GOLDMAN SACHS TRUST, 485APOS, 2000-04-05

GOLDMAN SACHS TRUST
485APOS, 2000-04-05

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<PAGE>

As filed with the Securities and Exchange Commission on April 5, 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. 63( X )

and/or

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

Amendment No. 65( 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
____________

Michael J. Richman, Esq. Copies to:
Goldman, Sachs & Co. Jeffrey A. Dalke, Esq.
85 Broad Street - 12th Floor Drinker Biddle & Reath LLP
New York, New York 10004 One Logan Square
18th 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.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 April 5, 2000
Subject to Completion

Prospectus

Class A, B
and C
Shares

June 19,
2000

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

[LOGO OF GOLDMAN SACHS]

<PAGE>

NOT FDIC-INSURED May Lose Value No Bank Guarantee

<PAGE>

General Investment Management Approach

Goldman Sachs Asset Management, a unit of the Investment Management Division
of Goldman, Sachs & Co. ("Goldman Sachs"), serves as investment adviser to
the Research Select Fund (the "Fund"). Goldman Sachs Asset Management is
referred to in this Prospectus as the "Investment Adviser."

RESEARCH STYLE FUNDS--RESEARCH SELECT FUND

The Goldman Sachs Research Select Fund leverages the resources of Goldman
Sachs by applying the Investment Management Division's risk management tech-
niques and portfolio construction expertise to the stocks included in the
U.S. Select List developed by the Goldman Sachs Investment Research Divi-
sion.

A-1
<PAGE>

Fund Investment Objective and Strategies
Goldman Sachs
Research Select Fund

FUND FACTS
- --------------------------------------------------------------------------------

Objective: Long-term growth of capital

Benchmark: S&P 500 Index

Investment Focus: A focused portfolio of U.S. equity securities that offer
the potential for long-term capital appreciation

INVESTMENT OBJECTIVE

The Fund seeks to provide long-term growth of capital through participation
in a focused portfolio of U.S. equity securities.

PRINCIPAL INVESTMENT STRATEGIES

Equity Securities. The Fund invests, under normal circumstances, at least
90% of its total assets in U.S. equity securities. Under normal circumstanc-
es, the Fund will generally only purchase stocks that are included on the
Goldman Sachs Global Investment Research Division's U.S. Select List and
will generally sell stocks that have been removed from the U.S. Select List.
The Fund will purchase a stock that has been added to, or sell a stock that
has been removed from, the list at some point after publication of that
change, at the discretion of the Investment Adviser. Notification of changes
to the U.S. Select List is made to clients of the firm and to the Fund's
portfolio management team at the same time. In addition, the Investment
Adviser will apply the portfolio optimization and other techniques described
below in managing the Fund and in purchasing and selling stocks that are
included in the U.S. Select List. The Investment Manager may at times pur-
chase supplemental securities that are not included on the U.S. Select List.
Although the Fund invests primarily in publicly traded U.S. securities, it
may invest up to 10% of its total assets in foreign securities.

B-1
<PAGE>

Goldman Sachs Global Investment Research Division. Goldman Sachs is a lead-
ing, full service global investment banking and securities firm. The firm's
Global Investment Research Division provides far-reaching and comprehensive
analysis and commentary on portfolio strategy, economics, industries and
companies. For over two decades, Goldman Sachs has committed the resources
on a global scale to develop an industry-leading position for the firm's
investment research products.

Goldman Sachs has achieved worldwide recognition for its value-added
research products. The Global Investment Research Division has a well-
regarded staff of over 800 professionals including more than 200 equity ana-
lysts, 24 global research teams, and 12 portfolio strategists, covering over
2300 companies, 50 economies and 20 stock markets.

The U.S. Stock Selection Committee currently comprises ten senior profes-
sionals, including the head of Global Investment Research and the Director
of U.S. Investment Research, as well as a senior market strategist, econo-
mist, and sector specialists.

The Goldman Sachs Global Investment Research Division's U.S. Select
List. The U.S. Select List was introduced on September 9, 1998 and comprises
approximately 25 to 35 stocks that the Goldman Sachs U.S. Stock Selection
Committee expects, as a portfolio, to outperform its benchmark S&P 500 Index
over the next 12 to 18 months. The list is consistent with overall invest-
ment policy and emphasizes strategically favored economic sectors. The U.S.
Select List is updated on a regular basis.

The U.S. Select List is used primarily by institutional clients.

Our Approach to Portfolio Construction. In managing the Fund, tools such as
the Black-Litterman Model, risk model and portfolio optimization may be
used. We expect the Fund's performance to be driven by sector and/or stock
selection of the U.S. Select List.

The performance of the Fund may differ from that of the published U.S.
Select List, for a variety of reasons, including transaction costs; time
delay between when a stock is added or removed from the list and when it is
bought or sold for the Fund; modifications in the stock weights in order to
control risk; and the Fund's investments in cash equivalents, options and
other securities and instruments that are not included in the U.S. Select
List.

Other. The Fund's investments in fixed-income securities are limited to
securities that are considered cash equivalents.

B-2
<PAGE>

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 Fund in seeking to achieve its investment
objective. Numbers in this table show allowable usage only; for actual usage,
consult the Fund's annual/semi-annual reports. For more information see Appen-
dix A.

10 Percent of total assets (italic type)
10 Percent of net assets (roman type)
.. No specific percentage
limitation on
usage;limited only by
the objective and
strategies of the Fund
- --Not permitted
<TABLE>
<CAPTION>
Research
Select
Fund
- -------------------------------------------------------------------------
<S> <C>
Investment Practices
Borrowings 33 1/3
Custodial receipts --
Equity Swaps* 15
Foreign Currency Transactions** .
Futures Contracts and Options on Futures Contracts .
Investment Company Securities (including exchange-traded funds) 10
Options on Securities and Securities Indices/1/ .
Repurchase Agreements .
Securities Lending 33 1/3
Short Sales Against the Box 25
Unseasoned Companies .
Warrants and Stock Purchase Rights .
When-Issued Securities and Forward Commitments .
- -------------------------------------------------------------------------
</TABLE>

* 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.
** Limited by the amount the Fund invests in foreign securities.
/1/The Fund may sell covered call and put options and purchase call and put
options.

C-1
<PAGE>

10 Percent of total assets (italic type)
10 Percent of net assets (roman type)
.. No specific percentage
limitation on usage;
limited only by the
objective andstrategies
of the Fund
- --Not permitted
<TABLE>
<CAPTION>
Research
Select
Fund
- ------------------------------------------------------
<S> <C>
Investment Securities
American and Global Depository Receipts .
Asset-Backed and Mortgage-Backed Securities --
Bank Obligations/2/ .
Convertible Securities --
Corporate Debt Obligations/2/ .
Equity Securities 90+
Emerging Country Securities --
Fixed Income Securities .
Foreign Securities/3/ 10
Non-Investment Grade Fixed Income Securities --
Real Estate Investment Trusts ("REITs") .
Structured Securities* .
Temporary Investments 100
U.S. Government Securities/2/ .
- ------------------------------------------------------
</TABLE>

* 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.
/2/Limited by the amount the Fund invests in fixed-income securities.
/3/The Fund may not invest in foreign government securities.

C-2
<PAGE>

Principal Risks of the Fund

Loss of money is a risk of investing in the Fund. An investment in the 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 follow-
ing summarizes important risks that apply to the Fund and may result in a
loss of your investment. The Fund should not be relied upon as a complete
investment program. There can be no assurance that the Fund will achieve its
investment objective.

INVESTMENT RISKS

<TABLE>
<CAPTION>
Research
Select
.Applicable Fund
-----------------------------------------------------------------------------
<S> <C>
U.S. Select List .
Stock .
Credit/Default .
Foreign .
Derivatives .
Interest Rate .
Management .
Market .
Liquidity .
Small Cap/REIT .
- ------------------------------------------------------------------------------
</TABLE>

.. U.S. Select List Risk--The Fund invests principally in securities included
in the U.S. Select List, which comprises approximately 25 to 35 stocks. As
a result of the small universe of stocks in which the Fund generally
invests, it may be subject to greater risks than would a more diversified
fund. In addition, performance of the securities included in the U.S.
Select List cannot be used to predict the performance of the Fund, an
actively managed mutual fund.

The U.S. Select List is not compiled with any particular client or product
in mind and is not (and will not be) compiled with the Fund in mind. The
Global Investment Research Division could at any time cease publishing the
U.S. Select List. In that event, the Board of Trustees will make a determi-
nation on how to proceed in the best interest of shareholders of the Fund,
consistent with the Fund's investment objective. Goldman Sachs publishes
similar lists of recommended securities that may be appropriate for share-
holders of the Fund but which will not be used by the Investment Adviser
for choosing securities for the Fund at this time.

D-1
<PAGE>

The activities of Goldman Sachs and its affiliates may occasionally limit
the Fund's ability to purchase or sell securities on the U.S. Select List.
The U.S. Select List is also subject to restrictions related to Goldman
Sachs' other businesses, and certain securities may or may not appear on
the list due to other business concerns of, or legal restrictions applica-
ble to, Goldman Sachs.

As a global financial services firm, Goldman Sachs provides a wide range
of financial services to issuers of securities and investors in securi-
ties. Goldman Sachs, its affiliates and others associated with it may cre-
ate markets or specialize in, have positions in and affect transactions
in, securities of companies included on the U.S. Select List and may also
perform or seek to perform financial services for those companies. Within
the last three years, Goldman Sachs or its affiliates may have managed or
co-managed public security offerings for companies included on the U.S.
Select List, and they or their employees may have a long or short position
on holdings in the securities, or options on securities, or other related
investments of companies included on the U.S. Select List.

.. Stock Risk--The risk that stock prices have historically risen and fallen
in periodic cycles. As of the date of this Prospectus, 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.
.. Credit/Default Risk--The risk that an issuer or guarantor of fixed-income
securities held by the Fund (which may have low credit ratings) may
default on its obligation to pay interest and repay principal.
.. Foreign Risk--The risk that when the 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, confisca-
tions and other government restrictions. The Fund will also be subject to
the risk of negative foreign currency rate fluctuations.
.. Derivatives Risk--The risk that loss may result from the Fund's invest-
ments in options, futures, swaps, structured securities and other deriva-
tive instruments. These instruments may be leveraged so that small changes
may produce disproportionate losses to the Fund.
.. Interest Rate Risk--The risk that when interest rates increase, fixed-
income securities held by the Fund will decline in value.
.. Management Risk--The risk that a strategy used by the Investment Adviser
may fail to produce the intended results.
.. Market Risk--The risk that the value of the securities in which the Fund
invests may go up or down in response to the prospects of individual com-
panies and/or general economic conditions. Price changes may be temporary
or last for extended periods.

D-2
<PAGE>

PRINCIPAL RISKS OF THE FUND

..Liquidity Risk--The risk that the Fund will not be able to pay redemption
proceeds within the time period stated in this Prospectus because of unu-
sual market conditions, an unusually high volume of redemption requests, or
other reasons. Because the Fund may invest in small capitalization stocks
and REITs, the Fund will be especially subject to the risk that during cer-
tain 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.
..Small Cap Stock and REIT Risk--The securities of small capitalization
stocks and 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 the Fund to effect sales at an advantageous time or
without a substantial drop in price.

More information about the Fund's portfolio securities and investment tech-
niques, 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.

D-3
<PAGE>

Fund Performance

HOW THE FUND HAS PERFORMED

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

2
<PAGE>

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 the Fund.

<TABLE>
<CAPTION>
Research Select Fund
-----------------------
Class A Class B Class C
- --------------------------------------------------------------------------
<S> <C> <C> <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 1.00% 1.00% 1.00%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses/7/ 0.34% 0.34% 0.34%
- -----------------------------------------------------------------------------
Total Fund Operating Expenses* 1.59% 2.34% 2.34%
- -----------------------------------------------------------------------------
</TABLE>
See page for all other footnotes.

* As a result of current expense limitations, the esti-
mated "Other Expenses" and "Total Fund Operating
Expenses" of the Fund which are actually incurred are
as set forth below. The expense limitations may be
terminated at any time at the option of the Invest-
ment Adviser. If this occurs, "Other Expenses" and
"Total Fund Operating Expenses" may increase without
shareholder approval.

<TABLE>
<CAPTION>
Research Select Fund
-----------------------
Class A Class B Class C
------------------------------------------------------------------------------
<S> <C> <C> <C>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):/6/
Management Fees 1.00% 1.00% 1.00%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses/7/ 0.25% 0.25% 0.25%
------------------------------------------------------------------------------
Total Fund Operating Expenses (after current expense
limitations) 1.50% 2.25% 2.25%
------------------------------------------------------------------------------
</TABLE>

3
<PAGE>

Fund Fees and Expenses (Continued)

/1/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.
/2/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.
/3/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 pur-
chase.
/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 Institu-
tional 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/The Fund's operating expenses for the current fiscal year have been estimat-
ed.
/7/Estimated "Other Expenses" include transfer agency fees equal to 0.19% of
the average daily net assets of the Fund's Class A, B and C Shares, plus all
other ordinary expenses not detailed above. The Investment Adviser has vol-
untarily 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 percentage of the Fund's average daily net
assets:

<TABLE>
<CAPTION>
Other
Fund Expenses
--------------------------
<S> <C>
Research Select 0.06%
</TABLE>

4
<PAGE>

FUND FEES AND EXPENSES

Example
The following Example is intended to help you compare the cost of investing in
the Fund (without the waivers and expense limitations) with the cost of invest-
ing in other mutual funds. The Example assumes that you invest $10,000 in Class
A, B or C Shares of the 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 the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:

<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
- ---------------------------------------------------------
<S> <C> <C> <C> <C>
Research Select
Class A Shares $703 $1,024 N/A N/A
Class B Shares
- Assuming complete
redemption at end of
period $737 $1,030 N/A N/A
- Assuming no redemption $237 $ 730 N/A N/A
Class C Shares
- Assuming complete
redemption at end of
period $337 $ 730 N/A N/A
- Assuming no redemption $237 $ 730 N/A N/A
- ---------------------------------------------------------
</TABLE>

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?"

5
<PAGE>

Service Providers

INVESTMENT ADVISER

<TABLE>
<CAPTION>
Investment Adviser Fund
---------------------------------------------------------
<S> <C>
Goldman Sachs Asset Management ("GSAM") Research Select
32 Old Slip
New York, New York 10005
---------------------------------------------------------
</TABLE>

As of September 1, 1999, the Investment Management Division ("IMD") was
established as a new operating division of Goldman Sachs. This newly created
entity includes GSAM. Goldman Sachs registered as an investment adviser in
1981. The Goldman Sachs Group, L.P., which controlled the Investment Advis-
er, merged into the Goldman Sachs Group, Inc. as a result of an initial pub-
lic offering. As of March 31, 2000, GSAM, along with other units of IMD, had
assets under management of $ billion.

The Investment Adviser provides day-to-day advice regarding the Fund's port-
folio transactions. The Investment Adviser makes the investment decisions
for the Fund and places purchase and sale orders for the Fund's 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 Fund, 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 Fund:
.. Supervises all non-advisory operations of the Fund
.. Provides personnel to perform necessary executive, administrative and
clerical services to the Fund
.. 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 the Fund
.. Provides office space and all necessary office equipment and services

E-1
<PAGE>

MANAGEMENT FEES

As compensation for its services and its assumption of certain expenses, the
Investment Adviser is entitled to the following fee, computed daily and pay-
able monthly, at the annual rate listed below (as a percentage of the Fund's
average daily net assets):

<TABLE>
<CAPTION>
Contractual Rate
----------------------------------
<S> <C>
Research Select 1.00%
----------------------------------
</TABLE>

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.

E-2
<PAGE>

SERVICE PROVIDERS

FUND MANAGERS

Robert B. Litterman, Ph.D., a Managing Director of Goldman Sachs, is the co-
developer, along with the late Fischer Black, of the Black-Litterman Global
Asset Allocation Model, a key tool in IMD's asset allocation process. As
Director of Quantitative Resources, Dr. Litterman oversees Quantitative
Equities, the Quantitative Strategies Group, the Investment Performance &
Valuation Oversight Group, and the Client Research Groups. In total, these
groups include over 120 professionals. Prior to moving to IMD, Dr. Litterman
was the head of the Firmwide Risk department since becoming a Partner in
1994. Preceding his time in the Operations, Technology & Finance Division,
Dr. Litterman spent eight years in the Fixed Income Division's research
department where he was co-director of the research and model development
group.

