<PAGE>
Goldman Sachs Funds
ASIA GROWTH FUND Semiannual Report February 29, 2000
Long-term capital growth potential
through a diversified portfolio of stocks
related to Asia, excluding Japan.
[GRAPHIC]
[LOGO OF GOLDMAN SACHS]
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Market Overview
Dear Shareholder,
During the period under review, Asia's economies continued to
rebound -- leading to strong returns in the financial market.
. Asian Equities Move Forward -- During the six-month period
under review, Asian stock markets continued to post solid
results. While these returns were not as dramatic as during
the previous six months, they remained relatively better
than their U.S. counterparts.
Overall, throughout much of the region the prevailing trend
has been a continuation of improving economic fundamentals.
Increasing consumption, financial restructuring, progressive
measures to stimulate economic growth and rising foreign
demand have helped last year's dramatic rebound to steadily
move forward.
The millennium ended with Asian equities posting a strong
fourth quarter. Hong Kong led the major markets, as
telecommunications and Internet-related companies were the
driving forces behind the rise. There were further positive
developments in the Singapore economy, as GDP grew over 8%
during the quarter and 5.6% for the year. And while India
also performed well, it trailed the rest of the region. Thus
far in 2000, Asian markets have given back a portion of
their earlier gains. Profit-taking and rising interest rates
in the U.S. have put a damper on some of the enthusiasm for
the region.
. Market Outlook: Positive Signs Remain -- We believe that
powerful economic growth in Asia should continue through
2000. Whereas exports to the U.S. and Europe originally led
Asia out of its financial crisis, increasing domestic
demand, intra-regional trade and the resurgence of the
Japanese market should drive growth in 2000. These factors
could help to insulate Asia from a slowdown in the western
markets.
As always, we appreciate your support and we look forward to
serving your investment needs in the years to come.
Sincerely,
/s/ David B. Ford
David B. Ford
Co-Head, Goldman Sachs Asset Management
/s/ David W. Blood
David W. Blood
Co-Head, Goldman Sachs Asset Management
March 13, 2000
- ----------------
. NOT FDIC
INSURED
. May Lose Value
. No Bank
Guarantee
- ----------------
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Fund Basics
as of February 29, 2000
Assets Under Management $130.6 Million
Number of Holdings
134
NASDAQ SYMBOLS
Class A Shares
GSAGX
Class B Shares
GSABX
Class C Shares
GSACX
Institutional Shares
GSAIX
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
PERFORMANCE REVIEW
- -------------------------------------------------------------------------------
Fund Total Return MSCI AC Asia Free
August 31, 1999-February 29, 2000 (without sales charge)1 (Ex Japan) Index2
- -------------------------------------------------------------------------------
<S> <C> <C>
Class A 14.81% 10.12%
Class B 14.43 10.12
Class C 14.47 10.12
Institutional 15.12 10.12
- -------------------------------------------------------------------------------
</TABLE>
1 The net asset value represents the net assets of the Fund (ex-dividend)
divided by the total number of shares. The Fund's performance assumes the
reinvestment of dividends and other distributions.
2 The unmanaged Morgan Stanley Capital International (MSCI) All Country (AC)
Asia Free (ex Japan) Index is a market capitalization-weighted composite of
securities in 10 Asian countries, including Hong Kong, India, Indonesia,
Malaysia, Pakistan, Singapore, South Korea, Sri Lanka, Thailand and the
Philippines. Total returns are calculated without dividends reinvested.
"Free" indicates an index that excludes shares in otherwise free markets
that are not purchasable by foreigners. The Index figures do not reflect
any fees or expenses. Investors cannot invest directly in the Index.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
STANDARDIZED TOTAL RETURNS3
- -------------------------------------------------------------------------------
For the period ended Class A Class B Class C Institutional
12/31/99
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Last 6 Months 10.32% 11.33% 15.37% 16.99%
One Year 50.70 53.70 57.52 60.55
Five Years -2.84 N/A N/A N/A
Since Inception -2.12 -8.78 -8.65 -5.50
(7/8/94) (5/1/96) (8/15/97) (2/2/96)
- -------------------------------------------------------------------------------
</TABLE>
3 The Standardized Total Returns are average annual total returns or
cumulative total returns (only if the performance period is one year or
less) as of the most recent calendar quarter-end. They assume reinvestment
of all distributions at net asset value. These returns reflect a maximum
initial sales charge of 5.5% for Class A shares, the assumed deferred sales
charge for Class B shares (5% maximum declining to 0% after six years) and
the assumed deferred sales charge for Class C shares (1% if redeemed within
12 months of purchase). Because Institutional and Service shares do not
involve a sales charge, such a charge is not applied to their Standardized
Total Returns.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
TOP 10 COMPANY HOLDINGS AS OF 2/29/00
- -----------------------------------------------------------------------------------------
% of Total
Company Holding Net Assets Country Line of Business
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hutchison Whampoa Ltd. 7.9% Hong Kong Financial Services
Samsung Electronics 5.1 South Korea Consumer Durables
Cable & Wireless HKT Ltd. 5.0 Hong Kong Telecommunications
Taiwan Semiconductor 4.5 Taiwan Electrical Equipment
Cheung Kong Holdings, Ltd. 4.0 Hong Kong Real Estate
Hindustan Lever Ltd. 3.1 India Tobacco
United Microelectronics Corp. Ltd. 2.5 Taiwan Electrical Utilities
Wipro Ltd. 2.2 India Business Services
Infosys Technologies Ltd. 1.6 India Computer Software
Li & Fung Ltd. 1.5 Hong Kong Wholesale
- -----------------------------------------------------------------------------------------
</TABLE>
The top 10 company holdings may not be representative of the Fund's future
investments.
Total return figures represent past performance and do not indicate
future results, which will vary. The investment return and principal value of an
investment will fluctuate and, therefore, an investor's shares, when redeemed,
may be worth more or less than their original cost. Performance reflects expense
limitations in effect. In their absence, performance would be reduced.
1
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Performance Overview
Dear Shareholder:
We are pleased to report on the performance of the Goldman Sachs Asia
Growth Fund for the six month period that ended February 29, 2000.
Performance Review
Over the six month period ended February 29, 2000, the Fund's
Class A, B, C and Institutional share classes generated
cumulative total returns, without sales charges, of 14.81%,
14.43%, 14.47% and 15.12%, respectively. Over the same time
period, the Fund's benchmark, the MSCI AC Asia Free (Ex Japan)
Index, generated a cumulative total return of 10.12%.
The Fund's strong absolute and relative returns were largely due
to astute country allocations and stock selection.
Portfolio Composition
As a precautionary measure in advance of Y2K, we increased the
Fund's weighting in cash, primarily by reducing its weighting
slightly in Hong Kong. As the reporting period ended, the Fund
held overweight positions in Indonesia, Malaysia and China, while
underweighting Hong Kong, Korea and Taiwan.
Portfolio Highlights
. Samsung Electronics -- Samsung Electronics is one of the top
Dynamic Random Access Memory, or DRAM producers in the world,
with process and product technology that sets the global
standard. It has also developed itself as a leading CDMA handset
and infrastructure manufacturer, as well as establishing a
facility to develop liquid crystal displays that are used for lap
top computers. Its growing market share in these areas, combined
with a recognized brand name, should allow Samsung to continue to
expand.
. Cable & Wireless HKT Ltd./PCCW -- HKT is the incumbent
telecommunication organization in Hong Kong. Over the last two
years it has focused on transitioning its revenue base away from
the erosion in international direct dial rates to a model based
on data. In addition, the firm's network has untapped value as a
provider of broadband services to residences and businesses in
Hong Kong. Its proposed takeover by Pacific Century Cyberworks,
or PCCW could allow the potential for PCCW content to drive HKT's
Internet infrastructure development strategy.
