GOLDMAN SACHS TRUST
N-30D, 2000-11-08

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GOLDMAN SACHS INTERNATIONAL EQUITY FUND

Market Overview

Dear Shareholder:

International equities generated mixed results, as a correction in the technology sector and contrasting country-specific fundamentals impacted the market.

• Market Review: Giving Back Early Gains — After an encouraging strong start, international equity markets gave back the bulk of their gains. As was the case in the U.S., the early rally was very narrow, with technology, media and telecom (TMT) sectors moving sharply forward. This strong performance overshadowed the poor results in most other areas of the market. Then, in March, a sharp correction in the TMT sectors occurred, dragging down much of the market. As the period progressed, concerns over the direction of global interest rates and the questionable prospects for many ‘new economy’ stocks undermined investor confidence. The extreme volatility experienced in recent months was compounded by thin trading volumes in most major markets. High valuations and adverse company-specific news also exacerbated market jitters. European, Asian and Japanese markets largely followed the correction in the U.S. market, although data in Europe and ongoing cost-cutting and restructuring in Asia paint a more positive picture for these regional economies.
• Market Outlook: Reasons for Long-term Optimism — We remain optimistic about the long-term outlook for international equities, despite the weakness in world equity markets this year and, most notably, the recent correction in so-called ‘new economy’ sectors. Our view is predicated on the continuation of the current favorable mix around the world of positive economic growth and relatively subdued inflation, which is providing a supportive environment for corporate earnings growth and equity market valuations. Furthermore, our confidence is bolstered by the significant correction in some highly rated areas of the market, which we considered to be vulnerable to changes in investor sentiment. In addition, the marked de-rating of TMT stocks has enabled us to raise our exposure to companies in whose fundamentals we have a high degree of conviction, and which we believe are well-positioned to outperform over the long-term.

  As always, we appreciate your support and we look forward to serving your investment needs in the years to come.

  Sincerely,

David B. Ford		David W. Blood
Co-Head, Goldman Sachs Asset Management		Co-Head, Goldman Sachs Asset Management
September 15, 2000

 

 

 

GOLDMAN SACHS INTERNATIONAL EQUITY FUND

Fund Basics

as of August 31, 2000

PERFORMANCE REVIEW
August 31, 1999–	Fund Total Return		MSCI EAFE		FT/S&P Actuaries
August 31, 2000	(without sales charge)1		Index2		Europe and Pacific Index2
Class A	14.68	%	9.81	%	8.88	%
Class B	14.20		9.81		8.88
Class C	14.28		9.81		8.88
Institutional	15.45		9.81		8.88
Service	15.00		9.81		8.88

¹ The net asset value represents the net assets of the Fund (ex-dividend) divided by the total number of shares. The Fund’s performance assumes the reinvestment of dividends and other distributions.

² The Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index (with dividends reinvested), an unmanaged index of common stock prices, replaced the FT/S&P Actuaries Europe and Pacific Index (“EuroPac”) as of 11/30/99 as the International Equity Fund’s performance benchmark.The MSCI EAFE Index is widely used throughout the investment management industry to represent the investment opportunities available to a large cap, developed country international equity strategy and, in the Investment Advisor’s opinion, is a more appropriate benchmark against which to measure the performance of the International Equity Fund. The Index figures do not reflect any fees or expenses. The unmanaged EuroPac Index is a market capitalization-weighted composite of approximately 1,500 stocks from 20 countries in the Europe and Asia-Pacific region. The Index figures do not reflect any fees or expenses. In addition, investors cannot invest directly in the Index.

STANDARDIZED TOTAL RETURNS3
For the period ended 6/30/00	Class A		Class B		Class C		Institutional		Service
One Year	18.36	%	19.01	%	23.62	%	26.02	%	25.48	%
Five Years	14.71		N/A		N/A		N/A		16.15	4
Since Inception	12.21		12.29		11.39		15.36		13.14	4
	(12/1/92	)	(5/1/96	)	(8/15/97	)	(2/7/96	)	(12/1/92	)

³ The Standardized Total Returns are average annual total returns or cumulative total returns (only if the performance period is one year or less) as of the most recent calendar quarter-end. They assume reinvestment of all distributions at net asset value. These returns reflect a maximum initial sales charge of 5.5% for Class A shares, the assumed deferred sales charge for Class B shares (5% maximum declining to 0% after six years) and the assumed deferred sales charge for Class C shares (1% if redeemed within 12 months of purchase). Because Institutional and Service shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns.

⁴ Performance data for Service shares prior to 3/6/96 is that of Class A shares (excluding the impact of front-end sales charges applicable to Class A shares since Service shares are not subject to any sales charges). Performance of Class A shares of the International Equity Fund reflects the expenses applicable to the Fund’s Class A shares. The fees applicable to Service shares are different from those applicable to Class A shares which impact performance ratings and rankings for a class of shares.

Total return figures represent past performance and do not indicate future results, which will vary. The investment return and principal value of an investment will fluctuate and, therefore, an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance reflects expense limitations in effect. In their absence, performance would be reduced.

TOP 10 HOLDINGS AS OF 8/31/00
Holding	% of Total Net Assets			Line of Business
Vodafone AirTouch PLC		3.5	%	Telecommunications
Nokia Oyj		2.5		Telecommunications
Telefonaktiebolaget LM Ericsson AB Series B		2.2		Telecommunications
Nippon Telephone & Telegraph Corp.		1.6		Telecommunications
Royal Dutch Petroleum Co.		1.6		Energy Resources
Glaxo Wellcome PLC		1.5		Health
BP Amoco PLC		1.5		Energy Resources
Telefonica de Espana SA		1.5		Telecommunications
Nestle SA		1.5		Food & Beverage
ING Groep NV		1.5		Financial Services

1

The top 10 holdings may not be representative of the Fund’s future investments.

GOLDMAN SACHS INTERNATIONAL EQUITY FUND

Performance Overview

Dear Shareholder,

We are pleased to report on the performance of the Goldman Sachs International Equity Fund for the one year period that ended August 31, 2000.

Performance Review

Over the one-year period that ended August 31, 2000, the Fund’s Class A, B, C, Institutional and Service shares generated cumulative total returns, without sales charges, of 14.68%, 14.20%, 14.28%, 15.45%, and 15.00%, respectively. These figures compare favorably to the 9.81% cumulative total return of the Fund’s benchmark, Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE) Index (with dividends reinvested).

The Fund’s stronger relative performance versus the benchmark was largely the result of stock selection and regional allocation decisions. Over the last few months, we have also moved to reduce the size of our sector positions (overweight or underweight) in response to high market volatility and intra-market rotation. We have focused instead on our key strength, bottom-up stock selection.

Portfolio Composition

We continue to run a very benign asset allocation strategy, preferring to derive the majority of our excess returns from bottom-up stock selection. We maintain our positive view on the long-term outlook for Continental Europe, while remaining underweight the UK and broadly neutral in Asia as a whole.

Thematically, our positioning in the International Equity fund has remained broadly consistent over the past months, with a continued emphasis on ‘long duration’ assets, typically with visible growth prospects, enduring franchises and strong relative pricing power. The Fund’s core positions — overweight media, pharmaceuticals and consumer staples, and underweight in capital goods and basic materials — remains in place.