Quantitative Equity Team
..A stable and growing team supported by an extensive internal staff
..Access to the research ideas of Goldman Sachs' renowned Global Investment
Research Department
..More than $25 billion in equities currently under management
..Proprietary research on quantitative models and tax-advantaged strategies

- --------------------------------------------------------------------------------
Quantitative Equity Team

<TABLE>
<CAPTION>
Years
Primarily Five Year Employment
Name and Title Fund Responsibility Responsible History
- ----------------------------------------------------------------------------------------
<C> <C> <C> <S>
Melissa Brown Senior Portfolio Manager -- Since Ms. Brown joined the
Vice President Research Select 2000 Investment Adviser as a
Product Manager portfolio manager in
for 1998. From
Quantitative 1984 to 1998, she was
Equities the
director of Quantitative
Equity Research and
served on the Investment
Policy Committee at
Prudential Securities.
- ----------------------------------------------------------------------------------------
Kent A. Clark Senior Portfolio Manager-- Since Mr. Clark joined the
Managing Research Select 2000 Investment Adviser as a
Director portfolio manager in the
Director of quantitative equity
Quantitative management team in 1992.
Research
- ----------------------------------------------------------------------------------------
Robert C. Jones Senior Portfolio Manager-- Since Mr. Jones joined the
Managing Research Select 2000 Investment Adviser as a
Director portfolio manager in
Head of 1989.
Quantitative
Equities
- ----------------------------------------------------------------------------------------
Victor H. Senior Portfolio Manager-- Since Mr. Pinter joined the
Pinter Research Select 2000 Investment Adviser as a
Vice President research analyst in
Head of 1990. He became a
Portfolio portfolio manager in
Construction 1992.
- ----------------------------------------------------------------------------------------
</TABLE>

E-3
<PAGE>

DISTRIBUTOR AND TRANSFER AGENT

Goldman Sachs, 85 Broad Street, New York, New York 10004, serves as the
exclusive distributor (the "Distributor") of the Fund's shares. Goldman
Sachs, 4900 Sears Tower, Chicago, Illinois 60606-6372, also serves as the
Fund's 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 Fund. Goldman Sachs reserves the right to redeem at any
time some or all of the shares acquired for its own account.

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

The involvement of the Investment Adviser, Goldman Sachs and their affili-
ates 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 Fund or limit the 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 Fund and/or which engage
in and compete for transactions in the same types of securities, currencies
and instruments as the Fund. 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 Fund. The
results of the Fund's investment activities, therefore, may differ from
those of Goldman Sachs and its affiliates, and it is possible that the Fund
could sustain losses during periods in which Goldman Sachs and its affili-
ates and other accounts achieve significant profits on their trading for
proprietary or other accounts. In addition, the Fund may, from time to time,
enter into transactions in which other clients of Goldman Sachs have an
adverse interest. The 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.

YEAR 2000

Goldman Sachs spent a total of approximately $185 million over the past sev-
eral years to address the potential hardware, software and other computer
and technology problems associated with the transition to Year 2000 and to
confirm that its service providers did the same. As a result of those
efforts, Goldman Sachs did not experience any material disruptions in its
operations as a result of the transition to the Year 2000.

E-4
<PAGE>

Dividends

The Fund pays dividends from net investment income and capital gain net income.
You may choose to have dividends paid in:
..Cash
..Additional shares of the same class of the Fund
..Shares of the same or an equivalent class of another Goldman Sachs Fund. Spe-
cial 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 rein-
vested automatically in the 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 as follows:

<TABLE>
<CAPTION>
Net Investment Capital Gain
Fund Income Net Income
- --------------------------------------------
<S> <C> <C>
Research Select Annually Annually
- --------------------------------------------
</TABLE>

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

At the time of an investor's purchase of shares of the Fund, a portion of the
NAV per share may be represented by undistributed income or undistributed real-
ized 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 distribu-
tions, reduced below the cost of such shares and the distributions (or portions
thereof) represent a return of a portion of the purchase price.

E-5
<PAGE>

Shareholder Guide

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

HOW TO BUY SHARES

How Can I Purchase Class A, Class B And Class C Shares Of The Fund?
You may purchase shares of the Fund through:
.. Goldman Sachs;
.. Authorized Dealers; or
.. Directly from Goldman Sachs Trust (the "Trust").

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

To Open an Account:
.. Complete the enclosed 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") (the Fund's custodian). Please call the Fund at 1-800-526-7384
to get detailed instructions on how to wire your money.

6
<PAGE>

SHAREHOLDER GUIDE

What Is My Minimum Investment In The Fund?

<TABLE>
<CAPTION>
Initial Additional
------------------------------------------------------------------------------
<S> <C> <C>
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
------------------------------------------------------------------------------
</TABLE>

What Alternative Sales Arrangements Are Available?
The Fund offers three classes of shares through this Prospectus.

<TABLE>
<S> <C> <C>
-------------------------------------------------------------
Maximum Amount You Can Class A No limit
-------------------------------------
Buy In The Aggregate 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
-------------------------------------------------------------
</TABLE>

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).

7
<PAGE>

.. Reject or restrict any purchase or exchange order by a particular pur-
chaser (or group of related purchasers). This may occur, for example, when
a pattern of frequent purchases, sales or exchanges of shares of the 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 the
Fund.
.. Close the Fund to new investors from time to time and reopen the Fund
whenever it is deemed appropriate by the 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 Fund may allow you to purchase shares with securities instead of cash if
consistent with the 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 deter-
mined by the Fund's NAV and share class. Each class calculates its NAV as
follows:

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

.. 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 Fund
receives your order in proper form, plus any applicable sales charge.
.. When you sell shares, you receive the NAV next calculated after the Fund
receives 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.

8
<PAGE>

SHAREHOLDER GUIDE

mally not be reflected in the Fund's next determined NAV unless the Trust,
in its discretion, makes an adjustment in light of the nature and material-
ity 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 the 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 fol-
lows:

<TABLE>
<CAPTION>
Sales Charge Maximum Dealer
Sales Charge as as Percentage Allowance as
Amount of Purchase Percentage of of Net Amount Percentage of
(including sales charge, if any) Offering Price Invested Offering Price*
---------------------------------------------------------------------------------
<S> <C> <C> <C>
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** ***
---------------------------------------------------------------------------------
</TABLE>

* Dealer's allowance may be changed periodically. During special promo-
tions, 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 pays a one-time commission to Authorized Dealers who
initiate or are responsible for purchases of $1 million or more of
shares of the Fund 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 com-
mission 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 com-
pany-sponsored benefit plans investing in the Fund 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. Pur-
chases 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 pay-
ments 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.

9
<PAGE>

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, exclud-
ing 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 redemp-
tions 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 Fund 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-spon-
sored 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 administra-
tors 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;

10
<PAGE>

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 dis-
cretion; 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 exemp-
tion. 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 Fund's 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 commit-
ment to invest in the aggregate $50,000 or more (not counting reinvest-
ments of dividends and distributions) within a period of 13 months in
Class A Shares of one or more Goldman Sachs Funds. 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.

11
<PAGE>

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 Fund at the next determined NAV with-
out 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:

<TABLE>
<CAPTION>
CDSC as a
Percentage of
Dollar Amount
Year Since Purchase Subject to CDSC
----------------------------------------
<S> <C>
First 5%
Second 4%
Third 3%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh and thereafter None
----------------------------------------
</TABLE>

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 Fund 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 Deal-
ers.

What Should I Know About The Automatic Conversion Of Class B Shares?
Class B Shares of the Fund will automatically convert into Class A Shares of
the Fund at the end of the calendar quarter that is eight years after the
purchase date.

If you acquire Class B Shares of the 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 Fund is advised that such conversions may constitute taxable events
for federal tax purposes, which the Fund believes is unlikely. If conver-
sions do not occur as a

12
<PAGE>

SHAREHOLDER GUIDE

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 Fund at the next determined NAV with-
out 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 pen-
sion 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 Fund 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 Dis-
tributor 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 capi-
tal 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 Fund 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.

13
<PAGE>

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-spon-
sored 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 benefi-
ciary 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 Retire-
ment 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-regis-
tered 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 Fund reserves 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 serv-
ice fee paid by Class B

14
<PAGE>

SHAREHOLDER GUIDE

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 divi-
dend 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, the 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 Fund?
You may arrange to take money out of your account by selling (redeeming)
some or all of your shares. The 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.

15
<PAGE>

<TABLE>
<CAPTION>
Instructions For Redemptions:
--------------------------------------------------------------------
<S> <C>
By Writing: .Write a letter of instruction that includes:
.Your name(s) and signature(s)
.Your account number
.The Fund name and Class of Shares
.The dollar amount you want to sell
.How and where to send the proceeds
.Obtain a signature guarantee (see details below)
.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:
.1-800-526-7384
(8:00 a.m. to 4:00 p.m. New York time)
.You may redeem up to $50,000 of your shares
within any 7 calendar day period
.Proceeds which are sent directly to a Goldman
Sachs brokerage account are not subject to the
$50,000 limit
--------------------------------------------------------------------
</TABLE>

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 the Trust. A notary public cannot
provide a signature guarantee. Additional documentation may be required for
executors, trustees or corporations or when deemed appropriate by the Trans-
fer Agent.

16
<PAGE>

SHAREHOLDER GUIDE

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.

In an effort to prevent unauthorized or fraudulent redemption and exchange
requests by telephone, Goldman Sachs and NFDS each employ reasonable proce-
dures 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 guar-
antee, indicating another address or account) and exchanges of shares nor-
mally 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 tel-
ephone 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 fol-
lowing 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 pro-
ceeds by wire. Your bank may also charge wiring fees. You should contact
your bank directly to learn whether it charges such fees.

17
<PAGE>

.. 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.

The Trust reserves the right to:
.. Redeem your shares if your account balance is less than $50 as a result of
a redemption. The Fund 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 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 distribu-
tions be returned to the Fund as undeliverable or remain uncashed for six
months. In addition, that distribution and all future distributions pay-
able to you will be reinvested at NAV in additional Fund shares . No
interest will accrue on amounts represented by uncashed distribution or
redemption checks.

18
<PAGE>

SHAREHOLDER GUIDE

Can I Reinvest Redemption Proceeds In The Same Or Another Goldman Sachs
Fund?
You may redeem shares of the Fund and reinvest a portion or all of the
redemption proceeds (plus any additional amounts needed to round off pur-
chases 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 Fund or any other Goldman Sachs
Fund
.. Class C Shares--Class C Shares of the 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-shel-
tered 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 capital gains tax as a result of a redemption. You
should consult your tax adviser concerning the tax consequences of a
redemption and reinvestment.

19
<PAGE>

Can I Exchange My Investment From One Fund To Another?
You may exchange shares of the Fund at NAV without the imposition of an ini-
tial 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.

<TABLE>
<CAPTION>
Instructions For Exchanging Shares:
-------------------------------------------------------------------
<S> <C>
By Writing: .Write a letter of instruction that includes:
.Your name(s) and signature(s)
.Your account number
.The Fund names and Class of Shares
.The dollar amount you want to exchange
.Obtain a signature guarantee (see details above)
.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:
.1-800-526-7384 (8:00 a.m. to 4:00 p.m.
New York time)
-------------------------------------------------------------------
</TABLE>

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.
.. Six free exchanges are allowed in each 12 month period.
.. A $12.50 fee may be charged for each subsequent 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

20
<PAGE>

SHAREHOLDER GUIDE

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 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 eco-
nomic 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 regis-
tered account. Shares may be exchanged among accounts with different
names, addresses and social security or other taxpayer identification num-
bers only if the exchange instructions are in writing and accompanied by a
signature guarantee.

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 con-
sult 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 And Distributions From The Fund Be Invested In Other Funds?
You may elect to cross-reinvest dividends and capital gain distributions
paid by the 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.

21
<PAGE>

.. 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 the 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.

22
<PAGE>

SHAREHOLDER GUIDE

.. You must have a minimum balance of $5,000 in the Fund.
.. Checks are mailed on or about the 25th day of each month.
.. Each systematic withdrawal is a redemption and therefore a taxable trans-
action.
.. The CDSC applicable to Class A, Class B or Class C Shares redeemed under
the systematic withdrawal plan may be waived.

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 state-
ment 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 finan-
cial 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 Fund will
begin sending individual copies to you within 30 days after receipt of your
revocation.

The Fund does 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 the Fund are held in a "street name" account with an Authorized
Dealer, all recordkeeping, transaction processing and payments of distribu-
tions relating to your account will be performed by the Authorized Dealer,
and not by the Fund and its Transfer Agent. Since the Fund will have no rec-
ord of your transactions, you should contact the Authorized Dealer to pur-
chase, 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

23
<PAGE>

by or on behalf of their customers, and if approved by the Trust, to desig-
nate other intermediaries to accept such orders. In these cases:
.. The 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 Fund 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 addi-
tional compensation from time to time, out of their assets and not as an
additional charge to the Fund, to selected Authorized Dealers and other per-
sons in connection with the sale, distribution and/or servicing of shares of
the Fund 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 their arrangements. Goldman Sachs pays the distribu-
tion and service fees on a quarterly basis.

Under the Plans, Goldman Sachs is entitled to a monthly fee from the Fund
for distribution services equal, on an annual basis, to 0.25%, 0.75% and
0.75%, respectively, of the 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;

24
<PAGE>

SHAREHOLDER GUIDE

.. Telephone and travel expenses;
.. Interest and other costs associated with the financing of such compensa-
tion and expenses;
.. Printing of prospectuses for prospective shareholders;
.. Preparation and distribution of sales literature or advertising of any
type; and
.. 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 the Fund's average daily net assets
attributed to 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 simi-
lar services not otherwise provided on behalf of the Fund. If the fees
received by Goldman Sachs pursuant to the Plans exceed its expenses, Goldman
Sachs may realize a profit from this arrangement.

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.

25
<PAGE>

Taxation

TAXABILITY OF DISTRIBUTIONS

As with any investment, you should consider how your investment in the Fund
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 con-
sequences of your investment in the Fund.

You should consider the possible tax consequences of Fund distributions and
the sale of your Fund shares.

TAXES ON DISTRIBUTIONS

Distributions you receive from the Fund 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 Fund's income dividend distribu-
tions and short-term capital gain distributions are taxable to you as ordi-
nary 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 Fund's dividends paid to corporate shareholders may be eligible for
the corporate dividends-received deduction. The Fund will inform sharehold-
ers of the character and tax status of all distributions promptly after the
close of each calendar year.

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

If you buy shares of the Fund before it makes a distribution, the distribu-
tion 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."

F-1
<PAGE>

TAXABILITY OF 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 purpos-
es, 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. Gen-
erally, 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, the 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.

F-2
<PAGE>

Appendix A

Additional Information on Portfolio Risks, Securities and Techniques

A. General Portfolio Risks

The Fund 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 the 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 Fund may increase or decrease. As of the
date of this Prospectus, certain stock markets were trading at or close to
record high levels and there can be no guarantee that such levels will con-
tinue.

To the extent that the Fund invests in fixed-income securities, the Fund
will also be subject to the risks associated with its fixed-income securi-
ties. These risks include interest rate risk and credit risk. In general,
interest rate risk involves the risk that when interest rates decline, the
market value of fixed-income securities tends to increase. Conversely, when
interest rates increase, the market value of fixed-income securities tends
to decline. Credit risk involves the risk that an issuer could default on
its obligations, and the Fund will not recover its investment.

The Investment Adviser will not consider the portfolio turnover rate a lim-
iting factor in making investment decisions for the Fund. A high rate of
portfolio turnover (100% or more) involves correspondingly greater expenses
which must be borne by the Fund and its shareholders, and is also likely to
result in higher short-term capital gains taxable to shareholders. The port-
folio 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 the 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 secu-
rities and investment techniques that may be used by the Fund, including
their associated risks. Additional information is provided in the Additional
Statement, which is available upon request. Among other things, the Addi-
tional Statement describes certain fundamental investment restrictions that
cannot be changed without shareholder approval. You should note, however,
that the investment objective and all

G-1
<PAGE>

policies not specifically designated as fundamental are non-fundamental and
may be changed without shareholder approval. If there is a change in the
Fund's investment objective, you should consider whether the Fund remains an
appropriate investment in light of your then current financial position and
needs.

B. Other Portfolio Risks

Risks of Investing in Small Capitalization Companies and REITs. The Fund may
invest in small capitalization companies and REITs. Investments in small
capitalization companies and REITs involve greater risk and portfolio price
volatility than investments in larger capitalization stocks. Among the rea-
sons for the greater price volatility of these investments are the less cer-
tain growth prospects of smaller firms and the lower degree of liquidity in
the markets for such securities. Small capitalization companies and REITs
may be thinly traded and may have to be sold at a discount from current mar-
ket 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 mar-
ket liquidity, the 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 and REITs include "unseasoned"
issuers that do not have an established financial history; often have lim-
ited 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 capitaliza-
tion companies and REITs may be more difficult to price precisely than other
types of securities because of their characteristics and lower trading vol-
umes.

Risks of Foreign Investments. The 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 the Fund receives dividends, interest or
other payments declines in value against the U.S. dollar before

G-2
<PAGE>

APPENDIX A

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 par-
ticipating nations in the European Economic and Monetary Union presents
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 Fund. Because of the
number of countries using this single currency, a significant portion of the
foreign assets held by the Fund 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 proce-
dures have been unable to keep pace with the volume of securities transac-
tions, 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 gov-
ernment 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 secu-
rities of many foreign issuers are less liquid and more volatile than secu-
rities 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 divi-
dend or interest payments (or, in some cases, capital gains), limitations on
the removal of funds or other assets of the Fund, and political or social
instability or diplomatic developments which could affect investments in
those countries.

