Prospectus
February
28, 2024
GOLDMAN
SACHS FUNDAMENTAL INTERNATIONAL EQUITY 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
International Equity ESG Fund
◼
Class P
Shares: GTFPX
◼
Goldman Sachs
International Equity Income Fund
◼
Class P
Shares: GSNPX
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Class
P |
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Management
Fees |
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Other
Expenses |
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Total
Annual Fund Operating Expenses |
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Fee
Waiver and Expense Limitation1 |
( |
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Total
Annual Fund Operating Expenses After Fee Waiver and Expense
Limitation |
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1
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1
Year |
3
Years |
5
Years |
10
Years |
|
Class
P Shares |
$ |
$ |
$ |
$ |
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1
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2
3
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1
Year |
5
Years |
Since
Inception |
Inception
Date | |
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Class
P Shares |
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Returns
Before Taxes |
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Returns
After Taxes on Distributions |
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Returns
After Taxes on Distributions and Sale of Fund Shares |
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MSCI
EAFE Index (Net, USD, Unhedged; reflects no deduction for fees or
expenses) |
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Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Alexis Deladerrière, CFA,
Managing Director, has managed the Fund since 2012; and Abhishek Periwal, CFA,
Managing Director, 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 10 of the
Prospectus.
4
|
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 10 of
the Prospectus.
5
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Class
P |
|
Management
Fees |
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|
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 |
$ |
$ |
$ |
$ |
|
|
|
|
6
|
|
7
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
1
Year |
5
Years |
Since
Inception |
Inception
Date | |
|
Class
P Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Returns
After Taxes on Distributions |
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|
|
|
|
Returns
After Taxes on Distributions and Sale of Fund Shares |
|
|
|
|
|
MSCI
EAFE Index (Net, USD, Unhedged; 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: Alexis Deladerrière, CFA,
Managing Director, has managed the Fund since 2012; and Abhishek Periwal, CFA,
Managing Director, has managed the Fund since 2018.
8
|
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 10 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 10 of
the Prospectus.
9
Fundamental
International Equity 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 a 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 a
Fund over another investment. Ask your salesperson or visit your intermediary’s
website for more information.
10
Investment
Management Approach
|
INVESTMENT
OBJECTIVES |
The
International Equity ESG Fund seeks long-term capital appreciation. The
International Equity Income Fund seeks long-term capital appreciation and growth
of income. Each Fund’s investment objective may be changed without shareholder
approval upon 60 days’ notice.
|
PRINCIPAL
INVESTMENT STRATEGIES |
International Equity
ESG Fund
The Fund
invests, under normal circumstances, at least 80% of its Net Assets in a
diversified portfolio of equity investments in non-U.S. issuers that the
Investment Adviser believes adhere to the Fund’s environmental, social and
governance (“ESG”) criteria. Such equity investments may include ETFs, futures
and other instruments with similar economic exposures. 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 intends to have investments economically tied to at least
three countries, not including the United States, and may invest in the
securities of issuers in emerging market countries.
The Fund
seeks to achieve its investment objective by investing, under normal
circumstances, in approximately 30-50 companies that are considered by the
Investment Adviser to be positioned for long-term capital appreciation. The
Fund’s ESG criteria are generally designed to exclude companies that are
directly engaged in, and/or derive significant revenue from, certain industries
or product lines, including, but not limited to:
◼
alcohol;
◼
tobacco;
◼
gambling;
◼
adult
entertainment;
◼
for-profit
prisons;
◼
weapons;
◼
oil and gas
exploration and production;
◼
thermal
coal mining; and
◼
thermal
coal power generation.
In
determining whether a company is directly engaged in, and/or derives significant
revenue from, the industries or product lines listed above, the Fund will use
revenue thresholds for certain industries or product lines (e.g., companies that
derive more than 5% of revenue from tobacco) and categorical exclusions for
other industries or product lines (e.g., companies that derive any revenue from
controversial weapons) and apply such thresholds and exclusions to data provided
by one or more third-party vendor(s). Generally, the highest revenue threshold
used will be 5%. The Investment Adviser, in its sole discretion, retains the
right not to use data provided by third-party vendors where it deems the data to
be not representative of a company’s current business operations. In such cases,
or where data on specific companies may not be available from third-party
vendors, the Investment Adviser may make reasonable estimates or otherwise
exercise its discretion. The Fund’s ESG criteria may be updated periodically to,
among other things, add or remove certain industries or product lines from the
screening process, revise the revenue thresholds and categorical exclusions
applicable to such activities, or change particular industries or product lines
from a categorical exclusion to a revenue threshold, or vice versa. The
Investment Adviser may periodically review portfolio holdings against the Fund’s
ESG criteria.
Once the
Investment Adviser determines that an issuer meets the Fund’s ESG criteria, the
Investment Adviser conducts a supplemental analysis of individual companies’
corporate governance factors and a range of environmental and social factors
that may vary by sector. This supplemental analysis will be conducted alongside
traditional fundamental, bottom-up financial analysis of individual companies,
using traditional fundamental metrics.
These
corporate governance considerations may include:
◼
quality of
earnings;
◼
concern for
shareholder interests and minority shareholder rights;
◼
unethical
business conduct, for example unethical methods of obtaining contracts and/or
close connections with authorities;
◼
board
structure;
◼
board
diversity;
◼
executive
management team, for example CEO/CFO effectiveness and acting in interest of
shareholders; and
11
◼
executive
compensation.
Environmental
and social considerations may include:
◼
environmental
and social reporting, disclosure and transparency;
◼
material
environmental litigation and/or controversies;
◼
material
social litigation and/or controversies;
◼
labor
practices, for example track record in treatment of employees and supply chain
management;
◼
human
rights considerations; and
◼
climate
change policies and environmental practices.
The
Investment Adviser may engage in active dialogues with company management teams
to further inform investment decision-making and to foster best corporate
governance practices using its fundamental and ESG analysis. The Fund may invest
in a company prior to completion of the supplemental analysis or without
engaging with company management. Instances in which the supplemental analysis
may not be completed prior to investment include but are not limited to IPOs,
in-kind transfers, corporate actions, and/or certain short-term
holdings.