. China Telecom Ltd.-- China Telecom is the dominant cellular
service provider in China. It currently runs operations in three
of the richest provinces in China, including Guangdong, Zhejiang
and Jiangsu, and holds a 95% market share in those areas. The
firm has well over 10 million subscribers and 187 million
potential users in the networks they cover. Cellular penetration
should continue to grow rapidly from a small base, feeding
directly into China Telecom's bottom line.
2
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
INVESTMENT PROCESS OVERVIEW
The investment process for the Goldman Sachs Asia Growth Fund combines both
qualitative and quantitative analysis, with an emphasis on portfolio manager
input.
- -------------------
Company Visits
- -------------------
Internal Research
- -------------------
Return Expectations
- -------------------
- -------------------
Stock Selection
- -------------------
- -------------------
Portfolio
Construction
- -------------------
. Stock & Industry
Views Relative
to Benchmark
- -------------------
- -------------------
Portfolio Review
& Analysis
- -------------------
. Performance
Measurement
& Attribution
. BARRA
. Risk Analysis
- -------------------
Portfolio Outlook
We remain generally positive about the outlook for Asian stocks. Technology
should remain an important sector. Asia's dominance in many technologies is
built on the foundation of competitive, less speculative companies, many of
which continue to trade at compelling values. On a cautious note, we recognize
that the prospects of the Asian market are closely tied to that of the U.S.
Therefore, we will be closely monitoring all economic data coming out of the
U.S. in an effort to determine its impact on the Asian markets.
We thank you for your investment and we look forward to your continued
confidence in the future.
Goldman Sachs Asia Equity Investment Team
Singapore
February 29, 2000
3
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
The Goldman Sachs Advantage
Founded in 1869, Goldman, Sachs & Co. is a premier financial services
firm traditionally known on Wall Street and around the world for its
institutional expertise.
Today, the firm's Investment Management Division provides
individual investors the opportunity to tap the resources of a
global institutional powerhouse -- and put this expertise to work
in their individual portfolios.
What Sets Goldman Sachs Funds Apart?
1
Resources and Relationships
Our portfolio management teams are located on-site, around the
world, in New York, London, Tokyo and Singapore. Their
understanding of local economies, markets, industries and
cultures helps deliver what many investors want: access to global
investment opportunities and consistent, risk-adjusted
performance.
2
In-Depth Research
Our portfolio management teams make on-site visits to hundreds of
companies each month, then construct selective portfolios with an
emphasis on their best ideas. Our teams also have access to
Goldman, Sachs & Co.'s Global Investment Research Department.
3
Risk Management
In this, our institutional heritage is clear. Institutions, as
well as many individual investors, often look to us to manage the
risks of global investing over time in different market
environments.
To learn more about the Goldman Sachs Funds, call your investment
professional today.
4
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Performance Summary
February 29, 2000 (Unaudited)
The following graph shows the value, as of February 29, 2000, of a $10,000
investment made on July 8, 1994 (commencement of operations) in Class A
Shares (maximum sales charge of 5.5%) of the Goldman Sachs Asia Growth Fund.
For comparative purposes, the performance of the Fund's benchmark, the Morgan
Stanley All Country Asia Free ex Japan Index ("MSCI Index") is shown. This
performance data represents past performance and should not be considered in-
dicative of future performance which will fluctuate with changes in market
conditions. These performance fluctuations will cause an investor's shares,
when redeemed, to be worth more or less than their original cost. Performance
of Class B, Class C and Institutional Shares will vary from Class A due to
differences in fees and loads.
Asia Growth Fund's Lifetime Performance
Performance of a $10,000 Investment, Distributions Reinvested July 8, 1994 to
February 29, 2000
[GRAPH]
MSCI Class A
Index MSCI -----------
JULY 8 --------- 10,000 9,450
JULY 7.00% 10,700 -1.533333 9,847
AUG 7.84% 11,539 4.733333 10,473
SEPT -2.09% 11,298 5.2 10,520
OCT 1.40% 11,456 5.666667 10,567
NOV -8.95% 10,431 -0.666667 9,933
DEC -2.92% 10,126 -2.945383 9,705
JAN/95 -10.38% 9,075 -10.664111 8,934
FEB 8.23% 9,822 -4.958964 9,504
MAR -0.33% 9,790 -5.294561 9,471
APR -1.57% 9,636 -6.838307 9,316
MAY 11.09% 10,705 4.504868 10,450
JUNE -1.71% 10,522 2.894003 10,289
JULY 1.71% 10,702 5.041823 10,504
AUG -4.77% 10,191 0.477705 10,048
SEPT 1.04% 10,297 2.692645 10,269
OCT -1.84% 10,108 0.343466 10,034
NOV -2.40% 9,865 -2.20707 9,779
DEC 4.81% 10,340 3.409336 10,341
JAN/96 7.65% 11,131 13.003311 11,300
FEB 0.95% 11,236 13.414481 11,341
MAR 0.56% 11,299 12.18097 11,218
APR 3.43% 11,687 18.622638 11,862
MAY -1.28% 11,537 18.417053 11,842
JUNE -1.68% 11,343 14.647992 11,465
JULY -7.57% 10,484 6.561642 10,656
AUG 2.84% 10,782 7.726625 10,773
SEP 1.58% 10,953 7.93221 10,793
OCT -2.00% 10,734 4.848433 10,485
NOV 4.61% 11,229 9.988062 10,999
DEC -0.45% 11,178 11.652366 11,165
JAN/97 1.94% 11,395 11.858113 11,186
FEB 0.76% 11,482 10.96654 11,097
MAR -4.59% 10,954 6.508676 10,651
APR -2.96% 10,630 4.314035 10,431
MAY 4.30% 11,087 11.515201 11,152
JUNE 3.46% 11,471 12.612521 11,261
JULY 0.63% 11,543 13.298347 11,330
AUG -17.87% 9,480 -8.648054 9,135
SEP -0.59% 9,424 -9.453945 9,055
OCT -22.39% 7,314 -32.142023 6,786
NOV -7.00% 6,802 -33.448306 6,655
DEC -3.94% 6,534 -34.2046 6,580
JAN'98 -8.83% 5,957 -42.386 5,761
FEB 21.03% 7,210 -32.279526 6,772
MAR -1.70% 7,088 -33.448306 6,655
APR -8.94% 6,454 -37.91717 6,208
MAY -15.56% 5,450 -46.304883 5,370
JUNE -11.56% 4,820 -51.255009 4,874
JULY -2.79% 4,685 -51.942527 4,806
AUG -14.66% 3,998 -58.473943 4,153
SEP 9.70% 4,386 -54.142583 4,586
OCT 21.55% 5,331 -46.442387 5,356
NOV 7.91% 5,753 -43.967324 5,603
DEC 1.92% 5,864 -44.242331 5,576
JAN'99 -1.72% 5,763 -46.442387 5,356
FEB -2.10% 5,642 -47.473663 5,253
MAR 11.65% 6,299 -41.836019 5,816
APR 18.15% 7,442 -33.310802 6,669
MAY -2.30% 7,271 -35.235851 6,476
JUNE 15.41% 8,392 -23.823061 7,618
JULY -2.37% 8,193 -25.541855 7,446
AUG 2.34% 8,384 -23.891813 7,611
SEP -7.08% 7,791 -28.64 7,136
OCT 3.12% 8,034 -26.37 7,363
NOV 9.43% 8,792 -17.57 8,243
DEC 8.01% 9,496 -11.1 8,890
JAN'2000 -0.60% 9,439 -11.04 8,896
FEB -2.18% 9,233 -12.62 8,738
<TABLE>
<CAPTION>
Average Annual Total Return through February 29, 2000
Since Inception Five Years One Year Six Months(a)
<S> <C> <C> <C> <C>
Class A (commenced July 8,
1994)
Excluding sales charges -1.38% -1.66% 66.13% 14.81%
Including sales charges -2.36% -2.76% 57.11% 8.54%
------------------------------------------------------------------------------
Class B (commenced May 1,
1996)
Excluding contingent
deferred sales charges -8.13% n/a 65.11% 14.43%
Including contingent
deferred sales charges -8.86% n/a 60.13% 9.43%
------------------------------------------------------------------------------
Class C (commenced August
15, 1997)
Excluding contingent
deferred sales charges -8.78% n/a 65.15% 14.47%
Including contingent
deferred sales charges -8.78% n/a 64.16% 13.47%
------------------------------------------------------------------------------
Institutional Class (com-
menced February 2, 1996) -5.66% n/a 67.11% 15.12%
------------------------------------------------------------------------------
</TABLE>
(a) Not annualized.
