization class ("PAC") certificates, which are parallel pay REMIC
Certificates that generally require that specified amounts of principal be
applied on each payment date to one or more classes or REMIC Certificates (the
"PAC Certificates"), even though all other principal payments and prepayments of
the Mortgage Assets are then required to be applied to one or more other classes
of

                                     B-10


the PAC Certificates. The scheduled principal payments for the PAC Certificates
generally have the highest priority on each payment date after interest due has
been paid to all classes entitled to receive interest currently. Shortfalls, if
any, are added to the amount payable on the next payment date. The PAC
Certificate payment schedule is taken into account in calculating the final
distribution date of each class of PAC. In order to create PAC tranches, one or
more tranches generally must be created that absorb most of the volatility in
the underlying mortgage assets. These tranches tend to have market prices and
yields that are much more volatile than other PAC classes.

Asset-Backed Securities
-----------------------

     Each Fund may invest in asset-backed securities. Asset-backed securities
represent participation in, or are secured by and payable from, assets such as
motor vehicle installment sales, installment loan contracts, leases of various
types of real and personal property, receivables from revolving credit (credit
card) agreements and other categories of receivables. Such assets are
securitized through the use of trusts and special purpose corporations. Payments
or distributions of principal and interest may be guaranteed up to certain
amounts and for a certain time period by a letter of credit or a pool insurance
policy issued by a financial institution unaffiliated with the trust or
corporation, or other credit enhancements may be present.

     Like mortgage-backed securities, asset-backed securities are often subject
to more rapid repayment than their stated maturity date would indicate as a
result of the pass-through of prepayments of principal on the underlying loans.
A Fund's ability to maintain positions in such securities will be affected by
reductions in the principal amount of such securities resulting from
prepayments, and its ability to reinvest the returns of principal at comparable
yields is subject to generally prevailing interest rates at that time. To the
extent that a Fund invests in asset-backed securities, the values of such Fund's
portfolio securities will vary with changes in market interest rates generally
and the differentials in yields among various kinds of asset-backed securities.

     Asset-backed securities present certain additional risks that are not
presented by mortgage-backed securities because asset-backed securities
generally do not have the benefit of a security interest in collateral that is
comparable to mortgage assets. Credit card receivables are generally unsecured
and the debtors on such receivables are entitled to the protection of a number
of state and federal consumer credit laws, many of which give such debtors the
right to set-off certain amounts owed on the credit cards, thereby reducing the
balance due. Automobile receivables generally are secured, but by automobiles
rather than residential real property. Most issuers of automobile receivables
permit the loan servicers to retain possession of the underlying obligations. If
the servicer were to sell these obligations to another party, there is a risk
that the purchaser would acquire an interest superior to that of the holders of
the asset-backed securities. In addition, because of the large number of
vehicles involved in a typical issuance and technical requirements under state
laws, the trustee for the holders of the automobile receivables may not have a
proper security interest in the underlying automobiles. Therefore, there is the
possibility that, in some cases, recoveries on repossessed collateral may not be
available to support payments on these securities.

                                     B-11


Futures Contracts and Options on Futures Contracts
--------------------------------------------------

     Each Fund may purchase and sell futures contracts and may also purchase and
write options on futures contracts. The Funds may purchase and sell futures
contracts based on various securities (such as U.S. Government securities),
securities indices, foreign currencies and other financial instruments and
indices. Each Fund will engage in futures and related options transactions, only
for bona fide hedging purposes as defined below or for purposes of seeking to
increase total return to the extent permitted by regulations of the Commodity
Futures Trading Commission ("CFTC"). Futures contracts entered into by a Fund
are traded on U.S. exchanges or boards of trade that are licensed and regulated
by the CFTC or on foreign exchanges. Neither the CFTC, National Futures
Association nor any domestic exchange regulates activities of any foreign
exchange or boards of trade, including the execution, delivery and clearing of
transactions, or has the power to compel enforcement of the rules of a foreign
exchange or board of trade or any applicable foreign law. This is true even if
the exchange is formally linked to a domestic market so that a position taken on
the market may be liquidated by a transaction on another market. Moreover, such
laws or regulations will vary depending on the foreign country in which the
foreign futures or foreign options transaction occurs. For these reasons,
persons who trade foreign futures or foreign options contracts may not be
afforded certain of the protective measures provided by the Commodity Exchange
Act, the CFTC's regulations and the rules of the National Futures Association
and any domestic exchange, including the right to use reparations proceedings
before the CFTC and arbitration proceedings provided by the National Futures
Association or any domestic futures exchange. In particular, a Fund's
investments in foreign futures or foreign options transactions may not be
provided the same protections in respect of transactions on United States
futures exchanges.

     Futures Contracts.  A futures contract may generally be described as an
agreement between two parties to buy and sell particular financial instruments
for an agreed price during a designated month (or to deliver the final cash
settlement price, in the case of a contract relating to an index or otherwise
not calling for physical delivery at the end of trading in the contract).

     When interest rates are rising or securities prices are falling, a Fund can
seek through the sale of futures contracts to offset a decline in the value of
its current portfolio securities.  When rates are falling or prices are rising,
a Fund, through the purchase of futures contracts, can attempt to secure better
rates or prices than might later be available in the market when it effects
anticipated purchases. Similarly, each Fund can purchase and sell futures
contracts on a specified currency in order to seek to increase total return or
to hedge against changes in currency exchange rates.  Each Fund can purchase
futures contracts on foreign currency to establish the price in U.S. dollars of
a security quoted or denominated in such currency that such Fund has acquired or
expects to acquire.

     Positions taken in the futures market are not normally held to maturity,
but are instead liquidated through offsetting transactions which may result in a
profit or a loss.  While each Fund will usually liquidate futures contracts on
securities or currency in this manner, a Fund may instead make or take delivery
of the underlying securities or currency whenever it appears economically
advantageous for the Fund to do so.  A clearing corporation associated with the
exchange on which

                                     B-12


futures are traded guarantees that, if still open, the sale or purchase will be
performed on the settlement date.

     Hedging Strategies. Hedging, by use of futures contracts, seeks to
establish with more certainty than would otherwise be possible the effective
price, rate of return or currency exchange rate on portfolio securities or
securities that a Fund owns or proposes to acquire. A Fund may, for example,
take a "short" position in the futures market by selling futures contracts to
seek to hedge against an anticipated rise in interest rates or a decline in
market prices or foreign currency rates that would adversely affect the dollar
value of such Fund's portfolio securities. Similarly, each Fund may sell futures
contracts on a currency in which its portfolio securities are quoted or
denominated or in one currency to seek to hedge against fluctuations in the
value of securities quoted or denominated in a different currency if there is an
established historical pattern of correlation between the two currencies. If, in
the opinion of the Investment Adviser, there is a sufficient degree of
correlation between price trends for a Fund's portfolio securities and futures
contracts based on other financial instruments, securities indices or other
indices, a Fund may also enter into such futures contracts as part of its
hedging strategy. Although under some circumstances prices of securities in a
Fund's portfolio may be more or less volatile than prices of such futures
contracts, the Investment Adviser will attempt to estimate the extent of this
volatility difference based on historical patterns and compensate for any such
differential by having a Fund enter into a greater or lesser number of futures
contracts or by attempting to achieve only a partial hedge against price changes
affecting a Fund's securities portfolio. When hedging of this character is
successful, any depreciation in the value of portfolio securities will be
substantially offset by appreciation in the value of the futures position. On
the other hand, any unanticipated appreciation in the value of a Fund's
portfolio securities would be substantially offset by a decline in the value of
the futures position.

     On other occasions, a Fund may take a "long" position by purchasing such
futures contracts. This may be done, for example, when a Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.

     Options on Futures Contracts. The acquisition of put and call options on
futures contracts will give a Fund the right (but not the obligation), for a
specified price, to sell or to purchase, respectively, the underlying futures
contract at any time during the option period. As the purchaser of an option on
a futures contract, a Fund obtains the benefit of the futures position if prices
move in a favorable direction but limits its risk of loss in the event of an
unfavorable price movement to the loss of the premium and transaction costs.

     The writing of a call option on a futures contract generates a premium
which may partially offset a decline in the value of a Fund's assets. By writing
a call option, a Fund becomes obligated, in exchange for the premium, to sell a
futures contract if the option is exercised, which may have a value higher than
the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium, which may partially offset an increase in the
price of securities that a Fund intends to purchase. However, a Fund becomes
obligated to purchase a futures contract if the

                                     B-13


option is exercised, which may have a value lower than the exercise price. Thus,
the loss incurred by a Fund in writing options on futures is potentially
unlimited and may exceed the amount of the premium received. A Fund will incur
transaction costs in connection with the writing of options on futures.

     The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same financial
instrument. There is no guarantee that such closing transactions can be
effected. A Fund's ability to establish and close out positions on such options
will be subject to the development and maintenance of a liquid market.

     Other Considerations.  Each Fund will engage in futures transactions and
will engage in related options transactions only for bona fide hedging as
defined in the regulations of the CFTC or to seek to increase total return to
the extent permitted by such regulations.

     In addition to bona fide hedging, a CFTC regulation permits a Fund to
engage in other future transactions if the aggregate initial margin and premiums
required to establish such positions in futures contracts and options on futures
do not exceed 5% of the net asset value of such Fund's portfolio, after taking
into account unrealized profits and losses on any such positions and excluding
the amount by which such options were in-the-money at the time of purchase.  A
Fund will engage in transactions in futures contracts and, for a Fund permitted
to do so, related options transactions only to the extent such transactions are
consistent with the requirements of the Internal Revenue Code of 1986 as amended
(the "Code") for maintaining its qualification as a regulated investment company
for federal income tax purposes.

     Transactions in futures contracts and options on futures involve brokerage
costs, require margin deposits and, in certain cases, require the Fund to
segregate with its custodian cash or liquid assets in an amount equal to the
underlying value of such contracts and options.

     While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks.  Thus,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for a Fund than if it had not
entered into any futures contracts or options transactions.  In the event of an
imperfect correlation between a futures position and a portfolio position which
is intended to be protected, the desired protection may not be obtained and a
Fund may be exposed to risk of loss.

     Perfect correlation between a Fund's futures positions and portfolio
positions will be difficult to achieve because no futures contracts based on
individual equity or corporate fixed-income securities are currently available.
In addition, it is not possible for a Fund to hedge fully or perfectly against
currency fluctuations affecting the value of securities quoted or denominated in
foreign currencies because the value of such securities is likely to fluctuate
as a result of independent factors not related to currency fluctuations.  The
profitability of a Fund's trading in futures depends upon the ability of the
Investment Adviser to analyze correctly the futures markets.

                                     B-14


Options on Securities and Securities Indices
--------------------------------------------

     Writing Covered Options. Each Fund may write (sell) covered call and put
options on any securities in which it may invest. A call option written by a
Fund obligates such Fund to sell specified securities to the holder of the
option at a specified price if the option is exercised at any time before the
expiration date. All call options written by a Fund are covered, which means
that such Fund will own the securities subject to the option as long as the
option is outstanding or such Fund will use the other methods described below. A
Fund's purpose in writing covered call options is to realize greater income than
would be realized on portfolio securities transactions alone. However, a Fund
may forego the opportunity to profit from an increase in the market price of the
underlying security.

     A put option written by a Fund would obligate such Fund to purchase
specified securities from the option holder at a specified price if the option
is exercised at any time before the expiration date. All put options written by
a Fund would be covered, which means that such Fund will segregate cash or
liquid assets with a value at least equal to the exercise price of the put
option or will use the other methods described below. The purpose of writing
such options is to generate additional income for the Fund. However, in return
for the option premium, each Fund accepts the risk that it may be required to
purchase the underlying securities at a price in excess of the securities'
market value at the time of purchase.

     Call and put options written by a Fund will also be considered to be
covered to the extent that the Fund's liabilities under such options are wholly
or partially offset by its rights under call and put options purchased by the
Fund or by an offsetting forward contract which, by virtue of its exercise price
or otherwise, reduces a Fund's net exposure on its written option position.

     A Fund may also write (sell) covered call and put options on any securities
index consisting of securities in which it may invest. Options on securities
indices are similar to options on securities, except that the exercise of
securities index options requires cash payments and does not involve the actual
purchase or sale of securities. In addition, securities index options are
designed to reflect price fluctuations in a group of securities or segment of
the securities market rather than price fluctuations in a single security.

     A Fund may cover call options on a securities index by owning securities
whose price changes are expected to be similar to those of the underlying index,
or by having an absolute and immediate right to acquire such securities without
additional cash consideration (or for additional cash consideration which has
been segregated by the Fund) upon conversion or exchange of other securities in
its portfolio. A Fund may cover call and put options on a securities index by
segregating cash or liquid assets with a value equal to the exercise price.

     A Fund may terminate its obligations under an exchange traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."

                                     B-15


     Purchasing Options. Each Fund may purchase put and call options on any
securities in which it may invest or options on any securities index composed of
securities in which it may invest. A Fund would also be able to enter into
closing sale transactions in order to realize gains or minimize losses on
options it had purchased.

     A Fund may purchase call options in anticipation of an increase in the
market value of securities of the type in which it may invest. The purchase of a
call option would entitle a Fund, in return for the premium paid, to purchase
specified securities at a specified price during the option period. A Fund would
ordinarily realize a gain if, during the option period, the value of such
securities exceeded the sum of the exercise price, the premium paid and
transaction costs; otherwise such a Fund would realize either no gain or a loss
on the purchase of the call option.

     A Fund may purchase put options in anticipation of a decline in the market
value of securities in its portfolio ("protective puts") or in securities in
which it may invest. The purchase of a put option would entitle a Fund, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
or hedge against a decline in the market value of a Fund's securities. Put
options may also be purchased by a Fund for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. A
Fund would ordinarily realize a gain if, during the option period, the value of
the underlying securities decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise such a Fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the underlying portfolio securities.

     A Fund would purchase put and call options on securities indices for the
same purposes as it would purchase options on individual securities. For a
description of options on securities indices, see "Writing Covered Options"
above.

     Risks Associated with Options Transactions. There is no assurance that a
liquid secondary market on an options exchange will exist for any particular
exchange-traded option or at any particular time. If a Fund is unable to effect
a closing purchase transaction with respect to covered options it has written,
the Fund will not be able to sell the underlying securities or dispose of
segregated assets until the options expire or are exercised. Similarly, if a
Fund is unable to effect a closing sale transaction with respect to options it
has purchased, it will have to exercise the options in order to realize any
profit and will incur transaction costs upon the purchase or sale of underlying
securities.

     Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation may not at all
times be adequate to handle current trading volume; or (vi) one or more
exchanges could, for economic or other reasons, decide or be

                                     B-16


compelled at some future date to discontinue the trading of options (or a
particular class or series of options), in which event the secondary market on
that exchange (or in that class or series of options) would cease to exist,
although outstanding options on that exchange that had been issued by the
Options Clearing Corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.

     Each Fund may purchase and sell both options that are traded on U.S. and
foreign exchanges and options traded over-the-counter with broker-dealers who
make markets in these options. The ability to terminate over-the-counter options
is more limited than with exchange-traded options and may involve the risk that
broker-dealers participating in such transactions will not fulfill their
obligations.

     Transactions by each Fund in options on securities and indices will be
subject to limitations established by each of the exchanges, boards of trade or
other trading facilities governing the maximum number of options in each class
which may be written or purchased by a single investor or group of investors
acting in concert. Thus, the number of options which a Fund may write or
purchase may be affected by options written or purchased by other investment
advisory clients of the Investment Adviser. An exchange, board of trade or other
trading facility may order the liquidation of positions found to be in excess of
these limits, and it may impose certain other sanctions.

     The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The use of options to seek to
increase total return involves the risk of loss if the Investment Adviser is
incorrect in its expectation of fluctuations in securities prices or interest
rates. The successful use of options for hedging purposes also depends in part
on the ability of the Investment Adviser to manage future price fluctuations and
the degree of correlation between the options and securities markets. If the
Investment Adviser is incorrect in its expectation of changes in securities
prices or determination of the correlation between the securities indices on
which options are written and purchased and the securities in a Fund's
investment portfolio, the investment performance of the Fund will be less
favorable than it would have been in the absence of such options transactions.
The writing of options could increase a Fund's portfolio turnover rate and,
therefore, associated brokerage commissions or spreads.

Real Estate Investment Trusts
-----------------------------

     Each Fund may invest in shares of REITs. REITs are pooled investment
vehicles which invest primarily in income producing real estate or real estate
related loans or interest. REITs are generally classified as equity REITs,
mortgage REITs or a combination of equity and mortgage REITs. Equity REITs
invest the majority of their assets directly in real property and derive income
primarily from the collection of rents. Equity REITs can also realize capital
gains by selling properties that have appreciated in value. Mortgage REITs
invest the majority of their assets in real estate mortgages and derive income
from the collection of interest payments. Like regulated investment companies
such as the Funds, REITs are not taxed on income distributed to shareholders
provided they comply with certain requirements under the Code. A Fund will

                                     B-17


indirectly bear its proportionate share of any expenses paid by REITs in which
it invests in addition to the expenses paid by a Fund.

     Investing in REITs involves certain unique risks. Equity REITs may be
affected by changes in the value of the underlying property owned by such REITs,
while mortgage REITs may be affected by the quality of any credit extended.
REITs are dependent upon management skills, are not diversified (except to the
extent the Code requires), and are subject to the risks of financing projects.
REITs are subject to heavy cash flow dependency, default by borrowers, self-
liquidation, and the possibilities of failing to qualify for the exemption from
tax for distributed income under the Code and failing to maintain their
exemptions from the Act. REITs (especially mortgage REITs) are also subject to
interest rate risks.

Warrants and Stock Purchase Rights
----------------------------------

     Each Fund may invest in warrants or rights (in addition to those acquired
in units or attached to other securities) which entitle the holder to buy equity
securities at a specific price for a specific period of time. A Fund will invest
in warrants and rights only if such equity securities are deemed appropriate by
the Investment Adviser for investment by the Fund. However, the Funds have no
present intention of acquiring warrants or rights. Warrants and rights have no
voting rights, receive no dividends and have no rights with respect to the
assets of the issuer.

Foreign Securities
------------------

     Each Fund will invest in securities of foreign issuers. Investments in
foreign securities may offer potential benefits not available from investments
solely in U.S. dollar-denominated or quoted securities of domestic issuers. Such
benefits may include the opportunity to invest in foreign issuers that appear,
in the opinion of the Investment Adviser, to offer the potential for long-term
growth of capital and income, the opportunity to invest in foreign countries
with economic policies or business cycles different from those of the United
States and the opportunity to reduce fluctuations in portfolio value by taking
advantage of foreign stock markets that do not necessarily move in a manner
parallel to U.S. markets.

     Investing in foreign securities involves certain special risks, including
those set forth below, which are not typically associated with investing in U.S.
dollar-denominated or quoted securities of U.S. issuers. Investments in foreign
securities usually involve currencies of foreign countries. Accordingly, a Fund
may be affected favorably or unfavorably by changes in currency rates and in
exchange control regulations and may incur costs in connection with conversions
between various currencies. The Funds may be subject to currency exposure
independent of their securities positions. To the extent that a Fund is fully
invested in foreign securities while also maintaining currency positions, it may
be exposed to greater combined risk.

     Currency exchange rates may fluctuate significantly over short periods of
time. They generally are determined by the forces of supply and demand in the
foreign exchange markets and the relative merits of investments in different
countries, actual or anticipated changes in interest rates and other complex
factors, as seen from an international perspective. Currency exchange rates

                                     B-18


also can be affected unpredictably by intervention by U.S. or foreign
governments or central banks or the failure to intervene or by currency controls
or political developments in the United States or abroad.

     Since foreign issuers generally are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to U.S. companies, there may be less publicly
available information about a foreign company than about a U.S. company. Volume
and liquidity in most foreign securities markets are less than in the United
States and securities of many foreign companies are less liquid and more
volatile than securities of comparable U.S. companies. Fixed commissions on
foreign securities exchanges are generally higher than negotiated commissions on
U.S. exchanges, although each Fund endeavors to achieve the most favorable net
results on its portfolio transactions. There is generally less government
supervision and regulation of foreign securities exchanges, brokers, dealers and
listed and unlisted companies than in the United States.

     Foreign markets also have different clearance and settlement procedures,
and in certain markets there have been times when settlements have been unable
to keep pace with the volume of securities transactions, making it difficult to
conduct such transactions. Such delays in settlement could result in temporary
periods when some of a Fund's assets are uninvested and no return is earned on
such assets. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to the Fund due to subsequent declines in
value of the portfolio securities or, if the Fund has entered into a contract to
sell the securities, could result in possible liability to the purchaser. In
addition, with respect to certain foreign countries, there is the possibility of
expropriation or confiscatory taxation, political or social instability, or
diplomatic developments which could affect a Fund's investments in those
countries. Moreover, individual foreign economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross national
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position.

     Each Fund may invest in foreign securities which take the form of sponsored
and unsponsored American Depositary Receipts ("ADRs") and Global Depositary
Receipts ("GDRs") and may also invest in European Depositary Receipts ("EDRs")
or other similar instruments representing securities of foreign issuers
(together, "Depositary Receipts").

     ADRs represent the right to receive securities of foreign issuers deposited
in a domestic bank or a correspondent bank. ADRs are traded on domestic
exchanges or in the U.S. over-the-counter market and, generally, are in
registered form. EDRs and GDRs are receipts evidencing an arrangement with a
non-U.S. bank similar to that for ADRs and are designed for use in the non-U.S.
securities markets. EDRs and GDRs are not necessarily quoted in the same
currency as the underlying security.

     To the extent a Fund acquires Depositary Receipts through banks which do
not have a contractual relationship with the foreign issuer of the security
underlying the Depositary Receipts to issue and service such Depositary Receipts
(unsponsored), there may be an increased possibility

                                     B-19


that the Fund would not become aware of and be able to respond to corporate
actions such as stock splits or rights offerings involving the foreign issuer in
a timely manner. In addition, the lack of information may result in
inefficiencies in the valuation of such instruments. Investment in Depositary
Receipts does not eliminate all the risks inherent in investing in securities of
non-U.S. issuers. The market value of Depositary Receipts is dependent upon the
market value of the underlying securities and fluctuations in the relative value
of the currencies in which the Depositary Receipts and the underlying securities
are quoted. However, by investing in Depositary Receipts, such as ADRs, that are
quoted in U.S. dollars, a Fund may avoid currency risks during the settlement
period for purchases and sales.

     As described more fully below, each Fund may invest in countries with
emerging economies or securities markets. Political and economic structures in
many of such countries may be undergoing significant evolution and rapid
development, and such countries may lack the social, political and economic
stability characteristic of more developed countries. Certain of such countries
may have in the past failed to recognize private property rights and have at
times nationalized or expropriated the assets of private companies. As a result,
the risks described above, including the risks of nationalization or
expropriation of assets, may be heightened. See "Investing in Emerging Markets,
including Asia and Eastern Europe," below.

     Investing in Emerging Countries, including Asia and Eastern Europe. The
Funds are intended for long-term investors who can accept the risks associated
with investing primarily in equity and equity-related securities of foreign
issuers, including emerging country issuers, as well as the risks associated
with investments quoted or denominated in foreign currencies. Each Fund may
invest, to a lesser extent, in equity and equity-related securities of foreign
issuers, including emerging country issuers.

     Each of the securities markets of the emerging countries is less liquid and
subject to greater price volatility and has a smaller market capitalization than
the U.S. securities markets. Issuers and securities markets in such countries
are not subject to as extensive and frequent accounting, financial and other
reporting requirements or as comprehensive government regulations as are issuers
and securities markets in the U.S. In particular, the assets and profits
appearing on the financial statements of emerging country issuers may not
reflect their financial position or results of operations in the same manner as
financial statements for U.S. issuers. Substantially less information may be
publicly available about emerging country issuers than is available about
issuers in the United States.

     Emerging country securities markets are typically marked by a high
concentration of market capitalization and trading volume in a small number of
issuers representing a limited number of industries, as well as a high
concentration of ownership of such securities by a limited number of investors.
The markets for securities in certain emerging countries are in the earliest
stages of their development. Even the markets for relatively widely traded
securities in emerging countries may not be able to absorb, without price
disruptions, a significant increase in trading volume or trades of a size
customarily undertaken by institutional investors in the securities markets of
developed countries. The limited size of many of these securities markets can
cause prices to be erratic for reasons apart from factors that affect the
soundness and competitiveness of the securities issuers.

                                     B-20


For example, prices may be unduly influenced by traders who control large
positions in these markets. Additionally, market making and arbitrage activities
are generally less extensive in such markets, which may contribute to increased
volatility and reduced liquidity of such markets. The limited liquidity of
emerging country markets may also affect a Fund's ability to accurately value
its portfolio securities or to acquire or dispose of securities at the price and
time it wishes to do so or in order to meet redemption requests.

     Transaction costs, including brokerage commissions or dealer mark-ups, in
emerging countries may be higher than in the United States and other developed
securities markets. In addition, existing laws and regulations are often
inconsistently applied. As legal systems in emerging countries develop, foreign
investors may be adversely affected by new or amended laws and regulations. In
circumstances where adequate laws exist, it may not be possible to obtain swift
and equitable enforcement of the law.

     Foreign investment in the securities markets of certain emerging countries
is restricted or controlled to varying degrees. These restrictions may limit a
Fund's investment in certain emerging countries and may increase the expenses of
the Fund. Certain emerging countries require governmental approval prior to
investments by foreign persons or limit investment by foreign persons to only a
specified percentage of an issuer's outstanding securities or a specific class
of securities which may have less advantageous terms (including price) than
securities of the company available for purchase by nationals. In addition, the
repatriation of both investment income and capital from several of the emerging
countries is subject to restrictions which require governmental consents or
prohibit repatriation entirely for a period of time. Even where there is no
outright restriction on repatriation of capital, the mechanics of repatriation
may affect certain aspects of the operation of a Fund. A Fund may be required to
establish special custodial or other arrangements before investing in certain
emerging countries.

     Each of the emerging countries may be subject to a substantially greater
degree of economic, political and social instability and disruption than is the
case in the United States, Japan and most Western European countries. This
instability may result from, among other things, the following: (i)
authoritarian governments or military involvement in political and economic
decision making, including changes or attempted changes in governments through
extra-constitutional means; (ii) popular unrest associated with demands for
improved political, economic or social conditions; (iii) internal insurgencies;
(iv) hostile relations with neighboring countries; (v) ethnic, religious and
racial disaffection or conflict; and (vi) the absence of developed legal
structures governing foreign private investments and private property. Such
economic, political and social instability could disrupt the principal financial
markets in which the Funds may invest and adversely affect the value of the
Funds' assets. A Fund's investments can also be adversely affected by any
increase in taxes or by political, economic or diplomatic developments. Certain
Funds may seek investment opportunities within former "east bloc" countries in
Eastern Europe. All or a substantial portion of such investments may be
considered "not readily marketable" for purposes of the limitation on illiquid
securities set forth below. For example, most Eastern European countries had a
centrally planned, socialist economy for an extended period of time after World
War II. The governments of a number of Eastern European countries currently are
implementing reforms directed at political and economic liberalization,
including efforts to decentralize the economic

                                     B-21


decision-making process and move towards a market economy. However, business
entities in many Eastern European countries do not have an extended history of
operating in a market-oriented economy, and the ultimate impact of Eastern
European countries' attempts to move toward more market-oriented economies is
currently unclear. In addition, any change in the leadership or policies of
Eastern European countries may halt the expansion of or reverse the
liberalization of foreign investment policies now occurring and adversely affect
existing investment opportunities.

     The economies of emerging countries may differ unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate of inflation,
capital reinvestment, resources, self-sufficiency and balance of payments. Many
emerging countries have experienced in the past, and continue to experience,
high rates of inflation. In certain countries inflation has at times accelerated
rapidly to hyperinflationary levels, creating a negative interest rate
environment and sharply eroding the value of outstanding financial assets in
those countries. The economies of many emerging countries are heavily dependent
upon international trade and are accordingly affected by protective trade
barriers and the economic conditions of their trading partners. In addition, the
economies of some emerging countries are vulnerable to weakness in world prices
for their commodity exports.

     A Fund's income and, in some cases, capital gains from foreign stocks and
securities will be subject to applicable taxation in certain of the countries in
which it invests, and treaties between the U.S. and such countries may not be
available in some cases to reduce the otherwise applicable tax rates. See
"Taxation."

     Foreign markets also have different clearance and settlement procedures,
and in certain markets there have been times when settlements have been unable
to keep pace with the volume of securities transactions, making it difficult to
conduct such transactions. Such delays in settlement could result in temporary
periods when a portion of the assets of a Fund remain uninvested and no return
is earned on such assets. The inability of a Fund to make intended security
purchases or sales due to settlement problems could result either in losses to
the Fund due to subsequent declines in value of the portfolio securities or, if
the Fund has entered into a contract to sell the securities, could result in
possible liability to the purchaser.

