<PAGE>
Goldman Sachs Funds
- --------------------------------------------------------------------------------
REAL ESTATE SECURITIES FUND Annual Report December 31,1999
- --------------------------------------------------------------------------------
[ARTWORK] Long-term growth of capital
and dividend income through
a diversified portfolio of REITs.
[LOGO OF GOLDMAN SACHS]
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Fund Basics
as of December 31, 1999
Assets Under Management
$137.4 Million
Number of Holdings
37
NASDAQ SYMBOLS
Class A Shares
GREAX
Class B Shares
GREBX
Class C Shares
GRECX
Institutional Shares
GREIX
Service Shares
GRESX
- --------------------------------------------------------------------------------
PERFORMANCE REVIEW
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
January 1,1999-December 31,1999 Fund Total Return (based on NAV)/1/ Wilshire Real Estate Securities Index/2/
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A -1.02% -3.16%
Class B -1.73 -3.16
Class C -1.80 -3.16
Institutional -0.64 -3.16
Service -1.12 -3.16
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
1 The net asset value represents the net assets of the Fund (ex-dividend)
divided by the total number of shares. The Fund's performance reflects the
investment of dividends and other distributions.
2 The Wilshire Real Estate Securities Index is a market
capitalization-weighted index comprised of publicly traded real estate
investment trusts (REITS) and real estate operating companies. The Index is
unmanaged and does not reflect any fees or expenses.
- --------------------------------------------------------------------------------
STANDARDIZED TOTAL RETURNS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the period ended 12/31/99/3/ Class A Class B Class C Institutional Service
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
One Year -6.51% -6.65% -2.79% -0.64% -1.12%
Since Inception -8.94% -8.65% -6.03% -4.91% -5.38%
(7/27/98)
</TABLE>
3 The Standardized Total Returns are average annual or cumulative (only if
performance period is one year or less) total returns as of the most recent
calendar quarter-end. They assume reinvestment of all distributions at NAV.
These returns reflect a maximum initial sales charge of 5.5% for Class A
shares and the assumed deferred sales charge for Class B shares (5% maximum
declining to 0% after six years) and the assumed deferred sales charge for
Class C shares (1% if redeemed within 12 months of purchase). The public
offering price of the Class A shares on 12/31/99 was $9.19 and represents
the NAV per share divided by 1.0 minus the maximum sales charge of 5.5%.
Because Institutional and Service shares do not involve a sales charge,
such a charge is not applied to their respective Standardized Total
Returns.
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS AS OF 12/31/99/4/
- --------------------------------------------------------------------------------
Holding % of Total Net Assets Line of Business
- --------------------------------------------------------------------------------
Starwood Hotels & Resorts Worldwide, Inc. 6.9% Hotels
Apartment Investment & Management Co. 4.5 Apartments
AvalonBay Communities, Inc. 4.3 Apartments
Equity Office Properties Trust 4.3 Office
Equity Residential Properties Trust 4.1 Apartments
Prentiss Properties Trust 3.8 Mixed Properties
Cousins Properties, Inc. 3.5 Mixed Properties
Public Storage, Inc. 3.4 Self-Storage
Trizec Hahn Corp. 3.3 Mixed Properties
Spieker Properties, Inc. 3.2 Office
- --------------------------------------------------------------------------------
4 The top 10 holdings may not be representative of the Fund's future
investments.
Total return figures represent past performance and do not
indicate future results, which will vary. The investment return and
principal value of an investment will fluctuate and, therefore, an
investor's shares, when redeemed, may be worth more or less than their
original cost. Performance reflects fee waivers and expense limitations in
effect. In their absence, performance would be reduced.
An investment in real estate securities is subject to greater price
volatility and the special risks associated with direct ownership of real
estate.
. NOT FDIC INSURED
. May Lose Value
. No Bank Guarantee
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Market Overview
Dear Shareholder,
1999 was a banner year for U.S.stocks.Restrained inflation,solid growth in
corporate profits and gains by a few leadership sectors drove most market
indices to record levels.Bond markets,however,produced mixed results.
.Equities -- Although stocks rallied in early 1999, the advance was a narrow
one that included only select large companies as well as the technology and
telecommunications sectors. After a brief setback in February, the market
rally broadened, as investors rotated assets into more cyclical issues. The
rally continued through the summer, fueled by investor excitement over the
explosive growth of the Internet.
Mid-summer, worries about inflationary pressures in the wake of
reports indicating exceptional economic strength resulted in a broad
sell-off. During this time, technology continued to be the sector of choice
for investors.
As the year drew to a close, stocks rallied as investors responded to
robust quarterly earnings news and low inflation readings and employment
costs. Financial and commercial services stocks dominated the market during
this time.
.Fixed Income -- Early in the year, virtually all non-Treasury sectors
benefited from the gradual stabilization of the global financial markets
and investors'renewed tolerance for risk. Emerging economic data that
pointed to a stable U.S. economy further encouraged bond market
performance. This was short-lived, however, as economic indicators that are
critical in determining the Federal Open Market Committee's position on
monetary policy came in higher than expected.
Throughout the second half of the year, the Federal Reserve Board (the
"Fed") initiated a series of interest rate hikes due to Committee Chairman
Alan Greenspan's perception that the U.S. economy was growing at a faster
pace than preferred. For the most part, the moves were expected and had
little impact on the bond market as a whole.
Outlook
We have a generally positive outlook for U.S. stocks. Over the last decade,
significant technological advances and a generally peaceful world political
environment have increased global communications. We believe that this
trend, combined with favorable demographic trends, will benefit U.S.
companies over the long term.
We remain constructive on the Fixed Income market. However, we expect the
Fed will initiate further tightening moves in the year ahead.
We encourage you to maintain your long-term investment program, and look
forward to serving your investment needs in the years ahead.
