Prospectus
December
29, 2023
GOLDMAN
SACHS FUNDAMENTAL EQUITY GROWTH FUNDS
THE SECURITIES AND
EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED
UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
|
AN
INVESTMENT IN A FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED BY THE
FEDERAL DEPOSIT
INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN A FUND
INVOLVES
INVESTMENT
RISKS, AND YOU MAY LOSE MONEY IN A
FUND. |
◼
Goldman Sachs Mid Cap Growth
Fund
◼
Class P
Shares: GGQPX
◼
Goldman Sachs
Small Cap Growth Fund
◼
Class P
Shares: GSADX
◼
Goldman Sachs
Small/Mid Cap Growth Fund
◼
Class P
Shares: GSWPX
◼
Goldman Sachs
Technology Opportunities Fund
◼
Class P
Shares: GSJPX
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|
|
|
|
|
Class
P |
|
Management
Fees |
|
|
Other
Expenses |
|
|
Total
Annual Fund Operating Expenses |
|
|
Fee
Waiver and Expense Limitation1 |
( |
|
Total
Annual Fund Operating Expenses After Fee Waiver and Expense
Limitation |
|
1
|
|
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
P Shares |
$ |
$ |
$ |
$ |
|
|
|
|
1
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Year |
Since
Inception |
Inception
Date | |
|
Class
P Shares |
|
|
|
|
Returns
Before Taxes |
- |
|
|
|
Returns
After Taxes on Distributions |
- |
|
|
|
Returns
After Taxes on Distributions and Sale of Fund Shares |
- |
|
|
|
Russell
Midcap®
Growth Index (reflects no deduction for fees or
expenses) |
- |
|
|
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Steven M.
Barry, Managing Director, Co-Chief Investment Officer—Fundamental Equity U.S.
Equity, has managed the Fund since 1999; and Jenny Chang, Vice President, has
managed the Fund since July 2019.
|
Buying
and Selling Fund Shares |
The Fund
does not impose minimum purchase requirements for initial or subsequent
investments in Class P Shares.
You may
purchase and redeem (sell) Class P Shares of the Fund on any business day
through the Goldman Sachs Private Wealth Management business unit, The Goldman
Sachs Trust Company, N.A., The Goldman Sachs Trust Company of Delaware, The Ayco
Company, L.P. or with certain intermediaries that are authorized to offer Class
P Shares.
3
|
Tax
Information |
For
important tax information, please see “Tax Information” on page 16 of the
Prospectus.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
For
important information about financial intermediary compensation, please see
“Payments to Broker-Dealers and Other Financial Intermediaries” on page 16 of
the Prospectus.
4
|
|
|
|
|
|
Class
P |
|
Management
Fees |
|
|
Other
Expenses |
|
|
Total
Annual Fund Operating Expenses |
|
|
Expense
Limitation1 |
( |
|
Total
Annual Fund Operating Expenses After Expense
Limitation |
|
1
|
|
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
P Shares |
$ |
$ |
$ |
$ |
|
|
|
|
5
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Year |
Since
Inception |
Inception
Date | |
|
Class
P Shares |
|
|
|
|
Returns
Before Taxes |
- |
|
|
|
Returns
After Taxes on Distributions |
- |
|
|
|
Returns
After Taxes on Distributions and Sale of Fund Shares |
- |
|
|
|
Russell
2000®
Growth Index (reflects no deduction for fees or
expenses) |
- |
|
|
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Gregory
Tuorto, Managing Director; and Jessica Katz, Vice President, have managed the
Fund since its inception in 2019.
|
Buying
and Selling Fund Shares |
The Fund
does not impose minimum purchase requirements for initial or subsequent
investments in Class P Shares.
You may
purchase and redeem (sell) Class P Shares of the Fund on any business day
through the Goldman Sachs Private Wealth Management business unit, The Goldman
Sachs Trust Company, N.A., The Goldman Sachs Trust Company of Delaware, The Ayco
Company, L.P. or with certain intermediaries that are authorized to offer Class
P Shares.
|
Tax
Information |
For
important tax information, please see “Tax Information” on page 16 of the
Prospectus.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
For
important information about financial intermediary compensation, please see
“Payments to Broker-Dealers and Other Financial Intermediaries” on page 16 of
the Prospectus.
7
|
|
|
|
|
|
Class
P |
|
Management
Fees |
|
|
Other
Expenses |
|
|
Total
Annual Fund Operating Expenses |
|
|
|
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
P Shares |
$ |
$ |
$ |
$ |
|
|
|
|
8
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Year |
Since
Inception |
Inception
Date | |
|
Class
P Shares |
|
|
|
|
Returns
Before Taxes |
- |
|
|
|
Returns
After Taxes on Distributions |
- |
|
|
|
Returns
After Taxes on Distributions and Sale of Fund Shares |
- |
|
|
|
Russell
2500®
Growth Index (reflects no deduction for fees or
expenses) |
- |
|
|
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Steven M.
Barry, Managing Director, Co-Chief Investment Officer—Fundamental Equity U.S.
Equity, has managed the Fund since 2005; Gregory Tuorto, Managing Director, has
managed the Fund since 2019; and Jessica Katz, Vice President, has managed the
Fund since 2019.
|
Buying
and Selling Fund Shares |
The Fund
does not impose minimum purchase requirements for initial or subsequent
investments in Class P Shares.
You may
purchase and redeem (sell) Class P Shares of the Fund on any business day
through the Goldman Sachs Private Wealth Management business unit, The Goldman
Sachs Trust Company, N.A., The Goldman Sachs Trust Company of Delaware, The Ayco
Company, L.P. or with certain intermediaries that are authorized to offer Class
P Shares.
10
|
Tax
Information |
For
important tax information, please see “Tax Information” on page 16 of the
Prospectus.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
For
important information about financial intermediary compensation, please see
“Payments to Broker-Dealers and Other Financial Intermediaries” on page 16 of
the Prospectus.
11
|
|
|
|
|
|
Class
P |
|
Management
Fees |
|
|
Other
Expenses |
|
|
Total
Annual Fund Operating Expenses |
|
|
Expense
Limitation and Fee Waiver1 |
( |
|
Total
Annual Fund Operating Expenses After Expense Limitation and Fee
Waiver |
|
1
|
|
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
P Shares |
$ |
$ |
$ |
$ |
|
|
|
|
12
|
|
13
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Year |
Since
Inception |
Inception
Date | |
|
Class
P Shares |
|
|
|
|
Returns
Before Taxes |
- |
|
|
|
Returns
After Taxes on Distributions |
- |
|
|
|
Returns
After Taxes on Distributions and Sale of Fund Shares |
- |
|
|
|
NASDAQ
Composite Total Return Index (reflects no deduction for fees or
expenses) |
- |
|
|
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Steven M.
Barry, Managing Director, Co-Chief Investment Officer—Fundamental Equity U.S.
Equity, has managed the Fund since 1999; Sung Cho, CFA, Managing Director, has
managed the Fund since 2018; and Charles “Brook” Dane, CFA, Vice President, has
managed the Fund since 2018.
|
Buying
and Selling Fund Shares |
The Fund
does not impose minimum purchase requirements for initial or subsequent
investments in Class P Shares.
You may
purchase and redeem (sell) Class P Shares of the Fund on any business day
through the Goldman Sachs Private Wealth Management business unit, The Goldman
Sachs Trust Company, N.A., The Goldman Sachs Trust Company of Delaware, The Ayco
Company, L.P. or with certain intermediaries that are authorized to offer Class
P Shares.
|
Tax
Information |
For
important tax information, please see “Tax Information” on page 16 of the
Prospectus.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
For
important information about financial intermediary compensation, please see
“Payments to Broker-Dealers and Other Financial Intermediaries” on page 16 of
the Prospectus.
15
Fundamental
Equity Growth Funds –
Additional Summary Information
Additional Summary Information
|
Tax
Information |
The Funds'
distributions are taxable, and will be taxed as ordinary income or capital
gains, unless you are investing through a tax-deferred arrangement, such as a
401(k) plan or an individual retirement account. Investments made through
tax-deferred arrangements may become taxable upon withdrawal from such
arrangements.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
If you
purchase the Fund through an intermediary that is authorized to offer Class P
Shares, the Fund and/or its related companies may pay the intermediary for the
sale of Fund shares and related services. These payments may create a conflict
of interest by influencing the intermediary and your salesperson to recommend
the Fund over another investment. Ask your salesperson or visit your
intermediary’s website for more information.
16
Investment
Management Approach
|
INVESTMENT
OBJECTIVE |
The Mid Cap
Growth, Small Cap Growth, Small/Mid Cap Growth, and Technology Opportunities
Funds (“the Funds”) seek long-term growth of capital. Each Fund’s investment
objective may be changed without shareholder approval upon 60 days’
notice.
|
PRINCIPAL
INVESTMENT STRATEGIES |
Mid Cap Growth
Fund
The Fund invests, under
normal circumstances, at least 80% of its Net Assets in a diversified portfolio
of equity investments in mid‑cap issuers. Mid‑cap issuers are issuers with
public stock market capitalizations (based upon shares available for trading on
an unrestricted basis) between
$1
billion
and
$50
billion.
The Fund may
also invest in securities outside of this capitalization range at the time of
investment. If the market capitalization of an issuer held by the Fund moves
outside this range, the Fund may, but is not required to, sell the securities.
Although the Fund invests primarily in publicly traded U.S. securities, it may
invest up to 25% of its Total Assets in foreign securities, including securities
of issuers in emerging countries and securities quoted in foreign currencies.
The Fund may also invest in privately held companies and companies that only
recently began to trade publicly. The Fund may also invest in stock, warrants,
and other securities of special purpose acquisition companies (“SPACs”) or
similar special purpose entities that pool funds to seek potential acquisition
opportunities. Shareholders will be provided with sixty days’ notice in the
manner prescribed by the Securities and Exchange Commission (“SEC”) before any
change in the Fund’s policy to invest at least 80% of its Net Assets in the
particular type of investment suggested by its name.
The Fund’s
benchmark is the Russell Midcap® Growth
Index. The Russell Midcap® Growth
Index is an unmanaged market capitalization weighted index of common stock
prices that measures the performance of those Russell Midcap companies with
higher price-to-book ratios and higher forecasted growth values.
Small Cap Growth
Fund
The Fund invests, under
normal circumstances, at least 80% of its Net Assets in a diversified portfolio
of equity investments in small-cap issuers. Small-cap issuers are issuers with
public stock market capitalizations (based upon shares available for trading on
an unrestricted basis) between
$100
million
and
$8
billion.
The Fund may
also invest in securities
outside of
this capitalization range at the time of investment. If the market
capitalization of a company held by the Fund moves outside this range, the Fund
may, but is not required to, sell the securities. The Fund seeks to achieve its
investment objective by investing, under normal circumstances, in companies that
are considered by the Investment Adviser to be positioned for long-term growth.
Although the Fund invests primarily in publicly traded U.S. securities, it may
invest up to 25% of its Net Assets in foreign securities, including securities
of issuers in emerging countries and securities quoted in foreign currencies.
The Fund may also invest in privately held companies and companies that only
recently began to trade publicly.
Shareholders
will be provided with sixty days’ notice in the manner prescribed by the SEC
before any change in the Fund’s policy to invest at least 80% of its Net Assets
in the particular type of investment suggested by its name.
The Fund
may invest up to 20% of its Net Assets in fixed income securities, such as
government, corporate and bank debt obligations. The Fund may also invest in
stock, warrants, and other securities of SPACs or similar special purpose
entities that pool funds to seek potential acquisition
opportunities.
The Fund’s
benchmark index is the Russell 2000® Growth
Index (Total Return, USD). The Index is an unmanaged index of common stock
prices that measures the performance of those Russell 2000® Index
companies with higher price-to-book ratios and higher forecasted growth
values.
Small/Mid Cap Growth
Fund
The Fund invests, under
normal circumstances, at least 80% of its Net Assets in a diversified portfolio
of equity investments in small and mid-cap issuers. Small or mid-cap issuers are
issuers with public stock market capitalizations (based upon shares available
for trading on an unrestricted basis) between
$100
million and
$50
billion.
The
Fund
may
also invest in
securities outside of this capitalization range at the time of investment. If
the market capitalization of a company held by the Fund moves outside this
range, the Fund may, but is not required to, sell the securities. The Fund seeks
to achieve its investment objective by investing, under normal circumstances, in
companies that are considered by the Investment Adviser to be positioned for
long-term growth. Although the Fund invests primarily in publicly traded U.S.
securities, it may invest up to 25% of its Net Assets in foreign securities,
including securities
17
of issuers
in emerging countries and securities quoted in foreign currencies. The Fund may
also invest in privately held companies and companies that only recently began
to trade publicly. Shareholders will be provided with sixty days’ notice in the
manner prescribed by the SEC before any change in the Fund’s policy to invest at
least 80% of its Net Assets in the particular type of investment suggested by
its name.
The Fund
may invest up to 20% of its Net Assets in fixed income securities, such as
government, corporate and bank debt obligations. The Fund may also invest in
stock, warrants, and other securities of SPACs or similar special purpose
entities that pool funds to seek potential acquisition
opportunities.
The Fund’s
benchmark is the Russell 2500® Growth
Index. The Russell 2500® Growth
Index is an unmanaged market capitalization weighted index of common stock
prices that measures the performance of those Russell 2500 companies with higher
price-to-book ratios and higher forecasted growth values.
Technology
Opportunities Fund
The Fund
invests, under normal circumstances, at least 80% of its Net Assets in equity
investments in technology companies, as described below. The Fund seeks to
achieve its investment objective by investing, under normal circumstances, in
companies that are considered by the Investment Adviser to benefit from the
proliferation of technology. Although the Fund invests primarily in publicly
traded U.S. securities, it may invest up to 25% of its Total Assets in foreign
securities, including securities of issuers in emerging countries and securities
quoted in foreign currencies. The Fund may also invest in privately held
companies and companies that only recently began to trade publicly. The Fund may
also invest in stock, warrants, and other securities of SPACs or similar special
purpose entities that pool funds to seek potential acquisition opportunities.
The Fund intends to invest a substantial portion of its assets in technology
companies. In general, the Investment Adviser defines a technology company as a
high-quality technology, services, media or telecommunications company that
adopts or uses technology to improve its cost structure, revenue opportunities
or competitive advantage. The Investment Adviser seeks to identify technology
companies that exhibit many of the following characteristics:
◼
Strong
brand name
◼
Dominant
market share
◼
Recurring
revenue streams
◼
Free cash
flow generation
◼
Long
product life cycle
◼
Enduring
competitive advantage
◼
Excellent
management
The
Investment Adviser seeks to identify technology companies that are promising
growth businesses. These companies may grow revenue by increasing sales volumes,
prices, customers and market share. The Internet is an example of a technology
that the Investment Adviser believes will drive growth for many technology
businesses. The Internet has had, and is expected to continue to have, a
significant impact on the global economy, as it changes the way many companies
operate. Benefits of the Internet for businesses may include global scalability,
acquisition of new clients, new revenue sources and increased efficiencies.
Technology companies adopting innovative Internet technologies to improve their
business models include providers of infrastructure, software, hardware and
services.
The Fund
will invest at least 25% of its Total Assets in companies in one or more of the
media, telecommunications, technology and/or Internet industries. Because of its
focus on technology, telecommunications, Internet, services and media companies,
the Fund’s investment performance will be closely tied to many factors which
affect these companies. These factors include intense competition, consumer
preferences, problems with product compatibility and government regulation. The
Fund’s investments may experience significant price movements caused by
disproportionate investor optimism or pessimism with little or no basis in
fundamental economic conditions. The Fund may also invest in a relatively few
number of issuers. As a result, the Fund’s NAV is more likely to have greater
fluctuations than that of a fund which is more diversified or invests in other
industries.
THIS FUND
INVESTS IN TECHNOLOGY COMPANIES (AS DESCRIBED ABOVE), AND ITS NAV MAY FLUCTUATE
SUBSTANTIALLY OVER TIME. BECAUSE THE FUND CONCENTRATES ITS INVESTMENTS IN
TECHNOLOGY COMPANIES, THE FUND’S PERFORMANCE MAY BE SUBSTANTIALLY DIFFERENT FROM
THE RETURNS OF THE BROADER STOCK MARKET. PAST PERFORMANCE IS NOT AN INDICATION
OF FUTURE RETURNS AND, DEPENDING ON THE TIMING OF YOUR INVESTMENT, YOU MAY LOSE
MONEY EVEN IF THE FUND’S PAST RETURNS HAVE OUTPERFORMED THE FUND’S BENCHMARK
DURING SPECIFIED PERIODS OF TIME.
The Fund’s
benchmark index is the NASDAQ Composite Total Return Index. The NASDAQ Composite
Total Return Index is a diverse, market capitalization-weighted index that is
made up of over 3,000 stocks listed on the NASDAQ exchange.
18
Investment
Management Approach
All Funds
The Funds
may, from time to time, take temporary defensive positions that are inconsistent
with the Funds’ principal investment strategies in attempting to respond to
adverse market, political or other conditions. For temporary defensive purposes,
each Fund may invest up to 100% of its total assets in securities issued or
guaranteed by the U.S. government, its agencies, instrumentalities or sponsored
enterprises (“U.S. Government Securities”), commercial paper rated at least A-2
by S&P Global Ratings (“Standard & Poor’s”), P-2 by Moody’s Investors
Service, Inc. (“Moody’s”) or having a comparable credit rating by another
nationally recognized statistical rating organization (“NRSRO”) (or if unrated,
determined by the Investment Adviser to be of comparable credit quality),
certificates of deposit, bankers’ acceptances, repurchase agreements,
non-convertible preferred stocks and non-convertible corporate bonds with a
remaining maturity of less than one year, exchange-traded funds (“ETFs”) and
other investment companies and cash items. When
a Fund’s assets are invested in such instruments, the Fund may not be achieving
its investment objective.
References
in the Prospectus to a Fund’s benchmark are for informational purposes only, and
unless otherwise noted, are not an indication of how a particular Fund is
managed.
GSAM Fundamental U.S.
Equity Team’s Investment Approach:
GSAM
believes that fundamental, bottom-up research combined with a disciplined
investment process is essential for seeking to generate attractive performance
over the long-term.
The team’s
investment process for the Funds involves: (1) using multiple industry-specific
valuation metrics to identify economic value and company potential in stocks,
screened by valuation, profitability and business characteristics; (2)
conducting in-depth company research and assessing overall business quality; (3)
considering a wide range of factors as part of the fundamental investment
process, which may include integrating environmental, social and governance
(“ESG”) factors alongside traditional fundamental factors; and (4) buying those
securities that a sector portfolio manager recommends, taking into account
feedback from the rest of the portfolio management team.
The GSAM
Fundamental Equity team may integrate ESG factors alongside traditional
fundamental factors as part of its fundamental research process to seek to
assess overall business quality and valuation, as well as potential risks.
Traditional fundamental factors that the GSAM Fundamental Equity team may
consider include, but are not limited to, cash flows, balance sheet leverage,
return on invested capital, industry dynamics, earnings quality and
profitability. ESG factors that the GSAM Fundamental Equity team may consider
include, but are not limited to, carbon intensity and emissions profiles,
workplace health and safety, community impact, governance practices and
stakeholder relations, employee relations, board structure, transparency and
management incentives. The identification of a risk related to an ESG factor
will not necessarily exclude a particular security or sector that, in the GSAM
Fundamental Equity team’s view, is otherwise suitable and attractively priced
for investment, and the GSAM Fundamental Equity team may invest in a security or
sector without integrating ESG factors or considerations into its fundamental
investment process. The relevance of specific traditional fundamental factors
and ESG factors to the fundamental investment process varies across asset
classes, sectors and strategies. GSAM Fundamental Equity team may utilize data
sources provided by third-party vendors and/or engage directly with issuers when
assessing the above factors.
GSAM
Fundamental Equity team employs a fundamental investment process that considers
a wide range of factors, and no one factor or consideration is
determinative.
The
Investment Adviser may decide to sell a position for various reasons, including
valuation and price considerations, readjustment of the Investment Adviser’s
outlook based on subsequent events, the Investment Adviser’s ongoing assessment
of the quality and effectiveness of management, if new investment ideas offer
the potential for better risk/reward profiles than existing holdings, or for
risk management purposes. In addition, the Investment Adviser may sell a
position in order to meet shareholder redemptions.
GSAM Growth Team’s
Investment Philosophy:
1.
Invest as if buying the company/business, not simply trading its
stock:
◼
Understand
the business, management, products and competition.
◼
Perform
intensive, hands-on fundamental research.
◼
Seek
businesses with strategic competitive advantages.
◼
Over the
long-term, expect each company’s stock price ultimately to track the growth in
the value of the business.
19
2.
Buy high-quality growth businesses that possess strong business franchises,
favorable long-term prospects and excellent management.
3.
Purchase long-term growth companies at attractive valuations, giving the
investor the potential to capture returns from above-average growth
rates.
As
stakeholders, the Funds have a vested interest in helping the companies in which
they invest unlock value by improving corporate practices and being thoughtful
stewards of capital. As part of its focus on long-term, active ownership, the
Investment Adviser may, in certain circumstances, use proxy voting and
engagement as some of the tools available to encourage positive corporate
decision making and productive change, where possible.
In
addition, the Investment Adviser may also sell a position in order to meet
shareholder redemptions.
GSAM Small Cap Growth
Team’s Investment Approach:
Buy Strategy
Buy Strategy
The Team
approaches investing with the belief that wealth is created through the
long-term ownership of a growing business. When evaluating a potential
investment, the team looks for specific characteristics that they believe make a
company a high-quality business with sustainable growth. These criteria
include:
◼
Strong
business franchises characterized by companies with: established brand name,
dominant market share, pricing power, recurring revenue stream, free cash flow,
and high return on invested capital.
◼
Companies
with favorable long-term prospects indicated by: predictable and sustainable
growth, long product life cycle, enduring competitive advantage, and favorable
demographic trends.
◼
Excellent
management capabilities characterized by rational capital allocation, consistent
operating history, incentives aligned with shareholders.
Valuation
Valuation
is another important criteria. The team’s decision of whether or not to own the
stock is just as important as the decision of whether or not to own the
business. The team seeks to purchase the stocks of companies at a discount to
their economic value. Valuation methods include discounted cash flow analysis,
assessment of private market value, and cash flow & earnings
multiples.
Sell
Discipline
The
Investment Adviser may decide to sell a position for various reasons. Some of
these reasons may include:
1.
Fundamental Outlook Deteriorates:
If a
company’s long-term fundamental outlook deteriorates.
2.
Valuation: When the
price of a stock exceeds what the team deems to be the worth of the
business.
3.
Risk Management: If a
holding grows beyond a weight consistent with the team’s level of conviction in
the risk/reward opportunity of the investment.
4.
Misallocation of Capital: If a
company pursues a strategy that in the team’s view does not maximize shareholder
value, such as a questionable acquisition or a lack of discipline with regard to
capital allocation.
GSAM Fundamental
Equity Technology Team’s Investment Philosophy:
1.
By quality businesses, we mean those that have:
◼
Sustainable
operating or competitive advantage.
◼
Excellent
stewardship of capital.
◼
Ability to
earn above their cost of capital.
◼
Strong or
improving balance sheets and cash flow.
2.
Businesses may sell at compelling valuations when:
◼
Market
uncertainty exists.
◼
Their
economic value is not recognized by the market.
20
Investment
Management Approach
3.
Through intensive, first-hand fundamental research our portfolio managers seek
to purchase quality businesses selling at compelling valuations.
4.
The Investment Adviser may consider ESG factors as part of the fundamental
research and stock selection process.
As
stakeholders, the Funds have a vested interest in helping the companies in which
they invest unlock value by improving corporate practices and being thoughtful
stewards of capital. As part of its focus on long-term, active ownership, the
Investment Adviser may, in certain circumstances, use proxy voting and
engagement as some of the tools available to encourage positive corporate
decision making and productive change, where possible.
In
addition, the Investment Adviser may also sell a position in order to meet
shareholder redemptions.
|
ADDITIONAL
PERFORMANCE INFORMATION |
The below
is additional information that relates to the “Performance” section of each
Fund’s summary section.
Note that
the “Best Quarter” and “Worst Quarter” figures shown in the “Performance”
section of each Fund’s Summary section are applicable only to the time period
covered by the bar chart.
These
definitions apply to the after-tax returns shown in the “Performance” section of
each Fund’s Summary section.
Average
Annual Total Returns Before Taxes. These
returns do not reflect taxes on distributions on a Fund’s Shares nor do they
show how performance can be impacted by taxes when shares are redeemed (sold) by
you.