Portfolio Highlights

• Telefonica de España SA — During the period, we added to our position in Telefonica, Spain’s incumbent telephone company, which also has substantial operations in Latin America. The firm has transformed itself from a telephone utility into a major player in the sphere of global media and telecommunications. Telefonica has benefited from a recovery in the Latin American markets, as well as generating good performance from its well-managed Spanish operations.
• Yamanouchi Pharmaceutical Co. Ltd.— Yamanouchi is Japan’s third largest pharmaceutical company, with revenue from pharmaceuticals, nutritional products, food and flowers. The company has new drugs with exciting prospects such as Lipitor and Celebrex, which are expected to be launched in the near future.

2

GOLDMAN SACHS INTERNATIONAL EQUITY FUND

INVESTMENT PROCESS OVERVIEW

The results of our bottom-upstock selection process are enhanced by a top-down review of our regional market views and the views of the quantitative research team.

• Hutchison Whampoa Ltd. — Hutchison Whampoa is one of the largest stocks in the Asian region with interests in real estate, transportation and infrastructure, and telecommunications. In addition to its direct exposure to the Internet, it has a compelling business strategy for realizing profit gains from efficiency improvements in its core businesses through technological improvements.

  Portfolio Outlook

• Europe — Looking ahead, our constructive view of Continental Europe continues to reflect a favorable combination of positive long-term structural developments, blended with strong medium-term economic and corporate fundamentals. The key structural trends include the maturing of the savings and pensions industry, and the evolution of the region from a series of parochial national market places to a single pan-European market. This should help to facilitate the high levels of merger and acquisition activity in the region. Finally, the current business climate continues to be positive, evidenced by the substantial tide of rising earnings expectations.
• Asia — We remain relatively optimistic about the outlook for the region’s equity markets. Although clearly susceptible to a U.S. economic slowdown, the recovery of Southeast Asia’s economies has been strong and, we believe, essentially sustainable. The durability of the recovery should be underpinned by the following three factors: diminished fears over further interest rate rises in the region, lasting conviction surrounding the restructuring of the banking industry, and a continuation of encouraging upturn in foreign direct investment.
• Japan — There is also cause for optimism in Japan, although investment risks remain. The economy’s recovery is tentative, with economic activity still relatively muted, domestic confidence fragile and deflationary pressures conspicuous. At the same time, the corporate sector continues to undertake significant self-help measures, which are boosting profitability in an environment of overall negative revenue growth. However, key to propelling the market is the consumer, whose reluctance to spend has become a major obstacle to Japan’s economic recovery. However with consumer confidence levels now being bolstered by improved corporate profitability, we believe that sales growth will become more visible.

  Goldman Sachs International Equity Investment Team

  London, Tokyo, Singapore
  September 15, 2000

3

GOLDMAN SACHS INTERNATIONAL EQUITY FUND

The Goldman Sachs Advantage

Founded in 1869, Goldman, Sachs & Co. is a premier financial services firm traditionally known on Wall Street and around the world for its institutional expertise.

Today, the firm’s Investment Management Division provides individual investors the opportunity to tap the resources of a global institutional powerhouse — and put this expertise to work in their individual portfolios.

What Sets Goldman Sachs Funds Apart?

Our portfolio management teams are located on-site, around the world, in New York, London, Tokyo and Singapore. Their understanding of local economies, markets, industries and cultures helps deliver what many investors want: access to global investment opportunities and consistent, risk-adjusted performance.

Our portfolio management teams make on-site visits to hundreds of companies each month, then construct selective portfolios with an emphasis on their best ideas. Our teams also have access to Goldman, Sachs & Co.’s Global Investment Research Department.

In this, our institutional heritage is clear. Institutions, as well as many individual investors, often look to us to manage the risks of global investing over time in different market environments.

To learn more about the Goldman Sachs Funds, call your investment professional today.

4

The following graph shows the value, as of August 31, 2000, of a $10,000 investment made on December 1, 1992 (commencement of operations) in Class A Shares (maximum sales charge of 5.5%) of the Goldman Sachs International Equity Fund. For comparative purposes, the performance of the Fund’s new benchmark (Morgan Stanley Capital International (MSCI) Europe, Australia and Far East Index (EAFE)) as of November 30, 1999 and the Fund’s previous benchmarks (the FT/S&P Euro-Pac Unhedged and the FT/S&P Europac Combined) are shown. This performance data represents past performance and should not be considered indicative of future performance which will fluctuate with changes in market conditions. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. Performance of Class B, Class C, Institutional and Service Shares will vary from Class A due to differences in fees and loads.

International Equity Fund’s Lifetime Performance

Growth of a $10,000 Investment, Distributions Reinvested December 1, 1992 to August 31, 2000

Average Annual Total Return through August 31, 2000		Since Inception			Five Years			One Year
Class A (commenced December 1, 1992)
Excluding sales charges		12.14	%		14.38	%		14.68%
Including sales charges		11.33	%		13.08	%		8.36%
Class B (commenced May 1, 1996)
Excluding contingent deferred sales charges		11.10	%		—			14.20%
Including contingent deferred sales charges		10.68	%		—			8.59%
Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges		9.18	%		—			14.28%
Including contingent deferred sales charges		9.18	%		—			13.16%
Institutional Class (commenced February 7, 1996)		13.73	%		—			15.45%
Service Class (commenced March 6, 1996)		13.07	%		—			15.00%

Shares		Description		Value
Common Stocks – 94.6%
Australia – 2.4%
480,889		Broken Hill Proprietary Co. Ltd. (Nonferrous Metals)		$          5,259,638
758,410		News Corp. Ltd. (Media)		9,894,754
1,384,297		Tab Corp. Holdings Ltd. (Entertainment)		7,862,811
2,998,836		Telstra Corp. (Utilities)		10,911,750
2,168,232		Woolworths Ltd. (Specialty Retail)		8,564,631
				42,493,584
Canada – 0.4%
125,200		The Seagram Co. Ltd. (Entertainment)		7,535,475
China – 0.1%
325,000		China Mobile Ltd. * (Telecommunications)		2,500,321
Finland – 2.8%
1,009,156		Nokia Oyj (Telecommunications)		44,229,519
143,648		Sonera Oyj (Telecommunications)		4,794,885
				49,024,404
France – 10.8%
151,889		Accor SA (Hotels)		6,539,715
84,862		Air Liquide SA (Chemicals)		10,810,753
272,279		Alcatel (Telecommunications)		22,249,933
297,297		Alstom (Electrical Equipment)		6,664,118
145,786		Aventis SA (Drugs)		10,936,121
118,711		Axa (Insurance)		16,893,330
116,828		Banque Nationale de Paris (Banks)		10,734,407
31,131		Cap Gemini SA (Business Services)		6,494,590
136,388		Carrefour SA (Specialty Retail)		9,940,543
131,506		France Telecom SA (Telecommunications)		15,001,665
91,189		Lafarge SA (Construction)		6,751,485
77,405		LVMH (Louis Vuitton Moet Hennessy) * (Conglomerates)		6,005,805
139,061		Renault SA (Auto)		6,044,182
97,547		STMicroelectronics NV (Semiconductors)		5,975,218
173,923		Total Fina SA Class B (Energy Resources)		25,800,270
135,006		Valeo SA (Auto)		7,239,037
125,525		Vivendi (Business Services)		10,252,006
208,271		Vivendi Environnement * (Utilities)		7,146,100
				191,479,278
Germany – 5.3%
38,617		Allianz AG (Insurance)		13,010,114
74,499		DaimlerChrysler AG (Auto)		3,829,303
233,894		Deutsche Bank AG (Banks)		20,348,666
343,534		Deutsche Lufthansa AG (Airlines)		7,599,912
373,212		Deutsche Telekom AG (Telecommunications)		14,329,548
162,406		E.On AG (Energy Resources)		7,779,725