     Investing in Japan.  A Fund may make substantial investments in the equity
securities of Japanese companies. Japan's economy, the second-largest in the
world, has grown substantially over the last three decades. The boom in Japan's
equity and property markets during the expansion of the late 1980's supported
high rates of investment and consumer spending on durable goods, but both of
these components of demand have now retreated sharply following the decline in
asset prices. Profits have fallen sharply, unemployment has reached a historical
high and consumer confidence is low. The banking sector continues to suffer from
non-performing loans and this economy is subject to deflationary pressures.
Numerous discount-rate cuts since its peak in 1991, a succession of fiscal
stimulus packages, support plans for the debt-burdened financial system and
spending for reconstruction following the Kobe earthquake may help to contain
the recessionary forces, but substantial uncertainties remain.

                                     B-22


     In addition to the cyclical downturn, Japan is suffering through structural
adjustments. Like the Europeans, the Japanese have seen a deterioration of their
competitiveness due to high wages, a strong currency and structural rigidities.
Finally, Japan is reforming its political process and deregulating its economy.
This has brought about turmoil, uncertainty and a crisis of confidence.

     While the Japanese governmental system itself seems stable, the dynamics of
the country's politics have been unpredictable in recent years. The economic
crisis of 1990-92 brought the downfall of the conservative Liberal Democratic
Party, which had ruled since 1955. Since then, the country has seen a series of
unstable multi-party coalitions and several prime ministers come and go, because
of politics as well as personal scandals. While there appears to be no reason
for anticipating civic unrest, it is impossible to know when the political
instability will end and what trade and fiscal policies might be pursued by the
government that emerges.

     Japan's heavy dependence on international trade has been adversely affected
by trade tariffs and other protectionist measures as well as the economic
condition of its trading partners. While Japan subsidizes its agricultural
industry, only 19% of its land is suitable for cultivation and it is only 50%
self-sufficient in food production. Accordingly, it is highly dependent on large
imports of wheat, sorghum and soybeans. In addition, industry, its most
important economic sector, depends on imported raw materials and fuels,
including iron ore, copper, oil and many forest products. Japan's high volume of
exports, such as automobiles, machine tools and semiconductors, have caused
trade tensions, particularly with the United States. Some trade agreements,
however, have been implemented to reduce these tensions. The relaxing of
official and de facto barriers to imports, or hardships created by any pressures
brought by trading partners, could adversely affect Japan's economy. A
substantial rise in world oil or commodity prices could also have a negative
affect. The strength of the yen itself may prove an impediment to strong
continued exports and economic recovery, because it makes Japanese goods sold in
other countries more expensive and reduces the value of foreign earnings
repatriated to Japan. Because the Japanese economy is so dependent on exports,
any fall-off in exports may be seen as a sign of economic weakness, which may
adversely affect the market.

     Geologically, Japan is located in a volatile area of the world, and has
historically been vulnerable to earthquakes, volcanoes and other natural
disasters. As demonstrated by the Kobe earthquake in January of 1995, in which
5,000 people were killed and billions of dollars of damage was sustained, these
natural disasters can be significant enough to affect the country's economy.

     Forward Foreign Currency Exchange Contracts. The Funds may enter into
forward foreign currency exchange contracts for hedging purposes and to seek to
protect against anticipated changes in future foreign currency exchange rates or
to seek to increase total return. A forward foreign currency exchange contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract agreed upon
by the parties, at a price set at the time of the contract. These contracts are
traded in the interbank market between currency traders (usually large
commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are generally charged at any stage for
trades.

                                     B-23


     At the maturity of a forward contract a Fund may either accept or make
delivery of the currency specified in the contract or, at or prior to maturity,
enter into a closing transaction involving the purchase or sale of an offsetting
contract. Closing transactions with respect to forward contracts are often, but
not always, effected with the currency trader who is a party to the original
forward contract.

     A Fund may enter into forward foreign currency exchange contracts in
several circumstances. First, when a Fund enters into a contract for the
purchase or sale of a security denominated or quoted in a foreign currency, or
when a Fund anticipates the receipt in a foreign currency of dividend or
interest payments on such a security which it holds, the Fund may desire to
"lock in" the U.S. dollar price of the security or the U.S. dollar equivalent of
such dividend or interest payment, as the case may be. By entering into a
forward contract for the purchase or sale, for a fixed amount of dollars, of the
amount of foreign currency involved in the underlying transactions, the Fund
will attempt to protect itself against an adverse change in the relationship
between the U.S. dollar and the subject foreign currency during the period
between the date on which the security is purchased or sold, or on which the
dividend or interest payment is declared, and the date on which such payments
are made or received.

     Additionally, when the Investment Adviser believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, it may enter into a forward contract to sell, for a fixed amount of U.S.
dollars, the amount of foreign currency approximating the value of some or all
of such Fund's portfolio securities quoted or denominated in such foreign
currency. The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible because the future value
of such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. Using forward contracts to
protect the value of a Fund's portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. It simply establishes a rate of exchange which a Fund can
achieve at some future point in time. The precise projection of short-term
currency market movements is not possible, and short-term hedging provides a
means of fixing the U.S. dollar value of only a portion of a Fund's foreign
assets.

     The Funds may engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities quoted or
denominated in a different currency if GSAM or GSAMI determines that there is a
pattern of correlation between the two currencies.

     The Funds may also enter into forward contracts to seek to increase total
return. Unless otherwise covered in accordance with applicable regulations, cash
or liquid assets of a Fund will be segregated in an amount equal to the value of
the Fund's total assets committed to the consummation of forward foreign
currency exchange contracts. The segregated assets will be marked-to-market on a
daily basis. If the value of the segregated assets declines, additional cash or
liquid assets will be segregated on a daily basis so that the value of the
assets will equal the amount of a Fund's commitments with respect to such
contracts. Although the contracts are not presently regulated by the CFTC, the
CFTC may in the future assert authority to regulate these contracts. If

                                     B-24


this happens, a Fund's ability to utilize forward foreign currency exchange
contracts may be restricted.

     While a Fund may enter into forward contracts to reduce currency exchange
rate risks, transactions in such contracts involve certain other risks. Thus,
while the Fund may benefit from such transactions, unanticipated changes in
currency prices may result in a poorer overall performance for the Fund than if
it had not engaged in any such transactions. Moreover, there may be imperfect
correlation between a Fund's portfolio holdings of securities quoted or
denominated in a particular currency and forward contracts entered into by such
Fund. Such imperfect correlation may cause a Fund to sustain losses which will
prevent the Fund from achieving a complete hedge or expose the Fund to risk of
foreign exchange loss.

     Markets for trading foreign forward currency contracts offer less
protection against defaults than is available when trading in currency
instruments on an exchange. Forward contracts are subject to the risk that the
counterparty to such contract will default on its obligations. Since a forward
foreign currency exchange contract is not guaranteed by an exchange or
clearinghouse, a default on the contract would deprive a Fund of unrealized
profits, transaction costs or the benefits of a currency hedge or force the Fund
to cover its purchase or sale commitments, if any, at the current market price.
A Fund will not enter into forward foreign currency exchange contracts, currency
swaps or other privately negotiated currency instruments unless the credit
quality of the unsecured senior debt or the claims-paying ability of the
counterparty is considered to be investment grade by the Investment Adviser. To
the extent that a substantial portion of a Fund's total assets, adjusted to
reflect the Fund's net position after giving effect to currency transactions, is
denominated or quoted in the currencies of foreign countries, the Fund will be
more susceptible to the risk of adverse economic and political developments
within those countries.

     Writing and Purchasing Currency Call and Put Options. Each Fund may, to the
extent that it invests in foreign securities, write and purchase put and call
options on foreign currencies for the purpose of protecting against declines in
the U.S. dollar value of foreign portfolio securities and against increases in
the U.S. dollar cost of foreign securities to be acquired. As with other kinds
of option transactions, however, the writing of an option on foreign currency
will constitute only a partial hedge, up to the amount of the premium received.
If and when a Fund seeks to close out an option, the Fund could be required to
purchase or sell foreign currencies at disadvantageous exchange rates, thereby
incurring losses. The purchase of an option on foreign currency may constitute
an effective hedge against exchange rate fluctuations; however, in the event of
exchange rate movements adverse to a Fund's position, the Fund may forfeit the
entire amount of the premium plus related transaction costs. Options on foreign
currencies to be written or purchased by a Fund will be traded on U.S. and
foreign exchanges or over-the-counter.

     Options on currency may be used for either hedging or cross-hedging
purposes, which involves writing or purchasing options on one currency to hedge
against changes in exchange rates for a different currency with a pattern of
correlation, or to seek to increase total return when the Investment Adviser
anticipates that the currency will appreciate or depreciate in value, but the
securities quoted or denominated in that currency do not present attractive
investment opportunities and are not included in the Fund's portfolio.

                                     B-25


     A call option written by a Fund obligates a Fund to sell a specified
currency to the holder of the option at a specified price if the option is
exercised at any time before the expiration date. A put option written by a Fund
would obligate a Fund to purchase a specified currency from the option holder at
a specified price if the option is exercised at any time before the expiration
date. The writing of currency options involves a risk that a Fund will, upon
exercise of the option, be required to sell currency subject to a call at a
price that is less than the currency's market value or be required to purchase
currency subject to a put at a price that exceeds the currency's market value.
For a description of how to cover written put and call options, see "Writing
Covered Options" above.

     A Fund may terminate its obligations under a call or put option by
purchasing an option identical to the one it has written. Such purchases are
referred to as "closing purchase transactions." A Fund may enter into closing
sale transactions in order to realize gains or minimize losses on options
purchased by the Fund.

     A Fund would normally purchase call options on foreign currency in
anticipation of an increase in the U.S. dollar value of currency in which
securities to be acquired by a Fund are quoted or denominated. The purchase of a
call option would entitle the Fund, in return for the premium paid, to purchase
specified currency at a specified price during the option period. A Fund would
ordinarily realize a gain if, during the option period, the value of such
currency exceeded the sum of the exercise price, the premium paid and
transaction costs; otherwise the Fund would realize either no gain or a loss on
the purchase of the call option.

     A Fund would normally purchase put options in anticipation of a decline in
the U.S. dollar value of currency in which securities in its portfolio are
quoted or denominated ("protective puts"). The purchase of a put option would
entitle a Fund, in exchange for the premium paid, to sell specified currency at
a specified price during the option period. The purchase of protective puts is
designed merely to offset or hedge against a decline in the dollar value of a
Fund's portfolio securities due to currency exchange rate fluctuations. A Fund
would ordinarily realize a gain if, during the option period, the value of the
underlying currency decreased below the exercise price sufficiently to more than
cover the premium and transaction costs; otherwise the Fund would realize either
no gain or a loss on the purchase of the put option. Gains and losses on the
purchase of protective put options would tend to be offset by countervailing
changes in the value of underlying currency or portfolio securities.

     In addition to using options for the hedging purposes described above, the
Funds may use options on currency to seek to increase total return. The Funds
may write (sell) covered put and call options on any currency in order to
realize greater income than would be realized on portfolio securities
transactions alone. However, in writing covered call options for additional
income, the Funds may forego the opportunity to profit from an increase in the
market value of the underlying currency. Also, when writing put options, the
Funds accept, in return for the option premium, the risk that they may be
required to purchase the underlying currency at a price in excess of the
currency's market value at the time of purchase.

                                     B-26


     Special Risks Associated With Options on Currency. An exchange traded
options position may be closed out only on an options exchange which provides a
secondary market for an option of the same series. Although a Fund will
generally purchase or write only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option, or at any particular time. For
some options no secondary market on an exchange may exist. In such event, it
might not be possible to effect closing transactions in particular options, with
the result that a Fund would have to exercise its options in order to realize
any profit and would incur transaction costs upon the sale of underlying
securities pursuant to the exercise of put options. If a Fund as a covered call
option writer is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying currency (or security quoted
or denominated in that currency) until the option expires or it delivers the
underlying currency upon exercise.

     There is no assurance that higher than anticipated trading activity or
other unforeseen events might not, at times, render certain of the facilities of
the Options Clearing Corporation inadequate, and thereby result in the
institution by an exchange of special procedures which may interfere with the
timely execution of customers' orders.

     A Fund may purchase and write over-the-counter options to the extent
consistent with its limitation on investments in illiquid securities. Trading in
over-the-counter options is subject to the risk that the other party will be
unable or unwilling to close out options purchased or written by a Fund.

     The amount of the premiums which a Fund may pay or receive may be adversely
affected as new or existing institutions, including other investment companies,
engage in or increase their option purchasing and writing activities.

Currency Swaps, Mortgage Swaps, Credit Swaps, Index Swaps and Interest Rate
---------------------------------------------------------------------------
Swaps, Caps, Floors and Collars
-------------------------------

     The Funds may enter into currency, mortgage, credit, index and interest
rate swaps and other interest rate swap arrangements such as rate caps, floors
and collars, for hedging purposes or to seek to increase total return. Currency
swaps involve the exchange by a Fund with another party of their respective
rights to make or receive payments in specified currencies. Interest rate swaps
involve the exchange by a Fund with another party of their respective
commitments to pay or receive interest, such as an exchange of fixed rate
payments for floating rate payments. Mortgage swaps are similar to interest rate
swaps in that they represent commitments to pay and receive interest. The
notional principal amount, however, is tied to a reference pool or pools of
mortgages. Index swaps involve the exchange by a Fund with another party of the
respective amounts payable with respect to a notional principal amount at
interest rates equal to two specified indices. Credit swaps involve the receipt
of floating or fixed rate payments in exchange for assuming potential credit
losses of an underlying security. Credit swaps give one party to a transaction
the right to dispose of or acquire an asset (or group of assets), or the right
to receive or make a payment for the other party, upon the occurrence of
specified credit events. The purchase of an interest rate cap

                                     B-27


entitles the purchaser, to the extent that a specified index exceeds a
predetermined interest rate, to receive payment of interest on a notional
principal amount from the party selling such interest rate cap. The purchase of
an interest rate floor entitles the purchaser, to the extent that a specified
index falls below a predetermined interest rate, to receive payments of interest
on a notional principal amount from the party selling the interest rate floor.
An interest rate collar is the combination of a cap and a floor that preserves a
certain return within a predetermined range of interest rates.

     A Fund will enter into interest rate, mortgage and index swaps only on a
net basis, which means that the two payment streams are netted out, with the
Fund receiving or paying, as the case may be, only the net amount of the two
payments. Interest rate, index and mortgage swaps do not involve the delivery of
securities, other underlying assets or principal. Accordingly, the risk of loss
with respect to interest rate, index and mortgage swaps is limited to the net
amount of interest payments that the Fund is contractually obligated to make. If
the other party to an interest rate, index or mortgage swap defaults, the Fund's
risk of loss consists of the net amount of interest payments that the Fund is
contractually entitled to receive. In contrast, currency swaps usually involve
the delivery of a gross payment stream in one designated currency in exchange
for the gross payment stream in another designated currency. Therefore, the
entire payment stream under a currency swap is subject to the risk that the
other party to the swap will default on its contractual delivery obligations. To
the extent that the Fund's potential exposure in a transaction involving a swap
or an interest rate floor, cap or collar is covered by the segregation of cash
or liquid assets or otherwise, the Funds and the Investment Advisers believe
that swaps do not constitute senior securities under the Act and, accordingly,
will not treat them as being subject to a Fund's borrowing restrictions.

     A Fund will not enter into transactions involving swaps, caps, floors or
collars unless the unsecured commercial paper, senior debt or claims paying
ability of the other party thereto is considered to be investment grade by the
Investment Adviser.

     The use of interest rate, mortgage, index, credit and currency swaps, as
well as interest rate caps, floors and collars, is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. If the Investment Adviser is
incorrect in its forecasts of market values, interest rates and currency
exchange rates, the investment performance of a Fund would be less favorable
than it would have been if this investment technique were not used. The
Investment Adviser, under the supervision of the Board of Trustees, is
responsible for determining and monitoring the liquidity of the Funds'
transactions in swaps, caps, floors and collars.

Convertible Securities
----------------------

     Each Fund may invest in convertible securities.  Convertible securities
include corporate notes or preferred stock but are ordinarily long-term debt
obligation of the issuer convertible at a stated exchange rate into common stock
of the issuer.  As with all debt securities, the market value of convertible
securities tends to decline as interest rates increase and, conversely, to
increase as interest rates decline.  Convertible securities generally offer
lower interest or dividend yields than non-convertible securities of similar
quality.  However, when the market price of the common stock

                                     B-28


underlying a convertible security exceeds the conversion price, the price of the
convertible security tends to reflect the value of the underlying common stock.
As the market price of the underlying common stock declines, the convertible
security tends to trade increasingly on a yield basis, and thus may not
depreciate to the same extent as the underlying common stock. Convertible
securities rank senior to common stocks in an issuer's capital structure and
consequently entail less risk than the issuer's common stock. In evaluating a
convertible security, the Investment Adviser will give primary emphasis to the
attractiveness of the underlying common stock. Convertible debt securities are
equity investments for purposes of each Fund's investment policies.

Preferred Securities
--------------------

     Each Fund may invest in preferred securities. Unlike debt securities, the
obligations of an issuer of preferred stock, including dividend and other
payment obligations, may not typically be accelerated by the holders of
preferred stock on the occurrence of an event of default (such as a covenant
default or filing of a bankruptcy petition) or other non-compliance by the
issuer with the terms of the preferred stock. Often, however, on the occurrence
of any such event of default or non-compliance by the issuer, preferred
stockholders will be entitled to gain representation on the issuer's board of
directors or increase their existing board representation. In addition,
preferred stockholders may be granted voting rights with respect to certain
issues on the occurrence of any event of default.

Equity Swaps
------------

     Each Fund may enter into equity swap contracts to invest in a market
without owning or taking physical custody of securities in circumstances in
which direct investment is restricted for legal reasons or is otherwise
impracticable. Equity swaps may also be used for hedging purposes or to seek to
increase total return. The counterparty to an equity swap contract will
typically be a bank, investment banking firm or broker/dealer. Equity swap
contracts may be structured in different ways. For example, a counterparty may
agree to pay the Fund the amount, if any, by which the notional amount of the
equity swap contract would have increased in value had it been invested in the
particular stocks (or an index of stocks), plus the dividends that would have
been received on those stocks. In these cases, the Fund may agree to pay to the
counterparty a floating rate of interest on the notional amount of the equity
swap contract plus the amount, if any, by which that notional amount would have
decreased in value had it been invested in such stocks. Therefore, the return to
the Fund on the equity swap contract should be the gain or loss on the notional
amount plus dividends on the stocks less the interest paid by the Fund on the
notional amount. In other cases, the counterparty and the Fund may each agree to
pay the other the difference between the relative investment performances that
would have been achieved if the notional amount of the equity swap contract had
been invested in different stocks (or indices of stocks).

     A Fund will enter into equity swaps only on a net basis, which means that
the two payment streams are netted out, with the Fund receiving or paying, as
the case may be, only the net amount of the two payments. Payments may be made
at the conclusion of an equity swap contract or periodically during its term.
Equity swaps do not involve the delivery of securities or other underlying
assets. Accordingly, the risk of loss with respect to equity swaps is limited to
the net

                                     B-29


amount of payments that a Fund is contractually obligated to make. If the other
party to an equity swap defaults, a Fund's risk of loss consists of the net
amount of payments that such Fund is contractually entitled to receive, if any.
Inasmuch as these transactions are entered into for hedging purposes or are
offset by segregated cash or liquid assets to cover the Funds' potential
exposure, the Funds and their Investment Adviser believe that transactions do
not constitute senior securities under the Act and, accordingly, will not treat
them as being subject to a Fund's borrowing restrictions.

     A Fund will not enter into swap transactions unless the unsecured
commercial paper, senior debt or claims paying ability of the other party
thereto is considered to be investment grade by the Investment Adviser.

Lending of Portfolio Securities
-------------------------------

     Each Fund may lend portfolio securities. Under present regulatory policies,
such loans may be made to institutions, such as brokers or dealers and would be
required to be secured continuously by collateral in cash, cash equivalents,
letters of credit or U.S. Government securities maintained on a current basis at
an amount at least equal to the market value of the securities loaned. A Fund
would be required to have the right to call a loan and obtain the securities
loaned at any time on five days' notice. For the duration of a loan, a Fund
would continue to receive the equivalent of the interest or dividends paid by
the issuer on the securities loaned and would also receive compensation from
investment of the collateral. A Fund would not have the right to vote any
securities having voting rights during the existence of the loan, but a Fund
would call the loan in anticipation of an important vote to be taken among
holders of the securities or the giving or withholding of their consent on a
material matter affecting the investment. As with other extensions of credit
there are risks of delay in recovering, or even loss of rights in, the
collateral should the borrower of the securities fail financially. However, the
loans would be made only to firms deemed by the Investment Adviser to be of good
standing, and when, in the judgment of the Investment Adviser, the consideration
which can be earned currently from securities loans of this type justifies the
attendant risk. If the Investment Adviser determines to make securities loans,
it is intended that the value of the securities loaned would not exceed one-
third of the value of the total assets of a Fund (including the loan
collateral).

     Cash received as collateral for securities lending transactions may be
invested in other investment eligible securities. Investing the collateral
subjects it to market depreciation or appreciation, and a Fund is responsible
for any loss that may result from its investment of the borrowed collateral.

When-Issued Securities and Forward Commitments
----------------------------------------------

     Each Fund may purchase securities on a when-issued basis or purchase or
sell securities on a forward commitment basis.  These transactions involve a
commitment by a Fund to purchase or sell securities at a future date.  The price
of the underlying securities (usually expressed in terms of yield) and the date
when the securities will be delivered and paid for (the settlement date) are
fixed at the time the transaction is negotiated.  When-issued purchases and
forward commitment

                                     B-30


transactions are negotiated directly with the other party, and such commitments
are not traded on exchanges. A Fund will generally purchase securities on a
when-issued basis or purchase or sell securities on a forward commitment basis
only with the intention of completing the transaction and actually purchasing or
selling the securities. If deemed advisable as a matter of investment strategy,
however, a Fund may dispose of or negotiate a commitment after entering into it.
A Fund may realize a capital gain or loss in connection with these transactions.
For purposes of determining a Fund's duration, the maturity of when-issued or
forward commitment securities will be calculated from the commitment date. A
Fund is generally required to segregate until three days prior to the settlement
date, cash and liquid assets in an amount sufficient to meet the purchase price
unless the Fund's obligations are otherwise covered. Securities purchased or
sold on a when-issued or forward commitment basis involve a risk of loss if the
value of the security to be purchased declines prior to the settlement date or
if the value of the security to be sold increases prior to the settlement date.

Investment in Unseasoned Companies
----------------------------------

     Each Fund may invest in companies (including predecessors) which have
operated less than three years. The securities of such companies may have
limited liquidity, which can result in their being priced higher or lower than
might otherwise be the case. In addition, investments in unseasoned companies
are more speculative and entail greater risk than do investments in companies
with an established operating record.

Other Investment Companies
--------------------------

     A Fund reserves the right to invest up to 10% of its total assets in the
securities of all investment companies (including exchange-traded funds such as
SPDRs and iShares(SM), as defined below) but may not acquire more than 3% of the
voting securities of any other investment company. Pursuant to an exemptive
order obtained from the SEC, the Funds may invest in money market funds for
which an Investment Adviser or any of its affiliates serves as investment
adviser. A Fund will indirectly bear its proportionate share of any management
fees and other expenses paid by investment companies in which it invests in
addition to the advisory and administration fees (and other expenses) paid by
the Fund. However, to the extent that the Fund invests in a money market fund
for which the Investment Adviser or any of its affiliates acts as investment
adviser, the advisory and administration fees payable by the Fund to the
Investment Adviser will be reduced by an amount equal to the Fund's
proportionate share of the advisory and administration fees paid by such money
market fund to its investment adviser.

     SPDRs are interests in a unit investment trust ("UIT") that may be obtained
from the UIT or purchased in the secondary market (SPDRs are listed on the
American Stock Exchange). There is a 5% limit based on total assets on
investments by any one Fund in SPDRs. The UIT will issue SPDRs in aggregations
known as "Creation Units" in exchange for a "Portfolio Deposit" consisting of
(i) a portfolio of securities substantially similar to the component securities
("Index Securities") of the Standard & Poor's 500 Composite Stock Price Index
(the "S&P Index"), (ii) a cash payment equal to a pro rata portion of the
dividends accrued on the UIT's portfolio securities since the last dividend
payment by the UIT, net of expenses and liabilities, and (iii) a cash payment or
credit

                                     B-31


("Balancing Amount") designed to equalize the net asset value of the S&P Index
and the net asset value of a Portfolio Deposit.

     SPDRs are not individually redeemable, except upon termination of the UIT.
To redeem, the Portfolio must accumulate enough SPDRs to reconstitute a Creation
Unit. The liquidity of small holdings of SPDRs, therefore, will depend upon the
existence of a secondary market. Upon redemption of a Creation Unit, the
Portfolio will receive Index Securities and cash identical to the Portfolio
Deposit required of an investor wishing to purchase a Creation Unit that day.

     The price of SPDRs is derived from and based upon the securities held by
the UIT. Accordingly, the level of risk involved in the purchase or sale of a
SPDR is similar to the risk involved in the purchase or sale of traditional
common stock, with the exception that the pricing mechanism for SPDRs is based
on a basket of stocks. Disruptions in the markets for the securities underlying
SPDRs purchased or sold by the Funds could result in losses on SPDRs.

     Each Fund may also purchase shares of investment companies investing
primarily in foreign securities, including "country funds." Country funds have
portfolios consisting primarily of securities of issuers located in one foreign
country or region. Each Fund may, subject to the limitations stated above,
invest in iShares(SM) (formerly called World Equity Benchmark Shares or "WEBS")
and similar securities that invest in securities included in foreign securities
indices. iShares(SM) are shares of an investment company that invests
substantially all of its assets in securities included in the MSCI indices for
specified countries. iShares(SM) are listed on the AMEX and were initially
offered to the public in 1996. The market prices of iShares(SM) are expected to
fluctuate in accordance with both changes in the NAVs of their underlying
indices and supply and demand of iShares(SM) on the AMEX. To date, iShares(SM)
have traded at relatively modest discounts and premiums to the NAVs. However,
iShares(SM) have a limited operating history and information is lacking
regarding the actual performance and trading liquidity of iShares(SM) for
extended periods or over complete market cycles. In addition, there is no
assurance that the requirements of the AMEX necessary to maintain the listing of
iShares(SM) will continue to be met or will remain unchanged. In the event
substantial market or other disruptions affecting iShares(SM) should occur in
the future, the liquidity and value of a Fund's shares could also be
substantially and adversely affected. If such disruptions were to occur, a Fund
could be required to reconsider the use of iShares(SM) as part of its investment
strategy.

Repurchase Agreements
---------------------

     Each Fund may enter into repurchase agreements with dealers in U.S.
Government securities and member banks of the Federal Reserve System which
furnish collateral at least equal in value or market price to the amount of
their repurchase obligation. The Funds may also enter into repurchase agreements
involving certain foreign government securities. A repurchase agreement is an
arrangement under which a Fund purchases securities and the seller agrees to
repurchase the securities within a particular time and at a specified price.
Custody of the securities is maintained by a Fund's custodian (or subcustodian).
The repurchase price may be higher than the purchase price, the difference being
income to a Fund, or the purchase and repurchase prices may be the same, with
interest at a stated rate due to a Fund together with the repurchase price on

                                     B-32


repurchase. In either case, the income to a Fund is unrelated to the interest
rate on the security subject to the repurchase agreement.

     For purposes of the Act and generally for tax purposes, a repurchase
agreement is deemed to be a loan from a Fund to the seller of the security. For
other purposes, it is not always clear whether a court would consider the
security purchased by a Fund subject to a repurchase agreement as being owned by
a Fund or as being collateral for a loan by a Fund to the seller. In the event
of commencement of bankruptcy or insolvency proceedings with respect to the
seller of the security before repurchase of the security under a repurchase
agreement, a Fund may encounter delay and incur costs before being able to sell
the security. Such a delay may involve loss of interest or a decline in price of
the security. If the court characterizes the transaction as a loan and a Fund
has not perfected a security interest in the security, a Fund may be required to
return the security to the seller's estate and be treated as an unsecured
creditor of the seller. As an unsecured creditor, a Fund would be at risk of
losing some or all of the principal and interest involved in the transaction.