Average
Annual Total Returns After Taxes on Distributions. These
returns assume that taxes are paid on distributions on a Fund’s Class P Shares
(i.e., dividends and capital gains) but do not reflect taxes that may be
incurred upon redemption (sale) of the Class P Shares at the end of the
performance period.
Average
Annual Total Returns After Taxes on Distributions and Sale of
Shares. These
returns reflect taxes paid on distributions on a Fund’s Class P Shares and taxes
applicable when the shares are redeemed (sold).
Note
on Tax Rates. The
after-tax performance figures are calculated using the historically highest
individual federal marginal income tax rates at the time of the distributions
and do not reflect state and local taxes. In calculating the federal income
taxes due on redemptions, capital gains taxes resulting from a redemption are
subtracted from the redemption proceeds and the tax benefits from capital losses
resulting from the redemption are added to the redemption proceeds. Under
certain circumstances, the addition of the tax benefits from capital losses
resulting from redemptions may cause the Returns After Taxes on Distributions
and Sale of Fund Shares to be greater than the Returns After Taxes on
Distributions or even the Returns Before Taxes.
|
OTHER
INVESTMENT PRACTICES AND
SECURITIES |
Although
each Fund’s principal investment strategies are described in the Fund’s
Summary—Principal Strategy section of the Prospectus, the following tables
identify some of the investment techniques that may (but are not required to) be
used by the Funds in seeking to achieve their investment objectives. The tables
also highlight the differences and similarities among the Funds in their use of
these techniques and other investment practices and investment securities.
Numbers in these tables show allowable usage only; for actual usage, consult the
Funds’ annual/semi-annual reports. For more information about these and other
investment practices and securities, see Appendix A.
Each Fund
publishes on its website (http://www.gsamfunds.com) complete portfolio holdings
for the Fund as of the end of each calendar quarter subject to a fifteen
calendar day lag between the date of the information and the date on which the
information is disclosed. In addition, the Funds publish on their website
month-end top ten holdings subject to a fifteen calendar day lag between the
date of the information and the date on which the information is disclosed. In
addition, a description of the Funds’ policies and procedures with respect to
the disclosure of the Funds’ portfolio holdings is available in the Funds’
SAI.
21
|
10
Percent of total assets (including securities lending collateral) (italic
type)
10 Percent
of net assets (excluding borrowings for investment purposes) (roman
type)
• No
specific percentage limitation on usage; limited only by the objectives
and strategies of the Fund |
Mid
Cap Growth
Fund |
Small
Cap
Growth
Fund |
Small/Mid
Cap
Growth
Fund |
Technology
Opportunities
Fund |
|
Investment
Practices |
|
|
|
|
|
Borrowings |
33 1∕3 |
33 1∕3 |
33 1∕3 |
33 1∕3 |
|
Cross
Hedging of Currencies |
• |
• |
• |
• |
|
Custodial
Receipts and Trust Certificates |
• |
• |
• |
• |
|
Equity
Swaps |
• |
• |
• |
15 |
|
Foreign
Currency Transactions (including forward contracts)* |
• |
• |
• |
• |
|
Futures
Contracts and Options and Swaps on Futures Contracts |
• |
• |
• |
• |
|
Illiquid
Investments** |
15 |
15 |
15 |
15 |
|
Investment
Company Securities (including ETFs)1
|
10 |
10 |
10 |
10 |
|
Options
on Foreign Currencies2
|
• |
• |
• |
• |
|
Options3
|
• |
• |
• |
• |
|
Preferred
Stock, Warrants and Stock Purchase Rights |
• |
• |
• |
• |
|
Repurchase
Agreements |
• |
• |
• |
• |
|
Securities
Lending |
33 1∕3 |
33 1∕3 |
33 1∕3 |
33 1∕3 |
|
Short
Sales Against the Box |
25 |
25 |
25 |
• |
|
Unseasoned
Companies |
• |
• |
• |
• |
|
When-Issued
Securities and Forward Commitments |
• |
• |
• |
• |
*
Limited
by the amount the Fund invests in foreign securities.
**
Illiquid
investments are any investments that a Fund reasonably expects cannot be sold or
disposed of in current market conditions in seven calendar days or less without
the sale or disposition significantly changing the market value of the
investment.
1
This
percentage limitation does not apply to a Fund’s investments in investment
companies (including ETFs) where a higher percentage limitation is permitted
under the Investment Company Act or rules, regulations or exemptive relief
thereunder.
2
The
Funds may purchase and sell call and put options on foreign
currencies.
3
The
Funds may sell call and put options and purchase call and put options on
securities and other instruments in which the Funds may invest or any index
consisting of securities or other instruments in which they may
invest.
22
Investment
Management Approach
|
10 Percent
of total assets (italic type)
10 Percent
of net assets (including borrowings for investment purposes) (roman
type)
• No
specific percentage limitation on usage; limited only by the objectives
and strategies of the Fund
— Not
permitted |
Mid
Cap Growth
Fund |
Small
Cap
Growth
Fund |
Small/Mid
Cap
Growth
Fund |
Technology
Opportunities
Fund |
|
Investment
Securities |
|
|
|
|
|
American,
European and Global Depositary Receipts |
• |
• |
• |
• |
|
Asset-Backed
and Mortgage-Backed Securities4
|
• |
• |
• |
• |
|
Bank
Obligations4
|
• |
• |
• |
• |
|
Convertible
Securities5
|
• |
— |
— |
• |
|
Corporate
Debt Obligations4
|
• |
• |
• |
• |
|
Equity
Investments |
80+ |
80+ |
80+ |
80+ |
|
Emerging
Country Securities6
|
10 |
25 |
25 |
25 |
|
Fixed
Income Securities7
|
10 |
20 |
20 |
20 |
|
Foreign
Securities6
|
25 |
25 |
25 |
25 |
|
Initial
Public Offerings (“IPOs”) |
• |
• |
• |
• |
|
Master
Limited Partnerships |
• |
• |
• |
• |
|
Non-Investment
Grade Fixed Income Securities4,8
|
10 |
20 |
20 |
20 |
|
Pre-IPO
Investments (including late-stage private equity
securities) |
• |
• |
• |
• |
|
Private
Investments in Public Equity (“PIPEs”) |
• |
• |
• |
• |
|
Real
Estate Investment Trusts (“REITs”) |
• |
• |
• |
• |
|
Special
Purpose Acquisition Companies (“SPACs”) |
• |
• |
• |
• |
|
Structured
Securities (which may include equity linked notes)9
|
• |
• |
• |
• |
|
Temporary
Investments |
• |
• |
• |
• |
|
U.S.
Government Securities4
|
• |
• |
• |
• |
4
Limited
by the amount the Fund invests in fixed income securities.
5
All
Funds use the same rating criteria for convertible and non-convertible debt
securities.
6
The
Mid Cap Growth and Technology Opportunities Funds may each invest in the
aggregate up to 25% of their total assets, and the Small/Mid Cap Growth and
Small Cap Growth Funds may each invest in the aggregate up to 25% of their net
assets, in foreign securities, including emerging country
securities.
7
Except
as noted under “Non-Investment Grade Fixed Income Securities,” fixed income
securities must be investment grade (i.e., BBB– or higher by Standard &
Poor’s, Baa3 or higher by Moody’s or have a comparable credit rating by another
NRSRO or, if unrated, determined by the Investment Adviser to be of comparable
credit quality).
8
May
be BB+ or lower by Standard & Poor’s, Ba1 or lower by Moody’s or have a
comparable credit rating by another NRSRO at the time of investment.
9
Structured
securities are not subject to the same minimum credit quality requirements as a
Fund’s investments in fixed income securities.
23
Risks of
the Funds
Loss of
money is a risk of investing in the Fund (which, for the remainder of this
Prospectus, refers to one or more of the Funds offered in this Prospectus). An
investment in the Fund is not a bank deposit and is not insured or guaranteed by
the FDIC or any other governmental agency. The principal risks of the Fund are
discussed in the Summary section of the Prospectus. The following section
provides additional information on the risks that apply to the Fund, which may
result in a loss of your investment. The risks applicable to the Fund are
presented below in alphabetical order, and not in the order of importance or
potential exposure. The Fund should not be relied upon as a complete investment
program. There can be no assurance that the Fund will achieve its investment
objective.
|
✓ Principal
Risk
• Additional
Risk |
Mid
Cap Growth
Fund |
Small
Cap
Growth
Fund |
Small/Mid
Cap
Growth
Fund |
Technology
Opportunities
Fund |
|
Credit/Default |
• |
• |
• |
• |
|
Cybersecurity |
• |
• |
• |
• |
|
Derivatives |
• |
• |
• |
• |
|
Emerging
Countries |
✓ |
• |
✓ |
✓ |
|
ESG
Integration |
• |
• |
• |
• |
|
Foreign |
✓ |
• |
✓ |
✓ |
|
Geographic |
• |
• |
• |
• |
|
Industry
Concentration |
|
|
|
✓ |
|
Initial
Public Offering (“IPO”) |
• |
• |
• |
• |
|
Interest
Rate |
• |
• |
• |
• |
|
Investment
Style |
✓ |
✓ |
✓ |
✓ |
|
Large
Shareholder Transactions |
✓ |
✓ |
✓ |
✓ |
|
Liquidity |
• |
• |
• |
• |
|
Management |
• |
• |
• |
• |
|
Market |
✓ |
✓ |
✓ |
✓ |
|
Master
Limited Partnerships |
• |
• |
• |
• |
|
Mid-Cap
and Small-Cap |
✓ |
✓ |
✓ |
✓ |
|
NAV |
• |
• |
• |
• |
|
Non-Investment
Grade Fixed Income Investments |
• |
• |
• |
• |
|
Pre-IPO
Investments |
• |
• |
• |
• |
|
Private
Investments in Public Equity (“PIPEs”) |
• |
• |
• |
• |
|
Special
Purpose Acquisition Companies (“SPACs”) |
• |
• |
• |
• |
|
Stock |
✓ |
✓ |
✓ |
✓ |
|
Technology
Sector |
|
|
|
✓ |
|
U.S.
Government Securities |
• |
• |
• |
• |
◼
Credit/Default
Risk—An issuer
or guarantor of fixed income securities or instruments held by the Fund (which
may have low credit ratings) may default on its obligation to pay interest and
repay principal or default on any other obligation. The credit quality of the
Fund’s portfolio securities or instruments may meet the Fund’s credit quality
requirements at the time of purchase but then deteriorate thereafter, and such a
deterioration can occur rapidly. In certain instances, the downgrading or
default of a single holding or guarantor of the Fund’s holdings may impair the
Fund’s liquidity and have the potential to cause significant NAV deterioration.
These risks are heightened in market environments where interest rates are
rising as well as in connection with the Fund’s investments in
non-investment grade fixed-income securities.
◼
Cybersecurity
Risk—The Fund
may be susceptible to operational and information security risks resulting from
cyber-attacks. Cyber-attacks include, among others, stealing or corrupting
confidential information and other data that is maintained online or digitally
for financial gain, denial-of-service attacks on websites causing operational
disruption, and the unauthorized release of confidential information and other
data. Cyber-attacks have the ability to cause significant disruptions and impact
business operations; to result in financial losses; to prevent shareholders from
transacting business; to interfere with the Fund’s calculation of NAV; and to
lead to violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs and/or
additional compliance costs. Cyber-attacks affecting the Fund or its Investment
Adviser, custodian, Transfer Agent, or other third-party service providers may
adversely impact the Fund and its shareholders.
◼
Derivatives
Risk—The Fund’s
use of options, futures, forwards, swaps, options on swaps, structured
securities and other derivatives and similar instruments (collectively referred
to in this paragraph as “derivatives”) may result in losses, including due to
adverse market movements. Derivatives, which may pose risks in addition to and
greater than those associated with investing
24
Risks
of the Funds
directly in
securities, currencies or other assets and instruments, may increase market
exposure and be illiquid or less liquid, volatile, difficult to price and
leveraged so that small changes in the value of the underlying assets or
instruments may produce disproportionate losses to the Fund. Certain derivatives
are also subject to counterparty risk, which is the risk that the other party in
the transaction will not fulfill, or lacks the capacity or authority to fulfill,
its contractual obligations, liquidity risk, which includes the risk that the
Fund will not be able to close its derivatives position when it is advantageous
to do so, and risks arising from margin requirements, which include the risk
that the Fund will be required to pay additional margin or set aside additional
collateral to maintain open derivative positions. Derivatives may be used for
both hedging and non-hedging purposes.
The use of
derivatives is a highly specialized activity that involves investment techniques
and risks different from those associated with investments in more traditional
securities and instruments, and there is no guarantee that the use of
derivatives will achieve their intended result. If the Investment Adviser is
incorrect in its expectation of the timing or level of fluctuation in securities
prices, interest rates, currency prices or other variables, the use of
derivatives could result in losses, which in some cases may be significant. A
lack of correlation between changes in the value of derivatives and the value of
the portfolio assets (if any) being hedged could also result in losses. In
addition, there is a risk that the performance of the derivatives or other
instruments used by the Investment Adviser to replicate the performance of a
particular asset class may not accurately track the performance of that asset
class.
The use of
derivatives is also subject to operational and legal risks. Operational risks
generally refer to risks related to potential operational issues, including
documentation issues, settlement issues, system failures, inadequate controls,
and human error. Legal risks generally refer to risks of loss resulting from
insufficient documentation or legality or enforceability of a
contract.
◼
Emerging
Countries Risk—Investments
in securities of issuers located in, or otherwise economically tied to, emerging
countries are subject to the risks associated with investments in foreign
securities. The securities markets of most emerging countries are less
liquid, developed and efficient, are subject to greater price volatility, and
have smaller market capitalizations. In addition, emerging markets and frontier
countries may have more or less government regulation and generally do not
impose as extensive and frequent accounting, auditing, financial and other
reporting requirements as the securities markets of more developed countries. As
a result, there could be less information available about issuers in emerging
and frontier market countries, which could negatively affect the Investment
Adviser’s ability to evaluate local companies or their potential impact on the
Fund’s performance. Further, investments in securities of issuers located
in certain emerging countries involve the risk of loss resulting from
problems in share registration, settlement or custody, substantial economic,
political and social disruptions and the imposition of sanctions or exchange
controls (including repatriation restrictions). The legal remedies for investors
in emerging and frontier markets may be more limited than the remedies available
in the U.S., and the ability of U.S. authorities (e.g., SEC and
the U.S. Department of Justice) to bring actions against bad actors may be
limited. These risks are not normally associated with investments in more
developed countries. For more information about these risks, see Appendix
A.
◼
ESG
Integration Risk—The
Investment Adviser employs a fundamental investment process that may integrate
ESG factors with traditional fundamental factors. The relevance and
weightings of specific ESG factors to or within the fundamental investment
process varies across asset classes, sectors and strategies and no one factor or
consideration is determinative. When integrating ESG factors into the
investment process, the Investment Adviser may rely on third-party data that it
believes to be reliable, but it does not guarantee the accuracy of such
third-party data. ESG information from third-party data providers may be
incomplete, inaccurate or unavailable, which may adversely impact the investment
process. Moreover, ESG information, whether from an external and/or
internal source, is, by nature and in many instances, based on a qualitative and
subjective assessment. An element of subjectivity and discretion is
therefore inherent to the interpretation and use of ESG data. The process
for conducting ESG assessments and implementation of ESG views in client/fund
portfolios, including the format and content of such analysis and the tools
and/or data used to perform such analysis, may also vary among the Investment
Adviser’s portfolio management teams. While the Investment Adviser believes that
the integration of material ESG factors into the Fund’s investment process has
the potential to identify financial risks and contribute to the Fund’s long-term
performance, ESG factors may not be considered for each and every investment
decision, and there is no guarantee that the integration of ESG factors will
result in better performance. Investors can differ in their views of what
constitutes positive or negative ESG characteristics. Moreover, the current
lack of common standards may result in different approaches to integrating ESG
factors. As a result, the Fund may invest in companies that do not reflect
the beliefs and values of any particular investor. The Investment Adviser’s
approach to ESG integration may evolve and develop over time, both due to a
refinement of investment decision-making processes to address ESG factors and
risks, and because of legal and regulatory developments.
◼
Foreign
Risk—When the
Fund invests in foreign securities, it may be subject to risk of loss not
typically associated with U.S. issuers. Loss may result because of more or less
foreign government regulation; less public information; less stringent investor
protections; less stringent accounting, corporate governance, financial
reporting and disclosure standards; less liquid, developed or efficient trading
markets; greater volatility; and less economic, political and social stability
in the countries in which the Fund invests. Loss may also result from, among
other things, deteriorating economic and business conditions in other countries,
including the United States, regional and global conflicts, the imposition of
sanctions, exchange controls (including repatriation
25
restrictions),
foreign taxes, confiscation of assets and property, trade restrictions
(including tariffs), expropriations and other government restrictions by the
United States and other governments, higher transaction costs, difficulty
enforcing contractual obligations or from problems in share registration,
settlement or custody. The type and severity of sanctions and other similar
measures, including counter sanctions and other retaliatory actions, that may be
imposed could vary broadly in scope, and their impact is impossible to predict.
These types of measures may include, but are not limited to, banning a
sanctioned country from global payment systems that facilitate cross-border
payments, restricting the settlement of securities transactions by certain
investors, and freezing the assets of particular countries, entities, or
persons. The imposition of sanctions and other similar measures could, among
other things, cause a decline in the value and/or liquidity of securities issued
by the sanctioned country or companies located in or economically tied to the
sanctioned country, downgrades in the credit ratings of the sanctioned country
or companies located in or economically tied to the sanctioned country,
devaluation of the sanctioned country’s currency, and increased market
volatility and disruption in the sanctioned country and throughout the world.
Sanctions and other similar measures could limit or prevent the Fund from buying
and selling securities (in the sanctioned country and other markets),
significantly delay or prevent the settlement of securities transactions, and
significantly impact the Fund’s liquidity and performance. The Fund or the
Investment Adviser may determine not to invest in, or may limit its overall
investment in, a particular issuer, country or geographic region due to, among
other things, heightened risks regarding sanctions, repatriation restrictions,
confiscation of assets and property, expropriation or nationalization.
Geopolitical developments in certain countries in which the Fund may invest have
caused, or may in the future cause, significant volatility in financial markets.
For example, the United Kingdom (“UK”) withdrew from the European Union (“EU”)
on January 31, 2020 (commonly known as “Brexit”), which has resulted in ongoing
market volatility and caused additional market disruption on a global basis. The
UK and the EU signed the EU-UK Trade and Cooperation Agreement (“TCA”), which is
an agreement on the terms governing certain aspects of the EU’s and UK’s
relationship post Brexit. However, under the TCA, many aspects of the EU-UK
relationship remain subject to further negotiation. Although the full effects of
Brexit are unknown at this time, Brexit may continue to result in fluctuations
of exchange rates, increased illiquidity, inflation, and changes in legal and
regulatory regimes to which certain of the Fund’s assets are subject. These and
other geopolitical developments, including ongoing regional armed conflict in
Europe, could negatively impact the value of the Fund’s investments.
The Fund's
investments in foreign securities may also be subject to foreign currency risk,
as described above, the risk of negative foreign currency rate
fluctuations, which may cause the value of securities denominated in such
foreign currency (or other instruments through which the Fund may have exposure
to foreign currencies) to decline in value. Foreign risks will normally be
greatest when the Fund invests in securities of issuers located in emerging
countries. For more information about these risks, see Appendix A.
◼
Geographic
Risk—If
the Fund focuses its investments in securities of issuers located in a
particular country or geographic region, the Fund may be subjected,
to a greater extent than if its investments were less focused, to the risks of
volatile economic cycles and/or conditions and developments that may be
particular to that country or region, such as: adverse securities markets;
adverse exchange rates; adverse social, political, regulatory, economic,
business, environmental or other developments; or natural
disasters.
◼
Industry
Concentration Risk—The
Technology Opportunities Fund concentrates its investments in specific industry
sectors that have historically experienced substantial price volatility. The
Technology Opportunities Fund is therefore subject to greater risk of loss as a
result of adverse economic, business, political, environmental or other
developments than if its investments were diversified across different industry
sectors. Securities of issuers held by the Technology Opportunities Fund may
lack sufficient market liquidity to enable the Fund to sell the securities at an
advantageous time or without a substantial drop in price.
◼
IPO
Risk—The market
value of shares issued in an IPO may fluctuate considerably due to factors such
as the absence of a prior public market, unseasoned trading, the small number of
shares available for trading and limited information about a company’s business
model, quality of management, earnings growth potential, and other criteria used
to evaluate its investment prospects. The purchase of IPO shares may involve
high transaction costs. Investments in IPO shares, which are subject to market
risk and liquidity risk, involve greater risks than investments in shares of
companies that have traded publicly on an exchange for extended periods of
time.
◼
Interest
Rate Risk—When
interest rates increase, fixed income securities or instruments held by the Fund
(which may include inflation protected securities) will generally decline in
value. Long-term fixed income securities or instruments will normally have more
price volatility because of this risk than short-term fixed income securities or
instruments. A wide variety of market factors can cause interest rates to rise,
including central bank monetary policy, rising inflation and changes in general
economic conditions. Changing interest rates may have unpredictable effects on
the markets,
may result in
heightened market volatility and may detract from Fund performance to the extent
the Fund is exposed to such interest rates and/or volatility. In addition,
changes in monetary policy may exacerbate the risks associated with changing
interest rates. Funds with longer average portfolio durations will generally be
more sensitive to changes in interest rates than funds with a shorter average
portfolio duration. Fluctuations in interest rates may also affect the liquidity
of fixed income securities and instruments held by the Fund.
It is difficult to predict
the magnitude, timing or direction of interest rate changes and the impact these
changes will have on the markets in which the
Fund
invests.
26
Risks
of the Funds
◼
Investment
Style Risk—Different
investment styles (e.g., “growth,”
“value” or “quantitative”) tend to shift in and out of favor depending upon
market and economic conditions and investor sentiment. The Fund may outperform
or underperform other funds that invest in similar asset classes but employ
different investment styles. Examples of different investment styles include
growth and value investing. Growth stocks may be more volatile than other stocks
because they are more sensitive to investor perceptions of the issuing company’s
growth of earnings potential. Growth companies are often expected by investors
to increase their earnings at a certain rate. When these expectations are not
met, investors can punish the stocks inordinately even if earnings showed an
absolute increase. Also, because growth companies usually invest a high portion
of earnings in their business, growth stocks may lack the dividends of some
value stocks that can cushion stock prices in a falling market. Growth oriented
funds will typically underperform when value investing is in favor. Value stocks
are those that are undervalued in comparison to their peers due to adverse
business developments or other factors.
◼
Large
Shareholder Transactions Risk—The Fund
may experience adverse effects when certain large shareholders, such as other
funds, institutional investors (including those trading by use of
non-discretionary mathematical formulas), financial intermediaries (who may make
investment decisions on behalf of underlying clients and/or include the Fund in
their investment model), individuals, accounts and Goldman Sachs affiliates,
purchase or redeem large amounts of shares of the Fund. Such large shareholder
redemptions, which may occur rapidly or unexpectedly, may cause the Fund to sell
portfolio securities at times when it would not otherwise do so, which may
negatively impact the Fund’s NAV and liquidity. Similarly, large Fund share
purchases may adversely affect the Fund’s performance to the extent that the
Fund is delayed in investing new cash or otherwise maintains a larger cash
position than it ordinarily would. These transactions may also accelerate the
realization of taxable income to shareholders if such sales of investments
resulted in gains, and may also increase transaction costs. In addition, a large
redemption could result in the Fund’s current expenses being allocated over a
smaller asset base, leading to an increase in the Fund’s expense
ratio.
◼
Liquidity
Risk—The Fund
may invest in securities or instruments that trade in lower volumes, that are
less liquid than other investments and/or that may become illiquid or less
liquid in response to market developments or adverse investor perceptions.
Investments that are illiquid or that trade in lower volumes may be more
difficult to value. When there is no willing buyer and investments cannot be
readily sold at the desired time or price, the Fund may have to accept a lower
price or may not be able to sell the security or instrument at all. An inability
to sell one or more portfolio positions can adversely affect the Fund's value or
prevent the Fund from being able to take advantage of other investment
opportunities.
Illiquidity
can be caused by a drop in overall market trading volume, an inability to find a
willing buyer, or legal restrictions on the securities’ resale. To the extent
that the traditional dealer counterparties that engage in fixed income trading
do not maintain inventories of bonds (which provide an important indication of
their ability to “make markets”) that keep pace with the growth of the bond
markets over time, relatively low levels of dealer inventories could lead to
decreased liquidity and increased volatility in the fixed income markets.
Additionally, market participants other than a Fund may attempt to sell fixed
income holdings at the same time as the Fund, which could cause downward pricing
pressure and contribute to decreased liquidity.