Sincerely,
/s/David B. Ford /s/David W. Blood
David B. Ford David W. Blood
Co-Head, Goldman Sachs Co-Head, Goldman Sachs
Asset Management Asset Management
January 31, 2000
1
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Performance Overview
Dear Shareholder,
We are pleased to report on the performance of the Goldman Sachs Real
Estate Securities Fund.This annual report covers the year ended December
31,1999.
REIT Market Review
Following a dramatic decline in 1998, the REIT market suffered from a
lack of investor interest, as both technology and large-cap growth
stocks were the favored securities. Another concern weighing against
the REIT sector was the impact of Internet sales on "brick and mortar"
retail stores in particular, and on physical space, generally.
December brought some relief, as investors moved into value and
cyclical stocks based on concerns about lack of breadth and absolute
valuation levels in the overall market.
Performance Review
During the 12-month period ended December 31, 1999, the Fund's Class
A, B, C, Institutional and Service shares generated annual total
returns of -1.02%, -1.73%, -1.80%, -0.64% and -1.12%, respectively.
All the Fund's share classes outperformed the -3.16% return of their
benchmark, the Wilshire Real Estate Securities Index. Outperformance
for the Fund was driven primarily by stock selection, particularly in
the hotel and mixed (office and industrial) sectors. Of course, past
performance may not be indicative of future results.
Portfolio Positioning
Throughout the year under review, we focused on purchasing stocks with
strong real estate fundamentals, in terms of both assets and
geographic market exposure.
We maintained an overweight position in the office sector, given
embedded growth in the lease structure which should fuel substantial
earnings increases. The industrial sector was consistently
marketweighted, based on less attractive near-term growth prospects
for this property type relative to other sectors, and a less
predictable supply environment over the longer term. We maintained an
underweight position in retail throughout the year, based on our view
that negative sentiment related to the power of the Internet would
continue to adversely impact the sector. We moderated our underweight
in the multifamily sector to a neutral market weight, given more
limited new supply and stronger demand demographics than originally
anticipated. Finally, we began the year with an overweight in the
hotel sector, which we then moved to an underweight due to
deterioration in fundamentals. Growth in revenue per available room
declined fairly dramatically over the year and while we expect that
this trend has bottomed out, growth going forward should be in the 3%
range, providing limited upside for the sector as a whole.
Overall, we believe real estate markets are in supply/demand
equilibrium; that is, there is limited new supply in most sectors, and
we expect moderating demand. However, we continue to position the
portfolio to take advantage of divergent supply/demand characteristics
across specific property types or geographic markets. As an example,
the Fund's benchmark, the
2
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Wilshire Real Estate Securities Index, includes multifamily stocks
with approximately 55% of assets concentrated in the Southeast and
Southwest. In our opinion, these markets have low barriers to entry
and are already oversupplied. Our multifamily portfolio has only 33%
exposure to these markets, with a tilt toward West and East Coast
markets that possess visibly strong growth trends that are sustainable
for the next 24 months.
Portfolio Highlights
.Prentiss Properties Trust (3.8% of the portfolio as of 12/31/99) --
Prentiss is a good example of the attractive value that exists today
in the Fund's portfolio. Prentiss is a nationally diversified owner,
manager and developer of office and industrial properties.
.General Growth Properties (3.0% of the portfolio as of 12/31/99) --
General Growth Properties is a leading owner, manager and developer of
regional malls. The company's strong growth prospects are based on
re-leasing spreads, new development and redevelopment or expansions of
existing centers, and the opportunity to increase occupancy rates in a
robust retail environment. The company, which historically has traded
at a 10%+ premium to its peer group, is trading at a 5% discount and
15% below net asset value.
.AvalonBay Communities (4.3% of the portfolio as of 12/31/99) --
AvalonBay owns, develops and redevelops high-end apartment communities
in markets with significant barriers-to-entry. Given the quality of
its existing asset base and the depth of its management team, we
consider AvalonBay to be one of the premier, blue-chip REIT names. In
addition, AvalonBay today benefits from exposure to some of the
nation's best markets (including Northern California, Boston and New
Jersey) and its strong development pipeline.
Portfolio Outlook
Our outlook for the sector in 2000 is constructive. We expect fourth
quarter earnings to meet or exceed consensus for most companies. We
also anticipate a higher level of sustainable earnings growth across
property types than the market is currently attributing to these
stocks. Within the portfolio, the weighted average dividend yield of
the stocks is 6.5%, and the margin of safety of those dividends has
increased. So, while an immediate catalyst for upward revision in
share prices is not obvious, investors are being paid to wait.
Finally, any shift in sentiment toward value, defensive asset classes
or fundamental valuation should benefit our investors.
We thank you for your investment and look forward to your continued
confidence.
Goldman Sachs Real Estate Securities Investment Team
January 31, 2000
3
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
The Goldman Sachs Advantage
Founded in 1869,Goldman,Sachs & Co.is a premier financial services firm
traditionally known on Wall Street and around the world for its
institutional expertise.
Today, the firm's Asset Management Division provides individual
investors the opportunity to tap the resources of a global
institutional powerhouse -- and put this expertise to work in their
individual portfolios.
What Sets Goldman Sachs Funds Apart?
1
Resources and Relationships
Our portfolio management teams are located on-site, around the
world, in New York, London, Tokyo and Singapore. Their
understanding of local economies, markets, industries and
cultures helps deliver what many investors want: access to global
investment opportunities and consistent, risk-adjusted
performance.
2
In-Depth Research
Our team-driven investment processes encourage us to share
information, challenge ideas and form fresh opinions that shape
investment portfolios. Our growth, value and international equity
teams complement this process by performing rigorous, fundamental
research and by conducting on-site visits to hundreds of
companies each year. Our quantitative CORE equity team conducts
its own research and capitalizes on the resources of Goldman
Sachs'Global Investment Research Department.
3
Risk Management
In this, our institutional heritage is clear. Institutions, as
well as many individual investors, often look to us to manage the
risks of global investing over time in different market
environments.