     The Investment Adviser seeks to minimize the risk of loss from repurchase
agreements by analyzing the creditworthiness of the obligor, in this case the
seller of the security. Apart from the risk of bankruptcy or insolvency
proceedings, there is also the risk that the seller may fail to repurchase the
security. However, if the market value of the security subject to the repurchase
agreement becomes less than the repurchase price (including accrued interest), a
Fund will direct the seller of the security to deliver additional securities so
that the market value of all securities subject to the repurchase agreement
equals or exceeds the repurchase price. Certain repurchase agreements which
provide for settlement in more than seven days can be liquidated before the
nominal fixed term on seven days or less notice. Such repurchase agreements will
be regarded as liquid instruments.

     In addition, a Fund, together with other registered investment companies
having advisory agreements with the Investment Adviser or its affiliates, may
transfer uninvested cash balances into a single joint account, the daily
aggregate balance of which will be invested in one or more repurchase
agreements.

Reverse Repurchase Agreements
-----------------------------

     A Fund may borrow money by entering into transactions called reverse
repurchase agreements. Under these arrangements, the Fund will sell portfolio
securities to dealers in U.S. Government Securities or members of the Federal
Reserve System, with an agreement to repurchase the security on an agreed date,
price and interest payment. Reverse repurchase agreements involve the possible
risk that the value of portfolio securities the Fund relinquishes may decline
below the price the Fund must pay when the transaction closes. Borrowings may
magnify the potential for gain or loss on amounts invested resulting in an
increase in the speculative character of the Fund's outstanding shares.

     When a Fund enters into a reverse repurchase agreement, it places in a
separate custodial account either liquid assets or other high grade debt
securities that have a value equal to or greater than the repurchase price. The
account is then continuously monitored to make sure that an

                                     B-33


appropriate value is maintained. Reverse repurchase agreements are considered to
be borrowings under the Act.

Portfolio Turnover
------------------

     Each Fund may engage in active short-term trading to benefit from yield
disparities among different issues of securities or among the markets for equity
securities, or for other reasons. It is anticipated that the portfolio turnover
rate of each Fund will vary from year to year.


                            INVESTMENT RESTRICTIONS

     The following investment restrictions have been adopted by the Trust as
fundamental policies that cannot be changed without the affirmative vote of the
holders of a majority (as defined in the Act) of the outstanding voting
securities of the Fund. The investment objective of the Fund and all other
investment policies or practices are considered by the Trust not to be
fundamental and accordingly may be changed without shareholder approval. See
"Investment Objective and Policies" in the Prospectuses. For purposes of the
Act, "majority" means the lesser of (a) 67% or more of the shares of the Trust
or a Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Trust or a Fund are present or represented by proxy;
or (b) more than 50% of the shares of the Trust or a Fund. For purposes of the
following limitations, any limitation which involves a maximum percentage shall
not be considered violated unless an excess over the percentage occurs
immediately after, and is caused by, an acquisition or encumbrance of securities
or assets of, or borrowings by, a Fund. With respect to the Funds' fundamental
investment restriction no. 3, asset coverage of at least 300% (as defined in the
Act), inclusive of any amounts borrowed, must be maintained at all times.

     A Fund may not:

           (1)   Make any investment inconsistent with the Fund's classification
                 as a diversified company under the Act.

           (2)   Invest 25% or more of its total assets in the securities of one
                 or more issuers conducting their principal business activities
                 in the same industry (excluding the U.S. Government or any of
                 its agencies or instrumentalities), except that: (a) the
                 Goldman Sachs Global Consumer Growth Fund, which will invest at
                 least 25% or more of its total assets in companies in consumer
                 products and services industries, (b) the Goldman Sachs Global
                 Financial Services Fund, which will invest at least 25% or more
                 of its total assets in companies in financial services
                 industries, (c) the Goldman Sachs Global Health Sciences Fund,
                 which will invest at least 25% or more of its total assets in
                 companies in health sciences industries, (d) the Goldman Sachs
                 Global Infrastructure and Resources Fund, which will invest at
                 least 25% or more of its total assets in companies in
                 infrastructure and resources industries, and (e) the Goldman
                 Sachs Global

                                     B-34


                 Technology Fund, which will invest at least 25% or more of its
                 total assets in companies in technology industries).

           (3)   Borrow money, except (a) to the extent permitted by applicable
                 law, the Fund may borrow from banks (as defined in the Act),
                 other affiliated investment companies and other persons or
                 through reverse repurchase agreements in amounts up to 33 1/3%
                 of its total assets (including the amount borrowed), (b) the
                 Fund may, to the extent permitted by applicable law, borrow up
                 to an additional 5% of its total assets for temporary purposes,
                 (c) the Fund may obtain such short-term credits as may be
                 necessary for the clearance of purchases and sales of portfolio
                 securities, (d) the Fund may purchase securities on margin to
                 the extent permitted by applicable law, and (e) the Fund may
                 engage in transactions in mortgage dollar rolls which are
                 accounted for as financings.

           (4)   Make loans, except through (a) the purchase of debt obligations
                 in accordance with the Fund's investment objective and
                 policies, (b) repurchase agreements with banks, brokers,
                 dealers and other financial institutions, (c) loans of
                 securities as permitted by applicable law, and (d) loans to
                 affiliates of the Fund to the extent permitted by law.

           (5)   Underwrite securities issued by others, except to the extent
                 that the sale of portfolio securities by the Fund may be deemed
                 to be an underwriting.

           (6)   Purchase, hold or deal in real estate, although the Fund may
                 purchase and sell securities that are secured by real estate or
                 interests therein, securities of REITs and mortgage-related
                 securities and may hold and sell real estate acquired by the
                 Fund as a result of the ownership of securities.

           (7)   Invest in commodities or commodity contracts, except that the
                 Fund may invest in currency and financial instruments and
                 contracts that are commodities or commodity contracts.

           (8)   Issue senior securities to the extent such issuance would
                 violate applicable law.

     Each Fund may, notwithstanding any other fundamental investment restriction
or policy, invest some or all of its assets in a single open-end investment
company or series thereof with substantially the same investment objective,
restrictions and policies as the Fund.

     In addition to the fundamental policies mentioned above, the Trustees have
adopted the following non-fundamental policies which can be changed or amended
by action of the Trustees without approval of shareholders.

     A Fund may not:

                                     B-35


           (a)  Invest in companies for the purpose of exercising control or
                manage
           (b)  Invest more than 15% of its net assets in illiquid investments
                including repurchase agreements with a notice or demand period
                of more than seven days, securities which are not readily
                marketable and restricted securities not eligible for resale
                pursuant to Rule 144A under the Securities Act of 1933 (the
                "1933 Act").
           (c)  Purchase additional securities if its borrowings (excluding
                covered mortgage dollar rolls) exceed 5% of its net assets.
           (d)  Make short sales of securities, except short sales against the
                box.


                                     B-36


                                  MANAGEMENT

     The Trustees are responsible for deciding matters of general policy and
reviewing the actions of the Investment Adviser, distributor and transfer agent.
The officers of the Trust conduct and supervise the Fund's daily business
operations.

     Information pertaining to the Trustees and officers of the Trust is set
forth below.  Trustees and officers deemed to be "interested persons" of the
Trust for purposes of the Act are indicated by an asterisk.


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

Ashok N. Bakhru, 58            Chairman        Chairman of the Board and Trustee -
P.O. Box 143                   & Trustee       Goldman Sachs Variable Insurance Trust
Lima, PA  19037                                (registered investment company) (since
                                               October 1997); President, ABN
                                               Associates (July 1994-March 1996 and
                                               November 1998 to present); Executive
                                               Vice President - Finance and
                                               Administration and Chief Financial
                                               Officer, Coty Inc. (manufacturer of
                                               fragrances and cosmetics) (April
                                               1996-November 1998); Senior Vice
                                               President of Scott Paper Company (until
                                               June 1994); Director of Arkwright Mutual
                                               Insurance Company (1984-1999);
                                               Trustee of International House of
                                               Philadelphia (1989-Present); Member of
                                               Cornell University Council
                                               (1992-Present); Trustee of the Walnut
                                               Street Theater (1992-Present); Director,
                                               Private Equity Investors-III (since
                                               November 1998); and Trustee, Citizens
                                               Scholarship Foundation of America
                                               (since 1998).

*David B. Ford, 55             Trustee         Trustee - Goldman Sachs Variable
32 Old Slip                                    Insurance Trust (registered investment
New York, NY  10005                            company) (since October 1997); Director,
                                               Commodities Corp. LLC (futures and
                                               commodities traders) (since April 1997);
                                               Managing Director, J. Aron

                                      B-37


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

                                               & Company (commodity dealer and
                                               risk management adviser) (since
                                               November 1996); Managing Director,
                                               Goldman Sachs & Co. Investment
                                               Banking Division (since November 1996);
                                               Chief Executive Officer and Director,
                                               CIN Management (investment adviser)
                                               (since August 1996); Chief Executive
                                               Officer & Managing Director and
                                               Director, Goldman Sachs Asset
                                               Management International (since
                                               November 1995 and December 1994,
                                               respectively); Co-Head, Goldman Sachs
                                               Asset Management (since November
                                               1995); Co-Head and Director, Goldman
                                               Sachs Funds Management, L.P. (since
                                               November 1995 and December 1994,
                                               respectively); and Chairman and Director,
                                               Goldman Sachs Asset Management Japan
                                               Limited (since November 1994).

*Douglas C. Grip, 38           Trustee         Trustee and President - Goldman Sachs
32 Old Slip                    & President     Variable Insurance Trust (registered
New York, NY  10005                            investment company) (since October
                                               1997); Trustee, Trust for Credit Unions
                                               (registered investment company) (since
                                               March 1998); Partner, Goldman Sachs
                                               (since October 2000); Managing Director,
                                               Goldman Sachs Asset Management
                                               Group (since November 1997); President,
                                               Goldman Sachs Funds Group (since April
                                               1996); and President, MFS Retirement
                                               Services Inc., of Massachusetts Financial
                                               Services (prior thereto).


                                      B-38


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

Patrick T. Harker, 42          Trustee         Trustee - Goldman Sachs Variable
Office of the Dean                             Insurance Trust (registered investment
The Wharton School                             company) (since August 2000); Dean and
University of Pennsylvania                     Reliance Professor of Operations and
1000 SH-DH                                     Information Management, The Wharton
Philadelphia, PA 19104-6364                    School, University of Pennsylvania (since
                                               February 2000); Interim and Deputy
                                               Dean, The Wharton School, University of
                                               Pennsylvania (since July 1999); Professor
                                               and Chairman of Department of
                                               Operations and Information Management,
                                               The Wharton School, University of
                                               Pennsylvania (July 1997-August 2000);
                                               UPS Transportation Professor for the
                                               Private Sector, Professor of Systems
                                               Engineering and Chairman of Systems
                                               Engineering, School of Engineering and
                                               Applied Science, University of
                                               Pennsylvania  (prior thereto).

                                      B-39


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

*John P. McNulty, 48           Trustee         Trustee - Goldman Sachs Variable
32 Old Slip                                    Insurance Trust (registered investment
New York, NY  10005                            company) (since October 1997);
                                               Managing Director, Goldman Sachs
                                               (since November 1996) and Head of
                                               Investment Management Division (since
                                               September 1999); General Partner, J.
                                               Aron & Company (commodity dealer and
                                               risk management adviser) (since
                                               November 1995); Director and Co-Head,
                                               Goldman Sachs Funds Management, L.P.
                                               (since November 1995); Director,
                                               Goldman Sachs Asset Management
                                               International (since January 1996); Co-
                                               Head, GSAM (November
                                               1995-September 1999); Director, Global
                                               Capital Reinsurance (insurance) (since
                                               1989); Director, Commodities Corp. LLC
                                               (since April 1997); and Limited Partner
                                               of Goldman Sachs (1994-November
                                               1995).


                                      B-40


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

Mary P. McPherson, 65          Trustee         Trustee - Goldman Sachs Variable
The Andrew W. Mellon                           Insurance Trust (registered investment
 Foundation                                    company) (since October 1997); Vice
140 East 62/nd/ Street                         President, The Andrew W. Mellon
New York, NY  10021                            Foundation (provider of grants for
                                               conservation, environmental and
                                               educational purposes) (since October
                                               1997); President of Bryn Mawr College
                                               (1978-1997); Director, Smith College
                                               (since 1998); Director, Josiah Macy, Jr.
                                               Foundation (health educational programs)
                                               (since 1977); Director, Philadelphia
                                               Contributionship (insurance) (since
                                               1985); Director Emeritus, Amherst
                                               College (1986-1998); Director, Dayton
                                               Hudson Corporation (general retailing
                                               merchandising) (1988-1997); Director,
                                               The Spencer Foundation (educational
                                               research) (since 1993); member of PNC
                                               Advisory Board (banking) (since 1993);
                                               and Director, American School of
                                               Classical Studies in Athens (since 1997).

*Alan A. Shuch, 51             Trustee         Trustee - Goldman Sachs Variable
32 Old Slip                                    Insurance Trust (registered investment
New York, NY  10005                            company) (since October 1997); Advisory
                                               Director - GSAM (since May 1999);
                                               Limited Partner, Goldman Sachs (prior to
                                               May 1999); Consultant to GSAM (since
                                               December 1994).


                                      B-41


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

William H. Springer, 71        Trustee         Trustee - Goldman Sachs Variable
701 Morningside Drive                          Insurance Trust (registered investment
Lake Forest, IL  60045                         company) (since October 1997); Director,
                                               The Walgreen Co. (a retail drug store
                                               business) (April 1988-January 2000);
                                               Director of Baker, Fentress & Co. (a
                                               closed-end, non-diversified management
                                               investment company) (April
                                               1992-present); and Chairman and
                                               Trustee, Northern Institutional Funds
                                               (since April 1984) and Northern Funds
                                               (since March 2000).

Richard P. Strubel, 61         Trustee         Trustee - Goldman Sachs Variable
500 Lake Cook Road                             Insurance Trust (registered investment
Suite 150                                      company) (since October 1997); President
Deerfield, IL 60015                            and COO, UNext.com (since 1999)
                                               (provider of educational services via the
                                               internet); Director, Gildan Activewear
                                               Inc. (since February 1999); Director of
                                               Kaynar Technologies Inc. (since March
                                               1997); Managing Director, Tandem
                                               Partners, Inc. (1990-1999); President and
                                               Chief Executive Officer, Microdot, Inc. (a
                                               diversified manufacturer of fastening
                                               systems and connectors) (January
                                               1984-October 1994); Trustee, Northern
                                               Institutional Funds (since December
                                               1982) and Northern Funds (since March
                                               2000); Director of Cantilever
                                               Technologies, Inc. (since 1999).



                                      B-42


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

*John M. Perlowski, 36         Treasurer       Treasurer - Goldman Sachs Variable
32 Old Slip                                    Insurance Trust (registered investment
New York, NY  10005                            company) (since 1997); Vice President,
                                               Goldman Sachs (since July 1995); and
                                               Banking Director, Investors Bank and
                                               Trust (November 1993-July 1995).

*James A. Fitzpatrick, 40      Vice President  Vice President - Goldman Sachs Variable
4900 Sears Tower                               Insurance Trust (registered investment
Chicago, IL  60606                             company) (since October 1997);
                                               Managing Director, Goldman Sachs
                                               (since October 1999); Vice President of
                                               GSAM (April 1997-December 1999);
                                               and Vice President and General Manager,
                                               First Data Corporation - Investor Services
                                               Group (1994 to 1997).

*Jesse Cole, 37                Vice President  Vice President - Goldman Sachs Variable
4900 Sears Tower                               Insurance Trust (registered investment
Chicago, IL  60606                             company) (since 1998); Vice President,
                                               GSAM (since June 1998); Vice President,
                                               AIM Management Group, Inc.
                                               (investment advisor) (April 1996-June
                                               1998); and Assistant Vice President, The
                                               Northern Trust Company (June
                                               1987-April 1996).

*Kerry K. Daniels, 37          Vice President  Vice President--Goldman Sachs Variable
4900 Sears Tower                               Insurance Trust (registered investment
Chicago, IL  60606                             company) (since April 2000); and
                                               Manager, Institutional Account
                                               Administration - Shareholder Services,
                                               Goldman Sachs (since 1986).

                                      B-43


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

*Mary F. Hoppa, 36             Vice President  Vice President--Goldman Sachs Variable
4900 Sears Tower                               Insurance Trust (registered investment
Chicago, IL  60606                             company) (since April 2000); Vice
                                               President, Goldman Sachs (since October
                                               1999); and Senior Vice President and
                                               Director of Mutual Fund Operations,
                                               Strong Capital Management (January
                                               1987-September 1999).

*Philip V. Giuca, Jr., 38      Assistant       Assistant Treasurer - Goldman Sachs
32 Old Slip                    Treasurer       Variable Insurance Trust (registered
New York, NY  10005                            investment company) (since 1997); and
                                               Vice President, Goldman Sachs (May
                                               1992-Present).

*Michael J. Richman, 40        Secretary       Secretary - Goldman Sachs Variable
1 Liberty Plaza                                Insurance Trust (registered investment
New York, NY  10004                            company) (since 1997); Managing
                                               Director, GSAM (since 2000) and
                                               General Counsel of the Funds Group of
                                               GSAM (since December 1997); Associate
                                               General Counsel of GSAM (February
                                               1994-December 1997); Counsel to the
                                               Funds Group, GSAM (June 1992 to
                                               December 1997); Associate General
                                               Counsel, Goldman Sachs (since
                                               December 1998); Vice President of
                                               Goldman Sachs (since June 1992); and
                                               Assistant General Counsel of Goldman
                                               Sachs (June 1992 to December 1998).

*Howard B. Surloff, 35         Assistant       Assistant Secretary - Goldman Sachs
32 Old Slip                    Secretary       Variable Insurance Trust (registered
New York, NY  10005                            investment company) (since 1997);
                                               Assistant General Counsel, GSAM and
                                               General Counsel to the U.S. Funds Group
                                               (since December 1997); Assistant General
                                               Counsel and Vice President, Goldman
                                               Sachs (since November 1993 and May
                                               1994, respectively); Counsel to the Funds
                                               Group, GSAM (November

                                      B-44


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

                                               1993-December 1997).

*Valerie A. Zondorak, 35       Assistant       Assistant Secretary - Goldman Sachs
32 Old Slip                    Secretary       Variable Insurance Trust (registered
New York, NY  10005                            investment company) (since 1997);
                                               Assistant General Counsel, GSAM and
                                               Assistant General Counsel to the Funds
                                               Group (since December 1997); Vice
                                               President and Assistant General Counsel,
                                               Goldman Sachs (since March 1997);
                                               Counsel to the Funds Group, GSAM
                                               (March 1997-December 1997); and
                                               Associate of Shereff, Friedman, Hoffman
                                               & Goodman (September 1990 to
                                               February 1997).

*Deborah A. Farrell, 29        Assistant       Assistant Secretary - Goldman Sachs
32 Old Slip                    Secretary       Variable Insurance Trust (registered
New York, NY  10005                            investment company) (since 1997); Legal
                                               Products Analyst, Goldman Sachs (since
                                               December 1998); Legal Assistant,
                                               Goldman Sachs (January 1996-December
                                               1998); Assistant Secretary to the Funds
                                               Group (1996 to present); Executive
                                               Secretary, Goldman Sachs (January
                                               1994-January 1996).

*Kaysie P. Uniacke, 39         Assistant       Assistant Secretary - Goldman Sachs
32 Old Slip                    Secretary       Variable Insurance Trust (registered
New York, NY  10005                            investment company) (since 1997);
                                               Managing Director, GSAM (since 1997);
                                               and Vice President and Senior Fund
                                               Manager, GSAM (1988 to 1997).

                                      B-45


Name, Age                        Positions     Principal Occupation(s)
and Address                      with Trust      During Past 5 Years
-----------                      ----------    -----------------------

*Elizabeth D. Anderson, 31     Assistant       Assistant Secretary - Goldman Sachs
32 Old Slip                    Secretary       Variable Insurance Trust (registered
New York, NY  10005                            investment company) (since 1997); Fund
                                               Manager, GSAM (since April 1996);
                                               Junior Fund Manager, GSAM
                                               (1995-April 1996); Funds Trading
                                               Assistant, GSAM (1993-1995).

*Amy E. Belanger, 31           Assistant       Assistant Secretary - Goldman Sachs
32 Old Slip                    Secretary       Variable Insurance Trust (registered
New York, NY  10005                            investment company) (since 1999); Vice
                                               President, Goldman Sachs (since June
                                               1999); Counsel, Goldman Sachs (since
                                               1998); Associate, Dechert Price &
                                               Rhoads (September 1996-1998).

*Peter Fortner, 42             Assistant       Assistant Treasurer - Goldman Sachs
32 Old Slip                    Treasurer       Variable Insurance Trust (registered
New York, NY 10005                             investment company) (since August
                                               2000).


Each interested Trustee and officer holds comparable positions with certain
other companies of which Goldman Sachs, GSAM or an affiliate thereof is the
investment adviser, administrator and/or distributor.  As of ___________, 2001
the Trustees and Officers of the Trust as a group owned less than 1% of the
outstanding shares of beneficial interest of each Fund.

     The Trust pays each Trustee, other than those who are "interested persons"
of Goldman Sachs, a fee for each Trustee meeting attended and an annual fee.
Such Trustees are also reimbursed for travel expenses incurred in connection
with attending such meetings.

                                      B-46

The following table sets forth certain information with respect to the
compensation of each Trustee of the Trust for the calendar year ended October
31, 2000 with respect to each of the Trust's funds then in existence:

Pension or Retirement Benefits
Aggregate Accrued as Part of Fund's Total Compensation from
Compensation ------------------------- Goldman Sachs Fund complex
Name of Trustee from the Trust/2/ Expenses (including the Trust)/3/
--------------- ----------------- -------- ------------------------

Ashok N. Bakhru/1/ $______ $ - $______
David B. Ford 0 - 0
Douglas C. Grip 0 - 0
Patrick T. Harker/4/ 0 - 0
John P. McNulty 0 - 0
Mary P. McPherson ______ - ______
Alan A. Shuch 0 - 0
Jackson W. Smart/5/ ______ - ______
William H. Springer ______ - ______
Richard P. Strubel ______ - ______

/1/Includes compensation as Chairman of the Board of Trustees.
/2/Reflects amount paid by the Trust's funds during the period from January 1,
2000 to December 31, 2000. During this period, the Fund had not offered
shares.
/3/The Goldman Sachs Fund complex consists of the Goldman Sachs Trust and
Goldman Sachs Variable Insurance Trust. Goldman Sachs Trust consisted of 54
mutual funds, including 23 equity funds, as of December 31, 2000. Goldman
Sachs Variable Insurance Trust consisted of 11 mutual funds as of December
31, 2000.
/4/Mr. Harker was elected to the Board of Trustees on August 29, 2000.
/5/No longer a trustee of the Trust.

B-47


Class A Shares of the Funds may be sold at net asset value without payment of
any sales charge to Goldman Sachs, its affiliates or their respective officers,
partners, directors or employees (including rehired employees and former
partners), any partnership of which Goldman Sachs is a general partner, any
trustee or officer of the Trust and designated family members of any of the
above individuals.  The sales load waivers are due to the nature of the
investors and the reduced sales effort that is needed to obtain such
investments.

The Trust, its Investment Advisers and principal underwriter have adopted codes
of ethics under Rule 17j-1 of the 1940 Act that permit personnel subject to
their particular code of ethics to invest in securities, including securities
that may be purchased or held by the Fund.


Management Services
-------------------

     GSAM, 32 Old Slip, New York, New York, and GSAMI, 133 Petersborough Court,
London, England EC4A 2BB, are separate business units of the Investment
Management Division of Goldman Sachs, and together serve as Investment Adviser
to each Fund. See "Service Providers" in the Funds' Prospectus for a description
of the Investment Adviser's duties to the Funds.

     The Goldman Sachs Group, L.P. which controlled the Funds' Investment
Advisers, merged into The Goldman Sachs Group, Inc. as a result of an initial
public offering in 1999.

     Founded in 1869, Goldman Sachs is among the oldest and largest investment
banking firms in the United States.  Goldman Sachs is a leader in developing
portfolio strategies and in many fields of investing and financing,
participating in financial markets worldwide and serving individuals,
institutions, corporations and governments.  Goldman Sachs is also among the
principal market sources for current and thorough information on companies,
industrial sectors, markets, economies and currencies, and trades and makes
markets in a wide range of equity and debt securities 24-hours a day.  The firm
is headquartered in New York and has offices throughout the United States and in
Beijing, Frankfurt, George Town, Hong Kong, London, Madrid, Mexico City, Milan,
Montreal, Paris, Sao Paulo, Seoul, Shanghai, Singapore, Sydney, Taipei, Tokyo,
Toronto, Vancouver and Zurich.  It has trading professionals throughout the
United States, as well as in London, Tokyo, Hong Kong and Singapore.  The active
participation of Goldman Sachs in the world's financial markets enhances its
ability to identify attractive investments.  Goldman Sachs has agreed to permit
the Funds to use the name "Goldman Sachs" or a derivative thereof as part of
each Fund's name for as long as a Fund's Management Agreement is in effect.

     The Investment Advisers are able to draw on the substantial research and
market expertise of Goldman Sachs, whose investment research effort is one of
the largest in the industry.  The Goldman Sachs Global Investment Research
Department covers approximately 2,200 companies, including approximately 1,000
U.S. corporations in 60 industries.  The in-

                                      B-48


depth information and analyses generated by Goldman Sachs' research analysts are
available to the Investment Advisers.

     For more than a decade, Goldman Sachs has been among the top-ranked firms
in Institutional Investor's annual "All-America Research Team" survey.  In
addition, many of Goldman Sachs' economists, securities analysts, portfolio
strategists and credit analysts have consistently been highly ranked in
respected industry surveys conducted in the United States and abroad.  Goldman
Sachs is also among the leading investment firms using quantitative analytics
(now used by a growing number of investors) to structure and evaluate
portfolios.

     In managing the Funds, the Investment Advisers have access to Goldman
Sachs' economics research.  The Economics Research Department based in London,
conducts economic, financial and currency markets research which analyzes
economic trends and interest and exchange rate movements worldwide.  The
Economics Research Department tracks factors such as inflation and money supply
figures, balance of trade figures, economic growth, commodity prices, monetary
and fiscal policies, and political events that can influence interest rates and
currency trends.  The success of Goldman Sachs' international research team has
brought wide recognition to its members.  The team has earned top rankings in
various external surveys such as Extel, Institutional Investor and Reuters.
These rankings acknowledge the achievements of the firm's economists,
strategists and equity analysts.

     The Management Agreement provides that GSAM and GSAMI, in their capacity as
Investment Advisers, may render similar services to others as long as the
services under the Management Agreement are not impaired thereby. The Management
Agreement was initially approved with respect to the Funds by the Trustees,
including a majority of the non-interested Trustees (as defined below) who are
not parties to the Management Agreement on ________, 2001. The Funds' sole
shareholder approved these arrangements on ________, 2001. The Management
Agreement will remain in effect until ______________ and will continue in effect
with respect to the applicable Fund from year to year thereafter provided such
continuance is specifically approved at least annually by (i) the vote of a
majority of such Fund's outstanding voting securities or a majority of the
Trustees of the Trust, and (ii) the vote of a majority of the non-interested
Trustees of the Trust, cast in person at a meeting called for the purpose of
voting on such approval.

     The Management Agreement will terminate automatically if assigned (as
defined in the Act).  The Management Agreement is also terminable at any time
without penalty by the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the applicable Fund on 60 days' written notice
to the Investment Adviser and by the Investment Adviser on 60 days' written
notice to the Trust.

     Pursuant to the Management Agreement, the Investment Advisers are entitled
to receive fees, payable monthly, at the annual rate of 1.10% of each Fund's
average daily net assets.  Prior to the date of this Additional Statement, no
shares of the Funds had been offered and,

                                      B-49


accordingly, no fees were paid by the Funds to the Investment Adviser pursuant
to the Management Agreement.

     Under the Management Agreement, the Investment Adviser also: (i)
supervises all non-advisory operations of each Fund it advises; (ii) provides
personnel to perform such executive, administrative and clerical services as are
reasonably necessary to provide effective administration of each Fund; (iii)
arranges for at each Fund's expense: (a) the preparation of all required tax
returns, (b) the preparation and submission of reports to existing shareholders,
(c) the periodic updating of prospectuses and statements of additional
information and (d) the preparation of reports to be filed with the SEC and
other regulatory authorities; (iv) maintains each Fund's records; and (v)
provides office space and all necessary office equipment and services.

     Activities of Goldman Sachs and Its Affiliates and Other Accounts Managed
by Goldman Sachs.  The involvement of the Investment Advisers and Goldman Sachs
and their affiliates in the management of, or their interest in, other accounts
and other activities of Goldman Sachs may present conflicts of interest with
respect to the Funds or impede their investment activities.