The
Investment Adviser may sell holdings for several reasons, including, among
others, changes in a company’s fundamentals or earnings, a company no longer
meeting the Fund’s ESG criteria, or a company otherwise failing to conform to
the Investment Adviser’s investment philosophy.
The Fund
may allocate its assets among countries as determined by the Investment Adviser
from time to time provided that the Fund’s assets are economically tied to at
least three foreign countries. The Fund expects to invest a substantial portion
of its assets in the securities of issuers economically tied to the developed
countries of Western Europe and in Australia, Japan and New Zealand. In
addition, the Fund may also invest in the securities of issuers located in
emerging market countries. Emerging market countries are generally located in
Africa, Asia, the Middle East, Eastern Europe and Central and South
America.
The Fund
may also invest up to 20% of its Net Assets in equity investments that may not
adhere to the Fund’s ESG criteria and in fixed income securities, such as
government, corporate and bank debt obligations. 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.
International Equity
Income Fund
The Fund
seeks to achieve long-term capital appreciation and growth of income by
investing in the stocks of companies within developed and emerging countries
around the world, outside of the United States. The Fund invests, under normal
circumstances, at least 80% of its Net Assets in a diversified portfolio of
equity investments of dividend-paying non-U.S. issuers. Such equity investments
may include ETFs, futures and other instruments with similar economic exposures.
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
intends to have investments economically tied to at least three countries, not
including the United States, and may invest in the securities of issuers in
emerging market countries.
The Fund
may allocate its assets among countries as determined by the Investment Adviser
provided that the Fund’s assets are economically tied to at least three foreign
countries. The Fund expects to invest a substantial portion of its assets in the
securities of issuers economically tied to the developed countries of Western
Europe and in Australia, Japan and New Zealand. In addition, the Fund may also
invest in the securities of issuers located in emerging countries. Emerging
countries are generally located in Africa, Asia, the Middle East, Eastern Europe
and Central and South America.
The Fund
may also 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
seeks to generate additional cash flow and may reduce volatility by the sale of
call options on the MSCI EAFE Index or other national or regional stock market
indices (or related ETFs).
The Fund
can, from time to time, sell call options in an amount up to 5% of the value of
the Fund’s portfolio. As the seller of the call options, the Fund will receive
cash (the “premium”) from the purchaser. Depending upon the type of index call
option, the purchaser of a call option either (i) has the right to any
appreciation in the value of the index over a fixed price (the “exercise price”)
on a certain date in the future (the “expiration date”) or (ii) has the right to
any appreciation in the value of the index over the exercise price at any time
prior to the expiration of the option. If the purchaser does not exercise the
option, the Fund retains the premium and makes no payments to the purchaser. If
the purchaser exercises the option, the Fund pays the purchaser the difference
between the price of the
12
Investment
Management Approach
index and
the exercise price of the option. The premium, the exercise price and the market
price of the index determine the gain or loss realized by the Fund as the seller
of the call option. The Fund can also repurchase the call option prior to the
expiration date, ending its obligation. In this case, the cost of entering into
closing purchase transactions will determine the gain or loss realized by the
Fund.
During
periods in which the equity markets are generally unchanged or falling, a
diversified portfolio with a call option writing strategy may outperform the
same portfolio without the options because of the premiums received from writing
call options. Similarly, in a modestly rising market (where the income from
premiums exceeds the aggregate appreciation of the underlying index over its
exercise price) such a portfolio may outperform the same portfolio without the
options. However, in other rising markets (where the aggregate appreciation of
the underlying index over its exercise price exceeds the income from premiums),
a portfolio with a call writing strategy could significantly underperform the
same portfolio without the options.
The returns
from the options strategy will generally be characterized as short-term capital
gains or losses. These will be aggregated with realized capital gains and losses
from the remainder of the Fund’s portfolio to determine the Fund’s net capital
gain or loss. The Fund generally will not make a distribution of capital gain
unless it ends the year with an overall net capital gain. This means that it is
possible the Fund will make no distribution of capital gains in some years even
if the options strategy, by itself, generated a gain. If these gains were more
than offset by losses from stock transactions, then the gain from the options
strategy will remain in the Fund, and add to the Fund’s net asset value, but
will not be distributed in that year. See “Taxation—Distributions” below. It is
anticipated that the calls will typically be written against the MSCI EAFE Index
(or against ETFs linked to the MSCI EAFE Index) or against other national or
regional stock market indices. The goal of the call writing strategy is to
generate an amount of premium that, when annualized and added to the Fund’s
expected dividend yield, provides an attractive level of cash flow. Call
writing, however, entails certain risks. For more information, see “Risks of the
Funds” and “Appendix A—Other Portfolio Risks—Risks of Writing Index Call
Options.”
The
Investment Adviser anticipates generally using index call options with
expirations of one month or less. Outstanding call options will be rolled
forward upon expiration, so that there will generally be some options
outstanding.
All Funds
In
determining whether an issuer is economically tied to a country other than the
United States, the Investment Adviser will consider whether the
issuer:
◼
Has a class
of securities whose principal securities market is in a country other than the
United States;
◼
Has its
principal office in a country other than the United States;
◼
Derives 50%
or more of its total revenue or profit from goods produced, sales made or
services provided in one or more countries other than the United
States;
◼
Maintains
50% or more of its assets in one or more countries other than the United States;
or
◼
Is
otherwise determined to be economically tied to a country other than the United
States by the Investment Adviser in its discretion. For example, the Investment
Adviser may use the classifications assigned by third parties, including an
issuer’s “country of risk” as determined by Bloomberg or the classifications
assigned to an issuer by a Fund’s benchmark index provider. These
classifications are generally based on a number of criteria, including an
issuer’s country of domicile, the primary stock exchange on which an issuer’s
securities trade, the location from which the majority of an issuer’s revenue is
derived, and an issuer’s reporting currency. Although the Investment Adviser may
rely on these classifications, it is not required to do so.