Shares		Description		Value
Common Stocks – (continued)
Germany – (continued)
25,792		Muenchener Rueckversicherungs- Gesellschaft AG (Property Insurance)		$          7,072,609
128,622		Siemens AG (Electrical Equipment)		20,610,249
				94,580,126
Hong Kong – 2.1%
5,174,000		Giordano International Ltd. (Specialty Retail)		2,902,455
1,086,700		Hang Seng Bank Ltd. (Banks)		11,669,589
1,108,600		Hutchison Whampoa Ltd. (Multi-Industrial)		15,636,107
778,000		Li & Fung Ltd. (Wholesale)		3,391,717
1,680,657		Pacific Century CyberWorks Ltd. * (Computer Software)		3,124,699
				36,724,567
Ireland – 0.6%
1,767,646		Bank of Ireland (Banks)		10,487,043
Italy – 3.3%
1,659,582		Banca Nazionale del Lavoro (Financial Services)		6,158,370
1,384,556		San Paolo-IMI SpA (Banks)		24,558,215
1,844,500		Telecom Italia Mobile SpA (T.I.M.) (Telecommunications)		15,981,563
1,009,563		Telecom Italia SpA (Telecommunications)		12,403,958
				59,102,106
Japan – 24.7%
247,959		Aderans Co. Ltd. (Specialty Retail)		9,834,661
76,300		Advantest Corp. (Electronics Equipment)		15,560,479
928,000		Asahi Chemical Industry Co. Ltd. (Chemicals)		5,803,807
1,343,000		Asahi Glass Co. Ltd. (Home Products)		12,554,816
476,000		Bridgestone Corp. (Auto)		6,159,213
448,265		Canon, Inc. (Computer Hardware)		20,048,984
1,299,000		Chiba Bank Ltd. (Banks)		5,310,493
251,700		Circle K Japan Co. (Specialty Retail)		9,039,016
394,000		Daiwa Securities Group, Inc. (Financial Services)		4,913,456
180,600		FANUC Ltd. (Electronics Equipment)		19,643,320
339,000		Fuji Photo Film Ltd. (Leisure)		12,142,335
281,000		Fujitsu Ltd. (Computer Hardware)		8,141,491
172,000		Honda Motor Co. Ltd. (Auto)		6,289,733
252		Hoya Corp. (Electrical Equipment)		24,101
506,000		Kao Corp. (Chemicals)		13,901,360
960,000		Kirin Brewery Ltd. (Food & Beverage)		10,531,646
2,542,790		Mitsui Marine & Fire (Insurance)		12,660,305
452,000		NEC Corp. (Computer Hardware)		12,926,396

Shares		Description		Value
Common Stocks – (continued)
Japan – (continued)
450,000		NGK Insulators Ltd. (Multi-Industrial)		$          6,181,435
28,242		Nintendo Co. Ltd. (Entertainment)		4,883,099
2,429		Nippon Telephone & Telegraph Corp. (Telecommunications)		28,924,802
751,000		Ricoh Co. Ltd. (Computer Hardware)		13,132,818
56,000		Rohm Co. (Electronics Equipment)		15,936,241
27,500		Ryohin Keikaku Co. Ltd. (Specialty Retail)		2,655,884
936,000		Sanyo Electric Co. Ltd. (Electrical Equipment)		7,942,617
924,000		Sharp Corp. (Electrical Equipment)		14,719,888
282,000		Shin-Etsu Chemical Co. Ltd. (Chemicals)		13,855,416
392,000		Skylark Co. Ltd. (Restaurants)		14,334,741
23,811		SMC Corp. (Machinery)		4,219,671
127,100		Sony Corp. (Electrical Equipment)		14,181,810
1,178,000		Sumitomo Corp. (Wholesale)		10,272,293
161,000		Takeda Chemical Industries Ltd. (Drugs)		9,525,645
100,600		Takefuji Corp. (Financial Services)		9,894,928
169,000		Terumo Corp. (Medical Products)		4,674,637
1,438,000		The Fuji Bank Ltd. (Banks)		10,935,003
361,000		The Nomura Securities Co. Ltd. (Financial Services)		8,445,336
562,800		Tokyo Electric Power (Electrical Utilities)		12,585,824
453,200		Toppan Forms Co. Ltd. (Publishing)		9,582,429
443,000		Toyota Motor Corp. (Auto)		19,273,513
339,000		Yamanouchi Pharmaceutical Co. Ltd. (Drugs)		16,783,123
				438,426,765
Netherlands – 7.4%
355,258		ASM Lithography Holding NV (Semiconductors)		13,413,127
250,765		Fortis Netherlands NV (Financial Services)		7,718,120
514,675		Getronics NV (Business Services)		6,451,468
393,958		ING Groep NV (Financial Services)		26,370,116
368,171		Koninklijke Royal Philips Electronics NV (Appliance)		17,911,045
423,776		KPN NV (Telecommunications)		11,289,979
473,741		Royal Dutch Petroleum Co. (Energy Resources)		28,808,611
367,455		United Pan-Europe Communications NV * (Telecommunications)		8,973,989
195,824		VNU NV (Media)		10,430,568
				131,367,023

Shares		Description		Value
Common Stocks – (continued)
Singapore – 1.0%
851,300		Chartered Semiconductor Manufacturing Ltd. * (Semiconductors)		$          7,122,608
451,847		DBS Group Holdings Ltd. (Banks)		5,460,704
280,000		Singapore Press Holdings Ltd. (Publishing)		4,506,420
				17,089,732
Spain – 2.6%
214,815		Acerinox SA (Steel)		6,293,168
422,243		Endesa SA (Electrical Utilities)		8,227,876
257,210		Repsol SA (Energy Resources)		5,091,943
1,397,430		Telefonica de Espana SA * (Telecommunications)		26,796,285
				46,409,272
Sweden – 5.0%
798,360		Investor AB (Financial Services)		11,332,893
1,974,131		Nordbanken Holding AB (Banks)		13,697,915
45,607		Sandvik AB (Machinery)		995,259
548,311		Securitas AB Series B (Business Services)		12,197,855
569,477		Skandia Forsakring (Insurance)		11,522,501
1,901,168		Telefonaktiebolaget LM Ericsson AB Series B (Telecommunications)		38,366,544
				88,112,967
Switzerland – 6.9%
133,657		ABB Ltd. (Business Services)		14,961,605
10,594		Adecco SA (Business Services)		8,118,823
52,442		Credit Suisse Group (Banks)		10,958,030
12,334		Nestle SA (Food & Beverage)		26,579,699
9,690		Novartis AG (Health)		14,651,814
2,227		Roche Holding AG (Health)		19,943,284
5,957		Swiss Re (Property Insurance)		12,228,606
103,424		UBS AG (Banks)		15,050,507
				122,492,368
United Kingdom – 19.2%
1,306,185		Allied Zurich PLC (Insurance)		15,987,750
556,153		Amvescap PLC (Financial Services)		11,863,401
234,385		AstraZeneca Group PLC (Health)		10,679,651
2,937,538		BP Amoco PLC (Energy Resources)		26,876,095
861,731		British Aerospace PLC (Defense/Aerospace)		5,364,467
761,849		British American Tobacco PLC (Tobacco)		4,897,452
1,340,651		British Telecom PLC (Telecommunications)		17,022,423
218,669		Cable & Wireless PLC (Telecommunications)		4,039,366
433,691		CGNU PLC (Insurance)		6,670,891
1,586,248		Diageo PLC (Tobacco)		13,534,618
951,088		Glaxo Wellcome PLC (Health)		27,340,268