Because the
Fund may invest in non-investment grade fixed income securities, small- and
mid-capitalization stocks, REITs and/or emerging country issuers, the Fund may
be especially subject to the risk that during certain periods, the liquidity of
particular issuers or industries, or all securities within a particular
investment category, may shrink or disappear suddenly and without warning as a
result of adverse economic, market or political events (including periods of
rapid interest rate changes), or adverse investor perceptions, whether or not
accurate.
Liquidity
risk may also refer to the risk that the Fund will not be able to pay redemption
proceeds within the allowable time period stated in the Prospectus or without
significant dilution to remaining investors’ interests because of unusual market
conditions, declining prices of the securities sold, an unusually high volume of
redemption requests or other reasons. While the Fund reserves the right to meet
redemption requests through in-kind distributions, the Fund may instead choose
to raise cash to meet redemption requests through sales of portfolio securities
or permissible borrowings. If the Fund is forced to sell securities at an
unfavorable time and/or under unfavorable conditions, such sales may adversely
affect the Fund's NAV and dilute remaining investors’ interests.
Certain
shareholders, including clients or affiliates of the Investment Adviser and/or
other funds managed by the Investment Adviser, may from time to time own or
control a significant percentage of the Fund's shares. Redemptions by these
shareholders of their shares of the Fund may further increase the Fund's
liquidity risk and may impact the Fund's NAV. These shareholders may include,
for example, institutional investors, funds of funds, discretionary
advisory clients, certain participating insurance companies, accounts or
Goldman Sachs affiliates and other shareholders, whose buy-sell decisions are
controlled by a single decision-maker.
◼
Management
Risk—A strategy
used by the Investment Adviser may fail to produce the intended
results.
◼
Market
Risk—The value
of the securities in which the Fund invests may go up or down in response
to the prospects of individual companies, particular sectors or governments
and/or general economic conditions throughout the world. Price changes may be
temporary or last for extended periods. The Fund's investments may be
overweighted from time to time in one or more sectors or countries, which will
increase the Fund's exposure to risk of loss from adverse developments affecting
those sectors or countries.
27
Global
economies and financial markets are becoming increasingly interconnected, and
conditions and events in one country, region or financial market may adversely
impact issuers in a different country, region or financial market. Furthermore,
local, regional and global events such as war, military conflict, acts of
terrorism, social unrest, natural disasters, recessions, inflation, rapid
interest rate changes, supply chain disruptions, sanctions, the spread of
infectious illness or other public health threats could also adversely impact
issuers, markets and economies, including in ways that cannot necessarily be
foreseen. The Fund could be negatively impacted if the value of a portfolio
holding were harmed by such political or economic conditions or events. In
addition, governmental and quasi-governmental organizations have taken a number
of unprecedented actions designed to support the markets. Such conditions,
events and actions may result in greater market risk.
◼
Master
Limited Partnership Risk— The Fund’s
investments in securities of a Master Limited Partnership (“MLP”) involve risks
that differ from investments in common stock, including risks related to limited
control and limited rights to vote on matters affecting the MLP, risks related
to potential conflicts of interest between the MLP and the MLP’s general
partner, cash flow risks, dilution risks and risks related to the general
partner’s right to require unit-holders to sell their common units at an
undesirable time or price, resulting from regulatory changes or other reasons.
Certain MLP securities may trade in lower volumes due to their smaller
capitalizations. Accordingly, those MLPs may be subject to more abrupt or
erratic price movements and may lack sufficient market liquidity to enable the
Fund to effect sales at an advantageous time or without a substantial drop in
price. Investment in those MLPs may restrict the Fund’s ability to take
advantage of other investment opportunities. MLPs are generally considered
interest-rate sensitive investments. During periods of interest rate volatility,
these investments may not provide attractive returns.
To the
extent a distribution received by the Fund from an MLP is treated as a return of
capital, the Fund’s adjusted tax basis in the interests of the MLP may be
reduced, which will result in an increase in an amount of income or gain (or
decrease in the amount of loss) that will be recognized by the Fund for tax
purposes upon the sale of any such interests or upon subsequent distributions in
respect of such interests. Furthermore, any return of capital distribution
received from the MLP may require the Fund to restate the character of its
distributions and amend any shareholder tax reporting previously issued.
Moreover, a change in current tax law, or a change in the underlying business
mix of a given MLP, could result in an MLP being treated as a corporation for
U.S. federal income tax purposes, which could result in a reduction of the value
of the Fund's investment in the MLP and lower income to the Fund.
Individuals
and certain
other noncorporate entities are generally eligible for a 20% deduction with
respect to taxable income from MLPs through 2025. Currently, there is not a
regulatory mechanism for regulated investment companies such as the Fund to pass
through the 20% deduction to shareholders. As a result, in comparison, investors
investing directly in MLPs would generally be eligible for the 20% deduction for
such taxable income from these investments while investors investing in MLPs
held indirectly if any through the Fund would not be eligible for the 20%
deduction for their share of such taxable income.
◼
Mid-Cap
and Small-Cap Risk—The
securities of mid-capitalization and small-capitalization companies involve
greater risks than those associated with larger, more established companies and
may be subject to more abrupt or erratic price movements. Securities of such
issuers may lack sufficient market liquidity to enable the Fund to effect sales
at an advantageous time or without a substantial drop in price. Both
mid-capitalization and small-capitalization companies often have narrower
markets and more limited managerial and financial resources than larger, more
established companies. As a result, their performance can be more volatile and
they face greater risk of business failure, which could increase the volatility
of the Fund's portfolio. Generally, the smaller the company size, the greater
these risks become.
◼
NAV
Risk—The net
asset value of the Fund and the value of your investment will
fluctuate.
◼
Non-Investment
Grade Fixed Income Securities Risk—Non-investment
grade fixed income securities and unrated securities of comparable credit
quality (commonly known as “junk bonds”) are considered speculative and are
subject to the increased risk of an issuer’s inability to meet principal and
interest payment obligations. These securities may be subject to greater price
volatility due to such factors as specific issuer developments, interest rate
sensitivity, negative perceptions of the junk bond markets generally and less
liquidity.
◼
Pre-IPO
Investments Risk—The
Fund may invest in privately held companies, including companies that may
issue shares in IPOs. Investments in pre-IPO shares involve greater risks than
investments in shares of companies that have traded publicly on an exchange for
extended periods of time. Investments in these companies are less liquid and
difficult to value, and there is significantly less information available about
these companies’ business models, quality of management, earnings growth
potential, and other criteria used to evaluate their investment prospects.
Although there is a potential the pre-IPO shares that the Fund buys may increase
in value if the company does issue shares in an IPO, IPOs are risky and volatile
and may cause the value of the Fund’s investments to decrease significantly.
Moreover, because pre-IPO shares are generally not freely or publicly tradeable,
the Fund may not have access to purchase or the ability to sell these shares in
the amounts or at the prices the Fund desires. The companies that the Fund
anticipates holding successful IPOs may not ever issue shares in an IPO and a
liquid market for their shares may never develop, which may negatively affect
the price at which the Fund can sell these shares and make it more difficult to
sell these shares, which could also adversely affect the Fund’s
liquidity.
28
Risks
of the Funds
◼
Private
Investments in Public Equities Risk—The Fund
may purchase equity securities in a private placement that are issued by issuers
who have outstanding, publicly-traded equity securities of the same class
(“private investments in public equity” or “PIPEs”). Shares in PIPEs generally
are not registered with the SEC until after a certain time period from the date
the private sale is completed. This restricted period can last many months.
Until the public registration process is completed, PIPEs are restricted as to
resale and the Fund cannot freely trade the securities. Generally, such
restrictions cause the PIPEs to be illiquid during this time. PIPEs may contain
provisions that the issuer will pay specified financial penalties to the holder
if the issuer does not publicly register the restricted equity securities within
a specified period of time, but there is no assurance that the restricted equity
securities will be publicly registered, or that the registration will remain in
effect.
◼
Special
Purpose Acquisition Companies Risk—The Fund may invest in
stock, warrants, and other securities of SPACs. A SPAC is typically a publicly
traded company that raises funds through an IPO for the purpose of acquiring or
merging with another company to be identified subsequent to the SPAC’s IPO.
Because SPACs and similar entities are in essence blank check companies without
operating history or ongoing business other than seeking acquisitions, the value
of their securities is particularly dependent on the ability of the entity’s
management to identify and complete a profitable acquisition. An investment in a
SPAC is subject to a variety of risks, including that (i) prior to any
acquisition or merger, a SPAC’s assets are typically invested in U.S. government
securities, money market funds and similar investments whose returns or yields
may be significantly lower than those of the Fund’s other investments; (ii) the
Fund generally will not receive significant income from its investments in SPACs
(both prior to and after any acquisition or merger) and, therefore, the Fund’s
investments in SPACs will not significantly contribute to the Fund’s
distributions to shareholders; (iii) attractive acquisition or merger targets
may become scarce if the number of SPACs seeking to acquire operating businesses
increases; (iv) an attractive acquisition or merger target may not be identified
at all, in which case the SPAC will be required to return any remaining monies
to shareholders (unless such shareholders approve alternative arrangements), and
the Fund may be subject to opportunity costs to the extent that alternative
investments would have produced higher returns; (v) if an acquisition or merger
target is identified, the Fund may elect not to participate in, or vote to
approve, the proposed transaction or the Fund may be required to divest its
interests in the SPAC, due to regulatory or other considerations, in which case
the Fund may not reap any resulting benefits; (vi) an acquisition or merger once
effected may prove unsuccessful and an investment in the SPAC may lose value;
(vii) an investment in a SPAC may be diluted by additional, later offerings of
securities by the SPAC or by other investors exercising existing rights to
purchase securities of the SPAC;
(viii) a
significant portion of the funds raised by the SPAC may be expended during the
search for a target acquisition or merger;
(ix) only a
thinly traded market for shares of or interests in a SPAC may develop, or there
may be no market at all, leaving the Fund unable to sell its interest in a SPAC
or to sell its interest only at a lower price; and (x) the values of investments
in SPACs may be highly volatile and may depreciate significantly over time. In
addition, the Fund may obtain certain private rights and other interests issued
by a SPAC (commonly referred to as “founder shares”), which may be subject to
forfeiture or expire worthless and which generally have more limited liquidity
than SPAC shares issued in an IPO.
◼
Stock
Risk—Stock
prices have historically risen and fallen in periodic cycles. U.S. and
foreign stock markets have experienced periods of substantial price volatility
in the past and may do so again in the future. Stock prices may fluctuate from
time to time in response to the activities of individual companies and in
response to general market and economic conditions. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments, and the stock prices of such companies may suffer a decline in
response.
◼
Technology
Sector Risk—The stock
prices of technology and technology-related companies and therefore the value of
the Technology Opportunities Fund may experience significant price movements as
a result of intense market volatility, worldwide competition, consumer
preferences, product compatibility, product obsolescence, government regulation,
excessive investor optimism or pessimism, or other factors. Many of the products
and services offered by technology companies are subject to the risk of short
product cycles. Certain technology-related companies may face special risks that
their products or services may not prove to be commercially successful. Such
companies also may be subject to risks relating to research and development
costs and the availability and price of components. As product cycles shorten
and manufacturing capacity increases, these companies could become increasingly
subject to aggressive pricing and competition, which hampers profitability. The
Technology Opportunities Fund may also invest in a relatively few number of
issuers. Thus, the Technology Opportunities Fund may be more susceptible to
adverse developments affecting any single issuer held in its portfolio and may
be more susceptible to greater losses because of these
developments.
◼
U.S.
Government Securities Risk—The U.S.
government may not provide financial support to U.S. government agencies,
instrumentalities or sponsored enterprises if it is not obligated to do so by
law. U.S. Government Securities issued by those agencies,
instrumentalities and sponsored enterprises, including those issued by the
Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage
Corporation (“Freddie Mac”) and the Federal Home Loan Banks, are neither issued
nor guaranteed by the U.S. Treasury and, therefore, are not backed by the full
faith and credit of the United States. The maximum potential liability of the
issuers of some U.S. Government Securities held by the Fund may greatly exceed
their current resources, including any legal right to support from the U.S.
Treasury. It is possible that issuers of U.S. Government Securities will not
have the funds to meet their payment obligations in the future. Fannie Mae and
Freddie Mac have been operating under conservatorship,
29
with the
Federal Housing Finance Agency (“FHFA”) acting as their conservator, since
September 2008. The entities are dependent upon the continued support of the
U.S. Department of the Treasury and FHFA in order to continue their business
operations. These factors, among others, could affect the future status and role
of Fannie Mae and Freddie Mac and the value of their securities and the
securities which they guarantee. Additionally, the U.S. government and its
agencies and instrumentalities do not guarantee the market values of their
securities, which may fluctuate.
More
information about the Fund’s portfolio securities and investment techniques, and
its associated risks, is provided in Appendix A. You should consider the
investment risks discussed in this section and in Appendix A. Both are important
to your investment choice.
30
Service
Providers
|
INVESTMENT
ADVISER |
|
Investment
Adviser |
Fund |
|
Goldman
Sachs Asset Management, L.P. (“GSAM”)
200
West Street
New
York, NY 10282 |
Mid
Cap Growth
Small
Cap Growth
Small/Mid
Cap Growth
Technology
Opportunities |
GSAM has been registered as
an investment adviser with the SEC since 1990 and is an indirect, wholly-owned
subsidiary of The Goldman Sachs Group, Inc. and an affiliate of Goldman Sachs.
Founded in 1869, The Goldman Sachs Group, Inc. is a publicly-held financial
holding company and a leading global investment banking, securities and
investment management firm. As of September 30, 2023, GSAM, including its
investment advisory affiliates, had assets under supervision of approximately
$2.19 trillion.
The
Investment Adviser provides day-to-day advice regarding the Fund’s portfolio
transactions. The Investment Adviser makes the investment decisions for the Fund
and places purchase and sale orders for the Fund’s portfolio transactions in
U.S. and foreign markets. As permitted by applicable law, these orders may be
directed to any executing brokers, dealers, futures commission merchants or
other counterparties, including Goldman Sachs and its affiliates. While the
Investment Adviser is ultimately responsible for the management of the Fund, it
is able to draw upon the research and expertise of its asset management
affiliates for portfolio decisions and management with respect to certain
portfolio securities. In addition, the Investment Adviser has access to the
research and certain proprietary technical models developed by Goldman Sachs
(subject to legal, internal, regulatory and Chinese Wall restrictions), and will
apply quantitative and qualitative analysis in determining the appropriate
allocations among categories of issuers and types of securities.
The
Investment Adviser also performs the following additional services for the Fund
(to the extent not performed by others pursuant to agreements with the
Fund):
◼
Supervises
all non-advisory operations of the Fund
◼
Provides
personnel to perform necessary executive, administrative and clerical services
to the Fund
◼
Arranges
for the preparation of all required tax returns, reports to shareholders,
prospectuses and statements of additional information and other reports filed
with the SEC and other regulatory authorities
◼
Maintains
the records of the Fund
◼
Provides
office space and all necessary office equipment and services
An
investment in the Fund may be negatively impacted because of the operational
risks arising from factors such as processing errors and human errors,
inadequate or failed internal or external processes, failures in systems and
technology, changes in personnel, and errors caused by third-party service
providers or trading counterparties. Although the Fund attempts to minimize such
failures through controls and oversight, it is not possible to identify all of
the operational risks that may affect the Fund or to develop processes and
controls that completely eliminate or mitigate the occurrence of such failures.
The Fund and its shareholders could be negatively impacted as a
result.
From time
to time, Goldman Sachs or its affiliates may invest “seed” capital in the Fund.
These investments are generally intended to enable the Fund to commence
investment operations and achieve sufficient scale. Goldman Sachs and its
affiliates may hedge the exposure of the seed capital invested in the Fund by,
among other things, taking an offsetting position in the benchmark of the
Fund.
31
|
MANAGEMENT
FEES AND OTHER EXPENSES |
As
compensation for its services and its assumption of certain expenses, the
Investment Adviser is entitled to the following fees, computed daily and payable
monthly, at the annual rates listed below (as a percentage of each respective
Fund’s average daily net assets):
|
Fund |
Contractual
Management
Fee
Annual
Rate |
Average
Daily
Net
Assets |
Actual
Rate
For
the Fiscal
Year
Ended
August
31, 2023* |
|
Mid
Cap Growth |
0.92% |
First $2
Billion |
0.83% |
|
|
0.83% |
Next $3
Billion |
|
|
|
0.79% |
Next $3
Billion |
|
|
|
0.77% |
Over $8
Billion |
|
|
Small
Cap Growth |
0.85% |
First $2
Billion |
0.85% |
|
|
0.77% |
Next $3
Billion |
|
|
|
0.73% |
Next $3
Billion |
|
|
|
0.71% |
Over $8
Billion |
|
|
Small/Mid
Cap Growth |
0.85% |
First $2
Billion |
0.85% |
|
|
0.77% |
Next $3
Billion |
|
|
|
0.73% |
Next $3
Billion |
|
|
|
0.71% |
Over $8
Billion |
|
|
Technology
Opportunities |
0.94% |
First $1
Billion |
0.88% |
|
|
0.85% |
Next $1
Billion |
|
|
|
0.80% |
Next $3
Billion |
|
|
|
0.79% |
Next $3
Billion |
|
|
|
0.77% |
Over $8
Billion |
|
*
The
Actual Rate may not correlate to the Contractual Management Fee Annual Rate as a
result of management fee waivers that may be in effect from time to
time.
The Investment Adviser has
agreed to waive a portion of its management fee in order to achieve an effective
rate of 0.81% as an annual percentage rate of the Mid Cap Growth and 0.85% as an
annual percentage rate of the Technology Opportunities Fund’s average daily net
assets. The Investment Adviser has also agreed to waive a portion of its
management fee for the Mid Cap Growth Fund in an amount equal to any management
fees it earns as an investment adviser to any of the affiliated funds in which
the Fund invests, except those management fees it earns from the Fund’s
investments of cash collateral received in connection with securities lending
transactions in affiliated funds, based on the Fund’s investments in such
affiliated funds. These arrangements will remain in effect through at least
December 29, 2024, and prior to such date, the Investment Adviser may not
terminate the arrangements without the approval of the Board of Trustees. These
management fee waivers may be modified or terminated by the Investment Adviser
at its discretion and without shareholder approval after such date, although the
Investment Adviser does not presently intend to do so.
In addition
to the management fee waivers described above, the Investment Adviser may waive
an additional portion of its management fee, including fees earned as the
Investment Adviser to any affiliated funds in which the Fund invests, from time
to time, and may discontinue or modify any such waivers in the future,
consistent with the terms of any fee waiver arrangements that may be in
place.
A discussion regarding the
basis for the Board of Trustees’ approval of the Management Agreement for the
Fund in 2023 is available in the Fund's annual report dated August 31,
2023.
The Investment Adviser has
agreed to reduce or limit “Other Expenses,” (excluding acquired fund fees and
expenses, transfer agency fees and expenses, taxes, interest, brokerage fees,
expenses of shareholder meetings, litigation and indemnification and
extraordinary expenses) to 0.004%, 0.024%, 0.044%, and 0.004%, of average daily
net assets for the Mid Cap Growth, Small Cap Growth, Small/Mid Cap Growth, and
Technology Opportunities Funds, respectively, through at least December 29,
2024, and prior to such date the Investment Adviser may not terminate the
arrangements without the approval of the Board of Trustees. The expense
limitations may be modified or terminated by the Investment Adviser at its
discretion and without shareholder approval after such date, although the
Investment Adviser does not presently intend to do so. The Fund’s “Other
Expenses” may be further reduced by any custody and transfer agency fee credits
received by the Fund.
32
Service
Providers
|
FUND
MANAGERS |
Fundamental Equity
U.S. Equity Team
The
individuals jointly and primarily responsible for the day-to-day management of
the Fund are listed below. The Fund’s portfolio managers' individual
responsibilities may differ and may include, among other things, security
selection, asset allocation, risk budgeting and general oversight of the
management of the Fund’s portfolios.
|
Name
and Title |
Fund
Responsibility |
Years
Primarily
Responsible |
Five
Year Employment History |
|
Steven
M. Barry
Managing
Director
Co-Chief
Investment Officer,
Fundamental
Equity U.S. Equity |
Portfolio
Manager—
Mid
Cap Growth,
Small/Mid
Cap Growth
Technology
Opportunities |
Since
1999
1999
1999 |
Mr.
Barry joined the Investment Adviser as a portfolio manager in
1999.
He is Managing Director and Co-Chief Investment Officer of
Fundamental
Equity U.S. Equity. Mr. Barry became Chief Investment
Officer
of Fundamental Equity U.S. Equity in 2009. |
|
Sung
Cho, CFA
Managing
Director |
Portfolio
Manager—
Technology
Opportunities |
Since
2018 |
Mr.
Cho joined the Investment Adviser in 2004. He is a portfolio
manager
on the Fundamental Equity U.S. Equity Team, where he has
broad
research responsibilities. |
|
Charles
“Brook” Dane, CFA
Vice
President |
Portfolio
Manager—
Technology
Opportunities |
Since
2018 |
Mr.
Dane joined the Investment Adviser in 2010 as a portfolio
manager
for the Fundamental Equity U.S. Equity Team. |
|
Jenny
Chang
Vice
President |
Portfolio
Manager—
Mid
Cap Growth |
Since
2019 |
Ms.
Chang is a portfolio manager on the Fundamental Equity Team
focused
on the Mid Cap Growth strategy. She joined GSAM in
2016.
Prior to joining the Investment Adviser, she was an
investment
analyst at Franklin Templeton for five years. |
|
Jessica
Katz
Vice
President |
Portfolio
Manager—
Small/Mid
Cap Growth
Small
Cap Growth |
Since
2019
2019 |
Ms.
Katz is a Portfolio Manager for the Fundamental Equity Team
focused
on the Small Cap Growth and Small/Mid Cap Growth
strategies.
Prior to joining the Investment Adviser, she spent over
seven
years as a Research Analyst at Eaton Vance
Management. |
|
Gregory
Tuorto
Managing
Director |
Portfolio
Manager—
Small/Mid
Cap Growth
Small
Cap Growth |
Since
2019
2019 |
Mr.
Tuorto is a portfolio manager on the Fundamental Equity Team
focused
on the Small Cap Growth and Small/Mid Cap Growth
strategies.
He joined the Investment Adviser in 2019. Prior to
joining
the Investment Adviser, Mr. Tuorto had worked at JPMorgan
Asset
Management since 2008. |
For
information about the portfolio managers’ compensation, other accounts managed
by the portfolio managers and the portfolio managers’ ownership of securities in
the Fund, see the SAI.
|
DISTRIBUTOR
AND TRANSFER AGENT |
Goldman Sachs, 200 West
Street, New York, NY 10282, serves as the exclusive distributor (the
“Distributor”) of the Fund’s shares. Goldman Sachs, 71
South Wacker
Drive, Suite 1200, Chicago, IL 60606, also serves as the Fund’s transfer agent
(the “Transfer Agent”) and, as such, performs various shareholder servicing
functions.
For its
transfer agency services, Goldman Sachs is entitled to receive a transfer agency
fee equal, on an annualized basis, to 0.03% of average daily net assets with
respect to Class P Shares.
From time
to time, Goldman Sachs or any of its affiliates may purchase and hold shares of
the Fund. Goldman Sachs and its affiliates reserve the right to redeem at any
time some or all of the shares acquired for their own accounts.
|
ACTIVITIES
OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER
ACCOUNTS
MANAGED BY GOLDMAN SACHS |
The
involvement of the Investment Adviser, Goldman Sachs and their affiliates in the
management of, or their interest in, other accounts and other activities of
Goldman Sachs will present conflicts of interest with respect to the Fund and
will, under certain circumstances, limit the Fund’s investment activities.
Goldman Sachs is a worldwide, full service investment banking, broker dealer,
asset management and financial services organization and a major participant in
global financial markets that provides a wide range of financial services to a
substantial and diversified client base that includes corporations, financial
institutions, governments and individuals. As such, it acts as a broker-dealer,
investment adviser, investment banker, underwriter, research provider,
administrator, financier, adviser, market maker, trader, prime broker,
derivatives dealer, clearing agent, lender, counterparty, agent, principal,
distributor, investor or in other commercial capacities for accounts or
companies or affiliated or unaffiliated investment funds (including pooled
investment vehicles and private funds) in which one or more accounts, including
the Fund, invest. In those and other capacities, Goldman Sachs and its
affiliates advise and deal with clients and third parties in all markets and
transactions and purchase,
33
sell, hold
and recommend a broad array of investments, including securities, derivatives,
loans, commodities, currencies, credit default swaps, indices, baskets and other
financial instruments and products for their own accounts or for the accounts of
their customers and have other direct and indirect interests in the global fixed
income, currency, commodity, equities, bank loans and other markets and the
securities and issuers in which the Fund directly and indirectly invests. Thus,
it is expected that the Fund will have multiple business relationships with and
will invest in, engage in transactions with, make voting decisions with respect
to, or obtain services from entities for which Goldman Sachs and its affiliates
perform or seek to perform investment banking or other services. The Investment
Adviser and/or certain of its affiliates are the managers of the Goldman Sachs
Funds. The Investment Adviser and its affiliates earn fees from this and other
relationships with the Fund. Although management fees paid by the Fund to the
Investment Adviser and certain other fees paid to the Investment Adviser’s
affiliates are based on asset levels, the fees are not directly contingent on
Fund performance, and the Investment Adviser and its affiliates will still
receive significant compensation from the Fund even if shareholders lose money.