G-3
<PAGE>

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

Investments in foreign securities may take the form of sponsored and
unsponsored American Depository Receipts ("ADRs") and Global Depository
Receipts ("GDRs"). 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. GDRs
are receipts evidencing an arrangement with a non-U.S. bank. GDRs are not
necessarily quoted in the same currency as the underlying security.

Risks of Derivative Investments. The 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. The 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. The 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
..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.

Investing in 144A Securities may decrease the liquidity of the Fund's port-
folio 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

G-4
<PAGE>

APPENDIX A

significant, from the market price of comparable securities for which a liq-
uid market exists.

Credit Risks. Debt securities purchased by the Fund may include securities
(including zero coupon bonds) issued by the U.S. government (and its agen-
cies, 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.

Temporary Investment Risks. The 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 the Fund's assets are invested in such instruments, the Fund may not be
achieving its investment objective.

C. Portfolio Securities and Techniques

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

Foreign Currency Transactions. The 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. The Fund may engage in foreign currency transactions
for hedging purposes and to

G-5
<PAGE>

seek to protect against anticipated changes in future foreign currency
exchange rates. In addition, the Fund may also enter into such transactions
to seek to increase total return, which is considered a speculative prac-
tice.

The 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 cor-
relation between the two currencies. The 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, the Fund's NAV to fluctuate (when
the Fund's NAV fluctuates, the value of your shares may go up or down). Cur-
rency exchange rates also can be affected unpredictably by the intervention
of U.S. or foreign governments or central banks, or the failure to inter-
vene, 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 obli-
gations. Since these contracts are not guaranteed by an exchange or clear-
inghouse, a default on a contract would deprive the Fund of unrealized prof-
its, 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. The Fund may invest in structured securities. Struc-
tured 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 posi-
tively or negatively indexed, so that appreciation of the Reference may pro-
duce 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 Refer-
ence. 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.

G-6
<PAGE>

APPENDIX A

REITs. The 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 invest-
ments 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. The Fund will indirectly bear its proportion-
ate 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 dur-
ing 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. The 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 comprised of
securities in which it may invest. The 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 con-
sidered a speculative activity). The successful use of options depends in
part on the ability of the Investment Adviser to manage future price fluctu-
ations 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 the Fund's investment portfolio, the Fund may incur losses
that it would not otherwise incur. The use of options can also increase the
Fund's transaction costs. Options written or purchased by the Fund 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.

G-7
<PAGE>

Futures Contracts and Options on Futures Contracts. Futures contracts are
standardized, exchange-traded contracts that provide for the sale or pur-
chase 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 Fund may engage in futures transac-
tions on both U.S. and foreign exchanges.

The 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 the Fund invests in foreign securities, currency
exchange rates, or to otherwise manage its term structure, sector selection
and duration in accordance with its investment objective and policies. The
Fund may also enter into closing purchase and sale transactions with respect
to such contracts and options. The Fund will engage in futures and related
options transactions for bona fide hedging purposes as defined in regula-
tions of the Commodity Futures Trading Commission or to seek to increase
total return to the extent permitted by such regulations. The 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 transac-
tions, 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 the 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 posi-
tion that is intended to be protected is impossible to achieve, the desired
protection may not be obtained and the Fund may be exposed to additional
risk of loss.
..The loss incurred by the 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 the Fund's NAV.

G-8
<PAGE>

APPENDIX A

..As a result of the low margin deposits normally required in futures trad-
ing, a relatively small price movement in a futures contract may result in
substantial losses to the 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. The Fund may invest in equity swaps. Equity swaps allow the
parties to a swap agreement to exchange the dividend income or other compo-
nents 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 the 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, the 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, the Fund may suffer a loss if the
counterparty defaults.

When-Issued Securities and Forward Commitments. The 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 the Fund will gener-
ally purchase securities on a when-issued or forward commitment basis with
the intention of acquiring the securities for its portfolio, the 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 securi-
ties subject to the seller's agreement to repurchase them at a mutually
agreed upon date and price. The Fund may enter into repurchase agreements
with dealers in U.S. government securities and member banks of the Federal
Reserve System

G-9
<PAGE>

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, the 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 agree-
ment. In addition, in the event of bankruptcy of the seller, the 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. The
Fund, together with other registered investment companies having advisory
agreements with the Investment Adviser or any of its affiliates, may trans-
fer uninvested cash balances into a single joint account, the daily aggre-
gate balance of which will be invested in one or more repurchase agreements.

Lending of Portfolio Securities. The Fund may engage in securities lending.
Securities lending involves the lending of securities owned by the 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 deprecia-
tion or appreciation, and the 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 33 1/3% of the value of the total assets of
the Fund (including the loan collateral).

The Fund may lend its securities to increase its income. The Fund may, how-
ever, 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.

Preferred Stock, Warrants and Rights. The 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 earn-
ings 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.

G-10
<PAGE>

APPENDIX A

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. The Fund may invest in securities of other
investment companies (including SPDRs and WEBS as defined below and other
exchange-traded funds) subject to statutory limitations prescribed by the
Act. These limitations include a prohibition on the Fund acquiring more than
3% of the voting shares of any other investment company, and a prohibition
on investing more than 5% of the 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. The Fund will indirectly bear its proportionate
share of any management fees and other expenses paid by such other invest-
ment companies. Exchange-traded funds such as SPDRs and WEBS 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 Depository Receipts. The Fund may, consistent with its
investment policies, purchase Standard & Poor's Depository 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 han-
dling 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.

..World Equity Benchmark Shares. World Equity Benchmark Shares ("WEBS") are
shares of an investment company that invests substantially all of its
assets in securities included in the MSCI indices for specified countries.
WEBS are listed on the AMEX and were initially offered to the public in
1996. The market prices of WEBS are expected to fluctuate in accordance
with both changes in the NAVs of their underlying indices and supply and
demand of WEBS on the AMEX. To date, WEBS have traded at relatively modest
discounts and premiums to their NAVs. However, WEBS have a limited operat-
ing history and information is lacking regarding the actual performance and
trading liquidity of WEBS 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 WEBS will continue to be met or
will remain unchanged. In the event substantial market or other disruptions
affecting WEBS

G-11
<PAGE>

should occur in the future, the liquidity and value of the Fund's shares
could also be substantially and adversely affected. If such disruptions
were to occur, the Fund could be required to reconsider the use of WEBS as
part of its investment strategy.

Unseasoned Companies. The Fund may invest in companies (including predeces-
sors) which have operated less than three years. The securities of such com-
panies 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. The Fund may invest in corporate debt obliga-
tions 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 suprana-
tional entities (i.e., the World Bank, the International Monetary Fund,
etc.).

Bank Obligations. The 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. The Fund may invest in U.S. government securi-
ties. U.S. government securities include U.S. Treasury obligations and obli-
gations 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. govern-
ment to purchase certain obligations of the

G-12
<PAGE>

APPENDIX A

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.

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

Short Sales Against-the-Box. The 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 secu-
rities 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.

G-13
<PAGE>

Appendix B

Prior Price Returns of the U.S. Select List

U.S. Select List

As mentioned in "Fund Investment Objectives and Strategies," the U.S. Select
List was introduced on September 9, 1998 and comprises approximately 25 to
35 stocks that the Goldman Sachs U.S. Stock Selection Committee expects, as
a portfolio, to outperform its benchmark, the S&P 500 Index, over the next
twelve to eighteen months. The U.S. Select List changes regularly. While the
companies on the list generally have been relatively large, well known U.S.
companies, the list is not restricted to those types of companies.

The Fund's portfolio management team does not have access to information
regarding additions or deletions for the U.S. Select List prior to their
publication. Goldman Sachs publishes other lists of recommended securities
that could be appropriate for Fund investors but that are not used by the
Fund's portfolio management team.

The chart below reflects historical information regarding the U.S. Select
List. The U.S. Select List is not maintained for the purpose of managing any
account or investment company such as the Fund. The number of stocks on the
U.S. Select List and the frequency of additions to and deletions from the
U.S. Select List change from time to time, and there are no targets for such
numbers in future years. The stocks selected for the U.S. Select List con-
stitute only a "paper portfolio" that does not reflect actual trading and
does not have an actual performance record. The U.S. Select List's price
return shown is simply an equal-weighted arithmetic average of the price
returns for the stocks selected for the U.S. Select List. It does not repre-
sent the return on any fund or any other account that involves actual trad-
ing. The price returns would not be indicative of the returns on any fund or
account because, among other things, they do not reflect actual prices when
stocks are purchased or sold, transaction costs and account fees. In addi-
tion, because the U.S. Select List does not include a cash component, price
returns are based on a constant 100% investment in the stocks on the U.S.
Select List. Also, the information below does not reflect the impact that
the Investment Adviser's portfolio management decisions and techniques may
have on performance. In addition, the actual performance of the Fund may
differ from that of the U.S. Select List because of time delays between when
a stock is added or removed from the list and when it is bought or sold for
the Fund. Investors should not consider this price return information as a
substitute for, or an indication of, future performance

H-1
<PAGE>

of the Research Select Fund or the Investment Adviser. Finally, past price
returns of the U.S. Select List are not representative of future price
returns of the list.

<TABLE>
<CAPTION>
9/9/98 9/9/98
(inception) 12/31/98 12/31/99 (inception)
to to to to
12/31/98 12/31/99 3/31/00 3/31/00
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Average Number of Stocks on the U.S.
Select List* -- -- -- --
Number of Additions and Deletions + -- + -- + -- + --
- -- - -- - -- - --
U.S. Select List Stock Price Return
(as a %) (using prices at the open
after publication)** 31.94% 33.81% 11.9% 106.1%+
S&P 500 Index Price Return
(as a %)*** 19.32% 21.04% 2.3% 51.86%+
- -------------------------------------------------------------------------------
</TABLE>

+ Compound annual rate.
* The number of stocks shown is an annual average. At any time during the
year, the number of stocks on the U.S. Select List may have been higher
or lower.
** The price returns are based only on capital appreciation or depreciation
of the stocks included in the U.S. Select List. The results for the U.S.
Select List portfolio represent an equal-weighted arithmetic average of
the stocks held at any point during the month. The results are
calculated monthly using each stock's capital appreciation or
depreciation during the period that it is on the U.S. Select List and
dividing that by the highest number of stocks that were on the U.S.
Select List at any point during the month. The results are calculated
using the prices of the stocks at the opening of the stock market after
changes to the U.S. Select List are announced. They do not reflect the
execution of actual purchases or sales, and there is no guarantee that a
mutual fund following the U.S. Select List would be able to execute
purchases and sales at the prices used to calculate the price returns.
Because the U.S. Select List is a paper portfolio that is not managed to
a target number of stocks, no "re-balancing" of actual investments is
done when stocks are added to or deleted from the U.S. Select List.
Price returns are based on 100% investment in the stocks on the U.S.
Select List.
The price returns shown do not reflect the reinvestment of dividends,
which would result in higher returns. They do not reflect the market
impact on the stock prices that may occur between the time the
publication is made of additions to and deletions from the U.S. Select
List and the time a mutual fund following the U.S. Select List would be
able to execute purchases and sales. They also do not reflect transaction
fees, such as commissions, fees and interest charges, or the costs of
running a mutual fund, such as management fees, distribution fees and
other expenses. They do not reflect the impact that an investment
adviser's portfolio management decisions and techniques may have on a
mutual fund's returns. Actual transactions and the effect of dividends,
fees and costs will result in returns that differ from those of the U.S.
Select List.
*** The S&P 500 Index is an unmanaged index containing common stocks of 500
industrial, transportation, utility and financial companies, regarded as
generally representative of the U.S. stock market. The S&P 500 Index
performance numbers shown are price returns only. The price returns
shown do not reflect the reinvestment of dividends, which would result
in higher returns. They also do not reflect fees, brokerage commissions
or other costs of investing that are not incurred by an index.

H-2
<PAGE>

Index

<TABLE>
<C> <C> <S>
1 General Investment
Management Approach
2 Fund Investment Objective
and Strategies
2 Goldman Sachs Research Select Fund
4 Other Investment Practices and
Securities
6 Principal Risks of the Fund
9 Fund Performance
10 Fund Fees and Expenses
13 Service Providers
17 Dividends
18 Shareholder Guide
18 How To Buy Shares
27 How To Sell Shares
38 Taxation
40 Appendix A
Additional Information on Portfolio
Risks, Securities and Techniques
</TABLE>
<PAGE>

Research Select Fund
Prospectus (Class A, B and C Shares)

FOR MORE INFORMATION

Annual/Semi-annual Report
Additional information about the Fund's investments is available in the
Fund's annual and semi-annual reports to shareholders. In the Fund's annual
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the
last fiscal year. As of the date of this Prospectus, the Research Select
Fund had not commenced operations, and its annual report for the fiscal
period ended August 31, 2000 will become available to shareholders in Octoer
2000.

Statement of Additional Information
Additional information about the Fund and its policies is also available in
the Fund's Additional Statement. The Additional Statement is incorporated by
reference into this Prospectus (is legally considered part of this Prospec-
tus).

The Fund's 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 Fund's 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.

[LOGO OF GOLDMAN SACHS]

The Fund's investment company registration number is 811-5349.

RESPROABC
<PAGE>

Preliminary Prospectus dated April 5, 2000
Subject to Completion

Prospectus

Institutional
Shares

June 19,
2000

GOLDMAN SACHS RESEARCH SELECT FUND

[Artwork to Appear Here]

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]

<PAGE>

NOT FDIC-INSURED May Lose Value No Bank Guarantee

<PAGE>

General Investment Management Approach

RESEARCH STYLE FUNDS--RESEARCH SELECT FUND

A-1
<PAGE>

Fund Investment Objective and Strategies
Goldman Sachs
Research Select Fund

FUND FACTS
- --------------------------------------------------------------------------------

Objective: Long-term growth of capital

Benchmark: S&P 500 Index

Investment Focus: A focused portfolio of U.S. equity securities that offer
the potential for long-term capital appreciation

INVESTMENT OBJECTIVE

The Fund seeks to provide long-term growth of capital through participation
in a focused portfolio of U.S. equity securities.

PRINCIPAL INVESTMENT STRATEGIES

B-1
<PAGE>

The U.S. Select List is used primarily by institutional clients.

Other. The Fund's investments in fixed-income securities are limited to
securities that are considered cash equivalents.

B-2
<PAGE>

Other Investment Practices and Securities

C-1
<PAGE>

10 Percent of total assets (italic type)
10 Percent of net assets (roman type)
.. No specific percentage
limitation on usage;
limited only by the
objective andstrategies
of the Fund
- --Not permitted
<TABLE>
<CAPTION>
Research
Select
Fund
- ------------------------------------------------------
<S> <C>
Investment Securities
American and Global Depository Receipts .
Asset-Backed and Mortgage-Backed Securities --
Bank Obligations/2/ .
Convertible Securities --
Corporate Debt Obligations/2/ .
Equity Securities 90+
Emerging Country Securities --
Fixed Income Securities .
Foreign Securities/3/ 10
Non-Investment Grade Fixed Income Securities --
Real Estate Investment Trusts ("REITs") .
Structured Securities* .
Temporary Investments 100
U.S. Government Securities/2/ .
- ------------------------------------------------------
</TABLE>

C-2
<PAGE>

Principal Risks of the Fund

INVESTMENT RISKS

D-1
<PAGE>

D-2
<PAGE>

PRINCIPAL RISKS OF THE FUND

D-3
<PAGE>

Fund Performance

HOW THE FUND HAS PERFORMED

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

2
<PAGE>

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 the Fund.

<TABLE>
<CAPTION>
Research
Select
Fund
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shareholder Fees
(fees paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends None
Redemption Fees None
Exchange Fees None
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):/1/
Management Fees 1.00%
Distribution and Service (12b-1) Fees None
Other Expenses/2/ 0.19%
- -----------------------------------------------------------------------
Total Fund Operating Expenses* 1.19%
- -----------------------------------------------------------------------
</TABLE>
See page for all other footnotes.