(continued)

Shares		Description		Value
Common Stocks – (continued)
United Kingdom – (continued)
1,310,889		HSBC Holdings PLC (Banks)		$        18,851,120
725,059		Imperial Chemical Industries PLC (Chemicals)		4,892,422
803,100		Lloyds TSB Group PLC (Banks)		7,551,656
449,164		Marconi PLC (Telecommunications)		7,964,779
514,707		Reuters Group PLC (Business Services)		10,307,106
726,149		Royal Bank of Scotland Group PLC * (Banks)		853,509
726,149		Royal Bank of Scotland Group PLC (Banks)		13,108,220
1,055,355		ScottishPower PLC (Energy Resources)		8,039,989
1,794,244		SmithKline Beecham PLC (Health)		23,367,569
3,516,715		Tesco PLC (Specialty Retail)		11,060,986
2,914,076		Unilever PLC (Food & Beverage)		18,246,487
315,479		United News & Media PLC (Publishing)		3,982,789
15,205,430		Vodafone AirTouch PLC (Telecommunications)		61,394,782
477,868		WPP Group PLC (Business Services)		6,781,791
				340,679,587
TOTAL COMMON STOCKS
(Cost $1,542,578,392)				$    1,678,504,618

Shares		Description		Value
Preferred Stocks – 0.7%
Germany – 0.7%
49,154		SAP AG (Computer Software)		$        12,392,759
TOTAL PREFERRED STOCKS
(Cost $6,915,138)				$        12,392,759

Principal Amount		Interest Rate		Maturity Date		Value
Short-Term Obligation – 3.7%
State Street Bank & Trust Euro-Time Deposit
$65,491,000		6.56%		09/01/2000		$    65,491,000
TOTAL SHORT-TERM OBLIGATION
(Cost $65,491,000)						$    65,491,000
TOTAL INVESTMENTS
(Cost $1,614,984,530)						$1,756,388,377

*

Non-income producing security.

The percentage shown for each investment category reflects the value of investments in that category as a percentage of total net assets.

		Percentage of Total Net Assets
Common and Preferred Stock Industry Classifications
Airlines		0.4	%
Appliance		1.0
Auto		2.8
Banks		10.1
Business Services		4.3
Chemicals		3.4
Computer Hardware		3.1
Computer Software		0.9
Conglomerates		0.3
Construction		0.4
Defense/Aerospace		0.3
Drugs		1.5
Electrical Equipment		3.6
Electrical Utilities		1.2
Electronics Equipment		2.9
Energy Resources		5.8
Entertainment		1.1
Financial Services		4.9
Food & Beverage		3.1
Health		5.4
Home Products		0.7
Hotels		0.4
Insurance		4.3
Leisure		0.7
Machinery		0.3
Media		1.1
Medical Products		0.3
Multi-Industrial		1.2
Nonferrous Metals		0.3
Property Insurance		1.1
Publishing		1.0
Restaurants		0.8
Semiconductors		1.5
Specialty Retail		3.0
Steel		0.4
Telecommunications		18.9
Tobacco		1.0
Utilities		1.0
Wholesale		0.8
TOTAL COMMON AND PREFERRED STOCK		95.3	%

Assets:
Investment in securities, at value (identified cost $1,614,984,530)		$1,756,388,377
Cash, at value		3,296,292
Receivables:
Fund shares sold		14,582,133
Dividends and interest, at value		3,888,191
Investment securities sold, at value		2,948,543
Variation margin (a)		2,892,385
Forward foreign currency exchange contracts, at value		1,677,801
Reimbursement from investment adviser		545,848
Other assets		6,736
Total assets		1,786,226,306
Liabilities:
Payables:
Investment securities purchased, at value		3,357,057
Forward foreign currency exchange contracts, at value		2,593,826
Amounts owed to affiliates		2,378,429
Fund shares repurchased		2,141,506
Accrued expenses and other liabilities		631,698
Total liabilities		11,102,516
Net Assets:
Paid-in capital		1,501,445,561
Accumulated distributions in excess of net investment loss		(8,940,186	)
Accumulated net realized gain on investment, futures and foreign currency related transactions		141,971,105
Net unrealized gain on investments, futures and translation of assets and liabilities denominated in foreign currencies		140,647,310
NET ASSETS		$1,775,123,790
Net asset value, offering and redemption price per share: (b)
Class A		$23.59
Class B		$23.14
Class C		$22.89
Institutional		$24.06
Service		$23.65
Shares outstanding:
Class A		56,958,617
Class B		3,469,803
Class C		962,518
Institutional		13,512,467
Service		160,182
Total shares outstanding, $.001 par value (unlimited number of shares authorized)		75,063,587

(a)

Includes approximately $2,056,000 relating to initial margin requirements for futures transactions.

(b)

Maximum public offering price per share (NAV per share multiplied by 1.0582) for Class A Shares is $24.96. At redemption, Class B and Class C Shares may be subject to a contingent deferred sales charge, assessed on the amount equal to the lesser of the current net asset value or the original purchase price of the shares.

Investment income:
Dividends (a)		$  21,033,572
Interest		5,147,523
Total income		26,181,095
Expenses:
Management fees		15,633,003
Distribution and Service fees (b)		6,981,282
Transfer Agent fees (c)		2,573,914
Custodian fees		1,918,064
Registration fees		199,961
Professional fees		67,010
Service share fees		20,398
Trustee fees		8,901
Other		226,450
Total expenses		27,628,983
Less — expense reductions		(794,554	)
Net expenses		26,834,429
NET INVESTMENT LOSS		(653,334	)
Realized and unrealized gain (loss) on investment, futures and foreign currency related transactions:
Net realized gain (loss) from:
Investment transactions		152,167,182
Futures transactions		17,526,583
Foreign currency related transactions		(2,733,931	)
Net change in unrealized gain (loss) on:
Investments		2,670,982
Futures		(367,621	)
Translation of assets and liabilities denominated in foreign currencies		(338,987	)
Net realized and unrealized gain on investment, futures and foreign currency related transactions		168,924,208
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		$168,270,874

(a)

Foreign taxes withheld on dividends were $3,097,226.

(b)

Class A, Class B and Class C had Distribution and Service fees of $6,009,343, $795,433 and $176,506, respectively.

(c)

Class A, Class B, Class C, Institutional Class and Service Class had Transfer Agent fees of $2,283,550, $151,133, $33,536, $104,063 and $1,632, respectively.