Goldman Sachs and its affiliates engage in proprietary trading and advise
accounts and funds which have investment objectives similar to those of the Fund
and/or which engage in and compete for transactions in the same types of
securities, currencies and instruments as the Fund. Goldman Sachs and its
affiliates will not have any obligation to make available any information
regarding their proprietary activities or strategies, or the activities or
strategies used for other accounts managed by them, for the benefit of the
management of the Fund. The results of the Fund’s investment activities,
therefore, will likely differ from those of Goldman Sachs, its affiliates, and
other accounts managed by Goldman Sachs, and it is possible that the Fund could
sustain losses during periods in which Goldman Sachs and its affiliates and
other accounts achieve significant profits on their trading for proprietary or
other accounts. In addition, the Fund may enter into transactions in which
Goldman Sachs and its affiliates or their other clients have an adverse
interest. For example, the Fund may take a long position in a security at the
same time that Goldman Sachs and its affiliates or other accounts managed by the
Investment Adviser or its affiliates take a short position in the same security
(or vice versa). These and other transactions undertaken by Goldman Sachs, its
affiliates or Goldman Sachs-advised clients may, individually or in the
aggregate, adversely impact the Fund. Transactions by one or more Goldman
Sachs-advised clients or the Investment Adviser may have the effect of diluting
or otherwise disadvantaging the values, prices or investment strategies of the
Fund. The Fund’s activities will, under certain circumstances, be limited
because of regulatory restrictions applicable to Goldman Sachs and its
affiliates, and/or their internal policies designed to comply with such
restrictions. As a global financial services firm, Goldman Sachs and its
affiliates also provide a wide range of investment banking and financial
services to issuers of securities and investors in securities. Goldman Sachs,
its affiliates and others associated with it are expected to create markets or
specialize in, have positions in and/or effect transactions in, securities of
issuers held by the Fund, and will likely also perform or seek to perform
investment banking and financial services for one or more of those issuers.
Goldman Sachs and its affiliates are expected to have business relationships
with and purchase or distribute or sell services or products from or to
distributors, consultants or others who recommend the Fund or who engage in
transactions with or for the Fund. For more information about conflicts of
interest, see the section entitled “Potential Conflicts of Interest” in the
SAI.
The Fund
will, from time to time, make brokerage and other payments to Goldman Sachs and
its affiliates in connection with the Fund’s portfolio investment transactions,
in accordance with applicable law.
34
Distributions
The Fund
pays distributions from its investment income and from net realized capital
gains. You may choose to have distributions paid in:
◼
Cash
◼
Additional
shares of the same class of the same Fund
◼
Shares of
the same or an equivalent class of another fund managed by the Investment
Adviser and/or certain of its advisory affiliates (each, a “Goldman Sachs
Fund”). Special restrictions may apply. See the SAI.
You may
indicate your election on your account application. Any changes may be submitted
in writing or via telephone, in some instances, to the Transfer Agent (either
directly or through your intermediary) at any time before the record date for a
particular distribution. If you do not indicate any choice, your distributions
will be reinvested automatically in the applicable
Fund. Distributions from net investment income and distributions from net
capital gains, if any, are normally declared and paid annually for the Fund. In
addition, the Fund may occasionally make a distribution at a time when it
is not normally made. If cash distributions are elected with respect to the
Fund’s distributions from net investment income, then cash distributions must
also be elected with respect to the net short-term capital gains component, if
any, of the Fund’s distributions.
The
election to reinvest distributions in additional shares will not affect the tax
treatment of such distributions, which will be treated as received by you and
then used to purchase the shares.
From time
to time a portion of the Fund’s distributions may constitute a return of capital
for tax purposes, and/or may include amounts in excess of the Fund’s net
investment income for the period calculated in accordance with generally
accepted accounting principles (GAAP).
When you
purchase shares of the Fund, part of the NAV per share may be represented by
undistributed income and/or realized gains that have previously been earned by
the Fund. Therefore, subsequent distributions on such shares from such income
and/or realized gains may be taxable to you even if the NAV of the shares is, as
a result of the distributions, reduced below the cost of such shares and the
distributions (or portions thereof) represent a return of a portion of the
purchase price.
35
Shareholder
Guide
The
following section will provide you with answers to some of the most frequently
asked questions regarding buying and selling the Funds' shares.
|
Important
Notice: |
|
Class
P Shares generally are available to the following
investors: |
|
◼Clients
of the Goldman Sachs Private Wealth Management business unit (“GS PWM”)
that custody their positions at
Goldman
Sachs & Co. LLC (“Goldman Sachs”); |
|
◼Clients
of The Goldman Sachs Trust Company, N.A. or The Goldman Sachs Trust
Company of Delaware (collectively, the
“Trust
Companies”) that custody their positions at Goldman
Sachs; |
|
◼Clients
of The Ayco Company, L.P. (“Ayco”) that either custody their positions at
Goldman Sachs or with certain
intermediaries
that are authorized to offer Class P Shares (“Authorized Institutions”)
(such clients of GS PWM, the Trust
Companies,
and Ayco are collectively referred to herein as “GS Clients”);
or |
|
◼Other
investors at the discretion of Goldman Sachs Trust’s (the “Trust”)
officers. |
|
You
may only purchase Class P Shares in accordance with the eligibility
criteria described above. If you are a GS Client and
propose
to transfer your shares to another institution for any reason, or if you
are no longer a GS Client, you may be required to
redeem
your shares of the Fund, or at the discretion of the Trust’s officers, you
may be able hold Class P Shares through another
institution,
which must be an Authorized Institution and the basis on which you hold
such Class P Shares may be limited to hold
and
redeem only. If available in such circumstances, in the alternative you
may be able to choose to exchange your shares of the
Fund
for a different share class offered by the Fund or another Goldman Sachs
Fund, which may be offered in another
Prospectus.
There is no guarantee that a different share class offered by the Fund
will be available to clients of the institution to
which
you intend to transfer your shares or that an option to exchange will be
made available. Moreover, the shares you receive
in
any exchange are subject to different (and possibly higher) fees and
expenses (which affect performance). Information
regarding
these other share classes may be obtained from the institution to which
you intend to transfer your shares or from the
Transfer
Agent by calling the number on the back cover of the
Prospectus. |
|
A
redemption is a taxable transaction for federal income tax purposes, and
may also be subject to state and local taxes. You
should
consult your tax adviser concerning the potential tax consequences of
investing in Class P Shares. None of the Trust, the
Investment
Adviser, Goldman Sachs, the Trust Companies, Ayco or an Authorized
Institution will be responsible for any loss in
an
investor’s account or tax liability resulting from a redemption or
exchange of Class P Shares. For more information about
exchanges,
please see “How to Sell Shares—Can I Exchange My Investment From One
Goldman Sachs Fund To Another
Goldman
Sachs Fund.” |
|
How
To Buy Shares |
Shares
Offering
Shares of
the Fund are continuously offered through Goldman Sachs, acting in its capacity
as the Fund’s distributor (the “Distributor”). The Fund and the Distributor will
have the sole right to accept orders to purchase shares and reserve the right to
reject any purchase order in whole or in part.
How Can I Purchase
Shares Of The Fund?
If you are
a GS Client, you may purchase shares of the Fund through Goldman Sachs, the
Trust Companies, Ayco, or an Authorized Institution. Goldman Sachs, the Trust
Companies, Ayco, and Authorized Institutions have been authorized by the Trust
to accept purchase, redemption or exchange orders on behalf of the Fund for GS
Clients. In order to make an initial investment in the Fund you must furnish to
Goldman Sachs, the Trust Companies, Ayco or your Authorized Institution the
information in the account application.
To open an
account, contact Goldman Sachs, the Trust Companies, Ayco or your Authorized
Institution. Goldman Sachs, the Trust Companies, Ayco, and Authorized
Institutions will normally give order instructions on behalf of GS Clients to
the Transfer Agent. Goldman Sachs, the Trust Companies, Ayco, or your Authorized
Institution, as applicable, is responsible for transmitting accepted orders and
payments to the Transfer Agent within the time period agreed upon by them and
will set times by which orders and payments must be received by them from GS
Clients. The Trust, Transfer Agent, Investment Adviser and their affiliates will
not be responsible for any loss in connection with orders that are not
transmitted to the Transfer Agent on a timely basis.
36
Shareholder
Guide
The Fund
will be deemed to have received an order for purchase, redemption or exchange of
Fund shares when the order is accepted in “proper form” by any of the Transfer
Agent, Goldman Sachs, the Trust Companies, Ayco or an Authorized Institution, as
applicable, on a business day, and the order will be priced at the Fund’s
current NAV per share next determined after acceptance by any of the Transfer
Agent, Goldman Sachs, the Trust Companies, Ayco or an Authorized Institution, as
applicable. Proper form generally means that specific trade details and customer
identifying information must be received by the Transfer Agent at the time an
order is submitted. Goldman Sachs, the Trust Companies, Ayco and Authorized
Institutions may have different requirements regarding what constitutes proper
form for trade instructions. Please contact Goldman Sachs, the Trust Companies,
Ayco or your Authorized Institution for more information.
What Is My Minimum
Investment In The Fund?
No minimum
amount is required for initial purchases or additional investments in Class P
Shares.
What Should I Know
When I Purchase Shares?
All
recordkeeping, transaction processing and payments of distributions relating to
your account will be performed by Goldman Sachs, the Trust Companies, Ayco, or
your Authorized Institution, as applicable, and not by the Fund and its Transfer
Agent. Since the Fund will have no record of your transactions, you should
contact Goldman Sachs, the Trust Companies, Ayco, or your Authorized
Institution, as applicable, to purchase, redeem or exchange shares, to make
changes in or give instructions concerning your account or to obtain information
about your account. If you transfer your shares, the Trust reserves the right to
redeem your shares. The Trust, the Investment Adviser, Goldman Sachs, the Trust
Companies, Ayco and an Authorized Institution will not be responsible for any
loss in an investor’s account or tax liability resulting from a
redemption.
Goldman
Sachs, the Trust Companies, Ayco, and Authorized Institutions that invest in
shares on behalf of GS Clients may charge fees directly to the GS Clients’
accounts in connection with their investments. You should contact Goldman Sachs,
the Trust Companies, Ayco, or your Authorized Institution for information
regarding such charges, as these fees, if any, may affect the return that GS
Clients realize with respect to their investments.
The
Investment Adviser, Distributor and/or their affiliates may make payments or
provide services to Authorized Institutions to promote the sale, distribution
and/or servicing of shares of the Fund and other Goldman Sachs Funds. These
payments are made out of the Investment Adviser’s, Distributor’s and/or their
affiliates’ own assets, and are not an additional charge to the Fund. Such
payments are intended to compensate Authorized Institutions for, among other
things: marketing shares of the Fund and other Goldman Sachs Funds, which may
consist of payments relating to the Fund’s inclusion on preferred or recommended
fund lists or in certain sales programs sponsored by Authorized Institutions;
access to Authorized Institutions’ registered representatives, advisors or
salespersons, including at conferences and other meetings; assistance in
training and education of personnel; marketing support; the provision of
analytical or other data to the Investment Adviser or its affiliates relating to
sales of shares of the Funds and other Goldman Sachs Funds; the support or
purchase of technology platforms/software; and/or other specified services
intended to assist in the distribution and marketing of the Fund and other
Goldman Sachs Funds, including provision of consultative services to the
Investment Adviser or its affiliates relating to marketing and/or sale of shares
of the Fund and other Goldman Sachs Funds. The payments may also, to the extent
permitted by applicable regulations, sponsor various trainings and educational
programs. The payments by the Investment Adviser, Distributor and/or their
affiliates, which are in addition to the fees paid for these services by the
Fund, may also compensate Authorized Institutions for subaccounting,
sub-transfer agency, administrative and/or shareholder processing services.
These additional payments may exceed amounts earned on these assets by the
Investment Adviser, Distributor and/or their affiliates for the performance of
these or similar services. The amount of these additional payments is normally
not expected to exceed 0.50% (annualized) of the amount sold or invested through
Authorized Institutions. In addition, certain Authorized Institutions may have
access to certain services from the Investment Adviser, Distributor and/or their
affiliates, including research reports, economic analysis, and portfolio
analysis, portfolio construction and similar tools and software. In certain
cases, Authorized Institutions may not pay for these products or services or may
only pay for a portion of the total cost of these products or services. Please
refer to the “Payments to Others (Including Intermediaries)” section of the SAI
for more information about these payments and services.
The
payments made by the Investment Adviser, Distributor and/or their affiliates and
the services provided by each of Goldman Sachs, the Trust Companies, Ayco, or an
Authorized Institution may differ. The presence of these payments, receipt of
these services and the basis on which Goldman Sachs, the Trust Companies, Ayco,
or an Authorized Institution compensates its registered representatives,
advisors or salespersons may create an incentive for a particular registered
representative, advisor or salesperson to highlight, feature or recommend the
Fund based, at least in part, on the level of compensation paid. You should
contact Goldman Sachs, the Trust Companies, Ayco, or your Authorized Institution
for more information about the payments it receives and any potential conflicts
of interest.
37
What Else Should I
Know About Share Purchases?
The Trust
reserves the right to:
◼
Require
Goldman Sachs, the Trust Companies, Ayco, or an Authorized Institution to refuse
to open an account if you fail to (i) provide a taxpayer identification number,
a Social Security Number or other government-issued identification (e.g., for an
individual, a driver’s license or passport) or (ii) certify that such number or
other information is correct (if required to do so under applicable
law).
◼
Reject or
restrict any purchase or exchange order by a particular purchaser (or group of
related purchasers) for any reason in its discretion. Without limiting the
foregoing, the Trust may reject or restrict purchase and exchange orders by a
particular purchaser (or group of related purchasers) when a pattern of frequent
purchases, sales or exchanges of shares of the Fund is evident, or if purchases,
sales or exchanges are, or a subsequent redemption might be, of a size that
would disrupt the management of the Fund.
◼
Close the
Fund to new investors from time to time and reopen any such Fund whenever it is
deemed appropriate by the Investment Adviser.
◼
Provide
for, modify or waive the minimum investment requirements.
◼
Modify the
manner in which shares are offered.
◼
Modify the
sales charge rate applicable to future purchases of shares.
Shares of
the Fund are only registered for sale in the United States and certain of its
territories. Generally, shares of the Fund will only be offered or sold to “U.S.
persons” and all offerings or other solicitation activities will be conducted
within the United States, in accordance with the rules and regulations of the
Securities Act of 1933, as amended (“Securities Act”).
The Fund
may allow you to purchase shares through Goldman Sachs, the Trust Companies,
Ayco or an Authorized Institution with securities instead of cash if consistent
with the Fund’s investment policies and operations and approved by the
Investment Adviser.
Notwithstanding
the foregoing, the Trust, Goldman Sachs, the Trust Companies, Ayco and any
Authorized Institution reserve the right to reject or restrict purchase or
exchange requests from any investor. The Trust, Goldman Sachs, the Trust
Companies and Ayco will not be liable for any loss resulting from rejected
purchase or exchange orders.
Please be
advised that abandoned or unclaimed property laws for certain states (to which
your account may be subject) require financial organizations to transfer
(escheat) unclaimed property (including shares of the Fund) to the appropriate
state if no activity occurs in an account for a period of time specified by
state law. For IRA accounts escheated to a state under these abandoned property
laws, the escheatment will generally be treated as a taxable distribution to
you; federal and any applicable state income tax will be withheld. This may
apply to your Roth IRA as well.
Customer
Identification Program. Federal
law requires the Fund to obtain, verify and record identifying information for
certain investors, which will be reviewed solely for customer identification
purposes, which may include the name, residential or business street address,
date of birth (for an individual), Social Security Number or taxpayer
identification number or other information, for each investor who opens an
account directly with the Fund. Applications without the required information
may not be accepted by the Fund. Throughout the life of your account, the Fund
may request updated identifying information in accordance with their Customer
Identification Program. After accepting an application, to the extent permitted
by applicable law or their Customer Identification Program, the Fund reserves
the right to: (i) place limits on transactions in any account until the identity
of the investor is verified; (ii) refuse an investment in the Fund; or (iii)
involuntarily redeem an investor’s shares and close an account in the event that
the Fund is unable to verify an investor’s identity or are unable to obtain all
required information. The Fund and its agents will not be responsible for any
loss or tax liability in an investor’s account resulting from the investor’s
delay in providing all required information or from closing an account and
redeeming an investor’s shares pursuant to their Customer Identification
Program.
How Are Shares
Priced?
The price
you pay when you buy shares is the Fund’s next-determined NAV per share after
any of the Transfer Agent, Goldman Sachs, the Trust Companies, Ayco or an
Authorized Institution, as applicable, has received and accepted your order in
proper form. The price you receive when you sell shares is the Fund’s
next-determined NAV per share after any of the Transfer Agent, Goldman Sachs,
the Trust Companies, Ayco or an Authorized Institution, as applicable, has
received and accepted your order in proper form. Each class generally calculates
its NAV as follows:
|
NAV
= |
(Value
of Assets of the Class)
–
(Liabilities of the Class) |
|
|
Number
of Outstanding Shares of the
Class |
The Fund’s
investments for which market quotations are readily available are valued at
market value on the basis of quotations provided by pricing sources. If accurate
quotations are not readily available, if the Fund’s fund accounting agent is
unable for other reasons to facilitate pricing of individual securities or
calculate the Fund’s NAV, or if the Investment Adviser believes that such
quotations do not accurately reflect fair value, the fair value of the Fund’s
investments may be determined in good faith under valuation
38
Shareholder
Guide
procedures
approved by the Board of Trustees. Thus, such pricing may be based on subjective
judgments and it is possible that the prices resulting from such valuation
procedures may differ materially from the value realized on a sale. Cases where
there is no clear indication of the value of the Fund’s investments include,
among others, situations where a security or other asset or liability does not
have a price source or a price is unavailable.
Equity
securities listed on an exchange are generally valued at the last available sale
price on the exchange on which they are principally traded. To the extent the
Fund invests in foreign equity securities, “fair value” prices will be provided
by an independent third-party pricing (fair value) service in accordance with
the fair value procedures approved by the Board of Trustees. Fair value prices
are used because many foreign markets operate at times that do not coincide with
those of the major U.S. markets. Events that could affect the values of foreign
portfolio holdings may occur between the close of the foreign market and the
time of determining the NAV, and would not otherwise be reflected in the
NAV.
Fixed
income securities are generally valued on the basis of prices (including
evaluated prices) and quotations provided by pricing services or securities
dealers. Pricing services may use matrix pricing or valuation models, which
utilize certain inputs and assumptions, including, but not limited to, yield or
price with respect to comparable fixed income securities, to determine current
value. Pricing services generally value fixed income securities assuming orderly
transactions of an institutional round lot size, but the Fund may hold or
transact in such securities in smaller odd lot sizes. Odd lots may trade at
lower prices than institutional round lots.
Investments
in other open-end registered investment companies (if any), excluding
investments in ETFs, are valued based on the NAV of those open-end registered
investment companies (which may use fair value pricing as discussed in their
prospectuses). Investments in ETFs will generally be valued at the last sale
price or official closing price on the exchange on which they are principally
traded.
In
addition, the Investment Adviser, consistent with its procedures and applicable
regulatory guidance, may (but need not) determine to make an adjustment to the
previous closing prices of either domestic or foreign securities in light of
significant events, to reflect what it believes to be the fair value of the
securities at the time of determining the Fund’s NAV. Significant events that
could affect a large number of securities in a particular market may include,
but are not limited to: situations relating to one or more single issuers in a
market sector; significant fluctuations in U.S. or foreign markets; market
dislocations; market disruptions or unscheduled market closings; equipment
failures; natural or man-made disasters or acts of God; armed conflicts;
governmental actions or other developments; as well as the same or similar
events which may affect specific issuers or the securities markets even though
not tied directly to the securities markets. Other significant events that could
relate to a single issuer may include, but are not limited to: corporate actions
such as reorganizations, mergers and buy-outs; corporate announcements,
including those relating to earnings, products and regulatory news; significant
litigation; ratings downgrades; bankruptcies; and trading limits or
suspensions.
One effect
of using an independent third-party pricing (fair value) service and fair
valuation may be to reduce stale pricing arbitrage opportunities presented by
the pricing of Fund shares. However, it involves the risk that the values used
by the Fund to price its investments may be different from those used by other
investment companies and investors to price the same investments.
Please note
the following with respect to the price at which your transactions are
processed:
◼
NAV per
share of each share class is generally calculated by the Fund’s fund accounting
agent on each business day as of the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m. Eastern time) or such other times as the New
York Stock Exchange or NASDAQ market may officially close. Fund shares will
generally not be priced on any day the New York Stock Exchange is
closed.
◼
The Trust
reserves the right to reprocess purchase (including dividend reinvestments),
redemption and exchange transactions that were processed at a NAV that is
subsequently adjusted, and to recover amounts from (or distribute amounts to)
shareholders accordingly based on the official closing NAV, as
adjusted.
◼
The Trust
reserves the right to advance the time by which purchase and redemption orders
must be received for same business day credit as otherwise permitted by the
SEC.
Consistent
with industry practice, investment transactions not settling on the same day are
recorded and factored into the Fund’s NAV on the business day following trade
date (T+1). The use of T+1 accounting generally does not, but may, result in a
NAV that differs materially from the NAV that would result if all transactions
were reflected on their trade dates.
Note:
The time at which transactions and shares are priced and the time by which
orders must be received may be changed in case of an emergency or if regular
trading on the New York Stock Exchange is stopped at a time other than its
regularly scheduled closing time. In the event the New York Stock Exchange does
not open for business, the Trust may, but is not required to, open one or more
Funds for purchase, redemption and exchange transactions if the Federal Reserve
wire payment system is open. To learn whether the Fund is open for business
during this situation, please call the appropriate phone number located on the
back cover of the Prospectus.
39
Foreign
securities may trade in their local markets on days the Fund is closed. As a
result, if the Fund holds foreign securities, its NAV may be impacted on days
when investors may not purchase or redeem Fund shares.
The Fund
relies on various sources to calculate its NAV. The ability of the Fund’s fund
accounting agent to calculate the NAV per share of each share class of the Fund
is subject to operational risks associated with processing or human errors,
systems or technology failures, cyber attacks and errors caused by third party
service providers, data sources, or trading counterparties. Such failures may
result in delays in the calculation of the Fund’s NAV and/or the inability to
calculate NAV over extended time periods. The Fund may be unable to recover any
losses associated with such failures. In addition, if the third party service
providers and/or data sources upon which the Fund directly or indirectly relies
to calculate its NAV or price individual securities are unavailable or otherwise
unable to calculate the NAV correctly, it may be necessary for alternative
procedures to be utilized to price the securities at the time of determining the
Fund’s NAV.
|
How
To Sell Shares |
How Can I Sell Shares
Of The Fund?
Generally,
shares may be sold (redeemed) only through Goldman Sachs, the Trust Companies,
Ayco, or an Authorized Institution. Goldman Sachs, the Trust Companies, Ayco and
Authorized Institutions will normally give redemption instructions on behalf of
GS Clients to the Transfer Agent. On any business day the Fund is open, the Fund
will generally redeem its shares upon request at their next-determined NAV per
share after any of the Transfer Agent, Goldman Sachs, the Trust Companies, Ayco
or an Authorized Institution, as applicable, has received and accepted a
redemption order in proper form, as described under “How To Buy Shares—How Can I
Purchase Shares Of The Fund?” above. Redemptions may be requested by electronic
trading platform, in writing or by telephone (unless Goldman Sachs, the Trust
Companies, Ayco, or an Authorized Institution opts out of the telephone
redemption privilege on the account application). You should contact Goldman
Sachs, the Trust Companies, Ayco or your Authorized Institution, to discuss
redemptions and redemption proceeds. The Fund may transfer redemption proceeds
to an account with Goldman Sachs, the Trust Companies, Ayco, or your Authorized
Institution. In the alternative, Goldman Sachs, the Trust Companies, Ayco, or
your Authorized Institution may request that redemption proceeds be sent to you
by check or wire (if the wire instructions are designated in the current records
of the Transfer Agent).