To learn more about the Goldman Sachs Family of Funds, call your
investment professional today.
4
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Performance Summary
December 31, 1999
The following graph shows the value as of December 31, 1999, of a $10,000 in-
vestment made on July 27, 1998 (commencement of operations) in Class A shares
(with the maximum sales charge of 5.5%), Class B shares (applicable contin-
gent deferred sales charges of 5.0% declining to 0% after six years), Class C
shares (applicable contingent deferred sales charge of 1.0% if redeemed
within twelve months), Institutional and Service shares (at NAV) of the
Goldman Sachs Real Estate Securities Fund. For comparative purposes, the per-
formance of the Fund's benchmark (the Wilshire Real Estate Securities Index)
is shown. This performance data represents past performance and should not be
considered indicative of future performance which will fluctuate with changes
in market conditions. These performance fluctuations will cause an investor's
shares, when redeemed, to be worth more or less than their original cost.
REAL ESTATE SECURITIES FUND'S LIFETIME PERFORMANCE
GROWTH OF A $10,000 INVESTMENT, JULY 27, 1998 TO DECEMBER 31, 1999.
[GRAPH]
Inception Date:08/01/1997
- -------------------------
<TABLE>
<CAPTION>
Monthly Rtns
Wilshire Real
Period Estate
Begin Institu- Securities
Date Class A Class B Class C tional Service Index
<S> <C> <C> <C> <C> <C> <C>
7/27/98 9,550 10,000 10,000 10,000 10,000 10,000
Jul/98 9,244 9,780 9,780 9,780 9,780 9,557
Aug/98 8,299 8,770 8,770 8,780 8,780 8,564
Sep/98 8,597 9,081 9,081 9,100 9,092 9,044
Oct/98 8,749 9,232 9,232 9,271 9,253 8,920
Nov/98 8,996 9,493 9,493 9,533 9,514 9,087
Dec/98 8,834 9,312 9,315 9,363 9,344 8,957
Jan/99 8,700 9,171 9,164 9,221 9,202 8,763
Feb/99 8,652 9,111 9,103 9,180 9,151 8,694
Mar/99 8,530 8,985 8,975 9,048 9,018 8,647
Apr/99 9,585 10,088 10,075 10,176 10,133 9,569
May/99 9,711 10,220 10,207 10,320 10,276 9,730
Jun/99 9,622 10,116 10,114 10,225 10,180 9,565
Jul/99 9,152 9,615 9,610 9,727 9,674 9,199
Aug/99 9,016 9,462 9,456 9,582 9,530 9,061
Sep/99 8,641 9,069 9,066 9,195 9,143 8,652
Oct/99 8,453 8,863 8,858 8,995 8,945 8,491
Nov/99 8,404 8,811 8,806 8,943 8,893 8,358
Dec/99 8,744 8,785 9,147 9,303 9,239 8,675
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN THROUGH DECEMBER
31, 1999 SINCE INCEPTION ONE YEAR
<S> <C> <C>
CLASS A SHARES (COMMENCED JULY 27, 1998)
Excluding sales charges -5.28% -1.02%
Including sales charges -8.94% -6.51%
-------------------------------------------------------------------------
CLASS B SHARES (COMMENCED JULY 27, 1998)
Excluding contingent deferred sales charges -6.01% -1.73%
Including contingent deferred sales charges -8.65% -6.65%
-------------------------------------------------------------------------
CLASS C SHARES (COMMENCED JULY 27, 1998)
Excluding contingent deferred sales charges -6.03% -1.80%
Including contingent deferred sales charges -6.03% -2.79%
-------------------------------------------------------------------------
INSTITUTIONAL SHARES (COMMENCED JULY 27, 1998) -4.91% -0.64%
-------------------------------------------------------------------------
SERVICE SHARES (COMMENCED JULY 27, 1998) -5.38% -1.12%
-------------------------------------------------------------------------
</TABLE>
5
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Statement of Investments
December 31, 1999
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
COMMON STOCKS - 96.0%
<C> <S> <C>
APARTMENTS - 17.9%
155,700 Apartment Investment & Management Co. $ 6,198,806
101,200 Archstone Communities Trust 2,074,600
173,400 AvalonBay Communities, Inc. 5,949,787
130,400 Equity Residential Properties Trust 5,566,450
66,900 Essex Property Trust, Inc. 2,274,600
90,100 Home Properties of New York, Inc. 2,472,119
-----------
24,536,362
----------------------------------------------------------------
DEVELOPMENT - 3.0%
323,900 Catellus Development Corp. * 4,149,969
----------------------------------------------------------------
HOTELS - 10.9%
95,600 Hospitality Properties Trust 1,822,375
90,300 MeriStar Hospitality Corp. 1,444,800
243,600 Prime Hospitality Corp. * 2,146,725
405,900 Starwood Hotels & Resorts Worldwide, Inc. 9,538,650
-----------
14,952,550
----------------------------------------------------------------
INDUSTRIAL - 8.4%
61,800 AMB Property Corp. 1,232,138
62,500 CenterPoint Properties Corp. 2,242,187
158,400 Liberty Property Trust 3,841,200
216,400 ProLogis Trust 4,165,700
-----------
11,481,225
----------------------------------------------------------------
MANUFACTURED HOUSING - 1.6%
91,200 Manufactured Home Communities, Inc. 2,217,300
----------------------------------------------------------------
MIXED PROPERTIES - 18.9%
142,000 Cousins Properties, Inc. 4,819,125
175,100 Duke-Weeks Realty Corp. 3,414,450
99,600 Highwoods Properties, Inc. 2,315,700
245,400 Prentiss Properties Trust 5,153,400
72,950 Reckson Associates Realty Corp. 1,495,475
268,200 Trizec Hahn Corp. 4,525,875
131,600 Vornado Realty Trust 4,277,000
-----------
26,001,025
----------------------------------------------------------------
OFFICE - 16.9%
130,000 Boston Properties, Inc. 4,046,250
199,900 Brandywine Realty Trust 3,273,363
218,700 Corporate Office Properties Trust 1,667,588
238,300 Equity Office Properties Trust 5,868,137
86,900 Mack-Cali Realty Corp. 2,264,831
60,300 Parkway Properties, Inc. 1,737,394
119,400 Spieker Properties, Inc. 4,350,637
-----------
23,208,200
----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
COMMON STOCKS - (CONTINUED)
<C> <S> <C>
REGIONAL MALLS - 10.0%
145,900 General Growth Properties, Inc. $ 4,085,200
151,200 Simon Property Group, Inc. 3,468,150
128,800 The Macerich Co. 2,680,650
167,750 The Rouse Co. 3,564,688
------------
13,798,688
-----------------------------------------------------------
SELF-STORAGE - 3.4%
206,300 Public Storage, Inc. 4,680,431
-----------------------------------------------------------
SHOPPING CENTERS - 5.0%
243,200 Developers Diversified Realty Corp. 3,131,200
108,200 Kimco Realty Corp. 3,665,275
------------
6,796,475
-----------------------------------------------------------
TOTAL COMMON STOCKS
(COST $138,397,488) $131,822,225
-----------------------------------------------------------
TOTAL INVESTMENTS
(COST $138,397,488) $131,822,225
-----------------------------------------------------------
</TABLE>