		For the Year Ended August 31, 2000
From operations:
Net investment loss		$        (653,334	)
Net realized gain from investment, futures and foreign currency related transactions		166,959,834
Net change in unrealized gain on investments, futures and translation of assets and liabilities denominated in foreign currencies		1,964,374
Net increase in net assets resulting from operations		168,270,874
Distributions to shareholders:
From net investment income
Class A Shares		(4,137,059	)
Class B Shares		(213,456	)
Class C Shares		(50,889	)
Institutional Shares		(1,171,372	)
Service Shares		(16,685	)
In excess of net investment income
Class A Shares		(9,786,740	)
Class B Shares		(504,956	)
Class C Shares		(120,385	)
Institutional Shares		(2,771,030	)
Service Shares		(39,469	)
From net realized gains
Class A Shares		(105,741,385	)
Class B Shares		(7,678,106	)
Class C Shares		(1,511,693	)
Institutional Shares		(22,154,888	)
Service Shares		(403,458	)
Total distributions to shareholders		(156,301,571	)
From share transactions:
Proceeds from sales of shares		962,871,083
Reinvestment of dividends and distributions		121,561,009
Cost of shares repurchased		(529,098,512	)
Net increase in net assets resulting from share transactions		555,333,580
TOTAL INCREASE		567,302,883
Net assets:
Beginning of year		$1,207,820,907
End of year		$1,775,123,790
Accumulated distributions in excess of net investment loss		$      (8,940,186	)

		For the Seven Months Ended August 31, 1999
From operations:
Net investment income		$        2,238,774
Net realized gain on investment, futures and foreign currency related transactions		98,723,169
Net change in unrealized loss on investments, futures and translation of assets and liabilities denominated in foreign currencies		(33,406,060	)
Net increase in net assets resulting from operations		67,555,883
From share transactions:
Proceeds from sales of shares		1,029,391,946
Cost of shares repurchased		(1,032,832,481	)
Net decrease in net assets resulting from share transactions		(3,440,535	)
TOTAL INCREASE		64,115,348
Net assets:
Beginning of period		1,143,705,559
End of period		$  1,207,820,907
Accumulated undistributed net investment income		$        6,242,794

		For the Year Ended January 31, 1999
From operations:
Net investment loss		$        (2,714,406	)
Net realized gain on investment, futures and foreign currency related transactions		96,004,014
Net change in unrealized gain on investments, futures and translation of assets and liabilities denominated in foreign currencies		55,278,283
Net increase in net assets resulting from operations		148,567,891
Distributions to shareholders:
From net realized gains
Class A Shares		(41,132,351	)
Class B Shares		(3,418,683	)
Class C Shares		(556,864	)
Institutional Shares		(4,927,209	)
Service Shares		(179,258	)
Total distributions to shareholders		(50,214,365	)
From share transactions:
Proceeds from sales of shares		2,171,378,743
Reinvestment of dividends and distributions		40,976,198
Cost of shares repurchased		(1,982,583,097	)
Net increase in net assets resulting from share transactions		229,771,844
TOTAL INCREASE		328,125,370
Net assets:
Beginning of year		815,580,189
End of year		$  1,143,705,559
Accumulated undistributed net investment income		$        1,040,126

1.  ORGANIZATION

Goldman Sachs Trust (the “Trust”) is a Delaware business trust registered under the Investment Company Act of 1940 (as amended) as an open-end, management investment company. The Trust includes the Goldman Sachs International Equity Fund (the “Fund”). The Fund is a diversified portfolio offering five classes of shares — Class A, Class B, Class C, Institutional and Service.

2.  SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting policies consistently followed by the Fund. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that may affect the reported amounts. Actual results could differ from those estimates. Effective for fiscal year 1999, the Board of Trustees approved a change in the fiscal year end of the Fund from January 31 to August 31. Accordingly, the Statements of Changes in Net Assets, Summary of Share Transactions, and Financial Highlights of the Fund are included for the seven months ended August 31, 1999 and the year ended January 31, 1999.

A.  Investment Valuation — Investments in securities traded on a U.S. or foreign securities exchange or the NASDAQ system are valued daily at their last sale price on the principal exchange on which they are traded. If no sale occurs, securities are valued at the last bid price. Debt securities are valued at prices supplied by independent pricing services, broker/dealer-supplied valuations or matrix pricing systems. Unlisted equity and debt securities for which market quotations are available are valued at the last sale price on valuation date, or if no sale occurs at the last bid price. Short-term debt obligations maturing in sixty days or less are valued at amortized cost, which approximates market value. Securities for which quotations are not readily available are valued at fair value using methods approved by the Board of Trustees of the Trust.

B.  Security Transactions And Investment Income — Security transactions are recorded as of the trade date. Realized gains and losses on sales of portfolio securities are calculated using the identified-cost basis. Dividend income is recorded on the ex-dividend date, net of foreign withholding taxes where applicable. Dividends for which the Fund has the choice to receive either cash or stock are recognized as investment income in an amount equal to the cash dividend. Interest income is recorded on the basis of interest accrued, premium amortized and discount earned.

Net investment income (other than class specific expenses) and unrealized and realized gains or losses are allocated daily to each class of share of the Fund based upon the relative proportion of net assets of each class.

C.  Federal Taxes — It is the Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute each year substantially all of its investment company taxable income and capital gains to its shareholders. Accordingly, no federal tax provision is required. Income and capital gains distributions, if any, are declared and paid annually.

The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with income tax rules. Therefore, the source of the Fund’s distributions may be shown in the accompanying financial statements as either from or in excess of net investment income or net realized gain on investment transactions, or from paid-in capital, depending on the type of book/tax differences that may exist.

At August 31, 2000, the aggregate cost of portfolio securities for federal income tax purposes is $1,624,611,545. Accordingly gross unrealized gain on investments was $223,254,070 and the gross unrealized loss on investments was $91,477,238 resulting in a net unrealized gain of $131,776,832.

2.  SIGNIFICANT ACCOUNTING POLICIES (continued)

D.  Expenses — Expenses incurred by the Trust which do not specifically relate to an individual Fund of the Trust are allocated to the Funds based on a straight-line or pro rata basis depending upon the nature of the expense.

Class A, Class B and Class C Shares bear all expenses and fees relating to the Distribution and Service Plans. Shareholders of Service Shares bear all expenses and fees paid to service organizations. Each class of shares separately bears its respective class-specific Transfer Agency fees.

E.  Foreign Currency Translations — The books and records of the Fund are maintained in U.S. dollars. Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investment valuations, foreign currency and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based on current exchange rates; (ii) purchases and sales of foreign investments, income and expenses are converted into U.S. dollars based on currency exchange rates prevailing on the respective dates of such transactions.

Net realized and unrealized gain (loss) on foreign currency transactions will represent: (i) foreign exchange gains and losses from the sale and holdings of foreign currencies; and (ii) currency gains and losses between trade date and settlement date on investment securities transactions and forward exchange contracts; and (iii) gains and losses from the difference between amounts of dividends, interest and foreign withholding taxes recorded and the amounts actually received.

F.  Segregation Transactions — The Fund may enter into certain derivative transactions to seek to increase total return. Forward foreign currency exchange contracts, futures contracts, written options, mortgage dollar rolls, when-issued and forward commitments represent examples of such transactions. As a result of entering into those transactions the Fund is required to segregate liquid assets on the accounting records equal to or greater than the market value of the corresponding transactions.

3.  AGREEMENTS

Pursuant to the Investment Management Agreement (the “Agreement”), Goldman Sachs Asset Management International (“ GSAMI”), an affiliate of Goldman, Sachs & Co. (“Goldman Sachs”), serves as the investment adviser to the Fund. Under the Agreement, GSAMI, subject to the general supervision of the Trust’s Board of Trustees, manages the Fund’s portfolio. As compensation for the services rendered under the Agreement, the assumption of the expenses related thereto and administering the Fund’s business affairs, including providing facilities, GSAMI is entitled to a fee, computed daily and payable monthly, at an annual rate equal to 1.00% of the average daily net assets of the Fund.