Each Fund’s
performance benchmark index is the MSCI EAFE Index (Net, USD, Unhedged). The
MSCI EAFE Index (Net, USD, Unhedged) is a free float-adjusted market
capitalization index that is designed to measure the equity market performance
of developed markets, excluding the US and Canada. The MSCI EAFE Index (Net,
USD, Unhedged) consists of the following 21 developed market country indices as
of the date of the Prospectus: Australia, Austria, Belgium, Denmark, Finland,
France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United
Kingdom. The MSCI EAFE Index (Net, USD, Unhedged) approximates the minimum
possible dividend reinvestment. The dividend is reinvested after deduction for
withholding tax, applying the rate to non-resident individuals who do not
benefit from double taxation treaties. The MSCI EAFE Index (Net, USD, Unhedged)
does not reflect any deductions of expenses associated with mutual funds such as
management fees and other expenses.
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, 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.
13
GSAM Fundamental
International Equity Team’s Philosophy (All Funds):
|
Belief |
How
the Investment Adviser Acts on This Belief |
|
Excess
returns may be generated by conducting thorough fundamental
research
and individual stock selection |
Seeks
to generate excess returns through an intensive research culture,
which
includes regular conversations with existing and potential investee
companies’
executives and their competitors, suppliers and
clients. |
|
A
team-based approach enriches debate and enhances the quality of
investment
decisions |
Conducts
stock level research in a team-orientated structure with frequent
and
open communication. |
|
Focused
and differentiated portfolios provide potential to generate excess
returns |
Builds
portfolios that are reflective of the team’s most compelling investment
ideas
so that the majority of excess returns is driven by stock
selection. |
The GSAM
Fundamental International Equity Team’s investment philosophy is grounded in the
belief that we can achieve a competitive edge through selecting stocks. We seek
to discover a broad range of investment ideas while being flexible, nimble and
avoiding complacency. We believe a company’s prospective ability to generate
high returns on invested capital will strongly influence investment success. In
our view, using a strong valuation discipline to purchase well-positioned,
cash-generating businesses run by shareholder-oriented management teams is a
compelling formula for long-term portfolio performance.
From a
valuation perspective, the Investment Adviser generally looks for companies
where the Investment Adviser’s estimate of their earnings, asset value or cash
flow is meaningfully different from consensus; or where the Investment Adviser
believes a company’s intrinsic value is not reflected in the share price. Within
the valuation framework, the Investment Adviser actively searches for companies
that it believes can produce above average returns over the full market cycle.
As such, the Investment Adviser generally seeks companies that exhibit strong
corporate governance, such that minority shareholders may benefit from
returns.
The GSAM
Fundamental International 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 International
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 International 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 International Equity team’s view, is otherwise suitable
and attractively priced for investment, and the GSAM Fundamental International
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. The GSAM
Fundamental International Equity team may utilize data sources provided by
third-party vendors and/or engage directly with issuers when assessing the above
factors.
The GSAM
Fundamental International Equity team employs a fundamental investment process
that considers a wide range of factors, and no one factor or consideration is
determinative.
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.
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
International Equity Team’s Additional Investment Philosophy (International
Equity ESG Fund):
|
Belief |
How
the Investment Adviser Acts on This Belief |
|
◼ Companies
that employ sustainable
practices
and adhere to ESG principles can be
more
responsive and adaptive to change,
better
preserve competitive advantages and
maintain
financial resiliency |
Seeks
to identify sound companies by conducting proprietary ESG research and
bottom-up company analysis. |
|
ADDITIONAL
FEES AND EXPENSES INFORMATION |
Differences
in the “Expense Limitation” ratios across a Fund’s share classes are the result
of, among other things, the effect of mathematical rounding on the daily accrual
of expense reimbursement, particularly, in respect to share classes with small
amounts of assets.
14
Investment
Management Approach
Differences
in the “Other Expenses” ratios across a Fund’s share classes are the result of,
among other things, contractual differences in transfer agency fees and/or the
effect of mathematical rounding on the daily accrual of certain expenses,
particularly, in respect to share classes with small amounts of
assets.
|
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.
The
definitions below 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 A Shares
(i.e., dividends
and capital gains) but do not reflect taxes that may be incurred upon redemption
(sale) of the Class A Shares at the end of the performance period.
Average
Annual Total Returns After Taxes on Distributions and Sale of Fund Shares.
These
returns reflect taxes paid on distributions on a Fund’s Class A 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.
15
|
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 |
International
Equity
ESG
Fund |
International
Equity
Income
Fund |
|
Investment
Practices |
|
|
|
Borrowings |
33 1∕3 |
33 1∕3 |
|
Cross
Hedging of Currencies |
• |
• |
|
Custodial
Receipts and Trust Certificates |
• |
• |
|
Equity,
Index and Currency Swaps |
• |
• |
|
Foreign
Currency Transactions (including forward contracts) |
• |
• |
|
Futures
Contracts and Options and Swaps on Futures Contracts |
• |
• |
|
Illiquid
Investments* |
15 |
15 |
|
Initial
Public Offerings (“IPOs”) |
• |
• |
|
Investment
Company Securities (including ETFs)** |
10 |
10 |
|
Options
on Foreign Currencies1
|
• |
• |
|
Options2
|
• |
• |
|
Preferred
Stock, Warrants and Stock Purchase Rights |
• |
• |
|
Repurchase
Agreements |
• |
• |
|
Securities
Lending |
33 1∕3 |
33 1∕3 |
|
Unseasoned
Companies |
• |
• |
|
When-Issued
Securities and Forward Commitments |
• |
• |
*
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.
**
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.
1
The
Funds may purchase and sell call and put options on foreign
currencies.
2
The
Funds may sell call and put options and purchase call and put options on
securities and securities indices in which they may invest.