* Non-income producing security.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
6
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Statement of Assets and Liabilities
December 31, 1999
ASSETS:
<TABLE>
<S> <C>
Investment in securities, at value (identified cost
$138,397,488) $131,822,225
Cash 3,487,292
Receivables:
Investment securities sold 1,014,226
Dividends and interest 1,105,352
Fund shares sold 1,033,593
Reimbursement from adviser 80,255
Other assets 481
------------------------------------------------------------------------------
TOTAL ASSETS 138,543,424
------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased 915,550
Fund shares repurchased 6,977
Amounts owed to affiliates 156,996
Accrued expenses and other liabilities 76,201
------------------------------------------------------------------------------
TOTAL LIABILITIES 1,155,724
------------------------------------------------------------------------------
NET ASSETS:
Paid-in capital 146,739,543
Accumulated distributions in excess of net investment income 34,187
Accumulated net realized loss on investment transactions (2,810,767)
Net unrealized loss on investments (6,575,263)
------------------------------------------------------------------------------
NET ASSETS $137,387,700
------------------------------------------------------------------------------
Net asset value, offering and redemption price per share:(a)
Class A $8.68
Class B $8.73
Class C $8.66
Institutional $8.69
Service $8.69
------------------------------------------------------------------------------
Shares outstanding:
Class A 10,769,219
Class B 52,266
Class C 80,477
Institutional 4,922,271
Service 159
------------------------------------------------------------------------------
Total shares outstanding, $.001 par value (unlimited number of
shares authorized) 15,824,392
------------------------------------------------------------------------------
</TABLE>
(a) Maximum public offering price per share (NAV per share multiplied by
1.0582) for Class A shares is $9.19. At redemption, Class B and Class C
shares may be subject to a contingent deferred sales charge, assessed on
the amount equal to the lesser of the current net asset value or the
original purchase price of the shares.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
7
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Statement of Operations
For the Year Ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends(a) $ 8,091,401
Interest 176,804
------------------------------------------------------------------------
TOTAL INCOME 8,268,205
------------------------------------------------------------------------
EXPENSES:
Management fees 1,490,779
Distribution and service fees(b) 480,065
Transfer agent fees(c) 203,038
Registration fees 155,759
Custodian fees 70,735
Professional fees 70,207
Trustee fees 9,975
Other 103,963
------------------------------------------------------------------------
TOTAL EXPENSES 2,584,521
------------------------------------------------------------------------
Less -- expenses reimbursed and fees waived (642,658)
------------------------------------------------------------------------
NET EXPENSES 1,941,863
------------------------------------------------------------------------
NET INVESTMENT INCOME 6,326,342
------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENT AND OPTION
TRANSACTIONS
Net realized loss from:
Investment transactions (2,268,938)
Options written (71,952)
Net change in unrealized gain on investments (6,845,259)
------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENT AND OPTION
TRANSACTIONS (9,186,149)
------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(2,859,807)
------------------------------------------------------------------------
</TABLE>
(a) Taxes withheld on dividends were $13,472.
(b) Class A, Class B and Class C had distribution and service fees of
$475,977, $1,779 and $2,309, respectively.
(c) Class A, Class B, Class C, Institutional Class and Service Class had
transfer agent fees of $180,871, $338, $439, $21,389 and $1,
respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
8
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE
ENDED PERIOD ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998(A)
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 6,326,342 $ 756,089
Net realized loss on investment
transactions (2,340,890) (272,915)
Net change in unrealized gain on
investments (6,845,259) 269,996
------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS (2,859,807) 753,170
------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (4,206,708) (142,487)
Class B (9,242) (6)
Class C (12,545) (17)
Institutional shares (2,276,191) (435,155)
Service shares (59) (21)
In excess of net investment income
Class A (252,747) --
Class B (555) --
Class C (754) --
Institutional shares (136,758) --
Service shares (4) --
From capital
Class A (228,429) --
Class B (502) --
Class C (681) --
Institutional shares (123,600) --
Service shares (3) --
------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (7,248,778) (577,686)
------------------------------------------------------------------------------
FROM SHARE TRANSACTIONS:
Proceeds from sales of shares 129,535,822 68,339,282
Reinvestment of dividends and
distributions 4,492,219 377,842
Cost of shares repurchased (54,013,009) (1,411,355)
------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM SHARE TRANSACTIONS 80,015,032 67,305,769
------------------------------------------------------------------------------
TOTAL INCREASE 69,906,447 67,481,253
------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 67,481,253 --
------------------------------------------------------------------------------
End of year $137,387,700 $67,481,253
------------------------------------------------------------------------------
ACCUMULATED UNDISTRIBUTED NET
INVESTMENT INCOME $ 34,187 $ 178,403
------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations was July 27, 1998 for all classes.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Notes to Financial Statements
December 31, 1999
1. ORGANIZATION
Goldman Sachs Trust (the "Trust") is a Delaware business trust registered un-
der the Investment Company Act of 1940 (as amended) as an open-end management
investment company. The Trust includes the Goldman Sachs Real Estate Securi-
ties Fund (the "Fund"). The Fund is a diversified portfolio offering five
classes of shares -- Class A, Class B, Class C, Institutional and Service.