The investment adviser has voluntarily agreed to limit certain “Other Expenses” (excluding Management fees, Distribution and Service fees, Transfer Agent fees, taxes, interest, brokerage, litigation, Service Share fees, indemnification costs and other extraordinary expenses) to the extent such expenses exceed, on an annual basis, 0.10% of the average daily net assets of the Fund. Goldman Sachs reimbursed approximately $794,000 for the year ended August 31, 2000. In addition, the Fund has entered into certain offset arrangements with the custodian resulting in a reduction in the Fund’s expenses. For the year ended August 31, 2000, custody fees were reduced by approximately $1,000.

The Trust, on behalf of the Fund, has adopted Distribution and Service Plans. Under the Distribution and Service Plans, Goldman Sachs and/or authorized dealers are entitled to a monthly fee from the Fund for distribution and shareholder maintenance services equal, on an annual basis, to 0.50%, 1.00% and 1.00% of the Fund’s average daily net assets attributable to Class A, Class B and Class C Shares, respectively.

Goldman Sachs serves as the distributor of shares of the Fund pursuant to a Distribution Agreement. Goldman Sachs may receive a portion of the Class A sales load and Class B and Class C contingent deferred sales charges and has advised the Fund that it retained approximately $2,891,000 for the year ended August 31, 2000.

3.  AGREEMENTS (continued)

Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. The fees charged for such transfer agency services are calculated daily and payable monthly at an annual rate as follows: 0.19% of average daily net assets for Class A, Class B and Class C Shares and 0.04% of average daily net assets for Institutional and Service shares.

The Trust, on behalf of the Fund, has adopted a Service Plan. This Plan allows for Service Shares to compensate service organizations for providing varying levels of account administration and shareholder liaison services to their customers who are beneficial owners of such shares. The Service Plan provides for compensation to the service organizations in an amount up to 0.50% (on an annualized basis), of the average daily net asset value of the Service Shares.

As of August 31, 2000, the amounts owed to affiliates were approximately $1,483,000, $653,000 and $242,000 for Management, Distribution and Service and Transfer Agent fees, respectively.

4.  PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds of sales and maturities of securities (excluding short-term investments and futures) for the year ended August 31, 2000, were $1,555,116,959 and $1,170,979,843, respectively. For the year ended August 31, 2000, Goldman Sachs earned approximately $101,000 of brokerage commissions from futures transactions executed on behalf of the Fund.

Forward Foreign Currency Exchange Contracts — The Fund may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date as a hedge or cross-hedge against either specific transactions or portfolio positions. The Fund may also purchase and sell such contracts to seek to increase total return. All commitments are “marked-to-market” daily at the applicable translation rates and any resulting unrealized gains or losses are recorded in the Fund’s financial statements. The Fund realizes gains or losses at the time a forward contract is offset by entry into a closing transaction or extinguished by delivery of the currency. Risks may arise upon entering these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.

At August 31, 2000, the Fund had the following outstanding forward foreign currency exchange contracts:

Open Foreign Currency		Value on Settlement Date		Current Value		Unrealized
Purchase Contracts						Gain		Loss
Australian Dollar
expiring 10/13/2000		$  3,521,620		$  3,443,050		$    —		$      78,570
Danish Krone
expiring 10/19/2000		14,605,000		14,220,417		—		384,583
Euro
expiring 10/13/2000		19,453,483		19,129,311		—		324,172
Great British Pound
expiring 9/14/2000		504,164		482,458		—		21,706
expiring 9/14/2000		13,028,098		12,599,983		—		428,115
expiring 9/14/2000		5,283,974		5,290,512		6,538		—
Norwegian Krone
expiring 9/21/2000		6,686,000		6,524,793		—		161,207
New Zealand Dollar
expiring 11/15/2000		2,465,889		2,335,514		—		130,375
TOTAL OPEN FOREIGN CURRENCY PURCHASE CONTRACTS		$65,548,228		$64,026,038		$6,538		$1,528,728

4.  PORTFOLIO SECURITIES TRANSACTIONS (continued)

Open Forward Foreign Currency		Value on Settlement Date		Current Value		Unrealized
Sale Contracts						Gain		Loss
Euro
expiring 9/14/2000		$        547,073		$        509,121		$  37,952		$            —
Hong Kong Dollar
expiring 12/8/2000		25,903,974		25,912,802		—		8,828
Japanese Yen
expiring 11/17/2000		2,714,365		2,744,178		—		29,813
Swedish Krona
expiring 10/13/2000		27,351,540		26,711,268		640,272		—
Swiss Franc
expiring 11/20/2000		18,552,168		18,232,414		319,754		—
TOTAL OPEN FORWARD FOREIGN CURRENCY SALE CONTRACTS		$  75,069,120		$  74,109,783		$997,978		$      38,641
Closed but Unsettled		Purchase Value		Sale Value		Realized
Forward Foreign Currency Contracts						Gain		Loss
Euro
expiring 9/14/2000		$  11,355,176		$  11,292,566		$        —		$      62,610
expiring 9/14/2000		10,883,308		10,811,422		—		71,886
expiring 9/14/2000		523,596		528,388		4,792		—
expiring 9/14/2000		10,713,362		10,832,611		119,249		—
expiring 10/13/2000		7,467,657		7,288,874		—		178,783
expiring 10/13/2000		642,005		637,046		—		4,959
expiring 10/13/2000		19,324,411		19,181,671		—		142,740
expiring 10/13/2000		14,013,271		13,971,080		—		42,191
expiring 10/13/2000		2,688,391		2,715,329		26,938		—
expiring 10/13/2000		2,766,811		2,895,863		129,052		—
Great British Pound
expiring 9/14/2000		11,292,566		11,215,363		—		77,203
expiring 9/14/2000		11,267,987		11,215,362		—		52,625
expiring 9/14/2000		71,823		71,428		—		395
expiring 9/14/2000		11,248,496		11,165,530		—		82,966
expiring 9/14/2000		256,886		253,017		—		3,869
expiring 9/14/2000		11,379,685		11,240,972		—		138,713
expiring 9/14/2000		10,910,859		10,744,495		—		166,364
Japanese Yen
expiring 10/20/2000		22,450,461		22,716,000		265,539		—
expiring 11/17/2000		7,742,000		7,869,715		127,715		—
Hong Kong Dollar
expiring 12/8/2000		2,192,214		2,191,061		—		1,153
TOTAL CLOSED BUT UNSETTLED FORWARD FOREIGN CURRENCY CONTRACTS		$169,190,965		$168,837,793		$673,285		$1,026,457

4.  PORTFOLIO SECURITIES TRANSACTIONS (continued)

The contractual amounts of forward foreign currency exchange contracts do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. At August 31, 2000, the Fund had sufficient cash and securities to cover any commitments under these contracts.

Futures Contracts — The Fund may enter into futures transactions to hedge against changes in interest rates, securities prices, currency exchange rates or to seek to increase total return. Upon entering into a futures contract, the Fund is required to deposit with a broker or the Fund’s custodian bank, an amount of cash or securities equal to the minimum “initial margin” requirement of the associated futures exchange. Subsequent payments for futures contracts (“variation margin”) are paid or received by the Fund, depending on the fluctuations in the value of the contracts, and are recorded for financial reporting purposes as unrealized gains or losses. When contracts are closed, the Fund realizes a gain or loss which is reported in the Statement of Operations.

The use of futures contracts involve, to varying degrees, elements of market and counterparty risk which may exceed the amounts recognized in the Statement of Assets and Liabilities. Changes in the value of the futures contracts may not directly correlate with changes in the value of the underlying securities. This risk may decrease the effectiveness of the Fund’s hedging strategies and potentially result in a loss.