16
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 |
International
Equity
ESG
Fund |
International
Equity
Income
Fund |
|
Investment
Securities |
|
|
|
Asset-Backed
and Mortgage-Backed Securities1
|
• |
• |
|
Bank
Obligations1,2
|
• |
• |
|
Convertible
Securities |
• |
• |
|
Corporate
Debt Obligations1
|
• |
• |
|
Depositary
Receipts |
• |
• |
|
Emerging
Country Securities |
• |
• |
|
Equity
Investments |
80+ |
80+ |
|
Fixed
Income Securities |
20 |
20 |
|
Foreign
Government Securities1
|
• |
• |
|
Foreign
Securities |
• |
• |
|
Non-Investment
Grade Fixed Income Securities1,3
|
20 |
20 |
|
Private
Investments in Public Equity (“PIPEs”) |
• |
• |
|
Real
Estate Investment Trusts |
• |
• |
|
Special
Purpose Acquisition Companies (“SPACs”) |
• |
• |
|
Structured
Securities (which may include equity linked notes) |
• |
• |
|
Temporary
Investments |
• |
• |
|
U.S.
Government Securities1
|
• |
• |
1
Limited
by the amount the Fund invests in fixed income securities.
2
Issued
by U.S. or foreign banks.
3
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.
17
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 sections 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
• Non-Principal |
International
Equity
ESG |
International
Equity
Income |
|
Credit/Default |
• |
• |
|
Cybersecurity |
• |
• |
|
Derivatives |
• |
• |
|
Dividend-Paying
Investments |
|
✓ |
|
Emerging
Countries |
✓ |
✓ |
|
ESG
Integration |
|
• |
|
ESG
Standards |
✓ |
|
|
Foreign |
✓ |
✓ |
|
Foreign
Custody |
✓ |
✓ |
|
Geographic |
• |
• |
|
Interest
Rate |
• |
• |
|
Investment
Style |
• |
• |
|
IPO |
• |
• |
|
Issuer
Concentration |
✓ |
✓ |
|
Large
Shareholder Transactions |
✓ |
✓ |
|
Liquidity |
• |
• |
|
Management |
• |
• |
|
Market |
✓ |
✓ |
|
Mid-Cap
and Small-Cap |
• |
• |
|
Net
Asset Value (“NAV”) |
• |
• |
|
Non-Investment
Grade Fixed Income Securities |
• |
• |
|
Option
Writing |
|
• |
|
Private
Investments in Public Equity (“PIPEs”) |
• |
• |
|
Sector |
✓ |
✓ |
|
Special
Purpose Acquisition Companies (“SPACs”) |
• |
• |
|
Stock |
✓ |
✓ |
◼
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 deterioration in NAV. 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
18
Risks
of the Funds
adverse
market movements. Derivatives, which may pose risks in addition to and greater
than those associated with investing directly in securities, currencies or other
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. Derivatives are also subject to liquidity risk and risks arising from
margin requirements. There is also risk of loss 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 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.
◼
Dividend-Paying
Investments Risk—The Fund’s
investments in dividend-paying securities could cause the Fund to underperform
other funds that invest in similar asset classes but employ a different
investment style. Securities that pay dividends, as a group, can fall out of
favor with the market, causing such securities to underperform securities that
do not pay dividends. Depending upon market conditions and political and
legislative responses to such conditions, dividend-paying securities that meet
the Fund’s investment criteria may not be widely available and/or may be highly
concentrated in only a few market sectors. For example, in response to the
outbreak of a novel strain of coronavirus (known as COVID-19), the U.S.
Government passed the Coronavirus Aid, Relief and Economic Security Act in March
2020, which established loan programs for certain issuers impacted by COVID-19.
Among other conditions, borrowers under these loan programs are generally
restricted from paying dividends. The adoption of new legislation could further
limit or restrict the ability of issuers to pay dividends. To the extent that
dividend-paying securities are concentrated in only a few market sectors, the
Fund may be subject to the risks of volatile economic cycles and/or conditions
or developments that may be particular to a sector to a greater extent than if
its investments were diversified across different sectors. In addition, issuers
that have paid regular dividends or distributions to shareholders may not
continue to do so at the same level or at all in the future. A sharp rise in
interest rates or an economic downturn could cause an issuer to abruptly reduce
or eliminate its dividend. This may limit the ability of the Fund to produce
current income.
◼
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. These risks may be greater for frontier markets. 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
19
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
International Equity Income Fund’s investment process has the potential to
identify financial risks and contribute to the International Equity Income
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
International Equity Income 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.
◼
ESG
Standards Risk—TheInternational
Equity ESG Fund’s adherence to its ESG criteria and the application of the
Investment Adviser’s supplemental ESG analysis when selecting investments
generally will affect the Fund’s exposure to certain companies, sectors,
regions, and countries and may affect the Fund’s performance depending on
whether such investments are in or out of favor. For example, the Fund generally
will not seek to invest in companies that the Investment Adviser believes have
adverse social or environmental impacts (e.g., alcohol, tobacco, gambling, adult
entertainment, oil and gas, coal or weapons companies). Adhering to the ESG
criteria and applying the Investment Adviser’s supplemental ESG analysis may
also affect the Fund’s performance relative to similar funds that do not adhere
to such criteria or apply such analysis. Additionally, the Fund’s adherence to
the ESG criteria and the application of the supplemental ESG analysis in
connection with identifying and selecting equity investments in non-U.S. issuers
often require more subjective analysis and may be relatively more difficult than
applying the ESG criteria or the supplemental ESG analysis to equity investments
of all issuers because data availability may be more limited with respect to
non-U.S. issuers. Certain investments may be dependent on U.S. and foreign
government policies, including tax incentives and subsidies, which may change
without notice.
The
exclusionary criteria related to the Fund’s ESG criteria may result in the Fund
forgoing opportunities to buy certain securities when it might otherwise be
advantageous to do so, or selling securities for ESG reasons when it might be
otherwise disadvantageous for it to do so. The Fund’s investments in certain
companies may be susceptible to various factors that may impact their businesses
or operations, including costs associated with government budgetary constraints
that impact publicly funded projects and clean energy initiatives, the effects
of general economic conditions throughout the world, increased competition from
other providers of services, unfavorable tax laws or accounting policies and
high leverage.