When Do I Need A
Medallion Signature Guarantee To Redeem Shares?
Generally,
a redemption request must be in writing and signed by an authorized person with
a Medallion signature guarantee if:
◼
You would
like the redemption proceeds sent to an address that is not your address of
record; or
◼
You would
like the redemption proceeds sent to a domestic bank account that is not
designated in the current records of the Transfer Agent.
A Medallion
signature guarantee must be obtained from a bank, brokerage firm or other
financial intermediary that is a member of an approved Medallion Guarantee
Program or that is otherwise approved by the Trust. A notary public cannot
provide a Medallion signature guarantee. The written request may be confirmed by
telephone with both the requesting party and the designated Authorized
Institution to verify instructions. Additional documentation may be
required.
What Do I Need To
Know About Telephone Redemption Requests?
The Trust
and Goldman Sachs will not be liable for any loss or tax liability you may incur
in the event that the Trust accepts unauthorized telephone redemption requests
that the Trust reasonably believes to be genuine. The Trust may accept telephone
redemption instructions from any person identifying himself or herself as the
owner of an account or the owner’s registered representative where the owner has
not declined in writing to use this service. Goldman Sachs, the Trust Companies,
Ayco, or your Authorized Institution may submit redemption requests by telephone
on your behalf. Thus, you risk possible losses if a telephone redemption is not
authorized by you.
In an
effort to prevent unauthorized or fraudulent redemption and exchange requests by
telephone, Goldman Sachs and DST Asset Manager Solutions, Inc. (“DST”) each
employ reasonable procedures specified by the Trust to confirm that such
instructions are genuine. The following general policies are currently in
effect:
◼
Telephone
requests are recorded.
◼
Proceeds of
telephone redemption requests will be sent to your address of record or
authorized account designated in the current records of the Transfer Agent
(unless you provide written instructions and a Medallion signature guarantee
indicating another address or account).
◼
For the
30-day period following a change of address, telephone redemptions will only be
filled by a wire transfer to the authorized account designated in the current
records of the Transfer Agent (see immediately preceding bullet point). In order
to receive the redemption by check during this time period, the redemption
request must be in the form of a written, Medallion signature guaranteed
letter.
40
Shareholder
Guide
◼
The
telephone redemption option does not apply to shares held in an account
maintained and serviced by your Authorized Institution. If your shares are held
in an account with an Authorized Institution, you should contact your registered
representative of record, who may make telephone redemptions on your
behalf.
◼
The
telephone redemption option may be modified or terminated at any time without
prior notice.
Note:
It may be difficult to make telephone redemptions in times of unusual economic
or market conditions.
How Are Redemption
Proceeds Paid?
By
Wire: You may
arrange for your redemption proceeds to be paid as federal funds to an account
with Goldman Sachs, the Trust Companies, Ayco, or your Authorized Institution or
to a domestic bank account designated in the current records of the Transfer
Agent. In addition, redemption proceeds may be transmitted through an electronic
trading platform to an account with Goldman Sachs, the Trust Companies, Ayco, or
your Authorized Institution. The following general policies govern wiring
redemption proceeds:
◼
Redemption
proceeds will normally be paid in federal funds, between one and two business
days (or such other times in accordance with the requirements of Goldman Sachs,
the Trust Companies, Ayco, or your Authorized Institution) following receipt of
a properly executed wire transfer redemption request. In certain circumstances,
however (such as unusual market conditions or in cases of very large redemptions
or excessive trading), it may take up to seven days to pay redemption
proceeds.
◼
Redemption
requests may only be postponed or suspended for longer than seven days as
permitted under Section 22(e) of the Investment Company Act of 1940 (the
“Investment Company Act”) if (i) the New York Stock Exchange is closed for
trading or trading is restricted; (ii) an emergency exists which makes the
disposal of securities owned by the Fund or the fair determination of the value
of the Fund’s net assets not reasonably practicable; or (iii) the SEC, by order
or regulation, permits the suspension of the right of redemption.
◼
If you are
selling shares you recently paid for by check, the Fund will pay you when your
check has cleared, which may take up to 15 days.
◼
If the
Federal Reserve Bank is closed on the day that the redemption proceeds would
ordinarily be wired, wiring the redemption proceeds may be delayed until the
Federal Reserve Bank reopens.
◼
To change
the bank wiring instructions designated in the current records of the Transfer
Agent, you must send written instructions signed by an authorized person
designated in the current records of the Transfer Agent. A Medallion signature
guarantee may be required if you are requesting a redemption in conjunction with
the change.
◼
None of the
Trust, the Investment Adviser or the Transfer Agent assumes any responsibility
for the performance of your bank, Goldman Sachs, the Trust Companies, Ayco, or
Authorized Institution in the transfer process. If a problem with such
performance arises, you should deal directly with your bank, Goldman Sachs, the
Trust Companies, Ayco, or Authorized Institution.
By
Check: You may
elect to receive your redemption proceeds by check. Redemption proceeds paid by
check will normally be mailed to the address of record within two business days
(or such other times in accordance with the requirements of your Authorized
Institution) following receipt of a properly executed redemption request, except
in certain circumstances (such as those set forth above with respect to wire
transfer redemption requests). If you are selling shares you recently paid for
by check, the Fund will pay you when your check has cleared, which may take up
to 15 days.
What Else Do I Need
To Know About Redemptions?
The
following generally applies to redemption requests:
◼
Additional
documentation may be required when deemed appropriate by the Transfer Agent. A
redemption request will not be in proper form until such additional
documentation has been received.
◼
Goldman
Sachs, the Trust Companies, Ayco and Authorized Institutions are responsible for
the timely transmittal of redemption requests by GS Clients to the Transfer
Agent. In order to facilitate the timely transmittal of redemption requests,
Goldman Sachs, the Trust Companies, Ayco and Authorized Institutions may set
times by which they must receive redemption requests. Goldman Sachs, the Trust
Companies, Ayco or Authorized Institutions may also require additional
documentation from you.
◼
As
disclosed above, if you are a GS Client and propose to transfer your shares to
another institution for any reason, you may be required to either redeem your
shares of the Fund or if available, you may be able to choose to
exchange your shares of the Fund for a different share class offered
by the Fund, which may be offered in another Prospectus.
The Trust
reserves the right to:
◼
Redeem your
shares in the event any of Goldman Sachs, the Trust Companies, Ayco or your
Authorized Institution is no longer authorized to offer Class P
Shares.
◼
Redeem your
shares in the case of actual or suspected threatening conduct or actual or
suspected fraudulent, suspicious or illegal activity by you or any other
individual associated with your account.
◼
Subject to
applicable law, redeem your shares in other circumstances determined by the
Board of Trustees to be in the best interest of the Trust.
41
◼
Pay
redemptions by a distribution in-kind of securities (instead of cash). If you
receive redemption proceeds in-kind, you should expect to incur transaction
costs upon the disposition of those securities. In addition, if you receive
redemption proceeds in-kind, you will be subject to market gains or losses upon
the disposition of those securities.
◼
Reinvest
any amounts (e.g., dividends, distributions or redemption proceeds) which you
have elected to receive by check should your check remain uncashed for more than
180 days. No interest will accrue on amounts represented by uncashed checks.
Your check will be reinvested in your account at the NAV on the day of the
reinvestment. When reinvested, those amounts are subject to the risk of loss
like any Fund investment. If you elect to receive distributions in cash and a
check remains uncashed for more than 180 days, your cash election may be changed
automatically to reinvest and your future dividend and capital gains
distributions will be reinvested in the Fund at the NAV as of the date of
payment of the distribution. This provision may not apply to certain retirement
or qualified accounts, accounts with a non-U.S. address or closed accounts. Your
participation in a systematic withdrawal program may be terminated if a check
remains uncashed.
◼
Charge an
additional fee in the event a redemption is made via wire transfer.
◼
Terminate
your account if you are no longer a GS Client, or otherwise no longer eligible
to invest in Class P Shares of the Fund.
The Fund
typically expects to meet redemption requests by using holdings of cash or cash
equivalents and/or proceeds from the sale of portfolio holdings. In addition,
under stressed market conditions, as well as for other temporary or emergency
purposes, the Fund may distribute redemption proceeds in-kind (instead of cash),
access a line of credit or overdraft facility, or borrow through other sources
to meet redemption requests.
None of the
Trust, the Investment Adviser, Goldman Sachs, the Trust Companies, Ayco or an
Authorized Institution will be responsible for any loss in an investor’s account
or tax liability resulting from an involuntary redemption.
Can I Exchange My
Investment From One Goldman Sachs Fund To Another Goldman Sachs
Fund?
You may
exchange your shares at NAV at the time of exchange for Class P Shares of
another Goldman Sachs Fund. The exchange privilege may be materially modified or
withdrawn at any time upon 60 days’ written notice. You should contact Goldman
Sachs, the Trust Companies, Ayco or your Authorized Institution to arrange for
the exchange of your shares for Class P Shares of another Goldman Sachs Fund. If
you propose to transfer your Class P Shares to another institution for any
reason, you may be required to either redeem your shares of the Fund or if
available, you may be able to choose to exchange your shares of the Fund for a
different share class offered by the Fund or another Goldman Sachs Fund, which
may be offered in another Prospectus. For more information, please see “How to
Sell Shares—What Else Do I Need to Know About Redemptions?” The shares you
receive in any exchange are subject to different (and possibly higher) fees and
expenses (which affect performance).
You should
keep in mind the following factors when making or considering an
exchange:
◼
You should
obtain and carefully read the prospectus of the Goldman Sachs Fund you are
acquiring before making an exchange. You should be aware that not all Goldman
Sachs Funds may offer all share classes.
◼
Currently,
the Fund does not impose any charge for exchanges, although the Fund may impose
a charge in the future.
◼
All
exchanges which represent an initial investment in a Goldman Sachs Fund must
satisfy the minimum initial investment requirement of that Fund. This
requirement may be waived at the discretion of the Trust. Exchanges into a
Goldman Sachs Fund need not meet the traditional minimum investment requirement
for that Fund if the entire balance of the original Fund account is
exchanged.
◼
Exchanges
are available only in states where exchanges may be legally made.
◼
It may be
difficult to make telephone exchanges in times of unusual economic or market
conditions.
◼
Goldman
Sachs and DST may use reasonable procedures described above in “How To Sell
Shares—What Do I Need To Know About Telephone Redemption Requests?” in an effort
to prevent unauthorized or fraudulent telephone exchange requests.
◼
Normally, a
telephone exchange will be made only to an identically registered
account.
◼
Exchanges
into Goldman Sachs Funds or certain share classes of Goldman Sachs Funds that
are closed to new investors may be restricted.
For federal
income tax purposes, an exchange from one Goldman Sachs Fund to another is
treated as a redemption of the shares surrendered in the exchange, on which you
may be subject to tax, followed by a purchase of shares received in the
exchange. You should consult your tax adviser concerning the tax consequences of
an exchange.
|
Shareholder
Services |
Can My Distributions
From The Fund Be Invested In Other Goldman Sachs Funds?
You may
elect to cross-reinvest distributions paid by a Goldman Sachs Fund in shares of
the same class of other Goldman Sachs Funds.
◼
Shares will
be purchased at NAV.
42
Shareholder
Guide
◼
You may
elect cross-reinvestment into an identically registered account or a similarly
registered account provided that at least one name on the account is registered
identically.
◼
You cannot
make cross-reinvestments into a Goldman Sachs Fund unless that Fund’s minimum
initial investment requirement is met.
◼
You should
obtain and read the prospectus of the Goldman Sachs Fund into which
distributions are invested.
What Types Of Reports
Will I Be Sent Regarding My Investment?
Each of
Goldman Sachs, the Trust Companies, Ayco or an Authorized Institution is
responsible for providing any communication from the Fund to shareholders,
including but not limited to, prospectuses, prospectus supplements, proxy
materials and notices regarding the source of dividend payments under Section 19
of the Investment Company Act. They may charge additional fees not described in
the Prospectus to GS Clients for such services.
Goldman
Sachs, the Trust Companies, Ayco or an Authorized Institution will provide you
with a printed confirmation of each transaction in your account and a monthly
account statement.
You will
also receive an annual shareholder report containing audited financial
statements and a semi-annual shareholder report. If you have consented to the
delivery of a single copy of shareholder reports, prospectuses and other
information to all shareholders who share the same mailing address with your
account, you may revoke your consent at any time by contacting Goldman Sachs,
the Trust Companies, Ayco or your Authorized Institution. The Fund will begin
sending individual copies to you within 30 days after receipt of your
revocation.
|
Restrictions
on Excessive Trading
Practices |
Policies
and Procedures on Excessive Trading Practices. In
accordance with the policy adopted by the Board of Trustees, the Trust
discourages frequent purchases and redemptions of Fund shares and does not
permit market timing or other excessive trading practices. Purchases and
exchanges should be made with a view to longer-term investment purposes only
that are consistent with the investment policies and practices of the respective
Fund. Excessive, short-term (market timing) trading practices may disrupt
portfolio management strategies, increase brokerage and administrative costs,
harm Fund performance and result in dilution in the value of Fund shares held by
longer-term shareholders. The Trust and Goldman Sachs reserve the right to
reject or restrict purchase or exchange requests from any investor. The Trust
and Goldman Sachs will not be liable for any loss resulting from rejected
purchase or exchange orders. To minimize harm to the Trust and its shareholders
(or Goldman Sachs), the Trust (or Goldman Sachs) will exercise this right if, in
the Trust’s (or Goldman Sachs’) judgment, an investor has a history of excessive
trading or if an investor’s trading, in the judgment of the Trust (or Goldman
Sachs), has been or may be disruptive to the Fund. In making this judgment,
trades executed in multiple accounts under common ownership or control may be
considered together to the extent they can be identified. No waivers of the
provisions of the policy established to detect and deter market timing and other
excessive trading activity are permitted that would harm the Trust or its
shareholders or would subordinate the interests of the Trust or its shareholders
to those of Goldman Sachs or any affiliated person or associated person of
Goldman Sachs.
As a
deterrent to excessive trading, many foreign equity securities held by the
Goldman Sachs Funds are priced by an independent pricing service using fair
valuation. For more information on fair valuation, please see “How To Buy
Shares—How Are Shares Priced?”
Pursuant to
the policy adopted by the Board of Trustees of the Trust, Goldman Sachs has
developed criteria that it uses to identify trading activity that may be
excessive. Excessive trading activity in the Fund is measured by the number of
“round trip” transactions in a shareholder’s account. A “round trip” includes a
purchase or exchange into the Fund followed or preceded by a redemption or
exchange out of the same Fund. If the Fund detects that a shareholder has
completed two or more round trip transactions in a single Fund within a rolling
90-day period, the Fund may reject or restrict subsequent purchase or exchange
orders by that shareholder permanently. In addition, the Fund may, in its sole
discretion, permanently reject or restrict purchase or exchange orders by a
shareholder if the Fund detects other trading activity that is deemed to be
disruptive to the management of the Fund or otherwise harmful to the Fund. For
purposes of these transaction surveillance procedures, the Fund may consider
trading activity in multiple accounts under common ownership, control, or
influence. A shareholder that has been restricted from participation in the Fund
pursuant to this policy will be allowed to apply for re-entry after one year. A
shareholder applying for re-entry must provide assurances acceptable to the Fund
that the shareholder will not engage in excessive trading activities in the
future.
Goldman
Sachs may modify its surveillance procedures and criteria from time to time
without prior notice regarding the detection of excessive trading or to address
specific circumstances. Goldman Sachs will apply the criteria in a manner that,
in Goldman Sachs’ judgment, will be uniform.
Fund shares
may be held through omnibus arrangements maintained by Goldman Sachs, the Trust
Companies, Ayco or Authorized Institutions. Omnibus accounts include multiple
investors and such accounts typically provide the Fund with a net purchase or
redemption request on any given day where the purchases and redemptions of Fund
shares by the investors are netted against one
43
another.
The identity of individual investors whose purchase and redemption orders are
aggregated are ordinarily not tracked by the Fund on a regular basis. Goldman
Sachs, the Trust Companies, Ayco or an Authorized Institution may not have the
capability or may not be willing to apply the Fund’s market timing policies.
While Goldman Sachs, the Trust Companies and Ayco may monitor share turnover at
the omnibus account level, the Fund’s ability to monitor and detect market
timing by shareholders in these omnibus accounts may be limited in certain
circumstances, and certain Authorized Institutions may charge the Fund a fee for
providing certain shareholder financial information requested as part of the
Fund’s surveillance process. The netting effect makes it more difficult to
identify, locate and eliminate market timing activities. In addition, those
investors who engage in market timing and other excessive trading activities may
employ a variety of techniques to avoid detection. There can be no assurance
that the Fund, Goldman Sachs, the Trust Companies and Ayco will be able to
identify all those who trade excessively or employ a market timing strategy, and
curtail their trading in every instance. If necessary, the Trust may prohibit
additional purchases of Fund shares by an Authorized Institution or by certain
clients of the Authorized Institution. Authorized Institutions may also monitor
trading activities by their clients in the Fund. The criteria used by Authorized
Institutions to monitor for excessive trading may differ from the criteria used
by the Fund. If an Authorized Institution fails to cooperate in the
implementation or enforcement of the Trust’s excessive trading policies, the
Trust may take certain actions including terminating the
relationship.
44
Taxation
As with any
investment, you should consider how your investment in the Fund will be taxed.
The tax information below is provided as general information. More tax
information is available in the SAI. You should consult your tax adviser about
the federal, state, local or foreign tax consequences of your investment in the
Fund. Except as otherwise noted, the tax information provided assumes that you
are a U.S. citizen or resident.
Unless your
investment is through an Employee Benefit Plan or other tax-advantaged account,
you should carefully consider the possible tax consequences of Fund
distributions and the sale of your Fund shares.
|
DISTRIBUTIONS |
The Fund
contemplates declaring as dividends each year all or substantially all of its
taxable income. Distributions you receive from the Fund are generally
subject to federal income tax, and may also be subject to state or local taxes.
This is true whether you reinvest your distributions in additional Fund shares
or receive them in cash. For federal tax purposes, the Fund's distributions
attributable to net investment income and short-term capital gains are
taxable to you as ordinary income, while any distributions of long-term capital
gains are taxable to you as long-term capital gains, no matter how long you have
owned your Fund shares.
Under
current provisions of the Code, the maximum individual rate applicable to
long-term capital gains is generally either 15% or 20%, depending on whether the
individual's income exceeds certain threshold amounts. Also, Fund distributions
to noncorporate shareholders attributable to dividends received by the Fund from
U.S. and certain qualified foreign corporations will generally be taxed at the
long-term capital gain rate, as long as certain other requirements are met. For
these lower rates to apply, the non-corporate shareholder must own the relevant
Fund shares for at least 61 days during the 121-day period beginning 60 days
before the Fund’s ex-dividend date. The amount of the Fund’s distributions
that would otherwise qualify for this favorable tax treatment will be reduced as
a result of the Fund’s securities lending activities or high portfolio
turnover rate.
Distributions
in excess of the Fund’s current and accumulated earnings and profits are
treated as a tax-free return of your investment to the extent of your basis in
the shares, and generally as capital gain thereafter. A return of capital, which
for tax purposes is treated as a return of your investment, reduces your basis
in shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition of shares. A distribution will reduce the Fund’s NAV per share
and may be taxable to you as ordinary income or capital gain even though, from
an economic standpoint, the distribution may constitute a return of
capital.
An
additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from the
Fund and net gains from redemptions or other taxable dispositions of Fund
shares) of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds certain threshold
amounts.
The Fund’s
transactions in derivatives (such as futures contracts and swaps) will be
subject to special tax rules, the effect of which may be to accelerate income to
the Fund, defer losses to the Fund, cause adjustments in the holding periods of
the Fund’s securities and convert short-term capital losses into long-term
capital losses. These rules could therefore affect the amount, timing and
character of distributions to you. The Fund’s use of derivatives may result
in the Fund realizing more short-term capital gains and ordinary income subject
to tax at ordinary income tax rates than it would if it did not use
derivatives.
Although
distributions are generally treated as taxable to you in the year they are paid,
distributions declared in October, November or December but paid in January are
taxable as if they were paid in December. A percentage of the Fund’s dividends
paid to corporate shareholders may be eligible for the corporate
dividends-received deduction. This percentage may, however, be reduced as a
result of the Fund’s securities lending activities or by a high portfolio
turnover rate. Character and tax status of all distributions will be available
to shareholders after the close of each calendar year.
The Fund
may be subject to foreign withholding or other foreign taxes on income or gain
from certain foreign securities. In general, the Fund may deduct these taxes in
computing its taxable income.
If you buy
shares of the Fund before it makes a distribution, the distribution will be
taxable to you even though it may actually be a return of a portion of your
investment. This is known as “buying into a dividend.”
|
SALES
AND EXCHANGES |
Your sale
of Fund shares is a taxable transaction for federal income tax purposes, and may
also be subject to state and local taxes. For tax purposes, the exchange of your
Fund shares for shares of a different Goldman Sachs Fund is the same as a sale.
When you sell your shares, you will generally recognize a capital gain or loss
in an amount equal to the difference between your adjusted tax basis in the
shares and the amount received. Generally, this capital gain or loss is
long-term or short-term depending on whether your holding
45
period
exceeds twelve months, except that any loss realized on shares held for six
months or less will be treated as a long-term capital loss to the extent of any
capital gain dividends that were received on the shares. Additionally, any loss
realized on a sale, exchange or redemption of shares of the Fund may be
disallowed under “wash sale” rules to the extent the shares disposed of are
replaced with other shares of that Fund within a period of 61 days beginning 30
days before and ending 30 days after the shares are disposed of, such as
pursuant to a dividend reinvestment in shares of that Fund. If disallowed, the
loss will be reflected in an adjustment to the basis of the shares
acquired.
|
OTHER
INFORMATION |
When you
open your account, you should provide your Social Security Number or tax
identification number on your account application. By law, the Fund must
withhold 24% of your taxable distributions and any redemption proceeds if you do
not provide your correct taxpayer identification number, or certify that it is
correct, or if the Internal Revenue Service (“IRS”) instructs the Fund to do
so.
The Fund is
required to report to you and the IRS annually on Form 1099-B not only the gross
proceeds of Fund shares you sell or redeem but also, for shares purchased on or
after January 1, 2012, their cost basis. Cost
basis will be calculated using the Fund’s default method of average cost, unless
you instruct the Fund to use a different methodology. If you
would like to use the average cost method of calculation, no action is required.
To elect an alternative method, you should contact Goldman Sachs Funds at the
address or phone number on the back cover of the Prospectus. If your account is
held with an intermediary, contact your representative with respect to reporting
of cost basis and available elections for your account.
You should
carefully review the cost basis information provided by the Fund and make any
additional basis, holding period or other adjustments that are required when
reporting these amounts on your federal income tax returns.
Non-U.S.
investors are generally subject to U.S. withholding tax and may be subject to
estate tax with respect to their Fund shares. However, withholding is generally
not required on properly designated distributions to non-U.S. investors of
long-term capital gains. Non-U.S. investors generally are not subject to U.S.
federal income tax withholding on certain distributions of interest income
and/or short-term capital gains that are designated by the Fund. It is
expected that the Fund will generally make designations of short-term gains, to
the extent permitted, but the Fund does not intend to make designations of any
distributions attributable to interest income. Therefore, all distributions of
interest income will be subject to withholding when paid to non-U.S.
investors.
The Fund is
required to withhold U.S. tax (at a 30% rate) on payments of dividends made to
certain non-U.S. entities that fail to comply (or be deemed compliant) with
extensive reporting and withholding requirements designed to inform the U.S.
Department of the Treasury of U.S.-owned foreign investment accounts.
Shareholders may be requested to provide additional information to enable the
Fund to determine whether withholding is required.
46
Appendix
A
Additional
Information on Portfolio Risks, Securities and Techniques
|
A. General
Portfolio Risks |
The Funds
will be subject to the risks associated with equity investments. “Equity
investments” may include common stocks, preferred stocks, interests in REITs,
convertible debt obligations, convertible preferred stocks, equity interests in
trusts, partnerships, joint ventures, limited liability companies and similar
enterprises, MLPs, other investment companies (including ETFs), warrants, stock
purchase rights and synthetic and derivative instruments (such as swaps and
futures contracts) that have economic characteristics similar to equity
securities. In general, the values of equity investments fluctuate in response
to the activities of individual companies and in response to general market and
economic conditions. Accordingly, the values of the equity investments that a
Fund holds may decline over short or extended periods. The stock markets tend to
be cyclical, with periods when stock prices generally rise and periods when
prices generally decline. This volatility means that the value of your
investment in the Funds may increase or decrease. In recent years, certain stock
markets have experienced substantial price volatility. To the extent a Fund’s
net assets decrease or increase in the future due to price volatility or share
redemption or purchase activity, the Fund’s expense ratio may correspondingly
increase or decrease from the expense ratio disclosed in the
Prospectus.