5
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Investments
February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - 89.1%
<C> <S> <C>
China - 1.9%
1,521,000 Angang New Steel Co. Ltd. Class H (Steel) $ 93,806
197,000 China Telecom Ltd.* (Telecommunications) 1,816,129
354,000 Guangdong Kelon Electrical Holdings Co. Ltd. Class H
(Appliance) 172,840
1,094,000 Shandong International Power Development Co. Ltd.
Class H* (Electrical Utilities) 113,857
1,914,000 Yanzhou Coal Mining Co. Ltd. Class H (Mining) 300,027
------------
2,496,659
-------------------------------------------------------------------------------
Hong Kong - 25.7%
1,954,200 Cable & Wireless HKT Ltd. (Telecommunications) 6,515,758
393,000 Cheung Kong Holdings Ltd.
(Real Estate) 5,276,761
137,000 Citic Pacific Ltd.
(Multi-Industrial) 688,265
125,200 Dah Sing Financial Holdings (Banks) 406,990
211,000 Dao Heng Bank Group Ltd. (Financial Services) 791,633
537,000 Dickson Concepts International Ltd. (Specialty
Retail) 586,478
842,000 Giordano International Ltd. (Specialty Retail) 941,217
658,000 Hutchison Whampoa Ltd.
(Multi-Industrial) 10,314,407
263,000 Johnson Electric Holdings Ltd. (Electrical Equipment) 1,698,049
600,000 Kerry Properties Ltd. (Real Estate) 720,811
516,000 Li & Fung Ltd. (Wholesale) 2,008,866
10,000 New World China Land Ltd.* (Real Estate) 2,955
650,000 Shum Yip Investment Ltd.
(Real Estate) 202,527
719,000 South China Morning Post Holdings Ltd. (Publishing) 715,961
151,000 Sun Hung Kai Properties Ltd.
(Real Estate) 1,362,956
388,000 TCL International Holdings Ltd.* (Electronics
Equipment) 204,397
62,000 Television Broadcasts Ltd. (Media) 505,853
307,000 Yue Yuen Industrial Holdings (Apparel) 589,709
------------
33,533,593
-------------------------------------------------------------------------------
India - 13.2%
5,539 Aptech Ltd. (Computer Software) 294,990
21,100 Cinevista Communications*
(Telecommunications) 145,184
16,300 HCL Technologies Ltd.*
(Computer Software) 790,344
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
India - (continued)
59,029 Hindustan Lever Ltd. (Home Products) $ 3,926,241
1,296 Hindustan Lever Ltd. (Tobacco) 86,202
123,500 ICICI Ltd. (Banks) 461,001
4,100 Infosys Technologies Ltd. (Computer Software) 818,552
6,250 Infosys Technologies Ltd. (Computer Software) 1,247,792
71,774 ITC Ltd. (Tobacco) 1,231,352
117,700 Mahanagar Telephone Nigam Ltd. (Telecommunications) 769,099
9,000 Niit Ltd. (Computer Software) 460,734
21,000 Pentamedia Graphics Ltd. (Computer Software) 784,345
4,350 Punjab Tractors Ltd. (Agriculture) 81,288
127,500 Reliance Industries Ltd. (Chemicals) 910,777
11,000 Satyam Computer Services Ltd. (Computer Software) 1,337,787
19,101 Wipro Ltd. (Computer Software) 2,891,436
32,500 Zee Telefims Ltd. (Broadcasting) 974,441
------------
17,211,565
-----------------------------------------------------------------------------
Indonesia - 3.0%
832,500 Pab K Tjiwi Kimia* (Paper) 196,080
188,000 PT Astra Graphia Tbk
(Multi-Industrial) 215,074
2,504,000 PT Bank Pan Indonesia Tbk - Alien Market (Banks) 160,081
244,600 PT Gudang Garam Tbk (Tobacco) 407,392
790,000 PT Indah Kiat Pulp & Paper Corp.* (Paper) 217,968
769,000 PT Indofood Sukses* (Food & Beverage) 636,521
493,000 PT Indosat (Persero) Tbk (Telecommunications) 889,125
2,095,000 PT Matahari Putra Prima Tbk* (Merchandising) 281,965
1,458,520 PT Telekomunikasi Indonesia Series B
(Telecommunications) 716,500
417,000 PT Tempo Scan Pacific Tbk (Health) 202,046
------------
3,922,752
-----------------------------------------------------------------------------
Malaysia - 4.2%
306,000 Arab-Malaysian Finance Berhad - Alien Market*
(Banks) 487,184
81,000 MAA Holdings Berhad* (Insurance) 213,158
165,000 Malayan Banking Berhad (Banks) 742,500
151,000 New Straits Times Press M Berhad (Publishing) 635,790
238,000 Public Bank Berhad - Alien Market (Banks) 322,552
436,000 Public Bank Berhad (Banks) 481,895
244,000 Resorts World Berhad (Leisure) 886,105
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Malaysia - (continued)
121,000 Telekom Malaysia Berhad (Telecommunications) $ 512,658
133,000 Tenaga Nasional Berhad (Electrical Utilities) 441,000
75,000 Unisem (M) Berhad
(Electrical Equipment) 710,526
-------------
5,433,368
----------------------------------------------------------------------------
Philippines - 1.2%
344,000 ABS-CBN Broadcasting Corp. PDR* (Broadcasting) 381,943
98,500 Bank of the Philippine Islands (Banks) 223,536
1,402,000 Benpres Holdings Corp.*
(Multi-Industrial) 253,167
64,990 Manila Electric Co. Class B
(Electrical Utilities) 118,942
18,500 Philippine Long Distance Telephone Co.
(Telecommunications) 401,781
1,509,500 SM Prime (Construction) 202,593
-------------
1,581,962
----------------------------------------------------------------------------
Singapore - 6.5%
86,000 Chartered Semiconductor Manufacturing Ltd.*
(Semiconductors) 733,507
62,000 City Developments (Real Estate) 251,813
71,000 Datacraft Asia Ltd. (Telecommunications) 599,950
88,000 DBS Group Holdings Ltd. (Banks) 1,087,554
501,000 PCI Ltd. (Electronics Equipment) 401,149
32,000 Singapore Airlines Ltd. (Airlines) 297,070
79,664 Singapore Press Holdings Ltd. (Publishing) 1,525,333
208,000 Singapore Technologies
Engineering Ltd. (Machinery) 254,645
344,000 Singapore Telecommunications Ltd.