<TABLE>
<CAPTION>
Research
Select
Fund
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):/1/
Management Fees 1.00%
Distribution and Services (12b-1) Fees None
Other Expenses/2/ 0.10%
---------------------------------------------------------------------------
Total Fund Operating Expenses (after current expense
limitations) 1.10%
---------------------------------------------------------------------------
</TABLE>

3
<PAGE>

Fund Fees and Expenses (continued)

/1/The operating expenses for the Fund are estimated for the current year.
/2/Estimated "Other Expenses" include transfer agency fees equal to 0.04% of
the average daily net assets of the 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 percentage of the Fund's
average daily net assets:

<TABLE>
<CAPTION>
Other
Fund Expenses
- -------------------------
<S> <C>
Research Select 0.06%
</TABLE>

4
<PAGE>

FUND FEES AND EXPENSES

Example

The following Example is intended to help you compare the cost of investing in
the Fund (without the waivers and expense limitations) with the cost of invest-
ing in other mutual funds. The Example assumes that you invest $10,000 in
Institutional Shares of the 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 the Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:

<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------
<S> <C> <C> <C> <C>
Research Select $121 $378 N/A N/A
- ------------------------------------------------
</TABLE>

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 regard-
ing such charges. Such fees, if any, may affect the return such customers real-
ize with respect to their investments.

Certain institutions that invest in Institutional Shares may receive other com-
pensation in connection with the sale and distribution of Institutional Shares
or for services to their customers' accounts and/or the Fund. For additional
information regarding such compensation, see "Shareholder Guide" in the Pro-
spectus and "Other Information" in the Statement of Additional Information
("Additional Statement").

5
<PAGE>

Service Providers

INVESTMENT ADVISER

E-1
<PAGE>

MANAGEMENT FEES

<TABLE>
<CAPTION>
Contractual Rate
----------------------------------
<S> <C>
Research Select 1.00%
----------------------------------
</TABLE>

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.

E-2
<PAGE>

SERVICE PROVIDERS

FUND MANAGERS

- --------------------------------------------------------------------------------
Quantitative Equity Team

E-3
<PAGE>

DISTRIBUTOR AND TRANSFER AGENT

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

YEAR 2000

E-4
<PAGE>

Dividends

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 as follows:

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

E-5
<PAGE>

Shareholder Guide

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

HOW TO BUY SHARES

How Can I Purchase Institutional Shares Of The Fund?
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") (the
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 the Fund, you must furnish to the
Fund or Goldman Sachs the Account Application attached to this Prospectus.
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 guaran-
tees must be obtained from a bank, brokerage firm or other financial interm-
ediary that is a member of an approved Medallion Guarantee Program or that
is otherwise approved by the Trust. A notary public cannot provide a signa-
ture guarantee.

How Do I Purchase Shares Through A Financial Institution?
Certain institutions (including banks, trust companies, brokers and invest-
ment 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:
.. The 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 busi-
ness day, and the order will be priced at the Fund's NAV next determined
after such acceptance.

6
<PAGE>

SHAREHOLDER GUIDE

.. Authorized institutions and intermediaries will be responsible for trans-
mitting 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 Fund or Goldman Sachs for
the services provided by them with respect to the Fund's Institutional
Shares. These payments may be in addition to other payments borne by the
Fund.

The Investment Adviser, Distributor and/or their affiliates may pay addi-
tional compensation from time to time, out of their assets and not as an
additional charge to the Fund, to certain institutions and other persons in
connection with the sale, distribution and/or servicing of shares of the
Fund 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, the 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.

7
<PAGE>

What is My Minimum Investment in the Fund?

<TABLE>
<CAPTION>
Type of Investor Minimum Investment
-------------------------------------------------------------------------------
<S> <C>
. Banks, trust companies or $1,000,000 in Institutional Shares of the Fund
other depository alone or in combination with other assets
institutions investing for under the management of GSAM and its affiliates
their own account or on
behalf of clients
. Pension and profit sharing
plans, pension funds and
other company-sponsored
benefit plans
. State, county, city or any
instrumentality,
department, authority or
agency thereof
. Corporations with at least
$100 million in assets or
in outstanding publicly
traded securities
. "Wrap" account sponsors
(provided they have an
agreement covering the
arrangement with GSAM)
. Registered investment
advisers investing for
accounts for which they
receive asset-based fees
-------------------------------------------------------------------------------
. Individual investors $10,000,000
. Qualified non-profit
organizations, charitable
trusts, foundations and
endowments
. Accounts over which GSAM or
its advisory affiliates
have investment discretion
-------------------------------------------------------------------------------
</TABLE>
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 pur-
chaser (or group of related purchasers). This may occur, for example, when
a pattern of frequent purchases, sales or exchanges of Institutional
Shares of the 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 the Fund.
.. Close the Fund to new investors from time to time and reopen the Fund
whenever it is deemed appropriate by the Fund's Investment Adviser.

8
<PAGE>

SHAREHOLDER GUIDE

The Fund may allow you to purchase shares with securities instead of cash if
consistent with the 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 the Fund's NAV. The Fund calculates NAV as follows:

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

The Fund's investments are valued based on market quotations or, if accurate
quotations are not readily available, the fair value of the Fund's invest-
ments may be determined in good faith under procedures established by the
Trustees.
.. 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 Fund
receives your order in proper form.
.. When you sell shares, you receive the NAV next calculated after the Fund
receives your order in proper form.

In addition, the impact of events that occur after the publication of market
quotations used by the 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 the 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.

9
<PAGE>

HOW TO SELL SHARES

How Can I Sell Institutional Shares Of The Fund?
You may arrange to take money out of your account by selling (redeeming)
some or all of your shares. Generally, the Fund will redeem its Institu-
tional Shares upon request on any business day at their NAV next determined
after receipt of such request in proper form. You may request that redemp-
tion 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.

<TABLE>
<CAPTION>
Instructions For Redemptions:
-------------------------------------------------------------------
<S> <C>
By Writing: .Write a letter of instruction that includes:
.Your name(s) and signature(s)
.Your account number
.The Fund name and Class of Shares
.The dollar amount you want to sell
.How and where to send the proceeds
.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:
.1-800-621-2550
(8:00 a.m. to 4:00 p.m. New York time)
-------------------------------------------------------------------
</TABLE>
Certain institutions and intermediaries are authorized to accept redemption
requests on behalf of the Fund 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 tele-
phone 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

10
<PAGE>

SHAREHOLDER GUIDE

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?
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 fol-
lowing 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.
.. 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 redemp-
tion 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.

11
<PAGE>

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 Fund 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.
.. 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 distribu-
tions be returned to the Fund as undeliverable or remain uncashed for six
months. In addition, that distribution and all future distributions pay-
able to you will be reinvested at NAV in additional Fund shares. No inter-
est will accrue on amounts represented by uncashed distribution or redemp-
tion checks.

12
<PAGE>

SHAREHOLDER GUIDE

Can I Exchange My Investment From One Fund To Another?
You may exchange Institutional Shares of the Fund at NAV for Institutional
Shares of any other Goldman Sachs Fund. The exchange privilege may be mate-
rially modified or withdrawn at any time upon 60 days' written notice to
you.

<TABLE>
<CAPTION>
Instructions For Exchanging Shares:
---------------------------------------------------------------
<S> <C>
By Writing: .Write a letter of instruction that includes:
.Your name(s) and signature(s)
.Your account number
.The Fund names and Class of Shares
.The dollar amount to be exchanged
.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:
.1-800-621-2550
(8:00 a.m. to 4:00 p.m. New York time)
---------------------------------------------------------------
</TABLE>

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 regis-
tered 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 per-
son 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 eco-
nomic 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.

13
<PAGE>

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 con-
tact 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 Fund does not generally provide sub-accounting serv-
ices.

14
<PAGE>

Taxation

TAXABILITY OF DISTRIBUTIONS

You should consider the possible tax consequences of Fund distributions and
the sale of your Fund shares.

TAXES ON DISTRIBUTIONS

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

F-1
<PAGE>

TAXABILITY OF SALES AND EXCHANGES

OTHER INFORMATION

F-2
<PAGE>

Appendix A

Additional Information on Portfolio Risks, Securities and Techniques

A. General Portfolio Risks

G-1
<PAGE>

B. Other Portfolio Risks

G-2
<PAGE>

APPENDIX A

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.

G-3
<PAGE>

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

G-4
<PAGE>

APPENDIX A

significant, from the market price of comparable securities for which a liq-
uid market exists.

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

C. Portfolio Securities and Techniques

G-5
<PAGE>

G-6
<PAGE>

APPENDIX A

G-7
<PAGE>

G-8
<PAGE>

APPENDIX A

G-9
<PAGE>

which furnish collateral at least equal in value or market price to the
amount of their repurchase obligation.

G-10
<PAGE>

APPENDIX A

G-11
<PAGE>

G-12
<PAGE>

APPENDIX A

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.

G-13
<PAGE>

Appendix B

Prior Price Returns of the U.S. Select List

U.S. Select List

H-1
<PAGE>

of the Research Select Fund or the Investment Adviser. Finally, past price
returns of the U.S. Select List are not representative of future price
returns of the list.

H-2
<PAGE>

Index

<TABLE>
<C> <C> <S>
1 General Investment Management Approach
2 Fund Investment Objective and
Strategies
2 Goldman Sachs Research Select Fund
4 Other Investment Practices and
Securities
6 Principal Risks of the Fund
9 Fund Performance
10 Fund Fees and Expenses
13 Service Providers
17 Dividends
18 Shareholder Guide
18 How To Buy Shares
22 How To Sell Shares
27 Taxation
29 Appendix A Additional Information on
Portfolio Risks, Securities and
Techniques
</TABLE>

15
<PAGE>

Research Select Fund
Prospectus (Institutional Shares)

FOR MORE INFORMATION

The Fund's 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 Fund's documents are located
online and may be downloaded from:
SEC EDGAR database - http://www.sec.gov

[LOGO OF GOLDMAN SACHS]

The Fund's investment company registration number is 811-5349.

RESPROINST
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 APRIL 5, 2000
SUBJECT TO COMPLETION

Prospectus

SERVICE
SHARES

June 19,
2000

GOLDMAN SACHS RESEARCH SELECT 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]

<PAGE>

NOT FDIC-INSURED MAY LOSE VALUE NO BANK GUARANTEE

<PAGE>

General Investment Management Approach

RESEARCH STYLE FUNDS--RESEARCH SELECT FUND

A-1
<PAGE>

Fund Investment Objective and Strategies
Goldman Sachs
Research Select Fund

FUND FACTS
- --------------------------------------------------------------------------------

Objective: Long-term growth of capital

Benchmark: S&P 500 Index

Investment Focus: A focused portfolio of U.S. equity securities that offer
the potential for long-term capital appreciation

INVESTMENT OBJECTIVE

The Fund seeks to provide long-term growth of capital through participation
in a focused portfolio of U.S. equity securities.

PRINCIPAL INVESTMENT STRATEGIES

B-1
<PAGE>

The U.S. Select List is used primarily by institutional clients.

Other. The Fund's investments in fixed-income securities are limited to
securities that are considered cash equivalents.

B-2
<PAGE>

Other Investment Practices and Securities

C-1
<PAGE>

10 Percent of total assets (italic type)
10 Percent of net assets (roman type)
.. No specific percentage
limitation on usage;
limited only by the
objective andstrategies
of the Fund
- --Not permitted
<TABLE>
<CAPTION>
Research
Select
Fund
- ------------------------------------------------------
<S> <C>
Investment Securities
American and Global Depository Receipts .
Asset-Backed and Mortgage-Backed Securities --
Bank Obligations/2/ .
Convertible Securities --
Corporate Debt Obligations/2/ .
Equity Securities 90+
Emerging Country Securities --
Fixed Income Securities .
Foreign Securities/3/ 10
Non-Investment Grade Fixed Income Securities --
Real Estate Investment Trusts ("REITs") .
Structured Securities* .
Temporary Investments 100
U.S. Government Securities/2/ .
- ------------------------------------------------------
</TABLE>

C-2
<PAGE>

Principal Risks of the Fund

INVESTMENT RISKS

D-1
<PAGE>

D-2
<PAGE>

PRINCIPAL RISKS OF THE FUND

D-3
<PAGE>

Fund Performance

HOW THE FUND HAS PERFORMED

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

2
<PAGE>

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 the Fund.

<TABLE>
<CAPTION>
RESEARCH
SELECT
FUND
- ---------------------------------------------------------------------
<S> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT):
Maximum Sales Charge (Load) Imposed
on Purchases None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends None
Redemption Fees None
Exchange Fees None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS):/1/
Management Fees 1.00%
Service Fees/2/ 0.50%
Other Expenses/3/ 0.19%
- ---------------------------------------------------------------------
Total Fund Operating Expenses* 1.69%
- ---------------------------------------------------------------------
</TABLE>
See page for all other footnotes.

* As a result of current expense limitations, the
estimated "Other Expenses" and "Total Fund Operating
Expenses" of the Fund which are actually incurred 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.

<TABLE>
<CAPTION>
RESEARCH
SELECT
FUND
----------------------------------------------------------------------------
<S> <C>
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets):/1/
Management Fees 1.00%
Service Fees/2/ 0.50%
Other Expenses/3/ 0.10%
----------------------------------------------------------------------------
Total Fund Operating Expenses (after current expense limitations) 1.60%
----------------------------------------------------------------------------
</TABLE>

3
<PAGE>

Fund Fees and Expenses continued

/1/The operating expenses for the Fund are estimated for the current year.
/2/Service Organizations may charge other fees to their customers who are bene-
ficial owners of Service Shares in connection with their customers'
accounts. Such fees may affect the return customers realize with respect to
their investments.
/3/Estimated "Other Expenses" include transfer agency fees equal to 0.04% of
the average daily net assets of the 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 follow-
ing percentage of the Fund's average daily net assets:

<TABLE>
<CAPTION>
OTHER
FUND EXPENSES
<S> <C>
-----------------------
Research Select 0.06%
</TABLE>

4
<PAGE>

FUND FEES AND EXPENSES

Example

The following Example is intended to help you compare the cost of investing in
the Fund (without the waivers and expense limitations) with the cost of invest-
ing in other mutual funds. The Example assumes that you invest $10,000 in Serv-
ice Shares of the 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 the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:

<TABLE>
<CAPTION>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------
<S> <C> <C> <C> <C>
RESEARCH SELECT $172 $533 N/A N/A
- ------------------------------------------------
</TABLE>

Service Organizations that invest in Service Shares on behalf of their custom-
ers may charge other fees directly to their customer accounts in connection
with their investments. You should contact your Service Organization for infor-
mation 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 Pro-
spectus and "Other Information" in the Statement of Additional Information
("Additional Statement").

5
<PAGE>

Service Providers

INVESTMENT ADVISER

E-1
<PAGE>

MANAGEMENT FEES

<TABLE>
<CAPTION>
Contractual Rate
----------------------------------
<S> <C>
Research Select 1.00%
----------------------------------
</TABLE>

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.

E-2
<PAGE>

SERVICE PROVIDERS

FUND MANAGERS

- --------------------------------------------------------------------------------
Quantitative Equity Team

E-3
<PAGE>

DISTRIBUTOR AND TRANSFER AGENT

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

YEAR 2000

E-4
<PAGE>

Dividends

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 as follows:

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

E-5
<PAGE>

Shareholder Guide

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

HOW TO BUY SHARES

How Can I Purchase Service Shares Of The Fund?
Generally, Service Shares may be purchased only through institutions that
have agreed to provide account administration and personal and account main-
tenance 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 pur-
chase orders with Goldman Sachs. Service Organizations will set times by
which purchase orders and payments must be received by them from their cus-
tomers. Generally, Service Shares may be purchased from the Fund 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. Pur-
chases 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") (the
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 certain instances, the Trust may require a signature guarantee in order
to effect purchase, redemption or exchange transactions. Signature guaran-
tees must be obtained from a bank, brokerage firm or other financial inter-
mediary that is a member of an approved Medallion Guarantee Program or that
is otherwise approved by the Trust. A notary public cannot provide a signa-
ture guarantee.

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

6
<PAGE>

SHAREHOLDER GUIDE

..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 des-
ignate other intermediaries to accept such orders, if approved by the Trust.
In these cases:
..The 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 deter-
mined after such acceptance.
..Service Organizations or intermediaries will be responsible for transmit-
ting 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 Fund, 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 addi-
tional compensation from time to time, out of their assets and not as an
additional charge to the Fund, to selected Service Organizations and other
persons in connection with the sale, distribution and/or servicing of shares
of the Fund 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, the 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 regard-
ing 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 Pro-
spectus.

What Is My Minimum Investment In The Fund?
The Fund does not have any minimum purchase or account requirements with
respect to Service Shares. A Service Organization may, however, impose a
mini

7
<PAGE>

mum 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 pur-
chaser (or group of related purchasers). This may occur, for example, when
a pattern of frequent purchases, sales or exchanges of Service Shares of
the Fund is evident, or if purchases, sales or exchanges are, or a subse-
quent abrupt redemption might be, of a size that would disrupt the manage-
ment of the Fund.
..Close the Fund to new investors from time to time and reopen the Fund when-
ever it is deemed appropriate by the Fund's Investment Adviser.

The Fund may allow Service Organizations to purchase shares with securities
instead of cash if consistent with the Fund's investment policies and opera-
tions 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 the Fund's NAV. The Fund calculates NAV as follows:

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

The Fund's investments are valued based on market quotations or, if accurate
quotations are not readily available, the fair value of the Fund's invest-
ments may be determined in good faith under procedures established by the
Trustees.
..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 (nor-
mally 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 Fund
receives your order in proper form.
..When you sell shares, you receive the NAV next calculated after the Fund
receives your order in proper form.