The Fund invests primarily in securities of issuers that are engaged in or
related to the real estate industry, and does have a policy of concentrating
its investments in the real estate industry. Therefore, an investment in the
Fund is subject to certain risks associated with the direct ownership of real
estate and with the real estate industry in general.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies consist-
ently followed by the Fund. The preparation of financial statements in con-
formity with generally accepted accounting principles requires management to
make estimates and assumptions that may affect the reported amounts. Actual
results could differ from those estimates.
A. Investment Valuation -- Investments in securities traded on a U.S. or for-
eign securities exchange or the NASDAQ system are valued daily at their last
sale or closing price on the principal exchange on which they are traded. If
no sale occurs, securities are valued at the last bid price. Unlisted equity
and debt securities for which market quotations are available are valued at
the last sale price on valuation date, or if no sale occurs, at the last bid
price. Short-term debt obligations maturing in sixty days or less are valued
at amortized cost. Restricted securities, and other securities for which quo-
tations are not readily available, are valued at fair value using methods ap-
proved by the Trust's Board of Trustees.
B. Securities Transactions and Investment Income -- Securities transactions
are recorded as of the trade date. Realized gains and losses on sales of
portfolio securities are calculated using the identified-cost basis. Dividend
income is recorded on the ex-dividend date. Dividends for which the Fund has
the choice to receive either cash or stock are recognized as investment in-
come in an amount equal to the cash dividend. This amount is also used as an
estimate of the fair value of the stock received. Interest income is recorded
on the basis of interest accrued, premium amortized and discount earned.
C. Federal Taxes -- It is the Fund's policy to comply with the requirements
of the Internal Revenue Code (the "Code") applicable to regulated investment
companies and to distribute each year substantially all of its investment
company taxable income and capital gains to its shareholders. Accordingly, no
federal tax provision is required.
The characterization of distributions to shareholders for financial report-
ing purposes is determined in accordance with income tax rules. Therefore,
the source of the Fund's distributions may be shown in the accompanying fi-
nancial statements as either from or in excess of net investment income or
net realized gain on investment transactions, or from capital, depending on
the type of book/tax differences that may exist.
In addition, distributions paid by the Fund's investments in real estate
investment trusts ("REITs") often include a "return of capital" which is re-
corded by the Fund as a reduction of the cost basis of the securities held.
The Code requires a REIT to distribute at least 95% of its taxable income to
investors. In many cases, however, because of "non-cash" expenses such as
property depreciation, an equity REIT's cash flow will exceed its taxable in-
come. The REIT may distribute this excess cash to offer a more competitive
yield. This portion of the distribution is deemed a return of capital, and is
generally not taxable to shareholders.
At December 31, 1999 the aggregate cost of portfolio securities for federal
income tax purposes is $138,800,869. Accordingly, the gross unrealized gain
on investments was $2,376,575 and the gross unrealized loss on investments
was $(9,355,219) resulting in a net unrealized loss of $(6,978,644).
D. EXPENSES -- Expenses incurred by the Trust which do not specifically re-
late to an individual fund of the Trust are allocated to the funds on a
straight-line or pro rata basis depending upon the nature of the expense.
10
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Class A, Class B and Class C shareholders of the Fund bear all expenses and
fees relating to their respective Distribution and Service Plans. Each class
of shares separately bears its respective class-specific transfer agency
fees. Shareholders of Service shares bear all expenses and fees paid to serv-
ice organizations.
E. Segregation Transactions -- The Fund may enter into certain derivative
transactions to seek to increase total return. Forward foreign currency ex-
change contracts, futures contracts, written options, mortgage dollar rolls,
when-issued securities and forward commitments represent examples of such
transactions. As a result of entering into those transactions, the Fund is
required to segregate liquid assets on the accounting records equal to or
greater than the market value of the corresponding transactions.
3. AGREEMENTS
Goldman Sachs Asset Management ("GSAM"), a unit of the Investment Management
Division of Goldman, Sachs & Co. ("Goldman Sachs"), serves as investment ad-
viser pursuant to an Investment Management Agreement (the "Agreement"). Under
the Agreement, GSAM, subject to the general supervision of the Trust's Board
of Trustees, manages the Fund's portfolio. As compensation for the services
rendered under the Agreement, the assumption of the expenses related thereto
and administering the Fund's business affairs, including providing facili-
ties, GSAM is entitled to a fee, computed daily and payable monthly, at an
annual rate equal to 1.00% of the average daily net assets of the Fund.
Goldman Sachs has voluntarily agreed to reduce or limit certain "Other Ex-
penses" for the Fund (excluding management fees, Service share fees, distri-
bution and service fees, litigation and indemnification costs, taxes,
interest, brokerage commissions, transfer agent fees and extraordinary ex-
penses) until further notice to the extent such expenses exceed .00% of the
average daily net assets of the Fund. For the year ended December 31, 1999,
the adviser reimbursed approximately $405,000.
Goldman Sachs serves as the Distributor of shares of the Funds pursuant to
a Distribution Agreement. Goldman Sachs may receive a portion of the Class A
sales load and Class B and Class C contingent deferred sales charges and has
advised the Fund that it retained approximately $962,000 for the year ended
December 31, 1999.