To the
extent a Fund invests in pooled investment vehicles (including investment
companies and ETFs), partnerships and REITs, the Fund will be affected by the
investment policies, practices and performance of such entities in direct
proportion to the amount of assets the Fund invests therein.
To the
extent that a Fund invests in fixed income securities, that Fund will also be
subject to the risks associated with its fixed income securities. These risks
include interest rate risk, credit/default risk and call/extension risk. In
general, interest rate risk involves the risk that when interest rates decline,
the market value of fixed income securities tends to increase (although many
mortgage-related securities will have less potential than other debt securities
for capital appreciation during periods of declining rates). Conversely, when
interest rates increase, the market value of fixed income securities tends to
decline. Credit/default risk involves the risk that an issuer or guarantor could
default on its obligations, and a Fund will not recover its investment. Call
risk and extension risk are normally present in mortgage-backed securities and
asset-backed securities. For example, homeowners have the option to prepay their
mortgages. Therefore, the duration of a security backed by home mortgages can
either shorten (call risk) or lengthen (extension risk). In general, if interest
rates on new mortgage loans fall sufficiently below the interest rates on
existing outstanding mortgage loans, the rate of prepayment would be expected to
increase. Conversely, if mortgage loan interest rates rise above the interest
rates on existing outstanding mortgage loans, the rate of prepayment would be
expected to decrease. In either case, a change in the prepayment rate can result
in losses to investors. The same would be true of asset-backed securities such
as securities backed by car loans.
A rising
interest rate environment could cause the value of a Fund’s fixed income
securities to decrease, and fixed income markets to experience increased
volatility in addition to heightened levels of liquidity risk. Additionally,
decreases in the value of fixed income securities could lead to increased
shareholder redemptions, which could impair a Fund’s ability to achieve its
investment objective. The risks associated with increasing interest rates are
heightened given that interest rates are near historic lows, but may be expected
to increase in the future with unpredictable effects on the markets and a Fund’s
investments.
Certain of
the Funds may invest in non-investment grade fixed income securities (commonly
known as “junk bonds”), which are rated below investment grade (or determined to
be of comparable credit quality, if not rated) at the time of purchase and are
therefore considered speculative. Because non-investment grade fixed income
securities are issued by issuers with low credit ratings, they pose a greater
risk of default than investment grade securities.
The
Investment Adviser will not consider the portfolio turnover rate a limiting
factor in making investment decisions for a Fund. A high rate of portfolio
turnover (100% or more) involves correspondingly greater expenses which must be
borne by a Fund and its shareholders, and is also likely to result in higher
short-term capital gains taxable to certain shareholders. The portfolio turnover
rate is calculated by dividing the lesser of the dollar amount of sales or
purchases of portfolio securities by the average monthly value of a Fund’s
portfolio securities, excluding securities having a maturity at the date of
purchase of one year or less. See “Financial Highlights” in Appendix B for a
statement of the Funds’ historical portfolio turnover rates.
The Funds
may, from time to time, enter into arrangements with certain brokers or other
counterparties that require the segregation of collateral. For operational, cost
or other reasons, when setting up arrangements relating to the
execution/clearing of trades, a Fund may choose to select a segregation model
which may not be the most protective option available in the case of a default
by a broker or counterparty.
47
The
following sections provide further information on certain types of securities
and investment techniques that may be used by the Funds, including their
associated risks. Additional information is provided in the SAI, which is
available upon request. Among other things, the SAI describes certain
fundamental investment restrictions that cannot be changed without shareholder
approval. You should note, however, that all investment objectives and all
investment policies not specifically designated as fundamental are
non-fundamental, and may be changed without shareholder approval. If there is a
change in a Fund’s investment objective, you should consider whether that Fund
remains an appropriate investment in light of your then current financial
position and needs.
|
B.
Other Portfolio Risks |
Risks
of Investing in Mid-Capitalization and Small-Capitalization
Companies. Each Fund
may, to the extent consistent with its investment policies, invest in mid- and
small-capitalization companies. Investments in mid- and small-capitalization
companies involve greater risk and portfolio price volatility than investments
in larger capitalization stocks. Among the reasons for the greater price
volatility of these investments are the less certain growth prospects of smaller
firms and the lower degree of liquidity in the markets for such securities. Mid-
and small-capitalization companies may be thinly traded and may have to be sold
at a discount from current market prices or in small lots over an extended
period of time. In addition, these securities are subject to the risk that
during certain periods the liquidity of particular issuers or industries, or all
securities in particular investment categories, will shrink or disappear
suddenly and without warning as a result of adverse economic or market
conditions, or adverse investor perceptions whether or not accurate. Because of
the lack of sufficient market liquidity, a Fund may incur losses because it will
be required to effect sales at a disadvantageous time and only then at a
substantial drop in price. Mid- and small-capitalization companies include
“unseasoned” issuers that do not have an established financial history; often
have limited product lines, markets or financial resources; may depend on or use
a few key personnel for management; and may be susceptible to losses and risks
of bankruptcy. Mid- and small-capitalization companies may be operating at a
loss or have significant variations in operating results; may be engaged in a
rapidly changing business with products subject to a substantial risk of
obsolescence; may require substantial additional capital to support their
operations, to finance expansion or to maintain their competitive position; and
may have substantial borrowings or may otherwise have a weak financial
condition. In addition, these companies may face intense competition, including
competition from companies with greater financial resources, more extensive
development, manufacturing, marketing, and other capabilities, and a larger
number of qualified managerial and technical personnel. Transaction costs for
these investments are often higher than those of larger capitalization
companies. Investments in mid- and small-capitalization companies may be more
difficult to price precisely than other types of securities because of their
characteristics and lower trading volumes.
Risks
of Foreign Investments. The Funds
may make foreign investments. Foreign investments involve special risks that are
not typically associated with U.S. dollar denominated or quoted securities of
U.S. issuers. Foreign investments may be affected by changes in currency rates,
changes in foreign or U.S. laws or restrictions applicable to such investments
and changes in exchange control regulations (e.g., currency
blockage). A decline in the exchange rate of the currency (i.e.,
weakening of the currency against the U.S. dollar) in which a portfolio security
is quoted or denominated relative to the U.S. dollar would reduce the value of
the portfolio security. In addition, if the currency in which a Fund receives
dividends, interest or other payments declines in value against the U.S. dollar
before such income is distributed as dividends to shareholders or converted to
U.S. dollars, the Fund may have to sell portfolio securities to obtain
sufficient cash to pay such dividends.
Certain
foreign markets may rely heavily on particular industries or foreign capital and
are more vulnerable to diplomatic developments, the imposition of economic
sanctions against a particular country or countries, organizations, entities
and/or individuals, changes in international trading patterns, trade barriers,
and other protectionist or retaliatory measures. International trade barriers or
economic sanctions against foreign countries, organizations, entities and/or
individuals may adversely affect a Fund’s foreign holdings or
exposures.
Brokerage
commissions, custodial services and other costs relating to investment in
international securities markets generally are more expensive than in the United
States. In addition, clearance and settlement procedures may be different in
foreign countries and, in certain markets, such procedures have been unable to
keep pace with the volume of securities transactions, thus making it difficult
to conduct such transactions.
Foreign
issuers are not generally subject to uniform accounting, auditing and financial
reporting standards comparable to those applicable to U.S. issuers. There may be
less publicly available information about a foreign issuer than about a U.S.
issuer. In addition, there is generally less government regulation of foreign
markets, companies and securities dealers than in the United States, and the
legal remedies for investors may be more limited than the remedies available in
the United States. Foreign securities markets may have substantially less volume
than U.S. securities markets and securities of many foreign issuers are less
liquid and more volatile than securities of comparable domestic issuers.
Furthermore, with respect to certain foreign countries, there is a possibility
of nationalization, expropriation or confiscatory taxation, imposition of
withholding or other taxes on dividend or interest payments (or, in some cases,
capital gains distributions), limitations on the removal of funds or other
assets from such countries, and risks of political or social instability or
diplomatic developments which could adversely affect investments in those
countries.
48
Appendix
A
Certain
foreign investments may become less liquid in response to social, political or
market developments or adverse investor perceptions, or become illiquid after
purchase by the Fund, particularly during periods of market turmoil. Certain
foreign investments may become illiquid when, for instance, there are few, if
any, interested buyers and sellers or when dealers are unwilling to make a
market for certain securities. When a Fund holds illiquid investments, its
portfolio may be harder to value, especially in changing markets.
If a Fund
focuses its investments in one or a few countries and currencies, the Fund may
be subjected to greater risks than if a Fund’s assets were not geographically
focused.
Investments
in foreign securities may take the form of sponsored and unsponsored American
Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”). The Funds
may also invest in European Depositary Receipts (“EDRs”) or other similar
instruments representing securities of foreign issuers. ADRs, GDRs and EDRs
represent the right to receive securities of foreign issuers deposited in a bank
or other depository. ADRs and certain GDRs are traded in the United States. GDRs
may be traded in either the United States or in foreign markets. EDRs are traded
primarily outside the United States. Prices of ADRs are quoted in U.S. dollars.
EDRs and GDRs are not necessarily quoted in the same currency as the underlying
security.
Risks
of Sovereign Debt. Investment
in sovereign debt obligations by a Fund involves risks not present in debt
obligations of corporate issuers. The issuer of the debt or the governmental
authorities that control the repayment of the debt may be unable or unwilling to
repay principal or interest when due in accordance with the terms of such debt,
and a Fund may have limited recourse to compel payment in the event of a
default. Periods of economic uncertainty may result in the volatility of market
prices of sovereign debt, and in turn a Fund’s NAV, to a greater extent than the
volatility inherent in debt obligations of U.S. issuers.
A sovereign
debtor’s willingness or ability to repay principal and pay interest in a timely
manner may be affected by, among other factors, its cash flow situation, the
extent of its foreign currency reserves, the availability of sufficient foreign
exchange on the date a payment is due, the relative size of the debt service
burden to the economy as a whole, the sovereign debtor’s policy toward
international lenders, and the political constraints to which a sovereign debtor
may be subject.
Risks
of Emerging Countries. The Funds
may invest in securities of issuers located in, or otherwise economically tied
to, emerging countries. The risks of foreign investment are heightened when the
issuer is located in an emerging country. Emerging countries are generally
located in Africa, Asia, the Middle East, Eastern and Central Europe, and
Central and South America. A Fund’s purchase and sale of portfolio securities in
certain emerging countries may be constrained by limitations relating to daily
changes in the prices of listed securities, periodic trading or settlement
volume and/or limitations on aggregate holdings of foreign investors. Such
limitations may be computed based on the aggregate trading volume by or holdings
of a Fund, the Investment Adviser, its affiliates and their respective clients
and other service providers. A Fund may not be able to sell securities in
circumstances where price, trading or settlement volume limitations have been
reached.
Foreign
investment in the securities markets of certain emerging countries is restricted
or controlled to varying degrees which may limit investment in such countries or
increase the administrative costs of such investments. For example, certain
Asian countries require governmental approval prior to investments by foreign
persons or limit investment by foreign persons to only a specified percentage of
an issuer’s outstanding securities or a specific class of securities which may
have less advantageous terms (including price) than securities of the issuer
available for purchase by nationals. In addition, certain countries may restrict
or prohibit investment opportunities in issuers or industries deemed important
to national interests. Such restrictions may affect the market price, liquidity
and rights of securities that may be purchased by a Fund. The repatriation of
investment income, capital or the proceeds of securities sales from certain
emerging countries is subject to restrictions such as the need for governmental
consents, which may make it difficult for a Fund to invest in such emerging
countries. A Fund could be adversely affected by delays in, or a refusal to
grant, any required governmental approval for such repatriation. In situations
where a country restricts direct investment in securities (which may occur in
certain Asian and other countries), a Fund may invest in such countries through
other investment funds in such countries.
Emerging
market countries may have more or less government regulation and generally do
not impose as extensive and frequent accounting, auditing, financial and other
reporting requirements as the securities markets of more developed countries.
The degree of cooperation between issuers in emerging and frontier market
countries with foreign and U.S. financial regulators may vary significantly.
Accordingly, regulators may not have sufficient access to audit and oversee
issuers, and there could be less information available about issuers in certain
emerging market countries. As a result, the Investment Adviser’s ability to
evaluate local companies or their potential impact on the Fund’s performance
could be inhibited.
Many
emerging countries have experienced currency devaluations and substantial (and,
in some cases, extremely high) rates of inflation. Other emerging countries have
experienced economic recessions. These circumstances have had a negative effect
on the economies and securities markets of such emerging countries. Economies in
emerging countries generally are dependent heavily upon commodity prices and
international trade and, accordingly, have been and may continue to be affected
adversely by the economies of their trading partners, trade barriers, exchange
controls, managed adjustments in relative currency values and other
protectionist measures imposed or negotiated by the countries with which they
trade.
49
Many
emerging countries are subject to a substantial degree of economic, political
and social instability. Governments of some emerging countries are authoritarian
in nature or have been installed or removed as a result of military coups, while
governments in other emerging countries have periodically used force to suppress
civil dissent. Disparities of wealth, the pace and success of democratization,
and ethnic, religious and racial disaffection, among other factors, have also
led to social unrest, violence and/or labor unrest in some emerging countries.
Unanticipated political or social developments may result in sudden and
significant investment losses. Investing in emerging countries involves greater
risk of loss due to expropriation, nationalization, confiscation of assets and
property or the imposition of restrictions on foreign investments and on
repatriation of capital invested. As an example, in the past, some Eastern
European governments have expropriated substantial amounts of private property,
and many claims of the property owners have never been fully settled. There is
no assurance that similar expropriations will not occur in other
countries.
A Fund’s
investment in emerging countries may also be subject to withholding or other
taxes, which may be significant and may reduce the return to the Fund from an
investment in issuers in such countries.
Settlement
procedures in emerging countries are frequently less developed and reliable than
those in the United States and may involve a Fund’s delivery of securities
before receipt of payment for their sale. In addition, significant delays may
occur in certain markets in registering the transfer of securities. Settlement
or registration problems may make it more difficult for a Fund to value its
portfolio securities and could cause the Fund to miss attractive investment
opportunities, to have a portion of its assets uninvested or to incur losses due
to the failure of a counterparty to pay for securities the Fund has delivered or
the Fund’s inability to complete its contractual obligations because of theft or
other reasons.
The
creditworthiness of the local securities firms used by a Fund in emerging
countries may not be as sound as the creditworthiness of firms used in more
developed countries. As a result, the Fund may be subject to a greater risk of
loss if a securities firm defaults in the performance of its
responsibilities.
The small
size and inexperience of the securities markets in certain emerging countries
and the limited volume of trading in securities in those countries may make a
Fund’s investments in such countries less liquid and more volatile than
investments in countries with more developed securities markets (such as the
United States, Japan and most Western European countries). A Fund’s investments
in emerging countries are subject to the risk that the liquidity of a particular
investment, or investments generally, in such countries will shrink or disappear
suddenly and without warning as a result of adverse economic, market or
political conditions or adverse investor perceptions, whether or not accurate.
Because of the lack of sufficient market liquidity, a Fund may incur losses
because it will be required to effect sales at a disadvantageous time and only
then at a substantial drop in price. Investments in emerging countries may be
more difficult to value precisely because of the characteristics discussed above
and lower trading volumes.
A Fund’s
use of foreign currency management techniques in emerging countries may be
limited. The Investment Adviser anticipates that a significant portion of a
Fund’s currency exposure in emerging countries may not be covered by those
techniques.
Foreign
Custody Risk. A Fund
that invests in foreign securities may hold such securities and cash with
foreign banks, agents and securities depositories appointed by the Fund’s
custodian (each a “Foreign Custodian”). Some Foreign Custodians may be recently
organized or new to the foreign custody business. In some countries, Foreign
Custodians may be subject to little or no regulatory oversight over or
independent evaluation of their operations. Further, the laws of certain
countries may place limitations on a Fund’s ability to recover its assets if a
Foreign Custodian enters bankruptcy. Investments in emerging markets may be
subject to even greater custody risks than investments in more developed
markets. Custody services in emerging market countries are very often
undeveloped and may be considerably less well regulated than in more developed
countries, and thus may not afford the same level of investor protection as
would apply in developed countries.
Risks
of Derivative Investments. Certain
Funds may, to the extent consistent with their respective investment policies,
invest in derivative instruments including without limitation, options, futures,
options on futures, swaps, structured securities and forward contracts and other
derivatives relating to foreign currency transactions. Derivatives may be used
for both hedging and non-hedging purposes (that is, to seek to increase total
return), although suitable derivative instruments may not always be available to
the Investment Adviser for these purposes. Losses from derivative instruments
can result from a lack of correlation between changes in the value of derivative
instruments and the portfolio assets (if any) being hedged, the potential
illiquidity of the markets for derivative instruments, the failure of the
counterparty to perform its contractual obligations, or the risks related to
leverage factors associated with such transactions. Derivatives are also subject
to risks arising from margin requirements, which include the risk that a Fund
will be required to pay additional margin or set aside additional collateral to
maintain open derivative positions and the risk of loss by a Fund of margin
deposits in the event of the bankruptcy or other similar insolvency with respect
to a broker or counterparty with whom a Fund has an open derivative position.
Losses may also arise if the Funds receive cash collateral under the
transactions and some or all of that collateral is invested in the market. To
the extent that cash collateral is so invested, such collateral will be subject
to market depreciation or appreciation and a Fund may be responsible for any
loss that might result from its investment of the counterparty’s cash
collateral. If cash collateral is not invested, the Fund may be exposed to
additional risk of loss in the event of the insolvency of its custodian holding
such collateral. The use of these management techniques also involves the risk
of loss if the Investment Adviser is incorrect in its expectation of the timing
or level of fluctuations in securities prices, interest rates, currency prices
or other variables.
50
Appendix
A
Derivative
instruments may be harder to value, subject to greater volatility and more
likely subject to changes in tax treatment than other investments. For these
reasons, the Investment Adviser’s attempts to hedge portfolio risks through the
use of derivative instruments may not be successful, and the Investment Adviser
may choose not to hedge portfolio risks. Using derivatives for non-hedging
purposes is considered a speculative practice and presents greater risk of loss
than derivatives used for hedging purposes.
Risks
of Illiquid Investments. Each Fund
may not acquire any “illiquid investment” if, immediately after the acquisition,
the Fund would have invested more than 15% of its net assets in illiquid
investments that are assets. An “illiquid investment” is an investment that a
Fund reasonably expects cannot be sold or disposed of in current market
conditions in seven calendar days or less without the sale or disposition
significantly changing the market value of the investment. In determining
whether an investment is an illiquid investment, the Investment Adviser will
take into account actual or estimated daily transaction volume of an investment,
group of related investments or asset class and other relevant market, trading,
and investment-specific considerations. In addition, in determining the
liquidity of an investment, the Investment Adviser must determine whether
trading varying portions of a position in a particular portfolio investment or
asset class, in sizes that a Fund would reasonably anticipate trading, is
reasonably expected to significantly affect its liquidity, and if so, the Fund
must take this determination into account when classifying the liquidity of that
investment or asset class.
Investments
purchased by a Fund that are liquid at the time of purchase may subsequently
become illiquid. If one or more investments in a Fund’s portfolio become
illiquid, the Fund may exceed its 15 percent limitation in illiquid investments.
In the event that changes in the portfolio or other external events cause the
Fund to exceed this limit, the Fund must take steps to bring its illiquid
investments that are assets to or below 15% of its net assets within a
reasonable period of time. This requirement would not force a Fund to liquidate
any portfolio instrument where the Fund would suffer a loss on the sale of that
instrument.
In cases
where no clear indication of the value of a Fund’s portfolio instruments is
available, the portfolio instruments will be valued at their fair value
according to the valuation procedures approved by the Board of Trustees. These
cases include, among others, situations where a security or other asset or
liability does not have a price source, or the secondary markets on which an
investment has previously been traded are no longer viable, due to its lack of
liquidity. For more information on fair valuation, please see “Shareholder
Guide—How To Buy Shares—How Are Shares Priced?”
Credit/Default
Risks. Debt
securities purchased by the Funds may include U.S. Government Securities
(including zero coupon bonds) and securities issued by foreign governments,
domestic and foreign corporations, banks and other issuers. Some of these fixed
income securities are described in the next section below. Further information
is provided in the SAI.
Certain
Funds also have credit rating requirements for the securities they buy, which
are applied at the time of purchase. For this purpose, each Fund relies only on
the ratings of the following NRSROs: Standard & Poor’s, Moody’s and Fitch,
Inc. Unrated securities may be purchased by a Fund if they are determined by the
Investment Adviser to be of a credit quality consistent with the Fund’s credit
rating requirements.
Debt
securities rated BBB- or higher by Standard & Poor’s, or Baa3 or higher by
Moody’s or having a comparable credit rating by another NRSRO are considered
“investment grade.” Securities rated BBB- or Baa3 are considered medium-grade
obligations with speculative characteristics, and adverse economic conditions or
changing circumstances may weaken their issuers’ capacity to pay interest and
repay principal. For the purpose of determining compliance with any credit
rating requirement, each Fund assigns a security, at the time of purchase, the
highest rating by an NRSRO if the security is rated by more than one NRSRO.
Therefore, a security will be deemed to have met a rating requirement if it
receives the minimum required rating from at least one such rating organization
even though it has been rated below the minimum rating by one or more other
rating organizations, or if unrated by such rating organizations, the security
is determined by the Investment Adviser to be of comparable credit
quality.
A security
satisfies a Fund’s minimum rating requirement regardless of its relative ranking
(for example, plus or minus) within a designated major rating category (for
example, BBB or Baa). If a security satisfies a Fund’s minimum rating
requirement at the time of purchase and is subsequently downgraded below that
rating, the Fund will not be required to dispose of the security. If a downgrade
occurs, the Investment Adviser will consider which action, including the sale of
the security, is in the best interest of a Fund and its
shareholders.
Certain
Funds may invest in fixed income securities rated BB+ or Ba1 or below (or
comparable unrated securities) which are commonly referred to as “junk bonds.”
Junk bonds are considered speculative and may be questionable as to principal
and interest payments.
In some
cases, junk bonds may be highly speculative, have poor prospects for reaching
investment grade standing and be in default. As a result, investment in such
bonds will present greater speculative risks than those associated with
investment in investment grade bonds. Also, to the extent that the rating
assigned to a security in a Fund’s portfolio is downgraded by a rating
organization, the market price and liquidity of such security may be adversely
affected.
51
Risks
of Initial Public Offerings. The Funds
may invest in IPOs. An IPO is a company’s first offering of stock to the public.
IPO risk is the risk that the market value of IPO shares will fluctuate
considerably due to factors such as the absence of a prior public market,
unseasoned trading, the small number of shares available for trading and limited
information about a company’s business model, quality of management, earnings
growth potential, and other criteria used to evaluate its investment prospects.
The purchase of IPO shares may involve high transaction costs. Investments in
IPO shares, which are subject to market risk and liquidity risk, involve greater
risks than investments in shares of companies that have traded publicly on an
exchange for extended periods of time. When a Fund’s asset base is small, a
significant portion of the Fund’s performance could be attributable to
investments in IPOs, because such investments would have a magnified impact on
the Fund. As the Fund’s assets grow, the effect of the Fund’s investments in
IPOs on the Fund’s performance probably will decline, which could reduce the
Fund’s performance. Because of the price volatility of IPO shares, a Fund may
choose to hold IPO shares for a very short period of time. This may increase the
turnover of the Fund’s portfolio and may lead to increased expenses to the Fund,
such as commissions and transaction costs. By selling IPO shares, the Fund may
realize taxable gains it will subsequently distribute to shareholders. In
addition, the market for IPO shares can be speculative and/or inactive for
extended periods of time. There is no assurance that a Fund will be able to
obtain allocable portions of IPO shares. The limited number of shares available
for trading in some IPOs may make it more difficult for a Fund to buy or sell
significant amounts of shares without an unfavorable impact on prevailing
prices. Investors in IPO shares can be affected by substantial dilution in the
value of their shares, by sales of additional shares and by concentration of
control in existing management and principal shareholders.