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.

8
<PAGE>

SHAREHOLDER GUIDE

HOW TO SELL SHARES

How Can I Sell Service Shares Of The Fund?
Generally, Service Shares may be sold (redeemed) only through Service Orga-
nizations. Customers of a Service Organization will normally give their
redemption instructions to the Service Organization, and the Service Organi-
zation will, in turn, place redemption orders with the Fund. GENERALLY, THE
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.

<TABLE>
-------------------------------------------------
<S> <C>
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:
1-800-621-2550
(8:00 a.m. to 4:00 p.m. New York
time)
-------------------------------------------------
</TABLE>

9
<PAGE>

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?
BY WIRE: The Fund will arrange for redemption proceeds to be wired as fed-
eral funds to the bank account designated in the recordholder's Account
Application. The following general policies govern wiring redemption pro-
ceeds:
..Redemption proceeds will normally be wired on the next business day in fed-
eral 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 Organ-
ization 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 exe-
cuted 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.

10
<PAGE>

SHAREHOLDER GUIDE

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 Organi-
zations 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 bal-
ance falls below $50 as a result of a redemption. The Fund 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 the shares in other circumstances determined by the Board of Trust-
ees to be in the best interest 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 distribu-
tions be returned to the Fund as undeliverable or remain uncashed for six
months. In addition, that distribution and all future distributions pay-
able to you will be reinvested at NAV in additional Fund shares. No inter-
est will accrue on amounts represented by uncashed distribution or redemp-
tion checks.

11
<PAGE>

Can I Exchange My Investment From One Fund To Another?
A Service Organization may exchange Service Shares of the 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.

<TABLE>
<CAPTION>
INSTRUCTIONS FOR EXCHANGING SHARES:
-------------------------------------------------------------------
<S> <C> <C>
BY WRITING: .Write a letter of instruction that includes:
.The recordholder name(s) and signature(s)
.The account number
.The Fund names and Class of Shares
.The dollar amount to be exchanged
.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:
.1-800-621-2550
(8:00 a.m. to 4:00 p.m. New York time)
-------------------------------------------------------------------
</TABLE>

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 requirement 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 eco-
nomic 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 unau-
thorized or fraudulent telephone exchange requests.

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

12
<PAGE>

SHAREHOLDER GUIDE

by a purchase of shares received in the exchange. You should consult your
tax adviser concerning the tax consequences of an exchange.

What Types Of Reports Will Be Sent Regarding Investments In Service Shares?
Service Organizations will receive from the Fund 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.

13
<PAGE>

Taxation

TAXABILITY OF DISTRIBUTIONS

You should consider the possible tax consequences of Fund distributions and
the sale of your Fund shares.

TAXES ON DISTRIBUTIONS

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

F-1
<PAGE>

TAXABILITY OF SALES AND EXCHANGES

OTHER INFORMATION

F-2
<PAGE>

Appendix A

Additional Information on Portfolio Risks, Securities and Techniques

A. General Portfolio Risks

G-1
<PAGE>

B. Other Portfolio Risks

G-2
<PAGE>

APPENDIX A

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.

G-3
<PAGE>

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

G-4
<PAGE>

APPENDIX A

significant, from the market price of comparable securities for which a liq-
uid market exists.

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

C. Portfolio Securities and Techniques

G-5
<PAGE>

G-6
<PAGE>

APPENDIX A

G-7
<PAGE>

G-8
<PAGE>

APPENDIX A

G-9
<PAGE>

which furnish collateral at least equal in value or market price to the
amount of their repurchase obligation.

G-10
<PAGE>

APPENDIX A

G-11
<PAGE>

G-12
<PAGE>

APPENDIX A

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.

G-13
<PAGE>

Appendix B

Prior Price Returns of the U.S. Select List

U.S. Select List

H-1
<PAGE>

of the Research Select Fund or the Investment Adviser. Finally, past price
returns of the U.S. Select List are not representative of future price
returns of the list.

H-2
<PAGE>

Index

<TABLE>
<C> <C> <S>
1 General Investment
Management Approach
2 Fund Investment Objective
and Strategies
2 Goldman Sachs Research Select Fund
4 Other Investment Practices
and Securities
6 Principal Risks of the Fund
9 Fund Performance
10 Fund Fees and Expenses
13 Service Providers
17 Dividends
18 Shareholder Guide
18 How To Buy Shares
21 How To Sell Shares
26 Taxation
28 Appendix A
Additional Information on Portfolio
Risks, Securities and Techniques
</TABLE>
<PAGE>

Research Select Fund
Prospectus (Service Shares)

FOR MORE INFORMATION

Annual/Semi-annual Report
Additional information about the Fund's investments is available in the
Fund's annual and semi-annual reports to shareholders. In the Fund's annual
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the
last fiscal year. As of the date of this Prospectus, the Research Select
Fund had not commenced operations, and its annual report for the fiscal year
ended August 31, 2000 will become available to shareholders in October 2000.

The Fund's 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:

[LOGO OF GOLDMAN SACHS]
The Fund's investment company registration number is 811-5349.
RESPROSVC
<PAGE>

PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 5, 2000
SUBJECT TO COMPLETION

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
STATEMENT OF ADDITIONAL INFORMATION
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
SERVICE SHARES
INSTITUTIONAL SHARES

GOLDMAN SACHS RESEARCH SELECT FUND

(An Equity 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 Research Select Portfolio
dated June 19, 2000 (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.
<PAGE>

TABLE OF CONTENTS

Page
----

INTRODUCTION............................................................. B-1
INVESTMENT POLICIES...................................................... B-1
INVESTMENT RESTRICTIONS.................................................. B-20
MANAGEMENT............................................................... B-22
PORTFOLIO TRANSACTIONS AND BROKERAGE..................................... B-38
NET ASSET VALUE.......................................................... B-40
PERFORMANCE INFORMATION.................................................. B-42
SHARES OF THE TRUST...................................................... B-46
TAXATION................................................................. B-50
OTHER INFORMATION........................................................ B-56
DISTRIBUTION AND SERVICE PLANS........................................... B-59
OTHER INFORMATION REGARDING MAXIMUM SALES CHARGE,
PURCHASES, REDEMPTIONS, EXCHANGES AND DIVIDENDS..................... B-60
SERVICE PLAN............................................................. B-63
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 June 19, 2000

-i-
<PAGE>

GOLDMAN SACHS ASSET MANAGEMENT
Investment Adviser
32 Old Slip
New York, New York 10005

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-
<PAGE>

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 Research
Select Fund ("Fund").

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 Fund and
other series. Additional series may be added in the future from time to time.
The Fund 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" or the "Investment Adviser"), a unit
of the Investment Management Division of Goldman, Sachs & Co. ("Goldman Sachs"),
serves as the Investment Adviser to the Portfolio. In addition, Goldman Sachs
serves as the Fund's distributor and transfer agent. The Fund's
custodian is State Street Bank and Trust Company ("State Street").

The following information relates to and supplements the description of the
Fund's investment policies contained in the Prospectuses. See the
Prospectuses for a more complete description of the Fund's investment
objective and policies. There is no assurance that the Fund will achieve
its objective. Capitalized terms used but not defined herein have the same
meaning as in the prospectuses.

INVESTMENT POLICIES

The Fund has a distinct investment objective and policies. There can be no
assurance that the Portfolio's objective will be achieved. The Fund is a
diversified open-end management company as defined in the Investment Company Act
of 1940, as amended (the "Act").

The 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. The Fund should not be relied upon as a complete
investment program.

General Information Regarding the Portfolio.
- -------------------------------------------

The Investment Adviser may purchase for the Fund common stocks, preferred
stocks, interests in real estate investment trusts, equity interests in trusts,
partnerships, joint ventures, limited liability companies and similar
enterprises, warrants and stock purchase rights ("equity securities"). The
Investment Adviser utilizes advanced quantitative tools for both stock selection
and portfolio construction. 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

B-1
<PAGE>

Global Investment Research Department and other affiliates of the Investment
Adviser, as well as information provided by other securities dealers. Equity
securities in the 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
- --------------------------

The Fund may, under normal market conditions, invest in corporate debt
obligations, including obligations of industrial, utility and financial issuers.
The Fund may only invest in debt securities that are cash equivalents.
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.

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 the Fund's net asset value.

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.

U.S. Government Securities
- --------------------------

The 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
- ----------------

The 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-2
<PAGE>

Futures Contracts and Options on Futures Contracts
- --------------------------------------------------

The Fund may purchase and sell futures contracts and may also purchase and write
options on futures contracts on various securities (such as U.S. Government
Securities), securities indices, foreign currencies and other financial
instruments and indices. The Portfolio 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 the 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, the 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,
the 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, the 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. The 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 the 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 the Fund will usually liquidate futures contracts on
securities or currency in this manner, the 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
B-3
<PAGE>

exchange on which 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 the Fund owns or proposes to acquire. The 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 value of
the Fund's portfolio securities. Similarly, the 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 the Fund's portfolio securities and futures contracts based on
other financial instruments, representative securities indices or other indices,
the Fund may also enter into such futures contracts as part of its hedging
strategy. Although under some circumstances prices of securities in the 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 the Fund enter into a greater or lesser number of futures contracts or
by attempting to achieve only a partial hedge against price changes affecting
the 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 the Fund's portfolio securities
would be substantially offset by a decline in the value of the futures position.

On other occasions, the Fund may take a "long" position by purchasing such
futures contracts. This may be done, for example, when the Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices 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 the 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, the 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 the Fund's assets. By writing a
call option, the Fund becomes obligated, in exchange for the premium, to sell a
futures contract if the option is exercised, which may have a

B-4
<PAGE>

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 the Fund intends to purchase.
However, the Fund becomes obligated (upon exercise of the option) to
purchase a futures contract if the option is exercised, which may have a value
lower than the exercise price. Thus, the loss incurred by the Fund in
writing options on futures is potentially unlimited and may exceed the amount of
the premium received. The 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. The 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. The 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 the 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 the 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. The Fund will engage in transactions in futures contracts and
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 the 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 Fund
position which is intended to be protected, the desired protection may not be
obtained and the Fund may be exposed to risk of loss.

Perfect correlation between the Fund's futures positions and Fund
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 the Fund's trading in futures depends
upon the ability of the Investment Adviser to analyze correctly the futures
markets.

B-5
<PAGE>

Forward Foreign Currency Exchange Contracts. The Fund 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.
The Fund may also enter into forward foreign currency exchange contracts
for hedging purposes and 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.

At the maturity of a forward contract the 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.

The Fund may enter into forward foreign currency exchange contracts in
several circumstances. First, when the Fund enters into a contract for the
purchase or sale of a security denominated or quoted in a foreign currency, or
when the 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 the 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 the 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 the Fund's
foreign assets.

B-6
<PAGE>

The Fund 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 GAM determines that there is a pattern
of correlation between the two currencies.

The Fund 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 the 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 the
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. In such event, the Fund's ability
to utilize forward foreign currency exchange contracts may be restricted.

While the 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 the 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 the
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 the 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. The 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
the 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. The 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 the

B-7
<PAGE>

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 the 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 the 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.

A call option written by the Fund obligates the 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 the Fund would obligate the 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 the 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" below.

The 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." The Fund may enter into
closing sale transactions in order to realize gains or minimize losses on
options purchased by the Fund.

The 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 the 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. The 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.

The 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 the 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 the Fund's portfolio securities due to currency exchange
rate fluctuations. The Fund would ordinarily realize a gain if, during the
option period, the value of the underlying currency decreased below the exercise
price

B-8
<PAGE>

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
Fund may use options on currency to seek to increase total return. The
Fund 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 Fund may forego the opportunity to profit from an increase in
the market value of the underlying currency. Also, when writing put options,
the Fund accepts, 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.

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 the 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 the 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 the 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.

The 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 the Fund.

The amount of the premiums which the 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.

Options on Securities and Securities Indices
- --------------------------------------------

Writing Covered Options. The Fund may write (sell) covered call and
put options on any securities in which it may invest. A call option written by
the Fund obligates the Fund

B-9
<PAGE>

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 the Fund are covered, which means that the Fund will own
the securities subject to the option as long as the option is outstanding or the
Fund will use the other methods described below. The Fund's purpose in
writing covered call options is to realize greater income than would be realized
on portfolio securities transactions alone. However, the Fund may forego
the opportunity to profit from an increase in the market price of the underlying
security.

A put option written by the Fund would obligate the 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
the Fund would be covered, which means that the 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, the 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 the 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 the Fund's net exposure on its written
option position.

The Fund may also write (sell) covered call and put options on any
securities index comprised 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.

The 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. The 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.

The 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."

Purchasing Options. The Fund may purchase put and call options on any
securities in which it may invest or options on any securities index comprised
of securities in which it may invest. The Fund would also be able to enter
into closing sale transactions in order to realize gains or minimize losses on
options it had purchased.

B-10
<PAGE>

The 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 the Fund, in return for the premium paid, to
purchase specified securities at a specified price during the option period.
The 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 the Fund would realize either no gain
or a loss on the purchase of the call option.

The 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 the
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 the
Fund's securities. Put options may also be purchased by the Fund for
the purpose of affirmatively benefiting from a decline in the price of
securities which it does not own. The 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 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 the underlying portfolio securities.

The 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 the 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 the 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 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

B-11
<PAGE>

by the Options Clearing Corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms.

The Fund may purchase and sell both options that are traded on U.S.
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.

The Fund's transactions 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 the 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 the 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 the Fund's portfolio turnover rate
and, therefore, associated brokerage commissions or spreads.

Real Estate Investment Trusts
- -----------------------------

The 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 Fund, REITs are not taxed on income distributed to shareholders
provided they comply with certain requirements under the Code. The Fund
will indirectly bear its proportionate share of any expenses paid by REITs in
which it invests in addition to the expenses paid by the Fund.

B-12
<PAGE>

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
- ----------------------------------

The 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. The 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 Fund has 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
- ------------------

The Fund may invest in equity securities of foreign issuers. Investments
in foreign securities may offer potential benefits not available from
investments solely in 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.

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, any
Fund that invests in foreign securities 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
Fund may be subject to currency exposure independent of their securities
positions. To the extent that a Fund is fully

B-13

<PAGE>

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
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.

The Fund may invest in foreign securities which take the form of
sponsored and unsponsored American Depository Receipts ("ADRs") and Global
Depository Receipts ("GDRs") or other similar instruments representing
securities of foreign issuers (together, "Depository 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-

B-14
<PAGE>

counter market and, generally, are in registered form. 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. GDRs are not necessarily
quoted in the same currency as the underlying security.

To the extent the Fund acquires Depository Receipts through banks which do
not have a contractual relationship with the foreign issuer of the security
underlying the Depository Receipts to issue and service such Depository Receipts
(unsponsored), there may be an increased possibility 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 Depository Receipts does not eliminate all
the risks inherent in investing in securities of non-U.S. issuers. The market
value of Depository Receipts is dependent upon the market value of the
underlying securities and fluctuations in the relative value of the currencies
in which the Depository Receipts and the underlying securities are quoted.
However, by investing in Depository Receipts, such as ADRs, that are quoted in
U.S. dollars, the Portfolio may avoid currency risks during the settlement
period for purchases and sales.

Preferred Securities
- --------------------

The 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
- ------------

The 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

B-15
<PAGE>

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).

The 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 amount of payments that the Fund is contractually
obligated to make. If the other party to an equity swap defaults, the
Fund's risk of loss consists of the net amount of payments that the
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 Fund's potential exposure, the Fund
and its Investment Adviser believe that transactions do not constitute senior
securities under the Act and, accordingly, will not treat them as being subject
to the Fund's borrowing restrictions.

The 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 Fund Securities
- --------------------------

The 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. The
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,
the 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. The Fund would not have
the right to vote any securities having voting rights during the existence of
the loan, but the 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 the 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

B-16
<PAGE>

appreciation, and the Fund is responsible for any loss that may result from
its investment of the borrowed collateral.

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

The 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 the 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 transactions are negotiated directly with the
other party, and such commitments are not traded on exchanges. The 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, the Fund may dispose
of or negotiate a commitment after entering into it. The Fund may realize
a capital gain or loss in connection with these transactions. For purposes of
determining the Fund's duration, the maturity of when-issued or forward
commitment securities will be calculated from the commitment date. The
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
- ----------------------------------

The 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
- --------------------------

The Fund reserves the right to invest up to 10% of its total assets in the
securities of all investment companies (including SPDRs, WEBS and other exchange
traded funds) but may neither invest more than 5% of its total assets in any one
investment company nor acquire more than 3% of the voting securities of any one
investment company. Pursuant to an exemptive order obtained from the SEC, the
Fund may invest in money market funds for which the Investment Adviser or
any of its affiliates serves as investment adviser. The 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 other fees 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

B-17
<PAGE>

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 the 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). The UIT was 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 UIT 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
activity of the S&P 500. The UIT issues SPDRs in aggregations known as
"Creation Units" in exchange for a "Fund Deposit" consisting of (a) 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"); (b) 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 (c) a cash payment or
credit ("Balancing Amount") designed to equalize the net asset value of the S&P
Index and the net asset value of a Fund Deposit.