     Goldman Sachs and its affiliates, including, without limitation, the
Investment Advisers and their advisory affiliates, have proprietary interests
in, and may manage or advise with respect to, accounts or funds (including
separate accounts and other funds and collective investment vehicles) which have
investment objectives similar to those of the Funds and/or which engage in
transactions in the same types of securities, currencies and instruments as the
Funds.  Goldman Sachs and its affiliates are major participants in the global
currency, equities, swap and fixed-income markets, in each case both on a
proprietary basis and for the accounts of customers.  As such, Goldman Sachs and
its affiliates are actively engaged in transactions in the same securities,
currencies and instruments in which the Funds invest.  Such activities could
affect the prices and availability of the securities, currencies and instruments
in which the Funds will invest, which could have an adverse impact on each
Fund's performance.  Such transactions, particularly in respect of proprietary
accounts or customer accounts other than those included in the Investment
Advisers' and their advisory affiliates' asset management activities, will be
executed independently of the Funds' transactions and thus at prices or rates
that may be more or less favorable.  When the Investment Advisers and their
advisory affiliates seek to purchase or sell the same assets for their managed
accounts, including the Funds, the assets actually purchased or sold may be
allocated among the accounts on a basis determined in its good faith discretion
to be equitable.  In some cases, this system may adversely affect the size or
the price of the assets purchased or sold for the Funds.

     From time to time, the Funds' activities may be restricted because of
regulatory restrictions applicable to Goldman Sachs and its affiliates, and/or
their internal policies designed to comply with such restrictions.  As a result,
there may be periods, for example, when the Investment Advisers and/or their
affiliates will not initiate or recommend certain types of transactions in
certain securities or instruments with respect to which the Investment Advisers
and/or their affiliates are performing services or when position limits have
been reached.

                                      B-50


     In connection with their management of the Funds, the Investment Advisers
may have access to certain fundamental analysis and proprietary technical models
developed by Goldman Sachs and other affiliates.  The Investment Advisers will
not be under any obligation, however, to effect transactions on behalf of the
Funds in accordance with such analysis and models.  In addition, neither Goldman
Sachs nor any of its affiliates will have any obligation to make available any
information regarding their proprietary activities or strategies, or the
activities or strategies used for other accounts managed by them, for the
benefit of the management of the Funds and it is not anticipated that the
Investment Advisers will have access to such information for the purpose of
managing the Funds.  The proprietary activities or portfolio strategies of
Goldman Sachs and its affiliates or the activities or strategies used for
accounts managed by them or other customer accounts could conflict with the
transactions and strategies employed by the Investment Advisers in managing the
Funds.

     The results of each Fund's investment activities may differ significantly
from the results achieved by the Investment Advisers and their affiliates for
their proprietary accounts or accounts (including investment companies or
collective investment vehicles) managed or advised by them. It is possible that
Goldman Sachs and its affiliates and such other accounts will achieve investment
results which are substantially more or less favorable than the results achieved
by a Fund.  Moreover, it is possible that a Fund will sustain losses during
periods in which Goldman Sachs and its affiliates achieve significant profits on
their trading for proprietary or other accounts.  The opposite result is also
possible.

     The investment activities of Goldman Sachs and its affiliates for their
proprietary accounts and accounts under their management may also limit the
investment opportunities for the Fund in certain emerging markets in which
limitations are imposed upon the aggregate amount of investment, in the
aggregate or individual issuers, by affiliated foreign investors.

     An investment policy committee which may include partners of Goldman Sachs
and its affiliates may develop general policies regarding a Fund's activities
but will not be involved in the day-to-day management of such Fund.  In such
instances, those individuals may, as a result, obtain information regarding the
Fund's proposed investment activities which is not generally available to the
public.  In addition, by virtue of their affiliation with Goldman Sachs, any
such member of an investment policy committee will have direct or indirect
interests in the activities of Goldman Sachs and its affiliates in securities
and investments similar to those in which the Fund invests.

     In addition, certain principals and certain of the employees of the
Investment Advisers are also principals or employees of Goldman Sachs or their
affiliated entities.  As a result, the performance by these principals and
employees of their obligations to such other entities may be a consideration of
which investors in the Funds should be aware.

     Each Investment Adviser may enter into transactions and invest in
currencies or instruments on behalf of a Fund in which customers of Goldman
Sachs serve as the counterparty, principal or issuer.  In such cases, such
party's interests in the transaction will be adverse to the interests of a Fund,
and such party may have no incentive to assure that the Funds obtain the best
possible prices

                                      B-51


or terms in connection with the transactions. Goldman Sachs and its affiliates
may also create, write or issue derivative instruments for customers of Goldman
Sachs or its affiliates, the underlying securities or instruments of which may
be those in which a Fund invests or which may be based on the performance of a
Fund. The Funds may, subject to applicable law, purchase investments which are
the subject of an underwriting or other distribution by Goldman Sachs or its
affiliates and may also enter transactions with other clients of Goldman Sachs
or its affiliates where such other clients have interests adverse to those of
the Funds. At times, these activities may cause departments of the Firm to give
advice to clients that may cause these clients to take actions adverse to the
interests of the client. To the extent affiliated transactions are permitted,
the Funds will deal with Goldman Sachs and its affiliates on an arms-length
basis.

     Each Fund will be required to establish business relationships with its
counterparties based on the Fund's own credit standing.  Neither Goldman Sachs
nor its affiliates will have any obligation to allow their credit to be used in
connection with a Fund's establishment of its business relationships, nor is it
expected that a Fund's counterparties will rely on the credit of Goldman Sachs
or any of its affiliates in evaluating the Fund's creditworthiness.

     From time to time, Goldman Sachs or any of its affiliates may, but is not
required to, purchase and hold shares of a Fund in order to increase the assets
of the Fund.  Increasing a Fund's assets may enhance investment flexibility and
diversification and may contribute to economies of scale that tend to reduce the
Fund's expense ratio.  Goldman Sachs reserves the right to redeem at any time
some or all of the shares of a Fund acquired for its own account.  A large
redemption of shares of a Fund by Goldman Sachs could significantly reduce the
asset size of the Fund, which might have an adverse effect on the Fund's
investment flexibility, portfolio diversification and expense ratio.  Goldman
Sachs will consider the effect of redemptions on a Fund and other shareholders
in deciding whether to redeem its shares.

     It is possible that a Fund's holdings will include securities of entities
for which Goldman Sachs performs investment banking services as well as
securities of entities in which Goldman Sachs makes a market.  From time to
time, Goldman Sachs' activities may limit the Funds' flexibility in purchases
and sales of securities.  When Goldman Sachs is engaged in an underwriting or
other distribution of securities of an entity, the Investment Adviser may be
prohibited from purchasing or recommending the purchase of certain securities of
that entity for the Funds.

Distributor and Transfer Agent
------------------------------

     Goldman Sachs, 85 Broad Street, New York, New York 10004, serves as the
exclusive distributor of shares of the Funds pursuant to a "best efforts"
arrangement as provided by a distribution agreement with the Trust on behalf of
the Funds. Shares of the Funds are offered and sold on a continuous basis by
Goldman Sachs, acting as agent.  Pursuant to the distribution agreement, after
the Prospectuses and periodic reports have been prepared, set in type and mailed
to shareholders, Goldman Sachs will pay for the printing and distribution of
copies thereof used in connection with the offering to prospective investors.
Goldman Sachs will also pay for other supplementary sales literature and
advertising costs. Goldman Sachs may enter into sales

                                      B-52


agreements with certain investment dealers and other financial service firms
(the "Authorized Dealers") to solicit subscriptions for Class A, Class B and
Class C shares of the Funds. Goldman Sachs receives a portion of the sales
charge imposed on the sale, in the case of Class A Shares, or redemption in the
case of Class B and Class C Shares (and in certain cases, Class A Shares), of
such Fund shares. Prior to the date of this Additional Statement, no shares of
the Funds had been offered and, accordingly, Goldman Sachs retained no sales
commissions.

     Goldman Sachs, 4900 Sears Tower, Chicago, IL 60606 serves as the Trust's
transfer agent.  Under its transfer agency agreement with the Trust, Goldman
Sachs has undertaken with the Trust to: (i) record the issuance, transfer and
redemption of shares, (ii) provide purchase and redemption confirmations and
quarterly statements, as well as certain other statements, (iii) provide certain
information to the Trust's custodian and the relevant sub-custodian in
connection with redemptions, (iv) provide dividend crediting and certain
disbursing agent services, (v) maintain shareholder accounts, (vi) provide
certain state Blue Sky and other information, (vii) provide shareholders and
certain regulatory authorities with tax related information, (viii) respond to
shareholder inquiries, and (ix) render certain other miscellaneous services. For
its transfer agency services, Goldman Sachs is entitled to receive a transfer
agency fee equal, on an ongoing basis, to 0.04% of average daily net assets with
respect to the Funds' Institutional and Service Shares and 0.19% of average
daily net assets with respect to the Funds' Class A, Class B and Class C Shares.
Prior to the date of this Additional Statement, no shares of the Funds had been
offered and, accordingly, no fees were paid by the Funds to Goldman Sachs as
transfer agent.

     The Trust's distribution and transfer agency agreements each provide that
Goldman Sachs may render similar services to others so long as the services
Goldman Sachs provides thereunder are not impaired thereby.  Such agreements
also provide that the Trust will indemnify Goldman Sachs against certain
liabilities.

Expenses
--------

     The Trust, on behalf of each Fund, is responsible for the payment of each
Fund's expenses. The expenses include, without limitation, the fees payable to
the Investment Advisers, service fees paid to institutions that have agreed to
provide account administration and personal account maintenance services to
their customers who are the beneficial owners of Service Shares ("Service
Organizations"), the fees and expenses of the Trust's custodian and
subcustodians, transfer agent fees, brokerage fees and commissions, filing fees
for the registration or qualification of the Trust's shares under federal or
state securities laws, expenses of the organization of the Trust, fees and
expenses incurred by the Trust in connection with membership in investment
company organizations, taxes, interest, costs of liability insurance, fidelity
bonds or indemnification, any costs, expenses or losses arising out of any
liability of, or claim for damages or other relief asserted against, the Trust
for violation of any law, legal and auditing fees and expenses (including the
cost of legal and certain accounting services rendered by employees of GSAM,
GSAMI and Goldman Sachs with respect to the Trust), expenses of preparing and
setting in type prospectuses, statements of additional information, proxy
material, reports and notices and the printing and distributing of the same to
the Trust's shareholders and
                                      B-53


regulatory authorities, any expenses assumed by a Fund pursuant to its
distribution and service plans, compensation and expenses of its "non-
interested" Trustees and extraordinary expenses, if any, incurred by the Trust.
Except for fees under any service plan or distribution and service plan
applicable to a particular class and transfer agency fees, all Fund expenses are
borne on a non-class specific basis.

     The imposition of the Investment Adviser's fee, as well as other operating
expenses, will have the effect of reducing the total return to investors.  From
time to time, the Investment Adviser may waive receipt of its fees and/or
voluntarily assume certain expenses of a Fund, which would have the effect of
lowering a Fund's overall expense ratio and increasing total return to investors
at the time such amounts are waived or assumed, as the case may be.

     The Investment Advisers voluntarily have agreed to reduce or limit certain
"Other Expenses" (excluding management fees, distribution and service fees,
transfer agency fees, taxes, interest, brokerage and litigation, indemnification
and other extraordinary expenses) for the following Funds to the extent such
expenses exceed the following percentage of average daily net assets:

                                                   Other
                                                   Expenses
                                                   --------

Global Consumer Growth Fund                        0.11%
Global Financial Services Fund                     0.11%
Global Health Sciences Fund                        0.11%
Global Infrastructure and Resources Fund           0.11%
Global Technology Fund                             0.11%

     Such reductions or limits, if any, are calculated monthly on a cumulative
basis and may be discontinued or modified by the Investment Advisers in their
discretion at any time.

     Fees and expenses of legal counsel, registering shares of a Fund, holding
meetings and communicating with shareholders may include an allocable portion of
the cost of maintaining an internal legal and compliance department.  Each Fund
may also bear an allocable portion of the Investment Adviser's costs of
performing certain accounting services not being provided by the Fund's
Custodian.

Custodian and Sub-Custodians
----------------------------

     State Street, P.O. Box 1713, Boston, Massachusetts 02105, is the custodian
of the Trust's portfolio securities and cash.  State Street also maintains the
Trust's accounting records.  State Street may appoint domestic and foreign sub-
custodians from time to time to hold certain securities purchased by the Trust
and to hold cash for the Trust.

                                      B-54


Independent Public Accountants
------------------------------

     _____________________, independent public accountants,  [address], have
been selected as auditors of the Funds of the Trust for the fiscal year ending
October 31, 2001.  In addition to audit services, __________________ will
prepare the Funds' federal and state tax returns, and will provide consultation
and assistance on accounting, internal control and related matters.


                     PORTFOLIO TRANSACTIONS AND BROKERAGE

     The Investment Advisers are responsible for decisions to buy and sell
securities for the Funds, the selection of brokers and dealers to effect the
transactions and the negotiation of brokerage commissions, if any.  Purchases
and sales of securities on a securities exchange are effected through brokers
who charge a commission for their services.  Orders may be directed to any
broker including, to the extent and in the manner permitted by applicable law,
Goldman Sachs.

     In the over-the-counter market, securities are generally traded on a "net"
basis with dealers acting as principal for their own accounts without a stated
commission, although the price of a security usually includes a profit to the
dealer.  In underwritten offerings, securities are purchased at a fixed price
which includes an amount of compensation to the underwriter, generally referred
to as the underwriter's concession or discount.  On occasion, certain money
market instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.

     In placing orders for portfolio securities of a Fund, the Investment
Advisers are generally required to give primary consideration to obtaining the
most favorable execution and net price available.  This means that an Investment
Adviser will seek to execute each transaction at a price and commission, if any,
which provides the most favorable total cost or proceeds reasonably attainable
in the circumstances. As permitted by Section 28(e) of the Securities Exchange
Act of 1934, the Fund may pay a broker which provides brokerage and research
services to the Fund an amount of disclosed commission in excess of the
commission which another broker would have charged for effecting that
transaction.  Such practice is subject to a good faith determination that such
commission is reasonable in light of the services provided and to such policies
as the Trustees may adopt from time to time.  While the Investment Advisers
generally seek reasonably competitive spreads or commissions, a Fund will not
necessarily be paying the lowest spread or commission available.  Within the
framework of this policy, the Investment Advisers will consider research and
investment services provided by brokers or dealers who effect or are parties to
portfolio transactions of a Fund, the Investment Advisers and their affiliates,
or their other clients.  Such research and investment services are those which
brokerage houses customarily provide to institutional investors and include
research reports on particular industries and companies, economic surveys and
analyses, recommendations as to specific securities and other products or
services (e.g., quotation equipment and computer related costs and expenses),
advice concerning the value of securities, the advisability of investing in,
purchasing or selling securities, the availability of securities or the
purchasers or sellers of securities, furnishing analyses and reports

                                      B-55


concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts, effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement) and providing lawful and appropriate assistance to the Investment
Advisers in the performance of their decision-making responsibilities. Such
services are used by the Investment Advisers in connection with all of their
investment activities, and some of such services obtained in connection with the
execution of transactions for a Fund may be used in managing other investment
accounts. Conversely, brokers furnishing such services may be selected for the
execution of transactions of such other accounts, whose aggregate assets are far
larger than those of a Fund, and the services furnished by such brokers may be
used by the Investment Advisers in providing management services for the Trust.

     In circumstances where two or more broker-dealers offer comparable prices
and execution capability, preference may be given to a broker-dealer which has
sold shares of the Fund as well as shares of other investment companies or
accounts managed by the Investment Advisers.  This policy does not imply a
commitment to execute all portfolio transactions through all broker-dealers that
sell shares of the Fund.

     On occasions when an Investment Adviser deems the purchase or sale of a
security to be in the best interest of a Fund as well as its other customers
(including any other fund or other investment company or advisory account for
which such Investment Adviser acts as investment adviser or sub-investment
adviser), the Investment Adviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased for the Fund
with those to be sold or purchased for such other customers in order to obtain
the best net price and most favorable  execution under the circumstances.  In
such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Investment Adviser in
the manner it considers to be equitable and consistent with its fiduciary
obligations to such Fund and such other customers. In some instances, this
procedure may adversely affect the price and size of the position obtainable for
a Fund.

     Commission rates in the U.S. are established pursuant to negotiations with
the broker based on the quality and quantity of execution services provided by
the broker in the light of generally prevailing rates.  The allocation of orders
among brokers and the commission rates paid are reviewed periodically by the
Trustees.

     Subject to the above considerations, the Investment Advisers may use
Goldman Sachs as a broker for a Fund.  In order for Goldman Sachs to effect any
portfolio transactions for each Fund, the commissions, fees or other
remuneration received by Goldman Sachs must be reasonable and customary.  This
standard would allow Goldman Sachs to receive no more than the remuneration
which would be expected to be received by an unaffiliated broker in a
commensurate arm's-length transaction. Furthermore, the Trustees, including a
majority of the Trustees who are not "interested" Trustees, have adopted
procedures which are reasonably designed to provide that any commissions, fees
or other remuneration paid to Goldman Sachs are consistent with the foregoing
standard. Brokerage transactions with Goldman Sachs are also subject to such
fiduciary standards as may be

                                      B-56


imposed upon Goldman Sachs by applicable law. As of the date of this Additional
Statement, no shares of the Funds had been offered and, accordingly, the Funds
paid no brokerage commissions.

                                NET ASSET VALUE

     Under the Act, the Trustees are responsible for determining in good faith
the fair value of securities of each Fund.  In accordance with procedures
adopted by the Trustees, the net value per share of each class of each Fund is
calculated by determining the value of the net assets attributed to each class
of that Fund and dividing by the number of outstanding shares of that class.
All securities are valued as of the close of regular trading on the New York
Stock Exchange (normally, but not always, 4:00 p.m. New York time) on each
Business Day.  The term "Business Day" means any day the New York Stock Exchange
is open for trading, which is Monday through Friday except for holidays.  The
New York Stock Exchange is closed on the following holidays:  New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

     In the event that the New York Stock Exchange or the national securities
exchange on which stock options are traded adopt different trading hours on
either a permanent or temporary basis, the Trustees will reconsider the time at
which net asset value is computed.  In addition, each Fund may compute its net
asset value as of any time permitted pursuant to any exemption, order or
statement of the SEC or its staff.

     Portfolio securities of a Fund for which accurate market quotations are
available are valued as follows:  (i) securities listed on any U.S. or foreign
stock exchange or on the National Association of Securities Dealers Automated
Quotations System ("NASDAQ") will be valued at the last sale price on the
exchange or system in which they are principally traded on the valuation date.
If there is no sale on the valuation day, securities traded will be valued at
the closing bid price, or if a closing bid price is not available, at either the
exchange or system-defined close price on the exchange or system in which such
securities are principally traded.  If the relevant exchange or system has not
closed by the above-mentioned time for determining the Funds net asset value,
the securities will be valued at the last sale price, or if not available at the
bid price at the time the net asset value is determined; (ii) over-the-counter
securities not quoted on NASDAQ will be valued at the last sale price on the
valuation day or, if no sale occurs, at the last bid price at the time net asset
value is determined; (iii) equity securities for which no prices are obtained
under section (i) or (ii) including those for which a pricing service supplies
no exchange quotation or a quotation that is believed by the portfolio
manager/trader to be inaccurate, will be valued at their fair value in
accordance with procedures approved by the Board of Trustees; (iv) fixed-income
securities with a remaining maturity of 60 days or more for which accurate
market quotations are readily available will normally be valued according to
dealer-supplied bid quotations or bid quotations from a recognized pricing
service (e.g., Merrill Lynch, J.J. Kenny, Muller Data Corp., Bloomberg, EJV,
Reuters or Standard & Poor's); (v) fixed-income securities for which accurate
market quotations are not readily available are valued by the Investment
Advisers based on valuation models that take into account spread and daily yield
changes on government securities in the appropriate market (i.e., matrix
pricing); (vi) debt securities with a remaining maturity of 60 days or less are
valued by

                                      B-57


the Investment Advisers at amortized cost, which the Trustees have determined to
approximate fair value; and (vii) all other instruments, including those for
which a pricing service supplies no exchange quotation or a quotation that is
believed by the portfolio manager/trader to be inaccurate, will be valued at
fair value in accordance with the valuation procedures approved by the Board of
Trustees.

     The value of all assets and liabilities expressed in foreign currencies
will be converted into U.S. dollar values at current exchange rates of such
currencies against U.S. dollars last quoted by any major bank.  If such
quotations are not available, the rate of exchange will be determined in good
faith by or under procedures established by the Board of Trustees.

     Generally, trading in securities on European and Far Eastern securities
exchanges and on over-the-counter markets is substantially completed at various
times prior to the close of business on each Business Day in New York (i.e., a
day on which the New York Stock Exchange is open for trading).  In addition,
European or Far Eastern securities trading generally or in a particular country
or countries may not take place on all Business Days in New York.  Furthermore,
trading takes place in various foreign markets on days which are not Business
Days in New York and days on which the Funds' net asset values are not
calculated.  Such calculation does not take place contemporaneously with the
determination of the prices of the majority of the portfolio securities used in
such calculation.  The impact of events that occur after the publication of
market quotations used by a Fund to price its securities but before the close of
regular trading on the New York Stock Exchange will normally not be reflected in
a Fund's next determined NAV unless the Trust, in its discretion, makes an
adjustment in light of the nature and materiality of the event, its effect on
Fund operations and other relevant factors.

     The proceeds received by each Fund and each other series of the Trust from
the issue or sale of its shares, and all net investment income, realized and
unrealized gain and proceeds thereof, subject only to the rights of creditors,
will be specifically allocated to such Fund and constitute the underlying assets
of that Fund or series.  The underlying assets of each Fund will be segregated
on the books of account, and will be charged with the liabilities in respect of
such Fund and with a share of the general liabilities of the Trust. Expenses of
the Trust with respect to the Funds and the other series of the Trust are
generally allocated in proportion to the net asset values of the respective
Funds or series except where allocations of direct expenses can otherwise be
fairly made.

                            PERFORMANCE INFORMATION

     Each Fund may from time to time quote or otherwise use yield and total
return information in advertisements, shareholder reports or sales literature.
Average annual total return and yield are computed pursuant to formulas
specified by the SEC.

     Thirty-day yield is derived by dividing net investment income per share
earned during the period by the maximum public offering price per share on the
last day of such period.  The results are compounded on a bond equivalent (semi-
annual) basis and then annualized.  Net investment income per share is equal to
the dividends and interest earned during the period, reduced by accrued

                                      B-58


expenses for the period. The calculation of net investment income for these
purposes may differ from the net investment income determined for accounting
purposes.

     Distribution rate for a specified period is calculated by annualizing
distributions of net investment income for such period and dividing this amount
by the net asset value per share or maximum public offering price on the last
day of the period.

     Average annual total return for a specified period is derived by
calculating the actual dollar amount of the investment return on a $1,000
investment made at the maximum public offering price at the beginning of the
period, and then calculating the annual compounded rate of return which would
produce that amount, assuming a redemption at the end of the period.  This
calculation assumes a complete redemption of the investment.  It also assumes
that all dividends and distributions are reinvested at net asset value on the
reinvestment dates during the period.

     Year-by-year total return and cumulative total return for a specified
period are each derived by calculating the percentage rate required to make a
$1,000 investment (made at the maximum public offering price with all
distributions reinvested) at the beginning of such period equal to the actual
total value of such investment at the end of such period.

     Total return calculations for Class A Shares reflect the effect of paying
the maximum initial sales charge.  Investment at a lower sales charge would
result in higher performance figures.  Total return calculations for Class B and
Class C Shares reflect deduction of the applicable CDSC imposed upon redemption
of Class B and Class C Shares held for the applicable period.  Each Fund may
also from time to time advertise total return on a cumulative, average, year-by-
year or other basis for various specified periods by means of quotations, charts
graphs or schedules.  In addition, each Fund may furnish total return
calculations based on investments at various sales charge levels or at NAV.  Any
performance information which is based on a Fund's NAV per Share would be
reduced if any applicable sales charge were taken into account.  In addition to
the above, each Fund may from time to time advertise its performance relative to
certain averages, performance rankings, indices, other information prepared by
recognized mutual fund statistical services and investments for which reliable
performance information is available.  The Funds' performance quotations do not
reflect any fees charged by an Authorized Dealer, Service Organization or other
financial intermediary to its customer accounts in connection with investments
in the Funds.

     Each Fund's performance will fluctuate, unlike bank deposits or other
investments which pay a fixed yield for a stated period of time.  Past
performance is not necessarily indicative of future return.  Actual performance
will depend on such variables as portfolio quality, average portfolio maturity,
the type of portfolio instruments acquired, changes in interest rates, portfolio
expenses and other factors.  Performance is one basis investors may use to
analyze a Fund as compared to other funds and other investment vehicles.
However, the performance of other funds and other investment vehicles may not be
comparable because of the foregoing variables, and differences in the methods
used in valuing their portfolio instruments, computing net asset value and
determining performance.

                                      B-59


     Occasionally, statistics may be used to specify Fund volatility or risk.
Measures of volatility or risk are generally used to compare a Fund's net asset
value or performance relative to a market index.  One measure of volatility is
beta.  Beta is the volatility of a Fund relative to the total market. A beta of
more than 1.00 indicates volatility greater than the market, and a beta of less
than 1.00 indicates volatility less than the market.  Another measure of
volatility or risk is standard deviation. Standard deviation is used to measure
variability of net asset value or total return around an average, over a
specified period of time.  The premise is that greater volatility connotes
greater risk undertaken in achieving performance.

     From time to time the Trust may publish an indication of a Fund's past
performance as measured by independent sources such as (but not limited to)
Lipper Analytical Services, Inc., Morningstar Mutual Funds, Weisenberger
Investment Companies Service, Donoghue's Money Fund Report, Micropal, Barron's,
Business Week, Consumer's Digest, Consumer's Report, Investors Business Daily,
The New York Times, Kiplinger's Personal Finance Magazine, Changing Times,
Financial World, Forbes, Fortune, Money, Personal Investor, Sylvia Porter's
Personal Finance and The Wall Street Journal.  The Trust may also advertise
information which has been provided to the NASD for publication in regional and
local newspapers.  In addition, the Trust may from time to time advertise a
Fund's performance relative to certain indices and benchmark investments,
including:  (i) the Lipper Analytical Services, Inc. Mutual Fund Performance
Analysis, Fixed-Income Analysis and Mutual Fund Indices (which measure total
return and average current yield for the mutual fund industry and rank mutual
fund performance); (ii) the CDA Mutual Fund Report published by CDA Investment
Technologies, Inc. (which analyzes price, risk and various measures of return
for the mutual fund industry); (iii) the Consumer Price Index published by the
U.S. Bureau of Labor Statistics (which measures changes in the price of goods
and services); (iv) Stocks, Bonds, Bills and Inflation published by Ibbotson
Associates (which provides historical performance figures for stocks, government
securities and inflation); (v) the Salomon Brothers' World Bond Index (which
measures the total return in U.S. dollar terms of government bonds, Eurobonds
and foreign bonds of ten countries, with all such bonds having a minimum
maturity of five years); (vi) the Lehman Brothers Aggregate Bond Index or its
component indices; (vii) the Standard & Poor's Bond Indices (which measure yield
and price of corporate, municipal and U.S.  Government bonds); (viii) the J.P.
Morgan Global Government Bond Index; (ix) other taxable investments including
certificates of deposit (CDs), money market deposit accounts (MMDAs), checking
accounts, savings accounts, money market mutual funds and repurchase agreements;
(x) Donoghues' Money Fund Report (which provides industry averages for 7-day
annualized and compounded yields of taxable, tax-free and U.S. Government money
funds);  (xi) the Hambrecht & Quist Growth Stock Index; (xii) the NASDAQ OTC
Composite Prime Return; (xiii) the Russell Midcap Index; (xiv) the Russell 2000
Index - Total Return; (xv) the Russell 1000 Value Index; (xvi) the Russell 1000
Growth Index-Total Return; (xvii) the Value-Line Composite-Price Return; (xviii)
the Wilshire 4500 Index; (xix) the FT-Actuaries Europe and Pacific Index; (xx)
historical investment data supplied by the research departments of Goldman
Sachs, Lehman Brothers, First Boston Corporation, Morgan Stanley (including the
EAFE Indices, the Morgan Stanley World Index, the Morgan Stanley Capital
International Combined Asia ex Japan Free Index and the Morgan Stanley Capital
International Emerging Markets Free Index), Salomon Brothers, Merrill

                                      B-60


Lynch, Donaldson Lufkin and Jenrette or other providers of such data; (xxi)
CDA/Wiesenberger Investment Companies Services or Wiesenberger Investment
Companies Service; (xxii) The Goldman Sachs Commodities Index; (xxiii)
information produced by Micropal, Inc.; and (xxiv) The Tokyo Price Index. The
composition of the investments in such indices and the characteristics of such
benchmark investments are not identical to, and in some cases are very different
from, those of a Fund's portfolio. These indices and averages are generally
unmanaged and the items included in the calculations of such indices and
averages may not be identical to the formulas used by a Fund to calculate its
performance figures.