The Trust, on behalf of the Fund, has adopted Distribution and Service
plans. Under the Distribution and Service plans, Goldman Sachs and/or Autho-
rized Dealers are entitled to a monthly fee for distribution and shareholder
maintenance services equal, on an annual basis, to .50%, 1.00% and 1.00% of
the average daily net assets attributable to Class A, Class B and Class C
shares, respectively. Goldman Sachs has voluntarily agreed to waive a portion
of the Distribution and Service fees equal, on an annual basis, to .25% of
the average daily net assets attributable to the Class A shares. For the year
ended December 31, 1999, Goldman Sachs has waived approximately $238,000 of
the Distribution and Service fees attributable to the Class A shares. Goldman
Sachs may discontinue or modify this waiver in the future at its discretion.
The Trust, on behalf of the Fund, has adopted a Service Plan. This Plan al-
lows for Service shares to compensate service organizations for providing va-
rying levels of account administration and shareholder liaison services to
their customers who are beneficial owners of such shares. The Service Plan
provides for compensation to the service organizations in an amount up to
.50% (on an annualized basis), of the average daily net asset value of the
Service shares.
Goldman Sachs also serves as the Transfer Agent of the Fund for a fee cal-
culated daily and payable monthly at an annual rate as follows: .19% of the
average daily net assets for Class A, Class B and Class C shares and .04% of
the average daily net assets for Institutional and Service shares.
At December 31, 1999, the Fund owed approximately $118,000, $22,000 and
$17,000 for Management, Distribution and Service and Transfer Agent fees, re-
spectively.
4. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and proceeds of sales or maturities of securities (excluding short-
term investments) for the year ended December 31, 1999, were $135,322,599 and
$52,913,951, respectively.
11
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Notes to Financial Statements (continued)
December 31, 1999
For the period ended December 31, 1999, Goldman Sachs earned approximately
$17,090 of brokerage commissions from portfolio transactions.
OPTION ACCOUNTING PRINCIPLES -- When the Fund writes call or put options, an
amount equal to the premium received is recorded as an asset and as an equiv-
alent liability. The amount of the liability is subsequently marked-to-market
to reflect the current market value of the option written. When a written op-
tion expires on its stipulated expiration date or the Fund enters into a
closing purchase transaction, the Fund realizes a gain or loss without regard
to any unrealized gain or loss on the underlying security, and the liability
related to such option is extinguished. When a written call option is exer-
cised, the Fund realizes a gain or loss from the sale of the underlying secu-
rity, and the proceeds of the sale are increased by the premium originally
received. When a written put option is exercised, the amount of the premium
originally received will reduce the cost of the security which the Fund pur-
chases upon exercise. There is a risk of loss from a change in value of such
options which may exceed the related premiums received.
Upon the purchase of a call option or a protective put option by the Fund,
the premium paid is recorded as an investment and subsequently marked-to-mar-
ket to reflect the current market value of the option. If an option which the
Fund has purchased expires on the stipulated expiration date, the Fund will
realize a loss in the amount of the cost of the option. If the Fund enters
into a closing sale transaction, the Fund will realize a gain or loss, de-
pending on whether the sale proceeds for the closing sale transaction are
greater or less than the cost of the option. If the Fund exercises a pur-
chased put option, the Fund will realize a gain or loss from the sale of the
underlying security, and the proceeds from such sale will be decreased by the
premium originally paid. If the Fund exercises a purchased call option, the
cost of the security which the Fund purchases upon exercise will be increased
by the premium originally paid.
For the year ended December 31, 1999, written call option transactions in
the Fund were as follows:
<TABLE>
<CAPTION>
WRITTEN OPTIONS NUMBER OF CONTRACTS PREMIUM RECEIVED
-----------------------------------------------------------------------------
<S> <C> <C>
Balance outstanding, beginning of
period -- $ --
Options written 916 140,088
Options terminated in closing purchase
transactions (916) (140,088)
-----------------------------------------------------------------------------
BALANCE OUTSTANDING, END OF PERIOD -- $ --
-----------------------------------------------------------------------------
</TABLE>
5. LINE OF CREDIT FACILITY
The Fund participated in a $250,000,000 uncommitted, unsecured revolving line
of credit facility. Under the most restrictive arrangement, the Fund must
have owned securities having a market value in excess of 300% of the total
bank borrowings. Effective April 30, 1999, the Fund now participates in a
$250,000,000 uncommitted and a $250,000,000 committed, unsecured revolving
line of credit facility. Under the most restrictive arrangement, the Fund
must own securities having a market value in excess of 400% of the total bank
borrowings. These facilities are to be used solely for temporary or emergency
purposes. The interest rate on borrowings is based on the Federal Funds rate.
The committed facility also requires a fee to be paid by the Fund based on
the amount of the commitment which has not been utilized. During the year
ended December 31, 1999, the Fund did not have any borrowings under any of
these facilities.
6. OTHER MATTERS
As of December 31, 1999, the Goldman Sachs Growth and Income Strategy Portfo-
lio and Growth Strategy Portfolio were the beneficial owners of approximately
6% and 5%, respectively of the outstanding shares of the Fund.
7. CERTAIN RECLASSIFICATIONS
In accordance with Statement of Position 93-2, the Fund has reclassified
$196,962 and $581,258 from accumulated net realized loss and paid-in capital,
respectively, to accumulated undistributed net investment income. These re-
classifications have no impact on the net asset value of the Fund and are de-
signed to present the Fund's capital accounts on a tax basis.