SPDRs are not individually redeemable, except upon termination of the UIT.
To redeem, the Fund 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
Fund will receive Index Securities and cash identical to the Fund
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 Fund could result in losses on SPDRs.

The Fund may, subject to the limitations stated above, invest in World
Equity Benchmark Shares ("WEBS") and similar securities that invest in
securities included in foreign securities indices. WEBS are shares of an
investment company that invests substantially all of its assets in securities
included in the MSCI indices for specified countries. WEBS are listed on the
AMEX and were initially offered to the public in 1996. The market prices of
WEBS are expected to fluctuate in accordance with both changes in the NAVs of
their underlying indices and supply and demand of WEBS on the AMEX. To date,
WEBS have traded at relatively modest discounts and premiums to their NAVs.
However, WEBS have a limited operating history and information is lacking
regarding the actual performance and trading liquidity of WEBS 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 WEBS will
continue to be met or will remain unchanged. In the event substantial market or
other disruptions affecting WEBS should occur in the future, the liquidity and
value of the Fund's shares could also be substantially and adversely
affected. If such disruptions were to occur, the Fund could be required to
reconsider the use of WEBS as part of its investment strategy.

B-18
<PAGE>

The Fund may, subject to the limitations stated above, invest in other
types of unaffiliated investment companies issuing shares which are traded like
traditional equity securities on a national stock exchange or the NASDAQ
National Market System.

Repurchase Agreements
- ---------------------

The 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. A repurchase agreement is an arrangement under
which the 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 the Fund's custodian (or subcustodian). The
repurchase price may be higher than the purchase price, the difference being
income to the Fund, or the purchase and repurchase prices may be the same,
with interest at a stated rate due to the Fund together with the repurchase
price on repurchase. In either case, the income to the 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 the Fund to the seller of the security. For
other purposes, it is not always clear whether a court would consider the
security purchased by the Fund subject to a repurchase agreement as being
owned by the Fund or as being collateral for a loan by the 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, the 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 value of the security. If the court characterizes the
transaction as a loan and the Fund has not perfected a security interest in
the security, the 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, the 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), the 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, the Fund, together with other registered investment
companies having advisory agreements with the Investment Adviser or its
affiliates, may transfer uninvested cash

B-19
<PAGE>

balances into a single joint account, the daily aggregate balance of which will
be invested in one or more repurchase agreements.

Portfolio Turnover
- ------------------

It is anticipated that the portfolio turnover rate of the Fund will
vary from year to year. To the extent that the Fund sells securities to
generate capital losses, such sales will increase the Fund's portfolio
turnover rate and result in more commission expenses.

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 Fund present at a meeting, if the holders of more than 50% of the
outstanding shares of the Trust or Fund are present or represented by
proxy; or (b) more than 50% of the shares of the Trust or 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, the Fund. With respect to the
Fund's 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.

The 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).

(3) Borrow money, except (a) the Fund may borrow from banks (as
defined in the Act) 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;

B-20
<PAGE>

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; and (c) loans of securities as
permitted by applicable 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.

The 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.

The Fund may not:
(a) Invest in companies for the purpose of exercising control or
management.
(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.

B-21
<PAGE>

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.

<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
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, 54 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
</TABLE>

B-22
<PAGE>

<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
& 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, 37 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); 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).
</TABLE>

B-23
<PAGE>

<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
*John P. McNulty, 47 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); 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) and
Trustee, Trust for Credit Unions
(registered investment company) (January
1996-March 1998).
</TABLE>

B-24
<PAGE>

<TABLE>
<CAPTION>
Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
Mary P. McPherson, 64 Trustee Trustee - Goldman Sachs Variable
The Andrew W. Mellon Foundation Insurance Trust (registered investment
140 East 62nd Street company) (since October 1997); Vice
New York, NY 10021 President, The Andrew W. Mellon
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, 50 Trustee Trustee - Goldman Sachs Variable
32 Old Slip Insurance Trust (registered investment
New York, NY 10005 company) (since October 1997); Limited
Partner, Goldman Sachs (since December
1994); Consultant to GSAM (since
December 1994).
</TABLE>

B-25
<PAGE>

Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
Jackson W. Smart, Jr., 69 Trustee Trustee - Goldman Sachs Variable
One Northfield Plaza, Suite 218 Insurance Trust (registered investment
Northfield, IL 60093 company) (since October 1997);
President, Board Member and Senior
Adviser, Smart Properties, Inc. (since
January 2000); Chairman, Executive
Committee and Director, First
Commonwealth, Inc. (a managed dental
care company) (January 1996-August
1999); Chairman and Chief Executive
Officer, MSP Communications Inc. (a
company engaged in radio broadcasting)
(October 1988-December 1997); Director,
Federal Express Corporation (NYSE)
(since 1976); and Director, Evanston
Northwestern Healthcare (since 1980).

William H. Springer, 70 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).

Richard P. Strubel, 60 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
</TABLE>

B-26
<PAGE>

Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
manufacturer of fastening systems and
connectors) (January 1984-October 1994);
Trustee, Northern Institutional Funds
(since December 1982); Director of
Cantilever Technologies, Inc. (since
1999).

*Nancy L. Mucker, 50 Vice President Vice President - Goldman Sachs Variable
4900 Sears Tower Insurance Trust (registered investment
Chicago, IL 60606 company) (since 1997); Vice President
and Co-Manager of Funds Group
Shareholder Servicing, Goldman Sachs
(since April 1985).

*John M. Perlowski, 35 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, 39 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).
</TABLE>

B-27

<PAGE>

Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
*Jesse Cole, 36 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).

*Philip V. Giuca, Jr., 37 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, 39 Secretary Secretary - Goldman Sachs Variable
85 Broad Street Insurance Trust (registered investment
New York, NY 10004 company) (since 1997); 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, 34 Assistant Assistant Secretary - Goldman Sachs
85 Broad Street Secretary Variable Insurance Trust (registered
New York, NY 10004 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 1993-December
1997); and Associate of
</TABLE>

B-28
<PAGE>

Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
Shereff, Friedman, Hoffman & Goodman
(October 1990 to November 1993).

*Valerie A. Zondorak, 34 Assistant Assistant Secretary - Goldman Sachs
85 Broad Street Secretary Variable Insurance Trust (registered
New York, NY 10004 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, 28 Assistant Assistant Secretary - Goldman Sachs
85 Broad Street Secretary Variable Insurance Trust (registered
New York, NY 10004 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); and Legal Secretary, Cleary,
Gottlieb, Steen and Hamilton (September
1990 to January 1994).

*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 Portfolio
Manager, GSAM (1988 to 1997).
</TABLE>

B-29

<PAGE>

Name, Age Positions Principal Occupation(s)
and Address with Trust During Past 5 Years
- ----------- ---------- -----------------------
<S> <C> <C>
*Elizabeth D. Anderson, 30 Assistant Assistant Secretary - Goldman Sachs
32 Old Slip Secretary Variable Insurance Trust (registered
New York, NY 10005 investment company) (since 1997);
Portfolio Manager, GSAM (since April
1996); Junior Portfolio Manager, GSAM
(1995-April 1996); Funds Trading
Assistant, GSAM (1993-1995); and
Compliance Analyst, Prudential Insurance
(1991-1993).

*Amy E. Belanger, 30 Assistant Assistant Secretary - Goldman Sachs
85 Broad Street Secretary Variable Insurance Trust (registered
New York, NY 10004 investment company) (since 1999); Vice
President, Goldman Sachs (since June
1999); Counsel, Goldman Sachs (since
1998); Associate, Dechert Price & Rhoads
(September 1996-1998).
</TABLE>

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 _________, 2000 the
Trustees and Officers of the Trust as a group owned less than 1% of the
outstanding shares of beneficial interest of the 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-30
<PAGE>

The following table sets forth certain information with respect to the
compensation of each Trustee of the Trust for the fixed period from January 1,
1999 to December 31, 1999 with respect to each of the Trust's funds then in
existence:

<TABLE>
<CAPTION>
Pension or Retirement Benefits Total Compensation
Aggregate Accrued as Part of Fund's from Goldman Sachs
Compensation ------------------------------ Fund complex
Name of Trustee from the Trust2 Expenses (including the Trust)3
- --------------- --------------- -------- ---------------------
<S> <C> <C> <C>
Ashok N. Bakhru1 $136,000 $ - $159,884
David B. Ford 0 - 0
Douglas C. Grip 0 - 0
John P. McNulty 0 - 0
Mary P. McPherson 101,000 - 118,716
Alan A. Shuch 0 - 0
Jackson W. Smart 101,000 - 118,716
William H. Springer 101,000 - 118,716
Richard P. Strubel 101,000 - 118,716
</TABLE>

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,
1999 to December 31, 1999. 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 51 mutual
funds, including 21 equity funds, as of December 31, 1999. Goldman Sachs
Variable Insurance Trust consisted of 16 mutual funds as of December 31, 1999.

B-31
<PAGE>

Class A Shares of the Fund 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 Adviser 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, a unit of the Investment
Management Division of Goldman Sachs, serves as Investment Adviser to the
Fund. See "Service Providers" in the Fund's Prospectus for a
description of the Investment Adviser's duties to the Fund.

The Goldman Sachs Group, L.P. which controlled the Fund's
Investment Adviser merged into The Goldman Sachs Group, Inc. as a result of an
initial public offering.

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 Fund to use the name "Goldman Sachs" or a derivative thereof as part of
its name for as long as the Fund's Management Agreement is in effect.

The Investment Adviser is 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-depth information and analyses
generated by Goldman Sachs' research analysts are available to the Investment
Adviser.

B-32
<PAGE>

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 Fund, the Investment Adviser has 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, in its capacity as
Investment Adviser, 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 Fund by the
Trustees, including a majority of the non-interested Trustees (as defined below)
who are not parties to the Management Agreement on __________, 2000. The
Fund's sole shareholder approved these arrangements on June ___, 2000. The
Management Agreement will remain in effect until June 30, 2000 and will continue
in effect with respect to the Fund from year to year thereafter provided
such continuance is specifically approved at least annually by (a) the vote of a
majority of the Fund's outstanding voting securities or a majority of the
Trustees of the Trust, and (b) 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 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 Adviser is entitled
to receive fees, payable monthly, at the annual rate of 1.00% of the Fund's
average daily net assets. Prior to the date of this Additional Statement, no
shares of the Fund had been offered and, accordingly, no fees were paid by
the Fund to the Investment Adviser pursuant to the Management Agreement.

Under the Management Agreement, the Investment Adviser also: (i)
supervises all of the Fund's non-advisory operations; (ii) provides
personnel to perform such executive,

B-33
<PAGE>

administrative and clerical services as are reasonably necessary to provide
effective administration of the Fund; (iii) arranges for at the 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 the 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 Adviser 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 Fund or impede its investment activities.

Goldman Sachs and its affiliates, including, without limitation, the
Investment Adviser and its 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 Fund and/or which engage in
transactions in the same types of securities, currencies and instruments as the
Fund. 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 Fund invests, which could have an
adverse impact on the Fund's performance. Such transactions, particularly
in respect of proprietary accounts or customer accounts other than those
included in the Investment Adviser's and its advisory affiliates' asset
management activities, will be executed independently of the Fund's
transactions and thus at prices or rates that may be more or less favorable.
When the Investment Adviser and its advisory affiliates seek to purchase or sell
the same assets for their managed accounts, including the Fund, the assets
actually purchased or sold may be allocated among the accounts on a basis
determined in their 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 Fund.

From time to time, the Fund's 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 Adviser and/or
its affiliates will not initiate or recommend certain types of transactions in
certain securities or instruments with respect to which the Investment Adviser
and/or its affiliates are performing services or when position limits have been
reached.

In connection with their management of the Fund, the Investment
Adviser may have access to certain fundamental analysis and proprietary
technical models developed by Goldman Sachs and other affiliates. The
Investment Adviser will not be under any obligation, however, to effect
transactions on behalf of the Fund 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

B-34
<PAGE>

for other accounts managed by them, for the benefit of the management of the
Fund and it is not anticipated that the Investment Adviser will have access
to such information for the purpose of managing the Fund. 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 Adviser in managing the Fund.

The results of the Fund's investment activities may differ
significantly from the results achieved by the Investment Adviser and its
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 the Fund. Moreover, it is possible that the
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.

An investment policy committee which may include partners of Goldman
Sachs and its affiliates may develop general policies regarding the Fund's
activities but will not be involved in the day-to-day management of the
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 Adviser 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 Fund should be aware.

The 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 the
Fund, and such party may have no incentive to assure that the Fund
obtains the best possible prices 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 the Fund invests
or which may be based on the performance of the Fund. The Fund 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 into transactions with other clients of Goldman Sachs or its
affiliates where such other clients have interests adverse to those of the
Fund. At times, these activities may cause departments of Goldman Sachs or
its affiliates to give advice to clients that may cause these clients to take
actions adverse to the interests of the client. To the

B-35
<PAGE>

extent affiliated transactions are permitted, the Fund will deal with
Goldman Sachs and its affiliates on an arms-length basis.

The 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 the Fund's establishment of its business
relationships, nor is it expected that the 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 the Fund in order to increase
the assets of the Fund or for other reasons. Increasing the 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 the Fund acquired for its own account. A large redemption of shares of
the 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 the 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 Fund's 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 Fund.

Distributor and Transfer Agent
==============================

Goldman Sachs, 85 Broad Street, New York, New York 10004, serves as the
exclusive distributor of shares of the Fund pursuant to a "best efforts"
arrangement as provided by a distribution agreement with the Trust on behalf of
the Fund. Shares of the Fund 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
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 Fund. 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 Fund had been offered and, accordingly, Goldman Sachs
retained no sales commissions.

B-36
<PAGE>

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 Fund's Institutional and Service Shares and 0.19% of average
daily net assets with respect to the Fund's Class A, Class B and Class C
Shares. Prior to the date of this Additional Statement, no shares of the
Fund had been offered and, accordingly, no fees were paid by the Fund
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 the Fund, is responsible for the payment of
the Fund's expenses. The expenses include, without limitation, the fees
payable to the Investment Adviser, 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 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 regulatory authorities, any expenses assumed by the 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.

B-37
<PAGE>

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 the Fund, which would
have the effect of lowering the 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 Adviser voluntarily has 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 Fund to the extent such expenses
exceed 0.05% of average daily net assets. Such reductions or limits, if any,
are calculated monthly on a cumulative basis and may be discontinued or modified
by the Investment Adviser in its discretion at any time.

Fees and expenses of legal counsel, registering shares of the Fund,
holding meetings and communicating with shareholders may include an allocable
portion of the cost of maintaining an internal legal and compliance department.
The 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.

Independent Public Accountants
==============================

PricewaterhouseCoopers LLP, independent public accountants, 160 Federal
Street, Boston, Massachusetts 02110, have been selected as auditors of the
Fund for the fiscal year ending August 31, 2000. In addition to audit
services, PricewaterhouseCoopers LLP will prepare the Fund's federal and
state tax returns and will provide consultation and assistance on accounting,
internal control and related matters.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Investment Adviser is responsible for decisions to buy and sell
securities for the Fund, 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

B-38
<PAGE>

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 the Fund, the
Investment Adviser is generally required to give primary consideration to
obtaining the most favorable execution and net price available. This means that
the 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 who 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 Adviser generally seeks reasonably competitive spreads or
commissions, the Fund will not necessarily be paying the lowest spread or
commission available. Within the framework of this policy, the Investment
Adviser will consider research and investment services provided by brokers or
dealers who effect or are parties to portfolio transactions of the Fund,
the Investment Adviser and its 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 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 Adviser in the performance of its decision-making
responsibilities. Such services are used by the Investment Adviser in
connection with all of its investment activities, and some of such services
obtained in connection with the execution of transactions for the 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 the Fund, and
the services furnished by such brokers may be used by the Investment Adviser 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 Adviser. 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 the Investment Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as its other
customers (including any other fund or other

B-39
<PAGE>

investment company or advisory account for which the 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 the Fund
and the other customers. In some instances, this procedure may adversely affect
the price and size of the position obtainable for the Fund.

Commission rates in the United States 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 Adviser may use
Goldman Sachs as a broker for the Fund. In order for Goldman Sachs to
effect any portfolio transactions for the Fund, the commissions, fees or
other remuneration received by Goldman Sachs must be reasonable and fair
compared to the commissions, fees or other remuneration paid to other brokers in
connection with comparable transactions involving similar securities being
purchased or sold on a securities exchange during a comparable period of time.
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 imposed upon Goldman Sachs by applicable law. As
of the date of this Additional Statement, no shares of the Fund had been
offered and, accordingly, the Fund paid no brokerage commissions.