(Telecommunications) 558,863
175,000 St. Assembly Test
Services Ltd.* (Electronics Equipment) 791,993
81,512 United Overseas Bank Ltd. (Banks) 515,510
99,000 Venture Manufacturing Ltd. (Electrical Equipment) 1,487,729
-------------
8,505,116
----------------------------------------------------------------------------
South Korea - 13.0%
16,800 Dongwon Securities
(Financial Services) 343,098
22,310 Hite Brewery Co.*
(Food & Beverage) 552,274
21,620 Honam Petrochemical Corp. (Chemicals) 296,268
33,143 Housing & Commercial Bank* (Banks) 590,424
</TABLE>
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
South Korea - (continued)
16,263 Hyundai Electronics Industries Co.* (Electronics
Equipment) $ 257,366
57,790 Korea Electric Power Corp. (Electrical Utilities) 1,445,893
3,900 Korea Telecom Corp. ADR (Telecommunications) 329,280
9,850 Korea Tobacco & Ginseng Corp.* (Tobacco) 229,505
18,600 LG Chemical Ltd. (Chemicals) 492,501
16,360 Mirae Co. ADR
(Electrical Equipment) 213,702
23,100 Pantech Co. Ltd. (Telecommunications) 543,239
17,729 Pohang Iron & Steel Co. Ltd. (Steel) 1,800,086
29,329 Samsung Electronics (Semiconductors) 6,637,955
15,730 Samsung Securities Co. Ltd. (Financial Services) 481,174
81,290 Shinhan Bank (Banks) 776,172
274 Sindo Ricoh (Electrical Equipment) 7,752
22,498 SK Telecom Co. Ltd. ADR (Telecommunications) 1,011,004
10,052 Trigem Computer, Inc.*
(Electrical Equipment) 1,008,661
------------
17,016,354
------------------------------------------------------------------------------
Taiwan - 18.1%
168,174 Acer Peripherals, Inc.
(Electrical Equipment) 780,612
423,750 Acer, Inc. (Electrical Equipment) 1,157,985
69,000 Ambit Microsystems Corp.
(Electrical Equipment) 710,228
733,000 ASE Test Ltd. TDR*
(Electronics Equipment) 489,463
63,000 Asustek Computer, Inc. (Appliance) 785,961
1,207,356 Bank Sinopac (Financial Services) 829,811
170,850 Cathay Life Insurance Co. (Insurance) 473,037
721,560 Chinatrust Commercial Bank (Banks) 775,618
163,000 Compeq Manufacturing Co. Ltd. (Electrical Equipment) 1,003,485
109,000 Delta Electronics, Inc.
(Electrical Equipment) 525,472
40 Far Eastern Textile Ltd. (Apparel) 87
121,400 Hon Hai Precision (Electrical Equipment) 1,130,958
483,200 Kang Na Hsiung Enterprise (Home Products) 347,841
487,381 Macronix International Co. Ltd. (Semiconductors) 1,150,981
194,000 Nan Ya Plastic Corp. (Chemicals) 429,707
158,240 President Chain Stores (Specialty Retail) 690,689
143,000 Procomp Informatics Co. Ltd.* (Semiconductors) 1,117,915
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Investments (continued)
February 29, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value
Common Stocks - (continued)
<C> <S> <C>
Taiwan - (continued)
1 Siliconware Precis (Electrical Equipment) $ 2
144,000 Synnex Technology International Corp. (Computer
Hardware) 1,008,469
475,000 Taiwan Cement Corp. (Construction) 666,857
893,156 Taiwan Semiconductor (Semiconductors) 5,847,699
877,000 United Microelectonics Corp. Ltd. (Semiconductors) 3,213,762
162,000 Universal Scientific Industrial Co. Ltd.* (Electrical
Equipment) 554,072
------------
23,690,711
-----------------------------------------------------------------------------
Thailand - 2.3%
45,400 Advanced Info Service Public-Alien Market*
(Telecommunications) 705,150
72,200 BEC World PLC - Alien Market (Entertainment) 541,761
14,300 Delta Electronics (Thailand) Public Co. Ltd. - Alien
Market (Electrical Equipment) 164,329
340,980 Land & House Public Co. Ltd. - Alien Market* (Real
Estate) 158,793
137,000 Loxley Public Co. Ltd. - Alien Market*
(Telecommunications) 107,832
628,300 TelecomAsia Corp. Public - Alien Market*
(Telecommunications) 873,669
414,000 Thai Farmers Bank Public Co. Ltd. - Alien Market*
(Banks) 391,027
------------
2,942,561
-----------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $94,168,285) $116,334,641
-----------------------------------------------------------------------------
Preferred Stocks - 0.1%
Thailand - 0.1%
150,000 Siam Commercial Bank Public Co. Ltd.* (Banks) $ 90,516
-----------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $105,391) $ 90,516
-----------------------------------------------------------------------------
Warrants - 2.6%
Indonesia - 0.0%
357,000 PT Bank Pan Indonesia Tbk -Alien Market exp.
07/08/2002* (Banks) $ 8,168
-----------------------------------------------------------------------------
South Korea - 2.6%
380,423 Merrill Lynch Call Warrant on KOSPI 200 exp.
09/09/2000* 3,417,074
-----------------------------------------------------------------------------
TOTAL WARRANTS
(Cost $1,919,767) $ 3,425,242
-----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Units Description Value
Equity Swaps - 1.5%
<C> <S> <C>
Singapore - 1.5%
23,350 Development Bank of Singapore
Equity Swap*
exp. 05/18/2000 $ 301,484
63,450 Development Bank of Singapore
Equity Swap*
exp. 05/25/2000 819,236
67,200 Development Bank of Singapore
Equity Swap*
exp. 07/28/2000 865,041
---------------------------------------------------------------------
TOTAL EQUITY SWAPS
(Cost $1,345,715) $ 1,985,761
---------------------------------------------------------------------
Structured Notes - 0.4%
Singapore - 0.4%
4 UBS AG Equity Linked Note -Singapore Airlines
exp. 04/10/2000* $ 37,661
67 UBS AG Equity Linked Note exp. 04/10/2000* 464,886
---------------------------------------------------------------------
TOTAL STRUCTURED NOTES
(Cost $435,559) $ 502,547
---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal Interest Maturity
Amount Rate Date Value
Short-Term Obligation - 2.1%
<S> <C> <C> <C>
State Street Bank & Trust Euro-
Time Deposit
$2,786,000 5.75% 03/01/2000 $ 2,786,000
-----------------------------------------------
TOTAL SHORT-TERM OBLIGATION
(Cost $2,786,000) $ 2,786,000
-----------------------------------------------
TOTAL INVESTMENTS
(Cost $100,760,717) $125,124,707
-----------------------------------------------
</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.