At August 31, 2000, open futures contracts were as follows:

Type		Number of Contracts Long		Settlement Month		Market Value		Unrealized Loss
Dow Jones Euro Stoxx 50		925		September 2000		$42,487,281		$32,891

Option Accounting Principles — When the Fund writes call or put options, an amount equal to the premium received is recorded as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. When a written option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain or loss without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. When a written call option is exercised, the Fund realizes a gain or loss from the sale of the underlying security, and the proceeds of the sale are increased by the premium originally received. When a written put option is exercised, the amount of the premium originally received will reduce the cost of the security which the Fund purchases upon exercise. There is a risk of loss from a change in value of such options which may exceed the related premiums received.

Upon the purchase of a call option or a protective put option by the Fund, the premium paid is recorded as an investment and subsequently marked-to-market to reflect the current market value of the option. If an option which the Fund has purchased expires on the stipulated expiration date, the Fund will realize a loss in the amount of the cost of the option. If the Fund enters into a closing sale transaction, the Fund will realize a gain or loss, depending on whether the sale proceeds for the closing sale transaction are greater or less than the cost of the option. If the Fund exercises a purchased put option, the Fund will realize a gain or loss from the sale of the underlying security, and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a purchased call option, the cost of the security which the Fund purchases upon exercise will be increased by the premium originally paid. At August 31, 2000, there were no open written option contracts.

5.  LINE OF CREDIT FACILITY

Effective May 31, 2000, the Fund participates in a $350,000,000 committed, unsecured revolving line of credit facility. Prior thereto, the Fund participated in a $250,000,000 uncommitted and a $250,000,000 committed, unsecured revolving line of credit facility. Under the most restrictive arrangement, the Fund must own securities having a market value in excess of 400% of the total bank borrowings. This facility is to be used solely for temporary or emergency purposes. The interest rate on borrowings is based on the Federal Funds rate. The committed facility also requires a fee to be paid by the Fund based on the amount of the commitment. During the year ended August 31, 2000, the Fund did not have any borrowings under any of these facilities.

6.  CHANGE IN INDEPENDENT ACCOUNTANTS

On October 26, 1999 the Board of Trustees of the Fund, upon the recommendation of the Board’s audit committee, determined not to retain Arthur Andersen LLP and approved a change of the Fund’s independent accountants to PricewaterhouseCoopers LLP. For the period ended August 31, 1999 and the year ended January 31, 1999, Arthur Andersen LLP’s audit reports contained no adverse opinion or disclaimer of opinion; nor were their reports qualified or modified as to uncertainty, audit scope, or accounting principles. Further, there were no disagreements between the Fund and Arthur Andersen LLP on accounting principles or practices, financial statement disclosure or audit scope or procedure, which if not resolved to the satisfaction of Arthur Andersen LLP would have caused them to make reference to the disagreement in their report.

7.  CERTAIN RECLASSIFICATIONS

In accordance with AICPA Statement of Position 93-2, the Fund reclassified $4,193,340 from accumulated net realized gain on investment, futures and foreign currency related transactions to accumulated distributions in excess of net investment loss and $89,055 from paid-in capital to accumulated distributions in excess of net investment loss. These reclassifications have no impact on the net asset value of the Fund and are designed to present the Fund’s capital accounts on a tax basis. Reclassifications result primarily from the difference in the tax treatment of foreign currency, net operating losses and organization costs.

Goldman Sachs International Equity Fund — Tax Information (unaudited)

For the distribution paid during the year ended August 31, 2000, the total amount of income received by the International Equity Fund from sources within foreign countries and possessions of the United States was $0.2593 per share all of which is attributable to qualified passive income. The total amount of taxes paid by the Fund to such countries was $0.0311 per share. A separate notice containing the country by country components of these totals has been previously mailed to the shareholders.

Pursuant to Section 852 of the Internal Revenue Code, the Fund designated $116,956,804 as capital gains dividends paid during its year ended August 31, 2000.

8.  SUMMARY OF SHARE TRANSACTIONS

Share activity for:

		For the Year Ended August 31, 2000						For the Seven Months Ended August 31, 1999						For the Year Ended January 31, 1999
		Shares			Dollars			Shares			Dollars			Shares			Dollars
Class A Shares
Shares sold		29,637,438			$727,913,986			40,503,629			$878,896,664			90,785,418			$  1,949,815,404
Reinvestments of dividends and distributions		4,008,202			93,992,338			—			—			1,669,818			34,480,481
Shares repurchased		(17,502,173	)		(431,597,850	)		(42,925,516	)		(937,796,470	)		(84,367,795	)		(1,819,683,956)
		16,143,467			390,308,474			(2,421,887	)		(58,899,806	)		8,087,441			164,611,929
Class B Shares
Shares sold		596,787			14,423,566			231,545			5,004,374			794,593			17,488,784
Reinvestments of dividends and distributions		335,760			7,745,988			—			—			156,073			3,180,373
Shares repurchased		(484,425	)		(11,699,142	)		(410,880	)		(8,878,625	)		(557,697	)		(11,834,003)
		448,122			10,470,412			(179,335	)		(3,874,251	)		392,969			8,835,154
Class C Shares
Shares sold		1,503,847			35,487,591			3,386,747			71,812,024			6,644,608			139,922,460
Reinvestments of dividends and distributions		52,340			1,194,420			—			—			19,517			394,623
Shares repurchased		(1,092,313	)		(25,780,443	)		(3,429,722	)		(73,325,070	)		(6,294,716	)		(133,220,855)
		463,874			10,901,568			(42,975	)		(1,513,046	)		369,409			7,096,228
Institutional Shares
Shares sold		7,389,250			183,681,326			3,229,820			73,161,867			2,805,737			62,386,145
Reinvestments of dividends and distributions		763,388			18,168,651			—			—			131,238			2,741,464
Shares repurchased		(2,327,895	)		(58,028,723	)		(556,938	)		(12,395,514	)		(740,110	)		(16,145,728)
		5,824,743			143,821,254			2,672,882			60,766,353			2,196,865			48,981,881
Service Shares
Shares sold		55,114			1,364,614			23,838			517,017			78,227			1,765,950
Reinvestments of dividends and distributions		19,583			459,612			—			—			8,677			179,257
Shares repurchased		(80,974	)		(1,992,354	)		(20,037	)		(436,802	)		(77,199	)		(1,698,555)
		(6,277	)		(168,128	)		3,801			80,215			9,705			246,652
NET INCREASE (DECREASE)		22,873,929			$555,333,580			32,486			$    (3,440,535	)		11,056,389			$    229,771,844