12
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
8. CHANGE IN INDEPENDENT AUDITOR
On October 26, 1999 the Board of Trustees of the Fund, upon the recommenda-
tion of the Board's audit committee, determined not to retain Arthur Andersen
LLP and approved a change of the Fund's independent auditors to Ernst & Young
LLP. For the fiscal years ended December 31, 1999 and December 31, 1998, Ar-
thur Andersen LLP's audit reports contained no adverse opinion or disclaimer
of opinion; nor were their reports qualified or modified as to uncertainty,
audit scope, or accounting principles. Further, there were no disagreements
between the Fund and Arthur Andersen LLP on accounting principles or practic-
es, financial statement disclosure or audit scope or procedure, which if not
resolved to the satisfaction of Arthur Andersen LLP would have caused them to
make reference to the disagreement in their reports.
9. SUMMARY OF SHARE TRANSACTIONS
Share activity for the year ended December 31, 1999 and the period ended De-
cember 31, 1998 is as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1999 FOR THE PERIOD ENDED DECEMBER 31, 1998(A)
----------------------------------------------------------------
SHARES DOLLARS SHARES DOLLARS
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Shares sold 11,403,124 $104,642,563 2,290,778 $ 21,057,481
Reinvestment of divi-
dends and distribu-
tions 412,356 3,571,008 15,406 140,082
Shares repurchased (3,215,626) (27,495,073) (136,819) (1,259,100)
----------------------------------------------------------------------
8,599,854 80,718,498 2,169,365 19,938,463
---------------------------------------------------------------------------------------------
CLASS B SHARES
Shares sold 51,929 468,345 3,365 30,562
Reinvestment of divi-
dends and distribu-
tions 1,151 9,653 1 6
Shares repurchased (1,003) (8,393) (3,177) (29,200)
----------------------------------------------------------------------
52,077 469,605 189 1,368
---------------------------------------------------------------------------------------------
CLASS C SHARES
Shares sold 88,350 792,983 161 1,600
Reinvestment of divi-
dends and distribu-
tions 1,413 11,869 2 16
Shares repurchased (9,449) (80,747) -- --
----------------------------------------------------------------------
80,314 724,105 163 1,616
---------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES
Shares sold 2,581,373 23,631,931 5,144,538 47,248,039
Reinvestment of divi-
dends and distribu-
tions 101,530 899,623 25,915 237,717
Shares repurchased (2,917,766) (26,428,706) (13,319) (123,055)
----------------------------------------------------------------------
(234,863) (1,897,152) 5,157,134 47,362,701
---------------------------------------------------------------------------------------------
SERVICE SHARES
Shares sold -- -- 161 1,600
Reinvestment of divi-
dends and distribu-
tions 7 66 2 21
Shares repurchased (11) (90) -- --
----------------------------------------------------------------------
(4) (24) 163 1,621
---------------------------------------------------------------------------------------------
NET INCREASE 8,497,378 $ 80,015,032 7,327,014 $67,305,769
---------------------------------------------------------------------------------------------
</TABLE>
(a) Commencement of operations was July 27, 1998 for all classes.
13
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS(A) DISTRIBUTIONS TO SHAREHOLDERS
------------------------------------ -----------------------------
NET ASSET IN EXCESS NET INCREASE
VALUE, NET NET REALIZED FROM NET OF NET (DECREASE)
BEGINNING INVESTMENT AND UNREALIZED INVESTMENT INVESTMENT FROM IN NET ASSET
OF PERIOD INCOME LOSS INCOME INCOME CAPITAL VALUE
FOR THE YEAR ENDED DECEMBER 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999 - Class A Shares $9.20 $0.38(e) $(0.48)(e) $(0.38) (0.02) (0.02) $(0.52)
1999 - Class B Shares 9.27 0.28(e) (0.45)(e) (0.28) (0.07) (0.02) (0.54)
1999 - Class C Shares 9.21 0.30(e) (0.48)(e) (0.30) (0.05) (0.02) (0.55)
1999 - Institutional
Shares 9.21 0.40(e) (0.47)(e) (0.40) (0.03) (0.02) (0.52)
1999 - Service Shares 9.21 0.38(e) (0.49)(e) (0.38) (0.01) (0.02) (0.52)
FOR THE PERIOD ENDED DECEMBER 31,
1998 - Class A Shares
(commenced July 27) 10.00 0.15 (0.80) (0.15) -- -- (0.80)
1998 - Class B Shares
(commenced July 27) 10.00 0.14(e) (0.83)(e) (0.04) -- -- (0.73)
1998 - Class C Shares
(commenced July 27) 10.00 0.22(e) (0.91)(e) (0.10) -- -- (0.79)
1998 - Institutional
Shares (commenced July
27) 10.00 0.31(e) (0.95)(e) (0.15) -- -- (0.79)
1998 - Service Shares
(commenced July 27) 10.00 0.25(e) (0.91)(e) (0.13) -- -- (0.79)
------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes the balancing effect of calculating per share amounts.
(b) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales or redemption charges. Total return would be reduced if a sales or
redemption charge were taken into account.
(c) Annualized.
(d) Not annualized.