------------------------------------------------------------------------------
Investment Abbreviations:
ADR--American Depositary Receipt
TDR--Taiwan Depositary Receipt
PDR--Philippine Depositary Receipt
------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
<TABLE>
<CAPTION>
As a % of
total net assets
Common and Preferred Stock Industry Classifications+
<S> <C>
Agriculture 0.1%
Airlines 0.2
Apparel 0.5
Appliance 0.7
Banks 5.8
Broadcasting 1.0
Chemicals 1.6
Computer Hardware 0.8
Computer Software 6.6
Construction 0.7
Electrical Equipment 8.5
Electrical Utilities 1.6
Electronics Equip-
ment 1.7
Entertainment 0.4
Financial Services 1.9
Food & Beverage 0.9
Health 0.2
Home Products 3.3
Insurance 0.5
Leisure 0.7
Machinery 0.2
Media 0.4
Merchandising 0.2
Mining 0.2
Multi-Industrial 8.8
Paper 0.3
Publishing 2.2
Real Estate 6.1
Semiconductors 14.3
Specialty Retail 1.7
Steel 1.5
Telecommunications 12.6
Tobacco 1.5
Wholesale 1.5
----------------------------------------------------
TOTAL COMMON AND
PREFERRED STOCK 89.2%
----------------------------------------------------
</TABLE>
+ Industry concentrations greater than one tenth of one percent are
disclosed.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Assets and Liabilities
February 29, 2000 (Unaudited)
Assets:
<TABLE>
<S> <C>
Investment in securities, at value (identified cost
$100,760,717) $125,124,707
Cash, at value 4,943,380
Receivables:
Investment securities sold 4,031,423
Dividends and interest, at value 93,661
Fund shares sold 1,556,803
Reimbursement from adviser 189,162
Other assets 14,078
------------------------------------------------------------------------------
Total assets 135,953,214
------------------------------------------------------------------------------
Liabilities:
Payables:
Investment securities purchased 3,342,106
Capital gains tax, at value 698,424
Fund shares repurchased 940,892
Amounts owed to affiliates 176,050
Accrued expenses and other liabilities 148,310
------------------------------------------------------------------------------
Total liabilities 5,305,782
------------------------------------------------------------------------------
Net Assets:
Paid-in capital 188,559,871
Accumulated net investment loss (540,906)
Accumulated net realized loss on investment, swaps, futures
and foreign currency related transactions (81,024,876)
Net unrealized gain on investments, swaps, futures and
translation of assets and liabilities denominated in foreign
currencies 23,653,343
------------------------------------------------------------------------------
NET ASSETS $130,647,432
------------------------------------------------------------------------------
Net asset value, offering and redemption price per share:(a)
Class A $12.71
Class B $12.45
Class C $12.42
Institutional $12.94
------------------------------------------------------------------------------
Shares outstanding:
Class A 8,210,192
Class B 742,671
Class C 254,503
Institutional 1,075,037
------------------------------------------------------------------------------
Total shares outstanding, $.001 par value (unlimited number of
shares authorized) 10,282,403
------------------------------------------------------------------------------
</TABLE>
(a) Maximum public offering price per share (NAV per share multiplied by
1.0582) for Class A Shares is $13.45. 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.
10
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statement of Operations
For the Six Months Ended February 29, 2000 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Dividends(a) $ 428,533
Interest 103,154
----------------------------------------------------------------------------
Total income 531,687
----------------------------------------------------------------------------
Expenses:
Management fees 586,883
Distribution and Service fees(b) 287,815
Custodian fees 257,745
Transfer Agent fees(c) 101,645
Registration fees 45,652
Professional fees 28,269
Trustee fees 4,008
Other 36,240
----------------------------------------------------------------------------
Total expenses 1,348,257
----------------------------------------------------------------------------
Less -- expenses reimbursed (275,664)
----------------------------------------------------------------------------
Net Expenses 1,072,593
----------------------------------------------------------------------------
NET INVESTMENT LOSS (540,906)
----------------------------------------------------------------------------
Realized and unrealized gain (loss) on investment, swaps,
futures and foreign currency transactions:
Net realized gain (loss) from:
Investment transactions 16,039,229
Futures transactions 24,408
Foreign currency related transactions (196,576)
Net change in unrealized gain (loss) on:
Investments 1,951,269
Translation of assets and liabilities denominated in foreign
currencies (11,055)
----------------------------------------------------------------------------
Net realized and unrealized gain on investment, futures and
foreign currency transactions: 17,807,275
----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $17,266,369
----------------------------------------------------------------------------
</TABLE>
(a) Taxes withheld on dividends were $47,987.
(b) Class A, Class B and Class C had Distribution and Service fees of
$233,318, $40,441 and $14,056, respectively.
(c) Class A, Class B, Class C, and Institutional Class had Transfer Agent
fees of $88,660, $7,684, $2,671, and $2,630, respectively.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the
For the Seven-Month For the
Six Months Ended Period Ended Year Ended
February 29, 2000 August 31, January 31,
(Unaudited) 1999 1999
<S> <C> <C> <C>
From operations:
Net investment income (loss) $ (540,906) $ (189,728) $ 492,262
Net realized gain (loss)
from investment, futures and
foreign currency related
transactions 15,867,061 3,213,321 (27,883,885)
Net change in unrealized
gain (loss) on investments
and translation of assets
and liabilities denominated
in foreign currencies 1,940,214 26,462,083 21,285,501
------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
operations 17,266,369 29,485,676 (6,106,122)
------------------------------------------------------------------------------
Distributions to sharehold-
ers:
In excess of net investment
income
Class A Shares -- -- --
Class B Shares -- -- --
Class C Shares -- -- --
Institutional Shares -- (43,226) --
------------------------------------------------------------------------------
Total distributions to
shareholders -- (43,226) --
------------------------------------------------------------------------------
From share transactions:
Proceeds from sales of
shares 92,225,477 97,742,029 138,273,446
Reinvestment of dividends
and distributions -- 40,413 --
Cost of shares repurchased (85,015,034) (90,383,194) (154,943,929)
------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting from
share transactions 7,210,443 7,399,248 (16,670,483)
------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) 24,476,812 36,841,698 (22,776,605)
------------------------------------------------------------------------------
Net assets:
Beginning of period 106,170,620 69,328,922 92,105,52
------------------------------------------------------------------------------
End of period $130,647,432 $106,170,620 $ 69,328,922
------------------------------------------------------------------------------
Accumulated net investment
loss $ (540,906) -- $ (105,797)
------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Notes to Financial Statements
February 29, 2000 (Unaudited)
1. ORGANIZATION
Goldman Sachs Trust (the "Trust") is a Delaware business trust registered un-
der the Investment Company Act of 1940 (as amended) as an open-end, manage-
ment investment company. The Trust includes the Goldman Sachs Asia Growth
Fund (the "Fund"). The Fund is a diversified portfolio offering five classes
of shares -- Class A, Class B, Class C, Institutional and Service (Service
shares have not commenced operations).
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies consist-
ently followed by the Fund. The preparation of financial statements in con-
formity with generally accepted accounting principles requires management to
make estimates and assumptions that may affect the reported amounts. Actual
results could differ from those estimates. Effective for fiscal year 1999,
the Board of Trustees approved a change in the fiscal year end of the Fund
from January 31 to August 31. Accordingly, the Statements of Changes in Net
Assets, Summary of Share Transactions and Financial Highlights of the Fund
are included for the seven months ended August 31, 1999 and for the year
ended January 31, 1999.
A. Investment Valuation -- Investments in securities traded on a U.S. or for-
eign securities exchange or the NASDAQ system are valued daily at their last
sale price on the principal exchange on which they are traded. If no sale oc-
curs, securities are valued at the last bid price. Debt securities are valued
at prices supplied by independent pricing services, broker/dealer-supplied
valuations or matrix pricing systems. Unlisted equity and debt securities for
which market quotations are available are valued at the last sale price on
the valuation date or, if no sale occurs, at the last bid price. Short-term
debt obligations maturing in sixty days or less are valued at amortized cost,
which approximates market value. Securities for which quotations are not
readily available are valued at fair value using methods approved by the
Board of Trustees of the Trust.
Investing in emerging markets may involve special risks and considerations
not typically associated with investing in the United States. These risks in-
clude revaluation of currencies, high rates of inflation, repatriation re-
strictions on income and capital and future adverse political and economic
developments. Moreover, securities issued in these markets may be less liq-
uid, subject to government ownership controls, delayed settlements, and their
prices may be more volatile than those of comparable securities in the United
States.