				Income from investment operations									Distributions to shareholders
		Net asset value, beginning of period		Net investment income (loss)			Net realized and unrealized gain (loss)			Total from Investment Operations			From net investment income			In excess of net investment income			From net realized gains			Total Distributions
FOR THE YEAR ENDED AUGUST 31,
2000 - Class A Shares		$23.12		$(0.03	) (c)		$3.41			$3.38			$(0.10	)		$(0.24)			$(2.57	)		$(2.91	)
2000 - Class B Shares		22.73		(0.16	) (c)		3.38			3.22			(0.07	)		(0.17)			(2.57	)		(2.81	)
2000 - Class C Shares		22.54		(0.14	) (c)		3.35			3.21			(0.09	)		(0.20)			(2.57	)		(2.86	)
2000 - Institutional Shares		23.49		0.14	(c)		3.46			3.60			(0.14	)		(0.32)			(2.57	)		(3.03	)
2000 - Service Shares		23.14		(0.01	) (c)		3.45			3.44			(0.11	)		(0.25)			(2.57	)		(2.93	)
FOR THE SEVEN MONTHS ENDED AUGUST 31,
1999 - Class A Shares		21.92		0.04			1.16			1.20			—			—			—			—
1999 - Class B Shares		21.63		(0.02	)		1.12			1.10			—			—			—			—
1999 - Class C Shares		21.45		(0.03	)		1.12			1.09			—			—			—			—
1999 - Institutional Shares		22.20		0.12	(c)		1.17	(c)		1.29			—			—			—			—
1999 - Service Shares		21.93		0.06			1.15			1.21			—			—			—			—
FOR THE YEARS ENDED JANUARY 31,
1999 - Class A Shares		19.85		(0.06	)		3.24			3.18			—			—			(1.11	)		(1.11	)
1999 - Class B Shares		19.70		(0.17	)		3.21			3.04			—			—			(1.11	)		(1.11	)
1999 - Class C Shares		19.56		(0.15	)		3.15			3.00			—			—			(1.11	)		(1.11	)
1999 - Institutional Shares		19.97		0.03			3.31			3.34			—			—			(1.11	)		(1.11	)
1999 - Service Shares		19.84		(0.04	)		3.24			3.20			—			—			(1.11	)		(1.11	)
1998 - Class A Shares		19.32		0.03			2.04			2.07			—			(0.30	)		(1.24	)		(1.54	)
1998 - Class B Shares		19.24		(0.08	)		2.02			1.94			—			(0.25	)		(1.23	)		(1.48	)
1998 - Class C Shares (commenced August 15, 1997)		22.60		(0.04	)		(1.38	)		(1.42	)		—			(0.38	)		(1.24	)		(1.62	)
1998 - Institutional Shares		19.40		0.10			2.11			2.21			(0.07	)		(0.33	)		(1.24	)		(1.64	)
1998 - Service Shares		19.34		0.02			2.06			2.08			—			(0.35	)		(1.23	)		(1.58	)
1997 - Class A Shares		17.20		0.10			2.23			2.33			—			—			(0.21	)		(0.21	)
1997 - Class B Shares (commenced May 1, 1996)		18.91		(0.06	)		0.60			0.54			—			—			(0.21	)		(0.21	)
1997 - Institutional Shares (commenced February 7, 1996)		17.45		0.04			2.15			2.19			(0.03	)		—			(0.21	)		(0.24	)
1997 - Service Shares (commenced March 6, 1996)		17.70		(0.02	)		1.87			1.85			—			—			(0.21	)		(0.21	)
1996 - Class A Shares		14.52		0.13			4.00			4.13			(0.58	)		—			(0.87	)		(1.45	)

(a)

Assumes investment at the net asset value at the beginning of the period, reinvestment of all dividends and distributions, a complete redemption of the investment at the net asset value at the end of the period and no sales or redemption charges. Total return would be reduced if a sales or redemption charge were taken into account. Total returns for periods less than one full year are not annualized.

(b)

Annualized.

(c)

Calculated based on the average shares outstanding methodology.

														Ratios assuming no expense reductions
Net asset value, end of period		Total return (a)			Net assets at end of period (in 000s)			Ratio of net expenses to average net assets			Ratio of net investment income (loss) to average net assets			Ratio of expenses to average net assets			Ratio of net investment income (loss) to average net assets			Portfolio turnover rate
$23.59		14.68	%		$1,343,869			1.79	%		(0.12	)%		1.84	%		(0.17	)%		79.79	%
23.14		14.20			80,274			2.29			(0.65	)		2.34			(0.70	)		79.79
22.89		14.28			22,031			2.29			(0.59	)		2.34			(0.64	)		79.79
24.06		15.45			325,161			1.14			0.54			1.19			0.49			79.79
23.65		15.00			3,789			1.64			(0.02	)		1.69			(0.07	)		79.79
23.12		5.47			943,473			1.79	(b)		0.31	(b)		1.84	(b)		0.26	(b)		61.10
22.73		5.09			68,691			2.29	(b)		(0.19	) (b)		2.34	(b)		(0.24	) (b)		61.10
22.54		5.08			11,241			2.29	(b)		(0.26	) (b)		2.34	(b)		(0.31	) (b)		61.10
23.49		5.81			180,564			1.14	(b)		0.89	(b)		1.19	(b)		0.84	(b)		61.10
23.14		5.52			3,852			1.64	(b)		0.47	(b)		1.69	(b)		0.42	(b)		61.10
21.92		16.39			947,973			1.73			(0.28	)		1.82			(0.37	)		113.79
21.63		15.80			69,231			2.24			(0.79	)		2.32			(0.87	)		113.79
21.45		15.70			11,619			2.24			(0.98	)		2.32			(1.06	)		113.79
22.20		17.09			111,315			1.13			0.23			1.21			0.15			113.79
21.93		16.49			3,568			1.63			(0.18	)		1.71			(0.26	)		113.79
19.85		11.12			697,590			1.67			(0.27	)		1.80			(0.40	)		40.82
19.70		10.51			55,324			2.20			(0.90	)		2.30			(1.00	)		40.82
19.56		(5.92	)		3,369			2.27	(b)		(1.43	) (b)		2.37	(b)		(1.53	) (b)		40.82
19.97		11.82			56,263			1.08			0.30			1.18			0.20			40.82
19.84		11.25			3,035			1.55			(0.36	)		1.65			(0.46	)		40.82
19.32		13.48			536,283			1.69			(0.07	)		1.88			(0.26	)		38.01
19.24		2.83			19,198			2.23	(b)		(0.97	) (b)		2.38	(b)		(1.12	) (b)		38.01
19.40		12.53			68,374			1.10	(b)		0.43	(b)		1.25	(b)		0.28	(b)		38.01
19.34		10.42			674			1.60	(b)		(0.40	) (b)		1.75	(b)		(0.55	) (b)		38.01
17.20		28.68			330,860			1.52			0.26			1.77			0.01			68.48

To the Shareholders and Board of Trustees of

Goldman Sachs Trust — International Equity Fund:

In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Goldman Sachs International Equity Fund (“the Fund”), one of the portfolios constituting Goldman Sachs Trust, at August 31, 2000, the results of its operations, the changes in its net assets and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at August 31, 2000 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statements of changes in net assets of the Fund for the period ended August 31, 1999 and the year ended January 31, 1999 and the financial highlights for each of the periods ended on or before August 31, 1999 were audited by other independent accountants whose report dated October 8, 1999 expressed an unqualified opinion thereon.

PricewaterhouseCoopers LLP

Boston, Massachusetts

October 23, 2000

GOLDMAN SACHS FUND PROFILE

Goldman Sachs International Equity Fund

An Investment Idea for the Long Term

History has shown that a long-term plan that includes international stocks can help provide greater protection against market volatility over time than a portfolio that invests only in U.S. stocks.

Goldman Sachs International Equity Fund offers investors access to the benefits associated with international market diversification. The Fund seeks long-term capital growth, primarily through equity securities of companies that are organized outside the United States or whose securities are principally traded outside the United States.

Target Your Needs

The Goldman Sachs International Equity Fund has a distinct investment objective and a defined place on the risk/return spectrum. As your investment objectives change, you can exchange shares within Goldman Sachs Funds without any additional charge.* (Please note: in general, greater returns are associated with greater risk.)

For More Information

To learn more about the Goldman Sachs International Equity Fund and other Goldman Sachs Funds, call your investment professional today.

*The exchange privilege is subject to termination and its terms are subject to change.