(e) Calculated based on the average shares outstanding methodology.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
<TABLE>
<CAPTION>
RATIOS ASSUMING
NO VOLUNTARY WAIVER OF FEES
OR EXPENSE LIMITATIONS
--------------------------------------
NET ASSETS RATIO OF RATIO OF
NET ASSET AT END OF RATIO OF NET INVESTMENT RATIO OF NET INVESTMENT PORTFOLIO
VALUE, END TOTAL PERIOD NET EXPENSES TO INCOME TO EXPENSES TO INCOME TO TURNOVER
OF PERIOD RETURN(B) (IN 000S) AVERAGE NET ASSETS AVERAGE NET ASSETS AVERAGE NET ASSETS AVERAGE NET ASSETS RATE
<S> <C> <C> <C> <C> <C> <C> <C>
$8.68 (1.02)% $93,443 1.44% 4.14% 1.96% 3.62% 37.43%
8.73 (1.73) 457 2.19 3.21 2.46 2.94 37.43
8.66 (1.80) 697 2.19 3.38 2.46 3.11 37.43
8.69 (0.64) 42,790 1.04 4.43 1.31 4.16 37.43
8.69 (1.12) 1 1.54 4.17 1.81 3.90 37.43
9.20 (6.53)(d) 19,961 1.47(c) 23.52(c) 3.52(c) 21.47(c) 6.03(d)
9.27 (6.88)(d) 2 2.19(c) 3.60(c) 4.02(c) 1.77(c) 6.03(d)
9.21 (6.85)(d) 1 2.19(c) 5.49(c) 4.02(c) 3.66(c) 6.03(d)
9.21 (6.37)(d) 47,516 1.04(c) 8.05(c) 2.87(c) 6.22(c) 6.03(d)
9.21 (6.56)(d) 1 1.54(c) 6.29(c) 3.37(c) 4.46(c) 6.03(d)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
GOLDMAN SACHS REAL ESTATE SECURITIES FUND
Report of Independent Public Accountants
To the Shareholders and Board of Trustees of Goldman Sachs Trust -- Real Es-
tate Securities Fund:
We have audited the accompanying statement of assets and liabilities of the
Goldman Sachs Real Estate Securities Fund, one of the portfolios constituting
Goldman Sachs Trust (a Delaware Business Trust), including the statement of
investments, as of December 31, 1999, and the related statement of opera-
tions, the statements of changes in net assets and the financial highlights
for the periods presented. These financial statements and the financial high-
lights are the responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements and the financial high-
lights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the finan-
cial statements. Our procedures included confirmation of securities owned as
of December 31, 1999 by correspondence with the custodian and brokers. An au-
dit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and the financial highlights re-
ferred to above present fairly, in all material respects, the financial posi-
tion of Goldman Sachs Real Estate Securities Fund as of December 31, 1999,
the results of its operations, the changes in its net assets and the finan-
cial highlights for the periods presented, in conformity with generally ac-
cepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 16, 2000
16
<PAGE>
GOLDMAN SACHS FUND PROFILE
Goldman Sachs Real Estate Securities Fund
Four professionals with more than 60 years of combined experience manage the
Goldman Sachs Real Estate Securities Fund. The team draws on Goldman
Sachs'global real estate capabilities:
1 Global Network
Presence in the Americas, Europe
and Asia, including more than
100 asset managers with local and
regional market expertise.
2 Research Expertise
The firm's Equity Research
Department provides coverage of
more than 80 real estate related
companies.
3 History of Strength
The firm has been a leading
presence in the real estate finance
business for more than 20 years
and is one of the most active
underwriters of real estate equity
and debt offerings.
An Investment Idea for the Long Term
Over the long term, real estate investment trusts (REITs) have historically
outperformed many traditional investments, such as fixed income securities,
while seeking to provide competitive total returns against the broad equity
market./1/
Goldman Sachs Real Estate Securities Fund ("the Fund") seeks to provide
investors access to the benefits associated with equity investing. The Fund
seeks long-term growth of capital and dividend income primarily through
investments in equity securities of issuers engaged in or related to the real
estate industry.
Target Your Needs
The Goldman Sachs Real Estate Securities Fund has a distinct investment
objective and a defined place on the risk/return spectrum. As your investment
objectives change, you can exchange shares within the Goldman Sachs Family of
Funds without an additional charge./2/ (Please note: in general, greater returns
are associated with greater risk.)
- --------------------------------------------------------------------------------
Goldman Sachs Funds
[GRAPH]
INTERNATIONAL . Lower Risk/Return . Higher Risk/Return .Goldman Sachs
EQUITY Real Estate
Securities Fund
DOMESTIC ASSET ALLOCATION
EQUITY
SPECIALTY
FIXED
INCOME
MONEY
MARKET
For More Information
To learn more about the Goldman Sachs Real Estate Securities Fund and other
Goldman Sachs Funds, please call your investment professional today.
1 An investment in real estate securities is subject to greater price
volatility the special risks associated with the direct ownership of real
estate.
2 The exchange privilege is subject to termination and its terms are subject
to change.
<PAGE>
- --------------------------------------------------------------------------------
GOLDMAN SACHS ASSET MANAGEMENT 32 OLD SLIP, 17TH FLOOR, NEW YORK, NEW YORK 10005
- --------------------------------------------------------------------------------
TRUSTEES OFFICERS
Ashok N. Bakhru, Chairman Douglas C. Grip, President
David B. Ford Jesse H. Cole, Vice President
Douglas C. Grip James A. Fitzpatrick, Vice President
John P. McNulty Nancy L. Mucker, Vice President
Mary P. McPherson John M. Perlowski, Treasurer
Alan A. Shuch Adrien E. Deberghes, Jr., Assistant Treasurer
Jackson W. Smart, Jr. Philip V. Giuca, Jr., Assistant Treasurer
William H. Springer Michael J. Richman, Secretary
Richard P. Strubel Amy E. Belanger, Assistant Secretary
Howard B. Surloff, Assistant Secretary
Kaysie P. Uniacke, Assistant Secretary
Valerie A. Zondorak, Assistant Secretary
GOLDMAN, SACHS & CO. GOLDMAN SACHS ASSET MANAGEMENT
Distributor and Transfer Agent Investment Adviser
Visit our internet address: www.gs.com/funds
This material is not authorized for distribution to prospective investors unless
preceded or accompanied by a current Prospectus. Investors should read the
Prospectus carefully before investing or sending money.
Goldman, Sachs & Co. is the distributor of the Fund.
An investment in the Real Estate Securities Fund is subject to certain risks
associated with the direct ownership of real estate and with concentrating its
investments in the real estate industry in general and may be suitable only for
those investors who are financially able to assume greater risk and share price
volatility than presented by funds that do not concentrate in the real estate
industry.
Copyright 2000 Goldman, Sachs & Co. All rights reserved. Date of first use:
February 29, 2000 REITAR/8K/2-00