Risks
of Pre-IPO Investments. Privately
held companies typically have limited operating histories, narrower, less
established product lines and smaller market shares than larger businesses,
which tend to render them more vulnerable to competitors’ actions, market
conditions and consumer sentiment in respect of their products or services, as
well as general economic downturns. Such companies may experience operating
losses, which may be substantial, and there can be no assurance when or if such
companies will operate at a profit. At the time of a Fund’s investment, there is
generally little publicly available information about these companies since they
are primarily privately owned and the Fund may only have access to the company’s
actual financial results as of and for the most recent quarter end or, in
certain cases, the quarter end preceding the most recent quarter end. There can
be no assurance that the information that a Fund does obtain with respect to any
investment is reliable. Privately held companies may have limited financial
resources and may be unable to meet their obligations under their existing
credit facilities (to the extent that such facilities exist), which may lead to
equity financings, possibly at discounted valuations, in which a Fund could be
substantially diluted if the Fund does not or cannot participate, bankruptcy or
liquidation and the corresponding reduction in value or loss of the Fund’s
investment. Privately held companies are more likely to depend on the management
talents and efforts of a small group of persons; therefore, the death,
disability, resignation or termination of one or more of these persons could
have a material adverse impact on the company and, in turn, on a Fund. Continued
global economic uncertainty could also result in investors becoming more
risk-averse, which in turn could reduce the amount of growth capital available
to the companies from both existing and new investors, could adversely affect
their operating performance, and could delay liquidity paths (for example, an
IPO or strategic sale/merger) for the companies. It may be difficult for a Fund
to sell these investments, subjecting such Fund to liquidity risk. Shares of
privately held companies are less liquid (and may be illiquid) and difficult to
value, and the inability of these portfolio companies to complete an IPO within
the targeted time frame will extend the holding period of a Fund’s investments
and may adversely affect the value of these investments.
Risks
of Investing in Master Limited Partnerships. Each Fund
may invest in MLPs. Investments in securities of an MLP involve risks that
differ from investments in common stock, including risks related to limited
control and limited rights to vote on matters affecting the MLP, risks related
to potential conflicts of interest between the MLP and the MLP’s general
partner, cash flow risks, dilution risks and risks related to the general
partner’s right to require unit-holders to sell their common units at an
undesirable time or price, resulting from regulatory changes or other reasons.
Certain MLP securities may trade in lower volumes due to their smaller
capitalizations. Accordingly, those MLPs may be subject to more abrupt or
erratic price movements and may lack sufficient market liquidity to enable a
Fund to effect sales at an advantageous time or without a substantial drop in
price. Investment in those MLPs may restrict the Fund’s ability to take
advantage of other investment opportunities. MLPs are generally considered
interest-rate sensitive investments. During periods of interest rate volatility,
these investments may not provide attractive returns. Depending on the state of
interest rates in general, the use of MLPs could enhance or harm the overall
performance of the Fund.
MLPs are
subject to various risks related to the underlying operating companies they
control, including dependence upon specialized management skills and the risk
that those operating companies may lack or have limited operating histories. The
success of a Fund’s investments in an MLP will vary depending on the underlying
industry represented by the MLP’s portfolio. Certain MLPs in which a Fund may
invest depend upon their parent or sponsor entities for the majority of their
revenues. If the parent or sponsor entities fail to make payments or satisfy
their obligations to an MLP, the revenues and cash flows of that MLP and ability
of that MLP to make distributions to unit holders such as the Fund would be
adversely affected.
Certain
MLPs in which a Fund invests depend upon a limited number of customers for
substantially all of their revenue. Similarly, certain MLPs in which a Fund may
invest depend upon a limited number of suppliers of goods or services to
continue their operations. The loss of those customers or suppliers could have a
material adverse effect on an MLP’s results of operations and cash flow, and on
its ability to make distributions to unit holders such as the Fund.
52
Appendix
A
Each Fund
must recognize income that it receives from underlying MLPs for tax purposes,
even if the Fund does not receive cash distributions from the MLPs in an amount
necessary to pay such tax liability. In addition, a percentage of a distribution
received by a Fund as the holder of the MLP interest may be treated as a return
of capital, which would reduce the Fund’s adjusted tax basis in the interests of
the MLP, which will result in an increase in the amount of income or gain (or
decrease in the amount of loss) that will be recognized by the Fund for tax
purposes upon the sale of any such interests or upon subsequent distributions in
respect of such interests. Furthermore, any return of capital distribution
received from the MLP may require a Fund to restate the character of its
distributions and amend any shareholder tax reporting previously
issued.
MLPs
generally do not pay U.S. federal income tax at the partnership level. Rather,
each partner is allocated a share of the partnership’s income, gains, losses,
deductions and expenses. A change in current tax law, or a change in the
underlying business mix of a given MLP, could result in an MLP being treated as
a corporation for U.S. federal income tax purposes, which would result in the
MLP being required to pay U.S. federal income tax (as well as state and local
income taxes) on its taxable income. The classification of an MLP as a
corporation for U.S. federal income tax purposes would have the effect of
reducing the amount of cash available for distribution by the MLP. If any MLP in
which a Fund invests were treated as a corporation for U.S. federal income tax
purposes, it could result in a reduction of the value of the Fund’s investment
in the MLP and lower income to the Fund.
|
C.
Portfolio Securities and
Techniques |
This
section provides further information on certain types of securities and
investment techniques that may be used by the Funds, including their associated
risks.
The Funds
may purchase other types of securities or instruments similar to those described
in this section if otherwise consistent with the Fund’s investment objective and
policies. Further information is provided in the SAI, which is available upon
request.
Convertible
Securities. Each Fund
(other than the Small/Mid Cap Growth Fund) may invest in convertible securities.
Convertible securities are preferred stock or debt obligations that are
convertible into common stock. Convertible securities generally offer lower
interest or dividend yields than non-convertible securities of similar quality.
Convertible securities in which a Fund invests are subject to the same rating
criteria as its other investments in fixed income securities. Convertible
securities have both equity and fixed income risk characteristics. Like all
fixed income securities, the value of convertible securities is susceptible to
the risk of market losses attributable to changes in interest rates. Generally,
the market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. However, when
the market price of the common stock underlying a convertible security exceeds
the conversion price of the convertible security, the convertible security tends
to reflect the market price of the underlying common stock. As the market price
of the underlying common stock declines, the convertible security, like a fixed
income security, tends to trade increasingly on a yield basis, and thus may not
decline in price to the same extent as the underlying common stock.
Foreign
Currency Transactions. The Funds
may, to the extent consistent with their investment policies, purchase or sell
foreign currencies on a cash basis or through forward contracts. A forward
contract involves an obligation to purchase or sell a specific currency at a
future date at a price set at the time of the contract. A Fund may engage in
foreign currency transactions for hedging purposes and to seek to protect
against anticipated changes in future foreign currency exchange rates. In
addition, certain Funds may enter into foreign currency transactions to seek a
closer correlation between the Fund’s overall currency exposures and the
currency exposures of the Fund’s performance benchmark. Certain Funds may also
enter into such transactions to seek to increase total return, which presents
additional risk.
The Funds
may also engage in cross-hedging by using forward contracts in a currency
different from that in which the hedged security is denominated or quoted. A
Fund may hold foreign currency received in connection with investments in
foreign securities when, in the judgment of the Investment Adviser, it would be
beneficial to convert such currency into U.S. dollars at a later date
(e.g., the
Investment Adviser may anticipate the foreign currency to appreciate against the
U.S. dollar).
Certain
Funds may, from time to time, engage in non-deliverable forward transactions to
manage currency risk or to gain exposure to a currency without purchasing
securities denominated in that currency. A non-deliverable forward is a
transaction that represents an agreement between a Fund and a counterparty
(usually a commercial bank) to pay the other party the amount that it would cost
based on current market rates as of the termination date to buy or sell a
specified (notional) amount of a particular currency at an agreed upon foreign
exchange rate on an agreed upon future date. If the counterparty defaults, a
Fund will have contractual remedies pursuant to the agreement related to the
transaction, but the Fund may be delayed or prevented from obtaining payments
owed to it pursuant to non-deliverable forward transactions. Such
non-deliverable forward transactions will be settled in cash.
Currency
exchange rates may fluctuate significantly over short periods of time, causing,
along with other factors, a Fund’s NAV to fluctuate (when the Fund’s NAV
fluctuates, the value of your shares may go up or down). Currency exchange rates
also can be affected unpredictably by the intervention of U.S. or foreign
governments or central banks, or the failure to intervene, or by currency
controls or political developments in the United States or abroad.
53
Certain
forward foreign currency exchange contracts and other currency transactions are
not exchange traded or cleared. The market in such forward foreign currency
exchange contracts, currency swaps and other privately negotiated currency
instruments offers less protection against defaults by the other party to such
instruments than is available for currency instruments traded on an exchange.
Such contracts are subject to the risk that the counterparty to the contract
will default on its obligations. Because these contracts are not guaranteed by
an exchange or clearinghouse, a default on a contract would deprive a Fund of
unrealized profits, transaction costs or the benefits of a currency hedge or
could force the Fund to cover its purchase or sale commitments, if any, at the
current market price.
A Fund is
not required to post cash collateral with its counterparties in certain foreign
currency transactions. Accordingly, a Fund may remain more fully invested (and
more of the Fund’s assets may be subject to investment and market risk) than if
it were required to post collateral with its counterparties (which is the case
with certain transactions). Where a Fund’s counterparties are not required to
post cash collateral with the Fund, the Fund will be subject to additional
counterparty risk.
Structured
Securities. Each Fund
may invest in structured securities. Structured securities are securities whose
value is determined by reference to changes in the value of specific currencies,
securities, interest rates, commodities, indices or other financial indicators
(the “Reference”) or the relative change in two or more References. Investments
in structured securities may provide exposure to certain securities or markets
in situations where regulatory or other restrictions prevent direct investments
in such issuers or markets.
The
interest rate or the principal amount payable upon maturity or redemption may be
increased or decreased depending upon changes in the applicable Reference.
Structured securities may be positively or negatively indexed, so that
appreciation of the Reference may produce an increase or decrease in the
interest rate or value of the security at maturity. In addition, changes in the
interest rates or the value of the security at maturity may be a multiple of
changes in the value of the Reference, effectively leveraging the Fund’s
investments so that small changes in the value of the Reference may result in
disproportionate gains or losses to the Fund. Consequently, structured
securities may present a greater degree of market risk than many types of
securities and may be more volatile, less liquid and more difficult to price
accurately than less complex securities. Structured securities are also subject
to the risk that the issuer of the structured securities may fail to perform its
contractual obligations. Certain issuers of structured products may be deemed to
be investment companies as defined in the Investment Company Act. As a result, a
Fund’s investments in structured securities may be subject to the limits
applicable to investments in other investment companies.
Structured
securities are considered hybrid instruments because they are derivative
instruments the value of which depends on, or is derived from or linked to, the
value of an underlying asset, interest rate index or commodity. Commodity-linked
notes are hybrid instruments because the principal and/or interest payments on
those notes is linked to the value of the individual commodities, futures
contracts or the performance of one or more commodity indices.
Structured
securities include, but are not limited to, equity linked notes. An equity
linked note is a note whose performance is tied to a single stock, a stock index
or a basket of stocks. Equity linked notes combine the principal protection
normally associated with fixed income investments with the potential for capital
appreciation normally associated with equity investments. Upon the maturity of
the note, the holder generally receives a return of principal based on the
capital appreciation of the linked securities. Depending on the terms of the
note, equity linked notes may also have a “cap” or “floor” on the maximum
principal amount to be repaid to holders, irrespective of the performance of the
underlying linked securities. For example, a note may guarantee the repayment of
the original principal amount invested (even if the underlying linked securities
have negative performance during the note’s term), but may cap the maximum
payment at maturity at a certain percentage of the issuance price or the return
of the underlying linked securities. Alternatively, the note may not guarantee a
full return on the original principal, but may offer a greater participation in
any capital appreciation of the underlying linked securities. The terms of an
equity linked note may also provide for periodic interest payments to holders at
either a fixed or floating rate. The secondary market for equity linked notes
may be limited, and the lack of liquidity in the secondary market may make these
securities difficult to dispose of and to value. Equity linked notes will be
considered equity securities for purposes of a Fund’s investment objective and
policies.
REITs. Each Fund
may invest in REITs. REITs are pooled investment vehicles that invest primarily
in either real estate or real estate related loans. The value of a REIT is
affected by changes in the value of the properties owned by the REIT or securing
mortgage loans held by the REIT. REITs are dependent upon the ability of the
REITs’ managers, and are subject to heavy cash flow dependency, default by
borrowers and the qualification of the REITs under applicable regulatory
requirements for favorable income tax treatment. REITs are also subject to risks
generally associated with investments in real estate including possible declines
in the value of real estate, general and local economic conditions,
environmental problems and changes in interest rates. To the extent that assets
underlying a REIT are concentrated geographically, by property type or in
certain other respects, these risks may be heightened. A Fund will indirectly
bear its proportionate share of any expenses, including management fees, paid by
a REIT in which it invests.
Options
on Securities, Securities Indices and Foreign Currencies. A put
option gives the purchaser of the option the right to sell, and the writer
(seller) of the option the obligation to buy, the underlying instrument during
the option period. A call option gives the purchaser of the option the right to
buy, and the writer (seller) of the option the obligation to sell, the
underlying instrument during the
54
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option
period. Each Fund may write (sell) call and put options and purchase call and
put options, on any securities and other instruments in which it may invest or
any index consisting of securities or other instruments in which it may invest.
A Fund may also, to the extent consistent with its investment policies, purchase
and write (sell) put and call options on foreign currencies.
The writing
and purchase of options is a highly specialized activity which involves special
investment risks. Options may be used for either hedging or cross-hedging
purposes, or to seek to increase total return (which presents additional risk).
The successful use of options depends in part on the ability of the Investment
Adviser to anticipate future price fluctuations and the degree of correlation
between the options and securities (or currency) markets. If the Investment
Adviser is incorrect in its expectation of changes in market prices or
determination of the correlation between the instruments or indices on which
options are written and purchased and the instruments in a Fund’s investment
portfolio, the Fund may incur losses that it would not otherwise incur. The use
of options can also increase a Fund’s transaction costs. Options written or
purchased by the Funds may be traded on either U.S. or foreign exchanges or over
the counter. Foreign and over-the-counter options will present greater
possibility of loss because of their greater illiquidity and credit
risks.
In lieu of
entering into “protective put” transactions, certain Funds may engage in barrier
options transactions as an alternative means to offset or hedge against a
decline in the market value of a Fund’s securities. Barrier options are similar
to standard options except that they become activated or are extinguished when
the underlying asset reaches a predetermined level or barrier. “Down and out”
barrier options are canceled or “knocked out” if the underlying asset falls to a
pre-determined level. “Down and in” barrier options are activated or “knocked
in” if the underlying asset falls to a pre-determined level. “Up and out”
barrier options are extinguished or “knocked out” if the underlying asset rises
to a predetermined level. “Up and in” barrier options are activated or “knocked
in” if the underlying asset rises to a predetermined level. If the Investment
Adviser sets too high or too low a barrier, and the option is either
extinguished or “knocked out” or the options are never activated or “knocked
in,” the benefits to a Fund using a barrier option strategy may be limited and
the costs associated with a barrier option strategy could be detrimental to a
Fund’s performance.
Futures
Contracts and Options and Swaps on Futures Contracts. Futures
contracts are standardized, exchange-traded contracts that provide for the sale
or purchase of a specified financial instrument or currency at a future time at
a specified price. An option on a futures contract gives the purchaser the right
(and the writer of the option the obligation) to assume a position in a futures
contract at a specified exercise price within a specified period of time. A swap
on a futures contract provides an investor with the ability to gain economic
exposure to a particular futures market. A futures contract may be based on
particular securities, foreign currencies, securities indices and other
financial instruments and indices. The Funds may engage in futures transactions
on both U.S. and foreign exchanges.
Each Fund
may, to the extent consistent with its investment policies, purchase and sell
futures contracts, and purchase and write call and put options on futures
contracts and enter into swaps on futures contracts, in order to seek to
increase total return or to hedge against changes in interest rates, securities
prices or currency exchange rates, or to otherwise manage its term structure,
sector selections and duration in accordance with its investment objective and
policies. Each Fund may also, to the extent consistent with its investment
policies, enter into closing purchase and sale transactions with respect to such
contracts and options.
Futures
contracts and related options and swaps present the following risks:
◼
While a
Fund may benefit from the use of futures and options and swaps on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in poorer overall performance than if the Fund had not entered
into any futures contracts, options transactions or swaps.
◼
Because
perfect correlation between a futures position and a portfolio position that is
intended to be protected is impossible to achieve, the desired protection may
not be obtained and a Fund may be exposed to additional risk of
loss.
◼
The loss
incurred by a Fund in entering into futures contracts and in writing call
options and entering into swaps on futures is potentially unlimited and may
exceed the amount of the premium received.
◼
Futures
markets are highly volatile and the use of futures may increase the volatility
of a Fund’s NAV.
◼
As a result
of the low margin deposits normally required in futures trading, a relatively
small price movement in a futures contract may result in substantial losses to a
Fund.
◼
Futures
contracts and options and swaps on futures may be illiquid, and exchanges may
limit fluctuations in futures contract prices during a single day.
◼
Foreign
exchanges may not provide the same protection as U.S. exchanges.
Equity
Swaps. Each Fund
may invest in equity swaps. Equity swaps allow the parties to a swap agreement
to exchange the dividend income or other components of return on an equity
investment (for example, a group of equity securities or an index) for another
payment stream. An equity swap may be used by a Fund to invest in a market
without owning or taking physical custody of securities in circumstances in
which direct investment may be restricted for legal reasons or is otherwise
deemed impractical or disadvantageous. Under an equity swap, payments may be
made at the conclusion of the equity swap or periodically during its term.
Sometimes, however, the Investment Adviser may be able to terminate a swap
contract prior to its term, subject to any potential termination fee that is in
addition to a Fund’s accrued obligations under the swap.
55
Equity
swaps may be structured in different ways. For example, when a Fund takes a long
position, a counterparty may agree to pay the Fund the amount, if any, by which
the notional amount of the equity swap would have increased in value had it been
invested in a particular stock (or group of stocks), plus the dividends that
would have been received on the stock. In these cases, a Fund may agree to pay
to the counterparty interest on the notional amount of the equity swap plus the
amount, if any, by which that notional amount would have decreased in value had
it been invested in such stock (or group of stocks). Therefore, in this case the
return to the Fund on the equity swap should be the gain or loss on the notional
amount plus dividends on the stock less the interest paid by the Fund on the
notional amount. In other cases, when a Fund takes a short position, a
counterparty may agree to pay the Fund the amount, if any, by which the notional
amount of the equity swap would have decreased in value had the Fund sold a
particular stock (or group of stocks) short, less the dividend expense that the
Fund would have paid on the stock (or group of stocks), as adjusted for interest
payments or other economic factors.
The value
of swaps can be very volatile. To the extent that the Investment Adviser does
not accurately analyze and predict the potential relative fluctuation of the
components swapped with another party, future market trends, the values of
assets or economic factors, or the creditworthiness of the counterparty, a Fund
may suffer a loss, which may be substantial. The value of some components of a
swap (such as the dividends on a common stock) may also be sensitive to changes
in interest rates. Furthermore, swaps may be illiquid, and a Fund may be unable
to terminate its obligations when desired.
Currently,
certain standardized swap transactions are subject to mandatory central clearing
and exchange trading. Although central clearing and exchange trading is expected
to decrease counterparty risk and increase liquidity compared to bilaterally
negotiated swaps, central clearing and exchange trading does not eliminate
counterparty risk or illiquidity risk entirely. Depending on the size of the
Fund and other factors, the margin required under the rules of a clearinghouse
and by a clearing member may be in excess of the collateral required to be
posted by the Fund to support its obligations under a similar bilateral,
uncleared swap. However, certain applicable regulators have adopted rules
imposing certain margin requirements, including minimums, on uncleared swaps
which may result in the Fund and its counterparties posting higher amounts for
uncleared swaps.
When-Issued
Securities and Forward Commitments. Each Fund
may purchase when-issued securities and make contracts to purchase or sell
securities for a fixed price at a future date beyond customary settlement time.
When-issued securities are securities that have been authorized, but not yet
issued. When-issued securities are purchased in order to secure what is
considered to be an advantageous price and yield to the Fund at the time of
entering into the transaction. A forward commitment involves the entering into a
contract to purchase or sell securities for a fixed price at a future date
beyond the customary settlement period.
The
purchase of securities on a when-issued or forward commitment basis involves a
risk of loss if the value of the security to be purchased declines before the
settlement date. Conversely, the sale of securities on a forward commitment
basis involves the risk that the value of the securities sold may increase
before the settlement date. Although a Fund will generally purchase securities
on a when-issued or forward commitment basis with the intention of acquiring the
securities for its portfolio, a Fund may dispose of when-issued securities or
forward commitments prior to settlement if the Investment Adviser deems it
appropriate.
Repurchase
Agreements. Repurchase
agreements involve the purchase of securities subject to the seller’s agreement
to repurchase them at a mutually agreed upon date and price. Each Fund may enter
into repurchase agreements with counterparties approved by the Investment
Adviser pursuant to procedures approved by the Board of Trustees that furnish
collateral at least equal in value or market price to the amount of their
repurchase obligation. The collateral may consist of any type of security
(government or corporate) of any or no credit rating. Repurchase agreements
involving obligations other than U.S. Government Securities may be subject to
additional risks.
If the
other party or “seller” defaults, a Fund might suffer a loss to the extent that
the proceeds from the sale of the underlying securities and other collateral
held by the Fund are less than the repurchase price and the Fund’s costs
associated with delay and enforcement of the repurchase agreement. In addition,
in the event of bankruptcy of the seller, a Fund could suffer additional losses
if a court determines that the Fund’s interest in the collateral is not
enforceable.
Certain
Funds, together with other registered investment companies having advisory
agreements with the Investment Adviser or any of its affiliates, may transfer
uninvested cash balances into a single joint account, the daily aggregate
balance of which will be invested in one or more repurchase
agreements.
Lending
of Portfolio Securities. Each Fund
may engage in securities lending. Securities lending involves the lending of
securities owned by a Fund to financial institutions such as certain
broker-dealers including, as permitted by the SEC, Goldman Sachs. The borrowers
are required to secure their loans continuously with cash, cash equivalents,
U.S. Government Securities or letters of credit in an amount at least equal to
the market value of the securities loaned. Cash collateral may be invested by a
Fund in short-term investments, including registered and unregistered investment
pools managed by the Investment Adviser, its affiliates or the Funds’ custodian
and from which the Investment Adviser or its affiliates may receive fees. To the
extent that cash collateral is so invested, such collateral will be subject to
market depreciation or appreciation, and a Fund will be responsible for any loss
that might result from its
56
Appendix
A
investment
of the borrowers’ collateral. If the Investment Adviser determines to make
securities loans, the value of the securities loaned may not exceed
33 1∕3% of the
value of the total assets of a Fund (including the loan collateral). Loan
collateral (including any investment of the collateral) is not subject to the
percentage limitations described elsewhere in the Prospectus regarding
investments in fixed income securities and cash equivalents.
A Fund may
lend its securities to increase its income. A Fund may, however, experience
delay in the recovery of its securities or incur a loss if the institution with
which it has engaged in a portfolio loan transaction breaches its agreement with
the Fund or its agent, or becomes insolvent.
Short
Sales Against-the-Box. The Funds
may make short sales against-the-box. A short sale against-the-box means that at
all times when a short position is open the Fund will own an equal amount of
securities sold short, or securities convertible into or exchangeable for,
without payment of any further consideration, an equal amount of the securities
of the same issuer as the securities sold short.
Preferred
Stock, Warrants and Stock Purchase Rights. Each Fund
may invest in preferred stock, warrants and stock purchase rights (or “rights”).
Preferred stocks are securities that represent an ownership interest providing
the holder with claims on the issuer’s earnings and assets before common stock
owners but after bond owners. Unlike debt securities, the obligations of an
issuer of preferred stock, including dividend and other payment obligations, may
not typically be accelerated by the holders of such preferred stock on the
occurrence of an event of default or other non-compliance by the issuer of the
preferred stock.
Warrants
and other rights are options to buy a stated number of shares of common stock at
a specified price at any time during the life of the warrant or right. The
holders of warrants and rights have no voting rights, receive no dividends and
have no rights with respect to the assets of the issuer.
Other
Investment Companies. Each Fund
may invest in securities of other investment companies, including ETFs and money
market funds, subject to statutory limitations prescribed by the Investment
Company Act or rules, regulations or exemptive relief thereunder. These
statutory limitations include in certain circumstances a prohibition on any Fund
acquiring more than 3% of the voting shares of any other investment company, and
a prohibition on investing more than 5% of a Fund’s total assets in securities
of any one investment company or more than 10% of its total assets in securities
of all investment companies.