NET ASSET VALUE

Under the Act, the Trustees of the Trust are responsible for determining
in good faith the fair value of the Fund's securities. In accordance with
procedures adopted by the Trustees, the net asset value per share of each class
of the Fund is calculated by determining the value of the net assets
attributable to each class 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, Washington's Birthday (observed), Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.

B-40
<PAGE>

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, the 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 the Fund for which accurate market
quotations are available are valued as follows: (a) securities listed on any
U.S. 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 Fund's 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; (b) 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; (c) equity securities for which no prices are
obtained under section (a) or (b) 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; (d) 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); (e) fixed-income securities for which accurate
market quotations are not readily available are valued by the Investment Adviser
based on valuation models that take into account spread and daily yield changes
on government securities in the appropriate market (i.e., matrix pricing); (f)
debt securities with a remaining maturity of 60 days or less are valued by the
Investment Adviser at amortized cost, which the Trustees have determined to
approximate fair value; and (g) 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

B-41
<PAGE>

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
the Fund to price its securities but before the close of regular trading on
the New York Stock Exchange will normally not be reflected in the 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 the 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 the Fund or series and
constitute the underlying assets of the Fund or series. The underlying
assets of the 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
Fund and the other series of the Trust are generally allocated in
proportion to the net asset values of the respective Fund or series except
where allocations of direct expenses can otherwise be fairly made.

PERFORMANCE INFORMATION

The 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 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 applicable to the relevant
class (i.e. net asset value in the case of each class other than Class A) at the
beginning of the period, and then calculating the annual compounded rate of
return which would produce that amount, assuming a redemption (and payment of
any contingent deferred sales charge) 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.

B-42
<PAGE>

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 contingent deferred
sales charge ("CDSC") imposed upon redemption of Class B and Class C Shares held
for the applicable period. The 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, the Fund may furnish total return calculations based on
investments at various sales charge levels or at NAV. Any performance
information which is based on the Fund's NAV per share would be reduced if
any applicable sales charge were taken into account. In addition to the above,
the 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 Fund's 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 Fund.

Occasionally, statistics may be used to specify portfolio volatility or
risk. Measures of volatility or risk are generally used to compare the
Fund's net asset value or performance relative to a market index. One
measure of volatility is beta. Beta is the volatility of the 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 the 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 the
Fund's performance relative to certain indices and benchmark investments,
including: (a) 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); (b) the CDA Mutual

B-43
<PAGE>

Fund Report published by CDA Investment Technologies, Inc. (which analyzes
price, risk and various measures of return for the mutual fund industry); (c)
the Consumer Price Index published by the U.S. Bureau of Labor Statistics (which
measures changes in the price of goods and services); (d) Stocks, Bonds, Bills
and Inflation published by Ibbotson Associates (which provides historical
performance figures for stocks, government securities and inflation); (e) 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); (f) the Lehman
Brothers Aggregate Bond Index or its component indices; (g) the Standard &
Poor's Bond Indices (which measure yield and price of corporate, municipal and
U.S. Government bonds); (h) the J.P. Morgan Global Government Bond Index; (i)
other taxable investments including certificates of deposit (CDs), money market
deposit accounts (MMDAs), checking accounts, savings accounts, money market
mutual funds and repurchase agreements; (j) 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); (k) the Hambrecht & Quist
Growth Stock Index; (l) the NASDAQ OTC Composite Prime Return; (m) the Russell
Midcap Index; (n) the Russell 2000 Index- Total Return; (o) the Russell 1000
Value Index; (p) the Russell 1000 Growth Index-Total Return; (q) the Value-Line
Composite-Price Return; (r) the Wilshire 4500 Index; (s) the FT-Actuaries Europe
and Pacific Index; (t) 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 Capital International
Combined Asia ex Japan Free Index and the Morgan Stanley Capital International
Emerging Markets Free Index), Salomon Brothers, Merrill Lynch, Donaldson Lufkin
and Jenrette or other providers of such data; (u) CDA/Wiesenberger Investment
Companies Services or Wiesenberger Investment Companies Service; (v) The Goldman
Sachs Commodities Index; (w) information produced by Micropal, Inc.; (x) The
Tokyo Price Index; and (y) the Russell 3000 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 the 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 the 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);

B-44
<PAGE>

. 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 benefits of focusing on after-tax returns versus pre-tax
returns for taxable investors.

. the performance of various types of securities (common stocks,
small company stocks, long-term government bonds, treasury bills
and certificates of deposit) over time. However, the
characteristics of these securities are not identical to, and may
be very different from, those of the Fund's portfolio;

. the dollar and non-dollar based returns of various market indices
(i.e., 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.

B-45
<PAGE>

From time to time, advertisements or information may include a
discussion of certain attributes or benefits to be derived by an investment in
the 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 the Fund's investments and
discussions of the 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 Fund's performance data will be based on historical results
and will not be intended to indicate future performance. The Fund's total
return and yield will vary based on market conditions, Fund's expenses,
Fund investments and other factors. The value of the 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 Fund's holdings available to investors upon
request.

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 Fund will differ. As of
the date of this Additional Statement, no shares of the Fund 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 Fund 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 the Fund represents a proportionate interest in the
assets belonging to the applicable class of the Fund. All expenses of the
Fund are borne at the same rate by each class of shares, except

B-46
<PAGE>

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 the 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. 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 Fund 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 Fund 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.

B-47
<PAGE>

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 the Fund.
Dividends paid by the 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 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 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.

B-48
<PAGE>

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.

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.

B-49
<PAGE>

Shareholder and Trustee Liability
- ---------------------------------

Under Delaware Law, the shareholders of the Fund 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 the 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 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: (a) 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 (b) the Trustees must be afforded a
reasonable amount of time to consider such 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 the Fund. 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 the Fund. The summary
is based on the laws in effect on the date of this Additional Statement, which
are subject to change.

B-50
<PAGE>

General
=======

The Fund is a separate taxable entity. The Fund intends to elect 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 the Fund must follow in order
to avoid federal taxation. In its efforts to adhere to these requirements, the
Fund may have to limit its investment activities in some types of instruments.
Qualification as a regulated investment company under the Code requires, among
other things, that (a) the 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) the 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 the 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 the 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 the Fund earns from equity interests in certain
entities that are not treated as corporations (e.g., partnerships or trusts) for
U.S. tax purposes will generally have the same character for the Fund as in the
hands of such an entity; consequently, the 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 the
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 the
Fund's portfolio or anticipated to be acquired may not qualify as "directly-
related" under these tests.

If the Fund complies with such provisions, then in any taxable year in
which the 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, the Fund (but not its shareholders) will be

B-51
<PAGE>

relieved of federal income tax on any income of the Fund, including long-
term capital gains, distributed to shareholders. However, if the 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. The
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. The 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 the 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.

In order to avoid a 4% federal excise tax, the 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 the 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. The 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, the 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 the 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 the 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

B-52
<PAGE>

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 the 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
the 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 the
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 the 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 the
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 the Fund's
investment company taxable income (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 foreign 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 the 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.

The Fund's investment in deferred interest securities, certain
structured securities or other securities bearing original issue discount or, if
the 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
Fund securities that it might otherwise have continued to hold.

The 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.

B-53
<PAGE>

Taxable U.S. Shareholders - Distributions
=========================================

For U.S. federal income tax purposes, distributions by the 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.

Distributions from investment company taxable income for the year will
be taxable as ordinary income. Distributions designated as derived from the
Fund's dividend income, if any, that would be eligible for the dividends-
received deduction if the 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. 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 the 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 the 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%. Distributions, if any, that are in excess of the
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 your tax basis, a
shareholder should generally retain its account statements 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

B-54
<PAGE>

otherwise. In general, the maximum long-term capital gain rate for non corporate
shareholders will be 20% for capital gains on assets held more than one year.
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 the 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 the Fund may be disallowed under "wash sale" rules to the extent
the shares disposed of are replaced with other shares of the 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 the
Fund. If disallowed, the loss will be reflected in an adjustment to the
basis of the shares acquired.

The 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 the 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. The 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 the 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.

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

B-55
<PAGE>

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
the 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.

Any capital gain realized by a non-U.S. shareholder upon a sale or
redemption of shares of the 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 the Fund with an IRS Form W-
8 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.
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 Fund.

State and Local
===============

The Fund may be subject to state or local taxes in jurisdictions
in which the Fund may be deemed to be doing business. In addition, in
those states or localities which have income tax laws, the treatment of the
Fund and its shareholders under such laws may differ from their treatment
under federal income tax laws, and investment in the Fund may have tax
consequences for shareholders different from those of a direct investment in the
Portfolio's portfolio securities. Shareholders should consult their own tax
advisers concerning these matters.

OTHER INFORMATION

The 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. The 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 Portfolio'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.

B-56
<PAGE>

The right of a shareholder to redeem shares and the date of payment by
the 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 the 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 the
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 Fund and/or for the servicing of those
shares. These payments ("Additional Payments") would be in addition to the
payments by the Fund described in the Fund's 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 Fund and
payments for providing extra employee training and information relating to the
Portfolio; "listing" fees for the placement of the Fund on an
Intermediary's list of mutual funds available for purchase by its customers;
"finders" or "referral" fees for directing investors to the Fund;
"marketing support" fees for providing assistance in promoting the sale of the
Fund's 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 processing fees paid by the Fund. 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.

B-57
<PAGE>

In the interest of economy and convenience, the Trust does not issue
certificates representing the Fund's 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 Fund 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-58
<PAGE>

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 Fund's Class A, Class B and Class C
Shares, distribution and service plans (each a "Plan") pursuant to Rule 12b-1
under the Act. See "Shareholder Services" in the Prospectus.

The Plans were initially approved with respect to the Fund on
__________, 2000 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 the Fund's average daily
net assets attributable to Class A, Class B and Class C Shares, respectively.
Under the Plans for 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 the Fund's average daily net assets
attributable to 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 the 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 _________, 2000 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 Class C Shares, respectively, of the Fund.
All material amendments of a Plan must also be

B-59
<PAGE>

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 Fund. If a Plan
was terminated by the Trustees of the Trust and no successor plan was adopted,
the Fund 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 Fund and its Class A, Class B and Class C Shareholders. As of
the date of this Additional Statement, no shares of the Fund had been
offered and, accordingly, the Fund 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 Fund.

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 the Fund are sold at a maximum sales charge of
5.5%. Assuming a $10.00 initial offering price per share with respect to the
Fund, the maximum offering price of the 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 the 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 Fund 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-60
<PAGE>

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 the
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 $35,000 and purchases
additional Class A Shares of any Goldman Sachs Fund with a purchase price of
$25,000, the sales charge for the $25,000 purchase would be 4.75% (the rate
applicable to a single purchase of more than $50,000). 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 Fund 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, shares of the Fund 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 any other Private
Client Services account. In addition, Class A Shares of the Fund 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 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 (1) your
employee has been assigned a cumulative discount number by Goldman Sachs, and
(2) 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 the 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 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"
B-61
<PAGE>

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 the 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 Portfolio or the Tax-Exempt Diversified Portfolio, if they
hold Class A Shares of the Fund, or ILA, Class B or Class C Units of the
Prime Obligations Portfolio, if they hold Class B or Class C Shares of the
Fund (the "ILA Portfolios").

A Fund shareholder should obtain and read the prospectus relating to
any other Goldman Sachs Fund or ILA Portfolio 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 Portfolios 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 the 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.

Systematic Withdrawal Plan
- --------------------------

A systematic withdrawal plan (the "Systematic Withdrawal Plan") is
available to shareholders of the Fund whose shares are worth at least
$5,000. The Systematic Withdrawal

B-62
<PAGE>

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 the 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 Fund has adopted a service plan (the "Plan") with respect to its
Service Shares which authorizes it 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, the 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 the Fund; (c) answer questions and handle
correspondence from customers regarding their accounts; (d) process customer
orders to purchase, redeem and exchange Service Shares of the 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 the Fund; (g) receive and answer
investor correspondence, including requests for prospectuses and statements of
additional information; (h) display and make 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 the
Fund, including

B-63
<PAGE>

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, the Portfolio 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 Portfolio
attributable to or held in the name of such Service Organization. As of the date
of this Additional Statement, no shares of the Fund had been offered and,
accordingly, no fees were paid to Service Organizations pursuant to the Plan.

The Fund has 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 the 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 Fund at
a meeting called for the purpose of voting on such Plan and Service Agreements
on __________, 2000. The Plan and related Service Agreements will remain in
effect until May 1, 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 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 at any time by a majority of the Trustees as described above
or by a vote of a majority of the 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 Fund's outstanding Service Shares on not more than
sixty (60) days'

B-64
<PAGE>

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 Fund and the holders of Service
Shares.

B-65
<PAGE>

APPENDIX A

Commercial Paper Ratings
- ------------------------

A Standard & Poor's ("S&P") commercial paper rating is a current
opinion of the credit worthiness 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 S&P 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.

Moody's commercial paper ratings are opinions of the ability of
issuers to repay punctually senior debt obligations not having an original
maturity in excess of one year, unless explicitly noted. The following
summarizes the rating categories used by Moody's for commercial paper:

1-A
<PAGE>

"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.

The three rating categories of Duff & Phelps for investment grade
commercial paper and short-term debt are "D-1," "D-2" and "D-3." Duff & Phelps
employs three designations, "D-1+," "D-1" and "D-1-," within the highest rating
category. The following summarizes the rating categories used by Duff & Phelps
for commercial paper:

"D-1+" - Debt possesses the highest certainty of timely payment.
Short-term liquidity, including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations.

"D-1" - Debt possesses very high certainty of timely payment.
Liquidity factors are excellent and supported by good fundamental protection
factors. Risk factors are minor.

"D-1-" - Debt possesses high certainty of timely payment. Liquidity
factors are strong and supported by good fundamental protection factors. Risk
factors are very small.

"D-2" - Debt possesses good certainty of timely payment. Liquidity
factors and company fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets is good. Risk
factors are small.

2-A
<PAGE>

"D-3" - Debt possesses satisfactory liquidity and other protection
factors qualify issues as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is expected.

"D-4" - Debt possesses speculative investment characteristics.
Liquidity is not sufficient to insure against disruption in debt service.
Operating factors and market access may be subject to a high degree of
variation.

"D-5" - Issuer has failed to meet scheduled principal and/or interest
payments.

Fitch IBCA 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 IBCA for short-term obligations:

"F1" - Securities possess the highest credit quality. This designation
indicates the best capacity for timely payment of financial commitments and may
have an added "+" to denote any exceptionally strong credit feature.

"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
that default is a real possibility and that the capacity for meeting financial
commitments 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.

3-A
<PAGE>

"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
- ----------------------------------------------

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

4-A
<PAGE>

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" - The "C" rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action has been taken, but
payments on this obligation are being continued.

"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 S&P 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" - This symbol is attached to the ratings of instruments with
significant noncredit risks. It highlights risks to principal or volatility of
expected returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk - such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.

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

5-A
<PAGE>

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.

"Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these
ratings provide questionable protection of interest and principal ("Ba"
indicates speculative elements; "B" indicates a general lack of characteristics
of desirable investment; "Caa" are of poor standing; "Ca" represents obligations
which are speculative in a high degree; and "C" represents the lowest rated
class of bonds). "Caa," "Ca" and "C" bonds may be in default.

Con. (---) - Bonds for which the security depends upon 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 operating experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of 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 long-term debt ratings used by Duff &
Phelps for corporate and municipal long-term debt:

"AAA" - Debt is considered to be of the highest credit quality. The
risk factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.

6-A
<PAGE>

"AA" - Debt is considered to be of high credit quality. Protection
factors are strong. Risk is modest but may vary slightly from time to time
because of economic conditions.

"A" - Debt possesses protection factors which are average but
adequate. However, risk factors are more variable in periods of greater economic
stress.

"BBB" - Debt possesses below-average protection factors but such
protection factors are still considered sufficient for prudent investment.
Considerable variability in risk is present during economic cycles.

"BB," "B," "CCC," "DD," and "DP" - Debt that possesses one of these
ratings is considered to be below investment grade. Although below investment
grade, debt rated "BB" is deemed likely to meet obligations when due. Debt rated
"B" possesses the risk that obligations will not be met when due. Debt rated
"CCC" is well below investment grade and has considerable uncertainty as to
timely payment of principal, interest or preferred dividends. Debt rated "DD" is
a defaulted debt obligation, and the rating "DP" represents preferred stock with
dividend arrearages.

To provide more detailed indications of credit quality, the "AA," "A,"
"BBB," "BB" and "B" ratings may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within these major categories.

The following summarizes the ratings used by Fitch IBCA 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.

"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.

7-A
<PAGE>

"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 changes 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", "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 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 recovering 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 IBCA
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.

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 Financial 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.