Currently,
there is a lack of common industry standards relating to the development and
application of ESG criteria, which may make it difficult to compare the Fund’s
principal investment strategies with the investment strategies of other funds
that integrate certain ESG criteria. Although the Fund intends to invest in
issuers that the Investment Adviser believes adhere to the Fund’s ESG criteria,
the subjective value that investors may assign to certain types of ESG criteria
may differ substantially from that of the Fund. Investors can differ in their
views of what constitutes positive or negative ESG characteristics. As a result,
the Fund may invest in companies that do not reflect the beliefs and values of
any particular investor. In addition, the application of the Investment
Adviser’s supplemental ESG analysis may differ by asset class, sector, country
and region, and an issuer’s ESG practices may change over time. When assessing
whether an issuer meets the Fund’s ESG criteria and conducting an ESG analysis
of an issuer, the Investment Adviser generally will 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 and may vary significantly from one
third-party data provider to another, which may adversely impact the investment
process. The Fund’s ESG criteria and the application of the supplemental ESG
analysis may be changed without shareholder approval.
◼
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 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
20
Risks
of the Funds
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. These and other geopolitical
developments, including ongoing regional armed conflict in Europe and elsewhere,
could negatively impact the value of the Fund’s investments.
The Fund
will also be subject to 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 has exposure to foreign currencies) to
decline in value. Currency exchange rates may fluctuate significantly over short
periods of time. 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.
◼
Foreign
Custody Risk—The Fund
may hold foreign 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 the 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 underdeveloped 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.
◼
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.
◼
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.
◼
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.
◼
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.
21
◼
Issuer
Concentration Risk—Under
normal circumstances, the Fund intends to invest in up to approximately 50
companies. As a result of the relatively small number of issuers in which the
Fund generally invests, they may be subject to greater risks than a fund that
invests in a greater number of issuers. A change in the value of any single
investment held by the Fund may affect the overall value of the Fund more than
it would affect a mutual fund that holds more investments. In particular, the
Fund may be more susceptible to adverse developments affecting any single issuer
in the Fund and may be susceptible to greater losses because of these
developments.
◼
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 and more difficult to sell at the desired times and prices.
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. In addition,
during certain periods, the liquidity of particular issuers or industries in
which the Fund may invest, or all securities within a particular investment
category in which the Fund may invest, 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 is heightened during these
periods.
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 the 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.
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 Fund’s 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 and
prices, 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, 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.
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,
22
Risks
of the Funds
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.
◼
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.
◼
Option
Writing Risk—Writing
(selling) call options limits the opportunity to profit from an increase in the
market value of stocks in exchange for up-front cash at the time of selling the
call option. When the International Equity Income Fund writes (sell) MSCI EAFE
Index (or other index or related ETF) call options, it receives cash but limits
its opportunity to profit from an increase in the market value of the applicable
index beyond the exercise price (plus the premium received) of the option. In a
rising market, the International Equity Income Fund could significantly
underperform the market. The Fund’s option strategies may not fully protect them
against declines in the value of the market. Cash received from premiums will
enhance return in declining markets, but the Fund will continue to bear the risk
of a decline in the value of the securities held in its portfolio. The benefit
from writing a call option is limited to the amount of premium received. In a
period of a sharply falling equity market, the Fund will likely also experience
sharp declines in its NAV.
◼
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.
◼
Sector
Risk—To the
extent the Fund focuses its investments in securities of issuers in one or more
sectors (such as the financial services or telecommunications sectors), the Fund
will be subject, to a greater extent than if its investments were diversified
across different sectors, to the risks of volatile economic cycles and/or
conditions and developments that may be particular to that sector, such as:
adverse economic, business, political, environmental or other
developments.
◼
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
23
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.
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.
24
Service
Providers
|
INVESTMENT
ADVISER |
|
Investment
Adviser |
Fund |
|
Goldman
Sachs Asset Management, L.P. (“GSAM”)
200
West Street
New
York, NY 10282 |
International
Equity ESG
International
Equity Income |
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 December 31, 2023, GSAM, including its
investment advisory affiliates, had assets under supervision of approximately
$2.54 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 (“FCM”) 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. GSAM is responsible for the risk
management function for the Fund. 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. The use of certain investment strategies
that involve manual or additional processing, such as over-the-counter
derivatives, increases these risks. 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.
25
|
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
October
31, 2023* |
|
International
Equity ESG |
0.85% |
First $1
Billion |
0.82% |
|
|
0.77% |
Next $1
Billion |
|
|
|
0.73% |
Next $3
Billion |
|
|
|
0.71% |
Next $3
Billion |
|
|
|
0.70% |
Over $8
Billion |
|
|
International
Equity Income |
0.80% |
First $1
Billion |
0.80% |
|
|
0.72% |
Next $1
Billion |
|
|
|
0.68% |
Next $3
Billion |
|
|
|
0.67% |
Next $3
Billion |
|
|
|
0.66% |
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 payable by International
Equity ESG Fund in order to achieve an effective net management fee rate of
0.82% as an annual percentage of the Fund’s average daily net assets. This
arrangement will remain in effect through at least February 28, 2025, and prior
to such date, the Investment Adviser may not terminate the arrangement without
the approval of the Board of Trustees. This management fee waiver 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 waiver discussed above, the Investment Adviser may waive
an additional portion of its management fee, including fees earned as the
Investment Adviser to any of the 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 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 October 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% of average daily net assets for the
International Equity ESG Fund and to 0.014% of average daily net assets for the
International Equity Income Fund, through at least February 28, 2025, 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.
26
Service
Providers
|
FUND
MANAGERS |
Fundamental
International Equity Portfolio Management 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 |
|
Alexis
Deladerrière, CFA
Managing
Director |
Portfolio
Manager—
International
Equity ESG
International
Equity Income |
Since
2012
2012 |
Mr.
Deladerrière is the Head of International Developed Markets
Equity
within the Fundamental Equity team and the portfolio
manager
for the International Equity ESG and International Equity
Income
strategies. Mr. Deladerrière joined the Investment Adviser in
July
2002 as a research analyst. |
|
Abhishek
Periwal, CFA
Managing
Director |
Portfolio
Manager—
International
Equity ESG
International
Equity Income |
Since
2018
2018 |
Mr.