Subject to
applicable law and/or pursuant to an exemptive order obtained from the SEC or
under an exemptive rule adopted by the SEC, a Fund may invest in certain other
investment companies (including ETFs and money market funds) and business
development companies beyond the statutory limits described above or otherwise
provided that certain conditions are met. Some of those investment companies may
be funds for which the Investment Adviser or any of its affiliates serves as
investment adviser, administrator or distributor.
Additionally,
to the extent that any Fund serves as an “acquired fund” to another Goldman
Sachs Fund or unaffiliated investment company, the Fund’s ability to invest in
other investment companies and private funds may be limited and, under these
circumstances, the Fund’s investments in other investment companies and private
funds will be consistent with applicable law and/or exemptive rules adopted by
or exemptive orders obtained from the SEC. For example, to the extent the Fund
serves as an acquired fund in a fund of funds arrangement in reliance on Rule
12d1-4 under the Investment Company Act, the Fund would be prohibited from
purchasing or otherwise acquiring the securities of an investment company or
private fund if, after such purchase or acquisition, the aggregate value of the
Fund’s investments in such investment companies and private funds would exceed
10% of the value of the Fund’s total assets, subject to limited exceptions
(including for investments in money market funds).
The use of
ETFs is generally intended to help a Fund match the total return of the
particular market segments or indices represented by those ETFs, although that
may not be the result. Most ETFs are passively-managed investment companies
whose shares are purchased and sold on a securities exchange. An ETF generally
represents a portfolio of securities designed to track a particular market
segment or index. An investment in an ETF generally presents the same primary
risks as an investment in a conventional fund (i.e., one that
is not exchange-traded) that has the same investment objectives, strategies and
policies. In addition, an ETF may fail to accurately track the market segment or
index that underlies its investment objective. The price of an ETF can
fluctuate, and a Fund could lose money investing in an ETF. Moreover, ETFs are
subject to the following risks that do not apply to conventional funds: (i) the
market price of the ETF’s shares may trade at a premium or a discount to their
NAV; (ii) an active trading market for an ETF’s shares may not develop or be
maintained; and (iii) there is no assurance that the requirements of the
exchange necessary to maintain the listing of an ETF will continue to be met or
remain unchanged.
A Fund will
indirectly bear its proportionate share of any management fees and other
expenses paid by such other investment companies, in addition to the fees and
expenses regularly borne by the Fund. Although the Funds do not expect to do so
in the foreseeable future, each Fund is authorized to invest substantially all
of its assets in a single open-end investment company or series thereof that has
substantially the same investment objective, policies and fundamental
restrictions as the Fund.
57
Unseasoned
Companies. Each Fund
may invest in companies which (together with their predecessors) have operated
less than three years. The securities of such companies may have limited
liquidity, which can result in their being priced higher or lower than might
otherwise be the case. In addition, investments in unseasoned companies are more
speculative and entail greater risk than do investments in companies with an
established operating record.
Corporate
Debt Obligations. Corporate
debt obligations include bonds, notes, debentures, commercial paper and other
obligations of corporations to pay interest and repay principal. Each Fund may
invest in corporate debt obligations issued by U.S. and certain non-U.S. issuers
which issue securities denominated in the U.S. dollar (including Yankee and Euro
obligations). In addition to obligations of corporations, corporate debt
obligations include securities issued by banks and other financial institutions
and supranational entities (i.e., the
World Bank, the International Monetary Fund, etc.).
Bank
Obligations. Each Fund
may invest in obligations issued or guaranteed by U.S. or foreign banks. Bank
obligations, including without limitation, time deposits, bankers’ acceptances
and certificates of deposit, may be general obligations of the parent bank or
may be limited to the issuing branch by the terms of the specific obligations or
by government regulations. Banks are subject to extensive but different
governmental regulations which may limit both the amount and types of loans
which may be made and interest rates which may be charged. In addition, the
profitability of the banking industry is largely dependent upon the availability
and cost of funds for the purpose of financing lending operations under
prevailing money market conditions. General economic conditions as well as
exposure to credit losses arising from possible financial difficulties of
borrowers play an important part in the operation of this industry.
U.S.
Government Securities. Each Fund
may invest in U.S. Government Securities. U.S. Government Securities include
U.S. Treasury obligations and obligations issued or guaranteed by U.S.
government agencies, instrumentalities or sponsored enterprises. U.S. Government
Securities may be supported by (i) the full faith and credit of the U.S.
Treasury; (ii) the right of the issuer to borrow from the U.S. Treasury; (iii)
the discretionary authority of the U.S. government to purchase certain
obligations of the issuer; or (iv) only the credit of the issuer. U.S.
Government Securities also include Treasury receipts, zero coupon bonds and
other stripped U.S. Government Securities, where the interest and principal
components are traded independently. U.S. Government Securities may also include
Treasury inflation-protected securities whose principal value is periodically
adjusted according to the rate of inflation.
U.S.
Government Securities are deemed to include (i) securities for which the payment
of principal and interest is backed by an irrevocable letter of credit issued by
the U.S. government, its agencies, authorities or instrumentalities; and (ii)
participations in loans made to foreign governments or their agencies that are
so guaranteed. Certain of these participations may be regarded as
illiquid.
U.S.
Government Securities have historically involved little risk of loss of
principal if held to maturity. However, no assurance can be given that the U.S.
government will be able or willing to repay the principal or interest when due,
or provide financial support to U.S. government agencies, authorities,
instrumentalities or sponsored enterprises if it is not obligated to do so by
law.
Custodial
Receipts and Trust Certificates. Each Fund
may invest in custodial receipts and trust certificates representing interests
in securities held by a custodian or trustee. The securities so held may include
U.S. Government Securities or other types of securities in which a Fund may
invest. The custodial receipts or trust certificates may evidence ownership of
future interest payments, principal payments or both on the underlying
securities, or, in some cases, the payment obligation of a third party that has
entered into an interest rate swap or other arrangement with the custodian or
trustee. For certain securities laws purposes, custodial receipts and trust
certificates may not be considered obligations of the U.S. government or other
issuer of the securities held by the custodian or trustee. If for tax purposes a
Fund is not considered to be the owner of the underlying securities held in the
custodial or trust account, the Fund may suffer adverse tax consequences. As a
holder of custodial receipts and trust certificates, a Fund will bear its
proportionate share of the fees and expenses charged to the custodial account or
trust. Each Fund may also invest in separately issued interests in custodial
receipts and trust certificates.
Mortgage-Backed
Securities. Each Fund
may invest in mortgage-backed securities. Mortgage-backed securities represent
direct or indirect participations in, or are collateralized by and payable from,
mortgage loans secured by real property. Mortgage-backed securities can be
backed by either fixed rate mortgage loans or adjustable rate mortgage loans,
and may be issued by either a governmental or non-governmental entity. The value
of some mortgage backed securities may be particularly sensitive to changes in
prevailing interest rates. The value of these securities may also fluctuate in
response to the market’s perception of the creditworthiness of the issuers.
Early repayment of principal on mortgage- or asset-backed securities may expose
a Fund to the risk of earning a lower rate of return upon reinvestment of
principal.
The Funds
may invest in privately-issued mortgage pass-through securities that represent
interests in pools of mortgage loans that are issued by trusts formed by
originators of and institutional investors in mortgage loans (or represent
interests in custodial arrangements administered by such institutions). These
originators and institutions include commercial banks, savings and loans
associations, credit unions, savings banks, mortgage bankers, insurance
companies, investment banks or special purpose subsidiaries of the foregoing.
The pools underlying privately-issued mortgage pass-through securities consist
of mortgage loans secured by mortgages or deeds of trust creating a first lien
on commercial, residential, residential multi-family and mixed
residential/commercial properties. These mortgage-backed securities typically do
not have the same credit standing as U.S. government guaranteed mortgage-backed
securities.
58
Appendix
A
Privately-issued
mortgage pass-through securities generally offer a higher yield than similar
securities issued by a government entity because of the absence of any direct or
indirect government or agency payment guarantees. However, timely payment of
interest and principal on mortgage loans in these pools may be supported by
various other forms of insurance or guarantees, including individual loan, pool
and hazard insurance, subordination and letters of credit. Such insurance and
guarantees may be issued by private insurers, banks and mortgage poolers. There
is no guarantee that private guarantors or insurers, if any, will meet their
obligations. Mortgage-backed securities without insurance or guarantees may also
be purchased by the Fund if they have the required rating from an NRSRO.
Mortgage-backed securities issued by private organizations may not be readily
marketable, may be more difficult to value accurately and may be more volatile
than similar securities issued by a government entity.
Mortgage-backed
securities may include multiple class securities, including collateralized
mortgage obligations (“CMOs”) and Real Estate Mortgage Investment Conduit
(“REMIC”) pass-through or participation certificates. A REMIC is a CMO that
qualifies for special tax treatment and invests in certain mortgages principally
secured by interests in real property and other permitted investments. CMOs
provide an investor with a specified interest in the cash flow from a pool of
underlying mortgages or of other mortgage-backed securities. CMOs are issued in
multiple classes each with a specified fixed or floating interest rate and a
final scheduled distribution rate. In many cases, payments of principal are
applied to the CMO classes in the order of their respective stated maturities,
so that no principal payments will be made on a CMO class until all other
classes having an earlier stated maturity date are paid in full.
Sometimes,
however, CMO classes are “parallel pay,” i.e., payments
of principal are made to two or more classes concurrently. In some cases, CMOs
may have the characteristics of a stripped mortgage-backed security whose price
can be highly volatile. CMOs may exhibit more or less price volatility and
interest rate risk than other types of mortgage-related obligations, and under
certain interest rate and payment scenarios, a Fund may fail to recoup fully its
investment in certain of these securities regardless of their credit
quality.
Mortgaged-backed
securities also include stripped mortgage-backed securities (“SMBS”), which are
derivative multiple class mortgage-backed securities. SMBS are usually
structured with two different classes: one that receives substantially all of
the interest payments and the other that receives substantially all of the
principal payments from a pool of mortgage loans. The market value of SMBS
consisting entirely of principal payments generally is unusually volatile in
response to changes in interest rates. The yields on SMBS that receive all or
most of the interest from mortgage loans are generally higher than prevailing
market yields on other mortgage-backed securities because their cash flow
patterns are more volatile and there is a greater risk that the initial
investment will not be fully recouped. Throughout 2008, the market for
mortgage-backed securities began experiencing substantially, often dramatically,
lower valuations and greatly reduced liquidity. Markets for other asset-backed
securities have also been affected. These instruments are increasingly subject
to liquidity constraints, price volatility, credit downgrades and unexpected
increases in default rates and, therefore, may be more difficult to value and
more difficult to dispose of than previously. These events may have an adverse
effect on the Funds to the extent they invest in mortgage-backed or other fixed
income securities or instruments affected by the volatility in the fixed income
markets.
Asset-Backed
Securities. Each Fund
may invest in asset-backed securities. Asset-backed securities are securities
whose principal and interest payments are collateralized by pools of assets such
as auto loans, credit card receivables, leases, installment contracts and
personal property. Asset-backed securities may also include home equity line of
credit loans and other second-lien mortgages. Asset-backed securities are often
subject to more rapid repayment than their stated maturity date would indicate
as a result of the pass-through of prepayments of principal on the underlying
loans. During periods of declining interest rates, prepayment of loans
underlying asset-backed securities can be expected to accelerate. Accordingly, a
Fund’s ability to maintain positions in such securities will be affected by
reductions in the principal amount of such securities resulting from
prepayments, and its ability to reinvest the returns of principal at comparable
yields is subject to generally prevailing interest rates at that time.
Asset-backed securities present credit risks that are not presented by
mortgage-backed securities. This is because asset-backed securities generally do
not have the benefit of a security interest in collateral that is comparable to
mortgage assets. Some asset-backed securities have only a subordinated claim or
security interest in collateral. If the issuer of an asset-backed security
defaults on its payment obligations, there is the possibility that, in some
cases, the Fund will be unable to possess and sell the underlying collateral and
that the Fund’s recoveries on repossessed collateral may not be available to
support payments on the securities. In the event of a default, a Fund may suffer
a loss if it cannot sell collateral quickly and receive the amount it is owed.
There is no guarantee that private guarantors, or insurers of an asset-backed
security, if any, will meet their obligations. The value of some asset-backed
securities may be particularly sensitive to changes in prevailing interest
rates. Asset-backed securities may also be subject to increased volatility and
may become illiquid and more difficult to value even when there is no default or
threat of default due to the market’s perception of the creditworthiness of the
issuers and market conditions impacting asset-backed securities more
generally.
Borrowings. Each Fund
can borrow money from banks and other financial institutions in amounts not
exceeding one-third of its total assets (including the amount borrowed), for
temporary or emergency purposes.
59
Appendix
B
Financial
Highlights
The
financial highlights tables are intended to help you understand the Fund’s
financial performance for the past five years (or less if the Fund has
been in operation for less than five years). Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). The
information for the Fund has been audited by PricewaterhouseCoopers LLP, whose
report, along with the Fund’s financial statements, is included in the Fund’s
annual reports (available upon request).
|
|
Goldman
Sachs Mid Cap Growth Fund | ||||
|
|
Class
P Shares | ||||
|
|
Year
Ended August 31, | ||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 |
|
Per
Share Data | |||||
|
Net
asset value, beginning of year |
$17.41 |
$26.74 |
$23.45 |
$22.96 |
$27.80 |
|
Net
investment loss(a) |
(0.03
) |
(0.08
) |
(0.13
) |
(0.06
) |
(0.04
) |
|
Net
realized and unrealized gain (loss) |
1.40 |
(6.11
) |
7.47 |
5.58 |
1.08 |
|
Total
from investment operations |
1.37 |
(6.19
) |
7.34 |
5.52 |
1.04 |
|
Distributions
to shareholders from net realized gains |
(1.00
) |
(3.14
) |
(4.05
) |
(5.03
) |
(5.88
) |
|
Net
asset value, end of year |
$17.78 |
$17.41 |
$26.74 |
$23.45 |
$22.96 |
|
Total
Return(b) |
8.15
% |
(25.68
)% |
34.26
% |
29.34
% |
8.38
% |
|
Net
assets, end of year (in 000’s) |
$43,066 |
$50,932 |
$90,649 |
$69,989 |
$69,893 |
|
Ratio
of net expenses to average net assets |
0.86
% |
0.89
% |
0.89
% |
0.90
% |
0.92
% |
|
Ratio
of total expenses to average net assets |
1.01
% |
0.99
% |
0.99
% |
1.02
% |
1.00
% |
|
Ratio
of net investment loss to average net assets |
(0.19
)% |
(0.40
)% |
(0.53
)% |
(0.28
)% |
(0.16
)% |
|
Portfolio
turnover rate(c) |
43
% |
50
% |
57
% |
65
% |
69
% |
(a)
Calculated
based on the average shares outstanding methodology.
(b)
Assumes
investment at the NAV at the beginning of the year, reinvestment of all
dividends and distributions, a complete redemption of the investment at the NAV
at the end of the year and no sales or redemption charges (if any). Total
returns would be reduced if a sales or redemption charge was taken into account.
Returns do not reflect the impact of taxes to shareholders relating to Fund
distributions or the redemption of Fund shares.
(c)
The
Fund’s portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short-term investments.
If such transactions were included, the Fund’s possrtfolio turnover rate may be
higher.
60
Appendix
B
|
|
Goldman
Sachs Small Cap Growth Fund | |||
|
|
Class
P Shares | |||
|
|
Year
Ended August 31, |
Period
Ended
August
31, 2020(a)
| ||
|
|
2023 |
2022 |
2021 | |
|
Per
Share Data | ||||
|
Net
asset value, beginning of period |
$11.27 |
$16.98 |
$12.84 |
$10.00 |
|
Net
investment loss(b) |
(0.06
) |
(0.04
)(c) |
(0.10
)(d) |
(0.05
) |
|
Net
realized and unrealized gain (loss) |
0.96 |
(4.08
) |
5.37 |
2.91 |
|
Total
from investment operations |
0.90 |
(4.12
) |
5.27 |
2.86 |
|
Distributions
to shareholders from net investment income |
— |
— |
(0.03
) |
(0.02
) |
|
Distributions
to shareholders from net realized gains |
— |
(1.59
) |
(1.10
) |
— |
|
Total
distributions |
— |
(1.59
) |
(1.13
) |
(0.02
) |
|
Net
asset value, end of period |
$12.17 |
$11.27 |
$16.98 |
$12.84 |
|
Total
Return(e) |
7.99
% |
(26.27
)% |
42.38
% |
28.68
% |
|
Net
assets, end of period (in 000’s) |
$12,859 |
$11,540 |
$5,349 |
$2,831 |
|
Ratio
of net expenses to average net assets |
0.90
% |
0.90
% |
0.90
% |
0.90
%(f) |
|
Ratio
of total expenses to average net assets |
1.72
% |
1.75
% |
3.00
% |
6.73
%(f) |
|
Ratio
of net investment loss to average net assets |
(0.49
)% |
(0.35
)%(c) |
(0.64
)% |
(0.55
)%(f) |
|
Portfolio
turnover rate(g) |
87
% |
81
% |
101
% |
70
% |
(a)
Commenced
operations on October 31, 2019.
(b)
Calculated
based on the average shares outstanding methodology.
(c)
Reflects
income recognized from special dividends which amounted to $0.01 per share and
0.10% of average net assets.
(d)
Reflects
income recognized from special dividends which amounted to $0.01 per share and
0.08% of average net assets.
(e)
Assumes
investment at the NAV at the beginning of the period, reinvestment of all
dividends and distributions, a complete redemption of the investment at the NAV
at the end of the period and no sales or redemption charges (if any). Total
returns would be reduced if a sales or redemption charge was taken into account.
Returns do not reflect the impact of taxes to shareholders relating to Fund
distributions or the redemption of Fund shares. Total returns for periods less
than one full year are not annualized.
(f)
Annualized.
(g)
The
Fund’s portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short-term investments.
If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
61
|
|
Goldman
Sachs Small/Mid Cap Growth Fund | ||||
|
|
Class
P Shares | ||||
|
|
Year
Ended August 31, | ||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 |
|
Per
Share Data | |||||
|
Net
asset value, beginning of year |
$19.71 |
$31.98 |
$26.12 |
$22.38 |
$25.64 |
|
Net
investment loss(a) |
(0.07
) |
(0.11
) |
(0.18
) |
(0.08
) |
(0.05
)(b) |
|
Net
realized and unrealized gain (loss) |
1.27 |
(8.39
) |
9.88 |
6.84 |
0.44 |
|
Total
from investment operations |
1.20 |
(8.50
) |
9.70 |
6.76 |
0.39 |
|
Distributions
to shareholders from net realized gains |
— |
(3.74
) |
(3.84
) |
(3.02
) |
(3.65
) |
|
Distributions
to shareholders from return of capital |
— |
(0.03
) |
— |
— |
— |
|
Total
distributions |
— |
(3.77
) |
(3.84
) |
(3.02
) |
(3.65
) |
|
Net
asset value, end of year |
$20.91 |
$19.71 |
$31.98 |
$26.12 |
$22.38 |
|
Total
Return(c) |
6.09
% |
(29.41
)% |
39.51
% |
33.56
% |
4.67
% |
|
Net
assets, end of period (in 000’s) |
$323,206 |
$345,549 |
$601,794 |
$285,307 |
$188,657 |
|
Ratio
of net expenses to average net assets |
0.92
% |
0.89
% |
0.88
% |
0.93
% |
0.92
% |
|
Ratio
of total expenses to average net assets |
0.92
% |
0.89
% |
0.88
% |
0.94
% |
0.92
% |
|
Ratio
of net investment loss to average net assets |
(0.36
)% |
(0.46
)% |
(0.61
)% |
(0.38
)% |
(0.25
)%(b) |
|
Portfolio
turnover rate(d) |
62
% |
65
% |
60
% |
76
% |
76
% |
(a)
Calculated
based on the average shares outstanding methodology.
(b)
Reflects
income recognized from special dividends which amounted to $0.02 per share and
0.08% of average net assets.
(c)
Assumes
investment at the NAV at the beginning of the period, reinvestment of all
dividends and distributions, a complete redemption of the investment at the NAV
at the end of the period and no sales or redemption charges (if any). Total
returns would be reduced if a sales or redemption charge was taken into account.
Returns do not reflect the impact of taxes to shareholders relating to Fund
distributions or the redemption of Fund shares.
(d)
The
Fund’s portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short-term investments.
If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
62
Appendix
B
|
|
Goldman
Sachs Technology Opportunities Fund | ||||
|
|
Class
P Shares | ||||
|
|
Year
Ended August 31, | ||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 |
|
Per
Share Data | |||||
|
Net
asset value, beginning of year |
$25.40 |
$41.43 |
$34.59 |
$26.29 |
$30.79 |
|
Net
investment loss(a) |
(0.05
) |
(0.12
) |
(0.15
) |
(0.07
) |
(0.04
) |
|
Net
realized and unrealized gain (loss) |
4.48 |
(10.61
) |
9.64 |
12.08 |
0.60 |
|
Total
from investment operations |
4.43 |
(10.73
) |
9.49 |
12.01 |
0.56 |
|
Distributions
to shareholders from net realized gains |
(3.99
) |
(5.30
) |
(2.65
) |
(3.71
) |
(5.06
) |
|
Net
asset value, end of year |
$25.84 |
$25.40 |
$41.43 |
$34.59 |
$26.29 |
|
Total
Return(b) |
22.35
% |
(29.38
)% |
29.44
% |
51.51
% |
5.11
% |
|
Net
assets, end of year (in 000’s) |
$73,429 |
$95,207 |
$145,094 |
$63,555 |
$24,396 |
|
Ratio
of net expenses to average net assets |
0.92
% |
0.95
% |
0.97
% |
0.98
% |
0.97
% |
|
Ratio
of total expenses to average net assets |
1.05
% |
1.03
% |
1.03
% |
1.07
% |
1.08
% |
|
Ratio
of net investment loss to average net assets |
(0.20
)% |
(0.38
)% |
(0.43
)% |
(0.25
)% |
(0.16
)% |
|
Portfolio
turnover rate(c) |
36
% |
51
% |
41
% |
41
% |
27
% |
(a)
Calculated
based on the average shares outstanding methodology.
(b)
Assumes
investment at the NAV at the beginning of the period, reinvestment of all
dividends and distributions, a complete redemption of the investment at the NAV
at the end of the period and no sales or redemption charges (if any). Total
returns would be reduced if a sales or redemption charge was taken into account.
Returns do not reflect the impact of taxes to shareholders relating to Fund
distributions or the redemption of Fund shares. Total returns for periods less
than one full year are not annualized.
(c)
The
Fund’s portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short term investments.
If such transactions were included, the Fund’s portfolio turnover rate may be
higher.
63
Fundamental
Equity Growth Funds Prospectus (Class P
Shares)
|
FOR
MORE INFORMATION |
Annual/Semi-Annual
Report
Additional
information about the Fund’s investments is available in the Fund’s annual and
semi-annual reports to shareholders. In the Fund’s annual reports, you will find
a discussion of the market conditions and investment strategies that
significantly affected the Fund’s performance during the last fiscal
year.
Statement of
Additional Information
Additional
information about the Fund and its policies is also available in the Fund’s SAI.
The SAI is incorporated by reference into the Prospectus (i.e., is
legally considered part of the Prospectus).
The Fund’s
annual and semi-annual reports and the SAI are available free upon request by
calling Goldman Sachs at
1-800-526-7384. You can also access and download the annual and semi-annual reports and the SAI at the Fund’s website: www.gsam.com/content/gsam/us/en/advisors/fund-center/summary-prospectuses.html.
1-800-526-7384. You can also access and download the annual and semi-annual reports and the SAI at the Fund’s website: www.gsam.com/content/gsam/us/en/advisors/fund-center/summary-prospectuses.html.
From time
to time, certain announcements and other information regarding the Fund may be
found at
http://www.gsamfunds.com/announcements-ind for individual investors or http://www.gsamfunds.com/announcements for advisers.
http://www.gsamfunds.com/announcements-ind for individual investors or http://www.gsamfunds.com/announcements for advisers.
To obtain
other information and for shareholder inquiries:
|
◼ By
telephone: |
1-800-621-2550 |
|
◼ By
mail: |
Goldman
Sachs,
71
South Wacker Drive, Suite 1200
Chicago,
IL 60606 |
|
◼ On
the Internet: |
SEC
EDGAR database –
http://www.sec.gov |
Other
information about the Fund is available on the EDGAR Database on the SEC’s
internet site at http://www.sec.gov. You may
obtain copies of this information, after paying a duplicating fee, by electronic
request at the following e-mail address: [email protected].
The
Fund's investment company registration number is 811-05349.
GSAM®
is a registered service mark of Goldman Sachs & Co. LLC
EQG2PRO-23P