8-A
<PAGE>

"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," "B," "CCC," and "CC," - These designations are assigned by
Thomson Financial BankWatch to non-investment grade long-term debt. Such issues
are regarded as having speculative characteristics regarding the likelihood of
timely payment of principal and interest. "BB" indicates the lowest degree of
speculation and "CC" the highest degree of speculation.

"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 rating reflects the liquidity concerns 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.

9-A
<PAGE>

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 best quality. There is
present strong protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.

"MIG-2"/"VMIG-2" - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.

"MIG-3"/"VMIG-3" - This designation denotes favorable quality, with
all security elements accounted for but lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and market
access for refinancing is likely to be less well established.

"MIG-4"/"VMIG-4" - This designation denotes adequate quality.
Protection commonly regarded as required of an investment security is present
and although not distinctly or predominantly speculative, there is specific
risk.

"SG" - This designation denotes speculative quality. Debt instruments
in this category lack of margins of protection.

Fitch IBCA and Duff & Phelps use the short-term ratings described
under Commercial Paper Ratings for municipal notes.

10-A
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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
<PAGE>

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 the 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
<PAGE>

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) and to Post-
Effective Amendment No. 62 to such Registration Statement (Accession No.
0000950109-00-000585).

- 1 -
<PAGE>

(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 -
<PAGE>

(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.)

(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 or 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.)

(d)(5). Management Agreement dated April 30, 1997 between the Registrant,
on behalf of Goldman Sachs - Institutional Liquid Assets, and

- 3 -
<PAGE>

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.)

(e). Distribution Agreement dated April 30, 1997 as amended February
3, 2000 between Registrant and Goldman, Sachs & Co. (Accession
No. 0000950109-00-000585.)

(f). Not applicable.

(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

- 4 -
<PAGE>

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 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

- 5 -
<PAGE>

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

- 6 -
<PAGE>

Capital Growth Fund. (Accession No. 0000950130-98-006081.)

(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). Additional Portfolio Agreement dated September 27, 1999 between
Registrant and State Street Bank and Trust Company. (Accession
No. 0000950109-00-000585.)

- 7 -
<PAGE>

(g)(26). 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)(27). 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)(28). 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)(7). Fee schedule dated July 31, 1998 relating to Transfer Agency
Agreement between Registrant and Goldman, Sachs & Co. on behalf
of all Funds of Goldman Sachs Trust other than the Institutional
Liquid Assets and Financial Square Money Market Funds.
(Accession No. 0000950130-98-004845.)

(h)(8). Transfer Agency Agreement dated May 1, 1988 between Goldman Sachs
Institutional Liquid Assets and Goldman, Sachs & Co. (Accession
No. 0000950130-98-006081.)

(h)(9). Fee Schedule dated July 31, 1998 relating to Transfer Agency
Agreement between Registrant and Goldman, Sachs & Co. on behalf
of ILA

- 8 -
<PAGE>

Money Market Funds. (Accession No. 0000950130-98-006081.)

(h)(10). 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)(11). Transfer Agency Agreement dated April 6, 1990 between GS-Capital
Growth Fund, Inc. and Goldman Sachs & Co. (Accession No.
0000950130-98-006081.)

(h)(12). Goldman Sachs - Institutional Liquid Assets Administration Class
Administration Plan dated April 22, 1998. (Accession No.
0000950130-98-006081.)

(h)(13). FST Administration Class Administration Plan dated April 22,
1998. (Accession No. 0000950130-98-006081.)

(h)(14). Goldman Sachs - Institutional Liquid Assets Service Class Service
Plan dated April 22, 1998. (Accession No. 0000950130-98-006081.)

(h)(15). FST Service Class Service Plan dated April 22, 1998. (Accession
No. 0000950130-98-006081.)

(h)(16). FST Preferred Class Preferred Administration Plan dated April 22,
1998. (Accession No. 0000950130-98-006081.)

(h)(17). Goldman Sachs Trust Administration Class Administration Plan
dated April 23, 1998. (Accession No. 0000950130-98-006081.)

(h)(18). Goldman Sachs Trust Service Class Service Plan dated April 22,
1998. (Accession No. 0000950130-98-006081.)

(h)(19). Cash Management Shares Service Plan dated May 1, 1998.
(Accession No. 0000950130-98-006081.)

(h)(20). 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.)

- 9 -
<PAGE>

(h)(21). Form of Retail Service Agreement on behalf of Goldman Sachs Trust
relating to the Preferred Class, Administration Class, Service
Class and Cash Management Class, as applicable, of Goldman Sachs
Financial Square Funds, Goldman Sachs - International Liquid
Asset Portfolios, Goldman Sachs Fixed Income Funds, Goldman Sachs
Domestic Equity Funds, Goldman Sachs International Equity Funds
and Goldman Sachs Asset Allocation Portfolios. (Accession No.
0000950130-98-006081.)

(h)(22). 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)(23). 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)(24). Fee Schedule dated July 31, 1998 relating to Transfer Agency
Agreement dated July 15, 1991 between the Registrant and Goldman,
Sachs & Co. (Internet Tollkeeper Fund). (Accession No.
0000950130-99-005294.)

(h)(25). FST Select Shares Plan dated October 26, 1999. (Accession No.
0000950130-99-006810).

(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.)

- 10 -
<PAGE>

(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.)

(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.)

(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.

- 11 -
<PAGE>

(o). Plan dated October 26, 1999 entered into by Registrant pursuant
to Rule 18f-3. (Accession No. 0000950130-99-006810).

(q)(1). Powers of Attorney of Messrs. Bakhru, Ford, Grip, Shuch, Smart,
Springer, Strubel, McNulty, Mosior, Gilman, Perlowski, Richman,
Surloff, Mmes. MacPherson, 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:

(d)(12) Amended Annex A dated February 3, 2000 to Management Agreement
dated April 30, 1997.

(i)(12) Opinion of Drinker Biddle & Reath LLP (with respect to the High
Yield Municipal Fund).

(i)(13) Opinion of Drinker Biddle & Reath LLP (with respect to the CORE
Tax-Managed Equity Fund)

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).

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

- 12 -
<PAGE>

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 February 3, 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 to Exhibit (e).
The Transfer Agency Agreements are incorporated by reference as Exhibits (h)(3),
(h)(8), (h)(10) and (h)(11), 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 Goldman, Sachs & Co.'s Management Committee. None of the

- 13 -
<PAGE>

members of the management committee holds a position or office with the
Registrant, except John P. McNulty who is a trustee of the Registrant.

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) 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

_______________________

(1) 85 Broad Street, New York, NY 10004
(2) One New York Plaza, New York, NY 10004

- 14 -
<PAGE>

(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

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.

- 15 -
<PAGE>

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. 63 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 5th day
of April, 2000.

GOLDMAN SACHS TRUST
(A Delaware business trust)

By: /s/ Michael J. Richman
---------------------
Michael J. Richman
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
- ---- ----- ----
<S> <C> <C>
*Douglas C. Grip President and
- ---------------- Trustee April 5, 2000
Douglas C. Grip

*John M. Perlowski Principal Accounting
- ------------------ Officer and Principal
John M. Perlowski Financial Officer April 5, 2000

*David B. Ford Trustee April 5, 2000
- --------------
David B. Ford

*Mary Patterson McPherson Trustee April 5, 2000
- -------------------------
Mary Patterson McPherson

*Ashok N. Bakhru Chairman and Trustee April 5, 2000
- ----------------
Ashok N. Bakhru

*Alan A. Shuch Trustee April 5, 2000
- --------------
Alan A. Shuch

*Jackson W. Smart Trustee April 5, 2000
- -----------------
Jackson W. Smart, Jr.

*John P. McNulty Trustee April 5, 2000
- ----------------
John P. McNulty

*William H. Springer Trustee April 5, 2000
- --------------------
William H. Springer

*Richard P. Strubel Trustee April 5, 2000
- -------------------
Richard P. Strubel
</TABLE>

*By:/s/ Michael J. Richman
------------------------
Michael J. Richman,
Attorney-In-Fact

* Pursuant to a power of attorney previously filed.

- 16 -
<PAGE>

Exhibit Index
-------------

(d)(12) Amended Annex A dated February 3, 2000 to Management Agreement
dated April 30, 1997.

(i)(12) Opinion of Drinker Biddle & Reath LLP (with respect to High Yield
Municipal Fund).

(i)(13) Opinion of Drinker Biddle & Reath LLP (with respect to the CORE
Tax-Managed Equity Fund)

<PAGE>

Exhibit (d)(12)

Amended Annex A

The compensation payable under Paragraph 5 of the Management Agreement between
Goldman Sachs Trust and each of the undersigned shall be as follows:

Goldman Sachs Asset Management

Annual Date
-----------
Goldman Sachs Government Income Fund 0.65%
Goldman Sachs Municipal Income Fund 0.55%
Goldman Sachs High Yield Fund 0.70%
Goldman Sachs High Yield Municipal Fund/8/ 0.55%
Goldman Sachs Balanced Fund 0.65%
Goldman Sachs Growth and Income Fund 0.70%
Goldman Sachs CORE Large Cap Value Fund/4/ 0.60%
Goldman Sachs CORE Large Cap Growth Fund 0.75%
Goldman Sachs CORE Small Cap Equity Fund/1/ 1.00%
Goldman Sachs CORE International Equity Fund/1/ 1.00%
Goldman Sachs CORE Tax -- Managed Equity Fund/7/ 0.75%
Goldman Sachs Mid Cap Value Fund 0.75%
Goldman Sachs Small CAp Value Fund 1.00%
Goldman Sachs Real Estate Securities Fund/1/ 1.00%
Goldman Sachs Strategic Growth Fund/5/ 1.00%
Goldman Sachs Growth Opportunities Fund/5/ 1.00%
Goldman Sachs Internet Toll-Keeper Fund/6/ 1.00%
Goldman Sachs Large Cap Value Fund/8/ 0.75%
Goldman Sachs-Financial Square Prime Obligations Fund 0.205%
Goldman Sachs-Financial Square Money Market Fund 0.205%
Goldman Sachs-Financial Square Treasury Obligations Fund 0.205%
Goldman Sachs-Financial Square Treasury Instruments Fund 0.205%
Goldman Sachs-Financial Square Government Fund 0.205%
Goldman Sachs-Financial Square Federal Fund 0.205%
Goldman Sachs-Financial Square Tax-Free Money Market Fund 0.205%
Goldman Sachs-Financial Square Premium Money Market Fund 0.205%
Goldman Sachs-Financial Square Municipal Money Market Fund 0.205%

Goldman Sachs Fund Management L.P.

Goldman Sachs CORE U.S. Equity Fund 0.75%
Goldman Sachs Capital Growth Fund 1.00%

Goldman Sachs Asset Management International

Goldman Sachs Global Income Fund 0.90%
Goldman Sachs International Equity Fund 1.00%
Goldman Sachs Emerging Markets Equity Fund 1.20%
Goldman Sachs Asia Growth Fund 1.00%
Goldman Sachs International Small Cap Fund/2/ 1.20%
Goldman Sachs Japanese Equity Fund/2/ 1.00%
Goldman Sachs European Equity Fund/3/ 1.00%

- --------------------------------

/1/ Please note that the CORE Small Cap Equity Fund, CORE International Equity
Fund and Real Estate Securities Fund were approved at the July 21, 1997 Goldman
Sachs Trust Board Meeting.

/2/ Please note that the International Small Cap Fund and Japanese Equity Fund
were approved at the April 23, 1998 Goldman Sachs Trust Board Meeting.

/3/ Please note that the European Equity Fund was approved at the July 22, 1998
Goldman Sachs Trust Board Meeting.

/4/ Please note that the CORE Large Cap Value Fund was approved at the November
3, 1998 Goldman Sachs Trust Board Meeting.

/5/ Please note that the Strategic Growth Fund and Growth Opportunities Fund
were approved at the April 28, 1999 Goldman Sachs Trust Board Meeting.

/6/ Please not that the Internet Tollkeeper Fund was approved at the July 27,
1999 Goldman Sachs Trust Board Meeting.

/7/ Please note that the Large Cap Value Fund was approved at the October 26,
1999 Goldman Sachs Trust Board Meeting.

/8/ Please note that the High Yield Municipal Fund and the CORE Tax-Managed
Equity Fund were approved at the February 3, 2000 Goldman Sachs Trust Board
Meeting.
<PAGE>

PURSUANT TO AN EXEMPTION FROM THE COMMODITIES FUTURES TRADING COMMISSION
("CFTC") IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE CLIENTS, THIS ACCOUNT
DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN FILED WITH THE CFTC. THE CFTC
DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE
ADEQUACY OR ACCURACY OR COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE
CFTC HAS NOT REVIEWED OR APPROVED THE TRADING PROGRAM ADOPTED HEREUNDER OR ANY
BROCHURE OR ACCOUNT DOCUMENT.

GOLDMAN SACHS TRUST

By: [Signature illegible]
----------------------

Title:__________________

GOLDMAN SACHS ASSET MANAGEMENT,
a division of Goldman Sachs & Co.

By: /s/ David B. Ford
------------------

Title:__________________

GOLDMAN SACHS FUNDS MANAGEMENT, L.P.,
an affiliate of Goldman Sachs & Co.

By: /s/ David B. Ford
------------------

Title:__________________

GOLDMAN SACHS ASSET MANAGEMENT
INTERNATIONAL, an affiliate of Goldman, Sachs Co.

By: /s/ David B. Ford
------------------

Title:__________________

Dated: February 3, 2000

<PAGE>

Exhibit (i)(12)

DRINKER BIDDLE & REATH LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-6996
Phone: (215) 988-2700
Facsimile: (215) 988-2757

March 1, 2000

Goldman Sachs Trust
4900 Sears Tower
Chicago, IL 60606

RE: High Yield Municipal Fund of Goldman Sachs Trust
------------------------------------------------

Ladies and Gentlemen:

We have acted as counsel for Goldman Sachs Trust, a Delaware business trust
(the "Trust"), in connection with the registration under the Securities Act of
1933 of shares of beneficial interest representing interests in an additional
series, or fund, of the Trust known as the High Yield Municipal Fund. The High
Yield Municipal Fund has five classes of shares: Class A Shares, Class B
Shares, Class C Shares, Institutional Shares and Service Shares. The Trust is
authorized to issue an unlimited number of shares of each class. These classes
are hereinafter referred to as the "Shares."

We have reviewed the Trust's Declaration of Trust, its by-laws, resolutions
adopted by its Board of Trustees, and have considered such other legal and
factual matters as we have deemed appropriate.

This opinion is based exclusively on the Delaware Business Trust Act and the
federal law of the United States of America.

Based on the foregoing, we are of the opinion that the Shares, when issued
against payment therefor as described in the Trust's prospectuses relating
thereto, will be legally issued, fully paid and non-assessable by the Trust, and
that the holders of the Shares will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the general corporation law of the State of Delaware (except
that we express no opinion as to such holders who are also trustees of the
Trust). Pursuant to Section 2 of Article VIII of the Declaration of Trust, the
Trustees have the power to cause shareholders, or shareholders of a particular
series or class, to pay certain custodian, transfer, servicing or similar agent
charges by setting off the same against declared but unpaid dividends or by
reducing share ownership (or by both means).

<PAGE>

Goldman Sachs Trust
March 1, 2000
Page 2

We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as part of a Post-Effective Amendment to the Registration
Statement of the Trust. Expect as provided in this paragraph, the opinion set
forth above is expressed solely for the benefit of the addressee hereof in
connection with the matters contemplated hereby and may not be relied upon by,
or filed with, any other person or entity or for any other purpose without our
prior written consent.

Very truly yours,

/s/ DRINKER BIDDLE & REATH LLP

<PAGE>

Exhibit (i)(13)

DRINKER BIDDLE & REATH LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-6996
Phone: (215) 988-2700
Facsimile: (215) 988-2757

March 29, 2000

Goldman Sachs Trust
4900 Sears Tower
Chicago, IL 60606

RE: CORE Tax-Managed Equity Fund of Goldman Sachs Trust
---------------------------------------------------

Ladies and Gentlemen:

We have acted as counsel for Goldman Sachs Trust, a Delaware business trust
(the "Trust"), in connection with the registration under the Securities Act of
1933 of shares of beneficial interest representing interests in an additional
series, or fund, of the Trust known as the CORE Tax-Managed Equity Fund. The
CORE Tax-Managed Equity Fund has five classes of shares: Class A Shares, Class
B Shares, Class C Shares, Institutional Shares and Service Shares. The Trust is
authorized to issue an unlimited number of shares of each class. These classes
are hereinafter referred to as the "Shares."

We have reviewed the Trust's Declaration of Trust, its by-laws, resolutions
adopted by its Board of Trustees, and have considered such other legal and
factual matters as we have deemed appropriate.

This opinion is based exclusively on the Delaware Business Trust Act and
the federal law of the United States of America.

Goldman Sachs Trust
March 29, 2000
Page 2

Very truly yours,

/s/ DRINKER BIDDLE & REATH LLP

GM/sdj