     Information used in advertisements and materials furnished to present and
prospective investors may include statements or illustrations relating to the
appropriateness of certain types of securities and/or mutual funds to meet
specific financial goals.  Such information may address:

     .    cost associated with aging parents;

     .    funding a college education (including its actual and estimated cost);

     .    health care expenses (including actual and projected expenses);

     .    long-term disabilities (including the availability of, and coverage
          provided by, disability insurance);

     .    retirement (including the availability of social security benefits,
          the tax treatment of such benefits and statistics and other
          information relating to maintaining a particular standard of living
          and outliving existing assets);

     .    asset allocation strategies and the benefits of diversifying among
          asset classes;

     .    the benefits of international and emerging market investments;

     .    the effects of inflation on investing and saving;

     .    the benefits of establishing and maintaining a regular pattern of
          investing and the benefits of dollar-cost averaging; and

     .    measures of portfolio risk, including but not limited to, alpha, beta
          and standard deviation.

The Trust may from time to time use comparisons, graphs or charts in
advertisements to depict the following types of information:

     .    the performance of various types of securities (common stocks, small
          company stocks, long-term government bonds, treasury bills and
          certificates of deposit) over

                                      B-61


          time. However, the characteristics of these securities are not
          identical to, and may be very different from, those of a Fund's
          portfolio;

     .    the dollar and non-dollar based returns of various market indices (for
          example, Morgan Stanley World Index, Morgan Stanley Capital
          International EAFE Index, FT-Actuaries Europe & Pacific Index and the
          Standard & Poor's Index of 500 Common Stocks) over varying periods of
          time;

     .    total stock market capitalizations of specific countries and regions
          on a global basis;

     .    performance of securities markets of specific countries and regions;
          and

     .    value of a dollar amount invested in a particular market or type of
          security over different periods of time.

     In addition, the Trust may from time to time include rankings of Goldman,
Sachs & Co.'s research department by publications such as the Institutional
Investor and the Wall Street Journal in advertisements.

     From time to time, advertisements or information may include a discussion
of certain attributes or benefits to be derived by an investment in a Fund.
Such advertisements or information may include symbols, headlines or other
material which highlight or summarize the information discussed in more detail
in the communication.

     The Trust may from time to time summarize the substance of discussions
contained in shareholder reports in advertisements and publish the Investment
Adviser's views as to markets, the rationale for a Fund's investments and
discussions of a Fund's current asset allocation.

     In addition, from time to time, advertisements or information may include a
discussion of asset allocation models developed by GSAM and/or its affiliates,
certain attributes or benefits to be derived from asset allocation strategies
and the Goldman Sachs mutual funds that may be offered as investment options for
the strategic asset allocations.  Such advertisements and information may also
include GSAM's current economic outlook and domestic and international market
views to suggest periodic tactical modifications to current asset allocation
strategies.  Such advertisements and information may include other materials
which highlight or summarize the services provided in support of an asset
allocation program.

     The Funds' performance data will be based on historical results and will
not be intended to indicate future performance.  The Funds' total return and
yield will vary based on market conditions, Fund expenses, Fund investments and
other factors.  The value of each Fund's shares will fluctuate and an investor's
shares may be worth more or less than their original cost upon redemption.  The
Trust may also, at its discretion, from time to time make a list of the Funds'
holdings available to investors upon request.

                                      B-62


     Total return will be calculated separately for each class of shares in
existence.  Because each class of shares is subject to different expenses, total
return with respect to each class of shares of the Funds will differ.  As of the
date of this Additional Statement, no shares of the Funds had been offered and
accordingly, no performance information is available.

                              SHARES OF THE TRUST

     Goldman Sachs Trust, a Delaware business trust, was established by a
Declaration of Trust dated January 28, 1997.  The Trustees have authority under
the Trust's Declaration of Trust to create and classify shares of beneficial
interest in separate series, without further action by shareholders. The
Trustees also have authority to classify and reclassify any series of shares
into one or more classes of shares.  As of the date of this Additional
Statement, the Trustees have classified the shares of the Funds into five
classes: Institutional Shares, Service Shares, Class A Shares, Class B Shares
and Class C Shares.

     Each Institutional Share, Service Share, Class A Share, Class B Share and
Class C Share of a Fund represents a proportionate interest in the assets
belonging to the applicable class of the Fund. All expenses of a Fund are borne
at the same rate by each class of shares, except that fees under Service Plans
are borne exclusively by Service Shares, fees under Distribution and Service
Plans are borne exclusively by Class A, Class B or Class C Shares and transfer
agency fees are borne at different rates by different share classes.  The
Trustees may determine in the future that it is appropriate to allocate other
expenses differently between classes of shares and may do so to the extent
consistent with the rules of the SEC and positions of the Internal Revenue
Service.  Each class of shares may have different minimum investment
requirements and be entitled to different shareholder services.  With limited
exceptions, shares of a class may only be exchanged for shares of the same or an
equivalent class of another fund.  See "Shareholder Guide" in the Prospectus.

     Institutional Shares may be purchased at net asset value without a sales
charge for accounts in the name of an investor or institution that is not
compensated by a Fund under a Plan for services provided to the institution's
customers.

     Service Shares may be purchased at net asset value without a sales charge
for accounts held in the name of an institution that, directly or indirectly,
provides certain account administration and shareholder liaison services to its
customers, including maintenance of account records and processing orders to
purchase, redeem and exchange Service Shares. Service Shares bear the cost of
account administration fees at the annual rate of up to 0.50% of the average
daily net assets of the Fund attributable to Service Shares.

     Class A Shares are sold, with an initial sales charge of up to 5.5%,
through brokers and dealers who are members of the National Association of
Securities Dealers, Inc. (the "NASD") and certain other financial service firms
that have sales agreements with Goldman Sachs.  Class A Shares bear the cost of
distribution and service fees at the aggregate rate of up to 0.25% of the
average daily net assets of such Class A Shares.  Class A Shares also bear the
cost of service fees at

                                      B-63


an annual rate of up to 0.25% of the average daily net assets attributable to
Class A Shares. With respect to Class A Shares, the Distributor at its
discretion may use compensation for distribution services paid under the
Distribution and Services Plan for personal and account maintenance services and
expenses so long as such total compensation under the Plan does not exceed the
maximum cap on "service fees" imposed by the NASD.

     Class B Shares of the Funds are sold subject to a contingent deferred sales
charge of up to 5.0% through brokers and dealers who are members of the NASD and
certain other financial services firms that have sales arrangements with Goldman
Sachs.  Class B Shares bear the cost of distribution (Rule 12b-1) fees at the
aggregate rate of up to 0.75% of the average daily net assets attributable to
Class B Shares.  Class B Shares also bear the cost of service fees at an annual
rate of up to 0.25% of the average daily net assets attributable to Class B
Shares.

     Class C Shares of the Funds are sold subject to a contingent deferred sales
charge of up to 1.0% through brokers and dealers who are members of the NASD and
certain other financial services firms that have sales arrangements with Goldman
Sachs.  Class C Shares bear the cost of distribution (Rule 12b-1) fees at the
aggregate rate of up to 0.75% of the average daily net assets attributable to
Class C Shares.  Class C Shares also bear the cost of service fees at an annual
rate of up to 0.25% of the average daily net assets attributable to Class C
Shares.

     It is possible that an institution or its affiliate may offer different
classes of shares (i.e., Institutional, Service, Class A Shares, Class B Shares
and Class C Shares) to its customers and thus receive different compensation
with respect to different classes of shares of each Fund.  Dividends paid by
each Fund, if any, with respect to each class of shares will be calculated in
the same manner, at the same time on the same day and will be the same amount,
except for differences caused by the differences in expenses discussed above.
Similarly, the net asset value per share may differ depending upon the class of
shares purchased.

     Certain aspects of the shares may be altered after advance notice to
shareholders if it is deemed necessary in order to satisfy certain tax
regulatory requirements.

     When issued, shares are fully paid and non-assessable.  In the event of
liquidation, shareholders are entitled to share pro rata in the net assets of
the applicable class of the relevant Fund available for distribution to such
shareholders.  All shares are freely transferable and have no preemptive,
subscription or conversion rights.

     The Act requires that where more than one class or series of shares exists,
each class or series must be preferred over all other classes or series in
respect of assets specifically allocated to such class or series.  In addition,
Rule 18f-2 under the Act provides that any matter required to be submitted by
the provisions of the Act or applicable state law, or otherwise, to the holders
of the outstanding voting securities of an investment company such as the Trust
shall not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each class or series affected
by such matter.  Rule 18f-2 further provides that a class or series shall be
deemed to be affected by a matter unless the interests of each class or series
in the

                                      B-64


matter are substantially identical or the matter does not affect any interest of
such class or series. However, Rule 18f-2 exempts the selection of independent
public accountants, the approval of principal distribution contracts and the
election of trustees from the separate voting requirements of Rule 18f-2.

     The Trust is not required to hold annual meetings of shareholders and does
not intend to hold such meetings. In the event that a meeting of shareholders is
held, each share of the Trust will be entitled, as determined by the Trustees
without the vote or consent of the shareholders, either to one vote for each
share or to one vote for each dollar of net asset value represented by such
shares on all matters presented to shareholders including the elections of
Trustees (this method of voting being referred to as "dollar based voting").
However, to the extent required by the Act or otherwise determined by the
Trustees, series and classes of the Trust will vote separately from each other.
Shareholders of the Trust do not have cumulative voting rights in the election
of Trustees. Meetings of shareholders of the Trust, or any series or class
thereof, may be called by the Trustees, certain officers or upon the written
request of holders of 10% or more of the shares entitled to vote at such
meetings.  The Trustees will call a special meeting of shareholders for the
purpose of electing Trustees, if, at any time, less than a majority of Trustees
holding office at the time were elected by shareholders.  The shareholders of
the Trust will have voting rights only with respect to the limited number of
matters specified in the Declaration of Trust and such other matters as the
Trustees may determine or may be required by law.

     The Declaration of Trust provides for indemnification of Trustees,
officers, employees and agents of the Trust unless the recipient is adjudicated
(i) to be liable by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such person's
office; or (ii) not to have acted in good faith in the reasonable belief that
such person's actions were in the best interest of the Trust. The Declaration of
Trust provides that, if any shareholder or former shareholder of any series is
held personally liable solely by reason of being or having been a shareholder
and not because of the shareholder's acts or omissions or for some other reason,
the shareholder or former shareholder (or heirs, executors, administrators,
legal representatives or general successors) shall be held harmless from and
indemnified against all loss and expense arising from such liability. The Trust,
acting on behalf of any affected series, must, upon request by such shareholder,
assume the defense of any claim made against such shareholder for any act or
obligation of the series and satisfy any judgment thereon from the assets of the
series.

     The Declaration of Trust permits the termination of the Trust or of any
series or class of the Trust (i) by a majority of the affected shareholders at a
meeting of shareholders of the Trust, series or class; or (ii) by a majority of
the Trustees without shareholder approval if the Trustees determine that such
action is in the best interest of the Trust, series or its respective
shareholders. The factors and events that the Trustees may take into account in
making such determination include (i) the inability of the Trust or any
successor series or class to maintain its assets at an appropriate size; (ii)
changes in laws or regulations governing the Trust, series or class or affecting
assets of the type in which it invests; or (iii) economic developments or trends
having a significant adverse impact on their business or operations.

                                      B-65


     The Declaration of Trust authorizes the Trustees without shareholder
approval to cause the Trust, or any series thereof, to merge or consolidate with
any corporation, association, trust or their organization or sell or exchange
all or substantially all of the property belonging to the Trust or any series
thereof. In addition, the Trustees, without shareholder approval, may adopt a
master-feeder structure by investing all or a portion of the assets of a series
of the Trust in the securities of another open-end investment company.

     The Declaration of Trust permits the Trustees to amend the Declaration of
Trust without a shareholder vote. However, shareholders of the Trust have the
right to vote on any amendment (i) that would adversely affect the voting rights
of shareholder; (ii) that is required by law to be approved by shareholders;
(iii) that would amend the provisions of the Declaration of Trust regarding
amendments and supplements thereto; or (iv) that the Trustees determine to
submit to shareholders.

     The Trustees may appoint separate Trustees with respect to one or more
series or classes of the Trust's shares (the "Series Trustees"). Series Trustees
may, but are not required to, serve as Trustees of the Trust or any other series
or class of the Trust. The Series Trustees have, to the exclusion of any other
Trustees of the Delaware Trust, all the powers and authorities of Trustees under
the Declaration of Trust with respect to any other series or class.

Shareholder and Trustee Liability
---------------------------------

     Under Delaware Law, the shareholders of the Funds are not generally subject
to liability for the debts or obligations of the Trust. Similarly, Delaware law
provides that a series of the Trust will not be liable for the debts or
obligations of any other series of the Trust. However, no similar statutory or
other authority limiting business trust shareholder liability exists in other
states. As a result, to the extent that a Delaware business trust or a
shareholder is subject to the jurisdiction of courts of such other states, the
courts may not apply Delaware law and may thereby subject the Delaware business
trust shareholders to liability. To guard against this risk, the Declaration of
Trust contains an express disclaimer of shareholder liability for acts or
obligations of a Fund. Notice of such disclaimer will normally be given in each
agreement, obligation or instrument entered into or executed by a series or the
Trustees. The Declaration of Trust provides for indemnification by the relevant
Fund for all loss suffered by a shareholder as a result of an obligation of the
series. The Declaration of Trust also provides that a series shall, upon
request, assume the defense of any claim made against any shareholder for any
act or obligation of the series and satisfy any judgment thereon. In view of the
above, the risk of personal liability of shareholders of a Delaware business
trust is remote.

     In addition to the requirements under Delaware law, the Declaration of
Trust provides that shareholders of a series may bring a derivative action on
behalf of the series only if the following conditions are met: (i) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the series, or 10% of the outstanding shares of
the class to which such action relates, shall join in the request for the
Trustees to commence such action; and (ii) the Trustees must be afforded a
reasonable amount of time to consider such

                                     B-66


shareholder request and to investigate the basis of such claim. The Trustees
will be entitled to retain counsel or other advisers in considering the merits
of the request and may require an undertaking by the shareholders making such
request to reimburse the series for the expense of any such advisers in the
event that the Trustees determine not to bring such action.

     The Declaration of Trust further provides that the Trustees will not be
liable for error of judgment or mistakes of fact or law, but nothing in the
Declaration of Trust protects a Trustee against liability to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
or her office.

                                   TAXATION

     The following is a summary of the principal U.S. federal income, and
certain state and local, tax considerations regarding the purchase, ownership
and disposition of shares in each Fund of the Trust. This summary does not
address special tax rules applicable to certain classes of investors, such as
tax-exempt entities, insurance companies and financial institutions. Each
prospective shareholder is urged to consult his own tax adviser with respect to
the specific federal, state, local and foreign tax consequences of investing in
each Fund. The summary is based on the laws in effect on the date of this
Additional Statement, which are subject to change.

General
-------

     Each Fund is a separate taxable entity.  Each Fund has elected to be
treated and intends to qualify for each taxable year as a regulated investment
company under Subchapter M of the Code.

     There are certain tax requirements that all Funds must follow in order to
avoid federal taxation. In their efforts to adhere to these requirements, the
Funds may have to limit their investment activities in some types of
instruments. Qualification as a regulated investment company under the Code
requires, among other things, that (a) a Fund derive at least 90% of its gross
income for its taxable year from dividends, interest, payments with respect to
securities loans and gains from the sale or other disposition of stocks or
securities or foreign currencies, or other income (including but not limited to
gains from options, futures, and forward contracts) derived with respect to its
business of investing in such stock, securities or currencies (the "90% gross
income test"); and (b) such Fund diversify its holdings so that, at the close of
each quarter of its taxable year, (i) at least 50% of the market value of such
Fund's total (gross) assets is comprised of cash, cash items, U.S. Government
securities, securities of other regulated investment companies and other
securities limited in respect of any one issuer to an amount not greater in
value than 5% of the value of such Fund's total assets and to not more than 10%
of the outstanding voting securities of such issuer, and (ii) not more than 25%
of the value of its total (gross) assets is invested in the securities of any
one issuer (other than U.S. Government securities and securities of other
regulated investment companies) or two or more issuers controlled by the Fund
and engaged in the same, similar or related trades or businesses. For purposes
of the 90% gross income test, income that a Fund earns from equity interests in
certain entities that are not treated as corporations

                                     B-67


(e.g., partnerships or trusts) for U.S. tax purposes will generally have the
same character for such Fund as in the hands of such an entity; consequently, a
Fund may be required to limit its equity investments in such entities that earn
fee income, rental income, or other nonqualifying income. In addition, future
Treasury regulations could provide that qualifying income under the 90% gross
income test will not include gains from foreign currency transactions that are
not directly related to a Fund's principal business of investing in stock or
securities or options and futures with respect to stock or securities. Using
foreign currency positions or entering into foreign currency options, futures
and forward or swap contracts for purposes other than hedging currency risk with
respect to securities in a Fund's portfolio or anticipated to be acquired may
not qualify as "directly-related" under these tests.

     If a Fund complies with such provisions, then in any taxable year in which
such Fund distributes, in compliance with the Code's timing and other
requirements, at least 90% of its "investment company taxable income" (which
includes dividends, taxable interest, taxable accrued original issue discount
and market discount income, income from securities lending, any net short-term
capital gain in excess of net long-term capital loss, certain net realized
foreign exchange gains and any other taxable income other than "net capital
gain," as defined below, and is reduced by deductible expenses), and at least
90% of the excess of its gross tax-exempt interest income (if any) over certain
disallowed deductions, such Fund (but not its shareholders) will be relieved of
federal income tax on any income of the Fund, including long-term capital gains,
distributed to shareholders. However, if a Fund retains any investment company
taxable income or "net capital gain" (the excess of net long-term capital gain
over net short-term capital loss), it will be subject to a tax at regular
corporate rates on the amount retained. If the Fund retains any net capital
gain, the Fund may designate the retained amount as undistributed capital gains
in a notice to its shareholders who, if subject to U.S. federal income tax on
long-term capital gains, (i) will be required to include in income for federal
income tax purposes, as long-term capital gain, their shares of such
undistributed amount, and (ii) will be entitled to credit their proportionate
shares of the tax paid by the Fund against their U.S. federal income tax
liabilities, if any, and to claim refunds to the extent the credit exceeds such
liabilities. For U.S. federal income tax purposes, the tax basis of shares owned
by a shareholder of the Fund will be increased by an amount equal under current
law to 65% of the amount of undistributed net capital gain included in the
shareholder's gross income. Each Fund intends to distribute for each taxable
year to its shareholders all or substantially all of its investment company
taxable income, net capital gain and any net tax-exempt interest. Exchange
control or other foreign laws, regulations or practices may restrict
repatriation of investment income, capital or the proceeds of securities sales
by foreign investors and may therefore make it more difficult for such a Fund to
satisfy the distribution requirements described above, as well as the excise tax
distribution requirements described below. However, each Fund generally expects
to be able to obtain sufficient cash to satisfy such requirements from new
investors, the sale of securities or other sources. If for any taxable year a
Fund does not qualify as a regulated investment company, it will be taxed on all
of its investment company taxable income and net capital gain at corporate
rates, and its distributions to shareholders will be taxable as ordinary
dividends to the extent of its current and accumulated earnings and profits.

                                     B-68


     In order to avoid a 4% federal excise tax, each Fund must distribute (or be
deemed to have distributed) by December 31 of each calendar year at least 98% of
its taxable ordinary income for such year, at least 98% of the excess of its
capital gains over its capital losses (generally computed on the basis of the
one-year period ending on October 31 of such year), and all taxable ordinary
income and the excess of capital gains over capital losses for the previous year
that were not distributed for such year and on which the Fund paid no federal
income tax. For federal income tax purposes, dividends declared by a Fund in
October, November or December to shareholders of record on a specified date in
such a month and paid during January of the following year are taxable to such
shareholders as if received on December 31 of the year declared. Each Fund
anticipates that it will generally make timely distributions of income and
capital gains in compliance with these requirements so that it will generally
not be required to pay the excise tax. For federal income tax purposes, each
Fund is permitted to carry forward a net capital loss in any year to offset its
own capital gains, if any, during the eight years following the year of the
loss.

     Gains and losses on the sale, lapse, or other termination of options and
futures contracts, options thereon and certain forward contracts (except certain
foreign currency options, forward contracts and futures contracts) will
generally be treated as capital gains and losses. Certain of the futures
contracts, forward contracts and options held by a Fund will be required to be
"marked-to-market" for federal income tax purposes, that is, treated as having
been sold at their fair market value on the last day of the Fund's taxable year.
These provisions may require a Fund to recognize income or gains without a
concurrent receipt of cash. Any gain or loss recognized on actual or deemed
sales of these futures contracts, forward contracts, or options will (except for
certain foreign currency options, forward contracts, and futures contracts) be
treated as 60% long-term capital gain or loss and 40% short-term capital gain or
loss. As a result of certain hedging transactions entered into by a Fund, the
Fund may be required to defer the recognition of losses on futures contracts,
forward contracts, and options or underlying securities or foreign currencies to
the extent of any unrecognized gains on related positions held by such Fund and
the characterization of gains or losses as long-term or short-term may be
changed. The tax provisions described above applicable to options, futures and
forward contracts may affect the amount, timing and character of a Fund's
distributions to shareholders. Application of certain requirements for
qualification as a regulated investment company and/or these tax rules to
certain investment practices, such as dollar rolls, or certain derivatives such
as interest rate swaps, floors, caps and collars and currency, mortgage or index
swaps may be unclear in some respects, and a Fund may therefore be required to
limit its participation in such transactions. Certain tax elections may be
available to a Fund to mitigate some of the unfavorable consequences described
in this paragraph.

     Section 988 of the Code contains special tax rules applicable to certain
foreign currency transactions and instruments that may affect the amount, timing
and character of income, gain or loss recognized by a Fund. Under these rules,
foreign exchange gain or loss realized with respect to foreign currencies and
certain futures and options thereon, foreign currency-denominated debt
instruments, foreign currency forward contracts, and foreign currency-
denominated payables and receivables will generally be treated as ordinary
income or loss, although in some cases elections may be available that would
alter this treatment. If a net foreign exchange loss treated as ordinary loss
under Section 988 of the Code were to exceed a Fund's investment company taxable
income

                                     B-69


(computed without regard to such loss) for a taxable year, the resulting loss
would not be deductible by the Fund or its shareholders in future years. Net
loss, if any, from certain foregoing currency transactions or instruments could
exceed net investment income otherwise calculated for accounting purposes with
the result being either no dividends being paid or a portion of a Fund's
dividends being treated as a return of capital for tax purposes, nontaxable to
the extent of a shareholder's tax basis in his shares and, once such basis is
exhausted, generally giving rise to capital gains.

     A Fund's investment in zero coupon securities, deferred interest
securities, certain structured securities or other securities bearing original
issue discount or, if a Fund elects to include market discount in income
currently, market discount, as well as any "mark to market" gain from certain
options, futures or forward contracts, as described above, will generally cause
it to realize income or gain prior to the receipt of cash payments with respect
to these securities or contracts. In order to obtain cash to enable it to
distribute this income or gain, maintain its qualification as a regulated
investment company and avoid federal income or excise taxes, the Fund may be
required to liquidate portfolio securities that it might otherwise have
continued to hold.

     Each Fund anticipates that it will be subject to foreign taxes on its
income (possibly including, in some cases, capital gains) from foreign
securities. Tax conventions between certain countries and the U.S. may reduce or
eliminate such taxes in some cases. If more than 50% of a Fund's total assets at
the close of any taxable year consists of stock or securities of foreign
corporations, the Fund may file an election with the Internal Revenue Service
pursuant to which shareholders of the Fund would be required to (i) include in
ordinary gross income (in addition to taxable dividends actually received) their
pro rata shares of foreign income taxes paid by the Fund that are treated as
income taxes under U.S. tax regulations (which excludes, for example, stamp
taxes, securities transaction taxes, and similar taxes) even though not actually
received by such shareholders, and (ii) treat such respective pro rata portions
as foreign income taxes paid by them.

     If a Fund makes this election, its respective shareholders may then deduct
such pro rata portions of qualified foreign taxes in computing their taxable
incomes, or, alternatively, use them as foreign tax credits, subject to
applicable limitations, against their U.S. federal income taxes. Shareholders
who do not itemize deductions for federal income tax purposes will not, however,
be able to deduct their pro rata portion of foreign taxes paid by a Fund,
although such shareholders will be required to include their shares of such
taxes in gross income if the election is made.

     If a shareholder chooses to take credit for the foreign taxes deemed paid
by such shareholder as a result of any such election by a Fund, the amount of
the credit that may be claimed in any year may not exceed the same proportion of
the U.S. tax against which such credit is taken which the shareholder's taxable
income from foreign sources (but not in excess of the shareholder's entire
taxable income) bears to his entire taxable income. For this purpose,
distributions from long-term and short-term capital gains or foreign currency
gains by a Fund will generally not be treated as income from foreign sources.
This foreign tax credit limitation may also be applied separately to certain
specific categories of foreign-source income and the related foreign taxes. As a
result of these rules, which have different effects depending upon each
shareholder's particular tax situation,

                                     B-70


certain shareholders of the Funds may not be able to claim a credit for the full
amount of their proportionate share of the foreign taxes paid by such Fund even
if the election is made by such a Fund.

     Shareholders who are not liable for U.S. federal income taxes, including
tax-exempt shareholders, will ordinarily not benefit from this election. Each
year, if any, that a Fund files the election described above, its shareholders
will be notified of the amount of (i) each shareholder's pro rata share of
qualified foreign taxes paid by a Fund and (ii) the portion of Fund dividends
which represents income from each foreign country. If a Fund cannot or does not
make this election, it may deduct such taxes in computing the amount it is
required to distribute.

     If a Fund acquires stock (including, under proposed regulations, an option
to acquire stock such as is inherent in a convertible bond) in certain foreign
corporations that receive at least 75% of their annual gross income from passive
sources (such as interest, dividends, rents, royalties or capital gain) or hold
at least 50% of their assets in investments producing such passive income
("passive foreign investment companies"), the Fund could be subject to federal
income tax and additional interest charges on "excess distributions" received
from such companies or gain from the sale of stock in such companies, even if
all income or gain actually received by the Fund is timely distributed to its
shareholders. The Fund would not be able to pass through to its shareholders any
credit or deduction for such a tax. In some cases, elections may be available
that would ameliorate these adverse tax consequences, but such elections would
require the Fund to include each year certain amounts as income or gain (subject
to the distribution requirements described above) without a concurrent receipt
of cash. Each Fund may limit and/or manage its holdings in passive foreign
investment companies to minimize its tax liability or maximize its return from
these investments.

     Investments in lower-rated securities may present special tax issues for a
Fund to the extent actual or anticipated defaults may be more likely with
respect to such securities. Tax rules are not entirely clear about issues such
as when a Fund may cease to accrue interest, original issue discount, or market
discount; when and to what extent deductions may be taken for bad debts or
worthless securities; how payments received on obligations in default should be
allocated between principal and income; and whether exchanges of debt
obligations in a workout context are taxable. These and other issues will be
addressed by a Fund, in the event it invests in such securities, in order to
seek to eliminate or minimize any adverse tax consequences.

Taxable U.S. Shareholders - Distributions
-----------------------------------------

     For U.S. federal income tax purposes, distributions by a Fund, whether
reinvested in additional shares or paid in cash, generally will be taxable to
shareholders who are subject to tax. Shareholders receiving a distribution in
the form of newly issued shares will be treated for U.S. federal income tax
purposes as receiving a distribution in an amount equal to the amount of cash
they would have received had they elected to receive cash and will have a cost
basis in each share received equal to such amount divided by the number of
shares received.