B. Security Transactions and Investment Income -- Security transactions are
recorded as of the trade date. Realized gains and losses on sales of portfo-
lio securities are calculated using the identified-cost basis. Dividend in-
come is recorded on the ex-dividend date. Dividends for which the Fund has
the choice to receive either cash or stock are recognized as investment in-
come in an amount equal to the cash dividend. Interest income is recorded on
the basis of interest accrued, premium amortized and discount earned. In ad-
dition, it is the Fund's policy to accrue for estimated capital gains taxes
on appreciated foreign securities held.
13
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Notes to Financial Statements (continued)
February 29, 2000 (Unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
C. Federal Taxes -- It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute each year substantially all of its investment company taxable
income and capital gains to its shareholders. Accordingly, no federal tax
provision is required.
The Fund had approximately $95,393,000 at August 31, 1999 (the Fund's tax
year end) of capital loss carryforwards expiring 2002 through 2007 for fed-
eral tax purposes. These amounts are available to be carried forward to off-
set future capital gains to the extent permitted by applicable laws or
regulations.
The characterization of distributions to shareholders for financial re-
porting purposes is determined in accordance with income tax rules. There-
fore, the source of the Fund's distributions may be shown in the accompanying
financial statements as either from or in excess of net investment income or
net realized gain on investment transactions, or from paid-in capital, de-
pending on the type of book / tax differences that may exist. At February 29,
2000, the aggregate cost of portfolio securities for federal income tax pur-
poses is $101,672,278. Accordingly, the gross unrealized gain on investments
was $30,438,704 and the gross unrealized loss on investments was $6,986,275
resulting in a net unrealized gain of $23,452,429.
D. Expenses -- Expenses incurred by the Trust which do not specifically re-
late to an individual Fund of the Trust are allocated to the Funds based on a
straight-line or pro rata basis depending on the nature of the expense.
Class A, Class B and Class C shares bear all expenses and fees relating to
their respective Distribution and Service plans. Each class of shares of the
Fund separately bears its respective class-specific transfer agency fees.
E. Foreign Currency Translations -- The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in foreign currencies are
translated into U.S. dollars on the following basis: (i) investment valua-
tions, foreign currency and other assets and liabilities initially expressed
in foreign currencies are converted each business day into U.S. dollars based
on current exchange rates; (ii) purchases and sales of foreign investments,
income and expenses are converted into U.S. dollars based on currency ex-
change rates prevailing on the respective dates of such transactions.
Net realized and unrealized gain (loss) on foreign currency transactions
will represent: (i) foreign exchange gains and losses from the sale and hold-
ings of foreign currencies; (ii) currency gains and losses between trade date
and settlement date on investment securities transactions and forward ex-
change contracts; and (iii) gains and losses from the difference between
amounts of dividends, interest and foreign withholding taxes recorded and the
amounts actually received.
F. Derivative Financial Instruments -- The Fund may utilize derivative finan-
cial instruments such as structured notes and equity swaps. Such instruments
are used by the Fund as a means of investing in a particular market or in-
creasing the return on the Fund's investments or both. The value of the prin-
cipal and/or interest on such securities is determined by reference to
changes in the value of the financial indicators including, but not limited
to indices, currencies or interest rates. These financial instruments may
subject the Fund to a greater degree of market or counterparty risk and loss
than other types of securities.
G. Segregation Transactions -- The Fund may enter into certain derivative
transactions to seek to increase total return. Forward foreign currency ex-
change contracts, futures contracts, written options, mortgage dollar rolls,
when-issued securities and forward commitments represent examples of such
transactions. As a result of entering into these transactions, the Fund is
required to segregate liquid assets on the accounting records equal to or
greater than the market value of the corresponding transactions.
14
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
3. AGREEMENTS
Pursuant to the Investment Management Agreement (the "Agreement"), Goldman
Sachs Asset Management International ("GSAMI"), an affiliate of Goldman Sachs
Asset Management ("GSAM"), a unit of the Investment Management Division of
Goldman, Sachs & Co. ("Goldman Sachs"), serves as the investment adviser to
the Fund. Under the Agreement, GSAMI, subject to the general supervision of
the Trust's Board of Trustees, manages the Fund's portfolio. As compensation
for the services rendered under the Agreement, the assumption of the expenses
related thereto and administering the Fund's business affairs, including pro-
viding facilities, GSAMI is entitled to a fee, computed daily and payable
monthly, at an annual rate equal to 1.00% of the average daily net assets of
the Fund.
The investment adviser has voluntarily agreed to limit certain "Other Ex-
penses" (excluding management fees, distribution and service fees, transfer
agent fees, taxes, interest, brokerage, litigation, indemnification costs and
other extraordinary expenses) to the extent such expenses exceed, on an an-
nual basis, .16% of the average daily net assets of the Fund. Goldman Sachs
reimbursed approximately $276,000 for the period ended February 29, 2000.
The Trust, on behalf of the Fund, has adopted Distribution and Service
Plans. Under the Distribution and Service Plans, Goldman Sachs and/or autho-
rized dealers are entitled to a monthly fee from the Fund for distribution
and shareholder maintenance services equal, on an annual basis, to 0.50%,
1.00% and 1.00% of the Fund's average daily net assets attributable to Class
A, Class B and Class C Shares, respectively.
Goldman Sachs serves as the distributor of shares of the Fund pursuant to a
Distribution Agreement. Goldman Sachs may receive a portion of the Class A
sales load and Class B and Class C contingent deferred sales charges and has
advised the Fund that it retained approximately $111,000 for the period ended
February 29, 2000.
Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. The
fees charged for such transfer agency services are calculated daily and pay-
able monthly at an annual rate as follows: 0.19% of average daily net assets
for Class A, Class B and Class C Shares and 0.04% of average daily net assets
for Institutional Shares.
As of February 29, 2000, the amounts owed to affiliates were approximately
$106,000, $52,000 and $18,000 for management, distribution and service and
transfer agent fees, respectively.
4. PORTFOLIO SECURITIES TRANSACTIONS
Purchases and proceeds of sales or maturities of securities (excluding short-
term investments and futures transactions) for the period ended February 29,
2000, were $110,914,793 and $111,993,655, respectively.
For the period ended February 29, 2000, Goldman Sachs earned approximately
$41,000 of brokerage commissions from portfolio transactions.
Futures Contracts -- The Fund may enter into futures transactions to hedge
against changes in interest rates, securities prices, currency exchange rates
or to seek to increase total return. Upon entering into a futures contract,
the Fund is required to deposit with a broker or the Fund's custodian bank,
an amount of cash or securities equal to the minimum "initial margin" re-
quirement of the associated futures exchange. Subsequent payments for futures
contracts ("variation margin") are paid or received by the Fund, depending on
the fluctuations in the value of the contracts, and are recorded as
unrealized gains or losses. When contracts are closed, the Fund realizes a
gain or loss which is reported in the Statement of Operations.
The use of futures contracts involve, to varying degrees, elements of mar-
ket risk which may exceed the amounts recognized in the Statement of Assets
and Liabilities. Changes in the value of the futures contracts may not di-
rectly correlate with changes in the value of the underlying securities. This
risk may decrease the effectiveness of the Fund's hedging strategies and po-
tentially result in a loss. At February 29, 2000, the Fund had no open
futures contracts.