Periwal is a portfolio manager for international equity strategies
within
the Fundamental Equity team, including the International
Equity
ESG and International Equity Income strategies. Mr. Periwal
joined
the Investment Adviser in 2007 as an investment
analyst. |
For
information about portfolio manager compensation, other accounts managed by a
portfolio manager and portfolio manager 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, 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 may directly and indirectly invest. 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
27
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.
Under a
securities lending program approved by the Fund’s Board of Trustees, the Fund
has retained an affiliate of the Investment Adviser to serve as a securities
lending agent for the Fund to the extent that the Fund engages in the securities
lending program. For these services, the lending agent would receive a fee from
the Fund, including a fee based on the returns earned on the Fund’s investment
of the cash received as collateral for the loaned securities. The Board of
Trustees periodically reviews reports on portfolio securities loan transactions
for which the affiliated lending agent has acted as lending agent. In addition,
the Fund may 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.
28
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 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 Fund. Distributions from net
capital gains, if any, are normally declared and paid annually for the Fund.
Distributions from net investment income, if any, are normally declared and paid
annually for the International Equity ESG Fund and semi-annually for the
International Equity Income 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 annual 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 annual
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.
The Fund’s
investments in foreign securities may be subject to foreign withholding taxes.
Under certain circumstances, the Fund may elect to pass-through these taxes to
you. If this election is made, a proportionate amount of such taxes will
constitute a distribution to you, which would allow you either (i) to credit
such proportionate amount of foreign taxes against your U.S. federal income tax
liability or (ii) to take such amount as an itemized
deduction.
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.
29
Shareholder
Guide
The
following section will provide you with answers to some of the most frequently
asked questions regarding buying and selling the Fund's 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
Goldman Sachs, acting in its capacity as the Fund’s transfer agent (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.
30
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
services provided by each of Goldman Sachs, the Trust Companies, Ayco, or an
Authorized Institution may differ. 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 any
potential conflicts of interest.
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.
31
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 reserve 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 are 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 services or
securities dealers. 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 procedures established 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
32
Shareholder
Guide
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.
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).
33
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, the Transfer Agent and SS&C Global Investor & Distribution
Solutions, Inc. (“SS&C”) 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.
◼
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.
34
Shareholder
Guide
◼
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.
◼
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
35
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.
◼
The
Transfer Agent and SS&C 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.
◼
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
36
Shareholder
Guide
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 Intermediaries, such as
broker-dealers, investment advisers and insurance companies. In addition, Fund
shares may be held in omnibus Employee Benefit Plans, Eligible Fee-Based
Programs and other group accounts. 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 another. The identity of individual
investors whose purchase and redemption orders are aggregated are ordinarily not
tracked by the Fund on a regular basis. A number of these Intermediaries may not
have the capability or may not be willing to apply the Fund’s market timing
policies. While Goldman Sachs 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 of
these Intermediaries 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 and Goldman Sachs 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 Intermediary or by
certain customers of the Intermediary. Intermediaries may also monitor their
customers’ trading activities in the Fund. The criteria used by Intermediaries
to monitor for excessive trading may differ from the criteria used by the Fund.
If an Intermediary 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.
37
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 15% or 20%, depending on whether the individual's
income exceeds certain threshold amounts. 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
preferential rates described above, as long as certain other requirements are
met. For these lower rates to apply, the noncorporate 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.
The
International Equity Income Fund’s income or loss each year from writing index
call options will, generally, be treated as short-term capital gain or
loss.
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.
Because of
the International Equity Income Fund’s practice of writing call options on the
MSCI EAFE Index, other national or regional indices or related ETFs, the
possibility exists that an overlap between the Fund’s equity investments and the
components of the indices, if substantial enough, might cause a deferral of the
Fund’s recognition of losses for tax purposes or a reduction in the amount of
the Fund’s distributions that qualify for the favorable tax rate applicable to
dividends. The Fund intends to manage its investments in a manner designed to
avoid these adverse tax results to the extent reasonably practicable, but there
is no assurance that the Fund will accomplish this objective at all
times.
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. It is not anticipated that any
significant percentage of the Fund’s dividends paid will be eligible for
dividends-received deduction. This percentage may further 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.
38
Taxation
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. Rather than deducting these foreign taxes, the
Fund may make an election to treat a proportionate amount of those taxes as
constituting a distribution to each shareholder, which would generally allow you
either (i) to credit that proportionate amount of taxes against your U.S.
Federal income tax liability as a foreign tax credit or (ii) to take that amount
as an itemized deduction.
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 period exceeds one
year, except that any loss realized on shares held for six months or less will
be treated as a long-term capital loss to the extent of any long-term capital
gain dividends that were received on the shares. 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 will generally be subject to U.S. withholding tax with respect to
dividends received from the Fund 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.
Designated distributions of certain qualified interest income and short-term
capital gains paid to non-U.S. investors generally are not subject to
withholding. Although this designation will generally be made by the Fund for
distributions of long-term and short-term capital gains, the Fund does not
anticipate making any qualified interest income designations. Therefore,
distributions of interest income will generally be subject to withholding when
paid to non-U.S. investors. More information about U.S. taxation and non-U.S.
investors is included in the SAI.
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.
39
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, other investment companies (including ETFs), warrants, stock
purchase rights and synthetic and derivative instruments (such as swaps, options
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 a Fund 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 changing interest rates may have
unpredictable effects on the markets and the Fund’s investments.
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.
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
40
Appendix
A
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
will 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.
41
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”), Global Depositary Receipts (“GDRs”), 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.
42
Appendix
A
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 the
Funds’ 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. The Funds
may invest in derivative instruments including without limitation, options,
futures, options on futures, forward contracts, swaps, options on swaps,
structured securities and other derivatives relating to foreign currency
transactions. Derivatives may be used for both hedging and nonhedging 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. Derivative instruments may
be harder to value, subject to greater
43
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 nonhedging purposes 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 the 15% limitation in illiquid investments. In the
event that changes in the portfolio or other external events cause a 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.
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.
The 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.