                                     B-71


     Distributions from investment company taxable income for the year will be
taxable as ordinary income unless a shareholder's investment is in an IRA or
other tax-advantage account. Distributions designated as derived from a Fund's
dividend income, if any, that would be eligible for the dividends received
deduction if such Fund were not a regulated investment company may be eligible,
for the dividends received deduction for corporate shareholders. The dividends-
received deduction, if available, is reduced to the extent the shares with
respect to which the dividends are received are treated as debt-financed under
federal income tax law and is eliminated if the shares are deemed to have been
held for less than a minimum period, generally 46 days. Because eligible
dividends are limited to those a Fund receives from U.S. domestic corporations,
it is possible that a substantial portion of the distributions made by a Fund
will not qualify for the dividends-received deduction. The entire dividend,
including the deducted amount, is considered in determining the excess, if any,
of a corporate shareholder's adjusted current earnings over its alternative
minimum taxable income, which may increase its liability for the federal
alternative minimum tax, and the dividend may, if it is treated as an
"extraordinary dividend" under the Code, reduce such shareholder's tax basis in
its shares of a Fund. Capital gain dividends (i.e., dividends from net capital
gain) if designated as such in a written notice to shareholders mailed not later
than 60 days after a Fund's taxable year closes, will be taxed to shareholders
as long-term capital gain regardless of how long shares have been held by
shareholders, but are not eligible for the dividends received deduction for
corporations. Such long-term capital gain will be taxed at a maximum rate of 20%
(10% for those shareholders in the 15% tax bracket). In addition, any long-term
gain distributions related to assets held for more than five years and sold
after December 31, 2000 will be taxed at a maximum rate of 8% for those
shareholders in the 15% tax bracket. For taxpayers in higher tax brackets, the
capital gains tax rate will be reduced from 20% to 18% for long-term gain
distributions related to assets acquired after December 31, 2000 and held for
more than five years. Distributions, if any, that are in excess of a Fund's
current and accumulated earnings and profits will first reduce a shareholder's
tax basis in his shares and, after such basis is reduced to zero, will generally
constitute capital gains to a shareholder who holds his shares as capital
assets.

     Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions, and certain prohibited transactions is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.

Taxable U.S. Shareholders - Sale of Shares
------------------------------------------

     When a shareholder's shares are sold, redeemed or otherwise disposed of in
a transaction that is treated as a sale for tax purposes, the shareholder will
generally recognize gain or loss equal to the difference between the
shareholder's adjusted tax basis in the shares and the cash, or fair market
value of any property, received. (To aid in computing its tax basis, a
shareholder should generally retain its account statement for the period that it
held shares). If the shareholder holds the shares as a capital asset at the time
of sale, the character of the gain or loss should be capital, and treated as
long-term if the shareholder's holding period is more than one year, and short-
term otherwise. In general, the maximum long-term capital gain rate will be 20%
for capital gains on assets held more than one year (10% for those shareholders
in the 15% tax bracket). In addition,

                                     B-72


gains related to the sale of shares held for more than five years and sold after
December 31, 2000 will be taxed at a maximum rate of 8% for those shareholders
in the 15% tax bracket. For shareholders in higher tax brackets, the capital
gains tax rate will be reduced from 20% to 18% for any shares acquired after
December 31, 2000 (or marked-to-market at the beginning of 2001) and held for
more than five years. Shareholders should consult their own tax advisers with
reference to their particular circumstances to determine whether a redemption
(including an exchange) or other disposition of Fund shares is properly treated
as a sale for tax purposes, as is assumed in this discussion. If a shareholder
receives a capital gain dividend with respect to shares and such shares have a
tax holding period of six months or less at the time of a sale or redemption of
such shares, then any loss the shareholder realizes on the sale or redemption
will be treated as a long-term capital loss to the extent of such capital gain
dividend. All or a portion of any sales load paid upon the purchase of shares of
a Fund will not be taken into account in determining gain or loss on the
redemption or exchange of such shares within 90 days after their purchase to the
extent the redemption proceeds are reinvested, or the exchange is effected,
without payment of an additional sales load pursuant to the reinvestment or
exchange privilege. The load not taken into account will be added to the tax
basis of the newly-acquired shares. Additionally, any loss realized on a sale or
redemption of shares of a Fund may be disallowed under "wash sale" rules to the
extent the shares disposed of are replaced with other shares of the same Fund
within a period of 61 days beginning 30 days before and ending 30 days after the
shares are disposed of, such as pursuant to a dividend reinvestment in shares of
such Fund. If disallowed, the loss will be reflected in an adjustment to the
basis of the shares acquired.

     Each Fund may be required to withhold, as "backup withholding," federal
income tax at a rate of 31% from dividends (including capital gain dividends)
and share redemption and exchange proceeds to individuals and other non-exempt
shareholders who fail to furnish such Fund with a correct taxpayer
identification number ("TIN") certified under penalties of perjury, or if the
Internal Revenue Service or a broker notifies the Fund that the payee is subject
to backup withholding as a result of failing to properly report interest or
dividend income to the Internal Revenue Service or that the TIN furnished by the
payee to the Fund is incorrect, or if (when required to do so) the payee fails
to certify under penalties of perjury that it is not subject to backup
withholding. A Fund may refuse to accept an application that does not contain
any required TIN or certification that the TIN provided is correct. If the
backup withholding provisions are applicable, any such dividends and proceeds,
whether paid in cash or reinvested in additional shares, will be reduced by the
amounts required to be withheld. Any amounts withheld may be credited against a
shareholder's U.S. federal income tax liability. If a shareholder does not have
a TIN, it should apply for one immediately by contacting your local office of
the Social Security Administration or the Internal Revenue Service (IRS). Backup
withholding could apply to payments relating to a shareholder's account while it
is waiting receipt of a TIN. Special rules apply for certain entities. For
example, for an account established under a Uniform Gifts or Transfer to Minors
Act, the TIN of the minor should be furnished.

                                     B-73


Non-U.S. Shareholders
---------------------

     The discussion above relates solely to U.S. federal income tax law as it
applies to "U.S. persons" subject to tax under such law. Shareholders who, as to
the United States, are not "U.S. persons," (i.e., are nonresident aliens,
foreign corporations, fiduciaries of foreign trusts or estates, foreign
partnerships or other non-U.S. investors) generally will be subject to U.S.
federal withholding tax at the rate of 30% on distributions treated as ordinary
income unless the tax is reduced or eliminated pursuant to a tax treaty or the
dividends are effectively connected with a U.S. trade or business of the
shareholder. In the latter case the dividends will be subject to tax on a net
income basis at the graduated rates applicable to U.S. individuals or domestic
corporations. Distributions of net capital gain, including amounts retained by a
Fund which are designated as undistributed capital gains, to a non-U.S.
shareholder will not be subject to U.S. federal income or withholding tax unless
the distributions are effectively connected with the shareholder's trade or
business in the United States or, in the case of a shareholder who is a
nonresident alien individual, the shareholder is present in the United States
for 183 days or more during the taxable year and certain other conditions are
met. Non-U.S. shareholders may also be subject to U.S. federal withholding tax
on deemed income resulting from any election by a Fund to treat qualified
foreign taxes it pays as passed through to shareholders (as described above),
but they may not be able to claim a U.S. tax credit or deduction with respect to
such taxes.

     Any capital gain realized by a non-U.S. shareholder upon a sale or
redemption of shares of a Fund will not be subject to U.S. federal income or
withholding tax unless the gain is effectively connected with the shareholder's
trade or business in the U.S., or in the case of a shareholder who is a
nonresident alien individual, the shareholder is present in the U.S. for 183
days or more during the taxable year and certain other conditions are met.

     Non-U.S. persons who fail to furnish a Fund with the proper IRS Form W-8
(i.e., W-8 BCN, W-8 ECI, W-8 IMY or W-8 EXI) or an acceptable substitute may be
subject to backup withholding at the rate of 31% on capital gain dividends and
the proceeds of redemptions and exchanges.  Also, non-U.S. shareholders may be
subject to estate tax.  Each shareholder who is not a U.S. person should consult
his or her tax adviser regarding the U.S. and non-U.S. tax consequences of
ownership of shares of and receipt of distributions from the Funds.

State and Local
---------------

     Each Fund may be subject to state or local taxes in jurisdictions in which
such Fund may be deemed to be doing business.  In addition, in those states or
localities which have income tax laws, the treatment of such Fund and its
shareholders under such laws may differ from their treatment under federal
income tax laws, and investment in such Fund may have tax consequences for
shareholders different from those of a direct investment in such Fund's
portfolio securities. Shareholders should consult their own tax advisers
concerning these matters.

                                     B-74


                               OTHER INFORMATION

     Each Fund will redeem shares solely in cash up to the lesser of $250,000 or
1% of the net asset value of the Fund during any 90-day period for any one
shareholder. Each Fund, however, reserves the right to pay redemptions exceeding
$250,000 or 1% of the net asset value at the time of the redemption by a
distribution in kind of securities (instead of cash) from such Fund. The
securities distributed in kind would be readily marketable and would be valued
for this purpose using the same method employed in calculating the Fund's net
asset value per share. See "Net Asset Value." If a shareholder receives
redemption proceeds in kind, the shareholder should expect to incur transaction
costs upon the disposition of the securities received in the redemption.

     The right of a shareholder to redeem shares and the date of payment by each
Fund may be suspended for more than seven days for any period during which the
New York Stock Exchange is closed, other than the customary weekends or
holidays, or when trading on such Exchange is restricted as determined by the
SEC; or during any emergency, as determined by the SEC, as a result of which it
is not reasonably practicable for such Fund to dispose of securities owned by it
or fairly to determine the value of its net assets; or for such other period as
the SEC may by order permit for the protection of shareholders of such Fund.
(The Trust may also suspend or postpone the recommendation of the transfer of
shares upon the occurrence of any of the foregoing conditions).

     As stated in the Prospectuses, the Trust may authorize Service
Organizations and other institutions that provide recordkeeping, reporting and
processing services to their customers to accept on the Trust's behalf purchase,
redemption and exchange orders placed by or on behalf of their customers and, if
approved by the Trust, to designate other intermediaries to accept such orders.
These institutions may receive payments from the Trust or Goldman Sachs for
their services.  Certain Service Organizations or institutions may enter into
sub-transfer agency agreements with the Trust or Goldman Sachs with respect to
their services.

     The Investment Adviser, Distributor and/or their affiliates may pay, out of
their own assets, compensation to Authorized Dealers, Service Organizations and
other financial intermediaries ("Intermediaries") for the sale and distribution
of Shares of the Funds and/or for the servicing of those shares.  These payments
("Additional Payments") would be in addition to the payments by the Funds
described in the Funds' Prospectus and this Additional Statement for
distribution and shareholder servicing and processing, and would also be in
addition to the sales commissions payable to Intermediaries as set forth in the
Prospectus.  These Additional Payments may take the form of "due diligence"
payments for an Intermediary's examination of the Funds and payments for
providing extra employee training and information relating to the Funds;
"listing" fees for the placement of the Funds on an Intermediary's list of
mutual funds available for purchase by its customers; "finders" or "referral"
fees for directing investors to the Funds; "marketing support" fees for
providing assistance in promoting the sale of the Funds' shares; and payments
for the sale of shares and/or the maintenance of share balances.  In addition,
the Investment Adviser, Distributor and/or their affiliates may make Additional
Payments for subaccounting, administrative and/or shareholder processing
services that are in addition to the shareholder servicing and

                                     B-75


processing fees paid by the Funds. The Additional Payments made by the
Investment Adviser, Distributor and their affiliates may be a fixed dollar
amount, may be based on the number of customer accounts maintained by an
Intermediary, or may be based on a percentage of the value of shares sold to, or
held by, customers of the Intermediary involved, and may be different for
different Intermediaries. Furthermore, the Investment Adviser, Distributor
and/or their affiliates may, to the extent permitted by applicable regulations,
contribute to various non-cash and cash incentive arrangements to promote the
sale of shares, as well as sponsor various educational programs, sales contests
and/or promotions. The Investment Adviser, Distributor and their affiliates may
also pay for the travel expenses, meals, lodging and entertainment of
Intermediaries and their salespersons and guests in connection with educational,
sales and promotional programs subject to applicable NASD regulations.

     In the interest of economy and convenience, the Trust does not issue
certificates representing the Funds' shares. Instead, the Transfer Agent
maintains a record of each shareholder's ownership. Each shareholder receives
confirmation of purchase and redemption orders from the Transfer Agent. Fund
shares and any dividends and distributions paid by the Funds are reflected in
account statements from the Transfer Agent.

     The Prospectuses and this Additional Statement do not contain all the
information included in the Registration Statement filed with the SEC under the
1933 Act with respect to the securities offered by the Prospectuses.  Certain
portions of the Registration Statement have been omitted from the Prospectuses
and this Additional Statement pursuant to the rules and regulations of the SEC.
The Registration Statement including the exhibits filed therewith may be
examined at the office of the SEC in Washington, D.C.

     Statements contained in the Prospectuses or in this Additional Statement as
to the contents of any contract or other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement of which the Prospectuses and this Additional Statement form a part,
each such statement being qualified in all respects by such reference.

                                     B-76


                        DISTRIBUTION AND SERVICE PLANS
           (Class A Shares, Class B Shares and Class C Shares Only)

     Distribution and Service Plans.  As described in the Prospectus, the Trust
has adopted, on behalf of the Class A, Class B and Class C Shares of each Fund,
distribution and service plans (each a "Plan") pursuant to Rule 12b-1 under the
Act.  See "Shareholder Services" in the Prospectus.

     The Plans for each Fund were initially approved on _______, 2001 by a
majority vote of the Trustees of the Trust, including a majority of the non-
interested Trustees of the Trust who have no direct or indirect financial
interest in the Plans, cast in person at a meeting called for the purpose of
approving the Plans.

     The compensation for distribution services payable under a Plan may not
exceed 0.25%, 0.75% and 0.75%, per annum of a Fund's average daily net assets
attributable to Class A, Class B and Class C Shares, respectively.  Under the
Plans for Class A, Class B and Class C Shares, Goldman Sachs is also entitled to
received a separate fee for personal and account maintenance services equal to
an annual basis of 0.25% of a Fund's average daily net assets attributable to
Class A, Class B or Class C Shares.  With respect to Class A Shares, the
Distributor at its discretion may use compensation for distribution services
paid under the Plan for personal and account maintenance services and expenses
so long as such total compensation under the Plan does not exceed the maximum
cap on "service fees" imposed by the NASD.

     Each Plan is a compensation plan which provides for the payment of a
specified fee without regard to the expenses actually incurred by Goldman Sachs.
If such fee exceeds Goldman Sachs' expenses, Goldman Sachs may realize a profit
from these arrangements.  The distribution fees received by Goldman Sachs under
the Plans and contingent deferred sales charge on Class A, Class B and Class C
Shares may be sold by Goldman Sachs as distributor to entities which provide
financing for payments to Authorized Dealers in respect of sales of Class A,
Class B and Class C Shares.  To the extent such fees are not paid to such
dealers, Goldman Sachs may retain such fee as compensation for its services and
expenses of distributing the Fund's Class A, Class B and Class C Shares.

     Under each Plan, Goldman Sachs, as distributor of each Fund's Class A,
Class B and Class C Shares, will provide to the Trustees of the Trust for their
review, and the Trustees of the Trust will review at least quarterly, a written
report of the services provided and amounts expended by Goldman Sachs under the
Plans and the purposes for which such services were performed and expenditures
were made.

     The Plans will remain in effect until______, 2001 and from year to year
thereafter, provided that such continuance is approved annually by a majority
vote of the Trustees of the Trust, including a majority of the non-interested
Trustees of the Trust who have no direct or indirect financial interest in the
Plans. The Plans may not be amended to increase materially the amount of
distribution compensation without approval of a majority of the outstanding
Class A, Class B or

                                      B-77


Class C Shares of the affected Fund and share class. All material amendments of
a Plan must also be approved by the Trustees of the Trust in the manner
described above. A Plan may be terminated at any time without payment of any
penalty by a vote of a majority of the non-interested Trustees of the Trust or
by vote of a majority of the Class A, Class B or Class C Shares, respectively,
of the affected Fund and share class. If a Plan was terminated by the Trustees
of the Trust and no successor plan was adopted, the Funds would cease to make
payments to Goldman Sachs under the Plan and Goldman Sachs would be unable to
recover the amount of any of its unreimbursed expenditures. So long as a Plan is
in effect, the selection and nomination of non-interested Trustees of the Trust
will be committed to the discretion of the non-interested Trustees of the Trust.
The Trustees of the Trust have determined that in their judgment there is a
reasonable likelihood that the Plans will benefit the Funds and its Class A,
Class B and Class C Shareholders. As of the date of this Additional Statement,
no shares of the Funds had been offered and, accordingly, the Funds paid no fees
pursuant to the Plans. As of the date of this Additional Statement, Goldman
Sachs incurred no expenses in connection with distribution under the Plans with
respect to the Funds.

   OTHER INFORMATION REGARDING MAXIMUM SALES CHARGE, PURCHASES, REDEMPTIONS,
                            EXCHANGES AND DIVIDENDS
           (Class A Shares, Class B Shares and Class C Shares Only)

Maximum Sales Charges
---------------------

     Class A Shares of each Fund are sold at a maximum sales charge of 5.5%.
Assuming a $10.00 initial offering price per share with respect to the Funds,
the maximum offering price of each Fund's Class A shares would be as follows:
Net Asset Value, $10.00; Maximum Sales Charge, 5.5%; Offering Price to Public,
$10.55.

     The following information supplements the information in the Prospectus
under the captions "Shareholder Guide" and "Dividends."  Please see the
Prospectus for more complete information.

Other Purchase Information
--------------------------

     If shares of a Fund are held in a "street name" account with an Authorized
Dealer, all recordkeeping, transaction processing and payments of distributions
relating to the beneficial owner's account will be performed by the Authorized
Dealer, and not by the Fund and its Transfer Agent. Since the Funds will have no
record of the beneficial owner's transactions, a beneficial owner should contact
the Authorized Dealer to purchase, redeem or exchange shares, to make changes in
or give instructions concerning the account or to obtain information about the
account.  The transfer of shares in a "street name" account to an account with
another dealer or to an account directly with the Fund involves special
procedures and will require the beneficial owner to obtain historical purchase
information about the shares in the account from the Authorized Dealer.

                                      B-78


Right of Accumulation (Class A)
-------------------------------

     A Class A shareholder qualifies for cumulative quantity discounts if the
current purchase price of the new investment plus the shareholder's current
holdings of existing Class A Shares (acquired by purchase or exchange) of a Fund
and Class A Shares of any other Goldman Sachs Fund (as defined in the
Prospectus) total the requisite amount for receiving a discount. For example, if
a shareholder owns shares with a current market value of $65,000 and purchases
additional Class A Shares of any Goldman Sachs Fund with a purchase price of
$45,000, the sales charge for the $45,000 purchase would be 3.75% (the rate
applicable to a single purchase of $100,000 or more). Class A Shares purchased
without the imposition of a sales charge may not be aggregated with Class A
Shares purchased subject to a sales charge. Class A Shares of the Funds and any
other Goldman Sachs Fund purchased (i) by an individual, his spouse and his
children, and (ii) by a trustee, guardian or other fiduciary of a single trust
estate or a single fiduciary account, will be combined for the purpose of
determining whether a purchase will qualify for such right of accumulation and,
if qualifying, the applicable sales charge level. For purposes of applying the
right of accumulation, (i) shares of the Funds and any other Goldman Sachs Fund
purchased by an existing client of the Private Client Services Division of
Goldman Sachs will be combined with Class A Shares held by all other Private
Client Services accounts, and (ii) shares of the Funds and any other Goldman
Sachs Fund purchased by an existing client of Goldman.com will be combined with
Class A Shares and other assets held in the client's Goldman.com acount. In
addition, Class A Shares of the Funds and Class A Shares of any other Goldman
Sachs Fund purchased by partners, directors, officers or employees of the same
business organization, groups of individuals represented by and investing on the
recommendation of the same accounting firm, certain affinity groups or other
similar organizations (collectively, "eligible persons") may be combined for the
purpose of determining whether a purchase will qualify for the right of
accumulation and, if qualifying, the applicable sales charge level. This right
of accumulation is subject to the following conditions: (i) the business
organization's, group's or firm's agreement to cooperate in the offering of the
Fund's shares to eligible persons; and (ii) notification to the relevant Fund at
the time of purchase that the investor is eligible for this right of
accumulation. In addition, in connection with SIMPLE IRA accounts, cumulative
quantity discounts are available on a per plan basis if (i) your employee has
been assigned a cumulative discount number by Goldman Sachs, and (ii) your
account, alone or in combination with the accounts of other plan participants
also invested in Class A Shares of Goldman Sachs Funds, totals the requisite
aggregate amount as described in the Prospectus.

Statement of Intention (Class A)
--------------------------------

     If a shareholder anticipates purchasing at least $50,000 of Class A Shares
of a Fund alone or in combination with Class A Shares of any other Goldman Sachs
Fund within a 13-month period, the shareholder may purchase shares of the Fund
at a reduced sales charge by submitting a Statement of Intention (the
"Statement").  Shares purchased pursuant to a Statement will be eligible for the
same sales charge discount that would have been available if all of the
purchases had been made at the same time.  The shareholder or his Authorized
Dealer must inform Goldman Sachs that the Statement is in effect each time
shares are purchased.  There is no obligation to purchase the full

                                      B-79


amount of shares indicated in the Statement. A shareholder may include the value
of all Class A Shares on which a sales charge has previously been paid as an
"accumulation credit" toward the completion of the Statement, but a price
readjustment will be made only on Class A Shares purchased within ninety (90)
days before submitting the Statement. The Statement authorizes the Transfer
Agent to hold in escrow a sufficient number of shares which can be redeemed to
make up any difference in the sales charge on the amount actually invested. For
purposes of satisfying the amount specified on the Statement, the gross amount
of each investment, exclusive of any appreciation on shares previously
purchased, will be taken into account.

     The provisions applicable to the Statement, and the terms of the related
escrow agreement, are set forth in Appendix C to this Additional Statement.

Cross-Reinvestment of Dividends and Distributions
-------------------------------------------------

     Shareholders may receive dividends and distributions in additional shares
of the same class of a Fund or they may elect to receive them in cash or shares
of the same class of other Goldman Sachs Funds or ILA Service Units of the Prime
Obligations Fund or the Tax-Exempt Diversified Fund, if they hold Class A Shares
of a Fund, or ILA, Class B or Class C Units of the Prime Obligations Fund, if
they hold Class B or Class C Shares of a Fund (the "ILA Funds").

     A Fund shareholder should obtain and read the prospectus relating to any
other Goldman Sachs Fund or ILA Fund and its shares or units and consider its
investment objective, policies and applicable fees before electing cross-
reinvestment into that Fund or Portfolio  The election to cross-reinvest
dividends and capital gain distributions will not affect the tax treatment of
such dividends and distributions, which will be treated as received by the
shareholder and then used to purchase shares of the acquired fund.  Such
reinvestment of dividends and distributions in shares of other Goldman Sachs
Funds or in units of ILA Funds is available only in states where such
reinvestment may legally be made.

Automatic Exchange Program
--------------------------

     A Fund shareholder may elect to exchange automatically a specified dollar
amount of shares of a Fund into an identical account of another Goldman Sachs
Fund or an account registered in a different name or with a different address,
social security or other taxpayer identification number, provided that the
account in the acquired fund has been established, appropriate signatures have
been obtained and the minimum initial investment requirement has been satisfied.
A Fund shareholder should obtain and read the prospectus relating to any other
Goldman Sachs Fund and its shares and consider its investment objective,
policies and applicable fees and expenses before electing an automatic exchange
into that Goldman Sachs Fund.

                                      B-80


Systematic Withdrawal Plan
--------------------------

     A systematic withdrawal plan (the "Systematic Withdrawal Plan") is
available to shareholders of a Fund whose shares are worth at least $5,000.  The
Systematic Withdrawal Plan provides for monthly payments to the participating
shareholder of any amount not less than $50.

     Dividends and capital gain distributions on shares held under the
Systematic Withdrawal Plan are reinvested in additional full and fractional
shares of a Fund at net asset value.  The Transfer Agent acts as agent for the
shareholder in redeeming sufficient full and fractional shares to provide the
amount of the systematic withdrawal payment.  The Systematic Withdrawal Plan may
be terminated at any time.  Goldman Sachs reserves the right to initiate a fee
of up to $5 per withdrawal, upon thirty (30) days written notice to the
shareholder.  Withdrawal payments should not be considered to be dividends,
yield or income.  If periodic withdrawals continuously exceed new purchases and
reinvested dividends and capital gains distributions, the shareholder's original
investment will be correspondingly reduced and ultimately exhausted.  The
maintenance of a withdrawal plan concurrently with purchases of additional Class
A, Class B or Class C Shares would be disadvantageous because of the sales
charge imposed on purchases of Class A Shares or the imposition of a CDSC on
redemptions of Class A, Class B or Class C Shares.  The CDSC applicable to Class
A, Class B or Class C Shares redeemed under a systematic withdrawal plan may be
waived. See "Shareholder Guide" in the Prospectus.  In addition, each withdrawal
constitutes a redemption of shares, and any gain or loss realized must be
reported for federal and state income tax purposes. A shareholder should consult
his or her own tax adviser with regard to the tax consequences of participating
in the Systematic Withdrawal Plan.  For further information or to request a
Systematic Withdrawal Plan, please write or call the Transfer Agent.


                                 SERVICE PLAN
                             (Service Shares Only)

     The Funds have adopted a service plan (the "Plan") with respect to their
Service Shares which authorizes the Funds to compensate Service Organizations
for providing certain administration services and personal and account
maintenance services to their customers who are or may become beneficial owners
of such shares.  Pursuant to the Plan, each Fund enters into agreements with
Service Organizations which purchase Service Shares of the Fund on behalf of
their customers ("Service Agreements").  Under such Service Agreements the
Service Organizations may perform some or all of the following services:  (a)
act, directly or through an agent, as the sole shareholder of record and nominee
for all customers; (b) maintain account records for each customer who
beneficially owns Service Shares of a Fund; (c) answer questions and handle
correspondence from customers regarding their accounts; (d) process customer
orders to purchase, redeem and exchange Service Shares of a Fund, and handle the
transmission of funds representing the customers' purchase price or redemption
proceeds; (e) issue confirmations for transactions in shares by customers; (f)
provide facilities to answer questions from prospective and existing investors
about Service Shares of a Fund; (g) receive and answer investor correspondence,
including requests for prospectuses and statements of additional information;
(h) display and make

                                      B-81


prospectuses available on the Service Organization's premises; (i) assist
customers in completing application forms, selecting dividend and other account
options and opening custody accounts with the Service Organization; and (j) act
as liaison between customers and a Fund, including obtaining information from
the Fund, working with the Fund to correct errors and resolve problems and
providing statistical and other information to the Fund. As compensation for
such services, each Fund will pay each Service Organization a service fee in an
amount up to 0.50% (on an annualized basis) of the average daily net assets of
the Service Shares of the Fund attributable to or held in the name of such
Service Organization; provided, however, that the fee paid for personal and
account maintenance services shall not exceed .25% of such average daily net
assets. As of the date of this Additional Statement, no shares of the Funds had
been offered and, accordingly, no fees were paid to Service Organizations
pursuant to the Plan.

     The Funds have adopted the Plan pursuant to Rule 12b-1 under the Act in
order to avoid any possibility that payments to the Service Organizations
pursuant to the Service Agreements might violate the Act.  Rule 12b-1, which was
adopted by the SEC under the Act, regulates the circumstances under which an
investment company or series thereof may bear expenses associated with the
distribution of its shares.  In particular, such an investment company or series
thereof cannot engage directly or indirectly in financing any activity which is
primarily intended to result in the sale of shares issued by the company unless
it has adopted a plan pursuant to, and complies with the other requirements of,
such Rule.  The Trust believes that fees paid for the services provided in the
Plan and described above are not expenses incurred primarily for effecting the
distribution of Service Shares.  However, should such payments be deemed by a
court or the SEC to be distribution expenses, such payments would be duly
authorized by the Plan.

     Conflict of interest restrictions (including the Employee Retirement Income
Security Act of 1974) may apply to a Service Organization's receipt of
compensation paid by a Fund in connection with the investment of fiduciary
assets in Service Shares.  Service Organizations, including banks regulated by
the Comptroller of the Currency, the Federal Reserve Board or the Federal
Deposit Insurance Corporation, and investment advisers and other money managers
subject to the jurisdiction of the SEC, the Department of Labor or state
securities commissions, are urged to consult their legal advisers before
investing fiduciary assets in Service Shares.  In addition, under some state
securities laws, banks and other financial institutions purchasing Service
Shares on behalf of their customers may be required to register as dealers.