15
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Notes to Financial Statements (continued)
February 29, 2000 (Unaudited)
4. PORTFOLIO SECURITIES TRANSACTIONS (continued)
Forward Foreign Currency Exchange Contracts -- The Fund may enter into for-
ward foreign currency exchange contracts for the purchase or sale of a spe-
cific foreign currency at a fixed price on a future date as a hedge or cross-
hedge against either specific transactions or portfolio positions. The Fund
may also purchase and sell such contracts to seek to increase total return.
All commitments are "marked-to-market" daily at the applicable translation
rates and any resulting gains or losses are recorded in the Fund's financial
statements. The Fund realizes gains or losses at the time a forward contract
is offset by entry into a closing transaction or extinguished by delivery of
the currency. Risks may arise upon entering these contracts from the poten-
tial inability of counterparties to meet the terms of their contracts and
from unanticipated movements in the value of a foreign currency relative to
the U.S. dollar. At February 29, 2000, the Fund had no open forward foreign
currency exchange contracts.
Option Accounting Principles -- When the Fund writes call or put options, an
amount equal to the premium received is recorded as an asset and as an equiv-
alent liability. The amount of the liability is subsequently marked-to-market
to reflect the current market value of the option written. When a written op-
tion expires on its stipulated expiration date or the Fund enters into a
closing purchase transaction, the Fund realizes a gain or loss without regard
to any unrealized gain or loss on the underlying security, and the liability
related to such option is extinguished. When a written call option is exer-
cised, the Fund realizes a gain or loss from the sale of the underlying secu-
rity, and the proceeds of the sale are increased by the premium originally
received. When a written put option is exercised, the amount of the premium
originally received will reduce the cost of the security which the Fund pur-
chases upon exercise. There is a risk of loss from a change in value of such
options which may exceed the related premiums received.
Upon the purchase of a call option or a protective put option by the Fund,
the premium paid is recorded as an investment and subsequently marked-to-mar-
ket to reflect the current market value of the option. If an option which the
Fund has purchased expires on the stipulated expiration date, the Fund will
realize a loss in the amount of the cost of the option. If the Fund enters
into a closing sale transaction, the Fund will realize a gain or loss, de-
pending on whether the sale proceeds for the closing sale transaction are
greater or less than the cost of the option. If the Fund exercises a pur-
chased put option, the Fund will realize a gain or loss from the sale of the
underlying security, and the proceeds from such sale will be decreased by the
premium originally paid. If the Fund exercises a purchased call option, the
cost of the security which the Fund purchases upon exercise will be increased
by the premium originally paid. At February 29, 2000, there were no open
written option contracts.
5. LINE OF CREDIT FACILITY
The Fund participates in a $250,000,000 uncommitted and a $250,000,000 com-
mitted, unsecured revolving line of credit facility. Under the most restric-
tive arrangement, the Fund must own securities having a market value in
excess of 400% of the total bank borrowings. The facility is to be used
solely for temporary or emergency purposes. The interest rate on borrowings
is based on the Federal Funds rate. The committed facility also requires a
fee to be paid by the Fund based on the amount of the commitment. During the
period ended February 29, 2000, the Fund did not have any borrowings under
any of these facilities.
16
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
6. SUMMARY OF SHARE TRANSACTIONS
Share activity is as follows:
<TABLE>
<CAPTION>
For the Six-Month
Period For the Seven-Month
Ended February 29, 2000 Period For the Year
(Unaudited) Ended August 31, 1999 Ended January 31, 1999
------------------------- ----------------------- ----------------------
Shares Dollars Shares Dollars Shares Dollars
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A Shares
Shares sold 7,484,826 $ 87,071,223 7,428,461 $ 68,519,866 15,227,587 $ 114,095,624
Shares repurchased (6,883,760) (80,971,203) (7,511,626) (69,221,284) (17,965,578) (136,028,026)
----------------------------------------------------------------------------------------
601,066 6,100,020 (83,165) (701,418) (2,737,991) (21,932,402)
-------------------------------------------------------------------------------------------------------
Class B Shares
Shares sold 164,577 2,004,571 201,786 2,022,897 345,699 2,823,123
Shares repurchased (88,997) (1,055,511) (80,372) (733,280) (204,359) (1,519,808)
----------------------------------------------------------------------------------------
75,580 949,060 121,414 1,289,617 141,340 1,303,315
-------------------------------------------------------------------------------------------------------
Class C Shares
Shares sold 191,408 2,209,577 2,420,991 19,122,822 2,148,809 16,213,829
Shares repurchased (147,191) (1,728,972) (2,340,851) (18,439,726) (2,071,174) (15,859,777)
----------------------------------------------------------------------------------------
44,217 480,605 80,140 683,096 77,635 354,052
-------------------------------------------------------------------------------------------------------
Institutional Shares
Shares sold 73,743 940,106 753,741 8,076,444 636,785 5,140,870
Reinvestment of divi-
dends and distribu-
tions -- -- 3,661 40,413 -- --
Shares repurchased (98,403) (1,259,348) (188,772) (1,988,904) (209,306) (1,536,318)
----------------------------------------------------------------------------------------
(24,660) (319,242) 568,630 6,127,953 427,479 3,604,552
-------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) 696,203 $ 7,210,443 687,019 $ 7,399,248 (2,091,537) $ (16,670,483)
-------------------------------------------------------------------------------------------------------
</TABLE>
7. CHANGE IN INDEPENDENT ACCOUNTANTS
On October 26, 1999, the Board of Trustees of the Portfolios, upon the recom-
mendation of the Board's audit committee, determined not to retain Arthur An-
dersen LLP and approved a change of the Fund's independent accountants to
PricewaterhouseCoopers LLP. For the period ended August 31, 1999 and the year
ended January 31, 1999, Arthur Andersen LLP audit reports contained no ad-
verse opinion or disclaimer of opinion; nor were their reports qualified as
to uncertainty, audit scope, or accounting principles. Further, there were no
disagreements between the Fund and Arthur Andersen LLP on accounting princi-
ples or practices, financial statement disclosure or audit scope or proce-
dure, which if not resolved to the satisfaction of Arthur Andersen LLP would
have caused them to make reference to the disagreement in their reports.
17
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Income from
investment operations(a) Distributions to shareholders
------------------------- ------------------------------------
Net asset Net In excess Net increase
value, investment Net realized From net of net (decrease)
beginning income and unrealized investment investment From net in net asset
of period (loss) gain (loss) income income realized gains value
FOR THE SIX MONTHS ENDED FEBRUARY 29, (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
2000 - Class A Shares $11.07 $(0.05) $1.69 $ -- $ -- $ -- $1.64
2000 - Class B Shares 10.88 (0.08) 1.65 -- -- -- 1.57
2000 - Class C Shares 10.85 (0.08) 1.65 -- -- -- 1.57
2000 - Institutional
Shares 11.24 (0.02) 1.72 -- -- -- 1.70
FOR THE SEVEN-MONTH PERIOD ENDED AUGUST 31,
1999 - Class A Shares 7.79 (0.02) 3.30 -- -- -- 3.28
1999 - Class B Shares 7.68 (0.04) 3.24 -- -- -- 3.20
1999 - Class C Shares 7.68 (0.04) 3.21 -- -- -- 3.17
1999 - Institutional
Shares 7.91 0.01 3.36 -- -- -- 3.33
FOR THE YEARS ENDED JANUARY 31,
1999 - Class A Shares 8.38 0.07 (0.66) -- -- -- (0.59)
1999 - Class B Shares 8.31 0.01 (0.64) -- -- -- (0.63)
1999 - Class C Shares 8.29 -- (0.61) -- -- -- (0.61)
1999 - Institutional
Shares 8.44 0.03 (0.56) -- -- -- (0.53)
----------------------------------------------------------------------------------------------------------------
1998 - Class A Shares 16.31 -- (7.90) -- (0.03) -- (7.93)
1998 - Class B Shares 16.24 0.01 (7.91) -- (0.03) -- (7.93)
1998 - Class C Shares
(commenced August 15,
1997) 15.73 0.01 (7.42) -- (0.03) -- (7.44)
1998 - Institutional
Shares 16.33 0.10 (7.96) (0.03) -- -- (7.89)
----------------------------------------------------------------------------------------------------------------
1997 - Class A Shares 16.49 0.06 (0.11) (0.12) -- (0.01) (0.18)
1997 - Class B Shares
(commenced May 1, 1996) 17.31 (0.05) (0.48) (0.51) (0.03) -- (1.07)
1997 - Institutional
Shares (commenced Febru-
ary 2, 1996) 16.61 0.04 (0.11) (0.11) (0.06) (0.04) (0.28)
----------------------------------------------------------------------------------------------------------------
1996 - Class A Shares 13.31 0.17 3.44 (0.12) (0.14) (0.17) 3.18
----------------------------------------------------------------------------------------------------------------
</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.