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
44
Appendix
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, a 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.
Temporary
Investment Risks. Each Fund may, for temporary defensive purposes (and to the
extent it is permitted to invest in the following), invest up to 100% of its
total assets in:
◼
U.S.
Government Securities
◼
Commercial
paper rated at least A-2 by Standard & Poor’s, P-2 by Moody’s or having a
comparable credit rating by another 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
◼
ETFs
◼
Other
investment companies
◼
Cash
items
When a
Fund’s assets are invested in such instruments, the Fund may not be achieving
its investment objective.
Risks
of Writing Index Call Options. When the
International Equity Income Fund writes (sells) MSCI EAFE Index (or other index
or related ETF) call options, it foregoes the opportunity to benefit from an
increase in the value of the relevant index above the exercise price (plus the
premium received) of the option, but the Fund continues to bear the risk of a
decline in the value of the relevant index. As the seller of the index call
options, the International Equity Income Fund receives cash (the “premium”) from
the purchaser. Depending upon the type of call option, the purchaser of an index
call option either (i) has the right to any appreciation in the value of the
index over a fixed price (the “exercise price”) on a certain date in the future
(the “expiration date”) or (ii) has the right to any appreciation in the value
of the index over the exercise price at any time prior to the expiration of the
option. If the purchaser does not exercise the option, the Fund retains the
premium and makes no payments to the purchaser. If the purchaser exercises the
option, the Fund pays the purchaser the difference between the price of the
index and the exercise price of the option. The premium, the exercise price and
the market value of the index determine the gain or loss realized by the Fund as
the seller of the index call option. The Fund can also repurchase the call
option prior to the expiration date, ending its obligation. In this case, the
cost of entering into closing purchase transactions will determine the gain or
loss realized by the Fund. There is no assurance that a liquid market will be
available at all times for the Fund to write call options or to enter into
closing purchase transactions. In addition, the premiums the Fund receives for
writing call options may decrease as a result of a number of factors, including
a reduction in interest rates generally, a decline in stock market volumes or a
decrease in the price volatility of the underlying securities. For more
information see “Portfolio Securities and Techniques—Options on Securities,
Securities Indices and Foreign Currencies.”
|
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.
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 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.
45
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.
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.
Convertible
Securities. Each 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. A Fund
may, to the extent consistent with its investment policies, purchase or sell
foreign currencies on a cash basis or through forward contracts. A forward
contract involves an obligation to purchase or sell a specific currency at a
future date at a price set at the time of the contract. 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, the Funds may enter into foreign currency transactions to seek a
closer correlation between a Fund’s overall currency exposures and the currency
exposures of the Fund’s performance benchmark. The 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).
The 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.
46
Appendix
A
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.
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.
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 as well as other non-U.S. dollar currencies). 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.
Treasury Securities, which include, among other things, the separately traded
principal and interest components of securities guaranteed or issued by the U.S.
Treasury if such components are traded independently under the Separate Trading
of Registered Interest and Principal of Securities program, 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
that issue U.S. Government Securities 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.
47
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.
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,
the 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 option period. Each Fund may write (sell) call
and put options and purchase put and call options, on any securities and other
instruments in which the Fund 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
48
Appendix
A
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.
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, 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, Index Swaps and Currency Swaps. Each Fund
may invest in equity swaps, index swaps and currency 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. Index swaps
allow one party or both parties to a swap agreement to receive one or more
payments based off of the return, performance or volatility of an index or of
certain securities which comprise the index. Currency swaps involve the exchange
of the parties’ respective rights to make or receive payments in specified
currencies.
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, 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.
49
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.
Non-Investment
Grade Fixed Income Securities.
Non-investment grade fixed-income securities and unrated securities of
comparable credit quality (commonly known as “junk bonds”) are considered
speculative. In some cases, these obligations may be highly speculative and have
poor prospects for reaching investment grade standing. Non-investment grade
fixed income securities are subject to the increased risk of an issuer’s
inability to meet principal and interest obligations. These securities, also
referred to as high yield 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.
Non-investment
grade fixed income securities are often issued in connection with a corporate
reorganization or restructuring or as part of a merger, acquisition, takeover or
similar event. They are also issued by less established companies seeking to
expand. Such issuers are often highly leveraged and generally less able than
more established or less leveraged entities to make scheduled payments of
principal and interest in the event of adverse developments or business
conditions.
Non-investment
grade securities are also issued by governmental bodies that may have difficulty
in making all scheduled interest and principal payments. The market value of
non-investment grade fixed income securities tends to reflect individual issuer
developments to a greater extent than that of higher rated securities which
react primarily to fluctuations in the general level of interest rates. As a
result, a Fund’s ability to achieve its investment objectives may depend to a
greater extent on the Investment Adviser’s judgment concerning the
creditworthiness of issuers than funds which invest in higher-rated securities.
Issuers of non-investment grade fixed income securities may not be able to make
use of more traditional methods of financing and their ability to service debt
obligations may be affected more adversely than issuers of higher-rated
securities by economic downturns, specific corporate or financial developments
or the issuer’s inability to meet specific projected business forecasts.
Negative publicity about the junk bond market and investor perceptions regarding
lower rated securities, whether or not based on fundamental analysis, may
depress the prices for such securities.
A holder’s
risk of loss from default is significantly greater for non-investment grade
fixed income securities than is the case for holders of other debt securities
because such non-investment grade securities are generally unsecured and are
often subordinated to the rights of other creditors of the issuers of such
securities. Investment by a Fund in defaulted securities poses additional risk
of loss should nonpayment of principal and interest continue in respect of such
securities. Even if such securities are held to maturity, recovery by a Fund of
its initial investment and any anticipated income or appreciation is
uncertain.