     The Trustees, including a majority of the Trustees who are not interested
persons of the Trust and who have no direct or indirect financial interest in
the operation of the Plan or the related Service Agreements, initially voted to
approve the Plan and related Service Agreements with respect to the Funds at a
meeting called for the purpose of voting on such Plan and Service Agreements on
________, 2001.  The Plan and related Service Agreements will remain in effect
until _____, 2001 and will continue in effect thereafter only if such
continuance is specifically approved annually by a vote of the Trustees in the
manner described above.  The Plan may not be amended to increase materially the
amount to be spent for the services described therein without approval of the
Service Shareholders of the affected Fund and all material amendments of the
Plan must also be approved by the Trustees in the manner described above.  The
Plan may be terminated

                                      B-82


at any time by a majority of the Trustees as described above or by a vote of a
majority of the affected Fund's outstanding Service Shares. The Service
Agreements may be terminated at any time, without payment of any penalty, by
vote of a majority of the Trustees as described above or by a vote of a majority
of the affected Fund's outstanding Service Shares on not more than sixty (60)
days' written notice to any other party to the Service Agreements. The Service
Agreements will terminate automatically if assigned. So long as the Plan is in
effect, the selection and nomination of those Trustees who are not interested
persons will be committed to the discretion of the non-interested Trustees. The
Trustees have determined that, in their judgment, there is a reasonable
likelihood that the Plan will benefit the Funds and the holders of Service
Shares.

                                      B-83


                                  APPENDIX A
                                  ----------

Commercial Paper Ratings
------------------------

     A Standard & Poor's commercial paper rating is a current opinion of the
creditworthiness of an obligor with respect to financial obligations having an
original maturity of no more than 365 days.  The following summarizes the rating
categories used by Standard and Poor's for commercial paper:

     "A-1" - Obligations are rated in the highest category indicating that the
obligor's capacity to meet its financial commitment on the obligation is strong.
Within this category, certain obligations are designated with a plus sign (+).
This indicates that the obligor's capacity to meet its financial commitment on
these obligations is extremely strong.

     "A-2" - Obligations are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.

     "A-3" - Obligations exhibit adequate protection parameters.  However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

     "B" - Obligations are regarded as having significant speculative
characteristics.  The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

     "C" - Obligations are currently vulnerable to nonpayment and are dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation.

     "D" - Obligations are in payment default.  The "D" rating category is used
when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period.  The "D" rating will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.

Local Currency and Foreign Currency Risks

     Country risk considerations are a standard part of Standard & Poor's
analysis for credit ratings on any issuer or issue.  Currency of repayment is a
key factor in this analysis.  An obligor's capacity to repay foreign obligations
may be lower than its capacity to repay

                                      1-A


obligations in its local currency due to the sovereign government's own
relatively lower capacity to repay external versus domestic debt. These
sovereign risk considerations are incorporated in the debt ratings assigned to
specific issues. Foreign currency issuer ratings are also distinguished from
local currency issuer ratings to identify those instances where sovereign risks
make them different for the same issuer.

     Moody's commercial paper ratings are opinions of the ability of issuers to
honor senior financial obligations and contracts.  These obligations have an
original maturity not exceeding one year, unless explicitly noted.  The
following summarizes the rating categories used by Moody's for commercial paper:

     "Prime-1" - Issuers (or supporting institutions) have a superior ability
for repayment of senior short-term debt obligations.  Prime-1 repayment ability
will often be evidenced by many of the following characteristics:  leading
market positions in well-established industries; high rates of return on funds
employed; conservative capitalization structure with moderate reliance on debt
and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.

     "Prime-2" - Issuers (or supporting institutions) have a strong ability for
repayment of senior short-term debt obligations.  This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation.  Capitalization characteristics, while still appropriate, may be more
affected by external conditions.  Ample alternate liquidity is maintained.

     "Prime-3" - Issuers (or supporting institutions) have an acceptable ability
for repayment of senior short-term debt obligations.  The effect of industry
characteristics and market compositions may be more pronounced.  Variability in
earnings and profitability may result in changes in the level of debt protection
measurements and may require relatively high financial leverage.  Adequate
alternate liquidity is maintained.

     "Not Prime" - Issuers do not fall within any of the Prime rating
categories.

     Fitch short-term ratings apply to debt obligations that have time horizons
of less than 12 months for most obligations, or up to three years for U.S.
public finance securities.  The following summarizes the rating categories used
by Fitch for short-term obligations:

     "F1" - Securities possess the highest credit quality.  This designation
indicates the strongest capacity for timely payment of financial commitments and
may have an added "+" to denote any exceptionally strong credit feature.

                                      2-A


     "F2" - Securities possess good credit quality.  This designation indicates
a satisfactory capacity for timely payment of financial commitments, but the
margin of safety is not as great as in the case of the higher ratings.

     "F3" - Securities possess fair credit quality.  This designation indicates
that the capacity for timely payment of financial commitments is adequate;
however, near-term adverse changes could result in a reduction to non-investment
grade.

     "B" - Securities possess speculative credit quality.  This designation
indicates minimal capacity for timely payment of financial commitments, plus
vulnerability to near-term adverse changes in financial and economic conditions.

     "C" - Securities possess high default risk.  This designation indicates a
capacity for meeting financial commitments which is solely reliant upon a
sustained, favorable business and economic environment.

     "D" - Securities are in actual or imminent payment default.

     Thomson Financial BankWatch short-term ratings assess the likelihood of an
untimely payment of principal and interest of debt instruments with original
maturities of one year or less. The following summarizes the ratings used by
Thomson Financial BankWatch:

     "TBW-1" - This designation represents Thomson Financial BankWatch's highest
category and indicates a very high likelihood that principal and interest will
be paid on a timely basis.

     "TBW-2" - This designation represents Thomson Financial BankWatch's second-
highest category and indicates that while the degree of safety regarding timely
repayment of principal and interest is strong, the relative degree of safety is
not as high as for issues rated "TBW-1."

     "TBW-3" - This designation represents Thomson Financial BankWatch's lowest
investment-grade category and indicates that while the obligation is more
susceptible to adverse developments (both internal and external) than those with
higher ratings, the capacity to service principal and interest in a timely
fashion is considered adequate.

     "TBW-4" - This designation represents Thomson Financial BankWatch's lowest
rating category and indicates that the obligation is regarded as non-investment
grade and therefore speculative.


Corporate and Municipal Long-Term Debt Ratings
----------------------------------------------

                                      3-A


     The following summarizes the ratings used by Standard & Poor's for
corporate and municipal debt:

     "AAA" - An obligation rated "AAA" has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.

     "AA" - An obligation rated "AA" differs from the highest rated obligations
only in small degree.  The obligor's capacity to meet its financial commitment
on the obligation is very strong.

     "A" - An obligation rated "A" is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher-rated categories.  However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

     "BBB" - An obligation rated "BBB" exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

     Obligations rated "BB," "B," "CCC," "CC" and "C" are regarded as having
significant speculative characteristics.  "BB" indicates the least degree of
speculation and "C" the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

     "BB" - An obligation rated "BB" is less vulnerable to nonpayment than other
speculative issues.  However, it faces major ongoing uncertainties or exposure
to adverse business, financial or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

     "B" - An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB", but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

     "CCC" - An obligation rated "CCC" is currently vulnerable to nonpayment,
and is dependent upon favorable business, financial and economic conditions for
the obligor to meet its financial commitment on the obligation.  In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

     "CC" - An obligation rated "CC" is currently highly vulnerable to
nonpayment.

     "C" - An obligation rated "C" is currently highly vulnerable to nonpayment.
The "C" rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action taken, but payments on this obligation are being
continued.

                                      4-A


     "D" - An obligation rated "D" is in payment default.  The "D" rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period.  The "D"
rating also will be used upon the filing of a bankruptcy petition or the taking
of a similar action if payments on an obligation are jeopardized.

     -  PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.

     -  "r" - The 'r' highlights obligations that Standard & Poor's believes
have significant noncredit risks. Examples of such obligations are securities
with principal or interest return indexed to equities, commodities, or
currencies; certain swaps and options; and interest-only and principal-only
mortgage securities. The absence of an 'r' symbol should not be taken as an
indication that an obligation will exhibit no volatility or variability in total
return.

     -  N.R.  Indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.


     The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:

     "Aaa" - Bonds are judged to be of the best quality.  They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged."  Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure.  While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

     "Aa" - Bonds are judged to be of high quality by all standards.  Together
with the "Aaa" group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in "Aaa" securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the long-
term risk appear somewhat larger than the "Aaa" securities.

     "A" - Bonds possess many favorable investment attributes and are to be
considered as upper-medium-grade obligations.  Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

     "Baa" - Bonds are considered as medium-grade obligations, (i.e., they are
neither highly protected nor poorly secured).  Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

                                      5-A


     "Ba" - Bonds are judged to have speculative elements; their future cannot
be considered as well-assured. Often the protection of interest and principal
payments may be very moderate, and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.

     "B" - Bonds generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

     "Caa " - Bonds are of poor standing. Such issues may be in default or there
may be present elements of danger with respect to principal or interest.

     "Ca" - Bonds represent obligations which are speculative in a high degree.
Such issues are often in default or have other marked shortcomings.

     "C" - Bonds are the lowest rated class of bonds, and issues so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing.

     Con. (...) - Bonds for which the security depends on the completion of some
act or the fulfillment of some condition are rated conditionally.  These are
bonds secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches.  The parenthetical rating denotes probable credit stature upon
completion of construction or elimination of the basis of the condition.

Note:  Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa".  The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of its generic rating category.


The following summarizes the ratings used by Fitch for corporate and municipal
bonds:

     "AAA" - Bonds considered to be investment grade and of the highest credit
quality.  These ratings denote the lowest expectation of credit risk and are
assigned only in case of exceptionally strong capacity for timely payment of
financial commitments.  This capacity is highly unlikely to be adversely
affected by foreseeable events.

     "AA" - Bonds considered to be investment grade and of very high credit
quality.  These ratings denote a very low expectation of credit risk and
indicate very strong capacity for timely payment of financial commitments.  This
capacity is not significantly vulnerable to foreseeable events.

                                      6-A


     "A" - Bonds considered to be investment grade and of high credit quality.
These ratings denote a low expectation of credit risk and indicate strong
capacity for timely payment of financial commitments.  This capacity may,
nevertheless, be more vulnerable to changes in circumstances or in economic
conditions than is the case for higher ratings.

     "BBB" - Bonds considered to be investment grade and of good credit quality.
These ratings denote that there is currently a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered adequate,
but adverse changes in circumstances and in economic conditions are more likely
to impair this capacity.  This is the lowest investment grade category.

     "BB" - Bonds considered to be speculative.  These ratings indicate that
there is a possibility of credit risk developing, particularly as the result of
adverse economic change over time; however, business or financial alternatives
may be available to allow financial commitments to be met. Securities rated in
this category are not investment grade.

     "B" - Bonds are considered highly speculative.  These ratings indicate that
significant credit risk is present, but a limited margin of safety remains.
Financial commitments are currently being met; however, capacity for continued
payment is contingent upon a sustained, favorable business and economic
environment.

     "CCC", "CC" and "C" - Bonds have high default risk.  Default is a real
possibility, and capacity for meeting financial commitments is solely reliant
upon sustained, favorable business or economic developments.  "CC" ratings
indicate that default of some kind appears probable, and "C" ratings signal
imminent default.

     "DDD," "DD" and "D" - Bonds are in default.  The ratings of obligations in
this category are based on their prospects for achieving partial or full
recovery in a reorganization or liquidation of the obligor.  While expected
recovery values are highly speculative and cannot be estimated with any
precision, the following serve as general guidelines.  "DDD" obligations have
the highest potential for recovery, around 90%-100% of outstanding amounts and
accrued interest.  "DD" indicates potential recoveries in the range of 50%-90%,
and "D" the lowest recovery potential, i.e., below 50%.

     Entities rated in this category have defaulted on some or all of their
obligations.  Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process.  Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.

     -  To provide more detailed indications of credit quality, the Fitch
ratings from and including "AA" to "CCC" may be modified by the addition of a
plus (+) or minus (-) sign to denote relative standing within these major rating
categories.

                                      7-A


     -  'NR' indicates the Fitch does not rate the issuer or issue in question.

     -  'Withdrawn': A rating is withdrawn when Fitch deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.

     -  RatingWatch: Ratings are placed on RatingWatch to notify investors that
there is a reasonable probability of a rating change and the likely direction of
such change.  These are designated as "Positive", indicating a potential
upgrade, "Negative", for a potential downgrade, or "Evolving", if ratings may be
raised, lowered or maintained.  RatingWatch is typically resolved over a
relatively short period.


     Thomson Financial BankWatch assesses the likelihood of an untimely
repayment of principal or interest over the term to maturity of long term debt
and preferred stock which are issued by United States commercial banks, thrifts
and non-bank banks; non-United States banks; and broker-dealers. The following
summarizes the rating categories used by Thomson BankWatch for long-term debt
ratings:

     "AAA" - This designation indicates that the ability to repay principal and
interest on a timely basis is extremely high.

     "AA" - This designation indicates a very strong ability to repay principal
and interest on a timely basis, with limited incremental risk compared to issues
rated in the highest category.

     "A" - This designation indicates that the ability to repay principal and
interest is strong. Issues rated "A" could be more vulnerable to adverse
developments (both internal and external) than obligations with higher ratings.

     "BBB" - This designation represents the lowest investment-grade category
and indicates an acceptable capacity to repay principal and interest.  Issues
rated "BBB" are more vulnerable to adverse developments (both internal and
external) than obligations with higher ratings.

     "BB," - A rating of BB suggests that the likelihood of default is
considerably less than for lower-rated issues, although there are significant
uncertainties that could affect the ability to adequately service debt
obligations.

     "B" - Issues rated B show a higher degree of uncertainty and therefore
greater likelihood of default than higher-rated issues.  Adverse developments
could negatively affect the payment of interest and principal on a timely basis.

     "CCC" - Issues rated CCC clearly have a high likelihood of default, with
little capacity to address further adverse changes in financial circumstances.

     "CC" - This rating is applied to issues that are subordinate to other
obligations rated CCC and are afforded less protection in the event of
bankruptcy or reorganization.

                                      8-A


     "D" - This designation indicates that the long-term debt is in default.

     PLUS (+) OR MINUS (-) - The ratings from "AAA" through "CC" may include a
plus or minus sign designation which indicates where within the respective
category the issue is placed.


Municipal Note Ratings
----------------------

     A Standard and Poor's note rating reflects the liquidity factors and market
access risks unique to notes due in three years or less.  The following
summarizes the ratings used by Standard & Poor's for municipal notes:

     "SP-1" - The issuers of these municipal notes exhibit a strong capacity to
pay principal and interest.  Those issues determined to possess a very strong
capacity to pay debt service are given a plus (+) designation.

     "SP-2" - The issuers of these municipal notes exhibit satisfactory capacity
to pay principal and interest, with some vulnerability to adverse financial and
economic changes over the term of the notes.

     "SP-3" - The issuers of these municipal notes exhibit speculative capacity
to pay principal and interest.


     Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade ("MIG") and variable rate demand
obligations are designated Variable Moody's Investment Grade ("VMIG").  Such
ratings recognize the differences between short-term credit risk and long-term
risk.  The following summarizes the ratings by Moody's Investors Service, Inc.
for short-term notes:

     "MIG-1"/"VMIG-1" - This designation denotes superior credit quality.
Excellent protection afforded by established cash flows, highly reliable
liquidity support or demonstrated broad-based access to the market for
refinancing.

     "MIG-2"/"VMIG-2" - This designation denotes strong credit quality.  Margins
of protection are ample although not so large as in the preceding group.

     "MIG-3"/"VMIG-3" - This designation denotes acceptable credit.  Liquidity
and cash flow protection may be narrow and market access for refinancing is
likely to be less well established.

     "SG" - This designation denotes speculative-grade credit quality.  Debt
instruments in this category lack sufficient margins of protection.

                                      9-A


     Fitch uses the short-term ratings described under Commercial Paper Ratings
for municipal notes.

                                      10-A


                                   APPENDIX B

                  BUSINESS PRINCIPLES OF GOLDMAN, SACHS & CO.

     Goldman Sachs is noted for its Business Principles, which guide all of the
firm's activities and serve as the basis for its distinguished reputation among
investors worldwide.

     Our client's interests always come first.  Our experience shows that if we
serve our clients well, our own success will follow.

     Our assets are our people, capital and reputation.  If any of these is ever
diminished, the last is the most difficult to restore.  We are dedicated to
complying fully with the letter and spirit of the laws, rules and ethical
principles that govern us.  Our continued success depends upon unswerving
adherence to this standard.

     We take great pride in the professional quality of our work. We have an
uncompromising determination to achieve excellence in everything we undertake.
Though we may be involved in a wide variety and heavy volume of activity, we
would, if it came to a choice, rather be best than biggest.

     We stress creativity and imagination in everything we do. While recognizing
that the old way may still be the best way, we constantly strive to find a
better solution to a client's problems.  We pride ourselves on having pioneered
many of the practices and techniques that have become standard in the industry.

     We make an unusual effort to identify and recruit the very best person for
every job. Although our activities are measured in billions of dollars, we
select our people one by one.  In a service business, we know that without the
best people, we cannot be the best firm.

     We offer our people the opportunity to move ahead more rapidly than is
possible at most other places.  We have yet to find limits to the responsibility
that our best people are able to assume. Advancement depends solely on ability,
performance and contribution to the Firm's success, without regard to race,
color, religion, sex, age, national origin, disability, sexual orientation, or
any other impermissible criterion or circumstance.

     We stress teamwork in everything we do.  While individual creativity is
always encouraged, we have found that team effort often produces the best
results.  We have no room for those who put their personal interests ahead of
the interests of the Firm and its clients.

     The dedication of our people to the Firm and the intense effort they give
their jobs are greater than one finds in most other organizations.  We think
that this is an important part of our success.

                                      1-B


     Our profits are a key to our success.  They replenish our capital and
attract and keep our best people.  It is our practice to share our profits
generously with all who help create them.  Profitability is crucial to our
future.

     We consider our size an asset that we try hard to preserve.  We want to be
big enough to undertake the largest project that any of our clients could
contemplate, yet small enough to maintain the loyalty, the intimacy and the
esprit de corps that we all treasure and that contribute greatly to our success.

     We constantly strive to anticipate the rapidly changing needs of our
clients and to develop new services to meet those needs.  We know that the world
of finance will not stand still and that complacency can lead to extinction.

     We regularly receive confidential information as part of our normal client
relationships.  To breach a confidence or to use confidential information
improperly or carelessly would be unthinkable.

     Our business is highly competitive, and we aggressively seek to expand our
client relationships.  However, we must always be fair to competitors and must
never denigrate other firms.

     Integrity and honesty are the heart of our business.  We expect our people
to maintain high ethical standards in everything they do, both in their work for
the firm and in their personal lives.

                                      2-B


GOLDMAN, SACHS & CO.'S INVESTMENT BANKING AND SECURITIES ACTIVITIES

     Goldman Sachs is a leading financial services firm traditionally known on
Wall Street and around the world for its institutional and private client
service.

     With thirty-seven offices around the world Goldman Sachs employs over
11,000 professionals focused on opportunities in major markets.

     The number one underwriter of all international equity issues from 1989-
1997.

     The number one lead manager of U.S. common stock offerings for the past
nine years (1989-1997).*

     The number one lead manager for initial public offerings (IPOs) worldwide
(1989-1997).






___________________
*  Source:  Securities Data Corporation.  COMMON STOCK RANKING EXCLUDES REITS,
   ====================================
   Investment Trusts And Rights.

                                      3-B


GOLDMAN, SACHS & CO.'S HISTORY OF EXCELLENCE

1869      Marcus Goldman opens Goldman Sachs for business

1890      Dow Jones Industrial Average first published

1896      Goldman, Sachs & Co. joins New York Stock Exchange

1906      Goldman, Sachs & Co. takes Sears Roebuck & Co. public (at 93 years,
          the firm's longest-standing client relationship)

          Dow Jones Industrial Average tops 100

1925      Goldman, Sachs & Co. finances Warner Brothers, producer of the first
          talking film

1956      Goldman, Sachs & Co. co-manages Ford's public offering, the largest to
          date

1970      Goldman, Sachs & Co. opens London office

1972      Dow Jones Industrial Average breaks 1000

1986      Goldman, Sachs & Co. takes Microsoft public

1988      Goldman Sachs Asset Management is formally established

1991      Goldman, Sachs & Co. provides advisory services for the largest
          privatization in the region of the sale of Telefonos de Mexico

1995      Goldman Sachs Asset Management introduces Global Tactical Asset
          Allocation Program

          Dow Jones Industrial Average breaks 5000

1996      Goldman, Sachs & Co. takes Deutsche Telekom public

          Dow Jones Industrial Average breaks 6000

1997      Goldman Sachs Asset Management increases assets under management by
          100% over 1996

          Dow Jones Industrial Average breaks 7000

                                      4-B


1998      Goldman Sachs Asset Management reaches $195.5 billion in assets under
          management

          Dow Jones Industrial Average breaks 9000

1999      Goldman Sachs becomes a public company

                                      5-B


                                   APPENDIX C

                             Statement of Intention
                      (applicable only to Class A shares)


     If a shareholder anticipates purchasing $50,000 or more of Class A Shares
of a Fund alone or in combination with Class A Shares of another Goldman Sachs
Fund within a 13-month period, the shareholder may obtain shares of the Fund at
the same reduced sales charge as though the total quantity were invested in one
lump sum by checking and filing the Statement of Intention in the Account
Application.  Income dividends and capital gain distributions taken in
additional shares will not apply toward the completion of the Statement of
Intention.

     To ensure that the reduced price will be received on future purchases, the
investor must inform Goldman Sachs that the Statement of Intention is in effect
each time shares are purchased. Subject to the conditions mentioned below, each
purchase will be made at the public offering price applicable to a single
transaction of the dollar amount specified on the Account Application.  The
investor makes no commitment to purchase additional shares, but if the
investor's purchases within 13 months plus the value of shares credited toward
completion do not total the sum specified, the investor will pay the increased
amount of the sales charge prescribed in the Escrow Agreement.


                                Escrow Agreement


     Out of the initial purchase (or subsequent purchases if necessary), 5% of
the dollar amount specified on the Account Application will be held in escrow by
the Transfer Agent in the form of shares registered in the investor's name.  All
income dividends and capital gains distributions on escrowed shares will be paid
to the investor or to his or her order.  When the minimum investment so
specified is completed (either prior to or by the end of the 13th month), the
investor will be notified and the escrowed shares will be released.

     If the intended investment is not completed, the investor will be asked to
remit to Goldman Sachs any difference between the sales charge on the amount
specified and on the amount actually attained. If the investor does not within
20 days after written request by Goldman Sachs pay such difference in the sales
charge, the Transfer Agent will redeem, pursuant to the authority given by the
investor in the Account Application, an appropriate number of the escrowed
shares in order to realize such difference.  Shares remaining after any such
redemption will be released by the Transfer Agent.

                                      1-C


PART C
OTHER INFORMATION
Item 23. Exhibits
         --------


     The following exhibits relating to Goldman Sachs Trust are incorporated
herein by reference to Post-Effective Amendment No. 26 to Goldman Sachs Trust's
Registration Statement on Form N-1A (Accession No. 000950130-95-002856); to
Post-Effective Amendment No. 27 to such Registration Statement (Accession No.
0000950130-96-004931); to Post-Effective Amendment No. 29 to such Registration
Statement (Accession No. 0000950130-97-000573); to Post-Effective Amendment No.
31 to such Registration Statement (Accession No. 0000950130-97-000805); to Post-
Effective Amendment No. 32 to such Registration Statement (Accession No.
0000950130-97-0001846); to Post-Effective Amendment No. 40 to such Registration
Statement (Accession No. 0000950130-97-004495); to Post-Effective Amendment No.
41 to such Registration Statement (Accession No 0000950130-98-000676); to Post-
Effective Amendment No. 43 to such Registration Statement (Accession No.
0000950130-98-000965); to Post-Effective Amendment No. 44 to such Registration
Statement (Accession No. 0000950130-98-002160); to Post-Effective Amendment No.
46 to such Registration Statement (Accession No. 0000950130-98-003563); to Post-
Effective Amendment No. 47 to such Registration Statement (Accession No.
0000950130-98-004845); to Post-Effective Amendment No. 48 to such Registration
Statement (Accession No. 0000950109-98-005275); to Post-Effective Amendment No.
50 to such Registration Statement (Accession No. 0000950130-98-006081); to Post-
Effective Amendment No. 51 to such Registration Statement (Accession No.
0000950130-99-000178); to Post-Effective Amendment No. 52 to such Registration
Statement (Accession No. 0000950130-99-000742); to Post-Effective Amendment No.
53 to such Registration Statement (Accession No. 0000950130-99-001069); to Post-
Effective Amendment No. 54 to such Registration Statement (Accession No.
0000950130-99-002212); to Post-Effective Amendment No. 55 to such Registration
Statement (Accession No. 0000950109-99-002544); to Post-Effective Amendment No.
56 to such Registration Statement (Accession No. 0000950130-99-005294); to Post-
Effective Amendment No. 57 to such Registration Statement (Accession No.
0000950109-99-003474); to Post-Effective Amendment No. 58 to such Registration
Statement (Accession No. 0000950109-99-004208); to Post-Effective Amendment No.
59 to such Registration Statement (Accession No. 0000950130-99-006810); to Post-
Effective Amendment No. 60 to such Registration Statement (Accession No.
0000950109-99-004538) (no exhibits filed as part of this Amendment); to Post-
Effective Amendment No. 61 to such Registration Statement (Accession No.
0000950130-00-000099) (no exhibits filed as part of this Amendment); to Post-
Effective Amendment No. 62 to such Registration Statement (Accession No.
0000950109-00-000585); to Post-Effective Amendment No. 63 to such Registration
Statement (Accession No. 0000950109-00-001365); to Post-Effective Amendment No.
64 to such Registration Statement (Accession No. 0000950130-00-002072); to Post-
Effective Amendment No. 65 to such Registration Statement (Accession No.
0000950130-00-002509); to Post-Effective Amendment No. 66 to such Registration
Statement (Accession No. 0000950130-00-

                                      -1-



003033); and to Post-Effective Amendment No. 67 to such Registration Statement
(Accession No. 0000950130-00-003405).


     (a)(1).   Agreement and Declaration of Trust dated January 28, 1997.
               (Accession No. 0000950130-97-000573.)

     (a)(2).   Amendment No. 1 dated April 24, 1997 to Agreement and Declaration
               of Trust January 28, 1997. (Accession No. 0000950130-97-004495.)

     (a)(3).   Amendment No. 2 dated July 21, 1997 to Agreement and Declaration
               of Trust as amended, dated January 28, 1997. (Accession No.
               0000950130-97-004495.)

     (a)(4).   Amendment No. 3 dated October 21, 1997 to the Agreement and
               Declaration of Trust as amended, dated January 28, 1997.
               (Accession No. 0000950130-98-000676.)

     (a)(5).   Amendment No. 4 dated January 28, 1998 to the Agreement and
               Declaration of Trust as amended, dated January 28, 1997.
               (Accession No. 0000950130-98-000676.)

     (a)(6).   Amendment No. 5 dated April 23, 1998 to Agreement and Declaration
               of Trust as amended, dated January 28, 1997. (Accession No.
               0000950130-98-004845.)

     (a)(7).   Amendment No. 6 dated July 22, 1998 to Agreement and Declaration
               of Trust as amended, dated January 28, 1997. (Accession No.
               0000950130-98-004845.)

     (a)(8).   Amendment No. 7 dated November 3, 1998 to Agreement and
               Declaration of Trust as amended, dated January 28, 1997.
               (Accession No. 0000950130-98-006081.)

     (a)(9).   Amendment No. 8 dated January 22, 1999 to Agreement and
               Declaration of Trust as amended, dated January 28, 1997.
               (Accession No. 0000950130-99-000742.)

     (a)(10).  Amendment No. 9 dated April 28, 1999 to Agreement and Declaration
               of Trust as amended, dated January 28, 1997. (Accession No.
               0000950109-99-002544.)

     (a)(11).  Amendment No. 10 dated July 27, 1999 to Agreement and Declaration
               of Trust as amended, dated January 28, 1997. (Accession No.
               0000950130-99-005294.)

                                      -2-


     (a)(12).  Amendment No. 11 dated July 27, 1999 to Agreement and Declaration
               of Trust as amended, dated January 28, 1997. (Accession No.
               0000950130-99-005294.)

     (a)(13).  Amendment No. 12 dated October 26, 1999 to Agreement and
               Declaration of Trust as amended, dated January 28, 1997.
               (Accession No. 0000950130-99-004208.)

     (a)(14).  Amendment No. 13 dated February 3, 2000 to Agreement and
               Declaration of Trust as amended, dated January 28, 1997.
               (Accession No. 0000950109-00-000585.)

     (a)(15).  Amendment No. 14 dated April 26, 2000 to Agreement and
               Declaration of Trust as amended, dated January 28, 1997.
               (Accession No. 0000950130-00-002509.)

     (b).      Amended and Restated By-laws of the Delaware business trust dated
               January 28, 1997.  (Accession No. 0000950130-97-000573.)

     (b)(2).   Amended and Restated By-laws of the Delaware business trust dated
               January 28, 1997 as amended and restated July 27, 1999.
               (Accession No. 0000950130-99-005294.)