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
GOLDMAN SACHS ASIA GROWTH FUND
<TABLE>
<CAPTION>
Ratios assuming no voluntary waiver
of fees or expense limitations
-------------------------------------
Ratio of Ratio of
Net assets Ratio of net investment Ratio of net investment
Net asset at end of net expenses income (loss) expenses income (loss) to Portfolio
value, end Total period to average to average to average average turnover
of period return(b) (in 000s) net assets net assets net assets net assets rate
<S> <C> <C> <C> <C> <C> <C> <C>
$12.71 14.81%(d) $104,323 1.85%(c) (0.95)%(c) 2.32%(c) (1.42)%(c) 100.51%(d)
12.45 14.43(d) 9,251 2.35(c) (1.46)(c) 2.82(c) (1.93)(c) 100.51(d)
12.42 14.47(d) 3,160 2.35(c) (1.46)(c) 2.82(c) (1.93)(c) 100.51(d)
12.94 15.12(d) 13,913 1.20(c) (0.31)(c) 1.67(c) (0.78)(c) 100.51(d)
11.07 42.11%(d) 84,269 1.85(c) (0.38)(c) 2.27(c) (0.80)(c) 96.58(d)
10.88 41.67(d) 7,258 2.35(c) (0.90)(c) 2.77(c) (1.32)(c) 96.58(d)
10.85 41.28(d) 2,281 2.35(c) (0.89)(c) 2.77(c) (1.31)(c) 96.58(d)
11.24 42.61(d) 12,363 1.20(c) (0.14)(c) 1.62(c) (0.28)(c) 96.58(d)
7.79 (7.04) 59,940 1.93 0.63 2.48 0.08 106.00
7.68 (7.58) 4,190 2.45 0.10 2.97 (0.42) 106.00
7.68 (7.36) 999 2.45 0.10 2.97 (0.42) 106.00
7.91 (6.28) 4,200 1.16 1.10 1.68 0.58 106.00
- ------------------------------------------------------------------------------------------------------------------------------
8.38 (48.49) 87,437 1.75 0.31 1.99 0.07 105.16
8.31 (48.70) 3,359 2.30 (0.29) 2.50 (0.49) 105.16
8.29 (47.17)(d) 436 2.35(c) (0.26)(c) 2.55(c) (0.46)(c) 105.16
8.44 (48.19) 874 1.11 0.87 1.31 0.67 105.16
- ------------------------------------------------------------------------------------------------------------------------------
16.31 (1.01) 263,014 1.67 0.20 1.87 -- 48.40
16.24 (6.02)(d) 3,354 2.21(c) (0.56)(c) 2.37(c) (0.72)(c) 48.40
16.33 (1.09)(d) 13,322 1.10(c) 0.54(c) 1.26(c) 0.38(c) 48.40
- ------------------------------------------------------------------------------------------------------------------------------
16.49 26.49 205,539 1.77 1.05 2.02 0.80 88.80
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
(This page intentionally left blank)
<PAGE>
GOLDMAN SACHS FUND PROFILE
Goldman Sachs Asia Growth Fund
An Investment Idea for the Long Term
History has shown that a long-term plan that includes stocks of
emerging market countries is more likely to provide greater returns
and reduce overall portfolio volatility over time than a portfolio
that invests only in U.S.-based stocks.
Goldman Sachs Asia Growth Fund provides investors access to the
benefits associated with emerging market investing. The Fund seeks
long-term capital appreciation, primarily through equity securities of
companies related to Asia, excluding Japan.
Target Your Needs
The Goldman Sachs Asia Growth Fund has a distinct investment objective
and a defined place on the risk/return spectrum. As your investment
objectives change, you can exchange shares within Goldman Sachs Funds
without any additional charge.* (Please note: in general, greater
returns are associated with greater risk.)
----------------------------------------------------------------------
Goldman Sachs Funds
Goldman Sachs Funds offers more than 30 investment options for global
diversification across borders, investment sytles, asset classes and
security capitalizations.
[GRAPH]
INTERNATIONAL
EQUITY
.Goldman Sachs
Asia Growth
Fund
DOMESTIC
EQUITY
FIXED
INCOME
MONEY
MARKET
-- Lower Risk/Return Higher Risk/Return --
ASSET ALLOCATION
SPECIALTY
For More Information
To learn more about the Goldman Sachs Asia Growth Fund and other
Goldman Sachs Funds, call your investment professional today.
*The exchange privilege is subject to termination and its terms are
subject to change.
<PAGE>
GOLDMAN SACHS ASSET MANAGEMENT 32 OLD SLIP, 17TH FLOOR, NEW YORK, NEW YORK 10005
TRUSTEES OFFICERS
Ashok N. Bakhru, Chairman Douglas C. Grip, President
David B. Ford Jesse H. Cole, Vice President
Douglas C. Grip James A. Fitzpatrick, Vice President
John P. McNulty Nancy L. Mucker, Vice President
Mary P. McPherson John M. Perlowski, Treasurer
Alan A. Shuch Philip V. Giuca, Jr., Assistant Treasurer
Jackson W. Smart, Jr. Michael J. Richman, Secretary
William H. Springer Howard B. Surloff, Assistant Secretary
Richard P. Strubel Valerie A. Zondorak, Assistant Secretary
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
Investment Adviser
GOLDMAN SACHS INTERNATIONAL
Peterborough Court, 133 Fleet Street
London EC4A 2BB, England
Visit our internet address: www.gs.com/funds
This material is not authorized for distribution to prospective investors unless
preceded or accompanied by a current Prospectus. Investors should read the
Prospectus carefully before investing or sending money.
Emerging markets securities are volatile. They are subject to substantial
currency fluctuations and sudden economic and political developments. At times,
the Fund may be unable to sell certain of its portfolio securities without a
substantial drop in price, if at all.
Concentration of the Fund's assets in one or a few countries (or a particular
geographic area) and currencies will subject a fund to greater risks than if a
fund's assets were not geographically concentrated.
The Fund may participate in the Initial Public Offering (IPO) market, and a
portion of the Fund's returns consequently may be attributable to its investment
in IPOs, which may have a magnified impact due to the Fund's small asset base.
As the Fund's assets grow, it is probable that the effect of the Fund's
investment in IPOs on its total returns may not be as significant. Goldman,
Sachs & Co. is the distributor of the Fund.
Copyright 2000 Goldman, Sachs & Co. All rights reserved. Date of first use:
April 30, 2000/00-528 AGSAR/12K/4-00