The
secondary market for non-investment grade fixed income securities is
concentrated in relatively few market makers and is dominated by institutional
investors, including mutual funds, insurance companies and other financial
institutions. Accordingly, the secondary market for such securities is not as
liquid as, and is more volatile than, the secondary market for higher-rated
securities. In addition, market trading volume for high yield fixed income
securities is generally lower and the secondary market for such securities could
shrink or disappear suddenly and without warning as a result of adverse market
or economic conditions, independent of any specific adverse changes in the
condition of a particular issuer. The lack of sufficient market liquidity may
cause a Fund to incur losses because it will be required to effect sales at a
disadvantageous time and then only at a substantial drop in price. These factors
may have an adverse effect on the market price and the Funds’ ability to dispose
of particular portfolio investments. A less liquid secondary market also may
make it more difficult for the Funds to obtain precise valuations of the high
yield securities in their portfolios.
Credit
ratings issued by credit rating agencies are designed to evaluate the safety of
principal and interest payments of rated securities. They do not, however,
evaluate the market value risk of non-investment grade securities and,
therefore, may not fully reflect the true risks of an investment. In addition,
credit rating agencies may or may not make timely changes in a rating to reflect
changes in the economy or in the conditions of the issuer that affect the market
value of the security. Consequently, credit ratings are used only as a
preliminary indicator of investment quality.
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. 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.
50
Appendix
A
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 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.
51
Appendix
B
Financial
Highlights
The
financial highlights tables are intended to help you understand the Fund’s
financial performance for the past 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
most recent annual report (available upon request).
|
|
Goldman
Sachs International Equity ESG Fund | ||||
|
|
Class
P Shares | ||||
|
|
Year
Ended October 31, | ||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 |
|
Per
Share Data | |||||
|
Net
asset value, beginning of year |
$21.91 |
$30.87 |
$21.42 |
$21.05 |
$18.23 |
|
Net
investment income(a) |
0.50
(b) |
0.39 |
0.33 |
0.11 |
0.36 |
|
Net
realized and unrealized gain (loss) |
1.99 |
(7.47
) |
9.19 |
0.69 |
2.79 |
|
Total
from investment operations |
2.49 |
(7.08
) |
9.52 |
0.80 |
3.15 |
|
Distributions
to shareholders from net investment income |
(0.24
) |
(0.40
) |
(0.07
) |
(0.43
) |
(0.33
) |
|
Distributions
to shareholders from net realized gains |
– |
(1.48
) |
– |
– |
– |
|
Total
distributions |
(0.24
) |
(1.88
) |
(0.07
) |
(0.43
) |
(0.33
) |
|
Net
asset value, end of year |
$24.16 |
$21.91 |
$30.87 |
$21.42 |
$21.05 |
|
Total
Return(c) |
11.39
% |
(24.25
)% |
44.64
% |
3.67
% |
17.73
% |
|
Net
assets, end of year (in 000's) |
$95,559 |
$89,831 |
$132,657 |
$64,838 |
$68,987 |
|
Ratio
of net expenses to average net assets |
0.85
% |
0.85
% |
0.85
% |
0.86
% |
0.89
% |
|
Ratio
of total expenses to average net assets |
0.97
% |
0.98
% |
1.09
% |
1.30
% |
1.29
% |
|
Ratio
of net investment income to average net assets |
1.93
%(b) |
1.52
% |
1.16
% |
0.55
% |
1.88
% |
|
Portfolio
turnover rate(d) |
23
% |
35
% |
39
% |
55
% |
41
% |
(a)
Calculated
based on the average shares outstanding methodology.
(b)
Reflects
income recognized from withholding tax reclaims 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 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.
(d)
The
Fund’s portfolio turnover rate is calculated in accordance with regulatory
requirements, without regard to transactions involving short term
investments
and
certain derivatives. If such transactions were included, the Fund’s portfolio
turnover rate may be higher.
52
Appendix
B
|
|
Goldman
Sachs International Equity Income Fund | ||||
|
|
Class
P Shares | ||||
|
|
Year
Ended October 31, | ||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 |
|
Per
Share Data | |||||
|
Net
asset value, beginning of year |
$13.20 |
$15.98 |
$12.17 |
$14.23 |
$13.86 |
|
Net
investment income(a) |
0.50 |
0.44 |
0.47 |
0.30 |
0.44 |
|
Net
realized and unrealized gain (loss) |
1.98 |
(2.77
) |
3.72 |
(1.79
) |
1.61 |
|
Total
from investment operations |
2.48 |
(2.33
) |
4.19 |
(1.49
) |
2.05 |
|
Distributions
to shareholders from net investment income |
(0.38
) |
(0.45
) |
(0.38
) |
(0.57
) |
(0.39
) |
|
Distributions
to shareholders from net realized gains |
(0.01
) |
– |
– |
– |
(1.29
) |
|
Total
distributions |
(0.39
) |
(0.45
) |
(0.38
) |
(0.57
) |
(1.68
) |
|
Net
asset value, end of year |
$15.29 |
$13.20 |
$15.98 |
$12.17 |
$14.23 |
|
Total
Return(b) |
18.84
% |
(14.90
)% |
34.55
% |
(10.89
)% |
17.34
% |
|
Net
assets, end of year (in 000's) |
$49,599 |
$33,413 |
$28,616 |
$20,799 |
$32,643 |
|
Ratio
of net expenses to average net assets |
0.84
% |
0.84
% |
0.84
% |
0.84
% |
0.85
% |
|
Ratio
of total expenses to average net assets |
0.92
% |
1.06
% |
1.32
% |
1.51
% |
1.76
% |
|
Ratio
of net investment income to average net assets |
3.21
% |
2.95
% |
3.05
% |
2.33
% |
3.37
% |
|
Portfolio
turnover rate(c) |
18
% |
12
% |
28
% |
51
% |
27
% |
(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
and
certain derivatives. If such transactions were included, the Fund’s portfolio
turnover rate may be higher.
53
Fundamental
International Equity Funds Prospectus (Class P
Shares)
|
FOR
MORE INFORMATION |
Annual/Semi-Annual
Report
Additional
information about the Fund’s investments is or will be available in the Fund’s
annual and semi-annual reports to shareholders. In the Fund’s annual report 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 Funds 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.
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 Funds
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
Trust's investment company registration number is 811-05349.
GSAM®
is a registered service mark of Goldman Sachs & Co. LLC.
EQINTPRO-24P