     (c).      Not applicable.

     (d)(1).   Management Agreement dated April 30, 1997 between Registrant, on
               behalf of Goldman Sachs Short Duration Government Fund, and
               Goldman Sachs Funds Management, L.P. (Accession No. 0000950130-
               98-000676.)

     (d)(2).   Management Agreement dated April 30, 1997 between Registrant, on
               behalf of Goldman Sachs Adjustable Rate Government Fund, and
               Goldman Sachs Funds Management, L.P.  (Accession No. 0000950130-
               98-000676.)

     (d)(3).   Management Agreement dated April 30, 1997 between Registrant, on
               behalf of Goldman Sachs Short Duration Tax-Free Fund, and Goldman
               Sachs Asset Management. (Accession No. 0000950130-98-000676.)

     (d)(4).   Management Agreement dated April 30, 1997 between Registrant, on
               behalf of Goldman Sachs Core Fixed Income Fund, and Goldman Sachs
               Asset Management. (Accession No. 0000950130-98-000676.)

                                      -3-


     (d)(5).   Management Agreement dated April 30, 1997 between the Registrant,
               on behalf of Goldman Sachs - Institutional Liquid Assets, and
               Goldman Sachs Asset Management. (Accession No. 0000950130-98-
               000676.)

     (d)(6).   Management Agreement dated April 30, 1997 between Registrant,
               Goldman Sachs Asset Management, Goldman Sachs Fund Management
               L.P. and Goldman, Sachs Asset Management International.
               (Accession No. 0000950109-98-005275.)

     (d)(7).   Management Agreement dated January 1, 1998 on behalf of the
               Goldman Sachs Asset Allocation Portfolios and Goldman Sachs Asset
               Management. (Accession No. 0000950130-98-000676.)

     (d)(8).   Amended Annex A to Management Agreement dated January 1, 1998 on
               behalf of the Goldman Sachs Asset Allocation Portfolios and
               Goldman Sachs Asset Management (Conservative Strategy Portfolio)
               (Accession No. 0000950130-99-000742.)

     (d)(9).   Amended Annex A dated April 28, 1999 to Management Agreement
               dated April 30, 1997. (Accession No. 0000950109-99-002544.)

     (d)(10).  Amended Annex A dated July 27, 1999 to Management Agreement dated
               April 30, 1997. (Accession No. 0000950130-99-005294.)

     (d)(11).  Amended Annex A dated October 26, 1999 to Management Agreement
               dated April 30, 1997. (Accession No. 0000950130-99-004208.)

     (d)(12).  Amended Annex A dated February 3, 2000 to Management Agreement
               dated April 30, 1997 (Accession No. 0000950109-00-001365.)

     (d)(13).  Amended Annex A dated April 26, 2000 to Management Agreement
               dated April 30, 1997 (Accession No. 0000950130-00-002509).

     (e).      Distribution Agreement dated April 30, 1997 as amended April 26,
               2000 between Registrant and Goldman Sachs & Co. (Accession No.
               0000950130-00-003405).

     (f).      Not applicable.

                                      -4-


     (g)(1).   Custodian Agreement dated July 15, 1991, between Registrant and
               State Street Bank and Trust Company. (Accession No. 0000950130-
               95-002856.)

     (g)(2).   Custodian Agreement dated December 27, 1978 between Registrant
               and State Street Bank and Trust Company, on behalf of Goldman
               Sachs - Institutional Liquid Assets, filed as Exhibit 8(a).
               (Accession No. 0000950130-98-000965.)

    (g)(3).    Letter Agreement dated December 27, 1978 between Registrant and
               State Street Bank and Trust Company, on behalf of Goldman Sachs -
               Institutional Liquid Assets, pertaining to the fees payable by
               Registrant pursuant to the Custodian Agreement, filed as Exhibit
               8(b). (Accession No. 0000950130-98-000965.)

     (g)(4).   Amendment dated May 28, 1981 to the Custodian Agreement referred
               to above as Exhibit (g)(2) (Accession No. 0000950130-98-000965.)

     (g)(5).   Fee schedule relating to the Custodian Agreement between
               Registrant on behalf of the Goldman Sachs Asset Allocation
               Portfolios and State Street Bank and Trust Company. (Accession
               No. 0000950130-97-004495.)

     (g)(6).   Letter Agreement dated June 14, 1984 between Registrant and State
               Street Bank and Trust Company, on behalf of Goldman Sachs -
               Institutional Liquid Assets, pertaining to a change in wire
               charges under the Custodian Agreement, filed as Exhibit 8(d).
               (Accession No. 0000950130-98-000965.)

     (g)(7).   Letter Agreement dated March 29, 1983 between Registrant and
               State Street Bank and Trust Company, on behalf of Goldman Sachs -
               Institutional Liquid Assets, pertaining to the latter's
               designation of Bank of America, N.T. and S.A. as its subcustodian
               and certain other matters, filed as Exhibit 8(f). (Accession No.
               0000950130-98-000965.)

     (g)(8).   Letter Agreement dated March 21, 1985 between Registrant and
               State Street Bank and Trust Company, on behalf of Goldman Sachs -
               Institutional Liquid Assets, pertaining to the creation of a
               joint repurchase agreement account, filed as Exhibit 8(g).
               (Accession No. 0000950130-98-000965.)

     (g)(9).   Letter Agreement dated November 7, 1985, with attachments,
               between Registrant and State Street Bank and Trust Company, on
               behalf of Goldman Sachs - Institutional Liquid Assets,
               authorizing

                                      -5-


               State Street Bank and Trust Company to permit redemption of units
               by check, filed as Exhibit 8(h). (Accession No. 0000950130-98-
               000965.)

     (g)(10).  Money Transfer Services Agreement dated November 14, 1985,
               including attachment, between Registrant and State Street Bank
               and Trust Company, on behalf of Goldman Sachs - Institutional
               Liquid Assets, pertaining to transfers of funds on deposit with
               State Street Bank and Trust Company, filed as Exhibit 8(i).
               (Accession No. 0000950130-98-000965.)

     (g)(11).  Letter Agreement dated November 27, 1985 between Registrant and
               State Street Bank and Trust Company, on behalf of Goldman Sachs -
               Institutional Liquid Assets, amending the Custodian Agreement.
               (Accession No. 0000950130-98-000965.)

     (g)(12).  Letter Agreement dated July 22, 1986 between Registrant and State
               Street Bank and Trust Company, on behalf of Goldman Sachs -
               Institutional Liquid Assets, pertaining to a change in wire
               charges.  (Accession No. 0000950130-98-000965.)

     (g)(13).  Letter Agreement dated June 20, 1987 between Registrant and State
               Street Bank and Trust Company, on behalf of Goldman Sachs -
               Institutional Liquid Assets, amending the Custodian Agreement.
               (Accession No. 0000950130-98-000965.)

     (g)(14).  Letter Agreement between Registrant and State Street Bank and
               Trust Company, on behalf of Goldman Sachs - Institutional Liquid
               Assets, pertaining to the latter's designation of Security
               Pacific National Bank as its subcustodian and certain other
               matters.  (Accession No. 0000950130-98-000965.)

     (g)(15).  Amendment dated July 19, 1988 to the Custodian Agreement between
               Registrant and State Street Bank and Trust Company, on behalf of
               Goldman Sachs - Institutional Liquid Assets.  Accession No.
               0000950130-98-000965.)

     (g)(16).  Amendment dated December 19, 1988 to the Custodian Agreement
               between Registrant and State Street Bank and Trust Company, on
               behalf of Goldman Sachs - Institutional Liquid Assets.  Accession
               No. 0000950130-98-000965.)

     (g)(17).  Custodian Agreement dated April 6, 1990 between Registrant and
               State Street Bank and Trust Company on behalf of Goldman Sachs
               Capital Growth Fund.  (Accession No. 0000950130-98-006081.)

                                      -6-


     (g)(18).  Sub-Custodian Agreement dated March 29, 1983 between State Street
               Bank and Trust Company and Bank of America, National Trust and
               Savings Association on behalf of Goldman Sachs Institutional
               Liquid Assets. (Accession No. 0000950130-98-006081.)

     (g)(19).  Fee schedule dated January 8, 1999 relating to Custodian
               Agreement dated April 6, 1990 between Registrant and State Street
               Bank and Trust Company (Conservative Strategy Portfolio).
               (Accession No. 0000950130-99-000742.)

     (g)(20).  Fee schedule dated April 12, 1999 relating to Custodian Agreement
               dated April 6, 1990 between Registrant and State Street Bank and
               Trust Company (Strategic Growth and Growth Opportunities
               Portfolios).  (Accession No. 0000950109-99-002544.)

     (g)(21).  Fee schedule dated July 19, 1999 relating to Custodian Agreement
               dated April 6, 1990 between Registrant and State Street Bank and
               Trust Company (Internet Tollkeeper Fund). (Accession No.
               0000950130-99-005294.)

     (g)(22).  Fee schedule dated October 1, 1999 relating to the Custodian
               Agreement dated April 6, 1990 between Registrant and State Street
               Bank and Trust Company (Large Cap Value Fund). (Accession No.
               0000950130-99-006810.)

     (g)(23).  Fee schedule dated January 12, 2000 relating to Custodian
               Agreement dated April 6, 1990 between Registrant and State Street
               Bank and Trust Company (CORE Tax-Managed Equity Fund). (Accession
               No. 0000950109-00-000585.)

     (g)(24).  Fee schedule dated January 6, 2000 relating to Custodian
               Agreement dated July 15, 1991 between Registrant and State Street
               Bank and Trust Company (High Yield Municipal Fund). (Accession
               No. 0000950109-00-000585.)

     (g)(25).  Fee schedule dated April 14, 2000 relating to Custodian Agreement
               dated April 6, 1990 to between Registrant and State Street Bank
               and Trust Company  (Research Select Fund). (Accession No.
               0000950130-00-002509.)

     (g)(26).  Fee schedule dated April 14, 2000 relating to Custodian Agreement
               dated July 15, 1991 between Registrant and State Street Bank and
               Trust Company (Enhanced Income Fund). (Accession No. 0000950130-
               00-002509.)

                                      -7-


     (g)(27).  Additional Portfolio Agreement dated September 27, 1999 between
               Registrant and State Street Bank and Trust Company. (Accession
               No. 0000950109-00-000585.)

     (g)(28).  Letter Agreement dated September 27, 1999 between Registrant and
               State Street Bank and Trust Company relating to Custodian
               Agreement dated December 27, 1978. (Accession No. 0000950109-00-
               000585.)

     (g)(29).  Letter Agreement dated September 27, 1999 between Registrant and
               State Street Bank and Trust Company relating to Custodian
               Agreement dated April 6, 1990. (Accession No. 0000950109-00-
               000585.)

     (g)(30).  Letter Agreement dated September 27, 1999 between Registrant and
               State Street Bank and Trust Company relating to Custodian
               Agreement dated July 15, 1991. (Accession No. 0000950109-00-
               000585.)

     (h)(1).   Wiring Agreement dated June 20, 1987 among Goldman, Sachs & Co.,
               State Street Bank and Trust Company and The Northern Trust
               Company. (Accession No. 0000950130-98-000965.)

     (h)(2).   Letter Agreement dated June 20, 1987 regarding use of checking
               account between Registrant and The Northern Trust Company.
               (Accession No. 0000950130-98-000965.)

     (h)(3).   Transfer Agency Agreement dated July 15, 1991 between Registrant
               and Goldman, Sachs & Co. (Accession No. 0000950130-95-002856.)

     (h)(4).   Fee schedule relating to Transfer Agency Agreement between
               Registrant on behalf of the Goldman Sachs Asset Allocation
               Portfolios and Goldman, Sachs & Co. (Accession No. 0000950130-97-
               004495.)

     (h)(5).   Fee Schedule dated July 31, 1998 relating to Transfer Agency
               Agreement between Registrant and Goldman, Sachs & Co. on behalf
               of ILA Money Market Funds. (Accession No. 0000950130-98-006081.)

     (h)(6).   Transfer Agency Agreement dated May 1, 1988 between Goldman Sachs
               Institutional Liquid Assets and Goldman, Sachs & Co. (Accession
               No. 0000950130-98-006081.)

                                      -8-


     (h)(7).   Transfer Agency Agreement dated April 30, 1997 between Registrant
               and Goldman, Sachs & Co. on behalf of the Financial Square Funds.
               (Accession No. 0000950130-98-006081.)

     (h)(8).   Transfer Agency Agreement dated April 6, 1990 between GS-Capital
               Growth Fund, Inc. and Goldman Sachs & Co. (Accession No.
               0000950130-98-006081.)

     (h)(9).   Goldman Sachs - Institutional Liquid Assets Administration Class
               Administration Plan dated April 22, 1998. (Accession No.
               0000950130-98-006081.)

     (h)(10).  Goldman Sachs - Institutional Liquid Assets Service Class Service
               Plan dated April 22, 1998. (Accession No. 0000950130-98-006081.)

     (h)(11).  Cash Management Shares Service Plan dated May 1, 1998. (Accession
               No. 0000950130-98-006081.)

     (h)(12).  Form of Retail Service Agreement on behalf of Goldman Sachs Trust
               relating to Class A Shares of Goldman Sachs Asset Allocation
               Portfolios, Goldman Sachs Fixed Income Funds, Goldman Sachs
               Domestic Equity Funds and Goldman Sachs International Equity
               Funds. (Accession No. 0000950130-98-006081.)

     (h)(13).  Form of Supplemental Service Agreement on behalf of Goldman Sachs
               Trust relating to the Administrative Class, Service Class and
               Cash Management Class of Goldman Sachs - Institutional Liquid
               Assets Portfolios. (Accession No. 0000950130-98-006081.)

     (h)(14).  Form of Supplemental Service Agreement on behalf of Goldman Sachs
               Trust relating to the FST Shares, FST Preferred Shares, FST
               Administration Shares and FST Service Shares of Goldman Sachs
               Financial Square Funds. (Accession No. 0000950130-98-006081.)

     (h)(15).  Form of Service Agreement on behalf of Goldman Sachs Trust
               relating to the Select Class, the Preferred Class, the
               Administration Class, the Service Class and the Cash Management
               Class, as applicable, of Goldman Sachs Financial Square Funds,
               Goldman Sachs - Institutional Liquid Assets Portfolios, Goldman
               Sachs Fixed Income Funds, Goldman Sachs Domestic Equity Funds,
               Goldman Sachs International Equity Funds and Goldman Sachs Asset
               Allocation Portfolios. (Accession No. 0000950130-00-002509.)

                                      -9-


     (h)(16).  FST Select Shares Plan dated October 26, 1999. (Accession No.
               0000950130-99-006810.)

     (h)(17).  FST Administration Class Administration Plan dated April 25,
               2000. (Accession No. 0000950130-00-002509.)

     (h)(18).  FST Service Class Service Plan dated April 25, 2000. (Accession
               No. 0000950130-00-002509.)

     (h)(19).  FST Preferred Class Preferred Administration Plan dated April 25,
               2000. (Accession No. 0000950130-00-002509.)

     (h)(20).  Service Class Service Plan dated April 25, 2000. (Accession No.
               0000950130-00-002509.)

     (h)(21).  Administration Class Administration Plan dated April 26, 2000.
               (Accession No. 0000950130-00-002509.)

     (i)(1).   Opinion of Drinker, Biddle & Reath LLP. (With respect to the
               Asset Allocation Portfolios). (Accession No. 0000950130-97-
               004495.)

     (i)(2).   Opinion of Morris, Nichols, Arsht & Tunnell. (Accession No.
               0000950130-97-001846.)

     (i)(3).   Opinion of Drinker Biddle & Reath LLP. (With respect to Japanese
               Equity and International Small Cap). (Accession No. 0000950130-
               98-003563.)

     (i)(4).   Opinion of Drinker Biddle & Reath LLP. (With respect to Cash
               Management Shares). (Accession No. 0000950130-98-003563.)

     (i)(5).   Opinion of Drinker Biddle & Reath LLP. (With respect to the
               European Equity Fund). (Accession No. 0000950130-98-006081.)

     (i)(6).   Opinion of Drinker Biddle & Reath LLP. (With respect to the CORE
               Large Cap Value Fund). (Accession No. 0000950130-98-006081.)

     (i)(7).   Opinion of Drinker Biddle & Reath LLP (with respect to the
               Conservative Strategy Portfolio). (Accession No. 0000950130-99-
               001069.)

     (i)(8).   Opinion of Drinker Biddle & Reath LLP (with respect to the
               Strategic Growth and Growth Opportunities Portfolios). (Accession
               No. 0000950109-99-002544.)

                                      -10-


     (i)(9).   Opinion of Drinker Biddle & Reath LLP (with respect to the
               Internet Tollkeeper Fund). Accession No. 0000950109-99-004208.)

     (i)(10).  Opinion of Drinker Biddle & Reath LLP (with respect to the Large
               Cap Value Fund). (Accession No. 0000950130-99-006810.)

     (i)(11).  Opinion of Drinker Biddle & Reath LLP (with respect to FST Select
               Shares). (Accession No. 0000950109-00-000585.)

     (i)(12).  Opinion of Drinker Biddle & Reath LLP (with respect to the High
               Yield Municipal Fund). (Accession No. 0000950109-00-001365.)

     (i)(13).  Opinion of Drinker Biddle & Reath LLP (with respect to the CORE
               Tax-Managed Equity Fund). (Accession No. 0000950109-00-001365.)

     (j).      None.

     (k).      Not applicable.

     (l).      Not applicable.

     (m)(1).   Class A Distribution and Service Plan amended and restated as of
               September 1, 1998. (Accession No. 0000950130-98-004845.)

     (m)(2).   Class B Distribution and Service Plan amended and restated as of
               September 1, 1998. (Accession No. 0000950130-98-004845.)

     (m)(3).   Class C Distribution and Service Plan amended and restated as of
               September 1, 1998. (Accession No. 0000950130-98-004845.)

     (m)(4).   Cash Management Shares Plan of Distribution pursuant to Rule 12b-
               1 dated May 1, 1998. (Accession No. 0000950130-98-006081.)

     (n).      None.

     (o).      Plan dated October 26, 1999 entered into by Registrant pursuant
               to Rule 18f-3. (Accession No. 0000950130-99-006810.)

     (p)(1).   Code of Ethics - Goldman Sachs Trust and Goldman Sachs Variable
               Insurance Trust, dated April 23, 1997, as amended October 21,
               1997 and April 25, 2000. (Accession No. 0000950130-00-002509.)

                                      -11-


     (p)(2).   Code of Ethics - Goldman Sachs Asset Management, Goldman Sachs
               Funds Management L.P. and Goldman Sachs Asset Management
               International, effective January 23, 1991 (as revised April 1,
               2000). (Accession No. 0000950130-00-002509.)

     (q)(1).   Powers of Attorney of Messrs. Bakhru, Ford, Grip, Shuch, Smart,
               Springer, Strubel, McNulty, Mosior, Gilman, Perlowski, Richman,
               Surloff, Mmes. McPherson, Mucker and Taylor. (Accession No.
               0000950130-97-000805.)

     (q)(2).   Powers of Attorney dated October 21, 1997 on behalf of James A.
               Fitzpatrick and Valerie A. Zondorak. (Accession No. 0000950130-
               98-000676.)

The following exhibits relating to Goldman Sachs Trust are filed herewith
electronically pursuant to EDGAR rules:

     (a)(16)   Amendment No. 15 dated August 1, 2000 to Agreement and
               Declaration of Trust, as amended, dated January 28, 1997.

     (i)(14)   Opinion of Drinker Biddle & Reath LLP (with respect to the
               Research Select Fund).

     (i)(15)   Opinion of Drinker Biddle & Reath LLP (with respect to the
               Enhanced Income Fund).

     (i)(16)   Opinion of Drinker Biddle & Reath LLP (with respect to Cash
               Management Shares of certain ILA Portfolios).

     (q)(3)    Power of Attorney dated November 15, 2000 on behalf of Patrick T.
               Harker.


Item 24.  Persons Controlled by or Under Common Control with Registrant.
          -------------------------------------------------------------

Not Applicable.

Item 25.  Indemnification
          ---------------

Article IV of the Declaration of Trust of Goldman Sachs Trust, Delaware business
trust, provides for indemnification of the Trustees, officers and agents of the
Trust, subject to certain limitations. The Declaration of Trust is incorporated
by reference to Exhibit (a)(1).

                                      -12-


The Management Agreement with each of the Funds (other than the ILA Portfolios)
provides that the applicable Investment Adviser will not be liable for any error
of judgment or mistake of law or for any loss suffered by a Fund, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
the Investment Adviser or from reckless disregard by the Investment Adviser of
its obligations or duties under the Management Agreement. Section 7 of the
Management Agreement with respect to the ILA Portfolios provides that the ILA
Portfolios will indemnify the Adviser against certain liabilities; provided,
however, that such indemnification does not apply to any loss by reason of its
willful misfeasance, bad faith or gross negligence or the Adviser's reckless
disregard of its obligation under the Management Agreement. The Management
Agreements are incorporated by reference to Exhibits (d)(1) through (d)(7).

Section 9 of the Distribution Agreement between the Registrant and Goldman Sachs
dated April 30, 1997, as amended April 26, 2000 and Section 7 of the Transfer
Agency Agreements between the Registrant and Goldman, Sachs & Co. dated July 15,
1991, May 1, 1988, April 30, 1997 and April 6, 1990 each provide that the
Registrant will indemnify Goldman, Sachs & Co. against certain liabilities. A
copy of the Distribution Agreement is incorporated by reference as Exhibit (e).
The Transfer Agency Agreements are incorporated by reference as Exhibits (h)(3),
(h)(6), (h)(7) and (h)(8), respectively, to the Registrant's Registration
Statement.

Mutual fund and Trustees and officers liability policies purchased jointly by
the Registrant, Trust for Credit Unions, Goldman Sachs Variable Insurance Trust
and The Commerce Funds insure such persons and their respective trustees,
partners, officers and employees, subject to the policies' coverage limits and
exclusions and varying deductibles, against loss resulting from claims by reason
of any act, error, omission, misstatement, misleading statement, neglect or
breach of duty.

Item 26.  Business and Other Connections of Investment Adviser.
          ----------------------------------------------------

The business and other connections of the officers and Managing Directors of
Goldman, Sachs & Co., Goldman Sachs Funds Management, L.P., and Goldman Sachs
Asset Management International are listed on their respective Forms ADV as
currently filed with the Commission (File Nos. 801-16048, 801-37591 and 801-
38157, respectively) the texts of which are hereby incorporated by reference.

Item 27.  Principal Underwriters.
          ----------------------

(a)  Goldman, Sachs & Co. or an affiliate or a division thereof currently serves
as investment adviser and distributor of the units of Trust for Credit Unions,
for shares of Goldman Sachs Trust and for shares of Goldman Sachs Variable
Insurance Trust. Goldman, Sachs & Co., or a division thereof currently serves as
administrator and distributor of the units or shares of The Commerce Funds.

(b)  Set forth below is certain information pertaining to the Managing Directors
of Goldman, Sachs & Co., the Registrant's principal underwriter, who are members
of

                                      -13-



Goldman, Sachs & Co.'s Management Committee. None of the members of the
management committee holds a position or office with the Registrant, except John
P. McNulty who is a Trustee of the Registrant.

                                      -14-


GOLDMAN SACHS MANAGEMENT COMMITTEE


Name and Principal
Business Address                        Position
------------------                      --------

Henry M. Paulson, Jr. (1)               Chairman and Chief Executive Officer

Robert J. Hurst (1)                     Vice Chairman

John A. Thain (1)(3)                    President and Co-Chief Operating Officer

John L. Thornton (3)                    President and Co-Chief Operating Officer

Lloyd C. Blankfein (1)                  Managing Director

Richard A. Friedman (1)                 Managing Director

Steven M. Heller (1)                    Managing Director

Robert S. Kaplan (1)                    Managing Director

Robert J. Katz (1)                      Counsel and Managing Director

John P. McNulty (2)                     Managing Director

Michael P. Mortara (1)                  Managing Director

Daniel M. Neidich (1)                   Managing Director

Robin Neustein (2)                      Managing Director

Mark Schwartz (4)                       Managing Director

Robert K. Steel (2)                     Managing Director

Leslie C. Tortora (2)                   Managing Director

Patrick J. Ward (3)                     Managing Director

Gregory K. Palm (1)                     Counsel and Managing Director

 _______________________

                                      -15-


    (1)  85 Broad Street, New York, NY 10004
    (2)  One New York Plaza, New York, NY 10004
    (3)  Peterborough Court, 133 Fleet Street, London EC4A 2BB, England
    (4)  ARK Mori Building, 12-32 Akasaka I-Chome Minato-KY,
         Tokyo 107-6019, Japan

(c) Not Applicable.

Item 28.  Location of Accounts and Records.
          --------------------------------

The Declaration of Trust, By-laws and minute books of the Registrant and certain
investment adviser records are in the physical possession of Goldman Sachs Asset
Management, 32 Old Slip, New York, New York 10005. All other accounts, books and
other documents required to be maintained under Section 31(a) of the Investment
Company Act of 1940 and the Rules promulgated thereunder are in the physical
possession of State Street Bank and Trust Company, P.O. Box 1713, Boston,
Massachusetts 02105 except for certain transfer agency records which are
maintained by Goldman, Sachs & Co., 4900 Sears Tower, Chicago, Illinois 60606.

Item 29.  Management Services
          -------------------

Not applicable.

Item 30.  Undertakings
          ------------

Not applicable.

                                      -16-

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 68 to its Registration Statement to be signed on its behalf by the
undersigned, duly authorized, in the City and State of New York on the 22nd day
of November, 2000.

GOLDMAN SACHS TRUST
(A Delaware business trust)

By: /s/ Howard B. Surloff
---------------------
Howard B. Surloff
Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment to said Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.

Name Title Date
---- ----- ----

*Douglas C. Grip President and
----------------
Douglas C. Grip Trustee November 22, 2000

*John M. Perlowski Principal Accounting Officer
------------------
John M. Perlowski and Principal Financial Officer November 22, 2000

*David B. Ford Trustee November 22, 2000
--------------
David B. Ford

*Mary Patterson McPherson Trustee November 22, 2000
-------------------------
Mary Patterson McPherson

*Ashok N. Bakhru Chairman and Trustee November 22, 2000
----------------
Ashok N. Bakhru

*Alan A. Shuch Trustee November 22, 2000
--------------
Alan A. Shuch

*John P. McNulty Trustee November 22, 2000
----------------
John P. McNulty

*William H. Springer Trustee November 22, 2000
--------------------
William H. Springer

-17-




*Richard P. Strubel                     Trustee                            November 22, 2000
-------------------
Richard P. Strubel

*Patrick T. Harker                      Trustee                            November 22, 2000
------------------
Patrick T. Harker



*By: /s/ Howard B. Surloff
     ---------------------
     Howard B. Surloff,
     Attorney-In-Fact
*  Pursuant to a power of attorney previously filed.


                                      -18-



                                  CERTIFICATE
                                  -----------


     The undersigned Assistant Secretary for Goldman Sachs Trust (the "Trust")
hereby certifies that the Board of Trustees of the Trust duly adopted the
following resolution at a meeting of the Board held on April 25, 2000.

     RESOLVED, that the Trustees and Officers of the Trusts who may be required
to execute any amendments to the Trust's Registration Statement be, and each
hereby is, authorized to execute a power of attorney appointing James A.
Fitzpatrick, Douglas C. Grip, Nancy L. Mucker, John W. Perlowski, Michael J.
Richman, Howard B. Surloff and Valerie A. Zondorak, jointly and severally, their
attorneys-in-fact, each with power of substitution, for said Trustees and
Officers in any and all capacities to sign the Registration Statement under the
Securities Act of 1933 and the Investment Company Act of 1940 of the Trusts and
any and all amendments to such Registration Statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, the Trustees and Officers hereby ratifying
and confirming all that each of said attorneys-in-fact, or his or her substitute
or substitutes, may do or caused to be done by virtue hereof.


Dated:  November 22, 2000


                                       /s/ Howard B. Surloff
                                       ---------------------
                                       Howard B. Surloff,
                                       Assistant Secretary

                                      -19-


                                 EXHIBIT INDEX


(a)(16)   Amendment No. 15 dated August 1, 2000 to Agreement and Declaration of
          Trust, as amended, dated January 28, 1997.

(i)(14)   Opinion of Drinker Biddle & Reath LLP (with respect to the Research
          Select Fund).

(i)(15)   Opinion of Drinker Biddle & Reath LLP (with respect to the Enhanced
          Income Fund).

(i)(16)   Opinion of Drinker Biddle & Reath LLP (with respect to Cash Management
          shares of certain ILA Portfolios).

(q)(3)    Power of Attorney dated November 15, 2000 on behalf of Patrick T.
          Harker for Goldman Sachs Trust.